Paying for the Virus

March 31, 2020

In his discussion of the financial consequences of the pandemic to New York, Gov. Cuomo has not mentioned that New York isn’t permitted to borrow the money it needs. The reason is a New York State constitutional prohibition. Many states prohibit borrowing except for capital expenses. When states were permitted to borrow for current expenses, they ran up large debts and the practice needed to be stopped. So, many state constitutions barred the practice. New York requires a law to be submitted to the voters for specific purposes. The Governor does not have the time to satisfy New York’s constitutional rules. For the moment, he’s stuck.

The same prohibition does not apply to the federal government. Economists understand that fiscal stimulus is an important tool for dealing with economic downturns. But clearly the feds have misused it, giving large tax cuts to the wealthiest people and corporations, cuts not used in any way to stimulate the economy but that did significantly increase the national debt. That was the kind of misbehavior that led states to take the power away.

This, however, is an example of a time where deficit spending is completely appropriate. Dealing with the virus is expensive. The feds have provided some relief though politics has affected who got what. But there is an additional problem – with a large part of the workforce ordered to stay home and businesses shuttered, there is a very large downturn in tax payments flowing to government. The federal government can borrow to fill that gap and it can provide relief to the states. But most states can’t help themselves. The result, as usual, is that this becomes another way for Republicans to force everyone to cut what they spend on services – in this case, because the big budget item is education, the feds are forcing states like New York to cut funding on schools. Whoopie – isn’t that great planning for the future.

The Federal Reserve is trying to stimulate the economy but chairman Powell has been very clear that the Fed cannot solve our problems because the financial system is not the main problem, not even close. There are supply side, demand side and income problems. The Federal Reserve’s tools provide little help on the income side. It’s a little too simple to say that the Federal Reserve has no fiscal powers because it can lend to the federal government, but it can’t force the federal government to borrow, or to put that in its budget. So unless Congress and the Administration decide that there is a need to help the states meet the costs of running their school systems and other necessary services, the states are stuck doing what Republicans always want them to do – cut their services to the people. If they do that, then rich folk won’t have to bribe their kids ways into college because only the rich will have kids sufficiently educated to go to college, and all the disparities in America will get even bigger.

Grabbing all the goodies for fewer and fewer people seems to be the dream of those who finance Republican campaigns, but I can’t see why any of the rest of us would accept it – unless Trump pulls the wool so far over people’s eyes that the people don’t understand that he and his Republican friends are using the epidemic to make most of us even worse off than we were before.

This commentary was scheduled for broadcast by WAMC Northeast Report, on March 31, 2020.


Trump’s negligence in the coronavirus epidemic

March 10, 2020

Presidents are obligated to “take Care that the Laws be faithfully executed.” They are supposed to manage, administer and appoint people to carry out the tasks of government. Trump interprets that as his right to fire experts and replace them with yes-men devoted only to him. He’s reinstated the long disgraced spoils system in an era when everything is much more difficult and complex.

General and then President Ulysses Grant advocated and signed a merit system for federal employees when he was president in 1871. The federal Civil Service system was finally passed and reestablished under President Chester Arthur in 1883. It was designed to make sure that we have people competent to the tasks in front of them.

Trump is not a doctor or a scientific researcher. The medicine and science of protecting us from disease are the jobs of experts at the Center for Disease Control. As we would not ask our neighbor to diagnose and cure appendicitis or cancer, so we should have and listen to the experts at the CDC. But Trump muzzled and contradicted its experts, drastically cut CDC funding by three-quarters of a billion dollars, cut programs designed to prevent epidemics, and eliminated an office designed to deal with global pandemics, only to discover that we are in the middle of an emergency and try to restore some of the money when it’s already too late.

Unfortunately his handling of the coronavirus epidemic is evidence of Trump’s incompetence. It is also a disaster. Lots of people will die. Some people may think they are wealthy and immune and may survive. But as John Donne told us:

No man is an island entire of itself …

any man’s death diminishes me,

because I am involved in mankind.

And therefore never send to know for whom

the bell tolls; it tolls for thee.

Minimum wage workers with minimal or no health insurance won’t get adequate medical care in time to protect the community. But their illness diminishes all of us. They are our food service workers; staff our groceries and drug stores; care for our parents in nursing homes and take care of our children in schools and day care; and do many of the other chores we daily depend on. In an epidemic everyone matters but who will take care of them? It horrified many of us that Trump ignored the hurricane damage to Puerto Rico. But there aren’t 1,000 miles of water between people infected with corona virus and the rest of us.

Neither Trump nor anyone else should be allowed to cut the budgets and eliminate the people who protect our health, try to blame them and their departments for failing to protect us, and then try to show how devoted they are to us by rushing to add dollars back after trouble has already broken out. It’s too late, too foolish, too demoralizing and too sickening. The time, damage and lives lost to incompetence cannot be restored.

— This commentary was scheduled for broadcast by WAMC Northeast Report, on March 10, 2020.


A House Divided Cannot Stand

March 3, 2020

Trump’s base thinks they can make America great by kicking out people they don’t like, people with different heritage, faith or color. Yet the evidence is that there are more and better jobs available in communities with more recent immigrants. A larger economy creates jobs and opportunities. It needs more goods and services. By contrast the effort to get rid of people is what economists call a deadweight loss. Deadweight because it is costly but produces nothing. We accomplish more working together than working against each other.

America’s great accomplishments have all come from making it easier to work together. Even before the Constitution, the states gave each other’s citizens all the “privileges and immunities” they gave their own. Sadly, they left most African-Americans in slavery, but they created a common economy to take advantage of America’s size and scale. The Constitution tightened and enlarged those promises. A single economy gave us the resources to do what a great nation must do and do well.

Before we could adopt what were called internal improvements like roads and canals, we had to learn that jealousy beggars us all. Projects wouldn’t pass without spreading the benefits to the vast majority of us. The Washington Administration designed the first American financial system. The Jefferson Administration purchased the Louisiana territory from the French and built what they called “the national road,” connecting the seaboard with the Ohio River valley. Steps like that laid the foundation for America to connect the oceans and stave off the European powers that still kept land and garrisons to our north, west and south.

The Civil War threatened everything but for the fact that Lincoln kept the British from intervening on behalf of Confederate cotton, and he kept the Union together.

American power solidified after the Civil War made ours one country, ended slavery, and Lincoln signed, in 1862 alone, the transcontinental Railroad Act, the Homestead Act and the act that built the great land grant universities, which together laid the agricultural, commercial, industrial and intellectual basis for America as the dominant twentieth century power.

We can’t have a great nation by fighting among ourselves. We can’t maintain national infrastructure by jealously keeping others from the benefits. We can’t maintain a great educational system by fighting over whom to keep out. We can’t continue to grow and prosper by jealously excluding each other from important national institutions. As Lincoln told us, “A house divided cannot stand.”

Armed ethnic, religious and racial animosities threaten American power and success. We’re all threatened by domestic terrorists who target people because of the color of their skin, the words and language they use to pray, or where they came from.

America’s strength has always been Americans’ ability to work together. Our major institutions understood the importance of cross-cultural cooperation. The U.S. Army worked to unify soldiers with different heritage, faith or color and who spoke different languages so that all could work as a team. Corporations unified their workforces, capped with ceremonies in which new Americans stepped out of what were labeled melting pots. Major sports leagues learned to take advantage of talent regardless of where it came from. Schools taught each new wave of Americans about democracy and gave them the skills to participate in our government and our economy.

It’s time that all Americans get with the program for the greater good of all of us – including any orange-Americans.

—This commentary was scheduled for broadcast on WAMC Northeast Report, March 3, 2020.

 

 


The “Nanny” State

February 23, 2020

Republicans complain endlessly about “The ‘Nanny’ State”. Do anything good for the people – that’s “The ‘Nanny’ State.” Can’t we do anything for ourselves? What happened to self-reliance?

Actually self-reliance doesn’t work by itself. We call it self-reliance when young people put themselves through college, but jobs have to be available and pay enough for young people to put themselves through. The college has to be there, affordable, with the support needed to to provide great educations. I remember hearing Marty Silverman, one of Albany Law’s major benefactors, describe putting himself through law school on the profits of a small gas station. That says a great deal about the relative cost of a law school education. I started law school in 1962 with a full $1600 scholarship. In today’s dollars it would have been about $14,000. Try that now. My father, by the way, was a high school teacher; mother had just died.

Based on his appreciation of knowledge workers, Peter Drucker, a leading business mind of the twentieth century, saw that our leading industries are where our best and brightest graduates had gone twenty-year earlier. Those graduates created the strength of the industries they entered.

The US built the world’s envy of an education system – everyone wants to study here – though, ironically, we are now letting that educational system atrophy. Power and economic success followed the creation of our educational system. When Kermit Hall was President of the University at Albany he addressed a breakfast crowd downtown at Whiteman, Osterman and Hanna. There were two messages he wanted to get across. One was that he had been to China and studied their university system. He wanted us to know that they were building great new universities with prodigious speed and scale. The other was that corporations that are based on technology, intellectual-property or other special skills locate where they can get the best and brightest to work for them.

That has nothing to do with a nanny state. It is about making excellent investments in workforce development. The same is true of the success of the rest of the so-called Brick countries – Brazil, Russia, India and China; and the Asian Tigers – Hong Kong, Singapore, South Korea, and Taiwan. The newer so-called Mint countries – Mexico, Indonesia, Nigeria, and Turkey – are trying the same strategy, though international politics and civil wars hold some of them back.

By contrast, Republicans continue to feed us outmoded thinking, outmoded economics, outmoded ideas about how to strengthen our communities, our industries, our education and our people. They deserve an F.

Deriding the nanny state for investing in its people isn’t even efficient in the short run, forcing business to compete for staff on the world market and outsource their work to places where it can be done by the world’s best and brightest. That, by the way, used to be us. And it could be again. But it’s not magic. It’s based on investments in people, not handouts to corporations. Give people what they need to succeed and the values we inculcate into them will have a chance to shine. Deny them the basics and whistle our future into the wind.

—This commentary was scheduled for broadcast on WAMC Northeast Report, February 25, 2020.


Too Liberal?

February 10, 2020

People claim Elizabeth and Bernie are too liberal, that their projects would beggar the country, so we can’t select them.

There must be something wrong with programs that have existed in Europe for decades. There must be something wrong and beyond our resources, with liberal programs, even though many corporate leaders support them.

Health care? The money is obviously there. People have been buying insurance forever. Employers have been paying for it for decades. And what they wouldn’t buy, the public has been paying for through emergency rooms. Let me explain the real difference. If employers pay their share through the tax system, they won’t have to worry about so-called employee benefits every time they hire someone. Even though corporations would pay about the same, the shift from a payroll expense to a public program would take the cost out of the calculus whenever business thinks about hiring someone. Or thinks about giving people a real job instead of a gig. Public programs help the economy flow. Many corporations understand that. Competition can be built in with a public option, for example. And small business would function much more easily. But false conservatives, playing on the fears of the public, don’t want to admit that they’re behind the logical eight ball.

Business could rarely get going if they had to build their own physical and social services. In fact business always wants the public to give them whatever they need. They don’t even want to build ballparks on their own dimes! But if they had to find and get water to their businesses and workers, or build their own electrical systems off the grid, or cut and pave their own roads, it would cost more and few could get started. They’d be stuck next to waterfalls like the old mills. But that’s what the fear mongers call socialism. And if they had to build all the physical and social infrastructure they need, they’d spend as little as possible and sacrifice the health of their employees. I’m not making that up – it’s the history of company towns that virtually enslaved employees, paying them in what was called company scrip. Complain and you lost your job, your home, and went into the world penniless, homeless and likely without your family as well.

Social investments protect our jobs and our freedom. Americans who know their history know that’s the world that President Franklin Roosevelt rescued us from with the New Deal by the end of the great depression. Some rich folk hated him for it because it gave most of us a chance at decent lives instead of slavery to corporate masters. Now that corporations are finding ways to take it back through the gig economy, outsourcing and union busting, we need to recreate the New Deal that gave us Social Security, unemployment insurance, the right to organize and that eventually led to Medicare. Far from being unsustainable, Americans had their best years since Roosevelt and the New Deal. And corporations too know that they can live with it because public programs give them the flexibility they want to add employees without the added expense of so-called benefits.

Too liberal? Don’t make me laugh through my tears at the ruin of the American worker.

— This commentary is scheduled for broadcast by WAMC Northeast Report, on February 11, 2020.


Cry the Beloved Country

January 21, 2020

ALL our office-holders have sworn to protect and defend our country and our Constitution. Some of us fought and died for it. We’ve argued about the meaning of the Constitution because we cared what it meant for America. We’ve fought over amendments to the Constitution to make it better but also to preserve the strengths of our heritage.

Now we’re struggling over impeachment. When the House considered impeaching Nixon, I feared that impeachment should not be tried unless it would succeed because of the president’s many powers. Impeachment can unleash the worst of America.

We now have witness intimidation. Trump has fired people who were investigating possible wrongdoing. He threatened with jail the man whose investigation of Hillary put Trump in power, because Comey dared investigate Russia too. Trump demands exposure and prosecution of the whistle-blower whose report had already been corroborated. An American ambassador was recalled and told to board the first plane home because of fears that she would be assassinated in circumstances suggesting the threat was from the Administration. No “deep state” compares to him!

This man is dangerous – to critics, to justice and to America itself. That’s why our laws protect the anonymity of whistle-blowers. That’s why Trump can’t stand an anonymous whistle-blower who’s been corroborated. He can’t threaten him or her without identifying who it is. But he can threaten and scare everyone else – the first and indispensable step of dictators. This man is an imposter – he is not an American.

Republicans object that the people should determine Trump’s tenure as if impeachment were unconstitutional, though the Constitution provides for impeachment and the underlying issue is whether we can trust an election while Trump is in office blocking efforts to protect the security of our elections and cuddling up to Russians who want him in power for their, not our, purposes.

Yes, impeachment is about “high crimes and misdemeanors” but cheating the country is also a high crime and misdemeanor. I want to replace Trump with people who have actually spent their lives and careers figuring out who took the American dream out of so many households; people who are trying to put the dream back where it belongs, into the homes of all the good people of America, not into the bloated assets of the people who have the wealth and power to rip every last penny out of our lives and push so many of us onto the tightrope, so accurately described by Nicholas Kristof and Sheryl WuDunn, and over the edge into what we now describe as “deaths of despair”. Trump is devoted only to the rich, the only people who can be useful to him. He must have read the Dictator’s Handbook; he’s doing everything the authors identified to retain power. It won’t be part of the trial but that disloyalty to the people is a very high crime.

Alan Paton, a South African, published Cry the Beloved Country in 1948 at the height of the struggle over apartheid. Indeed, cry our beloved country and our beloved Constitution. I pray that Americans will come to appreciate how badly Trump is cheating them and how devoted to them are some of the people who are trying with all their might to get him out of office – before it’s too late.

— This commentary was scheduled for broadcast on WAMC Northeast Report, January 21, 2020.


Globalization and Democracy

August 27, 2019

Amy Chua wrote World on Fire two decades ago, arguing that globalism and democracy would collide by bringing out ethnic and religious resentments around the globe. She identified animosities country by country that would explode when times got tough.

Many of us connected economic and democratic health. In hard times people look for scapegoats and blame each other. I’ve gotten jobs from and lost them to people of other races and genders. That’s normal and goes both ways but I did fine and don’t need to blame anyone. Many who don’t feel as well are looking for reasons.

Chua’s analysis isn’t destiny. Unions in Hawaii realized workers would do better if they were united. Hawaii developed a lovely multi-cultural society as a result. But Yugoslavia came apart in rough times. I fear the European Union and the United States can come apart if we engage in an orgy of blame.

Franklin Roosevelt focused on creating jobs in the 1930s and World War II finally pulled us out of the Great Depression. John Maynard Keynes explained that, when an economy is in the doldrums, spending and investment, by government, industry or consumers, pulls the economy out most effectively. Democrats have worked with his ideas ever since and the overall, national, economy has done well with Democrats in power, particularly when Democrats had a strong labor union base focused on workers.

But capitalism is built on creative destruction. Miners’ desires notwithstanding, other industries have been replacing coal for most of the twentieth century because coal dust and soot blanketed cities, killed plants and got into people’s lungs. The process accelerated recently as more sources of heat and power became available. It’s a benefit that capitalism allows shifts like that but also a problem that capitalism makes workers pay the greatest price for such change. Macroeconomic, Keynesian thinking helps but it doesn’t solve the harms to specific groups of workers who’ve lost out through no fault of their own. More is needed.

Republicans view the economy differently, particularly since Ronald Reagan became President, focusing on supply side economics which stresses putting more resources in the hands of companies, entrepreneurs or so-called job creators. Unfortunately, supply side economics leads Republicans to ignore what business does with money, hoping that enough will be used to create jobs at home. But business also uses their money to outsource to foreign countries, buy stock back, build monopolies and the like, which don’t help American workers. Business helps American workers when they find demand for what American workers produce. That’s not automatic.

So supply side economics leads Republicans away from strategies that would actually help workers and aggravates hard economic times that tend to push workers to fight among themselves for the available jobs. Under most conditions, supply-side economics is a smokescreen for policies that make things worse. Staying away from anything related to supply-side economics is much better for workers, brotherhood and labor unity. But the alternative Keynesian economics isn’t enough.  There is a gap with respect to finding work for areas which have lost their main industries.

To save our democracy, it’s crucial to get across what actually will help American workers and what won’t. That’s why the argument over government projects, like rebuilding infrastructure, is so important.


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