Sunday, April 30, 2017

Listen: why tax reform won't be any easier than Obamacare repeal.

Right now, Republicans are still far away from repealing and replacing Obamacare.  Efforts to finally -- perhaps, maybe, possibly -- pass a bill in just the House seem to have stalled for a second time... an embarrassment that's further exacerbated by the brutal reality that the proposed bill stands no chance in the Senate and seems to be taking unexpected public criticism from the president.  And so the administration is eager to move on to tax reform, seemingly out of the expectation that it will be easier.  This is wrong.  Not, it's not even wrong... it's hilariously out of touch with reality.

Let's start with some of the rules that are going to apply to any reform deal.  There are two possibilities:

  • A reconciliation bill: Not subject to filibuster in the Senate, this bill would need to be revenue-neutral after ten years.  It can pile debt onto the deficit for any period less than ten years, but not beyond.
  • A bipartisan bill: This sort of bill would require cooperation from at least some Democrats in the Senate, and it would not be subject to any limits in terms of debt or scope.

The problem for Republicans, of course, is that they really, really want to pass tax cuts for the rich and corporations, but that is not a very popular thing to do.  Even less popular would be a plan that raises taxes on the poor and middle-class to pay for those tax cuts.  So where do you get the money to pay for those cuts?

Well, Republican Budget Myth #1 holds that you can just eliminate "waste" and "fraud" from the government, slashing it drastically.  If you're spending less, you don't need as much money.  Presto!  That extra can be used for tax cuts!

But here in reality, we know that this is crazy.  The discretionary budget is less than a third of the entire budget.  You could cut the whole thing -- every department in the government! -- and you'd barely manage to pay for half of Trump's proposed cuts (as we understand them right now).  And since the president has promised not to touch Medicare, Medicaid, or Social Security, and has promised to increase the military budget, there's nowhere left to go.

When confronted with these numbers, the frequent reply is Republican Budget Myth #2: tax cuts pay for themselves.  By allowing businesses to invest in workers and expansion, the idea goes, we can increase the tax base.  More economic activity means more tax collected, even if the rates are lower, and everyone is better off.  Presto!

But again, here in reality, we know that this is bunk.  We know because it's been tried over and over again.  Most recently, they tried it in Kansas, where Governor Brownback proclaimed a "conservative experiment."  It's an experiment that has failed in spectacular fashion.  On a national level, the Bush tax cuts coincided with a slight increase in GDP borne on the back of a real estate and financial bubble.

Confronted with the hard numbers, then, the Republicans are in a bit of a bind.  They aren't going to be able to get a bunch of Democrats to vote for a tax cut for the wealthy that's just piled on to the deficit, especially not when rank-and-file Democrats loathe the idea of helping this president.  But if they don't get any Democratic votes, then they can't pass anything that will increase the national debt after ten years -- deficit-funded tax cuts included.

These broad outlines are further complicated by the fact that Trump has opposed a border-adjustment tax (a special sort of tax, based on where things are sold) that the Congressional leadership hopes will help pay for the tax cuts.  And since neither Trump's plan nor the current House plan are anything more than a broad outline, it seems likely that they're struggling with the same difficult realities that have made healthcare reform so difficult.

I predicted, months ago, that Obamacare would be fine -- either de jure or de facto.  That has proven to be true.  I predicted more than a month ago that Trump would find that his best avenue for immediate action would be flashy but insubstantial executive action.  That has proven to be true.

Believe me now when I say that Republicans will find it extremely difficult to solve their own internal differences, much less actually pass any sort of tax reform.  If you had any fear of the GOP passing some sweeping remake of the American system of taxation that just glides right through, you can lay aside your fear.  This is going to be painful for them, and they might have to settle for more temporary tax cuts, passed by reconciliation, rather than achieving any lasting change.

Read: what impact has Trump had over his first hundred days?

The general upshot is that Trump has had the most impact with selection of personnel (Gorsuch, Cabinet members, etc), rollback of environmental and labor regulations, curtailing of illegal immigration, and in a general erosion of norms.  If you want more depth, the New York Times and FiveThirtyEight have good roundups of the Trump presidency so far, giving us the 20,000-foot view on everything:

More narrowly, a Politico article points out something I've been shouting for months:  "Trump’s Executive Orders Are Mostly Theater" (by Michael Grunwald).  Thanks to our strong institutions, which have resisted many of Trump's excesses, the flurry of executive orders have had very little impact.  They command staffers to examine things, form commissions, and so on.
... Trump’s high-profile orders have not actually undone Obama’s health reforms, financial regulations, or carbon restrictions. They’ve merely allowed him to announce his intentions to undo those policies in official documents. Trump’s first 30 executive orders will create a lot of federal reviews and reports, along with some new task forces and commissions, but not a lot of substantive change. So far, they’ve been more about messaging than governing, proclaiming his priorities without really advancing his priorities.
Politico also has a fun article about numbers: "President Trump's First Hundred Days, by the Numbers," by Nolan McCaskill and Louis Nelson.  Highlights include: nineteen days of golf, thirty-one days spent at a Trump property (almost a third!)... and zero major legislative victories.

And finally, the Washington Post has an article ("After a Tumultuous Start, Trump Hopes for a Smoother Agenda on Jobs and Taxes," by Abby Phillip and Ed O'Keefe) about how the president will be adjusting his strategy moving forward.  Purportedly, they're going to be moving forward more carefully:
Humbled by their failure on health care, White House aides say they have taken a lesson from the experience and plan to take the lead on the tax-reform effort — including a Trump-led push to build public and stakeholder support for a plan. The bill will be guided by the principles laid out Wednesday in a single-page document that outlined the president’s plan to slash rates and consolidate tax brackets for most taxpayers, aides said.
Everything in reality seems to belie this spin, however.  After all, that single-page document was itself the hasty and rushed result of a surprise announcement by a mercurial leader -- and it indicates that the administration has not yet tackled any of the serious issues of tax reform.  Given the continued difficulties with repealing Obamacare, it seems to be outright hubris for the Trump administration to think that tax reform will be easier.

In other words, they don't really seem to have learned exactly the limits of their own knowledge.  And since that's the most important lesson of all, it's hard to see how they're going to be more successful in the future.

Tuesday, April 25, 2017

Listen: diversity makes for better decisions.

The liberal penchant for diversity is not an act of charity.  It is good and just, of course -- don't get me wrong.  But it's not only morally right to choose diverse representatives and listen to diverse voices: it's also practical.  Those who look through only one window have a very narrow view of the world... and a hard time steering.  The Trump administration, which has little diversity, is risking a great deal by restricting their vision so tightly.  They should reconsider -- not for charity, but for their own benefit.

I'm not sure why this idea seems to get so little mention. Even those journalists or activists who push for more inclusion in government or business often skip right past this fundamental notion.  For instance, a few months ago in the Washington Post, David Nakamura and Abby Phillip wrote about the lack of diversity in Trump's Cabinet.  It's admittedly a story about optics -- about how terrible it looks to issue executive orders about women's health in front of a group of exclusively men -- but the article presents the dangers of a Cabinet dominated by old straight white guys as though it were purely a question of appearances or politics.  The fact that it is also just dumb to have a single perspective is only dropped as an allusion to "worldview."
But if the images from the White House aim to show a man of action, they also have delivered another unspoken message in the early days of the new administration: Most of the aides Trump relies on for counsel as he moves to dramatically reshape the country are men — and nearly all of them are white.
It’s a sharp change from the past eight years of the barrier-breaking Obama administration, and one that has reinforced the feeling among Trump’s critics that a narrow, anachronistic worldview is driving an agenda they consider hostile to women and minorities.
“Where are the women?” Rep. Carolyn B. Maloney (D-N.Y.) asked rhetorically on the House floor last week, holding up a photo of Trump flanked by seven male advisers in the Oval Office a day after he signed an order restricting federal funds for abortions in foreign countries.
It's possible that the authors and many readers don't need this mentioned or discussed, but that's not my experience.  For many years, I've heard folks say that staffing like this "looks bad" or "isn't fair" or "doesn't represent the country."  But that's not the real issue.

The real issue is that it is important and useful to listen to the input of people from a variety of backgrounds because they have unique experiences and views, and anyone who fails to take advantage of that fundamental American strength is making a sub-optimal decision.  Excluding people of different backgrounds imposes a kind of ideological tunnel vision: yes, you might be able to get a clear and far-sighted view, and might even get good outcomes, but you're also likely to miss a lot of opportunities and solutions that you never even saw.

Further, many of our problems in America derive from sharp discrepancies among our citizens.  Issues in poverty, healthcare, justice, trade, and other problems are all dominated by sharp group conflict (indeed, that almost sounds like a tautology).  One of the best ways to address many of these issues are to break down some of the power structures that artificially perpetuate differences in class, culture, wealth, etc.  Some decent research has shown that people from elite backgrounds do not significantly benefit from elite educations; there's little difference in outcome for them over the years.  But people from more diverse backgrounds, either in terms of class or other aspects of their life, are much more likely to attain a higher income if they go to a more selective school.  Presumably this is linked to their new connections, opportunities, and resources -- advantages their privileged peers already enjoyed.

In other words, demanding diversity in government and business isn't just good for minorities.  It's not even just good for the government and those businesses.  It's actually good for our country as a whole.

I admit that this view is not universal, of course.  There are disagreements from both sides.

For example, some on the right point out a different sort of strength lies in homogeneity.  This is also true.  One of the keys to the success of communities in Scandinavia (or Utah, for that matter) lies in the fact that they have very little diversity.  Fewer schisms along the lines of religion or ethnicity means that it's that much easier for people to focus on other problems (such as social mobility).

The National Review's Kevin Williamson argues, for instance, that Scandinavian countries were (until recently) extremely homogeneous in various ways, in addition to remarkably xenophobic:
Progressives have a longstanding love affair with the nations of northern Europe, which are, or in some cases were until the day before yesterday, ethnically homogeneous, overwhelmingly white, hostile to immigration, nationalistic, and frankly racist in much of their domestic policy.
He then implicitly traces much of the strength of the Scandinavian model (to the extent they admit of any praise for the model at all) to a sort of blunt nationalism that eagerly welcomed immigrants to work in fish factories, but attempted to deny them any political power -- and he extrapolates this temporary strength to current problems when they refer to the dangers of an "unassimilated Muslim minority" burning Stockholm.  This argument is swallowed by a larger one which suggests that the welfare-state policies of Scandinavia are inherently violent and exclusionary when they deny individual freedom.

More directly, the same author extends the argument in "Homogeneity Is Their Strength" to say more plainly that diversity is a weakness:
Progressives who dream of a Nordic-style welfare state will find themselves challenged by the costs of greater diversity, as will those of us who hope, perhaps naïvely, for a politics and a culture that is more humane and individualistic, and less regimented along racial lines. We’ve been told that diversity is our strength, but the unhappy truth may be something closer to the opposite.
Williamson invokes some evolutionary biology in a Just-So Story sort of way, as well as social science, to argue that altruism and cooperation are more likely to occur in homogeneous populations, making a diverse culture less effective in providing consensus on difficult questions that would underlie any working solution for various social ills.  "[W]e are less inclined to trust and share with people who are less like us," he writes.
Up until quite recently, and with the critical exception of the situation of African-Americans, we handled our diversity with the best tools there are: localism, federalism, equality under the law, integration, participation in civil society. But the aggrandizement of the public sector has diminished civil society, multiculturalism has hobbled integration, the centralization of power in Washington has undermined federalism, and the grievance industry chips away at the idea of equality under the law.
He suggests that the diminishing expectation for immigrants to assimilate will lead to "ethnic enclaves" that threaten American unity, and draws a comparison with political partisanship, saying that the increasing level of extremism and disagreement between political groups has made practical solutions increasingly less likely.

I would suggest that this take is, at best, ahistorical.  Irish, German, and Chinese immigrants -- to pick only three -- all arrived en masse in waves, retained their individual cultures without assimilating over the course of generations, and endured discrimination and hardship.  The example of African-Americans held in chattel slavery certainly stands alone as our nation's original sin, but only a few moments of research reveals that ethnic enclaves and regional cultures have been frequent in American history.  Indeed, I would even argue that this history shows the practical value of bringing in the huddled masses yearning to breathe free.

Folks on the left can also disagree.  Kẏra at Model View Culture, for example, suggests in one essay that promoting minority power should be an end unto itself, rather than sought for its practical benefits.  She argues that the latter goal ends with the continued control and oppression of minority groups, since it preserves the existing hierarchy and diverts energy and attention from promoting actual minority power.
So why do so many people seeking racial justice, female empowerment, and queer liberation still choose to advocate for “diversity” and “inclusion”? They appeal to liberalism. They prevent oppression from being named. They prevent us from speaking truth to power. They make progress sound friendly to those in power. Companies can tokenize women and people of color throughout their advertising. They can get way more credit than they deserve for being not 100% white men. They can profit from the increases in efficiency and productivity associated with more diversity. All of the above ignore the fact that companies needed to have diversity initiatives to make them less overwhelmingly white in the first place; that white people are the ones in the position of being able to grant access in the first place. When we work for justice and liberation, we can’t accept progress that is conditional on being economically beneficial.
But this view presents a strawman argument: that liberals are satisfied with representation and inclusion of minorities and do not further seek to put actual power in the hands of minorities, as well.  And reality bears out the current approach, as well: as minority groups have found power within organizations, they have been able to expand their own opportunities and those of their peers to acquire power as leaders or owners.  For example, the number of African-American-owned businesses has increased by 30% over the past 20 years -- more than four times faster than among the larger population.  The current total is nowhere near good enough, but it's hard to imagine it happening without an effort working towards diversity and inclusion (much less in spite of those efforts).

Despite all of these reasons, I suppose it should still be said that the color of someone's skin doesn't dictate the content of their character, and so, it might be hypothetically possible to find a group of unbelievably qualified elderly heterosexual Caucasian males who would strive to understand and advocate for the concerns and values of all of America's many diverse groups.  I can't say that's impossible.  And in that situation, we might only be talking about the moral necessity of promoting the visibility of subgroup leadership or the fairness of direct-group representation.

But we're not talking about this dream team.  We're talking about corporate leaders, military officials, alt-right ideologues, family members, and Wisconsin politicos.  These groups don't all agree on everything, sure -- sometimes the Goldman Sachs people push back against the Breitbarters -- but the lack of diversity and emphasis on loyalty means that this White House is vulnerable to groupthink.  They have a narrow focus and a limited scope on their experiences.

For example, there doesn't appear to be anyone in the West Wing who's worked a union job (including the Secretary of Labor, Alexander Acosta, who would incidentally be the only Hispanic in the Cabinet).  There are no scientists (unless we count civil engineer Rex Tillerson or physician Tom Price, which might be fair?).  I mean, there's always a lot of lawyers, but there are just very few life experiences represented in this government.  In discussions of the value of organized labor, there's not going to be a lot of voices.  In discussions of the use of scientific grant money, no one will speak up for its utility.  That's a serious weakness, and I believe it accounts for some of the poor decisions they've made and will continue to make.

Diversity and inclusion is not just a moral imperative, it's a practical strength and a proud American tradition.

Wednesday, April 19, 2017

Listen: GA-06

Yesterday was a special election in Georgia to replace Health and Human Services Secretary Tom Price.  The leading Democrat (almost the only Democrat), Jon Ossoff, came just shy of the 50% he needed to win the seat and avoid a runoff election.  So that means he will face the second-place finisher, Karen Handel, in a June runoff. What is the national significance of these results, and do they tell us anything?

We touched on this topic last week, after the Kansas and California special elections, and I wrote:
For months now, the president's polling has been slowly dropping.  He had a brief high point, as aggregated by 538, of 48% approval and 43% disapproval.  Since then, he has sagged to 42% approve and 53% disapprove.  Moreover, his chaotic leadership and the utterly bankrupt Republican policies have left his entire party scrambling to achieve some scraps of their promised policies.  Obamacare remains intact and healthy, tax reform is being pushed back to August (still optimistically!), and there's no movement on trade at all.
Yes, the Republican is going to win, but this should have been a cakewalk.  It was a fight.  Two is the start of a trend, and this is the sort of data point that no one can ignore.  Both of these elections swung twenty points to the left, compared with 2016.
No individual special election means much.  The question should be: did the trend hold?

The answer is that yes, it did, essentially.  When compared to the 2016 presidential race, Ossoff actually lost a few points from Hillary Clinton's total, but the more predictive comparison is with the generic Republican lean of the seat.  And there, we can say that the combined Democratic vote versus the combined Republican vote points to a swing of nine points to the Democrats.  For the significance of that, I can do no better than to quote Harry Enten of 538:
The Republican +2 aggregate margin in Georgia 6 implies a national environment in which Democrats are competitive in a bunch of GOP-held House seats in 2018. According to the weighted average of the past two presidential elections, there are 48 House districts that were won by GOP candidates in 2016 that are redder than Georgia 6. The district’s Round 1 results suggest Republicans could lose a good portion of those 48 seats. And Democrats need to win just 24 Republican-held seats for control of the House.
That’s clearly a good sign for Democrats.
Of course, the national political environment could change between now and November 2018. Moreover, the Georgia 6 result isn’t anywhere near as strong for Democrats as last week’s result in the special election in Kansas’s 4th Congressional District. The Georgia 6 Democrats outperformed the weighted average by 7.5 percentage points. In Kansas 4, Democrat James Thompson beat it by 22 points.
Still, that’s the difference between a good Democratic year in 2018, with the House in play, and a crazily, ridiculously good Democratic year, with the House a foregone conclusion to flip to Democratic control. (Again, that’s if the national political winds don’t shift between now and then — an unlikely proposition.)
The truth is we need a larger sample size of special election results before understanding what Kansas 4 and Georgia 6 tell us about the midterms.

So there we are.  A good sign for the future, but ultimately it's just one very early data point.

Monday, April 17, 2017

Listen: Trump's approval and reversion to the mean.

Trump's numbers will probably rebound somewhat, and you shouldn't be surprised when they do.

In statistics, there's a phenomenon known as reversion (or regression) to the mean.  The principle is simple: generally speaking and absent any continuous trend, any extreme metric will tend to become less extreme.  Another way of putting this is that there's a sort of center of gravity for most statistics, and they tend to drift towards that point over time.

To put this more concretely, imagine a tenth-grade teacher who has been working for ten years.  On average, that teacher's students tend to score slightly above average on the SAT.  If this teacher has a year when their students do exceptionally well, through whatever quirk of luck or fate, then it is likely that this teacher's students will return back to the average the next year.

I know it sounds very obvious when phrased that way, but it's an idea that it's easy to forget and hard to implement.  Take the recent United Airlines controversy.  You probably are familiar with it -- the New York Times summarizes it thus: "The video of Dr. David Dao, 69, of Kentucky, being bloodied as he was pulled off the flight in order to make room for four United employees has ignited conversation and outrage around the world."

Now, you'd be right to guess that this had an impact on the stock price for the company.  United shares plummeted the day of the incident, dropping from $72 a share to $67 a share.  Then it stayed around this level, dropping down a bit more to $65 within a few days.  It was tempting for people to write about how the incident had lowered the value of the company by $1.4 billion (the drop in price multiplied by number of shares, roughly).  But this was exactly the moment to look at the long-term average share price.  While technically true that the company had suffered a pretty severe hit, was it really likely that the price would stay at this point for the long term?

The long-term average for the company had hovered a bit above $70 a share since last year, and this is presumably driven by larger market forces such as labor, cost of fuel, etc.  Without a change in any of these essentials, and given the extremity of the drop, then, we should expect a reversion to the mean.  And sure enough, the fundamentals being basically the same, the price has now rebounded almost all the way back to where it was: $70 a share.

So what does this have to do with politics?  Well, this tendency of different sorts of trends dictates that extreme swings will tend to revert back to the mean in the long-term.  And in politics, partisanship is the average tendency of today's Americans.

President Trump started out his presidency with an aggregate approval/disapproval rating of 47.8%/42.5% at his high point, according to 538.  Considering he got 46% of the popular vote, that makes sense -- but it's actually a little unusual, since most presidents begin with approval ratings that extend past their own voters.  Obama's approval rating when he began, for instance, was 78%.  There's a widespread respect for the process and for democracy that combines with the very visible "fresh start" dynamic of a new presidency to boost the new chief executive during their "honeymoon" period.

Within two weeks, however, these numbers plunged to 44.8%/44.7%.  And by the end of the first month, Trump's aggregate approval/disapproval was 50.6%/44.1%.  And after two months, he was sitting at 53.6%/40.6%.

Of course, it's not unusual for presidents to experience a steady decline in support.  This is "political gravity" -- some voters become disillusioned by inevitable realities at the same time that the ineluctable hiccups of any major government erode the good-will of marginal supporters.

But political gravity usually takes time to assert itself.  Obama hovered around 60% approval for about 135 days, Bush stayed at 55% approval for about the same amount of time, and Clinton lurched erratically around between 50-60% for his first 110 days.

Trump's slumping poll numbers have been unusually terrible.  Presumably this is a reflection of his dramatic reversals on a host of key campaign promises, a demonstrable lack of results for many of the others, and a public and crushing failure on his first major legislative initiative.  And of course, it doesn't help that he began with historically low numbers -- he didn't have much of a cushion of soft support to lose, since he actively antagonized the press and soft Democrats.   But if we take a step back, we have to remember that not much time has passed.  It might seem like years, but he's only been president for 88 days.  And his most ardent supporters, just like the overt partisans in every presidency, have kept he faith.

As far as I see it, then, the bottom line is this: the partisan reflex and cognitive dissonance in Trump's initial supporters is strong enough to suggest that his numbers will bounce back a little.  Particularly at a time when he's taking highly visible and Extremely Presidential actions such as bombing the Middle East (a perennial favorite past-time of American presidents), there's a lot of potential for President Trump to bolster his support among marginal supporters and the disillusioned.  His current levels of support are at extreme lows for this time in a presidency, and so we should expect some reversion to the mean of partisanship -- particularly when he still has some cards to play.

So when Trump's approval rating increases somewhat, don't be surprised or dismayed.  We should expect it and plan for it, and none of the underlying dynamics are likely to change.

Wednesday, April 12, 2017

Listen: the apparent GOP plan and the actual reality.

As best we can tell from all public and leaked statements, the GOP plan for legislation this year was a pretty simple one.  At this stage, it's worth revisiting -- and comparing with reality.

Bear in mind that while there were numerous priorities and ideas, the Republicans coalesced around a few important ones -- some supported by the president and some supported by his party.  They wanted to repeal Obamacare, they wanted to permanently cut taxes for the rich and reform the system, and they wanted to pass an infrastructure bill.

Importantly, however, they would not be able to do these things in any order.  Thanks to legislative rules, financial reasons, and political issues, they were locked into a pretty set order.

Stage One: Obamacare Repeal

Obamacare has significantly slowed the rise of healthcare costs and given a lot more people healthcare.  It achieved these gains not only by subsidizing insurance for the sick and poor.  But since the law was also (astonishingly) revenue-neutral, it had to find that extra money somewhere.  Efficiency and cleverness got them halfway, but the law also instituted new taxes on the wealthy.

In other words, there's a big pile of money locked into Obamacare.  If you repeal most of it, you can get rid of the taxes on the wealthy and the coverage for the poor, and still keep some of the extra money.  Even better, in Republicans' view, would be to further cut the coverage for the poor.  That's even more money you get to keep, plus you get rid of Obamacare!

Further, if you're going to rely exclusively on Republican votes, then Obamacare might be the only way you can get a big pile of money like that.  The special Senate reconciliation rules allow the GOP to pass all kinds of money-related bills with only their 52 senators (avoiding a Democratic filibuster), but they can't pass anything that increases the deficit.

So if the Republicans wanted a big pile of money to spend on anything they'd like, but didn't want to compromise at all, Obamacare was the place to go.

But what bill are you going to pass?

The initial plan was to just repeal Obamacare now and replace it later, but it soon became obvious that this was politically untenable.  Insurers would be outraged and people would be scared.  So they needed a plan.

While candidate Trump swore he had a great plan tucked away in his back pocket, it was obviously a lie.  Indeed, it was so transparent that Marco Rubio publicly mocked the future president for his ignorance during a debate.  (This was, of course, before the brutal Chris Christie takedown of Rubio in a later debate).  But it was not impossible that Trump could simply adopt the plan of a different person or group.  Most of his draft budget was copied from the conservative Heritage Foundation's budget, for example.  So most people expected that the new president would have some plans -- or at least some basic priorities -- that he would demand be included in the GOP bill.

But he didn't.  President Trump didn't appear to actually care about the details -- he just sort of trusted that the famous Speaker Paul Ryan, the noted wonk and legislator, would come up with a plan that would (a) make healthcare better somehow, (b) pass the House and Senate, (c) deliver that big pile of money.

In the original plans, they wanted to get this done by "late February or early March."

Stage Two: Tax Reform

The next thing would be tax reform.  Having already freed up a big pile of money by hurting the poor, they could now spend it on the rich.

Tax reform is different than tax cuts.  Republicans already tried passing ten-year temporary tax cuts during the Bush years -- you'll remember what a massive surge in growth those cuts produced, right? -- and weren't satisfied with a repeat.  They weren't even satisfied with the idea of permanent tax cuts.  They wanted to reform the whole system by reducing the number of tax brackets.  Right now, there are seven.  As you make more money, each dollar you make over certain amounts is taxed by an increasing amount.  This is a progressive system, since it tries to distribute the burden of taxation fairly.  $1,000 means a lot more to someone making $40,000 a year than someone making $400,000 a year, after all!  Republicans want to eliminate some of those tax brackets, lumping people together into fewer groups.  Not coincidentally, this would also give a massive tax cut to the very wealthy.

Now, tax reform would be incredibly difficult -- more difficult than healthcare reform, in fact.  It would be even more difficult to pass tax reform with only Republican votes through the reconciliation process.  But if you have a giant pile of money on hand, the process is a lot easier.

If worse came to worse and they couldn't get tax reform done, they could always shelve it for the future and pass some permanent tax cuts instead.  Just shovel that giant pile of money towards the wealthy -- not ideal, but still pretty great for Republicans.

As originally planned, they wanted to get this passed and signed by August.

Stage Three: Infrastructure

From here, the plan was a little less-defined.  That was by design, since the president and Congressional leaders only agree on Stages One and Two.  Trump wants a "trillion dollar infrastructure bill," but (naturally) hasn't offered a whole lot of specifics.  This might only require a moderate amount of new funding, since a substantial sum could be offered as loans to states and municipalities, but there's still the question of the source of that funding.  Do you tack hundreds of millions onto the national debt?  Republicans hate that idea.  Do you pass some new taxes (like a border tax) to pay for the plan?  Republicans hate that idea.

There is one optimistic scenario where this is easy: the Trump administration's removal of regulations and the Stage Two tax reform have magically sped up the economy.  We've been bouncing up and down around 2% growth since the Great Recession -- fairly steady and uneventfully mediocre.  But Trump has promised to double GDP growth, vowing to return the economy to 4% growth.  I'm not going to go into all the reasons why this is probably not going to happen, but suffice to say that it's very unlikely.  (If it does happen, that will be amazing and will force a lot of people like myself to re-evaluate our prior beliefs).

But these were problems for a later date, Congressional Republicans figured.

The Problems

Let's return to the present.  As you know, Stage One never materialized.  Stage One never even really got started, in fact, because Paul Ryan is not actually that good at legislating.  He produced the American Health Care Act.  And the rest is history: it crashed and burned spectacularly.

So there's no big pile of money, which makes Stage Two really hard.  And even worse, it's becoming clear that Republicans are going to have a hard time finding the votes for many things.  Stage Two was going to be hard under any circumstances, but in a scenario where they can't use Obamacare funds and where they can't even count on their own party's votes...

Where do they go from here?

No one seems quite sure what to do next, honestly.  Discussions are ongoing on a few different fronts, but it would be hard to point to any major bills that are under discussion.  And while Trump originally said he would insist on abandoning healthcare reform, a couple of days ago someone must have explained all of this to him, since now he's asking Congress to get back to work on healthcare.  It's chaos, and there's no sign it's getting better.

I don't know what they're going to do next.  It bears repeating that Stage One makes Stage Two a lot easier, and Stage Three is something even Republicans don't agree on.  So that does indeed suggest that they might want to buckle back down on healthcare.  But having just hideously lost a very nasty and public fight, is that really something that Republican leadership wants to fast-track again?  I think you only get one bite at the rush-through-insane-healthcare-proposal apple, myself.  But a slow and deliberate approach is just going to hurt them even more.

There are other possible Stage Threes that they could tackle now: a border wall, a trade deal, etc.  But all of them are hard and none of them even have universal Republican backing.  Does Trump try to cut some bipartisan deals?  That's also really hard, especially when you're unprecedentedly toxic among Democrats.

As I said in "Listen: what might be next on the Trump agenda," I predict that there are different possible bills in secret development.  They will eventually get behind a new bill -- Stage One, Stage Two, or some iteration of Stage Three.  But for right now, you don't need to worry about a reckless and dangerous Republican legislative train.  It's not hurtling forward towards us.  It's not even inching slowly our way.

Right now, that train hasn't even left the station.

Tuesday, April 11, 2017

Listen: Kansas-04, California-34, and the future.

Today was one of several special elections following the 2016 general election.  The race was in the Kansas 4th Congressional District.  If you barely heard of it before now, don't worry, you're not alone -- this race wasn't on anyone's radar.  It was being held to replace Mike Pompeo, the new head of the CIA, and it was a comfortably Republican seat.  Pompeo won his last three elections by margins of at least 30 points.  There really wasn't much reason to pay attention to this district, especially not with a lot closer elections pending (like in Georgia).  Republicans couldn't convincingly point to a safe seat as evidence of support for Trump or national policies, and Democrats didn't want to waste time or money highlighting a likely failure.  So it was left local.

That has changed.

Over the course of just the past couple of days, a race that had once looked like a lock... wasn't.  The Republican candidate (Estes) was dull and rambling, and the Democrat (Thompson) was a veteran with good messaging.  A Republican internal poll had Estes with only the narrowest of leads.  Cue the alarm bells.

The national Republican leadership and associated super-PACs poured money into the district.  Senator Cruz visited and did a rally.  Even the president made a robo-call for Estes.  Over two days, Republicans did everything they could to shore up Estes' numbers.

Why did the national party bother with all of this?  It's one single seat that the Republican was still pretty likely to win... doesn't it look bad to put this much effort into this?  After all, couldn't they very reasonably point to local factors -- a mediocre Republican candidate, an incredibly unpopular Republican governor who has crushed his state with insane policies, a special election with low turnout?

Here's the thing, though.  Last week, there was another special election to replace Kamala Harris in California (she's now a senator).  That was a comfortably Democratic seat... but it has swung even further to the Democrats, to the tune of nineteen points.  The Republican got 3.4% of the vote.

Right now, it's too early to say what the final vote in Kansas will be.  We can say pretty definitively that the Estes (the Republican) did win, but it's going to be hours before all the votes are counted in notoriously slow Kansas.

However, we can also say pretty definitively that this race was competitive and it was never supposed to be.  Even with Governor Brownback dragging down his party, even with a lousy GOP candidate and great Democratic one, even with a weird special election...

It's looking like only a single-digit victory for the Republican in KS-04.  That's crazy, but true.  And when combined with the California vote, we can reach a further tentative conclusion:

That's Trump.

For months now, the president's polling has been slowly dropping.  He had a brief high point, as aggregated by 538, of 48% approval and 43% disapproval.  Since then, he has sagged to 42% approve and 53% disapprove.  Moreover, his chaotic leadership and the utterly bankrupt Republican policies have left his entire party scrambling to achieve some scraps of their promised policies.  Obamacare remains intact and healthy, tax reform is being pushed back to August (still optimistically!), and there's no movement on trade at all.

Yes, the Republican is going to win, but this should have been a cakewalk.  It was a fight.  Two is the start of a trend, and this is the sort of data point that no one can ignore.  Both of these elections swung twenty points to the left, compared with 2016.

There's blood in the water, and everyone can smell it.  Tentative Democrats are going to run for office, when they might have been shy.  Republicans are going to start worrying about their seats, even in "safe" districts.  Everyone has their eye on the next election.

Do you?

Are you ready for this?

Are you ready for 2018?

Are you ready to win?

Because there's only 573 days to get ready.  And we'll need to be ready.  Because we're going to storm every district in every state.  Because we're going to make the GOP answer for their actions at every podium we can find.  Because we're going to march and call and write and vote.

California spoke.  Kansas is speaking.  America is speaking.

Soon, it will be your turn.

Be ready.

Thursday, April 6, 2017

Read: some people to keep you informed.

Do you want to know what's going on in the world and in American politics?  It can be difficult to know who to read and trust, since there's a lot of reporters and pundits who engage in wild speculation or who lack the deep knowledge necessary to provide context.  I follow all these people on Twitter, but you can also just read them directly or subscribe with an RSS reader like Feedly.

A great source for legal matters (especially the Muslim ban) as well as LGBT issues is Chris Geidner at BuzzFeed (@chrisgeidner).  His assessment of legal arguments and proceedings is first-rate.

The New York Times' Maggie Haberman (@MaggieNYT) (often with Glenn Thrush) is an excellent and relentless reporter on the White House in general, particularly the internal dynamics and Trump's thinking.  I read everything she writes, without exception.

Dave Weigel of the Washington Post (@daveweigel) spent years covering libertarian and conservative groups, and as a result he has a great handle on their thinking and that of other movement groups -- without losing his superbly cynical insight into their goals or what's likely to actually happen.

I also read Harry Enten (@ForecasterEnten) and Nate Silver (@NateSilver538) of 538, who give an invaluable look at demographics and the numbers behind elections.  Before the election, their site got a lot of criticism from the left for giving Trump a 33% chance of winning the presidency (even though the numbers didn't lie and her lead in the electoral college was more tenuous than it appeared).  After the election, the right criticized them for not predicting the outcome (even though they predicted a 3% popular vote victory for Hillary, which turned out to be exactly right).  Spot on and solid analysis.

For much the same reason, I also read Nate Cohn of The New York Times (@nate_cohn).  He analyzes a lot of electoral data as well, and provides good commentary on likely possibilities.

More broadly, I try to keep in touch with general events by reading my local paper, The Washington Post, The New York Times, The New Yorker, as well as whatever comes my way from Twitter recommendations or the like.

Tuesday, April 4, 2017

Read: the Democratic path to electoral success in 2018.

After every election, debates over that election's meaning begin to consume both the winners and the losers.  Few people actually change their minds, regardless of the outcome or their previous predictions.  Few people ever walk away from an election and think, "Most Americans disagree with me."  Instead, they tell themselves that they lost because of deceit (the people were conned by lies and manipulated by powerful forces -- the Koch brothers or George Soros), messaging (we had the wrong spokespeople or the wrong campaign strategy, but the informed people actually agree with us on issues), or uncontrollable events (war, terrorist attacks, recession).  No movement or group is immune to this.  Indeed, the very premise of this blog is to reassure readers of what I perceive to be the positive realities that underlie a very negative state of affairs!

This tendency reveals a flaw in one of the essentials of democracy: political parties and movements tend to react to demographics rather than electoral feedback.  Elections are blunt instruments, passing judgment on people, policies, and parties all at once; in their aftermath, we see modern-day reenactments of ancient divination, as politicians and pundits grope around in the guts of a sacrifice to try to interpret the will of the holy American People.  Polling makes this easier, since people accept individual polls as factual representations of the will of the nation -- even though a poll's wording, methodology, or timing might completely change its outcomes.

Given this, there is no certain answer to the questions, "What do the people really want?" or "How do we appeal to voters?"  Different people have different arguments, instead.  For right now, they mostly revolve around the degree of obstruction that Democrats should present.  Should it be total?

In "Democrats’ Best Bet for 2018: Accentuate the Negative," Ed Kilgore argues in New York that the best chance for success for Democrats lies in obstructing Trump and the GOP as much as possible while still appearing reasonable and approachable:
It is true that midterm negativity can be taken to counterproductive lengths, as occurred in 1998 when the GOP effort to impeach Bill Clinton backfired pretty badly. Four years later, Democrats struggled even more in a midterm, partly because they alternated between attacking and agreeing with George W. Bush in that security-haunted era, and partly because 9/11 gave Bush a level of extraordinary popularity that had only partially worn off by 2002 (his approval rating on Election Day was 63 percent).
By and large, though, the presidential party loses ground in midterms, and the opposition party can enhance the natural backlash by piling on, not by offering alternative courses of action that most voters will simply ignore.
In "The New Party of No," Michelle Cottle, writing for The Atlantic, essentially agrees.
While nobody does obstructionism like McConnell, House Democratic leader Nancy Pelosi has a keen appreciation of the value of just saying no. In early 2005, a freshly reelected George W. Bush was hot to overhaul Social Security. Republicans held the White House and both chambers of Congress. They had the vision. They had the numbers. What could possibly go wrong?
Everything. Even thinking about messing with entitlements is politically fraught, and Pelosi decided to make Bush bleed for it. For months, she kept her troops focused on beating the bejesus out of Bush’s proposal, driving public support for it down, down, down. The negativity became so relentless that some Democratic members began to get twitchy. When would the caucus move beyond slamming Bush and put forth a reform plan of its own? Famously, Pelosi’s stock response became: “Never. Does never work for you?”
By spring, Bush’s plan was deader than disco—and stayed dead despite his efforts to revive it, which ran right through the 2006 midterms. That November, Democrats retook both chambers of Congress in a wave election that startled pretty much everyone.

In the New York Times, Will Marshall suggests in "Why Democrats Should Work with Trump" that now is the time for Democrats to try to strike a deal on infrastructure with a deal-hungry White House -- in exchange for major concessions.
Unlike depriving millions of Americans of health insurance, revamping America’s outdated tax code and modernizing our run-down infrastructure are progressive causes Democrats should be for. And unlike Republicans, whose ideological rigidity and strident partisanship often border on nihilism, Democrats still hew to the quaint notion that the people elected them to solve problems, not prevent them from being solved. McConnellism is not in the party’s DNA.
But if moderate Democrats are disposed to cooperate with the deal-maker in chief, they ought to exact a high price. On tax reform, for example, they should insist that Mr. Trump deliver tax relief to the middle class, not the wealthy, and that he jettison Mr. Ryan’s proposed border-adjustment tax, which would hit consumers and business with big price hikes. The administration needs to find better ways to pay for a sharp reduction in the corporate tax rate. Democrats don’t have to love big business to recognize that our antiquated tax system forces companies to pay much higher taxes than their overseas competitors. That makes American workers less competitive and gives our companies incentives to move investment abroad — and keep profits there — to avoid the higher rate.

Jonathan Chait of New York strongly disagrees in "Delusional Democrats Want to Prove They Can Work with Trump," as he consistently has, arguing that the electoral history is clear: voters reward presidents who get big accomplishments finished in a bipartisan way, and any proponents of a Democratic deal need to recognize that hidden cost: Democrats will not only be conceding whatever concessions they give up to meet in the middle with the White House, but they will be badly damaging their chances of victory in 2018 and 2020.
Trump also seems to grasp that infrastructure gives him the chance for a high-profile bipartisan deal. Describing his “beautiful” relationship with leaders of both parties yesterday, Trump boasted, “We’re about to make a big deal.” The infrastructure bill would provide the sweet bipartisan coating to the bitter pill of his otherwise orthodox right-wing agenda. Democrats think they’re calling Trump’s bluff, when in all likelihood, Trump is calling theirs.
The Democrats’ most deeply mistaken premise is their belief that the voters will make specific judgments about which congressional party is more effective. That is simply not how voters think. They make judgments about the state of the country, and hold the president and his party accountable. They do not separate their judgments about the congressional party from the president — indeed, they are so single-minded in their focus on the president that voters actually base their vote for state legislature on their assessment of the president.
For what it's worth, I agree with Chait.  Any bipartisan bill needs to be spectacular for Democrats to justify giving bipartisan cover and a major achievement to the Trump agenda.  It shouldn't be ruled out, but no bill that seems like a prima facie fair compromise is remotely worthwhile.  The enormous, electoral advantages are a hidden concession that needs to be considered.

Saturday, April 1, 2017

Listen: how Trump imagined it would go.

President Donald J. Trump sat down behind the Resolute desk, folding his hands in front of himself.  He settled into the chair, and then scanned the room.  Slowly.  Commandingly.

A dozen men sat before him.  The Cabinet was a diverse group: spindly lawyers sitting next to grizzled generals, fierce advisers rubbing shoulders with soft-talking bankers.  But they all had two things in common.  Every one of them was smiling, although those smiles ranged from broad grins right on down to a grudging smirk of pleasure.  And every one of them was looking to him for leadership.

"Let's get to it, all right?  Let's get to work," Trump said, tapping one finger on the desk in front of himself.  He paused, then grinned.  "And let's work hard, or I'll take you all off salary and make you hourly."  The tension melted away, and the men glanced at each other with quiet chuckles.

"Sir?  First of all, we have some promises to keep, I think," said Reince, opening a folder.  He held up a list: Trump's Contract with the American Voter.

"Right," said Trump, decisively.  "First of all: ISIS.  Mad Dog, what do we have?"

"Well, Mr. President," said the hardened former general, suspiciously, "our hands are tied.  We have a battle plan to go after them -- the XK-327 Turbo Missile destroys radical Islamic terrorists with zero civilian casualties, every time -- but we haven't been allowed to do it.  The bureaucrats say it would be politically incorrect to wipe out ISIS."

"Oh?" said Trump.  He felt indignation rising up within him, but he mastered himself.  He stared his Secretary of Defense in the eye and said firmly, "Well, you tell those bureaucrats to come see me.  As of right now, I want you to go in there and wipe them out.  Launch the Turbo Missiles, and to hell with political correctness."

"Yes, sir," said Mad Dog, his eyes alight with respect and admiration for his commander-in-chief's virility.  "We'll get them, sir.  In one month, ISIS will be gone."

But Trump was already moving on to other things.  "North Korea.  Where do we stand?"

"We're not sure what to do," admitted Tillerson, speaking up from the other side of the room, Mad Dog nodding in agreement as he did.  "Every time we try to make inroads to them, they take our money and just start their nuclear program again.  But we can't attack them -- it would destabilize the entire region and risk nuclear war.  We just don't -"

"Sir!" interrupted an aide, running into the room.  His voice was panicked.  "It's Iran!  Their warship has come within five hundred yards of our own ship -- they're testing us, sir!  They're testing our strength and trying to push us around with disrespect!"

Murmurs rippled through the room, some fearful and some angry.  Trump stood up, leaning forward on the desk, and the Oval Office subsided into silence.  The quiet of the room was so complete that the only noise came from the masses of people gathered outside, assembled in the millions near the site of an inauguration that had drawn historically huge crowds.  All eyes turned back to the president.

"Get ready to send a message to Iran," he said.  Then he checked himself, and thumped his fist down on the desk.  "No, forget that.  Get ready to send a message to Iran and North Korea.  And China.  China too.  And Germany."

The aide nodded obediently, almost in eye, setting a pen to paper and waiting with bated breath.

"I want you to tell those countries that America is no longer led by a weak Indonesian Muslim.  America is back in the hands of Americans, and the people have put me here to say that our country is not going to be the loser any more.  From this moment on, any country or person that crosses the United States of America will regret it, believe me."  His voice was iron and magic.  "Tell them that I am putting them on notice."

His voice rang out, and the cold fire of his bold words set a chill on every neck in the room.  The aide finished writing the note with trembling fingers, but turned hesitantly to look at the Secretary of State.  In his eyes was an unspoken question: should I really send this courageous and beautiful message?

"Send it, son," said the Secretary of State.  "It might seem unpredictable and strong, but I think it just might work.  In fact," Tillerson said, turning back to the president with frank approval in his voice, "It's just the kind of thinking America has needed for a long time."

"Mr. President," said Reince, speaking into the respectful silence that ensued after the aide's departure.  "Obamacare?"

"We're going to repeal it today," Trump said, turning to his chief of staff.

"Sir, that will cause a lot of people to lose their health insurance," pointed out the Secretary for Health and Human Services, his doughy chin trembling.  "We need to do something for them."

The president absorbed this advice, nodding slowly and thoughtfully.  He was the sort of man who listened to everybody and then found the best path forward.  "Yes, we have to take care of everybody.  You're right.  Okay, here's what we do.  Is there a replacement plan?"

"Yes," said Secretary Price, nervously.

"How good is it?  How good does it provide healthcare, and to how many people?"  snapped a question in return from the masculine commander-in-chief.

"Well, it's not very good," admitted Price.  "And it only covers a few people."

Trump stabbed a finger at Price.  "Change it.  We want it to cover everybody and we want the best care.  Especially for our veterans."

"But... we can't do that!" said Price.  "The people won't stand for it!"

"Tough," said the president, making his hand into a fist.  "We have to do this for our great people.  It's a promise I made."

"Yes, sir," said Price, marveling.  "But great healthcare for everyone... it's crazy!  No one's ever wanted to do that."  He scribbled some notes on a pad.  "We'll get it through Congress today, but I don't know how the public will like it."

"And trade, sir?" said Reince.  Like everyone else in the room, he leaned forward after he said it, anticipating more quick and bold decisions from the powerful and turgid president.  "Did you want to take any actions on trade today, or should we wait a few months until we need to put on a show for distraction?"

"No, we act now," said Trump.  "We need to renegotiate NAFTA.  And we're only going to give Mexico half of what they're getting now."  He smirked, glancing over at Tillerson again.  "They can take it or leave it, right?  Maybe they can move to some other continent if they don't like it."

"Half?  Sir, they'll collapse under that strain!" objected Mnuchin, his voice shrill.

But Tillerson put a hand on the banker's arm and shook his head, murmuring, "No, don't you see?  The president wants a deal.  They can't take this, and so they'll negotiate... and they'll be happy with anything better than half.  Even if we only cut the trillions we send to Mexico by a third, that'll still be big league savings for us."

Mnuchin nodded, his face lighting up as he slowly grasped the situation.  The president watched them with a warm and paternal gaze, commenting only, "And some of their money... it's going right into a wall."

"Sir," said a voice.  It was the same aide as before, pushing his way back into the room insistently.  But whereas before his voice was panicked and afraid, now it was calm and still -- almost awed.  "Iran... they've recalled their warships.  Not just the one near our boat... all of their warships.  And North Korea is on the phone.  They want to talk about... about... disarmament.  They say they want to get rid of the nuclear."  The aide looked not just respectful when he stared at the president.  He looked reverent.

"All right, then," said the president, nodding firmly and pleasantly, and the men in the room exchanged proud smiles.  Mad Dog, his eyes widened, could do nothing less than stand up, straighten his back, and salute his commander-in-chief.  Trump sat back down at his desk and picked up the phone.  "It sounds like I have to take this, boys.  We'll meet again tomorrow and knock out a few more of these things.  Thanks, everyone."

As the president lifted the phone to his ear and began to discuss terms with the North Korean leaders, the rest of the Cabinet quietly filed out of the room.  Their voices were hushed as they discussed what they'd just seen, and several of them were already communing with underlings to make arrangements to carry out the crisp orders that they'd just received.

Only that same aide, amazed at what he'd seen, paused to examine the bronze bust of Winston Churchill that sat on a small table near the door.  It looked different, somehow.

He leaned down and squinted at it.  Huh.  He'd been sure that the metal face of the great British leader hadn't looked like that the last time he saw it.  That was nonsense, though... statues didn't just change. He must be wrong, since he'd thought he remembered Churchill's face as a taut and serious grimace.

But looking at it now, he could see that the Prime Minister had a proud and approving smile, instead.

Strange, he mused, as he backed out of the room.  He shut the door behind him, giving privacy to the potent man within who was busy Making America Great Again.