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What’s The Matter With Red States?

English: Protester seen at Chicago Tax Day Tea...

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I didn’t catch this until after I posted previously about parasitic Red States — Paul Krugman is on point:

Moochers Against Welfare

Rick Santorum declares that President Obama is getting America hooked on “the narcotic of dependency.” Mr. Romney warns that government programs “foster passivity and sloth.” Representative Paul Ryan, the chairman of the House Budget Committee, requires that staffers read Ayn Rand’s “Atlas Shrugged,” in which heroic capitalists struggle against the “moochers” trying to steal their totally deserved wealth, a struggle the heroes win by withdrawing their productive effort and giving interminable speeches.

Many readers of The Times were, therefore, surprised to learn, from an excellent article published last weekend, that the regions of America most hooked on Mr. Santorum’s narcotic — the regions in which government programs account for the largest share of personal income — are precisely the regions electing those severe conservatives. Wasn’t Red America supposed to be the land of traditional values, where people don’t eat Thai food and don’t rely on handouts?

The article referenced by the columnist is:

Even Critics of Safety Net Increasingly Depend on It

For my part, I point out these things to underline the hypocrisy of the right-wing position and to puzzle about why people vote against their own self interests.

I know why these states receive more than they pay out in tax dollars — they are poorer than the other states. I really don’t begrudge them the safety net that they pay into as individuals (despite my hyperbolic suggestion at the end of the last post).

Krugman again:

Now, there’s no mystery about red-state reliance on government programs. These states are relatively poor, which means both that people have fewer sources of income other than safety-net programs and that more of them qualify for “means-tested” programs such as Medicaid.

But he also shares my confusion as to why people continue to vote for people who will screw them into poverty.

He offers three explanations:

1. The GOP exploits social issues like gay marriage, abortion and religion to whip people up.
2. The wealthy in red states tend to be very socially conservative, while the blue state affluent are socially liberal. These two groups drive the debate in their respective states.
3. Red state beneficiaries do not understand their place in the system, frequently stating in polls that they don’t benefit from the Federal government while at the same time receiving Medicaid/Medicare, Social Security, Welfare and Unemployment.

Regardless of the forces at work, the outcome is that a bunch of people are railing to end policies that they themselves benefit from; simply because they think these programs are only provided for the idle poor.

As stated in my previous post and as study after study has found, the beneficiaries of these programs are overwhelmingly elderly, poor and working folks who have paid into the system.

But with the economy starting to recover, unemployment slowly diminishing, and no ideas of their own to run on, Republicans are desperate for a boogeyman.

Like Reagan’s non-existent “Welfare Queens” of the 1980’s, the GOP needs a boogeyman to run against, and the strawman caricature of the secret Muslim socialist president has played out for most voters.

-Chris

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February 17, 2012 Posted by | Uncategorized | , , , , , , , | Leave a comment

Government As A Corporation? Nope.

I’ve heard this meme over the past three decades, and the emptiness of it never diminishes.

Paul Krugman apparently agrees:

America Isn’t a Corporation

If business and the free market really could meet all of our needs, government wouldn’t exist.

It is because government steps in to moderate the excesses of the market and set the rules and create a level playing field that capitalism can thrive.

Unfortunately, the idea that government should be run like a government is part of the conventional wisdom — of people who don’t think too hard about it.

Krugman remarks:

But there’s a deeper problem in the whole notion that what this nation needs is a successful businessman as president: America is not, in fact, a corporation. Making good economic policy isn’t at all like maximizing corporate profits. And businessmen — even great businessmen — do not, in general, have any special insights into what it takes to achieve economic recovery.

Why isn’t a national economy like a corporation? For one thing, there’s no simple bottom line. For another, the economy is vastly more complex than even the largest private company.

In fact, running government as a business has some terrible consequences:

Consider what happens when a business engages in ruthless cost-cutting. From the point of view of the firm’s owners (though not its workers), the more costs that are cut, the better. Any dollars taken off the cost side of the balance sheet are added to the bottom line.

But the story is very different when a government slashes spending in the face of a depressed economy. Look at Greece, Spain, and Ireland, all of which have adopted harsh austerity policies. In each case, unemployment soared, because cuts in government spending mainly hit domestic producers. And, in each case, the reduction in budget deficits was much less than expected, because tax receipts fell as output and employment collapsed.

Currently, it is Willard MittGordon Gekko” Romney who is claiming that his extensive portfolio of firing people makes him uniquely qualified for the presidency.

Poppycock.

He’s even tried to compare his actions at the now-infamous Bain with Obama’s bailout of the automobile industry.

Like many observers, I was somewhat startled by his latest defense of his record at Bain — namely, that he did the same thing the Obama administration did when it bailed out the auto industry, laying off workers in the process. One might think that Mr. Romney would rather not talk about a highly successful policy that just about everyone in the Republican Party, including him, denounced at the time.

But what really struck me was how Mr. Romney characterized President Obama’s actions: “He did it to try to save the business.” No, he didn’t; he did it to save the industry, and thereby to save jobs that would otherwise have been lost, deepening America’s slump. Does Mr. Romney understand the distinction?

In an era when huge private corporations have led to the largest economic calamity in our lifetime, you would think politicians would be leery of drawing comparisons.

The major problem with this mindset is that it misses the real issue:

We’re in the mess we’re in BECAUSE government got too cosy with business and let corporations remove regulations and determine government policies.

It failed.

And if we are to learn from the example of Europe, cutting spending and jobs to save “the bottom line” is a self-inflicted wound to our economy and the stability of the nation.

-Chris

January 13, 2012 Posted by | Uncategorized | , , , , , , , , , | Leave a comment

Lies About Jobs

map for us unemployment numbers

Image via Wikipedia

I am not the biggest fan of Barack Obama.

My leanings are more progressive, and his seem to be deeply rooted in the corporate boardroom.

That said, you have to give the man his due when it comes to the stimulus and job creation.

I am convinced by arguments by Paul Krugman and other Keynesians that the stimulus was much too small to have optimal effect, but the small package Obama was able to push through did create jobs.

This is, of course, the reality being mocked by the current meme being rolled out by the pack of jackals running for the presidential nomination on the Republican side.

Both Mitt Romney and Gingrich have calculated the number of jobs lost in the American economy from the date of President Obama’s inauguration and repeating that Obama’s policies have resulted in 1.9  million lost jobs.

In GOP-land, this proves that the stimulus was a complete failure.

Paul Krugman brings the inconvenient facts:

Start with the Obama record. It’s true that 1.9 million fewer Americans have jobs now than when Mr. Obama took office. But the president inherited an economy in free fall, and can’t be held responsible for job losses during his first few months, before any of his own policies had time to take effect. So how much of that Obama job loss took place in, say, the first half of 2009?

The answer is: more than all of it. The economy lost 3.1 million jobs between January 2009 and June 2009 and has since gained 1.2 million jobs. That’s not enough, but it’s nothing like Mr. Romney’s portrait of job destruction.

The Economist points out that even if you used the Romney-Gingrich metric, if the economy continues to grow at the current pace (and the jobs report was actually better than expected at the time of this response) the argument will be weak by the time election day rolls around:

A lot can happen over the next year, but for the moment the current recovery looks likely to continue. On Friday, the Bureau of Labour Statistics will report the latest employment data, for the month of December. The consensus forecast is for a gain of 170,000 private-sector jobs and a loss of 20,000 public-sector jobs, for a net gain of 150,000. (In the year to November, the economy added an average of 133,000 net jobs and 157,000 private-sector jobs per month, so this would represent a slight acceleration.) If we extrapolate those changes out through the election, then Mr Obama’s opponent will only be able to claim net job losses during the Obama presidency of just 55,000. What’s more, the net figure will entail government job losses of 833,000 combined with net private-sector job creation of 788,000. Given steady improvement in state and local finances, continued loss of 20,000 government jobs per month seems too high, so there is a decent chance that the Republican nominee will be unable to claim any net job loss during the Obama presidency at the time voters go to the polls.

This is what is on offer from the modern right-wing — solutions to problems that don’t exist and a willful ignorance of real problems and what can fix them.

Unfortunately, the person likely to receive the GOP nod is a serial liar who has spent a career destroying jobs for profit.

Krugman again:

The point is that Mr. Romney’s claims about being a job creator would be nonsense even if he were being honest about the numbers, which he isn’t.

At this point, some readers may ask whether it isn’t equally wrong to say that Mr. Romney destroyed jobs. Yes, it is. The real complaint about Mr. Romney and his colleagues isn’t that they destroyed jobs, but that they destroyed good jobs.

When the dust settled after the companies that Bain restructured were downsized — or, as happened all too often, went bankrupt — total U.S. employment was probably about the same as it would have been in any case. But the jobs that were lost paid more and had better benefits than the jobs that replaced them. Mr. Romney and those like him didn’t destroy jobs, but they did enrich themselves while helping to destroy the American middle class.

And that reality is, of course, what all the blather and misdirection about job-creating businessmen and job-destroying Democrats is meant to obscure.

We are living in scary times, where it is obvious that the real lessons of the utter and absolute failure of trickle-down economics that are plain to most literate people will never be recognized by a sizeable portion of the American populace.

So you get candidates like Romney, Paul, Gingrich, and Santorum who willfully lie and distort readily-available facts on a level and scale so blatant and egregious that it beggars the imagination.

And on the other side, we have Obama.

Sigh.

-Chris

January 9, 2012 Posted by | Uncategorized | , , , , , , , , | 1 Comment

Republicans Continue War on EPA

English: Picture I took of a small puddle of t...

I have to believe that the rank and file right-winger really has no idea of the benefits of having an effective Environmental Protection Agency.

These guys hunt, fish, breathe air, drink water and enjoy good health, right?

That’s why it is so frustrating to see them piling on the EPA at every opportunity:

Springtime for Toxics

Paul Krugman takes them to task for their war on the environment:

With everything else that has been going on in U.S. politics recently, the G.O.P.’s radical anti-environmental turn hasn’t gotten the attention it deserves. But something remarkable has happened on this front. Only a few years ago, it seemed possible to be both a Republican in good standing and a serious environmentalist; during the 2008 campaign John McCain warned of the dangers of global warming and proposed a cap-and-trade system for carbon emissions. Today, however, the party line is that we must not only avoid any new environmental regulations but roll back the protection we already have.

Krugman is speaking specifically about recently passed but long-overdue EPA regulations on mercury.

Republicans, who allegedly carry the fiscally conservative banner are showing their true colors on this one:

In fact, the benefits of reduced fine particle pollution account for most of the quantifiable gains from the new rules. The key word here is “quantifiable”: E.P.A.’s cost-benefit analysis only considers one benefit of mercury regulation, the reduced loss in future wages for children whose I.Q.’s are damaged by eating fish caught by freshwater anglers. There are without doubt many other benefits to cutting mercury emissions, but at this point the agency doesn’t know how to put a dollar figure on those benefits.

Even so, the payoff to the new rules is huge: up to $90 billion a year in benefits compared with around $10 billion a year of costs in the form of slightly higher electricity prices. This is, as David Roberts of Grist says, a very big deal.

And it’s a deal Republicans very much want to kill.

Unfortunately, the GOP pathological phobia of short-term costs explains a lot about the current state of the nation, from their shortsighted view of taxation and infrastructure investment, to their view of Wall Street regulation.

Along with Krugman, I celebrate the new rules and hope they are a harbinger for a move to hold industry accountable for the real harm they do — to health and the economy.

-Chris

December 27, 2011 Posted by | Uncategorized | , , , , , , , | Leave a comment

“PolitiFact” Panders, Loses All Credibility

The Tower of Lies

Here’s a  fact.

Paul Ryan (R-WI) introduced a plan to eliminate Medicare as we know it, and replace it with a voucher system to purchase private insurance.

This is indisputable. It is the essence, the core of the Ryan Plan.

Yes, he still wants to call the new plan “Medicare”,  but in fact it is not the same system at all.

Enter PolitiFact.

PolitiFact is a website run by the St. Petersburg Times that purports to distill the truth from political rhetoric.

The site acknowledges that the Ryan plan replaces the current Medicare system with a voucher scheme, but then puts a semantic twist on their delivery. Referring to Democrats:

• They used harsh terms such as “end” and “kill” when the program would still exist, although in a privatized system.

Democrats, slowly standing from their normal posture of fetal cowering, challenged Ryan on the plan and ran several ads stating that Republicans are seeking to end Medicare as we know it.

Admittedly, some were hyperbolic — exuberance born of the realization that the GOP had handed them a gift, but exaggerations aside, the core of their argument was sound.

 Unfortunately, PolitiFact has gotten trapped in the wrong-headed media notion that balance means criticizing both political parties in equal proportion — regardless of whether one side is telling the truth less often, and in more material ways.

In many instances, they have consistently bent over backwards to nitpick  semantics when the essential truth of Democrat’s claims is undeniably true.

The nail in PolitiFact’s coffin is their “Lie Of the Year 2011”:

A complicated and wonky subject with life-or-death consequences, health care is fertile ground for falsehoods. The Democratic attack about “ending Medicare” was a pervasive line in 2011 that preyed on seniors’ worries about whether they could afford health care.

Steve Benen at the Washington Monthly dismantles this piece of hackery:

It’s unnerving that we have to explain this again, but since PolitiFact appears to be struggling with the relevant details, let’s set the record straight.

Medicare is a single-payer health care system offering guaranteed benefits to seniors. The House Republican budget plan intended to privatize the existing system and replace it with something very different — a voucher scheme. It would still be called “Medicare,” but it wouldn’t be Medicare.

It seems foolish to have to parse the meaning of the word “end,” but if there’s a program, and it’s replaced with a different program, proponents brought an end to the original program. That’s what the verb means.

I’ve been trying to think of the best analogy for this. How about this one: imagine someone owns a Ferrari. It’s expensive and drives beautifully, and the owner desperately wants to keep his car intact. Now imagine I took the car away, removed the metallic badge off the trunk that says “Ferrari,” I stuck it on a golf cart, and I handed the owner the keys.

“Where’s my Ferrari?” the owner would ask.

“It’s right here,” I’d respond. “This has four wheels, a steering wheel, and pedals, and it says ‘Ferrari’ right there on the back.”

By PolitiFact’s reasoning, I haven’t actually replaced the car — and if you disagree, you’re a pants-on-fire liar.

As Benen notes, this is a straight up semantics quibble. If this is the lie of the year, where has Politifact been?

Paul Krugman joins in, and shares my conclusion:

The answer is, of course, obvious: the people at PolitiFact are terrified of being considered partisan if they acknowledge the clear fact that there’s a lot more lying on one side of the political divide than on the other. So they’ve bent over backwards to appear “balanced” — and in the process made themselves useless and irrelevant.

Way to go, guys.

Exactly. Not a shred of credibility left.

Chris Mooney piles on:

PolitiFact’s move is especially remarkable when you survey some of the clear falsehoods that were almost lie of the year:

  • The economic stimulus created “zero jobs.” — The National Republican Senatorial Committee and other Republicans
  • Scientists are “questioning the original idea that man-made global warming is what is causing the climate to change. … (It is) more and more being put into question.” — Republican presidential candidate Rick Perry
  • President Obama “went around the world and apologized for America.” — Republican presidential candidate Mitt Romney
  • The vaccine to prevent HPV can cause mental retardation. — Republican presidential candidate Michele Bachmann

Notably, all of these big lies were uttered by Republicans. In fact, with the exception of the Bachmann example, they were uttered repeatedly by Republicans (albeit in varying forms).

All of this is a shame, because in the current heated political environment, a real straight shooter is needed to sift fact from fiction.

There appears to be an opening for that service.

-Chris

December 22, 2011 Posted by | Uncategorized | , , , , , , , , , , | Leave a comment

Paying Their Fair Share

Stocks

Image by shareski via Flickr

Two news items caught my attention today:

(1)The Top 0.1% Of The Nation Earn Half Of All Capital Gains
(2)How To Make Robin Hood Proud

The first details how the a small fraction of the top 1% of top earning Americans take home half of the capital gains in the United States:

The top 0.1%– about 315,000 individuals out of 315 million– are making about half of all capital gains on the sale of shares or property after 1 year; and these capital gains make up 60% of the income made by the Forbes 400.

The capital gains tax rate has been steadily cut from 35% in 1978 to 15% today. This had assisted the concentration of wealth to a tiny handful of Americans and burgeoning deficit.

Writer Robert Lezner, writing this piece for Forbes.com, comes to the only reasonable conclusion:

I commend you to the late Justice Louis Brandeis warning to the nation that “We can have democracy in this country, or we can have great wealth concentrated in the hands of a few, but we can’t have both.” We have to make up our minds to restore a higher, fairer capital gains tax to the wealthiest investor class– or ultimately face increased social unrest.

The second article, as if on cue, describes the growing movement in Europe to institute a Financial Transaction Tax (FTT) of 0.5%. This tax would apply to sales of stock, bonds and derivatives.

Proponents argue that the tax would hit financial transactions most prone to dangerous speculation, and make that 0.1% pay their fair share of the tax burden.

The revenue from such a tax would be substantial:

A broad-based FTT (0.5 percent on stocks and options, or about 50 cents per $100 trade) could yield roughly $170 billion in federal revenue annually, according to a study by CEPR and the University of Massachusetts. Oxfam, a leading advocate, says the money should be used for international development. Other proponents suggest deficit reduction, job creation, economic stabilization, global warming prevention and other causes.

The idea has the support of over 1,000 prominent economists from 53 nations, including Paul Krugman and Joseph Stiglitz, and protesters in several European have made the FTT a top priority.

Conservative critics, of course have complained that a FTT would “distort markets”, cause businesses to shut down and be unenforceable…providing no evidence whatsoever. In fact, the London stock market, where an FTT is in effect, has managed to thrive in the face of the allegedly punishing burden.

Sounds like a good idea to me.

-Chris

November 23, 2011 Posted by | Uncategorized | , , , , , , , , , | Leave a comment

The lie of the tax holiday

Paul Krugman delivers again.

Commenting on the “new” plan being pushed to have a tax holiday for corporations, Krugman points out that it is again being sold as an answer to our job problems.

Cutting taxes for corporations does not and never has led to more jobs.

The cuts are never really designed for small businesses, and are the worst kind of trickle down wishful thinking.

Krugman:
 

As opponents of this plan point out, we’ve already seen this movie: A similar tax holiday was offered in 2004, with a similar sales pitch. And it was a total failure. Companies did indeed take advantage of the amnesty to move a lot of money back to the United States. But they used that money to pay dividends, pay down debt, buy up other companies, buy back their own stock — pretty much everything except increasing investment and creating jobs. Indeed, there’s no evidence that the 2004 tax holiday did anything at all to stimulate the economy.

A nice piece on what really happens when we cut taxes on corporations, and the disincentive it is for them to invest in infrastructure and employees.

-Chris

July 5, 2011 Posted by | Lobbyists, Politics, Reagan, Republicans, Tax Debate, Unemployment | , , , , , , , , , | Leave a comment

Low Expectations for State of the Union

President Obama just about to deliver his Janu...

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I don’t have any great expectations for the State of the Union address tomorrow night.
Paul Krugman has been critical of the signalling coming out of the White House:
The Competition Myth

Robert Reich has a blog summarizing how our country got to it’s current state and what the president should do about it:
The State of the Union: What the Presideny Should Say

There’s much truth in what both of these economists say.

But Obama has spent much of his time trying to appease business interests and surrounding himself with the movers and shakers from the very corporate enclave that helped create our current economy.

It’s not clear exactly what helpful policies will be allowed to see sunlight in a setting in which the president is bending over backwards to satisfy big business.

-Chris

January 24, 2011 Posted by | Deficit, Democrats, Economics, Obama, Politics, Republicans | , , , , , , , | Leave a comment

Mortgage Foreclosures Explained

Mortgage debt

Image via Wikipedia

Paul Krugman does another bang up job explaining a complicated issue in yesterday’s New York Times.

This time it’s the mortgage foreclosure mess:

The Mortgage Morass

Seems that many on the right think that the lack of documentation for foreclosures (much of which was lost in the relay of mortgages from banker to banker) is no big deal and we should take it on faith that when the banks say someone has defaulted on the provisions of their loan, we should believe them.

We shouldn’t. Krugman explains:

This is very, very bad. For one thing, it’s a near certainty that significant numbers of borrowers are being defrauded — charged fees they don’t actually owe, declared in default when, by the terms of their loan agreements, they aren’t.

Krugman properly nails the Obama Administration for its obeisance to Wall Street:

True to form, the Obama administration’s response has been to oppose any action that might upset the banks, like a temporary moratorium on foreclosures while some of the issues are resolved. Instead, it is asking the banks, very nicely, to behave better and clean up their act. I mean, that’s worked so well in the past, right?

As mentioned in the piece, there are some good ideas on how to deal with this mess:

…the Center for American Progress has proposed giving mortgage counselors and other public entities the power to modify troubled loans directly, with their judgment standing unless appealed by the mortgage servicer. This would do a lot to clarify matters and help extract us from the morass.

Of course, this will happen over the screeching undead bodies of the greedy bankers who caused this mess in the first place.

So it won’t happen.

It may be naive thinking on my part, but wouldn’t it be better to have someone in their home, paying a mortgage than to foreclose and try to get only a fraction of the value back in this terrible market?

Anyway, this is yet another datapoint indicating the claims that Obama is the first American Socialist President — Not so much.

-Chris

October 15, 2010 Posted by | Democrats, Economics, Obama, Politics, Republicans, Wall Street | , , , , , , , | Leave a comment

Krugman in the Crosshairs

Paul Krugman Talk

Image by Taekwonweirdo via Flickr

Apparently, Paul Krugman is continuing to be a problem for the powerful elite.

From time to time you read a snide comment or a post purporting to prove Krugman wrong. If it comes to his attention, the Nobel Prize-winng economist usually takes the argument apart like a cheap suit.

This past week, he has faced two attacks from the gatekeepers of knowledge in the media.

The first is from a media columnist who has a history of conflict of interest and of missing the point of the subjects he writes about completely.

Most of the article is standard profile fluff, but there is undercurrent of snobbery throughout that seems to say that rich people are hypocrites when they advocate for the middle class and poor.

For example, in Kurtz’ Media Notes profile of the New York Times columnist, he writes:

Krugman would seem to have an exceedingly comfortable life. There’s the large house in Princeton, described by the New Yorker as being in “Japanese modern style,” the New York apartment and the condo on the beach in St. Croix. There are trips to international conferences, most recently in Sweden and Japan. He makes a bundle on writing textbooks with his wife. People’s heads turn in restaurants, like the one where he is lunching.

So, Kurtz seems to say, why doesn’t he just shut the F*&K up?

Like many of the media elite, floating around in the rarified air (and sipping champagne with the politicians and other power brokers they write about), Kurtz cannot fathom why someone would be upset that American is going to hell in a handbasket.

After all, he’s got plenty of money, right?

Krugman started his early columns in the New York Times at the time the Bush Administration took the reigns. As Kurtz does manage to note, the Princeton professor didn’t like the lies and sleight of hand the Bush economic team used to rig the economy for the wealthy.

He called them on it in print. A lot.

This has made Krugman a target for the elite and the right, who bluster nonsensical pronouncements about magical economic forces the defy scrutiny. They usually do this without a shred of evidence to back them up, or by distorting and misreading data.

Krugman writes in a way that takes the complexity of the worlds of finance and economics and makes them understandable to the layperson.

And so, he must be marginalized. Immediately. Mercilessly.

The second attempt this week is also the most hilarious.

As reported in Salon’s “The dumbest attack on Paul Krugman, ever”, blogger Gonzalo Lira, writing for Business Insider tried to twist the Times’ columnist’s word to make it seem that he was advocating starting a war to improve the economy.

Dumb, dumb, dumb:

It’s Krugman’s disturbing, nihilist inference, which he makes over and over, tucked away in his articles, but always there, like a nasty aftertaste of a drink laced with a roofie: So maybe another total war might not be such a bad idea now, so as to get us out of this new Global Depression.

That is what I object to in Paul Krugman: He seems to be offering up another war as the only way to fix the economy.

Of course, Krugman never said or suggested any such thing.

Lira tries to state that Krugman’s reference to World War II’s role in helping bring the U.S. out of a depression (a little-debated fact among economists) as advocacy for starting another war.

Bullshit was called on Mr. Lira by large segments of the blogosphere, and Business Insider yanked the piece with a weak mea culpa:

The post that previously appeared at this URL by the writer Gonzalo Lira makes some claims about Paul Krugman’s stance on war being necessary for the economy that we feel distort Krugman’s actual stance.

It’s clear that certain factions are scrambling to find something to nail Krugman with, with little success.

It’s a good indication that what he is saying is making certain people uncomfortable.

You should read him.

-Chris

September 29, 2010 Posted by | Debt, Deficit, Economics, Media Criticism, Politics, Tax Debate, Uncategorized | , , , , , , , , | Leave a comment