There are a thousand hacking at the branches of evil to one who is striking at the root.

— Henry David Thoreau, Walden (1854)

In this week’s Sift:

  • How Money Talks. Sure, we all know the rich get what they want from government. But how does that work exactly? Here’s what I learned from Lawrence Lessig at the National Conference on Media Reform.
  • The Ryan Medical Plan. Paul Ryan’s Medicare and Medicaid reform plan doesn’t even ask how the old and poor will pay for medical care. It just limits how much help they’ll get from the government.
  • Short Notes. This week’s notes slant towards comedy: Elon James White, Erin Gibson, Second City, Katie Goodman, Jon Stewart. Plus a few serious notes about debt ceilings, tax cuts, and growing up Objectivist. And how would 21st-century tech change the Exodus story?
  • This Week’s Challenge. What perfectly fine policy alternatives never make it into the debate?

How Money Talks

Americans are bipolar about the power of the rich. On the one hand, if you say, “The rich are really, really rich and their voices count for more than yours”, people will roll their eyes at you in a do-you-think-I’m-stupid sort of way. Of course politicians pay more attention to David Koch and George Soros than they do to you. Of course AT&T and Exxon are getting something for all the money their lobbyists spread around. Everybody knows that.

On the other hand, when somebody quantifies just how rich and how powerful the rich and powerful are, most of us are appalled. We knew, but we didn’t know. We thought it was bad, but not bad like that.

Two Harvard researchers recently measured this gap between the actual concentration of wealth and what most Americans think it is. And in 2004 (studying data mostly from the 1990s), Princeton Professor Martin Gilens wrote a paper correlating the preferences of Americans of differing incomes with actual policy changes. He concluded:

Most Americans think that public officials don’t care much about the preferences of “people like me.” Sadly, the results presented above suggest they may be right. Whether or not elected officials and other decision makers “care” about middle-class Americans, influence over actual policy outcomes appears to be reserved almost exclusively for those at the top of the income distribution.

It’s not hard to think of examples: In poll after poll, Americans say the rich should pay higher taxes, and that creating jobs is a higher priority than reducing the deficit. And yet, the budget talks that just narrowly averted a government shutdown were entirely focused on cutting spending (including job-creating public works projects) while increasing taxes on the rich or ending tax breaks for corporations were off the table.

So let’s start there: Money talks. It talks a lot louder than most of us want to admit. And it gets results even when most of the rest of us disagree with it.

So how does that work?

NCMR. I spent Friday and Saturday at the National Conference for Media Reform in Boston. In one way or another, just about every session was focused on the way that money talks and how its volume could be turned down (or the volume of ordinary people turned up).

The conference wasn’t designed to have a uniform message, but I kept hearing this theme: Neither blatant quid-pro-quo corruption nor overt censorship is the real problem. That kind of control is for amateurs. It happens, but if you stopped it you wouldn’t have solved anything important.

Instead, the real problem is in the way the system is structured. Again and again, on many levels, the interests of both decision-makers and opinion-makers are aligned with private interests rather than the public interest.

These were the kinds of issues people talked about:

  • net neutrality. Only government regulation can keep the small number of companies who own the delivery infrastructure of the Internet (Comcast, AT&T, Verizon, etc.) from either favoring their preferred content or extorting tariffs on web sites to get their message delivered. This was once a bipartisan issue, but after $100 million of industry spending on PR and lobbying, Republicans have defected and it has become a liberal issue.
  • media concentration. How do you expose the undo influence of big corporations when you work for a big corporation and depend on its approval to keep your microphone turned on?
  • source capture. Reporters need access to sources in positions of power. If they offend those sources, their access dries up.
  • regulatory capture. Several times I heard this fact referenced: Michael Powell, the FCC head under President Bush, just took a high-paying job as the top lobbyist for the cable industry. (Lawrence Lessig quoted $2.3 million as a salary estimate, but I haven’t been able to verify that.) You don’t need to assume any back-room deals to learn this lesson: If you’re nice to the people you regulate, you’ve got a bright future after you leave government.
  • non-advocacy. The traditional journalistic value of objectivity — going where the facts lead rather than pushing the story where you want it to go — has gotten distorted into a practice of only reporting the points-of-view that are already influential. Corporations have the wherewithal to put their ideas on the public agenda that the mainstream media reports. But how do the views of ordinary people break into that league?
  • astro-turf. If you’ve got money, you can form “grass-root” organizations, create events for them, and get them on the news. Compare the relatively equal coverage of a Tea Party rally of a few hundred at the Capitol and a pro-union rally of 100,000 in Madison. A few hundred union supporters might not even make the local news, not to mention Politico or CNN.
  • campaign finance. Every year it costs more to run for office. President Obama is planning to raise an unprecedented $1 billion for 2012. He can’t possibly raise that as 50 million contributions of $20 each. But he’ll need every penny when the Chamber of Commerce and their allies start spending against him. Corporations and billionaires have become the only conceivable source for the quantities of money needed to seek major offices.

Lawrence Lessig. The talk that pulled it all together was by one of my long-time heroes, Harvard law professor Lawrence Lessig. The 25-minute presentation is already online. It focuses on clever graphics rather than Lessig as a talking head, so it works as well online as it did live at the conference. I recommend watching it.

Lessig’s career as an activist started with his opposition to the 1998 law granting a 20-year extension of existing copyrights. The motivation for that law was simple: Mickey Mouse was about to enter the public domain, soon to be followed by Superman and Batman.

Obviously, this mattered to Disney and Time-Warner. Just as obviously, extending the copyrights did nothing at all for the public. Copyrights are temporary government-granted monopolies that are supposed to encourage the production of creative works. But as Lessig puts it “Incentives are prospective. No matter what the U. S. Congress does, they cannot get George Gershwin to create anything more.” Extending copyright also has increased the number of orphan works that are unavailable because they are neither in commercial distribution nor in the public domain.

In spite of the extension’s net negative impact on the public good, Congress passed it unanimously.

Lessig connected this experience to what we’ve seen recently in Wall Street reform. After putting hundreds of billions into bailouts, the tax-payers have gotten no reform that will prevent similar disasters from happening again. The too-big-to-fail banks are bigger than ever, and still only minimally regulated.

Ditto global warming. Big democratic majorities and a president supposedly committed to action produced nothing in the face of huge corporate spending. Ditto health-care reform, which had to placate insurance and drug-company interests, but not the large majorities of the public that favored a public option.

Every single issue you and I care about — and not just you and I, people on the right too — every single issue we care about is blocked by the same fundamental rot. … We won’t get anything real from our government until we change this.

The fundamental problem, as Lessig describes it, is that Congress was designed to be dependent on the People, but instead it has become dependent on the Funders. But “the Funders are not the People.” (It needs to be said.) Rather than quid-pro-quo corruption, members of Congress

develop a sixth sense as they increasingly begin to recognize how every single thing they do might or might not affect their ability to raise money, and they adjust themselves to make sure they don’t reduce their ability to raise money.

This explains the kind of agenda-manipulation we see every day. Politicians don’t often change their positions in exchange for campaign contributions. It’s more subtle than that. They adjust the agenda so that questions that pit them against their potential funders never come up. Or, if they must come up, they appear as parts of large, seemingly inevitable compromises. So, for example, no one had to take a position on single-payer health care. There was no show-down vote on preserving the Bush tax cuts.

Similar processes are at work inside the corporate media. Overt censorship — drop that story or be fired — is very rare. But reporters know what will raise flak and what won’t. They know what their editors will and won’t support, what will and won’t keep their sources happy, what paragraphs are likely to get cut and what stories are likely to make page 1. Like leaping dolphins, they very quickly get trained to produce what the system rewards rather than burn their energy working against it.

Peter, Paul, and Mary had it nailed in 1967:

But if I really say it,
the radio won’t play it
unless I lay it between the lines

Root-striking. Lessig is pushing a campaign called Root Strikers. The initial purpose is simply to educate people to connect the dots, reframing every issue in terms of how it is changed by the influence of money on Congress. The ultimate plan, I’m told, involves a constitutional convention.

I have no idea whether this will turn into something or not. I’ll let you know.

At the conference I kept running into issues that used to be bipartisan, but have become partisan: net neutrality, global warming, campaign finance reform. In all of them, Republican support has vanished as industry deployed its resources.

Friday, after massive lobbying and other political expenses by telephone companies like AT&T, the House voted to invalidate the FCC’s already-watered-down protection of net neutrality on party lines: Republicans 234-2 against neutrality rules and Democrats 177-6 supporting them.

Economist Joseph Stiglitz (also at NCMR) has a current Vanity Fair article about the concentration of wealth and power.

It should not make jaws drop that a tax bill cannot emerge from Congress unless big tax cuts are put in place for the wealthy. Given the power of the top 1 percent, this is the way you would expect the system to work.

The Ryan Medical Plan

House Budget Committee Chairman Paul Ryan put out his long-term budget plan Tuesday, spelling out some of the ideas he’s been suggesting in other forms for the last couple years. There’s been a lot of extreme rhetoric for and against it, and particularly about what it does to Medicare and Medicaid. It’s an extreme proposal, and at some point extreme rhetoric will be the appropriate response. But first let’s try to understand the Ryan Plan calmly.

An analogy helps: Suppose I have a niece. (I don’t.) Let’s call her Jenny, and let’s assume she has a serious health problem that her unemployed parents can’t possibly pay for. Not wanting to see her die, I’ve been footing the bills for Jenny’s treatment. I’m starting to go deeply into debt, and yet her treatments just get more and more expensive every year. Clearly, I’m headed towards bankruptcy.

I go to financial counselor Paul Ryan, who comes up with this plan: We figure out how much I can afford to spend on Jenny without going bankrupt, and we budget that I’m going to send her parents that much money each year, so that they can use it to pay for her treatments. Problem solved; I’m not going bankrupt any more.

I’m sure you see the difficulty: My potential bankruptcy is only one effect of the underlying problem, which we haven’t solved at all. Jenny is still sick, the doctors still aren’t going to treat her for free, and the cost of her treatment is still going up at the same rate. All I’ve done is detach my finances from that problem.

Now let’s come out of the analogy and look at the country’s health care system. The underlying problem is not fundamentally about government programs or taxes. It’s about the cost of medical care. For a long time, the cost of medical care has been going up faster than anything else — faster than inflation, faster than GDP, faster than government revenue.

By now, medical care is a huge expense for our economy. But the real problem is in the future: What if costs keep rising at this rate? Exponential growth will work its evil magic, and no matter how important you think medical care is, and no matter whether you imagine care being paid for by individuals, by private insurance, or by the government, at some point the money runs out. People will die even though we know how to save them, or they’ll limp through life with disabilities that we know how to fix.

Up until now, government programs have been shielding individuals from the worst effects of that trend. We have Medicare for the old and Medicaid for the poor. When those programs are properly funded and working well, no one has to die just for lack of money. But as we look forward and imagine a continuing exponential growth in medical costs, at some point it overwhelms any tax rate and government bankruptcy looms.

So budget chair Ryan gives the government the same advice that financial counselor Ryan gives me in the analogy: Detach your finances from the increasing costs. Rather than pay for treatment, provide a fixed amount of money as a voucher to help people pay for private health insurance. Let that amount go up at a rate you find sustainable.

If you think the government deficit is the only problem here, then this is a great solution. But if you think the problem is that people are sick and we don’t know how to pay for their treatment, that problem is untouched. The weight of it has just been shifted from the government to the individual.

The conservative response to this criticism is that medical inflation will abate when government money is no longer fueling it. Or, saying the same thing another way, when people become desperate enough for cheap medical care, the market will provide it.

This strikes me as magical thinking: I want it to be true, therefore it is true. If you poke the idea even slightly, it has no depth. Market incentives for cheap medical care already exist. (Insurance companies could make lots of money if they could provide quality care more cheaply. Employers could cut costs by forcing their employees into those insurance programs.) So far, those incentives haven’t produced results, and no one has put forward any economic model that shows how the lower costs would come about.

And if they don’t come about, people are going to die for lack of money. Parts of the Affordable Care Act begin to deal with that problem, but even these minimal efforts to reduce medical inflation are what raised the rhetoric about rationing and death panels. Ryan supports defunding them.

On privatizing Medicare and Medicaid,  Matt Yglesias asks the right question: “Why would introducing a new layer of rent-seeking special interests reduce health care spending?”

Because it has economies of scale, is non-profit, and doesn’t need to advertise or pay million-dollar executive salaries, Medicare has low overhead and spends a higher proportion of its money on care than any private insurance plan. Replacing it dollar-for-dollar with a voucher would mean significant cuts in care.

Short Notes

The most fun presentations at NCMR conference by comedians. I’ve linked to Elon James White’s This Week in Blackness series several times over the last couple years. But Erin Gibson and her Current TV series Infomania were new to me. Ditto Matthew Filipowicz, who has a great motive for starting his new talk show: “I know a lot of people who are smarter than I am, and I wanted to have a reason to talk to them.”

While we’re doing progressive comedy, sing along with Katie Goodman in “I Didn’t F*ck It Up“.

Glenn Beck is crawling back under the talk-radio rock that he wriggled out from. So I need to start drawing down my supply of Beck-skewering bookmarks: Mother Jones diagrams Glenn’s brain. And Katie Goodman sings “Glenn Beck is Batshit Crazy“. Jon Stewart also sees the end coming for his Beck impersonations. And Digby can’t resist dancing on Beck’s grave.

Republicans plan to seek new spending cuts next month when the national debt ceiling needs to be raised. But Matt Yglesias points out something significant: Threatening not to raise the debt ceiling (and send the U.S. government into default) is pure hostage-taking, not an alternate policy view.

If there’s some large block of members of congress who genuinely believe that failing to raise the debt ceiling is superior to raising the debt ceiling, then obviously it would make sense to negotiate with those people. But I don’t believe that there are any such people.

The effort to defund Planned Parenthood produced a lot of great responses: Erin Gibson’s and Second City Network’s were my favorites.

An Atlanta business owner repeats something New Hampshire businesspeople have told one of my friends:

Tax Cuts do not create jobs. Tax cuts adds profits into business owners pockets. If I get another 10% Tax cut, as the republicans are planning to push, lets say it moves and wins. If my current staff is can handle the volume, there is no incentive for me to hire new employees. That is the way it works.

As a former teen Objectivist myself, I understand that Randist philosophy is more than just an excuse to be a jerk. But if by coincidence you happen to be a jerk, it’s awfully convenient. Alyssa Bereznak illustrates in How Ayn Rand Ruined My Childhood.

In honor of Passover (coming up later this month), consider how Exodus would play out in the age of social media.

This Week’s Challenge

As you listen to TV talking heads debate politics this week, remember to take a step back occasionally and ask yourself: What completely different solution would work well for ordinary people, but is off the table because everybody knows it’s politically impractical? I’ll start the bidding with single-payer health care. Any others?

The Weekly Sift appears every Monday afternoon. If you would like to receive it by email, write to WeeklySift at Or keep track of the Sift by following the Sift’s Facebook page.

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  • Anonymous  On April 11, 2011 at 3:24 pm

    Is there any way to gather the data on the total amount of profits by all members of the current health care system, plus the total of all doctors salaries, and subtract these values form the US bill for health care to come up with a comparison of how efficient our expenditures are in comparison to other first world countries?

  • John L  On April 12, 2011 at 10:55 am

    Put the tax rates back to what they were under Reagan and Bush?

  • Anonymous  On April 12, 2011 at 3:18 pm

    That the ELEPHANT in the room is Defense spending, which is little more than a blank-check for military contractors to empty the public purse. If you want to clean up “waste” in spending, this is the place to do it.

  • Doug Muder  On April 13, 2011 at 7:22 am

    I sympathize with the desire to filter out various expenses and come up with what we “really” spend on medical care compared to other countries. I'll look around to see what has been done.

    It shouldn't just be profits and excessive salaries that we subtract out, but also advertising and all the office workers whose job is to decide whether a person qualifies for care or not.

  • kimc  On April 18, 2011 at 12:20 pm

    They know what their editors will and won't support, what will and won't keep their sources happy, what paragraphs are likely to get cut and what stories are likely to make page 1.

    We have been noticing the last few years that many news articles have a right-slanted headline, and start that way, but if you read all the way to the last couple of paragraphs, the message reverses and you get another slant, or even facts that contradict the headline.


  • By Digging into the Deficit « The Weekly Sift on July 25, 2011 at 11:01 am

    […] you think that government healthcare spending is the whole problem, then you do what Paul Ryan proposed: Replace Medicare and Medicaid with capped private health-insurance subsidies. The cap can be […]

  • By A ConConCon and other short notes « The Weekly Sift on September 5, 2011 at 11:23 am

    […] April I told you (“How Money Talks“) about Lawrence Lessig’s organization RootStrikers, which believes that […]

  • […] Since the Left will never be able to compete with the corporatists in money, we need to insist on reform inside the culture of the media. (Yesterday Hunter on Daily Kos expressed his dismay that “fact checking” is now a […]

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