Tuesday, June 8, 2021

Part I

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The Way Politics Works: Senator Joe Manchin of West Virginia is Now the Most Important Vote in the Senate

There is not one arena of human activity that does not reveal the underlying worldview and how that worldview works its way out and implications. But there are some arenas of human activity where this is particularly and immediately true, and politics is one of them. That’s one of the reasons why we are so drawn to give our attention to politics because it is a human drama. As a human drama, one with, as we should acknowledge, huge implications and political importance, we need to recognize that as we’re watching politics, we’re watching human nature at work.

Now, as we’re looking at several big political stories that have been crossing the headlines just in the last several days, we see how this works. Now, the biggest story domestically has to do with the United States Senate, and interestingly, the biggest story actually has to do with one United States senator. That is Senator Joe Manchin of the state of West Virginia. Why is he right now the most powerful senator among the 100 members of the United States Senate? It is because he is a Democratic senator from a deep red state. In this case, the state of West Virginia. Furthermore, he is immovable on certain issues, and the democratic party is not going to be able to reach its political achievements in Congress, particularly in the Senate so long as Joe Manchin is committed as he has been throughout his political career, committed to a basic sense of bipartisanship, the two parties working together.

Now, let’s just look at Joe Manchin for a moment. He comes from a background in business, and then from 2005 to 2010, he served as the Democratic governor of West Virginia. Since 2010, he has served as a Democratic senator representing the state of West Virginia. Now, as you’re thinking about the United States Senate, it is often referred to as the world’s most elite or exclusive club, only 100 members at any given time. The power and the status of the United States Senate are absolutely massive, but nonetheless, many senators are very unhappy in the job.

It comes with being referred to as senator. It comes with a staff. It comes with an office. It comes with an awful lot of political power, but that political power can virtually dissolve if you are talking about someone who’s the junior senator from a state, or if you’re talking about a senator who might be on a committee without much influence, or if you’re talking about a senator that doesn’t have much seniority. That’s the biggest issue in the United States Senate. But if you are a senator with seniority and you’re a senator from the majority party, and if you’re a senator that is sitting on powerful committees, you just might like the job.

But one of the reasons why people leave the Senate after many years is because they often become frustrated with the fact that they can’t get anything done, and that’s contrasted with the executive role. That’s why many people have argued through history that it is the governorships that are the training ground for the presidency, the executive role in the state as training for the executive role in the nation rather than even a group as exclusive as the United States Senate.

But Joe Manchin is right now in the majority party, even though the Democrats hold a majority at this point only because the vice-president of the United States, Kamala Harris, is serving as the tie-breaker. Joe Manchin has been the focus of so much attention because everyone on both sides of the aisle understands that Joe Manchin is the necessary man. His vote is the necessary vote. If the Democrats can only muster, say, even just 49 votes in the Senate rather than 50, if Joe Manchin doesn’t go along, then it doesn’t matter who is vice-president to the United States because the vice-president can only vote in the context of a tie. So the Democrats understand that they have 50 senators, and for any major legislation, they must have all 50 senators voting with them, and they must also have the vice-president of the United States prepared to cast a tie-breaking vote.

Joe Manchin has been the big issue from the very beginning. The reason is simple. Just look at his state, West Virginia. It is a state that throughout most of American history, especially as you say through the 20th century was reliably deeply, predictably blue. West Virginia includes many rich people, but it is not a rich state. The population has enduring challenges with poverty. It is one of the smallest states. It is also one of the poorest states. When you are looking at West Virginia and you’re looking at the fact that many of the workers there in the 20th century were associated with the Labor Movement, you can understand why the state was also associated with the Democratic Party. But the great shift of the working class in this country, the so-called blue collar vote from voting Democrat to Republican really did change a state like West Virginia.

Now, why did that take place? Well, it took place because blue collar workers came to the conclusion that it wasn’t the Democratic Party that represented their interests. That party, they understood, was being taken over by an elite of basically coastal liberals. Rather, it became the Republican Party, and so West Virginia, even though many of the people were the very same voters and even as in many cases, they are still registered as Democrats, they vote Republican over, and over, and over again. So much so that the state of West Virginia and national elections in electing presidents is now one of the reddest of red states, but Joe Manchin is blue or at least sort of blue. He’s the former democratic governor and the current democratic senator. One of the two senators in West Virginia. The other senator is indeed a Republican.

To just state the matter in political terms, we can all understand as Joe Manchin understands, if he is in the United States Senate, it is because he is the kind of Democrat that an overwhelmingly Republican voting state would elect to the Senate. That means that he is actually more in step with many of the Republicans in the Senate than he is with most of the Democrats. The Democrats have known that Joe Manchin’s vote on big issues, especially something like a rules change to eliminate the filibuster would be decisive, and Joe Manchin indicated his decision in unmistakable terms over the weekend.

In an opinion piece published over the weekend in the Charleston Gazette-Mail, that’s the hometown newspaper in West Virginia, Manchin said two things of vital importance. Both of them closed the doors on many Democratic hopes. The first was that he would not vote for a rules change to eliminate or even to modify the filibuster. Well, there that is. Secondly, he said that he would not support the Democrats Voting Reform Bill, as they call it, as it came from the House and has now arrived at the Senate.

If Joe Manchin doesn’t support either of those two measures and he has said that he supports neither of them, they can’t pass. But there’s something else to watch here, and that is the fact that there are other Democrats who are actually more in the situation of Joe Manchin than they have yet acknowledged. You can just look at a political map, and you can look at the current composition of the Senate, and you could pick out Joe Manchin as a particularly strategic vote. But there are other Democrats that have to be reelected in states that at least sometimes if not often vote overwhelmingly Republican. If they side with the left wing of the Democratic Party, which is what that party is insisting upon, they’re going to put their own electoral prospects very much at risk.

Democrats in states like Pennsylvania, Wisconsin, Michigan, Ohio, Arizona, New Mexico, they could all put their political fortunes at risk if they indeed side with the liberals of the Democratic Party, but they’re running in one sense under the cover of Joe Manchin because they will never have to declare themselves in a politically expensive way, and politicians do their best not to expose themselves in a politically vulnerable way. Why would they need to do it if Joe Manchin can do it for them?

So all of a sudden, the political equation in Washington, D.C. has been greatly clarified just over the last couple of days. The Wall Street Journal thus ran a headline yesterday, “Senate Hurdles Imperil Biden’s Priorities.” Now, notice the way momentum works in the universe of American politics. Over the course of the last several months, we have been told that President Joe Biden and his administration are going to be inevitably successful. They’re going to be able to stretch all the limits of American politics even as the president has allowed people to speculate openly that the man he served as vice-president, Barack Obama, was unable to meet this kind of political goals and revolutionize American politics. Joe Biden, who had been elected, claiming to be a centrist, was going to turn out to be the big game-changer.

Well, will he? Time will tell, but what’s interesting right now is how the momentum has immediately met an obstacle it cannot overcome, and that obstacle is West Virginia, Senator Joe Manchin. But in reality, as I said, if you look under the surface, there are far larger obstacles. Joe Manchin is not alone. That’s why The Wall Street Journal doesn’t say that it is Senator Manchin who imperils Biden’s priorities, but the United States Senate, but that then points to something else.

As you’re looking at the Democratic majority in the House of Representatives right now on any particular measure, it is likely to be only a margin of single digits. A margin of single digits is inherently fragile. You’re talking about less than 10 votes the Democrats can claim over the Republican votes. That makes every single piece of legislation precarious. In reality, Joe Biden is facing a far more precarious political situation than Barack Obama did when he entered office after the 2008 elections.

In that opinion piece that ran over the weekend in the Charleston West Virginia newspaper, Senator Manchin said that he was not going to vote for the Democrats so-called Voting Reform Act because it simply was very partisan. He said that that would be to disregard the Senate’s tradition of bipartisan legislation when it comes to voting laws. The senator wrote, “I believe that partisan voting legislation will destroy the already weakening bonds of our democracy, and for that reason, I will vote against the ‘For the People Act.”

Now, here’s something we just need to recognize. Why would bipartisanship be a good thing in the sense? Why, especially when it comes to the Senate legislating on voting reform or voting laws for the country, why would this need to be bi-partisan? Well, there are two reasons. The first is that if this kind of legislation is not adopted in a bipartisan manner, it may well be reversed or just utterly eradicated at some point going into the future. If you’re looking at something that is partisan, it may stand for a while, but it may not on the other hand.

The second thing is that if you’re looking at America’s tradition of representative democracy and constitutional self-government, there is nothing so absolutely crucial as elections, and the credibility and integrity of those elections. Now, state by state, this is now a controversial issue, and nationally, it’s also a controversial issue. But one of the things we need to recognize at the national level is that based upon the logic of the constitution, our federal government has been extremely reticent in a bipartisan manner to dictate to the states how elections have to be undertaken. The bill pushed by the Democrats would not only change election law across the United States. It would basically federalize the election system.

Now, one of the things you need to think about there is that if you know right now that it is controversial, sometimes legitimately so, sometimes illegitimately so at the state level, just imagine that the charges might be alleged against the entire federal system of national elections. Predictably, anger against Joe Manchin coming from the left has been vitriolic and immediate. For example, an opinion piece in The Washington Post referred to Joe Manchin’s mighty delusions. Michelle Goldberg of The New York Times referred to Manchin’s nihilistic bipartisanship. Another headline in The Washington Post spoke of panic setting in amongst those in the Democratic leadership. Not only in the Senate, but in the United States Congress as a whole and also in the White House.

In other interviews, Joe Manchin has indicated that he hasn’t particularly been thrilled by service in the United States Senate. Speculation in West Virginia is that it is unlikely he would run again for the Senate. If he does run again for some elected office, it seems more likely to the voters in West Virginia that he will turn back to a statewide election for the state’s leadership rather than for continued service in the United States Senate. But as he is now in the United States Senate, there is something to think about here.

Back in the 1950s, then Senator John Fitzgerald Kennedy wrote a book entitled Profiles in Courage. He was writing about times in the history the United States Senate that crucial issues had come down to a single vote, a single senator as the deciding factor. Now, if we’re honest, we’re not even sure that John F. Kennedy wrote the book. But nonetheless, he made the point that it often comes down to just one vote. If you only have a hundred votes in the Senate now and even fewer votes going backwards in American history, every single vote represents an awesome responsibility.

Now, it may just be one senator who is deciding many of these issues that will stymie the Biden administration. Not all of them, but at least some of them. But fairly soon, we’ll find out if Joe Manchin can hold to these principles and to these positions under what will be incalculable political pressure. You’re going to see it from the party. You’re going to see it from the press. He’s going to feel it from every single angle. We’ll see if he’s strong enough to withstand the challenge.

Part II

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So, What’s at Stake When the G7 Nations Agree to Common Corporate Tax Deal? Watch Your Wallet

But next, we’re going to turn from the national picture to the international picture. Although it has a lot to do with American politics, the United States Secretary of the Treasury and the Biden administration announced over the weekend that a multinational agreement had been reached, especially amongst the G7 leading industrial nations to come up with a minimum corporate tax that would be levied against all businesses who do business within their national borders. This would mean that there would be, according to this action, a minimum corporate tax that nations would have to charge, and that, we are being told, is a very big international achievement because it will prevent, we are told, many international businesses from being able to avoid paying taxes by locating their businesses in nations that have a lower tax rate.

Now, is this real or is it not? Well, number one, it may be a real agreement, but it is not yet real policy. It’s actually a very long way from real policy. For one thing, just think about the political stakes in just the United States of America. If indeed this were to become law, according to the United States, it would have to get through the United States Senate. If it is ruled to be a treaty as it almost assuredly is, then it would need a super majority of two thirds in the United States Senate. We have just gone from unlikely to virtually impossible, but there’s something else here from a worldview perspective to understand, and that is that when you are talking about a global economy, you’re talking about a lot of nations.

By the way, if this agreement is to have any teeth, it will have to include not only the members of the G7, but about 135 other nations that are also involved in the same kind of economic transactions. That’s an awful lot of governments to get to agree on something which may not be in the individual nation’s best interests. Why would I say that? Just consider that economics like politics reveals the basic worldview issues at stake, and one of the things we have to note is that people don’t want to pay taxes neither do corporations.

Taxes effectively raise the cost of doing business. Businesses exist to do business, and thus, if you raise the cost of business, they will, in some sense, if they can, take their business elsewhere. Unless you judge corporations negatively about that, individual taxpayers do the very same thing. That’s why, in the United States, there are so many people moving from high-tax states like New Jersey and California to low-tax states like Texas and Florida. But as much as individual taxpayers and corporate taxpayers don’t want to pay higher tax, if any tax at all, just consider the tax that an individual pays is a reduction from income. The tax that a business pays is an additional business expense. The inclination of neither the individual nor the corporation is going to be to want to pay higher taxes. But again, money moves.

In a global economy, money can move and does move. That’s why nations such as Ireland, for example, that have had a lower tax rate, all of a sudden, become the home address of many businesses. In the United States, that is also why so many corporations are chartered in Delaware. Delaware, the home of, oh yes, President Joe Biden. Delaware has been a tax haven, an illegal haven for American corporations for a long time. That is why so many of the business envelopes you receive in the mail are actually from companies that are chartered in Delaware.

In the United States, in order to, at least in part, pay for the massive $6 trillion in increased spending he’s calling for, President Biden wants to raise the federal tax rate on corporations from 21% to 28%. But again, as I say, the devil is in the details. Every single tax law includes innumerable complications and what are known as loopholes. Why? It is because the United States government, even through its taxation policy, can’t help itself from trying to fiddle with social engineering. Furthermore, in the actual sausage making of legislation, in order to get the support of Senator X or Y from state A or B, the price might be coming up with some kind of preferred tax status for a particular business or line of industry. Agriculture is big in getting this kind of preferences, and it’s a trade-off in terms of the legislative process.

The G7 governments are claiming that this is a big breakthrough, and indeed in negotiation, it probably is some kind of achievement. But on the other hand, it’s another one of those artificial moments in politics because you can have these leaders, finance ministers, secretary of treasuries, you could go down the list, who have achieved this kind of agreement, but that doesn’t mean that a single one of them can get it through the parliament, or the Congress, or the legislature in their own political process.

Furthermore, when they are honest and say, “This is going to have to also be adopted by over 130 other countries,” well, good luck with that because many of those countries only have a growing and prosperous economy because they have low tax rates. Furthermore, in order to get agreement among those 130 countries, plus it’s also going to require trade-offs that will mean that this might actually amount to very little.

But that then takes us to an even bigger point, and it’s made very clearly by Joseph Sternberg in an opinion piece in The Wall Street Journal. The headline is this, “Forget Companies—the Global Taxman Wants the Middle Class.” Sternberg’s point is extremely important. Let’s just say that this much celebrated raising corporate taxes goes all the way through perfectly and works exactly as the finance ministers, and presidents, and prime ministers have announced. Here’s the bottom line. It won’t amount to much money that would make any real difference in the burgeoning budgets of these countries. So something else actually has to be at stake, and what’s at stake is that there will be the political claim that since those new corporate taxes haven’t resulted in the increase in government income that was predicted, they’re going to have to turn to their own citizens and say, “We’re going to have to raise your taxes.”

That’s why Sternberg rightly says, “It is not really a corporate tax increase that is the goal of this process. It is the increase on the middle class in all of these countries because the middle class is where the actual money is.” You can talk about taxing the wealthy, but the first issue is the wealthy stay wealthy by using their ingenuity to avoid this kind of taxation. If you have enough money, you can move your money in order to escape taxes. The other thing is this. Even if you add up all the wealth of the super wealthy, once you tax it in any level that’s politically plausible, you’re not going to get enough money to pay the bills for, say, a $6 trillion increase in federal spending. The only place to go is the middle class, but you can’t go there honestly telling the average American voter, “We’re going after your money.”

The worldview issue often comes down in this kind of question as to whether or not we believe the government should be larger or smaller, because if the government is going to be larger, then it’s going to require a much larger budget. If you’re going to shift more and more social functionality into the government, which is exactly what the Biden administration is calling for, then you’re going to have to vastly increase the income of the federal government at the very same time that even the existing entitlements are not going to be payable according to budget forecasting scenarios.

But the way this works is that the American people will be told, “This is just about raising the money on corporations,” without recognizing that corporations will just raise their prices. But the other issue is even if this tax works, it doesn’t produce what is claimed. Even the estimates given by these governments make clear this isn’t that much money. Where’s the money? It’s in American retirement accounts, saving accounts, and family real estate. That’s where they’re coming for because that’s the only real money.

Part III

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Lest We Forget: The Last Surviving Soviet Soldier Involved in the Liberation of the Auschwitz Concentration Camp Has Died at 98

But finally, history in an obituary that appeared recently in the Los Angeles Times about a veteran who died in the Soviet Union. The man’s name was David Dushman, and he’s identified as the last Soviet soldier involved in the liberation of the Nazi death camp at Auschwitz. He died at age 98. We are the witnesses, even at this point in human history to one of the great generational passings of our time. In this case, the so-called greatest generation, those who were young men and young women at the time of World War II. But even as we are marking another anniversary date for D-Day, we also recognize there are other anniversaries such as the horrifying anniversary of the allied liberation of the death camps in Germany.

There is actually no good vocabulary for this. Liberation is a word that isn’t wrong, but it isn’t exactly right either. David Dushman, one of the Soviets, because this was in what became the Soviet sphere of influence as the Soviet forces were racing across Eastern Europe, as they got to Auschwitz, he said that he and his comrades didn’t immediately recognize even the magnitude of the horrors that had taken place there. Speaking of what he saw with his own eyes, he said, “Skeletons everywhere.” He said, “They stumbled out of the barracks. They sat and lay among the dead. Terrible. We threw them all our canned food and immediately drove on to hunt fascists.” According to historical records, more than a million people, the vast majority of them Jews who have been sent there from all over Nazi-occupied Europe, were murdered by the Nazis at the twin camps of Auschwitz-Birkenau, just in the years between 1940 and 1945.

David Dushman from the Soviet side was actively involved in some of the most horrifying events of World War II, including the bloody battles of Stalingrad and Kursk. He was himself seriously wounded three times, and out of the soldiers in his division of 12,000 men, he was one of only 69 who survived the war. Out of 12,000, 69 survivors, David Dushman, one of them, an eyewitness to history who died just in the last several days at age 98. Interestingly, he died in Munich, mourned by the Jewish community there.

Charlotte Knobloch, a former head of Germany Central Council of Jews said, “Every witness to history who passes on as a loss, but saying farewell to David Dushman is particularly painful. Dushman was right on the front lines when the Nazi socialist machinery of murder was destroyed.” When Dushman, who was in charge of a tank, got to the fence at Auschwitz, he barreled over the electric fence and his T-34 tanked. What he saw with his own eyes defied the human moral imagination, but what he saw was the stark reality of human evil unleashed.

We pause today to look at the passing of this witness of history in order that the memories might not pass. Lest we forget.