Tag Archives: Republicans

The Facts: Deregulation=Republicans=Economic Crisis

Myths about the Mortgage Meltdown

Myth 1: Clinton caused the mortgage meltdown
Myth 2: Low income lending caused the mortgage meltdown
Myth 3: Bush did not contribute to the mortgage melt down
Myth 4: The private (free market) was not the cause of the mortgage meltdown

The increase of MBS (mortgage backed securities) purchased by the GSEs (Fannie and Freddie) from 2003 through 2006 under pressure from the Bush administration to meet their 56% affordable housing requirement started PRIVATE, market speculation – a 30 trillion dollar bubble worldwide on the PRIVATE, credit default swap derivatives markets – this was the cause of the housing bubble that burst into the subsequent economic crisis. Deregulation of the financial market allowed this bubble to occur. The private (free market) speculative derivative bubble caused the meltdown not the low income housing increase and subsequent loses. The low income housing loses in the Bush years resulted in tens of billions of dollars. The private market speculation for derivatives, 30 trillion dollars, is orders of magnitudes larger than the low income housing loses during the Bush years and is the only amount large enough to bring down the markets worldwide.

To understand how all this created the perfect storm see:

Even Alan Greenspan, a Republican, admitted in his interview with Brian Naylor:

BRIAN NAYLOR: The man once known as the maestro for his direction of the nation’s economy as Fed chairman sat for four long hours yesterday, watching lawmakers who once cheered his performances turn into harsh critics. Testifying before the House Oversight Committee, Greenspan didn’t down play the severity of the crisis in the nation’s markets.
Mr. ALAN GREENSPAN (Former Chairman, Federal Reserve): We are in the midst of a once-in-a-century credit tsunami. Central banks and governments are being required to take unprecedented measures.
NAYLOR: Under questioning from Democrats on the panel, Greenspan conceded he might have been, as he put it, partially wrong in not moving to regulate trading of some derivatives that are among the root causes of the credit crisis. He also admitted his free market ideology may be flawed. This exchange with committee chairman, Democrat Henry Waxman of California, verged on the metaphysical.
Representative HENRY WAXMAN (Committee Chairman, Democrat, 30th District of California): You found a flaw in the reality…
Mr. GREENSPAN: Flaw in the model that I perceived is a critical functioning structure that defines how the world works, so to speak.
Rep. WAXMAN: In other words, you found that your view of the world, your ideology was not right. It was not working.
Mr. GREENSPAN: How it – precisely. That’s precisely the reason I was shocked, because I’ve been going for 40 years or more with very considerable evidence that it was working exceptionally well.

In September 2002, Greenspan, Treasury Secretary Paul O’Neill, Securities and Exchange Commission chairman Harvey Pitt, and Commodity Futures Trading Commission chairman James Newsome wrote a letter to members of Congress to note their opposition to legislation that would regulate derivatives.

They wrote:

“We believe that the [over-the-counter] derivatives markets in question have been a major contributor to our economy’s ability to respond to the stresses and challenges of the last two years. This proposal would limit this contribution, thereby increasing the vulnerability of our economy to potential future stresses….
We do not believe a public policy case exists to justify this governmental intervention. The OTC (over the counter) markets trade a wide variety of instruments. Many of these are idiosyncratic in nature….
While the derivatives markets may seem far removed from the interests and concerns of consumers, the efficiency gains that these markets have fostered are enormously important to consumers and to our economy.
Greenspan and the others urged Congress “to be aware of the potential unintended consequences” of legislation to regulate derivatives.
They got it exactly wrong. Swaps and derivatives ended up undermining, not bolstering, the economy.


Certainly, a significant event that started the collapse happened during the last few years of the Clinton administration. The Gramm–Leach–Bliley Act of 1999, known as financial services deregulation,

“It repealed part of the Glass-Steagall Act of 1933, opening up the market among banking companies, securities companies and insurance companies. The Glass-Steagall Act prohibited any one institution from acting as any combination of an investment bank, a commercial bank, and an insurance company.”


The bill was a compromise between the Clinton Administration and the House Republicans:

“The bill then moved to a joint conference committee to work out the differences between the Senate and House versions. Democrats agreed to support the bill after Republicans agreed to strengthen provisions of the anti-redlining Community Reinvestment Act and address certain privacy concerns; the conference committee then finished its work by the beginning of November. On November 4, the final bill resolving the differences was passed by the Senate 90-8, and by the House 362-57. This legislation was signed into law by Democratic President William Jefferson “Bill” Clinton on November 12, 1999.”

“In 2003, the two [GSEs, Fannie and Freddie] bought $81 billion in subprime securities. In 2004, they purchased $175 billion — 44 percent of the market. In 2005, they bought $169 billion, or 33 percent. In 2006, they cut back to $90 billion, or 20 percent. Generally, Freddie purchased more than Fannie and relied more heavily on the securities to meet goals.
In 1997 the GSEs owned about 12% of the total market share of these securities. In 2001 the GSEs owned about 15% of the total market share of these securities. In 2008 this percentage had grown dramatically to 40%.
In intervening years it was much more. President Bush directed his HUD director to pressure the GSEs into buying massive amounts these MBS [Mortgage Backed Securities] on the open market. This created huge market for these securities and encouraged more and more risky private sector mortgages so they could be bought, bundled and sold on the open market largely to Fannie and Freddie.
But by 2004, when HUD next revised the goals, Freddie and Fannie’s purchases of subprime-backed securities had risen tenfold. Foreclosure rates also were rising.
That year, President Bush’s HUD ratcheted up the main affordable-housing goal over the next four years, from 50 percent to 56 percent. John C. Weicher, then an assistant HUD secretary, said the institutions lagged behind even the private market and “must do more.”
For Wall Street, high profits could be made from securities backed by subprime loans. Fannie and Freddie targeted the least-risky loans. Still, their purchases provided more cash for a larger subprime market.
“That was a huge, huge mistake,” said Patricia McCoy, who teaches securities law at the University of Connecticut. “That just pumped more capital into a very unregulated market that has turned out to be a disaster.””
“In 2003, the two bought $81 billion in subprime securities. In 2004, they purchased $175 billion — 44 percent of the market. In 2005, they bought $169 billion, or 33 percent. In 2006, they cut back to $90 billion, or 20 percent. Generally, Freddie purchased more than Fannie and relied more heavily on the securities to meet goals.
“The market knew we needed those loans,” said Sharon McHale, a spokeswoman for Freddie Mac. The higher goals “forced us to go into that market to serve the targeted populations that HUD wanted us to serve,” she said.”
But because Fannie and Freddie were buying mortgage-backed securities rather than the actual subprime loans, their involvement came too late to require stiffer standards from lenders.
Fannie and Freddie “made no progress in civilizing the market,” said Sandra Fostek, a senior regulator at HUD.
William C. Apgar Jr., who was an assistant HUD secretary under Clinton, said he regrets allowing the companies to count subprime securities as affordable.
“It was a mistake,” he said. “In hindsight, I would have done it differently.””

Conclusion: Even though Fannie, Freddie and FHA had much less to do with new loans in the Bush administration they bought huge amounts of MBS in those years to meet President Bush’s 56% housing requirement.

Additionally, the President encouraged the GSEs to “focus” their “core housing mission” “with respect to low-income Americans and first-time homebuyers” in the following statement from the White House,

“The Administration strongly believes that the housing GSEs should be focused on their core housing mission, particularly with respect to low-income Americans and first-time homebuyers. Instead, provisions of H.R. 1461 that expand mortgage purchasing authority would lessen the housing GSEs’ commitment to low-income homebuyers.”

Conclusion: President Bush had directed HUD to require the GSEs to meet the 56% low income housing requirement. This pressured the GSEs to buy massive MBS. This created a massive market for junk mortgages.

Credit Default Swaps are insurance policies on mortgages, sort of like the futures market for commodities for MBS. Credit Default Swaps are not regulated. The government did not own credit default swaps. This was purely a private market commodity.

Between 2000 and 2008, the market for such swaps ballooned from $900 billion to more than $30 trillion.

This is what brought AIG down.

Goldman Sachs played both sides MBS and Credit Default Swaps.

When the Fannie and Freddie bought huge amounts of MBS, pressured by the Bush administration, the market for credit default swaps went astronomical. This is ultimately what broke them and resulted in tax payers having to bail them out.

If you do not believe me what about Greenspan, Treasury Secretary Paul O’Neill, Securities and Exchange Commission chairman Harvey Pitt, and Commodity Futures Trading Commission chairman James Newsome (quoted above)?

Here are the numbers that show:
1) the percent of subprime lending to total mortgage originations
2) the percent of Alt-A lending to total mortgage originations – An Alt-A mortgage, short for Alternative A-paper, is a type of U.S. mortgage that, for various reasons, is considered riskier than A-paper, or “prime”, and less risky than “subprime,” the riskiest category. Alt-A interest rates, which are determined by credit risk, therefore tend to be between those of prime and subprime home loans. Typically Alt-A mortgages are characterized by borrowers with less than full documentation, lower credit scores, higher loan-to-values, and more investment properties. A-minus is related to Alt-A, with some lenders categorizing them the same, but A-minus is traditionally defined as mortgage borrowers with a FICO score of below 680 while Alt-A is traditionally defined as loans lacking full documentation. Alt-A mortgages may have excellent credit but may not meet underwriting criteria for other reasons – http://en.wikipedia.org/wiki/Alt-A
3) GSE backed loans


the percent of the total market of GSE and FHA, sub-prime loans (Col 1)
the default percentage of the total market (Col 2)
the amount in billions of the total market defaults (Col 3 )
Note: All currency amounts in billions
Year Col 1 Col 2 Col 3
1997 10% 0.9% $8
1999 13% 0.9% $12
2001 12% 0.7% $17
2003 11% 0.6% $21
2005 11% 1.5% $9
2007 13% 0.5% $28
Detail for Subprime Loans – see endnotes for sources (page 10 pdf)
GSE Investment Portfolio and MBS ($ Billions, Left Axis)
GSE % of Total Outstanding Single Family Mortgages (Right Axis)
GAO report (page 18 for sub-prime data and page 21 for default rates data in pdf):
http://www.aei.org/docLib/Pinto-High-LTV-Subprime-Alt-A.pdf (page 12 pdf)

This data clearly shows that:

The increase of low income, sub-prime loans and the low overall default rate of all loan originations (1.5% in 2005 was the highest tracked in this data, through 2007). This dispels that myth that the crisis was caused by loan defaults of low-income folks.

For more informations see – http://www.mixermuse.com/blog/2010/10/14/how-george-bush-and-the-private-mortgage-market-created-the-perfect-storm/

The Obama Administration Raises Unemployment 25% – REALLY?

When Bush Junior took office on January 20, 2001, the national unemployment rate was 4.7%.  When he left office on January 20, 2009 and President Obama took office the national unemployment rate was 9.3% ( http://www.bls.gov/cps/prev_yrs.htm ).  The current unemployment rate as of June 2001 is 9.2% ( http://www.bls.gov/news.release/empsit.nr0.htm ). Doing the math, the increase during the Bush administration was (9.3 / 4.7) * 100 = 198% or a 98% increase in unemployment.  For the Obama administration the math is (9.2 / 9.3) * 100 = 98% or a 2% decrease in unemployment.  The latest Karl Rove, Crossroads, national ad states that the national unemployment rate increased 25% during the Obama administration.  Since unemployment data by definition is published by the Bureau of Labor Statistics, no amount of “private facts” or bold face lies can explain away the real facts.  The Republican lie machine has no problem spending millions of dollars spewing forth unadulterated lies. 

Do these folks really think that sane voters would prefer a 98% unemployment rate increase to 2% percent decrease in unemployment?

Well, what about the long held theory that taxes cuts create jobs and help the economy.  We had 8 years to try this theory out.  Not only did it result in a 98% increase in unemployment but it also resulted in an economic crash and the greatest recession since the Great Depression.  Did it work?  Didn’t the Clinton administration end up with 4 years of a Federal surplus and a 4.7% unemployment rate?  Do voters really want to believe that if we try the Republican’s economic solution again it will work this time?  Are voters that stupid?

Well, what about health care and lassie faire?  We have tried decades of letting the market decide in the Republican promise that the market would solve the problem.  Did it work?  How much longer do we need to TRY the market based approach?  Ok, so let’s get rid of “Obama-care”…is the solution to go back to what we had before?  Was it so much better?  How many more decades do we need to try the market approach?  If we cut everyone off and get rid of the debt, are we willing to let men, women and children die in the streets from lack of health care while we satiate ourselves in our country clubs?  What is the solution?  Is there one?

The more interesting questions are:

1)      What kind of folks continue to spin out lies decade after decade to get and keep political power?

2)      Why does it seem to work?

When an ideology continually repeats lies to sustain and get power the word that describes it is “propaganda”.  The main purpose of propaganda is to manipulate.  There are two assumptions that propaganda proves out:

1)      Those that are have the money and power to create this marketing blitz are the elite “knowers”.  They are willing to do anything to obfuscate their true motives.  Their apparent contradictions are smoking mirrors cleverly designed to play on folk’s emotions and trick folks into supporting their true agenda – protecting the rich and powerful.  At the bottom of this machine is a pure Darwinian belief that power needs no justification, logic or truth.  Power is its own virtue.  Conquest proves who the blessed are and who the cursed are. 

2)      People are stupid.  They are “herdal” and cow-like.  They cannot remember the past and have no sense of logic and rationality.  They are zombies that can be manipulated and controlled by the elite.  They can be made to run straight off a cliff to their own demise and believe the whole time that it is in their best interest.

While the elite would never make such an explicit statement of their intentions, their actions leave no doubt as to what their game really is.  

I hope and want to believe they are wrong.  I want to believe in logic, rationality and history.  I would like to think that there is an intrinsic good in people that will overcome these schemes.  I can’t say that I do not have doubts and maybe the Darwinian instinct is correct.  However, if I were to believe this ideology I would find a certain meaninglessness and futility in existence.  Maybe we should “make friends with the enemy” as Apocalypse Now” maintains.  Maybe we should head straight of the cliffs and thank the wolves that made us believe we were doing it for our own good.  Well, as for me, I am willing to hope against hope, if that is what it takes, to adopt a more optimistic approach to human existence.  I suppose that this may be a kind of Kierkegaardian, existential staking out my “eternal happiness” on an absolute paradox…at least as thought from the dialectic of power.  These choices are left to us individually whether we explicitly know it or tacitly “do it”.  I find the belief that one is the “blessed” and “all-powerful” to be a comic tragedy of one’s own making in which the hero becomes the blind fool and forgets his end will be in the dust with his cows while the only thing that really mattered was humanity and concern, optimism and belief, the virtue of work – of harmony and balance with nature and logic, the scorned simplicity that faces us in the other.

Racism, Sexism, Homophobia and Republicans

In G.W. Bush’s recent interviews for his book “Decision Points” he discusses how he was enraged at Kanye West’s comments that imply he was a racist due to the Katrina disaster and the apparent lack of concern for black, impoverished folks.  The new right has been accused of being racist and sexist but the cutting edge of that movement denies the charge.  The first point I would like to make is that racists and sexists most commonly find their ideological home in the Republican Party.  Recently, the tea party has skirted these accusations.  Ken Buck the tea party candidate for U.S. Senator was caught making a sexist comment about “not wearing high heels” on video.  Mark Kirk, the Republican U.S. Senate candidate in Illinois, was accused of voter intimidation of blacks in Chicago, http://mixermuse.com/blog/2010/10/25/republicans-intimidate-minorities/.  Tea party signs have made derogatory comments about blacks and gays.  The highly charged venom towards Nancy Pelosi goes way beyond the traditional forms of disagreements in politics and appears highly vindictive towards the most effective women Speaker of the House in U.S. history.  It seems to me to cross the line into sexism and rage fueled by a woman beating white men handily at their own game.  In spite of these suspicions, this kind of overt racism, sexism and gay homophobia seems to be relegated the periphery of the Republican Party and can easily be dismissed as extremist party faithfuls. 

The most potent form of racism, sexism and homophobia is what has now become institutional.  Republicans did not have anything against blacks but the Republican faithful in Louisiana, possibly the most Republican state in the United States, was all too happy to let the failing and ancient levees in New Orleans come to their inevitable demise.  Did it matter that those behind the levees were poor and black?  If they were rich and white would that have mattered?  If young, single women were rich, voted and were padding the pockets of Republicans would the Republicans allow the anti-abortion movement to dominate their ideology?  If gays were an important component in Republican successes would they oppose equality as vehemently?  When the institution permits these kinds of injustices the individual is no longer on the hook.  It is the system’s fault, no one is personally responsible.  Some even go so far as to blame it on the Democrats.  Folks do not need to be racist or sexist anymore they can just go along with the status quo to achieve the same social results.  They can even personally state they are abhorred by racism and sexism and still let their conservatism conserve the inequities.  This is a concrete example of how the ‘it’ of truth and the absolution of responsibility in the neutrality of the institution have preserved inequity while absolving the individual (See http://mixermuse.com/blog/2010/11/10/responsibility-and-the-goods/). 

While President Bush had his feelings hurt by Kanye West men, women and children were hurt in much more substantial ways that makes the feelings of Bush quite insignificant…and yet, Bush had his hurt feelings blasted all over the media while selling his memoir.  Here is a thought, why not donate the proceeds of the book to the survivors of Katrina?

Republicans Intimidate Minorities

Mark Kirk, the Republican U.S. Senate candidate in Illinois, told state Republican leaders last week about his plan to send “voter integrity” squads to two predominately African-American neighborhoods of Chicago and two other urban areas of Illinois with significant minority populations “where the other side might be tempted to jigger the numbers somewhat.


“Intimidation” is my word based on this:

  1. “”Voter fraud” has been the rally cry for conservative groups seeking to make it more difficult to cast ballots and suppress minority voter turnout.” Quoted From the Above Article
  2. The video recorded the alderman from the south side of Chicago stating the remarks were an “insult” and “offensive”.
  3. Moreover, the Urban Dictionary defines it this way, “A jew who tries to act black.”  This is offensive to Jews and African-American.  http://www.urbandictionary.com/define.php?term=jigger
  4. Additionally, I can’t speak about Chicago but in Louisiana where I come from the white folks used the word “jig” as an offense to African-Americans.  Occasionally, they would extend that use to “jigger” to refer to the actions of a “jig” as in jigger rigging.  A lexicon is a record of how regular people use words.  In the South, I would not say it was a common usage but just about everyone I knew knew what it meant.  If others have heard “jigger” used in this context, before the the Republican candidate’s comment, the comment would be heard  as an insult, offensive and intimidating.  This may not be how the Senator meant it but I think it is certainly how some might take it as was mentioned in the article.  Here is proof of this statement:

“Jigaboo, jiggabo, jigarooni, jijjiboo, zigabo, jig, jigg, jigga, jigger

(U.S. and UK) a black person (JB) with stereotypical Black features (e.g. dark skin, wide nose, and big lips).[110] Jiggaboo or jigabo is from a Bantu verb tshikabo, meaning meek or servile.[111] There might also be a historical connotation with peek-a-boo, boo boo, boogie and boogie man.”


Federal Deficit and Debt – President Obama vs President Bush

If you look at these numbers you will see that the national debt has gone up every year since 1969 except the last four years of the Clinton administration budget:

Revenues, Outlays, Deficits, Surpluses, and Debt Held by the Public,

1968 to 2007, in Billions of Dollars

Sources: Congressional Budget Office; Office of Management and Budget.

Date         Deficit (-) or Surplus Debt Held by the Public

1968                 -25.2                             289.5

1969                 3.2                                278.1

1970                 -2.8                               283.2

1971                 -23.0                             303.0

1972                 -23.4                             322.4

1973                 -14.9                             340.9

1974                 -6.1                               343.7

1975                 -53.2                             394.7

1976                 -73.7                             477.4

1977                 -53.7                             549.1

1978                 -59.2                             607.1

1979                 -40.7                             640.3

1980                 -73.8                             711.9

1981                 -79.0                             789.4

1982                 -128.0                           924.6

1983                 -207.8                           1,137.3

1984                 -185.4                           1,307.0

1985                 -212.3                           1,507.3

1986                 -221.2                           1,740.6

1987                 -149.7                           1,889.8

1988                 -155.2                           2,051.6

1989                 -152.6                           2,190.7

1990                 -221.0                           2,411.6

1991                 -269.2                           2,689.0

1992                 -290.3                           2,999.7

1993                 -255.1                           3,248.4

1994                 -203.2                           3,433.1

1995                 -164.0                           3,604.4

1996                 -107.4                           3,734.1

1997                 -21.9                             3,772.3

1998                 69.3                              3,721.1

1999                 125.6                            3,632.4

2000                 236.2                            3,409.8

2001                 128.2                            3,319.6

2002                 -157.8                           3,540.4

2003                 -377.6                           3,913.4

2004                 -412.7                           4,295.5

2005                 -318.3                           4,592.2

2006                 -248.2                           4,829.0

2007                 -160.7                           5,035.1


Federal Debt Under President George W. Bush

President Bush started with 3.3196 trillion dollars of public debt.

He left his 8 years (6 years with control of both branches of Congress) with 7.8111 trillion dollars of public debt.

This means the public debt increased 4.4915 trillion dollars during his administration.

Federal Debt Under President Obama

Here are the numbers for the Obama administration projected out to 21014:

Year Gross Debt in Billions as % of GDP Debt Held By Public ($Billions) as % of GDP
2010 (2 Sept) 13,442.1 92.1 (2nd Q) 8,933.2 61.2 (2nd Q)
2010 (est.) 14,456.3 98.1 9,881.9 67.1
2011 (est.) 15,673.9 101.0 10,873.1 70.1
2012 (est.) 16,565.7 100.6 11,468.4 69.6
2013 (est.) 17,440.2 99.7 12,027.1 68.7
2014 (est.) 18,350.0 99.8 12,594.8 68.5

 This means the public debt is estimated to increase under the Obama administration by 4.7837 trillion dollars.


Wikipedia can be unreliable but I checked out the numbers before I posted the link.  The chart is a little simpler to read but here is the official US Treasury Department numbers:



Projected (est.) Congressional Budget Office numbers come from this report:


Republican’s commonly complain that the surplus was due to Republican control of the Congress.  However, they do not point out that President Clinton did not have full control of the Congress for six years as President Bush did.

The Republicans took control (not a super majority) of the US House of Representatives in 1994 not the Senate.


In 1995 the Republicans took control of the Senate as well (not a super majority).

“In the 1996, 1998, and 2000 elections, Republicans lost Congressional seats but still retained control of the House and, more narrowly, the Senate. After the 2000 election, the Senate was divided evenly between the parties, with Republicans retaining the right to organize the Senate due to the election of Dick Cheney as Vice President and ex officio presiding officer of the Senate. The Senate shifted to control by the Democrats (though they technically were the plurality party as they were one short of a majority) after GOP senator Jim Jeffords changed party registration to “Independent” in June 2001, but later returned to Republican control after the November 2002 elections. In the 2006 elections, Democrats won both the House of Representatives (233 Democrats, 202 Republicans) and the Senate (49 Democrats, 49 Republicans, and 2 Independents caucusing with the Democrats) as well as the majority of state governorships (28-22).”


The Republicans had full control of the Executive and Congressional branches of government for six years and could not generate a surplus.  However, President Clinton did it for four years without having full control.

The “Tea Party”?

The Tea Party got its name from the Boston Tea Party.  Initially, their point was that there should be no taxation without representation.   They identified with the patriots.  Now, they like to equivocate the monarchy of England during the Revolutionary War with today’s Federal Government.   Do you see a difference?  A monarchy is NOT elected but our government (which includes the Federal Government) is elected by a majority of the people in our country.  Hey, Tea Partiers, we got the government we elected – you lost. 

Real patriots advocated democracy in the face of totalitarianism.  Terrorists advocate senseless violence in the face of democracy.  What side are you gun toting, reloading, cleaning fools on?  The rest of us pay taxes for a military and police to deal with your type.  Go ahead – go down in a blaze of ignorance – the gene pool will be better off.

And, guess what…we think the tax burden will get shifted from the middle income groups the Republicans administrations gave us to big corporations and rich folks.  Oh, I know they like to threaten that they will leave the country or pass the cost on to everyone else but I call that intimidation and black mail.  I have faith that capitalism and competition will leave those that act on these threats in the ranks of the has-beens and entrepreneurs will rise to take the spoils.  Don’t continue to be pawns of big money marketing.  They would have you act against your own interests so they come out ahead. 

Oh, and if you are on Social Security and Medicare and are against Health Care Reform you are selfish and nasty.  You are part of the problem and I think you are responsible for the death of thousands of men, women and children that have died in this country from no and/or inadequate health care.  I see faces of children when it comes to health care reform.  You and your politicians fought CHIPS and health care for decades and I see children dying from it.  If you have the gall to call yourself “pro-life” on top of this you are hopelessly lost.  Why don’t you give age the face of grace, wisdom and virtue not pettiness and hypocrisy?

The Absolute Necessity of Rhetoric

In President Obama’s recent trip to Afghanistan he told the troops that he would not send troops anywhere that was not “absolutely necessary” (http://frontpagemag.com/2009/10/27/mission-abandoned-%e2%80%93-by-alan-w-dowd/).  When President Bush started the war in Afghanistan he justified it as a crusade, vengeance for 911, a Texas style hanging for Al-Qaida and killing the ones responsible for 911.  I never heard him state that he was going to bring the terrorists responsible for 911 to justice.  He may have made that statement but most of the statements were along the line previously described.  Using these rhetorical ploys Bush was able to get the support he needed to start the war in Afghanistan.  Hatred is always a strong emotion while justice is emotionally a bit puny.  Bush started the war against Afghanistan based on rhetoric about getting Al-Qaida.  To date Al-Qaida is still around and our rhetoric about our enemy Al-Qaida is also used freely about the Taliban.  While no one would suggest that the Taliban is a great group of guys, they were not the stated reason why we went to war in Afghanistan.  Fanning the flames of 911, Bush was able to start a war.  His rhetoric became President Obama’s “absolute necessity”. 

I have previously stated that as leader of the United States, President Bush should have stated that we would bring Al-Qaida to justice.  Preferably, this would be done through the United Nations, the World Court and pressure from the World Monetary Fund (in Afghanistan and Pakistan).  President Bush’s rhetoric should have made justice the guiding principle.  We would have kept the sympathies of the world and made justice the value that everyone, no matter what their political persuasion, sympathetic to the universality of justice.  Vengeance and hatred on the other hand are regionally specific.  Those that hate and want vengeance are driven by their own internal necessity not by any universal appeal, by an ideal that everyone could think is worthwhile.  As I have also mentioned in another paper, barring the earnest attempt to get justice in a region of the world where justice is highly lacking, the alternative would be US Special Forces, the CIA, mercenaries, and covert bribes and pressure.  Don’t think it can’t be done; we had a whole cold war based in Afghanistan against the Russians using these techniques many years ago.  However, the political rhetoric should always be concentrated on universal values not regional and circumstantial emotions.

When our hatred drives our rhetoric the rhetoric can take on a life of its own in popular culture.  The switch from admirable, universal ideals to self-aggrandizing, raw and base instincts that become yet another mindless iteration of the past; it becomes its own necessity.  The necessity driven by hatred always ends badly.  The necessity driven by high ideals, historically always ends well.  Examples of the latter include the founding fathers, Gandhi, Martin Luther King Jr., Jesus, etc.  Unfortunately, the earlier is typically the blunder of humankind.

Since rhetoric based in base instinct got us into Afghanistan, I think President Obama had no other choice but to use rhetoric to get us out of Afghanistan.  It has been done before (Vietnam comes to mind) – we declare victory for x, y, z reasons and get the hell out.  We pursue the cause of bringing Al-Qaida to justice using the previously discussed strategies.  As it is, now we are looking at an endless war that has the tendency to expand as these situations typically do.

Another example of rhetoric gone badly is the recent militant rhetoric used by the Republican Party against the Democrats.  The Republican leaders play on the strong emotions of hatred and violence with inflammatory rhetoric and “wash their hands” of it when their words start taking a life of its own in popular behavior.  If you want to understand how Hitler was able to do what he did you can see the beginnings of it in these kinds of rhetorical ploys. 

While personally, I have never opposed capital punishment in cases where there is “no shadow of doubt” about the defendant’s guilt, I have opposed it based on the rhetorical dynamic described above.  When the necessity of rhetoric is allowed to run rampant Texas style executions become more and more “normal” and statistics about wrongful deaths and ethnic inequalities of the death penalty become more and more prevalent.

President Obama should have held to his higher ideals and not adopted the rhetorical necessity handed to him by the Bush administration. 

On a more philosophical level, the dynamic of rhetorical necessity tells us something about human’s unique way of being-in-the-world.  Our narratives of history become our cannon.  The ill-conceived actions that typically follow continue to create generations of veterans and Republican voters that sanctify our motivations and our histories.  The perceived alternative would be to exist in meaninglessness.  God, the self-evident and the a priori surround us as witnesses to our ultimate worthiness and meaning.  In the margins of our hubris plays the alter-ego, the lie of truth and the future seeds of our own undoing.

Poor Rich Folks

Republicans, the home of many wealthy corporations and individuals, control public perception through the media.  They are very good at it – much better than Democrats.  Maybe the media is liberal if you listen to them but voters fall in line like zombies to their beckoning call.  The Heritage Foundation, a very conservative “think tank” (I prefer to call them a propaganda tank), stated during the 2008 campaign that, “Senator Obama’s new tax rate would give the United States one of the highest tax rates among developed countries.”  They went on to state, “The top marginal rate would exceed 60 percent with the inclusion of state and local taxes”.  The article would have us believe that the US under President Obama will have the highest taxes in the world.


I have found the Heritage Foundation to be in the big time business of deception and public manipulation (the US Chamber of Congress as well).  Both of these groups are private and bought and paid for by wealthy Republicans.  So where is the deception in the article cited above?

It is in the small phrase “marginal rate”.  The fact is that there is something called “effective tax rate”.  Marginal rate does not include pre-tax dollars.  Marginal rate is the rate before all the tax loop holes.  Tax loop holes are spread more generously with the wealthy (individuals and corporations) and less generously with middle income to low income groups.  The effective tax rate is what individuals and corporations pay after their tax loop holes are taken into account.  Effective tax rate is the rate after all the tax loop holes – what they really pay.  The Congressional Budget Office has generated data on the effective tax rate ever since 1979.  Here is the latest one from 2006:

Distribution of Federal Taxes and Household Income, 2006            
  Low   Middle   High All Top 10% Top 5% Top 1%
Average Pre-tax Income 17,200 39,400 60,700 89,500 248,400 90,700 366,400 564,200 1,743,700
All Federal Taxes 4.3 10.2 14.2 17.6 25.8 20.7 27.5 29 31.2
Individual Income Taxes -6.6 -0.8 3 6 14.1 9.1 16 17.5 19
Social Insurance Taxes 8.5 9.2 9.4 9.6 5.8 7.5 4.6 3.4 1.6
Corporate Income Taxes 0.5 0.6 0.8 1.2 5.4 3.4 6.6 7.9 10.4
Excise Taxes 1.9 1.2 0.9 0.8 0.4 0.7 0.4 0.3 0.2



The chart shows by average income level what individuals and corporations are really paying in taxes.  The social insurance tax is basically what is taken out of your pay check for Social Security and Medicare.  Excise taxes are, “taxes paid when purchases are made on a specific good, such as gasoline. Excise taxes are often included in the price of the product. There are also excise taxes on activities, such as on wagering or on highway usage by trucks. Excise Tax has several general excise tax programs. One of the major components of the excise program is motor fuel.”


The “All Federal Taxes” row is the sum of all the taxes listed below that row (income, social, corporate, excise).  The “All” column shows all income categories (i.e., our 2006 average, not medium, pre-tax income for the US was $90,700) – how the US fares in general.  The last three columns show the top income categories (10%, 5%, 1%).

If you read Heritage Foundation literature you are lead to believe that corporations and rich people are paying for everyone else.  What they do not tell is that wealthy groups in this country are paying more because they make a WHOLE lot more.  Percentage wise they are paying much less than they would have you believe.  The top 10% of wealthy corporations are paying a real tax rate of 6.6% of its income.  People making an average of $248,400 a year are paying a real income tax rate of 14.1% of their income.  Contrary to the Heritage Foundation lies, these are not the highest real tax rates in the world and appear to be very reasonable to me.  These folks are living lives of luxury and would have us crying for them at the voting booth – come on folks – think about why they would have you believe this – they want to have more at your expense and they want you to be grateful for this when you vote – is this insanity or what????

If you have median income, here is what has happened to your real income tax rate since 1958.  Median income tax rate is defined as, “the exact middle of the income distribution–half of families are above and half are below”:

Year Rate
1958 6.96
1959 7.49
1960 7.77
1961 7.94
1962 8.3
1963 8.68
1964 7.56
1965 7.09
1966 7.48
1967 8
1968 9.21
1969 9.92
1970 9.35
1971 9.27
1972 9.09
1973 9.45
1974 8.99
1975 9.62
1976 9.89
1977 10.42
1978 11.07
1979 10.84
1980 11.42
1981 11.79
1982 11.06
1983 10.38
1984 10.25
1985 10.34
1986 10.48
1987 8.9
1988 9.3
1989 9.36
1990 9.33
1991 9.3
1992 9.18
1993 9.18
1994 9.17
1995 9.28
1996 9.33
1997 9.32
1998 7.98
1999 7.88
2000 8.02
2001 6.71
2002 6.53
2003 5.34
2004 5.38
2005 5.69
2006 5.85
2007 5.91



In spite of this, the rich have certainly become much richer with Republicans than Democrats. 

“Census Bureau data reveal large, consistent differences in patterns of real pre-tax income growth

under Democratic and Republican presidents in the post-war U.S. Democratic presidents have

produced slightly more income growth for poor families than for rich families, resulting in a

modest decrease in overall inequality. Republican presidents have produced a great deal more

income growth for rich families than for poor families, resulting in a substantial increase in

inequality. On average, families at the 95th percentile of the income distribution have

experienced identical income growth under Democratic and Republican presidents, while those

at the 20th percentile have experienced more than four times as much income growth under

Democrats as they have under Republicans. These differences are attributable to partisan

differences in unemployment (which has been 30 percent lower under Democratic presidents, on

average) and GDP growth (which has been 30 percent higher under Democratic presidents, on

average); both unemployment and GDP growth have much stronger effects on income growth at

the bottom of the income distribution than at the top. Similar partisan differences appear in the

distribution of post-tax income growth of households since 1980, despite the fact that the

corresponding pre-tax income growth data for that period show little evidence of partisan



Another important point to be made here is about the tax burden or who is taking on more of the tax responsibilities under Republicans.  Check this out from 2004 to get an idea of what happened to the middle class during the Bush administration:

“Since 2001, President Bush’s tax cuts have shifted federal tax payments from the richest Americans to a wide swath of middle-class families, the Congressional Budget Office has found, a conclusion likely to roil the presidential election campaign.

The CBO study, due to be released today, found that the wealthiest 20 percent, whose incomes averaged $182,700 in 2001, saw their share of federal taxes drop from 64.4 percent of total tax payments in 2001 to 63.5 percent this year. The top 1 percent, earning $1.1 million, saw their share fall to 20.1 percent of the total, from 22.2 percent.”


The 64.4%, 63.5%, 20.1% and 22.2% quoted here are not marginal or effective tax rates.  They are the percentage of total taxes these folks are shouldering.  These values are also shown for 2006 and 2005 in the section of the CBO chart mentioned above under the heading of “Share of Tax Liabilities”.

Here is another chart:

Change in Real Family Income by Quintile and Top 5%, 1979-2005    
 Bottom 20% Second 20% Middle 20% Fourth 20% Top 20% Top 5%
Less than $25,616 $25,616-$45,021 $45,021-$68,304 $68,304-$103,100 above $103,100 above $184,500
-1% 9% 15% 25% 53% 81%



So, the point is that there are many groups that spend a lot of time and money making sure you act and think they way they want you to – even against your own interests.  This is why so many are alarmed at the Supreme Court’s decision to, in essence, allow no campaign finance reform, the wealthy will have no limits on the money they can spend to manipulate you.  My solution is to educate folks so no matter how many dollars are spent by the wealthy it will not be worth their time and money at the voting booth.  Folks, we need to grow up and quit believing every spam we come across.  Otherwise, history has shown time and time again that revolution will be the inevitable outcome and that has never worked out in most cases for the long run.  Here is what I think we, as the electorate, need to do:

 -do the research

-think about the vested interest of who is trying to convince you of something

-vote wisely

Do I have a vested interest?  Did you pay for this?  Are you going to pay for this?  Read this post if you want to know my real interest:


I am probably upper middle income with the best health insurance money can buy, federal government health insurance.  My wife retired from the GAO.

I am a small business owner.  My business is doing well.

I am liberal or left of liberal but I am also a believer in true conservatism defined as:

-Taxes and government…genuine conservation has the goal of conserving precious resources not for selfishly, perceived goals but for the good of society; so that suffering is addressed efficiently and effectively.

-Military…Non-intervention in other sovereign nation’s affairs

-Equality is constitutional (Abraham Lincoln)

-Separation of church and state

All these are the best of conservatism and have been lacking in the Republican Party in recent years.  If I am wrong, show me.  I will change my mind (not saying it is easy but I have done so many times in the past).  Otherwise, I will live, act and vote in the meager amount of integrity that I have been given.

The Latest Republican Attempt to Kill Health Care Reform

Personally, I would have liked to have seen Lott stay in his position.  It would have been great for the Democrats.  Sort of like the gift of Dick Cheney that keeps on giving…

The majority leader of the Senate is elected by the majority party in the Senate when the term begins.


The Democrats could not forcibly remove Trent Lott.  Only the Republicans could remove Trent Lott from the majority leadership of the Senate. 

“Political controversy ensued following remarks Lott made on December 5, 2002 at the 100th birthday party of Sen. Strom Thurmond of South Carolina. Thurmond ran for President of the United States in 1948 on the Dixiecrat (or States’ Rights) ticket. Lott said: “When Strom Thurmond ran for president, we voted for him. We’re proud of it. And if the rest of the country had followed our lead, we wouldn’t have had all these problems over the years, either.”[3]

Thurmond had based his presidential campaign largely on an explicit racial segregation platform. Lott had attracted controversy before in issues relating to civil rights. As a Congressman, he voted against renewal of the Voting Rights Act, voted against the continuation of the Civil Rights Act and opposed making Martin Luther King Jr.’s birthday a federal holiday.[4] The Washington Post reported that Lott had made similar comments about Thurmond’s candidacy in a 1980 rally.[5] Lott gave an interview with Black Entertainment Television explaining himself and repudiating Thurmond’s former views.[6]”


Trent Lott did not just resign because of what he said during Strom Thurmond’s 100th birthday party.  The Republicans did not support him after President Bush would not stand behind him.  Speculation about why President Bush did not stand behind him was because Trent Lott could not get his immigration reform through the Senate.

“President Bush distanced himself from Lott’s remarks, telling an audience the comments “do not reflect the spirit of our country.””


This is yet another ridiculous attempt by the Republicans to kill health care reform.

How I Really Feel About Contemporary Republicans

For those of us that are proudly left of liberal the density of the last eight years slowly passes as a dark, soulless sludge.  We have never recognized ourselves in the reactionary slogans of the Republicans.  We only see their own narcissistic, dark dreams personified when they begrudge liberals or the left.  We still do not see president-elect Obama as a leftist ticket to power.  He is certainly a refreshing break from the dark mandrills of the right.  He offers the possibility for balance and sense as opposed to endless, self-righteous pontifications.  Since Reagan with the exception of Clinton, many of us felt the repulsiveness and alienation that the Republicans should be feeling now.  We have not been a part of the national debate only a pin-up cartoon of the right.  We know that the follies and decaying ideologies of the right would cave into their own dust and blow away but the stench of their rotten ideas reeked nausea in our entrails.  President-elect Obama is not left.  His stated ideology is not even liberal.  He is actually a centrist.  The thought of “centrist” has been hijacked for too many years by those that would make it ever so increasing right of the chest beating, never extreme enough right.

 Yep, Republicans are scared to death about the dark awakening.  They have lorded over the destruction of the middle class and did a brilliant job of getting folks to believe we were all “middle class” while things just kept getting tighter and tighter for those making under 100k/year.  They cut taxes? – how would you know if you make under 100K/year? – all the while health care has gone up, insurance, mortgages, food, gas for way too long, college tuition and we hung on like rats on a sinking ship, telling ourselves we were “middle class”, while the well to do bailed out and went to their favorite private island.  They killed our children and told us it was for freedom.  We were not middle class; we were duped, robbed, mugged and made to feel grateful for it.  Their children never pay the “ultimate price”.  Now the veil has been torn and the obvious can no longer be denied.  Their PR wears thin.  Their philosophy fails and they can no longer peddle their wares on the street.  They lost the election and every time they bellow and moan about the liberals, the evil government, socialism, they only show their clay feet and remind us of their legacy of tragedy.  All these vile terms they hurl look good compared to their bankrupt ideology.  Their violent sneers are all over the blogosphere. Their insults amuse.  They have yet to see the repercussions of their demise as they retreat back into their caverns to eat their own.  They only rattle their chains when they preach to their choir.  Only when they see their own dark face in all they now despise will they find the possibility for redemption.  “Class Warfare” is their term to remind them of their deepest fear – that average folks may wake and rise from their Darwinian oblivion.