Greg Mankiw gives pretty good argument for other side

Greg Mankiw’s odd paen to federalism.

(cross-posted at Blog of the Century).

I like Harvard economist Greg Mankiw. He’s a terrific writer and economist. A year ago today, I wrote a complimentary column about Mankiw’s support for gas taxes. Wow, do I disagree with his social policy vision. In today’s Times, he has a column on federalism, “Competition is healthy for governments, too.” I find this a pretty sound argument for the other side.

Our federalist system has long proved problematic when it comes to meeting the basic needs of severely disadvantaged people. State governments face tight constraints on taxation. Their administrative capacity is often limited. Moreover, states are often expected to do the most in helping the needy at precisely the moment when national or global economic forces are battering the state economy.

When wealthy people can move, states face clear limits on progressive taxation. When poor people can move, states face very strong incentives not to be the softest touch. In the resulting competitive equilibrium, many states end up with much less progressive policies than their citizens would otherwise want, and much less progressive than the optimal national policy would be.

Whether generous states truly are “welfare magnets” remains unclear. The empirical literature is a bit mixed. In the disability arena, I would not be surprised to find that the story has substantial validity. Consider the following story…. Continue reading “Greg Mankiw gives pretty good argument for other side”

Election 2011: Your Homework Assignment

In the wake of the good political news last night, especially from Ohio, let us pause and consider these questions from Charlie Pierce over at Esquire (penned before the results were in).  Because at the end of the day, they are the ones that matter.  And if we can’t answer them, then anything that happened yesterday will be less than a footnote.

Let’s assume that Kasich gets kicked around, the way it looks like he might, and the way he thoroughly deserves to be, god knows. What happens next? Is there really an actual movement building here, a parallel mobilization among the largely white middle class that would parallel the one taking place in the Occupy camps around the country? Or will the people on the lawn go back to sneering about the drum-beating hippies sleeping in the parks? Will they all leave the state capitol in Columbus and go back to listening to the hundreds of sub-Limbaughs on their local radio stations, telling them that teachers have it too good because they have summers off, or that firefighters are gaming the disability system, and that “government” is merely a way for all of Them to steal Our money, and that voting is just a waste of time? Do they all go back to worrying about The Deficit, which is merely convenient shorthand for all the things they don’t want to pay for? Do they all go home and prepare themselves, through ignorance and apathy, to vote for the next John Kasich who comes along?
 
What are the answers to these questions?  And what are we supposed to do about it?

Safety nets: hammocks or trampolines?

A ropewalk in Rio illustrates the liberatinrg power of a safey net.

A fable about a safety net.

Catacumba park in Rio is a replanted hillside overlooking the upmarket Rio lagoon. It was once occupied by a favela forcibly demolished in 1970 for the greater good, they said. It includes a (paying) adventure trail, with a longish rope walk at two levels: a high one for adults, paralleled by a low one for children, only a metre off the ground. Users of both have to wear a Serious hard hat and a harness clipped to a safety line. The attraction is a success with middle-class parents and children, though it costs too much for the poor. For some reason when we were there the customers were all small girls (footnote).

This got me thinking about safety nets more generally. Continue reading “Safety nets: hammocks or trampolines?”

Europe Is A Lot Less Left-Wing Than Many Americans Think

I remember sitting in a hotel bar in Nevada watching NBC pollmeister Chuck Todd state confidently that Barack Obama would lose the state in the 2008 Presidential election because “The Republican Party always overperforms there”. A Mexican-American businessman with whom I had been chatting during commercials responded “The Nevada he knows isn’t Nevada any more”. When the immigrants who were rapidly changing the state’s political culture helped Obama win, many people revised their outdated view of “right-wing” Nevada, ditto “reliably conservative and kind of racist” North Carolina in 2008 (again, via an Obama win) and the “liberal stronghold” of Massachusetts in 2010 (via Scott Brown’s victory). Yet the perception that Europe is dominated by hard-left political parties remains widespread in the U.S. in the face of a near wipe-out of left-wing governments across the EU.

Perhaps Andy Sabl has hit on the critical variable explaining the gap between perception and reality, at least among conservatives, which is that Europe remains substantially more secular than the U.S, the demise of its left-wing governments notwithstanding. Or more to the point, Europe is substantially less Christian than the U.S. given that Muslim immigrants tend to be devout and are one of the forces moving Europe to the centre-right. I suspect U.S. liberals may also be giving in to wish-fulfillment in their views of Europe: Who wouldn’t like to believe that one’s politics, so often rejected at home, are being implemented far away in older, wiser cultures, with unending success and to unbounding popular gratitude?

This Never Would Have Happened in a Blue State

The front page of the New York Times reports a bullying Governor refusing to maintain an income tax surcharge on high earners, and instead slashing money for public education and Medicaid.

An outrage!  This is why we need to elect Democrats.

Oh, wait a minute….

This never would have happened if Mario Cuomo were alive.

Every last man on K.P.

Patton’s appreciation of tough but unglamorous work—and a bleg for a speech from the Left that does as well or better.

Harold’s fantastic post rightly emphasizes that those who grouse at a few hours’ unexpected arduous labor should think about the lives of those who do it every day.

Harold stresses the policy implications of this: a decent society would do much more to provide those who labor with good health care, occupational safety, an adequate wage, and retirement security.  But there’s something more we need to do: give regular, prominent and explicit recognition to everyone who does a necessary job of not particularly high status.  To my mind, doing this and meaning it is the difference between real leadership and a baron by some other name giving orders to people he or she thinks of as villeins.

Let’s not flatter ourselves: those of us on the Left, broadly speaking, don’t always do this better than than our counterparts on the Right.  (A bleg to prove me wrong follows after the jump.) I’m not sure I know of a socialist or even liberal version of the practice as convincing as Patton’s—real, not sanitized—speech before the Allied invasion of Europe.

[Warning: Being an actual WW II Army speech, this contains lots of profanity.  The text is after the jump.]

Continue reading “Every last man on K.P.”

Frances Fox Piven

Someththe

Frances Fox Piven has been singled out for taunting by Glenn Beck and others. This vitriol has predictably elicited all manner of violent talk, whose bullying depravity is only magnified by their being directed against a 78-year-old woman. It goes without saying that such things exceed the bounds of Democratic politics. And the sheer disproportion of the right-wing response would be funny if it weren’t so creepy. Piven’s articles in The Nation have as much chance of inciting national unrest as another distinguished professor, Louis DeBranges, did in this incident a quarter-century ago.

Yet what about Piven herself, and her Nation essay, “mobilizing the jobless” that prompted such fuss? For five decades, she has sought to address one of the central puzzles and problems of American democratic politics: Why aren’t the jobless and the poor more organized, more angry, and more effective in pressing their claims during fairly catastrophic economic times. And how could one change that? Continue reading “Frances Fox Piven”

How Not to Refute an Academic Blogger in One Embarrassing Omission

On Megan McArdle, Mel Gibson, and inconvenient facts.

While my recent post on the tax deal has sparked a fair amount of debate, which I hope to respond to soon, I wouldn’t normally bother with Megan McArdle’s lengthy and snarky attack on it.  But when she calls what she takes to be my scorched-earth position on negotiating strategy (not actually my position, but more on that in a later post) a “big favorite of academics, who I infer have watched a lot of Mel Gibson movies”—since academics would never get the idea that a reputation for craziness provides negotiating advantages from, say, a Nobel Prize-winning economist—my professional pride is involved.  So bring it on. Let’s see what a Village journalist considers hard-nosed political wisdom.

Writes McArdle,

Sabl’s question seems to me like an incredibly unrealistic one.  It assumes that by really slick application of game theory, progressives can somehow move the dial, so that what negotiations theorists call the ZOPA–the Zone of Possible Agreement–shifts dramatically, making possible much more progressive outcomes than have been realized recently.
But a lot of what professional negotiators do is simply recognize what the limits of the ZOPA are.  They don’t waste energy trying to shift it to encompass impossible outcomes.  Immediately after Democrats have lost a midterm election by historic margins (something I believe I may have mentioned) is not a propitious time to be trying to shift the ZOPA leftward.
The logic of that can’t be faulted.  After all, the Republicans would have been incredibly unrealistic to respond to historic losses in two straight elections by moving rightward.  And they would have been heavily punished at the ballot box if they had.
By the way, Ms. McArdle, in case the previous two sentences were too highfalutin’ and academic for you, I was being ironic.  Don’t know what that means?  There’s an excellent summary in this Ethan Hawke movie.

Update: See Megan McArdle’s comments, and mine, below.  Her comments are substantive in content and handsome in tone, and I hope my response is too.  Elbows having been thrown, I think we’re ready to shake hands and play on.

How the tax deal debate is shaping up—and why we should remember our real opponents

Positions on the tax-cut debate are dividing across three separate dimensions. And on all of them, the differences among Democrats are slight compared to those between us and Republicans.

As far as I can tell, the furious debate over whether the tax deal is good or bad reflects disagreement among Democrats and liberals across three separate dimensions (which is why it will get complicated):

1. Idealists vs. Pragmatists. David Kurtz thinks the main news of Obama’s press conference yesterday is that Obama has finally declared that he’s a pragmatist, not an idealist.  I think that anyone who didn’t know that already was ignoring Obama’s entire biography, let alone his governing style, in favor of a few speeches.  In any case, those who look to a President primarily to articulate their political identity or defend their core principles clearly have reason to be more opposed to the deal than those who see the White House’s job as getting the best outcome in terms of legislation and regulations. In my book Ruling Passions I propose a division of moral labor: idealists should stick to citizen activism—and have a huge and genuine role to play there—while leaving legislation to the pragmatists.  But not everyone thinks that.  Of course, there are plenty of reasons pragmatists might, and do, oppose the deal, but the idealists will likely oppose it more bitterly.

2. Civic republicans vs. non-republican liberals. Civic republicanism (small “r,” of course) is an awkward label for a common position: that the fundamental issue of our time is the ability of the rich, and corporations, to game the political system and prevent the rest of us from exerting true self-governance.  (Roger Hodge’s The Mendacity of Hope, which I haven’t read yet, sounds from what I’ve heard like a pure instance of this view.  Richard Trumka’s angry statement opposing the deal, with its stress on income inequality and “moneyed interests,” is, perhaps surprisingly, another instance.)  In contrast, a non-republican liberal position is that giving material sustenance to the poor is more important than whether the rich get paid off, however regrettable and undeserved that is.  Randi Rhoads has been pushing this position hard on her show and her blog.  And Obama has explicitly taken it as well.

3. Immediate results people vs. repeated game players. Many of the deal’s supporters (Steve Benen, Ed Kilgore) have started to ask opponents what they propose as the next move if it’s voted down.  We opponents, frankly, don’t have a great answer so much as a different question: how can we change baseline expectations so as to achieve progressive outcomes in future negotiations?.  Everybody, of course, thinks that both the short and the long term are important to some degree.  But the deal’s supporters largely rely on the argument that results now are very important, either because in a recession those who lose benefits will face great and immediate hardship (see James), or because stimulus now will crucially boost Democratic prospects in 2012 (which is, to fill in the minor premise, an unusually important election because of the Affordable Care Act).  Most of the policy wonks, by the way, are lining up behind the deal because their professional deformation is to solve the immediate problem rather than looking at the future negotiating situation it sets up.  As professional biases go, this one’s honorable and functional—but still a bias.

My own all-things-considered opposition reflects my being a pragmatist (with respect to legislative negotiations, not politics as a whole), mostly a liberal but with growing sympathies for republicanism, and a fanatical repeated-gamer.

BUT we have to remember something.  Both sides of these debates have immeasurably more in common with each other than with the Republicans—who want to sabotage Democrats tactically and also destroy them ideologically; dislike the welfare state passionately and on principle while wanting as a matter of principle and practice to give the rich and corporations more money and power, not less; and are excellent players, on the oligarchical side, of both one-shot and repeated games.  Steve is dead right on this.  We should vigorously criticize one another.  But we should save our real outrage for its proper target: Republicans who callously and deliberately held the most vulnerable members of society hostage to the interests of the wealthiest.  Instead, I fear that the humane cop who wants to negotiate with the kidnapper and the tough-minded one who doesn’t will forget who the criminal is.

Update: “Non-republican liberal” seems a bit unfair to the category, since that label defines the school of thought in terms of what it’s not.  With some worries, since the usage is common in social-philosophy debates but can mean something quite different (and pejorative) in American political discourse, I propose calling these kinds of liberals welfarist liberals because their/our main concern is how people’s lives go, not how power is distributed.

Did Public Employee Unions Cause the Collapse of the State?

Perhaps despite himself, David Brooks raises some good points about public sector sustainability in an otherwise-wretched column.

David Brooks thinks so:

New Jersey can’t afford to build its tunnel, but benefits packages for the state’s employees are 41 percent more expensive than those offered by the average Fortune 500 company. These benefits costs are rising by 16 percent a year.

New York City has to strain to finance its schools but must support 10,000 former cops who have retired before age 50.

California can’t afford new water projects, but state cops often receive 90 percent of their salaries when they retire at 50. The average corrections officer there makes $70,000 a year in base salary and $100,000 with overtime (California spends more on its prison system than on its schools).

One of the easiest ways to be a west coast blogger is to wait until 9 pm Pacific time, look at the dumb thing that Brooks has said today, and blog it.  But here, it’s a little more complicated.

On one level, Brooks’ piece is simply moronic.   For instance: 

1)  He simply claims that California “can’t afford” various projects, conveniently ignoring the fact that the famously dysfunctional California Legislature reached an agreement on building several of these projects.  He never really costs out any of his numbers: if New Jersey workers had pitifully low pensions like private companies, would that mean that the state suddenly would have been flush with cash?  You know the answer to that one.

2)  Nowhere in his argument will you find any discussion of the anti-tax hysteria that has infected the Republican Party: Saint Ronald Reagan’s first proposal upon being elected Governor in 1966 was to raise taxes to close a deficit. 

3)  He notes that California pays more for prisons than schools, but never mentions that a crucial reason for this is the conservative obsession with three-strikes laws. 

4)  Somehow, as a taxpayer I wouldn’t feel comforted to know either that 60-year-old cops are chasing criminals on the streets, or that we can’t recruit younger cops because the work is dangerous and they don’t get a pension. 

5)  And if you are really looking to see where state costs have skyrocketed, the answer is found in the Medicaid program; yet somehow, after hemming and hawing, Brooks could not bring himself to support the Affordable Care Act, the most ambitious attempt to control health care costs in US history, and a law in which states receive a 90% match for new Medicaid expenditures.

Yet I couldn’t bring myself to hate this column, because progressivism does have a problem with public employee unions.  Most famously, of course, are some teachers’ unions, such as the reactionary United Teachers Los Angeles, which has devoted most its energy to resisting the advance of public school accountability.

And that’s not all.  A friend of mine worked on the transition team for then-incoming Mayor Richard Riordan in 1993.  He’s a progressive Democrat.  His brief was the city’s Department of Water and Power.  And he learned that fully 25% of the Department’s budget was devoted to pension expenses.  It is all-too-common for public employees to retire at age 50, get a full pension, and then go into consulting on the same issues in which they previously worked (obviously, this applies to people such as engineers and the like, who work at DWP), essentially drawing two salaries.

At another state agency where I worked, I learned that we could not use hybrid vehicles for the agency’s cars, because the state mechnics’ union members didn’t know how to fix them, and didn’t want to learn.  So we were stuck with cars getting far less mileage, wasting at hundreds of thousands of dollars over the long term.

As the Yiddish proverb goes, “for instance isn’t proof.”  Or to put it another way: the plural of anecdote isn’t data.  But the aging of the population means that governments stand to have huge pension debts, which means less money for programs.  These aren’t idle fears (and of course they aren’t limited to the public sector, either, as Roger Lowenstein’s excellent book shows in both public and private contexts).  As much as I’d like to say that Brooks has once again wasted some of the most precious real estate in American journalism, I can’t.  At least not yet.  It will be interesting to see how observers who actually do know the numbers respond.