February Blog

Part 1                                              

1.) From the perspective of Washington, he saw the party system as distracting and serving to "enfeeble the Public Administration," and among other things kindling "the animosity of one against another." Given the fundamental disagreements in both policy and the role of government between the existing factions of his day, the Federalists and the Republicans, Washington's warning was unrealistic and idealistic. Our two-party structure today is the bedrock of our system of federal government. (Curtis)

2.) "Where is the security for property, for reputation, for life," Washington asked, "if the sense of religious obligation desert the oaths we make when we pursue justice in our courts?" In the modern secularism of America, Washington's advice is still followed in the "so help me God" portion of public oaths. (Curtis)

3.) Washington wanted no unnecessary accumulation of public debt without the revenue to back it up. This was a bit of very sound advice that we have not followed. (Curtis)

4.) In the context of the world situation during Washington's time, this was good advice, because our country was weak. In modern context, Washington could never have foreseen the forces that have made our country dependent on its treaties, alliances, energy sources, and economic ties with other countries. (Curtis)

5.) Coming from a soldier whose desperate efforts during our revolutionary struggle caused him endless frustration with a stingy, unsupported Continental Congress. Washington warned against "overgrown military establishments, which under any form of government are inauspicious to liberty." Given his own ruthless suppression of the Whiskey Rebellion this advice somehow rings a bit inconsistent, if not hypocritical (Curtis). Washington was a great soldier and indispensable leader to his country who rose to fame and glory at the precise time our young country needed him. His farewell address after his 45 years of dedicated service was well-meant and undoubtedly heartfelt. Those who followed him actually made most of his advice impossible for us to follow. (Curtis)

SUMMARY

         "It serves to distract the Public Councils, and enfeeble the Public Administration.... agitates the Community with ill-founded jealousies and false alarms; kindles the animosity of one.... against another.... it opens the door to foreign influence and corruption... thus the policy and the will of one country are subjected to the policy and will of another.” Stresses the importance of religion and morality. “Where is the security for property, for reputation,  for life, if the sense of religious obligation desert the oaths, which are the instruments of investigation in Courts of Justice?” On stable public credit. “...cherish public credit. One method of preserving it is to use it as sparingly as possible... avoiding likewise the accumulation of debt.... it is essential that you...bear in mind, that towards the payments of debts there must be Revenue, that to have Revenue there must be taxes; that no taxes can be devised, which are not... inconvenient and unpleasant...” Warns against permanent foreign alliances. “It is our true policy to steer clear of permanent alliances with any portion of the foreign world...” Washington is trying to point out that the party system is a distracting and serving to the enfeeble Public Administration. On that point, that with a party system, we would be distracted and all vote against each other.

Part 2

1.) "Our people expect their president and the Congress to find essential agreement on issues of great moment, the wise resolution of which will better shape the future of the nation." In his farewell address, Ike described his relationship with Congress, which was controlled by Democrats for three quarters of his presidency, as "mutually interdependent" and praised Congress for collaborating with his administration on "most vital issues." Now, isn’t that a novel idea? (LH) 

2.) "Crises there will continue to be. In meeting them, whether foreign or domestic, great or small, there is a recurring temptation to feel that some spectacular and costly action could become the miraculous solution to all current difficulties." Since the terrorist attacks of 9/11, the U.S. has engaged in two land wars at the cost of more than $3 trillion(LH). Nearly 6,000 U.S. troops have given their lives to fight these wars. Yet Americans still face terrorist threats around the world and at home. Terrorist threats are used to justify spending on arms and men that have little to do with the threats(LH). Those threats will take perhaps decades to vanquish mainly through intelligence and policy work. The most important challenge we face today, fixing our economy, is another crisis that eludes any quick fix. President Obama should be more forthright with the American people about the long-term nature of this challenge.  Only then will he be able to make headway in implementing the necessary long-term solutions.(LH)

3.) "Each proposal must be weighed in the light of a broader consideration: The need to maintain balance in and among national programs—balance between the private and the public economy, balance between cost and hoped for advantage—balance between the clearly necessary and the comfortably desirable; balance between our essential requirements as a nation and the duties imposed by the nation upon the individual; balance between actions of the moment and the national welfare of the future."(LH) Ike was telling us that there is no one-size-fits-all solution to fixing the U.S. economy. Only a balanced approach, including some aspects of tax reform, entitlement adjustments, and investment in intellectual and physical and infrastructure will reenergize the American economy.(LH)

4.) "As we peer into society's future, we—you and I, and our government—must avoid the impulse to live only for today, plundering, for our own ease and convenience, the precious resources of tomorrow(LH). We cannot mortgage the material assets of our grandchildren without risking the loss also of their political and spiritual heritage." Just ponder the $14 trillion debt that America now faces. Just think about its burden on generations to come.(LH)

5.) "In the councils of government, we must guard against the acquisition of unwarranted influence, whether sought or unsought, by the military-industrial complex(LH). The potential for the disastrous rise of misplaced power exists and will persist." Adjusting for inflation, the average Eisenhower defense budget was just over $400 billion. The comparable number for FY 2010 is more than $700 billion. Another number is also worrisome: 80 percent(LH). A recent study by the Boston Globe found that during 2004-2008, 80 percent of retiring three- and four-star officers went to work as consultants or defense executives. But let’s not forget the other party with a stake in stoking the military-industrial complex. Ike originally intended to refer to the military-industrial complex as an "iron triangle"—the third and omitted part being Congress(LH).

SUMMARY

There’s a way to save Michigan taxpayers $5.7 billion without cutting a single program, eliminating any government job or touching public wages. That’s more than enough to balance the state’s budget, repeal the Michigan Business Tax, fix Michigan’s roads and still have money left over. Michigan can do all this through government employee perks parity. Compensation comes from wages and benefits like paid leave, employer-paid retirement contributions, health insurance and other benefits. In recent years, the cost of these benefits in the public sector has exploded while the private sector has been getting them under control. MI gov’t sponsored pensions were phased out 15 years ago. So the people on them are starting to die off. Current retirement benefits are 4% salary, with up to 3% match. That’s not too far off public sector. Also, state employees are constantly being hit with increases increases in copays on doctor visits, prescriptions and their plans. Not to mention the furlough days that have been passed out. Also, this year, employees got hit with a 3% “tax” to help pay for retirement benefits- basically giving back the 3% raise union employees got, and it was a hit for non-union employees who didn’t get a raise -although where they claim the money is going is an utter fabrication. The money goes to general fund, not retirement. 

December Blog

                                                         Adam Smith
      Adam Smith was born in June 1723 and died in July 1790 in Kirkland, Scotland. Adam mainly believed in four principles: freedom to try, freedom to buy, freedom to sell, and freedom to fail. (Adam) In 1776, just when the United States was growing, Adam Smith published his famous book, The Wealth of Nations. In the book, Adam said wealth is not gold and silver but the essentials of life – food, clothes, houses, transportation, communications, schools, good roads, factories, and cultivated farms. He said that if people want an increased standard of living and prosperity, goods and services should be abundant and cheap. (Adam) To make this happen, there had to be specialized production where buying and selling is done in a free market. (Adam) This “free market system” is based upon the natural law of “supply and demand." Natural law marketing, according to Adam, is democratic. Everyone improves their position by making a profit at what they are doing. (Adam) The secret to the successful operation of a free market is competition. For Adam, competition leads to greater quantity (higher production/more profits), which leads to improved quality (to attract customers), which leads to lower prices (to beat the competition), which leads to a greater variety of goods and services to satisfy customer demands. (Adam) For Adam, the greatest threat to a free market economy is government interference. This usually occurs when the government is involved in fixing prices, fixing wages, controlling production, controlling distribution, or subsidizing production. The role of government is simply to serve as a referee and to prevent illegal force, fraud (phony stocks and bonds), monopoly (make entry into the market difficult for competition), and debauchery (drugs, and other forms of vice). (Adam)


                                           Capitalism/Free Market System
       Capitalism is an economic model that calls for individual households and privately owned businesses to control the economy. (Case) The Scottish economist Adam Smith stated the basic argument for capitalism. He presented his ideas in a book called The Wealth of Nations (1776). Smith maintained that a government should not interfere with a nation's economy. Instead, a government should let individuals act as "free agents" who pursue their own self-interest. Such free agents, would naturally act in ways that would bring around the greatest good for society. They would seem to act "as if guided by an invisible hand." (Case) Businesses and households exchange labor, capital, goods and services in markets. A market is a place in which people buy and sell things. In a capitalist economy, the prices of labor, capital, and goods and services are determined mainly by market forces: supply and demand. (Case) Supply is the amount of a good or service that is offered for sale. Demand is the amount of a good or service that users can and would like to buy at alternative prices. Generally, the market will force prices to fall when supply exceeds demand. The market will force prices to rise when demand exceeds supply. (Case) Another important feature of markets is competition. Competition rises when many different suppliers try to sell the same kinds of things to the same buyers. A supplier who charges lower prices or improves the quality of his or her products can take buyers away from competitors. (Case) Capitalist economies rely on free markets, which permit people to engage in economic activities largely free from government control. Adam Smith, in his classic work The Wealth of Nations (1776), set the principles of a free-market system. (Fish) According to Smith, society benefits if individuals are allowed to pursue their own self-interest in markets where competition sets the prices that allocate goods among buyers and sellers. Smith believed that competition would, without control or direction, act “as if by an invisible hand” to determine market prices. (Fish) Many factors go into making the “invisible hand” work in a free market. Sellers prefer to sell their goods for higher prices to make more profit. Buyers prefer to pay lower prices so that they can buy more items with their income. If the sellers of a good ask too high a price, the quantity demanded of that good will be less than the quantity supplied. Sellers with lower costs who are having trouble finding buyers will compete by asking a lower price. Buyers will then be willing to buy more of the good. (Fish) On the other hand, when sellers ask too low a price, quantity demanded exceeds quantity supplied. Buyers who want the item but are having trouble buying it will then compete by raising the prices they offer. Sellers will then be willing to sell more of the good. (Fish) The competition on both sides of the market ultimately leads to a set of market prices where the quantity supplied is equal to the quantity demanded. When this occurs, the market is said to be in equilibrium. In a capitalist economy, there are numerous types of markets. (Fish) The wages employers pay to workers are set in labor markets. Real estate markets determine the rents and selling prices for houses and factories. Interest rates, which in loans represent the price of obtaining goods sooner rather than later, are set in capital markets for lending and investing. (Fish)


                                                  Auto Industry Bailout
       The auto industry bailout has pros and cons. The Big Three Auto Industry (BTAI) was at it's highest point in 2004. In 2006, that highest point dropped tremendously. (Amad) The U.S. Government bailed out the industry and was a good and a bad idea. The pros of the Big Three Industry bailout was that if the BTAI gain back their wealth and thrive once again, it could and would bring the economy rising once again. The reason they fell was because the Real Estate Companies fell and had a domino effect on the BTAI. Some cons are that if the BTAI does not come back then it would fall even further dragging the economy even more down with it. People are upset that the government is using the peoples money from taxes to revive and help the BTAI when the government is not helping the people of it's own country. The BTAI bailout can be a positive action if the BTAI rises again, however, the people of the U.S. are still unhappy with this action.