Why Does the Market Not Serve the Interests of Human Beings?

So people are casting about for the means to protect themselves against that insecurity. They are looking for a way to not only afford decent housing but to buy the house in the neighborhood that feeds into the good k-12 schools that will give their own kids a better chance at a life not marred by the insecurity that keeps them up nights. They are looking for a way to be respected at work, to be respected in their communities, to locate their position in the larger social structure and to find it congruent with their ideal selves. They are looking for dignity and rest. That we have constructed the only means for achieving those things as credential hoarding can be understood as “market demand” but I would call it mass insecurity. Again, language, tools, kings and masters.

If we accept my story of profit and higher education market we get to different kinds of questions that lead to different kinds of policies. Rather than disrupting higher education because it does not serve the needs of the market we can ask the market why it does not serve the interests of human beings. Why, as corporations increasingly use their moral authority and political will to limit their tax exposure and their contribution to social institutions like k-12 schools, why is public education being refashioned to provide them the “human capital” they require to continue their abdication of the greater social good?

Tressie McMillan Cottom, Profit, HigherEd and Lessons on the Prestige Cartel

Chained CPI, Social Insurance and Two Kinds of Politics

Social Security was enacted in response to mass mobilization. It can only be saved through mass mobilization.

The president’s new budget proposal includes both Chained CPI, a cut in Social Security benefits, and cuts in Medicare benefits.  As Shawn Fremstad  notes, the White House’s assurances that the ‘most vulnerable’ will be protected are not to be taken seriously.

It’s troubling for any number of reasons, including that the defenses offered are nonsense.  Chained CPI is arguably a more accurate measure for working people, but the existing measure clearly underestimates inflation for seniors, who spend far more of their income on health care, where costs are rising faster. Social Security doesn’t contribute to the deficit, which doesn’t matter (at least at the moment), and no one actually cares about it, and Medicare costs could be dealt with through costs controls rather than benefit cuts.

A Rolling Conversation on the State of the Union at Jubilee

Elias Isquith has put together an interesting group of people to comment on the State of the Union, and surprisingly I’m one of them. I’ll be adding the links on this post at they come up. Check it out and maybe even comment. We are…not of the same mind on this thing.

Here’s my opening: “The fact that people have such different readings of this speech isn’t that surprising. It reads to me like it was designed to do just that – let each of us hear what we want to hear.”

Announcement: A Rolling Conversation on the State of the Union

The State of Austerity (Elias Isquith)

Ethan Gach — State of the Union Address Shows Obama’s Priorities: Everything

Robert Greer — Is Obama the Liberal Great Communicator?

David Kaib — The State of the Union Is…Ambivalent

[Update: 2-15-13 a.m.]

Shawn Gude — The Problem with Piecemeal Reform

[Update: 2-20-13 a.m.]

The State of the Union’s Quiet Radicalism  (Elias Isquith)

Shereen Shafi — “Transparency,” Drone Strikes, and the Conditions of Public Support

[Update 2-26-13 p.m.]

The State of the Union’s Crises (Alan Kantz)

No business which depends for existence on paying less than living wages has any right to continue

In my Inaugural I laid down the simple proposition that nobody is going to starve in this country. It seems to me to be equally plain that no business which depends for existence on paying less than living wages to its workers has any right to continue in this country. By “business” I mean the whole of commerce as well as the whole of industry; by workers I mean all workers, the white collar class as well as the men [sic] in overalls; and by living wages I mean more than a bare subsistence level-I mean the wages of decent living.

Franklin Roosevelt, Statement on the National Industrial Recovery Act (1933)

There was No Legislative Decision : The Temporary Sort of Resolution to the Fiscal Grift

By Wing-Chi Poon [CC-BY-SA-2.5 (http://creativecommons.org/licenses/by-sa/2.5)%5D, via Wikimedia Commons

[Update: Turns out the House may not be interested in rubber stamping these deal. Also, see Matt Stoller's Eight Corporate Subsidies in the Fiscal Cliff Bill, From Goldman Sachs to Disney to NASCAR.]

The deal to avoid the misnamed ‘fiscal cliff’ the self-imposed crisis (i.e. shock doctrine) designed to impose austerity on a public that is overwhelmingly opposed to it justified by fake concern over deficits and debt sheds important light on the state of our political system. I’ll have more to say later, but to start, I wanted to mention the sham that has become of the legislative process. The deal was negotiated between Vice President (and former Senator) Joe Biden and Republican Senate Minority Leader Mitch McConnell, in a process that excluded the other 99 members of the lame duck Senate and the entire House of Representatives. As the Washington Post reported:

“There are two people in a [metaphorical] room deciding incredibly consequential issues for this country, while 99 other United States senators and 435 members of the House of Representatives — elected by their constituencies to come to Washington — are on the sidelines,” Sen. John Thune (R-S.D.)said on the Senate floor in the afternoon.

[snip]

…Thune was right that legislators had, essentially, been cut out of the legislative process. By the time a deal was announced, about 8:45 p.m. Monday night, there was little time for anything but a vote.“At least we would have had an opportunity to debate this, instead of waiting now until the eleventh hour,” Thune said.

[snip]

Monday marked the third time in two years that a congressional cliffhanger had ended with a bargain struck by McConnell and Biden. The first time came in late 2010, during a year-end showdown over the expiring Bush-era tax cuts. The second was in August 2011, during the fight over the debt ceiling.

It should go without saying that when all those high level federal officials are cut out of the process, the people are too. But for the moment, I want to point out how our models for understanding politics are often inadequate. Members of Congress aren’t deciding anything here – they are ratifying a decision made elsewhere. Now it’s true that Biden and McConnell were not free of political constrains, but then again, no one ever is.  It’s generally a bad idea to assume that those who hold the power according to civics textbooks are those who actually hold the power.  The Constitution was supposed to make the House the main driver of fiscal policy, secondarily the Senate, and lastly the President.  (The Supreme Court was intended to have little to no role, yet that didn’t stop Chief Justice Roberts, a ‘neutral umpire,’ from making it the main theme of his report [pdf] on the state of the judiciary.)

I’m not sure what this is, but it’s not representative democracy. And it’s not legislative decision-making.

How Means Testing Exploits Well Intentioned Liberals

Means testing of Social Security or Medicare is a bad idea.  It doesn’t generally save that much money and it undermines the very logic of social insurance–universal coverage paid for by dedicated taxation, thereby spreading risk over the whole population, protecting everyone.  Means testing is a way of welfarizing social insurance, that is, associating it with the poor (read : undeserving)  Most people, even politically active people, don’t understand the idea of social insurance, either its policy or political logic.

That said, I’ve found the idea is one that many liberals seem drawn to.  I’m not talking about neoliberals who are really skeptical of social insurance. I mean people who are primarily concerned with inequality, who have no ideological skepticism toward government. And I don’t mean the politicians and think tanks that are pushing it.  I mean why people think it sounds like a good idea.

Why is Dick Durbin Trying to Undermine Social Security and Medicare?

Dick Durbin, who wants to undermine social insurance

Dick Durbin, doing his best to undermine social insurance and the long-term viability of the Democratic Party, is seeking to convince progressives to demobilize rather than fight attacks on Social Security and Medicare.

A top Democrat pressured fellow progressives Tuesday to support – rather than fight – a far-reaching budget deal that includes cuts to entitlement programs after resolving  the upcoming fiscal cliff.

“We can’t be so naive to believe that just taxing the rich will solve our problems,” said Sen. Richard Durbin of Illinois, the No. 2 Democrat in the Senate. “Put everything on the table. Repeat. Everything on the table.”

This is nonsense. Why on earth should everything be on the table? Even if it was true that deficits were out of control (they aren’t) and that we had to act now to address them (we don’t), things that don’t contribute to the deficit at all – like Social Security – shouldn’t be part of the conversation.  But beyond that, it’s just false. Vastly popular, wildly successful programs that happen to be unpopular with elites shouldn’t be “on the table.”

This is how Social Security and Medicare ends – with false progressive officials, supposedly liberal commentators like Kevin Drum, and compromised organizations like the AARP all shifting the terms of the debate so we’re only talking about how to cut benefits not whether, let alone how to expand these programs.

As I said in my last post, never trust anyone who extolls the value of a political deal without talking about the substance of the deal.

If people like Durbin can float these sort of claims without being punished for it, everyone in Washington will know that they can go after these programs without consequences.  If, on the other hand, he is made suffer, few will want to be next in line.  Social insurance is only vulnerable if we fail to mobilize to protect it.  Which is why this sort of thing is unforgivable.

For what its worth, Durbin holds the number two position in the Senate. As the whip, his job is to get Democrats to vote correctly.  He represents everyone else in the caucus.  It strikes me that every member of the Democratic caucus should face angry constituents demanding that they condemn him.

Kevin Drum Tells Liberals to Chill Out Over Social Security

Kevin Drum wants liberals to calm down about the possibility of a deal to address Social Security.

If we extended the solvency of Social Security for the next century, it’s true that the Cato Institute would be back the next day complaining that this wasn’t enough. After all, they’re ideologically opposed to the whole idea of Social Security. It might take the Heritage Foundation a little longer, but they’d get right back into the fight pretty quickly too.

But the Washington Post wouldn’t. The Pete Peterson folks wouldn’t. The truth is that all the earnest, centrist, Very Serious People who want to reform Social Security don’t want to starve your granny. They don’t have a problem with the concept of a guaranteed retirement program. They just want it to be properly funded.

They just want it properly funded?  The chorus of people who keep falsely claiming we must deal with “out of control entitlement spending” leading to an “exploding deficit” thereby conflating Medicare spending, which is increasing because medical costs are increasing, although more slowly than in the private sector, with Social Security spending, which is not rising at nearly the same rate and contributes nothing to the deficit?  Anyone who’s paying attention can see all the very serious people have been emphasizing the alleged threat of social insurance to the budget deficit.  Read Dean Baker to see the endless attacks on Social Security from all these VSP – including the Washington Post.

The fact is, as Andrea Campbell and Kimberly Morgan (pdf) have shown, that elites turned against the social insurance model in the 1970s, while the public has remained supportive, wanting expansions of these programs rather than cuts.  Given the vast unpopularity of that position, as opponents have long realized, the only way to undermine Social Security and Medicare is by claiming that changes are needed to protect it – that is, by constructing threats to the programs.  The incentive to lie is obvious.

Of course, those of us who want to expand Social Security and Medicare are fine with reforms like ending the cap on payroll taxes which will bring in more money.  But why talk of a deal instead of the specifics?  Are cuts or benefits interchangeable?

Never trust anyone who extolls the value of a political deal without talking about the substance of the deal.

The only thing that protects these programs is that the public would mobilize if they realized what was really going on. There was a time when the mere whiff of a mention of cuts would have led to DEFCOM 5.  The whole idea of Social Security as the third rail of politics was that it was unacceptable to even speak of cuts.  When Bush sought to privatize Social Security, the Democrats were a united front against any changes at all.  Nancy Pelosi famously said “We have a plan. It’s called Social Security”. This time there is far too much talk about cuts, even from people who stood against Bush.  Even the AARP has been wishy washy on this score.  This talk removes the chief barrier protecting these programs – keeping it off the agenda.

We don’t need to chill out.  We need a massive mobilization. We need everyone to take clear, repeated, bold stands against any benefit cuts, for whatever reason.  We need to press politicians for merely talking about austerity, or a so called entitlement crisis.

And anyone who claims otherwise, regardless of their intentions, is working to “starve your granny.”

The Economics-Politics Distinction: The Shift from the Welfare to the Predator State

If “economics” is isolated from other aspects of social life, then the criterion for policymakers becomes the simple one of efficiency. Expenditure, and government policy generally, is to be viewed in terms of whether or not a program pays, whether it creates incentives for the private sector to expand output and employment. In a market economy [sic], government must depend on tax collection, and this in turn depends on the level of economic activity–which depends on the expectation of profit. In the economist’s view, if tax incentives can attract or retain business, they should be granted. The income redistribution effects [sic] of such policies may be regressive but this is simply an unavoidable consequence of a market economy: government can step in after production decisions are made and through tax expenditure policies rectify any damage that may have resulted. How much and what type of action it will take will be decided in the political arena.

Yet government, especially at the local level, in under constant pressure not to redistribute from the rich to the poor.

–William K. Tabb, The Long Default : New York City and the Urban Fiscal Crisis.

All Roads Don’t Lead Through the US Senate (Thankfully)

Josh Eidelson has a story on Richard Trumka’s post-election analysis. The AFL-CIO chief insists “We won’t be taken for granted,”  pointing to labor’s essential role in the reelection on Barack Obama, as well as helping key progressives win their Senate races.  As a negotiating tactic, making demands after you’re provided support is not ideal.

Trumka takes a stronger stance when it comes to what he wants regarding Social Security and Medicare than some others have, but his reading of where the president has been on this is overly optimistic.

“If any bipartisan deal includes cuts to Social Security, Medicare or Medicaid, or extends the Bush tax cuts for the top 2 percent,” Trumka pledged, “we will oppose it.” Asked about “chained CPI” – a way to slow Social Security’s growth that Sen. Bernie Sanders has warned could be part of a bipartisan deal – Trumka said, “That is definitely a cut to Social Security benefits.” Asked if he’s confident Obama would hold the line against cutting social insurance or extending all of the Bush tax cuts, Trumka answered, “I think so. He’s been pretty clear about that.” (In a September MSNBC appearance, top Obama adviser David Axelrod mentioned both “raise the cap” and “adjust the growth of the program” as elements of a Social Security “discussion worth having.”)

As always, near the top of the list is comprehensive labor law legislation.  I’d say the odds of any labor law legislation is close to zero, while the odds of legislation that is both comprehensive and positive is in fact zero. (As an aside, I don’t understand our general insistence that reform legislation should be comprehensive.  That usually means that it will be seriously flawed, since progressive forces are usually the weaker ones in our present political climate, a weakness that, as I’ve argued before, is not a product of lack of popular support.  What we need is legislation that creates a positive feedback loop.)  Hopefully the false promise of labor law reform won’t keep people from fighting tooth and nail against cuts in social insurance.

But legislation is not the only way to improve the situation for labor rights.  Eidelson continues:

Meanwhile, there’s plenty the Obama administration could do – and so far hasn’t – without Congress. With an executive order, the president could change federal contracting to exclude more union-busting companies. With regulations, his Labor Department could restrict the use of dangerous equipment by teenagers working on factory farms, or extend basic overtime protections to domestic workers.

Trumka called for swift action on a long-delayed OSHA regulation regarding silica dust. Asked how quickly it should move, Trumka answered, “Last year.” As for the Trans-Pacific Partnership trade talks currently underway, Trumka said, “They have to make sure they negotiate a deal that actually helps in-sourcing rather than promotes outsourcing. That’s a position that he stood for throughout this election, and I feel confident that he will follow through on that.”

In fact, the Obama White House had drafted a fair contracting rule prior to the 2010 election, but didn’t issue it after the Republicans took the House.

I recognize that legislation is more long-lasting, but since there’s no reason for us to push for other things as well. To be clear, I’m not laying all the blame for inaction on the feet of the White House – there has been very little discussion of the possibility anywhere. Until we push for it, it’s on us.

One more thought. Not all workers are covered by federal labor law.  State employees, domestic workers, and agricultural workers are all outside the NLRB’s jurisdiction. States could extend protections to those workers.  I wrote before about government enforcing labor standards on government assisted businesses and those with government contacts at the local level to protect workers. And despite the fact that it didn’t pass in Michigan, the idea of seeking a constitutional amendment to protect collective bargaining rights.  There are numerous ways that protections can be sought.  The tendency to focus on legislation draws out attention away from that.