COMMON SENSE REVISITED

Blog here.

PERSPECTIVE: This is the fourth blog in the Common Sense Revisited* series. The subject matter deals with the failures of our government—Congress and the several presidents that have guided the country over the past thirty-five years. The views expressed are neither liberal nor conservative nor an attempt to impeach either political party. There are enough facts to suggest that all share in the debacle that has led this country to its current state. If there is a bias, it’s expressed in these six words—a plague on all their houses.

*title rights reserved

“These are times that try men’s souls…”

NATIONAL DEBT, ENERGY & JOBS

Since 2008, we have spent trillions to jump start the economy with little or no perceptible results. Meanwhile, in our nation’s capital our “leadership”— Congress and the administration— are arguing about the bar bill on the Titanic rather than focusing on the one major opportunity, energy, that can resolve the fiscal mess that they have created over the past 35 years. The country is at the cusp of an energy revolution, which if exploited will spawn a second industrial revolution.

The new exploration and drilling technologies have resulted in the expansion of our domestic oil and natural gas reserves. The recoverable natural gas reserves alone are estimated at 2,170 trillion cubic feet (Tcf). These reserves are composed of liquid and natural gas (LNG) which can be processed into propane, benzene, etc. The natural gas reserves alone can make the U.S. the number one producer and exporter of energy for the next hundred years, and solve our fiscal, GDP growth and unemployment problems.

In 18 years, the world’s energy requirements are forecasted to grow from 87 billion barrels of oil to 99 billion barrels. The energy revolution would add millions of jobs in extraction, infrastructure, support and service activities, and the cheaper energy could result in repatriating some of the manufacturing and service jobs that were ceded to other countries. The economies of the U.S. and the 33 states that contain shale deposits within their borders would flourish. North Dakota, at the forefront of the energy revolution, has an unemployment rate of 3.5%, well below the national average.

To put the energy issue in perspective, the U.S. consumes 7.3 billion barrels of oil a year (20 million a day), of which 4.2 billion are imported (valued at $ 336 trillion). Of that number, approximately 20% (valued at $70 trillion) is imported from the Middle East. A recent Goldman Sacks report predicts that by 2017, America will produce 10.9 million barrels of oil a day, and become the largest oil producer surpassing Russia and Saudi Arabia. The increase will come largely from the shale natural gas and oil deposits that cover most of the country. By 2025, with a common sense energy policy, we could be self sufficient and net exporters of energy. That would wipe out the $336 trillion that we now pay foreign governments, and we would enjoy a surplus in our balance of payment account. Countries in Europe and Asia currently pay $8 to $12 for a cf of LNG, which is currently selling at the well head for $1 cf. The revenue potential from exporting oil and natural gas is enormous. The only impediments are the number of drilling rigs available, and the dogged determination of the environmentalist to frustrate progress.

Our energy policy should at a minimum encompass the following:

· Mandate that by:

- 2018, all new cars and trucks must be hybrids electric and natural gas or petroleum and natural gas.

- 2030, all cars and trucks be built to operate on clean energy sources—electric or natural gas.

· Mandate a minimum 50 MPG performance standard for all new cars and light trucks by 2020.

· Mandate that by 2020, all utilities, manufacturing facilities, large malls, and skyscrapers that now use fossil fuels switch to natural gas. All new homes and structures built after 2020 to use clean energy.

· Eliminate all subsidies to oil, ethanol and all other energy producers, and consider a program to subsidize the conversion of vehicles and homes to natural gas.

· Accelerate permits for drilling and infrastructure requirements—pipe lines, refineries, port facilities, etc.—provided that the producers adhere to a set of rational environmental regulations. The operative word here is rational.

We should continue to pursue the renewable energy initiatives with the realization that:

· 80% of our energy consumption is used to power vehicles, and there is no viable cost effective clean energy alternative on the horizon other than natural gas, and electricity (which requires a secondary energy source—natural gas, oil, coal or nuclear power—to generate in the quantities that would be required).

· The other forms of renewable energy have limitations, are not likely to be cost effective, and are decades away from implementation to make a dent in our energy requirements. We need a transition strategy to bridge the gap until the third industrial revolution—renewable energy—becomes a reality.

To assume leadership as a net exporter of energy, and to meet our clean energy needs, we require a dose of common sense applied to the environmental issues, and the leadership of Congress and the administration to make it a reality. Given the on/off situation with off shore drilling, fracture stimulation, and the Keystone pipeline, the application of common sense to the energy issue does not appear to be the order of the day in the nation’s capitol. Instead, the politicos are mired in the cesspool of special interests groups—oil, automotive, alternative energy companies, farmers, ethanol producers, and environmentalist. As long as these special interest groups are willing to fund the coffers of our politicians, we will never have a rational energy policy. The administration has adeptly delayed the Keystone pipeline until after the 2012 elections, a blatant maneuver to curry favor with the special interest groups that are against the pipeline, ostensibly because the pipeline would contaminate the aquifer which supplies water to the region. The facts are that 25 billion barrels of oil have flown through the 25,000 miles of pipeline within the Ogallala aquifer – 2000 of which are located in Nebraska—with no catastrophic effect. The morally corrupt politicians have traded jobs for votes and campaign contributions. Is it any wonder the people are disenchanted with the government?

Energy, jobs, national debt, and our anemic growth rate are today’s problems that must be addressed and solved today, if the country is to grow and prosper. The global warming issue is tomorrows’ problem, which, if there is actually a problem, will be solved tomorrow. Running the world on cost-effective renewable energy is a dream that should be pursued, but not at the exclusion of other viable clean energy resources. Once or perhaps twice in a century there is a game changing opportunity to raise the country and its people to the next level. The energy revolution provides the opportunity to jump start our economy, create jobs, become energy independent, solve our balance of payment imbalance, reduce the national debt, and stop importing oil from the Middle East. We have fought two wars for oil with a cost of trillions of dollars, and the loss of over 6,000 men and women. We are at the cusp of ceding our world leadership role because our so-called leadership is not willing to stand up to special interest groups and implement a rational energy policy that would revitalize the economy.

The special interest groups play a major role in stymieing the development and implementation of a rational energy policy. Our morally corrupt leadership has not risen to the task. Accordingly, the lone recourse left to the people is to demand a constitutional amendment that provides for a one-term limit—the president and Senate, six years, House, four years—with federally funded elections. The country would be better served if the Occupy Wall Street and Tea Party adherents move their protests to the fifty state capitals, and demand that the state legislators call a constitutional convention to propose and implement the 28th amendment— one term limit and federal funded elections. The 28th amendment should be a priority for both groups if we are to sever the symbiotic relations between politicians and the special interest groups that fund their campaigns. Only then will rationality and common sense prevail in the nation’s capital.

“Throw the bums out” was the often heard refrain at Ebbets field in the 1930’s-40’s when the Brooklyn Dodgers fans were not satisfied with the performance of their team, a frequent occurrence in those years. Accordingly, it’s appropriate that the performance of our so called “leaders” be treated with the same refrain.

*title rights reserved

COMMON SENSE REVISITED

Blog here.
PERSPECTIVE: This is the fourth blog in the Common Sense Revisited* series. The subject matter deals with the failures of our government—Congress and the several presidents that have guided the country over the past thirty-five years. The views expressed are neither liberal nor conservative nor an attempt to impeach either political party. There are enough facts to suggest that all share in the debacle that has led this country to its current state. If there is a bias, it’s expressed in these six words—a plague on all their houses.
*title rights reserved
“These are times that try men’s souls…”
NATIONAL DEBT, ENERGY & JOBS
Since 2008, we have spent trillions to jump start the economy with little or no perceptible results. Meanwhile, in our nation’s capital our “leadership”— Congress and the administration— are arguing about the bar bill on the Titanic rather than focusing on the one major opportunity, energy, that can resolve the fiscal mess that they have created over the past 35 years. The country is at the cusp of an energy revolution, which if exploited will spawn a second industrial revolution.
The new exploration and drilling technologies have resulted in the expansion of our domestic oil and natural gas reserves. The recoverable natural gas reserves alone are estimated at 2,170 trillion cubic feet (Tcf). These reserves are composed of liquid and natural gas (LNG) which can be processed into propane, benzene, etc. The natural gas reserves alone can make the U.S. the number one producer and exporter of energy for the next hundred years, and solve our fiscal, GDP growth and unemployment problems.
In 18 years, the world’s energy requirements are forecasted to grow from 87 billion barrels of oil to 99 billion barrels. The energy revolution would add millions of jobs in extraction, infrastructure, support and service activities, and the cheaper energy could result in repatriating some of the manufacturing and service jobs that were ceded to other countries. The economies of the U.S. and the 33 states that contain shale deposits within their borders would flourish. North Dakota, at the forefront of the energy revolution, has an unemployment rate of 3.5%, well below the national average.
To put the energy issue in perspective, the U.S. consumes 7.3 billion barrels of oil a year (20 million a day), of which 4.2 billion are imported (valued at $ 336 trillion). Of that number, approximately 20% (valued at $70 trillion) is imported from the Middle East. A recent Goldman Sacks report predicts that by 2017, America will produce 10.9 million barrels of oil a day, and become the largest oil producer surpassing Russia and Saudi Arabia. The increase will come largely from the shale natural gas and oil deposits that cover most of the country. By 2025, with a common sense energy policy, we could be self sufficient and net exporters of energy. That would wipe out the $336 trillion that we now pay foreign governments, and we would enjoy a surplus in our balance of payment account. Countries in Europe and Asia currently pay $8 to $12 for a cf of LNG, which is currently selling at the well head for $1 cf. The revenue potential from exporting oil and natural gas is enormous. The only impediments are the number of drilling rigs available, and the dogged determination of the environmentalist to frustrate progress.
Our energy policy should at a minimum encompass the following:
· Mandate that by:
- 2018, all new cars and trucks must be hybrids electric and natural gas or petroleum and natural gas.
- 2030, all cars and trucks be built to operate on clean energy sources—electric or natural gas.
· Mandate a minimum 50 MPG performance standard for all new cars and light trucks by 2020.
· Mandate that by 2020, all utilities, manufacturing facilities, large malls, and skyscrapers that now use fossil fuels switch to natural gas. All new homes and structures built after 2020 to use clean energy.
· Eliminate all subsidies to oil, ethanol and all other energy producers, and consider a program to subsidize the conversion of vehicles and homes to natural gas.
· Accelerate permits for drilling and infrastructure requirements—pipe lines, refineries, port facilities, etc.—provided that the producers adhere to a set of rational environmental regulations. The operative word here is rational.
We should continue to pursue the renewable energy initiatives with the realization that:
· 80% of our energy consumption is used to power vehicles, and there is no viable cost effective clean energy alternative on the horizon other than natural gas, and electricity (which requires a secondary energy source—natural gas, oil, coal or nuclear power—to generate in the quantities that would be required).
· The other forms of renewable energy have limitations, are not likely to be cost effective, and are decades away from implementation to make a dent in our energy requirements. We need a transition strategy to bridge the gap until the third industrial revolution—renewable energy—becomes a reality.
To assume leadership as a net exporter of energy, and to meet our clean energy needs, we require a dose of common sense applied to the environmental issues, and the leadership of Congress and the administration to make it a reality. Given the on/off situation with off shore drilling, fracture stimulation, and the Keystone pipeline, the application of common sense to the energy issue does not appear to be the order of the day in the nation’s capitol. Instead, the politicos are mired in the cesspool of special interests groups—oil, automotive, alternative energy companies, farmers, ethanol producers, and environmentalist. As long as these special interest groups are willing to fund the coffers of our politicians, we will never have a rational energy policy. The administration has adeptly delayed the Keystone pipeline until after the 2012 elections, a blatant maneuver to curry favor with the special interest groups that are against the pipeline, ostensibly because the pipeline would contaminate the aquifer which supplies water to the region. The facts are that 25 billion barrels of oil have flown through the 25,000 miles of pipeline within the Ogallala aquifer – 2000 of which are located in Nebraska—with no catastrophic effect. The morally corrupt politicians have traded jobs for votes and campaign contributions. Is it any wonder the people are disenchanted with the government?
Energy, jobs, national debt, and our anemic growth rate are today’s problems that must be addressed and solved today, if the country is to grow and prosper. The global warming issue is tomorrows’ problem, which, if there is actually a problem, will be solved tomorrow. Running the world on cost-effective renewable energy is a dream that should be pursued, but not at the exclusion of other viable clean energy resources. Once or perhaps twice in a century there is a game changing opportunity to raise the country and its people to the next level. The energy revolution provides the opportunity to jump start our economy, create jobs, become energy independent, solve our balance of payment imbalance, reduce the national debt, and stop importing oil from the Middle East. We have fought two wars for oil with a cost of trillions of dollars, and the loss of over 6,000 men and women. We are at the cusp of ceding our world leadership role because our so-called leadership is not willing to stand up to special interest groups and implement a rational energy policy that would revitalize the economy.
The special interest groups play a major role in stymieing the development and implementation of a rational energy policy. Our morally corrupt leadership has not risen to the task. Accordingly, the lone recourse left to the people is to demand a constitutional amendment that provides for a one-term limit—the president and Senate, six years, House, four years—with federally funded elections. The country would be better served if the Occupy Wall Street and Tea Party adherents move their protests to the fifty state capitals, and demand that the state legislators call a constitutional convention to propose and implement the 28th amendment— one term limit and federal funded elections. The 28th amendment should be a priority for both groups if we are to sever the symbiotic relations between politicians and the special interest groups that fund their campaigns. Only then will rationality and common sense prevail in the nation’s capital.
“Throw the bums out” was the often heard refrain at Ebbets field in the 1930’s-40’s when the Brooklyn Dodgers fans were not satisfied with the performance of their team, a frequent occurrence in those years. Accordingly, it’s appropriate that the performance of our so called “leaders” be treated with the same refrain.
*title rights reserved

COMMON SENSE REVISITED*

Blog here 

PERSPECTIVE: This is the third blog in the Common Sense Revisited* series. The subject matter deals with the failures of our government—Congress and the several presidents that have guided the country over the past thirty five years. The views expressed are neither liberal nor conservative nor an attempt to impeach either political party. There are enough facts to suggest that all share in the debacle that has led this country to its current state. If there is a bias, it’s expressed in these six words—a plague on all their houses.  .

 

 

WALL STREET, CAPITOL HILL, PENNSYLVANIA AVE, AND MAIN STREET

 

The Occupy Wall Street (O.W.S) protestors are being justly criticized for a lack of a coherent message and a specific goal— rebels without a cause. Their protests are directed against capitalism—the linchpin of our nation. And if the truth be told, the young protestors are attempting to articulate what Main Street senses—that capitalism, epitomized by the free market, is in intensive care as a result of the malfeasance and greed of the leaders of  our institutions — Banks, Regulators, Business, Government.  The symbiotic relationship between government and big business has distorted the balance of power in the country, and has led us to the brink of a national disaster.

 

The country has evolved to a form of a hybrid socio-capitalism, where some business entities with the right political connections can’t loose. These institutions—financial conglomerates, for-profit educational institutions, quasi government institutions—have and are still being subsidized by the taxpayer. In a sense, the shareholders book the gains and the government (i.e.: taxpayer) assumes the losses.  The bailout of the financial institutions resulting from the mortgage bubble is not in question here. Not taking action would have made the depression of the1930’s seem like a mild recession. If criticism is warranted, it’s that the government didn’t intervene soon enough to shore up the big financial institutions, and failed to use its leverage to extract much needed reforms from these same institutions to prevent a re-occurrence of the systemic failure of 2008. The Fed, Treasury Department, and the bank regulators are responsible for this failure.

 

The Federal Reserve Bank continues to subsidize the banks in the form of low interest rate loans in order for the banks to build up their capital base so that they could grant more business loans, which would create jobs and stimulate the economy. Instead, the banks are investing the low interest loans in US Treasury bonds and expanding their derivative portfolios—estimated at $250 trillion (95% among the top 5 banks). The banks now have approximately $3.0 trillion more derivatives on their books than they did at the height of the financial crisis. $2.5 trillion are in credit default swaps with European Banks with exposures to Portugal, Italy, Greece, and Spain—countries that are teetering on the cusp of bankruptcy. Since the banks are not required to support their derivative portfolios with capital, failure of any of these countries could set off a chain reaction which could replicate the 2008 disaster. The banks are betting that the ECU will bail out the European banks as the Fed bailed out the US banks in 2008,

 

One of the constructive provisions of the Dodd-Frank Act calls for regulation of derivatives and for banks to carry additional capital to support their derivative portfolios. Three years after enactment, the financial services industry lobby has managed to obfuscate the issue and delay implementation of these vital reforms. In view of the fact that the financial services industry is one of the biggest contributors to presidential and congressional elections, it’s no wonder that our morally corrupt leadership is again not using their leverage to force resolution of this issue. Considering that derivatives—credit default swaps and collateral debt obligations— were the main cause of the financial crisis, the inaction of our so called leadership, is  morally repugnant and nothing short of criminal.

 

The financial regulatory institutions are nothing but paper tigers, focusing on minutia rather than substance. For years the Fed and the other bank regulators paid little attention to derivatives. The Fed began to take notice after the collapse of the Long Term Capital Management hedge fund that lost a $1.2 trillion bet on derivatives, mainly with money borrowed from the banks.  A Fed audit indicated that the banks didn’t know the extent of their derivative exposure due to lax record keeping and controls. Fortunately, the paperwork issue was resolved before the 2008 meltdown, but the systemic risk that these instruments pose remains. Too big to fail is slowly but surely morphing into a too too big to fail.

 

The Commodities Futures Trading Commission (C.F.T.C.) is another institution that has failed to enforce the activities of the traders and the institutions they represent. Today, the biggest oil traders are the big banks, betting billions on the price of oil.  Over the counter oil trades represent 95% of the trades on a given day, and, by law, over the counter trades are not regulated by the C.F.T.C. Even if the C.F.T.C were to discover a criminal violation, they are forbidden to intervene. These facts, incredulous as they seem, are the result of the Enron loophole in the Commodities Futures Modernization Act which was whisked through Congress by Senator Phil Gramm, whose wife, at that time, was on Enron’s board. This same amendment opened the gates for banks and other speculators to trade in oil commodities. Today, speculators control 99% of the oil market, and the planet is so awash with oil that speculators are running out of storage space. The oil storage facilities in the U.S. are at capacity, and oil is now being stored on idle tankers. Consider that approximately over one billion barrels of oil are traded every day, and the daily world consumption of oil is a mere 90 million barrels. Is it any wonder that a gallon of gasoline is selling for $4.00!

 

There is one thread that stands out in all this chicanery, and that is the symbiotic relationship between the government and the financial services industry. People move freely between both camps. Gramm’s wife was the C.F.T.C . regulator prior to her appointment to the Enron board. Enron supported James E. Newsome to head up the C.F.T.C. Newsome was subsequently hired by New York Mercantile Exchange (NYMEX) and appointed CEO of the very same institution he was regulating before he resigned from the C.F.T.C. When the exchange went public, he walked away with over $50 million.  The last three administrations appointed a treasury secretary that had previously been employed by Goldman Sachs. Robert Rubin, President Clinton’s treasury secretary, and the same Senator Gramm were instrumental in repealing the Glass-Steagall Act without implementing the necessary safeguards to prevent the abuses that led to the enactment of the Act in the first instance. They, together with Alan Greenspan, were also responsible for preventing the C.F.T.C. from regulating derivatives. The Enron loophole also exempts over the counter derivative trading from CFTC regulation. Thus the $600 trillion derivative market is running wild with no oversight over the products and the traders that make the market, and like the oil market the derivative market has no transparency. Subsequently, Rubin was hired by Citigroup, shortly after the repeal of Glass Steagall legalized the pending Travelers/Citicorp merger. He subsequently presided over its dilution. Not to worry, he walked away with upward of $120 million for his service or more aptly his disservice while the shareholders lost upwards of $240 billion. Senator Gramm was appointed vice chairmen by UBS after he retired from Congress, and you can guess who inherited Enron’s trading business when they went bankrupt—UBS.  Gramm, a free market advocate, through his role in rigging the Enron loophole, is singularly responsible for the derivatives debacle and subsequent recession and the consumer paying $4 instead of $2 dollars for a gallon of gas.

 

Capitalism and the free market have had a schizophrenic journey over the past century. The advent of the robber barons, the trusts, the investment/ commercial bank excess that led to the stock market crash of 1929, greenmail and junk bond scandals, savings bank-S&L and commercial real estate debacles, and the dot com and mortgage bubbles were all driven by greed and untrustworthy individuals in business and government. The theory that free markets allocate capital better than regulated markets is a myth, given the realities of the moral fiber of the individuals who populate our institutions. The one lesson to be learned from past history is that capitalism and free markets work well only when they are wisely regulated, are populated by honorable honest leaders, and the penalties for violating the rules are so draconian that they act as a deterrent to those who would game the system. At a minimum, violators should be prosecuted under the Rico Law, with long prison terms in max security prisons, and confiscation of all family wealth regardless of when and where it was generated. As the gipper would say, “trust but verify.”

 

Main Street is still absorbing the brunt of the pain from the collapse of the mortgage bubble—21% unemployment and underemployment, over $2 trillion in savings and asset losses—while the perpetrators walked away with huge paydays even though their institutions were brought to the brink of failure. The systemic failure of 2008 was caused by the derivatives, (aid and abetted by the regulatory and rating agencies), and pure fraud and greed, led by the likes of Goldman Sachs, A.I.G. and the other major international banks. But what is really criminal is the lobbying by these same institutions, in consort with the political hacks, to prevent the implementation of the needed reforms. Is it any wonder that people are protesting?  And is it any wonder that Main Street is fed up with Wall Street, Pennsylvania Avenue, and Capitol Hill?

 

In conclusion, the efforts of the O.W.S. protesters and their counterpart —the Tea Party—would be best directed to pressure the Congress to: repeal the Commodities Modernization Act, enforce those substantive provisions of the Dodd Frank Act, and to pressure the state legislators to call a constitutional convention to amend the constitution to provide for term limits and federally funded congressional and presidential elections. This later action is required to rectify the root cause of the problem— the symbiotic relations between government and big business purchased by campaign contributions. Nothing short of these actions will begin to resolve the fiscal problems faced by the nation and prevent another financial disaster.

 

 

 

 

COMMON SENSE REVISITED*

Blog here.  

PERSPECTIVE: This is the second blog in the Common Sense Revisited* series. The subject matter deals with the failures of our government—Congress and the several presidents that have guided the country over the past thirty five years. The views expressed are neither liberal nor conservative nor an attempt to impeach either political party. There are enough facts to suggest that all share in the debacle that has led this country to its current state. If there is a bias, it’s expressed in these six words—a plague on all their houses.

*title rights reserved

 

 

 

TERM LIMITS— A CALL FOR ACTION

 

My last blog dealt with the indictment of the leadership of our country over the past 30 years, and the action that we the people have to pursue to take the government back from the special interest groups that are running roughshod over the country and its institutions.  The key is to break the hold that the lobbyists have over our elected representatives by reforming the election process through a constitutional amendment which severs those bonds and assures that our elected officials work for the benefit of their constituents.

 

There are several factors that impact the current election process that lead to the need for candidates for public office to rely on third parties to fund their election campaign.  

 

-The cost of a presidential and congressional election campaign is prohibitive. The last presidential campaign cost billions of dollars. Senate campaigns cost millions and House campaigns could cost in the hundreds of thousand of dollars. The estimated cost of the 2010 congressional election is five billion dollars.  These campaigns are funded by contributions, supposedly by the public, but the big contributions are from the special interest groups and the Pac’s they control. And make no mistake; they come attached with an IOU.

­

-The election process is too lengthy. Presidential election campaigns begin in the third year of the first term for incumbents seeking reelection, and more than two years before the election for the challengers. Congressional elections have a shorter horizon, since it is difficult to unseat an incumbent that has been entrenched for years or represents a gerrymandered district. The challengers have to raise a disproportionate amount of funds to mount a credible challenge. 

 

-Incumbents have an unfair advantage over challengers. They can use their prominent position to campaign for reelection through free coverage by the media or by dispensing pork through entitlements that waste taxpayer dollars like “the bridge to nowhere.”

 

-Former congressional officials move freely from Congress to firms that lobby the government, allowing them to influence their former colleagues to act favorably on their client’s behalf.  This incestuous relationship results in legislation such as the Enron Amendment and financial services deregulation which added billions to the coffers of big business to the detriment of the consumer. Business has a right to a return on their investment and a right to be heard and petition and have access to Congress, provided that business entities operate within the law, and not through outright fraud and/or the malfeasance of elected officials, at the expense of the electorate.

 

Given these issues, the election process should be reformed as follows;

 

-The president should be limited to serve for one six year term.  A two-term president only effectively serves six years of his eight year term. As evidence, the current administration has delayed the implementation of the cuts to the 2014 budget forecast for two years, in order to take effect after the 2012 presidential election. Past administrations have taken similar steps to postpone what could be unpopular, but needed decisions that could adversely impact their quest for reelection.

 

-Congress should be limited to one six year term for the Senate and one four year term for the House. One sixth of the Senate and one fourth of the House would turn over every year. One term in either house would be the life time limit that an individual could serve.

 

-Federal elections should be funded by the government, with no contributions from the candidate or from third parties. An equal amount of money would be allocated to each candidate to run their campaign as they choose under a strict accounting protocol. Spending on campaigns would be monitored, and any proven violation either pre or post election, would constitute a felony, and result in immediate disqualification, a permanent ban from seeking federal public office, prosecution and incarceration.

 

-Candidates for Congress would be selected by the political parties either by ballot or by appointment. There would be no federal funding for this process.

 

- For presidential candidates, the political parties would select their top two candidates by caucus, from all the candidates that qualify under their party rules. The top two candidates for office in each party would be funded by the federal government in a run-off primary election. For presidential candidates, primary campaigning would begin in February of the election year with a primary vote in June.  The conventions would be held in the July/August timeframe and would be funded by each political party. To qualify for federal funding, a political party would have had to capture at least 15% of the vote in the last presidential election. The lack of incumbents would level the playing field, shorten the primary and election cycles and reduce the cost of elections.

 

 

-Campaigning for presidential elections would begin after the conventions and end on Election Day eve. Campaigning for congressional elections would begin after Labor Day. The candidates would have to adhere to the following minimum requirements: for presidential candidates, there would be eight national televised debates, for the Senate, there would also be eight televised debates emanating from universities located in the state.   For the House, there would be eight town hall debates in the district which they represent. 

 

-Elected officials would not be eligible to be employed (either directly or indirectly) by their former employer for three years after the expiration of their term.

 

-Congressional pay scale should be commensurate with similar jobs in the private sector. However, the candidates should carry no pension benefits or other perks, except for medical insurance to expire six months after the expiration of their term. Pay scale for the Congress should be determined by a compensation board comprised of members from academia, business, state government, and should not exceed the pay scale of a cabinet secretary.

 

This change in the election process requires and amendment to the constitution. Congress, the very same people that have to relinquish power, controls two out of three methods required to initiate a constitutional amendment. The first, and common method requires a 2/3 majority of Congress to propose an amendment, and a ¾ majority of state legislators for approval. This method has been used for all amendments except one. The second method requires a 2/3 majority of Congress to propose, and a convention of ¾ of the states for ratification. This method has only been used once to ratify the 21st amendment.  The only method that doesn’t involve Congress requires a 2/3 majority of the states to call a constitutional convention to propose an amendment and require ¾ of the state conventions or ¾ of the state legislators for ratification. This method has never been used and is fraught with ambiguity, with each state having its own rules to select representatives for the convention.  With all the ambiguity and warts, it’s the only recourse open to the electorate that would not involve the sitting Congress.

 

Such an approach would require a grass roots movement at the state level, to spur the state governing body to call a constitutional convention with the purpose of imposing term limits—a formidable task to convince 34 states to propose the amendment and persuade 39 states to ratify. Only a national movement with tentacles in every state, such as the Tea Party, could assume such a task. In retrospect, the efforts of the Tea Party would have been better spent convincing the states to call for a constitutional convention to address fundamental reform: term limits, balanced budget, and the other issues that need reform, rather than focusing on the election.

 Short of the Tea Party redirecting its focus, the only recourse is a new grass roots movement to address the term limit issue through the constitutional convention path. It would require organizing a Term Limit cell in every state with coordination at the national level. The social networks would be a good vehicle to begin raising awareness, and subsequently spawning the leadership to make it happen. If the social networks were the catalysts that caused major change in the Egyptian government, the power of that medium could just as easily be applied in amending the United States Constitution.

 

The professional politicians would combat the term limit proposal by playing the experience card and argue for multiple terms. There is a term limit bill circulating in Congress to limit both houses of Congress to two terms.  Members are insisting on a minimum of four terms. The argument is that one term would decrease the effectiveness of the Congress by reducing the experience level.  Seeing what all that experience has wrought this country, cleaning house would not be all that traumatic. In any event, the two term limit alternative would not solve the fundamental issues that are causing the problems. With a one term limit, the country would attract a higher level of candidates that would go to Washington for a limited number of years to serve, not to acquire power or wealth, and return home beholden to no one but their constituents and their conscience.

*title rights reserved

 

 

 

 

 

COMMON SENSE REVISITED*

 

THE IMPERIAL CONGRESS

 

“These are times that try men’s souls.” Thomas Payne opened his dissertation, Common Sense, with these seven words that, unfortunately, still resonate in today’s turbulent environment. Of course, Payne was writing of another crisis, in another era, but these immortal words are as appropriate in today’s political environment as they were in 1776. The country and its institutions are indeed in a crisis—a crisis of leadership and confidence, of trust and skepticism, and of self-interest and despair. While the nation should be coming together in these tumultuous times, it is being torn apart by the very people who should rise above partisan politics and provide the leadership to solve the problems that face the nation.

 

In his farewell address to the American people in 1961, President Eisenhower warned of the military/industrial complex. Today the country is faced with a more insidious and corrupt alliance—the congressional/lobby coalition. This alliance, of special interest groups and members of Congress, is so pervasive that it drives our domestic and in some cases our foreign policies. There is no law, nor should there be a law to prohibit special interest groups from petitioning Congress, but these groups should not receive  special treatment because they contribute to congressional and presidential elections. These national elections, funded primarily by foreign and domestic special interest groups, both directly and through PAC’S, are in some cases illegal or border on the cusp of legitimacy. This is the crux of the problem. Members of Congress   work for their own self interests rather than for the benefit of the people. 

 

 

The professional politicians in Congress have placed the quest for reelection above all else, to the detriment of the electorate. These professional politicians, many of whom have spent a lifetime in office, have squandered the country’s patrimony through their fiscal irresponsibility and malfeasance. Congress is responsible for several crises over the past 30 years. By not diligently exercising their oversight responsibilities and by enacting flawed legislation to accommodate special interest groups, Congress sowed the seeds for the several financial disasters that cost millions of jobs and untold misery. The electorate has, over the years, expressed their disapproval time after time by grading the Congress the lowest of the nation’s institutions, consistently in the teens or the low twenties.

 

For the past thirty years, Congress has presided over thirty budget deficits, to the tune that the country now owes $14.5 trillion dollars ---four times the total yearly tax receipts of $3.5 trillion and slightly less than the GDP of $15.4 trillion dollars. The interest cost on the debt represents almost 30% of the gross tax revenue of $3.5 trillion dollars. By 2014 the entitlement programs alone —Social Security, Medicare, Medicaid, and Obama care—will cost as much as the annual tax revenue of $3.5 trillion, leaving no money for the other departments of the government or to pay the interest on the national debt. By every measure, the country is insolvent.

 

Congress has raped the Social Security fund of $2.5 trillion dollars, spending the surplus from prior years, and they have the audacity to tell the public that the fund has 30 years of assets left when the fund is in negative mode in 2011, with receipts totaling less than the payouts.  The shortfall in receipts will have to come out of the general fund, further adding to the national debt.

 

Congress for the past 30 years has been negligent in resolving the vital issues (Social Security, Immigration, Education, Tax reform and   simplification, Regulation, Energy, Election reform). Those issues that Congress did address were temporary cosmetic fixes that mollified the electorate but have had no lasting impact. Congress is notorious for kicking the ball down the road in the hope that some magician will emerge and make all the problems disappear.

 

Congress has consistently placed itself and its well being above the law, granting themselves perks that are obscene when compared to the rest of the population. Quick to condemn other nations for corrupt practices, Congress has legislated several rounds of election reforms, and each so-called reform has contained enough loopholes to render the legislation ineffective, even to the point of legalizing some of these same corrupt practices. For example, the latest election reform legislation prohibits retiring members of Congress from using surplus campaign contributions for personal use. This legislation was hailed as a victory for the people; however, the fine print in the legislation says otherwise. While members of Congress can't use the funds for their own benefit, they have the liberty of awarding the funds to whomever they choose---their wives, children,etc. It is interesting to note, that in the past ten years, two Speakers of the House, were convicted of criminal activities and many members have been investigated for illegal activities. This form of legal corruption, however, is overshadowed by the moral corruption which permeates the Congress.

 

Congress has written the book on demagoguery as witnessed by their behavior during the financial crises. With the economy of the world in balance, some members of Congress turned the word bailout into a pejorative, igniting passions in the American people for their own political gain—being either disingenuous or ignorant of the calamity that faced the nation. It was not their finest hour. There are no profiles in courage in this Congress. 

 

The 543 members of Congress and the president hold the future of the country in their hands. No meaningful change can be legislated unless they act. The probability that this group will suddenly reverse course and begin to work for the people rather than in their own self interests is nil. The quest for re-election to these lucrative jobs is so great that it costs millions of dollars to run for public office. Only people of means or people beholden to others to finance their campaign can run for these coveted jobs. In the ideal world we would reject both. Candidates who owe their  election to special interest groups are, in a sense, indentured servants. Special interest groups do not finance campaigns without expecting something in return. Accordingly, it’s up to us, the people, to reform the system by which we elect the 543 people that represent us. The era of the professional politician must come to and end if this country is to resume its forward progress.

 

The next article will outline the changes that must be made in the national election process if we, the people, are to take the government back from the special interest groups.

 

 

 

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PERSPECTIVE

 

The Common Sense Revisited* series deals with the failures of our government—Congress and the several presidents that have guided the country over the past thirty years. Future blogs will address the vital issues facing the country--Financial crisis, Fiscal crisis, Entitlement programs, Regulation, Imigration, Tax simplification and reform--and the steps that must be taken to resolve these  issues.

 

The views expressed are neither liberal nor conservative nor an attempt to impeach either political party. There are enough facts to suggest that all share in the debacle that has led this country to its current state.  If there is a bias, it is expressed in these six words—a plague on all their houses!

 

* title rights reserved

 

 

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