Sunday, July 08, 2012

Unemployment Would be Under 6% Without GOP Obstruction

The GOP has been on an economic wrecking mission ever since the election of Barack Obama - indeed we now know that leading Republican strategists and legislators met and planned a course of economic sabotage and complete obstruction on Obama's very first day in office.

This obstruction has had a huge price - a deliberate price that the GOP is betting the American people will blame on President Obama. GOP obstruction did not prevent the passage of ARRA - the American Recovery and Reinvestment Act - popularly know as "The Stimulus" bill of 2009 during the height of the economic disaster as the economy was falling off a cliff - the non-partisan Congressional Budget Office estimates that ARRA has saved up to 3 million jobs. But nearly every economic measure since then has been blocked by GOP obstruction, filibusters and brinksmanship.

What has been the result of GOP obstruction? It is hard to quantify what constant obstruction has cost - you could tally up estimates of every measure that came along, but not all would have passed - nor even been introduced if previous measures had been adopted that obviated their need. But we can look at just two big examples and get a minimal measure of the human cost to American citizens of a deliberate policy to destroy the economy in order to bring down the president; 1) austerity, and 2) obstruction of the 2011 American Jobs Act.

Austerity is madness - many in the GOP actually believe that austerity during an economic downturn is the right thing to do - even 'socialist' Europe was convinced of this - although most realize it is not true, and has no history of success - even Mitt Romney unwittingly admitted as much in an unguarded moment. But that hasn't stopped savage austerity on the state and local level - which has cost over 600,000 public sector jobs so far.

Normally in a recession and recovery government at all levels increase public employment - this has happened in every GOP administration - and much of that increase is funded by federal government grants to the state and local governments. But since the Stimulus, the GOP has blocked any substantial help for the states, and in GOP led states severe austerity cuts have been the rule - even including GOP governors rejecting projects fully funded by the federal government. The economic cost of this is far more than just those 600 thousand jobs - the spillover effect on private business and local economies has been devastating - when you factor in all these effects the total job cost of austerity has been estimated at 2.3 million jobs.

President Obama proposed the American Jobs Act in his 2011 State of the Union address, and spent the next year promoting it at every opportunity. Although expensive - in contained a combination of tax cuts and increases, along with direct spending, designed to increase consumer spending and lower the cost to business of hiring new workers. The CBO said the bill would not only have paid for itself within 10 years, but would have reduced the deficit by at least 6 billion dollars. According to an analysis by Moody's it would have created about 1.9 million jobs.

The result of GOP obstruction with those two things cost us 2.3 million jobs and 1.9 million jobs respectively. US employment as of May 2011 is about 155 million jobs, which means those 4.2 million jobs that the GOP has prevented account for 2.7% of the unemployment rate. But let's be fair, there is a small amount of overlap in those jobs - a small portion (about 8%) of the American Jobs Act would have gone to State and Local governments to pay for teachers, first responders and the like - although for the most part it would have just prevented further layoffs rather than resulted in new hires. Also it is very likely that without the economic wrecking of GOP obstructionism the labor participation rate would be higher - so instead of a reduction of unemployment to 5.5% it would be slightly higher, but still well under 6%.

Now just for fun, consider if we had done during this recovery what every GOP administration has done, and substantially increased public sector employment.
Without knowing how much we would have increased public sector employment we can't even make a firm estimate of how much better employment levels would be, but if we make the assumption that we increased the public sector by just half of the amount we actually reduced it - the total effect on the economy in both public and private sector jobs would be around 1.15 million jobs - which would push the unemployment rate below 5%.

That is the human cost of GOP economic obstruction.

Thursday, June 21, 2012

Fast & Furious Foofaraw

If you haven't been paying attention to the Fast & Furious scandal, you haven't been watching FOX News. The latest episode is Darrell Issa's House committee voting to hold Attorney General Holder in Contempt of Congress for not violating the law by providing documents he can't legally provide - such as classified documents identifying informants, and grand jury transcripts. Now they are talking impeachment because president Obama has taken the unprecedented step of invoking executive privilege to stop Congress from demanding documents it is illegal to provide.  By 'unprecedented' I mean that this is the first time Obama has invoked executive privilege - his predecessors did so repeatedly without any objections from these very same congressmen.

The Fast & Furious conspiracy, as laid out by Congressman Issa is that a time traveling Obama and Holder, went back in time (presumably using the same time machine Obama used to plant his fake birth documents and newspaper announcements in 1961 Hawaii) to the Bush administration and started a gun tracking program that allowed guns to be sold to gun runners going to Mexican drug cartels, in order to have those guns shock America with a wave of Mexican gun crime in order to gin up support for US gun control laws to take away our guns! The logic of this conspiracy was succinctly summed up by Stephen Colbert:  
Yes, very clearly, Obama started this gun tracking program in 2006, when he hypnotized George Bush. Then he secretly ordered Attorney General Holder to order the Justice Department, to order the ATF to order gun shops to sell guns to Mexican drug cartels, and then lose track of them, thereby panicking Americans to gin up support for the draconian gun control measures that Obama has never introduced."

Colbert missed that Holder would have had to have ordered then Attorney General Gonzales to start the program in 2006 - or AG Mukasey who oversaw the direction and development of much of it. Oddly Issa's committee has never sought testimony from Mukasey or Gonzales, or anyone else involved in the creation of the program, instead they have concentrated exclusively on the man who ended it - Holder, to expose his reasons for starting it.

Rachel Maddow's more professorial presentation on the Fast & Furious Foofaraw's intersection with the GOP, NRA and FOX News:

We can expect the House to approve Contempt charges against AG Holder in the next few days on a strict party-line vote.

Clearly the Fast & Furious 'scandal' is a flimsy fantasy ridden incoherent conspiracy theory that can't hold up to even cursory scrutiny - yet the GOP leadership is going full-monty in pinning the blame for it on AG Holder - the man who ended it - not started it. Why?  Democratic leader Pelosi thinks they are trying to destroy Holder so that he can't block their voter suppression efforts.

Thursday, March 29, 2012

SCOTUS on Obamacare - will it do the right thing for the wrong reasons?

This may be the most purely political Supreme Court of the United States in memory. And that may bode well for the Obamacare case before the court.

The mandate issue under consideration is laughable. There is nothing unique or unusual about the 'mandate' - which is not even a mandate - the "tax penalty", approximately $700 for those who are able to obtain Medical Insurance but choose not to, is unenforceable. If they choose to not add the amount to their tax returns, there is no consequence, neither the IRS nor anyone else has the authority to do anything about it, no charges, no prosecution, no attempts to collect it. If you fail to follow the mandate, the penalty is completely voluntary.

The argument that the government cannot require citizens to pay for something they don't want to is childish and wrong. It happens all the time. Taxes, licenses, garbage fees. So they pretzel their logic to say that what makes it unconstitutional is making people purchase it from a private source, even though you can be coerced to buy from the government - such as Social Security and Medicare social insurance contributions. Again, nonsense. One of the earliest acts of the Republic was to require merchant marines to buy private hospital insurance. Another required all free men of militia age to purchase and keep a firearm. Laws against public nudity require the purchase of clothing from private sources.

The 'broccoli' argument is the most absurd. Usually run along the lines of "if the government can require you to buy health insurance, what is next, broccoli?". As if the idea of buying broccoli is so morally bankrupt that anything that starts the slippery slope that ends with broccoli is evidence of unequaled tyranny. Here's the thing, not buying health insurance is very very costly, since lack of insurance does NOT prevent the delivery of medical care, it just pushes the cost onto others. This is not theoretical, we know that right now, every private health insurance policy in America is about $1000 more expensive because of the cost of treating the uninsured. People who can afford insurance but choose not to buy it are transferring real and substantial costs to others. This does not happen with broccoli.

On legal and logical grounds the case before the Supreme Court is groundless. But this is a political court, and this is a partisan political issue, so here it is. We know that a solid majority of the court is aligned with the political forces that want this law overturned. But will they?

Consider this. This court took this case politically, they will rule on it politically. But what is the bigger picture? Chief Justice Roberts is already worried about his troubled legacy, particularly due to his pivotal role in the disastrous Citizens United outrage. Scalia is concerned about his own reputation for making principled judgments narrowly focused on the minutia of constitutional law and history, yet always seems able to bend them to reach his desired political result. Alito is shedding his "Scalito" reputation as Scalia's second vote. Kennedy, who values his role as 'reasonable swing vote' has been anything but, he almost always swings right in politically charged cases. Only Thomas is unapologetically always political. The other 4 conservatives have reasons concerning reputation and legacy to at least consider being something other than a rubber stamp. But they are still going to make a political decision in this case.

What factors might influence their political decision? Well ... there is an election going on. What do you suppose will be the political fallout of a decision that overturns, or guts the Affordable Care Act (Obamacare) just three months before the election? Probably not much on the presidential race, by all accounts the GOP will be putting up the most unpopular nominee in decades (no matter who gets the nod), so they will depend on their Citizens United enabled billions to use saturation attack ads to close the gap. The presidential election will depend on if overwhelming advertising is enough to decide the vote. But that is not the only election. The GOP has a commanding majority in the House to defend, and only need switch two or three seats to take the Senate. But in the aftermath of an anti-Obamacare SCOTUS decision, what happens? Outrage and anger in the Democratic base, and not a few independents too. When they lose it, they will suddenly notice all the very popular things in ACA that they and even Republicans like and overwhelming want, all taken away. Lots of outrage and anger.
Elections very seldom turn on persuasion, they are decided by which side is most effective at turning out its partisans and discouraging its opponents partisans - that's how negative ads work, they don't change minds, they make people stay home. But an anti-Obamacare decision will angerize the Democratic base, and they will turn out in numbers not seen since ... 2008. The GOP base is already energized in its hatred of Obama, and an anti-Obamacare decision will not increase that, indeed they may become less energized in their satisfaction with the political win and its slapdown of Obama.

So there you have it, the most likely political outcome of the Supreme Court overturning or gutting Obamacare will be new and larger Democratic majorities in the House and Senate - with the ability to repair Obamacare, or even replace it with single payer. That is what those four conservatives will have to consider while making their political decision on Obamacare. Are they willing to make a bad decision, that fulfills their partisans' political desire to kill Obamacare, knowing it will lead to GOP defeat and lasting harm to the conservative movement? Or will they burnish their reputations and save the GOP (despite itself) by reluctantly upholding it.

I don't know, they have proven themselves to be incredibly reckless, but I think there is a very good chance that at least one of them will choose to make the right decision for all the wrong reasons - and one is all that it will take.

UPDATE  June 28, 2012

ACA UPHELD by US Supreme Court

And the answer is in - by a 5 to 4 decision ACA has been upheld by the Supreme Court. As suspected the swing vote was Chief Justice Roberts - who is protecting his legacy, and more importantly - the Republican majority in the 2012 election.

It is surprising that the remaining 4 conservatives - including the so-called 'moderate' Kennedy - all dissented and were apparently willing to completely overturn ACA despite the likely adverse consequences for the GOP.  However - I suspect one of the other conservatives would have found a reason to switch his vote if Roberts hadn't - partisanship trumps ideology for this conservative block, which is why they are always willing to be the most extreme 'activists' to uphold GOP interests no matter how much they claim to be strict constructionists.

The majority decision upheld the so called mandate - correctly identifying it as a tax (a peculiar voluntary tax at that) well within the Constitutional authority of Congress.
More perplexing is the ruling on the Medicaid expansion that is designed to expand Medicaid to 18 million Americans who do not qualify under current rules. Medicaid (not to be confused with Medicare) is a joint federal/state medical program for the poor. The expansion in ACA would extend it to some of the working poor and those in their households who currently earn more than the current limits. ACA required the states to participate in the expansion or lose all of their Medicaid matching funds - which 26 states argued is unconstitutional coercion. This type of 'coercion' is very common - for instance highway funds are subject to a number of conditions, which will result in a state not receiving their share of federal highway dollars if they don't meet them - the most well known examples were the 55mph speed limit back in the 70s, and the requirement to raise the drinking age to 21 in the 80s. It is not inconceivable that this Obamacare ruling could result in lower drinking ages in some states - perhaps states that would like to attract college tourist dollars like Florida, Louisiana or Texas.

What the Medicaid decision won't result in is states not extending Medicaid coverage - because there is no coercion - the federal government will be paying for 100% of the expansion cost for the first 3 years (2014-17) and it is unlikely that Congress will not extend federal payments after that. Despite the fact that 26 states filed suit against the Medicaid expansion provision, since it is of no cost to them only the most recalcitrant of ideologues would face the wrath of their constituents by turning it down - which leaves only Florida, Ohio and Wisconsin as possible states to eliminate health care for the working poor for absolutely no reason at all. We'll see if Scott, Walker or Kasich are willing to be that reckless - I'm only betting on Scott.