Notes from the Left Coast

Drummond Pike’s Blog

The one thing certain about elected public servants in Washington is that they really, really want to stay there. Regardless of party, the incentives to continue to inhabit the corridors of political power are deep and abiding. The problem for most of them, though, is that they spend too much time walking those corridors and not enough listening to the folks that sent them there. The perks, the deference, the hushed conversations with lobbyists for huge financial interests — they all converge to create a moss-like insulation from the sentiments of the voters. And, surprise, surprise, the voters don’t like that.

Of course, there are those holding safe seats like Sen. Shelby from Alabama who can place a “hold” on every Administration appointment in order to force the Pentagon to alter its bidding specs for a huge new contract for those planes that fuel other planes in mid-air. Turns out his state (Alabama) hosts a partner of European giant Airbus that would assemble some parts of the plane and throw off a few local jobs. This, despite the fact that US manufacturer Boeing would, without Shelby’s tweaks, likely get the entire manufacturing job and employ thousands of American workers. His narrow interest may prevail, courtesy of outdated Senate traditions, as such “holds” are a function of the filibuster rule. Just makes you want to wonder if he is aware that we are in the middle of an economic crisis where sometimes narrow self-interest might yield to broader collective outcomes.

But what’s really frustrating is that issues that really matter to millions, and about which there is broad public opinion support, can’t seem to gain visibility. Take Comprehensive Immigration Reform. Polling suggests that 80% of the electorate supports an initiative that would require our millions of undocumented immigrants to register, pay taxes, and get on the path to citizenship. Even more support the Dream Act which would allow undocumented kids, most of whom have grown up in the US, to also get on the path to citizenship upon graduating from high school by either entering the military or college.

These initiatives are simply waiting to be brought forward for a vote. But even feel-good legislation that has meaning, like the Dream Act, has fallen into the trenches of partisan warfare where the minority party has decided that the best thing they can do is say no to everything. As dismaying as that tactic may be, it is effective in the context of the country’s current mood. But, for all those incumbents on both sides of the aisle who are just hankering to return to DC after this fall’s elections, be fair warned that doing nothing may do you in.

Increasingly, the remarkable possibility is being discussed where Republicans may again assert themselves as majority in one or both houses of Congress. One can be sure that getting things done in Washington will be as hard as it was after the same thing happened in 1994 with Gingrich’s ascension as House Speaker. One remembers his “Contract for America” not for what it accomplished legislatively, but for the toxic atmosphere it created in Washington that continues to this day.

There are rumblings that a huge march for Immigration Reform is being discussed for the spring. Will it remind the DC do-nothing-until-we-have-to folks, that “no” is not an option?

Do Unto Others As You Would Have Them Do Unto You

I was thinking a lot this past Sunday about my lapsed involvement in matters of faith. From a childhood and teenage engagement with the Episcopal Church, I came away with something that has guided my life since I can remember. It’s called the Golden Rule. Karen Armstrong – the marvelous soul who used her TED Prize to promote the Charter for Compassion – argues that all significant faiths on the planet have compassion at their core: my version went something like this, "Do Unto Others As You Would Have Them Do Unto You.”

For some odd, quirky reason I don’t quite understand, thinking about this basic tenet of moral behavior brought me to the most recent escapade of the Acorn Sting-meister, James O’Keefe, now awaiting arraignment on felony charges of conspiring to do something to Senator Mary Landrieu’s phones in a federal office building. Somehow, I think his parents, with whom the Judge has required him to live during the legal proceedings, failed Mr. O’Keefe in this most basic of moral instructions. How possibly could a faithful, moral conservative, as Mr. O’Keefe purports to be, engage in illegal and highly damaging acts intent on bringing down his perceived political opponents? I mean, have they no trust in the basic idea of democracy? Who would choose to have others do to them what Mr. O’Keefe is alleged to have done? Who would want, for any purpose, to be secretly taped without their knowledge? Not many, I’d wager.

I’ve supported Acorn for many years and in many ways. It is a good organization that has tried very hard to bring justice to poor communities. They haven’t done everything right, but I don’t think their foibles justify their fate at the hands of malevolent pranksters whose antics are now the subject of multiple inquires by prosecutors. Even so, it seems uncertain that the organization will ever again thrive as a voice for poor people in America.

It is clear to many that Mr. O’Keefe’s highly edited and illegally obtained videos have been the undoing of Acorn. It makes me sad beyond words to see how easily a dishonest kid of debatable morals with a video camera has been able to bring the rough-hewn organization, built out of the efforts of thousands of our most disenfranchised citizens, to its knees. And, Lord knows what his plans were for Senator Landrieu, a Democrat in a difficult state up for re-election this fall. One is thankful that, unlike in the Acorn case, the judicial system is already at work unraveling the conspiracy and holding the individuals accountable long before Fox News had an opportunity to promote even more fiction. I mean news. Uh, do they know the difference?

What I can say with assurance is that in the fascinating legal case that is about to begin, Mr. O’Keefe will be given what none of the objects of his efforts have been afforded – a fair chance to be heard without a presumption of guilt.

The Wall Street Journal reports that the effort to extend the current Estate Tax regime through next year has failed. As part of the Bush tax cuts, the exemption, above which taxes are due, has been slowly rising. The Conservative plan, put in place in 2001, phases out the tax entirely next year, and then, in the following year, reverts to the 2001 rates and much lower exemption. They couldn’t make it permanent then, as they wanted to do, because it simply cut too much revenue out of the equation, even for the then-dominant Republican leadership on both ends of Pennsylvania Avenue.

Beneath the din of the healthcare debate, and Joe Lieberman’s stunning profile in cowardice and betrayal of his constituency, the inexorable process of displacing taxes from the super-wealthy to the middle class continues its stealthy pace. It is stunning to me that in these particularly dire economic times, the progressive majority in both the House and Senate has squandered the opportunity to extend current year provisions into next year. Neither the House nor the Senate could muster the will to adopt the extension. Lieberman-type leadership at its best?

And the conservatives – wow, they are a whole other kettle of fish. Cynical beyond measure, they figure a bankrupt government is better than no government at all. (Remember that stellar statement by neo-conservative, Grover Norquist: “I don’t want to abolish government. I simply want to reduce it to the size where I can drag it into the bathroom and drown it in the bathtub.” So helpful in tough times.)

But this Estate Tax matter is really serious for the non-profit sector – not that you’d really understand that from the way many in philanthropy have used their considerable resources. The Council on Foundations, for instance, does support making permanent the current estate tax regime, though the matter shows up way down their list of public policy priorities, and one has rarely if ever heard the Council’s leadership making the case for the Estate Tax. Even with the more broadly-based, and often far more insightful, Independent Sector, this issue has not really achieved traction with the membership despite the best efforts of its leadership to remind us all of its importance.

Best estimates suggest that the sector will lose $25 billion each year, if the estate tax is abolished. The incentives for the creation of new foundations or the making of very large testamentary gifts to churches and non-profit organizations shift from financial to purely altruistic. In other words, without the tax deductions, people give less. And it means that if a billionaire expires during the next calendar year, she will pass down that entire fortune to her children or other beneficiaries intact. No taxes. No obligation to share with the society that enabled the accumulation of that fortune in the first place. As Bill Gates, Sr. has often commented, these huge fortunes are not easily assembled in other parts of the globe. The infrastructure, educational systems, regulated financial markets (okay, so we still have some work to do!), transportation systems, and everything else that contributes to the creation of successful businesses needs to be supported somehow, and the Estate Tax is a valuable tool for this.

Even more compelling to me, though, are the tragic social and economic consequences evolving from the advent of a new, permanent Upper Class. Declining family size almost ensures that fortunes of $100 million or more can become self-perpetuating fiefdoms in economic terms. In a manner similar to the nobility of the Middle Ages, who reigned over their lands with impunity through primogeniture (i.e. the oldest son gets the whole thing), the new economic elite will become sequestered and insulated from the broader society. Taxes on the income or realized gains from a large fortune will hardly dent its ability to be self-perpetuating. I just fail to see how this benefits society, this diverse and dynamic set of economic and social forces that has created so much in the world. In Kevin Phillips’ Wealth and Democracy, the author draws out the inextricable tie between social equity and the vibrancy of our democratic practice. The fact is inescapable – government must dampen the accumulation of “super-wealth”, and use the proceeds to create opportunity for “the many,” for, after all, the latter is what has always produced the best that America has achieved.

Among European progressives, there is a strong rallying cry for financial reform through the closing of tax havens. A French leader was just at the PES Congress podium decrying the loophole – perhaps in the EU? – that permits tax havens to escape more stringent regulation because there 12 of them and they have treaties with one another. If one has 12 such treaties, then you are somehow off the hook. I clearly need to learn more about this! It’s fascinating that progressives in the US aren’t more focused on this issue. This recent case with HSBC where the IRS finally has acquired access to a list of thousands of American holders of offshore accounts only addresses part of the problem and hardly serves to take the issue off the table.

It is an interesting thing, as I’m becoming more familiar with the issues before the PES Congress (http://www.pes.org/), to begin to understand the confusion European progressives seem to be experiencing in their failure to gain more traction with the voters even in this period of economic dislocation. It’s vaguely reminiscent of the confusion plaguing the Republicans these days – they are so certain they were right, they just can’t understand why folks don’t respond. Perhaps it’s just the natural swinging pendulum.

Just now, a French leader is decrying the failure of Europeans to address the financial crisis because of their ongoing failure to leave national agendas at the door and address the system as a whole. 

She’s then followed by the Finance Minister (I think) of Austria who argues that the financial crisis is not over because the stock market is rising – instead, the true measure is when the unemployment rate declines. He went on to push for an aggressive requirement that the financial industry be required to finance an insurance pool that will preclude the need for taxpayer funded bailouts in the future.

Next up is the head of the Czech Socialist Party who argues for a unified surveillance program or capability as well as the Tobin Tax (http://en.wikipedia.org/wiki/Tobin_tax) that has gotten a good deal of attention at this Congress.

Last, Javier Moreno Sánchez – Global Progressive Forum’s new leader – announced a new campaign for financial reform – get rid of toxic products, pass a Tobin-like Tax, and implement a regulatory regime; the campaign is called the Europe Campaign for Financial Reform. Unlike the US, where energy seems to be flagging to get these ideas in front of a Congress preoccupied with healthcare and other matters, Europe seems more prepared to address this thorny issue. Not the first time, I should think.

* * * *

As the PES Congress winds down, delegates slowly head for the trains or the airport. In a slowly emptying hall, a couple of fascinating speeches concluded the gathering.  The first, by a French leader whose name I didn’t catch, noted the absence of elected officials from the crowds. In part, he said, this reflected the electoral challenges experienced by social democrats and socialists in the recent EU elections. But in part, he argued, this resulted from the struggle of progressives to establish a clear identity. As with the first day, this sounded much like an echo from the post-2004 US experience.

Poul Nyrup Rasmussen then returned to conclude the proceedings. His remarkably personable way of communicating helped him accent the plan that gave rise to his runaway election to another term as President of the PES: grow the activist base of the Party from 20,000 to 50,000 by the next Congress, strengthen the structure of the organization, and run campaigns that clarify what progressives stand for: job growth, a green economy, and financial reforms. I conclude that we will see much more of this man over the coming years.

*  *  *  *

After lunch, I was sought out for a meeting with Javier Moreno Sánchez, the new Secretary General of the policy organization associated with the PES, the Global Progressive Forum, and several of his staff. Having delivered a speech in the morning, and otherwise been running ragged for the duration of the Congress, he looked tired but happy. His talk, referenced above, reflected his dominant policy interest – the passing of effective financial reforms for the EU. It turns out they had been hoping that Rob Johnson, my good friend who is now heading up a new program on economic policy with the Roosevelt Institute, would have been with us today to deliver a speech, but missed his plane. Needless to say, it would have been warmly received.

As we explored the ways the GPF and Tides might collaborate over the coming period, and there were many, I had the sense that this wild-haired idea of coming so far was indeed a stroke of good fortune for us both. Our nascent project to establish a presence in Europe will get a real jump-start as we build this relationship on the many topics of mutual interest: financial reform, immigration policy, Afghanistan, gender equity, and advancing the possibility of a green economy. The PES/GPF network is comprised of our European counterparts, and we should look forward to getting to know them over this next period.

As the only American attending this conference (so far as I could tell), I wondered if the boatloads of our colleagues, jostling one another for a glimpse of the official sessions as the meetings in Copenhagen commence, will be as fortunate. Somehow, I doubt it.

I’m an outsider attending the 1500 plus PES Congress in Prague (this is the European Union Party that collects progressives, labor, social democrats, and socialists from the various national parties throughout Europe). At yesterday’s preliminary session, I heard several familiar arguments, and some surprising ones.

First, Poul Nyrop Rasmussen, the President of the PES (roughly “Party of European Socialists” in several languages) talked with distain about the last election, not because the PES lost the election for the EU Parliament, but because “the sofa party” won. Turns out the “sofa party” was not a political acronym, but literally a sofa. Some 56% of the electorate did not vote. Sounds like America. One reason, it turns out, is that the social democrats and the more labor-oriented socialists in various countries split their votes between 2 candidates and thus muddied the message and lost the EU election.

While out of power, though, the PES seems to be borrowing from the US experience, circa 2004, in assembling a broad array of interests to create a clear political program built around three enets: creating green jobs through substantial public spending on Climate Change, a reinvestment in education and re-education of the workforce, and, in a fashion far more aggressive than current American proposals, reform of the financial markets. They are decidedly not anti-market, but want to manage markets with and through effective regulation – an idea far more acceptable on this side of the pond. Much of their thinking is embodied in a new book, shared with many at the conference, called The Next Left. Not exactly a quick read for the next plane trip, but effective and discursive as an intellectual framework worth examining.

Just now, Poul Nyrup Rasmussen was re-elected to the Presidency of the PES for another term. 320 some odd versus 6 votes. On the stage, he joked that it seemed like a “soviet era” election and then seriously took pains to see the election as a statement of trust in the program they are trying to build. He is part promoter, part cheerleader, and part strategic advisor. Watching the well-orchestrated Congress, and just beginning to understand the implications for Europe that a revitalized PES might mean, I come away impressed with the prospects they have to shift leftward the political winds in Europe. What I’m curious about is just how they will build a relationship to the work of the Green Parties – a smaller, but effective pan-European party that concentrates its efforts on environmental issues.

XM Radio launched a channel last year called P.O.T.U.S – all about politics all the time. It’s sort of a C-SPAN with analysis – from both sides, I should hasten to say. Like C-SPAN they cover complete speeches and events unlike the conventional media. I’ve enjoyed the channel a great deal over the past cycle, in part because it provides content from both sides and hearing the primary material is always fascinating.

Yesterday, they covered a gathering of conservatives at, I think, the “Values Voters Summit.” The segment I listened to had a series of short statements from participants about what they were concerned about politically at present. Among the most fascinating was an articulate woman with a slight Midwestern accent of the sort you hear in Michigan. Her concern, passionately stated, was that the government was taking over the private sector and now owned 30% of corporate profits and wanted more. This is a stunning interpretation of the tightrope act performed by Treasury and the FED over the past two years, years that bridged both the Bush and Obama administrations I should note.

The bailouts, as the infusions of capital into the banking, automotive, and financial sectors are called, were desperate moves that may or may not work according to many. But there was pretty much universal agreement that the absence of these actions would likely have made for an even more severe recession or even depression. That the conservative right now appears to be recasting this as an intentional intrusion into the private sector by an avaricious government is truly remarkable.

This reminds me of the similarly amazing assertion, now marching steadily through the wing-nut blogosphere, that those who worked for the Community Reinvestment Act and groups that decried predatory lending over the past decade were actually the cause of the financial meltdown. It’s truly a stunning conclusion to draw in the months following the largest federal bailout of Wall Street ever. Everyone, with the possible exceptions of Fox News and Lou Dobbs, realizes that the meltdown was caused by greedy financial cowboys who, unregulated as they were, simply rode roughshod over reason, pocketed the fees and commissions to the detriment to the poor people duped by unscrupulous lenders, and then left the rest of us with the joyous task of rescuing the system from bankruptcy with our tax dollars.

A second speaker at this conservative function railed about the recent legislation passed in the House ending federal subsidies to private banks for originating student loans. In a move that will save some $87 billion, the bill shifts student lending to a direct system and would utilize some of the savings to increase federal grants to low income students to help them complete school. The speaker believed this was precisely what the healthcare reforms were designed to do – create a public option that would put the private sector out of business. What he failed to do was account for the failure of private banks in providing the needed service. Some 180 banks exited the field over recent years, and those that remained were challenged to sell the repackaged loans into the private markets.

What the right seems to miss over and over again is that the private sector can’t do it all. And, sometimes, they do it so poorly that it costs us all a whole lot more than a simpler, well-managed public system. No one ever suggests that police or fire protection should be privatized. Or do they??

In the rain, running through DC
VP sirens-blaring events of past years
Only rarely echo along Mass Ave,

Then, right around the Finnish, then the Belgian, Embassy,
across the Connecticut Ave sky bridge,
veering into the Embassy conclave covering
the escarpment above the Rock Creek,

So, Joe has replaced Cheney,
And….
what does it mean?

fewer sirens,
less torture.

My Country, ’tis of thee….

A week ago, I attended the Global Progressive Forum, organized by Poul Ryup Rasmussen, former Prime Minister of Denmark and held in the Parliamentary hall of the European Union – an amazing space for such an event. It is called the Hemicycle and is a large oval space surrounded by 3 floors of “sky booths” containing the translators who were borrowed from the EU for the purposes of this two-day session. For an American, at least of my generation, it is with some embarrassment that I watched many of the representatives from various African, South American, Asian, and European countries in a facile way move between languages depending on who their audience happened to be. Me, I was consigned to grabbing the earphones whenever the speakers departed from English. (I’m happy to say that both of my children have avoided the mono-linguistic shortcomings of their father…)

A second, equally simple, observation at the GPF was the comfort that virtually the entire rest of the planet has with the idea of socialism and, perhaps more to the point, social democratic systems where the state plays a far more important role ensuring the social welfare of all its citizens and workers. America’s often outright hostility and deep skepticism of the role of government – not to mention the idea that government can be as well run an enterprise as any private organization of similar scale – has confused me for years. After all, my parents generation benefitted from the astonishingly successful governmental intervention in both the domestic economy and in international relations with more success than any other period in modern history. Government was the answer to the Depression and to the rise of fascism across the globe. No private enterprise could have achieved either outcome, much less had the foresight that was the Marshall Plan and the reconstruction of Japan and Korea. Yes, and the same generation was on duty when Vietnam happened and the Cold War flourished, but as a whole, there were an awful lot of good things about that era, and one has to think we may well be headed into a similar time. Lord knows, there are as many compelling challenges on the table.

May we live in interesting times.

The Chronicle on Philanthropy reports on their website this week that the leaders of the Council on Foundations and Independent Sector have come out publicly in opposition to the President’s budget proposal that proposes in 2011 to reduce the tax savings on charitable gifts from top rate-payers’ current 35% to 28%, the lower rate of taxation paid by the vast majority of taxpayers. The example is often given for the high income donor giving $100,000 to a charity of her or his choice; under current law, the donor would save $35,000 in taxes, and in the future regime, this would be reduced to $28,000 for the same gift. The argument of our colleagues in philanthropy is that this will lead to a reduction in charitable giving, though I haven’t seen a study that supports this empirically. If true, I suspect the influence would be most likely marginal; market changes are far more of an influence on charitable giving practices. And, to be sure, no one is suggesting a change in the most important factor: the avoidance of capital gains when gifts are made of appreciated stock.

Let’s look at the other side of the equation. What’s so wrong about doing this? Let me start with the matter of basic equity. Why should two taxpayers, both giving the same $10,000 gift to the same charity, receive differing tax benefits because one earns more money than the other (and therefore pays a higher tax rate)? In some ways, the lower-earning individual is giving away more value relative to net income (and likely net worth as well).

Second, let’s look at just what this proposal is intended to help – the creation of a program for universal health coverage in America. This would address a profound social tragedy, and the deep shadow of embarrassment in which the US lives internationally, if we could achieve it. Wouldn’t it make sense if the philanthropic sector, contrary to expectation, embraced this policy initiative and asked, instead, “how can we help?” Perhaps sacrificing a bit of the privilege we experience, living outside the realm of the taxable economy as we do, in order to contribute to the final outcome would connect us to the deeper social good. After all, aren’t we really supposed to be about the public good?

Let’s instead support the proposal. If it succeeds, 45 million Americans will, for the first time, have access to health care – something that all our grants for many years could never finance.

Also of interest:

hr676.org:

According to news reports and analysis the Bush Administration believes it reasonable for the people’s employees in the Executive branch to be permanently exempt from having to testify before the people’s representatives about their activities while in office….even long after they have departed the government. The matter at hand has to do with Harriett Miers and Karl Rove and the Congressional inquiry into the famous firings of US Attorneys who failed what is largely understood to be a test of partisanship. That US Attorneys are supposed to be above the partisan fray in upholding federal law would hardly seem controversial, but for the past 8 years, we’ve seen the most severe challenges to this idea one can recall.This is a matter where I think the progressive community must speak up. It is not clear that the Obama White House, so clearly wanting to “look forward,” will want to see John Conyers and others pursue these matters. But there is such an important principle at stake – the fundamental balance of powers. If members of the Executive Branch cannot be held to account, especially after any vulnerability to executive action has ceased with advent of a new administration, we might indeed end up with the “imperial presidency” as some characterized the Bush/Cheney regime.We should watch for the outcome of the US Court of Appeals case involving Harriett Meirs and Josh Bolton on the US Attorney’s firing inquiry in the House. They have asserted this “absolute” privilege and the new Administration will have to present their position on privilege at this early moment in their tenure. Something worth speaking up on, that’s for sure.