Thoughts on Ben Nelson

Ben Nelson, the Demoractic Senator from Nebraska, has announced he won't seek reelection in 2012.  I guess this means that a Republican will in all likelihood take over that seat.  Nelson has been an unreliable Democratic vote in the last three years, and pundits kept saying he was trying to walk a tightrope to please his very conservative state while remaining a Democrat.  On Morning Joe this morning they were saying that ObamaCare was his Waterloo, and his vote for that legislation made him too vulnerable.

Jon Chait calls him "pathetic", explaining that he could have used his all-important vote for health care to demand some sort of conservative policy such as malpractice reform or cost controls, but instead went the more corrupt route of getting a special "cornhusker kickback" for his state- essentially he tried to make it up to his conservative constituents by being bought off instead of trying to improve the legislation.  This was captured by the Press, however, and he was pilloried as he deserved to be.  His reelection seemed unlikely in the aftermath.

A couple of days ago I took a trip to the JFK Library in Boston, and was reminded of Kennedy's book Profiles in Courage, in which he identified politicians who had taken votes that were politically difficult or even suicidal in the interest of doing "what was right for the country" instead of what would benefit them personally.  Ben Nelson could have done that, and I wonder if it wouldn't have worked out OK for him personally too.  What sickened me about the Democrats during the health care negotiations and the aftermath was their cowardly response to run away from the bill after passing it.  I wanted to see them go on the offensive- it always looks better when politicians do that.

Imagine if Ben Nelson had worked to improve the bill, and then went back to his conservative state and trumpeted its benefits, confronting his opponents on the matter and taking them on.  The optics might have looked OK.  Playing the coward didn't work out so well, that's for sure, and now he looks like a corrupt and broken man.  Bad bet.

Bankers

If what you're looking for is angry liberal ranting, Matt Taibbi always delivers.  His latest post takes on a recent article in Bloomberg in which bankers complain (whine) about how everyone hates them even though they've done so much for all of us.  Here's an exerpt from the original Bloomberg piece:

Jamie Dimon, the highest-paid chief executive officer among the heads of the six biggest U.S. banks, turned a question at an investors’ conference in New York this month into an occasion to defend wealth.

“Acting like everyone who’s been successful is bad and because you’re rich you’re bad, I don’t understand it,” the JPMorgan Chase & Co. CEO told an audience member who asked about hostility toward bankers. “Sometimes there’s a bad apple, yet we denigrate the whole.”

Dimon, 55, whose 2010 compensation was $23 million, joined billionaires including hedge-fund manager John Paulson and Home Depot Inc. co-founder Bernard Marcus in using speeches, open letters and television appearances to defend themselves and the richest 1 percent of the population targeted by Occupy Wall Street demonstrators.
If successful businesspeople don’t go public to share their stories and talk about their troubles, “they deserve what they’re going to get,” said Marcus, 82, a founding member of Job Creators Alliance, a Dallas-based nonprofit that develops talking points and op-ed pieces aimed at “shaping the national agenda,” according to the group’s website. He said he isn’t worried that speaking out might make him a target of protesters.

“Who gives a crap about some imbecile?” Marcus said. “Are you kidding me?”

The organization assisted John A. Allison IV, a director of BB&T Corp., the ninth-largest U.S. bank, and Staples Inc. co- founder Thomas Stemberg with media appearances this month.

“It still feels lonely, but the chorus is definitely increased,” Allison, 63, a former CEO of the Winston-Salem, North Carolina-based bank and now a professor at Wake Forest University’s business school, said in an interview.

At a lunch in New York, Stemberg and Allison shared their disdain for Section 953(b) of the Dodd-Frank Act, which requires public companies to disclose the ratio between the compensation of their CEOs and employee medians, according to Allison. The rule, still being fine-tuned by the Securities and Exchange Commission, is “incredibly wasteful” because it takes up time and resources, he said. Stemberg called the rule “insane” in an e-mail to Bloomberg News.

“Instead of an attack on the 1 percent, let’s call it an attack on the very productive,” Allison said. “This attack is destructive.”

Taibbi does a great takedown:

There are obviously a great many things that one could say about this remarkable collection of quotes. One could even, if one wanted, simply savor them alone, without commentary, like lumps of fresh caviar, or raw oysters.\

But out of Abelson’s collection of doleful woe-is-us complaints from the offended rich, the one that deserves the most attention is Schwarzman’s line about lower-income folks lacking “skin in the game.” This incredible statement gets right to the heart of why these people suck.

Why? It's not because Schwarzman is factually wrong about lower-income people having no “skin in the game,” ignoring the fact that everyone pays sales taxes, and most everyone pays payroll taxes, and of course there are property taxes for even the lowliest subprime mortgage holders, and so on.

It’s not even because Schwarzman probably himself pays close to zero in income tax – as a private equity chief, he doesn’t pay income tax but tax on carried interest, which carries a maximum 15% tax rate, half the rate of a New York City firefighter.

The real issue has to do with the context of Schwarzman’s quote. The Blackstone billionaire, remember, is one of the more uniquely abhorrent, self-congratulating jerks in the entire world – a man who famously symbolized the excesses of the crisis era when, just as the rest of America was heading into a recession, he threw himself a $5 million birthday party, featuring private performances by Rod Stewart and Patti Labelle, to celebrate an IPO that made him $677 million in a matter of days (within a year, incidentally, the investors who bought that stock would lose three-fourths of their investments).

...Hmm. Is Dimon right? Do people hate him just because he’s rich and successful? That really would be unfair. Maybe we should ask the people of Jefferson County, Alabama, what they think.

That particular locality is now in bankruptcy proceedings primarily because Dimon’s bank, Chase, used middlemen to bribe local officials – literally bribe, with cash and watches and new suits – to sign on to a series of onerous interest-rate swap deals that vastly expanded the county’s debt burden.

Essentially, Jamie Dimon handed Birmingham, Alabama a Chase credit card and then bribed its local officials to run up a gigantic balance, leaving future residents and those residents’ children with the bill. As a result, the citizens of Jefferson County will now be making payments to Chase until the end of time.

Do you think Jamie Dimon would have done that deal if he lived in Jefferson County? Put it this way: if he was trying to support two kids on $30,000 a year, and lived in a Birmingham neighborhood full of people in the same boat, would he sign off on a deal that jacked up everyone’s sewer bills 400% for the next thirty years?

I can't improve on that stuff, but I want to bring out another point.  When I talk to middle class and working class conservatives, they're often choked with rage about the bailouts to the financial services industry, and rightfully so.  But they also parrot Republican talking points about how the Dodd-Frank reforms and the higher taxes on the "job creators" are going to kill the economy.  These two thoughts are in conflict.

The populists on the Right are really correct about many of the problems of the bailouts.  But the obvious implication is that bankers who caused this ought to be held accountable.  Instead they want to blame Barney Frank and Barack Obama, two people with very little impact on the real estate bubble.  Populists on the Left need to make this case somehow and bring people on board, because the populists on the Right are serving as dupes for the business class right now.  It's not right.

Narratives of Mitt Romney

So much of politics, and life more generally in fact, revolves around the narratives that we generate to make sense of the world.  Politicians get defned in certain ways, and it's hard to shake a narrative once it takes hold.  So of course it's important for the candidates and the parties to work the media and the culture to nail down the narrative that they want to generate.

Republicans are really good at this game.  They defined Bill Clinton as "slick Willy", and the narrative of him as a liar became locked into the public consciousness.  Of course it didn't hurt that Clinton was indeed a liar, at least around the Monica Lewinsky sex scandal, giving them ammunition to fuel the narrative to which they had already commited.

My favorite Republican example of this was what they did to John Kerry: "flip flopper".  Now Kerry didn't really change positions any more than the average politician.  In fact, he changed less than many- he's basically been a consistently moderate liberal politician from day one.  But George W. Bush's campaign in 2004 successfully hung the flip flopper narrative on Kerry, even though it was Bush who had run in 2000 as a "Compassionate Conservative" and who had essentially made a hard right turn upon getting into office.  And it worked.

Republicans have tried a number of negative narratives on Obama, most notably the "socialist" one in which the president is allegedly dedicated to class warfare in a Marxist sense.  This hasn't really grabbed hold except on the far Right, though, partially due to the strong discipline of Obama and his refusal to give them much real ammunition.

Mitt Romney won't let go of this narrative, though.  He's brought it up a notch recently, in speeches like this:

Just a couple of weeks ago in Kansas, President Obama lectured us about Teddy Roosevelt’s philosophy of government. But he failed to mention the important difference between Teddy Roosevelt and Barack Obama. Roosevelt believed that government should level the playing field to create equal opportunities. President Obama believes that government should create equal outcomes.

In an entitlement society, everyone receives the same or similar rewards, regardless of education, effort, and willingness to take risk. That which is earned by some is redistributed to the others. And the only people who truly enjoy any real rewards are those who do the redistributing—the government.

As many have pointed out, this is just a flat-out lie. Obama has never said that government should create equal outcomes, and in fact has never even implied it.  His policy proposals don't lead to equal outcomes, just to Clinton-era tax rates. 

This isn't the first time Romney has engaged in flat out lies about Obama's positions.  He has accused Obama of "apologizing for America" to other countries, a clearly false claim.

So I'm hoping that Democrats and those in the media start working this narrative: Romney is a liar.  He'll say whatever sounds good in the moment, but ultimately we have a Republican nominee who believes it's totally fine to lie whenever he opens his mouth.  This can also be linked to the flip flopper narrative that is much more appropriate for Romney than it ever was for Kerry.  Here's a guy who said he was for abortion rights, and now is against them.  Was for an individual insurance mandate and is now against it.  How do we know which time he was telling the truth?  His own party doesn't really believe he's telling the truth about his positions now, which is why they keep looking for someone better.  Democrats need to beat this issue to death.

A Bipartisan Health Care Bill

Congressman Paul Ryan and Senator Ron Wyden have released a blueprint for Medicare reform, which has raised a little stir since it's bipartisan.  It's also not as extreme as Ryan's earlier plan which would have destroyed Medicare and replaced it with a voucher system.  In the liberal blogosphere people are upset with Wyden for giving Republicans some cover and making it harder to hit them with the details of the earlier plan in next year's election.

The plan is essentially to privatize Medicare, while still allowing the use of the old-fashioned system for those who want it.  There are still vouchers, but they would grow at a more realistic rate, and there would be safeguards to make sure insurance wasn't unaffordable for low-income seniors.  People would be allowed to choose more expensive plans, but would pay the difference.

Liberal wonks say this won't save any money.  Conservatives say that the free market will work its magic and generate innovation and efficiencies that will lower costs and increase value.

The issue comes down to what level of free market influence is most efficient in health care. But here I think that conservatives suffer from basing their belief in the free market for health insurance on Faith rather than evidence. Medicare Advantage has been an experiment in privatizing Medicare, and its costs are higher than traditional Medicare. In fact, Medicare's per patient costs are much lower than private insurance. The fact is that we already have a private health insurance system in the US, and it has led to much higher health care costs than you see anywhere else in the world, where government is more involved in every case.

This isn't because conservatives are wrong about the free market being more innovative- it certainly is- it's because the unusual nature of the health care industry seems to have caused the innovation to go into new and high tech treatments that are probably more effective but clearly not increasing efficiency. How many people will be willing to pay much less money for treatment that is a little less efficacious? I'll buy a Dell computer that costs half as much as a Mac even though it's only 75% as good a product, but I wouldn't do the equivalent transaction with my heart surgery.

The burden of proof that a market solution will save us money really rests with conservatives, and so far there's just not much evidence in their favor.

Deficits and Taxes

So here, via Paul Krugman, are the income tax rates at various income levels as proposed by Newt Gingrich, Republican front-runner:

Yes, this means that people at the top of the income scale will actually pay a lower average tax rate than people in the middle and upper middle (those lucky stiffs at the bottom still pay less, though).  Ezra Klein has some great points on the Republican dichotomy right now: in congress they're refusing to extend the payroll tax cut because it's not paid for, but on the campaign trail Cain, Perry, and Gingrich are falling all over themselves to make much larger tax cuts without any sign of a thought regarding how to pay for them.  So what's the result in terms of revenue?

The tax plan proposed by Republican presidential candidate Newt Gingrich would add $1.3 trillion to the U.S. budget deficit in 2015 alone, a new analysis shows, complicating his goal of balancing the government’s books.

 That's in one year alone!  It's just mind-boggling that Newt and other Republicans can spend the first half of a speech ranting about the deficits run up by the Obama administration, and then in the second half of the same speech roll out a revenue-eroding tax cut.  And nearly half the country is buying it!!!

Aaaaarrrrrrgggggghhhhhhhhh!

I do not look like this

This stuff, as reported by Paul Krugman, just drives me crazy.  Apparently Senator Olympia Snowe said this:

Fiscal shenanigans such as permanent tax increases to pay for one-year temporary measures are precisely the problem that drove our nation into a $15 trillion debt crisis.

Krugman isn't usually known for holding back, but in his post I think he hits it too lightly.  Snowe's statement is basically the opposite of the truth.

Here is a graph of the causes of our debt:

So the truth is that the Bush tax cuts were the single biggest cause of our current deficit.  Magical thinking that tax increases hurt the budget are not helpful in dealing with this problem.  And Snowe is supposed to one of the moderates!!!

Parties Get the Candidates They Deserve

I get really tired of the whining from establishment Republicans that they are totally set up to win the 2012 presidential election, but might lose because their candidates are terrible.  And they kind of have a point, in that every candidate has huge glaring weaknesses that seem to render it impossible for him/her to be nominated, except that someone has to win the nomination.

But here's the thing: the reason that there are no good candidates goes back to the wild and radical right turn made by the party over the past decade.  People don't run for president if they haven't been around politics (except for Herman Cain I guess, but I think we can agree he has a different set of problems), but ten years ago virtually nobody was in favor of the policies that are now mainstream.  Imagine the current positions from a Republican politician in 2000:

• Health insurance mandate= authoritarianism
• Taxes are too low on poor people
• Climate change is a hoax, and nothing should be done about pollution
• Muslims are dangerous, and should not be allowed the same religious freedoms as the rest of us
• Deficits are always bad, and the US should balance its budget (a particular howler given the runaway GOP deficit from 2001-2007).
• Illegal immigrants are a scourge, and must be rounded up and deported even if they've been here since infancy
• Medicare should be privatized and moved to a voucher system
• Social Security is a Ponzi Scheme and needs to be cut back severely

With so many areas in which the party has been dragged to the Right, no long-serving politician can possibly have started out his career with such positions.  I've said before that Romney and Perry have been unfarily burned by past positions that were actually quite sane and intelligent, because they don't fit the current mood of GOP primary voters.

"But what about Chris Christie?  He would have been great!".  Chris Christie who hires Mulsims in his administration?  Who is compassionate toward illegal aliens?  Who believes in climate change?  He would have come up with warts just like everyone else.  Jeb Bush too. 

The Republican party has gone completely off the rails.  And they still might win the presidency!  But to get the nomination its candidates are going to have to turn themselves into pretzels to come down on the right side of all these issues.  That's going to look ugly no matter how you slice it.  So don't blame Mitt for his serial flip-flopping- blame his party.

"But both parties have been radicalized! That's the problem!"  I've heard a version of this from a few Republican and centrist friends of mine.  I generally answer them with this challenge:

Think about both parties and their mainstream platforms in, say, 2000. I can name you a half dozen major issues on which the Republican party has moved way Right (torture, religious diversity for Muslims, cap & trade/ environment, health care, progressive taxation, etc). Now think about areas in which the Democrats have moved Left- I can come up with one- Gay Rights/marriage/civil unions. That's it. If you can think of any more I'd love to hear it. (I hope you're not thinking Health Care, in which Democrats passed a bill much less liberal than that proposed by the Clintons, with ideas drawn originally from Right Wing think tanks in response to ClintonCare. The only thing that makes it seem more liberal is that it succeeded in passing).

That's a direct quote from an email to one such friend.  I sent it 11 days ago and haven't seen an answer yet.  In fact, nobody has ever given me even a lame attempt at an answer.

IntraParty Republican Critics' Shortcomings

I found this interesting:

Conservatism, despite these impressive electoral victories, is failing on its own terms. Start with the social indicators, which are the most important to conservatives. America's fast-growing and largely minority underclass shows limited signs of progress or assimilation to middle-class American life. And the white middle class -- the bed-rock of conservatism's political strength and social vision -- is showing signs of social stagnation and economic regress that should be sounding ominous claxons in conservative meeting halls but, so far, have attracted only the attention of Charles Murray. Stagnant income growth and mobility and a shrinking middle class are considered unhealthy by most conservative understandings of social health, cohesion, and well-being. While conservatives have plenty of macro ideas for increasing economic growth, they have fewer ideas about how to secure a wider distribution of new wealth.

Political and economic indicators bring more grim news. Thirty years after the arrival of the Reagan Revolution, government is bigger than ever. The Reagan years appear to have been little more than a mild speed bump in the progress of ever-larger government. The regulatory state advances relentlessly on every front. The soaring national debt threatens economic oblivion sooner or later. In short, the Reagan era, for all that was accomplished, was not an analogue to the New Deal era. In fact, the much-vaunted Reagan Revolution was not revolutionary and failed to alter the nation's basic long-term political trajectory.

I get so excited when I read sober assessments of where the conservative movement is failing, and I'm sure a conservative would feel the same way about an analagous liberal piece.  As would be expected, I agree with some of the piece, even as I don't share the author's disappointment that conservative goals aren't getting met.  The point is well-made that the Republican "starve the beast" strategy of cutting taxes now and assuming that government spending would have to be reduced as a result has been an abject failure.  I'd certainly like to see more conservatives recognize that- even if I don't share their goal of smaller government, at least it would be good if they proposed the cuts that their tax policies would actually require, rather than passing all the cost on to our children.

But this bothered me:

Of course, a reformation in conservatism demands corresponding reforms within liberalism. Liberals need to acknowledge that the American people will never support the high level of taxation -- let alone wholesale redistribution -- that would be necessary to support the future welfare state that has been set in motion. "Liberals who want a bigger welfare state and conservatives who want a smaller one have a big thing to fight about, but nothing really to talk about," noted Voegeli. "If liberals and conservatives decide they can do business with each other it will be because conservatives accept they'll never sell voters on the huge benefit reductions they ultimately seek, and because liberals decide they'll never sell the huge tax increases they ultimately need."¹⁴

...It may be that internal ideological reformation must precede bipartisan political compromise. Ideological extremists in both parties have repeatedly succeeded in scuttling tax and entitlement compromises pursued by moderate reformers in their respective parties, and at the moment, the prospects for any compromises seem remote. It is easy and crowd pleasing to blame the intransigence of the other side, but this absolves both sides of serious self-examination and self-criticism without which political progress becomes impossible for both. [Boldface is mine]

Yes, it's more of the False Equivalency Watch.  I guess since we get constant false equivalency from the media in the center of the debate, we're certainly going to get it from the Right, but it's still annoying to read.

The current debate has featured liberals arguing for a return to Clinton-era tax rates, along with increased taxes on the very wealthy.  In fact, these taxes on the rich are very popular, even supported by the rank and file of the Republican party.  Liberals, having passed the Affordable Care Act, are basically finished with major initiatives for government to take.  We're asking for the totally sustainable tax rates of the 1990s, not the even higher rates of the '70s or '60s (which were high, but sustainable too). 

And ideological extremists in the Democratic party have zero power.  Nobody listens to Noam Chomsky and Michael Moore.  Liberals may be excited by Occupy Wall Street, but the redistributive policies being pushed there have no chance of being proposed in Congress.  The moderates are fully in control of the Democratic party, and their proposed tax compromises reflect that.  It would be nice if conservatives would acknowledge that too- radicals have taken over just one party in the US, not both.