An Epistemic Crisis

Epistemology is the study of knowledge, justification, and the rationality of belief. Epistemic may not be a word we commonly use, but I think it was entirely appropriate in this Vox headline: “With Impeachment, America’s Epistemic Crisis has Arrived.”

The Vox article focuses on what it calls a “stress test,” and considers whether the right can shield itself from “plain facts in plain sight.”

Unlike Mueller’s report, the story behind the impeachment case is relatively simple: Congress approved military aid for Ukraine, but Trump withheld it as part of a sustained campaign to pressure Ukraine into launching an investigation of his political rival Joe Biden’s family. There’s a record of him doing it. There are multiple credible witnesses to the phone call and larger campaign. Several Trump allies and administration officials have admitted to it on camera. Trump himself admitted to it on the White House lawn.

It’s just very, very obvious that he did it. It’s very obvious he and his associates don’t think there’s anything wrong with it. And it’s very obvious there is something wrong with it. Holding US foreign policy hostage to personal political favors is straightforward abuse of power, precisely the sort of thing the Founders had in mind when they wrote impeachment into the Constitution.

It’s a clearly impeachable pattern of action, documented and attested to by multiple witnesses, confessed to multiple times, in violation of longstanding political precedent and a moral consensus that was, until 2016, universal. Compared to Mueller, that is a much more difficult test of the right’s ability to obscure, distract, and polarize.

The article asks the question that all sane, “reality-based” Americans have been asking ourselves: Can the right-wing propaganda machine successfully keep the right-wing base believing an alternate reality–at least long enough to get through the next election?

Earlier in 2017, I told the story of Donald Trump and the rise of tribal epistemology. Epistemology is the branch of philosophy that has to do with knowing and coming to know things — what counts as true, what counts as evidence, how we accumulate knowledge, and the like. It’s where you find schools of thought like skepticism (we can’t truly know anything) and realism (the universe contains observer-independent facts we can come to know).

Tribal epistemology, as I see it, is when tribalism comes to systematically subordinate epistemological principles.

When tribal interests overwhelm standards of evidence and internal coherence,  what is seen as “good for our tribe” becomes the primary determinant of what is true. Who is “part of our tribe” becomes the test of who to trust.

A decades-long effort on the right has resulted in a parallel set of institutions meant to encourage tribal epistemology. They mimic the form of mainstream media, think tanks, and the academy, but without the restraint of transpartisan principles. They are designed to advance the interests of the right, to tell stories and produce facts that support the tribe. That is the ultimate goal; the rhetoric and formalisms of critical thinking are retrofit around it.

It began with talk radio and Fox, but grew into an entire ecosystem that is constantly working to shape the worldview of its white suburban/rural audiences, who are being primed for what the author calls “a forever war with The Libs, who are always just on the verge of destroying America.”

The article is lengthy and well worth reading in its entirety, but the following paragraphs graphically describe what that “epistemic crisis” will look like over the next year:

This is the story of American politics: a narrowly divided nation, with raw numbers on the side of the rising demographics in the left coalition but intensity and outsized political power on the side of the right coalition. Put in more practical terms, the right still has the votes and the cohesion to prevent a Senate impeachment conviction.

On the downslope of a fading, unpopular coalition is not a great place for Republicans to be. It doesn’t augur well for their post-2020 health as a party. But it is enough to get them through the next election, which is about as far ahead as they look these days.

All they need to do is to keep that close partisan split frozen in place. Above all, they need to ensure that nothing breaks through to the masses in the mushy middle, who are mostly disengaged from politics. They need to make sure no clear consensus forms, nothing that might find its way into pop culture, the way the entire nation eventually focused its attention on Nixon’s impeachment.

It’s a kind of magic trick they’re going to try to pull off in full view.

If it succeeds, reality and America both lose.

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Minimum Wage And The Real World

There is evidently a lively argument about who authored the much-quoted observation “It Ain’t What You Don’t Know That Gets You Into Trouble. It’s What You Know for Sure That Just Ain’t So.”

The quotation has been attributed to Mark Twain and Will Rogers, among others, but whatever the source and however folksy the articulation, it counts as real wisdom.

I thought about that very human tendency to cling to verities that “we know for sure” are so when I came across some recent research into the consequences of raising the minimum wage, because for a long time, I was convinced by the (very logical, very persuasive) argument that raising wages would depress job creation.

It turns out there was a logical fallacy in the formulation of the argument that, if employer  had to pay his current employees more, he would have less money available to hire additional workers. That actually would be true–all else being equal.  Those of us who accepted the formulation–including your truly–didn’t realize how much else wasn’t equal.

In the real world, putting more money in the pockets of people who don’t have much disposable income actually increases demand and boosts economic growth.

When something they’ve believed turns out to be wrong, reasonable people change their minds. There’s a difference, however, between ideology and a mistaken belief–ideology is stubborn. It rejects contrary evidence, no matter how convincing.

With respect to minimum wage rates, a number of previous, peer-reviewed academic studies have found little to no impact on hiring as states and municipalities have raised the  wage, casting doubt on the “wage hikes will kill jobs” mantra, but the number of states that have recently raised their minimum wage allowed these recent researchers to draw broader conclusions.

Eighteen states rang in 2019 with minimum wage increases — some that will ultimately rise as high as $15 an hour — and so far, opponents’ dire predictions of job losses have not come true.

What it means: The data paint a clear picture: Higher minimum wage requirements haven’t reduced hiring in low-wage industries or overall.

State of play: Opponents have long argued that raising the minimum wage will cause workers to lose their jobs and prompt fast food chains (and other stores) to raise prices. But job losses and price hikes haven’t been pronounced in the aftermath of a recent wave of city and state wage-boost laws.

And more economists are arguing that the link between minimum wage hikes and job losses was more hype than science.

What we’re hearing: “The minimum wage increase is not showing the detrimental effects people once would’ve predicted,” Diane Swonk, chief economist at international accounting firm Grant Thornton, tells Axios.

“A lot of what we’re seeing in politics is old economic ideology, not what economics is telling us today.”

The doom-and-gloom that opponents have predicted, “are part of the political policy debate,” Jeffrey Clemens, an economics professor at UC San Diego, tells Axios.

His research for the conservative American Enterprise Institute is often quoted in arguments against minimum wage increases.

But Clemens told Axios: “People will tend to make the most extreme argument that suits their policy preferences, and it’s not surprising if that ends up being out of whack with the way things unfold on the ground.”

As part of the study, researchers used Bureau of Labor Statistics data to compare the rate of  job growth in four states with low minimum wages against the rate in eight states with high minimum wages. All 12 states saw growth in restaurant, bar and hotel jobs.
Four states had job growth higher than the U.S. median, and three of them have raised their state’s minimum wage; three of the five states having the slowest job growth kept their wage at the federal minimum of $7.25 an hour.

The bottom line: Opposition to higher minimum wage laws is increasingly based in ideology and orthodoxy rather than real-world evidence, economists say.

The evidence says I used to believe something that just wasn’t so. Given that evidence, I don’t believe it any more.

That isn’t so hard, is it?

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A Short Post For A Long Day

Thanksgiving is my favorite holiday, but it tends to be a long day–both for those of us having family over, and for people traveling across town or across country to be with  family and friends.

What I love about Thanksgiving–aside from having my nuclear and extended family around the table–is that it requires us to focus on how fortunate most of us are. And we are fortunate. No one’s life is perfect, but whatever deficits we’ve racked up, in my family we have our health, food to eat, homes to sleep in, supportive friends and people to love. So it’s good.

When we look beyond our personal situations, of course, it’s a different story.

It’s one thing to recognize my own blessings; it’s another to look at a world in which unrest and White Nationalism are growing, or to follow reports of  the daily damage that Trump is inflicting on America.  I worry constantly about the social, economic and environmental challenges my grandchildren will face.

If we work hard and are very lucky, next Thanksgiving we will be grateful for the electoral defeat of Trumpworld– grateful for confirmation that good Americans outnumber the racists in his cult. (If we aren’t lucky, we can kiss the America I’ve believed in goodbye.) We shall see what the next year brings.

In the meantime, let me share some things for which I am immensely grateful:

  • The readers of this blog, including but absolutely not limited to those who take the time and trouble to comment. It really helps to know that others share my angst.
  • The fact that no one who will be at my Thanksgiving table is a Trump supporter–or even close. (I told you I have a wonderful family.)
  • For my awesome students, who constantly demonstrate inclusiveness and concern for community and fundamental fairness–I’d turn the country over to them right now.
  • And for a husband and family who put up with me….

To all of you: happy turkey day. We can return to the disaster that is our federal government tomorrow.

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Measuring Up

I’ve become increasingly fascinated by our human obsession with measurement, and the ways in which measuring something affects–and often distorts–our ability to understand it.

There’s polling, of course, for the political among us. Despite the admonitions of the pollsters themselves, we far too often see the “snapshots” they provide– not to mention the selected populations they quiz and the often-ambiguous questions they ask–as descriptive of the whole of America’s electorate and thus predictive of the future.

In education, legislators have embraced subject-matter testing without considering the way it distorts what happens in the classroom. Subjects that will be tested get extra time and attention; subjects that are of equal (or often superior) importance, like civics, get short shrift because they aren’t tested. (And don’t get me started on the mistaken belief that students’ test rresults measure teacher competence…)

Scientists know that the very act of testing something  can change the results. Scholars also remind us that drawing unwarranted conclusions from what we have chosen to test can lead us astray. Which brings me to a Guardian column by Joseph Stiglitz, one of my favorite economists.

The world is facing three existential crises: a climate crisis, an inequality crisis and a crisis in democracy. Will we be able to prosper within our planetary boundaries? Can a modern economy deliver shared prosperity? And can democracies thrive if our economies fail to deliver shared prosperity? These are critical questions, yet the accepted ways by which we measure economic performance give absolutely no hint that we might be facing a problem. Each of these crises has reinforced the fact that we need better tools to assess economic performance and social progress.

Stiglitz proceeds to point out problems with relying on GDP–long the standard measure of economic performance–to measure a country’s economic performance. (GDP is the sum of the value of goods and services produced within a country over a given period.)

As Stiglitz notes, GDP metrics don’t fully reflect impacts of things like Europe’s austerity measures on long-term standards of living.

Nor do our standard GDP measures provide us with the guidance we need to address the inequality crisis. So what if GDP goes up, if most citizens are worse off? In the first three years of the so-called recovery from the financial crisis, about 91% of the gains went to the top 1%. No wonder that many people doubted the claims of politicians who were then saying the economy was well on the way to a robust recovery.

For a long time I have been concerned with this problem – the gap between what our metrics show and what they need to show. During the Clinton administration, when I served as a member and then chairman of the Council of Economic Advisers, I grew increasingly worried about how our main economic measures failed to take into account environmental degradation and resource depletion. If our economy seems to be growing but that growth is not sustainable because we are destroying the environment and using up scarce natural resources, our statistics should warn us. But because GDP didn’t include resource depletion and environmental degradation, we typically get an excessively rosy picture.

In other words, Stiglitz is telling us that there is something fundamentally wrong with how we measure economic performance and social progress.

Getting the measure right – or at least a lot better – is crucially important, especially in our metrics- and performance-oriented society. If we measure the wrong thing, we will do the wrong thing. If our measures tell us everything is fine when it really isn’t, we will be complacent.

A recent article in Time suggests that other nations are coming around to Stiglitz’ view.

New Zealand became the first nation to formally drop gross domestic product (GDP) as its main measure of economic success. The government of Prime Minister Jacinda Ardern said the budget would aim not at maximizing GDP but instead at maximizing well-being.

Apart from schools, hospitals and roads, whose budgets would be allocated in the normal way, resources would be distributed according to their impact on five government priorities: mental health, child well-being, the inequalities of indigenous people, building a nation adapted to the digital age and fashioning a low-emission economy.

Shades of Bhutan’s “Gross National Happiness” index!

Stiglitz says it is now possible to construct much more accurate measures of an economy’s health.. I think it is fair to say that we should adopt those measures–but only after we subject them to a rigorous analysis to assure ourselves that the elements being measured are the ones that should be measured, the ones that will give us a more accurate understanding of ecological and economic (and inevitably social and political) reality.

What we choose to measure will tell us what we really value.

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All Cost, No Benefit

Every city of any size, and every state, has a government agency charged with “economic development.” Economic development is almost always a euphemism for luring new employers to the city or state.

A productive discussion about what a genuine effort to improve the local economy should and should not entail is considerably overdue. Such a re-examination remains unlikely, but here and there, investigations of current practices do remind us that not everything we call an “incentive” deserves the name.

Which brings us to Wisconsin, Scott Walker and Foxcomm. A report from the Brookings Institution recently described that embarrassing boondoggle:

In 2017, the state of Wisconsin agreed to provide $4 billion in state and local tax incentives to the electronics manufacturing giant Foxconn. In return, the Taiwan-based company promised to build a new manufacturing plant in the state for flat-screen television displays and the subsequent creation of 13,000 new jobs.

It didn’t happen. Those 13,000 jobs never materialized, and plans for the manufacturing plant have been consistently scaled back. Even if the project had gone through as planned, there is no way the Foxconn subsidy would have made money for the state, or provided earnings benefits for residents that exceed its costs. It now appears that few of Foxconn’s promises will be fulfilled, even though local governments have gone into debt over the project.

The Foxcomm “deal” was widely panned at the time, but as Brookings reports, criticisms of that effort were mostly based on the enormous size of the incentives being offered, not on the underlying concept. But since 1990, even the average size of these business incentives has tripled, threatening public services and the social safety net.

Even when the incentive being offered is comparatively modest, however, research doesn’t confirm the underlying assumptions of the approach. At least 75% of the time, the incentives don’t really affect the relocation decision one way or the other.

They’re all cost and no benefit. Furthermore, even when incentives do tip a location decision, they do not pay for themselves. They may create new jobs, but frequently they also bring in new workers from outside the city or state, which raises costs to public services that offset at least 90% of any increased revenue…On average, only 10-30% of new jobs go to state residents who are not already employed.

Are there incentives that would work? Brookings says there are, and offers the following checklist:

Do the incentives target the right businesses?

Will the business provide multiplier effects? When the business buys from local suppliers, it helps increase jobs at those companies. Workers employed at the business, too, will buy from local retailers, increasing those jobs.

Is the business “traded”—i.e., selling its goods and services outside of the state or community? Incentives to non-tradeable firms will just displace jobs at other local non-tradable firms.

Is the real job multiplier accurately calculated? Multipliers can be overstated if they ignore the increased local costs that accompany business growth.

Is the business locally owned? Locally owned firms spend more of their revenue locally, benefiting the hometown economy.

Do the incentives target the right areas?

Incentives should target economically distressed local areas, with more available labor that is not employed. That way, the share of new jobs that go to local residents can be two to three times as great, compared to already-booming areas.

Do the incentives target high-tech businesses in an area with an above-average high-tech base? High-tech businesses have additional multiplier effects because they support and spawn other local firms whose workers and ideas flow from one to another. But this only works when the area has a sufficiently large “cluster” of tech firms to build from.

Are they the right type of incentives?

Are they structured so cash incentives occur upfront? Upfront incentives are more cost-effective in affecting business location decisions, because they are more relevant to business decisionmakers who focus on the short term.

Do they include enticements/requirements to hire locally? For example, customized training programs can encourage firms to hire the local unemployed.
Do they include a healthy share of customized businesses services, or is it all cash giveaways? Business services such as job training, business advice to smaller businesses, and new transportation infrastructure can have job creation effects per dollar that are five to 10 times greater than tax or cash incentives.

Do the incentives avoid robbing Peter to pay Paul? If governments pay for incentives by decreasing public spending on education, training, or infrastructure, the negative economic development effects of those budget cuts may exceed any benefits from the incentives.

Finally, is there a decent model to accurately assess the impact of the incentive?

There are practical ways to evaluate incentives. We can compare assisted with unassisted firms, or assisted areas with unassisted areas. There are good estimates of how many location decisions will be swayed by a cash incentive package of a particular size, and how many jobs per dollar will be created by a high-quality customized job training program. State and local government researchers can combine these evaluation approaches with models of local labor markets and fiscal impact to see whether a specific incentive package’s benefits are likely to exceed its costs.

Finding the right answer depends on asking the right questions–not on constantly sweetening the pot.

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