I have something good to say about George W Bush

Here it is:

In light of Peter King's apparent desire to make sure American Muslims know how much the rest of us hate and fear them, I can see now that President Bush's 2001 insistence on blaming terrorists, but not Islam, for the events of 9/11, was courageous.  Maybe couragous isn't quite the right word- he was universally praised for taking this stand at that time, and didn't have to pay a political price the way a liberal might have paid, as the liberal would have been attacked from the Right by bigots.

Why do I say that?  Well, look at our American polity now.  Liberals are in charge, assiduously trying to differentiate between Islamic extremists and the Muslim religion, demonstrating that American is an inclusive place- in other words, the exact same thing the Bush administration did.  But now you have Peter King and others on the Right warning that the liberals are too soft on Islam.

With all that said, however, GWB deserves credit for this particular gut-level decision.  He apparently doesn't carry the kind of hatred in his heart that we see from many on the Right today.

Wisconsin- Republicans Win

I have to agree with Ezra Klein on this: Republicans appear to have won (assuming it was legal to vote so quickly on the bill, but in that case they could presumably just wait a few days and do it right).  They figured out a legal loophole that allows them to pass the union-busting bill without a quorum.

In my quest to be consistent on this blog and in my thinking, I want to go on record saying that Democrats did something legal, leaving town to deny the quorum, and Republicans found a way around the problem, also legally.  All's fair in love and war- and politics.  Next step is for Democrats to successfully recall a bunch of politicians in the aftermath and gain control of the state.  Not sure how realistic that is, but recalls are legal too.

Over the Cliff Politics

I was thinking today about our current political climate and trying to think back to 2008 and what I thought then about the Republican party.  After McCain's defeat, it seemed that the GOP was going completely crazy in a hard turn to the Right.  Many of us on the Left were gloating about how the next decade would belong to us because independents couldn't possibly follow the Republican party over the cliff into total Supply Side economics, neocon foreign policy, extremist anti-abortion and anti-gay policies, etc.

Wrong again I guess.  It seems that the Right turn has worked out pretty well for them (I try not to stab myself in the eye while thinking about how the Republicans can create the worst recession in recent history, get voted out of office for it, and then come back only two years later to clean up the mess, but I digress).  So I have to change my position- the Republican party is going to be in full power again some day, perhaps as soon as 2012, even though their policy positions would make Ronald Reagan and Milton Friedman turn over (to the Left) in their graves.

So what next?  I believe that a few years of bringing the Full Crazy to the economy ought to make things bad enough in a hurry and bring the Left back around to victory.  That's a pretty hollow win, though- they get to screw everything up, and we have to clean up the mess, which they somehow get to keep blaming on us.  And around we go.....

Morning TV Pundits Driving Me Crazy

Watching Morning Joe today as I get dressed, listening to Pat Buchanan and crew talk about the deficit, and I just keep wanting to throw something through the television as hear all the misinformation:

• Yes, it's a good point that non-defense discretionary spending is only 12% of the budget and can't be used solely to solve the budget deficit.  I'm glad that point is now made all the time.  And then pundits rightfully point out that Defense spending has to be confronted.  But then we hear about "entitlements"- we have to "do something about Medicare and Social Security".  Actually, Medicare and Social Security are very different issues and need to be discussed separately.  Social Security is a simple program with a simple funding scheme- all we have to do raise revenues (in some way) or cut benefits (in some way) moderately and the problem will be easily solved.  Medicare is the real problem in the long term, which is why it's really about health care.  So I'd like to see pundits hold the budget hawks' feet to the fire on their plans for health care spending, because that's where the real challenge is.
• Nobody talks about tax increases as part of the solution to the budget problem, except when trying to draw a false equivalency.  Here's Joe Scarborough in Politico today:

There are elements of the GOP spending plan that cause me great concern. The belief of some on the right that America can balance the budget by cutting education, infrastructure, the Corporation for Public Broadcasting and home heating assistance to the poor is tantamount to budgetary witchcraft. Also, enough with the argument that eliminating earmarks will balance the budget. That is as ignorant as liberals believing that all problems will be solved if we raise taxes and cut defense. Those left-wing “cure-all’s” won’t solve our structural debt problem any more than some Republicans’ plan to simply slash domestic spending.

Yeah, that causes me concern too, but look at how he characterizes liberals: they think you can balance the budget by raising taxes and cutting spending!  Whereas conservatives believe we can balance it by cutting just discretionary spending.  One side is pretty close to accurate, the other side is living in Wonderland.

Alright, got that off my chest, off to work now.

A little Health Care reminder

An email correspondent wrote me:

You still believe that ACE [sic- he means ACA] is going to rein in health care costs??? Knowing that one can make numbers do anything one wants them to, and that all the ACE calculations are based on hypothesis and not fact, I find it unbelievable that you keep espousing the party line. Granted ACE will be affordable for those who don’t pay taxes and who don’t have healthcare, but for those of who do and have to pay for those who don’t????

Here's my response:

I think it's reasonable to be suspicious of any numbers, but just because a study (or, studies) by the CBO supports a liberal position doesn't mean it's necessarily wrong either.


Here's what is indisputably true: the ACA does something to slow the growth of health costs in Medicare. It may not be enough. It may be overturned by a future congress. It may be swamped by unrelated increases from a now-unthought of corner. But it will definitely introduce cost controls that would not be there without it. That's why the Republicans were able to gin up senior citizens with misleading stories about how their Medicare would be cut- because there actually are Medicare cuts.

I'm continually frustrated by the Right's refusal to understand something: they reason that because the ACA raises health care spending by extending it to the uninsured, it can't possibly reduce the deficit. But for those of us who took 1st grade Math, I would point out that spending can be offset by increases in revenue- the ACA raises revenues through various taxes that pay for the increased benefits. So to criticize the ACA for raising our taxes is perfectly legit- it does. To criticize it for increasing the deficit is just wrong- it doesn't.

It's like conservatives have decided that spending and deficits are the same thing. Similarly, they scream about out of control spending even though the current deficits were largely caused by the Bush tax cuts, not spending.

The Return of Depression Economics

That's the title of Paul Krugman's book that I just read (thanks bro!).  Obviously, I'm a huge Krugman fan, in good measure because he writes about economics in a way that's very accessible to the Great Unwashed like me.  His blog is an important daily read.

 

And the book is great.  Some important points from it (and from his blog's regular reading- I can't separate them):

• Many of us want to see bank runs, currency messes, and sinking economies as a morality lesson every time it happens.  And sometimes that's justified- it's pretty clear that Greece's mess was largely created by politicians' refusal there to make any hard choices.  But in other places the lesson just doesn't fit.  The Asian financial crisis of the 1990s started because of a currency run in Thailand, and then jumped from country to country there for no good reason other than they were all in the same geographic region.  Indonesia and South Korea did nothing wrong in their planning, but they were hammered by a contagious run on Asian currency and experienced bad recessions as a result. 
• All data points to the fact that the current worldwide recession was set off by the US real estate bubble, and has resulted in the freezing of credit markets as panic spread.  The problem now is that there's not enough demand for goods, so companies aren't hiring.  Government needs to step in to start spending during such times.  While excessive government borrowing in normal times hurts the economy by driving up interest rates, that's sort of a ridiculous problem to think about now, with interest rates extraordinarily low.  It's just not crowding out private borrowing.
• Other countries have it really bad when their currencies come under pressure.  Speculation in the currencies markets cause perceptions of problems to become self-fulfilling.  Figuring out when to devalue, when to peg currencies to the dollar or euro, or when to allow currency to float without intervention is really hard to figure out, and sometimes there is just no solution to the problem.  We're lucky in the US not to have this problem, anyway.
• It seems like the same movie plays over and over again when it comes to the banking sector: 
• Banks fail because they're leveraged too riskily
• Government has to bail them out to stop the economy from going into Depression
• Regulations are passed to force banks to leverage less so it won't happen again
• New institutions arise that perform similar functions, but aren't technically the same, so they're not under the same rules as the old banks
• The new institutions start leveraging more, resulting in fabulous profits when times are good.
• Wall Street assures us that it's a New Age, we've finally figured this out, and big profits are here to stay
• Something goes wrong, because ultimately if you leverage a lot and something happens, your bank fails.  And something always happens at some point.
• The new, bank-like institutions fail, and the cycle starts again

Anyway, I highly recommend the book.

My Union Solution

Here's my extended post on unions in general, spurred by the doings in Wisconsin:

Public employee unions are most of what the union movement has left.  Currently the US workforce is about 12% union, down from 20% in 1983.  Reliable statistics aren't available to me from earlier than that, but in the 1940s and 1950s union membership was certainly much higher even than it was in 1983- it's been declining since at least the 1970s.

And traditionally unions were formed by blue collar workers in the manufacturing or farm sectors, workers with little control over their work, few skills, and (at the outset of the movement) absolutely horrible working conditions.  Today these unions are gasping for air, their jobs shifted to low-wage third world countries, while public employees make up a higher percentage of the movement.

I've been talking to people who belong to unions, or have family members in unions, over the past few days, and it brings out a real dilemma.  It's tough to mount a full-throated defense of unions when one hears about all the abuses in public sector union rules.  Conservative complaints that it's nearly impossible to fire bad teachers have plenty of basis in fact.  We all drive past road work crews in the Summer and witness more standing around than working.  I read about firefighters retiring at age 50 with massive pensions to be paid in perpetuity.  Certainly union workers have more job security than I've ever had, and they're practically the only workers left who have defined pensions for which taxpayers are on the hook, rather than 401K retirement plans in which the worker has to take on all the risk.

But a little history is instructive here.  America before the union movement was not just miserable for workers.  It was really dangerous to be a factory worker.  Pay was bad, safety rules were nonexistent, child labor use was common, pensions were of course unheard of (and there was no social security to fall back on), and workers who complained were just fired.  If you were maimed on a machine, you were out of luck and out of a job.  Big Business held all the cards.  A powerful and easy read on this is Upton Sinclair's The Jungle, an expose of the meat-packing industry around 1900.  There was virtually no way out for an unskilled worker before the advent of unions.

So unions grew, and supported the Democratic party for obvious reasons- the Democrats supported workers' rights to a humane environment and a living wage, while Republicans were the party of Big Business, which wanted to keep the gravy train rolling.  Workers trying to organize unions were slowed by a myriad of dirty tactics by industrialists, but over time laws were passed allowing workers to organize as they wished (the US is a free country, after all, and if people want to join together to negotiate that's certainly in concert with the American ethos).

But eventually, unions started into decline.  The center of their power was manufacturing, and with globalization manufacturing jobs moved to China, Mexico, and elsewhere where labor costs are much cheaper.  That's nobody's fault- it would have happened whether those sectors were unionized or not, because US workers certainly are not going to compete with Cambodians making five cents an hour no matter how far to the bottom we go.

The new frontier for union organizing here should be and is the service sector of the economy.  That sector is growing faster than others in the US, and retail workers don't control their conditions much more than factory workers did back in the day.  But thus far it's been quite a slog- Walmart, the biggest private employer in the US now, is notorious for its union busting tactics, including the time it illegally shut down its entire meat-cutting division rather than allow seven butchers to organize.  And it's not like you could argue that Walmart workers are better off without a union- they pay is bad, benefits worse, and management ruthless enough to make any of the Gilded Age titans proud.

But unions haven't caught on in the service sector, so the major remnants of the labor movement are left in the public sector.  And they seem to be fighting for the wrong things: teachers don't get paid very well, but it's often very difficult to fire them even when their work is awful.  Police don't have outrageous hourly rates considering the dangers they face, but make enormous sums on overtime details of questionable necessity to the public. 

And of course government workers are practically the only ones left getting pensions, even if their salaries aren't as high as are seen in the private sector, especially for more educated professionals.  But keep in mind that there's nothing outrageous about pensions per se- millions of workers had them in the US for much of the last century, and it went fine for a long time.  The problem isn't that public workers get pensions, it's that private ones don't anymore.  That's great for Wall Street, which gets a steady stream of suckers trying to invest their 401K's, but not so great for workers.

I think that the reason government workers get paid a bit less while getting better benefits is because state and local governments have been willing to make workplace concessions in order to save money or delay payments.  It's cheaper in the short run to pay less in salary in exchange for more job security, even if it's not in the interest of quality.  And in tough budget times, pension funds can always be shorted by creative government budget makers and put off until the good times.  All this is understandable, and not the fault of the unions.

So now we come down to the present day.  It's pretty clear that the Wisconsin budget problems have nothing to do with unions (as noted in my last post), but are the result of a recession and a recent tax cut.  The governor has manufactured a crisis to enact his agenda, which is to destroy the unions in his state, even if those unions are willing to make concessions. 

So what I'd like to see is for governments at all levels in the US negotiate with unions, and push to reform contracts that don't make sense.  If teachers are too hard to fire, change the rules in the next contract, and if the Teacher's Union refuses, then deal with strike threats and the like.  If we can't afford to pay firefighters the salaries we're paying, then tell them at the next contract negotiation and work to get the public on the side of the cities and towns.  Yes it's ugly, and it's going to lead to strikes, but compared to Governor Walker's solution, it still leaves workers with the power to organize themselves; in short, it allows them the freedom to associate that shouldn't be denied anyone in the United States.