Sunday, May 25, 2008

Care About Issues? Be Partisan!

That was my suggested headline, but the editor chose differently.

I got two emails today, one from a Republican who appreciated the column, but said that of course Democrats were more corrupt and Republicans better at policing their own; I asked him who the Democratic equivalents, here in Arizona, would be to Fife Symington and Rick (I’m Still a Congressman) Renzi.

The other was from an angry GOP ‘winger, who said that of course I’m what’s wrong with politics today, politicians should do the right thing and that should be the end of it. I wrote back that I strongly disagreed with him positions on education, abortion, and probably almost everything else, and under my formulation, we’re having a debate about politics and we disagree. Under his “do what’s right” philosophy, he gets to decide what’s “right” and we’re having an argument about morality. So how does that improve public discourse to go from thinking your opponents are mistaken to thinking your opponents are evil? Haven’t heard back yet.

Other background on partisanship (and why the ideogolgically diverse, or if you prefer, inconsistent, parties are a historical accident) is here, here, and here. I'm with Yglesias on this one.

East Valley Tribune, May 25, 2008

Last week I endured some oh-so-soothing talk by candidates for elected office, both Democrat and Republican, of bipartisanship, reaching across the aisle, and finding common-sense solutions instead of engaging in pointless partisan bickering. Heck, I used to talk like that, too.

Candidates spout this airy, nonpartisan blather because voters absolutely love it. It appeals to our vanity. We’re savvy judges of character, not fooled by labels. But partisanship and bickering lets voters send large, harder-to-ignore messages -- far better than deciding that you like this guy and that woman, at least until they do something of which you don’t approve.

Unfortunately, today “partisan” is an epithet. Nobody admits to voting a straight-party ticket anymore; there still may be “yellow dog Democrats,” but just try to find one. You may be a Republican, but you always vote for the best person -- or you convince yourself that however dubious the GOP candidate, the Democrat is worse. (It worked for George W. Bush, right?)

You’re independent, even if you’re not an Independent. You’re not a bickerer. You’d never be disagreeable, or try getting your own way without caring about what your opponent thinks, or gets. Just ask your spouse to confirm that last part, OK?

Americans consider themselves pragmatists, interested in real solutions to real problems (as opposed to fake solutions to made-up problems). “Real people” are honest; politicians are corrupt. Mr. Smith went to Washington and with nothing more than honesty and common sense completely changed the U.S. Senate. (Never mind that his appropriation for the summer camp was -- gasp! -- an earmark.)

But if everyone is a pragmatist, who are the people who care about gay marriage, abortion, or taxes? Who’s voting on the basis of a candidate’s religion, windsurfing, or flag pin?

And what about those issues where there isn’t a solution at all (much less a pragmatic, centrist one), but rather an attempt to fix a problem that may or may not work? Or where your “problem” is my “profit stream?”

The next time a candidate denounces partisanship, consider the last time we had a bipartisan, across-the-board consensus, where politicians put party aside and did what they thought best for the entire country: We invaded Iraq.

The decision to go to war wasn’t unanimous -- but we managed to marginalize those who argued against. It seemed like everybody who mattered agreed, because we ignored those who doubted the Bush administration’s claims about Iraq, or who weighed the costs and benefits differently (and, as it turned out, more accurately). We called those folks “extremists” and listened instead to the “sensible center.” Sensible -- but wrong.

So instead of looking for ways to avoid acrimony, maybe we need divisiveness and partisanship. We should have noisy debate before big decisions. And the greater party unity we’re seeing these days gives voters clearer choices. You don’t need to research each candidate or do exhaustive personality profiles; you can vote on your key issues, knowing that each party has staked out a contrasting position. If you think we need to stay in Iraq, vote for Republican candidates. If you think we need to get out, vote Democratic.

At the state level, which matters more to you, lowering taxes or improving schools? On transportation, do you prefer lower taxes, or lower commute times? When voting for state legislature, decide which issues matter the most, which general direction you prefer, and then vote accordingly. If you prefer lower taxes, vote R; if you prefer improving schools or lowering commute times, vote D. Pick an issue; the Democrats lean one way, the Republicans the other. As a voter, you should demand greater partisanship and partisan discipline so you can vote rationally, without having to write a term paper on every issue or race.

Increased partisanship and party unity mean you don’t have to worry about personalities. Instead, you can vote based on -- wait for it -- issues. And isn’t that what you say you want?

Monday, May 19, 2008

They Were For President Bush Before They Were Against Him

I send out the columns by email to a list of people who have opted in, but this week I didn't bother creating my own email, I just forwarded the one that John Shadegg himself prepared and sent today as a fundraising appeal. Not what I would have done.

Shadegg described himself as the “voice of reform so desperately needed in Washington, D.C.” That’s even better -- and a bigger triangulation -- than “The Change You Deserve,” the official House GOP slogan (if they can resolve the trademark issues with prescription antidepressant Effexor). It's nice of Rep. Shadegg to get my column in front of people who otherwise wouldn't get to see it.

My suggested headline was above, but the editor had a different perspective. The newspaper version is available here.

East Valley Tribune, May 18, 2008

I eagerly await the fall campaign, when incumbent Rep. John Shadegg, R-Ariz., tries to portray himself as “a new kind of Republican.” That he represents a “Third Way,” between the old, lobbyist-dominated GOP and the slightly younger, lobbyist-dominated GOP. Too bad “incumbent Republican congressman” is a personal smear still suitable for a family newspaper.

After batting oh-fer in three special elections in GOP districts, the National Republican Congressional Committee is low on both money and ideas. The NRCC has spent about 20 percent of its cash on hand in each election, but the Democrat won the Illinois seat held by former Speaker Dennis Hastert, then a Louisiana seat held by the GOP since the 1970’s. Last Tuesday, the GOP lost another special election -- in Mississippi, of all places.

Tuesday’s 8 point Democratic win in Mississippi’s 1st District came where President Bush won in 2004 with 62 percent. The NRCC’s advice afterwards? Look out for yourself, GOP incumbents, we don’t have either money or a clue.

Political handicapper Charlie Cook has a “Partisan Voting Index” that compares partisan performance (or “lean”) in congressional districts to the national presidential vote. Mississippi’s 1st District has a PVI of +10R, meaning it votes 10 points more Republican than the country. Shadegg’s district has a PVI of +6, and Bush got 58 percent in 2004. So if MS-01 isn’t safely red, why wouldn’t AZ-03 also be “in play?”

Republicans complain that moderate-to-conservative Democrats campaign as moderates and conservatives, not recognizing that their “liberal, liberal, liberal” tactics are a tad tired. But Democrats aren’t guaranteed to run against the prototypical anti-choice, anti-gay, Social-Security-privatizing, imperialistic war-loving, health insurance denying, toady-of-the-rich Republican. After all, not every Republican candidate is Shadegg.

If Arizona starts turning against the GOP brand, we’ll just be catching up to the rest of the country. In 2006, I visited Montgomery County, Pa., in the Philadelphia suburbs. It’s a formerly staunchly Republican area which featured an expensive, contested congressional race between a long-time GOP incumbent and a Democratic challenger.

The yard signs caused me some cognitive dissonance, because the Democratic challenger’s used the slogan, “Democrat for Congress,” while the GOP incumbent’s read “Independent Voice for You” -- the opposite of what we usually see in Arizona. But watch that change, even here, if people see the GOP elephant and think, “George W. Bush.”

How does every single GOP candidate, led by presumptive presidential nominee John McCain, try to distance himself from Bush? They all can’t be “a different kind of Republican,” because it’s not much of a brand if every product is unique. And there are limits to the difference here, because every single one of these Republicans -- McCain, Shadegg, Tim Bee -- was really, really for Bush before they were against him.

The problem with all this GOP triangulation (McCain trying to distance himself from congressional Republicans, and both trying to distance themselves from Bush) is two-fold. First, these guys tied themselves so tightly to Bush over the past 7 years that the cake is already baked; it’s too late to pretend you really were a maverick all along. The other is that Bush himself pulled exactly this trick in 2000, slamming the GOP Congress and portraying himself as a different kind of Republican, a “compassionate conservative.” It should be difficult to separate from the failed presidency by using the exact same tactics as the failed president.

But tart-tongued (and gay) Rep. Barney Frank, D-Mass., probably has the better explanation. It’s not that Republicans lack the right slogans, or haven’t been insufficiently lobbyist-dominated, war-mongering, and fighting a class war on behalf of the rich. It’s the substance.

Frank was musing to a reporter the difficulty in trying to get the Bush administration and congressional Republicans to do anything about the collapse of the real estate bubble. The GOP has come around on bailing out banks and hedge funds, but is steadfastly refusing to do anything for actual homeowners.

It’s “like asking me to judge the Miss America contest,” said Frank. “If your heart’s not in it, you don’t do a very good job.”

Monday, May 12, 2008

Bill Gates Walks Into A Bar, And Suddenly The "Average" Guy Is Really Rich

The newspaper version of the column is here.

My suggested headline was above, but the editor didn’t go for it. I did see Iron Man Sunday afternoon with my son, after we finished packing his dorm room (at least the portion coming back to Phoenix), but it wasn’t until after the column came out. I’m afraid he now thinks Robert Downey, Jr. is light years cooler than his old man. I know I do.

The paragraph about people in the financial services industry is to fend off lawyer jokes from Susan and, should he ever read a column of mine, Mike. It’s a bit of a private joke, but as the paper only pays in the low two figures, I feel I should be able to put in a private joke every now and then.

East Valley Tribune, May 11, 2008

I know my readers reasonably well, and I’d guess few saw
Iron Man. The movie grossed over $100 million its opening weekend, the second-best performance ever for a non-sequel. That’s lots of people and money -- but you had nothing to do with it.

So it is with capital gains and pension savings. Lots of people and staggering amounts of money are involved, but unless you’re at the top, it’s got little to do with you.

This statistics lesson is part of what I hope will be my continuing debate with Rep. John Shadegg, R-Ariz., who doesn’t like my criticism of his “Homeowner Empowerment Act” -- a fight I welcome. Shadegg doesn’t want to get government involved when we can trust the financial services industry instead to help you avoid foreclosure. After all, who does a better job of keeping your interests paramount? Maybe Las Vegas casino owners, but it’s a close call.

(I’m talking about the product developers -- those financial geniuses who developed the “liar loan,” who gamed the rating-agency models so bad loans could be sold in seemingly solid packages, who passed on the risks but kept their fees, who have the huge compensation packages, and who now have the government guaranteeing their debts. My stockbroker? She’s as honest, and nearly as attractive, as a casino dealer.)

So when you read that the 2004 Survey of Consumer Finances (the 2007 data aren’t available yet) showed that 44.5 percent of households with at least one worker participated in a tax-deferred retirement plan, or that total retirement plan savings in 2007 were $17.5 trillion, remember those are Iron Man numbers. Replace “young” with “rich” to gauge your chances of being involved.

SCF data show that a majority of employed households (over 55 percent)
don’t have any tax-deferred pension plan. Also, “employed households” excludes those with unemployed workers -- and who’s more at risk of foreclosure? And those savings are heavily weighted to those at the top of the heap; the SCF data report that two-thirds of households headed by a worker between 55 and 64 had less than $88,000 in retirement savings.

Capital gains are similarly concentrated. Lots of taxpayers have capital gains, but most taxpayers have very little, and
most capital gains occur among those at the top. Using 2005 data, the wealthiest 10 percent got 90 percent of long-term capital gains, with the top 1 percent getting almost 70 percent. As for Americans at the 60 percentile and below -- they got 2 percent.

So you’ll hear that middle-income taxpayers have capital gains, and would benefit from a capital gains tax cut. And that’s theoretically true; in 2005, taxpayers in the middle 20 percent of the income distribution averaged $176 in long-term capital gains. A cut from 20 to 10 percent in the capital gain tax rate would save that median taxpayer $17.60. Meanwhile, taxpayers in the top 1 percent averaged $232,824 in capital gains -- so they’d save $23,282. It’s a good trade for the economic elite,
tipping the median taxpayer less than $20 to corral a $23,000 tax break.

The people at greatest risk of foreclosure aren’t those with excess assets in their retirement plans. They may not even have retirement plans at all; the SRC data show that 50.6 percent of heads of families in the lowest 20 percent of incomes didn’t participate in employer-based pension plans, while in the top 10 percent of incomes, only 5 percent declined to participate. Who’s more likely to need help, the two-thirds of households with less than $88,000 in pension savings, or the top tier of households that hold the vast majority of that $17.5 trillion?

So allowing people to withdraw money temporarily from a 401(k) or IRA to pay a mortgage is like offering sick people a tax break for not getting medical treatment. (Which is exactly John McCain’s health care plan; notice the trend here?) It’s a “cure” that those suffering the disease just can’t use.

And that’s why Shadegg’s proposal is unhelpful, impractical, and regressive. Just look at the numbers, whether or not you ever see Iron Man.

Tuesday, May 06, 2008

Actually Want Roads Built? Don't Drink The Kool-Aid

In other column news, I think I’ll be getting into a longer debate with Rep. Shadegg over whether you should take your retirement savings and put them into your mortgage.
Here's his response. That’s a battle I’m looking forward to joining. After all, who does a better job of keeping your interests paramount than the financial services industry? Maybe Las Vegas casino owners, but it’s got to be a close call.

Online version of this week’s column is

East Valley Tribune, May 4, 2008

On Friday, a group filed a petition for a statewide sales tax to raise money for state transportation needs. It seems that as Arizona grows, we need more transportation infrastructure -- and gas taxes aren't keeping up.

It's a total and absolute surprise, of course. Who could have predicted that after we build a new highway, we then have to spend more money to maintain it? Law enforcement, picking up litter, cleaning up after accidents, replacing sun-baked signage, and resurfacing all cost money after you build. I mean, who could have seen that coming?

Gas taxes -- which are fixed amounts, not percentages, and thus don't increase with inflation and require separate, tedious, and supermajority votes to raise -- haven't kept pace with the state's needs. According to the head of the Arizona Department of Transportation, without a new funding source, soon all state gas taxes will be committed to maintaining existing roads; there won't be any money for new ones.

So the solution, according to the TIME Coalition, a group of Arizona business leaders, is to raise the state's current 5.6 percent transaction privilege (sales) tax
by 1 percent to generate $42.6 billion over 30 years for new highways, roads and passenger rail service.

The proposal doesn't include increasing the state gas tax. User taxes haven't been enough for road construction in these parts for more than 20 years, since the first Maricopa County transportation tax election in 1985. People who care more about transportation improvements actually occurring than about maintaining their ideological purity recognize that we need broad-based tax hikes.

Which makes the McCain-Clinton proposal for a federal gas tax "holiday" even more pander-rific here in Arizona. Naturally, most of the business leadership in the TIME Coalition supports McCain's presidential bid -- at the same time they insist we raise state taxes to build and maintain more roads, buses and trains.

It's a perfect political syllogism. Arizona has a huge transportation problem, and needs resources to work on fixing it. Existing gas taxes aren't enough, so we need to convince voters to approve a new tax. Meanwhile, let's have those same voters elect a president who will reduce gas taxes because it's politically popular, thereby making Arizona's funding deficit even deeper.

Economists across the ideological spectrum acknowledge that cutting the federal gas tax actually won't save consumers anything. As I've written before (but apparently to be a full-time member of the local media, it's required that you have flunked Econ 101), the supply of gas for the summer is already fixed; there's no available refinery capacity to increase supply in the near term. The current price represents the market-clearing price. Reducing the tax will lower prices temporarily, but lower prices increases demand -- which, because of fixed supply will raise prices, until we return to the market-clearing price. Thus, no savings to consumers, but a bonanza for oil companies.

I don't know about Clinton, but McCain's answer is that the need to increase government revenues is to cut taxes. He's said, numerous times, that cutting taxes raises revenues and that raising taxes cuts revenue. "Every time in history we have raised taxes, it has cut revenues," he claims. (This is false. Maybe it's "straight talk," but it's
just flat-out false. See, e.g., 1993-2000, and 1941-45.)

So if you believe McCain, the TIME Coalition proposal to raise the sales tax instead will cut revenues available for transportation. Instead, we should cut state taxes -- and dedicate the gusher of extra revenues to new roads!

I don't get it. All this talk about transportation needs and funding seems pointless, when there's the simple and painless McCain solution. Why go to all the trouble of gathering signatures, running a campaign and getting voters to approve a tax hike, when John McCain tells us that there's a simpler way to have more money to build and maintain transportation infrastructure: Eliminate earmarks and cut taxes.

Who knew that "hard truths" could be so very, very soft and comfortable?