Month: August 2011

Principle vs. Politics

Obviously, I need to blog in the morning. Posting at 9 PM Friday seems to have knocked me out for Saturday; so I’ll put up something fast, in case Irene knocks out my power later.

Lately I’ve been noticing a disturbing trend among progressives. Some people have been hailing Obama for things they would normally have opposed, because it gives them a chance to put down the Republicans. Here are two examples:

  1. Libya. I don’t know how many people I’ve seen mocking the Republicans because they said the war was illegal. The basic argument is that the US-backed side won, Obama did it, many Republicans opposed it, so nyah-nyah, GOP! I’m sorry, but the war was illegal, in my opinion. The War Powers Act doesn’t say that the President needs Congressional approval “unless the US wins.” It says he needs Congressional approval, period. There’s a lot more to be said about Libya (were there really no US ‘boots on the ground,’ or were there actually hundreds of CIA agents involved? Will the result be democracy, or control of the Libyan oil fields by the big oil companies? Or maybe years of civil war, as in Iraq? Are we going to send in ‘peacekeeping’ forces now that the serious fighting may be over – and will that become another quagmire?) But that’s a topic for another day; all I am saying here is that the War Powers Act was, indeed, violated.
  2. Extending the “payroll tax holiday.” Currently, Obama supports this, and some Republicans are opposed, so some progressives are chastizing the GOP. But it’s a bad thing! It would be clearer if we called it by its name, “social security tax.” These are the funds that go into the Social Security trust fund (and related trust funds) to be used to pay out benefits. We actually need more money in these funds, not less. Bernie Sanders has filed a bill to put more money in, by extending the tax to those who make more than $250,000 a year. What we don’t need is to cut the revenue. This cut is going to come back to haunt us in a few years, when the right will point out that the trust fund is running low, so that there is a “crisis” in social security. (See my earlier post on this).

Don’t get me wrong, I hope that Obama gets re-elected. But I don’t think we should endorse bad policies just in order to help him do so.

Social Security is NOT in Crisis!

I’m posting very late today, as I had to finish my paper for the American Political Science Association next week (comparing the Tea Party to the labor insurgencies in Wisconsin, Ohio, and elsewhere). I could skip it, but I want to make just a few points about social security.

  1. It’s not in crisis! There is a minor imbalance, between incoming revenue and outgoing benefit payments in about 30 years, but it’s easy to fix. Senator Bernie Sanders introduced a bill yesterday that would fix the imbalance completely, by one simple device: lifting the income cap. Right now, you only pay the social security tax on your income up to a limit – about $90,000. After that, you don’t pay it. I benefit from this myself- my pay goes up in December each year, because I am over the limit – but it’s no big deal. Bernie’s proposal is simply that everyone should pay. It’s already a fixed rate – i.e., not progressive – but with the income cap, it’s actually a regressive tax! That’s crazy. More important, Sanders’s proposal would fix the problem completely – we don’t have to do anything else! That’s how small the problem is.
  2. The idea that young people today will never get social security is nonsense. The people who might have a problem are not young people, but the baby boomers. Social security taxes people who are working to provid benefits to those who are over 65 (more or less). The problem with the boomers is that there are too many of them – sometime around 2050 there will be one person collecting for every 2 people working. But that problem goes away, it’s just a demographic bulge. By the time young people are old, there will be 5 or 6 people working for everyone collecting. The only problem is getting through the boomer-benefit years without ending the program.
  3. Finally, I’m kind of dismayed that progressives, including President Obama, now want to extend the cut in social security taxes that was enacted as part of the budget compromise made in the 2009 lame-duck session of Congress. While it would be nice to have more money – who wouldn’t like that – social security benefits are financed by what people pay into the fund. It’s not in crisis now – but it WILL be in crisis if we keep cutting what people pay in social security taxes (FICA on your paystub). Congress could always appropriate more money for the program – but the strength of social security has always been that Congress doesn’t have to do that. You saw what it was like a couple weeks ago when they needed to raise the debt ceiling – do we want them using that kind of gamesmanship on our social security payments? The President likes to call this the “payroll tax,” but it’s social security – we should be happy to pay it to keep the program healthy. (In case that didn’t convince you, imagine your boss coming to you and saying, “Good news! We’re not going to take out as much money for your pension fund from now on!” That’s just another way of saying they’re cutting your pension!).

Congress is not going to pass the Sanders bill, though they should – but I hope it gets talked up enough to add to our understanding of the issue.

For more information about social security and Medicare, see the National Committee to Preserve Social Security and Medicare.

Did the Wisconsin Protests Begin a Progressive Equivalent of the Tea Party?

Progressives got pretty excited when the Madison protests  broke out last winter. It seemed that the left was finally able to arouse the same kind of enthusiastic protest that had made the Tea Party so influential; perhaps this was the beginning of a move away from ultra-right politics. Now, about six months later and with some elections under our belt, let’s look at the similarities and differences between the two movements.

First, the Tea Party. In my opinion, the Tea Party rose so fast and became so influential because it had the following characteristics:

  • A good story to tell. Government was taking your hard-earned money and giving it to a) undeserving bankers, and b) undeserving poor people. See the famous Rick Santelli rant for a good example of this. Moreover, it was violating the Constitution and trampling on your rights, as characterized by the individual mandate in the health care law.
  • Greater commitment to principles than to partisanship. Sure, they were very partisan principles! But the Tea Party seemed never to back down for the purpose of winning a Republican victory. Their first big success was the special election in the New York 23d House district in 2009. The result was the loss of a Republican seat to the Democrats (who still hold it), but the Tea Party considered it a victory because they showed the Republican Party that it couldn’t win with moderates. Similarly their primary victories in the Colorado, Delaware, and Nevada Senate elections led to Democratic victories in November – but they didn’t care, they had established their power.
  • Substantial outside support. As Kate Zernike relates in her book Boiling Mad: Inside Tea Party America, staff of the right-libertarian PAC FreedomWorks saw the Santelli rant live and immediately started pouring resources into building the Tea Party. Similarly, Fox News effectively became the Tea Party’s media arm, publicizing it widely. Without these two sources of resources, the movement would not have grown the way it did.

How does the progressive movement compare?

  • Progressives have a good story as well: the American way of life is under attack from greedy rich people (sometimes personified in the Koch brothers), the ones who caused the crisis by selling fraudulent mortgage-backed securities. We have to defend that way of life through strong government action.
  • Progressives have been willing to go after Democrats, as with the successful primary campaigns against Joe Lieberman (who was defeated in the Democratic primary but then won reelection as an independent) and Blanche Lincoln (who won the primary, narrowly, but lost the general election). However, they have not done this as much as the Tea Party has, out of a justified belief that they don’t want to undermine President Obama’s reelection, or the chance for a Democratic majority in the House. This is a dilemma the left has not resolved.
  • The main source of outside resources for progressives has been the labor movement. This was certainly the case in Wisconsin. However, more is needed, and the labor movement itself is under attack, and shrinking.

Conclusion: there is hope for a continuing progressive revival. The Wisconsin recalls were promising, though not conclusive, and the coming Ohio referendum will help to mobilize progressive voters further. But much more needs to be done.

On Wisconsin II

So much going on! Earthquakes, hurricanes, war in Libya, economic collapse – but I’m just back from a week of vacation in Wisconsin, and had a chance to learn a little more about the recall campaigns that finished up last week, so I think I’ll write about that.

In case you were hibernating last winter, I’ll sum up the situation very briefly. The Republican Party, driven by the Tea Party, scored big victories in Wisconsin in the 2010 election: they won the governorship, a U.S. Senate seat, and majority control of both houses of the legislature. The new Republican Governor, Scott Walker, decided to use this partisan control to make basic structural changes that would both push the party’s policy agenda and help them maintain control in the future. There were many parts to this package, but two were probably the most important:

  • Walker’s so-called “Budget Repair Bill,” which made cuts in benefits for state workers (especially health care and pensions) and also undermined the collective bargaining rights of public employee unions. (They were forbidden to bargain over benefits, and they lost the power to collect dues by payroll deduction.) The latter had nothing to do with the budget, but was designed to weaken the power of the largest progressive political force in the state. The Supreme Court’s Citizens United decision gave both corporations and unions the power to spend unlimited sums to influence elections; if Walker could knock out the unions, that would leave the corporations with no strong opponent on the other side.
  • The Wisconsin Republicans also pushed through a bill to redistrict the legislature for the 2012 election. This was meant to consolidate their hold on a majority; I’ll only mention it here, as that’s not my focus.

The Budget Repair Bill drew strong opposition. Hundreds of thousands of Wisconsinites demonstrated against it, occupying the state’s Capitol building for weeks and rallying in cities across the state. Emboldened by this public outpouring, all the Democratic members of the state senate left the state, holing up in Chicago, so that the Senate would not be able to pass the bill (budget bills can pass by a majority in Wisconin, but they require a larger quorum, more than the Republicans could achieve without the Democrats).

After weeks of standoff, the Republicans decided that the Budget Repair Bill was not about the budget after all, and passed it under the easier rules that apply to non-budget bills, as they had enough for a quorum under those rules. There were other issues (timely notice, the open-meetings law), and lawsuits are still pending, but they passed it anyway. The Democratic senators then returned to Madison.

The Wisconsin recalls grew out of this struggle. Outraged progressives gathered signatures to call recall elections against all six Republican senators who were eligible for recall (those who had served at least one year in office); Republicans retaliated by filing for recalls against the Democratic senators, though they only got enough signatures to force three elections. That meant there were a total of 9 recall elections, against 6 Republicans and 3 Democrats, during the summer. The last of these, against 2 Democrats, was August 16.

The results:

  • All three of the Democrats who had been challenged won reelection.
  • Of the six Republicans challenged, 2 were defeated and 4 were reelected.
  • The Republicans retained control of the state senate, but by only one vote.

This was a victory for the Democrats – they had more senators after than before – but less than they had hoped for, so it was also disappointing. An earlier electoral challenge to the Chief Justice of the Wisconsin Supreme Court (an ally of Governor Walker) had also narrowly failed to defeat him, so it can be said that the progressive forces have grown stronger, but not yet strong enough to win. There will be another round next year – Governor Walker becomes eligible for recall in January, and there will be a regular legislative election in November 2012.

But there is another result, much more important than electoral victories or defeats: the coming together of progressive-minded people across the state as a new political force. This happened first in the “We Are Wisconsin” movement that came together to fight the judicial and recall elections, but it is growin to more than that. This weekend in Madison there will be a Democracy Convention, not only to discuss what real democracy is, but to make plans to make democracy happen. Here’s a link to the convention website. People are energized and inspired – and more and more understand that what is at stake is the American way of life. It’s too early to be sure that this movement will last and grow, but it is beginning to look like there is finally a force to counter the Tea Party.

Libya – Let’s Not Get Carried Away!

I’m back in town for a week, so will try to blog every day until I leave next week for the APSA meeting in Seattle. Where to start! A lot has happened – but I guess I have to say something about Libya.

As I write this (the morning of August 23d), it is looking like the triumph proclaimes over the weekend was overdone. Gaddafi is still holding on, he has troops loyal to him, and some other parts of the country are sticking to him as well. (The press is dismissing these as the areas of his tribe, but so what? They are people, too.) Maybe by the end of the day he will be gone, but maybe not. So let me just make a few points:

  • There used to be something in England called “Whig history.” Basically, this was the idea that England (and I do mean England, not the UK) was the bearer of political liberty, and destined to triumph and enlighten the rest of the world. Everything that happened was for that purpose, and therefore fated to happen. This attitutde is alive and well in the US. Specifically, there is a feeling that Gaddafi is destined to fall – so whenever there are some signs that he is weakening, victory is proclaimed prematurely. Teleology takes the place of analysis – always a mistake. (Orthodox Marxists used to make the same error; it’s one of the things Nicos Poulantzas was trying to correct.)
  • Even if this turns out to be a victory, that does not mean the war was illegal. Nicholas Burns, a former diplomat and now a professor, makes the following argument (among others) in today’s Boston Globe: “. . . the president was subjected to an unusual, highly partisan, and unreasonable assault by Congress on his constitutional right to commit US forces in the first place. Yet Obama persisted, and it has paid off.” That’s just silly. The War Powers Act says that the President must get approval from Congress for foreign military inteverntion. There is no exception that says “unless the US wins.” If intervention was illegal (as I think), then it still is.
  • Now for the basic point. This should be about democracy and the will of the Libyan people, not about whether Libya will be dominated by the US. That’s going to be difficult. Unlike Egypt or Tunis, Libya has a substantial part of the population that seemed to prefer Gaddafi to the rebels. (I remember vividly hearing a radio interview with people in Surt saying how they would fight to the end to keep the rebels out of their city.) This seemed to be more a civil war between two groups, rather than a popular uprising against a tyrant. (Sure, he was a tyrant, my point is that many people still preferred him. It was not just ethnic loyalty, either – see James Petras’s recent book for an argument that Libyans got substantial social benefits under Gaddafi’s rule.). As in any civil war, you have the problem of how the losing side fits in. They are still Libyans, and entitled to be part of any democratic government.

If Gaddafi is replaced by an independent democratic government, I will be delighted. I just think that the triumphalist crowing is both premature and out of place.

Corporate Cash and Jobs

I keep hearing that corporations are hoarding cash – somewhere abov e $1.2 trillion. That’s a lot of money – and a lot of people are saying that they should be using it to put people to work, creating the jobs our economy needs.

The trouble is, there’s no reason for them to do so. They could hire people to make more products, but people aren’t buying the products they are making now; so if they did that, they would be throwing their money away.

Of course, the reason we consumers aren’t buying stuff is that we don’t have the money ourselves. Either we’re laid off, or our pay is frozen, or we’re afraid of being laid off in the future; and if we’re lucky enough to have a pension fund, it’s lost value. So if the corporations did spend the money to hire people, maybe the people they hired would spend more, and the economy would start to go up.

That’s an iffy process, and a long one. We need a federal jobs program: put people to work fixing bridges, building wind and solar power plants with federal subsidies to help reduce greenhouse gas emissions – and rehire the teachers, health-care workers, police officers, and firefighters that local governments are laying off. That will create demand more quickly and definitely.

What we do not need is tax cuts on business. That will give the corporations even more cash to hoard.

I’m leaving tomorrow for 10 days of vacation, so I may not post for awhile. I’ll be back at it August 23.

London Riots Now, American Riots Then

Official reaction to the UK riots – from the Cameron government, from the police, but also from the leaders of the other political parties, Labour and the Liberal Democrats – has been to condemn them as mindless criminality. Similar arguments were made about the urban uprisings in the United States in the 1960s. I remember particularly the view offered by the ultra-conservative political science professor Edward Banfield, that they were ‘a combination of animal spirits and stealing.’

There’s more to it than that, I think.

Let me add right away that I am not in the UK, and I haven’t spoken to anyone who participated. My views are based only on what I have read – most recently this insightful piece from Reuters – and on thinking about what happened here in the US 50 years ago.

Of course the riots were not well planned, and are not likely to achieve any political goals. Nevertheless, it seems clear by now that they were based on real grievances and had real targets. These were basically two:

  1. The police. Well, duh! The whole thing began when the police shot Mark Duggan dead, left it to his family to learn of his death through the news media, and then stonewalled that family and other community members when they came to the police station to seek an explanation – see this piece from the Guardian for details. Many people have said that this contemptuous treatment is typical of the relations between the UK police and urban low-income communities, and particularly with black people.
  2. Chain stores. Yes, people are stealing, and yes, they are stealing things that they want to have and maybe cannot afford. At the same time, the stores they are looting are symbols of oppression – outposts of big corporations which sell shoddy goods for too much money, drain the money out of the community, and don’t put anything back in. Here in America, such looting was driven in part by hatred; I suspect it’s the same there, a view confirmed by some of the interviews in the Reuters articl linked above.

The riots have been suppressed for now, but the problems and the attitudes are still there. If David Cameron insists on treating them purely as a law and order issue, he will fail. Meanwhile, I hope the British left gets out there and steps up its organizing around ways to find real solutions to the problems these riots have highlighted.

The Downgrade, the Debt Deal, and the Recession

Late Friday, Standard and Poor announced that it had downgraded its rating of US Treasury bonds. Monday, the stock market fell like crazy as everyone sold stocks and bought- you guessed it, US Treasury bonds! (Gold, too).  Today, the stock market rose and fell like crazy, but finally went way up. Conclusion: something’s wrong, but no one is sure what.

Naturally, people in government are doing two things:

  1. Blaming each other
  2. Looking for solutions

I’ll skip the blame (it wasn’t my fault, honest!) but say a word about solutions. But in doing so I want to emphasize one disagreement I have with many people I normally agree with. In an earlier post I made the point that:

  • It’s not about the deficit!

Now I want to add a second point:

  • It’s not about the tax base, either!

Many progressives have been pointing to part of the S&P report that says the insecurity of US debt would go away if the so-called “Bush tax cuts” were allowed to expire next year. As you probably know, those tax cuts were larger for those with incomes over $250,000 a year, and larger still for those with much higher incomes.

Let me be clear: I am absolutely, totally in favor of raising taxes on the rich. Among other things, doing so would help reduce the obscene level of economic inequality that is destroying our society. Taxes can be a powerful tool for increasing equality, and I’d like to see that tool used.

However, we do not need more taxes to make federal debt secure. Unlike Greece (for example), the US debt is denominated in dollars – so the US can always pay off that debt, if necessary by printing more dollars. The only thing that makes US debt insecure is that Congress has passed a law saying that we can’t borrow more money once we have reached the ceiling – and a sizable bloc of members of Congress have said that they will never vote to raise that ceiling.

Congress did vote to raise the ceiling last week, but only at the last minute, and only by imposing terrible conditions. In particular, Congress voted to make budget cuts that will eliminate something like 1.8 million jobs by the end of 2012.

Eliminating that many jobs is going to devastate the economy. It is just the opposite of what we should be doing. If we spend the money to create jobs (and there is plenty of work that needs doing, including rehiring laid off teachers, firefighters, police officers, health inspectors, etc.), the economy will start to grow, and tax revenues will go up eventually.

It’s not just an ironic wrinkle that investors were buying Treasury notes yesterday. Despite S&P, everyone knows that these notes continue to be the safest investment in the world. If the selloff had any cause beyond irrational jitters, it was the knowledge that if we stay on our present course we are going to eliminate 1.5 million jobs, cut consumer demand, and as a result very likely throw the country back into recession.

In this context, arguing about the Bush tax cuts is just a distraction. Worse, it accepts the false view that the problem is the deficit, rather than the recession. Congress and the President should stop worrying about the deficit and turn their attention to creating jobs.

What’s the Story with Obama?

A lot of people on the left have been talking about Drew Westen’s piece, “What Happened to Obama,” in the New York Times yesterday. Here’s a link, in case you missed it – but if so get it today or run into their paywall.

Westen, like many (me too) wants to bring back the New Deal. More important, he understands that politics is built on stories. He wants Obama to tell a story about incredibly wealthy people in investment banks, hedge funds, and (my addition) bond-rating agencies, whose major motivation is to be come even wealthier. These people’s greed caused the economic collapse of 2009, and they should pay the costs. Instead, the government has been bailing them out. We’ve let the banks who issued fraudulent mortgages get off free, while doing very little to alleviate the suffering of those they swindled, and who now risk losing their homes.

It’s a powerful story, and Westing tells it much better than I just have! However, he barely mentions (except in a few words at the end) that there is another story. In this story, the problem is squabbling politicians who are so focused on their partisan maneuvers that they don’t care about ordinary people’s problems.

Most Americans believe both stories. As far as I can tell, Obama only believes the second. When he compromises with the Republicans on their terms (or on mixed terms, as with the budget deal last December), that is the story he has in mind. He wants people to see him as someone who really cares about their problems, who will sacrifice his own partisan views if he has to do that to save jobs, to prevent default, or anything else of major public importance.

That story was the basis of Ross Perot’s appeal, and it always worked for him. The trouble is, Obama is actually running the country. To really win, he has to do more than show that he cares about the nation’s problems. He has to solve those problems. The compromise solutions he goes for don’t.

It’s pretty clear what we need: massive job creation to get the economy going, then letting the Bush tax cuts lapse and getting out of the wars in Iraq and Afghanistan, so that the new revenue from economic growth can go into basic public services and deficit reduction. But you can’t get that program through bipartisan compromise, because the Republicans are dead set against it.