Wednesday, August 28, 2019

Looking at Diversity from Another Angle

(first published in North State Journal 8/28/19)

A young person recently brought up a question he heard during an interest meeting about joining a local church.
“What is the church doing to diversify its membership?” another young man asked. “I look around our congregation and … it is pretty white!”
The pastor answered in perhaps the best way he could: “Our church doors are open to anyone who wants to attend. We are a church of peace and spreading the Gospel, and all who want to attend are welcome.”
“Freedom of opportunity,” “freedom of choice” and “diversity” can be congruent ideals but often are very different things in practice. The ideal world is where everyone can join any church; work at any business or live in any neighborhood they choose regardless of race or socio-economic status.
However, that doesn’t mean that everyone actually wants to attend, work or live in the same places, as say, you do. The essential freedom to pursue one’s own course of happiness underlies the very definition of being “American,” regardless of outcome.
In high school, I was invited by a close friend of mine, Ronnie Dowdy, to go to church with him. Ronnie was a huge football star at Durham Jordan High School and was heavily recruited to play at Notre Dame, Ohio State, Southern Cal and Penn State among about 100 other colleges, but he ultimately signed to play for the Tar Heels at Carolina.
Durham was at the forefront of the integration movement in 1968 which is why Ronnie and I were in the first fully integrated seventh grade class in the first place. At age 12, we really didn’t understand what was going on at the time; we thought we were just playing sports, horsing around and going to class with a lot of great people, white and black, whom we grew to respect, admire and love.
I went to his church and was overwhelmed by the energy and the spirit in the worship service. The hymns were sung with abandon and the outpouring of friendship and love at his church was real and genuine.
I asked Ronnie later if he wanted to go with me to my church, a Methodist church in Durham.
“Why would black people want to go to a white church?” Ronnie said with a hearty laugh. “The services are boring; the music isn’t very good and white people just don’t look like they are having any fun in church!” he went on to observe.
He had a good point. He and his family were making their own choice to not attend a white church as were the rest of their congregation.
There are reasons beyond simple appearances or headcounts as to why African American worshipers might not want to attend predominantly white church services that have nothing to do with race. That is why the issue of mandating “diversity” is such a difficult one. No elected official can “mandate” that every facet of everyday life in America has to perfect match the population percentages of each ethnicity in the community because each individual — white, black, latino — has the freedom to make their own choices each day.
If we could mandate perfect integration of the races, then the makeup of every business, church, government office and school in Wake County would adhere to these precise percentages: 72.40% White, 19.72% Black or African American, 5.41% Hispanic or Latino, 3.38% Asian, 2.48% from other races, 1.64% from two or more races, 0.34% Native American, and 0.03% Pacific Islander.
How impossible would that be to implement?
The beauty of America is its ability to allow everyone to have their own freedom of choice regarding which house of worship they attend or what line of work they choose to do. It would be a travesty to allow any elected official to use the coercive power of government to force people to fit into predetermined slots based on race as if they are just different colored M&M’s and not human beings.
Do You Want Better People to Run for Public Office?
Support the Institute for the Public Trust Today

Visit The Institute for the Public Trust to contribute today

Saturday, August 24, 2019

‘When We Hit The Point Of No Return, It Will Be Too Late’

(first published in North State Journal 8/21/19)

The Treasury Department announced last week that the budget deficit for FY 2019 grew to $866.8 billion in the first 10 months of the fiscal year, up 27% from FY 2018.
Headlines across the news media trumpeted the fact that the national debt was now 106% of GDP as if it spontaneously combusted out of thin air instead of being built up over the past 20 years during the terms of Presidents Bush 43, Obama and now Trump. The blame should be placed around the neck of every Congress and U.S. Senate convened since 2001, not on the executive in the White House.
How dangerous is this 106% of GDP statistic?
Former Federal Reserve Chairman Alan Greenspan testified regularly before the House Budget Committee and the Joint Economic Committee from 1991 to 1994.
Democratic and Republican Members would ask this thorny question as if asking permission to keep spending money or cutting taxes like drunken sailors:
“Dr. Greenspan: What is the point of no return when it comes to how much national debt we can accumulate before things get really bad for the American economy?”
National debt held by the public was 43% of GDP in 1991.
He would always answer in the same dry, matter-of-fact manner. “The monetary policies of the Fed and the fiscal policies of Congress must always be focused on the long-term health of the American economy. The optimal way to reduce deficits and avoid more debt is to restrain the rate of growth in federal spending to at or below the rate of growth in the economy. Raising taxes are not the preferred way to reduce deficits but if they are part of a compromise with serious budget restraint that leads to balanced budgets, the long-term health of the economy would significantly improve instead of deteriorate over time.
“Generally, when a nation’s national debt approaches 100% of their GDP, that is when we have seen nations start to suffer in history. No one really knows what the point of no return is precisely. All I can tell you is that when we hit the point of no return, it will be too late to do anything to avoid the consequences of any fiscal irresponsibility today.”
In FY 2018, tax revenues increased a healthy 3% over 2017 tax receipts. The problem is spending. Total federal spending increased 8% over the same period of time.
Is America at the “point of no return” today with a $22 trillion national debt at 106% of GDP?
The real number to worry about is the debt held by the public, which according to CBO is 78% of GDP. Debt held by the public is “real” debt on which interest had to paid regularly in cash. The rest of the debt is considered “intra-governmental” debt such as the transfers on paper between the so-called Social Security Surplus in the past and the regular budget.
CBO does not consider such intragovernmental debt to have any real economic impact today, which is why they look at the 78% of GDP figure instead of the 106% number. The economic impact that will take place is in the future when younger workers, mostly millennials, will be asked to pay 35% more in payroll taxes to fully fund the benefits boomers will be expecting in retirement. If the millennials rebel, as they most likely will, boomer retirees will be forced to receive lower Social Security and Medicare benefits up to 30% below what they thought they would be receiving.
America may have a full-fledged generational political war before excessive debt tanks the American economy.
Unless we arrest our deficit-spending through serious budgeting restraint and entitlement program reforms, our publicly held national debt will exceed 144% of GDP by 2049 according to CBO.
Which is definitely far beyond the “point of no return” Alan Greenspan warned us about three decades ago.

Do You Want Better People to Run for Public Office?
Support the Institute for the Public Trust Today

Visit The Institute for the Public Trust to contribute today

Wednesday, August 14, 2019

Stock Market Jitters? Remembering A Stock Market Earthquake

first published in North State Journal 8/14/19)
People have been wringing their hands over the past several weeks about the volatility in the market, especially the day when the stock market fell over 800 points on Aug. 5.

Many attributed it to President Trump trying to force the Chinese to play by fair rules in international commerce. The 3% dip in the stock market was a sign to them that he doesn’t know what he is doing and is just costing a lot of us a lot of money with his incompetence.

The 3% drop last week was a jitter. If you really want to know what a stock market crash looked like, Black Monday, Oct. 19, 1987, was an 8.6 earthquake by comparison.

Early that morning, most of the Republicans in Congress who played golf showed up to play in an annual fundraising event, the Bob Michel golf tournament, to raise money for the next campaign.

We were scheduled to tee off in a shotgun start around 9:40 a.m. Former Congressman Alex McMillan and I were in the same foursome with the chief legislative counsel for the Securities Industry Association, Jack O’Rourke, one the smartest and best lobbyists I ever met in Washington.

Jack met us on the first tee with a somber look on his face. “The stock market opened down 100 points” he said. Congressman McMillan, a former investment banker and chief executive officer for Harris Teeter Supermarkets, tried to calm Jack down and said, “Probably just a temporary dip, Jack.
The market will probably recover by the time we make the turn.”

It didn’t. By the time we made it to the clubhouse after the front nine, we found out the market was down 300 points.

“It will probably recover by the end of the round” everyone at the clubhouse said in unison as they ordered food and drinks for the back nine.

Two jets were flying overhead across a beautiful clear deep powder blue autumn sky as we putted out on the 18th hole.

While we all shook hands after the round, Congressman McMillan ruminated out loud, “Well, Jack, it looks like there are jets still flying out of Dulles Airport and I don’t see a mushroom cloud over Washington, D.C., so it must not have been quite the catastrophe we all were worried about.”

The stock market closed down that day 508 points. It had plummeted 22.61% from the previous day’s close of 2246.74 to 1,738.74 in one day. Counting the 9% loss during the previous week, the market had fallen over 31% in a week.

There was a palpable sense of doom in the clubhouse after the round. No loud bragging about their game, no celebration of the winners. There was more straight whiskey being consumed without mixers or ice cubes than anyone could remember at any event in recent memory.

As horrific as Black Monday was, and despite the fact that from 2008 to 2010, we suffered through the worst recession since the Great Depression; we experienced the largest attack on American soil on Sept. 11, 2001, since Pearl Harbor and a myriad of economic stresses domestically and overseas since 1987, the market is now trading at levels 10 times higher than Black Monday.

If we can keep the socialists from destroying the American dream, the stock market could grow 10 times more to get to the 270,000 level by 2049.

President Trump may be unconventional, but he is addressing serious unfair trade practices by the Chinese government for the past 40 years and trying to help American businesses and workers regain what is rightly theirs.

Suffering through several days of relatively minor stock market volatility by comparison to Black Monday in order to rectify the trade imbalance and injustice with China seems to be a small price to pay.

Do You Want Better People to Run for Public Office?
Support the Institute for the Public Trust Today

Visit The Institute for the Public Trust to contribute today

Thursday, August 8, 2019

We Need To Learn More From The Civil War, Not Less

(first published in the North State Journal 8/7/19)

At a time when our very real history in America is under siege from those want to expunge any mention of the sins of our past, Ron Chernow’s well-written and researched biography of former Union Army General and 2-term US President Ulysses S. Grant is an important book to read.

Eradicating all mention of slavery in the full context of American history would render our shared life together as “fake history”, not “real” history. There is no way to talk about how great it was that “Lincoln freed the slaves!” without bringing up how Africans were brought to the US in bondage in the first place.

If you listen closely to the abolitionists of our collective US history because slavery existed in the beginning of our Republic, they really want to ban all mention of the so-called ‘peculiar institution” of slavery. The only mention of it presumably would be in footnotes with the comment that “slavery was terrible and perpetuated by a rich, ruling class of entitled white men in the Southern aristocracy”.

Try to imagine what would be lost if we stopped talking about slavery in the South altogether. We would lose perspective on how far America has come since then in terms of racial integration and diversity since 1865.

We would lose the fact that 2 million white Union soldiers fought to preserve the Union and eradicate slavery from the South, 350,000 who died doing so.

Why would leaders such as Abraham Lincoln and white abolitionists in the North sacrifice so many soldiers to the cause of preserving the Union while ending slavery unless it was the right thing to do morally, spiritually and ethically?

If we stop talking about slavery and the Civil War, historians 10,000 years from now would look back on the United States of America as a small blip on the scale of human progress instead of a seminal event where a free society of mostly white people, the Union, prosecuted a war that freed 3 million black people from slavery instead of re-enslaving them as ancient Romans and Greeks regularly did.

Abraham Lincoln and General Grant employed revolutionary enlightened forward-thinking primarily as a tool to expediate the end to the war but later both adopted as the right thing to do as a matter of policy.

Mid-way through the first year of the Civil War, Chernow writes:

“A central aim was to have newly liberated blacks work on abandoned plantations, picking cotton and corn that could be shipped north to assist the war effort. ‘We together fixed the prices to be paid for negro labor”, Grant recalled. “whether rendered to the government or to individuals”.
It was a remarkable moment—the sudden advent of a labor market for former slaves, who could now be rewarded for picking cotton. Grant found himself overseeing a vast social experiment, inducting his black charges into the first stages of citizenship. Taking the proceeds from their labor, he created a fund that was “not only sufficient to feed and clothe all, the old and young, male and female, but to build them comfortable cabins, hospitals for the sick, and to supply them with many new comforts they had never know before.”

Think of it as the first ESOP corporate takeover in American history.

“This brand-new Grant never wavered to his commitment to freed people” Chernow went on to say.

Not as Lieutenant General of the Union forces. Not as President of the United States for 2 terms from 1869-1876 when he mercilessly attacked and severely diminished the Ku Klux Klan throughout the South and implemented Reconstruction along the terms of enlightened racial relations that he knew President Lincoln would have pursued had he survived to serve a second term and possibly more.

We should never forget the lessons of slavery and the Civil War. Perhaps we should try to teach it better to our children.

Do You Want Better People to Run for Public Office?
Support the Institute for the Public Trust Today

Visit The Institute for the Public Trust to contribute today

Thursday, August 1, 2019

This Is The Worst Budget Deal Ever!

If you love fiscal sanity, prepare to be sorely disappointed this week. Again.

The Committee for A Responsible Federal Budget (CRFB) calls the most recent budget deal expected to be passed by the Senate and signed into law by President Donald Trump this week “The Worst In History.”

That is saying something. There have been plenty of budget deals that were flat-out terrible. All the bad ones increased deficits dramatically and, therefore, our national debt. Only a few — the 1990 Budget Agreement and the 1997 Balanced Budget Act mainly — did anything to arrest the steady inexorable climb to $22 trillion in debt today.

Elected politicians used to at least try to give credence to their claims they were serious about “balancing the budget.”

Now they don’t even try anymore.

According to CRFB:
  • President Trump and Congress will have increased discretionary spending by 21 percent over his first term insuring annual trillion-dollar deficits into law for a long time.
  • President Trump said after signing the 2018 omnibus bill that exploded discretionary spending that he would “never sign another bill like this again.”
  • Republicans used to insist that a dollar of spending had to be cut for every dollar increase in the debt limit.

Before that, in the 1990s, a majority in Congress made up of Republicans and Blue Dog Southern Democrats forced Congress and President Bill Clinton to abide by the following simple rule of PAYGO (pay-as-you-go):
  • For every dollar of increase in new domestic or defense spending, a dollar had to be cut in some other existing program.
  • For every dollar increase in new proposed entitlement spending, a dollar in a new tax had to be raised on someone to pay for it.
  • For every dollar in new tax cuts, a dollar had to be found in savings in entitlement programs through budget reconciliation legislation to make it “budget-neutral.”
The end results of such budget discipline from 1990 to 2001 were four budget surpluses from 1997-2001 and $600 billion of federal debt retired. The national debt owed to the public in 2001 dropped to just over $3 trillion.

The cardinal rule to climb out of any financial hole is to stop digging the hole deeper first. That means stop spending more money on expanding existing programs or starting new ones which Presidents Bush 43, Obama and now Trump, along with complicit members of Congress and Senators have failed to do for the past two decades.

Ross Perot, who recently passed away, ran for president in 1992 and 1996 as an independent. He was famous for two things: “The giant sucking sound you hear is jobs going to Mexico because of NAFTA!” and, essentially, “It is the national debt, stupid!”

He did not win a single electoral vote. He did draw national attention to the dangers of never balancing the federal budget. A Republican Congress worked with President Clinton’s chief of staff, Erskine Bowles of North Carolina, to pass the Balanced Budget Act of 1997 that birthed the only four budget surpluses we have seen in most of our lifetimes.

Perot helped make voters ready to listen to federal spending restraint.

Are we going to wait for another economic calamity such as what we experienced from 2008-10 to get our fiscal house in order? Everyone thought that catastrophe was going to trigger an era of fiscal sanity.

They were wrong; President Obama and the Democratic Congress from 2009-11 went on an orgy of spending that put any real orgy in ancient Rome to shame.

Where are our brave and smart elected members of Congress and senators who understand budgets, economics and who can count? Why don’t they produce a budget that 218 representatives in Congress and 51 senators can support to save us from this colossally stupid build-up of debt, the largest America has ever amassed in peacetime?

Who is going to be the next “Ross Perot” 2020 at either the congressional, Senate or presidential level?

(first published in North State Journal 7/31/19)

Do You Want Better People to Run for Public Office?
Support the Institute for the Public Trust Today

Visit The Institute for the Public Trust to contribute today