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30
As much as I admire the Old Bull Mooses’ single-minded pertinacity, I’ve been unkind lately to the State Senate but at dinner last night Conor, who may be the last of the Jessecrats, set me straight.
 
I’d written – a couple of days ago – how the Democratic political wizards around Raleigh believe the Senate Republicans have captured the state Chamber of Commerce, turning it into a political appendage of their campaign committee, and the proof is the state and national Chambers contributing $800,000 to a couple of Republican organizations to pay for ads to defeat Democratic Supreme Court Justice Robin Hudson.
 
As soon as Conor – who has a photographic memory and a penchant for shedding light on obscure pieces of history – set down the menu last night he leaned back and said, You got it ass-backwards – or haven’t you ever heard of Stigler’s theory of ‘Regulatory Capture’?
 
I had to admit I hadn’t and grinning Conor explained how George Stigler an Economics Professor at the University of Chicago had won a Nobel Prize for his theory of Regulatory Capture – which works like this:
 
The government, with the best of intentions, sets up an agency to regulate, say, coal ash ponds and immediately the corporations who’re being regulated focus on the new agency, wining, dining, lobbying, wooing, cajoling, and making contributions to politicians to influence the new regulations.
 
At the same time, on the other side of the ledger, the average citizen (who personally has very little or no stake at all in the regulations) does nothing.
 
Time passes and all the flattering and wooing and contributing (in hopes of getting their friends appointed to the agency’s staff) bears fruit and, suddenly, instead of regulating the corporation the agency’s been captured by it.Then a worse thing happens: The agency starts passing regulations to help the corporation by giving it an edge over its competitors.
 
According to Professor Stigler it’s a problem there’s no avoiding and ‘Regulatory Capture’ is a threat every regulatory agency faces by its very nature – protecting an agency from external pressure may be a palliative but in the end, Stigler warns, no regulator at all is better than a captured one.
 
Conor began ticking off examples of regulatory capture – explaining how the Securities and Exchange Commission was set up to protect the public from Wall Street but now protects Wall Street from the public – then rolled through a list of bills the State  Senate had passed which the local Chamber of Commerce supported and said: So wouldn’t you say instead of the Senate capturing the Chamber of Commerce, the Chamber captured the Senate?

 

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30
Maybe Chad Barefoot really believes Putin reared his head and Russia reached its tentacles into the anti-fracking forces in North Carolina.
 
Or maybe it’s just a cynical attempt to raise money from a Fox-fed mob of ignoramuses.
 
Or maybe it’s a desperate overreaction to a poll showing that voters don’t like fracking.
 
Whatever, Barefoot’s claim that Russia may be fighting fracking here (the theory is that fracking in North Carolina jeopardizes Russia’s economic power as a natural gas monopoly) could end up supporting my pet theory that Triangle voters have gotten wise to ludicrous and unsupported claims by politicians. And that they punish said politicians.
 
Barefoot started a recent fundraising email this way: "The environmentalists are on the attack again – and this time, Russia is in the mix."
 
You may laugh, but Mark Binker at WRAL did a serious investigation into Barefoot’s claim. (You don’t know whether to applaud that, or just sadly shake your head in dismay.)
 
WRAL’s fact-check decision: “Hit the brakes. There seems to be scant evidence that Russians are funding the European fracking debates, much less dabbling in fracking policy here in the United States. Experts say it’s unlikely, bordering on silly,’ to suggest the Russians would have the time, money or inclination to bother with a North Carolina legislative race. Therefore, we give this fundraising email a red light on our fact-checking scale.”
 
Of course, this proves nothing. Binker may be a fine reporter and all. But do you really think he or any mere journalist is capable of cracking this Kremlin conspiracy? Surely these ex-KGB men can outwit WRAL.
 
So stay alert. If you see something, say something.

 

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27
The other day while I was having lunch with one of Raleigh’s Democratic wizards he said, You know a lot of people believe the Senate Republican Caucus has captured the Chamber of Commerce and turned it into an appendage of its political committee.
 
I said, How’s that? and he explained the Democrats, rooting through contribution reports, had discovered Senate President Phil Berger’s on the board of the Republican Legislative Campaign Committee (RLCC) in Washington, and that the National Chamber had given Berger’s group’s sister group the Republican State Legislative Committee (RSLC) $600,000, then a NC insurance company had given the sister group another $100,000, then, finally, the RSLC had given $900,000 to Justice for All NC a Republican group that ran ads to defeat Democratic Supreme Court Justice Hudson by saying she’d sided with child molesters in a Supreme Court case. I asked:
 
So did you find any proof Senator Berger was behind that ad?
 
He said the ad had been made by the same folks who make ads for the Senate Republican Caucus then added the NC Chamber had contributed $200,000 to still another group that ran ads to defeat Hudson and, after the primary, Senator Bob Rucho sponsored a bill to give Chamber members like pharmaceutical companies legal immunity when they sell bad drugs. I asked:
 
So you don’t think that was simply good policy?
 
Do you think, he said, it was sheer coincidence?

 

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26
Mike, a young down-the-line rock-ribbed Republican partisan who sees eye to eye with Senator Bob Rucho (who once tweeted ‘Obamacare has done more damage than the Nazis’) but is too smart to say anything that foolish within earshot of a reporter, and Jim who would like Senator Elizabeth Warren to run for President because Hilary’s too conservative were arguing across the table when Conor, a small town lawyer and, by my reckoning, the last of the Jessecrats, interrupted and said:
 
Alright. If Bob Rucho’s not the most powerful Old Bull in the Senate he’s pretty close to it so when he woke up one morning and in a flash of revelation saw there were too many frivolous lawsuits against pharmaceutical companies (when they sell a fellow a drug that’s supposed to cure his high blood pressure but instead lands him in the ER with a stroke) it was just a matter of time before he pulled the pin on the grenade and – Conor waved both hands – kaboom.
 
Well you have to admit, Mike said, there are way too many lawsuits, and Conor said one frivolous lawsuit was too many but there’s a simple way to stop that: Punish the people who file them. After all, nothing stops foolishness like a big fine or jail time but Senator Rucho’s hadn’t done that so now a lot of folks were wondering whether he’d  had a different goal in mind all along and all his talk about frivolous lawsuits was just a fig leaf.
 
Don’t get me wrong, Conor added, I’m not saying Bob Rucho’s malicious, a politician finding the wrong cure for a problem’s nothing new – it happens every day. But giving a guilty pharmaceutical company immunity from practically all lawsuits has to be some kind of a first.
 
Mike was trying to come up with a way to derail Conor but before he could say a word Conor struck again saying Republicans like to say people ought to work and stand on their own two feet and take care of themselves and when they get in a jam the government shouldn’t bail them out but for some strange reason when it comes to pharmaceutical companies (in Senator Rucho’s eyes) personal responsibility doesn’t apply – when a pharmaceutical company screws up the government ought to step in and take it off the hook.

 

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26
It’s a rite of summer. The House, the Senate and the Governor can’t agree on a budget. They tell themselves that millions of North Carolinians are in suspense, following the latest twist in the budget deliberations like they’re binge-watching Netflix.
 
This year, Governor McCrory and Speaker Tillis decide a bold stroke is needed to galvanize public opinion. They arrange a huge photo op at the Mansion with educators behind and beside them. They unsheathe their sharp sword to cut this Bergian knot: a “split budget.”
 
Yawn.
 
Earth to Raleigh: We don’t care. We’re not paying attention. We rarely pay much attention to you, and we’re paying even less now.
 
It’s summer. The sun is hot, and the days are long. The beach, the lake and the mountains beckon. Next Friday is the 4th, a long weekend. So let’s start now! Pack up the sunscreen, fire up the grill, pop open a cold one.
 
You guys – and it’s nearly all guys – will work it out. Somehow, sometime. The reporters and lobbyists are consumed with how long you’ll be here and how you’ll work it out. We’re not.
 
We’ll get back in a while. We’ll see what you did. And we won’t like it.
 
In the meantime, don’t kid yourselves that we’re paying attention. We’ve already made up our minds – those of us who plan to vote in November. We know two big things: One, you’re hurting the schools and teachers. Two, you want to frack our water full of dangerous chemicals.
 
That’s all we need to know. See you in November.

 

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25
When the ‘anti-frackers’ launched their million dollar ad campaign to defeat Chad Barefoot and three other Republican State Senators the Senate Republican Caucus returned fire, calling on Barefoot’s opponent to denounce the flood of “special interest money” pouring into the district then added, “Who knows what Sarah Crawford (Barefoot’s opponent) has promised these people.”
 
That night gathered around the dinner table with an eclectic collection of Democratic and Republican partisans, lawyers, and political consultants, Conor, a small-town lawyer who may be the last of the Jessecrats said, In the simple black and white world of Republican heroes and Democratic villains what the ‘anti-frackers’ are up to is pure villainy but there’re two sides to every coin.
 
Mike, who greatly admires the work of the Republican State Senators, leaned forward, braced himself on both elbows and said, I expect I’ll probably regret this – but how’s that? and Conor explained how the ‘pro-frackers’ have been contributing pretty steadily to Republican Bob Rucho who’d just passed their bill to jump-start fracking and give the fracking companies a million dollar government subsidy and how, back in April, the local Chamber of Commerce and its cousin the US Chamber of Commerce had given $800,000 to Republican groups to pay for ads to defeat Democratic Supreme Court Justice Robin Hudson and how, after the election, Senator Rucho had introduced a bill to give Chamber members (like pharmaceutical companies) immunity when they sell a fellow a drug that’s supposed to cure his diabetes but, instead, lands him in ER with a stroke.
 
Mike didn’t like where the conversation was heading – so he said: So you don’t think fracking means more jobs? and Conor said, We’re not talking about jobs. We’re talking about your Republican kettle calling my Democratic pot black.

 

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25
To quote Slim Pickens in Blazing Saddles, “What in the wide, wide world of sports is going on here?”
 
What is politics coming to when a deeply conservative Deep South Senator rallies black Democrats to win a Republican primary? When a GOP bridge-builder beats a fire-eater? When a big spender beats a budget slasher? When a courtly white-haired DC insider beats a take-no-prisoners Tea Party outsider? When GOP Washington PACs pour big money into turning out blacks and Democrats?
 
We have left the gravitational pull of Earth.
 
Thad Cochrane’s narrow victory was the opposite of Eric Cantor’s landslide defeat. But the cause was the same: Democrats and Independents voting in a Republican primary. Or, as some Republicans might say, interfering.
 
Cantor tried to out-Tea Party the Tea Party candidate. He moved right and lost. Cochrane went the opposite way. He moved left and won. He actually grew the electorate from the primary turnout.
 
Maybe there’s a lesson for those who bewail today’s polarized, hyper-partisan politics. Maybe politics should use some more openness – and competition. Like opening up primaries to more voters. Ending gerrymandering. Even getting more people to vote.
 
The results will be entertaining, if nothing else. 
 
 

 

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24
For years they’ve been the best of buddies. Soul mates. Like peas and carrots.  But, now, they’ve had a falling out…followed by blows being struck.
 
Reaching into the treasury in Washington and pulling out a wad of other people’s money to give to your friends is as old an American tradition as apple pie. 
 
Back before the Civil War, Congressmen in the Western and Northern states got together to take money from people in the South (with tariffs) to build ‘internal improvements’ (like roads) in the West and protect textile mills in New England.
 
During the Gilded Age, Congressmen from just about everywhere voted to give cash and land and subsidies to railroad tycoons.
 
Today, Democrats, like Obama,  give cash to their friends like Solyndra and Republicans do the same with their friends. More prickly, no matter how much you love Social Security and Medicare there’s no avoiding the awkward fact that, in all likelihood, mom’s going to get more money back from Social Security than she ever paid in and the difference is going to be paid with other people’s money.
 
The same malady – corporate subsidies – led to the ultra-right-wing-Koch Brothers-Art Pope-funded-Americans for Prosperity’s falling out with the ultra-right wing Republican State Senate led by Phil Berger.
 
The rumbling started when the Senate voted to take hard cash out of the state exchequer and hand it to movie production companies.
 
The first blow was struck when Americans for Prosperity branded the plan ‘Hollywood handouts.’
 
Of course, that was bound to rile the Old Bulls in the Senate: AFP running ads calling Republican Senators scoundrels six months before the election was not a happy development.

 

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24
A lot of Democrats are “Ready for Hillary,” but is she?
 
The doubts erupted after talked – and talked again – about whether she and Bill really are rich.
 
The Washington Post headlined: “Some Democrats fear Clinton’s wealth and ‘imperial image’ could be damaging in 2016.” It quoted “multiple Obama campaign advisers” saying anonymously that “they fear Clinton’s financial status could hurt her as it did Republican nominee Mitt Romney, whom Obama portrayed in 2012 as an out-of-touch plutocrat at a time of economic uncertainty.”
 
Today the N&O’s Barry Saunders jumped in. He put his finger on the real concern here: not wealth per se, but that elusive political quality of “touch.” He wrote, “Clinton is already one of the most polarizing political figures out there, so every word she utters is going to be parsed for ways to demean, denigrate or disqualify her. With her at-best imprecise language, she is merely providing ammo to those of her detractors who claim she is imperial and out of touch.”
 
This all harks back to 2008. After the fact, a strategist for John Edwards said research showed that Democratic voters had clear ideas about their three then-candidates. They agreed with Edwards on the issues (“Two Americas”), and they agreed that Hillary was best-qualified to be President (and that was pre-Secretary of State), but they just felt good about voting for Obama.
 
Yes, that was partly because voting for an African-American was making history. But so is electing the first woman President. Obama also had a cool charisma that voters responded to.
 
Being likable can take you a long way in politics. And vice versa. Obama himself presaged today’s “rich” kerfuffle in the 2008 debates when he famously snarled, “You’re likeable enough, Hillary.”
 
For all her strengths and experience, Clinton has something of a distant and forbidding aura about her. People who know her say the reality is far different, that she is warm, funny and down-to-earth. But few people get that face-to-face experience. And she suffers by comparison to politicians who exude that “touch” – say, Bill Clinton.
 
She is no doubt ready for the job. But is she ready for the campaign? Are Democrats ready, as they often do, to fall in love with a charismatic challenger (see JFK, RFK, McGovern, Carter, Hart, Clinton, Dean, Obama)?
 
It’s hard to imagine a stronger candidate for Democrats in 2016 than Hillary Clinton. It’s just as hard to imagine Democrats sitting still for a coronation. This is her first test, and they’re watching.

 

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23

Each year hospitals pay the state $135 million which, through some mysterious alchemy, morphs into the federal government paying the state a second $135 million (to care for Medicaid patients).  Trying to decipher the magic a newspaper described a circular flow of money that seems to work like this:

1)     The hospitals pay the state $135 million;
 
2)     The hospitals then send the state $135 million in bills for caring for Medicaid patients;
 
3)     The state then sends Washington the $135 million in bills;
 
4)     Washington then sends the state a check for $90 million – its share of the Medicaid bills;
 
5)     The state then returns the original $135 million to the hospitals;
 
6)     And, finally, the state and the hospitals figure out how to divvy up the $90 million (from Washington) that’s left in the pot. 
 
That arrangement rolled along fine (for everyone but Washington) until this year when Governor McCrory proposed the hospitals send the state another $15 million without getting their money back – which didn’t sit well with the hospitals whose lobbyist announced they were in such dire need of cash the Governor’s plan might leave ERs with no choice but to, with deep regret, turn away patients.
 
A Democratic legislator also jumped into the melee accusing the Governor of taxing ‘sick people’ – which was pretty much the end of any illuminating debate.
 
I asked a friend who’s served on his local hospital board, Are the hospitals really broke?  and he said many rural hospitals – like his – are having a tough time making ends meet but the big urban hospitals – like Carolina’s Medical Center in Charlotte – own airplanes and helicopters and pay executives seven figure salaries (and don’t have to pay taxes on profits or pay property taxes). 
 
Of course, it wouldn’t be correct to say not taxing a hospital is the same as subsidizing it but, still, being tax free is helpful – so can the hospitals afford to do as the Governor asks and pay another $15 million?
 
What we need is a little clarity.
 
If a hospital’s strapped for cash I doubt the Governor (or even the State Senate) would mind lending a helping hand but, if, on the other hand, a hospital owns an airplane or helicopter, maybe it ought to provide a bit of proof it’s broke as a church mouse.

 

 

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Carter & Gary
 
Carter Wrenn
 
 
Gary Pearce
 
 
The Charlotte Observer says: “Carter Wrenn and Gary Pearce don’t see eye-to-eye on many issues. But they both love North Carolina and know its politics inside and out.”
 
Carter is a Republican. 
Gary is a Democrat.
 
They met in 1984, during the epic U.S. Senate battle between Jesse Helms and Jim Hunt. Carter worked for Helms and Gary, for Hunt.
 
Years later, they became friends. They even worked together on some nonpolitical clients.
 
They enjoy talking about politics. So they started this blog in 2005. 
 
They’re still talking. And they invite you to join the conversation.
 
 
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