To the larger first group I say thanks and I encourage you keep getting the word out. Share our letter via email and Facebook. Join the Progressives against Mandel group on Facebook.

The second group, I want to suggest you take this episode as a learning experience about politics.

First, politics is about coalition building. It’s about getting people together in support of legislation or a candidate who might not agree on other matters.

People don’t wear black hats and white hats in politics. With very few exceptions, all political hats are in shades of grey. And politicians change hats frequently. A big part of politics is getting a group of people with different tastes in hats to put the same one on for a moment or two. It’s about bringing people together in support of a particular issue or candidate even if they don’t agree on anything else.

People who are complaining now that Bob Brady and John Dougherty and ward leaders support Alan Butkovitiz have happily welcomed Brady and Doc and ward leaders on their sides at other times. When I was working for health care reform, Bob Brady and IBEW were some of our strongest supporters. Does anyone think I have should turned away from their support because I disagree with them on other issues?

If you understand that politics is about coalition building then you don’t borrow Joe McCarthy’s tactics and attack people who have been on the frontlines of progressive advocacy, in some case for decades, because they are allied in support of a candidate who is backed by people you disagree with.

Second, there is no sin in being a ward leader or working with them.

A central theme of Brett’s campaign is that the party machine and the ward leaders are all corrupt party hacks. Now, I’ve had my differences with Bob Brady and ward leaders at times. I’d probably be a State Representative today if Brady hadn’t intervened in my race in 2004. But since then I’ve worked with Brady and many ward leaders as well. The notion that there is a corrupt Philadelphia political machine that runs the city and always oppose good political candidates is at least fifty years out of date in at least three respects.

First, the machine is not united and Bob Brady doesn’t tell it what to do though he has more influence than any other single person. We have a factionalized and divided ward structure and Bob Brady is constrained by his need to work among those various factions.

Second, the machine often backs progressive candidates. Progressives who talk about our great progressive city leaders seem to forget where they came from. Ed Schwartz was a ward leader and had the support of many ward leaders when he won a seat on Council. Happy Fernandez would not have won without the support of former ward leader Buddy Cianfrani who helped her build support in the wards. David Cohen was a ward leader who had the support of others. Bill Greenlee, a former President of ADA and one of the most progressive leaders on Council today is a ward leader. And even Michael Nutter was a ward leader whose political career owed a great deal to one of the most powerful ward leaders, Carol Campbell. And if you look at his voting record, Bob Brady is one of the most progressive members of Congress on every possible issue.

Third, the machine is not the source of corruption in the city. With very few exceptions, committee people and ward leaders don’t make more than their expenses in the run up to Election Day. And with few exceptions, ward leaders don’t endorse candidates because they get money to do so. Money changes hands, but it almost all goes out into the field.

“Progressives” who complain about middle aged working class people getting $100 on Election Day don’t complain when candidates pay young kids right out of college a lot more to work on campaigns, let alone when they spend millions on TV ads.

Third, politics is always about have and have nots and we progressives need to be on the right side in the conflict between them.

Over the last twenty years or so, Republicans in Washington and Harrisburg, backed by very wealthy business people, have been trying and succeeding in undermining the living standards of working people. One of their key strategies is to let inflation make the minimum wage irrelevant and to fight efforts to improve labor health and safety standards. Another is to undermine labor organizing by tilting labor law against unions. A third is to undermine the public sector and public sector unions. The goal of the second and third tactics is both to reduce wages and undermine the political power of labor unions. A fourth is to reduce taxes. And, a fifth is to  keep subsidizing business with government largesse.

These same struggles are being played out in Philadelphia. There are powerful forces in the city trying to undermine public schools, close libraries, reduce health care services, cut fire and emergency services and cut business and wage taxes without regard for their impact on all of these public goods. They are also trying to break the building trades which keep wages up for Philadelphia workers.[1]

Brett Mandel has been indifferent to some of these struggles at the city and state level. And on taxes, he has led the way for the wrong side.

Fourth politics is about meeting people at least half way.

It shouldn’t be a surprise to anyone that we oppose Brett. Most of us did so four years ago, and for the very same reasons. And no one is entitled to support in politics. If Brett really wanted the support of progressives who care about social justice as well as good government, he would have tried to earn it. He might have moderated his position on taxes. (For years I’ve pointed to ways we can reduce the part of the BPT that stifles development without reducing all of it or making our tax system more regressive.) He might have presented a broader agenda for economic development that includes something other than tax cuts. (I’ve described what that looks like, too.) He might have helped create a statewide movement to repeal the uniformity clause. He might have stood with us against closing libraries or schools. He might have supported instead of opposing raising city taxes to pay for schools last year. He might have joined some of our rallies against Tom Corbett’s awful policies.

He didn’t do any of that. He assumed that because he is for transparent, honest and efficient government, as are we, we would ignore the important policy differences we have with him on economic development, tax, and labor issues. He assumed that we would oppose Alan Butkovitz just because he is a ward leader.

That was the wrong assumption four years ago when I encouraged Brett to take a little different road to office. And no one should be surprised that it’s the wrong assumption now. Brett has never really tried to win the support of progressives like us. No one should be offended that we don’t support him now.

Fifth, people who support honesty and transparency in government should campaign that way.

The more I hear about the Mandel campaign, the more disappointed I get. It’s not just the TV ad that is terribly misleading. And it’s not just the fliers that are also misleading. (I got a new one today. Every scandal is blamed on Butkovitz even if he was the one who revealed it. Does anyone really think that an audit can prevent someone from stealing money from the city as opposed to revealing it? Does Mandel think that donning the cape of the Controller gives one X-ray vision?) It’s also the vague claims about corruption Brett makes in debates combined with the blog posts and emails of his followers who are making wild charges with no evidence. And they haven’t just been directed at Butkovitz. When Michael Williams was in the race, he also faced a series of wild, unsubstantiated and false charges aimed to force him from the race.

The Choice

Alan Butkovitz is not perfect. And some of the people who signed the letter against Mandel might vote for Mark Zecca who has a great record in the City Law Department. Butkovitz, however, has done a good job at the central tasks of the Controller as I’ve documented elsewhere and, on the central battles between rich and poor in this city and state, he has more often than not been our side.

Elections are blunt instruments for expressing one’s preferences because multiple concerns come into play when we decide for whom to vote. And that’s why my decision was so hard. I consider Brett a friend. I like him a great deal. I respect his mind and his commitment to the good of the city. There are a few people in the city whose ideas I always take into account when making up my own mind. Brett is one of them. I agree with Brett on many things. But I’ve decided that I can’t vote for him for Controller.

Good Government

If I were to focus all of my attention on good government issues like transparency, honesty, openness, and government effectiveness I might be tempted to pick Brett in this race. All other things being equal, it’s not a bad idea to have someone outside the ward structure holding this position. And Brett really cares about these issues as do I. We campaigned together for the ethics reform charter changes instituted in 2006 and worked on a bunch of other projects as well. His work on making the budget transparent is exemplary. He would do a fine job rooting out inefficiency. He would find clever ways to make government work better.

But Alan Butkovitz is actually good those issues, too. I don’t believe that being a ward leader automatically makes one a corrupt hack. Perhaps Alan has to watch his step politically. But Brett would have to do in office as well. And like all politicians in Philly, Alan helps his friends when he can. We’re not Minnesota or Vermont and part of politics in Philly is helping your friends. Brett will do that, too. The question is whether helping your friends undermines effective government. I’ve seen no evidence of that in Alan’s office. And if you actually read the reports of our Controllers, as I have for many years, you will see that under Alan Butkovitz, the office of the Controller has done some exemplary work. His report on emergency medical response and the follow up reports are fabulous (and address an issue I care a great deal about and campaigned on in 2007.) He’s revelations of corruption in the Sherriff’s office has led to criminal investigations and civil action to recover millions of dollars. He’s issued many other reports pointing to wasteful spending and sources of new revenue in the city.

The Role of Government and Justice

The impact of the Controller’s office, however, goes beyond making government transparent, honest, and effective. It is also a bully pulpit on policy matters. And that’s where I have problems with Brett.

Brett has, for years and years, focused his attention on eliminating what he calls the “job killing business tax.” It’s not that we disagree entirely on this. I’ve long pointed to problems in our tax structure. But I’ve looked for ways to restructure our taxes so as to encourage development while also insuring that wealthy corporations and individuals pay their fair share and that we maintain city services that are critical to both economic development and preserving equal opportunity. And I’ve pointed out that there are other strategies for economic development—community economic development strategies—that might be far more effective than just cutting taxes.

Brett’s not unconcerned about these other issues. But when the chips are down, his emphasis, time and again, has just been on cutting wage and business taxes. Let me put it this way, if I were given a choice between a business tax cut today that I don’t like and which would result in a reduction of important services, I would oppose it and hold out for a more sensible change in the tax structure later. Brett would take the tax cut and hope to fix it and the service reductions later. This isn’t a fanciful notion. Brett opposed the Cohen wage tax cut for low income residents because it was not a general cut, that is, a cut for those with higher wages. He’s not taken part in any of the extensive discussions about which part of the Business Privilege Tax is truly a problem and which part actually has no impact on creating jobs in the city. He’s not put forward or supported plans for community based economic development. He remains prett much a one trick pony when it comes to talking about economic development.

Or maybe he’s now developed another trick (or is it another pony?) with his focus on “pension reform.” The scare quote are there because pension reform has come to mean, for many in the city, selling assets we probably shouldn’t sell (the Gas Works) and squeezing union members, who are of course our fellow citizens whose consumption now and when they retire help keeps the city economy afloat.

None of this would matter so much except that, with the financial crisis of Philadelphia Schools—a crisis created in Harrisburg by Governor Corbett—we are hearing more and more from conservatives that Philadelphia is “bankrupt” and needs a big dose of “austerity” which, of course, means squeezing unions, cutting services, and right-sizing government (a theme Brett focused on in a book a few years ago). Of course, excluded from these plans  to save the fiscal health of the city are a slowdown in wage and business tax reductions.

Unless and until we remove Tom Corbett from the Governor’s mansion, the next few years in Philadelphia for progressives will continue to be a fight against the conservative demand for austerity. If Brett is in the Controller’s office, I have little hope that he will be on our side. In the current fight—about school spending, his voice has been practically absent.

That ad and the rest of the campaign

Except, of course, for the TV ad Brett released the other day, which dishonestly and unfairly blames Alan Butkovitz for the financial crisis in the schools. Alan Butkovitz has been the one voice in Philadelphia who has for over two years, been pointing to an upcoming crisis in school funding. To blame him for the crisis is not only an unfair way to opportunistically jump on a hot issue. It also distracts attention from the real culprit in this crisis, Tom Corbett.

And the ad hasn’t been the only questionable part of the Mandel campaign. He’s talked vaguely about Alan being “under investigation” by the Ethics Board. His campaign supporters have made wild charges, without a shred of evidence, about what Alan has supposedly done.

That’s not how the transparency and honesty in government candidate should be campaigning. And it’s what finally led me to decide to speak out on this race when, I had previously decided not to do so. Brett’s under a lot of stress in this tough campaign and made a mistake. I’m not going to hold it against him in the future. But I’m also not going to let it go now, especially when it appears that the future of Philadelphia depends upon our fighting against an austerity agenda pushed by business interests that care nothing about poor and working people, a fight I can’t see Brett joining.

So, this isn’t personal. I know Brett a lot better than I know Alan. I like and respect him. But we just disagree about some important issues. And I’m sorry I can’t vote for him.

The contribution of the PLCB to state revenues is actually a far more complicated issue than most people realize. But the gist of it is this: the state store system is very effective in generating far more state revenue from alcohol sales than any privatized system could be. Those revenues come at what, from the point of view of free market economics, is a cost: less alcohol is sold in the state than otherwise would be. But the alcohol industry is in fact unique in that there are strong public health reasons to discourage the sale of alcohol.

The state gains revenues from the PLCB in three streams. The first is the “profits” of the state stores, that is, the difference between sales revenues and the costs of the goods sold and the operation of the stores. In recent years this has been about $100 million. If fiscal year 2011-2012 it was $85 million. If we replace the state stores with private retailers, the state will lose all this money.

The second revenue stream is the 6% PA sales tax. In 2011-2012 that came to $123 million. Now you might think that the private sale of wine and spirits would bring in the same sales tax revenue. But that is not the case for two reasons. First, retailers are allowed to keep 1 of the 6 percentage points of the sales tax to pay for the administrative expenses of collecting it and turning it over to the state. Given that the whole process of administering the sales tax is computerized now, this is a crazy provision of state law. But it’s not going to be changed soon. The state stores turn over the full 6%. So the private sale of alcohol would cost the state about $20 million in sales tax revenue. And then there is “leakage” from the sales tax, the retail establishments that cheat. One estimate is that the state lose $800 million a year from tax cheaters. If 5% of the sales tax from the sale of liquor isn’t turned over to the state, which seems about right to me, that’s another loss of $6 million.

If you are keeping track then, we are up to a loss of $101 million in state revenues.

Now what some supporters of privatization say at this point is that we can simply increase the tax on alcohol in order to make up for these losses. But here is the real kicker: We in Pennsylvania already tax alcohol at a much higher rate than most states in the country. And yet our alcohol prices are the same or lower than our neighboring state. How do we do it?

To begin with, our alcohol tax is the 18% Johnstown emergency flood tax. People make fun of the name and the fact that the Johnstown flood happened decades ago. But Pennsylvania never instituted the kind of gallonage tax that other states have—that is a tax per gallon of wine and spirits sold—and just kept the Johnstown tax in place. So despite its history, the Johnstown flood tax is just our version of an alcohol tax. In fiscal 2011-2012 it brought in $298 million.

It’s not straightforward to compare the 18% tax with gallonage taxes in others states, but you can make a rough comparison by dividing the number of gallons sold into the total tax take for both wine and spirits. And it turns out that our tax is quite a bit higher than that found in other states. Our tax falls on wine at an equivalent rate of $5.08 per gallon. The national average is 67 cents per gallon and in New York it is 30 cents per gallon. Our tax falls on liquor at an equivalent rate of $9.60 per gallon. That national average is $3.75 per gallon and in New York it is $6.64 per gallon for liquor over 24% in alcohol strength. In other words, Pennsylvania taxes on alcohol are far higher than in other states. And it shows in terms of the total revenues received from alcohol taxes. New York has 50% more population than PA but its alcohol tax only brought in 206 million. (This data comes from a blog post and excellent report written by Nathan Lutchansky who, I should add, is a supporter of privatization.)

Now here comes the kicker. The alcohol tax in every state is built into the price of alcohol. Yet even though our taxes in Pennsylvania far higher than taxes in other states, the prices we pay for liquor and wine are about the same or even lower, as every report on that subject has found. How can that be?

The answer is that the state monopoly on not only the retail sale but the wholesale distribution of wine and spirits drive down the cost of alcohol in the state in three ways. First, it gives Pennsylvania enormous bargaining power with the distributors of liquor and wine. The PLCB is one of the two or three biggest purchasers of wine and liquor. And it shows in the ability of the PLCB to drive a hard bargain. Second, because the PLCB is a monopoly and doesn’t really want to encourage alcohol consumption, it spends much less than private retails stores on advertising or on creating an ambience in stores that encourages consumption. And, third, the PLCB is both the wholesaler and retailer of wine and liquor and its markup is about 30%. The wholesaler markups for wine and liquor typically run from 18-25%. The retail markup is typically 33-50%. So the total markup in when liquor and wine is sold by private businesses is typically 51-75%.

Now what would happen to the alcohol tax if we move to private wine and spirit sales? There are two options.

Option one is that we reduce the alcohol tax to the levels found in other states. If you go to this website, you can calculate the results. Plug in the New York tax numbers and the state generates only $130 million in revenue million for a total loss of $231 million. Even if you assume that privatization leads to an 44% increase in the sale of wine and spirits—which in my next post, I’ll show is both likely and likely lead to disastrous public health consequences—the loss is still $100 million in tax revenues and $201 million total.

Option two is to keep the 18% tax in place. But then two things will happen. In the middle of the state, where there is little competition from retail stores in other states, alcohol and wine prices will increase by about 20 to 45%. That has to happen since the wholesalers and retail markups will be much higher than the state markup and the retailers will have to spiff up their stores and advertise. In areas of the state close to other states, private wine and spirit stores won’t be able to raise their prices so high without losing all of their business to Ohio, New Jersey, Delaware, and New York. So what we will find is grocery stores selling beer and wine at much higher price than other states. And there will be no free standing liquor and wine stores because they simply will not be able to compete with stores across the border. So the idea that a store like Moore Brothers will open in Philadelphia is just a fantasy. It won’t happen. Indeed, we will lose the good state stores we have now on Chestnut Street and in Chestnut Hill. And even with at tax at 18%, we will still lose state revenues because we will lose more sales to others states.

If you don’t think this argument is right, look at what a proponent of privatization, Nathan Lutchansky, has to say on page 4 of the report I linked to above: “It would be reasonable to question whether operators in a free market could offer regionally competitive prices under such an oppressive tax regime [that is the 18% alcohol tax] without the benefit of a state-wide monopoly and the high volume efficiencies that the government owned retail system enjoys today”

So there you have it. In ways that are hard to recognize, we benefit hugely from the PLCB. We have alcohol prices that are about the same as in other states, but we take in around $200 million in state revenues that we could not bring in from private retail stores. There is simply no way around this and anyone who tells you that privatization would not cost state revenues is either bullshitting you or doesn’t know what he or she is talking about. The honest supporters of privatization, like Luchansky, admit that there will be a large loss of state revenues. And that means that we will either need to raise other taxes substantially—something this Governor and legislature will not do—or there will be even deeper cuts in spending for education and other critical needs.

That’s not ideology or opinion talking. That’s plain hard math.

Now, do I need to add that every one of those intelligent analysts are men? (And that a few of them appear to be working for other potential candidates for Governor who presumably support abortion but are raising questions about Allyson’s support of it?)

The DGA poll that showed Allyson beating Corbett in every part of the state really pushed on that issue and it had no effect on the polls. Why not? Why are the (male) analysts wrong? The reason is that both the state and our nation as a whole have dramatically changed from the old days when being pro-choice made it hard to win statewide in Pennsylvania and when the abortion issue hurt Democrats nationally.

Women in the cities and the suburbs—especially the Philly subburbs—are pro-choice. Many of them are Republicans or lapsed Republicans or the children of Republicans become independents. How do you think Obama wins by huge numbers percent in Montco and Delco? It’s the vote of these women. And some of the pro-life men in Western PA aren’t Democrats or don’t vote for Democrats any more. Rendell and Obama and Kane showed that you can win in the state even if you lose more of them than Governor Bob Casey did. 

There was a time, immediately after Roe vs. Wade, when the abortion issue really helped Republicans because it divided both parties. Those who opposed the abortion were really passionate about it in part because they had lost in the Court and in part because of their religious fervor. The result was that many pro-life Democrats voted for Republicans. Pro-choice Republicans were more likely to stick with their party because, as the winners on Roe, they were less passionate about the issue and because could count on the court to protect abortion rights.

Then three things happened.

First there was generational change. A lot of the kids of those pro-life Republicans are now indpendents or even Democrats because they share the Democratic stand on cultural issues. In addition,  many of their parents were old-time liberal Republicans on economic issues and the Republican Party has moved far to the right on those issues as well.

Second, the Republican threat to abortion rights keeps getting more serious. We are one SCOTUS seat from losing Roe. Republicans are ramping up the effort to push awful restrictions on access to abortion and ultra-sound requirements (which Corbett notoriously supports). And the Republican Party has gone off the deep end both in supporting these restrictions and, even more, in rejecting abortion in the case of rape and incest. (And don’t forget Santorum’s attempt to make contraception a political issue again.)

And third, there is a personal factor. Neither political analysts nor political scientists have given it enough recognition. About a third of all women have had abortions. Contrary to the image of a abortion as the first recourse of young single irresponsible women, the majority of those who have abortion are married women whose birth control failed and who are not in a position to have another child. Even for single women, abortion is the last resort when contraception fails, not the first.

Every woman has a close friend or daughter or mother who has had an abortion. A lot of men have had wives or daughter or girlfriends who have had abortions. They—and especially the women—know how difficult a decision it is to have an abortion; how hard it is to get abortion; and how important it is for a woman to find good health care provider that can also provide a safe, non-judgmental and supportive place to have an abortion if they need one. This personal experience has gradually had an impact on political views of abortion.

So it’s not just that the majority of women and men are pro-choice. It’s that the abortion issue is a visceral issue for pro-choice women in a way that men find very hard to understand because, after all, it’s not our bodies that get pregnant.  But for the vast majority of women who want control over their own bodies, it really does trump everything else. Even if the polls show that most women and men don’t believe abortion should be a method of birth control or legal in this case or that, deep down women and men understand that birth control fails. So a strong majority of women and a majority of men really do believe that is important to keep abortion legal and safe.

It’s a huge advantage for a Democrat to be pro-choice now. And there is a huge advantage to be a female candidate because women trust women on this issue more than they trust men, and with good reason.

So, yes, there are going to be really nasty TV ads about the Blackwell Center coming from Corbett. Despite the polls and focus groups which will show them they shouldn’t do it, I don’t think the old white guys who tell Corbett what to do will be able to help themselves. They just can’t recognize or accept a world in which men don’t control the bodies of women.

But when Corbett runs the abortion provider ads, they are just going to blow up in his face. Allyson will look into a TV camera at a debate or in her own ad and talk as a woman to other women (and men) about difficult personal decisions,  about how important it is that they have the right to make those decisions in a place of safety and respect, and how male politicians like Tom Corbett have no business putting themselves in the middle of those decisions. And that, among other things, will carry the day and the election for Allyson Schwartz.

This experience would have been less traumatic for us if we had paid more attention to the history of progressive reform in American history. That history teaches us that progress is never as straightforward as we would like. It comes in fits and starts. It always generates intense opposition. It takes commitment and long struggle to achieve. And it can take a generation to consolidate.

Right now, the opportunity to create a new progressive era is still there. But we have to avoid some missteps to get there. If we fail to understand what America wants and does not from this new progressive moment, we risk losing it.

Opportunities

What are the opportunities before us?

First, we have a President who has articulated the deepest ideals of progressives.

He’s shown us that the key to a prosperous America is a strong and growing middle class and  community that give everyone who will study and work hard an opportunity to enter it.

He’s challenged us to live up to our moral responsibility to care for the weak and vulnerable.

And he’s put forward a vision of an America which holds that each of us must take responsibility for our own live but that we all do better when we work together to provide for the common good. A market economy provides the framework for freedom and economic growth, But it needs rules to create a fair economy; an education system that trains everyone from entrepreneurs and executives to those who work on the shop floor; scientific and medical research that leads to the innovations of the future; and the roads and bridges and public transportation systems that make the it go.

Second, the President’s vision has increasingly touched a chord in the American people. Not only the election, but poll after poll show that the American people share our ideals.

They believe in our market economy but also believe that government has an important role to play in our common life.

They want to be able to take risks to achieve their dreams, but also want a safety net to protect them if, through no fault of their own, they lose their jobs or become ill or suffer from natural disasters.

They don’t want to pay more taxes than necessary, but they are willing to pay their fair share for the vital services that government provides.

And, third, we face an opposition that has been taken over by a radical group that does not share these beliefs. The radical right lives in a past of its own imagination, a world that never existed and never could exist, in which there is barely any government, almost no taxes, and Americans care about no one but themselves.

That radical right’s history is a fantasy. The reality is that progressive Americans in each generation have creatively reinvented government to meet the challenges of their own time.

We have the opportunity to do that in our generation as well.

Challenges

But we can’t do it by rushing to the left while the Republicans march lockstep to the right. We can’t do it by mimicking the Republicans and only talking to ourselves. New eras in our politics come about only when activists and political leaders present innovative ideas that speak to and for a broad swath of the American people.

So we have to understand what our fellow citizens don’t want, as well as what they do want. And it is clear that they don’t want a huge expansion of government and far higher taxes. They don’t want a large inflexible state. They don’t want an ideological  politics that divides one group or class from another.

What Americans want is what progressives have created in the past: pragmatic, uniquely American solutions to the barriers that stand in the way of a growing, prosperous middle class.  They want what America, at its best, has created before: new ways for the public and private sectors to come together to solve our problems in ways that reflect the broad progressives ideas we share. They want innovative approaches that stear clear of the one-sided programs of left and right.

The great post-war era

Look, for example, at the great post-war war era in America between 1945 and 1973. America’s economy and its middle class grew faster during that period than at any time before or since. That growth was powered by not just by both private but by public investment. It was the era of great public work projects, of new road and bridges, airports, dams, and of course hundreds of schools. And it was the time when a huge expansion of higher education not only educated millions of college students but generated the explosion of scientific research that led to the space program and the computer. That era created a higher education system that included an incredible diversity of public and private schools and that gave young people the opportunity to attend the college or university that best suited them.

That is the kind of innovative, pragmatic progressive approach we need today.

Health Care and Education

Let me give you two examples where innovative thinking will help us find progressive solutions that America as a whole will embrace.

First, look at health care reform: I was proud to work for the Affordable Care Act, which created a hybrid public / private system of health insurance, even while people on my left criticized it as a sell out to insurance companies and people on my right called it socialism. It was and is neither. It is a uniquely American, pragmatic solution to the goal of guaranteeing quality affordable health care for all. It is, to be sure, a complicated proposal but it fit a complicated issue. Still as each step of it has gone into effect, Americans have embraced it. As it goes fully into effect in the next few years they will continue to do so.

The ACA takes advantage of markets and the private sector to provide health insurance, while regulating insurance companies to ensure that everyone can get coverage and care and that excessive profits are limited. It takes advantage of the public sector to make insurance affordable to all and to encourage new, life- and cost-saving ways of delivering health care, while making room for a diverse group of non-profit and for-profit insurance companies, hospitals and medical practices to find the best way to attain those goals. 

The ACA is not perfect. It will need careful implementation and perhaps amendment along the way. But it will save tens of thousands of lives and reduce the pain and suffering of hundreds of thousands while giving security and peace of mind to millions. And it is not the end of reform. Perhaps the best part of the ACA is that it encourages further creative innovations that will solve the problems that remain in our health care system

Second, look at education. Nothing can be more important to our future than educating our kids. But today we are locked in an ideological struggle between people on the left who want to return to the monolithic public schools of the past and people on the right who want to privatize all of our schools.

I very much share the concerns of those who see in many proposals for privatization a way to end the public responsibility for educating our kids or an attempt to undercut teacher unions. Elementary and secondary education is a fundamental responsibility of any community. And no public money should ever be spent on schools that aren’t carefully regulated and evaluated by public authorities. We also know that the best education is found where teachers are organized and recognized as professionals deserving of respect, opportunities to advance, and good pay and benefits.

We can, however, recognize those principles while also understanding that the monolithic schools of the past won’t meet the needs of the present. In education, like health care, we need a variety of approaches—and a good deal of experimentation—to learn how to best educate the incredible diversity of kids who enter schools today. (Indeed, as someone whose unhappy early education took place in a monolithic school system, I can say we’ve needed much greater flexibility, and the innovation that comes along with it, for a very long time.)

Taking advantage of the progressive moment

We can find many other examples—in economic and community development; in addressing the dangers of global warming and environmental degradation; and in others as well—where new creative thinking will enable us to find pragmatic progressive solutions that have a broad appeal.

If we present ideals like that in one area after another, we will be taking advantage of this moment in our history to build a new progressive era, one that captures the broad center of our politics and the energy of the American people. If we do that, we will take our place among the progressives who have, in each generation, moved American forward, handing a better country on to our children and grandchildren.

Both proposals don’t end the filibuster but make it more burdensome, thus presumably making Senators more reluctant to block legislation that has the support of a majority of the Snate.

Reid appears to be acting at the behest of many of his Democratic colleagues. They are worried about not having the filibuster if the Democrats are in the minority again. The argument is not entirely wrong. One could certainly imagine a circumstance some time from now in which 48 Democratic Senators filibustered a repeal of the ACA which is supported by a Republican President and House. But this stance shows a lot less confidence in our party and ideals and most importantly democracy (with a small d) than we Democrats should have. I’m confident that as long as Republicans are as radical as they are today we will hold the Senate and the Presidency (and will eventually overcome the redistricted House and win that too.) And, as I’ve explained before, the filibuster we have today is not only undemocratic, it is unconstitutional.

I have no inside knowledge about whether Congresswoman Schwartz is considering a race. But I strongly believe that she should run. After explaining why, I’ll come back to the issue of whether she will or not.

Tom Corbett needs to be and can be defeated

Tom Corbett looks vulnerable, in part because he’s done a terrible job defending the public policies he has supported but even more because those policies have terribly hurt working people and the middle class. On education, health care, women’s health issues and the regulation of natural gas production Corbett has undermined government programs meant to provide security and opportunity to Pennsylvanians in order to keep taxes low on businesses and the wealthy. He has tried to undermine the public sector, and public sector unions, that do so much to support the economy in tough times. And his stubborn resistance to any new state taxes has forced the majority of municipalities around the state to either raise their own taxes or slash spending for education and social services.

A good time to elect a Democratic Governor

Not only is Corbett beatable, but electing a Democratic Governor in 2014 is, for three reasons, more important and exciting than usual. First, with a pickup of three seats in the State Senate, and growing Democratic strength in Southeastern PA, it is possible to imagine that the next Democratic Governor could create what Governor Rendell never had, a working majority in the General Assembly. Second, with the economy turning around, state finances are likely to start growing soon. Together with all the money that Corbett has left on the table by not taxing the natural gas industry, there will be money to attain Democratic goals. And third, with the Affordable Care Act coming fully into effect in 2014, we need a Democratic Governor committed to implementing it in an effective and fair way—and rolling back Corbett’s cuts to general assistance and other programs.

So a Democratic Governor elected in 2014 has the possibility of taking major strides forward on the issues that mean so much to us. But any Governor, even one as unpopular as Tom Corbett, can raise money and get free media attention. Corbett is beatable but only if we run an especially strong and effective candidate against him.

There are at least four good reason why Congresswoman Schwartz would be not only the best Democratic candidate for Governor but also the best Governor Democrats could elect.

The Democratic politician best prepared to be Governor

First, she is the Democrat best prepared to be Governor. She has far more experience than anyone else considering a race, not only in Washington and Harrisburg but in running social service agencies and in city government. Her knowledge of public policy is deep and broad. Her political skills are finely honed. And she attracts and empowers a great staff. Being the best qualified to be Governor is not the only thing that wins elections. But any challenger to an incumbent has to overcome the experience gap. With Allyson Schwartz opposing Corbett, that gap is non-existent.

The Democratic candidate best positioned to win

Second, Schwartz is not only better known statewide than any other potential Democratic candidate (aside from Senator Casey who does not look he is running), she is also perfectly positioned politically to defeat Corbett. Incumbents are most likely to be defeated by candidates who are strong on important issues where they are weak. Both in Harrisburg and Washington, Allyson Schwartz has focused her career on education, health care and the status of women, issues that are central to Pennsylvanian voters and on which Corbett is distressingly bad. She’s done so by working on the progressive side of possibility to pass legislation that has made real improvements in the lives of people. And, as a woman, she can be especially effective in drawing attention to these issues.

Now critics of a Schwartz run for Governor will disagree with me from two different directions. Some will say that she is too liberal  especially on abortion. They say that Pennsylvania are most likely to elect Democrats when they are economic liberals but social conservatives. To them I say, come join the 21^st century. That old model still works, but only if your name is Bob Casey. If your name is anything else—say Ron Klink—it fails. In this age of political division and growing suburban support for Democrats, especially among women, the center of the Pennsylvania Democratic Party is in Southeastern Pennsylvania. Both Governor Rendell and President Obama have shown that Democrats win this state by large victories in SEPA, smaller victories in Allegheny, Erie, Lackawana, Luzerne and holding their own elsewhere. These victories were powered not just by economic but also social liberalism.

The claim of the first critics, that she is too liberal for the state, is belied by the second critics who say that she is too moderate. Nate Kleinman’s primary campaign against her showed that Allyson Schwartz is a progressive who understands that our critical task is to win over the center. Her moderately progressive record pushed against the constraints of the swing 13^th district she represented without breaking them. If Corbett calls Schwartz’s common sense views in support of quality education and health care for all radical, he will show how far he is from the mainstream of our politics.

The Democratic candidate who will run the best race

Third, Schwartz is an excellent campaigner. It will take her a minute to rise up to the kind of campaign presence needed in a race for Governor. But she has done that before when she moved from the State Senate to Congress. No one works harder than Schwartz at mastering the nuts and bolts of politics, from learning how to present Democratic policy ideas in a broadly appealing way to building a campaign organization to raising money. She became such an indefatigable fundraiser as a member of Congress that she has helped other members all around the country. In the process, she has made nationwide connections that could help her in a campaign for Governor. At the moment she has far more money in her campaign fund than any other candidate and all of it can be transferred to a race for Governor.

Congresswoman Schwartz also understands contemporary campaigns. She’ll raise the money for a large media campaign. But, beginning with her first run for Congress, she has shown that understands that there is still an important place for a strong field campaign that turns people out at the polls.

The Democratic candidate most likely to generate enthusiastic support

And that leads to a fourth point: more than any other candidate Schwartz will create the kind of excitement needed to overcome the biggest obstacle to defeating Corbett, low Democratic turnout in off-year elections. Like Rendell did, she will strongly appeal to voters in Philadelphians and its suburbs. And that, together with the prospect of electing the first woman Governor of Pennsylvania, especially one with a strong record of progressive achievement, is just what we need not only to bring people to the polls but to build a strong base of volunteer activists. It takes an exciting issue (like health care) or an exciting candidate (like President Obama) to build the kind of integrated field / internet campaign that can effectively mobilize thousands of volunteers to knock on doors and make phone calls. An Allyson Schwartz campaign for Governor could do that and make a Democratic off-year victory possible.

Will she run?

But will she run? My first thought was no. Congresswoman Schwartz has been building an impressive career in the House. She will keep rising there. But there are a lot of Democrats ahead of her in line for choice party and committee posts. And the small Democratic delegation in the House from Pennsylvania makes some of them difficult to attain. She could run for Senate against Pat Toomey. But it’s not clear to me that starting over in the Senate in four years would give her that much more clout than she has now and given how the Senate works, it might not satisfy her inclination to get into the details of public policy. Ever since I met her more than ten years ago, it’s been clear that Allyson Schwartz is in politics not to hold office but to make life better for people. There is no political office in Pennsylvania that gives one a greater opportunity for doing that then Governor.

So, while it would be a risk to leave Congress, I can’t imagine that Representative Schwartz is not considering a run for Governor. And while I know enough about what running for office means for both a candidate and his or her family to not say this lightly, if she’s not considering it, for the sake of the citizens of our Commonwealth, she should be. There are other good people who are said to be considering a race. I’ve been particularly impressed with Treasurer Rob McCord. And, despite Senator Casey’s views on abortion—which are potentially more problematic in the Governor’s office than in the Senate—I’ve long been impressed with his passion for economic justice.

 But there is no one as likely to run, win, and serve impressively than Allyson Schwartz.

What you can do

If you agree with me, do something about it. Call her office at (215) 881-9202 and tell her not only that you want her to run, but that you will help elect her our next Governor. Or go to her Facebook page and post a message asking her to run.

This is Pennachio’s introductio to the article which quotes Aetna President Mark Bertolini “Will the Affordable Care Act (ObamaCare) succeed? Here’s a clue, provided in a speech by Aetna’s CEO, Mark Bertolini. ‘After a transition period, if Aetna cannot earn its cost of capital on exchanges, we will exit the market.’

Why does Pennacchio think that the ACA won’t succeed? Because insurance companies have such low profits they will withdraw from it! In other words, after criticizing the ACA for two because it will boost insurance company profits, now Chuck is saying it will fail because insurance company profits will be too low!!! And he does his without noticing that he’s flip-flopped on the question.

When it comes to the ACA, Chuck turns out to be a (Groucho) Marxist: Whatever it is, he’s against it. If his argument that the ACA is a sell out to the insurance company doesn’t work, he’ll just reverse direction and say the ACA will fail because insurance companies won’t take part in it.

Am I surprised or worried by Bertolini’s speech? Not at all.  I’ve been saying for years that insurance companies are either going to have to totally change their predatory business model (in which they make profits by denying sick people coverage or care) or they will have to leave the business and be replaced by other institutions. Why? Because the ACA makes it impossible for insurance companies to carry out their old business model profitably.

And what might replace insurance companies? It might be consumer organizations (a model that folks in labor are thinking about in PA and elsewhere.) It might also be producer organizations. In fact, the ACA defines a new kind of organization, an “accountable care organization” that is composed of doctors and / or hospitals that provide health care on a capitation (fee for each person) rather than fee for service basis, which means they are spreading the risks of care among a large number of people and thus replacing insurance companies. Consumer and producer organizations are the key to making the changes in how we deliver and pay for health care so that we can improve care while reducing costs. As I’ve been arguing for years, this is the critical step we need to take to make health care affordable for all (and eliminate those long term budgetary problems you are hearing about.)

That we need this kind of transformation is why I’ve always been dubious about single payer. If by some miracle (and that is what it would take) we had moved to single payer, the incentives to create thes new payment and delivery systems would have been much smaller. Indeed the single payer promise to eliminate most administrative costs has always been misguided. What we need in this country is not less administrative oversight of health care, we need the right kind of administrative oversight, the kind carried out by medical professionals themselves with the aim of identifying and eliminating, unnecessary, duplicative, ineffective, counter-productive medical care while encouraging the best practices throughout the country.

Here, for example, is a piece by  Ezekiel Emanuel (Penn professor and physician, policy wonk) which explains why Accountable Care Organizations are likely to drive health insurance companies out of business.

Somehow, Chuck Pennacchio has  missed this development and seems to think that the ACA won’t work if insurance companies don’t offer insurance in the exchanges. That’s never been true.

One last point, if you read the article about Bertolini, he also says health insurance premiums are going to double because of the ACA. I have no doubt that in order to  maintain he profit margins and growth Aetna has had, Bertolini is going to try to  double health insurance premiums. But it’s also pretty clear he’s not going to be able to do that,  both because the growth in health costs has already dramatically slowed and because Aetna is going to have competition in the exchanges. Indeed, if he drives up insurance premiums for a year or two, that will lead to alternatives to the insurance companies jumping in sooner rather later. Bertolini’s warning that Aetna may leave the exchanges is a promise to the stock market that he won’t keep the company in a low profit margin business. And that shows (1) that we were right all along that the exchanges (and other provision of the ACA) will hold down insurance company profits by changing their business model and (2) that we were right to think that alternatives to the insurance companies will arise that compete with them and holds profits down.

Today he points out that spending on elementary and secondary education and on health care have gone up tremendously in this country since 1960 and yet that productivity in these two sectors of the economy has not gone up at all. And he blames the greater spending in these sectors on two factors, lack of international competition which, he implies, leads them to wind up under the control of government, which as we all know, is a recipe for inefficiency.

I’m not going to spend all day finding all the evidence to show what’s wrong with Brooks’ argument. But I’m going to point to some basic things we all know (or should know).

Are outcomes really stagnant in education?

First, let’s look at what outcomes we are getting from the education and health care sectors. Are we getting more for the greater amounts of money we are spending?

The high school drop-out rates in 1960 was 27.2%. By 1970 it had dropped to 15%. By 1990 it dropped to 12.1% By 2009, the last year for which I could easily find data it dropped to 8.1%. That’s a huge difference. It means that our schools are doing better. And, of course it also means that our schools are teaching more kids for longer. Sending would go up for that reason alone.

I don’t have a lot of faith in the college entrance exams. The correlation between scores on them and both first year college grades and later life success are pretty negligible. But if you take them seriously consider this: over the last thirty years when the scores can be compared (and making corrections for some changes in how they are scored) SAT and ACT scores have pretty much held steady with former declining slightly and the later increasing a bit. This has occurred even though the percentage of high school students taking the test has skyrocketed as more and more of our high school graduates go on to college. We would assume that, as more kids take the tests, those with lesser academic talents would bring down the scores. That this hasn’t happened is a sign of good things happening in our schools. Either our teachers are effective at bringing kids with lesser talents up to higher levels. Or our schools have become more effective at encouraging kids with talent from lower socioeconomic stations to apply to college. Schools have probably done both things and that is a sign of progress (not just in our schools but our culture.)

Are outcomes really stagnant in medical care?

In the area of medicine the signs of progress are simply unmistakable.  The age-adjusted risk of dying dropped 60 percent from 1935 to 2010. There have been huge improvement in both treatment and access to health care especially for infants. But the elderly have done very well as well, largely due to Medicare. Treatments for most diseases have improved dramatically. Pick a common cancer and you will see that survival rates have gone up substantially over the last fifty years. Per capita deaths from heart disease over the last sixty years has fallen by half. For stroke they have fallen by two thirds.  

Someone my age may remember a grandparent with heart disease in the early sixties. The treatments available then were basically the same that were available in the 1940s. They took a baby aspirin every day and had nitroglycerine tablets for angina pain. There were no cholesterol lowering drugs, and no one knew the impact of cholesterol on heart disease. There was concern about high blood pressure but there were no medical treatments for it. There was no bypass surgery, cardiac catheterization or heart transplants. Our grandparents died of untreated heart disease. Our parents are living today much longer with it.

So the whole idea that there has been no improvements in medical care is just laughable. We are paying lot more. But we get a lot more, too.

Is productivity increasing?

Of course, improvements in both education and medical care at higher cost does not mean that productivity has grown. Do we get more for each hour of effort put in by our teachers and doctors? Or are we just spending more?

It’s hard to doubt that, to some extent we are seeing productivity increases. An operation for cervical disk fusion—which I had three months ago—may take a little longer than it did fifty years ago. But the improvements in technology and results are dramatic. That’s evidence of greater productivity. A cardiologist who spends an hour giving a full examination and can then prescribe medications that improve one’s quality of life and reduce the risks of death is being far more productive than a doctor who cannot do so.  

Teachers who set higher standards for all of their students—not just those from upper classes—and who have better ideas about how to meet them are clearly being more productive.

Why productivity increases are small in labor intensive activity

But amidst this evidence for increased productivity, we should remember something very important: there are some areas of activity where productivity increases are very difficult to attain. They are the ones where human skill cannot be mechanized or computerized. Let me give two famous examples, due to William Baumol. We are unlikely to see productivity improvements in the performance of string quartets. That’s not to say that the violinists, violists, and cellists today are not, on average, more skilled than they were fifty years ago. They probably are. And that probably means that the average performance of Beethoven string quartets is better and more consistently good than they were fifty years ago. But there is a limit to productivity improvements in this field. A Beethoven string quartet can probably be played by the best performers today at twice the tempo it could be played fifty years ago. But no one would consider that an improvement in quality, would they? Nor is there any hope of developing any time soon robots who can play a Beethoven string quartet with any degree of musicality.

Take another example: haircuts. The average hair cutter is probably more skilled and more consistently good than fifty years ago. And some haircuts may be a bit more complicated (although those layered cuts of the 70s were probably as complicated as any today). But even if they are better than ever, there is upper limit to productivity in hair cutting. There is only so fast a human being can comb and cut hair without running into the risk of causing bodily injury. And, here too robots are not going to replace human beings in the near future.

Much the same is true in teaching and medicine. Technology can enhance productivity in medicine by providing new pharmaceuticals and devices and perhaps by making information more readily available to physicians. But diagnosis, prescription, and procedures will continue to be carried out, as they have for the last century, by highly skilled professionals who develop those skills through a lengthy period of training.

Education is an even more difficult area in which to enhance productivity. Rote practice can be done by computers today and will be done more effectively by them in the future. But skills in writing, reading interpretation, and in the development of hypotheses and evaluation of evidence, can only be taught by talented and skilled human beings. And, indeed, the more we hand over rote teaching to computers, the more skilled and talented teachers will have to be to handle higher level instruction.

And let me give one more example: the writing of op-eds. I’m sure that, in real terms, David Brooks makes a lot more money today than James Reston did in the 1960s for writing his columns for the Times. But is he much more productive than Reston? Hardly. Reston wrote three columns a week for most of his tenure. Brooks writes two and does a little blogging on the side. Can we increase the productivity of writing newspaper columns. In some ways, yes. Brooks has computerized access to information  of a kind that that Reston probably could not imagine.  I wouldn’t be surprised to find out that Reston had some assistance that Brooks does not have in doing research as a result. But here again, there are limits to how much more productive a writer can be. So far, there is no science and technology that can make us think faster or writer better about difficult subjects. And any effort to think faster is likely to be as counter-productive as playing Beethoven string quartets faster.

Our limited ability to improve productivity in education and medical care (and music and hair cutting and column writing) is why we have been paying a lot more for these things over the last fifty years while the prices of electronic equipment and, in real terms, taking into account quality improvements, food, cars, and housing have declined. I once paid two bucks for a haircut. I now pay fifty for a much better haircut. But the same old one would today cost $20. A concert that once cost $5 now costs $50 or more. And the costs of education and medical care have gone up as well. The reason is that in fields dominated by highly skilled labor, we have to pay people more even though their productivity does not go up that fast. If we didn’t pay them more, no one would do this work.

There is nothing wrong with paying relatively more for goods that can’t be produced ever more efficiently. It’s just a fact of life. The only thing that could stop this from happening is if there were no more productivity in the production of electronics or cars or housing. And that would be a real problem. Rather than complain about the increasing costs of labor intensive, low productivity growth goods and services, then, we should be happy that rapid productivity growth in so many areas gives us the wealth to afford to pay more for them.

The problem of taxes

Government is responsible for providing elementary and secondary education and increasingly for health care as well. Government has to be responsible for education and medical research because they are public goods that benefits all of us. And it has to be responsible for medical care because justice requires that we all have access to good care, no matter our income.  And thus, to pay for these goods, government has and will continue to take a larger proportion of our income over time. Again, there is nothing wrong with this. Even as government takes a higher proportion of our income, we get a lot more bang for the bucks that are left because of productivity improvements in the provision of many goods and services.

Government can do better. But not by getting smaller.

All this is not to say that government can’t do a better job. We do, as Brooks points out, waste a huge amount of money in medical care. The reason, however is not that we have too much government but, rather, that we have too little. The fee for service medical system that served us well when medicine couldn’t do much and thus didn’t cost very much has failed us. Government expansion of the same system through Medicare, which provided funding for health care but which did not change how we deliver and pay for it, exacerbated the problem. (Which is not to say that Medicare is inefficient. Its administrative costs are far lower than those of private insurance.) The ACA’s expansion of health care alone could also make things worse but there are little known provisions in the law that will gradually force changes in how we deliver and pay for medical care which, if we continue to improve them, will wring a great the waste out of the system.

We can certainly save a lot of money. But at some point, those savings will come to an end. We are going to pay a higher percentage of our income for medical care as the costs of TVs, cell phones and, again, in real terms, cars, houses, and food continue their decline.

And much the same is true in education. We can, I’m sure, become more productive by, for example, expanding the use of technology to replace teachers who still do too much rote instruction. But while this will improve instruction, it won’t necessarily make education cheaper. Indeed, as we ask teachers to do more higher level instruction–which we need in our higher tech world– we will need to raise the quality of our teachers and this will cost money. And, at some point the limits to productivity increases in education will force us to spend more of our income in this sector.

Can American political culture adjust to the 21^st century?

The real question for a country like America, which has a large right wing that is allergic to taxes, is whether we can adjust to a world in which more of our income goes through the government to pay for critical services that are not subject to rapid productivity improvement. If we can’t, then education and health care will decline in the US. And so will our strength as a country.

David Brooks likes to take the long view and point to the impact of culture on politics. If he were really to do that in talking about education and medical care, he would ask whether a political culture is fit for our world if it leads us to think we have a natural right to low taxes. And he certainly wouldn’t give aid and comfort to that culture.

The pundits were right to say the speech was about the future not the past and that it proposed a continuation of Obama’s  basic approach to governing. And they were right to say that there were no bold new ideas in it. (Few Presidents do something as big and bold as health care reform and then have an encore equally big and bold.)

But what they missed is that the speech was a ringing endorsement of activist government. It supported not government that accomplishes everything by itself but, rather, government that carries out two important tasks: (1) Providing the public infrastructure and regulations that businesses need to create jobs and innovate in a way that serve the public as well as themselves  and (2) Creating opportunities for everyone, opportunities that not only keeps the promise of America to all our citizens and enables us to benefit from the talents of each and every one of us.
Government doesn’t accomplish those tasks in one big program but in a lot of different programs, some small and some big. Many of those program are, to one degree or another, already in place. So the immediate task of a Democratic President is to fight the right wing effort to cut them back and to tweak and improve them to suit the conditions of 21st century life.

At a time when Republicans keep repeating radical ideas about drastically reducing the size and scope of our government, Obama’s defense of active government sharply distinguished our philosophy from their philosophy. It answered their claim that opportunity and prosperity is provided by little or no  government with the claim that opportunity and prosperity is provided by active government in which we do together what we can’t do separately.
This is the common sense of the vast majority of Americans. We are not ideologues here. We don’t believe in a vast state that provides us we everything we might want. We do believe in the importance of individual initiative and responsibility. But we also believe that government can directly or indirectly provide  enhance our prospect for living well and make our lives more just.

President Obama task last night was to articulate the philosophical center of our politics in a way that was meant to appeal to an American philosophy so deeply rooted in us that we don’t even recognize it as a philosophy. We’re pragmatists in America. We care about what works. We don’t want a government bigger than necessary. But we also see no reason to deny ourselves a government that works for us out of some ideological convictions divorced from the practical problems of our lives. Nor do we think it is wrong to ask everyone to contribute to support such a government and to do so in proportion to the benefits they have received from our commonwealth.

President Obama gave us lots of concrete examples of Americans whose own lives, and whose ability to contribute to the lives of others, were enhanced because of one government program or another. Those kinds of examples of government working for both individuals and the common good are the best way to answer the ideologues of the Republican Party.

And while showing us that government can work, President Obama also showed us that a government rooted in our pragmatism can be inspiring as well. Activist government speaks to some thing deep within us. It speaks to our desire to be part of something bigger than ourselves, a community in which we are not just employees, employers and customers but also citizens united by some common goals. And it speaks to our desire to work together to create a world that is just, one in which everyone has the dignity and respect they deserve.

So this wasn’t a speech in which the programs and policies and arguments about them were front and center. Bill Clinton gave that speech the other night and it seems that many of the pundits were so impressed by Clinton’s inspiring wonkery that they were looking for the same from the President. There was no need to replicate Clinton’s achievement, however. Nor was there any need to provide bold new plans for the future. The programs the President put forward were, like the stories of individuals he told, not there to lay out an agenda or plan for the future but, rather, to articulate a philosophy of government that most of us instinctively and that is radically different from the philosophy put forward by the Republicans.

For this election is not about agendas, plans, and programs to meet this or that problem which we all recognize. There are some problems we recognize. We all care about economic growth and jobs. But there are many other problems that are no longer held by all to be common. The Republicans no longer think that poverty or lack of educational opportunity or lack of health care or scientific or medical research are common problems. They no longer think it is our task to address them together. And they no longer think there are common solutions to even those problems that we commonly acknowledge, jobs and the economy.  The think the only task of government is to get out of the way.

When the differences between us are so great, then the first task of a statesman in a democracy is not to present a plan or agenda but to articulate the fundamental ways in which we disagree  and offer the American people an opportunity to choose one philosophical path or another. That’s what the President did last night. In articulating a vision of what our government should be, the President was truly inspiring because he clarified the meaning of the work each of us will do in the next few months and in the years beyond it to realize that vision.

If you were looking for an agenda and a plan or new bold programs you probably found the speech disappointing. But the President saw beyond what the pundits were looking for to what all of us needed to hear: a clear statement of the alternatives before us.  And he did it so well that I have no doubt which path America will choose.

This is all great news. And it would not have happened without all the hard work you did in support of what became the ACA. That work didn’t stop after the legislation was passed. As I explain more below, the decision today was in no small the product of fear that overturning the ACA would have created a political firestorm. That you kept defending the law, and that Chief Justice Robert knew you would continue to do so, is part of the reason that he backed away from overturning it.

There is still more work to be done. As it always has, the fate of health care reform rests in the hands of the American people. They will decide in November whether those who support the law or oppose it should hold public office. And those of us in Pennsylvania will, by our work over the next year, have a huge impact on how well the ACA is implemented in our state.

So our work is not yet done. Keep your eyes focused on November. And stay involved with the Pennsylvania Health Access Network, your labor unions if you are member, and other progressive activists to keep the pressure in Pennsylvania.

But also take a moment to enjoy the Supreme Court decision today.  You deserve.

Some more or less random thoughts on the Supreme Court decision today.

1. Why it happened.

Immediately after the oral argument I said that I thought Chief Justice John Roberts would vote to support the ACA and I thought that Justice William Kenney would do so as well. I’m very glad to be right about one of them.

Why did Roberts support the ACA? Ultimately I think it was a partly political decision but one that was more about the standing of the court than about partisan politics. I think Roberts concluded that there is point in being Chief Justice of a court that is discredited because it widely believe to make decisions for blatantly partisan political reasons.

And there might have been a partisan political reason as well. As I pointed out early this morning, the political problems for Republicans of overturning the ACA were greater than those of allowing it to stand. If the court struck down just the mandate but not the regulations that require insurance companies to insure everyone, including those with pre-existing conditions,  at roughly the same rates, the insurance companies would have been damaged and they would have created the pressure we need to enact alternatives to the mandate. But if the mandate and the insurance regulations were overturned, there would have been a firestorm of complaint against the court because over 85% of the public strongly supports the regulations. And Obama’s reelection campaign would have benefitted as a result.

Given that choice, the partisan if not ideologically conservative decision was to let the ACA stand.

These political calculations only arose because Justice Roberts knew how supporters of the ACA would react if it were overturned. So once again, all of you who worked so hard for the ACA are responsible for saving it today.

2. What difference does this decision make politically?

In the short term, the decision will have little political effect. Republicans will be animated by it as they will now think, rightly, that it will take a Romney win to overturn the ACA. Democrats may be emboldened to defend the ACA and talk about all the enormous benefits of it. The one possible bright spot is that the fact that Chief Justice Roberts was the deciding vote in the case may lead people who are undecided or had even opposed the ACA to support it.

At any rate, if we do our work, I’m very hopeful that Obama will put out a victory 2012.

In 2016 and for the next 20 years, however, once the ACA is fully implemented and everyone see the benefits of it, we’ll run on the benefits provided by Obamacare and we will elections as a result. You know all those white working male class voters we worry about? They are going to be big winners under Obamacare, as will their wives, sisters, and girlfriends. This is the first piece of legislation Democrats have enacted that help working people in a very long time.

So, at some point, the Republicans are going to be very sorry they called it Obamacare.

3. Should we worry about the Commerce Clause?

I was initially worried because the majority of the court held that the mandate was unconstitutional under the Commerce Clause but accepted it as legitimate under the power to tax. Would that be a step toward narrowing the Commerce Clause? Having read the opinion, I’m not that concerned. Roberts decision with regard to the Commerce Clause was based  the distinction between activity and inactivity and the claim that if the mandate is constitutional there is no limit to federal power. I’ve explained why that argument is wrong here: http://marcstier.com/blog2/?p=6372. But the ruling ultimately will have little effect on future efforts by progressives. After all, health care really is a special case. I can’t think of another area of public policy where a mandate to purchase some other good is either necessary or desirable. We are not about to require people to purchase broccoli.

At any rate, if we want to do so, we can always tax people who don’t do so as he Court today said that this was constitutional.

They deeper point, however is that precedent doesn’t mean that much anymore. The key thing is having a majority on the Court. That’s another reason we must reelect the President.

4. While we are at, let’s remember to thank Bob Casey, Allyson Schwartz, Chaka Fattah, Bob Brady, Patrick  Murphy, Christopher Carney, Kathy Dahlkemper, Joe Sestak, and Paul Kanjorski for all they did to push the ACA through Congress!

5. More on single payer.

There has been some complaint from single payer folks, but not as much as I feared. Good for them. Physicians for a National Health Plan put out a moderate statement.

There has been more complaints about the ACA helping insurance companies from the right today than the left. Unfortunately none of them seemed to notice that insurance company stocks dropped substantially today—in some cases by 5%?

Why is that? Because the guaranteed issue requirement, the provisions that require insurance companies to spend a minimal percentage of their premiums on health care; the provisions that limit their ability to deny people coverage or care on the basis of pre-existing conditions and that limit how premiums may vary on the basis of age and gender; and the various provisions that require them to provide free preventative health care and free health insurance to children under the age of 26 will gradually reduce health insurance company profits.

The insurance companies clearly wanted to preserve the mandate but not the insurance regulations. So they had to argue in court to keep the mandate, which they did so by tying it to the regulations. I believe they hoped that, if the mandate were struck down, so would be the insurance regulations. It’s still the case, however, that insurance companies fought tooth and nail against the ACA.

Analysts from all across the political spectrum believe that profits will be driven so low that the insurance companies will eventually leave the market to Accountable Care Organizations and other new, mostly non-profit, entities. Some privae insurance companies have already left. We may see states move to create a public option in part because there is no alternative.

For some good analyses of the ACA that support my argument about health insurance companies see Ezekiel J. Emanuel and Jeffrey B. Liebman, http://opinionator.blogs.nytimes.com/2012/01/30/the-end-of-health-insurance-companies/  and Rick Ungar, , http://www.forbes.com/sites/rickungar/2011/12/28/more-proof-that-the-american-for-profit-health-insurance-model-is-doomed.

6. Hospital stocks went up. But if you look at the burden many hospitals have had in dealing with uncompensated care–especially hospitals in rural areas and among the big city hospitals that serve poor people, such as Temple and Einstein—it’s a good thing if they are doing better. If the ACA had been in place 15 years ago, MCP and Northeastern Hospitals in Philadelphia would not have closed.

I’m going to be writing more about the ACA and the Court after we hear the decision. But here is one plea in advance of the decision: can we progressives not get in a circle and start shooting at one another? That means, can the single payer folks not lead off with “if Obama only had pushed single payer through Congress we wouldn’t have to worry about the Court today?” Everyone who pays any attention to Congress knows that single payer had no chance in 2009-2010 and it does the progressive cause no good to make up stories about what is politically possible and what is not. More importantly we need to unite against the enemy, which is not the supporters of Obamacare but the corporate conservatives who, if they get their way today, are going to go after Medicare in the Courts (as they have in Congress) and Social Security next.

Those people who say that a rejection of the ACA will lead to single payer need to deal with the reality that the Republican House of Representatives have already voted to eliminate the single payer Medicare system and replace it with vouchers that, in 15 years, will have half the value of Medicare today.

We are facing an onslaught of conservatives determined to roll back the New Deal and more. They are by huge sums of corporate money. The last thing we need in this circumstance is to start fighting among ourselves.

What will the Supreme Court do? Predictions are hard, especially about the future. But here is one guess.

If the Supreme Court follows the law, not politics, then it will allow the ACA to stand entirely. The claim that the mandate is unconstitutional remains absurd on a number of grounds. It is an exercise of the power to tax. And it is also entirely legitimate on the basis of the Commerce Clause. (The claim that accepting the mandate means that there is no limit on federal power is wrong on at least five levels as I explained in a blog post, Why is this mandate different from all other mandates? http://marcstier.com/blog2/?p=6372)

But suppose the Court makes a political decision. (If that’s what they do, I’ll say more about the consequences of doing so for our democracy after the decision.) Then they have three options. All of them are unpalatable politically for Republicans.

1. If they strike the mandate and the regulations that prohibit insurance companies from denying insurance or health care to people with pre-existing medical conditions or charging us more for such insurance, the Court will come under attack from the 85% of Americans who support this law. Thus it will create an extraordinary campaign issue for President Obama. Obama and Democratic Congressional candidates will run against the Court and in support of proposals that are hugely popular. And the ACA—which has not benefitted the President politically as much as it should have because the mandate  is unpopular—will now very much be in his favor. The election may not turn on just this one issue. But the odds of the President being reelected will go up.

The political consequences for health care reform of this decision are problematic. The President will move to restore those insurance regulations along with one or more of the plausible replacements for the mandate. But without a majority in the next House and a 60 vote majority in the next Senate it will be very difficult to pass such legislation unless the outrage against the Court is so great that Congress can’t withstand it. I’m not confident that the American people are at the point where they are outraged enough by Republican proposals to generate the heat that forces Congressional Republicans to act.

Another problem for the Court of striking the mandate and the insurance regulations is that the grounds for doing so will be that the insurance regulations won’t work without the mandate. But that is to admit that the mandate is constitutional. After all, there is almost no question that Congress has the right to regulate insurance companies. So if they say that these regulations won’t work without the mandate, they are basically accepting that the mandate is a necessary to implementing these regulations under the Commerce Clause. If they say that the insurance regulations are themselves unconstitutional, the Court will be going so far in radically reinterpreting the Commerce Clause that huge numbers of government regulations, including many that businesses support, will be called into question.

Note that striking down the mandate and insurance regulations still leaves much of Obamacare in place. The remaining portions of the law will expand Medicaid to cover individuals and families with incomes up to 130 percent of the poverty line ($11,170 for an individual and $29,965 for a family of four). The insurance exchanges, which will increase fair competition between insurance companies while allowing individuals and small businesses to purchase insurance at the same rates big businesses receive, will go into effect. Subsidies to make insurance more affordable to individuals and families between 130 and 400% of the federal poverty line family ($44,468 for an individual and $92,200 for a family of four.)  Young adults 26 and under will still be able to remain on their parents insurance. Seniors will still see their prescription costs decline. And everyone will benefit from free preventive care.

2. If the court strikes the mandate but not the insurance regulations, the situation for health care policy is better. The insurance companies are going to be extremely upset if the mandate that creates new customers for them are overturned but they still have to provide insurance to everyone and without charging more to those who are older or women. The insurance companies thus may become allies to Democrats who want to find an alternative to the mandate that encourages people to purchase insurance.

The consequence of this second alternative is not as good politically for Democrats. Obama won’t have a huge issue he can take into the election. But Obamacare will be freed of the one proposal that makes it unpopular, the mandate. As a result, President Obama and Democrats will be more likely to talk up the benefits of health care reform in ways that benefit them politically.

3. The third option is to strike the whole law. This has all the political costs to Republicans of striking the insurance provisions and even more, because the expansion of Medicaid and the subsidies for health insurance are also popular.

But the political consequences for health care reform are devastating. The likelihood of Democrats being in a position to enact health care reform and having the courage to do so anytime in the near future is low.

So what will the Court do if it makes a political decision? That depends on whether you think the Republicans on the court are more likely to focus on the partisan politics or the interests of corporations. If they care most about partisan politics, they will choose option 2 and strike the mandate but not the insurance regulations. If they care most about the interest of corporations, they will strike both the mandate and the insurance regulations.

They should leave the whole law alone. But if they make a political decision, I think it will be to strike just the mandate.  

There are good policy arguments both for and against the wage tax rebate. I’ll come to some of them in a moment. But, frankly, at the moment those arguments are secondary. The key reason not to repeal the legislation tomorrow is that the decision to put off AVI for a year means that Council is going carry out a broad examination of taxation in the city next year. The Cohen wage tax rebate is not scheduled to go into effect until 2016 anyway. So there is plenty of time to reconsider it as we think through the future of taxation in Philadelphia.

Any city like Philadelphia has to balance considerations of progressivity and economic growth. While, progressive taxation has very little negative impact on economic growth in the nation as a whole, and relatively little in states, it can have an impact on cities. If city taxes fall too much on people with higher incomes and businesses, then they can move with their feet.

On the other hand, when a quarter of our city or more is poor, a reduction in taxes targeted at those with low incomes really helps people who are struggling at fairy low cost.

AVI, when implemented, will make our taxes more progressive and help low income folks. Its’ impact might be greater than a targeted wage tax cut. So, had we implemented AVI this year, I might have been less concerned about losing the Cohen wage tax rebate.

But, now that we are waiting for AVI—and while we are uncertain whether it will ever be implemented in a progressive fashion—here’s good reason to keep the Cohen wage tax rebate on the books and reconsider it as part of a complete overhaul of our taxes.

One last point about the virtues of the Cohen wage tax rebate: Given that our tax system is, on the whole, regressive, the Cohen wage tax rebate is a way to add a little fairness that actually helps our city’s economy, especially in the neighborhoods.

To see this consider that a Keystone Research Center Report showed that : (1) only about 63% of an across the board tax cut would go to city residents. The rest would go to commuters; (2) 20% of that 63% would go to the federal government in the form of higher income taxes because high income Philadelphians lose some of their wage tax deduction; (3) only 70% of the remaining amount would be spent because Philadelphians on average save 30% of their marginal income. Add it all up and only 25 cents per dollar of any across the board tax break is spent in the citiy.

On the other hand, (1) 84% of a wage tax rebate to low income residents goes to city residents rather than commuters; (2) almost none of it is lost to higher federal taxes; and (3) low income residents Philadelphians save only 5% of their marginal income. Thus 60 cents of a dollar of a wage tax cut targeted at low income residents is spent in the city. Local businesses, especially in the neighborhoods, benefit as a result.

There are lots of other considerations, both for and against the Cohen wage tax cut. The key point for tomorrow however, is that there is no reason to rush. Let’s have a real debate about his policy idea in the context of a broader debate about tax policy in the city. Let’s not rush to repeal this legacy of one of the great leaders of our city.

So, give your member of Council a call and ask him or her to vote against repeal of the Cohen wage tax cut tomorrow. You can find contact information for council here: http://www.phila.gov/citycouncil/CouncilMembers.html

I saw her for the first time in the fall of 1972 as a college freshman—sitting right in front of her at McConaughy Dining Hall as she sang, played guitar and joked around. I was 16, she was 22. (Maria Muldaur, who had just released Midnight at the Oasis, was the warm-up!). I developed a bit of a crush. And I’ve admired her voice, musical choices, activism, and sense of humor ever sense.

Amazingly enough, I’m 56 and she’s 62 now. And at least she has aged well! Her voice was never that full and she’s lost that the beautiful purity of her high end. But I enjoy her singing more than ever. Her voice is more her own: more breathy on top and reedy  in the middle, fuller, and when she wants it to be, a little  husky  at the bottom. And she’s a far more skilled and affecting singer than she once was. As a young woman she took on the style and manner of  her blues heroes, although always with her own twist. Over the years, and as she’s broadened her repertoire beyond blues and blues-folks tunes to an extraordinary range of contemporary standards that draw on a wide range of traditions,  she’s pared back those influences a bit and developed an individual approach. And the key to it is that she gives every lyric the attention and individual approach due it.

Her choice of material is always impeccable. Raitt is also one of those singers to whom you go to find good songs that you might not hear otherwise because they aren’t written by famous performers. She interprets them well and, often with arrangements that bring out their best. Her band is absolutely tight.

(If I have one wish, however, it is that she would [ut aside some of the chestnuts she’s been touring with for a decade and explore parts of her book that she’s ignored for some time,  including those early blues tunes. Given how her voice has changed, she may be reluctant to go back. But I suspect her devoted audience would not expect to hear what we did forty years ago, but would love to how she would approach them today.)

She played mostly tunes from her new album which is one of her best as well as some of the popular tunes she’s been touring with since Road Tested.

She was performing in the Academic of Music—our 1890s opera house and concert hall—for the first time, although she said she was in in first in it when she saw The Band in 1969. And in recognition of its heritage she gave us a bar or two from Ave Maria as she walked out on stage. (She lived in Philly for a few years at 17^th and Lombard.) And she was impressed. I had binoculars and I noticed that in the first tune she looked down. At the start of the second tune she looked up briefly and said “Oh, shit.”  A minute or so later she looked up again to the top of the office and said “oh, wow’  with a great big smile. And a few tunes later she walked over to her guitar player during a break and said something like , “Look up, look at this place.”

She talks constantly between tunes and is still funny and charming, just like she was the first time I saw her. She joked about many things, including “putting on lipstick” before one tune-although I gather it was lip balm. When her guitar guy came out to give her a different guitar, she thanked him and said something like: “He’s here so we didn’t have to waste your time tuning between songs…and so that I can bullshit with you.” She’s generous—constantly introducing and featuring her band, dedicating songs to a sick guy in the audience, to AFSC which is based in Philly and with whom she’s worked for years, to Damon Williams, Ruth Brown’s nephew and the Executive Director of the Rhythm and Blues Foundation, and to a couple who were about to get engaged. She thanked us for coming out to see her over the years, “even when she doesn’t have hit album” although it appears that Slipstream is taking off. And  her last words were about the election and a reminder that we need to “keep going forward.” This crowd didn’t need a translation.

Mavis Staples opened and was wonderful, although her voice showed some signs of strain. One sign of Bonnie’s respect for those whose musical traditions she draws on as was  that she came out early to  join her for Will The Circle Be Unbroken, rather than have Mavis Staples come back during her set.

Staples  told a funny story about how she was once jealous of Bonnie because Pops had taken a liking to her. And then she talked about how she got she got even when she met Bonnie’s father, John Raitt. When Bonnie came on she said she’d hadn’t known about that but remembered thinking it strange that, when her father had traveled with her on the previous tour with Mavis, he said something about sometimes wishing he wasn’t married. Bonnie also said that her father would steal every show by singing Oklahoma.

As I said, I have no capacity for objectivity about her. But on the Platonic theory to which I subscribe, love is not blind but rather, that which enables you to see the truth in and of others. So I have no doubt that Bonnie Raitt really is just wonderful.

PS Just found the set list online:

01 Used To Rule The World
02 Right Down The Line
03 Something To Talk About
04 Million Miles
05 You Can’t Fail Me Now
06 Love Sneakin’ Up On You
07 Come To Me
08 Marriage Made In Hollywood
09 Not Cause I Wanted To
10 Angel From Montgomery
11 Thing Called Love
12 I’ve Got News For You (Mike Finnigan lead vocal)
13 I Feel So Damn Good (I’ll Be Glad When I Get The Blues)
14 Down To You

Encore:

15 I Can’t Make You Love Me
16 Not The Only One
17 Have A Heart

I’d add one point–one of the great things about getting older (and deciding that you are never going to run for office again) is a certain freedom about having to appear serious. My young friend was wrong six  years ago. There is little to be gained in life from solemnity and taking yourself too seriously to poke a little fun at your own foibles and weaknesses. Even, perhaps especially if you want to lead others, it helps to show a little recognition of our common, shared humanity, and vulnerability.

She was probably right about the Viagra line. I wouldn’t write it today because it’s not a good joke. But too late to re-write history….

I turned fifty nine months ago. When people ask me, I have been saying that growing older is not fun. That’s partly because I see what growing older has meant to my parents and mother-in-law, who have been suffering from the pain, uncertainty, diminished capacities, and, sometimes, the indignities that seems to come with reaching the late seventies and eighties.

I have been thinking about this subject today because I just finished taking apart and putting back together my cell phone / PDA. I, perhaps foolishly, decided to replace a backup battery myself. I have, or used to have, the technical skills to do this. But I forgot one thing: my vision has deteriorated over the last ten years. I have been near-sighted since third grade and in the last ten years, have almost totally lost my near-point. So it is almost impossible for me to see the tiny screws that hold the phone together, let alone the bracket that hold the backup battery.

My eyes started going a while ago. Lately I have noticed I don’t hear as well as I used to, especially in noisy environments. So far sex is not a problem without chemical enhancement, knock wood (sorry). But it is different in ways that are mostly but not always for the better. And worst of all, I recover very slowly when I get banged up. A few years ago I fell while running to get on the R7. Twenty years ago I would jumped right up and been fine the next day. But this time I was in pain for about two weeks with some bruises and cuts.

I am old enough to complain with my friends about the younger generation. And of course, one of the things we say is that youth is wasted on the young. If only the young realized that some day their bodies would fail them they would appreciate what they have now.

Today, however, I realized that there is something wrong with this folk saying. Think about it. If you knew in your twenties how and when your body was going to fail in the future, how would you have lived your life differently?  Would you spend a lot more time looking at tiny objects? Would you make an effort to hold more conversations in noisy rooms? Would you try to get banged up more often? Would you spend more time having sex?

In our sex obsessed culture, maybe we would answer yes to that one. But, really, one of the things we do learn as we get older, and hopefully long before our body fails us, is that not every sexual opportunity is meant to be taken, even if what we are after is the physical pleasures of sex, and even more so if sex is a way of deeply connecting with other people.

So, I’m never going to say that youth is wasted on the young again, at least in so far as their bodies are concerned. And, I’m not all that worried about their souls. Over the last six months I have met an incredible group of young men and women, mostly associated with Philly for Change, who have a devotion to public life in general and this city in particular. They have been willing to put their bodies and souls on the line to make life better here.

Again, the older generation is quick to kvetch and point out that these kids don’t yet have the family and job commitments that would make it hard for them to spend days and nights politicking. But the fact is that they have lives as well, careers to develop (bar exams to take, dissertations and novels to write) as well as relationships to create. And, in many cases, they have put these things aside to learn the difficult art of politics.

They are, some of the time, infuriating in their naïve idealism and in their obsessions, which occasionally clouds their judgment. But that is precisely what youth is for—to make impossible demands and ask all those questions that as we age we sometimes forget to ask.

It also is a time to learn, and these young men and women have been farsighted enough to seek out and engage people older than themselves, who can once in a while give them useful advice.

So as far as these young men and women, youth is not being wasted. I see it being exploited it to its fullest. Those of us who know them are better for their company. And, soon enough, the whole city will see that as well.

And, as for my phone, well I found a bright place and found the right spot where I can still see well enough at short distances to open the case and then put the backup battery plug in the bracket. I’ve discovered, too, that just taking off my glasses gives a bit more near focus than I would otherwise have. So the procedure went forward. I almost got stuck when I dropped one of the screws that hold the whole thing together. But I borrowed the eyes of my 13 year old daughter to help me find it. And, thanks to this cross-generational collaboration, it is working again.

So much has gone wrong in the city’s move to the Actual Value Initiative (AVI), that many people are fearful about its consequence. And one of the things that has gone wrong is that people who know better are playing on this fear for their political purposes,

I think the fear is over blown. AVI is a good thing if it is implemented properly and I think it can be implemented properly this year.

The biggest step to tax fairness Philly will ever take.

The most important thing everyone needs to understand about AVI is that it is the biggest step to tax fairness Philly will ever take. It corrects decades of property assessments that were biased, corrupt, and unfair. The unfairness was both systematic and random, a result of political corruption and incompetence. People and businesses that were connected got good low assessments from the city. People and businesses that were not connected got higher assessments. People who had assessors that were angry or drunk or dumb got assessments that varied a great deal from reality. The result was that on any given street, assessments for two similar houses could be wildly different.

Even worse than the random unfairness was the systematic unfairness: city wide, assessments, and taxes, relative to market value were higher in poor and working class neighborhoods than in upper middle class neighborhoods.

The Actual Value Initiative corrects this inequity in two ways. First, it required a complete reassessment of every property by a new, professionally run agency, the Office of Property Assessment. Second, instead of assessments being a fraction of the actual market value, they will now be actual market values. It will thus be easier for us to determine if our assessment is unfairly high.

Progressives have talked for years about making taxes more progressive in the city. We supported the Cohen Wage Tax Rebate and other policies. But, there is nothing we could do that would reduce taxes for poor and working class people more than moving to AVI. That’s why, unless there is a very good reason to delay, we need to institute AVI this year.

Some people will pay more under AVI even if we don’t try to raise another $94 million for the schools though the property tax this year. But the truth is that they should pay more because their taxes have been too low relative to their neighbors. (I’m one of them and frankly, I should be paying more.) But the systematic bias of the system against working class neighborhoods means that, if implemented properly, about half the homeowners in city will see their taxes go down. Estimates provided by Councilman Goode suggest that about 250,000 homes have a value below median of about $120,000. The vast majority will see their taxes drop. Almost all will do so if Council and the General Assembly implement a homestead exemption at least $40,000, which will deduct that amount from the assessed value of every house before taxes are calculated.

We have the information we need

Some of those people who should know better have been carrying on about how we need to delay because the city has not released assessment data for every property.

It is true that in an ideal world we would have all the information about the reassessments before moving forward to AVI. But, because of incompetence at the Board of Revision of Taxes, the city had to restart the assessment process last year and final assessments are not ready. It would be a mistake to release property by property assessment information until they are checked and cross-checked because that will lead to anger about assessments and appeals.

At any rate public policy should not be made to benefit any particular homeowners. That’s what was wrong with the assessments we must replace. What we do need to do is set general policies that are fair to everyone. And in the last week or two we have received enough information to make those judgments. Some additional fine tuning may be necessary next year. Moving to AVI need not be once and done thing. But we have enough information to make the horrible, corrupt, crazy quilt lack of system that’s been in place for 100 years a whole lot better.

We can take account for inequities in the transition: the commercial to residential shift.

There are always issues in the transition to a new tax system. Councilman Green has, rightly, warned us that AVI will shift some of the tax burden from commercial to residential property. (I initially had some doubts about this given that many businesses made sweetheart deals with the BRT. But I’ve looked at Councilman Green’s numbers closely and did some spot checking of commercial assessments and determined that he is absolutely right.)

This is an unfortunate consequence of both moving to a fairer system of taxes and of Pennsylvania’s uniformity clause which prohibits us from doing what many cities, such as New York, do, taxing commercial property at much higher rates than residential property.

There are long terms ways to deal with this issue such as moving to Land Value Taxation (LVT). But Councilman Green has proposed two short term fixes that can be instituted this year. The first is a higher homestead exemption which will reduce the burden on residential property.

Green’s second suggestion, to raise the additional money we need for the schools through the Use and Occupancy (U&O) Tax instead of the real estate tax is also a very good idea. It will further minimize the size of residential to commercial shift next year. The proposal also deals with the whole issue of whether the administration has been trying to raise revenues for the schools through a “back door tax increase.”  I personally think the charge is overblown. But it may not be possible to save the Mayor’s proposal now.

We can take account of inequities in the transition: neighborhoods with increasing real estate values.

Councilman Kenney has pointed out that even if the old system was grossly unfair, there is also some unfairness when people who have planned their lives around it are forced to adjust. That’s especially true for long term residents in neighborhoods where real estate values have been rapidly rising, such as gentrifying neighborhoods in South Philly.

Council President Clarke has introduced legislation that will cap taxes for people who are long term residents in neighborhoods with rapidly rising property values. I don’t have the detailed information to make a recommendation about exactly who should be eligible for the cap. But I don’t see any reason that Council can’t find a reasonable solution.

The situation is different for people with middle and upper middle class incomes whose houses have in some cases doubled and tripled in value. There is no question that some of them will be stretched to pay much higher property taxes. Yet, when they sell their houses, many of them will make hundreds of thousands of dollars, a profit that is in some part the result of public policies that have helped spur development in their neighborhoods. The city already has in place a program that enables people in this situation to defer part of their property tax increase at a low interest rate. Few people take advantage of it. Some Council members are trying to figure out how to modify it to make it more accessible to people. Others want to reduce the interest rate. If properly designed such a program would enable people to put off a portion of their property tax until they sell their home. That would reduce but by no means eliminate the large profit they will have made on their homes.

These fixes need to be included in legislation this year—although some of them, such as the deferral program, do not have to be put fully into place until the fall.

A final goo-goo objection rebutted

A final objection to moving to AVI this year is that the city is not following a sound procedure because the tax legislation introduced by the Mayor calls for setting a revenue target and then letting the tax rate be whatever it takes to meet that revenue goal once we find out the final total value of property in the city.

It is true that the usual practice is to for Council to set a tax rate knowing the total property value and with an estimate of how revenue will be generated. But, through no fault of anyone in office today, we can’t do that. And, at any rate, most of the people complaining about this procedure are the same ones who insist that the move to AVI be revenue neutral—that is not raise more money through the real estate tax than we before the shift. This is an utterly inconsistent position for the only way to move to AVI in a revenue-neutral manner is to set a revenue goal and then let the tax rate be whatever it needs to be.

This objection—like the insistence on revenue neutrality itself is—I believe a dodge put forward by people who are posing as opponents of AVI precisely because they know that some people are going to pay more in taxes, will be angry about it even if they have been under taxed for years, and might be motivated to punish incumbent office holders as a result.

This is terribly unfair and dishonest. And it puts our priorities out of whack. Revenue neutrality and full information about every parcel—which is not necessary to make broad policy decisions—are not the only values at stake.

Ending the corrupt and unfair assessments and finding money for our schools are the most important things Council should do in dealing with taxes this year.

The complications arising from having to attain these goals now, without final data for every property, will make the transition to AVI a little more difficult but not impossible for us to evaluate once the final numbers are available.

The problem with not moving forward this year

Finally, it strikes me that some of the people who are most vociferous in calling for a delay have a hidden agenda: they really don’t like the idea that we are finally going to lift the excessive tax burden off poor and working people in this city.

There are ways—I’m not going into details—to put the unfair burden back on those from whom AVI would remove it. But there is at least one “progressive” who a month ago was supporting a high homestead exemption who is backing away from that support now that it has dawned on him that the policy means that his well-off neighborhood will pay higher taxes.

One reason upper middle class liberals like me insist on government transparency is that we are prepared to analyze and utilize the data government provides. People and community associations in poor and working class neighborhoods don’t have the capacity we do to make use of that data. Nor do they have the same capacity to give campaign contributions to or lobby Council members.

That’s why I think it is imperative to figure out the best way to move to AVI and to do it now. The burden of proof—and the need to round up 9 or 12 votes in Council to make further changes in the tax system—should fall next year on those who want to make changes to the fundamentally fair  system AVI will create.

We probably don’t have a choice anyway

At any rate, Council may not really have a choice but to move to AVI. Whether we use new the property values for real estate taxes is actually up to the administration not Council. Once the administration certifies those values, they go into effect for the next budget year. Because AVI sets assessments at the full market value—which is substantially higher than the fractional value used now—tax rates have to be dropped by about a third to raise the same amount of money. If Council does not act—or if the Mayor vetoes whatever action Council takes—tax rates from last year will go into effect. That means that our taxes will go up by roughly three times.

Council could do nothing and then dare the Mayor to certify the new values. But the Mayor is a lame duck while Council members will be running for reelection in three years. That may not be a gamble Council wants to take.

And, at any rate, even if the administration does not certify the new values, the city could be forced to do so by the courts which shown themselves willing to call into question unfair assessments in Pittsburgh. It would be difficult to explain to the Pennsylvania Supreme Court why Philadelphia won’t use fair assessments instead of the unfair ones in place now.

Let’s move ahead and be proud of what accomplished

I doubt, however, that it will come to a court case. Council has been handed a difficult task by the Mayor. After talking to some members of Council last week, it strikes me that they are dealing with the issue in about as a sensible way as one can imagine. Different members have been pointing to different aspects of the issue and have been putting forward the data we need to evaluate the project as a whole. And a consensus slowly seems to be emerging in support of setting tax rates appropriate for AVI while also creating some of the protections discussed here.

There is much that Council needs to do this month. But despite recent difficulties, I’m optimistic that we’re going to get where we need to go. Dealing with AVI is a major test for the new members of Council, and especially for new Council President Darrell Clarke. I’m a lot more confident this week, that they will rise to the challenge.

And when the dust has settled—and when people get used to their new tax bills—we might even be proud of creating a property tax system that finally end the radical injustice of the existing chaos.

(This is the second time in a few weeks I’ve disagreed with Ferrick so let me just say that he’s one of the few writers on Philadelphia politics who is truly indispensable. He make me think hard when I disagree with him. If you don’t read Metropolis, you should.)

The end of The Deal

Ferrick argues that in moving to AVI, Philadelphia is about to undo what he calls “The Deal.” The Deal is the implicit bargain that the city has made with homeowners: we will pay a stiff wage tax which people don’t pay in the suburbs as well as an extra 2% in sales taxes. But in return our property taxes will be substantially lower than those found in the burbs.  Moving to AVI, Ferrick says, means breaking the deal: “Without any commensurate decrease in other taxes, the average homeowner/wage earner in the city is about to be screwed vis a vis their suburban counterparts.”

Understanding what is really changing

I’m going to argue that the numbers Ferrick uses to support this claim are faulty. But, before getting to the numbers I need to clear up some preliminary matters.

The first is that there is nothing about AVI itself that changes The Deal on average. Leaving aside the Mayor’s proposed $90 million increase in tax revenues to pay for schools—which is an increase in overall tax revenues of only 7%— AVI by itself doesn’t increase average real estate taxes. But what it does do is make our taxes fairer. For years the city fathers who set assessments have systematically over assessed, poor and working people and under assessed upper middle class and rich Philadelphians (and commercial property as well). We’ll see in a moment that this disparity plays an important role in understanding the problems with Ferrick’s numbers.

AVI however, does make it likely that our real estate taxes will go up eventually—fair tax assessments are going to rise with rising property views. But if that happens, one should note that the city has in fact begun to reduce other taxes. The wage tax was once 4.96 percent. It is now 3.39. (Some of that reduction is due to state gambling money, some is due to decisions by the city. But since we are comparing city and suburban taxes, and suburban property tax increases have been limited by the same gambling revenues, I’m going to ignore that complication.) So the truth is not so much that the city has broken The Deal but is renegotiating it. We shall see that whether a renegotiated Deal is a good one or not depends on how expensive your home is.

The third point to note is that this renegotiation was central to the plan put forward by the Tax Reform Commission (TRC) a plan that Tom Ferrick (and Brett Mandel and others who are calling AVI into question now) supported. The tax reform commission claimed that The Deal was bad for city because people can move but property can’t. Relying on wage and business taxes rather than property taxes drives people and especially highly paid people from the city. The TRC said we should make Philadelphia a city like all other cities. We should reduce wage and business taxes would lead more people and businesses to move to Philly. This would then lead to an increase in property values and property taxes. And those new tax revenues would enable the city to maintain services despite the reductions in the wage and business tax.

It would have been nice to see Ferrick and Mandel and others recognize that they have long supported this new Deal and that the other side of the renegotiated deal, the decline in wage and business taxes has already begun.

Ferrick’s example

With these preliminaries out of the way, now we come to the bizarre aspect of Ferrick’s article. He proposes to demonstrate how breaking The Deal hurts Philadelphians by comparing a hypothetical family with an income 75,000 located in two properties.

The first is a single family home in Havertown with a market value of $165,000. The second is a town house in Philadelphia with a market value of $485,000. Ferrick calculates that in the Havertown house the family would pay $6272 in property taxes and a $175 trash fee for a total of $6447 or 8.6% of their gross income in taxes. In the Philadelphia house this year, the family would pay a property tax of $3289, a wage tax of $2925 and additional sales tax for a total of $6214 or 8.29% of gross income. Thus, before AVI, The Deal seems to work: taxes are about the same whether you live in Philly or Havertown.

After the implementation of AVI, however, Ferrick estimates that the real estate taxes on the Philadelphia house will go up to $5100 and the total tax goes up to $8025 or 10.7%. The end of The Deal does seems to screw someone.

Something strange is going one

Or does it? Look again at this example and you will see there is something bizarre about it. Why is Ferrick comparing a couple who own a 165,000 home in Havertown with a $485,000 home in Bella Vista? Well, the initial tax comparison comes out even before AVI, but why would one choose to compare two homes that must be different not just in cost but in their size and amenities? And, by the way, how would a family earning $75,000 possibly afford the mortgage on a $485,000 home? (Ferrick said they had a lot of help from “Mom and Dad” but while little addition explains the oddity of the example, it doesn’t justify using it.)

Comparing $180,000 homes in Philly and Havertown

So let’s look at a few other sets of examples. (I’m going to follow Ferrick in assuming that our tax rate under AVI is going to be about 1.25% of market value. We don’t know that for sure, but it’s a figure that a lot of politicos have been using.)

Let’s start by comparing two homes at about a price of $180,000.

The first is a twin with 1248 sq. ft. 19 Mill Road in Havertown on a .07 acre lot that is listed for 179,000. It has 3 baths and 1 bathroom. I don’t know the neighborhood it is in although the description says that it is in the heart of Havertown and within walking distance to a library, schools, restaurants and transportation. For our purposes, let’s also stipulate that the public schools are fine and that it one can get to all the other amenities typically found at those lovely suburban strip malls with a short drive.

http://www.weichert.com/42388467/?cityid=22509&ptypeid=32&minpr=150&maxpr=200&view=gallery

The second is a row house with 1194 sq. ft at 7125 Bryan Street in West Mt. Airy that is listed for $185,000. It’s also a 3 bedroom one bath home but on a .03 acre lot. I know this lovely residential street well. It is a block from the central business section of Mt. Airy on Germantown Avenue. You can find a few good restaurants on that block as well as a bar with one of the best beer lists in Philadelphia, McMenamin’s. Bryan Street is part of one of the best neighborhood associations in the city run by my friend Steve Stroiman. The house is about four blocks from the Houston School, which is considered a pretty good elementary school—it is certainly one that draws kids from outside its catchment area. There is also has a beautiful five or six year old community / school playground built with the support of West Mt. Airy Neighbors.

http://www.realtor.com/realestateandhomes-detail/7125-Bryan-St_Philadelphia_PA_19119_M48342-15664

I’ve calculated taxes for three years: 2005 and 2012 before AVI and 2013 after AVI., adjusting income according to the CPI. (I had to make a rough estimate of property taxes in Havertown for 2005 but I think it is reasonably accurate).

What does this show us? Total taxes were a little higher in Philly than Havertown in 2005. Because our wage tax has been going down, by this year the taxes are roughly the same. After the institution of AVI, however, the gap widens again. But it remains relatively small. Once the recession ends, and we are able to start reducing the wage tax again, the difference will drop again.

So for people living in comparable $180,000 homes, it doesn’t look like renegotiating The Deal is going to be such a big deal after all.

Comparing $450,000 homes in Philly and Havertown

Now let’s look at another comparison, at a higher economic bracket. We’ll compare the 485,000 house that Ferrick looked at in his piece with a $459,000 house in Havertown.

http://www.realtor.com/realestateandhomes-detail/28-Llandillo-Rd_Havertown_PA_19083_M32239-37321

To make this comparison sensible, I’ve assumed that the families have an income of 180,000 which would enable them to carry a mortgage on this property. (No Mom and Dads ex machina in this example.) And since people in income bracket typically itemize deductions, I’ve credited them with federal tax benefit of 25% of their wage and real estate tax.

At upper incomes, folks in Philadelphia now pay about $1300 or .75% of their gross income more in combined taxes than similarly situated people in Havertown. So The Deal has never been as good for those with more expensive homes than those in the middle. After AVI that difference will increase to $2600 or 1.5% of income. The next round of wage tax cuts is likely to reduce the difference to where is now before AVI.

Is the difference between taxes in Havertown and Philadelphia at this higher economic level too great? Well, if you had an income of 180,000 would it be worth it for you to pay an additional $2600 to live in Bella Vista rather than Havertown? Note that we’re assuming you work in Havertown. If you commute to Philly, the commuting costs most likely eliminate the tax difference. (And I haven’t taken into account that most two-adult families in the burbs need two cars but that is not true in Bella Vista.)

Well, I don’t know about you for $2600 a year, I’d never have a second though about living in one of the great neighborhoods of our city instead of Havertown.

Looking downscale

And finally, let’s just take a quick look downscale. Keep in mind that the average selling price for homes in Philly this year is about $115,000. So, precisely because it makes assessments fairer, AVI will reduce taxes for those with homes valued at a little above the median and downward from there.

Here is one example, a 3 bedroom, 2 bath home in SW Philly on Belmar Terrace. It is listed for sale at 65,000. Its current taxes are now $889. If it sells for 65,000, its taxes under AVI will likely go down to $812 or $625 if you include the 15,000 homestead exemption the administration has proposed. (I haven’t taken into account the homestead exemption in the other examples since the impact of the exemption would be minimal and we don’t know how adoption of it will affect the overall tax rate.)

http://www.realtor.com/realestateandhomes-detail/5502-Belmar-Ter_Philadelphia_PA_19143_M33956-69300

What went wrong in Ferrick’s analysis?

Once we compare like properties, it becomes clear how and why Ferrick’s examples have gone wrong and mislead him. He wanted to compare people paying similar taxes now. But that led him to use as one point of comparison a $485,000 Philadelphia home, a prime example of a property that has benefitted from the upper class bias in assessment. (He could have found many others.) The property taxes there are only 64% what they would be under a fair assessment.

At a house valued at $185,000, however, the current property tax is 78% of what it would be under a fair assessment. And the current taxes of a home valued at $65 are 40% above what they should be.

So, yes, once we start talking about home worth $480,000 and above, AVI is going to do exactly what it is supposed to do. It’s going to correct for unreasonably low taxes. And thus the end of The Deal is going to cause some hardship for people with houses worth that much money. We can debate about whether such people are being “screwed” or not—I would suggest they have the resources not only to handle the higher taxes but to really take advantage of Bella Vista. Thus that they are not going to be rushing to move to Havertown after AVI comes on-line. But whether this counts as being screwed or not, I would insist they are not representative of the “average homeowner/wage earner in the city.”

Once we look down the income scale to middle class homes, the end of The Deal does not look like it’s going to harm people very much. And if we can keep bringing down the wage tax, the small city / suburb tax gap that emerges with AVI will close again. Thus the end of The Deal is not a deal breaker for middle class folks.

And when we look at less expensive houses, the kind lived in by a majority of homeowners in the city, the end of The Deal looks like a good deal. AVI is going to provide real benefits for working people in the city.

Two final notes

The one qualm I have about AVI is that it is going to make life difficult for two groups of people. The first is those who will see increases in their taxes they had no reason to expect until a few years ago. Some of those folks live in houses worth $400,000 and above. There is some unfairness in this. But the answer is not to end AVI but, rather, to phase it in a bit more slowly.

The second group is people with middle incomes who have managed to hang on in gentrifying neighborhoods. They are going to see sharp increases in property taxes that they may not be able to pay. The answer is to allow them to defer the tax increases, with interest, until they sell their house. Long term interest rates are very low now. The city could float bonds to cover the lost tax revenue and thus allow people to defer higher tax payments at a relatively low interest rate. Someone whose property values have jumped will be able to stay in their homes.  They’ll leave a smaller estate to their kids. But anyone who has seen their property values rise enough for this program to make sense to them will still be able to hand their children a nice capital gain—on which they will pay no federal taxes.

These politicians are often criticized because they don’t have a lot of legislative achievements. They don’t have a long list of bills with their name on them. And so they are criticized—sometimes by other legislators and often by journalists—for being all talk and no action.

(Interestingly enough, legislators who are all action and no talk are also criticized, often because action requires not only compromises with other legislators but deals with special interests. Journalists, it seems, can always find some basis on which to criticize politicians.)

I want to point out, however, that do-nothing legislators are sometimes really critical to political and social progress.

Just how important they are came back to me the other day when I attended a press event put on by bunch of progressives in Philly. I wasn’t in on planning it and when I heard about it, I encouraged the planners to delay because I expected exactly what happened: the event got very little press. One reason they got so little press is that they had not managed to recruit any political leaders to speak. For one of things we advocates learn about getting press coverage is that we are likely to get a reporter in the room if we can find an office holder to attend our press event.

This can be a hard lesson to learn because, quite frankly, issue advocates often have a bigger impact on legislation that run of the mill legislators. I know a political director for a major union who has rebuffed requests to run for state representative because he “didn’t want to give up a lot of influence just for a title.” I learned this lesson early in my career as an issue advocate when a few community leaders and I organized an effort to save two historic building on Johnson Street and the Inky reporter gave our state representative—who basically showed up for the picture taking—all the credit. I asked the reporter what was going on and he just said, “I know you did all the work, but the public cares about where political officials stand.”

(During the health care campaign, a reporter told me he didn’t like to cover “artificial”  events. What he meant, though, was that our artificial events were not exciting enough.  I once got world wide press for an event in Philly I organized with Action United and PUP. We broke a half dozen laws and took over Aetna’s annual meeting at a Philly hotel. That was as artificial event  as I’ve ever done. But the reporter who criticized us for other events couldn’t get enough of it.)

So legislators who are willing to push the envelope on public policy—and who have little influence in the legislature—help us get attention for our causes with the press. That’s not our choice—it’s how the press works. They also help issue advocates in so many other ways. They get people to come to our rallies and marches and conferences. They bring out people to our fundraising events. And the price they charge for all this is pretty low: they get to give a speech—and most of them are pretty good speakers—and sometimes they get to take home a plaque.

Does all this do-nothing work really amount to anything? It sure does precisely because very little good happens in our legislatures if we issue advocates can’t get the attention of the press, which creates the discussions that move public opinion.  Little good happens in legislatures if we issue advocates can’t mobilize people to lobby legislators or march or rally. And we can’t get press attention or mobilize people if we can’t pay our staff or phone bill or internet services. Do nothing legislators are really helpful to us. And thus they are to the public as well.

Do nothing legislators also help elect other legislators who share their views—or who can led to share their views by encouraging voters and campaign contributors  to support them.

If you’ve read this far, you may realize that this piece is inspired by a recent criticism of Babette Josephs written by my friend Chris Satullo. But I don’t really mean to defend Babette or again take sides in the recent election. For my guess—indeed my greatest hope—is that Brian Sims is going to be a really great do-nothing legislator. Just by virtue of his being an out gay man, he already is. He’s well on his way to being an effective speaker who will draw people to events and raise money and otherwise help progressive activists push the envelope. If we are all lucky, someday he’ll have a chance to be legislator who actually does play a role in enacting legislation. But one way or the other, he’s going to have a great impact on our politics. And if he never advances beyond do-nothing legislator, I hope that, when the press and his constituents get tired of him, he will go out with the kind of class Babette is showing now.

It shouldn’t surprise us that a lot of journalists don’t know what do nothing legislators do. Great journalists are great story tellers who like heroes and villains. But great stories tend to oversimplify. The same story telling instinct that leads journalists to give legislators good at the inside game too much credit for legislative success and to minimize the impact of issue advocates, large political trends, and impersonal historical forces gets in the way of their understanding what do nothing legislators do. If you want to tell a good story about how the Civil Rights Bill of 1965 and Medicare were passed, you start and end with Lyndon Johnson’s legislative legerdemain overcoming Senator Richard Russell’s conservative coalition. If you want to tell the real story,  you start by talking about the role of unions, the civil rights movement, and the huge Democratic majority. And you can’t leave out the role of do-nothing legislators like Hubert Humphrey who talked about civil rights when no one in Congress was listening to them. It’s a lot longer, messier story.

But that’s OK. Journalists have their job, political scientists have their job, and we organizers have our own. Still it’s important for legislators, organizers, and most of all citizens who might be motivated to become activists just how important the work they do is, and how important do nothing legislators are to that work.

Throughout the health care campaign, I would tell our activists that, some day in the future their kids of grand kids would come home from school and say that Barack Obama passed health care reform in 2010. I told them they would know the truth: they passed health care reform with the help of Barack Obama. I would add now, also with the help of a bunch of do nothing legislators who, for years, helped keep not only the dream of health care reform, but the organizations that  worked for it, alive.

They Mayor tells us we have no choice (and by the way, support my property tax proposal.) And so far, not one politician in this city, not one member of Council, not one State Representative or State Senator has made a public statement about this devastating news.

Why not?

Five years ago the theme of my campaign for City Council was “Politics in Philadelphia is broken.” I put forward a simple explanation of how and why it was broken. With few exceptions, politicians in Philadelphia are members of one or another of five or six factions. Each of those five or six factions is focused primarily on squabbles with the others over contracts and patronage. What they rake off from contracts and patronage gives them the resources they need to stay in office and help their friends get into office. That enables them to survive and perhaps take a little more from another faction.

A politics of factional struggle leaves little room for thinking about the common good. It leaves little time for looking at what cities are doing in parts of the country and the world to reinvigorate themselves. And since most public policies that would benefit the whole city over the long term create some burdens on one or another powerful interest or neighborhood, which could harm the interests of one or more of the factions, our political officials are unwilling to consider any of them.

So what do they do when a crisis like this one arises? They figure out how to benefit from it. Right now the leaders of the various factions are figuring out how to get control over one or another of “achievement networks,” so that they can direct hiring and contracts in the network.

To speak out now against the whole plan—to do what I fancifully suggested the Mayor should do and lead a statewide campaign to restore funding in Harrisburg—would jeopardize their pursuit of their piece of what remains of the school system.

So they are quiet.

And left holding the bag will be teachers and students.

Breaking the teachers union not only saves money that can be turned to other purposes but enables politicians to hire the teachers they want.

And students especially those from poor neighborhood? They don’t have any resources so no faction benefits from helping them. Thee new structure of the “public schools” give them larger class sizes and schools that are ever more in the hands of local politicians who care about contracts and patronage not education.

That’s the broken politics of education in the city