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 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.

 


Suckers for Trump

May 31, 2016

Let me begin by reminding you of Trump’s claims,[1] and end with some questions.

“I’m totally pro-choice” he declared and then took it back: “I’m pro-life” and told MSNBC that “there has to be some form of punishment” for a woman who has an abortion, later modified that only the doctor should be responsible. Plus he supported Planned Parenthood, and defunding them.

Remember the poor woman in Providence whose house was taken under eminent domain? “Eminent domain is wonderful” he told Fox News, and within a month told another outlet, “I don’t like eminent domain.”

He told CNN “I’m an environmentalist,” but tweeted “Global warming is a total, and very expensive, hoax!”

He once “support[ed] the ban on assault weapons and … a slightly longer waiting period to purchase a gun.” but “I don’t support it anymore.” Now he says he’s “the strongest person running in favor of the Second Amendment.”

In 2000 he said “We must have universal health care” but his campaign website read “It is not enough to simply repeal this terrible legislation,” and says he’d substitute “free market principles” on health care.

On taxes, in 2015 he described his tax plan as “a big tax reduction, including for the upper income.” On May 5 he told CNBC “I am not necessarily a huge fan of” cutting taxes for billionaires.

It’s not clear who Trump likes as people. First he refused to denounce the Ku Klux Klan and other white nationalists supporting him. Under fire he reversed course but many white supremacists, including David Duke, continue to support Trump. He’s blown hot and cold on refugees: “on a humanitarian basis, he said, “you have to” take in Syrian refugees. But now he wouldn’t. “I love Hispanics!” he tweeted on Cinco de Mayo, pictured with a taco bowl. Except of course that he wants to build a wall and send them all back to Mexico.

Donald thinks military policy is a cinch, “It would take an hour and a half to learn everything there is to learn about missiles. … I think I know most of it anyway.” He waffles on whether he would trust the Russians or not. He liked NATO, the North Atlantic Treaty Organization, which unites Europe and the U.S. militarily. “I see NATO as a good thing” he said recently but six days later decided “NATO is obsolete.”

The Middle East befuddles him. He supported invading Iraq. and crowed that “It looks like a tremendous success” but four days after that said, “The war’s a mess.”

He supported fighting in Libya: “Qadhafi in Libya is killing thousands of people, nobody knows how bad it is, and we’re sitting around, we have soldiers, all over the Middle East, and we’re not bringing ‘em in to stop this horrible carnage. … We should go in, we should stop this guy, which would be very easy and very quick.” But he said later, “I never discussed that subject.… We would be so much better off if Qadhafi were in charge right now.”

What are we supposed to make of Trump’s contradictions and about-faces? Does the adjective he uses endlessly to describe Hillary fit Trump better? Does he know what he’s talking about? I’m more interested in how we decide what he’s for? He’s inviting people to buy their own dreams. Whatever you’re for, he wants you to think he is too. Selling people their own dreams is a great sales tactic. It’s natural to believe others think like us. But if we guess wrong, who wants to be Donald’s sucker?

— This commentary was broadcast on WAMC Northeast Report, May 31, 2016.

[1] Clips collected on http://www.politico.com/magazine/story/2016/05/donald-trump-2016-contradictions-213869;  Michael P. Lynch, Truth, “Politics and the Power of Contradiction,” New York Times, May 8, 2016, at SR2, available as Michael P. Lynch, Trump, Truth, and the Power of Contradiction, http://www.nytimes.com/2016/05/08/opinion/sunday/trump-truth-and-the-power-of-contradiction.html?_r=0; “A Trump Sampler: His Changing Views,” New York Times, May 8, 2016, on page SR2, available at http://www.nytimes.com/interactive/2016/05/08/sunday-review/a-trump-sampler-his-changing-views.html.


Refugees and the Impact of Immigration

April 5, 2016

Let’s talk about immigration in this current frenzy about keeping Syrian refugees out.

DAESH (ISIS) or al Qaeda used EU citizens to damage Paris. They will try to use Americans here. Some Americans have gone over to the dark side, trained abroad, could return and blend in here. That is a similar problem with deporting those undocumented people who have spent most of their lives here – in their countries of origin many have no ties, job history, knowledge of the culture or the environment. Deported, they are valuable to smugglers who use them to get contraband across our borders. Allowed to stay, they could be productive members of society. For Americans and immigrants alike, keeping people working at decent jobs is the best way to keep everyone out of trouble.

Population also affects national power, what we can produce, and the power we project. That is important in an increasingly dangerous world. Adding to the workforce and as consumers, immigrants increase the size and health of our economy, and instead of straining our budget, they help to sustain our social safety net, as many aging countries have been finding out.

Immigration is not without costs, however. China and India now each have over a billion people. India’s population has tripled since I was young. These are population explosions. Chinese authorities understood that China could not sustain population growth and slowed it precipitously.

Moving people from places where they live in fear to an America where they can live in peace and prosperity is neutral with respect to worldwide population. But it may do environmental damage if it means changing to an environmentally more destructive lifestyle. That makes it doubly important to control, limit and reduce environmental damage. It means that we should, must, continue to invest in ways to reduce our use of fossil fuels, and increase our use of solar and wind energy and passive solar heating. We must control our overuse of water, and invest in better ways to use it. We need to rethink our national land-use policies – it makes little sense to irrigate deserts for farmland and build suburbs on productive lands. We are shifting farmland from places that have plenty of water to those that don’t. That is not only wasteful, it also leads to drought, salinization of the land, and makes other settled places unlivable, save at the enormous cost of desalinization of seawater.

Ultimately both our goals for immigration and our goals for America, our children and grandchildren must be driven by concern for the people who will inhabit it. That means care and concern for the immigrants themselves, and care for everyone, those we are strongly attached to and all the people of the earth, expressed through environmental policies that can keep the earth habitable. In that effort we all have to be willing to share and accept effective regulation. There is no other way.

And yes, protecting the lives of our children and grandchildren requires some sacrifice. But aren’t the sacrifices we make for those we deeply care about one of the most satisfying things we get to do? All our faiths confirm those duties and affirm the joy of giving and caring. It’s hard to think of people as deserving who are unwilling to share in the general sacrifices for their and our offspring.

— This commentary was broadcast on WAMC Northeast Report, April 5, 2016.

 


Looming Catastrophe and Stubborn People

March 22, 2016

Help. Two major problems have the same structure – it doesn’t look like people will deal with the problem until it is too late. Too late means the survivors will be refugees. Everyone else will be dead. And yet getting people to deal with the threat except at the fringes has been impossible.

One of those problems is global climate change. I’m told people will come around. Great but time is not on our side. I’m told people don’t want to make any sacrifices.  Great. Life is a sacrifice. We sacrifice for everything we want. How about life? For us? Our kids and grandchildren? Isn’t that worth a few pennies? What’s the matter?

We could deal with this. It’s not rocket science. Changes to the tax system would push carbon out of the air. And some regulation would clean up other parts of the problem. Is life itself, for everybody we love, not worth some sacrifice? Can’t we make it clear to everybody in this election season that anything less than a full-court, all-out press to call a halt to global warming is the sine qua non of our support, the one overriding issue, and they’d better do everything they can?

Time might have been on our side when Rachel Carson’s Silent Spring came out in 1962, Barry Commoner called attention to environmental threat of global pollution in the late 1960s, and we held the first Earth Day in 1970. That was 46 years ago. Time is not on our side now. Action is crucial now; we need to do everything possible to make the system move. Corporations that hide behind the bad-for-business apologias deserve boycotts. Everybody’s shoulders need to go to all the wheels – now.

The same dynamic underlies Israel’s miscalculation of its own position. It has now lost or is in the process of  losing all its allies. The majority there has been stubborn and stupid in denying that they needed to make any changes. But it’s become obvious to many more than those of us who’ve been crying in the wilderness for years. I know I’ll get hate mail – people cover up their own blindness by refusing to see and blaming everyone else around. Sorry. That won’t help. The problem isn’t me; it’s that the world has lost patience and it doesn’t particularly matter now if the world is right or wrong. Israel never had a future without allies and Israel has been squandering its erstwhile friends. It’s bet on the Republicans has only revealed the loss of support across the American political spectrum. So will Israel go the way of the Crusades? It will take a lot of far-sighted savvy to stave that off and I doubt their politics will permit it.

Two very different problems and yet two problems that are very similar. Meanwhile, I sit down to write some commentary, and here, two problems close to my heart are looking intractable and I don’t really know what to say. Help. Let’s get this done.

— This commentary was broadcast on WAMC Northeast Report, March 22, 2016.


The Earth will have its Revenge

March 15, 2016

One of the major drivers of global warming is the greenhouse gases we emit by burning fossil fuels. Another major driver of global warming and one of the ways in which we are making our earth unsustainable for human life is the population explosion. When I was young the earth’s population was around 3 billion. It has more than doubled. When we talk about the growth of population, the crucial issue is about the time it would take to double. Population can double in as little as a generation. We are on the way to an earth with 12 billion people and counting. The devastation that is causing and will cause is incalculable and will make the earth inhospitable in short order, contributing to the overuse of water, the over fishing of the oceans, the deforestation of the jungles, the overuse of carbon based fuels even while we try to flush them out of the atmosphere and every other form of damage to the earth we depend on.

That makes population policy a tremendously important issue worldwide. Years ago we used to talk about ZPG, zero population growth. The idea had been talked about for centuries but a best-selling book, The Population Bomb, written by Stanford Professor Paul Ehrlich and his wife, Anne Ehrlich, helped make it a movement in 1968. Just a few years later, the movement was hijacked by the national battle over abortion. But population growth did not suddenly become unimportant. It remains at the root of the unsustainability of the world we inhabit.

We have a choice, we can curb the growth of population voluntarily, or an angry earth will do it to us, reducing our children and grandchildren to refugees, beggars, and marauders and leaving them to die of thirst and starvation or gasping for oxygen, if they are not killed by armed bands looking for the scraps of the earth.

Naysayers like to point out that Malthus’ prediction of worldwide starvation has not yet come true. But the evidence that Malthus’ prediction is coming true is all around us. Lands once fertile are becoming deserts. Trees once crucial to a sustainable atmosphere are being chopped down at alarming rates in the southern hemisphere with worldwide consequences. Fish stocks have been shrinking and even more important, the coral reefs that are at the base of the oceanic food chain are dying. May Malthus rest in peace, but we are seeing what he feared. Human beings have never been good at listening to prophets. Those of us living now can’t claim we were not warned. We can only claim that too many people scoffed as they scoffed at the prophets of old. The earth will have its revenge.

I do not want to treat abortion as part of this problem because it raises so many separate issues and debates. But I do want to treat almost every other method of birth control as very much part of the issue. Whatever your faith, we have an obligation to life, to treat our world with the respect it deserves. Religious proclamations about populating the earth made thousands of years ago have been accomplished, and must now be subordinated to religious and secular claims about life, about treating each other as required by the Golden Rule, about protecting the soil and the air and the water that give us all life. There is no escape from that injunction. Or the earth will have its revenge. Make sure the people you elect start protecting us from world-wide disaster.

— This commentary was broadcast on WAMC Northeast Report, March 15, 2016.


What is Limited Government Anyway?

January 26, 2016

With the presidential primaries underway, the media is choked with talk about getting the government off the people’s backs, restoring limited government, making government let the people alone. But the Koch brothers, the Tea Party, their candidates and supporters are actually saying something very different – they want government to support their definition of their rights and push everyone else out of their way, and most important they want the courts to decide in their favor when others complain that they are trespassing on public land or polluting the air, land and water in ways that injure and interfere with the lives of others. That’s government in their favor.

We lawyers talk about law as a seamless web. That sounds like an idiom but it’s actually very precise. Everything is governed by rules. Judges always decide that someone does or does not have a privilege or a right. Those are all decisions about what the law is. Law always favors someone and disfavors someone else. If someone has a privilege, then everyone else loses when that person does whatever he or she is privileged to do. The question is not, cannot be, whether there is law; the question we have to deal with is whether it is fair and whether it is good for the public. Government off the backs of some means government on everyone else’s back, often leaving you and me poor and defenseless.

Limited government, regulation off people’s backs, are the tropes we hear when a government agency or legislature takes note of bad behavior – fraud, pollution or unconscionable business practices that cause decent people great loss. Unscrupulous companies, some very large and well known, as we discovered during the 2008 financial shock, want no regulations that would set a moral floor under their behavior, allowing more moral enterprises to compete instead of being bankrupted by cut-rate competition from the scandalous moguls. The only regulations that the unscrupulous like are regulations that keeps everyone else out of their way.

So when you hear that trope, look squarely at the privilege these anti-government claimants are defending. You hear it loudest when people are claiming the right to hurt the public. That’s not a claim of freedom that would have made any sense to the Founders of our country.

When the Founders spoke and wrote about government, their central questions were what’s fair and what’s good for the public. Those was central in every aspect of their work from the definition of property rights to the rights the public retained and what the public could and should do for the benefit of the people. Concern for public welfare was central to the building of the Erie Canal that defined the path of commerce in the State of New York for a century and a half, even as the canal was replaced by roads and railroads to continue developing the path the canal had developed. Concern for public welfare was central to the establishment of schools which made Americans among the most educated people on the earth, education that was at the root of all the good things that have happened since.

The Founders believed in public spirit, not a spirit of what the public could do for one’s selfish needs, but a spirit about what each of us could contribute to the improvement of the community, the states and the nation. When President John F. Kennedy told the American people “Ask not what your country can do for you; ask what you can do for your country,” he was channeling the spirit of the Founders.

— This commentary was broadcast on WAMC Northeast Report, January 26, 2016.


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