Resurrecting Democracy

House Fishing Expeditions- Looking to Hook a Big One

              Robert A. Levine  5-21-13

The House GOP refuses to let up. As long as they can keep potential scandals in the public eye by going fishing, they will keep at it. They’re hoping this will energize their base for the 2014 elections and keep the general public from focusing on the fact that important legislating is not getting done.

 The questions are how long they will be able to keep these events at the top of the news before the electorate tires of the subjects (particularly if nothing substantial comes from Congressional hearings) and whether voters will realize that these efforts are merely politics at work. Americans may eventually understand that Republican screaming and yelling about these so-called scandals is merely to provide them with cover for lack of progress regarding substantial issues, such as reaching a budget agreement, passing immigration reform, background checks for gun control, and so forth. The three subjects the GOP hopes will provide them with ammunition against Obama and the Democrats are Benghazi, the I.R.S. targeting of conservative groups, and the Justice Department’s seizure of the phone records of the Associated Press.

 The way the State Department handled the attack on the American facility in Benghazi has been in the news for months with multiple Congressional hearings. It is still unclear whether any American forces could have been utilized to abort the attacks and save lives, with top military personnel seeming to indicate it would not have been possible. Evidently, there was in-fighting after the fact between the CIA and the State Department over who was to blame for the security lapses and inadequate protection for the Benghazi post. There was also fighting between the two agencies over the talking points given to Susan Rice and other administration spokes persons to try and defend the supervision and response to the incident. The Republicans are trying here to tar Hillary Clinton with incompetence over Benghazi to diminish her luster as a 2016 presidential candidate. They would also like to bring Obama down a peg as the Commander-in-Chief who did an inadequate job. Left out of the story is the fact that the Republican House refused to honor State Department appeals for more security personnel in a number of countries prior to Benghazi because of the cost.

As far as the I.R.S. targeting of conservative groups who were applying for 501(c)4 status, the I.R.S. was overwhelmed by the number of requests for this status after the Citizens United decision by the Supreme Court in 2010. Some liberal groups looking for tax-exempt status were also targeted, but it appears on the surface that Tea Party and conservative groups were examined disproportionately. However, the Republican Congress had also denied funds for the I.R.S. to hire additional personnel believed to be necessary to deal with the Affordable Care Act and other tax matters prior to the problem with the 501(c)4 organizations. The House GOP in its investigations is hoping to find some sort of conspiracy against the Tea Party and conservatives orchestrated by Democrats in the Treasury Department, or perhaps in the White House itself. They are playing this up and comparing it to Watergate, with some saying that impeachment is a possibility. But they are really fishing here and if they had supplied enough funding for the I.R.S. to bring in additional personnel, this might never have happened.

 The subpoenas of the AP records to try and plug security leaks raises questions about whether First Amendment rights of the press may have been breached and whether this will chill future government whistle-blowers. However, leaks and maintenance of security have always been Republican issues, and it is hypocritical for them to go after Attorney General Holder and the Democratic hierarchy at the Department of Justice for doing exactly what the Republicans themselves would have done if they had controlled the executive branch.

 So are these issues of minor import being blown up by Republicans trying to make political hay? We shall see how the investigations unfold. But unless the House committees can find evidence connecting the I.R.S. personnel who scrutinized conservative groups to top Democratic Party figures, these so-called scandals will turn out to be cases of political overreaching by Republicans in advance of the 2014 mid-term elections. In Washington, everything is politics, including fishing. 

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Is the I.R.S. Politicized?

            Robert  A. Levine     5-14-13

The debacle recently uncovered at the I.R.S. reinforces Republican disdain for the organization and in general for the collection of government revenue. The targeting of Tea Party and conservative groups that claimed tax exemption because they were primarily “social welfare” organizations appears to be an abuse of power by the I.R.S. It is not yet clear at what level of the I.R.S this decision was initiated or approved. Also not clear is what percentage of groups claiming 501(c)4 status were conservative, as this itself is an important factor.

 The overwhelming majority of I.R.S. employees are civil servants who are not in thrall to any political party or following any particular ideology. There is no question, however, that many of the organizations that requested tax exemption were really political wolves trying to wear social sheep’s clothing in order to escape federal taxes. The mistake of the I.R.S. employees was not that they went after these conservative political groups masquerading as social groups but that they were not equally aggressive against deceptive liberal political groups at the same time.

 After the Citizens United ruling by the Supreme Court, there was an increase in 501 (c)4 groups filing as social welfare organizations, for which the I.R.S. had to assume campaign finance regulation. The I.R.S.’s Cincinnati office had major responsibility for these applications and conservative organizations were targeted by personnel in this office. Political organizations claiming 501(c)4 status have been abusing this designation from
the onset, undoubtedly more by right-wing leaning groups than by liberal groups. But the non-partisan I.R.S. should have been examining claims proportionately by political groups originating from both the left and the right.

 It is also important to remember that the I.R.S. is vastly understaffed and will have a major additional burden with the implementation of the Affordable Care Act. Their claim that they were using short cuts to find political organizations asking for tax exemption should not be dismissed completely out of hand. Attempts to increase the number of I.R.S. employees so that they could perform their jobs better have been repeatedly rebuffed by the Republicans in Congress, even if some of the new employees could be used to go after tax cheats and tax fraud.

 With federal budget deficits and the national debt as major problems for the country going forward, why have Republicans been unwilling to fund more I.R.S. agents to pursue tax cheats and increase federal revenue? The 2012 Obama budget asked for an increase in funding for the agency, much of which would have been dedicated to hiring more agents and enforcement initiatives. However, Congress in its infinite wisdom, led by the GOP, instead cut the I.R.S. budget, forcing the agency to offer buyouts to over 5000 of its
employees.

 A report by the internal monitor of the I.R.S. in January of 2012 noted that the cuts in funding and an increased workload made the agency unable to adequately collect taxes or provide reasonable service to the public. In fact, staff reductions resulted in an inability to obtain billions of dollars annually owed to the government, but not paid. One estimate from I.R.S. data had tax cheating costing the federal government $3 trillion over the last decade. In addition, every tax filer has to pay an extra $2200 to the government to compensate for those taxes that are evaded. The great bulk of the tax avoidance is by wealthy individuals or small businesses. If with more agents I.R.S. audits rose significantly, much of the money now owed could flow into federal coffers, a good deal of it voluntarily through tax dodgers’ fears of being caught.

 Any politicization of the I.R.S. that is or has been present must be eliminated and this government agency must remain completely non-partisan. On the other hand, the current Congressional investigations of I.R.S. abuses and the attempts to engender positive publicity for the Republicans and negative publicity for the I.R.S. and the Democrats, is in
itself a political exercise. Adequate funding from Congress should be provided to allow the I.R.S. to perform its job effectively and efficiently, including preventing organizations from claiming tax exempt status when they are primarily political in nature, rather than dedicated to social welfare objectives.

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Another Washington Joke- Corporate Taxes

            Robert A. Levine   5-7-13

 Corporate taxes in the United States are supposedly the highest in the world, nominally at 35 percent, which should be a major financial disincentive to economic growth and corporate investment in this country. However, no major corporation pays its federal obligation at this rate, finding ways to lower its taxes, or avoid them completely. In this day and age, only an unsophisticated fool would expect corporations to remit taxes to the government at the nominal rate.

 In fact, there is an entire industry employing lawyers and accountants dedicated to tax avoidance both for corporations and individuals. But most large corporations have their own in-house strategists working to save their companies money expected to go for taxes. As an example, General Electric paid corporate taxes to federal, state, local, and foreign governments combined that totaled 17.9 percent of its cumulative earnings over the last five years, and not just the federal government alone with its rate of 35 percent (http://goo.gl/ZH2NN).  Similarly, FedEx paid 20.1 percent, Amazon 6.6 percent, and Ford 4.2 percent, showing that the effective corporate tax rate is considerably lower than the supposed rate of 35 percent.

 Though corporations and corporate lobbyists complain about the high rate of 35 percent making the US economy less competitive, their criticism is meaningless, since corporations do not pay that rate. In fact, the effective rate paid make US corporate taxes for many companies among the lowest
in the developed world, particularly for those firms who earn much of their income abroad, like tech and pharmaceutical companies. Because of pressure from lobbyists and special interests, Congress has permitted corporate taxes to decrease as a source of federal revenue, from about 3.2% of GDP in 1970 to half of that in 2012. (Individual income taxes were equal to 7.3 percent of GDP in
2012.)

 The recent move by Apple to borrow $17 billion to pay for stockholder dividends and a stock buyback, even though Apple had accumulated nearly $150 billion in cash and marketable securities, highlighted one of the problems with corporate taxes. Apple appears to do whatever it can to avoid paying the federal government taxes. Most of Apple’s cash and cash equivalents were earned abroad and have been kept abroad to dodge American taxes. So rather than repatriating their cash to the US and paying taxes on their profits, they borrowed the money through corporate bonds at incredibly low interest rates to raise dividends and buy back stock.

 Deferral of income earned abroad saved American corporations $41 billion two years ago, accelerated depreciation of machinery and equipment $76 billion. JP Morgan Chase analysts estimate that profits of American corporations held offshore are currently close to $2 trillion.

 Nominal corporate tax rates could be lowered without loss of revenue if a number of loopholes provided to specific industries or companies were closed. Fossil fuel companies are among the major beneficiaries of tax subsidies and loopholes, but numerous corporations pay lower taxes because Congress provided them with tax breaks.

 While there has been much talk in Washington about rewriting the tax codes for both corporations and individuals to make them more equitable, this may turn out to be another pipedream. The Republicans want to reduce total revenues as part of tax restructuring, while the Democrats want to increase revenues to lower the budget deficits and national debt and perhaps provide a short term stimulus with heightened government spending. When lobbyists and special interests are added to the mix with their own demands, putting pressure on Senators and members of Congress to maintain or increase loopholes and tax breaks, the chances of redoing the tax codes in a rational manner are slim to none. It’s all part of the dysfunction in Washington that makes passage of
important legislation so difficult to accomplish.

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Democracy and Corporate Transparency

 Robert A. Levine   4-30-13

 

The Securities and Exchange Commission has recently received a petition with close to 500,000 signatures asking it to pass new regulations that would require corporate donors to disclose all contributions made to political organizations. Though it seems obvious that the democratic process should require all major donations to politicians and political organizations to be done in a transparent fashion, Congress has failed to address this problem with legislation. The lack of transparency, however, escalated to a more serious threat to democracy only recently. This occurred with the Citizens United decision by the Supreme Court in 2010 that allowed unlimited contributions by corporations to various tax-exempt groups that are not required to release the names of their donors to the public. This is in contrast to the SuperPACs that can accept unlimited sums of money from donors, but must be transparent in terms of who their donors are.

Many of these tax-exempt organizations and trade associations use these secret contributions to support particular politicians whose views coincide with their own, or for or against issues that are important to them. These are blatantly political in content, but to date the organizations behind them have not had to reveal the names of their donors. Attempts to have the I.R.S. force these groups to pay taxes have so far gone nowhere. But it is hoped that the S.E.C. will be willing to take up this issue and either block secret contributions from corporations to these groups, or more likely mandate that corporations reveal all donations to “non-profit” groups or political organizations.

The groups that receive corporate support include trade organizations such as the National Mining Association, the American Gaming Association, the National Retail Federation, the U.S. Chamber of Commerce, the National Association of Manufacturers, and the Business Roundtable. More politically oriented tax-exempt organizations include Karl Rove’s Crossroads Grassroots Policy
Strategies and Americans for Prosperity, founded by the Koch brothers. Though some liberal groups have pursued similar strategies to raise money, the lions’ share of spending during the 2012 elections went to support Republicans and Republican issues.

It is interesting that public companies rarely back political candidates directly or contribute to SuperPACs that are under the aegis of the Federal Election Commission and demand strict disclosure. This is in spite of the Citizens United ruling that permitted unlimited contributions by corporate entities or individuals to SuperPACs as long as it was done in a transparent fashion. Any new S.E.C. regulation that required disclosure by public companies to trade association or non-profit groups would not impact private companies or individuals. Since one of the functions of the S.E.C. is to provide protection for investors and stockholders of public companies, it would certainly be within their jurisdiction to issue new rules that would require disclosure of all contributions by these companies. Stockholders have a right to know how their company’s money is being spent.

With non-transparency of donations by public companies, democracy is undermined in two ways. First of all, corporate money that remains concealed can be used to influence elections and get candidates into office who favor corporate-friendly legislation. Secondly, the supposed democracy of corporate governance, where stockholders have ultimate control of policy and spending, is negated by allowing clandestine contributions by corporate executives. While no one expects daily scrutiny of corporate outlays or micro-management of corporations by stockholders, as owners they should certainly have a say in any political spending by the corporation. This is reinforced by the Citizens United decision written by Justice Kennedy and quoted in a recent article in the New York Times. (http://goo.gl/bTFeH) Kennedy wrote that “shareholder objections raised through the procedures of corporate democracy” would make political spending by corporations accountable. It has not happened yet and it remains to be seen whether the new S.E.C. Chairperson, Mary Jo White, and the three to two Democratic majority on the commission will change the ground rules and make corporate donations transparent. There are numerous lobbyists, business groups, and special interests fighting against it.

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Is This Democracy?

            Robert A. Levine  4-24-13

Last week, the nation’s media focused its attention on the Boston bombings and to a lesser degree, the Texas explosion. But there was little dialogue about the outrageous action the week before by the Senate of voting down the expansion of background checks for gun buyers, a clear challenge to the democratic process.

One hundred and fifty years ago, President Abraham Lincoln in the Gettysburg Address declared “a new birth of freedom, and that government of the people, by the people, for the people, shall not perish from the earth.” Lincoln believed that the Civil War and the deaths of hundreds of thousands of men would help establish freedom and democracy in America.

What would Lincoln have said about the Senate debacle last week that resulted in the defeat of a minimalist gun control law whose main thrust was background checks for online and gun show sales, to be certain that buyers did not have a criminal history or mental illness? How could any rational person have been against this legislation? Were the Senators who voted against this bill being courageous and truly voting their consciences, or were they cowards afraid to cross the NRA? How could they not stand up “for the people” in America who favored enhanced background checks by an overwhelming majority?

Various polls showed that about 90 percent of Americans supported enhanced background checks, including 80% of Republicans, and 70 percent of gun owners and NRA members. In addition, a smaller majority of citizens favored limitations on ammunition clip capacity and automatic weapons. Yet 90 percent of Senate Republicans and four Democrats from rural states refused to support the bill on background checks. Is this democracy when the people’s voices that demanded this legislation by a large majority were ignored by their elected representatives? How could this travesty have occurred?

The key, of course, is that the leadership of the NRA turned against background checks, even though the organization had previously favored them and the majority of their membership backed this legislation. The reasons that the NRA executives changed from support to opposition are unclear, but several elements must be considered.

The NRA leadership in all probability wanted to reinforce their political clout to make sure that politicians would hew to their line in the future. They also did not want to grant Obama any kind of victory regarding gun control, as their antipathy towards him is well known. There is also the
slippery slope argument that once any gun control legislation was passed, more would follow in the years to come. In addition, there was fear that passage of background checks would lead to a national gun registry, which the NRA and most of its member are strongly against. The unwillingness of the NRA to allow the Senate to pass background check legislation was in spite of the fact that the bill surely would have died in the House.

The Senators who refused to buck the NRA on background checks felt that they were being realistic about the power of the NRA to defeat them in the next election if they dared to cross the organization. Though the vast majority of citizens favored this legislation, they usually do not base
their votes for candidates on this one issue, while the people opposed tend to use this one issue as a litmus test as to whom they will vote for. The opponents also tend to contribute money to candidates on the basis of this issue and are much more activist in their support of their candidates.

The defeat of the background check legislation is further proof of the way various powerful special interests control the legislative process in both the federal and state governments. Additional evidence can be seen in the nation’s tax code and subsidies for energy companies and farmers,
as well as the way defense contracts and other government largesse is handled.

As long as the electorate does not study the issues before they go to the polls and know the stances candidates have taken in the past and how they will vote in the future, the special interests will continue to direct the passage of legislation that they favor. Democracy, where the will of the
majority is supposed to determine legislation, will remain subverted.

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Health Insurance and Personal Responsibility

                   Robert A. Levine     4-16-13

Little attention is being paid to personal responsibility in setting health insurance premiums. While health status and pre-existing conditions have been determinant factors in the past for obtaining individual health insurance and the premium rates for coverage, these differentials will be eliminated as part of the Affordable Care Act. And in obtaining group health insurance, an individual’s health status is usually not a consideration.

Personal responsibility in terms of health status has always been an important factor in deciding the premiums for life insurance. Thus, individuals with high blood pressure, elevated cholesterol, elevated blood sugar levels, smokers, drug and alcohol abusers, have to pay more in order for them to obtain life insurance, or may not be able to get insurance at all.

Some companies attempting to lower their costs for employee health insurance are offering incentives to workers for life style changes that lower blood pressure, body mass index, or other parameters, or who partake in wellness programs. (http://goo.gl/dVtMo) Both rewards for the employees such as lower premiums or deductibles may be offered, or penalties may be imposed such as higher premiums or an insurance surcharge.

It may seem odd that companies have to provide financial incentives to employees to prod them to lifestyle changes that will improve their health and longevity. But many individuals refuse to take personal responsibility for their health, with the rates of obesity skyrocketing in the United States over the last few decades, resulting in an increased incidence of diabetes, hypertension, coronary artery disease, strokes, and other disease entities, that will only increase in the future.

This leads us to a moral dilemma. Since health care costs are spread over the population that is insured, or partially paid for by taxpayers in Medicare and Medicaid, should those who are responsible and lead a healthy lifestyle pay more for those who disregard their health and eat and drink with abandon, or smoke, or use drugs, or drive recklessly, and so forth. Many of these people, who will be most in need of care, are poor, or with low educational levels, or with psychiatric problems. But some are quite intelligent, educated, and middle class. How do we get these individuals who are unwilling to assume responsibility for their own health to change their behavior and start acting in a way that will enhance their own health? It would seem to be unethical to refuse them care, even for those conditions that are self-induced. And if their health insurance deductibles for treatment are increased to penalize them, they will be less likely to seek care. In that case, their conditions will worsen and require more intensive treatment in the future.

Perhaps positive incentives can be tried such as lowering their health insurance premiums and/or deductibles for healthy conduct and any improvement that can be measured in the harmful conditions they exhibit. But what if they don’t respond to these inducements and persist in behavior that damages their minds or bodies and will ultimately cost responsible citizens money to care for them? This is unfair to those Americans who are attentive to their health and who will not become a burden to society because of self-destructive conduct.

I don’t know the answer to this quandary. My heart says society must pay for the care of those unfortunate individuals whose actions have resulted in serious illnesses. My brain says it is unfair to expect people who act responsibly in regard to their health to be saddled with the cost of care for individuals who give no thought to how their behavior will subsequently affect their minds and bodies. There appears to be no way to reconcile my heart and my brain over this issue. I am my brother’s keeper, or am I?

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Perceptions of America's Political Parties

                 Robert A. Levine    4-9-13

It is obvious that Republicans, Democrats, and independents, have differing views of the characteristics and values of the two political parties. This was reinforced by a recent Gallop Poll (http://goo.gl/aYs4c) that surveyed citizens about what they liked and disliked about the Republican and Democratic Parties. In addition to overall answers, the replies were broken down by whether the respondents were Republicans, Democrats, or independents. Few surprises were found.

The qualities about the GOP that were found most deplorable by the public were the Party’s inflexibility and unwillingness to compromise. 21% of all adults, including 26% of self-identified Republicans, named these attributes as the ones that displeased them the most. The second leading negative characteristic was the Party’s protection of the wealthy, instead of standing up for the middle class. 12% of all adults noted this, including 10% of independents and 20% of Democrats. There were numerous other characteristics that Americans disliked about the GOP, but all of those were in single digit percentages. 33% of Republicans either had no opinion or found nothing to
dislike about their party.

The attributes most disliked about the Democratic Party were that they spent too much and increased the budget deficits.  14% of all citizens cited this, including 10% of Democrats, 11% of independents, and 23% of Republicans. All other negative feelings were in the single digits. However, 8% of Americans believed the Democrats were too inflexible, 12% of Republicans, 7% of independents, and 6% of Democrats. Similar percentages for each group noted poor leadership as what they most disliked. Interestingly, 51% of Democrats reported nothing to dislike about their party or had no opinion.

In terms of what Americans liked most about the two parties, the qualities cited for the GOP were better fiscal management, budget cuts, and less debt. 11% of citizens were pleased by that, 20% of Republicans, 9% of independents, and 5% of Democrats. The second highest approved characteristic was its conservative views, cited by 10% of all respondents, 20% of Republicans, 7% of independents, and 3% of Democrats. The remaining positive attributes were all in single percentages.

For the Democrats, the most admired characteristic was that the party cared about the middle and working classes. 14% of citizens cited this, 5% of Republicans, 14% of independents, and 22% of Democrats. All the other positive attributes were in the single digits.

The questions raised by a survey such as this is whether the parties will take note and change, particularly in regard to what Americans disliked about them. It’s unlikely that Republicans in Congress will take heed. Because of gerrymandering of Congressional districts by Republican legislatures after the 2010 census, GOP members of Congress only have to answer to voters in
their conservative districts and may not care about overall public opinion. People in their districts may well applaud the fact that their member of Congress is inflexible and unwilling to compromise. However, the view that the party protects the wealthy and does not stand up for the middle class, is not the way Republicans would like to be perceived. On the other hand, the GOP seems unwilling
to raise taxes on anyone to give the government more revenue to cut the national debt or provide an economic stimulus.

Though the Democrats were disliked for spending too much, only 14% of the electorate felt that way, including 11% of independents. With Democrats wanting to protect government programs rather than cutting them, it’s unlikely they’ll pay attention to the survey’s results.

In other words, we can expect more of the same from the two parties.

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Obstacles to a Centrist Third Party

           Robert A. Levine    4-3-13 

Given the state of affairs in Washington, where the two parties are constantly stalemated and little gets accomplished, it seems surprising there has not been more impetus for the formation of a third party of the center to change the political dynamic. However, the obstacles placed in the way of establishing a third party makes it a daunting process that savvy citizens are reluctant to attempt.

 Third-party candidates have difficulty obtaining ballot access in many states, the result of collusion between Republicans and Democrats working to keep the political status quo. Various state laws insist on petitions and large numbers of valid signatures as a prerequisite to getting on the ballot. And unless a certain number of votes are attained in an election, the process must be repeated for the following contest. This is done purposely to stifle the growth of these fledgling parties. The hurdles differ from state to state, with some less restrictive than others. The regulations seem unrelated to whether the state is controlled by Republicans or Democrats, as in general the two parties will do whatever they can to subvert third party candidates. As an example, Indiana once required minor political parties to poll 0.5 percent of the votes in order to automatically qualify for the ballot in the next statewide election. When the Libertarian Party attained that goal in 1982, the state legislature raised the requirement to 2 percent.

  A “duopoly of power” further helps to curb third parties. In the current system, the second party has a privileged position; that of a monopoly on opposition. If the voters are unhappy with officeholders, they can kick them out by voting for other candidates, but their choice is limited to candidates from the second party. The only way they can vent their dissatisfaction is with this one other party, or by not voting. The single party plurality system in each district, with winner taking all, is another significant obstacle for third parties.

 Media coverage of politics reinforces the two-party system as well, as every twist and turn of their primaries is reported and analyzed, providing a huge amount of unfunded publicity. This is also true in the general election. The two parties are the power brokers in the American system of
government and they expect the media to disseminate the words and detail the actions of their important players. With Congress and the Federal Communications Commission having a regulatory role in terms of the media, perhaps there is an implied threat if coverage of the parties is
unsatisfactory. The media also hamper the fundraising of third parties by labeling their candidates’ efforts futile, tilting at windmills, and so forth, instead of focusing on substantive issues. Since people rarely want to waste their money or back a loser, financial support for third party candidates never approaches a competitive level.

 Notwithstanding the barriers they must contend with, third parties do continue to arise, with some of them making reasonable showings and having influence on the overall outcome of elections. The book Third Parties in America by Rosenstone, Lazarus and Behr, noted in 1996:

    Because of third-party strength, 14 of the last 36 presidents haveentered the White House     without a popular vote majority. Through the years, third parties have controlled enough votes       in the right states to have theoretically changed one-third of the Electoral College results.

Over one hundred lesser parties have participated in American elections since 1840, running the gamut in motivation, ideology, personalities, and financial strength. This points to the reservoir of discontent with the two parties that control the political system.

 Throughout American history there have been many successful bids for office by third parties on a state or local level. During the nineteenth century, there were often senators and congressmen who were independent or belonged to minor parties. In the first half of the twentieth century as well, there were some senators and congressmen affiliated with third parties. Over the last half century, however, this has occurred less frequently. Currently, the senators from Vermont and Maine, Bernie Sanders and Angus King, are independents who caucus with the Democrats. Though Joe Lieberman as an incumbent senator lost the Connecticut Democratic primary in 2006, he went on to win the general election as an independent.

 There have also been third-party governors, other statewide-elected officers, and mayors of large cities over the last two centuries. Lowell Weicker and Walter Hickel were elected governors of
Connecticut and Alaska respectively in 1990 on Independent tickets, Jesse Ventura as a Reform candidate in Minnesota in 1998, and Angus King as an independent in Maine in 1994 and 1998. But none of these successful gubernatorial candidates built permanent state-level parties that could endure to permanently influence the political process.

 In addition to the obstacles faced, third parties have not survived because they have not been self-sustaining in terms of organization and platforms. Most national third parties have been devoted to specific candidates or specific ideas. They have not covered the entire spectrum of issues and established a structure to compete for office at all levels of government in sequential elections. Until organization and building occurs at a grassroots level with definite programs and a sense of purpose that has widespread appeal, third parties will remain an insignificant force in American politics.

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Elite- A Dirty Word in American Politics

                Robert A. Levine      4-28-13

In the United States, the terms elite or elitist are used by politicians to attack opposition candidates during election campaigns, or opposition members of Congress or Senators during legislative debates. It is also used to disparage the president or members of the executive branch by politicians of the opposing political party.

Though adherents of both political parties utilize this description hoping it will gain them some advantage, currently it is more frequently used by the Republican Party and its Tea Party wing. In the past, it was often invoked by Democratic populists to raise the ire of the common man. This was to make him feel that his voice was not being heard and was applied to the very wealthy in the Republican Party. Now it is generally employed in relation to highly educated individuals, particularly those who attended the most competitive universities. Many of them have also attained one or several advanced degrees and may be considered experts in particular fields.

Whether it is the Republicans or Democrats who are railing against elitists in the government, it is simply a tactic to manipulate ordinary voters and turn them against the rival party. One might ask why elite or elitist has become a derogatory designation for these men and women who are involved in governing us. Don’t we want the brightest men and women and those with special expertise to be running our government and making the decisions that will affect our future? Doesn’t it make sense that these should be the people who are our leaders?

In virtually every other nation, men and women of the elite, who have gone to the best schools and are highly educated, make up the leadership corps of the major political parties and play major roles in running the government. This is true in many developing countries as well as for most of Europe. They want the elite as leaders.

In America, ordinary voters may see the elite as being out of touch, without enough practical experience, and not conversant with their problems. This was highlighted when the first President Bush was surprised by the process of checking out at a grocery counter in 1992 because he had never done it before. And experts in particular areas may be seen as having too narrow a view of the world and be less attuned to the daily lives of working men and women.

The antagonism towards the elite in America may also be derived from many citizens’ belief that they are knowledgeable about the nation’s problems and able to govern themselves as well or better than so-called experts or the highly educated. This conviction goes back to America’s early days and was one of the reasons populist politicians have been intermittently successful.

However, given the complexity of the modern world and the manifold tasks of government in varied areas, Americans should look to experts and the highly educated to direct the process and keep the train of democracy on track. This does not mean that there is uniformity of thinking among the elite about how things should be done and that disagreements will not arise.  But hopefully, differences can be settled by rational debate or by compromise to allow government to function effectively, Elite should not be a dirty word or a term of derogation in the United States. Having elite individuals in government indicates that capable leadership is more likely.

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Is America's RVS Skewed?

         Robert A. Levine     3-19-13

The RVS (relative value scale) is employed by the health care industry to provide a rational basis for setting appropriate fees forphysicians (though this remains a matter of contention). If as an xercise, RVS standards were applied to American society, would compensation for other professions and crucial occupations appear reasonable?

The resource based relative value scale (RBRVS) is used by Medicare and insurance companies to determine how much they will pay physicians for services and procedures. The RVS is calculated using four parameters to decide the value of physicians’ activities and how much they are worth monetarily. These include the time necessary to complete the service or procedure, the cognitive or mental effort required, the amount of technical skill needed, and possible stress related to the service. The years of training for the specialty that provides each service is considered when figuring technical skill and cognitive ability. The final fee is adjusted by practice expenses, such as malpractice and overhead, and the geographical area where the service is taking place to account for cost of living.

Thus, a cardiologist performing a catheterization study may receive thousands of dollars for this procedure which takes less than an hour, as does an orthopedist for setting a broken bone. Yet an internist who provides a consultation that takes the same amount of time will receive a few hundred dollars at most for his effort. While cardiologists, or orthopedists, may have an extra year or two of training compared to an internist, the former may be paid an hourly rate ten times higher for his or her services. This is generally true for all procedure oriented or surgical subspecialties and is reflected in the overall income for these physicians. The average internist earns $205-210,000 annually, while cardiologists make $420-530,000 yearly, and orthopedists $550-800,000. Is an orthopedist who performs a hip replacement using technical skills doing something of much greater value than an internist whose consultation using cognitive ability may save the life of a patient with pneumonia? Should he or she have an income three to four times greater?

Of course capitalism does not consider social value in allotting income or payment for services to physicians or in professions or occupations outside of medicine. And as the disparity in remuneration has been growing among different medical specialties over the years, this has been true as well in non-medical professions and businesses. For example, in 1970, an attorney starting at a top firm and a beginning public school teacher had a difference in salary of about $2000. By the turn of the century, that lawyer earned more than three and a half times as much as the teacher- $145,000 versus about $40,000. And this differential increases the longer the lawyer practices and
the teacher teaches. Yet very few Americans would claim that lawyers play a more important role in society than teachers. In fact, most Americans would say that teachers are of much greater value.

The disparity in incomes within corporations between workers and top executives has also been soaring over the last several decades. A CEO in one of the top one hundred corporations in America in 1977 was paid about fifty times the salary of its average worker. Thirty years later, these chief
executives made about eleven hundred times the pay of the company’s average worker. Yet the roles of the CEOs and the workers have remained the same during this period. Are there any metrics that show that these executives became twenty-two times more valuable to their corporations and society as a whole than their workers over these three decades? Similar disparities in incomes have
become the norm in virtually every large business. (Coincidentally, the CEOs of most companies are involved in choosing the Boards of Directors and Compensation Committees that decide on executive pay. And weakening of the unions has made collective bargaining with many companies more difficult, resulting in stagnant wages for most workers.) Interestingly, the rise in executive pay and perks by corporations is usually not linked to performance by the compensation committees.

The disconnect between social value and incomes are even more prominent in the financial industry. Individuals who move money among ifferent financial instruments may provide profits for their companies (or themselves) and are rewarded with huge salaries and bonuses even though their work does not benefit society. In fact, the recent financial meltdown has shown that the activities of these individuals can cause tremendous social disruptions and suffering without affecting those responsible for precipitating the damage. The financial upheavals in many instances necessitated government bailouts of the malefactor’s firms, but there was little cost to many of those who caused the problems. A number of these financiers have remained in their positions continuing to enjoy lavish salaries and bonuses while performing the same tasks that resulted in the social chaos and distress. Or they retired with huge payouts.

Physicians’ incomes and relative value have not been linked to scarcity or need for the particular type of practitioner. If this were the case, specialists in internal medicine would be among the highest paid, as there is a dearth of internists nationally that will only increase in the years
ahead. In addition, there is an over-abundance of many well paid specialists. Similarly, incomes of non-physician professionals, executives, and financial workers, are not related to scarcity, and often are independent of performance.

In 2009, the top 1% of earners made 17.2% of all income and, according to one estimate, controlled about 40% of the nation’s wealth. Many of these people were in the financial industry, company executives, or had inherited their money. Aside from high-tech and other entrepreneurs, who have created wealth and employment with their ideas and labor, on the relative value scale to society, most of the remaining 1% did not merit all of their wealth and income.  

Should adjustments be made by government that better align the social value of people’s jobs with the remuneration they receive, at least to some degree? Is this the function of government when the market does not act in this fashion? Funds generated by higher estate and income taxes on the most
affluent could be employed to subsidize education for those entering fields that benefit society. In addition, lowering the tax rates of those individuals whose jobs are of social value such as teachers, scientists, policemen, firemen, internists, and so forth, would also be worthwhile. But the overriding question remains whether government should play an active role in providing financial help to those who choose occupations of social value. There are arguments that can be made for both sides.

Resurrecting Democracy

www.robertlevinebooks.com

A Tyranny of the Conservative Minority Controls the Legislative Process

           Robert A. Levine      3-12-13

In 1787, when the nation’s Founding Fathers created the Constitution, with all its checks and balances to protect against autocracy, they could not have envisioned the way their system would make America nearly ungovernable far into the future. One of their concerns was that an uninformed majority, perhaps led by populist demagogues, would trample on the rights of
minorities and overturn some Constitutional guarantees, such as freedom of speech, the press, religion, and so forth.

However, the checks and balances within the structure of the federal government, and between the federal government and the states, have actually curbed the rights of the majority by providing the minority with too much power, which has limited the federal government’s ability to function
effectively. The Constitution allows the states to draw their Congressional districts as they see fit, as long as the population of these districts are approximately equal in size. Because Republicans controlled more state legislatures and governorships after the recent census, they were able to
gerrymander Congressional districts to provide major advantages to candidates from their party. Voters who tended to vote Republican or Democratic were relegated to districts in a way that many “safe districts” were established for Republicans. These were generally more rural and more conservative than if they had been created in a fair and independent manner.

Because of this, the House of Representatives is dominated by conservative Republicans, even though the Democrats won a plurality of the nation’s Congressional vote in 2012, 49.1% to 48.1%. Recently, these conservative Republicans have blocked Democratic initiatives to reduce the
budget deficits by a combination of spending cuts and increased revenues. They have refused to consider eliminating tax loopholes for the wealthy and for corporations, insisting that the deficits be curbed only through cutting government spending. Thus, the sequester has become the law of the land even though its original intention in 2011 was to force Republicans and Democrats to compromise on the formula necessary to reduce the budget deficits. Immigration reform and gun control legislation will likely also be held hostage to the beliefs of this conservative minority and not accomplish what Democrats and the electorate would prefer.

Besides outpolling Republicans nationally in Congressional elections, the Democrats won an absolute majority of the presidential vote and 23 of the 33 Senate seats that were in contention in 2012. But though the Democrats won a plurality or majority of the total votes nationally for all
federal offices, a minority of conservative Republicans in the House prevents the enactment of Democratic programs. These programs were the ones that Democratic candidates proposed during the election and why they were able to win the national vote. However, conservative Republicans from “safe districts” do not care about overall public opinion and Democratic programs. They play to the conservative voters in their districts, afraid of primary challenges that might arise from the right wing of their party. Because the creators of the Constitution were afraid of investing the majority in government with too much power, they have instead allowed a tyranny of the minority to control the legislative process and bring government to a halt when they so desire.

Though a minority in the Senate can also block legislation or confirmation of executive appointees through a “hold” or a filibuster, these actions are not constitutionally based, but simply the rules of the Senate. If Senators were so inclined, these rules could be overturned by a vote of the Senate and do not require a Constitutional amendment to be repealed.

Can the tyranny of the conservative minority in the House be ended, and if so how? Since the members of the House from these “safe districts” don’t care about what the nation as a whole thinks or desires as far as legislation is concerned, it would be necessary to eliminate as many of these gerrymandered districts as possible. This would mean having independent redistricting commissions drawing the boundaries of all Congressional and legislative districts after each census in a fair and equitable manner, rather than having the process controlled by political operatives to favor their parties. Since a constitutional amendment that mandates independent redistricting commissions is unlikely, referenda in individual states may be able to bring this about. However, it would require a concerted effort and large sums of money to support these referenda and to educate the populace about why they are needed. If this occurred, there would certainly be kickback
from the Tea Party and other conservatives who are delighted with the power they have achieved, disproportionate to the number of voters who identify with them.

The framers of the Constitution were probably right to worry about a tyranny of the majority, but should have also considered how to prevent a tyranny of the minority. Bringing about fair redistricting and eliminating many of these safe districts in this era will not be an easy task to accomplish.

Resurrecting Democracy

www.robertlevinebooks.com