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The Retaliatory State: How Trump Is Turning Government Into a Weapon of Revenge

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In New York magazine Jonathan Chait notes an ominous development:

Do you remember the “IRS scandal”? Unlike the conspiracy theories supported by “crazy” Republicans, like birtherism and Sharia law spreading in the U.S., the IRS scandal is one of the conspiracy theories supported by “Establishment” Republicans, like climate-science denial and Benghaaaazi. The premise of the “IRS scandal” held that the agency, supported explicitly or implicitly by the Obama administration, targeted conservative groups for harassment. Years of investigation by Congress and the IRS Inspector General firmly proved the opposite. The IRS, trying to enforce ambiguous rules governing political activity by nonprofit groups, flagged organizations on both the right and left in roughly equal measure.

The intensity of the IRS conspiracy theory petered out, but has never surrendered its place in the right-wing imagination. (Indeed, Wall Street Journal columnist William McGurn regurgitated the fantasy again yesterday.) The “IRS Scandal” has some importance beyond its insight into conservative paranoia. It has turned out to prefigure the Republicans’ own blueprint for the use of government as an implement of partisan domination and revenge.

In his essay on the “paranoid style” in American politics, which focused on the ravings of the conservative movement, Richard Hofstadter identified their penchant for reproducing the very techniques they decried. “The enemy seems to be on many counts a projection of the self: both the ideal and unacceptable aspects of the self are attributed to him. A fundamental paradox of the paranoid style is the imitation of the enemy.” Conservatives simultaneously suspect that Democrats have perverted government as a tool of partisan domination and that this is a proper and normal — or at least inevitable — use of executive power.

Politico reports that the Trump administration is leaning toward appointing Thomas Brunell to the top operational job running the Census. While Brunell “appears to have little experience in federal statistics or at managing a big organization, both characteristics that census-watchers believe are vital for the job,” he does have one point on his résumé that makes him deeply attractive for the post. He is a committed advocate of Republican gerrymandering efforts, and the author of a book titled Redistricting and Representation: Why Competitive Elections Are Bad for America. The Census is written into the Constitution and serves an essential governing function. Nobody has ever before thought to turn the direction of it over to a figure whose public career is so closely identified with partisan maneuvering.

Trump has openly called for using the Department of Justice and the FBI to prosecute his political opponents. “At some point the Justice Department, and the FBI, must do what is right and proper. The American public deserves it!” he has tweeted. “I am really not involved with the Justice Department. I’d like to let it run itself. But honestly, they should be looking at the Democrats,” he said, adding, “A lot of people are disappointed in the Justice Department, including me,” he told reporters. Having repeatedly threatened the news media, there is almost no way for CNN not to suspectthe Department of Justice’s anomalously harsh regulation of its parent-company merger is a form of retaliation for its coverage. The threat to CNN doesn’t have to explicit in order to have an effect.

The use of government as a tool of vengeance is not merely a recurring theme of Trump’s government. It is, in at least some cases, an explicitly articulated public philosophy. Stephen Moore, a conservative economic adviser at the Heritage Foundation, praises the Republican tax-cut plan as a deliberate attack on blue America. Moore, who has met with Trump and previously worked for such places as The Wall Street Journal editorial page and the Club for Growth, is not a marginal kook but instead a deeply influential one. His brazen endorsement of the goal of using the tax code to strike out at the party’s enemies merits close attention.

Moore argues that subjecting income spent on state and local taxes to federal taxation — a change Republicans might be expected to oppose as a form of double taxation — will have the delicious secondary effect of pressuring state government to shrink. “The big blue states either cut their taxes and costs, or the stampede of high-income residents from these states accelerates,” he gloats. “The big losers here are the public employee unions — the mortal enemies of Republicans. This all works out nicely.”

Moore likewise praises the plan for taxing university endowments. Republicans in general, and Moore with special fervency, typically oppose taxes on wealth. But he waxes enthusiastic about this wealth tax. “The first shot against the University Industrial Complex has finally been fired,” he exults …

Continue reading.

Written by LeisureGuy

21 November 2017 at 12:20 pm

Republicans Are Throwing Away Their Shot at Tax Reform

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David Frum, former speechwriter for President George W. Bush, reports in the Atlantic:

America badly needs corporate tax reform.

The United States pretends to tax corporations heavily. But those heavy tax rates are perforated by randomly generous rules such that many tax-efficient firms pay nothing at all, or even receive money back from the U.S. Treasury. The result is heavy unfairness between industries and firms, an unfairness that many economists believe systematically distorts investment decisions. U.S. productivity growth has been sluggish since the Great Recession—and had actually turned negative by the beginning of 2016.

At the same time, the corporate share of the federal-tax burden has dwindled over the years and decades. More and more of the cost of government now falls upon the payroll tax, which weighs most heavily on low- and middle-income wage earners. These Americans are suffering stagnating incomes, very probably because of the poor productivity growth of the past half-decade.

Lowering the corporate rate while tightening collection—with a view to raising more revenue in a more rational way—has been a good government cause since the late 1980s. John Kerry campaigned on it during his presidential run, in 2004, as NBC News reported at the time:

“Some may be surprised to hear a Democrat calling for lower corporate tax rates,” Kerry told an audience at Wayne State University [in Michigan]. “The fact is, I don’t care about the old debates. I care about getting the job done and creating jobs here in the United States of America.”

Now, in 2017, the all-Republican federal government at last has a chance to make progress on this goal. And it is throwing that opportunity away.

As I write on November 19, it may seem like the GOP tax plans are carrying all before them. A big tax cut has passed the House. A somewhat different plan passed late Thursday night through the Senate Finance Committee. The president is bellowing on Twitter his readiness to sign almost anything that arrives on his desk.

But what is heading toward him is not the kind of reform that can command broad political support, and thus stand the test of possible electoral defeat in 2018 and 2020. It’s a scandalous expression of upper-class and Sunbelt chauvinism that will melt away within weeks of the next Democratic electoral success. Even if the plan becomes law, as still seems improbable in the face of its terrible poll numbers, what firm would venture a long-term investment based on tax changes so likely unsustainable?

Daniel Patrick Moynihan’s old rule of thumb for bills before the Senate—“They pass 70–30, or they fail”—no longer applies. Seventy-vote majorities no longer exist in this hyperpartisan era. The Affordable Care Act passed with only 60 votes. But the spirit of the rule lingers. By refusing to hold hearings and forestalling Congressional Budget Office scoring, Republicans have moved fast. But they have not convinced the public mind to recycle an antique but still meaningful phrase. They may win a vote. They have not won the argument. What they are doing will not last, and will therefore not deliver any of the promised benefits. Their strategy is the equivalent of a 1980s-style corporate raid, which will yield a hasty and morally dubious windfall for a few insiders while damaging the longer-term economic health of the larger enterprise.Corporate tax reform is an argument that conservatives and Republicans could and should win. Among the advanced economies, only France—at 34.41 percent—imposes rates even close to the statutory U.S. rate, which including state-level taxes averages 38.91 percent.  Nations that are members of the Organization for Economic Development and Cooperation, by the same metric, average 24.18 percent; European states, 18.35 percent.

Of course, only the worst-managed or unluckiest American companies actually pay that 38.91 percent. In the 1950s, a third of federal revenues were derived from the corporate income tax. In the mid-1960s, the corporate tax still yielded more revenue than the payroll tax. But since then, revenue collections from the corporate tax have tumbled steeply relative to other tax sources. Today the federal government collects only about 10 percent from the corporate income tax. The payroll tax contributes almost three times as much.

In the 1960s, the ratio of federal collections between individual and corporate income taxes was about 2 to 1. Since the Great Recession and the lapse of the Bush tax cuts, this ratio has approximated 5 to 1.

The paradox of high rates and low yields is explained by the rational lobbying strategy of corporate firms. Business in general  . . .

Continue reading.

Written by LeisureGuy

21 November 2017 at 11:17 am

Saying Goodbye to Richard Cordray at CFPB Is Hard to Do

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Pam Martens and Russ Martens report in Wall Street on Parade:

Last Wednesday, Richard Cordray, the Director of the Consumer Financial Protection Bureau (CFPB), announced he would be stepping down from his post at the end of this month. Cordray is the former Attorney General of Ohio and there are rumors he may make a run for Governor there.

The CFPB, a Federal agency, was created under the Dodd-Frank financial reform legislation of 2010. The legislation resulted from the greatest fraudulent wealth transfer from the middle class to the 1 percent since the Wall Street frauds of the late 1920s. Both periods ended in an epic financial crash that left the U.S. economy on life support. Since the financial crash of 2008, the U.S. economy has grown at an anemic 2 percent or less per year despite massive fiscal stimulus and unprecedented bond purchases (quantitative easing) by the Federal Reserve.

Despite the desperate need for the CFPB, Republicans fought against its creation and then refused to confirm Cordray for his post as Director for two years. Cordray was finally sworn in on July 17, 2013 after having served in the post for 18 months under a recess appointment by President Obama. Republicans have continued to battle Cordray and attempt to derail his work in protecting vulnerable consumers from credit card, student loan and mortgage frauds.

Big banks on Wall Street are particularly hostile to the fact that the CFPB allows consumers who have been victimized by financial firms, even where small amounts of money are involved, to file a complaint and receive a timely response. Wall Street also hates the fact that these complaints go into a permanent database, which can be mined by class-action attorneys and prosecutors looking for patterns of fraud. That database is likely to be one of the first things to go under a Trump appointee.

Wall Street On Parade has covered Cordray’s herculean efforts on behalf of those without a voice in America and the insidious efforts of Congressional Republicans and Wall Street lobbyists to derail his work at every turn. Today we look back on what the CFPB has accomplished for defrauded Americans and the assaults made against it.

In July of this year, the CFPB issued its final rule to allow consumers who have been defrauded in financial transactions involving credit cards and bank accounts to have access to file a group action (known legally as a “class action”) using the nation’s courts. Wall Street banks have been running a private justice system for decades, known as mandatory arbitration, which bans both customers and employees from taking claims to court. The U.S. Senate reversed the rulemaking in September with Vice President Mike Pence casting the deciding vote to break the 50-50 tied vote. (See also: House Republicans Rig Hearing to Block Consumers from Going to Court.)

In August, the CFPB issued a critically important report on the nefarious . . .

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Written by LeisureGuy

21 November 2017 at 10:52 am

No Protection for Protectors: The GOP effort to kill the Consumer Financial Protection Bureau

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Gary Rivlin and Susan Antilla report in The Intercept:

Shortly after 10:00 p.m. on a Tuesday in late October, Vice President Mike Pence was summoned to the Senate floor. The Consumer Financial Protection Bureau had finalized a landmark new rule in July banning the forced arbitration provisions that banks and credit card companies commonly tuck into the fine print of agreements, barring their customers from joining class-action suits. House Republicans quickly voted to nullify the new rule, but weeks later, with a deadline looming, it was still unclear if the Senate would act in time. After intense pressure from industry and the Trump administration, Majority Leader Mitch McConnell was finally able to muster 50 votes, and Pence was parachuted in to break a 50-50 tie. Politico called the vote “a blow to the Consumer Financial Protection Bureau” and “Republicans’ most far-reaching victory yet this year in their effort to roll back financial regulations.” CFPB Director Richard Cordray was even more blunt: “Wall Street won and ordinary people lost.”

The rule’s spectacular defeat marked a rare Wall Street victory over an agency created by Dodd-Frank, the sweeping financial reform law Barack Obama signed in 2010. The CFPB was barely five years old when Donald Trump was elected, promising to “do a number” on financial regulations. Just weeks into the new presidency, Sen. Ted Cruz declared the CFPB “an out-of-control bureaucracy” and introduced a one-page bill to abolish it outright. McConnell, then minority leader, had told a gathering of bankers in 2013, “If I had my way, we wouldn’t have the agency at all.” A dead or severely injured CFPB seemed a certainty in those early days. If nothing else, surely Cordray would get pink-slipped. “It’s time to fire King Richard,” exclaimed Sen. Ben Sasse, R-Neb., shortly before Trump’s inauguration.

Yet Cordray is departing on his own terms, amid speculation that he will run for governor of Ohio. He announced on Wednesday that he expects to step down before the end of the month, and when he does, he’ll leave behind a vibrant, if profoundly embattled, agency.

His departure will be “a huge loss,” said Lisa Donner, executive director of Americans for Financial Reform. If Trump appoints a new director who is indifferent, or even hostile, to consumer issues, she said, “It will be incredibly costly to the American public.”

This past summer, Cheklist, a trade magazine for check cashers and payday lenders, published a cover story about the frustration roiling fringe financial players. The CFPB was still a “nettlesome bureau,” its editor wrote, and not a single bill aimed at weakening the bureau had reached the president’s desk. Meanwhile, its aggressive enforcement actions against debt collectorscredit repair companies, and online payday lenders were continuing unabated. Just three weeks before Congress reversed the arbitration rule, the CFPB finalized another new rule that tightened restrictions around high-interest, small-dollar loans to stop what Cordray called “payday debt traps.”

Yet it’s not just smaller financial players who have felt cheated over the past year. Richard Hunt, who has been paid more than $1 million a year  by the Consumer Bankers Association, a trade group representing the country’s largest banks, including Wells Fargo, Bank of America, and JPMorgan Chase, expressed delight after the Senate killed the “ill-conceived” ban on mandatory arbitration clauses. But mostly, his organization has been left expressing disappointment. Thoughts of halting the CFPB have been replaced by angry pronouncements about its unregulated powers. “It’s a fact,” Hunt said in an interview. “It’s the most unaccountable agency in our government, period.”

In fact, the CFPB has emerged as that rare beast — a fast-moving agency that actually chalks up wins for average Americans. By the end of 2016, shortly before Trump took office, the 5 1/2 -year-old bureau’s enforcement actions against everyone from the country’s biggest banks to small-time debt collectors had already returned $11.9 billion to 29 million consumers. The CFPB had created a public database of consumer complaints against banks and other lenders, and had issued new rules governing everything from mortgages to student loans to the prepaid cards that millions of “unbanked” Americans carry in their wallets. A year ago, the bureau finalized new rules giving prepaid customers some of the same protections enjoyed by those who use credit cards. Pressure from the bureau also resulted in the end of several onerous practices by lenders, such as demanding full repayment on student loans if the parent who co-signed the loan died.

Through its complaint database, the CFPB has secured redress for more than 160,000 individual complainants, such as Gene DeSantis, a former TD Bank customer near Albany, New York. DeSantis, a consumer lawyer himself, nevertheless registered one of the 800,000-plus complaints the CFPB has received. While he was away for the winter, DeSantis had mail forwarded to his Utah home. But TD, he found, does not forward its bills unless a customer contacts the bank directly, even when a customer like DeSantis has arranged for the post office to do so, and so he missed a payment. After a surprise call from a debt collector, DeSantis said he called customer service but “never got anywhere.” Meanwhile, his late charges ballooned to $235 on his $136 missed payment. “If a person like me is rendered helpless, God forbid what the average person faces,” DeSantis said. Within a week of filing his CFPB complaint, TD dropped interest and penalties. (A TD spokesperson declined to comment on the bank’s refusal to waive the fees until the CFPB got involved.)

“Because of the bureau,” said Mike Calhoun, president of the Center for Responsible Lending, “we’ve gone from, ‘Where does it say I can’t do that?’ to ‘You have a duty to treat customers fairly.’”

Even without Cordray at the helm, the problem that confronts Hunt and his frenemies running other financial industry trade associations is that the CFPB is simply too popular to eliminate. A 2017 poll by Americans for Financial Reform and the Center for Responsible Lending showed that 78 percent of likely voters believe we need tough rules and enforcement to prevent another financial crisis. Even among Republicans the ratio was 2-to-1. A poll conducted at the end of 2016 showed that, by that same 2-to-1 margin, Trump voters want the bureau left alone or strengthened. Its popularity seems to be one reason the White House has not waged the frontal war on the CFPB that its allies so sorely wanted. With Wells Fargo and Equifax exploding in scandal and their CEOs marched before Congress, anger toward Wall Street is almost as strong on the right as it is on the left. How, in that context, do you shut down an agency called the Consumer Financial Protection Bureau?

Industry’s answer has been a multimillion dollar, multi-front battle to discredit and defang the bureau, a war declared even before the enemy officially existed. Almost immediately after Dodd-Frank became law, a  . . .

Continue reading. There’s a lot more. It’s a lengthy and well-written article giving a history of the effort, strongly resisted by the GOP, to protect consumers.

Written by LeisureGuy

18 November 2017 at 8:51 am

The Republican Tax Strategy: Speed, Subterfuge, and Diversion

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John Cassidy writes in the New Yorker:

It is entirely conceivable that, in two weeks’ time, the Republican Party’s leaders will have largely succeeded in railroading through Congress an unpopular, regressive, and damaging tax reform. That was their plan from the beginning, and so far it has worked out much as they intended. On Thursday, the House, spurred on by Paul Ryan, voted to approve its version of the legislation. Now everything depends on what happens in the Senate.
On Thursday night, just hours after the House vote, the Senate Finance Committee passed the Senate Republicans’ version of the tax bill on a party-line vote. Mitch McConnell, the Senate Majority Leader, is planning to put the bill to a floor vote immediately after Thanksgiving. If the Senate approves the bill, the Republicans and President Trump will be on their way to victory. A conference committee would then reconcile the two bills, which differ in some significant details but not in their essentials. A final bill could be voted on and presented for Trump’s signature by the end of the year.
To get their tax plan through this final legislative stretch, the Republicans will try to rely on speed, subterfuge, and diversion. McConnell and Ryan have read the opinion polls. They know that there is widespread opposition to their plan’s major elements, such as its big tax cuts for corporations, unincorporated businesses, and rich people (like the President), or its new limits on popular deductions for mortgage interest and state and local taxes. That explains why the Republicans didn’t hold any hearings in the House, and why they are adopting similar blitzkrieg tactics in the Senate. The G.O.P.’s strategy is to rush this thing through before the other side has time to organize a defense.
In the days of yore, whenever a major legislative proposal was put forward, each chamber would spend a good deal of time discussing and dissecting it. Hearings would be scheduled; experts would be summoned. For example, in 2009, the Affordable Care Act took nearly five months to reach an initial vote in the House. But Ryan and Kevin Brady, the chairman of the House Ways and Means Committee, only introduced their tax bill, which is more than four hundred pages long, on November 2nd—all of two weeks ago. The chairman of the Senate Finance Committee, Orrin Hatch, released his version, which is equally long and complicated, just a week ago. This pace is more akin to downhill skiing than to traditional legislating.
After winning Thursday’s vote in the House, Ryan said, “This is about giving hardworking taxpayers bigger paychecks, more take-home pay.” He said practically the same thing on November 2nd. In the interim, it has emerged that fully three-quarters of the tax cuts in the House bill go to corporations and businesses. It has also been confirmed that the bill’s paltry middle-class tax cuts are temporary, and that by 2027 most middle-income families would be paying more in taxes. The Senate bill treats middle-income Americans in a very similar fashion, according to a study released on Thursday by the bipartisan Joint Committee on Taxation.
The Republicans cannot afford to publicly acknowledge these realities. If they did so, they’d have to resort to the old trickle-down argument that handing out prime steaks to the rich will eventually enable the masses to purchase higher-quality burgers. Outside the Heritage Foundation and the editorial department of the Wall Street Journal, this is not a winning story. So Ryan and McConnell will stick to the subterfuge and hope for some helpful diversions.
So far, they have been pretty lucky on that front. With daily developments in the special counsel Robert Mueller’s investigation into Russian meddling in the election, and famous men being outed as sexual harassers at a similar pace recently, the G.O.P.’s twin tax bills have received less media scrutiny than they usually would have, especially on television. On Thursday evening, . . .

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Written by LeisureGuy

17 November 2017 at 12:00 pm

Sarah Silverman comments on Louie CK’s sexual offenses

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She describes how she feels about Louie CK and his actions, and I have much the same feelings about Al Franken: I like him and I think in the Senate he has done a good job, but what he did to the woman was very bad. He’s apologized to her (and called for an ethics investigation of himself), and she accepted his apology. But still he did it. And he admits it (unlike, say, Harvey Weinstein, Roy Moore, and Donald Trump, but like Louie CK).

Written by LeisureGuy

16 November 2017 at 2:49 pm

Congress just doesn’t know enough to do its job well. Here’s why.

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Kathy Goldschmidt and Lorelei Kelly report in the Washington Post:

There is one thing that a deeply divided America agrees about: Everyone is angry at Congress. Approval ratings are in the single digits. Citizens feel frustrated and ignored by the democratic process. Civic discourse has degenerated into shouting matches or worse.

What Americans might not realize is that many who work for Congress feel just as frustrated.

The recent report “State of the Congress: Staff Perspectives on Institutional Capacity in the House and Senate,” by the Congressional Management Foundation, a nonpartisan organization dedicated to improving the working of Congress, describes the results of a 2016 survey of 184 senior staffers in the Senate and the House of Representatives. This research reveals an institution suffering from decades of neglect and erosion. The Americans who work on the front lines of our democracy also long for a Congress that is informed, responsive and effective, but Congress barely has the capacity to stay afloat. If we want to have a resilient democracy in the 21st century, we need a Congress that is much better able to absorb, organize and use knowledge to make laws and policy.

Congress is suffering from a huge knowledge gap.

The report examines the results of two kinds of survey questions. First, staffers were asked how important a given feature of Congress was: “In your opinion, how important are the following for the effective functioning of your chamber?” Second, they were asked how happy they were with how Congress is doing: “How satisfied are you with your chamber’s performance in the following?”

We can figure out the places where something is wrong by looking at features where there is a big gap between the percentage who said something was “very important” and the percentage who were “very satisfied.” Most glaring is that senior staffers generally felt it was “very important” that staff knowledge, skills and abilities are adequate to support lawmakers’ official duties, but only 15 percent were very satisfied with their chamber’s performance. In a knowledge-based workplace like Congress, staff are critical for understanding and shaping public policy. If their skills are not up to the task, our democracy cannot function at its highest level.

Democracy also suffers when members of Congress do not have adequate time and resources to understand, consider and deliberate public policy and legislation. This is the core function of Congress, yet only 6 percent of the senior staffers surveyed were “very satisfied” with their chamber’s performance.

Indeed, Congress has abandoned the deliberative process. The summer’s secretive health-care bill was the rule rather than the exception. In recent years, Congress has held about 50 percent fewer hearings than in the 1990s. Hearings are opportunities for Congress to engage and inform lawmakers (who are assigned to committees) as well as citizens (as witnesses) with the policy process. A dearth of hearings makes meaningful learning, policy discussion, and holding power accountable harder.

How Congress is organized makes the problem worse

Both political parties now use committee memberships as campaign currency, downplaying the importance of knowledge in the policy process. Instead of being distributed based on seniority, geographic focus and expertise (i.e., a farmer or a doctor) — relevant factors to public policy knowledge — the best committee assignments are awarded to those who raise the most money for the party.

This makes it far harder for Congress to intelligently consider the legislation before it. Over 6,000 bills are before Congress. In 1994 — when congressional resources started to decline — Congress had a generous capacity for knowledge creation. Now, it has only a handful of weeks to complete its mandatory funding bills and usher through its own policy priorities.

The most recent legislative branch budget flatlines expert capacity and raises the budget for security of members. This is an understandable response to real fears. Members of Congress have received 950 threats so far this year. One was shot and terribly wounded in June. However, skimping on trustworthy information has consequences. Despite valiant internal efforts, Congress lags in adopting new technology and has had to prioritize protecting safety and keeping systems secure from malicious hackers, rather than bolstering institutional capacity to access, understand and process information.

Many of the root causes of this situation are nonpolitical. Members of Congress have hundreds of thousands — even millions — more constituents than their counterparts did just a few decades ago. Even so, today’s Congress is working with 45 percent fewer expert personnel than in the 1970s. That means lawmakers are often missing trusted, unbiased, seasoned expert advisers in the rooms where decisions are made.

This gap is exacerbated by junk news and malevolent information that can infiltrate decision-makers’ information streams almost as easily as the public’s. Today, House and Senate offices are also overwhelmed by a tsunami of incoming information. The monetization of expertise adds to this maelstrom, thanks to vastly more money spent on lobbying and public relations.

It is hard to be sure that improving Congress’s knowledge infrastructure would make it more popular with voters . . .

Continue reading.

This is a serious sign of decline: the Federal government is becoming incapable of doing its job.

Written by LeisureGuy

14 November 2017 at 12:08 pm

Posted in Congress

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