Month: February 2019

Higher Education, Income Inequality, Taxes

Eat or We Both Starve

Posted on by mjohnson

My weekly column from the Lewiston (Idaho) Tribune.

On an out of the way country road a few miles outside of Oxford, Mississippi you’ll find a place that claims to serve “the best catfish in the South.” The Taylor Grocery, actually a general store turned restaurant with a rusty gas pump out front that once promised “ethyl,” is the kind of place where the chicken is fried, the comfort food is red beans and rice and the pork chop comes covered in gravy. 

At Taylor Grocery you can have sweet tea, soda and coffee. If you want a beer with dinner you bring a couple bottles in a paper sack, be discreet about it and the waitress will bring you a glass – made of plastic. 

I certainly remember the rib sticking food at the place, but also remember the sign out front with a simple message: Eat or We Both Starve. 

Taylor Grocery near Oxford, Mississippi

That sign in front of a shabby looking restaurant in the hardwood and pine forest of northern Mississippi is just about the perfect metaphor for what should be the central debate in American politics at the moment. The American middle class is a sad hollowed out husk of my parent’s generation. Lost in the economic turmoil, resentment and downright despair of millions of Americans is the notion that a robust, expanding middle class is what really makes a capitalist system function. The guy pushing fried oysters in Taylor, Mississippi, or selling cars in Reno or peddling new dishwashers in Clarkston doesn’t eat the farmer or schoolteacher or carpenter can’t afford to buy. We all starve.

The Disappearing Middle Class…

Neither by mother or dad went to college, but they certainly saw to it that my brother and I did. They saw, properly so, that education was our society’s great advancer. They had every reason to believe, like their parents before them, that their kids would enjoy the American economic dream – a home, a car, an education and a decent job that would empower a whole new generation. We once considered that the American dream, back in the day when my dad could co-sign a $2,000 college loan that I could actually afford to repay. 

But the stark reality is that the American dream for many fellow citizens is more illusion than expectation and there is evidence everywhere you look. The New York Federal Reserve reported recently that “a record 7 million Americans are 90 days or more behind” on their car payments, a metric that is genuinely worrying to many watchers of the economy. Many Americans are entirely dependent upon their automobile to get to work and they tend to make the car payment before anything else. That so many are so far behind is a stunner.

At the same time student-loan delinquency rates are going through the roof, more than $166 billion in delinquent loans in the fourth quarter of 2018 alone. As Bloomberg reports the total number of delinquent student loans is at a record $1.46 trillion.

Meanwhile, the prospects of a young American, even one with a good education, landing a job that will pay for the American dream are evaporating. In an article that manages to be both poignant and angry, Anne Helen Petersen wrote recently about why so many young Americans feel cheated by the enormous debt they have incurred to get a degree that then can’t produce a salary they can live on.  

“The problem is the growing certainty that you were sold a false bill of goods about the immeasurable value of higher education,” Peterson wrote in BuzzFeed, “and that’ll you’ll be forever paying down the cost of a broken dream.”

There are dozens of realistic policy proposals to address these issues, including more focus on the affordability of community colleges and loan forgiveness programs that actually work. Peterson’s reporting confirms that many do not work and thousands of young people labor for years to make even a dent in their loan principal, let alone get to a level of financial security that allows a real pursuit of the dream. 

The recent GOP tax bill has actually exacerbated the problem with graduate students who receive tuition breaks now required to treat those benefits as income. What kind of society taxes a young person for trying to get a master’s degree? 

Party Like it’s 1929…

Meanwhile, the rich get richer and the middle class gets delinquency notices. University of California economist Gabriel Zucman recently published a paper on the continuing and dramatic growth in income inequality, another feature made worse by the Trump-Republican tax bill that was so enthusiastically supported by Idaho’s congressional delegation. 

“U.S. wealth concentration has followed a marked U-shaped evolution of the last century,” Zucman writes. “It was high in the 1910s and 1920s … and the top 0.1% wealth share peaked at close to 25% in 1929.” The Great Depression stopped the increase and “after a period of remarkable stability in the 1950s and 1960s, the top 0.1% wealth share reached its low-water mark in the 1970s.” Now, “U.S. wealth concentration seems to have returned to levels last seen during the Roaring Twenties.” 

Source: Economist Emmanuel Saez, UC Berkeley

The three wealthiest Americans – Jeff Bezos, Bill Gates and Warren Buffett – collectively have more wealth than the bottom 50% of the U.S. population, while about a fifth of Americans “have zero or negative net worth.” The only other places in the world were the wealth held by the super rich is as skewed are China and Russia. We truly are making oligarchs great again, while the folks who want to buy the appliances, the houses and hope to send their kids to school grow ever more marginalized. 

The hollowing out of the once great American middle class, the loss of old-style manufacturing jobs, the decline of organized labor as a force for economic stability and worker protections, the skyrocketing cost of higher education and wage stagnation represent a crisis for American capitalism and politics. If fellow Americans aren’t reaping more rewards of the one-time American dream, we are all eventually going to starve. 

—–0—–

Idaho Politics, Reapportionment

A Short History of Reapportionment

Posted on by mjohnson

“The past is never dead,” the great novelist William Faulkner wrote in Requiem for a Nun. “It’s not even past.” 

In the spirit of Faulkner the Idaho Legislature often seems to be the political equivalent of the Bill Murray’s character in the movie “Groundhog Day,” constantly reliving its flawed past, recycling old notions and re-igniting controversies once consigned to the political ash heap.

The legislature may have dodged a bullet pointed at its own foot this week when apparently cooler heads prevailed and Republican leaders pulled back, at least temporarily, from forcing a vote on a revamping of the state’s approach to reapportionment. The task of redrawing legislative and congressional district boundaries needs to be done after every census. Done the old way, with intense partisan log rolling and insider deals, reapportionment is about the most political act imaginable. 

The Idaho House of Representatives

On the face of it, the recent reapportionment proposal, pushed by Representative Steven Harris, a Meridian Republican, is a blatant attempt to put the partisan back in redistricting. Harris hasn’t been around long enough to know – he’s in his third term – and like most replacement level Idaho legislators he clearly doesn’t remember what a mess reapportionment was when it was a blatant cutthroat partisan contest, a self-interested slugfest that ultimately reflected poorly on both political parties. 

Harris’s proposal, pulled back from a vote in the House early in the week, but still alive and thrashing about would have added a seventh vote to the existing constitutionally mandated citizen’s commission that is designed to force compromise and prevent either party from automatically having the upper hand when it comes to legislators picking their voters instead of the other way around. Voters overwhelmingly approved a change to the state constitution in 1994 to, as much as possible, take partisan politics out of redrawing legislative district lines. As things now stand the citizen’s commission is evenly divided between Republican and Democratic appointees. It’s a setup requiring accommodation and mandate fair dealing. 

Under Harris’s proposal the new member would be selected by a vote of the state’s top elected officials – at the moment all Republicans, of course. That seventh member, beholden to elected Republicans, would automatically become the commission’s decider, the partisan legislative line drawing czar. Such power no person should want or have. 

The scheme would be, as the Idaho Falls Post Registerpointed out in an editorial, a license to gerrymander and to what end, carving up Ada County to thwart recent Democratic gains there? Prevent growing Boise districts from encroaching on traditionally Republican Canyon County? Punish Democrats for having the audacity to hold a whopping 21 of the 105 seats in the state legislature? 

A bit of history is informative. In 1982 a lanky, laconic, litigious lawyer from Coeur d’ Alene by the name of Ray Givens tied the Idaho Legislature in knots with his legal challenges to Republican inspired reapportionment plans. Three different Givens-inspired cases went to the state Supreme Court challenging plans the legislature crafted. Givens won, at least in part because partisan lawmakers put their own interests before the interests of their voters. Givens was awarded substantial legal fees, which for a time the legislature refused to pay, so the crafty litigator slapped a lien on the furniture in legislative hearing rooms. It was a first class mess, but none of the current legislative crowd was around to remember the turmoil. 

More trouble followed in the early 1990s when again partisanship trumped the basic democratic necessity of drawing fair and just boundaries. I’ve long thought that legislative Democrats that year put parochial, and often petty concerns about protecting a handful of incumbents ahead of attempting to create a number of new, genuinely competitive districts. It was, I am convinced, a turning point for Democratic fortunes in the legislature. 

By 1994 legislators and voters had enough of the partisan games and endless lawsuits and largely took lawmakers out of the line drawing business. The current system is far from perfect and it could be reasonably and responsibly tweaked, but the adjustments require a fine tool, not the partisan sledgehammer Harris, House Speaker Scott Bedke and no doubt most GOP lawmakers came to Boise to pass this year. 

Some Republicans have complained that redrawing legislative and congressional district boundaries should be left to lawmakers who, as former GOP Representative Tom Loertscher said in 2018, “know our districts better than anyone else.” Exactly. And that’s the problem. 

Legislators know enough to add a precinct to their districts that would be helpful in the next election or shed one that might be problematic. They know enough to carve up an opponent’s district or to draw boundaries to punish a foe. It’s not unheard of to intentionally put two incumbents in the same district, particularly if those incumbents are in a party opposite yours. 

Only two things are really necessary for Idaho’s citizen-based reapportionment system to work properly. The first is to have the Republicans and Democrats who appoint the members of the commission select people who will genuinely act in good faith, without a partisan agenda. At a time when political cynicism oozes out of every voter, when elected officials have about as much credibility as aluminum siding salesmen, treating the business of reapportionment as a task above petty partisanship could not be more important. 

Appoint good, honest, fair-minded people to do the job and let them draw lines that respect voters more than protect politicians. 

The second requirement is for Idaho legislators to go find some other long dead bad idea and waste their time on that. Reapportionment isn’t broken, but only legislators can break it. 

—–0—–

GOP, Immigration, Trump

A State of Emergency…

Posted on by mjohnson

The only conceivable path Donald Trump has to re-election next year is to continue to fire up faithful fans by invoking his dystopian view of a nation threatened by an immigrant horde determined to storm the southern border and wreck havoc on America. It is the one constant theme of his presidency and the overriding theme of his State of the Union speech this week, a speech laced with words like bloodthirsty, sadistic, venomous and chilling.

Trump has perfected the politics of resentment, fear and scapegoating that Republicans have been shoveling ever more aggressively toward their “base” since Barry Goldwater invoked “extremism in defense of liberty” more than fifty years ago. 

Donald J. Trump delivers the State of the Union address.

That the image of the “lawless state of our southern border” is at odds with the facts hardly seemed to bother cheering Republicans in the House chamber Tuesday night. Republicans have largely embraced Trump’s resentment theory of politics, which is exemplified by his demonization of refugees and immigrants, while they have simultaneously tied the party’s future to Trump’s frayed coattails. 

The overheated rhetoric about border threats, of course, also clashes with Trump’s claims about the strength of the American economy and his calls for unity, the issue that members of Idaho’s congressional delegation chose to emphasize in their reaction. 

By general consensus of fact checkers the biggest whooper in Trump’s speech was his claim that a border wall built during the George W. Bush administration had reduced violent crime in El Paso, Texas. But, the actual statistics show that violent crime in El Paso – one of the safest larger cities in America – had actually plummeted before the barrier was constructed. Such twisting of reality helps explain why those who represent the border, Texas Republican Will Hurd for example, reject Trump’s wall as a waste of money, an ineffective simplistic symbolic fix for a complex problem. 

The U.S.-Mexican border at El Paso, Texas

While Trump did attempt the rhetoric of bipartisanship in the face of another looming government shutdown over funding the wall he offered no path out of the political dead end he himself has created. He avoided mention of the declaration of a national emergency, a tactic likely illegal and surely to be immediately challenged, but he left that explosive option on the table. 

That Republicans actually tolerate talk of a declaration of national emergency over Trump’s failure to secure a policy objective that he could not accomplished when his party controlled Congress is Exhibit A in how completely the GOP has abandoned common sense, old fashioned conservatism and the Constitution. South Carolina Senator Lindsey Graham recently actually said Trump “must” invoke emergency powers to construct a border wall “if the White House and Congress fail to reach a deal.” 

Idaho Senator Jim Risch also seems resigned to a Trump strategy that will include a national emergency. Risch predicted recently to KBOI radio’s Nate Shelman that the president’s Constitutional overreach was likely to happen, and apparently that is just fine with him. 

“I think that the President has figured out that (House Speaker) Nancy (Pelosi) is not going to give the President a dime for the wall,” Risch said. “They hate this president so badly, that they won’t do anything for him, or give him anything that makes it look like a victory, so they are not going to vote for it. They’re happy with the shutdown.”

That is typical of Risch’s constant partisan gaslighting – the super partisan blaming others for partisanship – as well as his acquiescence to all things Trump and it begs the question conservative columnist George Will asked recently about Graham and could have asked about Risch. 

“Why do they come to Congress, these people such as Graham,” Will wrote recently. “These people who, affirmatively or by their complicity of silence, trifle with our constitutional architecture, and exhort the president to eclipse the legislative branch, to which they have no loyalty comparable to their party allegiance?”

Once again history provides some perspective if we’re willing to understand what is at stake. In the early 1970s, in a true bipartisan effort, Senators Frank Church of Idaho, a Democrat, and Charles Mathias of Maryland, a Republican, worked for months to craft legislation – the National Emergencies Act – ensuring that Congress and not a president will define and supervise a true national emergency. The two senators co-chaired a Special Committee on the Termination of National Emergencies, determined to unwind generations of presidential emergency declarations dating back to the Great Depression. In their view such open-ended exercise of one-person power created vast opportunities for Constitutional overreach by the kind of president the nation now suffers. Their subsequent legislation passed overwhelmingly in the House and unanimously in the Senate. 

Senators Frank Church of Idaho

Church and Mathias, apropos of the current moment, were, as constitutional scholar Gerald S. Dickinson wrote recently, “acutely aware of and sought to prohibit a future president from taking advantage of the emergency powers for partisan and policy purposes.”

In testimony before a Senate committee in 1976, Church said the president “should not be allowed to invoke emergency authorities or in any way utilize the provision of [the National Emergencies Act] for frivolous or partisan matters, nor for that matter in cases where important but not ‘essential’ problems are at stake.” He might have been talking about “the wall.” 

Church, as his biographers note, believed containing a president’s ability to invoke a national emergency was one of the Idahoan’s proudest moments, an affirmation that Congress, armed with the Constitution, can and should stand against the overreach of a would be autocrat. 

We shall see where all this is headed, but make no mistake Congress can halt the national emergency nonsense and doing so would be a profoundly “conservative,” not to mention Constitutional thing to do. 

As for Risch and others like him in Congress don’t expect them to protect congressional prerogatives or stand up to a demagogue. When he recently became chairman of the Foreign Relations Committee, a position Church once held, he proudly proclaimed that he would be no Frank Church. On that much, at least, his is absolutely correct. 

(Note: This piece originally appeared in the Lewiston (Idaho) Tribune.)

—-0—-

Economy, Federal Budget, Taxes

Old GOP Con Runs out of Steam…

Posted on by mjohnson

When Oregon Republican Congressman Greg Walden went to Bend, Oregon recently for his first town hall meeting there in two years he came armed with what he must have thought were two sure fire applause lines. 

Walden, a widely respected Republican and until Democrats recaptured the House of Representatives last November the chairman of Energy and Commerce Committee, is a lot like Idaho Congressman Mike Simpson. They were among a tiny handful of Republican House members who split with their party and the president on the issue of the recent government shutdown. When Walden reminded 400 of his constituents gathered in a central Oregon high school auditorium that he had voted with Democrats to reopen the government he got a healthy round of applause. 

Oregon GOP Congressman Greg Walden at a town hall in Bend in January. (OPB photo)

But when Walden tried to pivot to a key GOP talking point it didn’t go so well. “So, tax cuts,” Walden said, ”It is no secret I’ve supported them. And I think they’ve had a strong effect on the economy—” but here the crowd took over, interrupting the congressman, as Oregon Public Broadcasting recorded, with “a chorus of boos and heckles.”

Walden, in Congress since 1998, was left to say: “OK, let’s try and be respectful.” The old, sure fire GOP applause line of “every tax cut is good for you” may finally have reached its sell by date. It just doesn’t seem to be working for Republicans in part because they have handed huge windfalls – again – to the super wealthy and big corporations, windfalls that have directly contributed to skyrocketing deficits and deepened worry about the strength of the economy. 

The prediction by virtually every Republican elected official that the $1.5 trillion tax cut would spur investment, job growth and wages has turned out to be just a political talking point rather than some kind of economic miracle. “There hasn’t been a huge surge in response to tax reform,” said Eric Zwick, a professor at the University of Chicago Booth School of Business. What did boom were corporate stock buy backs. 

Ian Shepherdson, the chief economist at Pantheon Macroeconomics, told CNN Business, that he saw “no evidence at all” that the tax cuts have lifted business spending above what would have happened anyway.

A survey of American businesses published this week by the National Association of Business Economics(NABE) found that 84 percent of businesses surveyed indicated that the big tax cuts had “not caused their firms to change hiring or investment plans.” 

Meanwhile, the deficit grows and, no, the tax cuts don’t pay for themselves. The Congressional Budget Office (CBO) estimates a $900 billion deficit this year, growing soon to $1 trillion and reaching that number faster than CBO had been predicting. 

Financial writer Jim Tankersley put an exclamation point on the trend recently when he noted, “If growth fades in the coming years — as many economists believe it will — the cuts could exacerbate the deficit even more.”

It is a complicated and at times very cynical story about how cutting taxes, particularly for the most wealthy, became a bedrock principle of Republican politics. Republicans have beaten Democrats over the head with “tax and spend” labels at least since the 1970s, but it wasn’t always so. Dwight Eisenhower actually believed in rather than just talked about balancing budgets and he insisted that the government had to have the revenue to keep the public books in the black. 

More recently rank and file Republicans – the Idaho delegation comes to mind – has mastered the political jujitsu of advocating huge tax cuts for those at the top of the economy, while preaching the need for balancing the budget. And now that the GOP has a president who seems to care less about fiscal responsibility and has lost control of one house of Congress Republicans are against talking about balanced budget amendments. 

Senators Mike Lee of Utah and Charles Grassley of Iowa, both of whom voted for the tax cuts, actually had the hutzpah to introduce balanced budget legislation recently. Lee said, presumably with a straight face, “As our federal debt continues to rise at an alarming rate, the least we can do is require the federal government to not spend more money than it has at its disposal.”

One reason the old tax cut then deficit handwringing game has worked so well for Republicans is that the tax code is complicated, indeed downright eye glazing to many. It’s even difficult for many CPAs to navigate the exemptions and loopholes, but the simple language of cutting taxes is easily understood, except perhaps when the fuzzy logic and dodgy math finally loses its political power. 

Before last November’s mid-term election Republicans knew from their own polling that they had lost the messaging battle over their tax cut. Bloomberg News obtained internal GOP survey results that confirmed – by a 2-to-1 margin — 61 percent to 30 percent — that voters saw through the hype and knew that “large corporations and rich Americans” benefited over  “middle class families.” That explains why Greg Walden got hooted down at his town hall recently and why you no longer hear Mike Crapo, Jim Risch or Simpson say much about the “signature” accomplishment of the first two years of the Trump Administration.

Graphic: Institute of Taxation and Economic Policy

More and more the tax debate in American politics is going to be shaped by fundamental issues that voters do seem to understand. Economic policy, including repeated tax cutting for the very wealthy, has for the last generation contributed to a hollowing out of the middle class, a flat lining of income growth, creating vast and growing disparity in wealth and stifling opportunity.

In another recent survey a sizeable majority of Americans now say that “unfairness in the economic system that favors the wealthy” is a bigger problem than “over-regulation of the free market that interferes with growth and prosperity” Among young Americans that belief is even more surely held. 

Ironically, by embracing a candidate who refused to release his own tax returns and gleefully oversold his tax cut, Republicans may have finally lost the political advantage they’ve held on tax issues since the Reagan years. It was quite a con while it lasted. 

—–0—–