Posts Tagged ‘government’

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Banksy, “Untitled” (2009)

 

On first glance, liberals and conservatives agree on very little these days, especially now that we find ourselves in the era of Donald Trump. But they do seem to find common ground on one thing: the so-called dignity of labor.

Let me explain. In the article I referred to yesterday, conservative Arthur Brooks invokes the “dignity of labor” as the reason anything and everything should be done to stem the fall in the labor-force participation rate of white men and get them back to work.

If its goal is to instill dignity, the U.S. government does not need to find more innovative ways to “help” people; rather, it must find better ways to make them more necessary. The question for leaders, no matter where they sit on the political spectrum, must be, Does this policy make people more or less needed—in their families, their communities, and the broader economy?

Some may ask whether making people necessary is an appropriate role for government. The answer is yes: indeed, it represents a catastrophic failure of government that millions of Americans depend on the state instead of creating value for themselves and others. However, it’s not enough to merely make people feel that they are needed; they must become more authentically, objectively necessary.

The single most important part of a “neededness agenda” is putting more people to work.

Well, as it turns out, one of Brooks’s liberal critics, Lane Kenworthy, actually agrees that working for someone else and producing more than one needs has “significant virtues”:*

It imposes regularity and discipline on people’s lives. It can be a source o mental stimulation. It helps to fulfill the widespread desire to contribute to, and be integrated in, the larger society. It shapes identity and can boost self-­esteem. With neighborhood and family ties weakening, the office or factory can be a key site of social interaction. Lack of employment tends to be associated with feelings of social exclusion, discouragement, boredom, and unhappiness. Societies also need a significant majority of people in paid work to help fund government programs.

No matter the fundamental differences in the policies they advocate, Brooks and Kenworthy are in fundamental agreement that people should believe in the dignity of work and government policy should be redesigned to make sure people—especially the members of the white working-class—get back to work.

I have already dealt numerous times (e.g, here, here, and here) with the argument that participating in wage-labor is intrinsically dignified. But the question remains, why should the government be brought in—in the eyes of by both conservatives and liberals—to make sure people are forced to have the freedom to acquire that dignity?

The answer actually lies in an unexpected source. According to Friedrich Nietzsche (in his 1871 preface to an unwritten book, “The Greek State”), the dignity of labor was invented as one of the “needy products of slavedom hiding itself from itself.” That’s because, in Nietzsche’s view (following the Greeks), labor is only a “painful means” for existence and existence (as against art) has no value in itself. Therefore, “labour is a disgrace.”

Accordingly we must accept this cruel sounding truth, that slavery is of the essence of Culture; a truth of course, which leaves no doubt as to the absolute value of Existence.  This truth is the vulture, that gnaws at the liver of the Promethean promoter of Culture.  The misery of toiling men must still increase in order to make the production of the world of art possible to a small number of Olympian men.

And if slaves—or, today, wage-workers—no longer believe in the “dignity of labour,” it falls to the likes of both conservatives and liberals to ignore the “disgraced disgrace” of labor and create the necessary “conceptual hallucinations.”And then, on that basis, to suggest the appropriate government policies such that the “enormous majority [will], in the service of a minority be slavishly subjected to life’s struggle, to a greater degree than their own wants necessitate.”

Nietzsche believed that, in the modern world, the so-called dignity of labor was one of the “transparent lies recognizable to every one of deeper insight.” Apparently, neither Brooks nor Kenworthy can count himself among those with such insight.

 

*This is even after Kenworthy admits “employment is not always a good thing.”

The need for a paycheck can trap people in careers that divert them from more productive or rewarding pursuits. Paid work can be physically or emotionally stressful. It can be monotonous, boring, alienating. Some jobs require a degree of indiference, meanness, or dishonesty toward customers or subordinates that eats away at one’s humanity. And work can interfere with family life.

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Before the new Republican administration has a chance to implement its campaign promises and dismantle the social safety net, it’s useful to remember who in fact is assisted by the existing programs.

According to a new study by the Center for Budget and Policy Priorities, people of all races and ethnic groups who lack a bachelor’s degree receive significant help from the safety net. But white working-class adults stand out.

Among working-age adults without a college degree, 6.2 million whites are lifted above the poverty line by the safety net — more than any other racial or ethnic group. In addition, the percentage of people who would otherwise be poor that safety net programs lift out of poverty is greater for white working-age adults without a college degree than for other adults without a college degree.

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But we also need to remember how brutal U.S. capitalism is, before government programs are taken into account.

In particular, as can been seen in the table above, the poverty rate before taking income from government programs into account is more than three times higher among working-age adults without a college degree (30.4 percent) than among other adults (8.7 percent). And while poverty rates are lower for white adults without a college degree (24.3 percent) than for other adults without a degree (43.1 percent for Blacks and 36.2 percent for Hispanics), 1 in 4 white adults who lack a degree is poor before accounting for government benefits and tax credits.

The fact is, government anti-poverty programs are so important—for white, Black, and Hispanic Americans—precisely because capitalism in the United States generates so much poverty among its workers, especially those without a college degree.

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There is no stronger indictment of U.S. capitalism than the fact that, over recent decades (especially since 1980), there has been almost no growth for people in the bottom 50 percent of the distribution of income.

As I showed a week ago, according to recent data by Thomas Piketty, Emmanuel Saez, and Gabriel Zucman, from 1979 through 2006, the share of pre-tax income going to the bottom 50 percent of U.S. households fell from an already-low 20.1 percent to an even-lower 13.5 percent—while the share of top 1 percent soared, from 11.1 percent to 20.1 percent.

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There’s even a large and growing gap between average (pre-tax) national income and the average of the bottom 50 percent. That ratio increased from 2.5:1 in 1979 to 4:1 in 2014.

Even in absolute terms (illustrated in the chart at the top of the post), the bottom 50 percent has gone nowhere. Their average pre-tax income actually fell from 1979 to 2014 (in real 2014 dollars)— from $16,632 to $16,197. It’s true, households that find themselves in the bottom half have been helped by tax credits and government transfers. But in 2014, that only raised their post-tax income to, on average, $25,045.

And that’s not even the whole story. If we exclude expenditures on medical care (Medicaid and Medicare, including rising prices for medical treatment), that post-tax income falls to $21,293. And if we calculate their cash income (and thus exclude in-kind transfers), it falls to $17,654—an embarrassingly small increase over their pre-tax income of $16,197.

As Piketty, Saez, and Zucman explain,

The aggregate flow of individualized government transfers has increased, but these transfers are largely targeted to the elderly and the middle-class (individuals above the median and below the 90th percentile). Transfers that go to the bottom 50% have not been large enough to lift income significantly. Given the massive changes in the pre-tax distribution of national income since 1980, there are clear limits to what redistributive policies can achieve.

The unequal distribution of income in the United States is now so obscene that, even with government transfers, the bottom 50 percent are forced to struggle to survive on incomes that, in 2014, came to less than 2.5 percent of those in the top 1 percent.

Is it any wonder that the presidential candidate who promised to continue business as usual, to do no more than maintain the existing set of programs, ended up losing?

And, by the same token, does anyone expect the winning candidate, who promised to shake things up on behalf of the working-class, will actually do anything to fundamentally improve the circumstances of those in the bottom 50 percent?

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Income inequality continues to grow in the United States—which represents the very definition of insanity: “doing the same thing over and over again and expecting different results.”

According to recent data by Thomas Piketty, Emmanuel Saez, and Gabriel Zucman, from 1979 through 2006, the share of pre-tax income going to the bottom 50 percent of U.S. households fell from an already-low 20.1 percent to an even-lower 13.5 percent. During that same period, the top 1 percent went from 11.1 percent to 20.1 percent. (Their respective shares crossed in 1995, when each—the bottom 50 percent and the top 1 percent—took home about 15.5 percent of pre-tax income). In 1979, top 1-percent individuals earned on average 28 times more than bottom 50-percent individuals before tax while they earned 74 times more in 2006.

Then, after the crash (when the share of the top 1 percent decreased, as expected), during the so-called recovery (starting in 2009), the share of the bottom 50 percent continued to fall (to 12.5 percent, in 2014, the last year for which data are available) while that of the top 1 percent was restored (to 20.2 percent, in 2014). By 2014, top 1-percent individuals earned on average 81 times more than bottom 50-percent individuals. The share of income going to the top 1 percent is now almost twice as large as that of the bottom 50-percent share, a group that is by definition fifty times more numerous.

And government redistribution has offset only a tiny fraction of the increase in pre-tax inequality. Even after taxes and transfers, the growth in average income for working-age adults in the bottom 50 percent of the distribution since 1979 has been much lower than that of working-age adults in the top 1 percent (34 percent vs. 141 percent).*

So, the growing inequality that has characterized the years of the recovery from the crash of 2007-08 mirrors the decades of rising inequality that caused the crash in the first place.

And that, in a word, is insane.

*In other words, while the aggregate flow of government transfers has increased, these transfers are largely targeted to the elderly and the middle-class (individuals above the median and below the 90th percentile). Transfers that go to the bottom 50 percent have not been large enough to lift income significantly, especially compared to those at the top. Thus, for example, in terms of shares of post-tax income from 1979 to 2014, the bottom 50 percent has fallen from 25.6 percent to 19.4 percent, while the share of the top 1 percent has risen, from 9.1 percent to 15.6 percent.

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We can thank Donald Trump for one thing: he’s put the white working-class on the political map.*

In recent months, we’ve seen a veritable flood of articles, polls, and surveys about the characteristics, conditions, and concerns of white working-class voters—all with the premise that the white working-class is fundamentally different from the rest of non-working-class, non-white Americans.

But why are the members of the white working-class attracting so much attention? My sense is, they both represent a threat—because many plan to vote for Trump and, more generally, reject much elite opinion (including, but not limited, to Trump)—and, at the same time, are assumed to be a dying breed—as the U.S. working-class becomes more female, more racially and ethnically diverse, and increasingly employed in non-manufacturing jobs. So, the argument goes, the white working-class, supposedly radically different from the rest of Americans, is motivated by fear and resentment occasioned by a loss of identity and standing.**

Hence the curiosity—best exemplified by a new CNN/Kaiser Family Foundation [ht: ja] poll, about what white working-class Americans think. The results of the poll are interesting, if only because on many issues (aside from support for or opposition to Trump and immigration) the white working-class holds views that are not all that different from other whites, blacks, and Hispanics.

The fundamental problem with CNN/Kaiser poll (as with so many others) is its basic definition of the working-class: “those who have attained less than a four-year college degree, excluding those between the ages of 18-24 who are currently enrolled in school.” As I have argued before (e.g., here and here), that’s not the working-class. It’s just people who never went to or didn’t finish college. What they’re using is a definition of the working-class that doesn’t include all those other people, many of whom have college degrees, who are forced to have the freedom to work for someone else in order to make enough money to support themselves and their families. Together, most Americans with and without college degrees work for the boards of directors of large corporations—and they don’t manage the production process or supervise other employees.

As Vivek Chibber explains,

Workers show up for work every day knowing that they have little job security; they are paid what employers feel is consistent with their main priority, which is making profits, not the well-being of employees; they work at a pace and duration that is set by their bosses; and they submit to these conditions, not because they want to, but because for most of them, the alternative to accepting these conditions is not having a job at all.

The working-class, as I am defining it then, turns out to comprise the vast majority (70-80 percent) of the U.S. population. And most of them, of course, are white.

So, what does the CNN/Kaiser pool reveal about the views of, to be clear, one portion of the white working-class? As I wrote above, on many issues, they’re not all that different from other whites or blacks and Hispanics without college degrees. In terms of their own lives, most of the so-called white working-class, as the other poll respondents, are not angry, worried, pessimistic, or unhappy. But they are dissatisfied with the country’s economic situation and with the influence on the political process of people like them. In recent years, they report it’s become harder for them to get ahead financially and to find good jobs. Finally, they blame the federal government much more than their employers or Wall Street for the economic problems facing the working-class and they believe the federal government helps wealthy people too much and members of the working-class too little.

That’s exactly the set of answers one would expect from the American working-class—white, black, and Hispanic, with and without college degrees—right now. They’re getting screwed and, while they may not be dissatisfied in their own lives, they certainly think both the economic and political systems are stacked against them. Perhaps the only surprising item in the survey is the extent to which they blame the government, and not their employers or Wall Street, for the economic problems facing the working-class.

The only major differences within the working-class have to do with Trump and the role of immigrants. While 56 percent of whites without a college degree would consider voting for Trump, most other respondents would definitely not vote for him. A similar difference emerges with respect to immigrants: a much smaller percentage of the so-called white working-class believe immigrants “strengthen our country” and a much higher percentage thinks “immigrants today are a burden on our country” than the other groups.***

In the end, those two differences—on Trump and immigration—are what make the so-called white working-class interesting to the media. It’s not their conditions or their grievances, much of which they share with other members of the working-class. It’s only the fact that they threaten to vote for the renegade presidential candidate and they’re wary about the role played by other, immigrant members of the working-class. And, of course, many of them are thrown into the “basket of deplorables” by the opposing campaign.

Both presidential candidates, then, are sowing and exploiting those differences to their own advantage, which is what U.S. politicians have always attempted to do when it comes to real or imagined divisions within the working-class. That’s how they campaign and that’s how they hope to get elected.

Trump and Hillary Clinton (and their echoes in the mainstream media) have created the “white working-class” and they hope to ride it—as a source of support or a specter—to victory in November. And then, whoever wins, they’ll abandon it—along with the rest of the working-class.

 

 

*Actually, Bernie Sanders also played an important role in focusing attention on the white working-class, especially with his stunning primary victories in Michigan and West Virginia. Since his loss to Hillary Clinton, however, the white working-class (along with the rest of the American working-class) has virtually disappeared from Democratic discourse.

**As Connor Kilpatrick has explained, the Democratic Party “has established a clear line on the white wage-earning class: they’re all either dying (demographically or literally), irrelevant in an increasingly nonwhite country, or so hopelessly racist they can go off themselves with a Miller High Life-prescription-painkiller cocktail for all they care.”

***There is one additional difference that requires mention: while a majority of whites—with (62 percent) and without (69 percent) college degrees—believe trade agreements cost the United States jobs, a much smaller percentage of blacks and Hispanics without college degrees (both 37 percent) think that’s the case.

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Has the policy consensus on economics fundamentally changed in recent years?

To read Mike Konczal it has. I can’t say I’m convinced. While some of the details may have changed, I still think we’re talking about different—liberal and conservative—versions of the same old trickledown economics.

But first Konczal’s argument. He begins with a pretty good summary of the policy consensus before the crash of 2007-08:

Before the crash, complacent Democrats, whatever their disagreements with their Republican peers, tended to agree with them that the economy was largely self-correcting. The Federal Reserve possessed the tools to nudge the economy to full employment, they thought. What’s more, government programs, while sometimes a necessary evil, were likely to be an inefficient drag compared with the private market. Inequality was something to worry about, sure, but hardly a crisis, and policies were correspondingly timid and market-focused.

And it’s true: the debate about the conditions and consequences of the crash—after Occupy Wall Street, in the midst of the Second Great Depression—challenged that consensus, by focusing much more attention on inequality and disrupting the idea that the growing gap between rich and poor is somehow natural and necessary and by calling into question the idea that capitalist markets are self-stabilizing and full employment can be guaranteed by relying on markets.

In all honesty, that’s the least that can be expected, especially on the liberal side of mainstream political and economic thinking in the United States.

But then, when Konczal outlines the policies that make up what he calls the “new liberal economics,” embodied in Hillary Clinton’s campaign and the current Democratic Party, the evidence is very thin. In terms of specific policies—like following the dual mandate for the Fed of stabilizing prices and maximizing employment and supporting paid family and medical leave—the new liberal economics looks a lot like the old liberal economics of the Great Society programs (and, for that matter, of the Nixon administration). And while the policies Democrats support are certainly different from those of current Republicans (which Konczal summarizes as a “mix of Kempism, austerity, and favorable taxes and regulations for businesses that characterizes Paul Ryan’s ideas” and “Trump’s agenda of mercantilism and a chauvinistic welfare state”), they aren’t evidence the existing policy consensus represents a radical change.

That’s because the consensus before the crash, and now seven years into the recovery, has been based on trickledown economics. On both sides of the political and economic aisle.

The overarching idea, shared by liberals and conservatives, is that the existing economic system—with the surplus being appropriated by a small group at the top, who then decide what to do with it—will eventually deliver benefits to everyone, including those at the bottom (through, e.g., more jobs and higher incomes).

There are differences, of course. While the conservative view of trickledown economics emphasizes individual decisions and private markets, the liberal view is based on the idea that individual decisions are constrained by larger institutions and structures and and government programs are necessary to achieve desirable social outcomes. But, in both cases, the benefits created by existing economic arrangements are supposed to start at the top and trickle down to the bottom.

The consensus before the crash was that the liberal and conservative approaches to trickledown economics represented the limits of the relevant debate about economic policy. And now, seven years into the recovery from the crash, the debate that takes place between those limits remains the policy consensus.*

So, to my mind, there’s nothing new about the “new liberal economics.” It’s just a different mix of policies that together make up the latest version of liberal trickledown economics.

 

*If the existing policy consensus has been disrupted, it’s only because Donald Trump has highlighted the fact that trickledown economics, in both its versions, represents an unfair hustle.

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Back in 2012, I wrote about the residents of Rio de Janeiro’s favelas (shanty towns) who were being evicted by the Brazilian government on behalf of the organizers of the 2014 World Cup and the Olympic Games now taking place there.

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In the place of one such favela, Vila Autodromo, which was once home to more than 500 families, all that remains are “Olympic parking lot tarmac, raw dirt and 20 tiny white utilitarian cottages, built grudgingly by the city as a concession to a core of families who refused to leave even as their homes were demolished.”

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But the former residents haven’t forgotten either their old working-class neighborhood or the force that was used to evict them. So, they and their supporters have erected an open-air museum, the Museu das Remoções (Museum of the Evicted). It consists of seven installations built from materials left behind after the demolitions.

Each installation pays homage to a house or building that was demolished, as well as the struggle faced by the residents of the community.

The plan is for the museum to stay open through to the end of the games.

Meanwhile, the slogan “Nem todos tem um preço” (Not everyone has a price) remains visible on some of the free-standing walls of demolished buildings.