....and Trump too??

'

Austerity caused Brexit

Thiemo Fetzer 08 April 2019

A rich literature has emerged aiming to make sense of the causes behind the Brexit vote, but it has mainly been descriptive. This column uses regional-level data on spending and voting behaviour, as well as individual-level survey data, to argue that the austerity policies in place in the UK since 2010 were an important contributing factor to the vote to Leave.  Estimates suggest that the close-run referendum could have resulted in a victory for Remain had it not been for austerity.

Since the EU referendum in the UK, a rich but mainly descriptive literature has emerged aiming to make sense of the causes behind the Brexit vote (e.g. Miles 2016, Becker et al. 2016, O'Rourke 2016, Tomlinson 2017). Given the political meltdown in the UK, this is more imperative than ever.  An important cross-cutting observation is that Leave-voting areas have been 'left behind' and that the local populations are particularly reliant on the welfare state.  In a recent new paper (Fetzer 2018), I bring together broad and comprehensive evidence which suggests that austerity policies since 2010 are an important factor that contributed to the build-up of anti-establishment sentiment and helped shift the scales in the referendum in favour of Leave. 

Austerity in the UK since 2010

The austerity-induced reforms of the welfare state initiated by the Conservative-led coalition government since 2010 were extensive. Aggregate real government spending on welfare and social protection decreased by around 16% per capita. Spending on healthcare, being spared direct cuts, flatlined, but the ageing population profile of the population increased demand for the health care services. Further, spending on education contracted by 19% in real terms while expenses for pensions steadily increased, suggesting a significant shift in the composition of government spending.

Figure 1 Overall public sector spending in GBP per capita (real)

Source: Data are from HMRC and ONS. 

Austerity and voting behaviour: District-level estimates

At the district level, the level at which most welfare programmes are administered, spending per person fell by 23.4% in real terms between 2010 and 2015. The fall in spending varied dramatically across districts, ranging from 46.3% to 6.2%, with the sharpest cuts in the poorest areas (Innes and Tetlow 2015).

In 2013, it was estimated that many of the measures included in the Welfare Reform Act of 2012 would cost every working-age Briton, on average, around £440 per year (Beatty and Fothergill 2013).  The impact of the cuts was far from uniform across the UK, as is visualised in Figure 2 – it varied from £914 in Blackpool to just above £177 in the City of London. The overarching observation was that the most deprived areas were most severely affected by the cuts, as they had the highest numbers of people receiving benefits to begin with.

Figure 2 Distribution of the austerity shock

Note: The measure is expressed in financial losses per working-age adult per year, as simulated by Beatty and Fothergill (2013) and used in Fetzer (2018).

Using difference-in-difference at the district level, it can be shown that austerity had sizable and timely effects, increasing support for UKIP across local, national and European elections. The estimates suggest that the tight referendum could have resulted in a Remain victory had it not been for austerity. UKIP vote shares increased by between 3.5 to 11.9 percentage points due to austerity, and given the tight link between UKIP vote shares and an area's support for Leave, simple back-of-the-envelope calculations suggest that Leave support in 2016 could have been easily at least 6 percentage points lower.  

The response to austerity: Individual-level evidence

While working with aggregate data is appealing, it also comes with some caveats, as the estimated effects could be masking a host of other mechanisms. However, the political effects of austerity are also detectable when turning to individual-level data from the Understanding Society Study and the British Household Panel Study. In particular, individuals who were exposed to welfare reforms increasingly shifted to UKIP once they had experienced the benefit cut. Further, dissatisfaction with political institutions as a whole increased – they were more likely to perceive "that public officials do not care", that they are "not having a say in what the government does" and that their vote is "unlikely to make a difference". Each of these factors in turn, are tightly linked to Leave sentiment. These can be studied since the most recent USOC survey wave also includes the EU referendum question.

One example of a reform I study in the paper is the 'bedroom tax' – officially termed the under-occupancy penalty. This reform implied reductions to housing benefits for households living in social housing that are judged to live in accommodation that is too large relative to their needs if they have a 'spare' bedroom. The results suggest that households exposed to the bedroom tax increasingly shifted towards supporting UKIP, experienced economic grievances as they fell behind with their rent payments due to the cut to housing benefits, or, in some cases, avoided the benefit cut by moving to less spacious housing.

Broader context

By curtailing the welfare state, austerity has likely activated a broad range of existing economic grievances that developed over a long time. It is not only the UK where economic distress has been linked to increasing support for right-wing political platforms (e.g. Arzheimer 2009, Dehdari 2018). Identifying and quantifying the relative contributions of the factors behind the underlying economic grievances, especially among the low-skilled, is an active field of research. 

For example, Colantone and Stanig (2018) suggest that, by intensifying competition, trade integration with low-income countries has hurt manufacturing goods-producing areas in the UK, which is why voters in these areas were more likely to vote Leave. Similar evidence linking economic hardship due to trade-integration to populist or extreme voting has been documented in the context of the US (Autor et al. 2016) and Germany (Dippel et al. 2017). 

Similarly, evidence is accumulating that some forms of immigration do have small, but detectable, effects on labour markets by curtailing wage growth at the bottom end of the wage distribution (for evidence from the UK, see Becker and Fetzer 2018 and Dustmann et al. 2013; for the US see Ottaviano and Peri 2006). 

Similarly, there is some evidence suggesting that automation, by reducing demand for low-skilled workers, can also suppress wage growth among the low-skilled (Graetz and Michaels 2018). In the historical context, this type of (manual) labour-saving technological progress has been linked to political unrest (Caprettini and Voth 2017). The rise of the gig economy, zero-hours contracts, and so on may also push people to become reliant on the welfare state to top up their salaries. Each of these factors is likely to exacerbate the economic cleavages between the well-educated and those with low human capital – a phenomena which has been referred to as the 'growing skill bias' in labour markets (Acemoglu 1998, Autor et al. 2003).

The natural implication is well-known to economists – trade integration, or globalisation more broadly, and the welfare state are complements. In order to maintain continued public support for globalisation, for example, policy needs to deliver solutions for the losers from globalisation. This could take the form of continued investment in education and training, and designing a welfare system that can help individuals transition into new jobs.   

References

Arzheimer, K (2009), "Contextual Factors and the Extreme Right Vote in Western Europe, 1980–2002", American Journal of Political Science 53(2).

Autor, D H, F Levy and R J Murnane (2003), "The Skill Content of Recent Technological Change: An Empirical Exploration", The Quarterly Journal of Economics 118(4): 1279–1333.

Autor, D H, D Dorn, G Hanson and K Majlesi (2016), "Importing Political Polarization? The Electoral Consequences of Rising Trade Exposure", NBER Working Paper No. 22637.

Beatty, C and S Fothergill (2013), "Hitting the poorest places hardest: The local and regional impact of welfare reform", Centre for Regional Economic and Social Research, Sheffield Hallam University.

Becker, S O and T Fetzer (2018), "Has Eastern European Migration Impacted UK-born Workers?", Cage Working Paper No. 376.

Becker, S O, T Fetzer and D Novy (2016), "The fundamental factors behind the Brexit vote", VoxEU.org, 31 October.

Caprettini, B and J Voth (2017), "Rage against the machines: Labor-saving technology and unrest in England, 1830-32", CEPR Discussion Paper 11800.

Colantone, I and P Stanig (2018), "Global Competition and Brexit", American Political Science Review 112(2): 201-218.

Dehdari, S H (2018), "Economic Distress and Support for Far-Right Parties - Evidence from Sweden".

Dippel, C, R Gold, S Heblich and R Pinto (2017), "A new approach to identifying causal mechanisms: With an application to the effect of trade on labour markets and politics", VoxEU.org, 12 April.

Dustmann, C, T Frattini and I P Preston (2013), "The Effect of Immigration along the Distribution of Wages", The Review of Economic Studies 80(1): 145–173.

Fetzer, T (2018), "Did austerity cause Brexit?", CAGE Working Paper 381.

Graetz, G and G Michaels (2018), "Robots at Work".

Innes, D and G Tetlow (2015), "Delivering Fiscal Squeeze by Cutting Local Government Spending", Fiscal Studies 36(3): 303–325

Miles, D (2016), "Brexit realism: What economists know about costs and voter motives", VoxEU.org, 3 August.

O'Rourke, K (2016), "Brexit: This backlash has been a long time coming", VoxEU.org, 7 August.

Ottaviano, G I P and G Peri (2006), "Rethinking the Effects of Immigration on Wages", NBER Working Paper No. 12497.

Tomlinson, J (2017), "Brexit, globalisation, and de-industrialisation", VoxEU.org, 21 April.

--

John Case
Harpers Ferry, WV

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Krugman: Why Does Trump Want to Debase the Fed? [feedly]

Why Does Trump Want to Debase the Fed?
https://www.nytimes.com/2019/04/08/opinion/fed-herman-cain-stephen-moore.html

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Why Does Trump Want to Debase the Fed?

The tax cut fizzled; send in the clowns!

Paul Krugman

As far as I know, the Federal Reserve — the world's most important economic policy institution — doesn't have an anthem. But if it were to adopt one now, the choice would be obvious: "Send In the Clowns."

You see, the Fed's governing board currently has two vacancies, and Donald Trump has proposed filling those vacancies with ludicrous hacks. If he succeeds, one of our few remaining havens of serious, nonpartisan policymaking will be on its way toward becoming as corrupt and dysfunctional as the rest of the Trump administration.

Stephen Moore and Herman Cain are, of course, completely unqualified — I say "of course" because their lack of qualifications is, paradoxically, a key qualification not just for Trump but for the G.O.P. in general.

There are plenty of genuine monetary experts with conservative political leanings, some of them quite partisan. But modern Republicans have shown consistent disdain for such experts, perhaps because of a sense that anyone with real expertise or an independent reputation might occasionally be tempted to take a stand on principle.

There's no risk that either Moore or Cain will ever take such a stand. In fact, what seems to have recommended both men to Trump was their evident willingness to completely reverse their policy views when politically expedient.

Both were hard-money men during the Obama years, demanding higher interest rates despite very high unemployment. Both have now taken to berating the Fed for failing to print more money in the face of low unemployment — because that's what Trump wants.

That said, there's a difference between the two men.

I wrote about Moore a couple of weeks ago, noting that he has long been a prominent fixture in the conservative movement; he is, basically, a classic right-wing hack who tries (incompetently) to impersonate an economic expert. Cain, on the other hand, is a spam king whose business model involves making his email list available to direct marketers.

Put it this way: In recent years Moore has been out there predicting magical results from tax cuts, putting out fake economic numbers, and giving speeches to FreedomFest. At the same time, Cain has been offering a platform for peddlers of get-rich schemes and cures for erectile dysfunction. So it says something about what Trump wants that he apparently sees the two men as equally valuable allies.

What does Trump want? His attempted beclowning of the Fed follows, I'd argue, from the fact that his one major legislative success, the 2017 tax cut — which he predicted would be "rocket fuel" for the economy — has turned out to be a big fizzle, economically and, especially, politically.


It's true that U.S. economic growth got a bump for two quarters last year, and Trumpists are still pretending to believe that we'll have great growth for a decade. But at this point last year's growth is looking like a brief and rapidly fading sugar high.

Meanwhile, the tax cut remains unpopular, partly because few people perceived personal benefits, partly because voters appear to be less concerned about paying too much than with the sense that the rich — the prime beneficiaries of the Trump cut — are paying too little.

Some leaders might see such disappointments as reasons to make a course correction. But this is Trump: When the going gets tough, he blames someone else. Everything would have been great, he insists, if the Fed hadn't thwarted his plans.

There's a good argument to be made that the Fed misjudged the economy's strength, that it raised interest rates too fast and that the economy would be doing somewhat better if it hadn't. In fact, it's an argument I agree with.

But that's not what Trump is saying. He wants the Fed to act as if we were still in a deep depression; he wants it both to cut rates and to resume the emergency policies it pursued — and he denounced — when we had more than twice as much unemployment as we do today. This would, he insists, turn the economy into the "rocket ship" he originally promised.

You don't have to be a gold bug or even an inflation hawk to see these demands as deeply irresponsible. Indeed, they sound a lot like the "macroeconomic populism" that has repeatedly led to economic disaster in Latin America, with Venezuela the latest example.

Running the printing presses to fight a depression, as the Fed did after the financial crisis, is prudent and sensible; running them because you refuse to accept the reality that your policies aren't delivering an economic miracle is different, and always ends badly.

Proposals to Couple Medicaid Expansion With Work Requirements: Frequently Asked Questions [feedly]

Proposals to Couple Medicaid Expansion With Work Requirements: Frequently Asked Questions
https://www.cbpp.org/research/health/proposals-to-couple-medicaid-expansion-with-work-requirements-frequently-asked

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Triple Crisis: New Pan-Agency Development Financing Report Suggests Major Economic Crisis Brewing [feedly]

New Pan-Agency Development Financing Report Suggests Major Economic Crisis Brewing
http://triplecrisis.com/new-pan-agency-development-financing-report-suggests-major-economic-crisis-brewing/

By Jesse Griffiths

Cross-posted at ODI.

The 2019 Financing for Sustainable Development report from the Inter-Agency Task Force (IATF) on Financing for Development was launched today.

For those – like me – who worry that the world is sleepwalking into another crisis, it's not reassuring. It confirms that global debt is at record levels and 'financial fragilities' have built up across the globe. It's also disappointingly light on solutions that could reverse these trends.

What is the IATF report?

The IATF is a group of fifty major international institutions that work on finance issues, including various United Nations bodies, the International Monetary Fund, World Bank and World Trade Organization.

This report is its annual stocktake on progress towards meeting commitments to finance the Sustainable Development Goals (SDGs). It's an impressive undertaking, covering all major financing sources, with a mandate to look at the global financial and economic system as a whole.

Three things stood out to me:

1. Debt risks continue to grow

First, both public and private debt continue to grow in all country categories. As the graph shows, emerging economies should be particularly worried about corporate debt, which is close to 100% of GDP. This high level of debt makes these economies highly vulnerable – changes in the internal or external environment could trigger bankruptcies that could lead to a full-blown financial crisis.

Meanwhile, more than a decade after the global crisis, developed countries continue to have record levels of government debt. Clearly public finances in this group would be badly placed to weather any future crisis.

2. The financial sector is on shaky ground

Second, global financial sector risks are very worrying. The graph shows how the financial sector has 'deepened' – grown relative to the size of the economy – in all categories of countries since the turn of century.

This can be a good thing for developing countries, but it depends on the way that the financial sector has developed. The report highlights that developing countries' financial sectors have internationalised, with international banks now making up 40% of their banking sector – a share which has doubled since mid-1990s.

This can bring advantages, but it also makes them more vulnerable to the international financial system, where risks have continued to grow despite reforms taken after the global crash. For example, the report notes that 'th­e global stock of high yield bonds and leveraged loans has doubled in size since the global financial crisis, driven by low borrowing costs, high risk appetite, and looser lending standards.'

Reports like this are prone to understatement. One conclusion it draws is that 'In the current uncertain environment, financial markets are highly susceptible to a sudden shift in investors' perception of market risk, which could result in a sharp and disorderly tightening of global financial conditions.'

In other words, it wouldn't take much to precipitate a crash. Add to this the fact that three quarters of countries are found not to have a financial sector strategy, and it's beginning to look like a warning cry.

3. Solutions are lacking

Third, as might be expected from a report that is essentially a compromise between the differing perspectives of a wide range of institutions, recommendations on what to do to prevent another major crisis hitting the global economy are thin on the ground.

One key area I've highlighted before is what to do about the increasing risk of a widespread public or 'sovereign' debt crisis.

The report devotes a chapter to debt, and does mention some potential solutions. It has a section on the idea of making debt contracts dependent upon the ability of the debtor government to pay – known in the trade as 'state contingent debt instruments.' The idea of reducing the repayment burden when, for example, states face recessions or natural catastrophes is a good one, as a recent ODI report explores.

However, on the central issue of how to rapidly and fairly resolve debt crises that do occur – to prevent the lost years (and often decades) that can result – the report is spectacularly unambitious, saying only that it might be time to revisit this issue.

Perhaps I am expecting too much of a report produced by major international bureaucracies: the internal wrangling over each issue is likely to stymie creative, solution-oriented thinking.

The time is therefore ripe for others to pick up this baton and produce the companion set of solutions to help prevent or resolve the problems highlighted by the report, and ensure that the world can meet the ambition of the SDGs without suffering another major crisis.

Jesse Griffiths is Head of Programme at ODI and a specialist in development finance and the international development finance architecture. He has done work for a range of national governments, international organisations, non–governmental organisations and think–tanks, and has published widely on these topics.

Triple Crisis welcomes your comments. Please share your thoughts below.

Triple Crisis is published by

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NYTimes.com: Donald Trump Is Trying to Kill You

From The New York Times:

Donald Trump Is Trying to Kill You

Trust the pork producers; fear the wind turbines.

https://www.nytimes.com/2019/04/04/opinion/trump-deadly-deregulation.html

There's a lot we don't know about the legacy Donald Trump will leave behind. And it is, of course, hugely important what happens in the 2020 election. But one thing seems sure: Even if he's a one-term president, Trump will have caused, directly or indirectly, the premature deaths of a large number of Americans.

Some of those deaths will come at the hands of right-wing, white nationalist extremists, who are a rapidly growing threat, partly because they feel empowered by a president who calls them "very fine people."

Some will come from failures of governance, like the inadequate response to Hurricane Maria, which surely contributed to the high death toll in Puerto Rico. (Reminder: Puerto Ricans are U.S. citizens.)

Some will come from the administration's continuing efforts to sabotage Obamacare, which have failed to kill health reform but have stalled the decline in the number of uninsured, meaning that many people still aren't getting the health care they need. Of course, if Trump gets his way and eliminates Obamacare altogether, things on this front will get much, much worse.

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But the biggest death toll is likely to come from Trump's agenda of deregulation — or maybe we should call it "deregulation," because his administration is curiously selective about which industries it wants to leave alone.

Consider two recent events that help capture the deadly strangeness of what's going on.

One is the administration's plan for hog plants to take over much of the federal responsibility for food safety inspections. And why not? It's not as if we've seen safety problems arise from self-regulation in, say, the aircraft industry, have we? Or as if we ever experience major outbreaks of food-borneillness? Or as if there was a reason the U.S. government stepped in to regulate meatpacking in the first place?

Now, you could see the Trump administration's willingness to trust the meat industry to keep our meat safe as part of an overall attack on government regulation, a willingness to trust profit-making businesses to do the right thing and let the market rule. And there's something to that, but it's not the whole story, as illustrated by another event: Trump's declaration the other day that wind turbines cause cancer.

Now, you could put this down to personal derangement: Trump has had an irrational hatred for wind power ever since he failed to prevent construction of a wind farm near his Scottish golf course. And Trump seems deranged and irrational on so many issues that one more bizarre claim hardly seems to matter.

But there's more to this than just another Trumpism. After all, we normally think of Republicans in general, and Trump in particular, as people who minimize or deny the "negative externalities" imposed by some business activities — the uncompensated costs they impose on other people or businesses.


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For example, the Trump administration wants to roll back rules that limit emissions of mercury from power plants. And in pursuit of that goal, it wants to prevent the Environmental Protection Agency from taking account of many of the benefits from reduced mercury emissions, such as an associated reduction in nitrogen oxide.

But when it comes to renewable energy, Trump and company are suddenly very worried about supposed negative side effects, which generally exist only in their imagination. Last year the administration floated a proposal that would have forced the operators of electricity grids to subsidize coal and nuclear energy. The supposed rationale was that new sources were threatening to destabilize those grids — but the grid operators themselves denied that this was the case.

So it's deregulation for some, but dire warnings about imaginary threats for others. What's going on?

Part of the answer is, follow the money. Political contributions from the meat-processing industry overwhelmingly favorRepublicans. Coal mining supports the G.O.P. almost exclusively. Alternative energy, on the other hand, generally favors Democrats.

There are probably other things, too. If you're a party that wishes we could go back to the 1950s (but without the 91 percent top tax rate), you're going to have a hard time accepting the reality that hippie-dippy, unmanly things like wind and solar power are becoming ever more cost-competitive.

Whatever the drivers of Trump policy, the fact, as I said, is that it will kill people. Wind turbines don't cause cancer, but coal-burning power plants do — along with many other ailments. The Trump administration's own estimates indicate that its relaxation of coal pollution rules will kill more than 1,000 Americans every year. If the administration gets to implement its full agenda — not just deregulation of many industries, but discrimination against industries it doesn't like, such as renewable energy — the toll will be much higher.

So if you eat meat — or, for that matter, drink water or breathe air — there's a real sense in which Donald Trump is trying to kill you. And even if he's turned out of office next year, for many Americans it will be too late.

what is democratic socialism?

jcase
'
Two important articles these past 2 weeks have highlighted liberal critiques of the "democratic socialists" programs on Medicare for All. The articles are: 1) Paul Krugman's critique of Medicare For All as a litmus test; 2) Natasha Sarin's and Larry Summers alternatives to tax proposals by Senator Elizabeth Warren and Alexandria Ocasio-Cortez. In each case, the author(s) is taking issue with "too much socialism" in the Democratic Socialist agenda, notably expressed in the presidential campaign of Bernie Sanders, and  from newly elected Congresswoman from the Bronx, NY, Alexandria Ocasio-Cortez.

I call them "important" because these are among the best and most experienced minds in economics, with generally progressive values, combined with deep experience in implementing economic theory into policy, policy into politics,  and politics into law.

Further, none other than Barack Obama appears to have weighed in cautioning "progressives" in the Democratic party and presidential campaigns to "not create circular firing squads". Many justly criticize the Affordable Care Acts defects. Most of the defects, so far, are the product of Republican sabotage. No one knows better than Obama the character of the resistance to health care reform. Nonetheless, campaigns based on fixing Obamacare risk becoming victims of the maxim: "there is no education in the second kick of a mule."

This does not make the critics authoritative. I am not sure anyone can be called "authoritative" in this Brave New World. But socialists might be  well-advised to answer the challenges therein, including asking are they really substantive "challenges"? What is "too much socialism"? What is too little? The multi-layered crises confronting all nations are nearly  inseparable from  market economics, yet there are few solutions that do not rely upon the positive behavior of markets in many if not most areas for supplying the means of life, and for the emancipation and rise of labor. Even if such policies were called "socialism with American characteristics"/

To even more complicate matters a new book , OPEN -- The Progressive Case for Free Trade, Immigration, and Global Capital, by Kimberly Clausing, makes a compelling, progressive defense of globalization and openness, of managed capitalism, and for expanded, not restricted, trade relations.  This book runs counter to prevailing narratives and  intuition in Left literature. The book is having a strong impact among progressive economists. It supports justified populist demands for institutional reforms. That means making it legal, within certain restraints, to choose more or less "socialism" (or strong industrial policies like the Green New Deal) in development policy, and to attack both national and global inequality in the distribution of gains  from trade via global tax reform (a la Thomas Piketty). However it does so within a fundamentally market oriented, capitalist context. The book emphasizes workforce adaptation over resistance to globalization. and an enhanced Pay the Losers and Make them Winners infrastructure and programs.

I will not further summarize this material -- it deserves to be read and studied, since these are leading and serious social scientists and thinkers not given to phrasemongering. They too, like all of us, are finding their way in the ever stranger political, economic and cultural terrains.

Instead, keeping the above thinking in mind, I ask: What is democratic socialism? I have been tracking most, and participating in several, socialist trends in the US for many decades. This is good and bad. On the good side, I see patterns in "democratic socialism" seen many times before, although never with the range and scale of interest now. Never with the electoral power of today. Sanders has transformed the terrain of socialist politics. On the bad side,  the "been there done that" sensations are not all that reliable and can lead to underestimating the new and different.

Answers

1. I do not know.

Given the immense scale, wealth, complexity, and diversity -- on every dimension -- of US society, plus its equally vast global entanglements and responsibilities, my only honest answer is: I do not know.  Undoubtedly it involves economically a substantial expansion of the public sector, perhaps as large as Roosevelt, paid for by progressive taxation (either of the Warren/AOC mode, or some other). And also paid for, hopefully, by real efficiencies arising from rationalizing health care and energy and focused investments in productivity enhancing services (e.g. education, health care) and infrastructure.

But many areas of reform have potential powerful side effects and high risk, unknown consequences.  Climate change is a perfect example.  But so are interventions in global financial markets! There are major trial and error confrontations on both roads. The wise overall policy of democratic socialism -- beyond emergency course correction steps on inequality, climate change, and tax/budget fronts  -- would be to promote experimental, and more scientific, frameworks to test the best approaches to social, infrastructure and industrial engineering initiatives. Facts, Not Dogma (Deng Chou Peng) would be a good slogan to warm up. Dogma is a weakness to which socialists have frequently fallen prey. (I will confess).

I believe we carry little more of use on the road we are headed than a  roadmap of values, the broadest possible mastery of science, and a memory of capitalism's long and, in some ways, quite mysterious trajectories. Those trajectories surprised generations before us, and they appear to be doing it again.

The values are our destinations: peace, justice, a healthy environment, and a material and cultural standard of living that gives rise to our highest aspirations -- those that reveal our true destines. There will be more than one.

One way to think about it is a great baseball game: A. Solve conflicts with games not guns; B. A good and impartial umpire to eject foul play from the game, a fair game is required; C. A good park. Advanced society requires support for leisure.  D. A chance at bat show your stuff; E. A chance in the Field -- to show you are A team. In other words, the pursuit of happiness.

2. Democratic socialism is managed capitalism in the current era. I cannot see how any other conclusion escapes complete fantasy for the United States.  The question is: managed by who?  Socialism has two meanings. One refers to the extent of public vs private property where a market oriented economic system is driving the division of labor and wealth. The other refers to the political and social values of the social classes, in a given country, that favor the former.

•  Note: Undemocratic socialism is ALSO managed capitalism, at least in this era.
• Note:  Democratic capitalisms have socialized sectors

Let me use Paul Krugman's stance on Medicare for All as an example of my difficulty in knowing What is Democratic Socialism? - other than Managed Capitalism for the foreseeable future.

All of Paul Krugman's questions about an inflexible, or dogmatic, approach to "medicare for all" are valid. And the alternatives he mentions -- mainly highly regulated mixed systems -- MIGHT be a better, less disruptive means of transforming and integrating a national system out of tens of thousands diverse institutions and services spread across thousands of state, county and municipal health care services that would be bigger and more complex than any health care system on earth.

This argument in effect says the insurance industry's entanglement with the US economy is so deep that nationalizing, permanently, this sector will result in "political chaos".

Bernie responds -- I will use my familiarity with him and his political/economic stance as a stand up example democratic socialist. The quotes are close, but not exact.

"You can't get there (universal coverage) from here if you do not take on the insurance industry and pharmaceutical corruption head on! They will sabotage any tinkering and raise the overall costs of the system while at the same time delivering less not more universal services. As they have done and are doing!"

So true. '

But Bernie too, should he become President, MUST OBTAIN MAJORITIES IN BOTH HOUSES, AND A REVAMPED SUPREME COURT, AND A NATIONAL MANDATE  powerful enough -- general strikes??-- to deal with the REDOUBLED resistance of overthrown or expropriated forces who will exploit every disrupted or reactionary constituency, who will threaten, as they did at the onset of the financial crisis negotiations with both the Bush and  Obama administrations, a serious capital strike and an unemployment rate over 30% if they are not "bailed out because they are too big to fail". There is the decision point, or a good recent metaphor for one. Do you avoid "chaos", again, even though here we are in the midst of President "chaos"? Do you bail out the insurance industry? -- and Wall Street too again since the insurance industry is like the liver AND blood of the financial system now. Or do you arrest the CEOs on the spot, and restart negotiations with what remains?

The real progress toward Medicare for All will be incremental and zig zag, no matter what.  But I think the political dragon lurking behind the demands for Medicare for All, and the more mixed systems, is the dragon of revolution, the potential violence inherent in displacing or reorganizing a significant sector of wealth.  Displaced, very powerful, economic blocs and factions to not leave the scene willingly.  Witness the slave owners or the King of England, or the Tsars of Russia. They do not fall on their swords. No vote that nationalizes insurance property will be viewed as legitimate or acceptable. Resistance to reform will be redoubled. Revolutionary means and approaches, however,  open Pandora's box. Everyone will lose some skin to move on historically. But if you fail to open it,  history may open it for you.

Both force and science will likely be required. The force part is a decisive, well organized majority. The science part will resolve the policy differences between liberal (less socialist) and democratic socialist approaches on health care.

The force part will probably be resolved by Republican reaction, as they remain determined to destroy ALL public options, reform or "socialist": Just like Fort Sumter resolved the differences between Abraham Lincoln and Frederick Douglas. Of course the era that follows may or may not be as democratic as hoped.  Democracy, certainly the formal kind, requires security. Revolutionary eras put that at risk too.

As Tom Joad remarked:

"They stood on the mountain
and looked to the west'
and it looked, like promised land.
A great green valley with a river running through,
there was work for every single hand, they thought.
there was work for every single hand."

Housing discrimination underpins the staggering wealth gap between blacks and whites [feedly]

Housing discrimination underpins the staggering wealth gap between blacks and whites
https://www.epi.org/blog/housing-discrimination-underpins-the-staggering-wealth-gap-between-blacks-and-whites/

Wealth is a crucially important measure of economic health—it allows families to transfer income earned in the past to meet spending demands in the future, such as by building up savings to finance a child's college education.

That's why it's so alarming to see that, today still, the median white American family has twelve times the wealth that their black counterparts have. And that only begins to tell the story of how deeply racism has defined American economic history.

Enter EPI Distinguished Fellow Richard Rothstein's widely praised book, "The Color of Law," which delves into the very tangible but underappreciated root of the problem: systemic, legalized housing discrimination over a period of three decades—starting in the 1940s—prevented black families from having a piece of the American Dream of homeownership.

Over the years, this disparity was compounded by not only ongoing discrimination but also the legacy of prior practices.

Figure A

"This enormous difference in (wealth) is almost entirely attributable to federal housing policy implemented through the 20th century," says Rothstein as the narrator in animated film about his book, entitled "Segregated by Design."

Director Mark Lopez uses innovative visual techniques to walk the viewer through Rothstein's story, and the results are moving and compelling.

"African American families that were prohibited from buying homes in the suburbs in the 1940s and 50s, and even into the 1960s, by the Federal Housing Administration gained none of the equity appreciation that whites gained," Rothstein says in the short film.

The discrimination happened on several levels—and often culminated in violence against black families trying to move into neighborhoods that had been effectively designated as white by government policy. Sometimes these designations took place quite literally as maps were divided up along racial lines with different colors on the maps. Black neighborhoods were painted red—hence the term "redlining"—which only became illegal after the Fair Housing Act of 1968.

In addition, "state sponsored violence was a means, along with many others, at which all levels of government maintained segregation."

Rothstein acknowledges that the problem runs so deep that it can never be completely untangled, but also argues that partial reversal are possible and can be encouraged by sound economic and housing policies. It starts with knowing how it happened.

"If we understand the accurate history—that racially segregated patterns in every metropolitan area like St. Louis were created by de jure segregation—racially explicit policy on the part of federal, state, and local governments designed to segregate metropolitan areas, then we can understand we have an unconstitutional residential landscape," Rothstein says.

"And if it's unconstitutional, then we have an obligation to remedy it," he adds. "We must build a national political consensus leading to legislation, a challenging but not impossible task, to develop policies that promote an integrated society."

Until then, the legacy of racist housing practices will remain a fact of life in most American cities.

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