Normative Narratives

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Economic Outlook: Guaranteed Income vs. Guaranteed Employment

Dr. Martin Luther King Jr., a man whose understanding of social justice was unrivaled, knew the importance of gainful employment in achieving his goals. In his day, Dr. King advocated for (among other things) good jobs for African Americans who had been systematically discriminated against for centuries. This was largely something the private sector could provide, if racial discrimination was sufficiently deterred.

Today, it is not an individual race that faces barriers to gainful employment, but a whole socioeconomic lower class. With corporate profits at an all time high, and interest rates at historic lows, the past few years would have been the perfect time for corporations to ramp up hiring. However, due to forces such as globalization and automation, it appears the private sector alone will not provide the number of well-paying jobs American’s need–it simply does not have to in order to maximize profits (at least in the short-run).

A recent Brookings blog advocated for guaranteed income (i.e. welfare) in the face this reality:

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.

…the answer for American families is an old idea whose time has come—a universal basic income.

While an interesting idea, I think having the government act as an “employer of last resort” is a better way of achieving the goals of “universal basic income”, in a way that would be more politically viable. Aside from the economic benefits of employment, there are numerous social benefits as well, including: less crime, improved self-esteem / mental health, and experience / skill building (making people more desirable to private sector employers).

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Government jobs could work in many sectors, at lower average wages (so people look for private sector work first), but with more of a training component to promote eventual private sector employment.

Below are a few potential areas for government jobs–areas that are severely under-invested in, and have strong positive “externalities“:

Infrastructure:

The most often cited example when discussing greater government employment is infrastructure. America’s roads and bridges are largely neglected, costing billions a year in lost economic output and putting people’s safety at risk.

Community Development: 

New evidence suggests that where a person grows up has a significant impact on their chances of being successful later in life. Those who grow up in poorer areas find it much harder to “get out” and live productive lives. This is, of course, a huge hindrance to social mobility.

Community development initiatives include mentoring programs (which can mitigate the effects of bad parenting), and “after-school activity” type programs (which can steer young people towards constructive hobbies which often become the basis of employable skills, and away from destructive behavior). Community centers could also offer affordable / free daycare services for younger children.

Parent(s) determine both “who” raises a child, and “where” (since adults make the choice of where they raise their kids)–winning or losing the “parenting lottery” should not be such a strong determinant of future success. While it is impossible to separate the genetic link between parents and their child (the “nature” side of human development), the “who” and “where” (“nurture” side of human development) can be impacted by investing in community development.

Mental Healthcare:

The ACA ensures mental health parity, but not everyone gets the help they need.  To close this gap, government work could increase the “supply” of mental healthcare workers. What I propose is a Mental Health Corp, featuring a new job type–something akin to nurse practitioners taking on more of a doctor’s duties to reduce healthcare costs–in the mental healthcare field.

One does not need a PhD or MD to provide meaningful help to someone struggling with mental illness. There will always be demand for the best trained mental health professionals from people with the means to afford their services, but for those who cannot, surely some care–even if it is not “the best”–would be greatly beneficial. Such care could help people overcome issues that make them unable to find/hold a job and/or lead to criminal activity. 

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Feel free to disagree with me on any of the fields mentioned above. The point I am trying to make is that government employment need not be “digging holes to fill them back up again”.

Robust analyses are needed to compare the costs of our current welfare and criminal justice systems versus the cost of a guaranteed employment program. Not all criminal justice or welfare costs would be eliminated with guaranteed employment (criminal justice reform and a livable minimum wage are also needed) but a significant portion would. It is possible a guaranteed jobs program would not cost much more than what we currently pay to combat the symptoms of unemployment, with much greater benefits. 

While on the topic of welfare, guaranteed employment would remedy one of the major holes in the otherwise sound work-for-welfare requirement of the 1996 welfare reform act. After this reform, those unable to find a job also found themselves without a safety-net, falling into “extreme poverty” (which has more than doubled since the reforms were passed). There is a common saying that a nation should be judged not by how well off its wealthiest are, but by how well off its poorest are–with guaranteed employment for those who want it, America would be doing much better on this count. It is past time to plug this obvious hole in welfare reform.

While no one would get rich from government employment, they would be able to live a comfortable life and provide the resources needed for their children to realize their full potential, fulfilling the promises of equality of opportunity and social mobility that America is built upon.

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The Politics of Division and Class-Based Affirmative Action

During a March 2008 campaign speech at the National Constitution Center in Philadelphia, Barack Obama said:

Most working- and middle-class white Americans don’t feel that they have been particularly privileged by their race. Their experience is the immigrant experience – as far as they’re concerned, no one’s handed them anything, they’ve built it from scratch. They’ve worked hard all their lives, many times only to see their jobs shipped overseas or their pension dumped after a lifetime of labor. They are anxious about their futures, and feel their dreams slipping away; in an era of stagnant wages and global competition, opportunity comes to be seen as a zero sum game, in which your dreams come at my expense.

Obama then noted the consequences:

When they hear that an African-American is getting an advantage in landing a good job or a spot in a good college because of an injustice that they themselves never committed…resentment builds over time.

Obama’s words ring just as true today, as highlighted by the Public Religion Research Institute’s 2015 American Values Survey. While the majority of Americans believe that historically marginalized groups face “a lot of discrimination”, there is a large portion of all Americans (25%) who believe whites face “a lot of discrimination”. Predictably, certain groups (Republican, Tea Party) hold these views even more strongly.

These perceptions fuel the “politics of division”–the “us” versus “them” mentality where “we” are hard workers who bust our butts just to make ends meet, while “they” are lazy “takers”. Of course at the macro level there are examples of “us” and “them” in every race / culture. But the diffusion of news sources and social media “echo chambers” counter this obvious truth, reinforcing the politics of division.

The politics of division always comes to the forefront during Presidential campaigns, when voters want to know what a candidate will do for “us”, and how they will punish “them”. In the current campaign season, national security and immigration concerns have made the politics of division even more acute.

These are not just philosophical considerations, the politics of division has real world implications. By turning issues that affect people of all races (globalization, stagnant wages, social immobility, etc.) into racial ones, people end up voting against their economic interests in the name of cultural / lifestyle considerations. When their economic situation consequentially continues to deteriorate, they double down on their scapegoating, moving further away from the real answers to their problems. And if those 25% of people (who believe that whites face a lot of discrimination) happen to come out and vote in droves, then something that sounds as absurd as “President Trump” could come to fruition.

So how do we counter the politics of division? While no one government program can fix race relations, one obvious program to reconsider–the one that Obama alluded to in 2008 and is before the SCOTUS today—is the current structure of affirmative action systems. I believe an economic class-based system would not only help bridge racial divides, but would also more effectively promote opportunity and social mobility.

Before you deride me for being at best misguided and at worst a racist, consider the following arguments:

Low Hanging Fruit:

A common argument against the current affirmative action model is that colleges pursue “low-hanging fruit”–minority students from good backgrounds who would have gone to college anyways. 

The number of minority students accepted through a class-based affirmative action system would be lower compared to the current model (although, due to racial inequalities in income and wealth, a class based system would still disproportionately benefit minorities). However, it is possible that a class based system could actually lead to greater total enrollment by minority groups, by targeting those who otherwise would not go to college. 

More research and testing would be needed to determine how a class-based system would impact total enrollment figures among various minority groups.

College Enrollment Rates by Race and Class:

College Enrollment Rates for Recent High School Graduates

2008 2013
All 68.6% 65.9%
High income 81.9% 78.5%
Middle income 65.2% 63.8%
Low income 55.9% 45.5%

…one possible theory offered by the analysis to explain the drop is that the perceived cost of college may be the issue at play here. “The rapid price increases in recent years, especially in the public college sector, may have led many students — particularly low-income students — to think that college is out of reach financially,” the report says.

“These data are even more worrisome with this fact in mind: while the percentage of low-income students in elementary and secondary schools is increasing, the percentage of low-income students who go on to college is falling,” the analysis says. “Said a bit differently, at the same time that low-income individuals are enrolling in college at lower rates, the majority of young adults in the precollege education pipeline are from those same low-income communities.”

While enrollment for “low income” students of all races has declined, enrollment rates for black students have been increasing:

casselman-college-race-1

Graduation rates are still much lower for black students, but affirmative action impacts enrollment, not graduation.

A college degree remains the best investment a person can make in themselves. The issue affecting social mobility is not getting minority students into college, it is getting “low income” students of all races to graduate from college.

Admittedly, affirmative action is only a small part of the solution. But due to its linkages to the politics of division, and that the current model seems to address an problem that no longer exists (low enrollment rates for minorities), affirmative action should be changed to a class-based system.

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(The question of how affirmative action should be used for private sector hiring is less clear-cut. Unlike college enrollment, minorities still face many barriers to gainful employment, some of them due to racial bias, although new research suggests this bias could be waning).


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Aftermath of The Baltimore Riots: Justice is Blind, Economics is Not

RIP Freddy Gray. Just 25 years old, a young man’s life was tragically cut short. We cannot let the ensuing chaos detract from this ultimate injustice.

I have seen people on social media try to justify what happened to Mr. Gray by bringing up his criminal history. Not only is his rap-sheet immaterial to his death, but it is despicable that people would drag a dead man’s name through the mud to make their politically / racially charged points. This man is dead, he cannot defend himself.

Furthermore, Mr. Gray’s criminal history of non-violent drug use / distribution is a common product of his environment. Not to make excuses for his past crimes, but his environment does offer some insight and context into his questionable choices.

Another meritless claim is that Mr. Gray’s spinal surgery led to his death. Mr. Gray did not die on the operating table, and without some outside trauma to his spine he would still be alive today.

Equally disgraceful to these meritless justifications of alleged officer misconduct are opportunists using Mr. Gray’s death to loot and riot. Mr. Gray’s family, for their part, has condemned the riots. Nothing fuels a counter-narrative like unlawful behavior; as the saying goes, with friends like these who needs enemies.

A Department of Justice investigation is ongoing, and I fully expect that after a transparent investigation those responsible for Mr. Gray’s death will be held accountable.

Yes America’s criminal justice system is flawed, particularly with respect to African American communities, but to assume that it is never capable of delivering justice belittles its many unsung successes. As of this posting, the 6 officers involved in Mr. Gray’s death have been charged with various crimes, including second degree murder and manslaughter, by Baltimore’s Chief Prosecutor.

I can understand rioting after an unfair ruling, but not before a ruling even takes place. Some will argue that as a white man it is not my place to understand, and while I like to think I am generally pretty good considering things objectively, they may have a point. I do however know this; when comparing the track records of violent and non-violent protests in achieving meaningful reform in America, the more effective approach has unquestionably been non-violent.

Those sympathetic to the rioters may argue that every successful non-violent protest was buoyed by a parallel violent movement. While it is impossible to completely decouple the effects of parallel violent and non-violent movements, I find this argument flawed. What positive role could violent protest possibly play in political decision-making when violent protests detract from public sympathy, and the state always has the overwhelming advantage in shows of force?

To the contrary, in my opinion meaningful change results from strong leaders utilizing their rights to publicly frame issues in ways that even those who may, in their private thoughts, be ideologically opposed cannot as publicly elected officials reasonably challenge.     

Regardless of my understanding, the riots have, in the words of Baltimore’s African-American Police Comissioner Anthony Batts, embarrassed Baltimore as a city. Fortunately the negative actions of a few misguided Baltimoreans should have no impact on either the Baltimore Country or DoJ investigations.

But ultimately it is not the short-term embarrassment or immediate economic consequences that should most worry those who wish to see Baltimore thrive. It is the long-term impact on investment that is most troubling, as the riots will likely exacerbate the very socioeconomic conditions which indirectly led to Mr. Gray’s death and the ensuing riots in the first place.

While properly served justice is “blind”, economic decision making considers every iota of information available:

The looting and burning of a CVS pharmacy and general store, which has been shown on just about every newscast in the past 24 hours, as well as the destruction of other shops, will tend to deter retailers from making new investments, economists warned.

“One of the things that’s been growing in the area has been the tourism aspect and nothing puts off tourists more than riots and curfews,” said Daraius Irani, chief economist at the Regional Economic and Studies Institute of Towson University in Baltimore.

“One of Baltimore’s credit strengths is it has a sizeable and diverse tax base,” said Moody’s analyst Jennifer Diercksen, noting the city’s universities, which provide thousands of very safe jobs – creating a stable base for Baltimore.

Still, the city lags the rest of the nation on a per capita income basis. Its per capita income was $24,155 for 2012, representing only 86.1 percent of the national median, according to Moody’s.

Its unemployment rate is higher than the U.S. average – according to the U.S. Bureau of Labor Statistics, Baltimore city’s unemployment rate in February was 8.4 percent versus the U.S. rate of 5.8 percent in that month.

Still, economists said one of Baltimore’s problems is the sharp demographic split between the successful elite and an underprivileged population.

“There is the vibrant, beautiful, urban community that is characterized by ongoing renaissance, and the poor, less educated, less visited, which faces more challenges,” said Basu. “Both Baltimores have been making progress in recent years.

“Despite the fact the destruction was in the other Baltimore, not the one visited by tourists, the damage economically in the near and mid term will affect both.”

When private investment lags, jobs and tax revenue for social programs and public goods take a hit. Regardless of your political affiliation or personal beliefs, one or more of these things are needed to promote social mobility and social justice.   

Baltimore’s leaders must now prove their mettle by utilizing the city’s strong fiscal position to attract investors. The city’s leaders must leverage both public money and the public relations boost private companies would realize by helping “rebuilding Baltimore” towards securing public-private partnerships that benefit Baltimore’s poorest areas.

The only silver-lining of these riots is that America is paying attention to Baltimore. While I think peaceful protests would have achieved this same outcome without the negative media coverage and economic backlash, the riots are now (hopefully) a matter of history. Moving forward, the attention Baltimore is currently receiving must be utilized as a positive.  

Another potential avenue for recovery runs through Federal government, which being within a stones-throw of Baltimore may be compelled to invest significantly in revitalizing the city. Of course these two sources of public funding–municipal and federal–should be carefully coordinated to ensure that maximum social benefits are realized.

It is exactly trying times like these when strong leadership is most needed. Let us hope elected officials in Baltimore and Washington D.C. are up to the challenge. Community and religious leaders also have an role to play, both immediately in catalyzing anger into a sustainable political movement, and in the long run by promoting the roles of strong social values, resilience, and personal and social accountability in poverty reduction.

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I am confident that criminal justice will be served in the Freddy Gray case, and that this case will help spur more widespread criminal justice reform across America.

Unfortunately, I fear the riots may have exacerbated the very problems that need to be addressed for more comprehensive progress on the social justice front.


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Transparency Report: Debt, Depression, and College Drop-Outs

The graphs in this blog come from a recent report co-authored by the Pell Institute and The University of Pennsylvania:

graduation rates

In addition to the direct (tuition, room and board, cost of living) and “opportunity cost” (foregone wages) of attending college, there is mounting evidence that suggests there is an emotional / psychological cost associated with taking out student loans.

Despite the intense interest in this issue among researchers, this is the first paper that attempts to understand the emotional cost of carrying student loan debt.  This question is, in fact, more fundamental than the others being posed in this genre of research, since it could help to explain the mechanism through which debt may be affecting other outcomes (i.e. emotional health, graduation rates).

Based on their analysis, the authors report, “cumulative student loans were significantly and inversely associated with better psychological functioning.”  In other words, individuals with more student debt reported lower levels of psychological health, when other things are held constant (including occupation, income, education and family wealth).  The effect is statistically significant, but it is quite small.  They also find that “the amount of yearly student loans borrowed was inversely associated with psychological functioning,” which implies that taking on debt is emotionally costly for students.

Unfortunately, this emotional / psychological “cost” seems to be affecting a greater number of incoming college students:

High numbers of students are beginning college having felt depressed and overwhelmed during the previous year, according to an annual survey released on Thursday, reinforcing some experts’ concern about the emotional health of college freshmen.

The survey of more than 150,000 students nationwide, “The American Freshman: National Norms Fall 2014,” found that 9.5 percent of respondents had frequently “felt depressed” during the past year, a significant rise over the 6.1 percent reported five years ago. Those who “felt overwhelmed” by schoolwork and other commitments rose to 34.6 percent from 27.1 percent.

Not coincidentally, the frequency and magnitude of student loan debt has increased greatly during this period of increasing student unease and depression, according to data released by the NY Fed:

More U.S. students continued to borrow larger sums for their college education last year, according to data from the Federal Reserve Bank of New York, while total student loan balances tripled over the last decade.

At 43 million, the number of student borrowers jumped 92 percent from 2004 to 2014, while their average balances climbed 74 percent, according to New York Fed researchers. The average balance was some $27,000.

Obviously correlation does not prove causation. But given the logical link between debt, depression, and dropping-out of school, these trends cannot be purely coincidental–more research on the subject is needed.

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“It’s a public health issue,” said Dr. Anthony L. Rostain, a psychiatrist and co-chairman of a University of Pennsylvania task force on students’ emotional health. “We’re expecting more of students: There’s a sense of having to compete in a global economy, and they think they have to be on top of their game all the time. It’s no wonder they feel overwhelmed.”

While I cannot speak personally about the burden of student loan debt, I have experienced depression first hand, and understand how being depressed could make one more likely to drop out of school.

Depression is particularly difficult to battle in a college atmosphere. The pressure to maintain a social life, despite anxiety and financial issues, can reinforce negative feelings associated with depression. The abundance of drugs and alcohol certainly does not help the situation either.

The general pessimism which accompanies depression compromises a person’s ability to clearly assess long term goals, such as completing a degree. Depression also affects ones cognitive abilities, hampering academic outcomes.

I can only imagine the pressure on someone who is both depressed and has student loan debt to consider; some combination of the two surely accounts for more low-income drop-outs than is currently recognized.

I had to take a semester off to get myself back in the proper state of mind to complete my degree; not everyone has this luxury. However, everyone should have the support needed to realize their educational and emotional potential.

Due to my personal experiences and knowledge of economics, I vehemently support President Obama’s proposed Community College plan. Lower income students could learn if pursuing a bachelor’s degree is “for them” without taking out tens of thousands of dollars in loans, likely leading to better emotional, educational, and economic outcomes.

Furthermore, community colleges are more likely to have the the social counseling and financial advising services missing from for-profit universities, which predominantly attract low income students.

collegetypebyincome

The Obama administration is attempting break the vicious cycle of student debt, emotional suffering, and dropping-out of college. Dropping out of college with student loan debt in a competitive global economy is a poverty trap for low income individuals, and has become a drag on economic growth in the macro.

By expanding mental health parity through the ACA, getting treatment for depression is no longer a luxury reserved for the wealthy. If our lawmakers pass a free community college bill, the synergy between these two public policies would go a long way towards bringing equity to America’s higher education system and reinvigorating the American Dream.


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Economic Outlook: Business Tax Reform is a Social Justice Issue

Since President Obama’s SOTU address, the term “middle class economics” has penetrated mainstream political discourse. These were not all new ideas, but rather a catchy phrase to sum up the priorities of the Obama administration and provide direction for the Democratic party going forward.

Of course, in a functioning democracy, broad based growth is not (or should not be) a partisan position. A recent NYT news analysis article highlighted how the G.O.P. has, in recent years, attempted to re-brand itself to be more appealing to low and middle class Americans (i.e. engage in “middle class economics”).

One potential avenue for such re-branding is compromising on a long overdue overhaul of the American tax system (the last major overhaul was in 1986). According to a recent Al Jazeera America poll, a majority of self-proclaimed Democrats (79%) and Republicans (68%) are “somewhat” or “very” willing to have their congressional leaders compromise on taxes.

Fortunately, bipartisan support for tax reform is not limited to the general public. Both the Democratic party and the G.O.P. have powerful voices in the Federal Executive and Legislative branches (respectively) advocating for compromise on tax reform:

G.O.P Stance:

“Though there are disagreements on the details, there is bipartisan support for tax reform in Congress,” said Orrin Hatch, Republican chairman of the Senate Finance Committee, at a conference for tax lawyers, analysts and economists.

“Members of both parties have expressed their support for a tax overhaul. And, I believe there is real momentum to get something done on tax reform this year, if we remain committed. And, believe me, I’m committed,” he said.

The U.S. tax code has not been overhauled thoroughly in 28 years. In that time it has become riddled with loopholes. As a result, tax avoidance is a growing problem.

At the same time, tax experts also generally agree that the system is so complex and often contradictory that compliance costs are excessive and economic productivity is harmed.

Hatch has laid out basic principles for reform. At the conference, he said he has the impression that Democratic President Barack Obama might be willing to do a deal on business tax reform alone, setting aside individual income tax issues.

“We need to lower corporate tax rates and transition toward a territorial tax system,” Hatch said. A territorial system is one that would exempt all or most of the foreign profits of U.S. corporations from the corporate income tax.

Democratic Party Stance:

Let me (Secretary of Treasury Jacob Lew) say at the outset that our entire federal tax code needs to be overhauled.  It has been almost 30 years since we last rewrote it, and since then, the tax system has become heavily burdened by loopholes and inefficiencies

I continue to believe that the best way to achieve reform today is to start with pro-growth business tax reform that protects and strengthens the middle class, lowers rates, simplifies the system, levels the playing field, and eliminates unfair and inefficient loopholes.

The fact is, there is a growing bipartisan consensus in Washington on how to achieve business tax reform, and we have a unique opportunity now to get this done.

On paper, we have one of the highest corporate income tax rates in the world, but in practice, there is a wide disparity in effective corporate tax rates.  Some corporations pay little or no income tax at all, while others pay the highest rate in the developed world.

Moreover, our business tax system is far too complicated — particularly for small businesses.  One estimate suggests that a small business, on average, devotes hundreds of hours plus spends thousands of dollars, to comply with the tax code.  We can and must reduce this burden.

Our business tax system actually skews business decisions in ways that make it harder for the economy to grow.  Too many investment decisions are shaped by tax considerations when they should be driven by what will best enhance productivity and growth.  Our tax code should favor the best businesses that create the most economic value — not those that are best at taking advantage of tax deductions.

The international tax system is often looked at in terms of either what is known as a territorial system, in which a company located in a particular country only pays taxes on income earned in that country, or a system like that of the United States, in which that company must pay tax on worldwide income, regardless of the country where it is earned.  The President’s proposal strikes a sensible balance, and would move us towards a more hybrid system.  What that means is we would create a new minimum tax on foreign earnings and make it simpler for a business to bring income back to the United States.  It would also tighten the rules so that companies cannot use accounting techniques to avoid paying taxes, such as shifting profits to low-tax countries (inversions).

Of course, there are tax expenditures that make sense and that need to be protected — like the New Markets Tax Credit, expensing for small businesses, and the Research and Experimentation Tax Credit.  But these tax incentives cost money and need to be paid for to maintain adequate revenue levels.  And we cannot apply a double standard, as some have proposed, where we permanently extend business provisions without paying for them, without permanently extending critical improvements to the EITC, child tax credit, and college credits that help working families at the same time.

Secretary Lew laid out the five pillars of the administration’s proposal for a new business tax system:

1. Lower rates and close wasteful loopholes.
2. Build on the resurgence of manufacturing in the United States.
3. Reform the international tax rules that encourage companies to shift income and investment overseas.
4. Simplify and reduce taxes for small businesses.
5. Fix “our broken tax code and increase investment in a way that maintains current revenues.”

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Sounds like both parties want many of the same things.

However, “revenue neutral” business tax reform does not go far enough. Looking at the Federal OMBs Historic Tables (p34-35) tells the story. Since 1934, individual income taxes have consistently made up 40+% of government receipts, while corporate income taxes have varied from as high as 30% to around 10% of receipts in recent years.

True this declining share is partially due to rising Social Security taxes, but since those are split evenly between employers and employees, it is clear that the burden of financing our government has shifted from corporations to people and small businesses. Looking at contributions as a % of GDP (p36-37) further supports this narrative.

These meager contributions by corporations are symptoms of an outdated and unfair tax code, and should not be enshrined in a new one.

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Lower tax receipts skew the debate over how to invest in America and her people. Operating from a position of high debt and primary deficit, it is easy to drum up fears that accommodative economic policies will result in rising borrowing costs, ballooning deficits, and [hyper]inflation (despite the fact that America is facing the opposite–historically low borrowing costs, a shrinking deficit, and a very strong dollar).

Implementing business tax reforms would help push America into primary surplus, changing the context of this national debate.

I do not claim to know the exact amount or proper allocation of resources between public goods (education, infrastructure) and welfare programs needed to achieve greater “equality of opportunity” / social mobility. But I can say with confidence that more resources need to go to these causes, as the status-quo has long failed the vast majority of Americans.

The sooner we can have a clear-eyed debate on what policies are needed to promote broad based, sustainable American growth, the better. Holding back this debate, aside from uncompromising politicians, is a failure to overhaul our tax code.

In the interest of balance, work also needs to be done on individual tax reform, to fix high marginal tax rates affecting people who benefit from welfare programs. However, the importance of this issue has been, in my opinion, overblown by those on the political right.

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Lastly, the Congressional Budget Office’s use of “dynamic scoring”, as it as been pushed through by the G.O.P. dominated congress (using it for tax proposals but not for spending bills) is another impediment to achieving social justice through tax reform and fiscal policy. 

Van Hollen (D-MD) added that while the bill requires the CBO to run dynamic analyses on major bills, it specifically excludes appropriations bills. He said that exemption shows that Republicans want to downplay how federal spending on education, infrastructure and other areas can also help the economy.

Ryan replied by saying that exemption is there because subjecting all spending bills to dynamic scoring would create significantly more work for the budget office. Rep. Gerry Connolly (D-Va.) proposed an amendment to include major spending bills, but the House rejected it 182-214.

Ryan’s argument is unfounded and offensive to the talented people employed by the CBO. It is a weak attempt to defend wealthy interests, while downplaying the awesome potential of the American people.

Ideally, this method would be implemented for both tax and spending proposals. If that is not possible, dynamic scoring should not be used at all.


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Transparency Report: Reconciling The Micro and Macro Narratives on Police Reform

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https://i0.wp.com/thespeaker.co/wp-content/uploads/2014/12/ScreenHunter_1802-Dec.-08-17.59.jpg

Original article:

Statistically, New York police shoot more often at blacks than at whites–by about 700 percent. But, statistically blacks are armed and shoot at police more often than whites–by over 700 percent, according to national statistics and the NYPD’s annual firearms discharge report.

Recently, former New York City mayor Rudy Giuliani commented on the recent police shooting deaths in New York and referenced the statistic that, “Ninety-three percent of blacks in America are killed by other blacks. We’re talking about the exception here.”

In the past 15 years, NYPD shootings have resulted in 179 deaths. In other words, 179 people were killed by police while on duty out of 75 million calls.

“Again statistically speaking this is not a significant number,” commented [John Jay Criminal Justice Professor Dr. Maria Maki] Haberfeld, “given the fact that many of these shootings were justified because the people who were shot were armed and dangerous.”

Statistically. the main killer of blacks when it comes to violent deaths is other blacks. US-wide, around 8,000 blacks were killed every year between 1976 and 2011, and 94 percent of those were killed by other blacks. Of those 8,000 around 2.8 percent were killed by police.

“The overwhelming majority of black victims are killed by black perpetrators and NOT the police,” noted Haberfeld.

Haberfeld stated that she did not feel that numbers would provide the whole picture, however.

“In general, I believe that police work cannot be simply understood by the analysis of sheer numbers.”

I think this is an instance of two sides shouting past each other, instead of engaging in meaningful dialogue. I cannot say I am surprised, not only is criminal justice reform is an emotional issue, talking past your opponent has become the norm in modern public discourse.

Most officers do the right thing–they are hard working, fair, and just. But those who are not tarnish the badge, undermine efforts to build trust between police and society, and ultimately make an inherently dangerous job even more dangerous–they must be held accountable.

When Dr. Haberfeld callously appeals to the “statistical insignificance” of NYPD shootings, she is missing her own point. “Police work cannot be simply understood by the analysis of sheer numbers”, and neither can police homicide rates–these numbers represent peoples lives.

If even one innocent person is killed by someone whose job description is “to serve and protect”, and that person walks away with impunity, this should be unacceptable to anybody who believes in the notions of justice and rule of law.

I believe most people simply want officers held to the same standards as the law abiding citizens they serve, particularly when it comes to violent crimes. When a police officer commits a violent crime, it would be in everyone’s best interest (except the officer who committed the crime) for that officer to be held accountable. As I said in my last post, officers should not be above or below the law, but equal to ordinary people.

However, by definition society holds all people to a higher standard than violent criminals, and police officers should be no exception. When Rudy Giuliani says something to the effect of “what about all the black on black crime?”, he is making a false equivalence. We do not have to choose between reducing minority crime rates and reforming the criminal justice system (in fact, these issues are often closely related)–it is not an either / or situation.

Yes most homicides of black men are “black on black”. It is not that NYC or America is not addressing the socioeconomic and cultural underpinnings of minority crime. It is that these issues are multifaceted, affected both by policies at different levels of government and by people who are often at odds about how to achieve progress (not to mention spoilers who purposefully undermine progressive policy in order to maintain the status-quo for personal benefit).

It is simply much easier to enact change in the criminal justice system than throughout society as a whole. The former is comprised of a number of small, organized institutions that must adhere to changes mandated by overseeing bodies, while the latter numbers in the hundreds of millions and is as variable as free will itself.

Two reforms, special prosecutors for grand jury proceedings police officers, and lapel cameras, could lead to meaningful improvements in the criminal justice system with marginal investments. Lapel cameras would vindicate the use of necessary force, while providing an important piece of evidence for holding “bad” cops accountable (just because the Eric Garner video did not lead to an indictment does not mean lapel cameras are not an important piece of the criminal justice reform puzzle).

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Reconciliation begins with the extension of an olive branch. It is up to police departments to extend this olive branch by deliberating in good faith with community leaders about how to build trust between officers and the communities they serve. The first move falls on police departments, because they are more organized and disciplined than their opposition.

Once this branch (or branches, as it must happen around the country at the municipal level) is extended, it is up to community leaders to rise to the occasion, and take the risk of pursuing reasonable reform rather than making absurd demands / publicly demonizing police officers (and vice-versa).

There is enough blame to go around for the criminal justice reform movement to grind to a halt, resulting in a status-quo that is increasingly dangerous for both police officers and the minority communities they serve.

There is also a vast swath of middle ground between police departments and community leaders–if only we can learn to deliberate instead of shouting past one another. 


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Conflict Watch: Violent, Unorganized Protest is the Bane of Legitimate Grievances

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Original article:

 The unrest in Ferguson began one week ago, on the quiet side street of Canfield Drive, when residents were startled by a series of gunshots and poured out of their homes. They watched and wept as the police stood guard for hours over the body of 18-year-old Michael Brown, splayed face down in the street.

But over time, the demonstrations have changed to become an amalgam of peaceful protesters — some furious about what they say is endemic abuse of African-Americans by the police — and separate groups that have carried out acts of violence and looting.

Early Saturday morning, the divisions became even more evident during a four-hour standoff with the police. One group, some of its members wearing bandannas, broke into a liquor store and left clutching bottles of alcohol. But at other retail outlets, like a beauty supply store, demonstrators blocked the looters’ way.

Night after night the streets have attracted disparate groups, some from within Ferguson, and some from hundreds of miles away.

Many of those on the street say they have shrugged off guidance from elders in the African-American establishment, and even from the Brown family, which has repeatedly pleaded for calm.

One protester, DeVone Cruesoe, of the St. Louis area, standing on Canfield Drive last week said, “Do we have a leader? No.” Pointing to the spot where Mr. Brown was killed, he said, “You want to know who our leader is? Mike Brown.”

Many African-American civic leaders in St. Louis said they were frustrated by their inability to guide the protesters.

Some people have suggested that there is a generational divide. George Richardson, who works for the building department in East St. Louis, said the younger protesters were acting independently, ignoring advice from their parents.

“There is a gulf between the leadership and the boots on the ground,” Mr. Richardson said. “These kids do not understand why the nonviolence movement is the best way to get done what we need to get done. They don’t really know what to do.”

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Violence and destruction lend legitimacy to strong handed responses by the authorities (I am not saying I necessarily agree these actions are just or proportionate, but rather stating the stance many policy makers take). It is extremely unlikely that anything justified the killing of Michael Brown, but more information must be released through independent investigation before anything can be said beyond speculation. Certainly nothing justifies the violence against, and the imprisoning of, peaceful protesters and members of the press.

However, when violent protesters and looters–opportunists who use the legitimate grievances underpinning the Micheal Brown murder and the murder itself for illegitimate ends–become indistinguishable from peaceful protesters, the indefensible becomes defensible. Suddenly, states of emergency and curfews seem not only justifiable, but indeed necessary to protect the general public.

What happened in Ferguson is not a generational issue, but an issue of social justice and accountability for those in power. Getting the protests back on track requires strong youth leadership in Ferguson; only youth leaders who stand for legitimate causes can end the perceived generational rift and expose it for what it truly is.

Young people tend to be passionate, impulsive and impressionable–not a mix of traits naturally lends itself to peaceful protest. However, young people are also likely to be pragmatic, have long term goals, and listen to other young people. Youth leaders must emerge and denounce the violence / destruction, however instantly gratifying it may seem to some misguided youths. Failure to do so risks having legitimate grievances overshadowed by opportunist, and is a betrayal to both the legacy of Michael Brown, as well as broader Civil Rights and social justice movements.

I am sure these youth leaders exist; they must be empowered by those with the resources and desire to see social justice served. There is a reason Martin Luther King is remembered as an American hero, and Malcolm X as a polarizing figure. The argument between whether “hard” and “soft” power is the better avenue for change, at least in America, was decided decades ago.


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Transparency Report: Of GM, and Women In Power

Those who follow trends in development have no doubt heard of the myriad benefits associated with empowering women. In theory, women tend to be more socially conscious / accountable, long-term thinkers than men. Many conditional cash transfer (CCT) programs in developing countries give cash exclusively to women, believing they will use the money in more constructive ways.

From the UNDP website:

Equality between men and women is more than a matter of social justice – it’s a fundamental human right. But gender equality also makes good economic sense. When women have equal access to education, and go on to participate fully in business and economic decision-making, they are a key driving force against poverty. Women with equal rights are better educated, healthier, and have greater access to land, jobs and financial resources. Their increased earning power in turn raises household incomes. By enhancing women’s control over decision-making in the household, gender equality also translates into better prospects and greater well-being of children, reducing poverty of future generations.

Some fast facts about women in power (for a more “macro” picture, check out the UNDP’s Gender Inequality Index (GII), which weighs traditional Human Development Index (HDI) scores for gender equality, offering a side by side comparison):

Public Sector:

  • 20.9 per cent of national parliamentarians were female as of 1 July 2013, an increase from 11.6 per cent in 1995
  • As of June 2013, 8 women served as Head of State and 13 served as Head of Government.
  • Globally, there are 37 States in which women account for less than 10 per cent of parliamentarians in single or lower houses, as of July 2013

“More women in politics does not correlate with lower levels of corruption, as is often assumed. Rather, democratic and transparent politics is correlated with low levels of corruption, and the two create an enabling environment for more women to participate” — UN Women

Private Sector:

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General Motor’s new CEO Marry Barra has handled GM’s recent safety issues / vehicle recall with the remorse and accountability we should demand from all people in power:

General Motors Co announced new recalls of 1.5 million vehicles on Monday and in a virtually unprecedented public admission by a GM chief executive, Mary Barra acknowledged the company fell short in catching faulty ignition switches linked to 12 deaths.

“Something went wrong with our process in this instance, and terrible things happened,” she told employees in a video message posted online. Barra said the company is changing how it handles defect investigations and recalls.

In the last two months, GM has recalled more than 3.1 million vehicles in the United States and other markets.

Barra previously apologized for GM’s failure to catch the faulty ignition switches sooner. In Monday’s video, she said GM is “conducting an intense review of our internal processes and will have more developments to announce as we move forward.”

GM said the new recalls resulted from Barra’s push for a comprehensive internal safety review following the ignition-switch recall.

“I asked our team to redouble our efforts on our pending product reviews, bring them forward and resolve them quickly,” Barra said in a statement on Monday.

On Friday, the automaker was hit with what appeared to be the first U.S. class action related to the ignition-switch recall, as customers claimed their vehicles lost value because of the ignition switch problems. The proposed class action was filed in a Texas federal court. Other plaintiffs’ lawyers say they are preparing to file similar cases in the coming days.

To be sure, Miss Barra’s admissions of wrongdoing do not come solely out of the kindness of her heart. There has been considerable negative publicity surrounding GM in recent weeks, most notably concerning the 12 people who died due to ignition related issues (another study found that 303 people died due to airbag malfunctions in GM vehicles, which the company has yet to address). In addition to class action lawsuits, GM is facing a criminal investigation from the U.S. Department of Justice.

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There can be no denying that GM was negligent in its internal processes. I think most people expected the typical corporate response: an announcement of “regret”, a recall, and silence until the legal process played out.

However, Miss Barra has gone above and beyond what we have come to expect from people in power; a presentence admission of wrongdoing and pledge to change internal processes is a breath of fresh air. Such accountability requires courage and long-term thinking, but is ultimately much more beneficial for all parties involved.

The cynic could say that GM is simply in damage control mode, or that perhaps they brought in Miss Barra because they saw this oncoming shit-storm. Somehow, despite the issues I cover, I am not a cynic; perhaps I a fool or a Pollyanna. I believe that since the future is yet unwritten, there is a chance for people power and social justice to prevail over the forces of greed. In fact, I see trends in governance and technology making this an inevitable (if not slow moving) shift.

As the UN Women quote above highlights, having women as symbolic placeholders does not itself create change. While high ranking positions are the most visible and make the decisions with the greatest social impact, gender inequality must be addressed from the ground up, starting with the world’s most vulnerable women. Breaking power imbalances is relative; for some it is holding a top position in the public or private sector, for others it is enjoying basic human rights they currently do not enjoy.

The push for greater gender equality should also catalyze self-reflection of future male leaders; if men want to hold positions of power in the future, they would be wise to embrace more long-term, socially conscious / accountable outlooks.