the contrarian - JOHN EDWARDS, THE RIGHT MAN AT THE RIGHT TIME

According to an article in Monday’s LA Times, presidential candidate John Edwards has been focusing his campaign, for the past two years, on the plight of America’s working class. He was quoted in the article as saying “This is a huge moral issue facing the country.”

Indeed it is.

Two weeks ago, Ted Kennedy rose in the Senate and vigorously defended a provision of the new immigration bill that would essentially promote the insourcing of skilled jobs, such as engineers and scientists.

Specifically, this proposed guest worker program would give credit to foreign applicants for their job skills, age, length of experience, extent of education, whether they have actually been hired by an American company and whether they speak fluent English. Minor emphasis would be placed on any relationships to U.S. citizens.

Certainly this must have been a new low for the workers of America to see one of their leading liberal politicians championing a provision that benefits big business, to the detriment of jobholders.

It’s not much of a stretch to look down the road and see companies like Pfizer sending their recruiters over to Asia, or Central and South America, to hire skilled employees and then slipping them through the greased wheels of the new guest worker program.

And, in the process, who gets ignored? The tens of thousands of Pfizer’s ex employees who had been laid off, that’s who.

It must be observed that when Kennedy was challenged for supporting this provision, his response was that it would be good because these would be “legal” workers.

With no disrespect to Kennedy, that remark made little sense. Will the American labor pool feel better because it is cast aside for cheaper, but legal, workers from abroad? Not very likely!

At this point, the guest worker provision has been watered down somewhat, but, as onerous as it is, it’s still making its way through the approval process in the Senate, before being considered in the House. And, if it seems weak or harmless, remember two things. It’s a foot in the door, and, in our system, big business calls the shots.

Under the general rules of the so-called pendulum theory, when a trend extends beyond the normal limits of reason, it tends to become reversed and remain reversed until the diametrically opposite limits have been breached.

Very possibly, conditions in the American workforce, which can also be described as our great middle class, the so-called moderate majority, have deteriorated beyond the normal limits of reason.

Kennedy’s apparent defection, even if only temporary, is one possible indication.

Another was revealed by a study released last week showing that the average earnings of men in their thirties actually shrank from $40,200 in 1974 to $35,000 in 2004, adjusted for inflation. Some of this shrinkage was offset by the increased earnings of working wives, but overall, family income growth had slowed.

The report was issued by the prestigious Pew Charitable Trust. The research concentrated on the 30’s age group because it was considered to be a good predictor of lifetime income.

So, what else was going on over that 30-year period while the great middle class was losing, on average, 12% of its earnings?

Well, for one thing, the S&P 500 index was rising over 1,600%, its earnings were rising over 600% and its dividends were rising over 400%. These figures are not adjusted for inflation, but the significance is obvious. Also, the fact that the middle class owns some portion of the stock market is immaterial. The relevance here is that middle class wages have not shared in the boom.

Also, to add insult to injury, according to the 11/27/05 edition of the Philadelphia Enquirer, CEOs’ earnings increased from 42 times to 531 times that of the average worker, between 1980 and 2000.

And the tax giveaway by the Bush administration has only served to exacerbate the problem. The Associated Press reported on 8/16/04 the not so surprising conclusion that Bush’s tax cuts have shifted the overall tax burden to the middle class from the wealthiest Americans.

Plutarch wrote almost 2000 years ago, "An imbalance between rich and poor is the oldest and most fatal ailment of all republics." Despite the time tested wisdom of this adage, a 2004 study put out by the American Planning Association reported that “the United States has the greatest income and wealth disparity of any advanced industrial society.”

Clearly, the pendulum has swung beyond the normal limits of reason.

And John Edwards, of all the candidates, has recognized this as one of America’s greatest problems.

One of the symptoms of the imbalance has been the growing number of uninsured, which is now estimated at 45,000,000. John Edwards has a plan to provide universal healthcare.

Despite the previously failed attempt to achieve such a program by the Clinton administration, the need is now even more apparent.

According to a World Health Organization report in 2000, the US health system spent a higher portion of its gross domestic product than any other country, but ranked 37^th out of 191 countries, in terms of its performance.

The report revealed that 28 countries had life expectancies that were longer than the United States. 12 countries, including Cuba, had lower infant mortality.

Clearly, we’re not getting our money’s worth out of our health care system and John Edwards intends to do something about it. His program would require people to buy health insurance, partially paid for by their employers, with expanded programs for the poor.

Furthermore, Edwards’ acknowledgment of the need to provide assistance and jobs for the underpriveledged, while politically risky, is long overdue.  A 2000 UN report also showed that, despite the fact that the United States had the world's highest gross national product, it ranked first in poverty rates among the 18 richest countries.

Edwards doesn’t expect to see a quick change take place. He anticipates it to be a 30-year process.

He has also suggested the possibility of raising taxes on wealthy Americans to help foot the bill, those who have been taking far more than their fair share of the pie.

This, as much as anything, demonstrates Edwards’ political courage, because it is the wealthy who will essentially be paying for many of the mind shaping television messages that we’ll be bombarded with between now and late 2008.

So, don’t be surprised if you read or hear more about what John spends on a haircut, or who he represented as an attorney, for they will surely attempt to discredit him with irrelevant information and video clips.

In fact, an editorial by Jonah Goldberg in yesterday’s LA Times presented a scathing list of John’s “transgressions” - such as accepting $55,000 for a speech at UC Davis - and, apparently, in this case, the attack was all because of his opposition to Bush’s handling of the war on terror.

In this age of slash and slander in the political world, it is important to stay focused on the key facts. And, the central point here is that, unlike our current president, Edwards is a self made individual, a man who has become wealthy because he has been successful, a man who has the courage of his convictions.

He is, in fact, the type of person who might just make a great president.

Dave McGill, News Correspondent……………….

Dave’s column, “The Contrarian,” published every Wednesday to Gather Essentials: News will occasionally present a contrary view to various aspects of the news, or an alternate take on the conventional wisdom of the day………….

Dave has been a senior officer of a large eastern insurance company, involved in economic projections and investment strategy, president of a Midwestern mortgage banking company, and a financial consultant in Southern California, serving clients in the field of commercial real estate development…………….

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