The Republican Party of Filibuster, Hold, Bait and Switch

It takes two to tango. It takes two to be bipartisan. There is no indication the Republican Party members in Congress have any intention of cooperating with much of anything. Some examples:

#1. Filibuster delays on the extension of unemployment benefits, business tax credits, and housing tax credit bill: Senator Harry Reid (D-NV) on Senate delays with regard to the extension of unemployment benefits: “Mr. President, what I just read is a short way of saying we wasted another day. With all the work we have to do, we stood and looked at each other yesterday—30 hours of doing nothing and the ability to move legislation forward. Anybody who has been watching what has taken place in the last 3 years knows the Republicans have become experts in wasting time,the American taxpayers’ time, the American people’s time.Yesterday was no different. Yesterday,Republicans used every trick in the book to slow and stall so we couldn’t do important work. And 7,000 additional people lost their ability to have a check. It is starting to get cold. It is getting cold in Washington; it was 40 degrees. Maybe people can buy a coat for one of their kids, maybe they can make that payment on the car before it is repossessed, or maybe they can pay their rent before they are evicted. These people have been out of work for a long time, and we are trying to extend unemployment benefits. And it is paid for. We are not borrowing the money to do that. But, no, the Republicans have stalled and stalled. Now more than 200,000 people have lost their ability to get that extra dollar they need. These 200,000 people need help, but Republicans can’t be bothered with that. They are stalling, showing everybody they can stall things here. They are doing that.” November 4, 2009 [CongRec]

The 111^th Congress is on pace to set a record for Senate filibusters. [American Enterprise Blog] Just last week 39 members of the GOP tried to stall the Justice, Science and Related Agencies Appropriations Act of 2010. Failed. A single Republican tried to filibuster the Unemployment Compensation Extension Act of 2009 on November 4^th. Failed. Two Republicans sought to stall the Unemployment Compensation Extension Act on Nov. 2^nd and failed. [Filibusted] The ones most likely to filibuster? DeMint, Bunning, Coburn, Inhofe, Session, Ensign, Brownback, and Cornyn. We can expect the filibustering to continue through the health care reform legislation debate.

#2. Placing personal holds on legislation. It's no secret Senator Tom Coburn (R-OK) doesn't like the American Recovery and Reinvestment Act. [TP] However, the Oklahoma Senator has plumbed new depths, placing holds on a major veterans benefit bill, S. 1963, the “Veterans' Caregiver and Omnibus Health Benefits Act of 2009.” This wasn't the Senator's first rodeo: “Earlier this fall, Coburn placed holds on S 252, the Veterans Health Care Authorization Act of 2009, and S 728, the Veterans’ Insurance and Benefits Enhancement Act of 2009, which led to the introduction of S 1963, which combines key provisions of the two earlier bills in an effort to get around Coburn’s opposition.” [MarineTimes] Ostensibly what Coburn wants to do is amend the bill to take the funding out of the ARRA appropriations.

Senator Coburn's webpage is careful to say he is not opposing the bill, “he merely wants to debate and amend legislation to improve it.” He alleges the bill discriminates against Vietnam, Gulf, and WWII veterans, and that his amendment would “increase benefits, and reduce wasteful spending....” That “wasteful spending” is most likely the funding in the ARRA legislation.

Oklahoma's share of the ARRA funding is approximately $2.6 billion, with $905.2 million assisting health and human services projects; workforce $30.7 million; public safety $31.5 million; environmental projects $63.3 million; low income housing $78.2 million; energy funds $107.2 million; education $316.8 million; transportation $542.9 million; and budget stabilization $578 million.[OK.recov]

Thirteen prominent veterans organizations were not impressed, and sent a letter to that effect to Senate Majority Leader Reid: “Those signing the letter include the nation’s major veterans groups — The American Legion, Veterans of Foreign Wars, Disabled American Veterans, AmVets, Paralyzed Veterans of America, Blinded Veterans Association, Military Order of the Purple Heart, Vietnam Veterans of America, Iraq and Afghanistan Veterans of America and Jewish War Veterans, plus the Military Officers Association of America, National Military Family Association and Wounded Warrior Project.” [Marine Times] The American Legion is organizing its membership in Oklahoma to urge the Senator to remove his hold. [NavyTimes]

Senators Akaka (D-H1), Begich (D-AK), and Tester (D-MT) urged Coburn from the Senate floor to release his hold on the bill. [TulsaWorld] Akaka's comments mirror those of the veterans organizations: “... we, as a Committee, have not been able to achieve action on S. 1963, the proposed “Caregiver and Veterans Health Services Act of 2009”. This vitally important veterans’ health bill is being held up by a single senator. Each day that this measure is delayed means that vital benefits for veterans are delayed. This is a bi-partisan bill, the provisions of which were reported by the Committee as S.801 and S. 252, with the full support of our Ranking Member, Senator Burr. This bill is supported by many veterans’ organizations, including The American Legion, the Veterans of Foreign Wars, the Disabled American Veterans, the Paralyzed Veterans of America, and the Wounded Warrior Project. Various other advocates support this bill, as well, including the Nurses Organization of Veterans Affairs, the Brain Injury Association of America, the American Academy of Ophthalmology, the American Association of Colleges of Nursing, and many others.” [Akaka, VetSenCom]

Coburn remains intransigent.

#3. First you say you do and then you don't. At one point in the heath care reform legislation debate it was essential to the Republican contingent that there be an individual mandate included in the bill. During the summer of 2009 Republicans argued that the individual mandate was an essential component of any health care reform legislation [TP] and the element was incorporated into the bill. No sooner was the individual mandate inserted than the GOP pulled a “bait and switch,” NOW the individual mandate became an insidious intrusion into the personal liberties of all Americans. [PhoenixBizJ]

Endless filibusters, the imposition of personal holds (one of Senator Coburn's favorite hobbies), and bait and switch political tactics are not components of any attempt at bi-partisanship, in anyone's lexicon. We may as well assume that the Republican Party is merely the Party of No, and thus they will render themselves as irrelevant in future legislation as they have become in the debate over health care reform bills.

Not All The Bubbles Have Burst Since The Economy Took A Bath

The good news is that Congress passed, and the President is ready to sign, legislation that extends unemployment benefits for another 20 weeks for Nevadans who have exhausted their benefits. The bad news is that includes approximately 10,000 people in the Silver State. [RGJ] Worse still, we're looking at a seasonally adjusted unemployment rate for September 2009 of 13.3%. [DETR] There are some other numbers to ponder as well.

No Wages For Sin, Or Much Else

The NV Research and Analysis Bureau reports a projected 2008-2010 growth rate in “accommodations and food services” of 0.0. The same projection holds for job growth in “amusement, gambling, and recreation industries.” There's no growth expected in “clothing and clothing accessories stores,” nor any in “electronics and appliance stores,” and a dip of 0.2% in building construction. “Furniture and home furnishings stores” are also projected to decline by 0.2%. Education and health services also don't show any projected growth in 2010. DETR doesn't see projected increases in mining employment in 2010 either. Motor vehicle and parts dealers employment growth is a negative 0.1%. [DETR]

Nothing about these numbers should really be all that surprising. A study of economic trends from 1991-2002 indicated that households in the middle fifth of our economy experienced “income growth” of 41%. However, there were a couple of kickers: (1) The consumer price index went up 33% during the same period, and (2) the costs of housing, healthcare, education, and child care increased by 46%. [CD] What we have here is a statistical picture of people paying out ever more for basic needs (health care, education, child care, and housing) while the cost of “gadgets and stuff” declined. Neo-Hooverites tried to explain away the stagnant wage statistics by saying that median weekly earnings were increasing, and those with college educations were seeing increased earning power in calculations assuming that the government was “inflating the inflation numbers.” The magic of “substitution bias” was also supposed to counter the arguments that people had less earning power. They also contended that workers were getting increased health insurance benefits, and that those figures should be factored into the framework. [USNWR]

Countering the 'median weekly earnings' statistics (which can be manipulated by including different types of high paid employment) were the numbers on real hourly wage growth – which by December 2003 had dropped -0.3% in blue collar manufacturing and non-management employment. [EPI] Substitution Bias isn't really an argument one should employ to declare that the blue birds are about to chirp blithely about economic health. Substitution Bias means that people “can” stop buying Levis' when the price is too high and substitute the purchase of discount outlet house brand blue jeans; or, stop purchasing shoes from Nordstroms and start buying from PayLess. This is hardly an indicator of economic well being. Those increased health benefits? – what the NeoHooverites were assuming was that the increased cost of health care benefits to employers equated to increased value for the employee, and should therefore be included as “increased wealth.” We've seen during the debate on health care reform that those increased “benefits” included more consumer-driven (limited benefit) plans, higher costs for fewer actual benefits, and a predilection on the part of the insurance corporations to shove employers with older, more female, and more experienced employees into high priced policies. Even if one added in the 119% increase in health care expenses over the decade, this still doesn't represent money people could spend on consumer goods and services, or on “amusement, gambling, and recreation.” There is another wage factor to be considered, especially as it related to Nevada's economy: vacations.

By May, 2002, Americans were being lauded for their “productivity,” but they were giving back almost $19.5 billion in unused vacation time to their employers. [HRG] As of 2009 approximately 40% of workers were giving back vacation days, and the average “long” vacation for an American worker was 9 days. [Sloan] The trend didn't bode well for a Nevada economy in no small part dependent on vacationing Americans. Little wonder DETR doesn't project increased employment in our “amusement, gambling, and recreation” sector. And, still the tax policies of the federal government favored the top 2% of American earners.

Tricky Trickling

Between 1977 and 1999 the income of the middle 5^th of the American public had increased by 8%, that of the top 5^th by 43%, and that of the top 1% by 115%. The top 20% of households were projected to receive about 50.4% of the national income. The share of national after tax income for the 60% of households in the middle income spectrum (middle class) was projected to be the lowest level the CBO had recorded since 1977. [CBPP] The trend continued. As of 2005 the share of the nation's total after tax income going to the top 1% hit another record high. The share going to the middle income families hit another record low. [CBPP] We have had greater wealth concentrated in the bank accounts of fewer people since 1977, and it would be pure folly to conclude that fewer and fewer people could be expected to fill more and more hotel rooms in Las Vegas or Reno. It would also be inane to assume that fewer people could spend enough money to keep an economy dependent on consumer spending afloat. Where did the money go?

I'm Forever Blowing Bubbles

We had a recipe for disaster. The wealthy did make investments – in the housing bubble, and betting on the housing bubble, and betting on bets about the housing bubble, and betting on the bets on the bets made with exotic investments like Credit Default Swaps during the housing bubble – and betting on whether the betting on the housing bubble would ever pay off, or not. It didn't. A nation with stagnant wages, increasing wealth disparity, and miserably low savings rates bought houses with mortgages they didn't understand, from brokers who didn't care because they weren't going to hold the paper anyway, and with the expectation that the decline in manufacturing would never actually mean anyone was going to be out of work because “gee, we're the Ownership Society, and we can buy (substitute bias) cheaper stuff at discount retailers, while we give back our vacation time; all because we're so 'productive' that our economy is 'growing.'” However, not “everything” was really growing.

On January 2, 2009 the Phoenix Business Journal reported that U.S. manufacturing was at its lowest point since 1980. The monthly manufacturing index of the Institute for Supply Management was 32.4%. Any score below 50% indicates a contraction in this sector. In classic understatement the Journal wrote: “The U.S. recession has hit auto manufacturing and consumer goods hard.” The ISM index isn't currently as low as dips in 1975 and 1980, but it's certainly been headed in the wrong direction in recent years.[DM] Overall, there's been a 50 year decline in American manufacturing, with the manufacturing GDP falling to 12% of the U.S. economy in 2006. This is a significant drop from the post WWII high of 28.3% in 1953. [AB.com] Whatever investments might have been made, they obviously haven't recently been in the manufacturing sector of the U.S. economy, and that's where the higher paying jobs had once flourished.

Digging Out

It's probably time for us to heed the time honored parental admonition: You Got Yourself Into This, Now You Can Get Yourself Out of It. There are some indications that we might just be doing this.

First, we need to re-invigorate our manufacturing sector. The auto industry appears to have gotten the hint, indeed Ford is showing signs of life. [AP] The others may take more effort to shake off the complacency and mismanagement of the last 40 years. China is emphasizing new energy technologies as an engine for its economic growth, [TCD] and there's no reason that the U.S. should sit back and let other such countries 'win' the contracts for energy related products by default. Depending on how one counts some projects, the Economic Stimulus Bill included $43-$35 billion for energy efficiency, and energy technologies. This amount certainly isn't going to be the end-all of investment requirements, but it's a decent start.

Second, we need to mitigate the effects of skyrocketing health care costs on American business. Every dollar an American consumer spends inflated health insurance premiums because there is inadequate competition in the region is a dollar not spent on other goods and services. Every dollar spent by a manufacturer or other business for those inflated premiums is a dollar unspent on wages, new equipment, or new product development. Frankly, a single payer system (Medicare for All) would have allowed American businesses and benefit plan administrators to slip the burden of paying for health care services in this country, but failing that solution a system incorporating a public option and imposing some reasonable regulations to mitigate some of the more egregious insurance corporation practices will have to do.

Third, we need to get serious about our infrastructure. It makes precious little sense to create new energy technology if we're going to try to deliver it using an early 20^th century grid. Our commerce would be enhanced if we repaired our bridges, and improved our public transportation systems. More people in the construction industry would be employed if we began to work seriously on the estimated $1.6 trillion backlog of infrastructure projects in the American Society of Civil Engineers report. [ASCE] There is not a grade above a C+ in any of the categories the ASCE measures, and our grades in drinking water infrastructure, navigable waterways, and wastewater treatment have earned us D- marks. Current federal funding for drinking water improvements are only 10% of what is necessary, and 27.1% of our bridges are well below acceptable standards. Only 10% of our public school facilities were built after 1985. The mean age ranges from 46 years in the northeast to 37 years in the southeast. About 25% of our school buildings date from before 1950. [EdFac]

Fourth, we need to get equally serious about regulating the abuses in our financial markets. No one is seriously arguing that short selling is intrinsically evil, but naked short selling must be curbed. So, too, should we consider the roles played by investment banks, rating agencies, and mortgage wholesalers in our last financial debacle. No one wins when the rules of the game are so rigged that a few on Wall Street may excessively prosper at the expense of all others, including the shareholders. The wealth lost and placed in peril by the 'casino players' in the financial services industry is staggering, and unfortunately constitutes a lesson unlearned by those on The Street who continue to market asset based securities and other exotic products designed only to increase fees for service instead of funding investments in the development and production of goods and beneficial services. In short, “we can't continue to play by Wall Street rules while they rig the game.” The Consumer Financial Protection Act is a start, but it could be improved by the addition of more stringent regulations on hedge funds.

Nevada's economy will improve. We can reasonably hope that more people will eventually have more money to spend in the Silver State, but unless we are willing to address necessary adjustments in our national manufacturing sector, improve the way we pay for health care services, get serious about our infrastructure needs, and re-regulate our financial sector, increased employment could be a long time coming.

Dean Heller's Right Turns: The New Anti Government Candidate?

As the Las Vegas Sun article this morning points out, Nevada Congressional District 2 voters seem to like their candidates to be conservative, just not That conservative. [LVSun] However, the August 2006 Republican Primary was a bit closer than most might remember. Ultra-right wing conservative Sharron Angle, or “Our Lady of Perpetual Campaigning,” gathered in some 24,349 votes (35.29%), Dawn Gibbons received 17,317 (25.10%), and incumbent Heller got 24,770 (35.90%). Angle actually outdrew Heller in Washoe (12,151 to 10,103), Douglas (2,664 to 2,657, and Lyon (1,946 to 1,562) counties. [Nvsos] These numbers may help explain Congressman Heller's devotion to corporate protection during the 111^th Congress.

The numbers may also explain Heller's adherence to the hard-line GOP health care reform ideology and recent legislative proposal in the House of Representatives. First, since the House has already considered several health care reform bills, and a final package is now available for public review, the GOP's horse is late to the starting gate. At best the bill is political theater: “In other words, the 219-page bill is less of a complete answer to the Democrats’ nearly 2,000-page bill and more of a political message aimed at highlighting the Republicans’ contention that the Democrats’ legislation is too costly and would dangerously expand the federal government’s role in health care. It also reinforces the Republican position that Democrats are proposing to do too much too fast and that health care policy should be shaped more slowly, in a step-by-step fashion.” [NYT] Prediction: Congressman Heller will contend that the health care reform measure will be “too costly,” will “dangerously expand the federal government’s role in health care,” and that health care reform should be undertaken “slowly, in a step by step” fashion.

The Republican version of “health care reform” in the House of Representatives is little more than a corporate protection act which allows the health care insurance companies to continue their pre-existing condition denials and their non-payment of claims to keep their medical payment ratios in line with Wall Street expectations. Under the guise of “portability,” bill strips the states' power to enact and enforce consumer protections, and to mandate coverage for things like vaccinations, mammograms, autism screening, mental health services, and prostate examinations. Fortunately, the bill has Zero chance of passage, perhaps because by CBO scoring it would leave 52 million Americans uninsured by 2019. [TP] It also isn't helping that House Minority Leader John Boehner (R-OH) isn't pledging to insert the GOP bill as a substitute amendment and refuses to post it online for inspection if he does. [TP] Should Congressman Heller maintain his allegiance to Boehner's lead then a person might assume that Heller is looking to increase his “conservatism” in advance of the 2010 primary season, hoping to win over hard-line voters in Washoe, Elko, Douglas, and Lyon counties.

The Aliens in SCHIP

If we are speaking of Heller's hard right turn, health care reform wouldn't be the first example. Congressman Heller opposed the extension of the SCHIP program ostensibly on the grounds that somewhere out there in the distant mists an “illegal alien” would take advantage of the funding. Even the insertion of protective language into the final bill was insufficient to deter Heller's concerns. [LVSun] He availed himself of this chorus in the GOP lyrics again during the discussions of current health care reform legislation.

Tip Toeing Through The TARP

Heller shifted to a populist stance on the extension of the Bush Administration TARP program: "Bailout money has already been spent with little oversight and few positive results. Over the past few months we have seen CEO bonuses handed out, luxurious retreats for executives, and financial institutions buying one another out. By rescinding the additional $350 billion yet to be appropriated, Congress can show the American people that protecting the taxpayer and fiscal responsibility is a priority. I urge my Senate colleagues to reevaluate their vote on this measure," said Heller.” (Jan. 22, 2009) [VtSmt] During the 110^th Congress both Representatives Heller and Porter voted against TARP funding. [GovTrack]

The TARP program makes an inviting target for the hard right (and for some from the left) in no small part because the “bailouts” were advertised as a way to sop up so-called Toxic Assets on bank books to increase available capital for financial assistance to other sectors of the economy. When the negotiations broke down between the banks and those holding financial instruments (read Toxic Assets) about the valuation of those assets, (bankers said 30 cents on the dollar, holders said 60 cents), the Treasury simply used the funds to recapitalize the banking sector. Squealing about the payment of bonuses on Wall Street, and other corporate excesses doesn't address what the TARP funding actually DID. A reasonable person looking at the potential melt-down of the money markets as of 5:00 pm, September 18, 2008, should have sided with Bush-Paulson in their concern for the fundamental damage such a lack of capitalization would cause in the financial markets. Granted that the TARP bill was rushed, that it contained too few strings on the initial payouts, and that it sought to do the impossible (value the toxic assets), but it did restore enough confidence in the financial sector to avoid catastrophic consequences had more investment banking operations failed.

Casuistic Concern?

Given Representative Heller's concern for “oversight,” “CEO bonuses,” and “mergers and acquisitions” H.R. 3126, the Consumer Financial Protection Act of 2009, would surely gain Congressman Heller's support? The bill was reported out of the House Energy and Commerce Committee on October 28, 2009 on a 33-19 vote. [HEC] Next? “The Consumer Financial Protection Agency Act of 2009 is expected to be merged with a number of other regulatory reform bills before moving to the House floor for a vote including some previously House approved bills such as H.R 1728, the "Mortgage Reform and Anti-Predatory Lending Act of 2009." [NAMB] We'll get a chance to see just how concerned Congressman Heller truly is about financial protections, executive compensation, and banking M&As when this bill hits the House floor.

We can question the Congressman's level of concern for financial regulation and the oversight of predatory lending practices because when given an opportunity to vote in favor of speeding up the enforcement date for the CARD Act, Representative Heller voted against it. [roll call 851] This vote shouldn't have been a surprise since Congressman Heller voted against the original Credit Card Accountability, Responsibility and Disclosure Act (H.R. 627) back on April 30, 2009. [GovTrack] Evidently, Congressman Heller was more concerned with the impact of “burdensome regulations” on the banks issuing credit cards than he was about controlling the way credit card payments are applied to the balances of ordinary citizens, about retroactive rate hikes, the imposition of limit fees, and notices of changes to credit card agreements with consumers. [PD.com] While the Congressman from Nevada's Second District may rail about banking industry abuse of TARP funds, he seems to have no qualms about voting against legislation to curtail banking practices as those apply to ordinary consumers and small businesses.

Hitting the High Points

Congressman Heller adopted the hard-liners stance on the economic stimulus bill, noting after its passage: “My number one priority in Congress is to turn our economy around and get Nevadans back to work. Despite claims that the stimulus bill would provide an immediate jolt to our economy, an additional 2.8 million jobs have been lost since its passage. A total of fifteen states, including Nevada, now have unemployment rates higher than ten percent. As I stated in February, big government and record debt is not the answer to fixing our economy. A real stimulus package would have expanded tax relief and included a housing fix. This bill which was conceived and written behind closed doors has done a great disservice to Nevadans and the American people," said Heller.” [PVS] In this statement Heller hits all the T'bagging High Points: Big Government, Record Debt, Lower Taxes.

Heller apparently doesn't share Governor Jim Gibbons' enthusiasm for the federal stimulus funds set aside for conservation projects in Lincoln County ($1.3 million) [DCNR] or for the first NDOT economic stimulus project bid for an estimated $14 to $16 million repaving project for I-80 in Heller's district east of Lovelock, NV. [NDOT] Nor does he seem to enjoy the fact that the economic stimulus legislation has awarded $987,900,000 to Nevada, of which $314,630,000 has been received, creating about 5,667 jobs so far. [Rec.Gov]

Trickling Down the Economic Trail

As for the tax relief part, the Administration's tax cuts went into effect with the stimulus bill, and the Treasury Department immediately directed the IRS to reduce the withholding from paychecks within 6 weeks; reduced withholding from about 95% of American families' income. [NBC] Republicans argued that more tax cuts should go to businesses which would then create jobs, but as one economist observed: “It is tough to see how a company that is seeing its sales slaughtered in today's recession is going to hire just because it gets a few thousand dollars per new worker from the government," Howard Gleckman wrote on the TaxVox blog for the Tax Policy Center, a nonpartisan think tank. "Profitable firms would merely take the credit for bringing on workers they were already planning on hiring." [WaPo] Congressman Heller complained that the stimulus had not taken effect quickly enough, however Republicans fought the very inclusions in the bill that would have had the most immediate impact: Extending unemployment benefits, increasing food stamps, aid to state governments, and increased infrastructure spending. [Zandi]

Blinker Think

Continuing along the Bushian Trickle Down theology, Representative Heller created something of a flap about the Cash for Clunkers Program. “At a Carson City Rotary Club meeting Tuesday, Heller asked how many in the room of 70 people had taken advantage of Cash for Clunkers. A man raised his hand, prompting Heller to say: “Congratulations. Everybody else in the room paid for your car.” The man headed for the door, telling Heller: “I have better things to do than be insulted by a man who hasn't learned anything. I'll never vote for you again.” “I know I embarrassed someone and I apologize for that, but I don't think everybody has a right to own a new car," Heller said.” [LVSun] [Nevada Appeal] If a narrow vision of economic stimulation is under discussion, Heller's rejoinder is instructive. Heller's line would appeal to the “government give-away” objectors who perceive any subsidy as a benefit to someone other than themselves without seeing the necessity to sustain major manufacturing and sales sectors. Worse still, the perspective blinkers how the automotive industry is incorporated into local economies as dealerships struggle to sell vehicles during a recession. Closing a dealership doesn't merely effect sales personnel; mechanics, detailers, secretaries, bookkeepers, and others feel the impact as well. [USNWR] The legislation didn't infer that “everyone has a right to a new car,” it sought to promote sales in a beleaguered industry to those who could already afford most of the cost of a vehicle at a time when dealerships were going under for lack of sales revenue. If nothing more, the blinkered mentality suggests an individual whose philosophy might be reduced to “I got mine, now you try to get yours;” the “ME generation” on steroids. Heller exemplified the concept voting against H.R. 2751 in June, 2009. [GovTrack]

If Congressman Heller is still trying to promote his “independent,” or “moderate” motif, his voting record on major legislation doesn't particularly demonstrate it. His votes on economic issues hew far closer to the philosophy of those Angle voters he might seek to attract in the next primary than to the more moderate or centrist voters in the district. One of the least influential members of the 111^th Congress may in fact be an example of the constriction of the Republican Party toward the most intractable members of its base.

Senator Ensign's Irrationale: Health Care Reform and Campaign Dollars

Senator John Ensign (R-NV) is hewing to the Party line: Any assault on the health care status quo is a “slippery slope...toward a complete government run takeover of our health care system,...forcing private insurers out of business.” [LVSun] Easy for him to say, he's gotten close to a million $$$ from various segments of the Status Quo during his political career.

The slippery slope argument is, in itself, rather oily. When a politician takes the classic “Slippery Slope” position, he or she is all but admitting that the legislation in question is not intrinsically minacious. It merely “could be.” Secondly, this stance generally requires the acceptance of a projection based on worst case scenarios. Rarely do all the worst imaginable ramifications of any piece of legislation appear full blown anywhere near the horizon. Third, the proposed amalgam of worst possible conclusions must be an accepted negative outcome.

Senator Ensign's ultimate negative is the depletion of private health care corporation treasuries. Looking to his list of campaign contributors the basis of his argument is relatively clear. Looking to the substance of insurance industry support arguments the position is not quite so transparent.

Corporations, indeed any form businesses, function best when they offer goods or services of benefit to their customers. The health insurance industry has a problem. They are offering insurance that is supposed to cover at least basic medical expenses when policy holders submit claims. The patient is theoretically free to focus upon getting well, and those providing the medical services are supposed to be able to depend on getting paid for the services provided. However, the relative consumer and provider benefits are called into question when the business model of the health insurance corporation is such that they (1) try to insure only the healthy and (2) try to pay out only the minimum amount possible. One can imagine someone attempting to sell “tire insurance” saying we will only insure new tires of at least 8 ply, and we will not cover you if you drive your vehicle on unpaved roads. Further, if you have ever had a flat tire we will consider that a pre-existing condition causing the denial of your claim, and we will not cover tire rotations. Since potholes and nails already exist in the driving environment, we will not cover damage created by either potholes or nails and industrial staples. How a consumer is supposed to derive a benefit from this arrangement is highly questionable, and highly analogous to current health insurance corporation practices. It appears to be this “benefit” Senator Ensign is claiming to protect from government incursions.

In Senator Ensign's worst case scenario, the public option will be so popular that it will drive consumers from the private into the public system. Herein lies the logical problem: If the public option is so much better than that offered by the private corporations, then the private corporation must be doing something that drove trade to a 'competitor.' Like failing to cover expenses, and denying legitimate claims. But, but, but, sputter the advocates for the insurance corporations – the public plan will be supported by taxation. Not so. The public option plans currently in the proposed legislation are to be self supporting. Faced with this fact of life, the industry apologists revert to the worst case scenarios in which somewhere out there beyond the horizon there exists a hypothetical case in which the system requires investment beyond its capacity for self sustaining capitalization – and the government will have to subsidize the arrangement. We have to ask: What and who will be subsidized?

For Senator Ensign, and like minded members of the GOP opposition to health care reform, it is perfectly acceptable for the taxpayers to be subsidizing Medicare Advantage policies issued by private health care corporations, even when it can be demonstrated that these policies are profitable without subsidization. Opposition advertising asserts that there will be “cuts in Medicare,” but without telling the viewer that those cuts are primarily in those insurance corporation subsidies. In short, subsidizing corporations is good, subsidizing taxpayers is bad.

Members of the Republican opposition have shown little appetite for chewing on the subsidies offered for employer sponsored and privately purchased insurance policies, however, when the public option is inserted they howl that this is an unwarranted imposition of government competition with private corporations' business. Subsidize corporations good; subsidize people bad.

When all else fails, there's always the argument that the health insurance industry taken collectively is a huge enterprise that must not be assaulted because it is a huge business enterprise. Aside from the obvious tautology, the argument fails because if a corporation is not offering a product that is beneficial to the economy and the consumers, then there is no logical reason for the government (the people) to support it. Taxpayers subsidize medical research, not because medical research is a large enterprise, but because the results of that enterprise have a positive benefit. Why would taxpaying citizens support subsidies for health insurance corporations that skim off up to 33% of our total medical expenditures without creating any benefit?

Since there's no obvious logical rationale for Senator Ensign's opposition to health care and health insurance reform, we're back to the part where he's accepted some $984,936 from health professionals, $629,466 from insurance, $313,980 from pharmaceuticals and products, $244,804 from health services and HMOs, and $234,379 from hospitals and nursing home operations. [LVSun] Those appear to be all the reason Senator Ensign needs to inform his opposition.

Coffee and the Papers: Nevada Special Session? Very Special People?

** Merry Christmas? Tax revenues in Nevada continue to drop, the budget gap is growing, and we're probably looking at another Special Session of the Assembled Wisdom – not that they'll actually raise taxes to fill in the gap – expect more tinkering in the form of moving money from one FY to another, borrow more money, or trip the furlough switches for state employees. [Las Vegas Sun] One question: If the State can't maintain spending levels commensurate with eligibility for matching Federal funding in some program areas, will the in-action make our fiscal problems even worse?

**There's more to Las Vegas, NV than bright lights, floor shows, and Ka-Ching Machines, there's Steve Sebelius's “Various Things and Stuff,” to remind us that Fox News isn't. Why would Fox put Gas-baugh on for a 'serious interview?' Why not? The ranting one, who when he trips over the line from commentary to insults begs all to remember he's just a comedian, is about as close as anyone comes to being the spokesperson for the current Republican Party. Jon Stewart's send up of the well broken line between the Fox News and Fox Views broadcasts frames the issue and completes the picture. However, there is some news to be gleaned:

"Right now there's no central Republican leader to turn to, and there's no central Republican message," conservative talk show host Rush Limbaugh told Fox News on Sunday. "The Republican message is sort of muddied. What do they stand for? Right now it's opposition to Obama." [HuffPo]

Today's elections in New York, New Jersey, and Virginia demonstrate how a party could easily win some battles and lose the war. A hard-line ultra conservative who calls Glenn Beck his mentor could win the NY 23^rd seat, (it doesn't get much lower than this) a hard line ultra conservative in Florida could provide “the purest test of where the party is headed, a choice between pragmatism and ideology.” [Time] With the Fox “News” network giving air time exposure to the hard line right candidates and causes, it's little wonder more moderate members of the GOP are having a difficult time getting traction with their own base.

** Nate Silver, of the eerily prescient 538 blog, warns against anyone taking gubernatorial election results too seriously. This explanation won't deter partisans from spinning like tops, but it should be read in the interest of keeping a bit of rationality in the mix.

**Senator Harry Reid's office confirms what we already know: Senator Joe Lieberman is more intent on making himself “Relevant” than in securing any form of health care legislation. Lieberman (I-Aetna) says: “...he will vote for the motion to proceed to the health care bill because he supports health care reform that will control costs and insure people who don’t have it now, but will oppose cloture on a final bill if it contains a public option.” [TPL]

** Sign of the times? 26 loan modification firms have been shut down by the Nevada Division of Mortgage Lending for failing to obtain bonding required by statute. [RGJ] The companies have 10 days to cancel contracts and refund money for “work not performed.”

** Welfare Queen Rumor Squelched: Another one of those pesky e-mail disinformation campaigns has the Obama Administration giving out cell phones to welfare recipients with “tax payer dollars.” Fact Check demolishes this one. The radical right has just noticed the SafeLink Wireless program run by America Movil, funded by the Universal Service Fund administered by the Universal Service Administration Company, an independent non-profit, sustained by contributions from the tele-com industry. “This specific program, SafeLink, started under President George Bush, with grants from an independent company created under President Bill Clinton, which was a legacy of an act passed under President Franklin Roosevelt, which was influenced by an agreement reached between telecommunications companies and the administration of President Woodrow Wilson.”

** Mychal Massie joins the right wing chorus demeaning the President's visit to Dover AFB. [RWW] Did these people forget President Ronald Reagan's visit to Andrews AFB, the photographs, and his comment during his radio address? “In a few hours I’ll undertake one of the saddest journeys of my Presidency. I’ll be going to Andrews Air Force Base to meet one of our Air Force planes bringing home 16 Americans who died this week in the terrorist attack on the United States Embassy in Beirut.” [FDL with photo]

** There's a bit of good news on the economic front: Manufacturing orders are up for the fifth time in six months. “Lean stockpiles is one reason factories are gaining momentum. A report yesterday from the Institute for Supply Management showed manufacturing last month expanded at the fastest pace in more than three years as production surged.” [Blmbrg] The not-so-good news is that the Goldman-Sachs party continues [HuffPo] (Recommended reading in Time) And, Goldman-Sachs deals were “secret, risky,” and channeled through a Caribbean tax haven. [McClatchy]

Tranching Through The Greed: Financial Regulation Bills Clear House Committees

Why would anyone in Nevada, coffee in hand on a cool October morning, be thinking about the regulation of derivatives trading? Protracted economic epistles are usually a recipe for eye-rolling, yawn inducing, apathetic reactions, even with a heavy dose of caffeine. Not to extend the tease remorselessly, but one reason this should peak the interest line is that It's Your Money “They” are Playing With. Let's approach this topic gently, and let's imagine that all too many people are put off by the financial services slang and jargon such that they believe they aren't really capable of understanding those exotic markets. After all, the upper echelons of Wall Street management have benignly sneered on our TV monitors that these are not topics for “unsophisticated investors.” (Translation: Just let us keep wheeling and dealing, and when we screw up royally all those “unsophisticated investors” can pick up the tab.) A further definition of terms might be handy.

Our Little Glossary

Unsophisticated Investor = Any citizen of the United States who having the misfortune not to be beknightedly wealthy and is not familiar with the Wall Street jargon obfuscating mismanagement and prevarication.

Derivatives = pieces of paper with signatures at the bottom (contracts) whose value is based on a “traditional security” like stocks or bonds, or an asset like commodities (think pork bellies, cows, and orange juice), or a market index (think imaginary number based on weighted values of a list of companies, Dow Jones, etc.) We can go a little further here without bursting anyone's brain: “Futures contracts, forward contracts, options, and swaps are the most common types of derivatives. Since derivatives are contracts, almost anything can be used as a derivative's underlying asset. There are even derivatives based on weather data, such as the amount of rain or the number of sunny days in a particular region. Derivatives generally are used to hedge risk but also can be used for speculative purposes.” [FinDict] If this is sounding a little bit like a “numbers racket,” there are, indeed, points of comparison. However, before we go off half cocked and demand the outlawing of credit default swap-like derivatives in general let's look at how they work:

Suppose for a moment we are among those “sophisticated investors” who run an investment fund – Desert Beacon Investment LLP. Suppose that Desert Beacon LLP buys some mortgage bonds from FlyByNight Mortgages Inc. Hmmm. We know that business hasn't been exactly booming in Las Vegas and Reno so we decide to “hedge our bet” on those mortgage bonds, because if those bonds go into default then we go – so to speak- into the toilet. What to do? Desert Beacon LLP purchases a credit default swap (derivative) from Big Boyz Investment Fund. If the FlyByNight bonds tank we'll lose our investment BUT we'll get a payoff from Big Boyz Investment Fund to compensate for our loss. On the delightful possibility that the FlyByNight bonds are actually good for something – then we've paid Big Boyz Investment Fund for the comforting knowledge that while we might lose our jackets we won't lose our shirts. The risk management part is the happy side of the equation. There is, however, the speculative side that frankly isn't so pretty.

What would happen if Desert Beacon LLP knows deeply and truly that the mortgage market in Las Vegas and Reno is a big bubbly thing that is very likely to burst and splatter defaults all over everybody. Ta Da! Desert Beacon LLP buys a credit default swap, but this time Desert Beacon LLP pays Big Boyz Investments a higher premium (like an insurance policy) for the swap – because there's more risk. So, FlyByNight Mortgage bonds crash as expected, but Desert Beacon LLP which owned the bonds (not the mortgages) could actually make a profit by cashing in the “insurance policy” on the default. Heads Desert Beacon LLP wins, Tails Desert Beacon LPP wins. Desert Beacon LLP should be happy, but there's a big cloud on the horizon. What if Big Boyz Investment Fund had piled up a huge batch of those credit default swap/insurance policy like contracts, and when the Housing Bubble went very very flat they couldn't pay off all those credit default swap/insurance policy like contracts? Answer: Lehman Brothers.

Leverage = Use “leverage” in a sentence: “Most of the speculative credit default swaps on asset based securities were highly leveraged.” Leverage is a loan or some kind of debt in which the money is reinvested in the company to earn a higher rate than the cost of the interest on the loan. Most businesses have some leverage. Think of a company selling ice cream; if it can make more sales with a new truck then the payoff from increased sales will offset or be greater than the cost of the loan to buy the vehicle. If Desert Beacon LLP can earn more money (jargon: return on assets) than the cost of the loan, then its return on equity (jargon: ROE) will be higher than if it didn't take on the debt. The good news is that if the ROE is up then Desert Beacon LLP can reward its investors more than if it hadn't taken on the indebtedness. Bad news? If the interest on the loan comes in higher than the return on the assets (garden variety business operations) then the investors in Desert Beacon LLP take a loss. Worse still? If the investment made with the borrowed money crashes then Desert Beacon LLP still owes the loan principal and all the interest on the loan it took out. Once again, think Lehman Brothers, Wachovia, etc.

Ratings Agencies = Good Housekeeping Seal of Approval companies who stamp various securities with nice labels like AAA, AA, A, etc. The ones stamped with more A's are supposed to be better risks than the ones stamped with fewer A's. Bonds, for example, with lots of A's have lower interest rates, but they are less risky (more likely to pay off). OK, that's the easy part that everyone pretty much understands, but how do the ratings agencies determine how many A's to stamp on the financial product. Unfortunately, we have a system rife with conflicts of interest (and not the money kind). For example, Desert Beacon LLP decides to tranche* up a lovely batch of mortgages it has purchased and repackage them as Desert Beacon Inc. Securities. DB Inc. then goes to the ratings agencies (Moody's Standard & Poor, Fitch) and asks them to “rate” the shiny new packaged securities. If Moody Blues rates them AAA, Standard Poorly rates them AA, and Itchy Fitchy rates them A, then Desert Beacon Inc. will contract with (and pay!) Moody Blues Ratings for its services. And people thought that Grade Inflation in colleges and universities in the late 1960's was bad....

Tranche = from the French “tranche” for “slice.” The fancy definition is “One of a set of classes or risk maturities which comprise a multiple class security, such as a collateralized mortgage obligation (CBO) or REMIC (real estate investment conduit). [InvestorWords] In English that would be a package of paper (mortgages, contracts) sorted out from several sources, repackaged, and sold as “new.” Imagine that DB Inc. purchased mortgages from several banks, some were AAA, some were AA, and some were SubPrime. The happy elves at DB Inc. created a mixture of these mortgages from a formula (remember those Algebra I “mixture problems?” in which we were supposed to calculate how many ounces of peanuts would be mixed with how many ounces of pecans to make a mixture worth $1.20 per pound?) The new mixture (tranche) was then packed off to shop around for a ratings agency that would stamp it with as many A's as possible, and then our newly minted little tranche would be sold to other investment companies like Desert Beacon LLP. What the heck, investors could even use their leverage to buy our tranches and someone might even buy a derivative credit default swap in case our little packages (slices) didn't prove to be worth what we thought they were, or what the rating agency decreed they might be when they stamped the A's on them.

Who's Watching The Store?

The following excerpt from Bloomberg News summarizes the current political/economic situation succinctly: “The battle over derivatives legislation is a test for the Obama administration’s efforts to tighten financial rules to prevent a repeat of the financial crisis that shook the global economy, a situation exacerbated by unregulated derivatives trading. Opaque financial products, including some derivatives, have contributed to almost $1.6 trillion in writedowns and losses at the world’s biggest banks, brokers and insurers since the start of 2007, according to data compiled by Bloomberg. Among fallen companies are Lehman Brothers Holdings Inc., the investment bank that filed for bankruptcy, and insurer American International Group Inc., which has been surviving on government loans.”

If the “glossary” has cleared things up for you – a hopeful thought for those of us who are not “sophisticated investors,” then you might wish to take on the recent output from the House Financial Services Committee. In particular, you might want to look at the summary of H.R. 3890, the Accountability and Transparency Rating Agencies Act, which passed out of the committee on a 49-14 vote. You may also want to take a gander at the press release from Chairman Barney Frank (D-MA) on the Consumer Financial Protection Agency Act that was passed by the House Energy and Commerce Committee.

Speaking of the Consumer Financial Protection Agency Act, H.R. 3126 was “marked up” by the House Energy and Commerce Committee on Wednesday, October 28, 2009, and reported out on a 33-19 vote. The Energy and Commerce version is the most recent, however the July 8, 2009 Congressional Research Service summary is helpful in a general way toward understanding what the bill would do. The Treasury Department has information on its website specifically on the topic of Financial Regulatory Reform, and suggested improvements to financial services oversight.

There are many weeds through which to navigate in the financial services sector reform proposals, but a good place to start are some fact sheets prepared by the Treasury Department and available on subjects like “consumer protection,” investor protection,” and “independence for compensation committees.” DB, which has no intentions of starting up an LLP or selling tranchey little products, will keep watching this topic.

The Siren Sings Of The Great Hoax: Nevada's Next Budget Battles

Back in 2008 during the 24^th Special Session of the Nevada Legislature approximately $106 million was shaved from the operating budgets of state agencies, there was a 50% reduction in funds set aside for educational supplies and equipment, and a one time transfer of $19.8 million from nonreverting budgets to the General Fund. [LegNV] And still the hits kept coming. The ending of the 2009 Legislative Session saw some $1 billion in budget cuts and a slight increase in the Modified Business Tax, from 0.63% to 1.17%. [LVRJ] The stop-gaps and band-aids may not staunch the bleeding. As the worst recession lingers on Nevada is projected to see another budget gap, of approximately $1.3 billion, by 2011. [CBPP] If we're looking for a perfect economic/budgetary storm we could easily be in the eye for a variety of reasons.

Out of Our Control

Some issues impacting Nevada revenues are beyond immediate local control. For example, Nevadans can't be held individually responsible for the implementation of a national economic policy that rewarded investors for off-shoring capital into foreign manufacturing concerns. Nor can we be individually admonished for tax policies that cut liabilities for the top 2% of the nation's population, placing the largest burden on the middle class. We didn't initiate deregulation of the commodities markets such that credit default swaps and other exotic derivatives would become the modern day manifestation of the old Bucket Shops, all but creating a '29-like crisis in our basic financial institutions. We enjoyed, but were not personally responsible for, the flow of capital into the housing market (and its derivatives) caused by unreasonably low interest rates and the availability of “wholesale” mortgage operations blowing hot air and cheap money into the housing sector. It wasn't really our idea exclusively to have record corporate profits at the risk of wage stagnation; and while we used our credit cards and equity loans for all manner of things, we weren't exclusively driving up the credit levels and driving down the savings rates. In short, the great hoax of the late 20^th century – Trickle Down Economics – came from without rather than within.

Of Our Own Creation

However, we should have at least taken a brief glimpse at the storm clouds. We should have reminded ourselves of the old saw: “If it's too good to be true, it probably is.” State politics perpetuated The Great Hoax. We could reduce taxes, cut some fat off the budget, and maintain our state and local services. We could support our schools, upgrade our roads and highways, and keep our libraries open with a minimal effort and maximize our results. All this had a certain libertarian appeal. Problems with education? Just cut back on teacher salary increases. Problems with roads? Just put in a toll booth. Problems with parks and libraries? Just cut back a few hours every week. Problems with rural mental health care? Just close a couple of clinics and let people drive a bit further.

Meanwhile, those people who had taken a “Better's Bus” to our casinos were looking at marginal or negative savings rates, over-extension of their own personal credit, and stagnating wages and salaries. Manufacturing jobs, paying enough to support an annual vacation to Las Vegas or Lake Tahoe, were leaving the U.S., but we were told not to panic, everything would be well – after all our productivity was increasing. All this really meant was that people were working longer and harder for the same pay. People working longer, taking fewer vacations, and leaving less on our casino tables isn't a recipe for fiscal success in a state dependent to no small extent on tourism revenue.

The Siren's Song

We kept trying to maximize our revenue from the tourists while we tried to minimize our own tax effort. While it sounds nice to the hierarchy of the U.S. Chamber of Commerce to have a “business friendly” state with minimum taxation levels, it leaves other eyebrows raised at the parsimonious level of “tax effort” put forth by Nevada's citizens. However, still attending to the Siren's song emanating from The Great Hoax, we decided to behave as though every dollar levied by state and local governments was an unconscionable burden born only with the greatest reluctance. We decided it was better to have not the best school facilities, but the cheapest. Not the best foster care system for our children, but the least expensive. Not the most prestigious university system, but the least costly. Not the best drug and alcohol rehabilitation facilities and programs, but the most economical. Somewhere in the miasma of the Great Hoax we displaced our Civic Pride with our personal acquisitiveness: The “Me First” generation ascendant.

Recently some voices in the desert voiced their displeasure with the “Auto Bail Out,” forgetting that many of those factory employees once took their two-week vacations in our resorts. Voices decried the “Bank Bail Out,” forgetting that those capitalizing the home construction industry were so deeply entangled in their unregulated derivative debacles that they could no longer either employ lower-management workers and traders or advance credit to construction companies. Many of those traders and construction workers once left their disposable income in Nevada resorts and casinos.

Between trying to get something for nothing, trying to off set our own burden on others, and attending to the Siren's lyrics, we're now faced with the dismal prospect that our minimal tax effort combined with our disinclination to pay for the services we say we value, is leading to another round of budget battles in the 2011 legislative season. Those “lyrics” are familiar. “We can't raise taxes in a recession!” Actually we can. Taxes can be raised on those activities which increase wealth disproportionately to the services required. The military has been aware of this phenomena for decades. If a base caused an influx of families whose children required education and the base didn't provide a school, then the Department of Defense appropriations came in lieu of the taxation. If a single element of the population is doing well while others who provide services for that element are not, then it's entirely equitable to “charge” them for those services. This isn't remotely “redistribution of wealth;” it's requiring that our tax policy reflect the democratic notion that we tax people based on their ability to pay.

Then the Siren sings, “Increased taxes drive away business!” One never hears of any business that actually closed down because of “taxes.” One often hears of corporations going overseas to take advantage of cheap labor and tax havens in which to hide wealth that might otherwise have been invested domestically. Listening to these lyrics from the Siren is a road map into a downward spiral to depression – the lower the wages, the lower the spending, the lower the spending, the more stagnant the domestic economy. The more stagnant the domestic economy, the less likely a return to the days when a family vacation meant a week in Las Vegas, or Reno, or The Lake.

If we are to endure another Budget Battle session of the State Legislature in 2011, at least let it not be the result of our own parsimony and ego-centrism. If we must look at another $1.3 billion budget gap, at least let us take a rational look at our own tax system and budgetary needs without falling for The Great Hoax and being distracted by the illusory Siren's Song.

Senator Ensign Addresses The Issue: Just Not The One We'd Expect

Hey, at least he didn't lie. Senator John Ensign (R-NV) ducked questions about investigations of his affair/payoff/lobbying law violations, and instead turned his attentions toward one of the least defensible GOP talking points attacking the Obama Administration. [LV Sun] The far-far Right has embraced the “czar” argument, albeit without noticing that the designation is often merely journalistic shorthand for positions created by Congress (Director of National Intelligence) or for which individuals must be confirmed by the Senate (national Science Adviser.) [WashIndy] It doesn't matter, for the far-far Right, the whole “czarist” thing merges nicely into a world view wherein There Is A Great Conspiracy To Trample My Liberty – rather like the Great Pumpkin lurking in the Patch to entangle unwary citizens in its vines.

The Fear Factor

Democracy Corps' focus group research reported this month offers some insight into the irrationality: “Fear of government control is at the heart of virtually all of the concerns raised by these voters about Obama’s agenda, and it is literally a fear of two things – government and control. They see government as inefficient, ineffective, and corrupt and believe it preys on the middle class and ‘hard-working Americans.” The generalized conspiracy theory is underpinned by a categorical rejection of any statement from the White House (You can't trust him, he says one thing but he really means another) and “They exhaustively cite examples of this strategy at work, starting with the bank bailouts, the takeovers of Chrysler and GM, and foreclosure assistance making homeowners dependent on government for their homes. Another example repeatedly raised by conservative Republicans that undoubtedly reflects the power of FOX News and conservative commentators among these voters was their concern over President Obama’s policy ‘czars’ wielding power over every issue with no accountability.” Senator Ensign is obviously willing to abet the paranoia, speaking to the irrelevant, spurious, and specious “czar” theme. That he chose to address an irrelevant, spurious, and specious argument is, in itself, immaterial – the only thing demonstrated is that the junior Senator is aligned with the Republican base – itself taking on more of the characteristics of a religion than a political party. Author Neal Gabler analyzes the disconnect between Republican conservatism and American politics.

“For centuries, American democracy as a process of conflict resolution has been based on give-and-take; negotiation; compromise; the acceptance of the fact that the majority rules, with respect for minority rights; and, above all, on an agreement to abide by the results of a majority vote. It takes compromise, even defeat, in stride because it is a fluid system. As historian Arthur Schlesinger Jr. once put it, the beauty of a democracy is that the minority always has the possibility of becoming the majority. Religious fundamentalism, on the other hand, rests on immutable truths that cannot be negotiated, compromised or changed. In this, it is diametrically opposed to liberal democracy as we have practiced it in America.” [LAT]

Voices In The Night

The political fundamentalism of Ensign's Republican base requires “special knowledge.” Those “immutable truths” are self defined and self sustaining. They are no “facts” concerning health care reform, the efficacy of Don't Ask Don't Tell, the efficiency with which fiscal policy can be utilized to enhance manufacturing and trade, or the necessity of addressing global climate change; they are only articles of faith.

If by faith, “government is bad,” then by the “logic” of the fundamentalist Republicans no program to assist car buyers, recapitalize the financial sector, reform the health insurance system, or keep homeowners in their houses is acceptable. These cannot be good because government is bad.

If by faith “government will always expand and any government expansion is by definition socialism,” then no re-regulation of the financial sector to modify the practices of hedge fund managers, no legislation to curb usurious credit card interest rate applications, no bill to alleviate the conflicts of interest in the practices of securities ratings agencies, and no oversight of the financial derivatives markets will be beneficial. By fundamentalist lights these will only be added to the list of scourges, the continuous and continuing march of government intrusion into individual “liberty” no matter how demonstrably counter-productive deregulation may have proven to be during the recent near miss with financial catastrophe. The Bush Administration TARP program, as necessary as it might have been to recapitalize the banking sector to prevent a meltdown of the money markets (predicted for 5:00 pm, September 18, 2008), is merely another example of “government intrusion” and the highly generalized “loss of liberty.” Regulation of the banking and financial sectors of the economy to create and sustain a level playing field cannot be good, because government is both bad and ever-expanding. The voices tell them so.

Received Wisdom

Not only are the “immutable truths” self sustaining, but these are supported by the received wisdom from voices perpetuating the mythology of Republican base fundamentalism. There is no more reward in debating the financial, social, or political issues of the day with the Republican base than there would be arguing about the reality the Assumption of the Blessed Virgin Mary with a Priest. They believe because it is true, and it is true because they believe it. Faith is an essential feature of any religion, but when political tenets morph into religiosity the practice of democracy is strained. Disagreement about the type of government intervention required to redress social inequities and address economic problems is possible if, and only if, both sides agree that there are facts which may be interpreted and understood in various ways. Constructive disagreement ( and hence compromise) is not possible when those who disagree may be easily dismissed as Heretics.

The essential problem associated with the denunciation of others as heretical is that sooner or later the religion is reduced to isolated congregations. While former House Speaker Newt Gingrich may have issues with individual polling reports on the composition of the Republican Party, the polls have been relatively uniform. The GOP, which Senator Ensign supports with such enthusiasm, has a declining membership. The numbers now range from 18% (NBC/Wall Street Journal) to 27% of the population. (Gallup). [ABC] These are the True Believers?

If the Republicans are to regain status as a viable national party, then the purging of the heretics needs to stop. The Party stands to lose an otherwise winnable Congressional seat (NY-23) as the purging process continues. The Party stands to lose other seats if those who declare political purity to be of greater worth than those who espouse pragmatism as an approach to problem solving win the day. Democrats are not immune to this, but the media narrative of the “in-fighting Dems” has some basis in truth: There are conservative, centrist, and liberal branches of their Party. The GOP, having pruned its trees of the heretical branches is looking rather bare by comparison.

The Republican tree is reduced at the moment to those who accept the Received Wisdom (government bad, President Obama bad, government is always destructive of liberty) along with those who are willing to accept that theirs is another nation, one in which their “information” is true, all other sources questionable. Their news is important and revealing of the Truth as They Know It.

The Well Pruned Tree of Knowledge

The Voices (Beck, Limbaugh, et. al.) serve to determine for the True Believers what is, and is not, important. Democrats and independents are prone to dismiss emphasis on the ACORN story, the “Bill Ayers Connection,” and “Birthers, Deathers, and Tenthers.” That corporate media, traditional news sources, and more mainstream outlets, haven't “covered” these subjects cannot possibly be (according to the base) because they are non-stories lacking substance and depth; but, because the “media is liberal” and won't tell a person The Whole Truth. So, Senator Ensign feels justified in taking to the Senate floor to denounce the so-called Czars, whether this is a silly exercise or no. The popular list of administrative and Executive Branch managers and liaisons has been explicated and debunked at length, and the nation's attention has moved elsewhere, but for a True Believer like Senator Ensign this is merely proof that “the liberal media” has paid insufficient attention to a matter “proving” the Great Conspiracy.

A recent segment on the Jon Stewart “Daily Show” illustrated the nature of Republican base information gathering and categorizing. When there were people protesting the singing of a song about the first African American President, the Fox network was reduced to showing a vacant street where the protesters had once been located; Stewart juxtaposed this with coverage by other networks of the gay rights march in Washington, D.C. The flap over the song was given short shrift by major broadcast networks but was featured more prominently in Fox's broadcasts. And there it is. Proof that the networks won't cover the 'real' news. In short, the emphasis placed by one sympathetic broadcaster becomes the standard by which all other coverage is measured. Quoting a former Secretary of Defense, for the base, the absence of evidence doesn't mean that evidence is absent. One only has to look in the one True place and all will be revealed.

And so it goes. Senator Ensign dodges questions about newsworthy investigations into his alleged violation of lobbying statutes while going to the floor to deliver remarks about a non-newsworthy digression into an already investigated manufactured moment of outrage deemed important by the one well-pruned source of received wisdom. The True Believers will be pleased, and the lack of media attention given to his extraneous remarks will be interpreted as merely one more example of how the papers aren't providing the Real Stories. Neither will be of any significant benefit to the Party.