SACRED COWS

The raging debate over gun control – and therewith about the second amendment to the constitution – is compelling me to ask the question:

"Could it be possible that the constitution - which was designed by its authors (James Madison more than anyone else) to provide us with a prudent, balanced republican form of government consisting of three separate branches and with a citizens’ bill of rights – has gradually been turned against us in some of its provisions? Turned against as a result of changing times and conditions that could not have been imagined more than 200 years ago and as a result of interpretations of provisions of the constitution by the judiciary branch, particularly the Supreme Court."

What raises that suspicion in my mind?

1.       For starters the gun-control debate. The opponents of gun-control all throw the second amendment, “the right to bear arms” at the policy makers who want to protect the public at large from the unbridled proliferation of the most sophisticated weaponry and the courts have been very reluctant to allow reasonable limitations on the second amendment right. This reality, combined with a fiercely combative attitude from a large part of the US population, frustrates just about any attempt to keep guns out of the hands of those who cannot be trusted with them and keep military or gangster type weapons out of the hands of everyone except trained professionals who are sworn to protect us.

2.       The stranglehold money has on politics. Corporations’ right to lobby members of Congress and fund their election campaigns is being protected by the Supreme Court’s interpretation of the freedom of speech afforded us under the first amendment to the constitution. The framers of the constitution wrote their document to institutionalize the best form of government they could come up with. The veracity and effectiveness of our government would be greatly enhanced if we managed to keep money out of the governance process. We would be much better off if elections would be exclusively funded with public funds and if public office holders would be highly compensated, but forbidden to accept any money from other sources.

3.       The corrupting content of media. The Supreme Court’s deference to the first amendment keeps us from shielding ourselves from all kinds of propaganda, misinformation, brainwashing and dumbing down.  The framers of the constitution and their contemporaries were only exposed to the verbal and written word. They had no inkling of the intrusiveness of large screen TV images, retina tablet displays or smart phone instant imaging. Even radio broadcasts were still a century away. What public good is being served –other than excessive deference to a law that was established more than two centuries ago in a completely different world – with advertisements of pharmaceuticals that nobody but medical doctors should decide if we need them or not? Or with advertisements for ambulance chasers? Or with the dissemination of video games with violent content? What public good is being served with seemingly interminable political ads that are under no test or obligation of veracity?

4.       The undue influence of pressure groups. Again under protection of the first amendment, pressure groups like AARP, the NRA, Labor Unions and the US Chamber of Commerce have excessive influence on the election process and the behavior of our elected officials once they are in office. These pressure groups frequently take political positions without ever checking back with their constituents to see if and to what extent these positions are fully supported. Much less are they concerned with the greater public good. Maybe the real problem is that too many of our Congressional representatives lack the courage of their own convictions and just bend to the pressure of the interest groups that helped them into office; but we better recognize that our elected officials are not immune from human frailty and greed. The constitution should not stand in the way of eliminating undue influence.

5.       The curse of too many elections. The President of the United States should be elected for one term – I suggest six years – and not be eligible for re-election. The frequency of elections, particularly for the Presidency and the House of Representatives, exacerbates the polarization of the voting public; it keeps those who should govern in a near permanent election mode; it is very costly in financial terms, making it harder to keep the money influence out of politics; it does not allow an office holder to complete an agenda. The process would also be greatly enhanced if – by law – election campaigns were limited to running for no more than three months. It would save large amounts of money and keep politicians focused on their job with much less interruption.

If the constitution stands in the way of addressing these five hurdles to a better functioning of our government – a government for and by the people – then it is time to amend the constitution. It is not so sacred that it cannot be changed. The framers of the constitution realized the need for adaptation over time, which is why they provided in Article V for the way in which the constitution may be amended. After, in 1791, the Bill of Rights was incorporated in the first ten amendments to the constitution, it was further ratified to be amended seventeen more times, the last time in 1992.

We are a nation of laws and should by all means keep it that way. But that does not mean that we should not amend or scratch laws – parts of the constitution included - that no longer serve a public good that has been democratically expressed in our time. The task of keeping our laws “up to date” falls on the legislative branch. It is too sacred to be left to the judiciary.

(Frans Jager is Principal of Castnet Corp. (www.castnetcorp.net) a Business Consultant for the Green Industry and an Executive Coach. He frequently writes about the Green Industry and other matters of general importance. He can be reached at castnetcorp@gmail.com)

© 2013 Castnet Corp. All rights reserved.

AMERICAN EXCEPTIONALISM

The concept of “American Exceptionalism” has become a topic of debate in the columns of some of the nation’s leading publications*. It has given me an impulse to my search for and study of what works and does not work in this great nation.

Even though some identify “American Exceptionalism” with a mythical condition that pre-ordains the United States to be “a cut above” all other nations in destiny, legitimacy, capacity and morality, it is clear that the origins of the concept are found in the birth of the nation from the groundswell of ideas – revolutionary at the time - that lead to the Declaration of Independence, to the Revolutionary War, the creation of the republican form of government and ultimately the Constitution of the United States.

While the notion of America being “a cut above” all other nations has many origins, the term “American Exceptionalism” probably stems from the French scholar Alexis de Tocqueville who wrote in his 1831 treatise “Democracy in America”: The position of the Americans is therefore quite exceptional, and it may be believed that no democratic people will ever be placed in a similar one.”

Based on James Madison saying that “America holds the hope of liberty throughout the world”, American Exceptionalism is then interpreted as the proposition that the United States is different from other countries in that it has a specific world mission to spread liberty and democracy.

Whatever the history of the notion of American Exceptionalism, the concept keeps invading our public life and sentiment. Most recently, President Obama, in his second inaugural address declared: “What makes us exceptional – what makes us American – is our allegiance to an idea…..”

The idea he refers to was first articulated in the second paragraph of the Declaration of Independence:

“We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable rights, that among these are Life, Liberty, and the pursuit of Happiness.”

Meaningfully, President Obama then added: “that while these truths may be self-evident, they have never been self-executing.”

In this he is so right!

America is indeed an exceptional success story starting with the birth of the nation in the struggle for independence, to the gradual conquering of the West, the Louisiana Purchase and the purchase of Alaska from the Russians. It derives great strength from its strategic location with access to and protection from two oceans, from the vast expanse of its territory and its water systems (rivers and lakes), from its abundant natural resources and from its -largely immigrant- population.Blessed with these strengths America has made exceptional contributions to world civilization, in war and peace, in exploration, in science and technology, in creating wealth and in advancing human rights.

Surveying the field today, the question keeps coming up: are the best times behind us? We all see the tell-tale signs of trouble around us: from high unemployment, increasing income inequality, lost or unfinished wars, a skyrocketing national debt, a sub-par infra-structure, an ideologically divided voting public and –resulting from it – a dysfunctional political system to the unraveling of family structures and values, the proliferation of guns and drugs, the (relatively) poor academic performance and the prevalence of obesity.

Would a modern day Alexis de Tocqueville find anything exceptional in America?

• ·         Our defense spending is exceptional.  We are spending more on our military than the next 17 countries (including China and Russia) combined.
• ·         We rank 1^st in death by violence among high income democracies at 6.47 deaths per 100,000 people. Finland ranks 2^nd at 2.24 deaths per 100,000.
• ·         Between 2007 and 2011 only China, Iran, Iraq and Saudi Arabia have executed more people than the USA.
• ·         We rank 7^th in per capita CO2 emission.
• ·         We rank 22^nd out of 27 developed countries in graduation rate from public high schools.
• ·         We rank 15^th out of 27 developed countries in tertiary education graduation rates.
• ·         We rank 15^th out of 27 OECD Member nations in terms of reading literacy.
• ·         Our kids rank 18^th in the world in reading, 29^th in science and 35^th in math.
• ·         We rank below 16 other rich countries in health across our entire life span.
• ·         We rank 49^th in life expectancy at birth.
• ·         33 countries have a lower child poverty rate than the USA.
• ·         44 countries have a lower infant mortality than the USA.
• ·         We rank 26^th among OECD Member nations in terms of tax ratio as a percentage of GDP.
• ·         We rank 15^th among OECD Member nations in broadband penetration.
• ·         Income inequality is higher in the USA than in 95 other countries in the world.
• ·         The Heritage Foundation ranks the USA 13^th among developed nations in business freedom.

In other words, we don't rank # 1 in any of these measurements of human well being.

However, this is just a moment in time. In terms of resources, human and physical, we have plenty of capacity to become a leading nation once more in matters that constitute true measure of human progress. The question is if we can muster the political leadership and will to mobilize the population at large and get all of us pulling the cart in the right direction and back to the forefront.

*Clifford D. May in the National Review; Richard Cohen in the Washington Post; Scott Shane in the New York Times.

(Frans Jager is Principal of Castnet Corp. (www.castnetcorp.net) a Business Consultant for the Green Industry and an Executive Coach. He frequently writes about the Green Industry and other matters of general importance. He can be reached at castnetcorp@gmail.com)

© 2013 Castnet Corp. All rights reserved.

AARP IS PART OF THE PROBLEM

I have come to the conclusion that AARP is part of the problem rather than an enabler of a solution for our Nation's Debt problem and I have resigned my membership in AARP in the following email exchange and I urge you to do the same if you are a current AARP member.

L.S.

If this is the position of AARP, I have to give up my membership; I do not belong in the company of people supporting your position as you lay it out for me in your email response.

You simply ignore the fact that the nation has raised expectations of a welfare state that it can no longer meet.

Just like Ronald Reagan and Tip O'Neil had to reset the Social Security program to put it on a sustainable footing in 1983 we need a reset now. Europe goes through the same process. It is simply the result of rapidly changing demographics that invalidate the assumptions on which the current entitlement programs were based.

The Social Security Administration is not alone. The State of Illinois will have no choice but to reneg on the promises it has made to its retirees. GM and Chrysler had to use bankruptcy to decrease its "legacy cost" as did all the major US Airlines.

It is irresponsible to plan on financing future entitlement obligations with borrowed money.

I cannot believe that AARP is willing to risk a calamitous debt crisis by refusing now to be a partner to a plan to bring the existing entitlements on a sustainable path for the foreseeable future.

I see a real problem for our nation when AARP refuses to constructively participate in an effort to avoid a ruinous debt crisis and NRA refuses to constructively participate in an effort to reduce gun violence. Both have become too big for their bridges and too willing to intimidate our legislators. I guess the only answer is to begin to reduce their membership.

I herewith resign my membership in AARP and I will use the social networks to urge others to do the same.

 

Frans H. Jager
8748 Timber Edge
North Ridgeville, OH 44039
Phone 440-748-4154
Fax 440-316-7213

---

From: "member@aarp.org" <member@aarp.org>
To: frnsjgr@yahoo.com
Sent: Tuesday, January 15, 2013 7:43 AM
Subject: Re: Entitlements << Reference ID: 1309249 >>

Dear Frans Jager:

Thank you for contacting AARP about the nation’s fiscal crisis and deficit reduction. We appreciate feedback such as yours and have taken note of your views. It’s my pleasure to respond.

Congress passed legislation on January 1 to avert the fiscal cliff by delaying the implementation of automatic across-the-board cuts in discretionary spending for two months. AARP is pleased the agreement ensures that Medicare patients can continue to see their doctors by delaying an automatic and drastic pay cut for Medicare doctors for another year. With more and more middle-class families anxious about their retirement security, we are also pleased to see the extension of benefits for the long-term unemployed and the restoration of Social Security’s dedicated funding stream. The deal also protects funding for key Medicaid programs, which will help millions of Americans who rely on Medicaid for their health and long-term care. And while we are disappointed in the repeal of the Community Living Assistance Services and Supports (CLASS) Program, we are hopeful that the new Commission on Long Term Care will work toward meaningful solutions to help individuals live in their homes and communities and support family caregivers.

AARP and our members recognize the urgent need to put our nation's finances on a more secure path. However, some in Washington want to make cuts in entitlement programs such as Social Security, Medicare and Medicaid. Americans have paid into Medicare and Social Security and they deserve an open, thoughtful discussion about how we can protect these programs for seniors and strengthen them for future generations. With the compounded effects from the loss of retirement savings and home equity, high unemployment and rising health care costs, cuts to the benefits seniors have earned could undermine the standard-of-living of not just those with limited incomes, but middle-class seniors as well.

Medicare is the bedrock of health security for more than 47 million older Americans and Americans with disabilities. Fifty percent of Medicare enrollees have incomes below $22,000 per year. Someone on Medicare with $20,000 a year in income can already expect to pay nearly 20 percent of their income to pay for their ever-rising health and prescription drug costs, and it’s hard to see how they can afford to pay any more. As legislation is developed to address our nation’s deficit, AARP strongly urges Congress to reject proposals that would cut Medicare benefits or unfairly shift costs to seniors or future retirees. In addition, AARP strongly opposes proposals that would increase the Medicare eligibility age from 65 to 67. Cutting benefits for younger retirees would increase their own out-of-pocket spending by about $2,000 per year. It would also increase premiums for current enrollees because it would leave an older, more costly insurance pool, and it would increase health care costs for businesses because workers would be staying on their employer plans longer.

Rather than targeting Medicare and increasing costs for many, AARP believes Congress should look for ways to reduce costs and improve the system. These might include reducing the exclusivity period for biologic drugs, allowing for the safe and legal importation of prescription drugs, and enabling the Secretary of HHS to negotiate for lower prescription drug prices. With some estimates putting waste and fraud in the health care system at ten cents on the dollar, we stand by our call for Congress to fight fraud and target wasteful spending instead of simply cutting Medicare and Social Security.

Another proposal being considered would change the way Social Security’s annual cost of living adjustment (COLA) is calculated. Some analysts have argued that the current measure overstates inflation because it does not fully account for the fact that consumers often change purchasing patterns when prices change. Therefore, these analysts propose calculating the COLA using a “chained” consumer price index (CPI) to account for this substitution in purchasing. However, in the case of many products and services, such as health care (in which costs are rapidly rising), older consumers don’t have the opportunity to substitute in their purchasing, so the chained CPI will not accurately reflect their experience. This proposal would affect current retirees and reduce the value of Social Security benefits over their lifetimes. Reducing the Social Security COLAs for seniors in the future in order to pay for deficit spending in the past doesn’t make sense to AARP. Any changes to Social Security should be discussed as part of a broader conversation about how to help Americans prepare for a secure retirement, especially as pensions, savings and home equity have been crumbling over the past decade.

Simply, our policy reflects what the majority of our members have told us they believe: Congress should find ways to solve our nation’s budget problems without making damaging cuts to Medicare and Social Security for seniors. AARP was founded more than 50 years ago to ensure that older Americans have affordable health care and financial security in retirement. While much has changed since those early years, our commitments have not. AARP will continue to raise the voices of millions of Americans who rely on their Social Security and Medicare benefits and we will continue to fight for a balanced approach to solving our nation's deficit. For more information, or to get involved, visit www.aarp.org.

Thank you again for writing. We always welcome your input. Please feel free to continue sharing your comments and questions.

Sincerely,

Siva
Member Communications
Member@aarp.org

>> Original Message ...

>> From: frnsjgr@yahoo.com
>> To: Member@aarp.org
>> Subject: Entitlements
>> Sent: 01/11/2013 14:15
>>
>> To the AARP Leadership team:
>>
>>
>> I am a 69 year old retired business executive and I am seriously contemplating cancelling my AARP membership in response to your irresponsible stand against the reform Social Security, Medicare and Medicaid needed to bring them in line with current day demographics and budgetary constraints.>>
>>
>> You advocate cradle robbery!>>
>>
>> The ballooning of the National Debt is the single biggest threat to our national security and the prosperity of future generations and the in-sustainability of current entitlements are the major drivers of deficits as far as the eye can see.Your misguided advocacy caters to my generation at the expense of the generations of my children and grand-children and is morally defunct. I hope that our elected representatives will have the political courage to throw you and your arguments under the bus and adopt one of the many proposals now floating around for bringing the growth of the national debt under control by addressing serious reform of entitlements.

>> It is time that we admit that we have raised expectations that cannot be met under current conditions.What you do is the equivalent of what the UAW did to our automobile industry forcing bankruptcy in the end. As I see it you are part of the problem, not helping to find a solution.Why would I want to be a member of an organization that campaigns against everything I stand for if it comes to the fiscal management of our nation?

>> Frans H. Jager
>> 8748 Timber Edge
>> North Ridgeville, OH 44039
>> Phone 440-748-4154
>> Fax 440-316-7213
>> castnetcorp.blogspot.com

THE DISCONNECT

Why is it that just about everybody with authority in the realm of business and public communication has spoken out on the miserable failure of our legislative and executive branch of government to deal with the fiscal challenges this nation is facing, and neither Congress, nor the White House shows any signs of remorse and redemption?

How can it be that just about every columnist in the national newspapers (except Nobel Price Winner Paul Krugman) has decried the dismal failure of the White House and Capitol Hill to use the lever of the fiscal cliff to move the paralysis on the deficit reduction off dead center and yet, no one steps forward to pick up the gauntlet?

Isn’t it pathetic to have the fight about raising the debt ceiling coming at us over the next few weeks without any attempt by the President to move that discussion out of the purely partisan and ideological arena to a platform for a grand bargain that addresses deficit control, entitlement reform, tax reform and simplification and support for economic growth?

For sure there is no lack of guidance for our politicians on what steps to consider in an effort to put our fiscal house back in order. Just about every Think Tank in the nation has proposed a pathway out of the morass. The Deficit Commission of Simpson/Bowles has provided a detailed blueprint for recovery.

The National Commission on Fiscal Responsibility and Reform has spelled out a pathway to reduce the National Debt to 60% of GDP by 2023 and has on its web-site www.crfb.org even created a tool that lets everyone create their own preferred pathway to debt reduction from a wide selection of reforms, spending cuts and tax modifications.

In business we have learned that when reality deviates from the expected outcome, the reason for the disconnect is more often than not found in the process rather than the people involved in the process.

Might that be the case here too? Or are we dealing with a set of politicians who are just too dumb and blind to see the obvious course of action?

Glenn Hubbard and Tim Kane in a well reasoned article in National Affairs titled “Regaining America’s Balance” argue that the main characters in the Beltway behave rationally and are very much in tune with popular demand as to be expected in a democracy.

While just about every serious student of the predicament of the future funding of the major social programs - Social Security, Medicare and Medicaid - knows that the future obligations under these programs are unfunded under current rules, AARP and other interest groups have made it clear that changing the rules equals political suicide. Similarly, Grover Norquist has instilled the fear of God into all Republicans who otherwise might think that raising revenues by tax increases might be required for a balanced and lasting solution to our debt problems.

Can we really expect from our chosen representatives that they jeopardize their whole political career by going against the popular demand?

The disconnect, I’m afraid, is with us. We allow interest groups like AARP, NRA, Chamber of Commerce, Americans for Tax Reform and others to speak for us with broad statements that typically equate to “over my dead body”. How are elected officials going to ignore that pressure? Aren’t they supposed to represent us?

The disconnect is between a general consensus that something needs to be done to bring our fiscal house back in order and an individual refusal to contribute to the solution by giving up something that seemed to have been secured ( be it a tax advantage, an entitlement or cherished government program).

The nation is in the same dilemma that the Big Three auto makers were in only a few years ago. They were confronted with the realization that they had made insupportable long term promises to their workers that were threatening to putting them out of business. In business, the way out of this type of predicament is bankruptcy. That is the path the GM and Chrysler had to follow; Ford escaped but benefitted from the concessions that the UAW had to make in the bankruptcy proceedings of its competitors.

The nation is bankrupt in the sense that its future obligations under the entitlements it has created far outstrip its capacity to raise revenues. For years now it has had to borrow more than a trillion dollars per year to meet it current obligations. But nations can’t go to the bankruptcy court and ask for a reset. Nations have to find a political solution. So do the States. The State of Illinois has near one trillion dollars in unfunded pension obligations – literally bankrupting the State – but the only way out is a political solution.

The disconnect stems from the “not at my expense” attitude of the voting public. It is not dissimilar to the dilemma of nuclear waste disposal or the location of a maximum security prison: it needs to be done but not in my backyard.

Will enough of us speak up and break the disconnect? Will enough of us step in line and support that one courageous politician who may stand up one day - hopefully sooner rather than later – and ask from each of us the sacrifice required to put the nation’s finances back on solid footing?

(Frans Jager is Principal of Castnet Corp. (www.castnetcorp.net) a Business Consultant for the Green Industry and an Executive Coach. He frequently writes about matters pertaining to the Green Industry and of general interest. He can be reached at castnetcorp@gmail.com)

© 2013 Castnet Corp. All rights reserved.

TINKERING

It is somewhat astonishing that Congress spoilt its members New Year’s Holiday by waiting to make the easy decisions until the very last minute. If this is all they ever intended to do, it could have been done weeks ago and everybody could have had a relaxed Holiday Season.

Unfortunately, all that was done by Congress’ action to steer away from the Fiscal Cliff was doing the obvious: avoid further immediate damage to the economy by keeping the Bush tax cuts in place except for family income earners of $450,000 or more and by deferring sequestration. The only spending cut that I could find is the elimination of the temporary 2% payroll tax relief.

If you keep in mind that the debate is, or should be, about how to begin the eliminate the now epidemic budget deficits and thus how to begin the bend the curve on the increase of the National Debt, then it is evident that nothing got done by Congress’ action over the New Year’s Holiday. It is just tinkering at the margin!

The fight, as it turned out, was only about getting the highest income earners to pay somewhat higher federal income rates than enshrined in the Bush tax cuts, while leaving the rates for everyone else unchanged. So the focus was on income redistribution from the very rich to the less fortunate when it should have been about stopping the theft by the current generation of income earners from the next generations.

As it stands we have been borrowing for years now more than a trillion dollars per year to fill the gap between federal revenues and federal spending. This is the equivalent of a family taking out credit card debt every year, from year to year, just to keep consuming at a level that is beyond its means. That results in bankruptcy and some people believe that we already are a bankrupt nation.

The IMF warns that funding America’s long term obligations will require an immediate and permanent 35% increase in all taxes and a 35% cut in all benefits!

Whether the IMF has it right or not, there is no argument that we are spending way beyond our means and we are not spending on structural improvements of our infra-structure and our competitive advantage in an increasingly globalized environment. We are spending to meet expectations that we have raised but now find that we cannot fully fund without mortgaging our future.

These expectations reside in the entitlements (including healthcare), in government retirement programs, in the role of our military as a global policy force.

Even Wall Street is short sighted. It shot up on the first trading day of 2013 in response to Congress’ tinkering with the fiscal challenges of the country. Wait until the new Congress has to raise the debt ceiling, which is only weeks away!

When will we know that Congress has moved from tinkering on the margins to seriously addressing the nation’s challenges? Look for any of the following:

• ·         Comprehensive Federal Tax reform to possibly include introduction of a new value added tax
• ·         A binding framework for controlling the growth of the national debt and a mechanism to keep the debt within an acceptable range as a percentage of GDP
• ·         Restructuring of existing entitlements to put them on a long term sustainable footing, commensurate with the demographics of the foreseeable future
• ·         Converting all government pension plans from defined benefit plans to defined contribution plans
• ·         A growth oriented economic policy that enables innovation and productivity and enhances America’s competitive position in a globalized world

The big question is if our existing political system is capable of producing the results the nation needs.

America is in deep trouble if the answer to this question is negative.