Author Archives: Sheila

Proving Nick Hanauer Right

I have previously cited Nick Hanauer, the billionaire who has repeatedly pointed out that the belief–embraced by the GOP–that raising the minimum wage depresses job creation is a fallacy.

As Hanauer has emphasized, this economic theory has cause and effect backwards: jobs are created by demand. (If you aren’t selling your widgets, you aren’t hiring more people to produce greater numbers of them.) Pay workers a living wage, putting disposable income in the hands of people who hadn’t previously had any, and increased demand will boost both job creation and the economy.

I get an email newsletter from Axios, (link unavailable) and a recent one included a report on fast-food industry earnings that certainly seems to confirm Hanauer’s thesis.

Between the lines: The fast-food industry’s biggest tailwind is coming from a surprising source — the increased pay of low-wage workers.

After trailing higher-paid workers for years since the financial crisis, earnings for the bottom 25% of workers have been growing at a rate much faster than the national average, and weekly earnings for the bottom 10% of full-time workers have grown even faster, data shows.

Generally, rising wages would be seen as a negative for the industry, but coupled with stable gas prices, the increasing paychecks of low-wage workers means more money spent at fast-food and fast-casual restaurants.

Be smart: Goldman’s research team estimates 70% of the industry’s sales growth over the past 5 years can be explained by rising wages, lower gas prices and a boost from third-party apps like GrubHub and Uber Eats.

Traditional economic theory says that if I have to pay employee A more, I will have less money available and I will thus be unable to hire B.  That makes all kinds of sense–all else being equal. What real life tells us, however, is that all else isn’t equal. As the Axios report shows, the increase in buying power more than compensates for the increase in payroll.

You would think that a political party devoted to the theory that cutting taxes will  generate revenue sufficient to pay for those cuts would understand this.

The theories may be similar, but reality can be a cruel mistress: when the issue is raising the minimum wage, real-world outcomes demonstrate that Hanauer’s approach works, but when the issue is tax rates, the Republican approach– cutting taxes on rich people– doesn’t.

As Paul Krugman has written,

In late 2007 the Trump administration pushed through a large tax cut, whose key component was a drastic reduction in the tax rate on corporate profits. Although most economists were skeptical about claims that this would do wonders for economic growth, conservatives were ebullient. Lower tax rates, they claimed, would give American corporations the incentive to bring back trillions of dollars invested overseas, and foreign corporations a reason to invest huge sums in the U.S.

And Republican politicians bought this argument. Even Susan Collins, the most moderate Republican in the Senate (although that isn’t saying much) declared herself convinced that the tax cuts would pay for themselves.

Krugman followed those opening paragraphs with graphs and statistics demonstrating rather dramatically that the tax cuts did not pay for themselves.  Not even close.

For example,Krugman says

Business investment was 13.2 percent of G.D.P. before the tax cut went into effect. It’s now … 13.5 percent. That’s a rise of around 0.3 percentage points, or less than a tenth of what the tax-cut advocates predicted.

As a result of the GOP’s 2017 tax cuts, deficits and the national debt have ballooned. Republicans would have marched on Washington with pitchforks if debt levels this steep had been generated by a Democratic Administration.

Real-world evidence says: pay working people a living wage, and everyone benefits.

Give the rich a tax cut, they sock their savings away in a tax haven, and no one else benefits.

Comments

The New Censorship

One of the many causes of increased tribalism and chaos worldwide is the unprecedented nature of the information environment we inhabit. A quote from Yuval Noah Harari’s Homo Deus is instructive–

In the past, censorship worked by blocking the flow of information. In the twenty-first century, censorship works by flooding people with irrelevant information.

We are only dimly beginning to understand the nature of the threat posed by the mountains of “information” with which we are inundated. Various organizations are mounting efforts to fight that threat–to increase news literacy and control disinformation– with results that are thus far imperceptible.

The Brookings Institution has engaged in one of those efforts; it has a series on Cybersecurity and Election Interference, and in a recent report, offered four steps to “stop the spread of disinformation.” The linked report begins by making an important point about the actual targets of such disinformation.

The public discussion of disinformation often focuses on targeted candidates, without recognizing that disinformation actually targets voters. In the case of elections, actors both foreign and domestic are trying to influence whether or not you as an individual vote, and for whom to cast your ballot. The effort goes farther than elections: it is about the information on whether to vaccinate children or boycott the NFL. What started with foreign adversaries now includes domestic groups, all fighting for control over what you believe to be true.

The report also recognizes that the preservation of democratic and economic institutions in the digital era will ultimately depend on efforts to control disinformation by  government and the various platforms on which it is disseminated. Since the nature of the necessary action is not yet clear–so far as I can tell, we don’t have a clue how to accomplish this– Brookings says that the general public needs to make itself less susceptible, and its report offers four ways to accomplish that.

You’ll forgive me if I am skeptical of the ability/desire of most Americans to follow their advice, but for what it is worth, here are the steps they advocate:

Know your algorithm
Get to know your own social media feed and algorithm, because disinformation targets us based on our online behavior and our biases. Platforms cater information to you based on what you stop to read, engage with, and send to friends. This information is then accessible to advertisers and can be manipulated by those who know how to do so, in order to target you based on your past behavior. The result is we are only seeing information that an algorithm thinks we want to consume, which could be biased and distorted.

Retrain your newsfeed
Once you have gotten to know your algorithm, you can change it to start seeing other points of view. Repeatedly seek out reputable sources of information that typically cater to viewpoints different than your own, and begin to see that information occur in your newsfeed organically.

Scrutinize your news sources
Start consuming information from social media critically. Social media is more than a news digest—it is social, and it is media. We often scroll through passively, absorbing a combination of personal updates from friends and family—and if you are among the two-thirds of Americans who report consuming news on social media—you are passively scrolling through news stories as well. A more critical eye to the information in your feed and being able to look for key indicators of whether or not news is timely and accurate, such as the source and the publication date, is incredibly important.

Consider not sharing
Finally, think before you share. If you think that a “news” article seems too sensational or extreme to be true, it probably is. By not sharing, you are stopping the flow of disinformation and falsehoods from getting across to your friends and network. While the general public cannot be relied upon to solve this problem alone, it is imperative that we start doing our part to stop this phenomenon. It is time to stop waiting for someone to save us from disinformation, and to start saving ourselves.

All good advice. Why do I think the people who most need to follow it, won’t?

Comments

Maybe Government Shouldn’t Just “Get Out Of The Way”

A number of years ago, I read a book by a well-regarded libertarian academic, arguing against most government regulation. I don’t remember a great deal of it, but I do vividly recall his argument against the FAA’s assignment of air lanes (and actually, the agency’s very existence): he argued that the choice of airplane paths should be left to the airlines. Once a couple of planes collided midair and they got sued for big bucks, airline CEOs would get together to work out routes and ensure that it didn’t happen again.

Maybe I’m just a weenie, but I’d prefer not to be on one of those planes that collided.

I thought about that argument when I read the Sunday New York Times article attributing the two Boeing disasters to lax government regulation. Evidently, the officials charged with oversight allowed Boeing to “self-certify” the safety of many of its components and processes–as a result, regulators had never independently assessed the risks of the software known as MCAS when they approved the plane in 2017.

When you put the fox in charge of the henhouse…..

It has been an article of faith of the GOP that there is just too much government regulation–their default position is that most state intrusion into the marketplace is illegitimate and unnecessary. They seem unable to comprehend why government regulations were ever created.

Not long after the events that triggered the Great Recession, the New York Times ran a column by Edward Glaeser, in which he discussed the importance of both the public and private sectors in sustaining a workable market economy. Among his points:

Markets are built on both private entrepreneurs and public law enforcement. For centuries, investors have relied on courts to enforce contracts. Who would buy a company’s shares if the law didn’t impose a fiduciary duty on their issuer? Every person with a bank account in the United States relies on the government to protect his or her assets. Taxpayers also trust that the government can make the costs of overseeing the banking system reasonable.

So who failed? Certainly, the shenanigans on Wall Street remind us that capitalists are not angels, and that unchecked, their mischief can do much harm. But the point of financial market regulation was to ensure that misbehavior would not imperil the entire system.

Are some regulations onerous? Stupid? Unneeded? Sure. But even bigger problems emerge from inadequate regulation and/or enforcement.

Glaeser was writing about the importance of government’s role in financial oversight, an issue that Elizabeth Warren has consistently raised. It takes only a short walk down memory lane to remind us of numerous others.

The BP oil spill in the Gulf has been attributed to inadequate inspections of drilling machinery; the collapse of the I35W bridge was attributed to deficient government infrastructure inspections; the mine collapse in West Virginia occurred because regulators failed to cite and punish the owner for refusing to install required safety equipment; the Enron, Worldcon and Madoff scandals were enabled by a lax SEC.

As a consequences of such inadequate oversight, thousands of people were harmed. Hundreds died.

We rely upon the Food and Drug Administration to ensure that our medications are safe and effective, our chickens free of e coli. (As I tell my students when we discuss regulatory processes, I’d just as soon not have to test the chicken I buy in the supermarket myself when I get it home.)

We rely on the Consumer Product Safety Commission to ensure that the toys we buy our children are free from toxic paint and dangerous parts.

We rely on the FAA to independently inspect the aircraft we fly in, and to regulate those flight paths so that we don’t meet midair.

Caveat emptor is no substitute for competent government oversight–and right now, Americans do not have a competent government.

Comments

Doubling Down On Racism

Lest you dismiss Donald Trump’s racist history as unfortunate but irrelevant to the need to highlight the damage his policies are doing to the environment, to education, to working people, etc.–allow me to highlight the most recent evidence that he intends to make 2020 a referendum on white nationalism.

As the Washington Post reported,

President Trump ranted Saturday morning on Twitter about an African American lawmaker by disparaging the Baltimore district that Rep. Elijah E. Cummings (Md.) represents as a “disgusting, rat and rodent infested mess.”

As chairman of the House Oversight and Reform Committee, Cummings has initiated most of the investigations into the Trump administration’s operations and policies, including recently the reports of inhumane treatment at migrant detention centers.

Trump apparently got his “information” about Cummings’ district from Fox and Friends (too bad he doesn’t pay attention to briefings from administration officials who presumably know what they are talking about, but as has been widely reported, he prefers to rely on Faux News and his “stable genius” gut.)

Trump’s attack on Cummings is reminiscent of his recent racist attacks on four minority congresswomen who he said should “go back” to the “crime infested” places they were originally from and fix them before trying to improve America. All four women are U.S. citizens, and only one was born abroad.

Trump’s language was, as usual, inflammatory, ignorant and inaccurate. (Also as usual, ungrammatical.)

 . . As proven last week during a congressional tour, the Border is clean, efficient & well run, just very crowded. Cumming District is a disgusting, rat and rodent infested mess. If he spent more time in Baltimore, maybe he could help clean up this very dangerous & filthy place.

Why is so much money sent to the Elijah Cummings district when it is considered the worst run and most dangerous anywhere in the United States. No human being would want to live there. Where is all this money going? How much is stolen? Investigate this corrupt mess immediately!”

Trump is incapable of participating in an evidence-based discussion or policy debate. His “go to” response is always ad hominem–an attack on the person with whom he disagrees. That said, as Americans turn their attention to the 2020 election, he has ramped up his attacks on people of color.

What about his contention that “no human” would want to live in Cummings’ district?

Baltimore is the third most dangerous city in the country behind Detroit and St. Louis, according to the FBI’s 2017 crime report. But Maryland’s 7th district, which Cummings has represented since 1996, includes about half of Baltimore city and has a median household income of around $60,000 and a higher percentage of college graduates than the country as a whole.

Baltimore Mayor Bernard C. Young released a statement defending both Cummings and his city, calling the president a “disappointment to the people of Baltimore, our country and to the world.”

“It’s completely unacceptable for the political leader of our country to denigrate a vibrant American City like Baltimore, and to viciously attack U.S. Representative Elijah Cummings, a patriot and a hero,” he said. “Mr. Trump’s rhetoric is hurtful and dangerous to the people he’s sworn to represent.”

Trump’s language in the tweet was instructive: CNN’s Victor Blackwell pointed out that Trump has often used the word “infested” to refer to places where black and brown people live. (It was also a word Hitler routinely used about Jews.)

Perhaps the best response to this profoundly unPresidential exhibit was an editorial in the Baltimore Sun. It’s uniformly great, but my favorite paragraph is the last one:

Finally, while we would not sink to name-calling in the Trumpian manner — or ruefully point out that he failed to spell the congressman’s name correctly (it’s Cummings, not Cumming) — we would tell the most dishonest man to ever occupy the Oval Office, the mocker of war heroes, the gleeful grabber of women’s private parts, the serial bankrupter of businesses, the useful idiot of Vladimir Putin and the guy who insisted there are “good people” among murderous neo-Nazis that he’s still not fooling most Americans into believing he’s even slightly competent in his current post. Or that he possesses a scintilla of integrity. Better to have some vermin living in your neighborhood than to be one.

Or as Sen. Chris Van Hollen (D-Md.), who served in the House alongside Cummings for many years, put it:

“Elijah Cummings grew up facing racist bullies like Trump and learned to confront them with qualities unknown to Trump: courage and integrity,” Van Hollen wrote. “The great people of Baltimore have something Trump craves but will never have as he degrades the Office of the President: dignity.”

We’re going to hear more from the racist incompetent as November of 2020 approaches, and–like these recent examples–it won’t be the usual GOP dog whistles. Trump wants 2020 to be a referendum on white nationalism because he thinks most Americans are racists who agree with him that a “great” America is a White America.

Pick your torch, and prove him wrong.

Comments

America: Pick A Torch

It’s impossible to read a newspaper without encountering a solemn “analysis” of what the Democrats absolutely must do in order to defeat Donald Trump in 2020.

Meanwhile, it becomes clearer every day that–stripped to its essence– the 2020 election will be about one overarching issue: what kind of country do we want to be?

A widely shared visual summed it up nicely with two photographs, side by side. One was a picture of Neo-Nazis with their tiki torches in Charlottesville; the second was a photo of the Statue of Liberty, focused on her torch. The caption asked “which torch will you choose?”

I rarely visit Twitter, but a friend directed me to a thread directly relevant to that question. 

The author was Tim Wise, a political consultant who was involved in two Louisiana campaigns against David Duke. Wise dismissed the handwringing, trolling and well-meaning advice being heaped on the Democrats.

If the Dems blow this election it will not be because they were “too far left on policy” or because they “weren’t left enough.” It will have little to do with policy at all. They are making a mistake caused by traditional consultant theory that does not apply here…

And by listening to influential pundits in liberal media who also don’t get the unique nature of Trumpism, relative to normal political movements & campaigns…this election is NOT going to be won by talking about all your “great plans” for health care, jobs, education, etc..

 And the reasons are several…Let me begin by saying that I have experience confronting the kind of phenomenon we see in Trumpism, and far more than most. Any of us who were involved in the fight against David Duke in LA in 90/91 know what this is and how it must be fought…

Wise then relayed his experience with campaigns against Duke. Political consultants warned against highlighting Duke’s racism; they said such a focus would play into Duke’s hands, and allow him to set the agenda.

Sound familiar?

In the Senate contest, the campaign followed mainstream advice not to “make a big deal” out of Duke’s racist appeals. To the extent they went negative, they talked about Duke paying his taxes late and avoiding service in Vietnam. They won, but very narrowly.

Wise regrets that approach because it normalized Duke. Attacking his bill paying habits or inadequate policy proposals “treated him like a normal candidate. But he was/is a NAZI…”

And none of his voters were voting 4 him bc of jobs, or tax policy or support for term limits, etc. And none were going to turn on him over late tax payments, Vietnam, etc. Indeed throwing that stuff out there & downplaying the elephant in the room (racism) seemed desperate..

It allowed people to say “well if he’s really this racist, white supremacist, why are they talking about all this other stuff?” It actually undermined our ability to paint him as the extremist he was/is. And as a result, the threat he posed was not clear enough to voters…

 And this didn’t just allow him to get votes he might not have gotten otherwise; it also depressed turnout among people who almost certainly disliked him but didn’t think he could win or would be all that big a deal if he did. In fact I recall convos with “liberals”…

Who said they weren’t going 2 vote bc after all Duke’s Dem opponent was just a shill for the oil and gas industry, and that was just as bad, blah blah fucking blah…because some lefties can’t tell the difference between corporatist assholes and actual literal Nazis…

 But we bore some responsibility for that because we got suckered into playing this conventional game and “not playing into his narrative.” Anyway, black and white liberal turnout is lower than it should have been and Duke gets 44% of vote…

In the Governor’s race we dispensed w/all that bullshit. We talked about Duke’s ongoing Nazism and the moral/practical evil of his racist appeals. We discussed how that moral evil would have real world consequences (driving tourists and business away, rightly so, from LA)..

Because it was wrong, and it was not who we wanted to be, and it was not who we were. We were better than that and needed to show the rest of the country that…

Now, did this flip any of Duke’s 1990 voters? Nah, not really. Indeed he got 65k MORE votes in the Governor’s race than the Senate race. But it was never about flipping them. We knew that would be almost impossible…

To flip Duke voters would require that they accept the fact that they had previously voted for a monster, and people are loath to do that. Our goal was not to flip them, but to DRIVE UP TURNOUT among the good folks, many of whom stayed home in 90…

And that is what happened. The concerted effort of the anti-Duke forces (not just us), challenging Duke’s “politics of prejudice,” and making the election about what kind of state we wanted to be, drove turnout through the roof…

When it was over, Duke had gotten 65k more votes than in 90, but his white share went to 55 (from 60) and overall to 39 (from 44) because the anti-Duke turnout swamped him…So what does this have to do with 2020 and Trump? Do I really need to explain it?…

First, trying to flip Trump voters is a waste of time. Any of them who regret their vote don’t need to be pandered to. They’ll do the right thing. Don’t focus on them. That said, very few will regret their vote. They cannot accept they voted for a monster or got suckered…

Duke retained 94% of the folks he got the first time out (and got new people too), as Trump likely will. So forget these people–or at least don’t wast time tailoring messages to them. And policy plans for affordable college don’t mean shit to them, nor health care…

Their support for Trump was never about policy. It was about the bigotry, the fact that he hates who they hate…

Wise is right. Much as we might wish it were otherwise, in 2020, America will choose a torch. Pray it’s the right one.

Comments