This is from Newt Gingrich. This make much more sense than the current spending bill that Obama is trying to pass.
1. Payroll Tax Stimulus. With a temporary new tax credit to offset 50% of the payroll tax, every small business would have more money, and all Americans would take home more of what they earn.
2. Real Middle-Income Tax Relief. Reduce the marginal tax rate of 25% down to 15%, in effect establishing a flat-rate tax of 15% for close to 9 out of 10 American workers.
3. Reduce the Business Tax Rate. Match Ireland’s rate of 12.5% to keep more jobs in America.
4. Homeowner’s Assistance. Provide tax credit incentives to responsible home buyers so they can keep their homes.
5. Controlling Spending So We Can Move to a Balanced Budget. This begins with eliminating Congressional earmarks and wasteful pork-barrel spending.
6. No State Aid Without Protection From Fraud. Require state governments to adopt anti-fraud and anti-theft policies before giving them more money.
7. More American Energy Now. Explore for more American oil and gas and invest in affordable energy for the future, including clean coal, ethanol, nuclear power and renewable fuels.
8. Abolish Taxes on Capital Gains. Match China, Singapore and many other competitors. More investment in America means more jobs in America.
9. Protect Our Right to Vote in the Workplace. We must protect a worker’s right to decide by secret ballot whether to join a union.
10. Replace Sarbanes-Oxley. This failed law is crippling entrepreneurial startups. Replace it with affordable rules that help create jobs, not destroy them.
11. Abolish the Death Tax. Americans should work for their families, not for Washington.
12. Invest in Energy and Transportation Infrastructure. This includes a new, expanded electric power grid and a 21st century air traffic control system that will reduce delays in air travel and save passengers, employees and airlines billions of dollars per year.
Monday, February 9, 2009
FLY ON THE WAL UNDERCOVER AT WAL-MART, THE HEARTLAND SUPERSTORE THAT MAY SAVE THE ECONOMY
By CHARLES PLATT
Writer Charles Platt during his stint as a Wal-Mart employee in Flagstaff, Ariz.
Writer Charles Platt during his stint as a Wal-Mart employee in Flagstaff, Ariz.
PreviousPauseNext
Some people, usually community activists, loath Wal-Mart. Others, like the family of four struggling to make ends meet, are in love with the chain. I, meanwhile, am in awe of it.
With more than 7,000 facilities worldwide, coordinating more than 2 million employees in its fanatical mission to maintain an inventory from more than 60,000 American suppliers, it has become a system containing more components than the Space Shuttle - yet it runs as reliably as a Timex watch.
Sheltered by rabble rousers who forced Wal-Mart's CEO to admit it "wasn't worth the effort" to try to open in Queens or anywhere else in the city, New Yorkers may not fully realize the unique, irreplaceable status of the World's Largest Retailer in rural and suburban America. Merchandise from Wal-Mart has become as ubiquitous as the water supply. Yet still the company is rebuked and reviled by anyone claiming a social conscience, and is lambasted by legislators as if its bad behavior places it somewhere between investment bankers and the Taliban.
Considering this is a company that is helping families ride out the economic downturn, which is providing jobs and stimulus while Congress bickers, which had sales growth of 2% this last quarter while other companies struggled, you have to wonder why. At least, I wondered why. And in that spirit of curiosity, I applied for an entry-level position at my local Wal-Mart.
*
Getting hired turned out to be a challenge. The personnel manager told me she had received more than 100 applications during that month alone, chasing just a handful of jobs. Thus the mystery deepened. If Wal-Mart was such an exploiter of the working poor, why were the working poor so eager to be exploited? And after they were hired, why did they seem so happy to be there? Anytime I shopped at the store, blue-clad Walmartians encouraged me to "Have a nice day" with the sincerity of the pope issuing a benediction.
I found my first clue in the application screening process. A diabolically ingenious quiz probed for my slightest hesitation or uncertainty regarding four big no-nos of retailing: theft, insubordination, poor timekeeping and substance abuse. (The quiz also tried to make sure that I wasn't accident-prone.) After I cleared that hurdle, I was called in for an interview. At the Flagstaff, Ariz., store where I applied, this took place in a vinyl-floored, gray-walled, windowless room, tucked away at the back of the store and crowded with people sitting on cheap folding chairs at cheap folding tables. Some of these people were talking on phones, some were doing job interviews, some were typing on computer terminals, and some seemed to be eating lunch.
I sat at a table that was covered in untrimmed fabric under a protective layer of sticky transparent vinyl, like a couch cover. I'd seen better-looking decor at firehouse bingo evenings. Was Wal-Mart going out of its way to emphasize its commitment to cost-cutting? I guessed that the utilitarian ethic was so deeply embedded, it was just taken for granted.
A friendly lady in her 50s, wearing the Wal-Mart Smile, sat opposite me and started asking questions from a printed form. Meanwhile another job applicant was going through his interview right behind me. Privacy, apparently, was as unaffordable here as tasteful decor.
"Are you easy to work with?" the lady asked. Since I couldn't imagine anyone being dumb enough to say "No," I concluded that the content of my answer must be irrelevant, and the way I answered must be the real issue. To judge from my interviewer's sunny demeanor, enthusiasm and sincerity were key. Fortunately, I had no problem reflecting her positivism, because I was becoming so fascinated with the Wal-Mart phenomenon, I really did want to work there.
I managed to satisfy her expectations, and then went through two additional interviews, followed by a drug test, before I received formal approval. It may have been one of the most intense hiring processes I've been through; hardly the schedule of a company that didn't care who it hired, or employees who didn't care about getting a job.
*
A week later, I found myself in an elite group of 10 successful applicants convening for two (paid) days of training in the same claustrophobic, windowless room. As we introduced ourselves, I discovered that more than half had already worked at other Wal-Marts. Having relocated to this area, they were eager for more of the same.
Why? Gradually the answer became clear. Imagine that you are young and relatively unskilled, lacking academic qualifications. Which would you prefer: standing behind the register at a local gas station, or doing the same thing in the most aggressively successful retailer in the world, where ruthless expansion is a way of life, creating a constant demand for people to fill low-level managerial positions? A future at Wal-Mart may sound a less-than-stellar prospect, but it's a whole lot better than no future at all.
In addition, despite its huge size, the corporation turned out to have an eerie resemblance to a Silicon Valley startup. There was the same gung-ho spirit, same lack of dogma, same lax dress code, same informality - and same interest in owning a piece of the company. All of my coworkers accepted the offer to buy Wal-Mart stock by setting aside $2 of every paycheck.
They were less enthused about health benefits, which offered minimal coverage during our first six months. The full corporate plan would kick in after that, but seemed to require significant employee contributions. Still, my fellow trainees assured me that health plans at other retail chains were even worse, and since the federal government had raised the limits for Medicaid eligibility, that was an option for people with children. (In the time since my experience at Wal-Mart, the company has improved its health plans significantly.) The assistant manager who served as our trainer was still in her 20s, highly motivated, friendly, smart, and perceptive. Naturally she overflowed with Wal-Mart positivism. In fact she projected the feel-good sincerity of a Baptist running a bake sale.
Still, she wasn't afraid to tackle the topic of termination. During our initial six months on the job, we would be on probation on a "three strikes" basis. One major screw-up would trigger a session of "verbal coaching." (Since positivism is endemic in Wal-Mart, words such as "discipline" are seldom used. The goal is self-improvement.) A second offense would trigger some written coaching. On the third offense, the employee would be sent home to think long and hard about what happened, and would have to come back the next day with a good argument for not being fired. In effect, Wal-Mart would say, "You seem to be a hopeless case. Now tell us why we're wrong." We were given only a handful of outright prohibitions. No swearing in the store, for instance - not even the word "damn," because some people might be offended. No funny-colored hair or blatant skin piercings, because some people might be offended. In fact almost all the rules devolved to the sacred principle of never, ever offending a customer - or "guest," in Wal-Mart terminology.
The reason was clearly articulated. On average, anyone walking into Wal-Mart is likely to spend more than $200,000 at the store during the rest of his life. Therefore, any clueless employee who alienates that customer will cost the store around a quarter-million dollars. "If we don't remember that our customers are in charge," our trainer warned us, "we turn into Kmart." She made that sound like devolving into some lesser being - a toad, maybe, or an ameba.
And so we came to the Wal-Mart Pledge. Solemnly, each of us raised one hand and intoned: "If a customer comes within 10 feet of me, I'm going to look him in the eye, smile and greet him." Having pledged ourselves, we encountered the aspect of Wal-Mart employment that impressed me most: The Telxon, pronounced "Telzon," a hand-held bar-code scanner with a wireless connection to the store's computer. When pointed at any product, the Telxon would reveal astonishing amounts of information: the quantity that should be on the shelf, the availability from the nearest warehouse, the retail price, and (most amazing of all) the markup.
All of us were given access to this information, because - in theory, at least - anyone in the store could order a couple extra pallets of anything, and could discount it heavily as a Volume Producing Item (known as a VPI), competing with other departments to rack up the most profitable sales each month. Floor clerks even had portable equipment to print their own price stickers. This was how Wal-Mart detected demand and responded to it: by distributing decision-making power to grass-roots level. It was as simple yet as radical as that.
We received an inspirational talk on this subject, from an employee who reacted after the store test-marketed tents that could protect cars for people who didn't have enough garage space. They sold out quickly, and several customers came in asking for more. Clearly this was a singular, exceptional case of word-of-mouth, so he ordered literally a truckload of tent-garages, "Which I shouldn't have done really without asking someone," he said with a shrug, "because I hadn't been working at the store for long." But the item was a huge success. His VPI was the biggest in store history - and that kind of thing doesn't go unnoticed in Arkansas.
He was invited to corporate HQ as a guest at a management conference. "It was totally different from what I expected," he told us. "I thought it would be these fatcats talking about money, but no one even mentioned money. All they cared about was finding new ways to satisfy customers. I met everyone including the chairman of the company."
*
After my two days of instruction I returned for the first real day of work. Inevitably, it was anticlimactic. The essence of life on the sales floor should be obvious to anyone: It is extremely boring.
I had chosen the pet department, which sells goldfish, cat food, dog food and accessories. As I patrolled the aisles, repositioning misplaced items and filling gaps in the shelves, I realized that Wal-Mart "guests" really are like guests. They are visitors who move things around and create a mess before they go home. Cleaning up after them was not very different from doing housework.
My amiable, laid-back department supervisor had been doing this kind of thing for 15 years. When I asked him why, he took a moment to process the question. He had to think back to other employers he'd worked for in the distant past. None of them, he said, had treated him so well.
What exactly did he mean by that?
His answer lay in the structure of the store. "It's deceptive, because Wal-Mart isn't divided into separate stores like a mall," he said. "But really, that's how it works. Each section is separate. This is - my pet store! No one comes here and tells me how to run it. I could go for weeks without a supervisor asking any questions." Here was the unseen, unreported side of the corporate behemoth. Big as it was, it was smart enough to give employees a feeling of autonomy.
During my few subsequent days as a Walmartian, everyone at every level was friendly and decent toward me. No one had the slightest clue that I might write about my experiences; no one even knew that I had a former career as a journalist. Still, they behaved like poster children for enlightened capitalism.
My supervisor reminded me unfailingly to take my mandatory two (paid) quarter-hour breaks during each eight hours of working time. I was cautioned never to abbreviate my lunch hour. Most of all I was encouraged to educate myself using instructional videos on computer terminals at the back of the store.
These videos served Wal-Mart's self-interest by teaching skills ranging from customer service to the art of lifting heavy boxes without hurting your back. I was paid to view them, and was rewarded with an increased hourly rate when I finished the course.
My starting wage was so low (around $7 per hour), a modest increment still didn't leave me with enough to live on comfortably, but when I looked at the alternatives, many of them were worse. Coworkers assured me that the nearest Target paid its hourly full-timers less than Wal-Mart, while fast-food franchises were at the bottom of everyone's list.
I found myself reaching an inescapable conclusion. Low wages are not a Wal-Mart problem. They are an industry-wide problem, afflicting all unskilled entry-level jobs, and the reason should be obvious.
In our free-enterprise system, employees are valued largely in terms of what they can do. This is why teenagers fresh out of high school often go to vocational training institutes to become auto mechanics or electricians. They understand a basic principle that seems to elude social commentators, politicians and union organizers. If you want better pay, you need to learn skills that are in demand.
The blunt tools of legislation or union power can force a corporation to pay higher wages, but if employees don't create an equal amount of additional value, there's no net gain. All other factors remaining equal, the store will have to charge higher prices for its merchandise, and its competitive position will suffer.
This is Economics 101, but no one wants to believe it, because it tells us that a legislative or unionized quick-fix is not going to work in the long term. If you want people to be wealthier, they have to create additional wealth.
To my mind, the real scandal is not that a large corporation doesn't pay people more. The scandal is that so many people have so little economic value. Despite (or because of) a free public school system, millions of teenagers enter the work force without marketable skills. So why would anyone expect them to be well paid?
In fact, the deal at Wal-Mart is better than at many other employers. The company states that its regular full-time hourly associates in the US average $10.86 per hour, while the mean hourly wage for retail sales associates in department stores generally is $8.67. The federal minimum wage is $6.55 per hour. Also every Wal-Mart employee gets a 10% store discount, while an additional 4% of wages go into profit-sharing and 401(k) plans.
*
As for the horror stories: Let's take a couple of random examples. Unpaid overtime? Maybe it happened at some stores in the past, but an instructional video warned me that if anyone in management ever encouraged such a heinous transgression, I should report him to his superiors immediately. Illegal aliens? That particular news story really referred to a cleaning company retained by Wal-Mart. The cleaning company hired the illegals.
You have to wonder, then, why the store has such a terrible reputation, and I have to tell you that so far as I can determine, trade unions have done most of the mudslinging. Web sites that serve as a source for negative stories are often affiliated with unions. Walmartwatch.com, for instance, is partnered with the Service Employees International Union; Wakeupwalmart.com is entirely owned by United Food and Commercial Workers International Union. For years, now, they've campaigned against Wal-Mart, for reasons that may have more to do with money than compassion for the working poor. If more than one million Wal-Mart employees in the United States could be induced to join a union, by my calculation they'd be compelled to pay more than half-billion dollars each year in dues.
Anti-growth activists are the other primary source of anti-Wal-Mart sentiment. In the town where I worked, I was told that activists even opposed a new Barnes & Noble because it was "too big." If they're offended by a large bookstore, you can imagine how they feel about a discount retailer.
The argument, of course, is that smaller enterprises cannot compete. My outlook on this is hardcore: I think that many of the "mom-and-pop" stores so beloved by activists don't deserve to remain in business.
When I first ventured from New York City to the American heartland, I did my best to patronize quaint little places on Main Street and quickly discovered the penalties for doing so. At a small appliance store, I wasn't allowed to buy a microwave oven on display. I had to place an order and wait a couple of weeks for delivery. At a stationery store where I tried to buy a file cabinet, I found the same problem. Think back, if you are old enough to do so, and you may recall that this is how small-town retailing used to function in the 1960s.
As a customer, I don't see why I should protect a business from the harsh realities of commerce if it can't maintain a good inventory at a competitive price. And as an employee, I see no advantage in working at a small place where I am subject to the quixotic moods of a sole proprietor, and can never appeal to his superior, because there isn't one.
By the same logic, I see no reason for legislators to protect Safeway supermarkets with ploys such as zoning restrictions, which just happen to allow a supermarket-sized building while outlawing a Wal-Mart SuperCenter that's a few thousand square feet bigger.
Based on my experience (admittedly, only at one location) I reached a conclusion which is utterly opposed to almost everything ever written about Wal-Mart. I came to regard it as one of the all-time enlightened American employers, right up there with IBM in the 1960s. Wal-Mart is not the enemy. It's the best friend we could ask for.
Charles Platt is a former senior writer for Wired magazine.
Writer Charles Platt during his stint as a Wal-Mart employee in Flagstaff, Ariz.
Writer Charles Platt during his stint as a Wal-Mart employee in Flagstaff, Ariz.
PreviousPauseNext
Some people, usually community activists, loath Wal-Mart. Others, like the family of four struggling to make ends meet, are in love with the chain. I, meanwhile, am in awe of it.
With more than 7,000 facilities worldwide, coordinating more than 2 million employees in its fanatical mission to maintain an inventory from more than 60,000 American suppliers, it has become a system containing more components than the Space Shuttle - yet it runs as reliably as a Timex watch.
Sheltered by rabble rousers who forced Wal-Mart's CEO to admit it "wasn't worth the effort" to try to open in Queens or anywhere else in the city, New Yorkers may not fully realize the unique, irreplaceable status of the World's Largest Retailer in rural and suburban America. Merchandise from Wal-Mart has become as ubiquitous as the water supply. Yet still the company is rebuked and reviled by anyone claiming a social conscience, and is lambasted by legislators as if its bad behavior places it somewhere between investment bankers and the Taliban.
Considering this is a company that is helping families ride out the economic downturn, which is providing jobs and stimulus while Congress bickers, which had sales growth of 2% this last quarter while other companies struggled, you have to wonder why. At least, I wondered why. And in that spirit of curiosity, I applied for an entry-level position at my local Wal-Mart.
*
Getting hired turned out to be a challenge. The personnel manager told me she had received more than 100 applications during that month alone, chasing just a handful of jobs. Thus the mystery deepened. If Wal-Mart was such an exploiter of the working poor, why were the working poor so eager to be exploited? And after they were hired, why did they seem so happy to be there? Anytime I shopped at the store, blue-clad Walmartians encouraged me to "Have a nice day" with the sincerity of the pope issuing a benediction.
I found my first clue in the application screening process. A diabolically ingenious quiz probed for my slightest hesitation or uncertainty regarding four big no-nos of retailing: theft, insubordination, poor timekeeping and substance abuse. (The quiz also tried to make sure that I wasn't accident-prone.) After I cleared that hurdle, I was called in for an interview. At the Flagstaff, Ariz., store where I applied, this took place in a vinyl-floored, gray-walled, windowless room, tucked away at the back of the store and crowded with people sitting on cheap folding chairs at cheap folding tables. Some of these people were talking on phones, some were doing job interviews, some were typing on computer terminals, and some seemed to be eating lunch.
I sat at a table that was covered in untrimmed fabric under a protective layer of sticky transparent vinyl, like a couch cover. I'd seen better-looking decor at firehouse bingo evenings. Was Wal-Mart going out of its way to emphasize its commitment to cost-cutting? I guessed that the utilitarian ethic was so deeply embedded, it was just taken for granted.
A friendly lady in her 50s, wearing the Wal-Mart Smile, sat opposite me and started asking questions from a printed form. Meanwhile another job applicant was going through his interview right behind me. Privacy, apparently, was as unaffordable here as tasteful decor.
"Are you easy to work with?" the lady asked. Since I couldn't imagine anyone being dumb enough to say "No," I concluded that the content of my answer must be irrelevant, and the way I answered must be the real issue. To judge from my interviewer's sunny demeanor, enthusiasm and sincerity were key. Fortunately, I had no problem reflecting her positivism, because I was becoming so fascinated with the Wal-Mart phenomenon, I really did want to work there.
I managed to satisfy her expectations, and then went through two additional interviews, followed by a drug test, before I received formal approval. It may have been one of the most intense hiring processes I've been through; hardly the schedule of a company that didn't care who it hired, or employees who didn't care about getting a job.
*
A week later, I found myself in an elite group of 10 successful applicants convening for two (paid) days of training in the same claustrophobic, windowless room. As we introduced ourselves, I discovered that more than half had already worked at other Wal-Marts. Having relocated to this area, they were eager for more of the same.
Why? Gradually the answer became clear. Imagine that you are young and relatively unskilled, lacking academic qualifications. Which would you prefer: standing behind the register at a local gas station, or doing the same thing in the most aggressively successful retailer in the world, where ruthless expansion is a way of life, creating a constant demand for people to fill low-level managerial positions? A future at Wal-Mart may sound a less-than-stellar prospect, but it's a whole lot better than no future at all.
In addition, despite its huge size, the corporation turned out to have an eerie resemblance to a Silicon Valley startup. There was the same gung-ho spirit, same lack of dogma, same lax dress code, same informality - and same interest in owning a piece of the company. All of my coworkers accepted the offer to buy Wal-Mart stock by setting aside $2 of every paycheck.
They were less enthused about health benefits, which offered minimal coverage during our first six months. The full corporate plan would kick in after that, but seemed to require significant employee contributions. Still, my fellow trainees assured me that health plans at other retail chains were even worse, and since the federal government had raised the limits for Medicaid eligibility, that was an option for people with children. (In the time since my experience at Wal-Mart, the company has improved its health plans significantly.) The assistant manager who served as our trainer was still in her 20s, highly motivated, friendly, smart, and perceptive. Naturally she overflowed with Wal-Mart positivism. In fact she projected the feel-good sincerity of a Baptist running a bake sale.
Still, she wasn't afraid to tackle the topic of termination. During our initial six months on the job, we would be on probation on a "three strikes" basis. One major screw-up would trigger a session of "verbal coaching." (Since positivism is endemic in Wal-Mart, words such as "discipline" are seldom used. The goal is self-improvement.) A second offense would trigger some written coaching. On the third offense, the employee would be sent home to think long and hard about what happened, and would have to come back the next day with a good argument for not being fired. In effect, Wal-Mart would say, "You seem to be a hopeless case. Now tell us why we're wrong." We were given only a handful of outright prohibitions. No swearing in the store, for instance - not even the word "damn," because some people might be offended. No funny-colored hair or blatant skin piercings, because some people might be offended. In fact almost all the rules devolved to the sacred principle of never, ever offending a customer - or "guest," in Wal-Mart terminology.
The reason was clearly articulated. On average, anyone walking into Wal-Mart is likely to spend more than $200,000 at the store during the rest of his life. Therefore, any clueless employee who alienates that customer will cost the store around a quarter-million dollars. "If we don't remember that our customers are in charge," our trainer warned us, "we turn into Kmart." She made that sound like devolving into some lesser being - a toad, maybe, or an ameba.
And so we came to the Wal-Mart Pledge. Solemnly, each of us raised one hand and intoned: "If a customer comes within 10 feet of me, I'm going to look him in the eye, smile and greet him." Having pledged ourselves, we encountered the aspect of Wal-Mart employment that impressed me most: The Telxon, pronounced "Telzon," a hand-held bar-code scanner with a wireless connection to the store's computer. When pointed at any product, the Telxon would reveal astonishing amounts of information: the quantity that should be on the shelf, the availability from the nearest warehouse, the retail price, and (most amazing of all) the markup.
All of us were given access to this information, because - in theory, at least - anyone in the store could order a couple extra pallets of anything, and could discount it heavily as a Volume Producing Item (known as a VPI), competing with other departments to rack up the most profitable sales each month. Floor clerks even had portable equipment to print their own price stickers. This was how Wal-Mart detected demand and responded to it: by distributing decision-making power to grass-roots level. It was as simple yet as radical as that.
We received an inspirational talk on this subject, from an employee who reacted after the store test-marketed tents that could protect cars for people who didn't have enough garage space. They sold out quickly, and several customers came in asking for more. Clearly this was a singular, exceptional case of word-of-mouth, so he ordered literally a truckload of tent-garages, "Which I shouldn't have done really without asking someone," he said with a shrug, "because I hadn't been working at the store for long." But the item was a huge success. His VPI was the biggest in store history - and that kind of thing doesn't go unnoticed in Arkansas.
He was invited to corporate HQ as a guest at a management conference. "It was totally different from what I expected," he told us. "I thought it would be these fatcats talking about money, but no one even mentioned money. All they cared about was finding new ways to satisfy customers. I met everyone including the chairman of the company."
*
After my two days of instruction I returned for the first real day of work. Inevitably, it was anticlimactic. The essence of life on the sales floor should be obvious to anyone: It is extremely boring.
I had chosen the pet department, which sells goldfish, cat food, dog food and accessories. As I patrolled the aisles, repositioning misplaced items and filling gaps in the shelves, I realized that Wal-Mart "guests" really are like guests. They are visitors who move things around and create a mess before they go home. Cleaning up after them was not very different from doing housework.
My amiable, laid-back department supervisor had been doing this kind of thing for 15 years. When I asked him why, he took a moment to process the question. He had to think back to other employers he'd worked for in the distant past. None of them, he said, had treated him so well.
What exactly did he mean by that?
His answer lay in the structure of the store. "It's deceptive, because Wal-Mart isn't divided into separate stores like a mall," he said. "But really, that's how it works. Each section is separate. This is - my pet store! No one comes here and tells me how to run it. I could go for weeks without a supervisor asking any questions." Here was the unseen, unreported side of the corporate behemoth. Big as it was, it was smart enough to give employees a feeling of autonomy.
During my few subsequent days as a Walmartian, everyone at every level was friendly and decent toward me. No one had the slightest clue that I might write about my experiences; no one even knew that I had a former career as a journalist. Still, they behaved like poster children for enlightened capitalism.
My supervisor reminded me unfailingly to take my mandatory two (paid) quarter-hour breaks during each eight hours of working time. I was cautioned never to abbreviate my lunch hour. Most of all I was encouraged to educate myself using instructional videos on computer terminals at the back of the store.
These videos served Wal-Mart's self-interest by teaching skills ranging from customer service to the art of lifting heavy boxes without hurting your back. I was paid to view them, and was rewarded with an increased hourly rate when I finished the course.
My starting wage was so low (around $7 per hour), a modest increment still didn't leave me with enough to live on comfortably, but when I looked at the alternatives, many of them were worse. Coworkers assured me that the nearest Target paid its hourly full-timers less than Wal-Mart, while fast-food franchises were at the bottom of everyone's list.
I found myself reaching an inescapable conclusion. Low wages are not a Wal-Mart problem. They are an industry-wide problem, afflicting all unskilled entry-level jobs, and the reason should be obvious.
In our free-enterprise system, employees are valued largely in terms of what they can do. This is why teenagers fresh out of high school often go to vocational training institutes to become auto mechanics or electricians. They understand a basic principle that seems to elude social commentators, politicians and union organizers. If you want better pay, you need to learn skills that are in demand.
The blunt tools of legislation or union power can force a corporation to pay higher wages, but if employees don't create an equal amount of additional value, there's no net gain. All other factors remaining equal, the store will have to charge higher prices for its merchandise, and its competitive position will suffer.
This is Economics 101, but no one wants to believe it, because it tells us that a legislative or unionized quick-fix is not going to work in the long term. If you want people to be wealthier, they have to create additional wealth.
To my mind, the real scandal is not that a large corporation doesn't pay people more. The scandal is that so many people have so little economic value. Despite (or because of) a free public school system, millions of teenagers enter the work force without marketable skills. So why would anyone expect them to be well paid?
In fact, the deal at Wal-Mart is better than at many other employers. The company states that its regular full-time hourly associates in the US average $10.86 per hour, while the mean hourly wage for retail sales associates in department stores generally is $8.67. The federal minimum wage is $6.55 per hour. Also every Wal-Mart employee gets a 10% store discount, while an additional 4% of wages go into profit-sharing and 401(k) plans.
*
As for the horror stories: Let's take a couple of random examples. Unpaid overtime? Maybe it happened at some stores in the past, but an instructional video warned me that if anyone in management ever encouraged such a heinous transgression, I should report him to his superiors immediately. Illegal aliens? That particular news story really referred to a cleaning company retained by Wal-Mart. The cleaning company hired the illegals.
You have to wonder, then, why the store has such a terrible reputation, and I have to tell you that so far as I can determine, trade unions have done most of the mudslinging. Web sites that serve as a source for negative stories are often affiliated with unions. Walmartwatch.com, for instance, is partnered with the Service Employees International Union; Wakeupwalmart.com is entirely owned by United Food and Commercial Workers International Union. For years, now, they've campaigned against Wal-Mart, for reasons that may have more to do with money than compassion for the working poor. If more than one million Wal-Mart employees in the United States could be induced to join a union, by my calculation they'd be compelled to pay more than half-billion dollars each year in dues.
Anti-growth activists are the other primary source of anti-Wal-Mart sentiment. In the town where I worked, I was told that activists even opposed a new Barnes & Noble because it was "too big." If they're offended by a large bookstore, you can imagine how they feel about a discount retailer.
The argument, of course, is that smaller enterprises cannot compete. My outlook on this is hardcore: I think that many of the "mom-and-pop" stores so beloved by activists don't deserve to remain in business.
When I first ventured from New York City to the American heartland, I did my best to patronize quaint little places on Main Street and quickly discovered the penalties for doing so. At a small appliance store, I wasn't allowed to buy a microwave oven on display. I had to place an order and wait a couple of weeks for delivery. At a stationery store where I tried to buy a file cabinet, I found the same problem. Think back, if you are old enough to do so, and you may recall that this is how small-town retailing used to function in the 1960s.
As a customer, I don't see why I should protect a business from the harsh realities of commerce if it can't maintain a good inventory at a competitive price. And as an employee, I see no advantage in working at a small place where I am subject to the quixotic moods of a sole proprietor, and can never appeal to his superior, because there isn't one.
By the same logic, I see no reason for legislators to protect Safeway supermarkets with ploys such as zoning restrictions, which just happen to allow a supermarket-sized building while outlawing a Wal-Mart SuperCenter that's a few thousand square feet bigger.
Based on my experience (admittedly, only at one location) I reached a conclusion which is utterly opposed to almost everything ever written about Wal-Mart. I came to regard it as one of the all-time enlightened American employers, right up there with IBM in the 1960s. Wal-Mart is not the enemy. It's the best friend we could ask for.
Charles Platt is a former senior writer for Wired magazine.
Saturday, February 7, 2009
CBO To The President: Your Stimulus Plan Stinks
The nonpartisan Congressional Budget Office has taken a good look at the President’s stimulus plan. It does not like what it sees:
President Obama’s economic recovery package will actually hurt the economy more in the long run than if he were to do nothing, the nonpartisan Congressional Budget Office said Wednesday.
CBO, the official scorekeepers for legislation, said the House and Senate bills will help in the short term but result in so much government debt that within a few years they would crowd out private investment, actually leading to a lower Gross Domestic Product over the next 10 years than if the government had done nothing.
CBO estimates that by 2019 the Senate legislation would reduce GDP by 0.1 percent to 0.3 percent on net. [The House bill] would have similar long-run effects, CBO said in a letter to Sen. Judd Gregg, New Hampshire Republican, who was tapped by Mr. Obama on Tuesday to be Commerce Secretary.
It would, of course, behoove Senator Gregg to tell his soon-to-be-boss that the stimulus plan being pushed by the Obama Administration will have deleterious long term effects. I am surprised that CBO actually believes the plan will work in the short term, given the mountain of evidence indicating the stimulus bill to be an impending short term failure. At bottom, even if one assumes that Keynesian stimulus can work–and let us remember that historically, it hasn’t–the current legislative package is nothing more than a mini-budget that is more dedicated to funding Democratic domestic priorities than it is to stimulating the economy. Americans asked for an economic jump start. What they got instead was a Christmas tree for Democratic special interest groups.
President Obama now wants to address the country on Monday to revive support for his stimulus plan. The impending address presumes that the problem with the current legislative effort behind the stimulus plan is a public relations issue. It is not. Rather, the problem is that the legislative package the Administration is trying to sell has no intellectual credibility behind it and would constitute a massive public policy failure. No address will work unless it includes words like “we are scrapping this turkey of a bill and starting over.”
President Obama’s economic recovery package will actually hurt the economy more in the long run than if he were to do nothing, the nonpartisan Congressional Budget Office said Wednesday.
CBO, the official scorekeepers for legislation, said the House and Senate bills will help in the short term but result in so much government debt that within a few years they would crowd out private investment, actually leading to a lower Gross Domestic Product over the next 10 years than if the government had done nothing.
CBO estimates that by 2019 the Senate legislation would reduce GDP by 0.1 percent to 0.3 percent on net. [The House bill] would have similar long-run effects, CBO said in a letter to Sen. Judd Gregg, New Hampshire Republican, who was tapped by Mr. Obama on Tuesday to be Commerce Secretary.
It would, of course, behoove Senator Gregg to tell his soon-to-be-boss that the stimulus plan being pushed by the Obama Administration will have deleterious long term effects. I am surprised that CBO actually believes the plan will work in the short term, given the mountain of evidence indicating the stimulus bill to be an impending short term failure. At bottom, even if one assumes that Keynesian stimulus can work–and let us remember that historically, it hasn’t–the current legislative package is nothing more than a mini-budget that is more dedicated to funding Democratic domestic priorities than it is to stimulating the economy. Americans asked for an economic jump start. What they got instead was a Christmas tree for Democratic special interest groups.
President Obama now wants to address the country on Monday to revive support for his stimulus plan. The impending address presumes that the problem with the current legislative effort behind the stimulus plan is a public relations issue. It is not. Rather, the problem is that the legislative package the Administration is trying to sell has no intellectual credibility behind it and would constitute a massive public policy failure. No address will work unless it includes words like “we are scrapping this turkey of a bill and starting over.”
Friday, February 6, 2009
It looks like a deal
From Powerline blog
February 6, 2009 Posted by John at 6:22 PM
"Moderate" Senators have apparently agreed on a $780 billion pork bill that reportedly will draw three or four Republican votes. The reduction in the bill's size was achieved by reducing both spending and tax cuts; I haven't seen any details on what the changes were. The process still has some distance to go; House Democrats are already talking about restoring whatever spending was cut by the Senate in conference (not the tax cuts, though).
The important thing, I think, is that Barack Obama and the Democrats own this bill, and they will own the consequences that almost certainly will result: delayed recovery (although this will be impossible to prove), unprecedented deficits, tax increases and inflation. Republicans, meanwhile, continue to come up with better alternatives, most recently John Thune's proposal to scrub the entire pork bill and:
...replace it with a $936 billion across-the-board-middle-class tax rebate for 182 million Americans. The amendment would result in a tax rebate of $5,143 for single filers and $10,286 for married couples who file jointly.
That's obviously a better idea, but it wouldn't increase the power of government, so the Democrats aren't interested.
One question: is there a single Democratic pundit who has acknowledged what an awful bill the Dems have cobbled together? No observer of any sophistication could seriously defend what the Democrats are doing, but I haven't seen any Democratic pundit show enough integrity to acknowledge what we all know. Maybe some have and I missed it; I don't read liberal pundits very assiduously.
UPDATE: Senate Republicans are rebutting press claims that the "compromise" bill costs $780 billion:
The $780 billion figure doesn't include the $46.5 billion in amendments added to the stimulus bill this week. According to our numbers, the deal is at least $827 billion, $7 billion MORE than the House passed bill. With debt, that comes to $1.175 trillion total cost for the new deal.
You know things have come to a sad pass when reporters try to tell us that a pork bill costs *only* $780 billion.
February 6, 2009 Posted by John at 6:22 PM
"Moderate" Senators have apparently agreed on a $780 billion pork bill that reportedly will draw three or four Republican votes. The reduction in the bill's size was achieved by reducing both spending and tax cuts; I haven't seen any details on what the changes were. The process still has some distance to go; House Democrats are already talking about restoring whatever spending was cut by the Senate in conference (not the tax cuts, though).
The important thing, I think, is that Barack Obama and the Democrats own this bill, and they will own the consequences that almost certainly will result: delayed recovery (although this will be impossible to prove), unprecedented deficits, tax increases and inflation. Republicans, meanwhile, continue to come up with better alternatives, most recently John Thune's proposal to scrub the entire pork bill and:
...replace it with a $936 billion across-the-board-middle-class tax rebate for 182 million Americans. The amendment would result in a tax rebate of $5,143 for single filers and $10,286 for married couples who file jointly.
That's obviously a better idea, but it wouldn't increase the power of government, so the Democrats aren't interested.
One question: is there a single Democratic pundit who has acknowledged what an awful bill the Dems have cobbled together? No observer of any sophistication could seriously defend what the Democrats are doing, but I haven't seen any Democratic pundit show enough integrity to acknowledge what we all know. Maybe some have and I missed it; I don't read liberal pundits very assiduously.
UPDATE: Senate Republicans are rebutting press claims that the "compromise" bill costs $780 billion:
The $780 billion figure doesn't include the $46.5 billion in amendments added to the stimulus bill this week. According to our numbers, the deal is at least $827 billion, $7 billion MORE than the House passed bill. With debt, that comes to $1.175 trillion total cost for the new deal.
You know things have come to a sad pass when reporters try to tell us that a pork bill costs *only* $780 billion.
Thursday, February 5, 2009
Labor secretary for Obama has tax issues also.
Is another Obama nominee in trouble? A Senate panel today postponed a vote on his nominee to be labor secretary, Hilda Solis, after USA Today laid out her husband’s tax problems. The newspaper reported today that Sam Solis paid $6,400 to settle liens dating back 16 years against his business. Shortly afterward, the committee said it would give the administration time to investigate.
It’s not clear if the information is a deal-killer. “She’s not a partner in that business,” said White House spokesman Robert Gibbs. “We’re not going to penalize her for her husband’s business mistakes.” A statement from the Senate panel, headed by Ted Kennedy, suggested Solis might survive, Reuters notes: “We will continue to work together to move this nomination forward as soon as possible.”
It’s not clear if the information is a deal-killer. “She’s not a partner in that business,” said White House spokesman Robert Gibbs. “We’re not going to penalize her for her husband’s business mistakes.” A statement from the Senate panel, headed by Ted Kennedy, suggested Solis might survive, Reuters notes: “We will continue to work together to move this nomination forward as soon as possible.”
Wednesday, February 4, 2009
Pelosi: Every Month “Stimulus” Isn’t Passed, 167% of American Population Will Lose Their Jobs”
No wonder she wants population control included in the “stimulus” plan so badly: more people means way more unemployment!
Consider: There are currently just over 305 million people in America. However, as Rep. Pelosi (D) warns us in the video below, “Every month that we do not have an economic recovery package, 500 million Americans lose their jobs.”
Wow. Now that’s some powerful stuff there. Who says Democrats from San Francisco aren’t the sharpest knives in the drawer?
Then again, maybe this is an example of the same Obamathematics that turned 12 dead in Kansas tornadoes into “10,000 dead, an entire city destroyed.” The ratios sure seem to be fairly consistent…
Consider: There are currently just over 305 million people in America. However, as Rep. Pelosi (D) warns us in the video below, “Every month that we do not have an economic recovery package, 500 million Americans lose their jobs.”
Wow. Now that’s some powerful stuff there. Who says Democrats from San Francisco aren’t the sharpest knives in the drawer?
Then again, maybe this is an example of the same Obamathematics that turned 12 dead in Kansas tornadoes into “10,000 dead, an entire city destroyed.” The ratios sure seem to be fairly consistent…
In the Spirit of Bipartisanship, I Wholly Approve This Plan
It has been probably two years since I have agreed with Markos Moulitsas about anything. But it appears that Barack Obama really is bringing change to this country, because I fully endorse the Moulitsas Deficit Reduction Act of 2009.
Here’s how it works:
Since the only time rich DC party insiders seem to get around to paying their taxes is when nominated to Obama’s cabinet, I’d require that they all be nominated to Obama’s cabinet. Suddenly, these people would discover this strange creature called the “accountant” who would quickly identify failed tax payments totaling in the tens (or even hundreds) of thousands.
Collectively, the Treasury could raise hundreds of billions, while Obama would continue to vouch for their “integrity”. It’s a perk of being part of that club.
As for the rest of us poor shlubs, don’t forget to carry that one when doing your taxes. We don’t get to be treasury secretaries when we screw up.
Well said, sir, and a fine idea to boot. Get on the horn and call your Senator today and tell them to support the Moulitsas Deficit Reduction act of 2009. The Obama Administration and our country need this revenue at this time of economic crisis.
Also, open thread, and apologies for not opening one sooner.
Here’s how it works:
Since the only time rich DC party insiders seem to get around to paying their taxes is when nominated to Obama’s cabinet, I’d require that they all be nominated to Obama’s cabinet. Suddenly, these people would discover this strange creature called the “accountant” who would quickly identify failed tax payments totaling in the tens (or even hundreds) of thousands.
Collectively, the Treasury could raise hundreds of billions, while Obama would continue to vouch for their “integrity”. It’s a perk of being part of that club.
As for the rest of us poor shlubs, don’t forget to carry that one when doing your taxes. We don’t get to be treasury secretaries when we screw up.
Well said, sir, and a fine idea to boot. Get on the horn and call your Senator today and tell them to support the Moulitsas Deficit Reduction act of 2009. The Obama Administration and our country need this revenue at this time of economic crisis.
Also, open thread, and apologies for not opening one sooner.
Tuesday, February 3, 2009
3 of Obamas picks for cabinet have tried to not pay taxes.
This Geithner, the guy that's been appointed Treasury secretary, failed to pay his taxes and his nanny's taxes, too. "No big deal. Oh, no, we need this guy so much, we can't let these little technicalities hold him back." He didn't pay his taxes! He was audited by the IRS. Now one of the things about this that's curious to me, he worked at the IMF, the International Monetary Fund and apparently when you work there you're an independent contractor, you are self-employed, as such, there are no tax deductions, you are paid the gross. Thus it is up to you to file quarterly estimates.
He didn't do this for a number of years on the basis that it just slipped his mind? That he wasn't aware? The guy ran the New York Federal Reserve. He is said to be the only guy that can run the Treasury department to bail us out of all the problems that we're in, and he doesn't know about -- I just find this hard to believe. Forgot it? The nanny thing is one thing, that's equally as problematic, but the thing about this that gets me is that he's getting a pass and claimed not to know he had to pay taxes on gross income. I know he didn't blame his wife like he didn't blame anybody else, but some of this stuff is just unbelievable.
These are the smartest people in the world, and they get away, whether they're in Chicago or in Washington, of acting in the stupidest ways you can possibly imagine educated people to act. Jose Serrano, a Democrat congressman from New York, has proposed an amendment to the constitution to repeal the Twenty-Second Amendment. Now, for those of you who voted for Obama, the Twenty-Second Amendment is the amendment which limits the presidency to two terms of four years. Jose Serrano not waiting for the inauguration, they want to eliminate the Twenty-Second Amendment so that Obama could perhaps serve forever.
Tom Daschle has withdrawn as the nominee for Secretary of Health and Human Services.
Maybe President Obama should do what he did following Bill Richardson's withdrawal as the Commerce Secretary nominee -- look to a Republican. There's a better chance of avoiding an ethics problem that way.
UPDATE: Nancy Killefer, Obama's nominee for "Chief Performance Officer," an OMB position, has also withdrawn due to tax payment issues.
I'm reminded of David Frum's story about the legendary Harvard Law School professor Paul Bator, whose course in civil procedure I had the privilege of taking when he visited at Stanford. David recalls how Bator, one of the few conservatives teaching at an elite law school, told his class the story of James Landis. Landis was a famous New Deal figure, the dean of Harvard Law School, and a friend and adviser to the Kennedy family. It was widely assumed, when John Kennedy became president, that Landis would be nominated to the Supreme Court -- until it was discovered that Landis hadn't filed tax returns for years.
Bator's comment was: "What is it with these liberals?"
JOHN adds: Maybe the commercial was the last straw.
The Obama administration is off to a surprisingly rocky start. They ran a great campaign, but after only two weeks in office the wheels are starting to come off. Nothing that can't be remedied--yet--but it's going to be a long four years if Team Obama doesn't get its act together.
He didn't do this for a number of years on the basis that it just slipped his mind? That he wasn't aware? The guy ran the New York Federal Reserve. He is said to be the only guy that can run the Treasury department to bail us out of all the problems that we're in, and he doesn't know about -- I just find this hard to believe. Forgot it? The nanny thing is one thing, that's equally as problematic, but the thing about this that gets me is that he's getting a pass and claimed not to know he had to pay taxes on gross income. I know he didn't blame his wife like he didn't blame anybody else, but some of this stuff is just unbelievable.
These are the smartest people in the world, and they get away, whether they're in Chicago or in Washington, of acting in the stupidest ways you can possibly imagine educated people to act. Jose Serrano, a Democrat congressman from New York, has proposed an amendment to the constitution to repeal the Twenty-Second Amendment. Now, for those of you who voted for Obama, the Twenty-Second Amendment is the amendment which limits the presidency to two terms of four years. Jose Serrano not waiting for the inauguration, they want to eliminate the Twenty-Second Amendment so that Obama could perhaps serve forever.
Tom Daschle has withdrawn as the nominee for Secretary of Health and Human Services.
Maybe President Obama should do what he did following Bill Richardson's withdrawal as the Commerce Secretary nominee -- look to a Republican. There's a better chance of avoiding an ethics problem that way.
UPDATE: Nancy Killefer, Obama's nominee for "Chief Performance Officer," an OMB position, has also withdrawn due to tax payment issues.
I'm reminded of David Frum's story about the legendary Harvard Law School professor Paul Bator, whose course in civil procedure I had the privilege of taking when he visited at Stanford. David recalls how Bator, one of the few conservatives teaching at an elite law school, told his class the story of James Landis. Landis was a famous New Deal figure, the dean of Harvard Law School, and a friend and adviser to the Kennedy family. It was widely assumed, when John Kennedy became president, that Landis would be nominated to the Supreme Court -- until it was discovered that Landis hadn't filed tax returns for years.
Bator's comment was: "What is it with these liberals?"
JOHN adds: Maybe the commercial was the last straw.
The Obama administration is off to a surprisingly rocky start. They ran a great campaign, but after only two weeks in office the wheels are starting to come off. Nothing that can't be remedied--yet--but it's going to be a long four years if Team Obama doesn't get its act together.
Monday, February 2, 2009
PROMISES, PROMISES: No lobbyists at WH, except ...
WASHINGTON – Barack Obama promised a "clean break from business as usual" in Washington. It hasn't quite worked out that way.
From the start, he made exceptions to his no-lobbyist rule. And now, embarrassing details about Cabinet-nominee Tom Daschle's tax problems and big paychecks from special interest groups are raising new questions about the reach and sweep of the new president's promised reforms.
Maybe he shouldn't have promised so much, some open-government advocates say. They're willing to cut him some slack — for now.
On Jan. 21, the day after his inauguration, Obama issued an executive order barring any former lobbyists who join his administration from dealing with matters or agencies related to their lobbying work. Nor could they join agencies they had lobbied in the previous two years.
However, William J. Lynn III, his choice to become the No. 2 official at the Defense Department, recently lobbied for military contractor Raytheon. And William Corr, tapped as deputy secretary at Health and Human Services, lobbied through most of last year as an anti-tobacco advocate. Corr says he will take no part in tobacco matters in the new administration.
"Even the toughest rules require reasonable exceptions," said White House Press Secretary Robert Gibbs.
That was a big step back from Obama's unambiguous swipe at lobbyists in November 2007, while campaigning for the Democratic presidential nomination. "I don't take a dime of their money," he said, "and when I am president, they won't find a job in my White House."
The waivers granted for Lynn and Corr caused some in Washington to wince. But others, including many longtime advocates of tougher ethical standards, suggest it all says as much about deeply ingrained practices — and even necessities — in Washington as about a new president.
"Sometimes you can over-promise," said former Sen. Warren Rudman, a Republican from New Hampshire.
"This government is very complicated," he said. "Often you'll need people with a lot of experience in certain areas," and current or former lobbyists sometimes fit that bill best.
"It was probably a mistake to come down so hard on lobbyists," said Melanie Sloan, who is not shy about criticizing lobbyists or politicians as executive director of Citizens for Responsibility and Ethics in Washington. "I think the Obama folks' intentions were great here," she said. "But sometimes you realize you can't actually govern on just what you campaigned on."
Sloan and others said embarrassments over Daschle, one of several top Obama appointees with a history of influencing government for clients, should not detract from the president's first-day vow to sharply limit the role of lobbyists in his administration.
Daschle, a former senator tapped to head Health and Human Services, is not technically a lobbyist. But he was paid more than $5.2 million over the past two years as he advised health insurers and hospitals and worked in other industries such as energy and telecommunications.
Fred Wertheimer of Democracy21 is one of Washington's best-known advocates of more open and honest government. He called Obama's executive order "unprecedented and almost revolutionary in nature" and "a direct attack on the culture of Washington and the way business is done here."
"A few waivers will not undermine it," he said, provided they are justified and limited.
The best way to limit the influence of wealthy special interests, Wertheimer said, is to increase public funding for presidential elections and restrict the amount that private business can pump into campaigns and politics. That could pave the way for tighter restrictions on influence-peddling in Congress, he said.
Obama declined public financing for his campaign so he could raise and spend hundreds of millions of dollars on his own. Some people saw that a virtual death knell for campaign public financing, but Wertheimer said he believes Obama will deliver on aides' promises to help "repair the system."
Daschle, the former Senate majority leader from South Dakota, strikes many in Washington as a good example of why the revolving door between government and highly paid private-sector jobs can be troubling, but also why an outright ban on such movements would be unwise.
Even Republicans praised Daschle's cerebral, soft-spoken approach to government and politics, and his expertise on subjects including health care. He didn't choose to leave Congress for a high-paying job, but was defeated in a close re-election bid in 2004.
Once out, he was attractive and valuable to all sorts of government-regulated industries, even if he never registered as a lobbyist who could make straightforward appeals for or against legislation affecting his clients.
He received more than $2 million over two years as a senior policy adviser for the Washington law firm Alston & Bird. He also earned more than $2 million in consulting fees from InterMedia Advisors LLC of New York, an investment firm specializing in buyouts and industry consolidation. An associate let Daschle use his car and driver, for which Daschle had to pay late taxes and interest.
Several health groups also paid Daschle $15,000 or more to speak to their gatherings.
"He welcomed every opportunity to make his case to the American public at large, and the health industry in particular, that America can't afford to ignore the health care crisis any longer," said his spokeswoman Jenny Backus.
Wertheimer, of Democracy21, said that rather than dwell on Daschle's problems or the Corr and Lynn waivers, he focuses on Obama's executive order and the hope of progress to come on public financing of campaigns.
The executive order "laid down a mark," Wertheimer said. "More has to be done, and tough battles have to be won."
___
Associated Press writer Julie Pace contributed to this report.
From the start, he made exceptions to his no-lobbyist rule. And now, embarrassing details about Cabinet-nominee Tom Daschle's tax problems and big paychecks from special interest groups are raising new questions about the reach and sweep of the new president's promised reforms.
Maybe he shouldn't have promised so much, some open-government advocates say. They're willing to cut him some slack — for now.
On Jan. 21, the day after his inauguration, Obama issued an executive order barring any former lobbyists who join his administration from dealing with matters or agencies related to their lobbying work. Nor could they join agencies they had lobbied in the previous two years.
However, William J. Lynn III, his choice to become the No. 2 official at the Defense Department, recently lobbied for military contractor Raytheon. And William Corr, tapped as deputy secretary at Health and Human Services, lobbied through most of last year as an anti-tobacco advocate. Corr says he will take no part in tobacco matters in the new administration.
"Even the toughest rules require reasonable exceptions," said White House Press Secretary Robert Gibbs.
That was a big step back from Obama's unambiguous swipe at lobbyists in November 2007, while campaigning for the Democratic presidential nomination. "I don't take a dime of their money," he said, "and when I am president, they won't find a job in my White House."
The waivers granted for Lynn and Corr caused some in Washington to wince. But others, including many longtime advocates of tougher ethical standards, suggest it all says as much about deeply ingrained practices — and even necessities — in Washington as about a new president.
"Sometimes you can over-promise," said former Sen. Warren Rudman, a Republican from New Hampshire.
"This government is very complicated," he said. "Often you'll need people with a lot of experience in certain areas," and current or former lobbyists sometimes fit that bill best.
"It was probably a mistake to come down so hard on lobbyists," said Melanie Sloan, who is not shy about criticizing lobbyists or politicians as executive director of Citizens for Responsibility and Ethics in Washington. "I think the Obama folks' intentions were great here," she said. "But sometimes you realize you can't actually govern on just what you campaigned on."
Sloan and others said embarrassments over Daschle, one of several top Obama appointees with a history of influencing government for clients, should not detract from the president's first-day vow to sharply limit the role of lobbyists in his administration.
Daschle, a former senator tapped to head Health and Human Services, is not technically a lobbyist. But he was paid more than $5.2 million over the past two years as he advised health insurers and hospitals and worked in other industries such as energy and telecommunications.
Fred Wertheimer of Democracy21 is one of Washington's best-known advocates of more open and honest government. He called Obama's executive order "unprecedented and almost revolutionary in nature" and "a direct attack on the culture of Washington and the way business is done here."
"A few waivers will not undermine it," he said, provided they are justified and limited.
The best way to limit the influence of wealthy special interests, Wertheimer said, is to increase public funding for presidential elections and restrict the amount that private business can pump into campaigns and politics. That could pave the way for tighter restrictions on influence-peddling in Congress, he said.
Obama declined public financing for his campaign so he could raise and spend hundreds of millions of dollars on his own. Some people saw that a virtual death knell for campaign public financing, but Wertheimer said he believes Obama will deliver on aides' promises to help "repair the system."
Daschle, the former Senate majority leader from South Dakota, strikes many in Washington as a good example of why the revolving door between government and highly paid private-sector jobs can be troubling, but also why an outright ban on such movements would be unwise.
Even Republicans praised Daschle's cerebral, soft-spoken approach to government and politics, and his expertise on subjects including health care. He didn't choose to leave Congress for a high-paying job, but was defeated in a close re-election bid in 2004.
Once out, he was attractive and valuable to all sorts of government-regulated industries, even if he never registered as a lobbyist who could make straightforward appeals for or against legislation affecting his clients.
He received more than $2 million over two years as a senior policy adviser for the Washington law firm Alston & Bird. He also earned more than $2 million in consulting fees from InterMedia Advisors LLC of New York, an investment firm specializing in buyouts and industry consolidation. An associate let Daschle use his car and driver, for which Daschle had to pay late taxes and interest.
Several health groups also paid Daschle $15,000 or more to speak to their gatherings.
"He welcomed every opportunity to make his case to the American public at large, and the health industry in particular, that America can't afford to ignore the health care crisis any longer," said his spokeswoman Jenny Backus.
Wertheimer, of Democracy21, said that rather than dwell on Daschle's problems or the Corr and Lynn waivers, he focuses on Obama's executive order and the hope of progress to come on public financing of campaigns.
The executive order "laid down a mark," Wertheimer said. "More has to be done, and tough battles have to be won."
___
Associated Press writer Julie Pace contributed to this report.
Michele Bachmann: The perils of spending like it's 1929:
By Michele Bachmann
Star Tribune
January 29, 2009
It's been almost one year and $1.5 trillion since the government began its historic slate of financial bailouts -- and all we have to show for it is red ink dripping from our nation's balance sheet.
Congress has been busy writing checks to everyone from Detroit automakers to Wall Street day traders. We're now nearing a historic $11 trillion debt. Each time Congress goes to the taxpayer ATM, it claims that this will be the bailout that gets the economy moving again.
For instance, on the night the Senate passed the $700 billion Wall Street bailout, the Senate's finance chairman, Max Baucus, confidently declared: "I'm very proud of what we did. This is going to mark the time when we've turned the corner. And we will begin to see this financial crisis beginning to abate."
But things got only worse. And despite the serious risks to our long-term stability, this failed strategy of big-government stimulus continues in full force. This week, in fact, President Obama and the Democratic Congress asked for another near-trillion in federal deficit spending.
Their plan promises an agenda styled after the economic policies of the Great Depression -- government jobs programs, enormous infrastructure spending, huge amounts of pork and a slew of government handouts. But before we return to the 1930s, we may want to review a little history.
The stock market collapse of 1929 brought a crashing halt to the Roaring Twenties. But President Herbert Hoover's response to the economic crisis ensured that it became a genuine catastrophe. Contrary to popular perception, Hoover did not respond to the downturn with inaction or indifference -- rather, he pursued a series of misguided big-government adventures that lengthened and deepened our economic woes.
Hoover not only dramatically hiked income and import taxes, but he instituted big-government spending programs all but identical to those being debated today. Hoover's Reconstruction Finance Corporation tried to ease economic pain by funneling tax money to state governments, local governments, banks and a variety of businesses. His Federal Home Loan Bank Act extended loans in an effort to increase low-income housing -- beginning the ill-fated history of federal intervention in the housing market.
These measures proved a dismal failure, and things got only worse. In the 1932 campaign, Franklin Roosevelt actually attacked Hoover for his big-government policies, decrying Hoover's presidency as "the greatest spending administration in peacetime in all of history."
Yet, once elected, Roosevelt not only maintained Hoover's programs, he used them as a foundation for his titanic New Deal expenditures. He even expanded Hoover's failed housing program and launched the now-infamous mortgage giant Fannie Mae. And even in the face of a staggering 25 percent unemployment, FDR held fast to the big-government philosophy -- jobs programs, handouts, tax hikes -- and, as a result, presided over a decade of economic misery.
FDR's own treasury secretary, Henry Morgenthau, had to admit as much in 1939: "We are spending more than we have ever spent before, and it does not work. ... We have never made good on our promises. I say after eight years of this administration we have just as much unemployment as when we started. And an enormous debt to boot!"
Instead of pursuing the tragic economic policies of Hoover and FDR, we should follow the model of presidents who successfully met the economic challenges of their times and ushered in prosperity. In recent memory, Presidents John F. Kennedy and Ronald Reagan dramatically cut taxes to stimulate growth and create jobs -- and their policies succeeded.
When Jimmy Carter left office, the economy was slumping, unemployment was higher than today and inflation was in the double digits. Reagan's economic policy, which included massive tax cuts, reversed a worsening situation, and the economy surged on every level -- 17 million jobs were created, employee compensation increased, inflation was conquered and the longest peacetime boom in our history was born.
So with two paths ahead -- one that emphasizes tax reform and one that emphasizes big government -- the right path is clear. We either learn from the mistakes of history or we repeat them
Michele Bachmann, R-Minn., is a member of the U.S. House of Representatives.
© 2009 Star Tribune. All rights reserved.
Star Tribune
January 29, 2009
It's been almost one year and $1.5 trillion since the government began its historic slate of financial bailouts -- and all we have to show for it is red ink dripping from our nation's balance sheet.
Congress has been busy writing checks to everyone from Detroit automakers to Wall Street day traders. We're now nearing a historic $11 trillion debt. Each time Congress goes to the taxpayer ATM, it claims that this will be the bailout that gets the economy moving again.
For instance, on the night the Senate passed the $700 billion Wall Street bailout, the Senate's finance chairman, Max Baucus, confidently declared: "I'm very proud of what we did. This is going to mark the time when we've turned the corner. And we will begin to see this financial crisis beginning to abate."
But things got only worse. And despite the serious risks to our long-term stability, this failed strategy of big-government stimulus continues in full force. This week, in fact, President Obama and the Democratic Congress asked for another near-trillion in federal deficit spending.
Their plan promises an agenda styled after the economic policies of the Great Depression -- government jobs programs, enormous infrastructure spending, huge amounts of pork and a slew of government handouts. But before we return to the 1930s, we may want to review a little history.
The stock market collapse of 1929 brought a crashing halt to the Roaring Twenties. But President Herbert Hoover's response to the economic crisis ensured that it became a genuine catastrophe. Contrary to popular perception, Hoover did not respond to the downturn with inaction or indifference -- rather, he pursued a series of misguided big-government adventures that lengthened and deepened our economic woes.
Hoover not only dramatically hiked income and import taxes, but he instituted big-government spending programs all but identical to those being debated today. Hoover's Reconstruction Finance Corporation tried to ease economic pain by funneling tax money to state governments, local governments, banks and a variety of businesses. His Federal Home Loan Bank Act extended loans in an effort to increase low-income housing -- beginning the ill-fated history of federal intervention in the housing market.
These measures proved a dismal failure, and things got only worse. In the 1932 campaign, Franklin Roosevelt actually attacked Hoover for his big-government policies, decrying Hoover's presidency as "the greatest spending administration in peacetime in all of history."
Yet, once elected, Roosevelt not only maintained Hoover's programs, he used them as a foundation for his titanic New Deal expenditures. He even expanded Hoover's failed housing program and launched the now-infamous mortgage giant Fannie Mae. And even in the face of a staggering 25 percent unemployment, FDR held fast to the big-government philosophy -- jobs programs, handouts, tax hikes -- and, as a result, presided over a decade of economic misery.
FDR's own treasury secretary, Henry Morgenthau, had to admit as much in 1939: "We are spending more than we have ever spent before, and it does not work. ... We have never made good on our promises. I say after eight years of this administration we have just as much unemployment as when we started. And an enormous debt to boot!"
Instead of pursuing the tragic economic policies of Hoover and FDR, we should follow the model of presidents who successfully met the economic challenges of their times and ushered in prosperity. In recent memory, Presidents John F. Kennedy and Ronald Reagan dramatically cut taxes to stimulate growth and create jobs -- and their policies succeeded.
When Jimmy Carter left office, the economy was slumping, unemployment was higher than today and inflation was in the double digits. Reagan's economic policy, which included massive tax cuts, reversed a worsening situation, and the economy surged on every level -- 17 million jobs were created, employee compensation increased, inflation was conquered and the longest peacetime boom in our history was born.
So with two paths ahead -- one that emphasizes tax reform and one that emphasizes big government -- the right path is clear. We either learn from the mistakes of history or we repeat them
Michele Bachmann, R-Minn., is a member of the U.S. House of Representatives.
© 2009 Star Tribune. All rights reserved.
Here is what the republicans supported for a bailout.
The House of Representatives passed a so-called stimulus package last week that, when the more than $300 billion in interest payments are added in will cost the American taxpayers over $1.1 trillion. I could not support this package, which I felt included far too little actual stimulus, included far too much plain old political pork, and added way too much debt to the already over-burdened American taxpayer, as well as generations of taxpayers to come.
The idea of investing in shovel-ready transportation and infrastructure projects to stimulate the economy is one worthy of Congress’ support. It would quickly inject money into the economy by getting construction and related job sectors working – while also taking care of important infrastructure projects that have been on the nation’s “to do list” for some time. Unfortunately, the package passed by the House last week, included such funding almost as an afterthought. It was overshadowed by hundreds of billions of dollars for brand-new programs, the National Endowment for the Arts, federal government office buildings, and more.
I supported an alternative package that really would stimulate the economy by putting more money in the hands of small businesses and families that can really use it to create jobs, purchase goods, and more. Amongst other things, the Republican Economic Recovery Plan would:
• Reduce the lowest individual tax rates from 15% to 10% and from 10% to 5%, helping more than 500,000 filers in Minnesota’s Sixth District alone.
• Allow small businesses to take a tax deduction equal to 20% of their income.
• Provide a home-buyers credit of $7500 for those who can make a minimum down-payment of 5%.
I also supported a motion to recommit, or to send the Democrat package back to committee to make the following changes:
• Increase investment in shovel-ready transportation and infrastructure projects by $60.25 billion.
• Eliminate $135.8 billion in funding for 32 new discretionary programs created by the bill.
• Eliminate Fiscal Year 2010 funding for 17 existing federal programs – funding that jumps the gun on a budgeting process that hasn’t even begun yet.
• Reduce funding for the National Endowment for the Arts, Americorps, GSA federal office buildings, and NOAA Habitat Restoration.
Last week, I also published a column in the Star Tribune that sought to put the massive $825-billion stimulus package in some historical context. In case you missed it, you can read it here:
The idea of investing in shovel-ready transportation and infrastructure projects to stimulate the economy is one worthy of Congress’ support. It would quickly inject money into the economy by getting construction and related job sectors working – while also taking care of important infrastructure projects that have been on the nation’s “to do list” for some time. Unfortunately, the package passed by the House last week, included such funding almost as an afterthought. It was overshadowed by hundreds of billions of dollars for brand-new programs, the National Endowment for the Arts, federal government office buildings, and more.
I supported an alternative package that really would stimulate the economy by putting more money in the hands of small businesses and families that can really use it to create jobs, purchase goods, and more. Amongst other things, the Republican Economic Recovery Plan would:
• Reduce the lowest individual tax rates from 15% to 10% and from 10% to 5%, helping more than 500,000 filers in Minnesota’s Sixth District alone.
• Allow small businesses to take a tax deduction equal to 20% of their income.
• Provide a home-buyers credit of $7500 for those who can make a minimum down-payment of 5%.
I also supported a motion to recommit, or to send the Democrat package back to committee to make the following changes:
• Increase investment in shovel-ready transportation and infrastructure projects by $60.25 billion.
• Eliminate $135.8 billion in funding for 32 new discretionary programs created by the bill.
• Eliminate Fiscal Year 2010 funding for 17 existing federal programs – funding that jumps the gun on a budgeting process that hasn’t even begun yet.
• Reduce funding for the National Endowment for the Arts, Americorps, GSA federal office buildings, and NOAA Habitat Restoration.
Last week, I also published a column in the Star Tribune that sought to put the massive $825-billion stimulus package in some historical context. In case you missed it, you can read it here:
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