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Thursday, April 16, 2009

The Tea Parties: Why I Didn't Participate

I consider myself a problem solver and inherently distrust marches or protests, which I see primarily as unconstructive and just a qualitative step away from the contagion of uncivility and mass riots and unjust attacks against people and the property of other people, whom worked, saved, and invested to buy a house or create a business.

In questioning rallies, I'm hardly espousing relativistic ambivalence to the truth or intellectual surrender of moral and political principle. It's more that I consider them to be ripe grounds for emotional manipulation, and I'm more intrinsically interested in the free market of ideas and solutions, which are missing from a kumbaya moment of Obamaian ethereal ecstasy, complete with mantra chanting of vacuous slogans.

My distaste for these contrived events stems from my years at Our Lady of the Lake, located in a poor, heavily Hispanic section of south San Antonio. Operated by the Sisters of Divine Providence, the college and its faculty were very progressive (i.e., liberal), with many sisters living not in the convent on campus but in the surrounding area. I mentioned in a prior post being required by an OLL professor to attend a campus lecture by then unknown Alex Haley on what later became the basis of an American television phenomenon, "Roots".

Even in those salad days of being a liberal, I chafed at the excesses. In one case, I heard a federal investigation cite, among other things, our wonderful but small philosophy department didn't have sufficient Hispanic representation, with tenured professors Rev. James Lonergan, with an Irish background, and Sister Mary Christine Morkovsky (of Czech descent). I have no doubt if class enrollments justified it and qualified Hispanic candidates were available and interest, they would have been given full consideration.

But in particular, I recall many Mexican-American students, some of them friends whom lived in the same dorm, noisily picketing in front of the school early in my tenure, winning coveted local news coverage. In some cases, I could barely hear my professors lecture. Particularly odious were the baseless smears, including a racist charge against one of my professors, a sister of Divine Providence. I was motivated enough to sign a petition disavowing the protests.

I had the greatest respect for my Chicano colleagues, many of whom were first-generation college students from migrant families with limited means. My best friend Ramon, an education major who graduated the year before me, once went with me to a UT recruiting event at the college; I was hoping to go to graduate school there. The recruiters mobbed Ramon just as soon as he entered the room, while barely even acknowledging my presence. Ramon was embarrassed by the disparity of attention he was receiving, based primarily on his ethnicity, pleading with them to talk to me instead. The point is, I never saw the need for the protests and people using the occasions to rationalize uncivil acts by mobs. The college has eagerly embraced ethnic students and has had outstanding programs in education and social work.

The tea party theme arose with CNBC's Rick Santelli, whose famous rant against subsidizing the mortgages of other workers included a proposal to have a Chicago tea party on the Fourth of July. Over time the date changed to Tax Day and parties mushroomed across the United States.

The tea party theme , of course, focused on taxes and spending, and anyone who has read my posts knows I see high taxes and spending as anti-growth, and I am also concerned about regulations, which I see as an implicit form of taxation.

The problem I have with the tea parties, which were intentionally antiestablishmentarian with Republican leaders such as RNC Chairman Michael Steele denied access to the podium, is that it is very difficult to channel these concepts into responsible government, and quite often populist responses focus on the wrong questions.

The Obamaian strategy has been to coopt the GOP strategy of lowering taxes by trumping any Republican tax cut proposals for the majority of household wage earners, willing to cede the votes of higher earners, a small minority of voters. What's harder to conceptualize is the fact there aren't enough high earners, and one is reminded of the famous saying by anti-Nazi Pastor Martin Niemoller:
In Germany they first came for the Communists,
and I didn't speak up because I wasn't a Communist.

Then they came for the Jews,
and I didn't speak up because I wasn't a Jew.

Then they came for the trade unionists,
and I didn't speak up because I wasn't a trade unionist.

Then they came for the Catholics,
and I didn't speak up because I was a Protestant.

Then they came for me —
and by that time no one was left to speak up.
The ironic thing is that when you add the households that dropped out of paying federal income taxes under the Bush tax plans to the additional ones from the Obama program, you have nearly half of American worker households whom not only do not pay any federal income tax but (if anything) feel entitled to refundable tax credits. Never mind the question of moral hazards: what we have here is not the American Revolution's theme of taxation without representation, but representation without taxation. A representation which has no stake in careful spending of other people's tax money, other than this vague notion that future generations will be on the hook for the exploding Obamaian federal deficit.

It's really tough to do the responsible thing, and the easiest thing for Congress to do is paper over the differences and let the next Congress deal with the real problems. Let me give an example from my computer consulting experience. A few years back I was looking into a proposed project which involved upgrading an Oracle WebDB application to Portal at a Navy base in southern Maryland. The problem was that Oracle had desupported WebDB a couple of years earlier, and the Navy administrators of the application had ignored desupport notices. There was one supported upgrade path for WebDB, but it required installing an interim version of Oracle's flagship application server--which had also been obsoleted, and Oracle Support has a policy of refusing to release obsoleted products. When I complained to the Oracle representative, I was curtly told that the Navy should have thought about it years earlier, because desupport is always announced ahead of time.

Similarly, I have found Luddism alive and well in other bureaucracies as well. When Oracle desupported its character-mode interface of Oracle Financials in place of a less usable, menu-driven front-end, I found myself attacked by staff accountants, whom were reacting to false rumors of problematic upgrades and more time-consuming "busy work" to perform core tasks.

You see, Obama has been preaching change, but the proof of real change is in the pudding. If you are not talking about streamlining how government operates, eliminating turf battles among redundant or overlapping government agencies, but simply negotiating the amount of percentage increase in agency budgets, you are not talking real change, but more of the same.

Spending cuts are never popular, particularly for recipients of the program and the bureaucracies that serve them. Efforts to contain the federal deficit have been almost laughable. Just look at the trouble the Pentagon has had trying to close redundant domestic military bases or seeing politically powerful Congressmen pushing constituent-produced military goods on the Pentagon that it didn't request or want. Even when it comes to obviously inappropriate earmarks, the Congress has been brazen; former Alaskan Senator Ted Stevens, a Republican, threatened his Congressional party colleagues at the time with his own resignation if they didn't go along with funding for the infamous Bridge to Nowhere.

It exasperates me when the opposition responds by pointing out earmarks are a materially insignificant portion of the national budget. Are you kidding me? If you have a pest problem with bugs showing themselves in your residence in the light of day, do you regard that as an anomaly or indicative of a far worse problem, say that you might discover by turning on the kitchen lights in the dead of night?

To be fair, conservatives do try to personalize effects of Obama/Democrat overspending through metrics such as dividing the amount of new spending by the target number of new jobs, or averaging the accumulative deficit on a household level. But on a political level, it's very tough to win seats playing the role of bad cop to the Democrats' promises of financially irresponsible new entitlements.

The liberal mass media unfairly portrayed Obama's full-court press on passing a nearly $800B so-called stimulus package, with no real attempt in the House of Representatives to negotiate and the Senate Democrats focusing not on providing an authentic bipartisan mandate, but strictly a strategy of peeling off enough liberal Republican senators to ward off a filibuster. The nearly unanimous Republican rejection of both the stimulus and 2010 budget, representing the largest fiscal expansion in American history, was characterized as "obstructionist". Based on what? Republicans, hoping to compromise, were told "elections have consequences". John McCain, who last fall gave arguably the most honorable concession speech in American history, found no Democrats willing to compromise anything material.

Oh, to be sure, the 3 Republican senators who negotiated a filibuster bypass of the stimulus bill (Collins, Snowe and Specter) have argued the stimulus bill would have been larger. Let's get this straight: given evidence that the sham justification for the bill's speedy passage--multi-multiplier infrastructure projects--would have only minor disbursements over the short term, how can the referenced senators justify the fact that several federal agencies got double-digit or higher increases? Why was it necessary to put anything beyond modest relief spending increases (to cover unemployment/COBRA extensions) and some merit-based infrastructure spending in the measure? Why was it, given the prospect of lower than expected federal revenues, we didn't see any meaningful federal cutbacks? Oh, but in the Alice-in-Wonderland world of progressive economics, retention of unnecessary federal workers duplicating public services is seen as an "economic stimulus". The mass media and liberal politicians call private sector bankers, stiffed by homeowners not paying off their mortgages, as "greedy", but when government regulators fail to do their job and anticipate the problem, there are no calls for their termination.

Their reward? Political attacks for downsizing state/local bailout money. Has the liberal mass media focused on reckless activities of Democrats over the years, expanding programs and ignoring pension funding issues, leaving future legislators with the hard decisions to make? Now we have rainy days, where is the progressives' rainy day fund? Instead, we are facing the reality of the progressives' Ponzi scheme on the American taxpayer. Never mind the disgraceful AIG failure to post reserves for their credit default swaps: how could progressives fund programs, not anticipating the likely event of revenue shortfalls in the event of a recession? And these same Democrats hypocritically dare to attack bailouts in the financial sector of the economy?

This leads me back to a point raised earlier about the populists focusing on the wrong issue. Let's recall the AIG issue and the infamous contract bonuses. The fact is, AIG could have gone into bankruptcy, in which the contracts could have been nullified. Or the government could have negotiated, as the condition of a bailout, that management agree to waive or defer contract bonuses; chances are, the managers, facing a choice between a bailout and the uncertainty associated with bankruptcy, would have voluntarily agreed. Instead, the press painted a picture of the American taxpayer essentially subsidizing, ex post facto, the extra pay of incompetent managers. Not a word about incompetent government regulators, incompetent government negotiators, incompetent bond raters (whom retained AIG's AAA rating for too long, when AIG clearly wasn't managing risk), etc.

Instead, what we see is a rotation of government, not a change in or of government. We see that the Democrats, who failed to balance the federal budget in the decades preceding the 1994 GOP takeover, have failed to balance the budget since their return to power in 2006 and will continue to fail to balance the budget in the foreseeable future.

We have a President whom is long on rhetoric but short on results. We have fellow citizens unable to recognize a President's paying lip service vs. material, authentic change. "By their fruits you will know them."

Obama continues to build on a long history of Democratic politically convenient policy nuances, e.g., "I personally oppose abortion, but I support a woman's right to choose". For example, Obama opposes vouchers for private school enrollment, but he supports (state-supported) charter schools.

Let's go to Obama's lip service to charter schools: How much of the $100B of education spending in the so-called stimulus bill will provide meaningful competitive educational choice for students from limited-means households? What we see is unprecedented amounts of money going to the SAME public school administrators and the SAME public school teachers. The same ones, for example that, despite all the money thrown at them over the years, result in abysmal mean educational performance and graduation rates at Detroit schools.

Remember Obama's emotional appeal during his State of the Union address over funds to rebuild a crumbling South Carolina public school? No discussion, of course, on the implications on local and state accountability for public school infrastructure or even on appeals for community volunteers to repaint the school and make repairs. (I don't think Obama's union bosses would much care for that idea.)

Kevin Ferris, in the April 10 Wall Street Journal, points out that banks are reluctant to lend to charter schools, typically without startup building funding, because their funding is only guaranteed for 5 years. Jay Greene, in an April 16 column entitled "The Union War on Charter Schools", cites Eva Moskowitz, former NYC Council education committee chair, whom described "a union-political-educational complex that is trying to halt progress and put the interests of adults above the interests of children." He references a number of studies demonstrating comparative advantages of charter school students, most notably a study by Harvard economist Tom Kane which showed independently-operated charter school students significantly outperformed students whom lost the lottery and returned to regular district schools--but charter schools staffed by unionized teachers and run by school districts had no such performance advantages. Greene notes that NYC teacher unions have managed to use undemocratic "card checks", the same issue that recently failed to overcome filibuster obstacles in the U.S. Senate, to unionize two successful charter schools, and the unions are backing a likely budget that cuts over $50M from charter school funding, which is already less per-pupil than district schools and is not supplemented by local tax revenue or stimulus subsidies.

And that's on top of efforts by Obama's former Illinois Senate colleague Dick Durbin's efforts to quash funding of vouchers for private schools, which enable DC students to attend the same type of private school that the President's daughters attend (Quaker-run Sidwell Friends).

We conservatives have seen this game before, and we know how the game ends. The Democrats used the ruse of a global economic slowdown to push through unprecedented money, not for legitimate short-term relief spending but for pent-up demand for domestic program spending.

The problem is that Republicans have a hard time tapping into the current anxiety over chronic Democratic tax and spend policies--precisely because they lost their hard-earned 1994 reformist credentials. The public saw them as becoming corrupted by power, with politicians like Ted Stevens pushing for inherently indefensible chucks of public appropriations. The Republicans also lost credibility by expanding the deficit and by Bush's miscues on things like Katrina and nominating cronies like Harriet Miers and Alberto Gonzales for positions above their level of competence.

There are ways to channel this unrest. I'll simply outline a few hints here. First, the Republicans have to freshen their message. They cannot continue to repeat the 1980 election time and again; when the Republicans make their message that predictable, they are playing in the opposition's hands. There are messages that aren't working, including the point about private accounts for social security. Second, they need to acknowledge past mistakes and outline constructive steps they are taking to regain the public trust. Among other things, this might include every Republican candidate promising no earmarks and subscribing to ethics above the minimum required for the Congress. Third, they need to embrace simplicity, including taxation, by which savings and investment are encouraged and everyone, including lower middle-class households, are vested in an efficiently-run federal government. Fourth, they need to convince the American people that they are better stewards of public revenues. There are a variety of approaches; for example, Detroit requires its parts suppliers to cut their costs annually. Why not do the same with federal programs? What about increasing the internal rate of return on social security and Medicare reserves, thus limiting the need for future payroll tax increases? Fifth, they need to focus on simplifying the interface between government and businesses or households, e.g., single points of contact for regulation, lower reporting requirements. Sixth, they need to define alternative approaches to Obama's priorities on education, health care and energy. For example, just as deregulation led to lower prices and costs in trucking and brokerage trading charges, we should argue for deregulation for health care providers. Seventh, they need to focus on smarter government management: citizen-friendly metrics and benchmarks and improved business practices and management control (including fraud detection).