Author Archives: Sheila

I Don’t Know What This Is, But It Sure Isn’t Capitalism…

A number of media outlets have recently reported that Foxcomm, a company usually referred to as a “Taiwanese giant,” will open a plant in Scott Walker’s Wisconsin. As the Guardian prefaced its article,

The announcement by the Taiwanese giant Foxconn that it will build an LCD-manufacturing facility in Wisconsin worth an estimated $10bn was met with considerable fanfare.

But the state has a troubled history in matters of economic development, and the company, a supplier to Apple, Google, Amazon and other tech giants, has a lackluster record when it comes to fulfilling its promises. The news should raise red flags.

In a way, it is a transaction that barely merits publicity; for as long as I can remember, states and municipalities have been trying to entice “job creators” to their areas by offering bigger and better incentives: tax abatements, infrastructure improvements, job training “grants”–all manner of goodies funded out of our tax dollars.

The deal, backers say, will create 13,000 jobs in six years – in return for a reported $3bn in state subsidies. Only 3,000 of those jobs will come immediately. Furthermore, the Washington Post has reported that Foxconn has a track record of breaking such job-creation promises. In 2013, the company announced plans to hire 500 people and invest $30m in Pennsylvania. The plan fizzled out.

Walker and Paul Ryan aren’t the only politicians taking credit for this deal; the White House immediately weighed in, with President Trump reportedly saying, with his characteristic modesty and eloquence: “If I didn’t get elected, [Foxconn] definitely would not be spending $10bn.”

Jennifer Shilling, a Democratic Wisconsin state senator, is one of those who have criticised the deal, noting that the company “has a concerning track record of big announcements with little follow through,” and questioning the legislative appetite for a $1bn-to-$3bn corporate welfare package. Of course, Wisconsin’s legislature is controlled by Republicans who won’t need bipartisan support to pass the enormous subsidies.

The Guardian noted the patchy performance of Foxcomm elsewhere–Foxconn investments in Indonesia, India, Vietnam and Brazil failed to live up to the hype, despite written agreements–and also referred to the less-than-impressive performance of Wisconsin’s previous economic development efforts.

The Wisconsin Economic Development Corporation (WEDC) is a participant in the Foxconn deal. During Walker’s brief presidential run, it was dogged by questions over failed loans. Businessman and Republican donor Ron Van Den Heuvel was indicted for fraudulently borrowing $700,000 from a local bank. Months after WEDC was created in 2011 the agency, then led by Walker, lent him more than $1.2m, without performing a background check.

Likewise, the state’s manufacturing and agriculture tax credit has been widely criticized as a simple refund for millionaires, according to the Wisconsin Budget Project (WBP) nearly “wiping out income taxes for manufacturers and agricultural producers”.

What the Guardian and other outlets failed to address was the absolute absurdity of these sorts of “job creation” efforts. The use of tax revenues to lure large, profitable corporations to one’s city or state may or may not be immoral (I vote for immoral), but the practice is hardly consistent with genuine capitalism and free enterprise, which require that entrepreneurial activities take place on a level playing field.

Criticisms of these sorts of economic development agreements tend to focus on whether the state or city has made a “good deal.” (Evidently, Wisconsin has not.) But that is almost beside the point. The local factory or other home-grown enterprise that prospers enough to hire new workers doesn’t receive these perks; meanwhile, new, sometimes competitive enterprises are being lured to their state with their tax dollars.

This is corporatism, not capitalism. Paul Ryan and Scott Walker are said to be fans of Ayn Rand, but I’ve read Atlas Shrugged. Rand was a capitalism fundamentalist, and would have been disgusted by this deal; she would have labeled the beneficiaries “looters.”

And she’d have been right about that.

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Meanwhile…

Virtually everyone I know is obsessed with the dumpster fire that is our current federal government. It’s certainly understandable; we have a President whose manifest deficiencies become more bizarre by the day, and a Cabinet filled with ideologues who are  incompetent or racist or both. And if you want to know a lot about our “Christian” vice-President, this (very amusing but really totally accurate) site is worth visiting.

Watching what is happening in the nation’s capital is obviously important, but so is the ongoing, on-the-ground work of local governments and nonprofit organizations. In fact, those nonprofit organizations are more important than ever; in a country where the federal apparatus is stuck in neutral (if not reverse), and few of the elected officials in Washington seem to give a rat’s ass about the common good, the steady presence of these voluntary and charitable organizations is often a life preserver.

What made me think about all this was an email announcing an event to support Hope Academy, a “recovery high school” that is attached to and affiliated with Fairbanks Hospital.

I had visited Fairbanks Hospital and Hope Academy a few years ago, at the invitation of a good friend who was then the President/CEO of Fairbanks, and I was duly impressed. As local folks know, Fairbanks Hospital addresses substance abuse in adults, and it has been a compassionate and supportive lifeline for people hooked on alcohol or drugs. At the time of my first visit, my friend and her board had just established Hope Academy.

A couple of months ago, on a return visit, I talked at length with teachers and students, and was once again struck by the importance of what Hope Academy does.

The individual stories really got to me: “Jeremy” was using and selling hard drugs, blacking out and failing tests in his high school. He was in jail at 17. After he was released, he found Hope Academy and he now has a college degree, a good job, and a wife and child. “Ben,” another graduate, has turned his life around and is working on a dual master’s degree at Purdue. There were many other stories, equally inspiring.

Medical science confirms that addiction is a disease, not a failure of will power or evidence of moral failure. Like other diseases, it can be cured–or at least sent into remission–if pproached with appropriate understanding, support and treatment.

That costs money, of course, and it’s no surprise that Medicare and Medicaid together account for only 27% of Fairbanks’ operating budget. Given what’s going on in Washington, Fairbanks’ staff aren’t expecting that to improve any time soon. Like so many other nonprofits, they depend heavily on volunteers and donors–on “the kindness of strangers.”

I’ve dwelled a bit on this particular nonprofit, not just because I recently visited, but because Fairbanks and Hope Academy are examples of the thousands of voluntary organizations supported by people of good will–people who have seen gaping holes in America’s social safety net and moved to fill them. (It’s like the tag line in that old TV series, “The Naked City”–“There are a million stories in the Naked City; this has been one of them.”)

America has so many truly admirable people providing so many important services out of the goodness of their hearts–working in our communities to make life better for their neighbors, helping people who need that help, giving of their time and treasure to make  the worlds of those less fortunate just a little less desolate and forbidding.

Seeing compassion and generosity in action raises the question: why aren’t we sending those sorts of people to Washington?

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A Selective Kudos

I’m sure it didn’t have anything to do with gender bias (cough, cough), but during the fevered coverage of the GOP’s “repeal and replace” efforts, there was virtually no media coverage of a heroic Senator who–despite suffering from Stage Four cancer– came to Washington last week to cast a vote against repeal of the Affordable Care Act.

She got no standing ovation. She got no mainstream media lauds for her heroism. She got no kudos for leaving home, a much longer journey than that other senator, the one from Arizona, to get to DC, and there are no mainstream media stories on it that I can find… I only found out from a friend who spotted it on Twitter.

She didn’t do it for publicity.

Senator Mazie Hirono of Hawaii was just doing her job as a good politician, voting not to repeal the ACA so as to protect her constituents. She has Stage Four kidney cancer — that means scarce chances of survival — is recovering from a second surgery to remove part of a rib, and made sure she got to her seat in the Senate Chamber to vote “no” to whatever Republican wealth-care crap was thrown at her.

But you’ll only find out about it on social media. Because she’s not a pale male, maybe?

After this post ran on Daily Kos, a few media outlets did pick up the story (in an “oh by the way” fashion).

I’m as grateful as anyone for John McCain’s vote, but I’ll admit to being annoyed by the disparity between the overwhelming and laudatory coverage of his vote and the votes of Senator Hirono and especially the equally dispositive (and far more steadfast) positions of Senators Collins and Murkowsky.

I think I want a bumper sticker that says: If you still have healthcare, thank a woman! (Not a woman from Indiana, however….our female Representatives both voted for the obscenity that passed the House– they supported Paul Ryan’s efforts to destroy Obamacare, defund Planned Parenthood, eviscerate Medicaid and use the money saved to provide tax breaks for the rich. Jackie Walorski and Susan Brooks have both been reliable, enthusiastic Trumpsters. In a sane world, that would be enough to guarantee them ignominious defeat in 2018.)

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If You Can’t Defeat It, Sabotage It

During the ongoing saga of the Senate’s inability to formally eviscerate the Affordable Care Act, “President” Trump has tweeted out several threats: to fund primary opponents of Republicans who refused to support repeal,  to punish Alaskans for the votes of their Senator, and implicitly, after the measure failed, to sabotage the Affordable Care Act to ensure that it will fail.

Nice guy–as no one ever has said.

The Washington Post, among many others, has reported on the methodology behind the madness. (Madness used here in both senses of that term…)

Blue Cross Blue Shield of North Carolina has announced that it intends to try to raise premiums by 22.9 percent next year. The company says it would have tried to raise them by only 8.8 percent, but it is going for the larger increase because the Trump administration has not said whether it will continue paying the law’s so-called “cost-sharing reductions” (CSRs) to insurance companies, which subsidize out-of-pocket costs for lower-income people who get insurance on the individual markets. Democrats in Congress want to appropriate money to cover these subsidies, but Republicans have not done so….

Trump has repeatedly threatened to cut off the CSRs. Doing so could cause many insurers to exit the market, potentially costing millions their insurance, while causing others to dramatically hike premiums. The administration paid them for May, but officials continue to refuse to saywhether the payments will continue after that. The CSRs are tied up in court: House Republicans sued to stop them under Barack Obama, whose administration appealed the decision, and the payments continued pending the appeal, but the Trump administration has not said whether it will continue the appeal (dropping it would cause the payments to halt) and recently asked for a 90-day delay from the court while it mulls their fate. But this has only injected further uncertainty, and while some congressional Republicans have said they think the funds must be appropriated to stabilize the situation, there’s no sign whether they actually will.

Anthem Insurance, based here in my home city of Indianapolis, has withdrawn from participation in several of the exchanges due to the lack of CSR certainty.

The Center on Budget and Policy Priorities has actually added “Sabotage Watch” to its webpage; it tracks administration actions taken to undermine the Act, month by month, since Trump’s inauguration. Here’s the entry for July:

July 20

The Trump Administration ends contracts with two private firms to provide in-person assistance in states using HealthCare.gov for marketplace enrollment.  Since the first open enrollment period in 2013, Cognosante LLC and CSRA Inc. have provided one-on-one assistance for people enrolling in marketplace plans and applying for subsidies.  The loss of this assistance is especially likely to affect enrollment for 2018 coverage because the Administration has already shortened the open enrollment period to six weeks.

July 20

The Department of Health and Human Services (HHS) continues its public relations campaign attacking the ACA. HHS has released 23 videos featuring individuals explaining how the ACA has harmed them.  HHS has also used its twitter account to amplify anti-ACA messages and removed website content promoting the ACA, including the popular ACA provision enabling young people to stay on their parents’ plans until they turn 26.

A number of publications have reported on the Administration’s efforts to undermine “Obamacare.” The following explanation from New York Magazine is typical.

By threatening to stop paying out those so-called cost-sharing reductions — while also threatening not to enforce penalties on those go without insurance — the White House sowed uncertainty that chased insurers out of Obamacare.

In mid-April, several of America’s largest insurance companies descended on Washington to seek the White House’s assurance that Trump’s rhetoric about withholding the subsidies was just a bluff. Seema Verma, Trump’s head of Medicare and Medicaid Services, informed the insurers that it couldbe a bluff — if they agreed to publicly support the president’s health-care bill.

The insurers found little comfort in this exchange. Nor did Trumpcare’s sudden revival calm their nerves. To protect themselves from a diverse array of very-bad-case scenarios, many jacked up their premiums and wound down their participation in the Affordable Care Act.

It’s hard to find words to describe this behavior. Unconscionable, despicable and disgusting come to mind….

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Revisiting the Big Sort

A recent article posted to the website of the Niskanen Center  corroborated a depressing theory that I have entertained over the past several years.

The United States is not very united.

Americans have been sorting themselves along ideological lines into like-minded regions of the country, increasing polarization in congressional voting patterns, and creating a striking division in political preference and party loyalty between city-dwellers and the denizens of low-density exurban and rural counties.

Population patterns matter; they also defeat truly representative government. The United States has considerably more Democratic than Republican voters, but the Democrats are  concentrated in a handful of Democrat-heavy cities and states; Republicans, on the other hand, are spread relatively thinly but evenly across the non-urban regions of the country.

Add gerrymandering, and the Republican electoral advantage becomes overwhelming.

What does the urban/rural divide look like?

Because America’s highly-schooled creative, political, academic, and business classes tend to cluster in liberal cities, the town-and-country split corresponds to a rough class distinction between so-called “elites” and non-urban non-elites. Underline “rough” here.

People of color number heavily among urban non-elites, and tend to vote with (mostly white) urban elites, so it’s wrong to conflate the town-and-country divide with the elite/ordinary folks divide. Many, many millions of ordinary Americans aren’t white and live in big cities. That said, the United States will remain a white-majority, white-dominated country for another few decades. Populist anti-elitism, as it has manifested itself behind Trump, seems to me largely a reaction of non-city-dwelling whites against urban whites and the cosmopolitan, multicultural conception of American identity they affirm.

But let me repeat that “white people who don’t live in cities” is not remotely the same thing as “the people,” most of whom do live in densely populated metropolitan areas, and many of whom are African-American, Asian, and Hispanic. And it’s important to clarify further that “white people who don’t live in cities” is also not remotely the same thing as “the white working class,” as there are many millions of non-urban, white people with college degrees and upper-class incomes. The ruling political, business, and cultural classes in Republican-dominated places like to pretend that they’re “just folks,” too, but they aren’t. They’re elites.

The point being made is important, because many pundits continue to focus on economic distress as the reason for the urban/rural divide. The theory is that poor rural residents resent the comparative affluence of their urban counterparts. A number of studies conducted after the election, however, have reached the same conclusion as the author of this article–Trump voters actually were economically better off on average than Clinton voters. (They were not, however, from regions that were as economically productive–and as the article explains in the conclusion, that matters.)

The author notes a variety of efforts to explain the personality differences between liberals and conservatives, before concluding that evidence confirms the “big sort” first identified by Bill Bishop.

The upshot is that liberals (low conscientiousness, high openness to experience) and conservatives (high conscientiousness, low openness) have distinctive personalities, and that there’s reason to believe we’ve been sorting ourselves into communities of psychologically/ideologically similar people.

To make matters worse, as Cass Sunstein’s work on group deliberation shows, we tend to radicalize in the direction of our predispositions when we’re surrounded by people who already agree with us. In short, we’re moving into bubbles of people who resemble us and an echo chamber effect pushes our opinions to extremes.

If this were the whole story, America’s future would be grim indeed, but as the author notes, entire cultures tend to become more liberal in their attitudes over time. The content of conservative ideology has changed–liberalized–over my own lifetime, and the article delves into the reasons for that phenomenon.

It also explains how and why improving economic productivity liberalizes social beliefs and values–and notes that, in the U.S. at this particular moment in time, “Clinton” counties are far more productive than “Trump” counties.

The United States may be dividing into two increasingly polarized cultures: an increasingly secular-rational and self-expression oriented “post-materialist” culture concentrated in big cities and the academic archipelago, and a largely rural and exurban culture that has been tilting in the opposite direction, toward zero-sum survival values, while trying to hold the line on traditional values…For a certain group of Americans, liberalizing post-materialist cultural change has been ongoing. For another, it has stalled or reversed.

To (partially) sum up:

A shrinking number of counties is accounting for a rising proportion of America’s wealth. Partisan affiliation is breaking along this population/productivity divide in a way that suggests that America’s moral and political culture has been polarizing along this divide, as well. Given the specific counter-majoritarian mechanisms in the U.S. constitution, this is a recipe for political dominance of the less economically productive conservative white minority, who control most of the country’s territory, over the liberal multicultural majority who live in increasingly concentrated urban centers of wealth. To the extent that increasing economic security is liberalizing and stagnation and decline tend toward an illiberal, zero-sum survival mindset, this amounts to a recipe for the political imposition of relatively illiberal policy on increasingly liberal and increasingly economically powerful cities. This is not a stable situation, and bodes ill for the future of American freedom.

The rest of the (very long) article considers why this is happening, and a subsequent article by the same author suggests policies that might ameliorate the divide. Both are well worth reading and considering–although I suggest accompanying that endeavor with a stiff drink.

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