Monday, October 23, 2017

Sustaining The Unsustainable

       As if the disastrous shredding of the Republican promise to repeal and replace Obamacare weren't an embarrassing enough exposure of the GOP's inability to bring its rhetoric into line with reality, we now have the spectacle of a tax cut promised by President
Rounds And Thune
Not A Bit Worried About Federal Debt
Trump that is likely to jack up the very deficits that South Dakota's U.S. senators have been vowing to contain for years. 
  Our senior Senator John Thune preaches in his website that "for too long responsible budgeting has not been practiced in Washington" and that "our country is on an unsustainable fiscal path."  Not to be out-evangelized, junior Senator Mike Rounds said in his website last August that "with our debt spiraling out of control . . . it's clear that federal spending at current levels is unsustainable."

     So just how did Thune and Rounds mount their crusades against unsustainability?   They ignored them and voted last week to approve a budget of about $4.1 trillion in spending with revenues anticipated at $3.65 trillion, leaving a deficit of $440 billion through October, 2018.  What's more, in the byzantine process of Senate deliberations, this budget sets the stage for deficits totalling $1.5 trillion over the next 10 years.  So much for unsustainability.
     Naturally, there's a Republican explanation for this gush of red ink our Senators support.  According to the partisan line, this budget sustains the "unsustainable" in order to smooth the way for the tax reforms that President Trump has been pushing since inauguration day.  The GOP line is that the economic growth spurred by Trump's tax cuts will not be budget busters at all.  Powerful economic growth will generate tax revenues that themselves are strong enough to cut into the federal debt and bring it more in line with historic levels. Based on the experiences of the last half-century, this is bunk.  I have yet to see any data that support that argument.  George W. Bush's tax cuts were followed by the 4th largest national debt increase incurred during a president's tenureReagan's often-ballyhooed tax cuts were followed by a tripling of the national debt during his years in office.    
      Bringing that theory down to a more relateable level, the recent Kansas tax-cutting experiment instigated by Governor Sam Brownback has been a disaster, leading to a $900 million deficit. The Washington Times last summer called Brownback's effort a "failed tax experiment" that should be heeded by Republicans at the national level.  We South Dakotans can take note of the fact that we don't even have an income tax, which according to Republican dogma should make our state a wonderland of investment and economic growth  As we've seen, of course, that's a pipe dream.  In the 5 year period that ended in 2016, South Dakota's per capita GDP growth was a fraction of 1%, compared to a national growth rate of more than 6%.  Last June the financial data service Wallethub ranked South Dakota's income taxless economy an underwhelming #32 in the country.  Much as tax relief would be nice for me and my peers in South Dakota's business community, on the basis of facts and history, I'd like to know how Senators Rounds and Thune can keep pushing the line that tax cuts will make up for the federal deficits they support    
     
    

Tuesday, October 17, 2017

South Dakota's Motto "Under God The People Rule" Is About To Get Tested . . . Again

     Talk about the power of a popular backlash.  Tommorow's gathering in Pierre is a serious statement about the will of a lot of people in South Dakota, more than 50 thousand of whom (me
They Will.
included) signed a petition intended to bring our state's government into compliance with the state motto "Under God The People Rule."  The petition will put the "Voter Protection and Anti-Corruption Amendment" to the South Dakota Constitution on next November's ballot, where I believe it has a great chance of passage.  

    This initiative is a direct response to the way our state's legislative and executive branches dismantled Initiated Measure 22 during last Winter's session.  IM-22 was a complicated amalgam of draconian restrictions on government and electoral processes that included a provision for taxpayer funding using a system dubbed "democracy credits" for candidates seeking office.  Though I was generally supportive of its goals for oversight and transparency, the taxpayer-financing  of elections turned me off and I opposed the measure, which nonetheless passed with a 52-48 majority.  
      The political backlash in Pierre was swift and decisive.  Within weeks of IM-22's passage, Governor Daugaard disdained the new law, calling it "irresponsible" and a "bad law."  He also condescendingly scolded voters by claiming they were "misled" and "deceived."  As expected, the law itself was immediately challenged on Constitutional grounds and began moving through the courts, where it was headed for judgement by the state's Supreme Court.  In the meantime, state legislators and the Governor crafted a series of replacement acts while repealing IM-22 altogether via House Bill 1069. Neither the state's courts nor a majority of South Dakota voters were considered to be a relevant part of the process.
    The subsequent pushback by voters is one that I supported right away.  Like plenty of South Dakotans I was dismayed by the cavalier and presumptuous manner in which our elected officials blew off  the will of the people and destroyed the measure before it was given its due process in court. "Under God The People Rule" was rendered a mockery and the resulting outrage should come as no surprise to our political class, as SD's legislative and executive branches now have to contend with a powerful, new replacement for IM-22.
    This "updated" version wisely dropped the deal-killing "democracy credits" plan for taxpayer financing that turned off a lot of potential supporters.  Also, unlike its predecessor this amendment is much simpler and focused on fewer concepts, possibly the most important of which is that it stops elected officials from overturning any voter-approved laws without going back to the voters themselves for permission.  I also like that the proposal creates an independent citizen's ethics commission, not the state agency (I mean, the state monitoring itself?  Come on.) that the legislature set up when it revoked IM-22. It also flat-out bans gifts (including food, beverages and alcohol) from lobbyists to elected officials.  A provision banning "foreign" money from our elections could stand some explanation, but coming discussions and debates will clarify it.  You can go to represent.us to read the full amendment.  Nobody, most notably our elected officials, will be "misled" or "deceived." Some might even be enlightened.

Friday, October 13, 2017

A Q For SD Pubs Running For Congress: Your Thoughts, Please?

     It's been many months since Shantel Krebs and Dusty Johnson announced that they'd be running for the Republican nomination for Congress next year.  So far it looks like they've been going through all the standard motions, but apparently neither of them feels the need
Krebs
Trump Toady or Independent Thinker?
to be burdened with positions on issues that matter to us South Dakotans. As you might expect their respective websites don't reveal much in the way of specifics, so I've been looking elsewhere for their thoughts on policy.                                                                                                                         
Upon googling, it looks like the closest Krebs has come is to make a broad proclamation to the Rapid City Journal last month, telling the paper that when Trump was elected she was "all in," and that her motivating force is that she "wants to help him deliver results."  Her "logo" (doesn't Krebs mean "slogan?"), she explains, is "Get it done."  I admire that she rejects procrastination, but I also wonder what the "it" is that she's determined to "get done."  If "it" references her complete devotion and dedication to Trump and his policies, I wouldn't give Krebs much consideration as a congressional  representative.  "All in" is pretty inclusive, which sounds to me like she's determined to be a rubber stamp for the administration.  If elected would she have the mettle to assert some independence when White House policies may not be the best for South Dakota?  For example, is she "all in" with Trump's hostility toward NAFTA?  He's on the record as calling it the "worst trade deal" ever approved by the United States, yet the benefits to farm states since the treaty's inception a quarter-century ago are self-evidently positive, as our senior Senator John Thune noted in a radio interview recently.  
     My guess is that Krebs will be quick to reject the notion that she'd be a rubber stamp for the White House.  I mean, who on earth would go on record as being a toady?  But by doing so she would be repudiating her "all in" commitment to the President.  Her website provides a nice bio and platitudes along the lines of making Washington "responsive" to the needs of our state, but doesn't touch specifics. So what is it, Ms. Krebs, are you all in with Trump or are you willing to consider issues on their merits and make decisions based on what you think is best for South Dakota?
     
Dusty Johnson, whom I've met and like, is also running a campaign that's long on self-promotion and short on policy substance.  He says he's running for Congress because he's an "optimist."   That's about as good a reason as any, I suppose, but given his background as a Commissioner on South Dakota's Public Utilities Commission, I'd expect him to say much about national energy policy and how it would affect South Dakota.  For example, last week's repeal of the "Clean Power Plan" by the Trump administration could have significant effects on ethanol production, which depends on South Dakota's largest crop, corn, as its feedstock.  Does Johnson have a position on this?  I did find a comment about healthcare in the Rapid City Journal last July--Johnson thinks more control should go to the states, a not terribly earth-shaking position by a Republican.  He could have given us a clue about how he stands on the measures to achieve that end
Johnson
Optimist, But What About Policy? 
that have so far failed in the Republican-dominated Congress.  

     That programmatic response on healthcare is probably a signal that Johnson will do as expected by the GOP, but considering his long-standing status as both an appointed and elected official, I'd love to know more.  In particular, given his experience as a state government insider, his opinion of how South Dakota could successfully run a federally funded program after our state's abysmal track record with EB-5 and Gear Up needs some explanation.  
     As with Shantel Krebs, Dusty Johnson is politically pragmatic enough to know that avoiding serious policy commitments is a way to stay out of trouble on the campaign trail.  But given what seem to be equal measures of affability, experience and media appeal, it would be nice if they could find a way to differentiate themselves on the basis of something other than gender.  

Tuesday, October 10, 2017

NAFTA Could Use An Update, Not A Trump-Initiated Wrecking Ball

     President Trump's long-standing beef with the North American Free Trade Agreement (NAFTA) will get aired out this week as the 4th round of scheduled renegotiationsof the
Revise And Modernize
Don't Wreck
landmark trade deal begin today, October 11, in Washington.  We South Dakotans, who've been watching our agriculture-driven economy flounder for the last few years (for data wonks, SD's  2017 statewide taxable sales were down almost 2% from a year ago and our 5-year per capita GDP growth was less than 1% compared to a national increase of more than 6%), should be keeping a wary eye on the talks.  Our ag sector doesn't need to take another hit.

     That NAFTA has been a very good deal for South Dakota is self-evident.  On a national scale, the numbers are eye-popping.  In 1993, when NAFTA came into being, the U.S. exported about $9 billion worth of corn and soybeans to Canada and Mexico.  Thanks to NAFTA, that number jumped to nearly $40 billion.  About 30% of U.S. ag sales go to our North American partners, with the top three products being corn, soybeans and pork.  Even one of Trump's most consistent friends in Congress, our Senator John Thune, has weighed in on the importance of NAFTA to the nation's farm sector, telling KSOO radio last Summer that "open markets, lower tariffs and uniform regulation means more money in the pockets of South Dakota farmers, particularly from livestock."  Thune singled out NAFTA as being particularly "positive for South Dakota."  
   And then there's the rest of the country.  Considering that Trump's well-known hatred of NAFTA is hanging over these negotiations, South Dakotans do indeed have every reason for concern about the future of the deal.  But  what's interesting is that "the worst trade deal ever signed," as Trump often puts it, has important supporters in parts of the country where the President thinks his protectionist agenda would be most helpful.  A piece last Summer in the Detroit Free Press notes that Michigan would be at risk in a drastically revised or entirely ditched NAFTA.  DFP says that "Michigan has more to lose than any other state" if NAFTA's terms are changed according to Trump's wishes.  Credit scoring giant Fitch Ratings says Michigan would be the most affected state in the country because "its economy is the most interconnected" with our NAFTA partners.  
     As it turns out, the uniformity of regulations and the openness of our markets have created those "interconnected" supply and distribution chains that have helped advance both the ag and industrial sectors of all three trading partners.  A 2016 study from President Trump's alma mater The Wharton School of Business notes that NAFTA-driven advances in the U.S. economy have been steady, if modest, and that job re-distribution, not net job loss,  has been the result of the agreement over the past quarter-century.  A study in the Washington Post last August reinforced that conclusion.  
     Trump's politically shrewd tirades against NAFTA played well in the industrial belt around the Great Lakes, where job losses and shuttered factories affected enough voters to give him the wafer-thin electoral victories that took him to the White House.  But the rest of the country, South Dakota (and now Michigan) in particular, stands to lose much as the President continues to focus on that relatively narrow base of support.
     
     
     
     

Tuesday, October 3, 2017

Constitutional Rights Do Not Equal Constitutional Insanity

   There are Constitutional rights and there are Constitutional absurdities, the latter having been played out during the horror show in Las Vegas last weekend.  Adhering to the rights
A Right
Not A License For Craziness
guaranteed by the country's founding documents doesn't mean extending them to a point somewhere far beyond the reaches of common sense.  For example, the 1st Amendment to the Constitution has some limitations on freedom of speech, most famously its inherently sensible denial of the right to yell "fire!" in a crowded theater when no such emergency exists. 
 
     Why that principle hasn't been applied to the 2nd Amendment seems to me a failure of logic, experience and good judgement.  Having toted and used the most lethal weapons of my generation during my 13-month hitch as a Marine in Vietnam, I'm no stranger to the genre of firearms. Nor am I a stranger to their purposes and value in civilian life. Gun ownership is an embedded part of our lives in this country, a principle that I have no trouble supporting.  I recall a close relative of mine who began carrying a handgun after a woman was raped in the underground parking garage of his upscale condominium. Who can't condone the sense of security that comes with a decision like that?  I also appreciate that a lot of people simply enjoy the sport of shooting, along with the history, the mechanics and the aesthetics of guns and rifles.  And of course there are those who hunt with firearms, a sturdy community of good citizens who also happen to support many of our wildlife conservation programs through their hunting license fees.  They're also damn good for business, as I and my peers in the lodging industry will be quick to affirm.  
     Then along came Las Vegas, which reminds us that a fondness for that guaranteed right to bear arms has occasionally morphed into a bloody and violent freak show.  The Vegas madman Stephen Paddock had an arsenal far above and beyond the needs of any rational gun owner.  News reports say that police found 43 firearms and several thousand rounds of ammunition in searches of his home and the hotel room where he went berserk.  They were all obtained legally and some were apparently modified to make them simulate automatic gunfire.  The crowning absurdity is that all of this was in keeping with laws in the books in Nevada.  
     The framers of the Constitution couldn't possibly have had this in mind when they guaranteed Americans their right to bear arms, but we've gotten to this place and there's no turning back.  Mass killings are impossible to prevent.  Just the same, gun rights can co-exist with gun control that's designed to make things more difficult for determined and deranged people to obtain weapons in the quantities that Paddock possessed.  Constitutional rights are one thing, Constitutionally sanctioned insanity is another.  

Tuesday, September 26, 2017

Can South Dakota Handle The GOP's Healthcare Plan?

     At this point it's a matter of trust.  My native Republican instincts tell me that the latest GOP effort to replace Obamacare (Affordable Care Act, or ACA) is one I could
Probably.
But It'll Resurface.
support.
 Though likely to fail on this try, it’s bound to come up again.  I can certainly understand our Governor Daugaard 
enthusiastically getting behind it.   For one thing, the current bill renders moot South Dakota's stubbornly irrational rejection of Medicaid expansion, an offer under ACA that would provide a couple of billion bucks to our state over the next few years.  Heck, the status quo is such a good deal that then-Governor Mike Pence figured out a way to expand Medicaid into Indiana, making him one of eleven Republican governors who understood the value of insuring a sizable portion of their state populations who make too much to qualify for Medicaid but not enough to afford conventional insurance.  Adding in the economic gains from the rollover of those billions of dollars only reinforces the fiscal sanity of saying yes to expansion built into ACA. 
     Daugaard himself had even come up with a plan to bring it into South Dakota, an effort he abandoned after he apparently was convinced that a Trump administration could easily overturn ACA.  Trump's vision has of course been exposed as a hallucination, but Governor Daugaard is dutifully following up on his responsibilities and political affiliations by giving Republican leadership the attention and lip service it merits.  His Chief of Staff and son-in-law Tony Venhuizen was quick to address the Medicaid expansion funding issue a few days ago, when he told the Mitchell Daily Republic that one of the main reasons Daugaard supports the latest GOP plan is that it brings  "funding parity" between expansion and non-expansion states.  
    This is actually a back-door way of acknowledging what has been obvious for years:  states like South Dakota, stubborn as they've been in their resistance to Medicaid expansion, have really been getting the short-end of the stick when it comes to federal healthcare spending.  But by going along with this concept of federal block granting, South Dakota effectively gains what it has been giving up by disdaining expansion.  Block grant money would amount to a yearly gain of nearly $1 thousand per resident (almost a billion dollars) to South Dakota according to a New York Times analysis.  That would more than make up for the money we've been leaving on the table up to now.
     And, as a business-type who sees the value of money pouring into the state, regardless of whether the source is named Obamacare or Trumpcare, I love the idea.  The only caveat now is the matter of trust that began this missive.  We've seen what's happened to federally-supported and sanctioned programs in this state during the past decade or so, and it hasn't been pretty.  EB-5 and Gear-Up have set pretty poor examples of our current leadership's ability to manage Washington-sanctioned programs.  Before the Daugaard administration gets totally wound up in its enthusiasm for this block grant or the next one that’s likely to be proposed, some assurances that another fiasco won’t materialize are in order. 
     

Tuesday, September 19, 2017

Rapid City (SD) Area Pubs Go Secret

     Last week's "invitation only" gathering organized by seven local Republican state legislators was a bizarre and embarrassing attempt at exclusion and avoidance of reality.  It was also a microcosm of what is probably a growing divide in the GOP on all levels, from local to national.  The seven local Pubs--Senators Haverly, Solano and Partridge and Representatives Johnson, McPherson, Tieszen and Conzet--took it on themselves to hold a public gathering that was limited to 107 invitees, of whom 40 showed up, meant to "hear nonpartisan ideas from local leaders about community and economic development."  In a show of secrecy that would evoke admiring nods from autocratic societies everywhere, organizers wouldn't make the invitation list public, apparently taking it on themselves to covertly pick and choose who among their constituents in this area are capable of delivering nonpartisan ideas about public affairs.  
     I get that the elected officials who staged this exercise in exclusion are (like me, on many an occasion) fed up with legislative time and resources devoted to controversial social issues. Transgender bathroom use and gun rights were singled out in the RCJ article about the meeting, but I have no doubt that other issues, like reproductive and religious rights, were probably considered off limits by organizer Johnson, who told the Journal that "we didn't want those controversial social issues to override the economic and community development issues that we wanted to talk about at this event."  
     Well, doggone those "controversial social issues" anyway.  Imagine the temerity of voters and taxpayers who think they should have a place at the table of an invitation-only gathering of elected officials and their hand-picked constituents.  Just who do those social issue-oriented citizens think they are?  Sarcasm aside, much as I empathize with the organizers of this event, their planning and execution of it are for the birds.  I suppose that this is what you can expect from a party that has split.  Like Republicans everywhere, the local GOP seems to be struggling with a collective identity crisis focused on its commitment to conservative values.  The pragmatists like Johnson and his cohorts just can not insulate themselves against party ideologues (of whom Reps Lynn DiSanto and Taffy Howard were mentioned in the RCJ piece) who are identified with the "social issues" that this meeting sought to avoid. 
     This is a rupture that Republicans have to contend with now that a sizable wing of the party claims its conservative values entitle the government to meddle in the private affairs of Americans, denying rights on the basis of personal behavior.  I don't much care for that segment of the GOP myself, considering that public policy matters of some immense importance need all the time and attention that our elected officials can give to them.  Many of these so-called "social issues" are a distraction, an annoyance and a pain for some of us, but the true believers who support them have their rights.  Specifically excluding them or any voters from a public gathering of elected officials is about as un-American as anything I can think of.  As to limiting invitees to a secret list of supportive voters? How elitist can these Republicans get?  Democracy makes a lot of noise.  Putting your hands over your ears is no way to make it go away.