Friday, June 26, 2015

Secrecy makes “citizens” into government’s “subjects”

What do these have in common?

The congressional consideration of new trade negotiating authority for the president.

The development of the Maine biennial budget.

The National Security Agency collection of data on Americans’ communications.

Answer: they were all conducted in secret.

In the Gettysburg Address, Lincoln spoke of “government of the people, by the people and for the people.”  When it’s quoted these days, the emphasis in placed on “of,” “by” and “for,” when reportedly Lincoln placed the emphasis three times on the word “people.”  Say it aloud and you will see a big difference.

Now, it seems that government is meant to be “for the people,” but not “of” or “by” us.  Government takes care of us, while we are largely excluded from the process.

The so-called Fast Track trade negotiating authority is supposed to allow President Obama to agree to the Trans-Pacific Partnership deal free from later congressional amendments.  But members of Congress now can only look at the proposed agreement in secret and cannot even take notes much less tell citizens about what they read.

Extensive public debate about the TPP supposedly undermines Obama’s bargaining position.  We more or less have to trust him and the fast readers in Congress to get a good deal with as little harm as possible.

The new Maine budget, which finally became public just shortly before it was adopted, was negotiated in secret.  One member said discussions were “sensitive,” apparently inhibiting some legislators from public deal-making.  Obviously, compromises had to be made, but leaders did not want the public to see the actual trade-offs.  Voters had to accept that legislators had made the best deal for them.

As for the NSA, it wanted access to our phone and email records to protect us, but it could not tell us, as that would tip us off.  And it did not want secret judicial review, because that was not as efficient.   We were expected to trust government to take care of us.

All of these moves may have been in violation of transparency or other laws.  Even worse, they violated the democratic system.

The Constitution is venerated as the basis of our government and, according to its first three words, was made by “We, the people.”  And every law passed in Maine begins: “Be it enacted by the People of the State of Maine.”

The people are the sovereign under our system, but the government has taken on that character and the people look much more like its subjects.

With the exception of the relatively unusual town meeting form of government, a country the size of the United States cannot have direct democracy, where the people themselves make the laws and rules.  We have a representative democracy, which we define as a republic.

The problem arises when the representatives begin to see a gap between themselves and the people who put them in office to represent their interests.  While average citizens cannot follow the details of every piece of legislation, that’s no excuse to keep them from access to the details.

Clearly, this creates a governing process a lot less efficient than a dictatorship.  But democracy is supposed to be messy, even inefficient.  That helps guarantee change can be carefully considered and people will have the time to listen to a debate on issues before action is taken in their name.

Under a system in which the people cannot read every proposal, two institutions have a special responsibility.  One is government itself, which needs to ensure that its actions are conducted in public. 

Government recognized public pressure to know more and enacted Freedom of Information and Freedom of Access laws.  As positive as the open government concept was, it has gradually lost its luster.  Exception after exception has found its way into the law, always for the good reasons cited by its proponents, but almost never in the public’s interest.

The other is the media, the so-called fourth branch of government, which has the job of reporting back to the people on what government is doing and conveying to government public reaction.

To assist citizens, the media should continually highlight every occasion when government seeks to do business out of the public view.  This means bird-dogging government daily, not once or twice a year, and trying to dig out the story.

Instead, media has often become part of the government mechanism, keeping matters and sources secret so that it can tap those sources again later. 

But “later” may be too late in governing “for the people.”

Friday, June 19, 2015

Greek crisis: euro's too weak, dollar's too strong

“That was Greek to me.”  These words, written by Shakespeare in 1599, means something is too hard to understand.

Now, it applies to Greece itself.  What’s all the fuss about and does it matter to us?

The answer to the second question: your job could depend on how the Greek financial crisis is settled.  The answer to the first question reveals a high stakes story of the games countries play.
Greece financed both government and private sector expenses with a lot of borrowing to cover shortfalls in domestic taxes and company income.  In its most celebrated problem, the Greek  government turned a blind eye to tax evasion by the wealthy.

The country uses the euro as its currency.  The euro is the common currency of 19 member countries of the European Union.

But the euro does not work like the U.S. dollar, which is backed by the ability of the Congress to raise taxes to pay off federal debt.  The American currency is backed by the whole country. 

The euro’s strength depends on support from each participating country.  They pledge to keep their economies strong and avoid excessive debt, which in turns creates confidence in the common currency. 

Each country using the euro must report on the amount of public debt, but Greece intentionally filed false reports.  It borrowed much more than it should.

When it could not longer keep up with payments on its debt, Greece turned to other euro countries to be bailed out.  It asked for new loans from them to pay off older loans.

Here’s the key difference with the dollar.  In the U.S., the federal government raises its own funds and determines tax and money policies.  In the euro zone, each country acts independently.  Germany, as the richest country, must raise from its citizens a big chunk of what goes to Greece.

In return for new loans, Germany and others asked Greece to cut back on public spending, increase tax collection, trim pensions, and take other measures to reduce debt.  The International Monetary Fund also made loans to Greece with the same conditions.  The U.S. contributes 18 percent of IMF resources, so it has a stake in the crisis.

To obey the loan conditions, Greece cut spending back so far that it fell into a deep recession with high unemployment.  That made it even more difficult to repay its loans.  Now, it needs more bailout help to avoid defaulting on the first bailout loans.

The more it gets into debt and struggles to make payments through cutbacks harming its economy, the more Greece seems to be in a downward spiral.  As a result, it is really wants bailout funds that don’t have to be repaid.  Other countries and the IMF refuse and insist that Greece make tougher moves to put its house in order.

If this seemingly impossible situation cannot be resolved, Greece will default on its debt to European countries and the IMF.  Then, it would no longer use the euro as its currency – causing the so-called “grexit.”  It would return to its national currency, the drachma, worth little in international finance.

Because Greece is a relatively small country using the euro, the European currency would survive its departure.  But the world would have been put on clear notice that the euro is backed only by good intentions, not by mutual commitment.

The euro has taken on the characteristics of a true international currency, accepted in trade and 
finance as a so-called “reserve” currency.  The U.S. dollar has played that role for decades.  The grexit could cause a loss of confidence in the euro, making the dollar more valuable in world commerce. 

In fact, that has already begun to happen, and each euro equals fewer dollars.  The U.S. stock market seems befuddled by the twists of the Greek crisis story and swings with the latest news from Europe’s negotiations.

A “strong” dollar sounds better than it really is.  If the dollar becomes expensive in other currencies, meaning its takes more local currency to buy a dollar, American exports become more expensive in that currency. 

The U.S. wants and needs more jobs, and many will come from producing goods and services for export.  A stronger dollar not only will undermine efforts to create more export-related jobs, it can cost American jobs now dependent on sales abroad.

American industry and labor have a major stake in the Greek crisis and the euro’s revival.  For now, the U.S. waits on the sidelines as the crisis plays out.

Friday, June 12, 2015

Maine, U.S. sacrifice reputations amid political battles

Appearances matter.  But recently the images projected by the Maine and U.S. governments have contributed to a loss of the positive reputation Mainers and all Americans consider their birthright.

Maine has a reputation of being populated by hard-working people with their own sense of humor and a serious, if not dour, demeanor.  Mainers are often considered calm and solid with a strong sense of community.

The state’s politics have been conducted in a civil and respectful manner, even when there were sharp differences between the parties.

Take the election of Edmund Muskie as governor in 1954.  He was the first Democrat to be elected governor in decades, and he faced an overwhelmingly Republican Legislature.  Yet Maine government was able to produce results with minimal acrimony to the point that both Muskie and GOP legislators were sent back to Augusta after the next election.

These days, Gov. Paul LePage is not getting along nearly that well with the Democrats, who control the House, or with many Republicans, who control the Senate.

After winning only 39 percent of the vote in his first run for governor, he sought to prove his popularity.  His opposition, once again split, allowed him to boost his vote nearly to a majority.

His re-election proved his first victory was no fluke.  But LePage seems to believe that it meant Mainers were giving him a blank check to run state government, and legislators ought to fall in line.

He charged, “the Democrats are going to disenfranchise the Maine people,” meaning the other party would not roll over for him in light of his electoral victory.  He would retaliate he warned, by vetoing any bill “with a Democrat sponsor.”

LePage had made the bold proposal to abolish the state income tax, but this keystone of his legislative package ran into opposition from both Republicans and Democrats.  With three more years in his term, he might have chosen to negotiate on measures moving in his direction and pressed for more later. 

Instead of using the political process and the urge to compromise, LePage went to war.  Beyond making good on his veto threat, he heatedly labeled his opponents as “bums.”

If you are a LePage supporter, you might have hoped he would advance his program as far as he could instead of slamming the door on any possible cooperation, creating a crisis.

Under LePage, the slogan has been “Maine is open for business.”  Almost everybody recognizes the 
need for attracting new business and new jobs, but corporate chiefs look for consistent and rational government before they invest.

A state government in turmoil cannot present that desired appearance.  In waging his political battles, LePage apparently ignores their effect on business development and acts with indifference, as he did when he chased Statoil, one of the world’s largest companies, out of the state.

The political conflict that has come to Maine already exists in Washington.  In an interview earlier this year, former U.S. Sen. Bill Cohen, a Maine Republican, said that the “dysfunctional system” there had become “an embarrassment to me as I travel around the world.”

The world’s greatest power, supposedly a model of open, democratic government is almost paralyzed by its inability to find compromises that gain enough support to produce results.  That comes across as an abandonment of a leadership role that many want it to play.

“Compromise is a word you can’t use any longer,” Cohen said.  Without the willingness on either the extreme right or the extreme left to make concessions, there can be no compromise.  And without compromise in a country this size, decisions become impossible.

In the same interview, former Sen. George Mitchell, a Democrat, found we want competition between the parties, but we also want them to reach compromises.  The difficulty, he said, is in striking a balance.  But you cannot do that if you don’t try.  Or, as in LePage’s case, if the prime dealmaker prefers conflict.

Congress did manage to find a compromise on the USA Freedom Act, which allowed continued N.S.A. searches through telephone data, but added a requirement for court supervision.  An overwhelming majority was achieved in both the House and Senate after members of both parties, concerned about personal rights, moved away from insistence on secret, broad-scale government surveillance.

Both Maine House members, one Democrat and one Republican, and independent Sen. King voted for the compromise.  But GOP Sen. Collins stuck with her party and strongly opposed added protection from government data sweeps.  Though an advocate of compromise, she missed her big chance.

Friday, June 5, 2015

Why the GOP scrambles, Clinton seen as inevitable

It is definitely too early to be paying much attention to the 2016 presidential campaign, with the election 17 months away. 

But Washington seems blocked by partisan deadlock with the conflict between a Democratic president and Republican Congress as the focal point.  So we naturally focus on the future.

Without handicapping the candidates, it may be worth putting the campaign in perspective.  Here are some questions and possible answers.

Why are there so many Republicans in the race?  

There are now more GOP presidential candidates than anybody can remember there ever being in either party.

Perhaps they believe the conservative wave will crest in 2016, making it the best time to be a conservative candidate.  Each candidate wants to seize the opportunity.

With so many candidates, it may not take much support in an early primary to gain traction.  The candidate, who wins with only 10 percent in New Hampshire, could overnight be transformed into a strong frontrunner.  In theory at least, a Republican moderate could hope for this result.

Possibly, some candidates want simply to increase their standing to enhance their chances for a cabinet appointment by the eventual winner.  Or to gain visibility when seeking a lobbyist or television job.  And a strong finisher with an identifiable constituency could even hope to get on the ticket as the vice presidential nominee.

Finally, some of the senators obviously have little interest in their current office and have always viewed it as the route to a quick shot at the presidency.  For them, it’s a matter of now or never.

As for holding early debates, they are unworkable.  It would be better to allow each GOP candidate five minutes to answer the same question than to stage a “debate.”

Why is Hillary Clinton seen as the inevitable Democratic nominee?

All the obvious reasons apply: high name recognition, experience as senator and secretary of state, good funding, extensive political network from her 2008 run, a woman.

But here are some problems: yet another Clinton, not honest about contributions to the Clinton foundation, keeping official emails and probably deleting some, no common touch.

Voters have already given her a negative rating.  But she remains the frontrunner, thanks to her air of inevitability, her attractiveness as a female candidate, and some buyer’s remorse about her not having been picked as the 2008 nominee.   

Is Hillary Clinton in fact inevitable?

No, there’s plenty of time for her to make a mistake that could fatally damage her campaign.  She may seek to avoid damage by saying as little as possible, like Richard Nixon for whom that strategy worked when he was a frontrunner. 

And it is too soon to know if the appeal of Sen. Bernie Sanders or former Gov. Martin O’Malley will ignite support.  She has something to lose; they don’t.  Sanders can promote his agenda; O’Malley may really want to be the vice presidential nominee.  Maybe Secretary of State John Kerry will be a late choice.

Why isn’t Jeb Bush the frontrunner for the GOP nomination?

In 2000, his brother got to be frontrunner by amassing so large a war chest early that he simply scared everybody else away.  Jeb is helping fund a huge political action committee before he formally announces and then will have to keep it at arm’s length.  Though of dubious legality, that may work, but unlike brother George, he has allowed the rest of the pack to get a good head start.

Where does the GOP presidential campaign lead?

The Republican candidate must find a way to be nominated by conservatives, who largely control the selection process, and appeal in the general election to both conservatives and voters who are more moderate than much of the GOP.

In the Republican field, there is a great deal of agreement on limiting the role of government, reducing regulation of the private sector, cutting entitlements, and on social issues like abortion and same-sex marriage.  In short, the candidates mostly share views on what they are against.

The successful candidate, while conservative enough to appeal to conservatives, must find a way to having a broader appeal.  Experience in government could prove to be essential.

In the field, though barely registering at this point, a candidate possibly filling this bill is Ohio Gov. John Kasich, the two-term GOP governor of a key swing state.  He also served nine terms in the U.S. House. 

In 2016, the Republican National Convention will be in Cleveland, which could produce the rare scene of a host state’s governor being the party’s nominee.