Im-Politic: The Culture of Failure in Washington

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2016 election, accountability, Beltway, campaign finance reform, D.C., Donald Trump, Ed O'Keefe, Im-Politic, IMF, International Monetary Fund, Jeb Bush, Katie Packer Gage, Marlene Ricketts, Mike Murphy, The Washington Post, Washington

I’ve always loved “Failing your way to the top” as a way to describe how the world of Washington’s intertwined political, policy, and media classes works. Not coincidentally, endless examples of handsomely rewarded incompetence no doubt feed Main Street USA’ strong belief that much of American life is rigged against it. So it’s more than fitting that the last three days alone have provided three more major instances of career Washingtonians getting major issues massively wrong – and surely in no danger of facing any adverse consequences.

The first comes from the Washington Post‘s new first cut at a post-mortem on former Florida Governor Jeb Bush’s spectacular flame-out of a presidential campaign. Many lavishly paid political consultants and fund-raisers must deserve considerable blame, but no one’s been a bigger lightning rod for criticism than Mike Murphy. The veteran Republican operative directed Bush’s Right to Rise “Super-Pac” (political action committee), and therefore reportedly made many of the key tactical mistakes that ultimately doomed Bush.

Post reporter Ed O’Keefe’s account of the disaster is worth your while, so I won’t list all the revealing anecdotes here. But one that’s worth spotlighting is Murphy’s admission that he didn’t detect the huge “anti-establishment wave” that has been sweeping over the American electorate. In fairness to Murphy, this widespread anger probably doomed Bush’s candidacy from the start. At the same time, consultants like Murphy are paid the big bucks (reportedly $14 million) to know this – or figure it out – and develop responses that don’t repeatedly keep flopping – and laughably.

In fact, where’s this guy been for most of the last two years? Prowling the toney haunts of megabucks donors hungrily eyeing their wallets? (Actually, O’Keefe’s article indicates that’s exactly where he’s been.)

So on the one hand, it will be interesting to see how long it’s going to take Murphy to get his next contract. On the other, as one wag on Twitter cracked, given his reported payday, he may not need one. The more so since just a few years earlier, Murphy also cashed in big by steering eBay founder Meg Whitman’s $177 million campaign for governor of California to defeat at the hands of Jerry Brown.

Another long-time Beltway denizen who could well keep failing her way to the top is Katie Packer Gage. Her latest claim to fame is convincing the uber-wealthy Ricketts family, which founded finance giant TD Ameritrade and owns the Chicago Cubs baseball team, to spend $3 million to fund a Super-Pac she created to take down GOP presidential front-runner Donald Trump.

Kudos to Packer Gage for raising these funds – especially since her previous major experience in national politics was advising 2012 Republican presidential loser Mitt Romney. Or maybe the Ricketts were simply chumps. Earlier this political cycle, Marlene Ricketts shelled out several million dollars to finance the (quickly) failed presidential run of Wisconsin Republican Governor Scott Walker.

But I’m still not convinced that other likely Packer Gage prospects will wise up. Because like Murphy, she’s plugged into the Republican half of the Beltway Establishment, and will always get glowing references from colleagues in this anti-Meritocracy – for their careers also depend on their skill at covering up or, more commonly, spinning away abject failure.  

Our final example of certain-to-be-rewarded Washington incompetence comes from the supposedly apolitical world of the International Monetary Fund. Among the IMF’s functions is tracking major trends in the world economy, and to this end the Fund puts out a veritable torrent of studies and forecasts. Now I’d be the first person to acknowledge how tough it is to predict the courses of the U.S. economy, any other national economy, or the global economy. That’s largely why I shy away from predictions. But presumably, the legions of economists at the IMF have gotten their jobs because they’re good at what they do. I’ve certainly been a frequent user of their material.

But the latest annual report of the White House Council of Economic Advisers, which gives a U.S. Administration’s official take on the state of the American economy and where it’s heading, contained this startling chart, which will make me think twice about citing the IMF’s projections. It clearly shows that for at least four years, the Fund’s best economic brains have consistently – and whoppingly – overestimated global growth:

Which raises the questions: Have any of the Fund economists behind these blunders been cashiered? Are they likely to be? Have any such professional staff paid any price for any comparable goofs?

Again, no one should expect political consultants to win every election, or economists to possess perfectly clear crystal balls. But no successful system of anything can last without at least to levy major punishment for instances of major ineptitude. Wondering why Washington politics and policy have become so close to dysfunctional? The capital’s conspicuous accountability shortage is a great place to start.   

 

Im-Politic: Why Sanders Really Isn’t Bernie-One-Note

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African Americans, Bernie Sanders, Bill Clinton, Bureau of Labor Statistics, campaign finance reform, Center for Economic Policy Research, China, free trade agreements, George W. Bush, Hillary Clinton, Im-Politic, manufacturing jobs, offshoring, poverty, race relations, sexism, trade policy, World Trade Organization

Truth in advertising: I have a lot of respect for Bernie Sanders and very little for Hillary Clinton. Still, here’s some data that I believe even many Clinton supporters will agree undermines her claim that her rival for the Democratic presidential nomination is a “single-issue candidate”whose obsessive focus on economic inequality and its roots in a money-drenched political system is ignoring crucial issues of racial and gender discrimination.

The data come from the government’s Bureau of Labor Statistics (BLS) and the private Center for Economic Policy Research (CEPR), and they make clear the harm done to African Americans by decades-long American trade policies that the former Secretary of State has strongly backed for most of her career, and the Democratic Socialist Senator from Vermont has consistently opposed.

According to a 2008 CEPR report, in 1979, blacks made up 23.9 percent of the workforce in American manufacturing, which is the part of the economy most extensively exposed to foreign competition. By 2007, this figure had sunk to 9.8 percent. And BLS data place this share at 9.7 percent as of last year.

Although there’s still by no means a consensus among economists concerning trade policy’s responsibility for manufacturing job loss, even this historically free trade-worshiping group of scholars keeps producing more and more evidence indicating that its share is considerable. So the above statistics make clear that African-Americans have taken an outsized hit both from Washington’s longstanding pursuit of trade agreements that have inevitably fostered production- and job offshoring, and from its equally longstanding failure to combat predatory foreign trade policies effectively.

The price paid by African Americans becomes even clearer when these percentages are translated into raw numbers. Based on the CEPR and BLS data, in 1979, 4.61 million blacks worked in U.S.-based manufacturing. Last year, this number had plunged to 1.49 million.

It’s important to note that some uncertainty surrounds this 2015 figure, because it’s based on one set of BLS data that peg the domestic manufacturing workforce at just under 15.34 million. These numbers come from the Census Bureau’s Current Population Survey (CPS), which uses answers from American households. My figure for 1979 comes from CEPR’s number of blacks’ percent of the manufacturing workforce, and from BLS total manufacturing workforce figures based on BLS’ own Current Employment Statistics. These use answers from American employers. The CES numbers peg the domestic manufacturing workforce at just over 12.30 million for 2015 – considerably lower than the CPS figure.

I wasn’t able to find an absolute number of 1979 manufacturing workers per the CPS methodology (crowd-sourcing hint!) but it’s difficult to imagine that the overall trend of disproportionate black manufacturing job loss would change significantly. And if something like three-plus million African Americans lost manufacturing jobs over the last four decades, does anyone – including Ms. Clinton’s supporters – believe that the impact on black employment and wage levels – wasn’t devastating? Does anyone believe that these policy failures didn’t play a huge role in turning Rust Belt cities with big African American populations – like Flint, Michigan – from centers of industry into centers of poverty? And that family break-up and related social ills in the black community weren’t greatly aggravated by the employment crisis suffered by the only sector of the economy with an historical record of enabling millions of working class Americans to lead middle-class lives?  

Starting this exercise in the late 1970s, moreover, is important because that’s when the American economy began opening wide to foreign competition. It also makes possible showing how blacks in manufacturing fared during the 1990s, a period lauded by Ms. Clinton as an economic golden age flowered under her husband, President Bill Clinton. But it was also a time when President Clinton spearheaded the first great wave of post-Cold War American free trade agreements.

Between the first year of Clinton’s presidency, in 1993, and the last, in 2000, the black share of American manufacturing workers fell from 16.5 percent to 13.6 percent. That’s a 17.58 percent fall-off. During the same period, the share of the overall U.S. workforce employed in manufacturing declined from 17 percent to 15.1 percent. That decrease was a much smaller 11.18 percent. Moreover, these data are all from the CEPR report, so it’s apples-to-apples.

During the ensuing administration of George W. Bush, black manufacturing job loss was even worse (21.6 percent), though this performance in part represented the hammering the entire manufacturing workforce suffered between 2001 and 2007 (19.44 percent of jobs eliminated). But even these numbers reflect poorly on the Clinton record. For it’s increasingly agreed that much of this manufacturing jobs massacre resulted from Mr. Clinton’s late-1990s decision to back admitting China into the World Trade Organization. It signaled to offshoring-happy American multinational companies that they could send floods of factories and jobs to the People’s Republic without fear of new U.S. tariffs on their U.S.-bound exports if the volumes became overwhelming.

Nothing in this post should be taken for agreement with the fundamental Clinton camp portrayal of Sanders as a Bernie-One-Note. But even if they were right, economic inequality – and its roots in the dangerously large role of money in American politics that’s produced a wide range of shortsighted and downright destructive policies, including on the trade front – is one heck of a big, loud note.

For although there’s no legitimate doubt that racial and ethnic minorities, and women, face their own distinctive problems in American society and the U.S. economy today, it’s equally clear that Sanders’ priorities, if executed well, would go far toward solving the most serious problems facing all these groups – not to mention the entire population. Ironically, during his first run for the White House, in 1992, Ms. Clinton’s husband recognized the need to focus “like a laser beam” on the economy – when it was in much better shape. There’s a strong case that her own campaign this year could benefit from taking that advice.