Normative Narratives

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America’s Choice: Winner-Take-All or Social Democracy

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Here are three things to consider regarding taxes in America:

  1. Marginal Income Tax Rates


    10% for those making > $10,000
    20% for those making $10,000-$100,000
    30% for those making > $100,000


















  3. Adequately Fund and Reprioritize the IRS












Jobs and the “Green New Deal”





ev investments by country

Credit: Reuters





America’s Choice: Social Democracy vs. Unbridled Capitalism






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Bipartisanship and the 2018 Midterm Elections

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Ode to John McCain

I did not always agree with the late Senator John McCain on public policy, the most recent defense spending bill bearing his name being a case in point.

His integrity, however, should never be questioned. His willingness during his 2008 Presidential campaign to stand up to constituents who disrespected his opponent Barack Obama, despite the political ramifications, are prime examples of this integrity. How he bucked his party on certain important issues, such as the disastrous Obamacare “skinny repeal” vote, is further proof of his strength of character.

As a soldier and later as a legislator, John McCain was an American hero in every sense of the word. With the country as politically divided as it has been in decades, and our Congress seemingly populated with spineless representatives, we need him now more than ever. He is sorely missed.

From Partisan Differences to Demonization

Ideally, bipartisanship would be a quality which helped a candidate get elected. Unfortunately America is far from, and has perhaps never been further from, this ideal.

America was founded on compromise between the Federalists and Anti-Federalist. Historically, some of our strongest pieces of legislation have resulted from bipartisan compromise. Today it seems like politicians will tow the party line regardless of a policy’s real-world implications, leaving any negative impacts to their party’s spin-doctors (or, due to the time delay it takes for the full impact of many policies to be felt, to future legislators).

Politicians have always cared about getting re-elected, but the type of behavior that voters reward seems to have changed. What was once a quest to push the frontier of American progress has been replaced with a cynical, no-holds barred attempt to secure governing super-majorities that can ram legislation through without any support from the other side. The other side then uses said legislation as campaign fodder, hoping to increase voter turnout and overturn it.

This results in a never ending loop of legislative gridlock in which the average American–regardless of political affiliation–loses. No wonder Americans don’t trust their government and are so politically divided!

This us-versus-them style of governance is reminiscent of sectarianism in newer, fragile democracies (like Iraq or Kenya)–it should not be a feature of American democracy. Policy differences have always existed, but the fight has seemingly gotten dirtier since Trump took office. Even more disturbing is that this increasing partisan divide is being driven by the President himself.

Trump recently called his Secretary of Defense “sort of a Democrat”. While this is far from true, it is also ridiculous that this is even a dig at all–as if being a Democrat is some sort of inherently bad thing. It is this sort of rhetoric that leads Democratic and Republican voters to talk past one another, instead of to one another, precluding the hard work of finding common ground.

Trump also recently said Democrats are “an angry, left-wing mob…they would turn our country so fast into Venezuela, and Venezuela’s not doing too well, folks.”

Look, it was not right when Hillary called Trump supporters “deplorables” during the 2016 Presidential campaign, and it is not right for Trump to call Democrats “an angry mob” now. When we look at the country’s partisan divide, we have to acknowledge the role that the leaders of our political parties play–when they act like children, there is a trickle down effect to the behavior of the average voter.

Lord of the Lies

It is not just morally “wrong” for Trump to say Democrats would “turn our country into Venezuela”, it is inaccurate and hypocritical. The major economic issues facing Venezuela are massive government debt and resulting hyperinflation. Trump’s tax plan will increase the U.S. debt load by $1.5 trillion dollars over the next decade, and he has been critical of the Feds efforts to combat inflation by raising interest rates. I would not go so far as to say that Trump’s policies will turn us into Venezuela, because it would take decades of economic mismanagement to “turn America into Venezuela”. But if either party’s policies are putting us on the path to “becoming Venezuela”, it is the G.O.P’s, not the Democrats.

Trump is taking advantage of the fact that many people want simple answers to complex problems. Responsible leaders admit there are no simple answers, whereas Trump makes up simple answers that will not solve the problems and in many cases exacerbates them. Anyone who tries to point out the shortcomings of his plans are dismissed as liars or out-of-touch experts, trying to bamboozle the common man.

These falsehoods are part of a larger concerted effort by President Trump to blur the line between fact and fiction; when everything is in question, people can make up their own reality. How often have you heard Trump say something to the effect of “maybe it is, maybe it isn’t, who knows?”–on a regular basis if you’ve been paying attention (twice in his most recent “60 Minutes” interview alone).

We’ve all heard of “fake news”, but don’t forget about “alternate facts“, “alternative data“, the “witch hunt” (Mueller investigation), and unsubstantiated conspiracy theories promoted by the President to cast doubt on the outcomes of the 2018 midterm elections.

If some people do not like “politically correct” politicians or “experts” that’s one thing-I don’t agree, but I get it. This does not mean we needed to elect someone who purposefully tells lies and sows confusion and discord as their primary means of governing–there is a huge middle ground here America.

Trump The False Populist

You can blame social media, poor leadership, or whatever other factor of varying importance you want, but where we are as a country ultimately points to a failure of the American people to elect the right type of representatives. If this is a tough pill to swallow then good, it should be; it is meant to prompt introspection and personal accountability. People of all political stripes are complicit in this collective failure, and it will take a change in thinking across the board to correct it.

I do not have the answers to these problems, except to try to educate and lead by example; I think that is all anyone without a celebrity-sized platform can do, so I carry on. Maybe I should just run for office…

Speaking of running for office, remember that Trump campaigned and was elected as a “populist“. While it was pretty clear to anyone who knew anything about his pre-Presidential endeavors that this was not the case, I wanted to give Trump the benefit of the doubt–after all, if he did well it would be good for the country!

Instead, Trump decided to pursue an agenda based on division, class and racial warfare, shortsighted “America First” foreign policy, blindly slashing regulations regardless of whether they were useful or not, and generally undoing all of President Obama’s achievements. To date, Democrats in Congress have had little success defending what I identified as the party’s red-line issues.

Even more tellingly, none of the many potential areas of compromise I identified after the Presidential election have been pursued. These would have been low-hanging fruits for Trump to pick, restoring the public’s faith in the government’s ability to address the issues facing the average American and healing the partisan divide, but he elected to go a different route.

Let this list of unpursued policies (headlined by the lack of an infrastructure plan or apprenticeship bill) stand as a testimony of Trump’s choice not to govern for all Americans.

Update (10/24/18): Things have gone from dirty to downright dangerous in the days leading up to the 2018 midterms. Apparently people have sent pipe bombs to Barack Obama, Hillary Clinton, George Soros, and CNN offices.

Maybe having a GOP leader that promotes and applauds violence has somehow actually incited violence! Who would’ve thunk it?!

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Military Spending and “Moral Hazard”

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Labor, Education, and Apprenticeships

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Long time no see folks. It’s well past time to shed that post-policy depression (tax code) and get back to it. In doing so let’s consider a topic I have discussed often, one that should have bipartisan and Trump administration support, but has unfortunately yet to get its due–apprenticeships.

The Trump administration just concluded it’s “Task Force on Apprenticeship Expansion” in May. Here are some key recommendations from the final report:

  • “The Subcommittee on Attracting Business to Apprenticeship recommended that the Industry Recognized Apprenticeship program should streamline and simplify program funding through various methods, such as updating Federal funding criteria, streamlining State grant access, and exploring sector-led financial options.” (p 10)
  • “According to recent research by the U.S. Government Accountability Office (GAO), there are more than 40 workforce development programs across nine Federal agencies. Data shows that these programs were funded with more than $42 billion, although less than half that amount ($17 billion) went to employment and training activities. Based on this data, there is a clear need to streamline and simplify programs by developing an organized approach that recognizes and preferentially funds apprenticeship.” (p 27,28)

Who can argue against greater efficiency? Nobody. However these efficiency increasing measures were already implemented, according to the Government Accountability Office (the very entity the Task Force cited regarding inefficiency in the first place)–that low hanging fruit has already been picked.

The Trump administration wants the private sector to share in the cost of scaling-up apprenticeship programs–another sentiment that is difficult to argue with. The problem is that it has not offered any incentive for the private sector to do so. Private companies are currently bringing in record profits while under-investing in apprenticeships; why would these companies change their behavior now, when times are good, without a new incentive to do so? Instead of increasing spending or leveraging the recent corporate tax giveaway to provide such an incentive, the Task Force cites measures to increase efficiency that have already been implemented.

The private sector needs to play a role in developing the curricula for apprenticeship programs, but can we stop pretending it will provide meaningful financing for them? Maybe if we cut corporate taxes even further they would, right!? If only we could’ve done away with that pesky corporate income tax completely, surely they would have (well, there is no more corporate alternative minimum tax now)…OK, clearly I’m still salty about tax reform…

It is time to admit that private businesses have largely abandoned the apprenticeship model. Sure there will always be anecdotes about successful training programs, particularly from large corporations that can afford to attract top talent. Unfortunately nothing currently exists on the scale required to meet the needs of the average American worker or business.

The results are obvious: underemployment, stagnant wages (a modest uptick in wage growth recently does not make up for decades of stagnancy), and ballooning tuition rates / student loan debt as everyone feels they must go to college to make a decent living. If the Trump administration’s answers to these societal problems are reaching some unattainable level of efficiency and expecting the private sector to suddenly become more altruistic, nothing will change from today’s unacceptable status-quo. If, on the other hand, apprenticeships were adequately invested in, they could provide an affordable alternative to the four-year college path, and revive America’s dwindling middle class.

The Trump administration just proposed merging the Labor and Education Departments. In talking about it, a friend asked me if I thought the proposal was a good idea. My answer was that it could be a good idea, but under this administration it would not be. If, for example, the merger really reduced redundancies and opened up more resources for programs like apprenticeships, that would be a positive trade-off in my opinion (again, greater efficiency is hard to argue against, in theory).

But lets be realistic, that is not the point of the Trump proposal. Look at Trump’s big Apprenticeship Task Force, which would fall squarely within the proposed agency’s mandate. Where’s the beef? SHOW ME THE MONEY! It’s simply not there…

As a nation we invest in what is important to us. No amount of free-market rhetoric, appeals to “greater efficiency”, or other forms of lip-service are going to shrink Americans’ skills gap or “make America great again”. Only investing adequately in our greatest asset–the American people–can accomplish that feat.

(Note: When considering what we do spend tax dollars on, don’t forget that the recent spending bill appropriated $61 billion MORE for defense spending–$655 billion total, compared to $42 billion for workforce development programs. Also, don’t forget that the recently passed tax code will reduce tax revenue by over $1 trillion dollars over the next decade)


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Starved of New Ideas, the GOP Goes Back to “Starve The Beast”

“Starve the Beast”

The GOPs tax plan was the first part of a two-tiered approach to reduce the size of the government–it was never supposed to “pay for itself“. In order to keep the deficit from growing after cutting taxes, spending cuts–with “welfare” the common whipping boy–are necessary, or so the thinking goes. This method of governance, developed by the Republicans in the late 70s and 80s, is known as “starve the beast“.

History tells us that “starve the beast” does not work–it is a tried and failed policy. It turns out that when you get down to the actual programs involved, “welfare” is quite popular; it aligns with America’s collective moral compass, helps promote the “American Dream” (social mobility), and stimulates short-term economic growth. While there are reforms that could improve our welfare system, doing so responsibly requires complementary policies (more on this later).

There are again signs that the GOP will fail to fully implement its “starve the beast” agenda. The tax code is already the law of the land, yet the GOP does not seem to have the political will to tackle welfare reform. Far from starving the beast, Congress has just agreed on a budget deal that will increase spending by $300 billion dollars over the next two years.

I’m sure the GOP will come back to entitlement reform and overall government downsizing after the 2018 midterm elections. At this point the GOP will no longer have to worry about immediate electoral backslash from enacting unpopular welfare reforms, and probably believes the link between their tax cuts and the fiscal need to enact such reforms will have been severed in the average voters mind. But even when the political will to “starve the beast” resurfaces, I doubt the GOP will have sufficient Congressional support to actually implement the plan. Whether they have sufficient support will largely depend on the outcome of the 2018 elections–after all, “elections have consequences”.

Make no mistake, the likelihood that “starve the beast” will again fail is a good thing. The real crime is that the GOP passed a huge tax cut knowing it would not pay for itself, while also knowing that it would not be able to “starve the beast”. The results are ballooning deficits and insufficient resources to address America’s many needs. Sure, budgets may pass with small increases to existing programs, but new programs will not even be considered in this climate of huge (and increasing) national debt, rising interest rates on said debt, and much lower tax receipts.

Perhaps this is the true purpose of “starve the beast”–to restrict our country’s collective “policy imagination” (i.e. “fiscal space“). Instead of thinking about how to make America better, we will be stuck with the status-quo that people across the political spectrum are unhappy with (only now with even more inequality and debt).

Common Sense Welfare Reform

As mentioned before, there are some worthwhile welfare reforms to consider. Let’s look at a few of them, as well as the complementary policies needed to ensure they actually promote desirable results and don’t just place undue burden on America’s most vulnerable people.


Let’s promote a healthy diet and save on our country’s medical spending! Why not go one step further and promote local produce wherever possible. Such a plan would benefit smaller farmers and local economies, promote greater public health, and reduce emissions from shipping food around the world.

Drug Testing for Welfare

I am not completely against drug testing people on welfare programs, or other oversight measures, but let’s be clear–such measures would require more spending to implement. It is entirely possible that the nation would spend more money on enforcement than it would save in rooting out welfare fraud–this has largely been the experience when states have experimented with such programs.

But money isn’t everything; in a democracy public support is the lifeblood of any policy, and clearly many people do not approve of our current welfare system. Surely even the most progressive person can see there is some benefit to addressing the concerns of a large portion of the electorate regarding our current welfare system. Addressing these concerns should ultimately increase public support for welfare programs.

The costs and benefits (monetary and otherwise) of various oversight measures are something we should study, so the American people can make an informed decision about whether such policies are truly worth pursuing.

Responsibly Reforming Welfare Programs

How else can we responsibly reform our welfare system, reduce disincentives to work, and promote gainful employment?

First of all, programs that benefit children, the non-wealthy elderly, persons with disabilities (including serious mental illnesses), and other vulnerable groups do not need more requirements–society’s most vulnerable do not need more hoops to jump through. Admittedly, just coming to an agreement on who should be considered ”able-bodied” is a difficult task itself.

But certain recipients, like healthy, prime working age people, can be reasonably expected to meet certain socially beneficial criteria in exchange for welfare benefits. One such example is a new “community engagement” requirement for Medicaid in Kentucky. Progressives may not like this plan, but as long as sufficient waivers exist for vulnerable groups, why should someone in the prime of their life not be working, looking for work, volunteering, and/or in a job training program for 80 hours a month? Such a change should lead to improved employability and mental health outcomes. This is a completely reasonable requirement, and the type of idea that responsible, bipartisan welfare reform can be built upon—leveraging welfare benefits to drive positive recipient behavior.

Aside from reforming welfare programs, other complementary programs targeting the labor market could help reduce reliance on government assistance. Higher minimum wages would reduce government spending on welfare programs, as we currently subsidize companies that do not pay a living wage. An expanded earned income tax credit (EITC) could help reduce disincentives to work by smoothing high marginal tax rates for people coming off welfare programs. We also need more job training and apprenticeship programs; we can’t just say there are job training requirements for welfare eligibility, but then not make these programs available! Just like with welfare oversight measures, expanding the EITC and sufficiently scaling up job training programs would both require significant government resources.

Simply put, there are upfront costs to responsibly reforming our welfare system. Unilaterally cutting welfare programs and hoping for the best will not work; any savings would ultimately be lost due to increased spending on the criminal justice system and decreased long term economic growth, as even more Americans would fail to reach their full economic potential.

Ideally, reducing the size of the “welfare state” would be an organic process by which we invest enough in our people, particularly early in life, to promote equality of opportunity. The complementary policies outlined above can help at the margins, but the real heavy lifting involves addressing the root developmental causes of poverty (early childhood development, housing, healthcare, education, etc.).

Progress Frozen in Time

This brings me to the main reason why the new tax plan is so regressive in the first place. It is not because it will be bad for the average American consumer or economic growth in the short-run; if anything, it should have positive short-term impacts in those regards. Those are, however, poor criteria for assessing the merits of a tax plan that will likely be in place for a long time and is directly related to our ability to fund programs that drive long term growth and social progress. In other words, what did we give up in exchange for these tax cuts?

Due to lower tax revenue, it will be very difficult to fund the aforementioned complementary programs needed to responsibly reform our welfare system, much less the more costly investments needed to promote equality of opportunity and drive long term economic growth (infrastructure, R&D, healthcare, education, job training and early childhood development).

On the topic of infrastructure, Trump’s “trillion dollar infrastructure plan” (now $1.7 trillion, if you still believe a word he says), will reportedly only use $200 billion in federal funds. The idea that $200 billion can leverage that much funding in mostly state and local tax money (as well as some private investment)–the crux of Trump’s plan–was a dubious claim when he made it while campaigning. With the caps on SALT deductions in the new tax code, and the resulting strain on state and local budgets, it can’t even be called wishful thinking–it is just a flat-out lie.

The results will be obvious in the type of infrastructure that ends up being built. Non-revenue producing infrastructure will fall almost completely to the wayside. There will not be enough funding for expanding broadband internet access and affordability in underserved areas, which would unlock better K-12 schooling and access to online job postings. In a sad irony, these underserved areas are mostly in “Trump country”.

EPA Chief Scott Pruitt has said combating lead poisoning is a top priority of his, but has offered no plan for how he will do it. Instead, he has undermined programs that protect children from lead based paint, and supported an overall downsizing of the EPA. In all likelihood there will not be enough funding for new water pipes to prevent people from getting lead poisoning, which stunts cognitive development in children. Stunted development compromises the future earning potential of those affected, increasing reliance on welfare programs–talk about being short-sighted.

Our country likely needed more tax revenue, not less, to promote equality of opportunity, meritocracy and social mobility–to make America fair again. People–albeit the minority of the electorate–elected Trump as a populist because they felt like they were being left behind. Trump has betrayed his base with his policies, whether they realize it yet or not.

The Same Old Blame Game

Absent the resources to actually address the needs of the average American, you will instead hear the GOP repeat its same old tired lines. Lets consider some of these talking points:

People are lazy

Well sure some are, but no more-so than they used to be…

It is true that labor force participation rates are down overall from highs in the 1990s, but this is less true among prime working-age people; the majority of labor force participation decline is due to an aging population.

Furthermore, many people collecting government assistance already work. As stated before, increasing the minimum wage and expanding the EITC would help promote gainful employment.

Traditional marriages / family structures / “values” are breaking down

This is really a societal shift, and in some ways is a natural consequence of a freer society. For example, a wife who is being beaten can more easily leave her husband now than she could decades ago.

This phenomenon is at the cross-section of many deeply personal, multifaceted, and interrelated choices people make (to get married or not, to have kids or not, to get divorced or not). As such, there is really very little the government can do to steer society back towards more traditional family structures. The common conservative call to block access to family planning services, contraception, and abortion, however, will only exacerbate these issues (and yes, likely lead to increased future welfare spending).

We Can Rely on the Private Sector to Fix Everything

Guess what, the private sector won’t just deliver on infrastructure, but job training too! Trickle-down economics! That sure sounds nice, too bad it has never actually worked out that way.

I listened to an event kicking off “National Apprenticeship Week” at the Department of Labor, and not once was government funding or a public-private partnership (PPP) mentioned. It was all about what the private sector can do; well guess what, the aren’t doing it! Absent some change in incentives, there is little reason to think that the private sector will all of a sudden start to prioritize job training programs. What America needs is drastically scaled-up apprenticeship programs developed and financed by community colleges, universities, and industry leaders.

Instead, “Jobs President” Trump has proposed cutting the DOL budget by 21% (from $12.1 billion to $9.6 billion), and the Department of Education budget by 13.5% (from $69.4 billion to $60 billion). Such a plan effectively rules out more funding for apprenticeships, as these would be the departments to administer such programs.

At the same time, the GOP will increase military spending by $82 billion, to $716 billion, by 2019. Imagine the impact that type of additional funding would have on our drastically underfunded job training programs and community colleges.

Hail the Almighty Job Creators! 

We need to stop treating companies as if they are doing some sort of public service by hiring people. Companies create jobs to maximize profits. Publicly traded companies operate to maximize stock prices. Private companies are not doing a public service by being in business.

A company’s social contributions are the taxes they pay. We should not be subsidizing jobs through direct subsidies to companies and unlivable minimum wages that drive people to welfare programs. We should not have reduced the tax burden of the wealthiest Americans in the hope that some scraps will trickle down to the average person. Absent such policies the American economy would still work, just with less extreme inequality.

Until there is a clear understanding on this across the political spectrum, the greedy will continue to use scare tactics to hold enough of the electorate hostage to perpetuate their position of power. We need politicians that will stand up to these people and call their bluffs, not politicians who will sell the American public out to the highest bidder.

Concluding Thoughts

Investing in human development takes time to manifest itself in positive outcomes, just as it takes time for a child to grow up. Therefore a responsible, holistic approach to welfare reform means there will be an overlap period where we will be paying more for both welfare reform and human development initiatives (which in some cases, like CHIP, are one in the same).

If, as a country, we are OK with $1 trillion more in debt (what Trump’s tax plan will cost us), this is the way to spend it—not another war or military buildup, not another trickle-down Hail Mary, but a real plan to promote economic opportunity and responsibly reform our welfare system. This new “Great Society”, with the benefit of 50+ years of lessons learned, could build upon the successes and avoid the shortcomings of the original, and ultimately make America greater than it ever has been.

Instead we are stuck with half a “starve the beast” strategy. This means more debt while cementing in place the status-quo that has failed too many Americans for too long. Thanks, GOP!

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Against this backdrop, lets consider Trump’s tax proposal:










The Case for Higher Top Rates







A Quick Lesson on Marginal Tax Rates











Update (12/1/17):




Update (12/22):




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Macron Impossible: French Labor Reform and the EU Budget





























This uphill battle just got a whole lot steeper…

Update #2 (2/7/18):






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Could Venezuela Become “America’s Syria”?

Recently President Trump, seemingly out of nowhere, threatened Venezuela’s increasingly authoritarian President Nicolas Maduro with the possibility of military intervention. Where did this idea come from? How crazy is it? Lets dive in.

To answer the first question, I can just imagine at some point during a National Security Council meeting, someone mentioned the need for a military option should the situation in Venezuela continue to deteriorate. Trump, never missing an opportunity to put his foot in his mouth, turns that into his ad-libbed “military option” line.

It’s like a game of telephone that never should’ve happened between the National Security Council, Trump, and Maduro. What was supposed to be implicitly understood–that America will defend its interests and regional allies–was instead explicitly said in the worst way possible (much to the joy of Maduro, who is using Trump’s words as a rallying cry in hopes of gaining domestic and regional support).

But what about the second question, how crazy is the idea of a limited American military intervention in Venezuela? The answer: not as crazy at is sounds.

I have always said America would never let something like the Syrian Civil War happen in Latin America. For all the anti-interventionists out there, lets take stock of what European inaction in Syria has cost it–a refugee crisis and a crisis of identity: Brexit, a rise in right-wing populism, and the continued inability to address the large scale economic and social problems that have plagued the continent since the Great Recession and whose solutions require closer European integration. And that’s not even considering the suffering realized by the Syrian people.

So the next questions are obvious: is Venezuela “America’s Syria”? Could inaction in Venezuela lead to similar horrors in the United States?

Long answer short, no. There are some key differences between these two crises.

Most significantly, while there is certainly a humanitarian crisis in Venezuela, the government has not been particularly violent in its crackdown on dissent (at least compared to Assad’s response to protesters in Syria). The Venezuelan military, however, is loyal to Maduro, so it’s actions are certainly something to keep a close eye on as the situation unfolds.

Latin America as a region is more stable than the Middle East. It has experience with democratic governance and resolving disputes peacefully. At this point, it still seems unlikely that full scale civil war will break out in Venezuela.

The U.S., for its part, has vastly superior military and border control capabilities compared to the EU. Venezuela is also further from the Southern U.S. than Syria is from Southern Europe; greater physical distance will help insulate America from any negative spillover effects.

There is, however, one common thorn in the side of a reasonable solution–the spoiler you love to hate, Vladimir Putin. Putin has worked out a weapons and financing for oil deal with Maduro, giving Russia a strategic partnership in the region similar to what he had with Assad in Syria.

Putin’s Puppet?

As Maduro has been ostracized by the international community and seen the value of the Bolivar deflated away due to economic mismanagement, he has increasingly relied on Russian financing to keep his regime afloat. In exchange, Maduro has offered access to Venezuela’s lucrative oil reserves on very preferential terms.

In an attempt to stop this damaging, shortsighted behavior, the Venezuelan Congress took away Maduro’s authority to make oil deals without legislative approval. Maduro responded by using the courts to circumvent the rule:

“In March, the nation’s Supreme Court – whose members are loyal to Maduro – took over the powers of the opposition-controlled National Assembly. A majority of elected Assembly members opposed any new oil deals with Russia and insisted on retaining power to veto them.

Days later – after fierce national protests against the action – the court returned most powers to the national legislature at Maduro’s public urging. But the court allowed the president to keep the legal authority to cut fresh oil deals with Russia without legislative approval.

The episode was pivotal in escalating daily street protests and clashes with authorities that have since caused more than 120 deaths.”

Of course the Venezuelan Congress has since been dissolved and replaced with a rubber stamp assembly, so at this point it doesn’t matter what the Congress had ruled.

With this entanglement of Russian and Venezuelan money, arms, and oil, you can forget about any meaningful UN Security Council action against Maduro. Russia will shield him with its veto power under the guise of “national sovereignty”, because if Maduro falls, Russia’s influence and its oil deals would likely be in jeopardy:

“The Russian strategy has its risks. Many of the world’s top energy firms took a hit when Chavez nationalized their assets, and an opposition-led government could later reverse or revise any deals Maduro cuts without their blessing.”

Funny, I thought Maduro said America was trying to steal Venezuela’s oil? It seems like he’s doing a fine job of that himself, leveraging his country’s future in a desperate and costly attempt to remain in power.

Not Syria, But a Serious Situation

So if Venezuela is not “America’s Syria”, why did I say earlier that the idea of limited American military intervention is “not as crazy as it sounds”? This is because bad situations–and the Venezuelan crisis absolutely qualifies as one–usually fester and become worse if left unaddressed.

Anti-Maduro activists are becoming fed-up with the official opposition. If the people believe the organized opposition is ineffective, it could lead to more extreme measures like guerrilla warfare, which could ultimately lead to civil war. Venezuelan’s will not sit idly by as the collapsing economy and shrinking political space encroach upon their human dignity.

The fallout from a failed Venezuelan state would not be confined to the country’s borders. It could, for instance, trigger a refugees crisis. While Latin America is more stable than the Middle East, the region is not particularly wealthy or able to absorb large numbers of refugees. There could be cascading crises as other Latin American nations struggle with such an influx, ultimately threatening America’s national security and economic interests.

But most importantly, making sure Maduro does not turn Venezuela into a fully failed state (like Syria) is the right thing to do for the Venezuelan people. Sometimes the right thing to do aligns with short term national security and economic interests (they always align in the long run). When they do align, taking action suddenly seems less crazy, and inaction seems less defensible.

If the situation deteriorates further, America must be ready to commit resources to its Latin American and Venezuelan allies to remove Maduro. This would enable an interim government to restore Venezuelan democracy. Only then can the hard work of rebuilding Venezuela’s economy begin.

Trump wasn’t wrong that a military plan should be in place in case the situation in Venezuela further deteriorates–being prepared is a good thing. What he was wrong for doing, as usually, was not fully comprehending the situation and opening his big fat mouth. The “military option” should be a contingency plan, not a threat. Trump’s inability to say nothing, to not be the tough guy, has made a bad situation worse.

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How to Compromise and Fix the ACA


Time to Replace Those Repeal Attempts

The Senate’s latest attempts to repeal and replace the Affordable Care Act (ACA) have all failed to pass.

The most comprehensive attempt, the Better Care Reconciliation Act, was voted down 43-57. Defections came from both sides of the GOP–some thought the bill was too hard on low and middle income people, while others thought it left too much of the ACA in place.

With repeal and replace off the table, President Trump changed his tune from “repeal and replace” to “repeal, then [try to] replace”. The Congressional Budget Office (CBO) forecast that “a plan to repeal Obamacare without replacing it could cost 32 million Americans their health insurance by 2026…at the same time, premiums on individual insurance plans would rise 25 percent next year and double by 2026 if Obamacare is repealed.” This effort also failed to gain enough support in the Senate, as it was defeated 45-55.

These CBO projections and Senate votes reflect the fact that people do not want to go back to the pre-ACA days when they could be denied coverage due to pre-existing conditions. As the reality of the modern economy pushes back the typical age of financial independence, the ACA provision allowing young adults to stay on their parents health insurance until 26 has bipartisan support. Minimum standards ensure people who pay for coverage are actually covered when it is time to receive treatment. The individual mandate, while unpopular, ensures a reasonably healthy risk pool for insurers.

All this is to say that the ACA, while imperfect, was designed the way it was for a reason. “A la carte ACA” or the “skinny repeal” would not work, particularly without the individual mandate. Sicker risk pools would lead to a “death spiral“, driving up premiums for middle class customers and subsidy costs for the Government, all while increasing the number of uninsured. For those still keeping score at home, the CBO estimated the “skinny repeal” would result in 16 million Americans losing health insurance over a decade and raise insurance premiums by 20 percent in January. Thankfully, the “skinny repeal” also failed in the Senate, 49-51.

[In other news, the GOP wants to gut the CBO–talk about shooting the messenger]

With so many failed repeal efforts, it is clearly time to try to work towards improving the ACA. Many of the ACAs problems are the result of a lack of competition (see the map above)–private insurers are simply not participating in certain markets, particularly in rural areas (a problem that is expected to get worse in 2018).

The solution to this market failure is to create competition by allowing people to buy into the Medicaid “Public Option”.

I can already hear the outrage from Conservatives–“of course a liberal’s answer is more government”–but hear me out. The Public Option need not increase government spending drastically; people would receive healthcare at cost, but they would still pay–this is not a Medicaid for all as an entitlement proposal. Sure, administrative costs for the government would rise as the program absorbed more people, but the marginal cost of providing care for people who are currently ineligible for Medicaid should be close to zero (some scaling would be needed to smooth costs for people just above Medicaid thresholds).

Furthermore, with the Public Option in place, Medicaid would be in even better position to negotiate lower drug prices with pharmaceutical companies, a cost-saving idea championed by many, including President Trump.

Of course, in order to garner support for a Medicaid Public Option, concessions must be made to conservatives.

Removing the employer mandate:

With a reliable, affordable option that covered all essential health benefits, people would have a much clearer economic decision to make–accept a job that pays less but offers insurance, or take a job that pays more knowing they have to set aside a certain amount for insurance. The Public Option would make buying health insurance a predictable financial choice for the first time in American history.

This concession tackles a major criticism of the ACA–small businesses would no longer be required to factor in the cost of providing health insurance when deciding whether or not to hire more employees.

A higher employee threshold could also be kept in place to ensure larger corporations offer a health insurance option to their employees

Reviving Ted Cruz’s Essential Benefits Plan:

For those not familiar with it, Ted Cruz proposed a plan in which health insurers would be able to offer non-ACA complaint plans–ones that do not cover all essential health benefits–as long as they offer a plan that does cover them as well.

Clearly marking which plans do and do not cover all essential health benefits would be important, but it would also be easy enough. The real issue with Cruz’s plan was there was no way to ensure the ACA-compliant plan was being offered at a reasonable rate, and not just as a token to unlock the right to sell non-compliant plans. 

But with the Public Option, it wouldn’t really matter; if the ACA plan was offered at an unaffordable rate, people would have the choice to opt-in to the Public Option. 

This concession tackles another major criticism of the ACA–people would no longer have to buy insurance covering care they don’t feel they need.

President Trump said “Obamacare is Death”, while Senate majority leader McConnell called it a “nightmare”–empty hyperbole meant to scare people who do not know better. In the darkest of ironies, their very replacement ideas would have truly be a living nightmare for millions, and would have lead to many preventable deaths.

In defeat, President Trump tweeted (of course he did) to just let Obamacare fail. There is much his administration can still do to undermine the laws effectiveness if it truly prioritizes political vendettas over the well-being of American citizens. The GOP has (thankfully) proven it can still be the party of “No” when it comes to Healthcare, even when it is the majority party. Now is the time to see if it can be the party of “Yes” for a stronger, bipartisan plan, the American people want and deserve.

Update (8/24)

Every U.S. county is expected to have an insurer in the 2018 Obamacare marketplaces. However, having one insurer does not mean there is competition or choice. 1,478 counties could have only one insurer in 2018, potentially leaving customers without an affordable option.

Expect more updates as 2018 plans are finalized in the coming weeks.

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Criminal Justice Deformed

In past blogs I wrote about the “Prison Paradox“–the idea that incarceration in America has gotten so out of control that it may actually increase crime by creating a poverty trap and perpetuating prison culture.

I wrote about the topic from the vantage point of an enlightened society that was seemingly moving in the right direction on the issue. While this is still the case at the state level, a recent Justice Department directive by Attorney General Jeff Session threatens to undo recent progress:

In an eight-paragraph memo, Mr. Sessions returned to the guidance of President George W. Bush’s administration by calling for more uniform punishments — including mandatory minimum sentences — and instructing prosecutors to pursue the harshest possible charges. Mr. Sessions’s policy is broader than that of the Bush administration, however, and how it is carried out will depend more heavily on the judgments of United States attorneys and assistant attorneys general as they bring charges.

The policy signaled a return to “enforcing the laws that Congress has passed,” Mr. Sessions said Friday at the Justice Department, characterizing his memo as unique for the leeway it afforded prosecutors.


Mr. Sessions’s memo replaced the orders of former Attorney General Eric H. Holder Jr., who in 2013 took aim at drug sentencing rules. He encouraged prosecutors to consider the individual circumstances of a case and to exercise discretion in charging drug crimes. In cases of nonviolent defendants with insignificant criminal histories and no connections to criminal organizations, Mr. Holder instructed prosecutors to omit details about drug quantities from charging documents so as not to trigger automatically harsh penalties.

People of all races use drugs at roughly same rate, but minorities are disproportionately imprisoned for drug related offenses. Meanwhile, “White America” is currently experiencing the well documented “opioid epidemic”. Drug abuse, treatment, and incarceration should be issues that transcend racial barriers.

On the micro level, drug related criminal justice reform that prioritizes treatment over prison can keep families together. It can keep people in the labor force and in productive society, instead of exposing them to hardened criminals in prison (potentially turning minor offenders into career criminals). Even when prison doesn’t “harden” someone, difficulties finding employment can lead to recidivism (re-incarceration) among ex-cons.

On the macro level it saves money on incarceration and welfare programs. As the “War on Drugs” is no longer achieving its goal–reducing crime–what these funds are spent on is largely irrelevant. Liberals would probably like to see more social programs and public goods. Conservatives would probably like to see more defense spending or a reduction in government debt. This debate can be had once the savings are realized and the socially damaging policies are reversed.

Attorney General Session’s directive claims to give judges more freedom, but it does the opposite. All Holder’s directive did was allow judges to consider the facts of the case before delivering a sentence. It did not prevent them from doling out severe sentences when the situation dictated it. Session’s directive takes this freedom away from judges.

There is no significant public support for this stricter rule. 14 States Attorneys General have written a letter asking Sessions to rescind the rule. Rand Paul has reintroduced bipartisan legislation to ease mandatory minimum sentences, which would override the Session ruling. Unfortunately, based on the current political climate, I wouldn’t count on such legislation getting passed anytime soon.