How We Stopped Investing in the Future: A Florida Case Study

In June 2009, ten Florida Congressmen sent a letter to the Department of Transportation, requesting over $2 billion from the federal government. They wanted to build a high-speed rail line, shuttling passengers from Tampa to Orlando and eventually Miami in only two hours. The money was supposed to come from the American Recovery and Reinvestment Act, the $787 billion “stimulus” bill that newly-elected President Barack Obama signed in February of that year.

Of the ten Florida Congressmen, three were Republicans, and all three had voted against the stimulus: Lincoln Diaz-Balart, Mario Diaz-Balart, and Adam Putnam.

This kind of about-face wasn’t unusual. Many Republicans were begging for a piece of the stimulus after they had tried to kill it in Congress. Even party leaders like Paul Ryan and Eric Cantor got in on the action.

John Boehner defended this contradiction by saying that the stimulus would fund “shovel-ready projects that will create much-needed jobs.” Only a few months earlier, he had been saying the exact opposite — and relentlessly trashing anyone who dared to disagree with him.

The Tampa-Orlando rail line really did fit Boehner’s definition. It was shovel-ready because almost all the land and permits were already lined up, and according to the U.S. Conference of Mayors, it would create 27,000 jobs.

Moreover, it was good fiscal policy. According to two separate reports, the project would produce an annual surplus of $31 million to $45 million by 2026 — and that didn’t include the much more profitable connection to Miami that was likely to follow.

And it was good environmental policy. High-speed rail emits far less greenhouse gas than cars, especially in densely populated regions like central and southeastern Florida, which is why overflowing cities in China, Europe, and Japan have surged so far ahead of us in this vehicle of the future. It saves time, money, and pollution. Unsurprisingly, it’s very popular.

Fifty years ago, this would have been a no-brainer. In the 1950s and the 1960s, politicians were dedicated to investing in new technology and staying one step ahead of the Soviet Union. It’s no coincidence that economic growth was faster and more widespread in those days.

Back then, the federal government spent 2.6 percent of the nation’s income on nonmilitary investment. In the last twenty years, it has averaged 1.8 percent per year. That difference of 0.8 percent may not seem like a lot, but it adds up to trillions and trillions of dollars that could have gone into research and development, education, and new infrastructure — and, if previous investments are any indication, would have yielded benefits many times higher than the costs.

As economist Eugene Steuerle put it, “We have a budget for a declining nation.”

On January 28, 2010, the White House granted Florida’s request. By December, the Department of Transportation had allocated $2.4 billion against a cost of $2.65 billion, and they promised to cover any cost overruns. Had Florida accepted the money, its workers would be laying rail for the Sunshine State bullet train at this very moment.

Instead, Governor Rick Scott rejected the deal, citing cost concerns that didn’t make much sense since the feds were on the hook for any losses.

Thus did the dreams of high-speed rail die in Florida. Thus do many dreams of the future die in the modern political arena.

In Tampa, there’s a street called Bayshore Boulevard. It’s the longest continuous sidewalk in the world. It’s a beautiful walk, with a balustrade that overlooks the water below. It was built in the 1930s by the Public Works Administration, part of the federal government’s response to the Great Depression. It’s just one of many breathtaking feats of construction that dot this great land of ours, each a reminder that, as Transportation Secretary Ray LaHood said during the high-speed rail fiasco, “We still know how to do big things in this country.”

I’d like to think that’s true. I’d like to think we still care about the future. I’d like to think we can build a better tomorrow. I only wish Governor Scott and his fellow ideologues felt the same way.

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This op-ed was published in today’s South Florida Sun-Sentinel.

We Don’t Have a Government Spending Problem. We Have a Health Care Problem.

Nobody’s happy about the sequester, the government spending cuts that took effect a few days ago, but most people think it was a necessary evil.

Evil? Maybe. Necessary? Absolutely not.

In June 2011, before Congress passed the Budget Control Act, the Congressional Budget Office released its annual “Long-Term Budget Outlook.” This is the best nonpartisan projection we have of what the federal budget would look like without the sequester.

The CBO considered two possibilities.

First, what would the budget look like if Congress did absolutely nothing? The Bush tax cuts would expire as scheduled, Obamacare would take effect, and Medicare payments to doctors would remain at current rates. They called this the “Extended-Baseline Scenario.”

Second, what if Congress stopped all those things from happening? They extended the Bush tax cuts permanently, repealed Obamacare, and raised Medicare’s payment rates for doctors every year. They called this the “Alternative Fiscal Scenario.”

The difference is stunning. In the Extended-Baseline Scenario, the government’s debt never increases. Relative to the size of the economy, it’s the same in 2033 as it was in 2013. Meanwhile, in the Alternative Fiscal Scenario, it skyrockets. By 2033, it’s double what it was in 2013.

The Alternative Fiscal Scenario is what scared legislators into passing the Budget Control Act. They decided to slash government spending across-the-board by over $2 trillion over the next decade in order to avoid a massive increase in debt.

But why were they looking at the Alternative Fiscal Scenario? After all, the Extended-Baseline Scenario showed that the debt problem disappeared if Congress simply did nothing. Why didn’t they just…do nothing?

Well, if they did nothing, taxes would go up, and doctors’ payments wouldn’t. The politics speaks for itself.

Instead of doing nothing, Congress made 84 percent of the Bush tax cuts permanent at the beginning of this year, and of course, doctors’ payments continue to rise.

And that’s why they needed the sequester to rein in rising debt.

But that doesn’t explain why the sequester was an across-the-board cut in government spending when, according to the CBO, we don’t have an across-the-board spending problem.

Let’s look at the 2011 Budget Outlook one more time.

In the Alternative Fiscal Scenario, it’s true that spending increases dramatically — from 24.1 percent of our nation’s income in 2011 to 33.9 percent in 2035. But it’s not across-the-board. In fact, if you exclude health care programs and interest payments, federal spending actually decreases from 17.1 percent in 2011 to 14.6 percent in 2035!

In other words, we don’t have a spending problem. We have a health care problem!

If we had the health care costs of the average industrialized country – which has a higher life expectancy than us, by the way – we’d save over $2.5 trillion over the next decade, far more than the sequester.

And yet, looking at these numbers, our legislators decided to slash government programs across-the-board, the vast majority of which nothing to do with the problem. They chose to kick 70,000 kids out of Head Start; eliminate funding for 1.2 million disadvantaged students; serve 4 million fewer Meals on Wheels; eliminate nutrition assistance for 600,000 women and children; kick 120,000 families out of low-income housing; kick 100,000 homeless people out of shelters; conduct 2,100 fewer food inspections; conduct 1,200 fewer workplace safety inspections; treat 373,000 fewer mentally ill Americans; employ 1,000 fewer federal law enforcement agents; prosecute 1,000 fewer criminal cases; issue 1,000 fewer science research grants; guarantee $540 million less in loans to small businesses; conduct 424,000 fewer HIV tests; and treat 7,400 fewer AIDS patients. And that’s only this year, when less than 10 percent of the sequester will kick in.

All because they didn’t want to deal with the real problem.

Last month, the CBO published a new Budget Outlook. Including the effects of the sequester, it shows debt declining for the next few years, and then in 2019 it starts to rise again. That’s the dirty little secret that Congress won’t tell you: Even $2 trillion in spending cuts can’t stop the rise in debt…because spending simply isn’t the problem.

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This op-ed was published in today’s South Florida Sun-Sentinel.

What George Washington Taught Us in His Darkest Hour

Everyone has heard the story of George Washington‘s nighttime crossing of the Delaware River on a frosty Christmas morning in 1776, but few remember his equally treacherous nighttime march to Germantown only ten months later.

It began on the evening of October 3, 1777. The Continental Army was camped out at Pennypacker’s Mill, about thirty-five miles northwest of Philadelphia, after a disastrous defeat at the Battle of Brandywine Creek.

All year, Washington’s reputation had been growing after the two surprise victories — at the Battles of Trenton and Princeton — that followed his surreptitious crossing of the Delaware. “Had he lived in the days of idolatry,” wrote the Pennsylvania Journal, he would have “been worshiped as a god.” To which Frederick the Great added that Washington’s back-to-back victories “were the most brilliant of any recorded in the annals of military achievements.”

But all that was in the past and nearly forgotten already. On September 11, the British and their German mercenaries had crossed Brandywine Creek, outflanked Washington’s men, and dealt the Americans a horrific blow, killing 200 and capturing another 400.

Almost immediately, Washington’s admirers turned against him. Thomas Jefferson ridiculed his leadership as “too slow, even indolent, much too weak, and…not without his portion of vanity and presumption.” John Adams prayed for “one great soul” to lead them out of this mess.

Convening with his generals at Pennypacker’s Mill, Washington decided to launch an ambitious strike in Germantown “to remind the English that an American army still existed.” He divided 10,000 soldiers into four columns, carefully coordinated to attack the enemy at all angles simultaneously.

The maneuver took a bad turn at dawn when one of the columns encountered a British regiment before reaching their destination. They engaged in a bloody skirmish and wasted ammunition before the British retreated.

Next, Washington found himself in an unwelcome (and unwise) diversion when his column came across a stone country house filled with British soldiers and, instead of sending most of his men around the house as planned, stalled the entire maneuver by trying to overtake it — only to find that it was a nearly impenetrable fortress.

After sapping valuable time in vain, Washington pressed on. By the time he got to Germantown, his careful coordination was dashed, and the Americans found themselves in a confusing firefight amid fog and smoke. By the end of the day, they had suffered twice as many fatalities as the British. The Battle of Germantown was a resounding loss.

While Washington was regrouping, his rival General Horatio Gates was winning an overwhelming victory at the Battle of Saratoga, capturing 5,000 enemy soldiers. That fall, a campaign spread through Congress to replace Washington with Gates. Meanwhile, Gates, believing his own hype, resisted Washington’s orders to send some of his troops to help Washington defend the Delaware.

The tension became so unbearable that Washington threatened to resign when he received word that Congress was planning to promote a brigadier who criticized Washington’s leadership as “miserable indeed.”

But Congress had bigger plans in mind. They created a Board of War to oversee Washington, a not-so-subtle hint that they no longer trusted him to run his own army, and as its first president they named none other than Horatio Gates.

While Washington was fighting on the political front to keep his job, his men were fighting on the physical front to stay alive, for that was the infamous winter they spent at Valley Forge. The conditions were so harsh that over 2,000 men died.

“The General is well but much worn with fatigue and anxiety,” wrote Martha Washington of her husband. “I never knew him to be so anxious as now.”

This portrait of Washington — defeated repeatedly, hounded by critics, tired, and anxious — is the opposite of the legend that we usually celebrate today, on his birthday, but it’s the key to understanding his monumental achievement. It was from this depth of despair, this dire moment of complete failure, that Washington rallied his pitiful band of amateur soldiers, inspiring awesome loyalty and uncommon courage to defeat the mighty British empire.

What set Washington apart from his peers wasn’t his ability to conquer — he actually lost more battles than he won — but rather his ability to survive, to persevere, to stand tall in the face of every setback.

Greatness, he taught us, lies not in the ease with which we succeed but rather the fortitude with which we fail — and the gusto with which we get up, dust ourselves off, and try again. And again. And again. Until we get it right.

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An abbreviated version of this op-ed was published in today’s South Florida Sun-Sentinel.

A Lesson in Power, Courtesy of the Bangladesh Garment Industry

The bodies have been placed in coffins. The mourners have draped themselves in black.

It was one of the deadliest industrial accidents in history. Over 100 people died in that clothing factory.

It made headline news all across the world. Surely you’ve read about it by now.

When they tried to escape, the factory workers found the doors locked. It was standard practice at the sweatshop. The managers didn’t want the workers to take unauthorized breaks.

So they burned alive.

Louis Waldman happened to be nearby when the fire started. He followed the sound of pandemonium until he reached the blazing factory. He told the New York Times what he saw: “Horrified and helpless, the crowds — I among them — looked up at the burning building, saw girl after girl appear at the reddened windows, pause for a terrified moment, and then leap to the pavement below, to land as mangled, bloody pulp. This went on for what seemed a ghastly eternity. Occasionally a girl who had hesitated too long was licked by pursuing flames and, screaming with clothing and hair ablaze, plunged like a living torch to the street.”

You probably think I’m talking about the garment factory in Bangladesh, where 112 people died last weekend. But I’m not.

I’m talking about the Triangle Shirtwaist Factory in Greenwich Village, New York.

The date was March 25, 1911. One hundred forty-six people died that day.

New York City wouldn’t experience another disaster of that magnitude for another ninety years. That date would be September 11, 2001.

It’s hard to believe that such an atrocity happened right here in our own backyard. We’ve become so accustomed to workplace regulations and civil negotiations that we’ve forgotten what factory life was like before the Great Depression.

Back then, labor unions were even rarer than they are today. Most strikes ended at the barrel of a gun. The company would call the governor, and the state militia would send soldiers to force the strikers back to work. It wouldn’t be uncommon for them to kill and imprison dozens who stood in their way.

The history of our great nation is littered with epic labor battles. Hundreds, maybe thousands, of Americans died defending their right to negotiate as one union rather than as helpless individuals.

It doesn’t take a PhD in economics to see that an individual worker doesn’t stand a chance of a fair negotiation with a $237 billion corporation like Wal-Mart, especially when unemployment is high. The corporation has so many applicants to choose from. It has all the power.

It’s that kind of power that allowed the Triangle Shirtwaist Factory to lock the doors and trap its workers.

That sort of thing doesn’t happen in America anymore, but it’s not because corporations had a change of heart. It’s because the Great Depression motivated Congress to stand behind workers who wish to form labor unions. It’s because the federal government stopped sending soldiers and started sending election supervisors. It’s because they investigated factory conditions and created laws to prevent the loss of innocent life.

This is what our government does. It’s what sets us apart from the destitute places of the world, where good, hard-working people have no protection from the warlords and factory bosses.

In the depths of the Great Depression, Americans watched the Congressional investigation of Wall Street with horror, as the wretched abuses of unregulated banks came to light. The great columnist Walter Lippmann summed up the national mood when he wrote, “No set of men, however honorable they may be, and however good their traditions, can be trusted with so much private power.”

Something to remember when the One Percent refuses to pay the taxes they paid in the booming 1990s, or when they blame the demise of the Twinkie on unions who took pay cuts while executive compensation was soaring.

The 99 Percent isn’t asking for a lot. An hourly wage that doesn’t leave their family in poverty would be nice. A guarantee that Social Security and Medicare will still be there when it’s their turn to retire. Maybe a few public schools that aren’t crumbling to the ground.

You know, the things that separate us from the Bangladesh’s of the world.

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This op-ed was published in today’s South Florida Sun-Sentinel.

The Great “Fiscal Responsibility” Hoax

You’re probably worried about the federal budget deficit. Seven out of every ten American voters say the deficit plays a “very important” role in deciding whom to vote for.

And you probably think that Mitt Romney is the candidate who would do a better job of reducing the deficit. In this category, voters favor him over Obama, 51 to 37. That’s a big gap, considering the national polls are a statistical tie.

Even the South Florida Sun-Sentinel believes the hype. One of the reasons they gave for endorsing Romney was to “exercise…fiscal discipline” and “get government spending under control.”

They’ve been had. You all have.

The belief that Republicans are more fiscally conservative than Democrats is an old one. It’s so deeply ingrained in the American myth that it’s hard to know where it started. But it’s completely, factually, undeniably wrong — and has been so for awhile.

In their book Presimetrics: What the Facts Tell Us About How the Presidents Measure Up On the Issues We Care About, economist Mike Kimel and journalist Michael E. Kanell calculate the change in government spending under every president from Dwight Eisenhower to George W. Bush.

They found that government spending, relative to the size of the economy, increased much faster under Republican administrations than under Democratic ones. George W. Bush presided over a greater increase in government spending than any president since Lyndon Johnson, and George H.W. Bush wasn’t far behind. Bill Clinton, in contrast, was the only president since Eisenhower to actually reduce government spending. Even Reagan didn’t do that.

Since Mitt Romney has promised to increase the Pentagon budget by $2 trillion over the next decade, I find it hard to believe that he would be any different from his Republican forebears.

Kimel and Kanell also report how the budget deficit fared under each president. Here’s where the “fiscal responsibility” myth really falls apart: The Republicans increased the deficit, while the Democrats reduced it!

The least “fiscally responsible” administrations were Bush Jr., Bush Sr., Ford, and Nixon. The most deficit reduction came under Clinton and — believe it or not — Jimmy Carter.

In fact, the only presidents in this group who added to our national debt burden were Reagan and the two Bush’s. Everyone else presided over a decline in government debt, relative to the size of the economy.

For goodness sake, they said so straight to your face.

“I am not worried about the deficit,” said Reagan. “It is big enough to take care of itself.”

“Deficits don’t matter,” said Dick Cheney.

So, when economists complain over and over and over that Romney’s math doesn’t add up, they’re not just making an academic point. When Obama asks him how he’d pay for a $5 trillion tax cut, the fact that he can’t answer — the fact that every fact-checker in the known universe has said that his tax plan will blow up the budget deficit — is a flashing red warning sign that he will do what Republican presidents have been doing for half a century.

Which brings me to his opponent, Barack Obama.

On January 7, 2009, two weeks before Obama was sworn into office, the Congressional Budget Office reported that George W. Bush was bequeathing a budget deficit of $1.2 trillion. This year, the deficit is $1.3 trillion.

In other words, 92 percent of the deficit that everyone blames on Obama was actually inherited from his predecessor.

Here are the facts: In Reagan’s first term, government spending grew 8.7 percent per year. In his second term, it grew 4.9 percent per year. Under Bush Sr., 5.4 percent per year. Under Clinton’s two terms, 3.2 percent and 3.9 percent. Under Bush Jr., 7.3 percent and 8.1 percent.

Got all those numbers? Okay. Brace yourself. Under Obama: 1.4 percent.

Our current budget deficit has nothing to do with out-of-control Democratic spending and everything to do with a massive recession, tax cuts, two wars, and a scare campaign that Republicans have been successfully waging for decades to cover up their serial fiscal irresponsibility. Whether you let them fool you again is entirely up to you.

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This op-ed was published in today’s South Florida Sun-Sentinel.