Political Gridlock – Page 13

Focus on the Doughnut

(There will be limited blogging until 7/26, as Wrongo and Ms. Right spend an extended weekend in Philadelphia)

The first night of the Republican National Convention ended dominated by one bizarre question: Was Melania Trump’s convention speech plagiarized from a Michelle Obama convention speech from 2008?

OK, she probably would have gotten an “A” from Trump University, but pulleez, people! This isn’t a big deal.

Melania Trump is not a major figure in the GOP, and plagiarism of parts of a speech doesn’t have the same connotation in political speeches that it does in academia. So she stole a few lines from a Michelle Obama speech. So what? She isn’t running for anything, and the statements were largely clichés. If you are hoping to show the incompetence and dishonesty of the Trump campaign, there are bigger more important examples.

Why should anyone care about this? If Melania Trump has one interview with the press, and says she liked the ideas in Michelle Obama’s speech, this is over. Why is the media so focused on this? Why are they not focusing on the things of substance that were said in Cleveland yesterday, things that are legitimately terrifying because they could actually become policy?

They could have focused on Rep. Steve King (R-IA) going full white supremacist.

Or, Rudy Giuliani going off about the imminent (?) terrorist threat facing America, saying:

You know who you are, and we are coming to get you.

Or, the extended poutrage about “The Battle of Benghazi”.

Or, convention speaker actor Antonio Sabato Jr. who questioned Obama’s religion, saying the president is “absolutely” a Muslim.

Or, if they were truly interested, they could analyze the GOP 2016 Platform, its most socially conservative platform ever.

But our media wants to keep it simple: Everything else spoken from the stage last night requires explaining something complex, like matters of policy. That’s hard work for the reporters, and maybe for the people to understand. But when a candidate for first lady steals parts of the opposing party’s speech, that’s easy to report and to understand.

It appears that the media is incapable of making the sort of deep, factual critique of policy that we need from them. Wrongo can be annoyed about it, but that’s how it is.

The press should focus on the doughnut, and not the hole, particularly when the hole isn’t a policy speech.

OTOH, when a goofy low-stakes gaffe like this one gets the media saying negative things about Trump, we’ll just have to go with it.

How Not to Cut the Deficit

Congress returned from the Independence Day break on Monday. They will leave again on Friday, and won’t return until after Labor Day. From The Hill:

Congress is poised to leave Washington…without passing funding to combat the Zika virus or completing work on spending bills to avoid a government shutdown.

One bill that might get passed is the re-authorization for Federal Aviation Administration programs that expire on Friday. Since Congress likes to fly, most think they will pass an extension that will last through September 2017.

If you’ve taken a flight this summer, you’ve likely been tied up in long TSA security lines. But you may not have focused on the real reason: Funding for the TSA has been sliced by 8.5% over the past five years, leading to a 5.5% drop in the number of screeners.

Yet, in the same period, the number of air travelers has increased by more than 15%. And those business wizards in Congress should be forced to tell the rest of us how a labor-intensive business can successfully process increasing numbers of customers with a smaller work force.

Steven Rattner in the NYT:

This year, discretionary spending — which encompasses airport security, infrastructure, education, research and development and much more — will be lower than it was in 2005. (Adjusted for inflation.

The discretionary portion of the federal budget, including education, research, infrastructure and other programs, has been falling, while spending on mandatory programs (including Social Security, Medicare and Medicaid) has been going up. Rattner reports that total government spending is up by 23% since 2005, while mandatory spending is up 45% in the same period, and discretionary spending is down 3%.

Here are some examples:

Since 2003, the National Institutes of Health (NIH), have seen their funding fall by 23%, forcing an 8% reduction in grants to researchers even as grant applications were rising by 50%.
In the past 10 years, spending on all education has fallen by 11% percent.
Since 2010, the IRS’s budget has been slashed by about 18%, even as the IRS was given new duties in connection with the passage of the Affordable Care Act. The result: The enforcement staff has shrunk by 23%, leading to a similar reduction in the number of audits. Fewer audits have meant additional uncollected taxes, estimated at $14 billion over the past two years. And almost a million pieces of unanswered correspondence from taxpayers need responses.
The EPA’s budget has been cut by an enormous 27% — about $3 billion since 2010. As a result, the agency had to eliminate more than 2,000 workers, bringing its staffing to the lowest level since 1989.

Last fall, a bi-partisan group added $80 billion in new discretionary spending over the next two years. Then, Congress doubled the cost of the deal by giving more money to the military and to Medicare, taking the deal to $154 billion while paying for about half the tab with legitimate savings.

A few months later, Congress retroactively extended a raft of expired tax provisions — without even a pretense of paying for them.

As a result of Congress’s fudging, the projected 2017 deficit rose to $561 billion, from the $416 billion that was estimated just six months earlier.

We shouldn’t expect that Congress will make any big decisions involving taxes or spending in an election year. But at the least Republicans need to stop using the appropriations tool to take aim at agencies such as the IRS and the EPA, whose missions they reject.

In the case of the TSA, Republicans want it privatized. Not because privatizing will save any money or make the TSA more effective, but to help a few of their corporate sponsors have another feed at the government trough. Republicans want to see schools, prisons, and the postal service privatized. The people who are employed by these private, profit-making companies will not be paid as well, and will not receive benefits they have today.

This is what you get when you believe that government should be “run like a business.” Certainly, we need a more efficient, better managed bureaucracy, but the deficit-cutting value of their fix is peanuts compared with the simple act of generating revenue.

You know, that would be raising taxes sufficient to pay for the critical tasks we require of the government.

The GOP would like you to think that Donald Trump represents a threat to Republican tax and deficit-cutting orthodoxy. To the extent Trump has revealed his thinking on tax policy, it looks consistent with the Republican Party. Trump’s grand accomplishment is to create an alliance between the true economic interests of the Republican Party and that segment of the American electorate largely marginalized and displaced by the actions of that same elite.

Welcome to the Republican paradise.

Our National Trauma Wake Up Call – July 11, 2016

It didn’t take long after five dead officers in Dallas, victims of a racially motivated killer, for some on the right to say “Its Obama’s fault”, or “Its Black Lives Matter’s fault”.

Here is a sentiment that you would hope that all Americans can agree on:

FireShot Screen Capture #100 - EM Simpson-page-001

From Evan Osnos:

It is a vision at the heart of the modern gun movement: the more that society makes the threat of violence available to us, the safer we will be. In forty-eight hours this week, the poisonous flaw in that fantasy has been exposed from multiple angles…

Wrongo hasn’t seen the videos, and hasn’t checked deeply into the circumstances, but he can’t seem to keep these incidents at arm’s length:

The Baton Rouge incident seems to have been the result of panic among the police who shot the victim repeatedly, even though the victim was pinned down on the ground.
The Minnesota shooting of a man halted for a traffic violation, who informed the policeman that he was armed and had a permit for concealed carry of a firearm, again may have been the result of fear and/or panic by the cop. The victim was shot several times while trying to pull his identification from a pants pocket.
The attack on Dallas police, in which five policemen died, and seven were wounded, seems to be a racially motivated revenge killing by a black shooter.

Needless to say, we need people on both sides of the Black/Blue Lives Matter argument to stand down. Cooler heads need to prevail. There are probably many cops who are not in possession of the nerves of steel needed for their jobs in 2016. Policing America today is no cakewalk. Everybody has a gun, most people are angry, and many have very low points of frustration.

FWIW, these violent episodes are partly a reflection of the larger struggle reflected in our national politics. There is a palpable dissatisfaction with how our country operates. The accumulation of money and power by people controlling our institutions has brought us an elite that no longer operates in the best interests of the population at large.

Some of this frustration and anger is played out with gunfire, and guns are everywhere.

The past week shows clearly that America’s police and America’s black citizens are at odds. During the day or so after Baton Rouge and Minnesota, there was an opportunity to step back and perhaps discuss what we might have learned from these killings. But the shooter in Dallas muddied the bigger picture, making revenge the story in our national news.

Leonard Pitts, Jr. in the Miami Herald quotes former NYC Mayor John Lindsay at another time of racial division:

This is a drifting, angry America that needs to find its way again.

This week feels like a sea change. Until now, neither killings by police, nor killings of police have been happening at unusual rates. This feels completely different, but we won’t be sure for a while.

July 4, 2016

Independence Day 2016. And 240 years later, where are we?

COW Our Sad Fourth

Our founders were willing to die for an idea. They wanted home rule, not a local dictatorship run by a representative of an English King. There were spirited debates around the ideas that founded our Republic, and there were those who worked hard to keep the rule of the King in place.

So are the contentious debates of today just more of the same? Here is a small taste of Sebastian Junger’s new book, “Tribe”: (pg. 124)

Today’s veterans often come home to find that, although they’re willing to die for their country, they’re not sure how to live in it.

He goes on:

It’s hard to know how to live for a country that regularly tears itself apart along every possible ethnic and demographic boundary.

On the front lines, GI’s know their buddies are different in all sorts of ways, but they set aside their differences and form units that transcend differences, often heroically. Yet, in 2016 America, on a different set of front lines, our politicians amplify differences, going so far as to regularly accuse rivals of deliberately trying to harm their country.

Our society is at war with itself. Depending on their ideology, people speak with complete contempt about the rich, the poor, the educated, or the foreign-born. They express the same contempt for the president, and again, depending on their ideology, the entire US government.

That’s a level of contempt we have usually reserved for enemies in a time of war. But now, we apply it to our fellow citizens. Contempt is particularly toxic because it implies that the attacker has a position of moral superiority, and through that, has the agency to attack another.

So, on our most patriotic day, put down that hot dog, and ask the question: How do we unify a secure, wealthy country that is now playing a zero-sum political game?

Time to wake up, America! And to help with that, let’s dance around the room with a little rockabilly by Elvis Presley. Elvis was treated with contempt by some in the 1950s, but it was mostly silent, and by the Silent Generation, who thought they were protecting their kids from rock & roll.

Take a listen to “Good Rockin Tonight”, and remember Scotty Moore, the original guitarist for Elvis, who died last Tuesday. He was not just our last living link to the King (assuming the King is really dead), he was the force behind Elvis’s early singles. Scotty is in the Rock & Roll Hall of Fame.

His reverb-drenched rockabilly guitar was the driver in the originally drummer-less trio of Elvis, Scotty and bassist Bill Black:

COW Elvis and Scotty

Rolling Stone ranks Scotty Moore No. 29 on its list of the 100 greatest guitarists of all time, saying “The playing was so forceful that it’s easy to forget there was no drummer.”

Keith Richards has said:

Everyone else wanted to be Elvis. I wanted to be Scotty.

Here are Elvis, Scotty and Bill on “Good Rockin Tonight”:

Sunday Cartoon Blogging – July 3, 2016

The presidential choices for 2016 are Clinton or Trump. You could write-in Bernie, or Jill Stein, or one of the fringe candidates, but not all write-in votes are counted for Electoral College purposes. 43 states, representing 494 electoral votes, count write-in votes, although the candidate has to have registered electors in some of those states to be counted. So you could be throwing your vote away by writing in someone.

And this year, we can’t afford any wasted votes. If you doubt that, check out this rockin ‘n rollin’ week.

SCOTUS redefined “Undue Burden” for Texas:

COW Undue Burden

Scalia opined from beyond the grave:

COW Scalia in Hell.gif

The GOP Benghazi strategy focused on the wrong fire:

COW Benghazi Fire

The non-event called the Benghazi Congressional Report was issued:

COW Benghazi Mud

Why can’t the GOP move on from Benghazi? Please don’t say it’s because 4 people died. Think about how many have died from shootings in America since Benghazi, without any GOP interest in holding hearings on Gunz. We deserve better from these birds we elect.

Loretta Lynch knew better than to meet with the Big Dog:

Schmooze 2

Loretta Lynch used to be a prosecutor. She knows better than to speak with the spouse of someone under an active investigation. As an officer of the court, she should have told Bill that talking together was improper, and had someone else on her staff speak with him. She has tarnished the credibility of the investigation and should resign. OTOH, Mr. Bill drop kicked his wife’s good news on the Benghazi investigation to the curb, making her the story again. And he is (was) a lawyer, and ought to know the protocol as well as Lynch.

Of course, Bill denied it:

COW Bills Denial

Hillary Should Grab Populism and Run With It

The biggest change in our politics in the past 20 years is the rise of populism on the left and right. The populists believe that we are led by a selfish elite that cannot—or will not—deal with the problems of ordinary working people, and there is ample evidence that they are correct.

Trump and Clinton say they will bring back jobs that corporations have shipped offshore. They make China the scapegoat for lost economic opportunity, while the real causes are automation and the triumph of the spreadsheet in corporate strategy.

Those jobs are never coming back, and a candidate who says they can negotiate with foreign governments to bring jobs back demonstrates either their naiveté about the true cause of job loss, or a simple desire to BS the American public.

Voters can see through that.

Economic and cultural insecurity are the bedrock causes for populists. Unemployment and stagnant wages hurts working-class whites, while cultural issues are a top issue for older white Americans. The first group sees their jobs threatened by automation and globalization. They join with older whites in seeing immigrants as scroungers who work for less, grab benefits and if you believe Trump, commit crimes.

Both groups also believe that American society is being undermined by diversity and foreign-born citizens.

This is the battle line of the 2016 presidential election. The mediocre economy that has been with us for nearly 20 years has caused real harm. We remain a wealthy country, but certain groups now see their opportunity slipping away. Slow growth, or no economic growth, means only a few elites will do well, and most voters see the self-serving political class as siding with the elites.

So can a candidate unify an electorate that now plays a zero-sum political game?

The Pant Load has the better position in this game, since he can exploit pre-existing fears that are based in fact.
The Pant Suit must carefully calibrate her message, but she cannot be a “maintain the status-quo” candidate and win.

Clinton would do well to consider what William Berkson said in the WaMo:

If there is one national goal that Americans can agree on, it is opportunity for all.

Berkson makes the point that since President Reagan, Republicans have advocated a simple theory of how to grow the economy: The more you reduce government involvement in the economy and the more efficient markets become, the more the economy grows.

Sorry, but the simplistic theory of free market economics has been drowned in a tsunami of fact in the past 35 years. Berkson says:

Both Democratic administrations since Reagan—that of Bill Clinton and Barack Obama—have raised taxes, and under them, the economy grew more rapidly than under the tax-cutters Reagan and George W. Bush.

This opens a path for the Pant Suit. In order to win, she must assure voters that she will deliver more and better jobs. Family income must go up. But how to achieve this?

By advocating a policy of economic opportunity through public investment in infrastructure. It fulfills the promise of opportunity for all, a populist message that has proven to work throughout America’s past. And it allows Clinton to hammer the GOP Congress and Paul Ryan about the lack of any track record for laissez-faire policies, since they have never worked, not even once, as a miracle cure for jobs and income inequality. This would be an open return to Keynesian economics. Here is Eduardo Porter in the NYT:

The Keynesian era ended when Thatcher and Reagan rode onto the scene with a version of capitalism based on tax cuts, privatization and deregulation that helped revive their engines of growth but led the workers of the world to the deeply frustrating, increasingly unequal economy of today.

And led to the low growth economy that drives today’s populist anger.

How to fund that infrastructure expense? More revenue. For the last 40 years, Democrats have been unwilling to counter the conservative argument that higher taxes are a redistribution of wealth between classes. Clinton should argue that current tax policy is really a transfer of resources from tomorrow’s generation to today’s. This is a strong populist message.

Younger Millennials understand this clearly. They already believe Social Security will not be there when they need it. She can win them over if she makes a case for new jobs and new revenues.

When conservatives say that it is unfair for people in their highest earning years to pay more taxes on that income, Clinton can point out that this is a past-due bill that they need to pay just as their elders paid higher taxes that supported the current earners when they were starting out. It was that investment in public resources such as public education and infrastructure, and in research, technology and industry that enabled today’s peak earners to get where they are.

While the strategy opens Clinton to criticism from Grover Norquist and the right about fiscal irresponsibility, it pits Trump against the Tea Party and the GOP. He would need to choose between being a populist or a doctrinaire fiscal conservative. Either way, it will bleed votes from some part of his base.

The strategy could work in down ballot races as well, particularly in the Rust Belt. Maybe working class conservatives will hear her, and not vote against their economic interests for once.

We’ll see if she will move from status quo, to “let’s go” as a campaign strategy.

Democrats’ Strategic Failure Continues to Haunt

When President Obama won re-election in 2012, Democrats increased their majority in the Senate, but the House of Representatives remained in Republican hands. In House races in 2012, 1.7 million more votes were cast for Democrats than for Republicans, but Republicans came away with 33 more Congressional seats.

How did this happen when in 2008, Republicans lost a “wave” election, and were looking at eight years in the minority? The Republicans were staring down a demographic tidal wave, and the Democrats were talking about a decade of changing politics. The Democrats had taken a super majority in the Senate. The real risk to the GOP was that, by the 2020 census, demographics could keep them in a semi-permanent minority for a very long time.

Then, along came a Republican strategist named Chris Jankowski. He had a strategy, one which the Democrats failed to react to. A strategy that turned a period of a likely permanent GOP minority to a GOP majority in four years. All of this is covered in “Rat-F*****: The True Story Behind The Secret Plan To Steal America’s Democracy“, by Salon’s editor-in-chief, David Daley.

Jankowski’s strategy was to gain control of as many state legislatures as possible in 2010. The plan was to control the state’s redistricting process for Congressional districts, once the result of the 2010 Census was available. That is because state legislatures draw most of the congressional boundaries across the country. The GOP’s plan was called REDMAP for Redistricting Majority Project. The idea behind REDMAP was to hit the Democrats in several state legislatures where Democratic statehouse majorities were thin. They targeted races with vast sums of money and were able to flip many state houses.

In 2009, Democrats held the majority of seats in both houses of the state legislature in 27 states. In six more, they held a majority in one house. The Presidency, the US Senate, and the House of Representatives were all in Democratic hands.

In 2010, Republicans gained nearly 700 state legislative seats, which, was a larger increase than either party has seen in modern history. The wins were sufficient to push 20 legislative chambers from a Democratic to a Republican majority.

Most significantly, the GOP took control over both houses of the legislature in 25 states.

REDMAP’s success was made possible by funding from a super-PAC called the Republican State Leadership Committee. It raised $30 million, mostly from corporations, of which $18 million was received just weeks before Election Day.

Pennsylvania is an object lesson: So skillfully were the lines drawn by the Republican legislature that in 2012, when President Obama carried Pennsylvania by 300,000 votes and the state’s Democratic congressional candidates collectively out-polled their rivals by 100,000 votes, Republicans still won 13 of Pennsylvania’s 18 seats in the House of Representatives.

In Michigan, the 2012 election was a huge success for Democrats. Voters elected a Democratic US Senator by more than 20 points and reelected President Obama by almost 10 points, but Republicans ended up with nine of the state’s Congressional seats to the Democrats’ five.

This was among the greatest political achievement in modern times. If you’re a Republican, you look at this and say, we played by the rules, we played within the law, and we won!

And the Democrats spent 2009-2011 asleep at the wheel, presiding over a catastrophic strategic failure.

Worse, the GOP plans were announced by Karl Rove in a March 2010 op-ed in the Wall Street Journal. Rove said they were going to use redistricting to take back the Congress. The GOP plan was in plain sight.

This takes us to Hillary Clinton’s possible choices for Vice President. Apparently, she is leaning towards Tim Kaine, (D-VA). Kaine is attractive in that Hillary needs to win in Virginia to win the presidency. Kaine is a Harvard-educated lawyer and was governor of Virginia from 2006-2010.

We mention him here since he was Chair of the Democratic National Committee from 2009-2011.

That’s right, it was Tim Kaine who the Republicans outsmarted with their REDMAP strategy. It is Tim Kaine who let the GOP place so many different locks on the door to Congress. Undoing that will take years of really concentrated effort, state by state, chamber by chamber. It’s going to take the Democratic Party at least until after the 2020 census to undo what Tim Kaine let happen in 2010 and 2011.

Perfect choice for VP. He’s the right guy to follow a Hillary Presidency.

In preparation for the next census, Democrats have come up with a REDMAP-like plan of their own. They call it Advantage 2020, and say they plan to spend $75 million.

Republicans have announced REDMAP 2020. Their spending goal?

$125 million.

What does “To Serve” mean in the Senate?

There is an illuminating Op-Ed in today’s NYT by Frank Bruni that tells two stories, one about Cassandra Butts who was nominated by Mr. Obama to be our Ambassador to the Bahamas. She was never confirmed due to holds placed on the nomination by Republican Senators.

Butts died suddenly at 50 years old from leukemia, after waiting more than 820 days to be confirmed.

The second story is about the Senate’s process and specifically, GOP Senators who no longer even try to work across the aisle. From Bruni’s article:

The Senate held a hearing about her nomination in May 2014, and then… nothing. Summer came and went. So did fall. A new year arrived. Then another new year after that.

Bruni continues:

The delay had nothing to do with her qualifications, which were impeccable. It had everything to do with Washington. She was a pawn in its power games and partisanship.

At one point Senator Ted Cruz, (R-TX) had a “hold” on all political nominees for State Department positions, partly as a way of punishing President Obama for the Iran nuclear deal.

Later, Senator Tom Cotton, (R-AK), specifically placed a hold on Butts and on nominees for the ambassadorships to Sweden and Norway. He had a gripe with the Obama administration over a Secret Service leak of private information about a fellow member of Congress; and he was trying to pressure Obama to take punitive action. But that issue was unrelated to Butts and the Bahamas.

From Bruni: (emphasis by the Wrongologist)

Cotton eventually released the two other holds, but not the one on Butts. She told me that she once went to see him about it, and he explained that he knew that she was a close friend of Obama’s — the two first encountered each other on a line for financial-aid forms at Harvard Law School, where they were classmates — and that blocking her was a way to inflict special pain on the president.

Bruni says that in a subsequent call to Sen. Cotton’s office, his spokeswoman did not dispute Butts’s characterization of that meeting, and stressed, in separate emails, that Cotton had enormous respect for her and her career.

There we have our two stories. In one, a Harvard educated lawyer, a classmate of the president, who could have cashed in by joining the private sector. But instead, she worked in DC, for the N.A.A.C.P.’s Legal Defense and Educational Fund, for the Center for American Progress and for Obama, including time as deputy White House counsel.

Tom Cotton on the other hand, is a Harvard educated lawyer. He was in the US Army. He did stints in Iraq and Afghanistan, and he earned a Bronze Star. He is a Tea Party Republican who is likely to be a candidate for president in 2020.

Cotton’s actions were not tied to ideology. Apparently, he just wanted to hurt President Obama. He is a US Senator. Think about the oath of office for the Senate. Mr. Cotton’s duty is to defend the Constitution, and to serve his constituents and the people of this nation, not to act out his retribution fantasies. The oath a Senator takes does not include ‘inflicting special pain on the president’. It does not include stymieing foreign relations or, in the case of Merrill Garland and 83 other judicial vacancies, our justice system.

Remember this when Sen. Cotton positions himself for his own quest for the White House. Think of the opportunities he would have for enhanced retribution, should he reach the Oval Office.

Senators from both parties use holds on nominations for leverage with the White House. But it has become extreme and egregious: a tactic that’s turned into a tantrum. Politicians sometimes do bad things. Usually, for money, or power, or to assist an ally. Cotton’s action was none of those. It was done purely for spite.

These Senatorial blocking privileges are being abused and should end. They are helping the Senate become a body of obstructionists for whom the verb “to serve” no longer has meaning.

In addition, why not change the Senate’s rules so that any nomination not acted upon for a reasonable time (90-120 days?) should be automatically approved.

It wouldn’t take a Constitutional amendment to accomplish this, just a change in Senate rules.

However, changing the rules in a body that has no accountability will require a “political revolution”, and as we have said before, the revolution has to be won precinct-by-precinct.

Monday Wake Up Call – June 6, 2016

We know that D-Day was June 6, 1944, but what does the “D” in D-Day, stand for?

Apparently, this is a frequently asked question by visitors to The National WWII Museum. But the answer isn’t simple. Disagreements between military historians and etymologists about the meaning of D-Day abound. Here are two explanations:

In Stephen Ambrose’s D-Day, June 6, 1944: The Climactic Battle of World War II, Ambrose writes:

Time Magazine reported on June 12 1944 that ‘as far as the U.S. Army can determine, the first use of D for Day, H for Hour was in Field Order No. 8, of the First Army, A.E.F., issued on Sept. 20, 1918, which read, ‘The First Army will attack at H-Hour on D-Day with the object of forcing the evacuation of the St. Mihiel salient.’ (p. 491)

In other words, Ambrose reports the D in D-Day stands for “Day.” But In Paul Dickson’s War Slang, he quotes General Eisenhower:

When someone wrote to General Eisenhower in 1964 asking for an explanation, his executive assistant Brigadier General Robert Schultz answered: ‘General Eisenhower asked me to respond to your letter. Be advised that any amphibious operation has a ‘departed date’; therefore the shortened term ‘D-Day’ is used.’ (p.146)

It’s an enigma wrapped inside of a mystery. A continuing enigma is the lack of accountability by both our elected officials and our state and national bureaucrats. Today’s travesty was reported in the UK’s Guardian:

Despite warnings of regulators and experts, water departments in at least 33 cities used testing methods over the past decade that could underestimate lead found in drinking water.

These tests are taken annually and sent to the EPA in Washington. The 33 offending cities were in 17 different states. Of the cities, 21 used the same failed water testing methods that were used in Flint MI. Additional findings:

Michigan and New Hampshire advised water departments to give themselves extra time to complete tests so that if lead contamination exceeded federal limits, officials could re-sample and remove results with high lead levels.
Some cities denied knowledge of the locations of lead pipes, failed to sample the required number of homes with lead plumbing or refused to release lead pipe maps, claiming that would be a security risk.

Since the Flint water crisis erupted last year, school districts from coast to coast have stepped up testing of fountains and sinks. From Newark to Boston to Detroit, city after city has reported elevated levels of lead in the water of some educational buildings. The Portland OR schools have the problem and the school district has been aware of it for years. But the federal government doesn’t actually require most schools to test, so few do.

Apparently, the federal EPA has known since 2001 that its testing guidelines were weak. They are working on “long-term revisions” to its lead and copper rule, which are expected in 2017. Or sometime.

From Ian Welsh:

No regulator worth its salt, who is doing their job, could have missed entire States and large cities cheating, because any regulator worth its salt does its own audits and testing.

Republicans do not see this as a problem. Yes, there have been apologies, but no federal funding to remediate the problem. In fact, Fitch Rating Service estimates that capital costs to replace the nation’s lead water service lines could exceed $275 billion.

Republicans expect Mr. Market to take care of issues like this, once we privatize our water supply.

After all, aren’t invisible hands already cleaning the lead from the brains of America’s children?

It’s the miracle of market self-regulation.

Time for a wake-up call for all who think that business as usual is acceptable for our aging infrastructure, and in the case of our water supply, our poisonous infrastructure. Let’s look back to a time when America could do great things, even if it cost real dough. In 1977, we sent the Voyager I and II interstellar satellites off into space with a record of the things we thought made Earth unique. The music we sent was picked by Carl Sagan. This link lists all of the music we sent into the cosmos. One of his picks was by Blind Willie Johnson, “Dark Was the Night”, which has no lyrics, but creates a mood of loneliness. Here is “Dark Was the Night”:

This song will likely last longer than the human race. It’s doubtful that Blind Willie ever thought THAT was gonna happen.

What isn’t gonna happen is that our politicians decide on their own to be accountable to the rest of us.

Will Take-Home Pay Grow?

One of the big questions that we must force Hillary Clinton and Donald Trump to address is: Where will growth in take-home income come from?

If we look at pay, despite recent improvements, real average hourly earnings have declined since the 1970s:

Real Hourly Earnings 2016

Source: Advisorperspectives.com

At the same time, the average hours per week have trended down from around 39 hours per week in the mid-1960s to a low of 33 hours at the end of the last recession. It is 33.7 hours today. After eight years of economic recovery, it is only up by 42 minutes.

So, take-home pay has stagnated (or worse) for the average American since the Nixon administration. People have coped by having both spouses work, by borrowing under a Bank of America heloc, and by refinancing mortgages when interest rates declined.

But, by 1995, spousal participation in the job market had peaked, at about 60%. Borrowing under home equity lines of credit peaked in 2005 at $364 billion. These loans that were used to pay for remodeling, education costs, or new Ford F-150s were less than half of that amount in 2015, at $150 billion.

After the Great Recession, The only remaining way to boost household cash was mortgage refinance. There were windows to refinance a mortgage in 2009, and again in 2013. The reason was that mortgage interest rates stayed very low. In fact, US 10 year treasuries were at a 60 year low in 2013 at 1.50%, and mortgage rates are tied to the treasury rate. Refinancing mortgages can happen to many people, this is where companies like Polar Mortgage come in to help homeowners out. Homeowners also have the ability to get financial help from the government through the use of federal credit union home loans in order to refinance their homes.

As an example, a 1.5% decline in a mortgage payment on a $250,000 house would save $3750 a year, or a little over $300 a month added to the pockets of the average hourly worker. Taking income tax into consideration, it would take an additional 17.5 hours of work at the $21.45 rate to equal that amount. But that’s not practical. It would require a 52% increase in hours, if you are working the national average number of hours, which isn’t going to happen.

So, if the Federal Reserve raises interest rates, as they seem set to do this month or next, mortgage refinance will no longer be helpful to the vast number of working people. CoreLogic tracks the interest rates on outstanding mortgages, collecting data from mortgage servicers. Their data track the volume of outstanding mortgages by interest rate level for both the number of mortgages, and the unpaid principal balance on those mortgages (UPB).

Their analysis says that few mortgages will be refinanced if rates go up: Most borrowers have mortgages with rates below 4.50%, with 62% of mortgages and 72% of UPB in this range. There are an additional 14% of borrowers and 13% of UPB with mortgage rates between 4.5 and 5.0%.

Since refinancing has costs (legal, title search and insurance, and points), a simple rule of thumb is to add 1% to the current mortgage rate to get a rate at which borrowers would have a financial incentive to refinance. The current Freddie Mac mortgage rate is 3.57%, so the point of indifference for a borrower would be ~4.5%. CoreLogic estimates that only about 28% of the UPB of America’s outstanding mortgage loans are worth refinancing today. And should the Fed live up to their plan, and increase rates by ½% in 2016, an additional 5.5 million borrowers will lose their incentive to refinance.

So, if mortgage rates rise in 2016 as predicted, refinancing won’t improve the financial situation for very many of us.

New Deal Democrat sees all of this and says:

So the bottom line is, we are already in a period…where real gains by average Americans won’t be available from financing gimmicks, but must come from real, actual wage growth. At the moment I see little economic or political impetus to make that happen, even though average Americans understand via their wallets the issue all too well.

We’ve killed our economy.

You’d think after 8 years where most US job growth was in part-time jobs, where hourly income is at the same level as in the Ford administration, where we have the most people ever in poverty, where student debt exceeds credit card debt and automobile debt, people would catch on.

Maybe, but not unless we demand real answers of Hillary Clinton and Donald Trump, and not let the candidates say the plan is to rearrange the deck chairs on the Titanic.

The Wrongologist

Geopolitics, Power and Political Economy

Category: Political Gridlock