Wednesday, August 31, 2011

Where are America’s Housing Market and Unemployment Rate Heading?

Keywords or Terms: Housing Market; Fannie Mae; Freddie Mac; Unemployment Rate; Housing subsidies; Nominal Interest Rate; Home Equity Loans; Government Revenue; Loan-to-value ration threshold; Employment Data; Public Employment; Private Employment; Economic Performance Indicators; Veteran Benefits; Social Security Benefits, Medicaid and Medicare Benefits. 

The challenging housing market and high unemployment rate in America inspire a review of past policies and some possible recommendation on the best options available to government to avert Economic Armageddon due to the slumping housing market and painful unemployment problem. Given that no true solution for the depressing housing market and unemployment rate can be complete without addressing government subsidies in the housing, banking and finance sectors, it will be premature to make recommendations that are short-term in unraveling current challenges. Further, it will be superficial to expect long term changes in the housing glut without addressing the underlying issue of subsidized home ownership strategy of the past decades, through subsidies to the US Mortgage Market, via Fannie Mae and Freddie Mac. As Banks refine their lending practices, making home owner’s credit tighter and the mortgage market a little more stable, with huge inventory of foreclosed homes, it may be time for the Federal Government to consider policy strategies that lessen its involvement in both banking and house ownership subsidies to avert the continued slump in the housing market. The blog today undertakes a discussion of strategies to counter the slump in the housing market and the unyielding unemployment problem in America.

Just as it seems infinitesimal at this time for the Federal Reserve to keep nominal interest rate at zero during high unemployment, the expectation that employment will grow without clearing of the housing glut in the market is probably over simplistic and whimsical. The disproportional distribution of the housing glut across many states in the union, complicates the tax revenue base for some bigger cities and markets with huge inventory of foreclosed homes. As the housing glut continues to grow partly due to high unemployment, it maybe necessary to pull out the mortgage interest deduction at 50% rate and initiate the taxing of rental property income to a threshold of 80%. Such policies are likely to increase government revenue, pull back government subsidy to the housing market and assist in the clearing of foreclosed homes in various markets; hence affording for increased activities in the building industry and some form of revenue base for many cities that are hurting due to poor tax base and over inventory of foreclosed homes.

The owner-occupier housing strategy buttressed by full mortgage interest deduction at the end of the year has created a high ratio of property ownership in the recent past. While very helpful to assist in increased home ownership, the challenges of the time demand that we look over most responsive public policies to effect immediate changes in the housing market. It is probably safe to assume that at the peak of the heated housing market, home ownership in the United States reached up to 70% of households. In hindsight, it is probably not the best policy to follow, even though; it places the country at the highest rate of home ownership in the world. The reality of a public policy that deregulated lending practices in mortgage financing and allowed banks to get into dubious derivatives without necessary oversight, is probably part of the reasons why the economy is in a slump and unemployment, out of whack. 

The competitive landscape that fuels cautious consumer behavior was absent just before the collapse of the housing market. Banks and finance houses manipulated screening, administrative and maintenance costs of mortgage loans. The net effective cost of underwriting loans became so small for banks as most  maintenance and administrative costs of mortgage underwriting were defrayed to Fannie Mae and Freddie Mac, who in turn seeded the risk involved in most of these underwriting to government bonds. The less than stellar practice that allowed home-owners to borrow against equity in their homes may work well for high income and rich folks, but it has been a disaster for the low and middle income earners, majority of whom became first time home owner under a vastly deregulated finance and mortgage market. The challenge now is how to restore confidence in the mortgage and housing market.

The insolvency of many banks and insurance companies in the beginning of the recession may partly be blamed for government subsidies of home ownership. The fact that Fannie Mae (Federal National Mortgage Association) and Freddie Mac (Federal Home Loan Mortgage Association) under-wrote the lending risks involved in home loans carried by commercial banks and other mortgage finance houses, created an impression that government guarantees aggregate credit risks that is undertaken by the financial institutions. Further, the fact that the bond market financed to some extent, Fannie Mae and Freddie Mac, allowed some banks and a few finance houses to avoid due diligence, which in turn encouraged frivolous mortgage products, which some banks and finance houses probably knew were dubious and criminally culpable, since the end costs of the risk were eventually shifted to taxpayers, but which those banks and finance houses could hardly pass over in the heat of the mortgage debacle.

The implicit federal guarantee of Freddie Mac and Fannie Mae, made effective rate of borrowing for home-ownership artificially low, as these pseudo-governmental institutions, were able to borrow at marginal cost over the treasury bills rate. Although they may want to deny it, mangers at Freddie Mac and Fannie Mae understood that an insolvency of their operations may cause disruptions in the whole financial system; however, they hardly felt any responsibility to adequately inspect all the devious derivatives or bundling from commercial banks and mortgage finance companies doing volume business in real estate lending. With unusual increases in aggregate mortgage delinquency from rising unemployment and sluggish economy, it was just obvious that foreclosure rates were going to go on the increase. With many banks and mortgage finance companies undertaking huge risks, with products like 'zero down, zero payment' for the first 12 months, 'roll into mortgage principal, interest costs of the first six months of a loan', and no one bating an eye-lid at Fannie Mae and Freddie Mac, because these pseudo government institutions considered their securities as substitutes or close to substitutes, for treasury bonds, no wonder the economy went into a spiral when the housing market bottomed out in the middle or at the end of the recession.

Many Americans are still trying to understand what was going on in the mortgage market and what exactly was the contribution of devious financial institutions, whether there were duplicities or omissions of any sort that may be considered criminal; however, as of to date, no one has gone to jail for the size of collateral deviousness involved in the mortgage risks taken by many banks and financial institutions. The tricky thing is, no one has been able to explain truthfully, how these duplicity and criminally culpable negligence have contributed to many Americans loosing their jobs during the recession. Many households have defaulted on their mortgage loans and a few have actually stayed put or walked away, deciding not to pay any more mortgage because their houses had lost too much value and probably are now worth less than half of what they paid for them at the height of the mortgage bonanza or boom. It is probably necessary to see that a few in the financial and mortgage industries went to jail for their complicity, and contribution to the recession; it is probably doubly necessary to investigate the extent to which executives at Fannie Mae and Freddie Mac knew of the devious derivatives sold to them, and which they in turn refinanced in the bond market. Without some form of accountability, it is probably unlikely that this or similar events in the mortgage industry will not repeat themselves.

Fannie Mae and Freddie Mac seem to have been a success story in helping Americans own their first homes, prior to the deregulation of the finance and housing markets. The fact that precipitous deregulation of the financial sector of the economy under President Bush afforded all types of devious marketing and transaction inadequacies, make it imperative that the fault of the tanking  America’s economy be laid squarely at the door step of the last Republican President. Dubious financial instruments or portfolios and renegotiated repurchase agreements littered the banking and mortgage industries, yet no one is paying for these. Imagine the absence of implicit guarantee of Fannie Mae and Freddie Mac for underwritten mortgage portfolios; wouldn't banks have been less frivolous and cautious as they underwrote many of the mortgages that are now in foreclosures? The fact that Fannie Mae and Freddie Mac, pseudo government entities, considered their debts just as safe as treasury bonds, probably led to the debacle in the housing market. It is time to undo the subsidies to the housing market in terms of direct interest rate write-offs for home ownership, to help correct for part of the problems associated with the housing glut and repercussions of high unemployment.

To get away from the housing slump, it may be necessary for government to tax the banks, insurance and mortgage finance companies and use revenue from these financial institutions’ to buy private mortgage loans that were dubious in writing. Use aggregate house values in each market as basis for valuing each delinquent private mortgage loans bought over and insist that newly purchased mortgages involve compulsory mortgage loan insurance to 100% value, plus 50% additional insurance coverage to be carried by banks and insurance companies underwriting mortgage loan for the first ten years. The additional insurance to be carried by banks must be sourced from private insurance companies not Fannie Mae or Freddie Mac. This arrangement will discourage lousy mortgage products marketed by banks and mortgage finance institutions. speculation in the housing markets by short-term investors, seeking to make a buck during the heated housing market.

To deal with the current foreclosure crisis, it is time to evaluate the trend in the liquidation sales revenue of foreclosed homes in various market regions and compare them with market prices of repeat sales index across regional markets. This will allow the government, banks and financial institutions appreciate the average losses in various market and use this as an index for underwriting future loans on mortgage products. It is apparent that the realistic values of homes sold at the peak of the housing boom or mortgage debacle was hardly based on the realistic value of each home sold. It is known that many home owners avoid foreclosures by either selling their homes, refinancing them or paying off the arrears on the mortgage. This edging behavior is likely not to stop except there are incentives for home owners provided by the lenders. The volatility of the housing foreclosures depends on the speediness of either of the latter three actions in the various market regions. Areas with high unemployment has suffered tremendously from the speediness with which either of the three actions were undertaken by home owners. The removal of government subsidies of mortgage interest is to make carrying mortgages at higher loan to income threshold less attractive. Effective interest rates has the tendency to weed out those home-owners likely to default from entering into mortgage contracts that are excessive for their income threshold.

New data on employment has not been very promising. Though companies are recruiting and hiring, the employment rate is not keeping pace with the number of people seeking work.There is going to be a need to re-energize employment by investing in programs to encourage increased and stable employment in virtually all sectors of the American economy, including expansion of public employment. The argument that the private sector creates jobs is well taken; however, cities, counties and state governments have been shedding jobs in recent years at unprecedented rate. Employment programs must not only address increased private employment, there is need to create jobs for teachers, fire-fighters, police and other public employees, if we are to revert the trend of the vehement unemployment rate. Unfortunately, it is fiscally unlikely that the country can afford this choice; however, if Republicans are willing to play ball it is very possible to accomplish this end in the coming twelve months and more.  The United States Congress must get on board now, if the unemployment problem is not going to end up being a political fiasco in the coming general elections.

The job creation strategies anticipated to be released by President Obama must include the following, if a dent is going to be made in the unemployment problem in the country: 1) Subsidies for increased private employment, including investments in schools and college buildings, waterways, airports and highways redevelopments and expansions; 2) ample public employment to be financed with increased government revenue base, including jobs at state, county, towns, cities, parishes, burroughs and similar local governments; 3) investments in social support programs for Afghanistan, Iraq and Libya veterans; 4) private and public reinvestment initiative in health support programs for infants, adults and vulnerable groups; and, 5) encourage the Federal Reserve Bank to increase the nominal interest rate to at least one percent to see what difference this will make in the market place. One thing to definitely avoid and to campaign against, if he so chooses, is an obligatory balanced budget initiative as advanced by the Republicans, as this will only stifle government's ability to react to emergencies as the recent floods, hurricanes and storms in the North East, funding of social safety net as the Social Security Benefits, Veteran's Benefits, Medicare and Medicaid. The aggregate welfare effect of obligatory balanced budget initiative is close to negative, no matter what Republicans may continue to espouse.

Finally, there is the question of whether government subsidies contribute to federal deficit?  A very credible answer to this question is simply this: If the private sector continues to sit on tons of cash in the bank without investing in the economy, the federal government has the obligation to invest in the economy to prevent further deterioration of the economy. The essence of government spending is to force increased economic activities that can help expand the economy and create jobs. One way for the nation to succeed at this time is to ensure that economic growth and jobs creation are fore-front in the list of things to be done to help expand national income. For instance, Federal Government needs to be innovative in its approach to resolving the unemployment problem; and, in its effort at measuring economic performance variables or indicators, including how stimulus spending are invested in various sectors of the economy; else, we end up with similar result from previous effort.

Thursday, August 18, 2011

Unemployment: Finding Immediate Solution to a thorny national problem?

Keywords or Terms: Sluggish Economy; Unemployment; Presidential Politics; Acrimony; State of Texas; The Feds Chief; Federal reserve Bank; Keynesian; Monetarists; President Obama; Rick Perry; Dr. Bernanke 

There’s more to the unemployment problem than many of our lawmakers are willing to accept. Now that the economy has tanked from the sluggishness in response from congress and probably the Whitehouse, some opportunistic presidential aspirants are using the unemployment issue as a political kick ball. Governor Perry, yes that Texas Cowboy, who was a lackluster student at Texas A & M, just labeled President Obama as a job killer, a stretch at best; as the private sector has been creating jobs in the economy, but not at the pace needed to catch up with a huge 9% and more, unemployment problem. Could you imagine a Republican governor or lawmaker lambasting President Obama as a job killer after what happened with the recent congressional debt ceiling debate?

Can you imagine any Republican, congressional lawmaker, governor or public, being able to wash his or her hands off the downgrading of America’s credit worthiness by Standard and Poor? Can you frankly say that Republicans pulled out all the stomps in the current congressional session to ensure that the fiscal health of this country was not jeopardized? Can you doubly imagine another governor from the state of Texas leading this country; or, advocating against expending federal stimulus funds to create jobs? A three-term Republican governor of the State of Texas, who once wrote a letter to Dr. Bernanke, Federal Reserve Bank Chief, asking for stimulus fund for his state, after initially turning down the advancement from the Feds, is accusing the same Feds Chief of possible treasonable felony? This is how low some delusional Republicans are willing to go to unseat President Obama. To put it very bluntly, the Republican leadership in the 112th Congress has failed to address the paramount problem facing America today: Jobs creation; whether they believe it or not, the congressional instrument that could help create jobs for the more than 25 million unemployed Americans, will have a tough time going through the acrimony of the current congress.

Once again, the nation’s unemployment problem is not only turning many homes into disarray, it is now serving as a ping-pong ball for Republican political juggernauts, including those who hardly could spell the term: Supply-side Economics, to advance their selfish and undisciplined end. The quantitative easing approach from the Federal Reserve Bank which has been followed in the past is hardly making much of a difference; and, to stop the vulnerable market mayhem, the onus is now on Obama’s administration to explore alternative strategies for jobs creation. Maybe that is why the President has indicated that he will be releasing a new approach to combating the unemployment problem come September. However, why wait till September, why not today? The public’s expectation has been so high that things will soon change. However, it seems the more they remain optimistic, the more they get wimped by the performance of the stock market and the ever acrimonious war between Republicans and Democrats in congress; a difficulty that seems to be standing in the way of solution to unemployment.

Some economists have advised government investments in infrastructure, including light rail, electricity grids, green jobs, roads and bridges. Others have suggested fiscal policies like reform to the taxation regime, hoping that this may influence aggregate demand, hence demand for increased manufacturing goods that can stimulate jobs in the economy. The debate over whether to address the unemployment problem with short-run, Keynesian approach, or long-run, Monetarists approach, in policy formation will ever continue; however, we are getting to a threshold where fear is about overcoming common sense. Whether the nation takes the Keynesian approach or route of stimulating demand through transfer payments, tax cuts and unemployment insurance, or the Monetarist supply-side policies, tight fiscal policies, to help improve efficiency of market and hopefully reduce unemployment, there is still need for consensus among our lawmakers as to the best route to take without the long and unyielding acrimony that we have had in the past three years in congress.

Republicans are insisting, like monetarists, the control of money supply will help temper inflation. Incidentally, we do not have any inflation and the feds is about scared of the possibility of deflation with the way prices are tumbling in the real estate and housing markets. Nominal interest rates are rather low; the Feds has kept it at zero, since inflation is very low. By now, we can all agree that unchanged unemployment rate and unchanged real wages will continue to draw down on the economy. What the nation is suffering today is what Keynesians refer to as unemployment disequilibrium. To get out of this slump, we are going to need increased government spending; first to increase employment and second, to increase national income. A higher national income will increase transactions and precautionary demands for money, which can help further encourage private investments in jobs' creation.

We are not having the multiplier effect of private investments as many corporations, out of fear of the unknown, are seating over a trillion dollar cash in their various bank accounts, waiting for the Federal government to take the lead. Without private injection of money into the market and or job creation, the only alternative remaining is the federal government injection of money, for us to have the multiplier’s effect necessary to expand national income. Increased government spending in public works, including infrastructure spending, will go a long way to kick start the economy. Unfortunately, the Republicans have not been forthcoming; congressional Republicans have refused to work with the Democrats and without a cordial working relationship it will be hard to pass another stimulus bill that can help create jobs. Republican lawmakers are anticipating that Democrats will get blamed for the high unemployment and this will facilitate their being kicked out of congress and the Whitehouse. To put it in Republican’s estimation: A bad unemployment rate will ensure that President Obama is a one term President, since the nation can hardly stomach a deplorable unemployment rate as what obtains today. And there lies the politics of the current unemployment situation in America.

It is such an irony that Republicans who led this country into the current economic mess, through their fiscal and monetary deregulation and voyeurism into two foreign wars, to ensure that the military industrial complex continues to fester, are holding the nation to a ransom over finding solution to the problem created initially by them. This is how unfortunate things have gotten in this nation. Imagine, we are in the midst of the worst recession in recent memory, yet multimillion dollar American Corporations are seating over the largest cash reserves ever known to modern banking, rather than invest in job creation?  Imagine if the roles were reversed, will Democrats do the same? There are those who believe that Democrats may not do the same but have been guilty of similar hold ups in the past; and that what is being seen in current congress, is part of the usual business of American Politics.

If the last suspicion is correct, Republican and Democratic lawmakers must help us, as a nation, understand how to better leverage our votes such that our will as a people, does not continue to be compromised or altered, including a heart wrenching unemployment problem across the federation:

1)      What matters most to our lawmakers, the work of the people or a desire to uphold their place in congress? As much as lawmakers may want to hold on to their legislative offices, is the welfare of the people as voters, not of equal importance, if not more than an individual lawmaker’s interest to preserve himself or herself in office? Not every fight over legislative issues is as important as ensuring that citizens have a job to go to, pay taxes and hold on to a roof over their family. Lawmakers must identify what exactly is their priority vis-a-vis, those people who voted them into office. It is imperative that voters understand their interest is being taken into consideration and legislators are not standing in the way of progress when it comes to issues that directly impact their welfare.
2)      What specific economic model, Keynesian or Monetarist, is more appealing to political party leaders? Sometimes, the issue of public policies cannot be defined by ideological affiliation or contemporary hologram, as party politics are often subscribed. The nation’s problems are multifaceted and a diverse knowledge area and background are needed to profess solutions to them. No matter how entrenched a lawmaker maybe in his or her party’s affiliation and ideology, it is probably advisable to identify with the issues that affect the every day lives of the electorate or voters, if the legislator wants to be returned back to office in the upcoming election.

3)      How and why is it that politicians, though from different parties, yet from the same state, are unable to work together in the interest of the public in congress? Sometimes, political lawmakers with probably the worse adverse effect of the problem(s) at hand, look away from finding solution, just in the name of party or ideological affiliation? For example, since lawmakers know that an increase in government spending can substitute for private spending, although not always advisable, to help stimulate activities in the economy, hence increase in equilibrium level of national income, why then are politicians not willing to set aside their differences, in the interest of the people, who are badly hurting?

4)      What is the expected turn over rate of the composition of congress, when a stalemate as what we had over the debt ceiling debate or the long unyielding debate over health care reform takes place? It is important to know, how long legislators anticipate that they can continue to take the voters for granted, by refusing to address important issues that directly affect voters’ welfare. How long do lawmakers think the voters are willing to tolerate unnecessary hold out by lawmakers on issues that is paramount to the people’s welfare?

5)      How much room is there for compromise in the 112th congress? Lawmakers must let us know the current status of their relationship with other lawmakers in opposing parties, for the voters to appreciate the dynamics in congress or, be able to determine if they will want to return the same legislator back to congress in the subsequent congressional session. Each lawmaker must assess if his or her inability to work with other lawmakers is standing in the way of doing the people’s work. How much compromises are each willing to engage in; or, how much grounds are they willing to yield to other lawmakers who do not necessarily see a problem the same way, they do?


Thursday, August 11, 2011

Gang of 12: Partnering with Republicans for the greater good of the world’s leading economy?

Keywords or Terms: Democrats; Republicans; Gang of Twelve; Sen Patty Murray (D-WA); Sen. John Kerry (D-MA); Sen. Max Baucus (D-MT); Rep. Dave Camp (R-MI); Rep Fred Upton (R-MI); Rep Jeb Hensarling (R-TX); Sen. Rob Portman (R-OH); Sen. Jon Kyl (R-AZ); Sen. Pat Toomey (R-PA); Rep. James E. Clyburn (D-SC); Rep. Xavier Becerra (D-CA); Rep. Chris Van Hollen (D-MD); Compromise; Balanced Approach; Lawmaking

Democratic lawmakers in congress are too often circumspect of the true intentions of their Republicans Counterparts; and vise-versa. Who can blame them, considering the recent stalemate regarding the lifting of debt ceiling? While Democratic Leaders in Congress were perceived by the public as conciliatory, Republican Leaders were found to be at the mercy; or in imprisonment, of a factional group within their party; a difficult situation that made negotiations and reaching compromises on raising the debt ceiling, rather difficult. It wasn’t only that the Republican leadership felt captive to the Tea Party faction among their rank and file, it was the fact that their ability to reach compromising deals with Democrats were hijacked by the potential 2012 Republican Presidential campaign strategy; a unique difficulty that made citizens of the nation to wonder, if the work of the people was actually being done; and, if politics is not tromping public policy; or, if the demands of an extreme group in American politics have not completely scuttled the democratic process. If the objective of the recalcitrance from the Tea-baggers was to harvest votes, they may be surprised about what the recent polling of the public’s perception of the congressional stalemate and who is to be blamed; or, what the result of the national election may bear out come 2012.

Considering the unfortunate pronouncement of one of the leading Republican Senators from Kentucky, Mitch McConnell, a position that is probably shared by many within the Republican Party; and, one that is better left for a Republican neophyte lawmaker to utter rather than a Republican leader with an appreciable length of time or experience in congress; and who probably understands better what it means to govern, if there is anything like that, one must just wonder what was going on in the mind of the senator when he mentioned the unfathomable. To paraphrase the senior Senator from Kentucky: “I am working hard to ensure that this President is a one term President.” With an attitude like this, no wonder, it was difficult for the forty-two freshman class of Tea Partiers, to get their bearings or understand that enacting a bill in congress, is a game of negotiations and compromises, renegotiation and reconciliations, and not recalcitrance and ingratitude; a process which occasionally may look untidy and wish-washy, but actually works to get a representative workable result.

The differences in both parties’ extreme factions were at the hub of the challenges that the world’s economy is probably facing right now. When extreme groups within either political parties demand extreme positions and are willing to let the whole nation go into financial default, then you begin to question the discipline of many of our lawmakers. Can Congresswoman Bachmann be running for the office of the Presidency if she is championing this type of reckless negligence in leadership? When the needs to garner political votes become the compass for bill’s formation and lawmaking, when the desired position of achieving true results for the people of the country becomes secondary to individual politician’s objectives or those of a minority group within either party, then we are about reaching a threshold of anarchy.

In addition, if the leadership in either political party is unable to convince enough members within their party to vote for a proposal, you start to question the leadership within congress and begin to wonder, if the leadership of either parties has been adopting the right strategy and leadership approach in managing the rank and file among congressional lawmakers. It is probably wise to ask that the process and culture of negotiations that are more result-oriented be adopted by either leadership of the political parties. Further, adopting this result-oriented approach in support of deliberations over a bill in congress is the ethos of good leadership and one that will have beneficial results for either party leadership. Holding firmly to myopic ideological stance as identified with the Tea-baggers within Republican Party, is not only selfish; it is also a probable disaster for a nation holding down to a quarter of the world’s gross domestic product.

Experienced lawmakers often believe they are responsible for keeping the rank and file of their political party in line during the difficult toil of developing and cradling a proposal, a bill, an idea or initiative to law in congress. Seasoned Congressional leaders understand that when they treat the legislative process with temperance or adopt re-conciliatory rules of engagement in managing the parliamentary process, they are able to achieve better results for all, the lawmakers and the country. While counseling the newer lawmakers on how to be in compliance with the ethos of respective parties are in order, it still behooves party leadership to maintain a duty in compromise to help achieve positive results during negotiations over provisions that may end up in a bill. 

Much as the temptation is to remain in complete compliance with the respective party’s ethos and identity, there is still the need for a give-and-take dynamics that are very essential for reaching accords on provisions in a bill that may end up as a law. Since when has it been the order of the day in congress to farm out legislative responsibility to a super congressional group, one nominated probably by a few insiders in either political party? Is this not undemocratic in the first place? Does it not call into question the right of the people to choose their legislators without an abridgement of same rights by those same lawmakers who have failed to appreciate their roles and responsibility in addressing a concern and or, passing a bill, like one meant to trim the excesses in the national budget? To resolve the stalemate and challenges that leaders in both parties have not been able to agree to, party leaders have now chosen their preferential membership to a super congressional group to resolve challenges that the party leadership in congress have not been able to resolve. Is this truly democratic or are we watching the dreams of our fore-fathers being scuttled, because some few, who hardly understand the essence of the democratic process, have decided to hold the whole country, ransom?

To break the strong hold of the Tea Party faction of the Republican Party in Congress, here are two unique perspectives that may add values to the leadership of the Republican Party; and, help free the leadership from the fury and clenching fists of the extreme group:

1)      Republican leadership must understand that this group is more of a fad; or as one politician puts it, political terrorists; and, the real drivers of their demands probably have nothing to do with saving the country from Economic Armageddon, but self-serving. As good as their intentions and clouts may be with those voters that sent them to congress, hardly can it be translated to effective leadership in congressional lawmaking. Incorporated into the process of lawmaking is the need for compromises, reconciliation, strategic alignments that are not pigheaded, and agreements to work for the betterment of the whole congressional legislative process; hence the nation. Republican leadership must therefore incorporate into their caucus discussions, the benefits of compromises and conciliation, the beauty of reconciliation and the benefits of identifying with the pluralities of party leadership, a true and tested group, who knows what parliamentary rules may be massaged or bent without subjecting the lawmaking process to a grinding halt or holding down the parliamentary process to a forced handicap.

2)      Republican leadership, just like the Democrats, need to transform their self-image and believe that they are capable of compromises. This requires the understanding of the challenges being faced by the opposition leadership regarding bringing together party membership in congress to address the difficult points and challenges arising from recommendations on provisions of a proposed bill. To really succeed in congressional lawmaking, to achieve the brilliance of fashioning out workable plans during difficult times for the country, there is a need to appreciate the difficult circumstance that the country is in and to muster the acumen for needed work and dedication to achieve positive results for the nation, even if it puts political party members in temporary difficult positions. This process requires the need to be proactive and having an inventive leadership who are able to bring centrist reasoning, essential for achieving success in the new modern day 24/7 News media environment of congressional lawmaking.

To reach the desired threshold for adapting to the new change in a media blitz lawmaking environment, support for provisions in a bill cannot always be organized around traditional ideological positions of respective parties; neither can the discussions of all items in a proposed or soon to be proposed recommendations in a bill, be based on the confines or preferences of a factional group which is bent on destroying all that is good in the whole democratic process. The ideologues are often at the extremities of either political parties and rarely do they hold or catch the essence of the future of the whole party, as it seems about the Tea Party group in the Republican Party of today. 

While it seems like the Tea Party faction of the Republican Party has usurped some of the party’s leadership, political observers of the party, describe the dynamics of the group within the Republican Party, as probably destructive or unwholesome for the new image of inclusiveness that the Republican leadership has been seeking among minorities. How can Republicans foster inclusiveness, if all they are seeking is to cut social security to the elderly, slash Medicare support for the vulnerable among us and demand or insists forbearance from the middle class and the poor, while safeguarding the interests of the rich? How can Republicans increase participation of minorities in their party when all they care about is safeguarding the interest of the rich at the expense of the poor; and or, relegating real problems of job creation for the millions out of work to a secondary status, to having tax cuts for billionaires?

For example, Republican leadership who allow the rich to get a tax brake for golf clubs and chartered private jet fuel, insist on cutting social welfare programs for women, infant and children.  How inclusive is this arrangement? Republicans continue to regurgitate failed pronouncements of supply-side economics in the job creation need of the nation. They continue to drum-up the fallacy that jobs in the private sector will never be created except more money is given away in taxes to the rich. Republicans may want to realize that all tax payers as a whole are paying for the excesses of the greedy rich, as they are allowed to pay less in taxes because of the ridiculous tax code and the opportunity afforded by many huge corporations to transfer their wealth overseas for job creation opportunities in other nations, majority of which could hardly care about what is going on in American homes.

At the same time that Republicans are inflating the contributions of the corporations to this nation in taxes, they are marginalizing the unions, students, teachers, bus drivers, and the elderly. Just as Republicans are delivering on their avowed commitments to the needs of the rich, they are bumping off children off subsidized state health care programs. To avoid further conflict, Republican leadership must now rain in the extremists in their party, scrutinize their demands and make them understand that this America is for all of us, the rich, the poor, widows, fatherless and the motherless; none of whom deserve to be marginalized on the grounds of narrow ideological ground.

For the newly nominated group of twelve legislators to be effective and successful in their negotiations over budget trimming and cutting deficit, it will be helpful, if no preconceived notion of an unyielding grounds or positions are adhered to by either of the six members a piece per party during negotiations. In order words, there must be the opportunity to consider a balanced approach, one that affords for revenue rising, while trimming the excesses in government spending. One approach is to look at the newly constituted group from congressional lawmakers, as an elite group, with particular goal of providing answers to most if not all questions that the past deliberations have failed to resolved for the nation. Whether the elite group has the opportunity to become the nation’s saviors with respect to our fiscal problems, depends on how each member perceives his or her role in the challenges before us, as a nation; not as a Republican or Democrat!

Tuesday, August 2, 2011

FRANCA ESILOKUN WILKIE (1959 -1986): A memorial for a Dear Friend

Franca, a dear friend, who left us a quarter of a century ago, used to like this music from Simon and Garfunkel. Enjoy the Lyrics with me as I keep on keeping the promise:

Simon And Garfunkel Old Friends Lyrics
Old friends, old friends sat on their parkbench like bookends 
A newspaper blowin' through the grass 
Falls on the round toes of the high shoes of the old friends 
[ Lyrics from: ] 
Old friends, winter companions, the old men 
Lost in their overcoats, waiting for the sun 
The sounds of the city sifting through trees 
Settles like dust on the shoulders of the old friends 

Can you imagine us years from today, sharing a parkbench quietly 
How terribly strange to be seventy 
Old friends, memory brushes the same years, silently sharing the same fears
Franca, thanks for all the great time. Hope to meet again in Paradise.