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Wednesday, October 22, 2014

Strong Parties v. Polarization

At The New York Times, Thomas B. Edsall writes:
Nathaniel Persily, a professor of law at Stanford, is a proponent of strong, well-financed parties. Polarization, he wrote in an email to me, “is a cost of many of these good government reforms. It is almost an intended cost if you think about it.” Why? Persily argues that the purpose of
good government reforms is often to make politics more about ideas and less about material or private gain. Well, we have ideological parties now, with clear distinctions and a broad gulf between them. There is nothing wrong with that in the abstract. However, a separation of powers system requires compromise between the parties. Transparency, open meetings, bans on earmarks, and weaker party machines make compromise more difficult.
In “Strengthening Parties,” a chapter in the forthcoming volume “Solutions to Political Polarization in America,” Persily contends that in the case of campaign finance, “the good good-government reforms that have been tried have, if anything, made things worse.”
The claim that reforms have made things worse is based on the interaction between the 2002 McCain-Feingold Act, which regulated campaign finance, and two 2010 court decisions, the Supreme Court ruling in Citizens United and the Court of Appeals for the D.C. Circuit decision v. F.E.C.
The McCain-Feingold Act prohibited political parties from accepting unlimited contributions from corporations, unions and rich people, which had come to be called “soft money.”
The federal court decisions, in contrast, explicitly allowed independent political groups – including both super PACs and politically active nonprofits – to accept all forms of soft money.
Pro-party advocates argue that McCain-Feingold in particular has undermined political parties, while court rulings have empowered donors and independent committees, many of whom have agendas more polarizing than those of the parties.

Tuesday, October 21, 2014

Media and Polarization

Pew reports on a new study of where liberals and conservatives get their news.

Conservatives believe that they are under-represented in the mainstream media. There is some evidence for that belief.

Striking Differences Between Liberals and Conservatives, But They Also Share Common Ground o

"We Are Not About to Send American Boys..." -- LBJ, Fifty Years Ago Today

Fifty years ago today,on October 21, 1964, Lyndon Johnson went to Akron and spoke about the Vietnam War.  He said: “Sometimes our folks get a little impatient. Sometimes they rattle their rockets some, and they bluff about their bombs. But we are not about to send American boys 9 or 10,000 miles away from home to do what Asian boys ought to be doing for themselves.”

On September 24, however, Defense Secretary Robert McNamara had told him that the situation was likely to deteriorate after the election:
President Johnson: I’ve been reading about all these coups out there, and all the problems of [South Vietnamese leader Nguyen] Khanh and everything. I was just wondering what’s happening to me. [Both chuckle.] I start out with a war.
Now, tell me, what’s your evaluation of the stuff we’re getting from [Ambassador Maxwell] Taylor tonight? I’m just reading it, and it doesn’t look very good.
McNamara: It doesn’t look good, Mr. President. It’s no different, you know, than what we’ve seen here and sensed here for some time. I think the odds are we can squeeze through between now and the next several weeks. But it certainly is a weak situation.
I’m going to meet tomorrow at 11:00 with Dean Rusk and Mac [Bundy] and others to reappraise it and see what we think can be done, if anything. I really don’t think there’s much we can do in the next several weeks to change the outlook. But neither do I think it’s going to completely collapse in that period.
Afterwards, though, after the election, we’ve got a real problem on our hands.

Monday, October 20, 2014

Polarization and Inequality

Pew reports that Democrats are more likely than Republicans to say that inequality is a major national challenge.
There is also partisan disagreement on the most important reasons for the gap between the rich and the poor. Republicans (39%) are most likely to say it exists because some people work harder than others. Democrats (17%) and independents (23%) are much less likely to blame the poor’s work ethic.
Republicans (28%) also say inequality is a product of government economic policies, a view held by 24% of Americans overall. Democrats (20%) and independents (25%) are less likely to point the finger at government, putting more emphasis on shortcomings of the U.S. education system. A fifth of Democrats and 17% of independents (17%) cite the educational system as the most important reason for the rich-poor gap compared with just 9% of Republicans.
Republicans and Democrats also strongly disagree on the role of taxes in addressing the gap between the rich and the poor. About seven-in-ten Republicans (71%) favor a policy of low taxes on the wealthy and corporations to encourage investment and economic growth as a means of reducing inequality. The same number of Democrats (71%) back high taxes on the rich and companies to support programs that help the poor. A plurality of independents (48%) also favor high taxes.

Sunday, October 19, 2014

Outside Money

Jim Rutenberg writes at The New York Times:
In 2010, the Citizens United decision by the Supreme Court effectively blew apart the McCain-Feingold restrictions on outside groups and their use of corporate and labor money in elections. That same year, a related ruling from a lower court made it easier for wealthy individuals to finance those groups to the bottom of their bank accounts if they so chose. What followed has been the most unbridled spending in elections since before Watergate. In 2000, outside groups spent $52 million on campaigns, according to the Center for Responsive Politics. By 2012, that number had increased to $1 billion.
The result was a massive power shift, from the party bosses to the rich individuals who ran the super PACs (as most of these new organizations came to be called). Almost overnight, traditional party functions — running TV commercials, setting up field operations, maintaining voter databases, even recruiting candidates — were being supplanted by outside groups. And the shift was partly because of one element of McCain-Feingold that remains: the ban on giving unlimited soft money to parties. In the party universe, rich players like the Wylys, Tom Steyer or the Kochs were but single planets among many. The party bosses had to balance their interests against those who brought just as much to the table in the form of money or votes. A party platform has to account for both the interests of the oil industry and those of the ethanol industry; those of the casino industry and those of the anti-gambling religious right; those of Wall Street and those of labor.

With the advent of Citizens United, any players with the wherewithal, and there are surprisingly many of them, can start what are in essence their own political parties, built around pet causes or industries and backing politicians uniquely answerable to them. No longer do they have to buy into the system. Instead, they buy their own pieces of it outright, to use as they see fit. “Suddenly, we privatized politics,” says Trevor Potter, an election lawyer who helped draft the McCain-Feingold law.

Saturday, October 18, 2014

Bodegas and Butt-legging

In Federalist 21, Alexander Hamilton explained:
It is a signal advantage of taxes on articles of consumption, that they contain in their own nature a security against excess. They prescribe their own limit; which cannot be exceeded without defeating the end proposed, that is, an extension of the revenue. When applied to this object, the saying is as just as it is witty, that, "in political arithmetic, two and two do not always make four." If duties are too high, they lessen the consumption; the collection is eluded; and the product to the treasury is not so great as when they are confined within proper and moderate bounds.
Michael Wilson reports at The New York Times:
A pack of Marlboros purchased at Virginia’s low prices and sold at New York City’s going rate can put five or six dollars in the seller’s pocket. These smuggled cigarettes are not hard to find — the city’s Department of Finance said inspections yielded these cigarettes in 48 percent of bodegas visited in recent inspections. They are tucked away in compartments and camouflaged with fake tax stamps.
In early 2002, the city, the state and the federal government collected a combined $15.80 in taxes on every carton of cigarettes sold here. Today, that number is $68.60, or almost $7 a pack. With the increases in taxes, more packs flowed up from the South, in cars and overstuffed minivans and in the underside luggage compartments of passenger buses, said Maureen Kokeas, director of the office of tax enforcement for the city’s Department of Finance. The cigarettes are kept in storage units and quietly sold, a carton or three at a time, to bodegas.
A bodega owner caught last week with 10 cartons of smuggled Marlboros and Newports explained the math. He had bought them the day before from a man he did not know. “He charged me $65 a carton,” he told deputies. That is far cheaper than cartons bought or sold in New York. He shook his head in despair as the deputies took the cigarettes away, his $650 cash investment headed to an incinerator on Long Island, up in smoke.

Friday, October 17, 2014

The Economic Devastation of Newspapers

Overall the economic devastation would be difficult to exaggerate. One statistic conveys its dimensions: the advertising revenue of all America's newspapers fell from $63.5 billion in 2000 to about $23 billion in 2013, and is still falling. Traditional news organizations' financial well-being depended on the willingness of advertisers to pay to reach the mass audiences they attracted. Advertisers were happy to pay because no other advertising medium was as effective. But in the digital era, which has made it relatively simple to target advertising in very specific ways, a big metropolitan or national newspaper has much less appeal. Internet companies like Google and Facebook are able to sort audiences by the most specific criteria, and thus to offer advertisers the possibility of spending their money only on ads they know will reach only people interested in what they are selling. So Google, the master of targeted advertising, can provide a retailer selling sheets and towels an audience existing exclusively of people who have gone online in the last month to shop for sheets and towels. This explains why even as newspaper revenues have plummeted, the ad revenue of Google has leapt upward year after year—from $70 million in 2001 to an astonishing $50.6 billion in 2013. That is more than two times the combined advertising revenue of every newspaper in America last year.
The other online innovation that has devastated newspapers is Craigslist, the free provider of what the newspapers call “classified advertising,” the small items in small print used by individuals and businesses for generations to buy and sell real estate and merchandise, and to hire workers. Twenty years ago classifieds provided more than a third of the revenue of The Washington Post. Craigslist has destroyed that business for the Post and every major paper in the country.