Category: Politics

Increased Demand is Causing Price Inflation

The Daily Escape:

Pueblo Bonito, Chaco Canyon, NM – November 2021 photo by James C. Wilson. It’s difficult to hire stone masons this good today.

 “If Americans are feeling glum, they sure are engaging in some retail therapy.”— WSJ’s “Heard on the Street” columnist Justin Lahart

We’re in a period of unclear signals. Every poll says that Americans believe inflation is high and the economy is bad. But unemployment is low, GDP growth is high, and people are buying things like crazy:

“The Commerce Department…reported that sales at stores, restaurants and online rose 1.7% in October from a month earlier, better than the 1.5% economists expected. Additionally, estimates of August and September retail sales were revised upwards. Sales were broadly higher across most categories, with gains at department stores, electronics and appliance stores and online retailers in particular…”

This led economists to revise their fourth-quarter GDP estimates higher. JPMorgan Chase now forecasts GDP will grow at a 5% annual rate in the fourth quarter, versus its previous 4% estimate. The news wasn’t all terrific, as restaurant and bar sales were flat in October versus a month earlier. That might be an indication of cooler weather keeping diners at home as outdoor seating arrangements became less comfortable.

Overall, this dynamic growth in retail sales stands in contrast to the University of Michigan’s consumer sentiment survey that fell in early November to its lowest level in a decade.

How to explain what’s going on? People have some savings. Some people have higher wages, and both seem to be having a greater influence on how much people are willing to spend than price increases are having on how they feel about Biden’s job performance.

Claudia Sahm argues that some of the savings are due to government checks, and it was worth it:

“2021 began with economists arguing about $1,400 stimulus checks. Americans got them, but they got higher inflation too. Even so, the checks were very good policy.”

She compares the government’s reaction in the Covid crisis to their reaction during the Great Recession. This time, Congress went big:

“In 2008, Congress enacted one round of stimulus checks, totaling about $110 billion. During the first year of Covid, it sent out three rounds at close to $1 trillion dollars. A family of four got $11,400, which is about 20% of median family income.”

Here’s a chart showing the difference between the two policy approaches. Sahm plotted the value of the payments against the trend of personal income during both recessions:

The three rounds of stimulus checks provided relief to the families whose lives Covid disrupted and it helped bolster the economic recovery by creating jobs. The Covid relief paid the bills. Stimulus helped bring back paychecks.

Most people spend most of the money they make. With smaller take-home money during the crisis, many Americans made a dramatic cut in their spending. And big cutbacks in spending in an economy driven by consumers, led to big layoffs. So, the policy decision to put money in people’s bank accounts was key to keeping the Covid recession as short-lived as possible.

Clearly, the fast recovery came with a cost. Inflation is higher today than it has been in 31 years. But don’t let the inflation doom-sayers fool you: consumer spending, even after taking inflation into account, has been increasing even as millions are out of work.

New Deal Democrat shows us that total activity through the big Southern California ports is breaking records, and yet as we know, they still can’t keep up with the increased import demand:

Despite increased container handling capacity, this explains a great part of the current supply chain bottleneck since the global supply chain is incapable of handling a sudden jump in consumer demand. It partially explains why goods shortages and price pressures have mounted. That, in turn, is pushing up prices. The NYT quoted Aneta Markowska, chief financial economist for Jefferies, an investment bank:

“It’s the demand in the first place that’s causing prices to move higher…There is a supply shortage, but it’s not because of bottlenecks. It’s because we’ve had this big shock to aggregate demand and supply can’t respond quickly enough.”

There are still plenty of logistics bottlenecks. Yes, we’re buying much more stuff, and paying more for it. But households were sitting on a collective $2.5 trillion in savings built up during the pandemic. And millions of jobs have come back, so spend they will.

The Covid recession was a sharp and steep one, the deepest since the Great Depression. But the speed of recovery has been very fast, due in large part to the policy decision to put checks in people’s pockets.

This time, government worked for us.

Let’s have a Thursday tune. Everyone has heard 1981’s “Under Pressure” a masterpiece by Queen and David Bowie. It was covered by Fall Out Boy as part of ABC’s Queen Family Singalong on Nov 4. Lead vocalist Patrick Stump tries to sound like both Freddie Mercury and Bowie. Read the words and you’ll understand why Wrongo offers it today:

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Expanding The Dem’s Voter Base

The Daily Escape:

Artist’s Point, Monument Valley Navajo Tribal Park, AZ-UT – October photo by Alan Seltzer

Ruy Teixeira explains the political (and messaging) dilemma facing Democrats in 2021:

“A recent Gallup release confirmed that Democrats now have about as many liberals in the party as moderates or conservatives. That liberalism has been mostly driven by increasing liberalism among white Democrats which has spiked upward 20 points since the early 2000s. White Democrats are now a solidly liberal constituency. Not so black and Hispanic Democrats who are overwhelmingly moderate or conservative.”

The contrast is particularly striking among Whites who are college graduates and working class (non-college) nonwhites. The Gallup data show that two-thirds of White college grads are liberal while 70% of Black working class and two-thirds of Hispanic working class Democrats are moderate or conservative.

This takes on additional relevance because in 2020, 63% of voters did not have college degrees, and 74% of voters came from households making less than $100,000 a year. This should make it painfully obvious that, if issues and rhetoric that appeal mostly to college-educated White liberals are promoted, Democrats could see serious attrition among Democrat working class nonwhites who dislike those issues and rhetoric.

It’s hard to build a majority if you’re focused on a minority of the electorate. The internal conflict between Democrats, displayed by the Gallup poll mentioned above by Teixeira, pits the Party’s progressives against its moderates, its college-educated against its working class.

Like the modern Democrats, the Whigs cobbled together their party in the late 1830s out of an assortment of constituencies, many of whom had little in common. The Whig Party was formed to counter President Andrew Jackson and the Jacksonian Democrats. They were one of the two major political parties in the US from the late 1830s through the early 1850s and managed to elect two presidents: William Henry Harrison and Zachary Taylor.

By the mid-1850s, the Whigs were divided by the issue of slavery, particularly as the country had to decide whether new states would be admitted as slave or non-slave states. The Kansas-Nebraska Act of 1854 overturned the Missouri Compromise and allowed each territory to decide for itself whether it would be a slave or free state. Anti-slavery Whigs then spun off to found the Republican Party in 1854.

Is the modern Democratic Party on the precipice of becoming the new Whigs? The Whigs were a coalition of bankers, lawyers, and the Eastern mercantile class. In the South, Whigs worked to put a moral face on slavery. This allowed the Whigs to cultivate political distance from what was becoming a party of southern Democrats happy to extend slavery in new states, and a northern base of what we call “blue collar” (white) workers.

The Whigs couldn’t continue bridging the ideological distance between the Northern industrial states section of the party and the Southern agribusiness/slavery Whigs. Faced with this dilemma, the party broke apart.

If the Democrats are to remain one Party, a new poll by Jacobin, YouGov, and the Center for Working-Class Politics offers a perspective on how to win among working-class voters. They found that:

  • Candidates who prioritized bread-and-butter issues (jobs, health care, the economy), and presented them in plainspoken, universalist rhetoric, performed significantly better than those who had other priorities or used other language. That preference was even more pronounced in rural and small-town areas, where Democrats have struggled in recent years.
  • Candidates who named elites as a major cause of America’s problems, invoked anger at the status quo, and celebrated the working class were well received among working-class voters.
  • Potential Democratic working-class voters did not shy away from candidates who strongly opposed racism. But candidates who framed that opposition in identity-focused language fared significantly worse than candidates who embraced either populist or mainstream language.

The survey proposed multiple sound bites spoken by potential candidates to survey respondents to rank. The most popular sound bite was the “progressive populist” one:

“This country belongs to all of us, not just the super-rich. But for years, politicians in Washington have turned their backs on people who work for a living. We need tough leaders who won’t give in to the millionaires and the lobbyists, but will fight for good jobs, good wages, and guaranteed health care for every single American.”

This has implications for the 2022 mid-terms. Keep Trump off the table unless, by some miracle, the House committee investigating the Jan. 6 attempted coup refers charges to the DOJ and the DOJ acts on it. Another key finding was that those surveyed felt Democrats run too far left on certain priorities:

This is also key for building Democrats’ messaging in 2022. You can read the full report here.

Democrats need to think about what it will take to do two things simultaneously: How to stay together as a Party, and how to retain majorities in the House and Senate.

It won’t be simple, but everything depends on it.

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Monday Wake Up Call – Messaging Edition, November 8, 2021

The Daily Escape:

Catskill Mountains and Hudson River from Rhinebeck, NY – October photo by hikingfordonuts

Wrongo on Sunday pointed out that polling shows that only 30% of Americans think the US is on the right track, despite tons of good economic news. The poll was by NBC just before the November elections. It showed that 70% thought the US is moving in the wrong direction. It also showed Biden’s job performance approval rating at 42%, a sharp drop from 49% in August and 53 % in April.

In addition to the great jobs report, the record stock market, and a booming economy, in less than a year, Biden has withdrawn forces from Afghanistan and passed a substantial Infrastructure Bill. These are two Trump priorities that he couldn’t accomplish during his four-year administration.

The Infrastructure Bill is an unambiguous case in which Biden succeeded where Trump failed. You may think that the Afghanistan exit was messy, but both Biden and Trump were on that same page, and now, we’re out with minimal casualties.

So, what’s the disconnect between Biden’s performance and perception of his performance? It’s that Democrats have a huge messaging problem. Don Draper suggested that when you don’t like what’s being said, you should change the conversation.

From Diane Feldman: (emphasis by Wrongo)

“Most people want to feel safe in their communities, have health care when they need it, and have the opportunity for economic advancement for themselves and their children. Wanting those things is not very divisive along political lines nor by race, class, or gender….Voters are more likely to trust someone who articulates the goals and connects the policies to them than someone who argues the details of a particular policy or spending level. While there are differences between Democratic progressives and moderates on policy, most voters really don’t engage with those.”

It’s questionable if the Democrats could have pushed an upbeat, optimistic message in the election while they were also insisting that America urgently needed funding for social policies. That contradiction may be worth them exploring in more depth.

Virginia’s governor-elect Youngkin demonstrated that Republicans who use identity politics without embracing Trump’s extremist rhetoric can be highly competitive, including in solidly Blue states like New Jersey. And it’s worrying that Dems seem to believe that Youngkin was an extremist posing as a suburban dad (he is), who MSNBC’s Joy Reid said incited “white backlash” by exploiting “fake” and “imaginary” fears about the teaching of “critical race theory” (CRT) in public schools.

But that doesn’t explain the inroads Youngkin made in Blue suburbs. Voters usually consider education to be an important issue. They tend to trust Democrats to handle it better than Republicans. But, according to one Virginia poll the week before the election, Youngkin led McAuliffe by 3% among likely voters, but by 15% among K–12 parents.

So, like it or not, parental views about CRT and local control of public education were a real thing to Virginia voters.

Democrats must develop a plan for how they can avoid further political losses when Republicans across the country emulate Youngkin’s strategy. Here’s The Atlantic’s Yascha Mounk: (emphasis by Wrongo)

“For anybody who cares about making sure that Donald Trump does not become the 47th president of the United States, it is crucial that Democrats avoid repeating the mistakes that just put a Republican in Virginia’s governor’s mansion. It is impossible to win elections by telling voters that their concerns are imaginary. If Democrats keep doing so, they will keep losing.”

Democrats are led by a group of geriatrics who no longer are able to communicate. They have no real social media skills or traditional cable media machine (MSNBC isn’t the answer) to create messaging that resonates. Sadly, the traditional media is biased against them. If you doubt that, read the sub-headlines on Saturday’s front page of the NYT:

For the NYT, a Democrat win isn’t really a win. Democrats need to be crafting winning narratives. The only way that will happen is through ongoing, targeted, year-round campaigns. Not simply more speeches by geriatrics from behind podiums.

There are Democrats and Democrat-leaning voters out there. But in Red areas, they are demoralized and are sometimes hiding in plain sight. They think they are alone. Democrats have to show these demoralized Americans they are not alone, assuming the Party expects them to turn out and challenge the looming conservative majority.

Time for Democrats to wake up! Unless the messaging changes, the endgame is that Democratic voters will continue to sort into the most populated states, and Republicans will gain a permanent supermajority in the Senate. If current trends continue, in 2040 half of the US population will live in eight states.

To help them wake up, listen to Gil Scott-Heron’s “Pieces of a Man” from his 1974 album “The Revolution Will Not Be Televised”:

Sample Lyric:

I saw my daddy greet the mailman
And I heard the mailman say
“Now don’t you take this letter to heart now, Jimmy
‘Cause they’ve laid off nine others today”
But he didn’t know what he was saying
He could hardly understand
That he was only talking to Pieces of a man

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Saturday Soother – October 30, 2021

The Daily Escape:

A Halloween prayer – photographer unknown. Fear is everywhere in the world. Is there reason for hope?

In comments on Wrongo’s post, “Climate Change Summit, Part II”, blog reader Gloria R. asked for some suggestions about how older people could help with climate change, given that the outcome will only be clear after the elderly are long gone.

Good question. In some ways, climate despair is a new kind of climate denial, blunting the momentum for action, just when we need it most. Despair can become a self-fulfilling prophecy.

But young people aren’t feeling hopeless. The first truly global social movements dedicated to climate action and climate justice have gained in size and strength, beginning with Greta Thunberg’s Fridays for the Future and spreading to the Sunrise Movement in America and to climate justice movements around the world.

First suggestion: These movements are long on enthusiasm and short of money. Maybe geezers could fund them?

Second, capital continues to leave fossil fuel investments. According to a recent study. this shifting of financial assets could potentially stop the fossil fuel companies from giving lip service to climate change, particularly if they lose political power. Maybe geezers could direct their financial advisors to move their investment $$ away from these big emitters?

Third, state and local governments set building codes and local energy-use regulations. They also set zoning and land use rules. So, maybe geezers could get political on a local level and work to make what we tend to call the “living laboratories for democracy” (state and local governments) havens of better climate policies and practices?

Fourth, some of us don’t have funds to back up our ideals. One thing geezers can do that is costless is to send a letter to their kids about what they did to make sure the future isn’t an environmental wasteland. That’s the premise behind DearTomorrow, a project that’s archiving letters about climate change written by people to their future children, selves, or family. The idea is to foster personal engagement with the problems and solutions to climate change. DearTomorrow asks letter writers to focus on positive themes and why they have hope for future generations. Writing a letter to their future self or loved ones makes it personal.

Fifth, join Elders Climate Action, a group of grandparents who mobilize elders to address climate change. They’re trying to protect the well-being of their grandchildren.

There you go, Gloria (and all geezers), five ideas. There are many, many others.

Finally, the response to the Covid pandemic demonstrated how societies and economies can pivot very quickly in response to a global emergency. The response was far from perfect. The rich countries took care of their own citizens first, and then moved in some cases reluctantly, to help the poor nations. But for the medium-term, we now have a blueprint for the globe working together on a global crisis.

Other reasons for hope:

  1. The global economy is growing faster than global emissions. That means energy efficiency is increasing without any erosion in economic growth. The pandemic slowed this down, but the trend is clear.
  2. Energy efficiency is moving from the margins toward a new normal in the products we use. Think how commonplace LED light bulbs are today.
  3. The price of solar and wind power has plunged, and there’s reason to expect that the cost of energy storage, key to an electric power grid reliant on renewable energy, will decline over time.
  4. The supply of clean energy resources is growing faster than new sources of “dirty” energy. Now, the potential for electric power generated from clean, steady sources is becoming a reality.

That’s Wrongo’s brief take on reasons to be hopeful about our climate future. But that’s no reason to stop the effort to hold corporations and politicians accountable for making climate change a top priority. On Thursday at a House Oversight Committee hearing, four fossil fuel CEOs refused to declare climate change an “existential crisis”, using weasel words to avoid reality. They must be stopped.

Enough for today, it’s time for our Saturday Soother, when we take a brief break from whatever is going on in the Virginia governor’s race and spend a few minutes concentrating on the natural world around us. Here in CT, we’ve seen temperatures in the mid-30s. We’ve started leaf blowing. It will go on until at least the first week of December.

Time to bundle up, grab a comfy chair by a window, and listen to Broken Peach perform a live Halloween version of Soft Cell’s “Tainted Love” in zombie makeup. Broken Peach is a cover band from Spain:

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Climate Change Summit, Part II

The Daily Escape:

Mt. Princeton, Buena Vista, CO – October 2021 photo by Haji Mahmood

Biden sees the Glasgow Climate Summit as a legacy event that will bring about substantive change. But nobody believes that. Change doesn’t occur easily, and in the case of climate change, the forces arrayed against it are overwhelming.

Corporations will not give up profits easily. Individuals will not willingly pay more for goods once companies jack up their prices to maintain margins. Countries will try desperately to avoid being the first to bend the CO2 curve, knowing that their economic growth will slow precipitously.

Sometimes a change in culture has to occur before political change can begin. Think about the civil rights movement in the 1950s and 1960s, or the anti-war movement in the early 1970s. Those great political changes were built on a foundation of cultural change. One came from Black churches, and the other from college students.

We’re in the middle of a 2-year Covid debacle on top of a 13-year economic debacle. Before the Great Recession, if people weren’t making it, they (and everyone else) thought the problem wasn’t America’s politics or our economic system, but it was mostly about their laziness or lack of skills. Back then, we believed that anyone could make it. Few thought the system was rigged, and there wasn’t a widespread push for serious change.

Now, young people are tumbling to the fact the problem isn’t them – it’s the system. Think of it as a game of musical chairs, where the people sitting down never stand up when the music plays. From Ian Welsh: (Brackets by Wrongo)

“They [the young] think, ‘it’s you, not me’ where ‘you’ = society and politics. They may have…student loans, but they know boomers paid….[only] a nominal amount for university. They know they can’t afford a home or apartment, not because they don’t earn enough, but because wages have effectively gone down, and real home prices have gone up….They know medical care is too expensive and that drugs didn’t used to cost nearly this much.”

Young people are beginning to understand that without political change, their lives aren’t going to get better. In fact, they will probably get worse. This is true for the climate as well as for the basic inequalities in our society.

We need a political revolution to change these things, but America’s political system doesn’t like big changes. It does enable smaller cultural and political changes all the time. Our politicians give us intermittent reinforcement: They are amenable and sometimes eager to serve up limited forms of change, but not what most people want, or what the planet needs.

And the longer we rely on today’s politicians to save us, the farther we will be from the changes we need. Our political system is very resistant to change, as the prolonged debate over Biden’s social spending bill shows.

And there’s no political will at any level to change the system.

Still, it has to change, or it will self-destruct. When you are at Wrongo’s advanced age, the temptation is to say, “the future is hopeless.” But America’s youth will soon replace the elders in both political parties. They will not be staying quiet.

What must happen is a cultural change that a significant portion of the population will buy into. It doesn’t have to be everyone, but it has to be compelling to at least a 10%-20% minority which can then influence the other 80%-90%.

We live in a culture that values greed, power, and control over other people’s lives. So, the new culture must be built on a different set of values. Insisting on a different set of values is something we can all do both individually and collectively.

The Trumpists have attempted this with middle-aged White Americans. Steve Bannon knew that change must first happen culturally, that the culture has to want it, or at least allow it. But so far, the Trumpist appeal seems limited to 30% of the population.

The other 70% are on the sidelines, waiting for a reason to believe in something else.

If you doubt that young people can have an outsized impact, watch “The Children Will Rise Up!” an climate change anthem written by Nandi Bushell, who gained social media fame as a drummer, and Roman Morello, son of Rage Against the Machine’s Tom Morello. Here these two 10 year-olds perform with cameos by Jack Black and Greta Thunberg:

Sample Lyric:

They let the earth bleed to feed their greed.
Stop polluting politicians poisoning for profit.
While they are killing all the trees, now we all can’t breathe
As the temperature’s a rising, nothing is surviving.

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DOD Could Save $1 Trillion Without Changing US Security

The Daily Escape:

Sea Street Beach East Dennis MA – October 2021 photo by Ulla Wise

Rather than adding to the current vibe of general despair, a new report from the nonpartisan Congressional Budget Office (CBO) offers a number of interesting perspectives on how the US defense budget could sustain a $1 trillion cut over the course of 10 years.

The CBO report says that national defense programs could absorb a well-structured $1 trillion cut while still protecting the homeland and America’s allies from foreign adversaries.

From Responsible Statecraft:

“The new report outlines three different options for cutting the Pentagon budget by $1 trillion over the next decade — a 14 percent reduction. Doing so would still leave the department with $6.3 trillion in taxpayer dollars over the next ten years, in inflation-adjusted 2022 dollars.”

The report’s mandate was to look at how to adjust the size and focus of US military under smaller federal budgets. It created three broad options to illustrate the range of strategies that the United States could pursue under a budget that would be cut gradually by a total of $1 trillion, or 14%, between 2022 and 2031. They developed the options using their Interactive Force Structure Tool.

Here are the CBO’s three options for military force reduction:

  • Maintain the existing national security strategy but with fewer personnel.
  • Change the existing national security strategy to focus more on countering adversaries with international allies and coalitions.
  • Change the existing national security strategy to focus more on protecting America’s access to sea, land, and air and space.

In all three options, the CBO slashed full-time active forces, while leaving the less expensive reserves at their current levels. While acknowledging that “none of the plans are without risk,” they concluded that the Pentagon could reduce spending without sacrificing our security.

According to the report, in all three of CBO’s options, units would be staffed, trained, and equipped at the same levels as they are today, but there would be fewer units, or different combinations of units. The CBO chose to retain fully staffed units because, while personnel are expensive, partially staffed units would not be able to execute their missions. That would make the US more of a paper tiger than we are currently.

The CBO report also put the potential cut in historical perspective. While significant, a $1 trillion cut (14%) over a decade would be far smaller than the cuts America’s military spending in 1988 to 1997 (30%), and the 25% cut we had in 2010-2015. A 14% cut from fiscal years 2022 to 2031 would also still leave annual defense spending at more than it was at any point from 1948 through 2002.

Lindsay Koshgarian, program director at the Institute for Policy Studies (IPS) said:

“The US military budget is now higher than it was at the peak of the Vietnam War, the Korean War, or the Cold War….We are spending far too much on the Pentagon, and too little on everything else…”

A $1 trillion saving isn’t chump change. Those funds could be used to prevent future pandemics, address climate change, or reduce economic injustice. None of those are small matters. And they are all matters of political priorities.

No self-respecting Republican war hawk would have anything to do with cutting the military’s budget. And with the exception of a handful of left leaning Democrats, every other Democrat will shrink from the idea of reducing the military budget. It’s too risky politically.

We actually need Congress to solve three problems: Our revenue problem, our social spending/cost inflation problem, and our defense spending problem.

The CBO idea tackles the defense spending, but we need to consider taxes and revenue along with spending. We need to raise taxes on corporations and the wealthiest individuals while cutting that defense spending.

Turning to social spending, if you ask Americans what spending they want to cut, they will never say that we ought to ravage people’s retirement security. And 90+% of entitlement spending goes to the elderly, the disabled, or people who worked at least 1,000 hours in the past year. The big savings should come from reducing the growth in the cost of medical services.

Taking $1 trillion from Pentagon spending would be a great start, but we have other work to do.

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Lobbyists Are Hiring Democrats to Kill Tax Reform

The Daily Escape:

Sunset, Acadia NP, ME – 2021 photo by Rick Berk Fine Art Photography

From the NYT:

“The wealthiest 1 percent of Americans are the nation’s most egregious tax evaders, failing to pay as much as $163 billion in owed taxes per year, according to a Treasury Department report released on Wednesday. The analysis comes as the Biden administration pushes lawmakers to embrace its ambitious proposal to beef up the Internal Revenue Service to narrow the “tax gap,” which it estimates amounts to $7 trillion in unpaid taxes over a decade.”

The Treasury Department estimates that its tax gap proposals could raise $700 billion over a decade.

This is crucial, since Democrats are counting on collecting unpaid taxes to help pay for the $3.5 trillion spending package they are drafting. The House is set this month to begin advancing the spending package, but liberal and moderate factions of DC Democrats are divided over how much to spend and how to offset the cost.

Republicans are unified in opposition to the legislation, and the US Chamber of Commerce has vowed to defeat it. Among the other players are the Business Roundtable and Americans for Tax Reform. And fronting for them is a former Democratic Senator, Heidi Heitkamp. They have unleashed a lobbying operation targeting a small number of moderate Democrats in Congress who hold the balance of power.

Democrats hold a fragile majority in both Houses of Congress. Any hope to enact an ambitious domestic reform program requires that all Dems be on board. Moreover, increasing taxes on corporations and the very rich will be heavy lifts, given the opposition.

From NY Magazine’s Jonathan Chait: (brackets by Wrongo)

“Last week, Democratic senator turned anti-tax lobbyist Heidi Heitkamp, who represented North Dakota for one term before losing in 2018, appeared on CNBC to make a surprisingly emotional appeal against President Biden’s plan to close a notorious loophole for the wealthy. The loophole, called “stepped-up basis”…[that] allows capital gains to escape any tax at all as long as the owners pass the asset on to their heirs before they sell it.”

It turns out that Heitkamp is one of several Democrats lobbying against the Biden tax plan. Chait cites former Democratic Congressman Nick Rahall, who published an op-ed in his hometown West Virginia newspaper advising Democrats that they:

“…can avoid alienating rural states by keeping family-owned businesses and farms in mind.”

Former Democratic Senator Max Baucus (MT) has also stepped forward to write an op-ed advising Democrats that their political fortunes hinge on maintaining low tax rates for wealthy heirs.

The NYT reported that Heitkamp was recruited to the anti-Biden side by superlobbyist John Breaux, a former Louisiana Democratic Senator and Congressman, who once confessed:

“My vote can’t be bought, but it can be rented.”

Washed up politicians all move on to their second act: Monetizing their influence.

Heitkamp told the NYT that she’s finding a receptive audience among potential swing voters in rural areas, especially owners of family farms, even though Democrats say those voters would never be affected by the proposed tax changes:

“This is very consistent with my concern about revitalizing the Democratic Party in rural America….You may want to do this…but understand there will be risk….”

Is her point that if Democrats don’t preserve the loophole that allows fabulous amounts of wealth to escape taxation when passed down to wealthy heirs, they might alienate hardscrabble rural voters?

Will Dems risk losing more of those voters if they put a crimp in the elites’ efforts to maintain entrenched and inherited privileges across generations? Whatever happened to the narrative that rural Real Americans™ voted for Trump to protest America’s rigged economy?

Rural people, like everybody else, want elected officials who will have their backs and fight for them.

We’ve had this kind of manipulation for the last 50 years. It’s how we got a society where some can buy $3 million weekend “cottages”, while so many other Americans line up at food banks or can’t get basic health care.

It’s true that enacting a big tax hike comes with risks: Corporations and the wealthy will fund a lot of Republican TV ads attacking Dems over it.

The risk is worth it. Otherwise, for every dollar in tax hikes Democrats concede to Republicans and the US Chamber of Commerce, they will have to give up a dollar in spending on programs like Medicare, Medicaid, or the child tax credit.

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Don’t Forget the Debt Limit

The Daily Escape:

After Hurricane Ida, Grays Beach, Cape Cod MA – photo by Casey Chmieleki

With all the screaming headlines about Afghanistan, Texas anti-abortion laws and the march of the Delta variant, you probably missed that the US government is running out of money. Reuters explains it:

“Leaders of the Democratic-led Senate and House of Representatives are expected to force votes to lift the $28.4 trillion debt limit in late September. The limit was technically breached on July 31 but is being circumvented by Treasury Department “extraordinary” steps.”

This is an unavoidable political issue for both Parties, because while people dislike the idea of more government debt, they really like the goodies that come along with that debt.

This is happening while the Democrats are jousting with each other, trying to find 50 Dem votes for the bipartisan infrastructure bill, a budget resolution, and a budget reconciliation bill. But they also need to work on increasing the debt limit. From Ed Kilgore:

“The debt limit was suspended in 2019 as part of a two-year budget deal between Congress and the Trump administration intended to postpone major fiscal fights until after the 2020 elections. The deal expired on August 1, 2021, with the effect that the debt ceiling was adjusted upwards to the level of debt as it exists right now.”

Accruing debt above $28.43 trillion requires an increase in, or suspension of, the debt limit. At current levels of expenditure, the government’s checking account, called the Treasury General Account (TGA) at the Federal Reserve Bank of New York, will hit zero in mid-October. It can be extended by “extraordinary measures” into November, which is when the US government would begin defaulting on its bills.

The politics of government funding and increasing the debt limit are always a farce, and it’s no different this time. Republican Senate Minority Leader Mitch McConnell has already announced that Democrats cannot expect a single Republican vote for a debt limit measure right now.

That’s a political problem for Democrats, because a debt limit increase or suspension is subject to the Senate filibuster, requiring 60 Senate votes unless there’s some way around — like including it in a filibuster-proof budget reconciliation measure.

McConnell helpfully suggested that Democrats should just include a debt limit increase in the Fiscal Year 2022 budget-reconciliation bill. But that would guarantee Republicans could “blame” Democrats in the 2022 mid-term election for an increase in government debt.

The foul Republican tradition of trying to hold Democrats hostage when an increase in the debt limit is required, only goes back to the odious Newt Gingrich in 1996. We all know how the farce ends: Congress will avoid default at the last possible minute, just as it has done 78 times without fail since 1960, after concessions are extorted from the other side.

It’s a farce because Congress has already appropriated the funds to be spent and to be borrowed. It has told the Administration in detail how to spend those funds. Now Republicans in Congress want to say (again): “Nope, you can’t borrow the money to cover what we told you to spend”.

Republican Congress critters know we must pay our bills, but for myriad cynical reasons  ̶  or just plain political incompetence, they keep the issue alive budget year after budget year, and vote after vote.

The debt limit shouldn’t be increased; it should be repealed. The passage of a budget or any other legislation has an implicit expectation that the government will need to raise x and/or spend y. It’s really that simple. Congress should bite the bullet, and never again need to fight about it.

When they debate the debt ceiling, remember the only reason it’s happening is because one half of our government is good at politics but has no ethics, morals, or sense of patriotism, while the other half of our government is breathtakingly bad at politics.

Eventually, it will be obvious that the Republicans are really fighting about increasing taxes on corporations and the ultra-rich.

We all would be better off if this bullshit ended, and Congress got on with real work.

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The Afghan Refugee Problem

The Daily Escape:

Cathedral Valley, Capitol Reef NP – photo by Richard Strange

The White House reported that 21,600 people have been evacuated from Kabul in the last 24 hours, bringing the total to 58,700 persons evacuated. But there’s already a 50,000-person backlog for US visas for non-governmental organization workers.

Today, let’s talk about 1) Where these Afghan refugees are headed, and 2) The Special Immigration Visa (SIV) program in the US that has come under criticism from politicians and the media.

Let’s start with the SIV program. The State Department has allocated 50,000 SIVs for Afghanistan. PBS reported yesterday that 34,500 of them are already allocated, while about 300,000 Afghans have some history of working with the US, and therefore, may be at risk of reprisal from the Taliban.

Wrongo listened to Congressman Mike Gallagher (R-WI) who is trying to assist a few Afghans with US visas, say that the reason for the backlog is lack of planning by the Biden administration. That’s untrue. Sen. Chris Murphy (D-CT) introduces some reality into the discussion of the SIV backlog:

“Over the last decade, Republicans have pushed to intentionally create a massive backlog in the Special Immigrant Visa (SIV) program – the one we use to bring Afghan partners to America, by putting onerous conditions on the applications…In 2016, Obama asked to increase the cap for the SIV program. Senate Republicans objected. Then, the Trump Admin started slowing down SIV processing. When Biden took over, there were 10,000 unfilled visas, despite 17,000 applications in the pipeline.”

Sen. Murphy continues: (parenthesis and emphasis by Wrongo)

“Obama admitted over 2,700 Afghan refugees. Trump admitted 400, bc (because) he had dismantled the refugee system. Biden had to rebuild it. And today Trump Republicans are making it clear they will oppose bringing more Afghan refugees to the US. Steven Miller: ‘Resettling [Afghans] in America is not about solving a humanitarian crisis; it’s about accomplishing an ideological objective to change America.’”

Is anyone more repellent than Steven Miller?

Any reporting by the media about the “chaos” in Afghanistan that doesn’t include these facts, isn’t worth your time. Also, let’s differentiate between what’s happening within US control, from what’s happening beyond our control: All the chaos is happening outside of the Kabul airport gates.

Inside, we’re moving thousands of people in a largely orderly fashion to intermediate countries, where the process of their immigration can begin.

This is by far the biggest military evacuation in US history, and it’s being handled surprisingly well. That might change in an instant, anything could happen. But so far, the US media has been suckered into a chaos narrative that’s almost precisely the opposite of the truth.

GZero has an illuminating report on Afghan refugees. They say that the Afghan refugee problem will mushroom into a global crisis this year:

“More than half a million Afghans had already fled violence and instability in their country this year alone, even before the Taliban swept back to power a week ago. But an equal number of new refugees could very well hit the road in the next few months, despite Taliban efforts to stop people from leaving.”

Here’s a chart showing where Afghan refugees are located. Pakistan has nearly 1.5 million while Iran has about 800k:

GZero reports that Europe currently hosts 780,000 Afghan refugees, second only to Pakistan, along with another two million undocumented Afghans. Iran is worried that the Taliban, who are Sunni extremists, may intensify a long history of persecution of Afghanistan’s Shia minorities, pushing even more refugees across the Iranian border. GZero asks:

“This all raises the question: What happens if possibly millions of people who fear persecution get trapped inside their own country? They will probably join the ranks of the 3.5 million vulnerable Afghans who are already internally displaced.”

Since the White House just announced that the US will stick to August 31 as the end date for the airlift of refuges and the complete withdrawal of our troops from Afghanistan, no one knows what will happen to those people left in Afghanistan who have expressed a desire to leave.

Other countries could work to repatriate their citizens by negotiating directly with the Taliban. Most likely, GZero’s prediction of a large internally displaced population will come to pass.

Biden’s decision is certain to spark criticism at home and abroad. Those faulting Biden should answer: Weren’t they originally all for ending this war and taking our troops out? What is the US supposed to do when not even $2 trillion over 20 years was enough?

While you ponder what to do, listen to James McMurtry’s new tune,  “Operation Never Mind“, from his new album out this week, “The Horses and the Hounds”. The song is about how Americans think about our soldiers:

Sample lyric:

we got an operation goin’ on
it don’t have to trouble me and you
the country boys will do the fighting
now that fighting’s all a country boy can do
we got a handle on it this time
no one’s gonna tell us we were wrong
we won’t let the cameras near the fighting
that way we won’t have another Vietnam

(chorus) no one knows,
‘cause no one sees no one cares,
‘cause no one knows no one knows,
‘cause no one sees it on TV

don’t they look just like on “SEAL Team”
Lord don’t they look the best
when we trot them out at halftime
or the seventh inning stretch
they stand up in their uniforms and help us sell the show
dying by their own hands for reasons we don’t know

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Monday Wake Up Call – July 26, 2021

The Daily Escape:

Can Democrats move their agenda forward? Will we ever see an infrastructure bill, or a voting rights bill signed by Biden? How should Democrats deal with the voting restrictions that several states are putting in place to make it more difficult to win elections, and possibly cause the Dems to lose both Houses of Congress in 2022?

Even though most of the Party’s voters say that their representatives in DC should be willing to do whatever it takes to eliminate the filibuster, Democrats in Congress seem hamstrung by what some in Congress say is a need for bipartisanship on fundamental legislation, like the filibuster and voting rights.

This hamstringing is occurring throughout America. Consider New Jersey: Their Congressional redistricting process is technically bipartisan; but like in prior decades, it’s in a completely partisan place.

New Jersey has a bipartisan redistricting commission. Leaders from each Party appoint six members to the 13-member commission. Those 12 members then pick a 13th member who serves as a tiebreaker, and a safety valve to prevent partisanship. That sounds well, bipartisan. This is the fourth redistricting cycle where this process has been used for NJ’s Congressional redistricting.

The commission members picked an academic as the tiebreaker in 1991 and 2001, and a former state attorney general in 2011. Last time, the tiebreaking member sided with Republicans. Despite that, the resulting district maps worked out well for Democrats, as they currently hold a 10-2 edge in the NJ Congressional delegation.

New Jersey is a great example of how the Congressional map can change over a decade. The tiebreaker initially helped Republicans 10 years ago, but the demographics in those districts have changed, And Democrats now over-perform in their local Congressional races.

This time around, the 12 members of the commission were unable to agree on the 13th member of the commission. Both sides proposed a retired judge from their respective Parties. So now, according to law, it’s the state Supreme Court’s job to pick one or the other. The court has until Aug. 10 to decide on the tiebreaker.

From the New Jersey Globe:

“The State Constitution puts the burden of settling a tie-vote on the tiebreaker on the Supreme Court, who must now choose between the two candidates advanced by the commission: former Supreme Court Justice John E. Wallace, Jr., a Democrat, and former Superior Court Judge Marina Corodemus, a Republican….Make no mistake: this is an election. There are as many as seven voters.  The winner will either be a Democrat or a Republican. Election Day is August 10.”

All Supreme Court decisions are elections, elections with consequences. And some decisions are more consequential than others.

In NJ, Democrats and Republicans have never agreed on a map without employing a “bipartisan” tiebreaker. But since this the first time the two Parties couldn’t agree on a 13th member for Congressional redistricting, it’s the first time the Supreme Court option will be used.

If this isn’t unusual enough, the NJ Supreme Court will vote on the Congressional tiebreaker before the US Census Bureau transmits the census numbers to the state. This year, it’s delayed. It won’t happen until September 30, so the process of redistricting can’t begin until then.

Even though three of the Jersey Justices are Republicans and four were nominated by GOP governors, it’s unclear if the Supreme Court will vote in line with their Party’s choice. When state Republicans went to the Supreme Court to fight a Covid-related borrowing plan, the Court unanimously backed up a plan approved by Democratic Governor Murphy and the Democratic-controlled legislature.

This standoff is a reminder that even in states that don’t have an outwardly partisan redistricting process, bipartisan disputes are hard to avoid.

Time to wake up America! In these times when there is little to no trust between the Parties, there is no such thing as bipartisanship.

To help you (and President Biden, along with Sens. Manchin and Sinema) wake up, here is a band from Russia and Ukraine, Leonid & Friends, featuring the Rox Bros, doing a cover of Steely Dan’s “My Old School” from SD’s 1973 album “Countdown to Ecstasy”.

The song’s lyrics tell the story of a drug bust at Bard College (named “Annandale” in the lyrics) while both Donald Fagen and Walter Becker were students there, and how a female acquaintance had inadvertently betrayed them to “Daddy Gee” (G. Gordon Liddy, then a local prosecutor):

Steely Dan tunes demand absolute precision and attention to detail, and these guys nail it!

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