During my lifetime, I’ve seen the laws change to make personal bankruptcy get harder and harder. At the same time, corporate bankruptcy has gotten easier. It’s kind of like how the banks were bailed out in 2008, but not the homeowners. The banks just had to sign a two page document to get billions of dollars in low interest loans. There was a program to help homeowners, of course; but it was incredibly difficult to qualify for. Most people didn’t. And those who did spent years doing it.

That’s the thing. As far as the government is concerned, there are the right kind of people and the wrong kind of people. The right kind of people are the rich and they are lavished with money because they always land on their feet. Of course, it’s a bizarre kind of self-fulfilling prophecy where the government “knows” the rich are good for any help they get because the government makes sure that they get help whenever they get in trouble. Meanwhile, if you are poor, you’re screwed. I once thought about applying for food stamps in the relatively liberal state of California, and I was handed a packed of about 50 pages of forms to fill out. If I had done it, I would have received about $20 per week in food.

Robert Reich wrote a very interesting article the other day, Donald Trump Proves What’s Wrong with Bankruptcy Laws in America. And he provided a way of looking at corporate bankruptcy and the economy at large that I had never thought about:

Think about about. When an individual goes bankrupt, it doesn’t affect the rest of the economy that much. Yes, some creditors end up with less money. But no individual is going to make or break a credit card company. But when corporations are allowed to go bankrupt, they can destroy the lives of thousands of works — sometimes far more. Yet our government has decided that the far more destabilizing kind of bankruptcy is the one that should be encouraged. Obviously, such policies have little to do with what is best for the nation as a whole.

Most of Reich’s article is about how the finance industry has warped the law for its own gain and against the people of the nation. Long ago, there was this idea that what’s good for General Motors is good for America. That certainly wasn’t true — even when it provided really good union jobs for tens of thousands of workers. But now we operate as though what is good for Goldman Sachs is good for America. And that’s simply a bizarre notion.

What we are opposed to, or what I am opposed to — guess I should speak for myself — is growth where all the benefits are captured by those at the top. Imperfections in economic institutions along with changes in the rules of the game pushed forward by those with political influence have caused those at the top to be rewarded in excess of their contribution to economic output, while those at the bottom have gotten less than their contribution. It’s not “taking” to increase taxes at the top and return income to those who actually earned it, to the real makers who toil each day at jobs they’d rather not do to support their families. It’s a daily struggle for many, a struggle that would be eased if they simply earned an amount equivalent to their contributions. That’s why it’s so “politically unattractive,” people explicitly or implicitly understand they have been, for lack of a better word, screwed by the system. The blame is sometimes misplaced, but that doesn’t change the nature of the problem. They don’t want “free stuff,” they want what they deserve, and there is nothing whatsoever wrong with that.

The other thing I’m opposed to is tax cuts for those at the top that make this problem even worse without delivering any corresponding benefits. These tax cuts redistribute income upward and cause the income received by workers to fall even further below their contribution, and there’s no corresponding benefit to economic growth (or if there is, it’s very, very small). We keep hearing that putting money in the hands of the “makers” at the top will produce magical growth, but the reality is that these are the true takers, the ones who are receiving far more from the economy than they contribute, while those who actually work their butts off each day to make the things we all need and enjoy struggle to pay their bills.

—Mark Thoma
‘Jeb Goes Galt’

On Tuesday, I saw what might seem like a very boring article over at Reuters, Brookings Fellow Resigns After Senator Warren Accuses Him of Conflicts. Warren has been pushing a “plan by the Labor Department to try and rein in conflicts posed by brokers who offer retirement advice.” But Wall Street hates it. So Brooking Fellow Robert Litan hooked up with his colleague Hal Singer at the consulting firm Economists Incorporated. And the two of them put out a paper saying the plan would be very bad. But there was some (understandable) lack of disclosure. Not only had Litan been paid $38,800 by the investment firm Capital Group for the research, the firm also provided “feedback” before the paper was published.

In the old days, Brookings was seen as a middle of the road think tank. These days, I hear it referred to as liberal or “liberal leaning” — as if it is the left’s equivalent of the Heritage Foundation. Regardless what you think of Brookings, you would have to admit that Brookings hasn’t changed — the political landscape of this country has changed. And that’s a question of elite opinion, not what actual American voters think. Thus, it should come as no shock that Brookings would employ what I consider a conservative hack.

What bugs me is that Litan worked in the Clinton White House. But it doesn’t surprise me. This is a real divide in the Democratic Party. And how many years have I been ranting that the New Democrats destroyed the party? Again: this isn’t about the actual voters. The Democratic establishment has become far more conservative on economic issues than the base voters. This is the same thing that happened to the Labour Party in the UK. And look what happened there. The only reason I haven’t turned against Hillary Clinton is that I think she has always been a lot more liberal on economic issues than her husband.

But I do feel that there are rumblings in the party. I don’t expect any kind of revolt. But it does seem that the “Democratic wing of the Democratic Party” is going to start to discipline the party. Because let’s face it: the “rush to the right” has not worked out well. In addition to getting us conservative Democratic policy like ending “welfare as we know it,” we’ve ended up with a hard right Republican Party — unwilling to compromise on anything at all.

So I’m glad that Warren is pushing back against this. The truth is that we can’t just accept that someone being a Democrat means that they are anywhere near on the right side of economic issues. In fact, the Democratic Party has been — from Clinton right through Obama — in love with neoliberal policy. That seems to be changing now. Of course, it may all be too late. We really have allowed our whole political system to drift too far to the right and I’m not sure how we get back a sane system. But a precondition is for party actors like Elizabeth Warren to stand up to corporate cogs flying under the Democratic banner.

Although I believe that I possess a special level of cluelessness on this matter, I think that men are pretty ignorant when it comes to human biology. There is a realization that comes to all us boys around the age of 5 that the girls have some kind of secret knowledge that they are not sharing with us. That never goes away. In fact, it only gets worse. At puberty, we all get very stupid. The men pretend they are tough and the women pretend they are weak, and the mating rituals begin. But still: the women are hiding something from the men — but only because we men can’t understand it.

There is something very male about the hysteria over the Planned Parenthood videos and Carly Fiorina’s claims about an aborted fetus outside the womb. And I think it explains why the anti-choice folks are using this tactic. Brian Beutler explained what’s going on very well, The Anti-Abortion Movement’s Weapons: Shock, Lies, and Carly Fiorina. When the videos first came out, the claim was that Planned Parenthood was doing something illegal. But that wasn’t true, so there have been various excuses for the “sting” operation. None of them are true, of course.

When all the videos — released over time so as to maximize media attention — didn’t do much, the same group releases a video that shows a pre-viable fetus outside the womb with some degree of life left in it. The footage was not taken by the group. It was taken from another source. According to Jen Gunter, it must be at least 15 years old. What’s more, it is almost certainly not from an abortion procedure, but from a miscarriage. But it is nonetheless shocking and disturbing, especially to men who really don’t have a clue what goes on inside women’s bodies.

Of course, women do. Beutler quoted Rebecca Traister on this subject:

And that’s why I say that it is all about men — or at least a male take on the subject. And this may be why the anti-choice movement so easily transitioned to anti-birth-control, and why it is so aligned with patriarchy. There may be a lot of women in the movement, but they are mostly the ones who do not believe in doing it for themselves.

Ultimately, the whole thing — the years of undercover work, the videos, the outrage — was just to get to show that image. As Beutler said, “It’s an Operation Rescue protest in the guise of advocacy, investigative journalism, committee hearings, and New York Times columns.” It is really just the same old argument: if only we pro-choice people understood what late term abortions were really like, then we’d change our minds!

Most of the women I’ve known in my life have either liked or had no problem watching those shows that present open heart surgery and so on. I can’t take them. They are deeply disturbing. But no one makes the case that we shouldn’t do heart surgeries because they are disgusting. And it’s equally true that childbirth itself is disgusting. Life is disgusting! But women already know that and they have since puberty at the latest. So this is mostly just a show for us men.

Afterword

For the women, I guess it is a slightly different narrative: “Look! Bloody fetus! Looks like a baby!” But Traister had a response for that too:

But this is not about babies. If it were, then these same conservatives wouldn’t be so intent on making poor mothers work outside the home. It is about controlling women. And so we have to see the tactics of “noisy protestors who hold startling fetus posters aloft outside of abortion clinics.” Because that is all they’ve got.

Matt Bruenig has some simple advice regarding one of our most pressing national issues, Want to Fight Poverty? Expand Welfare. Always Expand Welfare. It is, in part, a response to a common liberal solution to fighting poverty: limiting the poor. The arguments goes something like this, “Give the poor birth control and they will have fewer kids.” In short: enact policy to make contraception affordable, but not to make having children affordable. Sadly, the only reason that liberals can get away with making this argument is because conservatives make the argument that not only should we do nothing to make having children affordable, we should not even make contraception affordable.

But why is it that American liberals so often want to “fight” poverty by spending less on it. It’s not like these people make the argument that if more poor people used birth control there would be more money for those who didn’t. Ultimately, I think it is all about control. Liberals — just like conservatives — want to control the poor. The theory is that the poor can’t manage their own lives, but as I’ve noted here many times, the rich are only successful because they get a great start and then are never allowed to fail.

We have a lot of poor people in the United States. And why that is so is pretty obvious from two graphs that Bruenig presents. They both involve all the advanced economies — and a number of not so advanced economies like Hungary and the Slovak Republic. And it turns out that we have the highest child poverty rates of them all except for Greece (which is only slightly higher, and Turkey. We have twice the rate of child poverty of Germany and the United Kingdom. And a staggering 7 times the rate in Finland. Which reminds me:

But even more amazing is just how little we spend on this kind of welfare. Bruenig’s second graph shows spending on public family benefits as a percentage of GDP. We spend 0.7%. The next lowest spending country is Portugal, which spends almost twice as much: 1.2%. Germany spends 2.2%; Finland, 3.2%; and the UK, 4.0% — almost 6 times as much. The only country that spends less is Turkey, which spends nothing at all — and results in almost a third of its children living in poverty, so I don’t think we need to give that model a lot of thought. Bruenig noted, “How an American liberal looks at this sort of graph and concludes that what we should be targeting is lower welfare outlays is beyond me.”

I think it all comes down to how neoliberalism has infected the Democratic Party. As I point out all the time, it wasn’t a Republican who ended welfare as we know it. The whole basis of it was that the thing that the poor really needed was a good kick in the butt. And there was also this idea that I find so revolting that it’s great for rich women to stay home and raise the kids but poor women need the “dignity” of working outside the home. Fundamentally, the problem is that a large fraction of American liberals have given up on liberalism.

I’ve already written an overview about all this nonsense, Trump’s Huge Tax Cut for the Rich — of Course. It turns out that Trump’s tax plan is just a bigger version of Jeb Bush’s. And Marco Rubio’s. Basically, Trump’s tax plan is just another Republican tax cut for the rich. And look: Grover Norquist Blesses Trump Tax Plan. I had read somewhere that Norquist had seen the plan before it was announced, and that he had given his blessing then. So there is nothing surprising in any of this. Donald Trump is just another Republican loud mouth with absolutely nothing to offer.

But Dean Baker wrote a really insightful article on Tuesday, Trump World and the Fed. He focused on one aspect of the plan: the supply side voodoo. When Jeb Bush announced his plan, he claimed that it was going to increase economic growth to a 4% rate. No economists took that number seriously. Even the conservative economists who Bush has on the payroll distanced themselves from that. We haven’t seen much over 3% since the 1960s. But since Trump has to do everything bigger, he said his tax cuts would produce 6% growth. And why not? If Jeb Bush can get away with pulling a number out of the air, why can’t they all?

Baker’s point is that the Federal Reserve would never allow that kind of growth. As it is, we have anemic growth, low employment-to-population rate, and no real wage growth — and the Fed is just itching to raise interest rates. Baker noted, “In this case, we would expect to see the Fed raise interest rates sharply as they saw the Trump tax cuts boosting growth. Higher interest rates would slow house buying and new construction, discourage car sales, and put a crimp in both public and private investment.” And that, of course, is assuming that Trump’s plan worked as he claims (which of course it wouldn’t).

There is a broader point here. The Fed now sees its job as making sure that millions of Americans are involuntarily unemployed and that all Americans are stuck with stagnant wages. That’s not how they would put it, of course. They would say they are heading off inflation — despite the fact that they haven’t manage to even meet their 2% inflation target since the financial crisis. But regardless of their reasons, they point remains that whatever the economic policy, the Fed is determined to stop it if it actually works.

The last two economic booms were due to the Federal Reserve. The Fed destroyed the economy in the late 1970s to head off what was actually high inflation. And then when it lowered rates, it brought on the boom of the 1980s, which people wrongly give Reagan credit for. And then in the 1990s, Clinton’s economic policies were mostly fine, but it was only because Alan Greenspan was an iconoclast and allowed unemployment to get below 4% that the boom happened. It’s interesting to note that one of the big dissenting voices at that time — calling for him to raise interest rates — was current Fed Chair Janet Yellen. (Did you hear that Yellen just announced that the Fed will, in fact, raise rates by the end of the year? Way to go! Keep the rich happy! Screw the poor!)

So we are in this situation where we need two things to happen if the economy is really to start working for all Americans in the usual liberal, market oriented, way. First, we need good (or lucky) economic policy. Second, we need the Fed to allow it. So we have to break through two plutocratic barriers. This is why I am more and more convinced that we have to give up on the capitalist system as we now find it. It is self-corrupting. The more money people have, the more influence they buy. That isn’t the only problem with capitalism, but it is one of the biggest we now face. And it is one with no solution.