The Big Con

My husband and I were discussing the Council’s current standoff with the Ballard Administration–a dispute triggered by Ballard’s refusal to share budget information with the Council and other elected officials. That conversation brought back memories from our days in the Hudnut Administration; the then-Controller, Fred Armstrong, made himself available to Councilors, Department heads, the media….pretty much anyone who was interested in the intricacies of the budget. Fred would go on and on, explaining the numbers, funds, sources…

I don’t think anyone understood a word he said. I know I didn’t. It was the classic “bury them in bullshit,” and he was great at it. (He was also an incredibly competent public servant.)

Fred knew that most people don’t understand public finance. Our widespread fiscal ignorance is why Paul Ryan has been taken seriously, despite a budget that David Stockman, among others, has described as a “fantasy” and “devoid of credible math.” (Stockman, for those of you too young to remember, was Ronald Reagan’s very conservative Budget Director.)

Today’s candidates are counting on our ignorance of the most basic axioms of taxation and government revenue. It isn’t just that–as a colleague of mine put it recently–half of them clearly don’t know the difference between a marginal and effective tax rate. It’s that they engage in wishful, magical thinking.

Yesterday, I saw an ad for Mike Pence in which he promised to cut taxes “across the board,” and to establish an office of regulatory affairs that would resist federal regulations and return federal dollars.

I can’t decide if Pence is really that stupid, or he just thinks voters are.

There are legitimate issues around regulation–what is enough, what is too much. Reasonable people can differ over their assessments of particular rules. There is a pretty broad consensus that banking regulations were too lax, and that lack of oversight led to the Great Recession; there are certainly other areas where ham-handed regulatory policies have been distinctly unhelpful. But taking a position that all regulation is bad and must be resisted is insane. What about nursing home regulations that protect grandma from abuse? What about food and drug regulations that keep dog feces out of your beanie-weenies, or water purity standards, or building codes, or….Well, you get the point.

And how about that “cutting taxes across the board” and “sending the money back to the feds” promise?

Just how does our “I wanna be your governor” Pence propose to fund anything Indiana needs? Federal dollars pay for our roads, augment our (increasingly inadequate) police forces, and provide medical care for the indigent. They feed schoolchildren and support special education programs. Federal dollars fund small businesses (yes, it turns out that even the angry guy in the anti-Obama commercial who insists that he and his sons built their business all by themselves had an 800,000 SBA loan). The federal government funds 33% of Indiana’s budget; if we sent that money back and cut taxes, Indiana’s government would come to a screeching halt.

The Ryans and the Pences of this world are counting on our ignorance. They are con men, hustlers secure in their (unfortunately reasonable) belief that voters don’t know where their tax dollars go, don’t recognize when they themselves benefit from government programs, and have no idea how their government works or what it does.

Con artists are successful because they tell us what we want to hear, because they promise us we can have something for nothing. The ugly truth is that the people who fall for the con are the people who want to believe they can get something for nothing.

Pence and Ryan are as reputable as that Nigerian banker who will send you a million dollars if you can just front him a few thousand.

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The Drug Culture

Since Mitt Romney’s visit to Israel, there has been a renewed focus by the chattering classes on the role of “culture” in creating social norms. (Romney attributed the fact that Israel’s economy is more robust than that of the Palestinians to a superior “culture.” It caused quite a stir.)

Culture certainly plays a significant role in all societies, albeit not in the linear and highly simplified fashion Romney implied.  Often, being immersed in the culture as we are, we miss the connections.

I thought about the unappreciated ways in which we reinforce cultural cues yesterday morning, while I was dutifully doing my time on the treadmill. The television was in real-time (no TIVO at the gym!) and one commercial after another implored me to talk to my doctor about [insert name of drug here]. The purple pill, the pill for COPD and the cure for a raft of other initials and acronyms for ailments I don’t have.

There are a lot of appropriate reactions to the onslaught of medical ads with which we are all inundated daily. One of my pet peeves is the amount of money being spent by pharmaceutical companies at the same time they defend charging big bucks for medicines by citing research and development costs. The last numbers I saw suggested that the 5+ billion dollars annually being spent on advertising to consumers actually exceeds those R and D outlays.

But yesterday, it suddenly hit me that the message being conveyed–intentionally or not–isn’t the relatively innocuous (if expensive) “buy my aspirin” but “have a problem? Take a pill.” Thinning hair, low “T”, anxiety, trouble sleeping, gas….you name it, there’s a pill for it. An easy fix for whatever ails you.

These messages overwhelm the other ads, the ones imploring parents to talk to their children about the evils of drugs. How believable are those solemn discussions, when teenagers see their parents and grandparents being medicated and over-medicated? How are they supposed to respect the (highly artificial) line between the “good” pills (legal) and the “bad” drugs (illegal). I did a fair amount of research on drug policy a few years ago, and was astonished to discover that nowhere in the convoluted labyrinth that is drug prohibition is there a definition of what constitutes “abuse,” or an objective distinction between use and abuse, or a bright line between narcotics that are illegal and those that are routinely prescribed.

Here is an experiment anyone can do: turn on your television for an hour, and count the number of commercials for drugs. Watch how those ads portray people before and after they take the product being peddled.

In Huxley’s Brave New World, people were constantly being urged to stop worrying and take a drug called soma. ““You do look glum! What you need is a gramme of soma.” Soma was described as having “All the advantages of Christianity and alcohol; none of their defects.” 

Sounds eerily familiar…..

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A Single Issue to Vote On

Hot enough for you this summer? Because it’s going to get hotter, and I’m not referring to our increasingly debased electoral rhetoric.

As a post to Science Matters emphasizes, climate change is not a prediction. It’s here. Even scientists who were previously skeptical (and there weren’t many) are now convinced that the earth is warming even more rapidly than previously expected, and that human activity is a large generator of that warming.

Let’s ignore every other issue dividing Americans–what to do about the economy, about Syria and Iran, about the various “wars”–on women, on the GLBT community, on drugs…you name it. In a very real sense, arguments over those issues are equivalent to arguments about how to arrange the deck chairs on the Titanic. If there is one issue of global life-and-death importance, it’s climate change.

And on that issue, the parties could not be further apart.

The science–and the scientific consensus–is overwhelming; we face a truly unprecedented global threat. The Democrats haven’t exactly covered themselves with glory, but they have acknowledged the threat and the urgency of addressing it. Most Republicans, on the other hand, continue to deny the science and reject the reality of climate change. (I suppose that shouldn’t surprise us; they also reject evolution.)  Mitt Romney is now parroting the GOP’s standard climate change denial, and Paul Ryan, his running mate, is a climate-change-denying conspiracy theorist.

I’m not a believer in single-issue voting, but I’m not a big fan of committing slow suicide, either. If there was ever a single issue worth embracing, this is it.

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A Choice, Not an Echo….or the Base that Roared

Bowing to the demands of the purist GOP base, Mitt Romney has chosen his running mate. Paul Ryan is the final signal of his capitulation to the True Believers.

I think it was during the Goldwater campaign that Phyllis Schlafly wrote a book titled “A Choice, Not an Echo.” The idea was that the two parties have too much in common, collaborate too frequently (shades of Richard Mourdock!), and that what Americans really want is a for-real choice between starkly different platforms and philosophies.

Well, the choice of Paul Ryan means we’ll have that choice this November!

Ryan is mostly known for his budget and tax plan–a plan Roll Call says would slash Mitt Romney’s effective tax rate from 13% to 1%. (And we thought “Romney Hood” was bad…)

The New Republic describes the effects of Ryan’s budget–millions of Americans losing health insurance (Ryan’s budget would end Medicare), senior citizens falling back into pre-social security poverty, a Government “so starved for resources that, by 2050, it wouldn’t have enough money for core functions like food inspections and highway maintenance.” The richest Americans would get a huge tax cut.

The Catholic Bishops and nuns haven’t been agreeing on very much lately, but they agree that the Ryan budget is “immoral and unChristian.”

The Economic Policy Institute estimates that 1.4 million jobs would be lost if Ryan’s budget were passed. The budget proposes to eliminate Pell Grants for over a million college students; it would continue subsidies for Big Oil, but cut funding for alternative and clean energy development. (In 2011, The Daily Beast reported that Ryan’s family leases land to oil companies, and benefits from those subsidies–I’m sure that’s just a coincidence…)

Paul Ryan has called Social Security a “Ponzi Scheme,” and supported privatizing it, but he would actually increase the already-bloated Defense budget. (When several Generals testified that the reductions in Obama’s Defense Budget would not jeopardize national defense, he called them liars. He later apologized.)

If you are thinking–okay, the guy is just one of those deficit hawks, well, you don’t know the whole Paul Ryan. He may reject his Catholic faith’s teachings on social justice, but he enthusiastically embraces its anti-choice positions.

Ryan sponsored a “Fetal Personhood” bill. That bill gave fetuses full personhood rights from conception and would not only outlaw all abortion, but most popular forms of birth control. He voted to defund Planned Parenthood, and supported  a bill which would have allowed hospitals to refuse to provide a woman with an emergency abortion even if it was necessary to save her life.

Ryan has pooh-poohed the science of climate change. He voted against the Lily Ledbetter Act to ensure equal pay for women.

There’s more, but this should give any voter a pretty good idea of the agenda we are being asked to endorse.

Paul Ryan is the Koch brothers’ wet dream. In a sane world, someone this radical would be unelectable.

Pray for sanity.

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A Bit Long, But Worth It

My friend P.E. MacAllister shared a fascinating history of the real Tea Party. It bears little resemblance to the cartoonish version that is too often cited and emulated. It’s a bit long, but well worth the read.

Some Notes About Tea & Tea Parties

The emergence of a new political initiative called “The Tea Party Movement” has jolted American political equilibrium, altered political races and challenged the agenda of the Republican Party. “Tea party” resonates with most Americans who think “Boston… Patriots… British oppression”.  But few of us can get specific on “why Boston”, what was achieved; what impact it had on American history.  The full story reveals an amazingly convoluted train of events, bungling by a meddlesome government; colonial truculence and mutual mishandling of events that wreaked havoc Colonial America.  An observation from this bias observer will suggest that governments which do not know how to finesse explosive situations often cause irreparable-damage when they opt to take action.

Common place in the 17th century America and critical to our story was a popular familiar commodity called tea.  Its origin as reported in a Chinese legend goes back to 2737 B.C. and its discoverer is the emperor himself, one Shen Dung (who I never heard of either).  Very quickly his new delicacy quickly spread outward endlessly and finally got to Europe, maybe via Marco Polo (1300AD).

When the age of discovery dawned (15th and 16th centuries), a ceaseless flow of ships plowing unknown waters, linked large parts of the remote world into a new galaxy of commerce.  Access to the orient proved profitable;  The commodities imported were generally light in weight but high in value i.e. pepper, cloves, cinnamon, nutmeg, ointments, incense, precious stones, silks and ultimately tea in abundance (coffee came later).  Great Britain ultimately assessed the nature of the new opportunity and following the track of Magellan and Drake, sailed eastward in search of new opportunities and new profit (from which were derived new taxes).  With respect to tea however, China presented a problem.  It was a monopoly they guarded with some diligence.  So when the Britts found adequate supply unlikely, they secured Chinese tea seeds or cuttings and created new plantations in Ceylon and India.  I mean big time.  In twenty years they were in business with a burgeoning supply to satisfy a growing market. To encourage and assure expansion, the British Parliament gave the East India Company an exclusive monopoly on the tea business in 1698.

At which point we have segued from the Far East to Britain and then extended to the new west i.e.; North America.  Where Britain had claimed ownership of the land and allocated portions of it over the years to 13 separate quasi self- governing entities. Among the most noteworthy of these was Massachusetts:  successful commercially; a vibrant intellectual center, sensible government; and a superb port in Boston.  Its large fleet of merchant men nurtured a growing economy and the colony retained strong ties with Britain.  Tea was a common commodity with respect to both merchandise as well as diet, and Boston consumed more per capita than any other city in North America.

Complicating the marketing was a strange provision that prohibited the East India Company from selling tea directly to the colonies, combined with an even goofier condition; Americans had to purchase all their tea from Britain.  This required British middlemen who in turn sold to American importers who then sold to retailers.  Note 18th century bureaucracy:  the three stages, each with a fee.  To recompense the government for their exclusive monopoly, the East India Company paid a whopping 25% ad valorem tax on all tea imported into Britain.  The government then also levied a sales tax on tea.  The market, functioning freely, senses the disadvantage here and shops with Dutch traders or black marketers who have no ad valorem thus a cheaper product.  In 1760, the crown was losing 400,000 pounds sterling a year to the smugglers. (In today’s dollar value, that is just over $41,000,000).  Let’s say it is enough to get ones attention.  To wiggle their way out of this snarl in 1767, Parliament passed the Indemnity Act which refunded the 25% they were collecting on tea but then faced a short fall of revenue.  To recover it, they passed the Townshend Revenue Act.  These levied taxes on glass, lead, paper, paint…. and tea.  Note all these are imports; none are produced in Boston.  More significant and more odious is the fact that Parliament assumed the right to tax the colonies.  Since they were not represented in the Parliament they could not be taxed: (Bill of Rights, 1689).  So the responses to the Townshend tax were protests and boycotts.  People stopped drinking British tea and sought out smugglers or Dutch merchants.  Again groping for a response, (This is getting like tick-tack-toe) Britain finally abolished all taxes except the one on tea (three pence a pound) and America relented by sipping English tea.

But, hold on a minute.  The Indemnity Act, refunding the 25% tax, had a time clause in it, ending automatically in 1772, so the ad valorem tax popped back in place though modified to10% it nudged up the prices enough so buyers again looked to the Dutch or the black market. British tea sales plummeted, while back at the ranch, it piled up, filling London’s warehouses.  One of Europe’s largest commercial enterprises was on the verge of bankruptcy, thanks to government policy.  The Tea Act of 1772 removed the ad valorem tax and also allowed The East India to sell direct to America, eliminating the middleman.  Instead it appointed its own agents or consignees to process tea and collected the 3 penny per pound tax.  Wiser heads asked why Lord North continued the tariff and insisted on antagonizing the colonials when abolishing it would have resolved the problem.  Two reasons.  It affirmed the right of Parliament to tax the colonies; secondly it provided revenue to pay its agents.  The slogan “Taxation without representation is tyranny” appeared as bumper stickers and tea shirts; “Occupy Parliament” rallies occurred and the truculence of the crown was trumpeted by Boston rabble rousers (think Fox news).  Enmity toward Great Britain took on a truly ugly look.

In September and October 1773, seven ships carrying 2,000 chests or 600,000 pounds of Bohea tea (That’s about 120,000,000 cups.) were sent to the colonies, four of them headed for Boston with a retail price of 2 shillings per pound, making it cheaper than Dutch or smuggled tea, but still included the now odious 3 penny tax.  Aware of the shipment while it was en route the malcontents began planning an organized reaction or reception committee.  These were Whigs, some calling themselves “Sons of Liberty”, and may have included both smugglers and legitimate tea merchants now bypassed by the East India Company.  Pennsylvania, Virginia and South Carolina had already convinced the local consignees (wholesalers) of the tea to resign their offices and each sent its ships back to England.  But not Boston.  The Dartmouth, Beaver and Eleanor arrived in Boston Harbor because Governor Hutchinson insisted on the ships landing.  Two of his sons coincidently were consignees of the shipment; beyond that, he wanted to collect the docking fees. A ship had 20 days to unload and pay the duty.  After 19 days of wrangling … with nothing unloaded, the Sons of Liberty decided to break the stalemate.  On the night of December 16, 80 or 90 men, dressed like Mohawk Indians, feathered, painted and in buckskins, boarded the three ships and proceeded in the next three hours to throw 342 cases of tea into the Boston Harbor.  (We are talking 6-7 million dollars of private property.  It was enough tea to supply the entire city of Boston for a year.)  All returned ashore, washed off the paint and joined big bonfire parties adjoining the harbor, none were unidentified, no one was imprisoned.  The crowds of on lookers were jubilant.

Was the Tea Party a bold, brave move or an irrelevant “Quixotic Gesture”?  “Why the raid? Why destroy the tea?”  The answer “Taxation.”  So the issue was taxes. Except the crown did not own the tea.  It was the product of merchants who had been supplying same to Boston for years.  It was their balance sheet that took the rap.  Fact is they “Party” did nothing whatsoever to retaliate against Parliament.  Then beyond that, why drag poor John Malcolm into their Walpurgis Night.  John had no more to do with the taxes than you or I have to do with tomorrow’s temperature.

He was one of the agents of the Crown, hired to process tea and collect the taxes.  After completing a day’s work was resting quietly at home the night of all the hoopla when without warning, six or eight thugs broke into his home; hauled him downtown to the big campfire and, with great glee, both tarred and feathered him.  Hot tar blisters the flesh and a month later one is still trying to get the darn stuff out of his eyes, ears and nose, as well as the rest of his body.  To the Mohawks this was great fun and tells more about Boston Patriotism than we wanted to know.  Having a bunch of goons torture and humiliate another human being who had done nothing personally to justify the abuse is hardly a commendable, much less “Patriotic”, gesture.  Then one wonders about the random destruction of private property which is the inviolate right of free peoples.

The English authorities were rightly indignant at this random vandalism and demanded payment for the tea.  No way.  So Parliament passed the Intolerable Acts which closed down the Boston Harbor to all incoming or out going vessels.  Next, and most significant, the symbol of representative government was removed with political control taken from the governor and given to General Gage, a military commander who now called the shots.  To enforce the edict and the blockage, he needed more troops so we count an accelerated roll call of Redcoats from now on.  And to make matters worse before long there is no tea to drink.  In Britain, where America had its fair share of sympathizers and supporters, the violence in the harbor quickly changed attitudes and support for America and Boston – dropped appreciably.

As Gates increased his military force to deal with this sulky and truculent city, the response was to drill local city militias, acquire arms and begin storing gunpowder and shot.  It was this set of circumstances in April of 1775 that moved the British to march out of Boston and seize the stores of ammunition at Lexington and Concorde resulting in “the shot heard round the world”, the opening salvo of the Revolutionary war.  The Boston Tea Party (never call that til 1834, by the way) was a direct precursor to the American Revolutionary War and thus more than a passing incident.

Viewing these events of 220-239 years ago, he who leaps readily to conclusions comes up with these for starters:

  1. Governments are better served doing nothing… when they have no solutions in mind…  Except taking action in order to mollify the public. The current phrase would be:  “Don’t do something, just stand there.”
  2. Failing to really understand the nature of a public’s discontent makes it impossible to find solutions.  If we can’t define what is wrong how can we produce a remedy?  If we think the Tea Tax is a monetary problem rather than one of principle, we aren’t going to find accord.
  3. Conditions imposed arbitrarily are less effective than condition reached thru “buy in” by both sides.
  4. Using short term measures to manage problems is building short term success… we ought to start with “where do we want to be” and then taking deliberate steps to get there.

Would the Revolution have occurred without the Tea Party?  The answer is “Yes”.  Would the Revolution have occurred if parliament had granted us seats in the House of Commons or even treated us as peers in the fraternity of western nations instead of country bumpkins?  The odds now drop to fifty/fifty.  To understand an opposing disagreement on given issues is not necessarily to agree with it.  The “Loyal Opposition” is integral to British political structure and the process of debate between two sides tends to make for better legislation than arbitrary dictates.  But failing to grant an opposing position, is to close the door not only on the argument but on the democratic process which relies on wide interchange which is critical to sounder management.  If we thus have no role in this game, we are going to create a system wherein our rights of opinion and expression are respected.  In our story, the intractable posture of British politicians, ironically, worked to our advantage.  It was their unwise and unjust policies that provoked us to going where we did not want to go and that was to collecting arms and training militias in Lexington and Concord and creating the United States of America.

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