Monthly Archives: August 2013

The Republican Empathy Gap

The “War on Women” debate gives us an interesting insight into the Republican Party. The “War” began when Republicans voted against the Lilly Ledbetter pay act, then they refused to renew the Violence Against Women Act, then tried to prevent women from accessing birth control. Then they said some really stupid things about rape and were generally buttholes about the whole business. But now the Republicans think they have ammunition against the Democrats. “We just pass legislation that make it women harder to get fair wages, get an abortion in the case of rape and report sex abuse,” they say, “Democrats hurt real women by harassing them at work.” As the AP oddly puts it, “While the controversies surrounding Akin and Murdock focused on words, the spectacles involving Weiner and Filner center on actions.”

But the Akin controversy wasn’t about “words.” It was about legislation. Akin endorsed the dreadful “No Taxpayer Funding for Abortion Act,” which would have added the qualifier “forcible” before rape, in an attempt to change the definition of the word. “Words,” after all, communicate ideas, which serve as the basis for policy. By implying that public policy debates are only so many “words” detached from policy, the Republicans and AP illustrate the profound disconnect in Republican politics.

Republican governors who chose not to accept the Medicaid expansion and therefore leave millions of human beings without healthcare consider these people merely pawns in the political game. Bob Woodward has noted has much in his quintessential book on the debt ceiling debacle. Republicans, he witnessed, simply didn’t care about the possibility that the U.S. might default on the debt, some gleefully welcomed it. Some people just want to watch the world burn.

It’s tempting to place this observation in the larger picture of Republican ideology. Ezra Klein and other liberals constantly chide this Congress (and the last one) for how little legislation they have passed. But for Boehner, the test will be how much legislation they repeal. Because Republicans believe the government can do no good, allowing it to shutdown or savagely cutting benefits are not bad policies, rather, this is the goal. Republicans want to systematically dismantle Social Security, Medicare and Medicaid, slowly starving the beast of government. Like ardent Stalinists, no human cost can stop them.

Of course, this was not always the case. Nixon wanted a guaranteed minimum income, as did Milton Friedman (he proposed the Negative Income Tax). Eisenhower built the Interstate Highway System and invested heavily in science and technology (he also appointed William Brennan to the Supreme Court).

Much of this may be a result of an empathy gap – few politicians actually see the people affected by their programs, especially when they remained ensconced in D.C. That means politicians must rely on either anecdotes from the campaign trail and those with whom they interact. This creates an empathy gap, with Woodward noting that Cantor was concerned about small business owners and Obama poor mothers on Medicaid.

To understand the empathy gap, we can turn to the unadulterated Id of the Republican Party, Fox News. In that Daily Show clip, we see a bunch of rich people saying really dumb and awful and disconnected things about poverty and John Oliver does a great job tearing them a new one. But, in the second half of the clip, we get two delightful “pundits,” one arguing that, it’s not McDonald’s job to pay to feed her kids, “no matter how many she has.” It’s an interesting twist on Reagan’s race-baiting welfare queen tactic, although now the woman has a job, and just wants to unionize. The other “pundit” in particular stands out, Mrs. Tracy Byrnes, who excoriates those on the minimum wage, and yet feels intense empathy for those who make $250,000 and can’t afford to put their kids through college. $250,000, she explains is, “actually close to poverty.” Read that again (and note that $250,000 actually puts you in the richest 5% of earners in America).

But this isn’t actually entirely surprising to me. I know many people who assume that $100,000 is the median wage ($53,000 is), or that everyone goes to college, or that it’s not weird for their parents to still be paying their bills at 26. The reason Tracy Byrnes thinks that $250,000 is close to the poverty line ($23,283 is the poverty line, meaning that $250,000 is about 975% more than poverty) is because Tracy Byrnes, like most Fox News anchors, pundits and politicians, have never been, or met poor people (or know how to do basic math). In America, as incomes have diverged, so have social opportunities and social interactions. We live in a skybox nation, where the rich and the poor very rarely meet and therefore understand little about each other. For Fox News anchors, a minimum wage job is a fun thing you do over the summer to get out of the house; for most people, it’s their livelihood.

The empathy gap is thus rooted in another social phenomenon – our society’s dramatic increase in inequality. David Madland argues in Democracy,  “Studies across U.S. states, of the United States over time, and across countries all find that societies with a strong middle class and low levels of inequality have greater levels of trust of strangers.” This trust brings about economic advantages. Madland cites one study which found, “a 10 percentage-point increase in trust increases the growth rate of GDP by 0.5 percentage points” over five years.” International studies have confirmed this effect.

This decline in social trust begins a downward spiral. Bo Rothstein and Eric Uslaner note in a fabulous paper for World Politics, “The best policy response to growing inequality is to enact universalistic social welfare programs. However, the social strains stemming from increased inequality make it almost impossible to enact such policies.” The lack of social trust caused by inequality makes increasing opportunity harder (as I’ve noted above) which further erodes social trust and increases inequality. Wealthy citizens see themselves as “makers” and the poor as “takers,” while the poor see the rich as selfish. Rothstein and Uslaner continue later, “Unequal societies find themselves trapped in a continuous cycle of inequality, with low trust in others and in government and policies that do little to reduce the gap between the rich and the poor and to create a sense of equal opportunity.”

Other research has confirmed this “empathy gap.” Last year, Paul Piff caused quite a stir when he published his finding that, upper class individuals were, more likely to break driving laws, take goods from others, lie in a negotiation, cheat and endorse unethical behaviour (this, of course, stands at odd with Charles Murray’s rather naive belief that the rich are rich because of their superior moral scruples). Piff summarizes his conclusions, “While having money doesn’t necessarily make anybody anything, the rich are way more likely to prioritize their own self-interests above the interests of other people. It makes them more likely to exhibit characteristics that we would stereotypically associate with, say, assholes.”

Most social phenomenons can’t be pegged to a single event. But the Republican Party’s shift from empathy to disgust and from viewing government as a force for good to a necessary evil, although developing for a long time, is aptly summarized in two lines from Ronald Reagan’s A Time for Choosing speech. The great orator said, “Each year the need grows greater; the program grows greater. We were told four years ago that 17 million people went to bed hungry each night. Well that was probably true. They were all on a diet. But now we’re told that 9.3 million families in this country are poverty-stricken on the basis of earning less than 3,000 dollars a year.” This was much more radical then than it seems now. Poverty, had for decades been, “not a trait of character,” but rather something,  “created anew in each generation, but not by heredity but by circumstances.” Now it was a choice, not something to war against, but something to mock. As Noam Chomsky noted, some victims are considered “worthy” and others “unworthy.” With those simple words, Reagan created a large class of “unworthy” victims that do not deserve our help or empathy. Government, he decided could not help them. Is it any wonder that inequality began it’s increase under Reagan and has spiralled out of control ever since?

 Contact Sean: seanadrianmc@gmail.com

 

 

 

NBC and CNN Should Call Reince Preibus’ Bluff

Quick catch-up for those who are behind: Reince Priebus (chairman of the RNC, and whose name makes me extra thankful for Google) has written an open letter to CNN and NBC threatening to boycott the networks from hosting any primary debates if they show the documentaries they are currently creating about Hillary Clinton. This, he says, is because CNN and NBC are “not in the business of promoting our party” (which apparently, they should be).

Over at Slate, Dave Weigel (unironically) suggested that Republican candidates should only debate each other at Fox News, because, ensconced in a safe bubble of Islamophobia, class hatred and paleo-racism, they can be more open, like your grandpa with his golf buddies. This he equates to the 2008 Democratic primary block-out of Fox News. “Be fair: This was the logic Democrats used to kill the Fox debate. They viewed the debate as an attempt to legitimize a network they saw as illegitimate,” Weigel wrote. Certainly the same logic, but not the same facts. NBC and CNN are boringly non-partisan. CNN accepts any conflict in an almost humorously postmodern way, and they regularly let Paul Ryan get away with decrying the $750 billion cuts to Medicare that he advocated for!

If CNN and NBC back down here, and refuse to play the documentaries, they’ll be accepting the old right wing drivel about how the “leftist,” “lamestream” media is out to destroy conservative values and aid Obama in an Islamic Socialist coup.

The truth, from essentially every source I can find, is that polarization in the U.S. is real, and it’s asymmetric. In every civilized nation, our Democratic party would be on the right. In Germany, the conservatives happily deal with unions; In Britain and France, the right would not even challenge the right to universal health care.

Priebus wants to pull CNN and NBC from the center. His goal, in his words, is to “control the referees.” But that’s not what a political party should do. Maybe he’s confused because Fox News gladly regurgitates the Republican Party’s talking points, and assumes that’s what journalism is. It’s not.

I’d be happy to see Republicans debate exclusively on Fox News. The more the Republicans shout into an echo chamber of cantaloupe calves, forcible rape, makers and takers, we built this, and so on, the further away they get from the American public, and the sooner we can start working on ending the war on drugs, passing comprehensive immigration reform, dealing with the debt and ensuring universal health care. I don’t particularly like Democrats, but they’ve never held the nation’s sovereign debt on the line to guarantee a tax break for the richest .01% of the population.

If Priebus wants to marginalize his increasingly out-of-touch party, who are we to stop him? I say, go further! If NBC or CNN runs these documentaries, no Republican candidate should ever debate or appear on their stations.

To paraphrase Napoleon, “When a fool is digging his grave, don’t take away his shovel.”

Republicans Have No Clue How Businesses Work

The Republican party has alienated many groups with its antics: women, blacks, Latinos, poor people, pensioners and young people, to name a few. However, it’s often agreed that they work for two groups: really rich people and entrepreneurs. These groups, they say, drive the economy, and bring the middle class along for the ride.

Republicans claim to be the party of entrepreneurship: by cutting taxes, red tape and regulations, they make it easier for small businesses to get started. The problem with Democrats, they claim, is that, by constantly expanding social welfare programs and establishing universal health care they create uncertainty (voting 40 times to repeal said legislation does not, apparently, create uncertainty) which makes entrepreneurs less likely to hire.

This is a pretty common trope. Here’s an interview with an unnamed 20-something wannabe entrepreneur, from the Acton Institute, who decries government intervention (especially, surprise, Obamacare) as the reason potential entrepreneurs will take a job with an established company rather than striking out on their own.

But, in fact, this is all backwards. Entrepreneurs need two things: 1) demand for their product and 2) a suitable safety net if they fail. Questions about complexity, healthcare for employees, taxes, etc. are those that badger relatively successful businesses. In truth, Republicans don’t promote entrepreneurship, they help out already successful businesses.

First, by exacerbating inequality, Republican policies destroy demand. One entrepreneur (a successful one, not an unnamed 20 year Conservative college student) writes, inBloomberg Businessweek:

My investment portfolio includes Pacific Coast Feather Co., one of the largest U.S. manufacturers of bed pillows. Like many other manufacturers, pillow-makers are struggling because of weak demand. The problem comes down to this: My annual earnings equal about 1,000 times the U.S. median wage, but I don’t consume 1,000 times more pillows than the average American. Even the richest among us only need one or two to rest their heads at night.

This is the central tenet of “Middle-Out Economics” or the idea that true growth comes not from the top 1 percent, but rather the bottom 99 percent. Even the rather conservative Martin Feldstein has noted that the U.S. recovery has been stalled by inadequate demand. Two studies lend strong credence to the thesis of Joseph Stiglitz and other economists who assert that the poor and middle-class have a higher marginal propensity to consume than wealthy individuals. Entrepreneurs should therefore prefer more income in the hands of middle-class and poor individuals.

The second things entrepreneurs need is a safety net if they fail. Not everyone can go rely on financing from their parents and rich acquaintances. For most Americans, the safety net is governing programs. While the Affordable Care Act may create some uncertainty for small businesses, it creates more certainty for those who are afraid that losing their job might mean that their pre-existing condition will leave them uninsured. It creates more certainty for those who can now qualify for Medicaid. It gives young entrepreneurs more certainty that they can stay on their parent’s plan. Research by Robert Fairlie, et al, shows that men just under 65 are far less likely to become entrepreneurs than men just over 65, and believe that access to health insurance through Medicare is the important factor. Research by Alison J. Wllington points to the fact that those who obtain health insurance through a spouse are more likely to be self-employed than those who do not.

Recently, Helaine Olen noted that 1 in 5 college graduates can’t repay their student loans. That’s a really big deal, because these students are more likely to take any job that comes their way to pay off their loans than invest in themselves. Yet Republicans aren’t concerned about the looming (student) debt crisis or any of the practical solutions to solve it.

Essentially, Republican policies will help you if you’ve already got an established business, but don’t like paying taxes (or your employees). But is that enough? If we look back at how their policies have worked, the results are dismal. I used the most recent BLS data to calculate how many seasonally-adjusted private sector jobs each President created in their term (beginning in February, since they normally take office in late January). There’s obviously a limit to how much one president can do to create jobs, but the numbers are still telling:

The totals are even worse: Democrats created 45 million jobs, while Republicans created only 23 million, and Republicans actually had more time in the White House. But what’s truly interesting about this data is that even if you take the highest numbers under Bush (in January 2008, before the recession) he still created only 3.9 million jobs. And remember he did that after coming into office with great economic indicators and a balanced budget. So much for supply-side economics. On the other hand, Obama, who was dealt far more strife, has focused more, although not entirely on the middle class — and so far, this nonsense about the “Obama economy” isn’t even close to true. If job growth keeps improving like it has over the past year (at about 2 percent), then by July of 2016, Obama would create more than 12 million jobs over his 8 years. Larry Bartels finds in his book, Unequal Democracy, that income growth is not only higher when a Democrat is in office, it’s also more equally distributed.

Of course, when presented with this data, Republicans will generally claim that underlying economic conditions drive job growth, which is true. But it is also true that Bush’s supply-side, budget-busting tax cuts didn’t produce much in the way of economic stimulus and job creation, while Obama’s demand driven stimulus has.

Fascinating new research on the industrial revolution finds that it was hardly inevitable that the Industrial Revolution begin in England; rather, the authors find that poor laws, by increasing demand and providing a (minimal) safety net, facilitated rapid economic growth. In America, the post-war growth period was facilitated by high demand (from high wages), low inequality, cheap education and a new social safety net.

The truth is that this trope, like most Republican tropes, is aimed at securing more wealth for the richest Americans. Americans who want to participate in the American Dream need a safety net to fall back on. That means health care shouldn’t be tied to employment, unemployment benefits should be generous, borders should be open, education should be cheap and readily available, and policies should favor a strong middle-class. Which party stands for those things?

This piece originally appeared on Salon.

E-mail Sean @ seanadrianmc@gmail.com

The Moral Case for a Higher Minimum Wage

The minimum wage debate is a shining example of the left’s vigour and academic prowess. There has been an extensive and effective appeal to the various economic data that blast gaping holes in the argument that a higher minimum wage will somehow increase unemployment or drive prices through the roof.

Economists on left has aptly noted that productivity has increased dramatically over the past 30 years, with no similar increase in wages (Schmitt). Others (Card and Krueger, but more recently Dube et al) have noted that apocalyptic predictions of mass unemployment have proved wrong in the past. Economists of the middle-out persuasion have shown how a higher minimum wage would stimulate demand.

But, in a sense, we don’t really have to prove this. When debating the Kyoto protocol we don’t ask whether unemployment will drop by 1% or 2%, but whether it’s morally appropriate for two dozen or so developed nations to benefit from GHGs that will primarily affect the world’s poorest people. When Ford executives released the Pinto, it would have been preferable had they asked, not whether the car would be profitable, but whether it’s moral to knowingly sell a deadly product.

Similarly, even were some businesses to fail, unemployment rise and prices increase, a higher minimum wage could still be an acceptable policy. We must ask ourselves whether we want to live in a society when the poorest working people can not afford to purchase basic necessities. Or, put differently, should a business that cannot afford to pay its workers enough to survive be allowed to exist, grow and prosper? This question is not entirely absurd, and we have had to ask, and answer similar questions before. We once had to ask ourselves whether a company that could only remain profitable by releasing toxic chemicals into the air should be allowed to exist. We answered no. We once had to ask ourselves whether a company that could only remain profitable by employing child labour should be allowed to exist. We answered no. We once had to ask ourselves whether a company that could only remain profitable by paying women too little, pushing workers too hard, or maintaining a dangerous workforce should be allowed to exist. We answered no.

It would seem rather boorish to suggest today that were McDonald’s to stop hiring 10 year olds to cook burgers, its prices would have to rise 68 cents and therefore we shouldn’t ban child labor. And yet, because of a similar price rise, workers at McDonald’s must work two jobs or go without health insurance. That means that what many Americans take for granted: time to read, enjoy coffee in the morning and play with their children are all luxuries for the employees from whom we purchase burgers. Is that the type of society we want to live in? One in which workers at Wal-Mart must also accept food stamps to keep your “everyday low prices” around?

Walmart and McDonalds brutally crush any attempt for workers to get a decent value for their time and labor. This same brutality occurred frequently during the industrial revolution, a time of environmental degradation, worker abuse and widespread inequality.

This is the left’s strongest argument. Markets are not divine incarnations of revealed wisdom; we must modify them to suit our demands as a society. When markets produce negative consequences, we don’t accept them and move on, we demand public action. So it is now. Some on the left have suggested some sort of Negative Income Tax as a solution (and I would heartily accept a guaranteed minimum income, it would compliment a higher minimum wage); but this fails to get at the problem. There should be a dignity in labor. Those who work should have enough money to eat, live comfortably and enjoy time off. I’m rather tired of wealthy writers, economists, politicians and businessmen who believe that they should enjoy these benefits, but other members of society should not. I’ve always held the relatively simple belief that profits should always be in service to people, not the other way around.

On the Economist blog, however, Will Wilkinson writes that, “Subsidising the worker, to bring her up to a certain baseline minimum, counts as a subsidy to the employer only if we think that was the duty of business all along—to pay workers not only a wage commensurate with the market value of their labour, but also sufficient to finance a life of a certain dignity and security.” His argument against the living wage is based on two dubious propositions; the first is that businesses will pay employees commensurate with the value of their labor (belied by the empirical data) and the second, that businesses have no obligations further than that. The market is once again, “the institutionalization of irresponsibility.” If a corporation can make a profit, it should, human considerations be damned!

The great economist, E.F. Schumacher once noted that we should study economics “as if people mattered.” Economics can tell use how to stimulate aggregate demand, estimate inflation and predict GDP. But it can’t tell us what we as a society should value. Economics can tell you that one billionaire buying a yacht for a $10 million dollars will stimulate the economy to the same extent as ten thousand working-class families purchasing $100 worth of diapers. But they can’t tell you whether one purchase is morally superior. That is for us to decide.

Those who argue against raising the minimum wage are not seeking some moderate middle ground; they are arguing to abolish it. The value of the minimum wage has slowly eroded to the point that today it is worthless. Liberals and progressives still clinging to Victorian notions of progress are under the illusion that we have become a more compassionate, more fair society. Rather, the fact that we must still advocate for the minimum wage, progressive taxation, unions and Social Security – programs taken for granted decades ago – indicates how barbaric our society has become. That is why raising the minimum wage is the only moral option available to us today.

 Contact Sean: seanadrianmc@gmail.com

 

Milton Friedman: Father of the Tea Party?

Today is the 101st anniversary of Milton Friedman’s birth, and it will be widely celebrated among the vast number of Americans who march in Tea Parties and wear tricorn hats in public. He will be hailed by the vast number of “libertarian populists” now burgeoning within the Republican ranks. But the new “libertarian populism” is increasingly at odds with the possibility of a shared future.

Libertarian populists love markets. One of their favorite proposals is privatization: If there is a problem, they look to markets to solve it. Milton Friedman wrote, “The most important single central fact about a free market is that no exchange takes place unless both parties benefit.” The statement fails to take into account that parties can only perceive potential benefits and, in the case of poor workers, may be unable to find the optimal market exchange. But there is a deeper problem.

The problem is that markets, being amoral, are necessarily immoral. Markets are essentially utilitarian, they maximize “happiness,” and each individual is free to choose what makes him or her happy. But what happens when one man’s pleasure harms another? As E.F. Schumacher writes, “Call a thing immoral or ugly, soul-destroying or a degradation to man, a peril to the peace of the world or to the well-being of future generations: as long as you have not shown it to be ‘uneconomic’ you have not really questioned its right to exist, grow, and prosper.” That is, as long as companies can make money drilling into Canada’s tar sands, who are we to question them?

Schumacher notes the core libertarian dilemma: “the market is the institutionalization of individualism and non-responsibility. Neither buyer nor seller is responsible for anything but himself.” But as a society, we want people to be free from slavish impulses and appetites and we want them to be responsible. We raise our children to love their country, to protect their environment, to aid their community. We tell them not to steal, never to hurt another human being and generally live in such a way that if everyone else also lived in that way, the world would be a better place. But, as G.A. Cohen notes, “the immediate motive to productive activity in a market society is (not always but) typically some mixture of greed and fear.” That is, upon taking on their first job, we tell our children, “throw away all that stuff we taught you; now all that matters is profit and loss.”

This creates one of the contradictions of capitalism: How long can a liberal democratic society (which relies upon cooperation, mutual interdependence and shared sacrifice) exist alongside a purely capitalistic system (which relies purely upon self-interest)? How long can markets “crowd out” all instances of social virtue before we descend entirely into chaos?

The libertarian reliance on pure self-interest is nowhere more clear than in the ideas of Ludwig von Mises, who developed Praxeology, the idea that all human action can be explained by self-interest. Milton Friedman accepts this proposition, stating in “Free to Choose,” “The problem of social organization is how to set up an arrangement under which greed will do the least harm, capitalism is that kind of a system.” The problem is that greed and self-interest are not the exclusive, or even primary, human motivation. We know that soldiers jump on grenades to protect other soldiers. We know that John McCain chose to spend four years in the Hilton Hanoi rather than violate the Code of Conduct for Prisoners of War. We know that Mohamed Bouazizi set himself on fire rather than face the harassment of police.

Of course, we’ve all heard the inevitable response: They’re upholding some other value, they hope for gain in a future life, etc. The problem with this response is that eventually, once you keep pressing, libertarians provide a tautology: self-interest is whatever motivates us to act. Well, then, we are clearly really bad at defining our own self-interest. Libertarians face a double bind: Either their definition of self-interest is wrong (because people act for things other than self) or it’s tautological (because every action is self-interested). Either way, they severely confine human motivation for action.

The only way to solve these problems is to understand the individual within her society and her society’s mores. But libertarians have to reject the most important forms of community because these organizations — familial, local, national, religious — are not voluntary organizations, but are considered coercive. In a day and age when the rich live a life separate from the rest of us and when our use of fossil fuels endangers the lives of poor people across the globe, such an individualistic mode of thinking is not only wrong, but dangerous.

It’s important to recognize that some libertarian populists engage in a core hypocrisy: capitalism for the poor, socialism for the rich. They want to block-grant Medicaid and cut taxes for the wealthy. They want to cut food stamps but not necessarily farm subsidies. They’ll cut the minimum wage but extend the carried-interest deduction. And they say things like, “keep the government’s hands off of my Medicare.”

While Friedman was at least consistent enough to despise all government programs, the Tea Party wants to protect a few: the ones they benefit from. They excitedly adopt his “starve the beast” approach to government spending, but also gobble up government resources. Libertarian populism is the old supply-side garbage, as John Kenneth Galbraith noted, “that the work habits of the American people are tied irrevocably to their income, though in a curiously perverse way. The poor do not work because they have too much income; the rich do not work because they do not have enough income. You expand and revitalize the economy by giving the poor less, the rich more.” The Tea Party is selfishness embodied: “Government should help me, but not you! I’m a maker, you are a taker!” Some of us still envision a society where compassion and cooperation are valued, rather than callous competition — alas, that seems as far away as ever.

A version of this article originally appeared on Salon.com

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