Author: jberg

The Filibuster Struggle Is Getting too Cute

OK, they’re finally taking my advice. The  Democrats seem to be willing to declare that the Senate is not a “continuing body” and therefore can adopt or change its rules by majority vote at the beginning of a new Congress. In other words, until they adopt rules, there are no rules, so a simple majority can do anything.

That’s great, I hope they stick to it – only the reform they are talking about is really silly. A lot of people I respect –Daily KOS, MassVOTE, among others – are calling for a rule that says you can’t filibuster unless you actually stay on the floor and keep talking. If you stop talking, the Senate can then more immediately to a vote. 

I say this is silly for two reasons:

  1. I actually proposed doing this in an earlier post. However, they don’t need a new rule! It’s the rule now, but senators evade it by asking unanimous consent to set the matter on the floor aside and move on to something else. All it takes is for one senator to object, and they have to keep talking about the bill being filibustered. Senators don’t make such objections, because then they would have to stay on the floor themselves, and they don’t want to be bothered. Would this change with a new rule? I don’t think so.
  2. We could do much better. The only really important reform is to rule that the Senate can close debate on anything by majority vote. Obstructionist senators will be happy to speak for hours, days, or weeks – it will only get them points with the Tea Party! If the reformers have the votes for reform, let’s make the reform meaningful!

Of course, it may be that they don’t have the votes to change the number, only for the silly rule we are hearing about. But if that’s so, people should be signing petitions for changing the number, not for a meaningless rule that filibusters have to keep talking.

Don’t make them keep talking, make them shut up and vote!

New START Is a False Start

     The New START (Strategic Arms Reduction Treaty) is going to be ratified today, unless something very surprising happens at the last minute. This is certainly a victory for President Obama. But is it a victory for those of us who want to eliminate nuclear weapons? I think not.

      The treaty does do one good thing. It requires both Russia and the US to reduce their number of strategic nuclear missiles (“strategic” means that they can go a long way, so that one of the two countries can hit the other one with a missile; “tactical” weapons are those that won’t go as far) and launchers to 1,500 missiles and 700 launchers. That’s fewer than were permitted under the previous, never-ratified START treaty, so it’s a good thing.

      That sounds great. Unfortunately, President Obama got the votes he needed to ratify the treaty by promising to expand the nuclear arms race in other ways. He commited himself to an $85 billion program of “modernization” (i.e., developing new, more powerful and active missiles to replace the ones the US has now), and he promised to proceed with a version of President Reagan’s “Star Wars” (aka “missile defense”) proposal.

     As Alice Slater of the Nuclear Age Peace Foundation put it, “. . . if the U.S. persists in developing its nuclear infrastructure with new bomb factories while threatening Russia with proliferating missiles, it’s unlikely that this modest New START will help us down the path to peace.”

     From President Obama’s point of view, the important thing was to win the vote, even if winning required making commitments that actually hurt the cause of nuclear disarmament. What’s missing from this approach is a strategy that can really lead to the elimination of nuclear weapons. Instead, the emphasis of the US has been on nuclear nonproliferation, limiting the possession of nuclear weapons to states that have them already. This approach has failed. The number of nuclear states continues to grow. As I’ve said before, we cannot reasonably expect Iran, North Korea, or any other state to refrain from developing nuclear weapons unless the US is getting rid of its own.

     For further reading on abolishing nuclear weapons, see The Challenge of Abolishing Nuclear Weapons, edited by David Krieger.

The Real Threat Behind Obama’s Tax-cut Giveaway

As you have heard, the tax-cut compromise was enacted last night, and will become law as soon as President Obama signs it. I’d been on the radio all over the country explaining why it’s bad, but I guess Congress didn’t listen to me!

     I just want to make two points today, so I’ll keep this short. First, the House Democrats were really disappointing. Everyone expected them to add an amendment to increase the estate tax on estates over $3.5 million, giving them some chance to negotiate a better deal from the Senate. They were supposed to have the votes for that, but they didn’t do it.

      By the way, I keep hearing conservatives call it the “death tax,” as if that’s supposed to be bad. Why? In the UK, “death duties” were introduced by the Labour government of the 1940s, specifically to break up the hold of the old aristocracy on the countryside. It was wildly popular under that name! Maybe we should be more straightforward here.

     But on to my second point. Today’s Washington Post reports that:

Key lawmakers in both parties have embraced a deficit-reduction plan produced by Obama’s fiscal commission, which includes a tax overhaul that would lower rates across the board but raise additional revenue by closing dozens of long-standing loopholes, such as the mortgage-interest deduction claimed by many homeowners. Meanwhile, the relative ease with which Obama and the GOP were able to strike a deal over the Bush cuts has raised hopes on both sides for productive talks in the future.

     In other words, now that they’ve warmed up by preserving the Bush tax cuts and undermining Social Security with the “payroll tax holiday,” Obama, the Republicans, and the Democratic leaders in Congress are going to go on to pursue the wholesale attack on Social Security called for by the deficit-reduction commission. That may be the worst part of the whole deal.

     What do you think? And what do you think those opposed to the deal should do now?

What’s wrong with Obama’s tax-bill compromise

There are four basic issues with the tax deal President Obama announced Monday: economic stimulus, fairness, the federal deficit, and (surprise! It has nothing to do with the basic issues) social security. Let me take them in order.

1. Economic stimulus. In times of recession, government is supposed to put more money into the economy than it takes out — i.e., run a deficit. It can do this in two ways: spend more, or tax less. Spending more provides a more direct link to jobs, since jobs are created directly by the spending; it also allows government, through democratic processes, to determine what the public priorities are. We could spend a lot on a high-speed train network, renewable energy, education, and other things everyone agrees are desirable. Tax cuts for working people also lead pretty directly to jobs, since people are likely to use the money to increase consumption. Tax cuts for the rich are another matter — the rich can consume as much as they want already (that’s what “rich” means), so they will invest the money. In the 1980s, Reagan argued that there wasn’t enough investment money around to get the economy moving, so he turned to tax cuts as a “supply-side” stimulus. Whether or not that was right then, it is certainly not right now. The problem is just the opposite — because most available investments are risky, investors are sitting on their money. So tax cuts from the rich are not likely to lead to jobs at all.

2. Fairness. Ever since the Reagan administration, the capitalist class has been continuously increasing its proportional share of the national income. There are many parts to this: lower taxes for the rich, higher taxes for the poor; eliminating the estate tax, so that the children of the rich can be rich without having to work; limiting the power of labor unions, the major institutional force for greater equality, by weakening the labor laws (see Michael Goldfield’s book The Decline of Organized Labor in the United States); and now, the Citizens United decision permitting corporations to spend unlimited money to influence elections. This involves more than fairness – it’s also a matter of power. Money buys power, so as the rich get richer it becomes harder and harder for the rest of us to bring fairness back into the system. The progressive alternative was to give everyone a tax cut (that is, extend the existing tax cuts) on income less than $250,000 per year. The compromise accepts the Republican alternative to give those with higher incomes an additional, larger tax cut. This is contrary to fairness, and should be rejected. (The package does contain one progressive component, extension of the Earned Income Tax Credit. This is the only part of the tax package that gives more to the poor than to the rich.)

The Federal Deficit. As I said in the stimulus portion above, a deficit is a good thing right now, but it should be the kind of deficit that goes away with prosperity. Spending more on unemployment compensation is a good example; with prosperity, unemployment goes down and so does spending. But extra tax cuts for the rich are a permanent hole in the government’s ability to do positive things.

Social security. The most outrageous part of the deal is the “temporary” cut in payroll taxes. For years the establishment has been howling that the social security trust fund is going broke. It isn’t, but that’s the topic for another essay. However, it will go broke if we cut the flow of revenue into the fund. All the conservatives complaining about social security should be complaining about this – they are not, only because they understand that this payroll tax cut will achieve their real objective: destroying social security. As Jed Lewison has been pointing out on Daily Kos, there will be just as much pressure to extend the “temporary” payroll tax cuts when they expire as there is to extend the “temporary” Bush tax cuts today. Labor Notes has a good article with further analysis of this point.
Obama’s tax deal gets some temporary good things by making some bigger bad things permanent. I hope it is defeated.

Three Cheers for WikiLeaks!

I don’t have any idea what the general popular reaction to the latest WikiLeaks release of diplomatic cables may be. No doubt there will be polls soon, but I haven’t seen them. However, I have been kind of  surprised by the personal conversations I have had with other people, not to mention the commentary in supposedly enlightened media outlets, such as National Public Radio (NPR). I even heard someone on the radio suggesting that Julian Assange be prosecuted for treason! Doubly ridiculous, since 1) he is not an American–you can’t commit treason against someone else’s country, only your own; and 2) treason is defined (in the Constitution) as giving aid and comfort to the enemies of the United States — NOT as giving information to the American people!

So let me be real clear: bringing this stuff to light is great, and definitely in the interest of the American people.

If our diplomats are plotting attacks on Iran, supporting coups in Honduras, and generally expressing their contempt for the other nations of the world, I certainly want to know it. Don’t you? Sure, it embarrasses them if this stuff comes out. It should! They ought to not only embarrassed but ashamed, not just because they got caught but because they have been acting against the interests they should be promoting: world peace and democracy.

One of the more interesting revelations wat that leaders of several Arab states want the US to bomb Iran. Certainly this is embarrassing to the Arab rulers in question — but why should we care? Those guys are dictators, after all, and have personally enriched themselves by keeping the people of the Middle East in poverty. The more we can embarrass them, the better. In this particular case, maybe the embarrassment will help make the US government realize that the only way to stop nuclear proliferation is by sincerely negotiating the end of all nuclear weapons worldwide — beginning with those of the United States.

US diplomats don’t represent the American people — they represent the giant corporations that dominate politics today. Bringing their actions into the light of day should be taken as the first step toward changing this.

Tax Cuts and the Deficit

It looks like the next big political debate will be about tax cuts. Why the Democrats didn’t want to have this debate before the election is beyond me — it would certainly have helped to make the point that they care about ordinary people. But for whatever reason, they let it go, and now have to try to get a vote in the House of Representatives structured the way they want it.

To put the whole case in a nutshell, what the Democrats want is what the country needs – tax cuts to put more money in the hands of those who 1) need the money, and 2) will spend it. That’s not the rich – they will invest it, and since we are still in the aftermath of a recession, with low consumer demand, it won’t make sense for them to invest it in something productive, making stuff that won’t be bought – so they will invest it in speculation, the stuff that brought on the recession in the first place.

Working people, on the other hand, will use the money to but things, like food, clothing, and housing. Since, again, we are in a period of low demand, that is just what is needed. For once, the Democrats are proposing more or less the right thing.

What what about the deficit? Won’t any tax cut at all make it harder to balance the budget? Yes, but – and this cannot be said too strongly — that is not a problem right now! Ronald Reagan, of all people, used to argue (following the work of economist Arthur Laffer) that cutting taxes would reduce the deficit because it would encourage growth. That didn’t work for Reagan, because he didn’t focus the tax cuts on people who would spend the money. But from the Keynesian point of view, cutting taxes is one way of running a deficit, and it’s really that deficit that is needed to create demand and get the economy growing. We should return to the concept of the”full employment budget” – tax and spending levels that would produce a balanced budget if we had full employment. In times of recession, tax revenues go down and spending (e.g., for unemployment compensation) goes up, while in times of prosperity revenues go up and spending goes down – so a full employment budget will produce deficits in times of recession and surpluses in times of growth, just what we want in the way of fiscal policy.

There are two complicating factors, however. One is that fiscal policy has to be supported by monetary policy. If the Federal Reserve is trying to fight inflation by reducing the money supply, fiscal deficits won’t work — they will put money into the economy through spending, but take it back out by borrowing to cover the deficit. A deficit needs to be combined with what we’re now calling “quantitative easing” – i.e., action by the Fed to create money to finance the deficit. This would be inflationary in the long run — but for the moment that is not a problem, since we are in a period of deflation.

Second, we probably do not have a full employment budget right now due to the ridiculously high level of military spending. This should be cut about 25%, which would solve many problems. Needless to say, getting all US troops out of Afghanistan and Iraq would help a lot with that! But there are plenty of other ways to cut it, as well.

The other problem is that the Republicans control the agenda of the House of Representatives, and have enough votes to support a filibuster in the Senate, and they are insisting that they will only allow a vote on a bill that includes tax cuts for the rich as well as for working people. I have a simple suggestion: the Democrats should offer a series of amendments that would prove irresistibly popular. The first would be what they are proposing now – tax cuts only for those with incomes below $250,000 per year. That’s pretty popular already, but if that fails how about cuts for everyone under half a million a year? A million? Ten million? I’d love to see Congress having to vote on a tax cut only for people with annual incomes over ten million dollars!

They could also propose even higher rates for those at the upper levels. How about a 95% tax on all income over $10,000,000? We had that (with a much lower cutoff) through the early 1950s, and it did not stop growth!

Just a few suggestions — I just hope that Congress, or the progressives in it, find the courage to fight this issue for.

Veterans Day vs. Armistice Day: What’s in a Name?

In 1954 the holiday formerly known as Armistice Day, which celebrated the Armistice that ended World War I, was renamed “Veterans Day” in the United States. This was ostensibly due to a belief that all veterans should be honored, not only those who fought in World War I. However, the change has greater significance.

Most importantly, Armistice Day glorified peace, while Veterans Day glorifies the sacrifices of war. Partly, this is because of the date: the end of the war, not the decisive battle or the turn of the tide (like D-Day, for example). Beyond that, Armistice Day kept alive at least some understanding of how the armistice came about: through the revolutionary uprising of the German people, which began with a naval mutiny in Kiel and Wilhelmshavn on October 29-30 and spread rapidly through the entire country, bringing the Socialist Party into power, electing revolutionary councils, forcing the abdication of the Kaiser, and proclaiming a republic in Germany on November 9. The military, which had been resisting Woodrow Wilson’s peace terms, now had no choice but to accept them, leading to the Armistice on November 11.

The revolution did not fare well. Socialists and Communists were unable to work together, leading to a left-wing insurrection in Berlin in January 1919 that was put down by the military, and the resulting murder of Rosa Luxemburg and Karl Liebknecht, the leaders of the Spartakusbund. The bad blood between these two left parties made it easier for Hitler to come to power, as they were unable to unite against him. All the same, November 11 marks the ending of a war by a popular revolution, and it is unfortunate to see this history forgotten behind the name of “Veterans Day.”

For more about the revolution, you can read Pierre Broue, The German Revolution, 1917-1923 or Paul Frohlich, Rosa Luxemburg.

Thoughts on the 2010 Election

I’m going to add to this later, but I have to say something about the election results! So here goes with a few bullet points:

  • The Tea Party had successes, but was a net loss for the Republicans. Hypotheticals are always uncertain, but it seems likely that the Republicans would have won the Senate elections in Delaware, Nevada, and West Virginia if the Tea Party candidates had not won the Republican nomination. That would have been a Republican majority.
  • Today’s Washington Post cites unspecified exit polls as finding that 23% of voters said that they were voting for the Tea Party while 18% said that they were voting against it.  That sizable left is not doing nearly as good a job at making itself heard.
  • The Right claims a victory when it ousts a moderate Republican, even if it means the Democrats win the election. By the same token, if to a lesser extent, the Left should consider the defeat of Blanche Lincoln a victory. True, she did win the primary, and true, she may well have lost anyway – but they did weaken her.
  • The underlying point of all this is that progressives need to move away from President Obama and start working for what they believe in in every election.

As I said, more later!

I expanded (briefly) on this analysis as part of the Presidents’ Roundtable at the Northeastern Political Science Association conference, Friday, November 12, at 3:45 PM in the Parker House. For a podcast of my remarks, see http://johncberg01.podomatic.com/.

November 10, 2010: See “Did the Tea Party Cost Republicans the Senate?” in Chris Cillizza’s Washington Post blog, “The Fix.”

The Persecution of Chuck Turner

Let me be clear from the start: if Chuck Turner took that money (and the jury says he did), it was wrong, and his conviction was proper-a tragic end to a great career.

However, Turner’s guilt or innocence is only a small part of the story. The bigger part involves the decision by Federal Attorney Michael Sullivan – a former Republican State Representative – to go after him. Bear in mind that even if we accept the prosecution’s case at face value, the following points are true:

1. This was not an investigation of a crime. No crime was committed until the investigation of Turner was under way.

2. Ron Wilburn, the guy who gave $1,000 to Turner, was paid $30,000 to do so by the federal government.

3. Wilburn has told the press that several other individuals were implicated by his evidence, but the only people prosecuted were two African American elected officials with progressive politics, Turner and then-State Senator Dianne Wilkerson. Logically this has to be true — elected officials can’t issue liquor licenses themselves, they have to get someone in City Hall to do it.

It’s hard not to conclude then that this was not an attempt to root out corruption in city politics, but an attempt to silence a strong progressive voice from Boston’s inner city.

In this regard, I have to take note of an editorial in today’s Boston Globe with the title “Chuck Turner’s World of Lies.” Here’s the concluding paragraph:

Turner, to be fair, isn’t a venal man. He doesn’t live it up on ill-begotten funds. But he has spread unreality among his supporters for decades. And that may be his greatest crime. In a Boston neighborhood that so desperately needs sensible leadership to address crime, joblessness, and poor education, Turner has fed his constituents a steady diet of political fantasy

Wow! It is the considered opinion of the Globe editorial board that to advocate ideas they disagree with is a serious crime! More serious than bribery, for example. It follows that Turner deserved to be punished whether or not he took a bribe – so perhaps it was justifiable to arrange for him to be offered one. With Boston’s leading newspaper advancing views like that, it’s no wonder that many of us are very skeptical indeed of the Turner prosecution.

Why banks would rather foreclose than save money

An article on the front page of yesterday’s New York Times explained something that has been puzzling me. If a house is worth less than the value of a mortgage, and a bank forecloses on it, they lose the difference between the mortgage and the price they can sell the house for. Since the foreclosure process itself costs them something, it would seem to make sense for banks to offer to reduce the mortgage. Doing so would save them the foreclosure costs, and would keep more people in their homes. However, banks seem very reluctant to do this. They lobbied, successfully, against a law letting bankruptcy judges rewrite mortgage terms, and they have generally been unwilling to rewrite them themselves.

Here in Boston, City Life/Vida Urbana has been organizing anti-foreclosure, anti-eviction campaigns for both tenants and homeowners. (Banks don’t like to manage rental properties, so when they foreclose they often try to evict all the tenants and leave the house standing empty.) They rally activists from around the city to try to blockade scheduled evictions through civil disobedience. These evictions are frequently called off at the last moment because the bank has agreed to sell the house to the tenants, or to rewrite the mortgage — so why don’t they do that all the time?

The Times article is about “short sales” – selling a house for less than the amount of the mortgage – not “workouts” (agreeing to let the owner pay less than the true mortgage amount), but some of the factors apply to both.

Most basically, if a bank forecloses on a house it can keep that house on its books as an asset at the face value of the mortgage, while if they rewrite the mortgage, or accept a short sale, they have to write off the loss. Their real assets are the same either way, but if they don’t have to account for the loss they appear to be doing better than they are.

Second, they are afraid of moral hazard – if people think they can get the mortgage reduced, they will not do as much as they could to make the payments. And there is some possibility of fraud – people will just say they can’t pay, or will sell a house to a relative and then buy it back later.

So the banks aren’t just being stupid, they have reasons for what they do. Unfortunately, the above logic leads them in a direction that is not in the public interest. It certainly does not serve the people being evicted; and it does not really serve the banks, because it makes them unstable. No bank wants to be the first to write off all its mortgage losses, because that will hurt their competitive position; but at some point they will have to do it, and until they do no one can tell what the bank and its stock are actually worth.

This isn’t just my leftist point of view – the neoliberal Economist has just called for Congress to pass a law to let bankruptcy judges write down mortgages, or to give foreclosed-on homeowners a right to wrent their own homes, or even a federal subsidy to keep the creditors from losing if mortgages are reduced. If even they – normally free market advocates – are calling for this, then it’s time to do something.