The Roof is on FI-YA!!!!!!!!

Over the last months, the topic that has dominated the political debate is the debt crisis. There are 2 ways to go about fixing the debt. The president’s plan consists of raising revenue mostly in the form of tax increases. People who agree with this position state that tax rates are the lowest they have been in decades and in the wake of this financial crisis more revenue is needed. The position of the Republican Party is to cut spending. They site the years of waste and irresponsible spending as the cause of this problem and the cutting of spending as a remedy.

Many politicians use the example of American home owners as a way to describe the economy. While I think this is not always an accurate picture I think the idea of a house and managing a household can point out some things in the current economic arguments. In this article I will use three practical house hold examples to try to explain my feelings on this topic.

Before I go any further let me state that I have viewed our national debt as a HUGE problem for quite a while. I was one of the people in my college years screaming about the national debt clock. I was the crazy liberal blowing a stack when George Bush was spending this country into oblivion. I have written several times on this blog about the unfunded liabilities that the government has obligated itself to pay. I have stated many times that the current trend is unsustainable.

I. TERMITES

Imagine this scenario. You are a single person and you live alone. You are driving home at night after having dinner with a friend. While you are driving you remember that you once again have forgotten to call TERMINIX because you have a very severe infestation of termites. You have been putting it off for ages but you resolve that this time you are going to get to it. You make up in your mind that the first thing you are going to do when you get to the door is you are going to call TERMINIX and leave a message on the machine. As you turn the corner and enter your development, you get the sense that something as not quite right. As you turn down your street you notice a glow in the darkness. You then notice something smells like smoke. To your horror you realize that it is your house that is on FIRE!!!!

At this point there are many things you could do. Your first instinct may be to run into the house and try to save your cat or dog. You may have the urge to try to retrieve important documents like your passport or your birth certificate. You may think of your prized possession that you do not wish to be destroyed. After about 20 seconds you realize that the most practical thing you can do is to call the fire department.

You may be wondering what your house burning down has to do with the economic picture I painted in the introduction. I would equate the house with the national economy. The fire is the problem of unemployment. I believe the fire is also the result of several systemic (not cyclical) problems in the economy. The termite infestation in this analogy is the national debt. The point of this analogy is that if your house is on fire your first priority is to put out the fire and not to worry about the termites.

The GOP position is to stand outside watching their house burn to the ground and they are on the phone making an appointment with Terminix instead of CALLING THE FIRE DEPARTMENT AND PUTTING OUT THE FIRE. That is how silly this debt debate is when the economy is ON FIRE!!!! In this analogy the water that will be used to put out the fire is going to be the money that we have to spend to fix the systemic unemployment in this economy. In this context the whole debt argument is silly.

Make no mistake, THE TERMITES WILL EAT OUR HOSUE VERY SOON. Our termite problem is magnified because for the past 30 years we have completely ignored our termite problem. Since the mid-1980s the termite problem has grown unchecked due to the irresponsibility of BOTH political parties. For 30 years we have said “we will deal with the termites next year”. In this context you may be asking “How much longer can we wait before we deal with the termites?” I submit we have to put it off one more time because the HOUSE IS ON FIRE!!!! The solution therefore has to have a short term and a long term component.

We are going to have to spend money this year. PERIOD. We are probably going to have to spend money next year. We have to fix the unemployment problem. I believe that this problem is systemic and not cyclical. This unemployment is not due to the normal cycle of the economy but is rather systemic because of a whole list of factors. I will explore these forces in a later article. The trick is since we have to spend this money we need to spend it on things that will have gigantic long term impact. We have to get a huge long-term “Bang” for our “bucks (that we don’t have). I suggest education and infrastructure spending. When (or IF) our economy recovers these things will add to the value of this country and make the individuals in this country more prosperous. This approach fixes the short term and helps us in the long term. But we are going to have to spend. We also have to spend this money with the idea that we are very soon going to have to deal with the debt. We have to put out the fire in a way that in a way that will allow us to come back and fix the termites.

II. NO MONEY, NO MORTGAGE – The difference between debt and deficit

The housing market is another thing that is often in the news. Many politicians compare how people run household budgets to the government. The argument is “if a family doesn’t have money they have to go without and the government should do the same”. I think this is a very flawed analogy for several reasons.

In order we to more clearly define this analogy it is necessary to first define the difference between debt and deficit. The national debt is the total amount of money that we owe. This number is cumulative. This is a long term measurement. Every year the country either takes in more money then it spends or it spends more money than it collects. This results in an annual deficit or surplus. This annual deficit or surplus is added or subtracted from the total debt. The important distinction for this analogy is that there is long term debt and there are short term deficits and surpluses. I like to relate this issue to the idea of buying a house.

When most people buy a house they usually don’t walk into the realtor’s office, put $300,000 on the desk and walk out with a house. Most people get a house via a mortgage. You put some money down and then over the course of 30 years you pay off the house plus interest. You have a 30 year long term debt. When running a house hold you also have monthly short term surpluses and deficits. Hopefully your household has more short term surpluses than deficits. In reality, this may not always be the case. Sometimes someone gets sick. Sometimes you crash the car or you have to buy a new car. Sometimes you send your kids to college and the tuition goes up 300% in 4 years. Sometimes you splurge at Christmas because your kid wants a power ranger. When these things happen you have 2 options. You either have surpluses from past months saved up or you will acquire some short term debt (usually credit) to pay for these things you need or want. The point is you still have 30 year long term debt and your debts are surpluses are added to the debt.

The GOP position is as it relates to the deficit is like saying” I have a mortgage so I am NOT GOING TO BUY ANYTHING ELSE FOR 30 YEARS!!! No Christmas presents. I am going to drive the same car for 30 years. The house burns down. Too bad, we have debt we have to be homeless. Car breaks down too bad. We aren’t spending any more money till we pay off our mortgage. The roof is leaking. Too bad we aren’t spending any more money. Because we have long term debt we can’t have anything else. The problem with the economy is there is no demand. The buying power of the middle class has been weakened so companies are selling less. That is why unemployment is persistent. So guess what. In the near term we are going to have long term debt and we are probably going to have short term deficits. Who wants to go back to the Clinton days where we had an annual SURPLUS???

Another thing that came up in the debt talks was a balanced budget amendment. This is the idea that we amend the constitution to require a balanced budget. The question I ask is “Why didn’t the framers of the constitution make balancing the budget as a requirement?” I think it is because the founding fathers realize that STUFF HAPPENS, and when stuff happens you need to run a deficit. There is a reason that the constitution doesn’t say anything about balancing the budget because the founding fathers were some pretty smart people.

GET A FREAKIN' JOB - spending vs. revenue

Sometimes house holds get into financial trouble. Households may be in a position where they don’t have enough money. When this happens there are TWO courses of actions that people can do. The first is to cut spending. You go without. You buy what you need and not what you want. You cut back. After you cut back and you still are not making it the next thing you do is you get a second job. You work nights or weekends. You work overtime at the job you have. In other words you RAISE REVENUE!!!!!!!

The GOP position is to not raise taxes for any reason. In fact their approach has been to cut taxes while at the same time complaining about our short term deficits and our long term debts. This course of action is akin to taking half of your paycheck THROWING IT OUT THE WINDOW and then complaining to your neighbors how much you have to cut back just to survive.

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The bottom line is this. Revenue makes up 15% of GDP. Spending makes up 25% of GDP. If we are going to balance the budget in the short term these 2 numbers have to be equal. To get rid of the long term debt, the revenue number has to be higher than the spending number. But just like the second household analogy we can’t just stop spending money. Closing this 10 percentage point gap at first glance may not seem that drastic until you consider that 10 percentage points is almost half of the total amount we spend. Think if you had to over night cut your expenses in half. Think of what it would be like if you could only by half of what you are buying now. For those of you who think the government does nothing for you I would like to ask you a series of questions. Did you built the road that you drove to work on or did the state build it? When you cooked your eggs this morning did you by a salmonella kit and test your eggs or did you assume that the FDA tested the eggs and they are safe? If someone breaks into your house, do you hire your own team of vigilantes or do you call the police that the state pays for? If someone owes you money, do you hire a muscleman to break the person's leg or do you use the court system which the state runs? Do you have a power generator in the back yard or do you use the power plants that our collective efforts help to build? Contrary to popular belief the government actually does stuff and to cut spending in half overnight is not reasonable. The only way to close this gap is with a balanced approach. The truth is we have to spend less but we also have to raise more money. A balanced approach is needed but WHEN we spend or save is equally important as WHAT we save.

A balanced approach is what is needed to get out of this problem. Are there wasteful parts of government that need to be curtailed? Of course they are. I am not advocating big government for the sake of big government. I am saying that government has a responsible role to play in our lives. To start an argument with the premise that all government spending is wasteful is not realistic. At the same time we have to raise revenue. Any attempt to raise revenue is not necessarily a communist Marxist plot that will destroy America. Sometimes it is just simple math. I think the solution lies in the middle. Put out the fire, get a second job, and don’t be afraid to spurge a little at Christmas!

Past is Prologue

In 1993, the Star of Indiana Drum and Bugle Corps performed a show entitled “Medea.” This show was based on the musical composition of the same name by Samuel Barber, and a piece by Bela Bartok. As a young band geek, I have to say I LOVED watching this Star of Indiana performance – I watched the video frequently. Soon, my mild obsession changed to curiosity as I began to listen to the original compositions of Barber and Bartok. Then, I read the original mythological story of Medea, which is, in my opinion, too similar to the current political debate on the USA’s debt ceiling.

Medea was the daughter of King Aeëtes and the niece of Circe (granddaughter of the sun god Helios). Medea married Jason (yes, the Jason and the Argonauts /Golden Fleece guy). Jason and Medea had 2 children. Some time goes by and then Jason dumps Medea to marry Glauce, the daughter of the king of Corinth. This leaves Medea a devastated mother with 2 children. Medea gets revenge for Jason’s unfaithfulness by killing the two children. She kills her own kids just to make Jason miserable. The statement she makes is “I hate Jason more than I love my own children.” Imagine a mother who kills her own children just to get back at her ex-husband.

You may be asking why I think about Jason and Medea when I watch the news about the debates going on in Congress about the debt ceiling. I think there are some people in the political arena that “HATE OBAMA MORE THAN THEY LOVE AMERICA.” Rush Limbaugh has already said he hopes Obama fails. When asked to clarify this point he then will give you some long, drawn out explanation about how Obama’s policies are anti-American and Limbaugh hopes those policies fail. Mitch McConnell says his primary goal is to make Obama a one-term president. He didn’t say he wants to improve the lives of the hard working people in his state, or that his state has greater economic prosperity or that the country that he grew up in is a better place for all of her citizens. His primary reason for his political life is to screw Obama.

Most economists agree with Obama that not raising the debt ceiling will be catastrophic to the economies of both the United States and the world. Some members of Congress on the right (mostly the Tea Party) have stated that they want the country to hit the debt limit even though many of them acknowledge that there will be consequences. For everyone who thinks that my “Medea” diagnosis of the GOP is incorrect, ask yourselves a series of questions: How does this make America better? How is America better if its credit rating is downgraded to that of a second class economic nation? How is it better for the American people if the government can’t pay its bills? How is it better for us as a country if old people that worked all their lives and put money into social security now over night are told that their money isn’t coming? How are we better as a country when we are fighting 3 wars and the people on the battle field don’t get paid? How are we better when widows of fallen service men don’t get the life insurance policy that the government provides? How does closing national parks help the citizens of this country? How do credit card interest rates going up to FIFTY PERCENT OVERNIGHT help the average American? How do car loans with 35% interest help our consumer economy? How does it help the average American (who already won’t get their social security payments if the GOP has their way) if the stock market tanks and everyone’s 401k is cut in half?

Some Republicans would rather see the entire United States economy collapse then to see Obama get an increase in the debt limit. When George Bush was president, the Congress voted to raise the debt ceiling SEVEN TIMES IN EIGHT YEARS (and the one time they didn’t was because Bill Clinton left him a freakin’ surplus and not a deficit). Now this same group of Republican politicians won’t raise the debt ceiling one time IN THE MIDDLE OF A RECESSION CASUED BY GEORGE FREAKIN BUSH. They would rather see unemployment go up to 40% just to screw Obama and win a political argument.

This is not the first time that this has happened. If the GOP had their way there would be no General Motors now. They would have rather seen all of Detroit be unemployed to screw Obama instead of support his package that saved the automobile industry. Now these politicians and their friends are buying stock in GM at $31 a share. Do they say Obama may have been right? HECK NO. They take every opportunity they can to stick it to him. Have they said, “I am glad we still have an auto industry?” Of course not. Rather than give Obama one small victory in this economic hell or acknowledge that America having a manufacturing sector may be a good thing, the GOP would rather continue to publicly state that Obama’s idea was a bad one and take every chance they can to screw him.

I am not suggesting that everyone who voted against Obama hates America. I am not suggesting that all Republicans hate America. I am not saying that everyone has to agree with everything Obama does. I know many people that did not vote for Obama who love America. There are many things that Obama has done that I don’t agree with. What I am saying is that it is in the political interest of the GOP for things to get worse. I am also saying that there are some politicians who hate Obama so much, who hate what he is proposing so much that they would rather things get worse just to prove a point. I am saying that there are politicians who would put their political views and their hatred of Obama and what he stands for in front of the best interest of the country. It is in NO ONE’S best interest (Democrat, Republican, progressive, conservative) if this country defaults on its obligations. It makes America less secure and less prosperous. So why would ANYONE want to see America go into the toilet over a debt ceiling that we have the power to change? I think the GOP is more interested in winning the argument than helping the country. I want America to prosper. If the conservative philosophy prevails and America is successful, I WILL BE THE HAPPIEST GUY IN THE COUNTRY. I would love to write an article 20 years from now called America has solved all of its problems and we did it with conservatism. I can’t see a time when Rush Limbaugh and Mitch McConnell would ever make that admission. The GOP needs to act like a political party and not someone’s psycho ex wife. That is what I call a Medea Complex.

Queue Samuel Barber mythologically inspired music!

Academy Awards

The 2011 Academy Awards are supposed to highlight outstanding movie-making. I often feel that the actual movies take a back seat to a lot of other junk that goes on. I personally could give less than 2 farts about who is wearing what or who shows up with whom on the Red Carpet. A lot of hype has been directed to the hosts of this year's Oscars. I am actually a big fan of both of the hosts. While I don’t mind a good show, I am more concerned with who wins the awards. I found the actual field of movies this year to be a little lacking. There was nothing in this field that I hated. There were a few movies that I really loved. Most of the movies this year were just ok. They left me thinking “This is the 10^th best movie this year, really?” Having said that, I made several observations about the movies that I saw (I saw everything nominated for a major category, plus all the shorts). This will be a list of my observations.

THE FREAKY and the FREAKED OUT

“Black Swan” was the freakiest movie of the year. Even with my untrained eye it was obvious that main character had ISSUES!!!! Anyone with a psych degree should watch this movie and attempt to diagnose what this girl had. I love the psychological thriller aspect of this movie. I like that you are never really sure what is reality and what is imagined in this movie. I appreciated the local connection as many of the dancers in this movie were from the Pennsylvania Ballet (I have season tickets). Hopefully this movie will inspire a new generation of ballet fans so I am not sitting in the seats with old ladies all the time.

“Black Swan” was the freakiest movie but the movie that freaked me out the most was “127 Hours”. (I AM GOING TO TALK ABOUT SPECIFICS OF THE PLOT. IF YOU WANT TO GO IN FRESH BE WARNED). This movie is based on the true story of Aron Ralston, An adventurer who goes on a rock climb and gets stuck in a canyon. The only way he ultimately can free himself is to CHOP OFF HIS OWN ARM!!! I was sitting in the theater trying to imagine if I could have the will to chop off my own arm even in the face of certain death. It reminds me that people can get into situations that are so desperate they could do the unimaginable.

KIDS: Love ‘em/Hate’em

I traditionally hate seeing kids at the Oscars. Sorry, I am heartless, but usually, I don’t feel they are deserving. Usually, I think that people lower their standards because kids are cute and young and all this stuff. If you are nominated for an award you have to achieve, not just do a good job “for a kid”. This year there are actresses under 21 nominated for awards. I thought Hailee Steinfeld was amazing. I hate westerns in general but I loved “True Grit”. Miss Steinfeld was great. She was on screen with Matt Damon and Jeff Bridges and I really didn’t care about them. She played an able-bodied but quirky character with knowledge beyond her years. Maybe this was not a stretch for her but I still thought she played it well. Jennifer Lawrence was great in “Winter’s Bone”. I have to admit I didn’t care for this movie too much at all. I appreciated the look into Appalachian living but that is about it. Miss Lawrence made this movie bearable for me.

I guess in the traditional sense “Toy Story 3” is a kid’s movie. In reality, I LOVE PIXAR. I do not think they have made a bad movie (I have not seen all of them so that maybe uninformed). This movie is wonderful for all ages. The level of technical achievement is great. The storytelling is excellent. I love the characters. This movie is well deserving of a best picture nomination.

MY ARTSY GEEK HEART MADE GLAD

I LOVED “INCEPTION” even though I did guess the ending in the first ten minutes. I loved it. It was a great science fiction movie. I have to admit to a man crush on Leo DiCaprio; not gonna lie. The dude can just act his butt off. The story is well thought out. The special effects are amazing. The movie is thought provoking. Imagine what kind of industry would arise if we had the ability to plant thoughts in people’s mind. What would people pay to manipulate others as well as to remove painful memories from their own life? The idea of infiltrating dreams and getting paid for it is a neat concept that is explored by this movie. 20 years ago a Sci-fi like this wouldn’t even be considered for best picture. The fact that it both did well at the box office and gets noticed for its artistic value makes my geek heart happy. I still get funny looks when I wear my star trek shirts in public, but hey, we are making progress.

I saw the play “Rabbit Hole” a few years ago at the Arden Theater. I didn’t remember it until I saw the first 5 minutes of the movie. This is a very good adaptation. They added locals to make it more like a movie and less a stage production, but they stayed very true to the dialogue and the script. Seeing both productions highlights the difference between theater and movies and shows how they are both different but equally valuable.

THE MOST COMPETITIVE

In my opinion the best actor category was by far the deepest and most competitive field in this year's Oscars. All 5 performances are very strong. I would have no problem with any of these actors winning. In addition, the best supporting actor category was really strong. Some of these performances in another year could have been best actor performances. I loved Geoffrey Rush (The King’s Speech), Mark Ruffalo (The Kids Are All Right) and Christian Bale (The Fighter). I could make my annual argument that actresses don’t get as much cool material as men do, but I won’t.

RELEVANCE

The “Social Network” was the most socially relevant movie of the field. The idea of social media for good or for ill has significantly changed many of our lives. The revolutions in the Middle East while not started by social media, have used things like Facebook, twitter, and YouTube as instruments. While many would say this is a good thing, there is the possibility that these media can be used for ill. I have to admit, I LOVE FACEBOOK. Probably more than most. I got to the facebook party relatively early (one of the benefits of having a Rutgers email address for teaching marching band). Like most early facebook users, I was not concerned with the legal battles going on but was rather worried about “friending” and “poking” people. To see a representation of the people and the problems behind the scenes was great. I will not debate the accuracy of the portrayals, but will just accept that this is one side of the story. This is still a great movie. My only complaint was that I thought that Jesse Eisenberg was Michael Cera!

Here is who I think should win. These are not predictions. These are the people I think should win. The great thing about art is that we can all like something different and still be valid.

Picture - The King’s Speech

Actor – Javier Bardem, Biutiful

Supporting Actor – Christian Bale, The Fighter

Actress – Natalie Portman, Black Swan (not really committed to this one)

Supporting Actress – Hailee Steinfeld, True Grit

Directing – The King’s Speech

Writing (Adapted Screenplay) – The Social Network

Writing (Original Screenplay) - Inception