Holder WILL NOT be prosecuted

Deputy Attorney General James M. Cole sent Boehner a letter yesterday in response to the contempt of Congress citation from the House passed yesterday.  Cole said:

“The longstanding position of the Department of Justice has been and remains that we will not prosecute an Executive Branch official under the contempt of Congress statute for withholding subpoenaed documents pursuant to a presidential assertion of executive privilege…Consistent with this uniform position and practice, the Department has determined that the Attorney General’s response to the subpoena issued by the Committee on Oversight and Government Reform does not constitute a crime, and therefore the Department will not bring the congressional contempt citation before a grand jury or take any other action to prosecute the Attorney General.”

In other words, shut up House.

Read more: http://www.cnn.com/2012/06/29/politics/holder-contempt/index.html?eref=mrss_igoogle_cnn

How does the insurance mandate work?

Here is a great chart from the Kaiser Family Foundation showing just how the Obamacare individual mandate that was found constitutional will work and who it will and will not affect.  If you can't see the chart below go here: http://healthreform.kff.org/en/the-basics/requirement-to-buy-coverage-flowchart.aspx

Holder held in contempt. What happens next?

The Republicans in the House have passed a resolution holding Attorney General Eric Holder in contempt of Congress for following President Obama’s claim of executive privilege having to do with turning over documents the House wanted.

What happens next?  This from the Washington Post:

Under federal law, the House contempt citation goes next to the U.S. attorney for the District of Columbia, who would be responsible for bringing the matter to a grand jury and beginning possible criminal prosecution of his boss, Mr. Holder.

The Justice Department’s chief precedent on the issue is a 1984 opinion issued by Office of Legal Counsel. The opinion by Ted Olson, highly regarded among conservatives, says a U.S. attorney “is not required to refer a congressional contempt citation to a grand jury or otherwise to prosecute an executive branch official who carries out the President’s instruction to invoke the President’s claim of executive privilege before a committee of Congress.”

People familiar with the matter said that precedent is expected to help form the Justice Department response.

The last time Mr. Olson’s opinion came into play was in February 2008, when the Democratic-controlled House voted to hold two senior aides to President George W. Bush, Josh Bolten and Harriet Miers, in contempt of Congress over another documents dispute. On Feb. 29, 2008, then-Attorney General Michael Mukasey wrote to then-House Speaker Nancy Pelosi that Justice wouldn’t take any action against the two aides.

Can you NOT buy insurance AND NOT pay a penalty?

What happens if you don’t buy health insurance and don’t pay the tax (penalty) for not having health insurance?  In an earlier post, I quoted Erza Klein’s reading of the Affordable Care Act that you could NOT buy insurance and suffer no consequences if you failed to pay the penalties for being uninsured other than having the penalty deducted from your tax refund.  As a result of the court ruling today, that does not appear to be the case.

On page 44, footnote 11 of the court’s ruling in the Obamacare case the court says:

—————— ¹¹Of course, individuals do not have a lawful choice not to pay a tax due, and may sometimes face prosecution for failing to do so (although not for declining to make the shared responsibility payment, see 26 U. S. C. §5000A(g)(2)). But that does not show that the tax restricts the lawful choice whether to undertake or forgo the activity on which the tax is predicated. Those subject to the individual mandate may lawfully forgo health insurance and pay higher taxes, or buy health insurance and pay lower taxes. The only thing they may not lawfully do is not buy health insurance and not pay the resulting tax.

In other words, if you choose to NOT buy health insurance, you cannot just ignore the penalty.  If you do, the IRS can come after you just as they could if you failed to pay any tax due.  The only thing the IRS can’t do is prosecute you as a tax cheat.

What the court actually said about Obamacare and how conservatives won.

You will be hearing a lot over the next few days about the Supreme Court decision, announced today, to uphold the key provisions of the Affordable Care Act (Obamacare). Much of what you hear about the decision will be inaccurate.  I’m going to try to clarify just what the court ruled in this post based upon my reading of the actual decision.  You can download and read the full decision yourself here: http://www.scribd.com/doc/98543022/SCOTUS-ACA-Ruling

There were several issues before the court in regard to the Affordable Care Act (Obamacare). I explain how the court ruled below.  Additionally, I show that Republican/Tea Party/Conservatives actually WON.  The court actually accepted the conservative position on the two main issues before the court. 

1. Were the penalties for not having insurance fees or taxes? 

Ruling: The penalties are “fees,” not taxes.

Reasoning: If the penalties were taxes, then the plaintiffs had no standing to sue for relief because of something called the Anti-Injunction Act which says you can’t sue for relief from a tax until you are actually subject to the tax.  Since the Affordable Care penalties don’t go into effect until 2014, plaintiffs would have no standing to sue because they had not yet been subject to a tax.  The court ruled that the penalties WERE NOT a tax in terms of the application of the Anti-Injunction Act.  The wording of the Act made it clear that Congress did not intend the penalties to be treated as a “tax” for purposes of the Anti-Injunction Act.

2. Was the individual mandate a valid exercise of Congress’s power to “regulate” commerce under the Commerce Clause of the Constitution?

Ruling: NO.  The Constitution gives Congress the power to regulate commerce, not compel it.

Reasoning: Construing the Commerce Clause to permit Congress to regulate individuals precisely because they are doing nothing would open a new and potentially vast domain to confessional authority.  In short, Congress does not have the authority under the Constitution to regulate inactivity.

NOTE: The court actually AGREED with Republicans/Tea Party/Conservatives on this issue.  They had argued that Congress did not have the right under the Constitution to require someone to purchase insurance (or broccoli) if they didn’t want to do so.  The court agreed.

3.  Does Congress have authority under the Constitution to impose these penalties for not having insurance under some other provision of the Constitution separate from the Commerce Clause? 

NOTE:  It is an established principal that the Supreme Court must pursue “every reasonable construction” in order to save a statue passed by the elected Congress and signed into law by the elected President from being declared unconstitutional.  The reasoning here is that the court should overrule the elected branches of government unless an Act is clearly unconstitutional.  See Hooper v. California, 155 U.S. 648, 657.

Ruling: YES.  The individual mandate may be construed as a tax from the standpoint of the Constitution and therefore the Congress can impose the tax under its power to raise and collect taxes.

Reasoning:  While the penalties are not a “tax” when it comes to the Anti-Injunction Act, they are a “tax” when it comes to the application of the Constitution based upon how the penalties are imposed and collected.  “The payment is not so high that there is really no choice but to buy health insurance; the payment is not limited to willful violations, as penalties for unlawful acts often are; and the payment is collected solely by the IRS through the normal means of taxation…Neither the Affordable Care Act nor any other law attaches negative legal consequences to not buying health insurance, beyond requiring a payment to the IRS.”  In short, the court reasoned that the penalties were really a special kind of tax levied to partially offset the expense of providing medical care to the uninsured.  It is similar to a tax on gasoline that drivers of cars must pay to help offset the cost of roads and bridges.

4.  Does the Medicaid expansion violate the Constitution by threatening states with loss of their existing Medicaid funding if they decline to comply with the expansion?

Ruling: YES.  Congress has the power under the Spending Clause to establish cooperative state-federal Spending Clause programs provided a State voluntarily and knowingly accepts the terms of the programs but Congress cannot act in a way that leaves the States no real option but to comply.

Reasoning:  The Medicaid Expansion violates the Constitution because it threatens States with loss of their existing Medicaid funding if they decline to comply with the expansion.  Such a threat is “economic dragooning” since the threat is for loss of over 10 percent of a State’s overall budget leaves States with no real choice.  Participation is no longer truly voluntary.  The court said there was a remedy.  It said the portion of the Act calling for the withdrawal of existing Medicaid funds for failure to comply was unconstitutional.  However, the other provisions calling for a expansion of Medicaid and voluntary participation by the States could stand.

NOTE:  The court actually AGREED with Republicans/Tea Party/Conservatives on this issue.  They had argued that Congress did not have the right under the Constitution to force States to participate in a expanded Medicaid program if the States choose not to do so.  The court agree.

Court SAYS OBAMACARE CONSTITUTIONAL

The Supreme Court ruled on the constitutionality of the Affordable Care Act (Obamacare) this morning.  The court found that the health care law WAS constitutional under Congress' taxing authority.

Nearly half of Americans think Obamacare doesn’t exist

Didn’t see this somehow but back in February but  the Kaiser Family Foundation conducted a study asking Americans about Obamacare.  Nearly HALF of Americans said they thought the law had been repealed (22%) or weren’t sure whether it was still existed or not (26%).  Only 52% of Americans seemed to know that Obamacare was still the law.

That means a whole bunch of folks are going to be surprised tomorrow when the Supreme Court rules on a law that they think DOESN’T EVEN EXIST.

I am always amazed as just how little the average American knows about his/her government.  Really, I’m amazed.

http://www.foxnews.com/politics/2011/02/25/nearly-half-americans-dont-know-health-law-repealed-poll-shows/

Health law ruling—Speculation about how the court might rule.

Washington is all a twitter about how the Supreme Court might rule on Obamacare tomorrow morning shortly after 10AM.  Of course, no one knows how the court will rule since there have been no leaks.  However, some people point to clues—faint clues admittedly, but clues as to how the court might rule.

Most say they expect Roberts to write the majority opinion and that they expect Roberts and Kennedy to side with the majority.  That would suggest that the decision will either be a 6 to 3 ruling upholding all or most of the law (maybe just striking the mandate and leaving everything else) OR we could have a 5 to 4 ruling striking down the law in its entirety since it is doubtful that Alito, Scalia, and Thomas will accept anything but a declaration that the whole law is unconstitutional.

Some people thought Scalia's caustic comments and scathing dissent in the immigration case might signal how the court will vote on health care. They say Scalia tends to become more caustic when things aren't going well for conservatives. That could be a signal that the court will uphold all or most of the law.

Others say that the split decision on immigration might be a clue that the court will find some middle ground.  In the immigration case, the court upheld the stop-and-question part of the law but threw out the rest so neither supporters nor opponents got everything they wanted but both sides got something.  That could signal that the majority will find a way to get rid of the mandate in the health law that conservatives don’t like will keeping the rest of the law, maybe even including the fines, that supporters of the law want.

As you know, there are four issue before the court, not just one.

First, is the individual mandate a tax or just a penalty.  If the court says the “penalty” is really a tax—and it has all the characteristics of tax since it would be administered by the IRS—then the plaintiffs wouldn’t have standing to sue.  You can’t sue until you have been “harmed” and you can’t be “harmed” by a tax until it takes affect.  That would be the end of the whole discussion, case would be thrown out.  No one expects the court to rule that the “penalty” is a tax if for no other reason than no one wants to have to revisit the whole issue in 2014.

Second, there is the issue of the Medicaid expansion.  Most people expect the government/Obama to win this one if for no other reason than that the federal government is paying for practically all of the cost.

Third, there is the issue of severability.  Congress didn’t include a standard “severability” clause saying that if one part of the law was declared unconstitutional then the rest was severable—could stand.  Most people think the court will rule that the rest of the act IS severable from the mandate since courts normally assumes severability even if Congress doesn’t include the clause.  Plus, if the act is not severable then the court ties its hands—has to either find the whole law constitutional or unconstitutional.  They probably don’t want to restrict their choices that way.

Fourth and finally, we have the issue of the mandate.  There is no question that Scalia, Thomas, and Alito think the mandate is unconstitutional.  Based upon comments they made in oral arguments it appears that Roberts and Kennedy have serious doubts/concerns about the constitutionality of the mandate.  Bets are that the mandate will go.  Whole question is whether other parts of the act will go with it.  Guess we will find out sometime tomorrow morning.

NEW POLL: Obama leads in key battleground states

A new Quinnipiac University poll shows Obama now holds a substantial lead in three key battleground states:

Florida: Obama 45% Romney 41%

Ohio: Obama 47% Romney 38%

Pennsylvania: Obama 45% Romney 39%

[Margin of error: 2.8%]

No candidate has won the presidency without carrying at least two of these three states since 1960.

Peter A. Brown, assistant director of the Quinnipiac University Polling Institute provides this analysis:

"The president's overall margin is built on his big lead among women, younger voters and African-Americans. In Florida, on the heels of the president's order that will prevent the deportation of some younger illegal immigrants, he holds a big lead among Hispanic voters.

"The horse race numbers reflect the general view of voters that they like the president better. Obama has a net favorable view among Ohio voters and he is viewed evenly by those in Pennsylvania and Florida, while Romney's favorable/unfavorable ratio is negative in all three states.

"Voters in all three states voice strong support for the president's mini 'Dream Act' immigration order, and they say the president would be better than Romney handling immigration.

"For much of the last year, more voters in these swing states have said Romney would do a better job on the economy. That advantage has largely disappeared, at least for now."

Voters in all three states are mixed on which candidate "would do a better job on the economy," and which candidate "would be better for your personal economic future."

If you oppose the individual mandate, you are just dumb.

If you oppose the individual mandate in the Affordable Care Act, you are just dumb.  And, it doesn’t matter WHY you oppose the mandate.  People who SUPPORT the mandate do so because they believe anyone who can afford to do so should purchase health insurance so that the rest of us don’t have to pick up the tab for them when they get sick.  So, if you believe that people should take some personal responsibility for themselves, you would be dumb to oppose the mandate.

But ,let’s say you are one of those hardy Americans who take care of themselves and don’t want anyone telling you that you have to purchase health insurance, particularly not some socialist Obamacareist.  So, you are flaming mad at this individual mandate in the Affordable Care Act and hope the Supreme Court strikes it down on Thursday. 

Ezra Klein says if that’s what you think, you are just one damn fool.  Why?  Well, says Klein, the individual mandate is the BEST DEAL IN TOWN if what you want to do is NOT PURCHASE health insurance.  How is that?  Here is his reasoning:

Here’s what happens now if you decide to wait until you’re sick to buy health insurance: Every health insurance company will tell you no, or they’ll charge you an exorbitant rate, or they’ll offer you insurance that will cover everything except your illness. Insurers, quite rightly, do not want to cover preexisting conditions, and there’s little consumers can do to make them change their minds.

Under the Affordable Care Act, here’s what happens if you wait until you’re sick to buy health insurance: You can buy health insurance and no insurer can charge you more for walking into their office with a lump the size of a golf ball. The catch is that between now and getting sick, if you can afford insurance — which the law defines as you have access to insurance that costs less than eight percent of your income — you have to pay a penalty of $695 a year (that’s the 2016 number; after 2016, it rises with inflation) or 2.5 percent of your annual income, whichever is greater.

The fact of the matter is that $695 a year or 2.5 percent of your annual income is likely to be a lot less than a decent insurance policy will cost you. In a way, paying the mandate is like buying an option to purchase insurance at some future date, when you need it more, for a price that you could never have gotten before the mandate.

But let’s say you try to eke out an even better deal than that: Let’s say you don’t buy insurance and you simply refuse to pay the mandate. What can the government do to make you pay?

Well, unlike if you refuse to pay your taxes, it can’t throw you in jail or put a lien on your home or other property (page 336 of the legislation). It can potentially reduce your tax refund, but that’s really it. If you’re not getting a tax refund, you’re free and clear.

Just goes to show how totally dumb people who oppose the individual mandate because they don’t want to buy insurance are.  They could get guaranteed insurability for $695 per year or even ABSOLUTELY NOTHING.  Now that’s dumb, real dumb.

Read Klein here: http://www.washingtonpost.com/blogs/ezra-klein/wp/2012/06/26/the-irony-of-the-individual-mandate/

Health Law: What constitutional law experts think

Let’s assume you asked professors who teach and write about constitutional law in our country’s top law schools how they think the Supreme Court should rule this Thursday  with regard to the constitutionality of the health reform law (Obamacare).  What would they say? 

Last week Bloomberg News surveyed constitutional law experts at 12 top U.S. law schools listed in U.S. News & World Report magazine’s 2012 college rankings.  These schools included Columbia, Harvard, NYU, Stanford, California-Berkeley, the University of Chicago, and so on.

19 of 21 of these experts on constitutional law said if the court follows legal precedent then the court should uphold the law requiring most Americans to have health insurance. 

Only eight of them predicted the court would do so.

Bottom line:  If the court follows the constitution, then the law will be upheld.  If the court declares the law in whole or individual mandate only unconstitutional, the justices will be basing their ruling solely on POLITICS.

Read the results of the survey here: http://www.bloomberg.com/news/2012-06-22/law-experts-say-health-measure-legal-as-some-doubt-court-agrees.html

UPDATE: 2012 Election Forecast

Here is a compilation of the most recent election forecasts from various sources including the Attack Democrat's forecast.  I'll be updating this summary as the race continues so check back frequently.

Who are the best and worst polling companies

Yesterday, I posted about the Bloomberg Poll showing Obama 13 points ahead of Romney.  I said in that post that this poll is probably an outlier since it differs from a number of other recent polls that show that the race is very close/maybe even.

Some people have asked me about Selzer & Company, the company that conducted the poll for Bloomberg.  I’m not personally familiar with Selzer so I took a look at chart Nate Silver has put together at Five Thirty Eight that rates pollsters.  Selzer comes in sixth out of a very long list of polling organizations so it is pretty good.  That doesn’t mean Selzer can have an occasional outlier but it does mean there is no reason to think Selzer is trying to rig the results.

If you are interested in how other polling organizations are ranked on Silver’s chart check out the chart below and a more complete chart at: http://www.fivethirtyeight.com/search/label/pollster%20ratings  You may want to keep this chart handy as you read the results of various future polls.

The thing to look at is a pollster’s PIE.  PIE is expressed as a positive number and reflects the amount of error that a pollster introduces above and beyond that which is unavoidable due to things like sampling variance. The lower a firm's PIE the better.  

Note: Selzer & Co. gets a PIE of 1.31, sixth from the best.  That's better than NBC/WSJ, AP-Gfk, Mason-Dixon, Pew, and Gallup.

Seven things we know for certain about the health reform ruling

We don’t know yet how the Supreme Court will rule in regard to the challenge to the Affordable Care Act however there are seven things we know for certain about the court ruling:

1. It WILL NOT be a unanimous ruling.  Mostly likely the decision will be 5 to 4 with sharp disagreement among the justices expressed in several different written concurring and disenting opinions.

2. The majority opinion WILL NOT uphold the law in its entirety.  At a minimum, the 5 to 4 majority opinion will declare the individual mandate unconstitutional.  It is very likely that the majority opinion will go further to strike down other major pieces of the legislation such as the ban of denial of coverage for pre-existing conditions.  There is a better than even chance that the 5 to 4 majority will strike down the entire law.

3. The majority opinion WILL overturn almost all previous precedents concerning Congress’ power to regulate interstate commerce. In order to agree with this ruling justices siding with the majority, Justice Scalia in particular, will have to overturn their own previous decision(s) with respect to the commerce clause.

4. Every law passed by Congress that relies upon the commerce clause, especially New Deal legislation, will be the subject of future litigation with complainants relying upon the Affordable Care ruling as a basis for striking down other legislation, even legislation that has been in effect for decades.  There will be an explosion of lawsuits seeking to overturn established law, some of which have been in effect for decades.

5. The court’s ruling on the Affordable Care Act will have NO effect on the outcome of the 2012 election regardless of how the court rules.

6. Regardless of how the court rules, health reform WILL NOT be revisited by any administration either Democratic or Republican for decades.  There will be no appetite in Washington to take on health reform again anytime soon.

7. If the court overturns the law in whole or part as expected, then health care costs and the number of Americans without access to affordable health insurance will continue to increase, perhaps at a dramatic pace.

Is Obama really leading Romney by 13 points?

Has Obama pulled 13 points ahead of Romney in head-to-head match up?  A new national poll says so.  Too early to tell if this new poll is accurate.

A new Bloomberg poll conducted June 15-18 has Obama leading Romney by 13 points, 53% to 40% among LIKELY VOTERS (those who said they would “Definitely Vote” if the election were held today.)  These results appear to be out of line with other recent polls that showed the raise essentially tied.  This may just be an outlier, so don’t get too excited.  However…..

Overall, the major finding concerning Obama’s lead and other findings I discuss below are VERY GOOD news for Obama and the Democrats if they are true.  We need to wait to see if other polls being conducted now and over the next few weeks support the Bloomberg findings.

Other findings in the Bloomberg poll:

62% think the nation is on the WRONG track about the same as other polls.

45% say Unemployment/Jobs is the most important issue facing the country.  Only 18% rate the federal deficit as most important.

Obama has a NET FAVORABLE rating of 55%, about the same as in other polls.

Romney has a NET FAVORABLE rating of 39% vs 43% in other polls.

A majority give a FAVORABLE rating to the Democratic Party (50%) and Bill Clinton (69%)

A majority give an UNFAVORABLE rating to the Republican Party (50%) and George W. Bush (51%).

A majority APPROVE of Obama’s job performance overall (53%) and his handling of terrorism (65%) but DISAPPROVE of his performance on the economy (53%) and the budget deficit (60%).

51% of Obama supporters say their support for Obama is VERY STRONG.  Only 35% of Romney supporters feel that way about Romney.

55% say Romney is more out of touch with average Americans vs only 36% who say Obama is out of touch.

Majorities say Obama is best at “understanding their problems and struggles” (55%) and “dealing with world leaders” (57%).  Obama leads Romney slightly 48% to 43% on the issue of who would do the best job of getting the economy going again.

Romney’s business experience with Bain Capital doesn’t seem to be helping him very much.  41% rate his experience as Governor of Massachusetts as more important and nearly half (49%) say the Bain experience DOES NOT make him better prepared than Obama to create jobs.  Nearly half (49%) say Obama has laid out a better vision for a successful economic future for the U.S.  Only 33% think Romney’s vision is better.

Slightly more than half (51%) in the Bloomberg poll said that agreed with the Obama/Democratic vision that the federal government should invest in infrastructure to create jobs).  Only 43% supported the Romney/Republican vision that the federal government should cut spending and lower taxes.

Read the full Bloomberg poll results here:

http://media.bloomberg.com/bb/avfile/rQyA68BW5P20

UPDATE: 2012 Election Forecast

Election Projection now has Romney carrying Ohio in addition to NC and FL giving him 253 electoral votes to 285 for Obama.  That puts Romney just 17 electoral votes short of the 270 he needs to win. 

Huffington Post Election Dashboard shows Obama with 269 to 191 for Romney with FL, NC, OH, WI, and Iowa all toss ups. They have Obama with a slight lead in VA.

Five Thirty Eight has Obama leading Romney 291 to 247.  They give VA and OH to Obama and NC and FL to Romney.

Chris Cillizza at the The Fix/Washington Post says Romney’s team is focused on six states as key to getting him to the magical 270 he needs to win.  These are: PA, WI, OH, MI, and IA.  Cillizza says Romney starts with 170.  Add in North Carolina, which we currently rate as a “toss up” but where nothing seems to be going right for the Obama team of late, and he is at 185. Add Florida, a state that still looks like a toss up but where Republicans are quite confident of their chances and he is at 214 electoral votes….Give Romney Ohio, Iowa and New Hampshire and he is at 240 electoral votes — still 30 shy of the mark.

The three remaining states — Michigan, Wisconsin and Pennsylvania — award 46 electoral …

Of the three, Wisconsin seems like Romney’s best chance as Bush came within .4 percent of winning the Badger State in 2004 and the recall victory of Gov. Scott Walker last month has emboldened conservatives nationwide.

Pennsylvania would be next on that list — although Democrats roll their eyes when Republicans talk about winning the Keystone State…

While Michigan is Romney’s home state — his father served as the governor — it is a very tough state for Republicans to win.

Running the table of these six states is very unlikely for Romney — and his people would almost certainly acknowledge that. But, if Romney can win Ohio, New Hampshire and Iowa and then maybe steal a Wisconsin, for example, it gives him more wiggle room in the other competitive states. Rather than needing to sweep the nine swing states — as we currently rank them — Romney could win Virginia and Nevada and crest 270. Or Colorado and Virginia.

Americans support SMALLER AND BIGGER government

Pew Research has released a new report on the opinions of Americans about the size of government.  It seems Americans want to make government SMALLER and BIGGER at the same time.

A majority of Americans today (52%) say they want a smaller government instead of a larger government that provides more services. 

When asked which government services they want to cut, the majority of Americans say NONE.  In fact, in many cases Americans want MORE government services, not less.

See what government services Americans say they would be willing to cut in the chart below or here:  http://www.people-press.org/2012/06/14/debt-and-deficit-a-public-opinion-dilemma/?src=rss_main

A referendum on political behavior

One thing is certain about the election this year.  It is a referendum on political behavior.  American voters have the opportunity to reward or punish members of Congress who have engaged in the most callous disregard for the welfare of the American people that I have witnessed in a lifetime of following politics.  Most of the members of Congress who have behaved badly and should suffer at the ballot box for their behavior are Republicans. 

Since it became evident that the 2008 financial crisis would be one of epic proportions and that our country was on the fast track to another Great Depression, almost everyone with even the most fundamental knowledge of how the U. S. economy works knew what we had to do.  I’m including here practically every member of Congress, Republican or Democrat, the President, the nation’s economists, former Presidents, and on and on.  Among other things, we needed a sizable stimulus to pump money in the economy as quickly as possible to stop the hemorrhaging of jobs.  We needed to first bail out the banks and financial institutions and then re-regulate the financial sector to prevent the kind of reckless speculation that got us into trouble.  We needed to use federal government spending to replace the demand for product and services in the private sector that had disappeared almost overnight.  We needed to help the states and local governments to avoid laying off public employees since the last thing we needed during a deep recession was to cut state and local services that large numbers of people would be forced to depend upon until the economy rebounded.  In short, we needed to use the power of the federal government to borrow to do what consumers and businesses were not doing and could not do, to spend and spend and spend.  Ideally, we needed to spend on infrastructure projects that would have a long-term payoff, provided we could get them up and running fast.  Everyone knew that such heavy short term investments would cause the deficit to explode.  Everyone knew that we would have to bring this new larger deficit down long-term.  We needed a plan for shared sacrifice that together with the revival of the economy would bring the deficit down to a sustainable 60% or so of GDP or less over a 10 or 20 year period.  It was clear we needed a two-part plan.  First, aggressive short-term (3 to 5 year) spending by the federal government to save public sector jobs and to create demand in the private sector that would give employers a reason to stop firing and start hiring.  Second, we needed to get our financial house in order by gradually reigning in spending and equally gradually return taxes to the levels of the 50s and 60s. 

As I said, everyone in both parties knew what we needed to do.  Obama and most of the Democrats tried.  They offered proposals time and again to do the things I just outlined that everyone knew we needed to do.  Democrats even agreed to find ways to reduce the cost of Social Security, Medicare, Medicaid and other social support programs they held dear provided the reductions could be done responsibly over time.  Republicans resisted, resisted and resisted.  Every time the Democrats and Obama thought they were close to a grand bargain that would allow the country to do what everyone knew needed to be done, the Republicans walked away.

It would have been one thing if the Republicans walked away because they just didn’t understand the seriousness of the problems the country was facing or they had evidence that what everyone believed we needed to do to get the economy moving again was wrong.  They had no such evidence.  By in large, Republicans blocked, delayed or reduced the effectiveness of the actions I outlined earlier for purely political reasons.  Republican strategists convinced most members of the Republican Party that the party’s best chance of winning back seats in Congress in 2010 and the Presidency in 2012 was to have unemployment high and the nation in economic turmoil.  Their goal was to prevent actions to make a bad economic situation better long enough so that they could blame the bad economy on Obama and the Democratic Party.  The results of the 2010 election convinced them that their strategy was effective.  They doubled down, going so far in 2011 as to actually put the credit worthiness of the United States at risk over an issue that should have been routine, raising the debt ceiling.

If American voters go to the polls this November and vote for Republicans, they will be sending a message to politicians in all parties that when you are out of power, refusing to compromise even when your refusal will hurt the country is good politics since American voters will blame the incumbent party for their troubles.  They will reward your bad behavior.

As I said, this election is a referendum on political behavior.  It is our choice.  We will pay huge price if we make the wrong choice.

What does yesterday’s Wisconsin election mean for our country?

As you probably know by now Wisconsin Republican Governor Scott Walker beat Democratic challenger Tom Barrett 53% to 46% in yesterday’s recall election.  The results were about the same as in 2010 when Barrett ran against Walker. 

There are many explanations being offered for why Walker was able to beat Barrett in what appeared to be shaping up to be a close election that would be decided by turnout.  Many think that a number of Wisconsin voters who would have voted for Barrett and/or voted for Obama in 2008, voted for Walker because they didn’t think that a recall election was the proper way to handle a dispute about policy rather than something more serious such a malfeasance in office.  Others say that Republicans this time were able to match the grassroots voter turnout efforts launched by unions and other Barrett supporters so the Democrats lost any turnout advantage.  Regardless, it is unclear what yesterday’s election has to say, if anything, about Obama’s chances of carrying Wisconsin in November, particularly since exit polls showed that many Walker voters said they intended to vote for Obama, not Romney.  Overall Obama led Romney in exit polls by 7 points, 51 percent to 44 percent.

So, the Wisconsin outcome might tell us a lot or nothing at all about November.  That is accepting for one thing.  Republicans spent a huge amount of money supporting Walker.  As you probably know, Scott Walker spent some $30 million to avoid being recalled versus just $4 million for his opponent Tom Barrett.  Most of Walker’s money came from large out-of-state donors.  Source Watch has listed the top five.

• Richard DeVos: DeVos of Holland, Michigan is the co-founder of Amway Corp. and owner of the Orlando Magic, DeVos runs the Richard and Helen DeVos Foundation, a conservative foundation and grant making body formed in 1970. DeVos has been active in the school voucher movement, and Walker expanded Milwaukee’s voucher program and established a similar one in eastern Racine County in Wisconsin's 2011-2012 budget. DeVos donated $250,000 to Walker's campaign. ^[35]
• Diane Hendricks: Hendricks of Beloit, Wisconsin is owner of ABC Supply, a supply company for contractors of all stripes. Hendricks garnered national attention in May 2012 after a tape was released that shows her asking Walker how he would turn Wisconsin into a "red" state and if he would implement "Right to Work" legislation. Walker responds telling her he would use "divide and conquer" as a strategy against unions, starting first with a "budget adjustment bill" applying to public workers. She gave Walker $500,000 on April 12, 2012 and $10,000 on January 31, 2011, making her his single biggest contributor. Hendricks has given money to Paul Ryan, Ron Johnson, Tommy Thompson and the Republican National Committee and is worth an estimated $2.8 billion. ^[36]
• Bob Perry: Perry of Houston, Texas, gave Walker $250,000 on December 4, 2011. Perry's wealth comes from the homebuilding company Perry Homes, but he is most famous for bankrolling the "Swift Boat Veterans for Truth," which funded a blistering ad campaign against John Kerry during the 2004 presidential race. He is a big donor to Texas Governor Rick Perry (no relation), and he gave an eye-popping $7 million Karl Rove's American Crossroads group, one of the largest single campaign contributions ever. ^[37]
• Jere Fabick: Fabrick of Milwaukee, Wisconsin is CEO of Fabco Equipment, Inc. Jere Fabick gave $250,000 to Walker in 2011 and 2012. In 2003, Fabick was fined for violations of Wisconsin's limit on political contributions for previous Republican Governor Scott McCallum. ^[38]
• David Humphreys: CEO of Tamko Building Products, Missouri's David Humphreys is an out-of-state donor who gave Walker a hefty $260,000 in January 2012. A month later Humphreys gave $250,000 to the Republican Governors Association which is running ads statewide supporting Walker and criticizing recall opponent Milwaukee Mayor Tom Barrett. ^[39][40]

Additionally, Walker was backed by huge independent expenditures from the Republican Governor's Association and the Koch-funded Americans for Prosperity Group. Americans For Prosperity has spent $2-3 million each on TV ads in support of Walker, while the ad spending by the Republican Governor's Association and their local PAC, Right Direction Wisconsin, has been estimated to be as high as $5 million two weeks before the recall. ^[45] 

Read the full Source Watch report on Walker’s backers here: http://www.sourcewatch.org/index.php?title=Scott_Walker#Billionaires_Fund_Walker.27s_Effort_to_Fight_the_Recall_with_.24250.2C000-.24500.2C000_Checks

One must assume that when one candidate can outspend his opponent 8 to 1, that spending must make some kind of difference.  Would the outcome yesterday have been the same if Walker had been able to raise just $4 million, like Barrett, not $30 million?  We expect deep-pocket Republican conservatives to spend with abandon this fall in order to defeat Obama.  Although, Obama has raised a lot of money himself, no one expects the Democrats to be able to match the Republicans when it comes to Republican Super Pac spending.

Are we about to see politics undergo a major change in America?  Will a few super rich individuals gain the power to dictate how our country will be governed and for whom?  Are we about to see a few super-rich people take over our country?  I hope not.  However, if you consider what happened yesterday in Wisconsin, you have to be concerned.

UPDATE: Wisconsin recall election today

Turn out in Milwaukee, Democrat Barrett's stronghold has been so high today that they had to send in extra poll workers to handle the volume. Also, we are seeing strong turnout in Dane County which may hit 80 to 88 percent. That's another Democratic base. On the other hand, there is heavy turnout in conservative districts also. This election will be close.  Barrett seemed to be gaining some momentum going into this weekend and had closed the gap to the margin of error in one poll.  Conservatives won the off year election in 2010 when Walker won the governorship because voting in Democratic districts was low compared to 2008 when Obama carried the state.  Looks like we are returning to 2008 levels or even higher.  That would be good news for Democrats.

Read more here:

http://www.salon.com/2012/06/05/wisconsin_turnout_high_but_high_enough/singleton/

Republicans in North Carolina seek to outlaw climate change

Common Dreams reports that Republican legislators in North Carolina are so concerned about scientific predictions concerning the rise of sea levels by 2100 due to climate change and how that might effect the value of real estate on the North Carolina coast that they are considering legislation TO OUTLAW THE RISE OF THE SEA LEVEL ON THE NORTH CAROLINA COAST due to climate change.

If the Republican dominated legislature votes as expected, scientists will be prohibited from factoring in the anticipated impact of climate change and the accelerating melting of the polar icecaps on Carolina's low-lying coastal communities. By legislative decree, the state's own researchers will be forced to base their predictions solely on historical climate data, rather than the acceleration of global warming that climatologists expect to occur in the coming decades.  Read more here: http://www.commondreams.org/view/2012/06/05

House Bill 819 establishing Costal Management Policies reads in part.

Section 2 (e): The Division of Coastal Management shall be the only State agency authorized to develop rates of sea-level rise and shall do so only at the request of the Commission. These 11 rates shall only be determined using historical data, and these data shall be limited to the time 12 period following the year 1900. Rates of sea-level rise may be extrapolated linearly to estimate 13 future rates of rise but shall not include scenarios of accelerated rates of sea-level rise. 14

Republican using dirty tricks in Wisconsin

Salon reports that Republicans in Wisconsin are using dirty tricks to win the recall election for Walker.

With both sides counting on dramatic turnout, [Democrat]Tom Barrett’s campaign is charging [Republican] Scott Walker supporters with dirty tricks. In an e-mail sent to supporters last night, Barrett for Wisconsin Finance Director Mary Urbina-McCarthy wrote, “Reports coming into our call center have confirmed that Walker’s allies just launched a massive wave of voter suppression calls to recall petition signers.” According to Urbina-McCarthy, the message of the calls was: “If you signed the recall petition, your job is done and you don’t need to vote on Tuesday.”

In spite of these calls, turnout appears to be high, perhaps surpassing the turnout for the presidential election in 2008,  and most analysts are projecting that should mean a close election.

Read more here: http://www.salon.com/2012/06/05/nasty_robo_calls_in_wisconsin/singleton/

NEW POLL: Partisan polarization surges

Republicans and Democrats are farther apart in the political values today than at any point in the last quarter century.  That’s the finding of the newest Pew Research Poll examining trends in American values.

The partisan gap (average percentage-point difference between Republicans and Democrats on 48 values questions) has increased from 10% in 1987 to 18% today.

Today fewer Americans identify themselves as Democrats or Republicans but those who do are more ideologically homogeneous.  In the Republican Party, self-described Conservatives outnumber moderates two-to-one.  The Democratic Party is much more diverse with just about as many liberal as moderate party members.

More Americans now call themselves Independents but many of the self-identified Independents have a definite leaning toward one party or the other and the gap between the political values of Independents who lean Democrat and Independents who lean Republican are as great as the gap between Republicans and Democrats.

The largest values gap is over the issue of the scope and role of the government in the economic realm and support for the social safety net.  Republicans are opposed to the government helping people in need and reject stricter laws and regulations to protect the environment.  Democrats largely favor the government helping the needy and regulations/laws to protect the environment.  The position of Democrats has changed little over since 1987 on social and environmental issues.  Republicans have become more hostile toward the social safety net and the environment than at any time since Pew has tracked these values.

Democrats are more secular and socially liberal.  Ninety-two percent of Republicans say the “never doubt the existence of God” compared to 77% of Democrats.  Eighty-eight percent of Republicans say they “have old-fashioned values about family and marriage” versus 60% of Democrats.  Fifty-two percent of Democrats say the country should “make every effort to improve the position of minorities, even if it means preferential treatment.”  Only 12% of Republicans agree.

Pew found that there were more self-identified Independents today than at any point in the last 75 years.  Today 38% of Americans say they are Independents.  Thirty-two percent say they are Democrats (down 4% from 20008) and 24% say they are Republicans (about the same as 2008 but down 6% from 2002). 

Today, 87% of Republicans are non-Hispanic whites (about the same as 2000) and their average age is 50.  Democrats are much more diverse demographically.  Fifty-five percent are non-Hispanic whites, most are women (59%) and they are slightly younger than Republicans (47.5 yrs vs. 49.7)

Read more here: http://www.people-press.org/2012/06/04/partisan-polarization-surges-in-bush-obama-years/

BREAKING NEWS: Wisconsin recall-Latest poll—Barrett closing

Public Policy Polling (PPP) has Walker with a three point lead over Tom Barrett (50-47) in its final poll prior to voting tomorrow in the Wisconsin Governor recall election.  That's just barely outside the 2.8% margin of error.  Barrett had a slight lead 48-46 over Walker among independent voters.  Walker leads among men, whites, seniors, and voters in the Milwaukee suburbs.  Barrett leads among women, minorities, young votes and those in Milwaukee county and greater Madison.  T

PPP says Walker is still the favorite to win but that Barrett’s prospects for an upset look better.  The race may completely come down to turnout.  Bad news is that Walker supporters seem to be more excited about voting.

An earlier poll by Angus Reid Public Opinion had Walker leading Barrett 53% to 47% with a margin of error of 4.3%.

http://www.publicpolicypolling.com/main/2012/06/walker-leads-by-3-points.html

Congratulations University of Georgia School of Public and International Affairs

The Attack Democrat congratulates the University of Georgia School of Public and International Affairs (SPIA) for being ranked the fourth best graduate school in the nation in public affairs in U.S News and World Report’s 2013 edition of America’s Best Graduate Schools.  The UGA School of Public and International Affairs includes the Department of Political Science from which the Attack Democrat received his Ph.D. a number of years ago. (No, the Attack Democrat will not reveal how long.)  The only schools in the country ranked higher that SPIA were Harvard (no. 3), Indiana (No. 2) and Syracuse (No. 1).

Way to go UGA!!!

The truth about the BLS jobs report

There are a few things to keep in mind as you read the Bureau of Labor Statistics (BLS) job numbers each month and listen to the news reports about what these numbers mean:

1. You will hear a lot about the month-to-month net job creation which BLS says was 69,000 from April to May.  Don’t give too much emphasis on any single month.  The important thing is the TREND over time.  The following charts from the BLS report provide some perspective.  See the charts here or below: http://www.bls.gov/news.release/pdf/empsit.pdf

In Chart 1 you can see that the unemployment rate has been trending down since about October in 2010.  That’s the good news.  However, in Chart 2, you can see that even though we have been adding jobs since then during last year and this year the early months of the year have been better than the summer months.  We may be seeing the same pattern. 

2.  Recognize that the BLS numbers are ESTIMATES based upon a sample of establishments and a household survey.  Consequently, we have to consider the sampling error which BLS says is +/- 105,000 jobs.  That means that the actual jobs created in May could have been as low as a NET LOSS of 36,000 to a NET GAIN of 138,000.  This sizable sampling error is another reason NOT to pay too much attention to month-to-month changes particularly if they are LESS than 100,000 jobs.

3.  The sampling error for categories of employment (heath care, manufacturing, etc.) or worker (adult men, adult women, Blacks, etc.) are EVEN GREATER than the sampling error for the entire report.  Here again, trends matter more than individual month-to-month changes particularly if these changes are not substantial.

4.  Recognize that BLS makes adjustments to the numbers to correct for inaccuracies in the sampling and for other reasons.  The intention is to make the estimates more accurate but there is a lot of debate about whether that is the case.  For example, BLS uses a birth/death adjustment to account for business start-ups and closures.  See here: http://www.bls.gov/web/empsit/cesbd.htm  That model was changed in 2008, after the recession hit and some people claim that the 2008 changes cause the BLS estimates to be UNDER estimating new job creation. 

5.  Pay attention to other estimates of unemployment out there.  For example ADP provides an estimate for the non-farm private business sector each month which usually comes out just before the BLS report.  ADP said 133,000 were created in May, considerably more than BLS estimated.  Steven Hansen at Global Economic Intersection endorses the ADP method over the BLS result. He says ADP is a better estimate.  See: http://econintersect.com/wordpress/?p=22511.  Over time the trends shown by the  ADP and BLS estimates tend to similar but there can be a lot of month-to-month variation.  Also, Trim Tabs provides an estimate of job creation based upon an analysis of daily income tax deposits to the U.S. Treasury from all salaried U.S. employees which it says is historically more accurate than initial estimates from the BLS.  Trim Tabs estimated that 124,000 jobs were created in May, considerably higher than the BLS estimate.

BOTTOM LINE: When it comes to understanding what is happening in the jobs market focus on trends and take a look at multiple estimates. And, learn to live with uncertainty and imperfection in the jobs numbers. 

May Jobs Report—What it means

The Bureau of Labor Statistics said today that the country added only 69,000 jobs in May (compared to an average gain of 226,000 per month during the first quarter) and the unemployment rate ticked back up to 8.2% from 8.1% due to an increase in the number of people looking for work.  The latter had been expected.  People who give up looking for work and drop out of the labor force usually return once the job market appears to be improving.

Employment increased in health care, transportation and warehousing, and wholesale trade but declined in construction.  Other areas remained largely unchanged.

Unemployment among adult men (7.8%) and adult women (7.4%) were up slightly for April.  Unemployment among teenagers (24.6%), Blacks (13.6%) and Hispanics (11%) remained high as did the number of long-term unemployed which rose from 5.11 to 5.4 million.  The long-term unemployed (over 26 weeks) now account for more than 40% of the unemployed.

The good news is that the private sector continues to add jobs but not at a rate sufficient to make much difference in the unemployment rate.  Also, the state and local government continue to lay off workers making the jobs recovery even more difficult.

This recession appears to be following the pattern of the last two recessions.  Traditionally during a recession we would see a “V” shape sharp decline followed by an equally sharp recovery once the recession ended.  In this recession like the last two in the early 1900s and early 2000s, has followed more of a “check mark” shape with a sharp decline followed by a gradual recovery.

Several things seem to be causing the slow recovery.  First, the impact of the 2009 stimulus is now almost entirely gone and we are seeing the consequences of not enacting a second stimulus to aid the recovery which most mainstream economists had urged.  Second, during this recession businesses have been able to introduce a substantial amount of new technology and to demand more from existing workers.  As a result, we have seen sharp productivity gains.  Demand has not returned to a level in many industries where businesses are forced to hire more people.  In fact, the average workweek in May for all employees actually DECLINED slightly to 34.4 hours.  We are not going to see major improvement in jobs until the average workweek starts climbing again.  That will not happen until demand improves.  Again, it is why we have needed a second stimulus to pump more demand into the economy.  Ironically, the U.S. government continues to be able to borrow at extremely low interest rates which would have made it relatively easy to fund a second stimulus (10-year Treasury notes hit a record low of 1.54 percent on Thursday).  Finally, the economic situation in Europe is not helping.  Businesses with European operations are seeing their revenues/sales fall and are nervous about the future.  Indeed, the deteriorating situation in Europe, particularly in regard to Greece, Spain and Italy, which is a product of an over reliance on austerity rather than stimulus and growth measures, threatens the U.S. recovery.

Obviously, the sluggish jobs recovery is bad news for Obama and good news for Romney but it is too early to say how great an impact it will have on Obama’s chances for re-election.  Right now the race is tight in the popular vote but Obama retains a substantial lead in the Electoral College vote, which is what really counts.  I don’t think we will have any clear indication of how this election will turn out until after Labor Day and perhaps not until the end of September.  If the jobs picture remains close to 8% and, particularly if the trend is flat or not improving, then Obama may be in real trouble.  Unfortunately, the only thing Obama could do to change the situation would be to pass another quick stimulus which is not remotely possible. 

See the full BLS report here:  http://www.bls.gov/news.release/empsit.nr0.htm