Friday, October 2, 2015

GOP weakened by its purists

U.S. House Speaker John Boehner announces his resignation.  Maine Gov. Paul LePage vetoes almost all bills, won’t make executive appointments and blocks bond issues.

What do these events have in common?

You could call it “my way or the highway” politics.

Like much of American politics these days, they reflect the battle between purists and pragmatists pursuing “the art of the possible.”

Politicians on the right believe strongly in the policies they advocate.  They would bring government to halt – denying even basic services – to force others to accept their policies.

In reality, they rely on their opponents being willing to accept compromises as the way of doing the public’s business.  The majority might be forced to give ground on some issues to keep government from shutting down.  If the minority purists win using that strategy just once, they would keep trying to control government.

The purists in Congress see themselves as having promised their constituents the legislation dictated by their conservative ideology.  As a result, they believe, if they compromise, they would break faith with their voters.

Most are relatively new to elective politics, and they find themselves in conflict with more experienced members of Congress.  While almost all other Republicans are also conservative, they have learned that partial progress, gained through compromise, produces better results than insisting on complete victory. 

Seeing Planned Parenthood as a ripe target, thanks to videos of an organization official talking callously about disposing of fetal material for research, the purists want no further government money for the organization and are will to shut down the federal government over the issue.

If members of Congress think keeping the government in operation is valuable, they can support defunding Planned Parenthood.  If not, even if they are ideological allies, they become the enemy.  No matter that if GOP legislators shutter the government, they may turn voters away from the party’s 2016 presidential nominee.

Boehner wanted to prevent a government shutdown by allowing a short-term bill including funds for Planned Parenthood, though continuing the ban on funding for abortions.  The bill could pass with the votes of most Republicans and almost all Democrats.  Defunding Planned Parenthood had no chance.

But one of the most conservative members charged that Boehner had “subverted the Republic.”  A group on the right was ready to see if they could dump him, making his survival depend on Democratic votes.  In effect, they claimed to be the guardians of political truth and, if he disagreed, he was a traitor to his country.

In Washington, the insurgents are outsiders, anxious to stop the traditional operation of government by “the establishment.”  In Maine, the insurgent is an insider, the governor, anxious as well to stop the traditional operation of government.

In both cases, the insurgents would rather suspend many of government’s basic services than compromise with others to gain at least some of their objectives.  In a country where voter participation is relatively low and knowledge of the issues is often sketchy, they claim to know a lot about the electorate’s demands.

One recent national survey showed that the biggest problem for voters was that government was “corrupt.” That it was “too big” only came in fifth among concerns.  By corrupt, another new poll suggested they might mean the country gets the best government that money – campaign contributions – can buy.

Gov. LePage, supported by a GOP Senate majority and his own good election results, could have successfully negotiated much legislation to his liking, though probably not 100 percent.  Instead, he gains little, does less for Mainers than he might and, in the view of some, embarrasses the state.

By turning to referendums to get around the Legislature, the GOP also lets the voters get around their governor.  If they think next year’s referendums will help the GOP presidential candidate, it could work the other way, with a winning Democrat bringing out a vote against LePage’s proposals.

The reason why the traditional system produced results was that, in a mass democracy, the only way to take action is through compromise.  That isn’t a plot by “the establishment” to thwart outsiders.   It’s the only way the government of hundreds of millions of people can work.

The Democrats, never a party with the kind of organized discipline favored by the Republicans since the 1990s, naturally understand compromise.  By contrast, the Republicans are undergoing a real split between purists and pragmatists that could end up weakening their hold on government while failing to give the insurgents the uncompromising and absolute power they demand.

Friday, September 25, 2015

GOP campaign focus moves to religion, citizenship

Donald Trump failed to correct a questioner who said President Obama is a Muslim and not an American.  Ben Carson opposes a Muslim being president.

At least five conservative Republican candidates oppose allowing children born in the United States of foreign parents to be citizens.  These are “birthright” babies or, more critically, “anchor babies,” suggesting they are born here mainly to give their parents a way of following them into citizenship.

These views raise both matters of fact and reveal a failure to accept the plain language of the Constitution.

Obama is an American and is not a Muslim.  After the offensive comment, Trump said he would not defend the president, failing to show he was a leader and not merely a candidate exploiting a falsehood.

As for religion, being a Muslim or any other religion or none at all cannot be a block to public office.  Article 6 of the Constitution says, “no religious test shall ever be required” to hold office.

To deal with citizenship as some GOP candidates would like, means abandoning the Constitution, as supported in an 1898 decision of the Supreme Court.

From the outset, all born in the U.S. were considered citizens, except for African Americans and Indians.  In the infamous 1856 Dred Scott decision, the Court said that African Americans, even those who were free, could not be citizens.

Following the Civil War, the 14th Amendment to the Constitution was adopted, saying: “All persons born or naturalized in the United States, and subject to the jurisdiction thereof, are citizens of the United States and of the State wherein they reside.”  That seems clear.

Today’s opponents of allowing the children of illegal immigrants to be citizens say the “born” part of the Amendment was only meant to apply to African Americans and not to Hispanics or others.  They claim it is being stretched beyond the intention of the people who drafted the Amendment.

The facts don’t support that view.  In the congressional debates on citizenship right after the Civil War, some senators raised the question of whether the new rules would authorize including the “children of Chinese and Gypsies born in this country.”  The answer was citizenship would include them and that was the intent. 

In the late 19th Century, while European immigrants poured into the country, Congress blocked any additional Chinese immigrants.  In its 1898 decision, the Supreme Court said Chinese children born in the U.S. were subject to American jurisdiction and thus citizens, even if their parents were not.

One of the two Court dissenters admitted his bias.  Chinese were “a race utterly foreign to us and never will assimilate with us,” he said.  His opposition was less legal than cultural, and that may be today’s message as well.  Diversity is changing the country, and some people are bound not to like the change.

At least some Republicans oppose a path to permanent residence for a largely Hispanic population composed of undocumented or illegal immigrants.  Concerned that assimilating as many as 11 million people already here will change the country or simply believing lawbreakers should not be rewarded, they want these immigrants deported.

Thanks their opposition, Congress has be unable to adopt an immigration policy.  In the absence of action, the Obama administration, while running what is likely the largest American deportation program ever, has tried to halt the break-up of families. 

Obama angers his opponents, because he has extended protection to the immigrant parents of citizens.  His critics question whether he has the authority to take such action, accomplished by giving their possible removal a low deportation priority.  Federal courts will decide that question.

Some advocates of deporting all illegal immigrants believe their children, though born in the U.S., should not be allowed to stay and should leave with them.  The problem is their American citizenship.  But who would take care of the children if they were left behind?

There are a number of obviously wrong answers to these issues.  The children cannot be denied citizenship without amending the Constitution.  Millions of people cannot be deported.  The president’s move cannot become a permanent substitute for congressional action.

The answer is a comprehensive new immigration policy.  Members of Congress should act and take the risks that go with leadership.  That’s highly unlikely with national elections not far off.

The U.S. has benefited from immigration, the cause of great economic growth.  More workers and more customers would help the economy now, but only if Americans and their leaders, themselves descendents of immigrants, will accept the continued assimilation of the foreign born. 

Friday, September 18, 2015

Speaking truth to power: Wealthy told their charity is not enough

“Speaking truth to power” sounds good, because it suggests the speaker’s courage in facing strong opponents.  Often, though, the speaker and the powerful are not in the same room.

However, in July, a New York Times columnist gave an in-your-face speech before the elite and powerful at their annual gathering in swank Aspen, Colorado.  His remarks have attracted unusually wide attention for a speech to a relative handful of people, who did not like what they heard.

Anand Giridharadas, the columnist, was a regular participant in these gatherings.  He had been asked to give a talk on forgiveness, but admitted to his audience, “After I have spoken, I will need your forgiveness.”

The audience was composed of people who had gained great success in their professional and business lives –“winners” as he called them.  They prided themselves on “giving back” by contributing to undoubtedly worthy causes.

His message boiled down to telling them that their charity was not enough, and they needed to reform how they made their money.  But he understood their message was, “the winners of our age must be challenged to do more good.  But never, ever tell them to do less harm.” 

In his view, the way they earned their wealth could do more harm to others than their charitable gifts did good for others.  He chose to focus on the harm.

The winners, he said, have gained from getting even richer in recent years.  And their new wealth did not result from their getting better at whatever they do, but from the policies they supported politically.  They have opposed taxes on inheritances and on many financial transactions and favored laws allowing them to conceal their wealth.

Their actions meant less money is available for education, vocational training, public works, social programs and financial aid.  If you look at countries limiting such tax breaks, more money flows from the more fortunate to the less fortunate.

He argued that the corporate world has made a sustained effort to shift risk from itself to workers.  Companies shed responsibility for benefits and job security for the simple reason it improves profits.

The winners’ institutions have grown remote from others, he said.  Complex investment structures insulate owners from employees and customers.  The recent mortgage crisis provides an excellent example of the gap between investors and the people encouraged to borrow beyond their means.

Giridharadas directly challenged the concept that business methods can solve society’s problems or that pure free enterprise will ultimately lead to all people doing better.

He pointed out that investment did not end slavery or abolish child labor or put fire escapes on tenement factories or stop drug makers from “slipping antifreeze into medicine.”  Clearly, he thinks government deserves some of the winners’ resources for such purposes.

The winners use charitable giving to protect themselves from others taking a close look at how they made their money, he said.  They want to ensure the survival of measures benefitting the wealthy, such as weak banking and labor laws, protective zoning barriers and insufficient efforts to end discrimination.

Of course, the winners can be generous.  In short, it is easier in his view for the wealthy to make tax-deductible gifts to help a few of the less fortunate than to consider sacrificing some of their advantages so that many others can get ahead. 

“For generosity is a win-win, but justice often is not,” he said.  “Ask yourself: Does the world need more food companies donating playgrounds to children, or rather reformed food companies that don’t profit from fattening children?”

Whatever you think of his message, a listener may be impressed with his courage to voice it in front of those he challenges.  Reportedly, he received only a polite response from his audience, though he praised them and professed to find them “amazing.”

Next week, it is likely that Americans will hear something like these words from Pope Francis, who has made these concerns a key part of his message.

Some may see the Pope as intervening in the political debate over the proper role of government.  Yet government itself may not be the issue.  In a more provocative way, such remarks may really be about societies in which the winners form one class and the other class can turn out to be what one candidate calls “losers.”

Giridharadas’ speech or the Pope’s expected message should not be viewed as taking sides in politics as much as an effort to prod some people – the winners – to take more responsibility for the effects of their actions.

Friday, September 11, 2015

Major economies rely on dangerous myths

China’s economy is tanking.  Refugees flood Europe.  Possible interest rate hike threatens U.S.

These three major stories are based on major myths.

China’s economy is in trouble.  Though under a Communist government, the country seems to allow its brand of free enterprise, including foreign investment.  It even has a stock market.

The government has tried to give the impression the benefits of capitalism can be achieved or even surpassed thanks to its ability to intervene and ensure efficient operation.  The stock and other markets boomed, and the economy boasted of remarkable growth.

But the government achieved these results artificially.  While China had something that looked like a free market, the results were actually the result of government manipulation.  Meanwhile, corruption and inflated markets grew.

The new leadership promised to reduce corruption without fully understanding how deep it went.  As it eliminated key people from leadership, China has become nervous about the future.

China’s market growth could not be sustained as prices rose too high.  The government reduced the value of the currency, creating a sense of near panic.  Instead of stabilizing the economy, its attempts to reduce imports, increase exports and support markets came too little and too late.

The result would be that, the market bubbles gone, China would have fewer resources to support its play for world power.  And the reduced Chinese need for imports would pose new threats for the economies of developed countries, though relatively little to the United States.

The myth of the state-run but partly free Chinese economy is fading.

After World War II, some European leaders decided that joining the countries of the Old World together as closely as possible would make it impossible for them to wage against each other once again.  They openly promoted a “United States of Europe.”

Their idea brought about remarkable progress.  National economies became increasingly integrated.  Some countries dropped their currencies in favor of the euro, a multi-nation currency.  The prospect of war in Europe virtually disappeared, not only because of unification efforts, but because the European economy became part of an interdependent world economy.

But some European countries chafed under centrally made rules.  By the time of the 2014 election of the latest president of the European Commission, the European Union’s independent managing body, the winning candidate said he opposed a “United States of Europe.”

The EU has no common refugee policy.  As they have streamed in recent months from the Middle East to Europe, refugees have found some countries, acting on their own, tried to shut the door on their entry.  Refugee access opened only after international attention became embarrassing.

And the common currency was not backed by a common tax policy that could raise the funds to support it in a crisis or by a method of forcing participants to avoid excessive debt.  The Greek crisis eased only when some countries increased bailout funding for their weakened partner.

The euro as a mature, world currency and Europe as a unified region were revealed as myths, though Europe could make them real.

In the U.S., after Congress blocked efforts to stimulate the economy by increased federal spending, the Federal Reserve was left to deal with high unemployment and the effects of the recession.  It lowered interest rates almost to zero to make loans supporting job creation as inexpensive as possible.

Investors, including the pensions funds on which many retirees depend, turned away from buying low-interest bonds in favor of stocks, which have a better chance of producing income.  But each time there has been any hint that the Fed would raise interest rates, stocks have lost value based on the belief that investors would soon return to bonds.

Interest rates have remained low, while, at the same time, stocks have fallen in value.  Not only does that send an inaccurate message about the state of the economy, where unemployment has dropped, but it undercuts retirement incomes.

The market reaction may discourage the Fed from increasing rates even after employment has recovered.  But the market reaction is based on myths.

The truth is the Fed is almost certainly only going to nudge up the rate and will not send it to such higher levels that bonds –lending money – will suddenly look better than stocks – investing money.   
And there is ample history that higher interest rates can co-exist with good stock prices.

In short, like China and Europe, the U.S. has its myths.    Having confidence in myths can be dangerous to economic health anywhere, so now may be the moment to abandon harmful and mistaken beliefs.