Public Policy and Governance – Page 153

Impeachment And The Economy

In a recent column, Paul Krugman opined that–among other benefits that some of us see (like potentially ridding ourselves of a severely mentally-ill President who has the launch codes)–the Impeachment inquiry launched by Democrats in the House will be good for the economy.

This seemed counterintuitive, since we have always heard that the markets respond negatively to uncertainty–and as we are seeing, Trump’s behavior when he is cornered is nothing if not unpredictable.

Krugman’s column anticipated Pelosi’s announcement, but applauded Impeachment’s probable effect on the economy.

If there’s one thing the tweeter in chief believes, it is that what’s good for Donald Trump is good for America. A little over a month ago (although it seems like much longer) he told a rally that “you have no choice but to vote for me,” because his electoral defeat would lead to a market crash.

But a funny thing has happened over the course of Trump’s latest terrible, horrible, very bad, no good two weeks. Suddenly, impeachment (though not removal from office) has gone from highly unlikely to highly likely. In fact, given the explosive nature of the now-revealed whistle-blower complaint, I don’t really understand how he can not be impeached.

And the financial markets have basically shrugged.

As Krugman notes, on the surface, this is strange. No matter what the outcome of the Impeachment proceedings, while they are going on, they are pretty much the only game in town: little or nothing else will happen. The administration’s legislative agenda will come to a screeching halt. Why doesn’t this worry investors?

The answer is, “What legislative agenda?”

Even when Trump’s party controlled both houses of Congress, he had only two major legislative initiatives. One was a big tax cut for corporations and the wealthy that will generate trillions in deficits but doesn’t seem to have done much for the economy. The other was an attempt to take away health insurance from around 30 million Americans, which didn’t pass.

It’s pretty obvious that, between watching Fox News and tweeting, Trump has had very little time for legislating, or for that matter, governing. (He has also given us ample reason to believe he has absolutely no idea how government works or how legislation is passed, which may explain his disinterest in both.)

To be fair, legislation isn’t the only way presidents can make policy, and the prospect of impeachment will probably exert a chilling effect on Trump’s ability to pursue policy through executive fiat. But here’s the thing: Since most of what Trump is trying to do is bad for America, whatever paralysis impeachment may induce is all to the good.

For Trump has, in effect, been waging a war on competence.

We’ve noticed.

In Trump’s vision of government, career diplomats who do actual diplomacy, experienced regulators who actually try to enforce regulations, researchers who produce objective data — up to and including weather forecasters whose predictions he doesn’t like — are all part of a deep state that’s out to get him. So Trump officials have been engaged in a systematic campaign to degrade America’s Civil Service, driving out people who know what they’re doing and replacing them with political hacks.

I’ve encountered a few members of Trump’s base, and their justifications for supporting him are consistent with Krugman’s description. Only “elitists” believe that people in government actually need to know something about governing, or have experience or expertise in the subject-matter with which they are engaged. Any businessperson–well, any white businessman— can run government.

Hell, you don’t need no fancy-shmancy degrees or experience. Just look at all those “best people” that Trump’s installed who are getting rid of all those silly rules and regulations that just get in the way of making a profit.

As Krugman says,

An impeachment inquiry will surely have a chilling effect on the Trumpian project of government degradation. It may not come to a dead halt, but Trump’s team of cronies will be distracted; they will be less brazen; they will be worrying about more potential whistle-blowers going public about what they’re doing.

In short, paralysis can be a very good thing. I’m rooting for it.

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Another Black Eye For Indiana

A reader of this blog recently sent me a research report from Ball State. In this study, the author, Michael Hicks, confirms conclusions reached by other solid researchers.

One such conclusion: sick people in Indiana are being fleeced by hospitals that are supposedly “nonprofit.”

Hicks began by admitting his preconceptions:

Several weeks ago, a concerned citizen sent me a financial summary of Indiana’s not-for-profit hospitals. He asked that I look into the issue of excessive profits by these systems. I was skeptical that the issue would be relevant. Profits are critical to an economy; they serve as a guide to pricing and investment decisions and reward the men and women who create value. The demonization of profits is a sure sign of unformed thought. Moreover, not-for-profit hospitals have explicitly chosen to forgo profits as part of their operations, so I doubted the financial summary would reveal anything important. I was mistaken.

What he found shocked him–and should shock us.

It turns out the not-for-profit hospital industry and their network of clinics is the single most profitable industry in Indiana. These profits are so large that when accumulated, they account for roughly 9 percent of the state’s total economy. As of 2017, this industry had accrued more than $27 billion, yes billion. Yet, the not-for-profit industry in Indiana pays virtually no taxes and invests almost none of those profits locally. That money is invested in Wall Street, not Main Street. However, they do charge Hoosiers a premium to access healthcare.

The numbers come from a Rand Corporation study conducted earlier this year that found hospitals in Indiana charging among the highest prices in the nation. Hicks noted that he had confirmed Rand’s data, and had compared the results with with the lack of competition in each healthcare market.

In places where there is little competition, such as Fort Wayne, consumers pay more than twice the cost for a typical medical treatment as they do in places with the most competition. This is how these hospitals accrued excess profits that are roughly 12 times larger than the entire state of Indiana’s Rainy Day Fund.

Hicks says that Hoosiers pay $819 more per person per year than the average American, and attributes that premium to the growth of monopoly power among the state’s not-for-profit hospitals. And he provides examples.

Parkview Hospital is the most blatant example. In one recent year, Parkview Hospital in Wabash earned a 48 percent profit rate. By comparison, Walmart, which also has a store in Wabash, had a profit rate of 3.12 percent that year. Parkview Hospital’s profit absorbed a full 4.1 percent of the county’s GDP (gross domestic product).

Using data from a ProPublica investigative website, I found IU Ball Memorial Hospital enjoyed a lavish 23.8 percent profits in that year. This was more than $100 million, or a full 2.5 percent of the county’s GDP. Despite this, the president of IU/BMH recently begged the city of Muncie to subsidize new luxury apartments so his doctors could live downtown. That subsidy will cost Muncie Community Schools more than $2 million, which just so happens to be about two days of profits at the not-for-profit IU Ball Memorial Hospital. There are literally dozens of other outrageous examples reflecting an appalling lack of governance at not-for-profit hospitals.

This situation is particularly hurtful for local governments that are already reeling from Mitch Daniels’ politically-brilliant and governmentally-destructive constitutionalization of property tax caps. As Hicks rightfully notes,

Local governments are also victims. The most profitable industry in our state pays no property tax and no income tax, but overcharges schools, city and county governments for healthcare.

Hicks ends his article with a warning to profiteering organizations–it can’t go on like this for much longer. As he says, it’s an open invitation to plaintiffs attorneys and politicians alike.

To place this in historical context, the profit rates at Indiana’s not-for-profit hospitals are larger than anything the Gilded Age robber barons were able to secure. In this observation is a final lesson. In the process of vetting this study with several colleagues, I shared it with one lifetime Republican and veteran of two GOP administrations. His response was simply that this is the single best argument for Warren/Sanders healthcare reform he had ever seen. He is not wrong, and that alone should prompt quick legislative, regulatory and legal action.

I wouldn’t bet on it.

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Subsidizing Our Own Destruction

That biblical admonition about “love of money” being the root of all evil continues to be pertinent.

We are now experiencing the initial effects of climate change–effects that scientists have warned about for many years–and sane people know that much worse is to come. Yet rather than directing resources to measures that will ameliorate it, governments all over the globe are continuing to subsidize behaviors that are known to make the problem worse.

The public is providing more than $1m per minute in global farm subsidies, much of which is driving the climate crisis and destruction of wildlife, according to a new report.

Just 1% of the $700bn (£560bn) a year given to farmers is used to benefit the environment, the analysis found. Much of the total instead promotes high-emission cattle production, forest destruction and pollution from the overuse of fertiliser.

The security of humanity is at risk without reform to these subsidies, a big reduction in meat eating in rich nations and other damaging uses of land, the report says. But redirecting the subsidies to storing carbon in soil, producing healthier food, cutting waste and growing trees is a huge opportunity, it says.

The report rejects the idea that subsidies are needed to supply cheap food. It found that the cost of the damage currently caused by agriculture is greater than the value of the food produced. New assessments in the report found producing healthy, sustainable food would actually cut food prices, as the condition of the land improves.

To add insult to injury, in the U.S., those subsidies disproportionately fatten the wallets of big corporate farming operations–not the small family farms urban folks envision when the subject is raised.

Nor is our pell-mell race toward self-destruction limited to farming. When I was researching my most recent book, I was astonished by the enormity of the subsidies of fossil fuels. Despite the fact that climate change is already affecting America’s weather, increasing the urgency of efforts to reduce carbon emissions and increase the development and use of clean energy sources, the United States spends billions of dollars a year subsidizing fossil fuels. The International Monetary Fund estimates that the United States has spent more subsidizing fossil fuels in recent years than it has on defense spending. The IMF found that when indirect subsidies for coal, oil and gas were factored in, subsidies reached $649 billion in 2015, a year when Pentagon spending was $559 billion.

Most inexplicable of all is the fact that that amount includes 2.5 billion per year specifically earmarked for searching out new fossil fuel resources.

Oil Change International calculates that permanent tax breaks to the US fossil fuel industry are seven times larger than those for renewable energy. Several of those fossil fuel subsidies make it profitable to extract resources that it would not otherwise be cost-effective to extract. Energy experts tell us that, at current prices, the production of nearly half of all U.S. oil would not be economically viable, but for federal and state subsidies.

The Obama administration had proposed to eliminate 60% of federal fossil fuel industry subsidies, but–surprise!– that proposal went nowhere.

During the 2015-2016 election cycle oil, gas, and coal companies spent $354 million in campaign contributions and lobbying. The industry received $29.4 billion in federal subsidies in total over those same years – reaping a 8,200% return on investment.

It is difficult to argue with the conclusion of the OCI report: “Removing these highly inefficient [fossil fuel] subsidies – which waste billions of dollars propping up an industry incompatible with safe climate limits – should be the first priority of fiscally responsible climate, energy, and tax reform policies.”

Our first priority should be the election of lawmakers who will not be seduced by “love of money” and who will work to save the planet for our children and grandchildren.

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The Fight Is Never Over

When I first began this blog, one of the issues I frequently addressed was gay rights. LGBTQ folks still faced formidable barriers to equality; same-sex marriage was a pipe dream, with DOMA at the federal level and so-called “mini-DOMAs” in many states. Activists were fighting “Don’t Ask, Don’t tell” and working to include protection against discrimination on the basis of sexual orientation and gender identity in state civil rights statutes.

In Indiana, civil rights organizations and major businesses managed to defeat an effort to place a ban on same-sex marriage in the state’s constitution, but we still lack those “four little words”–sexual identity and gender identity–in our civil rights law. Unless you live in an Indiana city with an inclusive human rights ordinance, it is still perfectly legal here to fire someone for being gay. We also remain one of only five states without an inclusive hate crimes law.

Even in states like Indiana, though, LGBTQ folks have benefitted from the truly dramatic shift in public opinion that has occurred over the past couple of decades. As homophobia ebbed–it certainly hasn’t disappeared, but it has greatly diminished–this blog focused on other issues.

Attacks on LGBTQ citizens may have diminished, but as young folks like to say, “haters gotta hate.” As an article in the Guardian recently illustrated, there is plenty of room for homophobia among the numerous bigotries exhibited by our accidental President and those who support him.

The Trump administration has attacked LGBT rights in healthcare, employment, housing, education, commerce, the military, prisons and sports.

These efforts, it turns out, were just the beginning.

The president’s anti-LGBT agenda could soon gain significant momentum at the US Supreme Court, where Trump’s Department of Justice (DoJ) is pushing to make it legal to fire people for being gay or transgender. The move would fundamentally reverse civil rights for millions of people, LGBT leaders say, and raises fears that LGBT people may lose the minimal protections and resources they have won in past years.

“This is a critical point in history,” said Alesdair Ittelson, the law and policy director at interACT: Advocates for Intersex Youth. “The outcome of this case is going to have a tremendous impact on everyone.”

During the Obama administration, the LGBTQ community won significant victories: repeal of “don’t ask, don’t tell,” new protections under the Affordable Care Act, an anti-discrimination executive order and expanded recognition of trans rights, among other things. Those victories are now under attack.

Since taking office, the Trump administration has sought to reverse healthcare protections for trans people, moved to ban trans people from serving in the military, eliminated rules protecting trans students and pushed to allow businesses to turn away gay and trans customers if they seek a religious exemption.

Last month, the Trump justice department made its most aggressive anti-gay legal argument to date, urging the supreme court to rule that gay employees are not protected under a longstanding act that prohibits “sex discrimination”. The DoJ filed briefs related to three supreme court cases to be heard together on 8 October – two involving gay men fired from their jobs, and a third involving a woman terminated by her employer after she came out as trans.

The courts have repeatedly held that gay people are covered by Title VII of the Civil Rights Act. Before Trump, the federal government agreed. But William Barr’s Department of Justice is now arguing that sexual orientation and gender identity are excluded under Title VII because “sex” means only whether people are “biologically male or female.”

Before Trump, the Justice Department pursued justice. Before Trump, judicial nominees elevated to the federal bench were vetted for legal competence, not for fidelity to radical “conservative” (actually fundamentalist Christian) ideology.

Before Trump, even our worst Presidents weren’t rabid White Nationalists, Islamophobes, homophobes, anti-Semites and proud and loud racists.

But that was then, and now is now.

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The Urban-Rural Divide…Elsewhere

I’ve posted before about the urban/rural divide, and why it’s politically consequential.

In 2014, the Wall Street Journal quoted Neil Levesque, director of the New Hampshire Institute of Politics, for the proposition that the differences in the United States aren’t really “red versus blue” but “urban versus rural.” That observation has been echoed widely, as the differences between residents of rural and small-town America and those who live in urban areas have become steadily more pronounced.

Religion–a historically important generator of conflict– is one such difference: urban Americans are more than three times more likely than their rural counterparts to say that religion isn’t particularly important to them. (Attitudes on social issues reflect that difference: rural residents are far more likely to consider homosexuality a sin and to oppose same-sex marriage, to oppose abortion, and to support restrictions on immigration.)

A survey by Pew in 2018 found white rural residents twice as likely as white urban dwellers to insist that they don’t enjoy a social advantage by reason of their skin color.

Rural residents are more likely to be older and poorer and more likely to be isolated than urban dwellers. They are also far more likely to be Republican.

Despite the fact that some 80% of Americans now live in cities, the structure of America’s electoral system continues to significantly advantage rural voters, especially but not exclusively through the operation of the Electoral College. Whether what is called the urban/rural split is defined simply as city versus country, or by a more complex cultural regionalism, those ubiquitous red/blue maps attest to the measurable and consequential differences between urban and rural Americans.

This situation, according to the Washington Post, is not exclusively an American phenomenon.A report from 2016 suggests a very similar state of affairs in Europe.

What shaped European politics over the past two years might appear to some like a revolution of rural Europe rising up against the establishment and economic winners.

Support for Britain leaving the European Union was highest in rural areas in the June referendum.

It is also “rural France” that might empower far-right politician Marine Le Pen next year.

In Germany, the urban establishment underestimated the backlash the recent influx of refugees would provoke in less densely populated areas.

In rural northern Europe, the article tells us, younger, better educated men and women have moved to cities to find employment. That statement also describes states like Indiana, where small towns continue to empty out as young people depart for more densely populated cities.

Even in federal republics like Germany, which lack the dominance of one single capital city, an urban-rural disconnect is increasingly visible. Whereas Berlin has attracted foreigners and Germans alike, its surrounding areas have seen a rapid demographic change. Supermarkets have closed, and bus connections were canceled as a result. It is a pattern which can be observed all over Europe at the moment.

The description of those who have stayed in Europe’s rural areas is familiar here too: a feeling of being left behind has replaced the pride of place that used to characterize small villages and hamlets. Rural residents exhibit a sense of abandonment and replacement that the article suggests is largely responsible for the election of Trump and the vote for Brexit.

When people feel left behind, they want someone to blame.

And as these native Britons feel trapped with no economic future, they see images of an increasingly diverse population in the cities. To many Brexit supporters, concerns over an influx of immigrants were among the reasons they voted to leave the E.U.

In Germany, similar feelings have created a different kind of backlash: anti-immigration protests and anti-refugee attacks. Economically distressed eastern Germany has seen the vast majority of those attacks. That region, an area which consists of five states excluding Berlin, accounts for only about 15 percent of the German population. Yet the majority of anti-immigrant attacks took place in the country’s east in 2015.

In one way, it’s comforting to recognize that we aren’t the only country experiencing this problem. But while “misery loves company,” commiserating with that company doesn’t solve our problems.

A country with a functioning government would work to address the problems of rural decline–try to ameliorate the isolation and frustration that feed racial and ethnic resentments. But we don’t have a functioning government.

We have an administration that needs to keep fueling those rural frustrations and resentments. They are the sentiments that motivate the GOP base.

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