Could Democrats Keep Senate?

Sam WangIf asked, most people would say that Nate Silver had the most accurate prediction of the 2012 election, but that’s not true. Silver actually mis-predicted at least one Senate race. It was Sam Wang who was perfect in 2012. Wang is a neuroscientist at Princeton University and the head of the Princeton Election Consortium. He was one of the first people to aggregate election polling, starting back in 2004. And he currently gives the Democrats a 70% chance of holding onto the Senate.

This came as a bit of a shock to me. I’ve been following 538, The Upshot, and The Monkey Cage models, and they all are very bullish on the Republicans taking control of the Senate. For example, The Upshot currently gives the Republicans a 65% chance. So what is going on?

The difference in the predictions is based upon the kind of models. Wang’s model is based entirely on polling data. As far as I know, The Monkey Cage is based entirely on fundamentals like the state of the economy. The Upshot and 538 models are a combination of the two. The truth is that the fundamentals suck for the Democrats. But as Wang noted today:

Across the board, Democratic candidates in the nine [competitive] states above are doing better in the polls-only estimate than the mainstream media models would predict. This is particularly true for Alaska, Arkansas, and North Carolina. In these three states, Democrats are outperforming the expectations of the data pundits.

Of course, all of this could change. But the truth is that the election isn’t that far away: just over two months. One would think that if things were going to turn, they would have done so by now. But we haven’t seen any indication of that. But I know that I what to believe Wang’s results. Regardless, even his 70% Democratic probability result finds the most likely Senate makeup to be 50-50. The polls with the fundamentals have the Republicans controlling it 51-49. So the models are not all that different. It just shows that there is a lot of uncertainty. At this point, it doesn’t make much sense to get too excited or too depressed.

H/T: P M Carpenter’s Commentary

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Inflation Concerns Are a Good Way to Destroy Labor

Alan BuddThe nightmare I sometimes have, about this whole experience, runs as follows. I was involved in making a number of proposals which were partly at least adopted by the government and put in play by the government. Now, my worry is as follows – that there may have been people making the actual policy decisions, or people behind them or people behind them, who never believed for a moment that this was the correct way to bring down inflation.

They did, however, see that it would be a very, very good way to raise unemployment, and raising unemployment was an extremely desirable way of reducing the strength of the working classes — if you like, that what was engineered there in Marxist terms was a crisis of capitalism which re-created a reserve army of labour and has allowed the capitalists to make high profits ever since.

Now again, I would not say I believe that story, but when I really worry about all this, I worry whether that indeed was really what was going on.

Alan Budd
Margaret Thatcher’s chief economic advisor

Quoted by Cheltenham & Gloucester Against Cuts, who note that the inflation rate was the same when Thatcher came into power (1979) as when she left (1990). This is true, but inflation in the UK has been highly volatile. One thing is for sure: inflation was hardly tamed by her policies. And given that, what was the point? I think we all know that inflation is generally used as a reason to justify policies that help the rich and hurt the poor.

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To Tax Corporate Income or Not to Tax

Jared BernsteinJared Bernstein and Dean Baker are friends and collaborators. But they’ve been having a public debate on the issue of the corporate income tax. Bernstein has argued that we need to keep the corporate income tax because it brings in important revenue revenue, and getting rid of it would be a huge regressive tax cut, because it is mostly the rich who pay it. Baker argues that it is a bad tax that gives corporations huge incentives to avoid it. He even noted in his characteristically amusing way, “The question is, how much will a company pay to avoid paying $100 in income taxes? The answer is up to $99.99.” If you want to read the exchanges, start with Bernstein’s last post, My Last Word on Dean B and Corporate Taxes. You can work backwards from it to his original article in The New York Times, Cutting the Corporate Tax Would Grow Other Problems.

Dean BakerThe discussion is mostly over details and emphases. Not surprisingly, I agree with both of them. They are both brilliant and keen observers of the economy. But it does bring out what I think is a bit of a problem with Baker’s thinking: he doesn’t take into account political realities enough. My favorite example of this is his notion that we don’t need to worry about fewer workers per retiree for the funding of entitlement programs because of increasing productivity. The problem with this thinking is that for the last four decades, productivity has become entirely decoupled from wages. The way that the entitlements are funded, this represents a big problem.

Baker understands this, of course. If you haven’t read it, you should read the book he wrote with Mark Weisbrot, Social Security: The Phony Crisis. That book is 13 years old, yet all of the phony arguments they destroy are still very much still with us. So Baker would counter my argument about productivity with something like, “Of course! My point is that the problem is that productivity is not shared with workers, not that we need a bunch of people working to support retirees.

The maddening thing about this is that he is (as usual) totally right. The problem is that pretty much all economic problems go away if we could just re-couple wages and productivity. I’m concerned that his is often a dangerous way of talking if we aren’t clear about it. And Baker, brilliant guy that he is, often doesn’t hammer home the issue of wages and productivity because it is so obvious to him.

The argument with Jared Bernstein is similar. They don’t really disagree on the matter. Bake is right: the corporate tax doesn’t bring in that much money and it could be replaced with another targeted tax on wealthy people. Bernstein response is basically: yeah, right! This all reminds me of the push by conservatives to lower the corporate tax rate, but keep the amount collected the same by eliminating loopholes. An obvious reaction to this is: if you are bringing in the same amount, why do it? There is an argument to be made that it is fairer. But I think the real reason is that the corporations think they would end up paying less. After all, it is hard to reduce the base tax rate; it is easy to get loopholes put back in.

I think we see the same thing with the idea of eliminating the corporate tax. It is certainly the case that there would be a whole lot more people lobbying on behalf of making the replacement tax less, than there would be on behalf of making it more. So in the end, it would not be offset and so would be a big tax cut for the rich. Just the same, Baker is right that the corporate income tax is a terrible tax. We really ought to replace it. I just don’t see a political climate that would allow that to be done properly for at least a decade—and maybe a lot longer than that.

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Welcome to the Greater Depression!

Soup LineI have this constant feeling that the world has gone crazy. Conservatives especially but by no means exclusively continue to be worried about inflation. But if you look at the ratio of employed people to total people here in the United States, you will see that it cratered in 2008 and has hardly come up at all over the past six years. It is still four percentage points below where it was at the start of 2008. Being worried about inflation in such an environment is like being worried about fashion in the middle of a war zone.

This morning, Brad DeLong posted an article, When Do We Start Calling This “The Greater Depression”? He goes over the history of what we’ve call this, from the “financial crisis” in 2007 to the “great recession” in 2009 to the “lesser depression” in 2011. Hence his question.

He presented some shocking information. In 2009, the GDP level was 11% below the trend indicated by the period from 2005-2007. Today, it is 16% below that same trend. So we are continuing to slip. The economy is growing, of course—just not as fast as it was when the economy was doing just okay. And note: this is not because Obama has been such a bad president. I am against many of his policy preferences. But it has been the Republicans who have been entirely against anything that would help the economy, and have actively pursued policies that have hurt the economy.

The situation is even worse in Europe. According to DeLong, although Europe was only 8% below its 1995-2007 GDP trend in 2009, it is 15% lower today. This is due to the mania for austerity there. Their initial downturn was not as bad and would not have been as bad. The second bounce down in GDP is entirely due to bad policy there. But no one in Europe with any real power seems to be willing to admit the problem. And conservatives here are extremely eager to join the “Let’s destroy our economy!” bandwagon.

And it is all about inflation. While it’s true that millions of people are out of work, none of the people who make policy are out of work. In fact, they are doing extremely well. They are part of the one percent. They own things. And they have to balance the interests of the millions whose lives have been destroyed by the terrible economy against the thought that inflation might in a few years actually go up slightly over our ridiculously low 2% inflation target. And we see whose interests are considered important.

Welcome to the Greater Depression!


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C Wright Mills

C Wright MillsOn this day in 1916, the great sociologist C Wright Mills was born. He is best known for his book, The Power Elite. Regular readers of this site will know that I use that phrase “power elite” a lot. But this is mostly because conservatives have been so good at redefining the word “elite” to mean academics and basically anyone who is in favor of liberal ideas. What’s more, elite is a general term. The power elite are my primary interest in politics.

Mills considered the power elite to be the military, corporate, and political leadership of the powerful countries. You know: the people who have actual power. He was arguing that this group was effectively an aristocracy. I would add that it is anti-democratic. As we’ve seen in recent studies, the opinions of the poor and middle classes have almost no effect on how politicians act. If Mills saw this problem in 1956, you can image what he would think today.

When the book was published, it was widely criticized. But over the years as things have become so much worse, the reputation of the book has gone up. But I don’t see the problem even then. His inspiration for the book was Behemoth: The Structure and Practice of National Socialism. That book argued that Nazism was the result of the unchecked aspirations of certain groups. Well, in United States now has the same thing, although those who have destroyed our democracy are already ridiculously rich and have a very public philosophy that claims it is necessary that they accumulate ever more if the rest of us are to have nice things. There is no need of terror.

Mills wrote quite a lot more than this one book. Most notably he wrote, White Collar: The American Middle Classes. It was about the new middle-manager class in America. Of course, it too has gotten far worse as evidenced in Barbara Ehrenreich’s Bait and Switch: The (Futile) Pursuit of the American Dream. It doesn’t really matter how depressing a book you wrote about class in the 1950s, things have gotten almost unimaginably worse. And with that cheery thought:

Happy birthday C Wright Mills!

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We Need to Reverse the Neoliberal Coupon Welfare State

Mike KonczalI finally got around to reading Mike Konczal’s excellent paper (from two years ago), No Discount: Comparing the Public Option to the Coupon Welfare State. It looks at neoliberal policy where rather than providing services directly, the government gives people coupons (generally called “vouchers”) to buy whatever it is on the open market. The most notable recent example of this is Obamacare.

Note that I said these are neoliberal policies. In general, conservatives are for such policies too. But I don’t think it is any secret that conservatives generally want to use such policies as a way to destroy the programs the same way they do with block grants. A good example of this is discussed in Konczal’s paper: unemployment.

The idea would be to create “personal accounts” where part of anyone’s salary would go into an account to be used (until it was exhausted) to cover for unemployed periods. Konczal noted that unemployment insurance has all the common advantages of government provided programs like efficiency[1], as well as none of the disadvantages of vouchers. In particular, the whole “personal accounts” system would create a whole extra layer of private bureaucracy to go along with the government bureaucracy.

But to get an idea of the general idiocy of the neoliberal approach to welfare, you can’t do better than Konczal’s blog post introducing the article, New Paper: Against the Coupon State. Since I have such a great love of libraries, this example really appeals to me:

Imagine if current neoliberal policymakers had to sit down today and invent the idea of a library. What would it look like? They’d likely create a tax credit to subsidize the purchasing and reselling of books, like much of our submerged welfare state. They might require a mandate for people to rent books from approved private libraries run by Amazon or Barnes and Noble, with penalties for those who don’t and vouchers for those who can’t afford it, like the recent health care expansion.

Or maybe they’d create means-tested libraries only accessible to the poor, with a requirement that the patrons document how impoverished they are month after month to keep their library card. Maybe they’d also exempt the cost of private library cards from payroll taxes. Or let any private firm calling itself a library pay nothing in taxes while exempting their bonds from taxation and insuring their losses by, say, paying for books that go missing. You can imagine them going through every possible option rather than the old-fashioned, straightforward, public library, open to all, provided and run by the government, that our country enjoys everyday.

Given this, why do we even consider such neoliberal approaches to problems? I think it has almost nothing to do with solving the direct problems. I think the business community spent many decades salivating at all the money in various welfare programs from Social Security onward. And they started asking themselves, “How can I get a slice of that?” So they began spinning this lie that if the private sector were involved: poof! Suddenly everything would be more efficient. But that not only wasn’t true, it had nothing to do with the impetus of the neoliberal policy.

We all know what the New Democrats brought to us: acceptance of social liberalism and an embrace of economic conservatism. It was libertarianism lite.[2] And that’s why I push against the Clintons and Obamas of the Democratic Party. These policies aren’t effective. What’s more, they aren’t popular. Your average American is just the opposite: socially conservative and economically liberal. But these policies are popular among the big spending donors.

And they are destroying our country—not just by eliminating economic liberalism but also by causing the Republican Party to go off the deep end. The modern Democratic Party is more conservative on economic issues than the 1972 Republican Party. What did the New Democrats think was going to happen when they took this hard right turn on economics? It was predictable that the Republicans would get lost down the rabbit hole of conservative-land.

So we are left with ever decreasing support for coupons like food stamps. But the rich are doing better than ever. This trend needs to reverse.

[1] I often think that conservatives claim so shrilly that the private sector is more efficient than the public sector because they know what a crock it is. Regardless, in these cases, the government has many advantages over the private sector.

[2] The fact that actual libertarians didn’t rush to the Democratic Party after Bill Clinton was elected should tell you all you need to know about the real motivations of that movement.

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The Rebirth of Debtors’ Prison

Debtors' Prison

Thomas Edsall wrote a great article at The New York Times yesterday, The Expanding World of Poverty Capitalism. The base story is not exactly breaking news, but the situation only gets worse. Basically, we have a system where state and local governments don’t feel like they can raise taxes so they raise funds in ways that don’t require it. And these ways are highly regressive taxes by another name.

We have been seeing a perfect example of this in Ferguson. Last year, just over 20% of the city’s revenues came from court fines. This is almost double what it was just two years before. That’s money that comes almost exclusively from the poor. But the government can claim it isn’t a tax increase. And in a technical sense, it isn’t. But what it is is a system that is far worse. Another fun fact from our friendly Ferguson police department is that these fines are applied far more to blacks than whites.

But the issue is much bigger than this. The problem seems particularly bad in Georgia, but that is doubtless just because the innovations of this laboratory of democracy haven’t fully made it out. Rest assured: they are coming to a red state near you, and parts have already arrived. Of particular concern are private probation companies. Instead of the government paying for probation officers and all that, the poor souls caught up in the system are just sent to these private companies, which they must pay. According to Human Rights Watch, there is “virtually no transparency about the revenues” of these companies. The poor just pay and the government doesn’t care.

But the great thing about them is that if someone on probation isn’t able to pay the private company, the company can have them sent to jail. If this sounds like debtors’ prisons, that’s pretty much true. Think of Georgia as a pilot program. Of course, there have long been debtors’ prison type laws in the United States. In the simplest of cases, if people on supervised probation are not able to pay their fees they will go to prison. This is clearly wrong, as it would never happen to a rich person. But what’s new here is that private companies are using the criminal justice system to imprison people who don’t pay what the companies think they are owed.

I think it is fair to say that this only gets worse over time. And as more and more government functions get privatized, we will see more of this. And at some point, it will only seem natural that people go to jail when they can’t pay their debts to Citibank. And what’s this business about bankruptcy? After all, throughout my life it has gotten harder and harder to get bankruptcy. Even though that’s bad for the economy as a whole. It’s great for credit card companies and that’s all that matters!

The bigger issue here is that the political elite just get better and better at shifting the cost of government from the rich to the poor. I’ve argued for a long time that the rich may talk about a flat tax, but they would never be satisfied with it. As it is, total tax burden in this country is only slightly progressive. But what they want is a regressive tax system. It isn’t about fairness. It’s about power. And the rich have power and the poor don’t.

But let me leave you with Thomas Edsall’s hopeful words:

What should be done to interrupt the dangerous feedback loop between low-level crime and extortionate punishment? First, local governments should bring private sector collection charges, court-imposed administrative fees, and the dollar amount of traffic fines (which often double and triple when they go unpaid) into line with the economic resources of poor offenders. But larger reforms are needed and those will not come about unless the poor begin to exercise their latent political power. In many ways, everything is working against them. But the public outpouring spurred by the shooting of Michael Brown provides an indication of a possible path to the future. It was, after all, just 50 years ago—not too distant in historical terms—that collective action and social solidarity produced tangible results.

Perhaps. But the truth is that our political system is designed to make it as hard as possible for the poor to participate in our democracy. But I still have a little hope that we can overcome this.

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Michael Brown Was No Pelican

Michael BrownOn Monday, The New York Times published an article by John Eligon, Michael Brown Spent Last Weeks Grappling With Problems and Promise. And as usual, Ta-Nehisi Coates was there to call foul, Michael Brown’s Unremarkable Humanity. He was particularly upset with the sentence, “Michael Brown, 18, due to be buried on Monday, was no angel, with public records and interviews with friends and family revealing both problems and promise in his young life.” It is a problematic framing.

Coates noted that that he was much the same at that age. Humans are humans—none of us are angels at any age. What’s shocking is that, in my experience, all teenage boys are horrible at least some of the time. And what’s happened to Michael Brown is that he’s had a narrative developed for him that denies his humanity. (In Eligon’s defense, he’s trying to do exactly the opposite of this.) Various parts of his life have been crammed into a stereotype. And whether we want to admit it or not, that stereotype is “frightening young black man who deserves to be killed.”

Last night on The Daily Show, Jon Stewart did a great segment, “Race/Off.” It’s about the coverage of the Michael Brown killing by Fox News and it shows how disconnected it is from reality—or rather, just how determined it is to find, “Cop good! Unarmed black man baaad!” Of course, at the Bundy Ranch, it was, “White bigot good! Cops baaad!” But whatever. There is also a nice response to the “Why don’t black leaders care about black-on-black crime in Chicago?!” conservative meme. (Note: on social media you constantly hear conservatives talk about crime in Chicago, even though it doesn’t have the highest crime rate. Why is it mentioned? Because Chicago is the favored example of Fox News and other conservative media outlets. They are just parroting what they’ve heard.)

It’s very interesting that Fox News got Mark Fuhrman to come on and say, “The only racial divide that is created here is created by the race baiters.” I know if I were covering a white cop killing an unarmed black teen, my go-to man would be the racist cop from the OJ trial. But what most struck me in this segment was the one commentator who said, “You know who talks about race? Racists!” That’s textbook racial demagoguery. It is meant to shut down discussion. And it is the conservative take on racism, “If we pretend racism doesn’t exist, it doesn’t!”

Ta-Nehisi CoatesNote that this is the network that talks excessively about race. Since the shooting, Bill O’Reilly has done little but talk about cultural dysfunction in African American communities. They can’t seem to talk about young black people without complaining about sagging pants. (In my community, most white boys have sagging pants too, so I hardly think it says anything other than that black kids are not long for that fashion trend.) So Fox News wants to talk about race. Their issue is talking about it in any way that would indicate that it isn’t just a problem with blacks.

In this context (which is far bigger than Fox News and the rest of the conservative media), of course Michael Brown is reduced to a stereotype. Note how it was reported from the beginning. His behavior at the convenience store was what would have been reported as shoplifting under normal circumstances. But it was reported as a robbery. “Robbery” implies a weapon as well as the taking of cash. So why wasn’t it reported as shoplifting? I think we know the answer: shoplifting is something a lot of kids do; shoplifting is a minor crime; shoplifting is not dehumanizing.

As a society we tend to see our own children as the complex creatures they are. If our children are caught shoplifting or vandalizing or almost anything else, we don’t label them as bad and forget them. But as a society we do it to their children, especially when they are black. And in this case, we have a police department with a very big motivation to paint Michael Brown in that way, and the media have just followed along. So in this way, noting that he was “no angel” is problematic. It’s technically true, but it is also technically true that Michael Brown was “no pelican.” But no one feels the need to point out that the dead teen, like all other humans, was not a member of the “genus of large water birds comprising the family Pelecanidae.”

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Myth of the Rugged Individual

Brian KahnThe myth gained power during the late nineteenth century as vast individual fortunes were accumulated by men at the apex of the economic pyramid. A classic example was The big Four, key investors in the development of America’s transcontinental railroad network: Leland Stanford, Mark Hopkins, Charles Crocker, and Collis Huntington. The endeavor, essential to the development of our nation, received huge goverment subsidies through the Pacific Railway Act of 1862, which gifted to the railroads ten square miles of public land for every rail mile built and guaranteed the investors needed funds through government-issued bonds. The engineering that was required to achieve this phenomenal feat was carried out by hundreds of design and construction engineers. And the years of backbreaking, pick-and-shovel labor was done largely by tens of thousands of immigrant Chinese laborers working under the harshest conditions.

But in terms of national mythology, The Big Four emerged as “self-made” men who on their own became titans in railroads, banking, shipping, and politics—instead of talented and fortunate individuals who amassed stunning fortunes through government subsidies and decades of work by tens of thousands.

That romantic and potent myth of the rugged individual—in today’s terms, the “individual entrepreneur”—has a profound impact on American public policy. It influences who among us is considered to be “production,” worthy of government subsidy, to what extent wealthy individuals and businesses are taxed, and what wages workers earn.

—Brian Kahn
Real Common Sense

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Rebecca Clarke

Rebecca ClarkeOn this day in 1886, the great violist and composer Rebecca Clarke was born. Sadly, she didn’t write all the much—her longest piece is the twenty odd minute Rhapsody. But because of this, it is all the more notable just how complex her tonal pallet is. The Rhapsody is especially intriguing given the way it supplements her traditionally impressionist style with atonal elements. But unlike Schoenberg, these elements come and go—adding to the dramatic structure of the piece. It’s quite an amazing work:

Clarke faced what can only be described as comical sexism. In 1918, she performed a recital with a number of new pieces by her. One of the pieces, Morpheus was credited not to her, but to “Anthony Trent.” The critics all praised it and ignored the ones she had put her own name to. Now, it is true that Morpheus is a heartbreakingly beautiful piece, but undoubtedly it would have been criticized for that very fact had it been presented under Clarke’s own name. Here it is; it is a wonderful piece:

The following year, she entered her Viola Sonata into a composition competition. She ended up tying with the great composer Ernest Bloch. There was much speculation at the time that “Rebecca Clarke” might be a pseudonym used by Bloch. According to Wikipedia “or at least that it could not have been Clarke who wrote these pieces, as the idea that a woman could write such a work was socially inconceivable.” Of course, even at that time there were great female composers, most notably (for me), Germaine Tailleferre. But facts never stand in the way of prejudice.

Here is a performance of the Viola Sonata with Molly Carr on the viola and Yi-Fang Huang on piano:

Happy birthday Rebecca Clarke!

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