Wednesday, October 22, 2014

Bernie Sanders' Record

Bernie Sanders is one of the most publicized senators in Congress by left-wing pages on Facebook and the press. He calls himself a socialist and claims he decrees all the corruption in congress... but after looking at his record, it is really hard to believe anything he says.

Bernie Sanders has been the Senator from Vermont since 2007 and was the sole Representative of Vermont from 1991 until he became a Senator. In this time period he has voted on many important bills that have effected the United States, and I am going to here analyze his record by looking at the rolls of important bills since 1991 that he has had a chance to vote on.

  • Civil Rights Act of 1991: Yea
  • Motor Votor Act: Yea
  • NAFTA: Nay (more detail below)
  • Digital Millenium Copyright Act and Sonny Bono Copyright Act: Unknown
  • Gramm-Leach-Bliley: Nay
  • No Child Left Behind Act: Yea (see below)
  • TARP Bailout: Nay
  • Closing Guantanamo Bay: NAY,
  • Affordable Care Act: Yea
NAFTA was the first vote where he voted against the working class. This is because NAFTA expands foreign demand for American high-value added goods. It also lowers prices expanding the purchasing power of the working class and all other people. My earlier blog post on the details of NAFTA goes into depth on why Bernie Sanders made a mistake on this.

He voted for the No Child Left Behind Act which limits funds to public schools unless if they go through regulations which pulls money from productive activities and wastes class time. 

He voted against the closure of Guantanamo Bay, creating an extra hurdle to block what he had been calling for for years beforehand. 

Most of his votes as we can see from his record are in line with what he claims, but when it comes to the most important bills of the last 23 years there are a few major issues where his walk and his talk are not in line. Generally though he has been one of the better members of Congress in terms of his honesty, but this is a very low bar, especially since Reid and Pelosi became the leaders of the Democrats in Congress.

The biggest problem of all of course comes from his current discussions regarding Obama's presidency which make me lose most of his respect for him. He is talking about how Obama has betrayed the American people with the tax reform packages, such as the 2010 Tax Relief and how bankers have not been sent to jail.

It is true that most speeches are meant to please the base of a politician but this is unusually so. The Affordable Care Act and Obama's first act as President, to close Guantanamo Bay Prison, when they left his desk to go to Congress as proposals were very progressive. The ACA was deeply modeled after the German Health Care System which functions as Universal Health Care, and GITMO's prison is one of the biggest embarrassments of this country today. However, the ACA was watered down significantly by Congress and the closing of GITMO's prison was blocked completely. The bill that was sent to the President included it as one line and if the President was going to send the bill back to Congress where over 80 Democrats in the Senate voted on passage the military would have been unfunded and it is highly unlikely that these Democrats would have passed the bill. We don't have a line-item veto in this country so this also prevents the President from sending particular parts of the bill back to Congress which is a flaw. When we consider the situation the President is in with his own party tearing apart the legislation they say they support on the campaign trail the President doesn't have much he can do. Instead of ripping on the President who can't choose which parts of the bills he supports and which he doesn't, Bernie Sanders should tear into his opponents in Congress who are blocking the actions the President passes and proposes who are preventing him from acting. This would be an honest response and focus on where the real problem lies, and he is being dishonest to his supports when he blames the wrong branch of government, even though he is usually one of the good guys.

There are three ways to fix the bundling of legislation, requiring bills to stay to a single subject which is problematic because many issues are interconnected and telling which things are and are not connected are subject to interpretation. Another potential is to have a word limit on how long bills will be, but since large programs can't be written in 250 characters are less this would be more problematic. The final solution is to have a line-item veto, and this is actually a very reasonable proposal.

Requiring the President to pass the whole bill or only part of it frequently puts him into a Prisoner's dilemma where he can either vote for the whole bill or none of it which means he frequently gets blame that he doesn't deserve and can easily have his reputation damaged when Congress passes him bills which he would oppose lumped in with bills that he is forced to sign. This will save the President from being blamed for things that he doesn't want to do but is effectively being forced to, giving him the ability to always do what he believes to be right ending any question of where he stands. Some of President Obama's most controversial actions on the left (GITMO, wiretapping by the NSA) are due to being bundled with things that are necessary. These problems will be fixed by a line-item veto. However, it isn't a cure all since the government's failure to expand AMTRAK as proposed is due to Congress not providing him funding, A line-item veto won't fix the entire problem, but it is a step to getting a government that is less confusing to the masses and is easier for people to point the finger at the people who are truly causing the problem, and it is a big step forward.

Example of his current speeches:

The biggest problem with him is how he doesn't accurately represent the relations between the parties in congress in his speeches and misportrays our system. Instead of tearing into the President (who is what he constitutionally can) he needs to tear into the other members of Congress who have repeatedly prevented the President from acting on his platform. If he was serious about what he wants to do he would be supporting Democratic challengers to both incumbent Democrats and Republicans across the country who are serious about progressive values. His talking about how a President who has a progressive record is against things he is actually for, and voting against progressive actions the President actually does do is dishonest. I cannot support someone who lies to the American people about how their government works.

Wednesday, October 8, 2014

China is the world's largest in one way

The IMF today announced China now has the world's largest economy in terms of purchasing power, but jumping to the conclusion that China is number one also needs to take into account a lot of other factors:

  1. In terms of the raw size of the economy calculated by real GDP they are still only around $10 trillion versus America's $17 trillion.
  2. China and the United States have roughly the same distribution of income. This will have long-term effects on the power dynamics of China's government and access to opportunity.

Other things about China's economy I must point out:
  1. China's GDP was 44% from industry in 2013. It has been in the 40s since about the 1980s, which shows that their economic growth has been unusually even across all industries. This is probably due partially to keeping their currency artificially deflated by printing lots of currency to keep it cheap relative to the US dollar, which is probably the largest dispute between the two countries today. This is very different from the narrative that we often hear about China. (IMF)
  2. Their GDP per capita PPP is currently around $13,000 while the US is around $54,000. There is no question that the US beats China on this metric and it is going to take a long time for China to catch up to us on this. GDP matters for geopolitics, but China won't be a really serious contender for being the world's strongest power until their GDP per capita gets above the middle income stage, which is where it is right now. (IMF)
  3. Leaving inequality aside, and using statistics that sidestep this issue, America currently has the 4th highest median household income (which controls for inequality) in the world at around $31,000 (World Bank), while China's median household income is around $4,600 (27000 RMB) which shows a massive difference in the income of people in the United States and China. China has a long way to go to meet us on this mark.
  4. When it comes to Household final expenditure per capita the United States is currently around $31,000 and China is at $1,300. China is rapidly rising and hopefully will continue to rise in the future. (World Bank)
  5. They rank 91st on the Ease of Doing Business Index, the United States ranks 4. The best city in China to start a business is Hangzhou and it takes an average of 31 days to start a business, which is close to the national average, versus an average of 5 days in the United States. The amount of capital you need to pay in on average is 71% of national income in China versus 0% in the United States. This has a very real effect in the ability of entrepeneurs who are not well connected and already wealthy to start a business.
  6. The rate of poverty in China below $5 a day remains above 50%, though the rate of poverty under $1.25 a day has plummeted from around 63% in 1992 to 6% today (adjusted for price inflation). China has come a long ways in the reduction of poverty and there is still a long ways to go in its reduction still. The trend however is towards less poverty.
  7. China currently has large problems with corruption, ranking at number 80, while the United States ranks at number 19. This is a deep threat to the economic and social stability of China.
IMF data:

So the future of the global economy is going to see China continue to grow, and this will be a good thing for people in China. The following policy changes would fix or at least start to fix the current problems:

  1. Make it easier to start a business. This will immediately increase the demand for workers, push wages up, which will decrease their GINI coefficient, which will increase their multiplier, which will in the medium run increase their GDP growth again.
  2. Open up private banking to increase investment opportunities.
  3. Bring back the state health care system.
  4. Increase access to education in rural areas.
  5. Repeal all restrictions on migration around the country to increase the ability of people to seek out new economic opportunities.
  6. Implement trial by public jury to separate the courts from the political process. This will help reduce corruption.
There is still enough room for development of the political and economic situation to merely say that China has overtaken the United States is rather silly, and misses most of the picture. Hopefully China will continue to develop and see it move forward even further.

Given that China has a population over 4 times that of the United States it was inevitable that they would someday overtake us in one GDP metric or another soon, and is actually a good thing because it allows their economy to grow so their GDP per capita can start to approach a developed level, and hopefully continue to see a rapid decrease in poverty along with other problems.

Thursday, October 2, 2014

America loves Hong Kong and China

We are currently witnessing what could be the largest revolution in the history of the world in China, with the people of Hong Kong finally standing up against the government of China's illiberal policies. China currently ranks at 181 out of 201 nations and self-governing territories, while Hong Kong ranks at 18, higher than the United STates. But since Hong Kong is part of China and the Chinese authorities are trying to implement one of the worst human rights records in the world in one of the most free areas in the world. This of course is leading to trouble for the Chinese authorities because the people of Hong Kong don't want to be under such a government like all other people in the world.

This however will hopefully not stay isolated to Hong Kong, since the rest of China has a similar situation of not having free, fair, and open elections. I am hoping that in the next week or two we will see the student rebellion expand to other cities in China which will scare the dickens out of the Chinese government. If the military realizes that they have the same interest as the students who will lead the protest then the emperor will have no clothes, and the Communist Party will fall. I hope this will happen so the people in China will see an improvement in their situation in the near future and the Republic of China will return to the mainland (which currently ranks at 43).

This is the latest chapter in the long struggle between the Confucian leaders of China who claim obedience to the government as one of the highest values and the Mohist faction which has survived 1500 years of persecution by the Chinese government and is one of the earliest if not the earliest form of liberalism in the history of the world. It is currently prevalent in Taiwan and hopefully the students across China can make it dominant in the political sphere.

America loves China.