What is Entitlement Reform?

On my Twitter, I tweeted that if there's anything you're unsure about or you want to learn about, you should let me know. A lot of my own posts start that way. I look at things that are in the news that I want to learn more about, so I research them. I try to apply it to what's going in the world, why it's important etc.

Today, let's talk about entitlement reform.

So what is it? Yahoo! Answers has this:

Entitlements are like government handouts..Welfare, Medicare, and social security are all considered entitlements. The entitlements make up about 56% of the federal budget, so most conservatives believe that they should be reformed.. like raising the age to claim Social security.

So as one would suspect, they have to do with spending initiatives.

With the deficit crisis, entitlement reform has been in the news a lot lately. The cost of a lot of these programs are spiraling out of control and making it hard to control the deficit. Some legislators believe that these costs must be controlled in order to give our country a chance at financial survival.

Let's start at the top with Obama:

"There have been times when our side, when Democrats aren’t always as flexible as we need to be," Obama said. "Sometimes I do get frustrated when I hear folks say, 'You can't make any changes to any government programs.' Well, that can't be right."

This isn't a soft issue. This is something that is going to challenge many people's political ideologies and go against what they stand for. Obama has been a champion of liberal doctrine, but he understands that this is a growing issue:

"We will not be able to sustain that program no matter how much taxes go up," he said in late July. "I mean, it's not an option for us to just sit by and do nothing."

You cannot keep raising taxes to make these things happen. You're taking away the competitiveness of the country if you're taking everything from people and giving it back in the form of entitlements.

These entitlements are a cost driver and are one of the main reasons that the US recently had it's credit downgraded:

"The key thing is, yes, entitlement reform is important because entitlements are the biggest component of spending, and the part of spending where the cost pressures are greatest," Beers said.

So the people responsible for downgrading our debt are cognizant of the fact that entitlements are going to continue to be an issue going forward.

So what's the significance of this?

Well, the debt crisis has created uncertainty and volatility in the markets. There are worries about a potential default in the future. Companies aren't hiring. Much of the problems associated with economic worry are tied to growing debt problems, so tackling and controlling entitlements are going to be one of the top issues of the next election. While the economy will most likely be the top issue, one of the paths to bettering the economy should come through reducing the deficit and reducing uncertainty.

Paul Ryan has been one of the most outspoken politicians on entitlement reform:

Ryan added that he's willing to discuss tax reforms in a way that would promote economic growth and job creation, including addressing "special interest-driven loopholes," but qualified any reforms by adding, "if you're just raising revenues to chase ever high spending, that's not good policy."

Ryan said ultimately the U.S. has to fix its entitlement system.

"The president just created two brand new health care entitlements, expanded Medicaid, a third, and then put this new rationing board in charge of Medicare," Ryan told "Fox News Sunday." "So they're unwilling to open up and restructure these entitlements, which according to S&P are the primary drivers of this debt."

Wall Street agrees:

Bill Miller of Legg Mason Capital Management, who appeared with Ryan, said the markets are looking to see a "reduction in uncertainty," which means both fundamental tax reform and changes to the entitlement structure.

"Discretionary spending doesn't matter at all in this thing except that it'll be a little bit of a drag on the economy. It's pro-growth policies and fundamental entitlement reform, especially on health care, that are the key things for to our long-term fiscal health and therefore the long-term confidence in the markets toward our country," Miller said.

The debt crisis is a top down concern for the markets and for the economy. If we address this debt crisis through entitlement reform, we can help ensure the fiscal safety of our country and work towards suring up our markets' confidence.

So while the election will focus on the economy, entitlement reform should come up. Ryan is one of the most outspoken politicians on entitlement reform and if he decides to run, I will surely profile him. Regardless, his Path to Prosperity will be a topic of discussion.

The question is whether the rest of the candidates take his cue and make it a primary talking point or they try to focus solely on the economy without tackling the debt issue, attacking each others' records and Obama's record. In the meantime, it will be interesting to see if Obama follows through on what he has already said. If he does make the move and extend his hand to implement entitlement reform, will that give him a leg up in the race? These questions will be answered in the weeks or months to come.

India's Corruption Problem

India is corrupt. It's been that way for as long as I know. I didn't think that was ever going to change, and I was worried that it would stunt the country's growth. How can you change societal problem that is so widespread?

Wikipedia throws it down for us:

Political and bureaucratic corruption in India are major concerns. A 2005 study conducted by Transparency International in India found that more than 45% of Indians had first-hand experience of paying bribes or influence peddling to get jobs done in public offices successfully.

It's hard to trust a government that allows that much corruption without doing anything about it. It's bad for business. You can't trust anyone, whether they're working for you or whether they're a government official.

My grandfather and uncle run a coconut oil mill in India. They make the best coconut oil in the world. That's a fact. However, they have no desire to expand because any hint of success would lead to unwarranted government harassment. The other problem with expanding is that you can't trust a damn person, even family members. People are greedy and there's no accountability. It's an awful set of circumstances.

Finally, someone has decided to stand up against corruption:

Anna Hazare has quickly become a 21st century Mahatma Gandhi inspiration for millions of Indians fed up with rampant corruption, red tape and inadequate services provided by the state despite the country posting near-double digit economic growth for almost a decade.

Obviously, any Indian protester is going to instantly get compared to Gandhi just as any African-American Civil Rights activist would be compared to MLK or Malcolm X (or Rosa Parks).

Even prominent businessmen are behind this sentiment:

"Democracy means no voice, however small, must go unheard. The anti-corruption sentiment is not a whisper-it's a scream. Grave error to ignore it," Anand Mahindra, one of India's leading businessmen and managing director of conglomerate Mahindra Group, wrote on Twitter.

People are speaking out. It's about time. You can only push people so much until they are going to push back. Now is the time that people feel empowered to share their opinion. An attack on corruption can only help India grow as a nation.

If you're not familiar with Hazare, he was recently jailed and is now fasting:

Hazare, who has struck a nerve with millions of Indians by demanding tougher laws against rampant corruption, had insisted he wants the right to return to a city park where he had originally planned to publicly fast, before he leaves jail.

While some see Hazare as a hero, others see this movement as somewhat hypocritical.

This isn't just a public issue:

Indians have a deep and complicated relationship with corruption. As in any long marriage, it is not clear whether they are happily or unhappily married. The country’s economic system is fused with many strands of corruption and organized systems of tax evasion. The middle class is very much a part of this.

But it goes beyond that. Some of the primary supporters of Hazare were Bollywood stars. However, Bollywood has a shadiness to it as well:

One reason the mafia could get such a firm hold on the film industry in the 1990s was that it had established a business relationship with producers and actors and functioned as an efficient conduit for illicitly transferring their money to safe foreign havens.

Following Mr. Ramdev’s fast, when the government agreed to investigate Indian money hidden in foreign banks, The Times of India ran an intriguing essay that argued that the law should make a distinction between the “black money” of corrupt politicians, earned through kickbacks, and the “black money” of businessmen who had moved their cash abroad years ago to save themselves from unreasonably high tax rates in socialist India. The essay implied that corrupt politicians were the real evil and that the tax-evading businessmen were just smart.

So as you see, there's a dichotomy in views on corruption.

In a society like the United States, it seems like we have a lot less corruption in politics and much more in business. If you're in politics and you're corrupt, you get jail time. If you're a businessman and you avoid taxes, you get vilified.

In India, it's only the politicians that get vilified. This doesn't seem fair and may seem hypocritical. However, why should anyone trust a corrupt government? Why should a hardworking citizen give money to a government it doesn't trust? While I believe there needs to be a full termination of corruption in India, I believe that it will have to begin at the top. After that, you can go after the businessman and even the working man.

Once the government restores the people's faith in it, it can restore its faith in the people.

Flash Mobs: Taking Over

I think social media is a great development, particularly Twitter, but this is an example of it going wrong. I really can't say much more because I'm not these kids. I don't know why they did what they did. It's not something new. No one should ever feel unsafe, but these flash mobs certainly perpetuate a threat to society.

Rick Perry and the Aggie Complex

Is Rick Perry just another mediocre Aggie?

Stay with me here.

Rick Perry succeeded George W. Bush as Governor of Texas. Bush ended up serving two terms as President of the United States, while Perry is in the middle of his third term as Governor. Part of me wonders whether the Aggie complex, a constant jealousy of Texas, is the primary driver of Perry's Presidential hopes.

You probably want to stop me there. By some miracle, President Bush went to Yale. Yes, but his brother, Jed, went to Texas and so did his daughter, Jenna. The family has strong ties to the University.

So what's this Aggie complex about? Well, the University of Texas at Austin is the flagship university of the state of Texas. They were the big player in the Big XII and they've always watched out for Texas A&M. They've been more of a little brother to Texas than Michigan State has to Michigan, although the jealousy is very similar.

Recently, Texas announced that they're going to start their own television network.

This has further sparked A&M's envy so much so that they are trying to join the SEC:

In the eyes of most Aggies, moving to the SEC means they'll no longer have to operate in Texas' vast shadow.

Aggies fans overcome with excitement over a move to the SEC. There's also a pretty good explanation for the Aggie Complex in there:

"It’s really hard to watch a bigger school kind of bully their way around the conference and make the money they want to," Turner said. "So you have to do something, but I think a lot of fans are kind of uneasy about, 'Is this what we really want?'"

And more:

"We want to carve our own niche, and we don’t want to be the little brother, but you almost don’t want to leave big brother," Turner said.

They want out of Texas's shadow just as Perry seems to want to get out of Bush's shadow. What's more is the Aggies are trying to move to the SEC to be in a conference of schools in constituencies that Perry will appeal to in his own campaign.

However, the SEC appears to have rejected A&M's bid to join them, at least for the moment:

Southeastern Conference presidents and chancellors committee didn't reject Texas A&M in their meeting Sunday, they simply “reaffirmed (their) satisfaction with the present 12 institutional alignment.”

If Texas A&M joined the SEC, they would be amongst company that has attracted suspicion over the last few years. The SEC has been under scrutiny for a number of reasons, but amongst these is their lowered standards:

The SEC will push for the rest of the nation to adopt its oversigning rules. Thankfully, the SEC will not push its ban on the grad-student exception to the rest of the country. Hopefully, the SEC will remain the only league dumb enough to wipe from the books the only rule in the NCAA that actually provides a positive incentive for athletes.

The fact of the matter is that A&M is trading one problem for another. They have to prove to the rest of the country that they are hellbent on having rules that both preserve academic and NCAA integrity. If Perry is successful in his bid for Republican nomination, he too will be trading one problem for another. He will go from living in Bush's shadow in Texas to being plagued by his shadow on the national stage. Although the conservative southeast helped President Bush get in both 2004 and 2000:

There were cracks in that foundation for McCain because of Bush in 2008:

The question is whether Rick Perry can continue his strong start and consolidate the conservative base while appealing to skeptical northerners who might not take to another brash cowboy from Texas. At the end of Bush's term, he did not have a high approval rating:
The similarities will clearly be highlighted in the media and don't think 2.5 years of Obama has made people forget:

The Daily Show With Jon Stewart	Mon - Thurs 11p / 10c
Indecision 2012 - Corn Polled Edition - Rick Perry Announces His Candidacy
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Perry will have to shake Bush's shadow in order to win the presidency. The problem is that he might not be able to do it. He has similar beliefs and ideologies, and he might not be able to get away from that. If he does, he might lose the bases that he needs to win. In the end though, I see him as being another failed Aggie with an Aggie Complex.

Ali Velshi on The Daily Show

Ali Velshi was on The Daily Show yesterday. He talks about the value of companies and the market as a measure of economic confidence as well as a way to reinvent our economy. Jon Stewart seems absolutely surprised by his honesty and saneness.

The Daily Show With Jon Stewart	Mon - Thurs 11p / 10c
Ali Velshi
www.thedailyshow.com
Daily Show Full Episodes Political Humor & Satire Blog The Daily Show on Facebook

I'll probably talk more about taxes at some point this week.

GOP Race Heats Up

Despite the departure of Tim Pawlenty, the GOP race is heating up. Over the weekend, Tim Pawlenty dropped out, Rick Perry dropped in, and Michelle Bachmann won the Iowa straw poll. Meanwhile, Obama is touring the midwest.

What's this all mean?

Questions.

Let's start with Rick Perry. First, fact checking his speech:

On a blended basis, we would rate this as a Two Pinocchio speech, similar to many of the other announcement speeches — a mishmash of high-flying rhetoric and facts sometimes tethered uncertainly to the truth. We look forward to rating more of the governor’s statements in the future.

There's some interesting stuff about his claims that low-taxes leading to the success he has had in Texas, including:

Texas, as a state rich in oil and national gas, has also benefited from increases in energy prices that have slowed the economy elsewhere in the country. Higher energy prices have meant more jobs in Texas. Though Perry proudly claims the job growth is the result of a low-tax, anti-regulatory environment, others have pointed to a big investment in education in the 1980s that, yes, was the result of a tax increase.

So let's address this point by point.

How does Texas's economy differ from the American economy:

“Because the Texas economy has been prosperous during his tenure as governor, he has not had to make the draconian choices that one would have to make in the White House,” said Bryan W. Brown, chairman of the Rice University economics department and a critic of Mr. Perry’s economic record. “We have no idea how he would perform when he has to make calls for the entire country.”

It's easy to govern when things are going well. Obama inherited a nation underwater and has had to balance his campaign promises with balance to keep the country afloat. Perry's record in Texas might contrast with the needs of the nation:

“The Texas model can’t be the blueprint for the United States to successfully compete in the 21st century economy, where you need a well-educated work force,” said Dick Lavine, senior fiscal analyst at the Center for Public Policy Priorities, an Austin-based liberal research group.

In Texas, Perry has been questioned by democrats for:

And if Mr. Perry were to win the Republican nomination, he would face critics, among them Democrats, who have long complained that the state’s economic health has come at a steep a price: a long-term hollowing out of the state’s prospects because of deep cuts to education spending, low rates of investment in research and development, and a disparity in the job market that confines many blacks and Hispanics to minimum-wage jobs without health insurance.

This does not sound like a recipe for growth.

On a national stage, this could be a huge issue. Education is probably the second largest point of debate coming into the 2012 election. As someone that is hellbent on improving America's future, this does not bode well for Perry. Considering that education is one of the things that has faced the most cuts over the last few years, and clearly, education has started to fall behind:
I'm a staunch believer in one of the few things that government should invest in is education. However, like all forms of government, you have to make sure it is running efficiently, and that is done through incentives. Massachusetts, probably the most liberal state in the union, understands this:

In Massachusetts, Mitchell Chester, state education commissioner of Massachusetts, said his state, which also posts higher than average scores on the national exam, created a plan to "aim high, make sure results count" by holding schools accountable for results and targeting support to help them succeed.

Seems a little bit off topic, but if we're going to make cuts, I expect education to be one of the victims, and without, a economy high in human capital, we're going to continue to struggle. All of these candidates want to lower taxes, and with the budget concerns, we're going to need to make cuts. It'll be interesting to see how these candidates outline their plans. For Rick Perry, you can't ignore the fact that an investment in education played a role in his success as governor, but that his cuts in education will inevitably be a drag in the future. Perry has benefited from rising oil prices, which is integral to the Texas economy. In a more complex national economy, he might struggle to have the same degree of success.

Furthermore, there are questions about whether Perry can win the middle:

The concern for Republicans, however, lies with those swing voters in the middle. Among independent voters, a slight majority of 50% said government should do more, while 44% said it should do less.

I find this very interesting, considering how many people have been critical of Obama. You have to wonder how polarizing an issue this is. It seems like government is taking adaptive measures, while people might want them to do less or more in regards to spending and taxes.

There are still a lot of questions regarding Perry's candidacy, but there's a belief that he can overtake Bachmann:

Logic says that Perry will eclipse Bachmann in Iowa because he’s as conservative but with the bonus of extensive executive experience. As a fiscal and social conservative who’s an evangelical with a background in agriculture, Perry seems a natural fit for the state.

The question is whether he can make the same connection with the voters that Bachmann seems to have done. Bachmann lacks executive experience and while she has won over a lot of supporters, I think her executive experience is going to be crucial in determining her fate. In many ways, she could be the conservative Obama. In the same way that liberals aren't happy with Obama, conservatives might not be happy with Bachmann.

Bachmann has to prove to conservatives she is not (did they steal my headline?):

Americans are already living with the consequences of electing a President who sounded good but had achieved little as a legislator and had no executive experience. Mrs. Bachmann will have to persuade voters she isn't the conservative version of Mr. Obama.

I don't believe she will. To me, she's a political chameleon, always painting herself in a way that will appeal to her desired constituency:

More substantively, her attempt to position herself at all times as the anti-establishment outsider has made her seem on occasion less principled than opportunistic. She quickly distanced herself from Paul Ryan's Medicare reform when it came under liberal fire, even as she purports to be the scourge of uncontrolled spending. Her recent opposition to the debt-ceiling deal on grounds that GOP leaders should have insisted on first passing a balanced budget amendment, while holding only the House, was a political fantasy.

She seems misguided and her candidacy for President of the United States of America seems like a political fantasy.

For the time being, she's up there with the top dogs, so let's not count her out yet. She's going to play a part in the race, stealing votes from the other two top dogs. I just don't think she can beat two candidates with executive experience. That's a big deal in this race.

My top dog in this race is Mitt Romney. I just worry about his electability. While religion is not an issue with me, it is with evangelical conservatives. Furthermore, I don't think he asserts himself well enough. A big thing he's going to have to do is differentiate himself from other candidates:

“I think understanding how the economy works by having worked in the real economy is finally essential for the White House, and I hope people recognize that,” Romney told reporters after touring and addressing employees at a small manufacturer.

“I respect the other people in this race, but I think the only other person that has that kind of extensive private sector experience, besides me, in the Republican race is Herman Cain. And I respect Herman Cain, but I also think it’s helpful to have had that government experience that I’ve had,” said Romney.

He has to be assertive. He has been riding too high on his qualifications. He has to make an earnest effort to reach out to the voters and take a stronger stance defending his record and his beliefs. People have questions about him regarding the policies that were passed when he was governor of Massachusetts and about his religion. He needs to defend these stronger. You have to convince conservatives that you have strong socially conservative beliefs.

The best candidate does not always win the nomination. Often times, it's about the best campaign. The best candidate, for me, is Mitt Romney. As of now, it appears Bachmann and Perry are running better campaigns. It will be interesting to see how things unravel as things develop.