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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It’s Not Easy Being Green

I recently received an email announcing this year’s “Greening the Statehouse” event sponsored annually by the Hoosier Environmental Council.

Greening the Statehouse will be held at the IMMI Conference Center in Westfield, Indiana on November 16th. The day will be filled with informative panels, presentations, and a keynote address all focused on solutions to the climate crisis. As you may recall, GTS is a full day that also includes a light breakfast and lunch. You can learn more at www.hecweb.org/gts

In my more optimistic moments, I think Americans are finally taking environmental concerns–notably, climate change–seriously. It is past time to do so.

I’ve followed the work of organizations like the Hoosier Environmental Council, and shared the dismay of rational people as we’ve watched the current administration not only block progress, but gleefully regress.

I know I’ve written this before, but the climate calculation is simple.

What will happen if the 97% of climate scientists who warn about climate change are proven wrong (or, as conspiracy theorists would have it–plotting to fool us for some mysterious reason), and we nevertheless listen to them?

What if we proceed to clean up our air and water, improve conservation and move to cleaner energy sources–and then find out that all those scientists were wrong?

In that case, we’ll be “stuck” with a healthier, cleaner environment–air our children and grandchildren can breathe and water they can drink; cheaper and more reliable energy sources, and fewer pesticides in our foods. Bummer. True, the bottom lines of fossil fuel companies will shrink, and they might lose some of the 60 billion dollars in yearly subsidies we taxpayers provide them, but those are the breaks in a market economy.

On the other hand, what if all those climate scientists are right, and we follow what passes for policy in the Trump administration–“saving” coal, subsidizing fossil fuels, failing to clean up our waterways, rolling back air pollution standards…and issuing warnings that wind turbines cause cancer?

In that case, we’ll hasten the time the earth can no longer support human life, at least not human life and civilization as we know it.

This “risk to reward” ratio seems like a no-brainer to me, and I am cautiously optimistic that most people are getting the message. The children certainly are–and it may be the children who save us. Greta Thunberg, the remarkable Swedish teenager, minced no words at the recent climate action summit in New York, telling world leaders “You have stolen my dreams and my childhood with your empty words.” She accused them of ignoring the science behind the climate crisis, saying: ‘We are in the beginning of a mass extinction and all you can talk about is money and fairy tales of eternal economic growth – how dare you!”

Can we dare to hope that at least some of them were listening to her? Can we dare to hope that enough of us are working on voter turnout in 2020–turnout that will dislodge the corrupt and incompetent Trump Administration and install a scientifically-literate one in its place? Can we dare to hope that a majority of earth’s population has come to understand the magnitude–and imminence–of the threat?

I’m writing this in Indiana, where temperatures were in the nineties the first week of October.

If you can, go Green the Statehouse.

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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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Toleration

I’m a big fan of John Locke (of Enlightenment “Two Treatises on Government” fame). (Yes, I’m a nerd.) Although he wasn’t the only philosopher of his time to think in terms of a social contract, he was arguably the most consequential; his approach to the role of government had an enormous influence on the Founders who crafted America’s constitution. So when I came across this article about a previously unknown text of his, I was fascinated.

A “once in a generation” discovery of a centuries-old manuscript by John Locke shows the great English philosopher making his earliest arguments for religious toleration, with the scholar who unearthed it calling the document “the origin and catalyst for momentous and foundational ideas of western liberal democracy”.

Dated to 1667-8, the manuscript titled “Reasons for tolerateing Papists equally with others”, was previously unknown to academia. It had been owned by the descendants of one of Locke’s friends until the 1920s, when it was sold at auction to a book dealer. From there, it went into private collections until it was donated to St John’s College, Annapolis, in the latter half of the 20th century. It lay unstudied in archives until Locke scholar JC Walmsley noticed a reference to it in a 1928 book dealer’s catalogue, and raised an eyebrow: Locke, a hugely influential Enlightenment thinker, was not known to have extended his arguments for religious tolerance to Catholics.

Because tolerance of Catholics (or, in Catholic countries, tolerance of Protestants) was pretty much unthinkable at the time he wrote, attributing such sentiments to Locke seemed an unlikely stretch, so scholars put the newly discovered manuscript through a number of tests in order to determine whether it was, indeed, Locke’s.

It was.

“Locke is supposed to have never tolerated Catholics,” said Walmsley. “All his published work suggested that he would never even consider this as a possibility. This manuscript shows him taking an initial position that’s startling for him and for thinkers of his time – next to no one suggested this at this point. It shows him to be much more tolerant in certain respects than was ever previously supposed.”

Locke, who died in 1704, is known for his Two Treatises on Government, which which became a foundational text for modern western democracy. His other hugely influential texts included the Essay Concerning Human Understanding, which provided philosophical grounds for the scientific revolution, and A Letter Concerning Toleration, which influenced James Madison’s thinking on the separation of church and state in his work on the US constitution.

The newly-discovered document was written before A Letter Concerning Toleration, and adds to our understanding of Locke’s approach to what we now call “nondiscrimination.” As America’s religious and racial diversity explodes, the growth of “toleration”–or more properly, civic equality and inclusion–becomes an ever more critical element of a functioning polis.

Joseph Macfarland, dean of St John’s College, said it was “an unexpected pleasure to find that we are in possession of a manuscript by Locke himself on a question so critical to American political life and to liberal democracy generally”.

Calling the question critical is an understatement. We either overcome our innate tribalism and learn to live amicably together, or this experiment we call America is over.

The 2020 election provides us with a stark choice: We can re-elect Trump and validate various degrees of intolerance of anyone who isn’t a white Christian male, or we can reject the politics of hate and division and embrace “toleration.”

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