Eliminating Welfare

When I first became interested in economic policy, I found Milton Friedman’s advocacy of a “negative income tax” appealing. As I recall (and I read about it a long time ago), the idea was that people making more than a set amount–presumably, an amount sufficient to live on–would pay taxes, and those making less would receive a supplement bringing them up to sufficiency.

One virtue of such an approach would be to cut out the costs of the significant bureaucracy devoted to administering complicated systems of public assistance.

As I say, I read this a long time ago, and my recollection of the details is hazy at best. What brought it to mind was reading about a proposal currently under review in New Zealand.

New Zealand’s Labour Party is considering the concept of a basic “citizen’s wage.” Andrew Little, leader of the Labour Party, confirmed this as the result of the potential for higher unemployment in in the coming months and years. “Citizen’s income” is also known as Universal Basic Income (UBI). The idea is that everyone gets a basic amount of money to live off of, like a wage, and benefit systems are gotten rid of.

Switzerland and Finland have introduced similar systems.

I haven’t seen studies comparing the costs of such systems to the patchwork, cumbersome and demeaning welfare programs we currently administer, but I suspect a citizen’s wage would save considerable tax dollars.

Of course, I’m sure the very idea would raise howls of protest from the self-righteous legislators who want to punish people for being poor, and who seem to enjoy telling welfare recipients what they can buy at the grocery…

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Explaining Why “It Depends”

These days, commenting on public policy and the political environment is a mostly depressing slog through various bigotries, misunderstandings, inadequate communications—in a nutshell (and boy, sometimes it is a “nut” shell!), a hot mess.

When I look for an explanation, a common thread that might shed some light on the place we find ourselves, I keep coming back to the unsettled, fragmented and frequently unreliable sources from which Americans get our information, and the seeming loss of what we used to call the journalism of verification.

Obviously, the information landscape is not wholly responsible for all of our various crises of governance, but it sure is implicated in much of it.

The Brookings Institution recently issued a report on the importance of what it called “explanatory journalism.” After noting the wealth of information now available online, and the fact that the internet has enabled unprecedented access to millions of people who didn’t previously have such access.

The digital revolution has laid waste to the 20th century business models of news reporting and publication but even in these early days of the digital revolution, citizens seeking information about politicians, public policy, and government performance have resources never before imagined.

But that, of course, raises the pertinent question:

But how many such model citizens take advantage of these resources to exercise the popular sovereignty and democratic accountability at the core of our democracy? Most citizens are inadvertent consumers of news about politics and government, limited mostly to local television news dominated by crime, traffic and weather, with mere snippets of news related to public affairs, along with emails from family and friends forwarding materials that sound plausible but often are the opposite. Their lives are filled with responsibilities and interests that draw their attention away from election campaigns and policy battles. What little they know and learn about politics is often laden with misinformation and provides little basis for coming to public judgment beyond group identities, tribal loyalties and fleeting impressions of candidates and officeholders.

What citizens know ultimately depends upon the credibility of the information sources they access. If my students are any indication, most of us lack skill in evaluating such credibility–and the opinions of assorted “crazy uncles” and radio shock jocks suggest that  a substantial number of Americans are uninterested in information that contradicts their preferred world views.

The results aren’t pretty. These paragraphs from the report say it better than I could:

American democracy has come under severe strains in recent years. We’ve seen a precipitous decline of trust in its central political institutions, the radicalization of one of its two major political parties, a vehement oppositional politics in Congress that has turned divided party government into a graveyard for nominations, while turning legislative initiatives and congressional oversight into little more than a weapon of partisan warfare. All of this has been capped off with the emergence of a frontrunner for the Republican presidential nomination uniquely miscast for the office whose election would constitute a threat to American democracy and make a mockery of the U.S. leadership position in the world.

The roots of America’s dysfunctional politics are deep and complex. For our purposes here, it is sufficient to say that the media has done little to help the public understand what is amiss. An aggressively partisan talk radio, cable news, web and social media community has fueled a tribal politics that traffics in lies and conspiracies. The mainstream media has handcuffed itself out of fear of charges of partisan bias into antiseptic balanced treatment of both sides in spite of their obvious asymmetries. This pattern of false equivalence has served to reinforce a generalized, inchoate public distemper, one that is vulnerable to radical and anti-democratic appeals.

The question is: what can we do about it?

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When Evidence Doesn’t Matter

Political Animal recently reported on negative reactions from rightwing bloggers to a statement made by President Obama.

Now, granted, reporting the fact that rightwing activists would criticize this President falls under the “sun rose yesterday” category of news, but this reaction was unusually revealing, given the point the President was making: that evidence should trump theory.

Here’s Obama’s entire paragraph, so that the context is clear:

I guess to make a broader point, so often in the past there’s been a sharp division between left and right, between capitalist and communist or socialist. And especially in the Americas, that’s been a big debate, right? Oh, you know, you’re a capitalist Yankee dog, and oh, you know, you’re some crazy communist that’s going to take away everybody’s property. And I mean, those are interesting intellectual arguments, but I think for your generation, you should be practical and just choose from what works. You don’t have to worry about whether it neatly fits into socialist theory or capitalist theory — you should just decide what works.

The point being made in the rest of the article is the fairly obvious one (obvious, at least, to folks who follow politics in the real world)–the reactionaries who currently control the GOP are obsessed with ideology to such an extent that when reality doesn’t confirm their beliefs, they opt to retain the beliefs rather than acknowledge the reality. Thus

A simple statement from the President that economies should simply pick solutions that work, somehow becomes a fundamental betrayal.

We see this reaction everywhere. The article refers to Kansas and Louisiana, both of which are in a world of hurt after several years of GOP orthodoxy, and the very different experience of blue states like California. I’ve previously compared Scott Walker’s Wisconsin, where Koch brothers ideology reins, to Mark Dayton’s Minnesota, where the economy is booming despite the imposition of new and higher tax rates and increased public investment in education.

In a functional political ecosystem that would be a cause for reckoning and introspection, but no acknowledgement of failure has been forthcoming from the GOP. Instead its candidates are doubling down on more of the same. For them, conservative orthodoxy cannot fail; it can only be failed.

In the alternate reality built by committed ideologues, changing one’s position because the evidence has demonstrated that the position is in error makes one a “flip flopper.” In the real world, amassing evidence of what works and what doesn’t is called “research,” and successful humans do it in order to bring our beliefs into conformity with facts that can be empirically demonstrated. (In the academy, we call that process “learning.”)

A popular definition of insanity is doing the same thing over and over, and expecting a different result. By that definition, the GOP has gone insane.

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Flavors of Freedom

There is a book review in the latest issue of the Washington Monthly of “No Freedom Without Regulation: The Hidden Lesson of the Subprime Crisis.”  It was written by a Professor Singer of Harvard Law School, and in it, he considers a type of freedom that gets short shrift from the various special interests who are constantly insisting that any and all government regulation constrains our liberties.

I found this passage illuminating:

When the state sets minimum standards of safety and transparency for the manufacture and sale of consumer products, it affords me the freedom to buy a toaster oven without first hiring a lawyer to read the fine print and an electrician to look over the specs to make sure it won’t catch on fire. Other restrictions protect us from negative externalities. Building codes may limit my neighbor’s ability to contract for the construction of a house with cheap material and bad wiring, but it protects my house from the fire likely to erupt in his.

As I have noted in previous posts, I’m grateful for the Food and Drug Administration that relieves me of the need to test that chicken I bought at Kroger for e coli. (Before the recent news from Flint, Michigan, I used to be more grateful for the EPA’s monitoring of water quality–now, I’d like to see those regulations stiffened up a bit…)

The ongoing debate about government regulatory activity displays all the deficiencies of American policy arguments generally: it oversimplifies, assumes an “either/or” answer, and focuses on the wrong questions.

Can regulation be too stifling? Can a “nanny-state” approach impose unnecessary costs on businesses and consumers? Sure.

Can the lack of appropriate regulation endanger innocent people, and impose additional costs on those same businesses and consumers? You betcha!

The questions we should be addressing are the “how” questions: is this particular regulation necessary? Is it “narrowly tailored” to accomplish its goal? Does it make sense from a cost-benefit standpoint?

We’ll still disagree, still argue about the extent and substance of regulatory activity. But at least we’d be arguing about the right things.

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Defining Our Terms

Bernie Sanders says he’s a Democratic Socialist, and that doesn’t seem to bother the young folks who support him–although it certainly scandalizes a lot of older Americans. Of course, as a friend of mine recently noted, no one–young or old– seems to know what a “Democratic Socialist” or just a garden-variety socialist is–or how socialism differs from either capitalism or communism, for that matter.

Why am I not surprised? After all, Americans long since stopped using labels to communicate information; we just throw them at each other as insults.

Economic terminology is yet another part of those civic literacy deficits I keep talking about–deficits I addressed in my ebook Talking Politics? What You Need to Know Before You Open Your Mouth. (Shameless plug: it’s cheap–under $5 from Georgetown University Press.) I promised my friend that I’d share what I wrote there:

Socialism is the collective provision of goods and services. The decision whether to pay for certain services collectively rather than leaving their production and consumption to the free market can be based upon a number of factors. First, there are some goods that free markets cannot or will not produce. Economists call them public goods, and define them as both “non-excludable” –meaning that individuals who haven’t paid for them cannot be effectively kept from using them—and “non-rivalrous,” meaning that use by one person does not reduce the availability of that good to others. Examples of public goods include fresh air, knowledge, lighthouses, national defense, flood control systems and street lighting. If we are to have these goods, they must be supplied by the whole society, usually through government, and paid for with tax dollars.

Not all goods and services that we provide collectively are public goods. Policymakers have often based decisions to socialize services on other considerations: we socialize police and fire protection because doing so is generally more efficient and cost-effective, and because most of us believe that limiting such services only to people who can afford to pay for them would be immoral. We socialize garbage collection in more densely populated urban areas in order to enhance the livability of our cities and to prevent disease transmission.

Getting the “mix” right between goods that we provide collectively and those we leave to the free market is important, because too much socialism hampers economic health. Just as unrestrained capitalism can become corporatism, socializing the provision of goods that the market can supply reduces innovation and incentives to produce. During the 20th Century, many countries experimented with efforts to socialize major areas of their economies, and even implement socialism’s extreme, communism, with uniformly poor results. Not only did economic productivity suffer, so did political freedom. (When governments have too much control over the means of production and distribution, they can easily become authoritarian.)

Virtually all countries today have mixed economies. The challenge is getting the right balance between socialized and free market provision of goods and services.

In our highly polarized politics today, words like Socialism, Fascism and Communism are used more as insults than descriptions. There are numerous disagreements about the essential characteristics of these systems, probably because the theories underlying them were so different from the actual experiences of those who tried them.

Socialism may be the least precise of these terms. It is generally applied to mixed economies where the social safety net is much broader and the tax burden is correspondingly higher than in the U.S.—Scandinavian countries are an example.

Communism begins with the belief that equality is defined by equal results; this is summed up in the well-known adage “From each according to his ability; to each according to his needs.” All property is owned communally, by everyone (hence the term “communism”). In practice, this meant that all property was owned by the government, ostensibly on behalf of the people. In theory, communism erases all class distinctions, and wealth is redistributed so that everyone gets the same share. In practice, the government controls the means of production and most individual decisions are made by the state. Since the quality and quantity of work is divorced from reward, there is less incentive to innovate or produce, and ultimately, countries that have tried to create a communist system have collapsed (the USSR) or moved toward a more mixed economy (China).

Fascism is sometimes called “national Socialism,” but it differs significantly from socialism. The most striking aspect of fascist systems is the elevation of the nation—a fervent nationalism is central to fascist philosophy. There is a union between business and the state; although there is nominally private property, government controls business decisions. Fascist regimes tend to be focused upon a (glorious) past, and to uphold traditional class structures and gender roles as necessary to maintain the social order.

Three elements commonly identified with Fascism are 1) a national identity fused with racial/ethnic identity and concepts of racial superiority; 2) rejection of civil liberties and democracy in favor of authoritarian government; and 3) aggressive militarism. Fascism has been defined by this radical authoritarian nationalism, with fascists seeking to unify the nation through the elevation of the state over the individual, and the mass mobilization of the national community through discipline, indoctrination, and physical training. Nazi Germany and Mussolini’s Italy are the most notable examples of Fascist regimes.

Hope that helps.

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