I guess the new trend spawned by the Great Recession is to adopt "thrift" as our operating theory although I am not altogether sure "thrift" is good for job creation, at least in the short run.
Many people could probably benefit from thinking about thrift and true wealth in terms of being less ostentatious and less insecure. If you came from or ever hung around "old money", you're likely to find the family wearing clothes that they have owned for 20+ years, driving orange diesel-fueled Mercedes Benz wagons from the early 1980s, letting parts of their houses go to Hell, slipcovering old furniture, talking about ideas, books and music instead of other people and never, ever, talking about what material things they have or don't have. Save money, buy quality stuff and never get rid of it until it's completely destroyed. The Lily Pultizer shift dress, purchased in 1962, still looks good. If it still fits, why get a new one?
You probably won't find a flat screen television in their houses. (By the way, it's "houses", not "homes", i.e., "I live in a neighborhood where all the houses have marvelous shade trees" or, "what a wonderful house..." Trust me on this.)
You will often see their philanthropy listed at the back of a publication under the name "Anonymous". They are quieter, better listeners and if they talk about politics or religion, they'll be gentle about yours and won't talk much about theirs. Often, they are lousy cooks but superb bartenders so by the time you're eating, you don't care what they made or who made it. (Please wait until the hostess picks up her fork before you pick up yours and compliment whatever was burned in your honor.) You'll leave knowing very little about them because they value their privacy more than whatever cash they have lying around (which probably isn't as much as you think). They probably spend far less than you do on an annual basis except for property taxes. If they trust you, you're a friend forever - but probably not too close. If they don't trust you, they will be even more polite than if they did trust you. They appreciate a hand-written thank you note, lending them a book you enjoyed or inviting them to a picnic instead of a restaurant. Obviously, not everyone can or would want to live that way, but if I had limited choices, I'd probably choose that lifestyle over many others. The best part is that you can adopt any political stripe you like, be eccentric and wonderfully witty and will never be nervous hosting a dinner party and can even run for office if you're genuinely humble and let others deal with fundraising.
Sunday, June 20, 2010
Happy Father's Day
One of the most depressing things about getting older is the reality of losing our parents. I had two fathers - my natural father who died over 10 years ago and my step-dad who died a little over 2 years ago. Both deaths were robberies. They were young by modern standards. In the land of entitlement I have created, I thought it was my right to have both of them around until I turned at least 60. Fat chance.
So much political debate, particularly around issues of poverty, sexual orientation and women's reproductive freedom rights, centers on fathers. We're told that fathers are necessary to keeping children out of poverty, that fathers are necessary to raising well-adjusted children unless, of course, they happen to be gay and there are two fathers instead of one in which case, the right wingers tell us that mothers are indispensible. We can honor fatherhood and its importance without making kids without fathers feel like they are destined to rob liquor stores and live in squalor.
For many kids, 2 well-adjusted parents, living in the same house, of opposite genders, sounds like Disneyworld or sounds so foreign to them that they might wonder if they know anyone who has a life like that. Having been through much of the good stuff and some of the bad stuff that comes along with "traditional" family life, I can say from those experiences that what matters most - and is often repeated - is showing up and doing the best you can. Human beings can only lose what they have made for themselves, something they have been given or something they gave away. Defining what we have lost has to be about what was actually taken (or sometimes given) away.
Being a father is not always about biology. It's often about unconditionally loving a child and treating the child as if you shared their DNA.
To me, that means there are far more fathers out there than we could count on birth certificates. All of them deserve to be honored, even when their own imperfections or fears left them incapable of doing all of things we might have wanted them to do. If they remain on Earth, forgive their shortcomings. If they are no longer with us, honor what was good about them and make it a part of yourself. If you can do those things, I am convinced that you will feel less loss and more gratitude for what you did get.
So much political debate, particularly around issues of poverty, sexual orientation and women's reproductive freedom rights, centers on fathers. We're told that fathers are necessary to keeping children out of poverty, that fathers are necessary to raising well-adjusted children unless, of course, they happen to be gay and there are two fathers instead of one in which case, the right wingers tell us that mothers are indispensible. We can honor fatherhood and its importance without making kids without fathers feel like they are destined to rob liquor stores and live in squalor.
For many kids, 2 well-adjusted parents, living in the same house, of opposite genders, sounds like Disneyworld or sounds so foreign to them that they might wonder if they know anyone who has a life like that. Having been through much of the good stuff and some of the bad stuff that comes along with "traditional" family life, I can say from those experiences that what matters most - and is often repeated - is showing up and doing the best you can. Human beings can only lose what they have made for themselves, something they have been given or something they gave away. Defining what we have lost has to be about what was actually taken (or sometimes given) away.
Being a father is not always about biology. It's often about unconditionally loving a child and treating the child as if you shared their DNA.
To me, that means there are far more fathers out there than we could count on birth certificates. All of them deserve to be honored, even when their own imperfections or fears left them incapable of doing all of things we might have wanted them to do. If they remain on Earth, forgive their shortcomings. If they are no longer with us, honor what was good about them and make it a part of yourself. If you can do those things, I am convinced that you will feel less loss and more gratitude for what you did get.
Thursday, June 17, 2010
Borrowing Away Our Freedom
I have never considered the federal and state tax systems to be unjust because they are marginally progressive, even as my own income grew and I got kicked into higher marginal tax rates. People who make more money ought to pay higher marginal rates because, in my view, they benefit the most from our country's brand of free market capitalism. The questions are whether we should single out one or two industries and tax compensation in those industries at higher rates than we do others and, if we do, how much more should people working in these industries pay?
By the late 1970s, the top marginal federal income tax rates were in the neighborhood of 80%. Both political parties were involved. Part of it grew out of having to pay for the Vietnam War and other misadventures. Part of it involved notions of fairness that have changed dramatically in the last 30 years. Leaving aside flat-tax advocates and those who would simply tax consumption (the most regressive), the income tax is more than likely here to stay. When marginal rates were slashed during the Reagan administration and then slowly and modestly grew back in the 1990s, compensation managers were working hard to maintain competitive advantage in attracting talent in any number of industries. If the top marginal rate went up, increased compensation and perks followed. Lawyers and accountants got more creative.
When states like New York faced deficits, they borrowed rather than increase income tax rates. When the federal government passed unfunded mandates on state governments, they often borrowed more. Borrowing just to keep the government running is usually considered poor management but many states did it because their legislators were afraid of being associated with increasing taxes for any reason. When increased revenues were needed, "sin" taxes, lotteries, increased fees on toll roads and other strategies were used to help balance budgets. Wealthy people might have complained but most of the fee increases hit poorer people the hardest. Legislators were more interested in getting re-elected than in making wise policy decisions.
As a general rule, Americans are not stupid. They knew what was happening but lacked the political will or organization to make changes. In lieu of a real solution, many people began to attack those who made what they considered too much money. In some cases they might have been right. CEOs and other senior executives of publicly traded companies making $10-20 million per year irrespective of the profitability of the company were easy targets. Confiscatory taxes were not and will not be a solution. Financial industry executives started private hedge funds with their compensation being considered capital gains, taxed at 20%. Energy company executives could move to hedge funds, energy trading or any number of other industries.
Good governments pay their bills and balance their budgets and have the political will to eliminate tax loopholes and reserve borrowing for infrastructure improvements and other long-lasting projects like expanding public transportation. It's not that much different than a household that borrows for vacations they can't afford to take or a flat-screen television to replace a perfectly serviceable tube television but will not borrow or bother to replace a leaking faucet or purchase more energy efficient appliances. Priorities get shifted around and sometimes turned on their heads. When credit was easy to get, we forgot that our parents and grandparents actually saved money and used it to purchase luxury items and were unwilling to borrow for necessities. They bought houses they could afford with a large downpayment and drove at least one of their cars for 10 years instead of trading them in every three years. Most were not poor. They were frugal, responsible and lived within their means. If we held our legislatures to the same kind of principles we would not constantly face the prospect of huge deficits or, if we did, we would have a rainy day fund that governors love to talk about but rarely, if ever, establish.
The biggest tragedy of the second Bush Administration was its squandering of a budget surplus that could have been used for any number of good reasons. You can't fight an expensive war - whether the war is necessary or not - and cut taxes at the same time. If we didn't believe it then, we ought to believe it now. You can't borrow most of what you need from foreign countries and expect to keep control over your own economy. You can't tell states that since the federal government can't afford to fund a program, the states will have to pay even if they, too, face deficits. That's what our government has done. It did not have to happen. We let it happen.
It might help if we turned our national focus away from divisive social issues (gay marriage and reproductive freedom chief among them) and zero in on how to become energy independent and stop relying on the Chinese and others to keep us afloat by lending us billions - perhaps trillions - and all of the control that is associated with being a lender.
If you doubt me and your grandparents are still alive, ask them. I am pretty confident they would agree with me.
By the late 1970s, the top marginal federal income tax rates were in the neighborhood of 80%. Both political parties were involved. Part of it grew out of having to pay for the Vietnam War and other misadventures. Part of it involved notions of fairness that have changed dramatically in the last 30 years. Leaving aside flat-tax advocates and those who would simply tax consumption (the most regressive), the income tax is more than likely here to stay. When marginal rates were slashed during the Reagan administration and then slowly and modestly grew back in the 1990s, compensation managers were working hard to maintain competitive advantage in attracting talent in any number of industries. If the top marginal rate went up, increased compensation and perks followed. Lawyers and accountants got more creative.
When states like New York faced deficits, they borrowed rather than increase income tax rates. When the federal government passed unfunded mandates on state governments, they often borrowed more. Borrowing just to keep the government running is usually considered poor management but many states did it because their legislators were afraid of being associated with increasing taxes for any reason. When increased revenues were needed, "sin" taxes, lotteries, increased fees on toll roads and other strategies were used to help balance budgets. Wealthy people might have complained but most of the fee increases hit poorer people the hardest. Legislators were more interested in getting re-elected than in making wise policy decisions.
As a general rule, Americans are not stupid. They knew what was happening but lacked the political will or organization to make changes. In lieu of a real solution, many people began to attack those who made what they considered too much money. In some cases they might have been right. CEOs and other senior executives of publicly traded companies making $10-20 million per year irrespective of the profitability of the company were easy targets. Confiscatory taxes were not and will not be a solution. Financial industry executives started private hedge funds with their compensation being considered capital gains, taxed at 20%. Energy company executives could move to hedge funds, energy trading or any number of other industries.
Good governments pay their bills and balance their budgets and have the political will to eliminate tax loopholes and reserve borrowing for infrastructure improvements and other long-lasting projects like expanding public transportation. It's not that much different than a household that borrows for vacations they can't afford to take or a flat-screen television to replace a perfectly serviceable tube television but will not borrow or bother to replace a leaking faucet or purchase more energy efficient appliances. Priorities get shifted around and sometimes turned on their heads. When credit was easy to get, we forgot that our parents and grandparents actually saved money and used it to purchase luxury items and were unwilling to borrow for necessities. They bought houses they could afford with a large downpayment and drove at least one of their cars for 10 years instead of trading them in every three years. Most were not poor. They were frugal, responsible and lived within their means. If we held our legislatures to the same kind of principles we would not constantly face the prospect of huge deficits or, if we did, we would have a rainy day fund that governors love to talk about but rarely, if ever, establish.
The biggest tragedy of the second Bush Administration was its squandering of a budget surplus that could have been used for any number of good reasons. You can't fight an expensive war - whether the war is necessary or not - and cut taxes at the same time. If we didn't believe it then, we ought to believe it now. You can't borrow most of what you need from foreign countries and expect to keep control over your own economy. You can't tell states that since the federal government can't afford to fund a program, the states will have to pay even if they, too, face deficits. That's what our government has done. It did not have to happen. We let it happen.
It might help if we turned our national focus away from divisive social issues (gay marriage and reproductive freedom chief among them) and zero in on how to become energy independent and stop relying on the Chinese and others to keep us afloat by lending us billions - perhaps trillions - and all of the control that is associated with being a lender.
If you doubt me and your grandparents are still alive, ask them. I am pretty confident they would agree with me.
Thursday, June 10, 2010
Energy Independence
I have read and listened to politicians', oil industry executives', scientists' and citizens' reactions to the crude oil spill in the Gulf of Mexico. I do not believe British Petroleum intended to lose an extraordinary amount of money - perhaps risking bankruptcy - or harm its reputation, but I do believe that BP was grossly negligent in failing to have multiple back-up plans in the event of a technological failure. The government deserves some of the blame by its obvious failure to demand and evaluate them prior to permitting off-shore drilling. In our desperate attempt to maintain at least some energy independence from Persian Gulf states and other international sources, we ignored or minimized risks associated with off-shore drilling.
In the short term, capping the well has to be the first priority. When it happens, I hope we ignore those who give themselves pats on the back for fixing something that never should have happened in the first place. Also in the short term, we will have to continue finding energy sources, including crude, to ensure that we are not hostages to oil exporting nations who either hate us or intend to take advantage of us.
Conservation, improving solar power technology, using wind power when possible, moving products via rail to the fullest extent possible and leaving large, gas guzzling vehicles to those who need them for their livelihoods might make a huge difference if we were serious about it. I don't know the answer but I wonder if we could all accept that a 1986 Honda Accord was once considered a perfectly good car for most families even though it is far smaller than the current Accord (The Accord is just an example; there are plenty of other vehicles that have become increasingly larger in the last quarter century after our brief dalliance with driving even smaller cars in the 1970s.) With safety advances and more efficient power plants, I wonder how much gasoline we would have saved over the years if we didn't demand ever larger vehicles as if it were a national birth right. For years, we have had special High Occupancy Vehicle (HOV) lanes to encourage car pooling. At the same time, we marvel at 4 cylinder engines that push out over 200 horse power. Very, very few of us need 200 horse power. For five years I drove a 1988 Subaru Justy (considered quite a safe vehicle given its small size) that had a 3 cylinder 66 bhp engine. I drove back and forth from D.C. to Upstate N.Y. at speeds exceeding 65 miles per hour. It got about 40-45 mpg on the highway and in the low 30s in the city traffic. Would we lose our national identity if we decided it was more responsible to drive those kinds of vehicles?
I'll leave nuclear power alone as a solution because I don't believe I am sufficiently informed about its safety, particularly storing spent nuclear fuel.
What about railroads? A number of large cities have excellent, energy efficient public transportation options. Is riding a subway, commuter train or bus such a burden? Could we invest (admittedly at great expense) in high speed rail that reached most people in the country? Could most of us walk 20-30 blocks to visit a store or a friend instead of automatically driving? I think we could do all of these things. Again, I do not know the initial cost or the ultimate savings in energy use but I am persuaded that we could learn a great deal from countries that already do these things. Most are European. Does that matter?
I know one thing for sure. If we were completely energy independent, the likelihood that we would involve ourselves in wars in the middle East - with the exception of counter-terrorism and the protection of Israel - would be much lower, perhaps lower enough to take some of our defense budget and build a smarter transportation system right here.
None of what I am saying is new. It's all about developing a national willingness to try. $5/gallon gasoline might change a few minds.
In the short term, capping the well has to be the first priority. When it happens, I hope we ignore those who give themselves pats on the back for fixing something that never should have happened in the first place. Also in the short term, we will have to continue finding energy sources, including crude, to ensure that we are not hostages to oil exporting nations who either hate us or intend to take advantage of us.
Conservation, improving solar power technology, using wind power when possible, moving products via rail to the fullest extent possible and leaving large, gas guzzling vehicles to those who need them for their livelihoods might make a huge difference if we were serious about it. I don't know the answer but I wonder if we could all accept that a 1986 Honda Accord was once considered a perfectly good car for most families even though it is far smaller than the current Accord (The Accord is just an example; there are plenty of other vehicles that have become increasingly larger in the last quarter century after our brief dalliance with driving even smaller cars in the 1970s.) With safety advances and more efficient power plants, I wonder how much gasoline we would have saved over the years if we didn't demand ever larger vehicles as if it were a national birth right. For years, we have had special High Occupancy Vehicle (HOV) lanes to encourage car pooling. At the same time, we marvel at 4 cylinder engines that push out over 200 horse power. Very, very few of us need 200 horse power. For five years I drove a 1988 Subaru Justy (considered quite a safe vehicle given its small size) that had a 3 cylinder 66 bhp engine. I drove back and forth from D.C. to Upstate N.Y. at speeds exceeding 65 miles per hour. It got about 40-45 mpg on the highway and in the low 30s in the city traffic. Would we lose our national identity if we decided it was more responsible to drive those kinds of vehicles?
I'll leave nuclear power alone as a solution because I don't believe I am sufficiently informed about its safety, particularly storing spent nuclear fuel.
What about railroads? A number of large cities have excellent, energy efficient public transportation options. Is riding a subway, commuter train or bus such a burden? Could we invest (admittedly at great expense) in high speed rail that reached most people in the country? Could most of us walk 20-30 blocks to visit a store or a friend instead of automatically driving? I think we could do all of these things. Again, I do not know the initial cost or the ultimate savings in energy use but I am persuaded that we could learn a great deal from countries that already do these things. Most are European. Does that matter?
I know one thing for sure. If we were completely energy independent, the likelihood that we would involve ourselves in wars in the middle East - with the exception of counter-terrorism and the protection of Israel - would be much lower, perhaps lower enough to take some of our defense budget and build a smarter transportation system right here.
None of what I am saying is new. It's all about developing a national willingness to try. $5/gallon gasoline might change a few minds.
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