Public Policy and Governance – Page 298

This Blew My Mind

A former student–President of the Chamber of Commerce in his small Indiana town–sent me a link to this Ted Talk.

There are several “nits” one might pick, but it is a fascinating argument, and well worth the 20 minutes it takes to listen. At the very least, it’s a reproach to arrogant assumptions about the way others should live….

That said, it brings to mind an important point raised by Fareed Zakaria in his book The Future of Freedom: the issue is not democracy, it is liberty. Living under the tyranny of a majority is not appreciably different than living under the tyranny of an autocrat. There can be a wide variety of mechanisms for making decisions about governing. We should judge them not just by their effect on the material well-being of the governed, but by the degree to which they respect fundamental individual rights.

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Food Fights

Deconstructing the escalating battles over food is anything but simple.

We have critics and foodies like Michael Pollan counseling us to avoid eating anything our grandmothers wouldn’t have recognized as food. We have “food activists” insisting on labeling foods containing any ingredient that has been genetically modified. And we have Oscar-nominated films like “Food Inc.,” focusing upon the practices of the huge corporate farmers who have largely displaced the romanticized family farm. Those who have paid attention to the “natural food” movement (a cohort that would not include Paula Deen aficionados, or those cheering the return of the Twinkie) hardly know what they can safely eat.

I often quote my cousin the cardiologist, whose scientific expertise I respect. When Whole Foods announced that the company would be labeling genetically modified foods, he sent me an extensive tract, arguing that fear of GMs was ill-founded and the labeling movement dangerous. (You can read the whole thing here.)

As he pointed out, “genetic modifications” used to be called hybrids. Humans engaged in growing foods have spent generations selecting for desirable traits, and combining and propagating them. Historically, this has been a lengthy process. In many cases, genetic manipulation simply accelerates that process. (In other cases, however, the modifications may include the introduction of genes not native to that plant.)

He also points out that genetically modified plants promise to correct nutritional deficits in developing countries where the population depends primarily on a single foodstuff, like rice. Furthermore, the greater yields of modified crops keep many people in those countries from starvation. And it is true, as he notes, that foods derived from genetically modified crops have been consumed by hundreds of millions of people across the world for more than 15 years with no reported ill effects.

Or at least, ill effects that can be reliably connected to such crops.

It is probably obvious that I am less sanguine than my cousin; although I agree that most GM crops are no different from the hybrids farmers have long produced, I harbor some concerns–for which I admittedly have absolutely no evidence–about the long-term effects of those modifications that involve the introduction of “new” genes to a plant’s DNA. (Somehow, I don’t get a warm and fuzzy feeling when I hear that Montsano has modified seeds to withstand its pesticides….)

That said, I think the uproar about GMs distracts us from far more concrete dangers posed by factory farming.

For example, most of the beef produced in the United States has been fattened on corn, because corn is cheap, abundant, and allows cattle to come to the market in 12-14 months. In order for cattle to be raised on corn instead of grass, however, the cows have to be given antibiotics in feed, feminizing hormones, and often protein that comes from other animal parts. Even if you overlook the inhumane conditions that have been amply documented, the large-scale production of chickens and pigs involve similarly unnatural processes. Unlike the situation with GMs, there is substantial evidence that these practices pose health risks for consumers.

Another legitimate cause for concern is the increased and often indiscriminate use of pesticides that linger in our food, and that run off into our water supplies.

Unfortunately, the “food fights” we are engaged in tend to conflate these different issues, confusing consumers and policymakers alike.

What is “natural”? Breeding crops to be disease-resistant, or more nutritious, allows us to meet human needs. We’ve done that for generations, and so long as we don’t get carried away–so long as we don’t create new and strange “Frankenfoods,” we probably don’t have much to worry about. Medicating livestock with hormones and antibiotics so that they can be fed foods they did not evolve to eat, in order to fatten them more and more quickly, is much more troubling.

As with so many of the issues people fight about these days, it’s complex, and most of us lack the scientific knowledge to make sound judgments.We used to trust the FDA to ensure food safety, but thanks to over a quarter-century of being told that government can’t do anything right, we no longer trust anybody.

Welcome to the food fight!

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Who Are We?

Today is Sunday. And Father’s Day.

Believers who celebrate Sabbath on Sunday will go to church and hear exhortations about living a good and moral life. Depending upon the denomination, the focus will be on love and compassion, charity and social justice.

In most families, Fathers will receive sentimental greeting cards from their children thanking them for their patience and love and support. Some will get sweaters or ties or sporting gear; others will have a family dinner.

These Norman Rockwell experiences make us feel good about ourselves. We’re good people, family people, caring citizens.

So here is my question: how many Americans will go to work tomorrow for an employer who has cut his or her hours in order to avoid paying for health insurance? If we are to believe the media reports, it’s not an insignificant number.

At Indiana University, where I teach, there’s a new rule that Graduate Assistants–already poorly paid–cannot work more than 29 hours a week, because then they would be eligible for health insurance. The Indianapolis Star recently reported that several Indiana school districts were planning to cut back hours for many staff positions, so that they could avoid insuring the people in those positions. Private employers, of course, have been engaging in such practices for years, in order to avoid compliance with a number of regulations that apply only when employees work a certain number of hours.

This response to an effort–however flawed–to extend basic health services to people who currently can’t afford those services tells us something about our culture. And what it tells us isn’t consistent with that Norman Rockwell version of ourselves.

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Political Party Values

I got an email telling me that the Indiana Republican Party is holding a fundraiser to which I am invited. The featured speaker will be Wisconsin Governor Scott Walker, and whoever wrote the email clearly anticipated great excitement on the part of its recipients. Generally, when a political party highlights one of its own at such an event, it is because that person represents success as the party defines it.

So–how is Walker, who triggered some of the most acrimonious protests in Wisconsin history, performing?

Well, the latest data from the Federal Reserve Bank of Philadelphia paints a rather grim picture for Wisconsin under Governor Walker.

Not only is Wisconsin one of only five states whose economy is expected to contract over the next six months, but it’s 49th out of 50. Only Wyoming is worse. The state ranks 44th in private sector job growth, and 5th worst in wage erosion.

For a governor who bragged about stealing Illinois’ jobs after their the state to Wisconsin’s south raised taxes, it must be embarrassing that Illinois is far outpacing it economically. In fact, Illinois is projected to be in the top 10 over the next six months. (On the other hand, I have the impression that Scott Walker rarely allows reality to embarrass him–or even make contact.)

Interestingly, every state with a projected economic contraction in the study is headed by a Republican, and every one of the bottom 10 is GOP governed.

Given this level of performance, one might be forgiven for wondering why Walker was chosen to headline the Indiana GOP dinner. Might it be that today’s Republicans value sticking it to unions and public employees more than they value actual economic growth?

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Job Creators or a Tale of Two Big Boxes

There are job creators, and then there are job creators.

Debates about economic policies tend to center on concerns about job creation. Corporate CEOs often argue that raising tax rates or the minimum wage will suppress hiring. (I’ve often wondered why we can’t just offer a tax credit for each job created, rather than keeping rates low and hoping that will translate into additional employment. But I digress.)

The question that is too seldom addressed is: what kind of jobs do we want to incentivize? Because all jobs are not equal–not from the standpoint of the employee, and not from the standpoint of the taxpayer.

A recent study released by Congressional Democrats underlines the issue. According to that study, Walmart’s wages and benefits are so low that many of its employees are forced to turn to the government for aid, costing taxpayers between $900,000 and $1.75 million per store. As Mother Jones reports,

Walmart’s history of suppressing local wages and busting fledgling union efforts is common knowledge. But the Democrats’ new report used data from Wisconsin’s Medicaid program to quantify Walmart’s cost to taxpayers. The report cites a confluence of trends that have forced more workers to rely on safety-net programs: the depressed bargaining power of labor in a still struggling economy; a 97 year low in union enrollment; and the fact that the middle-wage jobs lost during the recession have been replaced by low-wage jobs. The problem of minimum-wage work isn’t confined to Walmart. But as the country’s largest low-wage employer, with about 1.4 million employees in the US—roughly 10 percent of the American retail workforce—Walmart’s policies are a driving force in keeping wages low.

Businesses do not have to be conducted this way. Good jobs that don’t require public support are not inconsistent with healthy profits. A recent Business Week article reports on the very different business approach taken by Walmart competitor Costco.

Despite the sagging economy and challenges to the industry, Costco pays its hourly workers an average of $20.89 an hour, not including overtime (vs. the minimum wage of $7.25 an hour). By comparison, Walmart said its average wage for full-time employees in the U.S. is $12.67 an hour, according to a letter it sent in April to activist Ralph Nader. Eighty-eight percent of Costco employees have company-sponsored health insurance; Walmart says that “more than half” of its do. Costco workers with coverage pay premiums that amount to less than 10 percent of the overall cost of their plans. It treats its employees well in the belief that a happier work environment will result in a more profitable company. “I just think people need to make a living wage with health benefits,” says Jelinek. “It also puts more money back into the economy and creates a healthier country. It’s really that simple.”

Despite its higher wages and more generous benefits, Costco nets more per square foot than Walmart.

I have increasing numbers of students who believe that all business enterprises are at worst evil and at best unconcerned with anything but the bottom line. They look at Walmart and the many businesses that emulate its rapacious approach; more recently they point to the employers who are cutting workers hours in order to avoid having to provide health insurance under the terms of the Affordable Care Act, and they note the huge disparities between the salaries of CEOs and their employees, and they see those behaviors as an inevitable result of market capitalism. It isn’t.

Costco and many, many other enterprises demonstrate that concern for workers’ welfare is entirely consistent with a healthy bottom line. The problem is not with our markets, it is with our culture, and with public policies that enable and reward despicable behaviors.

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