Category Archives: around the web

Dirty, Rotten Republicans?

Jim Geraghty of National Review opines that conservative ideas won on November 6, but conservative candidates, not so much.  Why?  Because they come off as mean:

Conservative ideas, though, won in distinctly Democratic-leaning states once the word “Republican” was no longer associated with them. In Michigan, where Obama won handily, a push to enshrine collective-bargaining rights in the state constitution was roundly defeated, 58 to 42 percent. In California, voters rejected a proposition to repeal the death penalty, rejected mandatory labeling of genetically engineered foods, and also rejected Proposition 38, which would have added funding to education and early-childhood programs by raising taxes on those making as little as $75,000 a year. In Virginia, voters overwhelmingly approved a constitutional amendment making it tougher for the state government to seize private property under eminent domain — while Romney and George Allen were losing statewide.

So why are Republicans so much less popular than their ideas? A ubiquitous accusation from their Democratic rivals, echoed by an allied media, is that Republicans lack empathy to the point of displaying sheer meanness. With Obama running up huge margins among various demographics — African-Americans, Hispanics, women, young people — the argument is that the GOP increasingly represents an aging, white, bitter, and angry rump of the electorate, lashing out nastily at a world changing too fast for them.

More:

At a recent conservative gathering, one well-known pundit exclaimed, “Why can’t I marry my cat?”

Now, think about how this argument sounds to any gay or lesbian or to anyone who loves them — to their mothers, fathers, brothers, and friends. It takes a consensual relationship that more and more Americans see practiced by their friends, neighbors, and relatives and equates it with criminal acts, among the most reviled in our society. Put another way, if some jerk in a bar came up and compared your relationship to your spouse to bestiality, you would probably be sorely tempted to knock his teeth out.

Are gays and lesbians welcome in the GOP or conservative movement? Arguments and jokes like that send the signal they aren’t.

To a lot of people outside the party, this is pretty obvious, but it is good to see someone within the GOP (and not a moderate “squish”) say this.

Adapt or Die

A fellow Michigander notes that his Kindle didn’t kill Borders, bad business decisions did:

The most-cited reason for Borders downfall will certainly be technological change. The Nook & Kindle e-readers both will be portrayed as the grim reapers for Borders, and bookstores in general. That may contain a kernel of truth, and is even more convincing when you throw in competition from online booksellers like Amazon and big box stores like Costco (their selection is always surprisingly robust). Detroit Free Press writer Mitch Album spent his Sunday column listing other factors, including the decline of books as an essential part of our culture. Absent Twilight & the Harry Potter series, and excluding homework assignments, how many American kids are devouring books? For that matter, how many of their parents use time after work to wind down with a book? Not many, it seems.

But I didn’t kill Borders, and neither did my Kindle-loving brethren – bad business decisions did. In 1992, Borders was sold to Kmart, which then merged it with Kmart’s Waldenbooks and started franchise expansion. Borders became a public company in 1995 and reached its sales per square foot peak in 1997 – at 204 stores – but kept opening new stores. It expanded overseas and failed to capitalize on growing (non-expansion) revenue streams, most notably in 2001 when it gave Amazon all of its online book sales. Instead of being conservative with expansions – even downsizing – as the market landscape changed, Borders kept pumping revenue up with store openings. On April 18, 2011 the truth was clear: Borders hasn’t been a truly healthy company since the late 1990s and now nothing can save it.

 

Like Gordon, the closing of Borders has kind of been a gut punch for me.  In someways it seems silly to get all emotional about a big box chain.  But Borders was a Michigan company that started in Ann Arbor.  There was something that always made me swell a bit with pride about this homegrown company making it big.

But Gordon is also correct that the company made mistakes that contributed to its demise.  It will be sad to see this great store pass into history, but it ultimately has only itself to blame.

Goodbye, Borders

A few months ago, I had written that it was a bit too early to write the obituary for the bookstore chain Borders.  I had hoped the company would continue, but I was wrong.  The chain will liquidate its remaining stores. I wrote back in February that in many ways, Borders caused its own demise for not keeping up with the times:

I would agree that the advent of Amazon and e-readers like the Kindle have made bricks and mortar stores obsolete, but I also think the damage done to Borders was just as much the fault of Borders than it was technology.  The bookstore chain was slow to getting online and even today, it’s web presence is not that great.  Recently, I was looking to purchase a book and wanted to see if I could buy it at the Borders website.  The price for that book was twice as much as it was on Amazon.  Borders wasn’t even close to being competative with the Amazon.  If the chain wants to survive, it’s going to have to make the website on par with Amazon and be ready to play hardball.

Barnes and Noble saw the handwriting on the wall and has been able to keep up with Amazon, not only on the web, but also in the e-reader market with its own machine- the Nook.

Borders in many ways was stuck in its heyday of the mid-to-late 1990s, long before Amazon and anything like a Kindle or the Nook.  It never really took the changes in the book market, from brick and mortar to the web, seriously and it has paid for that ignorance dearly.

I don’t know what it is with Michigan-based businesses that they get stuck in their halcyon days and don’t stay competative.  General Motors and Chrysler were saved only because the government came in to get the into shape.

Borders will be a lesson on what not to do when it comes to business and technology.

That said, I will miss the chain. I always liked it more than Barnes and Noble.

Goodbye, Borders.

 

Can Eating the Rich Give Governments Heartburn?

This article on taxing the rich, which appeared in the Wall Street Jounral has recieved a lot of play in the right-blogosphere.  It tends to, at least on the surface, give a very detailed account into why rasing taxes on upper incomes can in disastrous for states in the long run.

I think the op-ed makes a compelling case, but I also think it’s short on answers to alternatives.  My brother-in-law, who is a professor in history and economics tends to think that that the rich tend to use more government services, such as roads to truck goods to market, and therefore they should pay more in taxes.

I don’t have a background in economics, but I tend to think there has to be a limit on how much upper incomes can pay and as the article shows the fortunes of the economy can make those income very volatile. None of this means I’m against raising taxes, but there can be too much of a good thing (if you want to call taxes good).

I’m curious to know what those who have better backgrounds in economics think about this.  What is the proper amount upper incomes should pay?  If relying on upper incomes is too risky, what are the alternatives to funding government?

On Corporations as Persons

James Hanley offers a backgrounder on the whole “are-corporations-persons” argument:

So the question is, is there systemic/procedural unfairness in our system of wealth distribution? I believe that there is, but I want to clarify first what is not an indicator or symptom of systemic unfairness—the corporation. Corporations are, at their basic level, a generally, if not perfectly, fair system. (To be clear, I don’t believe in perfection in human systems, so to say something is not perfectly fair is only to say that it is the product of humans, not gods.)

Consider the origins of corporations—individuals joining together for the purpose of investing in merchant ship ventures. It took a lot of money to buy or charter a ship, then supply it with trade goods, and the return was very uncertain due to the danger of pirates and ships foundering. So various investors put in various amounts, and if the venture is successful, got back a return proportionate to what they put in. It’s nothing more than a contractual arrangement.

Say they do this several times, and then realize it would be easier if they owned their own ship(s). But with a large number of investors the contractual arrangements get complex and time consuming, creating high transaction costs. So they simplify by forming a joint stock company. The company owns the ships, and they own shares in the company. As economist Ronald Coase explained, in discussing the nature of the firm, people form joint-stock ventures because the costs of operating through that kind of organization are less than the costs of trying to operate by formal contracts for all matters. There’s nothing nefarious, no theft, fraud, or coercion, so it’s fair.

And that’s where corporate personhood really comes from. Instead of every owner having to negotiate and sign a contract to purchase a new ship, the manager can do it in the name of the firm. While corporate personhood has a bad name—because it is not well understood, I think, rather than from some deep insight about it—let’s not forget that all kinds of non-profits have corporate personhood, too, from the private college I work for to United Way to Doctors Without Borders. Are these organizations all nefarious, or do they simply find incorporation a more efficient mode of operation?

I know that probably won’t please folks on the political left, but it does make some sense- at least to me.

Spreading the Wealth Around

A fascinating and revealing article from an old Dissent about the redistributive dimensions of early Jeffersonian thought.  The founding fathers are often portrayed, particularly by rightists, as devoutly laissez-faire.  In reality, they seemed to divide up between conservative Hamiltonian corporatists and radical Jeffersonian egalitarians, the former urging government collusion with commercialists and the latter urging some form of leveling to the advantage of small holders and craftsmen.  From the start, the only place where laissez-faire prevailed was at the federal level; states and localities had broad powers to police morals and markets.  And even at the federal level, “hands off” inherently meant favoring some against others.

“Wealth, like suffrage,” Taylor wrote in his Inquiry Into the Principles and Policy of the Government of the United States, “must be considerably distributed, to sustain a democratick republic; and hence, whatever draws a considerable proportion of either into a few hands, will destroy it. As power follows wealth, the majority must have wealth or lose power.”

Even the cautious and aristocratic Adams tended to agree, at least in the early days:

In the revolutionary fervor of 1776, John Adams had agreed. “The only possible Way then of preserving the Ballance of Power on the side of equal Liberty and public Virtue,” he wrote in a letter to James Sullivan, “is to make the Acquisition of Land easy to every Member of Society: to make a Division of the Land into Small Quantities, So that the Multitude may be possessed of landed Estates.” Such thinking obviously shaped Jefferson’s Draft Constitution for Virginia (1776), which stipulated that every man without property (or without adequate property) is entitled to fifty acres of public land upon reaching adulthood and, even more striking, that no one else should be permitted to appropriate public land. “Legislators cannot invent too many devices for subdividing property,” he later wrote in a letter to James Madison.

So, contra Republican talking points, President Obama was hardly outside the American democratic tradition when he spoke of “spreading the wealth around.”  Indeed, he was squarely within it.

Always the Victim

I have considerable respect for Judd Gregg and little respect for Sarah Palin.  So it’s no surprise that I found myself nodding along with this article and rolling my eyes at this one.

Clyde Middleton at Liberty Pundits writes:

What troubles me is that I know more about her kids, who they sleep with, her husband, and who he allegedly slept with, than I do about her political positions.  Why?  Because everyone is intent on destroying the woman regardless of what she stands for.  Prove me wrong, Conservatives, for you all are equally guilty.

You are free to support or not support any candidate.  But try focusing on the standards we demand of others:  Attack a candidate based upon their political positions.  Inform each other of those positions and why you disagree.  And keep the cheap shots aimed at the Dark Side, the ones with a D stamped on their foreheads.

The problem, of course, is that Palin has no political positions.  Besides, of course, the usual right-wing populist checklist.  After several years in the public spotlight, she has yet to produce a single idea that is creative and intelligent.  She is an empty shell, a vacuous wind-up doll.  Her platform consists entirely of regurgitating stale Republican talking points from the 1980s.

Attempting to disguise her lack of substance, Palin has made a career out of playing a character, a character capable of stoking cultural resentments in certain parts of Middle America.  Criticisms of Palin tend to sound personal because she has rigged the game that way.  Her “politics” are entirely self-referential.  It’s all about her.  She is the ultimate identity pol, which is why Matt Labash makes a lot of sense when he compares her to Al Sharpton, another unhinged solipsist.

Ironically, Middleton’s insult-laden defense of Palin underscores the notion — voiced wittily by Labash and plainly by many others — that the mama grizzly’s only knows how the play the martyr.

Really, she seems like a fine lady, but she is in way too deep.  The only thing scarier than Vice President Palin is . . . President Palin.

Let’s Aid Our Ally

In the years following WWII, Japan received nearly two billion dollars from the United States.  The bulk of this sum was given in grant form.  It was an impressive bestowal, especially considering that the Marshall Plan divided thirteen billion among eighteen countries.

The bill was hefty for a nation still struggling economically, but the benefits far outweighed the cost.  Our money helped build a powerful and enduring ally.  Sixty five years later, Japan remains a reliable and profitable partner, perhaps our closest in the far east.

Once we found it within ourselves to extend generous aid to a ruthless enemy.  Now that enemy is a friend.  Let’s rise to the occasion and help the Japanese get back on their feet.  Our government, and our people, should do everything possible to resolve this disaster and get about the business of rebuilding.  That means a substantial relief program of money, manpower, and material. Probably manpower (say, detachments of medics and engineers from our military) and material (food, clothing, vehicles, medicine, machinery) are more crucial, given the enormous quantities of money Japan is currently printing.

This awful situation has a silver lining.  It offers an opportunity to renew our commitment to humanitarianism and remind the world that America is still the best hope for a peaceful and prosperous global community.

For the realpolitickers, it should be noted that such an aid program would also be tactically logical.  The Japanese are tired of our sizable military presence on their islands.  If we wish to maintain strategic outposts in places like Okinawa, it would be wise to act graciously, thus acknowledging and honoring their long-term hospitality.

Libertarians and Compassion

Art Carden says libertarians do care about the poor and oppressed, it’s just that their ideas will bother the left and the right:

There is a lot of low-hanging fruit here, but it is low-hanging fruit that people are going to resist picking.  I think we should focus on the policies that we know are hurting the poor and creating human rights disasters around the world.  Unfortunately, these include some of the left’s sacred cows like minimum wages, subsidies for anything that looks even superficially “green,” and the movement to prevent large firms from opening factories in poor countries.  It also includes some of the right’s sacred cows like immigration restrictions and war with anyone who looks at us the wrong way.  In short, libertarians offer proposals to infuriate everyone.

Matt Zwolinski offers a convincing counter-arguement.

Carden writes, in others words, as though if we were to remove these policies designed to benefit the poor, we would have a free market, and this would be much better for the poor than what we currently have.  The second part of that claim, I think, is absolutely true.  A genuinely free market really would be better for the poor than what we currently have.  But policies designed to promote the interests of the poor are, I think, a very small part of what keeps us from such a genuinely free market.  To focus on them as if they were is, at the very least, to invite misinterpretation.  At worst it is mere vulgar libertarianism.

My second source of concern is this.  Carden claims to be motivated by a concern for the poor.  His commitment to free market, his post suggests, is a product of his belief that free markets serve the interests of the poor better than alternative institutions.  But his commitment to the free market does not seem at all qualified.  He does not say that free markets do, in certain contexts, a pretty good job of promoting the interests of the poor, but perhaps they are limited in such and such ways.  He does not present any cases where deviations from the free market might be necessary to promote the interests of the poor.  He does not even say that the interests of the poor would be better served by government intervention, but that considerations of aggregate well-being or deontological constraints prevent us from purusing those polciies.  The message seems to be that if your concern is to help the poor, free markets are always the best answer.

Now, maybe he’s right.  I don’t think he is, but perhaps I’m under the sway of false economic beliefs.  Still, it all seems a little too neat.  When someone claims to be committed in a fundamental way to both X and Y, and then claims that (happy day!) X and Y always turn out to be mutually recognizable, I begin to suspect that the conclusion is driven more by psychological processes designed to reduce cognitive dissonance than by careful empirical study or theoretical reasoning.

I don’t know if I have enough mental firepower to engage these titans, but what I have read when it comes to libertarians and the poor is Carden’s belief: if we get government out of the way, then the free market will solve everything.  While I’m not someone that thinks capitalism is inherently evil, I also don’t think it will solve every problem either.

Is Democracy At an End in Michigan?

Michigan is on the verge of passing legislation that would grant some new powers to Emergency Financial Managers or EFMs.  These managers are basically people appointed by the state when a state, city or school district finds itself in dire straights.  From what I’ve been ready among some on the Left, including E.D. Kain and Rick Ungar, this is the end of democracy as we know it in the Wolverine State.

Since I’m a Michigan native and my hometown of Flint fell under state control in 2002, I decided to read up on what’s going on.  Jack Lessenberry of Michigan Radio lays out what’s going on:

Nobody in Lansing was neutral yesterday when the Michigan senate completed passage of new, tougher Emergency Financial Manager legislation on a straight, party line vote.

State Senator Phil Pavlov said this is needed to maintain “vital services, such as public safety and education,” when a city or a school district is in desperate financial straits.

This reform, he said, is necessary to allow steps to be taken “to protect public interests and the public’s money and strengthen local control and accountability.” His fellow Republicans all agreed.

But if you talked to any of the Democrats, they sounded like this was the equivalent of Mussolini seizing power.  “An unfair and unjustified power grab,“ Senate Minority Leader Gretchen Whitmer called it. One of her colleagues said it went way too far, “and was going to damage our communities and our schools.”

It’s also frustratingly clear that in the past, some emergency  managers in places like Pontiac and Hamtramck could have used  more authority. Robert Bobb needed to be able to tackle academic reform in the Detroit district; the courts said he couldn’t.

Now, his successor will have that power. Democrats are mainly afraid of provisions in the bill that would allow emergency managers to void contracts and ignore collective bargaining agreements if necessary. EFMs can even dissolve a municipal government.

Democrats rightly fear this could be the death knell for public employee unions in such cases. To be sure, the majority Republicans seemed uninterested in even attempting to compromise or win over Democrats. However, here’s something we might ask the indignant minority party: Where have you been for the last several years?

What’s clear is that a lot more school districts and municipalities are likely to have to endure emergency financial managers, or EFMs for short.

This has been clear to everyone for some time, and it has also been clear that the old law was inadequate. Did the Democrats propose changes last year, when they controlled the governorship and the state house? Did they suggest conducting a review of Detroit’s troubled finances?

They did not, clearly for political reasons. They did nothing, any more than they attempted to address the state’s deep-seated financial problems. Now, the balance of power has shifted.

Crain’s Detroit has a good overview of the law.  There is a current law on the books that has been used in the past.  As I said earlier, it was used on City of Flint in 2002.  The Crain’s article sums it up:

Here’s how the existing law works: A review of a city or school district’s finances is triggered when one of several events happens, like payless paydays or a failure to meet pension obligations. The state treasurer puts a review panel in place to evaluate the local government’s fiscal health, and if there’s a financial emergency, an emergency manager is appointed.

This is what happened in Flint.  A New York Times article from 2002 explains that the state came in and in effect, stripped elected officials of their power:

Even in a city used to hard knocks, this has been a bruising year.

In March, Mayor Woodrow Stanley was recalled by voters frustrated with the city’s deteriorating finances, and racial tensions simmered as the Rev. Al Sharpton came to rally support for the mayor, who is black.

In May, unemployment rose to 8.3 percent, far higher than even beleaguered Detroit to the southeast.

Since then, Flint’s municipal debt has climbed to nearly $40 million, alarming state officials, who began a review of the city’s finances in the spring. Gov. John Engler, a Republican, said the city had no credible plan to turn itself around. Darnell Earley, the city administrator who became acting mayor when Mr. Stanley was recalled, went so far as cutting public ambulance service to try to bring the city’s finances under control.

The denouement came on Monday when the state took control of the city’s government, stripping elected officials of much of their power. Flint, a city of 125,000, is the largest municipality that has ever been run by the state.

So, what does the new law do?  Back to the Crain’s article:

Amendments to state law under discussion include expanding the list of events that can trigger the state review that leads to installation of an emergency manager, changing the powers of local elected officials during the emergency financial manager’s tenure, giving an emergency manager the power to modify or terminate labor contracts, allowing an emergency manager to consolidate or eliminate departments and allowing a current or recent elected official to serve as emergency manager.• Under the existing law, an emergency manager can renegotiate union contracts but not break them. The amendment would place some restrictions on the emergency manager’s ability to break contracts, namely, to prove it’s necessary, based on the financial emergency and the good of the public. Contract modifications would be temporary.

The article goes on to say that some policy experts wonder if the proposed law could run afoul of the state constitution, though the State Treasurer says that it can be backed up with a competing provision.

This blog post does a good job of looking at the current law as well as the new law.  It does have its own spin, but it’s still informative.

My own take on this is that from what I’ve read, the proposed new law could do things like break union agreements or even dissolve government entities, but that it doesn’t say it would do that. I also think that what is lost in some of the talk of power grab is that some Michigan cities have been prennial problems in the state.  Flint is in danger of going back to state control only ten years after going through it again.  Andrew Heller, a columnist for the Flint Journal notes that my hometown is acting like the cartoon character Wimpy from Popeye, saying it would pay someday for some money today:

Imagine you have a brother who is a, well, we won’t call him a deadbeat because he’s family, but he does have a nasty habit of spending money he doesn’t have.

In fact, a few years ago – much to everyone’s embarrassment – he ran up so many bills around town that the sheriff threw him in the clink and had a judge appoint someone to run his finances for him.

The idea was, “If we show him how it’s done, he’ll become smarter about how he spends his money and then he will no longer run up bills that he can’t pay.”

Except it didn’t work. The court-appointed money manager paid off your brother’s staggering bills and got him back on the financial straight and narrow. In fact, the turnaround in his finances was remarkable.

“Surely, he has learned some valuable lessons and will be able to run his own finances from here on out in a responsible, adult fashion,” you thought.

But the second the money manager left town, your brother went right back to his spendthrift ways.

“I can’t help it,” he cried. “I’ve always spent money like it was going out of style and I guess I can’t stop.”

So he didn’t even try. He kept right on spending money hand over fist on things he didn’t need and luxuries he couldn’t afford, and before long he had IOUs floating all over town.

That was when he came to you.

“Brother,” he said. “I’ve proven once again that I have all of the self-discipline and impulse control of a sailor on shore leave. But I’ve changed this time, I swear it. And if you can see your way clear to give me permission to borrow $20 million, I promise I will pay the money back later on with interest.”

Would you trust him?

Now, I totally understand what cities like Flint have gone through in the last 30 years or so.  But I also think that after a while a city that has been on hard times has to get itself cleaned up- it can’t just think that it can go to Lansing anytime cash runs short.

It’s hard to see my home state struggle like this.  But I also know that Michigan has been living in a state of denial for decades that somehow, someway the good ol’ days will come back.  There are people in my homestate who still think that King Auto will come back and the state will be rolling in the dough once more.  We don’t want to think that hard decisions have to be made, and there has to be a willingness to move forward towards new industries and ideas.

Maybe, the EFM bill goes to far, I don’t know.  But then, I’d like to think that a city that’s had to go through the embarassment of having a state-appointed manager try to get you back under control would be enough to scare said city straight.

I’d like to see what those who are talking about the end of democracy in Michigan would do when there are cities that are financial basketcases.