Tuesday, July 10, 2018

Stiglitz:American Democracy on the Brink

American Democracy on the Brink

Jun 29, 2018 JOSEPH E. STIGLITZ

In just the past few days, the US Supreme Court has handed down a series of rulings favoring corporations over workers, and right-wing extremists over the majority of Americans. With the Court following Donald Trump down the path of racism, misogyny, nativism, and deepening inequality, it would appear that yet another pillar of American democracy has crumbled.

NEW YORK – The center is not holding. After US President Donald Trump's election in November 2016, millions of Americans and others around the world took solace in the idea that strong institutions and the US Constitution would protect American democracy from his predations. But events over the past few days suggest that America's institutional shock absorbers are not as robust as advertised. Within the Republican Party, which controls all three branches of the US government, the siren song of tribal politics is drowning out any remaining fidelity to America's constitutional traditions.

The clearest case of institutional rot can be found in the US Supreme Court. In the space of just a few days, the Court has issued four divisive rulings that appear to have been designed to entrench illiberal Trumpism for years to come. Making matters worse, on Wednesday, Justice Anthony M. Kennedy, the Court's longstanding swing voter, announced his retirement, paving the way for Trump to appoint another justice who has been hand-selected by the right-wing Federalist Society.

The Court's rulings this term have all but confirmed the widely held view that it is no longer acting as a wise and impartial adjudicator of the inevitable disputes that arise in any society. Instead, it has become merely another instrument for advancing an extreme right-wing agenda, one that has subjected the United States to minority rule.1

Recall that, in the 2016 election, Trump received three million fewer votes than Hillary Clinton, and Republicans held onto the Senate, even though Republican candidates received fewer votes overall than Democratic candidates. Similarly, in the US House of Representatives, Republicans won a majority far larger than their actual share of the total vote, owing to partisan gerrymandering after the 2010 census. In 2000, the Supreme Court handed the presidency to George W. Bush, who, like Trump, won fewer votes than his opponent. Now it has upheld the Republicans' gerrymandering, as well as Republican legislation that has suppressed voting among groups more likely to vote for Democrats.

OF, BY, AND FOR THE CORPORATIONS

The Court's first egregious decision this week came on Monday, in the case of Ohio v. American Express. In a 5-to-4 decision, the Court upheld anti-competitive contracts that American Express imposes on merchants who accept AmEx credit-card payments. As I pointed out in an amicus brief to the Court, AmEx's arguments in defense of its anti-competitive practices were totally specious.

The decision, written by the Court's most predictably right-wing member, Clarence Thomas, betrayed a deep misunderstanding of economics, and reflected a rigidly ideological, pro-business stance. All told, the ruling amounts to a major victory for monopoly power. Major corporations that engage in similar anti-competitive practices will now be able to entrench their market dominance even further, distorting the economy and increasing America's already glaringly high levels of inequality.



Equally perverse was the Court's ruling in Janus v. American Federation of State, County, and Municipal Employees. In another 5-to-4 decision, the Court prohibited public-sector labor contracts from requiring that government workers contribute dues to unions that are negotiating on their behalf. In a country already suffering from a massive imbalance between employers and workers, the Court has loaded the scale even further in favor of the former. Selfish workers will now be able to free ride on their colleagues' efforts to bargain for improved working conditions and higher pay; and if there are enough of such workers, unions will be further weakened for lack of funds.

The purpose of unions is to take political positions that will advance the interests of workers. And to ensure that the political positions they take reflect the views of a majority of workers, unions hold democratic elections. The five conservative justices who signed the opinion, however, offered the galling argument that forcing workers to pay to support views with which they disagree is a violation of their First Amendment free-speech rights.2

It is worth remembering that in Citizens United v. Federal Election Commission(2010), the Court decided that the First Amendment permits corporations to make unlimited contributions to political campaigns. So, in the eyes of the Court's conservatives, corporations may support views that run contrary to a majority of their shareholders and workers – who had no say in the matter – but unions may not express views that are opposed by even a single dues-payer.1

CULTURE WAR "JUSTICE"

The Court's conservatives offered another perverse reading of the First Amendment in National Institute of Family and Life Advocates v. Becerra. In yet another partisan, 5-to-4 decision, they ruled that a state cannot force a licensed reproductive-health center to inform patients of the availability of abortion options. According to this view, freedom of speech includes the freedom not to say certain things, even if one is purporting to be a legitimate health-care provider.

Under this extremist view, cigarette companies do not have to disclose that smoking is bad for one's health, and banks need not disclose the full extent of their charges. In these and other situations in the past, the Court struck a balance between free speech and other equally important rights. But in the case this week, there was no balancing whatsoever. The reason is simple: The Court, as a tool of the extremist right, is advancing a Republican campaign against a woman's right to make informed decisions concerning her own health.


For years, Republicans at the state level have been rolling out measures to make it harder for women to get an abortion – or even to learn about it – and these policies have proven particularly harmful to the poor. But now that Kennedy is retiring, the right to abortion itself, recognized in the landmark case of Roe v. Wade (1973), will be in the conservatives' crosshairs. If it is overturned, Republican-controlled states across the country will suddenly have the power to deny women's longstanding 14th Amendment right to privacy and control over their bodies.

The fourth alarming decision this week came in Trump v. Hawaii, in which the Court's conservative majority upheld Trump's executive order banning entry to travelers from a number of predominantly Muslim countries. The Court ruled that Trump did not abuse his authority to control immigration in the interest of national security. Yet, as Trump himself has indicated on many occasions, protecting national security was not really his intent when crafting the ban. As Associate Justice Sonia Sotomayor made clear in her blistering dissent, Trump's own incendiary tweets show that his real goal was to keep Muslims out of the US.

To be sure, the Court was reviewing the third revision of Trump's travel ban, which had been expanded beyond Muslims to include bans on North Koreans and Venezuelans. But the administration's changes were obviously meant to disguise Trump's true motives. The administration's claim that a ban is necessary because it is too difficult to vet people from these two countries is laughable. North Koreans, in particular, have been vetted with a fine-tooth comb for decades, given that there has never been a peace agreement formally ending the 1950-1953 Korean War.

And, of course, if Trump's goal is to protect national security, one wonders why Saudi Arabia – whose citizens were responsible for the September 11, 2001, attacks – is not on the list. The answer is obvious: Trump wants to maintain his and his family's lucrative relationship with the Kingdom's rulers.

Now, if the Court's perspective is taken to its logical conclusion, Trump can simply defend any outrageous action he takes on the dubious grounds of "national security" – the alibi beloved by all fascist dictatorships. The Court's conservatives have signaled that they will turn a blind eye to policies motivated by racial or religious animus. And, presumably, they would have no problem supporting Trump' trade war, which he has also launched in the name of national security.

TYRANNY OF THE MINORITY

The four major decisions handed down by the Supreme Court this term are each disturbing in their own way. America already has the highest level of inequality among advanced countries, and the Court has now empowered monopolies and corporations, while gutting the power of trade unions to reach collective bargains that benefit the working and middle classes.

But, beyond that, the way the Court arrived at these four decisions has launched a new political war. Since America's founding, successive governments have struggled to craft norms that would steer the country away from extremism. Heeding the wisdom of America's founders, most US leaders have understood the risks posed by ruling parties that abuse their power, leading to the establishment of an array of processes and institutions to prevent majoritarian diktats. For example, in the US Senate, the filibuster rule sets a floor of 60 votes for passing major legislation, precisely so that the majority party cannot run roughshod over the minority.

But then Republicans started ignoring these norms. The US Constitution requires that the Senate provide "advice and consent" on presidential appointments, and the norm had long been that only truly unqualified candidates should be rejected. But during Barack Obama's presidency, Senate Republicans used the filibuster with abandon to block candidates with whom they disagreed on issues such as abortion. As executive-branch vacancies began to pile up, Senate Democrats, then in the majority, had no choice but to end the filibuster rule for presidential nominations. Even at the time, the dangers of such a move were clear. An extremist president, supported by a compliant Senate, could appoint almost anyone to any position.

Today, we are now witnessing what happens when the system of checks and balances is torn asunder. After retaking the Senate in 2014, Republicans refused even to consider Obama's highly qualified centrist candidate for the Supreme Court, Merrick B. Garland. And last year, after their obstructionism paid off with Trump's victory, the Republicans ended the filibuster for Supreme Court nominations, in order to confirm Trump's pick, Neil M. Gorsuch, to succeed Antonin Scalia (who by that point had been dead for 14 months). Now that Justice Kennedy's retirement has opened another vacancy on the bench, Trump will be able to pack the Court for at least a generation. After that happens, we will most likely be in a situation in which a majority of Americans has no confidence in the Court whatsoever – to say nothing of the other branches of government.

THE DYING OF THE LIGHT

The US Constitution provides that Supreme Court justices "shall hold their Offices during good Behavior," which implies a life-long tenure. But in 1789, people simply did not live as long as they do today. And so, over the years, Republicans have gamed the system by appointing young, sometimes dubiously qualified justices in an attempt to pack the federal courts. The fact that Democrats have not tried to do the same suggests that they, at least, take seriously the responsibility of finding the most qualified candidates.

Given the decisions that the Court handed down this season, it is now obvious that the US needs a constitutional amendment to set term limits for justices. That won't be easy. But it is imperative to restore the Court's legitimacy as a fair arbiter.

The only alternative is to expand the size of the Court, which does not require a constitutional amendment. That is what former President Franklin D. Roosevelt famously tried and failed to do when a narrowly divided Court threatened to obstruct his New Deal reforms. But breaking the "norm" of nine justices poses its own risks, because once that threshold has been crossed, the extremist Republican Party will have yet another tool for packing the Court.3

Another important lesson to be drawn from the Supreme Court's just-completed term is that the rule of law, so often held up as the backbone of American society and its political economy, is perhaps not nearly as sturdy as many imagine it to be. The "law," after all, can and has been used by the powerful to oppress the weak. And, as we are seeing today, it can also be used by a minority to put its foot on the throat of the majority.

Even if Fox News and other forms of right-wing propaganda persuaded a narrow majority of Americans to support the arguments offered by the Court's conservatives, its recent decisions would be questionable. And yet all of them will have far-reaching implications. As Duke University law professor Jedediah Purdy rightly noted, they form "part of a longer historical arc: the dismantling of the legal legacy of the New Deal and the creation of law for a new Gilded Age." In other words, the Court is steadily changing the rules of the game in ways that will alter the nature of American society for the worse.

Trump is taking America down the path of racism, misogyny, nativism, prejudice, and protectionism, while pursuing economic policies that serve the very few at the expense of the overwhelming majority. He and his Republican lackeys are undermining America's system of checks and balances, as well as its truth-telling institutions, from universities and research institutions to the media and intelligence agencies.

The judiciary is supposed to provide a check when others cannot. Now that the Supreme Court has cast its lot with Trump, US democracy is truly in peril.

Joseph E. Stiglitz, a Nobel laureate in economics, is University Professor at Columbia University and Chief Economist at the Roosevelt Institute. His most recent book is Globalization and Its Discontents Revisited: Anti-Globalization in the Era of Trump.

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John Case
Harpers Ferry, WV
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How To Avoid a Trade War [feedly]

How To Avoid a Trade War
https://www.project-syndicate.org/commentary/china-europe-reaction-trump-trade-tariffs-by-dani-rodrik-2018-07

DANI RODRIK

Economists typically argue against focusing excessively on the losers from freer trade, and they decry the tendency to overlook the beneficiaries on the export side. They should not be prone to the same fallacy now, by ignoring that US protectionism surely will generate some beneficiaries as well in other countries.

CAMBRIDGE – Defying common sense as well as business and financial elites, US President Donald Trump seems to relish the prospect of a trade war. On July 6, his latest trade restrictions – 25% tariffs on about $34 billion of Chinese imports – took effect. They were promptly met by retaliatory tariffs on an equivalent volume of US exports to the Chinese market. Trump has threatened further measures against China, as well as tariffs on automobile imports from Europe. And it remains possible that he will withdraw the United States from the North American Free Trade Agreement if Mexico and Canada do not agree to amend it to his liking.




Trump's kneejerk protectionism does little to help the working class that helped elect him. Disaffected congressional Republicans and unhappy corporations that have supported him on other matters may yet rein him in. But those who, like me, thought Trump's bark would be worse than his bite on trade are having second thoughts about where all of this might lead.

But before we get too carried away with doomsday scenarios on trade, we need to consider other countries' incentives as well. Trump may well want a trade war, but he cannot have it on his own. A trade war requires other economies to retaliate and escalate. And there are compelling reasons why they should not do so.

In the usual scenario, trade retaliation occurs because countries have economic reasons to depart from low tariffs. The canonical historical experience unfolded during the early 1930s, when countries were caught in the Great Depression with high unemployment and inadequate policy remedies. Counter-cyclical fiscal policy was not yet in vogue – John Maynard Keynes' General Theory was published only in 1936 – while the Gold Standard rendered monetary policy worse than useless.

Under the circumstances, trade protectionism made some sense for each country on its own, as it shifted demand away from foreign goods and thus helped support domestic employment. (Of course, for all countries taken together, protectionism spelled disaster; one country's expenditure shift was more than offset by others' own shifts.)

Economists also consider another scenario that focuses on the so-called terms-of-trade effects of tariffs. By restricting trade volumes, a large country or region can manipulate the prices at which it competes in world markets to its advantage. An import tariff, in particular, would tend to depress the world prices of imported commodities, while raising their tariff-inclusive prices – with the home treasury reaping the difference in tariff revenues.


If Europe, China, and other trade partners were to retaliate in response to Trump's tariffs they would simply reduce their own gains from trade without reaping any of the advantages of protectionism. And they would be doing Trump a favor by lending surface plausibility to his complaints about the "unfairness" of other countries' trade policies vis-à-vis the US. For the rest of the world, raising trade barriers would be a case of cutting off one's nose to spite one's face.Neither scenario makes much sense today. Europe and China are not particularly interested in depressing world prices of their imports or in the resulting revenue. Employment considerations are not a major issue, either. While some countries in the eurozone suffer from high levels of unemployment, there is nothing that protectionism can do for these countries that expansionary fiscal or monetary policy (the latter by the European Central Bank) cannot do better.

Besides, if Europe and China want to uphold a rules-based multilateral trade regime, as they say they do, they cannot mirror Trump's unilateralism and take matters into their own hands. They need to go through the World Trade Organization and wait for formal authorization to reciprocate, without expecting a quick resolution or that Trump will have much respect for the eventual ruling.

In short, both self-interest and principle counsel restraint and no (immediate) retaliation. This is the time for Europe and China to stand tall. They should refuse to be drawn into a trade war, and say to Trump: you are free to damage your own economy; we will stick by policies that work best for us.

Provided other countries do not overreact, Trump's protectionism need not be as costly as many accounts make it sound. The value of trade covered by the measures and countermeasures resulting from Trump's trade policies has already reached $100 billion, and Shawn Donnan of the Financial Times reckons that this figure could soon reach more than $1 trillion, or 6% of global trade. This is a large number. But it assumes retaliation, which need not occur.

More important, what matters is incomes and welfare, not trade per se. Even if the volume of trade takes a big hit, aggregate economic performance need not suffer much. Some European airlines favor Boeing over Airbus, while some US airlines prefer Airbus over Boeing. Trade restrictions may result in a total collapse in this large volume of two-way trade in aircraft between the US and Europe. But the overall loss in economic welfare would be small, so long as airlines view the two companies' products as close substitutes.

This is not to minimize the costs that specific European and Chinese companies may incur as the US market becomes more closed. But for every exporter forced to seek alternative markets, there may be another domestic firm presented with a new economic opportunity. As US trade shrinks, there will be also fewer American competitors and less US competition.

Economists typically make the point in reverse, when they argue against focusing excessively on the losers from freer trade, and they decry the tendency to overlook the beneficiaries on the export side. They should not be prone to the same fallacy now, by ignoring that US protectionism surely will generate some beneficiaries as well in other countries.

Trump's protectionism may yet result in a global trade war, with eventual economic consequences that are far more serious than the self-harm it entails at present. But if that happens, it will be as much the result of miscalculation and overreaction on the part of Europe and China as of Trump's folly.
DANI RODRIK

Writing for PS since 1998
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Dani Rodrik is Professor of International Political Economy at Harvard University's John F. Kennedy School of Government. He is the author of The Globalization Paradox: Democracy and the Future of the World Economy, Economics Rules: The Rights and Wrongs of the Dismal Science, and, most recently, Straight Talk on Trade: Ideas for a Sane World Economy.

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Sunday, July 8, 2018

China's unicorn Calvary

‘It’s Almost Like a Ghost Town.’ Most Nursing Homes Overstated Staffing for Years



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'It's Almost Like a Ghost Town.' Most Nursing Homes Overstated Staffing for Years // NYT > Business
https://www.nytimes.com/2018/07/07/health/nursing-homes-staffing-medicare.html

Payroll records for more than 14,000 facilities show that the number of nurses and aides at work dips far below average some days and consistently sinks on weekends.
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U.S. Opposition to Breast-Feeding Resolution Stuns World Health Officials



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U.S. Opposition to Breast-Feeding Resolution Stuns World Health Officials // NYT > Business
https://www.nytimes.com/2018/07/08/health/world-health-breastfeeding-ecuador-trump.html

Trade sanctions. Withdrawal of military aid. The Trump administration used both to try to block a measure that was considered uncontroversial and embraced by countries around the world.
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Hope for Mexican farmers

Saturday, July 7, 2018

Shakespeare on tyranny [feedly]

Shakespeare on tyranny
http://understandingsociety.blogspot.com/2018/06/shakespeare-on-tyranny.html


Stephen Greenblatt is a literary critic and historian whose insights into philosophy and the contemporary world are genuinely and consistently profound. His most recent book returns to his primary expertise, the corpus of Shakespeare's plays. But it is -- by intention or otherwise -- an  important reflection on the presidency of Donald Trump as well. The book is Tyrant: Shakespeare on Politics, and it traces in fascinating detail the evolution and fates of tyrants through Shakespeare's plays. Richard III gets a great deal of attention, as do Lear and Macbeth. Greenblatt makes it clear that Shakespeare was interested both in the institutions of governance within which tyrants seized power, and the psychology of the tyrant. The parallels with the behavior and psychology of the current US President are striking.

Here is how Greenblatt frames his book.
"A king rules over willing subjects," wrote the influential sixteenth-century Scottish scholar George Buchanan, "a tyrant over unwilling." The institutions of a free society are designed to ward off those who would govern, as Buchanan put it, "not for their country but for themselves, who take account not of the public interest but of their own pleasure." Under what circumstances, Shakespeare asked himself, do such cherished institutions, seemingly deep-rooted and impregnable, suddenly prove fragile? Why do large numbers of people knowingly accept being lied to? How does a figure like Richard III or Macbeth ascend to the throne? (1)
So who is the tyrant? What is his typical psychology?
Shakespeare's Richard III brilliantly develops the personality features of the aspiring tyrant already sketched in the Henry VI trilogy: the limitless self-regard, the lawbreaking, the pleasure in inflicting pain, the compulsive desire to dominate. He is pathologically narcissistic and supremely arrogant. He has a grotesque sense of entitlement, never doubting that he can do whatever he chooses. He loves to bark orders and to watch underlings scurry to carry them out. He expects absolute loyalty, but he is incapable of gratitude. The feelings of others mean nothing to him. He has no natural grace, no sense of shared humanity, no decency. He is not merely indifferent to the law; he hates it and takes pleasure in breaking it. He hates it because it gets in his way and because it stands for a notion of the public good that he holds in contempt. He divides the world into winners and losers. The winners arouse his regard insofar as he can use them for his own ends; the losers arouse only his scorn. The public good is something only losers like to talk about. What he likes to talk about is winning. (53)
One of Richard's uncanny skills—and, in Shakespeare's view, one of the tyrant's most characteristic qualities—is the ability to force his way into the minds of those around him, whether they wish him there or not. (64)
Greenblatt has a lot to say about the enablers of the tyrant -- those who facilitate and those who silently consent.
Another group is composed of those who do not quite forget that Richard is a miserable piece of work but who nonetheless trust that everything will continue in a normal way. They persuade themselves that there will always be enough adults in the room, as it were, to ensure that promises will be kept, alliances honored, and core institutions respected. Richard is so obviously and grotesquely unqualified for the supreme position of power that they dismiss him from their minds. Their focus is always on someone else, until it is too late. They fail to realize quickly enough that what seemed impossible is actually happening. They have relied on a structure that proves unexpectedly fragile. (67)
One of the topics that appears in Shakespeare's corpus is a class-based populism from the under-classes. Consider Jack Cade, the lying and violent foil to The Duke of York.
Cade himself, for all we know, may think that what he is so obviously making up as he goes along will actually come to pass. Drawing on an indifference to the truth, shamelessness, and hyperinflated self-confidence, the loudmouthed demagogue is entering a fantasyland—" When I am king, as king I will be"—and he invites his listeners to enter the same magical space with him. In that space, two and two do not have to equal four, and the most recent assertion need not remember the contradictory assertion that was made a few seconds earlier. (37)
And what about the fascination tyrants have with secret alliances with hostile foreign powers?
Third, the political party determined to seize power at any cost makes secret contact with the country's traditional enemy. England's enmity with the nation across the Channel—constantly fanned by all the overheated patriotic talk of recovering its territories there, and fueled by all the treasure and blood spilled in the attempt to do so—suddenly vanishes. The Yorkists—who, in the person of Cade, had pretended to consider it an act of treason even to speak French—enter into a set of secret negotiations with France. Nominally, the negotiations aim to end hostilities between the two countries by arranging a dynastic marriage, but they actually spring, as Queen Margaret cynically observes, "from deceit, bred by necessity" (3 Henry VI 3.3.68).
How does the tyrant rule? In a word, badly.
The tyrant's triumph is based on lies and fraudulent promises braided around the violent elimination of rivals. The cunning strategy that brings him to the throne hardly constitutes a vision for the realm; nor has he assembled counselors who can help him formulate one. He can count—for the moment, at least—on the acquiescence of such suggestible officials as the London mayor and frightened clerks like the scribe. But the new ruler possesses neither administrative ability nor diplomatic skill, and no one in his entourage can supply what he manifestly lacks. His own mother despises him. His wife, Anne, fears and hates him. (84)
Several things seem apparent, both from Greenblatt's reading of Shakespeare and from the recent American experience. One is that freedom and the rule of law are inextricably entangled. It is not an exaggeration to say that freedom simply is the situation of living in a society in which the rule of law is respected (and laws establish individual rights and impersonal procedures). When strongmen are able to use the organs of the state or their private henchmen to enact their personal will, the freedom and liberties of the whole of society are compromised.

Second, the rule of law is a normative commitment; but it is also an institutional reality. Institutions like the Constitution, the division of powers, the independence of the judiciary, and the codification of government ethics are preventive checks against arbitrary power by individuals with power. But as Greenblatt's examples show, the critical positions within the institutions of law and government are occupied by ordinary men and women. And when they are venal, timid, and bent to the will of the sovereign, they present no barrier against tyranny. This is why fidelity to the rule of law and the independence of the justice system is the most fundamental and irreplaceable ethical commitment we must demand of officials. Conversely, when an elected official demonstrates lack of commitment to the principles, we must be very anxious for the fate of our democracy.

Greenblatt's book is fascinating for the historical context it provides for Shakespeare's plays. But it is even more interesting for the critical light it sheds on our current politics. And it makes clear that the moral choices posed by politicians determined to undermine the institutions of democracy are perennial, whether in Shakespeare's time or our own.

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