Vote!, Short-Selling Trap, 2008

If you haven’t yet, go find your ballot in that pile of junk mail, vote YES on the Spokane Public School’s (District 81) replacement levy and either get it in the mail today or deposit it a ballot drop box. Your ballots must be in by or postmarked by (no guarantee there) Tuesday, February 9 at 8PM. For more of my thoughts on the subject see Republicans, Schools, and Taxes.

Puzzled by the news blip around the run-up in stock price of a company called “GameStop”? I was. Judd Legum in his Popular Information on January 28th puts it all in context in his The merry adventures of Robinhood. I’ve copied it below. There are echoes in this piece of the outrage many felt surrounding the crash of 2008 and the bailouts that followed. I have little sympathy for those who make vast sums of money taking bets with other people’s money. Some of them seem to be getting their comeuppance in the current melee. The story is entertaining, satisfying–also disquieting and worrisome in a world that already feels unsteady:

Hedge fund manager Gabe Plotkin is ridiculously wealthy. In November, Plotkin purchased a $32 million mansion in Miami with “nine bedrooms, twelve full bathrooms and four half bathrooms.” To preserve his privacy, he also paid $12 million for the house next door. Plotkin also recently bought a “large chunk” of the Charlotte Hornets. 

How did Plotkin get so rich? The hedge fund he founded, Melvin Capital Management, has generated fantastic returns. Since its start in 2014, Plotkin’s firm has averaged returns of 30% per year. Melvin Capital Management now has more than $12 billion under management and Plotkin collects 30% of the profit as his fee. 

Plotkin generates huge returns by taking big risks. One of Plotkin’s strategies is short selling stocks he believes will decrease in value. The way you short sell a stock is by borrowing it from someone else, selling it and, hopefully, repurchasing it at a lower price later. When the short sale works out, the drop in share price becomes profit for investors like Plotkin.

Short sales can be very profitable, but the strategy comes with extra risk. When you purchase a stock for $100, the worst that can happen is that it goes to zero and you lose all your money. When you execute a short sale for a stock at $100 and instead the price increases to $300, it will cost you another $200 to close out your position.

Plotkin and his colleagues in the industry had no problem with these risks when they were generating enormous profits. But 2021 has presented challenges. On January 22, the Wall Street Journal reported that Plotkin’s firm had lost 15% of its value in the first three weeks of the year. The losses were a result of the firm’s extensive “short book, or array of bets against companies.” Then things got much worse. 

A particular problem for Plotkin and other investors was short selling GameStop, the video game retailer. GameStop sells video games and related equipment in retail stores. Many hedge funds and others bet against GameStop because modern gamers are more likely to download their games and shop online. The pandemic hasn’t helped GameStop’s business prospects. 

But the bets against GameStop, which turned a profit and reduced its debt load in 2019, were very heavy. There were more GameStop shares sold short(71.2 million) than total shares available (69.7 million). This is possible for technical reasons, but the volume illustrates just how many people were betting on GameStop’s situation to get worse.  

Further, not everyone believed GameStop was a lost cause. Ryan Cohen, the former CEO of online pet retailer Chewy, believes that GameStop can be reimagined as a force in online retailing. Cohen started buying a lot of stock and earlier this month, Cohen and two of his colleagues from Chewy were named to the GameStop board of directors. 

2020 has seen a boom in retail trading, especially from no-cost apps like Robinhood. Some of these traders congregate on a Reddit forum called r/wallstreetbets. Users of that forum began buying GameStop stock. Some believed in Cohen’s vision, some wanted to stick it to the Wall Street short sellers, and some just wanted in on the fun. Late last week, GameStop stock was trading at under $40. On Wednesday, the stock closed at nearly $350. 

How did some people hanging out on Reddit drive this kind of increase? Their stock purchases are only one component of GameStop’s dramatic rise. When a stock that is sold short rises dramatically, lenders start to ask for their stock back. That means short sellers have to buy GameStop to close their position, driving the stock up further. Also, some of the buyers from Reddit and elsewhere were not directly buying GameStop stock but were buying call options — the right to buy GameStop stock at a higher price. But as the stock goes up, the firm on the other side of these trades purchases more GameStop stock to hedge its position. All three of these factors created a feedback loop that caused GameStop’s meteoric rise on Tuesday. 

The dynamic was not limited to GameStop. Other stocks targeted by short sellers, including AMC and Blackberry are seeing large gains. The dynamic has panicked the Wall Street establishment, which began taking steps on Thursday to curtail the trading of Redditors and other retail investors. 

Ostensibly, these actions were done to save small investors from themselves. But is that what’s really going on? Or do Wall Street titans just not like it when regular people use tactics normally reserved for “experts” to make money?

Plotkin’s bailout

Plotkin went quickly from running one of the best-performing hedge funds in the industry to serious financial peril. But he was rescued with a $2.75 billion cash infusion from two other hedge fund titans, Steve Cohen and Ken Griffin. Cohen was Plotkin’s former boss at SAC Capital Management. SAC shuttered after the firm pled guilty to insider trading and paid $1.3 billion in fines. Cohen was not personally charged. Griffin runs Citadel LLC, a hedge fund which he found in 1990. Longtime Popular Information readers may remember Griffin for purchasing the most expensive home in America.

In exchange, Citadel and Point72, the successor firm to SAC, own an undisclosed stake in Melvin Capital Management. The companies now all have an interest in Plotkin getting out of this jam and resuming his work of bringing in massive profits. 

The trio appears to be getting some help. 

Schwab and TD Ameritrade restrict retail traders

On Wednesday, Schwab and TD Ameritrade, two large retail trading platforms with a common owner, took the highly unusual step of “restricting trading” on GameStop, AMC, and other stocks. TD Ameritrade said it was acting to protect its customers and itself. “In the interest of mitigating risk for our company and clients, we have put in place several restrictions on some transactions in $GME [GameStop], $AMC and other securities. We made these decisions out of an abundance of caution amid unprecedented market conditions and other factors,” TD Ameritrade said. 

The SEC announced it was “actively monitoring the on-going market volatility in the options and equities markets.” Reddit’s r/wallstreetbets was temporarily set to private, supposedly because there were too many new members to moderate the content. A related discussion board on a service called Discord was shut down

Limiting trading of these stocks may make it easier for hedge fund managers like Plotkin — and his new investor Griffin — to navigate out of this predicament. Less buying of GameStop stock or call options will put downward pressure on the stock, making it easier for short sellers to unwind their position. 

Griffin, through Citadel, does a lot of business with retail trading platforms. When retail investors make a trade, it is frequently handled by Citadel. The Financial Times reported that “Citadel Securities accounts for 40 of every 100 shares traded by individual investors in the US, making it the number one retail market maker.” Specifically, Citadel is “a big buyer of customer trades from the leading US retail brokerages such as Charles Schwab and TD Ameritrade.” Citadel pays companies like Charles Schwab and TD Ameritrade tens of millions of dollars for the right to handle this “order flow.” Citadel, in turn, profits from the “spread” — the difference between the price to buy and sell the stock. 

CNBC freaks out

On CNBC, many people were freaking out about the Game Stop situation. Host Scott Wapner, for example, said that the rise in GameStop’s price was evidence of problems with the “integrity of the system.”

Investor Chamath Palihapitiya pushed back. “Just because you were wrong, doesn’t mean you get to change the rules. Especially because when you were wrong, you got bailed out the last time. That’s not fair,” Palihapitiya said

Palihapitiya did not say who he was talking about, but he could have been talking about Griffin. In 2008, when the financial crisis hit, Citadel had massive exposure as a securities lending counterparty with AIG. If AIG went under, Griffin would be out hundreds of millions of dollars. But that never happened. AIG received a $182 billion taxpayer bailout. As part of this, AIG was able to pay counterparties full value for its otherwise worthless contracts. Citadel ended up with a $200 million cash infusion. 

Citadel benefited even more from the massive bailout of lenders it relied on to stay liquid. Griffin admitted that, one Friday during the crisis when he left work and realized that if Morgan Stanley did not open on Monday, Citadel would go under. But Morgan Stanley did not go under because it received a $100 billion bailout from the federal government. 

But now, twelve years later, we are told it is retail investors that are irresponsible and do not understand how things are supposed to work. 

Support Accountability Journalism

Keep to the high ground,

P.S. The news that appeared after I wrote this disclosed that the platforms that were being used to bid up the share price of GameStop (and thereby punish some hedge fund managers like Mr. Plotkin had clamped down on small investors taking part–and that produced a general uproar and shouts of “Unfair!” This story is not over…


Always remember that the U.S. Senate is the most anti-democratic institution in all of our governance. The fifty Republican senators collectively represent 41,549,808 fewer Americans than the 50 Democratic senators (out of a total population of 328,239,523). Mitch McConnell, the outgoing Senate Majority Leader and obstructionist-in-chief, represents only 4,467,673 Kentuckians, while wielding immense power. McConnell, you will recall, working from this minority base, first stonewalled the nomination of Merrick Garland to Supreme Court and then jettisoned the Senate filibuster rules (as applied to the Supreme Court) to place three Federalist Society justices on the Court for life. The Supreme Court, thanks to McConnell’s machinations, is now also a minority-controlled institution based on the populations represented by Senators who approved their nominations. 

Now McConnell, even as he shifts from Majority to Minority Leader in the Senate, is using his remaining leverage in an attempt to extract a promise from Democrats that they will not exercise “the nuclear option” and take the final step to rid the Senate of the even greater minority stranglehold on Senate business offered them by the Senate filibuster, aka the “cloture rules.” McConnell wants Democrats to negotiate away the very power that McConnell himself exercised in his minority takeover of the Supreme Court. McConnell’s demand should provoke outrage. The prospect that Democrats will jettison the filibuster is an important tool (as is the threat of adding justices to the Supreme Court). Neither action is currently contemplated. To take either action would require solid agreement among the 50 Democratic Senators and Kamala Harris. Such agreement [think Joe Manchin (D-WV) and Kristin Sinema (D-AZ)] is currently lacking, but what of that agreement after eight or ten months of continued Republican minority obstructionism that blocks each and ever Democratic legislative effort? To give up those threats would be like asking Democrats to voluntarily neuter themselves. 

So what is this filibuster, anyway? What is its history? In an impeccably timed new book, “Kill Switch: The Rise of the Modern Senate and The Crippling of American Democracy,” Adam Jentleson lays out the Senate filibuster’s history current use. An interview with Mr. Jentleson entitled “The Racist History Of The Senate Filibuster” on Terry Gross’s Fresh Air is available in your browser or as a podcast. It is a lesson in civics and the anti-democratic nature of our governance. (The discussion of the book starts at 8:17 in the program, if you’re pressed for time. At least in the browser version you can see the text of the interview by clicking the rightmost icon [parallel horizontal bars] in the blue “40 minute listen” line.)

Here’s the bare-bones summary: The Senate filibuster arose out of the efforts starting in the 1830’s by Sen. John C. Calhoun, a flagrantly white supremacist southern Senator, for the purpose of blocking anti-slavery legislation. None of the founding fathers ever spoke of or advocated for a filibuster. By the time Calhoun pushed for it the founders were all dead. The filibuster has no roots in the U.S. Constitution. For the 87 years between the end of Reconstruction and 1964 the filibuster was only used to block civil rights legislation. The modern filibuster has become so routinized that all it requires is for one senator to send an email invoking it, a mechanism that assures McConnell of the ability to block nearly all legislation and bring the basic legislative function of Congress to a standstill. This is a blocking power that McConnell has used more than any other Senate leader. I still recommend the podcast and the book. You will emerge armed with facts–and angry.

What is McConnell’s negotiating strategy for trying to extract this promise from Democrats? It’s complicated. With Kamala Harris as the deciding vote, Democrats have a 51-50 majority in the U.S. Senate, but already Mitch McConnell (R-KY) is blocking the work of Senate, trying to extract a promise from Democrats to keep the Senate filibuster intact in its current form. How does this work?

Every two years we hold a national election (like the one last November) that changes the composition of Congress seated at the beginning of the following January, two months later. With each new two year Congress (this new one is the 117th), both houses start the session by voting in a new set of rules (the “organizing resolution”). Unless new rules are established, the House and Senate would carry on under rules established at the beginning of the last Congress. Usually the organizing resolution is done mostly within the majority party, the changes are perfunctory, the legislative body passes the resolution by majority vote within its chamber and off they go. The process of rules change is seldom newsworthy, but with Mitch McConnell negotiating nothing is ever easy. This is only the fourth time the U.S. Senate has been evenly divided, so there isn’t a lot of precedent. (The other three times this happened the even split was short-lived. There are a lot of old people in the Senate. They become ill and die. Sometimes they switch parties.)

From an article written by Abigail Abrams in the January 12 Time:

The first hurdle is the organizing resolution

Incoming Democratic Majority Leader Sen. Chuck Schumer and outgoing Republican Majority Leader Mitch McConnell will have to agree on a set of rules, known as an organizing resolution, which governs how the Senate works. The organizing resolution determines everything from committee membership and staff budgets, to who gets the best office space.

Even with Harris’s tie-breaking vote, Schumer will need McConnell’s support: passing the organizing resolution requires 60 votes. As a result, Republicans will likely end up with much more power than a minority would usually hold.

The last time the Senate was split 50-50, in 2001, lawmakers agreed on an organizing resolution that allowed both parties to share power. Under that deal, the parties agreed to split committee memberships and staff equally and changed the rules, making it so that if a tie vote prevented a measure from moving out of committee, either the majority or the minority leader could bring the bill to the Senate floor.

Schumer and McConnell may take a cue from that 2001 agreement, but Senate observers note that, in these hyper-partisan times, agreeing on even the rules of the road may be tricky. “As partisan as it was in 2000, things have become even more partisan,” says Sarah Binder, a senior fellow in governance studies at the Brookings Institution.

The prospect of ditching the filibuster

In theory, Senate Democrats could change the cloture rule—and, with it, the need for 60 votes. They could, in other words, kill the filibuster.

There are two ways that Democrats could do that. The first is by holding a vote to change the Senate’s standing rules. The only problem is that a vote to change the rules requires a two-thirds majority. So, as has happened many times in the past, Senators can simply filibuster the attempt to eliminate the filibuster.

The second way to kill the filibuster is known as the “nuclear option.” That would mean that Senate Democrats vote to establish a new precedent in the chamber, which can require only a simple majority: the 50 Democrats plus Harris. The nuclear option has been employed twice in the past decade—once in 2013 by Democratic Senate Majority Leader Harry Reid and then once in 2017 by McConnell—to make it easier to confirm executive and judicial nominations.

In recent months, Democrats have been clamoring to eliminate the filibuster. Former President Barack Obama called it a “Jim Crow relic” and President-elect Biden said he’d consider eliminating it, depending “on how obstreperous [Republicans] become.” But Democrats are hardly in lock step over the issue. Sen. Joe Manchin of West Virginia has has said he will not support such a vote.

Offering a promise not to exercise “the nuclear option” and ditch the Senate filibuster would hand McConnell and immense victory for his obstructionist tactics. Without the threat of the nuclear option hanging over the heads of Senate Republicans, McConnell could wield the filibuster to clamp down on nearly all legislation sponsored by Democrats just like he did the last four years. Faced with Republican blockage what could Democrats accomplish? Only three avenues are open: 

1) Early in Trump’s reign there was a flurry of Republican legislation to roll back Obama’s executive orders under the “Congressional Review Act,” a sneaky piece of Republican legislation that avoids the filibuster and allows a simple majority of both houses to roll back administrative rules finalized late in the previous presidency–and block similar rules from being re-imposed. Democrats could (and should) use this tool. Republicans will surely attempt to run down the clock so that fewer Trump administration regulations are subject to the Democrats exercising the CRA. 

2) “Reconciliation” can be used to pass legislation related to the budget and spending with only 51 votes. Reconciliation can be used only once a year and its use is complicated. In 2017 Republicans shoehorned their attempted repeal of the Affordable Care Act into the Reconciliation process–and famously fell short of even getting the needed 51 vote majority with Sen. John McCain’s dramatic thumbs-down.

3) Finally, McConnell, in his zeal to place Federalist Society judges on the Supreme Court, used the “nuclear option” to blow up the filibuster as it pertained to Supreme Court nominations. As a result, if a Supreme Court seat were to become vacant, Democrats would certainly fill it using a simple majority vote.

Obstructionism serves McConnell and his Republicans well. The Party of “No” doesn’t need to legislate, except to pass tax cuts, and that can be done under the Reconciliation rules they used to pass the Tax Cuts and Jobs Act of 2017. That McConnell now wants Democrats to negotiate away their final “nuclear option” should be viewed with derision. 

The filibuster is a hideous anachronism, an obstructionist tool from our roots in slavery and racism that serves only to give Senators representing a minority of Americans veto power over all legislation. We need to be prepared to pitch it out.

Keep to the high ground,

Update: Late last Monday, January 25, hours after I wrote this, McConnell recalculated. Apparently, he decided that holding up Senate business over a demand for a promise to retain the filibuster was costing him in the court of public opinion. McConnell relented, but not before contacting and being reassured by Joe Manchin (D-WV) and Kristin Sinema (D-AZ) that they would not vote to abolish the filibuster–with a 50-50 break the voters of Manchin and Sinema would be required to get a majority to exercise the “nuclear option.” For an excellent overview of McConnell, his thirst for power, and his “deal with the devil” read Jane Mayer’s article in the New Yorker, “Why McConnell Dumped Trump.” Much of the same material is available without a paywall in an interview with Jane Mayer on NPR, “Sen. Mitch McConnell’s Post-Trump Posturing.”

Spokane’s White Supremacists

The Northwest was a haven for white supremacy before the area was divided into states. The territorial government over land that later became the State of Oregon passed the Oregon black exclusion laws that simultaneously outlawed slavery and prohibited black people from settling in the territory. Admitted as a state in 1859, the Oregon State Constitution contained a whites-only clause. The last of these laws weren’t repealed until the 1920s. After the Civil War the Northwest became a haven for Confederate soldiers fleeing the defeated Confederacy as the south struggled with Reconstruction. After all, in an all-white bastion, the issue of racial slavery could be left behind. With black exclusion laws and little industry looking for labor, the Northwest never become a destination for black people migrating northward in search of a better life as they fled share-cropping and Jim Crow in the South.  [See African American Great Migration(s) for more.]

So it was that when, in the 1970s, Richard Butler planted his flagrantly racist and anti-semitic ideas in the Aryan Nations compound north of Hayden Lake, Idaho, his militant brand of racial and religious hatred found fertile ground. Butler’s beliefs were cloaked in a malignant form of Christianity, the Church of Jesus Christ-Christian [1] The names Church of Jesus Christ–Christian and Aryan Nations were legally put to rest by the lawsuit that bankrupted Butler’s compound in Hayden Lake in 2001, but Christian Identity ideology continues to percolate in plain sight on the edge of Sandpoint, Idaho, in the form of America’s Promise Ministries on GN Road. The soft links of this church to racist violence and the nationwide Christian Identity movement are striking.

In Spokane County white supremacist ideology is alive and well, thinly cloaked in claims of “Christian” ideology or free speech and intellectual inquiry. In Spokane County this stew of far right, old testament Christianity admixed with white supremacy can usually be linked to two sources, the Covenant Church on Princeton Ave in north Spokane or Northwest Grassroots based in Green Bluff. Northwest Grassroots was founded and is still run by John and Cecily Charleston (aka Cecily Wright, former chairwoman of the Spokane County Republican Party). Their political reach is based both on Cecily’s former prominence in the Spokane County Republican Party and the couple’s hosting of “Movie Night” on the second Tuesday of every month for nearly ten years, an opportunity to share movies like “Hillary’s America” and “ShadowRing” with a like-minded audience of a hundred or so. The location of “Movie Night” is no longer revealed to any but the inner circle but was once routinely held at Darcy’s Restaurant and Spirits near Sprague and University in Spokane Valley. Some flavor of these gatherings can be had in a preserved internet link to an article in Gem State Patriot News from May 14, 2016. (Northwest Grassroots webpage is no longer functional. Their Facebook presence is now rather guarded and paranoid.

Politicians and far right agitators linked to the Covenant Church and Northwest Grassroots have recently been much in the local news. Each article in the following text is worth a read on its own merits, and it helps to recognize their multiple linkages through Covenant and NWGrassroots. Ken Peters, the former pastor and founder of Covenant, was one of the true believer’s present at the Trump rally in Washington D.C. on January 6. Shawn Vestal details Peters’ involvement in “Pastor who organized anti-abortion rallies in Spokane helped rally Trump supporters in D.C.” The revolving door between the Spokane Republican Party’s politicians and the Covenant Church is vividly illustrated by domestic terrorist and former LD4 (Spokane Valley north to Mount Spokane) Matt Shea’s becoming the Pastor of Covenant after Peters’ recent departure to spread his malignant ideology in Nashville, Tennessee. (Matt Shea also makes a cameo appearance in the Gem State article on NWGrassroots. I suspect he is frequent flyer at NWGrassroots when he is not out promoting his theocratic “Liberty State” and right wing militias.) 

Shawn Vestal in “As one Trump conspiracy dies, James Allsup returns to offer another” covers the fevered subsequent meanderings of this Charlottesville tiki-torch-carrying Christian Identity Republican warmly hosted at NWGrassroots by Cecily Wright in 2018. Allsup was introduced to that gathering as a victim of “label lynching,” a fatuous construction, given that Allsup has amply demonstrated the applicability of his label as a white supremacist and anti-semite. 

Then the crowning glory: “New state Rep. Rob Chase hires former Spokane County GOP chairwoman who resigned after defending white nationalist” informs us that Rep. Rob Chase (recently elected Republican State Rep, LD4, essentially the replacement for Matt Shea and devotee of NWGrassroots ideology) has chosen none other than Cecily Wright (of John and Cecily [Wright] Charleston, founders and guiders of NWGrassroots) to be his legislative assistant. Chase is quoted as saying he has know Cecily “for about twelve years.” Small wonder, NWGrassroots is the swamp out of which his political ambitions have grown. 

Probably none of the politicians and pastors and right wing folk mentioned today would preach white supremacy openly (apart from James Allsup), but the roots and associations are there, all wrapped up in a twisted form of non-denominational Christian Fundamentalism, 2nd Amendment rights, anti-choice activism, states’ rights,  the evils of Democrats, and co-opted words and phrases like Freedom, Patriotism, and “preserving the Constitution.” It all points to the insurrectionists that attempted an armed takeover of the U.S. Capitol Building on January 6, as Shawn Vestal points out in “The Capitol takover was foretold, time and again, in the patterns of Northwest extremism.” 

Learn the names and associations. Keep them in mind so as more stories unfold you can draw the associations: Matt Shea, Cecily Wright, Rob Chase, Ken Peters, the Covenant Church, Northwest Grassroots, and a few local associates I did not mention in this post: Rod Higgins (former Mayor and current member of theCity of Spokane Valley City Council, and occasionally featured speaker at NWGrassroots) and Caleb Collier (former City of Spokane Valley Council member, member of the John Birch Society [2], and frequent flier at Covenant). The Spokane County Republican Party depends on the voting numbers of these people to maintain their electoral grip in the region. The remaining traditional conservative Republicans coddle these people at their peril. 

Keep to the high ground,

[1] The Church of Jesus Christ-Christian was founded in 1946 by Ku Klux Klan member and former Methodist minister Wesley A. Swift, in Southern California based in the American version of the Christian Identity movement that formed a “christian” religious foundation for Nazi ideology in Europe in the earlier 20th Century. Swift’s father was a minister in the Methodist Episcopal Church, South, the part of the Methodist Episcopal Church that was centered in the south and broke away over the issue of slavery before the Civil War. Most (but not all) of the MEC,S reunited with the rest of Methodism to re-form the Methodist Church in 1939. (Only in 1968 did the current name, the “United” Methodist Church arise when the Methodist and Evangelical United Brethren [EUB] merged.) I was brought up and confirmed in the Methodist Church. Like most churchgoers I was, until now, mostly unaware of the doctrinal disputes around slavery and white supremacy that had rocked the foundations of my church in the recent past. For those interested in the historical fluidity of Christian belief systems, the weird foundational stories told, and the twisted ideas that have sometimes spun off, I recommend browsing the links in this paragraph. 

[2] The John Birch Society is experiencing something of a resurgence among the far right extreme of the Republican Party. This article, “Long before QAnon, Ronald Reagan and the GOP purged John Birch extremists from the party” chronicles Republicans’ uneasy romance with voters adherent to the JBS a half century ago. Now, with Trump’s nod to conspiracy theories, these folk form an increasing portion of the Republican base. Caleb Collier of Spokane and of Covenant Church serves as the executive field coordinator for the John Birch Society in 11 western states. His JBS has been active in stoking anti-mask fervor.

Republicans, Schools, and Taxes

Our most important community endeavor is the education of our children. In Washington State public education is funded mostly through property taxes, either property taxes levied by, and distributed by, the state or property taxes levied by local school districts. Funding schools with property taxes is a badly flawed system. Inevitably, such a system left to run free will result in poorer districts with a smaller tax base (on a per student basis) being able to raise less money for public education than wealthier districts, a process that widens the funding gap in public education. That’s what the Washington State Supreme Court’s often misunderstood McCleary Decision (2012) was about. Here’s how Wikipedia summarizes it:

Mathew and Stephanie McCleary et al., v. State of Washington (short form: McCleary v. Washington), commonly known as the McCleary Decision,[1] was a lawsuit against the State of Washington. The case alleged that the state, in the body of the state legislature, had failed to meet the state constitutional duty (in Article IX, Section 1) “to make ample provision for the education of all children residing within its borders.”[2]

The mandate to the Washington State legislature from the Washington State Supreme Court in the McCleary Decision couldn’t be clearer: Washington State is in violation of its own Constitution. Fix it. Find a way to fund public education that offers enough money to poorer districts so that all children in the state are “amply” provided for. We (the judicial branch) don’t legislate, you (the legislative branch) are given that responsibility. You need to comply with that which the state constitution  requires.

How to proceed? We in the State of Washington have the most regressive overall [that’s all state and local taxes, not just property taxes] tax system in the nation. “Poor residents here pay 16.8 percent of family income in state and local taxes  while the wealthiest 1 percent pay only 2.4 percent.” The obvious solution to the McCleary mandate was to tackle Washington State’s regressive tax system, but McCleary was handed down in 2012 after the rabidly anti-communitarian Tea Party surge (born of the racist backlash to the election of President Obama in 2008). These reactionary, anti-tax Republicans in the Washington State Legislature made any attempt to look a broader funding solution to the McCleary decision impossible. Instead, for the next six years the legislature lurched through its efforts to comply with McCleary by relying solely on adjustments of property tax-based funding, the same funding source that had engendered the unconstitutional underfunding of education that McCleary spotlighted. During those six years, the Supreme Court, fully understanding its lack of a legislative role, refused to approve a series of half solutions the legislature cobbled together. 

Finally, after six years, a compromise solution to McCleary that satisfied the Washington State Supreme Court was reached. The compromise was dubbed a “levy swap equalization,” by then Washington State Representative Michael Baumgartner (R, LD4–now Spokane County Treasurer) in an email sent to supporters. This “solution” satisfied both McCleary and the anti-tax Republicans by adjusting the property tax rate levied by the State of Washington upward while capping the allowed local school district levy rate. The overall pot of state and local money to fund education statewide remained about the same, but, by collecting and dispersing more of it through the state coffers, the McCleary mandate was satisfied. Money was trimmed from the wealthier districts and given to the poorer ones for “Basic Education,” i.e. averaging out the funding, spreading it across the state. That money, of course, came from school districts that had enjoyed a higher tax base. Thanks to the levy cap (the “swap” part) taxpayers in wealthier districts saw little change in their property tax, but their school districts not only saw a net decrease in funding but were hamstrung by the levy cap when it came to providing money for school programs (like librarians and school nurses), programs that extended beyond “Basic Education.” Baumgartner’s July 21, 2017 email exposes the Republican logic (and forever branded him for me as a conniving, deceitful, hyper-partisan politician for whom statecraft is seen as a zero sum game, not an effort to improve the lives of people):

…we [Republicans] triangulated a strategy to fund the state’s K-12 McCleary case through a “levy swap equalization” that will reduce overall property taxes on nearly 75% of households (largely in areas represented by Republicans) and increase property taxes largely in the Seattle area (represented by Democrats).

The whole McCleary episode was only sketchily understood by most voters (including me) as it stretched out over more than half a decade. The subject seems arcane, it’s full of numbers and budgets. The reporting on McCleary was poor, arcane and hard to follow. Understanding each new step in the tension between the Supreme Court and the Legislature required mastery of a fact set most of us never acquired as the story unfolded. 

Before Donald Trump most of us still imagined that the folks we elected to public office would safeguard the interests of all. Baumgartner’s hateful email was a wakeup call for me. Baumgartner is basically saying he wants to stick it to Democratic districts for Republican gain. He expresses no interest in the communitarian value of adequately funding public education. He and his Republican Party remain adamantly opposed to all taxation–even more so to progressive taxation that asks more from the wealthiest among us to help support community values like public education.

So here we are with ballots in hand for the February 9th Election with one ballot measure to vote on, a Spokane Public Schools (District 81) replacement levy asking the community to continue to provide funds for public school programs beyond “Basic Education,” programs that were standard fare when I grew up and was educated in the Wisconsin public schools. Last Monday, January 18, I touched on the February 9th Election. Then I wrote, “This year some folks, using social media, are running a disinformation campaign about the replacement levy that threatens to torpedo the vote.” I have since learned that the Spokane Republican Party Executive Board (the exact composition of which is not clear from their website), true to form, has taken a position against the replacement levy, a position some are amplifying on social media. Knowing what I know now their opposition boils down to this: We Republicans are against all taxation regardless of its purpose. Furthermore, we assume the folks working to educate our children in the Spokane Public Schools are reckless with the money provided them to run District 81. Therefore, funding should be squeezed by denying Spokane Public Schools this levy request! 

Vote “Yes” on your ballot today and drop it in a dropbox or mail it. For additional background (which does not include the historical origins of this issue based in the McCleary Decision), check out Urge your friends and neighbors to do the same.

Finally, keep in mind the Republican anti-communitarian, zero-sum mindset. Understand the starkly regressive nature of Washington State’s tax system and the staunch Republican opposition to all efforts to fix it. Republican ideology tries to keep the voters focused on the voters’ personal tax situation rather than considering either what our taxes do for the common good or the broad issue of regressive taxation. 

Keep to the high ground,

Pandemic Predictions

When will we be able to come out of our pandemic isolation and resume life with high confidence that we will not contract Covid-19? We all want to know, but predicting the future is always an uncertain endeavor. Using science to predict the end of a pandemic one might best be guided by the adage “plan for the worst and hope for the best.” In that spirit today I offer two different slants on pandemic prediction. 

The first is written by a friend, Bruce Chassy. Dr. Chassy holds a Ph.D. in Biochemistry and Molecular Biology from Cornell. He spent 21 years as a researcher at NIH and 23 years at the University of Illinois. This came to me (as well as the link to the more optimistic article below it) in email and is reproduced with permission:

What follows is a long post about where I think we are at in this pandemic. As you read, keep in mind that more and better therapies and vaccines could lead to a quicker and more favorable outcome. How about a pill that cures Covid-19?  It could happen.  What follows is based on where we are today, hopefully that will change for the better.

There was a story on one of the major networks yesterday about a documented case of someone who received the first vaccination on December 19th and now has a confirmed case of Covid-19.

95% means 19 out of 20 people are protected.  Somebody has to be the 20th and after hiding from SARs-CoV-2 for almost a year I don’t want it to be me.  Also unknown is whether a vaccinated person can contract and transmit to others without being ill.

So when can we
 get together?  When 70-80% of the population is vaccinated and new infection rates have crashed to almost nothing is what I am waiting for.  Do the math.  There are ~330 million Americans. If 100M are vaccinated in the first hundred days and 30 million have post-infection immunity, that amounts to a 40% immunity level.  If we assume these are non-spreaders then we would need to vaccinate another 100 million to reach 70% immunity.  That would crash the new infection rate pretty effectively.  It’s the low end of “herd immunity.”  If 100 days gets up to 100M vaccinated as Biden hopes,  and 200 days gets us to 200M, that will be sometime in early AUGUST… Approval of additional vaccines and significant increases in the rate of vaccination could also help control the pandemic.  The bottom line is don’t expect to be socializing in restaurants and bars for a long time yet.  

Herd immunity will not mean that Covid goes away.  It will be reduced to scattered cases and possibly isolated outbreaks, 
which, if not controlled, will could lead to pockets of epidemic spread.  Covid-19 could easily become like seasonal influenza or common colds.  It could be eradicated but it won’t be. Had the US relied on natural herd immunity to control the pandemic around 3-5 million might have perished. New drugs and antibody therapy might have reduced the carnage.  Historians would have named it Trump’s Holocaust. 

The real danger here is that the more people who contract the disease the greater the chance for adverse mutations.  We have already heard about fast spreading strains.  Should one of those strains not be prevented by the current vaccines, we will be in a lot of trouble.  A more lethal mutation could be even worse.  That is why it was so important to have controlled SARs-CoV-2 as early as possible.  Trump stole that opportunity from our public health experts. Trump couldn’t possibly have understood when the experts explained “More Cases” =  “greater chance for disastrous mutations” because his evaluation was there was nothing in it for him.  Anything that hurt the economy could hurt his chances for re-election.  It’s water under the bridge, but had he mobilized the public health system in January 2020, closed the borders, applied the defense mobilization acts and committed to a national emergency effort to control Covid-19, we would not be where we are now.  And where we are could be the edge of a very slippery slope because millions of cases mean millions of mutations.  Genetics is a numbers game and organisms that multiply quickly change quickly.

As regards controlling Covid-19 Winston Churchill may have said it best:

“This is not the end, this is not even the beginning of the end, this is just perhaps the end of the beginning.”

For counterpoint, a “hope for the best” point of view, Professor Chassy offered a link to David Leonhardt’s column in the NYTimes from January 18th entitled “Good morning. We explain why the vaccine news is better than you may think.” I take the liberty to reproduce it here:

‘We’re underselling the vaccine’
Early in the pandemic, many health experts — in the U.S. and around the world — decided that the public could not be trusted to hear the truth about masks. Instead, the experts spread a misleading message, discouraging the use of masks.
Their motivation was mostly good. It sprung from a concern that people would rush to buy high-grade medical masks, leaving too few for doctors and nurses. The experts were also unsure how much ordinary masks would help.
But the message was still a mistake.
It confused people. (If masks weren’t effective, why did doctors and nurses need them?) It delayed the widespread use of masks (even though there was good reason to believe they could help). And it damaged the credibility of public health experts.
“When people feel as though they may not be getting the full truth from the authorities, snake-oil sellers and price gougers have an easier time,” the sociologist Zeynep Tufekci wrote early last year.
Now a version of the mask story is repeating itself — this time involving the vaccines. Once again, the experts don’t seem to trust the public to hear the full truth.
This issue is important and complex enough that I’m going to make today’s newsletter a bit longer than usual. If you still have questions, don’t hesitate to email me at
‘Ridiculously encouraging’
Right now, public discussion of the vaccines is full of warnings about their limitations: They’re not 100 percent effective. Even vaccinated people may be able to spread the virus. And people shouldn’t change their behavior once they get their shots.
These warnings have a basis in truth, just as it’s true that masks are imperfect. But the sum total of the warnings is misleading, as I heard from multiple doctors and epidemiologists last week.
“It’s driving me a little bit crazy,” Dr. Ashish Jha, dean of the Brown School of Public Health, told me.
“We’re underselling the vaccine,” Dr. Aaron Richterman, an infectious-disease specialist at the University of Pennsylvania, said.
“It’s going to save your life — that’s where the emphasis has to be right now,” Dr. Peter Hotez of the Baylor College of Medicine said.
The Moderna and Pfizer vaccines are “essentially 100 percent effective against serious disease,” Dr. Paul Offit, the director of the Vaccine Education Center at Children’s Hospital of Philadelphia, said. “It’s ridiculously encouraging.”
The details
Here’s my best attempt at summarizing what we know:
The Moderna and Pfizer vaccines — the only two approved in the U.S. — are among the best vaccines ever created, with effectiveness rates of about 95 percent after two doses. That’s on par with the vaccines for chickenpox and measles. And a vaccine doesn’t even need to be so effective to reduce cases sharply and crush a pandemic.If anything, the 95 percent number understates the effectiveness, because it counts anyone who came down with a mild case of Covid-19 as a failure. But turning Covid into a typical flu — as the vaccines evidently did for most of the remaining 5 percent — is actually a success. Of the 32,000 people who received the Moderna or Pfizer vaccine in a research trial, do you want to guess how many contracted a severe Covid case? One.Although no rigorous study has yet analyzed whether vaccinated people can spread the virus, it would be surprising if they did. “If there is an example of a vaccine in widespread clinical use that has this selective effect — prevents disease but not infection — I can’t think of one!” Dr. Paul Sax of Harvard has written in The New England Journal of Medicine. (And, no, exclamation points are not common in medical journals.) On Twitter, Dr. Monica Gandhi of the University of California, San Francisco, argued: “Please be assured that YOU ARE SAFE after vaccine from what matters — disease and spreading.”The risks for vaccinated people are still not zero, because almost nothing in the real world is zero risk. A tiny percentage of people may have allergic reactions. And I’ll be eager to see what the studies on post-vaccination spread eventually show. But the evidence so far suggests that the vaccines are akin to a cure.
Offit told me we should be greeting them with the same enthusiasm that greeted the polio vaccine: “It should be this rallying cry.”
The costs of negativity
Why are many experts conveying a more negative message?
Again, their motivations are mostly good. As academic researchers, they are instinctively cautious, prone to emphasizing any uncertainty. Many may also be nervous that vaccinated people will stop wearing masks and social distancing, which in turn could cause unvaccinated people to stop as well. If that happens, deaths would soar even higher.
But the best way to persuade people to behave safely usually involves telling them the truth. “Not being completely open because you want to achieve some sort of behavioral public health goal — people will see through that eventually,” Richterman said. The current approach also feeds anti-vaccine skepticism and conspiracy theories.
After asking Richterman and others what a better public message might sound like, I was left thinking about something like this:
We should immediately be more aggressive about mask-wearing and social distancing because of the new virus variants. We should vaccinate people as rapidly as possible — which will require approving other Covid vaccines when the data justifies it.
People who have received both of their vaccine shots, and have waited until they take effect, will be able to do things that unvaccinated people cannot — like having meals together and hugging their grandchildren. But until the pandemic is defeated, all Americans should wear masks in public, help unvaccinated people stay safe and contribute to a shared national project of saving every possible life.

I want to close today with something fun. For years now one of my favorite things has been the camaraderie of Sea Chanty singing. Recently, there has been renewed interest in Sea Chanty singingspurred by TikTok and longing for community made more poignant by pandemic isolation. At the link that follows watch a one minute video that combines Sea Chanty singing and vaccine science. It’s a hoot. Definitely worth your minute::

Keep to the high ground,

Let’s Not Lose Track

Right now, most of our attention is focused on events in Washington, D.C. following the Trump insurrection January 6th. To be sure, the attempted coup, the violence and vandalism in the U.S. Capitol, was a riveting event will be forever seared into the memory of Americans. The havoc wreaked by the most extreme of Trump’s followers, driven on by his lies and instigation, havoc that threatened the lives of legislators performing their Constitutionally prescribed duty, is a low point in our history. Many Republican electeds, including Cathy McMorris Rodgers (U.S. Rep. CD5), legislators who have enabled Trump for four years because he gave them some of the things they wanted, are, no doubt, concerned about their political future, caught between the seditious, militaristic followers of the worst President the U.S. has ever suffered and whatever remains of the former Republican Party.

In the midst of all this, the world has not stopped. City councils, county commissioners, state legislatures, and health departments are still working. Let’s not lose track. 


There is another election coming up February 9th. It’s important, especially in Spokane, since the result affects the education of our children and our grandchildren. We are asked to vote on a replacement levy for Spokane Public Schools, a levy that will continue to the cover around 13 percent of the budget, the part beyond Basic Education. (Basic Education is funded by money from the State of Washington [which comes originally from us, of course], baseline funding mandated by the McCleary Decision to insure that school systems in areas with low tax bases can afford to educate–but that is a whole other complicated story.)

The voters if District 81 (Spokane Public Schools) have a long history of approving replacement levies like this one, but it is never guaranteed. This year some folks, using social media, are running a disinformation campaign about the replacement levy that threatens to torpedo the vote. Among the arguments offered is the idea that teachers have it easy during the pandemic because some schools aren’t holding in-person classes, so we should “hold them to account.” On the contrary, every teacher I know is working twice as hard as usual trying to learn and keep up with the shift to online classes. It seems there exist people who object to funding public education as a common good either because they don’t have children, they don’t like the public school system because the curriculum offends them in some way, or because they project greed and fiscal mismanagement on the school system as one aspect of their polymorphous distrust of all tax expenditures and government in general. 

Ballots will be mailed to all District 81 voters by this coming Friday, January 22nd. They are due back by 8PM Tuesday, February 9th. As soon as you receive your ballot, please vote it, so that it doesn’t get buried in the junk mail. Put it in one of the drop boxes or drop it in the mail (long before Feb. 9). Please check, but I think the postage is covered. 

But here is what else you can do for this effort: There is a great little video at that offers the basics of levies. In the menu bar on that page is link to FAQ that is also worth visiting. Learn. Talk with your friends and neighbors about the importance of once every three year renewal. Click on endorsements and add yours (eloquence not required) and then click on Donate and add to this effort. This is legit. I know people volunteering a lot of time to assure this replacement levy passes. You can look at fiscal anatomy of the Citizens for Spokane Schools, 2021 PAC at the WA State Public Disclosure Commission.

If you’re not in District 81 you’re not off the hook. Nearly every school district in Spokane County has one or even two propositions on the ballot for February 9th. Check out your local district’s proposal. 


HB 1156 – 2021-22, “Increasing representation and voter participation in local elections,” is in committee at the Washington State State House. This bill becoming law is necessary to adjust Washington State Law (RCW = Revised Code of Washington) to allow local jurisdictions to carry out Ranked Choice Voting (RCV) Elections. This bill does not mandate RCV elections it only makes the legally possible. A visit to the actual text of HB (House Bill) 1156 lists the House co-sponsors and quickly shows some of the complexity required in modifying existing law to make sure all the details are correct. The hope is to get this change in the law done this legislative session. Otherwise, a huge amount of effort will be put toward a ballot initiative in coming years–all that just to make it possible for local areas try ranked choice voting. If you already understand and like RCV go to and register a comment of support. If you’re still fuzzy on the how it works, check out the resources at

Keep to the high ground,

Ranked Choice Voting Plus

First, a reminder:: If you have any questions about what Ranked Choice Voting (RCV) is or how it works, plan to attend the local Fair Vote Washington chapter Zoom “Ranked Choice Voting 101” this coming Monday, January 11th, 7-8PM. These are the basics. It’s a great presentation with local people. This is one of the ways Washington State (and, later, maybe the rest of the country) can help avoid repeating the last four years. If you are available to join, please register to receive the join link. (I advertised a different meeting around RCV [See “Elections-A Better Way] that happened last December 14. Some of you may have attended. Our Spokane County Auditor, Vicky Dalton, was available to answer questions on that Zoom, which was great, but that Zoom lacked the time to go over the basics. RCV 101 covers the basics.

Fox News v. MSNBC on the insurrection/riot. Last week Wednesday, January 6, I was seated, socially distanced from two other watchers, in a waiting room seeing the violence and destruction in our U.S. Capitol Building unfold in real time on ABC TV. It was quickly apparent that the three of us were similarly aghast at the unfolding spectacle. After fifteen minutes or so, a late middle aged woman pushing someone in a wheelchair passed behind us, glanced over her shoulder at the television and declared loudly, “All you see there is lies. You need to watch OAN [One America News]!” All three of us realized that my response, stated calmly, “Lady, you need to crawl out of your news silo and come up for air,” had zero chance of changing her mind. Clearly, talking this woman out of OAN would be like trying to extract a believer from the Jim Jones cult before they drank the Kool-Aid. I’ve met other pro-Trump cult members devoted to the news they get from The Epoch Times, financed and run by the Falun Gong, now based in New York City. Copies of The Epoch Times are sprinkled across news stands in Spokane. You may have had one or several sent to you. And, then, of course, there is the whole QAnon cult. The people adherent to these sources of dis-information are among Trump’s most loyal followers. 

I do not ordinarily have access to cable TV, but this weekend I did. The One America Network (OAN) was not offered, but I had access to Fox News and MSNBC on adjacent channels. Fox News (and the Wall Street Journal) are part of 20 billion dollar media empire owned and run by Rupert Murdoch and his family. [Aside: Some have cited the absence of Murdoch-controlled media in New Zealand as a major reason the Kiwis have done so well controlling Covid-19.] The contrast between the coverage and opinion could not have been more stark. MSNBC was wall-to-wall footage of the mayhem at the Capitol, the Trump speech just before that egged on the insurrectionists, and talk of resignation, impeachment, and the 25th Amendment. 

On Fox I watched parts of Watters’ World and parts of The Greg Gutfeld Show, both talking head programs of which I had never before heard. The striking thing was the uniformity of message: The mayhem at the Capitol was deplorable. It was carried out by crazy people who needed to be punished! Both shows then went on to draw a grossly false equivalency between the BLM protests this last summer and the Capitol mayhem. Both shows featured clips of talking heads on other media who were portrayed as downplaying the violence last summer, and ridiculing them for any rage they expressed over the events of January 6. Even more striking was the absence of coverage of Trump’s exhortation to take over the Capitol. It were as if the rioters had simply materialized on their own. Impeachment would be an unjustified effort by crazed Democrats like Nancy Pelosi, all the “haters” intent on destroying the country with socialism. Goebbels must be smiling. When talking with any Republican you know with whom you can still have a conversation, beware that this false equivalency narrative may be fresh on their mind accompanied by little awareness of Trump’s blatant incitement to riot. 

It is quiet long, but if you have access to the New York Times Magazine this is a great read:, The article is entitled “The American Abyss.”

There is much to do, much to shore up, much to repair. This evening from 7-8 get informed about Ranked Choice Voting with the Zoom meeting RCV 101. Here’s the link for signup again: register to receive the join link.

Keep to the high ground,