Friday, February 26, 2010

HCR Summit

OK, apparently none of you know What To Think(tm) about the health care summit, so I will tell you.

You're welcome.

1. The biggest breakthrough was to bring Republican opposition down to earth. Any notion that the Democratic approach is illegitimate, un-Patriotic, etc., was absent, and the lingering effects of this event will make it just a bit harder fro the GOP to continue down that path. The President ("I like calling you that") made them sit up and behave, and made them spit out their stupid ideas in a way that they couldn't be ignored.

2. This was the next step in creating the fissure that will ultimately sever the crazy out of the GOP. For some of those GOPers, like Coburn, for example, there was simply too much temptation to participate in the substance, which means one cannot pretend that the entire undertaking is bogus. See #1.

3. The President modelled how to both confront these guys and stay civil. Several Dems were already pretty solid on this (Clyburn comes first to mind), but many of them got a chance to show that they too could act like grown-ups.

4. It would be pretty hard for any fair-minded viewer of the event to conclude that the GOP was serious in its thinking, or that the Dems hadn't thought pretty hard about their proposal.

5. This event, together with the one in Baltimore, will be remembered for being a sort of watershed for both the Dems and the GOP.

6. Importantly, the GOP was without one its main tactics: shouting down those who would show you to be a liar. The President felt comfortable speaking over fairly vociferous GOPers when he felt that had gone too far. I think this will give a lot of other Dems the courage to do the same, with the effect that their voices won't be drowned out so easily or so often.

7. The event ensures the passage of HCR, and for that matter much else.

8. By staking everything on their nutty worldview, the GOP bet the farm and lost. If they cannot persuade enough voters that government action inherently wrong, they've got nothin.

9. Anyone watching the event would have to conclude that a fair portion of the GOP's senior-most leaders are venal and not bright.

10. Speaking of not bright, how 'bout that Chris Matthews? Even next to dim-witted Chuck Todd he STILL seems dumb.

That is all.

This is the Problem.

This is why we're not just going to head out of the woods and be OK. So many years of job losses, in a society already weak in the nest-egg department, is going to have consequences.

Freddie Mac reported that the rate of serious delinquencies - at least 90 days behind - for conventional loans in its single-family guarantee business increased to 4.03% in January 2010, up from 3.87% in December - and up from 1.98% in January 2009.

There's another major wave of economic decline heading our way, although none of our leaders appear ready to acknowledge what is fairly obvious.

Monday, February 22, 2010

The Tide is Turning

The under-appreciated Steve Benen notes that the fissures separating the crazy-right from mainstream politics are leading to isolation:

The remarks were a further reminder of the isolated nature of the Cheney wing -- the dominant wing -- of the Republican Party. The Obama administration's positions are enjoying the support of Powell, Gen. Petraeus, Adm. Mullen, the Pentagon, and national security experts from across the spectrum.

A lot of people on the left are despairing that Dems seem so weak, the right seems to own the media narrative, and we are all hopelessly doomed. And if this particular movie were to roll credits right now, it would surely be so. But this ain't the last reel in the film...

David Axelrod noted to a reporter after a big victory that "you guys" -- meaning his former profession of political reporter -- are always looking backward. You're sitting in the back of the pick-up looking at where we've been. Those who are actually driving the truck -- the candidate and his team -- are looking forward, always forward.

From where I sit, the trivialization of the crazy-right, long thought to be absolutely inevitable, is well and truly underway (apologies to John Cleese). An important step in the process is to have a series of issues that they embrace, but are not embraced by those in the mainstream.

Here comes Colin Powell. (In my mind, he is a sad and mostly pathetic creature, but is a card-carrying member of the mainstream elite.) He says that the claim that the Obama administration is making us less safe is not his view. He comes as close as any card-carrier ever will to saying the claim is nuts.

The idea that we need to start over on health care, or that it is a government take-over, is likewise finding less and less traction in the mainstream. Some sort of health care financing reform seems both desirable and inevitable. So, HCR is another brick in the wall.

The idea that the stimulus was a pork-barrel wasteland that did nothing for the economy is likewise now firmly rejected. I/m sure you can come up with more examples.

The point of all of this is that the steps necessary to dismiss these nuts for a good long time are now being taken. Looking forward, Axelrod-like, it seems clear that the President will pass some sort of HCR, and that some group of non-crazies Republicans will join him. If not, that will lead to the demise of these GOPers. HCR is the thin edge of the knife: those that want to be part of relevant politics in the next half decade or more will have to find a way to appear to be on the side of HCR, while those who go down fighting it will, well, just go down -- to oblivion.

Dems seem unable to imagine a future in which they win. I think the President sees it, and that's why he's not projecting defeatism.

It seems to me the future will be the result of a new wave of pols on the left and right. On the right, lack of sociopathy will become the norm, once again, and restraint, caution, reluctance to accept change, etc., will return as the positive forces society needs. On the left, defeatism and fear will be shown the door, and the new pols will embrace the electorate's growing appetite for change.

Right now, Obama is the leader of BOTH groups. At one point, he may end up on one side or the other. (I'd guess he'd be a more center-right than center-left.) The President is trying to preserve a space for non-insane GOPers, and is also trying to buck up those of his party-members who would really rather just quit.

Is is written in stone that Obama can't yet succeed? Aren't there enough sentient voters left that will reject the crazy and embrace meaningful change? My guess is that the electorate is ahead of the old-school pols and that a majority is way past ready for change - real change, and that they will end up getting it, at long last.

That concludes today's screed.

Monday, February 15, 2010

Here's Someone Who "Gets It"

Here's an excerpt of a long-ish piece by one L. Randall Wray that finally gets to the heart of my idea about jobs - that the private sector's failure to meet society's needs for employment is not fix-able via half-measures like modest tax incentives:

But what I am advocating is something both broader and permanent: a universal jobs program available through the thick and thin of the business cycle. The federal government would ensure a job offer to anyone ready and willing to work, at the established program compensation level, including wages and benefits package. To make matters simple, the program wage could be set at the current minimum wage level, and then adjusted periodically as the minimum wage is raised. The usual benefits would be provided, including vacation and sick leave, and contributions to Social Security.

Note that the program compensation package would set the minimum standard that other (private and public) employers would have to meet. In this way, public policy would effectively establish the basic wage and benefits permitted in our nation--with benefits enhanced as our capacity to provide them increases. I do not imagine that determining the level of compensation will be easy; however, a public debate that brings into the open matters concerning the minimum living standard our nation should provide to its workers is not only necessary but also would be healthy.

Once our friends on the right (and frankly many on the left!) get over their revulsion at the idea that the government can act directly in the market as a market participant, this is the only way to go. The only question is how much damage will we cause ourselves before we finally take the only step that will work?

Friday, February 12, 2010


There's hardly a TV talking head or Congress-critter or administration representative who can talk about anything other than JOBS. J-O-B-S! It's as though the crying need for jobs just arose (it has been around for 20 or more years). It's also talked about as though it were a virus that needed a cure -- 'if only the Congress would FOCUS on job creation," or "This year, the Administration's #1 priority is JOBS." Yet another triumph of American obfuscation. The problem is simply a lack of will, a lack of focus, a lack of the 'right idea.' Solutions, people. Solutions.

But of course the truth is far from this preposterous framing. The idea that businesses are not hiring because they lack a tax break is ludicrous. The idea that small businesses aren't thriving due to lack of credit is not borne out by any actual data. However, there's a mountain of data suggesting that the great wealth accumulations in our society are not producing any socially useful result.

The nation's rich and powerful have succeeded so well in convincing their fellow countrymen that their success is warranted that it is now a bed-rock principal of American social thought. Poor people deserve their fate, as do the young, the sick, and most especially the incarcerated. And young Mr. Trump deserves those millions because he has so very cleverly wrung them out of the American economy.

My experience in American business since 1980 or so has shown me that leaders who create shareholder value by simply taking it from those least able to protest -- employees, suppliers, customers. I have not seen American leaders in any great numbers succeed by innovation, commitment to excellence, developing new ideas, new markets. In short, American business leaders succeed by cutting jobs, not by creating them. Of course there are notable exceptions, but the overall drift is clear.

Consider the political orthodoxy that taxing things makes people do them less. This has been twisted by our elite to mean that all taxes mean less economic growth. Even Democrats lack the courage to denounce this nonsense for what it is. But where does the government get most of its money? From the press, one might think it's from beleaguered "small businesses," or from the sweat of our "entrepreneurs." But that's simply false. The vast majority of the government's revenue is from wage withholding -- in other words, job taxes. We have heaped so much of the government's need for money onto wage-earners, no one should be surprised that jobs are in short supply.

I have an idea. Let's tax wealth in excess of say, two generation's worth of expenses, and use those proceeds to eliminate payroll taxes. Let's also tax income in excess of, say, $500,000 per year and use the money to pay for healthcare -- and I mean to include corporations in that. Why shouldn't large business enterprises pay a significant portion of their income as tax? The idea that large businesses need special protection to form and to succeed is borne out by no actual evidence, and there's a fair amount of evidence to the contrary.

And finally, we have tried every trick in the book to get the private sector to create adequate levels of employment, so far with dismal results. I have said this many times over the last several years, but we will not exit this jobs crisis that began so many years ago until the government takes direct action in the labor market. Think Harry Hopkins hiring millions of new government workers in 1934, or government contractors and the military scrounging for every able-bodied adult in 1941. That is the kind of thing that will work. And to be an ongoing solution, those hires have to transition to something that is sustainable, such as alternative energy, healthier food production, improved community services, etc.

It's a hard enough challenge when one wants to do it. But when the entire power elite has for many years preached the gospel that we can do anything EXCEPT the one thing that would work, it's impossible. Unless and until we as a society start to embrace the kind of things that will actually work, we will continue to sputter along, failing a little bit more every day.

That concludes today's screed.