Wealth and Power

For the last few years, there’s been a good deal of debate over the growing gap between the rich and everyone else.

We’ve all seen the numbers: the top 1% of Americans own 43% of all the nation’s wealth, and the next 4% owns another 29%. Meanwhile, 80% of Americans share only 7% of the nation’s total wealth.

That bare fact is troubling enough–disparities of this magnitude typically generate resentment and often lead to significant social disruptions–but the reasons for that gap are even more worrisome. The truth of the matter is that money buys access and power. Poor folks don’t have lobbyists, they don’t make significant political contributions. To use academic jargon, the poor lack “voice.” Meanwhile, the rich have megaphones.

Look at the proposals to cut the deficit–a deficit caused primarily by two ill-considered wars (wars that “coincidentally” enriched a number of major corporations) coupled with massive tax cuts for the wealthy. Programs at risk include things like early childhood education, low-income housing programs, community health centers, family planning and job training–all programs that assist poor Americans. It’s estimated that cuts to these programs will “save” 44 billion dollars (save is in quotes because most of these are short-term savings with significant long-term costs). Meanwhile, the recent extension of the Bush tax cuts to the richest 2% of Americans cost the treasury 42 billion a year. Changes to the estate tax–dubbed the “death tax” by opponents–cost another 11.5 billion.

Let me be very clear: I accept the argument that confiscatory tax rates dampen innovation and entrepreneurship. And I not only accept, but heartily endorse market economics. I’m a capitalist and make no apologies for that. But American tax rates are at their lowest levels in fifty years, and one would have to be delusional to believe that returning the top rate to 39%–the rate during the Clinton administration–would discourage investment. What is even clearer is that we have abandoned markets in favor of crony capitalism. Large employers and the wealthy have used their clout to game the system; they have effectively bought tax and other advantages that have had the effect of protecting them from the very market forces they so piously invoke.  Instead of a genuinely free market, where businesses compete on a level playing field, we have an economic oligarchy–an Animal Farm where some are much more equal than others.

This state of affairs is bad for the economy in the long term. It is worse for social stability and democratic institutions.

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Where are the Men in the White Coats When You Need Them?

News flash! The Congressional Subcommittee on Energy and Power has recently voted that human activity does not cause climate change. The GOP majority was evidently unmoved by the scientific consensus to the contrary, so they simply voted to overturn it.

Reminds me of Indiana’s action (in 1897) to repeal the value of pi.

"Section 1. Be it enacted by the General Assembly of the State of
     Indiana: It has been found that a circular area is to the square on
     a line equal to the quadrant of the circumference, as the area of an
     equilateral rectangle is to the square on one side. The diameter
     employed as the linear unit according to the present rule in
     computing the circle's area is entirely wrong, as it represents the
     circles area one and one-fifths times the area of a square whose
     perimeter is equal to the circumference of the circle. This is
     because one-fifth of the diameter fils to be represented four times
     in the circle's circumference. For example: if we multiply the
     perimeter of a square by one-fourth of any line one-fifth greater
     than one side, we can, in like manner make the square's area to
     appear one fifth greater than the fact, as is done by taking the
     diameter for the linear unit instead of the quadrant of the circle's
     circumference.

I don't know whether to laugh or cry......
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I Don’t Like This Law So It Must Be Unconstitutional

Yesterday, I spoke to a high school government class, filled with bright high school seniors who have thus far escaped any meaningful encounter with the U.S. Constitution.It came as a surprise to most of them, for example, that the Bill of Rights applies only against government. So we talked a good deal about the limits on government action, and what our government can and cannot require of us.

One of the students asked about the constitutionality of the individual mandate provision of the new health-care reform law.

Now, I’m not a fan of the new law; I would have much preferred a simple “Medicare for All” approach.  But there are a lot of laws I dislike, and a lot that I believe represent poor policy choices. That doesn’t make those laws unconstitutional.

There is absolutely no doubt that government could constitutionally establish “socialized” medicine–whether along the lines of Medicare for All, or another single-payer system funded out of tax revenues. The Affordable Care Act works with private insurance companies–and politically, that’s undoubtedly the only way it could be passed. But in order for the new system to work, everyone must purchase insurance. Opponents claim the government cannot force people to do so.

The bill offers subsidies to people who cannot afford insurance. It exempts people for whom the purchase of insurance would be a financial hardship. It grants other exemptions for American Indians, for those with religious objections, undocumented immigrants, incarcerated individuals, and those living below the poverty level. The rest of us must buy.

Two separate constitutional provisions allow the government to require this: the taxing power and the commerce clause.

The taxing power argument is straightforward: we either buy insurance or we pay a tax. The Commerce Clause gives Congress considerable latitude to craft “rational” means to achieve “legitimate” purposes. Opponents argue that a decision not to buy insurance is “inactivity” and that “inactivity” cannot be taxed or regulated. But as constitutional scholars have pointed out, those who choose to go without insurance–insurance that the government is making affordable for them, even subsidizing for them–are in fact doing something. They are shifting costs to everyone else. As Yale Law Professor Jack Balkin has written, they are making a decision to self-insure. That decision “games” the system and makes it more expensive for everyone else.

The individual mandate is not functionally different from our obligation to pay Social Security and Medicare taxes, or the requirement to carry auto insurance.

At the end of the day, the argument against the mandate–and the Affordable Care Act–is simple, if uninformed: I don’t like this law, therefore it is unconstitutional.

Boys Will Be Homophobic Boys

This session of the Indiana General Assembly considered–and defeated–an anti-bullying bill offered by State Senator Tom Wyss.  The bill was similar to measures being considered in other states, and all of them have been offered in response to several high-profile cases where teenagers have committed suicide after relentless bullying by their classmates or peers.

You’d think such a bill would pass easily. Who, after all, is in favor of bullying? But in Indiana, the proposal was opposed by the Christian Right because–wait for it–it might protect gay youngsters. Obviously, a bill to prevent young men or women from picking on other youngsters perceived to be gay would violate the rights of those who don’t like gays.

If you think I am making this up, permit me to reproduce a paragraph from a recent issue of the Indiana Family Association’s weekly email.

“AFA of Indiana opposes the act of bullying of all students, regardless of the motives of the bully or the perceived status of the victim. However, many bullying bills and programs have become a Trojan Horse for the homosexual demands groups. There is a danger here in unfairly casting students with traditional values as bullies, silencing legitimate views, or creating specially protected classes of children as opposed to focusing on actual acts of bullying. There is an outstanding web site on this issue that parents, teachers and policy makers should investigate. True Tolerance has information about the problem of bullying as well as the concerns surrounding many of the school programs and the ulterior objectives of some homosexual activists pushing this agenda.”

In other words, AFA is against bullying. However, when the target of that behavior is gay, they are concerned about the “real motives” involved. Protecting gay children from abuse is just part of the “homosexual agenda,” intended to stigmatize those who express their disapproval of homosexuality with enthusiasm.

Reminds me of a case that the Indiana ACLU handled when I was Executive Director. A twelve-year-old in a southern Indiana middle school was being routinely beaten up on the playground, and despite frequent complaints from the parents, the school administration’s response was “boys will be boys.” The principal actually told the ACLU lawyer handling the case that the victim of the abuse brought it on himself, by “acting different.”

Bullying gay kids is just the expression of the bullies’ 1st Amendment rights. And the AFA is so solicitious of  our constitutional liberties.

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No Knowledge Required

I was driving to the gym this morning behind an obnoxiously huge SUV sporting a bumper sticker that said “Greg Ballard. Leadership in Action.”

Now, I realize there’s a campaign underway, and that political operatives produce these slogans. I’ve run for office, so I also know that candidates are very tempted to believe their own hype. But all I could think of after reading that bumper sticker was how carelessly we throw words around and how little we value knowledge and expertise.

My personal evaluation of Greg Ballard’s term in office is that he has been anything but a leader, at least as I would define that term. But what’s worse, he has exemplified the widespread belief that you really don’t have to know anything in order to be a public official–a Mayor or Governor or Senator. (Sarah Palin considers it an absolute virtue to be clueless–she ran for Vice President sneering at “elitists” who went to “fancy schools” and I don’t remember anyone calling her out on that particular charge.)

I teach public administration, so I’m pretty touchy about the notion that anyone who’s run a business or led a marine division can run a city. We don’t choose doctors who didn’t bother with medical school, or lawyers who failed the bar exam. We don’t let people drive until they can demonstrate they know how to operate a vehicle. But we make it a political virtue not to understand the differences between public and private finance, be familiar with the tools needed for economic development, or aware of best and worst practices in areas like zoning and transit and public safety.

Greg Ballard is what happens when we elect someone Mayor just because he seems like a pleasant fellow, and showed “leadership” by being a Marine.

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