Category Archives: Public Policy and Governance

A New Year

I’ve long since abandoned the practice of partying on New Year’s Eve. For the past several years, my husband and I haven’t even made it to midnight to welcome the turnover to a new, as-yet-unspoiled year.

But that lack of a proper welcome doesn’t mean that the turn of the calendar page goes unnoticed or that it lacks significance. Actually, for us older folks with grandchildren in their early adulthoods, the portents are especially significant. What will the coming year tell us about the world those grandchildren will have to navigate?

For what it’s worth, I think the year 2024 is likely to be pivotal for the United States–and thus for the world order.

I know that we tend to see whatever it is we look for, and I’ll admit up front that I’m looking for good omens. Those omens are out there–offsetting, to some extent, the dark clouds of hate and fear that dominate the news cycle. The bad omens remain “front and center”–wars in Ukraine and the Middle East, the growth of populism worldwide and Christian Nationalism at home, the ability of a handful of Congressional buffoons to paralyze the federal government, and over it all, the persistent warming of the planet and the multiple threats to human civilization posed by climate change.

Then there’s the inconceivable (to me) persistence of support for a moronic, narcissistic madman–coupled with an equally mystifying lack of appreciation for a President who will go down in history (assuming we have a history) as a leader as consequential as FDR.

I’m not ignoring the storm clouds.

But history develops in cycles, and the transition from one cycle to another is typically chaotic and difficult. Various academic studies peg those social cycles at anything between 40 and 80 years. In the US, the last truly monumental social upheaval occurred in the tumultuous Sixties, triggering a reaction that elected Ronald Reagan and devotion to trickle-down economics, and winked at racism and other forms of bigotry and tribalism.

The Internet came along and connected all the malcontents–both those who found modernity, with its multiple ambiguities, unbearable, but also those of us who welcomed it. The Internet destroyed local newspapers, and provided us with the ability to choose the news we wanted to believe, adding to the chaos of social change.

Among the positive omens is the fact that local news is rebounding across the country.

The international effort to combat climate change is moving more slowly than we might like, but more substantively than we had any right to expect in an ever-quarreling world. There are fewer and fewer people who dispute the reality of climate change, and encouraging scientific and technological breakthroughs aimed at ameliorating it.

Medical science continues to advance. People are alive today who would never have made it to their current ages but for those advances, and efforts to stamp out historically devastating diseases in poorer countries are succeeding. (The refusal of ideologically-motivated, scientifically-ignorant individuals to be vaccinated against a pandemic was unfortunate for those individuals and their families, but has likely improved the health–and perhaps the genome– of the overall population.)

And there are multiple signs that a majority of Americans reject the racism and antisemitism and misogyny that still garner headlines. It’s true that the minority of haters is a lot larger than I would have guessed a few years ago, and they are certainly more active. But they are a minority.

Think about it: the demonstrations after the murder of George Floyd were multi-racial. The “Karen” memes on social media and the sharing and shaming of racist incidents captured by those ubiquitous phone cameras are evidence of widespread disapproval of bigotry. Increases in inter-racial and inter-religious marriages (and I would add, the rise of the “nones”) are signs of weakened barriers between members of the human family. Add too, majority approval of same-sex marriage, and the overwhelmingly negative reaction to the (unbelievably paternalistic) Dobbs decision.

The fact that calling a proposal “socialist” is no longer sufficient to defeat it, and the rise of new economic theories challenging free-market absolutism are signs of a growing recognition that–as I used to tell my students–issues are complicated and finding correct answers depends on facts and context.

There’s more, but here’s the thing: the upcoming year will be pivotal. It will tell us whether a determined minority, empowered by gerrymandering and unencumbered by intellect or ethics, will strip women of autonomy, put gays back in the closet, and return Blacks and Jews to second-class status.

My New Year’s Resolution is simple: I intend to work my butt off to defeat the White Nationalist cult that has taken over what used to be my political party.

I hope you’ll join me.

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Economic Propaganda

I will be the first to admit that my knowledge of economics is incredibly superficial. (Perhaps I’m being defensive, but I suspect that “superficial”–or even “non-existent” also describes the technical economic expertise of most of my fellow Americans.)

As I previously explained, my recent reading about Modern Monetary Theory was prompted by the gift of a book on the subject; that book then triggered some additional research. (Calling my google searches “research” might be a misnomer…) At any rate, I found an essay from The American Prospect to be both interesting and “on point.”

The article was authored by Nick Hanauer, whose ability to explain matters in accessible and understandable terms has made him one of my favorite economic pundits.

If the basic foundation of Modern Monetary Theory (MMT) is that it is most closely based upon reality–upon the way that American monetary and fiscal systems actually work–the Prospect article provides additional evidence that far too many pundits and economists continue to assess policy using economic frameworks that are no longer accurate.

As the subhead says, “The alleged science doesn’t match up to the real world.”

The article focuses upon six myths that continue to muddy the waters of economic analysis.

Americans have been hammered for decades with an economic message that amounts to this: When wealthy people like me gain even more wealth through tax cuts, deregulation, and policies that keep wages low, that leads to economic growth and benefits for everyone else in the economy. And equally, that investing in you, raising your wages, forgiving your debt, or helping your family would be bad—for you! This is the trickle-down way of thinking about economic cause and effect, and there can be no doubt that it has substantially contributed to the greatest upward transfer of wealth in the history of the world.

You would think that trying to sell such a disastrous outcome for the broad mass of citizens would be incredibly unpopular. No politician would outright say they want to shrink the middle class, make it harder to get by, or reward hard work less. No politician would outright say that rich people should get richer, while everyone else struggles to make a decent life.

But this message has been hidden under the confusing, technical-sounding, and often impenetrable language of economics. Many academic economists do important work trying to understand and improve the world. But most citizens’ experience of economics comes from hearing a story—a narrative that rationalizes who gets what and why. The people who benefit from trickle-down policy the most have deployed economists to work their magic to tell this story, and explain why there is no alternative to its scientific certitude.

Hanauer points out that no economic model can fully reflect the “extraordinary complexity of human markets.” Models are intended to provide decision-makers with a sense–an overview– of the likely impacts of a particular policy proposal. But the assumptions upon which these models are based will determine their predictions. In other words, if the assumptions are wrong, the models will also be wrong.

And these models are deeply and consistently wrong…The problem is that few people take the time to explain what these faulty assumptions are, why they all promote the worldview of the rich and powerful, and why they shouldn’t be treated as science but as a trickle-down fantasyland.

Hanauer proceeds to explain–at length, and in language that non-experts can understand– what is wrong with six of those underlying assumptions:

  • public investments will “crowd out” private investment, and are by definition less productive than private investments.
  • workers’ wages are a direct reflection of their productivity.
  • higher taxes on corporations and high-income people reduce growth and investment.
  • investing in poor people reduces economic activity, and that immigrants are less productive than domestic American workers.
  • ten-year budget horizons are adequate for analysis.
  • performance is measured by looking at GDP and revenue– rather than overall well-being.

As Hanauer concludes:

Until we build models that reflect how the economy really grows, our leaders and the media should eye models from mainstream economists with skepticism. Models trying to convey the effects of policy should reflect the basic understanding that when more people have more money, that’s good for business. We need models that understand the basic principle that when the economy grows from the middle out, that’s good for everyone, and when more people participate in the economy, their consumer demand drives job creation and sparks innovation. In other words, our economic models must reflect the world as it really is—not as it was portrayed in the trickle-down Econ 101 classrooms of the 20th century.

All available evidence supports living in the world as it really is.

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The Economy And The Evidence

Nick Hanauer has long advocated for economic policies buttressed by something called “evidence.” I first encountered him when he was pointing out that putting disposable income into the hands of the working class via a higher minimum wage actually strengthens economic performance and supports job creation, because–duh–manufacturers don’t hire people to make widgets that few people have the means to buy.

Hanauer recently addressed “Bidenomics.”

When President Joe Biden first promised to “grow the economy from the bottom up and the middle out” through public investments, empowering workers, and promoting competition, critics scornfully derided his agenda as “Bidenomics.” And when the president defiantly embraced this epithet by making it the economic centerpiece of his reelection campaign, even some allies questioned the wisdom of stamping his name on an economic recovery that is as misunderstood as it is strong. Despite record-low unemployment, rising real wages, strong GDP growth, and a rapid fall in the inflation rate to below both global and historical averages, only 36 percent of Americans say they approve of Biden’s handling of the economy. Given such weak approval numbers, “Bidenomics” might at first appear to be an ill-advised slogan for a reelection campaign.

But to dismiss Bidenomics as mere sloganeering is to miss the point: The Biden Revolution is real, and running on Bidenomics is key, not just to winning reelection, but to winning the battle to establish a new consensus over how to manage and build our economy in the decades ahead.

As Hanauer explains, a large and thriving middle class is the primary engine of economic growth. That’s the core proposition of Bidenomics– that prosperity grows from the bottom up and the middle out. It challenges Reagan and the GOP’s belief in “trickle-down.”

All available evidence supports Hanauer and Biden.

A recent article in The Atlantic examined the reluctance to trust that evidence. The article asked why America abandoned the greatest economy in history, and the subhead suggested potential explanations: “Was the country’s turn toward free-market fundamentalism driven by race, class, or something else? Yes.”

From the 1940s through the ’70s, sometimes called the New Deal era, U.S. law and policy were engineered to ensure strong unions, high taxes on the rich, huge public investments, and an expanding social safety net. Inequality shrank as the economy boomed. But by the end of that period, the economy was faltering, and voters turned against the postwar consensus. Ronald Reagan took office promising to restore growth by paring back government, slashing taxes on the rich and corporations, and gutting business regulations and antitrust enforcement. The idea, famously, was that a rising tide would lift all boats. Instead, inequality soared while living standards stagnated and life expectancy fell behind that of peer countries. No other advanced economy pivoted quite as sharply to free-market economics as the United States, and none experienced as sharp a reversal in income, mobility, and public-health trends as America did. Today, a child born in Norway or the United Kingdom has a far better chance of outearning their parents than one born in the U.S.

The rest of the article considers three theories for why America abandoned New Deal economics: white backlash to civil-rights legislation, the Democratic Party’s “cultural elitism,” and/or global crises beyond any political party’s control. It concluded that all of them played a role.

Whatever the reason, Americans seem to have a very hard time accepting the fact that “Bidenomics”–which harks back to New Deal principles–has produced an economy better than anyone predicted.

Yet the economy is ending the year in a remarkably better position than almost anyone on Wall Street or in mainstream economics had predicted, having bested just about all expectations time and again. Inflation has dropped to 3.1 percent, from a peak of 9.1. The unemployment rate is at a hot 3.7 percent, and the economy grew at a healthy clip in the most recent quarter. The Fed is probably finished hiking interest rates and is eyeing cuts next year. Financial markets are at or near all-time highs, and the S&P 500 could hit a new record this week, too.

The GOP demanded reductions in government spending. The White House disagreed, arguing that funding programs on infrastructure, domestic semiconductor production and clean energy would help inflation by expanding the economy’s productive capacity. The White House was right.

I’m currently reading a book on Modern Monetary Theory, which makes a point that Biden clearly understands: national budgets are nothing like household budgets, and failure to understand the difference leads to bad policy.

More on that book–and that theory– later….

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Jim Banks And The GOP War On Education…

In case you think I’ve been exaggerating about the Republicans making war on education…more evidence has emerged.

According to a report from CNBC, House Republicans have a long-term plan to strip so-called “elite” universities of government funding and federal student loan dollars.

The plan was communicated to a group of business leaders during a private Zoom call last Friday with Indiana’s MAGA Republican Congressman, Jim Banks.

“The hearing was the first step,” said Banks. “The second step is the investigation, the subpoenas, gathering all of the documents and the records,” he said. “Third, that’s when we defund these universities.”

A recording of the call was provided to CNBC by an attendee who requested anonymity in order to share a private conversation.

Banks’ frank description of lawmakers’ plans offers a previously unreported window into at least some members of Congress’ long-term goals with regards to at least two Ivy League universities and MIT, another elite college. House Education Committee chair, Rep. Virginia Foxx, R-N.C., said in an interview on NewsNation that the committee is also looking at Columbia and Cornell University.

Banks has also embraced the idea of taxing college endowments; he has endorsed a bill introduced by Senator J.D. Vance of Ohio that would impose a tax of 35% on college endowments worth over $10 billion.

The legislation has little chance of passing the current Democratic majority Senate, or of being signed into law by President Joe Biden. But if there is a Republican in the White House and a GOP-controlled Senate in 2025, the calculus could be very different.

As the article notes, the fallout from a bill like Vance’s wouldn’t be limited to Harvard, Penn and MIT. Yale, the University of Notre Dame, Columbia University, the University of Chicago and Duke University all have endowments worth more than $10 billion, and they use earnings from those endowment dollars to subsidize tuition and fees for students who otherwise could not afford to attend.

Furthermore, all universities–not just the elite ones– rely on significant federal funding,  because so many students pay their tuition via federal financial aid. That aid accounts for the lion’s share of federal dollars that go to colleges and universities.

In 2018, 65% of the $149 billion total in federal funds received by institutions of higher education went toward federal student aid. This covers scholarships, work-study and loans given to students for their educational expenses, according to USAFacts, a nonprofit site that collects government data.

Jim Banks–aka “Focus on the Family’s Man in Washington“–wants to be the next U.S. Senator from Indiana. During his tenure in the House, he has made most of his agenda very, very clear: a federal ban on abortion with no exceptions; no recognition of, or help for, trans children; no restrictions on gun ownership; no affirmative action or other recognition of the effects of racial disparities (he wants to ban DEI programs); no funding for Ukraine, and–as this last bit of news confirms– a constant war on education.

Jim Banks is a theocrat’s wet dream. A Hoosier version of Marjorie Taylor Greene. No wonder Donald Trump has endorsed him.

The voters of Indiana absolutely cannot send this specimen of Christian Nationalism to the Senate.

I have posted before about Marc Carmichael, who will be the Democratic nominee. Marc is the absolute antithesis of Jim Banks–a thoroughly nice person who actually wants to do the job and who supports policies that used to be considered mainstream: a woman’s right to control her own reproduction; sensible gun safety laws; rational immigration reform; support for public education; and many others. (You can check out his twelve priorities on his website.)

Even in Red Indiana, if voters know both candidates–if they know who they both are and what they both stand for, Marc Carmichael will be the next U.S. Senator from Indiana. The only impediment to getting that information out to the voters would be inadequate funding.  So once you’ve confirmed the accuracy of my descriptions of these candidates–please send Marc a contribution! (And tell all your friends and families.)

Progressive voters in Indiana have complained for years that the Democrats haven’t produced strong candidates willing and able to take on the GOP culture warriors. This year, they have nothing to complain about–Jennifer McCormick, running for Governor, is first-rate, and Destiny Wells, running against our embarrassing, ethically-challenged Attorney General Todd Rokita is equally excellent. The candidates they will face–no matter who emerges from the current GOP gubernatorial mudslinging contest–are all MAGA enthusiasts, and worse than substandard.

The time has come to overcome progressive defeatism, and prove that there really is more than corn in Indiana!

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Is The Internet A Common Carrier?

When we think of enterprises categorized as common carriers, we tend to think of those that transport–that “carry” passengers or goods for a fee, and that serve the general public. But the term applies to services other than transportation.

Pointing out that the Internet is a common carrier is critical to discussions of net neutrality, as Tom Wheeler–a former head of the FCC–has written in an article for the Brookings Institution.

As far back as England’s emergence from feudalism around 1500, there has been a common law concept that essential services have a “duty to deal.” The operator of the ferry across the river, for instance, could not favor one lord’s traffic over another’s; everyone had access, and everyone had to pay. When the telegraph was introduced in the United States 350 years later, the concept was applied to that new essential service. The Pacific Telegraph Act of 1860 provided, “messages received from any individual, company, or corporation, or from any telegraph lines connecting with this line at either of its termini, shall be impartially transmitted in the order of their reception.” When the telephone came along, the same concept was applied to it as a common carrier.

The Communications Act of 1934, under which the FCC operates today, established in Title II’s statutory language, “It shall be the duty of every common carrier engaged in interstate or foreign communication by wire or radio to furnish such communication service upon reasonable request therefor.” The Communications Act also established the concept that the actions of Title II carriers must be “just and reasonable.”

Wheeler says that today’s Internet Service Providers, or ISPs, want to be allowed to make their own rules– without any review as to whether those rules or their actions are “just and reasonable.”

The ongoing debate about net neutrality is usually focused on specific behaviors by ISPs–behaviors that privilege the delivery of messages that are financially beneficial to them, while slowing or even blocking those that aren’t.

As Wheeler reminds us, the term “net neutrality”– coined in 2003 by Columbia professor Tim Wu–should be understood as more expansive.

It was an innovative nomenclature that picked up on the ability of the ISPs to discriminate for their own economic advantage. Net neutrality became commonly described as whether the companies could create “fast lanes” and “slow lanes” for internet traffic. That such a problem was not hypothetical was demonstrated five years later when the Republican FCC fined Comcast for slowing the delivery of video content that could compete with cable channels.

But as Wheeler argues, limiting the conversation to blocking, throttling, and paid prioritization is misleading. The real issue pending before the FCC is “whether those that run the most powerful and pervasive platform in the history of the planet will be accountable for behaving in a “just and reasonable” manner.”

It is the conduct of the ISPs that is in question here. Because telephone companies were Title II common carriers, their behavior had to be just and reasonable. Those companies prospered under such responsibilities; as they have morphed into wired and wireless ISPs, there is no reasonable argument why they, as well as their new competitors from the cable companies, should not continue to have public interest obligations.

Don’t be misled by the all-too-convenient framing that net neutrality is all about blocking and throttling. The real issue is why such an important pathway on which so many Americans rely should be without a public interest requirement and appropriate oversight.

The public interest and the common good are two concepts that have lost considerable ground over the past few decades–and nowhere is the absence of those considerations more harmful than in the Wild West that is the current Internet. We can trace a majority of the political and social problems we face to the fragmented and un-policed  nature of the global information environment we inhabit. It’s ironic–and incredibly worrisome– that a platform invented to facilitate communication has morphed into a primary source of misinformation, conspiracy theories and algorithmic sorting.

The Communications Act of 1934–still in effect–established the  duty of “every common carrier engaged in interstate or foreign communication by wire or radio” to serve all comers “upon reasonable request.” The Act also established the rule cited by Wheeler, obliging such common carriers to act in ways that are “just and reasonable.”

According to Wheeler, the ISPs  want to continue to make their own rules without any review as to whether their actions pass the “just and reasonable” test.

Given the disproportionate impact on society of social media and internet platforms, imposing some oversight would seem to be “just and reasonable.”

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