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“The Republicans’ Commie Convention Hotel”: How The Hotel Came To Exist In The First Place Should Offend Republicans

When Republicans gather in Cleveland to formally nominate Donald Trump for president in July, their headquarters will be a brand new hotel whose very existence contradicts party orthodoxy on private enterprise, less government, and lower taxes.

Were the Hilton Cleveland Downtown located in Havana, or in Moscow during the Soviet era, Republicans in a diplomatic mode would call it “state-owned.” Those favoring Trump’s aggressively plain English would call it a communist hotel.

That’s because Cuyahoga County taxpayers own the hotel—not that they had any say in the matter.

The Cuyahoga County Commissars—er, sorry, Commissioners—forced taxpayers three years ago to pay for the $276 million hotel, which is scheduled to open June 1 and connects directly to the Cleveland Convention Center, where the party will nominate its presidential standard bearer.

The taxpayers own everything in the hotel, including the signs that say “Hilton.”

How did this come to pass? The county spent years trying to attract private investors to take on this project. After none did, it forced taxpayers into underwriting it. The hotel got built through a convoluted series of transactions involving the city, the county and others so the land would be tax-exempt. The city and county will collect no property taxes, but the schools will be made whole, said Jeffrey Appelbaum, the lawyer on the project and a construction expert.

The hotel is being paid for with an increase in the county sales tax that is expected to raise $20 million per year for 20 years. In addition, the county added a 1 percent excise tax on hotel rooms. The excise tax from the Hilton will be cycled back to cover the bond payments, meaning guests will be hit for a small part of the cost.

Appelbaum said the hotel was built for much less than a private developer would have spent, which appears to be true. Still, that efficiency is hardly an argument Republicans would buy into just as they reject national single-payer health care even though it would be much cheaper than our disorganized nonsystem system of sick care, and it would remove a huge burden from small-business owners.

Republicans also wouldn’t be crazy about the origins of a lot of the hotel inventory, which run directly counter to Trump’s “Make America Great Again” slogan, under which he assumes a president possesses dictatorial powers. Trump says if elected he will order companies like Carrier, Ford, and Nabisco to build factories only in America and slap punitive tariffs on foreign-made goods, powers not granted the president under the Constitution.

The flatware and furniture offend the Trump creed. While extolling the private enterprise system after dinner, Republican delegates will put Spada brand cake forks into their desserts. The 5,400 forks, made in Indonesia, cost local taxpayers $10,314, or $1.91 each. The hotel could have bought flatware from the only American maker, Liberty Tabletop in suburban Syracuse, N.Y.

The top-floor bar, with views of Lake Erie, features sofas, bar stools, and other furniture from Astoria Imports, a Florida firm that has factories and warehouses in Mexico and Asia, as well as some domestic operations.

Trump may be more comfortable with the sourcing of the banquet napkins, table cloths, and table skirts, which cost Cleveland taxpayers $92,526.48. They came from a division of Mount Vernon Mills, which made clothing for the Confederate Army, though the company says its work for the 19th-century traitors was performed “under protest.” It also notes that the mill owner concealed this work for the Confederacy from Union General William T. Sherman, who decided against burning it to the ground after an evening of hospitality from the owners.

But it’s how the hotel came to exist in the first place that should offend Republicans. It required more government, not less. And what if the hotel does not generate enough revenue to pay the bondholders? On the surface the bonds are called revenue bonds, not general obligations of Cuyahoga County. But that’s a clever deceit. If revenue falls short the county must appropriate money to make up the difference, even if that means raising taxes, to ensure that the bondholders get fully paid.

A few years back, local boosters made a promise of “300,000 visitors and $330 million in spending” if they could just get a taxpayer-owned convention center for medical conferences and a hotel, as reported by Roldo Bartimole, an 83-year-old self-employed journalist who has offered independent and critical assessment of Cleveland area government for a half-century.

Bartimole said the whole idea was just another way to pick the pockets of taxpayers for the benefit of the local oligarchs. He also railed against a tax increase to subsidize, forever, the Cleveland Browns football team, Cavaliers basketball team, and the Indians baseball team, all owned by out-of-town billionaires.

To justify making taxpayers build a hotel a local group ordered up a study from PKF Consulting in Philadelphia. With lots of tables and charts showing that the hotel would not just succeed, it would rent out so many rooms at rising prices that over the next five years it should expect that 17 cents out of every dollar of revenue would become net profit. This being a government-owned hotel technically it’s a net surplus, but the idea remains the same.

Experience suggests this was a paid-for fantasy report. Around the country there are now at least 33 taxpayer-owned hotels. Like communism in practice, they have not done well. The one in St. Louis was an utter failure, sold off for about 32 cents on the dollar.

Other big convention hotels, both those owned outright by taxpayers and those with heavily subsidized private owners, have “a checkered past,” said Heywood T. Sanders, a University of Texas-San Antonio professor and author of the book Convention Center Follies.

He notes that the trend toward taxpayer-subsidized hotels traces back to the late 1970s with Urban Development Block Grants or UDAGs. “We say the H in UDAG is for hotel, but it’s a silent H,” Sanders joked.

From 1978 to 1989 a quarter of all UDAG money went for hotel projects, in all 60,000 rooms added at 236 hotels that were new or renovated, political scientist Richard D. Bingham wrote in his 1998 book Industrial Policy American Style.

The new trend is toward not subsidizing hotels, but having taxpayers own them. A study in December, published in the journal Cornell Hospitality Quarterly, concluded from analyzing 21 of these hotels that they are bad for private enterprise.

Proponents claim taxpayer-owned hotels will increase business and thus benefit existing hotels. But the study found that taxpayer-owned hotels “tend to erode the key performance metrics of competitive hotels in the market.”

So just remember the next time you are told that Republicans are the party of free enterprise, less government, and lower taxes that they chose as their national party convention headquarters what they would call a communist hotel built here in America.

 

By: David Cay Johnston, The Daily Beast, May 19, 2016

May 20, 2016 Posted by | Communism, GOP, Republican National Convention | , , , , , , | Leave a comment

“Sanders Is Exploiting The Trade Issue”: Mirroring The Republican Approach To Obamacare

Some people are suggesting that Bernie Sanders‘ win in Michigan was a result of his opposition to trade deals like NAFTA and TPP and that this will serve him well with white working class voters in the so-called “rust belt” states. Just prior to the debate in Flint, Michigan, Sanders tweeted this:

Both Danielle Krutzleben at NPR and Steve Chapman at the Chicago Tribune did some fact-checking on the role of trade deals in the challenges faced by cities like Detroit and Flint. Krutzleban begins with a chart showing that the migration out of Detroit started around 1950 and that since then, it has lost more than 60% of its residents. That started long before the trade deals Sanders suggested as the cause of all those abandoned buildings.

Chapman identifies several factors that are not accounted for if we simply look at things like NAFTA to blame. He points out that Michael Moore’s documentary “Roger & Me” about the shut-down of the General Motors plant in Flint came out four years before NAFTA took effect and that the challenge to the auto industry back then was coming from Japan (not China or Mexico), where they were producing more reliable and fuel-efficient cars.

The other issue that hurt Detroit was the migration of auto plants – not overseas – but to states (mostly in the South) who adopted so-called “right to work” laws that undermined unions. Another factor was automation – which reduced the number of workers required to produce cars by a third. Finally, Chapman makes this observation:

Breaking down trade barriers would actually help the American auto industry and those on the assembly lines. One major attraction of building cars in Mexico is that it has free trade agreements with 45 countries — while the U.S. has free trade deals with just 20. Exporting to most of the world is easier there than here.

Bernard Swiecki, an analyst at the Michigan-based Center for Automotive Research, told Business Alabama why Audi recently decided to put a factory in Mexico instead of the U.S.: “If they export it, they save $4,500 per vehicle in tariffs they don’t have to pay.”

These are just some of the complicating factors that affected a state like Michigan. But they are paralleled by a look at history that informs us of what drove the manufacturing boom in the United States as well as what is challenging its survival today. To sum up: it is not as simple as blaming trade deals.

What I find troubling about Sanders’ approach to all of this is not simply his avoidance of even a cursory mention of these complex issues. It is more about the fact that he is obviously tapping into the anger and despair that is felt by those who are affected (much like Donald Trump is doing) and then locating a singular culprit on which to focus their blame.

But beyond even that, the one thing many of us have spent the last seven years criticizing about Republicans is their use of anger/fear mongering to foster obstruction. What is totally lacking from Sanders is any articulation of what his own approach to trade would be. In that way, he is mirroring the Republican approach to Obamacare: suggesting that trade deals need to be repealed without offering a replacement. For those of us who think that it is important to get beyond the anger/fear and talk about actual policy that works, that is not good enough.

 

By: Nancy LeTourneau, Political Animal Blog, The Washington Monthly, March 10, 2016

March 16, 2016 Posted by | Bernie Sanders, NAFTA, Trade Agreements | , , , , , , , , , | Leave a comment

“Nobody Wins A Trade War”: Donald Trump And Bernie Sanders Are Promoting Dangerous Protectionism

As different as Donald Trump and independent Vermont Sen. Bernie Sanders are, they have one important policy goal in common. It’s a dangerous goal, one that elites in both parties must counter, before a new public consensus is formed and grave damage is done to the economy.

Both Trump and Sanders are, at their heart, protectionists. They both believe in tariffs and other obstacles to prevent foreign-made goods from competing with American-made goods, and keep foreign worker salaries from driving down Americans’ pay. Trump is the most direct and vocal about it, calling for tariffs as high as 45 percent against China. Sanders has yet to call for a specific tariff, but he’s called for repealing the North American Free Trade Agreement with Canada and Mexico. Eliminating NAFTA would restore tariffs that ranged up to 25 percent and lead to other measures that hinder trade between countries.

At first glance, it seems like a great idea to raise tariffs to protect American workers from globalization. But nearly all economists say that protectionism is a beast that will gore us if set loose. Protectionist measures by the U.S. will lead to reprisals by other countries and the tit-for-tat escalation of tariffs in a trade war will likely lead to a global depression (as it did in the 1930s). And even when protectionism is successful in boosting wages, it boosts consumer prices even faster, so most workers are no better off.

All this is generally accepted by leaders and advisers in both the Democratic and Republican parties. But the downside of protectionism is complicated and not well understood by the public, whereas the call for tariffs and border-closings (Trump’s Mexican wall) is simple and emotionally resonant. Hence the problem: In political communications, it’s well known that if a falsehood is not promptly and effectively countered by respected senior public figures, it tends to become accepted as true by the public at large, regardless of the damage it may cause.

This time, the public will not accept that so-called free trade alone will restore rising standards of living and breathe new life into the American dream. Most working Americans, all except those at the top, have seen their standard of living erode over the past 30 years, and “trust me” is no longer an adequate response. That’s why insider candidates – former Secretary of State Hillary Clinton, former Florida Gov. Jeb Bush and others associated with the failed status quo – are doing poorly, and outsider candidates are drawing far more support than expected.

To prevent a protectionist insurgency from wrecking the economy, the candidates who represent mainstream economic thinking need to do better. They need to offer more than a reminder of the Smoot-Hawley Tariff Act of 1930. Unfortunately neither party is well positioned to do this. Clinton has the albatross of NAFTA hung firmly around her neck, since her husband championed it while president. And until very recently, she’s been a strong supporter of the latest proposed trade treaty, the Trans-Pacific Partnership – which is pushed by President Barack Obama and supported by a wide range of Democrat-aligned pundits.

At the same time, those in the Republican mainstream have either ignored stagnant wages, or they’ve blamed them on excessive taxes and red tape. That has convinced enough voters to date. But Americans have been tugging on their boot straps for several decades now without effect, and they are not inclined to believe that if they only tug a little longer or a little harder they will be themselves lifted up. Just as Clinton is not well positioned to be credible on this issue, neither is former Massachusetts Gov. Mitt Romney, who has made much of his fortune by eliminating American jobs. The public senses this. That’s part of the reason Romney’s broadside against Trump had so little effect.

If Democrat and Republican elites intend to stave off a wave of protectionism, it’s time for some serious public discussion of alternatives that can meaningfully help ordinary working Americans and their families. The possibilities fall into three categories: The first involves investments that boost American productivity directly, like education and infrastructure. The second category requires steps that boost American incomes directly like radically expanding the earned income tax credit or strengthening unions. The third category involves measures that reduce what workers have to pay out-of-pocket in order to live, so that stagnant wages go further. These measures include tax-shifting (reducing the employee share of the payroll tax, for example), making higher education free (as it is in of the developed countries we compete against) and government-matching of employee contributions to retirement plans, so employees don’t need to save as much of their income.

Most of these ideas are anathema to conservatives, and many are considered outside the range of legitimate ideas that serious Democratic thought leaders can safely discuss in public. But a trade war and the jingoism that goes with it might be even more distasteful and is almost certainly more damaging. It’s time for elites of both parties to begin discussing the undiscussable, if for no other reason than to avoid worse.

 

By: David Brodwin, Cofounder and Board Member of American Sustainable Business Council; U. S. News and World Report, March 14, 2016

March 15, 2016 Posted by | Bernie Sanders, Donald Trump, Protectionism, Trade Agreements | , , , , , , , , | Leave a comment

“Was Abe A RINO Too?” John Boehner Has No Use For Lincoln In Context

House Speaker John Boehner (R-Ohio) sent a memo to all House Republicans today, telling them what a great job they’re doing. Of particular interest, though, was the Speaker arguing how “noble” he and his party are for trying to balance the budget. From the memo:

The book Congressman Lincoln by Chris DeRose, which I recently read, includes a chapter focused on Abraham Lincoln’s efforts to help craft a new national agenda. At one point in the book, young Lincoln warns that government debt is “growing with a rapidity fearful to contemplate.”

“[Government debt] is a system not only ruinous while it lasts, but one that must soon fail and leave us destitute,” Lincoln warns his countrymen in Congressman Lincoln. “An individual who undertakes to live by borrowing, soon finds his original means devoured by interest, and next no one left to borrow from – so must it be with a government.”

Lincoln’s words ring true today, perhaps to a degree greater than ever before.

Oops.

Lincoln, however, while warning of debt, also said that the debt had been created by the unwillingness to consider new revenue.

“By this means a new national debt has been created, and is still growing on us with a rapidity fearful to contemplate — a rapidity only reasonably to be expected in time of war. This state of things has been produced by a prevailing unwillingness either to increase the tariff or resort to direct taxation. But the one or the other must come,” Lincoln wrote in the Whig Circular in 1843.

Oh how I love this story.

Lincoln, who saw great value in a strong federal government, supported public investments in infrastructure, and increased taxes to pay for the Civil War, was concerned about government debt. The historical context matters — Lincoln warned of lost creditors, while in contemporary times, investors are eager to loan the United States money — but it would appear the legendary leader believed in fiscal responsibility.

But Boehner has no use for what Lincoln actually said and did. While today’s House Speaker refuses to consider asking any American to pay so much as a penny in additional taxes, Lincoln saw increases in taxes or tariffs as an undeniable way of responsibly paying our debts. Indeed, he blamed federal debts on “a prevailing unwillingness [to] resort to direct taxation.”

And to borrow a phrase, Lincoln’s words ring true today, perhaps to a degree greater than ever before.

I’d just add, by the way, that the Speaker’s credibility on the issue is genuinely laughable. Boehner today writes, “There should be no doubt that our purpose in calling for a balanced budget is a noble one, and the right one.” This is the same Boehner who approved George W. Bush’s tax cuts without paying for them, put the price of two wars on the national charge card for future generations to worry about, supported Medicare expansion through deficit financing, and added the costs of a Wall Street bailout to the national debt.

Now this same guy wants to talk about the nobility of his fiscal agenda? While taking Lincoln out of context? And while pretending his preferred budget plan isn’t filled with magic asterisks?

C’mon, Mr. Speaker. You can do better than this.

Update: Jay Bookman emails to let me know the story gets even better. In that same piece, Lincoln goes on to endorse a tariff rather than a direct or property tax to raise revenue, because — get this — through a tariff, “the burthen of revenue falls almost entirely on the wealthy and luxurious few, while the substantial and laboring many … go entirely free.”

So, by 2013 standards, Lincoln is a success-hating RINO, right?

 

By: Steve Benen, The Maddow Blog, March 28, 2013

April 1, 2013 Posted by | Deficits, Republicans | , , , , , , | 1 Comment

   

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