Right in San Francisco

Fiscal Responsibility: Adult Behavior

    For the next few years elections will be won or lost on the issue of fiscal responsibility. Everybody was scared by the collapse of 2008, understands that trillion dollar deficits are unsustainable, realizes that Social Security/Medicare/Medicaid must be scaled back (the sooner the better), and that the fat years must be followed by some lean years.  If President Obama remains AWOL and the Republicans don't let the Democrats divert attention to "birthers", gay marriage, or "union busting", the day is theirs. Short term noise may be disappointing, but the tide should turn by mid-year.

    -  Round One. In a demonstration of extreme juvenile mismanagement Speaker Pelosi made no effort at a budget for the 2011 fiscal year which began in October, instead passing a "Continuing Resolution" effective through March 4, to keep spending at 2010 levels (24% above 2008)  Unlike Pelosi, Speaker Boehner has allowed bi-partisan debate and amendment in committee and on the House floor to arrive at $61 billion in cuts for the current year and has offered an extension in exchange for small pro-rata cuts. Reid, hoping for a shut down that he can blame on the Republicans, offers nothing.  In round one he may have the stronger hand.

    -  Round Two. In April or May the federal debt limit of $14.3 trillion will be reached and presumably raised.  Polls show that a large majority of the public opposes raising the debt limit - a sign of how deep the public's discomfort is rather than belief in a realistic option to be worked out in a month.  (At a similar point in 2006 Senator Obama famously said "The fact that we are here to debate raising our debt limit is a sign of leadership failure. ... America has a debt problem and a failure of leadership.")  Now the spector being trumpeted by Bernanke and Geithner is default on our debt with a disastrous impact on our future borrowing power. Expect a series of small raises designed to keep the pressure on, perhaps with some current spending concessions.  

    -  Round Three. In April the House Republicans will unveil their 2012 budget proposal. While the first two opening shots offer the Republicans leverage and the likelihood of some progress, they do not reflect the comprehensive blueprint that the 2012 budget will. Unlike President Obama's proposal it will include entitlement reform. It may include broad tax code reform. It will presumably include an alternative to Obamacare. It will serve as a foil for the ideas of a bipartisan group of Senators (Democrats Conrad, Durbin, and Warner; Republicans Chambliss, Coburn, and Crapo) who wish to draw on the ideas of the Deficit Reduction Commission which Obama formed with much fanfare then ignored. With or without Senate Majority Leader Reid, Democratic votes will be available.

    With President Obama projecting a $1.65 trillion deficit and no entitlement reform in his 2012 budget proposal, and with nothing from Reid, the issue of the day has been handed to the Republicans. "Just say no" may be an effective legislative tactic but it will not solve the nation's financial problems or get public support.  To this point the Tea Party has shown it to be serious (killing a big defense contract in Boehner's district), Boehner has shown himself to be reasonable (offering negotiation and modest cuts for extensions), and Budget Chair Paul Ryan is the perfect spokesman to lead an adult conversation. This is a marathon, not a sprint.  

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    If there were any question about Obama relation with the public employee unions - other than the twice -a week White House visits from their leaders -here's a frightening video from 2008.

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    And a special bonus: Nicholas Kristof's NYT op-ed on Libya. There are things that we should be doing while the result hangs in the balance - offer sanctuary to naval and air forces who refuse to attack their own people, declare a "no fly zone" (as we did to Hussein in Iraq) to prevent Gaddafi from attacking opposing elements, freeze the foreign assets of his family. Our international stature declines daily as we do nothing.

bill bowen - 2/24/11 

Egypt: Giving Credit

    As the news cycle moves on to President Obama's feckless budget (next week's posting), a quick reprise of the events in Egypt is in order.

    -  First, I assume that the Army will maintain order until elections are held in the Fall, that the Muslim Brotherhood will be one of several political blocks, that we will continue to buy the Army's support, and that the new government will reflect the country's dependence on Western tourism. Best case, most likely IMHO. The next daunting task - turning political energy into economic energy.

    -  The Egyptian people deserve a great deal of credit for remaining purposefully nonviolent despite reasonable gripes and a spate of provocation. Wael Ghonim, Google's chief of marketing for North Africa and the Middle East, will probably get a Nobel Peace Prize for his use of Facebook to organize protesters. One hopes that the next couple of years are not filled with a Truth and Reconciliation Commission for retribution against the supporters of the Mubarak regime.

    -   President Obama deserves credit for the voice which he eventually found ("decisions are up to the Egyptian people; we support representative government and free expression") after false starts by Hillary Clinton ("regime stable"), Robert Gibbs ("transition must start now"), and Joe Biden ("no dictator"). Obama probably got some courage from perfect pitch editorials by Charles Krautheimer and Bill Kristol which far outshone Glenn Beck's rants about a new caliphate aligned with the objectives of the political Left. Most perplexing was the fact that CIA Director Paneta found it necessary to prematurely announce Mubarek's resignation and to proclaim that the Muslim Brotherhood was a secular institution. Perhaps next time the administration will have a single public voice.

    -  Fortunately our policy has been consistent since Condi Rice's 2005 Cairo speech  (more forceful and four years before Obama's): democracy and personal liberty are universal objectives; friends encourage friends to take preemptive steps in that direction. The policy is bipartisan, with virtually no elected Republicans criticizing Obama for his handling of the Egyptian uprising. 

    Egypt (and Tunisia) may be just the beginning. Iran, Saudi Arabia, Libya, and the Gulf states will not be so enlightened in their dealing with protesters. Iran's democracy movement may replay the protests of 2009, hoping (probably futily) for American support this time. Israel may be faced with its Palestinian citizens. Yemen has an al Queda presence and a long open border with Saudi Arabia. Each country has its own history, factions, and limitations - lights will be on late at night at the State Department, the Central Command, and Langley. Beyond Egypt, our government remains eerily quiet, reflecting a belief that we have lost our influence in the region. Lets ask Allah for some more luck.  

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      This week's video shows our dear leader responding to criticism that he forgot to include fixing Medicare, Medicaid, or Social Security in his 2012 budget.  Clueless or politically calculating?

California Elections: Changing the Game

    The Republican Party is in tatters in California because it is on the politically wrong side of three issues: illegal immigration (Meg Whitman's treatment of her maid struck a chord and helped sink the ticket); abortion (Carly Fiorina would have been the first pro-life state election winner in ages); and environmental protection (the public prefers solar panels to oil drilling and the nation's toughest air cleanliness laws to manufacturing jobs and modest utility costs.)  That's the reality. To the rest of the country the sad state of California's Republicans matters because California reliably provides 55 Democratic electoral college votes, 34 Democratic Representatives, two Democratic Senators, and a big drag on the national economy. What to do, beyond yelling at each other?  

    If you can't win with reasonably good candidates and plenty of money, perhaps you can change the game. Three wonkish changes are afoot:

    1. Redistricting. (Effective in 2012) In 2008 and 2010 the voters passed propositions that create an independent commission (rather than the legislature) to redraw the boundaries of state legislative and Congressional districts. The hope is that with less gerrymandering to protect incumbents we will get more competitive districts where the candidates will be pushed more to the center and will respond more to the voters and less to special interests such as the public employee unions and the Sierra Club. (For those who need a hero, both initiatives were sponsored by Charles Munger, the Stanford experimental physicist son of the Berkshire Hathaway Vice Chair.)

    2. Open Primaries.(Effective in 2012) In 2010 the voters approved Proposition 14 which makes general elections for Congress, state legislatures, and statewide offices a run-off between the two top vote getters in the primary, regardless of party. In many areas that will mean two Democrats; in some two Republicans. As elections become between liberals and conservatives rather than party standard-bearers all voters become relevant. Even San Francisco's 20% Republican voters can be enough to sway a primary between ultra-liberal and moderately-liberal Democrats. While the state functionaries of all parties hate it, open primaries will make minority voters relevant.

    3. Ranked Choice Voting. Over the past decade several Bay area cities (San Francisco, Berkeley, Oakland, San Leandro) have adopted "instant runoff" ranked choice voting for non-partisan local offices. Voters pick first, second, and third choice candidates; if no candidate gets a majority the bottom candidate is eliminated and their votes are distributed to those voters' second choice; the process is repeated up the chain until somebody gets a majority. The cost of a run-off election is avoided, but a new dynamic exists in which candidates can cooperate in an "Anybody but Smith" campaign, as was done in Oakland and San Francisco where well known, well financed machine politicians lost to relative unknowns. This is a wild card which could cut either way, but if it helps a moderate to slip through occasionally it is a step forward.

    California's traditional system has had both parties nominate their most extreme (and special interest-beholden) candidates with the Democratic extremists beating the Republican extremists in the general election.  Check in in a couple of years to see if anything has changed.

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     This week's video is a discussion by Tea Party favorite Rick Santelli of the unemployment rate's drop from 9.4% to 9.0% in January despite a disappointingly small  36,000 increase in jobs.  It seems that over the past two years some 2.2 million folks have left the labor force.  Whereas the administration hasn't a clue about how to get the hugely important real unemployment rate to a politically acceptable level, look for a lot of smoke from the Left and math lessons from the Right.  

 

bill bowen -2/11/12

Presidential Leadership

   President Obama's "What Me Worry?" State of the Union address brings into focus the question of leadership. For reference I look to John Kotter's Harvard Business School opus, Leading Change. Steps include: establishing a sense of urgency; creating a guiding coalition; developing a vision and strategy; communicating the change vision; and generating short term wins. Lets look beyond the speeches to Obama's first two years.

    Important subjects of potential bipartisan support:

         1. TARP. Began as $700 billion fund to buy or guarantee toxic assets (real estate derivatives.) Passed under Bush.  Restructured by Hank Paulson. Used creatively to save the auto and banking industries. Geithner/Obama didn't screw it up.

        2. Stimulus. Deferred to Nancy Pelosi who made it a $787 billion grab bag of pork and earmarks. Perhaps give a pass to the rookie president.

        3. Healthcare. Deferred to Nancy Pelosi and Harry Reid to design and pass.  Gave lots of speeches. Corruption of Reid's process to buy votes inflamed the Tea Party. A signature achievement of the administration.

        4. Afghanistan. Dithered for a year before deciding to get in and get out ... or not.

        5. Middle East. No pressure on Israel / Palestinians to settle the core problem. Let Hillary, Biden, and Gibbs comment on protests engulfing the Middle East. No support for allies; no statement of principles beyond 2009 Cairo speech which was less forceful than Condi Rice's 2005 Cairo speech.

    Important subjects to the Liberal base:

        1. Don't Ask, Don't Tell. Somehow got passed by the lame duck Senate. Obama AWOL.

        2. Cap and Trade. Passed by Pelosi; ignored by Reid. Guerrilla war being engaged by the EPA through regulations.

       3. Gun control. Golden opportunity after the Tuscon murders, the way that the Brady Bill was passed after Reagan assassination attempt.  Nary a word.

       4. Card Check. Abandonment of signature union objective to ease union organization.

       5. Closing Gitmo. Let Holder try to move cases to New York. Eventually moved back to Bush's military commissions. Indefinite detention in Cuba for the hard core.

      6.  Immigration. Let the DREAM Act languish in Congress. Attacked Arizona without proposing actionable alternative.

   And now the subject of primary national importance, getting finances in order.

      1. Not a peep when Pelosi's House doesnt' even propose a budget.

      2. Appoints a Deficit Reduction Commission with a promise that it is not just another Washington effort ot sweep a problem under the rug. Commission makes specific comprehensive recommendations. Obama ignores.

       3. Gives a State of the Union address which ignores $1.5 trillion deficit in current budget, $14 trillion debt, real 17% unemployment, and financial meltdowns in other countries. Notes "Sputnik moment"; calls for solar panels and trains. Bashes "earmarks" after approving thousands and Republicans commit that there will be no more.

       4. Waiting for Paul Ryan to present Republican budget, healthcare proposals, and propositions for reforming entitlement programs. Assumes that public will respond negatively to  "meanspirited" Republican attack on popular government programs.  Refocuses staff on 2012 election. Republicans decide to trust the good sense of the American people and carry the financial responsibility mantle.

     Scroll back up to the first paragraph to review Prof. Kotter's definition, and see if there is a single subject on which President Obama has exhibited leadership. Instead, the style is to let his wishes be known, then let the various forces driving action go their own ways. My favorite quotation is from Dr. Martin Luther King, Jr:

     "The ultimate measure of a man is not where he stands in times of comfort and convenience, but where he stands in times of challenge and controversy." How refreshing that would be.

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    This week's video is an Egyptian television interpretation of a January 29 interview with Robert Gibbs. One can imagine being a pro-American leader of Yemen, Columbia, Jordan, or Poland and wondering about the implications of America's financial bankruptrcy, the Wikileaks-induced inability to have a confidential discussion with the US ambassador, and the likely support that you would get from President Obama in a crisis.  It would be nice if one believed that Obama were having conversations with a legion of our allies.