On TAP: Kuttner + Meyerson

February 16, 2018

Our thoughts and prayers. One possibly redeeming consequence of the latest massacre of school children is that the scapegoating of mental illness and the parade of politicians who take NRA money expressing “thoughts and prayers” for dead children and grieving parents are wearing thin.

It’s time to take over the national narrative. These are not “shooters.” They are domestic terrorists. And this is not about balancing gun rights with other rights. It’s about keeping our children safe.

As I suggested the other day in this space discussing cuts in urgently needed social outlay, keeping guns from killing our children is ultimately about the right to life.

Progressives should keep applying that phrase to where it really fits, to the point where it loses all utility to anti-abortion zealots.

What’s the point of protecting the “unborn” when we fail to protect the living?

February 15, 2018

Pelosi, sí. Feinstein, no.

The above sloganeering is my response to an interview with me that was aired as part of a story on NPR’s Morning Edition yesterday. Last week, the redoubtable Ina Jaffe, intrepid NPR veteran, called me to talk about Dianne Feinstein. The reason she called was that I had written an L.A. Times op-ed some months back noting that Feinstein, at 84, is the oldest member of the Senate, and at the time was considering running for another six-year term, which, if she won, would mean she’d be 91.7 years old when that term expired. I noted that would get her in just under the actuarial wire, since the average life expectancy for 84-year-old women is 92. I ended the column by suggesting Feinstein not run—counsel she didn’t take all that seriously, since she declared her candidacy a few days later.

Ina’s piece was focused on the age issue. What I also said in the column and the interview, however, was age wasn’t the main reason why DiFi shouldn’t go one more round. The chief reason was that the California she’s accustomed to representing no longer exists. It’s a far more liberal state than the one Feinstein has long been navigating by positioning herself on the center-right of the Democratic Party.

Unlike most of California’s Democratic congressional delegation, for instance, Feinstein voted to authorize the Iraq War. She was among the small minority of Democratic senators to vote for George W. Bush’s tax cuts for the rich—and those Democrats who also voted for them came from red or purple states, which California, then as now, was not.

Fortunately, Feinstein isn’t going unchallenged. While she has no Republican opponents, the president of the California Senate, Los Angeles Democrat Kevin de Leon, is running against her from the left. One of the three organizers of the massive anti-Proposition 187 demonstration in 1994, which marked the birth of the modern immigrant movement, de Leon is arguably the most accomplished and most progressive state legislative leader in the country. He’s the author of California’s sanctuary state law, of most of its far-reaching climate-change legislation, and last year steered a single-payer bill to passage in the Senate.

The conventional wisdom is that Feinstein is a shoo-in, but just this week, some of the state’s most powerful liberal institutions come election time—SEIU, which has 700,000 members in California, and the California Nurses Association—endorsed de Leon. SEIU and CNA are longtime rivals that seldom agree on anything. That the two most potent political players in California Democratic elections have both come out for de Leon—risking the ire of ostensible shoo-in Feinstein—speaks volumes about where they think the state is headed, and should be headed. Maybe DiFi isn’t a shoo-in after all.

And just to clear up this age business: I think Feinstein’s fellow San Franciscan, House Democratic Leader Nancy Pelosi, who also has drawn criticism for getting long in the tooth, should stay right where she is. Like de Leon, Pelosi is a supremely able legislative leader, without whom Obamacare would never have been enacted, and whose politics are far more in sync with left-moving California than Feinstein’s.

Besides, Pelosi would have to win seven more terms to be as old as Feinstein would be at the end of her next Senate term. Hence:

Nancy, sí. DiFi, no.

February 14, 2018

Ban Entitlements. My friend Drew Westen, author of the classic book on political language, The Political Brain, observes that Republicans run rings around Democrats when it comes to the Orwellian use of political language, and that Democrats often step on their own strengths.

For instance, as Westen observes, Democrats should never, ever use the budgetary term entitlements to describe our two most cherished Democratic programs, Social Security and Medicare. Democrats use the term either because they want to sound like savvy wonks, or out of sheer laziness.
To normal ears, the word has a negative connotation. People who are narcissistic are often described as “entitled.” They are not fun to be around.
Why in the world should we describe an earned, tax-supported, beloved program of social insurance as an “entitlement”? It would be hard to think of a worse term. It sets up the argument that these benefits should be taken away from all those undeserving, entitled people.
The word entitlement is bad enough in the bowels of OMB, but should never be used on the campaign trail. Just plain Medicare and Social Security are recognizable names with very positive voter approval.
I recently heard an otherwise savvy political operative describe conservative voters in a swing district as “pro-life.” No, they’re not. They are anti-reproductive rights. (Is that so hard to remember?)
When the right trains Democrats to unthinkingly use the right’s language, we are in big trouble. Indeed, if you define pro-life as actually helping the living, it’s Democrats who are pro-life.
Maybe we should appropriate the term "pro-life" for any beneficial social outlay and thereby muddle its political value to the right. (What do you mean you want to cut outlays for foster-care, home care, elder care, disability, etc. Aren’t you pro-life?)
Pay close attention to language, Democrats. Voters might be listening. 

February 13, 2018

As the Senate begins its deliberations on DACA, the ICE Deport Anyone Campaign rolls on. On the Prospect home page today, we’ve posted an article by David Bacon on the efforts of California unions to defend immigrants—and not just their own members—from expulsion, and co-published a piece with Capital & Main on the 5,000 DACA recipients in California who are teachers.

In its zeal to meet deportation quotas, ICE has shown complete indifference to such trivialities as whether their detainees have committed serious crimes or are esteemed members of their communities. As a piece in Monday’s Washington Post documented, ICE arrested 37,734 “non-criminals” in 2017, breaking up families and communities in the process.

The closest parallel in American history to ICE’s current expulsion mania is the grim saga of the Fugitive Slave Act. The act, passed by a Southern-dominated Congress in 1850, effectively gave police power to slaveholders and their agents to go into the non-slave states of the North to capture and re-enslave African Americans who’d achieved the status of free men and women by crossing the Mason-Dixon line. Then as now, federal law conscripted the local authorities in Northern states—where the pursued were welcome—to cooperate with the hunters, and on occasion federal forces were sent to help in the apprehensions.

And then as now, the reason that federal forces were sent was that many in those Northern states sought to thwart the slaveholders and the soldiers. African Americans concealed their hunted brothers and sisters, on a couple of occasions overpowering the slaveholders to free them again. State and local governments passed laws forbidding such cooperation, much as California has passed such laws today. Masses of people turned out to protest the seizures, just as rapid response teams do today.

Underpinning both these abysmal episodes in our history is a sectionalized racism. The Fugitive Slave Act effectively imposed Southern slave codes on Northern states that had no desire to enforce them. The ICE raids impose the racism and xenophobia of the worst parts of Trump’s base, disproportionately clustered in heavily white regions home to few if any immigrants, on states like California and New York, where immigrants are not just welcome but an axiom of local life.

In response, a number of local and state governments have offered legal assistance to ICE arrestees and forbidden police cooperation with them, while activists have turned out in the streets and the courts to support the detainees. All necessary actions, but there’s still more that could be done. At least so long as ICE continues to arrest and deport immigrants with no regard for what they’ve done and who they are, ICE agents should be treated as Northerners treated the slaveholder-kidnappers. Sit-down demonstrations obstructing ICE offices seem a good way to start.

February 12, 2018

Can you dig this? Trump’s $1.5 trillion infrastructure plan is another bait and switch. For starters, it’s dead on arrival, since Congress just concluded a two-year budget deal after massive horse-trading. Legislators are not about to reopen negotiations.

It’s bizarre that Trump releases his budget after rather than before this deal. It’s one more sign of his irrelevance.

As for the proposed infrastructure plan, it proposes $200 billion of actual federal spending over a decade. The rest is supposed to be private money, with the idea that a federal match will somehow coax out private investment—at a ratio of 6.5 to one.

But here’s the problem. True investments in public works do not produce private returns. That’s why they have to be public.

For private investors to make money on long term investments in things like better electrical grids, green transition, water and sewer, protections against storm surges and sea level rise, replacement of aging bridges, tunnels and roads, better rail, and so on, investors want large profits.

And there are only three ways to get those profits. You can pass the costs along to taxpayers. Or you can pass the costs along to ratepayers. Or Republicans at the federal and state level can rig the tax code so that massive tax breaks can be offered to private investors.

All of this is more costly and less efficient, as well as less fair, than straight ahead public investment funded by direct government bonds or taxes.

This is dumb, dumb policy, aimed at further enriching the rich and denuding the public realm. And if voters don’t see through it, Trump is smarter than the public.

NPR reported that Democrats will back this scheme because they are so eager to get infrastructure spending. I sure hope that’s wrong. Democrats need to be leading the charge for the real deal, not Trump fakery.

February 9, 2018

When Obama was president, Republicans made a huge deal about deficits bankrupting the country, refusing to adequately fund the recovery program and demanding deep cuts in federal spending. Now that Trump is in, deficits suddenly don’t matter.

The tax cut will add a trillion dollars to the national debt. The budget deal that was recently struck to keep the government open restores both military and some domestic social spending that was cut by Republican congresses during the Obama presidency—adding more deficit.

The deficit, and with it the national debt, is projected to start rising again, after coming down during Obama’s presidency. Deficit hawks are going nuts.

But Democrats should resist the temptation to pile on. Within very broad limits, there is nothing wrong with deficits and public borrowing, so long as money is put to good use. We came out of World War II with a much larger debt ratio—and that ushered in a 30-year boom. Winning that war was a good use of public debt.

A trillion-dollar tax cut for the rich, however, is not good use. Spending that money on infrastructure would be fine, and the time to have done that was while federal borrowing costs (interest rates) were low. Overspending on the military today is not a good use either.

Both Bill Clinton and Barack Obama made the economic and tactical error of making deficit reduction per se a major public issue. They thereby helped Republicans deny government the resources to rebuild America’s public household, and entrenched the conservative idea in the public mind of budget balance equaling fiscal virtue.

Keynes wept!

Deficits are often just what’s needed, and not all deficits are created equal. Fiscally, let’s whack Trump where he deserves to be whacked—for a needless and regressive tax cut. When the Democrats get back in, they will need to double down on public investment. 

February 8, 2018

I have two quite opposite reactions to President Trump’s desire to have his own version of a Red Square Roll-Out-The-Nukes-and-Salute! parade.

The first is to note the absurdity of all this. At a time when even hard power is best measured by a nation’s development of things like quantum computing, our new tanks aren’t really a good measure of our might. More fundamentally, this isn’t really an American tradition, and in its sure-to-be-Trumpified version, it will likely come off as more than a little Graustark, or perhaps Duck Soup, with a chorus singing the Trumpian version of “Hail, Hail, Fredonia.” All in all, given the character of the president, a spectacle both ominous (this moron may actually want to use these weapons) and ridiculous.

My second reaction, though, may well be to hold the ridicule. That is, it’s fine to ridicule Trump, who fairly personifies the ridiculous, but ridiculing the military is something else again. As Andy Levison, our pre-eminent scholar of the white working class, has noted, one defining element of that group’s beliefs is its support for the military. That’s in large part because the military offers working-class Americans a path to doing serious, valued work, in which achievement is rewarded, at a time when few other such options are open to them. To be sure, some of that work goes on in wars that shouldn’t be fought in the first place, but that’s hardly the fault of the enlistees. There’s no reason, in other words, to ridicule them.

So: To the extent that this parade is Trumpified—to the extent that it comes off as a Hail to the Chief sashay, as goose-stepping comes to Mar-a-Lago—then yes, ridicule is required. But ridicule the military (which didn’t ask for this march) and the men and women who fill its ranks? No way.

February 7, 2018

Poor Trump. He brags on the stock market and then the stock market tanks. Now, it’s made up about half of his losses.

I've been waiting for Trump to tweet that Monday’s sickening market slide was the Democrats’ fault. They spooked investors by refusing to approve his wall; or by failing to applaud his State of the Union address; or maybe by threatening his very presidency, the source of everything good in the economy.

Trump is implicated in the wildly gyrating stock market in one respect. Investors have been wary that central banks will spoil the party by raising interest rates. The Republicans claimed that their tax cut will pay for itself, but the nonpartisan Congressional Budget Office calculated that the tax changes will add a trillion dollars to the national debt over a decade. Then came the latest report by the Labor Department, showing that low unemployment is finally spurring some wage growth.

When central bankers see deficits and rising wages, they worry about inflation and they raise interest rates. That’s not good for an overheated stock market.

Liberals can enjoy Trump’s rhetoric getting tripped up by a swooning market. But before they succumb to the temptation to blame it on him, please consider that this is a little tricky.

First, we liberals like full employment and wage growth. We also don’t believe that higher deficits, within broad limits, cause higher interest rates. That’s the result of the Federal Reserve’s inflation obsession, not a fundamental law of economics.

It’s certainly true that Trump’s form of economic stimulus—massive tax cuts for the rich—is about the most inefficient and inequitable form of stimulus one can imagine. It would have been far better to spend that trillion on infrastructure and jobs. We should be whacking Trump for that.

As for the stock market, it will stabilize or decline, depending on the whims of investors and speculators and the perversity of the Fed. The stock market is one more market that’s far from efficient.

Trump is a fraud and a fool, but not every bad thing that happens is his doing. It’s not even clear that having some air come out of an overheated market is all that bad.

February 6, 2018

The last couple days’ stock market swoon has a multitude of causes, not least the inherent instability of markets. One perennial cause for such drops, however, is the fear of inflation, of higher interest rates and tighter credit. Which, in our shareholder-uber-alles form of capitalism, translates into a phobia of rising wages.

By any measure, it’s hard to find very much that could have triggered this fear. In January, wages were reported to be 2.9 percent higher than they were the previous January, which, however, was the highest such increase in several years. As my colleague Justin Miller has noted, much of that increase was the result of January 1 statutory hikes in the minimum wage in roughly a dozen states. More generally, however, wages have been piddling along for the past 40 years, while capital income has ballooned.

As America has never bred many Marxists, the belief that capital and labor are inherently in conflict has never gotten much purchase here. During the three decades after World War II, the power of unions and of New Deal institutions yielded a broadly shared prosperity. That was supplanted during the past four decades, however, by a return to what looks—grimly—like a more normal capitalist order, in which capital and labor are indeed counter-posed, with capital coming out on top. I doubt you’ll find many Marxists among the institutional investors, much less the algorithms, that have tanked the market in recent days, but they sure seem to subscribe to the capital vs. labor formulations: If wages rise, their rate of capital return may slow to just three or four times the rate of wage increases. Pity.

February 5, 2018

The stock market is plummeting, with the Dow losing well over a thousand points in three trading days. What’s at work?

For starters, the market has been rising at a completely unsustainable rate, driven by low interest rates, stock buybacks, high corporate profits, and investor expectations of even dizzier heights. At some point, it had to come down to earth, even with the pro-corporate tax-cuts.

In addition, the declining unemployment rate has been translating into (modest, long-overdue) increases in workers’ wages. This tends to spook markets, not just because bosses don’t like giving workers pay increases (true, but oversimplified), but also because central bankers tend to worry excessively about inflation.

If low unemployment causes workers to command higher pay, and employers don’t take the cost out of profits but pass it along in the form of higher prices, inflation ensues. Projected inflation rates are still very low by historical standards—with global trade, weakened unions, and the gig economy, workers just don’t have that much bargaining power, even at 4 percent unemployment rates.

Even so, investors correctly worry that myopic central bankers will tighten money at the slightest sign of inflation. And tighter money means slower growth and higher returns in the bond market, both of which are bad for stocks. So investors, having enjoyed average gains of more than 20 percent over the past year, head for the exits.

So, is this the big one: the end of a steadily rising bull market in stocks that is now in its ninth year, the second-longest one on record? (If I knew the answer to that, I would not be writing this post; I’d be in the south of France.)

Whether this is a momentary glitch, or the beginning of a long-awaited “correction” in stock prices of 20 percent or more, depends on whether most investors decide to be prudent rather than greedy, or whether a majority of investors think the market will keep going up.

But one thing is clear. Central bankers have an unfortunate habit of needlessly choking off recoveries due to excess inflation phobia. If investors expect central banks to run true to form, the market is likely to keep declining and the great, post-collapse bull market could be over.