Path to a third-party

Conor Friedersdorf will not vote for Obama or Romney.  He instead argues that voting for a third-party candidate is what a moral, conscientious, and informed American should do.  I do not agree.

For the sake of argument, let's assume that the implausible happens November 6th and someone like Gary Johnson or Jill Stein gets elected.  They must immediately form a transition team and start selecting viable Cabinet nominees.  Who would they pick?  Would there be any potential picks who have experience at a national level, the competency to run entire departments, and the credibility both home and abroad?  Before they even get there, are there even staffers prepared to man a transition team?

Again, let's assume there are credible, competent people who align with this independent candidate, they are selected and now must go before Congress to be approved.  Obama, with a near super-majority, had immense difficulty getting his nominations approved and for much of his first term was lacking a fully-staffed Cabinet.  Now, facing two opposition parties, how will the approval process proceed?  Any of Stein's appointees are nearly guaranteed to be far too liberal for Republicans and even a third of Congressional Democrats.  Johnson would have to either sacrifice his social (to appease Republicans) or economic (to appease Democrats) stances to get anyone appointed.  Or they would have to select from the majority party's Cabinet candidates and have an entire Cabinet that does not line up behind the President.

Once more, let's assume the third-party President (TPP) somehow gets a full Cabinet that is aligned with their beliefs and campaign promises.  The Inauguration is now over and it's time to get to work.  TPP sends his first proposed bill to Congress and... Congress (no Independents in the House; one Independent in the Senate [two if King wins in Maine, which he is projected to]) flatly rejects it and writes their own legislation.  The normal gridlock occurs between Democrats and Republicans and FINALLY one bill out of 100 make it to the Independent President who... vetoes it.  Lacking the two-thirds vote to overturn, no bills are passed for four years...  Or the TPP signs the bill he does not agree with, and his Independent status means nothing, legislatively.

Obviously, it depends on who the TPP is and what stances they hold, but with the current gridlock between two parties, the gridlock would only be worse with a third party introduced.

A viable third party must start with local/state elections.  To borrow a concept from video games, a third party has to "level up" enough and recruit a big enough party to take on the final boss of the Presidency.  As third-party Senators and Representatives are elected, their staffers and advisers get more experience, and potential Cabinet appointees are created and incubated.  A coalition of like-minded Congresspeople are in place to create and pass the TPP's bills.  This also eases the two current parties into slowly relinquishing power and opening them up to compromises to get anything done.

This post is more conjecture than I typically like to do, but I really can't be optimistic about a third-party candidate when the two-party system is already so dysfunctional.  Even if they were to start winning seats in Congress this year, a third-party is very far away from creating a competent Presidential administration.

Gates and Mullen are wrong

Gordon Adams smacks down Gates' and Mullen's wrong-headed take on defense cuts.

Additionally:

Admiral Mullen said: "Already, the president has reduced the fiscal year '13 defense budget by almost a half a trillion dollars." He clearly meant to say the 10-year defense plan, but, in reality, there was no cut in that plan, at all. The "budget" he talks about was the Pentagon's own 10-year wish list, provided last year, laying out the funds it hoped to receive over the next decade. The wish list included a lot of projected real growth (that is, growth beyond inflation). Then, fiscal reality hit, and the budget the president sent up to Congress this year presented a different wish list for the decade, one that was a cumulative $487 billion lower than last year's.

What Mullen did not say is that this new 10-year projection still hoped for growth in defense funds, but only to keep up with inflation. By any budget analyst's definition, this is not a "cut." It is a more realistic projection. But it is still a "wish list," because the chances are there will be real cuts -- that is, less funding than in the previous year for several years to come. But reporters, politicians, and the admiral go right on spreading the notion that the defense budget has already been, somehow, "cut."

This kind of budget math is disgusting and so widespread.  It is impossible to believe politicians who claim they will cut the deficit or balance the budget, when tricks like the above, public debt vs. intra-governmental debt (which allowed Clinton to claim surpluses), and baseline calculations are used to mislead and support any number of claims.

Citizens United Amendment: Reason 1

I am seething right now.

After the subpoena of 30,000 pages of internal documents and interrogations of many Obama administration officials, the GOP found NOTHING corrupt, unfair, or even remotely below-board.  But the truth of their claims never mattered, anyway.  They have bought-in wholesale to the scorched-earth, nothing-is-sacred-not-even-policies-that-we-have-supported-or-even-been-huge-proponents-of-in-the-past, must-get-back-into-power-so-we-can-make-even-more-money-from-our-oil-and-defense-campaign-contributors-by-raping-the-earth-and-the-American-people-and-especially-those-terrorist-loving-Christian-hating-Muslim-Middle-Eastern-pits-of-scum-and-villainy tactics which have been remarkably effective, which is a sad statement on American education, ignorance, and psychology.

Solyndra had a ground-breaking approach to solar energy which attracted over a billion dollars in investments from people like the Walton family, Richard Branson, and George Kaiser.  They already had a large client-base and had other contracts lined up.  Unfortunately, they fell prey to a huge drop in traditional solar panel prices as China dumped $30 billion into solar panels.  The drop in price led Solyndra's product to be too expensive to be viable, leading it to bankruptcy.  I'm confident that their technology will find its way onto the market again within the next five years, and may even replace today's flat panels within the decade.  On top of that, the Bush administration queued up the loan to Solyndra and just never finished the paperwork and filing procedures before he left office.  If there was any "crony capitalism" involved, it would have stemmed from the Bush administration.

"Three failed companies is more than enough reason to declare DOE's loan guarantee program a failure and end it," said Energy and Power Subcommittee Chairman Ed Whitfield (R-Ky).

This completely misses the point of the loan guarantee program.  If the DOE-chosen programs were safe, private investors would have already funded them without the need for guarantees.  The loan guarantee program has $10 billion set aside, specifically to account for companies that fail.  If all the loans were successful, then that $10 billion goes right back into the government to be used elsewhere (and most likely heralded as a spending cut...).  Secretary Chu has stated that even if only a few of these loans are successful, they could still result in more than a million new jobs.  Republicans want to "create wealth" and "create growth;" well, this loan guarantee program is exactly how that is done by the federal government.

The real reason for this bill: Fred Upton's main contributors are oil companies as are Ed Whitfield's.

Etch-A-Sketch

Ezra Klein points out a few ways in which Romney is continually stepping on his own message.  It is common for this man to pander to whatever audience he is speaking to, but he should really stick to one stance on the theme the RNC was built around ("We Built It") and the actions that Romney found so outrageous and appalling that he couldn't wait until the events were over and the facts were out to address.

Oil prices

How many times do gas prices have to rise due to Mideast tensions before we get serious about oil independence?  The Recovery Act dumped a lot of money into renewable energy, but would a Republican administration continue to fund these developments?

Demand-based recession, quantitative easing, and income inequality

Jared Bernstein has got my back.  His article discusses what I hit upon yesterday about lack of demand being a huge stalling factor for recovery.

It also causes me to be more pessimistic that the Fed's quantitative easing actions will work.  As I commented on Aegis of Cognition's post yesterday, the Fed's action will at least take a contingency plan out of Congress's back pocket and force their hand if they really wish to increase jobs or avoid sequestration.

The income inequality problem in America must be addressed to avoid similar recessions in the future.  As productivity has increased, the majority of profits have gone to the company executives, while the laborers have seen very little growth in wages; in many places, barely keeping pace with inflation.  This is another case of short-term profit-seekers shooting themselves in the foot.  In order to keep demand up for your and others' products, the laborers must share greatly in the profit growth, as they are the main engine for demand.  Productivity can increase by 100% every day, but if the demand does not increase at the same rate, the productivity gains have been wasted.  Unfortunately, the executives have yet to feel this pain, as they are benefiting from demand overseas.

In an ideal situation, these companies would stop chasing demand for short-term profits, and broaden the demand pool.  By keeping more jobs in America, increasing their wages, and continuing to sell to foreign markets, they would have a larger, more stable base of customers.

Ryan's cuts

If Romney were to get elected and adopt Ryan's budget plan, a double-dip recession would be almost guaranteed.  As the UK is proving, a premature return to austerity measures is far worse than a bigger deficit.  Even without the threat of double-dip, Ryan's cuts would be disastrous to the people who are already struggling most.

It is important to understand that a lack of demand has led to the sluggish recovery in order to truly grasp how short-sighted and destructive these cuts would be.

$134 billion in cuts to food stamps:  Food stamps are, in most studies, the most stimulative spending the government can do.  The money from food stamps goes to people who will spend the money immediately on essential goods (unless Paul Ryan would like to argue that food is a luxury).  The money from these goods then goes to the people who transported, packaged, made, and grew the food, which allows them to then go buy more products which goes to... do I really need to explain this?  Apparently, Ryan needs someone to explain this to him.  Supply-side economics does not work if there is no demand.  The main principle of capitalism is supply and demand, and when they are out of balance, no amount of increased supply will fix this.

$2.4 trillion in health care and Medicaid reductions:  Some research needs to be done to see if this would actually result in any significant savings.  If these people are taken off of health insurance, they will still go to the emergency room for care, for which the taxpayers will still have to pay, which results in higher premiums, which leads to more people not being to afford insurance and becoming uninsured, leading to even higher premiums.  There are a lot of savings to be had in healthcare; cutting coverage should not be among them.

$754 billion in unnamed mandatory and discretionary spending:  It is hard to assess these as they have not named specific cuts to be made.  Cuts to function 500 (education, training, employment, and social services portion of the budget) and Pell Grants would greatly decrease the likelihood of low-income Americans to find good jobs, squashing any hope of upward mobility.  Again, these programs are aimed at people who would immediately spend most of the money they receive on necessities, increasing demand and boosting economic growth.

There are surely cuts to these programs that could be made to decrease waste, fraud, and unnecessary spending, which could result in cheaper, more effective, and perhaps better quality of assistance.  However, these kinds of savings should start in areas which provide less stimulative effects and are skewed towards people who can afford to cut back.

To underscore all of this, Ryan wants to increase defense spending by $200 billion.  What could possibly be the reason for that increase in spending?  Not even counting the expenses of the Iraq and Afghanistan wars (which somehow have always remained off the budget) and after cuts have already been made by both Defense Secretaries Gates and Panetta, the defense budget is higher in constant 2012 dollars than it was during the height of the Cold War buildup under Reagan.  What possible threats do we foresee that can compete with the Soviet Union threat?

A defense official under Reagan agrees.  A defense director under Bush and policy advisor for McCain's 2008 campaign also agrees.

Better Off?

Jared Bernstein linked to these (1) three (2) articles (3) on the question of "are we better off than we were four years ago."

I love the analogy of the firefighters in article 1 and the roasting of modern "journalism."

It's striking to see how short Americans' memories were even before the 24-hour news cycle as seen in article 3.  Also, I predict a parallel trajectory to Reagan's presidency if Romney wins or Obama caves to the austerity pressure.  Prematurely withdrawing public funds will send us into another minor recession after pulling out of the '08 recession.  If Romney is President and is as ideological as he presents himself, though, the recession may last longer as Reagan famously indulged in huge deficit spending, which is surely the cause of the boom in job growth.

The amount of money lost in household wealth is shocking (chart in article 2).  I didn't realize it had dropped that much.

UPDATE:  Austerity measures like these proposed by the Republican VP pick.  I will likely revisit this article in a blog post tomorrow.  There is much to say about the proposed cuts.

Ryan still fails arithmetic

Paul Ryan on This Week:

But here's the point I am trying to make here, George. We think the secret to economic growth is lower tax rates for families and successful small businesses by plugging loopholes.

Now the question is, not necessarily what loopholes go, but who gets them. High-income earners use most of the loopholes. That means they can shelter their income from taxation. But if you take those loopholes, those tax shelters away from high-income earners, more of their income is subject to taxation. And that allows us to lower tax rates on everybody -- small businesses, families, economic growth.

How can Congressional Republicans support this plan when it is not possible without ending in an increase on the much-vaunted "job creators?"  As the loopholes are closed, the effective tax rate on high-income earners will rise.  In order to pay for tax cuts for "families and small businesses," the effective tax rate on high-income earners MUST be higher than the current rate because the money being used to cut the lower-income earners' taxes is coming from the tax loopholes that high-income earners now enjoy.

Isn't that an egregious affront to Congressional Republicans who swear that raising taxes on job creators will cause them to stop hiring?