Archive for November, 2012

Know When to Hold ‘Em

Wednesday, November 28th, 2012

The fiscal cliff is the first test of Obama’s second term.

Here’s where it stands right now.

Staffs from both the White House and Republican leaders in the House and Senate have been working since the election to determine if there is any middle ground.

The problem is that Republicans appeared so confident that Romney was going to win, that they didn’t have a plan B. They were prepared to simply renew the Bush tax cuts for everyone and kick the debt can down the road with Romney in White House. Instead, they now have to deal with a newly popular President and a majority of Americans who support raising taxes on the wealthy.

The problem is that the Republican plan to limit deductions, doesn’t generate enough revenue (at least from high income tax payers) to replace what would come in just by letting the Bush tax cuts expire.  Also if deductions were limited, charities would likely be hardest hit.

As an aside, the whole concept that the economic impacts vary based on the type of tax increase is hard to swallow. If tax bills go up and that’s a bad thing, then how can there be any difference. And if the economy can survive raising tax bills from limiting deductions, why wouldn’t it also survive from a similar simpler increase in rates?

As that realization is dawning on the American people, the fundamental bargaining position of Republicans is eroding. The Republicans have said that they feel that they have leverage in these negotiations because if the country goes over the fiscal cliff and the economy suffers, Obama will be blamed.

The Obama administration, however, has positioned this differently in the minds of voters. What they have said is that Republicans would rather raise taxes on everyone in order to avoid raising taxes on the wealthy. They have already trotted out data to support the claim that a middle class tax hike will damage the economy by reducing consumer spending. They have trotted out billionaires and small business owners who have said that they are WAY more concerned about the economic impacts of middle class tax increases. The White House has also pointed out that there is a bill before the House right now which extends only middle class tax cuts. Obama challenges Republicans to pass that bill today while the rest of spending reductions are worked out. Obama only needs 17 Republican House votes to pass it. Some Republicans have already said that if Boehner brought the bill up, it would pass.

Some House Republicans are already saying that the House should give Obama the middle class tax cut that he is asking for and then hold him accountable for the economic collapse that they’ve predicted will occur.  This strategy also provides them some political cover since the only thing that they voted for was the middle class tax cut, rather than voting for a tax hike on the wealthy.

The problem that others have with this strategy, however, is that it would be perceived as a clear win for a President that they detest. It would also undermine their claim that this President can’t lead and is ineffective. And if the predicted economic collapse from raising top tax rates fails to materialize it will further weaken Republican prospects in 2014.

What is also interesting is what a low profile Paul Ryan has been keeping since the election. I believe he also knows that this is a losing proposition and would rather have it all fall on Boehner’s shoulders.

That only further confirms that a deal is going to get done. At the very least, it will involve passing the Senate resolution to extend the middle class tax cuts for another year, approving another debt ceiling raise, and kicking spending cuts down a road until the new congress is sworn in.

Everybody wins because the Republicans live to fight another day.

You gotta know when to fold ‘em.

Change and Hope

Wednesday, November 14th, 2012

To change is difficult. Not to change is fatal.
William Pollard (Quaker Author)

A conservative is someone who stands athwart history, yelling Stop, at a time when no one is inclined to do so, or to have much patience with those who so urge it.
William F. Buckley, Jr.

President Obama ran on a platform of hope and change. Let’s see what he has delivered.

The most obvious change is that we elected an African American president twice in a land that 150 years ago enslaved African Americans and as recently as 50 years ago still enforced segregation. That single change sent more reverberations through our culture than anything else that Obama did. Extremist racists groups grew. As a society, we had to confront the fact that even though we did elect a man of color to the White House, we have not yet overcome our racist history.

We passed and ratified a universal health-care system. We saw the first female Speaker of the House, the first Hispanic Supreme Court Justice, and the first openly gay member of the Senate. We stopped a Great Depression, rewrote the nation’s financial regulations, and nearly defaulted on our debt for the first time in our history. Connecticut, Iowa, Massachusetts, New Hampshire, New York, Vermont, Maine, Maryland, Washington and the District of Columbia legalized gay marriage, and the president and the vice president both proclaimed their support. Colorado and Washington legalized marijuana. We killed the most dangerous terrorist in the world and managed two wars. We’ve seen inequality and debt skyrocket to some of the highest levels in American history. We passed a stimulus and investment bill that will transform everything from medical records to education and began a drone campaign that will likely be seen as an epochal shift in the way the United States conducts war.

We can disagree over the value of these changes, but from the perspective of history, I don’t think anyone will dispute that these are all milestones.

The fact that they have been coming so fast, also tends to minimize our perception of how dramatic these changes have been. The stimulus programs, for example, were some of the largest one-time infrastructure investments in our history. The Affordable Care Act is the most ambitious effort to move American health care away from fee-for-service and towards a pay-for-quality paradigm ever mounted. Most experts agree that our best hope in slowing the growth of healthcare spending is in changing this fundamental healthcare business model.

We are also sometimes blinded by the moment and lose the perspective of history. Such is the current political conversation regarding “makers” and “takers”. The fears being expressed by conservatives are that as government’s role increases, the number of those dependent on government assistance “takers” will also increase and reduce the number of “makers”. The underlying assumption is that the life of a “taker” is much easier than the life of a “maker”.

The reality, if you take a more dispassionate look at history, is that we are in an era of unparalleled “making”. Fifty years ago the government regulated the price and route of every airplane, every freight train, every truck and every merchant ship in the United States. The government regulated the price of natural gas. It regulated the interest on every checking account and the commission on every purchase or sale of stock. Owning a gold bar was a serious crime. The top rate of income tax was 91%. Phones had to be rented from the giant government-regulated monopoly. There was a draft and the major concern among intellectuals was the country’s stultifying, crushing conformity. You have to look no further than the historic gap between rich and poor to appreciate that we are in a literal “golden era” for “makers”.

There is a theory in evolutionary biology called “punctuated equilibrium.” It holds that most species don’t change much for long periods of time, but then they change dramatically, in rapid bursts, over geologically short periods of time.

Political scientists Frank Baumgartner and Bryan Jones have argued that this same theory applies to politics. Typically, politics is held in stasis, with little progress being made in taking down the barriers to progress. But when change does come, it’s not a steady process of incremental advances but a breathless flurry in which the barriers give way all at once.

Historians, looking back from more quiescent periods, will marvel at all that we are living through. Activists, frustrated at their inability to shake their countrymen out of their tranquility, will wish they’d been born in our time when things like we are seeing were actually getting done.

The Hope is that all of this change will leave us in a better place than the one we came from. As a progressive, this is something that we look forward to because we are optimists. At the same time, I can appreciate that conservatives are terrified, pessimistic about the future, and nostalgic for the past of selective memory. It those dark fears of change that create this vast gushing conspiracy theory Eco culture where every anxiety is confirmed, every half-truth amplified, and every imaginable nightmare realized. A whole industry of fact-checkers has emerged because so many have lost the ability to tell the difference between truth and fiction.

Fortunately, we also have elections. This one reminded us that the majority of voters are rational, trustworthy, and optimistic. That is the triumph of hope for the future over the anxiety that comes from change.

Why are you still arguing with me?

Sunday, November 11th, 2012

I have to admit that I have been amazed that those who opposed Obama are still so deeply invested in the fantasy that somehow both of his elections were stolen.

Bill O’Reilly claimed that Obama voters were bribed because Obama gave them “stuff”.  Karl Rove said Obama “suppressed the vote” by making Romney unlikeable.  Donald Trump got his obligatory five minutes in the sun when he called for a revolution and said, “This election is a total sham and a travesty. We are not a democracy!”  This had led a whole series of internet conspiracy theories around voter fraud.

Republicans simply refuse to believe that white men are no longer in charge.  It reminds me of the quote from the film Peggy Sue Got Married when Nicholas Cage was shocked the Peggy Sue was no longer interested in him.

Why is everything an argument with you? – Look! I’ve got the hair. I’ve got the teeth. I’ve got the eyes. Peggy, look outside that window. I’ve got the car. I’m the lead singer. I’m the man. Why are you arguing with me?

The fact is that Obama has now won two national elections fair and square   he didn’t need the help of the Supreme Court or anybody else.  He did it the old fashioned way, which was to build a winning coalition of women, minorities, highly educated professionals, and young people.  Then he used a highly sophisticated ground game to get out the vote.

He was able to define the terms of this election by changing it from a referendum on his past four years to a choice between him and his opponent.  The American people had a chance to compare all of the crap that had been thrown against this President the past four years with the character and integrity of Romney.  They overwhelmingly picked Obama.

For those tempted to suggest that the popular vote didn’t reflect the electoral vote, here a cartogram of the map of the United States based on population.

You can see that if this had been an election where the popular vote determined the winner rather than the Electoral College, the results if anything would have been more dramatic.  That’s because even though neither campaign chose to focus on the most popular states, they still ended up solidly in Obama’s column.  Imagine what effect a big “get out the vote” effort could have had in California and New York.

Liar’s Poker

Thursday, November 1st, 2012

There’s a popular card game where everyone draws a card, places it face out on their forehead without looking at it, and then bids. Everyone can see all other cards except their own. If you’re in the proper state of mind, it can be a lot of fun because everyone is in the same situation, but some are willing to ignore that fact and bid as if they know something that somebody else doesn’t.

We’ve got a similar situation playing out in Ohio in this year’s election.

The Romney campaign spun a couple of whoppers in an attempt to change the landscape in Ohio. Their first claim concerned Chrysler expanding their manufacturing capacity in China. Romney suggested that expansion in China would mean potential job losses at the big Jeep plant in Toledo. Not only did this claim fly in the face of Chrysler’s announcement a month ago that they were going to invest $500M in the Toledo Jeep plant and add 1,100 jobs in 2013, but Chrysler CEO Sergio Marchionne felt compelled to weight in personally. “Chrysler Group’s production plans for the Jeep brand have become the focus of public debate,” he said in a statement on Tuesday. “I feel obliged to unambiguously restate our position: Jeep production will not be moved from the United States to China,” he continued. “Jeep assembly lines will remain in operation in the United States and will constitute the backbone of the brand. … It is inaccurate to suggest anything different.”

Rather than pull their ad, the Romney campaign doubled down with a radio ad which suggested that GM is taking a similar path.

“We’ve clearly entered some parallel universe during these last few days,” GM spokesman Greg Martin replied. “No amount of campaign politics at its cynical worst will diminish our record of creating jobs in the U.S. and repatriating profits back to this country.”

“At this stage,” Martin said, “we’re looking at a Hubble telescope-length distances between campaign ads and reality.”

So the Romney campaign is playing their own form of liar’s poker. They are holding up a statement that both GM and Chrysler have said is false. They are claiming that it is true in an effort to gain some political advantage in the state that was hard hit by the 2008 recession, is just now starting to recover on the strength of auto manufacturing, and is likely to decide the 2012 election.

We’ll find out soon enough whether this is going to work for them, but the polls reveal some interesting statistics.

Obama holds a 9 point edge in the recent Quinnipiac University/New York Times/CBS News Swing State Ohio poll on who is more trustworthy. But he only holds a 5 point edge among the same set of voters on their choice for president.

Obama has even a larger lead on the question of who cared more about voters’ problems.

So my question is who are these 4% – 15% of voters who are willing to vote for someone that they readily admit is less trustworthy and empathetic?

If you can answer that question, you will also have an answer for why Romney feels he is going to be able to win with a Liar’s Poker strategy.  You may also have some clue into why it is so difficult for Obama (or maybe anyone) to lead our deeply divided country.