Tag Archives: Ezra Klein

Meanwhile….

As House Republicans noisily demonstrate their utter lack of interest in governing, other parts of the federal system continue to operate. The Fed, for example, continues to battle inflation.

In a lengthy October essay in the New York Times, Ezra Klein provided an overview of the causes of inflation and the choices policymakers face when trying to control it.

Inflation often begins as a mismatch of supply and demand. But if people get accustomed to prices rising, then inflation becomes about expectations. And so the task of ending it grows fuzzier: You need to use policy not just to manage the economy but also to alter psychology. The arid language of economics obscures the brutality this demands. You need to hit the economy hard enough to cow everyone who makes decisions within it.

Because that’s what prices are: decisions. Those decisions, even when mediated by algorithms, are made by people trying to predict the decisions other people will make. When people start to believe that other people are raising prices, they will raise prices. If they think other people are raising prices even faster, they will raise prices even faster than that. “How can you persuade people to expect differently?

One way is by increasing supply., but that usually can’t be done quickly. Another is by cutting demand by raising interest rates–but that makes it harder to borrow money or afford homes, and inevitably throws people out of work.

Klein reminded readers of Paul Volker’s approach  to “stagflation” in the 1970s.

Volcker forced a recession so deep that the entire psychology of the American economy changed. Today he is celebrated for his steel. Powell invokes him as inspiration. In a speech at a Fed conference in Jackson Hole this summer, he mentioned Volcker twice and said, of the intended rate hikes, “we must keep at it until the job is done,” presumably a reference to Volcker’s memoir, “Keeping At It.”

Using interest rate hikes to manage inflation operates like a sledgehammer: it reduces demand, but also cuts supply.

When people lose their jobs, they stop producing the goods and services the economy needs. When mortgage rates spike, developers build fewer houses, despite the fact that high housing costs are often caused by too few houses. When borrowing money becomes expensive, people stop borrowing it and cease to make the investments that create future productivity.

Klein documents the various ways in which interest rate hikes disproportionately harm the poor and the jobless, and says that it would be “nice to have a policy that targeted the rich rather than the poor and did so in a way that didn’t hurt long-term investment.”

He asserts that “such a policy exists.” It’s a progressive consumption tax. 

Here’s how it works. Instead of reporting your income to the I.R.S. and being taxed on that, you report your income minus your savings, and you’re taxed on that. That’s a consumption tax: Your taxable income is what you spend, not what you save. Congress can make it progressive by adding a hefty standard deduction and applying a much higher tax rate to people making much more money, just as we do now.

The economist who proposed this approach wasn’t concerned about  inflation. He thought rich people’s spending wasn’t just wasteful, but harmful. Whether one accepts his definition of “harmful” or not–I’m dubious–Klein points to a truly useful aspect of a progressive consumption tax: it can be dialed up and down to respond to different economic conditions.

In a time of recession, we could drop taxes on new spending, giving the rich and poor alike more reason to spend. In times of inflation, we could raise taxes on new spending, particularly among the wealthy, giving them a concrete reason to cut back immediately and to save and invest more at the same time.

Ideally, adjustments could also be made automatic.

Perhaps for every percentage point increase in unemployment above 5 percent, the tax rate would fall by three points, and for every percentage point increase in inflation above 3 percent, it would rise by four points. Other rules could apply for periods when unemployment and inflation moved together. The tax code would become responsive to the economy by default, rather than only through new acts of Congress.

Given the GOP’s semi-religious objection to taxes, and the current domination of the House by people who can barely spell “economic policy,” let alone leave their preoccupations with culture war issues long enough to consider the operation of the economy, I don’t hold out much hope for passage of a progressive consumption tax in the near future, but it’s an intriguing idea.

We should file it away with other good ideas that await a (hoped-for) return of political sanity and lawmaker interest in actually governing.

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Bumper-Stickers And Tweets

I have previously noted that I consider Ezra Klein one of the most thoughtful and insightful observers of American government and society.  A recent essay for the New York Times, reminded me why I came to that conclusion.

Klein–like many others in the Chattering Classes–was considering the chaos created at Twitter  by Elon Musk (aka the “Chief Twit”). He began by pointing out that the handwringing over losing a “town square” is misdirected, because Twitter and its ilk are not analogous to town squares. Permit me to quote his reasoning at some length:

This metaphor is wrong on three levels.

First, there isn’t, can’t be and shouldn’t be a “global town square.” The world needs many town squares, not one. Public spaces are rooted in the communities and contexts in which they exist. This is true, too, for Twitter, which is less a singular entity than a digital multiverse. What Twitter is for activists in Zimbabwe is not what it is for gamers in Britain.

Second, town squares are public spaces, governed in some way by the public. That is what makes them a town square rather than a square in a town. They are not the playthings of whimsical billionaires. They do not exist, as Twitter did for so long, to provide returns to shareholders. (And as wild as Musk’s reign has already been, remember that he tried to back out of this deal, and Twitter’s leadership, knowing he neither wanted the service nor would treat it or its employees with care, forced it through to ensure that executives and shareholders got their payout.) A town square controlled by one man isn’t a town square. It’s a storefront, an art project or possibly a game preserve.

Third, what matters for a polity isn’t the mere existence of a town square but the condition the townspeople are in when they arrive. Town squares can host debates. They can host craft fairs. They can host brawls. They can host lynchings. Civilization does not depend on a place to gather. It depends on what happens when people gather.

Klein references the lofty goals that accompanied the creation of these social media platforms. They were going to enable democratic deliberation, allow people to connect across barriers of ethnicity, geography, religion. As he points out, the predicted improvements haven’t arrived–democracies are weaker, not stronger, Humans are no wiser, no kinder, no happier.

The reason, he says, that so few aspects of our common lives have gotten better– and so many have arguably gotten worse–is the role played by these platforms in diminishing “our capacity for attention and reflection. And it is the quality of our attention and reflection that matters most.”

In a recent paper, Benjamin Farrer, a political scientist at Knox College in Illinois, argues that we have mistaken the key resource upon which democracy, and perhaps civilization, depends. That resource is attention. But not your attention or my attention. Our attention. Attention, in this sense, is a collective resource; it is the depth of thought and consideration a society can bring to bear on its most pressing problems. And as with so many collective resources, from fresh air to clean water, it can be polluted or exhausted.

He compares this reduction in collective attention to “the tragedy of the commons.”

Farrer argues that our collective attention is like a public pasture: It is valuable, it is limited, and it is being depleted. Everyone from advertisers to politicians to newspapers to social media giants wants our attention. The competition is fierce, and it has led to more sensationalism, more outrageous or infuriating content, more algorithmic tricks, more of anything that might give a brand or a platform or a politician an edge, even as it leaves us harried, irritable and distracted.

Klein notes that Twitter, especially, makes it easy to discuss difficult issues poorly. Complex matters are reduced to bumper-sticker memes. The algorithm that determines what you see takes its cues from likes and retweets, and the quote tweet function encourages mockery rather than conversation.

As Klein says, Twitter has facilitated the growth of movements like Black Lives Matter and #MeToo. It has allowed socialists to get a new hearing in American politics .It has also given new life to the racist right. “Put simply, Twitter’s value is how easy it makes it to talk. Its cost is how hard it makes it to listen.”

The Internet has enabled immensely productive collaborations–Klein singles out Wikipedia as an example–but social media is arguably a different animal–one Klein believes is in decline. I’m not sure about that. Humans have a longing for connectivity.

But surely we can do better than substituting bumper sticker slogans for dialogue.

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Food For Thought…

Ezra Klein’s columns and podcasts are always thought-provoking, and a post-election essay he published in the New York Times was no exception.

He began with a disclaimer of sorts–noting that post-election narratives tend to be like that “flashy jacket that looks just right when you try it on at the store, only to prove all wrong once you wear it out on the town.” Nevertheless, he proceeded to present three reasons for America’s current, stubborn dysfunctions.: calcification, parity and cultural backlash.

The first and arguably most intractable obstacle to functioning governance is  political calcification. Klein cites findings from recent research:

Because politics is so calcified, virtually nothing matters, but because elections are so close, virtually everything matters.

The researchers looked into the effects of Covid, the economy, impeachment, and the George Floyd protests.(The study evidently preceded the effect of Dobbs; that would have been interesting…)

Convulsions that reshaped the country — that filled morgues and burned buildings — were barely visible in the vote. Counties with higher rates of Covid deaths didn’t turn on Trump. Counties where Black Lives Matter protests turned violent went, if anything, slightly toward Joe Biden. So much happened, and so few minds changed. They call this calcification, writing, “As it does in the body, calcification produces hardening and rigidity: people are more firmly in place and harder to move away from their predispositions.”

The cause of this calcification is no mystery. As the national parties diverge, voters cease switching between them. That the Republican and Democratic Parties have kept the same names for so long obscures how much they’ve changed. I find this statistic shocking, and perhaps you will, too: In 1952, only 50 percent of voters said they saw a big difference between the Democratic and Republican Parties. By 1984, it was 62 percent. In 2004, it was 76 percent. By 2020, it was 90 percent.

The yawning differences between the parties have made swing voters not just an endangered species, but a bizarre one. How muddled must your beliefs about politics be to shift regularly between Republican and Democratic Parties that agree on so little?

As Dan Mullindore commented here on an earlier post, calcification helps to explain the otherwise inexplicable election results in Indiana. Along with gerrymandering, it has led to a politics described by Klein as “effective one-party rule leading to a politics devoid of true accountability or competition.”

The second theory–persistent parity– explains why, nationally, political control has teetered, “election after election, on a knife’s edge.”

We live in an era of unusual political competitiveness. Presidential elections are decided by a few points, in a few states. The House and Senate are up for grabs in nearly every contest. In both 2016 and 2020, fewer than 100,000 votes could’ve flipped the presidential election. So even as calcification means fewer minds change in any given election, parity means those small, marginal changes can completely alter American politics.

The third explanatory theory is the one Americans can hardly avoid seeing: cultural backlash.

Starting around the 1970s, generations raised in relative affluence began to care less about traditional economic issues and more about questions of personal autonomy and social values. The core fights of politics turned away from the distribution of money to the preservation of the environment and women’s bodily autonomy and marriage equality.

These changes were generational, and they’ve moved steadily from the margins of politics to the center. That’s led to a backlash among those opposed to, or simply disoriented by, the speed at which social mores are shifting, and the rise, in countries all over the world, of a post-materialist right. That’s led to a slew of right-wing parties that care more about culture and identity than tax cuts and deregulation.

Klein quotes Ron Inglehart’s observation that today’s GOP is obsessed with critical race theory and whether Dr. Seuss is being canceled. It is not obsessed with economic growth or health care policy.

Klein offers considerable data in his discussion of these three narratives, and I encourage you to click through and read the full analysis, but it’s hard to debate the accuracy of his concluding paragraph:

The parties are so different that even seismic events don’t change many Americans’ minds. The parties are so closely matched that even minuscule shifts in the electoral winds can blow the country onto a wildly different course. And even in a time of profound economic dislocation, American politics has become less about which party is good for your wallet and more about whether the cultural changes of the past 50 years delight or dismay you.

I’m pinning my hopes on that “generational change”…

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Technology-R-Us?

Among the recurring elements of what my sons call “family photos”  are the iPhone pictures snapped at family get-togethers in which we’re all looking at our iPhones. My youngest son (who is one of the worst offenders) usually labels those pictures “warm family moments” or something equally sarcastic.

I don’t think my family is unique. Enter an elevator or restaurant, or just walk down a city street, and most people you encounter are staring at the small screens. That reality–and it certainly seems to be a universal reality–raises the question: what is this seductive technology doing to our brains?

Ezra Klein recently addressed that question in an essay for the New York Times.

I am of the generation old enough to remember a time before cyberspace but young enough to have grown up a digital native. And I adored my new land. The endless expanses of information, the people you met as avatars but cared for as humans, the sense that the mind’s reach could be limitless. My life, my career and my identity were digital constructs as much as they were physical ones. I pitied those who came before me, fettered by a physical world I was among the first to escape.

A decade passed, and my certitude faded. Online life got faster, quicker, harsher, louder. “A little bit of everything all of the time,” as the comedian Bo Burnham put it. Smartphones brought the internet everywhere, colonizing moments I never imagined I’d fill. Many times I’ve walked into a public bathroom and everyone is simultaneously using a urinal and staring at a screen.

Klein referenced several of the 20th-century media theorists, including Marshall McLuhan, Walter Ong and Neil Postman, who “tried to warn us.” And he quoted Nicholas Carr’s book, “The Shallows: What the Internet Is Doing to Our Brains.”

The very way my brain worked seemed to be changing. It was then that I began worrying about my inability to pay attention to one thing for more than a couple of minutes. At first I’d figured that the problem was a symptom of middle-age mind rot. But my brain, I realized, wasn’t just drifting. It was hungry. It was demanding to be fed the way the Net fed it — and the more it was fed, the hungrier it became. Even when I was away from my computer, I yearned to check email, click links, do some Googling. I wanted to be connected.

Sound familiar? It sure does to me. And it resonated with Klein, who was particularly struck by the word “hungry.”

That was the word that hooked me. That’s how my brain felt to me, too. Hungry. Needy. Itchy. Once it wanted information. But then it was distraction. And then, with social media, validation. A drumbeat of “You exist. You are seen.”

How important is the choice of the platform–the medium–through which we receive messages? Like Klein, I’d always supposed that content is more important than the medium through which we access that content, but the theorists he cites beg to differ.

McLuhan’s famous insistence that “the medium is the message” reflected his view that mediums matter a lot–in fact, that they matter more than the content of the messages being conveyed. Different mediums create and communicate content differently, and those differences change people (and ultimately, society). As Klein concedes, “oral culture teaches us to think one way, written culture another. Television turned everything into entertainment, and social media taught us to think with the crowd.”

Like several commenters on this blog, Klein has been influenced by Neil Postman’s “Amusing Ourselves to Death.”

McLuhan says: Don’t just look at what’s being expressed; look at the ways it’s being expressed. And then Postman says: Don’t just look at the way things are being expressed; look at how the way things are expressed determines what’s actually expressible.” In other words, the medium blocks certain messages.

Postman was planting a flag here: The border between entertainment and everything else was blurring, and entertainers would be the only ones able to fulfill our expectations for politicians. He spends considerable time thinking, for instance, about the people who were viable politicians in a textual era and who would be locked out of politics because they couldn’t command the screen.

Later, in this very long essay (which is well worth your time to read in its entirety,) Klein makes an important point:

There is no stable, unchanging self. People are capable of cruelty and altruism, farsightedness and myopia. We are who we are, in this moment, in this context, mediated in these ways. It is an abdication of responsibility for technologists to pretend that the technologies they make have no say in who we become.

I wonder: what have we become?

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Rich And Poor

Arguments about poverty–suspicions about deservingness and general disdain for poor people–are nothing new. In the 15th Century, English Poor Laws forbid those who might be so inclined from “giving alms to the sturdy beggar.” Those attitudes came with the colonists to the New World, augmented by the Calvinist belief that accumulation of wealth signaled a “predestined” moral merit.

George W. Bush–the self-described “Compassionate Conservative”–pushed his “faith-based initiative” with language that equated poverty with an absence of “middle-class values,” implying that what poor people needed wasn’t better pay or more money, but more faith and better values.

America’s version of capitalism hasn’t helped. As Ezra Klein wrote last June in the New York Times, 

The American economy runs on poverty, or at least the constant threat of it. Americans like their goods cheap and their services plentiful and the two of them, together, require a sprawling labor force willing to work tough jobs at crummy wages. On the right, the barest glimmer of worker power is treated as a policy emergency, and the whip of poverty, not the lure of higher wages, is the appropriate response.

Klein was commenting on a proposal for a guaranteed income–not a Universal Basic Income, about which I’ve previously written, but an annual income that would phase out as recipients entered the middle class. Whatever the merits of either of those proposals, it behooves policy folks who care more about governing in the public interest than about keeping transgender kids out of the “wrong” bathroom to revisit some of the more destructive and erroneous beliefs about poor people.

As Klein quite accurately notes, opposition to proposals that would attack poverty by giving poor people money isn’t based on costs, but on benefits.

A policy like this would give workers the power to make real choices. They could say no to a job they didn’t want, or quit one that exploited them. They could, and would, demand better wages, or take time off to attend school or simply to rest. When we spoke, Hamilton tried to sell it to me as a truer form of capitalism. “People can’t reap the returns of their effort without some baseline level of resources,” he said. “If you lack basic necessities with regards to economic well-being, you have no agency. You’re dictated to by others or live in a miserable state.”

But those in the economy with the power to do the dictating profit from the desperation of low-wage workers. One man’s misery is another man’s quick and affordable at-home lunch delivery. “It is a fact that when we pay workers less and don’t have social insurance programs that, say, cover Uber and Lyft drivers, we are able to consume goods and services at lower prices,” Hilary Hoynes, an economist at the University of California at Berkeley, where she also co-directs the Opportunity Lab, told me.

This is the conversation about poverty that we don’t like to have: We discuss the poor as a pity or a blight, but we rarely admit that America’s high rate of poverty is a policy choice, and there are reasons we choose it over and over again. We typically frame those reasons as questions of fairness (“Why should I have to pay for someone else’s laziness?”) or tough-minded paternalism (“Work is good for people, and if they can live on the dole, they would”).

These objections echo the English Poor Laws. Disdainful, financially-comfortable people ignore what we all know–that this country is full of hardworking people who are kept poor by very low wages, bad luck, and policy choices that favor the disdainful.

 We know the absence of child care and affordable housing and decent public transit makes work, to say nothing of advancement, impossible for many. We know people lose jobs they value because of mental illness or physical disability or other factors beyond their control. We are not so naïve as to believe near-poverty and joblessness to be a comfortable condition or an attractive choice.

Most Americans don’t think of themselves as benefiting from the poverty of others–but of course, as Klein points out, we do. So we object to proposals to ameliorate poverty with lectures about

how the government is subsidizing indolence, paeans to the character-building qualities of low-wage labor, worries that the economy will be strangled by taxes or deficits, anger that Uber and Lyft rides have gotten more expensive, and sympathy for the struggling employers who can’t fill open roles rather than for the workers who had good reason not to take those jobs.

We haven’t come very far from the 15th Ceentury.

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