Category Archives: Public Policy and Governance

Quid Pro Quo…

I’m certainly not surprised by the recent revelations about Scott Walker’s unethical fundraising. I’m just depressed by yet another confirmation of the sorry state of American politics and the increasing corruption of the political system. I don’t enjoy being suspicious and cynical, but it’s getting a lot harder to maintain my Pollyanna side.

For those who missed the recent reporting, here’s one lede from the Wisconsin State Journal:

A new batch of leaked documents provides the most complete record yet of how Gov. Scott Walker raised millions of dollars for a supposedly independent, tax-exempt group during the 2011 and 2012 recalls — activity that prompted a now-halted John Doe investigation into whether Walker’s recall campaign circumvented state campaign finance law.

The newly revealed donations to the Wisconsin Club for Growth included six-figure sums from a lead producer who later stood to benefit from changes slipped into the 2013-15 state budget.

In another article, expanding on the details of the “lead producer,” we read

One of the more tangible revelations found in the leaked documents is how money buys bad policy-making decisions. An example is how Harold Simmons, a man who owned a company that produced lead that used to be in paint, made $750,000 worth of donations to Walker in 2011 and 2012 and got Republicans to protect him from lawsuits.

The Guardian US posted more than 1,300 pages of documents online, detailing more of Walker’s corrupt behavior. It’s unclear how the newspaper got the documents, which were being held under seal.

These disclosures come just weeks before the U.S. Supreme Court will consider a petition by prosecutors to overturn a Wisconsin Supreme Court 4-2 decision that quashed the investigation into Walker’s practices. The prosecutors bringing the petition argue, among other things, that conservative justices Michael Gableman and David Prosser should have recused themselves from the case.

Walker, in a May 2011 letter to Republican strategist Karl Rove, wrote that his chief political adviser R.J. Johnson ran the efforts to elect Gableman in 2008 and re-elect Prosser in 2011. Johnson was under investigation for his role in coordinating advertising for both the Walker recall campaign and Wisconsin Club for Growth, which is organized as a tax-exempt 501(c)4 group.

“Club for Growth—Wisconsin was the key to retaining Justice Prosser,” Walker wrote to Rove.

Johnson affirmed the group’s role in a December 2010 email to Club for Growth director Eric O’Keefe, saying “Club is leading the coalition to maintain the court.”

In this case, “maintaining the court” evidently meant retaining judges who’d been bought and paid for. Engaging in such partisan activities is illegal for a tax-exempt 501(c)4 like the Club for Growth.

It’s bad enough when elected officials like Walker ignore the laws with impunity, but when quid pro quo politics infect the judicial process, it’s worse. The ability of citizens to rely upon the impartiality of jurists is a bulwark against inequality, corruption and tyranny.(And speaking of politics infecting the judiciary, when will the Senate discharge its constitutional duty to vote on the nomination of Merrick Garland??)

It’s all pretty sleazy.

Buying laws, neutering the courts….and we wonder why young people don’t trust “the system.”

The Age of Vandalism?

Random thoughts prompted by a seemingly interminable election campaign:

  • When I ran for Congress in 1980, women candidates were still rare. One of the “truisms” I encountered about the differences between male and female candidates was “Men run for office to be someone; women run in order to do something.” As with all sexist constructions, it isn’t a “one size fits all” observation, but it certainly is an accurate description of Clinton and Trump. Clinton has issued reams of carefully constructed and highly detailed policy positions; Trump talks only about himself–and from all appearances, has not the foggiest notion of what governing entails or what the constitution permits. The question, of course, is whether a celebrity-obsessed culture wants leadership or entertainment–no matter how dangerous or damaging that entertainment may be.
  • I share in the depressing point of view offered by a reader of Talking Points Memo:”Win or lose, on November 8, Donald Trump will have garnered some 60 million votes. Sixty million Americans will have gone to the polls and voted for him — clear-eyed or self-deluded people, making that choice enthusiastically or resignedly, very much because of what he represents or in spite of it. 60 million people will have voted to entrust themselves and the people they love not simply to a vulgarian narcissist who desperately needs medical help, but also to someone who is so arrogantly and defiantly ignorant that he thinks Supreme Court justices investigate crimes, that federal judges sign bills, that he would have the power to replace leadership in the armed services with officers who have publicly supported him, that the Constitution has (at least) 12 articles, that the United States could use nuclear weapons tactically without initiating nuclear war, that we could have new libel laws that wouldn’t gut the Bill of Rights, etc. Win or lose, Trump has already exposed something about us that we need to grapple with. All of us.”
  • I’ve never understood vandalism. Theft is comprehensible; people want something and take it. But destruction just for the sake of destruction has always been unfathomable to me. I mention this because, more and more, participants in America’s political system have come to resemble vandals–intent on mayhem rather than reconstruction, unwilling to participate in the hard work of productive reform. Whether it’s the members of Congress’ “lunatic caucus” or the thugs acting out at Trump rallies, or the racists relieved that “political correctness” no longer restrains them from spewing their hate, these are people simply venting their rage, trying to bring down “the system,” with no concern about the social or fiscal costs and no apparent concern for what comes after the destruction.

I’m very depressed. The Trump campaign has uncovered and threatens to normalize an America of which I was previously–blissfully–unaware.

Forty-nine more days…..

Self-Interest Properly Understood–and Taxes

Since at least the late 1980s, policy disputes in the United States have largely revolved around the actual and perceived deficiencies of government. It has been an article of faith among self-styled fiscal conservatives that wasteful state and federal governments are imposing excessive and unnecessary tax burdens on the American public.

Engaging in this line of argumentation is particularly  appealing to candidates for public office, since it plays to widespread resentment of the obligation to pay taxes while avoiding the pesky need to identify specific instances of the “fraud and waste” that are widely supposed to exist.

There are certainly situations where tax dollars are misspent. Most of those situations involve poor management practices, since voters tend to base their support for political candidates on ideology rather than perceived managerial competence. But more often than not, assertions of “waste” are based upon disagreement with something that government is doing–a belief that services being provided or programs being supported are unnecessary (especially when such services or programs are primarily seen to benefit others).

What government should do, and how it should fund what it does, are persistent and entirely legitimate issues. The problem is, too many of us have imbibed the Kool-aid; we want the services, we want to live in thriving communities with a good quality of life, but we don’t want to pay for the services and amenities necessary to produce that quality of life.

Worse, we frequently don’t recognize the ways in which we benefit even from government programs and services we don’t personally use. A couple of examples:

When voters are asked to support bond issues or tax increases for public education, people who do not have children in the system (usually a majority of those voting) often oppose the measures, because they see no personal benefit, no immediate “return on investment.” What they fail to recognize is that the quality of local public education systems affects their property values, enhances (or diminishes) job creation efforts, and makes their communities safer and more attractive. In the long run, good schools are in their personal self-interest.

Similar metrics apply to taxes for public transportation. Even people who will never use transit benefit personally from public transportation systems that reduce congestion, improve air quality, connect low-income workers to their places of employment, and improve mobility for the elderly and disabled.

Even people who care only about minimizing their personal tax burden will ultimately benefit, because long-term, the ability to hold down tax rates  (especially here in Indiana, where constitutionally-imposed tax caps severely restrict municipal governments’ revenue options) will depend upon a city’s ability to grow its tax base–its ability to entice people to move in, buy homes and start businesses. Cities that successfully market themselves do so based upon quality of life measures–good schools, well-maintained parks, excellent public transportation.

Often, sound investments take time to generate returns. That’s particularly true of investments in our communities.

Sometimes, “self-interest properly understood” (as De Tocqueville noted many years ago) is the opposite of immediate gratification. That doesn’t mean the investments aren’t necessary and worthwhile.

 

“The Poor You Have Always With You”

A few statistics about my state of Indiana (the state that Vice Presidential candidate Mike Pence brags is “a state that works”); these are facts that should “afflict the comfortable” and motivate the rest of us to support policies that will “comfort the afflicted”:

According to the latest Census numbers: More than 1 in 3 Hoosiers remain below self-sufficiency despite increased employment, 21.5% of Indiana’s children live in poverty, and the number of Hoosiers in poverty persistently hovers around one million.

A report on the Status of Working Families in Indiana 2015, issued by the Institute for Working Families, puts the information in an Infographic including state SNAP & TANF responses to poverty, and highlights what it calls the “21st Century Job Swap” from high & middle-paying to low-skilled, low-income jobs by industry;

The June data available from the Bureau of Labor Statistics shows that Indiana has a 108,400 jobs deficit when population growth since the recession is factored in.

The Annie E. Casey Foundation finds that Indiana ranks #30 in child well-being, having slipped 2 spots relative to other states since 2014.

Women are doing even worse than children in national rankings: Indiana is dead last in Work & Family rankings, 39th in Employment & Earnings, 37th in Poverty & Opportunity, and Indiana received a D- in the National Partnership’s Expecting Better report, “the most comprehensive analysis to date of state laws and regulations governing paid leave, paid sick days, protections for pregnant workers and other workplace rights for expecting and new parents in the United States”

Despite the fact that the minimum wage cannot support even a single adult in any county in the state, Indiana’s legislature has not only refused to raise that wage– but has preempted the authority of cities and counties to do so (or to provide paid leave, or enact environmental regulations, etc.)

To add insult to injury, in 2015, Governor Pence diverted three and a half million dollars of desperately needed TANF funds to  anti-abortion crisis pregnancy centers.

There is much more, but rather than get bogged down in the details of one state’s inability to raise living standards–an inability that, unfortunately, is not unique to Indiana–we “comfortable” Americans need to ask ourselves some hard questions, beginning with one posed by eminent economist Robert Samuelson in a recent column for the Washington Post: Is ending poverty impossible?

Samuelson begins by pointing out that neither Presidential candidate has focused on the poor. Clinton’s proposals to decrease inequality are aimed primarily at the middle class, and Trump’s tax cuts would benefit the rich and upper middle class.

Samuelson cites two reasons for ignoring the plight of the truly poor: Poor people don’t vote (they are a disproportionate percentage of nonvoters); and there is no consensus on anti-poverty policies. (That shouldn’t come as a surprise; these days, when there is consensus on anything, that’s a surprise.)

The lack of will to attack poverty can be traced to attitudes about the poor and lack of faith in government. Americans’ widespread suspicion that social welfare recipients are “playing the system” (despite reams of data to the contrary) can be traced all the way back to Fifteenth Century English Poor Laws that forbid “giving alms to the sturdy beggar.” A bastardized Calvinism reinforced the belief that people are poor because they are disfavored by God, probably because they are morally defective. (Or, to use George W. Bush’s more recent formulation of that patronizing analysis in promoting his Faith Based Initiative, because the poor “lack middle-class values.”)

If we ever get serious about eliminating poverty, we will need to do two things, and neither will be simple or easy. We will need to marshal armies of community organizers who can persuade poor people to vote (despite the formidable barriers to their votes put in place by legislators who would not benefit from their participation); and we will need to educate the “comfortable” about the reality of poverty–and especially about the plight of the millions of hard-working Americans who put in forty hours or more a week for wages insufficient to sustain them.

Unless we can do those two things–and not so incidentally, fix our gridlocked political system–the poor will always be with us.

 

Socializing Risk, Privatizing Profits: Big Pharma Edition

My friend Fran Quigley has an important article in Truthout about the skyrocketing prices of lifesaving drugs. The current outrage over a steep hike in Epipen prices makes it particularly timely.

As Fran notes, We the Taxpayers provide research dollars to support drug development (socializing the risk that any particular line of research will hit a dead-end). Big Pharma spends more on marketing than on R and D, charges what the market will bear and then some for the drugs it does develop–and pockets the profits.

It is hard to overstate the level of dysfunction in the US medicines system. The headline-producing greed of “pharma bro” Martin Shkreli was just the most dramatic example of a pharmaceutical industry whose patent monopolies grant it immunity from market forces while its political clout shields it from government regulation. Taking full advantage of taxpayer-funded research, drug corporations make record profits, even by Fortune 500 standards, and pay their CEOs as much as $180 million a year. Those corporations spend far more on incessant marketing to consumers and physicians than they do on research — part of the reason they have largely failed to develop new medicines that address the most deadly illnesses and diseases.

The United States is alone among western democracies in not negotiating drug prices. Medicare and Medicaid represent huge portions of pharmaceutical company customers, but Congress has consistently defeated measures that would allow government to use its leverage to bargain on prices. As a result, as Fran points out, “One in every five US cancer patients can’t afford to fill their prescriptions, and many seniors on Medicare are forced to cut their pills in half to stretch their supply.”

Congressional reluctance to push back against inflated prices and unwarranted price hikes can be attributed to politicians’ disinclination to kill the goose that lays the golden egg: each year, Big Pharma ranks among the biggest spenders on both lobbying and campaign contributions.

A ballot initiative in California–the Drug Price Relief Act– is taking aim at this status quo.

The initiative, recently certified by the California Secretary of State as Proposition 61, calls for state agencies to be blocked from paying more for a prescription drug than the price paid by the US Department of Veterans Affairs. Unlike the Medicare program, the VA is free to negotiate the price it pays for drugs and as a result, pays as much as 42 percent less than Medicare and usually significantly lower than state Medicaid programs. The primary force behind the ballot measure, the AIDS Healthcare Foundation, says the law could save Californians hundreds of millions of dollars a year in lower government costs and lower individual co-payments. The California Legislative Analyst Office says it cannot provide an accurate estimate of the savings, concluding that it is impossible to predict how pharmaceutical companies would react to this first-ever restriction on state drug spending…A July 2016 poll conducted by the initiative campaign, Californians for Lower Drug Prices, showed over two-thirds of voters supporting the ballot measure.

Predictably, the measure is being opposed by the pharmaceutical industry, which is pouring big bucks into a campaign against it. It will be very interesting to see what happens–both in other states and nationally–if the ballot measure succeeds.

There’s an old saying that pigs get fed, but hogs get slaughtered. California voters will decide which category best fits Big Pharma.

Stay tuned….