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.

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Investing in the Environment

February 21, 2017

The White House isn’t explaining government’s environmental options.

The environment is the crux of emerging industry. It doesn’t just enable us to breathe better and protect our children’s lives. It is a growing industry which America could dominate if we tried. It is and will be crucial to housing materials, and protecting existing investments of all kinds. Places and countries that don’t protect their environments will not attract entrepreneurs, workers or investments. Their infrastructure will clog along with people’s lungs.

And as it becomes cheaper solar and wind make other industries possible – sun and wind don’t charge by the hour. Falling behind in environmental infrastructure means disaster, abandoned communities if they don’t first fall into the sea.

As simple a gesture as writing land-planning rules so that new construction has the best orientation to the sun cuts expenses forever. Supporting science, instead of taking scientific findings off government websites, will lead to other helpful steps America could take. Plus everything we do for the environment will depend on putting people to work to get it done.

Yes I know, there are shifts in world temperatures that are not man made. New York was once covered with a huge sheet of ice. Nevertheless, we also know, independently, that carbon and methane are driving global warming. Even if natural processes affect the temperature of our world, mankind is making it much worse. We could take action to bring that down unless we put our heads firmly in the sand. Fighting to minimize climate change is good for the economy. Losing that fight isn’t. It means rescuing people, pulling them away from the coasts, crowding them into smaller less productive areas. More than that, it means that many of the places we live will become uninhabitable. Only the mortuaries will do well.

I once chatted with an engineer about the effects of climate change. I knew that his house is in New York City, only 8 feet above sea level and not far from the coast. So I suggested he move to higher ground. He responded that if the sea rose 8 feet, New York City would be unlivable. The infrastructure of the city wouldn’t work. Roads and streets would be submerged or collapse. It wouldn’t be worth staying even on higher ground. So I suggested moving up here – the Hudson may be at sea level but most of us are much higher than that. His response was chilling but one would be a fool to assume he was wrong. He said that none of us would be safe if 8 million New Yorkers, or more from the metropolitan area or the East Coast, became refugees. Wow. His point is that if large numbers of us become desperate, and remember that most Americans live near the coasts, then all bets are off.

Remember the resistance in Congress to repairing the damage from Sandy. That doesn’t even compare to the costs of a rising sea.

So fighting climate change is good for jobs, protects us from economic collapse, and gives our children and grandchildren something to live for. That’s a heck of a worthwhile investment, and a collective, patriotic goal.

— This commentary was broadcast on WAMC Northeast Report, Feb. 21, 2017.


Against whom the rebellion?

November 8, 2016

This is my last chance to talk with you before the polls close.

Republicans have argued since the 19th century that the market solves all problems. Democrats by contrast solve economic problems by investing in the people and the infrastructure they need to get their work done – things business can’t partly because of competitive pressures and partly because they can’t reap the benefits of projects that help the general public.

Because getting things done requires both the president and Congress, split government favors the Republicans. Democrats need both branches and both houses of Congress to pass the laws  that make their economic programs possible. Looking back to 1994, there have been only four years in which Republicans did not control at least the Senate.

There is a well-justified need to rebel against the way the economy and the government have been treating you, and the Republicans should bear the brunt of that rebellion.

They insist that investors would use tax breaks to create new jobs in this country. In fact, tax- break beneficiaries can invest the money anywhere. So when Republicans give wealthy businessmen more money, we just get the risk. Their friends get tax breaks; workers get laid off. Their friends close factories; workers look for jobs. Their friends freeze wages; workers look for second and third jobs just to keep going. Their friends downsize for efficiency, leaving workers unemployed, unhappy, and looking for a way to earn a living.

The economy is organized for the guys on top. Dealing with it, making America truly great for all of us, takes more than the Republican nostrum of lowering taxes. Businesses invest where they find markets, workers, infrastructure, and where they’re attracted by the comfort or the cultural life for themselves and those they want to hire. Taxes have little to do with it.

That’s why Obama’s and Hillary’s investment in infrastructure and emerging industries is a better deal to create jobs and opportunities for everybody. There are many reasons to invest in America – unless we let it fall apart, let our infrastructure crumble, and don’t keep it up to date.

Whether Trump understands real estate, where he’s managed to lose lots of other people’s money, Trump clearly doesn’t understand the economy. The old trope about taxes won’t grow the economy. And his promises are cynical because people won’t invest in outdated, high cost, low return industries when there are better opportunities, no matter how much he yells about it.

Which gets back to something else Trump doesn’t understand. Government needs to work on shifting the risk, to make it easier for the vast majority of Americans to find new sources of income, if necessary to move where the jobs are, on more than a hope and prayer of avoiding homelessness. That’s not in the big generalities that so-and-so will fix things. That’s in the details. You work on those; you study those; the job isn’t all in the bluster.

We’ve had enough of Republicans blocking every effort to build the economy, protect its workers and take care of all the people. It’s time for a smart rebellion – not a wild swing with eyes closed.

So do vote if you haven’t already. It matters.

— This commentary was broadcast on WAMC Northeast Report, Nov. 8, 2016.


It’s Government’s Job to Make Work Available

April 19, 2016

Bernie and Hilary argue about trade pacts. We know trade pacts cost some jobs and open up others. That’s not a satisfying trade-off if your skill is suddenly unmarketable and you’ve become unemployed or underemployed. An effective response is crucial.

But protecting specific jobs will ultimately hold America back, diminish our competitiveness, and damage our ability to develop in new directions. Government should not protect specific, unsustainable jobs or avoid trade pacts that promote economic progress, national security or other international objectives.

But – and it’s a very important but – government should make sure that we can all work to support ourselves and our families. That’s why Republican insistence on scaling back Obama’s stimulus package in 2009 and then blocking more investment in infrastructure was very much the wrong move. It shirked our responsibility to each other and made moving forward politically more difficult.

The way government can make jobs available is to hire people to do what we should be doing and building. Once people are working, business and investors will take advantage of the extra income flowing and build their businesses and inventory to satisfy the demand.

But businesses don’t invest in order to create demand. Individual businesses can’t assume their investments will change the economic picture significantly, certainly not enough to repay their investments. Individual businesses can’t assume that they will reap the benefits of having created more jobs – people spend their paychecks in many places only a fraction of which will come back to the company.

That’s just one of the reasons pouring more money into the hands of what Republicans like to call job-creators is worthless, like a Rube Goldberg invention in its totally confused complexity. Business invests to meet demand or to create a product they think will sell – they don’t invest just because they have money. And since in fact they have lots of money on hand, many have been engaging in various forms of financial manipulation, buying back stock, sending money abroad, anything but job-creating investment or investments here.

That means that both Bernie and Hilary are hitting the nail of economic doldrums for the many people who can’t find decent jobs right on the head. It’s a problem that needs government to work for us.

Putting people to work solves many problems at once. Putting people to work supplies the person-power to re-build, update and renovate infrastructure. Putting people to work, pushes the wage scale for the best of reasons – not just a legal minimum wage pegged to an arbitrary number, marketplace pressure for employees raises the payscale. Putting people to work improves the business outlook. And infrastructure improvements improves the feasibility of successful investment for everyone – not just the favored projects of a few but improved access for all of us means that people with a good idea will have the opportunity to get the resources they need and access to the customers they want.

Of course whether government can pay for doing the right thing depends on whether government can actually impose taxes on the people and companies who have money. Arguing about protecting the so-called job-creators bv reducing their taxes is actually a way of starving government so that those so-called job creators can squeeze workers who are uprotected because government can’t afford to do anything about it. A successful modern economy requires a government with the resources to play its part.

— This commentary was broadcast on WAMC Northeast Report, April 19, 2016.

 


How America Would Handle Greece

July 14, 2015

What are the lessons from the Greek crisis? Their economy had major problems. People with plenty of money weren’t bothering to pay taxes. And the Greek government provided benefits beyond its means and beyond the pace of investment to maintain. So the EU was certainly correct that Greece had problems that Greece has to deal with. But that’s not the whole story. Greece needed multiple remedies, to cure its mistakes but also to stimulate its economy.

Think about what we do in America. Periodically states are bankrupt or depressed. We don’t offer secession or a sale to Mexico. We didn’t ignore problems in Appalachia, Arkansas and other struggling states. Within states, we don’t ignore depressed areas. Sometimes we put communities in receivership, but that’s not our only tool. Although Tea Party Republicans don’t want to recognize it, we do have another American strategy – we invest. The Cuomo Administration is investing in areas around colleges and universities, spread throughout the state. We’ve had business empowerment zones. Military bases have been used for economic purposes. And we build infrastructure or housing or convention centers. Some investments are unwise wishful thinking. But the instinct is shared, American, and, used intelligently, it works. Conservatives don’t like to admit the Keynesian economics behind it, but they use these techniques wherever they are in control. They just call it good business.

States are barred by the Constitution from printing money. If Greece exited the Eurozone, it could issue currency or pay its employees with i.o.u.s for use as currency. Either way a devalued currency could make Greek goods and services worth buying.

Greece’s finance minister accurately explained that austerity deepens recession. The EU has responded with the same economic strategies that had been discredited before the Great Depression of the ‘30s. If the economy shrinks in response to austerity, nothing is left to pay debts, much less to invest. For an economy in trouble austerity alone is the wrong prescription at the wrong time for the wrong disease. It works only if the desired outcome is to kill the patient. Unfortunately, the EU hasn’t used other tools needed to deal with the recession.

The lesson here is the contrast. Cutting expenses cannot be the only tool. Investment works. Infrastructure, science and educational investments work. Congressional conservatives are too skittish about investing in America. They need to do what their own state governors do – invest in economic development. There is plenty of room in the U.S. for investment that will contribute to the American economy. Intelligent public investment can yield multiple rewards: the immediate reward of assisting people get back on their feet, the return of some of that money as taxes, and the longer term rewards of facilitating business. That is the virtuous cycle that every good economy needs.

Neither taxes nor tax cuts automatically yield economic benefits. Cutting business taxes will probably not raise the chances of business investment if they are already sitting on money. Cutting personal taxes won’t put us on the road to recovery to the extent that consumers buy abroad. The devil is in the details. But the visceral objection to all investment by government because it is government needs to give way to a more intelligent discussion of the investment we need and the investment that will pay dividends for years.

— This commentary was broadcast on WAMC Northeast Report, July 14, 2015.


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