Thursday, September 20, 2012

Why We Need to Address Income Inequality

One of the questions I get often is why I keep dogmatically driving home points when people have already made up their minds. The answer is pretty simple: because you can, and do, change minds when you present an argument in a way people can relate to it, a way that they comprehend. I know because it's happened to me.

Despite many people's protests that I am leftists, I am very strongly pro free enterprise, and have been for many years. The only way to achieve economic growth, really, is to give people incentive to keep reaching higher, to keep moving forward i their careers. So the idea of income equality is a bit disconcerting at times; after all, if a burger flipper made as much as a CEO, it would be easier to stay a burger flipper.

In the 2002 Wisconsin elections, I had the pleasure of meeting a man named Tony Palmeri. He was a University of Wisconisn -- Oshkosh professor, and had a prety good understanding of labor issues. We were addressing the ida of collective bargaining, and he commented that every time collective bargaining came up, opponents would refer to it as socialism. The pproblem is, in a socialist sytem, your wages are set by the government. Conversely, in free enterprise, you have the right to shop goods and services on the open market, and the only thing a worker has to market is his labor.

Thanks to the magic of Facebook, we've all seen a half a billion graphs on income inequality in the us. It would be almost overkill to add more. But the basic truth is, CEOs and top level employees are earning more, and workers are earning less (against inflation). Of course, the laissez faire economist would insist that this is because of the basic supply/demand curve; that because of high unemployment, the supply exceeds the demand in the workforce.

But this is an inadequate answer as llong as we are outsourcing jobs and issuing H1B visas. There is obviously significant demand, and in some areas, the demand still exceeds the supply. But more to the point, many costs have actually risen during this time, while worker's pay has not.

And this brings me to my chief point: addressing income inequality. While it's tempting to say that a CEO should be able to make as much as they wish, in practice, that's just not working. Seven figure salaries are creating a super wealthy class of people who not only will never have to work, but whose heirs for several generations down will never have to work.

While the founding fathers didn't speak to this, it's a fair bet their opposition to titles of nobility stems directlly from the idea that creating a leisure class that's free from the encumbrances of labor because of excessive wealth is pretty distasteful.

Whether the wealthy want to acknowledge it, the working class deliver the value to a product. An IT worker, for instance, is the brand. When they leave employment, all their certs, their skills, their knowledge leave with them. A teacher also brings the same qualities to the table. In fact, in every area of the workforce, a knowledgeable employee brings things to the table that can't be replaced by simply walking to the day labor establishment and pointing to the guy with the yellow shoes.

I have long said that I LOVE capitalism; I just want to be included, not exploited. And a good capitallist recognizes that. They recognize the value of their employees, the value of someone who has the knowledge to keep thei gears of industry turning while they head out to the Hamptons. And they pay accordingly.

We're at a time when a llot of Americans are at their breaking point. And they're where they are because they're fed up of spending their lives in a hamster wheel, moving forever, but never forward. They want aa promise, a hope, a legacy that only the promise of upward mobility can bring. And they want to know that the simple costs of living will not drive them to bankruptcy and leave them intestate. That's a problem that can only be solved by paying executives a bit less and paying the working class a bit more.

Call it wealth redistribution if you want. I call it compassion.

Wednesday, September 19, 2012

America's Economic Problem: We've Overvalued the Middleman

When I held a job not long ago in education, I was quite excited at the opportunity. I had, at one time, acquired a great number of older computers in the hopes they could be applied in the education sector. After all, I was constantly hearing complaints about how poor school districts were, and how they were struggling on barebones budgets.

I didn't spend much time there, but I did spend enough time to find out that just isn't true. The truth is, there's a boatload of money out there, especially for rural schools and schools with high free lunch program participation.

I was then excited about the possibility of using my thrifty approach to spread the school's dollar further. Unfortunately, once a vendor knows you work for a school district, they get dollar signs in their eyes. I distinctly recall a vendor trying to push off computer models that were nearly 6 years old for $300 per unit. When you can get a reliable new machine for under $500 per unit, that's really not a spectacular deal.

But as I looked at the vendor relationships, I began realizing the key role the middlemen played in the business transactions. And that there were aa llot of them, many layers of folks dipping their hands in the till somewhere between the vendor and us. And I realized it's happening in a lot of industries, notably healthcare.

The problem we have is that the people who get paid the most are the people who do not actually PRODUCE anything. They certainly provide a value added service in expanding the market for a particular product, and moving that product. But they simply aren't worth the price they're asking.

I have worked, for instance, with resellers. Consignment stores and resale shops definitely provide a value in getting items to the market. But their margins, once in the 10 to 15% range, crept upto 25%. Even at 25%, it was still a value, as it saved me the hassle of finding a buyer for my goods. But after a "revelation" when they travelled to a larger city where commissions were 65%, they increased their commissions to 50%.

Now, some people may feel this is a good idea, but it doesn't work for me. If you pay me 50 cents on the dollar or less for the items I'm selling, well, then, I'll skip the middleman, sell it at 75% of my planned asking price, and save the buyer a bit while making more for myself. The middleman is just not worth that much.

And we've seen the trend in the current economy. While workers' wages have been stagnant, the wages for middlemen have increased. A business degree is still considered a "hot" degree despite an apparent overabundance of business majors. And it often seems that for every person doing the work, there are two or three people moving money.

I don't think middlemen are without value; they've certainly created a broader market with greater potential. But they've greatly increased the demands on returns on their investment to unrealistic and unsustainable levels. Until we get back to realizing that the wealth of a nation is in the workforce, not on wall street, this problem will not get better.

The Romney Gambit

Ever since the release of Romney's comments on the 47% that he described as "victims" and "dependents", something has not set right with me. And it has to do with the nature of American politics. When you run for the highest office in the country, you've already been vetted, you've already learned how to handle a mic, and what to say and what not to say when the cameras are rolling.

Sometime late last night, amidst the Facebook fury that continued to pour out, it hit me. Romney didn't misspeak, this was very deliberate. I believe that the Romney campaign is employing a new strategy to separate the two candidates. Let's call it the Romney Gambit.

It has long been theorized that to understand how someone's mind works, you need to look at the accusations of their opponents. In the case of the Republican Party, look back no further than 2008, when they accused the Obama campaign of using race to bait the undecideds. They charged the Dems with planting the idea that if you didn't vote for Obama, you were racist.

Switch "Obama" with "Romney" and "racist" for "classist", and you have the Romney gambit in a nutshell. Buy demanding that 47% are victims, he is challenging voters to prove that they are NOT part of the 47%, that they are in charge of their own destiny. He is charging everyone who has ever bought a scratch ticket, every worker who has ever tried to burst that glass ceiling, to prove that they are not part of the dregs, the commoners, the unwashed masses.

It's a risky proposition, to be sure: potentially alienate half of the American public in order to push the other half to the polls to prove they're worthy, to pony up to the Republican trough in the mere hopes that the 1% will throw their breadcrumbs to the 99.

But gambits are risky, and it's one that just may work. Certainly a lot of self identified conservatives that are part of the 47% Romney chastised have come up to defend his statements. And Romney has not backed away from his statements, something he would have done had it been an actual gaffe.

Monday, September 17, 2012

No Worker Left Behind

This is a bad time in America for labor. And some would say it's a bad time to speak up for worker's rights. But the truth is, in all of my 42 years of existence, I can't think of a BETTER time to speak for worker's rights. To that end, I propose the following program, which I call "No Worker Left Behind". It's an imperfect proposal, to be sure, and probably contains ideas that both left and right reject, but I'd like to use it as my contribution to start the conversation on how we should address workers' rights in America.

1. Minimum wage should be set regionally, with a base that puts a full time worker's salary at 80% of the poverty line for a family of four. Based on a 40 hour week, this would give a median minimum wage of $9.22/hour ($23,050 x .8 = 18440/2000 = $9.22). This minimum wage would have a regional multiplier based on the area cost of living. Thus, a region where the cost of living is 85% of the national average would have a minimum wage of $7.84; an area with a cost of living of 120% of the national average would have a minimum wage of $11.06.

2. Small businesses and startups that meet certain defined criteria would receive a stipend of up to 50% of their employee's salary if they hired the long term unemployed or employees from disadvantaged demographics, which would include not only minorities, but employees from families with multigenerational poverty.

3. Businesses would be allowed to outsource, but they would pay a tariff equal to two times the percentage of their workers times the tariff charged to the country where their employees are outsourced. For instance, if they outsource 20% of their workforce, they would pay 40% of the tariff they would pay if they did business within that country; if they outsourced 80%, they would pay 160%. Exempt employees would NOT be included in the headcount of employees for this tariff program. Tariffs would be applied to the small business/startup stipend mentioned in point 2, as well as workforce development programs.

4. Workforce development programs would include a relocation grant/resettlement program for the longterm unemployed. This would allow unemployed individuals to be able to afford relocation to seek employment.

5. All employees will be advised of their right to unionize. While they wil not be required to join a union if they work in a "right to work" state, they must be advised of their right, and that the employer does not have rights to terminate them if they join the union.

6. 401k/pension plans will be portable, meaning they don't have to move from one plan to another when they change jobs. While employers will not have to match employee contributions, the employee will be able to move their payroll deductions to allow their old plan to accumulate.

7. Businesses will be allowed to deduct all contributions to employees' salary and benefits.

8. Businesses that cap CEO salaries and payout over 50% of net company profits to their nonexempt workforce on a proportionate scale will receive a 25% tax liability reduction.

9. We will work to provide legal immigration status to any worker who has committed no violent felonies, meets a strict residency requirement, and has worked/attended school continually for at least 90% of their residency.

10. H1B visas shall not be issued until a database of workforce applicants in all 50 states has been searched and eligible candidates interviewed and, if qualified, offered relocation assistance.

I don't think of any of these points as being particularly radical, but am interested in CIVIL discussion on the ideas I have advanced.

Tuesday, September 11, 2012

An Open Letter to my Republican Friends

You had your chance. You blew it.

Despite the tongue in cheek title of this blog, I support the idea of a free market. I am prolife (although my definition of "prolife" is more inclusive than my Republican friends; I hold it to mean anti-war, antiabortion, anti death penalty, antipoverty), pro Second Amendment, and I believe in smaller government (via smarter government, but that's a whole other blog post right there). In short, I should be custom made for the Republican Party.

But I've had enough. I've had enough of the slander of our sitting President by rank-and-file Republicans, I've had enough of Republicans claiming to want smaller government while wanting to set a landmark by rewording the Constitution to deny rights to a certain group of citizens (a first), and enough of the hypocrisy of someone who won't vote for a candidate because he MIGHT be a Muslim (a charge he has consistently denied), but has no problem voting for a religion founded on the notion that all mainstream Christian faiths are of the devil.

And more to the point, I've had enough with the utter contempt shown to the working class. While denying they are doing so, virtually every one of the Republicans I have met supports a flat or a "fair" tax, effectively lobbying to lower taxes on the wealthy while raising them on the lower classes (falling in line with the well travelled myth that the working poor pay no taxes).

And I could go even further, but in the brevity will address as my final point in this rant the clear obstructionism of every bill put forward by Dems since the GOP gained enough power to obstruct. I cannot support people who are openly rooting for the failure of our President.

The true colors of the GOP shone brightly at this year's convention when they denied Ron Paul a chance even to speak. They broke their own rules to marginalize Paul, and did not eeven give delegates the voice they should have been promised in the process. And this wasn't about Paul, per se, but about his right to speak.

And Mitt Romney is by far the worst possible candidate you could have chosen. Granted, none of the candidates you proffered had any real chance of being carved in stone by future generations, but the rest of the pack was better than Romney by a long shot. This is a man who believes corporations are people, yet does not believe they bear the same tax responsibilities; who raids companies and guts them, outsourcing their jobs to other countries. Remember that giant sucking sound Ross Perot warned us about in 1992? It comes right out of Romney's office.

The consolation you have given me is to urge me to vote the lesser of two evils. You don't want that. Trust me, you don't. As a person who, for good reason, views the LDS church in the same way that a child who grew up in the Second Mile views Penn State, I cannot, I will not, vote for a priesthood holder in that church as a "lesser of two evils". Sorry, but the lesser of two evils vote would go to Obama.

If you lose this election, it will be because you failed to connect with the people who do not identify with your party. Your party faithful would vote Republican even if you put Adolf Hitler on the ticket, but independents aren't so inclined.

I still remain true to my core beliefs and vote the person, not the party. But the Republican Party continues to show itself unworthy of my vote. And unless that changes, they are unlikely to ever get my vote.

Friday, September 7, 2012

An Open Letter to my Democrat Friends

In the midst of the political back and forth, a lot of pithy words have been spoken, and a lot of feelings have been hurt. I cannot adequately sum up my feelings in a short post on Facebook, so I felt a lengthier, more descriptive blog post to be appropriate.

The first and foremost thing I would like you to know is that I support our President. While President Obama and I do not see eye to eye on a lot of things, he is my President and I will continue to afford him the respect due to the office until such time as he is voted out or termed out of office. While I am a conservative, I do NOT stand with other self professed conservatives in demanding that President Obama present his birth certificate (again), or somehow prove his Christian faith. As far as I am concerned, both matters are settled.

And in exploring the lesser of two evils, I gave serious, hard thought to voting Obama. But I have decided I cannot, in part because of my beliefs on the sanctity of life and opposition to any unnecessary warfare, but in large part for the reasons that follow:

I believe that I do not stand alone in being a conservative who respects diversity both of race and culture, and who believes that we CAN allow for free enterprise to thrive while still not neglecting the world of suffering and poverty outside our window. A conservative who values life while recognizing the strongest weapon against abortion is not legislation, but opportunity, and who is THANKFUL for Roe vs. Wade for bringing the ugly reality of abortion out of the back alleys and the black market clinics and onto the boardwalk where we must confront it, not with hate, but with hope.

A vote for Obama in a world that deals in generalizations is a world where my vote will be labelled as a Democrat vote rather than a disenfranchised conservative vote. While there are admittedly unintended consequences of an independent vote, I have weighed them and accept them, for the longterm strategy of making the statement that I am conservative, but am not represented within the hallowed halls of the GOP.

We cannot function as a single party system in either direction. The Democratic Party needs at least one other viable party to provide a balanced perspective and not allow it to be steered by extremist elements that are just as disconcerting as the extremists on the right.

For better or worse, at this moment, that other viable party, that foil is the GOP. Whether another party rises and takes its place or whether the GOP reforms to better represent the entirety of the American people remains to be seen, but one thing is sure: there will need to be people ready to lend their voices to the debate that don't have the racial hatred and religious segregationist mindset of so many of the Tea Party right, and who can see that it is in the best interest of our nation to move forward together rather than apart.

It is my hope that at some point I can be one of those voices, for whatever small contributions I will offer.

And so in November my vote will be counted for Gary Johnson, not because I believe in everything Gary Johnson stands for but because I hope that if enough conservatives band together to say "we are the conservative, and the GOP does NOT represent us", our voices will be heard.

This is not a position I have taken it lightly, and it is one I will not surrender lightly. I pray for the direction of the nation, and I hope you understand that my vote this November is not a vote against you or your core values, but a vote for a return to cooperation and understanding.