Politics, Numbers, and Government

I have two British friends who dwell on the conservative side of the political spectrum. One of them lives here in the States and the other over in the UK. Less than two years ago  my US Brit friend ran for local office as a Republican. Since then, he’s become increasingly horrified with his party and has started looking into independent conservative parties.

My UK friend, though, living at a greater distance, still seems (to me) to think it’s business as usual in US conservative politics. I tried to disabuse him of that idea — that today’s GOP is nothing like the GOP of the 90s. Or, rather, it’s only like the fringe elements of the 90s’ GOP that were mainly useful for hating the Clintons within boundaries but were otherwise kept on a leash, the ones who tried to put on a good show at Bill Clinton’s impeachment hearings. I tried to explain to him that the things these members of the GOP are saying are completely falsified by all available numbers.

And in our little email exchange he blithely dismissed the numbers: “Don’t trust them.” Our conversation ended shortly after that, but it stuck with me because I think it demonstrates widespread conservative misunderstanding about the US government. For one thing, he seems to think that the Federal government is a single entity. But we need to comprehend scale here. The Federal government employed about 2.7 million civilians and about 4.4 million people overall, if we include the military, as of just a couple of years ago.  As of the beginning of June 2017, Trump had appointed maybe a handful of people to posts: certainly less than 100. The US federal government is a vast complex of different departments largely staffed by people who stay in these positions for years, regardless of who holds the Office of the President or who is in Congress.

That is also true of the entities that gather our data, like the Congressional Budget Office or the Bureau of Labor Statistics. This independence has been painfully illustrated by the recent numbers coming out of the Congressional Budget Office about the GOP’s latest iteration of their attempts at health care reform. According to the CBO’s latest numbers, the current GOP plan would cause 32 million people to lose health insurance over the next ten years.

Now keep in mind that the GOP currently controls all three branches of government. It can’t grease its wheels much more than that. And this control extends to Congress, which oversees the office producing these numbers.

If government numbers weren’t to be trusted, the CBO would be working for the party in charge right now by spitting out falsified numbers that make the GOP healthcare plan look good. But, it’s not.

The fact is, for the most part the federal government, as an entity, carries out business as usual regardless of who is in power. If it didn’t, this country would be in a much bigger mess than it is. The entities that gather our data attempt to do so to the best of their ability, and being who they are, remain the best source of information about the US economy, jobs, education, and a host of other segments of our society. This general distrust of “government numbers” can only proceed from an inattention to the facts or, in other words, ignorance.

Pay attention to the numbers. They mean something.

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Understanding “Bernie or Bust”

I’ve been following presidential elections since Ronald Reagan ran for office in 1980. I wasn’t able to vote in that one, but I could vote in a presidential election for the first time in 1984. This election cycle seems to me to be unlike any previous one in that a significant contingent of voters on both sides of the aisle aren’t voting for a party but for a candidate. What I think I’ve seen in the past is a majority of voters affiliated with a party being willing to vote for whomever is the eventual nominee despite their preferences for an individual candidate. For example, I think most of Obama’s voters in 2008 would have voted for Hillary Clinton had she won the nomination, with some holdouts. But I don’t think that’s the case any longer, and we see it in the “Bernie or Bust” phenomenon that’s taking up a lot of the rhetoric on the Democratic Party side. My intent here is to explain the Bernie or Bust phenomenon, not to justify it or condemn it.

Why Bernie or Bust? I see two main reasons:

1. Anti-democratic practices in the management of this year’s primaries by the Democratic National Committee (DNC).
2. Hillary Clinton’s donor base and voting record within the context of the following:

a. The 2007-8 financial crash caused by criminal activity in the Finance, Insurance, and Real Estate (FIRE) sectors.
b. The repeal of finance regulations in the repeal of the Glass-Steagall Act in 1999 under Bill Clinton, which is widely believed to have led to the 2008 crash and which makes Hillary’s donor base that much more nefarious.
c. The U.S. Supreme Court’s Citizen’s United decision, which effectively ended previous campaign finance reform.
d. A massive transferral of America’s wealth upwards in spite of the recession.

A 2013 Gallup poll indicates that 42% of voters now identify themselves as independent. This polling data is supported by a March 2016 Pew survey that indicates 50% of Millennials don’t see themselves as affiliated with any political party. Some venues such as Republic 3.0 have attempted to dismiss these survey results as “myth” by mistakenly identifying “independent” as “those voters who fall in between Democrats and Republicans in their political beliefs.” That very definition, though, is the problem itself: it assumes that most people on the left will invariably identify as Democrat and most on the right Republican, so that people who are “independent” must be politically centrist voters who could be swayed either way.

But what we’re really seeing here is the failure of left/right political thinking to have any meaning at all for most voters. Voters are identifying themselves as independent — whether they are right or left — because they no longer believe either of America’s major political parties represent them. They might be left leaning, but that doesn’t mean they will vote Democrat in the next election (they might vote Green Party or not at all). And they might be right leaning, but they won’t necessarily vote Republican (they might vote Libertarian if at all — as might a smaller proportion of the political left). The two party system is starting to fail, in other words, and the rise of Donald Trump on the right and Bernie Sanders on the left is a sign of America’s disaffection with our two party system.

I am not saying that Sanders is in any way an equivalent to Donald Trump beyond being seen as a political outsider: these two candidates are polar opposites, and Sanders has real widespread appeal, unlike Trump. He beats Trump by about 18 points in head to head polls (according to Real Clear Politics as of March 29th, 2016), while Clinton beats him by a smaller but still decisive 11 point margin. But what both Sanders and Trump have in common is outsider appeal, something that no other candidates on the field have right now.

This influx of independents into the Democratic Party, almost all of whom are there for Sanders, and the general appeal of outsiders explains the first reason for the Bernie or Bust phenomenon:

  1. Anti-democratic practices in the management of this year’s primaries by the Democratic National Committee (DNC).

Bernie Sanders has attracted many of these independent voters to the Democratic Party. They aren’t there for the Party. They are there for him, because they no longer believe in the Party (for reasons I will explain below). However, the DNC is squandering an opportunity to bring a lot of independent voters into the DNC fold by its mistreatment of the Sanders campaign through voter suppression, through one-sided manipulation of media coverage, and through a manipulation of debate scheduling. The DNC, in other words, has been operating with a tribal mentality that has been unable to accommodate voters who at some point have quit thinking left=Democrat and right=Republican.

I don’t mean to diminish the tribal mentality by calling it tribal: we need to fully come to grips with it. Hillary’s campaign is reaping deserved rewards for the Clintons’ long loyalty to the Democratic Party and for cultivating widespread relationships through fundraising and a number of other activities. Sanders hasn’t always been a Democrat, and he was punished by massive losses in the South for not cultivating these relationships. He’s been a Vermont Senator. That has been his context for many social issues, including gun control.

Furthermore, the Democratic Party isn’t the US government. It is technically a tribe. The problem, however, is that we have a two party system, so for this system to continue working for American democracy neither parties are really allowed to operate as independent organizations, or in other words, as closed-door tribes. When they do so, as they are now, the tribe begins to supplant democratic processes, and that makes the tribe dangerous. It makes the tribe fascist and authoritarian, and to an American population who still believes in at least a nominal democracy — which still exists, by the way, otherwise billions wouldn’t be spent on elections — the authoritarianism of the tribe is completely unacceptable. When the tribe is the gatekeeper to government, its doors had better remain open.

Whether the Clinton campaign or the DNC deliberately orchestrated the events that have given this impression of tribalism or not, there’s no question that the Clinton campaign has been the primary beneficiary of them, so they ultimately reflect badly both on Clinton and the DNC — and I hear nothing but a deafening, telling silence on the part of the Clinton campaign about the horrible betrayal of democracy and democratic practices in Arizona. If she were an ethical candidate, she would be calling for a revote.

Normally independent voters who have recently entered the DNC fold, therefore, feel betrayed by what appears to be anti-democratic management of the Democratic Party primaries, and it doesn’t help at all that Debbie Wasserman-Schultz openly said in a television interview that superdelegates exist to squelch grassroots candidates. That is the tribal mentality in a nutshell as well as everything that is wrong with our two party system. Above all else, Wasserman-Schultz’s comments are a betrayal of the ethos of the tribe itself: the Democratic Party umbrella has always been the place for grassroots activists. If it is no longer that place, one has to wonder what it stands for now.

All of this creates the impression that the DNC is operating a kinder, gentler fascism than Donald Trump’s, but it’s still a fascism in that it is manipulatively anti-democratic, and people are refusing to support that regardless of the consequences. They may be thinking that if American voters want a fascist government, then let them have what they deserve. Or they might be thinking that Sanders can win if he did run as an independent or on the Green Party ticket.

And they might be right, especially if Trump splits the vote on the Republican Party side.

2. The second reason for the Bernie or Bust phenomenon is found in Hillary Clinton’s donor base and voting record, which are very problematic given recent developments in campaign finance reform and especially after the 2008 financial crash. The best place to start is with Clinton’s donor base, which we can best find on opensecrets.org. I would like to explain first of all, though, that opensecrets.org collates information about individual donors and then uses their professional affiliations to point back to companies, business sectors, PACS, and other organizations. I would also like to add that I will be drawing from information about both Clinton’s and Sanders’s lifetime donor base to illustrate longterm support and alliances.

Let me start with Bernie Sanders’s donor base. Of his top twenty lifetime donors,

  • 15 are unions. They represent the working and middle class.
  • 3 are in the tech sector, including Google (his top donor), Microsoft, and Apple. They represent people who actually produce stuff rather than just shift money around.
  • 1 is the UC system, and educators are well represented on this list in unions as well.
  • 1 are the trial lawyers, which has for a long time been supporters of the Democratic Party.

Now let’s compare that to Hillary Clinton’s top twenty lifetime donors:

  • Her top donor is Emily’s list, an organization working for women’s rights. That’s admirable.
  • 2 of her top donors are the UC system and Harvard University. Like the trial lawyers, they have traditionally given to the Democratic Party.
  • 2 are major media corporations: Time Warner and 21st Century Fox, the owner of Fox News of all things. Keep in mind that six umbrella corporations control 90% of American media and you’ll understand why news coverage has been so pathetically biased in favor of Hillary Clinton.
  • There are 8 large, international, very specific law firms on Clinton’s top 20 list: DLA Piper; Skadden, Arps et al; Kirkland & Ellis; Paul, Weiss et al; Greenburg Traurig LLP; Sullivan & Cromwell; Akin, Gump et al; Ernest & Young (large, multinational audit firm). I have not had the time to research each one specifically, but most of them seem involved in representing the interests of multinational corporations around the world. Trial lawyers as a group don’t appear in the top 20.
  • There is 1 manufacturing company: Corning, Inc.
  • There is 1 entertainment company: National Amusements, Inc.
  • There are 5 firms from the financial sector, four of them very high on the list: Citigroup, Inc.; Goldman Sachs; J.P. Morgan Chase & Co.;  Lehman Brothers; and Morgan Stanley.
  • And, of course, there are no unions.

It’s that last group of five that is the most problematic, but of course we should see the law firms as folded into these and the media giants. As you know, in 2008 the world experienced the largest financial crash in history since the Great Depression. The U.S. Senate’s “Levin–Coburn Report concluded that the crisis was the result of ‘high risk, complex financial products; undisclosed conflicts of interest; the failure of regulators, the credit rating agencies, and the market itself to rein in the excesses of Wall Street.'”

Bottom line: Wall Street caused the crash. But who do we mean by “Wall Street”?

  • Citigroup, Inc., Hillary Clinton’s no. 2 biggest donor: Massive recipient of federal bailout money after the 2008 crash. The people who were the architects of loosening regulations in the late 1990s under Bill Clinton, Robert Rubin and Charles Prince, later found themselves on Citigroup’s board of directors pushing it toward the risky practices that led to its insolvency.
  • Goldman Sachs, Hillary Clinton’s no. 4 largest donor: Profited from the financial collapse and was later fined $550 million by the SEC.
  • J.P. Morgan Chase & Co.: Hillary Clinton’s no. 5 largest donor, which has been involved in a long list of controversies. It was fined $88 million by the Office of Foreign Assets Control in 2012 and was investigated by the Department of Justice for its role in the 2008 financial scandal, which found in preliminary investigations that it violated federal securities laws. The SEC has also been investigating this firm, which is also implicated in the Bernie Madoff scandal.
  • Morgan Stanley: Hillary Clinton’s no. 6 largest donor. This firm also has a long list of actions against it, with the Federal Reserve announcing a Consent Order against the firm on April 3, 2012 for “‘a pattern of misconduct and negligence in residential mortgage loan servicing and foreclosure processing.’ The consent order requires the firm to review foreclosure proceedings conducted by the firm. The firm will also be responsible for monetary sanctions.”
  • Lehman Brothers: Hillary Clinton’s no. 18 largest donor, this firm is now bankrupt and was found guilty of major financial malfeasance in the 2008 financial scandal, for reasons that included gimmicky bookkeeping.

Four of Clinton’s top six donors and a fifth in her top twenty are implicated in the 2008 financial crash and guilty of massive and destructive financial malfeasance. It’s not just that she’s taking Wall St. money. It’s that she’s taking Wall St. money from its biggest criminals. The Clinton campaign is being supported by large donors: 100 donors alone contributed $195 million to Clinton’s campaign as of February 2016 while the Sanders campaign has been supported by over 5 million contributors — the largest donor base in history — who have average gifts of $27 each.

While the middle class is being squeezed, the largest transfer of wealth in history has been taking place, and it is primarily benefitting the top 1%.

Is it that hard to understand why so many voters inherently distrust a candidate supported by criminal financial firms and other big money? Why just being the Democratic Party’s presumptive nominee isn’t enough? Why the possibility of being the first woman president isn’t enough? I am excited at this possibility. I have four daughters, and I like what it would mean to them. But for these and other reasons that’s just not enough.

Bernie Sanders’s plan is to build the economy from the ground up rather than just keep transferring wealth upwards with no tangible benefits to anyone else. Rather than paying massive health insurance premiums, he’s asking us to pay a 2.2% tax (2.2% on individuals and 6.8% on employers). Compare a 2.2% tax to your current premiums, which may be closer to 20-30% of your salary, and ask yourself how much better the economy would be doing if the middle and working classes and their employers had that much more disposable income. If you think this plan can’t work, you’re not thinking clearly enough about how much most of us are paying now.

Sanders’s plan to fund education is equally seen as unrealistic, but it is in fact much more realistic than the indefinite extension of a massive student loan bubble that may well be the cause of our next major financial crash. Let’s look at some numbers:

  • As of the time of this writing, US student loan debt is $1.38 trillion.
  • Current number of US college students: 20.2 million.
  • Average cost of tuition, fees, and room and board at US public colleges: $15,640.
  • Total cost per year for all 20.2 million students to attend a four year public college: $316 billion per year.
  • Total 2015 federal spending on education: $102 billion.
  • Total 2011 state spending on education: $170.4 billion.
  • Total 2015 federal spending on the military:  $608 billion, or 16%.
  • Total 2015 federal tax breaks: $1.22 trillion.

Don’t tell me we don’t have the money, right now, to send every American in college to a four year public institution with all tuition paid for by state and federal government. We’re at $270 billion out of $316 billion with the same spending levels. I know there are a great many details to work out, including what we do with private colleges and universities, but covering this gap is only a small percentage of our tax breaks, and even less if we cut some of our bloated and unnecessary military spending.

The money to fund national healthcare and education is easily available in the system. The question we need to ask is, why aren’t we benefitting from it?

We aren’t funding healthcare with a single payer system not because we fear socialism (which in the US only means that my tax money benefits me rather than multinational corporations), but because that would cut out insurance company premiums — those FIRE sector people supporting Hillary’s campaign.

We aren’t funding education directly for all students, again, not because we’re not socialist, but because it wouldn’t benefit the banking industry, which profits from massive student loan debt that is guaranteed by the Federal government; i.e., our tax money — again the FIRE sector people supporting Hillary’s campaign. These are the industries contributing to Clinton’s campaign, and that is the reason why she wants you to believe that Sanders’s plans are impractical.

But please also see the big picture: deregulation under Bill Clinton in the late 1990s led to financial malfeasance in the FIRE sector that then led to a worldwide economic crash in 2008. The US government’s response to that crash resulted in the largest upward transfer of wealth in history — to the sector responsible for the crash. In the meantime, middle class wages have stagnated, and campaign finance reform has been overturned by SCOTUS so that the foxes can raid the chicken coop even more easily than they did before.

So don’t let anyone tell you that this donor base doesn’t matter and doesn’t affect policy decisions. This is the FINANCIAL SECTOR: they don’t pay out unless they get a measurably monetary return. Thinking that way is what they do for a living.

People are not attacking Hillary Clinton because she is a woman. They are attacking her because she is taking money from criminals who have damaged the country and gamed the system — through Super PACS and lobbyists — to work only for them. And I haven’t even mentioned yet the list of scandals associated with the Clintons going back to their days in state government, or Clinton’s votes in favor of war.

But isn’t she being attacked for what was acceptable to male candidates in the past? Doesn’t that indicate discrimination?

No, because campaign finance reform wasn’t overturned until 2010, after Obama first took office. It wasn’t as big an issue the last time she ran for President, which was 2008.

And no, because Obama has been criticized for the same thing since at least 2009 or 2010, when the progressive press started calling him “Bush lite” because of his corporate ties.

And no, because we’ve never had a chance to pick a candidate who wasn’t sold out to the financial sector and multinational corporations until now.

If most millennials don’t trust Clinton, that means that most women in that age range don’t trust her either, which in fact includes 80% of women below 30.

If you’ve read this far, I don’t know that you’re convinced that Bernie or Bust is a smart plan. I don’t know that I want to convince you of that either. But I think you should at least understand why so many people feel that way, and why Clinton is not in fact the safest bet for November. She only wins decisively by 11 points against Donald Trump. She loses to Kasich by almost seven points, and she barely squeaks by Cruz with a four point lead in current polls (March 29th, 2016).

Sanders, on the other hand, beats Trump by almost 18 points, Cruz by more than 8 points, and squeaks by Kasich with a one point lead. It should be clear from polling data that however much the DNC wants you to fear a Trump presidency (it’s all over their fundraising emails), Trump is really only a threat to the GOP, who does not want him to get the nomination. Kasich is the only real threat to a Democratic Party presidency, and he poses the biggest threat to Hillary Clinton, not Bernie Sanders.

Both of America’s major political parties are on the verge of implosion. Big money in politics is the reason, and Clinton, alongside all GOP candidates, are swimming in it. Bernie is the only exception, which is why we have a Bernie or Bust movement.

It is time for the DNC to become less tribal, which it must do if it wants to survive.

 

Yes there are good economists: Ha-Joon Chang author of “23 Things They Don’t Tell You About Capitalism”

You might want to read this one…

Punkonomics (@DearBalak)

Check out Ha-Joon Chang’s RSA talk about his “23 Things They Don’t Tell You About Capitalism.”  It’s an excellent book that manages to be entertaining while preserving analytical depth and should be read by anybody interested in economics:http://www.youtube.com/watch?v=whVf5tuVbus

Ha-Joon Chang: Economics Is A Political Argument

Posted: 04/09/2014 3:51 pm EDT Updated: 04/10/2014 2:59 pm EDT

http://www.huffingtonpost.com/2014/04/09/ha-joon-chang-economics_n_5120030.html

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Ha-Joon Chang teaches economics at Cambridge University. He is the author of “23 Things They Don’t Tell You About Capitalism.” His new book,“Economics: The User’s Guide,” will be released on May 1, 2014 in the U.K. He spoke recently with The WorldPost South Korea editor and former Oxford Union President Seung-Yoon Lee.

Seung-Yoon Lee: You have said that “economics is a political argument,” that you cannot really separate economics from politics. Even the concept of “free market” is determined by politics. “What is free” is determined by society and…

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