Category Archives: Public Policy and Governance

Tariffs And Taxes

When I was still a Republican, and Republicans were still a political party and not a cult, there was broad agreement within the GOP that tariffs were rarely if ever useful policy tools. They raised the price of goods, invited retaliation, and interfered with productive trade. Today that position is, if anything, more correct: In our increasingly globalized economy, most tariffs are counterproductive.

There was less agreement back then about tax policy, and over the years–as the GOP has pursued tax cuts as an article of faith (and self-interest)–it has taken a real effort on the part of ostensibly thoughtful “policy wonks” to ignore the mounting evidence of the harm that low-tax philosophy was doing. (Kansas, anyone? How about the most recent tax cuts, which even the Congressional Budget office says did nothing for the economy, but did line the pockets of the already obscenely wealthy?)

Trump’s sudden decision (all of his decisions are sudden–comes with the “why examine this, I”ll just go with my gut” process) to impose tariffs on Mexico until they magically manage to seal the border is egregious for a number of reasons. Republican Senator Grassley has noted that trade policy and immigration policy are different, and require different tactics–and that this gambit is highly unlikely to work. Worse still, the U.S. does an enormous amount of business with Mexico, and a large number of American companies have operations in both countries. It gets complicated.

Ed Brayton summed it up succinctly at Dispatches from the Culture Wars:

Most of the goods crossing the border are parts of a larger supply chain, particularly for the auto industry that is already reeling from Trump’s huge tariffs on steel and aluminum. That means this is going to do enormous damage to our economy. Both economies, actually, and what happens when Mexico’s economy is in bad shape? More illegal immigration, obviously. The man is desperately ignorant, on virtually every subject but especially on this one.

I won’t belabor the thorny economic issues raised by this latest bit of Trumpian economic ineptitude. What I do want to point out–and as economists confirm–is that tariffs are taxes on the American public. Trump seems to think they are paid by the country against which he is leveling them, but anyone who has taken Econ 101 knows better. We the People pay the tariffs, because they raise the prices paid by consumers. And they are already hurting the poor.

So tariffs are effectively a tax we pay. Worse, however, they are a tax that fails to do what taxes ought to do: pay for necessary government services.

The Republican approach to tax policy is simply a fixation on cutting taxes. The reason that  is so misguided is that taxes pay for the country’s physical and social infrastructure. The roads we use, the police and firefighters we rely upon, the national defense, the costs of ensuring clean air and water, maintaining the justice system, social security and Medicare…on and on.

Think of the country as a club you belong to, with facilities and amenities that need to be maintained. Taxes are your dues. They keep the club furnace and roof repaired and the grass mowed.

It is entirely appropriate to argue about the specifics of tax policy: how should those dues be assessed? Who should pay the most? How do we ensure that the monies raised are properly spent? What are the tasks we need to fund collectively through government with our tax dollars? Reasonable people will have disagreements about these issues.

But onerous taxes levied through the imposition of disruptive and ineffective tariffs don’t fund our government. They just burden consumers–and especially the poor–without any offsetting benefit or return.

Leaving aside Trump’s multitude of offensive, childish and criminal acts, his ignorance of the economic consequences of his tariffs is a perfect example of his inadequacies for the office.

If Americans are capable of learning a lesson, that lesson is “don’t elect an ignoramus. It will cost you–and it sure won’t make America great.”

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Remember When We Cared About Ethics?

Pro Publica recently revisited an ethics case in Louisiana that has dragged on for nine years.

Now, when I think of states with strongly ethical political cultures, Louisiana doesn’t come to mind, but even in the state that gave us Huey Long and David Duke, the situation on which they reported is notable.

It’s been nine years since the Louisiana Ethics Board first took up what its former chairman called “the most egregious case” to ever come before him.

In 2010, the board accused former state Sen. Robert Marionneaux Jr. of failing to disclose to the board that he was being paid to represent a company in a lawsuit against Louisiana State University. The lack of transparency was only part of the problem. Marionneaux offered to get the Legislature to steer public money toward a settlement, according to charges the Ethics Board later filed against him. The money would also help pay off his contingency fee, which an LSU lawyer pegged at more than $1 million.

Evidently, according to ethics advocates, the snail’s pace and limited scope of the case are due to the weaknesses of Louisiana’s ethics enforcement system.

In 2008, the Legislature delivered ethics reforms that then-Gov. Bobby Jindal billed as a new “gold standard” that any state would covet. But more than a dozen people involved in the system said in interviews that the reforms have done the opposite, chipping away at and dragging out ethics enforcement.

The consensus is that Jindal’s “new and improved” ethics rules created more loopholes than they closed.

Those of us who don’t live in Louisiana shouldn’t get cocky. It would behoove us to look at our own state capitals, and especially at the ethical disaster that is America’s current national administration.

If you Google “Trump Administration Corruption,” you will get 38 million hits. One of the most recent is a Bloomberg Interactive titled “Tracking the Trump Administration Scandals.”(Due to the large number of said scandals, the site allows you to sort by category: administration officials, Trump and his family, the Trump Organization and Trump associates, etc.)

If you are particularly interested in 2018, there’s Washington Monthly’s “A Year in Trump Corruption.” And last October, The New York Times published “Trump’s Corruption: The Definitive List.”

There’s much, much more.

Not unlike the citizens of Louisiana (large numbers of whom, during a gubernatorial election between David Duke and Edwin Edwards, sported bumper stickers saying “Vote for the Crook–It’s important”), we’ve gotten inured to the extent of the venality. To use a political science term, corruption has become normalized.

There will be those among defenders of the petty, self-absorbed criminal in the Oval Office who will insist that “they all did it.” Although there have certainly been unsavory people in high places over the years, that statement is manifestly untrue.

Even if it were accurate, however–even if former Presidents and their cabinets did engage in this degree of unethical or illegal behaviors–they had the good sense (or sense of shame) to hide it. This crew showcases it. Trump likes to insist that he’s “transparent”–when it comes to the transparency of his corruption, and that of his cabinet, that’s true.

There are two explanations for the tendency of Trump & company to flaunt their illegal and unethical behaviors: one, as a group, they aren’t the sharpest knives in the drawer. (Betsy DeVos comes to mind, but she has lots of none-too-bright company); and two, they don’t care. They believe–not without reason–that the public no longer expects government officials to adhere to ethical standards, that those in a position to punish them have been neutered, and that the United States of America–whatever our pretenses of ethical probity and morality–is no different from the corrupt regimes that Trump most admires.

If we do not rise up in 2020 and clean house, the whole country will be Louisiana.

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F**k The Planet

Back in 1992, when I became Executive Director of Indiana’s ACLU, I made it a rule to avoid using the word “outrageous” (a term which had evidently been a favorite of my predecessor), because I believed–and still believe– that when you label every policy or court decision with which you disagree outrageous, pretty soon no one pays any attention to you. You become the crank who cries wolf.

On the other hand, sometimes “outrageous” fits. It was the very first word that came to mind when I read this recent news item from PBS.

GENEVA (AP) — Almost every country in the world has agreed on a legally binding framework for reducing polluting plastic waste, with the United States a notable exception, United Nations environmental officials said Friday.

An agreement on tracking thousands of types of plastic waste emerged at the end of a two-week meeting of U.N.-backed conventions on plastic waste and toxic, hazardous chemicals. Discarded plastic clutters pristine land, floats in huge masses in oceans and entangles wildlife, sometimes with deadly results.

The framework will affect a broad range of products and industries, including health care, technology, aerospace, fashion, and the food and beverage industry. Refusing to get on board won’t allow the few non-signatory countries, like the United States, to escape its impact, because most of them ship plastic waste to countries that have signed on.

Norway led the initiative, which was first unveiled in September. As the report noted, the relatively short period of time from introduction to approval was a blistering pace by traditional U.N. standards–especially for an agreement that is legally binding.

The refusal of the Trump Administration to sign on to yet another global agreement–one that we will necessarily obey anyway–is simply a way of giving the middle finger to science, the United Nations, and our allies. It’s of a piece with Trump’s constant efforts to roll back domestic environmental protections. The President sneers when the threat of climate change is raised, and when it comes to protecting citizens from environmental hazards, his EPA demonstrates weekly that it is firmly in the pocket of chemical and fossil fuel companies.

The Trump Administration’s entire approach to environmental policy deserves to be labeled “outrageous.”

Contrast this fast and loose approach by people who evidently don’t care about the world their grandchildren will inhabit to the campaigns of the Democrats running for President, all of whom give evidence of taking environmental issues seriously.

Look, for example, at Jay Inslee’s campaign.

Gov. Jay Inslee (D-WA), candidate for the Democratic nomination for POTUS is near the back of the pack, polling at 1%. But his new Evergreen Economy Initiative is so very bold, matching the size of the response to the huge size of our climate crisis, that he has now moved into 2nd place in my own 2020 preferences. Warren is still first, but I hope she adopts a climate plan as bold as this. It dwarfs the Green New Deal.  The details are here.

It is not socialist, and does not rely entirely on governmental central planning, but it is a WWII sized effort based on the original New Deal.  It aims to revitalize Labor by repealing all “right to work” laws.It invests $9 Trillion in infrastructure (super high speed rail, better/smarter power grids, zero emission vehicles, green buildings, water conservation, etc.) and green energy production. It aims to get to a zero emission economy by 2030. The plan includes a carbon tax and plans to cap methane emissions and HFCs.

There is a “G.I. Bill” component aimed at coal communities to help them transition to new technologies and not be simply left behind (as they are now with all the coal plant closings).I think there needs to be a similar effort for places Alaska and the Gulf Coast to be quickly weaned off oil & natural gas.

Governor Inslee is highly unlikely to secure the Democratic nomination, but a number of the provisions of his bold initiative are likely to find their way into the platform of whoever does become the nominee.

Sometimes, the consequences of our choices in the voting booth aren’t terribly clear. That won’t be a problem in 2020. No one who cares about the environment, or the future of the planet (or, for that matter, human decency) can justify a vote for Trump or his enablers.

That word I tried so hard to avoid–outrageous– accurately describes both this utterly corrupt administration and the voters who continue to support it.

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Reality Is So Inconvenient

Time Magazine  recently ran a story illustrating the problem with electing stupid, uninformed people.

Numerous media outlets have explained–patiently, and in detail– why Trump’s evident belief that China is paying his tariffs is wrong; they’ve laid out–in painful detail–the way tariffs really work, and why those tariffs are more properly labeled tax increases on the American public.

The Time article addresses a subsequent demonstration of Trump’s utter economic cluelessness.

Tariffs on foreign goods are supposed to help companies that make things in the United States by increasing the costs of products sold by foreign competitors. Indeed, when rationalizing his administration’s increased tariffs on Chinese goods, President Donald Trump on Monday encouraged consumers and businesses to buy goods from countries other than China, or, in what he called the “best idea,” to buy American-made goods.

That would have been good advice, back when American companies were busy manufacturing  horse whips and corsets. These days, however, advice to “buy American” simply displays an embarrassing ignorance about the current realities of  the world of business.

But that advice is almost impossible to follow, as products made in America can contain parts sourced from all over the world. Even the most quintessentially American of goods has parts from somewhere else, whether that be a Ford F-150 pickup, a can of Budweiser, or tire chains from Worcester, Mass. “In the last 20 years, businesses have become much more strategic,” says Kara Reynolds, an economics professor at American University. “More and more often, they are looking at where they can find highest quality and lowest-cost parts so that they can be competitive.” More often than not, that’s China — and that means many U.S. businesses are feeling the pain thanks to Trump’s tariffs.

Trump, as usual, has ignored the warnings of more knowledgable people (a category that includes most sentient humans), and has doubled down on his tariff policy. Farmers have been the most notably hurt, but manufacturers and retailers aren’t far behind. Automobile companies are already feeling the pinch.

The most recent round of tariffs is expected to affect a broad swathe of industries that make products in the United States. “This is playing havoc with the supply chains of Americans producers — increasing their cost and reducing their worldwide competitiveness,” says Robert T. Kudrle, an economics professor at the University of Minnesota. St. Pierre, for example, makes chains and wire rope in its Worcester facility, as it began doing in 1920 when Henry St. Pierre started the company. But as it started facing foreign competition, St. Pierre began buying chain slings and other parts from producers overseas, then cutting them and adding hooks and fittings in the United States.

The cost of those imported chain slings have gone up as tariffs have risen. Even St. Pierre’s horseshoes, which are made completely from U.S. steel, have been affected by the tariffs on foreign goods. As the cost of foreign steel went up, the cost of U.S.-made steel rose too, says Peter St. Pierre, vice president of finance at St. Pierre Manufacturing — and Henry St. Pierre’s grandson. “Everything we do here is steel-related, and over the last year or so, the price of steel has been going up and up,” he said. Increased demand for domestic steel has allowed U.S. producers to raise their prices; one estimatefound that U.S. steel prices have more than doubled since 2015.

Companies affected by the tariffs include a number that make goods in the U.S., thanks to rising duties on imported parts.

A South Carolina plant that assembled televisions using Chinese parts said last yearit was shutting down because of the tariffs. The Beer Institute, which represents 6,000 brewers and 2.2 million American jobs, said thatabout six percent of the cost of beer is the aluminum used in cans, and predicted that higher aluminum tariffs could cost 20,000 American jobs.

Are we tired yet of all that “winning”?

Will his brainwashed base ever decide that it may be time to elect someone with less ego and more functioning brain cells?

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Sad But True

Vox recently had an article detailing the environmental efforts of “subnational” units of government.

The actions being taken by a number of states and cities to curb greenhouse gases and slow climate change are impressive, and we should all be grateful that the anti-science, anti-humanity policies of our federal government are being countered, at least to some extent, by state and local units of government.

The article began, however, with a coy promise: to reveal the “very simple” political trick that cities and states can employ to pass sound environmental policies. It even titled the article “This one weird trick can help any state or city pass clean energy policy.”

Federal climate politics in the US remains as gridlocked as ever, but the past few years have seen a remarkable flourishing of climate and clean energy policy at the subnational level, in states and cities across the country.

This has given rise to all sorts of deep analysis — about the potential and limitations of states as laboratories of democracy, about the role of cities in the 21st century, about the ability of subnational actors to offset federal inaction — but, oddly, the simplest lesson of all often goes unstated.

In point of fact, all these subnational jurisdictions, for all their differences, used the same simple trick to achieve policy success.

What is that trick? Well, it’d be no fun if I just told you!

Instead, let’s run through a quick review of recent subnational policy progress on climate and clean energy. Perhaps, by the end of this list, if you squint just right, you’ll see the trick for yourself.

The article then proceeded to identify a number of places doing the heavy lifting: Washington state, where Democratic Gov. Jay Inslee, working for the first time with solid Democratic majorities in both houses of the state legislature, passed a suite of ambitious bills; Nevada, where newly elected Democratic Gov. Steve Sisolak, working with Democratic majorities in both houses of the state legislature, committed the state to 50 percent renewable electricity by 2030 and 100 percent carbon-free electricity by 2050;
Colorado, where newly elected Democratic Gov. Jared Polis, together with Democratic majorities in that state’s legislature, has passed what the article called “an astonishing suite of climate and clean energy bills.”

The article also noted progress in New Mexico, New Jersey and California, and listed encouraging deliberations in New York, Massachusetts and Maine.

And it wasn’t just states. As the article reported, Los Angeles Mayor Eric Garcetti and the city’s Democratic city council unveiled “LA’s Green New Deal.” New York Mayor Bill de Blasio and the city’s Democratic council passed a sweeping set of climate bills, which would, among other things, target emissions from existing buildings. Chicago Mayor Rahm Emanuel and his Democratic city council passed a bill committing the city to 100 percent renewable energy by 2035.

The article detailed similar successes in Boise, Idaho, Missoula, Montana, Cincinnati, Ohio and Washington, D.C.

So what do all these jurisdictions have in common? What “trick” enabled these state governments to address the threat of climate change so aggressively?

The trick is: elect Democrats.

There are many differences among these jurisdictions in size, ambition, and policy details, but one thing they all have in common is that Democrats have the power to pass policy despite Republican opposition. It’s not that no Republicans voted for any of these measures — there were R votes here and there, so some could charitably be called “bipartisan” — but that Republicans were not in a position to block any of them.

Last year, Nevada had a Republican governor; he vetoed a clean energy mandate. This year it has a Democratic governor; he signed it.

That’s how it works, in practice. When Democrats take control, in numbers that preclude Republican veto power, they pass thoughtful, ambitious policies to reduce greenhouse gas emissions and accelerate the clean energy transition. Where Republicans have the power to block such policies, they do. There are exceptions — all hail Illinois— but they are comparatively rare.

Perhaps climate and clean energy shouldn’t be partisan. But at the present moment, purely as a descriptive matter, they are partisan.

If you care about the environment,  the simplest and most reliable way to support sane environmental policies is to vote Democratic.

Of course, that’s also the “trick” if you care about civil rights, the Constitution, the rule of law…

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