From the perspective of many Republicans, the choice of Sarah Palin seemed to be a brilliant one. Mrs. Palin is an attractive, ambitious, tough, witty, popular, pro-life Republican Governor that connects with “Joe Six Pack”. She’s got a great story, a nice smile, and a killer instinct. Don’t forget she also took on some of the members of her own party and won, which complements McCain’s “Maverick” brand. What a smart choice! Or was it…
For the reasons listed above Sarah Palin was on my top 5 list of people that McCain might choose, but I didn’t really pay her much attention because I had convinced myself, that John wasn’t really going to try to court the Hillary vote. I figured that Mr. McCain knew that so few of Hillary’s supporters would toss their issues aside and would automatically run towards the female in the election that it wouldn’t be worth going after their votes. Additionally, I figured that at least McCain’s campaign staff would know that the person that started the “PUMA PAC” had donated money to him, so the people leading “PUMA” outrage were already in his corner furthering my belief that John wouldn’t pick Sarah. I figured that the McCain campaign would know that the economy would be the big issue in this election and therefore he would end up choosing Mitt Romney, even though they reportedly don’t get along very well.
You can imagine my surprise when he announced the nomination of Sarah Palin as VP at the Republican Convention. I looked at my husband and said, “Well, it looks like I have some more research to do.” Accordingly, I spent a good part of that following weekend searching through articles from Alaskan news papers and basically found out that all of the characteristics I listed above were correct, but my research found some characteristics that just may end up being bad news for McCain, particularly if he wins…
What else did I learn in my research both that weekend and over the past few weeks?
Well, for one Sarah Palin is no dummy. Palin has a killer political instinct. She may not be the most knowledgeable or well spoken person on any given subject, but she does have a knack for knowing what people want to hear and giving them just that accompanied by a side of home-town pie. While this may be good for a campaign, it’s not necessarily what would be good for a VP, particularly the VP to a President that is a 72 year old cancer survivor that has already lived longer than both his father and grandfather. I am not trying to play the age card, I don’t think his age rules him out at all, it’s just that statistically, he has a higher probability of passing away in office than other candidates like Romney or Giuliani do, which means Sarah Palin has a higher probability of becoming President. With her increased probability of becoming President, she better start hitting the books.
Sarah Palin is a very influential person. I mean this in its truest sense. She has the ability to gain the affection and trust of others and then use that affect what those people think. This of course does not mean that everyone will always agree with her and do what she wants, but many will. Given this fact, she could easily use a velvet glove to get her agenda on the board regardless of what her boss thinks. It would not be much of a challenge for her to strike up alliances with McCain’s advisors and cabinet members and use them to help push through what she thinks should be done.
Sarah loves loyalty. Who doesn’t want someone on their ticket who’s loyal? Oh, I guess I should clarify; Sarah loves those that are loyal to her. In fact, in Alaska she often hired her friends from high school to fill government jobs regardless of their past experience. And what happened to those that were not 100% loyal to her and everything she wanted, she had no use for them. Sarah frequently fired people for not “towing the line”. But, wait a minute, wasn’t she within her rights to do this? Yes, she was in fact within her rights to fire people for this or any other reason but, should everyone get fired if they disagree with their boss? Does anyone here wish that someone had spoken out to Bush about Iraq, or deregulation? I know I do. You see, in Sarah’s mind, if the Mayor/Governor/President says this is what I want to do, and then everyone else should fall in line. She does not tolerate dissenters. She says that if you don’t agree with her that’s OK and you can tell her that but once she says “Thanks but No Thanks”, it’s time for you to shut up and carry out her plans. I guess there are people out there that like this type of leadership, but I do not. It was people willing to go against the power brokers that founded and worked to perfect this country. It has always been the dissenting voice that has made the biggest impact; from Franklin, and Jefferson, and Adams, to Lincoln to Parks to King. The dissenting voice has always been welcome in America, and I would like it to stay that way.
Sarah Palin is very ambitious. She worked to become a sportscaster, a business owner, a mayor, and a governor. I don’t think there is much doubt at this point that she really wants to be VP and ultimately President. Is this bad; No, not in and of itself. It would be a challenge to find a VP that didn’t at one time or another want to be President, but in the case of Mrs. Palin, her ambition seems to affect the way she does her job. She works harder for the next job than she does at the current job. Additionally, when you combine it with the other characteristics listed above, it could prove to be difficult management situation for McCain.
Sarah is deeply religious. Not just your ordinary go to church every Sunday say a bedtime prayer kind of religious, but the crusading end of days is nigh kind of religious. Again, there may be plenty of people that are comfortable or even comforted by someone like this being in the White House, but certainly not me. Now I don’t care if someone is religious or not, your religion is none of my business, but when you bring your religion into your public policy making it very quickly becomes my business. I am not worried about the “Oh, I am Christian so I wouldn’t vote for gay marriage” type of bringing religion into public policy (which is still wrong). I am worried about the type of religious that brings the thought process of “Well, God gave me the thought of bombing Iran so it must be the right thing to do and if thousands of people die in the process, it’s OK because it’s all a part of God’s plan and he will make sure it all turns out well” into public policy. John McCain as a normal go to church kind of Christian should be a little afraid of having someone like this in his administration.
She thinks that the role of VP is whatever she wants it to be. She said (on video) that she would have to make sure that the VP job would be enough to keep her busy before she accepted the job and then she said (also on video) that she’s glad the Constitution would allow for more expansion of power when working with the Senate. Well that is only true if you interpret the Constitution’s wording of “The Vice President of the United States shall be the President of the Senate, but shall have no vote role unless they be equally divided” as meaning that as the “President” of the Senate you can do whatever you want. Historically, the role of “President of the Senate” has meant that you just make sure that proper order is followed and you cast the tie breaking vote, not that you are the Senate’s Operations Manager and you lobby the Senate to do what the President of the United States wants. It should prove to be very interesting (and scary) to see what happens if she gets her wish.
So what does all of this mean for McCain? Many of us realize for now, the future of the Republican Party is Sarah Palin. There are already rumors circulating that regardless of whether or not McCain wins, Palin will be running for President in 2012. Who do you think McCain’s staffers will be aligned with; McCain who has used phrases like “In my term” not “in my first term” mind you but “in my term” meaning only one term as President or Sarah Palin who has used the phrase “in a Palin/McCain administration”? My money is on Sarah. McCain’s staffers will want to stay employed and their best way of making that happen is to be loyal to Sarah rather than to John. When you add this to the list of characteristics listed above, McCain will have a tough time keeping in control of his own administration. I would suggest that McCain go have a little talk with Mr. Bush about what it’s like to lose control of your own administration and party. This could end up being as poor of a VP choice for McCain if he wins as it was for America.
Thanks for reading!
PS. Here are a few links to get you started on your own research:
http://yestodemocracy.org/2008/06/29/puma-founded-by-republicans/
http://www.adn.com/sarah-palin/story/515512.html
http://www.adn.com/opinion/story/496302.html
http://www.adn.com/front/story/492964.html
http://www.nytimes.com/2008/09/14/us/politics/14palin.html?_r=1&hp&oref=slogin
http://www.washingtonpost.com/wp-dyn/content/article/2008/09/13/AR2008091302596_pf.html
http://www.juneauempire.com/stories/011804/sta_palin.shtml
http://www.salon.com/news/feature/2008/09/15/bess/index1.html
http://www.youtube.com/watch?v=YVwG8WMACQk
http://www.youtube.com/watch?v=Wk1cCPaTmPk
Showing posts with label public welfare. Show all posts
Showing posts with label public welfare. Show all posts
Thursday, 9 October 2008
Friday, 13 June 2008
The Oil Crisis
I have heard many Republicans/Republican Leaning pundits on news & radio shows recently that what is keeping gas prices so high is that the Dems won't let us drill for more oil here in the US.
Of course I am supporting Obama, so I am a little bothered by these claims, but even if I were not, I just think it is silly to point our fingers at one group and say it's all their fault. Because of this, I was inspired to write this post, after doing some research of course.
Just for the record, I am an Independent that is supporting Obama.
While many Dems may be blocking drilling in places like ANWR, Alaska (which just so happens to be a Wildlife Refuge, hence the name A-rctic N-ational W-ildlife R-efuge) and this may account for part of why oil prices are high, it is by no means the only or prime factor involved.
Factor 1 - Production/Refining
Current US Oil Consumption = 20.7 million barrels/day
Current US Refining Capacity = 17.4 million barrels/day
And yet, we have fewer refineries now than we did in 1982 (149 today compared to 301 in 1982) and we have not built any new refineries since 1976. Why? Simple. They are too expensive. Refineries can take 10+ years to get permitted and built and can cost upwards of $3.5 Billion to build. With this type of time and capital expenditure, it could take 13+ years for a single refinery to become profitable. Companies just aren't wiling to do this.
With this being said, I would love for these "Drill Heads" to explain to me how we are going to refine all this "new oil" that we pull out of ANWR and other areas, when we already can not refine enough gasoline to meet our current needs. We are already importing refined oil as well as unrefined oil. Do they just want us to drill for more oil here in the US so we can then ship it to another country to be refined and then ship it back to the US for public use? Wouldn't this be costly as well?
Factor 2 - Non US Production
Most of us have probably also heard the occasional person blame OPEC for our current oil woes. While again, they certainly have an influence on oil prices (just as refining does) they are also only one of the factors involved. What most people don't know is that we actually import less than 50% of our oil from OPEC countries. In fact most recently it was 47.28%. Clearly production control over 47% of our oil will certainly affect our prices and I am by no means suggesting that it doesn't. What we fail to recognize is that we are not the only market they sell to, and as far as world demand goes, they have not had huge outcry from all of their purchasers to increase production. Additionally, they produce oil for profit, and if it were your business, why would you sell your product for less than what you could get for it? What can we do about it? Well, we could start buying more oil from Non OPEC countries that prove they are willing to sell us oil for less.
Factor 3 - The Open Market
As with other commodities like gold, oil is traded on the open market. You can trade oil and gasoline just like you can do with gold, stocks, and bonds. This also impacts our oil prices due to people expecting oil to become more and more valuable over time causing them to purchase this commodity, which in turn sends the price up. If we increase refining/production or reduce demand we could impact prices, but again we are not the only people wanting to buy and use gas and other oil products, so the amount of the impact is unknown.
Factor 4 - Inflation/Dollar Devaluation
As we all know, inflation has a major impact on the price of goods and services. Over the past 40 years, the US dollar has lost over 80% of it's purchasing power, meaning and item that cost you 16 cents in 1968 would cost you 1 dollar today. When you look at it from the perspective of 1 dollar it may not seem like much, if you look at from the perspective of a house, it is huge. Take for example my home. Today it costs $150,000 for my 3/2 suburban home but in 1968 it would have cost a mere $24,000. That's a pretty big difference, a $126,000 difference in fact. Overtime, as the dollar declines in value (or as inflation goes up whichever way you prefer to look at it) this raises the cost of what we buy. Gas in 1968 a gallon of gas cost about 34 cents/gallon. Today it costs an average of $4.02/gallon. If inflation were the only cause then gas would be around $2.15 - wouldn't we all love that! :)
Factor 5 - Oil Company Profits
I have also heard people on the left (my peeps) complaining that oil companies are to blame. The greed of these companies is the great unspoken evil of our time. While again corporate greed is a factor, it is by no means the main factor. When Bush took office in January of 2001 (technically February since he was not sworn in until the 20th of Jan) the price of oil averaged $29.00/barrel or $1.52/gallon for gasoline. Today oil closed at $134.86 per barrel or $4.02 per gallon. If you do a simple ratio on this, if oil companies increased their price per gallon at the same rate as the increase of oil prices then a gallon of gas would cost you $7.07. So, even though the Big Oil companies have been making record profit, they have not been increasing the price of gas at the same rate that the price of oil has been increasing. They have however, made quite a bit of money off of the other products derived form oil such as fertilizer.
All in all, I think it's fair to say that there are many factors involved in the increase of oil and gas prices. Every thing from demand to production, to the market and more. I write this to ask you to think about it more in depth the next time you hear any politician or pundit blame any one of these factors for our current situation. My suggestions? Try to shop smart for gas (not all gas stations are priced equally) and do your best to reduce your own dependence on oil. You could try to get a car that gets better gas mileage, or see if your boss will let you work from home, or work an alternative schedule like 4 ten hour days instead of 5 eight hour days, or take public transportation at least 1 day per week. I know that these suggestions are not feasible for everyone, which is why I believe that our only true recourse is to starting investing in/using alternate fuels.
Thanks for reading!
Don't believe me? Check it out for yourself:
http://www.eia.doe.gov/neic/quickfacts/quickoil.html
http://en.wikipedia.org/wiki/Arctic_Refuge_drilling_controversy
http://www.factcheck.org/askfactcheck/does_the_us_lack_sufficient_oil_refining.html
http://www.westegg.com/inflation/
Of course I am supporting Obama, so I am a little bothered by these claims, but even if I were not, I just think it is silly to point our fingers at one group and say it's all their fault. Because of this, I was inspired to write this post, after doing some research of course.
Just for the record, I am an Independent that is supporting Obama.
While many Dems may be blocking drilling in places like ANWR, Alaska (which just so happens to be a Wildlife Refuge, hence the name A-rctic N-ational W-ildlife R-efuge) and this may account for part of why oil prices are high, it is by no means the only or prime factor involved.
Factor 1 - Production/Refining
Current US Oil Consumption = 20.7 million barrels/day
Current US Refining Capacity = 17.4 million barrels/day
And yet, we have fewer refineries now than we did in 1982 (149 today compared to 301 in 1982) and we have not built any new refineries since 1976. Why? Simple. They are too expensive. Refineries can take 10+ years to get permitted and built and can cost upwards of $3.5 Billion to build. With this type of time and capital expenditure, it could take 13+ years for a single refinery to become profitable. Companies just aren't wiling to do this.
With this being said, I would love for these "Drill Heads" to explain to me how we are going to refine all this "new oil" that we pull out of ANWR and other areas, when we already can not refine enough gasoline to meet our current needs. We are already importing refined oil as well as unrefined oil. Do they just want us to drill for more oil here in the US so we can then ship it to another country to be refined and then ship it back to the US for public use? Wouldn't this be costly as well?
Factor 2 - Non US Production
Most of us have probably also heard the occasional person blame OPEC for our current oil woes. While again, they certainly have an influence on oil prices (just as refining does) they are also only one of the factors involved. What most people don't know is that we actually import less than 50% of our oil from OPEC countries. In fact most recently it was 47.28%. Clearly production control over 47% of our oil will certainly affect our prices and I am by no means suggesting that it doesn't. What we fail to recognize is that we are not the only market they sell to, and as far as world demand goes, they have not had huge outcry from all of their purchasers to increase production. Additionally, they produce oil for profit, and if it were your business, why would you sell your product for less than what you could get for it? What can we do about it? Well, we could start buying more oil from Non OPEC countries that prove they are willing to sell us oil for less.
Factor 3 - The Open Market
As with other commodities like gold, oil is traded on the open market. You can trade oil and gasoline just like you can do with gold, stocks, and bonds. This also impacts our oil prices due to people expecting oil to become more and more valuable over time causing them to purchase this commodity, which in turn sends the price up. If we increase refining/production or reduce demand we could impact prices, but again we are not the only people wanting to buy and use gas and other oil products, so the amount of the impact is unknown.
Factor 4 - Inflation/Dollar Devaluation
As we all know, inflation has a major impact on the price of goods and services. Over the past 40 years, the US dollar has lost over 80% of it's purchasing power, meaning and item that cost you 16 cents in 1968 would cost you 1 dollar today. When you look at it from the perspective of 1 dollar it may not seem like much, if you look at from the perspective of a house, it is huge. Take for example my home. Today it costs $150,000 for my 3/2 suburban home but in 1968 it would have cost a mere $24,000. That's a pretty big difference, a $126,000 difference in fact. Overtime, as the dollar declines in value (or as inflation goes up whichever way you prefer to look at it) this raises the cost of what we buy. Gas in 1968 a gallon of gas cost about 34 cents/gallon. Today it costs an average of $4.02/gallon. If inflation were the only cause then gas would be around $2.15 - wouldn't we all love that! :)
Factor 5 - Oil Company Profits
I have also heard people on the left (my peeps) complaining that oil companies are to blame. The greed of these companies is the great unspoken evil of our time. While again corporate greed is a factor, it is by no means the main factor. When Bush took office in January of 2001 (technically February since he was not sworn in until the 20th of Jan) the price of oil averaged $29.00/barrel or $1.52/gallon for gasoline. Today oil closed at $134.86 per barrel or $4.02 per gallon. If you do a simple ratio on this, if oil companies increased their price per gallon at the same rate as the increase of oil prices then a gallon of gas would cost you $7.07. So, even though the Big Oil companies have been making record profit, they have not been increasing the price of gas at the same rate that the price of oil has been increasing. They have however, made quite a bit of money off of the other products derived form oil such as fertilizer.
All in all, I think it's fair to say that there are many factors involved in the increase of oil and gas prices. Every thing from demand to production, to the market and more. I write this to ask you to think about it more in depth the next time you hear any politician or pundit blame any one of these factors for our current situation. My suggestions? Try to shop smart for gas (not all gas stations are priced equally) and do your best to reduce your own dependence on oil. You could try to get a car that gets better gas mileage, or see if your boss will let you work from home, or work an alternative schedule like 4 ten hour days instead of 5 eight hour days, or take public transportation at least 1 day per week. I know that these suggestions are not feasible for everyone, which is why I believe that our only true recourse is to starting investing in/using alternate fuels.
Thanks for reading!
Don't believe me? Check it out for yourself:
http://www.eia.doe.gov/neic/quickfacts/quickoil.html
http://en.wikipedia.org/wiki/Arctic_Refuge_drilling_controversy
http://www.factcheck.org/askfactcheck/does_the_us_lack_sufficient_oil_refining.html
http://www.westegg.com/inflation/
Thursday, 15 May 2008
The National Interest
We often hear politicians talk about doing what's in our "National Interest" but few of us actually understand what is meant by this. Not that I proclaim myself to be an expert, but as someone who has watch the news religiously for the past 25 years, has spent a great deal of time around politicians, military contractors, and diplomats, and as someone who devours political books/movies, I do feel I have developed a fairly accurate view of political speaking and thinking.
It is my impression that most of us (us being the average American) think the term "National Interest" refers to doing what is best for the American citizenry. It makes sense, right? The citizens make up the nation, so the National Interest is the citizen's interest. However, this is not always the way it is viewed in Washington DC.
To understand the term "National Interest" we first have to define it. It's most simply (and probably most accurately) defined as doing what is needed to help create, protect, and improve the major industries that provide the base needs of the population. These base needs/industries include Food, Housing, Energy, Money, Jobs, Security, Transportation, Health Care, and Communications. Why these? Well, let's see:
So, if doing what is in the National Interest would be doing what is best for these industries then obviously, protecting these industries would also be in the interest of the American citizenry. This is the tact that I think Washington DC should take, but unfortunately at some point in the last 50 years many in Washington DC have confused protecting an industry with protecting corporations, and those company's bottom lines.
It is one thing to protect an overall industry through legislation/regulation, and it is something entirely different to pass legislation to bail out financially insolvent/inefficient companies, and to subsidize financially profitable companies.
Some in DC act as if one major company fails then that company's entire industry would fail. If a large company was to fail, trust me, there are many other companies that would love to fill in the gap that would be left behind in the market. I know that no elected official/politician would want to be associated with allowing a company to close (because of potential job loss), but they also need to understand that one specific company closing does not automatically mean that the employees of that company would not be employed by the businesses that step in to pick up the slack.
Example 1: If a major airline was to fail, then the other airlines would pick up the markets that the failed company was serving. The flights would still need to happen, those flights would still be US flights, and the planes and crews used for those flights would still be needed. Though an airline would not be required to pick up the existing planes/routes/staffs of these flights, it would make sense for the other airlines to purchase the planes and hire their crews to service these routes, rather than going out and trying to purchase all new planes, and hiring/training all new flight crews to cover routes that have been served for years.
Example 2: The US government has provided funding to banks so they can purchase other banks that were failing due to poor management or poor investment decisions. In one particular case recently the bank that was being given the loan made in the area of 4 Billion dollars days before the 29 Billion dollar loan was issued even though the bank they were purchasing was being sold for 236 Million and held assets of 30 Billion. All of this means that the purchasing bank received a loan for 29 Billion and assets of 30 Billion for the purchase of a bank for 236 Million. Did this loan really need to take place?
Now, I know that a lot of you will also want me to point out the "subsidies" that the Oil Companies get as another example of the government ruling in favor of specific companies, but I can not do this. In fact, it is an example of the right way to protect an industry that is necessary to our economy and general welfare. In the case of Oil Companies, the industry as a whole is given a break, not just specific companies. The Oil industry is allowed to reduce it's taxable earnings by 15% in exchange for continuing to produce oil & gas. Small companies and large companies are both allowed to take advantage of this benefit. This means that Oil & Gas companies pay a corporate tax of 20% rather than the standard rate of 35%. I am OK with this type of industry protection and wish it applied to more industries such as Farming, Transportation, and Health Care.
What I am not OK with, is that US Oil Companies that have subsidiaries overseas do not have to pay tax on the revenue born out of their overseas offices as long as the money stays overseas. In essence, if Exxon opens an office in Dubai, then they don't have to pay any tax on the money generated from their Dubai office as long as the money stays in a Dubai bank. I don't think Exxon cares what bank account their checks are drafted from, do you? This overseas tax exemption applies to more than just the oil industry and has been taken advantage of by many of the US's largest companies. In my opinion, this type of legislation is unfair because it unduly favors large Companies rather than protecting an industry. It is unfair because small companies are not able to open outlets in foreign lands just to receive this same benefit.
Additionally, we have offered tax credits to companies that have been shipping jobs overseas. This is different from the oil tax credits, which allow them to pay lower taxes, this tax credit is implemented as a way for companies with overseas workforces (like manufacturing) to use a different method to calculate their profit and allows them to bring their overseas profit back to the US at substantially reduced tax rates. By the way, oil companies also qualify for this because under the bill (HR 4520) oil production is now seen as manufacturing. This is crazy to me. We should be offering these benefits to companies that keep their manufacturing in the US not offering it to companies that sending manufacturing jobs away from us.
Do these things serve the National Interest? Do they help secure the US and it's people or do they serve Corporations instead? Many would argue that the workers, though pensions and 401Ks, are invested in these companies and so if the companies are protected then so are the workers and by default the economy, but since when will a pension or 401K pay for the mortgage and electric bill of a 40 year old worker that has been laid off?
I think we need to get back to looking out for the American people first and it's companies second.
It is my impression that most of us (us being the average American) think the term "National Interest" refers to doing what is best for the American citizenry. It makes sense, right? The citizens make up the nation, so the National Interest is the citizen's interest. However, this is not always the way it is viewed in Washington DC.
To understand the term "National Interest" we first have to define it. It's most simply (and probably most accurately) defined as doing what is needed to help create, protect, and improve the major industries that provide the base needs of the population. These base needs/industries include Food, Housing, Energy, Money, Jobs, Security, Transportation, Health Care, and Communications. Why these? Well, let's see:
- Food - You can't survive if you don't have food/water.
- Housing - Shelter is needed for both survival and comfort.
- Energy - While technically you could physically survive without it, it certainly has become a part of everyday life and allows you to live longer and more comfortably. It helps to keep you warm in the winter, cool in the summer, and to properly store and cook your food. It also assists transportation and many other luxuries.
- Money/Banking - Once again, you may be able to survive without it but, I think we can all agree that the vast majority of people in the US need it to survive.
- Jobs/Education - Most people do not have a trust fund or are able to be full-time investors so, we do need jobs in order to get the money that helps to ensure our survival and we could not obtain or perform these jobs without a certain amount of education.
- Security - If you are constantly concerned about being injured or killed, you will not be very effective in the other areas of your life needed for your survival.
- Transportation - You need this to get to work, the grocery store, hospital and other places which all help to ensure your survival.
- Health Care - While like other areas, you may be able to survive without it, it definitely helps you to live longer and more comfortably.
- Communications - Again, you may be able to survive without it, but without it, the other industries listed above would be severely hindered which would impact your life greatly.
So, if doing what is in the National Interest would be doing what is best for these industries then obviously, protecting these industries would also be in the interest of the American citizenry. This is the tact that I think Washington DC should take, but unfortunately at some point in the last 50 years many in Washington DC have confused protecting an industry with protecting corporations, and those company's bottom lines.
It is one thing to protect an overall industry through legislation/regulation, and it is something entirely different to pass legislation to bail out financially insolvent/inefficient companies, and to subsidize financially profitable companies.
Some in DC act as if one major company fails then that company's entire industry would fail. If a large company was to fail, trust me, there are many other companies that would love to fill in the gap that would be left behind in the market. I know that no elected official/politician would want to be associated with allowing a company to close (because of potential job loss), but they also need to understand that one specific company closing does not automatically mean that the employees of that company would not be employed by the businesses that step in to pick up the slack.
Example 1: If a major airline was to fail, then the other airlines would pick up the markets that the failed company was serving. The flights would still need to happen, those flights would still be US flights, and the planes and crews used for those flights would still be needed. Though an airline would not be required to pick up the existing planes/routes/staffs of these flights, it would make sense for the other airlines to purchase the planes and hire their crews to service these routes, rather than going out and trying to purchase all new planes, and hiring/training all new flight crews to cover routes that have been served for years.
Example 2: The US government has provided funding to banks so they can purchase other banks that were failing due to poor management or poor investment decisions. In one particular case recently the bank that was being given the loan made in the area of 4 Billion dollars days before the 29 Billion dollar loan was issued even though the bank they were purchasing was being sold for 236 Million and held assets of 30 Billion. All of this means that the purchasing bank received a loan for 29 Billion and assets of 30 Billion for the purchase of a bank for 236 Million. Did this loan really need to take place?
Now, I know that a lot of you will also want me to point out the "subsidies" that the Oil Companies get as another example of the government ruling in favor of specific companies, but I can not do this. In fact, it is an example of the right way to protect an industry that is necessary to our economy and general welfare. In the case of Oil Companies, the industry as a whole is given a break, not just specific companies. The Oil industry is allowed to reduce it's taxable earnings by 15% in exchange for continuing to produce oil & gas. Small companies and large companies are both allowed to take advantage of this benefit. This means that Oil & Gas companies pay a corporate tax of 20% rather than the standard rate of 35%. I am OK with this type of industry protection and wish it applied to more industries such as Farming, Transportation, and Health Care.
What I am not OK with, is that US Oil Companies that have subsidiaries overseas do not have to pay tax on the revenue born out of their overseas offices as long as the money stays overseas. In essence, if Exxon opens an office in Dubai, then they don't have to pay any tax on the money generated from their Dubai office as long as the money stays in a Dubai bank. I don't think Exxon cares what bank account their checks are drafted from, do you? This overseas tax exemption applies to more than just the oil industry and has been taken advantage of by many of the US's largest companies. In my opinion, this type of legislation is unfair because it unduly favors large Companies rather than protecting an industry. It is unfair because small companies are not able to open outlets in foreign lands just to receive this same benefit.
Additionally, we have offered tax credits to companies that have been shipping jobs overseas. This is different from the oil tax credits, which allow them to pay lower taxes, this tax credit is implemented as a way for companies with overseas workforces (like manufacturing) to use a different method to calculate their profit and allows them to bring their overseas profit back to the US at substantially reduced tax rates. By the way, oil companies also qualify for this because under the bill (HR 4520) oil production is now seen as manufacturing. This is crazy to me. We should be offering these benefits to companies that keep their manufacturing in the US not offering it to companies that sending manufacturing jobs away from us.
Do these things serve the National Interest? Do they help secure the US and it's people or do they serve Corporations instead? Many would argue that the workers, though pensions and 401Ks, are invested in these companies and so if the companies are protected then so are the workers and by default the economy, but since when will a pension or 401K pay for the mortgage and electric bill of a 40 year old worker that has been laid off?
I think we need to get back to looking out for the American people first and it's companies second.
Tuesday, 4 March 2008
Minimum Wage...how does one live off it?
I have long been curious as to how one would live off minimum wage. Yes, I am very fortunate that this required research on my part!
To tell the truth, I have only had 1 minimum wage job in my life and when I did I still lived at home with my parents. Like many who were lucky enough to catch a few breaks in life, I took advantage of my upbringing, but I have always wondered what life would be like if I had not been dealt such a good hand.
The following is an account of what someone actually gets for their labor at a full-time minimum wage job.
Current Minimum Wage: $5.85 per hour US
Full Time Hours: 2080
Total Annual Income: $12,168.00
Total Monthly Income: $1014.00
Monthly Taxes (SS, Medicare, Income): $197.07
Net Monthly Income: $816.93
Yes, folks that's it. Someone working a full 40 hours per week for 52 weeks a year NETS a grand total of $816.93 per month!
I don't know about where you all live, but in Austin, TX where I am, you would have a hard time putting a roof over your head much less doing anything else. With that being said, there are people who make this, and they do need to survive, so how could you make this happen?
I guess we need to start by identifying the critical components to one's survival.
Next, we have transportation. Now some of you may have friends willing to take you to and from work for free, but most of us do not, so we need to figure out how to get to and from work. Now maybe you already have a car or you have the ability to buy a used car in cash. If you did then you could plan on spending an average of $40.00 per month on liability insurance (see iii.org) and at least another $40.00 per month on gasoline (provided you lived close to work or didn't go on any joy rides) plus another $20.00/mo for vehicle maintenance/registration. Money left over: $366.93 - $100.00 = $266.93
If you do not have a car, don't worry you can get a monthly unlimited bus pass in Austin for $10.00/mo. Frankly, as far as money goes, you would be better off taking the bus rather than having a car anyway. Money left over: $366.93 - $10.00 = $356.93
This brings us to the all important category of Food! Yes, we all need and love to eat! Now, according to wiki.answers.com the average US household spends $3240.00 annually on food. This seems low to me, but I'll go with it. Considering that the average household in the US is 3 people and most adults eat more than kids that would mean that the average adult would spend about $1200.00 on groceries annually which comes out to $100.00 monthly. Surplus cash:
w/car: $266.93 - $100.00 = $166.93
w/o car: $356.93 - $100.00 = $256.93
Next we have clothing. Regardless of how you feel about clothes it is a fact that in our society it is a necessity and most likely at a minimum wage job you will have some sort of uniform/dress code mandated to you, so you will in fact have to spend money on clothing. If you shop at the discount retailers like Wal-Mart, Target, TJ Maxx, and Ross, then you could plan on spending an average of $25.00/mo. If you are thrifty and shop at second hand stores like Goodwill and garage sales, you may be able to save a few dollars off of the 25.00/mo average. Money Left:
w/car: $166.93 - $25.00 = $141.93
w/o car: $256.93 - $25.00 = $231.93
Lastly, we have Health Care. According to a document from meps.ahrq.gov the average US adult spends about $984.00 per year (out of pocket) on health care. As far as I could tell, this seems to include insured and uninsured people and all types of health care costs such as prescriptions, emergencies and dental visits . So with that, we know that one can expect to, minimally, spend $82.00/mo on health care related expenses. Money left:
w/car: $141.93 - $82.00 = $59.93
w/o car: $231.93 - $82.00 = $149.93
Fun Money/Savings/Emergency = $60.00 to $150.00/month
After all of this, it would seem that someone earning minimum wage could in fact survive in the US, providing that they work a full 40 hours per week and either don't miss a day or get paid for their sick days/time off. Unfortunately, we know all too well that many companies in America that pay low wages either will not pay for sick days/time off or will not schedule their workers for a full 40 hour week. I know from personal experience and through discussions with friends that many companies will not schedule someone for more than 38 hours, which obviously would make it even more difficult for someone to survive on $5.85/hour.
I hope that you keep this in mind the next time one of your local/state/federal politicians tries to convince you that the minimum wage does not need to be increased. In my opinion, everyone deserves a living wage and clearly $5.85/hour is not it.
Thank you and good luck.
PS. In all fairness and disclosure, the minimum wage will be increasing over the next 17 months to $7.25/hour, but we all know that with inflation and the like, so will our expenses.
To tell the truth, I have only had 1 minimum wage job in my life and when I did I still lived at home with my parents. Like many who were lucky enough to catch a few breaks in life, I took advantage of my upbringing, but I have always wondered what life would be like if I had not been dealt such a good hand.
The following is an account of what someone actually gets for their labor at a full-time minimum wage job.
Current Minimum Wage: $5.85 per hour US
Full Time Hours: 2080
Total Annual Income: $12,168.00
Total Monthly Income: $1014.00
Monthly Taxes (SS, Medicare, Income): $197.07
Net Monthly Income: $816.93
Yes, folks that's it. Someone working a full 40 hours per week for 52 weeks a year NETS a grand total of $816.93 per month!
I don't know about where you all live, but in Austin, TX where I am, you would have a hard time putting a roof over your head much less doing anything else. With that being said, there are people who make this, and they do need to survive, so how could you make this happen?
I guess we need to start by identifying the critical components to one's survival.
- Housing
- Transportation
- Food
- Clothing
- Health care
Next, we have transportation. Now some of you may have friends willing to take you to and from work for free, but most of us do not, so we need to figure out how to get to and from work. Now maybe you already have a car or you have the ability to buy a used car in cash. If you did then you could plan on spending an average of $40.00 per month on liability insurance (see iii.org) and at least another $40.00 per month on gasoline (provided you lived close to work or didn't go on any joy rides) plus another $20.00/mo for vehicle maintenance/registration. Money left over: $366.93 - $100.00 = $266.93
If you do not have a car, don't worry you can get a monthly unlimited bus pass in Austin for $10.00/mo. Frankly, as far as money goes, you would be better off taking the bus rather than having a car anyway. Money left over: $366.93 - $10.00 = $356.93
This brings us to the all important category of Food! Yes, we all need and love to eat! Now, according to wiki.answers.com the average US household spends $3240.00 annually on food. This seems low to me, but I'll go with it. Considering that the average household in the US is 3 people and most adults eat more than kids that would mean that the average adult would spend about $1200.00 on groceries annually which comes out to $100.00 monthly. Surplus cash:
w/car: $266.93 - $100.00 = $166.93
w/o car: $356.93 - $100.00 = $256.93
Next we have clothing. Regardless of how you feel about clothes it is a fact that in our society it is a necessity and most likely at a minimum wage job you will have some sort of uniform/dress code mandated to you, so you will in fact have to spend money on clothing. If you shop at the discount retailers like Wal-Mart, Target, TJ Maxx, and Ross, then you could plan on spending an average of $25.00/mo. If you are thrifty and shop at second hand stores like Goodwill and garage sales, you may be able to save a few dollars off of the 25.00/mo average. Money Left:
w/car: $166.93 - $25.00 = $141.93
w/o car: $256.93 - $25.00 = $231.93
Lastly, we have Health Care. According to a document from meps.ahrq.gov the average US adult spends about $984.00 per year (out of pocket) on health care. As far as I could tell, this seems to include insured and uninsured people and all types of health care costs such as prescriptions, emergencies and dental visits . So with that, we know that one can expect to, minimally, spend $82.00/mo on health care related expenses. Money left:
w/car: $141.93 - $82.00 = $59.93
w/o car: $231.93 - $82.00 = $149.93
Fun Money/Savings/Emergency = $60.00 to $150.00/month
After all of this, it would seem that someone earning minimum wage could in fact survive in the US, providing that they work a full 40 hours per week and either don't miss a day or get paid for their sick days/time off. Unfortunately, we know all too well that many companies in America that pay low wages either will not pay for sick days/time off or will not schedule their workers for a full 40 hour week. I know from personal experience and through discussions with friends that many companies will not schedule someone for more than 38 hours, which obviously would make it even more difficult for someone to survive on $5.85/hour.
I hope that you keep this in mind the next time one of your local/state/federal politicians tries to convince you that the minimum wage does not need to be increased. In my opinion, everyone deserves a living wage and clearly $5.85/hour is not it.
Thank you and good luck.
PS. In all fairness and disclosure, the minimum wage will be increasing over the next 17 months to $7.25/hour, but we all know that with inflation and the like, so will our expenses.
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