But What Can We Do?

This column has questioned the truth or wisdom of some of our most famous and revered national and religious quotations.  But there are some that even this column will not challenge.  One is JFK’s famous “ask not what your country can do for you, ask what you can do for your country.”  It seems more valid today than it was 50 years ago. How many of us remember it or think about its meaning?

Today we are facing many serious challenges to our well being.  America has been digging out of a severe recession for three years now.  More than 13  million Americans are out of work.  Millions of homeowners are losing their homes owing much more for them than they are now worth.  We seem held captive by OPEC, which sets oil prices affected by supply and demand as well as speculation and forces us to pay more when filling our cars. Some of us feel that we are not getting enough information from our mainstream media.  Many of us feel that we are not getting the same advantages as others take for granted.

We want the government to help us.

If we are unemployed, we want the government to give us unemployment benefits for as much and as long as possible.  We want our elected officials to fix our economy, which is affected by various global factors.  If we have borrowed more than our homes are worth, we want the government to help us get the principal and interest rate reduced.  If we have large cars and trucks and are being forced to pay a fortune to fill up, we want the government to do something to lower gas prices. If some, like the rich, are getting advantages that we aren’t, we want the government to fix the system so that we all get a fair deal.  Many of us have lost faith in our elected officials to fix our country the way we want. Our government, like our very nation, appears fractured and moving in different directions.  We fear that our representatives cannot be counted on to make the needed changes to make sure that our lives only get better.

What are we to do?

We could ask “what can we do for ourselves as well as our country?”

If we are unemployed, sending out resumes to get back into our former careers, we might consider other employment options.  What else can we do that needs be done?  We could get a specialized education doing a different kind of work.  We could do work that people have said Americans won’t do like gardening, housecleaning, child care, manual labor, farming, building maintenance, dog walking and handy-person jobs. We could offer our services to our neighborhood as well as to the larger community.

But most of us are not unemployed.  What can we do about the unemployment problem?  If we run a company, we can refuse to outsource work to other countries.  We could comply with federal law and hire only legal residents and citizens even for yard work or child care.  We could go out of our way to buy products made in America, even if they cost a little more. When making calls to large corporations that outsource their customer service, we can ask to speak with someone working in America.

If we borrowed more than our home is currently worth, should we stop making payments and move out only when forced regardless of its effect on the neighborhood or our economy, not to mention our credit rating?  When our homes were worth much more than we paid for them, should we have offered to pay the bank more? Do we have any personal responsibility for borrowing too much or too often to have something we could not afford?  We could realize that the home is worth to us exactly what it was before the crash.  It is not just an investment, it is a place to live in comfort and security. We could try to remember that homes were not always seen as profitable investments.  Their value used to decline with age, like cars, refrigerators and washing machines.  When we buy a new car or appliance on credit, as most of us do, we are immediately underwater.  Not only are they worth less than we owe for years, when we sell them, if we do, we get much less than we paid.  Should we immediately walk away from all these purchases?

We recently got a reduction in our payroll taxes.  It amounts to, on average, about $2 a day per worker more in our pockets.  We were excited to get this small amount because it would help us and the economy recover.  Now gas prices are up by almost $.50 a gallon.  We are in shock.  It threatens to destroy our personal and national economic recovery, the media tells us. We hear that the increase is due in large part to speculations driven by media hyperbole.  We watch interviews of our fellow Americans in the back of their large trucks and SUVs saying that this is outrageous.  They say that the government should do something to lower prices at the pump.  Is drilling the answer, even though the effects would take many years to realize? 

It has been only a few weeks since the payroll tax cut extension was signed into effect meaning that the average worker will save $14 a week, but we have already forgotten.   This additional amount per week would pay the additional $.50 per gallon for 28 gallons of gas per week.  If we drive 60 miles a day (most of us don’t) and get 15 miles a gallon for the same seven days we would come out even.  But there’s more.  Are we driving a truck or SUV? Why? Is it just for work?  If yes, can the additional cost be written off or passed on to the consumer of the services?  If the truck is not needed for work, why have it?  We could sell the SUV or pickup and buy a more practical family car.  They get much better gas mileage and are easier and more fun to drive.  Or can we reduce our driving by the percent of increase in the price per gallon? So a $.50 increase is about a 14% change from a $3.50 a gallon base.  Can we cut our driving by 14%?  We could do our errands more efficiently.  We could carpool, take public transportation or even walk when possible? Could we cut waste in other areas, like spending four dollars a day on coffee at our favorite cafe?

Could we stop whining and do something?

And if we no longer trust our elected officials, we should work to replace them with people we trust more, if not completely. When we see what the conservatives in the Congress have been up to these last few years, many of us are starting to realize that more must be done.  We must change the way we pay for elections, and should restrict lobbying to clear presentations of positions without the exchange of any money or favors so that our legislators are not tempted to prostitute themselves to special interests.  We must also encourage our best and brightest to go into government service.  In order to have enough best and brightest, we must significantly improve our education system.  This would involve not only hiring, training and encouraging more great teachers, it would also mean changing our high school curriculum to better prepare our students for college and life. A better educated population should produce better voters as well as improved candidates. These are changes that we must know enough to care enough to fight for.

And if we believe that some are getting more advantages than the rest of us, we should insist on better coverage by the media and organize for changes in our tax code which is usually at the heart of economic and political inequity. ( This column has proposed a new, simple and fair tax code with no itemized deductions, just a standard one; treating all sources of income as equal; and with only five tax brackets ranging from 10% to a maximum of 30%. Please see this previous column online).

So maybe we, as a strong, self-reliant people, can stop complaining about our difficulties blaming the government for not doing more to help us, and instead can ask ourselves what can we do for ourselves and our nation?

Taking positive action to effect change is the best way to get over our depression about life’s cruelty and our own shortcomings.

So let us not ask what our government can do for us but rather discover, declare and demonstrate what we can do for ourselves and our country.

Numbers Count But Only If We Can

In a previous column entitled : “Numbers Count and Size Matters,” I lamented our culture’s movement away from using math and numbers and toward our dependence on gut feelings and descriptive adjectives.  That column focused more on the size of American family cars recommending reductions to specific car lengths instead of generalizing adjectives like “mid size” or “compact.”  I also took the opportunity to decry the excessive size of men’s bathing suits and shorts as well as most of the watches available to these gender-specific consumers.

But now I want to address our culture’s inability to do simple math on a routine basis.  Here are some recent examples:

There much ado about extending the 2% reduction in payroll taxes deducted from workers’ paychecks.  Everyone has agreed how vital this was for the working people and for our economy.  Their payroll tax payment will continue to be reduced from 7.65% of their earnings ( 6.2% for Social Security plus 1.45% for Medicare contributions) for earned incomes of up to about $106,800 to only 5.65% for another 10 months if approved by Congress.  Workers will continue to keep 2% more of their gross earned income as they did last year.

The man on the street was interviewed and in each case declared his joy for the much-needed extra money. The news media couldn’t seem to figure out how much of a real difference this $120 billion program would make.  It is $750 a year in average savings, not $1,000, for 160 million workers.  While the media not only incorrectly said that the average savings was $1,000 a year when it is more like $750, the media also couldn’t figure that this was less the $14.50 a week or about $2 a day.  Not one report that I saw, and I watch most of them, ever mentioned this measly amount. Instead of having $721 a week, the average worker will have $735. The $2 a day difference won’t even pay for a cup of Starbuck’s coffee.

And in order to give 160 million workers an average of $2 a day more, we should lose $120 billion in revenue ($10 billion a month) when we are trying to reduce our annual one trillion dollar deficit.

Has anyone done the math?

Also in the news lately we have heard about mandatory cuts of $45 to $55 billion a year from our defense budget.  Is that a lot or is that a small matter?  How much do we spend on defense and what does it include?  While the budget for the Defense Department is about $650 billion, that is not the total cost of our defense.  We also have the Veteran’s Administration which pays the pensions and provides medical services to active and retired vets.  There are costs for defense related programs in the CIA, the Energy Department, NASA and the State Department.  The actual total cost of defense is a little over $1 trillion or about one third of the federal budget.

And what does that money buy and what can be lived without?  No one has given us the numbers.  How many military bases do we run around the world?  We never hear. Estimates vary from more than 700 to as many as 1,000.  The other 195 sovereign nations combined have a total of less than 200 foreign military bases.  How many more war ships, fighter jets, atomic bombs, etc., do we have than the whole world combined, ten times as many, 20 times as many?

We have not been given any of these numbers without which we cannot measure or judge the significance of our cuts.

Then there is the multi-millionaire running to be his party’s unsuccessful opponent to our incumbent leader.  We have learned that in 25 years of working for a private equity company he was able to amass more than $200 million.  When he reluctantly released his tax return for 2010, we learned that he invested some of his fortune in Swiss banks and in companies on the Cayman Islands, not helping our struggling economy.  We also learned that he paid less than 14% of his $21 million annual unearned income on taxes.  But what no one mentioned is that he made over 10% interest on his $200 million.  Who else gets that kind of return?   If you put your money in a regular account at a major bank, as most of us do, you get .1%, if you are lucky. If you put one million dollars into CDs or a maximum savings account, you might get 1%.  If you invest in stock and do real well, you might get 3% return.  How does he get 10% every year now that Madoff is in prison and Milken is out but has reformed? This is the real outrage. He makes more in a day in interest ($57,500) than the average American worker earns in a year (about $33,000).

And lastly, there is the Occupy Wall Street movement.  The occupiers have echoed the concern of many Americans that Wall Street has become too powerful, too greedy and too corrupt. They sense that the bonus system has encouraged otherwise decent, well-educated people to take outrageous risks with other people’s money for their own personal gain with some ruinous results.

But some people in the movement came up with this 1% versus 99% theme.  They said that our country’s problems are caused by the richest 1% of our population subjugating the unfortunate, defenseless 99%.

In all this time, I have heard no one say who these 1% are.  The top one percent of households in the United States, accounting for just under 1.5 million households, earn at least $386,000 a year. This top 1%, therefore includes every professional athlete and coach, every person we watch regularly on T.V., most surgeons and all the professional couples who each earn $200,000 a year. They are what most would call the high end of upper-middle class.  Surely, they are not the problem.

The top .1%, representing the top-earning 150,000 households, earned at least $1 million a year.  This includes many top professional athletes, news anchors, T.V. stars, movie stars as well as CEOs of large companies, Wall Street investment bankers, lawyers, hedge fund managers, and private investors. Many of these people give generously to charity and non profits like schools, hospitals and public projects. But some of these high earners pay lobbyists to coerce legislators to relax regulations and reduce personal and corporate taxes.  It is these people and their lobbyists who are in part to blame for our country’s economic and political woes.

Then there is the top .01%, the billionaires like Warren Buffet, Steven Jobs and Bill Gates who are the most generous in their donations and have lobbied for the rich to pay more taxes.

So then who is the problem, now that we know the numbers?  It is Wall Street money managers and the influence they bring to bear on our legislators, on our country.  It is the system driven by greed for ever bigger bonuses to own ever a bigger slice of the American pie without any real concern for their fellow citizens.  The problem includes an electoral system that always requires more money in donations to win continued reelection which becomes more important than the reason for which our politicians were elected - to help the people. It is lobbying, using hundreds of millions of dollars to seduce legislators into doing the special interest’s bidding.  Also, it has been the conservative wing of the Republican party who has taken advantage of its constituents’ failure to understand what is in their own best interests convincing blue collar party faithful that they too will be rich someday.  Something that will probably never happen, but hope springs eternal, especially when we don’t know the facts.

Our problems can not be properly addressed by an inadequate free press and a public unwilling to ask to see the numbers so that decisions can be based on fully-disclosed facts and not by gut feeling or senseless adjective-filled slogans.

Numbers count but only if we know what they are and what they mean.

Why Do Bad Things Happen?

Since the beginning of time, bad things have happened.  They happened in nature, then Man came along and invented many more.  There are hurricanes, tornadoes, earthquakes, floods, droughts, volcanoes, lightening caused fires and predators hunting, frightening and killing their prey.  There is also illness, aging, terrible physical pain and death.  All these natural forces cause suffering and pain.

With human acts there are so many more varieties of bad things.  There are all of our favorite “sins” like murder, rape, theft, dishonesty, envy, jealousy, laziness, and arrogance and there are all the specific kinds ranging from individual to group to culture.  There are the people cheating on their spouse, there are the businessmen deceiving their customers, there are the adults abusing children, there are the politicians lying openly to further their limited cause and there are those who live off the work of others while contributing nothing themselves.  There are the groups and organizations which condone acts of cruelty like hazing, discriminating and  causing physical and emotional damage to others.  Then there are the cultural cruelties like bull fighting, capturing rare animals to use parts of their bodies for aphrodisiacs, boxing, tyranny, fascism, mistreatment of women, wars, corruption and injustice.

The eternal question is why?  Why is there so much suffering and loss?  If there is a G-d and if He is infinite, omniscient, omnipotent and benevolent, why does He allow this to go on?

Our Judeo-Christian teachings explain it as caused by original sin committed by Adam and Eve, our first family.  The thesis is that an angel, almost as powerful as G-d, revolted against Him and formed his own kingdom based on evil and sin.  This fallen angel convinced Eve to partake of the forbidden fruit.  She did and convinced Adam to do the same. The forbidden fruit has been assumed to be a real fruit, like an apple or orange.  It was most likely Eve herself who was the edible.  G-d had warned that if they partake, they will die.  Since they didn’t die immediately, they thought it was a false threat.  What G-d meant was that they would die, eventually, instead of being eternal.  Adam was given one of G-d’s day to live.  That equals 1,000 years in human terms.  Adam gave up 60 of these years so that the future Abraham could live longer.  Or, at least, that’s how the story goes.

So because Adam and Eve partake in their forbidden fruit, they created original sin and the mortality that came with it.  The question arises “why did they disobey G-d, their creator and provider?"  If anyone ever had free will, you would think that they had.  They were not influenced by the media (this was before T.V., radio, the Internet or even newspapers), it wasn’t peer pressure from some outside group, because there were none, it wasn’t financial considerations because there was no money and no place to spend it, it wasn’t the result of a poor upbringing because they weren’t brought up and their only father figure was G-d himself. 

And if they hadn’t disobeyed and became immortal, they would have had no offspring and there would be no you reading this and no me writing it. But there would also be no children, no culture or civilization. When Adam “chose” to create new life, he chose to have life not only begin, but also to end.


So if it wasn’t due to original sin, then why do bad things happen?  Could there be a single cause, a simple explanation?  Yes, I think so.

Entropy.

Entropy is a basic law of physics.  It is the disorganization of energy.  It is the agent of change.  Einstein realized what mystics knew for thousands of years - that all matter is energy and that it cannot be lost in the universe.  If nothing can be lost then it must be changed into different forms otherwise life would be static.  The mystics realized further that all energy is consciousness. Physics is slowly coming to this realization.

Most physicists would agree with this description of entropy but few realize its wide implications.  I asked the wife of a famous American physicist if he ever talked about the impact of entropy in everyday life. She said that he says it every time he sees his son’s messy room.  Yes, messy rooms are a perfect example of entropy - a clean and neat room can quickly become disorganized and messy.  Physicists see it in sand castles when the tide rolls in and disorganizes the structures returning them to lumps of wet sand.  But entropy is much more pervasive and ubiquitous.

I see entropy as a constant force, much like gravity, pulling at every finite thing or activity. It is the reason we age, get ill, die as well as the cause of mental disorders including Alzheimer’s and schizophrenia,and is the primary cause for machines breaking down, errors being made and everything that we think of as sin like lying, killing, stealing and even adultery.

Does this mean that humans have no free will but act only because of the effects of entropy?  I think that the answer is both yes and no.  No matter what our will is, we will grow old and die.  No matter what we do, our cells will die and be replaced by others.  No matter how hard we try, we will make mistakes and we will never be perfect.  It is because of entropy that Man has created cultures and civilizations with laws and mores reinforced by peer pressure be it social, economic, political or physical. Each culture is a different approach to dealing with the entropy that surrounds and penetrates our being, with some cultures being much more successful than others, cultural relativists notwithstanding.

Entropy causes humans and other animals to get sick and so each culture has its own system of cures and remedies. People and other creatures can harm other so each culture develops laws and enforcement policies to minimize this tendency. Societies set up systems to protect private property and personal well being from infringement.  Cars break down because of entropy so we have organizations to repair them and others to replace them with newer models.  Entropy makes us grow tired of the same thing so we produce new varieties and models.  Entropy makes one culture want to dominate or destroy another and so each country sets up defenses again being disorganized by their enemies.  Entropy causes the mind to be disorganized leading to various mental conditions.  We create different strategies for dealing with this from psychotherapy to meditation to organized religion to medications to tribal dances. Entropy causes us to die so we seek different ways of extending life and cheating death with surgery, medicine, acupuncture, homeopathy and group prayer. 

So entropy can be seen as a necessary evil that destroys in order to create. It is the cause of all our virtue as well.  If there were no entropy, there would be nothing to fear and so courage would be unnecessary; there would be no poverty and so there would be no need for compassion or charity or crime.  We could not get sick and so there would be no need for medicine, healing or even healthy food and exercise. If there were no entropy we wouldn’t age and die so there would be no need for children, sex or even physical attraction.  If there were no entropy, we would have little of use to do or be.  If there were no entropy it would be hard for us to remember anything because there would be no cause to have memories.

It’s some consolation to know that although we cannot rid the world of entropy, we must continue to battle it in all of its painful forms knowing it won’t disappear, (unless there is a messiah, savior or final Buddha to usher in the Golden Age which will be without entropy) but that our efforts will help develop us as individuals, groups and cultures.

But it is little consolation to those of us witnessing the brutality of entropy in our personal lives.  It does not relieve the parent whose grown child has been maimed or killed in some unnecessary war.  It does not comfort those of us who see an elder loved one losing his ability to hear or see or walk or think or remember.  It is of little solace to a person whose 15, almost 16, year old dog drags his hind legs as he walks now and collapses unexpectedly.  Knowing that it is entropy, life’s planned obsolescence, that will force his lifelong companion to his final rest does not diminish the heartbreaking pain.

Life is brutal because of entropy without which there would be no life at all.

Does America Got Talent?

Nowadays the most popular T.V. shows are neither comedies nor dramas - they are called reality T.V. shows.  Among the most popular are American Idol and America’s Got Talent.  Both shows audition thousands of American hopefuls who truly believe that they have a great talent.  The judges on these programs reduce the thousands to about 48 or 24 and then ask the American public to judge the performers and by their vote select and reject participants until only one remains.

Both shows originated in England (yes, I said England, not Great Britain or the U.K., but England!).  Both use judges from England as well as a few Americans to see if America really has talent.  And do we?

We watch the many pathetic souls who believe that their life’s salvation depends on some great talent if only it could be discovered.  We watch only to learn that in that case there is absolutely no hope for their salvation, since their talent was only  imagined.  It’s like watching the characters from Midnight Cowboy competing hoping for a miracle that never happens.

It soon becomes painfully obvious that barely a handful of the contestants have a talent of any real value.  The choices are usually so obvious that the voting seems spot on.  But then when the only really talented people remain, the top five or six, the voting becomes a popularity contest rather than one for talent.  The clearly best singer or act might not win because of some personal characteristic that does not appeal to the masses.  In American Idol it is usually because the talent seems too gay or too ethnic.  The winner is usually the nice, white, Christian person with some real talent, just not the most. The most recent winner was an exception to the rule.

I look at our country and see a similar situation.  We have nationwide, statewide and local talent contests every two, four and six years.  In every race, there are more contenders than positions and so the people must choose the one with the most talent for the elected office. Many of those running think that they have great talent that needs only to be discovered.  Many think that they can lead their electorate by making wise decisions on their behalf.  And we see it again now as the minority party tries to select a nominee to run against the President of the United States in “America’s Got A Talented Leader.”

There have been about nine people who formally announced their ambition to run for the highest office in the land.  How many of them have any talent for this competition?

There is the smartest of the group.  He has a Phd. in something basic like history.  He has white hair and used to be the Speaker of the House until his caucus told him to stop speaking for them and invited him to return to private life suggesting the professorial route given his education.  He chose the lobbyist/consultant route given his apparent propensity for greed and gluttony.  He had been doing the worst of the group putting his foot into his mouth each time it opened.  He reminded us why he lost his government job 15 long years ago.  We had almost forgotten how severe his hypocrisy really was.  But he somehow stayed in the competition and by a process of elimination rose to the top of this unsightly heap.

There is the one also exited from office and whose name means something unimaginably vile while his political opinions are almost worse.  He would eliminate Social Security and Medicare.  That would really do the trick.  No doubt, this candidate is eligible for neither so why should anyone else be?

Then there is a businessman who must have gotten lucky and made some money somehow.  It was not with intellect - no thinking or analysis there.  He got confused about what Libya was, came out with an absurd economic plan and then forgot about the settlements made to women who claimed he harassed them while he was carrying on a 13 year extra marital affair which he confused with a friendship with benefits.

These three contestants would have been eliminated at their first audition if this were a talent show.  That would leave six.  Check them out.

The leader of this group has been on the show before.  He was a contestant four years ago and was doing well until his policies came back to contradict him at every turn.  People quickly saw him as a phony who would say anything to get a vote.  His big pluses are that he is very rich and very good looking.  But those are his only pluses.

The understudy who was hoping to be there when numero uno falls, has a first name that seems to be an abbreviation of his character flaw - timidity.  He could not help appearing desperately weak while being too nice to be saying all those terrible things about his opponents. He has since departed quietly from the stage, almost unnoticed.  His best bet would be to change his name, grow a beard to strengthen his chin, die his hair white and run as an unknown, in Canada.

There is also a backup understudy who might even be related to the declared front runner.  They are both rich and are both very handsome and they share the same religion.  The understudy is more of an independent than a bone fide contestant in this talent show.  He is there just in case the judging audience comes to its senses, an unlikely scenario.

Then there are the next two.  One can only wonder who persuaded them to consider running for an office they could never win.  The two are very similar but not in good ways.  They both claim to be evangelical which means against gays, minorities, the poor, welfare, abortion and science.  They both feel that G-d speaks to them and that they respond because they want to help G-d do His work.  Neither has a clue about economics or foreign policy.  Their mantra is identical - cut taxes and shrink the government to its minimal and let the kindness and wisdom of the free market system driven by the richest among us rule the day.  The fact that both have spent their entire professional lives working for the government does not seem to faze them, it might actually strengthen their argument by making government employees look even worse.

At least with America’s Got Talent and American Idol, the five finalists have talent.  In this case the only one among them with any talent is the one most neglected because he is such a libertarian.  If he were on the talent shows he would lose because he isn’t the type to be popular even if he is the most talented.  Could he ever be forgiven for raising the son who went on to become Kentucky’s junior senator and its senior crazy?  Will he try to deny paternity at this late date?

I find it sad not only that this is all the talent the minority party can bring at such an important election, but that the American people are not surprised at our lack of political talent.  We have gotten used to being disappointed, so human failure is no shock to us. We’ve gotten used to inadequate news coverage of complex issues, and inadequate medical care caused by assembly line like appointments necessitated to maximize corporate profit.  We accept the fact that our public schools can not properly educate our children and that our precious tax dollars will be squandered in vain attempts to assist countries controlled by dictators.  We recognize that most of our T.V. shows and commercials as well as most of our movies will fail to entertain or enlighten us.  We have already stopped believing our politicians but nowadays we don’t even expect them to be intelligent, informed or having any integrity, with one notable exception, and from him we expect perfection, meaning doing everything we want. 

Foreigners always say that they hate the American government but love the American people.  Many of us have learned to accept that as making any sense at all.  In America we freely elect fellow Americans to run our government.  How are the two different?  The answer is they are not.

We Americans who know that we are the greatest people on earth living in the greatest country on earth under the greatest political system on earth, also accept all these afore-mentioned short comings in direct contradiction of and opposition to greatness.

Does America got talent? Does the emperor got new clothes?

Private and Public Ownership

For thousands of years, the notion of private property and ownership has been basic to Western Civilization beginning before the Old Testament and reinforced again in the New Testament.  We own many things.  Our possessions include our furnishings, clothing, cars, and real estate as well as less physical things like our names, our memories, our talents, our personality, our thoughts and, to some degree, our loved ones - human and otherwise.  Victims claim that losing their family member was like losing part of themselves.  Those who have dogs are called dog owners.

There is also the notion of public ownership.  Citizens are part owners of their homeland and residents are part owners of their public spaces, like parks, highways and bridges.  Those who pay for, use and depend upon public facilities have a vested interest in their continued availability.  Citizens elect representatives to not only make and enforce policies for the greater good, but also to properly maintain our public property.

The private sector which affects the flow of private property is driven by the profit motive, enlightened self-interest.  In our western, capitalistic society, the banking industry controls the flow of capital - the cause and effect of private ownership, by deciding to whom to lend money and for whom to deny it.

The public sector is controlled by government agencies whose bottom line is the efficient and effective distribution of public services to create and maintain public property not profit. 

Private sector workers are primarily motivated by the same profit motive as is their industry.  In this sector, in order to ensure maximized profit, employees are evaluated based on their    ability and effectiveness.  Just as private sector firms are competitive, so are their employees.  Only the best survive.  The better you do, the better you do.

In the public sector, workers are motivated either by a love of service to the community or the comfort of knowing that their jobs are safe and that their performance will not be used for or against them when it comes to raises and promotions.  This environment can foster a spirit of cooperation rather than competition.  It can also cause some to become less enthusiastic about doing much at work since it makes very little extrinsic difference.

We see this in education where poor teachers who have seniority don’t have to worry about losing their jobs because any layoffs that occur will affect the least senior teachers no matter how excellent their work has been.  We see this in our city’s and probably our state’s civil service system.  Public employees testing for promotional opportunities can not be judged on any of their past evaluations, no matter how behavior-based, because they could be subjective.  The promotion must be based on seniority as well as the results (subjective or objective) of a standardized oral and/or written examination.  Seniority and test taking ability are considered more important than actual performance.

The same is true in many public sector agencies where transfers to other units are granted based on seniority of the requester and the request and not past performance.

The effect of this difference in private and public sector performance is striking. The private sector employee is motivated by fear of job loss and ambition to succeed as well as any intrinsic motivations that might be involved such as pride in one’s work, wanting the organization to succeed, being of service and a nice working environment. The public sector employee can enjoy job security and excellent present and future  fringe benefits like a good pension, with some getting 90% of their pay in retirement and a Cadillac health plan.  There also is the satisfaction of serving the public to help make life that much more pleasant for the people affected by their services - police officers save lives and arrest criminals; firefighters save burning buildings and rush people suffering illness or injury to the hospital to sometimes save their lives; nurses and social workers help those in greatest social or physical need. Public sector gardeners can provide the community with beautiful spaces filled with nature as relief from the concrete and metal that surrounds us.

We must encourage our private sector by making wise purchases that reward quality and creativity, while our government agencies insure that the private sector companies can compete fairly and honestly in the free market to provide goods and services as effectively and efficiently as possible.

We must motivate our public service sector by treasuring our public property and insisting that it be maintained. Government agencies must stimulate their staff to maximize performance by holding them accountable to achieve certain agreed upon objectives and  responsibilities and by basing their career successes on their actual performance and not just their seniority.  

Historical, as well as current evidence, strongly suggests that the population is best served when there is a thriving, competitive, law abiding and creative private sector complemented by a vibrant, hard working, efficient and effective public sector to do what the other sector can’t or won’t. 

Alleviating the Foreclosure Crisis

There are said to be almost two million homes that are either in foreclosure or about to go into foreclosure.  It is estimated that more than one million homes will be foreclosed on this year alone. 

There are three main reasons for the foreclosures. One is that the interest rate on the adjustable mortgage has gone up making the payments for interest and principal too high for the homeowners to pay.  A second cause is financial hardship due to our damaged economy and high unemployment rates.  The third main reason is that the homes are now worth less than the money owed on it.  In some cases, the homeowners took out second mortgages to buy personal items figuring their homes would continue to grow in equity.  When they went down in value, not up, the debt exceeded the collateral’s worth.  Some of these homeowners elected to stop making payments since it appeared to be a losing effort.

In all three cases, everyone loses.  The homeowners ruin their credit rating, must move their family from their home and go rent something somewhere else.  The neighbors lose because each foreclosure in their area reduces their own home’s value and tears at the neighborhood.  The lenders lose because they must go months without payment and then must get the families out, fix up their homes and try to sell the homes at as little a loss as possible.

Most of the current programs to reduce this problem are themselves problematic.  The government spending money to help the homeowners is unwelcome now that we face such huge deficits.  To many, government intervention or banks forgiving part of the debt seem unfair remedies for the vast majority who do not have this problem.  Why should banks or taxpayers suffer because a few million families made financial miscalculations?  And how many people buy cars and pay loans on them that always exceed the car’s value, some might ask?

Here is an idea that could help some of  those about to be being foreclosed on because they can no longer afford their mortgage payments.

Why not rent the soon-to-be foreclosed homes to the homeowners until they can make the regular mortgage payment?  The rent would be equal to either the interest part of the mortgage or the current rental rate, whichever is less.  The mortgage would be frozen with the principal and interest waiting to be paid when the family is able or when values increase allowing the family to sell without losing a lot of money.

The family gets to stay put.  They do not ruin their credit rating, the family does not have to find a new place to rent, and no one has to be the wiser.

The neighborhood gains because it keeps the same neighbors and does not get a group of renters moving in.  The property values are unaffected because there is no foreclosure and the neighborhood maintains its feeling of community.

The bank gains because it continues to be paid for the place, does not have to foreclose and hurt the family, does not have to fix it up and sell it and does not look like the heavy forcing a helpless family to lose their beloved home.  The bank also avoids having other homes in the area lose their value which might make them more likely to foreclose.  

It’s a win-win-win.

A Simple and Fair Federal Income Tax

America is in the midst of an economic crisis. We have a federal debt in excess of $15 trillion dollars, we are running annual deficits of more than a trillion dollars, we have 13 million people out of work, 50 million people on food stamps and one in five of our children lives in poverty.  While job creation is essential, so is reducing the annual deficit by cutting unnecessary federal spending and by raising revenue.

Studies have found that the richest Americans are paying at an average rate of only 17%  for their annual federal income tax and that half of American households pay no federal or state income tax at all.

There has been much discussion about changing the tax code to make it simpler and more fair.  Conservatives want a flat tax with everyone paying the same rate.  They want to reduce the highest rate while expanding the base, meaning that more people would be paying taxes while the richest pay less than they already are.  The last time tax rates were lowered in favor of the wealthiest Americans, under the Bush/Cheney administration, the result was no new jobs,  record deficits, a Wall Street crash and the tattered economy we are now suffering.

I have a recommendation that would simplify the federal and therefore the state income tax code for individuals and couples, not including the self-employed.  My plan would be very simple, fair, and would raise at least $200 billion a year in new revenues.  This figure could be adjusted as can be the recommended tax brackets and standard deductions.

Under this plan taxes would have one purpose - collecting revenue with which to fund needed government services.  The tax code would not try to encourage or discourage behavior with deductions or credits.  It would treat all income equally be it from work (minus FICA deduction), dividends, pensions, insurance benefits, bonuses, interest, lawsuits, lotteries etc.

As of 2008, people’s income from stock dividends has been taxed at 15% while income from savings interest can be as high as 35%.  Actual capital gains are also now at the 15% level, down from 35%, while only a maximum of 85% of Social Security benefits are taxable and legal settlements are not taxed at all.  Under this new system all these income sources would be treated as equal.

Under this plan there would be no itemized deductions, only a standard one.  For discussion purposes it could be $15,000 for an individual or $30,000 for a couple.  There would be no deductions for children, medical care costs, charitable contributions, education costs, mortgage payments, state income tax etc.   Currently there is no itemized deduction for buying food for the family or for eating at restaurants with the kids, but people do it.  There is no itemized deduction for buying the family clothes, but people do it.  There was a deduction for interest paid on credit cards and car loans but that was dropped 30 years ago.  People still pay interest on them even though they can’t write it off.  The three martini lunch was dropped as a business deduction, but people still have them every day.

There would be only five tax brackets that would range from (after the standard deduction) 10% for net incomes up to $50,000, 15% up to $100,000, 20% up to $250,000, 25% up to one million, and 30% for income over $1 million These brackets could be adjusted to raise or lower the tax burden.

Here are some examples:

Imagine that there is a couple that earned $50,000 in net salary (after deducting FICA), $20,000 in Social Security benefit payments, $10,000 in interest and $5,000 in capital gains.  The total is $85,000.  The couple would deduct $30,000 in a standard deduction, leaving them a net income of $55,000.  The first $50,000 could be at a 10%  tax rate or, in this case, $5,000.  The remaining $5,000 of net income would be taxed at 15% or, in this case, $750.  The total tax would be $5,750 or 6.7% of their gross income.

Let’s say there is a couple who earned $200,000 in net salary and $310,000 in capital gains.  Their total would be $510,000.  Using the standard deduction, they would net $480,000.  The first $50,000 would be at 10%.  The second $50,000 would be taxed at 15%.  The next $150,000 would be taxed at 20% and the remaining $230,000 (net income over $250,000) would be taxed 25%.  So in this case, the couple would owe $5,000+$7,500+$30,000+$57,500 = $100,000 in taxes. That equals a 20.8% tax on their gross income.

As a third example has a couple making $5 million in capital gains, (including dividends also currently taxed at only 15%).  They would have a standard deduction of $30,000 and then owe $230,000 for the first $1 million and $1.2 million for the remaining $4 million for a total of $1.43 million or 28.6% in federal income tax.  

This tax code would not give an Earned Income Credit or a Making Work Pay Credit to low earners who currently not only don’t pay taxes but actually get paid taxes costing $115 billion a year.  The lowered rates for the wealthiest, under Bush/Cheney reduced tax revenues by almost $100 billion a year.  There would be no credit for student loan interest or for taking care of one’s young children.

That does not mean that those in need of relief for college loans, income supplements, special medical needs or anything else currently credited in the tax code would be ignored.  With the money saved, hundreds of billions a year, there would be money for these purposes.  More college grants and very low interest federal loans could be awarded to deserving students; low income workers could receive a reduced cost for health care benefits, help with rent payments, access to food discounts - benefits targeted at those in need of help.

But what about the loss of deductions for home mortgages and for charitable contributions? Will people still buy homes or give to charities?  Good question.

While home mortgages have other problems now, if people see buying a home as a lifetime investment in their own well being, they will continue to buy homes.  With some of the revenue raised by eliminating this deduction, more affordable mortgages can be funded to qualifying families.

With charities, it is an open question.  I have found in my own case, now that I have subjected my family taxes to the standard deduction, I still pay as much for charities and feel better about it because I am not also having to keep track of every receipt and tally them to see how much I can save for my kindness.  This way it is just out of the desire to help others without any expectation of reward.

I believe that this recommended tax code change would raise needed revenue by both expanding the base, meaning more than just half of all families will be paying some tax and by getting the rich to pay more but at a lower marginal tax rate. 

Then, if this plan is adapted and revenue is raised, it must be put to good use.  Government waste including fraud, inefficiency, ineffectiveness, duplication of effort and international overreaching must be reduced as much as possible.  Our tax dollars should go to good use.