Monthly Archives: December 2016

Sauce for the Goose

Evidently, sauce for the goose is not sauce for the gander.

We’ve become accustomed to the breast-beating and recriminations that accompany decisions by American businesses to manufacture goods in other countries, or to move existing operations overseas. In the latter case, the loss of jobs is a genuine “hit” and efforts to retain them are understandable–although, as we’ve seen with Trump’s Carrier deal, often costly and counterproductive.

We almost never hear about the other side of the equation, however. Indiana, in particular, has benefited mightily from outsourcing decisions made by foreign companies. According to the Indiana Business Research Center at Indiana University, in 2015, Indiana had 152,700 workers employed by foreign-owned firms. (Think of the Honda plant in Greensburg, the Isuzu plant in Lafayette, etc.) Of the jobs created by foreign companies located in Indiana, 97,900 were manufacturing jobs that accounted for 3.1 percent of the state’s private employment.

Similarly, automation–not trade– accounts for most of the job losses in the United States. Trade actually creates jobs (although often the jobs created are different from those that are lost, and that does make for winners and losers). According to a January 2010 report from the Business Roundtable, at that time, 761,500 jobs in Indiana depended on trade.

In 2008, 20.5 percent of jobs in Indiana depended on trade, up from 10.0 percent in 1992. Indiana’s trade-related employment grew more than five times faster than total employment from 2004 to 2008.

This is not to minimize the issues raised by job losses; the impact on workers who find themselves unemployed–and often, due to age or lack of other marketable skills, unemployable–is very real. The impact on communities when a major employer closes or downsizes are equally real, and challenging. But addressing the consequences requires an accurate understanding of the causes.

To use a medical analogy, prescribing the proper remedy requires a correct diagnosis of the disease being treated.

The globalization of the economy has proceeded too far to be undone, even if we wanted to mount a retreat. History teaches us–or should teach us–that erecting trade barriers, punishing companies with tariffs on their foreign operations, and the other measures Trump has threatened–simply invite retaliation that hurts everyone.

It’s comforting to have a target for our economic frustrations, a “bumper sticker” solution to a problem. Unfortunately, modern life is more complicated than such “solutions” recognize. Automation has multiple virtues, but it does cause troubling job losses. There are good trade agreements and bad ones. Losing jobs as a result of American outsourcing is painful; gaining jobs as a result of Japanese or Canadian or British outsourcing is gratifying.

The world is a complicated place.

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Following the Money, Prison Edition

Recent research from In the Public Interest reports that “graduates” of private prisons have higher rates of recidivism than ex-offenders leaving public institutions.

The brief shows that people incarcerated in prisons operated by for-profit companies, like Corrections Corporation of America (CCA) and GEO Group, have higher rates of recidivism than people incarcerated in publicly managed prisons. Evidence also suggests that prison telephone and video call companies make business decisions that increase the likelihood that prisoners subjected to their services will return to prison or jail.

The research attributes the higher recidivism rates to several factors: Private prisons are, on average, more violent than public prisons; the emphasis upon filling empty beds in their often far-flung facilities results in incarceration of offenders in locations that are often far away from their homes, with a resulting loss of contact with families and home communities; prison telephone companies charge high calling rates and many ban prisoner cell phones, which further reduces contacts between prisoners and their homes. (Adding to the problem, private prisons often ban in-person visitation and then charge prisoners and their families prohibitive rates to make video calls.)

The report notes that private prison companies have long histories of neglecting prisoners’ basic needs, focusing instead on their company’s revenues and profits. For example,

To reduce normal business risks around fluctuating prison populations, private prison companies add occupancy guarantee clauses to many contracts, which compel states and local governments to pay the companies for unused beds if the population drops below a certain threshold, typically around 90 percent of a facility’s capacity.

During the past few years, there has been growing concern about the operation and consequences of placing offenders in private prisons. As the New Yorker has reported,

Going into Election Day, few industries seemed in worse shape than America’s private prisons. Prison populations, which had been rising for decades, were falling. In 2014, Corrections Corporation of America, the biggest private-prison company in the U.S., lost its contract to run Idaho’s largest prison, after lawsuits relating to understaffing and violence that had earned the place the nickname Gladiator School. There were press exposés of shocking conditions in the industry and signs of a policy shift toward it….In August, the Justice Department said that private federal prisons were less safe and less secure than government-run ones. The same month, the department announced that it would phase out the use of private prisons at the federal level. Although most of the private-prison industry operates on the state level (immigrant-detention centers are its other big business), the news sent C.C.A.’s stock down by thirty-five per cent.

In the wake of Donald Trump’s victory, that all changed. C.C.A.’s stock jumped forty-seven per cent. (It wasn’t just private prisons, either; Trump’s privatization promises caused sharp increases in the stock prices of for-profit schools .) As the New Yorker pointed out, the outlook for private prisons is particularly rosy, because so many of Trump’s policies will–if implemented– benefit them.

The Justice Department’s plan to phase out private prisons will likely be scrapped, and a growing bipartisan movement for prison and sentencing reform is about to run up against a President who campaigned as a defender of “law and order.” Above all, Trump’s hard-line position on immigration seems certain to fill detention centers, one of the biggest money spinners for private-prison operators.

As the article concludes,

It’s become common to speak of “the prison-industrial complex,” and the analogy to the military-industrial complex is a good one: in both cases, government spending helps fund very profitable businesses, which, in turn, lobby legislators and regulators to keep the funds flowing. Just as we spend billions on weapons systems that we may not need, so, too, we jail more people than we need for longer than necessary, because it keeps someone’s balance sheet healthy. In recent years, an unlikely coalition of conservatives and liberals had made some progress in weakening this system, going after policies like mandatory sentences. Trump’s election will make it much harder to sustain that progress. Private prisons, he said earlier this year, “work a lot better,” and he’ll doubtless look to expand their reach. And he has a simple and grim answer to how many people we should put in prisons and detention centers: More.

Welcome to policymaking in the Trump era, where evidence and experience are irrelevant, expertise and research are scorned as “elitist” and private profit is king.

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Welcome to the Resistance

A couple of weeks ago, I was invited to speak to a “Women’s Rally for Change,” along with the Executive Director of Planned Parenthood and the Democratic candidate for Lieutenant Governor. The purpose was to discuss how to resist the coming assault on women and minorities, and to answer the increasingly common–and increasingly urgent– question: what can I do? What specific actions can I take?

The Rally was promoted only by Facebook posts; organizers hoped a hundred women might attend. We were stunned when five hundred women crammed into a space meant for far fewer, and another four hundred had to be turned away. (Future events, in larger venues, will be posted to a Facebook page established in the wake of the event: Women4ChangeIndiana.)

Several people who could not attend have asked me for copies of my remarks, so I’m posting them here. (Regular readers of this blog will find much of what follows repetitive….sorry about that!)

_________________________

We are facing divisions in this country unlike anything we’ve seen since the 60s, or maybe the Civil War. If America is to emerge reasonably intact, we need to look honestly at what just happened.

The ugly truth is that most of his voters saw Trump’s bigotry, misogyny and authoritarianism as features, not bugs. They didn’t overlook his appalling behaviors—those were what attracted them. They applauded his repeated attacks on “political correctness” and routinely told reporters that what they liked about him was that he “tells it like it is.”

The attitudes most predictive of support for Trump were racial resentment and misogyny—not economic distress.

Clinton won the popular vote, but because the Electoral College gives greater weight to votes from rural areas, she lost the Presidency. This is the 2d time in 16 years that the person who won the most votes was not elected.

The next few years are going to be very painful. Americans will lose many of the protections we have come to expect from the federal courts, probably for the foreseeable future. Economic policies will hurt the poor, especially women and children, and exacerbate divisions between the rich and the rest of us. A Trump Administration will abandon efforts to address climate change, and will roll back most of Obamacare. There will be no immigration reform, and God only knows what our foreign policy will look like. Worst of all, Trump’s normalization of bigotry will play out in a variety of ways, none good.

Sandy asked us to focus our comments on issues affecting women—but when you think about it, all of these issues will disproportionately affect women and children. And by far the worst for women is something we can’t reverse through legislation at some future time—a return to cultural attitudes that objectify and demean us.

So – what can we do, sitting here in overwhelmingly Red Indiana?

As individuals, beginning right now, we can support organizations that work to protect women’s rights, civil and reproductive liberties and public education, among others. A friend of mine and her husband, who stand to benefit from Trump’s proposed tax cuts, have decided to donate every dollar they save by reason of those cuts to organizations like Planned Parenthood and the ACLU. We might start a local “pledge my tax cut” campaign.

Perhaps the most important thing we can do is focus on local efforts to ameliorate the effects of likely federal actions. Most of the innovation and action on climate change, for example, is happening in cities, and it is much easier to influence local policy than state or national legislation. Those of us worried about the environment can make sure our cities are at the forefront of urban environmental efforts. There are other policy areas where—depending upon relevant state law—cities can mitigate the effects of federal action or inaction. Since the election, for example, several cities have decided to become Sanctuary cities, protecting undocumented people.

We can and must work to create inclusive and supportive local civic cultures that work against misogyny, bigotry and intolerance. We are already seeing a substantial increase in racist, homophobic, anti-Muslim and anti-Semitic incidents, and we need to create a civic environment that strongly discourages bigoted attitudes and behaviors. Cities have ready-made partners in those efforts, in arts organizations, civic and religious associations and the business community. I hereby volunteer to help mount a campaign focused on encouraging a welcoming, inclusive, respectful civic environment.

And if  the new Administration really does establish a Muslim registry, we all need to register as Muslims.

In the longer term, we have to reform America’s election system. The first order of business is to get rid of the Electoral College, which favors rural voters over urban ones and generally distorts the democratic process. The person who gets the most votes should win the election. We should work with groups like the League of Women Voters to get Indiana to sign on to the National Popular Vote Project, to oppose gerrymandering and to make voting easier, not harder.

We also have to defend our public schools and improve civic education. “We the People” or a similar curriculum should be required for High School graduation. Trump made all kinds of promises that he could not constitutionally carry out. Perhaps recognizing that wouldn’t have mattered to the kind of people willing to vote for him—but it might have.

Sandy asked each of us to identify issues of particular significance to women that we might win at the Statehouse. Given the composition of our legislature, we face an uphill battle, but here are some suggestions:

  • Work with local business and civil rights groups to expand Indiana’s civil rights law to include LGBTQ Hoosiers.
  • Work with Planned Parenthood, the ACLU and other organizations to prevent passage of added restrictions on abortion that more conservative courts would uphold. We’re already seeing that effort in Indiana.
  • Work with advocates for public education to scale back Indiana’s voucher program, the largest in the country, that benefits parochial schools at the expense of public ones.
  • Require effective civic education for graduation from H.S.

If there has ever been a time to be an activist, this is it.

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The Incomprehensible Attack on Medicare

I understand a lot of the fixations of the far Right (although I disagree with virtually all of them). But I’m at a loss to understand their vendetta against Medicare, or their belief that access to healthcare should be considered a privilege, not a right.

If we take Paul Ryan and his ilk at their word, they evidently believe that market competition will bring healthcare costs down, and that guaranteeing access to healthcare promotes overuse (i.e. you’ll go to the doctor more frequently than you really need to). They believe these things–if they really do– despite overwhelming evidence to the contrary.

The great virtue of markets is that they enable voluntary exchanges; they provide an incentive to provide goods at a price buyers are willing to pay. The classic description of a market is “an exchange between a willing buyer and a willing seller, both of whom are in possession of all information relevant to the transaction.”

That is not a description of the “buyer” having a heart attack. Even in the absence of insurance requiring the use of specific providers, people do not–cannot–“shop” for medical care. We are  generally not “willing” buyers, and as non-experts, we certainly do not have sufficient “information relevant to the transaction.”

As Josh Marshall pointed out at Talking Points Memo,

You think it’s hard getting good insurance when you’re 30 or 50? Try getting good private insurance when you’re 70 or 80.

Providing health insurance coverage to seniors will unquestionably cost more if run through private insurance. No one who has looked at the comparative data on the cost efficiency of Medicare and private carriers can question this. There’s no money savings. Quite the opposite. The only difference is that seniors will pay vastly more out of pocket because the vouchers won’t come close to the costs of a policy. The upshot of the Ryan plan is significantly increasing the cost of what society pays for the medical care of seniors and then making seniors pay dramatically more out of pocket. All with none of the bedrock gaurantees Medicare provides.

There’s a reason administrative costs of Medicare–which doesn’t need to advertise, show a profit or cover outsized salaries to upper management– are dramatically lower than those of private insurance companies. As Marshall points out, the irony is that at the same time they are attacking Obamacare, Ryan and his cronies are proposing to replace Medicare with something that looks very much like Obamacare.

But building an exchange and subsidy adjunct for non-seniors onto an existing and fairly robust private health insurance system is one thing. Creating one from scratch for people who are all pretty much by definition bad risks is close to laughable. Laughable if you’re not bankrupted or dying because you couldn’t get care.

Remember the other things Medicare significantly guards against. If parents have insupportable medical bills or have no way to pay for care, they go to children. In the absence of any other options, that’s how it should be. But that money comes out of other things: buying homes, putting kids through college. The social insurance model of Medicare has positive effects well beyond direct beneficiaries.

Recent polls suggest that significant majorities of Americans don’t want to get rid of Obamacare, let alone Medicare. I still remember that senior at a Town Hall meeting carrying a sign that said “Keep Government’s Hands Off My Medicare.” He may not have recognized that Medicare is a government program, but he’ll certainly identify the perpetrators of attacks on it.

Fortunately, even in the Time of Trump, efforts to deprive millions of Americans of access to basic healthcare will not be a slam-dunk. As Marshall has also reported,

Many Republicans can see the political danger of touching Medicare. No one campaigned on this in 2016. Support for phasing out Medicare and replacing it with private insurance and vouchers is minimal outside libertarians and conservative ideologues. That’s why word play about ‘reform’ and averting ‘bankruptcy’ and ‘saving Medicare’ are the catch phrases. If anyone said, ‘We have an idea to have seniors get private insurance instead of Medicare and a check from the government to pay part of the cost’ they’d be laughed out of whatever room they were in. What’s most salient is that it is toxic within the coalition around which Donald Trump has at least temporarily remade the GOP.

In the real world, nothing about this Ryan/Trump effort makes sense. Practically, fiscally and politically, it would be a disaster. Given the characteristics of those who would be in need of coverage, it wouldn’t even benefit insurance companies or Big Pharma.

This is ideology-cum-religious fundamentalism: don’t confuse me with the facts.

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White Man Malaise

Richard Reeves of the Brookings Institution has surveyed the post-election analytic landscape, and considered the varying explanations for the outcome. He traces what he calls “the malaise of white middle America” in the trending data about mortality, life expectancy, suicide and opioid use, and suggests that it ought not be surprising that areas in which people are turning to oxycodone are also the ones that turned to Trump.

Bernie Sanders says that Trump’s “campaign rhetoric successfully tapped into a very real and justified anger.” To his mind, people are “tired of having chief executives make 300 times what they do, while 52 percent of all new income goes to the top 1 percent.” Well, maybe.

Meanwhile Jenny Beth Martin, president and co-founder of the Tea Party Patriots, says that Trump’s victory is a validation of their agenda: “Repeal…Obamacare, protect our borders, stop illegal immigration, restore fiscal sanity and get the government off our backs and out of our lives.” Well, maybe.

There is lots of work to be done to truly understand the complex picture that emerged on November 8. But it doesn’t look to me as if economics will take us very far in terms of understanding white pain, at least in any simple way. Scott Winship of the new think tank Foundation for Research on Equal Opportunity delves into the numbers, and concludes that “there is little empirical support for the idea that ‘it was the economy, stupid’.” I agree. This was an identity vote more than an income vote. Many white men, especially those of modest education, feel as if they are being overtaken and left behind. “It’s relative status, stupid!”

Kathy Cramer is the author of a recent book, The Politics of Resentment, in which she relays her research and conclusions from her interviews with the white, working class men (and some women) who voted for Trump. She says they compare their lives to a bygone world in which men like them could easily get jobs paying a decent wage, were automatically considered the “head of the household,” and “always knew that they were superior to people with darker skin.” All of those basic assumptions about the way the world works have been challenged, to say the least.

And of course we’ve had a black President since 2008. As James Baldwin warned almost half a century ago, “the danger, in the minds of most white Americans, is the loss of their identity…The black man has functioned in the white man’s world as a fixed star, as an immovable pillar: and as he moves out of his place, heaven and earth are shaken out of their foundations.”

The unanswerable question is: what happens when these people realize that Trump cannot undo inexorable social change? That despite “telling it like it is”–i.e., giving voice and “respectability” to their resentments–he cannot put women back in the kitchen, gays back in the closet, or send African-Americans back to the back of the bus?

As Reeves concludes,

Loss of relative status is painful, no doubt. But it is the inescapable price of equality. Trump has no cure. Nobody does.

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