Wednesday, February 25, 2009

Evaluation of President Obama

I find it interesting and revealing that critics of President Obama, seeming to be primarily ideological conservatives on the right of the political spectrum, especially in the U. S. Senate and certain media talk show hosts, have been quick and rather critical in evaluating his performance to date.

Ladies and gentlemen, he's only been in office for a little over five weeks! He inherited a deep recession, a very serious financial market crisis, a big housing problem, a huge federal budget deficit, a large and increasing unemployment rate, a sharp decline in the stock and bond markets, and two difficult, expensive wars in Iraq and Afghanistan. He also inherited critical Social Security and Medicare programs that for many years have needed restructuring and reform. Let's be reasonable and give him some more time to perform.

He and his staff have stumbled a little in vetting a number of important nominations for his cabinet and perhaps more details could have been provided earlier for their plans for dealing with the troubled banking system. However, given what's on his plate and how short a time he's been in office, I think he and his administration have done quite a bit and very well. With an approval rating averaging 70% since he became President, and very recently at 63%, the general public seems to agree.

In domestic affairs, of course, despite noisy partisan objections, he has obtained approval by Congress and signed into law the $787 billion stimulus package called the Recovery and Reinvestment Act. He has also developed and promoted plans to invigorate our very weak banking system to get badly needed credit flowing again, developed a housing plan to stem foreclosures, made an outstanding speech on his vision for domestic initiatives and priorities to Congress, and presented a massive and comprehensive $3.6 trillion budget for the fiscal year beginning October 1st. In foreign affairs he has traveled to Ottawa to meet with Canada's Prime Minister Stephen Harper and by all counts had a very cordial and productive meeting with the leader of our biggest trading partner. Secretary of State Hillary Clinton recently returned from a useful trip to the Far East where she met with senior government leaders in China, Japan, South Korea, and Indonesia, among the most important countries in Asia and vital trading partners. A new strategic plan for our sensitive military and political activities in Afghanistan is in the works.

His Republican critics have a right to be concerned with a much bigger and activist federal government, more large budget deficits, and growing national debt. I am as well, particularly if they become long lasting. However, given current circumstances, what realistic options are there, at least for the next two three years? There is virtually no chance that a passive federal government would work. Neither would employing primarily thinly regulated free markets, leaving everything for the private business sector or individual Americans to turn the economy around. There is also no good reason to believe that the stimulus package could have been more effective if it had had a smaller level of infrastructure and other federal projects , and a corresponding higher level of tax cuts, as many congressional Republican leaders have long maintained. It isn't very instructive to point to any historical political example to support one's view. We're living in a different new world now with a unique, highly globalized economy and key technologies that largely did not exist 20-30 years ago.

Almost everyone agrees that the position of President of the U. S. is the most important and probably the most challenging of any in the world, especially today. I think we are very fortunate to have a man as bright, articulate, self-confident, and cool-headed as Barack Obama serving in the prime of his life. It is reassuring that he has surrounded himself with a lot of experienced and capable people who are not afraid to provide their opinions, and that he is a good listener. We certainly do not know for sure that he will ultimately be successful. We do know that he has a highly ambitious agenda and that he will face serious partisan political obstacles in getting many of his initiatives approved in the form he will be seeking.

However, even many strong critics maintain that he is very likely to be reelected in four years if he and his policies are able to do just two things: turn our economy around on a reasonably sustainable track, and keep us free of any terrorist attacks in this country, regardless of what else he does not get done. I'm not sure if that's entirely true, but I'm cautiously optimistic he will be reasonably successful. All Americans should hope that it works out this way, because we are all important stakeholders, especially those of us who happen to earn less than $250,000 annually. Let's not forget that. He needs and deserves our strong support.

Wednesday, February 18, 2009

Justice Reform for Taxpayers

Reading two inconspicuous articles in the California section of today's Los Angeles Times reminded me of the need to reform our justice system in fairness to us taxpayers, while maintaining the current basic civil rights for our citizens and legal alien residents.

In one article, a Superior Court jury in San Diego yesterday found that four male firefighters were sexually harassed while driving a fire truck in a 2007 gay pride parade and were entitled to $34,300 in damages from the city, which apparently plans to appeal. The firefighters had sued the city because they were ordered to drive the truck in the 90 minute parade, even though firefighters in previous gay pride parades had reported being taunted with sexual innuendos. In his arguments to the jury the successful attorney for the firefighters claimed the city "disrespected these men and violated their rights." Understandably, after the lawsuit was filed, the Fire Chief changed department policy and made participation in gay pride parades voluntary.

I have several reactions. There are too many attorneys looking for clients. Too many jurors are not really qualified to serve capably. A case like this should not be decided by a jury, but by a judge, if it should be adjudicated at all. The fire fighters should have been able to deal with the harassment without resorting to lawsuits, especially when they should have known that it was likely going to take place. The gays involved should have behaved better and not doing so probably harmed sympathies for their rights in the community at large. The city should win on an effective appeal. Far too much taxpayer moneys were used, because of how this case was handled, not only for the $34,300, but the probably larger and unnecessary courtroom costs involved.

The other article reported that a San Quentin inmate on death row for murdering a 12 year old girl in 1981 died of natural causes at 65, after spending twenty-two years fighting execution. The girl had been on a camping trip with her mother and a friend in Cleveland National Forest in Orange County. The girl's friend was also shot, but survived. The inmate apparently didn't know the girls at all, and his motive for shooting the girls never clearly emerged in the lengthy trial held originally in 1983.

All inmates, especially those on death row, should, of course, have the right to appeal their sentences. No one can credibly argue that point. However, it's not reasonable and not fair to the taxpayers that a legal appeal process can last more than twenty years. It really should not be necessary and appropriate to last more than five years in most cases and ten years in exceptional cases, without unfairly affecting their civil rights. At 1/1/08 there were 3,309 death row inmates in the U. S., of which 667 were in California, 397 in Florida, and 373 in Texas. It is difficult to come up with accurate figures, but the cost of legal appeals, housing, feeding, guarding and providing medical care to these inmates adds up to a great deal of money, probably in the hundreds of millions of dollars annually. My understanding is that the average time spent on death row is more than 20 years. If the appeals process could be limited to an average of, say, eight or ten years, these very large total costs could no doubt be cut in half, with huge savings for taxpayers.

The highly sensitive subject of capital punishment is another important different, though closely related, issue. Some people favor abolition of capital punishment, others favor retaining capital punishment for the most serious crimes, and still others favor swifter capital punishment for a broader category of crimes. Justification for their respective views vary. The majority of the justifications seem to include concern that some of those scheduled for execution may actually be innocent, which I share, a desire for "justice" for those murdered or otherwise harmed, a perception of deterrence to other prospective criminals, and a desire to save unnecessarily spent money for the taxpayers, which I also share. Certainly all these views have merit and should be respected, though many experts maintain that capital punishment is not really a deterrence to a great many hardened criminals.

In any case, it's obvious that we have material weaknesses with our current system of justice. A comprehensive and serious review of how best to improve it is needed. One of the major objectives of such a review, aside from maintaining basic and reasonable civil rights for the accused and convicted, should be clearly identifying and quantifying how an improved system of justice can appropriately save taxpayers unnecessarily spent moneys.

Tuesday, February 17, 2009

Campaign Finance Reform

The significant level of criminal, illegal, unethical, inappropriate and generally unacceptable behavior by our elected representatives in federal, state and local governments in recent years has been shameful and embarrassing. Recent scandals demonstrate that some politicians are more than happy to trade away their offices for private gain, often referred to as "pay-to-play" practices. It understandably but unfairly makes voters cynical and suspicious of all our politicians, the great majority of whom are most probably honest and hard-working, and also has had an adverse impact on the governments' productivity and efficiency to the detriment of the public's best interests.

It's my view that much of poor behavior is directly associated with campaign financing practices and the complex and frequently violated underlying laws and regulations. Major reforms are needed in one form or another. It was therefore rather surprising and disappointing that so little attention to this issue seemed to be given in last year's presidential campaigns.

What unacceptable behavior am I thinking about? Two of the most notable decades ago were those involving U. S. Senator Joe McCarthy and his very questionable congressional hearings held in the early 1950's, and the the Watergate scandal involving President Richard Nixon in the early 1970's, forcing his resignation.

More recently, a noteworthy example is associated with disgraced former lobbyist Jack Abramoff, who provided free lunches, luxurious golf outings, and luxury box seats at professional sporting events to well-known politicians in return for legislative favors helpful to Abramoff's clients in violation of government rules. Abramoff pleaded guilty to three felony counts, including conspiracy to bribe lawmakers, mail fraud, and tax evasion. Some of those implicated were President Bush's senior advisor, Karl Rove, former Congressman Bob Ney, and former House Majority Leader Tom De Lay.

Other examples include the scandal involving former Congressman Randy Cunningham, who resigned in November 2005 for taking $2.4 million in bribes from defense contractors, and former Congressman Mark Foley, who sent solicitative emails and sexually explicit text messages to young men who previously served as congressional pages. Then we have the recent scandal involving U. S. Senator Ted Stevens of Alaska, convicted of seven corruption counts in October 2008. Finally, among many others, there's former Illinois Governor Rod Blagojevich, arrested for trying to sell his nomination to replace Barack Obama as Senator for the state who's possibly facing up to thirty years in prison.

There's no doubt that greed, a deep desire to gain and maintain political power, and a belief many of these characters have that they will never be caught and prosecuted were factors in this very poor behavior. However, I think it's clear that a bigger factor in most of these, and many other examples that could be cited, are the increasingly high costs of election campaigns and our complicated campaign finance laws and regulations.

In the 2004 presidential election the candidates spent a total of $718 million. In the 2008 presidential election Barack Obama reportedly spent $730 million alone and John McCain spent another $333 million. It's crazy. The way it is now you can't compete unless you are very wealthy or are prepared and able to spend a great deal of time and effort in fundraising to support your campaign financing needs. Most of the larger contributors expect tangible political favors, good jobs in the administration, or special access for themselves or hired lobbyists after the elections. As we've seen, this breeds actual or de facto corruption and impedes efficency and good government. Major reform is needed, notwithstanding objections from those who lean heavily on First Amendment rights related to free speech.

Campaign costs need to be greatly reduced and regulations need to be greatly simplified with limited, if any, loopholes. An important goal of the reform should be to make running for office more affordable and attractive, and make massive and time-consuming fundraising less necessary. One approach to this is strong bipartisan support for reasonable spending limits. Another approach is to pursue voter approval for public financing covering, for example, up to 50% of presidential and congressional campaigns with a fixed upper limit. A third approach, which perhaps is best, is to use the leverage of the Federal Communications Commission to secure a certain level of free and equal TV and radio time for the major candidates in general elections, coupled with an agreed spending limit for other needs.

Regrettably I'm frankly not optimistic about the near-term prospects. There are so many other important issues that seem to have a higher priority, including foreign policy, healthcare, education, energy, and Social Security. In addition, legislative efforts to rein in campaign spending have almost always attractived stiff resistance. Unfortunately, there are so many entrenched interests who want to retain the status quo, including incumbent politicians, the hospitality industry, and wealthy individual and corporate campaign contributors who want favors in Washington.

Monday, February 9, 2009

Economic Stimulus Package

I agree with President Obama that we need to get this bill urgently approved by Congress, signed into law, and begun to be implemented as soon as possible, no later than the middle of next week. That obviously doesn't mean any bill will do. However, given the staggering and growing layoffs and unemployment numbers reported almost daily, a "better" bill in 30 days may not be as effective as the final compromise bill Senate and House representatives should be able to come up with and voted favorably on by Friday or Saturday this week.

I also agree with most of what long-time "MoneyTalk" host Bob Brinker said about the final bill on his radio show yesterday:

1. No pork projects must be allowed to creep into the bill, just because a legislator wants to satisfy lobbyists, constituents or campaign contributors, or any personal ideological view.

2. Infrastructure projects that are not "shovel ready" to stimulate the economy in the short term should preferably not be incorporated, even though they are good projects that are beneficial and appropriate over the medium or longer term. That said, I'm certain there are many needed public infrastructure projects that can be made "shovel ready" on a very fast track to stimulate the economy with tens of thousands of new jobs within a short 3-6 months time frame.

3. Even though it's apparently not being considered in the Congress so far, a temporary reduction in the payroll tax would be a prudent tool because it puts more money in the the hands of both employers and employees, and it would be easy and quick to implement. I'm talking primarily about the 6.2% currently withheld from an employee's pay and equally contributed by the employer for Social Security and the current 1.45% for Medicare .

4. To help stabilize the housing market, I like the idea of a temporary 10% tax credit of up to $15,000 for the purchase of foreclosed properties as a primary residence for, say, the next six months, with the possibility of an extension for the remainder of 2009.

5. Keeping in mind that the U. S. has about the highest corporate income tax rates among the major developed countries, and that this has induced many companies to move headquarters and operating units to lower tax jurisdictions abroad, I think lower corporate tax rates could stimulate near-term investments in new machinery and equipment and reduce pressure for more layoffs.

To the Congress members working on reconciling the respective House and Senate bills in the next several days, I say that the American people expect you to work expeditiously on a bipartisan basis to do what's in the country's best interest. No more politics as usual. Earn your generous pay and benefits! Get it done!