Why ideology is bad for politics

Reform Party of California Commentary

Why ideology is bad for politics

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.

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.

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."

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."

Conclusion

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.

Footnotes:
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/.
2. Link: http://reformparty.org/reform-party-of-california-essays-6-what-is-the-public-interest-and-how-is-it-best-served/.
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?

Uniting discontented groups

Reform Party of California
Can centrist political discontent coalesce on 
a pragmatic center and make a difference?

Context

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.

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]

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.

Big numbers, small impact: The independents' one-night stand?

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.

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.

How to unite independents and the political center?

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. 

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.

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.

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 naïvety. 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. 

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.

Throw down the gauntlet

 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.

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.

Footnotes:
1. Links: http://www.gallup.com/poll/151943/Record-High-Americans-Identify-Independents.aspx;
www.gallup.com/poll/159740/democrats-establish-lead-party-affiliation.aspx.
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/.
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/.
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.
5. Link: http://abcnews.go.com/blogs/politics/2012/01/independent-voters-on-the-rise-but-do-they-matter/.
6. Link: http://www.theatlantic.com/politics/archive/2012/02/4-types-of-independent-voters-who-could-swing-the-2012-elections/252363/.
7. Link: http://reformparty.org/reform-party-of-california-commentary-colloquies-in-venom/.
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.
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.
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 sustained 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.

Simpson-Bowles commission report commentary

Reform Party of California Commentary

The reality of America's fiscal situation

Context

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]

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.

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:

"The problem is real. The solution will be painful. There is no easy way out. Everything must be on the table. And Washington must 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." (SB report at pages 7-8)

The SB report says that, among other things, the SB plan would "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." (SB report at page 15)

Finally, the SB report says that it will "reform corporate taxes to make America more competitive, and cap revenue to avoid excessive taxation." (SB report at page 16)

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.

Who you gonna trust?

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.

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]

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.

Reality doesn't care about ideology

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.

The matter of trust (again)

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.

The dilemma

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.

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.


Footnotes:
1. Link: http://www.bloomberg.com/news/2013-08-26/lew-tells-congress-treasury-will-hit-debt-limit-in-mid-october.html.
2. Link: http://reformparty.org/reform-party-of-california-commentary-colloquies-in-venom/.

3. Link: http://reformparty.org/reform-party-of-california-elusive-economic-reality.
4. Link: www.fiscalcommission.gov/sites/fiscalcommission.gov/files/documents/TheMomentofTruth12_1_2010.pdf; a summary of the report is here: http://en.wikipedia.org/wiki/National_Commission_on_Fiscal_Responsibility_and_Reform.
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. Another 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.
6. Link: http://reformparty.org/reform-party-of-california-essays-6-what-is-the-public-interest-and-how-is-it-best-served/.
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.
8. Link: http://online.wsj.com/article/SB10001424127887323353204578127374039087636.html; http://kaiserfamilyfoundation.files.wordpress.com/2013/01/8185-02.pdf; See page 2 of the analysis; http://www.offthechartsblog.org/dont-forget-ryans-budget-of-last-year/.
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.

Smithfield buyout by China Co. part 2

Reform Party of California Commentary

Business on an uneven playing field

 - part 2

Context

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.

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.

The deal is approved

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.

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.

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.

Footnotes:
1. Link: http://reformparty.org/reform-party-of-california-commentary-business-on-an-uneven-playing-field/.
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.
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.
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.
5. Link: http://www.treasury.gov/resource-center/international/Pages/Committee-on-Foreign-Investment-in-US.aspx.
6. Link: http://reformparty.org/reform-party-of-california-essays-6-what-is-the-public-interest-and-how-is-it-best-served/.
7. 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.

Economic reality and political reality

Reform Party of California Commentary

Economic reality and political reality

Context

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.

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.

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.

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.
 

Economic reality

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.

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]

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.

A republican plan

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.

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.

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.

One analysis estimated that repeal of the ACA could reduce enrollment by 17 million 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]

The political reality

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.

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.

Conclusion

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.

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.

 

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Separate commentaries on democratic budget plans and on the proposals from the Simpson-Bowles commission will follow this commentary.

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Footnotes:

1. Link: http://quoteinvestigator.com/2011/10/31/compound-interest/.

2. Link: http://mathcentral.uregina.ca/beyond/articles/CompoundInterest/Money.html.

3. Link:http://www.todayszaman.com/news-266015-power-of-compound-interest-as-applied-to-the-current-debt-crisis.html.

4. For example, the endless minimum wage disputes with the never-changing arguments or logic: 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/2013/08/15/why-we-should-not-raise-the-national-minimum-wage/?utm_source=house&utm_medium=email&utm_campaign=newsletter-min-2013-08-29.

5. Link: http://reformparty.org/reform-party-of-california-essays-6-what-is-the-public-interest-and-how-is-it-best-served/.

6. Link: http://reformparty.org/reform-party-of-california-commentary-colloquies-in-venom/.

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/.

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.

9. Link: http://www.examiner.com/article/shared-responsibility-and-shared-sacrifice-more-than-political-buzzwords.

10. Link: http://online.wsj.com/article/SB10001424127887323353204578127374039087636.html.

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/.

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/.

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.

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/.

15. Link: http://kaiserfamilyfoundation.files.wordpress.com/2013/01/8185-02.pdf; see page 2 of the analysis.

16. Link: http://www.offthechartsblog.org/dont-forget-ryans-budget-of-last-year/.

17. Link: http://www.people-press.org/2013/01/31/majority-says-the-federal-government-threatens-their-personal-rights/.

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.



Unused content
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.

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?

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

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.