Courts Decide

July 3rd, 2015

The Supreme Court recently did what they are empowered to do – make decisions based on their best interpretation of the constitution.

The Constitution provides for an independent judiciary for a reason. We are a nation of laws where the power of the majority does not trump the rights of the minority. Our federal judges are appointed to reduce political influence.

The court also decides issues that we can’t resolve at the ballot box.

During this time of deep political polarization, every decision produces a backlash of second guessers. The same court they agreed with yesterday somehow betrayed them today. You’ll likely see some of that across the Internet with appropriate doomsday predictions.

Americans deserve leadership that can actually fix our broken health care system, and they are certainly not getting now from Washington, DC. Jeb Bush

From the beginning, it was clear that ObamaCare would fail the American people and this has proven to be true across the country and in Wisconsin. Scott Walker

The reality is that while not perfect, Obamacare is meeting its goals. Over 10M insured and the healthcare growth rate has slowed to its lowest rate in decades. This despite the fact that 25 Republican states have refused to expand Medicare. Also NOT ONE Republican candidate has produced a detailed replacement plan that can be scored against Obamacare.

I will not acquiesce to an imperial court any more than our Founders acquiesced to an imperial British monarch. We must resist and reject judicial tyranny, not retreat. Mike Huckabee

This decision will pave the way for an all out assault against the religious freedom rights of Christians who disagree with this decision. This ruling must not be used as pretext by Washington to erode our right to religious liberty. Bobby Jindal

The states are the proper place for these decisions to be made, and as we have seen repeatedly over the last few days, we will need a conservative president who will appoint men and women to the Court who will faithfully interpret the Constitution and laws of our land without injecting their own political agendas. As a result of this decision, the only alternative left for the American people is to support an amendment to the U.S. Constitution to reaffirm the ability of the states to continue to define marriage. Scott Walker

What is funny is that the founding fathers created the judicial branch to protect the people from an imperial exec and legislative branch. Also at the time of the decision, 39 states had already approved gay marriage.

Those that complain about the court being politicized, recommend packing the court with conservative justices as the remedy. Yet, it was supposedly conservative justices who participated in the majority in both cases.

Then there were the appropriate predictions of the apocalypse.

Santorum said stopping gay people from marrying was about “the survival of our country.”

Sen. Ted Cruz said it was “the darkest 24 hours in our nation’s history.”

Santorum might be correct if the country were exclusively populated by gay men, but it’s not. We are, in fact, in the midst of a baby boom. So clearly there are plenty of people still willing to contribute to the next generation even if that generation includes some married gay people.

As far as dark hours, at least from an existential perspective, this one isn’t very high on the list. Pearl Harbor, 9/11, the murders of the Kennedy’s, MLK, and Licoln; the Great Depression, the Great Recession, the Civil War, and Valley Forge all come to mind well before we get to this most recent SCOTUS decision.

Here’s what was actually decided.

Affordable Care Act The dispute was over six of the 363,086 words in the law. The part of the law said that insurance purchased through “an exchange established by the state” qualified for subsidies. Narrowly interpreting the law in this fashion, according to the court, led to many more serious contradictions throughout the rest of the law. The court decided (6-3) that Congress intended ACA subsidies to apply regardless of how insurance was purchased. The court encouraged Congress to be more careful in the future and left open the option for future legislation on the subject.

Same Sex Marriage The court decided (5-4) that adults have the constitutional right to marry. States can’t limit that right based on sexual preference. This decision doesn’t affect state laws regarding children, monogamy, or bestiality. It doesn’t affect who churches decide to marry. It doesn’t compel any business to change their practices. It only requires states to provide marriage licenses to all adults who apply for them and meet the requirements of that state (not already married, no sexually transmitted diseases, etc.).

There are certainly those who feel that this decision violates their religious beliefs. I would only remind them that similar religious arguments were used to support slavery, oppose female suffrage, support segregation, and oppose interracial marriage. Very few legitimate churches support those views today.

The courts aren’t perfect, but they do serve a vital role in our democracy. While I welcomed these decisions, I too was deeply disappointed by others (e.g. Citizens United). We all have the right to disagree, but we also have the responsibility as citizens to respect this constitutional process. If you want change, vote.

Money Corrupts

June 19th, 2015

One example of modern day corruption is the estate tax repeal that the republican house recently passed.

I’m working on another post that digs into the whole topic of corruption in more detail, but here’s a quick overview to provide some historical context to this discussion.

The framers of the constitution felt that corruption was the single largest threat to democracy.

If you remember your history, the United States was not the first democracy. That was Athens. But democracy was still a novel idea when the colonies decided that they had to be independent of the King. One of the arguments against democracy was the natural instinct of self-interest. The other argument was that the rich and powerful in Europe had been able to undermine democracy. The livelihoods of so many people depended on the good graces of royalty, for example, that few opposed their rule.

The framers, however, believed that individuals would value liberty so highly that civic virtue would trump self-interest. They were not so naïve, however, as to assume that this willingness to sacrifice for the greater good would continue once those who experienced the revolution passed on. So they regarded anything that would subvert civic virtue, or even have the appearance of self-interest, as corruption.

It’s through that lens that I’d like to look at the repeal of the estate tax. This isn’t to suggest that this is the only example of modern corruption. It’s just an obvious one.

The estate tax charges the wealthiest .2% of American households when they pass on amounts in excess of $5.4M in the case of individuals and $10.9M in the case of couples to their heirs.

This estate tax has been part of the US infrastructure since 1797. Its explicit purpose is to prevent the sort of corruption that the founders associated with a permanent aristocracy. By making it difficult for one generation to share their wealth with another, it discourages the formation of families with enough money to damage civic virtue. Specifically the concern was that our representative democracy could erode to an oligarchy if the government didn’t specifically take steps to prevent the concentration of wealth in the hands of a few. James Madison warned that inequality in property ownership would subvert liberty, either through opposition to wealth (a war of labor against capital) or “by an oligarchy founded on corruption” through which the wealthy dominate political decision-making (a war of capital against labor).

Here are some of the justifications leading Republicans have used for eliminating the estate tax.

House Ways and Means Committee Chairman Paul Ryan, R-Wis. claimed that the estate tax is “absolutely devastating” to family farms, and further he claimed the repeal would remove “an additional layer of taxation” from assets that had already been taxed.

“It sounds to me like there’s a lot of wealth envy in this country,” Rep. Virginia Foxx, R-N.C. The bill abolishing the estate tax, she said, “will draw a line in the sand.”

The facts are that only 120 small businesses and farms (100 of them large farms) were hit by the estate tax in 2013. And for that tiny number affected, there are all sorts of provisions already in place to soften the blow: low valuation rules, delayed tax payments and other breaks and discounts. In fact some have characterized the estate tax and a fine for those who failed to pay their accountant, since careful planning can generally avoid this tax.

Also 55% of the value of estates worth more than $100M, according to Americans for Tax Fairness, are unrealized capital gains that have never been taxed. If the issue were double taxation, there is a much better way of addressing the issue than simply eliminating the estate tax.

Besides the obvious risks of increased concentration of wealth in the hands of a few, there are real budget implications of repealing this tax. The tax will bring in $269B over the next ten years. Republicans are going to say that putting this money back into the hands of the wealthy will increase other tax revenue by causing economic growth, but there are no facts to support this claim. What the data shows is that tax cuts to the rich only reduce the middle class, increase the ranks of the poor, weaken our economy, and increase our debt.

To put this gift to the wealthy in perspective, here are some of the other things that could be done with that amount of money.

  • Making community college free for everyone for ten years cost $60B
  • Making four year college free for all that qualify would cost an additional $15B
  • Plugging the current highway trust fund deficit which would support infrastructure improvement costs $164B over the same time period

If at this point you are asking what does all of this have to do with corruption, the house members who voted for this bill received a combined $56M in campaign contributions during the last election cycle from special interest groups specifically advocating the repeal of this tax.

This may not meet the narrow standard of corruption that the Supreme Court used to justify the Citizen’s United case, but it does justify the fears that our framers had regarding the corrupting influence that money has on our democracy.

Climate Change Infallibility

June 16th, 2015

Here’s how twisted the climate change debate has become.

The Pope feels that he has to weigh in.

His opinion?

Climate change is real.

Climate change is a moral issue because of the damage being done to the poor.

His formal remarks on the subject will be published in an encyclical due later this month. Encyclicals are letters that Popes send to Bishops. The purpose is to instruct the Bishops on the Catholic Church’s position on particular issues. This is serious stuff. It is not an invitation for dialog. It is a statement of how this particular issue is going to be taught by the Bishops going forward. The Pope expects all good Catholics to follow the church’s teachings.

The reaction on this side of the ocean is incredible.

Catholic republican conservative Rick Santorum has built his political career on his religious beliefs. He opposes abortion and same sex marriage. On ISIS, he believes that the US should “bomb them back to the seventh century.” He believes that immigration is contributing to economic problems because immigrants are taking jobs from citizens. As a result, he wants to reduce LEGAL immigration by 25%. He opposes any path to citizenship for illegal immigrants. Finally, he rejects scientific evidence that human behavior is causing climate change. He walks pretty much straight down the right wing conservative Republican political platform while wrapping it all in a mantle of Catholicism.

The problem is that conservative Catholics also believe in papal infallibility. That means that when the Pope speaks on matters concerning faith or morals, it is not only binding for all Catholics, but it is divinely inspired and cannot be wrong.

So this puts Rick Santorum in a difficult spot. Which is more important to him – his religion or his politics? Here’s his response.

I would just say this: The church has gotten it wrong a few times on science, and I think that we probably are better off leaving science to the scientists and focusing on what we’re really good at, which is theology and morality.

Not only does he reject the whole concept of papal infallibility out of hand, but he also questions the Pope’s right to view climate change as a moral issue. Finally he uses the church’s past denial of the scientific evidence supporting a sun-centric planetary system, as evidence that the church isn’t trustworthy when it comes to science. He advises the Catholic Church to leave science to the scientists.

This is the height of hypocrisy. That’s because Santorum’s political position of climate change denial fails to follow his own advice to the Catholic Church. Instead of leaving science to the scientists, Santorum rejects the current scientific consensus regarding the causes of climate change because it conflicts with his RELIGIOUS views.

Here is how Santorum defends calling climate change “a hoax”.

If you leave it to Nature, then Nature will do what Nature does, which is boom and bust

And

We were put on this Earth as creatures of God to have dominion over the Earth, to use it wisely and steward it wisely, but for our benefit not for the Earth’s benefit.

Rick Santorum has no standing in the scientific community. His undergrad degree is in Political Science from Penn State. He got an MBA from Pitt and a JD from Dickenson. Pope Francis, on the other hand, IS a scientist. He has a degree in chemistry and worked as a chemical technician before entering the priesthood. He CAN speak with authority on the science.

He can also speak with authority on the morality of climate change because he is the head of one of the world’s largest religions. He isn’t the first to speak out either. He is one of a long line of Pope’s who have treated climate change as a moral issue.

Environmental protection and the connection between fighting poverty and fighting climate change are important areas for the promotion of integral human development – Pope Benedict XVI

In our day, there is a growing awareness that world peace is threatened … by a lack of due respect for nature – Pope John Paul II

So we have a conservative Republican politician who has so blurred the lines between his political views and his religious views that he can no longer see the difference. He rejects the leader of his church claiming the Pope isn’t qualified to make a scientific judgment because of the church’s opposition to Gallileo – even though the church’s position is motivated by morality. Despite the fact that the Pope himself is a scientist, Santorum dismisses the church’s position as out of step with the scientific community. Then he uses exactly the same Biblical passage that the Catholic Church used to defend itself against the scientific claims of Gallileo, to support his own rejection of the scientific community’s conclusion that human actions are causing climate change.

In other words he tells the church to quit politicizing science and then turns right around to use his own religious beliefs to politicize science.

This raises an obvious question of whether Rick recognizes the Pope as his leader. Here’s what he told a radio interviewer in January.

I mean, it’s sometimes very difficult to listen to the Pope and some of the things he says off the cuff…. I keep coming back to the Pope is the leader of the Catholic Church, and when he speaks as the leader of the Catholic Church, I’ll certainly pay attention. But when he speaks in interviews, he’s giving his own opinions.

Santorum’s rejection of the Pope’s encyclical on climate change is just another example of the hubris of the man. This is a perfect example of the solipsism that appears to infect the right wing conservative movement. There isn’t even the hint of self consciousness in Santorum’s statements even though they are obviously contradictory. That’s because there is only one ideology that he follows – right wing conservatism.

That is his god.

That is his religion.

The fact that he can campaign as a serious candidate only highlights the deep cynicism that pervades the conservative wing of the Republican party.

Fortunately the Bible warned us against these people.

A double minded man is unstable in all his ways James 1:8

Poverty and the Social Safety Net

June 7th, 2015

Here’s a quick recap of what we have learned so far.

Conservatives have developed a set of narratives to explain why our best efforts to eradicate poverty have failed. These narratives all revolve around a central core claim that programs which attempt to assist people in need actually perpetuate that need. That’s because, according to this “logic”, aid of any sort reduces the incentive to work. The foundation of this view is that if the poor were willing to work as hard as the middle class they would quickly join the middle class. Lately there has been another twist to this point of view. If the middle class were willing to work as hard as the wealthy, they would be wealthy too. These views are consistent with the conservative moral foundation that hates that possibility that anyone might be able to “cheat” the system.

A recent study by the Pew Research Center for example found that three-quarters of conservatives believe that the poor “have it easy” because of government benefits. Only 1 in 7 believe the poor lead “hard” lives.

We have gone through a very interesting eight years where a lot of these assumptions were tested.

During those eight years the ranks of the poor swelled as many previously middle class people lost their jobs, their homes, and their savings. They were forced to file for unemployment, food stamps, temporary need to dependent families, and many of the other assistance programs that are the target of conservative scorn.

Now we are finally emerging from this long period of economic decline.

If the conservative theories are correct, those who were out of work for a long period of time and receiving benefits, should be demonstrating some dependence because of the corrupting influence of those benefits. We should be able to see evidence of that dependence in a reluctance to return to work.

One example would be the number of people on food stamps. That should remain high even as the unemployment rate goes down.

Guess what?

The number of people filing for food stamps has gone down at pretty much the same rate as unemployment.

The same thing is true regarding the claim that poor women have children in order to support themselves with the meager benefits provided for mothers with dependents. If that actually was a strategy, we would see the birth rate among the poor go up during times of high unemployment. Instead the birth rate among the poor went down, just like it did in the overall economy.

We’ve also seen that the behavioral effects of poverty cross racial lines. As more poor people fell into poverty over the past 8 years, their families disintegrated too. They saw increases in drug use, violence, and crime. They also experienced declining health. While life expectancy among the wealthy has gone up, life expectancy among the poor has gone down.

The real answer is much simpler.

If you want people to demonstrate middle class values, you have to provide them middle class jobs.

If you want to reduce the ranks of the generationally poor, you have to break down the barriers that institutional racism use to literally wall off poor minority communities from prosperity.

Finally, we have to have an honest conversation about the value of a social safety net in preventing people from falling into poverty. The psychological and physical damage they suffer in that condition can make it difficult for them to recover.

Here are just a few examples from a study by the Federal Reserve.

Poverty is an issue for our elderly. 25% of the elderly depend entirely on Social Security benefits. 50% get more than half their income from Social Security. That’s because 30% of the rest of the population have no retirement savings or plan at all. That same percentage of people report that they went without some medical care over the past year because they couldn’t afford it. 25% reported that they or someone else in their immediate family had experienced some degree of financial hardship over the past year. 47% said that they would not be able to handle an unexpected expense of $400 or more.

That’s why those Republican states who have refused to expand Medicaid continue to put their populations of working poor at a terrible risk. They remain literally one medical emergency away from bankruptcy.

Hopefully all of this will be included in the discussions of income inequality that I hope will be part of this election year cycle.

The poor are not to blame for their condition. We are.

We have created a system that makes it very difficult for those who fall into poverty to ever get out.

We keep the working poor on the knife edge of financial collapse.

We keep the black community imprisoned in economic and physical ghettos with an asymmetrical police and legal system that punishes them for not demonstrated middle class values. Then we are shocked when every ten years or so the ghettos explode in violence and frustration.

The data is there.

The changes are obvious.

All that is lacking is the will for conservatives to overcome their bias and have an honest an open discussion about how to address the root causes of poverty rather than simply blame the poor for their condition.

Institutional Racism

May 15th, 2015

In the previous post, I made the claim that institutional racism in the form of asymmetrical law enforcement and judicial bias were two of the three motivating factors driving the current demonstrations and violence in black communities across the country.

I suspect that some might dispute the claims of asymmetrical law enforcement or judicial bias, but the numbers here are undeniable. Blacks have many more encounters with police than whites on a per capita basis. They get arrested way more than whites. They are incarcerated at a much higher rate for the same crimes. They receive longer sentences for the same convictions. Ferguson was just one example of collusion between city government, law enforcement, and the judiciary to extort money from the black community for petty infractions. That’s institutional racism.

Another aspect of institutional racism created the ghettos where the vast majority of the black population live. These communities not only have substandard housing, but also no jobs and a very low percentage of home ownership.

Home ownership is the middle class wealth engine. Blacks don’t have access to that engine because they don’t have access to the middle class jobs that can support home ownership. They also don’t have access to that engine because, until the 70’s, they were not able to get mortgages for houses in middle class neighborhoods. Federal Housing policies prohibited it. That’s institutional racism.

Ned Resnikoff dug into the history in an MSNBC piece.

Disparities in homeownership are a major driver of the racial wealth gap, according to a recent study from Brandeis University. According to the authors of the report, “redlining [a form of discrimination in banking or insurance practices], discriminatory mortgage-lending practices, lack of access to credit, and lower incomes have blocked the homeownership path for African-Americans while creating and reinforcing communities segregated by race.”

For those of you unfamiliar with redlining, banks had different policies for different parts of the city. Those policies effectively priced black consumers out of white neighborhoods by charging blacks more to purchase a home in those neighborhoods than they would charge a comparable white customer.

This practice began in 1934 with the National Housing Act which established the FHA and the Federal Home Loan Bank Board. This later agency created “residential security maps” which assessed the risk of real estate investments in different parts of major cities. Black neighborhoods were designated high risk and denied funding. This dramatically reduced both home ownership in black neighborhoods as well as commercial investment.

Speculators stepped into the void left by banks, often with the support of local government.

When selling on contract, the speculator offered the home to a black purchaser for a relatively low down payment – often several hundred dollars would suffice. For bringing the home within the reach of a black purchaser, however, the speculator extracted a considerable price. In the Commission on Human Relations study, the percentage increase in the cost of the home from the speculator’s purchase price to that of the black consumer ranged from a minimum of 35% to 115%; the average increase was 73%.

The next step toward the ghettos that we know today was block busting.

After the riots of the 60’s, whites began to leave inner city neighborhoods for the “safety” of the white suburbs. They took their businesses, jobs, and purchasing power with them. Speculators accelerated that white flight through various tactics intended to convince white home owners that black families were moving into their neighborhood. Realtors and speculators were able to purchase the houses at deep discounts and then convert them to multi-family dwellings that generated significantly more income for their owners.

As neighborhoods transformed from predominantly owner occupied low density to predominantly renter-occupied high density, property values declined. Property tax revenues which are based on property values and which fund local schools also declined. As jobs and purchasing power left neighborhoods, the small business services associated with that purchasing power also left. Neighborhoods that once were vital and sustainable, deteriorated. Whites associated this decline with black pathology. It was in fact a logical result of intuitional racism.

During the 60’s public housing projects were also placed in these same segregated economically depressed neighborhoods as a compromise with conservatives who opposed them completely. These projects were doomed from the start because they also failed to address the fundamental issue of jobs. Instead they simply concentrated all of the pathologies associates with poverty in a smaller geographic area. Gangs, violence, and drug use all became associated with the black family experience rather than the underlying economic conditions that were in fact the root of that behavior.

When you wall-off a whole community from access to the wealth building tools of employment, access to capital, and home ownership – they are unable leave their impoverished areas. Their poverty has a whole set of pathologies that accompany it. This cultural dysfunction and deep generational poverty defines life in the prison that our policies built. Conservative Republican leaders starting with Nixon turned this into a political strategy. Nixon was content to simply play on the same fears of whites that made the block busters wealthy. Reagan was the one who expanded the meme that blacks were dangerous. He convinced angry white voters that the blacks imprisoned in the ghettos that institutional racism created are themselves responsible for the conditions under which our government’s policies have forced them to live.

O brother, where art thou?

Pathology Versus Economics

May 8th, 2015

Responses to racial unrest, most recently in Baltimore, aren’t surprising given what we know about conservatives and liberals. Conservatives focus on rioters calling them thugs and feign surprise at the violence. Liberals on the other hand point to asymmetrical law enforcement in white and black neighborhoods and question why cops are killing so many unarmed poor kids.

Here’s a little history to try to figure out what is going on.

This country was founded on slavery. The slave trade in North America grew right along with European colonization. It was written into our founding documents right along with inalienable rights. The United States fought a civil war to force an end to slavery in southern states. That ended two hundred years of institutionalized and constitutional slavery.

A war weary country, however, failed to eradicate institutional racism. Whites successfully regained the political and economic power that they lost briefly during reconstruction. They exercised that power with impunity for another 100 years until the civil rights movement began to win a series of Supreme Court victories. The pinnacle of that movement was the voting rights legislation passed during the Johnson administration.

Coincident with that legislation was widespread racial unrest. During that period of time there were two seminal studies on poverty and racism.

The Moynihan Report in 1965 blamed the violence on poverty. They blamed poverty on pathological and cultural deficiencies in black families. This report shifted the onus from institutions and policies to families. It coined the term “benign neglect” in recommending that government had done pretty much all that it could to. Rights had risen as far as the study’s authors felt they could. Fixing families required an attitude adjustment by government and blacks. Government had to stop trying to supplement poor incomes. Instead government should encourage poor black families to fix themselves.

The Kerner Commission Report in 1968 took a much more scientific approach. It was based on extensive interviews of all those involved in rioting – young black men, shop owners, police, citizens, leaders, and elected officials. That report said the root cause of rioting was institutional racism. The solution to racial unrest was simple and obvious – social justice and economic redistribution. People rioted because they felt oppressed by the police, persecuted by the courts, and taken advantage of by the business community. Provide those same people good jobs, fair law enforcement, and color-blind courts; and everyone will happily live a peaceful law abiding life.

The riots of the 60’s also terrified white people. They fled the cities for the suburbs and took their jobs with them. Nixon and Lee Atwater invented the Southern Strategy in 1968. It played on white fears. Republicans successfully mined white backlash and rage right up until Obama’s election in 2008.

Reagan famously put another twist on the Moynihan report when he claimed that poverty itself was the result of dependence. He invented the specter of the welfare queen living large on the state. He based that characterization in a bi-racial con artist who was hardly a black stereotype. But the narrative was more powerful than the reality, and a whole series of reforms all the way through Clinton dismantled the social safety net for the poor that was part of the Great Society’s War on Poverty.

So what is the reality? Pathology or Economics.

As always the numbers give us some insight.

Let’s start at the same place that Reagan started, with the welfare queen. Everyone is familiar with this claim. Poor minority women bear lots of children so that they can live off government assistance rather than work. Let’s put aside for a moment the fact Clinton eliminated this sort of permanent assistance. There is a much simpler way to blow up this myth. If it were true, we should be able to see increases in the birth rates of poor black families during difficult economic times. We have just gone through the most difficult 8 years since the Great Depression. The birth rate in poor black families plummeted just like it did across the rest of the socio-economic spectrum. In other words, while there may be individuals who successfully defraud the government, aid to the poor does not create a pathological dependence which encourages women to, in effect, “live” off their children.

The great sociologist William Julius Wilson argued long ago that widely-decried social changes among blacks, like the decline of traditional families, were actually caused by the disappearance of well-paying jobs in inner cities. His argument contained an implicit prediction: if other racial groups were to face a similar loss of job opportunity, their behavior would change in similar ways.

If that’s true, we should be able to see the same social disruptions in white families over the past eight years. If you go look at the numbers, it’s there. Lagging wages — actually declining in real terms for half of working men — and work instability have been followed by sharp declines in marriage, rising births out of wedlock, and more across the racial spectrum.

As Isabel Sawhill of the Brookings Institution writes: “Blacks have faced, and will continue to face, unique challenges. But when we look for the reasons why less skilled blacks are failing to marry and join the middle class, it is largely for the same reasons that marriage and a middle-class lifestyle is eluding a growing number of whites as well.”

The pathology of “bad choices” that conservatives have used to blame the poor for their condition is now being replicated in large segments of the poor white population. They have suffered the same economic displacement over the last eight years that blacks have experienced for generations. That includes shorter life spans, increased violence, broken families, increased drug abuse, less education, decreased home ownership, increased financial instability, and increased chronic illness.

Conservatives cluck about the failure of minority communities to adopt middle class values, but those values depend in large part on access to middle-class jobs. Those jobs are simply not available in poor communities and the poor can’t afford to move to where the good jobs are. Instead you have the spectacle of a Detroit man who spends all his non-working hours getting to and from his minimum wage suburban job.

Finally, you have Republican leaders like John Boehner suggesting that the riots in Baltimore are evidence of the “50 years of failed Democrat policies”. While it is clear that he is reaching back to the Great Society, half of those 50 years Republicans were in the White House. So if policies are to blame, that blame should be shared equally by Republicans and Democrats.

The numbers again come to our rescue here. In this case, Paul Krugman.

Federal spending on means-tested programs other than Medicaid has fluctuated between 1 and 2 percent of G.D.P. for decades, going up in recessions and down in recoveries. That’s not a lot of money — it’s far less than other advanced countries spend — and not all of it goes to families below the poverty line.

Despite this, measures that correct well-known flaws in the statistics show that we have made some real progress against poverty. And we would make a lot more progress if we were even a fraction as generous toward the needy as we imagine ourselves to be.

In other words, the problem was not too much money. They problem was not enough money, and perhaps money spend on the wrong things.

So where does this leave us?

The “pathology” that has been the mainstay of Republican pronouncements about race and poverty from Ronald Reagan through John Boehner are not supported by the facts. Instead of dependency, we have predictable effects from job loss, mass incarceration, and economic disruption.

Instead of a post racial society, we have the daily experience of young black men who are targeted by the police and persecuted by the justice system.

Instead of confronting the realities of the living conditions that we have forced the poor to endure, conservatives use the myth of pathology to absolve society from taking meaningful action. The myths of the welfare queen, Willie Horton, middle class values, and personal responsibility allow us to ignore the fact that we have effectively walled off poor communities from prosperity.

Baltimore is a good example. It spent $130M over the last 20 years in an attempt to transform one of its poorest neighborhoods. While well intentioned, 1000 new affordable houses, new schools, and new clinics did not attract the employers necessary to support the families in those new houses. Without jobs, the neighborhood eventually reverted back to the same despair, crime, and drug abuse that every other job-poor neighborhood displays. Just fixing housing, schools, and healthcare, regardless of how much money is spent, isn’t enough.

“Having a well-maintained home doesn’t get at the larger issues that prevent self-sufficiency,” said DeLuca, the Hopkins sociologist. “The labor market and drug markets really destabilized Sandtown.”

The problem is institutional racism reflected in over-zealous law enforcement and lack of opportunity in the only neighborhoods that poor black people can afford to live.

The solution is jobs.

The rest is just myth and the conservative pathology of confirmation bias born of moral fundamentalism.

Gimmicks and Tricks

March 29th, 2015

We do not rely on gimmicks or creative accounting tricks to balance our budget.

This statement is in the introduction of the Republicans 2015 House budget.

This document declares that the most important thing that the country can do is balance the budget.

If you are doing a double-take at this point, so was I. Balance the budget? What about the party that last month said that they should make the poor their top priority. Or the party that said six months ago that the most important thing was to defeat ISIS? Or the party that for the past five years has been trying to repeal Obamacare?

Nope, we are now dealing with the party that says balancing the budget is the most important thing.

So I guess it should be no surprise this Republican budget not only fails to balance, but also includes a spectacular set of gimmicks and creative accounting tricks.

Here’s my list.

Dynamic Scoring – this is the CBO rule change passed by Republicans in September. What this means is that the CBO must now include economic impacts when determining the cost of a particular bill. In the past, the CBO simply projected cost and revenue without any attempt to determine how a particular piece of legislation would affect the economic models that are already in place. Using this new scoring, the Republican budget “gains” an additional $147B in mystery money.

Overseas Contingent Operations – This is a $90B Defense slush fund to allow Republicans claim that they are still abiding by the Sequestration cuts when they really aren’t. To make matters worse, $20B of the $90B is supposed to be offset by future spending cuts which were unspecified.

Obamacare Repeal – Republicans propose to repeal all of the benefits of Obamacare and the taxes that pay for them. The budget assumes that this is a wash, but there are $1T in tax revenues that aren’t accounted for, and the last CBO scoring had Obamacare reducing the deficit.

Missing $500B – The budget claims to save $5.5T over 10 years, but the fine print suggests that Congress is only responsible to find $5T in savings.

Other Mandatory Programs – Republicans cut $1T from this category without specifying which programs were going to be cut and by how much.

Medicare and CHIP fix – This long overdue bi-partisan plan will cost $141B over the next 10 years. It was not included in the Republican budget.

What about the poor?
Those are the people both Mitt Romney and Ted Cruz said should be better represented by the Republican Party. This budget includes deep cuts to food stamps and Medicaid. Rough estimates are that this budget would double the number of Americans without health insurance and that’s before the additional promised $1T in cuts. The stark reality is that there isn’t that much left to cut unless you include Social Security and Medicare.

Spending on government programs other than Social Security and Medicare would fall to 7.2 percent of GDP in 2025 — 40 percent below the average of 12.2 percent of GDP over the past 40 years, and far below the previous post-World War II low (which was 9.4 percent of GDP in the late 1990s). In short, the federal government outside Social Security and Medicare would gradually become a shell of its former self.

Fiscal Responsibility?
During the financial crisis, Republicans pointed at the big deficits and big stimulus programs as irresponsible. In the context of deficits hitting 10% of GDP, the Tea Party took up the cry for a balanced budget.

Today the deficit is 2.7% of GDP, exactly where the Simpson-Bowles deficit reduction committee suggested it should be by 2015. As long as the economy continues to grow at or near 3% a year, the debt as a percentage of GDP will go down without any additional government spending cuts.

Summary
If the Republicans were serious about reducing the debt and balancing the budget, they would not have resorted to smoke, mirrors, and bad math. Instead this is a political document intended to appease the radical right of the party. If they did succeed in passing it, it would never survive the President’s veto. If it did somehow make it into law, Republicans themselves would fail to implement the social program cuts contained in the budget. There are too many Republican senators up for re-election in blue states in 2016.

Instead this budget was best described by conservative Republican congressman Ken Buck.

I don’t know anybody who honestly believes we’re going to balance the budget in 10 years. It’s all hooey.

There you have it – another example of how seriously Republicans take their new responsibility to govern.

Jeb Bush’s Social Darwinism

March 14th, 2015

The effort by the state, by the government, ought to be to try to create catastrophic coverage, where there is relief for families in our country, where if you have a hardship that goes way beyond your means of paying for it, the government is there or an entity is there to help you deal with that. The rest of it ought to be shifted back where individuals are empowered to make more decisions themselves.

This is how assumptive 2016 Republican Presidential candidate, Jeb Bush, summarized his replacement for Obamacare.

While we don’t have all of the details, there is a lot to parse in this particular statement.

At first blush, the discussion of catastrophic coverage is at the heart of the Republican message.

Bush advocates replacing the ACA “with a model that is consumer-directed, where consumers, where patients, have more choices … where the subsidies, if there were to be subsidies, are state administered … where people have more customized types of insurance based on their needs; and it’s more consumer-directed so that they’re more engaged in their decision making, and they have more choices than what they have today.”

This was the same message the Romney presented when asked about healthcare for the poor during the 2012 campaign.

Well, we do provide care for people who don’t have insurance. If someone has a heart attack, they don’t sit in their apartment and — and die. We pick them up in an ambulance, and take them to the hospital, and give them care. And different states have different ways of providing for that care.

That is the healthcare system that we had. One where those who couldn’t afford insurance could receive the most expensive form of care our healthcare system had to offer. Those that attempted to pay those bills often ended up bankrupting themselves. Most of those bills were passed on to those with insurance through higher hospital costs.

Catastrophic Coverage
Catastrophic coverage as envisioned by Mr. Bush is just one step away from this model. The stated goals are to make insurance more affordable by introducing high deductibles and cost sharing. In the minds of conservatives, this makes people more thrifty healthcare consumers, since much of the cost of everyday care is coming out of their pockets. The reality is that high deductible plans in many cases are not much different from no coverage at all. They discourage people from seeking preventative care.

While high deductible plans may flow some additional dollars into the hands of hospitals for the expensive emergency room visits that will result from failure to employ preventative care, it will not mitigate the financial risk of those who have a medical emergency. That’s because, as this graph shows, fewer than half of those who are likely to purchase these plans have the money to pay the deductible if in fact they DO experience a medical emergency that their plan covers.

high deductible

Individual Customization
The second problem in Bush’s unraveling of Obamacare is wrapped in the clothing of “more customized types of insurance based on their needs”. This is another conservative hot botton. They have a philosophical problem with the way that insurance works. They feel that people should be free to purchase only the amount of insurance they feel they need without regard to the risks or costs. They don’t seem to have a problem with Banks requiring homeowners to insure their homes up to a particular standard in order to get a mortgage. But they do have a problem with the government setting minimum standards on the sorts of healthcare coverage insurance companies must offer. Bloomberg explains that government standards preserve large risk pools which effectively reduce the costs for everyone.

Republicans are really saying that people should be free to avoid carrying insurance for problems they don’t expect to have (a bout of depression, maybe, or a stroke that requires rehabilitation) or don’t want to help pay for (pediatric and maternity care for men with no children, say). The former view shifts costs onto the unlucky; the latter shifts costs onto women and parents. Both undercut the purpose of insurance, which is pooling risk. Neither saves money. Yet in the abstract the argument sounds compelling. And it’s going mostly unchallenged.

Single Payor
What IS interesting in Bush’s plan is the suggestion that the government either directly or indirectly is the source, or underwriter of these catastrophic plans. This particular statement goes WAY further than Obamacare toward the single-payor socialism fears that birthed the Tea Party. Under Obamacare, the government does not issue insurance. The insurance comes from private companies. Those companies are regulated, but they ultimately get to set their own rates and determine in which markets they are going to participate and which populations they are going to target. The government only offers to subsidize the cost to purchase that insurance for those who don’t have the means to purchase that insurance on their own.

Obamacare is market-driven. The government works to make the insurance market in every state sufficiently lucrative that consumers in every state have choices. It has no mechanism to compel an insurance company to offer coverage in any particular state. Participation by insurance providers is entirely voluntary.

If the government is going to guarantee that every individual is able to purchase some form of catastrophic insurance at a rate that they can afford, who is going to provide that insurance? Who decides what that rate is? Who decides what the minimum coverage should be? How to do you handle the “free riders”, or does everyone get a minimum plan paid for by the government whether they like it or not? How does Bush plan to pay for all of this? A new tax?

That’s how Medicare works. One plan for everyone paid for by a payroll tax. We don’t require seniors to enroll in Medicare, but 85% of seniors do. Medicare doesn’t cover all expenses, but it does allow most seniors to retire without the worry of having to pay increased medical costs.

Summary
Jebcare is not a REAL plan. It is simply a set of talking points that allow Jeb Bush to appeal to the reptile brain of the Republican Party without actually working out any of the details.

Republicans DO NOT want to offer any kind of subsidized care for anyone. This isn’t an issue of cost or efficiency. Obamacare has already demonstrated that this approach saves money and improves health.

This is about philosophy. Republicans are social Darwinists who feel that poverty is the appropriate punishment for bad decisions made by people or their parents. Disease, in their minds, is just another motivation for making better decisions that should be preserved if we want to have a more responsible society. The rich are the vanguard for this righteous society. Their success is proof of their character.

Those of you who read the Bible, might recognize some similarity to the Pharisees. They felt that poverty and disease were punishments God meted out on the sinful. Jesus rejected that whole philosophy. Instead he reminded his disciples that His work (and the future work of all Christians) was to enlighten the world to a new way of thinking where love is the rule.

And as Jesus passed by, he saw a man which was blind from his birth. And his disciples asked him, saying, Master, who did sin, this man, or his parents, that he was born blind? Jesus answered, Neither hath this man sinned, nor his parents: but that the works of God should be made manifest in him. I must work the works of him that sent me, while it is day: the night cometh, when no man can work. As long as I am in the world, I am the light of the world. Matt 9:1-5

There is obviously a lot of work still to be done.

Reaction to Obamacare Good News

March 10th, 2015

The CBO came out with one of their periodic reports on the Affordable Care Act (Obamacare).

Here is the headline of the report.

The ten year projected cost for the ACA has gone DOWN 11%.

The first reason for that cost reduction is that the cost of insurance premiums is rising at a lower rate than what was originally projected. As a result, the cost to subsidize insurance for those who can’t afford to pay the full amount on their own is going down.

The second reason is fewer people overall are signing up for insurance that includes government subsidies (Medicaid or subsidized private insurance). That’s because companies are not canceling healthcare coverage for their employees at the rate originally projected by the CBO. That reduction is about 3M people.

The net is that by 2025, there will be more people with insurance than the CBO originally projected, which is also good news.

cbo graph
There is some controversy on why healthcare costs are growing more slowly. The administration suggests that it is the result of cost saving provisions of the ACA. Conservative sources suggest that it is the result of a weak economy and have been predicting a bounce back as economic growth heats up again. The CBO commented on this in their report.

such a bounce back seems less likely in light of the further slowing of spending growth observed in the most recent data.

BTW, this report only focuses on the cost side of the leger. The agency discontinued their analysis of the budget impact of this particular bill. Instead they pointed to their normal comprehensive deficit reporting as a source for those looking more detailed information. They did, however, provide this guidance when they made their announcement last summer.

the agencies have no reason to think that their initial assessment that the ACA would reduce budget deficits was incorrect.

What is also reliable are the conflations by conservative media sources who refuse to acknowledge that the law is actually working.

Here’s a sample.

Forbes (a long time ACA opponent) chooses the headline “CBO Downgrades Obamacare’s Enrollment And Subsidy Projections” for this same news. Rather than focus on the big news which is the cost savings and the fact the corporations are not laying off employees because of the law, they suggest that the law is failing to meet the original projects that the CBO put in place. Rather than admit that slowing growth in premium costs is a good thing, Forbes says “Obamacare’s premiums: Much higher than before, but lower than CBO projections”. Then they go on to quote their own statistics from a conservative think tank rather than the CBO in order to support that claim. They finish up the article with a suggestion of how much better things would be if a different plan were in place.

The Washington Times is always good for a laugh. Their headline reads, “Obamacare exchange customers set for significant premium spikes, CBO predicts”. They go on to cherry pick the CBO report in an effort to make their case. But the CBO did not predict a spike in premiums. They predicted that premiums would rise SLOWER than what they had previously predicted.

So I guess we should not be surprised that those who choose to live inside the right wing news bubble will continue to insist that the law, as Jeb Bush recently described it, is a “monstrosity”.

Jeb’s plan is replace Obamacare with government-backed catastrophic coverage for those who experience a medical crisis. For everything else, folks should just pay out of their pocket. The challenge, of course, is that the best medicine and cheapest care is the preventive care that is practiced in the primary care physician’s office. The most expensive and least effective care is that practiced in the Emergency Room as the result of a medical crisis.

We’ll dig into Jeb’s plan in another post.

The bottom line is that this is more good news for the country. The ACA is working even better than originally envisioned. The predicted avalanche of layoffs as corporations come under the ACA requirements regarding insurance did not happen. The “spikes” in premiums did not happen. Premiums are going up at the lowest rate in recent history. And finally, the predicted explosion in federal deficits as a result of the subsidies included in the bill hasn’t happened. The projected costs of the bill are going down because healthcare is becoming more efficient under ACA rules.

The real tragedy of our current partisan political environment is that we can’t even welcome good news anymore. All news goes through the filter of whether or not it is good for your particular political tribe with precious little thought about what might be good for the country.

Teddycare

March 8th, 2015

Ted Cruz is trying to position himself for a run at the 2016 Republican nomination for President.

He has already endeared himself to the Tea Party based on his government shutdown strategy.

As with many who need to retain their conservative bona fides while attempting to appeal to a broader audience, Ted has a problem. His actions and words are often at odds with one another.

In an attempt to distance himself from the last Republican who ran for President, Ted said this at a recent Koch Brothers event.

The central narrative of the last election, what the voters heard was, ‘We don’t have to worry about the 47%.’ I think Republicans are and should be the party of the 47%.’

Just as a reminder, the 47% reference here was Romney’s description of those dependent on the government and, as a result, unlikely to vote for him.

Here’s what Ted has done to help the 47% over the last couple of years.

Government Shutdown
This was an effort to defund Obamacare which provides insurance for a large percentage of the 47%. The government shutdown took a $24B bite out of the ecomony and , according to Mark Zandi from Moody’s, slowed the recovery that we are now experiencing by at least two quarters. It also furloughed thousands of federal employees without pay, though they were eventually paid. Federal contractors also furloughed thousands of employees without pay. They never received their lost pay. Small businesses suffered delays in payments and frozen SBA loans which caused them to lay off workers too.

He later defended his action saying:

As a result of that fight, millions of Americans rose up and demanded we stop the disaster that is Obamacare. Together, we elevated the national debate. And now, the misguided healthcare law is more unpopular than ever.

Immigration Reform
Ted also opposes any immigration reform that would provide a pathway to citizenship. He supports deportation of Dreamers.

Minimum Wage
He opposes any increase in the minimum wage.

Each of these positions makes life for the 47% worse. So it does call into question how he plans to become a champion of the poor and middle class.

Now he wants us to believe that he can provide a reasonable alternative to Obamacare. He remains convinced that “every last word of Obamacare must be repealed”. His alternative is designed to address the 7.5M that could lose coverage if the Supreme Court strikes down subsidies for those who have purchased insurance through the federal website.

The administration has done absolutely nothing to prepare for an upcoming Supreme Court decision that could leave millions of Americans unable to afford insurance thanks to this failed law.

Republicans must offer the American people alternatives that lower costs and break the status quo that favors big government and big health care business over hardworking Americans.

Before we dig into this just a couple of points about how insurance works.

Insurance companies make money by spreading the risk of a claim over a large population of insurance customers. The larger to pool of people unlikely to make a claim, the lower the rates for everyone in the pool. Obamacare works because it adds WAY more healthy people to the insurance pool than sick people.

This “pool” business model also introduces a bit of counter intuition with regard to competition. The bigger the pool, the lower the cost. That means that competition actually increases insurance company costs because the pool now has to be split among competitive companies. The number of insurance companies that any particular state can support depends on that state’s population. Increasing the number of choices for consumers (by allowing buying outside state boundaries) will actually reduce the number of in-state choices consumers have, particularly in smaller population states.

Here are the major points of Teddycare.

Allow people to purchase health insurance across state lines
His claim along with other Republicans is that increased competition would lead to lower premiums. This is disputed by experts. That’s because the cost of insurance is driven by the cost of healthcare, and not the marginal costs to operate their companies.

Eliminating state boundaries will return us to a world where healthy people can get very cheap insurance that they never use and ill people, if they can find insurance, won’t be able to afford it.

Insurance is regulated on a state by state basis rather than nationally. Allowing consumer to buy insurance from any state they choose will encourage at least some states to compete for that business by weakening their regulations. We’ve seen the same thing in credit cards where most companies are headquartered in Delaware or South Dakota where consumer protection laws are weak.

Repeal the individual mandate
Obamacare was able to implement requirements to insure everyone (healthy or sick) by requiring everyone (healthy or sick) to purchase insurance. This increases the pool of healthy people enough to actually offset the costs to offer the same plans to sick people. The result that we’ve seen is that the the rate of premium increases we saw before Obamacare have now slowed.

Eliminate the marketplaces
This reduces the ability for consumers to easily shop for plans on an apples to apples basis. Plans are complicated and even with the requirements that a marketplace impose, comparisons are still difficult. Remove the marketplace and very few consumers will be able to make informed decisions. They will instead have to return to insurance brokers who will help drive the cost of insurance up.

Remove the subsidies
Subsidies also widen the pool and make sure that care is being provided at the lowest cost location, a physician’s office rather than the highest cost location, the ER.

Eliminate protections against pre-existing conditions
Insurance companies will simply refuse to offer coverage to the very sick. The very sick will exhaust their own resources, declare bankruptcy and qualify for Medicaid. Tax payers foot the bill.

Eliminate parents’ ability to carry their kids on their insurance until age 26
Kids who age out of their parents’ plans will simply not purchase insurance. Rates go up because the pool is less healthy

Allow insurance companies to cap lifetime benefits
For the first time in our history, bankruptcies because of medical costs went down in this country because of Obamacare. This will cause them to go back up again.

Ted Cruz isn’t offering an alternative to Obamacare. He is simply returning us to the insurance system that existed before Obamacare. This was the system that was failing the 47% and threatening to bankrupt the country with out of control increases in healthcare costs. This was the system that left many people one serious illness or accident away from financial ruin. This was the system where the most vulnerable in our society had the least protection. This was the system where tax payers where forced to carry the burden for 30M uninsured.

I doubt that this will ever be introduced as a piece of legislation because it then can be scored by the CBO. That will reveal it as the fraud that it really is.

That does seem about right for the party that wants to “lower costs” for “hardworking Americans”. That’s really the code word here. We’re not talking about the 47% anymore. We’re talking about the 85% who have insurance and have been brainwashed into believing that extending care to another 27M people must be costing them something.

That’s what Teddycare is all about, fear mongering and Big Lies. One thing you CAN say about Ted Cruz, he is consistent.