Public Policy and Governance – Page 120

A Fair And Balanced Economy

I have seen a fair number of articles recently suggesting that–if elected–Biden should pattern his economic approach on that of FDR.

Historians tell us that FDR was no ideologue; to the contrary, he was pragmatic. When he assumed office, he was faced with an economic situation for which there were no obvious remedies, and as David Brooks recently reminded us,

New Dealers were willing to try anything that met the specific emergencies of the moment. There was a strong anti-ideological bias in the administration and a wanton willingness to experiment. For example, Roosevelt’s first instinct was to cut government spending in order to reduce the deficit, until he flipped, realizing that it wouldn’t work in a depression.

“I really do not know what the basic principle of the New Deal is,” one of his top advisers admitted. That pragmatism reassured the American people, who didn’t want a revolution; they wanted a recovery.

One of the things about Joe Biden that I personally find reassuring is precisely that lack of rigid ideology, and what I perceive as a willingness to respond to the challenges of the moment. Sometimes, a proper response will be ambitious, sometimes cautious.

It depends.

There are two very different approaches to economic policy displayed in the comments readers post to this blog. There are those who have a favored economic system that they insist is “the” answer to every problem, and there are those who– recognizing the ambiguities and complexities of economic life– have come to terms with the fact that neither capitalism nor socialism is a one-size-fits-all answer to what ails us. Both systems are subject to distortion and capture, and both are destructive when they operate in economic areas for which they are unsuited.

Every successful economy currently operating is a mixed economy. That includes Scandanavia, which on several measures has a more robust free market than the U.S. According to research from the World Happiness Report

What exactly makes Nordic citizens so exceptionally satisfied with their lives? This is the question that this chapter aims to answer. Through reviewing the existing studies, theories, and data behind the World Happiness Report, we find that the most prominent explanations include factors related to the quality of institutions, such as reliable and extensive welfare benefits, low corruption, and well-functioning democracy and state institutions. Furthermore, Nordic citizens experience a high sense of autonomy and freedom, as well as high levels of social trust towards each other, which play an important role in determining life satisfaction. On the other hand, we show that a few popular explanations for Nordic happiness such as the small population and homogeneity of the Nordic countries, and a few counterarguments against Nordic happiness such as the cold weather and the suicide rates, actually don’t seem to have much to do with Nordic happiness.

The benefits of a comprehensive welfare state–the “socialism” element–are well documented. A reliable “floor” gives citizens a basic sense of security that research tells us mitigates crime and conflict, among other things. Taxes are high (although not as much higher than ours as Americans think), but citizens get real value for that money–they save what Americans must pay for education and health care, for example.

As economists will confirm, other than their generous welfare states, the Nordic countries are mostly free market economies–in fact, they rank high on several indexes of economic freedom. Businesses are not run by the state, nor are their employment practices dictated by the government. (That isn’t to say that there isn’t reasonable regulation of Scandanavian markets–the sort of reasonable regulation that America has largely abandoned.)

The bottom line is that any successful economy must be a mixture of appropriately-regulated capitalism and judiciously socialized public goods.

As I have noted many times, in order to operate properly, a market requires a willing buyer and willing seller, both of whom can access all information relevant to the transaction. We “socialize” police and fire protection and infrastructure provision, among other things, because that description doesn’t fit those services. (It doesn’t fit medical care, either.) It does fit the production and purchase of consumer goods.

The challenge facing Joe Biden (and hopefully, a Democratic House and Senate) in the wake of the Trump administration’s destruction of both the economy and social trust, is to strengthen the social safety net and return a level playing field to a market that has been corrupted by crony capitalism.

That’s harder and more complicated than one-size-fits-all economic ideology. But properly implemented, it works.

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“Those People”

If there is any lesson to be learned from the current pandemic, it is that the U.S. population has suffered unnecessarily because we have stubbornly refused to do what every other modern Western nation has long done: provide universal health care.

Not only have we resisted any version of a single-payer system, we’ve thrown five million plus people off health insurance during this pandemic. And the “very stable genius”–our idiot President–has weighed in on a Supreme Court case challenging the Affordable Care Act, asking the Supreme Court to strike down a measure that provides health insurance to some twenty-three million Americans.

During a global pandemic.

So what accounts for America’s outlier status? For decades, the accepted answer to that question was some form of our individualism or our devotion to a market economy. But that excuse never really held water, because–as most of the world’s market economies understand–some areas of the economy are simply not suited to market transactions, which require a willing buyer and a willing seller, both of whom are in possession of all information relevant to the proposed transaction.

That clearly does not describe medical services.

The real answer–the real reason American government has been so unwilling to provide universal health coverage–is the same reason the rest of our social safety net is both inadequate and deliberately punitive, constructed to “weed out” anyone who can’t adequately demonstrate both need and moral worth.

I receive Paul Krugman’s newsletter (no URL of which I am aware) and awhile back, he addressed the real reason for our disinclination to offer medical care and basic sustenance to all our citizens:

Non-American friends sometimes ask me why the world’s richest major nation doesn’t have universal health care. The answer is race: we almost got universal coverage in 1947, but segregationists blocked it out of fear that it would lead to integrated hospitals (which Medicare actually did do in the 1960s.) Most of the states that have refused to expand Medicaid coverage under the Affordable Care Act, even though the federal government would bear the great bulk of the cost, are former slave states.

The Italian-American economist Alberto Alesina suddenly died on March 23; among his best work was a joint paper that examined the reasons America doesn’t have a European-style welfare state. The answer, documented at length, was racial division: in America, too many of us think of the beneficiaries of support as Those People, not like us.

There’s a significant body of social science research that confirms Alesina’s thesis.

Americans are finally grappling with the institutional racism that has distorted our society. Unlike the civil unrest of the 60s, we’ve seen significant white participation in the Black Lives Matter protests. There is finally widespread–although certainly not universal– acknowledgment of America’s “Original Sin.”

It is also finally dawning on the “chattering classes” that America’s social problems are interrelated–that the reason Grandma doesn’t have health insurance might have something to do with the fact that Grandpa and his friends have always believed they are intrinsically superior to “those people”–people who definitely don’t deserve access to services funded by Grandpa’s tax dollars.

They’re willing to forego health insurance and other benefits of a social safety net if that’s what it takes to ensure that “those people” can’t take advantage of them.

America: where we cut off our noses to spite our faces–and call it “freedom.”

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A Cure For Gerrymandering?

I recently received a provocative email from James Allison, a retired Professor of Psychology, suggesting an approach to the elimination of gerrymandering that I had never contemplated.

After noting the Supreme Court’s unconscionable refusal to find extreme gerrymandering a constitutional violation (ruling 5/4 that partisan gerrymandering was a “political question” best left to the political process!), Allison quoted a recent proposal for just such a political solution.

In a recent op-ed in the Washington Post, Lee Hamilton, William S. Cohen and Alton Frye served notice: Although partisan gerrymanders may lie beyond the reformist reach of federal courts, and beyond the conscience of gerrymandering statehouse legislators, they are well within the grasp of Congress (July 17, 2020). Specifically, the House can “refuse to seat a state delegation achieved through excessive gerrymandering.” They propose to gauge the amount of gerrymandering in terms of the difference between the number of districts won by each party and its share of the statewide popular vote. They take the example of North Carolina’s 2018 elections, where Republicans won 50% of the popular vote for House members, but 77% of the state’s 13 seats. And the gerrymandering authors of those maps came right out and confessed proudly that their motive was to guarantee their party’s supermajority control.

The constitutional basis for direct Congressional oversight is in Article 1, Section 5, which says that “each House shall be the judge of the Elections, Returns and Qualifications of its own Members.” It has been used, albeit rarely, to exclude representatives chosen under questionable election procedures. And it was used after the Civil War against state intimidation of black voters and unconstitutional election laws.

There are a couple of obvious problems with this solution. One of those– political abuse of the power to deny delegations a seat–can probably be prevented by carefully crafted legislation. The other, as Allison points out, is how a determination is made that extreme gerrymandering has occurred.

For a number of years, the lack of a reliable “standard”–that is, a tested and dependable method for determining that disproportionate results were attributable to partisan redistricting and not simply to the voting sentiments of constituents–was the Supreme Court’s excuse for not addressing the issue. In the most recent case, however, that excuse no longer applied; in Rucho v. Common Cause, the Court was supplied with statistical tests developed by scholars for just that purpose. One test–called the “efficiency gap” was based on a calculation of “wasted votes.” Wasted’ votes are those cast for a losing candidate or for a winning candidate beyond what he or she needed — divided by the total number of votes cast.

I personally prefer the tests developed by Sam Wang at Princeton. Be that as it may, there are now indisputably accurate statistical tests available to determine whether the number of votes cast translate fairly into the number of seats won.

Allison cites Robert X. Browning and Gary King, “Seats, Votes and Gerrymandering: Estimating Representation and Bias in State Legislative Redistricting.” Law and Policy, Vol. 9, No. 3, July, 1987 for the proposition that this approach to determining the fairness of electoral results isn’t new. I have personally done a fair amount of research into partisan redistricting, and written a couple of academic articles on the subject, and I can confirm the accuracy of this assertion.

The virtue of this approach, as Allison notes, is that– if adopted by Congress– its potential threat alone could create a powerful incentive toward nationwide redistricting reform.

If America truly cares about fair and equal representation–an open question in a country that makes it hard rather than easy to cast a ballot–this is an approach worth considering. It should be one more agenda item to be taken up by a (fingers crossed!) Democratic House and Senate.

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The Virus Is An Externality

Well, I see the “President” has restarted his pandemic “briefings,” and–wonder of wonders–said everyone should wear a mask. Whether that will convince any of the dangerous idiots who are refusing to do so (because “freedom”) remains to be seen.

My two favorite economists, Joseph Stiglitz and Paul Krugman, are both Nobel prizewinners. I find both to be logical and persuasive–and I’m sure that a great deal of their persuasive power is their ability to explain things clearly to non-economists, of whom I am definitely one. Krugman stepped up to the plate again in a recent column for the New York Times, in which he explained what is at stake in the mask controversy with an analogy to the economic concept of externalities.

Krugman notes that there are a number of possible reasons for rejecting the wearing of a mask.

Some of this is about insecure masculinity — people refusing to take the simplest, cheapest of precautions because they think it will make them look silly. Some of it is about culture wars: liberals wear masks, so I won’t. But a lot of it is about fetishization of individual choice.

Many things should be left up to the individual. I may not share your taste in music or want to do the same things you do with consenting adults, but such matters aren’t legitimately my business.

Other things, however, aren’t just about you. The question of whether or not to dump raw sewage into a public lake isn’t something that should be left up to individual choice. And going to a gym or refusing to wear a mask during a pandemic is exactly like dumping sewage into a lake: it’s behavior that may be convenient for the people who engage in it, but it puts others at risk.

The reference to “going to a gym” was prompted by the stubborn idiocy of Florida Governor Ron DeSantis. Krugman had opened his column with a discussion of Florida’s soaring Covid-19 case count, and the Governor’s culpability for that rise.

Florida has, of course, become a Covid-19 epicenter, with soaring case totals and a daily death toll now consistently exceeding that of the whole European Union, which has 20 times its population. But DeSantis won’t contemplate any rollback of the state’s obviously premature reopening; he even refuses to close venues that are perfect coronavirus incubators.

In particular, he insists on letting gyms — closed spaces full of people huffing and puffing — stay open. Why? Because “if you are in good shape you have a very low likelihood of ending up in a significant condition.”

As Krugman points out, this isn’t true–but the fact that healthy people can and do contract the virus is almost beside the point: gyms should be closed because the people we are trying to protect aren’t the people working out, but the people with whom they will come into contact. As he says, even gym rats have families, friends, and co-workers.

And that brings us back to externalities.

Unregulated free markets simply cannot solve the problem of externalities. Externalities are defined as costs imposed on non-consenting others, on people who have no say in the matter. Pollution is the classic example–the factory that dumps its waste in the local river in order to save the cost of proper disposal requires a government cleanup paid for with our tax dollars. Spreading a virus raises precisely the same set of issues yet, as Krugman notes, many conservatives seem unable or unwilling to grasp this simple point.

And they seem equally unwilling to grasp a related point — that there are some things that must be supplied through public policy rather than individual initiative. And the most important of these “public goods” is probably scientific knowledge.

The people who refuse to wear masks are clones of the lawbreakers willing to dump industrial waste into our rivers, and spew harmful chemicals into the air we all breathe.

The pandemic has simply allowed them to advertise what and who they are: self-centered and illogical ignoramuses polluting the environment we all must share.

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Every Day In Every Way

it gets worse and worse. It has even been suggested that this is a strategy: the reason so few of the administration’s scandals remain “front page” reports for long is that they are superseded on a daily basis by evidence of even more damaging corruption.

Just the other day, in an effort to distract from the growing numbers of pandemic cases and deaths, the White House staged an event to announce the continuing exploitation of the environment. A bright red crane was set up on the south lawn and was shown “lifting the weights of regulation” while “the burden of regulation” was shown weighing down a blue truck.

When Trump spoke, he said they had cut “25,000 pages of job-destroying regulations,” saved the oil industry and cut auto standards, making cars cheaper and also “better, they’ll be stronger, and they’ll be safer.”

But what pleases him the most is that he’s “brought back” incandescent lightbulbs and improved the shower experience: “We made it so dishwashers now have a lot more water, and in many places, in most places of the country, water is not a problem … it’s called rain.”

Trump’s fossil fuel cronies at the EPA and the Department of National Resources have done incalculable damage to the environment. At the Department of Justice, William Barr is busily upending longstanding policies in favor of the “unitary executive” theory beloved by radical rightwing lawyers and former Vice-President Dick Cheney.

As if Trump hadn’t done enough damage to America’s international reputation, his Secretary of State– Christian fundamentalist Mike Pompeo– is embarrassing us further.

Human rights advocates denounced as “dangerous” a draft report released Thursday by the U.S. State Department’s controversial Commission on Unalienable Rights that paints property rights and religious liberty as “foremost among the unalienable rights that government is established to secure” while casting doubt on other liberties, including reproductive freedom.

“Make no mistake: this report was not designed with principles of equality, justice, and rights in mind. Instead, it serves as another stepping stone in the White House’s radical, isolationist, anti-rights, anti-scientific, religious agenda,” Serra Sippel, president of the Center for Health and Gender Equity (CHANGE), said in a statement.

As those of you who follow such things know, Pompeo’s version of “religious liberty” is anything but the government neutrality required by the First Amendment’s religion clauses. If he had his way, the law would give all citizens the “liberty” to follow Evangelical Christian “moral” dictates. As Heather Cox Richardson described the document,

The report lays out a version of American history and human rights designed to appeal to the evangelicals who count Pompeo as their own. It begins by stating that the primary tradition “that formed the American spirit” was “Protestant Christianity… infused with the beautiful Biblical teachings that every human being is imbued with dignity and bears responsibilities toward fellow human beings, because each is made in the image of God.”

And don’t get me started on Betsy DeVos’ assault on the very idea of public education…

This broad-based attack on representative democracy and the common good isn’t just being enabled by Trump and his corrupt and incompetent cabinet.

Greatly assisting in the demolition of constitutional government is the Most Evil Man in America: Mitch McConnell.

Consumer and workers’ rights advocates are warning that new details of Senate Majority Leader Mitch McConnell’s plan to shield businesses from coronavirus-related lawsuits show just how far the Republican leader is willing to go to ensure corporations are not held accountable for endangering public health and safety.

“Congress must reject this dangerous proposal,” the National Employment Law Project said in response to a draft (pdf) of McConnell’s plan obtained by Politico and other outlets on Friday….

As the Associated Press reported, the Republican plan “offers a broad shield by requiring heightened pleading standards, stiffening burden-of-proof standards, and capping damages on awards. Employers would also be shielded from investigations by federal agencies.”

Every day, there’s a new report, making it virtually impossible to keep up with these assaults on the rule of law, fair play and what used to be considered basic American principles.

Assuming–as hopeful people must–a blue tsunami in November, I hope someone is figuring out what we can do to keep Trump and his “best people” from blowing up the world between November 3d and January 21st.

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