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January 28, 2011

Did the Senate just lose the future?

... the Senate decided that its current procedures are good enough. There's something slightly terrifying about that. Accepting a dysfunctional legislature is, as James Fallows and others have argued, one way to lose the future. Our problems -- debt, health-care costs, infrastructure, education, etc. -- are on autopilot. Our solutions are not. Obama can give as many speeches as he wants. If we don't have a political system capable of acting on our challenges, we don't have a political system capable of overcoming them.

via Ezra Klein at voices.washingtonpost.com

This may be a poltical blunder of colossal proportions for Democrats as well as continuing the long American nightmare of a dysfunctional US Senate blocking the functioning of the US administration, US judiciary, US House of Representatives and continuing the inability to move forward on myriad challenges.

Not that the filibuster reform would have been something great for Democrats, as it was crafted to reform the Senate for whatever majority.  And here's the difference between the parties.  

When Republicans (Senate Majority Leader of the time, Bill Frist) first made moves in this direction, they made it clear it would be to punish the Democrats and get their way: he called it the "nuclear option" (there's that good old right-wing violence metaphor ever in the forefront).  Democrats backed down a bit.  And they when the Republicans became the minority they ratcheted up filibuster obstruction to record levels, many times higher than had been seen historically.

Whereas the Democrats are proposing actual reform to open the Senate's process, encourage real debate, make the minority show their strength and hand, but create a workable system that, yes, allows the majority to get more done (which after all is what democracy is supposed to be about).

So Democrats have now legitimized the process of reforming the Senate via majority vote, but didn't do it.  And this reform moment will fade away.  -- Sidebar: Note that in this process, after about 15 years, Senator Wyden finally got the Senate to abolish secret holds.  15 years!  Just to abolish the secret hold. Holds still in place, just not secret.  (So, yes, Senator Merkley may still be a US Senator in a couple of decades (2050 anyone?) when reform of this magnitude might finally happen in the Senate.)

The moment has passed for real reform.  I do not expect it will blow this way again in my lifetime.

But Republicans aren't interested in good governance.

And that is the big danger for Democrats.

Now if the Republicans decide they want to shove more through when they are in power, they will use the opening created here by the Democrats to change the rules, but will not push though a Merkley-style reform.  It will be a power grab wolf in reform sheep's clothing.

Thank-you Senators Merkley, Udall and Harkin for trying hard and coming close.  And for having more optimism than I that you will succeed before it is too late.

January 27, 2011

The President Ignored the Elephant in the Room

I think Reich nails it. The central focus has to be on increasing the share of American wealth generation that goes to the middle class.

American (big) business is already supremely "competitive" having rebounded to record-breaking profits, but without that translating to American jobs and increased wages. If the middle class does better that provides a ladder up for others, it increases tax revenue without increased tax rates and it reduces the need for government programs to support the middle class. It would be far better for the economy and government goal to make being middle class self-supporting.

If, as the American economy doubled in size over the last thirty years the middle class incomes had also doubled, we would not be in the situation we find ourselves today.

... the president's failure to address the decoupling of American corporate profits from American jobs, and explain specifically what he'll do to get jobs back, not only risks making his grand plans for reviving the nation's "competitiveness" seem somewhat beside the point but also cedes to Republicans the dominant narrative...

The Great Recession wasn't due to America's loss of "competitiveness" relative to the Chinese or anyone else. In fact, American corporations are now enormously competitive, racking up some of their highest profits in history...


What the president should have done is talk frankly about the central structural flaw in the U.S. economy -- the dwindling share of its gains going to the vast middle class, and the almost unprecedented concentration of income and wealth at top -- in sharp contrast to the Eisenhower and Kennedy years.

Although the economy is more than twice as large as it was thirty years ago, the median wage has barely budged. Most of the gains from growth have gone to the richest Americans... So the central challenge is put more money into the pockets average Americans...

[This narrative] would give [Obama] a convincing counter-narrative to the Republican anti-government one. Government exists to protect and advance the interests of average working families. Without it, Americans have to rely mainly on big and increasingly global corporations, whose only interest is making money wherever it can be made.


via www.huffingtonpost.com

January 05, 2011

2010: The End of World War II

Military hostilities for World War II ended in 1945.  The fall of the Berlin Wall was a key turning point showing we had reached the beginning of the end of the Cold War which ended “officially” in 1991 with the dissolution of the USSR.  I would argue that 20 years after the end of the Cold War and we are finally and truly in a new era.

After World War II, the United States embarked on a possibly unprecedented effort in human history, to rebuild not only the allies but also rebuild the enemies of the war, using tools like the Marshall Plan and a new constitution and investment in and economic inclusion of Japan.  The goal was to raise the economic tide and thus lift all "country-boats".  Based on a model of non-military expansion of states and on inter-country trade rather than on wars and on monopolization of resources.  Russia declined to participate and with the advent of Communist China joining them in a bloc, the Cold War military and economic “containment” of their ambitions was sustained successfully for decades. Since then, economic integration has proceeded including them.

The fall of the Berlin Wall and declaration in 1991 of the end of the Cold War did mark a significant and and highly symbolic turning point.

But in 2010, we saw a remarkable economic economic situation: the United States economy struggling along with continued and expected unemployment near 10%, continued asset depreciation and many other weak signs from the Great Recession - the deepest economic slump with years forecast to recover housing and employment.  Yet the stock market did quite well on the strength of very strong corporate earnings. Earnings that would normally be depressed by a high unemployment and thus lowered spending rate. Earnings that were instead driven by overseas growth in sales and profits ... and hiring overseas, not here, as a result. Earnings that are expected to continue in 2011 well above the weakly growing US economy.

A strong US economy can help earnings, but earnings aren't primarilty dependent on the US economic market.  

The world economy is now largely, if loosely, integrated.  Many weak economies representing the vast majority of people around the world have grown stronger.  The most striking being the rise of China, which, in spite of huge numbers mired in deep poverty, now has a developing middle-class that is larger than the entire population of the United States.

And that worldwide integration of economies including Russia and China, lifting so many, is a great success, leveling the economic field by bringing others up.  The true end of World War II.

And that wasn't achieved via tax cuts for the rich (a third of the rich inherited their money, not earned it) and wishful thinking about how unregulated markets and the superrich would buy things to make it happen, but rather through deliberate policy choices and government investment financed by a tax system where those that benefited most financially from our system paid that forward in higher taxes. (The United States has the 23rd lowest tax rate of the top 25 economies of the world, so the problem isn't that our taxes are too high -- they are arguably too low.)

In this era, after years of denials successfully blocking timely action, global warming is now moving unstoppably with only the options of mitigation and adaptation, oil reserves have almost certainly passed “peak oil” as we have to go to ever greater and more bizarre lengths to obtain supplies, we have an tax system that encourages corporation to off-shore jobs to countries that exploit labor and defile "their" environment as if it wasn't connected to "our" environment.

What got us from 1945 to 2010 will not get us from 2010 to 2075.

Willful progress? The Tea Party's reactionary retreat? Libertarian's laissez-faire wishful thinking?  DC Republican's boorishness?  Which will best carry the US forward to 2075?

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