tag:blogger.com,1999:blog-20919537950073000642024-02-20T00:48:47.222-08:00California ModeratesPolicy and rationale for pragmatic/centrist political thinking. Political commentary and criticism from a pragmatic, non-ideological point of view.Unknownnoreply@blogger.comBlogger150125tag:blogger.com,1999:blog-2091953795007300064.post-71406721116251236012014-07-03T07:04:00.002-07:002014-07-03T07:04:37.108-07:00essay 5 from rpca - party role & limits <div data-mce-style="text-align: center;" style="text-align: center;">
<b>The Reform Party of California: Its role and its limits</b></div>
<div data-mce-style="text-align: center;" style="text-align: center;">
<b>Context</b></div>
To a large extent, politics is the art and science of spotting problems,
finding solutions, predicting the future and trying to get something
done. That has to occur within the confines of the constitution and
constraints of a chaotic democracy. More than a little of the chaos
associated with competing perceptions of reality is at least partially
grounded in the factors mentioned before, <a data-mce-href="http://reformpartyca.org/reform-party-of-california-essays-1-understanding-the-party-and-its-members/" href="http://reformpartyca.org/reform-party-of-california-essays-1-understanding-the-party-and-its-members/">ideology</a>, <a data-mce-href="http://reformpartyca.org/politics-and-special-interest-money/" href="http://reformpartyca.org/politics-and-special-interest-money/">special interests</a>
and (self-interest - link to essay 3) competing against the public
interest. Expert pundits and politicians offer an endless stream of
confident predictions of what policies will work best for the future.
All of that is based in no small part on an endless stream of [spin -
link to essay 4] and usually profound differences of opinion over what
relevant facts might be and their relevance to defining and solving
problems. In that environment, politics may be more self-serving art
(80%?) than public service science (20%?).<br />
<br />
Despite the great
confidence and sometimes arrogance that routinely comes from expert
pundits and politicians, they turn out to be surprisingly bad at
predicting future events, especially in view of their usual confidence
in their own prowess. A study into what constitutes expert political
judgment showed that at the most, expert pundits got predictions of
future events right about 20% of the time.[1] Most were not even that
good. Stranger still, some statistical models looking at the same
scenarios got the future predictions right about 50% of the time. That
says that statistical models absolutely trounce human experts when it
comes to predicting the future. That is very strange indeed.<br />
Not so strange is the finding that experts are expert at rationalizing or
minimizing their failures, but puffing up their egos when they do get
something right. Experts tend to accept, with little or no question,
facts and outcomes that generally support their world view (ideology)
while rejecting facts or, being much more critical, that tend to
contradict their world view. When you dig into this, it is clear that
all kinds of fascinating human behavior is at work, most of which
appears to be subconscious.<br />
For example, experts that made wrong
predictions usually softened the psychological blow to their egos by
arguing that they were almost right, will soon be right, were wrong for
the right reasons or not wrong at all (a very strange reaction to
objective failure). Sometimes, they succumb to hindsight, rewriting
their own memory of the situation before and after their failed
forecast. In the case of hindsight, experts who made wrong predictions
tended to partially forget what they believed before making the bad
prediction. To save face, they recalled having a better grip on the
weight of various factors than what the data said they had to start
with.[2] The observed hindsight effect wasn't conscious. When faced with
knowledge that one of their predictions was wrong, many experts simply
changed the "facts" about their own beliefs without knowing it. In
essence, human brains were subconsciously rewriting history in hindsight
to protect the ego.<br />
<b>Little downside: </b>The nature
of how the human mind works to distort reality cannot just be
obliterated, even if someone wanted to do that. It is a matter of
biology and is part of what makes humans what they are. However, that
does not mean that there is no choice but to simply accept what human
nature in conjunction with the two-party system foists on us. When
pundits and politicians make their predictions and sometimes base
policies based on those predictions, there is no way for the public to
know the track record of who is speaking. Finding quality in experts is
like trying to compares costs between hospitals for specific medical
services. It is difficult, if not impossible. Given the lack of an
accessible, potent mechanism for imposing more accountability and
reality into politics there is often, maybe usually, little downside for
the players when they are wrong.<br />
That makes sense. For example,
the pundit Mike Huckabee has recently predicted that, unless democrats
gain greater control of congress in the 2014 elections, president Obama
will be <a data-mce-href="http://thehill.com/blogs/blog-briefing-room/news/298021-huckabee-obama-will-be-ousted-over-benghazi" href="http://thehill.com/blogs/blog-briefing-room/news/298021-huckabee-obama-will-be-ousted-over-benghazi">driven out of office</a>
(impeached) before the end of his second term. That is due to his
alleged complicity in an alleged coverup regarding the embassy attack in
Bengazhi, Libya in September of 2012. If Mr. Huckabee's prediction
turns out to be right, the public will no doubt be fully informed, if
nothing else by Mr. Huckabee himself. However, if he is wrong, the
public likely won't remember it and probably won't hear much or anything
about the failed prediction. Finding out about the failure (or his
track record to date) would require a significant effort. That is
something very few people are willing or able to do.<br />
Given the way
things work, including the human ego and two-party politics, it is very
hard to imagine experts voluntarily submitting themselves to a fair,
unbiased system of critical review so that the public can easily see how
good or bad they really are and how well their work compares to
statistical models. There is no upside from the status quo point of view
to establish that sort of a quality control system in politics. That
alleged lack of upside is the two-party system's perception, not the
RPCA's perception. Doing that would likely be a benefit to the public
interest[3] from the RPCA's point of view.<br />
<div data-mce-style="text-align: center;" style="text-align: center;">
<b>What the RPCA offers and can do<br /> </b></div>
If
you accept the arguments the Reform Party of California (RPCA) in
essays 1-4 and the context discussed above as mostly true, then it is
fairly easy to see that two-party system politics is inefficient and
error-prone, to say the least. But what can or should a pragmatic,
non-ideological political party do in the face of complexity,
uncertainty, lack of consensus, massive differences in perceptions of
reality and low trust in politics, assuming those things are problems
that would be good to address?<br />
Assuming it would benefit the
public interest, and the RPCA firmly believes that to be the case, a
pragmatic or centrist political party like the RPCA can be a source of
unspun context and information for assessing the nature of issues and
policy options without bias. Because of the RPCA's non-ideological
starting point for politics and its openness to a real competition in a
marketplace of ideas, i.e., assessing the merit of competing ideas, the
RPCA can provide the kind of information that neither party is
comfortable giving to its members. For example, the California
Democratic Party will tend to shield its major power bases, e.g., public
employees and their unions, from information that might reflect badly
or imply that there is a better way to do things relative to the power
base. The the California Republican Party is no different. Both have
vested interests they protect, partly as a matter of self-interest and
partly as a matter of ideology. Because the RPCA is even handed in
looking for merit, there is no threat to party ideology. Self-interest
for the RPCA is grounded in service to the public interest, not special
interests so that will have to take care of itself. Either the public
will accept that or reject it. Merit can come from the left, right,
center and/or elsewhere. The RPCA's product is unspun reality, unbiased
analysis based on honest assessment of competing ideas.<br />
When it is
feasible to do so, the RPCA can also offer for consideration political
options arising from unbiased analytical models. Statistical models may
be much better than the best experts in predicting the future and thus
shedding light on which policy choices would seem to be the most
efficient over time. It does not necessarily follow that what the RPCA
or its members might ultimately decide for any given issue will fully or
partially accord with what comes from that exercise. It could be the
case that the RPCA or its members consider other factors than pure
efficiency to be important and thus in accord with a policy choice that
differs from what a model suggests.<br />
Nonetheless, such options can
serve at least as a reference point for what an unbiased source might
conclude. Those options can then be accepted or rejected in whole or in
part in the face of those choices. If nothing else, that exercise could
make it easier to more objectively consider policy options that might be
harder to accept if they came from sources who some people might
consider to be biased or self-serving. Resorting to neutral sources
should, over time, make it easier or more comfortable to objectively
assess the strengths and weaknesses of various opinions and points of
view. There is value in approaching political issues in that neutral
manner.<br />
In short, the RPCA can and will offer a neutral,
non-threatening context in which to assess reality and policy options.
The point of that is to get better, more intelligent politics than what
the two-party system can deliver in view of the severe constraints it
has to operate in now (as discussed in essays 1-4).<br />
Another
important product the RPCA offers is a transparent source that can be
trusted to provide unbiased assessments of policy options and respect
for competing ideas. Most Americans are largely passive participants in
politics. Many people do not have the time or inclination to assess the
details or merits of various policy choices and competing perceptions of
reality. Doing that takes real time and effort. For those people, the
RPCA can offer a source that ties together disparate threads of
information (from non-profit public service sources and in the press and
elsewhere from the two-party system) for easy consideration. Obviously,
that requires trust in what the RPCA is doing and why it is doing it.
The best that the RPCA can do to build trust is to be transparent,
non-ideological and honest about the potential and limits of what can
be, none of which you get from the two parties now in power.<br />
<div data-mce-style="text-align: center;" style="text-align: center;">
<b>What the RPCA cannot offer or do</b></div>
The
RPCA cannot make differences in individual perceptions of reality and
personal values disappear. Each individual will incorporate those
concerns into their own opinions. However, the RPCA does hope that that
process will occur after neutral consideration of competing options and
arguments pro and con. Regardless, individual values will play a role.
The goal of that approach is to reduce the massive gulf in perceptions
of reality between the left and right and to give the center a point of
view that is not distorted by the ideology of the left and right.<br />
No
party can come up with policy choices that all of its members will
agree on. Disagreements within political parties are common. Some Tea
party members have <a data-mce-href="http://http://www.dispatch.com/content/stories/local/2013/05/06/tea-party-has-had-it-with-gop.html" href="http://http//www.dispatch.com/content/stories/local/2013/05/06/tea-party-has-had-it-with-gop.html">threatened to leave</a>
the republican party because core principles or ideological beliefs
have been compromised too much. The best that a party can do is to be
transparent about its policy choices.<br />
<b>Special interests: </b>The
RPCA cannot dictate to special interests about how they choose
participate. Two-party politics is pay to play for the most part and
many interests may want it that way. Special interests with money, both
legal entities and wealthy individuals, have to decide what they want
out of politics (a focus on self-interest or public interest) and
whether pay to play or competition on the merits is how politics should
operate.[4] All the RPCA can offer is a changed status quo based on the
merit of competing ideas in lieu of pay to play. The RPCA's vision of
politics might be appealing to at least some special interests who do
not participate in pay to play or who like the idea of competition based
on merit. On the other hand, most willing participants in status quo
politics may not much care for what the RPCA is offering. That is no
surprise. There can be excellent return on investment in the two-party
system <a data-mce-href="http://reformpartyca.org/politics-and-special-interest-money/" href="http://reformpartyca.org/politics-and-special-interest-money/">as discussed in essay 2</a>.<br />
<div data-mce-style="text-align: center;" style="text-align: center;">
<b>What the RPCA would like to achieve</b></div>
It
may be the case that the RPCA can narrow differences in individual
perceptions of reality by looking at alternatives in less threatening
ways, e.g., presenting pros and cons of issues in a value/ideology
neutral manner. That is what the RPCA wants to achieve. Obviously, that
requires significant voter support. The two-party system tells us that
we are far apart on most issues but more careful, less biased, sources
say that most Americans (not ideologues) are often not that far apart.
One RPCA goal is to at least partially convert politics from win-lose
ideological and/or self-interest combat to a search for win-win,
win-neutral or neutral neutral scenarios whenever that serves the public
interest.<br />
Ultimately, the RPCAs' goals include a higher GDP
growth rate and a slow, intelligent recovery of fiscal control. The
party wants to build a more efficient, responsive and transparent brand
of politics compared to the often non-responsive, opaque product the
two-party system typically delivers. Given the way politics now works,
there is no reason to believe that better, more efficient governance can
promote average economic growth without fomenting economic debacles
like <a data-mce-href="http://en.wikipedia.org/wiki/Savings_and_loan_crisis" href="http://en.wikipedia.org/wiki/Savings_and_loan_crisis">the 1980s S&L crisis</a>
or the economic meltdown of 2007-2008. In terms of its business
climate, the business community perceives California to be a relatively
unfriendly place (<a data-mce-href="http://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=web&cd=2&ved=0CDgQFjAB&url=http%3A%2F%2Fwww.calchamber.com%2FHeadlines%2FDocuments%2FCalifornia-Business-Economic-Survey.ppt&ei=SQGNUcL_Mc-50QHs04DQBw&usg=AFQjCNE_Q89SkitfyB_X-Z9ZdGJsW3SosQ&sig2=aSQfj93s1RYhO0KogFcAMg&bvm=bv.46340616,d.dmQ" href="http://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=web&cd=2&ved=0CDgQFjAB&url=http%3A%2F%2Fwww.calchamber.com%2FHeadlines%2FDocuments%2FCalifornia-Business-Economic-Survey.ppt&ei=SQGNUcL_Mc-50QHs04DQBw&usg=AFQjCNE_Q89SkitfyB_X-Z9ZdGJsW3SosQ&sig2=aSQfj93s1RYhO0KogFcAMg&bvm=bv.46340616,d.dmQ">Chamber of Commerce</a>; <a data-mce-href="http://articles.latimes.com/2011/nov/14/opinion/la-oe-cox-malanga-california-business-20111114" href="http://articles.latimes.com/2011/nov/14/opinion/la-oe-cox-malanga-california-business-20111114">business community perceptions</a>; <a data-mce-href="http://www.ppic.org/main/publication.asp?i=867" href="http://www.ppic.org/main/publication.asp?i=867">think tank perceptions</a>). The RPCA believes that California's business and <a data-mce-href="http://www.caltax.org/research/calrank.html" href="http://www.caltax.org/research/calrank.html">tax climate</a> can and should be improved without loss of regulations that <a data-mce-href="http://ballotpedia.org/wiki/index.php/California_Proposition_23,_the_Suspension_of_AB_32_%282010%29" href="http://ballotpedia.org/wiki/index.php/California_Proposition_23,_the_Suspension_of_AB_32_%282010%29">most Californians clearly want</a>, despite <a data-mce-href="http://latimesblogs.latimes.com/greenspace/2010/09/koch-brothers-global-warming-prop-23-climate-change.html" href="http://latimesblogs.latimes.com/greenspace/2010/09/koch-brothers-global-warming-prop-23-climate-change.html">contrary business sector wishes</a>.
Although achieving an optimum balance has been impossible to attain so
far under the two-party system, it is the RPCA's goal.[5] Without
economic growth and health, it is difficult or impossible to be
compassionate in governing.<br />
Footnotes:<br />
1. Philip E. Tetlock, <i>Expert Political Judgment: How good is it? How can we know?</i>, Princeton University Press, 2005, see, e.g., <a data-mce-href="http://books.google.com/books?id=D4o0nkOmxMgC&pg=PA25&lpg=PA25&dq=the+challenge+of+radical+skepticism+%22expert+political+judgment%22&source=bl&ots=sLs0-YCxd9&sig=KSIEfC8ykiLMHNze_BPEgdJrsS0&hl=en&sa=X&ei=idiHUYryG-fwiwLR3YCwCw&ved=0CEkQ6AEwAg#v=onepage&q=the%20challenge%20of%20radical%20skepticism%20%22expert%20political%20judgment%22&f=false" href="http://books.google.com/books?id=D4o0nkOmxMgC&pg=PA25&lpg=PA25&dq=the+challenge+of+radical+skepticism+%22expert+political+judgment%22&source=bl&ots=sLs0-YCxd9&sig=KSIEfC8ykiLMHNze_BPEgdJrsS0&hl=en&sa=X&ei=idiHUYryG-fwiwLR3YCwCw&ved=0CEkQ6AEwAg#v=onepage&q=the%20challenge%20of%20radical%20skepticism%20%22expert%20political%20judgment%22&f=false">pages 49-51 and 53-54</a>.
Maybe not surprisingly, there is no universal agreement among social
scientists that something like "expert political judgement" can even be
measured. That school of thought sees politics about like this; History
is "ultimately one damned thing after another, a random walk with upward
and downward blips but devoid of thematic continuity. Politics is no
more predictable than other games of chance." (page 19) Of course, if
that perception of reality is true then why should anyone listen to any
pundit or politician confidently expressing any opinion about anything
relevant to politics? And, why (i) were the statistical models so much
better than human experts and (ii) is it that certain types of human
thinkers were consistently better than others in predicting the future?
It must be the case that expert pundits and politicians themselves
believe in their own ability to see the future, otherwise they would not
be so certain that they possess anything more than a faint idea of what
they are talking about or why they feel the way they do. To say the
least, all of this can be disconcerting to some people, especially
ideologues. Unspun reality has a nerve-wracking tendency to undermine
ideology. That implies that many (most?) ideologues will reject or
distort the science and the results described here. If they didn't, that
would open the door to a real, critical review of exactly what the
two-party system has done, especially ideologues, and how effective they
have been and might be going forward.<br />
2. Philip E. Tetlock, <i>Expert Political Judgment</i>, <a data-mce-href="http://books.google.com/books?id=9_Wy8HJ9mRAC&pg=PA205&lpg=PA205&dq=autobiographical+memory+%22expert+political+judgment%22&source=bl&ots=Aah49egydp&sig=DB7LPlKJbN50WLl451Lk1wOW6OQ&hl=en&sa=X&ei=tOCHUe__FuKliQKs_oCgCw&ved=0CD4Q6AEwAA#v=onepage&q=autobiographical%20memory%20%22expert%20political%20judgment%22&f=false" href="http://books.google.com/books?id=9_Wy8HJ9mRAC&pg=PA205&lpg=PA205&dq=autobiographical+memory+%22expert+political+judgment%22&source=bl&ots=Aah49egydp&sig=DB7LPlKJbN50WLl451Lk1wOW6OQ&hl=en&sa=X&ei=tOCHUe__FuKliQKs_oCgCw&ved=0CD4Q6AEwAA#v=onepage&q=autobiographical%20memory%20%22expert%20political%20judgment%22&f=false">pages 202-205</a>.
"Hindsight bias is a failing of autobiographical memory." Page 205. The
human mind is adept at playing quiet, comforting tricks with memory and
thus perceptions of reality. Unfortunately, we are typically unaware of
this and many people will tend to deny or disbelieve it when confronted
with this aspect of human nature. Discomforting as it may be, science
strongly suggests that <a data-mce-href="http://www.northwestern.edu/newscenter/stories/2012/09/your-memory-is-like-the-telephone-game.html" href="http://www.northwestern.edu/newscenter/stories/2012/09/your-memory-is-like-the-telephone-game.html">our brains betray us</a> by distorting memories a little each time we recall them (link to the <a data-mce-href="http://www.jneurosci.org/content/32/35/12144.full.pdf+html" href="http://www.jneurosci.org/content/32/35/12144.full.pdf+html">original scientific publication</a>
describing recall-induced memory distortion). Hindsight bias seems to
be part of the phenomenon at least when a challenge to the ego is
involved, e.g., when an expert is told that his or her prediction is
wrong.<br />
3. One can argue that knowing how good or bad expert
political judgment is does not serve the public interest because
politics is just a game of chance. But, if the results of the science
discussed here really do apply across the board, experts playing that
game of chance are wrong at least 80% of the time. Knowing how effective
the experts really are would thus only serve to undermine trust our
whole political system and that would harm the public interest. That is
one way to see it. Conveniently, that "ignore it and it won't bite you"
vision tends to preserve the status quo. Another way to see it is to
call the two-party system's bluff and demand to be treated like adults.
Why does the two-party system think that indulging in endless spin (link
to essay 4) and confident prognostication serves the public interest
any better than brutal honesty? Why treat American citizens like
mushrooms? When one looks at the poll numbers, trust in government in <a data-mce-href="http://www.gallup.com/poll/5392/trust-government.aspx" href="http://www.gallup.com/poll/5392/trust-government.aspx">Washington</a> (and in <a data-mce-href="http://www.mercurynews.com/politics-government/ci_22636114/mood-californians-is-lifting-new-field-poll-shows" href="http://www.mercurynews.com/politics-government/ci_22636114/mood-californians-is-lifting-new-field-poll-shows">California</a>
to a lesser extent) has been low for years. Being more honest and
transparent would increase public trust and better serve the public
interest. That just might make governing easier and maybe a bit more
efficient.<br />
4. The RPCA fully understands that most special
interests, including the two parties, will strenuously argue that what
they do serve the public interest over special interests and that
politics is not pay to play. Those interests will be able to point to
many things that support their arguments. Those arguments are heard and
have been considered. They are not persuasive. The balance of the
evidence (as discussed in this series of essays and from many other
sources) and common sense have led the RPCA to the firm conclusion that
money plays too big a role in accessing government and that service is
tipped too far in the direction of serving special interests at the
expense of the public interest. This amounts to differing perceptions of
reality. The question is obvious: What does your instinct and common
sense tell you about how politics works and who it serves? The RPCA's
positions on those points and why it holds those positions and should
now be clear. This is a fundamental dispute over what politics is and
how it should operate. In these regards, the RPCA is different from the
California Democratic and Republican Parties.<br />
5. The issue here is
one of reasonable balance. Democratic ideology and approach to
governance embraces an ever growing and complex web of regulation. That
imposes an increasing burden on essentially all aspects of commerce and
society. Republican ideology and approach to governance embraces stark
deregulation, including deregulating things that most Californians want
some regulation of. There has to be a better balance. Because democrats
dominate California government, complexity and burden will increase even
if it is not needed or wanted.Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-2091953795007300064.post-89718338922429905542014-01-25T16:40:00.001-08:002014-01-25T16:40:21.463-08:00Tax policy change is not possible<h3 data-mce-style="text-align: center;" style="text-align: center;">
<span data-mce-style="color: #800000;" style="color: maroon;">Reform Party of California Commentary</span></h3>
On
occasion, especially during elections, some politicians and candidates
for congress or president promise tax policy reforms which typically
refer to tax code changes. That has been the case for years, maybe a few
decades. Analysis of tax data suggests that the U.S. treasury loses
over $400 billion per year to tax evasion, which is illegal non-payment
of taxes owed. A reasonable estimate is that unknown hundreds of
billions per year is lost to tax avoidance measures that congress never
intended, but which are nonetheless legal. Tax policy changes could
significantly alter the situation, but the chances of that happening
appear to be very low at best.<br />
<br />
To the Reform Party of California
(RPCA), indefensible, incoherent tax policy is one of the most
persuasive factors, maybe the single most persuasive, that the two-party
system, congress and the White House is not really serious about
improving America's fiscal situation. The sheer magnitude of the money
that could be collected from tax evasion alone, probably $320 to $350
billion/year, is strong evidence that there is insufficient political
will for either tax code reform or collection of most of what is due.
Collecting tax revenue that is owed to the U.S. treasury is not a matter
of raising any new tax and thus it should not offend conservative
political anti-tax ideology. As for liberal political ideology, there is
nothing obvious that would render either reasonably effective
collection of taxes owed or tax code reform necessarily objectionable.<br />
<br />
The
circumstances here include a federal debt well over $17 trillion[1],
federal spending heavily subsidized by new debt and hundreds of billions
of dollars/year in "free" money that is allowed to simply vanish.
Collecting at least some of the owed money does not require tax code
reform, but it is nonetheless not done. Given that, it is fair to
conclude that the two-party political system uses the tax code for
payback for campaign contributions. If collecting what is owed is an
unattainable political goal, then asking for real tax code reform is
even less attainable because bipartisan cooperation would be needed in
addition to the political will to overcome resistance from lobbyists who
fight to maintain the status quo on behalf of their clients.<br />
<br />
The
RPCA is not alone in seeing tax policy as difficult or impossible to
touch in any meaningful way. On Dec. 12, 2013, C-Span broadcast <a href="http://www.c-spanvideo.org/program/316740-1">a Q&A interview</a> with Marty Sullivan, the chief economist for <a data-mce-href="http://www.taxanalysts.com/" href="http://www.taxanalysts.com/">Tax Analysts</a>,
which is a non-partisan, non-profit provider of tax news and analysis
with about 200 employees.[2] Dr. Sullivan, a well-known analyst and
former republican, is no longer affiliated with the democratic or
republican parties. His focus is on communicating intelligent tax
analysis to his customers and the public without partisan political
baggage. The 59 minute interview focuses on tax avoidance tactics,
which <a data-mce-href="http://www.washingtonpost.com/blogs/wonkblog/wp/2013/10/26/marty-sullivan-figured-out-how-the-worlds-biggest-companies-avoided-billions-in-taxes-heres-how-he-wants-to-stop-them/" href="http://www.washingtonpost.com/blogs/wonkblog/wp/2013/10/26/marty-sullivan-figured-out-how-the-worlds-biggest-companies-avoided-billions-in-taxes-heres-how-he-wants-to-stop-them/">Sullivan has studied in detail</a>
(key comments on tax avoidance tactics are are at 2:15 to 6:20), but
other topics including tax policy issues are also discussed.<br />
<br />
<br />
A
couple of critical points regarding tax policy jump out from the
comments that Sullivan makes in his C-Span discussion. At 14:35 to 16:13
of the C-Span broadcast, Sullivan points out that congress is simply
incapable of making reasonable, sensible changes to the tax code in the
face of lobbyists who overpower congress as an institution. As Sullivan
puts it, congress is "swarmed" by tax lobbyists who argue that proposed,
common-sense tax code changes will "be the end of the world." Congress
just caves in and nothing changes.<br />
<br />
At 16:15 to 20:00, Sullivan
argues that campaign contributions to key people in congress are not
nearly as powerful as is the capacity of lobbyists who are technical tax
experts to influence the writing of the tax code. That process is not
normally subject to press scrutiny. Even if the press did decide to try
to understand what was going on during legislation, the details likely
would not be fully understood. In essence, it appears to be the case
that the process of writing tax law is done behind closed doors between
congressional staffers and special interest lobbyists who know far more
about tax code matters than congressional staffers. It is no surprise
whatever that the tax code is littered with tens or hundreds of billions
of dollars in tax breaks that congress neither intended or even
understood in the first place.<br />
<br />
Despite claims by key politicians
that tax policy reform is likely in a given legislative session,
Sullivan argues in comments at at 25:35 to 27:18 that such sentiment
grossly overstates the odds of change by about 10-fold, i.e., if the
congressional committee chairpersons say there is a 50% chance of
reform, the reality is that there is about a 5% chance. The reason
Sullivan gives is that when congressional chairpersons propose
meaningful tax policy reform, that necessarily includes the bad news,
i.e., who is going to pay for closed loopholes. When those details
become known to the business community, they do not like what they see.
That presumably triggers the swarms of stinging lobbyists who argue the
world is coming to an end. In fact, all that ends is the political will
and congressional capacity to pass any meaningful tax policy reform.[3]<br />
<br />
Finally,
at 30:30 to 31:28, Sullivan argues that democratic and republican
politicians "both do a lousy job" regarding tax policy, despite the fact
that republicans at least talk about the topic more than democrats and
they try to elevate the importance of reform. In Sullivan's opinion,
unless there is a self-interested motive, most democratic politicians
just do not care enough to try anything. Sullivan's point that tax
policy reform is not sufficiently important for meaningful tax reform to
happen is a point <a data-mce-href="http://reformpartyca.org/washington-is-not-serious-about-spending/" href="http://reformpartyca.org/washington-is-not-serious-about-spending/">the RPCA has argued repeatedly</a>.<br />
<br />
Obviously
defenders of the two-party status quo will reject Dr. Sullivan's
version of reality as nonsense, misguided, self-serving and/or otherwise
simply wrong. So, who are you going to believe? You decide. While you
are deciding, consider these two arguments. First, every year that
passes under the status quo, the U.S. treasury loses another, say,
$500-$600 billion in revenue to criminal tax evasion and unintended tax
avoidance, with some, about one-third at present, of that amount
financed by increasing federal debt. Second, that accumulating debt and
lost treasury revenue decreases America's GDP growth by, say, 0.7% to
1.0% annually. If those arguments are wrong, it would be nice to see the
unspun data and unbiased analysis that refutes those two assertions.
Such data and analysis probably does not exist.<br />
<br />
Footnotes:<br />
1. On the books federal debt is <a data-mce-href="http://www.washingtontimes.com/news/2013/oct/18/us-debt-jumps-400-billion-tops-17-trillion-first-t/" href="http://www.washingtontimes.com/news/2013/oct/18/us-debt-jumps-400-billion-tops-17-trillion-first-t/">over $17 trillion</a> and off the books debt amounts to <a data-mce-href="http://www.usnews.com/opinion/mzuckerman/articles/2012/12/28/mort-zuckerman-brace-for-an-avalanche-of-unfunded-debt" href="http://www.usnews.com/opinion/mzuckerman/articles/2012/12/28/mort-zuckerman-brace-for-an-avalanche-of-unfunded-debt">about $85-90 trillion</a> that will come due in the next 30-40 years or so.<br />
2.
The information that Tax Analysts generates is among the best sources,
maybe the best, for understanding tax law and policy. U.S. tax policy
and its tax code is blindingly complex. Attaining a reasonable grasp of
the issues for a lay audience requires resort to politically unbiased
expert analysis and opinion.<br />
3. This is not meant to be a
criticism of special interests or their swarms of technical expert
lobbyists. They are doing exactly what they are supposed to do. It is
the job of special interests to defend their special interests. It is
the job of congress, not the for-profit business community, to protect
the public interest. When it comes to tax policy, which is urgently
needed and has been for years, congress is AWOL.Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-2091953795007300064.post-61551351317644349472014-01-10T11:51:00.000-08:002014-01-10T11:51:50.005-08:00trust in govt & illegal govt activities. <br />
Reform Party of California Commentary<br />
<br />
Poll data regarding Americans' trust in the two dominant parties and all three branches of the federal government is evidence of <a href="http://www.people-press.org/2013/10/18/trust-in-government-nears-record-low-but-most-federal-agencies-are-viewed-favorably/">widespread public mistrust and unhappiness</a>. <a href="http://www.gallup.com/poll/165392/perceived-need-third-party-reaches-new-high.aspx">Some poll data suggests</a> that many Americans are now receptive to the idea that a third political party is needed to offset some of the perceived two-party ineptitude and/or corruption. Opinion here fully accords with those beliefs.<br />
<br />
There are good reasons for Americans to be unhappy. Average people are economically stressed by long-term low wage growth and there is a common perception that the two parties are more focused on serving themselves and their concerns than they are on serving the public interest. <br />
<br />
Reasons to be unhappy with government include periodic revelations that some federal agency or another is doing things that are either illegal, almost illegal or unnecessarily damaging to personal liberties. <a href="http://www.washingtonpost.com/world/national-security/edward-snowden-after-months-of-nsa-revelations-says-his-missions-accomplished/2013/12/23/49fc36de-6c1c-11e3-a523-fe73f0ff6b8d_story.html">Information on domestic spying</a> by the National Security Agency (NSA) that Edward Snowden released is a recent example. Not surprisingly, the political system defends itself and its actions, or failures to act, while only dimly recognizing that, yet again, they have fallen short on being sufficiently honest with the public. One key NSA insider, Chris Inglis, considers what Snowden has done to the NSA to be <a href="http://www.npr.org/player/v2/mediaPlayer.html?action=1&t=1&islist=false&id=261079074&m=261271912">equivalent to burning down a house</a> so that, now that it is completely burnt, it can be rebuilt the right way.<br />
<br />
That arrogant, dismissive attitude is just more evidence that the American people come in second to other concerns that really do not need to trump the public interest such as the public's need to know. Mr. Inglis, as intelligent as he might be, just doesn't get it. The NSA's house would have been properly built in the first place if our two-party political system was focused on service to the public interest before service to narrower perceived needs for keeping the public uninformed. Snodwen's leaked documents have prompted calls from both democrats and republicans in congress to a review and reassessment of exactly what the NSA is doing. Why are these calls for a review and reassessment of the NSA coming now? A review occurs now because Snowden forced it, not because there was any congressional intent to ever do anything. President Obama, congress and the entire two-party system was focused on themselves. They were not doing a proper job of oversight in service to the public interest.[1]<br />
<br />
<div style="text-align: center;">
<b>Some things don't change</b> </div>
A past federal "indiscretion" is worth mention. On March 8, 1971, a group of 8 political activists broke into an FBI office in Media, PA and stole nearly every document in the office. The burglars then began leaking the documents to the press. The activists knew what they were looking for and they just got lucky that proof of their suspicions were in that office. The leaked documents proved that the FBI was heavily engaged in domestic spying, dirty tricks and other forms of politically-inspired sleaze (New York Times, Jan. 7, 2014; <a href="http://www.nytimes.com/2014/01/07/us/burglars-who-took-on-fbi-abandon-shadows.html?_r=0">online here</a>). Not surprisingly, the federal government tried to prevent the press from reporting on the, no doubt in the name of national security. The FBI was engaged in trying to suppress political and antiwar activists and dissent. The FBI even tried to blackmail Martin Luther King, Jr. into committing suicide by threat of exposing King's extramarital affairs if he didn't.<br />
<br />
Some of the burglars in the 1971 burglary and theft have recently outed themselves and explained their motives. The statute of limitations for burglary charges expired March 11, 1976, so none of them can be prosecuted. They all maintained their anonymity until now because they were not interested in personal publicity. They just wanted the public to know what the FBI was doing. Without the Media burglary and theft of documents, there is no way to know when and what changes, if any, would have come to the FBI. Congress was then, just as it is now, asleep at the switch and focused on interests other than serving the public interest. It took whistle blowers to force change.<br />
<br />
<div style="text-align: center;">
<b>To trust or not to trust, that is the question, or at least its one question of several</b> </div>
There are very good reasons that millions of Americans do not have much trust in the federal government, the two parties or their politicians. That two-party system has earned distrust. It deserves to be distrusted. That raises the question about what can or does one do if the situation is deemed to be unacceptable? There does not appear to be much of anything that the public can do other than to simply walk away from the two parties and the system of politics they build and forcefully defend every single day. Events like these do not happen by accident. They reflect the reality that the two-party system does not put the public interest first. Unfortunately, that is an assertion that both parties, the federal government and special interests who benefit from two-party politics will vehemently dispute. Change is not going to come from within because from the status quo point of view, nothing is broken and therefore nothing needs to be fixed. Do you believe that or not?<br />
<br />
Footnote:<br />
1. Absent Snowden's revelations, there is no reason to believe that there would be any reassessment or change at the NSA now or ever. After Snowden, one suggested change that the NSA apparently enthusiastically accepts now would be to have an advocate arguing for the public's interest in the secret Foreign Intelligence Surveillance (FISA) court. That should have been done from the start or at least sometime before Snowden blew the whistle. The House of Representatives had plenty of time to cast 40 or more votes to overturn or defund some or all of Obamacare, but it did not have time to cast an even cursory glance at what the NSA was doing. Whose interests did that serve? A separate issue is whether the presence of a public advocate in the FISA court would make a difference. Years ago, congress created the office of <a href="http://www.irs.gov/uac/Taxpayer-Advocate-Service-6">National Taxpayer Advocate</a> to protect the public's interest regarding tax policy. That advocate argues intelligently and forcefully every year for common-sense tax policy changes and every year congress simply ignores everything the public's advocate argues for. If that isn't evidence that the public interest is a second- or third-order priority for the two-party system, then what is?Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-2091953795007300064.post-74476220561497099152014-01-04T22:11:00.000-08:002014-01-04T22:11:11.897-08:00Political intelligence industry.<br />
<div style="text-align: center;">
Reform Party of California Commentary</div>
<br />
<div style="text-align: center;">
<b>Summary and conclusions </b></div>
In April of 2012, President Obama signed the Stop Trading on Congressional Knowledge ("STOCK") Act into law (http://en.wikipedia.org/wiki/STOCK_Act). The law prohibited insider trading by members of Congress and other government employees, which had been legal since the time when inside trading on securities was even possible in the U.S. The STOCK Act exempted lobbyists and non-federal people dealing with congress from the ban on insider trading, so there some people could still trade on inside information that arose from congressional activities that could affect stock and securities prices. Some member of congress had been trying for years to pass a law to make such inside trading illegal. However, some powerful members of congress liked being able to exploit
their inside information to make money on the stock market, so the
reformer's efforts were simply ignored for years.[1]<br />
<br />
On April 11, 2013 President Obama signed an new bipartisan bill into
law, a rare event. The White House announced the law in an obscure 1-sentence press release. One commentator described the new law like this: "The STOCK Act passage was on the front page. When it got de-fanged, the
announcement was so buried that only the most hardcore of wonks could
find the news." (http://finance.yahoo.com/blogs/breakout/stock-act-gets-gutted-why-care-173159298.html)<br />
<br />
<br />
According to the Congressional Research Service (CRS)
(https://www.govtrack.us/congress/bills/113/s716), the new law
eliminated the requirement for "mandatory public, on-line financial
disclosure reporting by
congressional staff (except Members of Congress and congressional
candidates) and executive branch officers and employees (except the
President, the Vice President, and officers at levels I and II of the
Executive Schedule who require nomination by the President and
confirmation by the Senate)." The CRS also stated that the law applies "the financial disclosure reporting
requirements and restrictions of the STOCK Act only to Members of
Congress, congressional candidates, the President, the Vice President,
and executive branch officers at levels I and II of the Executive
Schedule who require nomination by the President and confirmation by the
Senate." In other words congressional and executive branch staffers, lobbyists, aides and almost anyone who works for or is close
to a serving politician can trade on inside information once they become aware of it.<br />
<br />
<br />
Because laws that congress plans to pass or not pass can profoundly affect the price of individual stocks or securities or prices of stocks in an industry or an entire market, fortunes can be made trading based on the information that only insiders have. Average Americans are simply out in the cold and kept ignorant, except maybe to occasionally trade against the elites who have the inside information. It is fair to say that it looks and smells bad, to say the least. Given the great value of some inside information, it is no surprise that enterprising entrepreneurs, all stalwart pillars of the community no doubt, have established an industry called the political intelligence industry (PII). The PII collects and sells inside information obtained from congressional activities to select, wealthy, elite clients.<br />
<br />
According to one source, the PII collected $402 million in 2009 from clients, who in turn made unknown millions or billions by trading on the precious information (http://www.motherjones.com/politics/2013/11/political-intelligence-industry-jellyfish?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed:%20TimMurphy%20%28Tim%20Murphy%29). Because clients pay millions of dollars to obtain it, there is real value in the information the PII collects for its them (http://online.wsj.com/news/articles/SB10001424127887324660404578202072713156116; https://blogs.law.harvard.edu/corpgov/2013/07/20/the-stock-act-and-the-political-intelligence-industry/). Also no surprise, clients who buy information from PII sources fight proposed rules to disclose their identities and republicans in the House protect that desire for anonymity PII clients (http://www.reuters.com/article/2013/05/08/us-usa-congress-politicalintelligence-idUSBRE94718C20130508). That has been going on since 2012 (http://online.wsj.com/news/articles/SB10001424052970204059804577225572815851652?mod=googlenews_wsj).<br />
<br />
It is fair to characterize the situation or facts like this. Congress had no qualms about engaging in inside trading until it was embarrassed into passing the STOCK Act, in part because its public approval rating had dropped to abysmally low levels. The STOCK Act left the PII intact and it never was a blanket prohibition against insider trading based on information arising from congressional activities. A year later, congress and the President repeal some of the disclosure requirements to for some federal staffers and aides. The House continues to protect the identity of PII clients from disclosure. <br />
<br />
It is fair to draw the following conclusions from the situation. There is no compelling rationale for allowing congressional staffers, lobbyists or anyone else in possession of inside information arising from congressional activities to be allowed to make inside trades. Because is there no other obvious logic behind Republicans in the House protecting the identities of clients who profit from trading on PII information, it is fair to conclude that members of the PII industry and/or their clients maintain their privileges in return for campaign contributions. If there was another rationale, congress would have articulated it loud and clear. Finally, it is reasonable to conclude that congress and President Obama are incapable of resisting irrational and self-serving demands by federal employees and political donors.<br />
<br />
This in just one small issue in a greater scheme of things, but it exemplifies what can pass for acceptable business as usual in the two-party system. There are good reasons that millions of Americans have lost faith in the two parties and in the federal government as they now operate it. Despite continuing low public approval, congress and the President obviously believe that they can simply continue this kind of business as usual without even deigning to offer an explanation to the public. Obviously they think the public does not deserve an explanation.<br />
<br />
Footnotes:1. Apparently, what caused congress to finally pass the STOCK Act was a
combination of (i) dismal new lows in congressional approval ratings in 2012 and
(ii) President's Obama's mysterious decision to actually lead on
something for a change and make this into an issue. In passing the law,
congress congratulated itself on its high ethical standards and all the
usual self-serving propaganda. The fact that congress was, in essence,
embarrassed into acting on this was ignored. It was just two-party
politics as usual.<br />
<br />
<br />
<div style="text-align: center;">
<b>------------------------------------------------</b> </div>
Pros & cons of inside trading: http://www.econlib.org/library/Enc/InsiderTrading.html<br />
Obama guts the stock act: http://finance.yahoo.com/blogs/breakout/stock-act-gets-gutted-why-care-173159298.html<br />
White house's 1-sentence announcement of the new law: http://www.whitehouse.gov/the-press-office/2013/04/15/statement-press-secretary-s-716 <br />
librabry of congress summary details of the new law: https://www.govtrack.us/congress/bills/113/s716 <br />
<br />
Footnotes:<br />
1. <br />
x <br />
<br />
<b>Harvard summary of the STOCK Act: </b>https://blogs.law.harvard.edu/corpgov/2013/07/20/the-stock-act-and-the-political-intelligence-industry/<br />
<b>Reuters article:</b> http://www.reuters.com/article/2013/05/08/us-usa-congress-politicalintelligence-idUSBRE94718C20130508<br />
<b>Mother Jones article:</b> http://www.motherjones.com/politics/2013/11/political-intelligence-industry-jellyfish?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed:%20TimMurphy%20%28Tim%20Murphy%29<br />
<b>WSJ research: </b>http://online.wsj.com/news/articles/SB10001424127887324660404578202072713156116<br />
<br />
<b>Hot Air's conservative pol int industry viewpoint: </b>http://hotair.com/archives/2013/01/18/wsj-the-burgeoning-political-intelligence-industry/<br />
<br />
<b>original post</b><br />
Sometimes politics is just so much better than fiction. On Thurs., Feb. 16, 2012 (pages C1, C2; <a href="http://online.wsj.com/article/SB10001424052970204059804577225572815851652.html?mod=googlenews_wsj">online article</a>) the
Wall Street Journal ran an article with the title "New Bill Clouds
Legality of Tips." As it turns out, Congress is drafting a new law that
would ban insider trading by the president, members of congress,
congressional staffers and maybe some others. The article had nothing to
do with tipping the waiter or bartender.<br />
<br />
<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEi6KVqlauH11B6HeoVPTNHAtJjGSkpurxICJKz76DvcdjMF7u_xKNllY45XifKBu6WEhKNg2pun3aMUbSRB4QB_EKzn40dXY5z2NaTEv2vbnrYP3zR6Av3qWFi6uPfmAGMkfvt9uXplV4w/s1600/CM+99.jpg" style="margin-left: 1em; margin-right: 1em;"><img border="0" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEi6KVqlauH11B6HeoVPTNHAtJjGSkpurxICJKz76DvcdjMF7u_xKNllY45XifKBu6WEhKNg2pun3aMUbSRB4QB_EKzn40dXY5z2NaTEv2vbnrYP3zR6Av3qWFi6uPfmAGMkfvt9uXplV4w/s320/CM+99.jpg" height="320" width="209" /></a></div>
<div style="text-align: center;">
<span style="font-size: x-small;"><b>Stardust launch 1999</b></span></div>
<span style="font-size: x-small;"><b><br />
</b></span><br />
The WSJ article was about information gatherers who
work with people in congress and/or their staff and in the course of
their work get inside information about impending laws, i.e., "tips".
The WSJ noted the existence of a "political intelligence" industry
dedicated to making money from this unique source of information. The
people involved sell their inside information or "tips" to whoever has
the cash and money to capitalize on the information. Those folks then
make stock trades and money. According to an attorney familiar with this
industry, the "legal risks may well outweigh the financial benefits" if
the proposed bill becomes law.<br />
<br />
This whole
thing started up two or three months ago when the WSJ ran an article and
60 Minutes news show aired a piece at about the same time about people
in congress, their staffers and lobbyists doing inside trades based on
what congress was or was not going to do. Insider trading by congress,
their staffers and lobbyists who do business with them is legal and thus
a good way to make money.<br />
<br />
<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEihy6h5SW7Z63vTo3LmrVmUVBU6HHFzsxBpGMi5F6R72O3MyfW-6HjSNY-qo3SJvZKNNndMcrhG_xvKtiNukRr8g1RWV211z4oOgX-_OvuDNZAld2G0grmyHGMUUNCDtdmDTl35c6WiQHw/s1600/CM+100.jpg" style="margin-left: 1em; margin-right: 1em;"><img border="0" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEihy6h5SW7Z63vTo3LmrVmUVBU6HHFzsxBpGMi5F6R72O3MyfW-6HjSNY-qo3SJvZKNNndMcrhG_xvKtiNukRr8g1RWV211z4oOgX-_OvuDNZAld2G0grmyHGMUUNCDtdmDTl35c6WiQHw/s400/CM+100.jpg" height="400" width="260" /></a></div>
<br />
<br />
<a href="http://en.wikipedia.org/wiki/Insider_trading#Insider_trading_by_members_of_Congress">People in congress</a> and their friends have been doing inside trades for a long time. <a href="http://www.marketplace.org/topics/economy/lawmakers-inside-advantage-trading">Occasional stories</a>
about this have come up over the years, but the topic apparently didn't
penetrate public consciousness until (i) the two high profile WSJ and
60 Minutes stories and (ii) the public approval rating of congress
dropped to below about 17% last year, an all time low until <a href="http://www.azcentral.com/news/politics/articles/2012/02/09/20120209congress-approval-ratings-record-low-poll.html">more recently when it it hit 10%</a>.
Profound public disapproval coupled with growing awareness that people
in congress and their cronies were inside traders may have finally
prompted a reluctant congress to fix the "problem". <br />
<br />
If
those things are not the reason for congress' attention to this topic,
then who knows what is. Regardless, there is a reason. Congress partly
feeds its massive ego on being above the law. They won't mess with that
exhaulted status unless something very serious forces a change.<br />
<br />
The congressional
effort to deal with this public relations issue may cause the political
intelligence industry massive potential collateral damage (or maybe
not, <a href="http://blogs.wsj.com/law/2012/02/16/political-intel-industry-sees-new-threat-in-stock-act/">if Republicans get their way</a>).
That was the focus of the WSJ article. The trouble with the pending
legislation is that it may require people who gather tradable
information to file disclosure reports. The horror of that is that the
firms who work in this industry and the people who buy that inside
information would likely lose their anonymity and the fees paid for such
information might be made public. That awful scenario would ruin the
whole political intelligence industry and cause massive job losses among
the very wealthy and well-connected. Economic chaos would ensue. Or
would it?<br />
<br />
<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhj3Be71IB0HhWsqwdLYHRsFh52P1oEmuLf-vANitMZuVz9aelbxsWilOdPhWK0KFXC5JaEBQmrvGkTIQWDqt8CMrIFjTZJlHH6rXGL3IC0YDeqz_G7jlFQE58k3obVa-B7XKQaOol5Qe8/s1600/CM+101.jpg" style="margin-left: 1em; margin-right: 1em;"><img border="0" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhj3Be71IB0HhWsqwdLYHRsFh52P1oEmuLf-vANitMZuVz9aelbxsWilOdPhWK0KFXC5JaEBQmrvGkTIQWDqt8CMrIFjTZJlHH6rXGL3IC0YDeqz_G7jlFQE58k3obVa-B7XKQaOol5Qe8/s400/CM+101.jpg" height="400" width="265" /></a></div>
<br />
<br />
<div style="text-align: center;">
<b>A plethora of questions from the bemused/irate</b></div>
<div style="text-align: center;">
<b>taxpayer outside the beltway</b></div>
Why
would the political intelligence industry be damaged at all if they had
to disclose the people, fees and profits involved? After all, what they
do is perfectly legal. Perfectly legal. What's wrong with making money?
What's wrong with screwing the party (admittedly, usually anonymous)
without inside information on the opposite side of an insider's trade?
Its legal in this context. This is just a matter of winners and losers
in a deadly serious capitalist game of making money. <a href="http://en.wikipedia.org/wiki/Insider_trading#Arguments_for_legalizing_insider_trading">Some economists</a> defend insider trading and some Republicans (<a href="http://blogs.wsj.com/law/2012/02/16/political-intel-industry-sees-new-threat-in-stock-act/">Eric Cantor</a>)
are trying to defend the fine, job-creating, mom & apple
pie, all-American political intelligence industry, so there must be
merit to it, right?<br />
<br />
Or, is it just that the people
involved in this profitable industry don't want the rest of us idiots to
know just how much money they make and how they make it, i.e., by
cheating? But why? Are they embarrassed? Come to think if it, just what
do inside trades do for the U.S. economy as a whole? It punishes fools
without inside information and dumb enough to think they trade in a
clean and fair marketplace. So, is inside trading good for the economy
in some other way? Does it create confidence in our economy among those
with inside access, wealth and power and that more than trumps any
downside among the idiot masses or in the overall economy? <br />
<br />
Allowing
legal inside trading arguably undermines public trust in the federal
government and financial markets by showing the reality of just how
corrupt our government and "respectable" business people can be. It
undermines public trust in congress. <a href="http://money.usnews.com/money/blogs/the-smarter-mutual-fund-investor/2011/12/22/congressional-insider-trading-and-american-hypocrisy">It is hypocritical</a>,
e.g., a few in congress complain about people in congress doing it but
say nothing about people outside congress. If its bad for people in
congress to do insider trades why isn't bad for those on the outside?
Does the inside trade industry create jobs in the wider economy? If so,
how many jobs and what are they - a few butlers and yacht and private
jet salesmen? <br />
<br />
<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEggBdOk7DdJhN8mWrehJXsfCGzh_8-T3JN81xnZGsJgjwz1sDXTFPmj8y-y0rxhBmrc8QiNHfvWyi3yvy-9G0xndNInWFTMt01OhgyDygOT4kiVfT6CkXUilbn_XXaAtYIUnHEIpsBQQ3c/s1600/CM+102.jpg" style="margin-left: 1em; margin-right: 1em;"><img border="0" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEggBdOk7DdJhN8mWrehJXsfCGzh_8-T3JN81xnZGsJgjwz1sDXTFPmj8y-y0rxhBmrc8QiNHfvWyi3yvy-9G0xndNInWFTMt01OhgyDygOT4kiVfT6CkXUilbn_XXaAtYIUnHEIpsBQQ3c/s640/CM+102.jpg" height="640" width="424" /></a></div>
<br />
The
WSJ article quoted a political intelligence industry insider who said
the new law will mean that some information providers "will simply quit
doing it as the compliance creates burdens and costs." Huh? They will
quit because they don't want to be outed and their information will
likely become worthless or people will risk Martha Stewart's mildly
adverse fate. That's probably not that big a risk, given the SEC's usual
inability to police the markets, <a href="http://online.wsj.com/article/SB10001424052748704243904575630693960704872.html">hedge funds</a>
and Bernie Madoff, but that's a different topic. Nonetheless getting
caught by the SEC is a probably enough of a deterrent to cause the
inside information to lose significant value to political intelligence
operatives and their stalwart customers. <br />
<br />
<div style="text-align: center;">
<b>Fair and balanced</b></div>
All
that one can reasonably and fairly say about the people in congress,
their staff and the fine "entrepreneurs" involved in the political
intelligence industry is that they are sleazy cheats. Like <a href="http://www.youtube.com/watch?v=4r7wHMg5Yjg">Honey Badger</a>,
they just don't care. They are not criminals because what they do is
legal. What Martha Stewart did and went to jail for, they do with
impunity. This sleaze or variations of it has been going on in federal,
state and local governments <a href="http://insidertrading.procon.org/view.resource.php?resourceID=002391">for decades</a>, <a href="http://www.referenceforbusiness.com/encyclopedia/Clo-Con/Conflict-of-Interest.html">if not centuries</a>.<br />
<br />
<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjv6sabxMQfItHy8wNsRE5Pl6RubOjl07EffeCkTljyfIITrYFqvUWLC8meSN81C32vDF8CxdsgcoZ0SI0EmCVE6eqlhtUElmM8PjZGPRfd_KSXIvEMZxZipcYl1zQzQmcNkB4dxwzthDk/s1600/CM+103.jpg" style="margin-left: 1em; margin-right: 1em;"><img border="0" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjv6sabxMQfItHy8wNsRE5Pl6RubOjl07EffeCkTljyfIITrYFqvUWLC8meSN81C32vDF8CxdsgcoZ0SI0EmCVE6eqlhtUElmM8PjZGPRfd_KSXIvEMZxZipcYl1zQzQmcNkB4dxwzthDk/s400/CM+103.jpg" height="400" width="271" /></a></div>
<br />
<br />
Even Newt's failed fantasy called the 1994 <a href="http://en.wikipedia.org/wiki/Contract_with_America#Government_and_Operational_Reforms">Contract With America</a>
had a provision that laws applicable to us would also apply to people
in congress. We all know how far that got. If insider trading like this
was even marginally good for the country, then why doesn't congress just
tell the public that and do nothing? On the other hand, if it was bad
all along, then why didn't congress fix this in 1994 or decades or
centuries ago? Either way, congress is far beyond being just ethically
challenged. The institution is inherently corrupt. The people outside
government who make money from this cheating scheme could not care less
about the sleaze or the people they rip off so long as they (i) remain
anonymous (look good via plausible deniability), (ii) make money and
(iii) pay taxes, if any, at the 15% capital gains rate. Is that a sweet
deal or what? <br />
<br />
Now, how can a political story get any better than that? It is easy to see why congress' approval rating is 10%. They earned it.<br />
<b> </b> Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-2091953795007300064.post-36871503038456339222013-12-29T16:48:00.000-08:002013-12-29T16:48:24.684-08:00Governing only by finding common ground is irrational and disserves the public interest<h2 data-mce-style="text-align: center;" style="text-align: center;">
<span data-mce-style="color: #800000;" style="color: maroon;">Reform Party of California Commentary</span></h2>
Sometime
in 2006-2010 the Republican party apparently decided that for congress
at least, compromise was no longer an acceptable way to arrive at
legislation or to govern. With the relatively complete ideological
polarization and separation of the two parties, the concept of
compromise was seen as <a data-mce-href="http://billmoyers.com/segment/jonathan-haidt-explains-our-contentious-culture/" href="http://billmoyers.com/segment/jonathan-haidt-explains-our-contentious-culture/">capitulation with evil</a>
(the comments on good and evil are at 7:00-8:30 of the 47-minute taped
segment). Because of that, compromise was not an acceptable way to
govern. House Speaker John Boehner (R-OH) made that very clear in a
December 2010 <a data-mce-href="http://www.cbsnews.com/news/meet-the-next-house-speaker-rep-john-boehner/" href="http://www.cbsnews.com/news/meet-the-next-house-speaker-rep-john-boehner/">interview on 60 Minutes</a> (his comments on compromise are at 8:16-8:50 of the 14-minute taped segment; <a data-mce-href="http://www.mediate-la.com/2010/12/common-ground-not-compromise.html" href="http://www.mediate-la.com/2010/12/common-ground-not-compromise.html">a transcript of Boehner's comments is here</a>).<br />
<br />
It
is now common for republicans and the press to describe legislation as
resulting from finding common ground, but not from compromise. <a data-mce-href="http://www.latimes.com/nation/politics/politicsnow/la-pn-bipartisan-budget-deal-common-ground-analysis-20131210,0,6737577.story#axzz2omkUi5CO" href="http://www.latimes.com/nation/politics/politicsnow/la-pn-bipartisan-budget-deal-common-ground-analysis-20131210,0,6737577.story#axzz2omkUi5CO">The recently passed budget bill</a>,
the first in several years, is an example of how politics is now being
conducted. The "common ground" that the new budget is partly (mostly?)
based on comes from <a data-mce-href="http://online.wsj.com/news/articles/SB10001424052702304866904579266681456807374" href="http://online.wsj.com/news/articles/SB10001424052702304866904579266681456807374">slowed military pension growth</a>,
which is apparently something that both sides were willing to accept as
the price for increased spending elsewhere in the legislation.<br />
<br />
The
new governing profile as presented to the American people by the two
parties and the press raises profound questions. This new way to govern
is irrational and it does not serve the public interest particularly
well. In the context of American history, compromise has always been a
key factor. Without it, congress' already feeble capacity to govern is
further weakened because, as Mr. Boehner put it "I made clear I am not
going to compromise on -- on my principles..." Since there many
principles out there, there are many things that cannot be compromised.<br />
<br />
Not
compromising on principles means not compromising on ideology and that
means rejecting out of hand policy compromise-based policy options that
just happen to be the best. The <a data-mce-href="http://www.newsandsentinel.com/page/content.detail/id/558926/U-S--Constitution--A-model-of-compromise.html?nav=5055" href="http://www.newsandsentinel.com/page/content.detail/id/558926/U-S--Constitution--A-model-of-compromise.html?nav=5055">Founding Fathers had to make many compromises</a> on various principles to create the U.S. constitution. The Constitution is sometimes referred to as "<a data-mce-href="http://americanhistory.about.com/od/usconstitution/tp/compromises-of-the-constitutional-convention.htm" href="http://americanhistory.about.com/od/usconstitution/tp/compromises-of-the-constitutional-convention.htm">a bundle of compromises</a>."
If there had been no compromise among the founding Fathers, there would
have been no Constitution and probably no single country as we now know
it. There likely would be two or more smaller countries that may or may
not include America's current land mass.<br />
<br />
From the Reform Party of
California's (RPCA) non-ideological, pragmatic point of view, what the
republicans have unilaterally declared and the democrats have accepted
is a new form of governance that elevates principle or ideology to a
sacred, inviolate status. Since democrats in congress generally refuse
to compromise on reductions in entitlement spending, their ideology on
at least this point is basically the same as the republican's stance. In
essence, the American congress has transitioned to a governance style
that takes compromise off the table as a tool and relies instead on the
much less flexible and nuanced exercise of "finding common ground".[1]
That change has occurred in the face of a U.S. history of compromise,
with compromise having been universally accepted and employed in
governance right from the start.[2]<br />
<br />
This transition represents
major changes, unfortunately they are all for the worse. It puts
ideology in politics on the same plane as ideology in religion. With
that mindset, it is pointless to argue for policy options that require
compromise, even if it is obvious that the best option for a given issue
requires compromise. That is irrational. It sacrifices and subordinates
service the public interest at the alter of service to sacred
ideology.[3]<br />
<br />
The arrogance of it all is impressive. Today's
towering self-righteous ideologues feel so highly about their ideology
that they shield it from the evil of compromise. By contrast, those
ancient fumblers and <a data-mce-href="http://www.urbandictionary.com/define.php?term=fuddy%20duddy" href="http://www.urbandictionary.com/define.php?term=fuddy%20duddy">fuddy duddys</a>,
the Founding Fathers, never took that step. Think about that.
Ideological differences between various Founding Fathers were just as
deep and sincere as today's differences but they compromised
nonetheless.<br />
<br />
Other questions about congress' new operating system
leap out and scream for answers. If this kind of governance does not
serve the public interest well, then what interests are being served? In
the RPCA's opinion, this new way serves the status quo first and
foremost, particularly including the two parties grip on power. <a data-mce-href="http://www.people-press.org/2011/07/26/public-wants-a-debt-ceiling-compromise-expects-a-deal-before-deadline/" href="http://www.people-press.org/2011/07/26/public-wants-a-debt-ceiling-compromise-expects-a-deal-before-deadline/">People in congress know full well</a> that <a data-mce-href="http://www.stanford.edu/~neilm/compromise.pdf" href="http://www.stanford.edu/%7Eneilm/compromise.pdf">most Americans want political compromise</a> if that is what it takes to <a data-mce-href="http://www.gallup.com/poll/158801/americans-urge-congress-president-avoid-fiscal-cliff.aspx" href="http://www.gallup.com/poll/158801/americans-urge-congress-president-avoid-fiscal-cliff.aspx">get things done</a>.
Again, there is more than just a hint of arrogance here. What the
American people appear to want is secondary to what ideologues in
congress demand. This is just another example of how and why <a data-mce-href="http://reformpartyca.org/ideology-is-bad/" href="http://reformpartyca.org/ideology-is-bad/">ideology in politics is undesirable</a> and generally ineffective, which is <a data-mce-href="http://reformpartyca.org/reform-party-of-california-essays-1-understanding-the-party-and-its-members/" href="http://reformpartyca.org/reform-party-of-california-essays-1-understanding-the-party-and-its-members/">a point the RPCA continually makes</a> and will continue to raise.<br />
<br />
The
only way to inflict meaningful change on an intransigent and arrogant
two-party system is to simply walk away from it and work within a new
political framework that offers meaningful, common sense options focused
on service to the public interest. The non-ideological pragmatism the
RPCA offers is an example of that kind of politics. Without that kind of
a shift away from the status quo, we will continue to get weak,
constrained governance from common ground instead of creatively and
flexibly using all tools at our disposal.[4] Put another way how do you
want your politics served, your way or theirs?<br />
<br />
Footnotes:<br />
1. The distinction
between finding common ground and compromising is arguably unclear.
Common ground can be described as a foundation of common interest or
comprehension, as in a social relationship or a discussion. A compromise
can be defined as a settlement of differences in which each side makes
concessions. Although the recent budget deal is characterized in the
press as resulting from finding common ground, it looks an awful lot
like there was more compromising that common ground finding.
Specifically, democrats compromised on their larger goal of increasing
spending to protect the narrower priority of protecting entitlement
spending, while (ii) republicans compromised on their larger goal of
reducing spending to protect their sacred no new taxes ideology. Those
compromises are why some on both sides complained about the budget deal.
Regardless of the mix of factors involved, the budget bill arguably is
weak because it is largely grounded in a mind set that rejects
compromise. In other words, we got second or third best, not the best
that could be attained from a mind set more open to all governance
tools, including compromise.<br />
2. Edmund Burke said this in 1775:
"All government, indeed every human benefit and enjoyment, every virtue,
and every prudent act, is founded on compromise." There are <a data-mce-href="http://www.npr.org/2011/07/19/138468870/what-the-word-compromise-really-means" href="http://www.npr.org/2011/07/19/138468870/what-the-word-compromise-really-means">at least two viewpoints</a>
from which compromise can be viewed, forward to what compromise will
create and backward to what was conceded to get it. Despite that, the
RPCA is not aware of an earlier widespread rejection of compromise as a
valuable tool in intelligent governance.<br />
3. Sacrifice in service
to ideology might not be so bad if (i) the ideology happened to coincide
with service to the public interest, which it sometimes does but
usually does not and/or (ii) ideology did not have such a <a data-mce-href="http://reformpartyca.org/two-party-politics-and-recent-history-2/" href="http://reformpartyca.org/two-party-politics-and-recent-history-2/">poor track record of performance</a>.
We have had decades of ideology-dominated politics and that has not
yielded impressive results, to say the least. If ideology had been so
great then why are we in the messes we are in?<br />
4. The budget deal
is an example of the weakness and constraint that finding common ground
imposes. Since neither side was willing to compromise on their key
ideological positions (entitlements for democrats and taxes for
republicans), the budget bill puts us in a holding pattern. It does
essentially nothing to get at the long-term fiscal problems we now face.
That is another example of the two-party system's failure to
efficiently govern in service to the public interest.Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-2091953795007300064.post-1469270550236248272013-11-28T07:07:00.002-08:002013-11-28T07:07:30.867-08:00Nuclear option senate rule change<h2 data-mce-style="text-align: center;" style="text-align: center;">
<span data-mce-style="color: #800000;" style="color: maroon;">Reform Party of California Commentary</span></h2>
On
November 21, 2013, democrats in the U.S. senate voted 52-48 to prevent
filibusters of most presidential federal court and other presidential
nominees. The rule change does not apply to supreme court nominees. The
prior rule had been in effect for over 200 years and was a means the
senate used to prevent the majority party from simply ignoring the
minority party, as the House of Representatives routinely does.<br />
<br />
Senate majority leader <a data-mce-href="http://www.npr.org/blogs/thetwo-way/2013/11/21/246539731/will-senate-democrats-deploy-the-nuclear-option" href="http://www.npr.org/blogs/thetwo-way/2013/11/21/246539731/will-senate-democrats-deploy-the-nuclear-option">Harry Reid (D-NV) said</a>
the rule change was to eliminate the routine republican practice of
"deny and obstruct" of judicial and executive branch nominees and return
constitutional "advise and consent" to its proper place. The rule
change is referred to as the "nuclear option" because it will fully
poison the already hostile relations between senate democrats and
republicans. The projected upshot is that nothing will get done because
enraged republicans will, from now on, simply block everything they
possibly can as retaliation for the loss of their power to block
presidential nominees. Senate bipartisanship, which is nearly
nonexistent will <a data-mce-href="http://www.eenews.net/stories/1059990899" href="http://www.eenews.net/stories/1059990899">likely become fully extinct</a>.<br />
<br />
Although
the republican leadership urged its members to not talk about
retaliation, it is obvious that retaliation against democrats is exactly
what is in store. Senator John McCain (R-AZ) stated that <a data-mce-href="http://talkingpointsmemo.com/livewire/john-mccain-senate-filibuster-nuclear-option" href="http://talkingpointsmemo.com/livewire/john-mccain-senate-filibuster-nuclear-option">Democrats would "pay</a>
a heavy, heavy price" for changing the Senate rules for judicial and
executive nominees. Senator Richard C. Shelby (R-AL) said: “This is a
mistake — a big one for the long run. Maybe not for the short run.
Short-term gains, but I think it changes the Senate tremendously in a
bad way.”<br />
<br />
In the recent past, republicans tried to institute this
same rule change, arguing that senate democrats were obstructing
republican presidential nominees. In 2005, republican <a data-mce-href="http://www.forbes.com/sites/rickungar/2013/11/21/gop-gambles-big-on-harry-reids-nuclear-option-why-not-just-explode-the-filibuster-for-good/2/" href="http://www.forbes.com/sites/rickungar/2013/11/21/gop-gambles-big-on-harry-reids-nuclear-option-why-not-just-explode-the-filibuster-for-good/2/">Senator Mitch McConnell (R-KY) had this to say</a>
in support of the nuclear option and the practice of democratic
blocking of republican nominees “It’s time to move away from … advise
and obstruct and get back to advise and consent.”<br />
<br />
<div data-mce-style="text-align: center;" style="text-align: center;">
<strong>What planet are we on here?</strong></div>
What goes around, comes around. Good grief, what is this two-party nonsense?<br />
When
the minority party in the senate blocks (filibusters) nominees of a
president in the opposite party, the majority party tends to want to
impose the new rule to eliminate the 60 vote super majority needed to
override the filibuster. At the same time the minority party tends to
oppose it. The party opposing it always calls this rule change bad.
Outside observers generally agree that the senate's capacity to
legislate will drop from feeble to essentially nonexistent. One bit of
fallout is that the second round of <a data-mce-href="http://www.huffingtonpost.com/2013/11/20/sequester-fix_n_4313601.html" href="http://www.huffingtonpost.com/2013/11/20/sequester-fix_n_4313601.html">the universally despised sequester</a> is presumably more likely to take effect in January of 2104, although it probably was going into effect anyway.[1]<br />
<br />
From
the Reform Party of California's (RPCA) point of view, it is easy to
see what the fuss is about. However, there is absolutely no possible
justification for any adverse consequence to the public interest or to
governing. When republicans retaliate, they aim their poison at the
democrats. The question is how does that help the public interest? Are
the republicans saying that the people who voted democrats into power
deserve punishment? If so, how does one punish that group without
hurting the entire public interest, including republicans? The whole
uproar makes no sense at all. None.<br />
<br />
As far as the RPCA can tell,
there is nothing wrong with the rule change, particularly in light of
the fact that (i) republicans had been blocking essentially all
presidential nominees (that impairs governance) and (ii) the arguments
used by each side to support or oppose the rule change flipped depending
on who was in power and who was trying to block whom. Simple logic says
that neither side has any compelling reason to oppose or support the
new rule. Given that, the RPCA is comfortable with the new rule and
justifies that by arguing that (i) the new rule simply reflects the
consequences of who wins and loses elections, i.e., its just the will of
the people, and (ii) neither party will do anything differently when
they are in power in the senate than they otherwise would have with the
rule in place, i.e., are the republicans really going to consent to bad
or unqualified nominees when their turn at "revenge" comes? It sounds
like kids fighting on the playground over not much of anything.<br />
<br />
If
anyone would argue differently, they need to first think very, very
carefully about what they are saying and what it means.[2]<br />
<br />
What
this sorry mess shows is the profound, blinding hold that the two-party
system and its bitter, constipated thinking has on its partisans and
politicians.[3] Both sides honestly believe what they argue today, while
completely ignoring the fact that they argued the opposite side's
points when the shoe was on the other foot. The whole thing is sheer
nonsense.[4] No wonder many or most Americans no longer trust the
two-party system. There is no solid basis for trust.<br />
<br />
Footnotes:<br />
1.
Democrats and republicans in congress universally despise the sequester
as inefficient and stupid. Although that is true, the sequester is
probably the only way to to begin to address spending given the profound
hatred the two parties hold for each other. Even before the new rule
went into effect, there was no basis to expect that the two sides in the
senate could intelligently legislate any longer. The new rule may put
another nail in that coffin, but the lid already was pretty much pounded
into place. It is therefore not clear how much worse the new rule makes
things.<br />
2. The best argument to leave the old rule in place is
that without it, the president in power and his party controlling the
senate will nominate and approve nominees that are even more
ideologically extreme than the ideologues that dominate now. Most or all
democratic and republican ideologues strive for ideological purity in
themselves and view for reality. However, if that is a bad thing, why?
This is why: <a data-mce-href="http://reformpartyca.org/ideology-is-bad/" href="http://reformpartyca.org/ideology-is-bad/">Ideology doesn't solve problems</a>,
it obscures facts and issues and distorts thinking. That might serve
ideology but its effect on problem solving is a crap shoot. Pragmatic
non-ideological problem solving solves problems. That potential problem
is counterbalanced by the actual problem of too many nominees being held
up for political reasons. The <a data-mce-href="http://www.senate.gov/artandhistory/history/common/briefing/Nominations.htm" href="http://www.senate.gov/artandhistory/history/common/briefing/Nominations.htm">U.S. senate itself </a>characterizes
the advice and consent requirement as largely political in practice:
President George Washington "had asserted that he would consider
political loyalty as a factor in selecting key officeholders, but he
vowed that subordinate posts would be filled only on merit." In other
words, nominating federal judges and office holders always was and still
is is based as much or on more on party or ideological loyalty than
merit. In RPCA opinion that is unacceptable. It doesn't have to be that
way. However, basing nominees on merit instead of politics requires
political action to be public interest focused instead of focused on
self-interest, i.e., political. That will not happen in our
self-centered two-party political system because loyalty and ideology
trump everything else.<br />
3. This situation is just like the old
General Motors vs. labor union fights of the 1960s and 1970s. Both side
were so intent on strangling each other to death that they failed to see
what they were doing to the business as a whole. It all ended a few
decades later with bankruptcy and a public bailout. Management and the
unions blindly went right over the cliff with their hands wrapped around
each others' throat. The situation for congressional democrats and
republicans today is basically the same.<br />
4. Republicans complain
that the new rule will cause the senate to be a worse institution and/or
less-fettered majority rule will be a bad thing. If that happens, the
RPCA and reasonable people would assume that once republicans gain
control of the senate, they would correct the error and restore the
prior rule by a simple majority vote. If they didn't do that, then whose
interests would the republicans be serving: The public interest or
their own emotional needs? Based on the rhetoric, it sounds like the
republicans want revenge but that doesn't sound anything like service to
the public interest. Once again, the two-party system displays one of
its fundamental traits - <a data-mce-href="http://reformpartyca.org/reform-party-of-california-essays-3/" href="http://reformpartyca.org/reform-party-of-california-essays-3/">self-service before service to the pubic interest</a>.Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-2091953795007300064.post-54433083095657450932013-10-23T09:56:00.002-07:002013-10-23T09:56:20.202-07:00Pork spending & unintended consequences<div style="text-align: center;">
<b>Reform Party of California Commentary</b></div>
<div style="text-align: center;">
<b>Pork barrel spending: Is the cure worse than the disease?</b></div>
<br />
<br />
After
years of complaints, congress reluctantly curtailed the practice of
earmark spending. That policy shift occurred a few years ago. The
practice, sometimes referred to as pork barrel spending, had been
criticized for years as wasteful. However, as with most things in
politics, the story was not as simple as just eliminating wasteful
spending. It now appears that there probably have been unforeseen
consequences from reducing earmark spending. One apparent consequence is
the disintegration of the power of majority leadership in the House of
Representatives. On its face, that assertion would seem to be nonsense
because there is no obvious connection between earmarks and House caucus
cohesion. Nonetheless, a good argument can now be made that earmark
spending was part of the glue that held a majority caucus together.
There probably is a strong connection between earmarks and cohesion.<br />
<br />
Specifically, when House majority and committee chairpersons cannot earmark spending in legislation they have less leverage over rank and file members. Those leaders cannot insert spending that is targeted to restive legislators' voting districts as the quid pro quo for supporting legislation they might not otherwise support. In short, pork was the reward for cohesion. The pork gave legislators something to use in their reelection campaigns, which is the overriding priority for any incumbent. Elimination of most earmark spending stripped away the powerful self-interested incentive that used to hold dissidents in line.[1]<br />
<br />
The issue of political self-interest influencing politics is something the Reform Party of California (RPCA) repeatedly raises.[2]<br />
<br />
Once earmarks are understood in context, good arguments can be made that responsible earmark spending is a very useful tool in efficient governance. A <u>potential</u> example of "good pork" is the recent law that reopened government and raised the debt ceiling. That law contained a $2.8 billion earmark for a dam in Kentucky and a smaller earmark for the widow of a former democratic U.S. senator.[3] Conservatives jumped on the dam earmark, calling it the "Kentucky Kickback". The rationale for and defense of inserting the earmark was that it was needed to avoid waste of $160 million tax dollars that would occur if the earmark was not present. Assuming, the $2.8 billion project actually best serves the public interest, there should be nothing wrong with it and no complaints. However, if the project was simple payback for Mitch McConnell's support in the senate for avoiding a debt ceiling debacle (the RPCA's suspicion), then the $2.8 billion is arguably waste to some degree or another. Whether the $160 million is worth saving at that or any price is a separate question. It may be that the $160 million should never have been committed in the first place, or, maybe it was sound and unobjectionable all along.<br />
<br />
In the weeks leading up to the deal to reopen the government and raise the debt ceiling, House Speaker John Boeher tried but failed to get his caucus to support legislation to avoid both the shutdown and breach of the debt ceiling. He failed because Tea Party members, refused to compromise. Would things have played out the same way if House leaders had been in a position to give out pork in exchange for votes? That is hard to know. But if pork was available and successfully used to get enough republican caucus support to change the course of events, that outcome could have been less costly than the real outcome. The situation raises an obvious question. Is it better to have the waste associated with pork or the waste associated with the new gridlock and conflict norm? Specifically, which is the least wasteful - a world with pork or one without it? <br />
<br />
Economists are now calculating the cost of debt and budget gridlock dramas of the last couple of years. The U.S. GDP has taken a hit, maybe 0.6% for the 4th quarter (0.15% decrease for the year), and there are real costs associated with the new normal of uncertainty, gridlock and brinksmanship.[4] If you accept the notion that part of the new normal arises from the loss of earmark spending, then logically that has contributed to at least some of the damage and waste that political conflict has inflicted in the last year or two.<br />
<br />
Of course, the problem in all of this is how to calculate the costs and benefits in a with pork world compared to the relatively pork-free world we now reside in. Maybe the cure is worse than the disease. It was never the case that all earmark spending was pure waste. The problems arose when people in congress acted like spoiled brats and tried to build fun things like former Alaska senator Ted Steven's bridge to nowhere.[5] That is the problem with earmarks - it feeds political self-interest and the innate urge to abuse it is very powerful. On the other hand, if the absence of earmarks facilitates gridlock and waste[6], we just might have one situation that is better than the other.<br />
<br />
The problem with the two-party political system is that it is not capable of honestly assessing the situation. Conservatives will rail at earmarks, even if it turns out to be less wasteful to have it than doing business without them. Congressional leaders would likely welcome earmarks back because it makes their jobs easier. The analysis should be objective, rational and focused on the public interest, but two-party politics isn't objective, rational or focused on the public interest. Two-party politics is, for the most part, subjective, irrational and focused on self-interest. This is why, to a significant extent, status quo politics so broken.<br />
<br />
Footnotes:<br />
1. This is an excellent example of the power of self-interest in politics. Self-interest is an innate part of human nature. As such, criticizing it may not make a lot of sense. Politicians, many of whom have massive egos, simply are not going to just "rise above" the powerful self-interest instinct. Regardless of how strenuously politicians deny its relevance to themselves personally, it is probably more intelligent to simply acknowledge the fact that self-interest is a powerful driver of behavior for most or all politicians. If you have that mind set, one can readily see that the power of self-interest can be manipulated in service to the public interest, in theory at least. The trick, of course, is figuring out how to align incentives so that they reward service to the public interest as much as, or preferably more than, service to personal political career (re-election). Because of its complexity, that is a topic for another time.<br />
<br />
A final point. A good recent example of a self-serving vote was that of Barack Obama against raising the debt ceiling in 2006 when he was in the U.S. Senate. Now, as president the president characterizes that vote as political. In his own words: “That was just an example of a new senator making what is a political
vote as opposed to doing what was important for the country. And I'm the
first one to acknowledge it,” (http://politicalticker.blogs.cnn.com/2013/10/10/obama-defends-2006-vote-against-raising-the-debt-ceiling/). When the president calls his vote "political", but one can reasonably argue that is another way to say it was a self-interested vote. This sort of thing happens all the time in politics and that has to be acknowledged before the issue can even begin to be addressed. <br />
<br />
2. Link: (http://reformparty.org/reform-party-of-california-essays-self-interest-vs-public-interest/).
<br />
3. Link: http://www.nationalreview.com/corner/361462/shutdown-deal-includes-pork-barrel-spending-eliana-johnson.<br />
4. Links: http://www.nytimes.com/2013/10/17/business/economy/high-cost-to-the-economy-from-the-fiscal-impasse.html?_r=0; http://economictimes.indiatimes.com/news/international-business/shutdown-cost-120000-us-jobs-white-house/articleshow/24609063.cms; http://mtstandard.com/news/opinion/shutdown-rattles-economy-sends-wave-of-uncertainty-lack-of-confidence/article_6f594a32-3b9a-11e3-a52f-001a4bcf887a.html. <br />
5. Link: http://en.wikipedia.org/wiki/Gravina_Island_Bridge.<br />
6. Pork alone isn't the whole story. Other forces are at work, most notably gerrymandered house voting districts. The RPCA has raised the ill effects of that ugly beast before (http://reformparty.org/reform-party-of-california-commentary-how-legitimate-is-the-government-shutdown-over-the-aca/).Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-2091953795007300064.post-58139900101418428172013-10-19T13:00:00.000-07:002013-10-24T08:00:04.478-07:00Letter to CA congressional delegation<div style="text-align: center;">
<span style="font-size: large;"><b>DRAFT 3</b></span></div>
<br />
<br />
October 25, 2013 <br />
<br />
The Honorable Dianne Feinstein (Barbara Boxer) Mr. Mark Kravis<br />
United States Senate Treasurer, Reform Party of California<br />
Washington, DC 20510 14704 Caminito Vista Estrellado<br />
Del Mar, California 92014<br />
<br />
<br />
Re: Request for Support for Spending Priority Changes<br />
<br />
<br />
Dear Senator Feinstein (Boxer):<br />
<br />
I write to you as a California small business owner and on behalf of the Reform Party of California ("RPCA") and all California citizens and businesses. This letter raises a matter that is very important for California's economy, its citizens and its businesses. Information that the RPCA has obtained indicates that, in relation to other states, California contributes more tax dollars to federal spending outside of its home state than any other state. Analysis of tax data published by the Tax Foundation, a nonpartisan tax analysis organization, show
that for every federal tax dollar that California sent to
Washington in 2005, the state received back about $0.78 in federal spending.[1] The RPCA estimates that if California had received $1.00 back in
federal spending in the state for each $1.00 sent to Washington in 2005, the
state would have received an additional $43 billion in spending back from the federal government. That data indicated that California ranked 43 in terms of getting back
what it paid in federal taxes.<br />
<br />
Unfortunately there is no way to compare, dollar
for dollar, how much a state gets from the federal government and how
much the state pays in federal taxes for most tax years. The 2005 analysis mentioned above appears to be based on the most recent detailed tax data that exists. This is the best data available to date. Estimating the situation for other years is
the best that can be done. The RPCA has looked into the situation for 2010, the most recent year with sufficient data that we are aware of for a similar analysis and estimate. <br />
<br />
IRS data for 2010 shows that gross payment to
the IRS from California residents and businesses was $273.3 billion
($292.6 billion in 2012).[2] That was significantly more than
payments from any other state. This is not surprising because California has the largest gross state product of any state, about $1.9 trillion in 2010 or about 13% of the U.S. GDP. The 2010 tax data, which is incomplete, indicates that California
residents received from federal programs about $4,459 per person.[3] Based on a 2010 population of about 37.3 million[4], California received about $166.3 billion from the
federal government in 2010. To account for an incomplete 2010 data set, one can assume that payments back to California in 2010
were 25% higher than $166.3 billion. In that case,
California received $207.9 billion of the $273.3 billion that was paid in
2010. Obviously, if the 25% correction factor for incomplete data is in
error, then the amount California received in 2010 would be
adjusted up or down accordingly.<br />
<br />
Assuming the 2010 estimate is
accurate, California received from the federal government 76% of
the proceeds it sent to Washington that year. That estimate is similar to the 78%
return rate that the complete data set for 2005 showed. If the 2010
estimate is accurate, California subsidized spending outside the state by about $65.4 billion. The RPCA is unaware of more accurate or more
recent data. As you know, many other states receive more in per capita federal spending than they contribute.[5] As far as the RPCA knows, there is no constitutional or legal requirement for California to be a perpetual donor state, so the situation is open to reassessment at any time without any constraint.<br />
<br />
California has the
largest, most dynamic and productive economy of any state. It also has the largest population. As you are no doubt aware, the state's infrastructure is in a state of serious disrepair and there are other pressing critical needs for maintaining California's dominant economic position. Urgent current spending needs to simply restore California's position could reach $1 trillion.[6] Based on assessment of our current situation, the RPCA believes that federal spending priorities need to be reoriented to attain at least a parity situation where California receives one dollar in federal spending in the state for each tax dollar it sends to Washington.<br />
<br />
The RPCA cannot stress enough that California's contributions are critically important to the overall U.S. economy and the U.S. population as a
whole. California is a major generator of new technology and
innovation. That is the single most important means available to generate wealth and to defend
our standard of living. California's economy is the 9th largest in the world, but its state business tax climate ranks about 48th from the top.[7] That disconnect, a hostile business tax environment coupled with staggering economic output, can only hint at the restrained dynamism of California's economic engine. Any drag on the capacity of California's economy to perform at maximal efficiency hurts overall U.S. GDP growth and that in turn, adds to federal fiscal stress. World-class infrastructure for California, including its education system, is critical to maintaining maximal economic efficiency. <br />
<br />
Obviously, attaining tax parity would significantly improve California's business climate because revenues that businesses generate would result in tangible infrastructure improvements that should increase their competitiveness against global competitors. Many of those competitors do not play on a level field against our companies, so anything that the federal government can reasonably do to help is critical to the economic well-being of the entire U.S. Clearly, the U.S. has a vested interest in insuring that California's
infrastructure, education system and general operations is world-class
and fully funded. The question that must be asked is whether it makes economic or national security sense to continue to starve the single biggest economic engine in the
U.S. economy in return for benefits that cannot be readily quantified.<br />
<br />
Under current circumstances, California's generosity simply does not make economic
sense. It is arguably unsustainable and damaging to the U.S. economy as a whole. Some information
suggests that California has been a major subsidy donor for many years[5], and one can argue that is at least part of the reason for its infrastructure deterioration. California's once world-class infrastructure has been neglected for quite some time and it continues to degrade.[6]
Under the circumstances, the RPCA believes that it is in the best
interest of California and the U.S. to bring federal spending
in California in line with what California sends to Washington. In
short, the RPCA is asking for your support on the public record for spending priorities that return to California every
tax dollar it sends to Washington. Reorientation of spending existing revenue streams will not increase the federal debt. Implementing this proposal therefore cannot be significantly objectionable on debt-related grounds.<br />
<br />
Because of the complexity of
budgeting and ongoing programs, the RPCA understands and is sensitive to
the fact that attaining revenue and spending parity cannot be
accomplished overnight. Federal budgets are complicated and shifting
spending priorities need to be made with care. Nonetheless, current
spending priorities endanger America's economic growth and its
competitiveness. In turn, that endangers America's national security.
Given the urgency and seriousness of California's deteriorating status,
the RPCA believes that a shift to parity within 3-4 years is fair and reasonable. That is
sufficient time to minimize undue disruption to current spending programs, while
providing a real prospect of meaningful relief to California in a
reasonable period of time.<br />
<br />
Although recipient states initially may
resist this change in spending priorities, the RPCA is confident that
on reflection, all members of congress will agree that it is in the public's interest to
support this reorientation effort. The general attitude in many
states is fully in accord with the concept of self-reliance
and limited government. For affected states, reduced reliance on California revenues would obviously be more than welcome because reorientation will clearly reduce their dependence on federal
spending while increasing self-reliance. Those are the main political goals for a number states that now receive more in federal spending than they contribute. It is hard to
imagine any degree of reasoned opposition from such states once these fundamental
bedrock principles are made clear.<br />
<br />
When California does well, the rest of America will also prosper. Moving toward tax and spending parity for California is
clearly a win-win opportunity for all American stakeholders and the
world at large. In turn, that efficiently serves the public interest. <br />
<br />
The RPCA is asking for support for this critically important effort from all of California's senators and representatives, President Obama and key leaders in both houses of congress. The RPCA is formally asking all members of California's congressional delegation to initiate a cooperative bipartisan effort to begin the
complex process of bringing California into a parity profile as soon as
that can reasonably be done. The RPCA has every confidence that once
this matter is brought to the attention of our members of congress, there
will be unanimous agreement that this must be a high priority for
California's elected representatives going forward. The RPCA is contacting Governor Brown, key
congressional and state legislative leaders and businesses, key California politicians and other groups to ask
them to go on the record to either express their support or to oppose this proposal. Based on increasing revenue inflow from reorientation, the RPCA will ask state leaders to reduce, when prudent, tax rates on California citizens and businesses.<br />
<br />
You are of course very busy and the situation in congress is complicated and difficult. Despite the difficulties, I sincerely hope that this request for your support of this effort is accompanied by information and unbiased reasoning sufficient to convince you that this is a an important issue for California's citizens and its powerful economic engine. The links provided below should allow your office to begin to independently assess the situation and draw its own conclusions, which the RPCA is confident will mirror our own.<br />
<br />
The proposed reorientation effort will require a sustained bipartisan effort, but the ultimate goal is more than worthwhile. I would very much appreciate hearing from you or your office in due course regarding your response to this request for your support and participation. Absent a response from you or your office, the RPCA can only (reluctantly) conclude that you feel that this effort is of insufficient importance for a sustained reorientation effort. <br />
<br />
Thank you for your consideration. I appreciate your hard work on behalf of all Californians.<br />
<br />
Sincerely,<br />
<br />
<br />
Mark Kravis<br />
Treasurer, Reform Party of California<br />
<br />
Footnotes<b></b>:<br />
1. Tax Foundation 2005 analysis: http://taxfoundation.org/article/federal-spending-received-dollar-taxes-paid-state-2005.<br />
2.
Internal Revenue Service gross collections (before refunds) by type of
tax and state are reported in the fiscal year IRS Data Book, Table 5 (<a data-mce-href="http://www.irs.gov/uac/SOI-Tax-Stats-Gross-Collections,-by-Type-of-Tax-and-State,-Fiscal-Year-IRS-Data-Book-Table-5" href="http://www.irs.gov/uac/SOI-Tax-Stats-Gross-Collections,-by-Type-of-Tax-and-State,-Fiscal-Year-IRS-Data-Book-Table-5">http://www.irs.gov/uac/SOI-Tax-Stats-Gross-Collections,-by-Type-of-Tax-and-State,-Fiscal-Year-IRS-Data-Book-Table-5</a>; <a data-mce-href="http://nationalpriorities.org/en/interactive-data/database/mashups/bod5cq0ad4ntvrkr/;)" href="http://nationalpriorities.org/en/interactive-data/database/mashups/bod5cq0ad4ntvrkr/;%29">http://nationalpriorities.org/en/interactive-data/database/mashups/bod5cq0ad4ntvrkr/</a>). Gross and net collections at the national level are reported in the IRS Data Book, Table 1. All IRS data tables are at: <a data-mce-href="http://www.irs.gov/uac/SOI-Tax-Stats-IRS-Data-Book" href="http://www.irs.gov/uac/SOI-Tax-Stats-IRS-Data-Book" target="_blank">http://www.irs.gov/uac/SOI-<wbr></wbr>Tax-Stats-IRS-Data-Book</a>.<br />
3. <a data-mce-href="http://nationalpriorities.org/en/interactive-data/database/mashups/ufz9e7raolmod39z/" href="http://nationalpriorities.org/en/interactive-data/database/mashups/ufz9e7raolmod39z/">http://nationalpriorities.org/en/interactive-data/database/mashups/ufz9e7raolmod39z/</a>.<br />
4. <a data-mce-href="http://usatoday30.usatoday.com/news/nation/census/profile/CA" href="http://usatoday30.usatoday.com/news/nation/census/profile/CA">http://usatoday30.usatoday.com/news/nation/census/profile/CA</a>.<br />
5. <a data-mce-href="http://en.wikipedia.org/wiki/Federal_taxation_and_spending_by_state" href="http://en.wikipedia.org/wiki/Federal_taxation_and_spending_by_state">http://en.wikipedia.org/wiki/Federal_taxation_and_spending_by_state</a>.<br />
6. <a data-mce-href="http://www.ocregister.com/articles/infrastructure-380794-california-public.html" href="http://www.ocregister.com/articles/infrastructure-380794-california-public.html">http://www.ocregister.com/articles/infrastructure-380794-california-public.html</a>; <a data-mce-href="http://www.caeconomy.org/reporting/entry/california-infrastructure-grades-are-in-needs-improvement" href="http://www.caeconomy.org/reporting/entry/california-infrastructure-grades-are-in-needs-improvement">http://www.caeconomy.org/reporting/entry/california-infrastructure-grades-are-in-needs-improvement</a>; <a data-mce-href="http://www.allgov.com/usa/ca/news/where-is-the-money-going/local-road-infrastructure-crumbling-in-the-age-of-austerity-130306?news=847273" href="http://www.allgov.com/usa/ca/news/where-is-the-money-going/local-road-infrastructure-crumbling-in-the-age-of-austerity-130306?news=847273">http://www.allgov.com/usa/ca/news/where-is-the-money-going/local-road-infrastructure-crumbling-in-the-age-of-austerity-130306?news=847273</a>.<br />
7. http://taxfoundation.org/article/2014-state-business-tax-climate-index. <br />
<br />
<br />
<br />
<br />
Representatives:<br />
<b>Letter Address</b>
<br />
<div style="padding-left: 30px;">
The Honorable Full Name</div>
<div style="padding-left: 30px;">
United States House of Representatives</div>
<div style="padding-left: 30px;">
Washington, DC 20515</div>
<div style="padding-left: 30px;">
or district office address</div>
<b>Salutation</b><br />
<div style="padding-left: 30px;">
Dear Mr. / Mrs. / Ms. Last Name:</div>
Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-2091953795007300064.post-10037994910243435732013-10-18T08:37:00.000-07:002013-10-18T08:37:54.263-07:00CA tax parity & misc info linksInformation available to the Reform Party of California (RPCA)
strongly suggests that California taxpayer interests are being poorly
protected at the federal level. Data published by reputable sources show
that for every federal tax dollar that California taxpayers sent to
Washington in 2005, they received about $0.78 in federal spending.<sup>1</sup>
The RPCA estimates that if California had received $1.00 back in
federal spending in the state for each $1.00 sent to Washington, the
state would have received an additional $43 billion in 2005.<br />
<br />
For
2005, the data shows that California ranked 43 in terms of getting back
what it paid in federal taxes. Returns for the four best-treated states
were, for New Mexico $2.03 received for each dollar sent to Washington,
$2.02 for Mississippi, $1.84 for Alaska and $1.78 for Louisiana. Those
states were followed by $1.76 for West Virginia, $1.68 for North Dakota,
$1.66 for Alabama, $1.53 for South Dakota, $1.51 for Kentucky and $1.51
for Virginia.<br />
<br />
Unfortunately there is no way to compare, dollar
for dollar, how much a state gets from the federal government vs. how
much its pays in federal taxes. Estimating the situation apparently is
the best that can be done. IRS data for 2010 shows that gross payment to
the IRS from California residents and businesses was $273.3 billion
($292.6 billion in 2012).<sup>2</sup> That was significantly more than
payments from any other state. Data from 2010 indicates that California
residents received from federal programs about $4,459 per person<sup>3</sup>. With a 2010 population of about 37.3 million<sup>4</sup>,
one can estimate that California received about $166.3 billion from the
federal government in 2010. To account for the incompleteness of the
2010 data set, one can assume that payments back to California in 2010
were 25% higher than the $166.3 billion estimate, in which case
California received back $207.9 billion of the $273.3 billion it paid in
2010. Obviously, if the correction factor for incomplete data is in
error, then the amount California received in 2010 would need to be
adjusted up or down accordingly.<br />
<br />
Assuming the 2010 estimate is
accurate, California received back from the federal government 76% of
the proceeds it sent to Washington. That estimate is similar to the 78%
return rate that the complete data set for 2005 showed. If the 2010
estimate is accurate, California subsidized spending in recipient states
by about $65.4 billion. The RPCA is unaware of more accurate or more
recent data than that discussed above.<br />
<br />
Although many or most
Californians may be pleased to subsidize other states like this, it
makes sense to reassess this level of generosity. California has the
largest economy and largest population of any state. It is therefore
very important to the overall U.S. economy and the U.S. population as a
whole. California is a major contributor to U.S. new technology and
innovation, which is an important means to generate wealth and to defend
our standard of living, which has been under attack for years. The
entire U.S. has a vested interest in insuring that California's
infrastructure, education system and general operations is world-class
and fully funded. The question has to be asked if it makes economic
sense to continue to starve the single biggest economic engine in the
U.S. economy in return for benefits that cannot be readily quantified.<br />
<br />
In
RPCA opinion, this kind of gracious generosity no longer makes economic
sense and is unsustainable. Maybe it never made sense. Some information
suggests that California has may been a major subsidy donor for years.<sup>5</sup> California's once world-class infrastructure is slowly degrading and it has been neglected for quite some time.<sup>6</sup>
Under the circumstances, the RPCA believes that it is in the best
interest of California and the U.S. as a whole to bring federal spending
in California in line with what California sends to Washington. In
short, the RPCA is calling for parity in returning to California every
tax dollar it sends to Washington.<br />
<br />
Because of the complexity of
budgeting and ongoing programs, the RPCA understands and is sensitive to
the fact that attaining revenue and spending parity cannot be
accomplished overnight. Federal budgets are complicated and shifting
spending priorities needs to be made with care. Nonetheless, current
spending priorities endanger America's economic growth and its
competitiveness. In turn, that endangers America's national security.
Given the urgency and seriousness of California's deteriorating status,
the RPCA is calling for a shift to parity within 3-4 years. That is
sufficient time to minimize damage to current spending programs, while
providing a real prospect of meaningful relief to California in a
reasonable period of time.<br />
<br />
Although recipient states initially may
resist this change in spending priorities, the RPCA is confident that
on reflection, they will agree that it is in the public's interest to
support this reorientation effort. The general attitude in many
recipient states is fully in accord with the concept of self-reliance
and limited government. For those states, this reorientation will no
doubt have great appeal because it lessens local dependence on federal
spending. That undeniably serves the public interest. It is hard to
imagine any degree of opposition from such states once the fundamental
bedrock principles are understood.<br />
<br />
In addition, this provides a
wonderful opportunity for other states who are so-inclined to step up
and assume a leadership position in terms of generously donating
assistance to states that are inclined to accept it. States that are now
recipients may wish to repay the past generosity of others with future
generosity of their own. When California does well, the rest of America
also prospers. Moving toward tax and spending parity for California is
clearly a win-win opportunity for all American stakeholders and the
world at large.<br />
<br />
To initiate the reorientation process, the RPCA
has sent letters to all of California's senators and representatives
asking them to begin a bipartisan, cooperative effort to begin the
complex process of bringing California into a parity profile as soon as
that can reasonably be done. The RPCA has every confidence that once
this matter is brought to the attention of our congress members, there
will be unanimous agreement that this will be a high priority for
California going forward. The RPCA is contacting governor Brown and key
state legislative leaders and other key politicians and groups to asking
them to support this effort by conveying their support for parity to
our congress members. A copy of the RPCA's letter is shown at footnote
7.<br />
<br />
The RPCA urges all Californians to support this important and
urgent project. Once parity is successfully in place, tens of billions
in additional tax revenues will flow into California each year. Among
other things, that will result in major improvements in California's
infrastructure and education system over time. The best way to support
this is to write to senators Feinstein and Boxer and the house member
in your voting district. Contact information for our members of congress
is at footnote 8. The RPCA further urges Californians to express their
support to governor Brown and state political leaders, with their
contact information shown at footnote 9.<br />
<br />
Footnotes:<br />
1. The quoted data is based on <a data-mce-href="http://taxfoundation.org/article/federal-spending-received-dollar-taxes-paid-state-2005" href="http://taxfoundation.org/article/federal-spending-received-dollar-taxes-paid-state-2005">a 2005 analysis</a> by the Tax Foundation. <a data-mce-href="http://taxfoundation.org/about-us" href="http://taxfoundation.org/about-us">The Tax Foundation</a>
was founded in 1937 and describes itself as "the nation’s leading
independent, non-partisan organization providing sound research and
analysis on federal and state tax policy." These numbers appear to be <a data-mce-href="http://www.washingtonpost.com/opinions/dana-milbank-the-confederacy-of-takers/2012/11/13/d8adc7ee-2dd4-11e2-beb2-4b4cf5087636_story.html" href="http://www.washingtonpost.com/opinions/dana-milbank-the-confederacy-of-takers/2012/11/13/d8adc7ee-2dd4-11e2-beb2-4b4cf5087636_story.html">fairly stable over time</a>.<br />
2.
Internal Revenue Service gross collections (before refunds) by type of
tax and state are reported in the fiscal year IRS Data Book, Table 5 (<a data-mce-href="http://www.irs.gov/uac/SOI-Tax-Stats-Gross-Collections,-by-Type-of-Tax-and-State,-Fiscal-Year-IRS-Data-Book-Table-5" href="http://www.irs.gov/uac/SOI-Tax-Stats-Gross-Collections,-by-Type-of-Tax-and-State,-Fiscal-Year-IRS-Data-Book-Table-5">http://www.irs.gov/uac/SOI-Tax-Stats-Gross-Collections,-by-Type-of-Tax-and-State,-Fiscal-Year-IRS-Data-Book-Table-5</a>; <a data-mce-href="http://nationalpriorities.org/en/interactive-data/database/mashups/bod5cq0ad4ntvrkr/;)" href="http://nationalpriorities.org/en/interactive-data/database/mashups/bod5cq0ad4ntvrkr/;%29">http://nationalpriorities.org/en/interactive-data/database/mashups/bod5cq0ad4ntvrkr/</a>). Gross and net collections at the national level are reported in the IRS Data Book, Table 1. All IRS data tables are at: <a data-mce-href="http://www.irs.gov/uac/SOI-Tax-Stats-IRS-Data-Book" href="http://www.irs.gov/uac/SOI-Tax-Stats-IRS-Data-Book" target="_blank">http://www.irs.gov/uac/SOI-<wbr></wbr>Tax-Stats-IRS-Data-Book</a>.<br />
3. <a data-mce-href="http://nationalpriorities.org/en/interactive-data/database/mashups/ufz9e7raolmod39z/" href="http://nationalpriorities.org/en/interactive-data/database/mashups/ufz9e7raolmod39z/">http://nationalpriorities.org/en/interactive-data/database/mashups/ufz9e7raolmod39z/</a>.<br />
4. <a data-mce-href="http://usatoday30.usatoday.com/news/nation/census/profile/CA" href="http://usatoday30.usatoday.com/news/nation/census/profile/CA">http://usatoday30.usatoday.com/news/nation/census/profile/CA</a>.<br />
5. <a data-mce-href="http://en.wikipedia.org/wiki/Federal_taxation_and_spending_by_state" href="http://en.wikipedia.org/wiki/Federal_taxation_and_spending_by_state">http://en.wikipedia.org/wiki/Federal_taxation_and_spending_by_state</a>.<br />
6. <a data-mce-href="http://www.ocregister.com/articles/infrastructure-380794-california-public.html" href="http://www.ocregister.com/articles/infrastructure-380794-california-public.html">http://www.ocregister.com/articles/infrastructure-380794-california-public.html</a>; <a data-mce-href="http://www.caeconomy.org/reporting/entry/california-infrastructure-grades-are-in-needs-improvement" href="http://www.caeconomy.org/reporting/entry/california-infrastructure-grades-are-in-needs-improvement">http://www.caeconomy.org/reporting/entry/california-infrastructure-grades-are-in-needs-improvement</a>; <a data-mce-href="http://www.allgov.com/usa/ca/news/where-is-the-money-going/local-road-infrastructure-crumbling-in-the-age-of-austerity-130306?news=847273" href="http://www.allgov.com/usa/ca/news/where-is-the-money-going/local-road-infrastructure-crumbling-in-the-age-of-austerity-130306?news=847273">http://www.allgov.com/usa/ca/news/where-is-the-money-going/local-road-infrastructure-crumbling-in-the-age-of-austerity-130306?news=847273</a>.<br />
7.<br />
8.<br />
9.<br />
<b><span data-mce-style="font-family: 'Times New Roman';" style="font-family: 'Times New Roman';">taxing and spending by states</span></b><br />
http://en.wikipedia.org/wiki/Federal_taxation_and_spending_by_state<br />
<b>National Priorities Project: </b>http://nationalpriorities.org/analysis/2013/federal-spending-your-state-2012-2014/;
http://nationalpriorities.org/en/about/contact/<br />
<br />
federal tax dollar spending in CA: http://www.cbp.org/pdfs/2011/111117_How_Are_Federal_Dollars_Spent_pb.pdf<br />
IRS tax data tables: http://www.irs.gov/uac/SOI-Tax-Stats---Historic-Table-2<br />
census bureau keeps tabs on fed spending per state<br />
<span data-mce-style="font-family: 'Times New Roman';" style="font-family: 'Times New Roman';">http://taxfoundation.org/blog/monday-map-federal-aid-state-budgets</span><br />
<span data-mce-style="font-family: 'Times New Roman';" style="font-family: 'Times New Roman';">http://taxfoundation.org/article/federal-spending-received-dollar-taxes-paid-state-2005</span><br />
<span data-mce-style="font-family: 'Times New Roman';" style="font-family: 'Times New Roman';">http://www.politifact.com/truth-o-meter/statements/2012/jan/26/blog-posting/red-state-socialism-graphic-says-gop-leaning-state/</span><br />
<span data-mce-style="font-family: 'Times New Roman';" style="font-family: 'Times New Roman';">http://www.bloomberg.com/news/2012-09-19/blame-fdr-and-lbj-for-moocher-paradox-in-red-states.html</span><br />
<span data-mce-style="font-family: 'Times New Roman';" style="font-family: 'Times New Roman';">http://www.ritholtz.com/blog/2012/02/is-your-state-a-net-giver-or-taker-of-federal-taxes/</span><br />
<span data-mce-style="font-family: 'Times New Roman';" style="font-family: 'Times New Roman';">http://www.motherjones.com/politics/2011/11/states-federal-taxes-spending-charts-maps</span><br />
<br />
<span data-mce-style="font-family: 'Times New Roman';" style="font-family: 'Times New Roman';">http://visualizingeconomics.com/blog/2010/02/17/federal-taxes-paidreceived-for-each-state</span><br />
<br />
<span data-mce-style="font-family: 'Times New Roman';" style="font-family: 'Times New Roman';">http://www.slate.com/blogs/the_reckoning/2012/10/25/blue_state_red_face_guess_who_benefits_more_from_your_taxes.html</span><br />
<b>defense facilities map: </b>http://www.google.com/imgres?imgurl=http://www.nrdc.org/energy/images/database_dod_facilities_graphic.png&imgrefurl=http://www.nrdc.org/energy/readgdb.asp&h=585&w=810&sz=287&tbnid=O0HEcnW9WlPR3M:&tbnh=90&tbnw=125&zoom=1&usg=__CNDJR7SAA_BC5sr5E5stvZT18Is=&docid=lzCK5uQ-6WIRiM&sa=X&ei=FN81UqznH6rSiwLQyYCoCg&ved=0CDUQ9QEwAQ&dur=2074Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-2091953795007300064.post-11474546328623344222013-10-12T14:31:00.000-07:002013-10-12T14:31:20.529-07:00nuclear accidents kept from Americans<div style="text-align: center;">
<b>Reform Party of California Commentary</b></div>
<div style="text-align: center;">
<b>The consequences of keeping Americans in the dark</b></div>
<br />
A point that the Reform Party of California (RPCA) occasionally mentions regarding normal two-party politics is its disturbing penchant to hide information from Americans. Hiding the truth was a factor in the start and conduct of the Vietnam War. It was a factor in the passage of major legislation, e.g., medicare. It may turn out to be a factor in the passage of the Affordable Care Act (Obamacare), but it is too early to know that yet. It may have been a factor in the 2012 presidential election regarding the Benghazi embassy fiasco in 2012. It arguably was a factor in getting public support for wars in Afghanistan and Iraq, especially Iraq. The list is long and depressing.<br />
<br />
<div style="text-align: center;">
<b>Almost nuked ourselves - lots of times </b></div>
And, now it turns out that secrecy hid the risk of building and maintaining America's nuclear arsenal, especially in the 1950s, 1960s and the early part of the 1970s. During that time, and probably still today, the federal government felt it was best to not bother the American public with information about just how close and how often we were to the accidental detonation of American nuclear warheads on American soil. It turns out that we have darn near nuked ourselves a few dozen times and the government had no intention of even mentioning any of it. Maybe they thought it was too trivial to merit a paltry press release. Or maybe, they did not trust the American public enough to be honest about the close calls and risk of a nuclear accident incinerating a U.S. city.<br />
<br />
Investigative reporter Eric Schlosser has just published results of a long investigation into nuclear accidents in his book "Command and Control: Nuclear Weapons, the Damascus Accident, and the Illusion of Safety" and what he describes is sobering to say the least.[1] If Schlosser's findings are basically true, sheer blind, dumb luck has kept us safe so far. To be fair, it appears that modern nuclear weapons are much safer than the earlier weapons. However, putting some faith in that assertion requires some trust in the federal government. Is such trust warranted?<br />
<br />
<div style="text-align: center;">
<b>Why the secrecy?</b></div>
The RPCA assumes that the federal government chooses to keep such critically important information secret from the public for two main reasons. The first is to protect national security secrets. The second is to hide risk and embarrassment from the public. Obviously, the government will strenuously deny that it would ever do the second, but that denial carries no weight. The federal government has had no compunction about calling everything from illegal activities to staggering incompetence and waste a "secret". It took 25 years of Freedom of Information Act requests just to force the FBI to reluctantly release John Lennon's secret files.[2] There were no national security threats there, but there was a great deal of embarrassment and wasted time and money. Unfortunately, the government uses secrecy to hide all kinds of failure and waste.<br />
<br />
<div style="text-align: center;">
<b>No basis for trust</b> </div>
Discouraging as it is, there is no reliable basis for the public to trust the government in matters like this. Sometimes claims of secrecy are valid. Sometimes they are not. If the two-party system had a better track record over recent history, having some sympathy for nonsense might be justified. Unfortunately, the track record is not good.[3] <br />
<br />
<div style="text-align: center;">
<b>What happens if we nuke ourselves?</b></div>
<br /><br />Since the 9/11 attacks, there has been a push to develop defenses against biological and radiological weapons. Radiological weapons included thermonuclear weapons, not just dirty bombs. In 2004, congress passed Bioshield legislation and appropriated $5 billion to develop defensive measures.[4] To date, the development of any measure for treatment of survivors of a nuclear blast has yielded nothing. The Bioshield and BARDA programs were intended to incentivize the private sector to development treatments, but implementation has been a dismal failure, with politics trumping serious private sector effort. The program for nuclear weapons mitigation has been in essence, converted into a long term government research program with the full knowledge and acquiescence of congress. What happens to survivors of a nuclear blast is simple: They crawl out of the high-radiation portion of the blast zone on their own. Official policy is to not send first responders in to rescue survivors unless they are in a low radiation area.[5]<br />
In short, what will happen after a nuclear blast in a U.S. city is that thousands or tens of thousands will die (slowly and miserably) of radiation sickness, assuming they survive the initial blast. Treatment for that kind of biological insult requires intensive care (intravenous lines, antibiotics, platelet and/or blood transfusions) and such medical facilities in any region of the U.S. can treat a few hundred survivors at the very most. That assumes they are not vaporized in the nuclear blast. Platelet supplies are good for only a few days, so intensive care will be impaired or limited to whole blood transfusions. The situation represents yet another dismal failure of the two-party system.[6] <br />
<br />
The irony is that all along, the chance of a nuclear blast from terrorists has appeared to be very low. An accidental launch by the Russians or Chinese appeared to be more likely, but still very low. Now, with the revelations from Schlosser's book, the real threat appears to be from the nuclear arsenal of the U.S. itself. Given the revelations from Schlosser, it is reasonable to think that the chance of a nuclear blast in a U.S. city is 100-fold to 1,000-fold more likely to come from our own nuclear arsenal than from any murdering terrorist or an accident by a nuclear power such as Russia. If the public had known all along the risk that Schlosser describes, the RPCA is confident that Bioshield, BARDA or earlier efforts, e.g., the Armed Forces Radiobiological Research Institute[7], would not have been so dismally moribund and would have been real, serious efforts. In that scenario at least one or more drugs with a meaningful impact on saving lives after a nuclear blast would very likely be available today.<br />
<br />
This situation is a direct consequence of what happened, or didn't happen, because the U.S. government did not trust its people to be able to handle truth. It is time for regime change in Washington. Both parties need to go. The Reform Party offers a real difference, if you do not know where to go.<br />
<br />
Footnotes:<br />
1. Links: <a href="http://www.npr.org/templates/story/story.php?storyId=230075256">http://www.npr.org/templates/story/story.php?storyId=230075256</a>; http://www.huffingtonpost.com/tavis-smiley/eric-schlosser_b_4081050.html; http://www.newyorker.com/arts/critics/books/2013/09/30/130930crbo_books_menand?currentPage=all.<br />
2. Link: http://www.independent.co.uk/news/world/americas/the-lennon-files-the-fbi-and-the-beatle-429429.html; https://www.aclu.org/national-security/after-25-years-fbi-finally-releases-last-10-documents-john-lennon-fbi-file.<br />
3. Link: http://reformparty.org/reform-party-of-california-essays-two-party-politics-and-recent-history/.<br />
4. Link: http://en.wikipedia.org/wiki/Project_Bioshield_Act; http://en.wikipedia.org/wiki/Biomedical_Advanced_Research_and_Development_Authority.<br />
5. Links: http://www.afrri.usuhs.mil/outreach/pdf/planning-guidance.pdf; http://hps.org/homeland/documents/Planning_Guidance_for_Response_to_a_Nuclear_Detonation-2nd_Edition_FINAL.pdf.<br />
6. Rest assured, the government will claim great progress and success, e.g., they deploy useless, overpriced iodine tablets and let people think that has any relevance to a nuclear attack. The federal posture here is simply impossible to square with the reality of a nuclear blast in a populated area. What the government is working on is (i) stockpiling medicines (e.g., filgrastim) that need to be used in intensive care facilities (which are not available to more than a few dozen people) and (ii) drugs that work only if they are administered <i>before</i> a nuclear blast. How any of that has any relevance is far beyond the RPCA's capacity to reconcile the hideous reality of a nuclear blast with the government's proposed nonsense solutions. The whole Bioshield/BARDA approach for nuclear blast mitigation has been smoke, mirrors, gas, vapor and a waste of tax dollars.<br />
7. Link: http://www.afrri.usuhs.mil/.Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-2091953795007300064.post-20476644588707587882013-10-11T10:58:00.000-07:002013-10-15T07:54:40.002-07:00Afghanistan and unpleasant diplomacy<div style="text-align: center;">
<b>Reform Party of California</b></div>
<div style="text-align: center;">
<b>Afghanistan, unpleasant diplomacy and an uncertain future</b></div>
<br />
It is good that there are at least some people with the self-control, talent and amazing patience to skilfully practice the black art of diplomacy. It is better to at least keep talking than to back away from the table and not talk. That is true even if it is obvious that talks are not going to accomplish anything in the short or medium term. Maybe in the long run something good, e.g., an unnecessary war avoided, will come of it. However, there are times when the people that diplomats have to deal with are so profoundly corrupt, odious and offensive that one would think that human patience would simply run out. <br />
<br />
On October 9, 2013, page A6, the New York Times (NYT) published an article discussing "a stinging critique of the American-led campaign" in Afghanistan.[1] Afghan president Hamid Karzai made comments in an interview with the BBC where he criticized the U.S. for "causing harm to the Afghan people" in its quest to find Al Qaeda operatives in Afghanistan. At the moment, American and Afghan negotiators are unable to agree on terms of relations once the U.S. withdraws its troops from Afghanistan at the end of 2014. As president Karzai delicately put it: "If the agreement doesn't suit us, then, of course, they can leave." President Obama has hinted that if there is no agreement, the U.S. may have to withdraw all troops from Afghanistan. The U.S. had hoped to keep about 10,000 troops for training Afghan troops and hunting terrorists.<br />
<br />
An insult was that, although Karzai conceded that his own government was "weak and ineffective" and that it had not been able to tackle rampant corruption within its own ranks, the blame for the corruption fell on the U.S. and its allies. It is true that the U.S. cannot account for the aid it sends to Afghanistan[2] and U.S. aid is likely a major source of funds to terrorists and corrupt officials.[3] Despite that, massive corruption and vote fraud is closely linked to Karzai himself and his close allies.[4] As early as 2001, the year the U.S. put Karzai in power, Afghanistan was referred to as a kleptocracy and he has done nothing to change it since.[5] The Afghan government admits to internal corruption, but insists that they can deal with it.[6] That is pure nonsense. The Afghan government is capable of dealing with essentially nothing. Mr. Karzai's allegation that the U.S. caused corruption in Afghanistan is pure mendacious hypocrisy.<br />
<br />
As far as the future goes, the odds unfortunately look good for a Taliban resurgence, a massive economic collapse[7] and the sad slide of a well-armed Afghan society back into the Taliban dark ages. That is despite Karzai's insistence that "The return of the Taliban will not undermine progress. . . . . there will be more Afghan women studying and getting higher education . . . . Even if the Taliban comes, that will not slow down." Amazingly, it appears inevitable that the Taliban will re-enter Afghan politics. The U.S. and Karzai are at cross purposes. U.S. forces in Afghanistan recently captured Latif Mehsud, a leader of the Tehrik-e-Taliban Pakistan, which is the group that claimed responsibility for the attempted bombing of Times Square in 2010.[8] Karzai has criticized the U.S. action as an affront to Afghan sovereignty. The prospects for Afghan-U.S. cooperation do not look promising to say the least. Odioius people of Meshud's ilk are what Karzai is looking to bring back into Afghan government and "civil" society. We will sorely need our diplomats. <br />
<br />
<div style="text-align: center;">
<b>It is getting worse</b> </div>
The evidence says that the Taliban will return to power and that their tactics have not changed. A recent Wall Street Journal article[9] reports that about 590,000 Afghans out of a total population of 30 million are internally displaced by fighting between Taliban and Afghan forces. The pace of displacement is sharply increasing. Overall security continues to deteriorate and many Afghan citizens are desperate to leave the country. A UN expert on Afghan refugees said that refugee's "desperation is incredible" and as many as 200,000 Afghans could flee to Pakistan next year as U.S. troops withdraw. Discouraging and sad as it is to say, this looks much like the end of the Vietnam war all over again. It is time to begin to ask who is responsible for this impending disaster. It is easy to argue that our flawed two-party system and inept U.S. political leadership had more than a little to do with this disaster. <br />
<br />
Given the poor and worsening situation in Afghanistan, one can only wonder why the delightful Mr. Karzai thinks he can do anything about the Taliban if they regain power. Common sense suggests that if the Taliban does gain power, Karzai will slip out of the country in the dead of night, taking billions of U.S. taxpayer dollars with him. It would be either that, or he stays in the country and the Taliban slits his throat.<br />
<br />
Finally, it is worth note that tucked into the NYT article about Karzai, was a little box called "Names of the Dead". It stated that to date 2,269 American service members have died in the Afghan war and related operations. It stated that DOD confirmed the deaths (presumably in Afghanistan) of five U.S. service members with ages ranging from 19 to 25. To date, the U.S. has spent about $665 billion in Afghanistan. In the coming decades, hundreds of billions more will be spent caring for our wounded service members.[10]<br />
<div style="text-align: center;">
<b>Hard questions need to be asked</b> </div>
If the Taliban does come back into power and Afghanistan will likely slip quietly back into the dark ages. If that does happen, the question the American people should consider is how well did the two-party system serve or not serve the public interest. How effective was nation building? The original promise was a total cost of about $50-60 billion for Afghanistan, but that now looks like an outright fabrication or staggering incompetence. Who is responsible? What difference would there have been if the U.S. had simply gone into Afghanistan and captured or killed Osama Bin Ladn when it had the chance to do so and then simply left, with the Taliban returning to continue as it did before the invasion. There are many questions that need to be asked and answered.<br />
<br />
Unfortunately, those questions are unlikely to be asked in mainstream two-party politics. The politicians from both parties are responsible and if the outcome is truly sour, neither side will want to discuss it. In that case, the American people will, yet again, have been misled by their government and there will be no accountability for the failures. Taxpayers simply have to pay the price and the two-party status quo will carry on with its self-serving business as usual. All things considered, it is hard to assess who or what is less odious - Karzai or an intractably incompetent two-party system.<br />
<br />
Footnotes:<br />
1. Link: http://www.nytimes.com/2013/10/09/world/asia/karzai-lashes-out-at-united-states-for-its-role-in-afghanistan.html?_r=0. <br />
2. Link: http://www.bbc.co.uk/news/world-south-asia-11641964. An astonishing inability of some U.S. agencies to account for how they spend money is a topic the RPCA has raised before (http://reformparty.org/reform-party-of-california-commentary-dods-unacceptable-accounting-practices/). This is a serious, chronic problem that is simply beyond the capacity of two-party politics to address.<br />
4. Links: http://www.nytimes.com/2012/11/27/world/asia/kabul-bank-audit-details-extent-of-fraud.html?pagewanted=1&hp; http://www.nytimes.com/2012/03/08/world/asia/corruption-remains-intractable-in-afghanistan-under-karzai-government.html?ref=asia; http://www.nytimes.com/2009/10/12/world/asia/12afghan.html; http://www.cnn.com/2009/WORLD/asiapcf/09/17/afghan.election/. 5. Link: http://articles.latimes.com/2001/nov/26/news/mn-8452; http://www.theglobeandmail.com/commentary/is-corruption-the-cost-of-saving-afghanistan/article4403844/.<br />
6. Link: http://www.khaama.com/afghanistan-dismiss-us-audit-watchdogs-remarks-2195.<br />
7. Although the NYT article says that Afghanistan itself generates 20% of its government budget with the rest coming from foreign aid and military spending, that is hard to reconcile with other reports asserting that over 90% of the country's budget comes from the outside (http://articles.latimes.com/2011/aug/19/world/la-fg-afghan-economy-20110819). Even if the NYT 20% figure is accurate, common sense says that Afghanistan will collapse once we leave (http://ricks.foreignpolicy.com/posts/2012/02/16/will_afghanistan_collapse_after_us_troops_leave_maybe_but_not_why_you_think; http://www.nytimes.com/2011/11/23/world/asia/world-bank-issues-alert-on-afghanistan-economy.html). With any luck, all of that doom and gloom will turn out to be wrong. One can only hope for the best.<br />
8. Link: http://www.npr.org/templates/story/story.php?storyId=232015007. <br />
9. Wall Street Journal, October 15, 2013, pages A1, A16; online at http://online.wsj.com/article/SB10001424052702303382004579127432990605714.html.<br />
10. Link: http://www.reuters.com/article/2011/06/29/us-usa-war-idUSTRE75S25320110629.Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-2091953795007300064.post-9274698050844670242013-10-10T11:08:00.001-07:002013-10-10T11:08:31.889-07:00debt ceiling debate and confirmation bias<div style="text-align: center;">
<b>Reform Party of California</b></div>
<div style="text-align: center;">
<b>The debt ceiling debate and biased thinking</b></div>
<div style="text-align: left;">
<br /></div>
<div style="text-align: left;">
<div style="text-align: center;">
<b>Context</b> </div>
<br />
Treasury Secretary has warned that "nothing good" will come if congress does not raise the debt ceiling, which is projected to be breached on or about October 17, 2013. Secretary Lew asserts that if Congress does not pass a debt-ceiling increase, the
U.S. will be “dangerously low” on cash and risk defaulting on
its debts.[1] Governments and business groups worldwide are very nervous about this and they mostly urge congress to increase the debt ceiling. PIMCO, a major holder of U.S. bond debt, holds no U.S. bonds that come due from now until December because they did not want to take any chance whatever of holding any U.S. bond that is anywhere near a default.[2] That is how sensitive at least some investors are to risk. They have a hair trigger and are willing to take no more investment risk than is absolutely necessary in view of projected returns on their investment.<br />
<br />
From a non-ideological pragmatic point of view, i.e., the Reform Party of California's (RPCA's) point of view, an urgent question is exactly what would happen if the debt ceiling is not raised. The question is urgent because many republicans in congress now believe that the the effect of not raising the debt ceiling would not create significant problems for the U.S. or world economy. The thinking is that there is sufficient incoming tax revenue to service existing debt obligations and any income shortfall would be addressed by spending cuts and/or late payment on various debt obligations as they come due. Obviously, many people outside of congress disagree either by words or by action, e.g., PIMCO's exit from risk.<br />
<br />
A complication to assessing the options and predicting outcomes is in innate biases attached to ideology. Even the very best and brightest experts have a very hard time in consistently predicting outcomes from policy choices in their fields of expertise.[3] The adverse effects of ideology on clear, logical thinking can sometimes be powerful and painfully obvious to unbiased observers but almost impossible to see in the ideologue's own mind.[4] Acknowledging and seeing internal bias in one's own thinking is difficult and it can be very unpleasant. That is especially if a person is an ideologue, because reality just does not care about any one's ideology and the two often collide, leaving a mess behind.[4] Most people may not be aware of this normal human trait at all, but the phenomenon known as confirmation bias has been well known for decades in the social sciences.[5] </div>
<div style="text-align: left;">
<br />Confirmation bias or confirmatory bias is a tendency of people to favor information that confirms their beliefs or faith (ideology). The phenomenon is manifest by selective memory and biased interpretation of information. The effect is more powerful for deeply entrenched beliefs or ideology, which tends to irrational emotional bias into issues. Another adverse effect of confirmation bias is that it tends to lead a person to interpret ambiguous evidence as supporting their existing ideology or belief.<br />
<br />
Biased memory and interpretation of information have been invoked to explain several bad outcomes on thinking. One bad outcome is attitude polarization, the phenomenon of disagreements becoming more extreme in the face of the same data or evidence. Another bad outcome is the phenomenon of belief perseverance, which is persistence of beliefs after the evidence supporting the belief is shown to be false.[4] There are other bad effects, but the point is obvious - ideology influences thinking in ways that are usually counterproductive for smart, efficient politics (and most everything else).<br />
<br />
One observer had this comment: "Smart people believe weird things because they are skilled at defending beliefs they arrived at for non-smart reasons."[6] A corollary to that might be that if you do not have beliefs to defend when going into a debate or issue, then that neutrality ought to reduce the ill-effects of normal human biases on thinking that comes from ideology.<br />
<br />
<div style="text-align: center;">
<b>What happens if we do not raise the debt ceiling?</b> </div>
The RPCA simply cannot predict what effects, for better or worse, there would be from doing nothing and allowing the chips to fall where they will. The RPCA's instinct is to oppose endless raising of the debt ceiling. In the long run, continuing to do that positively will ruin the economy and wreck our standard of living. There is no question about that ultimate outcome if we do not change the way we handle our financial affairs. The question is how long the debt party can go on. The counterpoint to that ideology, is the fact that the two parties are highly polarized, very antagonistic and, if a default of some sort did occur, it is unclear that they could cooperate to take actions that experts might argue would be needed. The grip of ideology and the polarization it engenders makes prospects of intelligent, fast action by congress appear to be very, very unlikely. Gridlock appears to be the new norm in two-party governance.</div>
<div style="text-align: left;">
</div>
<div style="text-align: center;">
<b>What about the broader context?</b> </div>
<div style="text-align: left;">
The intelligent approach to this is to set instinct or ideology aside and look objectively at everything. It is obvious that there are vastly differing
versions of what would happen if the debt ceiling is not raised and/or we default on some or all U.S. debt. Most
expert opinion argues that the effects would be bad to catastrophic for
the U.S. and probably the rest of the world's economy. They do not want to come anywhere close to a default. Minority opinion, coming mostly from conservative republican and/or libertarian ideologues, is that
things would go on just fine or with only modest problems at worst. U.S.
public opinion appears to support raising the debt ceiling and not defaulting on
any debt.[7] For the minority, outcomes other than debt service default would occur and thing would stay more or less normal.</div>
<div style="text-align: left;">
</div>
<div style="text-align: left;">
</div>
<div style="text-align: left;">
</div>
<div style="text-align: left;">
As with global warming, this issue is not simply political. The voices of economists should carry some real weight. Most politicians are not economists, much less economic experts. In global warming, the RPCA has argued that the voices of the majority of climate scientists need to be heard and accorded proper weight.[8] What politicians have to say about it is secondary at best. There has to be one or more reasons for the disconnect between the minority who argue that the debt ceiling does not need to be raised and those who argue the opposite. The RPCA's concern here is that minority opinion is largely ideologically-driven and heavily influenced by some sort of confirmation bias associated with conservative, anti-government ideology. Other than the authority that comes with majority expert opinion, the RPCA is aware of no basis for the confident predictions of either side because America has never defaulted on its debt. </div>
<div style="text-align: left;">
<br /></div>
<div style="text-align: left;">
Under the circumstances, what would happen to investor confidence and to the U.S. and foreign economies simply cannot be predicted. We are approaching blindingly complex but uncharted waters. Given congressional polarization and dysfunction and the fickle nature of investor confidence coupled with the size of U.S. debt and a frail economic recovery, the RPCA reluctantly concludes that the intelligent thing to do is to raise the debt ceiling and continue trying to address our chronic fiscal problems. That opinion comes with the full recognition that the spending urge in congress is very powerful and has not been restrained by either democrats or republicans in recent decades. Very good arguments can be made that neither side in this impending train wreck is anywhere near to being serious about dealing with fiscal and budget matters.[9] It also recognizes that what appears to be the most intelligent and compassionate approach, such as that advocated by the Simpson-Bowles commission, is ideologically unacceptable to both sides in this endless, self-serving debate.</div>
<div style="text-align: left;">
</div>
<div style="text-align: left;">
The choices that the two-party system have given us, and the position they have put us in, are simply bad and awful. What we are getting from the two sides is a blitherfest of nonsense.</div>
<br />
Footnotes:<br />
1. Link:
http://www.cbsnews.com/8301-3460_162-57606229/treasury-secretary-warns-congress-nothing-good-will-come-of-failure-to-raise-debt-ceiling/;
http://www.bloomberg.com/news/2013-10-06/u-s-to-default-if-debt-ceiling-not-raised-lew-says.html. <br />
<div style="text-align: left;">
2. Link: http://www.npr.org/blogs/money/2013/10/10/230914894/what-a-u-s-default-would-mean-for-pensions-china-and-social-security.<br />
3. Link: http://reformparty.org/reform-party-commentary-injecting-rationality-into-irrational-politics/. <br />
4. Link: http://reformparty.org/reform-party-of-california-commentary-why-ideology-is-bad-for-politics/. <br />
5. Link: http://en.wikipedia.org/wiki/Confirmation_bias.<br />
6. <span class="citation" id="CITEREFKida2006">Kida, Thomas E. (2006), <i>Don't believe everything you think: the 6 basic mistakes we make in thinking</i>, Amherst, New York: Prometheus Books, page 157. Kida attributes the quote to the same individual, Michael Shermer, that authored the commentary discussed at footnote 4.</span><br />
<span class="citation" id="CITEREFKida2006">7. Disapproval with republicans in congress is increasing (http://www.gallup.com/poll/165317/republican-party-favorability-sinks-record-low.aspx?utm_source=WWW&utm_medium=csm&utm_campaign=syndication). Presumably that disapproval is driven at least in part by unhappiness with the prospect of a default or other side-effect of not raising the debt ceiling.</span><br />
<span class="citation" id="CITEREFKida2006">8. Link: http://reformparty.org/reform-party-of-california-essays-6-what-is-the-public-interest-and-how-is-it-best-served/. </span><br />
<span class="citation" id="CITEREFKida2006">9. Link: http://reformparty.org/the-tax-gap/.</span></div>
Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-2091953795007300064.post-17296005867825385652013-10-03T11:10:00.000-07:002013-10-03T11:10:41.939-07:00The government shutdown<div style="text-align: center;">
<b>Reform Party of California Commentary</b></div>
<div style="text-align: center;">
<b>How </b><b><b>legitimate i</b>s the government shutdown over the ACA? </b></div>
<br />
A few weeks ago, the Reform Party of California (RPCA) observed that the rhetoric in the House of representatives showed that the two parties were far apart with no basis for compromise on much of anything in evidence.[1] The disputes included disagreement over the Affordable Care Act (ACA), also known as Obamacare. Now that a partial government shutdown is in effect, republican rhetoric relies heavily on assertions of public support for the legitimacy of House republican's position. The democrats are curiously quiet on this point. Given the penchant for both parties to spin facts and reality any way they wish, it is fair to ask exactly how much public support for the shutdown there is in unspun reality.<br />
<br />
A poll released on October 1, 2013 indicated that about 72% of Americans opposed a government shutdown for failure to pass budgets, with 64% opposing a shutdown over the debt ceiling.[2] Assuming that data is real, a solid majority of Americans oppose a shutdown. Republican claims of legitimacy based on widespread public support are false. Some republicans shade their rhetoric by saying that most of their constituents in their voting districts are urging no compromise on blocking the ACA. Assuming that is true, and it could be, how does that fit into the larger context of how the federal government works and does that legitimize the shutdown?<br />
<br />
The larger context includes the following. The republicans lost the presidential race in 2012. They lost senate seats in 2012. Republicans retained control of the House. Senators are elected by voters statewide, while many representatives are elected by voters in gerrymandered districts. The point of gerrymandering is to reduce political competition, which favors the party that draws congressional districts. Not surprisingly, the net effect of gerrymandering was protection of House incumbents in 2012.[3] That is exactly what gerrymandering is supposed to do in the two-party system.[4] Given that context, House republican claims to legitimacy are, on balance, not particularly credible. That claim from U.S. senators carries more weight - their voting districts are not gerrymandered.<br />
<br />
The larger context also includes the state of people's knowledge of what the ACA really is. In terms of what the public knows, there is confusion with opinions varying widely. One recent poll found that 30% of Americans believe that the impact of the ACA would be negative, while 50% felt it would be neutral and 12% felt it would be positive.[5] Another poll indicated that 25% of Americans believed they understood the ACA well and 33% felt they had little or no understanding.[6] Opinion can vary depending on whether one refers to the healthcare law as the ACA or Obamacare, but that evidence is anecdotal.[7] It is fair to say that at the least, there is widespread confusion or disagreement about what the ACA is and what its impact will be.<br />
<br />
It is also fair to say that there are no obvious reasons to know what impacts the ACA will have because, e.g., until a few days ago the insurance rates and coverages for the myriad of competing plans were not even known. Thus, when democratic talking heads wax eloquent about affordable health care for all with no adverse impacts, they cannot know what they are talking about. Similarly, when the republican talking heads wax eloquent about the awful disaster the "failed" ACA will be, they cannot know what they are talking about.[8] It is too soon to draw any firm conclusions.<br />
<br />
When all things are considered as a whole, it is fair to say that pointing to public support as a justification for shutting the government down over the ACA is not persuasive. The public doesn't want it. House republicans are not making a compelling case for legitimacy in the face of outright public opposition to a shutdown, widespread confusion about what the ACA actually is and a rigged electoral system that favors the very people who claim legitimacy of "the American people". Those claiming legitimacy represent a minority, not the majority. Where is the legitimacy in this?<br />
<br />
Footnotes:<br />
1. Link: http://reformparty.org/reform-party-of-california-commentary-colloquies-in-venom/.<br />
<br />
2. Link: http://www.bloomberg.com/news/2013-10-01/americans-by-72-oppose-shutdown-tied-to-health-care-cuts.html.<br />
3. Link: http://www.governing.com/blogs/by-the-numbers/redistricting-gerrymandering-effect-2012-congressional-elections.html.<br />
4. If the RPCA had its way, House and state voting districts would be gerrymandered to either increase competition or to be neutral or geographically compact. The fact that both parties gerrymander to dilute the power of political opposition and/or minorities is evidence that neither party is willing to compete head on in elections. They don't want the competition. In turn, that is evidence that both parties put their own well-being and grip on power ahead of service to the public interest. <br />
5. Link: http://politicalticker.blogs.cnn.com/2013/09/18/polls-give-both-sides-ammunition-in-shutdown-fight/.<br />
6. Link: http://www.usatoday.com/story/news/politics/2013/09/16/usa-today-pew-poll-health-care-law-opposition/2817169/.<br />
7. Link: http://www.latimes.com/business/money/la-fi-mo-jimmy-kimmel-obamacare-affordable-care-act-20131001,0,1174482.story. Although anecdotal, this does fit with data showing that when individual key provisions of the ACA are explained, people tend to like those provisions, but when the law as a whole is discussed, approval decreases. <br />
8. There may be credible evidence that health care costs for most people will increase significantly as part of the cost to insure millions of currently uninsured people (http://www.forbes.com/sites/theapothecary/2013/09/23/its-official-obamacare-will-increase-health-spending-by-7450-for-a-typical-family-of-four/; the author of this piece is very hostile to the ACA and thus it is unclear if unspun data or the author's ideology is speaking; the author is associated with the American Enterprise Institute, a hard core conservative, anti-government ideologue think tank). If costs do increase as right wing ideologues argue, an honest debate would be focused on whether Americans want to pay the price for that kind of social service for fellow citizens. Public opinion on that point is unclear. However, it would be fair to say that if the promises of lower healthcare costs that accompanied the passage of the ACA law turn out to be wrong, millions of Americans could feel misled, betrayed and/or angry. Absent some very good reasons, those reactions would be justified. Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-2091953795007300064.post-13685277476440022062013-09-21T11:16:00.002-07:002013-09-21T11:16:49.095-07:00Why ideology is bad for politics<div style="text-align: center;">
<b>Reform Party of California Commentary</b></div>
<div style="text-align: center;">
<b>Why ideology is bad for politics</b></div>
<br />
A key criticism the Reform Party of California (RPCA) has repeatedly leveled at the two-party system is its heavy reliance on rigid ideology as a guide to inform and evaluate competing policy choices.[1] That flaw is a key driver of fantasy, failure and waste in governance. The RPCA is not alone in seeing ideology as a major bad actor in politics.<br />
<br />
The magazine Scientific American published a commentary on ideology in its October 2013 issue (page 95; online at http://www.scientificamerican.com/article.cfm?id=why-we-should-choose-science-over-beliefs). The piece was written by Michael Shermer, a hard core libertarian who argues that when reality or science does not support belief or ideology, then the ideology needs to give way. Mr Shermer described simple but powerful examples of how ideology distorts reality.<br />
<br />
One example was Mr. Shermer's slow realization that in the gun control debate he saw himself engaging in "the cherry picking and data mining of studies to suit
ideological convictions." He further explained that "We all do it, and when the science is
complicated, the confirmation bias (a type of motivated reasoning) that
directs the mind to seek and find confirming facts and ignore
disconfirming evidence kicks in."<br />
<br />
Another example Mr. Shermer described related to global warming. The RPCA has used the same topic to illustrate the same corrupting influence of ideology on reality that Shermer sees.[2] There, Mr. Shermer was attending the libertarian 2013 FreedomFest conference in Las Vegas, NV. At the meeting Mr. Sherment made the unremarkable observation that "between 90 and 98 percent of climate scientists accept anthropogenic
global warming, someone shouted, “LIAR!” and stormed out of the room."<br />
<br />
<div style="text-align: center;">
<b>Conclusion</b></div>
The reasonable conclusion is simple: Ideology is bad for smart, efficient politics. As Mr. Shermer put it in his commentary: ". . . not all libertarians deny science, but all of us are subject to the psychological forces at play when it comes to choosing between facts and beliefs when they do not mesh. In the long run, it is better to understand the way the world really is rather than how we would like it to be." Those comments reflect exactly the point about ideology that the RPCA has been making over and over.[3] The RPCA is not alone in rejecting a major role for ideology in politics. However, if you want waste and inefficiency, stick with your ideology and you will get more waste and inefficiency. If you want something better, the RPCA is offering centrism grounded in non-ideological pragmatism. Take your pick. <br />
<br />
Footnotes:<br />
1. Links: http://reformparty.org/reform-party-of-california-essays-what-is-the-proper-size-and-scope-in-government/; http://reformparty.org/reform-party-of-california-essays-6-what-is-the-public-interest-and-how-is-it-best-served/.<br />
2. Link: http://reformparty.org/reform-party-of-california-essays-6-what-is-the-public-interest-and-how-is-it-best-served/.<br />3. It is not the case that science has all the answers to everything. It doesn't. For example, science cannot prove the big bang theory. However, religion cannot prove Creationism. Nonetheless, there is scientific evidence that accords with the big bang. For Creationism there is religious faith, which is perfectly fine for personal religious belief. But when it comes to governing, which intellectual framework do you want to rely on: one grounded in scientific evidence or one grounded in religious faith and/or political ideology?Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-2091953795007300064.post-67664130619285755612013-09-20T14:10:00.002-07:002013-09-20T14:10:40.226-07:00Uniting discontented groups<div style="text-align: center;">
<b>Reform Party of California</b><br />
<b>Can centrist political discontent coalesce on </b><br />
<b>a pragmatic center and make a difference?</b></div>
<b><br /></b>
<br />
<div style="text-align: center;">
<b>Context</b></div>
If political independents, presumably centrists and/or pragmatists for the most part, could coalesce around a single party or entity, it would be larger than either the democratic or republican parties. Poll data indicates that about 40-42% of Americans identified as independents in 2011 (31% self-identified as democrat, 27% republican) and about 41% in 2012 (31% democrat, 28% republican).[1] There is a drift of a few self-described independents away from republican-leaning status. At the national level, the two parties are no longer the biggest game in town, nor are they aligned with opinion of the largest political group, the independents.<br />
<br />
The relatively high level of independent identification is likely due to factors including (i) a low public image for the federal government, (ii) a low image both the democratic and republican parties and (iii) possibly a growing recognition that dropping party affiliation makes it easier to avoid having a partisan mindset and reflexive partisan support for or opposition to competing policy options.[2] If it is true, the latter point is evidence that there is erosion of blind faith in liberal and conservative ideology, at least as practiced by the two-party system. The Reform Party of California (RPCA) sees erosion in ideological faith as a major change for the better in how the U.S. public sees and thinks about politics.[3]<br />
<br />
It is reasonable to believe that independents and presumably centrists and/or pragmatists are open to considering a reduced reliance on ideology as the main framework for doing politics. Ideology is a lens through which reality, politics and policy choices are usually viewed and assessed in the two-party system, which is something the RPCA has criticized repeatedly. That belief is based in part on the fact that the Democratic, Republican, Green, Socialist, Libertarian and most other political parties are firmly grounded in their ideologies.[4] If ideology was the key driver, most independents presumably would be in an existing ideologically-based party and not independent. Therefore, common sense says that loss of faith in ideology is at least partially behind the phenomenon of drift from the status quo model.<br />
<br />
<div style="text-align: center;">
<b>Big numbers, small impact: The independents' one-night stand? </b></div>
Despite large numbers of independents, their impact on policy appears to be limited.[5] Although both sides openly appeal to independents in elections, once the election is over it is easy to argue that the winning candidate swings back to the left or right. The influence of the center fades into oblivion. That phenomenon is not new, nor is it a secret. As one observer aptly put it, once candidates who appealed to independents get what they want by winning their election, "independent voters are forgotten as quickly as a one-night stand."[6] Although the analogy might be inappropriate, the sentiment is clear.<br />
<br />
If you listen to the rhetoric, it is reasonable to argue that independent voters are forgotten after most elections. The rhetorical focus is on political posturing and status quo party well-being, not problem solving or the will of the people.[7] The republican party is well-known for shooting RHINOs in pursuit of ideological purity and that purity isn't anywhere close to centrist or independent. The republican party is selling the same old time blind ideology of the hard core right.[8] Centrism has nothing to do with it. On the bright side, the polling data referenced above suggests that republican ideological extremism is slowly eroding public support, as it should. That's a good thing. The drift is toward the democratic party, which isn't a good thing because that reinforces the status quo.<br />
<br />
<div style="text-align: center;">
<b>How to unite independents and the political center? </b></div>
<div style="text-align: left;">
Given the circumstances, an obvious thought is to somehow unite the independents, centrists and pragmatists in some way. That would appear to require an intellectual framework or ideology for people to see and accept. To a large extent, the politics of the left and right for average Americans is driven by strongly held ideological beliefs. Those beliefs constitute an intellectual framework for attracting and holding supporters. The content that the RPCA has generated was intended to provide an intellectual framework that differed from the ideology-based frameworks that other parties are based on. </div>
<div style="text-align: left;">
<br /></div>
<div style="text-align: left;">
The point of being different, i.e., pragmatic and non-ideological, was intended to address three concerns. One was the loss of trust in both government and political parties that characterizes politics today. Another was to provide a different and better way to see and think about politics, i.e., objectivity and logic without distortion and knee-jerk instinctive thinking that ideology imposes on the process. The third concern was to elevate transparency and service to the public interest as key components of the different political approach. </div>
<div style="text-align: left;">
<br /></div>
<div style="text-align: left;">
Addressing those three concerns provided a clear alternative for doing politics in a way that would appeal to independents or centrists. The assumption behind that belief is simple. If it is true that the two parties and their ideologies are losing their grip on independents and centrists, then transparent logic and pragmatism[9] focused on service to the public interest ought to appeal to many or most of them. Offering some other kind of standard political or religious ideology, e.g., socialism or libertarianism, doesn't seem to be a promising way to appeal to discontented independents and centrists. If any ideological message was sufficiently appealing, then it would be capturing many of the independents. Reality and the poling data shows that those messages simply are not appealing to the mainstream public.</div>
<div style="text-align: left;">
<br /></div>
If you more or less accept the RPCA's version of reality, at least one conclusion is obvious. Centrists and pragmatists have no meaningful place in the two-party politics of the left and the right. What they get is, at best, lip service in elections followed by little, nothing or quiet derision for na<span class="st">ï</span>vety. That raises the question of what centrists and pragmatists can or should do if they want the status quo to change. One obvious answer is to unite just like the Tea Party and Occupy folks. If nothing else, both of those movements got attention in politics and the press. Their concerns are now mainstream in political discourse, if not yet policy. What their ultimate impact will be cannot be known. <div style="text-align: left;">
<br />
In politics, change happens only when people act. Therefore centrists and pragmatists have to unite or remain irrelevant in politics. The RPCA just cannot see any other reasonable conclusion. Given that reality, the RPCA will begin an initiative to unite the center, or if one is ongoing, join the existing effort. The goal is to generate an organization of some sort with sufficient presence that the press and politicians cannot ignore. Tea party and Occupy folks, are picketing-street protesting type folks. That draws press and political attention. Most centrists just do not do that kind of thing.<br />
<br />
<div style="text-align: center;">
<b>Throw down the gauntlet</b></div>
<b> </b>Despite that, there are other ways to have an impact. The RPCA will find that other way and work to use it. But here's the gauntlet: If centrists and pragmatists do nothing, nothing will change.[10] Therefore, they must become less passive and at least occasionally act in concert. That may not be protesting in the streets, but it has to be something more than just protesting on blogs. If others have not already figured out what actions to take that centrists would be willing to take for the long haul, the RPCA will figure it out. Its our job. There is a way forward to change.<br />
<br />
Suitable music to accompany this cheerful commentary: We Are Telephone - Ahead or VNV Nation - Perpetual (http://www.youtube.com/watch?v=ikRbKhbvees). No pessimism there folks.<br /></div>
<div style="text-align: left;">
</div>
<div style="text-align: left;">
</div>
Footnotes:<br />
1. Links: http://www.gallup.com/poll/151943/Record-High-Americans-Identify-Independents.aspx;<br />
www.gallup.com/poll/159740/democrats-establish-lead-party-affiliation.aspx.<br />
2. Links: http://www.gallup.com/poll/156713/Americans-Rate-Computer-Industry-Best-Oil-Gas-Worst.aspx; http://www.gallup.com/poll/24655/Party-Images.aspx; http://www.gallup.com/poll/149795/Republican-Democratic-Party-Images-Equally-Negative.aspx; http://ivn.us/2012/10/22/50-reasons-register-independent/.<br />
3. Links: http://reformparty.org/reform-party-of-california-essays-what-is-the-proper-size-and-scope-in-government/; http://reformparty.org/reform-party-of-california-essays-6-what-is-the-public-interest-and-how-is-it-best-served/. <br />
4. The RPCA, like the national Reform Party, is grounded in centrist/pragmatic non-ideological politics. The RPCA emphasizes objectivity in politics, policy options and the definition of service to the public interest. Ideologically-grounded parties see these things through the lens of their ideology. In RPCA opinion, that makes ideologically-based politics more subjective than objective, which in turn is less effective politics in the long run. Obviously, ideologically-based parties would strongly disagree to say the least. This amounts to a simple difference of opinion and differing views of reality.<br />
5. Link: http://abcnews.go.com/blogs/politics/2012/01/independent-voters-on-the-rise-but-do-they-matter/.<br />
6. Link: http://www.theatlantic.com/politics/archive/2012/02/4-types-of-independent-voters-who-could-swing-the-2012-elections/252363/. <br />
7. Link: http://reformparty.org/reform-party-of-california-commentary-colloquies-in-venom/.<br />
8. Conservatives are correct that our fiscal situation is unsustainable and probably very dangerous, maybe out of control. Where conservative ideologues fall flat is applying unspun reality to unbiased analysis in arriving at their policy solutions (less taxes, less regulation and less domestic spending) to this very real and urgent problem. The RPCA has argued that point elsewhere (http://reformparty.org/reform-party-of-california-elusive-economic-reality/). In RPCA opinion, pragmatic problem solving, not ideology, best solves problems that affect the public interest. Ideology solves problems that affect the ideological interest, which here is the extremist republican party resides these days. Whether the ideological approach best serves the public interest is mostly a matter of chance.<br />
9. Pragmatism means accepting the best policy choices based on unspun facts and unbiased analysis with an eye on sustainably serving the public interest. That is discussed elsewhere (http://reformparty.org/reform-party-of-california-essays-6-what-is-the-public-interest-and-how-is-it-best-served/). The implication of being pragmatic (not centrist) is that a fair hearing may suggest that a particular policy choice is best, regardless of whether it would be considered a preferred choice by the left, right, center or elsewhere. In practice most pragmatic policy will probably amount to centrist policy, more or less. If nothing else, that comes from the nature of the two-party system as it exists now because compromise is necessary to do much of anything. What differs is that arguments from the pragmatist can come from places other than the center even though the end result might be elsewhere.<br />
10. Millions of Americans have sworn off politics arguing that it is a waste of time and that the system is rigged and corrupt. Yes, it is rigged and corrupt. However, if enough people do something it will not be a waste of time. Many wonks and partisans still argue that what dissidents like Ross Perot and Ralph Nader did to their presidential elections was counterproductive or a waste of time/votes. The RPCA disagrees. They made the status quo pay attention, even if in the long run little or nothing changed. Inflicting change on an unresponsive, corrupt and arrogant two-party system will require <u>sustained</u> participation by millions or tens of millions of Americans. There is no other way. Rest assured, the RPCA will find a way to make that task doable. For optimists, there is always a way.Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-2091953795007300064.post-5725619698373244832013-09-10T14:04:00.000-07:002013-09-10T14:04:37.863-07:00Simpson-Bowles commission report commentary<div style="text-align: center;">
<b>Reform Party of California Commentary</b></div>
<div style="text-align: center;">
<b>The reality of America's fiscal situation</b></div>
<div style="text-align: center;">
<br /></div>
<div style="text-align: center;">
<b>Context</b></div>
In the next few weeks, the federal government faces major deadlines for passing spending bills. The Treasury Department estimates that sometime in October, the federal government will hit the federal debt limit.[1] In addition, spending bills to authorize federal budgets for fiscal year 2013 need to be passed by the end of September. These spending issues are among the most contentious and disputed issues the two parties have to deal with. Unfortunately, recent rhetoric indicates that inter-party vitriol and gridlock will continue.[2] <br />
<br />
In the first post in this series of commentaries on the economy, spending and debt, the Reform Party of California (RPCA) discussed a republican budget plan would address America's long-term fiscal situation. The plan is based on conservative ideology[3] with an unknown degree of influence by special interests, which include the republican party. Critics argue that the republican plan shifts too much of the sacrifice and pain onto the lower and middle classes and favors wealthy individuals and interests. Republicans reject those criticisms as nonsense. Independent analyses suggest that spending cuts will adversely impact millions of people in the lower and middle classes.[3] Impacts on wealthy individuals and businesses are unclear. <br />
<br />
In 2010 president Obama created the National Commission on Fiscal Responsibility and Reform. It was a bipartisan group charged with the task of preparing a non-partisan plan to address America's long-term fiscal situation. The Simpson-Bowles commission, named after its two co-chairs Alan Simpson and Erskine Bowles, released its final report in December of 2010.[4] The Simpson-Bowles (SB) report includes the following conclusions and statements:<br />
<div style="text-align: justify;">
<br /></div>
<div style="text-align: justify;">
<b>"The problem is real. The solution will be painful. There is no easy way out. Everything must be on the table. And Washington <u>must</u> lead. . . . America's long-term fiscal gap is unsustainable, and if left unchecked, we will see our children and grandchildren living in a poorer, weaker nation. . . . . If the U.S. does not put its house in order, the reckoning will be sure and the devastation will be severe. . . . . In the weeks and months to come, countless advocacy groups and special interests will try mightily through expensive, dramatic, and heart wrenching media assaults to exempt themselves from shared purpose and common sacrifice. The national interest, not special interests, must prevail."</b> (SB report at pages 7-8)<br />
<br />
The SB report says that, among other things, the SB plan would <b>"sharply reduce tax rates, abolish the AMT, and cut backdoor spending in the tax code. . . . . ensure lasting social security solvency, prevent the projected 22% cuts to come in 2037, reduce elderly poverty, and distribute the burden fairly. . . . . stabilize debt by 2014 and reduce debt to 60% of GDP by 2023 and 40% by 2035." </b>(SB report at page 15)<br />
<br />
Finally, the SB report says that it will<b> "reform corporate taxes to make America more competitive, and cap revenue to avoid excessive taxation."</b> (SB report at page 16) </div>
<br />
After the SB report was made public, president Obama thanked the commissioners for their hard work and then simply ignored the report's recommendations. The president apparently felt the commission's proposals were unacceptable, but his reasons for walking away from it are not entirely clear.[5] In the wake of the president's unwillingness to do anything, congress melted down into, or simply remained in, the useless gridlock and blame shifting mode that dominates that broken institution today. <br />
<br />
<div style="text-align: center;">
<b>Who you gonna trust?</b></div>
In RPCA opinion, the president's failure to back the report in any
meaningful way was a serious, major mistake. It was a wasted opportunity
to seriously address our fiscal situation beginning in 2010. Now it is
three years later and nothing has changed, except that we are three
years closer to a tipping point in sustainability. Three years is a long
time for the government to do essentially nothing. In this case, the president failed to lead and his failure could
precipitate some unpleasant or even catastrophic consequences. Time will
tell. It is solid evidence that Washington is incapable of leading. That presumably arises mostly from the unpleasant news that will accompany any real attempts to fix things.<br />
<br />
In terms of politically-inspired options there are two main plans out there - republican and democratic. The SB plan appears to be more or less non-political. The republican plan has been discussed.[3] It is viewed here with deep suspicion. The republican plan is firmly grounded in conservative ideology, not non-ideological pragmatism. Arguably it contains more than a small tinge of political self-interest. Both of those factors appear to be significantly out of synch with optimum service to the public interest. Optimum service to the public interest is the RPCA's only political focus.[6]<br />
<br />
SB's statement that "everything must be on the table" appears to be
simple common sense, given the depth and breadth of the problem. SB's
explicit urge to focus on the national interest over special interests
is not something one hears much about from either of the two parties.
They get much or most of their money from special interests. Naturally
they won't bite that hand because it feeds them. The "national interest"
that SB refers to is another term for the the public interest, which is
the the RPCA's main concern. Finally, a major focus of the SB plan is
"backdoor spending in the tax code", which is something that
conservative ideology apparently cannot and will not consider as part of the solution to the problem.[7] Collectively, the
content and tone of the SB commission report make it far more credible
than the republican plan.<br />
<br />
<div style="text-align: center;">
<b>Reality doesn't care about ideology</b> </div>
In terms of credibility, the SB plan provides a better starting place and general guidance about what needs to be done to begin to address unsustainable America's fiscal situation. Some of the portions of the SB commission report quoted above are generally in accord with other analyses from other sources.[8] The non-partisan nature of the SB plan seems genuine. In RPCA opinion, problem solving from an ideological point of view is less effective in serving the public interest than problem solving from a pragmatic non-ideological point of view. At the very least, the ideological viewpoint has to serve the ideology. That would be fine if reality and problems cared about some ideology or another or if reality accorded with one particular ideology. Unfortunately for ideologues and the rest of us who suffer with the inefficiency that arises from policies grounded in ideologically distorted world views, reality could not care less about any one's ideology. As far as the RPCA is concerned, open-minded, pragmatic problem solving, not ideology, solves problems.<br />
<br />
<div style="text-align: center;">
<b>The matter of trust (again)</b></div>
The RPCA acknowledges a mostly unspoken concern that conservatives have about trying to fix our fiscal situation. Specifically, there is a great deal of sentiment among most conservatives and probably many independents as well that you simply cannot give Washington more money and expect it to solve any fiscal problem in the long run. The reason for that belief is simple. When you give liberals more money, they will spend it faster than it comes in.[9] Therefore, any fix you put in place will be dissipated in a few years and the situation will continue to deteriorate. That concern is valid. The RPCA shares the belief that government, both in California and in Washington, is a black hole for money. You can throw more money into the gaping maw of government and it will never be enough. In that scenario, things will not change or get better, fiscally speaking.<br />
<br />
<div style="text-align: center;">
<b>The dilemma</b> </div>
That being said, there is a dilemma here. Some experts believe that revenue increases and spending cuts are necessary to fix our situation over the long run. If that is true, and the RPCA believes it is, it means there are two basic mainstream choices here. One is to take the republican approach and rely only on spending cuts and accept the massive pain that will inflict. The advantage of doing that is that spending will be kept under control. The other is to take an approach similar to SB's and build in rock-solid revenue and spending caps. That should minimize pain somewhat while giving some assurance that congress won't come along a year or two later and wreck the plan. Such hard caps could require, for example, changes to come only after a 75% majority vote by House and Senate members. Getting that kind of concurrence these days is impossible for almost anything of substance, so hardened caps like that would likely be safe for a long time. <br />
<br />
The question is whether the public would trust even that kind of a plan. Regrettably, mustering sufficient public trust for even that kind of a scenario to come about is hard to envision. The public has heard so many untruths from so many politicians and seen so much special interest power over the years that maybe nothing will convince most of the public that it is possible to fix this while being fair, intelligent and compassionate in service to the public interest. Maybe it is that attitude that allows the left and right extremes to call the shots in the debate. The center, arguably represented by the SB report, may have simply pulled too far back to have much impact. Regardless of the causes, the situation reflects a profound failure of the two-party system to effectively serve the public interest.<br />
<br />
<br />
Footnotes:<br />
1. Link: http://www.bloomberg.com/news/2013-08-26/lew-tells-congress-treasury-will-hit-debt-limit-in-mid-october.html.<br />
2. Link: http://reformparty.org/reform-party-of-california-commentary-colloquies-in-venom/.<br />
<br />
3. Link: <span id="sample-permalink" tabindex="-1">http://reformparty.org/</span>reform-party-of-california-elusive-economic-reality. <br />
4. Link: <a href="http://www.fiscalcommission.gov/sites/fiscalcommission.gov/files/documents/TheMomentofTruth12_1_2010.pdf">www.fiscalcommission.gov/sites/fiscalcommission.gov/files/documents/TheMomentofTruth12_1_2010.pdf</a>; a summary of the report is here: http://en.wikipedia.org/wiki/National_Commission_on_Fiscal_Responsibility_and_Reform.<br />
5. Link: http://online.wsj.com/article/SB10001424127887323482504578225620234902106.html. One possible reason for president Obama to turn his back on the SB commission and its report is his opinion that the U.S. does not have a spending problem. According to that viewpoint, we only have a revenue problem and that could be fixed by tax increases alone. There is some truth in that. If it is true that the U.S. treasury does not collect roughly $430 billion/year due to tax evasion (http://reformparty.org/the-tax-gap/), then if the evasion could be reduced by, say, 85%, revenue would increase by $365 billion/year. Although that alone won't solve the whole problem, it isn't something that can be ignored. There is real money there.<span style="font-family: inherit;"> An</span>other oddity here is that Obama asked for a bipartisan report and that is what he got. If he had expected a report that said we can fix thing by just increasing taxes, he should have asked liberal democrats and socialists to write the report. One can sometimes wonder if this guy isn't just a bit naïve.<br />
6. Link: http://reformparty.org/reform-party-of-california-essays-6-what-is-the-public-interest-and-how-is-it-best-served/. <br />
7. Link: http://reformparty.org/the-tax-gap/. In RPCA opinion, "backdoor" spending in the tax code is a major problem that contributes to our dismal fiscal situation. It probably costs the U.S. treasury well over $400 billion/year in illegal tax evasion plus additional hundreds of billions/year in unintended but legal tax avoidance tactics that congress never contemplated or is even aware of. The mess and blinding complexity is completely due to how the two-party system operates. Whether that is seen as as good governance, evidence of incompetence and special interest corruption or something else will of course vary from person to person. The RPCA sees it as evidence of incompetence and corruption.<br />
8. Link: <a data-mce-href="http://online.wsj.com/article/SB10001424127887323353204578127374039087636.html" href="http://online.wsj.com/article/SB10001424127887323353204578127374039087636.html" target="_blank">http://online.wsj.com/article/SB10001424127887323353204578127374039087636.html</a><span id="edit-slug-buttons"></span>; <a data-mce-href="http://kaiserfamilyfoundation.files.wordpress.com/2013/01/8185-02.pdf" href="http://kaiserfamilyfoundation.files.wordpress.com/2013/01/8185-02.pdf" target="_blank">http://kaiserfamilyfoundation.files.wordpress.com/2013/01/8185-02.pdf</a>; See page 2 of the analysis; <a data-mce-href="http://www.offthechartsblog.org/dont-forget-ryans-budget-of-last-year/" href="http://www.offthechartsblog.org/dont-forget-ryans-budget-of-last-year/" target="_blank">http://www.offthechartsblog.org/dont-forget-ryans-budget-of-last-year/</a>.<br />
9. Blaming it all on liberals doesn't convey the whole reality here. Conservatives in government have repeatedly shown that they are happy to go into debt without regard for future obligations. That was made brought home again when republicans in congress failed to pay for, e.g., either the Afghanistan or Iraq wars, with anything other than debt. The argument above simply presents the republican point of view, which downplays or ignores these little inconvenient truths. With the likely exception of the Tea Party folks, deficit spending is an old bipartisan habit. For most Americans, that makes trust in long-term budget plans very hard or impossible to have.<br />
Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-2091953795007300064.post-35441341919818882022013-09-08T10:06:00.001-07:002013-09-08T10:06:56.712-07:00 Smithfield buyout by China Co. part 2<div class="post-header">
</div>
<div style="text-align: center;">
<b>Reform Party of California Commentary</b></div>
<b>
</b>
<div style="text-align: center;">
<b>
Business on an uneven playing field</b></div>
<div style="text-align: center;">
<b> - part 2</b></div>
<div style="text-align: center;">
</div>
<div style="text-align: center;">
<b>Context</b></div>
The Reform Party of California Commentary
(RPCA) previously commented on an impending purchase by China's food supplier, Shuanghui International Ltd. of Smithfield Foods, Inc., a U.S. company that is the word's biggest pork producer.[1] The key concerns related to intellectual property and the inherent unfairness of how our competitors can access U.S. markets, intellectual property and assets, while U.S. firms do not have equal access.<br />
<br />
The fundamental argument was that we are locked in a long-term battle between China's state capitalism and Western style private capitalism. The competition isn't just over pork and it isn't being played on a level field. The fight is about everything related to trade, our economy and economic strategy, our standard of living and ultimately, our national security. None of that overstates the case.[2] The story received some coverage in the press and then it faded into obscurity.[3] If consummated, the deal would be the biggest Chinese buyout of a
U.S. company.<br />
<br />
<div style="text-align: center;">
<b>The deal is approved</b></div>
The deal has just faded out of obscurity. According to a new report in the Wall Street Journal (WSJ), the
transaction apparently will go through.[4] The Committee on Foreign Investment in the U.S. (CFIUS), an obscure interagency committee in the Treasury Department that reviews international business transactions for national security implications.[5] The WSJ characterized that as a signal to the world that large U.S. companies "are available as acquisition targets". The WSJ implied that Smithfield shareholders would approve the buyout in a vote to be held on September 24 and that because neither party mentioned it, the CFIUS did not impose any restrictions on the sale from national security concerns.<br />
<br />
Key information that is missing is exactly what the CFIUS analysis was and why they decided to allow the deal as originally proposed, assuming they imposed no changes. Unfortunately, getting that information that would probably require a Freedom of Information Act request. Even if a FOIA request were filed, it would likely be redacted into oblivion in the name of "national security". The problem with government actions like this is that it requires trust that whatever is done, is best for the public interest.<br />
<br />
As the RPCA continuously argues, there is no reason to believe that service to an ideologically- or special interest-unfettered public interest is the goal here.[6] That attitude is grounded in a simple matter of a loss of trust in government and the two-party system that built it.[7] On its face, approval of the Smithfield transaction by the CFIUS arguably reflects a failure of the CFIUS to understand the context and implications of national security in the larger context of the life and death economic struggle we are in. All or most of that failure is due to a two-party political system that is focused on serving itself before serving the public interest.<br />
<br />
Footnotes: <br />
1. Link: http://reformparty.org/reform-party-of-california-commentary-business-on-an-uneven-playing-field/. <br />
2. Some will no doubt downplay this as a single incident with ramifications that cannot be extrapolated to anything more than this transaction alone. From that point of view, calling this a piece of a larger life and death struggle between two ideologies, state vs. private capitalism, may be considered melodramatic ignorance and/or cynicism grounded in something or another. That is one way to look at it. From the RPCA's point of view, nothing is overstated. This is based on the public record. Potential critics have a responsibility to prove their point. Until then, the facts and logic the RPCA applies to this situation and its extrapolation to a larger picture is reasonable and defensible.<br />
3. Links: Bloomberg story:
http://www.bloomberg.com/news/2013-07-10/smithfield-ceo-says-company-won-t-change-after-china-deal.html;
Senate Agriculture Committee video and witness statements;
http://www.ag.senate.gov/hearings/smithfield-and-beyond_examining-foreign-purchases-of-american-food-companies.
<br />
4. Wall Street Journal, Saturday, September 8, 2013, page B3, online at http://online.wsj.com/article/SB10001424127887324577304579058770192856300.html. Other media commentary: http://www.bloomberg.com/news/2013-09-06/smithfield-receives-u-s-regulator-approval-for-shuanghui-deal.html; http://dealbook.nytimes.com/2013/09/06/national-security-panel-approves-smithfield-sale-to-chinese-company/?_r=0.<br />
5. Link: http://www.treasury.gov/resource-center/international/Pages/Committee-on-Foreign-Investment-in-US.aspx.<br />
6. Link: http://reformparty.org/reform-party-of-california-essays-6-what-is-the-public-interest-and-how-is-it-best-served/.<br />
7. <span style="-webkit-text-stroke-width: 0px; background-color: white; color: #222222; display: inline !important; float: none; font-family: arial; font-size: x-small; font-style: normal; font-variant: normal; font-weight: normal; letter-spacing: normal; line-height: normal; orphans: auto; text-align: start; text-indent: 0px; text-transform: none; white-space: normal; widows: auto; word-spacing: 0px;">An excellent case in point on the loss of trust issue is what President Obama is facing. He is mired in trying to cajole the American public into supporting an attack on Syrian President Bashar al-Assad for using chemical weapons to kill his own people. There is an awful lot of skepticism going on outside the beltway. Why is that? Leaders of the two-party system need to step back and ask themselves why most of the public doesn't trust them or nearly anything they want to do (http://www.people-press.org/2013/01/31/majority-says-the-federal-government-threatens-their-personal-rights/; http://www.gallup.com/poll/5392/trust-government.aspx). The distrust is directed at both parties. Unfortunately, introspective navel gazing is not part of the behavioral toolkit the power elites access. For them, "leadership" is a mostly matter of putting high octane gas in the tank and smashing the bulldozer full speed ahead in service to the two-party system, not in service to the public interest. That bulldozer moves straight ahead regardless of who or what is in its destructive path. The public's loss of trust is no surprise to anyone, except maybe the power elite and blind ideologues.</span>Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-2091953795007300064.post-51566133202431693442013-09-05T10:03:00.000-07:002013-09-05T10:03:14.659-07:00Economic reality and political reality<div style="text-align: center;">
<b>Reform Party of California Commentary</b></div>
<div style="text-align: center;">
<b>Economic reality and political reality</b></div>
<br />
<div style="text-align: center;">
<b>Context</b></div>
<div style="text-align: left;">
Somewhere along the line, someone said that compound interest is the most powerful force in the universe.[1] That is an exaggeration, but it makes a point. Money subject to compounded interest increases exponentially over time.[2] That is good if you are saving money, can get a relatively good rate of return and have time. Since it is the flip side of lending money, a similar exponential growth phenomenon can apply to servicing debt obligations over time. There is evidence that until 2008 exponential U.S. debt increases were fueling U.S. economic activity over the last 38 years or so.[3] Relevant questions are whether our current economic situation is sustainable or not, and if not, how do we attain sustainability.</div>
<div style="text-align: left;">
<br /></div>
<div style="text-align: left;">
As usual, the situation is complicated. There are different ways to see economic issues and policy options. Ideologies give differing weights to various factors, with weight accorded to factors that fit the ideology. Facts are light and ideology is heavy. Liberals often argue one way and conservatives generally argue the opposite.[4] Partisan arguments are sometimes accompanied by little or nothing. Sometimes there is some data and substance, but that is usually accompanied by a lack of context and a lot of self-serving spin. The situation is usually very hard to judge. Opinion guided by ideology usually does little to shed light on what really works for any given set of circumstances. What works is what best serves the pubic interest[5], but that needs to be divined through the dense fog of the two party system.<br />
<br />
The reality of two-party politics has to be factored into consideration
of economic policy. As argued before, relations between the two
parties in congress are poisonous and prospects for anything other than
gridlock are not good.[6] What, if anything, will change that is unclear. Generally speaking, there are only few neutral voices that consistently try to pierce the dense fog of self-serving two-party political rhetoric. The situation is complicated and tainted by special interest demands backed by money and political self-interest.[7] That two-party context undermines the arguments that both the left and right make. Credible arguments and context have to come from elsewhere.<br />
<br />
A key question to keep in mind is whether the two parties are being honest with the American public about our economic situation and prospects for change. Are they focused on other concerns such as blaming each other for the situation we are in or are they communicating honestly?[8] There is evidence that neither of the two parties alone will be candid. The rhetoric and posturing suggests that at the very best, the two parties might talk straight to the public if, and only if, they can figure a way to equally share voter's anger once they understand the true nature of the situation we are in.[9] Neither party is willing to fall on the sword of candid honesty about what has to come if the situation is to change in any meaningful way. <br />
<br />
<div style="text-align: center;">
<b>Economic reality</b></div>
Credible people argue that to bring deficit spending under control, federal tax revenue needs to increase and and entitlement spending needs to decrease. For example, expert analysis says that to avoid going deeper into debt based on tax increases alone, the treasury would need to collect over $8 trillion in taxes annually, but that is not even remotely possible.[10] Part of the problem is an apparent inability of policy makers to face reality: "Neither the public nor policy makers will be able to fully understand
and deal with these issues unless the government publishes financial
statements that present the government's largest financial liabilities
in accordance with well-established norms in the private sector."[10] That sentiment reflects the well-known tactic of politicians who routinely use accounting tricks to disguise reality from the public. It is a popular political tactic that has been around for decades or longer.<br />
<br />
It would appear that the two parties cannot come to grips with what it is we are facing, much less have the courage to tell the public exactly what will probably happen to entitlement benefits, economic growth and our standard of living. Despite their apparent ignorance and shared culpability, they confidently blame each other and believe that the situation will get fixed if their own policies are put in place. From where the Reform Party of California (RPCA) sits, there are goods reason to believe that if either democratic or republican policy goals were fully implemented that the public interest would not be best served. The same is true if there were to be compromises between the left and the right on tax and spending issues. Both sides suffer from the same flaws the RPCA has repeatedly criticized, i.e., blind faith in ideology, corruption by special interest money and self-interest.[11]<br />
<br />
And, as the RPCA and others have pointed out, there is roughly $70-$85 trillion in unfunded liabilities that come due and payable over the next 30 years or so.[12] That is mostly for projected entitlement program spending and other obligations such as employee pensions. The current rhetoric and finger pointing simply ignores this issue and focuses on the on the books debt, which is about $12-$17 trillion depending on how you count it. To arrive at the lower $12 trillion figure, some analysts ignore the roughly $4.8 trillion the U.S. owes itself, e.g., via debt (special bonds) issued to the Social Security trust fund.[13] Either that $4.8 trillion somehow gets paid back over time, or benefits will need to be cut.<br />
<br />
<div style="text-align: center;">
<b>A republican plan</b></div>
In March of 2012, House budget committee chairman Paul Ryan (R-WI) released his "Path to Prosperity", which was a budget resolution for fiscal year 2013. It was very similar to a plan he released the year before in 2011. Ryan's 2012 budget proposal was a plan to reduce federal deficits and balance the budget in 10 years.[14] Unfortunately, the plan speaks in generalities. When it comes to what changes in spending means for individuals, there is little or no detail in Ryan's proposal. That makes it easy to criticize it as an attack on the middle and lower classes, which is how liberals tend to characterize it.<br />
<br />
Ryan's plan would reduce health care spending for the poor, and reduce spending for education,
infrastructure, research, public-safety, and/or low-income programs. Military spending and Social Security would remain largely intact. Ryan's plan claims that it will reduce deficits by $4.4 trillion over 10 years compared to what president Obama proposed in February 2012. Among other things, Ryan's plan would (i) restrain government growth by repealing the "Health Care Law", i.e., Obamacare, (ii) repair "a broken Medicaid system", (iii) save Medicare and (iv) make the corporate tax code more competitive. <br />
<br />
Liberals criticize Ryan's plan as pushing the burden and pain of reduced spending onto the
middle and lower classes while benefiting wealthy individuals and
entities. As mentioned above, there are no clear statements of exactly what effects Mr. Ryan's plan would have on ordinary people. The impact on Medicare of Ryan's plan to give people vouchers to buy insurance is unknown, but it is reasonable to guess that costs to individuals would go up. That would happen if voucher increases do not keep pace with insurance increases. A criticism of vouchers is that it negates traditional health care guarantees that Medicare provided in the past. Ryan's plan would repeal the Affordable Care Act ( the ACA or Obamacare) and reduce Medicaid spending with money going to states in block grants.<br />
<br />
One analysis estimated that repeal of the ACA could reduce enrollment by 17 <span class="highlight selected">million</span> and reduced Medicaid spending could cause up to about 14 million poor people to lose health care coverage.[15] Another analysis of a the earlier Ryan budget plan estimated that about 8-10 million low income people would lose access to food stamps.[16] The current plan presumably would have similar effects on access to food stamps. That analysis included this: "Last year (the 2011 proposal), Ryan called for extraordinary cuts in programs that serve as a
lifeline for our nation’s poorest and most vulnerable citizens, with at
least 62 percent of its budget cuts over ten years coming from programs
serving people of limited means. That approach violated a core
principle of the Simpson-Bowles fiscal commission - that deficit
reduction should not increase poverty or hardship - as well as basic
principles of fairness."[16]<br />
<br />
<div style="text-align: center;">
<b>The political reality</b> </div>
</div>
<div style="text-align: left;">
It is fair to say that Ryan's plan rejects universal health care coverage. Instead, it proposes significant federal health care spending reductions and decreases spending for other major safety net programs. In view of its failure to be clear about its effects, the Ryan plan is fairly characterized as mostly smoke and mirrors coming from a conservative ideologue focused on pushing an ideological agenda while, by being silent, hiding real projected impacts on ordinary Americans, especially the poor and middle classes.<br />
<br />
While the Ryan plan probably would improve the federal government's fiscal health over time, one should ask if (i) this way of doing it best serves the public interest and (ii) whether most Americans want to do it that way. The fact that Ryan's plan leaves so much unspoken argues that Mr. Ryan himself is not confident that the American public would accept his proposals if they were honestly and clearly explained. As far as the RPCA is concerned, if you cannot be honest and clear with the American people about the effects of your own major policy proposals on domestic spending programs, you are very likely not best serving the public interest. Instead, you are very likely hiding policy implications that you do not want the public to be generally aware of.<br />
<br />
<div style="text-align: center;">
<b>Conclusion </b></div>
Mr. Ryan's, budget plan is a smoke and mirrors political game that is routine in two-party politics. The point of the sleight of hand is to avoid blame for what Mr. Ryan and the Tea Party folks apparently want to do. However, actions like this are probably a major factor behind the loss of trust by many Americans in congress (not necessarily the federal government).[17] Like it or not, the political reality is probably this: Our situation probably is not sustainable. We are in a deep hole fiscally and it may take real pain for over a generation to get out of the mess. The coming disputes will be ideologically-grounded and center on whether our situation is sustainable, and if not, how to get us out of it.<br />
<br />
Both parties now in power got us into this situation and they will not be honest about our circumstances, prospects or policy options. Neither side is willing to accept blame.[6] Our problems, including this one, are fully bipartisan. That is something the RPCA has argued repeatedly. Working within the two-party system to fix things amounts to doing the same thing over and over in a desperate plea for change. That cannot and will not happen within the two-party system. Change has to come from the outside, which is something that president Obama himself clearly acknowledges.[18] The best, maybe only, way to facilitate that change is to walk away from the two parties and the broken system they built.</div>
<br />
<br />
<div style="text-align: left;">
</div>
<div style="text-align: center;">
<b>------------------------------------------</b> </div>
<div style="text-align: left;">
Separate commentaries on democratic budget plans and on the proposals from the Simpson-Bowles commission will follow this commentary.</div>
<div style="text-align: center;">
<b>-------------------------------------------</b> </div>
<br />
<div style="text-align: left;">
<b></b>Footnotes:</div>
1. Link: http://quoteinvestigator.com/2011/10/31/compound-interest/.<br />
<br />
2. Link: http://mathcentral.uregina.ca/beyond/articles/CompoundInterest/Money.html.<br />
<br />
3. Link:http://www.todayszaman.com/news-266015-power-of-compound-interest-as-applied-to-the-current-debt-crisis.html.<br />
<br />
4. For example, the endless minimum wage disputes with the never-changing arguments or logic: <a href="http://ivn.us/2013/08/14/why-we-should-raise-the-national-minimum-wage/?utm_source=house&utm_medium=email&utm_campaign=newsletter-min-2013-08-29">http://ivn.us/2013/08/14/why-we-should-raise-the-national-minimum-wage/?utm_source=house&utm_medium=email&utm_campaign=newsletter-min-2013-08-29</a>; <a href="http://ivn.us/2013/08/15/why-we-should-not-raise-the-national-minimum-wage/?utm_source=house&utm_medium=email&utm_campaign=newsletter-min-2013-08-29">http://ivn.us/2013/08/15/why-we-should-not-raise-the-national-minimum-wage/?utm_source=house&utm_medium=email&utm_campaign=newsletter-min-2013-08-29</a>.<br />
<br />
5. Link: http://reformparty.org/reform-party-of-california-essays-6-what-is-the-public-interest-and-how-is-it-best-served/. <br />
<br />
6. Link: http://reformparty.org/reform-party-of-california-commentary-colloquies-in-venom/.<br />
<br />
7. The adverse influence of ideology, special interest money and political self-interest have been argued before: http://reformparty.org/reform-party-of-california-essays-what-is-the-proper-size-and-scope-in-government/; http://reformparty.org/reform-party-of-california-essays-politics-and-special-interest-money/; http://reformparty.org/reform-party-of-california-essays-self-interest-vs-public-interest/.<br />
<br />
8. Link: http://www.factcheck.org/2013/03/the-sequester-blame-game/; http://www.cbsnews.com/8301-505123_162-57506201/national-debt-passes-$16-trillion-should-you-worry/; http://www.cbpp.org/cms/?fa=view&id=3490; http://www.globalpost.com/dispatch/news/regions/americas/united-states/110727/blaming-obama-the-debt-crisis; http://www.bloomberg.com/news/2011-07-26/republican-leaders-voted-for-drivers-of-u-s-debt-they-now-blame-on-obama.html.<br />
<br />
9. Link: http://www.examiner.com/article/shared-responsibility-and-shared-sacrifice-more-than-political-buzzwords. <br />
<br />
10. Link: http://online.wsj.com/article/SB10001424127887323353204578127374039087636.html.<br />
<br />
11. Links: http://reformparty.org/reform-party-of-california-essays-politics-and-special-interest-money/; http://reformparty.org/reform-party-of-california-essays-self-interest-vs-public-interest/; http://reformparty.org/reform-party-of-california-essays-what-is-the-proper-size-and-scope-in-government/.<br />
<br />
12. Links: http://reformparty.org/reform-party-of-california-essays-politics-and-special-interest-money/; http://qz.com/111454/the-us-government-has-about-70-trillion-in-off-balance-sheet-liabilities/.<br />
<br />
13. According to the trustees 2012 report (http://www.ssa.gov/pressoffice/pr/trustee12-pr.html), the Social Security trust fund (http://en.wikipedia.org/wiki/Social_Security_Trust_Fund) was owed $2.7 trillion at the end of 2011. <br />
<br />
14. A link to the 99 page plan for FY 2013 is here:http://budget.house.gov/uploadedfiles/pathtoprosperity2013.pdf . Comments
by the plans' author, House budget committee chairman Paul Ryan's
(R-WI, a Tea Party conservative) here:
http://online.wsj.com/article/SB10001424052748703806304576242612172357504.html.
Some media commentary on the plan are here:
http://www.reuters.com/article/2013/03/12/us-usa-fiscal-ryan-idUSBRE92B02E20130312;
http://www.usnews.com/opinion/articles/2013/03/12/right-and-left-slams-paul-ryans-path-to-prosperity-budget.
Paul Ryan's financial backers and media comments on his politics:
http://www.opensecrets.org/politicians/summary.php?cid=N00004357;
http://news.yahoo.com/tea-party-gets-man-ryan-vice-president-073903869.html.
Paul Ryan's comments on his own politics:
http://www.ontheissues.org/House/Paul_Ryan.htm/.<br />
<br />
15. Link: http://kaiserfamilyfoundation.files.wordpress.com/2013/01/8185-02.pdf; see page 2 of the analysis.<br />
<br />
16. Link: http://www.offthechartsblog.org/dont-forget-ryans-budget-of-last-year/.<br />
<br />
17. Link: http://www.people-press.org/2013/01/31/majority-says-the-federal-government-threatens-their-personal-rights/. <br />
<br />
18. Link: http://firstread.nbcnews.com/_news/2013/07/24/19656670-obama-agenda-change-comes-only-from-the-outside?lite; Mr. Obama's reference to change needing to come from the outside was intended to mean that average Americans would need to put pressure on both parties to do something or another. The RPCA believes that pressuring the two parties will not work. The pressure has to come literally from outside the whole status quo system. If you try to work form within the system, it will silently devour and kill your proposals. Special interests are never going to back down from defending their interests and no one should expect anything else. That is not a criticism of special interests. It is just a reflection of the reality that most (but not all) special interests are there to serve themselves first and foremost - it is a matter of human nature. That is why the RPCA consciously elevates service to the public interest over service to special interests (http://reformparty.org/reform-party-of-california-essays-6-what-is-the-public-interest-and-how-is-it-best-served/). If you stay within the two-party system, it will continue to function exactly as it was designed to function, i.e., to provide service to special interests, including both political parties, before service to the public interest. The choice is clear - status quo or change. You can stay with the two-party system and watch the failure continue to unfold over time or you can break away. Breaking away supports efforts to fix our problems without the rigid constraints the broken system imposes.<br />
<br />
<br />
<br />
<b>Unused content</b> <br />
From FN 13: Although off point, it is worth mention that according to the trustees
2012 report, trust fund administration costs were $6.4 billion in 2011.
That amounted to 0.9 percent of total expenditures. On its face, that
sounds like a very efficient operation. It isn't clear of this includes
all Social Security operational costs, but one can wonder what costs the
private sector would demand if it were to provide the same services the
Social Security trustees provide. The trustees report lack the context
needed to evaluate this point. That is standard for two-party politics.
Isolated facts are routinely tossed out with no context and there is no
way for average citizens to know what it means unless they go out and
find the context themselves. That takes a great deal of time. Very few
people have the either time or interest to do that. The full 252 page
2012 report is here:
http://www.socialsecurity.gov/OACT/TR/2012/tr2012.pdf, with some more
context at page 10. <br />
<br />
x. Link: http://budget.house.gov/uploadedfiles/pathtoprosperityfy2012.pdf; see pages 5 and 57. Ryan's 2011 plan presents itself as a choice between unleashed American
prosperity and the democratic plan of debt and stagnation. The plan says
that it "tackles the existential threat posed by rapidly growing
government and debt, applying the nation's timeless principles to this
generation's greatest challenge" and that it "ensures that the next
generation inherits a stronger, more prosperous America."[15] When put
that way, who could oppose it? <br />
<br />
16.
When it comes to "the nation's timeless principles", the report
(http://budget.house.gov/uploadedfiles/pathtoprosperityfy2012.pdf) at
page 4 says that such principles are "free enterprise and economic
liberty; limited government and spending restraint; traditional family
and community values; and a strong national defense<br />
<br />
Mr.
Ryan presented a similar path to progress for the 2012 fiscal year.
That document relied on "the nation's timeless principles", the report
(http://budget.house.gov/uploadedfiles/pathtoprosperityfy2012.pdf) at
page 4 says that such principles are "liberty, limited government, and
equality under the rule of law". How liberty and equality under the rule
of law applies to these budget issues is not clear. One person might
see Obamacare as an infringement of liberty, e.g., the evil individual
mandate, and another might see it as vindicating liberty, e.g., letting
the kids stay on the parent's insurance. These things are mostly in the
mind of the beholder, which often sees through the lens of ideology. A
search of the U.S. Constitution and Bill of Rights fails to reveal the
phrase "limited government" and anything that says that government has
to be limited other than to say that powers the central government does
not have are reserved to the states or the people
(http://www.archives.gov/exhibits/charters/constitution_transcript.html;
http://www.archives.gov/exhibits/charters/bill_of_rights_transcript.html;
the Bill of Rights 10th Amendment says this:"The powers not delegated
to the United States by the Constitution, nor
prohibited by it to the States, are reserved to the States respectively,
or to the people."). The 10th amendment is the best constitutional
argument there is for small government but it is hopelessly vague on
that point, e.g., it does not expressly say how big or powerful the
central government must be. It doesn't even say how big or powerful it
preferably should be. In other words, you can read into the 10th
amendment just about anything you want. As the RPCA has argued before,
the constitution is silent on any details about big vs. little
government and debates about the size and scope of government are mostly
ideological
(http://reformparty.org/reform-party-of-california-essays-what-is-the-proper-size-and-scope-in-government/).
Those ideological debates are not grounded in what the constitution
clearly requires or even prefers. The Founding Fathers were bitterly
divided on essentially everything, including, e.g., (i) whether the
central government should be strong, weak or in between, (ii) whether
the central government should be big, medium or small and (iii) whether
the president, congress or the courts should be the final decider of
what is constitutional and what isn't. It is impossible to objectively
know with any precision what "the nation's timeless principles" really
are. Those sacred principles reside subjectively in the mind of the
person invoking them, not the Constitution or Bill of Rights. Mr. Ryan's
resort to timeless principles is garden variety blind faith in
conservative ideology disconnected from reality and nothing more. It
carries very little persuasive weight.<br />
<br />Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-2091953795007300064.post-72512535481847877562013-08-19T17:55:00.000-07:002013-08-19T17:55:46.947-07:00RP small business policy paper<div style="text-align: center;">
<b>Reform Party policy paper</b></div>
<div style="text-align: center;">
<b>Small business policy goals - 1</b></div>
<div style="text-align: center;">
<b>Tax code reform</b></div>
<br />
<div style="text-align: center;">
<b>Introduction</b> </div>
This policy paper is the first in a series that the Reform Party anticipates publishing as part of its ongoing effort to articulate the party's initial positions in various policy areas. Initial policy goals and proposals will be followed by refinements, including inputs from various stakeholders or other interested sources. The Reform Party understands that articulating policies without inputs from various interested sources can lead to insufficient context and data to properly understand problems and issues that various interests face. The party has previously described some of the context and intellectual framework in which the party's efforts to articulate and refine its policy recommendations will occur.[1] Articulation of the Reform Party's context and intellectual framework is incomplete, but the effort continues. <br />
<br />
<div style="text-align: center;">
<b>The top ten small business problems and priorities</b> </div>
Independent businesses having fewer than 500 employees are considered to be "small businesses" under U.S. law. Firms having 20-499 employees accounted for 67 percent of new jobs that were created from 2009 until 2011.[2] Small businesses generally account for about 60-65% of new jobs and about 49% of U.S. private sector employment. According to the National Federation of Independent Business (NFIB), the top five problems that small businesses faced in 2012 were (1) the high cost of health care insurance, (2) uncertainty over economic conditions, (3) high fossil fuel costs, (4) uncertainty over government action and (5) unreasonable government regulation.[3] Fifty two percent of small business owners regarded health care costs as a critical problem. The next five top problems were high local, state and federal taxes, complex tax laws and frequent tax law changes.<br />
<br />
The NFIB's most recent survey (2102) of small business owners about the problems they face noted that assertions about problems that confront small business owners typically have little or no empirical evidence in support of the assertion.[3] That is often the case for politics in general. To blunt the impact of that problem, the Reform Party will engage in an ongoing effort to gather data to arrive at reasonable policy choices that serve both small business needs and the broader public interest.<br />
<br />
<div style="text-align: center;">
<b>Tax code reform: A rationale to simplify tax laws </b><br />
<b>and limit the frequency of tax law changes </b></div>
<br />
Given the scope and role of government, it is clear from the problems mentioned above that intelligent government action can do much to ameliorate some of these problems, while having less or no capacity to affect others. The NFIB recognizes this.[3] It is also clear that the cost to taxpayers of implementing some of these changes is marginal to low, while the cost for others is higher or not immediately apparent. For example, there is no obvious reason to believe that there must be a significant cost to simplify tax laws applicable to small businesses or to statutorily limit the frequency of changes to the main tax laws that affect small businesses. There could be costs to the U.S. treasury associated with changes to simplify complex laws that apply to small businesses. Those costs could be offset by, e.g., increased revenue from increased voluntary compliance and/or from increased tax law enforcement at the federal level and probably also at the state and local levels as well.[4]<br />
<br />
Policy aimed at tax code simplification and limiting changes should, to varying degrees, affect six of the ten problems mentioned above. Tax law simplification and limiting the frequency of changes after simplification would (i) reduce uncertainty over government action regarding tax laws (ii) reduce the frequency of tax law changes and (iii) begin to address unreasonable government
regulation, which includes some degree of unreasonable regulation via the tax code. It should be the case that simplifying laws and limiting the frequency of changes would reduce the cost of tax code compliance. If that effect is significant, it could be possible to reduce tax rates at the local, state and federal levels without causing a significant reduction in government revenues. That would be a win-win scenario.<br />
<br />
There are potential major payoffs from simplifying the tax code that could benefit small businesses. Simplifying the tax code could lead to a decrease in the net tax gap, which the Reform Party has estimated is running at about $420-$440 billion/year.[5] The net tax gap is the amount of taxes owed to the U.S. treasury but not collected. If tax code simplification reduces the net tax gap, <span style="font-family: "Times New Roman"; font-size: 12.0pt; mso-ansi-language: EN-US; mso-bidi-language: AR-SA; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-US;">then the federal debt could be ameliorated
somewhat</span>, e.g., an additional $210-$220 billion/year would flow into the treasury if the tax gap is reduced by half. Some of the added revenue could and should be used to reduce small business tax rates, further enhancing their competitiveness.Tax code reform should also be used to level the unfair playing field with our trade partners/competitors.[6] Doing that will require careful thought, but if done effectively, it will help to build a coherent framework for exporting and importing services and products. <br />
<br />
According to testimony in 2006 from the Treasury Inspector General for Tax Administration, tax code complexity cost the U.S. economy $140 billion/year and required about 3.5 billion hours for compliance.[7] If the tax compliance burden can be reduced, the savings in effort and resource could be available to enhance small business efficiency and profitability.<br />
<br />
Although making the tax code simpler may sound relatively easy in theory, that will not be the case in practice. Complexity arises from multiple sources, e.g., a lack of clarity and readability of existing law, use of the tax code to advance social and economic policies and complicated interactions between Federal tax laws and state tax laws, other Federal laws, international treaties and so on.<br />
<br />
Despite the complexity, tax code reform is important for more than just the burden that compliance imposes on small businesses. Tax law complexity tends to foster perceptions that the tax system is unfair. That perception, reasonable or not, leads to decreased voluntary tax compliance. In short, a complex tax code facilitates tax evasion.[8] In addition to a perception of unfairness, tax evasion is subsidized by honest taxpayers, which is in fact unfair. Tax code complexity also leads to economically inefficient activity incentivized by reduced tax payments. When possible, tax laws should incentivize or reward economic efficiency and penalize economic activity that is inefficient or occurs simply to exploit tax advantages.<br />
<br />
Simplifying the tax code will require a major, focused effort by congress. Individuals and entities that want to retain the code as is will oppose any meaningful reform effort that they perceive to be a threat to their tax breaks. The effort effort will likely require incremental changes over several years or a major single effort followed by fixes when problems with the new code become apparent. Many tax code changes would probably need to be phased in over a reasonable period of time to minimize damage to business plans that were implemented under existing tax law. Intelligent tax code reform will require skill, time and patience.<br />
<br />
Tax simplification will be complicated and require much effort, but the payoff should be worthwhile to both small businesses and all other tax paying individuals and entities. An initial goal of reducing by at least half the annual cost and effort to comply with tax law within 3 or 4 years may be a reasonable estimate of some of the benefits of reform. Desirable goals of reform should include identifying and preserving tax code provisions that effectively serve the public interest and minimizing provisions that do not, while finding provisions that generate win-win, or at least neutral, revenue and incentive scenarios for both small businesses and the public interest.<br />
<br />
<br />
<div style="text-align: center;">
<b>Congressional status</b> </div>
The Reform Party recently pointed out that there is a nascent effort underway in the U.S. senate to start a tax code reform project.[5] Breathing life into that effort will require pressure from outside the two-party system. It is highly likely that the Tea Party and most other republicans in the house will not cooperate if tax reform is revenue neutral or enhancing. The ideological goal there is to reduce federal revenues when they can. At present, the house is staunchly opposed to revenue enhancing tax reform on ideological grounds. Senate majority leader Harry Reid has told senate finance committee chair Max Baucus (D-MT) not to bother with tax code reform unless it significantly increases revenues, putting the idea of reform at risk.[9] Reid's comment virtually guarantees gridlock on this issue given conservative intransigence. Senator Baucus is looking for public support as a way to generate some momentum for reform and he sorely needs it. Given the politics, congress will not act unless forced from outside the two-party system.<br />
<br />
<div style="text-align: center;">
<b>Next steps</b></div>
The Reform Party has urged the public to support the senate's tax reform effort. The party will approach small business and other interested organizations to explore ways to collaborate to create pressure on congress and to generate specific tax code proposals for congress to consider. Given our unacceptable and unworkable tax code, competing overhaul options should be considered, e.g., various flat tax and/or value-added tax schemes. Because conventional two-party thinking and politics got us here, there is no compelling reason to believe that it can get us out. Competing options must stand or fall on the merits or reform will be weak and ineffective.<br />
<br />
As mentioned above, interests who benefit from the status quo will oppose threats to their tax breaks or revenue streams. It is unreasonable to expect interests who benefit from economically
ineffective tax breaks or benefits of any kind to simply allow their
breaks or benefits to go. Opposition will be well-funded, sustained and, of course, go on behind closed doors and out of public sight. To blunt opposition, intense public pressure on congress must be sustained. This policy paper continues the Reform Party's effort to generate pressure on an unresponsive two-party system.<br />
<br />
Footnotes:<br />
1. Links to context and intellectual framework: <a href="http://reformparty.org/reform-party-of-california-essays-6-what-is-the-public-interest-and-how-is-it-best-served/">http://reformparty.org/reform-party-of-california-essays-6-what-is-the-public-interest-and-how-is-it-best-served/</a>; <a href="http://reformparty.org/reform-party-of-california-essays-self-interest-vs-public-interest/">http://reformparty.org/reform-party-of-california-essays-self-interest-vs-public-interest/</a>; <a href="http://reformparty.org/reform-party-of-california-essays-politics-and-special-interest-money/">http://reformparty.org/reform-party-of-california-essays-politics-and-special-interest-money/</a>.<br />
2. Link: <a href="http://www.sba.gov/sites/default/files/FAQ_Sept_2012.pdf">http://www.sba.gov/sites/default/files/FAQ_Sept_2012.pdf</a>. <br />
3. Links: <span style="font-family: Arial,Helvetica,sans-serif; font-size: 10pt;"><a href="http://www.nfib.com/research-foundation/priorities" target="_blank">http://www.nfib.com/research-<wbr></wbr>foundation/priorities</a></span>; <a href="http://www.nfib.com/Portals/0/PDF/AllUsers/research/studies/small-business-problems-priorities-2012-nfib.pdf">http://www.nfib.com/Portals/0/PDF/AllUsers/research/studies/small-business-problems-priorities-2012-nfib.pdf</a>.<br />
4. Links: <a href="http://reformparty.org/the-tax-gap/">http://reformparty.org/the-tax-gap/</a>; <a href="http://www.gao.gov/products/GAO-12-651T">http://www.gao.gov/products/GAO-12-651T</a>; <a href="https://www.ftb.ca.gov/Tax_Gap/index.shtml">https://www.ftb.ca.gov/Tax_Gap/index.shtml</a>; <a href="http://www.wisconsinsfuture.org/publications_pdfs/tax/TAX_GAPApril_2010.pdf">http://www.wisconsinsfuture.org/publications_pdfs/tax/TAX_GAPApril_2010.pdf</a>.<br />
5. Link: <a href="http://reformparty.org/the-tax-gap/">http://reformparty.org/the-tax-gap/</a>.<br />
6. Link: <a href="http://reformparty.org/reform-party-of-california-commentary-business-on-an-uneven-playing-field/">http://reformparty.org/reform-party-of-california-commentary-business-on-an-uneven-playing-field/</a>.<br />
7. Link: <a href="http://www.treasury.gov/tigta/congress/congress_07262006.pdf">http://www.treasury.gov/tigta/congress/congress_07262006.pdf</a>, see page 13 of the testimony.<br />
8. Tax evasion as used here means the failure or refusal of individuals or entities to pay the taxes they owe, e.g., by putting unreported income in secret Swiss bank accounts. Tax evasion is illegal. By contrast, tax avoidance is taking steps to pay the lowest amount of tax allowed by law, e.g., forming an offshore company in a low-tax country. Tax avoidance is legal. Some members of congress occasionally complain that some tax avoidance schemes are unintended consequences of tax laws and/or flout the <span style="font-family: "Times New Roman"; font-size: 12.0pt; mso-ansi-language: EN-US; mso-bidi-language: AR-SA; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-US;">“spirit”</span> of a law, whatever that means. The Reform Party has no sympathy for those folks in congress or their complaints. The tax laws are the purview of congress. If congress doesn't like things the way they are, then congress should change it. The Reform Party sees nothing wrong with any individual or entity engaging in aggressive tax avoidance, even if it means that hundreds of billions or, more likely, trillions of tax dollars unintentionally did not flow into the U.S. treasury over the years. That situation is a failing of two-party politics and, as the Reform Party has argued before, it is mostly a consequence tax code complexity and/or the preferred payback mechanism for political contributions from wealthy donors (<a href="http://reformparty.org/reform-party-of-california-essays-politics-and-special-interest-money/">http://reformparty.org/reform-party-of-california-essays-politics-and-special-interest-money/</a>).<br />
9. Links: <a href="http://www.politico.com/story/2013/07/max-baucus-tax-reform-94894.html">http://www.politico.com/story/2013/07/max-baucus-tax-reform-94894.html</a>; <a href="http://thehill.com/blogs/on-the-money/domestic-taxes/313557-reid-schumer-senate-budget-should-be-framework-for-tax-reform">http://thehill.com/blogs/on-the-money/domestic-taxes/313557-reid-schumer-senate-budget-should-be-framework-for-tax-reform</a>. <br />
<br />
CATO: Tax gap is a mirage (http://www.cato.org/sites/cato.org/files/pubs/pdf/tbb_0306-44.pdf) citing http://www.treasury.gov/tigta/congress/congress_07262006.pdf<br />
<br />
http://www.nfib.com/advocacy/item/cmsid/58652<br />
http://www.nfib.com/advocacy/government-and-regulatory-reform<br />
http://www.nfib.com/advocacy/item/cmsid/51153<br />
http://www.sba.gov/advocacy<br />
<br />
http://www.sba.gov/advocacy/847<br />
<br />
http://www.smallbusinessadvocacycouncil.org/<br />
http://www.smallbusinessadvocacycouncil.org/advocacy-category/policies-and-positions<br />
<br />
http://www.smallbusinesscalifornia.org/<br />
<br />
http://www.aboutcsbe.org/ - small businesses hit by climate change want to do something about climate change; what do the others want?<br />
<br />
<br />
advocacy:<br />
link: <a href="http://kstreetcafe.com/5-things-advocacy-organizations-can-learn-from-small-businesses/#ixzz2awFzH9NF" style="color: #003399;">http://kstreetcafe.com/5-things-advocacy-organizations-can-learn-from-small-businesses/#ixzz2awFzH9NF</a> <br />
Facts are boring. People support campaigns with good, relatable stories; few people are driven to action
by a list of facts and figures. To be impactful, you must make it
personal.Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-2091953795007300064.post-5838799415797295132013-08-17T15:16:00.001-07:002013-09-10T14:53:23.207-07:00RP commentary - Christie & republican pragmatismUnknownnoreply@blogger.com0tag:blogger.com,1999:blog-2091953795007300064.post-74779581873771245502013-07-15T13:00:00.000-07:002013-07-15T13:00:05.558-07:00Smithfield buyout by China Co.<div style="text-align: center;">
<b>Reform Party of California Commentary</b></div>
<div style="text-align: center;">
<b>Business on an uneven playing field</b></div>
<br />
China's food supplier, Shuanghui International Ltd., is attempting to buy Smithfield Foods, Inc., the word's biggest pork supplier.[1] If the transaction does go through, it would be the biggest Chinese buyout of a U.S. company. This transaction shines some light on several aspects of how America does business with the rest of the world. Smithfield portrays the transaction as a great win-win for the U.S. and China. The Reform Party isn't so sure about that characterization.<br />
<br />
<div style="text-align: center;">
<b>Intellectual Property</b></div>
In the course of becoming the largest U.S. producer, Smithfield developed efficient methods to produce pork. It is reasonable to assume that once Smithfield is bought, its technology will flow to China and used to increase efficiency. Increasing competitiveness is the point of China's push to raise its standard of living and grow its economy. Presumably, that increased efficiency will eventually be used to directly compete with U.S. and other pork suppliers. Smithfield's CEO, C. Larry Pope assured senators on the senate Agriculture Committee that such a thing would not occur, but the basis for that assurance is unclear. By contrast, China's record of relentless, focused economic competition is well understood.<br />
<br />
<div style="text-align: center;">
<b>Good intentions are irrelevant</b> </div>
Mr. Pope said much in defense of the transaction, including this: "Let
me be clear: Shuanghui intends to retain Smithfield’s management team,
its plants and its employees." Obviously, what Shuanghui "intends" is
irrelevant. The only thing that counts is the written terms of the buyout. Even if the buyout specifies that Smithfield management will never be replaced
and that they have full autonomy to continue operations as they wish,
which is undoubtedly not the case, the day will nonetheless come when that management is gone and whoever
new comes in will report to Shuanghui. That new management absolutely will do what Shuanghui
demands or they won't be part of the management team. That is just basic
common sense. Irrelevant fluff statements like Mr. Pope's simply
provide no logical basis for comfort that this won't lead to ferocious
competition against American farmers and companies. <br />
<br />
<div style="text-align: center;">
<b>Unfair playing field</b></div>
To their credit, at least some of the senators on the Agriculture Committee expressed frustration with the proposed sale. Their concern is that Chinese companies, often partially or wholly Chinese government owned, can buy Smithfield but Smithfield. By contrast, the American government could never come in and buy Shuanghui. The Chinese government would never permit that. That is the simple reality of the unfair playing field here. This game is rigged.<br />
<br />
<div style="text-align: center;">
<b>State capitalism vs. private capitalism</b></div>
What this represents is just part of a much bigger competition. The Reform Party sees this as a fight to the death between two ideologies, state capitalism versus private capitalism. This fight is not a matter of a military shooting war. The Chinese government is too smart for that. China is implementing an intelligent, shrewd and focused strategy of state capitalism against the West's unfocused, self-centered and often chaotic, internecine capitalism. The fight is global and Smithfield is just a tiny part. It is also useful to note for context, that it is easy to argue that the Chinese are now more capitalistic than the Americans, Europeans or Japanese. There is plenty of evidence that supports that assertion. This is not just about pork. It is about everything. <br />
<br />
What the Iraqi oil minister recently said about the Chinese in relation to Western firms (Exxon-Mobile) in attaining access to Iraqi oil gets right to the point. “We don’t have any problems with them,” said Abdul Mahdi al-Meedi, an
Iraqi Oil Ministry official who handles contracts with foreign oil
companies. “They are very cooperative. There’s a big difference, the
Chinese companies are state companies, while Exxon or BP or Shell are
different.”[2] The New York Times article went on to say this: “The Chinese are very simple people,” said an Iraqi Oil Ministry
official who spoke on the condition of anonymity because he did not have
permission to speak to the news media. “They are practical people. They
don’t have anything to do with politics or religion. They just work and
eat and sleep.”<br />
<br />
In other words, Chinese companies don't have shareholder lawsuits, quarterly earning goals and other impediments that Western companies have to deal with. Western companies compete with each other while the Chinese government ruthlessly supports its companies, e.g., by giving them technology that we are dumb enough to let them steal. U.S. companies are so self-centered that they will not even cooperate with the U.S. government efforts to help them defend themselves against cybertheft.<br />
<br />
The concern for U.S. companies is that if the U.S. public comes to know how badly they have been hacked and how much has been stolen, there will be bad P.R. and shareholder lawsuits.[3] There isn't even any good way to assess just how much has been lost to China, Russia and other hacker countries and thieves, but it could easily amount to trillions of dollars. To the extent that politics can affect things, the situation is the epitome of incompetence and shortsightedness.<br />
<br />
<div style="text-align: center;">
<b>Back to the hams</b></div>
When one puts the proposed Smithfield acquisition into that context, it is easy to see how it fits, even though it is just a small piece of the competition. It is also easy to see how naive U.S. executives like Mr. Pope are when it comes to dealing with China. It is also easy to see how inept the U.S. congress is in requiring fair competition. The failure to two-party politics is glaring in the context of trade with some of our partner-competitors. This is not an argument that all of our trade partners compete like this. However, when it comes to defending the American standard of living and the American economy, two-party politics is not just failing. It is betraying us all.<br />
<br />
<br />
Footnotes: <br />
1. Bloomberg story: http://www.bloomberg.com/news/2013-07-10/smithfield-ceo-says-company-won-t-change-after-china-deal.html; Senate Agriculture Committee video and witness statements; http://www.ag.senate.gov/hearings/smithfield-and-beyond_examining-foreign-purchases-of-american-food-companies <br />
2. New York Times, June 3, 2013; http://www.nytimes.com/2013/06/03/world/middleeast/china-reaps-biggest-benefits-of-iraq-oil-boom.html?_r=1&.<br />
3. China hacked multiple U.S. weapons systems: http://www.usnews.com/news/newsgram/articles/2013/05/28/report-china-hacked-costly-us-missile-defense-weapon-designs; Industrial espionage; http://www.npr.org/2013/05/07/181668369/u-s-turns-up-heat-on-costly-commercial-cyber-theft-in-china; Up to 90% of U.S. companies have been hacked: http://ftijournal.com/uploads/images/FTI7_blocking_the_breach.pdf; U.S. companies suppress information about hacking: http://www.marketplace.org/topics/tech/mums-word-us-businesses-hacked-china.Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-2091953795007300064.post-892931837086409612013-07-15T12:59:00.000-07:002013-07-15T13:00:57.511-07:00Unaccountability at the DoD<br />
<div style="text-align: center;">
<b>Reform Party of California Commentary</b></div>
<div style="text-align: center;">
<b>DoD's Unacceptable Accounting Practices</b> </div>
<b></b><br />
<div style="text-align: center;">
</div>
On September 10, 2001 defense secretary Donald Rumsfeld said that the Department of Defense (DoD) was unable to account for $2.3 trillion tax dollars. Of course, the next day was September 11, 2001, better known as 9/11. Whatever fallout might otherwise have come from secretary Rumsfeld's amazing comment simply vanished in the ensuing chaos.<br />
<br />
Reuters investigative journalist Scot Paltrow picked this "lost" issue up. Reuters is in the midst of publishing a series of his reports on how DoD deals with its accounting and budgets.[1] Although DoD itself says its practices are clean and accurate, the agency is not audit ready and probably won't be for quite some time. Paltrow's research suggests that DoD errors in paying personnel is common, despite DoD's denials. In 2011, former defense Secretary Panetta issued a directive requiring DoD to become audit ready by 2014.[2] However, given the circumstances that is unlikely to happen. <br />
<br />
Not surprisingly, there are some personal tragedies and outrages that come with the mess. Some of our soldiers were not paid what they were owed. That sometimes forced them to sell personal belongings and get food from charities. When confronted with questions about why pay was being withheld, DoD personnel sometimes could not answer because they did not know and apparently did not have any way to find out. <br />
<br />
Part or much of the problem seems to stem from (i) DoD's accounting technology and (ii) the fact that working on things like accounting and budget control do not advance anyone's military career. DoD's Defense and Accounting Service (DFAS; http://www.dfas.mil/) is responsible for accounting and budgets, but they are using equipment that is over 40 years old, including ancient IBM mainframes. In 2010, DoD scrapped a 10 year effort to modernize it's accounting procedures. By the time DoD abandoned its attempt to upgrade its systems, it had spent $1 billion. What benefit to taxpayers or the DoD, if any, came from that $1 billion effort is unclear. <br />
<br />
DoD's assertions that it knows what it is doing are simply hard to
accept, given the scope of the problem and how long it has existed.
Since there are no formal audit data, no one knows the real situation. Maybe that is intentional and maybe it isn't. Regardless, Rumsfeld's $2.3 trillion estimate came in 2001. Since then a whole lot of money has passed through the DoD. Given that, it is reasonable to guess that the amount unaccounted for in 2013 is about $3-4 trillion. Of that, $100-200 billion could have been stolen. No one knows the amounts because there have been no audits. As mentioned above, there have been no audits because the DoD cannot be audited. <br />
<br />
<div style="text-align: center;">
<b>So what?</b> </div>
It is reasonable to ask why anyone should care about a story like this. After all, there are more important issues to think about. The Reform Party does not speak for the Democratic or Republican Parties. However speaking for itself, $3 trillion is far too much to be left unaccounted for. And, the Reform Party does not consider a potential theft of $100-200 billion to be insignificant. The Reform Party does not even consider either the $1 billion lost in the upgrade attempt or the inept treatment of our veterans to be insignificant.<br />
<br />
This situation has existed for years and presumably it is worse now than it was when secretary Rumsfeld tried to raise it in 2001. In Reform Party opinion, that represents a series of failure by two-party politics, including the politicians from both parties who have been involved. It represents a major failure by the executive branch to manage its operations. In that time there have been democratic and republican presidents. It also represents failure by a congress that always was overwhelmingly composed of democratic and republican politicians. Those politicians in congress failed in their duty to oversee DoD operations. Maybe the failure arose from congress' perception that the problem was not worth their time or effort. Whatever the reasons, they all failed.<br />
<br />
It is also fair to characterize this as a failure to two-party politics. If two-party politics had been more focused on service to the public interest than on service to special interests, then the situation may never have arisen. Of course, there is no way to know that. According to Paltrow, some special interests both inside the DoD and outside of government were vested in the failed status quo. If that is true and self-interests really were a significant factor in creating and maintaining this mess, then it is more evidence of how profoundly broken two-party politics really is. <br />
<br />
The "So what?" in this is simple. If you want more fine service like this from the democratic and republican parties, simply keep voting for their politicians and sending them money. You will continue to get the fine quality service that gave us a DoD that cannot be audited and that sometimes treats our veterans like garbage. If, on the other hand, you suspect that something might be amiss, the only option is to walk away from the two parties. As argued elsewhere [3] there are several reason why they cannot and will not change. <br />
<br />
<br />
<br />
<br />
Footnotes: <br />
1. Link to Scot Paltrow's first Reuters story: http://www.reuters.com/article/2013/07/09/us-usa-pentagon-payerrors-special-report-idUSBRE96818I20130709; Julie Mason's interview with Paltrow: https://soundcloud.com/juliemasonpolitics/scott-paultrow-from-reuters.<br />
2. Link to Panetta's directive: http://www.defense.gov/News/NewsArticle.aspx?ID=116014. <br />
3. Self-interest and politics: http://reformparty.org/reform-party-of-california-essays-self-interest-vs-public-interest/; ideology and politics: http://reformparty.org/reform-party-of-california-essays-what-is-the-proper-size-and-scope-in-government/.Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-2091953795007300064.post-39133804450581776312013-06-23T09:34:00.002-07:002013-06-23T09:34:12.676-07:00comments on PR post on money & ethicsEthics and Money in Politics <br />
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At their core, <strike>all the</strike> <u>many</u> problems <strike>in</strike> <u>this</u> nation <u>faces</u> <strike>are ethical</strike> <u>have an ethical component.</u> <u>As argued before (http://reformparty.tumblr.com/post/53132458418/reform-party-of-california-essays-self-interest), the Reform Party believes that self-interest is a normal trait behind many</u> selfish actions by those in office. Due to this
selfishness, governmental powers are <u>not</u> being used <strike>not</strike> <u>primarily</u> for the public good,
but <u>instead</u> for personal gain by elected and appointed officials.<br />
<br />
The primary symptom of this selfishness is that career politicians in
the two established parties are preoccupied with giving favors to
special interests in return for donations, and spending needlessly on
wasteful expenditures in return for votes. For the two established
parties, this favor trading is business as usual. This corrupt system
makes an officeholder beholden to his/her donors, and special interests,
<strike>and</strike> <u>but</u> not the people as a whole. <u>In essence, the balance between self-interest and service to the public interest is often tipped too far in favor of self-interest.</u><br />
<br />
The Weinergate sexting scandal aside, Anthony Wiener is the epitome
of this kind of dishonest politician, and serves as the prime example of
this kind of politics. According to disclosure forms for the 2008
campaign season, fifty percent of his disclosed donors were political
action committees, and another forty one percent were large donors. <strike>His</strike> <u>To an large extent, his</u> voting record <strike>corrugates</strike> <u>coincides</u> with<u>, or serves,</u> the interests of his donors, and the needs
of the people have been <u>downplayed or</u> swept aside. <u>The net effect of that kind of career is more service to special interests, including Mr. Weiner himself, than service to the public interest.</u><br />
<br />
This can be seen by his votes on trade. Since the start of free trade
agreements with NAFTA in 1992, America’s trade deficit rose from 39.2
billion dollars to 559.8 billion in 2011, or an increase of over 1428
percent. The increase in this deficit was caused <u>to a significant extent (or this: among other things)<b>*</b></u> by the outsourcing of
jobs, and the exploitation of unregulated environments and labor
overseas.<br />
<br />
{<b>* Comments/question:</b> be very careful with statements like this - they can be credibility killers: the causes of our trade deficit are complex and include increased spending for oil; oil alone subtracts hundreds of billions per year from our balance of trade, but this is changing as domestic oil production cuts into import levels - see, e.g., http://online.wsj.com/article/BT-CO-20130530-711531.html and <a href="http://research.nordeamarkets.com/en/2012/08/20/us-oil-boom-could-slash-us-oil-import-bill-and-strengthen-usd/">http://research.nordeamarkets.com/en/2012/08/20/us-oil-boom-could-slash-us-oil-import-bill-and-strengthen-usd/</a>; do you have data showing what factors contribute what portion of the trade deficit?}<br />
<br />
Twice he voted in favor of free trade. On June 9<sup>th</sup>, 2005
Anthony Wiener cast a vote against withdrawing from the WTO, the primary
international free trade agreement, and On November 8<sup>th</sup>,
2007, Anthony Wiener cast a vote that reduced trade barriers with Peru.
This correlates with the interests of several large international
trading companies that donated to his campaign, like IBE Trade Corp, a
company that imports fertilizer made in Russia and Ukraine.<u><b>*</b></u><br />
<br />
{<b>* Comments/question:</b> be very careful with statements in this paragraph - are free trade agreements OK if they are (i) win-win or (ii) win for the U.S. and neutral or negative for the trade partner? What is acceptable? I suspect that Weiner is doing what most politicians routinely do, namely do self-service at the expense of public service. The toughest thing about this type of criticism is finding the data to support it. Doing that is tedious and time consuming. Public opinion now seems to oppose free trade agreements (<a href="http://www.citizen.org/documents/election-2012-polling-memo.pdf">http://www.citizen.org/documents/election-2012-polling-memo.pdf</a>). I do not know where the majority of expert opinion stands. This paragraph implies that WTO membership is bad. Do you know the net cost/benefits of WTO membership - how good or bad is it according to current data? Maybe it was bad at one time but is now neutral or good. Do you know the ramifications of withdrawal from the WTO, e.g., what economic infrastructure, if any, is now in place that would be damaged or destroyed if we do withdraw from the WTO? The cost-benefit analyses here are blindingly complex and full of spin on many sides. I suspect that the bottom line is that free trade agreements are unacceptably unfair to the U.S., but that doesn't mean that better agreement terms can't be negotiated.}<br />
<br />
Now that he is attempting a political comeback, and running for Mayor
of New York, it is possible to see where his current proposals benefit
long time donors to his campaigns. One of his proposals stands out as questionable more than the others.
The first is to <strike>Move</strike> <u>move</u> affordable builders to the front of the
bureaucratic line. On the surface, it seems like a worthy proposal, but <u>after</u> digging deeper the truth emerges.<br />
<br />
The system to get construction projects approved in New York City is
constipated, and needs some changes. <strike>This kind of</strike> <u>Unfortunately, Weiner's</u> proposal <strike>however</strike> <u>simply</u> favors residential builders over all others, and does nothing to fix the
<strike>issue</strike> <u>underlying problems</u>. By favoring residential projects, it pushes back commercial and
industrial projects that are necessary for businesses, and increases
time and costs for these projects.<br />
<br />
A better proposal would be to streamline the regulations, and work to
decrease unnecessary bureaucratic hurdles. This kind of reform would
help all kinds of development without putting one type of construction
project over another.<br />
<br />
“Follow the money,” has been a mantra of investigators since the
1970s. If one does follow the money, it is possible to see that a
majority of Anthony Weiner’s top contributors are real estate developers
and realtors groups like the National Realtors Association, and his
proposal benefits their pocket books by reducing their wait times by
putting them first.<b><u>*</u></b><br />
<br />
{<b>*</b> Questions: What is more lucrative, residential or commercial development? What does New York need in view of its current circumstances, more of everything?}<br />
<br />
The solution to ethical problems in government is honesty.<b><u>*</u></b> This is
because an honest person will vote in a way that benefits <strike>his
constitutions</strike> <u>both the broader public interest </u>and the people he represents. If they were honest about
the needs of the <u>public interest</u> <strike>people</strike>, instead of lying<b><u>**</u></b> for political gain, most of
the wasteful spending and political bribery would not go on.<br />
<br />
{<b>*</b> comment: I suspect that the solution to ethical issues in government is realignment of incentives by rewarding service to the public interest before service to special interests - this is pure capitalism, but is is very effective; remember, the three initial essays focused on (1) ideology, which distorts reality, (2) special interest money, which also distorts reality and corrupts politics and (3) self-interest, also a reality distorter and politics corrupter; look at defense secretary Chuck Hagel's comment quoted in essay 2 on special interest money in politics: “There’s no shame anymore. We’ve blown past the ethical standards, we now play on the edge of legal standards.” - in other words, we are beyond ethics, which are extinct in politics for the most part - the last line of defense of the public interest is the literal limits that law imposes; the intense pressure on politicians to harvest cash from special interests makes ethics irrelevant}<br />
{<b>**</b> comment: it isn't just a matter of lying; ideologues often really and sincerely believe that what they do truly serves their constituents and/or the broader public interest; from that point of view, there is no lying at all; and, when large amounts of money are involved, the cash can literally alter the both the politicians and the special interests donor's perception of reality}<br />
<br />
This kind of reform starts at the ballot. To reform government
American voters must vote out the established parties, and end business
as usual.<br />
</div>
</div>
</div>
Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-2091953795007300064.post-42677285961222598922013-06-22T09:58:00.003-07:002013-06-22T09:58:45.448-07:00<div style="text-align: center;">
<b>Reform Party Commentaries</b></div>
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<b></b><br />
<br />
On June 13, 2013, Gallup released its annual poll (http://www.gallup.com/poll/163052/americans-confidence-congress-falls-lowest-record.aspx) asking Americans about their confidence in various institutions. The data was collected in the first week of June. People expressing "quite a lot" or "a great deal" of faith in congress dropped from 13% in 2012 to 10% in 2013, with the remaining 90% expressing either "some" (38%) or "very little" (52%) confidence in the institution. That is the lowest level of confidence that Gallup has ever recorded for any of the societal institutions it asks about each year.<br />
<br />
For context, it is worth considering this: What issues or institutions related to politics gets what is, in essence, a 90% disapproval rate from the public? Things like pedophilia, murder and unprovoked nuclear attacks on cities in non-combatant or peaceful countries probably elicit that kind of disapproval, but not much else unless it is similarly extreme. For most issues, public opinion is highly polarized and highly fragmented. That fragmentation does not seem to apply here. If you accept that perception of reality as basically true, then this degree of disapproval is truly remarkable.<br />
<br />
<div style="text-align: center;">
<b>Inevitable or not?</b></div>
The situation is regrettable but maybe at least somewhat inevitable. As Gallup points out, some of the loss of confidence stems from the split control between the two parties. However, that doesn't fully explain these awful numbers. The Reform Party believes that there is a significant degree of inevitability in the situation, given the manner in which two-party politics is routinely conducted. As the Reform Party has argued elsewhere, spin is the work product that dominates both parties (http://reformparty.tumblr.com/post/53505876521/reform-party-of-california-essays-political). On top of that credibility-killing aspect, both parties or their politicians are co-opted and/or corrupted by, e.g., blinding ideology (http://reformparty.tumblr.com/post/52857310148/reform-party-of-california-essays-what-is-the), special interest money (http://reformparty.tumblr.com/post/53012960908/reform-party-of-california-essays-politics-and) and self-interest (http://reformparty.tumblr.com/post/53132458418/reform-party-of-california-essays-self-interest).<br />
<br />
No wonder the vast majority of the public has lost faith in congress. Unfortunately, congress is a critically important political institution that needs to function to serve the public interest. At present, it is broken and looks to stay that way for some time. The two-party system always claims that factors such as special interest money have no ill-effects and that it is only there to serve the public interest. If that were true, then why is the public's confidence so low?<br />
<br />
It is true that, if you are good at spin, you can fool most of the people some of the time. Despite that, if Gallup's data is correct, it looks like endless status quo spin is finally losing some of its power to persuade. It is about time.Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-2091953795007300064.post-6262020573948012242013-04-15T15:15:00.001-07:002013-04-20T09:15:41.263-07:00Essay 3<div style="text-align: center;">
<b>Reform Party of California Essays - 3</b></div>
<div style="text-align: center;">
<b>Political self-interest vs. the public interest </b></div>
<br />
<br />
Politics is complicated. Nonetheless a few factors tend to exert a consistent, significant negative influence on many or most political issues and outcomes. <a href="http://reformpartyca.org/reform-party-of-california-essays-1-understanding-the-party-and-its-members/">One factor is</a> ideology and another is the influence of special interest money. This essay begins to consider the third main factor, which is the natural human trait of self-interest and how that affects the public interest. Collectively, these three factors or their absence, alone or together, are primarily responsible for what goes well and what doesn't. To a large extent they also explain why.<br />
<br />
<div style="text-align: center;">
<b>Context</b></div>
Being self-interested is a normal human trait. It can make sense to be self-interested in many contexts, including politics. <a href="http://www.issr.ucla.edu/sears/pubs/A101.pdf">The framers of the constitution</a> were aware of this and they struggled with the balance between new concepts of self-interests and older concepts of civic virtue to promote the public interest. There is <a href="http://en.wikipedia.org/wiki/Public_choice">modern research</a> dedicated to trying to understand the reality and impact of political self-interest on politics. <a href="http://en.wikipedia.org/wiki/Rent-seeking#Possible_consequences">The stakes can be high </a>when self-interest is not acknowledged and addressed. Although the existence of political self-interest is essentially never mentioned in modern politics, evidence of its scope and power is overwhelming.<br />
<br />
For example, a 1999 study of <a href="http://lawlibrary.unm.edu/nrj/39/2/04_lyons_political.pdf">political self-interest in environmental law</a> finds that elected officeholders often do have an incentive to respond to constituencies who support environmental protection laws. Despite the incentive to serve the public will, the study concludes that for the most part those officeholders typically respond with environmental pork barreling and symbolism. That can be adequate adequate to satisfy the politician's needs, e.g., public approval and votes in the next election. The reasons for this soft response are complicated and nuanced but they include misplaced incentives for politicians. Specifically, our political system does not always provide incentives that politicians need to support efficient environmental policies. Incentives drive behavior[1] and if incentives are aligned to support inefficient policies, inefficiency is what tends to result. In short, political self-interest does not always align with the public interest. That assumes that efficient policies is in the public interest. The Reform Party of California (RPCA) believes that there are more occasions when more efficiency is clearly warranted.<br />
<br />
It is worth mention that on rare occasions, a politician does come out and simply admit that self-interest can or does trump service to the public interest. Typically, those admissions come from politicians who are out of power, e.g., termed out of office, defeated in reelection or not running for reelection. Under those circumstances, they have less to lose by coming clean. One example comes from former California democratic legislative leader Willie Brown. After being termed out of office, <a href="http://www.sfgate.com/bayarea/article/Homeland-security-chief-takes-responsibility-3276937.php#ixzz0bb069dMd">he remarked that</a> the civil
service system was "set up so politicians like me couldn't come in and
fire the people (relatives) hired by the guy they beat and replace them
with their own friends and relatives. Talking about this is
politically unpopular and potentially even career suicide for most
officeholders." It may very well be officeholder career suicide, but it nonetheless seems important that the public knows and understands things like this.<br />
<br />
Another example comes from former democratic U.S. senator Max Cleland (D-GA) and his vote in October of 2002 to authorize <a href="http://en.wikipedia.org/wiki/Iraq_Resolution">the Iraq Resolution</a>, thereby helping to legitimize the Iraq war. Mr. Cleland admitted[2] that he voted in favor of invading Iraq, even
though he was not convinced by the Bush administration's evidence for
Iraqi weapons of mass destruction. He admitted he did that partly
because of deference to the Bush administration and partly because of
political self-interest in his bid for reelection the following month (November 2002). To his credit, Mr. Cleland said that he will regret that vote for the
rest of his life. Based on his comments, it is reasonable to assume that Mr. Cleland
would have voted against authorizing war in Iraq if his political
self-interest was not a factor. It would be no surprise to learn that more than just one senator voted like Mr. Cleland at least in part for the same reason.<br />
<br />
Even among political moderates who often rail against the status quo as something broken, self interest is a major factor in what they do and don't do. When asked to run for president on a third party platform (Americans Elect for the 2012 election), moderates including Olympia Snowe, Michael Bloomberg and Evan Bayh <a href="http://2012.talkingpointsmemo.com/2012/05/american-elect-third-party.php">all shied away</a>. In <a href="http://www.latimes.com/news/opinion/commentary/la-oe-mcmanus-third-party-20120517,0,5038278.column">the opinion of some participants and press observers</a>, reluctance to take on the two-party system was at least partly due to self-interest; "Everyone agreed that the system is broken, . . . . The
problem is that their risk aversion was too high. There's a fear of
retribution if you break with your party." . . . . . "Retribution? Sure. Not
like in Syria, where dissidents are shot, or Russia, where they're
merely jailed. But in Washington, a failed third-party presidential
candidate could become a pariah -- no Cabinet job, no ambassadorship, no
consulting clients, no seats on corporate boards." <br />
<br />
<br />
<div style="text-align: center;">
<b>Self-interest and the RPCA</b> </div>
As much or hard as both parties and their politicians ignore or deny that
self-interest is a significant factor in how we got to where we are, the
balance of the evidence simply does not accord with that argument. It
may be the case that much self-interested action or inaction is
subconscious, but it is nonetheless there. It is always there because
that is just human nature. This isn't just limited to parties and politicians. It is there in special interest groups, including <a href="http://lawlibrary.unm.edu/nrj/39/2/04_lyons_political.pdf">non-profits groups</a> who claim to operate only in the public interest. The Founding Fathers recognized the importance of issue and tried to deal with it. The question is what, if anything should or could be done about it today.<br />
<br />
Since this is largely a matter of human nature, the RPCA believes that that aspect of the situation cannot be fundamentally changed. Human beings are human beings. There seem to two major choices. One is to ignore self-interest or assume it isn't relevant or cannot be affected. The other is to accept reality for what it is and try to work with it in ways that best serve the public interest. Acknowledging the existence and impact self-interest in politics is not intended to be a criticism of the existence of this aspect of human nature.[3] That is tantamount to criticizing people for being human. It is a pointless waste of time.<br />
<br />
A general approach to blunting the adverse impact of self-interest in politics is to better align incentives to reward more efficient service to the public interest, when it is possible to do that. That may sound vague, but it goes straight to the heart of what drives self-interested behavior, i.e., the drive for reward. Rewards will vary but in politics, election and reelection are typically at or near the top of what drives behavior. Subsequent essays will deal with this issue in more focused contexts. That will make the RPCA's rationale clearer. For now, it suffices to raise and acknowledge the issue because of its scope and importance. <br />
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<div style="text-align: center;">
<b>Conclusion</b> </div>
There is a fairly high level of discontent with two-party politics, e.g., <a href="http://www.rasmussenreports.com/public_content/politics/mood_of_america/congressional_favorability_ratings">discontent with congress</a>, <a href="http://www.gallup.com/poll/113980/gallup-daily-obama-job-approval.aspx">president Obama</a>, and <a href="http://politicalticker.blogs.cnn.com/2013/03/18/cnn-poll-gop-underwater-obama-approval-down/">both political parties</a>. Given the discontent, and an almost complete lack of discussion about the the role of self-interest in politics, it is reasonable to assume that neither party is interested in talking about it. It is unseemly to mention the possibility that self-interest affects what politicians and political parties do. That is why essentially all politicians in office and planning for reelection will deny that self-interest has or will affect anything they do. Unfortunately, the two parties and elected politicians presumably see an uninformed public as best for maintaining their power and the status quo in general. Either that, or they cannot see this as something that merits attention. <br />
<br />
Either way, the two-party approach to this issue differs fundamentally from the RPCA approach. The RPCA sees two-party silence on this issue as a great disservice to the
American public. Failing to see problems or seeing them but pretending
they are not there does not serve the public interest. The two-party system may be content to pretend that there is no elephant in the room. The RPCA clearly sees the elephant and intends to render it less damaging to the public interest to the extent it is possible and reasonable to do so. It is likely the case that inefficiencies coming from self-interest will never be completely eliminated. Despite that, there is no reason to believe that the situation cannot be improved. Dealing with this requires careful realignment of incentives to reward politicians (and maybe political parties) for service to the public interest before service to personal or narrower interests. However, before any of that can be done the problem must first be recognized and understood.[4] The two-party system is light years away from that recognition.<br />
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<br />
Footnotes:<br />
1. Discussion of this point is beyond the scope of this essay. However, an example that most people will understand is the drive of individuals and legal entities such as corporations to minimize their tax payments to state and the federal governments. Billions of dollars and millions of person-hours are spent each year pursuing that incentive. Conscious or not and "rational" or not, incentives drive a great deal of behavior, maybe nearly all of it. Obviously, what is rational to one person might be nonsense to another.<br />
2. <a href="http://en.wikipedia.org/wiki/Max_Cleland#Tenure">Cleland's comments</a> regretting his vote to authorize the Iraq war. <a href="http://www.salon.com/2003/11/22/cleland_2/">Other comments</a> on the vote. <a href="http://www.npr.org/player/v2/mediaPlayer.html?action=1&t=1&islist=false&id=113506152&m=113536171">Cleland's interview with Terry Gross</a> in 2006 on Fresh Air - his Iraq war vote is discussed at about 14:15 to 19:02 of the interview. The irony is that despite Cleland's vote for war in Iraq, Georgia voters tossed him out of office in November 2002 after a vicious, brutal campaign mounted by Saxby Chambliss (R-GA). <br />
3. None of this is an assertion that all people are the same. They obviously are not. People will vary in the degree to which self-interest drives their behavior and when it does affect behavior, how it is manifest with respect to the public interest. Acts of self-interest can be good, bad or neutral to the public interest. This is probably true in part because <a href="http://lawlibrary.unm.edu/nrj/39/2/04_lyons_political.pdf">self-interest isn't strictly logical</a> or money-centric all of the time. Multiple factors are at play. Manifestations of self-interest guiding behavior range from what Mother Theresa to Joseph Stalin choose to do with their lives.<br />
4. The RPCA gives this issue significant weight to raise public awareness and to provide context for how the RPCA approaches political issues and problems, e.g., <a href="http://www.cnn.com/2012/08/21/opinion/avlon-akin-gop">in campaigns</a>, <a href="http://news.nationalpost.com/2012/12/31/partisan-warfare-political-self-interest-sending-u-s-over-the-fiscal-cliff/">in budget fights</a> and <a href="http://douthat.blogs.nytimes.com/2013/01/28/immigration-and-republican-self-interest/">in immigration policy</a> with party vs. politician self-interests sometimes at cross purposes. The RPCA believes that the balance of political self-interest vs. the public interest is currently tipped too far against the public interest and the issue merits attention. This is true at least at the California state and U.S. national levels. This is not to impugn the integrity of politicians or to question their patriotism. Despite his regrettable vote in 2002, former senator Cleland is a patriot and an honorable person. This issue is grounded in normal human behavior. Unless this is at least acknowledged, adverse effects on the public interest are hidden or unknown. If the adverse effects are unknown, there is no reason or incentive to improve the situation.Unknownnoreply@blogger.com0