Friday :: Mar 31, 2006

Starving The Bathtub Drowning The Beast


by pessimist

One of the main motivations behind Bu$hCo is slashing taxes. Information is emerging that indicates those who paid to have political pressure exerted to promote 'tax relief' were already quite wealthy.

Special interests aided tax-reform advocate
A range of groups funded Norquist

By Michael Kranish, Globe Staff
March 31, 2006

Grover G. Norquist has become one of the nation's most influential activists by portraying his group, Americans for Tax Reform, as the leading "grass-roots taxpayers movement," which gets thousands of politicians to sign a pledge against any new tax.

Norquist, who grew up in Weston and is a graduate of Harvard College and Harvard Business School, came to prominence by helping to lead Ronald Reagan's presidential campaign in Massachusetts. He eventually helped engineer the 1994 Republican takeover of the US House. Norquist's power has risen under the Bush administration; he is close to White House adviser Karl Rove and played a major role in Bush's push for tax cuts.

Norquist's website says that he heads "a coalition of taxpayer groups, individuals and businesses opposed to higher taxes at both the federal, state and local levels" and claims 90,000 members. The website says those taking the antitax pledge include President Bush, 222 House members, 46 senators,and 1,247 state legislators.

"Don't let Washington insiders silence your grass-roots voice," the group says, urging public support.

One of his favorite quotes is that he wants to cut the size of government in half
in order "to get it down to the size where we can drown it in the bathtub."

There's only one problem: the bathtub is damaged so badly it doesn't hold water anymore.

I don't expect you to believe me, Grover. But would you believe it if someone like the CEO of United Parcel Service told you?

I'll allow Trish over at Pensito Review to introduce our guest speaker:

Bush Tax Cuts at Work: Roads, Waterways, and Skies are a Mess
Posted by Trish | Mar. 30, 2006

Chalk up another failure for the Bush tax cuts. The head of UPS today is warning that America’s neglected infrastructure is hobbling us in the global marketplace.

After Hurricane Katrina even emergency supplies languished in ports and parking lots. [Mike Eskew, UPS CEO] said you don’t have to wait for a storm or earthquake or terrorist attack to see the problems. You also don’t have to be a member of the American Society of Civil Engineers, but they have issued a scathing analysis of our transport system.

Eskew was especially critical of railroads. As those of us who live near its Jacksonville headquarters are well aware, Bush Treasury Secretary John Snow was head of CSX before his crony status qualified for a seat at the Bush cabinet table. CSX is a leader in the rail industry at avoiding liability and sticking it to the taxpayers every time its worn-out tracks cause an Amtrak derailment.

In recognition of the sort of introduction that a top level corporate exec usually gets, I'll allow UPS to expand on the topic:


Transportation Infrastructure Failing the Nation, Says UPS CEO

HOUSTON, March 30, 2006 - Describing the nation's roads, ports, railroads and airports as the backbone of global trade, UPS's chief executive officer today warned that America was taking a chance with its future by neglecting its infrastructure.

Eskew noted the problem is receiving some recognition outside the transportation industry, citing a report card issued last year by the American Society of Civil Engineers.

Eskew, in addressing the Houston Forum here, said business leaders had to help Americans understand that their jobs and standard of living depend on a U.S. economy that today depends on global trade. People may not like to build new roads or add runways to airports, but the American economy risks stagnation without continued investment and infrastructure expansion, he said.

There is only one entity big enough to take this challenge on, and Grover Norquist is trying to drown it.

As a Lefty progressive blogger, I wouldn't have the same credibility that a CEO would have with the Topper$ who most benefitted from 'tax relief', for I don't speak the language they prefer to hear. Thus, I'll let Mr. Eskew make the case for raising the capital necessary to fix everything that's broken in our nation [emphases mine]:


America's Infrastructure Challenge: Build It Or They Won't Come
March 30, 2006

Mike Eskew, chairman and CEO, spoke to a group of business leaders and executives at the Houston Forum in Houston, Texas. He talked about the nation's roads, ports, railroads and airports as the backbone of global trade and warned that America's economic future is at risk if its transportation infrastructure continues to be neglected.

It's a real pleasure and honor to address you here at the Houston Forum. Over the past few years, I've probably given a hundred speeches on the merits of globalization. You could say I'm an unabashed advocate of free and fair trade.

At every one of those speeches I try to remind audiences that we have dual responsibilities when it comes to ensuring that global trade benefits everyone it touches.

On the one hand, we must ensure that our present and future generation of workers has the education and training needed to compete in a global economy.

Part of this is making sure those whose jobs have been displaced by global trade
have other opportunities available to them.
At the same time, we must ensure that the backbone of trade – our nation's transportation infrastructure – is prepared to meet the demands of 21st century global commerce. I want to focus on this latter responsibility – the nation's infrastructure.

The port of Houston now ranks number one in the country in terms of foreign tonnage. Your transportation infrastructure is world-class, with the world's sixth-largest airport system. 575 miles of interstate highways, extensive rail networks, and, of course, the Port of Houston. Our air hub at George Bush Inter-Continental Airport is our company's major air link to Mexico and beyond.

But dodging construction cones on the Katy Freeway at Rush Hour makes you appreciate that even this city's advanced transportation infrastructure is having a hard time keeping up with demand. What's more shocking, quite frankly, is the inability of our transportation infrastructure to keep up with the normal day-to-day stresses imposed upon it.

Our highways, waterways, railroads and aviation networks
are simply not keeping up with ordinary demands.
Five years ago, the U.S. House held hearings on our transportation challenges. Congressman Don Young from Alaska didn't mince words. He said: "Congestion is a national crisis. Anyone who drives, flies or takes the train ... and every business that ships freight over the highways, railroads, airways or waters knows that our transportation system is overburdened... We have reached national gridlock."

I don't think we've reached gridlock yet, but if we don't do something about it, it's only a matter of time. [I]t's just a simple matter of supply and demand.

On the supply side, we have four million miles of public roads and bridges. More than 5,200 airports, 163,000 miles of railroad, 9,000 commercial docks, wharves and piers. It's an infrastructure valued at US$2.2. trillion dollars, representing seven percent of all fixed assets in the U.S. But even all these assets aren't enough. Because of the growth in global trade, demand is rapidly outpacing supply.

Consider our waterways. Most of our global imports and exports arrive on cargo ships. It's only going to get worse, as ocean cargo volume is expected to double by 2020. And yet few U.S. ports have channels deep enough to accommodate the largest ocean-going container ships. Our inland waterways that help move goods within the country are also aging and stressed.

Nearly half of all the locks on these inland waterways
are functionally obsolete, according to the Army Corps of Engineers.
Back on terra firma, things aren't any better. We depend on trucking to transport 90 percent of the products made or shipped in the U.S. But trucks are increasingly stuck in traffic, going nowhere fast and burning fuel. Between 1970 and 2003, vehicle travel on highways shot up by 161 percent. Yet new road mileage increased by only 6 percent.

In America's 85 largest metro areas in 2003, 54 percent of travel involved heavy to extreme congestion, up from 20 percent in 1982. Road congestion costs the U.S. economy more than US$63 billion dollars every year – and the price tag is going to go up. Road use is expected to increase by nearly two-thirds in the just the next 20 years.

The story is similar on the railways, where rail freight tonnage is expected to increase by at least 50 percent by 2020. The U.S. rail system is experiencing unprecedented volume of international freight. In fact, half of all rail intermodal traffic today is international.

Problem is, since 1980, railroads have been cutting costs
and shutting down capacity and lines.
The American Society of Civil Engineers reports that "for the first time since World War II, limited rail capacity has created significant chokepoints and delays." At UPS, we've experienced this problem firsthand, which is a big issue when you offer guaranteed package delivery times. That's why we recently redesigned our ground package network to move more package volume off railcars and onto our overcrowded national highways.

Are things any better in the skies? Well, air cargo volume increased almost 17 percent between 2000 and 2004. And it is expected to increase by 5.1 percent each year between now and 2016. Supply is lagging demand here, too, even though a new runway can increase airport capacity by 30 to 60 percent. We've only opened nine new runways in the last six years – and only two new public-use airports since 2002.

Every few years, the American Society of Civil Engineers assigns grades to our nation's transportation systems. Here is how ASCE President William Henry summed up the report card: "Our infrastructure is sliding toward failure, and the prospect for any real improvement is grim. If we treated our homes like we treat our infrastructure, we'd all live in shacks."

In 2005, here's what our infrastructure report card looked like, Our aviation system got a D+, Navigable Waterways a D-, Roads a D, and Rails a C-.

If your kids brought home report cards like this,
someone would be grounded.
Before we all get too depressed, let me just add that none of these problems is insurmountable. American resolve and ingenuity can tackle anything – including our nation's troubled transportation infrastructure.

But here's the deal: We can't wait on this. We need to move forward now.

I have a personal sense of urgency and it is probably self-evident. UPS manages one of the largest ground transportation fleets in the world. We run the world's ninth largest airline. We're the largest user of rails in the U.S. We ship containers over the oceans and manage multi-modal transportation and supply chain networks for companies around the world.

On any given day,
UPS handles seven percent of the nation's GDP
and two percent of the world's GDP.
I should also mention that apart from my UPS responsibilities, I also serve on the President's Export Council.

This means that he's not a liberal Democrat!!!!

I can assure you that improving our transportation infrastructure is a requirement for the U.S. to compete in the global economy. [T]he health of our transportation infrastructure is not just a UPS concern. It should concern everyone in this room, both as a consumer and as a business leader. And then, of course, there's the bigger issue of ensuring that our future generations – your children and grandchildren – have everything available they'll need to work and compete in a global economy.

Global trade today accounts for about a quarter of our nation's GDP, up from 13 percent in 1970. As Tom Friedman points out, 30 years ago US$10 billion dollars in foreign exchange transactions occurred every day. Today, US$10 billion in forex takes place every second.

An inefficient transportation network results in higher prices at the checkout line, out of stock products, more inventory sitting idly by – or, in other words, cash that's not flowing, costly delays in getting products to market, sliding customer service, and weaker financial results, just to list a few.

Now, we've got to ask ourselves,
how do we avoid sliding into gridlock?
Ultimately, I think we need to look out to the year 2050 and develop a comprehensive national transportation infrastructure vision. That's going to require government and business working closer together, identifying what our world is going to look like and creating a vision of where we want to be.

In the meantime, there are a number of immediate steps we can start taking action on.

This first is to sound the alarm. Organizations like the American Society of Civil Engineers are highlighting the problems and issuing report cards, and that's good. What we need now is more business leaders to step forward and publicize the need for upgrades to our transportation infrastructure. [T]here's not a university, a local chamber, an economic development agency or any type of business club that wouldn't be receptive to hearing your thoughts on trade and transportation...

After all, we are the ones who benefit most
from smooth-flowing transportation systems.
A second strategy for avoiding gridlock involves money, and lots of it.
There are organizations lobbying the government for strategic transportation investments.

This means raising taxes for those 'conservatives' who are intelligence-challenged.

But I digress.

Not that we aren't already pouring a lot of money into transportation. In 2004, the federal government spent about US$91 billion dollars on transportation construction.

But we don't just need to spend more money on our infrastructure. We need to target that money strategically, using a holistic strategy. By holistic, I mean taking into account how all the air, ground and water-based systems work together and increasing the integration of all these different modes of transport. After all, the trend toward intermodal supply chains means that bottlenecks on one type of system can lead to bottlenecks on others.

For example, all the port capacity in the world won't prevent bottlenecks if there isn't enough rail freight capacity on which to unload the ocean shipments. Another example of [a transportation bottlenck] is [in] my hometown of Atlanta, where we're building the fifth runway at Hartsfield Jackson International Airport to meet demand.

Before we build a sixth runway,
I think Atlanta needs to consider building light rail connections to places like
Savannah, Charlotte, Chattanooga, Jacksonville, Nashville, Greenville, Columbus,
and other close-in metropolitan areas.
That might keep planes out of the skies and get passengers to their destinations quicker and more dependably, which gets to another way we can avoid gridlock. And that is for private and public entities to work together to more efficiently use existing infrastructure to advance goods and build security into the process.

Finally, there's something else that we in the private sector can do to avoid gridlock on our nation's transportation infrastructure. We can be smarter about how we manage our supply chains.

Yes, our transportation infrastructure is having a hard time keeping up with demand. But that doesn't mean we can't streamline our logistics so our goods keep flowing, even in crowded trade lanes. Information helps avoid waste by allowing inventory to become more just-in-time and lean.

We believe synchronized commerce will result in even larger savings and improved business results across the board in years to come. Synchronizing goods and information flows has cut Ford's delivery time almost in half and has reduced inventory carrying costs by US$1 billion dollars.

So how can information and goods movements be synchronized to improve the nation's transportation network? One example might be found in our rail network.

I believe the railroads can apply many of the same methods of synchronizing goods movement and information movement. In fact, the technologies and planning exist today in the form of the North American Intelligent Railroad Transportation System and another program called Positive Train Control. Both use advanced technologies to improve the operational effectiveness and capacity of the railroads.

Unfortunately, our rail network has fallen behind some of our European and Asian competitors in deploying this technology.
One nation that has elected to make an aggressive investment in rail technologies and infrastructure is China. I had lunch with the mayor of Tianjin, and he talked passionately about the promise of new high-speed rail links that were being constructed between his city and Beijing. These trains, I was told, will clip along at 200 miles per hour and provide direct connections to the airports and downtown districts of Beijing. The mayor also said the trains would leave every two to three minutes throughout the day. I told him that seemed too close.
He said, "Don't worry ... we'll have 12 lines running."
China, by the way, is also planning to build 44 new airports by 2010. Those airports will complement a series of new north-south rail lines that will crisscross the nation's historical east-west trade routes along the Pearl and Yellow rivers.
If we're going to take our rightful place as a nation in the world of trade,
we must have the best infrastructure.
We need to ask ourselves, whether we're in the public or private sectors: Are we willing to stand by and watch as we slide into gridlock? Or are we willing to take the necessary steps today to ensure a vibrant economy tomorrow? Do we really have a choice?

Thank you for your time and attention this afternoon.

Thank you, Mr. Eskew!

We now return you to our regularly scheduled Business As Usual:

Grover Norquist is a lobbyist for Americans for Tax Reform, which has filed a 33-page list of bills and subjects that Norquist wants to influence, ranging from banking to gambling to taxes. Americans for Tax Reform is best known for pushing politicians to sign a no-new-taxes pledge. Norquist's spokesman, John Kartch, gave a written response to Boston Globe questions. Kartch said the group spends "all its energy and resources to work for lower tax, less spending and limited government."

By working through tax-exempt organizations, Norquist does not have to disclose donors; this has made it difficult to track whether he's acting on behalf of contributors. By registering only as his group's lobbyist -- rather than for specific clients -- he does not have to report who is benefiting from his work. That has led critics such as former US senator Warren Rudman, Republican of New Hampshire, to say that Norquist's foundation is a "front for lobbying activities."

"He really lobbies for clients, although they don't call them clients," said Melanie Sloan, head of Citizens for Responsibility and Ethics in Washington. "He will lobby for those who have made contributions."

In his position as head of Americans for Tax Reform, which he started in 1985, he was paid $192,000 in 2004, according to tax records. An examination of Norquist's activities over the past decade shows a pattern: He has maintained a highly visible public persona as a crusader on behalf of the average taxpayer, but his work has also benefited some of his biggest donors who have specific interests.

[T]he Massachusetts native has always refused to name his financial backers. Behind the "grass-roots" activism, however, is a multimillion-dollar donor list that is the envy of Washington. [I]nterviews and copies of Norquist's donor lists, obtained by the Boston Globe, show that contributors include an array of special interests ranging from tobacco companies to Indian tribes to a Las Vegas casino.

The biggest surprise is Norquist's largest individual donor: Richard "Dickie" Scruggs, a Democratic Mississippi trial lawyer, who contributed $4.3 million. Scruggs had received a $1 billion fee in the landmark tobacco case against the same tobacco companies that were also Norquist's donors.

Scruggs, like the tobacco companies and some other leading donors, was interested in more than lifting the burdens of the taxpayer. He said he had his own agenda: He wanted Norquist to work to defeat a congressional proposal that he feared would confiscate most of his $1 billion legal fee in the tobacco case.

"I paid a lot of money," Scruggs said.
"I thought that was the way the game was played."
A registered Democrat, Scruggs was part of a legal team that won a $246 billion settlement against tobacco companies on behalf of a group of states. Scruggs's law firm was awarded a $1 billion legal fee. If the Republican proposal to limit high legal fees became law, Scruggs stood to lose most of his fee.

Moreover, other trial lawyers who also received huge fees would also have been hit. Given that trial lawyers are major donors to the Democratic Party, Scruggs saw the attack on their fees as a Republican effort "aimed at essentially de-funding the Democratic Party by penalizing trial lawyers."

Scruggs decided that he needed to hire a prominent Republican antitax activist to fight what he viewed as a tax on legal fees. "There is an expression, 'If you need a thief, take him from the gallows,' " Scruggs said.

The effort to reduce legal fees never became law.
It is unknown what, if anything, Norquist did to help Scruggs, but it is clear that Scruggs's money helped Norquist's group.
At about the time Scruggs gave his $4.3 million,
Norquist's group spent $4.2 million
on ads that mostly praised Republicans in tight congressional races.
Kartch, Norquist's spokesman, said Scruggs's money was used for many purposes, but declined to say whether any went to the ads. Scruggs, stressing his Democratic credentials, was incredulous at the possibility that his money paid for the ads.
"That is the opposite motivation for which I contributed to them,"
Scruggs said. "I would never have done it."

Caveat Emptor, Mr. Scruggs! Just because you are a wealthy lawyer doesn't make you an intelligent consumer! You got scammed just as much as every American voter who thought that George W. Bu$h was better for America just because you felt better about having a guy you'd be drinking a beer with as president rather than some 'policy wonk' who demonstrated an ability to understand several complex issues simultaneously!

Recognize that self-interest ruled your decision, Mr. Scruggs. Mike Eskew understands this, or he wouldn't be pitching corporate execs with statistics like how much money Ford was saving using some of the technological improvements he proposed for the shipping business. Having additional cost savings would make it possible for business to support the taxation necessary to provide the infrastructure they need - rails, roads, runways and quays - that make their businesses even viable. Eskew recognizes in his speech the connection between the nation's infrastructure and profitability, and also mentions the connection between an educated work force with employment opportunities and profitability. I wish more execs understood this, and then did something about it like Eskew has.

We may not agree on every political issue, but I as a worker recognize the necessity for the healthy transportation system that Eskew proposes. Even though business would benefit far more than I would as an individual from the expendature of funds for infrastructure, I know I wouldn't be left out of the benefit, as I mostly am with Bu$hCo 'tax reform'. Therefore, as a taxpayer, if I owned a Representative in Congress, I would support the expendature of funds on infrastructure over the wastage of precious national treasure for wars of conquest of sovereign petroleum nations.

It's clearly a much better investment.


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