At a Minimum

In the late eighteenth century representative democracy seemed like a fine idea. We had our revolution. The French had theirs. Others would follow. There would be no more kings. It was the Age of Reason – the people could reason out what their government should be doing and what it should never do. And it would be their government. They’d elect representatives to enact laws and a chief executive to execute them. These representatives might argue quite a bit – they’d represent different constituencies with quite specific interests – but they’d work things out. Reason would prevail. That was the general idea.

Things didn’t work out that way. Shortly after their revolution the French ended up with Robespierre and his Reign of Terror – mass executions of “enemies of the revolution” and that Committee of Public Safety and all the rest – something our Joe McCarthy would have loved. In 1794, Robespierre himself was executed. The French had had enough of that nonsense – but the reaction to that led to Napoleon. He brought order but he didn’t want to be the King of France, he wanted to be the Emperor of everything – and he came close – and then he was gone. It was time to try again. The French had to keep trying to work out this representative democracy thing with one Republic after another. The constitution of the Fifth Republic was approved by referendum in 1958 – this one strengthened the authority of the executive in relation to parliament. That’s the one they have now, for now. They’re still working on this.

We didn’t have these problems. We made one change. On March 4, 1789, the Articles of Confederation – establishing a loose union of sovereign nations, which included actual nation-states like Connecticut and Rhode Island – was replaced by the Constitution – taking nationhood away from these individual states and granting it to a new entity. We established clear rules and procedures that applied to all parties concerned – and that was that – done.

We did fight a Civil War over that. In his Gettysburg Address, Lincoln couldn’t have been any clearer about what was really going on – this war was “a test of whether that nation or any nation so conceived and so dedicated can long endure” – or whether we’d go back to a loose union of sovereign nations. The Civil War settled that matter. Most Republicans – the states’ rights crowd – profoundly disagree with the founder of their party on this matter, but they settle for nibbling at the edges. Each state should be allowed to say which of its citizens have the right to marry each other and which don’t have that right and never will – that sort of thing. A single military defending us all is pretty cool. One currency for everyone works well too. The FAA keeps airliners from crashing into each other. That’s fine. They’ll argue the small stuff – each state getting to decide which citizens will find it easy to vote and which may never be able to cast a ballot ever again, or each state getting to decide whether their public schools can toss out all the science books and use the Bible instead, or whether any woman seeking an abortion in their state needs to get a permission slip from a responsible male adult.

Wait – that might not be the small stuff – but really, these people don’t want the 1789 version of the United States to go away. They just have different views about what our government should be doing and what it should never do. There’s Obamacare. There’s Dodd-Frank. The government has no business setting national standards for health insurance and then forcing everyone to obtain such insurance, one way or another, or pay a fine. What about freedom? The government also has no business establishing new rules about what the financial industry can and cannot do. The markets will regulate themselves – because it’s in their interest to do so – and new rules will kill any chance of economic growth. Still, they don’t want to abolish the federal government. They just want it to not do certain things, and do other things – to regulate sexual and personal behavior and such. All our arguments have been about the hypothetical appropriate actions of the government we’ve had in place for a long time, and except for a few amendments, that we’ve never changed. We’re not French.

Our Republicans are rather good at this sort of thing, talking about what is hypothetically appropriate. Our Democrats don’t often deal in theory. They’re concerned with fixing immediate problems – but now and then one comes along who shakes things up, who questions some basic assumptions. Jim Tankersley reports that Bernie Sanders is one of those:

There are very few unspoken rules among major-party candidates for president, and Bernie Sanders is breaking one of them. He’s saying that America’s leaders shouldn’t worry so much about economic growth if that growth serves to enrich only the wealthiest Americans.

“Our economic goals have to be redistributing a significant amount of [wealth] back from the top one percent,” Sanders said in a recent interview, even if that redistribution slows the economy overall.

“Unchecked growth – especially when 99 percent of all new income goes to the top 1 percent – is absurd,” he said. “Where we’ve got to move is not growth for the sake of growth, but we’ve got to move to a society that provides a high quality of life for all of our people. In other words, if people have health care as a right, as do the people of every other major country, then there’s less worry about growth. If people have educational opportunity and their kids can go to college and they have child care, then there’s less worry about growth for the sake of growth.”

Is he allowed to say that? This shocked people:

Sanders’s position inverts decades of orthodoxy among liberal and conservative candidates alike, by prizing redistribution above all else. It taps into the mounting frustration in America, particularly among more liberal voters, with the widening gap between the rich and everyone else.

It is this kind of unorthodoxy that has helped galvanize liberal voters in New Hampshire and Iowa and elevate Sanders in early polls. It is also represents a sharp challenge to front-runner Hillary Rodham Clinton, who wants to maintain broad appeal even as she expands her support among liberal Democrats.

Everyone wants to grow the economy. Why? There are more important things. This guy senses the mood of the country, although this is still a risky thing to say:

“Even FDR wouldn’t have said that, in the depths of the Depression,” said Rick Ridder, a Denver-based political consultant who has worked on several Democratic presidential campaigns stretching back decades. But he added: “It’s not as dangerous [to say] as it might have been in the 1970s or 1960s right now, because income inequality is so great, and growing.”

Heather Boushey, a liberal economist who has discussed policy informally with Clinton, and who runs the Washington Center for Equitable Growth think tank, argues that it is not politically wise to play down the need for economic growth.

“If you don’t grow, then you really have to just take from someone and give it to somebody else. That’s a tough place to start,” she said. “You’re setting yourself up for some tough conversations that go not just against politics, but also human nature.”

Bernie Sanders doesn’t care, and goes further:

Sanders says the environment is worth taking into account in reconsidering whether economic growth should be the top priority. “When we look at climate change and other environmental issues, growth for the sake of growth – especially when 99 percent of all new income generated by that growth goes to the top one percent – becomes less significant,” he said.

And he pushes back:

Many economists, particularly conservatives, warn that restricting trade and adding new regulations to the labor market would crimp economic efficiency and slow growth.

Sanders rejects that argument. “By efficiency, many conservative economists mean, ‘the best way for large corporations to make excessive profits,'” he said, adding: “They’re efficient for the people who own the corporations. They’re not particularly efficient for the people who have been thrown out on the street.”

“So if you’re talking about maximizing corporate profits that’s not what I think the economy should be about.”

What should the economy be about? Two can play at that game, and Paul Krugman does much the same thing:

Hillary Clinton gave her first big economic speech on Monday, and progressives were by and large gratified. For Mrs. Clinton’s core message was that the federal government can and should use its influence to push for higher wages.

Conservatives, however – at least those who could stop chanting “Benghazi! Benghazi! Benghazi!” long enough to pay attention – seemed bemused. They believe that Ronald Reagan proved that government is the problem, not the solution. So wasn’t Mrs. Clinton just reviving defunct “paleoliberalism”? And don’t we know that government intervention in markets produces terrible side effects?

No, she wasn’t, and no, we don’t. In fact, Mrs. Clinton’s speech reflected major changes, deeply grounded in evidence, in our understanding of what determines wages. And a key implication of that new understanding is that public policy can do a lot to help workers without bringing down the wrath of the invisible hand.

That’s unlikely:

Many economists used to think of the labor market as being pretty much like the market for anything else, with the prices of different kinds of labor – that is, wage rates – fully determined by supply and demand. So if wages for many workers have stagnated or declined, it must be because demand for their services is falling. In particular, the conventional wisdom attributed rising inequality to technological change, which was raising the demand for highly educated workers while devaluing blue-collar work. And there was nothing much policy could do to change the trend, other than aiding low-wage workers via subsidies like the earned-income tax credit.

You still see commentators who haven’t kept up invoking this story as if it were obviously true. But the case for “skill-biased technological change” as the main driver of wage stagnation has largely fallen apart. Most notably, high levels of education have offered no guarantee of rising incomes — for example, wages of recent college graduates, adjusted for inflation, have been flat for 15 years.

Meanwhile, our understanding of wage determination has been transformed by an intellectual revolution – that’s not too strong a word – brought on by a series of remarkable studies of what happens when governments change the minimum wage.

He goes on to discuss those studies, but it comes down to this:

There’s just no evidence that raising the minimum wage costs jobs, at least when the starting point is as low as it is in modern America.

How can this be? There are several answers, but the most important is probably that the market for labor isn’t like the market for, say, wheat, because workers are people. And because they’re people, there are important benefits, even to the employer, from paying them more – better morale, lower turnover, increased productivity. These benefits largely offset the direct effect of higher labor costs, so that raising the minimum wage needn’t cost jobs after all.

The government could be useful here too:

Employers always face a trade-off between low-wage and higher-wage strategies – between, say, the traditional Walmart model of paying as little as possible and accepting high turnover and low morale, and the Costco model of higher pay and benefits leading to a more stable work force. And there’s every reason to believe that public policy can, in a variety of ways – including making it easier for workers to organize – encourage more firms to choose the good-wage strategy.

So there was a lot more behind Hillary’s speech than I suspect most commentators realized. And for those trying to play gotcha by pointing out that some of what she said differed from ideas that prevailed when her husband was president, well, many liberals have changed their views in response to new evidence. It’s an interesting experience; conservatives should try it some time.

And Ed Kilgore adds this:

There you have it: there are low and high roads to economic growth (and as Bernie Sanders says, things that are more important than growth, too), and one road leads to a growing middle class while the other road leads to Mississippi. Which makes for a better society? Scott Walker really does not seem to have a clue.

What? What does Scott Walker have to do with any of this? Steve Benen can explain that:

Just a few weeks before his re-election bid, Wisconsin Gov. Scott Walker (R) was asked whether minimum-wage laws should even exist. The Republican governor replied, “Well, I’m not going to repeal it but I don’t think it’s, I don’t think it serves a purpose.”

Seven months later, shortly after kicking off his GOP presidential campaign, Walker went just a little further.

He did, the Washington Post reported this:

Scott Walker appeared to take aim at the national minimum wage on Monday evening, referring to it as one of many “lame ideas” pushed by Democrats.

Walker’s comment came in a lengthy interview with Fox News’s Sean Hannity immediately following a speech formally announcing his entrance into the 2016 presidential race. Walker said the next president needs to speak the language of the industrial Midwest and connect with the working class.

In terms of what our government should do these days, Benen finds Walker way out there:

According to the video, eagerly disseminated by Democratic officials, Walker told the Fox News host, “The left claims that they’re for American workers and they’ve just got just really lame ideas – things like the minimum wage.”

In context, there was nothing to suggest the governor was talking about his opposition to a minimum-wage increase, so much as the existence of the minimum wage itself. To hear Walker tell it, the law is a “lame” benefit for American workers.

It’s a pretty provocative move for a national candidate – increasing the minimum wage is one of the more popular ideas in the country right now, enjoying broad support for a wide range of voters. Just a month ago, a CBS News poll found 71% of Americans want to see the minimum wage go from $7.25 an hour to $10.10 an hour – and that included a majority of self-identified Republican voters.

The Wisconsin governor, meanwhile, appears to support lowering the minimum wage to $0.

But something is up here:

What’s just as interesting is how common this position has become in GOP circles. For decades, the debate was largely limited to those who wanted to raise the minimum wage and those who wanted to leave it unchanged. There were a few folks on the margins opposed to the law itself, but this was a fringe position that few took seriously.

This year, however, a growing number of presidential candidates are practically boasting about their hostility forwards the minimum wage. Former Texas Gov. Rick Perry (R), for example, has suggested getting rid of the minimum altogether, arguing it’s not “the government’s business” to interfere with wages. Sen. Marco Rubio (R-Fla.) has said, plainly, “I don’t think a minimum wage law works.”

Earlier this year, former Florida Gov. Jeb Bush (R), whom some see as a moderate, went so far as to say, “We need to leave it to the private sector. I think state minimum wages are fine. The federal government shouldn’t be doing this.”

Walker clearly wants to be part of the same club. Expect this to be a major issue in the 2016 elections.

Presidential elections are always about what the government should or should not be doing, at a minimum, and Paul Waldman puts this in perspective:

Sixteen years ago, George W. Bush presented to America his vision of “compassionate conservatism,” and in response he received an absolute torrent of glowing articles in the media calling him a “different kind of Republican” – conservative, to be sure, but not so mean about it.

Well those days are long past. In the 2016 GOP primaries, it’s compassionless conservatism that’s in fashion.

Or at least that’s what Scott Walker seems to think, because among other things, he is hell-bent on making sure that anyone who gets food stamps in Wisconsin has to endure the humiliation of submitting to a drug test.

Is that what the government should be doing? Waldman doesn’t think so:

This is why Scott Walker is never going to be president of the United States.

First, some context: The drug testing programs for welfare recipients are usually justified by saying they’ll save money by rooting out all the junkies on the dole, but in practice they’ve been almost comically ineffective. In state after state, testing programs have found that welfare recipients use drugs at lower rates than the general population, finding only a tiny number of welfare recipients who test positive.

But this hasn’t discouraged politicians like Walker… The test is the point, not the result. Walker isn’t trying to solve a practical problem here. He wants to test food stamp recipients as a way of expressing moral condemnation. You can get this benefit, he’s saying, but we want to give you a little humiliation so you know that because you sought the government’s help, we think you’re a rotten person.

That’s not what the government should be doing:

What George W. Bush understood is that the Republican Party is generally considered to be somewhat, well, mean… So when Bush campaigned as a “compassionate conservative” he was sending a message to moderate voters, one that said: See, I’m different, I’m a nice guy. … And Scott Walker’s attitude is nothing like George W. Bush’s.

He practically oozes malice, for anyone and everyone who might oppose him, or just be the wrong kind of person.

To be clear, that will play well with the angry Republican base – if what the government should be doing, at a minimum, is humiliating rotten “lesser” people. If what the government should be doing, at a minimum, is making it easy for corporations to make big money, no matter who gets hurt, and no matter what happens to the environment, so we have amazing growth, then humiliating those totally insignificant little people is kind of beside the point.

Kevin Drum sums up the conflict:

The conventional wisdom about Walker – which I’ve agreed with in the past – is that he’s the candidate best suited to appeal to both the Republican base, thanks to his hardcore meanspiritedness, and to business-class Republicans, thanks to his executive experience and relatively mild demeanor. The problem is that it’s a tricky act to make both of these personas work at the work at the same time, and so far Walker doesn’t even seem to be trying. He’s just sticking with the Mr. Mean persona, and it’s not clear if that’s even enough to win the primaries, let alone get him into the White House.

That sums it up nicely. Unlike the French, who keep revising and rearranging the structure of their representative democracy, we now stick with our 1789 model – we just argue about what our government, at a minimum, should be doing at the moment. We can reason that out. At least that was the general idea. It would be nice if that were true.

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About Alan

The editor is a former systems manager for a large California-based HMO, and a former senior systems manager for Northrop, Hughes-Raytheon, Computer Sciences Corporation, Perot Systems and other such organizations. One position was managing the financial and payroll systems for a large hospital chain. And somewhere in there was a two-year stint in Canada running the systems shop at a General Motors locomotive factory - in London, Ontario. That explains Canadian matters scattered through these pages. Otherwise, think large-scale HR, payroll, financial and manufacturing systems. A résumé is available if you wish. The editor has a graduate degree in Eighteenth-Century British Literature from Duke University where he was a National Woodrow Wilson Fellow, and taught English and music in upstate New York in the seventies, and then in the early eighties moved to California and left teaching. The editor currently resides in Hollywood California, a block north of the Sunset Strip.
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One Response to At a Minimum

  1. Rick says:

    I’ll still vote for Bernie Sanders, but I think he’s off base here:

    “Unchecked growth – especially when 99 percent of all new income goes to the top 1 percent – is absurd,” he said. “Where we’ve got to move is not growth for the sake of growth, but we’ve got to move to a society that provides a high quality of life for all of our people.”

    Two problems I have with this.

    First of all — and I suppose I should really check with Paul Krugman before I say this — I think there’s a reason that just about all economists say economies need to grow, although I’m not sure what it is. I’ve always wondered if an economy really has to grow, but apparently it does.

    I think part of it is that populations grow, and the economy has to keep up with that. After all, what’s an economy for if it doesn’t serve the needs of the people. Another reason may be that, like sharks, economies need to move forward in order to stay alive — and by forward here, we mean upward. The thinking would be that, when economies move, they tend to keep going in that direction, and better they spiral upward than sink into a deflationary spiral.

    I don’t think the idea should be to stop growing the economy because it’s only benefitting the very rich. The idea should be to get more balance, making sure nobody in the economy is cut out of it just because some extremely rich people want too much of the pie.

    But as for laws and regulations hurting growth, I don’t think they do, in spite of what Republicans think. For example, I think it has been demonstrated that regulating pollution output at power plants creates jobs for regulators and engineers, and creating jobs helps the economy with more spending, just as raising the minimum wage puts more spending money in circulation, and areas that do it show growth.

    So Bernie, I intend to vote for you, but only if you stop talking like a Republican.

    Paul Waldman:

    “Scott Walker … is hell-bent on making sure that anyone who gets food stamps in Wisconsin has to endure the humiliation of submitting to a drug test.”

    Something I’d like to see more reporters ask these guys is what studies they’re basing these policies on, and in the process of asking the question, citing all those statistics showing that people on welfare use drugs at a lower rate than the general public.

    Yeah, I know that arguing him only helps him with his base, but don’t forget, he’s also looking for moderates, who might not like hearing that he doesn’t do his homework, or even that he’s apparently trying to be a deliberate dick in his quest for the asshole vote.

    I wonder, hypothetically, were the Supreme Court to rule that any laws along those lines violate the 14th amendment guarantee of equal treatment under the law, if Scott Walker would agree to allow everyone in the country to submit to a drug test, just to make it fair?

    Or would that just cause him to say, “Okay, well, then, never mind!”

    Rick

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