In what Forbes calls "one of the most spectacularly mis-prioritized state budgets in recent memory," Kentucky Gov. Steve Beshear is proposing $50 million of cuts to education while preserving a $43 million tax break for a biblically-themed amusement park centered around a life-sized Noah's Ark. ThinkProgress also roundly criticizes the budget plan, which marks an extremely rare instance where Forbes and ThinkProgress actually agree on something.
Meanwhile, Beshear calls the budget "inadequate for the needs of our people."
Do we need any clearer example of why government generally cannot be trusted? (Or, at the very least, why lobbyists and campaign donors have way too much influence).
Showing posts with label special interests. Show all posts
Showing posts with label special interests. Show all posts
Tuesday, January 24, 2012
Wednesday, December 28, 2011
As America gets poorer, Congress gets richer
In a previous post, I commented on how the president and Congress seem to primarily be working for the big guys. Big government has seen its power grow dramatically; Wall Street has been raking in dough; wealthy individuals and corporations can take advantage of numerous tax loopholes. Meanwhile, middle class jobs are being scuttled by powerful special interests such as the NLRB (in the case of Boeing) and the green lobby (in the case of Keystone XL).
One probable reason for this? Congress is populated overwhelmingly by the rich--and is getting richer while the country gets poorer. As you can see from the chart to the right, between 2004 and 2010 the median net worth of Congress grew by 15 percent while the median net worth of all Americans fell by 8 percent. Even more blatantly, the richest 10% of Congress saw their net worth increase by 33%, while the net worth of the richest 10% of Americans was essentially flat. In other words, if the Occupiers think that Congress currently favors the 1 percent, it is probably because Congress is the 1 percent.
Why is Congress getting so much richer? One obvious reason is that they can basically vote themselves a raise every two years regardless of their performance or that of the economy. But the huge windfall for the richest members of Congress is more a result of crony capitalism and insider trading. For example, during the Obamacare debates, John Kerry invested $200,000 in the healthcare company ResMed--and when Obamacare cut Medicare reimbursements, Kerry dumped his holdings in an insurance company that was heavily dependent on Medicare. Similarly, Dick Durbin liquidated a large chunk of his investments in September 2008 after Ben Bernanke warned him of a possible financial crisis. Rep. Darrell Issa (R-CA) once obtained $800,000 in federal earmarks for a road-widening project next to his land holdings.
Clearly, the rising cost of a political campaign (the average successful Senate run cost $10 million in 2010) is a major factor keeping the non-rich out of Congress, as well as giving significantly more power to special-interest donors. But sometimes I feel like we need a third elected branch of government, whose job is to investigate members of the executive and legislative branches and mete out penalties. In sports, athletes who take steroids are suspended for large portions of a season, and colleges that accept illegal donations are forbidden from competing in postseason games. If lawmakers who engage in business or land deals involving a conflict of interest, they need to be fined--or, for repeat offenders, banned from the next election.
One probable reason for this? Congress is populated overwhelmingly by the rich--and is getting richer while the country gets poorer. As you can see from the chart to the right, between 2004 and 2010 the median net worth of Congress grew by 15 percent while the median net worth of all Americans fell by 8 percent. Even more blatantly, the richest 10% of Congress saw their net worth increase by 33%, while the net worth of the richest 10% of Americans was essentially flat. In other words, if the Occupiers think that Congress currently favors the 1 percent, it is probably because Congress is the 1 percent.
Why is Congress getting so much richer? One obvious reason is that they can basically vote themselves a raise every two years regardless of their performance or that of the economy. But the huge windfall for the richest members of Congress is more a result of crony capitalism and insider trading. For example, during the Obamacare debates, John Kerry invested $200,000 in the healthcare company ResMed--and when Obamacare cut Medicare reimbursements, Kerry dumped his holdings in an insurance company that was heavily dependent on Medicare. Similarly, Dick Durbin liquidated a large chunk of his investments in September 2008 after Ben Bernanke warned him of a possible financial crisis. Rep. Darrell Issa (R-CA) once obtained $800,000 in federal earmarks for a road-widening project next to his land holdings.
Clearly, the rising cost of a political campaign (the average successful Senate run cost $10 million in 2010) is a major factor keeping the non-rich out of Congress, as well as giving significantly more power to special-interest donors. But sometimes I feel like we need a third elected branch of government, whose job is to investigate members of the executive and legislative branches and mete out penalties. In sports, athletes who take steroids are suspended for large portions of a season, and colleges that accept illegal donations are forbidden from competing in postseason games. If lawmakers who engage in business or land deals involving a conflict of interest, they need to be fined--or, for repeat offenders, banned from the next election.
Monday, November 7, 2011
Occupy Wall Street and the Tea Party need to work together
Yes, that's right. What we need is some form of collaboration between the Occupy movement and the Tea Party. That seems to me to be the best way--perhaps the only way--to have a good chance of fixing the status quo of dysfunctional partisan politics.
At first glance, Occupy Wall Street and the Tea Party seem like the Hatfields and the McCoys--no way would they ever work together. But they actually have quite a lot in common. Both are vehemently against the status quo. Both argue that the American people are being screwed over by a small minority of powerful people at the top. Both have widespread popular support. And in my view, both of their main points are extremely valid.
For the Occupiers, the enemy is the so called "1 percent," Wall Street in particular. For the Tea Party, the enemy is a different 1 percent: politicians and lobbyists and their ilk. They're both kind of right. Wall Street took lots of foolish risks that led to the 2008 financial crisis--but did so in large part because government gave them huge incentives to do just that. The government gave Wall Street massive bailouts and refuses to pass meaningful financial regulation, in large part because so many people in Congress and in the Obama cabinet are either bankrolled by Wall Street or former Wall Street employees.
Unfortunately, both movements have a tendency to go off the deep end as well. Occupiers tend to view government as the solution to the problem rather than a co-conspirator in the plot. In an era where trust in the government is as low as during Vietnam and Watergate, calls for more government are not going to be well-received by the majority of the people. Besides, given the government played a big part in causing the problem, more government will almost certainly make things worse. The Occupy movement also tends to have a negative view of business in general, also counterproductive during an unemployment crisis.
On the other hand, I am baffled and a bit disturbed by how often GOP candidates have railed against the so-called "47% of Americans who don't pay taxes," and by the continued support for Cain's 9-9-9 plan even though analysis has shown it will raise taxes significantly on lower-income people. I don't really know how much this is attributable to the Tea Party, but given the significant Tea Party influence in recent GOP politics, and the popularity of the 9-9-9 plan among GOP voters, I have to think there is a connection. Calling for more taxes on the poor is an almost surefire way to turn off large swaths of American voters. For two years I made less than $14,000, which put me among those despised 47% who paid no federal income tax. But payroll tax and sales tax still ate up about 7-8% of my income. That's quite a bit.
I really think that the Occupy movement and the Tea Party could find a common cause and become a considerable force for real reform in Washington that limits the power of both government and their Wall Street cronies. Given the polarized partisan nature of politics today, though, it probably won't happen.
At first glance, Occupy Wall Street and the Tea Party seem like the Hatfields and the McCoys--no way would they ever work together. But they actually have quite a lot in common. Both are vehemently against the status quo. Both argue that the American people are being screwed over by a small minority of powerful people at the top. Both have widespread popular support. And in my view, both of their main points are extremely valid.
For the Occupiers, the enemy is the so called "1 percent," Wall Street in particular. For the Tea Party, the enemy is a different 1 percent: politicians and lobbyists and their ilk. They're both kind of right. Wall Street took lots of foolish risks that led to the 2008 financial crisis--but did so in large part because government gave them huge incentives to do just that. The government gave Wall Street massive bailouts and refuses to pass meaningful financial regulation, in large part because so many people in Congress and in the Obama cabinet are either bankrolled by Wall Street or former Wall Street employees.
Unfortunately, both movements have a tendency to go off the deep end as well. Occupiers tend to view government as the solution to the problem rather than a co-conspirator in the plot. In an era where trust in the government is as low as during Vietnam and Watergate, calls for more government are not going to be well-received by the majority of the people. Besides, given the government played a big part in causing the problem, more government will almost certainly make things worse. The Occupy movement also tends to have a negative view of business in general, also counterproductive during an unemployment crisis.
On the other hand, I am baffled and a bit disturbed by how often GOP candidates have railed against the so-called "47% of Americans who don't pay taxes," and by the continued support for Cain's 9-9-9 plan even though analysis has shown it will raise taxes significantly on lower-income people. I don't really know how much this is attributable to the Tea Party, but given the significant Tea Party influence in recent GOP politics, and the popularity of the 9-9-9 plan among GOP voters, I have to think there is a connection. Calling for more taxes on the poor is an almost surefire way to turn off large swaths of American voters. For two years I made less than $14,000, which put me among those despised 47% who paid no federal income tax. But payroll tax and sales tax still ate up about 7-8% of my income. That's quite a bit.
I really think that the Occupy movement and the Tea Party could find a common cause and become a considerable force for real reform in Washington that limits the power of both government and their Wall Street cronies. Given the polarized partisan nature of politics today, though, it probably won't happen.
Thursday, September 22, 2011
A second Gilded Age?
For those unfamiliar with the Gilded Age, it was an era of government dysfunction that lasted from about 1877 to 1900. The gap between rich and poor was enormous. Partisan gridlock in Congress was the norm. Powerful political organizations got out the vote for their candidate and were rewarded with generous favors once the candidate was elected. Large monopolies or near-monopolies wielded enormous power over the government and were said to have bought certain senators. And corruption and crony capitalism were rampant and bipartisan. In fact, as Pittsburgh Tribune-Review columnist Salena Zito argues, it was very much like the political situation today.
In this 1890's political cartoon, a number of bloated figures--representing the "Iron Trust," "Standard Oil Trust," "Copper Trust," "Steel Trust," and various other monopolies--have taken over the Senate. Today the cartoon is just as true; all that needs to change are the names on the figures' bellies. Instead of the Oil Trust and the Steel Trust, we have Giant Banks, Fannie Mae/Freddie Mac, the Military-Industrial Complex, Public Employee Unions, Giant Hedge Funds, Trial Lawyers, et cetera.
In response to the corrupt excesses of the Gilded Age, a populist movement--the Progressive movement--formed in the 1900's. This movement was the driving force behind several important changes: antitrust legislation, direct election of senators, state-level referendums, and (somewhat unfortunately) the income tax. The people largely blamed local and state-based political machines for the corruption, and thus enacted reforms that strengthened the federal government and made all levels of government more responsive to the people.
Similarly, the Tea Party is a populist response to the partisan bitterness and special-interest power that characterize today's politics. In contrast to the Progressives of the 1900's, the Tea Party blames most political problems on the federal government, and thus their goal is to weaken the federal government and give more power to the states and the people. Even outside of the Tea Party, independents in general are fed up with government (as shown by the record-low approval rating for Congress). In 2006 and 2008, independents angrily threw Republicans out of office. Since 2010, the voters have turned their anger towards the Democrats. One has to wonder how long this political ping-pong will continue before someone finally enacts meaningful reform.
In this 1890's political cartoon, a number of bloated figures--representing the "Iron Trust," "Standard Oil Trust," "Copper Trust," "Steel Trust," and various other monopolies--have taken over the Senate. Today the cartoon is just as true; all that needs to change are the names on the figures' bellies. Instead of the Oil Trust and the Steel Trust, we have Giant Banks, Fannie Mae/Freddie Mac, the Military-Industrial Complex, Public Employee Unions, Giant Hedge Funds, Trial Lawyers, et cetera.
In response to the corrupt excesses of the Gilded Age, a populist movement--the Progressive movement--formed in the 1900's. This movement was the driving force behind several important changes: antitrust legislation, direct election of senators, state-level referendums, and (somewhat unfortunately) the income tax. The people largely blamed local and state-based political machines for the corruption, and thus enacted reforms that strengthened the federal government and made all levels of government more responsive to the people.
Similarly, the Tea Party is a populist response to the partisan bitterness and special-interest power that characterize today's politics. In contrast to the Progressives of the 1900's, the Tea Party blames most political problems on the federal government, and thus their goal is to weaken the federal government and give more power to the states and the people. Even outside of the Tea Party, independents in general are fed up with government (as shown by the record-low approval rating for Congress). In 2006 and 2008, independents angrily threw Republicans out of office. Since 2010, the voters have turned their anger towards the Democrats. One has to wonder how long this political ping-pong will continue before someone finally enacts meaningful reform.
Monday, August 29, 2011
Government by the special interests, for the special interests
As a candidate in 2008, Barack Obama focused much of his message around overcoming "politics as usual" and bringing about change that would benefit the true public interest. That was one of the main reasons I voted for him, despite the fact that I disagreed with him on most matters of economic policy. When Obama was elected, much of the country hoped that he would take steps to work with Republicans and to cut down the influence of lobbyists and special interests in Washington.
In reality, however, Obama, Pelosi, and Reid did exactly the opposite. In their two years of unopposed control over Washington, they rarely passed up an opportunity to throw red meat to their favored special interests, usually screwing over the American people as a result. Jay Cost of the Weekly Standard has the full story, but here's a summary:
1. A massive stimulus bill heavy on pork and various pipe dreams such as "green initiatives," but little actual stimulus.
2. Giving a majority stake in Chrysler to the United Auto Workers. (Isn't that a conflict of interest for a labor union to own the company that employs its members?)
3. The attempted cap-and-trade bill, which would have made environmentalists happy--but which would also have hit businesses and individuals extremely hard, likely causing a huge spike in unemployment
4. The toothless financial reform bill, basically a sweetheart deal for Goldman Sachs and all the other Wall Street mega-banks that donated large sums of money to Obama's campaign.
5. When trying to get votes for the health care bill in 2009, Pelosi actually told reluctant Rep. Jim Cooper (D-Tenn), "The store is open. Now is the time to get your provisions." Although, after the "Cornhusker Kickback" and the "Louisiana Purchase," that statement hardly seems surprising.
And all of this from a president who promised to minimize the influence of special-interest lobbyists. Very gifted in doublespeak, indeed.
In reality, however, Obama, Pelosi, and Reid did exactly the opposite. In their two years of unopposed control over Washington, they rarely passed up an opportunity to throw red meat to their favored special interests, usually screwing over the American people as a result. Jay Cost of the Weekly Standard has the full story, but here's a summary:
1. A massive stimulus bill heavy on pork and various pipe dreams such as "green initiatives," but little actual stimulus.
2. Giving a majority stake in Chrysler to the United Auto Workers. (Isn't that a conflict of interest for a labor union to own the company that employs its members?)
3. The attempted cap-and-trade bill, which would have made environmentalists happy--but which would also have hit businesses and individuals extremely hard, likely causing a huge spike in unemployment
4. The toothless financial reform bill, basically a sweetheart deal for Goldman Sachs and all the other Wall Street mega-banks that donated large sums of money to Obama's campaign.
5. When trying to get votes for the health care bill in 2009, Pelosi actually told reluctant Rep. Jim Cooper (D-Tenn), "The store is open. Now is the time to get your provisions." Although, after the "Cornhusker Kickback" and the "Louisiana Purchase," that statement hardly seems surprising.
And all of this from a president who promised to minimize the influence of special-interest lobbyists. Very gifted in doublespeak, indeed.
Thursday, August 25, 2011
Is "shovel-ready" still possible with today's regulations?
In the 1930's, FDR was able to create thousands upon thousands of jobs and stimulate the economy through infrastructure projects such as the Hoover Dam. In 2009, a similar attempt by Obama fell flat. Projects that were said to be "shovel-ready" were in fact nowhere near. According to this Wall Street Journal article, those projects failed to get off the ground largely because of a maze of environmental regulations and bureaucratic procedures that did not exist in the New Deal era. The effect of these regulations is substantial; according to a firm that advises on public works projects, a new bridge or a road through an urban area often requires five to seven years of planning before it is ready for a shovel. It is possible, says the author, that the Hoover Dam could not even be built today.
Obama is pushing for a new round of infrastructure spending to stimulate the economy, but any stimulus is unlikely to happen as long as these delays remain in place. I can't help but wonder what will happen to the country's infrastructure if it takes five years of bureaucratic haggling to even get started on a project.
Obama is pushing for a new round of infrastructure spending to stimulate the economy, but any stimulus is unlikely to happen as long as these delays remain in place. I can't help but wonder what will happen to the country's infrastructure if it takes five years of bureaucratic haggling to even get started on a project.
Wednesday, August 17, 2011
A good 8-point plan to fix politics (that will never happen)
The Daily Beast today outlined a pretty good 8-step plan to fix most of what ails American politics. (Of course, the special interests and party leaders would never let something like this happen). I would say that 5 of the 8 points are spot on, and 2 of them need only minor tweaks. Here is their nifty flowchart that describes the plan. In a nutshell, it consists of:
1. Independent redistricting.
2. A nationwide "clean elections" system. (My objection: This is probably unconstitutional. A better idea would be strict limits on campaign donations for all organizations, but no limits on donations from individuals).
3. Nonpartisan primaries: all candidates on the same ballot, top two advance.
4. More states committing to give their electoral votes to the winner of the national popular vote.
5. Fill vacancies in legislative committees randomly. (My suggestion: Require every committee to be evenly divided between Republicans and Democrats. Committees should not be tools of partisan power).
6. Eliminate the provision where senators can anonymously place holds on bills.
7. Force filibusters to happen via actual on-floor debates.
8. Eliminate the debt ceiling. (My objection: It would be a bad idea to eliminate the last line of defense against out-of-control, over-budget spending. A better idea would be to pass a balanced budget amendment that also mandates a significant tax increase whenever the U.S. gets involved in a war).
1. Independent redistricting.
2. A nationwide "clean elections" system. (My objection: This is probably unconstitutional. A better idea would be strict limits on campaign donations for all organizations, but no limits on donations from individuals).
3. Nonpartisan primaries: all candidates on the same ballot, top two advance.
4. More states committing to give their electoral votes to the winner of the national popular vote.
5. Fill vacancies in legislative committees randomly. (My suggestion: Require every committee to be evenly divided between Republicans and Democrats. Committees should not be tools of partisan power).
6. Eliminate the provision where senators can anonymously place holds on bills.
7. Force filibusters to happen via actual on-floor debates.
8. Eliminate the debt ceiling. (My objection: It would be a bad idea to eliminate the last line of defense against out-of-control, over-budget spending. A better idea would be to pass a balanced budget amendment that also mandates a significant tax increase whenever the U.S. gets involved in a war).
Thursday, August 11, 2011
Bad news for Dems: Americans don't trust the government
We're almost three years into a crippling economic slump. Economic inequality is skyrocketing. Democrats are trying their hardest to blame the Tea Party for the recent debt crisis. Yet voters are not moving towards the Democrats or toward big government in any significant numbers. Democratic pollster Stanley Greenberg recently asked voters why, and his conclusion was quite enlightening. According to Greenberg, voters simply do not trust the government to carry out its policies fairly. This distrust in government translates to distrust of big-government progressives and of Democrats in general.
The voters' take on TARP, for instance, was that "government works for the irresponsible, not the responsible." "Average citizens," they said, "don't get money for free." Overall, the Americans in Greenberg's survey see a government made up of politicians that work only for themselves, Wall Street lobbyists, campaign donors, and special interest groups. The American people are ignored. The 2009 stimulus, the lack of seriousness about controlling the borders, the attempted cap-and-trade legislation, and the number of Obama cabinet members with ties to Goldman Sachs are all seen as indicators of how much Washington is controlled by special interest lobbyists and campaign money.
Greenberg goes on to suggest several ways that Democrats can "detoxify" government and renew voters' faith in progressivism. But is detoxifying government really possible? Hasn't Greenberg just pointed out the fundamental problem with big government? If we had a government of angels, I'd be a progressive too. The problem is, we don't. We have a government made up of people--all of them flawed, inherently corruptible, and inherently self-interested at least to some degree. We've all heard the saying, "Power corrupts." It is simply not realistic to expect that people, when given the power of a seat in Congress, will consistently put the interests of the people ahead of themselves and their campaign donors. I'd love for someone to think of a counterexample--a government that consistently did the right thing for its people, decade after decade.
But most of the time, at least, government doesn't work that way. As government gets bigger, those who benefit are mostly a well-connected few. That certainly happened under the big-government crony capitalists of the Bush administration and it's happening now. And Americans seem to be figuring that out.
The voters' take on TARP, for instance, was that "government works for the irresponsible, not the responsible." "Average citizens," they said, "don't get money for free." Overall, the Americans in Greenberg's survey see a government made up of politicians that work only for themselves, Wall Street lobbyists, campaign donors, and special interest groups. The American people are ignored. The 2009 stimulus, the lack of seriousness about controlling the borders, the attempted cap-and-trade legislation, and the number of Obama cabinet members with ties to Goldman Sachs are all seen as indicators of how much Washington is controlled by special interest lobbyists and campaign money.
Greenberg goes on to suggest several ways that Democrats can "detoxify" government and renew voters' faith in progressivism. But is detoxifying government really possible? Hasn't Greenberg just pointed out the fundamental problem with big government? If we had a government of angels, I'd be a progressive too. The problem is, we don't. We have a government made up of people--all of them flawed, inherently corruptible, and inherently self-interested at least to some degree. We've all heard the saying, "Power corrupts." It is simply not realistic to expect that people, when given the power of a seat in Congress, will consistently put the interests of the people ahead of themselves and their campaign donors. I'd love for someone to think of a counterexample--a government that consistently did the right thing for its people, decade after decade.
But most of the time, at least, government doesn't work that way. As government gets bigger, those who benefit are mostly a well-connected few. That certainly happened under the big-government crony capitalists of the Bush administration and it's happening now. And Americans seem to be figuring that out.
Wednesday, August 10, 2011
A victory over special interests in Wisconsin
In general, I have no problem with private sector unions. They represent workers and negotiate with companies who have strong incentives to cut costs in order to make a profit. Public sector unions, on the other hand, are a completely different story. They are employed by government, whose goal is not to make a profit but to get votes. If anything, government has an incentive to overpay their workers in order to try to get their votes. It is also not fair that public sector unions, who take their money out of the taxpayer-funded salaries of public workers, are free to donate vast sums to political parties. Finally, we have George Meany, the former President of the AFL-CIO, who said in 1955 that "it is impossible to bargain collectively with the government."
Public sector unions, basically, are just another one of the special interests that are currently infesting governments throughout the country. Thus, I believed that Scott Walker's bill which limited the collective bargaining power of public sector unions in Wisconsin was a step in the right direction. Predictably, Democrats fought Gov. Walker tooth and nail, first by fleeing the state, then by organizing an attempted recall of the six Republican lawmakers they saw as most vulnerable. They needed three of the six seats to regain control of the Wisconsin senate.
What happened? Despite staggering amounts of money and effort from organized labor, the Democrats only managed to win back two seats--one in a solidly Democratic district, the other held by a man who had left his wife and moved outside his district to live with his mistress. The other four recall elections were not close.
It certainly helped that Walker's bill helped school districts save millions of dollars by eliminating the teachers union's monopoly power on health insurance contracts, and that Walker's administration has had a very good record on jobs. It's good to know that people can still stand up to powerful special interests.
Public sector unions, basically, are just another one of the special interests that are currently infesting governments throughout the country. Thus, I believed that Scott Walker's bill which limited the collective bargaining power of public sector unions in Wisconsin was a step in the right direction. Predictably, Democrats fought Gov. Walker tooth and nail, first by fleeing the state, then by organizing an attempted recall of the six Republican lawmakers they saw as most vulnerable. They needed three of the six seats to regain control of the Wisconsin senate.
What happened? Despite staggering amounts of money and effort from organized labor, the Democrats only managed to win back two seats--one in a solidly Democratic district, the other held by a man who had left his wife and moved outside his district to live with his mistress. The other four recall elections were not close.
It certainly helped that Walker's bill helped school districts save millions of dollars by eliminating the teachers union's monopoly power on health insurance contracts, and that Walker's administration has had a very good record on jobs. It's good to know that people can still stand up to powerful special interests.
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