Wednesday, November 28, 2012

Why Republicans Should Raise Taxes on the Wealthy

First, the reason is NOT because raising taxes is a good idea.  It's not.

The first goal needs to be reducing the national debt.  Few disagree that our debt load is unsustainable.  Few disagree that if we continue down the current path, financial ruin is inevitable.

And no amount of taxes can can fix that problem.  If you were to be able to tax 100% of the income of every single person in America that makes more than $100,000, you would still not have raised enough revenue to cover the annual national debt.

So, then, why exactly should the Republicans consider raising taxes?  Because they, and the rest of our nation, are being held hostage by the Democrats.  The Democrats are the lone party that is currently in a position to accept solutions outside of tax increases, and they won't.

But I thought the Democrats said that the Republicans are the ones holding us hostage?

They did.  Frankly, it's a lie.

The Democrats have the strength in Congress to make demands.  The Republicans have basically been given two options by the Dems:

  1. Raise taxes on those making $250,000+;
  2. Raise taxes on everybody.
The Democrats, though, have more options available to them:

  1. Raise taxes on those making $250,000+;
  2. Raise taxes on everybody;
  3. Raise taxes on some other group of people than the two listed above;
  4. Don't raise taxes at all.
The GOP has only been given two options, both of which raise taxes.  The Democrats, though, basically have an infinite number of options at their disposal, with or without the Republicans.  Who does it sound like is REALLY holding the other party hostage?

So, why should the GOP raise taxes?

Because they don't have any option in front of them that doesn't do that.  They can either raise taxes on those making more than $250K, or they can allow taxes to go up on everyone.  That's it.  Those are their only choices.  In this particular case, the Republicans have to choose to raise the taxes on the wealthy to prevent the taxes from being raised on everyone else.  It's not a pretty choice, but it is the only choice that they have.

Instead of keeping up the non-winnable fight, though, the GOP can choose to agree to the raises now, and spend the next month playing their newly gained leverage to achieve other compromises.

President Obama and the Democrats have thus far only drawn one line in the sand: taxes must go up for those making more than $250,000.  Outside of that, they say they are willing to make compromises.  Republicans need to jump all over that.  Since they have no choice but to agree to the tax increases, then they should draw their own line in the sand.

"We'll agree to your tax increases for the wealthy, if you agree that we'll balance the budget."

If the Republicans make that compromise, then they can turn the tables.  First, they turn the tables on the Democrats that have successfully convinced Americans that the GOP are the bad guys here.  Second, if you can force that compromise, you might actually take the first steps to seeing a brighter financial future for our children, grand-children, and further generations down the road.

P.S. - Tip to the GOP: When you ask for a compromise that balances the budget, invoke the name of Bill Clinton and the fact that he, for all intents and purposes, did just that.

Monday, November 19, 2012

Unions and the Hostess Situation

Unions are interesting creatures. And for decades now, they have been one of the more controversial parts of the American work force.

Union supporters claim that unions are great for workers, and exist only for that benefit. The other side believes unions but unfair restrictions and financial burdens on employers.

The truth, as with most things, probably lies somewhere in between.

Sometimes the relationship between a union and an employer reaches critical mass.  The unions demand more, the employer demands more, and a stalemate ensues. Often, those stalemates lead to strikes by the union or lockouts by the employer. In the end, both sides normally end up compromising something that they could have before the work stoppage, and work resumes with both sides feeling a little bit better for having puffed out their chest to make a point.

By now you've heard about Hostess.  Hostess is an example of what happens when a union and an employer reaches critical mass.  And in this particular situation, it is an example of what happens when unions refuse to back down against an employer that is already up against a wall.

Businesses Will Fight to Survive

Businesses don't like to fail.  It's bad for communities.  It's bad for employees. It's bad

Once in a while, a small neighborhood business will close its doors when Mom & Pop get to old to keep at it, and no one else wants to take over.  Other than that, though...there's only one reason a business fails: it just can't afford to keep the operation running anymore.

That's other.  A business will fight and fight to survive...but if it can't make money, it will inevitably fold.  No profitable business ever closes.  Ever.

Unions Will Fight to Survive

It's no different for a union, really.  They can only do what they do if they continue to receive dues.  If there is not a benefit to belonging to a union, the members will eventually turn against the union and drive them out of the shop.

To due this, the unions will fight relentlessly for its employees.  Originally formed to see that workers were treated fairly, unions now work to get workers far more than their skills and abilities would be worth in any other place.

The unions will sometimes go so intensely after a fight, that they put the employees in a worse situation.  Sometimes, a union will draw such an unreasonable line in the sand that the employer can't ever meet the demands.

When an Unstoppable Force Meets an Immovable Object

So, what have we learned?  That sometimes an unstoppable force (The union demanding certain wages and benefits for its members) does run into an immovable object (a company so teetering on the edge of survival that it simply cannot concede any further.)  And when that impact occurs, there is only one possible annihilation.

And that's exactly what happened when the Bakery, Confectionery, Tobacco Workers and Grain Millers Union failed to step back from its demands against Hostess.  The unstoppable force refused to take a different path and instead proceeded full steam ahead into the immovable object.  BAM!  Annihilation. 

I'm not sure what the Bakers' Union was thinking, either.  Hostess had made it clear to the unions (Teamsters also represented a large portion of workers in the company) that they absolutely could not afford the demands made to them.  The Teamsters listened.  The Teamsters even went to the Bakers' Union and told them they did not believe Hostess would be able to survive if they conceded to the union demands.

Ultimately, Survival is the Union's Call

The Bakers' Union refused to yield.  The immovable Hostess object, and their employees, were completely at the mercy of the union.  The immovable object could not move, it could only wait.  Hostess knew there were only three possible outcomes:

  1. The union backed down, and Hostess survived, for now; or, 
  2. the union kept at it until Hostesses relented, at which time Hostess would close; or 
  3. Hostess just put themselves out of their misery and closed on their own.

Note that no matter what happens to Hostess and their employees  at this stage the burden of the results are completely on the shoulders of the union.  If the Union backs down, there's a shot at survival.   If the Union refuses to step down, the Hostess fails and it's employees join the ranks of the unemployed. Hostess no longer has a say.

So what decision did the Bakers' Union make?  Well, of course you know the answer to that already.  The Union, despite being clearly warned of the consequences, made the decision that they would rather be unemployed than employed.

The Decision Affected Thousands Outside of the Union

Unions in states like Indiana complain about right-to-work laws.  They claim that by allowing non-union workers into a union shop, that non-members will be taking advantage of the union's work without having to pay dues.

Well, obviously that concern is not reciprocal.  Hostess employed approximately 18,500 people.  Of those people, only 6,700 belonged to the Bakers' Union.  Yet the decision of 6.700 people to not back down ended up costing almost 12,000 other people their jobs, too.

One Final Thought

I don't hate unions.  I do, though, find it hard to accept that any organization that supposedly exists solely for the purpose of helping its members will allow the members to become unemployed before allowing them to concede.

I don't blame you for fighting, just have to know when to say when.  This time you forced a large company out of business.  This time, those 18,500 unemployed people are on you.

Saturday, November 17, 2012

Rupert Back to Work

Rupert Boneham has wasted no time getting back to work at his Rupert's Kids mentoring program. Tonight, Rupert is hosting his Tuxes and Tennies event and auction to raise money for the charity.

The event will be held at 6:00 at the Robert Irsay Pavilion, 1303 W. 116th St. in Carmel. Tickets are just $25 and can be purchased at the door.

Friday, November 9, 2012

Indiana Education Reform: Who Got a Mandate?

The 2012 election is now a few days behind us.  What's left now is just trying to decipher what it all means.  Sometimes, it's easier to tell what voters want.  Other times, though, the voters send confusing messages with their decisions at the polls.

When it comes to education reform in Indiana, voters sent the more confusing message.

First, they elected a new Superintendent of Public Instruction.  Many in the political circles around the state were surprised by the outcome of this one.  Incumbent Tony Bennett spent well over a million dollars on the race, and was supposed to win without much trouble.  Glenda Ritz seemed to be unheard of by most as they headed into election day.

She won, though, with big numbers.  Quite an upset.  And when that happens, you have to accept that it is a clear message and mandate to other politicians: we support what she stands for...make it happen.

But then something else happened.  The Republican majority in the General Assembly, the very ones that put the recent education reform and voucher program in place, grew.  And they grew a lot.  The voters of Indiana gave the GOP a super-majority in both houses of the General Assembly, and they gave them a Republican governor, too.

Basically, Indiana voters told the GOP, "Here's our State.  We trust you.  Do with it what you wish."  And when that happens, you have to accept that it is a clear message and mandate to other politicians.

The problem we're faced with, though, is the voters mandates are in conflict with each other.  The goals of the new Democrat Superintendent of Public Instruction and the goals of the super-majority General Assembly are not going to be the same.

Of course, both sides are claiming their mandate is the superior one.  Governor Mitch Daniels and Governor-Elect Mike Pence announced that the election of Ritz does not mean that there will be any rollback of the voucher programs.

Democrats are crying foul, saying Ritz's huge numbers mean that, in fact, it is their mandate which should take the lead.  Jon Easter of Indy Democrat Blog titled a post on the issue, "Indiana GOP Leaders Losing Ever-loving Mind??"

So what should our politicians do?  That thing which all politicians should do: compromise.  The GOP should allow Glenda Ritz to do her job in the way she best sees fit, in accordance with the laws in place when she took office.  Ritz should accept that, and do the best job that she can with what she has to work with.

What shouldn't our politicians do?  Try to out-do the other side and create a war.  The GOP should wait until after the 2014 elections (and the mandates they may bring) before they attempt to expand any of the reforms they have put in place.  Glenda Ritz shouldn't put a fight up against the General Assembly asking for the reforms of the last few years to be rolled back.

For all intents and purposes, both sides should agree to not make any major changes for now.

Don't believe that is what is going to occur, though.  Political parties love to ram through legislation when they have no opposition to fear.  Expect the GOP to spend the next two years doing whatever they want to whoever they want.

That's what the voters said to do, I guess.  But if they use that authority to actually lower the powers of the Superintendent of Public Instruction, and step all over another mandate the voters gave at the same time, don't expect the Democrats to be quiet about it.  Tread lightly, Republicans, or you'll see your new found powers evaporate just as quickly as you obtained them.

Tuesday, November 6, 2012