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 March in Albany

January 25, 2017

This weekend was busy. The New York Civil Liberties Union, the National Lawyers Guild and others trained people in nonviolence and to serve as observers for the Women’s March on Washington, including a couple of training sessions at Albany Law.

Saturday I joined the Inaugurate Resistance March here in Albany. People joined the crowd from every direction, walking toward the planned start of the march. With so many people it was long before I saw anyone I knew. State Senator Neil Breslin commented to me that a march of this size had never happened in Albany. The only numbers I’ve heard seemed much too conservative – this was really big.

I saw speakers and marchers from women’s groups, Citizen Action, Upper Hudson Planned Parenthood, the Coalition Against Islamophobia, labor unions, religious leaders, community service groups, gay rights groups, and many others.

Eventually I ran into friends who’d served in the Peace Corps, or been mainstays of activism in this area. I got close enough to the rear of the platform to see the back of speakers’ heads.

A common theme was solidarity across all the causes we each primarily work on. United we stand and can protect each other. Divided we fall; we’re all vulnerable separately. All for one and one for all.

When John Dunne wrote the immortal lines, “Ask not for whom the bell tolls, it tolls for thee,” he wasn’t whistling dixie. Our welfare is bound to each others’:

  • Slavery to northern workers was both morally indefensible and a threat to their own livelihoods.
  • Sweatshops bring down everyone’s paychecks and safety.
  • Minimum wages affect everybody’s wages. It’s about whether some people can take advantage of other people, and us.
  • Abuse of women threatens our families and our children – do I have to count the ways?
  • Abuse of any of us – racial minorities, immigrants, gays, lesbians and the trans-gendered, any of us – threatens all of us.

Treating people like trash threatens us all – by example, not to mention their business, their support for us, and the damage to all of us of making some people desperate – desperate for jobs at any price, desperate for food, clothing and shelter for themselves and their families, at any price. Desperation threatens everything and everyone.

The folks at the Inaugurate Resistance March got it. We celebrated our inter-dependence and we cared about each other. I like to quote the ancient Rabbi Hillel who asked the people, “If I am only for myself, who am I?” In that crowd I enjoyed the reaffirmation of our mutual concern. Need I point out for the doubters that a major reason for our country’s success was our ability to work with each other – it matters that we see each others’ humanity, brotherhood and sisterhood.

But that cannot be enough to deal with the blowhard in Chief. The Tea Party’s example was its organizing. Their targets were primaries to take over the Republican party and publicity to take over the public agenda. Obviously it worked. And it will work for liberals too.

It must. Obama’s election was a major step toward a just, decent world. The blowhard-in-Chief is poised to take the brotherhood of mankind apart. It’s our job to make that fail, never to be resurrected, and drive its proponents out of American politics. It’s our job to keep in touch, stay united, publicly push for a decent America until the racist blowhards are sobbing in their caves. We’re the majority and we’ll make OUR muscle felt.

— This commentary was broadcast on WAMC Northeast Report, January 24, 2017.


Capital Gains Tax Rates Hollow the Economy

February 28, 2012

Let’s look at tax law. Remember Romney’s tax returns. His average tax was approximately 15%. That’s the rate for capital gains. But for anything else earned above roughly $400,000 the rate is 35%. I’d love to reach that rate, to earn enough to pay 35% on some little fraction of my income. Alas, I don’t. 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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