Our politics fails us, so here’s what to do

We can re-engineer the system to create a new political centre, says Charles Wheelan of Dartmouth College and a former candidate for Congress

Strikingly, data from Beyond Conflict, an NGO that promotes reconciliation in conflict areas, show that Americans feel “dehumanised” by the opposing party—a sentiment often associated with political violence—at roughly the same level as Israelis and Palestinians viewed each other during the Gaza War in 2014.

Moreover democracy is being asked to deal with policy challenges that have longer time horizons and more complexity than in the past. So the urgency to fix problems can seem less apparent: it is more like termites in the basement than a collapsing roof. Complexity also opens up a space for demagoguery. Beating back Hitler was no easy feat—but the need to do so was easier to explain than why universal health care requires a health insurance mandate.

Many voters are convinced that politicians are selling them out. They have a point. When I ran for Congress in 2009 as a Democratic candidate in Illinois, I went hat-in-hand to rich donors, as all candidates must. After one meeting with a group of private-equity types, one of them pulled me aside and asked how I felt about the “taxation of carried interest”—an arcane policy that lets major investors pay less tax on their earnings.

I told the fellow that income was income, and that “carried interest” ought to be taxed the same way as everyone else’s paycheck, and not as capital gains.

“That’s too bad,” he said, and walked away. He did not write me a cheque. I lost the race.

.. It did not matter that I was taught by economists at the University of Chicago and took classes from three Nobel Prize winners. Political issues devolve into protecting one’s niche perks. In this case, some of the wealthiest people in the country cared about one issue: whether they could pay a lower tax rate than the people who make their lattes and mow their lawns. More cunning candidates tolerate this to get into office.

The constant need for fundraising also drives partisanship. Emails with subject-lines like “Help me strike a compromise to bring down the deficit” are certain to remain unopened. But drop into an inbox “The Republicans will end Medicare” or “The Democrats are killing babies” and the contributions will flow, helping to make the partisanship ever more toxic.

In this environment, the biggest threat to a candidate is not from an opposition party with a different set of policies but from the extremist end of his or her own party. Hence the rise of the word “primary” as a verb, as in “The Democrats may primary him.” The optimal strategy is ideological purity, even if it means getting nothing done as a legislator.

Now for the really dangerous part: changing demographics have made the electoral college and the Senate increasingly out of sync, as population grows in blue states and wanes in red ones. By 2040 it is possible that roughly 70% of Senate seats will be controlled by 30% of the population. If we are looking for something that can ignite the current partisan tinder, this is it: a prolonged period in which the political will of the majority is thwarted by a minority opposition.

There are lots of ways to do this but the two boldest ideas are to create an independent group of centrist legislators to act as the “king makers” to pass legislation, and to implement something called “ranked-choice” voting that would make it harder for candidates on the political extremes to win election. Consider both in turn.

First, the legislators. It is easy to imagine that a bipartisan group of prominent politicians could step aside from their parties, band together, and create a new movement of the centre. I called this the “fulcrum strategy” in my book “The Centrist Manifesto” in 2013, and it is similar to the recent moves by Labour MPs in Britain, now joined by a few Conservatives.

Just a small handful of defections would go a long way to changing America’s political dynamic. It could provide a pragmatic center of gravity, restore a shared political narrative, rebuild the connective tissue between the parties, and place a healthy check on the Trump administration and whoever comes after, in a way that is less partisan than the Democrats today.

Could it happen? Absolutely. Here is what Jeff Flake, a former Republican senator from Arizona said at a conference this month at Harvard’s Kennedy School of Government: “With three or four Rs and three or four Dems, if they come together now, or just about any time—the Senate rarely has more than a three-, four-, five- or six-person majority on either side—you could really change that place. You could create a completely different power structure. And that would be very healthy right now.”

Joel Searby, a political consultant working to rebuild the centre ground of American politics, says there is “high interest” in doing something like this. Mr Searby has met with chiefs of staff for a handful of senators, both Republicans and Democrats, to pitch the fulcrum idea. “They’re taking meetings with me in their Senate offices, and they know exactly what I’m there to talk about,” he says.

Moreover the Senate just got a new member who is less beholden to the political establishment than most: Mitt Romney, the Republican presidential candidate in 2012 who is also a former governor of Massachusetts, one of the most liberal states in the country. He has been a critic of the president from his own party. Will Mr Romney be the guy to change American politics forever? Or could it be the senator for Maine, Susan Collins? Or West Virginia’s Joe Manchin, a Democrat in a red state? It will only take a few.

The same fulcrum strategy could work at the state level. For all the talk of “red” and “blue” states, the fact is that many state legislatures are as narrowly divided as the Senate, meaning that a mere handful of centrists could band together to restore sanity.

In fact, in Alaska this just happened. After the mid-term election in 2018, a single Republican lawmaker refused to be the 21st vote that would give his party control of the 40-person legislature. Instead, he negotiated a governing coalition of eight Republicans, 15 Democrats and two independents. Committee chairs will be shared across parties and there is an independent speaker of the house.

The public seems receptive to this. After all, the two most popular governors are Republicans in blue states: Larry Hogan in Maryland and Charlie Baker in Massachusetts. This suggests that there are politicians able to cross the partisan divide and that voters will embrace them.

Politics needs to evolve with the times like everything else. The Republican Party emerged to deal with the thorny issue of slavery. Emmanuel Macron built a new party in France and captured a parliamentary majority. If economists can count almost 5,000 breakfast cereals in America, why should its citizens settle for just two political parties?

Precedents exist, such as Israel’s centrist Yesh Atid party that emerged in 2012. There are also examples of tiny factions that exert outsized influence, such as small, religious parties in Israel and Japan. A centrist faction can play the same role in America.

Then there is the issue of voting. There is a powerful change that would be a force for moderation: replace the primary system with a “top four, ranked choice” voting system. Yes, it needs a better name. But it’s the best way to hold elections with multiple candidates.

It works like this: In the first round of voting, the four top vote-getters advance. In the second round, voters rank those four candidates.

If no candidate wins an outright majority, then the candidate with the fewest votes is eliminated. Those who voted for that candidate get their second choice instead. And this process of counting the next-best-candidate continues until one person gets a majority.

This system has three huge advantages. First, it minimises partisanship. Candidates would no longer compete to attract support from the most ideological members of their party but from all voters, which would have a moderating influence.

Second, this would create space for new political competition since independents and third parties would no longer present a “spoiler problem”. For example, Ralph Nader would have been eliminated in 2000 after the first round; most of his votes would probably have gone to Al Gore, who then would have become president.

Third, ranked-choice voting also creates an incentive for candidates to behave more civilly because it is important to be many voters’ “second choice”. Maligning other candidates—and all the other nasty tactics of modern elections—would carry a higher price.

.. The political landscape could change quickly. Reforms like the “fulcrum strategy” and “ranked voting” will make it easier for independents and members of new parties to get elected. Public support for both parties is in secular decline. And much of the partisanship is negative partisanship, meaning that party identification is driven mostly by loathing for the other side. A solid majority of Americans say that the country needs a third major political party.

.. Indeed, the data from Beyond Conflict found that voters believe that members of the other party think worse of them than they actually do. It turns out that we have not dehumanised each other to the same degree as the Palestinians and the Israelis; it only feels that way.

.. There are four faces on America’s Mount Rushmore monument: Washington, Jefferson, Lincoln, and Theodore Roosevelt. With democracy under siege, it is worth thinking about each of them.

George Washington was an independent and warned about political “factions” in his farewell address. Thomas Jefferson said the greatest evil was “a Division of the Republic into two great Parties.” Abraham Lincoln was part of the new Republican Party that arose when the two extant parties could not manage the issue of slavery. Teddy Roosevelt made a third run for president with his own “Bull Moose Party.”

What the four leaders carved in stone share is an unease with partisanship, a willingness to challenge political orthodoxy, and an unwavering belief in democracy. Those are the right principles to bear in mind as we look to strengthen the foundations of our system.

Kushner’s Business Got Loans From Companies After White House Meetings

Apollo, the private equity firm, and Citigroup made
large loans last year to the family real estate business
of Jared Kushner, President Trump’s senior adviser.

.. Even by the standards of Apollo, one of the world’s largest private equity firms, the previously unreported transaction with the Kushners was a big deal: It was triple the size of the average property loan made by Apollo’s real estate lending arm, securities filings show.
.. It was one of the largest loans Kushner Companies received last year. An even larger loan came from Citigroup
.. There is little precedent for a top White House official meeting with executives of companies as they contemplate sizable loans to his business, say government ethics experts.
.. “This is exactly why senior government officials, for as long back as I have any experience, don’t maintain any active outside business interests,”
.. Mr. Kushner steers American policy in the Middle East, for example, but his family company continues to do deals with Israeli investors.
.. Mr. Kushner’s firm has sought investments from the Chinese insurer Anbang and from the former prime minister of Qatar.
.. “Why does Jared have to take the meeting?” he asked. “Is there not somebody else who doesn’t have these financial entanglements who can brainstorm freely with these folks?”
.. All of the executives who met with Mr. Kushner have lots to gain or lose in Washington.
Apollo has sought ways to benefit from the White House’s possible infrastructure plan. And its executives, including Mr. Harris, had tens of millions of dollars personally at stake in the tax overhaul that was making its way through Washington last year.

Citigroup, one of the country’s largest banks, is heavily regulated by federal agencies and, like other financial companies, is trying to get the government to relax its oversight of the industry.

.. he is not required to disclose the lifeblood of any real estate firm’s business: its lenders and outside investors.

.. Mr. Harris, a co-owner of the Philadelphia 76ers and the New Jersey Devils

.. Early last year, the White House enlisted Mr. Harris and other executives to advise the administration on infrastructure policy.

.. One of the largest investors in Apollo’s real estate trust is the Qatari government’s investment fund, the Qatar Investment Authority.

.. Mr. Kushner’s firm previously sought a $500 million investment from the former head of that Qatari fund for its headquarters at 666 Fifth Avenue in Manhattan.

.. Shortly after Kushner Companies received the loan from Apollo, the private equity firm emerged as a beneficiary of the tax cut package that the White House championed. Mr. Trump backed down from his earlier pledge to close a loophole that permits private equity managers to pay taxes on the bulk of their income at rates that are roughly half of ordinary income tax rates. The tax law left the loophole largely intact.

The stench of Trump’s self-dealing

The political system is rigged for the richest insiders in America.

When we talk about the insider, who are we talking about? It’s the comfortable politician only looking out for his own interest. It is the lobbyist who knows how to put that perfect loophole in every single bill to get richer and richer and richer at your expense.

The richest Americans are paying nothing, and it is ridiculous. These guys shift paper around, and they get lucky. These hedge-fund guys are getting away with murder, when you have one who is making $200 million a year and paying very low taxes. It’s not fair. And it tells people a lot. The middle class is getting absolutely destroyed. This country won’t have a middle class soon. It’s got to end.

.. What fools Trump made of those Midwestern voters who wanted the reality star to go after Washington and New York elites. As “Too Big to Fail” author Andrew Ross Sorkin reported this week, “If you’re a billionaire with your own company and are happy to use your private jet so you can ‘commute’ from a low-tax state, the plan is a godsend. . . .
.. Those rich insiders whom Trump walloped on his way to the White House will get more than 80 percent of this tax plan’s benefits at the end of a decade.
.. such a massive giveaway to the very hedge-fund managers and real estate executives he promised as a candidate to confront only adds to the stench of self-dealing that engulfs all things Trump. Like autocrats across the world, the 45th American president has perfected the art of the self-deal... There will be no justification for having thrown on an additional $1.5 trillion to our existing $20 trillion debt — at a time when unemployment was low, consumer confidence was high and Wall Street was setting records by the day.

.. It should be painfully obvious to a first-year economics student that there is no rational reason to pass massive tax breaks for billionaires when the economy is humming along. The only justification can be political.

.. Trump was right to say then that the political system is rigged for the richest of Americans. Unfortunately, it is now Trump’s working-class supporters who will pay the highest price for believing any promise that tumbled out of the mouth of the phony plutocratic populist.

 

The Myth Of Trump’s Economic Populism, As Proved By The Tax Bill

“Trumpian populism remains a tantalizing promise for people who are interested in it.”

Olsen expected the tax plan to include some of Trump’s populist campaign promises — that the rich would pay more, the forgotten working class would pay less, and special interest loopholes like the carried-interest provision for hedge-fund managers would be gone.

But the tax bill ended up instead being traditionally Republican in its focus on cutting taxes for the well-to-do but barely touching the working class and not helping the middle class to a significant degree.

.. “That’s not what Trump promised,” Olsen said. “And it’s not what Trump’s voters thought they were getting.”

Whatever happened to Ivanka Trump’s child care tax credit?

One of the biggest disappointments for conservatives who believed that Trump could have offered a new, more reform-minded populist economics was the failure of the expanded child care tax credit offered by Republican Sens. Mike Lee and Marco Rubio.

It was an actual populist idea, geared to the working class, because it was refundable against payroll taxes. But not only did Republican leaders oppose it, they made sure it failed by requiring it to get 60 votes, unlike other amendments.

.. The tax bill might not be the kind of populist piece of legislation Trump promised during the campaign, but it does have a lot in it to make conservatives happy. Obamacare is unraveled; there are more tax breaks for people who home-school their kids or send them to religious schools; 

.. Maybe the most important thing Trump offers his supporters isn’t economic policy or any policy at all — it’s his racially charged Twitter feed and the cultural grievances it directs at immigrants, Muslims and millionaire black athletes.

Sure, Trump’s followers like the idea of having fewer tax brackets, said conservative Ben Domenech, publisher of TheFederalist.com, but, “What gets them riled up and active is the embrace of the culture-war issues — that Trump has shown himself perfectly happy to fight in a way that Republicans in a lot of other positions have been unwilling to traditionally.”

His tax bill is much more tilted to the wealthy than the tax bills of Ronald Reagan or George W. Bush. And his white-identity politics is much more raw and more central to his persona.

It’s as if the Chamber of Commerce, Wall Street and the wealthy get the policy, while Trump’s blue-collar base gets the Twitter feed.

 

 

Who Is Anthony Scaramucci?

The Wall Street financier and former Obama donor once called then-candidate Trump “a hack politician,” a big-mouthed “bully,” and “an inherited money dude from Queens County” and backed two other Republican presidential contenders, Scott Walker and Jeb Bush, before embracing Trump as the party’s nominee.

.. Nearly two years later, Scaramucci, 52, is one of Trump’s most aggressive television surrogates

.. After a 90-minute meeting with the candidate at Trump Tower in June 2016, Scaramucci was fully onboard and soon praised Trump as “a results-oriented entrepreneur capable of delivering bipartisan solutions to common-sense problems.”

..  over the years he’s ably displayed his ability to communicate on television—a skill that Trump holds in high regard. The other attitudes the president values most are loyalty and a willingness to fight

.. the president was particularly impressed with Scaramucci’s success in winning a retraction from CNN after the network reported he was under Senate investigation for links to a Russian bank.

.. the president was particularly impressed with Scaramucci’s success in winning a retraction from CNN after the network reported he was under Senate investigation for links to a Russian bank.

  • the business-first ethos of the Wall Street veterans in the White House while clashing with
  • GOP stalwarts like Priebus and Sean Spicer

.. he was a fan of Hillary Clinton before she ran for president last year.

.. Scaramucci was angry that Trump had called for a tax increase on hedge fund managers. “He’s a hack politician,” Scaramucci began. He continued: