Month: December 2010

Tuesday was a special kind of hectic. A small kitchen fire that happened while I was in the shower caused a little bit of damage and a whole lot of headaches. After an initial scare with the girls, all four of the rats turned out OK. That fireman who gave your first grade class the talk about what to do in case of fire was not kidding; even though only a relatively small amount of fabric burned, the (equally small) house filled with heavy, acrid, "someone is burning synthetic materials" smoke in a hurry. Twelve hours later, my eyes are still burning and everything smells like a bonfire of wet leaves. Other than the odor, which I expect to linger for a short while, no mammals were injured and no real damage occurred. I have to admit, though, that it was pretty scary for a few minutes until I figured out what was going on, evacuated the rats, and put out the fire.

I don't want to name names or point the finger of responsibility, but let's just say that a valuable lesson about storing one's rayon shawl and pile of acrylic yarn handiwork on a lit stovetop burner was learned by all.

That is a long way of saying, "Pardon me, for this may be of poorer quality than I originally intended."

I am on all kinds of political email lists, none more consistently irritating than the official Obama list. Many of you are familiar with the faux-inspirational messages that pop up in your inbox every few days, purportedly authored by Michelle, Joe Biden, or even The Man himself. It is interesting to me from an academic perspective to see a communications strategy unfold, and for the last several months the Obama people have been hitting the "Emphasize how much we have accomplished, not what we failed to accomplish" talking point with the discipline of a Buckingham Palace guard. It hasn't really worked, but it isn't for a lack of effort. You may even remember the charming What the Fuck Has Obama Done So Far? website which garnered some attention right before the election. More recently the emails have been trumpeting, quite predictably, the DADT repeal.

The repeal is indeed an important victory for anyone to the left of Dog the Bounty Hunter on social issues, but it's also a great example of why people who supported Obama in 2008 are so disappointed with the first two years. A sampling of the accomplishments touted by the aforementioned website: expanding funding for private spaceflight programs, expanding the eligibility for Pell Grants, increasing funding for National Parks & Forests by 10%, appointed the nation's first Chief Technology Officer, extended Federal benefits to same-sex partners, etc. and so on. Those are all really nice things. But it's all low hanging fruit. What of that is particularly controversial aside from the inevitable (and ultimately meaningless) hysteria of the hardcore right-wing base? Which of these involved a real a legislative battle? Which of these things was in any way, you know, difficult for him to accomplish with large majorities in both chambers?

Disillusionment arises from the fact that these "victories" aren't the kind of thing one celebrates. In American football, no one congratulates the kicker for making an extra point. The kicker doesn't run around celebrating wildly either. It's just expected. Failure to make the kick would be a sign of staggering incompetence, but making the kick isn't a sign of much at all. It just means you have enough talent to accomplish the bare minimum expected of your job. The kicker really gets a pat on the back and an enthusiastic group hug from his teammates when he makes the 50 yard kick through wind and snow. That's impressive. That's an accomplishment. That's something to celebrate. Take a lap around the field, kid. You did good.

Obama is not getting credit for his "victories" so far because they are not victories in the fights he was elected to fight. None of this represents "change", if I may revert to the campaign's slogan for a moment. Obama, like all modern presidents, has meekly backed down from even a token challenge to the political power structure in this country. For all the talk of health care reform and financial reform, the end result has been exactly the same: the people with all the money get exactly what they want. Every time.

We win issues like DADT, for example, because our corporate masters do not care about it. If they did, their lobbying would certainly dictate the outcome. But they don't. It matters not one bit to Wall Street if DADT is enacted, repealed, or covered in rich, creamy frosting. Obama can win these fights all day. However, the second something that has the potential to affect profit margins is on the table the lobbyists and CEOs make it clear to the President that such issues are off limits and such behavior will not be tolerated from him.

In essence the Obama presidency thus far has proven that We can win if and only if big business has no dog in the fight. When it does, all bets are off. The President can continue trying to convince people to celebrate the fact that he can sink six-inch putts and kick extra points as though doing so is a great accomplishment. Alternatively, he could find enough of his balls to actually fight and perhaps even win a battle against meaningful opposition. Standing up to Maggie Gallagher, Fox News, and the other neanderthals who fly into a rage over gays in the military is one thing. Standing up to the elites who run this country is quite another.

Americans spent more time talking about our nation's healthcare system in 2010 than in the last few decades combined, which is good. Unfortunately most of what they know and believe about it is false, retarded, or both. Which is bad. We learned mostly that there is a powerful noise machine in our society that can make anything, no matter how ridiculous, plausible to dullards through sheer force of repetition. We learned that 'mericans don't like Socialism and Government Takeovers and Death Panels and Rationing Care and lots of other straw men. We learned that people will argue passionately to defend a system from which they derive no benefit and, in many cases, actively fucks them.

What we did not do – indeed, what we never do, because it is hard and requires more than 15 seconds of attention – is question the fundamental premise of our, uh, "unique" approach to healthcare in this country. Think for a moment about the way we do things here.
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Not about the bureaucracy, the inefficiency, the clusterfuck of third-party payers, or the all-encompassing atmosphere of inaccessibility. Consider how this system works on the most basic level: you have to pay for getting sick or injured.

You slip on a patch of ice and break your hip, and then next thing you know you're out $10,000 if you happen to be uninsured or poorly insured. You develop breast cancer and a hospital (and eventually a collection agency) sends you a bill for $25,000 because you got cancer. You get tagged for $100-200/month in prescription drug copays for making the mistake of having allergies or some other congenital medical problem. You pay several hundred dollars in fines and penalties for catching some weird virus from a stranger at the airport. No matter the reason, and no matter whether you are insured or uninsured, being sick and getting injured cost a lot of money in this country.

Is that not a little fucked up? I'm sorry to tell you that you have leukemia, Mr. Jones. Just give us tens of thousands of dollars and we can do some chemo, or maybe think about a bone marrow transplant. If you can't afford it, you can either go home and die or get the treatment anyway and we'll take your house.

The American attitude toward the healthcare system represents our national obsession with Personal Responsibility taken to its ludicrous extreme. We feel that people should have to pay for any services they receive because A) we're proud capitalists, and thus everything of value must have a price attached to it and B) we blame individuals who end up in the hospital, just as we blame the ones you end up poor, in prison, on drugs, or unemployed. Everything that happens to you up to and including getting cancer is your own damn fault.

Our system is the way it is because we generally believe that illness and injury are preventable, thus in the classic Reaganite mindset you should have been smart enough to prevent it. Admittedly this outlook has some appeal and anecdotal supporting evidence. It is often hard to generate sympathy for someone who drunk drives into a tree or smokes for 50 years and develops lung cancer. Sometimes the trip to the hospital is indeed a consequence of our own actions. It raises the larger question of where the line between personal responsibility and bad luck should be drawn – which is a red herring for the even bigger question of why, in a wealthy, industrialized, and allegedly civilized nation, that should matter when it comes to something as fundamental as access to a doctor.

Our culture (and especially our media) would have you believe that an obese person who has diabetes or heart problems is undeserving of sympathy, and certainly undeserving of free access to medical care.

He did it to himself, we are encouraged to tell ourselves. Probably sat around all day stuffing his face with KFC. This personal responsibility fetish relies upon a number of important assumptions – namely that the consequences of every action can be known or predicted in advance and that prevention is usually (if not always) possible. More importantly, it keeps us from questioning the idea that is the cornerstone of a for-profit healthcare system: that access to medical care, the need for which may be driven by our own actions or random chance, is not a human right but a privilege reserved for those who can afford it.

(Please start with Part I: Cutting off the Nose from Wednesday)

Having laid out the rationale for state-level municipal bankruptcy, it is clear that as with any bankruptcy there are some pluses and minuses involved. In the case of legitimate insolvency, one might even argue that this would be the best possible resolution. For a number of reasons, the generic "one" does not include me.
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THE PROBLEM
The flaws inherent in this proposal are numerous. I will focus on three: constitutionality, necessity, and political buck-passing.

1. Professor Skeel may know quite a bit about the bankruptcy code – I lack the knowledge necessary to dispute that, so let's assume he does – but he appears to be badly misinformed about the basics of federalism and how local and state governments differ.
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Simply put, the analogy between state and municipal governments is so inappropriate that I have to question the intellectual honesty behind the decision to use it.

City, county, and other municipal governments can file bankruptcy under Chapter 9. Skeel and the GOP feel like this means states can do the same. But local governments are corporations – municipal corporations, specifically – chartered by state governments. From the perspective of the bankruptcy code, General Motors and Detroit, Michigan are remarkably similar (although with obvious key differences). A local government can go tits-up (financially) because local governments have no inherent power except that which is granted to them by their state.

That is not true of states. Not even a little. State governments do have inherent powers independent of the national government – I thought conservatives were big on this idea? I guess "states' rights" is only a relevant argument when black people are asking to vote. Anyway, our federal system is based entirely on the idea that state governments relinquish certain powers to the Federal government for the common defense and welfare. That it is constitutional for the Federal government to administer the bankruptcy of one of its own building blocks is not at all clear. And remember we're talking about one or a few states. Not every state. For the Federal courts to administer a debt reorganization plan to one but not all states would be a federal version of what is called "Special Legislation" at the state level.

The debts of individual states at the founding were assumed by the Federal government (under the Residence Act of 1790) because Congress recognized that being a Republic it was directly contrary to the national interest for any individual state to collapse financially. You'd think people who quote the founders so often would be familiar with this argument. Many of the basic criticisms of bankruptcy also apply here, particularly the moral hazard (states could spend like drunken sailors and then simply file bankruptcy when the money runs out) and the petitioner would no longer be able to secure credit from the financial system (which in practice would probably result in Congress providing billions upon billions of dollars in Debtor in Possession financing).

2. In what world is bankruptcy the only or best option here? States, no matter their financial distress, do not lose the ability to raise revenue. While the previous post's comment thread has already touched on BABs (which, of course, Republicans want to chop as well because doing so will help force states into bankruptcy) there is an even more basic option: grow some fucking political balls and raise taxes. One need not believe that raising taxes is either good or desirable, but if this situation is so dire and such a crisis that we're talking about state governments becoming insolvent and filing for bankruptcy it would seem that every option should be on the table. Time for some of those "tough choices" they're always telling us about when they're cutting spending.

There's nothing "necessary" about what is being proposed here. It is simply a scheme to:
A) Legalize state-level bankruptcy
B) Restrict states' ability to raise revenue through bond sales
C) Cut off the flow of Federal funds (the GOP presuming it can continue to control Congress)
D) Force states into bankruptcy court where the judges will let them void their pension plans

Which brings us to the final point.

3) What is filing bankruptcy from the state perspective other than political cover? It's merely a way for gutless state politicians to say "The bankruptcy court made us sell all the state parks" or "Those bastards in Washington cut your pensions, not us." Again, if all of these steps are so gosh-darn necessary then get in front of the camera and tell the state's voters "This is what we need to do." Attempting to resolve problems with budgets, a fundamental political issue, through the legal system and the Federal one at that is nothing worse than a severe case of political cowardice.

THE DILEMMA
Understanding that a lot of bad things could happen in a bankruptcy process that we'd be making up on the fly – courts could liquidate a state's public assets or, if the law was not sufficiently narrow, force a state government to institute revenue increases or spending cuts – what member of Congress in his or her right mind would support this? Why, Darrell Issa and Devin Nunes from California sure would! You have to admire the amount of political courage, or perhaps just blind hatred and ideological fervor, required for Congressmen to pitch a plan that will end up demonstrably screwing their own constituents just so the GOP can score points against public sector unions. I mean, that's amazing. What balls! Republicans in Congress are actually willing to enact a plan to drive their own states into bankruptcy, force austerity on state governments, and severely undercut the state and local services on which their own constituents depend…just to say "Hey, fuck you, unions!"

Of course the obvious obstacle to enacting any of these changes is the White House. Why would the President sign such a bill? If that seems implausible I would suggest you pay more attention to what goes on at 1600 Pennsylvania Ave. these days. Why wouldn't BO love to sign something that Mitch McConnell insists is a great idea? How bipartisany! How fiscally responsible! Won't voters love it if he bucks his own party? Hell, maybe his own party will support it in Congress as well. Perhaps they'll trade it for a $3 billion package of unemployment benefit extensions. Or maybe there will be a different president soon and the GOP won't perceive him or her as an obstacle but as an ally.
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As for how the Supreme Court could possibly find such a scheme constitutional, I almost hope this all happens just so we can marvel at the intellectual contortions necessary for noted State Power advocates Scalia, Alito, Roberts, and Thomas to explain why they think a Federal bankruptcy court should start giving orders to the State Capitol and governor's mansion.

Sorry to be such a downer at Christmas time, but this issue is less of a "what if" and more of a matter of time as Stimulus money runs out and state governments confront budget crises even more severe in 2011 and 2012 than what we've already seen in 2009 and 2010. Buckle up, it's gonna be…actually, don't bother. Buckling up helps in a fender-bender but when you ram your car into a concrete wall at 110 mph, frankly it doesn't matter.

The length of this post reflects two things: the importance of this issue and the fact that you are unlikely to hear much about it until after the House passes the bill sometime next year. It will shock you to hear this, but congressional Republicans are quietly preparing a plan to radically alter the law – not to mention some of the foundational aspects of our federal system – to continue their war on anyone who makes more than minimum wage, score cheap political points against unions, and cram shock doctrine "austerity" and privatization schemes on state/local governments through Federal bankruptcy courts.

This Weekly Standard piece by professor (and supposed expert on bankruptcy law, although his argument calls those credentials into question) David Skeel has probably infuriated John Boehner and the gang by blowing the lid off of a plan to allow, i.e. force, states to declare municipal bankruptcy. Along the way he relies on standard Kristol-style hackery and a catastrophically bad analogy to suggest that such a scheme is not only constitutional but also in the interests of anyone other than the top 1% of the economic hierarchy, waiting like vultures to pick over the remains of public infrastructure.

PRELUDE
Any discussion of the fiscal crisis at the state level in the right-wing media must, seemingly by law, focus on Illinois and California. Skeel refrains from trotting out too many of the Liberal Straw Man cliches about those states, but they do form the entirety of his anecdotal evidence throughout the piece. This choice makes sense given the intended audience but no logical sense. According to the CBPP (whose figures are relied on heavily in this and any other discussion of state finances) California's projected 2012 deficit of a staggering $19.2 billion – 22.2% of the budget itself. No state has a larger deficit in absolute terms but many have larger deficits proportionally. God-fearing Texas, for example, has a $10b deficit that represents 22.3% of its budget – identical for all intents and purposes although slightly larger. So to be clear, Texas is actually more fiscally irresponsible than California. I certainly would not argue that either state is in good financial condition. However, there is no relevant difference between the two, yet only California gets singled out. Way to go, Prof. Skeel.

THE PLAN
Skeel argues in essence that municipal bankruptcy, which allows cities, counties, and other sub-state units of government to declare bankruptcy if insolvent (that will be important in a minute), should be extended to state governments. Currently it is not possible for a state to declare bankruptcy. The Bankruptcy Act of 1934, which was declared unconstitutional in 1936 but revised and passed again in 1937, grants only sub-state units of government to take advantage of Chapter 9. This has been done relatively rarely, but most famously in Orange County, California in 1994 when the cradle of suburban Reaganite conservatism refused to tax itself even a little in order to pay back the billions it lost in high-risk 1980s Wall Street escapades.

Bankruptcy can be beneficial for a county/city for the same reasons it can be beneficial for a company. It limits what creditors can do to collect. It allows the petitioner to escape from contractual obligations. But there are some key differences compared to individual or corporate bankruptcy. There are no "strong-arm" provisions wherein creditors can force a bankruptcy. Local governments must ask permission to file from their state and to prove that they are insolvent – i.e. that they cannot meet their obligations and have no alternatives. Chapter 9 bankruptcies are usually a way for governments to bring down costs by welching on pension obligations and firing people protected by civil service laws. I think you can see why this appeals to Boehner's Bunch.

THE MOTIVE
This is essentially an elaborate scheme to break it off in the collective ass of public sector unions. It creates a legal way for states to not only cut salaries and downside the workforce but also to walk away from contractual pension obligations. Furthermore, like a Chapter 11 bankruptcy can result in liquidation (a court-mandated sale of all assets with proceeds distributed proportionally to creditors) there is the possibility that courts could engage in limited liquidation-like activities with states – forcing them, for instance, to sell state parks and publicly-owned buildings like stadiums or libraries to private interests.

This is only the tip of the iceberg of bad ideas that could be rammed through in the name of austerity. Contracts could be invalidated and public services – from maintenance to seemingly essential functions like fire protection – could be awarded to the lowest bidder. Hey, why pay greedy cops when this two-bit mall cop outfit operating out of a storage shed behind the airport will do it for 10% the cost? Services could be curtailed (or substantial costs passed on to citizens) based on decisions made by creditors and bankruptcy judges. Doesn't twice-monthly garbage collection seem like enough? Be sure to put your $5 sticker on each bag!

So California would in some ways be quite different than General Motors in a bankruptcy proceeding, but at the same time there would be basic similarities. The goal of the debtor is to get legal blessing for reneging on its contractual obligations. The goal of the creditors is to get cents on the dollar. The goal of the court is to get all parties to come to an agreement and, failing that, impose a solution.

Everything sounds great to the average Teabagger thus far. Gunpoint privatization, punitive measures against fat cat union workers (e.g. your Aunt who makes $34,000 working at the county clerk's office for the last 25 years and gets 70% of that in retirement), and oppressive Federal power on behalf of the people who claim to love freedom the most. What could possibly go wrong? You will have to wait for Part II tomorrow. This is what is known as a cliffhanger.

This will be somewhat brief, but things are going to get epic Wednesday.

I am not the least bit sure how to feel about this:

This was an online poll conducted by RedState.com, home of intellectual heavyweights like Erick Erickson, on the 2012 GOP nomination. Ignore the results, which are beyond meaningless for a "poll" lacking even the pretense of random sampling (note that talk radio hack Herman Cain managed to goad a good number of listeners into participating). Just forget all of that for a moment and focus on a more basic issue: have you ever seen a bigger collection of retreads, stiffs, and losers in your life?

Part of me thinks this is a blessing and the other half is flat-out terrified that we will be saddled with one of these dipshits as our next president.

It is quite plausible that this could turn into another Sharron Angle / Christine O'Donnell situation in which the GOP primaries turn out the one and only candidate that Obama can defeat. Yes, he has a lot of problems right now, but as elections like 2004 and 1996 have taught us, unpopularity isn't enough to guarantee the defeat of an incumbent president. The other side still has to come up with a half-decent candidate.

The only ones here who look like they could pose a serious threat are the ones with no chance of making it out of the primaries. Let's be honest: that Haley Barbour is a legitimate candidate shows you how hard up the GOP is for a candidate.
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From this perspective, inasmuch as Obama has been pathetic but is preferable to the alternatives, we should be thrilled that their field is so poor.

On the other hand, what if they win anyway?
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What if a large portion of the people who turned out in 2008 to cast a vote for ol' BO register their disgust by staying home? What if Teabaggin' continues to fascinate the media disproportionately? What if, as the American public is wont to do, voters just fall for a big line of crap from a moron with a good marketing team? Well, then we're stuck with another empty suit who hands the keys to the country over to Wall Street and basically spends four years on vacation or entertaining him/herself with the endless wars.

Oh, wait.