The Gas Tax Will Encourage Us To Do What?

I'm a cheerful proponent of public policy as behaviour modifier. You don't want people to drink to excess? Limit when the bars are open, where alcohol can be obtained, tax the beverage and crack down on DUIs. You want people to take public transportation? Put more buses/trains into service, cut the rates - and stop building garages and parking lots and raise the rates on the ones already in use. We may be uncomfortable with the shifts at first, but chances are efforts like this to modify how the citizenry handles undesirable behaviour will be successful in the long run.

However, public policy to change behaviour needs to be presented with rational goals which can actually be met without incurring more hardship than benefit. This is why the proposed gas tax, which I otherwise support, raises my hackles when its proponents talk about such things as "downsizing commutes" as if in the current economic situation downsizing one's commute were a viable option without other horrific impacts.

To be sure, Ryan Avent makes many good points about how energy demand brought us to this nasty place. And most certainly I agree with almost all his points about how we got here and how we can get back out again. But expecting the overextended commuter to relocate closer to work or find work closer to home, when the real estate market is in shambles and there are seemingly ten layoffs for every new hire, is remarkably shortsighted and ignores the hardships the consumer now faces even as it touts this idea as a solution to those hardships.

When The Daily Dish picked up this particular facet of the argument - that the gas tax might be worth reconsidering - I fired this off:

In this case, I must take issue with one point that keeps cropping up in the energy consumption debate: the idea that citizens of any country, particularly the US, can manage their commutes as described.

The Right's argument, that each citizen has the right to drive his/her H2 Hummer 100 miles each way to work if s/he feels like it, fails to distinguish affluence from waste. By elevating choice over practicality this argument panders to the same culture of decadent excess that other segments of Conservatist thinking denounce, and the philosophical disconnect seems invisible to the Conservatist theorists. Pop culture, when thinking of wealth, celebrates Larry Ellison and Donald Trump over Warren Buffett and Sam Walton, and made much of Lay, Skilling et al when Enron was in vogue. While FORBES may take notice of the distinction, the American Right as a movement does not, and pop Rightspeak continues to confuse excess with success.

The Left's argument seems to break down to some basic concepts. First, frugality is a virtue that ought to be encouraged. Second, wasteful habits can be successfully discouraged through public policy. Third, adjusting one's lifestyle in such drastic terms as shrinking one's commute is actually manageable in the short term. The first item is easily defended: the second, while less so, is still defensible. It's the third concept that really irks.

The current economic conditions in the US are savage: mushrooming unemployment, successive waves of commercial contractions, diminishing opportunity. Those of us left without employment by the recent turmoil are faced with difficult choices, and one of those is whether to remain in a given job market or relocate to better areas. Any commute in those circumstances is acceptable to the jobseeker. Conversely, however, employers are presented with a massive range of applicants for ever fewer openings, yet steadfastly holding on to the illusion that a given candidate from outside the immediate market is a risk due to the relocation or commute effort.

Were this any other economic crisis mobility wouldn't be such an issue. But as this one first exhibited as a real estate collapse, relocation for employment is a double-edged sword. Anyone lucky enough to be secure in his/her housing faces potentially catastrophic loss if s/he sells, and is forced to factor unemployment into that equation; this ugly arithmetic has to be weighed against the benefit of opportunity elsewhere. Anyone paying a substantial mortgage who becomes part of the newly unemployed faces foreclosure as a very real possibility if s/he remains in the local market and short sale at best if s/he moves. Anyone renting faces possible eviction and increased difficulty finding new housing in any market. In each case, prospective employers are increasingly disinclined to entertain candidacy from anyone not immediately available and within a very narrowly defined geographical radius.

Against this backdrop we have the argument that "downsizing commutes" is not only a worthwhile endeavour in the abstract but an achievable end of US energy policy within the next few years.

The electorate is beginning to understand that it is fortunate to HAVE a commute at all, and that making changes to it are beyond difficult: with the house worth too little to merit selling or the rental deposit too high to forfeit, and credit too tight to consider replacing the daily driver without angst, reengineering a commute on one's own makes little sense. For those without, employment is increasingly something to be found elsewhere: if that "elsewhere" is within an acceptable driving distance then it saves the personal disaster that moving has become in the current conditions.

For those still working, making ends meet with what they already have has become the order of the day: drastic changes are out of the question, and "downsizing" one's commute equates to either risking one's income in the ever-harsher job market or destroying one's net worth with a classically ill-timed residential move. For the unemployed, the net worth hit is a given at this point: the difficulty lies in convincing a prospective employer of that. Neither side is in any position to alter commute habits substantially without far more severe consequences.

I am tired of seeing US auto manufacturers obstruct energy efficiency in the name of short term profit. I am tired of civic bodies consistently failing to address public transport in a meaningful way. And I wholeheartedly support any practical means of encouraging energy efficiency. But suggesting that one's commute is a manageable part of that equation when housing values continue to gyrate and new employment opportunities are dwindling is ludicrous.

H/T Andrew Sullivan.

A Dream Deferred

Carl over at The Reaction has put up a very thought-provoking piece about the steps the Obama administration and Congressional leaders are taking to advance a progressive agenda. He's concerned - and with reason.

It's a radical departure from congressional precedent, in which budget rules have been designed and used to reduce deficits, not expand the size of government. And it promises bitter divisiveness under an administration that has made repeated promises to reach across the partisan divide.

For my part, I see the move as something rather different, and dangerous in its own way.

One of my longest-held political principles is that a budget process that can be balanced over time is critical tot the stability of any government. Keynes spoke to this eloquently: when the economy is weak, the government must spend to stimulate production, but when the economy is strong, the government must recoup those expenditures as preparation for the next downturn. Economists following Keynes, and economic policymakers, have made ample use of the first half of the principle. They have, however, conveniently forgotten the second.

Congress has presented multiple pieces of legislation to require the federal budget be balanced as a matter of practice. The amendments offered, however, were to require a balanced budget every year. This, if Keynes is correct, is not only impossible but massively unwise as it prevents the federal government from taking action to stimulate a faltering economy even as it likewise prevents the same government from recouping those losses and posting a net gain during times of prosperity. Balanced budgets under these conditions would enshrine a certain amount of debt: any obligation outstanding would necessarily be retained as a sort of credit line that once paid off could never be incurred again, preventing its closure just as the interest paid on it would become - as has become the de facto case - merely the cost of governance.

The GOP showed its hand in the 90s, demanding a balanced budget. It was no doubt to their chagrin that the Clinton administration, buoyed by a thriving tech sector, was able to oblige. However, the taxation required to maintain the progression was successfully presented as an excessive burden. Whether this was an ideological position, or merely maneuvering to sabotage the economic success of the Clinton years, is not clear. What is clear is that the Bush administration lost no time revising the tax code, sabotaging the balanced budget effort even as they made the burden less on the higher economic echelons of society.

I will freely admit that I have never had a particularly high opinion of the Bush presidency. There are many reasons for this, the brutality of the GWoT and radical rewriting of public ethics being chief in my complaints. However, the effective nuking of the federal budget is not far behind. Bush's policies did little to diminish the size of government except in areas of particular interest to the most radical of the administration's supporters. Reduced taxes placed an excessive burden on the existing infrastructure. And the various efforts of the GWoT squandered what little was left, leaving the US massively in debt and all hope of a short path to a balanced budget and reduced federal obligation in the dust.

This is the fiscal mess that Obama has inherited along with the economic collapse. Abandoning the irresponsible tax cuts of the Bush administration would in ordinary times be a responsible measure aimed at balancing the budget. Under the present circumstances, however, a balanced budget is as realistic as flying to the moon on a contraption built of string and sealing wax. The shattered economy combined with the enormous costs of occupation of two foreign lands make any attempt to balance the federal budget in the near future suicidal at best.

In turn, the radically increasing costs of healthcare in the US present the most likely source of bankruptcy, both private and public. Healthcare costs are increasing at multiples of inflation just as the average salary is shrinking and as employment is falling faster than the GOP's polling numbers. Social Security may not be an issue for many years yet, but Medicare is fast approaching a critical point where, between the needs of an aging population and the skyrocketing costs of preserving that population's health, it will be unable to meet the need.

Indeed, the pressures of keeping healthy under the US system are becoming so bad that medical tourism is fast becoming the avenue of choice for anyone facing major medical procedures. Walking with Ghosts has a fascinating projection on how many US citizens are projected to seek medical care overseas, not merely for the sake of the novelty of travel involved but also to save considerable expense. Should this trend progress much further, as the costs of healthcare abroad present an increasingly small fraction of the costs of the same care in the US, the healthcare system will either fail utterly - a tragedy for any nation - or outsource such procedures as a matter of course - which would deprive the US of major healthcare talent and needed tax revenue, producing a like result.

Under these circumstances, substantial review of US healthcare policy is not just a necessity but a mandate.

The recent step taken by the Congress - to include a new healthcare bill in the current budget legislation as part of the reconciliation process - is therefore most necessary, particularly if the long-term health of the US economy and the federal budget are to be maintained along with the long-term health of the US citizenry.

Carl's suggestion, that this is a less-than-usual method of handling such legislation, and that this is a substantial effort on the part of the federal government, is well taken. And were there a rational opposition party in place to advocate for a more appropriate or effective solution it would have substantial weight.

Unfortunately, the current crop of GOP congresspeople seem committed to opposing the Obama administration, and the Democratic majority in Congress, on every initiative and proposition. The level of spite and malice involved in their unthinking nay-saying is palpable. One need look no further than the initial budget debate to see proof: in response to a dense, carefully calculated budget proposed by the Democrats, the Republicans produced a couple dozen pages of theoretical waffle with not one single quantifiable alternative proposal to present. The recent kerfluffle with Somali pirates is equally indicative: no action taken, deferred or prevented has been met with anything but derision, and many condemnations overtly contradict the others. The GOP has indeed become the Party of No, squealing like a small child who has just discovered its new favorite word and ignorant of the meaning or consequences of its use.

Faced with circumstances like these, and able to present a majority government in both branches tasked with enacting legislation, the Democratic party has little choice but to use the methods available to it. If that means bypassing the irrationality presented by the opposition, then that is obviously what must be done to achieve progress.

I know too little of the new healthcare initiative to comment intelligently on it at this time. However, I know more than enough of the current system to say with conviction that it is well and truly broken, perhaps irrevocably. If healthcare is to remain a resource available to the citizens of the US it must be rethought substantially, and rethought soon. Should this new programme be at all productive I believe it worth the risks. And swelling the federal bureaucracy to achieve that, after the lessons of the last twenty years, is far more easily remedied than might be thought: the only uncertainties are in how that reduction would be accomplished and whether the resultant costs are worth preserving the small-government ideal.

UPDATE: As to the "radical departure from congressional precedent" Carl mentions, ThinkProgress has an effective rebuttal.

Alexandrian Bonfire Redux

Andrew Sullivan has a telling transcript from a Teabagging event:

Woman: [Shouts] “Burn the books!” [applause]
Man: “I don’t think you were serious about that, were you?”
Woman: “I am too.”
Man: “Burn all the books?!”
Woman: “The ones in college, those, those brainwashing books.”
Man: “[laughs] Brainwashing books?”
Woman: “Yes.”
Man: “Which ones are those?”
Woman: “Like, the evolution crap, and, yeah...”

Wow. Just like all those anti-knowledge folks were supposed to have done.

About That Ugly GOP Budget Projection

I've been reading the various posts by several eloquent individuals who have thoroughly and effectively dissected the GOP “budget” documents. Doing so, I noticed that there is something in the data that everyone else has missed.

The GOP graph that has spawned so much ridicule shows a radical increase in federal share of GDP starting about 2030. The GOP is claiming that this upswing is a consequence of current Democratic fiscal policy. However, the upswing is two full decades out. If this were a consequence of the current administration's policies, one would expect this upswing to occur much earlier. It does not.

This tells me one thing:

Barack Obama isn't the problem.

Not Obama. Not Pelosi, nor Frank, nor Dodd, nor any of the other Democratic figures currently in power. Obama's term will end no later than January 2017, so unless the numbers are an indirect way for the GOP to assert Obama will seek to repeal the 22nd Amendment and pull an Hugo Chavez so he can play the next FDR, then Obama will not be president for more than a decade before the increase hits. The others will likely all have retired some time before the moment when this upswing occurs, so they're out, too.

So the GOP isn't all that scared of our current administration, or its policies, or its current allies. But they are deathly afraid of something.

I see four possible causes for this.

1) Somewhere there's a handful of twenty- or thirty-something Democrats that scare the pogees out of the GOP. Who these people are, where they are, and what they've done to deserve this almost irrational fear I cannot say. But the President and Congress elected in 2028 clearly deserve the lion's share of the blame for the uptick, and whoever the GOP thinks these people will be are the chief culprits. Given recent history, I'm inclined to look at the disillusioned among the veterans of the GWoT and the Iraqulous War, who are through with GOP talking points and ready for Something Completely Different.

2) The graph includes the assumption that there will be a GOP successor to Obama, who will screw up the economy so badly that the electorate will welcome Democratic proposals unconditionally, and whose legacy will require the kind of expenditure indicated. Given how thoroughly ShrubCo cooked the federal goose in eight years, this is a very real potential if the GOP continue to pursue the same policies they have for the last fifteen years. This also assumes that the GOP understands that its policies are designed to fail, which torpedoes their own arguments just as it explains their projections.

3) The increases, as Conor Clarke points out here, may be related to increases in spending on Social Security and (especially) Medicare and Medicaid. This is at once admission of the failure of private medicine, assumption that both programmes will continue unchanged, which is unlikely given that the demands on both programmes are largely driven by skyrocketing healthcare costs already under close scrutiny – and a blatant case of elder bashing, since the problem clearly comes from all those old folks living so long.

4) Since the graph indicates percentage of GDP, not absolute dollars spent, the GOP is predicting a total private-sector collapse in two decades. Since their current financial model is one of minimal public investment, this assumption would describe the total halt of private industry as the continually-neglected domestic infrastructure collapses. In the resultant environment, the economy would require not merely repair to but complete replacement of domestic infrastructure: roads, power transmission, water, sewer and other systems will not only need repair and expansion, but outright replacement. Replacement is a lot more expensive than simple repair. It would also require public expenditure to replace private investment, which would no longer be possible if the entire economy crashes. Again, this points to GOP budgetary constraints, and the continuing neglect of public resources fostered by the party's ideology, far more than Democratic proposals to reinvigorate the economy and maintain the public sphere.

Of the four, the first seems to me the most hopeful scenario. Each of the others implies some sort of hardship for the nation, and half the options imply that hardship is a direct consequence of GOP fiscal and domestic policies.

In any event, the graph itself gives the lie to their own rhetoric. Obama's policies by themselves are not the problem: if they were, the increase would occur far earlier. The GOP is afraid of something else. Whether it's a SuperDemocrat entering office, or their own misdeeds coming back to haunt them, or some other factor, is unclear. What is clear is that it's not the next eight years that bothers them most.

Cross-posted at The Reaction.

Pathological Governance

The number of commenters who, noting the GOP's continued insistence on clinging to a spending-free means of bracing the economy, question the sanity of that party is growing, and the figures reaching that point are becoming increasingly notable and respectable.

Words like "crazy," "irresponsible" and "mindless" are circulating about the Republican efforts in the House and Senate to produce stimulus through tax cuts. Meanwhile the GOP leadership is calling for party unity in opposing the administration's current plans - and so far they're getting it.

The voices opposing such a narrowly ideological approach are growing, and growing louder.

Paul Krugman:

Look at what just happened, we had a proposal I think it was McCain’s proposal for an economic recovery package, his version of it which was all tax cuts, a complete, let’s do exactly what Bush did, have another round of Bush-style policies. After eight years which that didn’t work and we got 36 out of 41 Republican senators voting for that which is completely crazy. So how much bipartisan outreach can you have when 36 out of 41 republican senators take their marching orders from Rush Limbaugh?

Dean Baker:

It's sort of like baseball being a type of sport. Some people may not like baseball, but that doesn't change the fact that it is a sport.

If the Republicans were to insist that baseball is not a sport then it would be reasonable to assume that they do not know what the word "sport" means. Similarly, if the Republicans do not understand that any spending that directly goes into the economy is stimulus, then it implies that they don't know what "stimulus" means.

John Cole:

I really don’t understand how bipartisanship is ever going to work when one of the parties is insane. Imagine trying to negotiate an agreement on dinner plans with your date, and you suggest Italian and she states her preference would be a meal of tire rims and anthrax. If you can figure out a way to split the difference there and find a meal you will both enjoy, you can probably figure out how bipartisanship is going to work the next few years.

Rachel Maddow (with an especially crisp take):

"Cutting food-stamp funding to attract Republican support is proof-positive that the Republicans are not trying to come up with an effective stimulus here. If your house is on fire, and you call your fire department, and your fire department tells you to pour gasoline on the flames, they're not actually making a good-faith effort to help you put out the fire. They're not a good fire department.

The GOP's proposals are certainly good for one vision of the United States - that of the United States circa 1790. When the economy is largely agrarian and communities are largely self-sufficient, lower taxes would help the citizenry as a whole - and if the few embryonic industrialists and the merchants in the big cities like Boston, New York, Philadelphia and Charleston and Charleston were hurt by lack of investment capital and market demand the impact to the entire nation was minimal. The country has advanced far beyond that model, however, and the federal government's funding comes from very different sources than it did in those days. Yet somehow the GOP either doesn't understand that - or doesn't care.

As if this isn't bad enough, the GOP is railing about the lack of bipartisanship. This after the administration bent over backwards to seek their input, incorporate their proposals and present a reasoned package for their review - a package they virtually uniformly rejected. Clearly their definition of "bipartisan" is "listening to us until we browbeat you into accepting our proposals without exception."

The only sane rationale I can find in the GOP position is this: the New Deal was a flawed, unnecessary response to economic crisis - now we have a new crisis we can put our approach to work and prove that.

Put mildly, that is a horrifically irresponsible approach to a very immediate emergency. It reeks of Social Darwinism: if the larger community survives it doesn't matter who's hurt in the process, and if some starve/emigrate/whatever it just weeds out the unfit.

The political aspects are no more savory. For far too long now we've seen Republican obstructionism to Democratic proposals. It's been couched officially in terms of fiscal responsibility, effectiveness and personal freedom. But consider this line from William Kristol in 1993 talking about another big Democratic agenda item:

"Healthcare," Kristol wrote, "is not, in fact, just another Democratic initiative ... . It will revive the reputation of the ... Democrats, as the generous protector of middle-class interests."

As my Friend Mustang Bobby at Bark Bark Woof Woof would translate: "We Republicans can't let the Democrats pass this [insert Democratic agenda item here], because if we do, we'll make the Democrats look good."

Holding onto power in a democracy simply for the sake of holding onto power is not sane policy. Resisting a public infusion into an economy suffering from a lack of private resources just to resist public expenditure is not sane policy. Wilfully neglecting domestic infrastructure due to the expense while engaging in imperial nation-building at obscene and unmanaged cost is not sane policy. Opposing deficit spending in principle after eight years of the most profligate overspending by your own party is not sane policy.

There's a very apt phrase for the noisemaking the GOP is doing - and has been doing for the past several months (if not years) - "fiddling while Rome burns."

Yet somehow the GOP seems to think they can rationalise this approach as good for the US.

The Party of Lincoln - even the Party of Theodore Roosevelt - is obviously no more. Hooverian economics are the preferred solution for these people, on the premise that such policies were not allowed time to work the last time they were employed. But policies much like them have been tried: in the 1830s, the 1870s and the 1900s. And the GWB economic policies were more akin to Harding's and Coolidge's than Hoover's, while the economic situation during the last eight years more closely resembled the boom-and-bust cycles of the 19th century than the steady (if illusionary) growth of the 1920s. All this while, instead of following the isolationist non-interventionism of earlier administrations, Bush proceeded with the most costly elective global misadventure in US history, all on essentially borrowed funds.

The GOP wants to look to its own interrupted efforts at economic policy for solutions to today's crisis: a crisis very much of their own making. Larry Summers answered that approach best: "The people who presided over the last eight years ... [don't] seem to be in a strong position to lecture on history."