The party with a better economic record

November 3, 2015

Paul Krugman makes it very clear that the economy regularly and systematically does better under Democrats than Republicans even though Republicans keep claiming a better record:

He’s spot on about Republican hypocrisy – they need to encourage belief that the economy will do better under Republicans to convince people that their favors to the wealthy are useful. The more they tell that story the more the voters seem ready to believe them regardless of reality. The rest of us need to better inform the voters.

Who We Work to Support

September 29, 2015

We’ve all seen bumper stickers that complain, “I work so welfare queens don’t have to” and other complaints about taking care of people in need. Conservatives, Republicans, Tea Partiers all tell us the problem is “entitlements.” And people are mad. They do not want to work to pay for other people’s entitlements.

Except it is impossible. The richest 1 percent in the United States now own more wealth than the bottom 90 percent.[i]  And the top 20% of American households, whose average income was around a quarter million dollars get the majority of Americans’ yearly income from all sources.[ii] So, yes, we work for others, but not for the people who are poor, unemployed or disabled. We work to support the wealth of the people who get all the money. They claim not to need our help, but only because they already took our money.

They want us to believe that’s just “natural,” that they have that money because they sold us such useful things, and whatever the market does is perfectly proper. But actually it’s because of all the tax benefits they have, so that Warren Buffet properly pointed out that his secretary pays a larger percent of her earnings than he does. As Buffet understood, that’s not natural. It’s the kleptomania of the rich, the people who control the lobbyists for themselves and their businesses and who finance the political campaigns of the lackeys we call congressmen and senators.

Their forms of income are protected – the top tax rate is no longer high but they still get a break for capital gains, deductions for all the lobbyists and accountants they pay to make sure they don’t pay their share of the tax burden, and the privilege of moving their money to tax havens. Of course they will lend back to government, at interest, the money they aren’t investing in job creating activities, the money they have protected themselves from having to pay as taxes like the rest of us.

It’s also because they convince their lackeys that their companies shouldn’t be regulated either; they should be allowed to monopolize markets so we’d fill their pockets faster, and they should get government help for the very financial vehicles they used to wreck the economy, instead of helping the people that they took advantage of in scams called derivatives, credit-default swaps and subprime mortgages. It’s all rigged and it isn’t you and me that are taking advantage of the system.

But their lackeys say they’re the job creators – indeed even while they are sitting on money they don’t think it worth their while to spend. That’s called chutzpah!

What’s worse, this is a vicious cycle – the rich control the politics so they can get wealthier and control the system ever more tightly. When does it reach a point when we no longer have a democracy? Indeed, what kind of democracy is it if all the candidates have to get the blessing of the enemies of the people.  Is that the democracy we fought for? And can we get it back?

— commentary was broadcast on WAMC Northeast Report, September 29, 2015.

[i] Nicholas Kristof, An Idiot’s Guide to Inequality, NY Times, July 23, 2014. See also Tom Kertscher and Greg Borowski (March 10, 2011). “The Truth-O-Meter Says: True- Michael Moore says 400 Americans have more wealth than half of all Americans combined”. PolitiFact.
[ii] The Distribution of Household Income and Federal Taxes, 2011, Congressional Budget Office Report, November 12, 2014,

Amtrak Subsidy

August 25, 2015

I’d like to talk about an issue that has been below the surface of the news but reflects a constant disagreement in our politics. Economic conservatives would displace almost everything in favor of the marketplace. But when you decide what to pay for, what are you including or excluding from the transaction?

Perhaps you’ve been following the arguments about subsidizing Amtrak, for example.[1] The details are more complex but I want to set out the basic issue. Passenger trains and commuter rails and busses tend to be subsidized by government. If they depended on the marketplace alone, they would fail. When any of us decide whether to take Amtrak or a city bus, or the subway in New York City or Washington, we are thinking of the personal costs and benefits. I’ve calculated, for example, that when I go to New York City, unless my wife is going down with me, it is cheaper to take Amtrak than to travel alone by car.

But if Amtrak failed, the trip to New York City would impose much greater burdens on me than just the cost. Given that this corridor is one of the busiest passenger rail corridors in the country, that would put a lot of people on the highway. It could make the trip slower, the likelihood of accidents on a more crowded highway greater, and, of course, unlike an Amtrak trip, I couldn’t read or work on the road.

Notice, though, that those burdens of extra traffic on the highway don’t just affect me. They affect everyone on the road. And my Amtrak bill does not reflect those benefits of mass transit. There isn’t any calculation on any bill that identifies the costs to me and to all of us if Amtrak were allowed to fail.

And of course I haven’t listed all the costs. The pollution costs of taking the car are much more than the pollution attributed to train travel. Highways take a great deal of land that we could have enjoyed for other purposes – their land use is much less efficient. They are expensive to police, expensive to clear for winter travel, and expensive because of the damage from salt splashed on the underbodies of our cars and washed into our rivers and streams.

Nor do those calculations take into account the impact on global warming. It isn’t possible to be precise about the cost for global warming. But it will be large and should be accounted for. Many things can’t be put into numbers. What’s love or freedom or life itself worth in dollars? As a common ad says, “priceless.”

So to see if subsidizing Amtrak is justified, we have to add all those shared benefits to ourselves and each other that can’t be part of the ticket price. Social benefits have to be paid for by the whole society. None of us alone can buy the benefits of less climate change or less congested highways.

So yes, I believe in subsidizing mass transit and helping it grow. I think it is valuable for those who don’t take it too. More generally, the marketplace doesn’t handle every problem well.

— This commentary was broadcast on WAMC Northeast Report, July 25, 2015.

[1] See for the Congressional Budget Office discussion. Individual routes raise additional considerations but even those decisions impact the entire system.

Regression to the Mean

August 18, 2015

Social scientists have a phrase, “regression to the mean.” What they mean is that the law of averages eventually fells families, companies or countries that are doing better than average, and eventually lift those doing much worse than the average. Now for all of us who like to say the United States is the best in the world, there is a prospect to consider.

We could just get fatalistic; it’s going to happen so what can we do about it. But of course we didn’t succeed by fatalism. Americans escaped, trekked, traveled, by rickety sailboats and steerage and every other way imaginable to get here and then they cleared the wilderness and conquered the continent and then took on the world. No fatalism about that.

They didn’t stare at each other saying we can’t do or build this or that; they joined together or got the government to help. Until the fatalists took over. Reagan said government is the problem. Strange remark, from a man who either should have known better or did, because when he took over the U.S. Government was actually remaking the world, our world. Perhaps you didn’t know that the internet was developed by DARPA as a national security project to make up for a strategic weakness of the old fashioned telephone system. Or that the transistors that run everything you use were developed as part of a government war effort. There isn’t much that you and I touch that weren’t connected in some way to the government space effort.

I could tell that story for every American generation. Government that is devoted to the welfare of the people, began here. The banking system, the transportation system repeatedly rebuilt as new technology developed, schools and the university system, the list of government projects for us is endless – until we stopped trusting each other and our own government.

So how do we stay strong, healthy, and successful? Some think we do it by fighting everyone. They must have grown up in a very tough neighborhood. Those who crunch the numbers figured out a long time ago that arms are what economists call a deadweight loss. Sometimes you really need them but they contribute zero to the economy except for the research. And like the barroom brawler, everyone’s gunning for the top gun.

We got where we are because of our economy. You can look at the economic numbers and see when Germany got ahead of England and France and then when the U.S. surpassed Germany. It’s all in the numbers. Ever since that other fatalist, George Bush said “read my lips; no new taxes,” Americans have imagined that progress was free. But we got where we are because government did the things needed to facilitate what the rest of us could do, travel, save, study, communicate, ship, research and on and on.

But now America feels so poor that it can’t repair its infrastructure, can’t fix the cables, the water and sanitary systems, can’t fund its university system except on the backs of students who haven’t yet had a chance to earn a living. If America is truly that poor, it will regress to the mean.

— This commentary was broadcast on WAMC Northeast Report, August 18, 2015.

Environmental Time Wasted

July 28, 2015

A news director at this station, about a decade ago, wanted me to engage in what some call pack journalism, to talk about whatever was occupying the press’s attention. I understood his point; people’s interest was already peaked. Plus the more people talk about the same things, the more it tends to sink in. But I’ve never liked piling on. If you heard it elsewhere, I feel no need to restate it. I like to bring up something else, or a different perspective. I feel more useful that way.

This week I’d like to bring up a case much less talked about than the Supreme Court term’s blockbusters on same-sex marriage and medical care. Those are very important decisions. But here’s another worth examining. On June 29, the Supreme Court decided Michigan v. EPA. According to Justice Scalia and the conservative majority, the case was about whether the EPA needed to consider the costs of regulation. According to Justice Kagan and the liberal dissenters, the case was about whether the EPA needed to consider costs separately before considering specific regulations.

Sometimes court decisions lead one down the rabbit hole with Lewis Carroll. According to Justice Kagan, the EPA did consider costs. It took costs into account in the specific regulations for each type of power plant. It considered costs by adopting ways to mitigate the cost of the required measures to catch up with up-to-date emissions control systems. It decided against more stringent controls because it decided they would not be cost-effective. And it elaborately examined the quantifiable costs and benefits. The problem: it did all that in the wrong order. The result – the rule is on hold now; the agency will have to do some work to show it studied cost the way the Court wants it done before it can reimpose regulation.

That’s one of the main purposes of taking administrative agencies to court – delay can be worth a lot of money to business and industry even if they will eventually have to comply. In other words, regulations can protect the public, but courts can delay them.

Barely mentioned was how much mercury and other toxic pollutants coal fired power plants could send into the air we breathe. Scalia and the industry said there were merely several million dollars damage to the public per year. Kagan and the EPA said the damage was in the tens of billions. Of course much of the damage cannot be measured in dollars anyway – it is about lives damaged and destroyed by mercury and other toxic pollutants.

Republicans have been fighting for years against regulation of mercury emissions. Democrats just as long have been fighting to clean the air of the kinds of things that could damage our health and our ability to lead productive lives. But consistency is the hob-goblin of little minds: Republicans would do everything possible to control addictive drugs that damage our lives, health and minds – they are used by bad people. But Republicans would not control pollutants that damage our lives, health and minds – they are emitted by good people. Democrats, of course, the reverse.

So which congressman, and which justice, is in whose pocket? Some of them apparently define good and bad people by the money in their pockets instead of the things they do to others. Whatever happened to equal justice?

— This commentary was broadcast on WAMC Northeast Report, July 21, 2015.

How America Would Handle Greece

July 14, 2015

What are the lessons from the Greek crisis? Their economy had major problems. People with plenty of money weren’t bothering to pay taxes. And the Greek government provided benefits beyond its means and beyond the pace of investment to maintain. So the EU was certainly correct that Greece had problems that Greece has to deal with. But that’s not the whole story. Greece needed multiple remedies, to cure its mistakes but also to stimulate its economy.

Think about what we do in America. Periodically states are bankrupt or depressed. We don’t offer secession or a sale to Mexico. We didn’t ignore problems in Appalachia, Arkansas and other struggling states. Within states, we don’t ignore depressed areas. Sometimes we put communities in receivership, but that’s not our only tool. Although Tea Party Republicans don’t want to recognize it, we do have another American strategy – we invest. The Cuomo Administration is investing in areas around colleges and universities, spread throughout the state. We’ve had business empowerment zones. Military bases have been used for economic purposes. And we build infrastructure or housing or convention centers. Some investments are unwise wishful thinking. But the instinct is shared, American, and, used intelligently, it works. Conservatives don’t like to admit the Keynesian economics behind it, but they use these techniques wherever they are in control. They just call it good business.

States are barred by the Constitution from printing money. If Greece exited the Eurozone, it could issue currency or pay its employees with i.o.u.s for use as currency. Either way a devalued currency could make Greek goods and services worth buying.

Greece’s finance minister accurately explained that austerity deepens recession. The EU has responded with the same economic strategies that had been discredited before the Great Depression of the ‘30s. If the economy shrinks in response to austerity, nothing is left to pay debts, much less to invest. For an economy in trouble austerity alone is the wrong prescription at the wrong time for the wrong disease. It works only if the desired outcome is to kill the patient. Unfortunately, the EU hasn’t used other tools needed to deal with the recession.

The lesson here is the contrast. Cutting expenses cannot be the only tool. Investment works. Infrastructure, science and educational investments work. Congressional conservatives are too skittish about investing in America. They need to do what their own state governors do – invest in economic development. There is plenty of room in the U.S. for investment that will contribute to the American economy. Intelligent public investment can yield multiple rewards: the immediate reward of assisting people get back on their feet, the return of some of that money as taxes, and the longer term rewards of facilitating business. That is the virtuous cycle that every good economy needs.

Neither taxes nor tax cuts automatically yield economic benefits. Cutting business taxes will probably not raise the chances of business investment if they are already sitting on money. Cutting personal taxes won’t put us on the road to recovery to the extent that consumers buy abroad. The devil is in the details. But the visceral objection to all investment by government because it is government needs to give way to a more intelligent discussion of the investment we need and the investment that will pay dividends for years.

— This commentary was broadcast on WAMC Northeast Report, July 14, 2015.

The Court’s attack on the “ever-normal granary”

June 30, 2015

I’ve been celebrating like many of you over the marriage equality and Obamacare decisions last Thursday and Friday. But my own celebrations are tempered by the realization that these two cases don’t symbolize any shift on the Court. Kennedy’s libertarian philosophy has paid dividends in the gay rights controversy for years. But the decision last November to hear the case challenging whether federal health exchanges could provide subsidies to those without the money to buy a health plan unassisted, turned into a trap.[1] The scale of damage that would have been done by blocking the subsidies made it impossible even for opponents of the program to shut it down. Nothing in the decision suggests that Kennedy had a change of heart about having wanted to declare it unconstitutional, and nothing suggests that Roberts had a change of heart about narrowing the commerce power, even though he had approved the individual mandate in the statute as a tax. Twenty years ago, Thomas wrote he would consider going back to the Court’s very restrictive definition of federal powers before 1937 when President Franklin Roosevelt’s appointments changed the Court’s philosophy. Apparently Scalia and Alito are on Board with him.

That brings me to raisins.

Horne v. Department of Agriculture,[2] looks like the Supreme Court is maneuvering to get us back to the era when it throttled government economic policy. Horne held unconstitutional a program to keep the supply of raisins on an even keel.

Roosevelt’s New Deal Administration had the dream of an “ever normal granary” for farmers. Their prices were spiking in both directions, making farming very difficult especially for family farmers whose resources to endure periods of low prices were limited. The statute was passed in 1937 to create the “ever-normal granary,” in order to deal with the effects of the great depression, stabilize prices, preserve supplies against shortages from drought or other natural causes and to protect farmers against “disastrous lows” from bumper crops.[3]

The result was a program to store portions of crops in government facilities when supply exceeded demand and release them in periods when yields were too low. It was a program designed by farmers for farmers.

The Horne decision used the takings clause to overrule part of that nearly eighty year old statute which had been designed to help pull the country out of the great depression of the ‘30s.

If one simply reads the words of this Roberts Court decision, it looks easy to get around. Government could use a regulation or a tax. And there are other ways to make this decision seem appropriate and unthreatening.

But I don’t believe it. This case has been part of a decade long set of challenges looking for a way to take down federal agricultural marketing policies. The attorney for the Hornes was a well-known conservative activist, professor and former judge. I doubt he handled this case just because he sympathized with the Hornes.

Similarly, when the Rehnquist Court decided United States v. Lopez in 1995 on federalism grounds all the constitutional scholars said it was insignificant, a shot across the bow but portending nothing. Within a few years it was clear they were wrong. The Court started declaring civil rights statutes unconstitutional as violations of principles of federalism that are nowhere in the language of the Constitution.

This case is not a one off. The Court has been developing takings doctrine so that it can be used to block federal regulation of the economy and the environment. The conservative faction on the Roberts Court is trying to develop legal tools to return the U.S. to a period in which we are a congerie of 50 small states instead of a single proud country. And if that happens, family farmers especially may be sorry to be free of federal regulation.

— This commentary was broadcast on WAMC Northeast Report, June 30, 2015.

[1] Linda Greenhouse, The Supreme Court’s Reality Check, NY Times blogs, June 25, 2015,

[2] Horne v. Dep’t of Agric., 2015 U.S. LEXIS 4064 (2015).

[3] Mordecai Ezekiel, Farm Aid-Fourth Stage, The Nation, February 26, 1938, Vol. 146, No. 9, p. 236-238, available at


Get every new post delivered to your Inbox.

Join 266 other followers