Tuesday, December 30, 2008

Back to Obstructionism

Doing what Republicans do best, Mitch McConnell has announced the he and his Republican colleagues will seek to slow down the new administration's planned stimulus package. So after adding $ 4 TRILLION to the national debt over the course of the Bush administration, which led not to growth but to the greatest loss of American wealth since the Hoover administration, the Republicans have suddenly decided to become vigilant about excessive government spending.

Notice that this vigilance only appears when the government proposes to spend money to rebuild infrastructure and put people back to work. The concern over increasing the national debt did not manifest itself when the Bush administration cut taxes primarily for the wealthy. Nor did I hear about Republican protests when the government was paying billions to expensive military contractors in Iraq. And it was the Republicans who led the charge to increase drastically the costs of the Medicare drug benefit program, by insisting that this legislation preserve the profits of the pharmaceutical companies. This fall there were Republicans mainly in the House who protested the bank bailout and the auto company bailout. At least they get some points for consistency. But do the Republicans really want to start sounding like Scrooge when the government proposes to extend its largesse to actual working people who have been hurting the most from this recession?

Eyeless in Gaza

If any other country were being attacked daily with missiles, by a neighbor which denies its right to exist, we would not question that country's right to respond militarily. Israel is for some reason treated differently. I am passing on, at the urging of my rabbi, a statement from Rabbi Eric Yoffie, President of the Union for Reform Judaism. Maybe this will help people think about whether world opinion is sometimes too quick to condemn Israel.

"For the past three weeks, Israel has lived under an increasing barrage of rocket fire from the Hamas-controlled Gaza Strip. More than 80 missiles landed on a single day. Israel's first responsibility, like that of any nation, is to protect her citizens. The military action, which Israel launched this morning, was clearly intended to do just that. Today's action is as tragic as it is necessary and predictable. While we mourn the loss of life, we know that no democratic nation in the world would permit a hostile force on its border to target its civilian centers with constant missile attacks. Israel has demonstrated extraordinary restraint as nearly 8000 rockets have been launched at Israel's cities in the last 8 years. When Israel withdrew every civilian and soldier from Gaza in 2005, the attacks did not stop for a single day.

"We believe that military action must always be the last resort. But more and more Israeli cities are now in range of Hamas' rocket-firing army of terror, and we know that the traumatized children of Sderot and neighboring towns can no longer be expected to live in constant fear. Hamas chose to end the existing cease-fire. Hamas has cynically chosen to use Palestinian civilians as cover for its military operations. Hamas openly declares its commitment to destroy Israel. Hamas, therefore, bears responsibility for today's bloodshed. Hamas, and only Hamas, can make the decision to move beyond this bloody conflict by stopping, once and for all, all attacks on Israel from the territory it controls.

"We welcome the words of Israel's Defense Minister that every effort will be made to limit casualties among the civilian population of Gaza. We welcome as well the words of the Israeli Foreign Minister Tzipi Livni, who emphasized in her statement this morning that 'while confronting Hamas, Israel continues to believe in the two-state solution and remains committed to negotiations with the legitimate Palestinian Authority in the context of the peace process, launched at Annapolis.'

"We note, with sadness, the predictable chorus of those in the international community who call for Israeli 'restraint.' Yet these critics offer no solution to the suffering of Israel's citizens, and in the face of rockets terrorizing their own children, would not be talking of restraint and proportionality. They would be demanding that their governments put an end to the attacks.

"We thank the Government of the United States, which has been a voice of reason. We hope that the Palestinian leadership will demand an end to missile fire and a return to the path of peace and the negotiations begun in Annapolis. And we pray that the Palestinian people will strengthen the hand of all who are prepared to make peace a reality."

Wednesday, December 24, 2008

The California Budget Mess

Because of the two-thirds requirement for raising taxes in the California legislature, we have created a system that is designed for gridlock. The only way California's government can function properly is if we have a governor from the minority party (nowadays the Republicans) who has enough clout to persuade a few Republicans to go along with tax increases. We did not have this with Gray Davis, or course, so we recalled him. We do not have a functioning government with Schwarzenegger at the head either, unfortunately, because Schwarzenegger cannot get enough members of his own party to do what is needed to resolve the budget stalemate.

What is the justification for this two-thirds requirement? Why should the legislators who are opposed to tax increases have their votes counted twice as heavily as those who are in favor of tax increases? It seems to me that if anything, it should be the other way around. Those who are selfless and politically courageous enough to impose additional taxes on their constituents ought to have their votes weigh at least as heavily as those who refuse to raise the revenues needed to support the government services that the people want.

And to the Republican legislators who say that the answer to the current crisis is to cut spending instead of raising taxes, I say go ahead! You only need a majority of the legislature to cut spending. So if you can't get a majority, what that means is that the people do not support the spending cuts you want. Once the people's representatives have agreed on the amount that government will spend, it should be their obligation to raise the revenues to support that spending. It is unfortunate that the two thirds requirement for raising taxes gives the minority a tool to attempt to impose their will on the majority. The refusal to raise needed tax revenue should be seen as a refusal to exercise the legislature's most important responsibility.

Monday, December 15, 2008

Fun with yarn

The first meeting of a new group called community organize.com Trying to figure out a way to harness the energy of all of us Obama volunteers suffering from campaign withdrawal. We are in somewhat uncharted waters here.

Friday, December 12, 2008

Playing Chicken

Because the Senate cannot reach a compromise, Congress adjourns and the auto industry is facing bankruptcy. The Republicans would not approve a loan to GM and Chrysler unless the UAW agreed to reduce their wages and benefits to the same level as the Japanese automakers who have been unfairly competing with Detroit for years by locating their plants in low wage, right-to-work states. The Democrats do not feel the need to compromise because they feel that the White House will use TARP funds to bail out the auto industry, or they will wait until January when they have more votes. As Robert Reich points out, a lot of what is going on is old fashioned regional interest politics, with Southern Senators, whose states have laid out plenty of taxpayer money to subsidize Toyota and Nissan and other foreign automakers, now reluctant to support subsidizing their American competitors.

Isn't this the kind of politics that has to stop? Isn't this why we elected Barack Obama? Not so much to get more Democrats in Congress, although having more Democrats in Congress will allow more Democratically-favored legislation to pass, but to reduce the kind of partisanship by members of both parties in Congress that prevents needed legislation from getting passed. Only a few members of Congress seriously believe that bankruptcy for General Motors is a better alternative than loaning General Motors a few billion dollars, when all alternative sources of credit appear to be unavailable. The rest are just taking a political position, and playing chicken with bankruptcy, hoping that the President or the next Congress will bail them out.

Tuesday, December 9, 2008

Chicago politics

From the looks of the complaint against Governor Blagojevich filed by the U.S. Attorney in Chicago, it seems Chicago politics is as dirty as ever. What is amazing is how Barack Obama has kept his hands so clean and still risen to the top in this corrupt world. Read down to around paragraph 101 where it says that Obama's people were willing to give nothing but appreciation to Governor Blagojevich in exchange for the appointment of Obama's preferred candidate. One question is whether other potential candidates might have been willing to express their appreciation in more tangible ways, as the governor was allegedly demanding.

Barack Obama's current favorability rating, according to CNN, is somewhere around 79%.

Monday, December 8, 2008

We have met the enemy . . . .

Many people are looking for scapegoats for our current economic downturn. Traditionally the right likes to blame the government for all problems, but they are having difficulty making a plausible case that the government caused this year's economic collapse. The right would also like to blame the unions, but the unions are too weak to be viewed as much of a threat to the economy any more. Of course they can always blame the Democrats, but not too many people are buying that either. Traditionally the left likes to blame big business for any economic suffering, and this theory is gaining some traction in a year of leftish ascendancy. But this theory is incomplete, as it leaves out another culprit for the current mess, namely ourselves.

Even though the heads of the Big Three automakers have accepted some responsibility for their mistakes, they did not cause all of their own problems. Nobody was forcing people to buy all of the SUVs and big cars that Detroit has been profitably making for years. The fact is that for awhile the American people could not seem to get enough of them. When gas prices were so high this summer, I might have felt a bit sorry for all the solo drivers in Lincoln Navigators and Cadillac Escalades that I still saw zooming around, but I feel fairly certain that those drivers had other vehicle choices. The Big Three can plausibly argue that they were only responding to market demand, and while they admittedly were too slow to respond to a sudden change in demand, they can also plausibly contend that they were caught by surprise by the sudden shift in the American peoples' tastes, caused in large part by an equally sudden spike in the price of crude oil. It is worth noting that GM makes a profit almost everywhere in the world except for the United States, which shows that the company usually does a pretty good job of building the cars that the market is demanding. It is also worth noting that the Big Three operate at a significant disadvantage to foreign competitors who have built plants in the US more recently. They are saddled with pension and health care costs that greatly exceed the costs of the newcomers, all of whom like to build their plants in right to work states full of young workers.

We also bear some responsibility for the housing market bubble, and the stock market bubble, and every other bubble we have experienced over the last few years. Collective greed and loss of rationality cause all of these bubbles, as has been well documented since at least the history of tulips. Why did people buy houses they could not afford at the peak of the market? Because they thought the market would continue to go up of course. But before we blame those people, we should remember that the rest of us had a good opportunity to sell our houses at the peak of the market, but did not do so because we did not believe a crash was coming. And if more of us had sold, and fewer of us had bought at those prices, the crash would not have been as severe. So we all contributed to the current downturn, and probably the only way we will reverse it is if we all start contributing to another upturn. Now might be a good time to buy a house, or an American car, or some stock.

And for those who don't remember the famous quote from the comic strip Pogo, the remainder of the title of this post should read " . . . and he is us."

Wednesday, December 3, 2008

Is it better not to have a filibuster-proof majority?

If Martin had won yesterday, giving the Democrats the potential for a 60 vote majority in the Senate (assuming Franken also wins), then the Republicans would be able to claim they got railroaded every time a piece of legislation passed by a party-line vote. And if the Democrats could not get cloture on a particular bill even with a 60 vote majority (for example if one Democrat defected and voted against cloture), then the Republicans would be able to claim that the Democrats can't even muster the discipline to pass their agenda even with a supposedly filibuster-proof majority, and the Democrats would look weak. Either way the Republicans could try to use the situation to their advantage.

With less than 60 votes, the Democrats now need to get a couple of Republicans to vote to cut off debate and allow a vote on their legislation. If they have to work to get a couple of Republican votes, so much the better. That will make their achievements look more bi-partisan. And if the Republicans stick together and block too many pieces of legislation, then the Republicans will look like obstructionists, and their popularity will sink even further.

We do not have a parliamentary system, and the Senate was not designed to work like the House of Commons, where all the opposition can do is shout at the Prime Minister. We have a system that is supposed to give the minority some real power. So if the people of Georgia voted with their eyes open to maintain the power of the minority to filibuster legislation, well then maybe all we should say is hooray for democracy!

It is also worth remembering that there is no magic number that will always allow the majority to get what they want. Some Democrats will vote with the Republicans on some issues. Some Republicans will vote with the Democrats on other issues. So the shape and size of the majority will always vary depending on the bill that is up for consideration, and the power of the minority to filibuster will also increase or diminish accordingly.

Once again, of course, our president-elect has shown how smart he is by refusing to go to Georgia and campaign for Martin. He must have made a political calculation that Martin would probably lose, and his expenditure of political capital to support a losing candidate would only make him look vulnerable. But maybe Obama would also just as soon be forced to have to get some Republican support for his agenda. He can't very well say he is governing in a post-partisan way if he only needs the support of Democrats in Congress.

Monday, December 1, 2008

Where is all the money coming from?

You have to marvel at this country's capacity to come up with all of the money that new bail-out and stimulus programs are going to cost. Why have we been paralyzed by our supposed inability to pay for other government programs, whether it is the reconstruction of Iraq or Afghanistan, or money for housing, education or transportation projects? Why was it so easy to find $100 billion for AIG, but impossible to maintain this country's roads or bridges? It makes me think our inability to invest in needed projects has resulted more from a failure of political will than from a genuine inability to find the funding. All the time that our political leaders have been telling us that we cannot afford this or that, in fact we could have installed solar panels on every home in America, or built a high speed rail network, or modernized all of our prisons and schools, or funded universal health care for all. Apparently this country's credit is still good enough to run our deficit up another couple of trillion dollars. Right now we are using this credit to save the banks and restore business confidence, and I think we do need to do that. I am a little worried, however, that the current administration is more concerned about reducing the losses of the investing classes, than they are about improving the lives of the working classes. This is one reason the new administration cannot take office too soon.

One hopes that all these new-found sources of financial capacity have not run dry by the time the Obama administration wants to put them to use for the purpose of rebuilding infrastructure. Large scale, well-thought-out public works projects have both an immediate benefit in putting people to work, as well as a long term benefit in creating productive capacity and efficiency. This kind of stimulus package would therefore seem to make a lot more sense than the mindless tax rebates enacted last year. I have confidence that the Obama team's stimulus plan will also be more carefully targeted than the investments in financial institutions that the government is currently making, which are being made with too few strings attached and too much faith in the institutions whose poor judgment got us into this mess in the first place.