Category Archives: Public Policy and Governance

Crony Capitalism–The Big Grift

Not to sound like some sort of weird Pollyanna, but despite the considerable downsides and probable suffering involved, perhaps the Trump administration’s coming destruction of America’s governing institutions is overdue. Maybe we need a thorough-going rethinking of the ways in which America’s current governing structures support and encourage some very destructive approaches–especially to our economic life.

As I have frequently asserted, I am a huge fan of market capitalism–properly understood. By “properly understood,” I mean a system that recognizes two essentials of a working market economy: the maintenance of a true level playing field, which requires rational, reasonable regulation; and proper recognition of the areas of the economy that are not suited to a market approach. Markets are marvelous devices for the production of all manner of goods and services–and absolutely inappropriate and damaging in other areas of our communal lives.

The basic definition of a market transaction is one in which a willing buyer and willing seller, both of whom are in possession of all information relevant to the transaction, enter into a sales agreement. Rather obviously, that definition excludes things like medical care, where the “buyer” is not in possession of the same information as the provider, and is generally in no position to bargain with the provider or to shop around for a better deal.

What about transactions where the “buyer” is government?

Take prisons. In a market economy, should government “purchase” incarceration services from entities competing for those government contracts? Or–as most of us might suspect–does the prospect of a “buyer” with virtually unlimited resources thanks to the taxing power invite would-be contractor/sellers to engage in a range of unethical behaviors–big donations to selected political figures in order to get the contracts, and/or failure to provide the services at an optimum (or even adequate) level in order to generate more profit?

Should prisons be privatized–i.e., considered part of the market economy? Or is the marketization of such essentially governmental services an invitation to corruption?

One recent report looked at the “industry” of immigrant detention. Titled “Revenue Over Refuge,” the report found the following:

  • Hundreds of millions of dollars are flowing from city and federal governments to private equity firms for goods and services used to detain immigrants.
  • 63 percent of federally-designated ICE facilities contract with private equity-owned companies for a range of services.
  • Private equity-owned companies are winning emergency contracts for managing migrant shelters in cities across the country.
  • Companies like Wellpath and G4S have faced investigations and lawsuits and paid out settlements for mistreating immigrants in their care.
  • Private equity firms and other alternative asset managers stand to profit from increased taxpayer-funded immigration detention, although alternatives to detention cost less.

Are we really surprised to find corporate America engaging in these profit-maximizing tactics? More fundamentally, are prisons the sort of consumer item we think of when we consider the merits of healthy market economies?

When I was still teaching, I required the graduate students in my Law and Public Policy classes to produce team projects on a  policy issue that the team would choose. Over the years, several of the teams investigated government contracting with the private prison industry. In every case, the teams’ conclusions were highly negative. Not only did they focus on the poor performance of the contractors–and the high potential for graft–but most teams addressed what I think is the underlying philosophical question: when should government contract out–and when shouldn’t it? When is it appropriate for government to be the “willing buyer” in a market transaction?

America is heading for a very ugly few years, as the MAGA movement tries to install a government that might have been appropriate for an 18th Century society–a government utterly insufficient for America’s contemporary culture and other realities of the 21st Century. The next few years will range from very unpleasant to devastating (those of us with documented citizenship, a measure of financial security and white skin will be spared the worst of it; others won’t be so lucky.) But when the fever subsides, when the current MAGA eruption of racism, misogyny, anti-Semitism and other assorted bigotries has run its course (at least this time), the rest of us must be ready to offer practical systemic and economic reforms.

Production of that reform agenda needs to be a central part of the Resistance.

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The Big Sort

I have frequently cited a 2009 book by Bill Bishop, titled “The Big Sort.” Bishop pointed to a then-emerging trend of “voting with one’s feet”–the tendency of many Americans to relocate to places that they find philosophically and politically compatible. The consequences of such sorting can be troubling. What happens when most neighbors agree with your outlook and values, reducing the need to accommodate disagreement or defend your woldview?

I read “The Big Sort” when it first came out, but I still ponder many of the issues it raised. One issue that it didn’t raise, however–at least, I don’t recall Bishop paying attention to it–involved “macro” outcomes: what if the sorting led to very different economic and quality-of-life differences between what we’ve come to identify as “Red” and “Blue” parts of the country?

More than a decade after the book, we are seeing major differences emerge. A recent column by Michael Hicks focused directly on that outcome. As he writes,

Of the 20 richest states today, 19 are solidly Democratic. Of the poorest 20 states, 19 are solidly Republican. The GOP dominates in poor, slowly growing states, while the Democrats dominate politics of prosperous, faster-growing states.

Hicks notes that these differences are largely an outcome of the nationalization of our politics. In former times–in fact, up until the late 1990s– there were conservative Democrats and liberal Republicans. But then, state parties began to align with national politics.

Even races for local municipal government tend to be nationalized. State and local issues are often ignored, or barely discussed in primary or general elections. The homogeneity of national politics will naturally cause parties to represent more similar places.

Hicks then echoes Bishop, finding household sorting by politics. “Though most sorting happens at the sub-state level” (presumably, rural and urban) “the nationalization of politics means that state borders now affect household location choice.” Voters are choosing the political landscapes they prefer.

Hicks notes that when he began researching state and local policy some quarter-century ago, state legislators focused more on local issues; now, many take their “legislative marching orders from national think tanks or national parties. Today, elected leaders from both parties are expected to advance similar legislation, typically written by think tanks, everywhere at once.” (That is certainly the case in Indiana, where our dreadful General Assembly obediently does ALEC’s bidding.)

Education, Hicks tells us, is the most consequential policy difference between thriving Blue states and struggling Red states like Indiana.

The most likely cause of divergence between rich and poor places is the fact that human capital — education, innovation and invention — replaced manufacturing and movement of goods as the primary source of prosperity. In other words, places that grow will collect more human capital. However, the educational policies pursued by both parties are vastly different.

The GOP has largely tried to adopt broad school choice, while cutting funding to both K-12 schools and higher education. The Democrats have largely eschewed school choice, but amply fund both K-12 and higher education. Today, 17 of the 20 states with high educational spending are Democratically controlled and 17 out of the 20 lowest funded states are GOP strongholds.

There’s more to education than spending. Still, higher educational spending, even if it means higher tax rates, is leading to enrollment and population growth. Educational attainment differences alone explain about three quarters of the difference in per capita income between states.

At the same time, school choice effects are smaller than almost anyone hoped or expected. Today, it’s clear that the average student in private school underperforms their public school counterparts (charter schools tend to out-perform both). So, if poor states spend less on education and rely more on school choice, they will become poorer than states spending more on public education.

Economists have been saying this for three decades, with little effect. The prognosis is simply that poor states like Indiana are going to get poorer for decades to come while rich states will grow richer.

Here in Indiana, incoming Governor Braun has made expansion of the state’s voucher program a key priority. He wants to make it “universal,” meaning the eradication of income limits. Indiana’s program is already disproportionately used by upper-middle-class parents; Braun’s proposed giveaway would allow participation by even more privileged families (So much for the pious assurances that vouchers would allow poor children to escape “failing” public schools.)

Vouchers don’t improve educational outcomes, and they drain critical resources from the public schools that continue to serve the overwhelming majority of Indiana children.

If Hicks is reading the data correctly–and I believe he is–states like Indiana will continue to decline, and educated citizens will choose to move elsewhere.

Continuing the “sort.”

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Be Careful What You Wish For…Chevron Edition

Among the Supreme Court’s numerous retreats from what had long been considered “settled law” was a ruling that received relatively little publicity. The general public can be forgiven for failing to realize just how startling–and wrongheaded–the Court’s abandonment of something called “Chevron deference” really was, but the legal community certainly understood the decision as a monumental retreat from precedent and respect for expertise–not to mention an unwarranted increase in judicial power.

Chevron deference was shorthand for a judicial doctrine that has been applied for 40 years in over 18,000 decisions to situations where Congress sends ambiguous directions to executive agencies staffed with people who are experts in the particular area. That ambiguity is necessary; Congress isn’t equipped to determine the proper levels of contaminants in water or to identify carcinogenic chemicals–and even if such specifics were passed, they would be incredibly difficult to monitor and update as technical knowledge advances. 

Recognizing that practical reality, Courts have deferred to agency interpretations/clarifications of those ambiguities, recognizing that judges–like Congresspersons– generally lack the specific technical knowledge required.

The required deference could certainly be overcome. If a plaintiff challenging the agency’s interpretations provided evidence that agency interpretations were unreasonable, Courts could–and did–overrule them. Deference simply required the judicial branch to acknowledge–and respect– the existence of specialized subject-matter expertise, and to recognize that the possession of superior legal knowledge does not make the judicial branch all-knowing.

As an article from Pro Publica reported,

That doctrine, known as Chevron deference, was named after the 1984 Supreme Court case in which it emerged, and it offered an answer to a recurring question: What happens when Congress passes a law granting power to a federal agency but fails to precisely define the boundaries of that power?

In such situations, the doctrine of Chevron deference instructed federal judges to rely on the interpretations made by federal agencies, as long as those interpretations were reasonable, since agencies typically have greater expertise in their subject areas than judges. The Loper Bright decision erased that, commanding federal judges to “exercise their independent judgment in deciding whether an agency has acted within its statutory authority.”

Legal scholars condemned the Loper ruling as yet another departure from stare decisis–respect for precedent–and as an unwarranted departure from a reasonable balance between executive and judicial authority. Those intent upon reducing federal authority–and regulations–cheered it.

But it turns out that the Chevron decision might take its place alongside Dobbs, as a judicial overreach that ideologues may regret. (Dobbs was largely responsible for the non-appearance of the anticipated “Red wave” in 2022.)

A recent article from Stateline suggests that the ruling will allow Blue states to more effectively resist Trump Administration policies.

A major U.S. Supreme Court decision this summer was hailed as a conservative court’s broadside against a Democratic administration, giving red states more backing to delay or overturn policies they don’t like, such as transgender protections and clean energy goals.

But the ruling in the Loper Bright case, which granted courts more power to scrutinize federal rules, can go both ways. Experts say it will likely give blue states more leeway to attack any forthcoming policy changes from President-elect Donald Trump — ranging from immigration and the environment to Medicaid and civil rights.

Lawsuits already are being planned in many states. California is holding a special session to set aside money for legal fights, and Connecticut, Massachusetts, Minnesota, New Jersey and New York also are considering legal strategies

Democratic governors in Colorado and Illinois formed a coalition in November to “fortify essential democratic rights nationwide.”

In effect, the ruling opens more federal rules to those court challenges. Blue states now have a new weapon to fight conservative federal rules on issues such as immigration, climate change, abortion access and civil rights….

Most experts see the change as an obstacle to a new Republican administration looking to make sweeping changes but lacking enough support in Congress to pass large-scale legislation. Any proposals restricting access to abortion or attempting to dismantle the Affordable Care Act or Medicaid expansion will be more complicated, said Zachary Baron, a director of the Center for Health Policy and the Law at Georgetown University’s O’Neill Institute.

Our fractious, gerrymandered Congress hasn’t approved a major immigration or environmental law for decades. That Congressional inability to legislate “has forced both Democratic and Republican administrations to change policy through either executive order or federal regulations that can now be more easily challenged by hostile states in the courts.”

The Loper decision hobbled some of the Biden Administration’s regulatory efforts. The linked article points to a number of ways in which it will also complicate–and prevent–measures threatened by the incoming Trump administration. 

Sauce for the goose……

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We’ve Already Lost Democracy

The recently concluded election was characterized by claims that it was an election to save democracy. While the threat Trump and MAGA pose to America’s form of government is obvious and very real, that argument ignored a very unpleasant reality: We the People no longer choose our public officials. We are no longer a democratic republic. In the 2010 redistricting, Republicans managed a bloodless coup with RedMap, completing a process that had been developing over a number of years. While most of us went about our daily business, we failed to notice that a majority of voters no longer decided elections.

If you doubt the accuracy of that statement–if you think it’s overly dramatic–Ballotpedia has the data to disabuse you.

An uncontested election is one where the number of candidates on the ballot is less than or equal to the number of seats up for election. Candidates running in uncontested elections are virtually guaranteed victory. On average, between 2018 and 2023, 58% of elections covered by Ballotpedia have been uncontested, ranging from a low of 50% in 2021 to a high of 64% in 2020.

Through November 2024, Ballotpedia has covered 76,780 elections in 50 states, the District of Columbia, and five territories. Of that total, 53,428 (70%) were uncontested and 23,352 (30%) were contested.

The current year-to-date rate of 70% uncontested elections is the highest rate Ballotpedia has covered at this point in the year since data collection began in 2018. The second highest rate of uncontested elections was in 2020, at 65%. The lowest rate at this point was 50% in 2021.

When it comes to the type of election being analysed, Ballotpedia finds that 78% of the 2,845 law enforcement elections it covered have been uncontested, making law enforcement contests among the highest uncontested rates. Interestingly, school board races have had the lowest uncontested rate at “only” 49% of the 6,984 covered so far.

On November 5, 2024, Ballotpedia covered 40,646 elections in 50 states, the District of Columbia, and four territories. Of those, 26,218 (64.5%) were uncontested and 14,428 (35.5%) were contested.

Some of the “highlights” (actually, “low lights” would be more accurate) of the report included the following:

Iowa had the highest percentage of uncontested elections, with 1,614 (85%) of the 1,902 elections covered by Ballotpedia uncontested.

Both New Jersey and Puerto Rico had no uncontested elections (0%). In New Jersey, all 17 of the elections covered by Ballotpedia were contested, and all 130 elections covered in Puerto Rico were contested.

Of all the state, district, and territory general election races covered by Ballotpedia on November 5, 2024, Michigan had the highest total number of races at 8,146. Of those, 6,455 (79%) were uncontested.

The most uncontested office type was constable, with 97%, or 39 of the 40 covered races being uncontested elections. Clerk and Treasurer were the second most uncontested office types in Michigan. The combined total number of races for these two offices was 2,688, with 2,522 (93.8%) uncontested.

In Michigan, there were more city council races than any other office type covered, with 1,254 of the 1,732 elections, or 72%, uncontested.

If you think the foregoing data is depressing, the site reports that it underestimates the actual number of uncontested elections.

In some states or for some office types, uncontested elections are canceled, meaning they do not appear on any ballots and are often excluded from other election-related materials including public notices and candidate lists. While Ballotpedia attempts to identify these elections and their winners through direct outreach to election officials, this is not always possible or feasible. The uncontested elections in this analysis are those Ballotpedia was able to identify regardless of whether they were ultimately canceled.

Additionally, this analysis does not include elections where no candidates filed to run.

Permit me to belabor the obvious: elections that offer voters no choice can hardly be considered democratic. The prevalence of gerrymandering–redistricting processes that allow politicians to choose their voters and deny those voters the ability to choose their elected officials–has utterly corrupted American electoral systems. The Supreme Court’s cowardly refusal to rule out the practice has insulated a patently undemocratic process.

In some states, as we’ve seen with reactions to abortion bans, citizens do have recourse to referenda or initiatives–mechanisms that are unwieldy and require massive effort, but at least threaten a check on the most outrageous acts of legislators. Not all states offer those remedies, however–Indiana is one that doesn’t.

So here we are. While Democrats had also engaged in gerrymandering in some states, RedMap’s success allowed the GOP to seize control of the House of Representatives and numerous state offices despite the party’s minority status. The failure of Democrats to contest numerous, presumably “safe” seats reinforced the belief that election results were already “in the bag,” encouraging voters to stay home on election day.

I don’t know what you’d call the system we have had since 2010, but it sure isn’t democracy.

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Really?

According to various media reports, in addition to eying cuts to Social Security, Medicare and Medicaid, the Musk-Ramaswamy proposals to make the government more “efficient,” are focused especially on dramatic cuts to the following: VA Healthcare – $516 billion (100% reduction); the National Institutes of Health – $47 billion (eliminate NIH); Pell Grants – $22 billion (80% reduction); Head Start – $12 billion (100% reduction); the FBI -$11 billion (out of $11.3 billion budget); Federal Prisons -$8 billion (100% reduction) and the SEC – $2 billion (out of $2.1 billion current budget). In other words, the cuts will effectively eliminate the following agencies and programs: VA healthcare, NIH, Head Start, FBI, Federal Prisons, and the SEC.

While it is unlikely that most of these reductions will take place–the “geniuses” who’ve trained their sights on them clearly don’t understand legal or political reality–it is instructive to look at just who would suffer if they were successful: working and middle class people, many of whom comprise the majority of Trump’s base.

It’s equally instructive to note that the “savings” generated by these cuts are intended to make up for diminished revenues anticipated from Trump’s intended tax cuts for the very rich.

What has become very clear as Trump has assembled his “team” is that plutocrats have purchased America’s government. 

Heather Cox Richardson recently cited an NBC News report that Elon Musk alone had spent at least $250 million–a quarter of a billion dollars— to get Trump elected. And Axios has noted that Trump’s administration will be dominated by billionaires.

President-elect Trump has assembled an administration of unprecedented, mind-boggling wealth — smashing his own first-term record by billions of dollars.

That’s even without counting the ballooning fortunes of his prized outside adviser and the world’s richest man: Elon Musk.

Why it matters: It’s not hyperbole to call this a government of billionaires. Whether it acts as a government for billionaires — as Democrats argue is inevitable — could test and potentially tarnish Trump’s populist legacy.

The big picture: Besides Trump, Musk and his fellow Department of Government Efficiency (DOGE) head Vivek Ramaswamy, at least 11 billionaires will be serving key roles in the administration.

Please note that this is without counting Trump, Musk or Ramaswamy. The Axios article has a comprehensive list of the appointees and the net worth of each of them.

The dominance of the super-wealthy and their eagerness to ignore the needs and/or well-being of the rest of us may shed some light on why Congressional Republicans are engaged in an effort to teach a skewed form of civics. 

Republican Congressmen have introduced a bill to support the teaching of civics in the nation’s high schools. This would ordinarily be great news, if the measure contemplated the teaching of actual Civics–a curriculum like “We the People,” for example. This proposal, however–H.R.5349, the “Crucial Communism Teaching Act”– has been described as “a government mandated curriculum requiring all schools to teach the evils of Communism.” When Democratic Rep. Jim McGovern asked why the bill made no mention of the dangers of Fascism, Republicans refused to answer what certainly seems to be a pertinent question: Why are we teaching kids Communism is bad but failing to teach them about the historic failures (not to mention the deaths) caused by Fascism?  

When Rep. McGovern offered an amendment to the Bill to add Fascism to the civics bill, every Republicans voted against that amendment.

Although the most striking aspect of fascist systems is a fervent nationalism–it is characterized by a union between business and the state– in most fascist systems, the uber-rich control the government. Fascist regimes tend to be focused upon a (glorious) past, and to uphold traditional class structures and gender roles that are believed necessary to maintain the social order–a social order that facilitated the acquisition of wealth by those same uber-rich. 

The three elements commonly identified with Fascism are 1) a national identity fused with racial/ethnic identity and concepts of racial superiority; 2) rejection of civil liberties and democracy in favor of authoritarian government; and 3) aggressive militarism. Fascists seek to unify the nation through the elevation of the state over the individual, and the mass mobilization of the national community through discipline, indoctrination, and physical training. (Think Nazi Germany.) 

When people are being trained to focus on the glory of the state (America First), they are more easily distracted from other concerns–like the takeover of their governments by billionaires intent upon protecting their conflicts of interest and special prerogatives at the expense of the masses they disdain. 

Wouldn’t want to teach the kids about that…..they might notice some disquieting similarities….

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