Reverse Reaganomics

Ronald Reagan’s approach to governing still resonates with many who like the idea of smaller government, lower taxes, and “trickle down” economics. For those of you too young to remember, trickle down refers to the scenario where individuals and companies make a boatload of money and, in spending it, create opportunities and riches for those farther down the economic food chain. “Trickle” is the key word because a majority of the dollars seemed to stay in the pockets of those occupying the higher rungs of life’s ladder. Nevertheless, it still has support.

Unfortunately, the converse is also true: as money becomes scarcer at the top, less (or little at all) flows down to the lower reaches. We all know what does regularly flow downhill, though, don’t we and we’re getting more than a small taste of it as it “trickles” past. Within the upper echelons of the political and corporate worlds, much stays the same, but the trickling down of benefits has slowed to a barely perceptible degree. I’m not a physicist or an economist, but I’m surprised that such an outrage exists at such an understandable, and foreseeable, situation.

The slowing of the money train initially became obvious to me as Hurricane Katrina slammed into the city of New Orleans. The media reported that no agency seemed to be well prepared to deal with the aftermath. Perhaps “they” were very well prepared to allow other agencies to step in and foot a bill that “they” could not pay. The city was more or less broke and I find the idea that they simply waited for the state of Louisiana to come to their rescue more than plausible. Unfortunately, the state was no better off, financially, so deferred to FEMA. And we all know how FEMA performed. A combination of limited resources and bureaucratic obstacles created a debacle that continues to this day.

The latest example seems to be the extreme flooding in Atlanta and the surrounding areas. Once again, media reports show city officials hoping the state of Georgia will come to their rescue and state officials are turning to Washington for federal dollars. And, once again, we all know that the federal coffers have little to provide.

As help from Washington is reduced, states are forced to deal with their own problems, but their financial problems are no less severe. As the states turn to counties and cities for help by reducing the flow of money to those smaller entities, the supervisors and mayors look for help and find there is nothing lower (except the general population, of course). Each of us enjoys daily conveniences provided by each of these political players, but as the money slows to that trickle, those conveniences begin to disappear. Library hours are curtailed. Public swimming pools, parks, and the like are closed. Public universities reduce their enrollment numbers due to reduced faculty. Things we once took for granted no longer are there for the asking.

The business world is not much different as executive pay remains high so as to “attract and retain the brightest and best”. The worker bees, however, continue to struggle making ends meet as the cost of living goes up while the reward from working remains the same.

Let’s break this down to the family level. We’ll assume you have kids and they receive an allowance. They enjoy other benefits that seem to automatically flow from the fact that they live under your roof. Now you lose your job. The same trickle down that created a boon for your family during the good times is now morphed into their bane. The allowances decrease or disappear. Cable, cell phone, and the other accoutrements of the good life become, instead, luxuries that may not survive the scrutiny of a revised budget reflecting less discretionary income.

Face it folks: everybody’s broke. It isn’t limited to your family. Yes, your taxes are down because your income is down and/or your house value is drastically lower. So your contribution to the local, state, and federal cash boxes is lower. Why would you expect to maintain the same level of service from them when your own family can no longer expect the same level of service from you? The only way to find that money, short term, at least, is to raise taxes and that idea meets with instant outcry.

Our elected leaders claim to pay for everything by reducing (or eliminating) fraud, waste, and abuse. Nice theory, but I see it as more smoke than substance. First of all, nothing is 100% efficient, so you can scratch off waste as it is a by-product of effort. Fraud and abuse usually go hand-in-hand and so long as people are involved with any process, there will be those that take advantage.

It strikes me funny that, while many rant and rave about keeping government out of their medical affairs as we try to reform healthcare, some of the same folks rant and rave as services are reduced from the same government they claim to loathe. Which way is it? (No, you cannot have it both ways.)

Our economic way of life is changing in significant and perhaps irreversible ways and our consumer driven economy may well be a thing of the past. What will replace it? That’s anyone’s guess, but make no mistake: trickle down economics, just like most everything else, isn’t always a good thing.

BFF

There is no way anyone would confuse me with a cutting edge texter, but some of the more common abbreviations have made it down to my level. So BFF, or Best Friend Forever, is not completely foreign to me. What is foreign, however, is how the idea of best friends forever has permeated the world of commerce and how it has affected our buying decisions.

God only knows how hard it is to maintain any friendship “forever”, but those we do business with like to play on this BFF angle to instill a feeling of loyalty in our minds. Banks may well be the most proficient at this in light of their constant reminders of being in the neighborhood and always there when you need them. Airlines try for the BFF aura by awarding frequent flier miles and rewarding certain levels of participation with higher levels of attention. Kinda makes you feel warm and fuzzy, doesn’t it? But friendship is a two-way street and a closer look at the relationships claiming BFF status in the business world are anything but two-way.

I have a friend, Dave, who has maintained a long term relationship with the bank in his small, rural town. During this relationship, he has, from time to time, applied for an unsecured loan and has never been denied. And for good reason, since he has never failed in repaying the entire loan in a timely manner. Any business would consider him a good customer. Not any more, though. Dave’s most recent request for an unsecured loan (in an amount far shy of past requests) was denied. You see, the small town bank is now part of a larger group that passes judgment based only on numbers. No history, no relationship, no BFF. Sorry, Dave. Can’t help you. (He’s looking for a new bank, BTW.)

This tale got me thinking about our supposed long, close, mutually beneficial relationship we have with commercial enterprises whom we choose to frequent. The success of these BFF’s depends on one thing only: the continued flow of money from our pockets to their coffers. Once that stops, look out. No more BFF’s, my friends. Some companies dwell on their concern for your welfare while others “buy” your loyalty with perks that are dependent on your continued patronage.

Drug dealers aren’t much different, you know: they offer freebies until you’re hooked. Then the prices start going up. Prostitutes are famous for telling their clients what they want to hear and showering them with love and affection. For a price. Once the money train stops, so, too, does the affection. Am I likening corporate America to a bunch of drug dealers and hookers? I’ll leave that for you to decipher.

Try walking into your bank (assuming you are BFF’s) and asking to use their restroom. Or, perhaps, a cup of coffee. Something that a bank does not ordinarily supply, but something one friend would be glad to provide for another. Or walk up to the airline counter and ask for a meal voucher because you’ve had a bad day, the flights are late, and you’re hungry. After all, you’re a plutonium level flier and a BFF according to the literature they regularly send you. Simple experiments like these will readily separate the true BFF’s from the impostors.

It’s sad to say, but most of our commercial BFF’s out there are something far less loyal (or friendly). They hope that we’ll buy into their spiel, though, because, if we do, we’ll be CF’s (Customers Forever). Some businesses out there truly strive to meet our needs and expectations and will go the extra mile to maintain their business relationship with us. Others, unfortunately, are concerned only with creating the façade of loyalty and will turn their corporate backs should that prove to be in their best interest. It’s up to us to identify our true BFF’s out there in the marketplace and reward them with our repeat business. And for those that might think every business has a legitimate concern for the welfare of its customers: LOL!

Polarization

Some might think that I’m referring to the opposite of global warming. Sorry to disappoint, but I’m thinking of something far more lethal and much quicker: the disappearance of the middle i.e. movement towards either pole. The two types of polarization I’d like to dwell on today are economic and political.

Most of us, in describing ourselves, like to say we’re “middle class”, middle of the road”, “average”, or some such term that implies a position far from either extreme. However, should you take a look at the distribution of financial wealth, you’d be hard pressed to lay any claim to the middle of anything economical. Professor G. William Domhoff, a Sociologist at UC Santa Cruz, published an article in September 205 and updated it in May of this year (http://sociology.ucsc.edu/whorulesamerica/power/wealth.html). In the article, he compares financial wealth with net worth. The differences are subtle and complicated for a simpleton like me, but the bottom line is that financial wealth measures the control of income producing assets (stocks, bonds, business equity, etc.) and, as such, the “ownership” of America. And guess what? You ain’t in the middle, my friend: 42% of the financial wealth is controlled by the top 1% of households. And the next 27% of the financial wealth is controlled by the next 4% of households. So, 67% of this country’s financial wealth is controlled by the top 5% of households.

The middle class is melting away at an almost indiscernible rate, just like the ice caps and with equally serious side-effects. Those of us that still believe we’re in the middle of the financial world have used various forms of credit to maintain that façade and that has led to the economic malaise where we now find ourselves. How could this have happened and what can we do about it?

History shows us that the middle class originally thrived under the stewardship of labor unions. Until that time, the dependence on the generosity of management pretty much dictated the quality of life and the quantity of pay. And we all know that the generosity in question was in short supply as sweat shops and the like were the norm. The organization of labor, however, created a strong voice and coerced the industrial magnates into recognizing and rewarding the contributions of the worker bees.

Once this middle class was well established, the need for a union became lost on the younger, newer workers and, in the last several decades, union membership has dramatically declined. Once again, career rewards are predicated upon the generosity of higher-ups and, once again, labor has been left out when it comes to collecting those rewards.

There is no reason to believe that this state of affairs will turn around until the same effort is expended to create new labor organizations and reinforce existing ones. Only then, can we hope for a thriving middle class that fuels the consumerism that has historically provided the power of our economy. While that may take some degree of civil disobedience, it remains to be seen whether the workforce-at-large is up to the challenge.

The political middle is disappearing, too. Ideologues on the right are steadfastly against anything promoted by the present administration and the left, always seeking compromise and bipartisanship, is stalled with in-fighting and everlasting debate. (They say that Democrats fall in love while Republicans fall in line and such a sentiment is readily seen today.) Politicians seem to be more interested in personal agendas than what is good for America and, while this may be nothing new, it has reached previously unknown heights. Add to this mix a public that is more interested in sound bites and scandal and a news media more interested in ratings and it is not hard to see how we got to this point.

Last week, a new standard was set as the President was heckled in his address to a joint session of Congress. And as I write this, thousands are marching in Washington D.C. in opposition to the administration as much, if not more, as the current health care proposals. No middle ground, no serious debate, no progress.

It’s time that the Democrats take a page from the Republican play book and fall in line. The party made sweeping gains in the fall elections of 2008 and needs to start swaggering a bit. Hell, even our last president knew how to play that game with his “you’re either with us or against us” mantra. Bipartisanship? Nice theory, but it doesn’t seem to be working. I’d bet that the right would be more inclined to come along if they were faced with the prospect of being left behind. That possibility is remote, though, so long as the left continues its effort to woo, coddle, and cajole. Isn’t it time for a poke in the ribs or a kick in the ass?

And what about the silent, thinking types that haven’t taken to the streets? What with last fall’s network in support of candidate Obama, couldn’t we find some uninsured souls within staunch Republican districts to make their feelings known? They’re out there. You just don’t see ‘em on the “news” because they’re just not flashy enough, if they’re there at all.

The political solution to a vanishing middle may well be pure partisanship, should the votes make it possible. The threat of being left out of the game is a sure fire motivational tool guaranteed to bring about a more flexible point of view from would-be obstructionists.

The pendulums will always swing from one side to the other and, with time, it is thought that the extremes will lessen as everything shifts more to the middle. Well, I don’t think we can rely on that formula today and the irony lies in the fact that, as the middle slowly fades away, those still stuck “in the middle” suffer the most. In our own way, we must each try to slow down the momentum that is taking us away from that “happy medium”. Our economic and political well being demand it.

Shades of Gray

Jaycee Lee Dugard was kidnapped some 18-odd years ago. Her recent reunion with her family and the ensuing details of her captivity have re-ignited calls for “one strike and you’re out” for those convicted of sexual crimes of any type. This reaction is normal, can be expected, and is completely visceral. From the gut, in other words. Other groups rely on visceral reactions: lynch mobs, vigilantes, and similar self-appointed defenders of society. My question today is whether this is the type of society and justice we now seek to deal with these problems.

Every day, felons are released from prison on an unsuspecting public and many of them wind up as repeat offenders. And the more heinous the crime, the louder the hue and cry for throwing away the key. Stand in a room and spread your arms as wide as possible from left to right. Let’s call the left hand “angelic” and the right “satanic”. (I know, it should be the other way around, but I’m left handed, so give me a break.) Now, no one would argue that those resting on the right hand should rot in prison or, perhaps, be afforded a speedier exit from this world via a syringe. And those on the left hand are saints. Simple, huh?

Now, bring your hands together a bit, say to a 45 degree angle. The halos of the saints are now a bit tarnished while the true devils start to take on some redeeming qualities. OK, let’s bring our hands to within one foot of each other. The differences start to meld with the similarities and it is becoming increasingly difficult to separate the good from the bad. It becomes a matter of which criteria we use to make such a decision and it is far from the clear cut position from whence we started.

It’s time to introduce the cerebral component into our little experiment. The gut feeling wanes as our hands move closer together and the mind is now asked to render a more judicious verdict. Is this approach fool proof? Far from it. Will it prevent further dastardly deeds? Hopefully, but there is no way to predict success.

Welcome to today’s legal system. A closely woven fabric, but not so much so that unintended consequences cannot slip through the gaps. And when they do, depending on the level of their egregiousness, our collective gut once again roars for something more perfect, more black and white so we can sleep well knowing such aberrations will not recur.

Sorry, folks, but our lives revolve in a world of grays. Few saints or satans any more as we are continually asked to pick the lesser of two evils. So, while it’s easy to demand perfection, it is far more difficult to deliver in this imperfect world. Accordingly, the mind must overrule the gut in situations like this and realize that there’s only so much one can do and, when things like this happen, strive to minimize future failures of the same kind. Let’s call it maturity because that’s exactly what it is. Maturity is what reins in the visceral before it manifests itself into action while allowing the cerebral to take charge and keep things in perspective.

Should you be outraged at the failings within the system that allowed Phillip Garrido to escape notice for 18 years? Hell, yes! But to allow that outrage to take a supposed logical next step to locking every sexual offender up for life serves no real purpose save soothing the gut. Our attempt to win the war on drugs by locking up every two-bit, penny ante drug hustler or user has met with little or no success. There is no reason to believe a similar course with sexual predators (as a group) would fare any better. I know, it’s frustrating living in the world of gray. But most of us are a combination of good, bad, and ugly and all we can hope for is winning more than we lose.