Newshoggers.com

The Rhode Island Jackass

By Dave Anderson:

A decent basketball player and the sister of a C-list celebrity met in August and then married six weeks later. Not the smartest thing in the world, but not amazingly unusual. The normal suspects are running pools for the divorce date, but no one questions their legal rights and obligations to each other now. They're straight.

A jackass in Rhode Island is questioning other couples' committments even if they couples had known each other for significantly longer:

An opponent of same-sex marriage, Governor Carcieri has vetoed a bill giving domestic partners the right to claim the bodies of — and make funeral arrangements for — their loved ones.

He took issue with the definition of a domestic partner as “a person who, prior to the decedent’s death, was in an exclusive, intimate and committed relationship with the decedent” for at least a year, saying a year “is not a sufficient duration to establish a serious bond between two individuals ... [relative to] issues regarding funeral arrangements, burial rights and disposal of human remains.”

No one would question the spousal rights of the Odom-Kardashian couple despite the fact that they have known each other for only a few months. Jack-ass Gov. Carcieri, please recognize reality and even if your religious/political beliefs means not recognizing gay marriage (you’ll be irrelevant soon enough), recognize the reality that is shifting around you on the multitude of relationships that exist and find some way to not be a jackass and shit-upon your citizens in order to hold your right flank in a primary.

Shock, Liberals and Healthcare

By Dave Anderson:

I have great respect for Ron but I think his shock argument to hope for a Senate progressive filibuster of the healthcare bill is a bad idea for a variety of reasons. The biggest one is that liberals have not demonstrated any recent capacity to effectively utilize a shock moment to implement large scale and systemic change, and I do not have confidence that the decision making chokepoints in the US government (both official and informal) would break in such a way that liberal shock doctrine legislation could be implemented. Ron writes:

I remain convinced that we don't have time for the slow and continued improvement that Ezra talks about. The health care system is going to implode very soon - perhaps within the next two years. There will be nothing in any bill passed this year that will help avoid that implosion. If an inadequate Democratic health care bill passes the likelihood is that it will be blamed for the implosion. The best case scenario for the Democrats is a bill, even a bad one, being filibustered in the Senate.

Democrats will be blamed for any healthcare implosion in the two or three year time frame that Ron is projecting. If a good bill is passed that is neccessary but insufficient, Democrats will be blamed for it being insufficient. If a crap bill is passed, Democrats will be blamed for passing a crap bill. If no bill is passed, Democrats will be blamed for not doing anything. The American public has little patience for any explanation that involves the concept of “long and variable lags” in policy implementation. One of the Mayberry Machiavelli maneuvers of the Bush Administration was a recognition of this basic fact; they front loaded benefits and back-loaded and underestimated the costs on every first term policy that they passed. This is a basic fact of democratic accountability; voters will blame or reward parties on a near real time basis even if the good effects that voters are enjoying are the work of previous political regimes, or merely a ride on a long term trend. As I have argued, responsibility and perfect policy is not a winning political argument in the United States at this time.

Conceding Ron’s timeline for collapse of the American healthcare system for the sake of argument, it is a shock doctrine moment where massive change can be implemented with minimal opposition, I do not think a good healthcare plan will emerge.

There have been two massive shock moments in the United States this decade. The first was 9-11, and the second was the Fall 2008 fiscal collapse. Conservatives and their allies were able to significantly tilt the political table for five years after 9-11 in order to implement long term wet dreams that were previously unpopular (invading Iraq) or not part of the normal course of conversation such as torture. After the fiscal crisis, liberals were rail-roaded by their leadership and their reflexive crouch towards the Reagan error and DLC reaction of bailing out the banks without imposing significant system changing costs. Once the money was released with minimal conditions, business resumed as normal with record bonuses and Goldman Sachs executives preaching their social value/prosperity gospel bullshit.

I think in Ron’s scenario, the shock moment will by a massive deregulation of the private insurance market (get those 18 hour old infants out of the hospital stat and screw annual mammograms or vaccination coverage as that it too expensive) and a concurrent looting of government resources on the basis of Medicare Part D where the government is not allowed to use its purchasing bulk to get a decent deal while shoveling out hundreds of billions in subsidies to Medicare Advantage plans. I do not think the probability of getting effective single payer or a pure Medicare-E public option or a system like the French system would emerge in such a shock moment. Liberals have not demonstrated the ability to build a coalition that can maintain discipline, credibly threaten defection and focus on system changing reforms in a short time period. Conservatives have demonstrated and rewarded that capability. Shock is not a liberal’s friend.

Assessments and the tax revolt of 2010

By Dave Anderson:

Allegheny County's politics have been thrown into a tizzy this afternoon.  Judge Wettick has ordered a four year rolling reassessment for the entire county as the base year system produces highly inequitable results.  Re-assessments are the local political career killer and everyone in the regional political system on both sides of the aisle have been trying to duck this problem for at least the past half generation.  

The political hand grenade that is the reassessment battle in Allegheny County is a microcosm of the political fights that are and will be breaking out across the country.  2010 looks like a year of tax revolts as the incentives of pain and local balanced budget requirements will lead to a nasty brawl as the electorate which is significantly older and more likely to own property and resources will vote first to cut someone else's services or protect a tax break than to ride out the storm. 

In 2007, I thought the mechanics of a tax revolt were in place for 2010, and it is looking more likely as the pain is even more widespread than I projected then:

as long as we stay within a mindset of zero-sum gamesmanship, reactionary and exclusionary politics is a much stronger hand to play as it is easier to assemble a narrow coalition to protect fixed slices of the pie. And as an intermediate term strategy this is a good way to reap a tax revolt within the next couple of years as the politics of pain will be too strong and the pallative of short term relief will be tempting; thus the symptoms of the underlying problems of short term pervese incentives, decreasing cutting edge productivity, loose credit and perpetual debt will be addresse without actually changing the actual structure of these trends....

People who are stuck with mortgages and houses that they can not sell, refinance or service will be looking for help. They will be looking for refinancing deals, special breaks, holds on foreclosures, delays on credit reporting, and most significantly at the local level, assistance on minimizing the quasi-fixed costs.... and most importantly, constant and downwardly revising re-assessments without concurrent increases in millage rates......

People want to make that pain go away without the costs of fixing the greater problems, and engaging in a local government financial death spiral and micro-local education arbitage seems like a decent short term fix, so we'll see a full scale tax revolt in 2010 or no later than 2012 as the last round of housing bubble junk Option ARM mortgage resets will be hitting in 2010/2011 --- what we are seeing now is just the tip of the iceberg....

The county government has every incentive to foot drag their assessments and use every possible comparable sale from 2006, 2007, and 2008 before the bubble began to deflate locally or nationally.  Property owners will want their reassessments to be done as quickly as possible using comps from this week or even projected values from sales next month as prices will probably be a tad lower tomorrow than today.  Lower projected values for tax purposes frees up individual cash flow if millage rates stay the same.

The tax revolt will occur when local taxing bodies see a marked decrease in taxable value in their jurisdiction and attempt to make up for some of the revenue loss by increasing millage rates.  At that point the Tea Party contingent has a ready made issue to glom their organizational capacity onto.  And we local government system failure. 

Casino assessment battle begins

By Dave Anderson: 

This is a casino post, while the next post will be a broader political-economy and municipal finance post.  The Post-Gazette reports that Allegheny County will assess the Rivers Casino in the near future instead of putting the problem off by hiring consultants to conduct the assessment.  The P-G has an interesting nugget about the county incentives and the implied assumptions concerning the cash flow of the casino:

The county will ask Chief Assessment Officer Ed Schoenenberger and its own assessors to complete the task and have a permanent value on the books by Jan. 15 for the 2010 tax year, said Kevin Evanto, a spokesman for Executive Dan Onorato....

The eight North Shore parcels that make up the casino complex currently are assessed at $7.7 million, relating almost exclusively to the value of the land. The 12.6-acre site on which the casino sits is valued at $4.1 million, far less than the $320 million to $340 million it cost to construct the building.

By contrast, the neighboring Carnegie Science Center is assessed at $27.7 million.....

Income is one of the methods used to assess property, but Mr. Evanto said the county has since determined that it will go with the cost method, which is related to the value of the construction. He said other casinos in Pennsylvania have been valued that way.

Two valid ways of assessing properties is to look at the projected net present value of all future cash flows, compute the appropriate discount rate on those cash flows and project the long term "fair market value" sales price based on these projections.  The other way is to look at the construction costs as a revealed price that is based on the assumption that the owners would not have paid the construction costs if the building was not worth at least that much to them over the long run.  At least those are the two quasi-economic justifications for those two assessment models.

Working with the assumption that the county is fundamentally broke and Dan Onorato has been on a career enhancing quest to find more politically cheap revenue for the county that does not piss off seniors, the county has a strong incentive to choose the assessment method that will generate the most cash for the county over both the short run and the long run.  The short run discount rate is fairly high as most politicians seldom look more than thirty months out when they are being visionary. 

The county is making a bet that the new construction costs are higher than the long run net present value of the income streams generated by the casino owners.  The county is betting that revenues and income will be provide a significantly lower taxable value than assuming that the revealed preference of construction costs is the closest to fair market value.  The county's actions imply a belief that the casino is a clunker. 

The Constant of the Tea Party Tantrums

By Dave Anderson:

A few years ago when I was laying out my decision criteria for whom I would support in the 2008 Democratic primary cycle, I talked a little bit about calculus and constants when taking derivatives:

When I analyze problems and scenarios, I am interested in looking at the things which have the potential of changing. After a very short while, I only pay attention to constants when the laws of reality and physics force me to pay attention to them. I assume unhinged and substantially fact free attacks against Democrats are a prerequisite of any GOP campaign. I assume that these attacks will occur, and the only variance will be the internal details of the attack. If any Democrat wins the Presidency we'll have the crazy lunatic brigade of the VRWC trying to gin up a scandal where there is nothing there....

And a few months later in Steve Benen is making the same type of argument for Senator Blanche Lincoln (D-AR) with regards to her cloture vote on healthcare:

Look, Lincoln isn't going to out-conservative the Republican candidates in Arkansas. No matter how she votes on reform, the entire Attack Machine is going after her as some kind of radical leftist. It doesn't matter if it doesn't make sense, and it certainly doesn't matter if she votes with Republicans on the big issues of the day for the next year.

A Democrat will not be accepted by the Tea Party brigade no matter what they do short of becoming the love child of Joe Lieberman and Glenn Beck. And even then, there is always a slightly purer conservative candidate whom the Tea Partiers will rally behind instead of the Democrat. Cowering in fear and shooting your base in the foot in an attempt to win the admiration of people who will never vote for you, donate to you, or door-knock for you is counter-productive. Producing good policy that actually makes some type of difference that you can claim credit for while also discrediting the wildest claims of your opponents is better policy. Cowering has not worked particurly well for Democrats in general, or Southern Democrats in particular for the thirty year rise and fall of the Reagan coalition, so why continue a mal-adaptive behavioral pattern when the Freepers and Tea Partiers are merely a constant in the American political landscape.

Predictable Healthcare Problems

By Dave Anderson:

Something that I wrote in December 2007 that I saw while looking for another post, but is very relevant today: (I did not get all of this right, I forgot about the agenda setting power of not scheduling floor votes on horrendous bills, but Stupak-Pitts is the prime example of my last two paragraphs)

And here is the problem with the bipartisanship mien --- addressing CO2 and healthcare are system changing moves that dramatically impact the Republican coalition's ability to restrengthen itself without dramatically recasting itself and rearranging internal power distribution.

Even very optimistically assuming the Democrats pick up a net of seven seats in the Senate and net another twenty in the House, two problems emerge. One is more pronounced in the Senate, as the six potential net pick-up seats have four Republicans (Sununu, Warner, Snow, Smith) who are occassionally willing to defect from the rest of the Republican caucus on their pet issues or to moderate their conservative votes for a swing(ish) state. Other potential Democratic pick-ups will be in New Mexico and Colorado which will lead to net improvements in Democratic margins by almost 2 full votes, and potentially the scandal seat in Alaska. The Democrats will increase the size of their caucus faster than they will increase their vote counts even assuming that no current Democrat defects on any particular vote. Seeing Landrieu lose to a conservative Republican conversely has less impact on any particular vote. The same basic dynamic will play in the House, as Democrats are targetting Republicans who already occassionally defect from the caucus, so a net 1 pick-up is a little less than 1 expected value vote on any given progressive bill.

The second problem is the way that Nancy Pelosi has decided to run her Democratic caucus and the rule sets of the House. She has decided to adapt a "majority of the whole" operation where bills will be scheduled if they have a majority of the entire House behind it. This is in contrast to the Republican rules of 'majority of the majority' where the Republican caucus would have internal whip counts behind legislation which when presented to the entire House would have near unified GOP support even if there was significant internal divisons.

Assuming as I do that carbon dioxide policy and healthcare are coalition rejiggering efforts, they will only pass the House in a majority of a majority rule framework if they are anything that vaguely resembles their campaign intent. In a majority of the whole framework, the Republican Caucus will first have higher degrees of unity due the losses of their marginal and moderate members (see New England in 2006) and the ability to offer Blue Dog/Bush Dog the marginal decision maker value and dictate to their own self-importance. Any GOP+Bush Dog bill on carbon dioxide or healthcare will be a hollow farce in actually achieving its goals beyond shoveling pork to extractive and protected industries. The only way that a good bill gets out of the House and into the Senate where it faces its own concentrated minority opposition, is through majority of the majority rules

Pushing through these two major policy initiatives are coalition cutting efforts that are also good public policy. Even if these are very good first steps and not the entire marathon, the political, and economic pay-offs that should occur will start occurring fairly quickly which means we should expect either hollow shells of bi-partisan bills, or a knock-out, drag down partisan fight as either, and especially both policies, are existential threats to the current Republican Party coalition.

Karzai's corruption pipe dream

By Dave Anderson:

The San Fransisco Gate is carrying a great whopper of a tall tale:

With his reputation sullied by the messy election, Karzai gave assurances Sunday that he would rid his government of corrupt officials.

"Individuals who are involved in corruption will have no place in the government," Karzai said in an interview with the U.S. Public Broadcasting Service.

Karzai also said donor countries share some of the responsibility for rampant corruption because of a poorly structured system to manage projects. The U.N. and some donor countries have also cited the need for a more efficient system to guarantee that the money serves the Afghan people.

Corruption from Western cash flows or natural resource smuggling are the most profitable businesses in Afghanistan. As soon as the corruption welll dries up and it is not replaced by other means of making a decent living, the motivation of thousands of individuals employed by the Karzai government will fall considerably. The Afghan government has insufficient local revenue sources to pay efficiency wages instead of locally minimal market clearing wages as it is. Karzai's foreign patrons, the US included, have not shown a willingness to fund projects that pay efficiency wages either. For instance the Afghan National Police has an average pay of $110 per month, which is above average market rates, but significantly below that of the $10 per day Taliban or the Afghan National Army. The Atlantic has more:

the policemen contend with one of the most fanatical and militant groups in recent history—all for a monthly salary of around $110 (about 7,000 Afghanis). While this is an improvement over the average monthly Afghan income of $25, it is nearly two and a half times less than that earned by the Afghan National Army (whose training is admittedly more rigorous, and whose missions are considered more involved than the routine but dangerous patrols carried out by the police). In light of this, one might imagine that everyone would simply sign up for the army instead of the police, but the army has quotas, which makes it more difficult to get into.

Given the widespread discontent about the rate of pay, it’s not surprising that the police force is rife with corruption and bribe-taking. Talk with any taxi driver or farmer in Lashkar Gah, and you’ll hear stories about police shakedowns.

Throw in multiple national interests and national security bureaucracies running their own operations, and corruption will be endemic. For instance, Bruce R at Flit recounts a "police station" near Khandahar that was a bit odd:

But a year ago in Kandahar, there was at least one "police station" on a convenient secondary import/export route that had no apparent formal connection with the rest of the ANSF and no mentoring presence, and twice to my knowledge officers from ANA 205 Corps attempted to take action to seize armed men or weapons they had identified near the city and were told by higher authorities in their own chain of command to back off. In all 3 cases, the president's brother was cited as the dodgy guys' employer. The ANA more or less concluded that he was untouchable, at least as far as they were concerned.

As long as there is massive cash flows going into Afghanistan without a credible threat of the spigot being shut off, and an unwillingness to crack down on foreign corruption, local corruption will be an endemic and profitable business for those who are get a slice of the pie. The Karzai elites are better off being corrupt bastards propped up by ISAF even as their corruption weakens their long term hold on power if ISAF ever left. If Kabul ever fell, there is always Swiss numbered accounts to enjoy while sunning on the French Riveria.

UPDATE from Bruce R in comments regarding wage gaps: For the record, the gap in pay between the ANA and ANP has largely closed. First-year soldiers/police officers in both services are paid at $120 a month currently.

Pirates chasing the money

By Dave Anderson:

Why rob banks?

That is where the money is...

We are seeing the same trends in the established black market of maritime tolls and hostage taking off the Somali and Seychelles coast. Via Eagle Speak:

Pirates in two skiffs fired automatic weapons and rocket-propelled grenades at the Hong Kong-flagged BW Lion about 1,000 miles (1,600 kilometers) east of the Somali coast, the EU Naval Force said....

The high-seas hijackings have increased despite an international armada of warships deployed by the United States, the European Union, NATO, Japan, South Korea and China to patrol the region. U.S. drones launched from nearby Seychelles are also patrolling the region for pirates.

The pirates are chasing the money. The international naval patrols that are sucking up a significant proportion of the global long range naval deployment capacity has done a decent job of suppressing piracy in the near-littoral but the sorting problem of identifying which skiff is up to no good out of dozens/hundreds of skiffs that are dispersed throughout the western Indian Ocean is a nasty problem. The pirates are going to where there is easy prey because they know that if they can catch and capture a large international freighter, they still have localized chaos on land to protect their backsides while they collect their ransom. The money is further out to sea, but the money is still floating on by.

Unless there is order on land that recognizes the local realities of power and influence as well as having some stakes in maintaining the free flow of international trade on the high seas, piracy will continue to pay off as that is where the moeny is.

The same can be said of the drug trade --- there is too much money to be made that even successfull local barrier strategies will have work-arounds as the profit margins are too good to pass up when there are few other viable alternatives to making a good living.

Altmire's Door-knockers?

By Dave Anderson:

Who are Jason Altmire's (D-PA-4) door-knockers?

The traditional source of door-knockers and phone bankers for Democrats are some combination of environmentalists, pro-choice activists, feminists, union members, health-care advocates, peace advocates, generic multi-issue liberals and the African American grandmother network. In PA-4, feminists and pro-choice activists have never been too involved with Altmire because he has said since he started running in 2005 that he would be voting against their interests on a regular basis. Environmentalists saw Altmire vote against Markley-Waxman this summer, health-care advocates saw him vote for the Stupak Amendment poison-pill and then against the entire reform bill last night. Union members as a class have not been screwed by Altmire yet, he actually voted for EFCA when there was no chance in hell of it passing. But if Altmire wants to focus on "jobs, jobs, jobs" without a plan, EFCA will be too controversial for him to vote for it. Hell, 70% of EFCA will most likely not get his vote. And his district is fairly white and trending Repbulican.

So where will Jason Altmire get people willing to get up at 6:30 on a Saturday morning to door knock for him next summer if he has managed to piss off all traditional base support groups in the Democratic and liberal coalition?

Pre-rejecting the Obama Agenda

By Dave Anderson:

Liberals and Democrats have argued that the two governors' races that the Democrats lost this week turned on a combination of local issues and weak Democratic candidates who would not do anything to excite the Democratic base. 

Conservatives and Republicans have argued that these two races are a national referandum on the Obama agenda and that the answer was a decisive no to having a government that can actually attempt to solve some problems instead of engaging in a looting expedition. 

If that is the case, then New Jersey must have been ahead of the crowd as the following three minutes on Google shows:

New Jersey Real Times:

November 03, 2008, 5:32AM

Gov. Jon Corzine's approval rating has remained steady in the past month, according to a poll released today.

The Fairleigh Dickinson University PublicMind poll found 46 percent of respondents approve of the Democrat's performance, while 37 percent disapprove. That's a slight improvement from the marks he received in October, when 45 percent approved of the job he was doing, while 39 percent disapproved.

Meanwhile, 24 percent of respondents said the state is headed in the right direction, while 65 percent say it's off on the wrong track. Last month, 23 percent said the state was headed the right way, while 67 percent said it was headed the wrong way.

Please note the dateline.  If the rest of Google is correct, Obama was elected President on November 4, 2008.  So New Jersey, according to the conservative argument, pre-rejected the Obama agenda a year in advance despite giving him a comfortable victory the day after this poll was published.  The other explanation is that it is tough to win as an incumbent when job approval ratings are barely a net positive and the states' voters think the state is heading in the wrong direction by a 5:2 margin.