Friday, August 29, 2014

“Regime change” is a failure



One of the biggest American exports these days is democracy, but it’s a product that isn’t doing very well.

Almost as soon as opposition to a dictatorship appears, the U.S. supports “regime change,” supposedly helping rebels to replace the despot with democracy.  

The list of failures of this effort is depressingly long.  It includes Russia, Afghanistan, Iraq, Libya, Egypt, Syria, and Pakistan.

Americans seem to think it self-evident that a representative democracy – a republic – is the best form of government for any nation.  When people throw off authoritarian rule, we believe they should do the most natural thing and adopt a republican form of government.

But democracy is difficult.  You need only look at the current Washington conflicts over what the U.S. Constitution means in its practical application to matters ranging from the Affordable Care Act to voting rights to see how even a mature republic still struggles.

A look at countries where democracy has failed to take root after the overthrow of a dictatorship teaches some lessons.

Russia has no democratic history.  But, with the collapse of the Soviet Union, the United States and others countries took it for granted that it would install democratic institutions.

While Russia may have adopted the appearance of popular control of the government, it has become clear that the Russian people prefer an authoritarian rule allowing them some limited freedoms.  A majority likes President Putin, largely because he is a throwback to paternalistic control under the czars.

Afghanistan sheltered Al Qaeda terrorists, which justified American military action to root them out.  But the U.S. has engaged in its longest war ever to stamp out opposition and install democracy, so far without success.

The problem in this case is that Afghanistan has never really been a country.  A collection of regions dominated by warlords, it, too, has no democratic traditions or even a truly national identity.  The net result of 13 years of war may be no improvement over the U.S. staying for only 13 months and with more limited goals.

The only surviving justification for the American war on Iraq is that we toppled Saddam Hussein, a ruthless dictator.  But he was no threat to the U.S., because it turned out he wasn’t lying when he said he had no weapons of mass destruction.

Democracy has not been a success there, thanks to a government that has sought to crush or exclude those who backed Saddam, rather than adopting an inclusive system.  The new regime has provoked a violent and even more ruthless reaction by those it mistreated.

In Libya and Syria, the U.S. led the efforts to dump dictators.  But what was the expectation from the replacement regimes?

In Libya, President Gaddafi had already disposed of nuclear weapons and sought more cooperation with the West.  His replacement is a failed country that has no functioning government and warlord justice.

The chaos of Syria’s civil war opened the door to the involvement of regional terrorists, providing them a new base of operations.  It proved impossible to know whom among the rebels to back, as the U.S. sought to avoid funneling weapons to terrorists while backing the rebels.

In Egypt, the fall of President Mubarak opened the way to elections, but this democratic exercise produced control by the Muslim Brotherhood, which then promptly tried to squash democracy and roll over anybody who did not support it.

In Pakistan, while there has been the appearance of democracy, the country is obviously run by the military and intelligence services.  Much of the massive military aid supplied to Pakistan can flow through these services to America’s foes.  And the Pakistani military obviously sheltered Osama bin Laden.

Democracy cannot itself be the policy objective, though it may be the right tool to reach political and strategic goals.  But achievable goals must come first.

And the U.S. needs to do more than roll the dice and trust that democracy will inevitably produce positive results.  Is the opposition capable of creating a viable government?  Is it likely to adopt policies compatible with American objectives?

The U.S. should consider the country and its history.  Will the people welcome democracy?  Do they have any experience with democratic rule?  Is authoritarian government, despite being less satisfactory by our standards than democracy, more likely to produce benefits for its people and the U.S.?

The lessons learned so far seem clear.  A supposedly democratic regime is not an end it itself.  If “regime change” will produce chaos, the abrupt imposition of a system with no roots is not the best idea.

Wednesday, August 27, 2014

Regulators drive electric bills higher



Two new developments show how the restructuring of the electricity industry has gone astray, leaving customers with higher bills.

Restructuring began when the federal government opened the grid – high voltage wires – to buyers and sellers, both independent of the systems’ owners.  Electric transmission became a common carrier, like a bus line, required to carry paying customers.

This change happened because the government finally realized that ownership of power plants did not have to be a monopoly.  By introducing competition among power suppliers, prices should come down.

Competition would also create marketplaces where sellers and buyers could carry out their transactions. 
 
Of course, as with other markets, government might have to adopt and enforce rules to ensure that the power markets operated fairly and nobody would be cheated.  Most markets have developed on their own, but under government regulation.

But this time, it would be different.  The Federal Energy Regulatory Commission decided to prescribe how the market would work and even designate the marketplaces.  Though FERC tried and failed to impose a one-size-fits-all approach nationally, it laid down market rules. 

It started off all right, taking steps to ensure that transmission owners could not use their control of the grid to favor their own power plants.

But, each time a new defect in its rules has appeared, FERC has tried to fix it by making the rules more burdensome and complicated.

It bought into the theories of Prof. William Hogan, a Harvard University economist.  His ideas of how the market would work do not correspond with how it really works, but FERC has not backed off.  His theories have ended up costing customers.

Hogan said that if one part of a market faced higher prices than another, the high-price market ought to buy into a financial deal allowing it to gamble on getting a payoff if the price difference materialized.  With its payment from the deal, it could offset its higher power costs.  FERC approved the gamble.

But utilities and towns are not usually gamblers.  “It’s really a big boys’ game,” said one financial analyst.  Last week, Bloomberg reported that investors, not utilities, made almost $2 billion in the first three months of this year by gambling on the difference between expected and actual prices. 

Of course, they might run the risk of losing their bets.  But a couple of banks were caught rigging bets, and they paid fines.

The risk reduction plan offered nothing to the customers who simply paid the higher price.

Also, last week, a federal appeals court upheld new FERC rules that will end up requiring more major transmission lines.  The rules require customers to pay the costs of connecting renewable power, especially wind generation, to the grid.  That’s a subsidy to investor-backed developers.

In New England and other marketplaces, Hogan’s theories have harmed customers in other ways.

Before restructuring, power was delivered across the region by the New England Power Pool.  It would identify all the available generation and select generators to supply the region based on the cost of fuel each used.  

That meant the lowest cost power was selected first and then generators were added, in order of cost, to cover all power usage.  Each was paid its own cost. 

These days, power is selected based on the price at which sellers offer it to the market.  But all suppliers are paid the same – the price paid to the highest bidder whose power is used.

The theory is that bidders into the market will keep their prices low to be sure to be selected, making the highest price paid to the last supplier less than it otherwise might have been.

Nice idea, but in a market where all the players get to know what all the others are likely to do, prices don’t necessarily come in low.  Even if the theory worked, the last bid price, which all suppliers get, is likely to be higher than the average price if each were paid its own costs.

In short, New England has competition, but that doesn’t assure lower prices for customers.   

Competition, no matter how it works, has become an end in itself and is not guaranteed to produce its desired effect.

Through its government-created markets, FERC has made electricity different from other markets, but its rules have not produced lower rates, the supposed goal of competition.  Most benefit from restructuring has gone to investors.
 
All of this gets a bit complicated, but the simple conclusion is there’s still no proof that customers are better off with a “restructured” electric industry.

Elections hinge on single issue – Tea Party power



The 2014 election campaign has boiled down to a single issue – whether the extreme conservative policies associated with the Tea Party movement will be rejected or prevail.

That means issues ranging from tax reform to health care to foreign policy may seem to matter, but they really don’t.

In 2012, the Republicans lost some seats in Congress, thanks to extreme right-wing candidates, who defeated traditional GOP incumbents and then lost to Democrats, who seemed safer.  In effect, the GOP defeated itself.

The extreme right has continued its drive to capture control of the GOP agenda, so this year provided a new series of tests, especially of Senate incumbents.

The most well known was the challenge to Kentucky Sen. Mitch McConnell, the Senate Republican leader.  By any standard, he is one of the most conservative senators, but he still faced a right-wing primary opponent.  His victory was seen as a sign of the rejection of the extreme right.

GOP Senators Lamar Alexander in Tennessee and Thad Cochran in Mississippi, who might fairly be labeled as moderates, had to overcome strongly conservative opponents.  So did conservative Republicans Lindsey Graham in South Carolina and Pat Roberts in Kansas.

These rejections of the right virtually assured Republicans they would hold onto these seats, essential if they are to gain control of the Senate, which is a real possibility.

But the Tea Party is far from dead.  House GOP leader Eric Cantor lost to a tea partier in a Virginia Republican primary.  And the right wing movement lost some Senate primaries by narrow margins, leaving it defiant, not dispirited.  The Tea Party retains the votes to dominate House Republican policy.

Maine’s GOP Sen. Susan Collins, whose voting record is rated as moderate, successfully discouraged a challenge from the right.  But her position, if re-elected, has to be considered in terms of what happens in the Senate under Republican leadership.

Has McConnell been lining up as a pure conservative to enable him to defeat a challenger or is he really deeply conservative?  Collins and others GOP senators must follow his lead, and, moderate or not, she could end up supporting his conservative policies.

The possibility that Collins would find herself once again backing a conservative McConnell is the best issue Shenna Bellows, her Democratic opponent, can raise.

But some GOP senators now say they want to support compromises.  They see that simply adopting the politics of “no” could cost them in the 2016 elections.

These pragmatic Republicans would rather make some progress on their agenda than win nothing by insisting on completely pure conservative positions.  The GOP problem will be to get their most conservative members to go along.

The mere fact that some senators have come to support compromise over ideological purity may be a sign they are no longer fearful of the Tea Party movement.  Perhaps the electoral victories this year have encouraged them to believe that the traditional, pro-business, small government GOP can succeed without abandoning its willingness to make deals and gradual progress toward its goals.  

Given the extensive use of the filibuster, a Republican-controlled Senate will need to get 60 votes to pass its program.  Only if the GOP moderates its agenda can it hope to pick up votes it must get from middle-of-the-road Democrats.

If the traditional Republicans in Congress, many of whom have strongly conservative credentials, can succeed in convincing their extremely conservative colleagues to accept less than complete legislative satisfaction, Obama seems ready to negotiate deals with them.

The President is probably less of a liberal than the hard right makes him.  Given a GOP Congress willing to accept some progress on its policies as a sign of success, he could work on improving his image just as Congress improves how voters see it.

In short, in both elections this year and in Congress next year, the real issue will be Tea Party conservatism.

That also applies in the Maine election for governor.  Gov. Paul LePage is a favorite of the hard right, but not of a majority of the state’s voters.  He can only win if Democrat Mike Michaud and independent Eliot Cutler cancel each other out.

Cutler has laid out sound and innovative policies.  If the campaign were about issues, he might legitimately claim to be the best candidate.

But the campaign is about whether a Tea Party backed candidate will be reelected.  The election won’t be decided on policy proposals like Cutler’s, but on defeating LePage, and Michaud, with his party behind him, is seen by many as the better bet.

Is the Constitution misused for partisan purposes?



It looks like the Constitution is going to be bent again, adding to a growing trend to use its broad principles to achieve narrow results.

This time, the Republicans in the House of Representatives have decided to sue President Obama for allegedly having exceeded his authorized powers as chief executive.

They claim that he is applying laws passed by Congress in violation of their own provisions.  They want a federal court to decide they are right and order him to pull back.

The Constitution requires a separation of powers among the executive branch headed by the president, the Congress and the courts.  The lawsuit would ask a court to settle a dispute over the powers of the other two branches.  Courts usually stay away from such disputes, and that’s likely to happen now.

Besides, who pays for the lawsuit?  Isn’t all money spent by the federal government supposed to be covered by a bill passed by Congress and signed by the president?

So why is the House, after a narrow majority vote, suing the president?

The short answer is it’s just politics, an attempt to embarrass Obama and weaken the Democrats in an election year.

The long answer is the GOP has frustrated Obama, who has used executive power to do what he thought necessary, when Congress refused to deal with major issues.  In this action, he followed American political tradition.

While the Constitution was meant to ensure the president would not gain excessive power, presidents since Washington have pushed at the limits of their authority.  Because no law can cover every situation, presidents have assumed they could impose their own interpretations or fill in the gaps and issued executive orders.

Presidents have also asserted their power by using so-called signing statements.  The president signs a bill but, at the same time, but says he will not enforce those parts of it he considers unconstitutional.

In fact, Obama has issued fewer executive orders and signing statements than his predecessors.

While the president uses his executive power to take actions that might look legislative, Congress sticks its nose under the presidential tent.  It passes bills trying to direct foreign policy and limiting clear presidential powers.  And it can deny funding to activities it does not like.

The reason why this situation is allowed to continue is the recognition the roles could easily be reversed.  So a party does not complain too loudly if it believes it might similarly want to poach across the separation of powers sometime later.

The conflict between the exercise of executive and legislative power is almost inevitable because of the American system of government.  The elections of the president and Congress are completely separate, creating the opportunity for political warfare.

Under the parliamentary system, the head of the government is a member of the legislative body.  For example, the prime minister of Canada is a member of parliament.  He heads the government, because his party controls the parliament.

If a government under a parliamentary system loses a so-called “vote of confidence,” the prime minister must step down.

In the American system, even when Congress is controlled by the opposition party, it cannot force the president out of office on political grounds.  He or she can only be removed by electoral defeat or conviction after impeachment for “high crimes and misdemeanors.”

It is generally agreed that the two presidents who were impeached but not convicted – Andrew Johnson and Bill Clinton – faced the equivalent of a vote of confidence.  In short, they overcame an attempt to graft parliamentary rule onto the American system.

The House GOP understands that it could not remove Obama and it might be discredited if it devoted several months to drawing up and voting on articles of impeachment.  A lawsuit might accomplish the same result as impeachment by embarrassing Obama.

Some Democrats, believing talk of impeachment would backfire on the GOP, have charged the Republicans really plan to bring the president to trial.

Add to these latest actions the abusive use of the filibuster, holding phony Senate sessions to block presidential appointments, and the failure to reconcile differing Senate and House bills, and the Constitution is increasingly used to block virtually any bills, no matter how badly needed.

If Congress is controlled by the Republicans over the next two years with a Democrat in the White House, the country faces a period of either total stalemate or forced compromise.

What’s a voter, caught in the middle, to do?  We need to ask each candidate which course he or she will favor if elected.