Thursday, July 26, 2012

Phila. City Councilman Kenney tells Chick-fil-A to "Take a Hike"

 Phila. City Councilman, Jim Kenney (WHYY)
I disagree with how Chicago mayor Rahm Emanuel is handling the Chick-fil-A controversy, trying to block a new one from opening in his city.  However, I agree with Philadelphia City Councilman, Jim Kenney's handling of this issue. This week Kenney wrote a letter to Dan Cathy, the president of Chick-fil-A in response to Cathy's anti-gay position.

Here's a link to the letter, where Kenney tells Cathy he personally feels he "should take a hike and take your intolerance with you."

Cathy has freedom of speech to express an opinion on any issue or to "speak" monetarily with campaign donations to the party and politicians who best reflect his worldview. And he has, as it was uncovered that Chick-fil-A has donated to anti-gay groups detailed here.

And if this opinion is unpopular and becomes public we then have the freedom to not patronize his business, if we so choose. The majority of customers will likely continue supporting a business, no matter the owner's politics or very public religious beliefs, but to those who would take their business elsewhere, at least they will have the ability to make an informed decision.

The reason large companies are against campaign finance disclosure laws is they are afraid of losing business when customers find out what potential reprehensible policies or controversial politicians they are supporting via their campaign donations.

So bravo to Councilman Kenney for shining more light on this issue.

(h/t to William Bender)

Wednesday, July 25, 2012

GO'P Lies

No, the coming military sequester cuts and "fiscal cliff" are not Obama's fault

McConnell, Boehner, and Cantor: "How can we get you to understand what a horrible no-good deal we forced everyone to make us take last year?!"

It became obvious during the Debt Ceiling negotiations last summer that the the Republican leaders were incapable of negotiating in good faith. Time after time, a grand bargain was supposedly in reach, only to see Speaker John Boehner or House Majority Leader Eric Cantor walk out near the end of that round of the process. During these negotiations, at various times the Republicans turned down deals with a ratio as high as 8 to 1 spending cuts to tax revenue increases.

Finally a deal was reached at the last minute: $1 trillion in spending cuts over 10 years, and an establishment of a Super Committee with a deadline of December to reduce the deficit by $1.2 trillion or more over the next 10 years. The Super Committee had the flexibility to use a combination of tax revenue increases and spending cuts to reach this $1.2 trillion, and if they couldn't reach a deal automatic spending cuts would kick in starting in 2013, reducing military budget and domestic spending budget by roughly equal amounts (roughly $600B each) over the next 10 years.

But once again, the GOP showing their lack of seriousness about the deficit, offered three of deals they knew were unacceptable. The first offer was $2.2 trillion in spending cuts with no tax revenue increases, which was rejected. The second offer included $1.5 trillion in spending cuts and $300B in tax revenue increases. That part seems pretty good, but then the Republicans on the Super Committee also included a poison-pill extension of the Bush tax cuts and a lowering of the top marginal income tax rate. The Democrats predictably balked. The final offer was even worse: $640B in spending cuts and $3B in tax revenue increases, a ratio of 213 to 1 spending cuts to tax revenue increases. And it would barely meet half of the agreed-to deficit reduction figure.

Just like during the summer, no compromise could be made on a balanced deal that also contained significant tax revenue increases, so the automatic spending cut triggers were set to take place in 2013.

This underscores a point Jonathan Chait has made time and time again and he made it again yesterday:
What the defense sequester drama actually shows, for the jillionth time over the last twenty years, is that Republicans don’t actually care about reducing the budget deficit. If you care about reducing the deficit, you want to keep in place these triggers in order to force some kind of agreement. But Republicans want to disarm the defense trigger, and also of course the expiring tax cuts, which are the other trigger, leaving no pressure mechanism to force a deficit agreement. They’re happy to use the pretext of the deficit to pass something that cuts upper-bracket tax rates and social spending (especially for the poor and non-elderly), but there’s no plausible way to read their actual legislative position as anti-deficit.
This reinforces once again that the Republican party cares deeply about only one domestic policy: ensuring taxes remain low for rich people. All of these other issues, especially the whining about the budget deficit and spending that takes place whenever a Democrat occupies the Oval Office, is a ruse and merely a means to achieve the ultimate end of lowering taxes for the rich.

Anyway, in the last week or so the GOP new line of attack blames President Obama for the spending cuts that are scheduled to take place to the military in early 2013, as part of this deal. Here were Mr. Boehner's new talking points earlier in the week:
"Let's remember why we have the sequester. We have it for one reason: because the President of the United States didn't want to deal with the debt limit again before the presidential election. Because the president didn't want to be inconvenienced, he came up with the sequester," he said.
Well, actually, Mr. Boehner, you have the sequester because one party would not accept any fair amount of revenue increases as part of a balanced deal to reduce the defict. These spending cuts do seem to have some real teeth and will likely result in some job losses and possible overall macroeconomic harm. But that's more of a general argument against any significant spending cuts during a time of poor economic growth, than it is an argument against these cuts specifically. Cutting safety net programs would present a similar drag on the economy. 
Keynesians would have preferred a clean debit limit increase in the winter of 2011, followed by more spending to stimulate the economy. Or if anything a balanced deal that has a significant amount of upfront stimulus spending, coupled with future deficit reduction measures, all budgeted over a 10-year window.

So in review, the GOP held the country hostage last summer for months over the Debt Ceiling increase, making an unprecedented demand for a significant deficit reduction plan as a prerequisite for any deal to raise the debt limit. Then they negotiated a deal to raise the debt limit in exchange for an unspecified future plan to reduce the deficit. Then when no agreement could be reached on this future plan, automatic across-the-board spending cuts became the law.

Last summer we were reminded how bad things were when the leaders representing one of the two major parties no longer had the power nor the courage to negotiate budget deals without first consulting the Tea Party, Grover Norquist, and Rush Limbaugh. And things are even worse when the same party leaders now seem unwilling to follow through on deals they voted into law.

How can you run a government effectively when one of the two major parties can no longer be taken seriously when it comes to following through on agreements they passed into law? The GOP were exposed as fiscal frauds when it comes to the deficit years ago. Now they are being exposed as frauds in general. And this is just yet another example of them living up to the "worst Congress in history" label given to them recently by Ezra Klein.

Friday, July 13, 2012

The Bain of Romney's Existence

 Mitt-gomery Burns?

 "Ironic, isn't it Smithers? This anonymous clan of slack-jawed troglodytes has cost me the election, and yet if I were to have them killed, I would be the one to go to jail. That's democracy for you." --C. Montgomery Burns

As the drip, drip, drip of the stories about Bain Capital, tax returns, and overseas tax shelters continue, I keep wondering how, after running for President for 5+ years, did Mitt Romney allow these issues to continue to fester. Certainly you'd think someone like Romney would at least have the self-awareness to know that Swiss Bank accounts, Cayman Islands bank accounts, and a record of closing companies and outsourcing jobs just might not be all that popular with American voters.  

Does someone of Romney's status just think all of this is normal? You might attribute a never-before-seen level of arrogance, entitlement, and privilege to someone who thought he could run for President (twice!) and not have to provide legitimate answers to all of these questions. I think even Gordon Gekko would have the self-awareness to know what he did would not be viewed positively by most voters and would have figured out how to spin it better.

Romney obviously knew as far back as mid-way through his term as Massachusetts governor in the mid-aughts that he was going to run for President. At that point if you were Romney's strategists, wouldn't you advise him to begin shedding the overseas tax shelters and Swiss Bank account and bring that money home? If it wasn't presently happening on recent tax returns, you could always dismiss the charges as "old news." And wouldn't you have been able to mount a coherent, believable defense of your record at Bain Capital? Maybe something a little better than "I'm not going to apologize for my success."

Nobody wants you to apologize for your success, Mr. Romney. You have every legal right to all that money you earned and to the money you saved from the taxes you avoided paying. But the American people don't have to laud you for the way you made your money, nor do they have to appreciate how you used loopholes and shelters to avoid paying your fair share in taxes.

And to try to sell people on the idea that venture-capitalists' goal is to create jobs is laughable. As Washington Post business/economics columnist Steve Pearlstein pointed out a few years ago:
In the real world, businesses exist to create profits for shareholders, not jobs for workers. That's why they call it capitalism, not job-ism. There's no reason to beat up on business owners and executives simply because they're doing what the system encourages them to do.

And I think that's exactly right. Bain Capital, like all businesses, exist to make one thing: money. Job creation only occurs when a company believes the added labor will create more profit. You don't run a business with the goal of creating jobs; you run a business to make a profit. 

And as a guy running a venture-capital firm, it's perfectly reasonable for Romney to have participated in leveraged buyouts, loaded companies up with debt, outsourced jobs, closed companies, etc., all in the name of creating profits for shareholders. I don't like it, but that's what venture-capitalists do. In fact, as a guy running a company such as this, if he didn't try to do everything he could to maximize profits, he should have been relieved of his duties. But again, Americans don't have to like it.  While parents hope the best for their kids, does any parent really have dreams of their kid ascending to an executive job in private-equity?  

That's why CEO's of venture-capital and private-equity firms typically don't run for President - for one it's a huge pay cut. And voters usually want to believe Presidents understand their problems, and can relate to them, and not appear to be, as Mike Huckabee famously noted about Romney, "the guy who fired you."

So from 1977 until the present, Mitt Romney has had five public endeavors: 1)worked at and eventually ran Bain Capital, 2)ran unsuccessfully for MA Senate in 1994, 3)helped run the 2002 Salt Lake City Olympic Games, 4)served as governor of MA for 4 years, and 5)has run for President for 5+ years.

Obviously #2 and #5 aren't really something to emphasize. #3 is a nice story, but not really the kind of thing people look for in a presidential candidate. So that leaves his time as MA governor and his time at Bain. He's doesn't talk much about his time as a technocratic, moderate governor thanks to the right-ward tilt of his party in the last 4 years. So that leaves Bain and he has been reluctant to tell the whole story of his time there.

I'm a little biased here, but it just feels like the whole picture isn't complete. He seemed to bank his entire campaign on being the acceptable generic candidate in an election that was going to be singularly about holding the incumbent accountable for the slowly-recovering economy. Maybe being the "other" in that binary choice will be enough if the economy stays the same or gets worse. But as it is looking now, that strategy came with big risks (letting your opponent define you, economy improving, etc) and the consequences of those risks are on display this week.

I don't see any way Romney can put these stories to rest without releasing several more years of tax returns, along with documents from Bain from 1999-2002 showing what his role in the company was. Releasing the hounds isn't going to work.

Wednesday, July 11, 2012

Block the Vote


With polls holding steady for months now showing President Obama with a lead over Governor Romney in PA settling somewhere in between 6 and 12 points, you'd think PA would be moving from "toss-up" to "leans Obama" to "likely Obama" in all of the electoral college models. The demographic trends of the voters in PA are making it increasingly less swing-y than most of the other dozen or so "swing states", and it seems destined to move toward a "leans Democratic" state in future Presidential elections.

Yet with all of this news, why does PA still look to be hotly-contested this year? Well, obviously the economy is first and foremost on everyone's minds and could swing any election from incumbent to challenger fairly quickly. But secondly, and probably even more importantly is the new PA Voter ID law. If large numbers of Obama supporters are not able to vote in November due to this new law, the state becomes a toss-up.

In 2011 the state passed a new law that as it stands now would disenfranchise over 750K voters or roughly 10% of the electorate. And they made the law intentionally confusing, with some forms of government issued IDs acceptable and others not.

If your goal is to make sure everyone eventually gets the ID and is able to vote, you'd perhaps have a waiver/notice in place for this election and have the new ID be official next election. That way you would have accurate data for roughly how many waivers were issued and thus how many people this actually affected. Then there'd be an education campaign by interested groups to get them the proper ID. And at least initially it would  take steps to ensure that they are given the proper ID in a timely way at little or no cost.

If your goal is to try to prevent people from voting, who are likely to vote for candidates in the other political party by a wide margin, then the implementation of the law would look a lot like what is happening now. PA House Republican leader, Mike Turzai, admitted as much a few weeks ago.

The obvious point of these laws is to frustrate and confuse the very young and very old, poorer, non-white demographic groups who usually vote Democratic by large numbers, and ultimately suppress their votes. Someone like myself with more money and flexible work hours, who is more educated about this law, would find the time to get any proper ID questions straightened out. Someone who is an hourly shift worker, using public transportation, and not reading news sites on the internet on a regular basis, has neither the same level of knowledge about the law, nor the equal ability to ensure their vote is protected.

Voters in Norfolk, VA wait in long lines to vote in Nov. 2008 (source: USA Today)

There are so many other "real" voting problems in this country; from poorer neighborhoods being forced to use shoddier voting machines than wealthier neighborhoods (resulting in things like more "under-votes" that aren't counted - remember those from the 2000 election?), poorer neighborhoods often given fewer voting machines forcing voters into ridiculously long lines just to vote (see image above), to no paper trails to verify the votes in electronic voting machines. If the problems with voting in the 2000 election didn't inspire people to implement voting reform laws, so the ability to vote and you have your vote counted is more equal no matter who you are or where you live, it's likely nothing will.

All of these things could be fixed with some more funding and a little effort at the state and local level. Instead GOP legislatures are using scarce budget funds to implement a new voter ID law, whose ultimate result will not be preventing voter fraud (which is virtually non-existent), but in preventing thousands of eligible voters from exercising their constitutionally protected rights, due to a technicality created by the new law.

There is a hearing on this in the PA Commonwealth Court on July 25. I expect them to throw out or halt this law, citing the equal protection clause among other things, but stranger things have happened. If the law is upheld, voting rights activist groups are going to be forced to spend time and money trying to educate and organize the voters who need the new ID between now and the registration deadline in September.

An editorial in the Philadelphia Daily News has more background on this and information on how to get assistance obtaining proper voting ID.
In the meantime, Pennsylvanians without current PennDOT identification can act to protect their rights by beginning the process to obtain acceptable identification. A nonpartisan coalition of more than 100 organizations is ready to help. Check the Committee of Seventy's website ( for information or call 1-866-OUR-VOTE (1-866-687-8683).

Don't let your right to vote be taken away.

Update: Dave Weigel of Slate has an excellent take on this here.

Tuesday, July 3, 2012

Why Marc Thiessen Is Wrong About the Supreme Court

"Liberal" Chief Justice John Roberts, eh?

Washington Post columnist and former Bush speechwriter and chief torture defender, Marc Thiessen, penned a column yesterday, where he attempted to make two related points, 1 of which is completely inaccurate, and the other which is ultimately proven incorrect due to the first point.

Anyway, Thiessen asks why GOP presidents are so bad at picking Supreme Court justices.
Chief Justice John G. Roberts Jr.’s decision to side with the court’s liberal bloc and uphold Obamacare raises an important question for conservatives:  Why are Republicans so awful at picking Supreme Court justices?  Democrats have been virtually flawless in appointing reliable liberals to the court. Yet Republicans, more often than not, appoint justices who vote with the other side on critical decisions.
So what he's really asking is "why isn't the GOP successful at packing the court with justices who are blindly partisan and wish to advance the goals of the conservative movement and the Republican party?"

He then notes of the justices appointed in the last 30 years, Democratic Presidents seem to be 4 for 4, appointing justices who are reliably center-left votes on cases, whereas Republican Presidents would seem to be only 3 for 7, when it came to being reliable center-right radical votes on cases.
So Democrats are four-for-four — a perfect record. Republicans are not even batting .500.

Why is the Democratic record so consistent while the Republican record is so mixed? For one thing, the whole legal and political culture pushes the court to the left. 
I would argue the Republicans have actually been very successful at picking conservative judges and moving the court to the right. I'm not sure what leftward drift Thiessen is seeing in recent Supreme Court decisions. This charts with the rightward drift of the politics in our country over the same period, that would place Barack Obama's politics on par with about where Richard Nixon's were 40 years ago on most big policy issues. Anyway, here's a chart from a Mother Jones article last week showing the rightward movement of the court over the decades.

As you can see by this chart, starting in the early to mid 1970's up through the present, the liberal and moderate justices on the court are getting much more conservative. The moderate justices today are more conservative than the most conservative justices were in the late 1960's. And the most liberal justices today are more conservative than the moderate justices were in that time period.

Thiessen continues comparing the confirmation process of Democratic-appointed justices vs Republican-appointed justices.
Another factor is that liberal Supreme Court nominees can tell you precisely how they stand on key issues and still get confirmed.

Liberal nominees can simply affirm liberal positions, while conservatives must speak cryptically in terms of their judicial philosophy. And as we saw last week, those philosophical statements do not necessarily indicate how they will vote on the bench.
This is true, mainly because the more liberal nominees are simply voicing desire to uphold existing court precedents, which in a weird way is the more small-"c" conservative legal position. If the more conservative justices actually stated a preference to overturn Roe v. Wade and potentially dozens of other 20th century precedents, shockingly they may find more resistance during confirmation hearings.

Imagine if back in 2005 and 2006 when Robers and Samuel Alito were going through confirmation hearings if they had told everyone that if they had the chance they would strike down the campaign finance laws on limits and disclosure. Do you think that would have helped or hurt their chances of being confirmed? Even though the Presidents and activists supporting your nomination are desiring a fairly radical restructuring of the social contract and campaign-financing system we've known for most of the 20th century, their nominees obviously have to clam up about it or else they won't get confirmed. Then that always leaves open the risk that the judge you are nominating may not be quite as radical as you had hoped he or she would be.

So the nomination process in these instances evolved into a game of cat and mouse for a week or two, while the nominee attempts to say as little as possible. Thiessen may not like it, but the country is not quite as conservative as he would like it to be. The Republican nominees are reflecting this reality by giving generic non-threatening responses.

Thiessen then ends with this:
Roberts’s defenders point to his many other conservative decisions and argue that he is not another David Souter or even another Anthony Kennedy. That may be true. But is that really the standard we want for a Supreme Court justice — they are not another Souter or Kennedy? Shouldn’t conservatives expect Republican presidents to do better and appoint another Scalia, Thomas or Alito? That shouldn’t be too much to ask.
Ruling out a judge for being to the left of Scalia, Thomas, and Alito, would also probably disqualify most potential nominees.

Many justices who were considered moderate when they were appointed, end up looking more "liberal" over time, as they stay the same and the court continues moving to the right.  The two most obvious examples of this are John Paul Stevens (Ford appointee), and David Souter (George HW Bush appointee). Both were thought of as moderate conservative justices when they were confirmed and were considered liberal justices when they retired. I still think John Roberts is very conservative. But given this conservative activist view of the purpose of the court, I wouldn't be surprised if the right begins referring to him as "liberal" or "moderate" Chief Justice John Roberts in a few years if he isn't as reliable a vote to repeal the 20th century. It seems Thiessen is already at that point.

Fortune 500 Companies Are Doing Fine

This part of the private sector is doing just fine.

A few weeks ago the media and the Romney campaign jumped all over President Obama's remark that the "private sector is doing fine." He was making a general point that it was doing fine compared to the public sector, which has been shedding hundreds of thousands of jobs since the economic crisis started in 2008.

Perhaps people didn't see this story in the Huffington Post that the Fortune 500 Companies are in fact doing a lot better than fine. In fact they've never been finer.
Fortune released its annual list of the country's 500 biggest companies this week, and it turns out to have been a good year for corporate America. In 2011, the Fortune 500 generated a combined $824.5 billion in earnings -- an all-time record, and a 16 percent jump from the previous year.

The report echos others indicating corporate America is experiencing boom times. U.S. corporate profits returned to pre-recession levels, according to the International Institute for Labour Studies released Friday, hitting 15 percent of gross domestic product.


But much like the too-big-to-fail banks -- whose assets now exceed half the size of the U.S. economy, and which have made more profits since the financial crisis than they did in the eight years prior -- corporations don't seem bothered by the bleak weather on Main Street. They just keep growing.
Here is the entire chart.

One company that caught my eye was Verizon Communications at #15 on the list, who made $2.4B in profit last year (that's profit, not revenue). And then I thought of another story I had read recently by Matt Yglesias at Slate. Yglesias makes the argument that the state of poor quality broadband access is really due to the customers not willing to pay more money for faster speeds. Here's Yglesias' main point:
....But in this particular case, we're not really talking about innovation at all. What's galling—to those of us who are galled by it—about America's broadband infrastructure is that we don't need more innovation. The relevant technology has been invented. What we need are more holes in the ground so that we can fill them with fiber optic cables. This is an expensive proposition, and the basic problem here is that when Verizon dipped its toes into making the investment it turned out that customers didn't want to pay for it. People who write about tech policy on the internet for a living place an unusually high subject value on high-speed internet access, so the resulting situation is frustrating for us. But the problem is really with the customers rather than the companies. There simply aren't enough people who want to pay a premium price for premium service.
When I first read Yglesias' post, I didn't totally buy it. But after thinking about it, Verizon just made $2.4B in profit during a poor economic year for the country overall. So they had a great year. And FiOS implementation is clearly one of the best sources of growth for their business during this time. So with that kind of money available to invest in further roll-outs. it seems much more plausible that the reason Verizon halted this is because not enough customers were willing to pay the higher price.

A few possible solutions proposed by Yglesias [bold mine]:
One way to change that would be to broadly increase household income. This is the kind of situation in which economic inequality spurs technological stagnation. A household earning 20 times the national average income isn't going to buy 20 broadband connections. But if the median household were richer, it might be more willing to pay up for better internet service.
Incentivizing broadband internet investment seems more sensible than incentivizing large houses, and if we want to make that policy choice, there are any number of ways to make that happen either through direct subsidies or through regulations designed to create cross-subsidy.
Expanding access to broadband and wireless connectivity is a real key to growing the economy in the future. The more people who are able to use the fastest possible internet speed will spur other internet-related innovation. Think about what a 56K modem connection limited you to on the Internet 15 years ago compared to what you can do with a fiber-optic cable connection now. iTunes, You Tube, and untold other products or sites wouldn't have been possible without large numbers of people able to connect to the internet at higher speeds.

And this scenario where big corporations have record profits that they aren't using to grow their business is the fundamental macro-economic problem of our time. Businesses didn't stop hiring because of the Confidence Fairy, the Uncertainty Fairy, new regulations, or fear of increased taxes. They aren't expanding or hiring because consumer demand is low and therefore it makes no sense to expand your business and hire more people until consumer demand returns to normal levels. It seems anything short of another round of stimulus spending by the government or some type of changes to the corporate tax code to spur hiring and spending by big corporations and/or a deterrent to sitting on record profits (e.g. a windfall profits tax) will not change this stagnation. And it's hard to understand how cutting corporate taxes even more (the GOP plan) will create more hiring and growth, given these profits.