Day: January 29, 2011

Egan, Idaho Politics, Journalism, Medicaid

The Moral Test

Posted on by christian

medicaidHard Cases

“The moral test of government is how that government treats those who are in the dawn of life; the children, those who are in the twilight of life; the elderly, and those who are in the shadows of life, the sick, the needy and the handicapped.”

The quote is most often attributed to the liberal icon Hubert Humphrey and dates to a time when there was a broad consensus in American life that government had a very precise role to play in trying to improve the plight of those fellow citizens “in the shadows of life.” The lingering Great Recession more than ever has called that role of government into question and, at the same time, made Hubert’s eloquent quote more relevant than ever.

A massive human hurt is unfolding in nearly every state as governors and state legislators contemplate unprecedented reductions in spending on various services paid for at the state level by Medicaid. In states like Idaho, all the easy stuff has been cut. Now the real pain begins, as illustrated by the estimated 1,000 Idahoans who showed up on Friday, some in wheelchairs, to show state legislators, more eloquently than words ever could, just what the American social safety net really means to real people.

With the 50 states collectively facing a budget gap estimated at $125 billion, the New York Times reports today that Medicaid is “ripe for the slashing” from New York to California, from Idaho to Texas. The times are tough – very tough – but I doubt that even tough-minded, fiscally conservative legislators can live with the implications of ending services for a guy in a wheelchair or an 8th grader with autism.

In Idaho, 20 lawmakers, the members of the powerful Joint Finance-Appropriations Committee (JFAC), make most every spending decision for the rest of the 85 members of the legislature. It is an awesome power and responsibility. The committee has co-chairs, Sen. Dean Cameron and Rep. Maxine Bell, and no one has ever credibly accused these experienced lawmakers of being big spenders. They run a tidy ship and one has to be impressed with the diligence they and their committee have lavished on the hard choices the state faces with both Medicaid and education. Cameron and Bell deserve a lot of praise for showing the political courage to open up the committee to those thousand people who came calling on Friday. It had to have been a sobering experience for anyone paying attention.

Here’s a fearless prediction. Arguably the most conservative legislature in the nation won’t be able to make the $25 million in Medicaid cuts that Idaho’s governor has proposed. It will take a while yet for the reality to sink in, its still early in the legislative process, but Friday was an important day. Not only did the thousand show up, but the budget numbers that have been in dispute since the first day of the 2011 session just gained some clarity and not in a good way.

All this will eventually lead to a frantic search for some barely acceptable source of new revenue to help plug the budget holes. The legislature will come to embrace, in tried and true fashion, the method of patch and scratch tax policy making. Some how, some way, Idaho’s very conservative legislature will “find” some new revenue to avoid these awful choices.

It won’t be easy, and people elected never to raise taxes will anguish over the choices, but it will happen I think. Idaho’s lawmakers have come face-to-face with their fellow citizens who really do, through no fault of their own, live in the shadows. In the end, it will not really be much of a political test. No one is likely to lose an election by making a vote to preserve home care services for an elderly, wheelchair bound neighbor. It will be quite a moral test, however, for lawmakers who infrequently see so clearly the impact of their votes.

Baseball, Christie, Economy, Politics

Now We Know – Maybe

Posted on by christian

finance-crisis-photo1Legislate Then Investigate

The commission investigating the causes of the “worst economic crisis since the Great Depression” has issued its report and – big surprise – the group split along partisan lines. Democrats issued a majority report, while Republicans offered their own take on who and what was to blame for the Great Recession; the recession that is technically over, but still seems to hang around like a relative who just doesn’t know when to leave once the Thanksgiving dinner is over.

One of the better bits of analysis of the huge report is from former Bush speechwriter David Frum.

Frum writes: “The report…argues that everything that people needed to know was there to be known. The crisis was not a ‘hurricane’: It was more like a housefire in a home where people routinely smoked in bed.”

And there’s this: “Americans withdrew $2.0 trillion in home equity between 2000 and 2007. At a time of stagnating incomes for most Americans, the housing boom financed the appearance of economic progress – one reason government was so reluctant to act. Minus the housing bubble, I doubt very much that President Bush would have been re-elected in 2004.“

If you really want to get into this analysis, here are some terrific charts that help to break up the hard facts into somewhat understandable chunks.

One of the striking conclusions you reach in reviewing this new report and in reading the mountain of writing that has been produced in books and articles is that many of the so called Titans of Wall Street had, at best, a weak grasp on the facts of the situation facing the economy, not to mention detailed knowledge of what was happening in their own institutions.

One juicy headline from the Commission’s work is the admission by Federal Reserve Chairman Ben Bernanke, an academic scholar of the Great Depression by the way, that 12 of the 13 major Wall Street financial firms were at the very brink of failure late in 2008.

Unfortunately the work of the Commission, tainted by the lack of political consensus, is likely to take us no where in particular. The hopes that a rational, coherent explanation of what cause the economic collapse would lead to a careful reassessment of whether more regulation is needed, whether the biggest of the big banks are too big, etc. just hasn’t happened.

In fact, unlike the justly celebrated Pecora Commission in the early 1930’s that lead to the creation of the Securities and Exchange Commission and the passage of banking regulation that, seems to me, served us pretty well for the rest of the century, Congress legislated before the Commission reported. Hope they got it right.

Here is some sobering news for the week just ending, the week that saw the Dow top 12,000 and in which it was reported that a Wall Street hedge fund manager personally made $5 billion in profits last year, “Our financial system is really not very different today in 2011 than it was in the run up to this crisis.”

That quote comes from one of the commission members, Byron Georgiou, who spent the last year trying to understand why we came so close to complete economic disaster; a disaster that has done so much short- and long-term damage to so many people.

Here’s hoping we aren’t setting ourselves up for an even more devastating Round Two.