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.


On Egos in Skin, Muscles and Race

December 31, 2016

Years ago, when I was working out in a gym, a younger woman was obviously putting more weight on the equipment and doing more and faster reps than I was. I did not know this woman and there was no conversation between us. But as she passed me, she commented that it was OK because I would be stronger on the upper body exercises. When people catch me off guard with a comment like that, I often say nothing, and I don’t think I responded. But I have often wanted to say to her that I don’t keep my ego in my muscles.

Some do of course, people who can do all sorts of things that I can’t, great athletes but also people who move furniture and other heavy work and they have every right to put their egos in their muscles.

But why would anyone put their egos in the color of their skin? I hope everyone has other things to be proud of. That leads me to feeling mostly pity for the people who base their lives on racism, as if their own race is special, not just as good, but superior. That is as shallow as the cosmetics that people apply to their skin.

After the Civil War, Thaddeus Stevens told the House of Representatives that he hoped people would be judged only by their character and ability. By that standard of course, whites, or Caucasians, are all over the map, from killers and thieves to statesmen and scientists. The same is true for other so-called races. If that leaves people feeling like the ground has been knocked from under them, they need to hike onto firm ground, but it isn’t going to be the color of their skin. The people who kept repeating that President Obama couldn’t figure anything out only revealed their own inferiority complex, a struggle they tried to hide by claiming to belong to a supposedly superior white race, and by their inability to see the qualities of an African-American man.

The great Dodger shortstop, Pee Wee Reese, made a very revealing comment when he pointed out that what had really upset some ballplayers when Jackie Robinson broke in to the majors was not the color of his skin; it was his education – Robinson had been a four-letter man at UCLA and came to the Dodgers as a well-educated African-American at a time when most ballplayers had little education. The antagonism of some ballplayers was jealousy concealed as racism.

By the same token, I think what bothered many about President Obama was not just his race, but his accomplishments – an ivy-league education capped by the top position on the Harvard Law Review, a job with a corporate law firm followed by a career in public service. These are accomplishments most of us could envy. But most of us are happy to admire the man without demeaning his obvious accomplishments because somehow his skin color diminishes us. Truly I think racism both masks and reveals the inferiority of the racist. They need to get over it.

— This commentary was broadcast on WAMC Northeast Report, December 27, 2016.


American scientific capital

August 19, 2014

A panel at a national meeting of historians I attended was devoted to the relation between the study of history and STEM – science, technology, engineering and mathematics. One speaker explained that practical skills were widespread early in our history. Those skills, like surveying, sailing, or building canals, required both hands-on skills and the ability to perform calculations and experiment. American surveyors, navigators and builders were doing what we now call science and math, though they rarely got the credit. One surveyor wrote to a Frenchman around 1814 that no one was paying for astronomy, and no one was paying him for his astronomical investigations and calculations. But the speaker then pointed out that this gentleman was in fact being paid by the government for surveying and that his surveys required the astronomical observations he was making. He was doing the work, though not being recognized for it as his French friend would have been. Read the rest of this entry »


For a Better Education

July 1, 2014

A recent headline read, “Slow Common Core.” For quite a long time there has been a backlash against anything viewed as “too tough” for our kids. That is a tendency of living in a democracy. Anything tough for our kids is bad but at the same time they have to get a fabulous education that will equip them for life’s challenges. So the solution is teachers who can make everyone learn painlessly. And therefore, if anything goes wrong it’s the teacher’s fault, not the student’s. Read the rest of this entry »


Should we care about the fate of prisoners?

March 11, 2014

Should we care about the fate of prisoners?

A number of listeners have been raising that question in the wake of WAMC reports of lack of medical care in prisons, and my support for Cuomo’s position about educating prisoners.

Let’s assume that we don’t care about them at all. But we care about us. So what is the effect on us of what we do to them?

Actually the implications are huge. Read the rest of this entry »


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