The Meaning of Ferguson

The Meaning of Ferguson
November 26, 2014

Anyone who cares about the future of this country has probably been watching the news, or in some cases, participating in the aftermath of the police shooting of a young black man, and now following the announcement that the Grand Jury has not found cause to indict the policeman.

Rotating back and forth between MSNBC and Fox news, one can get a sense of the two extremes in points of view:

  • Michael Brown was murdered by the white policeman in yet another example of law enforcement racial profiling and prejudice against young men of color. He was unarmed and was trying to comply when he was shot repeatedly. This would not have happened if the young man had been white.


  • A young man robbed a convenience store, threatened the proprietor in the process, caught on videotape, and a few minutes later aggressively challenged and then threatened a white policeman who was simply doing his job, ultimately causing the policeman, in fear of his own life, following prescribed procedures resulting in killing the young man. Color had nothing to do with it. 
The second version above is essentially what the Grand Jury concluded. There are protests taking place in Ferguson and in other major cities across the US, some causing damage to buildings and vehicles. Tensions are high.
What is the truth, and what does all this mean?
First, I don’t pretend to know exactly what happened. Granted, at the moment, it appears the weight of evidence is mostly in support of the Grand Jury conclusion. But there may be other lawsuits and other findings.

However, these conclusions are also evident from this incident and it’s aftermath:

  1. Many Americans strongly believe this was a terrible injustice.
  2. Many also see this as a critical opportunity to protest and appeal the continuing injustice imposed on young men of color by white law enforcement.
  3. It is certainly possible that media on the Left is stoking protest and potential damage to the innocent, whether intended, or in good faith to their beliefs.
  4. Whatever is the truth of this incident, the response is reflective of a deeper sense of disenfranchisement among young men of color and all Americans of color. 
    • Reflecting the reality that there has been a history of racial prejudice among some elements of white law enforcement, and some of it continues.
    • There is also a high crime rate among young men of color.
    • There is a high unemployment rate among these young men.
    • It is not hard to understand why many in this population feel there is prejudice, not only in law enforcement, but in education and employment–essentially in all forms of opportunity. There is truth to this feeling.
    • There is justified anger among these people.
It is perplexing why this particular incident has taken on the role of galvanizing the concerned and affected to try to move the needle of justice to the left, considering that the deceased was caught on tape stealing and roughing up a convenience store owner, only a few minutes before his encounter with the policeman. Yet, we all acknowledge that this behavior does not justify his death.

Regardless of the merits of the catalyst, I argue that a significant portion of the dilemma is the result of our allowance of a high level of inequality: gender inequality, age inequality, religious prejudice, national and cultural prejudice, and especially racial prejudice. All of this is intertwined with income and wealth inequality, which in turn is exacerbated by our prejudices.

Establishing equality of opportunity is the starting place for our fixing the justified anger of young men of color. 
In previous posts, I have argued that equality of opportunity has been steadily diminishing across the last 30 years, has now reached alarming levels. Our public schools have been starved by the tax cutting strategies of Republicans, while children of the wealthy go to well funded and expensive private schools. Opportunities to provide employment for lesser educated citizens in our vast desperately needed infrastructure upgrades have been denied by Republican resistance to spending. Legal protections to workers have been withdrawn in favor of greater “flexibility” for employers, argued to improve economic growth. Compensation to entertainers, athletes, and C Class executives has skyrocketed, while wages for the middle class and below have stagnated.
The net result is that inequality of both wealth and income has advanced to a level equal to the worst in our history, reversing all the improvements gained between 1925 and 1980. We are rapidly approaching a plutocracy, where wealth controls all important outcomes.

And at the bottom of this increasingly steep pyramid of wealth and opportunity are young men of color. Some say there is no need for action to help, that this is a land of great opportunity. They single out the few examples among young black men who have somehow navigated the gauntlet from poverty and made it to a level of success. The rest of us sympathize, recognizing that for the vast majority, the deck is still stacked against them.

Here in my part of the country, there are a few organizations which have raised enough to help several hundred of the youth of color annually, providing same sex mentors to supplement single or no parents, and to help them qualify for decent colleges, proving there is lots of intelligence and talent there–just the need for a helping hand, the kind most of us had at least four of, during our growing years, not counting grandparents’ hands.

If the protesters can prevent damage to the innocent, if they can stay peaceful and avoid violence, these protests can raise awareness of the problems. If not, the protests may convince skeptics that young men of color do not abide by the law and do not deserve help.

I challenge anyone to dispute this: If these young men felt they had equal opportunity, equal access to education and jobs, we would experience far less of the incidents which lead to the altercations. Young men would not be stealing cigarillos. They’d be home with their families, preparing for work the next day, walking the dog, just like you and me.

It is our responsibility to assure equal opportunity.  If we do a good job of that, we won’t have to talk about redistribution, and we won’t need so much money for social support programs, such as welfare.
Let’s get started!

Will the American People Get Satisfaction?

Will the American People Get Satisfaction?
November 24, 2014

I fear we will not.

Both parties are trying to make their case beginning with “The American people have shown….” Lately, it’s more from the Right than the Left, perhaps because Republicans are basking in the aftermath of their election victories, and still objecting to anything. Yes, anything–not just anything coming from the President or the Left, but anything.

In my previous post, I suggest several characterizations of such rhetoric: First, it’s insulting to suggest that any of the specifics objected to (e.g., immigration reform of a certain type) were on the ballot–thus, cannot be argued to be the position of the people; Second, it’s insulting to suggest “the American people” are of one mind on anything. In fact, 2/3 of registered voters did not even vote in these elections. But it’s clear that like our elected officials, we are highly polarized on many key issues. We are also the most diverse nation in the world. Thus, it is undoubtedly true that we have a diverse array of opinions.  We may agree on a problem (jobs), but we have different opinions on how to solve the problem.

What seems likely is that the absence of specific proposals from the Right will continue until the new Congress is installed. Then, the Republicans still have a major task of reconciling the Ultra-right (people like Cruz and Paul from a Libertarian bent, McCain and Graham from a hawkish bent) with mainstream Republicans.  And, Republicans will have to deal with a President who seems ready to use his vero.

While the American people want to “get things done,” it’s ridiculous to assume an extensive list of miscellaneous legislation will satisfy anyone.The American frustration is not likely to be assuaged by passage of legislation around campus sexual assaults, veterans benefits, or the like. It does not appear that Americans will be satisfied with only a few of the controversial partisan issues getting resolved by negotiated legislation–things like immigration and climate control (not that such resolution is likely). And, it’s doubtful that much satisfaction would be provided by a negotiated resolution of the Keystone pipeline.

That’s because the key issue appears to be around jobs, and the pipeline won’t create many jobs. In contrast to Republican claims of 600,000 to 3.5 million jobs, estimates from Trans-Canada itself have the construction jobs down to 9,000 only, and estimates of permanent jobs after construction are as low as 35, Forbes reports from sources. These lower numbers are further confirmed by comparison to the actuals from the Trans Alaska pipeline, which was much more complex and expensive than Keystone is expected to be.

In my just previous post here, I acknowledged no-one knows what the American people really want. Specific actions preferred are diverse, where they exist at all. But there is clarity about one overarching issue that needs fixing, even if the way to fix it is disputed. My guess coming from numerous polls and addressed repeatedly (superficially) by politicians, is that there is much commonality in jobs dissatisfaction. Jobs problems are the big beef of the American people!

While the economy has improved dramatically since 2009, unemployment down to 5.8%, frustration remains about the nature, wages, and security of the available jobs. C Class compensation has skyrocketed. Just look at today’s SF Business Times list of top paid Bay Area CFO’s, one step below CEO’s. Annual comp for those 50 ranges from  a low of $3 million annually to a high of $38 million. Per capita income in my city of San Francisco is $47,000. Lots of people have been forced to take lower paying or temporary jobs, in desperation.

So, whether the blame is placed by some Americans on Democrats for this complex set of unresolved and seemingly deteriorating jobs issues, or by others on the Republicans, this does seem to be the central issue.  Of course, there are those of us who are retired, in school, or solidly situated in well paying management jobs, for whom this is not a personal issue. However, even these worry about graduation or about the opportunity for children and grandchildren.

How to deal with government is the key to resolving the jobs frustration. The Right has done a good job of marketing, placing the blame for all this on Obama, Democrats, and big government. Their solution is less and less government–move the jobs problem to the private sector.

The question is whether or to what extent pushing the jobs problem to the private sector will work.  Will private industry choose, with perhaps some tax reduction and other incentives, to pay more, provide more benefits, grant more security, conduct skills trainings to enable displaced workers to upgrade, etc? My guess is this won’t work very well. Of course, some companies are volunteering contributions to employment, social justice, or environmental justice. There is a slowly growing cadre of such. However, it’s too small, too limited, and too slow.

Such gratuity is limited by its inherent conflict with shareholder bottom line motivation at the heart of capitalism. It costs money to do these things, and if all my competitors don’t do it with me, I will lose access to capital for the future of my business. This may be exacerbated by Conservative views that the best way to create jobs is simply to grow the economy, and the best way to grow the economy is to further relax any restraints on employers in regard to their obligations and costs of employment. Trust “the invisible hand” of capitalism. If capitalism limits the extent to which employers can justify additional protection to employees, and Conservatives are driving to further reduce any government imposed obligations to do so, it is unlikely we’ll see significant improvement. In fact, maybe even the opposite.

The jobs problem is further complicated by structural issues such as automation, outsourcing, and globalization.

It is clear we need government to motivate and restrain the excesses of capitalism when these result in social or environmental injustice. The problem is that government is terribly inefficient, and the American people are rightfully frustrated with the cost and inefficiency, with which frustration the Right has taken advantage with messages boiling down to “let’s just starve the beast,” because (unstated) we don’t have the ability to manage government effectively.

It is true that there is a great deal in government that could be made more efficient, and there is also a great deal we could do without. Consider one example with which I am quite familiar, having spent a career in it: Banking.  Federal Financial Analytics has estimated that the new financial regulation (Dodd-Frank) stemming from the great recession has cost the 6 largest banks an additional $70 billion, and that doesn’t include the costs of oversight by government regulatory agencies (OCC, FDIC, Federal Reserve, etc.). It also does not include the cost to business delayed and denied, and to the economy. And this is just for the big 6 banks and just for the most recent wave of regulation.

Bank regulation can be done a lot less expensively, making the wheels of financial commerce move much more swiftly, with a boost to economic growth. Many agree that a few simple requirements could replace thousands of pages of regulation, and hundreds of thousands if not millions now employed on both sides of financial regulation: Increased capital requirements; a requirement to retain at least say 25% of loans on the originator’s books; separation of investment banking and speculative activities into separate entities without FDIC or other government support and without use of average citizen’s deposits; requirement that borrowers (whether individual or corporate) be liable for at least 20% of the debt (fully exculpated loans prohibited); and a downpayment of at least 20% on home purchases. These rules could be the basis for elimination of much of current regulation.

If so, why hasn’t the bank regulation been done this simpler way? Is it the fault of the Democrats wanting more detailed regulation-micromanaging? No. There is no marked difference between Democratic and Republican administrations in imposing such regulations. There is a rush from both sides to regulate when crises occur. Many economists blame the increased frequency of dramatic cyclical crises of finance on neoliberal economic policies gaining ground since 1980, supporting the freedom of “financialization.” When crises occur, regulations are designed by legislators who are not experienced in banking. Lobbyists representing banks have fought against simpler rules like the ones above, preferring all this paperwork, oversight and compliance over simpler rules which might reduce profits slightly and reduce freedoms for banks to speculate for their own accounts, with the implicit backing of the government.

So, government is terribly inefficient in some areas.  Granted. Does this mean we can just starve government and do without it? Trust the private sector for most everything? No–that would be at least equally foolish.

If the Conservatives would work with Democrats in a combination of incentives to industry to seriously address jobs needs, much could be done. The “60 Minutes” TV weekly last night focused on one of the easiest opportunities –fixing our aging US infrastructure. Democrats cannot do anything about that, since Republicans will not spend the money. As Economist Paul Krugman has argued throughout the recovery, we are missing a great opportunity to both grow the economy and create lots of jobs. Jobs needed to fix roads, bridges, tunnels, ports, airports and even our internet access, will not be few, as with the pipeline–there will be millions, and the work will continue for years, just to catch us up with other developed economies. This will stimulate jobs, generate new sales for business, and make US industry more competitive. Without government controls, this won’t fully solve the need for wage growth and job protection, but the Right is missing a great opportunity in resisting addressing infrastructure improvement. There are other such opportunities.

Conclusion: Americans mostly want jobs conditions to improve. Democrats who turned out for Obama in previous elections didn’t vote, likely disappointed with jobs performance, and not sure who is responsible. Voting Americans endorsed candidates with a political viewpoint that government cannot be used to fix the problem.  Maybe they were lured by Republican rhetoric. Maybe they just wanted a change–any change.

My forecast is that little meaningful will be accomplished in the next two years. We’ve been dtawn by tax reduction promises to starve government. But government is needed, along with private industry, to make the desired improvements in the jobs market. In addition to rule of law, national defense, and internal security, government is needed for infrastructure, education, and health care. Most advanced nations recognize that private industry alone will not meet these needs, is not by its very nature able to do so so. And, government is our only protection from the excesses of unrestrained capitalism.

We’re left to hope that the Republicans get reasonable across the next two years. There are quite a few competent and wise Republicans in the center of the party. However, it does not yet seem likely they will be able to control the extreme factions. So, if they only manage to do little, but yet succeed in persuading Americans that continued jobs failure is the fault of government and Democrats, we’re likely to see a totally Republican administration in 2016–legislative and executive. Then, we’ll have to wait another 4 years for Americans to realize the totally private industry strategy is never going to work.

It is not likely Americans will get much satisfaction for the foreseeable future, regrettably.


Pipe Dreams: How Many Jobs Will Be Created By Keystone XL?

 The Cost of Bank Regulation:
A Review of the Evidence

The Cost of New Banking Regulation: $70.2 Billion:

War with China or War with Inequality?

War with China or War with Inequality?
November 14, 2014
What are the most important of the challenges facing our country and the world? Answering this question as citizens is important, because how we view the priorities determines where our government energy, time and money will be spent. Priorities have a great bearing on how the country and the world evolve. Is preparing for war with China a high priority? Or, is rising inequality right here at home more dangerous?
There are two articles in today’s Foreign Policy magazine, each defending one of these polar positions. The first is forecasting an upcoming war between the US and China. 

The author is Michael Pillsbury, a former defense official under Reagan and Bush and now a Fellow at the Hudson Institute, a conservative think tank.  

The second argues that growing inequality in the US is a greater risk to us than Ebola, Isis, Russia, or a number of other geopolitical troubles brewing around the world. It is written by David Rothkopf, Editor of the FP Group and Visiting Scholar at the Carnegie Endowment for International Peace.

Pillsbury’s and articles of this the kind promote fear and raise the (very remote) possibility of armed conflict with China (or with some other foreign actor, such as Isis. He claims to have a lot of input from military sources on both sides of the Pacific. But perhaps he has not spent enough time looking at economic, environmental and sociological factors, and looking the two countries on a balancing scale. 

What is not addressed in Pillsbury’s article are the more compelling elements of the Chinese situation: the trade interdependency of the US and China; the fact that China has avoided any significant conflicts for more than 50 years and today stands clear of those taking place in the world; the fact that China has at least another 30 years of hard work ahead just to assure the continued sustainable growth of its country, without the cost of conflict. This is the view of Lee Kuan Yew of Singapore and many scholars. Those challenges include the environment (water, pollution, etc.), human rights, 300 million still living in poverty, raising the PPP per capita living standards of the population, finding jobs for tens of millions of new entrants annually, etc., etc., etc. For more on the US/China comparison, please see my post “What China Needs,” August 2014, and especially, “The China Threat,” May 2014.
If military strength was the only factor, consider than we spend more than $600 billion annually on defense, while China spends about $100 billion. But in addition, our economy is far stronger. Measured in PPP$ per capita, it will take many decades at current growth rates for China to even come close to our standard of living. They have unfriendly neighbors and we have oceans, friendly neighbors, and strong alliances. The balance is overwhelmingly in our favor, and China understands that. They are not about to start a war. Pillsbury may have spent too much time listening to military officials, on both sides.
I believe Pillsbury has also taken liberties in citing Henry Kissinger, as if to imply Kissinger also expects war with China. Read Kissinger’s article on the same subject cited below, written in the same year as the book Pillsbury refers to. You’ll see a thoughtful explanation of interdependency, and no indication Kissinger expects China to pick a war with the US–just a call for greater cooperation between two great countries. The title of the article is “Avoiding a US-China Cold War.”
What the author has correct is that Chinese leadership is smart.  They are too smart to sacrifice their potential for sharing in future world leadership by costly mistakes of war such as they have witnessed the US make across the last few decades. They know war could set Chinese growth back decades. They see the benefits of the cover the US provides on the global stage, while China is free to deal with its challenges and focus on sustaining an amazing job of building their economy. Contrary to Pillsbury’s recommendation, we should do nothing to undermine or weaken China. It is in our best interest to invite China to share world leadership with us.  It’s both a moral obligation for us as citizens of the world and citizens of the still leader of the world, and it is also a practical and economic necessity.
There are daily articles from the hawkish right, appealing to Americans to be concerned about a variety of foreign actors. But how many are balanced, put into context, and how many are attempts to distract us with nationalistic fervor—a tactic Vladimir Putin is using effectively to stoke his popularity in Russia? And, I dare say a tactic Republicans used to advantage in the recent election. Such distraction gives the Right more time to delay addressing partisan issues with real impact, like proposing the specifics of a better health care plan, immigration reform, equal education and infrastructure upgrades.
If you believe our greatest risks are military, e.g., Isis, Russia, or China, then you may want more money and energy spent on preparing for war. If you believe, as I do, that there is little threat to the US from these forces and that enhanced diplomacy and cooperation with Iran, Russia, and China is a better route to world peace, you may agree with Rothkopf, as I do—we have greater problems right here in our backyard.
Rothkopf explains, “…the top one-tenth of 1 percent of America’s population is about to achieve a level of wealth equivalent to that of the bottom 90 percent. That’s just over 300,000 people with holdings equal to that of some 280 million. Those wealthy few will control 22 percent of the wealth. The bottom 90 percent, everybody essentially, will also have 22 percent. This in turn means that the top 10 percent of the U.S. population will control 78 percent of America’s wealth. Almost eight out of every 10 dollars of net worth.”

What are the ramifications of this continuing progression of inequality? Why is it so serious as to trump Isis, the Ukraine, Ebola, and other foreign turmoil?
First, who can argue that foreign turmoil is entirely our problem to resolve, or that our attempts to do so will not make matters worse? And, who can really argue ISIS, Russia, or China will be in your neighborhood (militarily) anytime soon? It’s entirely ridiculous to think so. On the other hand, who can deny that our lives are seriously adversely affected by rising inequality, every day?
If you’re in the less wealthy segment of the population, you’ve probably seen the children of the wealthy going to private schools which are gateways to Ivy League universities, while your children are stuck with public schools which are losing funding year by year. Someone in your family has probably experienced one of the various effects of loss of job prospects or job security, and also the challenge of making ends meet when there is no wage increase year after year.  If you have a disadvantage (very poor family, a handicap, skin color, or other non-WASP attribute, medical problems, etc.), then you have probably found your career prospects and the social support system, continuously weakening. Most of us have seen the progression of the impact of money—e.g., gated communities, fancy cars, private jets, political influence, getting children of the wealthy into the best universities and the best clubs and jobs. This diminishes the advantage and opportunity for true merit which is not supported by money.
Michael Lewis (Flash Boys, etc.) has an article in the New Republic in which he reports on studies done in the Psychology and Sociology Departments of major institutions like UC Berkeley, Harvard, and at the New York Psychiatric Institute. Such studies seek to determine behavior differences between the wealthy and the poor. A variety of studies have shown strong correlation of wealth with selfish and un-generous behavior. E.g, drivers of very expensive cars repeatedly failed to stop for pedestrians in a crosswalk, while drivers of cheap cars stopped. Such studies led to tentative conclusions that there is something about acquiring wealth which causes many people to become more selfish and less sensitive to others.

These conclusions are a reminder that many of the wealthy may find the impact of wealth on their fulfillment in this life is not as they hope, and that supporting a more egalitarian outcome yields much greater satisfaction. There are other studies of an economic nature (see previous posts) which find that above a certain level of inequality, the motivational benefits of incentives are outweighed by the cost of inequality in slowing economic growth—yet another way in which inequality is bad for all, even the wealthy.

It is not a matter of turning a blind eye to risks from foreign actors.  Some of these are real and must be addressed. It is a matter of priorities. Do we want to put our greatest priority on the likes of weakening or fighting China, or would we like our officials to focus on how to reverse the growing inequality right here at home, now? An increase of a few percentage points in taxes on the wealthy would be a good start—let’s take half the proceeds and reduce the debt and half for schools and infrastructure. That benefits everyone. And it doesn’t even have to involve more taxes. We could redistribute what we waste—e.g., agricultural subsidies, military equipment waste, duplicate programs (e.g., consolidate 73 federal programs dealing with support for our poor).  There is enormous opportunity to reduce the cost of government, without taking it from our underprivileged.
There is another problem for US caused by inequality. Our changing life style and ideology negatively influences some of the developments in global turmoil. The USA once had a deserved global image of egalitarianism. Now, we find our democracy saddled with gridlock and partisan politics, with a rising level on inequality, which has reached the peak level of the early part of this century. Decades of improvement in the middle of the century have been destroyed. Wealth controls our politics.  Television and the internet make it clear to the world that we no longer have the best system.

Our image in Russia, Syria, China, and throughout the world, has been diminished by our intrusion in foreign wars, our partisan gridlock, and by our steady advance toward plutocracy. We are no longer an unquestioned example of why others should want democracy and capitalism—at least our version of it.  Enhanced technology (TV, social media) make our behavior highly visible to the world. Disdain and resentment enhance the campaigns of foreign actors seeking to punish us. A fairer USA, moving to restore an egalitarian democratic nation, will certainly weaken the denunciations and the vitriol of extremist foreign actors.

Inequality comes in a wide variety of forms. We see it everyday. It’s in the lack of affordable housing for unskilled workers. It’s in the proposals for raising the minimum wage. It’s at the crosswalk, at the cash register, at the kitchen table in the struggle over how to make ends meet. In my neighborhood, it’s the cleaning ladies observing the lavish lifestyle of those they serve, when they can’t even afford healthy food for their kids. Here in San Francisco, we see it in the homeless, dragging their belongings with winter approaching, while we zip by in our heated cars.
I do not argue that we are close to a revolution, but we are moving dangerously close to a plutocracy—where the government of a country is essentially ruled by the wealthy elite. We risk increasing social unrest, much greater than the Occupy movement. It has turned ugly in many other countries in recent years, and it could happen here. While we’re certainly not sure we can make a difference that’s sustainable in Iraq or Syria, we certainly can do so here, if we make this our priority.  With its many dimensions, inequality is the defining issue of our times.

“China and the United States Are Preparing for War:”  
“Is Inequality a Bigger Threat than the Islamic State?”
Billionaires: Reflections on the Upper Crust by Darrell M. West (Brookings)
Extreme Wealth is Bad for Everyone—Especially the Wealthy:

Election Results–It’s About Government

Election Resuts–It’s About Government
November 7, 2014

Huffington Post Headline. This pretty much sums it up for us Democrats. We suffered a big defeat. Congratulations to the Republicans.  Congratulations for their effective campaign. I wish all of us the best under their next two years controlling Congress, but honestly, I’m not expecting much. And I can’t sincerely congratulate Republicans for their ideology or the substance of their campaigns.

In the press conferences by McConnell, Boehner, and others, there was a frustrating litany of statements claiming “the American people have shown that:”

  • They want the Affordable Care Act (Obamacare) repealed
  • They want the Keystone pipeline
  • They do not want immigration reform
  • And, a number of other things claimed to be what the American people have shown by this election

None of these were on the ballots. The American people have in no way sent these messages to Congress and the President. I am an American. I do not favor repeal of the ACA, unless we replace it with a single payer system operated by the government, something far from the Republican wish list. If the election was a mandate against Obamacare, was the 2012 re-election of Obama a mandate for Obamacare?

And the constant theme that the American people are calling for change! “Change I intend to deliver,” says McConnell. Never mind the 30 years I have already served in Congress and didn’t manage to effect change. Exactly what change is it that you’re referring to, Mitch?

Even the President’s interpretation of the message, “get stuff done,” is not helpful. This is what both parties have been parroting, both claiming the other party is the obstacle. Reference is made to the fact that only 185 laws have been enacted by this Congress, the lowest number in decades.

But Obama has vetoed only 2 bills in 6 years. Bush vetoed 12. And, it is not true that the problem is an unusual number of bills passed by the Republican House but blocked from vote by the Democratic Senate. The Washington Post uses GovTrac data showing there have been a number of prior Congress’s with more unaddressed bills backed up. And does anyone really believe that if a few hundred bills do get approved by this new Republican Congress and the President, definite proof of “getting stuff done,” Americans will be happy?  Not necessarily.  Doubtful. It would be an insult to American intelligence and diversity to believe this would make a dent in Americans desire for “change.”  True change is going to require approval of hotly contested proposals, which is not likely. Compromise on the pipeline, foreign trade, and campus sexual assaults will not solve the problems weighing on Americans.  On the important stuff which might effect change, the parties are more divided than ever before.

So much rhetoric (“Change and Reform”), so little specificity as to exactly what is meant by those catch-all words. For example, I want serious attention to equal opportunity and inequality. Others wants the Keystone pipeline. Other voters want legalized marijuana. I favor increased taxes on the wealthy and those with high incomes, provided we use the proceeds for the improvements I favor. Many others favor reduced taxes on the wealthy. So what “change” or “reform” is the politician referring to? I resent any politician claiming to know what I want, worse yet that we all want the same thing. I want leaders with the judgment to propose specifics, with the courage to come out from behind meaningless phrases.

So, what do we, the American people, mean in terms of wanting change or for things to get better? Is there any universal message from our highly diverse electorate? One likely near universal demand is about jobs. How can that be the issue? Unemployment has declined significantly (now under 6%, down from 10% in 2008).  We have added jobs at a rate above 200,000 for a number of months now, with 2014 YTD up 17% from 2013, and 2014 representing the largest jobs increase in 15 years. The economy is growing steadily (3.1% GDP growth in 2014’s 3rd quarter, up from a low of -4.9% when Obama inherited the economy from Bush, and close to  the 3.24 average growth since 1948). That’s pretty good economic accomplishment and pretty good jobs growth.  

In fact, Obama has not been unfriendly to business. The Economist reports that the tax code expanded by 50% under Reagan and G.H.W. Bush and only 10% under Obama. Corporate non-financial taxes paid were 32% under Reagan and are only 25% under Obama. Corporate profits are at record highs.

If so much progress has been made in the economy and in jobs, why so much concern about jobs? Why did the Democrats get thrown out? A good guess is that while corporate profits are at record levels, available jobs pay less than before, new skills are needed to achieve decent pay, there has been no wage growth for the middle class and lower, and there is substantially more risk in employment in recent decades than before. Unemployment rates do not capture those who have simply given up, nor does it count those who took lower paying jobs while still hoping for better–there are lots of these nowadays. We have 50% more people in part time jobs on an “involuntary” basis–they want full time work, but can’t find it.  That’s 7 million people. There is also more risk of getting laid off or fired without protection. Plus, our ideology of equal opportunity is fading.  The wealthy are sending their kids to private schools, gateways to the most prestigious colleges, and the funding of public schools is declining. 2/3 of Americans in 2014 feel their children will be worse off than their parents. These aspects of work life and opportunity for the middle class and below did not originate under Obama. This has been growing since around 1980.

The Republicans won largely on the basis of criticizing everything about President Obama and the government, always underscored by the popular messages of reducing taxes and getting “over-reaching” government out of local and personal affairs in which they have no business. There were no specific positive proposals for what they would do differently. Republicans have done an amazingly good job of convincing many who are hurt by their policies, that their little defined policies will solve the problems–will improve the jobs situation. How? By restraining immigration? By removing regulations on businesses? By building the Keystone pipeline? If that’s it, the results will fall far short of American expectations.

It does seem that what “the American people” most want is for government to fix the jobs problem. Fixing this problem will mean increasing economic growth. That’s the one thing the right and the left can agree on. Economic growth is critical for increased jobs prospects. But that might be where it stops for the Conservatives–i.e., reducing regulation and giving companies more “flexibility” as it is called, regarding employment. Translation: Less protection for workers. That plus more foreign trade, more “open borders” for underdeveloped foreign countries–a prescription that has generally not inured to the benefit of those countries, but has benefitted big global industry.

If we can’t even agree on fiscal stimulus dedicated to our vast aging infrastructure, we won’t be able to do much to stimulate growth. With no fiscal help, the Federal Reserve has done about as much as it can. Growth is already pretty strong, and that hasn’t solved the wage and safety problems of workers. Growth alone is not enough. This period of stagnant wage growth for our workers has been the case for a long time, during cyclical periods of both stronger and weaker growth. Fixing jobs is going to involve significant and effective investment in public education and new methods of assisting with job training. And it is going to require some rebalancing of the power of industry vs. the protections and power of labor, because capitalism left uncontrolled has insufficient motivation to protect the workers–except for the “C Class” workers, of course. The median pay of S&P CEO’s is up 43% since 2009, while median household income has declined by 3%.

I think we can help reduce this “jobs” frustration with some gradual redistribution. To some extent, the protest is about inequality, which has risen to historic highs. I am personally in favor of higher taxes on the wealthy and using the revenues to pay for some of these critical needs. I have said before that I will give up my social security and my mortgage deduction if we do that in a fair and progressive way, across the board.

What should we expect of our lawmakers? I don’t expect them to read my mind or to provide only for my needs. They need to listen to all the voters who care enough to express themselves. They will certainly get a lot of conflicting requests. We’re trying to elect wise and intelligent leaders who can take all of that and use their own judgment to pursue things which are in the long term best interest of citizens–all citizens. And, we expect them to do their best to assure the effective management of government. I don’t expect to agree with all they do, but I will certainly push and vote for what I believe is the right general direction.

But I imagine at any town hall meeting these days, the major complaint has to do with jobs–good jobs, good wages, job security. Republicans claim the obstacle is government–get government out of it–the private sector will then flourish and good jobs will be plentiful.  I agree some regulations on government should be eliminated or streamlined, but I strongly disagree that the private sector left alone will solve the problem. Government has to play a strong role.

There are two problems with our government being able to provide the major fix regarding jobs. The first problem is that government is incredibly difficult to manage. The second problem is that the Conservative view of a very small government does not provide for the actions and services needed to fix the problem.

On the difficulty of government (regardless of which party is in power), consider this summary statement by George Bridgeland (Assistant to George W. Bush) and Peter Orszag (Director of the Office of Management and Budget under Barack Obama): “Based on our rough calculations, less than $1 out of every $100 of government spending is backed by even the most basic evidence that the money is being spent wisely.” They studied professional evaluations of government programs and found that the federal government — “where spending decisions are largely based on good intentions, inertia, hunches, partisan politics, and personal relationships — is not effective, compared to industry. “

There are many reasons government is hard to manage. The Brookings Institution hosted a discussion on Halloween 2014 with authors of two recent books on government–one calling for more government and the other finding fault with government. Here is the introduction Brookings provides:” In We Are Better Than This: How Government Should Spend Our Money (Oxford University Press, Oct 2014), Edward Kleinbard reframes US budget debates and finds that short-sighted decisions to starve government can be ultimately detrimental to citizens’ happiness, health, and wealth.  In Why Government Fails So Often: And How It Can Do Better (Princeton University Press, March 2014), Peter Schuck considers why the federal government is in disrepute and argues that Washington’s failures are not due to episodic problems or partisan bickering, but to structural flaws that undermine every administration.”

And, I would add that there are also structural changes underlying the jobs problem. Primarily, these are associated with advancing globalization (e.g., outsourcing), technology (e.g., robotics), and environment (e.g., moves toward clean energy). These changes impact jobs and will require new solutions

Just consider this: The House Budget Committee has identified 93 separate anti-poverty programs administered by the US Federal Government, many overlapping and terribly inefficient in the aggregate. Even as one in favor of federal government anti-poverty engagement, I would certainly join the Conservatives in wanting this melange to be substantially reduced, streamlined, re-organized, consolidated where possible. So, I’d be aggressively in favor of management change and administrative cost reduction, but probably not in favor of less budget directed to the poor.

Schuck finds these six categories of problems in democratic management of government: Elected officials goals are not consistent with those electing them–they are pushed to offer short term benefits and hide long term costs; information is hard to obtain and interpret and changes in Congress are frequent, changing the direction of government entities; officials routinely underestimate the impact of markets and the actions necessary to control them; social engineering schemes are cumbersome and officials and interest groups push them in different directions; law has been extended way too far into minutiae, making it impossible to effectively manage; then the size issue–layers of bureaucracy, poorly paid and politically appointed managers, restrictions on ability to fire and discipline, vast amounts of work contracted out with loss of control, etc. Our government reflects the world’s largest economy, our diverse population, our undertaking to protect our citizens, and to some extent to protect the world.

On the other hand, Kleinbard argues for more government. But he asks for only 2% more GDP, dedicated to such things as improved equal education opportunity. He points out that our health care system costs us 18% of GDP, while the next most expensive developed country system costs less than 10% of GDP, all being one form or another of single payer systems–operated by governments–something the conservatives do not want to see here. Obamacare is not a new health care system. It’s just a structure that has been placed on top of a private insurance system that we have had for decades. It’s just an enhancement providing for a certain amount of redistribution or protection for the elderly and unhealthy of us–folks private insurance would not otherwise insure at rates they could afford. 

Kleinbard reports that discretionary government spending (as he defines it) under Reagan amounted to 10% of GDP, whereas under Obama it has been under 4.5%, so in that sense, government spending has not increased, provided we agree that it is appropriate to measure spending as a percentage of GDP, not in absolute dollars. 

Both of these authors/scholars of government agree that Americans are misguided if they fall prey to arguments that taxes simply should be reduced. The first question Americans should ask is what services we want from our government, and then figure out whether the answer dictates more or less taxes. Some people see social security and medicare as examples of bloated government. They are really insurance programs designed to deal with the fundamentally risky nature of our lives here–and both the above authors think these are examples of good government. Some Americans have been quoted as demanding, “don’t let the government dare touch my social security or my medicare,” as if to suggest these are not government programs, but certainly suggesting they are valuable. Indeed, neither party has shown the courage to attack these. Even the Conservatives recognize that would be political suicide.

There is certainly much that should be done to improve government–programs which should be discontinued, laws and regulations that are out of date and ineffective, and entire activities government should not be involved in. Scholars of government have argued for sunsetting every government program after say 15 years–put it up for examination and a new vote. But re-engineering government is a herculean task that no President or Congress in the last 50 years has been up to.

The second problem is that Conservatives do not want government to do much more than its original role–defense and rule of law. Even health care and education are at risk to Conservative agenda. Republicans have not been courageous enough to say what they would offer to replace the ACA, but Paul Ryan has suggested a move toward private industry to handle education, through vouchers. Private industry has not been effective in dealing with issues like affordable housing. Who believes leaving civil rights to private industry will suffice? 

Conservatives have succeeded at the ballot box by continuously proposing reduced taxes, without explaining what services will be cut. Kleinbard likens this to a doctor asking an elective surgery patient, “how much pain would you like?” before asking “what benefits are you seeking to obtain from the surgery?” Without the benefit, the answer will always be, “not very much, please.”

At the root of all this are deep seated ideological differences. Are we a bunch of individuals, or are we a collective society with the willingness to look out for each other? Both views have value, both have a place. I’m just hoping for a little more of the collective recognition, given our 30 years of drift in the other direction. I don’t believe our individual fates are entirely determined by our own merits. 

For these reasons, I’m not very optimistic for the near term.  Government has to fix the problems and Republicans don’t like government. I’ll vote for any Republican who is able to find ways to effectively streamline government, remove activities we don’t need, simplify burdensome regulation, streamline the tax code, etc. But, fixing the “jobs problem” is not something private industry alone can fix–it’s going to require government intervention and investment. Government is often inefficient, but the alternative is worse. And government does not appear to be something the Republicans are prepared to engage in. 

Postscript See Brookings Inst. Article Nov 10, 2014: “Yes, the Jobless Rate Fell. Here’s Why Americans Are Still Gloomy.”

history of bills unaddressed by Congress:
History of bills passed by Congress:
Orzag and Bridgeland:
Berkowitz review of Schuck’s explanation of the weaknesses of government:
The economy under Obama:
Part time worker count: