Wednesday, February 25, 2009

Left of the Hill's Gerry Connolly Interview

Bryan Scrafford just posted his exclusive interview with Gerry Connolly about Obama's speech last night. Here's a sample:
One of the criticisms that the media has been putting forward is that Obama didn’t lay out enough details during the speech. Gerry, however, said this criticism “is a little disingenuous” on the media's part as they probably would have been attacking Obama for giving a boring speech if he had gone into analyzing bills that are sometimes extremely complex. He also emphasized that he thought Obama delivered many powerful messages during the speech. The portion about how dropping out of high school wouldn’t just be letting both the individual and the entire country down, for instance, was one of the lines that Gerry felt delivered an important example of how the individual can take pride in working for the common good. He pointed out that this call for shared sacrifice and personal action was exactly what was missing during the last eight years.
There's much more, just follow the link to Left of the Hill.

Creigh Deeds Stands Up for Circuit City Workers

Senator Creigh Deeds today called on Circuit City CEO, James Marcum, to continue providing health care coverage, under COBRA, for his laid off workers, all of whom will lose it. Meanwhile, a federal bankruptcy court judge approved more than $4.6 million in bonuses for Circuit City corporate executives. I kid you not, the press release from Deed's campaign is below:


RICHMOND – Senator Creigh Deeds called on Circuit City CEO James Marcum today to keep his laid-off employees from losing their health care coverage and forgo his request for more than $4.6 million in bonuses for senior executives.

Circuit City announced yesterday that all employees will lose their health insurance on March 31st and will not be eligible to extend their coverage under the COBRA health care program. The news broke the same day a federal bankruptcy judge approved more than $4.6 million in bonuses for corporate executives.

“The issue here is fairness. It’s just not acceptable to ask for multi-million dollar executive bonuses while denying health care to laid-off workers,” said Creigh Deeds, “The company failed, so I question why the executives think they deserve any bonuses at all. Corporate responsibility requires that we look out for all of those who have lost their jobs, not just those at the top of the salary scale.”

Circuit City has announced layoffs of 1,500 workers at its corporate headquarters in Henrico County and more than 35,000 layoffs nationwide.
Never mind the sheer chutzpah of declaring bankruptcy, throwing over 35,000 people out of work and ending their health care coverage while rewarding executives with bonuses It seems that the top echelon in the business world have lost all sense of shame and comon sense.

Usually when a worker loses his job, he is eligible to remain in the company's group health insurance plan but, unlike those still employed, he must pay the entire premium. But he still gets the group rate, which makes it cheaper than purchasing an individual plan. But in this case, Circuit City has managed to leave its employees with no health care coverage.

Kudos to Creigh Deeds for highlighting this and taking up for the workers. As for that bankruptcy judge, I'm still just shaking my head. Meanwhile, below is Creigh Deed's letter to Marcum.
February 25, 2009

Mr. James Marcum
Acting Chief Executive Officer
Circuit City Corporate Headquarters
9950 Maryland Drive
Richmond, VA 23233

Dear Mr. Marcum:

I am writing to ask you to reverse your decision to end health care coverage for the laid-off Circuit City workers starting March 31st and forgo your request for more than $4.63 million in bonuses for corporate executives.

I appreciate the concerns you shared publicly in December for maintaining benefits for these workers. However, as the plan currently stands, you are putting executive pay for the few ahead of basic health care for thousands of workers laid-off by your company.

The issue here is fairness. It is just not acceptable for you to ask for multi-million dollar executive bonuses while denying health care to laid-off workers. The company failed, so I question why you think these executives deserve any bonuses at all. Corporate responsibility requires that we look out for all of those who have lost their jobs, not just those at the top of the salary scale.

Again, I call on you to provide health care benefits for your workers and end your plans to provide large bonuses to your top executives. Please feel free to contact me at 804-698-7525 to discuss this further.


Senator R. Creigh Deeds
Deeds hit the most crucial point with one question. Why do Marcum and his top executives even believe they are entitled to bonuses after their business failed? If they wish to save it under reorganization, shouldn't they be showing some responsibility and accountability? And shouldn't their first thought be for their investors, then their own employees and then themselves?

In the New York Times the other day, I saw this quote: "If a truck driver crashes his truck, does he get a bonus for good driving?"

Shouldn't that be the same question we apply to all these ivory tower, gilded executives holding out their hands for public moneys while continuing to suck their own corporations dry with bonuses they don't deserve for performances they haven't met. Who are these people who still think they bring value when they are driving their businesses into failure and then sapping it of money?

Wednesday, February 18, 2009

A Brief Interlude in Florida Is Coming Up

I will be out of town for a few days, so no posting. I'll be down in Fort Lauderdale, visiting my dad. I also have put on comment moderation, something I really dislike doing. But I had a commenter whom I consider to be trollish. And while I'm away I don't want to leave this blog unprotected.

Actually, I think there's been an uptick in trollish behavior on both sides of the aisle. Leslie Carbone, one of the most intelligent and best writers I'm never going to agree with in this life time had to activate word verification for her comments, something she admits she hates doing.

That's why I've always had an open comment policy on this blog. I allow all sorts of annoying comments, from jerks who call me a liar or a f-----g idiot or make unchivalrous observations about my figure. I reason that these losers say more about themselves than about me. And so I delete very few comments, only those that are over-the-top obscene and contribute nothing of value to public discourse.

Unfortunately, this morning I spent more than an hour deleting such comments, and I just don't have the time for that.

I have to admit that I had to make use of word verification for a long time since, for some reason, my site has always attracted a lot of spammers advertising weird products that I'd never use or endorse. But I've resisted comment moderation for much the same reason as Leslie and others have tried to keep their sites' control to a minimum.

I like the free flow of ideas and don't mind people disagreeing with me. In fact, I welcome debate because I learn a lot from exchanging ideas and being challenged. But I am not comfortable with ad hominem attacks, insults and people demonizing others. Come down hard on ideas and don't pull punches. But personal attacks just are unacceptable here. And not just on me. If a commenter who agrees with me launches an unfair and rude attack on another commenter, no matter how much I might disagree with that second commenter, I'll come down hard. I view readers and commenters as my guests. And nobody disses my guests. Debate them, yes. Insult them, not on my site.

By the way, I keep meaning to put up Leslie's blog on my site because I do read it. It would save me a lot of time to just be able to get to it from my own blogroll (I read all the sites on the roll and I have it as much for my convenience as for my readers' sake). So, anyway, it's now up on the blogroll. And by the way, check out this wonderful piece from her on Grant's Bar, also known as the back bar of the Old Ebbitt Grill. It's one of my favorite places too.

If you look hard enough, you can always find something about which to agree with others.

Meanwhile, be good all - or don't get caught. I'll be back next Thursday.

Tuesday, February 17, 2009

Adventures in Circular Logic and Free Market Fallacies

Yesterday, I got a really angry and rather humorous comment from a reader/blogger, who objected to a diary where I suggested that tax cuts have little effect at stimulating the economy. My commenter complained that I used a government study as my source to make that point. The study in question was from the Department of Treasury's Dynamic Scoring Analysis, which was conducted in 2006, in the middle of Bush's second term. The study, in other words, was done by the Republican administration's own Treasury. Nevertheless, here's what the commenter said:
Oh, the Pubs "controlled" the Treasury at the time of this bogus report? Just like they "controlled" the CIA and the AGs office, and the State Department, yeah right. Those places are chock full of liberal careerists who are no more conservative or Republican than I am a Martian.
In other words, if they don't like the message, the conservative's preferred method of debate is to discredit the messenger. So, a report by Treasury, which had a Republican Secretary, John Snow, was biased against the Republicans because the Department's unbiased professional economists didn't toe the boss's line. It is, by the way, to John Snow's credit that he allowed the report to go forward. We know that in too many other cabinet agencies, political appointees actively interferred with scientific studies and, in the case of DOJ, the pursuit of real justice. Political loyalty, not commitment to facts, was the rule in the Bush administration. That, alas, is still true among Republicans, especially of the conservative variety.

Not content to produce junk science, junk economics, junk intelligence, and faux justice, they are now attempting to rewrite history so that the Keynsian economic policies that got us out of the Great Depression suddenly become the cause of it.

I'll get to why they are so wrong about that contention in a moment. First, let's discuss what they consider an unbiased and proper source of evidence for making their argument and why they object to what I consider to be unbiased evidence.

The same people who criticize me for using "biased" sources, like the New York Times, the Department of Treasury, and the Washington Post, never seem to get beyond taking all their information from the Cato Institute and its derivatives. It would be the equivalent of me using the Economic Policy Institute or the AFL-CIO website as my sole sources. In fact, I seldom use those sites, even though I read them, because I know they have a left wing bias, which would make them less convincing to those who don't share my particular world view. I try to use mainstream sources rather than left/liberal sources. So, I don't go the Nation, Mother Jones, or the EPI to back up my arguments in most cases.

The times where I might link to the AFL-CIO website is when I want to inform readers of some event, activity or news item. I might use them as a news source for labor-related reports. That's very different from using them for evidence to back up an opinion.

In GOP-world, however, there is no source but Cato. These writers and bloggers seem not to have an understanding of the notion of circular logic. And they provide few outside, objective resources to back up their claims with objective evidence. They live in a circular little world - ok, let's be less polite, it's a circle jerk, where opinion masquerades as fact, and evidence is badly abused and misrepresented most of the time.

One example is the ludicrous claim, not coincidentally, making its way around Cato and the conservative blogs, that Hoover was a Keynsian and that Roosevelt's programs prolonged and deepened the Great Depression. Wow, what a re-write of history.

As a matter of fact, the Great Depression was a deep, intractable economic bog that mired the country, and the world, for many years. It wasn't truly until WW II that we came out of it. That wasn't because free markets mysteriously kicked in and began working again of their own accord. It's because the government, gearing up for war, spent a lot of money on weapons, uniforms, food, and other war related goods. Factories were converted to produce war materiel. In other words, massive government spending occurred, men were drafted into the army, and a shortage of workers at home brought the country to almost full employment. In fact, the job market was tight, which drove up wages. Remember Rosie the Riveter? She left her kitchen to work in the factory producing the guns her husband and brothers were using overseas. And she made a damned good salary doing it.

Here's an illustration that shows how the Cato arguments are wrong. You'll have to forgive me that it comes from another of those biased sources I always use, this time the U.S. Census Bureau.

As you can see, from the graph, unemployment fell throughout the 30ss and 40s, after Roosevelt's election. To be sure, there were fits and starts and it wasn't a steep, immediate decline. And today's stimulus package also won't bring immediate relief. When things are that bad, it never does. It's like when somebody is seriously ill, they don't recover completely and leap from their sickbed the day after you start them on the penicillin. Sometimes, even with the strongest medicines, it could take weeks for a full recovery. Translated into economic terms, it will probably take several years to see the fruits of the economic stimulus package, but some relief will start to be felt sooner rather than later.

Of course, the chart doesn't tell the full story either. Although unemployment was low in the 1920s, before the Great Depression, that was part of the era known as the Gilded Age, where the disparity in salaries between the ordinary worker and the captains of industry was enormous. The middle class was small. There was a large group of working poor at the base of the pyramid, and at the very top of the pinacle, there was a tiny amount of truly wealthy people, who controlled most of the country's resources. Many people lived in abject poverty, barely able to make ends meet.

The low unemployment from the 1940s onward, was also accompanied by greater real prosperity and a large, solid middle class. It's not just that Roosevelt produced jobs, he delivered well paying jobs, a strong manufacturing base, and a large, strong middle class, which endured into the 1970s and 80s. After the Reagan Revolution, the beginnings of the Second Gilded Age, with its inequity and declining prosperity for the middle class took over - but that's the topic for a later post.

Monday, February 16, 2009

Paper Wealth, Imaginary Wealth

Paul Krugman's column in today's New York Times brings some more bad economic news. It seems that we are even poorer than we thought. That's because we've spent the last decade getting financial statements that told us that our homes, stock portfolios, and 401(k)s were appreciating faster than our debts were. That, of course, was all part of the various bubbles that have kept us thinking we are better off than we actually are.
Last week the Federal Reserve released the results of the latest Survey of Consumer Finances, a triennial report on the assets and liabilities of American households. The bottom line is that there has been basically no wealth creation at all since the turn of the millennium: the net worth of the average American household, adjusted for inflation, is lower now than it was in 2001.
As Krugman points out, this shouldn't surprise anybody because we've turned into a nation of borrowers. Our rate of savings has been heading steadily downward from 9 percent in the 1980s to 5 percent in the 1990s to .06 percent in 2006 and 2007. As far back as the late 90s, when Larry Summers was Clinton's secretary of the treasury, he began to sound the alarm on our declining savings rates. But it fell on deaf ears as the public cheefully ran up credit card debt, took out bank loans, and refinanced their homes with ARMs.

And Krugman isn't too optimistic right now.
And as the great American economist Irving Fisher pointed out in the 1930s, the things people and companies do when they realize they have too much debt tend to be self-defeating when everyone tries to do them at the same time. Attempts to sell assets and pay off debt deepen the plunge in asset prices, further reducing net worth. Attempts to save more translate into a collapse of consumer demand, deepening the economic slump.
Krugman thinks the current economic stimulus bill doesn't go far enough to ramp up demand and get Americans spending again. I'd add that we have been a nation of borrowers and consumers but not producers. The erosion of our manufacturing base and the loss of well paying jobs has added the illusion, mostly on paper, that we were richer than we were. If you produce nothing, consume everything, and merely service everybody, that's not a prescription for a healthy economy because you are not creating wealth anyplace but in your imagination.

Why Tax Cuts Don't Work

There has been a lot of confusing arguments and counter arguments, flying both ways, about the economic stimulus package. Republicans oppose it because they think it’s laden with pork, contains too much government spending, and doesn’t have enough tax cuts, which they think is the real key to stimulating the economy. Democrats have dismissed these criticisms, claiming that tax cut don’t work and pointing out that all the Republicans are doing is proposing more of the same failed policies that we’ve had for the past eight years under Bush and a GOP controlled Congress.

While the accusations are flying back and forth, you would have to excuse the public for becoming more and more confused. They want something done. But after listening to both sides, they’re also scared of what will be done. On the one hand, it makes sense to them that the Republican insistence on more tax cuts may not be the most effective way to jump-start the economy. After all, isn’t that what we’ve been doing for eight years already, just as the Democrats claim? But the Republican counter arguments about the growth of big government and higher deficits scares people who have been told time and again that large government, soaring deficits, and too much government spending are harmful. With all the counter claims, most people, when asked, are simply frozen. They don’t know.

It might be helpful to explain in clear terms why tax cuts don’t work. So far, all I’ve seen is Democrats dismissing it with a wave of their hand, as if the reasons were so self evident that anybody but a dolt would get it.

Well, the American public is not composed of dolts, just people who have been fed a bunch of misinformation, from conservative politicians and corporate owned mainstream media, for so long they no longer know what to believe. It’s time to illustrate exactly why tax cuts won’t work. But first, let me assure you that no less a federal agency than the Department of Treasury admitted as much back in July of 2006, when it released a study called “A Dynamic Analysis of Permanent Extension of the President’s Tax Relief.”

According to this report, in Center on Budget and Policy Priorities:
This study refutes many of the exaggerated claims about the tax cuts that have been made by the President and other senior Administration officials, the Wall Street Journal editorial page, and various other tax-cut advocates. Contrary to the claim that the tax cuts will have huge impacts on the economy, the Treasury study finds that even under favorable assumptions, making the tax cuts permanent would have a barely perceptible impact on the economy. Under more realistic assumptions, the Treasury study finds that the tax cuts could even hurt the economy.

In addition, the study casts doubt on claims that the tax cuts are responsible for much of the recent growth in investment and jobs. It finds that making the tax cuts permanent would lead initially to lower levels of investment, and would result over the longer term in lower levels of employment (i.e., in fewer jobs).

The Treasury also study decisively refutes the President’s claim that “The economic growth fueled by tax relief has helped send our tax revenues soaring,” — in essence, that the tax cuts have more than paid for themselves. [1] Instead, under the study’s more favorable scenario, the modest economic impact of the tax cuts would offset just 10 percent of the long-run cost of making the tax cuts permanent according to an analysis of the Treasury study by the non-partisan Congressional

Now, this study was done by the Republican controlled Treasury back in 2006, the middle of President Bush’s second term, only months before the November midterm elections swept the GOP out of power in Congress. The report destroys all the Republican myths about tax cuts as a panacea for the U.S.’s economic problems, and that was at a time when they had not yet reached crisis proportions. But it certainly points out that, given how much worse our economy has sunk, going along with Republican demands for less spending on shovel ready job projects and more tax cuts would have an absolutely ruinous effect on the economy. We would be deeper in the budget hole and with even less economic growth. The most damning line in this study, in fact, is its admission that more tax cuts would lead to lower levels of investment and fewer jobs – exactly the opposite of what we desperately need to climb out of the hole we are in.

Now, here is why, in simple common sense terms, tax cuts don’t work. It’s simply human behavior. Let’s do a thought experiment.

Let’s say I want to buy a new 9” mini computer, which is on sale. I can get a great price for it right now (by the way, I do want to buy a new mini computer). The problem is I’ve been hearing unsettling rumors about cutbacks and layoffs at work. There’s been talk that my company might be outsourcing some of our work to Mumbai (that part is imaginary, thank goodness)

Now, I have a generous uncle – let’s call him Sammy. And Uncle Sammy knows I have my heart set on that cute little mini computer, so he gives me a thousand dollars as a birthday gift. He tells me to go buy whatever I want and even to put the left over money in savings. Well, since it’s close to President’s Day, the sales are even better. It’s a great time to buy because Circuit City is offering a going out of business sale and everybody else is advertising low costs to compete. So, I will have money left over to put in savings. It’s really tempting and I’ve been out there doing some comparison shopping. But when I get back to the office, I find that my boss is studying Hindi, and his assistant confides that she’s booked a trip for him to look at a plant in Mumbai.

Now, do I spend the $300 on the mini computer, or do I sock it all away in savings just in case I end up like my neighbor, looking for a job and needing to dip into savings? After all, I’m in a field that has already experienced a lot of outsourcing and a contracting job market.

You know the answer to that. No matter how much I want that mini computer, I’m going to do the responsible thing and put the money in my savings account until the economy shows more strength and my own job situation is more secure.

If you think my imaginary dilemma over whether to buy the computer or save my money for a rainy day is just a straw dog scenario that isn’t really playing out across the country, here’s basically the same scenario, used as an example, by Daniel Gross in Newsweek.

Let's say you're a tenured professor of economics at Harvard. You have—and have earned—a great deal of stability and security. Your job is guaranteed, at pretty much the same salary, until retirement. Your employer, which has been around for more than 350 years, isn't going anywhere. The university provides nice health care benefits and contributes generously to a retirement plan. All of which means you can make pretty good plans about your short- and long-term financial future. If we reduce payroll taxes—or eliminate them entirely—the professor will have an extra $200 in his paycheck every month. And that might yield predictable results. Feeling slightly more flush, he might be more likely to amble down to the Coop and buy a few books or a V-neck Crimson sweater or to invest in a summer home on Cape Cod. That's what a rational person would do. And that would stimulate the economy nicely
Back in the day, and in many of the past episodes of postwar recession, the typical American worker resembled a Harvard professor—not in brains or wit, to be sure, but in the shape of her economic life. Many—not all, but a lot—enjoyed long, relatively secure job tenures, steady incomes, and generous employer-provided health and retirement benefits. But the economy has changed significantly in recent decades. And the circumstances that might prod our professor to start spending those tax cuts immediately might not apply to everybody else. The typical worker—white-collar, blue-collar, no-collar—doesn't have anything like tenure or a guaranteed job. In fact, she may be working at a company that has just laid off 10 percent of its work force and may soon lay off more. She may be one of the 3.6 million people who has lost a job in the last year. She may work in an industry in which one large, longtime player has just liquidated. She might still have employer-provided health insurance, but the company may have just jacked up the employee contribution. She knows that if she loses her job, she would have to start spending several thousand dollars a year to purchase health insurance. Meanwhile, this worker—say she's in her mid-40s—is providing for her own retirement via a 401(k), whose balance has fallen by 40 percent in the last year. Oh, and her adjustable-rate mortgage is about to readjust to a higher rate.

So, what happens if you cut this worker's payroll taxes (assuming she's on somebody's payroll and isn't a contractor or self-employed)? Well, she might spend the increased cash flow. But given everything that's going on, a fearful but still rational person might not rush out to spend or invest the money. She might be far more likely—and well-advised—to save it, to build up a cash hoard that would allow her to remain solvent should she lose her job, or to prepare for the eventuality that she might have to buy her own health insurance. Or she might start shoveling that extra $100 per week into her 401(k) to make up for some of the huge losses she's suffered.
As Mr. Gross points out, psychology plays a role in our economic behavior. So does rationality. So, tax cuts, which might make sense in some scenarios, don't work here. There was a time and a situation where cutting taxes was the right solution to a particular problem – back in the 1970s and early 80s, when the highest tax rate was 70 percent. There was a scandal back then over how many of the super rich were able to avoid paying all their income taxes by hiring cadres of tax lawyers and accountants to find them loopholes and tax shelters. So, when conservative economists suggested that slashing the top tax rates would result in more rich people firing their armies of tax consultants and simply paying those reduced rates, the economists were right, at least for a few years. That’s what gave Ronald Reagan a brief window of success with his tax cuts. But low and behold, he slashed the tax rates too much and soon had to raise them back up somewhat, though never back to the 70 percent, which was too onerous.

Tax rates are the lowest they’ve ever been for the upper one percent of people. And all the tax cuts did was raise the budget deficit to staggering amounts, which will make recovery even harder. But the super rich do not spend more when their tax rates are cut more. They already can afford to buy whatever they want and need. And they already have their investment plans in place. Tax cuts don’t influence them to spend more money on those things. When they get back tax money, they simply put it in savings because it’s excess money. And that doesn’t stimulate the economy.

Now, because of job insecurity, even the middle class is no longer spending at the rate it used to. The days of cheap credit, liquidity and easy spending are over. Most people have seen their 401(k)s shrink to about half of what they were, so they are not in an investing mood either. People are scared their jobs are on the chopping block and they are paying attention to beefing up their savings accounts. If you give them a tax cut, they will stick it in savings too. Or pay down some of their debt. All good things. But they don’t provide the stimulus we need. Yet they do run up the deficit.

The way to get the economy moving in this situation is to provide jobs and build the infrastructure. That’s what will get people at the lower rungs of the economy spending again. Once you staunch the loss of jobs, more people will resume purchasing goods, and the demand cycle will get the economy growing again.

Supply side economics might have had a limited use many years ago. But for jump-starting an economy, you need to pay attention to the demand side economic tools. And tax cuts aren’t it.

Sunday, February 15, 2009

He's Baaack!

Lowell Feld is back with a new blog in addition to Article XI. Check out Blue Virginia, which is not a community blog but Lowell's personal thoughts on politics, the environment, and whatever else he feels moved to write about.

Blue Virginia has Lowell's mixture of well researched, brilliant, and snarky comment. Definitely worth a look and it's up on my blogroll.

Thursday, February 12, 2009

Jeff Frederick Butchers History and Science

People of a certain age will remember The Bullwinkle Show from television in 1960s. My favorite part of it was a weekly segment entitled "Fractured Fairy Tales." Well, now, with Jeff Frederick, we can enjoy "Fractured History" and "Fractured Science" as Frederick takes on Darwin and Abraham Lincoln. (h/t to Ben)

Make My Day, Jeff Frederick

Apparently, I hit a sore nerve with a bunch of Virginia conservatives recently. Actually, it was less me than the topic I wrote about. If readers will remember, I posted a light hearted diary about a picket line at the National Airport Hilton in Arlington. The event was listed as an official Inaugural event, as part of the USA Service calendar, encouraging people to get involved in their communities for Martin Luther King Day.

Virginia Republicans are so scared that their precious "right to work" laws might be challenged by citizens seeking economic and social justice that they've gone into full panic mode. It started with this Richmond Times Dispatch editorial:
Blogger Karen Duncan, who bills herself as "proudly liberal since 2005," was clearly acting out of gratitude when she posted pictures and descriptions of Democrats Terry McAuliffe, Brian Moran, Creigh Deeds, and Jody Wagner handing out coffee and popcorn -- and being generally cheerful and supportive -- during a union-sponsored picket line. The event was held on Jan. 19 at the Hilton Crystal City at National Airport.

In the long run, though, businesses will not ignore any decline in Virginia's reputation as a state that respects workers' rights by protecting their right to work. Across the river in Washington, Democrats are preparing an assault on secret ballots and American job creation. The times they may be changing in the Old Dominion, but we suspect Democrats are sorely mistaken if they believe Virginians are prepared to let our next governor turn their state into a Southern version of Michigan.

Supporters of the GOP's candidate for governor, Bob McDonnell, are no doubt delighted to see his opponents lining up for the unions. It might be the first strike in reversing Virginia's blue streak.

Or maybe not. It could be Republicans are sorely mistaken and out of touch if they don't realize that people are fed up with Marie Antoinette CEOs who sock away huge bonuses while driving their businesses into the ground and causing unemployment. Let's face it, during the go go years, when corporations were making huge profits, the wages of ordinary Americans were stagnating. Despite breathtaking productivity, reaching over eight percent in 2005 and 2006, employees never shared in the fruits of their companies' successes.

Now we know why. Greedy executives were feathering their own gilded nests. Well, those chickens have come home to roost all right.

So now all the Republicans have is fear. Fear of equality. Fear of fairness. Fear of ordinary working people.

Picking up on the RTD's rather hysterical non sequitur of an editorial - is there an actual coherent argument or fact to support it - RPV's Jeff Frederick wrote this.
Unfortunately, the Democrats who bothered to gift wrap their cookies for the picketers would like to throw all that away. While statistics on prosperity aren't on their side, at least they have the support of the Communist Party's official mouthpiece, People's Weekly World. A fellow comrade who participated in the protest shared the sentiments of the Democrat candidates...
Of course, it's not Frederick's fault entirely. The RTD put me in the same piece as People's Weekly World. That publication apparently did send somebody to cover the picket line, but that's about the only time I've ever seen or even heard of them. But then I guess Jeff Frederick would call Rabbi Bruce Aft, of Congregation Adat Reyim, who offered a blessing of the picketers and spoke movingly about social justice, a "fellow traveler" too?

But, hey if Jeff Frederick and RTD think that reviving the Cold War in the absence of any actual communists is the way to win, more power to them.

On the other hand, if Jeff Frederick has you in his crosshairs, he's actually more likely to shoot himself in the foot somehow. You know what, he made my day :)

Tuesday, February 10, 2009

Stimulus Bill Passes in the Senate

For good or ill, and with its imperfections, which President Obama admitted in last night's press conference, the stimulus bill passed the Senate by a vote of 61 to 37. Only three centrist Republicans, bucking their party's leadership, voted for it. They are Susan Collins, Olympia Snowe, and Arlen Spector.

As I wrote yesterday, I think the cuts they and Democratic Blue Dogs, like Ben Nelson and Joe Lieberman (actually, he's an Independent), made weakened rather than helped the bill. But I also agree with Obama that it's foolish to let the perfect be the enemy of the good. The bill will go to conference and, hopefully, the cuts will either be restored or no more will be gutted from it.

Meanwhile, any illusion of compromise or bipartisanship was completely shattered by the behavior of Republicans in both the House and Senate. On the other hand, pragmatic governors, left with task of balancing budgets while their revenue streams from property and sales taxes dwindle, are embracing it regardless of party affiliation. One such moderate GOP governor is Charlie Crist, whose own state, Florida, has been among the hardest hit by the bursting of the housing bubble and the economic downturn.

And if there's any doubt that Florida residents want programs that fix infrastructure and create jobs rather than just provide more tax cuts for the wealthiest Americans (a strategy that failed miserably to alleviate the recession), read here:
Thompson and other community leaders gathered Monday at a small hotel to sign a letter to Obama they had drafted the night before. On their wish list: $462 million to pave roads, complete unfinished construction and bail out homeowners in financial distress.
Florida is a swing state that swung reliably Republican for the past ten years. Its current Republican governor is bucking his party's conservatives, both at the state and national level. Its current Republican senator, Mel Martinez, is not seeking re-election. Like Virginia, this state is ripe to be plucked back into the Democratic column. Its citizens are hurting while Republicans are modeling themselves after the Taliban in their tactics of obstruction, and they're bragging proudly about it. In short, they're clowning while adults are trying to fix this mess, which eight years of an MBA Republican president created.

Monday, February 09, 2009

That Taliban GOP

There is a growing anger in this country, and Republicans are badly miscalculating the public sentiment. In today's Washington Post, House Republicans declare that their party is on the verge of a renaissance, having found their voice and returned to their core values. Here's the quote:
"We're so far ahead of where we thought we'd be at this time," said Rep. Paul D. Ryan (R-Wis.), one of several younger congressmen seeking to lead the party's renewal. "It's not a sign that we're back to where we need to be, but it's a sign that we're beginning to find our voice. We're standing on our core principles, and the core principle that suffered the most in recent years was fiscal conservatism and economic liberty. That was the tallest pole in our tent, and we took an ax to it, but now we're building it back."

The second-ranking House Republican, Rep. Eric Cantor (Va.), put it more bluntly. "What transpired . . . and will give us a shot in the arm going forward is that we are standing up on principle and just saying no," he said.
And you'll never guess whom they're using as a role model. None other than the Taliban. If a Democratic blogger called them the Taliban Party, they'd howl like a stuck pick. Yet, that's exactly whom they are modeling themselves after. Again, the money quote:
...Republicans are relishing the opportunity to make a big statement. Rep. Pete Sessions (R-Tex.) suggested last week that the party is learning from the disruptive tactics of the Taliban, and the GOP these days does have the bravado of an insurgent band that has pulled together after a big defeat to carry off a quick, if not particularly damaging, raid on the powers that be.
There actually is a strategy to this madness. They know the stimulus bill will pass. What they are hoping for is that with enough sabotage to that bill by their so-called moderates, allied with some really dumb Blue Dogs, the bill will fail, and the Democrats will own it. They're ok with sacrificing Olympia Snowe, Susan Collins, and Arlen Spector, who never were true believers and have the wrong accent for the base anyway.

And with the Northeastern moderate GOP troika, aided and abetted by Blue Dogs Ben Nelson and Joe Lieberman, the watered down version of the stimulus bill could sputter into irrelevance. That's what Nobel Prize winning economist Paul Krugman thinks.
What do you call someone who eliminates hundreds of thousands of American jobs, deprives millions of adequate health care and nutrition, undermines schools, but offers a $15,000 bonus to affluent people who flip their houses?

A proud centrist. For that is what the senators who ended up calling the tune on the stimulus bill just accomplished.

Even if the original Obama plan — around $800 billion in stimulus, with a substantial fraction of that total given over to ineffective tax cuts — had been enacted, it wouldn’t have been enough to fill the looming hole in the U.S. economy, which the Congressional Budget Office estimates will amount to $2.9 trillion over the next three years.

Yet the centrists did their best to make the plan weaker and worse.
Krugman doesn't think much of the centrists proud boasts that they've cut out the pork and items that, while laudable (their term), are not stimulative. Indeed, he begs to differ.
One of the best features of the original plan was aid to cash-strapped state governments, which would have provided a quick boost to the economy while preserving essential services. But the centrists insisted on a $40 billion cut in that spending.

The original plan also included badly needed spending on school construction; $16 billion of that spending was cut. It included aid to the unemployed, especially help in maintaining health care — cut. Food stamps — cut. All in all, more than $80 billion was cut from the plan, with the great bulk of those cuts falling on precisely the measures that would do the most to reduce the depth and pain of this slump.
And here's what he says about the much vaunted tax cuts that Republicans are still insisting are the most effective way to go.
On the other hand, the centrists were apparently just fine with one of the worst provisions in the Senate bill, a tax credit for home buyers. Dean Baker of the Center for Economic Policy Research calls this the “flip your house to your brother” provision: it will cost a lot of money while doing nothing to help the economy.

All in all, the centrists’ insistence on comforting the comfortable while afflicting the afflicted will, if reflected in the final bill, lead to substantially lower employment and substantially more suffering.
Tomorrow or Wednesday I'll devote a whole post to explaining in easy to understand detail why tax cuts won't work in this crisis. Suffice it to say now, that the three GOP moderates and their fellow traveling Blue Dogs gutted the heart out of a good stimulus package, one which the Republicans will cheerfully vote against but not filibuster. That's because they want it to pass and fail. They hope it's their ticket to winning back some congressional seats in 2010. The problem is it will be a phyrric victory because their tax cutting strategy long ago failed. After all, if tax cuts stimulate the economy, why aren't we prosperous right now?

Meanwhile, for the party that boasted that it was the one that put country first - heck it was McCain's campaign slogan - it's becoming real clear that all they put first is partisn ideology. While America's economy crashes, they're gleefully taking their inspiration from the Taliban.

Meanwhile, here's how it's all working out for those devil may care GOPers. According this poll, Obama still enjoys the public's support for the stimulus package. Although Americans remain deeply pessimistic about the impact of the plan, they want it passed by 75 percent. And according Gallup, Obama still enjoys a 67 percent approval rating for his handling of the economic crisis. Democrats, by contrast, had an approval rating of 48 percent, while 41 percent disapprove of them, and Republicans only have a 38 percent approval rating. Republicans also have a whopping 58 percent disapproval rating.

While most Americans are badly frightened right now and are hearing so many competing voices about the plan, they still remain convinced doing something is better than being the Taliban party of naysayers.

Sunday, February 08, 2009

George Barker to Protect Slugs

For those of you not in Northern Virginia, we have a unique, informal carpooling system. In parking lots, near bus stops, and in park and rides all over the Northern Virginia area, commuters form lines, and cars pick them up so they can get on the HOV express lanes to get to work quickly. On I-95, cars with three or more people get to whiz into work while watching those in single occupancy cars sit in traffic.

Those of us who take these rides into Washington, DC are called slugs. I'm not sure where the term comes from but it's quite a culture, with its own Web site to boot.

When I first described it to my late mother, she simply said, "I brought you up better than that - you shouldn't hitchhike." I had to explain that it wasn't exactly standing by the side of the road and sticking my thumb out, and that the people who slugged into work, and those who picked them up, were all very respectable professionals. In fact, I've had the most fascinating conversations with political appointees, military officers and even one Israeli who is a former officer in the Israeli army. He and a friend, who is a Middle Eastern Berber musician, Kamel, have given me numerous rides and some very interesting discussions. Since I often carpool with my husband, I've been on the other side, as we've also picked up slugs.

Anyway, the coming of HOT Lanes to Northern Virginia has been the topic of a great deal of discussion out on the sluglines. Most of my fellow slugs and those who pick us up don't like it and fear that our very efficient system of carpooling will be disrupted if not destroyed by, what we view, as "Lexus lanes."

State Senator, George Barker, has introduced legislation to protect slugs. Here's his press release:
PRINCE WILLIAM COUNTY – Senator Barker, D-Prince William, Fairfax, is presenting a bill in the Senate Committee on Transportation this afternoon that would protect carpoolers and sluggers who use the HOV lanes on the 95/395 corridor. Negotiations are currently underway with Fluor/Transurban to convert these lanes to High Occupancy Toll lanes. Single occupancy vehicles would be able to pay a toll to use the designated lanes. Sen. Barker's bill, S.B. 1232, would ensure that users of the proposed HOT lanes are able to travel at the same speeds they currently can travel on existing HOV lanes.

Sen. Barker's aim is to protect bus riders, carpoolers and sluggers who are already "doing the right thing." If the HOT lanes are incorporated where HOV lanes exist now, the proposed legislation will safeguard the travel time of passengers.

This legislation would apply to contracts for HOT lanes that are being constructed along portions of I-95/395, between the I-95/395/495 interchange and Virginia Route 234 in Prince William County.

"Drivers in Prince William pick up carpoolers, and they say it works because they can get to and from work and, for the most part, avoid gridlock," said Barker. "Our responsibility is to make sure priority is given to the drivers who use the carpool lanes as intended."
Of course, I'll want to learn more about this bill, but I think it's a good start at protecting a rather unique Northern Virginia tradition.

Wednesday, February 04, 2009

Special Election Wrap Up: Thoughts on What Wins and What Doesn't

First, congratulations to Sharon Bulova for winning and to Pat Herrity for a hard fought campaign that came so close. Now, I can tell you my secret fear was that Herrity would prevail. Special elections and low turnout favor the GOP in Fairfax. It’s how Ken Cuccinelli slipped into a district far more liberal than he is. And once he was an incumbent, he kept his seat with good constituent service and a winning personality.

I think my blogging buddy, Bwana, is right about one thing. Charnielle Herring’s very close election shocked Democrats into working harder, otherwise Pat would have won this election. As I’ve said before, Democrats were fresh from the solid victory in November. They were savoring the glow of success, focusing on holidays and then preparing for the Inauguration. Most people I knew were paying closer attention to securing Inauguration tickets than they were to campaigning for still another special election. Republicans, on the other hand, were hungry for another shot at winning something. I’ve been where they are now, and I know that when you lose, you want to go back and fight harder. Democrats just wanted to relax and bask in the warmth of victory. That made them soft.

But the truth is Republicans should not be consoling themselves because the race was so close. If they couldn’t win this one, they should be very worried. Here’s why.

This could have been the GOP’s perfect storm, the one whose wave they could ride and whose storm surge would sweep Sharon out of the running and put a Republican in charge. As VA Blogger observed, on Too Conservative:

Well, we gave it our best and we lost. For my money, I’m not sure there’s anything much the campaign could have done to make up those 1200 votes. The independent candidates (particularly DeCarlo, who targeted Republicans) didn’t cost the election. The Republican ground game was clearly superior to Sharon’s, and outworked her campaign across the County; Sharon won on by running on her party label and, as Ben said, bringing Braddock District out in force.
I think VA Blogger is right on target that Sharon won by running on the party label and delivering Braddock District. It was, after all, a special election. That means it was a base election and the key to winning was turning out your people in superior numbers to your opponent's supporters. Sharon did that. The question, though, is why did more Democrats turn out than Republicans?

Two things: Bad brand and worse message.

The Republican brand has been battered at the top level. This is just not their year. But more important, the local GOP had a bad message.

Their meme was that this race was a referendum on Gerry Connolly, whom they believe mismanaged Fairfax County. Worse, according to them, Sharon Bulova should be held responsible for the $650 million budget shortfall. In another time and place that might have worked.

But Fairfax is filled with smart voters, people who work for the federal government, defense contractors, and high tech firms. Our county is home to accountants, engineers, business people, and professionals who read newspapers, watch TV news shows besides just Fox, and surf the web. They are well read and well informed. They understand that a local municipality or county gets its revenue stream from property taxes and sales taxes. And they also realize that a housing bubble burst, there have been record mortgage foreclosures and property values have plummeted, all of which brought down the amount of tax money the county could collect. In addition, consumers aren’t consuming. People are cutting back on eating out and buying non-essential goods. So revenue from sales taxes is down too. Furthermore, they realize that Sharon Bulova could no more have predicted that than businesses like Caterpillar and Nextel could have predicted the downturn that caused them to lay off thousand of workers.

And even if they didn’t realize it, the local newspapers, in articles and editorials, pointed it out in two election cycles. Holding politicians accountable is a good thing. Blaming them for things beyond their control, not so much. It’s a failing strategy for winning elections.

Politicians and businessmen are not psychics. They don’t read tea leaves or gaze in crystal balls. Ironically, every time a Republican tried to lay the blame for budget shortfall at Bulova’s feet, it reminded people about who really caused the recession and mortgage crisis, Republicans at the federal level, and their failed policies. That’s why it rebounded on the GOP and Herrity.

In addition, Herrity tried to run on a platform of change, which had worked so well for Democrats in November. But here’s the cruelest irony for him. While voters did want change from the Bush administration and the GOP at the national level, they are happy with the way Fairfax is run. Those who came out yesterday, came to vote against Herrity’s change and for the status quo. Here’s what the Washington Post said:
From Mount Vernon to McLean, from Baileys Crossroads to Centreville, many who did brave wet roads and deserted polling places said they were motivated either to keep the Democratic brand going strong in Virginia or to give their seal of approval to Bulova's promise of continuity. Herrity's message of change, in particular his pledge to bring more scrutiny to county spending, alarmed some residents who are happy with services as they are.

"I wanted to make sure to keep the community centers open so little kids have a place to go," said Nana Osei, 20, who attends Northern Virginia Community College and said the talk there was that Bulova would do a better job protecting such services. "Like they all say, kids are the future."
Meanwhile, Herrity still remains an attractive candidate for the GOP. And each loss makes them hungrier for the next time. For now, though, they need a truly new message, at least, in Fairfax. They need to do more than simply run against the status quo. They need to articulate what they stand for instead. It takes more than a fresh face. It also takes fresh ideas and the ability to say yes to something. It turns out people actually like the programs Fairfax provides. Perhaps telling them you get what you pay for might work?