Monday, February 25, 2008

It's Only A Flesh Wound -- But It's My Flesh

It's hubris to think you can channel either Art Buchwald or Calvin Trillin, but I did get a compliment from a reader who appreciated how hard it is to do comedy. ("Ask me what's the secret of comedy!") Then a repeat 'winger correspondent wondered why I put in such obscure Republicans as Kyl and Shadegg but didn't mention McCain, although McCain's mentioned twice. Go figure.

The editor gave me top placement this week as Linda Turley-Hansen decided to write on how terrible it is that that Eve Ensler play is at ASU. Imagine that my column would outrank the anti-feminist version of "You kids get off my lawn!"

East Valley Tribune, Feb. 24, 2008

I bumped into my old friend Wilfred J. Gullible, who hadn’t appeared in a newspaper column since Art Buchwald died. He looked just terrible. “What’s wrong?” I asked.

“It’s my absolutely necessary, life-saving medical treatment,” he replied. “It’s been an ordeal, and it isn’t over. And I’m not sure I can afford it. But I’m just grateful that I’ve gotten advice and treatment from the best doctors.”

“I’d want the best doctors, too,” I said. “What was wrong with you, anyway?”

Gullible explained that after a scare, he decided to see a specialist. “I asked around, and everybody who claimed to know about medicine -- you know, on cable shows where people yell at each other behind multiple layers of graphics -- said that the most experienced, the most serious doctors they knew were Dr. Bush and Dr. Cheney.”

“So I made an appointment, and they ran a couple tests, and said that while nobody had absolute certainty, they couldn’t rule out the possibility that my liver might develop dangerous lesions that, left unchecked, could destroy my body,” he said.

“Liver lesions?” I asked.

“Dr. Bush called them welts of mass destruction,” Gullible said. “He and Dr. Cheney said we simply couldn’t take the chance that the liver wouldn’t develop WMD capability -- so we had no choice but to go in and take it out.”

“So what happened when Dr. Bush removed your liver?”

“Well,” Gullible said, “It turns out that those liver bumps weren’t WMD after all, but just bumps. Then, my doctors had thought that the organs around the liver would be overjoyed by removal of the threat of liver-based WMD, but it turns out that the liver does all sorts of important stuff for your body. I now have to take expensive drugs and treatments for the rest of my life. Another doctor in their practice, Dr. McCain, said that it wouldn’t be a problem if I were on liver drugs for a hundred years. At least not a problem for him.”

I asked, “But how do you feel about living without a liver -- especially once you found out there were no WMD?”

Gullible replied, “Once we invaded my liver, we had no choice but to remove it all and substitute all these expensive drugs. The consequences of withdrawal would be too great. I’m just grateful that I used the most experienced and most serious surgeons for my treatment -- if I can afford it.”

“What do you mean, if you can afford it?”

“All of the surgery, and the rehab, and these liver drugs are pretty expensive, and my insurance gave out long ago. And it’s a double whammy for me, because my investment advisors, the firm of Kyl and Shadegg, took all my investments and made me a budget that didn’t include any of my medical costs.”

“These guys are serious, though. Apparently using their accounting standards, money spent chasing WMD simply doesn’t count. They’re on me every day about so-called “wasteful spending,” like getting a large coffee instead of a medium -- that’s 80 cents! But I’m spending hundreds of thousands on the costs of my liver surgery and drugs, but that’s just not registering with my advisors. But I still have to pay the bills, so my net worth is drying up,” Gullible explained.

“So what’s next, Gullible?” I asked. “Do you have any hope for recovery?”

“Bush, Cheney, and McCain now have me seeing a new doctor, who thinks he knows what I need now,” said Gullible. “It’s another really serious guy, Dr. Lieberman. He wants to take out my kidneys, because he thinks they represent the greatest threat to my health since Hitler.”

“Isn’t that what they said about your liver?” I asked

“Sure, but maybe this time, they’re right,” said Gullible. “And it would be important to keep all the options -- including radical surgery -- on the table.”

I replied, “But I thought doctors all took the Hippocratic Oath. You know, ‘first do no harm.’ Shouldn’t you try something else before more surgery?”

“Oh,” said Gullible. “That’s so pre-9/11. These days, it’s bomb first, think later.”

Tuesday, February 19, 2008

Life on the Margins, 'Winger Style

We’re doing the economic nerd thing this week. My original headline was above but the editor improved it.

East Valley Tribune, Feb. 17, 2008

This week’s column is indebted to the blog of Harvard University
Prof. Jeffrey Frankel, which I stumbled upon while researching recessions. Frankel serves on the Business Cycle Dating Committee of the National Bureau of Economic Research. Rather than fixing up lonely graduate students, the committee reviews economic data and officially designates when recessions begin and end. It’s all retrospective; the committee announced the end of the last recession, in November 2001, in July 2003. NBER will tell us if we’re in a recession; unfortunately, they won’t tell us for 2 years.

Recent blog posts by Prof. Frankel also had some interesting insights into a bit of conservative dogma, the effect of marginal tax rates on work incentives.

You can take a basic principle -- people need to drink water -- but can push it to deadly extremes of water intoxication or hyponatremia (the physiological version of the fraudulent claim, “cutting taxes boosts revenue!”). So, too, with marginal tax rates. Yes, if additional earnings faced 100 percent tax, people would lack incentive to work more.

But we don’t have 100 percent rates, or anything close. Current rates, in the mid-thirties, don’t generate those outsized incentives. So while marginal tax rates affect behavior, the effects at current rates are rather small. Do you
personally know anybody who stopped working because of a tax hike -- or who started working harder because of a tax cut?

Conservatives profoundly believe that marginal tax rates have a huge effect on work incentives, but they have a rather narrow attitude toward those affected by those incentives. It’s well-known that effective marginal tax rates on people at the bottom, trying to escape poverty, are often much greater than the rates on the really rich. Unfortunately, the tax cuts enacted by the Republicans over the past seven years went overwhelmingly to those at the top, and ignored those trying to lift themselves by their proverbial bootstraps.

It’s called the “poverty trap,” and Frankel and his colleague Jeffrey Liebman recount the story of a woman doing her part to achieve the American dream, but it was backfiring. She had a $25,000 a year job, then got a $35,000 a year job but had less money.

The new, higher-paying job cost her hundreds of dollars each month. She no longer qualified for Medicaid, and instead had $230 per month deducted from her pay for health insurance. Her subsidized rent increased by 30 percent because of her increased income. She also lost her access to child care vouchers, which helped subsidize her child’s after-school care by $280 per month. Her increased income also reduced her Earned Income Tax Credit payment by an additional $1,600 per year. The new job required a longer commute, with about $300 per month in gas and parking that she didn’t have to pay before. And, of course, her payroll taxes at the new job were higher. Add it all up, and her marginal tax rate was closer to 130 percent.

Maybe the heartless libertarians among my readers think the poverty trap is just big, bad government at work, and that there just wouldn’t be any disincentive for work if the single mom hadn’t had access to subsidized health care, rent, and child care. But then the single mom and kid couldn’t have survived at $25,000 a year. Maybe you consider their lives irrelevant, even disposable, simply not worth your time or taxes.

But wouldn’t your anger be better directed at those who did benefit so much from the tax cuts of the past 8 years, and their political servants who sent that largess to them? Wouldn’t it have been better to do something about the poverty trap than to shower yet more tax breaks on the wealthiest?

Was it really so utterly miserable to be a millionaire in 2000 that we just had to cut their taxes -- without doing anything to help the single mom with the new, better-paying job, who now has less money and can’t make ends meet?

Monday, February 11, 2008

Some Miscellaneous Stuff That Didn't Fit Elsewhere

1. I’m the D talking head on public TV's Horizon show (channel 8) both tonight at 7 pm and next Monday 2/18. Rep. John Loredo got sick and I was today's substitute Democrat. (Update: Here's the link to the video. I think.)

2. Roll Call is reporting that Rep. John Shadegg
will announce his retirement tonight. This is for everyone who asked me if it made sense to give money to Bob Lord. Guess it did.

3. Sunday’s Arizona Republic featured a
“news” article by “reporter” Matthew Benson, entitled “Obama’s loss in Ariz. Stings Napolitano / Governor campaigned for Ill. senator.” Sources quoted were the Washington Post political blog (the media quoting itself!), two GOP political consultants (two separate quotes from the one who ran the campaign of Napolitano’s unnamed 2006 GOP opponent), Napolitano’s press secretary (1 sentence), and the executive director of Arizona LIST, which is described as a group which backs “women in politics who advocate for abortion rights.” Arizona LIST is actually modeled after EMILY’s List, and on its website says it’s purpose is electing pro-choice Democratic women, but Benson omitted that fact so that the only people in the column given a party affiliation were the Governor and the GOP consultants.

Not only was there no polling data (how about state polls of Obama vs. Clinton both before and after the endorsement?), the need to ask a single Democrat qua Democrat about any fallout for the Governor apparently didn’t make the Republic’s radar. I’m waiting for a Republic article on John McCain that similarly only quotes Democrats. I expect to be waiting quite a while.
If There's A Forest of Bad Arizona Economic News, Will Any Dead-Tree Papers Print It?

I think of myself as an active consumer of local news, particularly the business section, and I’ve read lots about the ASU predictions of tougher, slower times but nothing about the U of A call that the state is already in a recession. I realize we’re all boosters here in Arizona, but occasionally it helps to let some of the bad news out early if it’s going to come out anyway.

Regarding the economy, did you know that the Rs don’t want to call it "employer sanctions"; the new politically-correct term is “worksite enforcement.” And what better way for our GOP-controlled legislature to deal with a recession than by (1) making it more cumbersome for businesses to hire new workers and (2) spending money locking up illegal aliens, increasing government expenditures and keeping them from earning money and consuming? Makes perfect sense.

My rushing-out-the-door suggested headline was “Recession? It’s Already Here,” but the editor gave me more space and more words. But weren’t most of the dinosaurs actually fast?

East Valley Tribune, Feb. 10, 2008

It didn’t make quite the splash of the 1988 Barron’s article “Phoenix Descending -- Is Boomtown U.S.A. Going Bust?” but last week The Washington Post had a
page 1 article with similarly bad news: “Housing Crisis Casts a Cloud Over Sun Belt / In Once-Booming Areas, Help Could Be Too Little, Too Late.” And the news is worse than 20 years ago.

The article focused on how the various stimulus packages being debated in Washington won’t do much to help housing rebound. But it’s not clear that any federal stimulus package (especially consumer-oriented tax rebates and business tax incentives) could re-inflate a burst housing bubble.

The really sobering lesson in the article has little to do with tax rebates, interest rate cuts, and overextended homeowners facing bigger loan payments on houses dropping in value. That’s the bad news. The worse news is what all of these factors mean for the overall Arizona economy.

In Phoenix, construction -- primarily residential housing -- represents almost 10 percent of total employment, 1.5 times the national average. The area’s total output, which grew by 7 percent last year, is expected to drop in 2008. (Even during the worst of the S&L era, we still had positive growth.) Some 13,000 homes in Maricopa County are in foreclosure. Our concentration in a rising real estate economy helped Phoenix boom while things were good, but now will make not-so-good times even worse.

Lee McPheters at Arizona State University wasn’t willing to go as far, University of Arizona’s Marshall Vest already decided in December that regardless of whether the national economy goes into recession, Arizona, California, Florida, Michigan, and Nevada already were. For the Sun Belt states on that list, blame the collapse of the housing market; in Michigan, it’s the decline of the auto industry.

Another illustrative statistic comes from
Forbes magazine. Using data from RealtyTrak, the magazine said Maricopa County ranks third in the country for the number of foreclosures with “negative equity,” where the amount owed exceeds the value of the house. The national leader is Wayne County (Detroit), Michigan, where the auto industry’s long-standing decline is reflected in declining home values. Nearly 40 percent of the houses in foreclosure have negative equity.

In Maricopa County, the percentage is much lower, 15.9 percent. But that number may be deceptive. Having such a low number of foreclosures with negative equity could mean that many homeowners with adjustable-rate mortgages couldn’t manage higher payments, and are walking away from their homes, unable to sell in a declining market, even though they’re leaving equity behind.

But it’s also possible that the property’s current appraised value (which RealtyTrak uses to calculate equity) is higher than the actual market value, and that as values continue to drop, the negative-equity percentage will increase. Appraisers in Detroit have had years of experience dealing with declining values, so their numbers may be more accurate than participants in the Phoenix real estate market, to whom declining prices are like snow, something we only read about.

Leave apart the irony of Forbes magazine -- Capitalist Tool! -- now offering readers handy tips on arranging a short sale. You used to hear a lot around here how we have a post-industrial, diversified, services-based economy. But it turns out that what the auto industry is to Detroit, residential home construction is to Phoenix. Maybe people, after a brief pause, will resume moving to a place dependent on the automobile, with half-completed infrastructure, little social capital and investment, lots of nearly-vacant edge subdivisions, a noisily-angry attitude about immigrants, and a weak governmental financial structure -- but that’s not a slam-dunk bet.

We’ve laughed for years at those dinosaurs in Detroit, dependent on the auto industry. Maybe our similar dependence on growth and residential construction just makes us slightly more modern dinosaurs. Sure, Michigan may be Jurassic, but what if we in Arizona are the lower Cretaceous?

Saturday, February 09, 2008

Why John McCain Is Like Shaquille O'Neal

Because maybe it made sense 8 years ago, but now?

Monday, February 04, 2008

More Ancient Arizona Political History (from 1993!)

I think my editor liked my war stories from 15 years ago, because I got the top spot on the page, above Linda Turley-Hansen (“Don’t Lose Sight of Gun Rights!”). Or maybe it was just because they had a guest column from Don Bivens, and as he’s chair of the Arizona Democratic Party, he got the “rail” position along the left edge because the only thing lower in the Tribune op-ed universe to a former state Democratic Party chair is the current state Democratic Party chair.

The last paragraph, on re-reading, seems a bit harsh. I do appreciate what Bill Clinton accomplished as president, and it’s not like I would have figured out a way to fight the ’94 wave. But I’m convinced that 2008 isn’t the 1990’s, because most people understand the failure of the conservative movement. We don’t have to triangulate anymore, it’s more of a bipolar political world, and triangulating only makes the “Overton Window” shift to the right and away from the light. That’s a very cryptic explanation of a longer philosophical point, one which probably managed to kill the joke, sorry.

Campaign 2008
East Valley Tribune, Feb. 3, 2008

I’ve heard from both a true-blue Democrat and a ruby-red Republican that some supporters of Gov. Janet Napolitano are furious with her endorsement of Sen. Barack Obama. They’re supposedly outraged because they feel Napolitano owes her political career to Bill Clinton, who appointed her U.S. Attorney for Arizona in 1993.

Arizona political culture is rather gossipy, and there's a good chance that the two people, despite their different party registrations, were passing on something they had heard from the same irate person. But as somebody who was in politics in 1993, I want to remind folks of what actually happened.


As people now know, each new administration gets to appoint a new set of U.S. Attorneys, and by tradition (tradition being more important to the Senate than oxygen), the senior senator from the same political party as the incoming administration "recommends" candidates for this appointment. “Recommend" actually means "pick," because a single senator can block confirmation with one of those "holds" that substitutes for filibusters nowadays. Thus, when George W. Bush took office in 2001, the choice for U.S. Attorney, Paul Charlton, was originally proposed by Arizona's senior GOP senator, John McCain. (The decision to fire Charlton, originally for "performance-related issues,” later downgraded to "random chance," came without senatorial recommendation.)

The tradition held in 1993 when the Clinton administration took office. Clinton got to appoint new U.S. Attorneys, and in Arizona, the state's senior Democratic senator, Dennis DeConcini, offered his all-but-binding recommendation, Janet Napolitano.

Napolitano didn't know either Clinton well before DeConcini offered her name; she supported the Clinton-Gore ticket in 1992, but she wasn't a "Friend of Bill." Instead -- besides being an intelligent, well-qualified attorney, and all that boring substantive stuff -- she was recommended by her law partner and mentor, the late John P. Frank, who was informal advisor to DeConcini (and just about every other Arizona Democrat) on legal issues. With "JPF" in her corner, Napolitano became the leader for the appointment.

But Napolitano had an additional qualification. DeConcini expected a primary challenge in 1994, and wanted to shore up his support among Democratic voters. DeConcini, a pro-life Democrat, had voted to confirm Supreme Court Justice Clarence Thomas, which angered many Democratic base voters. Napolitano and Frank had served as counsel to Anita Hill at the Thomas hearings. Incredibly, 36 hours before Hill’s testimony, Hill had no counsel until Napolitano and Frank volunteered and took a red-eye to DC.

Napolitano thus offered an additional political advantage to DeConcini, as recommending Hill’s attorney for a high-profile appointment might help mollify Democrats still upset with his Thomas confirmation vote. It also made Napolitano’s Senate confirmation tougher, as Republicans believe the only people entitled to due process and legal representation are either Republicans or developers facing bank fraud charges, or, like Fife Symington, both.

Republicans -- who insist that Democrats accept whomever a GOP administration designates, regardless of past partisan activities -- hold Democratic nominees to a “higher” standard, and initially blocked Napolitano’s appointment. The Republicans cited a misleading magazine article by David Brock, who since recanted his work for the Vast Right-Wing Conspiracy, including his slur on Napolitano. Ultimately, fewer than 40 Republicans voted to block a vote on the appointment, thanks to bipartisan and personal support from DeConcini and Sen. Pete Dominici, R-N.M., for whom Napolitano once worked. The full Senate voted, and she was confirmed.


So while President Clinton formally nominated Napolitano, DeConcini actually sponsored her, and with Domenici, got the nomination through the Senate. Any credit and loyalty really isn’t owed to Bill or Hillary Clinton.

Other lessons? First, people worried about the “tone” of the current Democratic presidential race need to recall what did happen in 1994. If you’ve been in a primary with Dick Mahoney, what Obama and Hillary are doing seems like a warm bath. Second, I’m now out of politics and proud of my little law firm -- and I suppose I do owe gratitude toward Bill Clinton for my private-sector success. If it hadn’t been for the first 2 years of the Clinton administration, I might still be in politics.