J.C. Moore Online

Current events from a science perspective.

We all have different ideas about what is a fair tax policy and a fair distribution of wealth.  Below are some pictures and graphs  which  show that conventional wisdom may not give us a clear picture of the facts – and that we may need to reconsider what is actually fair.

State Taxes: Last year, Oklahoma cut  state taxes and is considering another tax cut. The graph below is the data for Oklahoma from the Institute on Taxation and Economic Policy .  It shows that those in the lowest income group pay the highest percentage  of their income in taxes.  The 2012 Oklahoma tax cuts skewed the distribution even more, as 75% of the tax cuts went to the top 20%  in income.  You may look  up the data for your state at the link above. The tax cuts in Oklahoma, and perhaps in your state, were justified by using Laffer’s economic theory, though the theory apparently fails in practice.

Distribution of Wealth:  The graph  below compares what people consider the ideal distribution of wealth, with how they think wealth is distributed. Both are very different from the actual distribution of wealth. Taxation and spending policies have greatly contributed to this distribution of wealth.

National Debt:  Taxation and spending policies greatly affect our national debt. The graph  below, from the CBO, shows how the surplus projected in 2001, the top red line, was decreased by the weakening economy, tax cuts, and spending decisions. The stimulus accounted for  6% of the decrease and Obama’s policies for 8%.

Tax Rates: This chart gives some historical perspective on the top marginal tax rates. Those in the top  income bracket     have been enjoying the lowest tax rates since World War II.

Spending:  The conventional wisdom is that our current deficit is because of  increasing government spending. That is not borne out by the data.

The Deficit: Though there have been many claims about our growing deficit,  the deficit has actually been shrinking as a share of the GDP.

Ancient Wisdom: Aristotle thought that nature, and even politics, could best be understood by observations and reason. In the fifth century BC, Aristotle compared the democracy in Athens with other forms of government and warned against a major flaw in democracy. If the poor gain too much power, they will vote too many benefits for themselves and will deplete the treasury.  If the rich gain too much power,  they will use that power to further enrich themselves, leaving too many of the citizen’s poor. Aristotle thought democracy was only a viable form of government if there was a strong middle class.

Economics is not the only issue in most elections, and many people vote for a candidate based on social issues, sometimes without considering that  the candidate may make decisions against their best economic interests. Perhaps it’s time we put divisive  social issues aside for awhile, and work on restoring the economic balance in our society. Our education system, our infrastructure, our health, and our economic well-being all depend heavily on our taxation and spending policies. Although economic imbalance may be becoming a threat to our democracy, that can be changed if we will become informed and

(C) 2013 J.C. Moore

The idea of “death panels” has seemed to fade somewhat from the political debate scene lately but what if I told you there was actually a real case of government control that came very close to what could actually be called a “death panel”?

In one U.S. state, a governor trying to balance the state budget made serious cuts to Medicaid expenditures that included limiting the payments of hospital stays to 20 days, no matter how sick the patients was and regardless  of the need for further care.  Hmm, that sounds like something very close to a government “death panel”. Denying care to the sick in order to balance a budget is not the kind of government intervention I want and I would hope that most people with a conscience would feel that way.  Ok, you might have guessed that I am referring to Governor Mitt Romney. Yes, you can check it out, but he actually did that.

Medicaid Cuts: Along with this care restriction, he also proposed that low-income Medicaid patients be charged a monthly fee for participation and co-payments for doctor’s visits. If you don’t have the money for the co-payment you won’t go to the doctor and therefore Medicaid won’t have to pay for your visit thus saving money! Because Medicaid spending was more than one-fourth of the state spending, it was an easy target. One might wonder if cuts to Medicare and Social Security might not have the same easy target, budget balancing appeal for Romney as president. If you could make cuts to these two programs which makeup a large portion of the Federal budget, you could show a better bottom line. Is that really the way government should get to a better bottom line?

Raising Taxes: If you research just a little, you will see more of the real Romney. He runs on the premise of not raising taxes but then, as he did inMassachusetts, comes up with plans to raise fees and cut loop holes which are actually new taxes disguised as fees.  Romney proposed 33 new fees along with increases in 57 existing fees resulting in higher costs for birth certificates, new car purchases, driver’s learning permits, firearms permits, professional licenses, and billboards advertising, as well as for many state services. He also increased a state gasoline fee originally intended for cleanup of contamination around underground fuel storage tanks. The two cents per gallon increase made for a total effective state gasoline tax of 23.5 cents per gallon, generating about $60 million per year in additional revenue. Even with all the cuts and “non-tax” increases, the government spending showed an increase under Romney.

Jobs: Oh, and then there is his statement about “ I know how to create jobs”. (Though he is fond of pointing out that government doesn’t create jobs.) Well, during his time as governor, Massachusetts job growth was 1.5 percent when the national average was 5.3 percent making them 47^th of the 50 states in new job creation.

Bipartisanship: Romney has also been fond of pointing out how well he worked with the Massachusetts Congress but it is noted that he issued 844 vetoes and the largest share of them were overturned by one or the other of the state houses.  He was quoted as saying, “I know how to veto. I like vetoes. I’ve vetoed hundreds of spending appropriations as governor.” Again, this sounds more like a CEO than a servant of the people.

With what I’ve read about Mitt Romney’s time as governor of Massachusetts, it seems that he governed very much  like a CEO with the bottom line always driving his decisions – and not so much the good of the citizens of his state. The Federal budget might be in a poor state at present, but The United States of America is not a company. We do not need a CEO  nor are the tactics of a business CEO the best way to govern. We need a President.

Source: http://en.wikipedia.org/wiki/Governorship_of_Mitt_Romney

This is a guest post by Barbara Moore.

© 2012 Barbara Moore

    “It’s hard to see how President Obama is to blame for high gas prices when the record high was $4.12 a gallon in  July of 2008, six months before he took office.” 

The Republican strategy during the 2012 election has been to try to pin the economic problems we have been facing on President Obama. Certainly President Obama inherited a mess and it is very difficult to figure out how well the president’s policies are working since we don’t know where we would have been without them.

The price of gasoline is something we are reminded of every time we fill up our car. So we’ve heard a lot about the price of gasoline during this presidential election. During the presidential debates, Mitt Romney said to president Obama ,”At the same time, gasoline prices have doubled under your presidency.”  Bill O’Reilly in his debate with John Stewart said, “Gas prices have doubled since Obama took office.” And someone at Exxon Mobil even cooperated with this theme by placing the gas sign on the right on the Internet. And, it is true.  However, the conclusion drawn from it is not.

 The implication is that Pesident Obama is responsible for our current high gas prices. You can only think that is true if you have a very short memory or are very dishonest. Average US gas prices hit a historic high of $4.12 per gallon in July of 2008,  six months before Obama took office and while  George Bush was still president. The International Energy Agency (IEA) graph below shows the historic prices in the US and other countries, showing that the US President is not responsible for gas prices. That is unless you consider the wars in the Middle East, which destabilized the region, to be a main factor in gas prices. The graph shows the gas prices were relatively stable until about 2002.

 Exxon/Mobil has also been a little duplicitous about this. In the past, they have emphasized on their website that the high gas prices are reasonable when they are considered in terms of inflation. However, now that Mitt Romney has promised oil companies carte blanche to do pretty much as they please if he is elected, they’re only too happy to blame the rising gas prices on President Obama. Mr. Romney apparently does not believe in climate change, and even if he did  he certainly places money ahead of almost everything else, including the environment. Mr. Romney has promised that he would allow completion of the XL pipeline, which will make lots of money for the oil companies. He would also allow them to drill on public land, in National parks, in wildlife refuges, and in environmentally sensitive areas. Those policies might be okay if it were not for the fact that they would increase air pollution, increase greenhouse gas concentrations, and put a large number of environmentally fragile areas at a risk of being damaged.

And, it is very unlikely that allowing oil companies to do as they wish would bring down the price of gasoline. In the first Presidential debate, Mitt Romney blamed President Obama’s policies for limiting oil production. That is also not true, as you can see from the IEA’s table below.

Oil production  dropped during the Bush presidency but has risen by about 20% during Obama’s presidency.  It is clear that domestic oil production has  little effect on the price of gasoline. Last year our largest export was fuels, so it seems if we produce more, we will just export more while gas prices continue to rise in the U.S. It also appears that gasoline prices do not follow the law of supply and demand, both things that Exxon/Mobil and the other oil companies should have to explain. They receive large subsidies; their products do not bear the cost of dumping large amounts of CO2 into the environment; and they have been quite profitable while many other US companies are struggling to stay afloat, in part because of the high fuel prices. Many are international companies that have little allegiance to the United States, but if they’re going to do business in the United States, they should behave as good citizens. We should certainly not let their money and misinformation determine the outcome of our elections.

Aristotle, the father of science, thought that nature could best be understood by observation and reason. Not only did he apply the scientific method to the physical world, but he also considered political systems. One of his conclusions was that a democracy could not function well without a strong middle class. Aristotle was also strongly opposed to sophistry. Both of those are things that our politicians need to keep in mind.

After a number of push polls to try to influence their constituencies’ opinions, Republican leaders have managed to get many of their most extreme positions into the Republican platform. Republicans have tried to create a coalition of one issue voters, and there is a plank in there for each of them. Some the planks are more extreme than even Romney would have liked, and they seem more to reflect Paul Ryan’s views.

Economy: The plan for job creation is “economic growth”– and to stimulate economic growth the platform requires a further reduction in taxes. The plan is to keep the  Bush tax cuts, eliminate taxes on capital gains for the middle class, pass a balanced budget amendment and require a supermajority for any future tax increases . Grover Norquist and most millionaires will be very pleased with that plank. The middle class may not be so happy because little of their income is from interest and capital gains. Then, there’s a problem of how to fund government programs, but other planks are going to eliminate many of those, especially those that help the disadvantaged and the middle class.

Social Issues: The platform is loaded up with social issues.  It calls for a constitutional amendment defining marriage, claims life begins at fertilization, and seeks to make abortions difficult to obtain, no matter the circumstances. It would not fund any health care that covered abortions. And, that would include most forms of birth control under that definition of when life begins. It also declares that only abstinence education be permitted, and that would likely greatly increase the needs for abortions – as that doesn’t work too well in practice. And in spite of the large number of public massacres that have occurred lately, it is opposed to banning high-capacity clips or assault rifles.

Minorities: It declares; “Voter fraud is a political poison”, although there are very few instances of voter fraud. It appears to be an attempt to justify the Republican Party’s attempt to disenfranchise a large number of minority voters. It takes a hard line on immigration, even for those born here who are children of immigrants. It rather forgets that most of us were originally immigrants and that President Reagan granted amnesty to almost 3 million illegal immigrants. It would prohibit federal lawsuits against states that make restrictive immigration laws, even though those laws might interfere with citizens’ rights or violate human rights.

Energy: The energy plank does not recognize the need to protect the environment, which Republicans in the past strongly supported, nor does it recognize the realities of climate change. It would give almost free rein to fossil fuel companies to pursue their interests without regard to environmental issues and it would restrict the EPA from taking action to protect the environment. It does mention an “all of the above” energy policy, but there is no specific mention of policies to encourage the development of alternate energy sources.

Health and Welfare:  The plank on health care would be disastrous for the middle class. It would repeal most of the provisions of the Affordable Care Act, while promising to promote the free market and give you more choices. That is fine if you have plenty of money. There’s a lot of verbiage associated with Medicare, Social Security, and Medicaid but it all boils down to changing them in ways that would cost less money and make them much less effective. It says, “the platform pledges to move both Medicare and Medicaid away from ‘the current unsustainable defined-benefit entitlement model to a fiscally sound defined-contribution model.’” And, it supports a “ Medicare transition to a premium-support model with an income-adjusted contribution toward a health plan of the enrollee’s choice.” Is that a description of vouchers?

Defense: This plank sounds a lot like saber rattling. It would restore “American exceptionalism” and take a hard stance toward North Korea, Iran, and China (China?). That would greatly increase military spending, particularly if we started another war. Our last Republican President started two, and we are still suffering from the loss of lives and the staggering cost. We already spend five times as much as any other country on defense, and there is no plank explaining where the money would come from without raising taxes. Nor is it clear how it might work out to have  as Comander-in-Chief someone who sat out  the Vietnam War in France on a rather easily obtained “divinity student” deferment. 

I think many traditional Republicans will be rather dismayed with the platform and it remains to be seen if they will still support the party and vote for its candidates. Certainly the wealthy and the one issue voters can be counted on, but it would appear to alienate many independents. Sometimes reason prevails and political parties do not follow their platform too precisely, and that is the most that we can hope for if  Mr. Romney is elected president.

(c) 2012 J.C. Moore

Some time ago, the author posted a review of Sen. Inhofe’s book,” The Greatest Hoax” and the Tulsa World published a shorter version of the review. Recently, Sen. Bernie Sanders used quotes from the book review in a Senate debate with Sen. Inhofe. You may find a C-SPAN clip of Bernie Sanders comments below:

Recent research has linked the heat waves, droughts and wildfires we have been experiencing to climate change. It is imperative that Congress take action to mitigate the damage we are doing to the environment. Please contact your representatives about this issue.

(c) 2012 J.C. Moore

Many who are successful attribute it to their ability and hard work. That is often true, but most Americans also owe their success to the opportunities, education, and resources that our country provides us – and also to good fortune. Our country provides safety nets so that no matter how fortunate or unfortunate a person is in their life, they will receive healthcare and not be destitute in old age. Those safety nets are often called “entitlements programs “, and that is true. We all pay to support those programs through taxes and contributions and we are all entitled to the benefits. Those who do not need the safety nets, or who do not wish to pay their share, often want to reform them in ways consistent with their self-interest.

 In the Tulsa World article, “Social Security, health care reform needed”, John Brock lays out a plan to remove government from managing retirement funds, Social Security, workers compensation, and health care. Mr. Brock says “the solution to our government’s problems is to empower people to manage their own affairs.” Though empowering people sounds good, the article is based upon questionable assumptions.

 The first assumption is “that the government is controlling our lives more and more.”  That is a common theme in politics these days, but hardly true. We democratically elect our representatives and leaders, and we have much more control over our government than probably any other country in the world.

The second is “having a government manage these necessities is risky. “ He points out that Greece, Spain, and a number of state and local governments are having financial problems. That’s true, but is not necessarily because of their entitlement programs. Many of the problems stem from the fact that the wealthy have found ways to reduce or avoid paying taxes. He goes on:  “For decades governments have been taking on future obligations without making provisions to cover the costs.” However, in many cases, provisions were made to cover the cost but later tax cuts reduced the expected revenues. Then, there are many who do not think that teachers, policeman, fireman, serviceman, and other government employees are worth the retirement funds provided them.

The next assumption is that Social Security “will default in the near future”. The Social Security trust fund is adequate to pay benefits through 2023, and raising the FICA cap could extend it through 2080. The Social Security Trust Fund is invested in US Treasury bonds, which earn interest and are as solid as theUS government. We are lucky that Social Security was not privatized in 2006, as the recession would have wiped out much of our retirement savings.

The final assumption is that we all have the time and the expertise necessary to deal with the work that Mr. Brock’s plan would require. Those who are wealthy and lucky would certainly profit from managing their own accounts, but those who lack expertise or are not lucky may end up with no medical care provisions or retirement funds.

 The idea of insurance is to spread risk and the larger the population, the less expensive and more reliable insurance is. Spreading the risk over every citizen increases the efficiency and provides a safety net for everyone. We are lucky to live in a country where we enjoy the benefits that self governance and cooperation affords us. We should resist efforts to remove programs which provide our safety nets from government management, particularly if it makes them less reliable or managed by those who desire to profit from them.

(c) 2012 J.C. Moore

                     “Good regulations make good citizens.”

 You would not think that if you read George Will’s article “Obamacare: Regulatory state’s war on business”. He tells how Carl Karcher built his hotdog cart business up to Carl’s Jr. Restaurants, now CKE Industries, a multibillion dollar business. However, Mr. Karcher passed on in 2008 and Mr. Will has written an anecdotal story based upon quotes from CEO Andy Puzder.  He claims that “CKE’s health care advisers, citing Obamacare’s complexities, opacities and uncertainties, said it would add between $7.3 million and $35.1 million to the company’s $12 million health care costs in 2010, unless CKE converted many of its full-time employees to part time.“ He felt it would be necessary to do that to avoid providing them with the health insurance required by Obamacare. The article goes on, blaming Obama’s policies for the poor economic climate, the high cost of fuel prices, and for creating “ multitudes of regulators who regard business as the enemy” and are conducting a “regulatory state’s war on business”.

 Although the healthcare bill is called Obamacare, Mr. Will should remember that what we have is not the universal health care that President Obama wanted. It is the half-a-loaf that remained after the compromises necessary to get the bill through Congress and overcome the Senate’s plan to filibuster it. Had universal care been enacted, CKE and other businesses would not be responsible for providing health care for their workers. Mr. Puzder apparently also missed the point that even now Obamacare requires that insurance companies use 80% of the premiums collected to pay for healthcare. In many cases, this will mean lower premiums and rebates to the insured *. The affordable health care act was passed requiring universal coverage, but Congress weakened the restrictions on what insurance companies can charge. The problems CKE has in covering employees with health insurance is more the fault of Congress than of the administration.

There is also an ethical problem that Mr. Will passed over. Most of CKE Industries’ employees work for near minimum wage and are covered by the company’s “mini-med health care program”. If that program does not meet the requirements of Obamacare, is it adequate to cover their needs if they have a serious health problem? Mr. Karcher is not here to speak for what he would do, but Mr. Puzder apparently sees it as a trade-off between job creation and providing adequate health care for his employees. He is apparently willing to convert many employees to part time in order to cut costs on their health care. In 2007, before the company went private, CKE Restaurants, Inc. earned revenues of approximately $1.5 billion. Is it possible that Mr. Puzder is making a trade-off between his employees’ healthcare and the company’s bottom line? Perhaps Mr. Will should look into that issue.

* Note: Under the Affordable Health Care Act, health insurers must pay 80% of the premiums collected for medical expenses or return the difference. Here is a list, by state of the amount expected be refunded under this provision.

A group of Skeptics once managed to take over an editorship at a peer-reviewed journal  and publish articles hostile to mainstream climate science. With the help of politicians and large funding sources, the hostilities have continued to this day.

Congressman John Sullivan (R-OK) held a town hall meeting in Tulsa, Oklahoma where he discussed the budget, Social Security,  energy issues, EPA regulations, jobs, and the XL pipeline. The article gives Congressman Sullivan’s positions, comments and questions asked by the audience, and compares the authors views to Congressman Sullivan’s.

Congressman John Sullivan conducted two town hall meetings in Tulsa on January 26, 2012. The first was held at Tulsa Community College’s Metro Campus where a number of his constituents challenged Sullivan’s views. That meeting was reported  by the Tulsa World’s Randy Krehbeil in, “Sullivan town hall-goers applaud Obama speech”.  The afternoon meeting, which was held at the Hardesty Library in South Tulsa, had a much more partisan crowd. Congressman Sullivan’s opening remarks were much like those at his Sand Springs meeting last November. At the Hardesty meeting, he did not give people the opportunity to applaud Obama’s speech, he just criticized it. When people tried to point out the errors in his criticisms, they were interrupted by people shouting,” Ask a question”. Sullivan was there to hear what his constituents thought, but apparently his supporters did not want to hear anything good about the President.

 Gridlock: Congressman Sullivan likened Obama to a football coach who gives a great locker room talk but doesn’t win. It was a bad analogy as the coach cannot win without cooperation from the players, and many players in Congress seem more interested in beating the coach than winning for the country. Every winning team needs a reasonable budget, but many Congressmen have insisted on cutting taxes and 206 legislators, Sullivan included, have signed Norquist’s pledge not to raise taxes. He blamed the President and the Democrats in the Senate for the gridlock, saying that the house had sent the Senate 26 bills that were not enacted. However, most of those bills contained a “poison pill”. For instance, H.R. 3630, the badly needed Middle Class Tax Relief and Jobs Creation Act of 2011, also had a provision to delay implementation of the Medicare Sustainable Growth Rate, to hinder the EPA, and to force approval of the Keystone XL pipeline. It is hardly fair to blame the Senate when they are not sent clean bills.

 Energy : Congressman Sullivan said that we needed the XL pipeline to create jobs and claimed that it would create hundreds of thousands of jobs directly and indirectly – and that the only problem was just a few miles through Nebraska wetlands. The problems are actually much greater.  They involve destruction of the boreal forests in Canada, pollution of Canadian rivers, acquiring the water and energy needed to process tar sands, and the carbon emissions the project would cause. Then, it is still not clear how many jobs it will actually create, who will profit from the project, and whether much of the oil will be shipped to foreign countries, possibly without being taxed as some of the refineries are in a tax-free zone.

 The Congressman said he has introduced legislation encouraging the development of natural gas as a fuel. He pointed out that natural gas provides about three times as much energy and costs much less than gasoline. Natural gas is plentiful in Oklahoma and developing the infrastructure to use it as a fuel would help Oklahoma’s economy and reduce our dependence on foreign oil. That is about the only positive contribution that Congressman Sullivan has made on environmental issues. Using natural gas would also significantly decrease our carbon emissions – but the Congressman did not mention that as he does not accept the scientific research on climate change. His supporters claim to be conservatives, but it is hard to imagine how they could support someone who is not also a conservationist. Congressman Sullivan scored a 9% on the League of Conservation Voters scorecard (page 52).

Audience Questions: The wife of a veteran told of the problems her husband had getting help from the Veterans Administration and asked if Sullivan could help. Congressman Sullivan said he would see what he could do. I hope he can help that veteran, but it is not likely that all the veterans needing help will get it if we cut the budget as Congressman Sullivan wanted. The veteran was certainly a good man, and when pressed to speak, he said that it would really help if people would recycle more. He pointed out that we throw away a lot of things that are still useful and that by recycling them we could create a lot of jobs and save our resources.

 Another woman complained that the EPA’s rules about Freon were making it difficult to get the refrigerant needed for their air-conditioning business. Congressman Sullivan took it as an opportunity to criticize the EPA and the Obama administration, apparently unaware that those rules had been signed into law by President Reagan.

A CPA in the audience brought it to the Congressman’s attention that the low interest rates were hurting people who had their nest egg in savings accounts and CDs. He also pointed out that the mandatory IRA withdrawals required at age 70 1/2 are making people withdraw the money that they may need to save for later in life. The Congressman agreed that some changes need to be made there.

 When the Congressman was asked about who he would like to see as the Republican presidential candidate, he said he would support whoever could beat President Obama. A member of the audience tried to point out that there were other things more important than beating Obama, and that the President and his wife were good role models and examples of family values. She was almost drowned out by disagreements from the audience.

 Entitlements: There was a time when Republicans were fiscal and environmental conservatives. Congressman Sullivan said he wanted to cut what he calls “entitlement programs”, but one of his own supporters set him straight by pointing out that those were “earned benefits”, not entitlements. I want my children and grandchildren have the same benefits I did, and I want them to have clean air to breathe and clean water to drink and a beautiful Earth to enjoy. They are entitled to that.

Research Credit: Barbara Moore

(c) 2012 J.C. Moore