Working-class Studies: Class(room) Warfare [feedly]

Class(room) Warfare
https://workingclassstudies.wordpress.com/2019/04/15/classroom-warfare/

Kathy M. Newman  

Students protesting outside the courtroom, photo by Joseph Prezioso

The actress Felicity Huffman—along with 13 other parents charged in the college admissions scandal—entered plea deals last week, putting pressure on actress Lori Laughlin and her husband, designer Mossimo Giannulli, to do the same. Prosecutors are hinting that if Laughlin doesn't accept a deal she could face 20 years in prison, 3 years of probation, and a $250,000 fine.

I have enjoyed EVERY SINGLE SECOND of this scandal and its coverage. It has exploded so many of the lies we tell ourselves about America being a fair and just society—especially when it comes to access to higher education. For those who think about class, this scandal has been like Halloween, Christmas and Easter rolled into one. Journalists and bloggers are using words like class, blue collar, elite and privilege.

Nothing of the actual details of this scandal—the bribes paid, the photos photoshopped, the tests taken by fakers—have shocked me. What has surprised me, however, is that journalists and bloggers have been using this scandal to talk about class and inequality. As sociologist Shamus Khan wrote in The Washington Post, "the true tragedy is that almost all rich families buy their kids into elite colleges by purchasing advantages they pass off as talents, whether by way of sailing lessons or elaborate vacations planned with an eye on admissions essays. We view these vastly overrepresented children of the rich as having earned their spots." This, another blogger concurred, "is the real scandal."

These comments point to the many ways that rich people get their kids into college. On the lower end of the scale is all the money many of us are able spend on music lessons, test prep, elite soccer programs, and summer-abroad service project opportunities for our kids—to name a few of the advantages families like mine can afford. At the next level are the parents who can afford to send their kids to expensive and prestigious prep and boarding schools. And, finally, at the top tier, are the parents who can donate tens of thousands or even millions of dollars to college campuses in return for a guarantee of their child's entry into said college. As many have noted in reporting on the admissions scandal, Jared Kushner's parents got him into Harvard by donating 2.5 million dollars a few years before Kushner applied.

The Associated Press turned to Richard V. Reeves, whose book Dream Hoarders showed how the upper echelon hoards all the best opportunities for itself. As Reeves commented on the scandal, "[f]or most people outside the elite, these institutions might as well be on the moon. This story just reinforces that, the way in which money buys opportunity in America."

Even Fox News declared that the "COLLEGE CHEATING SCANDAL SHOULD MAKE BLUE-COLLAR FAMILIES ABSOLUTELY FURIOUS" (all caps in the original).

Writers reveling in this scandal have even pointed out that the origin story for the very word "meritocracy" is a hoax, coined by the British writer in 1958 with his fictional, The Rise of the Meritocracy, a satirical criticism of the concept of meritocracy.

So what gives? Has the chattering class joined the revolution? Probably not.

On the other hand, something has shifted in the American political terrain, and the shift has two origins and three palpable impacts. The first origin is the global financial collapse of 2008. From the early radical critiques of the collapse and the Marx-informed analyses provided by economists like Thomas Piketty, to the new working class-centric language of Occupy Wall Street and the discovery of the 99%, to the now completely normalized presidential candidate proposals such as Medicare for All, universal basic income, and free college, we are gradually becoming a nation that sees inequality for the crisis it is.

The second shift was produced by the election of Donald Trump. On the one hand, Trump showed that a populist strain of anti-neoliberalism—nativist, protectionist, bring-industrial-jobs-back, anti-trade, pro-tariff—could be part of a winning rhetoric. At the same time, Clinton's campaign made clear that a Goldsmith's, big-Pharma, Tech-sector-backed Democratic candidate would not take radical, pro-working-class positions. Even now many Congressional leaders who are still beholden to the super-rich reject the idea that workers need a living minimum wage of $15.00 an hour (and more).

The first impact of this shift is the resurgence within the American labor movement. Massive strikes, currently of grocery store workers (on strike in the Northeast), graduate student workers at the University of Illinois, Sacramento teachers last week, and the LA Unified School District teachers earlier this year. Corey Robin has called the massive wave of teachers' strikes across the country the "real resistance" movement in the US today.

The second outcome has been the emergence of politicians who are willing to address class in a way that we have not seen since the 1930s. Alexandria Ocasio-Cortez is one, of course, but there are others, too, including Elizabeth Warren and Bernie Sanders. In Chicago, six City Council representatives were just elected with backing from the Democratic Socialists of America. Even the not-much-talked-about presidential candidate Andrew Yang is running his own universal basic income experiment (N=1) in New Hampshire.

The third sign of this shift revealed itself in this admissions scandal coverage: the willingness of ordinary journalists and bloggers to write explicitly about class. While many of us in Working-Class Studies have been doggedly pointing out the presence and importance of class in our academic and public facing work, for many years, it seems, that the rest of the world is finally catching up.

Now, to the barricades!

Kathy M. Newman, Carnegie Mellon University

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Dani Rodrik: Peaceful Coexistence 2.0 [feedly]

Peaceful Coexistence 2.0
https://www.project-syndicate.org/commentary/sino-american-peaceful-economic-coexistence-by-dani-rodrik-2019-04

Today's Sino-American impasse is rooted in "hyper-globalism," under which countries must open their economies to foreign companies, regardless of the consequences for their growth strategies or social models. But a global trade regime that cannot accommodate the world's largest trading economy is a regime in urgent need of repair.

CAMBRIDGE – The world economy desperately needs a plan for "peaceful coexistence" between the United States and China. Both sides need to accept the other's right to develop under its own terms. The US must not try to reshape the Chinese economy in its image of a capitalist market economy, and China must recognize America's concerns regarding employment and technology leakages, and accept the occasional limits on access to US markets implied by these concerns.

The term "peaceful coexistence" evokes the Cold War between the US and the Soviet Union. Soviet leader Nikita Khrushchev understood that the communist doctrine of eternal conflict between socialist and capitalist systems had outlived its usefulness. The US and other Western countries would not be ripe for communist revolutions anytime soon, and they were unlikely to dislodge the Communist regimes in the Soviet bloc. Communist and capitalist regimes had to live side by side.

Peaceful coexistence during the Cold War may not have looked pretty; there was plenty of friction, with each side sponsoring its own set of proxies in a battle for global influence. But it was successful in preventing direct military conflict between two superpowers armed to the hilt with nuclear weapons. Similarly, peaceful economic coexistence between the US and China is the only way to prevent costly trade wars between the world's two economic giants.

Today's impasse between the US and China is rooted in the faulty economic paradigm I have called "hyper-globalism," under which countries must open their economies to foreign companies maximally, regardless of the consequences for their growth strategies or social models. This requires that national economic models – the domestic rules governing markets –converge considerably. Without such convergence, national regulations and standards will appear to impede market access. They are treated as "non-tariff trade barriers" in the language of trade economists and lawyers.

Thus, the main US complaint against China is that Chinese industrial policies make it difficult for US companies to do business there. Credit subsidies keep state companies afloat and allow them to overproduce. Intellectual property rules make it easier for copyrights and patents to be overridden and new technologies to be copied by competitors. Technology-transfer requirements force foreign investors into joint ventures with domestic firms. Restrictive regulations prevent US financial firms from serving Chinese customers. President Donald Trump is apparently ready to carry out his threat of slapping additional punitive tariffs on $200 billion of Chinese exports if China does not yield to US demands in these areas.

For its part, China has little patience for arguments that its exports have been responsible for significant whiplash in US labor markets or that some of its firms are stealing technological secrets. It would like the US to remain open to Chinese exports and investment. Yet China's own opening to world trade was carefully managed and sequenced, to avoid adverse impacts on employment and technological progress.


Peaceful coexistence would require that US and China allow each other greater policy space, with international economic integration yielding priority to domestic economic and social objectives in both countries (as well as in others). China would have a free hand to conduct its industrial policies and financial regulations, in order to build a market economy with distinctive Chinese characteristics. The US would be free to protect its labor markets from social dumping and to exercise greater oversight over Chinese investments that threaten technological or national security objectives.

The objection that such an approach would open the floodgates of protectionism, bringing world trade to a halt, is based on a misunderstanding of what drives open trade policies. As the principle of comparative advantage indicates, countries trade because it is in their own interest. When they undertake policies that restrict trade, it is either because they reap compensating benefits elsewhere or because of domestic political failures (for example, an inability to compensate the losers).

In the first instance, freer trade is not warranted because it would leave society worse off. In the second case, freer trade may be warranted, but only to the extent that the political failure is addressed (and compensation is provided). International agreements and trade partners cannot reliably discriminate between these two cases. And even if they could, it is not clear they can provide the adequate remedy (enable compensation, to continue the example) or avoid additional political problems (capture by other special interests such as big banks or multinational firms).

Consider China in this light. Many analysts believe that China's industrial policies have played a key role in its transformation into an economic powerhouse. If so, it would be neither in China's interests, nor in the interest of the world economy, to curb such practices. Alternatively, it could be that these policies are economically harmful on balance, as others have argued. Even in that case, however, the bulk of the costs are borne by the Chinese themselves. Either way, it makes little sense to empower trade negotiators – and the special interests lurking behind them – to resolve fundamental questions of economic policy on which there is little agreement even among economists.

Those who worry about the slippery slope of protectionism should take heart from the experience under the General Agreement on Tariffs and Trade prior to the establishment of the World Trade Organization. Under the GATT regime, countries had much greater freedom to pursue their own economic strategies. Trade rules were both weaker and less encompassing. Yet world trade expanded (relative to global output) at a more rapid clip in the three and a half decades after World War II than it has under the post-1990 hyper-globalist regime. Similarly, one can make a convincing case that, thanks to its unorthodox growth policies, China today is a larger market for foreign exporters and investors than if it had stuck to WTO-compliant policies.

Finally, some may say that these considerations are irrelevant, because China has acceded to the WTO and must play by its rules. But China's entry into the WTO was predicated on the idea that it had become a Western-style market economy, or would become one soon. This has not happened, and there is no good reason to expect that it will (or should). A mistake cannot be fixed by compounding it. A global trade regime that cannot accommodate the world's largest trading economy – China – is a regime in urgent need of repair.

DANI RODRIK

Writing for PS since 1998 
156 Commentaries

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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EPI: Restraining the power of the rich with a 10 percent surtax on top 0.1 percent incomes [feedly]

A good idea and analysis, BUT, a clearer idea of the power base that can impose and collect such a surcharge tax would help bring it, and a lot of other tax the rich ideas, down to the ground.

Restraining the power of the rich with a 10 percent surtax on top 0.1 percent incomes
https://www.epi.org/blog/restraining-the-power-of-the-rich-with-a-10-percent-surtax-on-top-0-1-percent-incomes/

Excessive wealth and power commanded by a small group of multi-millionaires and billionaires—the richest one-tenth of 1 percent—poses an existential threat to America's economic vitality, democracy, and civil society.

It's well-known by now that the richest 1 percent of American households have essentially doubled the share of national income they claim since the late 1970s. Less well-known is that inequality has even risen within the top 1 percent, with the top 10 percent of that overall group—or the top 0.1 percent—accounting for half of all income within the top 1 percent.1

The political clout of this top 0.1 percent is likely even more outsized then their share of overall income. This group's incomes overwhelmingly stem from owning financial assets, not working in labor markets.2 This means that they benefit from the preferential tax treatment given to income from wealth relative to income from work. The Trump tax cut at the end of 2017 was tailor-made for the top 0.1 percent, as its largest cuts accrue to business owners, both corporate and non-corporate.3

Countering the power wielded by the top 0.1 percent will require ambitious policy changes across a range of issues. Steeply progressive taxes have recently been proposed by a number of policymakers and economists as key ingredients in the overall policy portfolio meant to restrain the power of the super-rich. One idea that has not yet gotten the attention it deserves in this discussion is a surtax on the incomes of the top 0.1 percent. A surtax has a number of advantages as a tool for checking the power of the rich. First, it's laser-targeted on their incomes, phasing in only at the threshold of the top 0.1 percent. Second, it does not provide preferential treatment for wealth-based incomes relative to work-based incomes—it applies to every dollar of any kind over the income threshold. Third, this neutrality across types of incomes means that in the long run it would be hard to avoid or evade.

Proposal: A 10 percent surtax on the top 0.1 percent

We propose a 10 percent surtax on all income over the top 0.1 percent threshold. For simplicity, the income threshold should be defined by a taxpayer's adjusted gross income (AGI). The threshold for the tax should be determined by the IRS to have only the top 0.1 percent affected in the first year, then it should be indexed by overall inflation. In the last year of IRS dataavailable (2016), this top 0.1 percent threshold was $2.3 million. The surtax would apply to all income above AGI, including dividends and realized capital gains.

How much revenue might a 10 percent surtax on the top 0.1 percent raise?

Our preliminary estimate is that such a surtax would raise roughly $75 billion in its first year of implementation and roughly $800 billion in its first decade. The methodology for this estimate is fairly straightforward. First, we estimate how much total AGI is recorded by the top 0.1 percent.4 In 2019, we estimate that as roughly $1.17 trillion. Second, we estimate how much of the income of the top 0.1 percent of households would be exempt from the surtax by falling under the threshold, which is simply the number of tax filers in the top 0.1 percent multiplied by the tax's threshold. With roughly 150,000 filers in the top 0.1 percent estimated for 2019, this implies that about $450 billion exempt from the tax, making the overall base roughly $720 billion. Third, we multiply this base by 10 percent to get $72 billion raised in its first year. In later years, we let the number of tax filers and their AGI rise at rates that have characterized the past ten years and making similar calculations for each of those years. Over the next decade this implies revenue of roughly $800 billion.

$75 billion is a lot of money, even in the context of the federal budget. $75 billion is, for example, the cost of providing universal high-quality pre-kindergarten for all 3 and 4 year olds in the United States, plus providing substantial aid for paying for high-quality childcare for all 0-2 year olds. This sort of ambitious investment in America's children would provide huge benefits to American society and economic efficiency, and is just one example of how the income currently claimed by the very rich could be put to better use.5

 

1. Data on top 1 and top 0.1 percent income shares can be found in the online data on distributional national accounts maintained by Gabriel Zucman, based on work done by Zucman and co-authors Thomas Piketty and Emmanuel Saez.

2. The Piketty, Saez and Zucman (PSZ) data referenced in the footnote above indicates that non-labor income accounts for more than two-thirds of the income of the top 0.1 percent.

3. The single most-expensive component of the Trump tax cut of 2017 was the cut in corporate tax rates, which can account by itself for the entire net cost of the tax cut. Among its other provisions was a deduction for "pass-through" incomes—a form of income quite concentrated in the upper reaches of the income distribution. The PSZ data, for example, estimates that the top 0.1 percent claim almost 19 percent of all income generated by non-corporate businesses that is not paid to employees.

4. For estimated top 0.1 percent thresholds in 2019, see this table from the Tax Policy Center.

5. For an overview of the broad benefits stemming from this sort of ambitious investment in early childcare and education, see Bivens, Garcia, Gould, Weiss, and Wilson (2016).

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Tim Taylor: Building Worker Skills in a Time of Rapid Technological Change [feedly]

Building Worker Skills in a Time of Rapid Technological Change
http://conversableeconomist.blogspot.com/2019/04/building-worker-skills-in-time-of-rapid.html

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I'm congenitally suspicious of "this time is different" arguments, which often seem very quick to toss out historical experience for the sake of a lively narrative. So when I find myself in discussions of  whether the present wave of technological change is unprecedented or unique, I often end up making the argument that while the new technologies are obviously different in their specifics from older technologies, the fact of technology leading to very dramatic disruptions of labor markets is not at all new. To me, the more interesting questions are question how the economy, government, and society react to that ongoing pattern of technological change.

Conor  McKay, Ethan Pollack, and Alastair Fitzpayne offer a useful broad overview of these issues in "Automation and a Changing Economy," a two-part report written for the Aspen Institute Future of Work Initiative (April 2019).The first volume focuses on the theme "A Case for Action," with background on how technological change and automation has affected labor markets over time, while the second volume is "Polices for Shared Prosperity," with a list of policy options.

It may turn out to be true that the current wave of technological innovation is uniquely different in some ways. (It's very hard to disprove that something might happen!)  But it's worth taking a moment to acknowledge that technologies of the past severely disrupted the US labor market, too. For example, here's a figure showing shifts in the pattern of US jobs over time: the dramatic rise in white-collar jobs, with falls in other areas.

And of course if one goes beyond broad skill categories and looks in more detail at jobs, the necessary skill mix has been changing quite substantially as well. Remember that in the 1970s, word-processing was mostly on typewriters; in the 1980s, written communications involves mail, photocopying, and sometimes fax machines; in the 1990s, no one carried a smartphone. It's not just changes in information technologies and the web, either. Workers across manufacturing and services jobs have had to learn how to use new generations of  physical equipment as well.

Of course, we can noodle back and forth over how new technologies might have bigger effects on labor markets. The report has some discussion of these issues, and dinner parties for economists have been built on less. But the lesson I'd take away, to quote from the report, is: "Automation need not be any more disruptive in the future than it has been in the past to warrant increased policy intervention."

One key issue in navigating technological change is how workers can obtain the skills that employers want. And here a problem emerges, which is that although employers were a primary source of such training in the past, they have backed away from this role. The report notes (footnotes omitted):

Employers traditionally have been the largest source of funding for workforce training, but businesses are training fewer workers than in the past. From 1996 to 2008, the percentage of workers receiving employer-sponsored or on-the-job training fell 42 percent and 36 percent, respectively. This decline was widespread across industries, occupations, and demographic groups. ...  More recent data on employer-provided training has been mixed. Data from the Society for Human Resource Management suggests that employer-provided tuition assistance has been falling in recent years, from 66 percent of surveyed businesses offering tuition assistance benefits in 2008 down to 53 percent in 2017. Meanwhile, data from the Association for Training & Development suggests that employer training investments have been roughly flat over the last decade. ...

[A]s unions have lost power and membership, ... businesses have had a freer hand to hire already trained external candidates, often leading to fewer within-firm career pathways and  higher turnover. ...

Public sector investment has declined, too. For example, WIOA Title I state grants, which fund the core of the federal workforce development system, have been cut by over 40 percent since 2001. The program is currently underfunded by $367 million relative to its authorized levels. Government spending on training and other programs  to help workers navigate job transitions is now just 0.1 percent of GDP, lower than all other OECD countries except for Mexico and Chile, and less than half of what it was 30 years ago.

Why have employers backed away from providing training? The report notes:

Without intervention, business investment in workers may continue to decline. In a recent Accenture survey of 1,200 CEOs and other top executives, 74 percent said that  they plan to use artificial intelligence to automate tasks in their workplace over the next three years. Yet only three percent reported planning to significantly increase investments in training over the same time period.

In part, the decline in employer-provided training can be explained by changes in the employer-employee relationship over the past forty years. ... If businesses plan to retain employees over a long period, they will benefit more directly from their training investments. But as relationships between workers and businesses become less stable and short-term, businesses have a difficult time capturing the return on their training investments. The result is less investment in training even as the workforce requires greater access to skills training.

Recent legislation could accelerate this trend. Businesses often have to choose between using workers or machines to accomplish a task. The 2017 Tax Cuts and Jobs Act allows businesses to immediately expense the full cost of equipment purchases—including automation technology—rather than deduct the cost of the equipment over a period of time. By reducing the after-tax cost of investing in physical capital but not providing a similar benefit for investments in human capital, the legislation may further shift business priorities away from worker training.

There are a number of ways one might seek to rebuild connections between employers and job training. The report suggests an employer tax break for spending money on employee training, similar to the tax break now given for investing in research and development. A complementary approach would be to build through a dramatic expansion of the community college system, which has the advantage that it can train workers for an multiple-employer industry that is locally prominent. Yet another approach is a considerable expansion of apprenticeships. Yet another approach would be much greater support for "active labor market policies," that assist workers with job search and training. 

A lot of the concern over adapting to technological change, and whether the economy is providing "good jobs" or devolving toward alternative "gig jobs,"seems to me rooted in concerns about the kind of attachment that exists between workers and employers.  It relates to the extent that workers feel engaged with their jobs, and to whether the worker and employer both have a plausible expectation that the job relationship is likely to persist for a time--allowing both of them to invest in acquiring skills with the possibility (or likelihood?) of a lasting connection in mind. 

Ultimately, it will matter whether employers view their employees as imperfect robots, always on the verge of being  replaced when the better robots eventually arrive, of whether they view their employees as worthy of investment in themselves. It's the difference between automation replacing workers, or complementing them. 

Paul Krugman: Purity vs. Pragmatism, Environment vs. Health [feedly]

I think PK makes a critically important point, again, in his critique of the POLITICS of Medicare For All. But I think he ends up in a position with a BIGGER political weakness than what he is criticizing. The critical point is, according to Gallup, that the 180 million persons with privately insured health care are 69% happy with their coverage, and over 80% happy with their actual health care. This becomes a potentially powerful constituency against Medicare For All once they are "informed" they will lose this coverage and be enrolled in a new massive federal program. And, of course, this would add considerable fuel to the already opposed interests of the insurance industry itself, and probably their employees too.  IF, Medicare For All candidates PROMISE that both coverage and/or health care will IMPROVE that would neutralize PART of that constituency. Labor would be the FIRST test group on how persuasive that argument is.

Implied in PKs argument is a plea for a mixed public private system to avert abrupt nationalization of a very large reservoir of capital so deeply embedded in the lives and institutions (not just corps) of the country. I think this comes under the category of Too Much Socialism for PK.

The problem with this argument, given the war waged by insurance and the rest of finance capital against Obamacare, is that there is no indication that the insurance industry has the slightest interest in bargaining over ANY of the reforms, including PKs preferred ones. Not only do they not want single payer, they also do not want half single payer, a condition which, from a biz point of view, is half-dead and dying. They smothered all mention of the public option in Obama's original proposals and collaborated with the endless Republican REPEAL votes. This makes the argument that there is no deal to be made with THIS country's insurance industry that gets to universal affordable coverage very powerful. Obviously, whoever is elected President is the lead negotiator general (if he/she has the troops). Having a socialist lead the negotiations could end up with the "public option" being the biggest, whatever form the process must actually take. Sanders is a good negotiator -- and capitalism did not collapse in Vermont under his leadership. 

Purity vs. Pragmatism, Environment vs. Health
https://www.nytimes.com/2019/04/11/opinion/green-new-deal-medicare-for-all.html

Paul Krugman

Right now there are two big progressive ideas out there: the Green New Deal on climate change and "Medicare for all" on health reform. Both would move U.S. policy significantly to the left. Each is sponsored by a self-proclaimed socialist: the Green New Deal by Alexandria Ocasio-Cortez and Medicare for all by Bernie Sanders. (Of course, neither of them is a socialist in the traditional sense.) Both ideas horrify not just conservatives but also many self-proclaimed centrists.

Yet while they may seem similar if you think of everything as left versus right, they're very different on another dimension, which you might call purity versus pragmatism. And that difference is why I believe progressives should enthusiastically embrace the G.N.D. while being much more cautious about M4A.

You see, for all its sweeping ambition, the Green New Deal is arguably an exercise in pragmatism — in the proposition that the perfect is the enemy of the good.

What's the perfect in this case? Climate-policy purists are focused on the notion of a carbon tax to discourage greenhouse gas emissions, and they look down on any proposal that doesn't put such a tax front and center.

What's wrong with a carbon tax as the centerpiece of climate policy? There are some narrow economic arguments for a broader range of public policies — for example, government support can be crucial for the development of new energy technologies.

Even more important, however, is the political economy. A carbon tax would hurt significant groups of people — and not just fossil-fuel billionaires like the Koch brothers. As a result, a carbon tax on its own is the kind of eat-your-spinach policy that technocrats love but many ordinary citizens hate, as illustrated by what just happened in France, where a planned fuel tax increase was withdrawn in the face of furious "Yellow Vest" protests.

So how do you make climate action politically feasible? The G.N.D. answer is to bundle measures to reduce emissions with a lot of other stuff people want, like big public investment even in areas with only weak direct relationships to climate change.

You could call the G.N.D. a proposal for economic transformation that includes climate action. But you could also call it a "Christmas tree," the traditional term for legislation festooned with lots of riders unrelated to the ostensible purpose in order to win political support.

The point is that climate action probably won't happen unless it's a Christmas tree — and the G.N.D.'s advocates are O.K. with that. In that sense, they're pragmatists despite their big ambitions.


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Medicare for all, by contrast, is an exercise in the proposition that we must not settle for anything less than the ideal.

Indeed, Sanders has explicitly refused to support Nancy Pelosi's proposal to enhance Obamacare, even though her proposal would expand health insurance coverage to millions of Americans and make it more affordable for millions more. His reasoning seems to be that making things better, even as an interim step, would undermine support for a more radical transformation.
Bernie Sanders on Wednesday introducing the Medicare for All Act.CreditManuel Balce Ceneta/Associated Press

To be fair, the simplicity of the pure single-payer, government insurance system Sanders advocates would have some advantages over the hybrid public-private systems that have been proposed by other progressives — for example, letting people keep private insurance if they want, but offering the option of Medicare buy-in.

You might say that single-payer is the system technocrats would choose if they had a free hand, with few political constraints. In fact, that's pretty much what happened in Taiwan, which asked a panel of experts to design its health care system, and ended up with single-payer.

On the other hand, international experience shows that universal coverage and high quality health care can be achieved in a variety of ways; technocrats may prefer single-payer, but it's not essential.

And the political obstacles to a Sanders-type plan are formidable. Almost 180 million Americans are covered by private health insurance, and many of them are satisfied with their coverage. Polling suggests that while the public reacts favorably to the slogan "Medicare for all," that support drops precipitously when people are informed that it would eliminate private insurance and require substantial tax increases.


A

The Sanders view, however, is that a sufficiently determined leader can overcome these doubts and persuade many voters who are currently doing O.K. that radical change is nonetheless in their interests. I don't know of anything in recent history to justify this belief, but there it is.

My guess is that if Sanders does make it to the White House, he'll quickly find that he can't deliver on his grand vision, and will eventually try for a less purist alternative. And let's be clear: A lot more Americans will have affordable health care if any Democrat is elected than they will if Donald Trump retains the White House.

Still, it's important to realize that among Democrats, purity versus pragmatism is as important an axis as left versus right. And the two big progressive ideas are on opposite ends of that axis.

Paul Krugman has been an Opinion columnist since 2000 and is also a Distinguished Professor at the City University of New York Graduate Center. He won the 2008 Nobel Memorial Prize in Economic Sciences for his work on international trade and economic geography. @PaulKrugman

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Baker: Why is Populism on the Rise and What do Populists Want? [feedly]

Progressives, liberals, even some conservatives, myself included, and including economists in each label, will agree with Baker's somewhat simplistic formulation. But all will, or should, feel a at least a twinge of a problem, an omission, a sense, that the "business leaders and elites" may be correct, in asserting that the fundamental direction of inequality trends are objective, systematic, an unchangeable tendency of globalization and technology. The omission is: this is the same as saying "there is a problem with the capitalist system". As other leading progressive economists have also been saying -- Piketty, Rodrik, DeLong, et al -- capitalism must by systematically reformed, and the solutions must be both national specific and global. All three folks named above are social democrats of various stripes. They are NOT advocating overthrowing capitalism, but they ARE now saying fundamental, structural reforms are required to stabilize tendencies that warn of unendurable catastrophes.

Why is Populism on the Rise and What do Populists Want?
http://cepr.net/publications/op-eds-columns/why-is-populism-on-the-rise-and-what-do-populists-want

Why is Populism on the Rise and What do Populists Want?

1 Comment

Dean Baker
The International Economy, Winter 2019

See article on original site

In the United States, the pay of a typical worker has badly trailed productivity growth over the last four decades, allowing only marginal improvements in living standards over this period. At the same time, a small number of people have gotten incredibly rich in the finance and tech sectors and by being top executives in major U.S. corporations. There is a similar, if somewhat less stark, picture in most other wealthy countries.

The standard story for this rise in inequality is that this is just the inevitable course of globalization and technology. While many in the elite may feel bad for those left behind, and even propose policies to help them, the line is that the rise in inequality is something that happened, not the result of conscious policy.

That is a lie. And the persistence of this lie is one of the reasons that populist politics has so much resonance in Europe and the United States.

There was nothing inevitable about who would be winners from technology and globalization. Those who won have been successful because they wrote the rules and run the institutions. It is that simple.

Starting with technology, the fact that people like Bill Gates can get incredibly rich is not only due to the fact that they may be smart and hardworking. People like Bill Gates can get incredibly rich because we have patent and copyright laws that give them monopolies over items like Windows. Without these government-granted monopolies, there would be far less money in software, pharmaceuticals, medical equipment, and many other important sectors of the economy.

Patent and copyright monopolies are explicitly policy levers to provide incentives for innovation and creative work. We can make them shorter and weaker if we choose, as opposed to longer and stronger, which has been the pattern over the last four decades. Pretending that the money going to the winners from these monopolies is natural is an absurdity that deserves nothing but ridicule. Instead, this is the accepted wisdom in intellectual circles.

The comparable wisdom about globalization is that manufacturing workers in rich countries lose because hundreds of millions of people can do the same work in the developing world for a fraction of the pay.

This is true, but it is also true that there are tens of millions smart and hardworking people in the developing world who would be prepared to work as doctors, dentists, and in other highly paid professions in the rich countries at a fraction of the pay of the people now in those positions. We structured our trade policy so manufacturing workers have to compete with workers in the developing world and doctors and dentists mostly do not.

We have structured our financial system to allow a small number of people to get tremendously rich at the expense of the economy as a whole. This was demonstrated most clearly in the wake of the collapse of the housing bubble when political elites raced to save the big banks from the consequences of their own actions, but there are many ways in which the rules have been structured to support a bloated financial sector.

And we have had macroeconomic policy that has needlessly kept millions of people from having jobs. It has also reduced the bargaining power of tens of millions who do have jobs. It is not surprising that policies designed to redistribute income upward would lead to resentment, especially when our elites pretend they do not exist. Until these policies are acknowledged and changed, populist anger is not likely to go away.

 -- via my feedly newsfeed

Dean Baker: Medicare for 64 Year Olds Is a Step Toward Medicare for All [feedly]

The always clever Dean Baker with a "teachable moment" proposal....

Medicare for 64 Year Olds Is a Step Toward Medicare for All
http://cepr.net/publications/op-eds-columns/medicare-for-64-year-olds-is-a-step-toward-medicare-for-all

Dean Baker
Truthout, April 8, 2019

See article on original site

There is a renewed push for making a Medicare-type government program universal so that a public health care insurance system covers everyone in the country. This effort gained enormous momentum from Senator Bernie Sanders's 2016 campaign for the Democratic nomination, as well as from the continuing Republican attacks on Obamacare. A bill put forward by Washington Representative Pramila Jayapal, outlining a Medicare for All (M4A) plan, now has 107 co-sponsors — nearly half of the Democratic caucus in the House.

While this is great progress toward the goal of a universal Medicare-type plan, it still has a long way to go. For example, the supporters of Jayapal's bill could not agree on a financing mechanism, so the bill has a menu of options rather an actual financing proposal.

There is also serious pushback from other members of the Democratic caucus. Some of it undoubtedly reflects realistic political concerns that a quick switchover from the current system to M4A will not be popular in many districts.

Many people are satisfied with the insurance they have now and may be reluctant to support what they view as a big leap into the unknown. Perhaps these people can be convinced over time that a universal Medicare-type system will be at least as good for them, but they are not there now.

However, some of the pushback stems from the fact that many Democrats have long depended on campaign contributions from the health care industry. While the party has not gotten as much money as the Republicans, many members do get substantial contributions, which they are not prepared to abandon. Medicare for all 64 year olds is designed to call attention to these politicians.

If we accept that we are not likely to get to a universal Medicare system in a single step, the next question is: how can we find a way to phase in the system in a way that both minimizes disruptions and provides real benefits? Many have proposed lowering the age of Medicare eligibility from the current 65 to age 50 or 60. The idea is that we would bring in a large proportion of the pre-Medicare age population, and then gradually go further down the age ladder. (We can also start at the bottom and move up.)

This sort of age reduction approach is a reasonable incremental path, but going to age 50 or even age 60 would still be a considerable expense. There are over 60 million people in the age cohorts from 50 to 64. Including all these people in Medicare at a single step would be a very serious lift. Even the more narrow group from age 60 to 64 still has almost 20 million people. That would be a substantial expense.

However, we can make the first step even more gradual. We can just add people when they turn age 64 instead of the current 65. At first glance, this would be a bit less than 4 million people. Medicare's payments per enrollee (net of premiums) are roughly $11,500. That would translate into $46 billion annually, roughly 1.0 percent of the total budget.

This estimate is very conservative and likely overstates the actual cost for two reasons: First, many 64-year–olds will already have their insurance covered by the government. Roughly 20 percent of this age group is on Medicare as a result of being on Social Security disability. At least 10 percent more is covered by Medicaid. If we add people who are getting insurance as current or former government employees, we would almost certainly get over 40 percent already being insured through some government program, and possibly as high as 50 percent.

In addition, the Medicare costs for 64 year olds are likely to be far less than the overall average. On average people in this age group would have health care costs of around 70 percent of the over–65 population as a whole. But the least healthy portion of the 64-year-old population is likely already covered by either Medicare, as a result of disability, or Medicaid.

If we assume that the average costs for the people we are adding to the government's tab are half of the overall average for Medicare, this gets us $5,750 per person. If we assume that we are adding 60 percent of this age group, that comes to 2.4 million people. That gives us a total tab of $13.8 billion, less than 0.3 percent of total spending or one week of the military budget. It would be pretty hard to argue that this is too expensive.

Making this one–year reduction in the Medicare age would show how easily this can be done. It should open the door to further reductions in future years. It is also likely to be popular politically. People in their late 50s and early 60s will surely appreciate the fact that they are one year closer to qualifying for Medicare.

Of course, this is not the only thing that we should be doing as part of near-term health care reform. We should look to open Medicare to the population as a whole on a voluntary basis. We should also look to make the subsidies under the Affordable Care Act more generous. And, we should be looking to bring our payments for drugs, medical equipment and doctors more in line with payments in other wealthy countries.

However, lowering the Medicare age to 64 is a big first step. It is also a great test of which Democrats are opposed to Medicare for All because they fear the political consequences and which Democrats work for the health care industry.

 -- via my feedly newsfeed