If anyone in the Western hemisphere hasn’t weighed in on the events in Wisconsin, then it’s news to us. It’s a situation perfectly designed to excite both sides – conservatives have an opportunity to deliver a final blow in their long fight against the labor movement, while the unions, having contrived to lose most of their major battles in the last thirty years, see a chance to win a fight.
One interesting dialogue has emerged, with notables like Krugman and Drum on one side, and Avent to the other. In the first argument, unions represent the last meaningful political power that still fights for the middle class. America is already flirting with oligarchy, so it seems inopportune to surrender the field to vested business interests.
On the other hand, as Ryan Avent persuasively points out, unions haven’t been terribly good at mobilizing for the middle class any time recently. Wages have stagnated, jobs have disappeared, and union membership is falling. Much of this blame lies elsewhere. The mechanization of manufacturing brutalized many traditionally staunch union vocations. An increasingly globalized world was always going to decrease America’s relative share of the international economy.
Also, as others note, unions are not angels. They lead to cartelization and abuse. Often, they fight to deliver a larger share of a shrinking pie, rather than promoting policies that would lead to greater economic growth for all. They sometimes protect the employment of workers who are not fit for their positions.
Further, while cursory evidence strongly suggests no correlation between union membership and state budget deficits, and weak correlation between membership and per capita spending, state employees are an expense on the public purse. At a time when the largesse of the government is constrained, it is perfectly equitable that they should shoulder some share of the burden.
We’re big fans of Avent. We like the cut of his jib. But in this case, we disagree. Not, we’re afraid, for any terribly factual or rigorous reason. We’re just pissed.
To us, it seems that this recession has offered innumerable opportunities for the poor and the middle class to “shoulder their share” of the burden. The mortgage cramdown was defeated because it posed a threat to bank balance sheets and because renegotiating mortgages rewarded irresponsible borrowers. The Republicans suggest cutting social programs because we can not afford things like nutrition assistance or worker retraining – but tax cuts are probably ok. We can’t afford more stimulus, can’t countenance a rate of inflation that would erode nominal debts, and certainly aren’t about to let those dastardly public workers of the hook.
Yet we passed TARP. We repaired the balance sheets of the big banks. We recapitalized the financial sector. We made good on AIG’s collateralized obligations. We didn’t stand in the way of record bonuses on Wall Street. We didn’t pass clawback taxes on bonuses or a Tobin tax, or raise bank collateral independent of Basel III, or pass a strong Volcker rule. We allowed exemptions for derivatives trading on clearing houses and we didn’t touch the taxation of capital gains. The wizards of the financial world ran the economy over a cliff and in return, we did nothing.
And there was always a reason for it! Always a perfectly good reason. We’ve got to keep the economy humming, we have to make the financiers happy ensure a smoothly running economic machine. Only it’s not running very smoothly, not these days, not with growth below trend and inequality growing and revenues down and budget deficits on the rise. So now we take the axe to the public sector unions. Because someone has to help balance the books.
So when we defend the unions in Wisconsin, it’s partially because we’ve reasons to like the concept of organized labor as a countervailing political force. But also because, in a fit of pique, we want a line drawn in the sand. We want our fucking revolution. Because when it’s time to pay the pound of flesh, our betters always seem to have better things to do, but we’re given a knife and asked to start cutting. And that’s not right. That’s not right at all.
Thursday, February 24, 2011
Wednesday, February 23, 2011
The Indefensible Defense Of Defense
Via Paul Krugman, a note on the real state of defense spending:
We agree, but disagree. We're very fickle like that.
As we've mentioned time and time before, you cannot be concerned with the deficit unless you are concerned about health care. Social Security is not a long run problem. Discretionary spending is not a long run problem. Defense spending is not a long run problem. Health care is.
And yet.
Advocating cuts to the defense budget makes no sense if you're looking to cure our structural budget issues. But protecting the DoD while advancing draconion cuts to essential non-defense services is the height of idiocy. Defense amounts to 20% of spending - the entire non-defense discretionary budget is three-fourths of that.
So don't cut defense to cure the deficit. But if you insist on kneecapping programs like SCHIP, nutritional assistance, the Department of Transportation, education, and research and science, then defense should at least shoulder an equal burden.
We agree, but disagree. We're very fickle like that.
As we've mentioned time and time before, you cannot be concerned with the deficit unless you are concerned about health care. Social Security is not a long run problem. Discretionary spending is not a long run problem. Defense spending is not a long run problem. Health care is.
And yet.
Advocating cuts to the defense budget makes no sense if you're looking to cure our structural budget issues. But protecting the DoD while advancing draconion cuts to essential non-defense services is the height of idiocy. Defense amounts to 20% of spending - the entire non-defense discretionary budget is three-fourths of that.
So don't cut defense to cure the deficit. But if you insist on kneecapping programs like SCHIP, nutritional assistance, the Department of Transportation, education, and research and science, then defense should at least shoulder an equal burden.
. . . if we’re talking about fiscal issues, you have to bear the arithmetic in mind. We’re not living in the 1950s, when defense was half the federal budget. Even a drastic cut in military spending wouldn’t release enough money to offset more than a small fraction of the projected rise in health care costs.
So by all means, let’s try to crack down on the massive waste that goes on in matters military. But doing so would be of only modest help on the larger budget problem.
Austerity Now!
Via Felix Salmon, a great read on the historical result of austerity movements:
David Leonhardt takes an important look at Germany, which you might think was benefiting, in some kind of zero-sum mathematics, from the pain of the European periphery. It isn’t: German GDP is still significantly lower than it was in the first quarter of 2008, while US GDP is now back above its pre-crisis levels. (Britain is doing significantly worse than either.)I was briefly concerned that Britain was showing some unexpected economic dynamism after mauling the public budget, disproving my prediction that pushing draconian cuts in the middle of a crushing recession is a universally stupid idea. I am happy to announce that the recent declining state of their economy has kindly consented to prove my point. If only it didn't involve the utterly unecessary suffering of millions of Britons.
“The historical lesson of postcrisis austerity movements,” writes Leonhardt, “is a rich one,” and also clear: they don’t work, even if they’re “morally satisfying.”
We Appreciate Your Input At This Delicate Time . . .
. . . but not enough to enable it.
You'll notice that we've recently disabled comments on the blog. This is not an attempt to censor you, our loyal readers. But given our admirable dearth of site traffic, maintaining a commenting system seemed superfluous. If you see a post, it's safe to assume that no one else has read it.
So comments off in the meantime. We'll reconsider our decision in the unlikely event we develop a capacity for self-reflection. Do not hold your breath.
You'll notice that we've recently disabled comments on the blog. This is not an attempt to censor you, our loyal readers. But given our admirable dearth of site traffic, maintaining a commenting system seemed superfluous. If you see a post, it's safe to assume that no one else has read it.
So comments off in the meantime. We'll reconsider our decision in the unlikely event we develop a capacity for self-reflection. Do not hold your breath.
Tuesday, February 22, 2011
On Morality
We've meant to write this post for some time now. Six or seven weeks, we think. Each time we've stopped and started, started and stopped, over and over again. Et cetera et cetera, ad infinitum. Blogging can be a humbling practice it seems.
But we've decided to press ahead. The business of thinking can be messy, so it's perhaps suitable that the business of recording one's thoughts should be messier still. Perhaps this is why we still occasionally maintain a blog that no one reads. Public catharsis, and all that.
About two months ago the griding remorseless cogs of the economy finally caught up to our place of employment. There was a certain inevitability about the proceedings. We have long been profitable without much profit, always productive but never quite prolific. We are, in other words, an agreeably irrelevant mid-sized financial firm, proudly serving a dwindling group of clients who will not always be able to support our existence.
There are a thousand banks like us across the country. Some will rally, some will be bought out by their competitors, and some will fade to the margins before disappearing entirely. Not a bad fate, that. There's something to be said for serving your customers faithfully for as long as you're able and then packing it all in. But of course the CEOs and presidents of replaceable mid-sized financial firms don't like this.1 Irrelevancy doesn't suit them. They're dynamic folk - relevancy is kind of their thing. Not the sort to go quietly into that good night, and all that.
So, like many others in our position, we've begun the messy process of restructuring. The consultants have been hired - they ghost about the place with pale faces, bloated little demi vampires fed with too little sunlight and too much recycled air. Business lines will be folded and amalgamated, new processes put in place, and cheery new corporate diktats issued to put a gloss on the process. And, of course, many people will be summarily terminated. A great many people, if the rumors are at all to point.
Now, don't go fearing for your assailed and assaulted blogger. We're an inadequate person of mean skill, but we've always benefited from the same sense of survival that benefits rats and other low rodents. We are rarely pleasant but almost impossible to kill. Corporately-speaking, of course. Bouncebackability is our preferred term.
But many of our coworkers will not be so lucky, and in accordance with the law of averages, many will be our dear friends. It is a painful ugly business. No one wants to be sent home to face their wife and family, forced to explain that they won't be going to work tomorrow, or the day after that, or any day from then proceeding. No one wants to see it happen to a friend.
Like past times of adversity, these recent events have rendered us unusually reflective - as time passed, it seemed suitable to transcribe at least some. So what follows, however incoherent and contrary, are our thoughts on the business of business, that is regularly inflicted on the people around us.
We apologize for any inadequacies that follow. They are entirely of our own making.
Part I - Homo Homini Lupus
We've been dwelling for some time on a this. It certainly wasn't preordained. Doctor's son, a smattering of private education. Never bereft of the silver spoon. We cheered against Clinton in '92. Again in '96. We read The Fountainhead when we were fifteen - surely enough to condemn us to life as a cynical, unserious misanthrope.
But for all its allure, conservatism eventually left us cold. And why, we wonder. Why, when we were preaching the good news, did the doubt creep in. Why did we stray from the path?
Around twelve years ago we read Jonathon Kozol's Amazing Grace, which described life in America 's poorest urban communities. Loyal readers will no doubt inform us of it's many faults but, for a young boy raised in sheltered circumstances, it made a remarkable impression. It challenged our view of the world in a way we'd previously avoided.
Chief among these doubts was a simple thought: What if it was us? As a son of privilege, we are (if we may modestly suggest) fairly near perfect. We work a stable job. We are are well read and well travelled, and have an education of enviable expense. Perhaps we fell short of the peak of our powers, but we've certainly achieved a life of some credit. And good for us!
But in the back of the mind, in the niggling recesses, are the whispers of doubt. The laziness and the arrogance, the self righteousness, the fatal inattention to detail. Not terrible faults, to be sure. But what things had been different? What if I was born different?
Such a tasty question: What if you were born poor? Forced to answer, we think most conservatives would say this: It doesn't make a damned bit of difference. We are who we are, and this world is of our own making.
Liberals disagree. We say that life provides some with challenges that are all but impossible to overcome without assistance. It is the responsibility and the measure of a right society to alleviate the suffering of the needy to the best of our ability, with the common resources at our disposal.
The conservative regard for the poor can only be sustained if you strip them of their basic humanity.2 They can't be poor because they were born poor. They are poor because they are lazy, because they are prone to crime and addiction, because they are incapable of making something of themselves. Conservatives say that for us it would be different. We would not be unemployed, or in jail, or leave our wives. We would not have failed to graduate high school, depend on TANF, or use food stamps. We would not have subsidized lunches.
Perhaps this sounds unfair. For our many conservative family and friends, we agree. But for the political body of conservatism, who's behavior has surpassed inimitable? When you cheer Paul Ryan's road map as a blueprint for destroying Social Security and Medicare, when you advance a budget that cuts SCHIP and nutrition assistance but protects farm subsidies and defense, then you've shouldered the burden of proof.
We used to believe this. The interminably lazy poor. The insufferably needy needy. We weren't just conservative - we were good at it. As you've no doubt noticed, no one does scorn like we do scorn.
But then there were the statistics. There is no single greater corollary for poverty than being born into poverty (that, and divorced parents. Sorry Dad). Not race, not intelligence, not background or education, not location. Be born poor, live poor, die poor. The self made man is such an outlier he borders on myth. Most who struggle against poverty lose.
More recently, we've had an increasingly difficult time justifying our treatment of the poor with our own Christianity. Disdain for poverty only works if you assume that Jesus wasn't being particularly serious whenever he discussed the subject. Redacting large portions of the New Testament struck us as heretical.
Deus Ex Machina
But ours is not a popular position. It hasn't been since the expansion of the Great Society under Johnson, or the heady days when Truman took Social Security and transformed it into something with bite, something that mattered.
Since the 80s, the field of economics has advanced as the preferred description of our society.3 Perhaps this was due in part to the long prosperity of the Great Moderation- we leave that discussion for another day. But increasingly, political action can only be undertaken if it can be seen to benefit to business interests and support the free market.
Health care reform wasn't justified because millions of Americans had no access to health care, and that some died. Instead, they said it improved the long run budget outlook. Charter schools? The free market can fix education. Social Security? Privatise it. Financial reform? Far too onerous for banks that haven't crashed the world economy in nearly three years.
It worked because, at least at the beginning, economics promised so much. A truly rigorous science to maximize production and development. But somewhere along the way, we confused the free market for morality. It used to be that the free market was good because it advanced human prosperity. Now, humanity is only good if it moves the market.
Somewhere along the line, we confused the phrase, "The free market is good when it advances human interests," with the more digestible, "The free market is good." Now that phrase elides a world full of damaging inefficiencies.
Free markets may be the best of the rest, but they are still sub-optimal. Free markets aren't perfect. Free markets produce oligarchies, monopolies, and insider trading. They reward asymmetrical information, the manipulation of stock prices, rent-seeking, and the brutal maltreatment of labor. If it's profitable, it's permissible.
Indeed, it's not even accurate to call America a free market at all. Better to describe as a regulated capitalism. Thank God for that. A cursory glance at working conditions prior to the organized labor movement should cure you of any latent nostalgia. God forbid we live in any year prior to the invention of penicillin or the founding of the SEIU.
The free market may produce moral outcomes - that does not make it moral. But somewhere along the line we abdicated our responsibility to basic human decency. We no longer ask ourselves if we've treated others well, if we've cared for the unfortunate, if we've done our part to give voice to the voiceless. Businesses are responsible to shareholders, not a community, and we're responsible only for our businesses.
Where does this lead us? We prefer the original:
So to the end, and back to the beginning. About a year before they deemed our beloved coworkers surplus to requirements, one of the executives of our firm sat down and my desk and asked me a question. "Why is it," he wondered, "that young men like you have so little loyalty to your employers?"
"In my day," he continued, "we were happy to get a job, work hard, and wait for our turn. People these days just don't want to wait. Why is that?
A very good question. We are infected with the mercenary spirit.
Perhaps it began when the network of subsidies for higher education were dismantled, saddling us with crippling debt for an education we could barely afford, but couldn't afford to miss.
Perhaps it was when pensions rendered American companies "economically uncompetitive" with their foreign counterparts, and they were offloaded in favour of worker-funded 401ks.
Perhaps it was when libertarians attacked the minimum wage as market distorting and unconstitutional.
Perhaps it was at the start of the right-to-work states that began the long slow degradation of the organized labor movement.
Perhaps it was when health care was deemed, not a right, but a privilege, and we watched the people we love struggle under the burden of onerous medical bills.
Perhaps it was when the Republican minority blocked the extension of unemployment benefits during the longest recession in modern history.
And perhaps it was when our employer, in an effort to increase profits and streamline costs, began the process of summarily dismissing our fellow employees, who's only crime was to show a modicum of loyalty to a company not capable of showing the same.
So what gives? Beats the hell out of us.
1For much more on this, consider Matthew Yglesias in the original.
2The poor, not the conservatives. Actually it works either way.
3It would be poor of us to suggest we thought of this. Hardly. But for the life of we cannot locate the blog that inspired us. So, for fear of being accused of plagiarism, send us your thoughts on where this comes from. Suggestions welcomed. Update: Can we get a what what? It's Barbara Kiviat. Shame on us for forgetting.
But we've decided to press ahead. The business of thinking can be messy, so it's perhaps suitable that the business of recording one's thoughts should be messier still. Perhaps this is why we still occasionally maintain a blog that no one reads. Public catharsis, and all that.
About two months ago the griding remorseless cogs of the economy finally caught up to our place of employment. There was a certain inevitability about the proceedings. We have long been profitable without much profit, always productive but never quite prolific. We are, in other words, an agreeably irrelevant mid-sized financial firm, proudly serving a dwindling group of clients who will not always be able to support our existence.
There are a thousand banks like us across the country. Some will rally, some will be bought out by their competitors, and some will fade to the margins before disappearing entirely. Not a bad fate, that. There's something to be said for serving your customers faithfully for as long as you're able and then packing it all in. But of course the CEOs and presidents of replaceable mid-sized financial firms don't like this.1 Irrelevancy doesn't suit them. They're dynamic folk - relevancy is kind of their thing. Not the sort to go quietly into that good night, and all that.
So, like many others in our position, we've begun the messy process of restructuring. The consultants have been hired - they ghost about the place with pale faces, bloated little demi vampires fed with too little sunlight and too much recycled air. Business lines will be folded and amalgamated, new processes put in place, and cheery new corporate diktats issued to put a gloss on the process. And, of course, many people will be summarily terminated. A great many people, if the rumors are at all to point.
Now, don't go fearing for your assailed and assaulted blogger. We're an inadequate person of mean skill, but we've always benefited from the same sense of survival that benefits rats and other low rodents. We are rarely pleasant but almost impossible to kill. Corporately-speaking, of course. Bouncebackability is our preferred term.
But many of our coworkers will not be so lucky, and in accordance with the law of averages, many will be our dear friends. It is a painful ugly business. No one wants to be sent home to face their wife and family, forced to explain that they won't be going to work tomorrow, or the day after that, or any day from then proceeding. No one wants to see it happen to a friend.
Like past times of adversity, these recent events have rendered us unusually reflective - as time passed, it seemed suitable to transcribe at least some. So what follows, however incoherent and contrary, are our thoughts on the business of business, that is regularly inflicted on the people around us.
We apologize for any inadequacies that follow. They are entirely of our own making.
Part I - Homo Homini Lupus
We've been dwelling for some time on a this. It certainly wasn't preordained. Doctor's son, a smattering of private education. Never bereft of the silver spoon. We cheered against Clinton in '92. Again in '96. We read The Fountainhead when we were fifteen - surely enough to condemn us to life as a cynical, unserious misanthrope.
But for all its allure, conservatism eventually left us cold. And why, we wonder. Why, when we were preaching the good news, did the doubt creep in. Why did we stray from the path?
Around twelve years ago we read Jonathon Kozol's Amazing Grace, which described life in America 's poorest urban communities. Loyal readers will no doubt inform us of it's many faults but, for a young boy raised in sheltered circumstances, it made a remarkable impression. It challenged our view of the world in a way we'd previously avoided.
Chief among these doubts was a simple thought: What if it was us? As a son of privilege, we are (if we may modestly suggest) fairly near perfect. We work a stable job. We are are well read and well travelled, and have an education of enviable expense. Perhaps we fell short of the peak of our powers, but we've certainly achieved a life of some credit. And good for us!
But in the back of the mind, in the niggling recesses, are the whispers of doubt. The laziness and the arrogance, the self righteousness, the fatal inattention to detail. Not terrible faults, to be sure. But what things had been different? What if I was born different?
Such a tasty question: What if you were born poor? Forced to answer, we think most conservatives would say this: It doesn't make a damned bit of difference. We are who we are, and this world is of our own making.
Liberals disagree. We say that life provides some with challenges that are all but impossible to overcome without assistance. It is the responsibility and the measure of a right society to alleviate the suffering of the needy to the best of our ability, with the common resources at our disposal.
The conservative regard for the poor can only be sustained if you strip them of their basic humanity.2 They can't be poor because they were born poor. They are poor because they are lazy, because they are prone to crime and addiction, because they are incapable of making something of themselves. Conservatives say that for us it would be different. We would not be unemployed, or in jail, or leave our wives. We would not have failed to graduate high school, depend on TANF, or use food stamps. We would not have subsidized lunches.
Perhaps this sounds unfair. For our many conservative family and friends, we agree. But for the political body of conservatism, who's behavior has surpassed inimitable? When you cheer Paul Ryan's road map as a blueprint for destroying Social Security and Medicare, when you advance a budget that cuts SCHIP and nutrition assistance but protects farm subsidies and defense, then you've shouldered the burden of proof.
We used to believe this. The interminably lazy poor. The insufferably needy needy. We weren't just conservative - we were good at it. As you've no doubt noticed, no one does scorn like we do scorn.
But then there were the statistics. There is no single greater corollary for poverty than being born into poverty (that, and divorced parents. Sorry Dad). Not race, not intelligence, not background or education, not location. Be born poor, live poor, die poor. The self made man is such an outlier he borders on myth. Most who struggle against poverty lose.
More recently, we've had an increasingly difficult time justifying our treatment of the poor with our own Christianity. Disdain for poverty only works if you assume that Jesus wasn't being particularly serious whenever he discussed the subject. Redacting large portions of the New Testament struck us as heretical.
Deus Ex Machina
But ours is not a popular position. It hasn't been since the expansion of the Great Society under Johnson, or the heady days when Truman took Social Security and transformed it into something with bite, something that mattered.
Since the 80s, the field of economics has advanced as the preferred description of our society.3 Perhaps this was due in part to the long prosperity of the Great Moderation- we leave that discussion for another day. But increasingly, political action can only be undertaken if it can be seen to benefit to business interests and support the free market.
Health care reform wasn't justified because millions of Americans had no access to health care, and that some died. Instead, they said it improved the long run budget outlook. Charter schools? The free market can fix education. Social Security? Privatise it. Financial reform? Far too onerous for banks that haven't crashed the world economy in nearly three years.
It worked because, at least at the beginning, economics promised so much. A truly rigorous science to maximize production and development. But somewhere along the way, we confused the free market for morality. It used to be that the free market was good because it advanced human prosperity. Now, humanity is only good if it moves the market.
Somewhere along the line, we confused the phrase, "The free market is good when it advances human interests," with the more digestible, "The free market is good." Now that phrase elides a world full of damaging inefficiencies.
Free markets may be the best of the rest, but they are still sub-optimal. Free markets aren't perfect. Free markets produce oligarchies, monopolies, and insider trading. They reward asymmetrical information, the manipulation of stock prices, rent-seeking, and the brutal maltreatment of labor. If it's profitable, it's permissible.
Indeed, it's not even accurate to call America a free market at all. Better to describe as a regulated capitalism. Thank God for that. A cursory glance at working conditions prior to the organized labor movement should cure you of any latent nostalgia. God forbid we live in any year prior to the invention of penicillin or the founding of the SEIU.
The free market may produce moral outcomes - that does not make it moral. But somewhere along the line we abdicated our responsibility to basic human decency. We no longer ask ourselves if we've treated others well, if we've cared for the unfortunate, if we've done our part to give voice to the voiceless. Businesses are responsible to shareholders, not a community, and we're responsible only for our businesses.
Where does this lead us? We prefer the original:
"It was not a nice world this, not a nice world at all. It was an Old Testament land he found himself in, a land of barbarity and retribution."Part III - Veritas
So to the end, and back to the beginning. About a year before they deemed our beloved coworkers surplus to requirements, one of the executives of our firm sat down and my desk and asked me a question. "Why is it," he wondered, "that young men like you have so little loyalty to your employers?"
"In my day," he continued, "we were happy to get a job, work hard, and wait for our turn. People these days just don't want to wait. Why is that?
A very good question. We are infected with the mercenary spirit.
Perhaps it began when the network of subsidies for higher education were dismantled, saddling us with crippling debt for an education we could barely afford, but couldn't afford to miss.
Perhaps it was when pensions rendered American companies "economically uncompetitive" with their foreign counterparts, and they were offloaded in favour of worker-funded 401ks.
Perhaps it was when libertarians attacked the minimum wage as market distorting and unconstitutional.
Perhaps it was at the start of the right-to-work states that began the long slow degradation of the organized labor movement.
Perhaps it was when health care was deemed, not a right, but a privilege, and we watched the people we love struggle under the burden of onerous medical bills.
Perhaps it was when the Republican minority blocked the extension of unemployment benefits during the longest recession in modern history.
And perhaps it was when our employer, in an effort to increase profits and streamline costs, began the process of summarily dismissing our fellow employees, who's only crime was to show a modicum of loyalty to a company not capable of showing the same.
So what gives? Beats the hell out of us.
1For much more on this, consider Matthew Yglesias in the original.
2The poor, not the conservatives. Actually it works either way.
3It would be poor of us to suggest we thought of this. Hardly. But for the life of we cannot locate the blog that inspired us. So, for fear of being accused of plagiarism, send us your thoughts on where this comes from. Suggestions welcomed. Update: Can we get a what what? It's Barbara Kiviat. Shame on us for forgetting.
On The Delicate Art Of Negotiation
Last week Wisconsin Governor Scott Walker set out to eliminate collective bargaining for public sector unions to help close the budget deficit. Most of them, at any rate - the ever conservative firefighters and police officers unions got a pass.
Since the measure was ostensibly taken to alleviate fiscal problems, we can only assume that if public sector unions met enough of Walker 's demands to help ensure solvency, he would of course be happy to reach a compromise without massively changing the political status quo. Right
Since the measure was ostensibly taken to alleviate fiscal problems, we can only assume that if public sector unions met enough of Walker 's demands to help ensure solvency, he would of course be happy to reach a compromise without massively changing the political status quo. Right
In Wisconsin , Democrats and unions have offered Gov. Scott Walker the benefit concessions he's asked for, but not the end to collective bargaining he's demanded. Thus far, he's said no -- and he's threatened to let a Friday deadline for restructuring the state's debt come and go, at a cost to Wisconsin of more than $160 million, if Democrats don't agree to return and allow the full passage of his proposed law. (Wonkbook, Klein/Matthews)Curious. It almost seems as though the deficit was never the problem at all, but was just a convenient excuse to annihilate a disagreeable political constituency. What men build up . . .
Wednesday, February 16, 2011
On Social Security
I can't dig up the Mark Thoma link, but let me second his opinion. There is no Social Security problem in this country. There is a one-time demographic adjustment that normalizes in a few years. Tweak the benefits or make a minor adjustment to funding and it's solvent into the forseeable future.
And yet somehow this has become a reason to slash benefits for the single most effective anti-poverty measure in American history. Well done, everyone. Round of applause.
Graphs coming later.
And yet somehow this has become a reason to slash benefits for the single most effective anti-poverty measure in American history. Well done, everyone. Round of applause.
Graphs coming later.
Tuesday, February 15, 2011
Free Ain't Free
Yglesias says it best:
A free market? Hardly. No more than the Veterans Administration, funded and run directly by the federal government. No more than Medicare, which insures millions. Employer provided health care would not exist without enormous government spending, supported by a thicket of regulations that make sure that you, working in your job, can't be denied coverage.
If you get health care in this country, you do so because the goverment has invested billions to pay for it. Want to see someone free riding on the federal dime? Look in the mirror. Look at a group of people who, having benefited from government subsidies of staggering size, work desperately to deny that right to others.
So what would a free market in health care look like? As Yglesias notes, it's just like insuring a car. You call up an insurer. They ask how sick you are. If you're unlucky enough to have a chronic conditions, your premiums skyrocket. If you're sick enough, they'll simply deny your coverage. That's it. No recourse, no subsidy. It's a nihilistic world out there.
But of course, if your auto insurer charges too much, you can take a bus. It's not so easy not to get sick. But then, thank God for Uncle Sam.
. . . Nugent should note something. He worries about [his niece] only in case [she] actually loses her job. If she voluntarily switches to another job, she’s fine. But that’s thanks to a regulation that allows people who maintain continuity of coverage to keep it notwithstanding adverse selection issues. And the only reason Nugent’s niece’s employer offers group health benefits at all is that large insurers receive massive tax subsidies to do so. The health insurance market mostly works for most people most of the time only because it already involves massive government intervention.Let's put this in perspective: The yearly cost of the employer tax subsidy is $177 billion. It is the single largest expenditure in the tax code.
A free market? Hardly. No more than the Veterans Administration, funded and run directly by the federal government. No more than Medicare, which insures millions. Employer provided health care would not exist without enormous government spending, supported by a thicket of regulations that make sure that you, working in your job, can't be denied coverage.
If you get health care in this country, you do so because the goverment has invested billions to pay for it. Want to see someone free riding on the federal dime? Look in the mirror. Look at a group of people who, having benefited from government subsidies of staggering size, work desperately to deny that right to others.
So what would a free market in health care look like? As Yglesias notes, it's just like insuring a car. You call up an insurer. They ask how sick you are. If you're unlucky enough to have a chronic conditions, your premiums skyrocket. If you're sick enough, they'll simply deny your coverage. That's it. No recourse, no subsidy. It's a nihilistic world out there.
But of course, if your auto insurer charges too much, you can take a bus. It's not so easy not to get sick. But then, thank God for Uncle Sam.
Monday, February 14, 2011
On The Non-Useful Non-Defense Discretionary Spending Cuts
Better late than never: Our thoughts on last week:
Without making too big a fuss over the spending cuts released by the House today, a few quick points.
First, the cuts are brutal and deep, and they are disproportionately brutal and deep for the poorest among us. It costs relatively little to fund nutrition assistance to the needy, but it does enormous good.
But the cuts are hardest on some of the services we need the most. Education, Labor, and HHS: 7.3%. Transportation: 15%. Energy Development: 11.5%. It's a dystopian future the House imagines for us. Reduced investment in education and infrastructure, increased reliance on fossil fuels, kneecapped environmental protections, and an altogether heavier burden of poverty.
Secondly, let no one argue that they don't know the priorities of the Republican House. This is as much a manifesto as a budget authority. Even as they propose to take a hammer to social programs and regulatory authorities, they find room to increase defense spending by 3%. This is a fundamental debate on what the government should be involved in. The House's opinion? Not in helping the poor. Not in educating our children or building our highways. Not in regulating our banks.
Lastly, and most importantly, all of this highlights the uselessness of a non-defense discretionary spending cut. That type of spending is 15% of the federal budget - less, if you discount the Veterans Administration. And from that 15% comes almost everything we identify as government. The FBI. The Department of Education. Transportation grants. Nutrition assistance. Farm subsidies, if that's your thing. And if we cut every single one of these departments in entirety, we'll still be left with a government 85% as large as it is today.
15%? Christ. The DoD will make up that difference in a decade.
In return for that, we'll get a country that, with a degrading infrastructure and handicapped education system, is less able to meet the challenges of the next century. Something that is likely to make our budget problem worse, not better. It's a wonderful deal.
Maybe all of this would be understandable if taxes weren't near the lowest point they've been in history. But they are. Maybe if investors were demanding massive interest rates in return for purchasing government debt. They aren't. Maybe if the actions of the Fed were sparking widespread core inflation and crowding out business investment. But they haven't. This isn't an act of necessity. It's a choice. And it's a choice that speaks volumes of the eagerness and the ethics of the people who make it.
Without making too big a fuss over the spending cuts released by the House today, a few quick points.
First, the cuts are brutal and deep, and they are disproportionately brutal and deep for the poorest among us. It costs relatively little to fund nutrition assistance to the needy, but it does enormous good.
But the cuts are hardest on some of the services we need the most. Education, Labor, and HHS: 7.3%. Transportation: 15%. Energy Development: 11.5%. It's a dystopian future the House imagines for us. Reduced investment in education and infrastructure, increased reliance on fossil fuels, kneecapped environmental protections, and an altogether heavier burden of poverty.
Secondly, let no one argue that they don't know the priorities of the Republican House. This is as much a manifesto as a budget authority. Even as they propose to take a hammer to social programs and regulatory authorities, they find room to increase defense spending by 3%. This is a fundamental debate on what the government should be involved in. The House's opinion? Not in helping the poor. Not in educating our children or building our highways. Not in regulating our banks.
Lastly, and most importantly, all of this highlights the uselessness of a non-defense discretionary spending cut. That type of spending is 15% of the federal budget - less, if you discount the Veterans Administration. And from that 15% comes almost everything we identify as government. The FBI. The Department of Education. Transportation grants. Nutrition assistance. Farm subsidies, if that's your thing. And if we cut every single one of these departments in entirety, we'll still be left with a government 85% as large as it is today.
15%? Christ. The DoD will make up that difference in a decade.
In return for that, we'll get a country that, with a degrading infrastructure and handicapped education system, is less able to meet the challenges of the next century. Something that is likely to make our budget problem worse, not better. It's a wonderful deal.
Maybe all of this would be understandable if taxes weren't near the lowest point they've been in history. But they are. Maybe if investors were demanding massive interest rates in return for purchasing government debt. They aren't. Maybe if the actions of the Fed were sparking widespread core inflation and crowding out business investment. But they haven't. This isn't an act of necessity. It's a choice. And it's a choice that speaks volumes of the eagerness and the ethics of the people who make it.
Thursday, February 10, 2011
Swing For The Fences
So the House Republicans have sketched their plan to save $40 billion from the budget. It is as awesome as you would expect:
House Republicans sketched their vision for a smaller federal government Wednesday, proposing sharp spending cuts that would wipe out family planning programs, take 4,500 cops off the street and slice 10 percent from a food program that aids pregnant women and their babies. (emphasis added)Family planning and neonatal nutrition? Because that's what's holding America back. Our dangerous undersupply of malnourished babies.
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