Double Dip for the U.S. ** A Way Out or Dire Consequences

IMG_3685Today’s economic news was horrible and could be a foretelling of much worse to come. The GDP for the 3rd Quarter of 2012 shrank .1%. For those that arent familiar, the GDP is the gross domestic product which is the measure of the entire economy and its performance. A recession is an economic term used for 2 consecutive quarters of shrinking GDP. Thats why the Great Recession technically ended in June 2009, but the growth has been so slow it has never felt like a recovery. With the historic levels of high unemployment we would need 8 quarters at 4% growth to start making a serious dent and getting people back to work. Instead since June of 2009 we have had 1.8 or 2% GDP which is why it has never felt like a recovery and why the number of unemployed people has not dropped in over 2 years. One more quarter of decline and we will be back in recession.  That is not good.

What caused the shrinkage in GDP, especially since the quarter before was 3.1%? Many things contributed to this decline. Government spending dropped the largest amount in 40 years; businesses continued not to invest in new hires, the speculation of U.S. default; trade was also down 5.7%. The reason this is such a serious predicament is because the $1.2 Trillion sequestration starts March 1; this will lead to drastic cuts in all government programs and could sharply lower the GDP yet again. This also has a trickle down effect; more people will lose their jobs, more people wont be hired, which means more government money will be needed to be spent. So the budget cuts will backfire and end up costing a lot more than it would ever cut. Consumer spending accounts for 70% of GDP; the Consumer Sentiment survey plummeted while Washington was posturing, making threats and thumping their chests. Their words have serious consequences to every day people, hiring companies and they set the tone for what people will do with their money. Also, this uncertainty about taxes has made businesses not hire people. This is a disastrous place for the U.S. to be in since we are doing nothing about the problem, the problem is getting worse and worse.

For those who think we need fiscal responsibility, we need to cut the deficit and long term debt; you are right. We do need to do  all of that, its imperative to the future of our country. So there is no argument by me that we have to deal with this very real problem. The question is when and how. What we are on a plan to do, enact the sequestration, would be disastrous. As we saw from last quarter one of the reasons GDP shrank was the sharpest drop in government spending in 40 years. If we cut more now we are going to see more of the same. Before anything can be done the economy needs to be growing. We need to get back to 3 or 4% GDP growth. We need the 10 million longterm unemployed people getting jobs again. What that would do is bring in much more revenue to the government,  thus lowering the deficit. Cutting back on government now will raise the deficit with unemployment insurance and other programs. So cutting now will put us in a worse place for our future. Whats needed now is a robust plan of action to get people back to work. Its been estimated that if we can raise GDP by 1% per quarter, after 10 years we will save $4Trillion, that is monumental.

So, how do we accomplish this? First I call on Barack Obama to meet with the congressional leaders of both parties to have a firm message for the country and the world that the United States of America will never default on any of its debts and that we will have a plan for robust growth as well as serious measures to lower the deficit, debt and balance the budget. A united front from all the leaders in Washington would send a tremendously strong signal of our investing in our future. That alone would boost confidence in a huge way. Next, the top priority must be getting people back to work; offer companies tax breaks for each longterm unemployed hire, create public/private infrastructure  banks to fix our crumbling airports and highways. Then we should invest the money we were spending in Iraq and Afghanistan and put $1Trillion dollars of new spending for this year and another $Trillion for next year. This will boost the economy, GDP, tax revenues, get people working again and in the long run lower the deficit and longterm debt. When the economy is growing at a serious clip we should enact cuts where cuts can be made. Again Obama and the senior leaders of congress should hammer out that grand bargain now. Yes look at entitlements, means testing, closing loop holes. Do it all.

A united Washington saying we will all do what it takes to strengthen the economy; we have a plan for reducing the debt and deficit would fill the world, the country and business leaders with confidence. Next the government investment would strengthen and grow the economy while bringing in more revenue. As the economy strengthens we put the cuts in effect and the Grand Bargain. Its win/win for our country.

If we do nothing expect to see a double dip, which could be much deeper than 2008; expect to see soaring deficits for decades to come. Expect to see more unemployed, more poverty. Its our choice. Lets make clear what we want.


The Latest Studies on Smoking ** What They Mean ** How to Quit

IMG_1252Five decades after the U.S. Surgeon General first warned of the hazards of smoking, researchers reported fresh evidence on Wednesday of tobacco’s devastating toll on the health  of the U.S. population — and of the benefits of quitting. This, from The Wall Street Journal, was one of the articles that was reporting new studies on the hazards of smoking, its devastating effects on the smoker and anyone around them and how quitting at any time is a good thing to do. So you might ask, why dont people quit? The dirty little secret that almost no one talks about is that nicotine is more addictive than heroin. The major tobacco companies know once they get someone to start smoking for most its virtually impossible for them to stop smoking. Cigarettes are the only product sold in the U.S. that when used as directed kills you. I understand the argument from people who feel government shouldnt have the right to interfere with what people want to buy. But I dont buy it.

A little history here is very interesting. If anyone has ever heard of the tobacco heiress Doris Duke, who was the richest girl in the world when her father died; and when she died in the 1990’s she died one of the wealthiest women in the world. Doris was the tabloid fodder of the 1910s, pretty much until she died. Her father, Buch Duke built an empire on the sales of cigarettes. His fortune and power was so strong and deep that his company had to be broken up. The still left Duke the richest man in America. While his fortune was growing daily from the sales of tobacco he urged young Doris not to smoke. Buck Duke knew in 1913 that smoking cigarettes led directly to lung cancer and other serious health troubles. In fact, before he died he diversified his holdings to include Duke Power and other large entities because he thought surely the American public knowing the harmful effects of smoking would soon stop and he wanted to make sure Doris was provided for for her whole life.

Fast forward 100 years and the big tobacco companies still deny the claim that cigarette smoking can be harmful to your health. This disgusting attitude of profit being more important than human lives is another topic. There has been some significant progress made; tday 44 million Americans smoke, thats 19% of the population. That figure is down from 42% in 1965. Todays studies show smoking will take 10 – 12 years off an average persons life span; they show if you quit before 40 you are much better off that quitting later. But the studies say no matter how old you are, quitting is good for your health. Why arent more people quitting? Because they can’t. They are physically addicted to a substance that has such a strong hold over them that 90% of people trying to quit fail. Many good things have been done, especially here in NYC. For a decade now no one can smoke in any bar or restaurant anywhere in the City. There is no smoking allowed in almost every building in NYC. All of this is good for the non smoker so they arent subjected to second hand smoke. Its also good for the smoker who has to go out of their way to smoke, which in turn makes it possibly less likely they will smoke as much. Also, Mayor Bloomberg gave away for free millions of smoking cessation programs that helped millions of NYers to stop smoking.

My biggest worry moving forward is stopping young people from starting smoking. Because little do they know at age 14 they are starting something that will be virtually impossible for them to give up. So, yes I agree you can not ban the sale of cigarettes; I recommend removing all labeling from boxes or cartons. They have talked about showing gruesome pictures of dying smokers on the packs, I think blank white packs would be more effective because they have no brand. Everything possible should be done to keep young people from starting the habit.

For adults I would advise free smoking cessation programs for anyone that wants them; I would add free counseling with that to properly use the cessation programs or tools. Where does the money come from. It comes from cost savings in the future. Just like with all healthcare anything ‘preventative’ should be free. Because the cost to prevent a disease is much much lower than the cost to pay for the disease once it hits.

A tip for people that want to quit: When you smoke you think you are enjoying it, but you are not. Your body is addicted to nicotine, when nicotine levels get lower you start to crave a smoke, when you do smoke you feel better because you are bringing the nicotine levels back up; in other words feeding the habit. It takes about 3 or 4 days to get the nicotine out of your system for good. Then you face the equally large challenge of psychological addiction.

Some Thoughts on Inauguration Day and Beyond

Italy2011 448As we all know today is the public inauguration for President Barack Obama for his second term. He was actually sworn in yesterday because the Constitution dictates swearing in is always January 20th, today is the public event. Of course much of the news today is about the events of today; looking back at other inaugural speeches, ceremonies, designer gowns. A few thoughts come to mind:

  • Today should be a new day in America, a day where we can turn the page and start anew. A day where we can all come together and have optimism and enthusiasm for the next four years. The thought of what can be accomplished should excite us all. The possibilities could be endless. What if we could finally create more jobs; have affordable healthcare for all; be energy independent; make renewable energy common place; rebuild our crumbling infrastructure; invest in the future of our country with education, immigration, equality for all; grow the economy; figure out a Grand Bargain for longterm American prosperity. Today is the day we need to be thinking about making all of that a reality. 
  • The United States of America is a shining example of democracy; our history has shown that no matter how ugly the election cycle was we always have a peaceful transition of power. The outgoing and incoming presidents ride together to the inauguration. Peaceful transition of power is not what takes place in other parts of the world, not by a long shot. Many have military coups or the mass slaughterings we see in the Middle East. Today is a day to be proud to be an American and proud of the way our democracy works.
  • I would like to take this one step further, the entire country should realize that we had a vote, the outcome has consequences but everyone needs to stand behind President Obama. His successes are our successes. I would like to not only see all Americans stand behind the president, I would like to see all members of Congress, all previous presidents attending the inauguration as well. George W. Bush released a statement saying he would be helping his father and neither would be able to attend. I respect that W. wants to stay out of politics and not pipe in on every decision that is made. However, I find it unacceptable that he is not coming today. He should be there, with his head held high. He was the last sitting president and his presence would show the Country and the World the solidarity of the United States. Mr. Bush’s appearance could have shown his party that no matter what your differences are you always stand behind the President of the United States. Mr. Bush could have made such a statement, especially to the bitterly divided GOP party, just by coming and sitting in the front row. His choosing to sit this out was wrong for the him personally and wrong for the Country.
  • The GOP should look at today as a fresh start for their party as well. But all signs are signaling it won’t. Paul Ryan told a crowd that he was going to the inauguration because it was an obligation of his office. He got booed when he said that. What a horrible thing to say. The chance to witness history, as any presidential inauguration is, as most Americans would love to go and witness it; and to tell a crowd he is going because of obligation. Not only is that something a sore loser says its also shows an un-united front to the public and world. It seems that any GOP member of Congress that isnt required wont be going. That is also unacceptable. We elect and pay these people they should be there to stand up for their Country, their President, and our traditions.
  • I am hopeful of the next four years; I have some advice for our politicians. First is a general one to everyone: Get Along; stop bickering and do the people’s business! Mr. Obama: Reach out more, make more relationships, invite GOP over weekly. Do whatever it takes to try to make a better relationship with both your party and the GOP. I believe your not having done this in your first term added to the gridlock. You have a job to do, the hardest job in the world actually, being friends with John Boehner and Mitch McConnell will only make your life easier. To the GOP: open your mother-fucking eyes, look around to see what the country wants and stop being ruled by the extremest part of your party. Stop pushing women, hispanics, gays, unemployed away from you. Stop being a road block, start helping with solutions. Putting more people back to work will lower the deficit. We need a balanced plan for longterm financial stability; that means you need to compromise.

It’s too early to have a toast but later on we should all raise a glass to President Obama and The United States of America and the possibilities of what we can all do together!

The Catastrophic Effects of Longterm Unemployment Are Already Starting

IMG_0094Longterm unemployment is one of the biggest problems facing our country yet no one mentions it. The media hardly covers the situation. President Obama mentions it in passing but hasnt done anything since a half hearted Jobs Bill in September of 2011. John Boehner, Harry Reid, Nancy Pelosi, Mitch McConnell never talk about or suggest more ways to get people back to work. According to The Wall Street Journal the amount of people who are longterm unemployed hasnt been seen since the Great Depression and the length of  time these people are unemployed is unprecedented, even worse than the 1930s. The unemployment rate is dropping because people are giving up and dropping out of the workforce. Last month it was 300,000; the month before it was 800,000. We have the lowest workforce participation in generations. Yet all of this is ignored while the GOP plays hostage taking games with defaulting on the U.S. debt. When they tried the same stunt last year it drastically slowed the economy, slowed hiring and added to the deficit since more people were laid off and fewer people found jobs. I actually dont blame the entire GOP; I put direct blame on the tea party. Their unwillingness to come to a Grand Bargain is one of the sources of the dire state of hiring. I do believe the party leaders, like John Boehner and Mitch McConnell and others would strike a compromise for a Grand Bargain. But the tea party won’t vote for it so the party leaders are stuck. The irony, of course, is that the tea partys goal is to lower spending, but their actions make the government need to pay and borrow more because all of this posturing and uncertainty makes companies hire fewer people.

There were two disturbing articles in todays papers that reflect the effects of longterm unemployment.  The Washington Post ran a front page story on how Americans are draining their 401k and IRS accounts; I know and have been in contact with many on twitter who have done the same. This is because there is no financial help from the government after 99 weeks and more than 10 million have been unemployed longer than that. The second article, on the front page of the New York Times stated how more and more people are going deeper and deeper into debt. This I also attribute to people running out of money, the longterm unemployed who cant find jobs are running out of money. Both of these articles show the start of what could be a complete catastrophe in the coming years and decades for the United States. What is going to happen to these people once they run out of their IRA and reach their credit limit? The answer to that question is extremely scary and something that is not talked about in the media, its ignored in Congress and by the president. There was another recent article I read in WSJ that said that if stimulus was provided for enough people to get back to work and raise GDP by just 1% point, costing maybe $400 Billion, the taxes from those people working would save the U.S. Treasury $4 Trillion over 10 years. Thats staggering, yet its ignored.

What needs to happen is action. Our paralyzed government needs to actively help longterm unemployed people get back to work. People who are longterm unemployed dont want to have to live off of government support, no one does. They want to work, bring home a paycheck, bring purpose back to their lives. It is in our reach to create programs, tax incentives, stimulus, whatever it takes, the goal of getting these people back to work is attainable. As I have said before, in my view the tea party with their non compromising actions are treasonous; I would like to see them criminally prosecuted for deliberately tanking the U.S. economy. Threatening default, something that has never happened in the history of this country, is a criminal act. Working out a Grand Bargain is what should be done. All of this bickering is a waste of time. They need to sit down and get the job done. Every day that goes by thats wasted with threats is another day another longterm unemployed person takes money out of their IRA, goes deeper in debt to buy food that they cant afford.

Fast forward 20 years from now. If nothing is done to help these people this country could be littered with homeless people, more violence from people who are angry at the world, or people wanting to feed their families. Or we really could become a welfare state and government spending would have to skyrocket to help these people who went from longterm unemployed to destitute. No one wants to see that happen. The financial and psychological effects of longterm unemployment are disastrous.

You have 25 million people who are unemployed or under employed; you have more than 10 million people who have been out of work for over two years. They all want jobs. We are the richest nation on earth with the worlds largest economy. We have the resources to help the longterm unemployed find work. Now we need the will of our government to take action.