I grew up in Chappaqua, New York, which is 20 miles northwest of New Rochelle. Both towns are in Westchester County, but they’re different.
Chappaqua’s population is 81% white, 12% Asian, and 2% black. Its median household income is $100,000. Its poverty rate is less than 4%. New Rochelle’s population is 47% white, 19% black, and 28% Latino/a. Its poverty rate is more than 12%. Its median household income is $67,000.
But here’s how I really know the difference between the two towns.
When I was growing up, my friend Mario, who’s no longer alive, came over to play. It was a snowy day. We decided to throw snowballs at cars. Our position protected by a tall hedge, we packed the snowballs tight and started hurling them onto the street. We did it for a while, till we heard a car screech and stop. And then we ran like hell.
About five or ten minutes later, my dad called out for us. The police were in the driveway. We got a stern talking-to, my parents yelled at us, and that was that.
As we prepare for the biggest game of the year in the most boring sport, I thought it would be a good time to consider some economic and political issues regarding the Super Bowl. Let’s start with the fact that the first Super Bowl was in 1966. Bart Starr led the Green Bay Packers to the first two championships. But it is wrong to think of it as that big a deal. What it really was, was a corporate merger.
You see, the NFL was always just what we think of as the National Football Conference (NFC). But in 1960, the American Football League (AFL) started up and it did quite well. It did what companies in a free market are supposed to do: compete! But the NFL didn’t like that. So the two companies saw that they could make more money if they stopped competing and cooperated. So the first Super Bowl was part of the process of the AFL integrating into the NFL as the American Football Conference (AFC). I suppose it does make the whole thing more exciting, but it also makes ticket prices higher and gives football teams undue influence on local governance.
But the Super Bowl is great for the economy, right? It stimulates spending? Not especially. Mike Cassidy at The Fiscal Times lampooned this idea, The Super Bowl’s Economic Impact: Not So Super:
Like a family driving their SUV to get double bacon cheeseburger combos, everything about the day is wholesale, venti, XXXL. According to the National Retail Federation (NRF), Americans are expected to spend $14.3 billion as they watch the Seahawks battle the Patriots in the big game’s 49th iteration. It’s the nation’s second biggest eating day, a huge weekend for big-screen sales and routinely the record-setter for all-time TV ratings.
Cassidy brought up three points to counter this. First is the fact that $14.3 billion is not that much when you consider that American consumers will spend $12 trillion this year. If we look at the daily level, the Super Bowl is roughly half our spending. But of course, the spending for today does not take place in a single day. Still, it is sort of impressive. But that’s not the whole story.
The $14.3 billion dollars is a very deceptive number. If people weren’t eating food while watching the Super Bowl, they would be eating food while doing something else. This isn’t to say that the Super Bowl doesn’t increase spending. But it is to say that that the extra spending is far less than this headline number. As Cassidy noted, “It’s a great day to be a pizza delivery guy or a Best Buy investor. But it’s a bad day to be in pretty much any business that doesn’t involve watching football from your couch.” And that isn’t the whole story either.
The final issue — and the nail in the coffin of the Super Bowl stimulus — is that people generally have fixed incomes. So any extra spending today will be offset with less spending in the weeks ahead. So all the Super Bowl does is move spending around and focus it on a particular day. If Americans tended to over-save, then an excuse to consume might be welcome. But Americans already have extremely low savings rates. We don’t need the encouragement of the Super Bowl.
Not that I care about that. I think an excuse for a party is always good. What I don’t like is the idea that we should thank our corporate overlords. They are doing everything they can to oppress us. The Super Bowl is a big money maker for them. That’s why they do it. They shouldn’t be treated as though they care about the social good. Because they don’t.
Afterword
You are, of course, allowed to enjoy the Super Bowl. But baseball is a much better game:
Yesterday, Talk of the Sound reported, New Rochelle Police Draw Guns on Black Youths Over Snow Ball Fight NSFW. This took place in New Rochelle, NY — a town of about 80,000 people just north of New York City. In the video that I embedded below, a police officer seems to be detaining and searching two men who were having a snowball fight. But he does so at gunpoint. According to some sources, the police had been called because of a report of someone with a gun. It’s possible, but it sounds more likely to be a justification after the fact.
What I wonder is how this can possibly be correct procedure. The officer walks up to one man who is knelling on the ground. He is holding his pistol in one hand and searching the man with the other hand. If the man on the ground had been so inclined, he could have grabbed the officer’s weapon. Guns are not an especially good weapon up this close. And then, after searching the first man, he walks to the second — leaving him prone to the first man. If these had actually been dangerous men, the foul mouthed officer could have been taken down or even killed.
According to Talk of the Sound, this was not some inexperienced officer. They are not providing the name of him at this time, but they did report, “We will say that he is a Superior Officer (i.e., Sergeant, Lieutenant, Captain)…” Of course, I’ve never particularly bought into the whole idea that our policing problems are due to a lack of experience and training. There are bigger problems — particularly the culture of police departments. One thing is very clear in this video: the officer is not there to serve. He’s there to bully everyone.
So I think that the officer knows this is not a case where dangerous men are running around with guns. If he did, he would have responded in a different way. He would have put his gun away and called the other officers in a bit closer. My best guess — from years of interacting with police officers — was that it was an exciting opportunity. Two young black men were having a snowball fight, so he brought his car to a sudden stop and jumped out of the car. When the young men didn’t immediately respond to him, he drew his gun. Or he drew his gun immediately. And later that night when he went home, he told his wife about what a dangerous job he has.
Another interesting thing in the video is that the officer repeatedly looks toward the camera. He actually seems a whole lot more concerned about it than he is about the lawless snowball fighters. And I suspect that it is the presence of the camera that caused the whole thing to be resolved so quickly and amicably. It’s possible by that point, the officer realized that he looked like a total jerk. But I’m not sure shame is something that many officers allow themselves to feel.
Ultimately, this is as good an example of the problem with our policing that you will find. Why was it necessary for the officer to draw his gun? It clearly wasn’t. But as I’ve written too much around here, police have convinced themselves that their jobs are really dangerous, when they are not. And as a result, police officers tend to be pussies who would rather kill innocent children than risk the slightest threat to themselves. In this case, everything worked out well. But pulling a gun is dangerous, and should be a last resort, not de rigueur.
Update 3 February 2015 9:40 am
The Daily News reported, Video Showing New Rochelle Police Officer Pulling Gun on Teens Not What It Seems: Cops. According to them, when they showed up, one person put something in his waistband and ran. The other officer chased him, but didn’t catch him. I’m not sure what to make of that. Regardless, why was it necessary to hold a gun on the people who did not run? Why was the officer yelling obscenities at the young men when they were already on the ground with their hands in the air? And why did the officer search them with his gun still drawn? I am more convinced than ever that this is a great example of a badly trained police officer with a chip on his shoulder.
It’s always fun to read Paul Krugman when he’s angry. And he was angry on Friday, I See Very Serious Dead People. He discussed a number of things, but I want to focus on one thing that he almost wrote about. One of his main complaints with the world of economic policy debate is the way that the very people who claim to be pushing “serious” policy ideas are the ones pushing useless and, very often, counterproductive policies. “I know that people who airily dismiss the austerity debate and all that and demand that we focus on the long run think they’re taking a brave stand; but you know, they aren’t.” That’s about right.
It often seems to me that talking about the “big picture” and the “long run” and “structural issues” are just a way to appear to be doing something, without actually doing anything. This problem is global, but it is especially typical of the United States. I noted this after 9/11. An obvious change would have been to put pilots in a separate compartment from the passengers. But that would have cost a lot of money. So instead, we got entry x-rays and bans on shampoo. But overall, it was just very clear that the government felt it more important to look like it was protecting us than it was to actually protect us.
With economic policy, the solutions to our problems are pretty simple. We went through this in the 1930s, and we know what works. But instead, we get the exact same policy prescriptions that failed back them. The most annoying of these is the idea that businesses aren’t hiring because American workers just don’t have the skills that employers want. This same thing was said in the late 1930s, but somehow, when the government started spending in expectation of World War II, those same workers were plenty skilled. And after the war, they continued to be. Funny that. Even funnier is the fact that so many establishment figures today recycle this same point without a hint of irony.
But I don’t think that they are ignorant. The purpose of claiming that the problem is a “skills gap” is that it doesn’t have a clear solution. The only thing that can really be done is to have the government pay for workers to go back to school and get those skills that businesses are supposedly so desperate for. And that means it is always at least a couple of years away. And when the last crop of students finds that they aren’t any more employable than they were before, no one cares. It isn’t like there are labor reporters everywhere disseminating the information.
Our economic problems are just a matter of doing what worked before: stimulus, which used to be the standard response to a recession, regardless of political party. This was true right up to the last Republican president. Our economy would be booming right now if Obama had grown the government the way that Reagan and the two Bushes grew it. But we couldn’t do that! So instead, much of the Washington punditry — including many so called liberals — call for mysterious, complicated, and slow policy. Needless to say, such pundits don’t have to worry about losing their jobs. So the pain they push on the rest of us and the years of bad times their policy preferences guarantee are no big deal.
Economic policy is not rocket science. When people claim that it is, all they are doing is arguing that we do nothing. It is kind of like global warming denial: we just don’t know enough; we need more study; there are no simple answers. It’s all nonsense. It’s all stalling. It’s just a way for the power elite to hang onto power.
By far, the best thing that Vox has done is to bring Max Fisher to my attention. He covers the Middle East for the website and he often takes on the tone of a patient parent, “Stop doing that; it’s racist.” I’ve written about his work a number of times, most notably in, The Bigoted “Muslims Condemn” Ritual. Well, Fisher was back a couple days ago with another article where you can almost hear him sigh before the first word, US Media Coverage of Michelle Obama’s Saudi Arabia Trip Isn’t Just Wrong — It’s Racist.
There is a very real and casual racism in this country — not just against Arabs but against Persians, Indians, and pretty much any other group you could name. If it hadn’t been for the Nazis and the Holocaust, Israelis would be included in that group. I still commonly hear people refer to “towel heads” and “those people” who attacked us on 9/11. It is the most naked form of racism. Race itself is a racist construct and you can see it clearly here. Muslims are commonly equated with Hindus and Sikhs, even though there is far more relationship between Muslims and Christians and Jews. But they are all the same to most Americans, not because they are, but simply because Americans are some of the most ignorant and parochial people on the planet.
Fisher made nine points in his article, but it all comes down to one thing: the American media coverage shows a shocking lack of understanding of Saudi Arabia. The supposed kerfuffle is that Michelle Obama didn’t wear a headscarf to the funeral of King Abdullah. This has been portrayed as some kind of major statement about the terrible treatment of women in Saudi Arabia. I’ve also heard it claimed that her dressing in blue instead of black was some big deal, but even I know that white is a traditional funeral color in many regions.
The main issue is that the elites of Saudi Arabia would be freaked out by seeing a woman who wasn’t enclosed in a portable tent. Fisher wrote, “Saudi royals are comfortable with the West and with Western customs; many spend long parts of the year in Europe and a number were educated in American boarding schools or colleges.” Of course they are. It reminds me of Mike Huckabee running around the nation claiming that those backwoods morals are so superior to the terrible morals of those New York and Los Angeles elites. As if he isn’t perfectly comfortable with elites, as he’s shown time and again. Just because elites here and in Saudi Arabia demagogue with religious fundamentalism doesn’t mean they fall for it.
It is one thing for the masses to have no idea that a Jain, unwilling to swat a fly, is quite different from a radical political Muslim suicide bomber or a Christian sniper who was proud of his 160 confirmed kills. But when the media can’t tell the difference, we are doomed. And I really do think that is the case and that they aren’t just pretending to generate clicks. Similarly, what are we to make of Ted Cruz’s tweet, “Kudos to @FLOTUS for standing up for women & refusing to wear Sharia-mandated head-scarf in Saudi Arabia”? I suspect he actually thinks that — and he is a smart and educated guy. But once you build a worldview based upon the idea that America is better than all other countries, this is the kind of blind stupidity that results. And that’s not just Ted Cruz — that’s America writ large.
Afterword
For the record, Saudi Arabia really is an awfulplace.
A little bit of The Onion goes a long way. So I don’t read it every day. But once a week, it is good for a half hour of hoots. When I stopped by the other day, two things really stuck out to me. One of them was a video, which I’ll discuss below. But the first was one of the funniest — and insightful — things I’ve seen in a long time, Bobby Jindal Not Sure He’s Willing to Put Family Through 2-Month Presidential Campaign. The joke is just an acknowledgement that we all know that Jindal will run for the Republican Party presidential nomination, and we all know that he will not last long.
If there is one criticism of The Onion, it is that its articles don’t usually have payoffs. The typical structure of an article is the same joke repeated again and again. And this often works brilliantly, as in, New Terminator Movie Brings JD Salinger Out Of Hiding. But in the Jindal article, there is a difference:
Citing the intense pressures and scrutiny placed on political candidates and the people in their lives, Louisiana governor Bobby Jindal announced Tuesday that he’s not sure he wants to put his family through the rigors of a two-month presidential campaign…
Though Jindal stressed that while he personally had no qualms about enduring the extreme media attention, he admitted that he hated the thought of subjecting his wife and kids to the harsh glare of the public spotlight for a couple of news cycles. According to Jindal, they would have to steel themselves in preparation for a demanding campaign that would take their husband and father all the way through Iowa, a fair amount of South Carolina, and maybe a couple counties in New Hampshire…
“Imagine what it’s like being 10 or 13 years old and having your dad spend dozens of days running for president — what would that do to your life?” said Jindal, who admitted that during the roughly five-day-long peak of his campaign he might be too busy to stay in touch with his loved ones. “And we could be in the thick of it right up until a few days after the 2015 Iowa Straw Poll. If I hold, say, six fundraising dinners, that’s six meals I’m skipping with the kids. Not to mention I’ll miss my daughter’s big dance recital, which is really important to her.”
“Oh, wait, no I won’t,” he added. “That’s in September.”
The second notable thing was a video, DNA Evidence Frees Black Man Convicted of Bear Attack. The satire in it is so sharp that it isn’t all that funny. Watching it, I felt myself getting angry. Maybe I just know too much, but the truth of the matter is that people all over the nation — most especially black men — are convicted of crimes with only slightly less ridiculous evidence. But I loved this line, “The Pinola Police Department apologized for the inconvenience they caused him and say they plan to reopen the case and ‘find the black man who did this.'” To create a variation off Mozart, “Only satire can do this!”
In reality, the single most notable example in the last 15 years of an academic being punished for his speech is probably former University of Colorado professor Ward Churchill, who was fired not for offending feminists but for claiming that some victims of the September 11 attacks were complicit in the crimes of the American state that provoked the attacks. Just a few years ago, liberal Democratic members of Congress and other officials publicly demanded that Brooklyn College cancel a forum featuring academics who support a financial boycott of Israel. Lawmakers threatened to withhold funding from the school if the event took place. Just this month, Duke University announced that it would not allow a weekly Muslim call to prayer to happen at the campus chapel, following criticism and threats from Christians and evangelical leaders. This is what speech policing in America actually looks like: like regular policing, it’s wielded primarily by people in power against marginalized groups and anti-mainstream opinions.
Conventional wisdom is a pox on our society. The problem isn’t that it is wrong — often times it is not. The problem is that it is invisible. I noted a great example of this a couple days ago in an otherwise good article by Jonathan Chait, Why Benjamin Netanyahu Lost His Mind. It is about how the Israeli leader is really screwing up by alienating Obama and thus the entire Democratic Party. It is quite possible that Democrats will control the White House for the next decade. Is he really looking out for the best interests of his country? I doubt it. But craven politicians are not something unique to the United States.
But in discussing the issue, Chait wrote, “One obvious cause of the Zionist right’s deepening millennialism is Iran’s quest to obtain a nuclear weapon.” So it isn’t the belief of the Zionist right, it is the fact that Iran is in a quest for a nuclear weapon. How it is that Chait “knows” this is not a mystery: it is what everyone “knows”! But it is not based upon evidence. It just seems right. Of course Iran would want a nuclear weapon! What fundamentalist theocracy wouldn’t want a nuclear weapon?!
I know that people may scoff and my having a problem with this, but I have a good reason. In the lead up to the Iraq war, it was just taken as a fact that of course Saddam Hussein had weapons of mass destruction. And the fact that Hussein repeatedly said that he didn’t have these weapons only made people think that he must. This culminated in unintentional high comedy when Scott Pelley (but there were many others saying the same thing), “So why keep the secret [that he had no WMDS]?” There was, of course, no secret keeping. In fact, the very news outlets that claimed Hussein kept this secret had previously reported his denials. For example, before the invasion, Bob Schieffer reported, “Saddam Hussein says he has no weapons of mass destruction, but should we believe him?” The answer was: of course not! Iraq was our enemy, so it wasn’t necessary to find evidence.
With regard to Iran, all the actual evidence indicates that Iran does not have a nuclear weapons program. After the Iranian revolution, the government shut down the Shah’s nuclear weapons program. Much later, the Iranian government seemed to do some fairly trivial research toward nuclear weapons. But for at least 12 years, there does not seem to have been any Iranian nuclear weapons program. But there could be. Just as with the teapot orbiting the sun between Earth and Mars, we can’t prove the negative.
The casual assumption that of course Iran has a nuclear weapons program is very dangerous. There are many powerful people in the United States who want to go to war with Iran for the very purpose of stopping its nuclear weapons program. Because they “know” that Iran has one and that it would be the end of the world if Iran got such a weapon. And these people are part of a larger delusion that we know that Iran has a nuclear weapons program.
But we don’t. And if we invaded Iran, I’m pretty sure that we would find that Iran did not, in fact, have a nuclear weapons program. And we would doubtless hear from many mainstream commentators the burning question, “So why keep the secret that Iran had no nuclear weapons program?” We have the perfect media system — for a fascist state.
Afterword
While looking for images to go with this article, I came upon a lot of political cartoons. They were almost without exception mocking the idea that Iran didn’t have nuclear weapons. What good is a free press when even the political cartoonists all repeat the government line?
I’ve noticed something recently. I’m not very happy with liberal websites. It’s not that I especially disagree with them, although I often do. It is more that it is mostly really boring. I find myself more and more gravitating to straight up socialist websites. Primarily, they understand the fundamental problems with capitalism — especially the way it is practiced in the United States and Europe. What I never find on socialist websites, as I discussed earlier, are things like Jonathan Chait’s rejoicing about Obama pushing for state and local governments to access the usefulness of barber licensing. Read the article for my take on it. The main point here is just: who cares?
But this is what we get from liberals. It reminds me of something I heard a long time ago. When I was in college, I saw a talk by Jeff Cohen. He noted that the PBS NewsHour would bring in two conservatives to talk about a subject. They would be presented as center-left and center-right. But if it was a discussion of the military, it would doubtless be Sam Nunn — generally a conservative southern Democrat — very conservative when it came to the military. He would be joined by some Republican who was on the far right. And they would have a “Yes, but…” conversation. For example, “Yes, I agree that we must build the Mx Missile, but I think we should build 40 rather than 100.” Because what we really needed in 1985 was more ICBMs and the only possible debate was the number that we needed.
Things really came to a head during the discussion of the Charlie Hebdo massacre. Like most people, my first reaction was disgust at the attack. But then it became a cause. But a cause for what? The cause of freedom of speech? Was that really a discussion we needed to have? After all, this wasn’t a question of the government stifling speech. This was a couple of thugs with guns who killed a bunch of people for their own reasons. But it did cause the French government to stifle speech as a result of it. It wasn’t the liberal blogs that were all over this hypocrisy. It wasn’t even much of the libertarian blogs. They were mostly interested in self-congratulation for just how committed to freedom they all were.
I also noticed just how widespread a certain strain of casual Islamophobia is around in the liberal world. It kind of goes along with the whole Jonathan Chait PC article brouhaha. I have this feeling that simmering below the surface of American liberalism is a kind of hatred and intolerance for anything that is socially acceptable to hate. Muslims are fine to hate, as long as you speak carefully like Sam Harris. Uppity transgender people are fine to hate, as long as it is their “intolerance” and not gender that you claim to hate. The primary difference between liberals and conservatives seems to be how much time it takes to move them kicking and screaming into the future.
The funny thing about all of this is that I don’t really consider myself a socialist. I believe in robust market economies. But because I am relatively conservative in the traditional sense of the work, I think a strong state is essential. And anyone who doesn’t see that is just not paying attention. Not only is a strong state necessary to take care of those thing that the market economy does not (social order, healthcare, guaranteed minimum income), we need it in order to make the market economy function correctly. But in the United States, politics is so screwed up that a conservative believer in robust market economies is well to the left of the traditional left.
But my increasing interest in socialist thought really doesn’t have to do with agreeing with it. I don’t agree with it any more than I agree with liberal thought. But I wonder what good liberal thought is when it doesn’t really counter the status quo. It is very much arranging deck chairs on the Titanic. We will fight endless wars in foreign lands regardless who is president, and the liberals will grumble. We will see the working class fall further and further behind regardless who is president, and the liberals will murmur. The poor will die much younger than the rich regardless who is president, and the liberals will whimper. But they won’t say that something is fundamentally wrong with the system, because they are as committed to the status quote as the conservatives.
Afterword
None of this means that my thinking on politics has changed. I’ve always been on the “radical” side of liberal politics anyway. But I am still a Democrat — because there is no better choice. And ultimately, I’m a pragmatist. But there are only so many hours in the day. And what am I going to spend them doing? I could read stuff with the same old boring points of view that don’t much enrich my thinking. Or I would challenge myself. Prepare for some changes to the links on the right.
In the past four years, WikiLeaks has had their Twitter accounts secretly spied on, been forced to forfeit most of their funding after credit card companies unilaterally cut them off, had the FBI place an informant inside their news organization, watched their supporters hauled before a grand jury, and been the victim of the UK spy agency GCHQ hacking of their website and spying on their readers.
Now we’ve learned that, as The Guardian reported on Sunday, the Justice Department got a warrant in 2012 to seize the contents — plus the metadata on emails received, sent, drafted and deleted — of three WikiLeaks’ staffers’ personal Gmail accounts, which was inexplicably kept secret from them for almost two and a half years…
Most journalists and press freedom groups have been inexplicably quiet about the Justice Department’s treatment of WikiLeaks and its staffers ever since, despite the fact that there has been a (justified) backlash against the rest of the Justice Department’s attempt to subpoena reporters’ phone call records and spy on their emails. But almost all of the tactics used against WikiLeaks by the Justice Department in their war on leaks were also used against mainstream news organizations.
For example, after The Washington Post revealed in 2013 the Justice Department had gotten a warrant for the personal Gmail account of Fox News reporter James Rosen in 2010 without his knowledge by explicitly accusing him of being an espionage “co-conspirator” (for having the audacity to arrange to confidentially speak with a source), journalists and privacy advocates understandably reacted in shock and outrage.
WikiLeaks staffers faced virtually the same tactics: they had their Gmail seized by the government in secret, they didn’t find out for years after the fact (so they had no way to challenge it) and, according to WikiLeaks’ lawyers, the warrant specifically indicates the Justice Department is investigating WikiLeaks for “conspiracy to commit espionage.” …
Unfortunately the news world has never rallied around WikiLeaks’ First Amendment rights the way they should — sometimes even refusing to acknowledge they are a journalism organization, perhaps because they dare to do things a little differently than the mainstream media, or because WikiLeaks tweets provocative political opinions, or because they think its founder, Julian Assange, is an unsympathetic figure.
Those are all disgraceful excuses to ignore the government’s overreach: the rights of news organizations everywhere are under just as much threat whether the government reads the private emails of staffers at WikiLeaks, Fox News or the Associated Press.
Despite the fact that I often hate the results of them, I greatly admire heterodox economists. It is really important to have people who push against the grain of what everyone else “knows.” Usually, everyone else thinks they know things because they are more or less right. But not always. And sometimes heterodox economists have important results that everyone just chooses to ignore. Alan Greenspan showed that unemployment could go way down without causing inflation, yet most economists continue to believe that an unemployment rate much below 5.5% will bring back the 1970s. This tends to be the way of it. When a new idea comes around that helps working people, the economics profession is very skeptical.
The problem with hererodox economists is that when they come up with an idea that is completely wrong, but which justifies what the power elite want to do, it is accepted as Hoyle in much of the policy establishment. There were two big examples of this recently. First there was Alberto Alesina’s work that purported to show that cutting government spending in a recession was consistent with economic growth: expansionary austerity. And then there was Reinhart and Rogoff’s idea economic that growth stalled out after government debt reached 90% of GDP. Neither of these theories was ever compelling, but it told conservatives what they wanted to hear, “The budget must be balanced!”
The great Mike Konczal at Next New Deal brought my attention to another heterodox paper from a group at National Bureau of Economic Research (NBER) that already has conservatives all tittering. He discussed it in, Did Ending Unemployment Insurance Extensions Really Create 1.8 Million Jobs? The idea is that cutting off unemployment insurance to 1.3 million people suddenly made 1.8 million people employed. It isn’t impossible in theoretical terms; it could be that there is a kind of multiplier effect: when one person gets a job, he’s able to spend more and that works its way through the economy.
One of the problems with the paper is that it uses a model that is “an empirical disaster.” This is very typical of Chicago school type models. Decades ago, they decided that it wasn’t necessary for their economic models to actually mimic or predict the real economy. And there is something to be said for this. One can learn things from models that aren’t predictive. Just the same, because of this, pretty much all the policy models are New Keynesian. And one has to wonder why economists would make claims about the real economy when using models they know don’t model reality.
There are many other problems with the NBER paper — read Konczal’s article for all the details. I’m more interested in (and worried about) the fact that this will be used by conservatives to claim that the only reason we ever have unemployment is because we are so nice to the unemployed. (Insert Paul Ryan hammock remark here!) Somehow, the 25% unemployment rate in 1930 — before these was UI — doesn’t seem to matter to these people. We end up with these horrible false equivalence arguments: “Some economists (99%) say that unemployment insurance raises the unemployment by a couple of tenths of a percentage point, and other economists (1%) say that unemployment insurance raises the unemployment by over a percentage point. Who can say?!”
This is a fundamental problem with economics and public policy. And this was the only valid criticism of Seven Bad Ideas. Many people, most notably Brad DeLong, noted that the bad ideas listed in the book weren’t really what economists believe. But the bad ideas are everywhere in economic policy debate. And heterodox papers like this new one from NBER only intensify this problem.
Watching economic policy debate feels very much like watching a doctor set a broken arm while the patient dies with blood gushing out of an artery. We look at minor issues and ignore major ones. And then when someone like me points this out, people complain, “Well at least they’re doing something!” That might be a sensible retort if the minor things that were being done were unquestionably good. But that’s never the case.
Take the case of Obama’s new budget line item that gives $15 million to states so that they can evaluate the costs and benefits of professional licensing. Jonathan Chait wrote a very excited article about it, Obama Budget Attacks Big Small Government. In many ways, I agree. The truth of the matter is that if you are going to be oppressed by the government in the United States, it is almost certainly going to be by state and local government — not the federal government. And a lot of professional licensing really is stupid. I’ll go further: there are tremendous state and local regulations that are extremely onerous to people like me who operate what I’ve come to think of as micro-businesses — businesses that consist of one or two people that often don’t even have store fronts.
Where I part company with Chait is in thinking that licensing requirements are really what are getting in the way of people climbing the economic ladder. To begin with, property tax laws that require businesses to pay taxes on all their inventory that they might some day sell are far more inhibiting than licensing. Or consider one of Chait’s favorite examples: barbers. Having to go to school and be licensed is certainly a barrier to entry. But it isn’t as big a barrier to entry as having to rent a shop rather than working out of your house.
But the macro-scale problem is worse. Becoming a barber is currently a path to the middle class precisely because it is a licensed profession. Get rid of that barrier to entry, and more people come into the field, and the quality of the job goes done. And pretty much, the quality of the job goes down to the same extent that it becomes an easier job to have. Allow people to have barber shops in their kitchens and it becomes as much a pathway to the middle class as itinerant farm work.
But hey, that’s the free market, right? Sort of. The truth is that writ large and long, the economy would grow as a result of cheaper haircuts. But there are two reasons why we shouldn’t care. The first is just a matter of fairness. Why is it that it is always the middle and lower-middle classes that have to suffer so that the poor might get a small advantage? We saw this during many of the lame attempts at integration in the early 1970s. The ultimate effect was that the lower and middle classes were disrupted and minority groups ended up just as segregated as when they started. This is what happens when the power elite decide that the only way to help the disadvantaged is by disadvantaging a different, almost as powerless, group.
The other issue is that I just don’t care about economic growth. Over the last four decades, we have seen the effect of economic growth. The rich (top 1%) have gotten way richer. The upper half of the upper class (top 10%) has gotten marginally richer. And the rest have either gotten nothing or have actually lost. So when cheaper haircuts stimulate economic growth, there is no reason to think that the very people who see their wages cut will get any offsetting benefit from it.
Last week, Dean Baker discussed, Ubernomics. It turns out that despite the fact that Uber drivers have enormous upfront costs and are basically just their own businesses, they seem to make less per hour than traditional cab drivers. This doesn’t even take into account that Uber and similar services are flouting the law. As Baker noted, “Find a way to get around the rules and then claim it as a great innovation.” Regardless, this is also the typical story of our economy: lower wages for poor and middle class workers while the rich pocket the savings.
None of this is to say that we shouldn’t look at professional licensing. But it is a minor issue. We are looking at it because it is an issue that doesn’t threaten the power elite. I understand: that’s politics. But there is a problem with supposedly liberal commentators claiming that this is something great. It isn’t. The long-term effects of this will be to lower the wages of middle class workers. But on the up side, Jonathan Chait will get cheaper haircuts.