The Economy and Those Left Behind

March 15, 2018

President Obama brought the economy back since the 2008 crash, and it grows steadily. But the rising tide didn’t lift all boats. Places like West Virginia, heavily dependent on coal mining, were left behind. I’ve taught there, knew coal mining families, shared a hospital room with one and a lovely boy in elementary school who obviously had very good taste took a shine to our daughter. I have very warm feelings about the state and am quite sympathetic.

But everything moves on. Since we lived there, coal has been reeling from competition with new forms of energy, competition from China, conversions from coal fired furnaces, and competing objectives that couldn’t be wished away, like cleaner air. China sells coal rather than burn it. So there’s little left for coal other than pandering to people with impossible dreams about irreversible changes.

Steel has become very specialized. We still produce but not all needed varieties. And production is much more automated, needing fewer, and different workers from the historical steelworker. Some steel producing communities, like Pittsburgh and Cleveland, have revived. But many capable people haven’t found comparable work in new and different industries.

They deserve consideration. Capitalism throws people away in the name of progress like so much garbage when their jobs disappear. People talk about risk as if it’s what entrepreneurs have. Actually, capitalism puts as much risk on workers, consumers and home buyers as legally possible, on those who had no responsibility for corporate failures, or the catastrophe of 2008, while it protects the financiers and CEOs. People we sometimes call average Americans or little people (regardless of their physical size) take it on the chin so that we can protect the people with the money, lawyers and control to protect themselves. American workers deserve our support.

But how? Many ideas are capable of relieving some of the distress but few will solve the problem. Trump’s tariffs on steel and aluminum will make former factory families feel taken care of. But as many economists have been pointing out, tariffs can do a lot of harm.

Education and retraining help some but it’s particularly hard for older workers to take advantage of the opportunities, often in distant places. Internet access connects some workers to distant jobs. Efforts to bring jobs to people are often based on wishful thinking – the casinos already seem to be turning into boondoggles. Some people come home for weekends from distant jobs but that’s hard to scale up without much better mass transit. Government sometimes puts programs or office buildings where they will strengthen the local economy like New York did some years ago in Harlem. Meanwhile infrastructure remains talked about and unfunded.

There are ways we can help share the wealth and should. We have to expect some good ideas to fail and some bad ones to succeed. I suspect that Trump’s tariffs will sound much better to the unemployed than what they will produce, and I think there are better solutions that a sympathetic government could develop. But yes, we should be helping.

— This commentary was broadcast on WAMC Northeast Report, March 13, 2018.

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Freedom for the Boss; Drudgery for the Rest of Us

May 16, 2017

I keep looking for ways to talk with supporters of the Administration. President Carter started the deregulation frenzy. That has become half of the Republican cut-and-deregulate refrain ever since, consistently repeated by the current White House and the Republicans in Congress. I’d like to focus on the things that will affect those of us who are, financially speaking, ordinary, middle-class Americans.

Here are changes the Administration and congressional Republicans are considering that affect working conditions:

  • The White House Office of Information and Regulatory Affairs has been postponing and considering cutting down a Labor Department rule that limits “workers’ exposure [to] toxic material, which can cause a deadly lung disease.”
  • The same White House Office is also “considering a proposal to roll back protections for workers in construction and shipbuilding.”
    • Those rules allow our employers to save cash by risking our health.
  • The Working Families Flexibility Act … would give employees a choice between taking time off or being paid time-and-a-half when they work more than 40 hours in a week.”
  • Either way, Republicans oppose changing overtime rules to raise eligibility for overtime above the current $23,660 per year.
    • Those rules allow our employers to save cash by shortchanging us.

Here are some that affect the health of financially ordinary Americans:

  • The Administraton has already taken steps to “roll back healthy school lunch standards”
  • The new head of the FDA “has invested in or consulted for dozens of healthcare companies” which suggests that the Food and Drug Administration won’t be much help in preventing unnecessary complications and expenses.
  • The House health care bill would eliminate Obamacare requirements that insurance plans cover prescriptions drugs and mental healthcare. Like all insurance, drug and mental health care coverage are intended to protect people from unplanned changes in the costs of survival.
  • Senate Republicans narrowly lost an effort to roll back a regulation that “limit[s] methane emissions from oil and natural gas drilling.” Methane is even more damaging to the climate than carbon.
    • Those rules risk our health for the sake of other people’s profits.

On savings for retirement:

  • “Trump’s Labor Department delayed the so-called fiduciary rule, ordering financial advisers to act in … [your] best interest[s] … [if you] are saving for retirement.”
  • The CHOICE Act would allow the banks that brought us the crash of 2008 to opt out of regulations adopted after the crash and intended to prevent another. And the bill renames the Consumer Financial Protection Bureau and “reduces its power to enforce pre-existing consumer protection laws.”
    • Those rules risk our financial security for the sake of other people’s profits.

Meanwhile, Republicans on the Supreme Court show little respect for working men and women.

  • With Breyer’s help they have blessed “Professional debt collectors … [who] built a business out of buying stale debt, filing claims in bankruptcy proceedings to collect it, and hoping that no one notices that the debt is too old to be enforced by the courts.”
  • The Court continues to apply a 1925 statute intended for interstate business transactions to consumer contracts and the Court bars state regulation entirely.

What Republicans continue to give us is freedom for the boss and drudgery for the rest of us. As the old folk song has it, “same song, second verse, could get better but it’s gonna get worse.”

— This commentary was broadcast on WAMC Northeast Report, May 16, 2017.


The Future of Jobs

April 18, 2017

Automation is changing the workforce. It creates some highly skilled jobs but eliminates many others, from service jobs like taxis to previously professional tasks like document review. Factory jobs are decimated by automation.

The industrial revolution was largely built on repetitive factory production lines, based on physical dexterity, repetition and obedience, not higher education. Automation handles repetitive tasks well. Eliminating them affects people very unequally.

How can we deal with that change? The historic Republican free-market approach, now pushed by Tea Party Republicans who control Congress, is that it’s none of our business.  For them, it’s every man, woman and child for him- or herself. Millions in breaks for big corporations and no security for the workers whose lives and livelihoods are the playthings of  markets, financial institutions and corporate interests. But woe to countries that forget their people, engulfed in power struggles and bloody civil wars with the fate of ordinary, hard-working and decent people as talking points and engines of recruitment.

Some jobs have been divided into a large class of “aids.” In Iran everyone from middle class up had a bagi, their term for servant. It’s a world of dependency, power, and deep social division, a world in which people can be taken advantage of. The market, so sacred to the ideologues, is pushing more and more people to join the service economy as maids, waiters, servants and sometimes as sex workers.  Notice the contrary pressures on the women’s movement, with some vying for the few high-end jobs and others being pressured into demeaning and dangerous activity.

We might share good jobs. Labor unions once looked toward a five-hour day. Or we might create jobs, keeping everyone busy and satisfying more of the community’s needs, from building and repairing bridges, roads, water systems and electric and internet grids, to watching over playgrounds. But actually we’re going the other way. Jobs that can create opportunities are being dropped. The pressures are all on workers to find or create ways to survive. We all feel the taxes but don’t notice the benefits.

I see our separation by wealth, color and origin blinding us to common problems. John Adrian Witt, a Yale historian speaking at Alumni House last week, sees organizational failure, like the 1920s before unions and public service organizations finally jelled, leading toward the New Deal reforms in the 1930s.

The New Deal gave us a powerful administrative state, capable of opposing and controlling corporate greed that demeaned and poisoned workers with dangerous equipment, noxious chemicals and contaminated foods. But that effective administrative state became the Republican target, stated theoretically as “regulation” – regulation everyone can be against unless broken down to the safety and honesty it is designed to protect.

There is also an ideological issue, especially when the unchecked power of the market is pushing the public to turn on each other and itself.

Workers are entitled to security. Graduates of high school, colleges, and universities are entitled to good jobs. Our job should not be to ask workers to justify their lives to the market; it should be to employ people to make a better America, much as the New Deal of Franklin Roosevelt founded the Civilian Conservation Corps, the Works Progress Administration and many others. We can support each other, and make a better America for all of us. The market isn’t the answer; the market is the problem. When it doesn’t do what we need, we need to do what it screwed up.

— This commentary was broadcast on WAMC Northeast Report, April 18, 2017.


Investing in the Environment

February 21, 2017

The White House isn’t explaining government’s environmental options.

The environment is the crux of emerging industry. It doesn’t just enable us to breathe better and protect our children’s lives. It is a growing industry which America could dominate if we tried. It is and will be crucial to housing materials, and protecting existing investments of all kinds. Places and countries that don’t protect their environments will not attract entrepreneurs, workers or investments. Their infrastructure will clog along with people’s lungs.

And as it becomes cheaper solar and wind make other industries possible – sun and wind don’t charge by the hour. Falling behind in environmental infrastructure means disaster, abandoned communities if they don’t first fall into the sea.

As simple a gesture as writing land-planning rules so that new construction has the best orientation to the sun cuts expenses forever. Supporting science, instead of taking scientific findings off government websites, will lead to other helpful steps America could take. Plus everything we do for the environment will depend on putting people to work to get it done.

Yes I know, there are shifts in world temperatures that are not man made. New York was once covered with a huge sheet of ice. Nevertheless, we also know, independently, that carbon and methane are driving global warming. Even if natural processes affect the temperature of our world, mankind is making it much worse. We could take action to bring that down unless we put our heads firmly in the sand. Fighting to minimize climate change is good for the economy. Losing that fight isn’t. It means rescuing people, pulling them away from the coasts, crowding them into smaller less productive areas. More than that, it means that many of the places we live will become uninhabitable. Only the mortuaries will do well.

I once chatted with an engineer about the effects of climate change. I knew that his house is in New York City, only 8 feet above sea level and not far from the coast. So I suggested he move to higher ground. He responded that if the sea rose 8 feet, New York City would be unlivable. The infrastructure of the city wouldn’t work. Roads and streets would be submerged or collapse. It wouldn’t be worth staying even on higher ground. So I suggested moving up here – the Hudson may be at sea level but most of us are much higher than that. His response was chilling but one would be a fool to assume he was wrong. He said that none of us would be safe if 8 million New Yorkers, or more from the metropolitan area or the East Coast, became refugees. Wow. His point is that if large numbers of us become desperate, and remember that most Americans live near the coasts, then all bets are off.

Remember the resistance in Congress to repairing the damage from Sandy. That doesn’t even compare to the costs of a rising sea.

So fighting climate change is good for jobs, protects us from economic collapse, and gives our children and grandchildren something to live for. That’s a heck of a worthwhile investment, and a collective, patriotic goal.

— This commentary was broadcast on WAMC Northeast Report, Feb. 21, 2017.


Labor Economics

February 14, 2017

The White House isn’t explaining what’s happening to jobs. I once taught labor economics, an issue close to my heart. To some extent, labor is like any other commodity and that’s the problem. Jobs go wherever business can find all the things it needs – the land, transportation, materials, markets, reliable legal relations, at the right prices. And it keeps changing.

We talk about the rust belt as if we did something wrong. Actually we had about a century-long run on the best factory jobs in the country – a ribbon through this state after New York’s government built the Erie Canal and made New York City gateway to the west, turning every city along the Hudson, Mohawk, Erie Canal, and then the great Grand Central Railway into a powerhouse. This area long dominated clothing, technology, science, heavy industry and spawned radio and television networks. Each industry provided resources for newer ones.

But New York’s advantages couldn’t be permanent. For bigger plants with newer methods, business looked for virgin land. Other governments built ports, the Interstates and St. Lawrence Canal, while the aging infrastructure of older cities led firms elsewhere. It couldn’t be permanent. Economic fundamentals inevitably dominate jawboning and presidential rhetoric.

Workers get cast aside unceremoniously. One of my law students was also a human resources specialist at GE, missing class whenever GE announced layoffs. They had long since let the weakest workers go. Now she had to fire the best and it hurt. But big corporations aren’t sentimental.

What’s a city or region supposed to do? The market doesn’t automatically find the next big thing and put it where former employees can get jobs like those they lost. The market didn’t build America automatically. Government changed British rules. Government built a banking system with resources to fund business, and smooth their cash flow – if you read or saw Hamilton, that’s what he was about, government providing what companies couldn’t. Government built ports, canals, highways, and had the railroads built. Government provided public health facilities, water, sanitation, disease control – which became crucial for business. Government invested in schools, and President Lincoln laid the foundation for the modern state university system. President Wilson sparked the country’s first broadcasting system for the war effort. Almost everything in your hands today has government fingerprints on it – the research and development in fundamental physics that led to the lasers, transistors and chips that run almost everything today.

Yes, governments make mistakes. You think private industry doesn’t? Most businesses fail. But only government can provide the fundamentals, the things that all the businesses in the country, region or route need. Only governments are motivated to look beyond individual companies and work for the region.

Governments have been investing in new forms of power. If governments in coal producing states had the sense to invest in emerging industries instead of dying ones, the coal miners might face a much better transition to good jobs than anything presidential jawboning can produce. But government cannot do it if it is afraid to fail.

Governments need to be thinking about what the emerging industries are, what resources will support growth. Not individual businesses that any group of investors could build on their own, but the underlying fundamentals that make broad development possible. And we may only know which ideas work when we try them.

If government thinks small, we all shrink.

— This commentary was broadcast on WAMC Northeast Report, February 14, 2017.


The Legacy of Barack Obama

January 3, 2017

Barack Obama has been one of our most decent and intelligent presidents. I’ll miss him. Instead of simplification and slogans, Obama explained the complexities of everything from medical treatment to foreign policy. Instead of shooting from the hip, he studied problems carefully and reached mature, intelligent decisions.

But what will stick?

Starting with foreign affairs, Obama got most of the boots off Muslim lands. When Obama took office in 2008 we had close to 200,000 soldiers in Iraq and Afghanistan. Now we have about 15,000 troops, combined, there and in Syria.

ISIS seems to have refocused on Europe but that’s still a problem for us. Europeans’ objectives are compatible with our own, so they are crucial allies, unlike the Russians. But Europe confronts many times more refugees than we do, with backlash and threats to democracy in several countries. American action in Syria added to the refugee flow, but much resulted from revolutions independent of us. More American militarization in the Arab world would inflame the refugee crisis and increase the terrorism directed at us.

Terrorists are fueled by militarization; nations are much more vulnerable to our military – that’s the difference between defeating Saddam Hussein, having him executed and trying to remain there. Trump may talk tough, but will he be fool enough to wade back into those trouble waters?

In Guantanamo, fewer than 60 prisoners remain of the nearly 800 who were imprisoned there.

Republicans dislike the Iran nuclear deal but so far they’ve nothing to show for their fears. Objections from the other signatories may prevent Trump from disavowing it. This may be the first real test of whether Trump has any grip on reality.

At home, Republicans have been yelling for years that they will tear Obamacare down the first chance they get. But their friends in the insurance industry will howl if they do, especially if Republicans leave features Americans like – a guarantee that you can get insurance, coverage for pre-existing conditions, tax credits for small businesses, etc. So it’s not clear what they’ll actually do. Obama took his health care plan from Mitt Romney’s Republican plan. I can think of improvements to the left of Obamacare, but not any that are more consistent with Republican free-market philosophy. Republicans are in a pickle.

Obama got a small stimulus soon after taking office. Terrified it might actually work, Republicans fought to keep it small. Obama’s stimulus worked, slowly, satisfying the cynicism of Congressional Republicans willing to hurt the country in order to make Obama look bad.

Dodd-Frank financial regulation still stands, reigning in a financial system that gambled with everyone else’s money and made a large number of us much worse off.

Obama nominated Sonia Sotomayor and Elena Kagan to the Supreme Court. One has become the conscience of the Court, the other quieter and more conciliatory. Together, they’ve made a the Court much more fair. The future depends on how long Ginsburg lives and how long Trump is in office. The difference Ginsburg, Breyer, Sotomayor and Kagan made could disappear in a heartbeat.

So, there’s a lot to celebrate in what Obama did or tried to accomplish. But I have real fears of what could be done in the effort to discredit him instead of making things better for the people of America.

— This commentary was broadcast on WAMC Northeast Report, January 3, 2017.


People bear the cost for rulers’ misbehavior

March 29, 2016

In a still unpublished manuscript on the way conservative economics has failed us, my friend Eric Zuesse remarked, “The ‘Greek debt’ is really not a debt of the Greek people.” He goes on to identify the “institutional creditors  … Euro-banks … high risk kleptocrats, oligarchs and bankers who siphoned most of the euros into overseas Swiss accounts …. [and other foreign investments] devoid of any capacity to generate income to pay back the debt.”

Eric’s statement is profound, pointing to the ways that those in power play with our lives and then displace the responsibility to their innocent victims. While I’m sure that some will argue that elections gave the Greek people some complicity, Eric accurately points to the ability of those primarily responsible to displace the costs of their own misbehavior.

I think we can see that pattern all over modern public affairs. What responsibility did the refugees in Syria or Iraq have for the wars that took their lives, homes and livelihoods? What responsibility did unemployed Americans have for the depression that was engineered by banks too big to fail, banks which traded worthless securities in an enormous Ponzi scheme for which they have not been prosecuted? The Supreme Court has cleared the manufacturers of failed medical devices for rupturing in our bodies but why is it somehow the responsibility of the victims to absorb the injuries and the costs? This is a pattern – the rich and powerful do the damage and outsource the costs to the rest of us.

Terrorists take advantage of that. They attacked the World Trade Center and the Pentagon on 9/11. But the people of Afghanistan, Iraq and the Middle East have paid the price of our response, innocent men, women and children, polarizing regions and sweeping us into the worldwind. Our failure to calibrate the response had much wider repercussions.

The British, French, Germans and Spanish have suffered similar terrorist attacks, actually over many decades from many different groups, but they have managed to restrain their responses. England fought in the so-called “troubles” of Northern Ireland but finally learned that their response was devastating the wrong people and making the problem worse. The Spanish restrained their response to the Basques. All restrained their response to leftist terror. They responded with police work, ultimately capturing and trying many of the terrorists.

For many Americans anything but an all-out response seems unacceptable. Politicians attack restraint as weakness, not strength. And of course ordinary Americans pay the price. We pay it in the deficit, in taxes, in the lives of our loved ones in foreign wars, and in civil liberties at home. But those who benefit are immune. Major suppliers of paramilitary forces abroad like Blackwater and Halliburton get more contracts while they supply deniability to American leadership for their violations of human rights.

These are bad bargains. Will we have leadership capable of leading, capable of explaining to the American people and standing strong in the face of hotheads for whom an indiscriminate overreaction is the only so-called “manly” response. Will we have leadership capable of zeroing in on the perpetrators of economic collapse, mortgage failure, and malfunctioning products?

Isn’t it time to stop blaming the people for the misbehavior of the oligarchs? Or will the rulers, paraphrasing Thomas Hardy’s conclusion to Tess of the d’Urbervilles, end their sport with us?

— This commentary was broadcast on WAMC Northeast Report, March 29, 2016.


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