Tag Archives: Larry Bartels

How ordinary Americans can influence policy – no super PAC required

More and more studies are showing that the wealthy and corporations exert disproportionate influence over the U.S. political system. This viewpoint has been well documented by scholars Larry BartelsMartin Gilens and Kay Lehman Schlozman, among others.

Recently, Benjamin Page and Gilens disturbed many Americans with their finding that “average citizens’ preferences have little or no independent impact on policy.” Their data suggest that the wealthy have 15 times the influence of the middle class.

As remarkable as this conclusion is, many of the reporters discussing the study failed to read it carefully and missed other important findings. For example, Page and Gilens found that the preferences of elites actually correlate fairly well to the preferences of the average citizen (with a coefficient of 0.78, with 1.0 indicating exact alignment and –1.0 reflecting inverse correlation), whereas business groups have preferences that are far more divergent (–0.10). Public interest groups, such as unions and the American Association of Retired Persons, correlate slightly better with the interests of the average voter (0.12). However, pro-business groups, whose interests  largely conflict with the average voter’s, have about nine times the influence as typical voters.

In an e-mail, Page noted that the U.S. might get some “democracy by coincidence” — meaning that the preferences of the affluent for the most part align with those of the middle class — but such luck rarely occurs with the preferences of business groups. He also said that while his work with Gilens focuses on the top 10 percent of income earners, the top 1 percent and the top 0.1 percent may have even more influence and more divergent preferences as well. In a paper with Jason Seawright and Larry Bartels, Gilens showed that the top 1 percent have far different preferences and are far more likely to be politically active. This means that reformers must curb the influence of the superwealthy and corporate lobbying (see chart: a higher number indicates strong correlation with the preferences of the middle class and strong influence on policy, a negative number indicates divergence with the preferences of the middle class and weak influence on policy).

Floodgates of money

As disconcerting as these findings are, the problem has been made worse by recent Supreme Court decisions — namely, Citizens United and McCutcheon — that opened the floodgates of money flowing from the superrich to politicians and super PACs (See chart.) If the wealthy and business groups had disproportionate influence from 1981 to 2002, when these studies were conducted, imagine their power now that the system is inundated with money. For instance, in the 2012 election cycle, casino magnate Sheldon Adelson gave more money to influence elections than the total individual contributions of the residents of 12 states.

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What, then, is to be done?

To fix these oligopolistic trends, we must turn to the states for ideas. Patrick Flavin, an assistant professor of political science at Baylor University, may have some answers on this score. He has been using methods similar (although not entirely comparable) to those used by Gilens, Bartels and Page to test which states are most responsive to the interests of citizens. “One nice thing about federalism is that the 50 states serve as laboratories of democracy,” he said. “So we can examine different laws and institutional arrangements in the states to see what might promote more egalitarian patterns of political representation.” What he finds should give reformers hope: There are policies to strengthen the voice of middle class voters.

Flavin has used his metric of political representation to see what state-level policies correlate strongly with high levels of equality of political representation. Below is a table with the raw ratings. A higher number means that a state is more responsive to citizens across the income scale, while a low score means that only the ideological views of the wealthier citizens is represented in policy.

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Source: “Lobbying Regulations and Political Equality in the American States,” Patrick Flavin

The table shows that voters are best represented in Montana, Minnesota and Oregon and poorly represented in Georgia, Alabama and Mississippi. In a working paper available online, Flavin shows that states with stringent lobbying regulations better weigh the interests of citizens across the income spectrum. This shouldn’t be too surprising; lobbying provides benefits for wealthy corporations and not necessarily for taxpayers. Business lobbyists are known not for considering the social, moral or environmental consequences of the policies they pushing for but for promoting the the narrow interests of the groups they represent. For example, most Americans support stronger gun regulations, but the National Rifle Association has ensured that gun regulations across the country remain lax.

No common sense

The big question is what happens when we get money out of politics. Corporations and special interest groups don’t generally donate only to one party: Their goal is not usually to elect ideologically similar candidates but to win the sympathies of legislators to their pet issues. The hope is that once the money influence is removed, policies will align more closely with the preferences of voters. There is also the possibility that cleaner elections will lead to more voter participation by decreasing voter cynicism.

Another of Flavin’s studies measures how policies to get money out of politics affects voter interests. He uses data on state spending priorities from 1962 to 2008. He also rates the states for each year on the basis of six factors: disclosure, limits on individuals, limits on organizations, provision of public funds for governors, provision of public funds for legislatures and clean elections. He finds that states with laws to keep money out of politics dedicate more money to redistributive programs.

Finally, states have experimented with various policies to increase voter turnout, thereby reducing the turnout gap between the rich and poor. Elizabeth Rigby and Melanie J. Springer examined what reforms affected voting inequality at the state level. They find that in states with high registration inequality, the motor voter law (a law that requires states to allow voters to register when applying for or renewing a driver’s license) had a modest effect on decreasing voting inequality and that same-day registration had a strong impact. Sadly, many efforts have been focused on getting out the vote; the far more important reform is boosting registration among lower-income voters. These findings are important because a recent study using 30 years of state-level data by William Franko, Nathan J. Kelly and Christopher Witko found “that where the poor exercise their voice more in the voting booth relative to higher income groups, inequality is lower.” Franko found that states with wider turnout gaps between the rich and poor are less likely to pass minimum-wage increases, have weaker anti-predatory-lending polices and have less generous   health insurance programs for children in low-income families. Policies to increase low-income voter registration could help increase their voice in the political process and lead to policies that benefit them.

These important findings suggest two things. First, there are common-sense ways to get money out of politics and take back our democracy. Second, reformers should work to implement more state-level reforms. In a federal system such as ours, states play an important role in shaping the distribution of income. We need to implement corporate lobbying reform, donor disclosure, public financing of elections and same-day registration. The influence of money in our political system isn’t inescapable, and we should look to the states to find effective measures to curb the power of money. However, as Fredrick Douglass noted, “Power cedes nothing without demand.” Simply knowing what works isn’t enough. We need to put these policies into action.

Originally Published on Al Jazeera

You can blame America’s inequality and shrinking middle class for rising student debt

Co-Written with Mark Huelsman.

There is a tendency among elite opinion makers to believe that debt accrued while gaining a college degree is “good debt” that isn’t problematic because, as the thought goes, those with college degrees tend to make enough money to recoup their debt over a lifetime. Student debt is supposedly an equalizer—a way for students to gain access to credit in order to get a degree that will give them an equal chance to enter the middle class and achieve the American Dream. Sadly, like many pundit platitudes, this assertion is grounded in fantasy, not fact.

In fact, this is only true for some students—those who were fairly wealthy in the first place. College is certainly worth the cost, but that at present it is saddling poor and middle-class students with student debt is actually preventing them from participating in the wealth-building processes that previous generations have enjoyed.

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The debate over student debt usually focuses on those right out of school, but that masks that a substantial portion of those with student debt struggle mightily to pay off their loans in a timely manner, delaying (sometimes in perpetuity) their entry into the middle class. Research by the US Federal Reserve Bank of New York finds that many borrowers still haven’t paid off their student loans by their 40s and 50s.

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For students just out of school, upward of 15% of their federal student loans are in default within three years of students leaving school, and delinquency rates for student loans have continued to rise during and after the recession, even as delinquencies in every other form of loan—including mortgages, home equity loans, credit cards, and auto loans—have declined.

The inability to pay off debt is 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. Research from Demos finds that if “current borrowing patterns continue, student debt levels will reach $2 trillion sometime around 2022. Another report concludes that, “an average student debt burden for a dual-headed household with bachelors leads to a lifetime wealth loss of nearly $208,000.” Given that wealth inequality has returned to Gilded Era heights, this finding should be disturbing.

The problem is that, rather than being seen as a social investment, college education is increasingly seen as a commodity—something that is accessible for the wealthy, but out of reach for the poor, and increasingly, the middle class. Sure enough, student debt is highly correlated to income level with the wealthiest having the lowest amount of debt as a portion of their income (see table).

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Poor and middle class students are much more likely to take on student loans—in fact, nearly 9 in 10 graduates who receive Pell Grants also needed to borrow to finance their degree, compared to 53% of graduates who did not receive Pell Grants. These students will spend more time paying off their debt and less time saving for retirement or other needs, creating a vicious cycle of deepening wealth inequality.

There is a more tenuous, but equally important way in which rising inequality has increased student debt among the poor and middle class – through the political system. Recently, Martin Gilens and Benjamin Page sent the internet alight with their assertion that “economic elites and organized groups representing business interests have substantial independent impacts on U.S. government policy, while average citizens and mass-based interest groups have little or no independent influence.” This finding is corroborated by Larry BartelsDorian WarrenJacob HackerPaul Pierson and Kay Lehman Schlozman who have all recorded similar findings.

Although this elite and corporate control of the political system is bad a priori, it has particular importance in the case of education. In their study of the political attitudes of the wealthiest 1%, Larry Bartels, Benjamin Page and Jason Seawright find that the wealthiest 1% have different policy priorities than average voters. For instance, while 78% of the general public agree with the statement, “The federal government should make sure that everyone who wants to go to college can do so,” only 28% of the wealthy agree. Elites are also far less likely to agree that, “The federal government should spend whatever is necessary to ensure that all children have really good public schools they can go to,” by a margin of 35% to 87%. They also believe that cutting deficits is a more important priority than funding education, and believe that education is a lower spending priority than the middle class.

This helps explain why states have slashed spending for education while also cutting taxes—those with the most influence over policy have little to gain from public education, but much to gain from cutting taxes. It also explains why there is very little national attention paid to community colleges, which educate 4 in 10 college students, and who are disproportionately impacted by state budget cuts.  Research by Greg Duncan and Richard Murnane shows that wealthy spend far more supplementing their children’s incomes than the poor, which means that state level cuts have a devastating impact on the poor (see chart).

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Robert Hiltonsmith and Tamara Draut find that in the aftermath of the Great Recession, 49 states (all but North Dakota) cut spending on higher education and that state spending on higher education hit an all-time low in the wake of the recession (see chart). This, essentially, results in higher tuition. Draut and Hiltonsmith find that, “Nationally, average tuition at 4-year public universities increased by 20% in the four years since 2008 after rising 14% in the four years prior.” Tuition continues to grow as a share of the median income, which means all families but the very rich have to take out large debts to pay for their education. This, in turn, means that recent graduates are paying off loans, rather than building wealth.

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College is an important pathway to the middle class and one of the most effective ways to fight inequality. As it becomes increasingly difficult for students to gain an education, it closes gateways to upward mobility. The effect is particularly potent for blacks. A recent study by Bhashkar Mazumder finds that, “blacks have experienced substantially less upward intergenerational mobility and substantially more downward intergenerational mobility than whites.” He finds that this gap shrinks among those with 16 years of schooling.

One simple way to move away from the debt-for-diploma system is for the government to shift from a policy of loans to a policy of grants. There is no reason why college education should primarily be funded by expensive, high interest loans. In the past, Pell Grants helped the poor and middle class attend college, but Pell Grants make up an increasingly low percentage of the cost for college (see chart).

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At a bare minimum the government could allow students to refinance their debts at a lower level; most other countries have policies that allow students to pay off debts as a portion of their income and eventually allow the debts to be forgiven. In Britain, students don’t begin paying off their loans until they find stable employment, and then they pay in proportion to their earnings. Australia similarly ties the cost of paying off the loan to the income of the graduate, and loans themselves come with no interest attached. In Denmark, education is considered a right by the people and an investment by the government, and is therefore free. Some students are even offered a stipend by the government to defray costs. Norway and Sweden have  similar systems of higher education. The US has attempted to implement loan repayment schemes that allow students to pay in accordance with their income, but the default repayment plan on federal student loans is still an arbitrary 10-year time period—a time when borrowers tend to make less, and when saving for retirement could benefit them the most. But enrollment in these plans have been slow, likely due to the fact that our system is needlessly complex and opaque (to wit, there are upwards of 9 different repayment plans one can choose on student loans).

Education, and especially college education is a pathway to the middle class, and most Americans think it is more important than ever. But as society becomes more unequal, access to debt-free education becomes harder and harder.

Originally published on Quartz. 

The “donor class” and the minimum wage

When the Congressional Budget Office (CBO) recently released a new report estimating the effects of a higher minimum wage, conservatives pounced on the possibility that a minimum wage hike to $10.10 would cost about 500,000 jobs. But much like their reaction to the recent report about the Affordable Care Act, they are jumping to conclusions far too quickly.

First, there are reasons to be skeptical about the negative employment effect. Many studies find no negative employment effects. A recent report by Demos finds that by stimulating economic growth, a minimum wage could in fact create jobs. After all, a worker for one company is a customer for another. Minimum wage workers struggling to make ends meet are more likely to spend, reviving local economies. This is the argument forwarded by billionaire investment banker Nick Hanauer and economists like Joseph Stiglitz. It has strong theoretical support, as well as empirical support; studies show that poor workers are more likely to spend marginal income than wealthy workers.

Part of the problem is that the CBO relies heavily on simulations, rather than the empirical (observed) effects of the minimum wage. Textbook economics would predict job losses; if you make a good (labor) more costly, you reduce demand for it. But the world doesn’t work like a textbook. Workers being paid more may work harder (economists call this an “efficiency wage”). Workers struggling to make ends meet may not be paid in accordance with their ability, because they can’t credibly threaten to leave their job or unionize (they will simply be fired and replaced). The most famous study on the issue, by David Card and Alan Krueger finds that, “Contrary to the central prediction of the textbook model of the minimum wage … we find no evidence that the rise in New Jersey’s minimum wage reduced employment at fast-food restaurants in the state.” More recently, these findings were replicated empirically by Arindrajit Dube, T. William Lester and Michael Reich.

Looking internationally will not help Republicans. Even the right-leaning Economist magazine has argued that a minimum wage hike in Britain, “has done little or no harm” and instead, “Not only has it pushed up pay for the bottom 5% of workers, but it also seems to have boosted earnings further up the income scale—and thus reduced wage inequality.” The U.S. minimum wage pales in comparison to other developed countries; Australia’s is more than double our own. Historically, too, the current minimum wage is anomalous. Adjusted for inflation, it is far lower than the $10.77 a worker would be making in 1968.

But even if some minor job losses materialize, raising the minimum wage is still good policy. The data show that 55% of the people making a minimum wage work full-time and their the average age is 35. Many of these workers are struggling under student debt, or the costs of raising children. These are not simply college students working on the side; for many people these jobs are the only source of vital income. For these poor workers, a $3 raise may be the difference between a Thanksgiving Turkey and empty stomachs.

The minimum wage has potent implications for our national discussion of inequality and upward mobility. Republicans have been paying lip service to the idea of reducing inequality and increasing upward mobility, but so far policy proposals have been sparse. The minimum wage is a perfect solution. It requires little government spending and is unlikely to have any significant effect on the deficit. It certainly doesn’t violate the “no new taxes” pledge. So a minimum wage hike would be the perfect conservative solution to inequality: targeted at working people (rather than the unemployed), minimal bureaucracy and no new revenue for the government. And studies show it would work. Larry Mishel of the Economic Policy Institute finds that the declining value of the minimum wage has been a major driver of increased inequality. Citing the work of David Autor, he finds that more than half of the growing divide between workers at the median and workers at the lowest 10% of the income distribution can be explained by a declining minimum wage.

The CBO isn’t interested in adjudicating studies, but rather creating a consensus, and it generally errs on the side of conservatism. While the effects of the minimum wage on the job market is mixed and uncertain, the effect on upward mobility is not. The CBO estimates that in total, “overall real income would rise by $1 billion” and that a $10.10 minimum wage could lift 900,000 people out of poverty. The report estimates that those making less than $26,300 a year will their real family income increase by $300 dollars, and those making less than $51,400 would see it rise by $200. All told, more than 16 million workers will be positively affected. For many, that might enough to fix a broken dishwasher or afford Christmas presents. However, one group would be negatively affected: those earning more than $182,200, who would see their real family income drop by $700. Given that this classis the most likely to vote and donate money to Republicans, it’s unsurprising that the part will be slow to embrace raising the minimum wage. Business groups like the Chamber of Commerce have spent millions aiming to keep the minimum wage low.

Republican opposition indicates just how much the party has been co-opted by the interests of the donor class. While a large plurality of economists and more than 73% of citizens support raising the minimum wage, research by Larry Bartels finds that only 40% of the wealthiest Americans do. When combined with research by Martin Gilens and Kay Lehman Schlozman showing how the wealthiest Americans have a disparate voice in public policy affairs we begin to see why the minimum wage has yet to gain traction: class interests, not economics are driving the debate.

If Republicans are serious about reducing inequality and increasing upward mobility without increasing deficits and killing jobs, the minimum wage is the way to go. Sadly, they have been co-opted by a donor class less interested in good policy than their own economic interests.

Originally published on Salon.