On April 15, 2013, a horrific terrorist attack occurred at the Boston Marathon, killing 3 innocent people and injuring at least 180 others. Let us begin by first extending our deepest condolences to the victims of this tragedy, as well as their loved ones. And let us hope that the perpetrator(s), whoever they are, will be brought to swift justice in the very near future.
We still do not know who is responsible for the bombings, why they were done, or even whether the terrorist(s) were foreign or domestic. However, we do know that several partisan hacks on both sides are already trying to exploit this terrible tragedy for political gain. The TSAP fully condemns any such opportunism, and we would have hoped that our nation, and especially its leaders and their media mouthpieces, would be mature enough not to do so. But much to our chagrin, that has turned out not to be the case.
Finally, we must not let fear run our lives, for when we do so, the terrorists win. And that is especially true when such fear induces us to give up our most basic civil liberties in the name of security, as Benjamin Franklin so eloquently noted.
UPDATE: As of April 19, the two suspects have been identified and neutralized. The two brothers were from Russia and had been living in the USA for several years, and it is still not known why they did what they did. One was killed by police in a firefight, while the other is now in police custody.
Thursday, April 18, 2013
Thursday, April 11, 2013
The Sequester, Part Deux
The sequester has now been in place for over a month, and it is already beginning to do damage to our still fragile economy. As we have noted in a previous post, the sequester is a bad idea overall and must be repealed or replaced ASAP. Both its direct effects as well as the fear it has created is hampering what little recovery our economy has experienced, and the worst is yet to come.
President Obama has now unveiled his new budget for 2014, and there is good news and bad news. The good news is that, if approved, the budget would stop the sequester, implement alternative spending cuts, raise taxes on the rich by closing loopholes, increase much-needed infrastructure spending, and still shrink the deficit. The bad news is that, as a concession to Republicans, it would change the inflation indexing formula for Social Security and other programs in a way that would understate inflation, which would hurt the most vulnerable Americans unless other measures are taken specifically to protect them from such benefit cuts. Although Obama says that he will find ways to protect the vulnerable, this change in indexing (the so-called "chained-CPI") would make him the first Democratic president to even consider making any significant cuts to Social Security in the entire program's 78-year history. Unsurprisingly, the budget has angered many Democrats in Congress along with Republicans.
While it is good that Obama is serious about entitlement reform, there are far better ways to do it, which include raising or eliminating the wage cap on FICA taxes, indexing initial benefits to prices rather than wages, limiting benefits for the wealthiest retirees, and very gradually raising the full retirement age from 67 to 70 for future retirees born after 1960. Even better still would be replacing FICA entirely with an alternative funding source, such as the Universal Exchange Tax, along with the other tweaks listed above. As for Medicare and Medicaid, which are in far worse shape than Social Security, the best way (if not the only way) to effectively reform them would be to create a single-payer healthcare system similar to Canada and most of the rest of the civilized world. But as long as we keep electing spineless Democrats and greedy Republicans, it is unlikely that any of these better alternatives will come to pass in the foreseeable future, and we will be left with a false choice between screwing "merely" one or two generations versus screwing several future generations.
Although Obama's budget clearly leaves much to be desired, it is still far better than the sequester, and it may be the only way for our incompetent Congress to be willing and able to stop it before it's too late. The budget's flaws can be (hopefully) solved at some point in the not-too-distant future, while the sequester is already doing real damage right now and must be jettisoned at once.
President Obama has now unveiled his new budget for 2014, and there is good news and bad news. The good news is that, if approved, the budget would stop the sequester, implement alternative spending cuts, raise taxes on the rich by closing loopholes, increase much-needed infrastructure spending, and still shrink the deficit. The bad news is that, as a concession to Republicans, it would change the inflation indexing formula for Social Security and other programs in a way that would understate inflation, which would hurt the most vulnerable Americans unless other measures are taken specifically to protect them from such benefit cuts. Although Obama says that he will find ways to protect the vulnerable, this change in indexing (the so-called "chained-CPI") would make him the first Democratic president to even consider making any significant cuts to Social Security in the entire program's 78-year history. Unsurprisingly, the budget has angered many Democrats in Congress along with Republicans.
While it is good that Obama is serious about entitlement reform, there are far better ways to do it, which include raising or eliminating the wage cap on FICA taxes, indexing initial benefits to prices rather than wages, limiting benefits for the wealthiest retirees, and very gradually raising the full retirement age from 67 to 70 for future retirees born after 1960. Even better still would be replacing FICA entirely with an alternative funding source, such as the Universal Exchange Tax, along with the other tweaks listed above. As for Medicare and Medicaid, which are in far worse shape than Social Security, the best way (if not the only way) to effectively reform them would be to create a single-payer healthcare system similar to Canada and most of the rest of the civilized world. But as long as we keep electing spineless Democrats and greedy Republicans, it is unlikely that any of these better alternatives will come to pass in the foreseeable future, and we will be left with a false choice between screwing "merely" one or two generations versus screwing several future generations.
Although Obama's budget clearly leaves much to be desired, it is still far better than the sequester, and it may be the only way for our incompetent Congress to be willing and able to stop it before it's too late. The budget's flaws can be (hopefully) solved at some point in the not-too-distant future, while the sequester is already doing real damage right now and must be jettisoned at once.
Thursday, April 4, 2013
An Idea Whose Time Has Come
There has been much in the news lately about raising the minimum wage. For those who are unaware, the TSAP believes that the federal minimum wage should be raised to at least $10/hour, and then indexed to inflation (or average wages) from then on. Less talked about, however, is the idea of a maximum wage, and we feel it is an idea whose time has come.
We at the TSAP feel that it would be a good idea to do what this petition calls for: to cap CEO pay at 50 times the salary of the average worker at his or her company. Thus, if the average worker earns $50,000 per year, then the maximum the CEO can earn is $2.5 million per year. Currently, the average Fortune 500 CEO makes about 380 times what their average employees make, and that is clearly outrageous. And it was not always this way. In 1980, when the top 1% owned "only" about 20% of the nation's wealth (instead of about 40% today), the average CEO made "only" 42 times as much as the average worker. Back then, of course, America had much higher top marginal tax rates (which were generally north of 70% from 1933-1981) and more sensible regulation of business practices, so a maximum wage was unnecessary. However, times have changed, and such a policy couldn't come at a better time.
The naysayers may claim that doing so decreases incentives to work harder and that CEOs somehow deserve their outrageously high compensation packages due to their supposedly higher intelligence and work ethic. To that, we note that while many CEOs are indeed smarter and/or harder-working (not to mention luckier) than the average American, it is highly doubtful that a CEO is 380 times smarter or works 380 times as hard as the average worker. Making 50 times what the average worker earns is still extremely generous to CEOs, especially compared with the pay ratio in more equal societies such as Japan. And as for supposedly decreasing incentives to work harder, remember that, as Robert Reich notes, the economy exists to make our lives better, we do not exist to make the economy better.
So consider it part of our party platform from now on, in combination with our call to raise the minimum wage and also raise the marginal tax rate to at least 50% on incomes above $1 million.
We at the TSAP feel that it would be a good idea to do what this petition calls for: to cap CEO pay at 50 times the salary of the average worker at his or her company. Thus, if the average worker earns $50,000 per year, then the maximum the CEO can earn is $2.5 million per year. Currently, the average Fortune 500 CEO makes about 380 times what their average employees make, and that is clearly outrageous. And it was not always this way. In 1980, when the top 1% owned "only" about 20% of the nation's wealth (instead of about 40% today), the average CEO made "only" 42 times as much as the average worker. Back then, of course, America had much higher top marginal tax rates (which were generally north of 70% from 1933-1981) and more sensible regulation of business practices, so a maximum wage was unnecessary. However, times have changed, and such a policy couldn't come at a better time.
The naysayers may claim that doing so decreases incentives to work harder and that CEOs somehow deserve their outrageously high compensation packages due to their supposedly higher intelligence and work ethic. To that, we note that while many CEOs are indeed smarter and/or harder-working (not to mention luckier) than the average American, it is highly doubtful that a CEO is 380 times smarter or works 380 times as hard as the average worker. Making 50 times what the average worker earns is still extremely generous to CEOs, especially compared with the pay ratio in more equal societies such as Japan. And as for supposedly decreasing incentives to work harder, remember that, as Robert Reich notes, the economy exists to make our lives better, we do not exist to make the economy better.
So consider it part of our party platform from now on, in combination with our call to raise the minimum wage and also raise the marginal tax rate to at least 50% on incomes above $1 million.
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