Aug 052010

Senate Minority Leader Mitch McConnell joined an array of Republican lawmakers who feel we should examine whether to rescind all or part of the 14th amendment to the Constitution to prevent some children born in the U.S. from being granted U.S. citizenship. The pro-life, pro-family Republicans are now pro-neonatal detention and deportation. It isn’t enough to drive out the people not born here, now they want to drive out the ones that were.

Actually, I agree with Senator McConnell. We absolutely should hold hearings as soon as possible to discuss whether we should amend the U.S. Constitution to make newborns deportable. We need a high-level national discussion in both Houses of Congress on the issue of whether to station federal ICE agents in every maternity ward and delivery room right between the OB-GYN and the expectant father.

Rep. Luis Gutierrez, Congressman

Representative John A. Bingham of Ohio, princi...
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Great, so Rep. Gutierrez is already fear mongering up a storm with scenarios of Gestapo enforcers stomping around in maternity wards. I can’t help but wonder how liberals separate this type of fear based campaigning from the Sarah Palin death panels. Both contrive wildly extreme possibilities in order to discredit legitimate concerns, and neither attempts in any way to identify a solution.

I’m sorry, but I find it poetic that the one amendment to our Constitution that was enacted without rightful ratification and is also unconstitutional in its inclusion of ex post facto law, should now be the subject of such debate. The 14th Amendment obviously did the right thing in providing citizenship to blacks and guaranteeing due process and equal protection, but the way in which it was enacted was an abomination. And now, the Party that illegitimately enacted the amendment wants to review and possibly rescind it. Now that’s poetic!

Personally, I‘d like to see the amendment changed, but that certainly doesn’t mean that I would support any retroactive application. The truth seems evident that the enacting Congress didn’t address the potential for abuse from illegal immigrants having children in order to obtain citizenship. That’s the just the way it is.

People like me, who believe that the abuse warrants a change, have but one form of recourse — amend the Constitution. That’s the way we do it in the United States. To do otherwise is to subvert the very spirit of our democracy.

I for one would welcome a national conversation on this topic. I’d like to hear the reasoning of people who believe that a child born of parents in the United States illegally should be granted citizenship. Is there an ethical argument? Is it simply a position of practicality? I’m sorry, but to me it wreaks of defending the rights of litigation for the guy who climbs on somebody’s house to burglarize them and falls through their skylight and gets injured.

I know, I know — there’s a child involved. But what I don’t understand is why there’s not more outcry against parents who would use their child this way. Break the law and hide behind a child . . .  now that sounds unethical to me.

Whatever side people are on, wouldn’t it be great if we could all just state our piece and work together toward a solution? It would be quite remarkable, but we’ll never get there so long as every issue is met with all the fear-mongering hyperbole currently waged by conservatives and liberals alike. How about instead, we stop the posturing, listen to one another and open a dialog?

Read the Article at HuffingtonPost

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Aug 052010
Title: "No, No! Not That Way" Locati...
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The good news about Meg Whitman is that, while she does subscribe to the same policies prescribed by Congressional Republicans, she has rejected their tactic of running on pure contrarianism and has actually formulated a plan. Her plan, which is readily available on her website, lays out her priorities and communicates with reasonable accuracy what can be expected under her leadership.

The first of Ms. Whitman’s priorities is the creation of jobs. Her campaign promise is to create 2 million private-sector jobs by 2015. Her plan to facilitate job creation is taken straight out of the conservative’s handbook — roll back regulation and cut taxes. Of course, this is exactly the recipe that created the recession that Whitman hopes to get us out of, but hey — maybe it’ll work this time.

On the tax cut chopping block are the $800 pre-paid minimum tax to form an LLC and a cut to capital gains, which California currently treats as regular income. She also supports increased credits for both R&D and agricultural investment in water conservation. On their own, these changes all have some merit, but when taken as part of a bigger picture, they quickly lose much of their luster.

Certainly, when looking to spur innovation, credits for R&D make a good deal of sense. But to think that a large number of new businesses would be created because owners wouldn’t have to pre-pay $800 seems a stretch. On capital gains, Whitman just wants the tax eliminated. Her website calls it, “double taxation at its worst,” yet previously taxed money is routinely taxed again, as in the case of sales tax. The only real difference to make capital gains “the worst” is that it applies almost exclusively to the rich.

The Whitman plan suggests that California’s treatment of capital gains needs to be aligned “with other competing states,” and mentions nine that have no capital gains tax. What it doesn’t mention is that none of those 9 states have state income tax, and that all of the other 41 tax capital gains as regular income — just like California. She also fails to mention that, amongst her nine-with-which-to-align, only Wyoming has lower property taxes than California, and some, like Texas tax property at nearly three times the California rate.

Whitman’s position on capital gains should come as no surprise. She is a supply-sider and aggressively supports tax cuts for the rich, no matter how regressive they are. The cut to capital gains is without doubt the largest piece of the Whitman tax plan, and while it may indeed spur some economic activity, one thing is certain — it will trim billions from the tax bills of the wealthy, including Whitman herself.

Of course, cuts to capital gains taxes are very popular with conservatives, and are always touted as great stimulators of investment. The problem is that most economists disagree, and the historical record supports their position. As far back as 1980, conservative economist, Larry Summer’s definitive study concluded that eliminating federal capital gains would raise U.S. output by only 1 percent over the next 10 years. His conclusion is strongly supported by empirical data.

Past cuts in the federal rate refute the conservative myth and support Summers. The rate was dropped in 1978, and turned the prior year’s 5.8% growth into a decline of 1% over the following 18 months. It was cut again in 1981, and instead of the prior year 3.5% growth, the following year dropped 2.8%. Of course, this might be coincidence, but it is a bit odd that when the rate was increased in 1976 and 1982, it was followed both times by improved growth. It’s also interesting that Whitman promotes the cut as a job creation effort, yet for each of the adjustments mentioned above, unemployment climbed when capital gains were cut and vice versa.

The fact of the matter is that the theory behind the stimulating effect of cuts to capital gains tax is flawed. Very little of the money saved by the wealthy is actually returned as investment in job-creating activities. Just like the cuts to the marginal rates in the 80s and both variety of cut under G.W. Bush, when the tax burden on the rich is reduced, the money is often saved or spent on economically meaningless items like art work and sports cars. If the net effect of tax cuts directed at the rich had any positive impact on job creation, the Bush era would not have been the slowest period of job growth of any cycle since 1945.

Meg Whitman wants voters to believe that she has the experience and the plan to create jobs in California, yet she offers nothing more than the same old tried-and-failed conservative voodoo. The national jury is in on Whitman-style policies, and the finding is that they best serve only one purpose — to further concentrate wealth amongst the most affluent. Middle class voters need only look at the historical record to understand this truth. Like the federal policies of the past 30 years that have concentrated more wealth in the upper 1% than is held by the bottom 90%, the only way Whitman’s plan creates jobs is when the middle class becomes willing to work for scraps so that the economic elite can bask in their opulence.

But, unlikely as it is, that capital gains tax cuts will spur job growth, it’s certain that they will reduce State tax revenues. Looking back to just before the economy crashed, California took in $10.8 billion in capital gains tax revenue in 2007. Voters might wonder how the State can forgo such revenue when faced with deep deficits, but they need not worry. Meg Whitman has that figured out too. Whatever shortfall may still remain after all the wonderful new economic activity generated by her tax cuts will be fully offset by cuts in spending.

So in short, Whitman proposes to combat a $20 billion deficit by eliminating billions more in tax revenue and making up the difference with spending cuts. How will she do that?

More about that in Part 3 — a look at the Whitman spending plan.

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Aug 032010
Meg Whitman
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In the latest round of campaign numbers released yesterday, Meg Whitman reported that her spending had topped $99 million. Undoubtedly displeased by the lack of a “Buy It Now” button for the governor’s office, $91 million of that total came from Whitman’s own money. But being a billionaire, with wealth estimated by Forbes at $1.3 billion, there’s no question that the former CEO of eBay can afford the expense. The real question is, “can California afford Meg Whitman?”

With California sitting at over 12% unemployment and facing a $20 billion budget shortfall over the next 18 months, Whitman is running as the person who can cure these economic woes. In order to accomplish this, she intends to focus on three key initiatives: creating jobs, cutting spending, and fixing education.

Having no prior experience in government service, the Whitman campaign is relying mostly upon her record at eBay to substantiate claims that she has the savvy to succeed were others have failed. Spot on is Whitman’s focus on job creation, and her campaign wants voters to believe that she is the person who can make it happen. They claim that since Whitman’s time at eBay resulted in a growth of employees from 170 to over 15,000, she alone has the experienced required.

But is this prima facie evidence that Ms. Whitman can create jobs in California?

Unlike her Republican counterpart running for Senate against Barbara Boxer, there is no doubt that Whitman knows how to run a company. She did preside over a period of extreme growth for eBay, but one has to ask themselves, how much of that growth was due to Whitman. When she arrived at eBay, although small, they had tapped into a previously undiscovered niche in Internet commerce. They already had a successful product and were set to expand. Whitman did a commendable job of overseeing the expansion, but to give her credit over product and timing is naïve.

As CEO, the job is largely strategic, and a sound argument can definitely be made that many of Whitman’s efforts in that area were less than successful. In fact, her single biggest strategic move was the purchase of Skype at a price of $2.6 billion. Yet she pushed this through without a clear concept of how eBay would make money from the endeavor. The company was forced to write down the value of Skype in 2007 to a little more than half of what it had paid — $1.4 billion. Another of Whitman’s acquisitions, StumbleUpon, was left for her successor to lift into the black. But having no real fit with what eBay does, Skype was finally sold and StumbleUpon was spun off.

So, if a candidate has no government experience, has only created jobs in an environment of rapid growth, and is arguably a bit weak in the strategic leadership department, what exactly are voters to believe makes Meg Whitman a good candidate for governor?

More about that in Part 2 — a look at the Whitman job plan.

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