Aren't you glad you voted against Gore...

Remember the budget surplus. Somehow we can't afford the same government services today. I think we all know why. More from Kevin Drum's blog below:

Just the Simple Truth:

by Kevin Drum

"Have I mentioned my favorite part of Obama's speech yesterday? Here it is:

America’s finances were in great shape by the year 2000. We went from deficit to surplus. America was actually on track to becoming completely debt free, and we were prepared for the retirement of the Baby Boomers.


But after Democrats and Republicans committed to fiscal discipline during the 1990s, we lost our way in the decade that followed. We increased spending dramatically for two wars and an expensive prescription drug program — but we didn’t pay for any of this new spending. Instead, we made the problem worse with trillions of dollars in unpaid-for tax cuts — tax cuts that went to every millionaire and billionaire in the country; tax cuts that will force us to borrow an average of $500 billion every year over the next decade.

To give you an idea of how much damage this caused to our nation’s checkbook, consider this: In the last decade, if we had simply found a way to pay for the tax cuts and the prescription drug benefit, our deficit would currently be at low historical levels in the coming years.

But that’s not what happened. And so, by the time I took office, we once again found ourselves deeply in debt and unprepared for a Baby Boom retirement that is now starting to take place. When I took office, our projected deficit, annually, was more than $1 trillion. On top of that, we faced a terrible financial crisis and a recession that, like most recessions, led us to temporarily borrow even more.

Translation: Fuck you, Republicans.

And I'd say it's a well deserved flip of the bird. Republicans, as you can imagine, are less enthusiastic, and this bit of the speech undoubtedly accounts for most of the bile being tossed around on Fox and elsewhere today. But hey — sometimes the truth hurts. And all Obama did was speak the simple truth. In the past decade, Republicans slashed taxes, started two wars, approved a big unfunded entitlement, and presided over an economic collapse that cratered tax revenues and required massive government spending to counteract. That's pretty much 100% of our existing deficit problem right there. All we're doing now is trying to clean up the mess the GOP has left us."

Why we need health care (for the citizenry of our shared nation)

I've been reading a few blog posts arguing that if we just gave senior citizens cash, then they could decide if they wanted to buy health care or not. And that would put downward pressure on health care's inflation rate. It's interesting, but I think Ezra make the relevant point below:

Why can’t we just give seniors cash?:

from Ezra Klein

"As a society, we are not willing to let people die painfully in the street, even if they have previously made decisions that would lead to that outcome. In reality, what terrifies all of us is what happens after someone takes the cash and then gets sick.

Let’s run through the cash-grant world: At age 65, grandma decides to purchase no health-care plan, as she figures she’ll just get one when she gets sick, or maybe just get one next year, or perhaps she just doesn’t want to spend money extending decrepitude. But then she has a stroke and gets rushed to the hospital. Someone is paying for that emergency care. It might be the hospital. It might be the taxpayers. But it’s someone: The paramedics aren’t going to refuse to lift her onto the gurney. And then she needs rehabilitation. Someone is going to end up paying for that, too. Or perhaps she gets leukemia and, in a display of consistency, doesn’t want heroic efforts made to fight it. But are we really prepared to deny her pain meds? Or hospice?

Perhaps you just build in a requirement that grandma has to at least purchase a catastrophic care plan. The problem with catastrophic care plans, of course, is that they often don’t cover the care you need. That’s why they’re cheaper. So the question is what happens when grandma needs more than the catastrophic care plan will provide — and when you’re dealing with seniors, that’s a “when,” not an “if.” The secondary question is whether grandma stops paying for the preventive care that she can put off, and that leads to higher emergency costs down the road. We’ve certainly seen that before, too.

This is why Medicare is universal and the health-care law has an individual mandate. If we were willing to let people simply live with the consequences of their decisions, we could have a very different health-care system than we do. But we’re not — and, as a compassionate, rich society, I don’t think that’s such a bad thing. This is why we, like every other developed nation, are moving toward insurance solutions that assume an eventual need for health care. If we can’t say no credibly, then we need to say yes responsibly, and in advance."

Right

I can't add to this. BTW: the answer is 2.

Pretty Audacious:

from Talking Points Memo by David Kurtz

"TPM Reader SG checks in from Wisconsin:

It's not just the budget bill needs a quorum -- the big issue is that *any* bill with fiscal implications is supposed to have a quorum in the Wisconsin state Senate. So there are two choices here:

1. Collective bargaining has fiscal implications, and so the bill will be blocked in the courts and ruled unconstitutional.

2. Collective bargaining DOES NOT have direct fiscal implications, and Gov. Walker has been lying this entire time by making the case that it's fiscally necessary.

So either the state R's just passed an illegal bill, or Walker has been lying this entire time and really is just interested in union-busting."

I'm 100% on board with this effort

If it works, this is the game-changer. A successful gambit will scare the crap out the GOP and protect teachers from their "save the rich" worldview.

The Recall Drive in Wisconsin:

from Matthew Yglesias by myglesias

"Activists in Wisconsin have hit upon a method that coud conceivably lead to the end of the deadlock there. Several Republican State Senators are eligible for recall, and progressives in the state are going to go for it:

Under Wisconsin law, supporters of this recall effort now have 60 days to collect an amount of signatures “equal to at least 25% of the vote cast for the office of governor at the last election within the same district or territory as that of the officeholder being recalled.” The amount of signatures necessary to trigger a recall will vary from district to district, but will range from about 15,000 to 21,000 signatures per recalled senator.

Via Jon Chait, here’s how the eight senators’ in question districts voted in 2004 and 2008:

Robert Cowles (District 2): 2004 – Bush +15%; 2008 – Obama +6%

Alberta Darling (District 8): 2004 – Bush +7%; 2008 – Obama +4%

Sheila Harsdorf (District 10): 2004 – Bush +3%; 2008 – Obama +2%

Luther Olsen (District 14): 2004 – Bush +13%; 2008 – Obama +5%

Randy Hopper (District 18): 2004 – Bush +15%; 2008 – Obama +4%

Glen Grothman (District 20): 2004 – Bush +39%; 2008 – McCain +27%

Mary Lazich (District 28): 2004 – Bush +29%; 2008 – McCain +21%

Dan Kapanke (District 32): 2004 – Kerry +7%; 2008 – Obama +23%

Only Kapanke is super-vulnerable, but Cowles, Darling, Harsdorf, Olsen, and Hopper all have something to worry about. As Chait notes, contributing money to this drive is probably “more constructive than playing guitar and eating pizza.” I note that there’s also the possibility that the mere threat of recall will compel some of these folks to start looking harder for compromise. Wisconsin State Senators’ offices probably don’t get a lot of calls from out-of-state people saying “look, I’m not the kind of person who’s normally inclined to get involved in Wisconsin state politics, but I’m going to do everything in my power to beat you on this issue.” Obviously a threat followed by actual money or volunteering is more useful than a bluff, but even a bluff works! The main reason we don’t have more progressive public policy in this country is that progressives aren’t good enough at delivering these kind of contacts and concrete political threats to real pressure points."

Another piece of evidence

One of the problems for Democrats in recent years has been the number of union household willing to vote for the GOP. I think that trend may be turning (See the poll below). The longer and more transparently deceptively Scott plays the attack on collectively bargaining, the worse for the GOP.

For the first time I want Scott Walker to hold out. The 14 state senator should stay of state until 2012. I'm serious.

Do over?:

from Public Policy Polling by Tom Jensen

"We'll have our full poll on the Wisconsin conflict out tomorrow but here's the most interesting finding: if voters in the state could do it over today they'd support defeated Democratic nominee Tom Barrett over Scott Walker by a a 52-45 margin.

The difference between how folks would vote now and how they voted in November can almost all be attributed to shifts within union households. Voters who are not part of union households have barely shifted at all- they report having voted for Walker by 7 points last fall and they still say they would vote for Walker by a 4 point margin. But in households where there is a union member voters now say they'd go for Barrett by a 31 point margin, up quite a bit from the 14 point advantage they report having given him in November.

It's actually Republicans, more so than Democrats or independents, whose shifting away from Walker would allow Barrett to win a rematch if there was one today. Only 3% of the Republicans we surveyed said they voted for Barrett last fall but now 10% say they would if they could do it over again. That's an instance of Republican union voters who might have voted for the GOP based on social issues or something else last fall trending back toward Democrats because they're putting pocketbook concerns back at the forefront and see their party as at odds with them on those because of what's happened in the last month.

A big part of Scott Walker's victory in November- and Ron Johnson's as well- was Democratic voters sitting at home. Our final pre election poll in Wisconsin found that likely voters had supported Barack Obama by only 3 points in 2008, in contrast to his actual 14 point victory in the state. Those sleeping dogs aren't lying any more though and when you combine the reinvigoration of the base with GOP union households trending back toward the Democrats, Walker seems to have severely hurt his party's chances of building on their gains from 2010 next year.

Full results here"

Aargh, I hate it when the "facts" are false

My larger point about attacking the teacher unions as the wrong approach to take if you want to attract good teachers, stands. That said, my post from last night is clearly flawed. How flawed? PolitiFact rates it as false. Ack!

Here are the real numbers from PolitiFact:

Mean SAT scores by state, 2010:
 

State	Overall Score	National Rank	Participation Rate
Wisconsin	1778	3rd	4 percent
Virginia	1521	34th	67 percent
North Carolina	1485	38th	63 percent
Texas	1462	45th	53 percent
Georgia	1453	48th	74 percent
South Carolina	1447	49th	66 percent

Mean ACT scores by state, 2009
 

State	Overall Score	National Rank	Participation Rate
Wisconsin	22.3	13th	67 percent
Virginia	21.9	22nd	20 percent
North Carolina	21.6	26th	15 percent
Texas	20.8	35th	30 percent
Georgia	20.6	40th	40 percent
South Carolina	19.8	46th	50 percent

The fact pattern still holds up, but nowhere near as clearly and decisively as I'd like (in order for my point to be bullet-proof). Once again, this data DOES support my argument, it just doesn't clinch it.

Below is a link to the full PolitiFact article:

PolitiFact | Labor union supporters say Wisconsin test scores vastly outpace those in five states without collective bargaining for teachers

I think this makes my point...

So the states with the lowest ranking on college entrance exams are the ones that busted their teachers unions. Go figure.

What About Education Reform? Ctd:

from The Daily Dish | By Andrew Sullivan by Andrew Sullivan

"Ken Sherrill counters those, like Adam Ozimek, who worry about public sector unions impeding education reform:

Only 5 states do not have collective bargaining for educators and have deemed it illegal. Those states and their ranking on ACT/SAT scores are as follows:

South Carolina – 50th
North Carolina – 49th
Georgia – 48th
Texas – 47th
Virginia – 44th

If you are wondering, Wisconsin, with its collective bargaining for teachers, is ranked 2nd in the country. Let’s keep it that way.

Scott Lemieux adds:

This isn’t to say that the lack of collective bargaining explains these poor outcomes, of course, but it is true that the evidence that breaking teacher’s unions improves educational outcomes is somewhere between “exceptionally weak” and “non-existent.”

Matt Steinglass nods."

OK, maybe too far in that last post

Matt has some good points below on education reform. They basically run counter to "it doesn't work argument implicit in my last post. Let me be clear, education is a priority and I am for more flexibility and experimentation to figure out ways to make things work better. I just want the teacher unions brought into the process. Change should NOT be positioned as an assault on teachers. We need good teachers. Attacking their unions and lowering their compensation is detrimental to attracting good teachers. It's not only bad policy.

 It's just wrong.

The Trouble With Ed Reform Skepticism

:from Matthew Yglesias by myglesias

"

(cc photo by kevindooley)

Kevin Drum is an education reform skeptic:

More importantly, though, I’ve simply become less convinced about the value of all the ed reforms that periodically capture the hearts of the Beltway chattering classes. I’m generally in favor of things like charter schools and disciplinary reforms that make it slightly easier to fire bad teachers, but even if they’re worthwhile on their own merits there’s not an awful lot of evidence that these things actually improve the overall quality of the educational system. It’s not that there’s no evidence to support these kinds of reforms, just that the evidence is thin and contradictory every time I look at it. Test scores haven’t dropped over the past 30 years. Other countries largely haven’t leapfrogged us during the same period. High-stakes testing doesn’t appear to have a big impact. Charter schools aren’t unquestionably superior to equivalent public schools. Merit pay might work but it might not. The presence or absence of teachers unions doesn’t seem to have much effect on educational outcomes. For more on this, try reading Joanne Barken’s contrarian take on the ed reform community in the winter issue of Dissent.

I think this is overstated, but the deeper issue for teacher’s unions is that pushing this kind of line is ultimately self-defeating. Say it’s true that we don’t know how to make schools better. That could be for two reasons. One is that it’s an epistemological problem—we have no idea what makes a school effective. Another is that it’s impossible—learning outcomes are all about parenting and schools are irrelevant. Either conclusion makes the sense for less investment in education and more decentralization of the system. If we had really convincing research that teachers who wear green hats produce better learning outcomes, then unions would swiftly reach an agreement to incentive the wearing of green hats and there’d be no problem. But that’s not the case.

So Scott Walker and his odious partisan gambit aside, you’re still left with a strong case for reform. I think the evidence is pretty clear that school quality does matter and that there are measurable differences in teacher performance. That’s why I think it makes sense to invest in good schools through charter school “smart caps” (see Erin Dillon) and invest in good teachers by paying generous salaries and getting rid of the teachers who don’t perform (see Robin Chait). But the kind of “it’s all about poverty” edu-nihilism that’s often the most convincing argument for skepticism about the merits of reform simply makes the case for across the board disinvestment in educating children. If that’s what you think, that’s what you think, but obviously it’s not a position that teacher’s unions are going to like either."

The solutions are broken

Excellent piece from Kevin Drum that touches on a few of my pet issues with all the talk of 'fixing' education. The solutions haven't worked (See Kevin's piece below).

This isn't to say we should be trying to reform and improve education, but the answer can't be "Let's only try things that break the teachers union". That's the type of policy that I see the GOP favoring, evidence be damned (as usual). And that brings me back to Walker. I think I can say that we all agree that education in today's world is about the only path to success. And that we, as a country, need to make education a point of emphasis if we want the country to remain economically competitive. (I only think I can say this because sometimes I'm not so sure that GOPs fundraisers really believe this).

So does it make sense slash incentives for the best and brightest to become teachers? How does making teachers take a huge cut in compensation help our long term growth? Does taking away collective bargaining rights from teachers make Wisconsin a more attractive place to be a teacher? Is this move going to improve our kids test scores because we have better teacher in the classroom?

Answers: No, It doesn't, It doesn't, and No. It only means that taxes can be lower.

This whole thing is BS.

Is Wisconsin Really About the Kids?:

from Kevin Drum by Kevin Drum

"Mike Konczal points to this as the most interesting passage from Wisconson Gov. Scott Walker's telephone conversation with the fake David Koch:

I had all my cabinet over to the residence for dinner. Talked about what we were going to do, how we were going to do it, we had already kind of doped plans up, but it was kind of a last hurrah, before we dropped the bomb and I stood up and I pulled out a, a picture of Ronald Reagan and I said you know this may seem a little melodramatic but ... when he fired the air traffic controllers and, I said, to me that moment was more important than just for labor relations and or even the federal budget, that was the first crack in the Berlin Wall and the fall of Communism because from that point forward the soviets and the communists knew that Ronald Regan wasn’t a pushover....

Mike comments:

When the true believers get together and talk openly, they don’t talk about this being about the budget, or getting innovative school practices in place, or whatever. It’s about showing their enemies that they mean business and aren’t pushovers. He believes that by smashing one you can smash them all. And he believes he is the first domino to move.

Quite so. Which brings to mind the pro-Walker argument currently making the rounds over at Modeled Behavior: namely that, as Karl Smith puts it, 'to the extent public sector unions matter at all, it's because they stand in the way of educational reform.' Adam Ozimek expands on this a bit:

Do I really have to run down the litany of bad policies unions have fought to keep, and good policies they’ve fought against in education reform? A clear indicator of how bad they’ve been is that the most anyone will say in their defense on education reform is that “well, some unions are embracing reform now in some places!”

I think I would have been more open to this argument a year or two ago, but I'm less sure now. First, because it's obvious that guys like Walker couldn't care less about ed reforms. As Mike says, in private Walker makes it clear that his union busting efforts are mostly designed to show that he's a tough guy, not to hasten ed reforms that will help Wisconsin's kids.

More importantly, though, I've simply become less convinced about the value of all the ed reforms that periodically capture the hearts of the Beltway chattering classes. I'm generally in favor of things like charter schools and disciplinary reforms that make it slightly easier to fire bad teachers, but even if they're worthwhile on their own merits there's not an awful lot of evidence that these things actually improve the overall quality of the educational system. It's not that there's no evidence to support these kinds of reforms, just that the evidence is thin and contradictory every time I look at it. Test scores haven't dropped over the past 30 years. Other countries largely haven't leapfrogged us during the same period. High-stakes testing doesn't appear to have a big impact. Charter schools aren't unquestionably superior to equivalent public schools. Merit pay might work but it might not. The presence or absence of teachers unions doesn't seem to have much effect on educational outcomes. For more on this, try reading Joanne Barken's contrarian take on the ed reform community in the winter issue of Dissent.

I'm not trying to stake out some kind of maximal position here. There is some evidence in favor of some of these reforms, and I support the idea of experimenting to find out what works and what doesn't. I'd also like to see teachers unions lighten up on some of this stuff, so to some extent I agree with Karl and Adam. Still, the overall evidence that teachers unions are our biggest impediment to a nation of young geniuses is pretty weak. If that's your main reason to oppose public sector unions, I think you probably need a better case."

Anybody want to make a wager?

I'm betting on a shutdown.

Now last year I was willing to bet that Palin had a shot at getting the GOP nomination. I'm not entirely out of the money on that one (but the Alaska show and the recent AZ tragedy are not helping her cause); but clearly, I sometimes find myself of the belief that the GOP base is crazier than perhaps it really is. But the evidence is building on this one. The GOP base seems like it wants this very badly and the GOP Freshman are definitely in for the ride. GOP leadership sometimes appears concerned, but I believe they actually want this too.

I'm not willing to bet on who 'wins' from a shutdown. Independent voters freak me out.

Did John Boehner accidentally make a shutdown more likely?:

from Ezra Klein by Ezra Klein

"



John Boehner got some plaudits -- including from me -- for permitting an open amendment process on the House spending bill. But as Jon Bernstein notes, that process may have had the unintended consequence of making a government shutdown much more likely:

When Republicans brought the funding bill to the House floor, Boehner allowed for the introduction of hundreds of amendments, instead of following the usual procedure of having the House Rules Committee screen out most amendments. For Republican members of the House, it was a great opportunity to fulfill campaign promises by authoring amendments, many of which were approved, on all sorts of policy issues. Indeed, instead of just raising or lowering spending levels for federal agencies, these amendments prohibit the government from using any funds to carry out laws that House Republicans don’t like. So, for example, the funding bill now tells the EPA that it cannot regulate greenhouse gases; it tells the FCC that it may not implement net-neutrality regulations; it cuts funding from Planned Parenthood; and, perhaps most critically, it blocks money needed to carry out health-care reform.


This means that, instead of sending the Senate a bill carefully tailored for a major budget fight, the House has delivered one containing a hodgepodge of policy fights. Consequently, it will be much harder to find common ground before time runs out to prevent a shutdown.


If the only question was about funding levels, which was always expected to be a battleground, then it’s doubtful a compromise would’ve been impossible. The budget debate might have gone to the brink, maybe even shutting the government down for a few days before a deal was reached. In theory, however, it’s just not that difficult to cut a deal between one side that wants X dollars and another side that wants Y dollars spent on, more or less, the same set of programs ... But, when it comes to the policy fights over health care reform, environmental regulations, Planned Parenthood, and other issues, there aren’t partial victories available. Democrats won’t give in, and House Republicans won’t either, at least not easily. To take just one example: If you’re a Republican congressman, once you’ve said that allowing funds to go to Planned Parenthood is basically just funding abortion (even if it’s not), how do you reconcile a “yes” vote on a compromise bill that allows funding for that organization?

Photo credit: By Alex Brandon/Associated Press"

Early Election Signs...

Scott Walker is giving me hope the GOP can be stopped in 2012 from re-taking the senate (the piece below refers to the 2012 Presidential race). The way this has played out so far makes me think of how Hurricane Katrina forced the country to look at the GOPs warts. It's earlier in the cycle, so the media narrative has plenty of time to shift several times. But the events have become so significant that it's hard to believe that a GOP distraction campaign will be completely effective.

Then again, the triumvir-ant of Beck, Palin, and Limbaugh - TV, Internet, Radio - will continue to be very loud.

"How Does It Play In Oshkosh?":

from The Daily Dish | By Andrew Sullivan by Andrew Sullivan

"Rhodes Cook thinks the Wisconsin union fight could influence the 2012 race:

Of Wisconsin’s 72 counties, both Obama and Walker swept 59 in their respective races – 46 of which were won by both candidates. Each carried most of rural Wisconsin as well as the bulk of longtime manufacturing centers, including the counties that include Green Bay, Racine, Kenosha, Manitowoc, and yes, Oshkosh. Which party wins these swing counties and constituency groups in 2012 – not only in Wisconsin, but also the whole swath of Rust Belt terrain “from Scranton to Oshkosh” – could be significantly affected by the outcome of the current Republican-labor showdown in Madison."

The Tea (GOP) Party

Great fact pattern (below) for the next time you are confronted with somebody getting poetic about the 'Tea Party'. This is a group a 'like-minded' individuals. It's called the GOP base and its been a great way for them to disown their history.

(As an aside: Tea Party = GOP)

OK, no more name calling, here's the piece from Jonathan Chait:

What Is the Tea Party?:

from Jonathan Chait by Jonathan Chait

"Pew has another survey of Tea Party sympathizers, and it's clear once again that the movement is nothing more or less than conservative Republicans:

The Tea Party is essentially a re-branding campaign for the GOP base. It's a successful effort, and one that springs largely though not entirely from the grassroots itself. Conservatives like to imagine that the Tea Party is some incarnation of the popular will, asleep for many years and finally awakened under Obama, and bristle at any analysis that diminishes the world-historical import of the phenomenon. So let me be clear. The Tea Party represents a significant minority of Americans. It's influential. (It allowed conservatives to disown the failures of the Bush administration and to lend them a populist imprimatur.) But it's not anything more than an organizing rubric for the GOP base."

How to use Facebook to push your business.

or... how to sell pizza in Wisconsin.  Click the link, it's real!

UPDATE 2/22/10 5:27 PM EST:  Let me give a hat tip to Rob Bellin for posting the link below on his facebook account.  Also, just to be clear, I support both the business and political aspects of this markering campaign.  I don't think the owners of "Ians Pizza" are cynically taking advantage of the situation, I just think that they are taking advantage of it.  And here's to that!

http://www.facebook.com/IansPizzaOnState
Monday, February 21 (12:15pm)

Thank you all so much for visiting!

If you are here to learn how help feed the protesters in Madison, here's how you can do that:

Call us at 608-257-9248, then press 1. As we have just three phone lines it may take a while to get through, and we apologize in advance for that.

For online ordering we have partnered with both badgerbites.com andcampusfood.com to process our online orders. If you would like to order online, please put 115 State Street as the delivery address, and add in the notes that you would like to help feed the protesters.

While we thought about it, we will not be setting up a Paypal account, even though we realize that would make it easier. Please understand it's not because we don't want to help you out; we really just don't want to over-promise & under-deliver.

It's important to us as a business and as individuals that if we say we are taking your hard-earned money to help feed supporters, that we will make sure that happens. By taking phone calls and online orders only we can ensure that the money you spend with us does indeed get made into pizza that goes to the capital.

We truly appreciate all the enthusiasm, and know that many of you want to help feed the protesters, but we are also just one small business. Believe us when we say we are not really accustomed to getting pizza orders from the entire country (let alone internationally!)

Thank you for your understanding!

What's this really about?

Ezra, nails it. If you've been following Wisconsin, then you need the perspective below. It's not about budget deficits, it's about power.

Scott Walker should be seen as the face of the modern GOP.

Column: Wisconsin is about power, not money:

from Ezra Klein by Ezra Klein

"You've probably heard politicians fret that state governments - or, worse, the federal government - will default on their debts. House Speaker John A. Boehner called the prospect of a federal default 'a financial disaster not only for our country, but for the worldwide economy.' Nasty stuff.

But it's worth asking why a default would such a problem. Can't we just launch a missile at our creditors, or promise to do better next time? Well, no. Our creditors have power over us. If the actors who make up the entity we loosely refer to as 'the market' - that means everyone from banks to hedge funds to China - don't get paid back, they'll go nuts. They'll realize we're fiscally irresponsible. They'll stop lending us money, or at least start charging us more when they do. Interest rates will skyrocket, and the economy will grind to a halt.

So America's various governmental entities are looking for ways to avoid defaulting on their debt - or at least defaulting on their debt to the powerful. That addendum is important, because one of the strategies that's emerging is to default on debt to the less powerful, the people who don't have the power to wreck our economy.

This is a crucial fact about the economy, and one often underplayed by economists: power matters. It's worth more, in many cases, than money. And that's what's really at issue in Wisconsin. It's why Gov. Scott Walker is uninterested in taking concessions from the unions on wages and benefits if they don't come alongside concessions on collective bargaining. What he wants isn't a change in the balance of payments. It's a change in the balance of power.

The deal Wisconsin made with its state employees was simple: Accept lower wages than you could get in the private sector now in return for better pensions and health-care benefits when you retire. Now Walker wants to renege on that deal.

Rather than stiff the banks, in other words, he wants to stiff the teachers - but the crucial twist he's added, the one that's sent tens of thousands of workers into the streets, is that he wants to make sure they can't fight back once he does it.

The reason you can't stiff bondholders is that they can make a state or country regret reneging on the deals they've made. They can increase borrowing costs far into the future, slowing economic growth and, through the resulting economic pain, throwing politicians out of office. That gives them power. An ordinary teacher does not have access to such artillery. Unless, of course, she's part of a union.

Unions - through collective bargaining, strikes and other means - give workers power. They make reneging on contracts with their members painful. They also make negotiations less lopsided.

They're not perfect, of course. They sometimes negotiate bad deals, or misbehave, or hand good money over to bad people, or put their short-term interests ahead of the public's long-term interests. But then, so do corporations and politicians.

But their power matters for more than just debt repayment. For all their faults, unions tend to see their constituents as not just their own members, but the 'working class,' broadly defined. That's why you'll find labor's fingerprints on everything from the two-day weekend to Medicare to the Civil Rights Act of 1965 - none of which require you to flash a union card before you can benefit from them. They act -- quite self-consciously -- as a counterbalance to corporate power. There's no reason, after all, that unions should be leading the fight to see the Bush tax cuts for the wealthy expire. That's political capital they could be spending on reform of the nation's labor laws. And yet they are.

To get a sense of what a world without unions would look like - a world where power is distributed radically differently - you need look no further than Walker's own proposals. In his State of the State speech, he said, 'The decisions we face are not easy and the solutions we must approve will require true sacrifice.' He's already called for plenty of it from not only state employees, but also the low-income residents who rely on Wisconsin's BadgerCare program.

But some won't have to sacrifice nearly so much. Walker's campaign platform called for sharp cuts in corporate taxes, including 'eliminating corporate taxes for the first two years of operation.' His budget repair bill proposes to allow the state to sell energy plants 'with or without solicitation of bids, for any amount that the department determines to be in the best interest of the state,' and goes on to say that 'any such purchase is considered to be in the public interest.'

What you're seeing there isn't necessarily a world where deficits are lower. Rather, it's a world where power is distributed very differently. You can argue that that's a good thing, though I'm skeptical. But let's not confuse a discussion over political power with a discussion over deficits."

As Brad DeLong would say...

Friends don't let friends vote Republican.

The Less Discussed Part of Walker’s Wisconsin Plan: No-Bid Energy Assets Firesales.: "

Mike Konczal is a fellow with the Roosevelt Institute, and is a blogger at the Rortybomb Blog and New Deal 2.0.

Originally posted here

~~~

Have you heard about 16.896?

The fight in Wisconsin is over Governor Walker’s 144-page Budget Repair Bill. The parts everyone is focusing on have to do with the right to collectively bargain being stripped from public sector unions (except for the unions that supported Walker running for Governor). Focusing on this misses a large part of what the bill would do. Check out this language, from the same bill (my bold):

16.896 Sale or contractual operation of state−owned heating, cooling, and power plants. (1) Notwithstanding ss. 13.48 (14) (am) and 16.705 (1), the department may sell any state−owned heating, cooling, and power plant or may contract with a private entity for the operation of any such plant, with or without solicitation of bids, for any amount that the department determines to be in the best interest of the state. Notwithstanding ss. 196.49 and 196.80, no approval or certification of the public service commission is necessary for a public utility to purchase, or contract for the operation of, such a plant, and any such purchase is considered to be in the public interest and to comply with the criteria for certification of a project under s. 196.49 (3) (b).

The bill would allow for the selling of state-owned heating/cooling/power plants without bids and without concern for the legally-defined public interest. This excellent catch is from Ed at ginandtacos.com (who, speaking of Madison, took me to the Essen Haus on my 21st birthday, where the night began to go sideways). Ed correctly notes:

If this isn’t the best summary of the goals of modern conservatism, I don’t know what is. It’s like a highlight reel of all of the tomahawk dunks of neo-Gilded Age corporatism: privatization, no-bid contracts, deregulation, and naked cronyism. Extra bonus points for the explicit effort to legally redefine the term “public interest” as “whatever the energy industry lobbyists we appoint to these unelected bureaucratic positions say it is.”

In case it isn’t clear where the naked cronyism comes in, remember which large, politically active private interest loves buying up power plants and already has considerable interests in Wisconsin. Then consider their demonstrated eagerness to help Mr. Walker get elected and bus in carpetbaggers to have a sad little pro-Mubarak style “rally” in his honor. There are dots to be connected here, but doing so might not be in the public interest.

It’s important to think of this battle as a larger one over the role of the state. The attempt to break labor is part of the same continuous motion as saying that the crony, corporatist selling of state utilities to the Koch brothers and other energy interests is the new “public interest.”"

Wisconsin

The more I hear about Wisconsin, the more it makes me angry. Kevin Drum finds yet another way for my anger to find focus.

As an aside, why do we think it helps the country to screw over teachers? I'll never get this.

Defunding the Democratic Party:

from Kevin Drum by Kevin Drum

"Wisconsin, the birthplace of public sector unions, is now ground zero for the Republican jihad to destroy them, with a GOP-sponsored bill to strip Wisconsin's public unions of their collective bargaining rights now seemingly certain to pass. The cynicism of the bill might not be entirely clear until you hear the details:

[The bill] would require most public workers to pay half their pension costs — typically 5.8% of pay for state workers — and at least 12% of their health care costs. It applies to most state and local employees but does not apply to police, firefighters and state troopers, who would continue to bargain for their benefits.

Except for police, firefighters and troopers, raises would be limited to inflation unless a bigger increase was approved in a referendum. The non-law enforcement unions would lose their rights to bargain over anything but wages, would have to hold annual elections to keep their organizations intact and would lose the ability to have union dues deducted from state paychecks.

Now why would this be? Is it because collective bargaining is somehow less of a problem for public safety employees than for teachers? Because strikes by cops are less hazardous than strikes by teachers? Because public safety employees tend not to be hard bargainers anyway? Because public safety employees are poorly paid?

Or is it because teachers tend to vote pretty reliably for Democrats and public safety employees don't? Bingo.

The irony here is that when you hear those cherry-picked horror stories of vastly overpaid civil servants (usually the result of overtime abuse of some kind), nine times out of ten it involves a public safety employee. It's not teachers who get to retire at age 50 and it's not teachers who end up padding their hours in their last year of work and retiring on 120% of their usual income. Most of the time, it's police, firefighters, and state troopers.

But they're the ones exempt from the Wisconsin GOP's union bashing drive. Go figure."

Fear

You've seen all the polls that show how Americans don't want government spending cut on their favorite programs (which seems like all of them when the questions are asked). In the back of my mind that's always there, like a great card you're just waiting for the right opportunity to play. Let the GOP go all cut crazy; in the end, everybody will wake-up, realized what's happening and then we can fix this nonsense. That's what's been in my head anyway. Probably like a 90% confidence factor.

This cuts through my crap. I shouldn't be so confident.

Chris Christie on Budget Cuts and Electability:

from Weigel by David Weigel

"Chris Christie's speech at AEI yesterday was a compelling little sidebar to the scene in Wisconsin, where a governor working on the Christie model is getting a harsh and immediate confrontation with public sector unions. I'm always struck by how much Christie goes meta and talks about his own popularity -- something Republicans have been paying a lot of attention to. Here's the bluntest that Christie got:

I said to those firefighters you may hate me now but 15 years from now when you have a pension to collect because of what I did you'll be looking for my address on the internet so you can send me a thank you note.

But he also got more specific about his own polling than pols usually get, in public.

I was elected with 49% of the vote, in a three way race in November of 2009. The first Republican elected to statewide office in 12 years in New Jersey, but not with a majority. 49% of the vote and when I started to say we were going to cut k-12 education funding by more than a billion dollars, we're going to cut municipal aid by more than half a billion dollars, we're going to cut every program that we can find in
government and balance without raising taxes. I had everybody telling me, Governor you can't do it. Your approval ratings will go in the toilet. People love these programs... 

And what's happened? After 13 months of fighting and arguing and pushing and impatience, my approval rating's at 54%. No disaster, in fact, more popular today than the day I was elected and that's in a state that is as Democratic as any state in America for a Republican governor. But if you really want to see eye-popping numbers, look across the river. At the person who was recently characterized as my soul mate -- I wonder how he feels about that! Governor Andrew Cuomo, in a poll that just came out 2 days ago, his job approval is at 77%, 77%. And all he's talked about is cutting spending, not raising taxes, addressing entitlement programs, Medicaid, pensions, taking on public sector unions, capping superintendent pay, the hard things. The things that people tell you will lead to political ruin, they don't.

Thus why Republicans are confident they can cut everything, and Democrats are underestimating them."

Paul Ryan is not my favorite politician

The more I read about Ryan, the more obnoxious I find him. And yet he becomes more and more prominent in the GOP. His claim to fame is 'seriousness about cutting budget deficits'. But he's obviously a fraud on this topic. Here's more expose from Jonathan Chait.

Paul Ryan Keeps Attacking Obama For Opposing Ryan-Opposed Plan:

from Jonathan Chait by Jonathan Chait

"Paul Ryan isn't letting go of his Obama-ignored-the-deficit-commission talking point. Here's his interview with Politico's Mike Allen.

Ryan: President Obama, through an executive order, created his own commission to solve this plan.

Q: You were on it.

Ryan: I was on the commission. And you know what he did? He didn't accept -- he didn't take one of the big recommendations of the commission, he basically disavowed the commission. And now, after the commission said we have an economic ruin on our hands, he put out a budget that said, that Erskine Bowles, the Democrat-appointed chairman of the commission says, doesn't go anywhere near where we have to go to solve our fiscal nightmare.

Q: So, do you think the commission was worth having?

Ryan: I thought it was great worth having [sic]. I thought it advanced an adult conversation that we needed to have. But the president just took us a few steps backwards by ignoring the commissions' findings, by ignoring its conclusions. It was mostly Democrats on the commission, which came from his point of view, and [shaking head] he didn't even take the recommendations.

You know what a good follow-up question would be? "So, Paul Ryan you voted against the commission's proposals! How can you attack Obama for failing to endorse policies you voted against?"

Here was Allen's actual follow up question:

Q: Mr. Chairman, you've been talking about entitlements about as long as I've known you. Based on the outreach you've gotten from the the White House in the past, how sincere do you think their current comments about this are?


Guess what? Ryan decided the White House isn't very sincere.

In many ways, this interview was very typical of Ryan's fawning press coverage. The reporter took as a given Ryan's premises that the national debt is our greatest crisis, that "leadership" is synonymous with cutting entitlement programs (and that raising taxes is not "leadership," and that the Bowles-Simpson commission represents the epitome of sound public policy. Now, I disagree with all these premises, but put that aside.

Even by these premises, which are often accepted uncritically within the media, Ryan is not a fiscal hawk. He voted for George W. Bush's 100% debt-financed Medicare expansion. He voted against the Bowles-Simpson plan. Isn't his authority on these issues just a wee bit suspect? Why do the media not only fail to question his sincerity at all, but give him an uncritical platform to question the sincerity of others? It's bizarre."

Social Security is not the problem...

Robert Reich points out that the 'problem' with social security is part of the same trend-line that's been affecting our society for the past three decades. Growing income inequality.

Budget Baloney (1): Why Social Security Isn't a Problem, and the Best Way to Fix the Small Piece of It That Needs Fixing:

from Robert Reich

"New Jersey Governor Chris Christie, a Republican presidential hopeful, says in order to “save” Social Security the retirement age should be raised. The media are congratulating him for his putative “courage.” Deficit hawks are proclaiming Social Security one of the big entitlements that has to be cut in order to reduce the budget deficit.

This is all baloney.

In a former life I was a trustee of the Social Security trust fund. So let me set the record straight.

Social Security isn’t responsible for the federal deficit. Just the opposite. Until last year Social Security took in more payroll taxes than it paid out in benefits. It lent the surpluses to the rest of the government.

Now that Social Security has started to pay out more than it takes in, Social Security can simply collect what the rest of the government owes it. This will keep it fully solvent for the next 26 years.

But why should there even be a problem 26 years from now? Back in 1983, Alan Greenspan’s Social Security commission was supposed to have fixed the system for good – by gradually increasing payroll taxes and raising the retirement age. (Early boomers like me can start collecting full benefits at age 66; late boomers born after 1960 will have to wait until they’re 67.)

Greenspan’s commission must have failed to predict something. But what? It fairly accurately predicted how quickly the boomers would age. It had a pretty good idea of how fast the US economy would grow. While it underestimated how many immigrants would be coming into the United States, that’s no problem. To the contrary, most new immigrants are young and their payroll-tax contributions will far exceed what they draw from Social Security for decades.

So what did Greenspan’s commission fail to see coming?

Inequality.

Remember, the Social Security payroll tax applies only to earnings up to a certain ceiling. (That ceiling is now $106,800.) The ceiling rises every year according to a formula roughly matching inflation.

Back in 1983, the ceiling was set so the Social Security payroll tax would hit 90 percent of all wages covered by Social Security. That 90 percent figure was built into the Greenspan Commission’s predictions. The Commission assumed that, as the ceiling rose with inflation, the Social Security payroll tax would continue to hit 90 percent of total income.

Today, though, the Social Security payroll tax hits only about 84 percent of total income.

The reason it went from 90 percent to 84 percent is a larger and larger portion of total income has gone to the top. In 1983, the richest 1 percent of Americans got 11.6 percent of total income. Today the top 1 percent takes in more than 20 percent.

If we want to go back to 90 percent, the ceiling on income subject to the Social Security tax would need to be raised to $180,000.

Presto. Social Security’s long-term (beyond 26 years from now) problem would be solved.

So there’s no reason to even consider reducing Social Security benefits or raising the age of eligibility. The logical response to the increasing concentration of income at the top is simply to raise the ceiling.

Not incidentally, several months ago the White House considered proposing that the ceiling be lifted to $180,000. Somehow, though, that proposal didn’t make it into the President’s budget."

Don't worry, they'll stay...

I hear the argument that "You can't raise state (local) taxes on the rich, because if you do they'll just leave. What good is that?" It's basically an anti-tax talking point. And why, not? It's pretty persuasive.

Below is evidence that suggests rich people haven't actually left when their taxes were increased.

Tax-Flight Arguments (Still) Don’t Add Up:

from Off the Charts Blog | Center on Budget and Policy Priorities by Jon Shure

"Two governors are proposing this week to raise taxes on their state’s wealthiest residents. Today, Minnesota’s Mark Dayton proposed higher income tax rates on taxable incomes above $150,000 and a surtax on incomes over $500,000; tomorrow, Connecticut’s Daniel P. Malloy is expected to propose a higher rate on incomes over $1 million.

Some critics will surely claim, as they have in other states, that higher-income people will flee from the state. No such flight has occurred in other states that raised top rates, but that won’t stop these attacks, as some recent examples show:

• A Bloomberg News story headlined “New Jersey Population Growth Slows as Taxes Push Some to Flee” noted that the Garden State’s population grew much more slowly between 2000 and 2010 than most other states. It suggested that New Jersey’s top income tax rate — now 8.97 percent — was to blame.
  But the 8.97 percent rate affects only a tiny share of New Jersey filers — the 1.2 percent with taxable incomes over $500,000 — and those folks aren’t leaving. Quite the contrary, there’s strong population growth within that bracket: during roughly the same time period (1999-2008), the number of New Jersey filers with incomes over $500,000 grew by more than two-thirds.
  
  As two Princeton University researchers, Cristobal Young and Charles Varner, conclude in a new report on a 2004 measure that set the 8.97 percent rate: “While in principle it is easier for tax avoiders to migrate out of state than out of country, the reluctance of people to do so gives states significant room to tax top incomes. Indeed, we estimate that New Jersey’s new tax raises nearly $1 billion per year, and tangibly reduces income inequality, with little cost in terms of tax flight.”

• A Connecticut Policy Institute report contends the state’s top income tax rate of 6.5 percent is causing residents to flee. But as Robert Frank pointed out in the Wall Street Journal, the state’s population of top-income households is growing, not shrinking (as in New Jersey). And many of those who leave go to New York, where tax rates are higher.

• An Ocean State Policy Research Institute report claims that Rhode Island’s estate tax (which applies to estates worth more than about $850,000) is the main driver of out-migration from the state. But the report’s spurious reasoning earned it a “false” rating from PolitiFact Rhode Island and a stinging rebuttal from The Poverty Institute of Rhode Island. Among other problems, the study argues that many residents are fleeing Rhode Island for Florida because the latter lacks an estate tax, even though the number of migrating residents actually fell in the years after Florida eliminated its estate tax.

States are addressing huge, recession-induced revenue shortfalls by cutting everything from kindergarten funding to services for Alzheimer’s patients — and more deep cuts are on the way. Policymakers should ask those who can best afford it to pay somewhat more, solid in the knowledge — and despite assertions to the contrary — that they won’t flee from higher income taxes. In short, policymakers should base taxes on the cost of meeting real needs, not on unfounded fears."

Propaganda rules....

As you continue to hear that Fannie and Freddie caused the crisis, remember, it's partisan nonsense.

Fannie/Freddie Market Share Plummeted During Boom:

from The Big Picture by Barry Ritholtz

"You may have missed Matt Phillips massive read Friday afternoon on the GSEs in the WSJ blog Marketbeat.

The entire piece is definitely worth your time, but I found one chart especially compelling: It shows Fannie & Freddie’s market share plummeting from over 70% to under 40%, as Wall Street securitized all manner of non-conforming mortgages:

There is no way to reconcile this chart with the jihadist blatherings of folks like AEI and CATO.

The facts of the matter are simply this: During the housing boom, it was Wall Street, and their mad purchases of Sub-Prime, Alt A and non conforming loans for their privately issued securitization that drove the credit bubble. Not, as the ideologically blinded Peter Wallison claims, Fannie & Freddie.

Class dismissed."

Cuts are not about the deficit...

A second must read post from Jonathan Bernstein today. He's on a roll.

A Plea For Plain Language on Deficits:

from A plain blog about politics by Jonathan Bernstein

"The long term budget deficit is about one thing: medical costs. It's not about 'entitlements.' Social Security isn't a long run problem of any serious consequence, nor are various small programs that count as entitlements in the budget process. Long-term projections of the federal budget are very clear. It's all about health care.

Medical costs. Medical costs are going up much faster than inflation. Therefore, Medicare and Medicaid, and any other government programs affected by medical costs, will, long term, get far more expensive than any realistic level of taxation can handle.

So when budget hawks talk about 'entitlements,' as Andrew Sullivan did today, they're using language that in my view obscures, rather than illuminates, the situation.

Now, I'd go a bit further, as others have done. I agree with those who have argued that health care isn't really, properly speaking, a federal budget problem. It's a serious problem for the American economy. Thinking of it as a budget deficit problem misses the point; shut down Medicare completely and you solve the budget deficit part of it, but you still have an important dysfunctional situation with regard to health care.

Either way, I agree with Jonathan Chait: the way to measure a politician on federal budget deficits is really just to measure whether he or she has made medical costs a priority.

Now, and here's the part in which I give me own views of these things, I'll admit that I simply don't buy the idea that budget deficits have something to do with the future (it's not as if all those under-30s who voted for Obama are going to have to pay back the deficits when they 'come due' down the line -- but they are among those who are badly hurt by a recession-level employment situation, which in my view could have been alleviated with more deficit spending over the last few years). That's a policy opinion, and others may and do disagree.

But as far as talking about budget deficits, there's really no question about it. It's health care costs. Most of the rest of what people are talking about is either stuff around the margins (important! -- government should be run properly! -- but it's not going to change the long-term deficit situation), or is about the preferred size or functions of government, not about deficits at all (well, there's the conservative position, which I interpret as pro-deficit, but that's a slightly different issue).

Getting back to my main point...in my view, those who are upset about the long-term federal budget deficit should talk about it in terms of what it is, health care costs. Just as the phrase 'weapons of mass destruction' encourages sloppy thinking (because nuclear weapons are not really similar at all to chemical and biological weapons in lots of important ways), talking about 'entitlements' confuses the budget situation. I could see 'Medicare and Medicaid' or, perhaps, 'government health programs,' but not entitlements."