A Tale of Two Republics: Arizona and California during the Coronavirus Pandemic

An educated and virtuous citizenry is essential for a republic to endure, Thomas Jefferson and John Adams, two former U.S. presidents and rivals, agreed in an exchange of letters. Interestingly, both men died on July 4, 1826. Of course, the vote on independence had occurred on July 3, 1776 and the Declaration was signed over weeks rather than dramatically on July 4, 1776. Unfortunately, false narratives can take on a life of their own. Another example involves the U.S.'s "sun-belt" states, whose surging popularity from the 1980s at least through 2020 has masked the true conditions of the underlying cultures. Maricopa county, in which Phoenix, Arizona is located, was in the top 10 nationally for numeric increases in population from 2010 to 2020. Lest it be supposed that that county improved, a survey in July, 2019 listed Arizona as 49th out of the 50 States on elementary education (K-12th grade). 
Relatedly, Arizona's Medicaid system had a sordid reputation in terms of how well the subcontracting companies and non-profits managed themselves and were held accountable. As of 2020, Arizona still had a significant number of ideological voters who believed that Medicaid was a form of sordid socialism, which unjustly had taken the place of horrid communism. Because Medicaid had become the unwanted step-child in that political culture that still boasted that "taxes are theft," tight budgets and the State's bad education system resulted in subcontracting organizations, including medical clinics, conveniently embellishing their low-wage employees. Reports emerged of nurse-practitioners claiming to have the same training as physicians and even specialists such as psychiatrists and dermatologists, and of counselors misrepresenting themselves as being synonymous with therapists. In fact, Arizona's Medicaid tumor even reduced mental health to behavioral health so the cheaper behavior-trained counselors rather than therapists could be hired and relied upon. 
Furthermore, the organizations in Arizona receiving most or all of their funding from public-aid agencies like Housing and Urban Development (HUD) and Medicaid were reputed to suffer from administrative incompetence without much accountability from either of those two government agencies. It was quite strange to read of the non-profit organizations and companies, including medical clinics, refer to themselves as agencies. Such lying with impunity also served to dissimulate any criticism of administrative incompetence. That low-class sub-culture of dependent organizations could count on the low education level in the state and its notable anti-science (and anti-intellectualism) ideology not to know better. In fact, no one would be likely to push-back on the Medicaid employees in the state who mispronounce the technocratic acronym for the state's Medicaid program, AHCCCS, as access rather than ah-kehs. In Arizona, the letter C is not hard (like a K) if an S follows, rather than just an E or I. You're wrong, ignorance that can't be wrong has the gall to say. You're wrong, I don't need to keep six-feet away from people. You're wrong, my people don't need enforceable government orders. Relative to California, we could rightly expect that Arizona would botch its management of the coronavirus pandemic in 2020. 
The same ideology that compromises Medicaid at the ballot-box resists government itself, and thus any of its constraints, including physical distancing and the wearing of masks in stores. The following statement from Anthony Fauci, director of the National Center for Allergies and Infectious Diseases, applies especially to Arizona: "One of the problems we face in the United States is that unfortunately, there is a combination of an anti-science bias that people are--for reasons that sometimes are, you know, inconceivable and not understandable--they just don't believe science and they don't believe authority."[1]
A poorly educated and bigoted citizenry may arrogantly dismiss the advice of public health officials like Fauci. In fact, in a local culture wherein strangers are generally known, especially to new-comers and visitors, to be noticeably aggressive in public and especially on public transportation, the ideological and/or badly educated residents may even lash out just for being asked to keep a certain distance or to put on a mask. 
At least in Phoenix, customers were not keeping six feet from each other in stores, including in the crowded grocery stores, in spite of the fact that the governor had ordered it. Employees and customers alike presumed to be immune from the store policies and the law. Both were left unenforced. From a management standpoint, this demonstrates gross incompetence, and from a Nietzschean standpoint, pathetic weakness. 

Therefore, I contend that the governor of Arizona, and the government of Phoenix, badly misjudged their own residents in March, 2020, especially in relying on businesses to enforce the governor's physical-distancing order on customers and even the managers' own employees. As against offenders generally, the governor left the physical-distancing order unenforceable! Nietzsche would say that such power is borne out of weakness. Even the governor's stay-at-home order was stated at the outset to be unenforceable. Issuing an executive order and saying that it will not be enforced turned the order into a guideline--something that was too weak for the ideologically anti-government residents (and there were many) in the Phoenix metropolitan area. It is my right to stand where I want, even if it means that I or other people get sick as a result. As Matt Shumway put it on Twitter, "No dog muzzles here. I value freedom and the U.S. Constitution as opposed to tyranny and rolling over and obeying simply because I'm told without questioning the narrative." Matt and many other Arizonans were not bothering to maintain a reasonable distance from other shoppers in stores, and the managers were looking the other way in spite of the governor's order. With such exaggeration and callous selfishness being a significant feature of the political culture there, only a foolish governor would place his reliance on the people to self-govern, or willingly enforce the order.  
As yet another data-point, a significant number of local bus drivers were ignoring the city council's guideline of a maximum of ten passengers on a regular-length bus. Why issue a health measure as a guideline when it is reasonable to assume that drivers of the sordid local bus company would abuse their driver discretion rather than regulate even unwilling passengers? Some of the local-creeper bus drivers, who were known generally to be hostile to their riff-raff ridership, used their discretion during the month of March (before the hot months!) to close all of the window-slits. Apparently those drivers did not believe in disbursing any virus enclosed onboard in the air. Ignorance and power, a toxic cocktail that is endemic in Arizona, do not exactly form a united front in combating a pandemic. In fact, viruses do remarkably well in dysfunctional cultures because the people are not adequately protected, given their conditions. Not even the local police were maintaining 6-feet on non-emergency (e.g., noise complaints) calls for service. 

California's government was more pro-active (and thus sensible) in March. The governor knew that enforcement of public-health measures is important even where the population is reasonably educated and not out to protest government measures even against a dangerous pathogen as instances of tyranny. Ironically, that government could have relied more on its people and companies than Arizona's government could have, and yet California's had the common sense to know that given the health threat, enforcement would still be needed. 
In early March, California health officials were urging companies (esp. tech) to have employees work from home, companies such as  Google, Apple, and Facebook complied, as did their respective employees. There was a general sense that this was important, and people listened.[2] In other words, people were being responsible. This suggests that they were capable of self-governing themselves, and they were sufficiently mature to recognize that they were not being subject to unconstitutional government control and thus did not need to feel the need to fight back by deliberately not complying. What a difference a border makes! 

Unlike Arizona’s stay at home order which came later and without enforcement, California’s first shelter-in-place order that applied first to a wide swath of Northern California including the Bay Area on March 16, came with enforcement. The California-wide order was issued on March 19; Californians could “not leave home except for essential things such as food, prescriptions, health care and commuting to jobs considered crucial.”[3] Crucially, this order was enforced too. Generally speaking, in issuing orders in a timely manner and enforcing them, California’s government was being responsible in being realistic, which is important even if people take the matter seriously.

To be sure, California was rapidly becoming a “hot spot” for the virus, whereas Arizona was not so designated. That California’s order was “one of the most draconian at the time,” hence exceeding measures in New York City, another hot-spot, suggests that the California Government was acting responsibly, even making the important assumption that enforcement would be needed even though people were taking it seriously. “Why people are praising San Francisco,” the mayor there said, “is because everyone here knew how important it was to follow instructions.”[4] Such maturity is essential for a properly working governmental system based on self-governance (i.e., the People over its government).
Whereas businesses in California undertook to enforce the distancing and lower maximum occupancy limits, store managers in the Phoenix metro area were openly admitting that they would not enforce even the store's own policies, even those that dovetailed with the governor's executive order (e.g., physical distancing). Managers of grocery stores refused even to enforce the policy (and law) on their own carefree employees. 
So in March, 2020, I predicted that Arizona would become a hot-spot. Certainly by mid-June, this had come to pass. In that month, Anthony Fauci, director of the U.S. National Institute of Allergy and Infectious Diseases, was still advising Americans to follow physical-distancing recommendations and wear masks in public, which includes in stores. As of June 13th, at least 13 States, including Arizona, were showing an upward trend in average daily cases--an increase of at least 10%--over "the previous seven days, according to an analysis of John Hopkins University data."[5] As in March, April, and May in Phoenix, I saw little if any physical distancing at the time in public, including on sidewalks and inside stores. 
A survey by the CDC released on June 12th indicates that close to 80% of Americans had self-isolated in May, and 74% had worn face-masks in public either always or often.[5] Arizona opened for business on May 15th in line with President Trump's wishes, whereas California's governor was more cautious. So the percentage of residents in the Phoenix metro who self-isolated could not have been anywhere near 80 percent. Judging from the stores, I would estimate that less than half of the people were wearing masks. Even this might be an over-estimate, considering that Arizona had more than its share of people who refused to weak masks out of an anti-government-control political ideology. Viruses do not walk around such ideologies. In fact, such people put themselves at risk to make political points. This is why I brought in the poor condition of primary education in Arizona. The anti-professional bias, also very much extant in the middle and lower socio-economic classes in Arizona, undoubtedly played a role in the dismissiveness of even the guidelines. 
In fact, if we can assume that the people nationally who were self-isolating and wearing masks in public in May were also careful to keep at a distance from other people in stores as well as in public otherwise, the practically non-existent physical-distancing being practiced in Phoenix contrary to the governor's order suggests that even in this respect Arizonans (including the store managers and employees!) were falling short relative to the national percentages. Hence Gov. Ducey's ineffectual approach, which included his faulty trust that businesses would enforce at least their own policies on not only customers, but also employees. At a press conference on June 17th, the governor declared that the virus was spiking again, and that he would leave it to the local governments whether to require face masks  . In his tone as he reminded businesses that they would be held accountable, I contend he subtly acknowledged that businesses such as grocery stores had not complied to his physical-distancing executive order in March and still in effect in June. I wonder if he realized just how pathetically many of his citizens had taken his heed on distancing. Arizona is not California, either in terms of citizenry or governance.

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1. Jacqueline Howard and Veronica Stracqualursi," Fauci Warns of 'Anti-Science Bias' Being a Problem in US," CNN.com, June 18, 2020.
2. Ray Sanchez and Dan Simon, “What California Is Doing Right in Responding to the Coronavirus Pandemic,” CNN.com, April 3, 2020.

3. Ibid.

4. Ibid.
5. Madeline Holcombe, "Fauci Says Second Wave is 'Not Inevitable' as Coronavirus Cases Climb in Some States," CNN.com, June 13, 2020.
6. Ibid.

Presidential Authority and Bureaucracy: Regulatory Agencies

Circulating in Congress in the fall of 2012 was a bill that would have allowed "the White House to second-guess major rules and mandate that agencies carefully study the economic effects of new regulation. The change could, in effect, delay a number of rules for the financial industry. Those who support preserving the status quo where Wall Street regulates itself will find much to like in this legislation," said Amit Narang, a regulatory policy advocate at Public Citizen, a nonprofit government watchdog group.[1] President Obama had received $1 million from Goldman Sachs as a campaign contribution in 2008. Yet of how much value to Wall Street is a mere delay in regulation? Some, surely, but not enough to make this the decisive issue here. Rather, I submit that the president's control as chief executive of the regulatory agencies and the added bureaucracy are more salient in this case study. 

In terms of Wall Street’s interest, the proposed bill would have permitted the White House only to delay proposed regulations until further explanation is provided; the president would not be able to veto them. The issue from this case can thus be said to be whether the U.S. president as the chief executive in the U.S. Government must have control over even independent agencies such as the SEC. To be tasked with the enforcement of U.S. law and yet not to have the right even to be consulted by agencies as varied as the FCC, the FDIC, the SEC and the CFTC puts the chief executive in a bind—that of constitutional responsibility without the requisite authority. 
At a much less significant level, the added bureaucracy could have been a problem, given how much bureaucracy was in the agencies themselves: “at the minimum a 13-point test for rule-making. That includes finding ‘available alternatives to direct regulation,’ evaluating the ‘costs and the benefits,’ drafting ‘each rule to be simple and easy to understand’ and periodically reviewing existing rules to make agencies ‘more effective or less burdensome.’”[2]

1. Ben Protess, “Lawmakers Push to Increase WhiteHouse Oversight of Financial Regulators,” The New York Times, September 10, 2012. 
2. Ibid.

The Federal Reserve Expanded Its Turf in Spite of Having Come Up Short

Testifying before the US Senate Finance Committee on his re-appointment, Ben Bernanke volunteered that the Fed had been “slow” in protecting consumers from high-risk mortgages during the housing bubble and that it should have forced banks to hold more capital for all the risks they were taking on.  “In the area where we had responsibility, the bank holding companies, we should have done more.” he told lawmakers.  The hearing provided new evidence of doubt among lawmakers about the Federal Reserve’s  role as the nation’s guardian of the financial system. “In the face of rising home prices and risky mortgage underwriting, the Fed failed to act,” said Senator Richard Shelby of Alabama, the senior Republican on the banking committee. “Many of the Fed’s responses, in my view, greatly amplified the problem of moral hazard stemming from ‘too big to fail’ treatment of large financial institutions and activities.”  Accordingly, Senator Dodd proposed that the Fed’s powers as a bank regulator ought to be transferred to a new consolidated agency. Even though Bernanke admitted that the Fed made mistakes as a regulator of the bank holding companies, he and other top Fed officials adamantly opposed Dodd's proposal, arguing that the Fed has unique expertise nonetheless and that the Fed's ability to preserve financial stability depends on having the detailed information that only a regulator has about the inner workings of major institutions.

The Fed has “unique expertise," and yet, “In the area where we had responsibility, the bank holding companies, we should have done more.”   In other words, the Fed’s Chairman admitted that his agency had not done a satisfactory job of regulating banks during the housing bubble and yet his organization should be given even more power as a regulator anyway.  Were we to trust the Fed to regulate systemic risk, given the agency’s squalid record leading up to the financial crisis of 2008? Regardless of what qualms this question may have raised, the Dodd-Frank legislation charged the Fed with guarding the financial stability of the United States. It gave the central bank the power to oversee the largest financial institutions, even if they are not banks. Finally, it gave the Fed a prominent role on the Financial Stability Oversight Council, a body of regulators that will have the power to seize a systemically important company if it threatens the stability of the economy. Testifying before the Financial Crisis Inquiry Commission on September 2, 2010, Bernanke signaled that the central bank was eager to embrace its strengthened role provided for in the Dodd-Frank law. This role ought to give us pause, given his remarks in 2007 in which he thought the subprime problems were “manageable.” To the Commission in 2010, he said, “What I did not recognize was the extent to which the system had flaws and weaknesses in it that were going to amplify the initial shock from subprime and make it into a much bigger crisis.”

Sources: http://www.nytimes.com/2009/12/04/business/economy/04fed.html?ref=business ; http://www.nytimes.com/2010/09/03/business/03commission.html?_r=1&ref=business

The E.U. Agenda: Taming Bloated Greek Patronage

As E.U. leaders wrestled in the fall of 2011 with how to bail out those state governments that had been amassing relatively large semi-sovereign debt loads, residents in relatively solvent states such as Germany were frustrated with what they perceived as profligate over-spending in Greece. It is possible that even the Germans did not realize how engrained the excessive politically-based Greek bureaucracy had become. I suspect that for many Greeks, news of their living beyond their means was met more with denial and utter disbelief than an attitude-adjustment. In other words, a vast disparity in perspective exists on the ground as the E.U. struggled to come to grips with the debt crisis. The “ever closer union” necessary for the E.U. to rise to the occasion has as its foremost obstacle the disparate perceptions existing within the union (and enforceable by state governments).

The full essay is at Essays on the E.U. Political Economy: Federalism and the Debt Crisis, available at Amazon.