Monday, November 26, 2012

WEST VIRGINIA AND THE FISCAL CLIFF (Pub Date 12/1/12)

This is a rare and happy occasion when West Virginia’s status as an economic outlier may allow the state to walk between the raindrops as President Obama and congress assemble a package of tax increases and budget cuts that will save the nation from the “fiscal cliff”.

The problem is well known. If the president and congress fail to reach an agreement by January, $7 trillion in tax increases and budget cuts will be triggered, which, according the Congressional Budget Office, will send that nation back into recession, throwing millions out of work as extended unemployment benefits come to an end.

Republicans and Democrats agree this scenario is disastrous and also agree that it can be avoided by adopting a budget and tax plan that reduces the federal deficit by $4 trillion over the next decade. But, they have very different ideas about how deficit reduction should be achieved. Still, if they get it right, West Virginia could emerge almost unscathed by either tax increases or budget cuts.

The current flashpoint is President Obama’s proposal to allow Bush-era tax cuts for households making more than $250,000 a year to lapse, returning rates to 1990’s levels. This would reduce the deficit by $968 billion over a decade. An additional $593 billion would be recovered by limiting the amount of money people in the upper two tax brackets can claim as deductions.

Republicans generally oppose this approach. But, a few Republicans, including senators Lindsey Graham of South Carolina and Saxby Chambliss of Georgia, while loathe to raise tax rates, will consider a cap on deductions. A $50,000 cap would reduce the deficit by $760 billion and a $25,000 cap would reduce it by $1.3 trillion.

Happily, either approach would have little effect on West Virginia. Because only 1.4% of West Virginia taxpayers make more than $250,000 per year and even fewer claim more than $50,000 in deductions, losses to the state’s economy and taxpayers would be small.

Then, if some combination of those measures is combined with $1.7 trillion of savings already enacted by the president and congress in in 2011, only another $700 billion in savings is required to start reducing the nation’s debt as a percent of gross domestic product (GDP).

From West Virginia’s perspective and the nation’s as a whole, the best ways to capture that amount would be to enact Republican Senator Tom Coburn’s plan to cut duplicative Pentagon spending and to allow Medicare to negotiate prices for prescription drug, which would save $200 billion. As with the tax increases, these measures would have almost no impact on West Virginia’s economy.

Unfortunately, Republicans and some Democrats are in thrall to the drug industry and the pentagon and will never support these steps, which brings us to alternative measures that West Virginia and the nation should fear.

There will be immense pressure on the president and congress to increase the eligibility age for Social Security retirement benefits. The retirement age is already scheduled to go from 65 to 67 by 2022 and many would like to raise it to 70.

But, there are two problems. First, at a time when young people desperately need jobs, increasing the retirement age will cause older workers hang on longer, reducing the number of job openings. Second, increasing the retirement age is ferociously regressive and will reduce West Virginia incomes and exacerbate income inequality everywhere.

The life spans of poor people, of which West Virginia has many, are so short that many never qualify for Social Security benefits or receive little before they die. Average life expectancy for men in McDowell County is only 66 years. Meanwhile, men in wealthier places such as Westchester County, New York and Collier County, Florida live into their 80’s. So, a Social Security retirement age of 70 means that many men in McDowell will work until they die while the Social Security contributions they make over a lifetime subsidize the retirements of wealthier contemporaries.

In that way, income inequality will worsen. Similarly, proposals to cut food stamps and Medicaid benefits will also increase inequality while reducing retail demand and draining significant amounts of money from West Virginia’s economy.

Besides, as economic policy, these measures are more cosmetic than effective. As economist Paul Krugman and others point out, the United States doesn’t have an “entitlements crisis”. We have a “healthcare cost crisis”. Fix the latter and the former goes away. Don’t fix the latter and nothing can be done to fix the former.

The other proposed and dreaded solution to the financial crisis is the imposition of arbitrary caps on the size of the federal government relative to GDP. This is a favorite prescription of those who believe, against all factual evidence, that economic growth can only be achieved if the size of government shrinks. If that belief is codified in a way that limits the social safety net and the government’s ability to respond to economic downturns and crises, we’ll find ourselves repeating the mistakes of the early 1930’s when, in the aftermath of the stock market crash, we enacted policies that further contracted the economy and ultimately deepened and lengthened the worst economic crisis in the nation’s history.

The bottom line is that there is a way to deficit reduction that’s good for the economy, the nation, and West Virginia. The hope is that our political leaders will have the wisdom to take it.

Sean O’Leary can be reached at seanoleary@citlink.net or at his blog, the-state-of-my-state.com.

Monday, November 19, 2012

WEST VIRGINIA'S SCHOOL OF FARCE (Pub Date TBD)

“Farce is tragedy played at a thousand revolutions per minute.” John Mortimer

It’s tempting to treat the recent firing of West Virginia superintendent of schools, Dr. Jorea Marple, as farce because that’s the form the characters and events seem to demand.

First, there is Board of Education president, Wade Linger, whose inept ouster of Marple violated nearly every principle of sound management.

You know you’ve failed as a leader when you end up looking worse than the person you fired. That’s the spot in which Linger put himself and the Board because, whether Dr. Marple deserved to be fired or not, Linger provided neither warning nor reasons before taking action and his embarrassing inability or unwillingness to do so since makes the episode reek of backroom dealing and cronyism.

In ramrodding through of Marple’s dismissal, Linger blatantly ignored the state’s open meeting law as well as assorted personnel due process requirements and even failed to notify at least two other Board members of his intention to raise the issue. Then Linger burnished his reputation for arrogance by reminding those who dared question his actions that the superintendent serves at the pleasure of the Board. Otherwise, he offered only a few content-free platitudes about the need for a "new direction" before asserting that the board’s priorities are to “build mutual trust”, “commit to change and transparency”, and “improve communication”.

I’d give my right arm to know how the AP reporter who recorded those comments managed to keep a straight face.

Linger and his allies on the Board have succeeded only in plunging the state into crisis and opening the way for assorted lawsuits. They’ve also reminded us why our ineffectual Governor Earl Ray Tomblin always uses his middle name. Otherwise people might assume his middle initial stands for “ridiculous”, which is how he appears after allowing days to go by without comment except for a prepared statement in which he feebly thanked Dr. Marple for her service, but said nothing about her firing.

By comparison, Virginia’s governor, Bob McDonnell, was faced with a similar crisis earlier this year after the University of Virginia Board of Governors attempted to carry out a similar hit job on the president of that university. Faced with an uproar not unlike the one building in West Virginia, McDonnell threatened to fire the entire Board unless they resolved the issue while demanding, “Regardless of your decision, I expect you to make a clear, detailed and unified statement on the future leadership of the university.”

“A clear, detailed and unified statement” is precisely what West Virginia’s Board of Education has not given citizens of the state and, one suspects, cannot.

But Linger’s ineptitude; Tomblin’s ineffectuality; the tears we are told that Dr. Marple shed over her firing; the rumored political intrigues of former governor, Joe Manchin, who appointed the board members who voted for Marple’s dismissal, and those of his wife, Gayle, who sits on the Board are just “Happenings in Hooterville”, the ongoing soap opera that is our state capital. What we need to focus on are the kids and deciding what we need to do to improve upon West Virginia’s standing as the least educated state in the nation.

At present there is no public discussion of these issues by the governor or members of the Board of Education. In fact, as he tries to ram through the appointment as state superintendent of Randolph County schools superintendent, James Phares, Board President Linger is working assiduously to ensure there is no discussion or debate lest it derail the appointment of a cipher whose views on educational policy are generally unknown.

Meanwhile, when asked about educational policy, the governor and others in state government point to the now almost legendary Educational Audit. But that document, whatever its merits, is about making schools more cost effective and not much about how to improve education. While saying a great deal about administration and expense management, the audit contains not a word about curriculum, teaching methods, early childhood preparedness – all issues that West Virginia desperately needs to address.

Remarkably, as of this writing the governor and the Board of Education still have it within their power to snatch victory from the jaws of defeat. They can respond to the current fiasco by temporarily reinstating Dr. Marple, if she is willing, and by conducting a public review of her performance in which any criticisms or concerns that Board members have, as well as Dr. Marple’s replies, are put on the table to be considered by all West Virginians. At the same time, other candidates for the job should be invited to submit credentials as well as their visions for education in West Virginia. These should also be shared publically. Such a process would allow West Virginia to initiate a much-needed public discussion and even salvage a shred of dignity.

Ironically, last year, when the Board conducted its most recent superintendent search from which Dr. Marple emerged as the unanimous selection, Board president Linger expressed dismay that there weren’t more applicants from around the nation and he openly wondered why. He needn’t have looked any farther than the mirror for an answer. After witnessing Linger’s banana republic-like leadership of the Board, few qualified candidates are likely to apply for the opportunity to labor under the whimsical ways of West Virginia politics. But, what’s done is done and we must muddle through as best we can.

Sean O’Leary can be reached at seanoleary@citlink.net or at his blog the-state-of-my-state.com.




LINCOLN -- A PENNY FOR THEIR THOUGHTS by Christine Miller Ford

My earlier post on Abraham Lincoln was written in response to a request from Christine Miller Ford of The Spirit of Jefferson, a weekly newspaper in West Virginia's Eastern Panhandle. Christine gathered the thoughts of a variety of people about our continuing fascination with Abraham Lincoln. Here is the complete collection as it appears in a post by Dave Tabler in his Appalachian History blog.

Monday, November 12, 2012

WEST VIRGINIA'S MICK JAGGER MOMENT (Pub Date 11/17/2012)

In 2004 Thomas Frank published, “What’s The Matter With Kansas?” in which he asked why voters in that once progressive state had become deeply wedded to Republicans. What particularly intrigued Frank was that Kansas’s electorate enthusiastically supported Republican economic policies, which provided benefits for the very wealthy, but did little for the residents of that largely middle class state.

In other words, Kansans seemed to vote against their economic self-interest. This stemmed, Frank speculated, partly from an affinity with Republicans on social issues, but more than that from ignorance.

That’s a loaded charge since voters in other states also apparently vote against economic self-interest. Wealthy people in high-income states such as Connecticut, Maryland, and New York gave President Obama majorities in the recent election even though his proposal to increase taxes on those making more than $250,000 a year will take money from them.

Of course, their abandonment of self-interest, if noticed at all, isn’t portrayed as stemming from ignorance, but rather as a sort of enlightened sense of the collective good, which lends their behavior a satisfying if not necessarily justified air of noble self-sacrifice.

But, other states’ disregard for self-interest is mild compared to West Virginia’s. In the recent election we gave Mitt Romney his fifth largest majority among the twenty four states he won even though enactment of his economic plan would drain $1.6 billion annually from West Virginia’s economy – enough to plunge the state into recession.

As a result, we’re now in a Mick Jagger moment. The election may not have given us what we wanted, but what we need. Now, will we seize the opportunities?

West Virginia’s first bit of good fortune is the opportunity to fully expand Medicaid under Obamacare. Morally, from a healthcare perspective, and, importantly, from an economic and budgetary perspective, the reasons for doing so are overwhelming.

Full expansion will insure about half of West Virginia’s 270,000 uninsured residents whose life expectancy is nearly a decade below the national average. At the same time, expansion will trigger $3.7 billion in federal funds over the program’s first six years according to Renate Poor of the West Virginia Center on Budget and Policy. The vast majority of that money will go to West Virginia healthcare providers giving the state’s economy a jolt that will likely generate as much or more money in incremental tax receipts for state government as it will cost in expenditures.

Even without that offset, the state will spend nothing in the first three years. Then, in the out years, the incremental cost will never amount to more than 1% of the budget.

Another opportunity to improve West Virginia’s economic prospects can be seized if our representatives in congress accept compromise and help the nation avoid plunging from the “fiscal cliff”.

Shelley Moore Capito and David McKinley are signatories to Grover Norquist’s Taxpayer Protection Pledge that obligates them to oppose any increase in marginal income tax rates as well as any loss of deductions unless the loss is offset by additional rate cuts.

A year ago their unwillingness to compromise together with that of fellow House Republicans prevented a solution to the budget crisis and led to the creation of the fiscal cliff. This year’s election, in which the president campaigned on a mixed policy of budget cuts and tax increases for the very wealthy and decisively beat the Republican nominee, should be a signal to Capito and McKinley that compromise is both good for the nation and desired by Americans.

Besides, any negative consequences from the tax increases would have little impact on West Virginians very few of whom make enough money to be affected.

Still, some House Republicans will argue that their constituents elected them to oppose all taxes. They should also realize that Democrats won more than the presidential election. Democrats added to their majority in the Senate. And the Republican majority in the House of Representatives is a product, not of the will of the people, but rather, of the way in which congressional districts are drawn. Democratic candidates for the House actually received more votes than did Republicans.

The final opportunity and probably the most difficult for West Virginians to embrace is the need to take this, our last, best chance, to prepare for the decline of the coal industry. Thanks to market forces, coal wasn’t going to come back even if Romney won and it’s not going to now. So, maybe, finally, West Virginia’s leaders will find the courage to deal with the social, economic, and budgetary consequences of that reality.

Seizing any of these opportunities will be difficult for West Virginia because attitudes here are going in the opposite direction of those in the nation as a whole. America is becoming more diverse and progressive while West Virginia is becoming less so. But, it will be tragic for the state economically and otherwise if, because of that trend and for ideological reasons, we fail to act on the opportunities available to us.

Because Fox News and assorted conservative voices assured us of a Romney landslide and derided as creatures of liberal media bias commentators and polls that said otherwise, many people were astonished by Barack Obama’s victory. Now it’s apparent to everyone where the bias really existed and, with that recognition, maybe West Virginians can begin to deal with the world not as we wish it and not as we fear it, but as it is.

Friday, November 9, 2012

THE FASCINATING ABRAHAM LINCOLN

(Yesterday I was asked for my thoughts on why Abraham Lincoln still fascinates us. This was my reply)

I think Lincoln fascinates us as a president because he saved the United States and with it the promise of everything the founding fathers hoped for, everything this nation has become, and everything it might yet be.

But, I think he fascinates us even more as a human being. He, like you and I, had principles in which he believed, principles he articulated in order to be elected president. But, his principles were tested by as great a catastrophe as one person has ever faced -- a conflict that resulted in the deaths of hundreds of thousands.

It would be nice to say that through it all Lincoln adhered to his principles and that’s why he’s a hero today. But, that’s not what happened. He didn’t adhere to his principles. He couldn’t, at least not in the na├»ve form in which he imagined them before being elected president.

Lincoln was confronted by a situation so monstrous and complex that it constantly pitted treasured principles against one another forcing him to question them, to refine them, to choose between them, and occasionally sacrifice some of them.

By the standards of the day Lincoln was a dove, but he prosecuted the most destructive war in this nation’s history. He wasn’t an abolitionist, but he abolished slavery. He was a profound believer in republican democracy, but at times he assumed nearly dictatorial powers.

And despite all the painful compromises he had to make, Lincoln never tried to escape responsibility by taking either of the two backdoors through which many of us run. He didn’t take shelter in dogma. He believed in God, but he knew his choices and the responsibility for the consequences were his alone.

And Lincoln never gave in to expediency. He might have been forced to sacrifice lesser principles in order to protect the most precious. But, he held on to those tightly.

In the end, I think Lincoln fascinates us because he reminds us that living is damned hard and too complex to allow all of our choices to be guided entirely by a few simple rules handed down in books, by our religion, or even by our parents. Eventually, we all face choices for which we cannot know what’s best. And, at times like that, Lincoln’s example is a comfort because it reminds us that, despite our inadequacy, we can still act conscientiously and even nobly.

Wednesday, November 7, 2012

VISUALISING OBAMA'S MAJORITY

This cartogram from the University of Michigan adjusts the nation's map for population density vividly illustrating how Obama built a 2.8 million vote majority while losing most of the south and great plains.



Friday, November 2, 2012

"CLAUDIE HUKILL" OPENS 11/29 AT VENUS THEATRE PLAY SHACK


On Wednesday night I attended the first rehearsal of Venus Theatre's upcoming production of CLAUDIE HUKILL. The cast is fabulous. The production opens November 29 and runs through December 23 at the Playshack in Laurel, MD, just off I-95 between Washington and Baltimore. Tickets can be purchased online at Venustheatre.org.


Venus Theatre, under the artistic direction (and all other forms of direction) of Deb Randall is a Helen Hayes Awards Recommended theatre that's as innovative in producing original scripts as it is intimate.

Please, please try to come . . . and invite your friends. You'll have a great time. Promise.