Normative Narratives


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In Support of a Jobs Program (working title)

Fed Chief Jerome Powell, most of his life a fiscal conservative, has lately sounded like anything but:

“Given the number of people who have lost their jobs and the likelihood that some will struggle to find work in the post-pandemic economy, achieving and sustaining maximum employment will require more than supportive monetary policy,” Powell said in remarks to the Economic Club of New York. “It will require a society-wide commitment, with contributions from across government and the private sector.”

Recovery, Powell said, would require both “near-term policy and longer-run investments” to ensure anyone who wants a job can get one.

Powell on Wednesday cemented that stance, noting that after World War Two, as the economy transitioned from wartime and needed to absorb millions of returning soldiers into the labor force, the Employment Act of 1946 committed the government “to use all practicable means” to see that anyone willing and able to work can find “useful employment.”

Fed Chiefs typically stay out of fiscal policy debates; in being vocal, Powell is going against both tradition and his long held personal beliefs. But as a true expert he understands that appropriate economic policy is context sensitive, and as a dedicated public servant he understands what his priorities should be.

Powell is probably advocating for something temporary in nature, however I see the need for a more permanent expansion of the civil service. Whether such a program should be guaranteed to everyone, or just very large in scale, is open to debate (I would argue a guarantee is worth the higher price tag). What is not open to debate is the need to do something—the private sector is no longer up to the task of productively employing as many Americans as we ask it to:

“The labor market continues to work pretty well as an economic institution, matching labor to capital, for production. But it is no longer working so well as a social institution for distribution. Structural changes in the economy, in particular skills-based technological change, mean that the wages of less-productive workers are dropping. At the same time, the share of national income going to labor rather than capital is dropping.

This decoupling of the economic and social functions of the labor market poses a stark policy challenge. Well-intentioned attempts to improve the social performance of the labor market – through higher minimum wages, profit-sharing schemes, training and education – may not be enough; a series of sticking leaky band-aids over a growing gaping wound.

As Michael Howard, coordinator of the U.S. Basic Income Guarantee Network, told Newsweek magazine: “We may find ourselves going into the future with fewer jobs for everybody. So as a society, we need to think about partially decoupling income from employment.”

This decoupling of the economic and social functions of the labor market is most pronounced after recessions. It wasn’t until 5 years after the Great Recession “ended that employment reached its pre-recession level. This time around the CBO projects employment won’t hit its pre-pandemic peak until 2024, even though GDP is expected to recover midway through this year.

But workers getting a smaller piece of the pie is not just an issue during and after recessions—declining labor force participation and stagnant wages have persisted for decades. Even during the period before the pandemic—the longest economic expansion on record—labor force participation never really recovered from the Great Recession (which itself was lower than before the dotcom bubble burst). This gives reason to believe the COVID Recession might lead to permanent labor market scarring even with continued fiscal support.

Recessions aren’t just economic downturns, they also accelerate existing economic trends like automation. Cost reduction measures necessitated by the COVID Recession, combined with long overdue calls for a livable minimum wage, will likely accelerate the trend of less Americans (particularly the less educated) being employed through the private sector. If this is the case, the public sector will need to pick up the slack.

Universal Basic Income is an idea that gained mainstream attention in America during Andrew Yang’s 2020 Presidential bid. But giving everyone some money doesn’t really solve the financial problems of people whose jobs are displaced by automation and globalization, nor does it address the mental health impact of being disconnected from the labor force. A jobs program addresses both issues, and the jobs themselves can be used to address other social issues.

There is the question of what types of work we should prioritize, and there is a good argument for having some flexibility at the local level. But generally speaking there are needs which, while not profitable for the private sector to provide affordably, would nonetheless make us a more productive and cohesive society. The government already provides many of these things in some capacity, but they tend to be chronically underfunded. Notably they all address issues that were present before the pandemic, but have since been brought to light and exacerbated.

Lets start with infrastructure, historically a less contentious area for public investment and one where there is obvious need. America’s roads and bridges are in need of repair. Flint, Michigan didn’t have clean drinking water for years, and many other areas are at risk of similar crises. The “digital divide” (broadband internet availability and affordability) has been exposed as we scramble to educate children remotely, but is a problem that preceded and will outlast the pandemic. Climate change demands investments in clean energy infrastructure, and if we want to shift to electric vehicles we’ll need a reliable network of charging stations installed around the country.

For some types of infrastructure public-private partnerships could leverage taxpayer money to tease out private sector contributions, but not all of them. Recent history has made it pretty clear the government will have to do most of the heavy lifting if we want these investments made at scale.

Other areas of need exist in the education, healthcare, and social assistance sectors. Affordable childcare and universal pre-K help women enter the labor force, and have a strong positive impact on the development of young minds (increasing their future contributions to society). Mental healthcare is another area to invest in; improving mental health outcomes not only reduces human suffering, it also leads to an overall healthier and more productive society. Jobs in these sectors rely on a human touch, making them more difficult to automate.

America already had a lack-of-employment-induced mental health crisis before COVID—the “Opioid Crisis”. We need to try to address mental health issues preventatively by educating a more resilient and understanding youth through social and emotional learning (SEL) in K-12 schools. For adults we must address the difficulty of finding affordable mental healthcare by creating an corp of licensed mental health professionals. Police officers need more mental health professionals to effectively serve and protect their communities.

An Associates degree type program, developed in consultation with leaders in the field and focused on treating the most common mental health issues like anxiety and depression, could be administered at Community Colleges across the country. This corp of social workers is not intended to replace psychologists or psychiatrists, but rather operates under the belief that less-credentialed care is better than no care at all (which is what too many Americans are currently receiving).

There should be broad based support for such a jobs program. Progressive politicians need to make the case that these are the coal mining jobs, or the manufacturing jobs, of 21st century America; they won’t make you rich, but it’s meaningful work that provides a decent standard of living. We need to invest more in public higher education and apprenticeships, as President Biden is proposing, so new and existing jobs can be obtained without risking financial ruin by way of student loan debt (another drag on the economy and people’s mental health).

That is the promise America once provided, at least for some people—stable, meaningful employment you won’t go broke chasing the skills for. It is within our fiscal ability to provide these jobs, fulfills major societal needs, and complements the private sector by making it more productive in various ways. These are not just a scattershot of “progressive priorities”, taken together they synergize to form a visionary mosaic which would provide hope, direction, security and a sense of unity to the American people.

Yes, a jobs program would lead to some savings on welfare programs and the criminal justice system. Yes, health outcomes should generally improve as mental health issues are better addressed, resulting in increased tax revenues from a healthier, more productive society. But lets be honest–such a jobs program may or may not “pay for itself” in fiscal terms; forecasting a program of this scale, with all its unanticipated impacts, would ultimately be inaccurate. But factoring in what it would mean for America—by addressing the worsening and interrelated economic, social, emotional, and [literal] environmental storms the status quo has left brewing—how could it not be worthwhile? The question is not “can we afford to make these investments?”, but rather “can we afford not to?”

Social unrest this past year has proven people will not sit idly by while lawmakers figure out some elusive, deficit-neutral “grand compromise” to address the nation’s problems (as if they are even trying to). We will eventually have to pay for a jobs programs and other programs needed to promote economic opportunity, but low interest rates give us time to figure out that side of the equation. The Biden Administration is committed to international cooperation on taxation, a necessary precondition to building a global financial system that ensures the wealthiest and big corporations pay their fare share of taxes.

The levers of power and public opinion are aligned in a way our tilted electoral system doesn’t often allow for–the time for bold action is now.


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Now is the Time For Unapologetic, Pragmatic Progressivism

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Elections Have Consequences

After the 2016 election there was introspection on the losing side. The Democratic party had supposedly abandoned the blue-collar Americans that had once defined it. So what did it do? It moderated; “Blue Dogs” helped it flip the House in 2018, and it ultimately picked a moderate in Joe Biden as its next Presidential candidate. It risked upsetting the more vocal future of its party in order to “build a bigger tent”, which at the time–the longest economic expansion in American history–made sense.

How were these overtures received by the right? Since his 2016 campaign, anything that challenges Trump has been labeled “fake” (which amazingly now includes Fox News). Since campaigning for the 2018 midterm elections started, anyone that disagrees with Trump is part of the “radical left” and a “socialist”. This messaging has had a dramatic effect on many of Trump’s supporters; they have embraced alternate realities and conspiracy theories, dismissing anything that challenges their biases. This isn’t just the far-right fringe–about half of Republicans don’t believe Joe Biden legitimately won the election. Trump’s scorched earth Presidency has made it very difficult to move forward as a nation at the worst possible time.

The situation now demands bold policy measures, both massive stimulus spending to help the economy and people in the short-run, and massive investments in the American people and green economy to build a better future. The pandemic has exposed fault lines in our society which never should have been ignored and now cannot be. Just as the progressive wing of the Democratic party took a backseat from 2017-March 2020 because that’s what the situation dictated then, now the Blue Dogs need to get onboard with the more progressive direction currently required. Recent comments by moderate Democratic Senator Joe Manchin show this is not a foregone conclusion. The Democratic majority in the House shrunk in this election, making it even more important the party projects a united front in pushing Biden’s progressive platform.

I expect the GOP to do all it can over the next four years to obstruct the Biden administration in a cynical attempt to show that “government can’t get anything done”. I hope I am wrong, but at this point it needs to earn it’s seat back at the table; it has not been a good faith partner in making America a better place since well before Trump. Rather it has governed by way of misinformation, hypocrisy, and subversion of popular will. The 2016 election prompted soul searching within the Democratic party, hopefully the 2020 election has the same affect on the GOP.

“Show Me” Time

“The Great Society”, the last major progressive changes to our welfare system, were back in the 1960s. Think about how much the world has changed since then! Think about how globalization and technological improvements have impacted the economy, without any additional support for those most displaced by, and least financially able to adapt to, these forces.

It would be nice if we could have a national dialogue about why globalization hasn’t worked out well for a lot of people, and how we are going to learn from past mistakes as we reform the system. It would be nice if we could talk about what “socialism“, “systemic racism“, and “defund the police” actually mean, and not some straw man version of them drummed up by Trump and his enablers. It would be nice if we could even talk about something completely objective, like how marginal income tax rates work! But it really doesn’t seem like many on the political right are interested in having those sort of conversations.

Now is not the time to try to moderate in hopes of grand compromises, we simply aren’t there as a country. It’s “show me” time for the Democratic party. Show the naysayers that raising taxes on the wealthiest and raising the minimum wage for the poorest will improve, not harm, the economy. Show them a “bigger government” which promotes economic opportunity and justice for all is not the same as an authoritarian socialist state that threatens their way of life. People in “red states” already saw this after they expanded Medicaid under the ACA, and it is what a public health insurance option, higher minimum wage, free community college, student loan debt relief, investing in green jobs and apprenticeship programs, and more generous childcare and development policies would accomplish as well. These policies are all very progressive, but despite what Trump, the right-wing media, and GOP congresspeople may say, none of them are “radical”.

Even if it were politically possible, which it doesn’t look like it will be, there is risk in doing too much too fast. Any short-term adjustment pains would be seized upon and twisted by the very same forces that have lied about trickle-down economics and fear-mongered about “socialism” for decades. It would bail Republicans out from having to actually devise a workable platform by giving them something to run against instead. Progressing in a way that is less disruptive than further-left policies, by legislating meaningful building blocks that will lead us towards the same goals while smoothing out the short-term shocks, will help keep the Democratic party competitive into the future. Nudging the GOP towards becoming a working center-right party could lead to improvements in American political economy and governance that currently seem impossible.

We can have a stronger, fairer, cleaner and more innovative economy if we unabashedly stand up for the little guy and don’t allow wealthy interests to bully us around. It is time to call the bluffs and call out the bullshit, that needs to be the left’s version of being “political incorrect”–not being needlessly divisive, but also not pussyfooting around when it comes to calling out the disinformation that has long defined the political right. Big businesses produce based on the demand for their products (which increases as lower-end incomes rise), not the tax rate on their profits; they hire people so they can produce enough to maximize their pre-tax profits, not as a public service. Yes we have to look out for the legitimate needs of smaller businesses, especially right now as they struggle with the effects of the pandemic, but we must also demand corporate America and the wealthy pay their fair share. The idea that “job creators” must be appeased no matter the costs to society has long been a core GOP belief.

It is still unclear which party will control the Senate, which obviously impacts how progressive a Biden administration ultimately can be. One thing is clear though, it should be as progressive as possible. Show people the government actually can improve things, don’t worry about alienating the right or the deficit. Challenge the lies people have long been told through policy and let the results do the talking. Maybe Joe’s version of pragmatic progressivism can even siphon off the support of a few moderate GOP lawmakers, fed up with their party’s apparent disinterest in anything other than making the wealthy wealthier.

Joe Biden is diplomatic by nature, and Democrats should engage with anyone willing to listen with an open mind, but as the saying goes “it takes two to tango”. The Democratic party can afford to moderate on tone, but not on substance or policy. I don’t think anyone is better positioned to try to extend a hand whenever possible, while understanding the true nature of GOP obstructionism and what it now requires from the Democratic party, than President-elect Joe Biden.


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“The Beast” Has Been Starved, Long Live The Beast!

Starving the Beast

What is “The Beast”, and How to Starve It

Starve the beast is the long running small government belief of the GOP that if you deprive the government of tax revenue, it will be forced to cut spending. 

This theory has generally been disproven–despite concerns about “socialism”, social programs tend to be popular once enacted. Instead of starving the beast, when taxes are cut the deficit and national debt get larger as “the beast” continues to grow.

So what is a small government ideologue to do? How can one starve the beast in such a world?

Unlike the Federal government (the main “beast”), most state and local governments cannot run deficits. They are designed to have balanced budgets, which can be a problem when projected tax revenues fall short and expenses unexpectedly rise (like, say, during a once in a lifetime pandemic).

Congress must pass some sort of meaningful state and local government aid package. These governments employ about 13% of all payroll workers in the country. Many of the public servants they employ work jobs providing a broad array social services to the least well off, and their budgets fund non-profits that do the same. They pay for first responders, teachers and schooling, not to mention all the extra costs associated with safely getting kids back in the classroom whenever that happens. 

Don’t give me that tired line about “bailing out” mismanaged states. With careful wording Congress can address legitimate needs without bailing out states from any pre-COVID budgetary issues; it is ideology and partisan saber rattling holding back this aid, not any concern for economic justice or moral hazard. The economic recovery will lag, and poverty will be exacerbated, if state and local governments slash their payrolls and services at a time when both are needed more than ever. 

Another way to “starve the beast” is to go after programs that are funded through specific “trust funds”, like Social Security and Medicare. These programs are funded through payroll taxes, so cutting the payroll tax could effectively starve that portion of the beast. Even though it likely wouldn’t lead to cuts to these popular programs, the legislative fight to reallocate money for them would present the GOP with an opportunity to push for cuts to other important programs.   

So where do we find ourselves now? In the middle of a manufactured fiscal crisis on top of a terrible recession and pandemic. The Democrats passed a bill 3 months ago in preparation for this, but the GOP has neither passed a bill nor negotiated from the Democrats starting point.

So what was the GOPs response? First, to wait until the last second to even try to start developing out a solution. Then to balk at providing state and local governments the aid they need, despite decades of empty rhetoric about how state governments are best positioned to meet the needs of their people. From the Trump administration the plan is to suspend the payroll tax that funds Social Security and Medicare (an idea he’s been floating since March that no one in his own party even wants), and further strain state budgets by asking them to foot part of enhanced UI benefits.

Taken together the GOPs plan was to cynically try to blame the Democrats for not having a deal in place, while starving whatever “beasts” they could.  

The COVID Spotlight

The corona virus has brought the structural inequalities of America to the forefront. Poorer people and persons of color were more likely to lose their jobs and be exposed to and die from the disease due to interrelated factors such as occupation, income, wealth, underlying health conditions and access to medical care.

People have rightfully been critical of the Trump administration’s response to the corona virus, but these issues are different in that they all predate the pandemic. In order to address them, two things are needed:

  1. An economic system that does a better job of promoting equality of opportunity by providing or making affordable the bare minimum needed for people to reach their cognitive potential (early childhood development programs, universal pre-K), care for themselves when they are sick, and receive the education and job training needed to live a life of dignity and meaning.

    We also need a plan to address structural racism, as history and current systems have left persons of color at a disadvantage relative to their white counterparts (perhaps most simply visualized by racial wealth inequality, even when controlling for income). Call this the “Thurgood Marshall plan”.

    Despite what Trump says, racism will not fix itself with economic growth. For too long that lie has been told, as people of color have been “last hired, first fired” recession after recession. If only the expansion had lasted just a bit longer, Trump says, we would’ve achieved economic and racial justice. Don’t point to relatively low black unemployment and poverty rates pre-COVID as proof Trump is right, those metrics obscure the inequality of opportunity and often times insurmountable headwinds facing America’s least well off.

    Being employed and not in poverty are bare minimums, not high-water marks to be celebrated when finally achieved for a brief moment at tail end of the longest economic expansion in American history. The idea that we may get back to that point 10 years from now should not excite anyone–structural changes are needed.

  2. A stronger social safety net, for those who need temporary support when they are down on their luck (or when something completely outside their control, like a global pandemic, uproots their life).

    On a macro level such programs temper economic downturns and prevent poverty from spiking during them. The recent expiration of enhanced UI benefits without any plan in place with have a negative impact on both these fronts. 

As the past few months have laid bare, a lot of work remains to be done. As comedian John Oliver put it:

“There is no better argument for a permanent welfare state then watching the government desperately trying to build one when it’s already too late. Because make no mistake, the real test here isn’t whether or not our country will get through this, it will. The question is how we get through this, and what kind of country we want to be on the other side…”

Trying to build an adequate safety net from scratch has led to some truly remarkable inefficiencies in our response, from unemployment claim backlogs to small business and hospital aid flowing to undeserving wealthy interests, to outright fraud. In other words, America paid a premium for slapping things together at the last second.

Creating a more just economic system is a more difficult undertaking, but ultimately even more important. In addition to creating a fairer society, getting that right would lead to more long term economic growth as a larger pool of innovators and entrepreneurs reach their potential. It would also lead to savings in our criminal justice system, poverty reduction efforts, mental healthcare, and other “safety net” programs, as fewer people would be reliant on them. To quote Fredrick Douglass, “it is easier to build strong children than to repair broken men”.

In other words America has long been paying the price for our structural inequalities. These costs have just been unfairly ascribed to the very people weighed down by the systems that have failed them, in the largest scale example of victim blaming you will ever see.

Feeding The Beast

Both of these undertakings–building a more just society and a stronger safety net–require not only political will but also large sums of money. America was already heavily indebted before it devoted almost $3 trillion to “managing” the COVID outbreak (if you want to call what the Trump administration has done “managing”). Then there is the stalled stimulus bill that will ultimately need to be passed in some form or another, which will probably settle around $2 trillion

Believe it or not, none of this spending is actually an economic recovery plan (think jobs programs, infrastructure spending), which itself will also likely be in the trillions. All this spending needed to address a bungled COVID-19 response, combined with the GOPs tax reform bill that is projected to reduce tax revenue by over $1 trillion over the next decade and unresolved long-term structural issues funding Social Security and Medicaid, and America’s fiscal outlook is bleak. 

But there is hope. We can pay for the many demands Americans have on their governments. After all our governments are not beasts to be starved, but rather the most important institutions we have in promoting the twin goals of justice and economic dynamism. 

The good news is that the GOPs unpopular tax reforms can be undone, and “tax justice”–raising enough revenue to pay for the programs society needs–can be achieved. But it will take an administration that believes in both the ability of government programs to improve people’s lives and in international coordination on tax dodging (because of how easily money can be moved around the world these days). These are two things the Trump Administration is diametrically opposed to.

Because this is a global pandemic, governments around the world find themselves in the same boat–with the demands of their people far outstripping their current abilities to bring in tax revenue. Debt levels have exploded as spending increases and tax revenues shrink. This presents a unique opportunity to engage in truly meaningful action against “base erosion and tax avoidance” (BEDS), one that must not be wasted. Outliers must be treated like pariahs; the global community needs to sanction them until it is proven that white collar crime doesn’t pay.

It may be odd to hear me say it, but generally speaking now is not the time to be raising taxes. At any given moment appropriate fiscal policy is context sensitive and “counter-cyclical“. This is exactly what all this stimulus spending now is for (to prop up the economy during a deep recession), and another reason why the GOPs tax bill was not only regressive but unnecessary (stimulus mostly for the rich during an economic boom). 

But if we try to raise taxes now, when we are beginning what is likely to be a prolonged global recession, it could choke off any recovery we might otherwise realize. This is less true of tax reforms that target the wealthy, or just funding the IRS enough to effectively audit wealthy dodgers, but generally speaking this is not the time to be raising taxes, particularly on small and medium sized businesses. 

This absolutely does not mean there aren’t meaningful steps to take on taxation. Now is when America must do the heavy lifting of leading the global effort to setup a tax framework that works for the 21st Century by plugging up all the holes. If we can accomplish this difficult task it will be relatively easy to raise not just the statutory tax rate (what the tax code says), but more importantly the effective tax rate (what is actually paid), when the time is right.