Joe Manchin Just Killed HR 1. How Do Democrats Save Democracy Now?
Move on. Quickly.
1. HR 1 Is Dead
Over the weekend, Joe Manchin basically killed HR 1. A lot of people are upset. I get this. But I want to concentrate your mind on what does, and does not, matter. And let’s start with the mission statement:
The best version of HR 1 is the version that (1) has the key protections and (2) can pass.
That’s it. Everything else is a nice-to-have.
So let’s start with the things that do not matter and which no one should spend even five minutes thinking about:
How to get rid of Manchin.
Why Provision X from the bill was really great and would have made life better.
Do not throw good money after bad.
Here are some things that do matter:
(1) Passing a voting rights bill that creates some minimum national election standards and non-partisan district-drawing reforms.
(2) How do you get to that? For starters, you’re going to need to strip it down to the minimum viable product.
(3) Next you have to bring progressives along. People seem to assume that HR 1 was big just for the heck of it. That is not the case. HR 1 was designed very specifically to bring the coalitions that make up a majority of the country together. Stripping it down to studs is going to alienate a lot of those people. They need to be brought along.
(4) Then you need to find some Republican support. You can try to get to 10 votes in the Senate—you should try to get to 10 votes in the Senate. My own view is that 10 Senate R’s is an impossible end-state for any bill on any subject. But whatever. Try hard. Get a couple R’s.
(5) Passing any sort of voting rights act will almost certainly require changing/reforming/killing the filibuster. So you have to create the conditions that will put so much pressure on Manchin the next time around that he’ll cave.
What does that pressure look like? It probably starts with infrastructure. Give Manchin a big say in infrastructure and see how he feels when he can’t get 10 R votes for something he’s driving and cares about.
It also probably requires reframing the filibuster change as “reform” and not nuking. Come up with some fenced-in version of the reform that gets you to voting rights, while keeping it in place for other stuff. Call it whatever you have to so that Manchin can say he isn’t changing his mind, but that he’s been presented with a different option.
At the end of the day, the Biden administration was always going to be judged on two objectives:
Ending COVID, and
Fortifying democratic institutions to resist the next authoritarian attempt.
If it turns out that there is no world in which voting rights legislation of any sort is achievable with the current fact set, then Biden needs to move on to other strategies. And if you can’t strengthen democratic institutions, then maybe you can create conditions on the ground that might forestall the next authoritarian attempt.
Speaking of which, you know what would hasten the next authoritarian attempt?
2. Inflation Watch
Over the last couple months I’ve seen a lot of analysis waving away inflation worries. Some of it sounds persuasive. Some of it sounds like wishful thinking.
But it’s not like nothing is happening. Something is going on and the question is whether it’s explicable and manageable or whether it’s baaaaaad. The FT’s Robert Armstrong is caught deep in this question:
Last week I wrote about my exchange with the economist Olivier Blanchard, who is worried about inflation, and he gave some stern advice: “Watch new wage contracts and wages like a hawk.”
Friday’s employment report provided some hawk food. Nonsupervisory workers’ wages rose by 0.55 per cent between April and May, an annualised rate of just under 7 per cent. That’s high.
The growth rate of wages has been extremely volatile since the huge spike in the spring of 2020, when so many low-wage workers lost their jobs. But this is the second consecutive big month . . .
Paul Ashworth, chief North America economist economist at Capital Economics, points out that the May wage data may actually understate wage pressure:
“The return of lower paid restaurant workers should be weighing on that average, so that 0.5% m/m is even stronger than it looks and suggests that the increasingly acute labour shortages are translating into rapid wage growth.” . . .
But the market did not panic at all, apparently focusing on the relatively cool increase in job growth rather than the hot increase in wages (cool data = Fed stays easy = asset prices go up). Stocks rose nicely Friday after the data came out and Treasury yields fell. . . .
One explanation for the sanguine market response is that, as several readers have emailed me to point out, the link between wage data and future inflation cannot be taken for granted. James Athey, a fixed income portfolio manager at Aberdeen Standard, got in touch to argue that the US economy’s competitiveness is so degraded, with many local markets dominated by just a few employers or “labor monopsonies,” that workers’ leverage in wage negotiations is likely to be fleeting.
Athey also noted that the wage data isn’t very good quality. It’s basically one huge number (all the income) divided into another (all the workers). It glosses over everything about the composition of the workforce, and in particular the fact that unskilled labourers are a growing part of it. . . .
I put these objections to Blanchard. He acknowledged the debate in the literature, but said that “I find totally implausible the notion that firms would not react to costs, and the largest cost is typically the wage bill.” As for the composition of the workforce, he replied that for the purposes of forecasting inflation, “what matters is the wage relative to productivity. Composition of employment does not matter. If we employ more low skilled workers, they are paid less but their productivity is lower.”
There is a lot of disagreement about inflation.
So we’re in the same place: We have data that’s worrisome. We have economic theory explaining why we should be worried. And then we have plausible sounding explanations as to why, actually, things are okay.
What should you believe? The problem is that it doesn’t matter what you believe. What matters is what the market thinks. And if the market suddenly stops believing the explanations as to why these inflationary pressures are, then we are screwed.
The good news is that the market is a purely rational construct that always reaches equilibrium based on reality.
I don’t love women’s tennis as much as Wynn Duffy, but I love it a lot and Martina Navratilova is one of my favorite players/people. (Navratilova >> Evert. Deal with it, America.)
In addition to being the greatest singles player of her generation, she’s probably the best doubles player, evah. I bet she could have carried me to a mixed-doubles final at Wimbledon when she was in her prime. Hell, she won the mixed doubles at the U.S. open at age 49. Forty-forking-nine!
Anyway, the NYT has a big profile on her and it’s great and she’s great:
She was a Wimbledon quarterfinalist in the summer of 1975, when her country’s Communist government was deciding whether to allow her to participate in the United States Open in New York later that year. She hated being unable to speak her mind, or tell anyone of her sexual attraction to women.
When she received permission to leave for the tournament, she told her father, who was also her coach, that she would not be coming back. She did not tell her mother.
After a semifinal loss to Chris Evert, she headed to a Manhattan immigration office to request asylum. Three hours later, she was free. By the time she woke up the next morning at the Roosevelt Hotel, the story of her defection was in The Washington Post. . . .
In 1983, Navratilova played 87 matches and lost only once. In three Grand Slam finals, she lost zero sets and just 15 games.
Boom. Love her. Read the whole thing.
(Nota bene: Mary Carillo is still my favorite women’s player of all time: The soul of a great writer trapped in the body of a professional athlete.)