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.


The Challenges

January 10, 2017

Looking at the New Year, there are two existential challenges that must be dealt with: global climate change and the threat to American democracy.

Global climate change has to be at the top of the agenda because scientists are telling us we are crossing tipping points. What is a tipping point? It is the point where the damage already done makes the process go out of control. You can’t stop a bomb once it starts – the explosion takes over. And tipping points are being crossed. As arctic ice melts, it’s not just that the earth got warmer already, it’s that the highly reflective ice was reflecting heat back into space and isn’t there to do that any more so without humans doing anything more, global warming speeds up. That’s a tipping point. Other tipping points are in the oceans and the food chain. Climate change threatens real doom, a mass extinction, and the creatures to be extinguished this time are us. So go ahead and throw your grandchildren into the fire and then see if you’re allowed into heaven. Folks, if we send our grandchildren to hell you can be sure that we’ll be right there burning with them.

American democracy is at risk because a foreign power has seen that it is possible to manipulate American elections and an American candidate has seen that it is possible to manipulate the people who are prepared to put weapons in the service of their hatred. And if Trump is half as venal as I think he is, and follows the path of demagogues and dictators, he will bribe members of Congress in order to have his way and to stay in office. Even worse, if he follows the pattern of dictators and demagogues, he will try to distract America with a war. I don’t want to think about the mem, women and children who will lose their lives for the glory of Trump!

We are not in good hands. Americans could be put to work to deal with the environment, build and rebuild our infrastructure, handle real threats to our country and to each other. But to save a few more dollars for the richest among us, people will not be put to work doing the things we need and the richest won’t have to share to take care of our country. That’s kleptocracy folks, it’s precisely the kind of behavior that we expect from Putin and the world’s most bloodthirsty dictators.

No, we are not in good hands because the evil in the Manhattan tower is a greedy grabber of money and power, a denier of global warming, corruption, how the economy works, and the common good.

This is a crisis as serious as World War II – an existential crisis. Will America survive, never mind greatness, if we succumb to a dictator? Will humanity survive, never mind flourish, if global climate change makes refugees and cadavers of us all – and who’ll take in refugees then? What will we do to reign in global warming, protect American democracy, and preserve the country we were blessed with?

Remember ye were strangers in the land of Egypt. We will be strangers – on the planet.

— This commentary was broadcast on WAMC Northeast Report, January 10, 2017.

 


Reactions to the Charlie Hebdo bombings – Was it just about France?

January 13, 2015

In what other country do world leaders march with arms linked against terrorism? Terrorism goes on in every continent but we mourn and gather in Europe. Terrorism happens in Haifa, Jerusalem and the West Bank – in both directions – but we mourn and gather in Europe. Do we stand for a principle or is France the principle – that France cannot be touched? Or that France is in danger? But other places are in danger. For all my criticisms of Israeli reactions, they are in considerable danger as the Palestinians have been able to use Israeli reactions to the devastation caused by their own terrorism to unite much of the world against Israel. Or is there good and bad terrorism? Were the Communists right, that’s it’s all about whose terrorists are freedom fighters?

So does this lead anywhere? Is the world standing together in Paris a prelude to a principle? But where do principles lead? To more pious declarations? Pious declarations can help lead to forms of action. If the free countries of the world really wanted to solve the Israeli-Palestinian conflict, they clearly could put the screws on both sides and make a two-state solution actually happen. It’s too late to just back off and say it’s their fight and take no sides. But death there is just politics, who we stand with, not what we stand against. Letting it go on when that fight could be stopped is all about being able to use the conflict for politics, even though it is clearly spiraling out of control and enveloping us all. The conflict does no one any good except that pious declarations allowed the French to appear as friends of oppressed people without doing anything about it.

Of course we have been misplaying the Middle East for decades. We were hostile to a group of Middle Eastern leaders with real popular support because we didn’t like their domestic policies. So their peoples, or many of them, have been drawing the obvious conclusion – that their fight is international. The West doesn’t help. It just supports extractive industries and kleptocratic leaders while letting the problems of the people of the Middle East fester. Why do we expect to be free of terrorism in the West when we have a policy of supporting strong men who protect American and western business while raping their peoples and otherwise blessing all the nonsense they commit at home?

I find myself continually drawn to Pogo’s remark, “We have met the enemy and they is us.” All over the globe we have fought against peoples and leaders who try to take care of their own people. Leaders who try to provide for their own. We have had a part in displacing liberal leaders in Latin America, Africa and Asia because they really tried to make things better for their countrymen.

We who grandly tell the world about the virtues of self-government, and tell the world that our internal policies are none of their business, because we govern ourselves, do the reverse because we have the muscle.

I was struck by a statement by Chris Giannou on Alternative Radio who remarked that the world, including the Muslim world, “love you for your values. They hate you for your hypocrisy.”

Values are powerful until we compromise them with war, torture and indiscriminate killing as if the peoples of the Middle East are just there for us to play with.

— This commentary was broadcast on WAMC Northeast Report, January 13, 2015.


Romney-Ryan Rickshaws

October 23, 2012

Both candidates say they want to pull us out of the recession and put people back to work – to create jobs. Jobs, jobs, jobs, the election seems to be about jobs.

President Obama is straightforward Read the rest of this entry »


Sources of American Strength

February 21, 2012

Let’s talk about some basics – the sources of American economic power.

  • We were always an immigrant society, peopled with those who had the drive and courage to leave where they were, cross the ocean and begin again with nothing.
  • Initially we were agricultural. One innovation was small, “republican,” landownership by independent farmers. Their efficiency made everything else possible.
  • We were among the leaders in the banking revolution which simplified and facilitated commerce.
  • The transportation revolution began in England but it had an enormous impact on the American economy because of the sheer size of the country.
  • Our system of democratic schooling  – education for all, rich and poor, boys and girls, immigrants and natives – was revolutionary and made us an international leader.
  • England pioneered the scientific revolution. But America took advantage of the land grant colleges, and with the appreciation for learning that came with both the Christian and Jewish communities that relocated here, America became a major source of invention.
  • Americans led the revolution in manufacturing – inventing and perfecting the assembly line.

Now what? Everything we achieved is out there. Read the rest of this entry »


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