So there were all along three possible ways out of the Government Shutdown and Debt Ceiling Crises, at least from a legislative standpoint.  (After all, remember that any bill would actually have to pass both houses of Congress and be signed by the President.)

  1. The Senate Bipartisan Plan.  This is what happened.  The Senate Leadership from both sides gets together, makes a deal that funds the government and extends the debt ceiling, and includes very little concessions to the GOP (because they have little influence in the Senate).  This is what Obama wanted all along.  It gets through the House with all the Democrats and a minority of the most moderate Republicans.
  2. The Tea Party Pipe Dream.  Obama agrees to sign a bill with large concessions on the Affordable Health Care Act and/or an array of other conservative priorities.  This passes the House with a unified GOP caucus, and squeaks through the Senate because there is enough popular pressure on moderate Democrats to force them to vote for it.
  3. Conference Committee.  The Senate passes their plan.  The unified GOP caucus passes their unified pipe dream.  It goes to conference committee, and something comes out that is palatable enough that it can pass both Houses of Congress and be signed by the President.  No one is happy.
We’ve spent the last 16 days… well, really the last month… with a huge portion of the Right convinced that the #2 was a viable legislative strategy.  Of course, most people with any Washington acumen at all–including such liberals as Newt Gingrich, Karl Rove, and the Wall St. Journal Opinion Page–thought that it was a dumb idea.  After all, you have to be pretty delusional to believe that President Obama and something like 10 Senate Democrats are going to agree to renegotiate their signature policy victory of the last decade when poll after poll told them that if they held firm, the GOP would take the brunt of the blame.
But it wasn’t actually that particular delusion that did in the plan.  It was a much more subtle, but insidious delusion that ultimately caused the GOP to cave in.  After all, notice that both #2 and #3 require a unified GOP caucus.  In other words, all of the House Republicans have to agree on a single bill that would reopen the federal government, extend the debt ceiling, and otherwise be better than the status quo.  This is why the House GOP caucus met two days ago; to come up with such a plan.
And they failed.  They failed spectacularly.  It turns out that the House GOP caucus can’t even agree on whether or not we ought to extend the debt ceiling or reopen government.
Which means that Plans #2 and #3 were non-starters.  The only viable plan left was the one that could have been implemented a month ago.
In other words, hundreds of thousands of people were out of a job for 16 days because the GOP leadership couldn’t admit to the world three weeks ago that the House GOP caucus was too fractured to agree on a compromise with Obama, even if by some miracle he did actually agree to one.
That’s truly amazing.
 

Understanding politics is hard.

The problem is that modern-day politicians have two very different tasks.  First, they must maintain their current positions.  After all, anyone’s first duty at work is to avoid getting fired.  For most of us, that means arriving on time, looking presentable, treating co-workers and clients with respect, and doing whatever we’ve been told by our bosses.  For politicians, keeping their jobs means getting reelected.

The other task is to actually run the country: negotiate, compromise, vote, lead, etc.

Of course, as anyone who regularly reads or watches the news can tell you, those two tasks are very different–and in fact, sometimes contradictory.  Getting reelected requires that politicians spend as much time as possible in their home states, raise lots of money, give lots of passionate “no-holds-barred” speeches, and look good on television.  Running the country requires that politicians spend time in Washington, work closely with people that they disagree with, compromise their most dearly held positions, and work long hours behind the scenes polishing drafts of arcane bills.

This creates a situation where everything that a politician says or does has to be geared towards two very different audiences.  Take the current budget battles in Washington.  At the beginning of any bargain, both parties stake out unrealistic positions, and negotiate to a compromise that they can both live with.  You don’t actually expect to pay half price for a new car, any more than the dealer expects you to pay full sticker price–those are opening bids, and you both know it.  Politicians do the same thing in their own bargains: each side starts out with a long list of things that they want, and then they compromise down to something in the middle.

But here’s where that second audience comes in.  Because politicians don’t just stake out positions for the sake of the compromise; they stake out positions that they can run on next election cycle.  For example, Ted Cruz wants to say that he led the charge against Obamacare, so he gives a pointless 21 hour speech on the Senate floor.  And these positions aren’t just staked out in speeches; sometimes they are staked out in press leaks about how the negotiations are going.  After all, both sides want their constituencies to view them as tough negotiators who refused to compromise on the most important points.

So how are we to interpret the hard-line stances taken by Republicans during these budget negotiations?  Are they actually opening bids that they understand are unrealistic?  In that case, we shouldn’t pay too much attention to them, unless you’re really into the nitty-gritty of budget negotiations.  Or are these positions grandstanding for hyper-conservative political constituencies?  In that case, we really ought to be somewhat worried; after all, many of those constituencies will view compromise as defeat.

We don’t know.  And moreover, the answer varies from politician to politician; some politicians are only laying out hard-line position to improve a future compromise, while others will refuse to vote for any compromise at all.  But because both types of people want to be seen as “reasonable leaders with firm principals”, both types will end up saying and doing the same thing… until the end when they have to either agree on a compromise or blow up the negotiations.

All of which is to say that I really have no idea what’s going to happen with the current budget negotiations.  I’d be lying if I said I wasn’t worried.  But I still hope that there are more politicians, even Republican politicians, interested in getting something done than who are purely interested in grandstanding for the home audience.

 

Health care costs are increasing much more rapidly than inflation.  Therefore any organization that employs, and pays health insurance, for large numbers of people will also have their costs rise significantly faster than inflation.

So, now let’s use that basic fact to answer a few questions:

  • Why has federal entitlement spending ballooned?  In part, because the federal government pays the health care costs of tens of millions of veterans, the poor, and the elderly–not to mention hundreds of thousands of of federal employees (not to mention troops).
  • Why have the costs of higher education skyrocketed? In part, because universities pay the health care costs of thousands of students, staff, and faculty.
  • Why has military spending increased annually, even if you ignore what’s been spent on the Iraq and Afghanistan wars?   In part, because the military employs, and provides health care, for about 1.5 million people.
  • Why have salaries stagnated for most Americans?  In part, because any salary increases they might have had are instead being funneled into rising health care costs.

We cannot solve any of those problems without first solving the problem of health care costs.  Raising taxes and cutting discretionary spending won’t solve the long-term budget problems, unless we deal with health care costs.  Reforming education won’t lower the cost of attending college, unless we also solve the problem of health care costs.  Reforming the military won’t make a huge long-term impact on either efficiency or effectiveness unless we also keep health care costs under control.  Redistributing income with the tax code won’t provide substantial relief for Middle America unless we also take steps to limit the growth of health care costs.

Any anyone who tells you differently is probably selling something.

There are liberal solutions to control health care costs and conservative solutions.  Some are surely better than others, but we are well past that particular debate.  Any solution is better than doing nothing–let’s get health care costs under control first, and then we can deal with any smaller problems created by the fixes that we implemented.

 

Conventional wisdom in politics is often wrong, especially when it comes to policy.

Conventional wisdom says that the national debt is a huge short-term problem for the American economy.  In reality, debt is a long-term problem; eventually, it could lead to higher interest rates and even hyper-inflation, but right now inflation and interest rates are both pretty low by historical standards.

Conventional wisdom says that Mutually Assured Destruction (MAD) kept us safe through the Cold War.  In fact, MAD makes very little sense; after all, it required that the USSR believe that the USA is so vengefully sadistic that we would respond to any nuclear attack by annihilating every Soviet city (and vice versa).  Think of it this way; if your neighbor raped and murdered your wife, is raping and murdering every single member of his family the rational response?  That is the “logic” of MAD.

And conventional wisdom says that it is a strategic problem for us to have “borrowed money from China.”

You heard it again in last night’s debate.  To quote Governor Romney: “Well, first of all, I will eliminate all programs by this test, if they don’t pass it: Is the program so critical it’s worth borrowing money from China to pay for it?”  Well, let’s dig in to what it means to have “borrowed money from China.”   Continue reading »

 

As voters we are often asked to make judgments that we are not really equipped to make. For instance, the ideal balance of threats, military action, and sanctions vies a vie Iran is an incredibly complex problem, even for the minority of Americans who can locate Iran on a map and name it’s dominant religion (Shi’a Islam), ethnicity (Persian), and language (Farsi).

But this November, it appears that voters will be asked to make an even harder decision than that: judge between two alternate versions of American economic performance, neither of which actually happened.

Let’s start with what we can all agree on, at least for the most part. Most Democrats and most Republicans agree that the economy tanked during 2008, that it hit rock-bottom sometime shortly after President Obama was sworn in, and that ever since then it has gotten slowly (if not steadily) better. They also agree that Obama and the then-Democratic Congress passed a series of measures during 2009 that were meant to stimulate the economy, but which also added to the budget deficit (at least in the short-term).

Now here’s where the alternate histories come in.
Continue reading »

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