Thursday, February 6, 2014

Universal Healthcare: Is It A Disincentive To Work?

The political press is ablaze today following the latest report from the Congressional Budget Office (CBO) on the labor market.  Buried somewhere in the report is an estimate that the Affordable Care Act (ACA) may result approximately two to two and a half million Americans choosing to work less or not at all within a decade due to the availability of subsidized health insurance.  While this isn't the focus of the report, it is what the political elite chose to fixate upon. Republicans seized on the estimate as proof positive that the ACA is a bad thing and creates a disincentive to work and incentivizes laziness and dependency upon the government.  The Republican aligned Washington Times spun the story as one that will 'Push 2 Million Workers Out of the Labor Market.'  The left-leaning Washington Post spun the story as one of choice by claiming the ACA would 'prompt over 2 million to quit jobs or cut hours', ostensibly because they could keep their health insurance even if they gave up their job.  Democrats immediately began arguing that this is a positive thing as some of those who gave up their jobs might take a risk and start a business that could end up employing others.  Others might take their new found independence from working a low wage job to spend more time with their kids or spouses.  Either way, the spin from the political elite highlights one of the idiosyncratic features of the American economic ethos...tying the provision of health insurance to an employer.

Adopting a normative framework, one might ask why health insurance in America is so intricately tied to one's employment status?  Do people without jobs have no need of health insurance?  What about those in low wage industries whose employers do not offer coverage?  If we are going to link employment and health insurance it seems logical that all employers should be required to offer it to their workforce.  Yet, prior to the ACA that was not a requirement.  Even after the ACA small businesses with fewer than 50 employees are exempt from providing health insurance coverage to employees and those with more than 50 employees only have to pay a $2000 fine (per employee) if they fail to offer insurance.  Considering that providing coverage to a worker costs far more than $2000 per worker, the real disincentive in the law is benefit for employers who can save hundreds of thousands of dollars by dropping health care coverage for their workforce.  Of course, many of those workers will then qualify for federal subsidies to purchase insurance on the market exchanges, which means that once again the government is subsidizing large corporate employers as it has done for decades.  For example, McDonald's and Wal-Mart employees are among the largest recipients of federal benefits in the country.  Why are taxpayers subsidizing below poverty level wages at these highly profitable companies?  So we can have a $.99 cheeseburger or pay $.06 less for a loaf of bread?  Please!

A second aspect that arises from all the chatter about the potential effect of the ACA on employment is just how much politicians, Republicans in particular, love to talk about work.  It is as though work has been raised to the status of a demi-god.  Don't get me wrong, I'm all for working and I do my fair share of it between a full time job and two side jobs now and then.  And I am in the rather unique position of loving what I do, something many Americans cannot say.  Nevertheless, the emphasis on work also seems to be something idiosyncratic to America.  Many cultures, both past and present, place more emphasis on the family or community or the life of the mind than we Americans do.  For example, Australia requires all employers to provide 20 days of paid vacation per year plus 10 paid holidays.  French workers get a minimum of 5 weeks paid holiday leave plus up to 22 days of reduced time for workers who work between 35 and 39 hours a week.  Even our Canadian neighbors to the north mandate a minimum of 10 paid vacation days per year.  The good old USA?  0 days of mandatory paid vacation.  It makes one wonder if there is a correlation between the disintegration of the American family and the emphasis placed upon working at all costs, even in dead end low wage jobs.

In the end, we all have the same fate to look forward to.  I think it was Barbara Bush who said something to the effect of this:  At the end of your life when all is said and done it is highly doubtful you will look back and wish that you had gone to the office just one more time or pulled that double shift at Burger King. No, the thing you will wish you had done more of is spend time with your kids, with your spouse, with your friends and loved ones.  So...I say, if the ACA makes that possible for some people, it's a step in the right direction.  I'm okay with that, how about you?

Tuesday, November 12, 2013

Slavery? Beholden to a foreign master? Seriously, Sarah?

Correct me if I am wrong but didn't we have an election about 5 years ago in which the country told Sarah Palin to pack her bags and go back to Alaska?  I seem to recall her and her running mate losing by more than 7 million votes in 2008.  But hey, I'm getting older so my memory could be slipping.


So let's get this straight...Sarah Palin believes that the United States' $17 trillion dollar debt is the moral equivalent of slavery?  It is, in her mind, the equivalent of one person being able to own another and deny him/her basic human rights.  It gives our 'foreign masters' the right to whip us at will, sell us to any other party, or kill us without repercussion?  Is that what you're saying, Sarah?  I just want to make sure I understand before I proceed.

Okay, so what's wrong with Palin's analogy?  So much that I don't know where to begin.  I guess the beginning is as good a place as any.  Palin says,
"Our free stuff today is being paid for by taking money from our children and borrowing from China..."
What 'free stuff' would that be?  Government services aren't free and they never have been.  Fighting two wars in the middle east wasn't free.  Building a 21st century infrastructure of roads, bridges, rail networks, and schools is not free.  Caring for the weakest among us is not free.  Keeping 25% of the world's prison population locked up is not free.  All this 'stuff' costs money.  We, as a society, have chosen together to do these things, regardless of what you and your merry band of naysayers want to believe.  You and people of your ilk have engaged in obstruction, refused to allow the appropriate level of taxation to pay for the things WE have chosen to do together, leading us to the $17 trillion in debt we have racked up...most of which accumulated under Republican leadership.  The following graph shows the change in the debt as a percentage of GDP since WWII.


What we see in the above graph is that debt began to grow during the Reagan Administration and but for a few short years during the Clinton Administration has continued to grow ever since.  There are several reasons for that, including repeated tax cuts, increased spending commitments, and slow economic growth (except 1997-2000) when compared to the period from 1945-1980.  Another way to look at it is in terms of total dollars added to the debt, as the chart below shows.


Using this scenario, both President George W. Bush and President Obama have added a lot to our debt, though Reagan is still the debt king in terms of the percentage by which the debt increased while Clinton and Obama have increased it by the smallest percentages.  Perhaps this is due to Republicans rediscovering their fiscal conservatism whenever a Democrat is in the White House?  

What about Palin's primary claim that we are 'taking money from our children and borrowing from China'?  Is this true?  Yes and no.  We aren't literally robbing our children's piggy banks any more than a parent who buys his/her kids' Christmas presents with a credit card is taking money from them.  Only, we are not buying presents, we are investing in our future as a nation.  Yes, someone has to pay for that, whether it is the current generation, the next generation, or the one after that.  Unless economic growth returns to the 4-5% annual rate it was in the 1950's we won't have the money to pay for all our commitments without substantial tax increases.  I would, of course, argue that some tax increases are in order as we are currently paying the lowest rate of federal taxes in over 60 years and nearly half of all Americans pay no income tax at all (I'd rather abolish the income tax but that is for another day).  To move those individuals into tax paying status requires economic growth that includes substantial growth in wages for lower middle class workers, which have been stagnant for 35 years.  

Okay, so what about our 'foreign masters'?  Does China really own us?  Not really.  It is a fundamental misunderstanding on the part of lazy people like Sarah Palin to believe that.  Here are the facts:

The United States is currently a little over $17 trillion in debt, though that is somewhat misleading since we have $200 trillion in assets (oil, gas, land, buildings, etc...).  Of that debt, about 1/3 is owned by government agencies.  The single largest creditor for the U.S. government?  The Social Security Administration (SSA).  As of August 30, 2013 the SSA owns $2.764 trillion in government treasuries.  This is because for nearly 80 years Social Security has collected more in revenue than it has paid out in benefits.  The excess money is invested in US treasury bills, allowing the SSA to collect interest on the excess.  Someday, those T-bills will come due and the government will either have to raise taxes to pay them off or issue more T-bills and pay the old ones off with the proceeds from the sale of the new T-bills.  That is essentially what the government has been doing for 35 years.  The rest of this part of the debt is held by pension funds for the government, FDIC, and some other federal agencies.  

What about the other 2/3 of the debt?  Isn't that owned by China?  Well, no.  About $12 trillion of our national debt is what we call 'debt held by the public', which includes foreign held debt.  As of March 2013 almost half of the debt held by the public was held by the central banks of foreign governments.  Why?  Because America pays her bills and is viewed as a solid investment.  Or at least we were until Sarah Palin and the Tea Party started threatening to default on the debt.  Overall, $5.7 trillion of our public debt is held by foreigners.  China is the largest single holder of that debt at $1.27 trillion (August 2013), or roughly 10% of the total of public debt.  Japan's central bank is second at about $1.1 trillion.  But the largest holder of U.S. public debt?  The Federal Reserve Bank of the United States ($1.74 trillion).  

The fact is, most of our debt is money we owe not to China or other foreign interests but to ourselves.  We're in no danger of being whipped or hogtied by our 'foreign masters' because of the national debt. The debt is concerning for other reasons but fear of being a slave to our Chinese masters is not one of them.  

Full details on the debt can be found here.


Saturday, November 9, 2013

Strange Bedfellows: The Tea Party and Karl Marx

Karl Marx died 130 years ago in London, yet his legacy lives on through America's latest populist uprising.  No, I don't mean the flame out that was Occupy Wall Street, though that group certainly shared some of Marx's ideological heritage as well.  The populists I speak of are America's own Marxists, aka the Tea Party.  To be sure, many who associate themselves with the tea party will take umbrage with the veracity of my analysis.  I don't care...if it acts and thinks like a Marxist it must be a Marxist.

I began thinking about this subject after a conversation with a gentleman who said Bill O'Reilly was too 'left of center' for him and that Van Jones was further to the left than Karl Marx.  When Bill O'Reilly is left of center I'm no longer certain where the center is.  Nevertheless, let's explore a little of the core beliefs of Karl Marx and the Tea Party.  I'll begin with Marx.

First and foremost, Marx was a philosopher writing about the political economy that existed in mid 19th century Europe.  What he saw everyday was hordes of workers shuffling off to the factories and fields, exchanging their labor for minuscule wages so they might continue to subsist.  Not thrive mind you but just continue to breathe.  This exchange of labor for pay was not voluntary, it was a form of forced servitude that removed the individual's freedom to be his own master.  Unlike modern neo-Marxists, Marx himself was not an egalitarian.  His primary concern was how the unbridled capitalism of his day restricted the individual from achieving his full potential.  Capitalism did this through the alliance of the bourgeoisie and the state.  Compare that with the Tea Party rhetoric opposing crony capitalism and the loss of individual freedom at the hands of the statists, of whom Barack Obama is supposedly the chief.

The free market, Tea Partiers argue, should choose winners and losers, not the government.  Perhaps, but it is now and always has been a myth that there is a truly 'free' market.  A truly free market would be based upon the free exchange of something of value for something of equivalent value.  That would leave neither party worse off nor better off than they were upon entering the market.  When a laborer exchanges his labor for a wage that allows him to survive does he enter that transaction freely and upon equal standing with the one who has a job that needs to be performed?  Only in an economy where there are exactly the number of workers needed to for every available job.  In any other situation, one side or the other is disadvantaged.  Usually, it is the laborer.  Additionally, the laborer is not free to abstain from the marketplace and open his own business because the cost of entry into many areas of commerce are enormous.  Suppose one wants to begin a railroad to deliver goods from a port to warehouses more efficiently than another.  The capital needed to create the infrastructure to compete in that market is prohibitive.  The effect is a monopoly that is usually supported by the state. Sure, the costs of entry may be lower and less prohibitive in some other markets but so too is the risk of market over saturation, which may lead to the collapse of some businesses and the falling into destitution Marx envisioned as stronger competitors eat up weaker ones.

Further, in order for the capitalist to survive, he must realize a profit from the exchange he has made with the one who labors.  If I sell eight hours of my time to an employer for $100 I must produce something valued at much more than $100 if the employer is to remain in business.  In this, Marx recognized how capitalism in his day had abandoned the Lockean principle of private property that meant the laborer had a right to keep what he produced or created.  Marx referred to this as the exploitation of the laboring class.  The greater the difference between the amount the laborer received for his work and what the capitalist could reap from it was the level of exploitation experienced by the worker.  This becomes important when discussing the Tea Party because it ostensibly opposes the oppression it perceives to come from the crony capitalists such as bankers and the political elites, or those who benefit from their affiliation with the state they oppose.  The irony is, of course, that the Tea Party by and large are white, male, and over 45.  They also largely support the Republican Party, which is every bit as state oriented as the Democrats.  Therein lay the roots of the civil war being waged within the modern GOP.

The Tea Party, like Marx, had he been alive today, opposes the modern welfare state, though for very different reasons than Marx would have.  For the Tea Party, the welfare state takes what they have earned from them by force and gives it to those who have not earned it.  Yet, much of the Tea Party opposes any changes to Medicare or Social Security, the two largest entitlement programs.  The Tea Party also largely supports the military industrial complex, the ones who carry the guns for the state they so deplore.  Rather, Tea Partiers oppose 'welfare' programs for the poor, who they see as lazy slackers.

Marx, on the other hand, would likely oppose the welfare state because it interferes with the rise of the proletariat by mitigating the effects of capitalism.  By providing a level of sustenance to the poorest and propping up many low wage earners with programs like SNAP and Medicaid, the impetus to organize and overthrow their oppressors is largely removed.  This why Franklin Roosevelt, in the midst of the creation of the welfare state, could say that he was 'The best friend capitalism ever had.'  Apart from the welfare state, it is likely America might have seen some uprisings such as have occurred in many poorer nations in South and Central America.

In sum, the Tea Party and Karl Marx share much in common.  The Libertarians in the Tea Party hate the state and see it as a coercive force that steals their God given liberty.  Marx saw the state as stealing individual liberty from the proletariat through its alignment with the capitalists.  Marx's hatred of the state drove his vision of a communist utopia that emerged from the wreckage of not only capitalism, but its successor, socialism.  Far from being anti-capitalism, Marx saw it as a necessary stage in the development of communism.  Ironically, the anti-welfare state mentality of the Tea Party, if made reality by gaining power, could very well be the catalyst that awakens the proletariat that has been lulled to sleep by the statists on the left and the right.  The very thing the Tea Party fears most may be what it ultimately creates.


Thursday, October 24, 2013

Could Shutting Down the Government Cost Republicans the House in 2014?

Forrest Gump said, 'Stupid is as stupid does.'  More and more these days I am convinced he was talking about the American media establishment.  Serious investigative reporting has been replaced by nonstop discussion of the latest polling data, which quickly becomes the conventional wisdom among the media elites.  The latest example comes from recent polls that show Republicans are less popular than they have ever been...at least since modern polling began in the 1940's.  The most recent poll puts the party's approval rate at around 28%.  That's not very good but is it the end of the world for the GOP?  Not by a long shot. 

Social scientists have been gathering data on the voting habits of Americans for at least 60 years and we have learned a lot over that time.  One thing we know is that party identification is the strongest predictor of how an individual will vote in any given election.  Republican identifiers vote for Republicans and Democrat identifiers vote for Democrats at very high rates.  Additionally, most independents are not truly independents but are weak party identifiers who usually vote for the same party in most elections.  The idea of an American electorate that swings back and forth is a myth.  American elections are largely driven by structural factors, not careful deliberation by voters analyzing the nuances of public policy. 

The problem with all the discussion of the unpopularity of the GOP possibly costing the party the House next year is that no matter how unpopular Republicans are in national polls it doesn't amount to a hill of beans at the local level.  Midterm elections are driven by dynamics that are not present in presidential elections.  If 2014 were a presidential election year the discussion of Republicans losing the House might be more salient.  But it isn't. 

The party holding the White House enters every midterm election at a disadvantage simply because partisans affiliated with the party out of power are more motivated to vote and check the power of their opponents.  In 2014 this probably means that more Republicans than Democrats will turn out to vote in the midterm elections next year.  Those Republicans will vote for Republican candidates no matter how unpopular the party is nationally. 

Further, the way most congressional districts are structured provides the party currently holding the seat with an inherent advantage.  Democratic supporters are often packed into urban districts that may be 70-80% Democratic, which means that a lot of Democratic votes are 'wasted' electing a Democratic candidate who would win the election anyway.  Republican districts are not as compact and often encompass many rural voters unlikely to switch parties regardless of the current popularity of their party.

To be clear, this does not mean Republicans cannot lose the House next year.  Anything is possible in politics.  Consider, however, that the last two times the party holding the White House gained House seats in a midterm election the gains were 8 seats in 2002 for the GOP and 5 seats for the Democrats in 1998.  Democrats currently need to pick up 17 seats to take control of the House.  The last time a party controlling the White House won enough seats to take control of the House of Representatives in a midterm election?  It has never happened in American history.  Does that mean it won't happen in 2014?  No, but 225 years of history tells me it is highly unlikely.


Tuesday, October 8, 2013

Can the U.S. Actually Default on its Debt?

A new meme is beginning to emerge from some of the more hardcore conservatives in the GOP, particularly those in the Tea Party faction, claiming that it is not technically possible for the U.S. Government to default on its debt.  The thinking, if you want to call it that, is that since revenue to the treasury is forecast to be around $250 billion per month and monthly interest on the national debt is expected to be around $31 billion per month (see the president's 2014 budget here), then the treasury should have no problem paying the interest each month whether a debt ceiling hike is passed or not.  Technically speaking, they are absolutely right.  The problem, of course, is that the FY 2014 budget is estimated to be upside down by about $700 billion, or some $58 billion a month.  The treasury is then faced with a dilemma as to how to prioritize revenue outlays.  An additional problem is that the Treasury doesn't have the ability to prioritize payments the way a household might.  For example, a household could choose to pay the most important bills each month first (mortgage, auto, grocery, utility) and then pay the credit cards with what is left.  If the household comes up short, something doesn't get paid unless the household can take a loan to cover the shortfall...most households do this by making purchases on credit with the intent to repay it next month or over time. 

Treasury, however, does not have this luxury.  According to the wonkblog, the federal government receives some 2 million invoices a day for services purchased or debts owed.  Its computer systems are set up to pay invoices in the order received, whether that is grandma's social security check, a payment to a hospital for medical care provided, or an interest payment on a bond.  These invoices are not individually inspected by a human being but are checked by the computer for accuracy and then payment is sent.  There isn't a government accountant with a checkbook somewhere writing out and signing each of the 2 million or more payments processed every day.  Technically, it might even be possible for Treasury to reserve some cash to always pay the bondholders...but without the ability to borrow it would have to skip paying something else.  This could mean a government contractor owed a million dollar payment does not get paid.  He in turn does not pay his employees who respond by not paying the mortgage or car payment.  The consequences of sucking nearly $60 billion per month out of the economy would likely prove chaotic, even if the bondholders got paid. 

In short, what some members of the GOP are advocating right now is a horrible strategy likely to have ruinous consequences on an economy still struggling to pick up the pieces from the 2007-09 recession.  This could be enough to push it off the cliff and make that episode look like the 'good old days.'  That's why many in the business community, typically the GOP's stronghold, have had enough.  Many have begun siding with the president whose policies they have vigorously opposed in the past.  Some have even begun recruiting more moderate Republican candidates to oppose Tea Party darlings in GOP primaries next year.  Conventionally, many mainstream Republicans have avoided speaking out against Tea Party extremism for fear of being 'primaried' from the right next year.  It now appears that at least some Tea Party Republicans may face a challenge from the center.  That, in this writer's opinion, would be a welcome change and just might pull the GOP back from the cliff it seems intent to leap off. 

Thursday, October 3, 2013

Vacuous Leadership & Modern American Politics

As I write this the Federal Government in Washington, D.C. has begun the third day of what could be a very long shutdown that disrupts government services for hundreds of millions of people.  Millions more may either lose their jobs or suffer a crippling blow to their income.  I'm not just talking about the civilian workforce but those who depend upon tourism to national parks or payments to hospitals, for example.  Already we've heard reports of a significant drop in tourism along the Virginia coast leading to restaurants closing their doors, half empty motels, and layoffs.  The saddest part of this present shutdown is that it is completely unnecessary and pointless.  It is the result of mindless, ideological leadership in Washington, D.C., if we dare even to call it that. 

James Madison, it is said, believed that limited government (a phrase found nowhere in the constitution) required the separation of powers into the judicial, the legislative, and the executive in order to function well.  American children are taught this mantra from the earliest days of their civic education, so much so that it may as well be an edict handed down from God above.  However, as the late Richard Neustadt argued, American government is not so much a case of separated powers as it is 'separated institutions sharing power.'  Because of that power sharing arrangement good leadership depends far more upon the cultivation of individual interpersonal skills than on positions and titles alone.  In his classic book, Presidential Power and the Modern Presidents: The Politics of Leadership from Roosevelt to Reagan, Neustadt makes the claim that true power is not the power to issue an order to do something but the power to persuade others to do something because it is in their own best interests to do it.  In fact, when leaders must resort to an order to get something accomplished Neustadt argues that it indicates a failure of leadership.  Sadly, that is the state of modern American politics. 

Whether it is the Democratic leadership in the Senate, which has failed to persuade the House to pass a clean continuing resolution that would fund the government, or the Republican leadership in the House that has failed to round up what Devin Nunes (R-CA) has referred to as the 'lemmings with suicide vests' in the House Republican conference, or the President of the United States, who has failed to build the kind of rapport with either congressional Democrats or Republicans that might allow him to engage in serious bargaining, it is clear that a leadership vacuum exists in Washington. 

Take, for example, Speaker John Boehner's (R-OH) inability to persuade his caucus that passage of a clean CR, which funds the government at essentially the level that the House agreed to in passing the Paul Ryan budget (see chart below), has precipitated this completely unnecessary government shutdown.  The insistence of a small faction of tea-party Republicans to an incoherent, destined to lose position, reflects not only poorly on the Speaker's leadership but also on the weakness of the modern GOP.  It is, essentially, a party in the midst of a not-so-civil war that threatens to destroy it from within. 


On top of the war amongst Republicans in the House, we now have Senate Republicans claiming that a leadership vacuum exists with the GOP caucus there.  Senator Tom Coburn (R-OK) has claimed that Senate Minority Leader Mitch McConnell (R-KY) has effectively delegated leadership of the party to Ted Cruz (R-TX) and Mike Lee (R-UT), as well as the outside interest groups enabled by Citizens United who are promoting challenges to Republican Senators with well-established conservative voting records by redefining what it means to be a conservative. 

We've also now got evidence that Speaker Boehner has been less than genuine in his effort to eliminate subsidies to congressional staffers to help pay for their health insurance on the new healthcare exchanges...something Boehner apparently lobbied hard to keep in the healthcare bill, even going as far as a secret meeting with Harry Reid (D-NV) and President Obama to make sure the subsidies were preserved. Reid's staff has now leaked an email exchange of the discussions between Reid's spokesman and Boehner's spokesman.  These kind of failures in leadership lead only to further  entrenchment and an unwillingness to bargain, as well as deeper distrust between the so-called 'leaders' of their respective caucuses.

President Obama himself is not beyond reproach in any of these failures either.  His own leadership style has left much to be desired.  In his 4+ years as president, Obama has failed to reach out effectively to those in the opposition.  Granted, Republicans were never going to 'like' him but there are steps one can take to at least earn the respect of those with whom one disagrees.  Neustadt maintained that for a president to truly have power and be able to bargain with others, two things are essential.  The first is public prestige, for without the support of the public any president is doomed to failure.  In spite of frequent public addresses and even being reelected to a 2nd term, Obama has failed to move the needle when it comes to public opinion.  The second thing necessary for presidential power is a good professional reputation.  In other words, the president must work hard to earn the respect of those whom he depends upon to accomplish his agenda.  Like the first, the president has failed to cultivate such a reputation, leaving a vacuum in leadership in the White House as well as in Congress.  In a new book by Chris Matthews called Tip and the Gipper: When Politics Worked, Matthews romanticizes about the good old days of the 1980's when two fierce adversaries, Speaker Thomas P. 'Tip' O'Neill (D-MA) and Republican President Ronald Reagan would go at each other publicly but then share drinks together after hours and celebrate each other's birthday.  Perhaps the stories Matthews tells are caricatures or overstate the relationship between O'Neill and Reagan, but it is telling that after Reagan was shot in March of 1981, the Speaker was one of the first to arrive at Reagan's bedside and held his hand while praying through the 23rd Psalm.  One thing is clear from all this:  Reagan and O'Neill had the ability to develop a working relationship with each other despite their personal differences.  Obama and Boehner have demonstrated a complete and utter inability to do the same.  One can only wonder how Republicans would react today if such a misfortune were to befall President Obama. 

For their part, Republicans set out to discredit Obama's presidency from day one, beginning with the infamous meeting in Washington by Republicans distraught over his election recounted in the book Do Not Ask What Good We Do, in which GOP members establish a strategy to delegitimize Barack Obama in any way possible, including personal character attacks, innuendo, and outright lies.  From Mitch McConnell's infamous 2010 statement that Senate Republicans "... single most important thing we want to achieve is for President Obama to be a one-term president" to Joe Wilson shouting 'You Lie' during a joint address to Congress to the birther nonsense to current claims by right-winger Jerome Corsi that the president is a closet homosexual who frequented gay bars in Chicago in the 1990's, it becomes clear the conservative Republicans not only dislike Obama, in fact, they hate him. Reagan, for his part, was never subject to that kind of bitter hatred by those with whom he disagreed.  
The bottom line is simply that what passes for leadership in Washington these days is, in fact, anything but leadership.  It is vacuous, bitter, and destructive.  Unfortunately, we the people are the ones who put these self centered morons in office so perhaps we are getting the very leadership we deserve, which is to say none at all.
 


Tuesday, October 1, 2013

The Long Slow Death of Shared Governance, or What Would James Madison Say?

At 12:00 midnight on October 1st the United States government came to a screeching halt, or at least it did for 800,000 'non-essential' federal workers, millions of citizens who depend upon them, their families, and many others planning to visit America's museums, national parks, and presidential libraries.  The shutdown is the result of a lame-brained strategy by a few Tea Party extremists who have read a little too much Ayn Rand and spent a little too much time smoking the peace pipe with Charles and David Koch.  Their shared hatred of the president (yes, they hate the president...take a look back at the images from tea bag rallies, the birther nonsense, and the lies they have concocted and perpetuated about the Affordable Care Act) have sent many of them into 'babbling spasms of stupid.'  There is nothing honorable about what this tyrannical minority, as James Madison might have called them.  Nothing worthy of being called U.S. Congressmen and Congresswomen in a single one of these fanatics.  If the American people had any common sense every single one of them would be voted out of office next year.  But they will not be, largely because they reside in congressional districts that have been constructed to ensure they are reelected again and again regardless of how destructive their actions are to American democracy.  Our shared belief in how self-government works has dissipated and our union is weaker for it.

How did we get here?  In some ways it is the culmination of a more than 30 year war on government that began when Ronald Reagan was elected president in 1980.  In Reagan's first inaugural address he rallied conservatives by declaring that government was not the solution, government was the problem:


The part most commentators miss about his comment is that he was specifically addressing the crisis that existed in 1981...a stagnant economy, high inflation, and widespread unemployment.  Reagan was not anti-government like much of the libertarian infused tea partiers are today.  In fact, Reagan used the tools of government, such as the Federal Reserve, to strengthen the economy, preserve Social Security, Medicare, and deal with the crises that existed in 1981. 

The challenges that exist in 2013 are vastly different than they were in 1981.  A 30 year tax cutting binge in Washington has left the government starved of revenue.  Add to that the stagnant wages of the middle class and you have a recipe for disaster.  Contrary to conservative mythology cutting taxes does not necessarily increase revenue.  If it did the government should just lower all tax rates to zero and then there would be plenty of money, right?  Uh, not exactly. 

Yes, the American economy is stagnant today and has been since the Great Recession began in late 2007.  Things are better than they were in late 2008 and early 2009 when the economy was shedding 400,000 jobs a month.  Yet, the economy is not as good as it should be.  The GOP wants to put the blame for that solely on the shoulders of the president, something they did not do when the economy plunged into recession 6 months into Reagan's first term and unemployment went from 7.4% to 10.8% after Reagan's 1981 tax cuts were passed.  More specifically, the GOP blames the future implementation of the Affordable Care Act for our present woes, even though CEO's say it is the brinkmanship in Washington that creates uncertainty and a reluctance to hire workers and expand their businesses. 

James Madison worried about factions a lot, so much so that he argued the only way to prevent a tyranny of the majority was to break the factions into so many little pieces and so dilute power as to forestall the emergence of any faction that might try to run roughshod over the nation.  The clarity of 236 years of hindsight shows us that his plan has failed.  The emergence of the modern two party system has rent Madisonian Democracy asunder.  The ideal we once shared that elections are about ideas and the way to implement those ideas is to win elections has become but a fond memory.  The GOP has opposed 'Obamacare' from the start, even though its own 'think tank', the Heritage Foundation, proposed a very similar plan in the 1990's, and the party's presidential nominee in 2012 implemented a similar plan as governor of Massachusetts.  First, Republicans lost the 2008 election to Barack Obama.  Then they began making stuff up about 'death panels', 'government takeovers of health care', and the like.  The disinformation campaign has been very effective as nearly 70% of Americans haven't got a clue what the ACA means to them.  Having failed to stop the ACA in 2010, opponents sued in federal court, which culminated in a decision by Chief Justice John Roberts Jr. that the ACA and its individual mandate were a legitimate exercise of congressional authority.  Not satisfied with that, the GOP set out to 'repeal' Obamacare and the House has passed some 40+ bills doing that though not a single one to replace it with something else.  The party's presidential nominee in 2012 promised to sign a repeal of the ACA on day one if he won the presidency.  He lost by nearly five million votes.  So now the nonsense caucus in the GOP, a small but very vocal minority to be sure, has taken the rest of the party, and the nation, hostage to its demand that the ACA be undone.  They have effectively put a gun to the head of Speaker Boehner and told him to bring measures to the floor containing attacks on the ACA or they'll revolt and fire him.  So he has complied.  Failing to get anywhere with the Senate and the president through their childish antics they've now shut down the government. 

In a strange and eerie sort of way President Reagan was right when he said government was the problem in the current crisis.  Not all the government, just the 5th column tea baggers who managed to get themselves elected into government for the sole purpose of destroying what James Madison built more than two centuries ago.  Patriots they are not.  Treacherous traitors?  Indeed.


Sunday, September 29, 2013

Shutdown Showdown, also known as Politics as Usual

As I write this America is 31 hours away from the first government shutdown since 1995-96.  On Friday the Senate voted to amend the continuing resolution by removing the House riders that would prevent any funding to implement the provisions of the Affordable Care Act (ACA), which is set to begin individual enrollment on Tuesday October 1st.  Whether that's a good thing or a bad thing I'll leave it to the reader to decide.  My concern is how we got to this point and what do we do about it now?

First, how we got here seems to be a matter of partisan preference.  Either the Republicans are acting like intransigent elephants by insisting on a bill that undoes a duly passed law or the Democrats are acting like stubborn jackasses by refusing to negotiate with House Republicans on the contents of the resolution to continue funding the government until a budget deal can be reached.  Again, where you stand probably depends upon which side of the aisle you sit. 

One thing, however, is particularly clear.  Most of what is passing for political discussion in Washington is simply a very loud public relations campaign.  Republican Ted Cruz (R-TX) took to the airwaves insisting that everything happening or about to happen lies solely at the feet of Senate Majority Leader Harry Reid for taking an 'absolutist' position that will force a government shutdown.  In his view, Reid should acquiesce to the GOP demand for defunding or delaying the ACA.  Reid, for his part, says the Senate will not consider any further resolutions pushed through the House on party line votes by the GOP.  Neither party is talking to the other in a serious effort to negotiate, though it is difficult to negotiate with those who refuse to do so, which aptly describes the leadership in both parties. 

A broader question remains to be addressed: how did we get to the point where one party believes it can make demands that must be met in order for orderly continuation of government?  The answer to that, I believe lies squarely in the Oval Office.  Governing from party created crisis to party created crisis began shortly after Republicans took control of the House in early 2011.  First, they wasted their breath passing repeal after repeal of the ACA that would never be considered by the Democratically controlled Senate.  The same with Paul Ryan's 'roadmap' budgets that contained dramatic cuts in discretionary spending, including the same $750 billion (over ten years) cut to Medicare that President Obama utilized to fund the ACA.  This was followed by the near breach of the debt ceiling in August of 2011 that resulted in a lowering of the nation's credit rating.  Days before the U.S. would default on its debts, the president made some concessions to the GOP in exchange for an increase in the debt ceiling and a budget agreement through FY 2012.  A few months later came negotiations over the expiration of the 2001 and 2003 tax cuts, followed by the collapse of the so-called 'Supercommittee' to reach a budget deal (resulting in the across the board cuts that took effect in March).  In late August and early September Obama announced his intention to launch punitive strikes against Syria for using chemical weapons in the sectarian civil war going on there but then backpedaled when Congress refused to back him (though claiming authority to act anyway).  In short, the president has encouraged the kind of nonsense politics playing out in Washington by repeatedly drawing a line in the sand and then scribbling it out to draw a new one.  Yesterday, the president vowed to veto any spending resolution that goes after the ACA in any way.  The question is, will he stand his ground this time or back down in the face of more GOP threats? 

How long will the brinksmanship continue?  Only until someone realizes there are winnable battles and unwinnable battles.  Only a fool wages a battle he cannot win.  But given recent history the GOP may think history will repeat itself yet again, making this battle seem all the more winnable. 



Friday, September 27, 2013

Should Congress Listen to the American People?: The Myth of American Democracy

America is not a democracy.  Nor was it ever intended to be.  Let's get that notion out of our heads right now.  The founding fathers viewed democracy with great trepidation and fear, perhaps more so than they did 'big' government.  True, the American Revolution was fought to throw off the shackles of a distant government that ostensibly oppressed its citizens by taxing them to support the military campaigns waged on their behalf but without providing them with a voice about the level of that taxation.  But no one should be deceived by the notion that the revolution was about implementing the will of the people.  No, the revolution was begun and sustained by a small group of wealthy colonists who were fed up with British rule.  Once the colonies secured their independence the hard work of designing a new government began.  The first effort ended in miserable failure when Daniel Shays led a populist uprising that the new government was unable to put down, leading to the call for a constitutional convention to address the deficiencies in the Articles of Confederation and Perpetual Union.  The result is what we call the United States Constitution, which does anything but establish a democratic system of government.  Let us take a brief look at two of the branches of government created by the Constitution in light of this argument.

The Presidency

For convenience sake I will begin with the presidency, though the authors of the constitution dealt with this institution in article II rather than article I of the document.  The framers clearly feared the rise of a demagogue as leader of the new nation so they instituted safeguards to limit popular influence upon presidential action.  In fact, the president was not to be the representative of all the people but the representative of all the states.  He would be selected by a majority of votes cast by electors, not citizens, in the states.  The selection of electors is left to the state governments.  Further, the president was to act as a check on unwise legislation originating from the Congress.  His job was to act in the best interests of the union, which is not necessarily the same thing as the best interests of individual citizens or even groups of them.  Modern presidents have developed constituencies comprised of the population and perpetuated the myth that they 'represent all the people.'  They do not and never were intended to do so.  The modern presidency is a bastardized version of what was created in Philadelphia in 1787. 

The Congress

First, let us consider the House of Representatives, which is probably the closest the U.S. Constitution gets to embracing democracy.  Yet, even here the only requirement is that every state shall receive a number of representatives proportional to its share of the national population but no fewer than one.  Exactly how the representatives were distributed within each state was a matter left for the states to decide.  As such it was not uncommon to have legislative districts that varied widely in terms of population and geographic coverage until the Supreme Court ruled in the 1960's that legislative districts must be as equal as possible, a concept found nowhere in the constitution.  This allowed states to structure their legislative districts to in such ways as to preclude majority rule and promote the agenda of the ruling coalition.  Most states continue to do this today by gerrymandering their districts so that a party that wins a minority of the popular vote can nevertheless control the House of Representatives.  For example, in the 2012 U.S. Congressional Elections, Republicans received 46.9% of the popular vote while Democrats received 48.3% of the popular vote.  Yet, Republicans hold 53.8% of the seats in the House while Democrats hold 46.2% of the seats.  If the House were truly a democracy, Democrats would control the chamber today. 

Turning to the U.S. Senate we can see the framers fear of democracy even clearer.  The constitution established a Senate whose members would be appointed by the state legislatures to represent the state for a six year term.  In the ultimate wisdom of some the constitution was amended in 1916 to establish the direct election of Senators, contributing to the system we have now where Senators are not dependent upon the state legislatures but upon the wealthy organizations and individuals who have the means to fund their very expensive campaigns.  Further, the Senate is granted the power to approve treaties, confirm presidential appointees, and hold trials for impeachment.  The framers did not place these powers in the hands of the 'people's chamber' but in the hands of the chamber that would resist the populist passions of the people.  Today, however, like the presidency, the U.S. Senate is merely a shadow of the Senate envisioned by the framers. 

Conclusion

Why does any of this matter?  Given citizens penchant to believe what they want to believe regardless of the facts, probably not much.  Yet, on the floor of the House and the Senate this week we have heard members of the Republican Party allege that the Congress is not listening to the will of the American people.  That's exactly right and that's exactly what the framers intended.  Yet, the politicians making these statements were lamenting the fact that Congress was not listening to the vast majority of Americans who are ignorant of public policy and its implications.  Consider this...would these politicians make the same argument if a majority of Americans thought it would be a good idea to bomb Canada?  Would Congress be right or wrong to ignore the will of the 'unwashed masses' in this case?  This is a key reason why the framers created a set of undemocratic institutions that would utilize their own wisdom to make decisions in the best interest of their states/districts and a president to do so on behalf of the nation as a whole.  Even if one were to concede that elected officials ought to be responsive to the wishes of their constituency, which I do not, none of these elected officials has a national constituency, popular perception notwithstanding. So Republicans are right about Congress not listening to the American people as a whole...but they're wrong when arguing that it should, especially when they themselves are not listening to the American people.




Monday, September 23, 2013

The Irrationality of Rationality

As I write this the government is 7 days away from a shutdown that neither party will admit to wanting.  Yet, the irrationality of rational action may well produce this undesirable outcome.  At the heart of it lies the fact that some in the GOP, mostly freshman and sophomore Tea Party Republicans, hate the president and his healthcare law so much that they are willing to shut down the government and forfeit their own paychecks, prevent Social Security payments from being made, and cause IOU's to be delivered to hundreds of thousands of government workers.  Add to that the economic chaos as people dependent upon these checks stop going out to eat or to ballgames or shopping and it is a recipe for disaster.  All because of some misguided belief that the Affordable Healthcare Act is some kind of socialist medical bogeyman that must be killed no matter the cost to representative democracy. 

Yet, even though the Tea Party cannot win this fight it is one they want to and, indeed, must wage.  First, they cannot win because the parliamentary rules of the Senate preclude it.  Sometime in the next few days Majority Leader Harry Reid will make a motion to proceed on the continuing resolution (CR) stripping funding from Obamacare that passed the House on Friday.  This motion can be filibustered, which will put Republicans in the awkward position of opposing a resolution their colleagues in the House were urged to pass.  So either they don't filibuster the resolution or Reid moves for cloture on the resolution, which will take 60 votes (55 Democrats plus 5 from the GOP).  He will likely get many more than 60.  Once cloture has been invoked Reid can offer an amendment to the resolution that strips the defund language out, which can pass with only 51 votes.  Republicans can then filibuster the new resolution or allow it to pass, in which case it goes back to the House.  Speaker John Boehner will then have the clean continuing resolution he originally wanted to pass that maintains the sequester level of spending through mid-December.  However, this clean CR will still need to garner majority support in the House to pass and be sent to the president.  Here's where things get sticky for Speaker Boehner.

As of the start of the 113th Congress in January of this year the Tea Party Caucus had 49 members, all Republicans.  The GOP currently holds 233 seats in the House and needs 218 votes to pass the clean CR.  If the Tea Party Caucus remains firm in its resolve to defund Obamacare and vote against any CR that does not do so it leaves the Speaker in a bind.  Assuming Boehner, like all other members of Congress, is a self-interested, rational actor whose primary goal is winning re-election and maintaining his position (as Mayhew claims), he will not bring the clean CR to the floor for a vote.  Why not?  Because doing so will mean he must rely on Democratic support to pass the CR, thus violating the unwritten 'Hastert Rule', which states that a measure may only be brought to the floor when it can pass with 218 votes from the majority party (the minority is free to join in but cannot provide the votes that put the bill over the top).  Boehner has violated this rule on at least three occasions this year already but if he does it again he may well see a movement to replace him as speaker.  So the rational thing to do is stand his ground even if it results in the irrational action of a government shutdown.

Likewise for Tea Party members it is entirely rational for their self-preservation to oppose any CR that does not defund Obamacare.  Nationally, polls show that a majority of Americans, and even a majority of Republicans, oppose a government shutdown, the Tea Party Caucus members do not have a national constituency.  Only the president has that.  Tea Party members have a dual constituency of a different nature.  First, they must answer to the voters in their congressional districts that elected them to represent their interests in Washington, D.C.  In many of these districts the voters are as conservative, if not more so, than the members themselves.  The boundary lines in many of these districts have been drawn to elect Republicans to the House and have been made as safe as possible for the incumbent.  Further, most of these members represent districts that are between 10 and 15 percentage points more conservative than the nation as a whole, according to the non-partisan Cook Political Report's Partisan Voting Index of the 113th Congress.  A vote that defies the wishes of their constituents may well lead to a primary challenge from the right.  Thus, a self-interested Tea Party member must oppose the clean CR if he/she hopes to be reelected.

The second constituency for Tea Party Caucus members to answer to are the funders who paid for their campaigns.  Contrary to popular perception most Tea Party members did not arrive in Washington based on a groundswell of grass roots activism.  True, they may have won the district primary based on grass roots support but that alone does not win congressional elections.  It takes money, and lots of it to win a seat in the House.  Much of the fundraising comes from special interest groups like the Club for Growth or the U.S. Chamber of Commerce.  These organizations have vowed to make sure that the voting constituents know if a Tea Party member backs down on the defunding movement.  Thus, it becomes rational for Tea Party members to take a stance that may well result in the irrational act of shutting down the government and causing great harm to the national economy, the GOP, and many Americans.