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.

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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.


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.


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, https://www.cbo.gov/publication/49440.

Libertarians on and off the Court

December 2, 2014

Most Supreme Court justices are libertarians in some sense. But what kind and for whom varies widely.

We all believe we have rights to decide lots of things for ourselves. But what are the limits? The more “conservative” the justices and others are, the closer to the Tea Party, the only limits they recognize are force and fraud. Various conservative philosophers have been very plain about that. Regulations, almost all regulations, interfere with that freedom of action.

People sign contracts every day that have draconian consequences for them, but, say the far right, you agreed to that. You signed a contract for which the only remedy is a stacked deck, arbitration in front of an arbitrator arranged by the company, and you have no right to unite with other people in the same situation to fight expensive battles together and share the costs – that’s called a class action, and the Court’s conservatives forbid it in arbitration, won’t allow the states to try to protect consumers from such restrictions on their rights. That protects the company’s liberty. And of course you had the liberty not to sign – if you read and understood the contract and had a realistic choice.

You signed a mortgage with a lender and it had all sorts of hidden costs, fees, rates and traps that put a lot of people underwater and helped to build and then break the housing bubble, and with it the economy. But, tough, you signed, say the conservatives.

Most states used to forbid usury, interest rates that no one could reasonably pay but that piled up so quickly bankruptcy was inevitable. Not any more – the Supreme Court made sure states could no longer forbid usury.

And where the conservatives on the Supreme Court couldn’t block federal law, like the antitrust laws which were intended to give us the benefit of competition and protect us from monopoly, they made it impossible to prove.

There are an endless set of examples. The company gets the liberty and you get the shaft.

But when you get the shaft, that doesn’t just affect the liberty that judges and legislatures say you have. Getting the shaft affects your real liberty – liberty to make wholesome life choices for yourselves and your families. Most of us think our liberty is limited by the effect on other people’s liberty. Giving people the shaft deprives people, ourselves and lots of others, of our very real liberty.

Most states tried to limit legal liberty to do things that harm others. There should be no liberty to foul the water we drink or the air we breathe. There should be no liberty to bury costs in fine print legalese, or propose terms that the company knows will do damage. There should be no liberty to put people into unsafe working conditions when the company could have saved their lives, saved people from collapses and explosions in coal mines, oil rigs, and similar disasters. It doesn’t matter that the workers agreed, signed a contract, took the job – the company knew and we should be able to stop it.

We too believe in liberty, but it is liberty bounded by what’s good for everyone. We have a choice between freedom for those who have the money and power to exercise it, or freedom for everyone based on some realism about what’s going to happen.

Do we care? The protectors of corporate legal liberties on the Court have a child’s idea of liberty – without responsibility. Children throwing tantrums at civilization have no place on the Court.

— This commentary was broadcast on WAMC Northeast Report, December 2, 2014.


Tailspins for the Poor

August 5, 2014

George Gershwin wrote “I’ve got plenty of nothing, and nothing’s plenty for me.” But sometimes it seems like politics is about the art of squeezing or taking as much as possible from people who have nothing at all – the villainy of the Sheriff of Nottingham in the Robin Hood story but in modern dress. Read the rest of this entry »


Detroit Bankruptcy

August 29, 2013

The Detroit bankruptcy is likely to mean a big hit for people’s pensions. Think about that: people have worked all their lives and now you tell them the terms just changed, and at precisely the part of their lives when they will find it hard to replace the lost income.

There are two issues involved in the bankruptcy. One is the outrageous fact that wages and pensions are not treated as secured so they take second place to banks and others whose only skin in the game is money, not the sweat of their brows over  lifetimes of work. That’s the legal rule but I’ve never liked it. It creates maximum hardship. Cities and companies go bankrupt for the very reason that they can dishonor their pension obligations. Federal laws require companies to do some things to protect us. But if they don’t do well enough, well, there’s always bankruptcy. That, in my view, is a travesty. Read the rest of this entry »


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