“It’s the economy, stupid”—good news turns bad

“It’s the economy, stupid.”

That’s the famous quote attributed to a top Bill Clinton aide in 1992, when he was trying to come up with slogan for the presidential campaign.

It is still true.  While the focus may be on immigration or President Trump’s problems, the issue facing the U.S. and underlying the next campaign is the economy.

Trump claims and gains credit for great economic success for two reasons. 

The recovery from the deep recession has peaked in the first two years of his term.  He gets credit for it, though the low interest rates set by the Federal Reserve and the Obama-era stimulus got the recovery under way well before Trump took office.

Trump also is hailed for the tax cut.  Devised by congressional Republicans, he signed it into law.  It stimulated corporate profits and the stock market.  It gave taxpayers more spending money, boosting sales and cutting unemployment to the bone.  It did not pay for itself.

Economic growth will now begin to slow.  Given its size, the American economy cannot be fine-tuned.  Sometimes it heats up too quickly, causing inflation.  Sometimes, it grows slowly or idles, causing unemployment.  The natural swings are called the “business cycle.”

It now appears that the business cycle will soon decline from its sustained growth.  Through tax policy and the Fed’s money policy, the swing could be limited.  Trump, who was a major business borrower, prefers low rates and may be pleased with the Fed as it keeps rates down to fight the slowdown.

Added to the business cycle is uncertainty, which worries businesses and markets.  When they cannot enjoy confidence in economic policy, they tend to hold back, reducing activity and investment. 

Uncertainty makes planning ahead far more difficult.  Because the stock market is supposed to forecast the future, it may slump or grasp at varying signs from day to day.

Where are we now?  Trade and immigration policies are sending signals that create uncertainty.  Tax cuts have boosted the annual federal deficit, leaving no room to deploy more of them without cutting Social Security and Medicare, which looks politically impossible.

The U.S. has real trade issues with China, so has good reason to be tough.  But Trump seems to think that any American negative balance in trade in goods must be ended, and against all countries, not only with China.  “I am a tariff man,” he says. 

Trump focuses on trade in goods, not services or investment.  He sees the value of imported goods as a sign the exporting country is winning an economic war.  He ignores any offsetting value of U.S. exports.  He likes tariffs, because they bring in federal revenues, helping to offset the deficits from tax cuts.

He overlooks the impact on American exporters who immediately face retaliation from countries whose exports must pay higher tariffs.  American farmers see their soybeans rot and manufacturers lose equipment exports when other countries retaliate against Trump’s moves.

When the president threatens even higher tariffs, he breeds uncertainty among as U.S. exporters wait to see what happens.  They worry about their losses. When they worry, investors worry, and the stock market flutters and falls.  Pensions are dependent on the market and suffer, making retirement more risky.

Add the immigration situation.  It is likely that a majority of Americans worries about excessive, illegal immigration.  Stemming all immigration is a central element of Trump’s political appeal.  To prove his seriousness, he expels long-term productive contributors to the economy as both workers and consumers.

Low unemployment is appealing, but the country is reaching the point where jobs go unfilled for a lack of workers.  Blueberries, a major Maine product, went unharvested this year without migrant workers.

Some may worry about China displacing the U.S. as the world’s largest economic power. Not only are there a lot more Chinese, but U.S. anti-immigration policy would result in a gradual decline in the American population, reducing the size of the domestic market and the ability to produce for the world market.

Dealing with this range of economic issues is complicated and difficult.  Like it or not, the U.S. is part of a world economy.  Easy political promises may have easy popular appeal, bringing cheers from the crowd, but may prove impossible to fulfill.  There is no silver bullet. 

Isaac Newton, the great British physicist, found that every action has an equal and opposite reaction.  The task is to understand effects of actions.

Trump’s policy is “America First,” even if it isolates the country.  The reaction to “America First” may be economic chaos and decline.

Congress, Maine need more, better term limits

Who needs term limits?  We got them this year without a law.

Term limits are supposed to ensure turnover among elected officials, breaking the power of a few bosses and bringing in new legislators attuned to the popular will.  They don’t exist at the federal level, and the Maine version needs a truth-in-labeling review.

This year, without any formal requirement to retire members of Congress, voters produced 100 new faces in the House of Representatives and 10 new senators, where the Republicans gained seats.

The Democrats picked up 40 House seats, resulting in a shift of party control.  President Trump’s waning popularity in suburban districts gets much of the credit.  To be fair, the president’s party historically loses some House seats, when candidates lack the presidential candidate’s coattails.  But this setback was bigger than usual.

Many senior GOP House members decided not to seek reelection.  Some were obviously unhappy about life with Trump.  Others, finished being committee chairs, opted to cash in on their experience. The political rise of women, as candidates and voters, led to House-cleaning.  

The model for term limits was George Washington who gave up the presidency after two terms, though he would surely have been able to be reelected.

Washington’s precedent was the unwritten term limit for the president until Franklin D. Roosevelt was elected four times.  That prompted a constitutional amendment limiting the president to two terms.  No other limits were adopted, even for the vice president.

The argument against term limits is that officials become experts on issues and on how government works, when they hold office longer.  Otherwise, short-termers might be open to influence by bureaucrats or lobbyists.

In practice, legislators leave the details of lawmaking to bureaucrats and are open to influence by lobbyists who contribute major funding to their campaigns.  The promised benefits of holding office for long terms appear to work better in theory than in reality. 

Political courage suffers when an official focuses on political survival.  Look at GOP Senators Bob Corker of Tennessee and Jeff Flake of Arizona, the two most outspoken critics of their party’s president.   They could only challenge President Trump, because they were not seeking reelection this year.

There is no chance the necessary constitutional amendment to make term limits the general rule would be adopted.  That would require the consent of the very members of Congress whose terms would be affected.

House Republicans provide a partial solution.  They limit members to six years serving as a committee leader.  Then, each must cede the seat to another Republican.  No law is required for a party to set such a rule for its own members.

One result is that, after a chair’s term ends, he or she may be reluctant to fall back into the ranks.  Instead, they often retire and take a job where they can use what they have learned in government.  Though turning government service into personal profit is less than ideal, it does ensure legislative change.

Concerns about Nancy Pelosi as House Democratic Leader or Mitch McConnell as Senate Republican Leader could be eliminated if they were subject to similar term limits.  However experienced they are, they would be forced to allow younger people to learn about leadership.

The effort to replace Pelosi this year has fallen short.  Some new Democratic members, who do not back her, are likely to be needed to put her over the top when the full House votes in January.  Second District Rep. Jared Golden and his anti-Pelosi allies could offer their support in return for a deal on leadership term limits.

Change would also result from bringing all congressional districts down to be as close as possible to equal population.  Seats can be added by Congress itself, something it has not done for a century.  There would be roughly 100 new faces in the House.  

Today’s leaders hold on thanks to the reliable support of their long-term colleagues.  An enlarged and redistricted House could eliminate many of today’s safe seats.  With more elected officials seeking top roles, leadership limits become possible.  So, even without formal term limits, the parties can make them happen.

In Maine, a person is limited to only eight years as a House or Senate member.  But they can then jump to the other house and back again endlessly and some do.  After two terms, a governor can take a term off and run again, as Gov. LePage now threatens.  

Maine law makes a mockery of state term limits.  The voters could fix this sham.

Sen. McConnell, one-man government, wields great power

The country is torn by partisan conflict.  Many blame President Trump, but he is exploiting a split that existed before he took office.

One person deserves even more responsibility for the failure of the parties work together – Sen. Mitch McConnell of Kentucky, the Republican Senate Majority Leader.  Winning partisan battles is his sole purpose.

As the new Congress convenes, the most important single vote Sen. Susan Collins casts will be to re-elect McConnell as the head of her party in the Senate.  One of the few GOP moderates, she has been loyal to McConnell who promised her campaign funds after her vote in favor of Brett Kavanaugh’s appointment to the Supreme Court.

However moderate Collins may be, she helps enable a man who has done much to block bipartisan legislation, to destroy the presidential nomination process, and to promote maximum partisanship.

Most Maine voters probably care little about McConnell’s influence and Collins’ support.  She may worry that she will get the worst Senate committee assignments if she does not back him.

“I’m the one who decides what we take to the floor,” McConnell says.  In practice, that means he can prevent the Senate from considering any bill he dislikes.  The remaining members of the GOP majority have simply ceded total control to him.

While the role of the Majority Leader is to ensure the orderly operation of the Senate, his (there’s never been a woman) powers can lend themselves to partisan or personal abuse.  McConnell is the textbook case.

The Constitution states that presidential appointments to the Supreme Court depend on the Senate’s “advice and consent.”  It can approve or disapprove the nominee.  But McConnell has positioned it to do neither, in effect evading its constitutional responsibility.

When a vacancy occurred more than a year before the end of President Obama’s term, he appointed Merrick Garland, a distinguished federal appeals judge, to fill the vacancy.  Garland is a moderate, and McConnell found him insufficiently conservative. 

He gambled that the next president would be a Republican who would name a conservative.  To make that possible and to avoid any negative reaction to his denying the position to an obviously qualified nominee, McConnell simply blocked senators’ contacts with Garland and prevented a hearing on the nomination.

McConnell departed from obvious constitutional intent and removed the power of appointment from the president.  Though Democrats remain resentful, McConnell got away with his power grab. 

In 2013, he did his best to torpedo a bipartisan agreement on immigration reform.  Unless almost all Republican senators would vote for it, he would oppose it.  He would support bipartisan bills only if the Democrats could not take credit for their passage.

Much the same is taking place now.  Bipartisan agreement has been reached on criminal justice reform, which he personally opposes.  He claims too little time remains this year to deal with it, despite its broad support, including from President Trump.  Once again, he sets himself up against the president, even one of his own party.

Before the Garland case, he insisted that every judicial nominee should first obtain 60 votes as the gateway to the final simple majority vote.  By invoking this rule, he blocked almost all Obama judicial appointments.  Then, the Democrats controlled the Senate and changed the rule to require a simple majority to end debate.

Democratic Senate Leader Harry Reid left the supermajority in place for the Supreme Court.  When McConnell took over, he applied the simple majority to Trump’s two appointees, who made it to the Court.  Ignoring his own past obstruction, McConnell blamed his change on what Reid had done.

When asked to allow a bill protecting Special Counsel Robert Mueller from any White House move to end his investigation into the 2016 elections, McConnell said there was no need for it.  He claims Trump would not end the inquiry, despite the president’s constant criticism.

People elect senators in the belief that each, with the same vote, carries equal weight.  Yet the senators automatically turn over some of their most critical powers to a single person.  That might have promoted efficiency, but excessive efficiency is the enemy of intentionally disorderly democracy.

McConnell’s control relies on party loyalty, as did Reid’s.  He acts like a military officer, keeping his troops in line.  The will of voters or even of the senators themselves is lost. 

Public office is no longer a public trust.  In the Senate, it’s all about trusting McConnell.

Senators are unwilling to stand up to McConnell’s arbitrary rule.  Mainers may wish that Collins would take that risk.