Memoirs of the Addams Administration 27.

The third attempt to “repeal and replace” the Affordable Care Act (ACA) has already died.  Last week, however, it seemed like it might work.  Senate Majority leader Mitch McConnell tried adding inducements to win back “moderate” Republican senators.  Senator Ted Cruz added a proposal to require insurance companies to sell one full “Obamacare” policy in return for the freedom to offer more stripped-down policies as well.[1]  As is now known, McConnell’s effort to pull in votes from the two wings of the Republican party failed.

It is worth noticing several points that were not well articulated in the commentary.  First, critics claimed that the Cruz proposal would trigger a flight from the ACA standard policies on the part of younger, healthier (and often lower income) people.  That is, the ACA created not just an “entitlement” for some, but an irksome burden for many others.  Second, late in the Obama administration, a federal court held that the money for the insurance subsidies does not come from any Congressional appropriation.  Hence spending that money is illegal.  The Trump administration has not stopped paying the subsidies or hurried the case to the Supreme Court.  It seems likely that this Court would affirm the lower court.  In that case, the subsidies would stop and the market places would encounter some turbulence.  Third, the Republican party alone did not put Donald Trump into the White House.  Many traditionally Democratic voters switched side to vote for him.  Letting Mitch McConnell and other mainstream Republican decide the form of a new health-care law works against the interests of Trump’s own base.  He might do better to actually try to lead in conjunction with the Republican “moderates” and whatever Democrats he can pry loose.

The latter may not be so far-fetched as it sounds.[2]  First, Democrats have been debating whether the embrace of Bernie Sanders by many Democrats amounted to a sugar high.[3]  After the triumph of marriage equality,[4] transgender rights became an important liberal cause.  There are a great many gay people, but not a lot of transgender people.  Certainly their rights deserve as much protection as do those of anyone else.  However, was it politically wise to unleash the whole force of right-minded contempt on the many people who have not yet reached the point now occupied by urban liberal opinion?[5]  Then, you don’t see a lot of “We Oppose Our Local Police” yard-signs out there.  There are about 1,000 police shootings of civilians every year.  Focusing on a few high-profile cases, no matter how egregious they appear at first glance, may not be a winner.[6]  Democrats are divided over these and other issues.  The current chaos inside the Republican Party offers some of them a chance to actually accomplish something.  Much would depend upon Trump deciding to be president and Democrats shifting toward pragmatism.

[1] “Divided GOP haggles over health-care bill,” The Week, 21 July 2017, p. 5.

[2] “Democrats: Should they shift to the center?” The Week, 21 July 2017, p. 16.

[3] Meanwhile, in Venzuela,…

[4] Which I fully supported.  Why should gay peopmany (le be the only ones with a socially-approved out?

[5] It is worth reflecting on how long it took for President Obama’s position on marriage equality to evolve.  An estimated 25 percent of people self-identify as liberals.  A recent survey of small town Americans reorted that just over two-thirds of the respondents felt that they had different values from people in urban areas (probably why they’re still stuck in the boonies).  Almost as  many (56 percent) believe that the federal government does  more to help the citie than for people like them. “Poll Watch,” The Week, 30 June 2017, p. 17.  Hillary Clinton lost in the Electoral College, not in the popular vote.

[6] Of the 80 police officers arrested for fatal shootings since 2005, 28 have been convicted.  “Noted,” The Week, 30 June 2017, p. 16.  One can read this as a warning against a rush to judgement until all the facts come out.  Or you can read it as a sign that juries of ordinary citizens are reluctant to second-guess the police officers who protect their communities from other dangers.

Exclusive Covenants, Exclusively Arrived At.

Until the First World War, almost all African-Americans lived in the rural South.  By 1970, almost half of the African-American population lived in cities outside the South, while many others had migrated to Southern cities.[1]  That “Great Migration” fell in two parts.  From 1915 to 1930, about 1.5 million African-Americans moved out of the South.  From 1940 to 1970 another 5 million people moved North or West.

The migrants found no warm welcome from the white residents of cities.  Generally, white people did not want to live or work in proximity to black people.  Southern cities sometimes had ordinances that forebade people of one race to live in neighborhoods where the majority population belonged to another race.  However, in 1917, the Supreme Court held that such ordinances violated the 14th Amendment.[2]

As the “Great Migration” began during the First World War, it encountered violence from northern whites.  For example, in Chicago’s Washington Park between 1917 and 1921, bombings struck black-owned residences in traditionally white areas and the offices of realtors who sold houses to blacks between 1917 and 1921.  A bloody race riot shocked Chicago in Summer 1919.  Businessmen, and realtors in particular, saw violence as bad for business.  Integration led to violence.  So segregation had to be preserved.

A solution soon came to hand.  The “Great Migration” coincided with an effort at Republican “Progressive” reform launched by Herbert Hoover, the Secretary of Commerce in the Harding and Coolidge administrations.  In 1922, Hoover’s Commerce Department issued a model law for the states to pass called the “Standard State Zoning Enabling Act.”  The model law, subsequently revised, became the common basis for urban zoning.[3]

While the Commerce Department’s model law made no reference to racial segregation, it provided a framework within which city officials and real estate developers could use zoning and legal covenants attached to new subdivisions.  Immediately after a Supreme Court decision upholding covenants in 1926, the Chicago Real Estate Board promoted the use of covenants.

What was true in Chicago’s Washington Park section was true elsewhere.  Many real estate developers attached “exclusionary covenants” to each property in a sub-division.  They barred sale to or occupation by African-Americans.  For almost three decades, legally-enforceable residential segregation spread through much of urban America.

The National Association for the Advancement of Colored People (NAACP) mounted legal challenges to the covenants.  In 1926 the Supreme Court rejected NAACP arguments and affirmed the legality of the covenants as “private action” not covered by the 14th Amendment.  In 1940, the Supreme Court did reject one exclusionary covenant on technical grounds, but did not declare against covenants in general.[4]  In 1948, the Supreme Court essentially reversed the 1926 decision.  The Court held that private individuals could abide by the covenants, but that they could not use the courts to enforce their own views on others.[5]

In 1968, Congress passed the Civil Rights Act.  Title VII of that act is known as the Fair Housing Act.  It barred discrimination on the basis of race, creed, gender, or national origin.

[1] By 1970, 40 percent lived in the North, 7 percent in the West, and well over half of African-Americans living in the South lived in cities.  See: Nicholas Lemann, The Promised Land: The Great Black Migration and How It Changed America (1991), and Isabel Wilkerson, The Warmth of Other Suns: The Epic Story of America’s Great Migration (2010).

[2] See: https://en.wikipedia.org/wiki/Buchanan_v._Warley

[3] See: https://en.wikipedia.org/wiki/Standard_State_Zoning_Enabling_Act

[4] See: https://en.wikipedia.org/wiki/Hansberry_v._Lee

[5] See: https://en.wikipedia.org/wiki/Shelley_v._Kraemer

Iroquois Confederacy.

The Iroquois Confederacy united the Mohawk, Oneida, Onondaga, Cayuga, and Seneca tribes.  Sometime, perhaps around 1570, the five tribes had agreed to organize a confederation.  They had an elaborate government structure.  At its peak each tribe got one vote in the grand council and decisions had to be unanimous.  Why did they form this confederation?  Probably because they were under attack from all sides by more powerful tribes.  They concentrated in remote areas of central New York, building fortified villages on high ground.

Then they began to make a cult out of personal glory in warfare.  (Cultural values matter.)  The women of the tribes took over the farming duties.  This freed up the men for other activities.  Today it would be sitting in the recliner drinking a beer and watching sports.  For the Iroquois it was ranging through the forests to fight people.  Either you get good at this or you get dead.  The Iroquois got good at it.  Really, really good.  A total population of about 12,000 could produce 2,200 warriors at any one time.

At this time Europeans wanted beaver pelts in immense quantities.  (They made really sharp-looking and water-proof hats.)  Traders were taking 10,000 beaver a year out of upstate New York.  They were willing to pay Indian trappers a lot to get the pelts to satisfy the demand in Europe.  The first Iroquois treaty was with the French in 1624.  The two groups then fell out over the high price of French goods and the French favoritism for the Algonkins and Hurons, who seemed willing to accept Jesuit missionaries.  Also, the French did not want to sell the Iroquois guns.  The Iroquois got in touch with the Dutch fur traders on the Hudson River.  The Dutch tried to trade alcohol for furs.  The Iroquois wanted guns.  So the Dutch sold guns.

By the 1630s the over-hunting of beaver on Iroquois land threatened to undermine the economic basis of confederation power.  What to do?  Perhaps we should work to create a “sustainable” economy in harmony with Nature, instead of engaging in thoughtless resource depletion.  Perhaps we should reject consumerism, which puts a premium on “having things” at the expense of emphasizing nurturing relationships with the friends and family who give life real meaning.  Nope.  There’s lots of beaver on the lands of other tribes.  We’re going to conquer those tribes and take their beaver.

Between 1648 and 1675 they were on the offensive.  In a quarter of a century they smashed up all the major tribes to their west as far as Ohio and as far south as Georgia.  This gave them control of all the fur trade of the northern forests.  Tribes moving furs from up-country either paid a share to the Iroquois or they made a long detour to avoid coming into contact with the Iroquois.  Either way the “tax” on the fur trade pushed up the price of furs delivered in Montreal.  This greatly annoyed the French.  Anyway, between this and the butchering of Jesuit missionaries, the French got all bent out of shape with the Iroquois.  They launched several major invasions of Iroquois country.  This, in turn, greatly annoyed the Iroquois, who launched a whole series of raids against the French settlers in Canada.

Once the British got New York away from the Dutch, they started dealing with the Iroquois.  When France and Britain fought for control of North America, the Iroquois provided a valuable ally to the British.  (Certainly a lot more valuable than the useless American colonists who were afraid of the woods.)  The British would give you the guns for free, then they would pay for scalps on top of that.  Iroquois heaven.

My Weekly Reader 14 July 2017.

As contemporary Americans ponder whether the federal government has grown too strong or is not yet strong enough, it is worth revisiting the first years of the Republic.  Then even the survival of the United States lay open to question.  Many Americans (Anti-Federalists) had opposed the Constitution.  Britain and Spain, which possessed important territories bordering on the new nation, were little inclined to believe that the United States would become a behemoth.  In military affairs, interested people debated whether the United States should even have a permanent and professional military (a “standing army” of the sort decried in the Declaration of Independence).  Opponents of an excessively strong central government argued for a reliance on the citizen-soldiers of a militia.  Men like George Washington and Alexander Hamilton argued for the utility of a professional army.  What professional historians call “contingency” (specific things happen to determine an outcome) played an important role in deciding how things worked out.[1]

Take the example of the struggle for the “Northwest Territory.”  In 1781 a Franco-American army defeated a British army at Yorktown.  In 1783, Britain and America made peace.  In what was then the “West,” Britain granted to the Americans sovereignty over the territory north of the Ohio and east of the Mississippi.  The problem for the Americans lay in making good that claim.  The Indians living there declined to surrender their lands to white settlers.  Local British officials encouraged this resistance.  So, Indian wars became one feature of the presidential administration of George Washington.

In October 1791, the Indians defeated a U.S. Army force led by Josiah Harmar.  A year later, the governor of the Northwest Territory, Arthur St. Clair, led a new army into the wilds of northwestern Ohio.  Near the Wabash River, a smaller Indian force destroyed St. Clair’s little army in less than three hours.  They inflicted well over 90 percent casualties (including two-thirds killed), while suffering only minor losses themselves.[2]

This “signal catastrophe,”[3] tipped the balance in favor of a stronger national army.  In 1792, Washington managed to ram through Congress an increased military budget, then appointed Anthony Wayne to replace St. Clair.  Wayne worked hard to revive the morale of the defeated troops, then marched deep into Indian territory.  This took a while: the decisive contest only came in August 1794.  Then, at a place called Fallen Timbers, Wayne inflicted a devastating defeat on the Indians.  Faced with a victorious, ill-disposed-toward-Britain American army, local British commanders abandoned their Indian pawns.[4]

Two years later, Wayne negotiated the Treaty of Greenville with the defeated Indians.  The treaty—as decisive a surrender as that of the Japanese in 1945—opened the Northwest to white settlement.  Later, writers would cite America’s “manifest destiny” to conquer the West.  In the 1790s, this destiny was far from manifest.  It began to become so with the work of Anthony Wayne and his army.

[1] William Hogeland, Autumn of the Black Snake: the Creation of the U.S. Army and the Invasion That Opened the West (2017).

[2] In comparison George Custer got 268 men killed at the Little Big Horn.  “St. Clair’s Defeat” defeat was commemorated in folk culture.  See: https://www.youtube.com/watch?v=nn2rEoRmh1M

[3] I stole the phrase from the title of Patrick MacCrory’s superb book on the retreat of a British army from Kabul, Afghanistan in 1842.  I read his book in my youth and it conditioned me to think that people should be cautious about vexing Pashtuns.

[4] The episode nicely illustrates the difficulties of coalition warfare.  The British and the Indians were often in disagreement and the Indians themselves were not a solid bloc.

Possible Futures.

The stock market surged after the election of Donald Trump.  This seems to have reflected a belief that he would begin the laborious process of rolling-back Barack Obama’s massive extension of federal rules and regulations, and that President Trump would support the Republican default strategy of tax cuts.  The Trump administration projected rapid growth as a result of his election: a big, long-overdue infrastructure program; an additional 10 million jobs by the end of the first term; and significant tax cuts whose revenue effects would be off-set by the accelerating growth rate.  “Bliss it was in that dawn to be alive,….”

In reality, the American economy appears to be slowing in its growth under the Trump administration.  The average monthly pace of job creation in 2016 ran at 187K.[1]  According to the Labor Department, the American economy can be expected to add 162K jobs per month in 2017.  It added only 138K jobs in May 2017.  The labor participation rate has fallen from 83 percent a decade ago to 81.5 percent in May 2017.  The unemployment rate fell to 4.3 percent. That is the lowest level in 16 years.  In short, wages should be starting up.

But they aren’t.  Wages increases for the last year have averaged between 2.5 and 3.0 percent, scarcely ahead of the inflation rate.  Why?  Well, productivity growth—a perennial problem since the 1980s—continues to drag.  Price inflation is very low.  To the extent that nominal wages are frozen—as are mine—real wages have been falling in recent years.  This real deflation then drags on consumption.

Similarly, mergers and acquisitions (M&A)–often taken as a stand-in for corporate confidence in the economy—are at their lowest level since 2013.[2]  Because 80 months of increasing hiring has occurred, people have a reasonable concern that we are headed toward a new slump.  I think the smart thing to do would be to “buy in” to the slump.

On a totally different front, consumer demand for the Ford Focus is weak: American drivers prefer SUVs and pick-up trucks; gas prices are low, so those vehicles don’t cost as much to drive; and Focus sales have fallen by 20 percent.  In late June 2017, Ford announced that it would shift production of this dog of a car to China (rather than to Mexico).  The Chinese-made cars would then be re-exported to the United States.  The one-time Focus plants in the United States will be converted to produce even more SUVs and trucks.[3]

This announcement raises several questions.  First, why to China?  Ford already has Focus plants in China (where the car is seen as much better than a bicycle) and because labor costs are lower in China than in Mexico.  Second, why off-shore them at all, rather than just cutting back production to reflect the market?  Because, under Obama administration regulations, Ford gets to average the mileage of the Focus with the mileage of the F-150 and the Explorer when calculating how to meet the average miles-per-gallon (mpg) requirements set by the Environmental Protection Agency (EPA).  Ford has to make a lot of cars no one wants in order to be able to sell the vehicles that people do want.  What if no one buys the Focus?  I think that Ford still gets to average in the Focus mpg so long as it has made the cars and they are sitting in some vast parking lot near a sea-port.  So, Ford is trying to cut to the bone the production costs of a car that will not be bought.  That is, the Obama administration planned to force losses on an entire industry so that it could pretend that it was meeting its climate change goals.

[1] “Issue of the week: The jobs report’s red flags,” The Week, 16 June 2017, p. 34; Greg Ip, “Paychecks aren’t growing,” The Week, 30 June 2017, p. 14.  .

[2] “The bottom line,” The Week, 23 June 2017, p. 31.

[3] “Autos: Ford shifts its Focus to China,” The Week, 30 June 2017, p. 32.

Memoirs of the Addams Administration 26.

In May 2017 the House of Representatives passed the American Health Care Act (AHCA) in an attempt to “repeal and replace” the Affordable Care Act (ACA).   Senate majority leader Mitch McConnell assigned a small group of senators to quickly re-write this legislation to deal with its flaws.  In late June 2017 they revealed their handiwork to the public.  The Senate bill sought to introduce market-based solutions to health care.  In place of the ACA’s supposed individual “mandate”[1] to buy health care insurance, the Senate bill created a “lockout”[2] intended to keep people from only buying insurance when they are sick, then dropping out when they get better.  In place of the current open-ended government spending on Medicaid, the Senate bill would cap the amount of money that the federal government would pay.  The Senate bill reduced the average premium by about 20 percent, raised the average deductible by 70 percent, allowed insurance companies to offer a wider variety of plans in place of the expansively defined set of benefits required by the ACA, and raised the permissible differential between premiums for sick people and healthy people.   It also replaced direct subsidies paid to insurance companies with smaller individual tax credits.  The ACA’s expansion of the Medicaid eligible population to include the “working poor” would be rolled back by 2024.  The Congressional Budget Office (CBO) reported that the Senate bill would cut $722 billion out of federal health-care spending over a decade and that 37 million fewer people would have health insurance by 2026.[3]

McConnell found that he could not muster enough Republicans to vote for the bill.  Some of the dissidents wanted an even more radical repeal of the ACA, while others opposed the size of the cuts to Medicaid.   McConnell “postponed” a vote on the bill until later in the summer—or maybe ‘till the cows come home.

Otherwise, little is going on in government.  Most of the real news sprang from the Supreme Court.  The Court allowed a limited version of the administration’s initial travel ban on possible terrorists to go into effect until the Court can hear full arguments in October.  It also found that a Missouri law barring public funds to a church school violated the free exercise of religion.  The Court agreed to hear cases on the constitutionality of partisan gerrymandering and religious-based refusal to serve gay people.[4]  The dismantling of the “legacy” of President Obama continued.  The Environmental Protection Agency proposed repeal of a 2015 rule that claimed for the federal government the right to regulate water quality in the tributaries and wetlands surrounding major bodies of water like the Chesapeake Bay.[5]

Even so, people filled up the early summer with nonsense.  President Trump admitted that he had no tapes of his conversations with James Comey.  CNN admitted that it had published an unsubstantiated story about President Trump’s alleged Russian contacts.    Some Democrats bit at House minority leader Nancy Pelosi after the series of disappointing losses in Congressional special elections.[6]  Others urged staying the course that has brought the Democrats so much success of late.

[1] Many younger people just ignore the mandate.  That’s why the insurance companies haven’t been able to get a sustainable mix of poor, but healthy younger people to subsidize the health costs of wealthier, but sick, older people.  Massive losses have led insurers to pull out of a rising number of state insurance market places.

[2] Anyone who went without insurance for 63 days would not be eligible to buy insurance for six months.

[3] “Republicans divided over Senate health-care bill,” The Week, 7/14 July 2017, p. 4.

[4] “Supreme Court revives Trump’s travel ban”; “The U.S. at a glance…”; “Gerrymandering: A GOP advantage?” The Week, 7/14 July 2017, pp. 5, 7, 16.

[5] “Boring but important,” The Week, 7/14 July 2017, p. 6.

[6] The Week, 7/14 July 2017, pp. 6, 7, 17.

My Weekly Reader 29 June 2017.

A pessimist’s analysis of the American position in the world might run something like the following.  The United States is the world’s only global power.  (As such, it performs many of the vital military, political, and economic functions of a world government.)  It faces a host of regional powers bent on disrupting the global order created through American leadership after the Second World War.  Iraq, Afghanistan, Libya, and radical Islamist jihad all offer examples of the failure of military power as a solution to challenges.[1]  Moreover, the foundations of American power have been cracked by changes in America’s society and economy.  Liberal internationalist elites ignored the human costs of their policies until they inspired a backlash under the last three presidential administrations.  Domestic politics have come to center on divisive identity politics and the expansion of entitlements (including the entitlement to not be taxed) beyond what the traditional economy can support.  In light of these grim facts, America should shift from “hard” (lawyers, guns, and money) power to “soft” power (diplomacy, humanitarianism); America should seek to lead from behind by encouraging allies to assume their responsibilities; and America should do its nation building at home.

Eliot A. Cohen takes sharp issue with this point of view.[2]  “The chances are growing that the United States will find itself using military power chronically and at varying levels of intensity, throughout the early decades of the 21st century.”  Even over the short-run, the United States faces complex challenges: China’s rise as an economic and military power in a key region for American interests; an aggrieved Russia trying to punch above its weigh while it still can; and a transnational radical Islam that will continue to inspire local insurgencies.  These quarrels may have to be resolved in places as different as the high seas, the anarchic peripheries around or between failing states, and even outer space.  So far as he’s concerned, micro-lending isn’t going to cut it.  “Hard” power will have to be at least part of the response.

Cohen is equally persuasive, alarming, and rough-edged in the rest of the book.  Asking whether America possesses the means to use force where needed, Cohen answers with a qualified “Yes.”  His deepest concern lies in the nature and quality of thinking about the use of the instruments of power, rather than about the quality and quantity of those instruments.  One danger springs from what he sees as the capture of strategic thinking by process-oriented bureaucrats.  Plans, working papers, studies, and a deep dive into minutiae introduce rigidity and myopia into thinking about the long-term strategic environment.  In short, dopes have a large voice in the use of military power.  Another concern arises from our public discourse on these issues.  The United States, says Cohen, needs to do some serious thinking and debating on its relationship to the outside world and on how and when to use military force.  Not only must Americans recognize the need for force, they will have to accept that the country is in for a series of long wars with no easy resolution, let alone parades.  In the White House, in Congress, and in the Pentagon, decision-makers are too much concerned to define the “end state” of any military action.  Get in, wreck stuff, get out defined the 1991 and 2003 wars with Iraq.  Neither resolved the basic problem.  Here Cohen could profit from a review of the post-WWII experience.[3]

Left largely unaddressed is the problem of paying for all this power.  It seems presumptuous to believe that Americans will prefer national security to Social Security.

[1] Hence, the Obama administration recognized that the American people opposed any new war in the Middle East.  From this perspective, a deal to slow down Iran’s acquisition of nuclear weapons made a lot of sense.

[2] Eliot A. Cohen, The Big Stick: The Limits of Soft Power and the Necessity of Military Force (2016).

[3] See: https://waroftheworldblog.com/2017/06/29/soldiers-become-governors/