Press "Enter" to skip to content

Income share agreement

June 30, 2019

politicalwords

Conservatives should have sympathy for millennial borrowers, who did everything their parents and culture told them to do to be successful, only to become the most debt-laden generation in history. Countering a culture of credentialism mania with apprenticeships and trade alternatives is a positive step, but the first rule of finding yourself in a hole should be to stop digging. There’s no reason for the average American to subsidize the elite sorting mechanism universities have become.
► Inez Feltscher Stepman

No, it’s not another term for “marriage,” though that does offer an indication of just how involved this can get.

The use of “share” and “agreement” give the phrase an uplifting, almost cheery, sound, but the underlying consideration here is debt – the mountains of nearly unpayable debt not all but many college students face. After mortgages (which most of the time are a manageable and ordinary part of middle-class living), the largest mass of debt in the United States is higher education debt, more than $1.5 trillion. In many cases that debt is in such large amounts that final payoffs of them seem unseeably far into the future.

This is a new development. During my college days in the 1970s, I took out a couple of student loans, but they were small, and I paid them off without difficulty in four or five years. The loans were small because the costs were too. Finances were not a reason, in those days, a person could not go to college (at least, some decent college) if they chose to.

Conditions have changed. The situation is not good for anyone involved, but especially for those buried under all this debt. One theoretical advantage in a search for solutions is that, increasingly, student debt is not scattered among endless numbers of private lenders but under the umbrella of the federal government; the advantage is not that the federal government is any better as a lender but that it is just one unit to deal with,k and susceptible to congressional action.

One approach for dealing with it, a method that seems to be gaining in popularity, is the “income share agreement,” which is a variation on how a loan will be repaid. Instead of imposing a set amount due every month (depending presumably in part on the size of the loan), the ISA is more flexible: It would vary in size depending on he income the former student receives once employed. A law student who goes to work for a top white-shoe firm might kick in more, while one who works as a public defender might pay less. An in-demand physician would may more dollars per month than, say, an elementary school teacher.

The idea has some appeal (which is about 40 years old), as a way of matching ability to pay with liability. But the story could get more complicated. The debt size in many cases is so enormous that it might not plausibly be repaid in a working lifetime - and what then? (The law is very hard on discharging student loans, albeit not impossible under some conditions.)

That’s only one of the questions.

There’s a financial-structural question, which is beginning to arise as private lenders gradually move back into the business. As writer Malcolm Harris put it, “If you can convince investors you’re going to be rich for the rest of your life, why spend your college years poor?

I.S.A.s bridge the gap. It’s hard to think up a better advertisement for free-market capitalism. But I.S.A.s are premised on the idea of discriminating among individuals. Once the high-achieving poor and working-class students have been nabbed by I.S.A.s, the default rate for federal loans starts to rise, which means the interest rates for these loans have to go up to compensate. A two-tiered borrowing system emerges, and the public half degrades.”

This leads to developments that could even “reshape childhood,” encouraging K-12 students to redraw their K-12 learning and activities to suit not only college admissions offices but also lenders - to persuade that they’d be a good lending risk.

The ongoing steps where this might lead - not least in the discouraging of students even thinking about entering much-needed but less-profitable careers - could take a dark path.

University of Chicago economist Gary Becker said in one study that “Economists have long emphasized that it is difficult to borrow funds to invest in human capital because such capital cannot be offered as collateral and courts have frowned on contracts which even indirectly suggest involuntary servitude.” But under enough financial pressure - we’re talking about really big money here, past the trillion-dollar mark - how long will courts continue to look at it that way?

Which takes us back to “share” and “agreement,” and the question of how such a fine-sounding concept can turn into something so dark.
 

The fault is ours

The fault is ours

June 29, 2019

johnson

Historians, philosophers and ethicists have been debating for nearly 60 years – perhaps longer really – the notion that a person can do evil without being evil. That question is at the heart of philosopher Hannah Arendt’s description of Adolph Eichmann, the Nazi bureaucrat who implemented Hitler’s slaughter of six million Jews during World War II.

Eichmann was abducted from his Argentine hiding place in 1960, taken to Jerusalem, tried for war crimes and executed in 1962. Arendt covered Eichmann’s trial for The New Yorker and found the defendant to be a rather ordinary, unassuming little man. Thomas White wrote about what Arendt called “the banality of evil,” and says she found Eichmann “neither perverted nor sadistic”, but “terrifyingly normal” acting “without any motive other than to diligently advance his career in the Nazi bureaucracy.”

It is an interesting – and still controversial – notion: that “normal people” are capable of abnormal, even horrible things in service to their own ambition, or perhaps due to their inability to assess the moral dimensions of their actions.

Watching the recent viral video of a U.S. Justice Department attorney appearing before a panel of three federal judges and being unwilling to say that migrant children in government custody being denied basic sanitation, soap and a toothbrush, or a decent place to sleep was unacceptable left me thinking again about Hannah Arendt’s theory.

And before you think that I’m equating a government lawyer with a bureaucrat of the Holocaust, I’m not. The question is rather about the human capacity, even the need, to look the other way, to disengage, to accept the unacceptable, to reduce what we all know to be wicked, wrong or malicious to, well, the banal, the commonplace.

A bumper sticker was in wide circulation some years ago: “If you’re not outraged you’re not paying attention.” It should make a comeback.

The fault is in all of us. We too easily become numb to an outrage, a scandal, a violation of norms and traditions, particularly if it all fits comfortably with an otherwise settled and pleasant personal opinion.

Kamala Harris, the Democratic presidential candidate and senator from California, for example, recently said if she happens to become president she wants to see that the Justice Department goes “forward with those obstruction of justice charges” against Donald Trump. Harris was roundly criticized, as she should have been, for saying, as the Brookings Institution’s Benjamin Wittes wrote, “that as president you would supervise that person’s prosecution, as Harris did, is poisonous stuff in a democracy that cares about apolitical law enforcement.”

Trump, of course, has done the same thing by encouraging “lock her up” chants at his rallies and suggesting that his political opponents should be investigated or in jail. That Trump would engage in such poisonous stuff is wrong and that a Democrat would mimic the poison is just as wrong. You cannot accept one and condemn the other unless you have become numb to outrage.

When the president of the United States was once again credibly accused – actually for the 22nd time – of sexual assault, a crime he actually admitted to in the infamous Access Hollywood tape, there was a collective yawn. Many major news organizations barely covered the story, even when Trump dismissed the allegation bizarrely saying: “I’ll say it with great respect: Number one, she’s not my type. Number two, it never happened. It never happened, OK?”

One of the great normalizers of the abnormal in our times, South Carolina Senator Lindsey Graham, simply said: “He’s denied it and that’s all I needed to hear.” Graham, of course, had a much different reaction to Trump’s comments in that infamous videotape in 2016: “Name one sports team, university, publicly-held company, etc. that would accept a person like this as their standard bearer,” he said. That was then. This is now.

“When you know you can lie constantly and effectively not be held accountable,” the commentator John Ziegler wrote recently, “it is like an offensive line in football free to break any rule they want, secure that even if they get called for holding, the penalty will not be enforced.”

We believe what we want to believe and we discount the lies we find at odds with what we want to believe. We casually dismiss a troubling outrage if confronting it requires a reckoning with our own values. In such a situational world the inconvenient is just a temporary nuisance. How else to explain a government official justifying keeping kids in abhorrent conditions as if the government had no power to change those conditions?

Or a Saudi journalist working for an American newspaper is brutally murdered with credible evidence the Saudi crown prince was involved, but those inconvenient facts aren’t allowed to stand in the way of selling billions in military equipment to a profoundly corrupt Saudi government. An Idaho politician is in a key position to make a stink. His silence is deafening.

The chief executive repeatedly demeans the head of the Federal Reserve, undermining more than 100 years of tradition that the country’s central bank is insolated from political interference. An Idahoan chairs the key Senate committee that plays a critical role in ensuring that independence. He has never said a word, let alone used his influence to affect such behavior.

A top Democratic appointee in Idaho state government, a state tax commissioner, mysteriously is placed on “administrative leave” and just as mysteriously returns. No explanation is offered. No accountability is demanded. Democrats are silent. Republicans are mute.

Offer a hundred other examples of the normalization of outrage from the perspective of your own worldview, but also ask why is any of this acceptable? Why has such behavior on so many levels in so many ways become banal?

The fault, as the bard so eloquently wrote, is not in our stars, but in ourselves. If you’re not outraged, you really are not paying attention.
 

Those Oregonians in Idaho

Those Oregonians in Idaho

June 28, 2019

stapiluslogo1

State lines can make quite a difference, which is one reason a gaggle of Oregon Republican legislators are - as this was written - hiding out in Idaho.

They might re-cross the state line soon, but the reasons they’re in Idaho and why the timing matters reflect several differences between the states - procedural, more than philosophical.

Not to mention the substantive issue that got it started.

That issue is climate change, not - the say the least - a high priority at the Idaho Legislature. At the Oregon legislature, where Democrats control both houses, climate change is a bigger deal. Democrats there have been trying for some years to pass a strict “cap and trade” bill, with some tax increases included, with climate change in mind. For years those efforts fell short because in Oregon unlike Idaho - for many fiscal bills, a three-fifths majority vote is needed in each chamber to pass. Idaho has no such requirement. (Even if it did, the minority Democrats wouldn’t have enough votes to stop a measure by themselves.) For many years in Oregon, up until 2018, Republicans held more than two-fifths of each chamber, so they were able to (and often did) block a number of bills Democrats proposed.

In 2018 Oregon Democrats won supermajorities - meaning 60 percent of the seats - in both chambers, so they were freed to push harder. They did, finally teeing up a cap and trade bill for passage.

That was the prompt that caused Senate Republicans to walk out. Disagreement on a single bill - is the sole reason they gave for walking out and declining to participate at all in legislating.

Since the Senate Republicans occupy just 11 out of 30 seats, that would seem to give them little room to stop the bill. In Idaho, they wouldn’t have any room at all. In Idaho, a legislative chamber’s quorum - the number of members who must be present for business, any business, to be transacted, is any number over half. In Oregon, it takes two-thirds. With 11 senators out, everything ground to a halt.

The senators, you may have heard, have fled the state and some of them at least are said to be holed up at an undisclosed location, or more than one, in Idaho.

They probably are watching the calendar, too, because here’s another difference between the states: Oregon legislative sessions are required to end by a specific date. Idaho’s can in theory go on and on, and a few have gone past 100 days though most last about three months or so. Typically, Oregon has one session lasting about five months in odd-numbered years and one little more than a month long in even years. But unlike in Idaho, they do have deadlines. For this year, the state constitution requires adjournment by June 30.

At the time the Senate Republicans walked out, a bunch of key pieces of legislation, including the state budget, were still not yet passed. Most of these things were not especially controversial, but they do have to be done, and can’t be while a quorum is lacking. Maybe they’ll return because the Senate Democrats have agreed to take the cap and trade legislation off the table.

There are workarounds. A special session to get the budgets passed, for example, could be called, and there are other approaches too.

But at some point, Oregon legislators, especially those who didn’t take an Idaho vacation this year, might take a look across the state line at some of the procedural handcuffs that aren’t in place in Idaho, and start thinking about whether a few changes in their own procedures might be helpful. The idea that a third of one half of the legislature could hijack the overall work of the state probably isn’t something most Oregonians or Idahoans would see as a good idea.
 

Critical access

Critical access

June 27, 2019

schmidt

Back before we got into a stalemate when talking about healthcare costs, long ago when I had good knees and my hair wasn’t grey, funding for small town hospitals was recognized as a problem.

After Montana demonstrated they could support critically needed remote hospitals with a federal project, Congress rolled the “Critical Access Hospital” designation into the Balanced Budget Act of 1997. Do you remember when we had balanced budgets?

Medicare had been working hard to cut hospital spending since the 1980’s and had instituted a payment system to hospitals based on a global fee. If a patient was admitted for pneumonia, the hospital got paid a flat amount, whether it took 2 days or 7 days to get the patient back on their feet. But the value of having small hospitals especially in remote areas could not be ignored, so the “Critical Access” designation called for a different payment system to such hospitals.

These hospitals were paid on a cost-plus basis. Whatever it cost, Medicare would pay for the services based on their fee scale, plus a small percent; currently it’s +1%.

But the hospitals had to fulfill certain criteria. They were supposed to be more than 17 miles by primary road, or more than 35 miles by secondary road from another hospital. They were also supposed to have less than 25 hospital beds.

Here’s the catch, and it’s a big one. No congressman wanted to go home having voted to close Podunk Hospital in their district, so the bill allowed states to declare a hospital a “necessary provider” and escape the distance requirement. And states opened the barn doors.

As it stands, approximately 65% of CAH’s are between 17 and 35 miles from another hospital. I live in a town with a CAH 8 miles from another CAH; but it’s across the state line into Washington. Just down the hill from me another CAH is less than 5 miles from a regional medical facility, also across the state line.

Most small-town hospitals in Idaho serve remote and rural communities. They deserve such payment consideration. But I walk past one every day I go to work that is abusing the critical access system.

I guess what bothers me the most about this abuse is the billboards and radio ads I see and hear every day for my town hospital AND for the CAH just 8 miles away across the border. The hospital in my town has a full-time director of “promotion”; I suspect the same is true across the border. If they both are so critical, why do they need the media blitz?

Many see this problem. The Obama administration made proposals to reduce Medicare payments to CAH’s to a flat 100% of costs and eliminate CAH designation for hospitals less than 10 miles from another hospital. It was met with howls of protest from the American Hospital Association; didn’t get far. The Trump administration has revived another Obama rule that would require more patient protections and documentation; more regulations, more costs. We’ll see how far it can go.

I don’t see the advertising by CAH’s as a huge cost. It just tells me their designation as “critical” might be more a political favor than a community reality.

One thing is for sure; if a small-town hospital has to compete against the big city mega-medical centers on a level payment field, most of us in rural Idaho will end up driving a long way for hospital care.

It’s time to start analyzing just what care should be given in small hospitals, then paying appropriately for it. The “critical access” designation system needs a big overhaul.
 

Morality

June 26, 2019

politicalwords

Our first president said that virtue of morality was a necessary spring of popular government. He said who that is a sincere friend to it can look with indifference on attempts to shake the foundation of the fabric [of society].

► Senate candidate Roy Moore in a September 2017 debate with Republican primary opponent Sen. Luther Strange

Well, yes. But what morality are we talking about here?

Are we talking about some of it or all of it?

After all, young George Washington was “a man on the make. He wanted to get rich. He bought, sold and traded slaves, raffling off some in a lottery and permanently dividing families. After arranging to marry the richest widow in Virginia, Martha Dandridge Custis, he wrote a series of passionate love letters to the wife of one of his best friends. And then there was his insatiable craving for land, which led him to cheat some of the men he had commanded in the French and Indian War out of acreage they had been offered as an incentive to join the fight. As biographer Ron Chernow put it, Washington ‘exhibited a naked, sometimes clumsy ambition.’”

Of course, he matured with time, but who’s perfect?

What’s really called for here is more specificity; in fact, that seems inherent. Like a number of words in this list, the problem isn’t that the word isn’t significant; the problem is that the real broad scope of the word has been cast aside, and redefined to include only a tiny piece of the original.

The Oxford English Dictionary defines morality as “Principles concerning the distinction between right and wrong or good and bad behaviour” – which may be a reasonable enough definition, although it offers little guidance: What exactly is “right” and “wrong”?

The author C.S. Lewis took a stab at this, suggesting three components to morality: “(1) to ensure fair play and harmony between individuals; (2) to help make us good people in order to have a good society; and (3) to keep us in a good relationship with the power that created us.” That suggests what the purpose of morality might be, but still doesn’t help answer the question of what it is – the practical nature of the moral.

Because our code of ethics (ethical philosophy covers roughly the same territory as “morality”) eventually covers everything we do, including many or most of the choices we make in our lives, that becomes an awful lot of territory for us to cope with as a matter of public life. Inevitably, nearly all of us wind up paying more attention to some parts of this vast territory than to others, and those choices we make say as much (probably more) about us than about those who we would judge.

The Wikipedia entry on morality includes this useful paragraph:
“If morality is the answer to the question ‘how ought we to live’ at the individual level, politics can be seen as addressing the same question at the social level, though the political sphere raises additional problems and challenges. ... Moral foundations theory (authored by Jonathan Haidt and colleagues) has been used to study the differences between liberals and conservatives, in this regard. Haidt found that Americans who identified as liberals tended to value care and fairness higher than loyalty, respect and purity. Self-identified conservative Americans valued care and fairness less and the remaining three values more. Both groups gave care the highest over-all weighting, but conservatives valued fairness the lowest, whereas liberals valued purity the lowest. Haidt also hypothesizes that the origin of this division in the United States can be traced to geo-historical factors, with conservatism strongest in closely knit, ethnically homogenous communities, in contrast to port-cities, where the cultural mix is greater, thus requiring more liberalism.”

In the book The Hidden Agenda of the Political Mind, researchers Jason Weeden and Robert Kurzban argued that morality is often based in selfishness: “we often perceive our own beliefs as fair and socially beneficial, while seeing opposing views as merely self-serving. But in fact most political views are governed by self-interest, even if we usually don’t realize it … we engage in unconscious rationalization to justify our political positions, portraying our own views as wise, benevolent, and principled while casting our opponents’ views as thoughtless and greedy.”

Or, when socially broader, morality can be used as a lever, an ideological tool to stop other people from doing what (we think) is harmful to them.

So what can we say of morality that people across our society can accept and understand in a common way? Not much, apparently. “Morality” has become a code word, with provisions that would be commonly understood only in split-off – and often in-conflict – elements of society. It’s a brickbat, not a standard of conduct. It will not mean more until people in America reach beyond it and come to come common agreements - which they seem not to do at present - about what actually is good and bad.

Our conceptions of morality, evidently, are flying apart, and some seemingly logical center is failing to hold.
 

American pride on refugee day?

American pride on refugee day?

June 25, 2019

jones

World Refugee Day, June 20, is a time to consider the desperate plight of the more than 25 million people around the world who have fled their home countries because of a well-founded fear of being persecuted. America has always been regarded as a refuge for people fleeing despotic countries to escape religious and political persecution. In the past, we have taken seriously the admonition in Deuteronomy 10:19 to “love those who are foreigners.”

Until recently, America has played a leading role among nations in protecting refugees who often have suffered unspeakable atrocities in their home countries. The U.S. has provided comfort and shelter to over 3 million oppressed people from around the world since 1975. America welcomed 84,944 refugees in fiscal year 2016, but that dropped to 53,716 in FY 2017 and then to 22,491 in FY 2018.

Savage fighting in Syria has produced the largest outpouring of refugees in recent years--about 6.3 million. Of that number, 3.6 million are registered in Turkey, over 900,000 in Lebanon and about 665,000 in Jordan. The U.S. settled 12,587 Syrians in FY 2016, only 62 in FY 2018, and just 218 in the first half of FY 2019. We played a large part in creating the Middle East upheaval that caused the massive flow of refugees, but have essentially turned our back on them.

German Chancellor Angela Merkel saw the flood of refugees from Syria as a humanitarian crisis of the first order, but also as an opportunity to address a serious German social problem. Unemployment and the birth rate in her country are at near-record lows, as they also are in the U.S. The aging population of both countries poses great economic problems for the future. Merkel’s solution was to admit about 1.5 million refugees, who have injected new workers and more vitality into the German economy.

I’m not suggesting we bring a similar number into the U.S. but we should remember that immigrants have provided the backbone for America’s growth into an economic powerhouse. With our record low birth rate, how can we sustain our economy into the future and pay for Social Security, Medicare, national defense and everything else we hold dear? We need a new population source to keep our economy from faltering.

Along with the substantial decline of refugees being allowed into the U.S., the numbers coming to Idaho have plummeted—from 1,118 in FY 2016, to 629 in FY 2017, and then to 265 in the first 8 months of FY 2019. The drop has caused serious damage to the infrastructure of Idaho’s refugee resettlement agencies, which are among the best in the country.

Those agencies--the Idaho Office for Refugees, Agency for New Americans and International Rescue Committee—sponsored World Refugee Day Boise on June 15. There was a remarkable outpouring of appreciation for these people from distant parts of the world who have enriched the communities of Idaho.

Refugees from a variety of countries, including the Democratic Republic of the Congo, Ukraine and Myanmar, have settled in Boise, Twin Falls (thanks to the well-regarded refugee program of the College of Southern Idaho) and surrounding areas. They have shared their cultures and cuisines, started businesses at twice the rate of home-grown Americans and taken jobs that locals will not do. Many of their sons and daughters are becoming nurses, engineers, social workers and information technology experts.

Just like immigrant groups from years past, Idaho’s refugee community supports America and is doing its part to make the country even better. Soon we will stop referring to them as refugees and call them our fellow Americans. And, when America remembers its responsibility to extend love to those fleeing persecution, the country can once again hold its head up with pride on some future World Refugee Day.
 

Impossible tasks

Impossible tasks

June 24, 2019

rainey

I suppose the following words could be considered just a couple more rants about things political. There’s a lot of that in the air these days. But, I hope not.

Two current subjects have been eating at me for some time. Both amount to efforts by the media and nearly everyone else to fit yesterday’s words and actions into today’s accepted norms.

Stop it! It can’t be done!

A current striking example of that twisted thinking involves everybody’s favorite Democrat Joe Biden. Uncle Joe. A few days ago, he was talking about the necessity for people with opposing views and values working together to accomplish something important. At that moment, he was talking about efforts to pass the voting rights act in the ‘60's.

Biden was citing working with a couple of avowed racists in the Senate - James Eastland of Mississippi and Herman Talmadge of Georgia. Absolutely no question about their racist credentials. Biden talked of negotiating with them on various parts of the legislation to get their support when the vote was taken because it was gonna be close. And he got ‘em.

Yes, Virginia, there really was a time when politicians of one stripe actually had working relationships with those of a different stripe. It worked! An amazing time, that.

Sitting in the press gallery one day about 1970, I remember watching Barry Goldwater - an avowed Conservative - and Hubert Humphrey - an avowed liberal - going at each other in debate. Point-counterpoint. Back and forth. The real essence of politics at work. Ironically, something had to be amended in the bill and it was held for a day.

A few hours later, a fellow reporter found the “combatants” at the Congressional Club on the Hill behind the Capitol. Bourbon and branch water between them and chatting about an Arizona hunting trip Goldwater was putting together.

Think you could find that today in McConnell’s kangaroo Senate? Yeah, you bet. That’s what Biden was talking about. That’s how it worked. When it worked.

But, instantly, Booker, Warren, Harris ran to the media with their faux outrage about Biden’s “racist” comments. Pure B.S.. Booker, Warren and Harris have full time jobs in that same governing body and they know in their souls how it used to be. How it really worked. Or, maybe they conveniently “forgot” how things used to get done just to make a news cycle.

Biden said nothing wrong. But, the media scrum - none likely born at the time Biden was referring to - and Booker, Warren and Harris without Biden’s institutional experience - jumped all over him. Again, pure B.S..

Because of Bidens trying to use past examples of how this-and-that actually worked, his 40+ years of experience may be his Achilles’s heel. Though his kind of politics worked then, he may get hammered by opponents using today’s poisonous political climate to justify their attacks on the cooperation that used to be.

The other personal irritant is all this media hype of upcoming Democrat “debates.” You can’t get five pounds of lard into a one pound can. And you can’t “debate” when you have 10 candidates.

Let’s break it down. Suppose the allotted time is two hours. Less network lead-ins, exits, summations, etc.. That should total about 20 minutes. Now, with the remaining 100 minutes, divide that by 10 people. Spread over a two hour period, each gets a total of 10 minutes to speak, broken up by questions, audience reactions and other miscellaneous distractions.

There’s no debate. No back-and-forth. Just short “sound bites” so each can get in a favorite stump speech point. No challenge. No response. Nothing. Where the hell is the “debate?”

There is no debate and there will be no debate until, oh, about October, 2020. When each political party has just one candidate for President. When there are just two microphones and two voices. And that’s only if the “moderator” stays out of it and lets the combatants combat. Not likely.

Trump will be one voice. And he will be loud and raucous - foul and obscene. Based on past performance, he’ll interrupt, make noises, walk around while his opponent is talking and try anything to distract. And he’ll lie. Lie. Lie!

In fact, we may get through a whole political season without one real debate. Those last appearances may not amount to an actual debate after all. Just one serious voice trying to overcome the childish demeanor and harangues of our “president” who has already exhibited his “debate style.”

And that’s what’s been eating at me. But, that’s enough.
 

Proper role of government

June 23, 2019

politicalwords

The legitimate object of government is to do for a community of people whatever they need to have done, but cannot do at all, or cannot do as well for themselves, in their separate and individual capacities.
► Abraham Lincoln

... an attack phrase on centralized federal authority and massive taxation and expenditure.
► William Safire, Safire’s Political Dictionary

Safire’s assessment was largely right: a statement including the phrase “the proper role of government” is apt to be an attack on same, with the idea that whatever the main subject at hand is, is not within the “proper role of government.” (Ironically, the supporters of government activism tend not to talk much about the proper role of government as such.)

The attack tends to have three problems in association with each other.
First, all of government is smeared as needing limitation in a way no other aspect of society is; did all those governments officials, high and low, drink some special kool-aid?

Second, it forgets that government is interactive with the rest of us. (You don’t think businesses affect what governments do? Churches? Even, from time to time, individuals? Activist groups?)

Third, in connection with that, obsession on government’s proper “role” diverts attention from other sources of power in our society – which can gain more power in turn, as long as we’re warned not to look in their direction.

One of the foundations of “proper role” rhetoric in recent years is an article written by Ezra Taft Benson, a secretary of agriculture in the Eisenhower Administration, called “Proper Role of Government.” It cleanly isolated a central kernel of the limited-government argument:

“… the proper function of government is limited only to those spheres of activity within which the individual citizen has the right to act. By deriving its just powers from the governed, government becomes primarily a mechanism for defense against bodily harm, theft and involuntary servitude. It cannot claim the power to redistribute the wealth or force reluctant citizens to perform acts of charity against their will. Government is created by man. No man possesses such power to delegate. The creature cannot exceed the creator. In general terms, therefore, the proper role of government includes such defensive activities, as maintaining national military and local police forces for protection against loss of life, loss of property, and loss of liberty at the hands of either foreign despots or domestic criminals.”

It’s a thoughtful contention – if government is created out of the authority of the people, how can it do anything you or I individually cannot do? – but it doesn’t hold up to scrutiny.

You and I as individuals lack the authority to do even the basic things Benson argues governments must do, such as protect people from harm and provide for the common defense. Accomplishing those things means commanding people to do certain things; we as atomized individuals, have no such authority. Nor do we have authority to raise money – other than by begging for it, which as a practical matter wouldn’t work – to accomplish those things.

Authority to do anything that government does, including those things the staunchest libertarians would endorse, means governments have authority beyond that of individuals.

If we want to get into theorizing about how this might be justifiable, simple enough answers are available. These grow mostly out of the concept of the social contract: By living in and benefiting from our society, we give up some of our absolute liberty in the interest of gaining other compensating advantages. It’s transactional; a tradeoff. We can (and many of us do) disagree about the precise terms of that deal, but such a deal is what people who live in any society – whether one like the United States or one drastically different – officially or unofficially agree to. If you don’t, you leave, or you might be punished by the other people who stay.

And there are people who try to withdraw to some extent, sometimes in minor and subtle ways and sometimes in ways more obvious. But most of us take the tradeoff, knowingly or unknowingly, sometimes grumbling as we do. But nonetheless we do.

Benson said in his article that he draws much of his philosophical inspiration from the United States Constitution. But the Constitution itself disagrees with his reductionist view. Its first sentence says this: “We the People of the United States, in Order to form a more perfect Union, establish Justice, insure domestic Tranquility, provide for the common defence, promote the general Welfare, and secure the Blessings of Liberty to ourselves and our Posterity, do ordain and establish this Constitution for the United States of America.”

What it takes for government in America to accomplish these things has varied with time, often has been debated, and sometimes has moved into unpredictable areas.

Few members of the founding generation were as fierce in their calls for limited government as Thomas Jefferson; but in 1803 he doubled the size of the United States with a purchase of land from France, a purchase for which neither he nor Congress had any clear constitutional authority. (Analysits of that day rwisted themselves into pretzels in attempts to find it.) Jefferson did it because like many other people he had become convinced that it was in the interest of the larger aims of the United States. Despite its uncertain constitutionality, it hasn’t been significantly questioned since.
 

Taxes and tariffs

Taxes and tariffs

June 22, 2019

johnson

The two foundational pillars of Republican (read Trump) economic policy – tax cuts and tariffs – have settled in on the country like so much else has for the last two and a half years. They are the product of ignorance, misdirection, wishful thinking and lies.

First, let’s review the bidding on the 2017 Trump tax cut passed with only Republican votes in Congress.

Idaho Senator Mike Crapo, a member of the tax writing Finance Committee said at the time, “The tax relief passed by Congress will reshape our tax policy to the benefit of Idaho’s taxpayers help make the United States more competitive.” Crapo was also sure that tax rates for all Americans would go down, jobs would spike, competitiveness would soar and “despite claims to the contrary, the reforms to our tax system will address our growing debt and deficits.”

In a joint statement with Crapo celebrating the passage of the tax cut, Senator Jim Risch was over the moon in touting the benefits. “The Tax Cuts and Jobs Act will produce growth not seen in generations, giving Americans access to higher wages, greater job opportunities and a more vibrant economy, all of which will result in greater dynamic revenue generation to reduce the deficit and improve our nation’s fiscal standing.”

But what has actually happened after the happy talk faded away? In as nutshell, and according to an in-depth analysis by the Congressional Research Service (CRS), a branch of the Library of Congress, Crapo and Risch’s claims were wildly overstated, indeed were largely wrong.

Consider who benefited from the tax legislation. “From 2017 to 2018,” CRS says, “the estimated average corporate tax rate fell from 23.4% to 12.1% and individual income taxes as a percentage of personal income fell slightly from 9.6% to 9.2%.” That helps explain why you saw tiny, if any, reduction in your personal tax bill, while corporations had their tax bill nearly halved.

The CRS analysis documents that much of the corporate tax cut went not to investment in workers or plants, but for “a record-breaking amount of stock buybacks, with $1 trillion announced by the end of 2018.” In other words, investors, corporate CEO’s and the already well to do enjoyed the benefits.

And how about the notion that cutting government revenue would some how magically contribute to a reduction in government debt? Here’s how Los Angeles Times columnist Michael Hiltzik describes what happened: “Overall revenue fell in 2018, largely because of a $40-billion decline in corporate tax revenue. Individuals, particularly working- and middle-class individuals haven’t been so fortunate. Although the legislation increased the standard deduction and child credit, whatever tax reductions those would produce for families were ‘largely offset’ by the elimination of personal exemptions, and limitations on itemized deductions such as those for state and local taxes.”

In point of fact the federal deficit – remember when Risch and Crapo used to talk about that all the time – has increased by 40% in the current fiscal year, at a time when the economy continues to grow. This is more than blue smoke and mirrors masquerading as economic policy. It’s really economic malpractice on a huge scale. Congressional Republicans sold you a bill of goods and most of them continue to mouth the platitudes about how good it is for you.

Let’s consider the other “T” in Trumpland economics: tariffs. Despite mounting evidence of the impact on Idaho of the administration’s tariff wars with China, India and a host of other countries, Risch and Crapo stand at attention and march over the economic cliff with the president. Trump, don’t forget, has taken his tariff actions in an unprecedented manner, invoking a provision meant to deal with matters of national security. The Constitution expressly reserves to the Congress the “Power To lay and collect Taxes, Duties, Imposts and Excises.” In other words, Congress has acquiesced to this presidential power grab.

Risch recently told a television interviewer that he’s “not a tariff guy,” chuckling that Republicans “are free traders.” Yet when given the chance to even mildly rebuff Trump – the Senate last year approved 88-11 a non-binding objection to a tariff war – Risch declined, as Crapo did, citing “onerous restrictions” on the president’s authority to implement tariffs for national security reasons.

Even if Trump manages to navigate a pathway out of his tariff cul-de-sac some time soon much damage has already been done. Supply chains have been disrupted, long-to-develop trading relationships shattered and uncertainty dominates.

“Our businesses have spent a lot of time and a lot of money building relationships in some of these markets,” the Idaho Department of Agriculture’s Laura Johnson told the Idaho Press recently, “and as customers go somewhere else, it’s really hard to get them back. We may have other opportunities elsewhere, but it’s costly.” Jay Theiler, the Executive Director of Marketing for Agri Beef, a significant Idaho exporter, says, “Right now, politics is in the way of the trade.”

There is ample evidence that the president of the United States doesn’t understand how tariffs – or tax policy for that matter – actually work, that American consumers and businesses pay the duties when imports become more expensive and cutting tax rates increases the deficit. But, ignorance in politics isn’t a new phenomenon. What is unusual is the willful disregard of facts on the part of Idaho’s senators, and others, who have stood idly by while this economic malpractice continues to unfold.

Tax cuts and tariffs have done almost nothing beneficial for most Americans. If fact, GOP economic policy is costing you money. You would be entitled to ask: whose looking out for your interest?