Ruminations, May 9, 2010

Learning accounting at the flagship state university

The University of Connecticut has had financial difficulties in recent years at their medical school and hospital. They want money to build a new hospital. With the state of Connecticut, like many other states, running a budget deficit, fat chance, you say. Hah! If you think that Connecticut can’t provide the money, you haven’t studied accounting at the state’s flagship university.

The state legislature approved this $362 million for the UConn medical school and hospital this week, and it won’t cost Connecticut taxpayers a thing. First, $100 million comes from the new Healthcare Law enacted by Congress (at Senator Christopher Dodd’s (D, CT) request, a bequest was added to the bill – much like the Cornhusker Kickback and the Louisiana Purchase). The rest of the money comes from bonds that the state will issue.

I know, I know. There are some of you out there who think that because you have studied a bit of finance, you have found a flaw. You think that the first $100 million will need to be paid by the taxpayers across the nation (including Connecticut, of course) and that Connecticut taxpayers alone will need to eventually pay the bonded $262 million plus interest. Not so.

Here’s the real beauty of the deal. According to commercials run by the University of Connecticut supporting the expenditure, for every one dollar invested in UConn, the University returns $5 to the state. So, the $362 million invested in UConn will return to the state $1.8 trillion (5 X $362 million). Therefore, at the end of this project, Connecticut will have its original investment back along with a surplus of well over one trillion dollars. Pretty cool, eh?

Kind of makes you wonder about all those folks who wasted years studying economics at Harvard and MIT when they could have been learning the real stuff at UConn.

Black Republicans

According to The New York Times, there are a record number of African Americans running in Republican primaries this year. (For the full New York Times story, go here: http://www.nytimes.com/2010/05/05/us/politics/05blacks.html?hp)

The Times seems to be surprised and yet, if you look at the political history of Catholic loyalties and of African American political positions, this trend seems makes sense.

Catholics had been traditionally Democrats for years. There was a rationale for this. A large segment of the Republican Party, at its 19^th century beginnings was anti-Catholic. When it began, in the mid 1850s, it was an amalgam of Whigs and the American Party, successor to the secret Order of the Star-Spangled Banner or, as it was better known, the Know Nothings (“If anyone asks you about the society, just say ‘I know nothing’”). The Know Nothings were decidedly anti-immigrant and especially anti-Catholic immigrant.

As the Democratic Party re-established itself after the Civil War, in the North it took hold in the cities and, since there was animosity between Catholics and Republicans, the Catholics naturally gravitated toward the Democratic Party. Although the anti-Catholic nature of the Republican Party diminished, Catholics were still a reliable block for the Democrats.

The Democrats hit their apogee in 1960 when John Kennedy captured 83 percent of the Catholic vote when he ran for the presidency. And then, the reliable Democratic Catholic vote began to diminish. More and more Catholics began to vote more regularly Republican. In 1980, Catholics, as did the nation, voted for Ronald Reagan for president. In the years since then, Catholics tended to vote the same way as the rest of the nation.

What happened? Well, it’s always dangerous to generalize about the psychological factors that influence a large group of people but let me try anyway. Catholics in America, for a hundred years or so, saw themselves as a group that was discriminated against and tended to feel that there was safety in unity. Therefore, they were better off, they felt, just voting Democratic. When Kennedy was elected, they felt that they had made the mainstream of America and it was no longer necessary to vote Democratic, and they began to mirror the voting pattern of the rest of the nation.

Could we take the above paragraphs, change the years and substitute Obama for Kennedy and substitute African-American for Catholic? It seems like it. And that’s good – not so much for the Republican Party although it is good for them, but more so for the nation as another group of people no longer feels the necessity of clinging to a political party for safety.

There is also another reason to see that the shift of blacks to the Republican Party makes sense. In a November 30, 2008 article, we quoted columnist Ta-Nehisi Coates. Coates is a black liberal columnist who has written for The Village Voice, Time, The New York Times, and The Atlantic, among others. He wrote that, contrary to popular opinion, “Black people aren’t ‘left-leaning.’” Blacks tend to support some liberal issues such as increases in the minimum wage and affirmative action but, Coates says, “There is a conservative streak running through black America wider than the Mississippi.” So why don’t blacks flock to the Republican Party? That’s easy. According to Coates, “They just think the GOP is racist.”

Note that Coates did not say that the GOP is racist. He says that blacks think Republicans are racist.

There is nothing in the conservative or Republican tradition that hints at racism. Why would blacks believe that Republicans are racist?

Going back to its earliest days, the Republican Party was the party of blacks. It began with President Abraham Lincoln and it stayed that way through President Ulysses Grant who, in the mold of Lincoln, was also strong on civil rights.

For political reasons, the next president, Republican Rutherford Hayes, stepped away from civil rights.

In fact, at that point the Republican Party did not want to be identified as the party for blacks. But that didn’t matter – the Democratic Party had the reputation of being the party of slavery and repression. So the GOP continued to have strong black support until Franklin Roosevelt. It was more Roosevelt’s rhetoric that began to swing black voters to the Democrats than his actions. For example, his agriculture program to reduce plantings had the effect of leaving black share-croppers without jobs. Moreover, Roosevelt strongly supported unions and few unions accepted blacks in their rank and file.

The big switch of party loyalties among blacks accelerated in the 1960s. President Kennedy talked a good civil rights game and, although Republican lawmakers voted for civil rights acts in higher percentages than did Democrats (82% to 69%), the focus was on Democratic President Lyndon Johnson ramming the legislation through a Democratic Congress. In truth, civil rights legislation could not have made it through Congress without the support of both parties (and the personal leadership of Johnson) but, there you go; the Democrats received all the credit.

And then, adding to the problem, 1964 Republican Presidential candidate Barry Goldwater opposed the 1964 Civil Rights bill. Often overlooked are the facts that Goldwater was involved with the integration of the Arizona National Guard, was a life member of the Arizona NAACP, voluntarily integrated his family business and supported the earlier civil rights acts. However, Goldwater opposed the Civil Rights Acts of 1964 on the grounds that he thought that some provisions overextended the government’s authority. It was that opposition coupled with support for Goldwater by unreformed segregationists, that gave Goldwater and the Republicans, if not a bad name, at least the reputation of being a non-friend of blacks.

The situation continued to deteriorate in 1970. President Richard Nixon’s strategist, Kevin Phillips, annunciated Nixon’s southern strategy when he said: “The more Negroes who register as Democrats in the South, the sooner the Negrophobe whites will quit the Democrats and become Republicans.” And, given the preponderance of white voters, coupled with the negative feelings segregationists had toward Lyndon Johnson, this was considered a political expedient.

With Barack Obama’s election, like the Catholics of the 1960s, more black Americans can feel that they are in mainstream America and they can concentrate on what they perceive to be the best interests of the nation and which are in-line with their conservative values. As it was with Catholic voters, the shift will not be overnight but it will evolve and the fact that there are more black Republicans running in primaries this year is an indication. It’s ironic that the shift to increasing Republicanism by African American voters will be owed, in large part, to Barack Obama.

Clean energy

If we were able to attach a generator to the Dow Jones Industrial averages, we could produce all the energy we need. And, it would give new meaning to the term “green energy.”

Quote without comment

Bernhard Schlink writing in his 2009 book Guilt About the Past: "Fighting and winning yesterday's moral battles with bravery in one's mind doesn't necessarily prepare one for today's moral conflicts."

Rob Kulak