Apr 25th 2011, 08:17 by Stewart Pelto | WASHINGTON, DC

 

IN 2008, President Obama’s grassroots campaign changed the way we run for office. As of 20 April 2011, he’s done it again.

 

Mr Obama flew to the west coast last Wednesday, touching down in Silicon Valley to hold a town hall-style meeting at Facebook headquarters.

 

Did you hear that? Our president is raising money for his 2012 reelection campaign by taking his grassroots networking to Facebook.

 

Can you see how our world changes? How online social networking is connecting our planet on a scale unseen in human history? Last year, I heard of two tweens who got stuck chasing a ball down a storm drain. They didn’t use their mobiles to phone 911 – they just updated their Facebook status asking for help.

 

Mr Obama aims to leverage this new lifestyle to win the presidency anew. I read on Marketplace Morning Report that Barack Obama’s website asks you to sign in with your Facebook account. If you do, you’re asked to spread the word to all of your friends via personal messages.

 

It’s possible that Facebook will become a major battleground for the 2012 presidency. I can imagine people creating poll forecasts just by counting a politician’s number of “likes”.

 

Facebook isn’t the only social media outlet that’s grown quickly to influential proportions. YouTube went from nonexistence during the 2004 Bush v Kerry race to host of President Obama’s fireside chats. Twitter went from nothing during the 2008 Obama v McCain race to sixty-five million tweets each day.

 

These three powerhouses are ideal for politicians because voters actually want to be reached there. A cold knock on an unfamiliar doorstep with a clipboard in hand this ain’t. A Democratic media strategist named Dusty Trice came on Marketplace to say that people go beyond being easily reached on social media to reaching out themselves; they want to “like” Mr Obama, they want to watch him speak directly through their computers on YouTube, they want to get timely updates straight from his bosom on Twitter.

 

You better believe Mr Obama’s campaign smarts will come into play again, with tweets pushing voters to “like” his Facebook page which hosts a YouTube video asking for donations at barackobama.com.

 

And you better believe you’ll skip the personal computer for your smartphone, where your Twitter app loads into the Facebook app which plays an embedded YouTube video asking you to text “OBAMA” to 55555 for a $10 campaign donation. While you’re underground in the metro listening to music off the same device, downloading app updates and crushing the latest smartphone game.

 

Times are changing, people. 2004 is not 2008. 2008 is not 2012. At the rapid pace our information systems allow, three hours ago isn’t now.

 

Why haven’t you refreshed this page yet?

 

Live well, live well within your means, and remember – that’s how the Solvency Shark seas it!

 

 

Apr 22nd 2011, 08:17 by Stewart Pelto | WASHINGTON, DC

 

YOU’D be hard-pressed to accuse our president of slacking off this tax season. The White House released Mr Obama’s returns on Monday, 18 April 2011; looking at the numbers, I think it’s clear he’s paid more than I ever have.

 

President Obama earned $1.8m in 2010, mainly off of book sales. That makes me want to write a book.

 

His earnings are down from $5.5m in 2009, though, again off of book sales. That really makes me want to write a book.

 

The BBC reports that out of $1.8m in earnings, the Obama family paid more than $500,000 in state and federal taxes. In other words, nearly 28% of his hard-earned booty went to government coffers on 15 April.

 

Can you imagine making enough money to pay $500,000 in taxes? I can barely imagine making $500,000 in a single year. I’d be so happy to make that much cash, I would pay 28% taxes without thinking.

 

But has the president paid enough? I think so. After all, 28% of income is a fat chunk of change for anyone to pay during tax time.  Consider the fact that the Romans taxed their citizens a flat 5% and lasted for nearly 1,000 years. But it seems the president has gotten off easy; the BBC article goes on to say that Mr Obama “benefited considerably from low tax rates on high earners enacted into law under his predecessor George W Bush”.

 

Interestingly enough, the President just proposed a budget that actually calls for these tax breaks to expire. In contrast to Representative Paul Ryan (R-WI), Obama is asking the rich to shoulder their fair share during a time of looming deficits. I’ve said this before and I’ll say it again: if we want to cut our deficit in a meaningful way, we’ll need to reduce spending and increase revenue. There’s no way to choose just one.

 

The Republicans want to cut spending, but the President will likely ask them for tax hikes, too. To show his support in advance, he made sure to pay the Treasury generously and donate another fat chunk to charity. If you have a president in office who pays nearly one-third of his income to the government and is willing to legislate himself into paying even more, can you call him greedy?

 

Mr Obama’s budget asks for Republican-style spending cuts and Democrat-style tax hikes. He waited patiently for Mr Ryan’s overly conservative budget proposal and then nominated himself as the alternative choice right in the center. 

 

Who else here thinks Obama is putting himself on solid political ground for the upcoming 2012 budget debate?

 

Live well, live well within your means, and remember – that’s how the Solvency Shark seas it!

 

 

Apr 21st 2011, 08:17 by Stewart Pelto | WASHINGTON, DC

 

I DOUBT we’ll ever pay it to zero, but we must trim our deficit. I doubt paying it to zero is even a worthy goal in our increasingly interdependent planetary system of government. Nonetheless, we must improve our debt-to-available-credit ratio to keep from going the way of Greece or Portugal. So how do we do it?

 

Republicans want to cut spending and Democrats want to raise taxes. Using both tactics to attack the deficit from above and below would be the common-sense approach: imagine wiping out 20 units of deficit with 10 units of spending cuts and another 10 units of increased tax revenue.

 

What’s interesting about the recent partisan atmosphere in Congress is that neither party is willing to implement even the slightest bit of advice from the other. The Republicans think higher taxes would discourage our fledgling recovery; Democrats think spending cuts would steal the safety net out from under the poor just as they need it the most. Add a healthy dose of Tea Partiers and your cup is steaming with a uniquely frustrating brew. 

 

Let’s take a look at the past four or five years: the Democrats crushed the Republicans in 2008, maybe even too much. Americans didn’t necessarily support the left, they just opposed President George W Bush’s right. Democrats took this not as a referendum on the most recent presidency but rather as a mandate to push big programs through like healthcare reform.

 

In 2010, Republicans clawed back some of their losses in the Senate and actually gained control of the House – somewhat (remember those unruly Tea Partiers who have voted against Republican measures they found insufficiently conservative). Republicans took this not as a referendum on the Democrats’ bungling of healthcare reform – most notably losing the public option – but rather as a mandate to shrink government and undo Democratic legislation.

 

So, we’re left with a situation where the Republicans – who control roughly one-sixth of our government – are attempting to control the entire thing by its purse strings. 

 

Don’t like healthcare reform but can’t repeal it? Defund it.

 

Don’t like center-left media coverage from National Public Radio? Defund it.

 

Don’t like abortion? Take the government to the brink of a shutdown before passing an eleventh hour stopgap bill with defunding for abortion tucked inside. Among other things.

 

To make things even more complex, you have fifty to sixty Tea Partiers in the House who think they’ve been elected not on a wave of antagonism towards Democrats but on a true desire to throw a wrench into the government. I don’t need to say much here since Nick Offerman is already doing a beautiful job satirizing this approach as Parks and Recreation’s Ron Swanson.

 

OK, well what about the Democrats? Some have grown disenchanted with Mr Obama for reaching out to the center too often. In some cases I agree, like the loss of a public option during healthcare reform; without it, we’ve only managed to legislate tens of millions of Americans’ worth of new profits for private healthcare companies. In other cases, I actually support a centrally-based president and bet the Democrats will move to the center along with Mr Obama as he prepares to win his office anew in 2012. 

 

Like I said earlier, the common-sense approach to cutting our deficit would be to cut spending and raise taxes. If cutting spending is on the right, and raising taxes is on the left, then doing them both would by definition put you between the two – right in the center.

 

This is also known as the Simpson-Bowles deficit commission.

 

Live well, live well within your means, and remember – that’s how the Solvency Shark seas it!

 

 

Apr 20th 2011, 08:17 by Stewart Pelto | WASHINGTON, DC

 

HE HASN’T yet, but President Obama could use Standard & Poor’s (S&P) recent negative revision of its US debt outlook to force action on Capitol Hill.

 

On 18 April 2011, S&P gave its vote of no confidence on the US budget debate, changing its opinion of America’s ability to pay off its debts in the future.  Its “AAA” credit rating has gone from “stable” to “negative”, implying that it could drop if Congress doesn’t agree a fiscal plan soon.

 

In essence, S&P said “giddy-up, lawmakers”.  They threw the US for a loop on Monday; Wall Street grabbed the railing and held on while stocks took a dive.

 

But what’s shocking in America is old news in Europe, where countries like Greece and Portugal have long since traded in their “AAA” status for the junk pile; 20 April 2011’s Marketplace Morning Report says our neighbors across the pond are unfazed. The threat of downgraded credit ratings is practically child’s play next to the looming problem of debt-crippled countries unable to borrow.

 

Marketplace Morning Report’s Stephen Beard goes on to say the United Kingdom was itself threatened with a credit rating downgrade in May of 2009. The people of Britain became concerned about losing their “AAA” rating, so they voted in a conservative government that used their mandate to push what Beard calls “a pretty severe deficit reduction plan”.

 

President Obama could choose to use this same spectre to force Congress to play nice. Now that Obama has announced his reelection bid, I imagine the Democrats will echo his support for a modified version of the Simpson-Bowles deficit commission findings.  All that’s left are the Republicans.

 

I have heard informal criticism of the GOP’s recent conduct on the Hill: people in Washington, DC are still grumbling about the government shutdown we avoided recently, believing politicians fought over small change. While every penny the elephants save builds political capital for the 2012 presidential election, they have to strike deals. When you only control one-sixth of the government, you have to strike deals.

 

So the Republicans will have to reconcile Paul Ryan’s budget with the President’s; after all, I doubt they’ll want to look responsible for an S&P credit rating downgrade. They’ll have to include some Democratic tax hikes alongside their Republican spending cuts.

 

But are cuts the answer? The UK’s conservative government started cutting two years ago; since then, the economy has shrunk and consumer spending has dropped off the face of the Earth. We could try a Chinese-style influx of public cash, as long as it didn’t boost inflation too much. So which do we choose? A strong Chinese economy plagued by inflation or a weak British one with a “AAA” rating?

 

Tell me what you think below. If things really head south for the Queen, she can always paper the problem over with some outstanding lines of credit.

 

Live well, live well within your means, and remember – that’s how the Solvency Shark seas it!

 

 

Apr 19th 2011, 08:17 by Stewart Pelto | WASHINGTON, DC

 

FINLAND went to the polls this weekend to tell the European Union they’re not happy about Eurozone bailouts. 

 

This noble land of Thor, reindeer and saunas* doesn’t make the financial news very often. On the one hand, its stable economy keeps it out of articles focusing on troubled countries like Greece and Portugal. On the other hand, its modest wealth keeps it out of articles focusing on richer countries like France, Germany and the United Kingdom.

 

Nevertheless, Finland is a healthy member of the European community that’s being asked to put some of its reserves into a bailout fund. What did Finnish voters say?

 

“No, thanks.”

 

A nationalist party called the “True Finns” won nearly 20% of the vote on a Euro-skeptic platform opposed to the Portuguese rescue and other bailouts. That number is up from a 2007 election in which the True Finns only controlled 4%. The Centre party was nearly cut in third to accommodate the conservative group.

 

What does this mean for Europe? Not much, just yet. But Germany is already frustrated from having its hard work distributed to lazybones and beach bums in the south. If they take Finland’s bailout rejection as a precedent, we could be looking at another game of chicken.

 

The European debt crisis almost sent America into a double-dip recession last year when Chancellor Angela Merkel stalled on talks to rescue Greece from its financial woes. Although her coalition has been weakened recently, she was reflecting Germany’s hesitation at the time.

 

She’s still in power and it’s possible she’ll take cues from Finland and from Iceland, whose taxpayers recently said no to a repayment referendum. Their decision to keep Icelandic taxpayers from paying failed banks’ lost deposits is, in my opinion, part of a larger sentiment in northern European countries to teach the southerners a lesson.

 

It’s difficult to know which move is correct. I can clearly see northern Europe in the role of the hardworking ant and southern Europe as the lazy grasshopper. The grasshopper goofed off all summer and now it’s come to the ant’s door for food and shelter during the winter. Perhaps the best way to teach the grasshopper a lesson would be to leave it out in the cold.

 

I can also understand the need for a bailout. Germany and Finland have benefited from membership in the European Union and should be keen to see it healthy. If they don’t pony up the cash for Greece and Portugal, they could damage the Union as a whole. After all, how many businesses want to invest in a country that’s part of a troubled consortium?

 

Better to reassure investors with a strong safety net while repairs are being made.

 

Live well, live well within your means, and remember – that’s how the Solvency Shark seas it!

 

*My grandfather or great-grandfather came to America from Finland. I can’t remember which one, but either way: go Finland!