Why law?

February 13, 2018

Governments, including democracies, make laws and rules. Lots of folk spend lots of time telling us we don’t need regulation, or at least we need lots less. Laws and rules are restraints on our freedom to do what we want. And most people are honest. So why do we need law?

Let me tell you about a janitor at Albany Law. John DeMateo was very much beloved. Our gymnasium is named for John. He was always ready to lend a helping hand, often going way out of his way to be helpful. He hired students for the maintenance staff, giving them ways to earn the money they needed to get through their schooling. During breaks, especially the summer break, John used to put out an urn of coffee strictly on the honor system. Put in a quarter and take a cup. No one was watching. What John told me was fascinating. He never had any problem with people helping themselves to free coffee. I’m sure some people must have paid a little later when they got that quarter. But they were honest. However, and this is a big but, every summer someone figured out where he kept the money. It only took one. John still put the urns out but he told me that it barely paid his expenses. The vast majority of us were honest, but one dishonest person changed everything.

Law is for the few people whose unscrupulousness can make life miserable. I’ve heard a Harvard dean claim that a code of professionalism is better than law because scientists will follow it. But if there is any significant profit to be made from being unscrupulous, someone will follow that path too. Business tells us that most businessmen are honest. I’m sure that’s true. But how many unscrupulous business people does it take to make life miserable for the rest of us – especially when the unscrupulous, who cut corners that endanger the rest of us, can brag about how cheap their stuff is. Cheap indeed. And that puts pressure on everyone else. It puts pressure on other businesses, especially when it’s hard to find out who’s doing what. How easy is it for us to know that the workers who make our beloved running shoes are treated well? Or to understand the medical implications of all the stuff that goes into our food. Competition isn’t a level playing field. Many regulations are appreciated by business because they squeeze out the unscrupulous and make it easier to treat customers well and still stay in business. Generic chants about regulation are just sloppy reasoning that hide serious issues.

So when Trump and his cabinet officers tell you they’re going to weaken or eliminate regulations, does that mean everything is going right so we can trust what people are doing? Or does it mean a green light for those who are going to take advantage of non-enforcement to do us harm? Most people want to treat others well, but the few that don’t care will make life difficult for the rest of us. Sloppy language covers serious mistakes.

— This commentary was broadcast on WAMC Northeast Report, Feb. 6, 2018.

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Democracy and Public Investment

January 30, 2018

What democracy can do is obscured by today’s free market, anti-regulatory, anti-government rhetoric. That rhetoric creates real winners and losers, but taking it at its word, it’s based on an everyone-for-him-or-herself form of individualism. It asserts that our successes and failures are almost solely the result of our personal abilities and denies that what we accomplish always rests in part on what society gives us.

That flatly contradicts reality. This country blossomed because we worked together, with a spirit of cooperation. Cooperation that made associations, large businesses and elective government possible.

Everyone-for-him-or-herself-alone ideologues shouldn’t blind us to the public role in development. America’s Founders knew they needed government. As aptly described in the show Hamilton, Alexander Hamilton, Robert Morris and their colleagues understood the importance of a banking system and had government create it. Across the thirteen original states, Founders used government to open transportation to the west. Washington himself was deeply involved in efforts by Virginia and Maryland. When New York, which had a sea level path to the interior, finally built the Erie Canal, it set the path for industrialization and settlement for a century and a half, and made the North into the powerhouse that won the Civil War.

Today we’ve lost a shared sense of the public investments necessary to continued development, and the foundations of American success are falling apart. Bridges take unsuspecting occupants into the rivers and ravines below. Water systems deliver lead, mercury, and an armory of toxins. Sewage systems poison rivers, people and the living things that depend on them. Trains crash for lack of decent equipment. The electronic grid barely carries ordinary loads. The next solar storm can take the electrical and internet grids down, bringing the country to a lengthy stand-still. American colleges and universities have been the envy of the world but stripping their resources will ensure their replacement abroad and with them the R&D that has been central to American leadership. We are the wealthiest of countries but too cheap to fund our infrastructure, terrified that taking care of America would actually put people to work, or that public spirit in building and rebuilding America will help someone else’s business.

The best stimuli for business are investments in the capacity of the public, infrastructure for getting things done, and rules that create a common floor of good behavior. The idea that everything depends on lowering taxes is pure garbage from people who want their winnings the easy way – by taking them away from the people.

Trump promised to put infrastructure in his budget. It’s hard to know whether he’ll keep that promise, whether enough Republicans will follow him, or whether it would include anything more than a wall on the border or brick and mortar repairs. Public investment could make infrastructure better and more resilient, as so dearly needed in Puerto Rico and on the coasts. Public investment could go well beyond controversial minimum wage laws by offering decent, useful, jobs at livable wages. Public programs could improve the private market by creating a model to compete with, like the public health care option that Obama tried to get.

Madison, Hamilton and their contemporaries had a much more patriotic and mature understanding of what American progress depended on – the people, the whole people, not just a few plunderers appropriating for themselves what should be our birthright.

— This commentary was broadcast on WAMC Northeast Report, Jan. 30, 2018.


Trump and the Swamp

June 6, 2017

Trump promised to drain the swamp. We can agree that the swamp is the predominance of special interests over Americans of ordinary means. Bernie Sanders won many hearts and minds by refusing to take big money. Trump claimed independence from big money because he had so much. Clinton lost many votes because she accepted large speaking fees and contributions. A large populist wave by financially ordinary Americans swept the country.

People credited Trump’s promise to drain the swamp. With Trump in power, we’re entitled to look at his actions. Indeed we should.

Most Democrats long tried to take big money out of political campaigns. With some exceptions, like John McCain, Republicans worked to protect the use of money in politics. In the McCain-Feingold Act, Congress managed to compromise between their positions. But the Supreme Court, dominated by Republican appointees, invalidated restrictions on campaign contributions, and held in Citizens United, that corporations could contribute funds straight from corporate treasuries. Heard anything lately from the White House about campaign finance regulation? I didn’t think so.

Trump wants to lower the tax and regulatory burdens on the wealthiest people and companies. He claims in justification that the extra costs harm American workers. I recognize the heated debates about those claims. I’ve repeatedly explained in this commentary that putting more money in the hands of the wealthiest people and corporations is unlikely to spur investment or improve the position of American workers. It won’t help American workers because corporations can and do spend extra money everywhere, including abroad. It won’t help American workers because extra wealth can be and is spent on nonproductive goods or investments. And it won’t improve the position of American workers because there is no shortage of capital in this country, so putting more in in wealthy or corporate pockets is like pouring mud into the Mississippi.

Eliminating regulations will also put money in wealthy and corporate hands but hurts everyone else. Unions have been big proponents of safety regulations because they protect the health and safety of workers, and, we should add, of consumers and citizens.

Trump’s proposed budget also pulls up the safety net and hands the savings to corporations and the wealthy. The safety net protects people when they fall on hard times, when illness drains their bank accounts and strains their budgets, when corporate decisions leave workers struggling to find new jobs and forced to feed families on minimum wage jobs. These have direct and indirect costs for all of us. Losing a job can be temporary but it can also be a fall into a rabbit hole that sucks out everything we’ve invested in our homes, our retirement, and stresses, even breaks up our families. In 2008 those factors spread and took a lot of us down. The safety net was intended in part to help slow or stop economic downturns. 2008 overwhelmed what was left of the safety net but Trump would make it worse.

And health care decisions don’t just affect the most vulnerable. None of us want people spreading serious or medicine-resistant strains of TB, Zika, MRSA and other communicable diseases. Effective strategies against communicable disease involve keeping the diseases out of the population to the extent possible.

In Trump’s budget, the savings from all these cuts go to the 1/10 of 1%, the wealthiest of the wealthy, the very people who should be giving back rather than sucking at the public til. Trump promised to drain the swamp. But Trump IS the swamp.

— This commentary was broadcast on WAMC Northeast Report, June 6, 2017.


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.


How Can We Protect American Workers

March 11, 2017

Trump’s power, and his policies on jobs, immigrants, religious and ethnic hatreds and the Alt-wrong are all related.

Scholars of intolerance tell us that threat breeds hate. I suspect that all we can say about why immigrants and Muslims are really good people only makes those who feel threatened feel more threatened, because instead of talking about their needs we’re praising someone else.

So I want to talk about the needs of Americans who feel threatened economically and what can be done regarding their economic losses, recognizing that the disfunction in American politics is partly due to the desperation of workers who’ve lost once good jobs.

Protecting American workers is crucial both because people suffer when they can’t find good jobs, and because desperate or threatened people take dangerous risks at the polls and elsewhere. We must protect workers both for their sakes and for ours; it’s much the same thing.

It’s our job because government fiscal, tax, programmatic and other policy decisions daily determine how many jobs there are. Some people can make their own opportunities, but, to be fair, most good, decent, hard-working people can’t.

What can we do about it? Sometimes it helps just to set out the options. Here are the choices I can see:

FDR created unemployment compensation and Nixon proposed a negative income tax – safety-net approaches based on direct income transfers. Many object, including those who benefit from handouts, tax loopholes, deductions, farm price supports, subsidies etc. – the tax code and the budget are replete with them. But direct financial transfers are one possibility.

A second approach is to pay for jobs indirectly through trade policies. All three presidential candidates talked about that. I understand the fear of foreign competition even though there are reasons to look for other solutions for American workers: limiting foreign imports hides the cost in the price of things we buy, and isolates the American economy from developments elsewhere. It also might not work; actual hiring decisions would rest on other people’s decisions. But we can’t overcome the fear if we can’t commit to other steps, and all the talk about the risk to Social Security fans that fear.

A third approach, the conservative free market approach, is not really a solution for the working person at all – it simply puts the monkey on workers’ backs to find jobs or starve.

A fourth approach is to create new jobs by government action – fiscal stimulus, infrastructure development, and investment in science and education, all of which call for construction, maintenance and technical jobs. That’s what Obama called for but Congress drastically whittled his effort down.

Why can’t government be employer of last resort? That would automatically support a minimum wage, create better communities, and make life better for all of us. It’s not the free lunch some people worry about; it’s a job. What’s so terrible about giving people what Tom Paxton called “a job of work to do”? There’s plenty to do if we were willing to invest in our people, our workers, our infrastructure, and our environment. Sometimes spending a little can make the community more attractive and the economy zing while providing a decent income to people who need a job.

Some countries use all of those methods and have quite robust economies.

Those are the alternatives I can see: the free marketeers’ defining it away as the workers’ problem, the safety net approach of income transfers, paying indirectly through trade policies or subsidies for the appearance of helping workers, or creating jobs through fiscal stimulus or hiring people to do needed work. My preference is to put people to work – that way protecting others is good for us all. One way or the other, standing up for each other is essential.

— This commentary was broadcast on WAMC Northeast Report, March 7, 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.


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