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“Is Rubio Really Hillary’s ‘Nightmare’?”: If This Is Her Nightmare, Hillary Is Getting A Good Night’s Sleep

Well, 14 more Republicans announced their candidacies, but clearly, Marco Rubio was the It Boy on the Republican side this week. It started last weekend with a Times article advancing the idea that Rubio as the GOP nominee is a “scary thought” for Democrats for all the reasons you can reckon on your own—he’s Latino, he’s young, he’s charismatic, he has a “million-dollar smile” (not kidding!), and of course he might be able to defeat her in “vital” Florida with its 29 electoral votes.

Mmmm, okay. He is most certainly Latino and young, not much arguing with those. He is reasonably charismatic. He has about a $627,000 smile, which isn’t a million (a little too on the boyish and elfin sides to project the proper Reaganesque, enemy-smiting mien) but isn’t peanuts.

I would add other and I think even more substantive claims for him. He’s not stupid, in policy terms, and more to the point isn’t intentionally stupid, constantly playing down to his most rigid base’s lowest common denominator. He does that only about 78 percent of the time, which in the context of today’s GOP is almost impressive. I could picture a President Rubio dragging the party to a couple of places where most of it really would prefer not to go. Not a lot of places, but a couple, which is two more than most of them would do.

But is Rubio really Clinton’s nightmare candidate? First of all, let’s say this. Elections are far less about the dollar value of smiles and whether a candidate colors her hair than journalists would like to think. They’re more about what the political scientists call “the fundamentals,” by which they mainly mean the economy. If the economy is still chugging along in the fall of 2016, creating 225,000 jobs a month—and by that time, if the streak holds, wages would probably be going up as well—then nobody is Clinton’s nightmare. All right, two other ifs: no terrorist attack, and no giant, quid-pro-quo Clinton scandal. If all that holds the only drama ought to be whether she tops 350 electoral votes.

But if all that doesn’t hold, then we have a race. I suppose Rubio is as plausible as any of them and more than most of them. But let’s stop and take a look at the bases of these nightmare claims. There are two.

The first is that he’ll compete with her among Latinos. The data point you’ll often see invoked here is that when first running for Senate in 2010, Rubio drew 55 percent of the Latino vote against two opponents. That he did. But here are two reasons that impressive number doesn’t necessarily translate to a presidential race.

Number one, neither of his opponents that year had much going for them among Latinos. Independent Charlie Crist wasn’t really trusted by anyone because of his party flipping, and Democrat Kendrick Meek just never fired, as they say in the horse-racing business. Number two, voters understand, Latino voters included, that a vote for senator and a vote for president aren’t the same kind of vote. For the Senate, independent and even a few Democratic Latinos would be more willing to cast an “identity” vote, just for the sake of seeing one of their own (more or less their own, since there are many different kinds of Latinos in Florida) in the Senate. The candidate’s positions matter, of course, but if voters know he’s only one of 100 in a body that never does much anyway, positions aren’t dispositive.

But a presidential vote is a different thing. There, you’d better believe positions matter. And here, Rubio has the same problems with Latino voters all the Republicans have.

Spend a few minutes on this web page, brought to you by the Seattle-based Latino Decisions. The polling I’m about to cite is from last November, so things may have changed. But still. It’s a bucket of icy water on the nightmare thesis.

Rubio favorable-unfavorable among Latinos: 31-36. Rubio favorable-unfavorable among Latinos in Florida: 39-42. In seven states with sizable Latino voting blocs, Rubio was underwater in six of them (all but Texas). Oh, and in six of the seven states (all but Florida), Clinton’s favorable numbers among Latinos were more than twice Rubio’s.

Why would this be? Are Latinos uniquely immune to the charms of high dollar-value smiles? No. The answer is his positions. Latinos support a path to citizenship, President Obama’s executive actions, and Obamacare. Rubio opposes them all. Those positions, especially on immigration, are deal breakers for a big majority of Latino voters, most of whom don’t feel an intense natural bonhomie for Cuban-Americans, who’ve always been seen to occupy a different political space from Mexicans, Puerto Ricans, Dominicans, and Central Americans.

Now as I say that was last November. Things have probably shifted a little in his direction since then, just because some people may have forgotten his lame immigration reversal. I called four pollsters to try to get current numbers on Clinton vs. Rubio head-to-head among Latinos, but oddly, none had anything current based on large enough sample sizes. If we start to see such numbers and Rubio is with 15 points or so, then Clinton should worry a little. But the overall numbers, in which she has essentially the same narrow-ish lead over Rubio that she has over everyone else, don’t suggest that he’s doing much better among the small subsets of Latinos in these polls than any other Republican is.

And now, to our second point (remember, there was a second point way up there!): “vital” Florida. I really wish people who write about politics would bother to understand the electoral map. This is a longer conversation and another column but please remember: Florida is vital to Republicans, but it’s gravy for Democrats. Obama won Florida in 2012, but if he’d lost it, he’d still have received 303 electoral votes.

Think of it this way: The Republican can win all the normal red states plus the violet quartet of Ohio, Virginia, Colorado, and Nevada, as well as Iowa and New Hampshire—two states that have gone Republican just once each since 1992—and still have only 262 electoral votes. The Democrat can afford to lose Florida and still have a number of paths to 270. The Republican cannot.

Rubio has some strengths the others don’t. But if all this adds up to a nightmare, I’d think Clinton is sleeping pretty well at night.

 

By: Michael Tomasky, The Daily Beast, May 29, 2015

May 30, 2015 Posted by | Election 2016, Hillary Clinton, Marco Rubio | , , , , , , | Leave a comment

“Whatever Happened To Antitrust?”: Ambushed By The Giant Companies It Was Designed To Contain

Last week’s settlement between the Justice Department and five giant banks reveals the appalling weakness of modern antitrust.

The banks had engaged in the biggest price-fixing conspiracy in modern history. Their self-described “cartel” used an exclusive electronic chat room and coded language to manipulate the $5.3 trillion-a-day currency exchange market. It was a “brazen display of collusion” that went on for years, said Attorney General Loretta Lynch.

But there will be no trial, no executive will go to jail, the banks can continue to gamble in the same currency markets, and the fines – although large – are a fraction of the banks’ potential gains and will be treated by the banks as costs of doing business.

America used to have antitrust laws that permanently stopped corporations from monopolizing markets, and often broke up the biggest culprits.

No longer. Now, giant corporations are taking over the economy – and they’re busily weakening antitrust enforcement.

The result has been higher prices for the many, and higher profits for the few. It’s a hidden upward redistribution from the majority of Americans to corporate executives and wealthy shareholders.

Wall Street’s five largest banks now account for 44 percent of America’s banking assets – up from about 25 percent before the crash of 2008 and 10 percent in 1990. That means higher fees and interest rates on loans, as well as a greater risk of another “too-big-to-fail” bailout.

But politicians don’t dare bust them up because Wall Street pays part of their campaign expenses.

Similar upward distributions are occurring elsewhere in the economy.

Americans spends far more on medications per person than do citizens in any other developed country, even though the typical American takes fewer prescription drugs. A big reason is the power of pharmaceutical companies to keep their patents going way beyond the twenty years they’re supposed to run.

Drug companies pay the makers of generic drugs to delay cheaper versions. Such “pay-for-delay” agreements are illegal in other advanced economies, but antitrust enforcement hasn’t laid a finger on them in America. They cost you and me an estimated $3.5 billion a year.

Or consider health insurance. Decades ago health insurers wangled from Congress an exemption to the antitrust laws that allowed them to fix prices, allocate markets, and collude over the terms of coverage, on the assumption they’d be regulated by state insurance commissioners.

But America’s giant insurers outgrew state regulation. Consolidating into a few large national firms and operating across many different states, they’ve gained considerable economic and political power.

Why does the United States have the highest broadband prices among advanced nations and the slowest speeds?

Because more than 80 percent of Americans have no choice but to rely on their local cable company for high capacity wired data connections to the Internet – usually Comcast, AT&T, Verizon, or Time-Warner. And these corporations are among the most politically potent in America (although, thankfully, not powerful enough to grease the merger of Comcast with Time-Warner).

Have you wondered why your airline ticket prices have remained so high even though the cost of jet fuel has plummeted 40 percent?

Because U.S. airlines have consolidated into a handful of giant carriers that divide up routes and collude on fares. In 2005 the U.S. had nine major airlines. Now we have just four. And all are politically well-connected.

Why does food cost so much? Because the four largest food companies control 82 percent of beef packing, 85 percent of soybean processing, 63 percent of pork packing, and 53 percent of chicken processing.

Monsanto alone owns the key genetic traits to more than 90 percent of the soybeans planted by farmers in the United States, and 80 percent of the corn.

Big Agribusiness wants to keep it this way.

Google’s search engine is so dominant “google” has become a verb. Three years ago the staff of the Federal Trade Commission recommended suing Google for “conduct [that] has resulted – and will result – in real harm to consumers and to innovation.”

The commissioners decided against the lawsuit, perhaps because Google is also the biggest lobbyist in Washington.

The list goes on, industry after industry, across the economy.

Antitrust has been ambushed by the giant companies it was designed to contain.

Congress has squeezed the budgets of the antitrust division of the Justice Department and the bureau of competition of the Federal Trade Commission. Politically-powerful interests have squelched major investigations and lawsuits. Right-wing judges have stopped or shrunk the few cases that get through.

We’re now in a new gilded age of wealth and power similar to the first gilded age when the nation’s antitrust laws were enacted. But unlike then, today’s biggest corporations have enough political clout to neuter antitrust.

Conservatives rhapsodize about the “free market” and condemn government intrusion. Yet the market is rigged. And unless government unrigs it through bold antitrust action to restore competition, the upward distributions hidden inside the “free market” will become even larger.

 

By: Robert Reich, The Robert Reich Blog, May 24, 2015

May 26, 2015 Posted by | Antitrust, Big Banks, Corporations | , , , , , , , | Leave a comment

“What The Godfather Of Reaganomics Gets Wrong”: Wink, Wink, Nudge, Nudge; More Distorted Reagan Nostalgia

Chris Christie just announced a big tax-cut plan. Well, of course he did. Offering such proposals is de rigueur for Republican presidential candidates. And it pretty much has been since the Reagan presidency.

No surprise, then, that Arthur Laffer, intellectual godfather of the Reagan tax cuts, remains in high demand on the right. Many GOP 2016ers — including Jeb Bush, Scott Walker, and Ted Cruz — have been publicly consulting with the supply-side economist who continues to joyfully preach the wonder-working power of cutting top marginal tax rates.

But Laffer is, shall we say, less than enthusiastic about my recent column here at The Week, in which I argued that some presidential wannabes were misinterpreting and misapplying the lessons of Reaganomics. As I wrote a few weeks back:

Republicans sometimes misuse Reaganomics to justify fantastical tax plans that promise deep rate cuts for the rich — both Cruz and Paul favor low-rate flat taxes — that will pay for themselves and boost the middle class through explosive economic growth. … Republican policymakers and voters have little reason — either from historical experience or empirical studies — to assume tax reform will generate a prolonged period of 4-5 percent GDP growth such that concerns about budget deficits and income distribution are irrelevant. [The Week]

In other words, a flat tax won’t supercharge growth enough to prevent us from losing big bucks. This is a rather modest claim and critique, one perfectly compatible with the idea that the Reagan tax cuts were still good policy. Reaganomics was a home run — just not an impossible five-run dinger.

My comments are also compatible with the consensus among economists on the left and right. Yet Laffer felt compelled to respond to my article with a three-chart, five-page, 2,000-word rebuttal.

Laffer is one of the most important public policy entrepreneurs of the 20th century, right up there with John Maynard Keynes and Milton Friedman. His official bio asserts his work was responsible for “triggering a world-wide tax-cutting movement in the 1980s” — and that is no vain boast. His famous Laffer Curve — an illustration of the trade-off between tax rates and tax revenue derived from the ideas of philosopher Ibn Khaldun — is indeed one of “the main theoretical constructs of supply-side economics.”

So it is disappointing that Laffer, in responding to me, offers such an odd, airy, and ultimately unnecessary defense of his life’s work. For instance: While Laffer doesn’t explicitly say the Reagan tax cuts paid for themselves, he doesn’t say they lost revenue, either. Yet he spends hundreds of words countering my claim that they didn’t pay for themselves. What Laffer basically argues is that since (a) income tax revenue rose during the 1980s, (b) the rich paid a higher share of GDP in income taxes, and (c) there were more employed people as a share of the entire adult population, then that must mean the tax cuts paid for themselves. Except he doesn’t actually say that. “Well, I hope you get the idea” is how he puts it. Wink, wink, nudge, nudge.

Put aside for a moment that Laffer mostly avoids my evidence, such as a Treasury Department study concluding the Reagan tax cuts lost $200 billion a year and one by former Bush II economists that found income tax cuts only recoup a sixth of the revenue they lose through higher growth. A bigger flaw in Laffer’s argument is that he ignores everything else happening in the U.S. economy during the 1980s. Tax rates matter plenty — Laffer’s key insight — but they aren’t all that matters. Laffer ignores the big role of easier monetary policy in driving the recovery after the awful 1981-82 recession. And, yes, the employment-population ratio rose in the 1980s — as it did in the 1970s. Did the Reagan tax cuts cause the Baby Boom, too? Laffer also ignores the revenue impact of $115 billion a year in 1980s tax hikes and how the Tax Reform Act of 1986 nudged rich people to shift how they took their income to the personal income tax base from the corporate one. Laffer ignores a lot as he attempts to make a stronger-than-necessary case. The economist doth protest too much.

Laffer’s other big objection is that I downplay the growth effects of the Reagan tax cuts by cherry picking dates. Since the tax cuts did not go fully into effect until 1983, Laffer argues that’s the appropriate start date for the Reagan boom. Indeed, real GDP grew at a snappy 4.5 percent annually from 1983 through 1988. But Laffer’s timing is problematic. The recovery likely would not have been as strong if not for the 1981-82 recession itself. Sharp recoveries after downturns were the rule of the postwar era through the 1980s. And since the 1981 downturn was the deepest, a strong rebound would be expected. For example, the economy grew by 5 percent during the first two years after the awful 1973-75 recession.

Again, none of this means the Reagan tax cuts failed. It would be hard to find a reasonable economist who denied they boosted growth in the 1980s as the Fed battled inflation. The effects just were not ginormous enough to fully offset the direct revenue loss. More importantly, perhaps, Reaganomics — tax cuts, deregulation, entrepreneurial optimism — changed America’s longer-term economic direction. Economist Michael Mandel contends that “the impact of the policies Reagan set out in the 1980s, which slowly worked their way through the economy, helped lay the groundwork for the Information Revolution of the 1990s.” So, yeah, you can give Reagan a bit of thanks for your smartphone.

This is the data-driven, evidence-based analysis Laffer and other old-school Reaganauts should be making to today’s GOP and center-right movement. The real Reaganomics. With fantasy tax plans again abounding on the right, the presidential race could use a reality check more than more distorted Reagan nostalgia.

 

By: James Pethokoukis, The Week, May 13, 2015

May 14, 2015 Posted by | GOP Presidential Candidates, Reaganomics, Supply Side Economics | , , , , , , , | 1 Comment

“Race, Class And Neglect”: Baltimore, And America, Don’t Have To Be As Unjust As They Are

Every time you’re tempted to say that America is moving forward on race — that prejudice is no longer as important as it used to be — along comes an atrocity to puncture your complacency. Almost everyone realizes, I hope, that the Freddie Gray affair wasn’t an isolated incident, that it’s unique only to the extent that for once there seems to be a real possibility that justice may be done.

And the riots in Baltimore, destructive as they are, have served at least one useful purpose: drawing attention to the grotesque inequalities that poison the lives of too many Americans.

Yet I do worry that the centrality of race and racism to this particular story may convey the false impression that debilitating poverty and alienation from society are uniquely black experiences. In fact, much though by no means all of the horror one sees in Baltimore and many other places is really about class, about the devastating effects of extreme and rising inequality.

Take, for example, issues of health and mortality. Many people have pointed out that there are a number of black neighborhoods in Baltimore where life expectancy compares unfavorably with impoverished Third World nations. But what’s really striking on a national basis is the way class disparities in death rates have been soaring even among whites.

Most notably, mortality among white women has increased sharply since the 1990s, with the rise surely concentrated among the poor and poorly educated; life expectancy among less educated whites has been falling at rates reminiscent of the collapse of life expectancy in post-Communist Russia.

And yes, these excess deaths are the result of inequality and lack of opportunity, even in those cases where their direct cause lies in self-destructive behavior. Overuse of prescription drugs, smoking, and obesity account for a lot of early deaths, but there’s a reason such behaviors are so widespread, and that reason has to do with an economy that leaves tens of millions behind.

It has been disheartening to see some commentators still writing as if poverty were simply a matter of values, as if the poor just mysteriously make bad choices and all would be well if they adopted middle-class values. Maybe, just maybe, that was a sustainable argument four decades ago, but at this point it should be obvious that middle-class values only flourish in an economy that offers middle-class jobs.

The great sociologist William Julius Wilson argued long ago that widely-decried social changes among blacks, like the decline of traditional families, were actually caused by the disappearance of well-paying jobs in inner cities. His argument contained an implicit prediction: if other racial groups were to face a similar loss of job opportunity, their behavior would change in similar ways.

And so it has proved. Lagging wages — actually declining in real terms for half of working men — and work instability have been followed by sharp declines in marriage, rising births out of wedlock, and more.

As Isabel Sawhill of the Brookings Institution writes: “Blacks have faced, and will continue to face, unique challenges. But when we look for the reasons why less skilled blacks are failing to marry and join the middle class, it is largely for the same reasons that marriage and a middle-class lifestyle is eluding a growing number of whites as well.”

So it is, as I said, disheartening still to see commentators suggesting that the poor are causing their own poverty, and could easily escape if only they acted like members of the upper middle class.

And it’s also disheartening to see commentators still purveying another debunked myth, that we’ve spent vast sums fighting poverty to no avail (because of values, you see.)

In reality, federal spending on means-tested programs other than Medicaid has fluctuated between 1 and 2 percent of G.D.P. for decades, going up in recessions and down in recoveries. That’s not a lot of money — it’s far less than other advanced countries spend — and not all of it goes to families below the poverty line.

Despite this, measures that correct well-known flaws in the statistics show that we have made some real progress against poverty. And we would make a lot more progress if we were even a fraction as generous toward the needy as we imagine ourselves to be.

The point is that there is no excuse for fatalism as we contemplate the evils of poverty in America. Shrugging your shoulders as you attribute it all to values is an act of malign neglect. The poor don’t need lectures on morality, they need more resources — which we can afford to provide — and better economic opportunities, which we can also afford to provide through everything from training and subsidies to higher minimum wages. Baltimore, and America, don’t have to be as unjust as they are.

 

By: Paul Krugman, Op-Ed Columnist, The New York Times, May 4, 2015

May 5, 2015 Posted by | Baltimore, Economic Inequality, Poverty | , , , , , , , , , | Leave a comment

“Zombies Of 2016″: As Far As Issues Go, 2016 Is Already Set Up To Be The Election Of The Living Dead

Last week, a zombie went to New Hampshire and staked its claim to the Republican presidential nomination. Well, O.K., it was actually Gov. Chris Christie of New Jersey. But it’s pretty much the same thing.

You see, Mr. Christie gave a speech in which he tried to position himself as a tough-minded fiscal realist. In fact, however, his supposedly tough-minded policy idea was a classic zombie — an idea that should have died long ago in the face of evidence that undermines its basic premise, but somehow just keeps shambling along.

But let us not be too harsh on Mr. Christie. A deep attachment to long-refuted ideas seems to be required of all prominent Republicans. Whoever finally gets the nomination for 2016 will have multiple zombies as his running mates.

Start with Mr. Christie, who thought he was being smart and brave by proposing that we raise the age of eligibility for both Social Security and Medicare to 69. Doesn’t this make sense now that Americans are living longer?

No, it doesn’t. This whole line of argument should have died in 2007, when the Social Security Administration issued a report showing that almost all the rise in life expectancy has taken place among the affluent. The bottom half of workers, who are precisely the Americans who rely on Social Security most, have seen their life expectancy at age 65 rise only a bit more than a year since the 1970s. Furthermore, while lawyers and politicians may consider working into their late 60s no hardship, things look somewhat different to ordinary workers, many of whom still have to perform manual labor.

And while raising the retirement age would impose a great deal of hardship, it would save remarkably little money. In fact, a 2013 report from the Congressional Budget Office found that raising the Medicare age would save almost no money at all.

But Mr. Christie — like Jeb Bush, who quickly echoed his proposal — evidently knows none of this. The zombie ideas have eaten his brain.

And there are plenty of other zombies out there. Consider, for example, the zombification of the debate over health reform.

Before the Affordable Care Act went fully into effect, conservatives made a series of dire predictions about what would happen when it did. It would actually reduce the number of Americans with health insurance; it would lead to “rate shock,” as premiums soared; it would cost the government far more than projected, and blow up the deficit; it would be a huge job-destroyer.

In reality, the act has produced a dramatic drop in the number of uninsured adults; premiums have grown much more slowly than in the years before reform; the law’s cost is coming in well below projections; and 2014, the first year of full implementation, also had the best job growth since 1999.

So how has this changed the discourse? On the right, not at all. As far as I can tell, every prominent Republican talks about Obamacare as if all the predicted disasters have, in fact, come to pass.

Finally, one of the interesting political developments of this election cycle has been the triumphant return of voodoo economics, the “supply-side” claim that tax cuts for the rich stimulate the economy so much that they pay for themselves.

In the real world, this doctrine has an unblemished record of failure. Despite confident right-wing predictions of doom, neither the Clinton tax increase of 1993 nor the Obama tax increase of 2013 killed the economy (far from it), while the “Bush boom” that followed the tax cuts of 2001 and 2003 was unimpressive even before it ended in financial crisis. Kansas, whose governor promised a “real live experiment” that would prove supply-side doctrine right, has failed even to match the growth of neighboring states.

In the world of Republican politics, however, voodoo’s grip has never been stronger. Would-be presidential candidates must audition in front of prominent supply-siders to prove their fealty to failed doctrine. Tax proposals like Marco Rubio’s would create a giant hole in the budget, then claim that this hole would be filled by a miraculous economic upsurge. Supply-side economics, it’s now clear, is the ultimate zombie: no amount of evidence or logic can kill it.

So why has the Republican Party experienced a zombie apocalypse? One reason, surely, is the fact that most Republican politicians represent states or districts that will never, ever vote for a Democrat, so the only thing they fear is a challenge from the far right. Another is the need to tell Big Money what it wants to hear: a candidate saying anything realistic about Obamacare or tax cuts won’t survive the Sheldon Adelson/Koch brothers primary.

Whatever the reasons, the result is clear. Pundits will try to pretend that we’re having a serious policy debate, but, as far as issues go, 2016 is already set up to be the election of the living dead.

 

By: Paul Krugman, Op-Ed Columnist, The New York Times, April 24, 2015

April 27, 2015 Posted by | Chris Christie, Election 2016, GOP Presidential Candidates | , , , , , , , , | Leave a comment

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