Dec 22 2012

Schadenfreude: Fiscal Cliff Edition

Posted by Steve Ross in National Politics, Policy, shenanigans, snark

schadenfreude: pleasure derived by someone from another person’s misfortune.

You’d cry too if you had to herd feral cats

So I know just about everyone is talking about the NRA’s crazy town response to the Newtown shootings. I think all that needs to be said about the speech delivered Friday is nicely summed up here.

Quite frankly, I’m shocked that anyone was shocked by that announcement. LaPierre has been spouting crazy for the NRA since 1991. Same song and dance, over and over again. It ain’t about gun ownership…its about gun sales. Manufacturers pay the bills at the NRA. Don’t forget it.

So aside from providing a distraction, the NRA event was irrelevant. Unfortunately for everyone, a distraction was needed, in the wake of the massive failure to herd feral cats, some called the display “a clown show”.

How We Got Here

It’s important to remember is how we got here, where it started and who is responsible.

November, 2010 – A wave of of GOP wins in Congressional races, led by 40 candidates claiming “Tea Party” affiliations, leads to the composition of the US House of Representatives flipping from 255 Democrats to 242 Republicans.

August 2, 2011 – In the wake of a contentious battle over the debt ceiling limit, the Budget Control Act of 2011 was passed with bipartisan support. The bill raised the debt ceiling and put in place a series of deep budget cuts and tax increases if the Congress could not reach an agreement.

66 Republicans voted against the deal, which would not have passed without Democratic support.

August 5, 2011 – In the wake of the vote on the Budget Control Act, Standard & Poor’s downgraded the US Credit rating stating concerns with the current state of political affairs in the Congress.

February 2012 – Fed Chairman Ben Bernake coins the term “fiscal cliff”.

July/August 2012 – On July 25th the US Senate passed a proposal that would have avoided the tax increase portion of the fiscal cliff. The proposal was rejected by the House on August 1st.

November 2012 – Elections result in more GOP moderates losing. Democrats gain 8 seats in House. Incoming makeup of the House: 201D – 234R. Incoming makeup of the Senate: 55D – 45R

December 2012 – Negotiations between Speaker Boehner and President Obama net a compromise. Said compromise not brought before the House. Boehner’s bill pulled for lack of support. The House did pass a bill dealing with spending cuts, however that bill has little chance of passage in the Senate and faces a Presidential veto.

This list is hardly exhaustive, but mentions most of the highlights. Had Republicans not tried to make political hay over increasing the debt ceiling, we wouldn’t be where we are today.

The Failure Option

Now I want to be very clear here: while I do get some pleasure from the outright #FAIL that was the Speaker’s effort to pass a watered down version of what he and the President were negotiating, I also understand that a failure to act by the end of the year will have some serious consequences for regular folks. Those consequences will be immediate for all of us, though many of them will have a limited impact.

If they fail to act, the payroll tax cut will disappear, the Bush era tax cuts will disappear, and some pretty stiff spending cuts that no one seems to want will be enacted.

What does this mean to you? Well based on the median household income you will see about $1000/yr less as a result of the payroll tax hike, about $1500 less as a result of the income tax hike, and a whole lot fewer services.

Interestingly, if the Obama proposal were to pass, a household making the median income would see a tax DECREASE of about $225/yr (payroll and income) rather than the increase of $2500 House Republicans seem to favor in the wake of their inaction. You can see how the fiscal cliff and the Obama proposals would impact your income here.

(Note: The tax calculator is provided by the anti-Keynsian, pro-business group The Tax Foundation. They bear responsibility for any inaccuracies.)

The Failure Option – Part II Electric Boogaloo

The financial impact of failure for household incomes is pretty dire. Considering that inflation adjusted incomes have been flat since 1967 for 80% of the population, losing $2500 for a median income represents a nearly 5% hit in real purchasing power. That’s not going to be good for an economy that is just really starting to emerge from weakness. Add to that increased instability from a potential market panic and Joe 6-pack is going to take a huge hit.

Investors know this. They make lots of money knowing this. And while we haven’t seen an increase in incomes to rival the increase in markets (1967 Dow was 825, 2012 Dow was 13190.84 as of the closing bell on Friday, a nearly 1600% increase), the panic that will ensue due to uncertainty if the fiscal cliff is not avoided will hurt average Americans more than investors, who will certainly lose wealth, but not much standing.

Investors have more ways to make money in the face of a market panic that regular folks don’t, including betting on failure. This kind of risky bet is usually only played by the wealthiest individuals and huge investment houses. It may seem counter-intuitive and to fly in the face of what we consider to be patriotic, but remember, in the church of the almighty dollar, anything goes that makes you rich.

Plenty of folks profited from the pain of the Great Depression and the more recent “Great Recession”. There will be winners if a huge market panic ensues come Jan. 2 as well.

Joe 6-pack won’t be one of them, so don’t even think about it.

I feel confident that a solution won’t be found before the end of the year. The House Republicans don’t seem to have the will to give any ground, and in their disarray they have given their Democratic counterparts some resolve to stand their ground. With 201 incoming votes, it will take just 17 Republicans to pass a Democratic measure…should it reach the floor. That seems like a possible scenario now that people are starting to point to conservative recalcitrance as the problem.

The Senate has already passed a bill, which was rejected by the Tea Party led House in August. The House could take the measure back up if they chose to. I can’t imagine that happening before the end of the year. I just don’t think the votes are there before the end of the year.

This means that a market panic is almost a certainty come Jan. 2. The next Congress convenes the next day. We’ll see what they do, but I’m putting my money on passing something like the Senate proposal and dealing with the spending side later…probably right before the next debt ceiling vote which will need to happen before February of 2013.

In the current climate, I just can’t see this leadership actually…you know…leading.

Dec 05 2012

Much is required

Posted by Steve Ross in National Politics

I don’t normally write about national issues, but this fiscal cliff thing is one particularly dumb set of concern trolling on the part of the national media so it seems like a prime target.

Beep! Beep!

Its dumb because as the Wonk Blog explains this is anything but a cliff. It’s a slope at best. A slope to recession, sure, but it’s not as if this is a Wyle E. Coyote moment. Nope, Just a leisurely stroll down Recession Lane.

To be clear, I don’t want to see a recession happen any more than anyone else, but considering the players involved, and the lack of real governance from the Tea Party caucus that rules the roost in the House, there’s no real reason to believe anything other than a pull of the trigger, or an extension of the deadline is on the immediate horizon.

Now I’m sure some of my more moderate friends are screaming compromise right about now. Compromise is a two way street. Getting rid expensive tax cuts for 2% of the American populous at a time when everyone (wrongly) seems to think deficit reduction is what we need to do is the definition of compromise. 98% of the people benefit and there’s some new revenue to satisfy the deficit chicken hawks. Seems like a good deal. If you don’t get that, your definition of compromise involves a great deal of ankle grabbing.

Ward, don’t you think you were a little hard on the Beaver…

Not my idea of a good time, but to each his own.

Of course, ankle grabbing compromise has defined the politics of the past 30+ years. As Nick Kristof candidly explains in this NY Times editorial we’ve been screwing up the future for, by his estimation, 50 years now with cheap tax rates for folks who didn’t need them, that were supposed to create jobs and growth and didn’t. That strategy hasn’t worked and its not going to work. Its time to bring back a new look at an old strategy that did work. 1950’s era tax rates here we come!

In the 1950’s top earners paid as much as 92% on everything they made over $400,000/yr. Don’t believe me? Here’s the chart from the IRS.

Of course, no one’s asking that from the top 2%. Just a return to the 39.6% marginal rate of the Clinton era. You know, the Clinton years, where we had that huge recovery and 4% unemployment? Yeah, doesn’t sound so bad does it?

Republicans are losing their minds over this because according to the funders of their campaigns, any kind of tax increase is devastating. But if the GOP wants a return to the 1950’s, which is something they’ve been saying essentially for 30 years, then why not the tax rates that went with them? Seems to me you can’t have one without the other.

Because, more than anything else, that’s what Republicans want right? A return to a simpler time that never really existed. Remember the coded language of the 1980/90’s GOP? A return to a “simpler” time when “family values” were values and the world was a picturesque reflection of “Leave it to Beaver”.

Honestly, the GOP rhetoric hasn’t changed much since. The difference now is that rather than “Family Values” the right is pushing Prosperity doctrine. If you’re not familiar with prosperity doctrine here it is in a nutshell:

“If you believe/give to the church/etc. more you will succeed”, which by implication means that because you haven’t succeeded, you therefore do not believe enough.

Sounds just like GOP rhetoric doesn’t it? They built it!

Interesting that they ignore the gospels when they quote the bible. Probably because its just too inconvenient. Here’s what Jesus had to say about people who are without want.

For unto whomsoever much is given, of him shall be much required: and to whom men have committed much, of him they will ask the more. Luke 12:48

See, if you read the gospel literally, and I understand that’s all the rage these days, folks that are without want are REQUIRED…called by God, to do more to help people. If they actually did it, then maybe we could talk about some of the rewards they’ve received over the years. But since those guys don’t seem to be holding up their end of the bargain, only bringing mythical job creation, imaginary investment, and the like, I guess its time to return to the prosperity of the distant past to pressure them to do their part for society. We won’t get there by continuing tax cut policies of the past 40 years.

Here’s the dirty truth: tax cuts don’t drive expansion, they drive savings…and we’ve seen a mass expansion of savings for those who have something to save. The rest of us have been limping along barely keeping up with inflation.

He’s so sensitive about saving the wealthy

If it continues, we’ll have the first generation of folks since the Great Depression that didn’t see an appreciable increase in their standard of living or quality of life. That’s something you’re going to be hearing from me a lot over the coming months, because that’s what’s at stake.

As for the fiscal cliff, we’ll just have to see, but I’m not that worried. House Republicans have made their counter offer, weak and repackaged as it may be. Now the Kabuki Theatre can start in earnest. Chances are, they still will not vote for any tax increases, even if it only impacts the top 2% of earners.

That’s right, they’re ready to throw the other 98% of us under the bus for the 2% that pay for their campaigns…like Sheldon Anderson.

Jesus may have said For unto whomsoever much is given, of him shall be much required but you’d be hard pressed to convince the funders of the GOP that their assault on tax equity over the past 40-50 years makes them anything other than victims of the majority, all while they’ve benefitted from our collective 30+ year slumber.

So, you have a choice. You can choose to be scared as hell about this fiscal cliff and all the rhetoric that’s being bandied about, or you can look at what we’ve been doing that’s not working, what we’ve done in the past that did work, and make an intelligent choice.

One thing should be clear. After 30 years of tax cuts for people who don’t need it amidst declining incomes and lower standards of living for millions of middle class Americans, you need to ask yourself if you’re better off than you were, or your parents. If you aren’t, maybe its time to do something different.

Jan 18 2012

Compromise and Discourse in Redistricting

Posted by Steve Ross in Shelby County, State Politics

Problem Solving, Nashville Style

If you’ve been watching the news or reading the newspaper, you’ve probably seen a story or 12 about redistricting. Federal, State and Local levels of government are in the process of doing that very thing here in Tennessee. The photo to the left is House Minority Leader Craig Fitzhugh and Caucus Chair Mike Turner. Both Democratic Representatives in the Tennessee House, they were forced to make a compromise, and did so in the best way they knew how. Rock, Paper, Scissors.

The process at the state level has been shrouded in mystery. Maps weren’t released to the public until a week before session and they’ve been pretty well rammed through both legislative bodies. Overall, while the state process has been about as transparent as a slab of concrete and rife with a bad aftertaste of blind self-interest trumping leadership.

By contrast, the process at the County level has been pretty out in the open. There are more plans than you can shake a stick at here in Shelby County, and all of them can be found here as well as their supporting documents. That doesn’t mean it’s been all roses.

Thursday it was reported that an Arlington Chamber of Commerce meeting turned into a rumble between competing sides of the redistricting battle here in the County. Last night, Terry Roland’s community meeting in Collierville was hijacked resulting in a police visit to the event.

With all the shenanigans surrounding the issue, it would seem that today’s meeting of the County Commission would have the potential to be a barn burner, something confirmed on twitter yesterday by Commissioner Chris Thomas to Lauren Lee of Fox 13.

No one knows what Thomas, et. al. have up their sleeve, but this kind of confidence can only come from coordinating with other elected officials, which just may be a violation of those Sunshine Laws the TN House has decided not to mess with this year.

On the Issue

While the issue of redistricting in the County Government could be framed as an intellectual debate over single-member versus multi-member districts, the reality is this all comes down to ideology. Commissioners Thomas, Bunker, Taylor and Shafer want to ensure that there are six safe Republican seats on the Commission. Mind you “safe” means 60% or more. The easiest way to do that is to make huge districts that pack all the Democrats they can into two-three member districts, and all the Republicans they can into two other three member districts. The final district would be what it would be. Voila! a 7-6 split on party and most likely racial lines.

Now, this only seems fair to the side that’s getting disproportionately more than they deserve. In committee discussions from December, Bunker, Thomas and Taylor all spoke of their concerns about the County Commission becoming 8-5 or worse, 9-4 based on partisanship. Oh the humanity!

Breaking Down Partisanship

I decided to look at some election results. All of these are general elections and can be found at the TN Secretary of State website.

What does this tell us? Shelby County votes Democratic more often than not, surprise, surprise. There is only one instance when Republicans outperformed Democrats in Shelby Co. in the past five November elections, Sen. Lamar Alexander, in 2008.

Taken all together, Shelby County consistently votes about 60.6% Democratic, which translates to 7.88 members of the County Commission.

This is why Taylor, Bunker, Shafer, and Thomas are concerned. This is why they’re asking for 60% majorities in Republican districts by partisanship. This is why they want huge districts. Its easier for a powerful minority to neutralize the majority that way.

African-Americans have dealt with this kind of chicanery since the end of the Civil War. Now, thanks to the Voting Rights Act and several court cases, African-Americans MUST be represented in proportion to their population. Partisanship is not protected, and these four Republicans know they will be rewarded by members of their party for artificially maintaining a 7-6 balance.

What About the Other Three?

Of course, this opens up the question of why Commissioners Brooks, Burgess and Ford, all Democrats, support a plan that would artificially prop up a fledgling Republican minority.

Brooks, who is term-limited, has indicated she would like to see voter outreach and education if the districts are changed to single member districts. Seems simple enough. Maybe someone should offer that.

Burgess has been relatively silent on the issue. I wouldn’t want to opine about his motivations without further information.

Ford, the maker of the motion, with the blessing and assistance of Interim Commissioner Brent Taylor and GOP redistricting guru John Ryder, has been very clear. He has future ambitions. Just days after getting elected in an unopposed August General election, Ford indicated that he would like, someday, to be Mayor.

There’s nothing wrong with ambition. Truth is, ambition can be a motivator that drives people to do more and better than they might do otherwise. We should want driven representatives who use their office to prove their worth and build a name for themselves by representing their constituents in a way that makes everyone want to be represented by them.

But there’s also a downside to ambition. The downside is individuals can work to game the system for short-term gains or worse, lose sight of what they’re supposed to be doing in the name of blind self-interest.

I don’t know that this is what’s motivating Ford, but he has communicated no real rationale for his position other than he doesn’t want the status quo to change and he wants his shot at incumbency protection.

Ahh, more altruism.

It’s About Representing the People that are There Not Protecting Your Incumbency

The original idea about the Census, reapportionment, and redistricting was to ensure that states were getting the representation in the Federal government that their populations deserved. The process has always been political, so lets not fool ourselves.

But in addition it should be about the legislative body that results sharing common interests with the communities they represent. That’s the danger of packing, stacking, and gerrymandering; the people aren’t represented as well as they could be.

My inner optimist wants it to be about actually representing the people, which is one of the reasons I support single member districts. In fact, for the entirety of my time writing at this blog I have advocated for smaller, more direct representation in local government. I have argued that we should have more direct representation in Shelby County than we do in Nashville (we don’t by the way), and that districts should be a collection of neighborhoods rather than these behemoths that cover nearly one-quarter of the population of the County.

Regardless of your partisan leanings, this is something we all should want. Folks in Whitehaven have decidely different challenges facing their communities than those near Riverdale. Folks in Midtown have a different perspective than those in Germantown. Yet, each of these pairings fall into districts that include each other. Downtown is different from Raleigh/Frayser and Millington is different from Collierville. Again, those areas are paired for partisan considerations only, not actual governing from those communities and for those communities.

This is what should be one of the key considerations in the redistricting process. Right now, we have members who are more concerned with maintaining artificial partisan counts and ensuring their incumbency. Truth be told, if you’re doing your job, incumbency isn’t something you will have to worry about.

Making Better Government

If we want a better, more responsive legislative body in the Shelby County Commission, we should demand that the districts be smaller, and closer to the people. Its not about making districts that are easier to run for, its about representing the people the best way possible. Maybe some believe these huge three member districts are better because they ensure that someone is responsive if you get a deadbeat. Well, if you do get a deadbeat, other members of the body shouldn’t be put in the position of covering for him/her thus obscuring reality to the people they are tasked with representing. If they’re bad at their job, their bosses, the voters, should know so they don’t make the same mistake twice.

The Current Districts and Where Commissioners Live

It should also be about serving communities.

The map to the left shows the current districts and where the members live. Note, the areas where there isn’t a member for miles.

Collierville, Raleigh/Frayser, the Summer Corridor, Bartlett, the list goes on.

Single member districts would give these communities a better chance of having more direct representation in County government.

I keep hearing that no one cares about this stuff, but if you’re irritated with the way the County Commission, or the City Council for that matter, deals with issues… If you feel that your area is getting the shaft, if you wish you were represented by someone within a 4 mile radius, maybe you should consider advocating for single member districts.

I don’t know many people who think the Commission is consistently working in the best interests of the County. Part of that has to do with the way the districts are drawn, because that affects who runs and how close to you they live. The other part, well that’s up to the voters. But we’ll never get there if we just decide to tune out and let whatever is going to happen happen.

You have a voice outside of the ballot box. If you think the current system stinks, I think its time you used it. You can find your County Commissioners here or just email them all at once using this link.

Also, post about this on your Facebook page, and make sure to tag them in your post. Maybe they’ll get the message.