Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Politics : PRESIDENT GEORGE W. BUSH -- Ignore unavailable to you. Want to Upgrade?

To: tonto who wrote (681388)	5/2/2005 6:15:05 PM
From: tonto	Read Replies (2) \| Respond to of 769667

Are Democrats a Bankrupt Political Party? by John Buell Substantial majorities of Americans now lack confidence in the President’s ability to handle the economy, retirement security, and health care. Yet even some Democratic pollsters acknowledge that the President’s difficulties have not translated into gains for the Democrats. Perhaps that is because many working class Americans justifiably lack confidence that Democrats will do anything to advance their interests. Nationally, the Democrats suffer from a branding problem. They have neither a distinctive nor convincing message. Democrats once portrayed themselves as the party of the working class. If working class means the blue collar, industrial worker, the party has long since deserted those Americans. One can debate whether President Clinton’s NAFTA benefited the nation as a whole. There is no doubt that it has led to massive layoffs in manufacturing. Aid for long term unemployment and retraining and comparable jobs for displaced manufacturing workers have lagged far behind the need. Yet even after NAFTA’s problems became painfully obvious, many Democrats have continued to push new trade initiatives that benefit corporate interests while imposing their costs on workers. In the last few months, Democrats regained some traction through steadfast and relatively united opposition to President Bush’s dangerous proposal to privatize Social Security. Nonetheless, much of this recent gain has been squandered by the Party’s shameful performance on so called bankruptcy reform. The new bankruptcy law notoriously makes it harder to file for bankruptcy under the more lenient Chapter 7 provisions. Chapter 7 grants some forgiveness to a borrower on loans not secured by collateral. Narrowing Chapter 7’s mercy provisions has been a longstanding goal of the credit card industry and their Republican allies. More surprisingly, it gained the support of eighteen Democratic Senators and 73 House Democrats. (Maine's Tom Allen opposed this bill, but Michael Michaud, who portrays himself as a supporter of working class interests, voted yes.) Defenders of this legislation made two major arguments that indicate how disconnected they have become from ordinary working Americans. They reminded opponents that only families with incomes above the “median” level in their state would be subject to the more draconian Chapter 13 standards. They also argued that getting more money out of borrowers who unfairly game the system would lead to cheaper credit for ordinary, responsible borrowers. Both arguments are flawed. For starters, one should revisit elementary math and economics 101. The new law chooses as its cut off point median income rather than mean or “average” income. Consider an imaginary island republic with eleven citizens. One citizen earns $500,000 a year, the next two earn $200,000 , the next two $50,000, and the bottom 6 all earn $10,000 a year. In this society, the median income is 10,000 a year and the average is about 100,000. There is a reason why legislators chose the median income rather than the average. As income distribution has become increasingly concentrated in the last quarter century with very high numbers at the top, the distance between the median and the mean income has grown in both relative and absolute terms. Here in Maine, the median income for a four person family is about $60,000. This figure is hardly a princely sum, with mortgage, taxes, and increasing health, heating and transportation costs all to be paid out of it. These are exactly the people Democrats should worry about. The largest cause of personal bankruptcy is now the loss of healthcare coverage or other family emergency, not profligate spending or attempts to game the system. As Medicaid is trimmed and as private employers cut back on coverage, such bankruptcies will only grow, and more of these unfortunate families will be subject to the draconian bankruptcy terms. Will credit card companies use their new windfall to make credit more available to the rest of us? This is not likely. The industry is a classic oligopoly, where a relatively few players have large market shares and can influence the price of credit. If their capital costs go down, it will be in their interest to pass along only some, but far from all, of these savings. Engineered shortages work just as well for credit card companies as for OPEC. It will also be in the industry’s interest to use some of their growing profits for advertising. Enhanced advertising can both increase demand and erect further barriers to entry (in the form of brand name recognition). Our airwaves and mailboxes are already deluged with misleading ads designed to lure more of us into risky debt. When these efforts do succeed or when consumers face unfortunate circumstances, the courts will now come to the aid of industry. Moral hazard now rests with credit industry leaders, whose most base instincts are only being validated. Worse still these instincts are aided and abetted by a Democratic Party ever less willing to defend its own brand name. Little wonder the party can’t grow even amidst tenuous economic times.

To: tonto who wrote (681388)	5/2/2005 7:20:07 PM
From: ManyMoose	Read Replies (1) \| Respond to of 769667

I think it's a good idea, and maybe I'll write to Bush to add my support. The hard part will be keeping congress out of the fund until the person gets to be 65. The Thrift Savings Plan is supposed to be owned by the participants, not the government. When Clinton and Congress couldn't agree on a budget some years back, the government tried to stay open past the continuing resolution. Guess where it "Borrowed" the money from! I challenged this in an employee meeting when it was announced. "What gives the government the right to do that? It's OUR money!" I asked. "Oh don't worry, you'll get it back." Right.