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A Moral Perspective on the Budget by Gerry O'Shea

by Call To Action on 09/18/17

The budget that any government proposes reveals clearly the priorities that it has decided to pursue in the coming year or sometimes over a longer period.  Budget discussions are due to start in Washington soon after the fall session begins next month.

Unlike the recent Healthcare fiasco where the President rounded on the Republican congressional leaders for their failure to pass a bill while he himself had no alternative proposal, he has spoken clearly about a detailed  White House plan that represents his values in the upcoming budget negotiations.

First he wants a massive $800 billion cut in mandatory spending over the next ten years. Nearly all of these cuts come in programs that help the poor, including  Medicaid, the Supplemental Nutrition Program (SNAP - which used to be known as the food stamp program) and Supplemental Security Income(SSI) which is designed to help the elderly and the disabled.

Consider who these cuts will impact most. Medicaid mostly helps the poor, but dollars from this program are used by States for a variety of programs. For instance, 70% of the people in nursing homes have all or part of the expensive cost of their care paid for from Medicaid funds. SNAP mostly benefits families with one wage-earner; the proposed cutbacks in this program end food stamp entitlement with the seventh offspring. It is hard to believe that such an egregious regulation, discriminating against big families, is being proposed by the party that constantly trumpets its pro-life commitment.

Another important dimension of this Trump proposal is his plan to increase the military budget by $43 billion. At the same time the President wants to make severe cuts to assistance for overseas development  programs for poor countries. He also plans to reduce the diplomatic service, which operates out of the State Department, by more than 20%. All of this while the United Nations is warning about impending famines in countries in the Horn of Africa.

The President is also clear about the changes he wants in the tax code. His promise that all taxpayers will see a reduction in their annual tax liability is deceptive because it suggests equal treatment of everyone reporting to the IRS. In fact, millionaires and multi-millionaires will pay far less while the benefits to the average taxpayer will be miniscule.

The conservative rationale for this approach centers on the belief that when the rich get richer there are trickle-down benefits for the poor. This piece of convenient rationalization by the 1% who own over 90% of the wealth in America, was dealt with very trenchantly by Pope Francis when he said: "The promise was when the glass was full, it would overflow, benefiting the poor, but what really happens is when the glass is full, it magically gets bigger. Nothing ever comes out for the poor."

Mentioning the Pope highlights the fact that a budget is a highly moral document. There is a clear and unambiguous biblical mandate found repeatedly in both Testaments to protect poor and marginalized people. Cutting meager food stamp payments while giving more benefits to those who already have plenty is, at face biblical value, a moral monstrosity.

I read recently of a group of Christians from all denominations who are engaged in weekly prayer and fasting to protest the upcoming budget. In a public statement these admirable Christians wrote: "The biblical prophets remind us that how we treat the most marginal and vulnerable among us is the test of a nation's moral righteousness. We have deep moral concerns about the way that this budget will impact those we are called to protect."

Conservative groups in Congress and in the White House meet regularly for prayer breakfasts where they listen to preachers remind them of their ethical obligations. What story do they tell each other about the plight of poor people? Do they have some profound rationale, some deep moral perspective, that could justify slashing  food stamp allowances  by 25% or programs for the disabled by 20%?

 

 

 

Inequality in America by Gerry O'Shea

by Call To Action on 09/14/17

In a recent interview, former president Jimmy Carter said that the greatest challenge facing the United States is income inequality. He explained that the standard of living of many workers has deteriorated since the 1980's. Blue collar families have fallen away behind at a time of substantial economic growth in the country.

Real wages have dropped for workers without a four-year college degree. Today more than half of American jobs pay under $37,000 a year and a quarter pay less than $23,000. The top 1% own 90% of the wealth. America is gradually becoming a plutocracy where millionaires and billionaires thrive while workers struggle to pay their bills every month, recalling Oliver Goldsmith's admonition 250 years ago: "Ill fares the land to hastening ills a prey, where wealth accumulates and men decay."

In a recent survey of people in forty developed countries, one of the questions asked how much more the top executive in a company should earn in comparison with the ordinary workers in that company. Those who described themselves as liberal said that the CEO should be paid four times more while conservatives suggested five times as more appropriate. So, if the regular worker collected $80,000 the person at the top, according to these conservatives would have to get by on $400,000. Not bad!

The truth is that just sixty years ago the comparative multiple in the United States was around twenty - today it registers just over 270. Yes, if we say that the average guy working for a big company today earns $50,000 annually, then you can write the CEO down for 135 million every year.

How do we explain such a dramatic change in a short period of time? I suggest there are two main reasons for this huge disparity.

First, the guys at the top make the decisions about how the pie is divided. Consider this: from 1948 to 1973 productivity, the growth in the size of the pie, was 96.7% with compensation for workers growing by 91.3%. However, the figures from 1973 until 2016 show a very different trend with productivity up 74.4% while hourly compensation jumped a mere 9.2%.

Without some checks and balances, top management easily rationalizes their own importance and value to the company - a basic psychological insight tells us that most human beings have no problem justifying high salaries and benefits for themselves.

The second reason for the growth of the disproportionate difference between the salary structure of top management and ordinary workers relates to the decline in the power of trade unions, who in the past provided some heft for workers' demands. In 1973 26% of American workers outside of the public service belonged to unions; by 2015 those numbers were down to a mere 11%.

It is important to realize that the power of trade unions for enhancing wages and benefits is not limited to their own members. Increased salaries for union members has a ripple effect with employers throughout the economy feeling that they must consider what organized workers are paid. Today with the number of employees carrying a union card only in single digits, there is very little impact of union wage settlements in the wider economy.

Even with all these changes union workers in the United States last year earned an average weekly salary of $1004 with comparable non-union employees averaging $802. Healthcare and retirement benefits also tend to be better for organized workers.

The challenge for progressive leaders who believe that workers' wages must increase substantially must be to persuade employees in every industry that collective bargaining is their only way forward. The vicious anti-union propaganda coming from those who are benefiting greatly from the present arrangements makes this a tall order.

In last November's presidential election, Mr. Trump played on the grievances of these mostly-blue-collar workers telling them that the system was rigged against them. He promised to change all of that by re-negotiating trade deals especially with Chinese and Mexicans, by getting rid of those pesky Washington regulations on businesses and reducing the number of immigrants who allegedly take American workers' jobs.

The Democratic candidate, Hillary Clinton, stressed the importance of economic models that help middle class workers and, in an important new and potentially radical proposal, she promised to promote tax policies which favor companies that share their profits with employees.

It is hard to see how President Trump's approach of huge tax breaks for the rich and effectively removing the health insurance policies of millions of low-paid workers would do other than copper fasten the "rigged" system.

There is an important moral dimension to the gross inequality that now pervades the American economic system. Pope Francis warned in his encyclical Laudato Si that "inequality is the root of all social ills." In a speech in the Vatican he targeted the serious disparity between the earnings of the rich elite and most workers as "an invisible tyranny which unilaterally imposes its own laws and rules."

Unfortunately, our pulpits ignore these important social and economic messages from the Pontiff about the immorality of this extreme level of economic unfairness.

Talking about a moral perspective on this crucial matter of the grossly unequal distribution of the wealth of our society, I revert to Jimmy Carter's warning about the paramount need for our leaders to address these issues. A few weeks ago, the former president, age 93, was removed to hospital because of hypothermia while helping to build a home for a needy family with Habitat for Humanity volunteers. Surely, grounded moral leadership of the highest order.

American Pragmatism & the Health Care Crisis by Gerry O'Shea

by Call To Action on 07/24/17

The American way of solving problems is often spoken of as pragmatic. In this approach the truth of any idea is determined by its practical outcomes. Every proposal is viewed not through the prism of some theoretical principle or dogma but is judged solely on its actual impact on people's lives.

Consider the American health care system and, for now, leave aside any consideration of ideology and assess the way we deal with this vital issue strictly from a pragmatic viewpoint where only results matter.

The annual per capita spending for health care in the United States comes to $9451, but about 40 million people have no coverage of any kind. After all that spending, you might expect that American life expectancy of 79 years would be at the top of the international ratings. Not so. In our nearest neighbor, Canada, where everybody is covered at a cost of $4608 per person, longevity is 82 years.

A few more examples highlighting cost and extent of coverage in other Western democratic countries are instructive. In Germany where people on average live to the age of 81 and health insurance is mandated for everybody, the per capita cost is $5267. In Japan the cost per person for health insurance is $4150 and, on average people live five years longer than in the US - again universal health insurance is required by law there.

Staying with pragmatic considerations, how do the millions of uninsured people manage in the United States? They get no preventive care, no check-ups which often identify medical problems early and allow for lifestyle changes or palliative medications. So when they get sick they are rushed to the nearest emergency room where the cost of treatment is at a premium.

Economic and practical considerations alone strongly indicate that having  tens of millions of uninsured people who can't afford preventive care is a very inefficient and wasteful way to organize a health coverage system.

Where is the famous American pragmatism which works in many other areas of the economy? We are paying far more than other Western countries but living shorter lives, and tens of millions of our citizens have no medical coverage. Leaving aside for now  humanitarian considerations, just from a business point of view, this is a dreadful deal.

President Trump and most of his cabinet are billionaire business people. We were told repeatedly during the Presidential campaign about all the problems that the Obama and Bush leadership teams failed to solve because of incompetence. Stand back and just watch how the super-rich apply business acumen to running the country.

Obamacare was and still is their first big  bete noir and candidate Trump  promised daily to scrap it. However, in doing so he promised that  there would be no cutbacks in Medicare or Medicaid  and somehow deductibles and co-payments would also be trimmed. Trumpcare would increase the number of people covered while ending the Obama mandate that required all citizens to buy health insurance.

Well the Healthcare Bill that passed the House of Representatives with the enthusiastic support of the White House, according to the independent Congressional Budget Office, would end coverage for over 22 million people by massively reducing federal Medicaid payments to the States. The President was elated that the Bill passed, and he invited all the House Republicans for an unprecedented celebratory drink in the White House.

A few weeks later as he tried to persuade moderate Senators to vote for Senate leader McConnell's proposals, he called the House effort "mean." Then he tweeted that Obamacare should just be repealed and the messy business of replacing it could be dealt with at a later date. That would result in 32 million being removed from coverage. Honestly, you can't make this stuff up!

Pulling back from all this talk about fixing or replacing Obamacare, one has to ask why the United States, the most powerful and richest country in the world, doesn't have a health care policy that covers all residents. The other Western democracies cover all their citizens, irrespective of age or income.  Why is America different?

Excluding millions who can't afford to pay insurance premiums does not meet acceptable humanitarian standards. The present inhumane policy of the survival of the fittest demeans our democracy.

Obamacare, while well short of providing  universal care, brought coverage to millions previously uninsured. All the emerging Trumpcare proposals instead of expanding the numbers covered have the very opposite effect.

More than 80% of evangelical Christians and close to 60% of non-Hispanic  white Catholics supported Trump last November. Yet I see no evidence of a Christian influence in White House policies, especially in this vital area of life and death for so many where the poor are really vulnerable.

Adding insult to injury, the money saved in Medicaid, which mostly helps the poor, by any version of the Republican proposals goes mostly in massive tax savings for the rich. This is not hidden or camouflaged in any way - Robin Hood in reverse in broad daylight. The amount involved hovers around 700 billion.

Maybe we should set aside moral considerations about  Trumpcare  and not consider the repeated biblical injunctions about how the poor should be treated. It may well be more productive  to concentrate on the pragmatic arguments for radical change because the present system costs far too much and fails to cover millions of citizens.


Trickle-Down Economics by Gerry O'Shea

by Call To Action on 06/07/17

I invite readers to join me in a modest experiment in theoretical economics.

The manager in a town with a population of 5000 finds that she has a surplus of a million dollars coming to the end of the financial year. She decides to distribute it in whatever way is deemed most likely to generate economic activity that will benefit the whole town.

One senior advisor strongly recommends that she divide the money among the 50 richest and most financially successful local people. This expert was very clear that these rich people, all with life stories indicating a high level of success in fiscal matters, would make the best use of the $20,000 check that each would receive, and this would redound to the advantage of the whole community.

Another advisor had a very different perspective. He counseled that the money should be distributed among the 500 poorest people in the town. He argued that the $2000 that each person in this arrangement would receive would generate far more economic activity locally than the other option. This expert pointed out that by giving the surplus one million to the people struggling at the bottom of the economic ladder she could be certain that most of the money would be spent quickly with nearly all the advantages accruing to local businesses.

You are the judge of the two approaches, the first is aptly called trickle-down and the second can be dubbed trickle-up, but please don't write this off as just an intellectual game. It is really serious and the choices involved are being made every day by Republicans in Washington in favor of option one: give more money to the rich, give them big tax breaks - 650 billion over ten years in the most recent proposal - and somehow everyone will be better off.

GLOBAL WARMING by Gerry O'Shea

by Call To Action on 06/01/17

The title of this article will put many people off - climate change is viewed as involving very complex issues and few people want to hear about disappearing coral reefs or the impact of thawing permafrost on the heating of the planet. It is much easier to espouse an opinion on how to deal with the dictators in Syria or North Korea or to take a stand on that famous wall on the Mexican border.

Most people are engaged with day-to-day issues that impact their lives - taxes, prices in the supermarket and the effectiveness of our educational system. However, in this context we need to consider the longer-term effects of our behavior and the policies that our government pursues. American Indian wisdom urges us to take responsibility for how our actions or inaction affect people's lives "seven generations" from now.

Americans are divided on the reality and seriousness of global warming. More than 95% of climate scientists are clear that we are facing urgent problems caused mostly by carbon emissions in the atmosphere, mainly generated by coal and oil. The rising ocean levels and retreating glaciers are clear warning signs of impending disasters. If our temperatures rise another three degrees Celsius, environmental experts warn that the consequences for our planet will be cataclysmic.

Those who disagree with the overwhelming scientific consensus argue either that the whole climate change crisis culture is a creation of the liberal scientific establishment, or that, while climate change is real, it is no different from unavoidable natural phenomena that have been experienced in previous geological ages.

 These deniers and doubters are now in power in this country and, true to form, they are slashing the funding for agencies and programs that are in place to protect the environment. For instance, Mr. Trump has promised to promote coal-fired power plants that are clearly unhealthy for the air people breathe, while oil pipelines leaking dangerous vapors also have his approval and blessing.

It speaks volumes for the President's attitude to the Environmental Protection Agency(EPA) and to the whole question of climate change that he appointed Scott Pruitt to head the agency. Mr. Pruitt, a former attorney general in Oklahoma, repeatedly challenged the authority of the EPA, the agency he now leads, to regulate mercury levels or smog and carbon emissions. Surely a case of placing the fox in charge of the henhouse.

The new stress on America-first style narrow nationalism which is also to the fore in parts of Europe is not helpful for those arguing for clean energy because this is an international problem. Polluted air and water obviously do not recognize border divisions. The Paris Climate Agreement, negotiated under the aegis of the United Nations in 2015, achieved real progress with 195 governments committing to take action to lower greenhouse gas emissions in their countries.

More people are becoming aware of the dangerous reality of rising sea levels and coastal erosion, and the Paris Agreement was a serious international effort to slow the growth of carbon dioxide in the atmosphere. Mr. Trump and his advisors have talked about pulling out or re-negotiating this important international agreement. Certainly, his negative approach and attitude in this area compare poorly with his predecessor, President Obama's firm commitment to combating policies that damage the ecosystem.

The President uses job creation as his main argument for supporting the development of the coal and oil industries. In fact, the biggest area of sectoral employment growth in the last decade has been in the renewable energy industry. The costs of solar and wind power have dropped significantly in recent years and close to three million new jobs have been created by companies promoting these new clean technologies.

There is also a strong moral dimension to this issue. All the world religions agree that we have a profound solemn obligation to respect all creation and preserve the land, sea and air with their myriad forms of life for future generations.

 Pope Francis in his compelling encyclical, Laudato Si, published two years ago, wrote of global warming causing "severe droughts, floods, fires and extreme weather events - contributing to the heart-rending refugee crisis." He has added an eighth Work of Mercy to the traditional seven, calling it "Care for Our Common Home," and he urged all Catholics to go to confession to seek absolution for their sins against God's creation.

Global warming should not be a political party consideration in the United States. It is not a Democratic or Republican issue; liberals or conservatives cannot claim it as their own. Traditional conservatives and liberals always called for serious consideration for the long-term consequences of government actions, and indeed, a recent poll showed that a slight majority of voters describing themselves as liberal or moderate Republicans support implementation of the Paris Agreement on the environment. President Trump should listen to these voters.

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