Race in the Age of Obama and the Economic Recovery

We as a nation are at a critical juncture—we are working to re-shape America’s role in the 21st century global economy, and to create the jobs and the infrastructure that will help us create equal opportunities for success for all Americans. At the same time, we are living in a moment where our traditional notions of race and how we talk about it are changing. One question keeps coming up: with an African-American President leading our country, do we still need to think about and create solutions for historic barriers to opportunity? The answer? Absolutely.

As we reflect on our first year under Team Obama, and on the one-year anniversary of the historic American Reinvestment and Recovery Act, also known as the stimulus, our goals must be clear: we need to ensure that all Americans have access to the education, training, and jobs they need to succeed; and we must make every effort to bring opportunity to communities that were already hurting before the economic crisis. Historically, the groups who’ve been hurting the most are communities of color and women. Unfortunately, we’ve seen time and time again that access to full and equal opportunity is very much a mixed reality, and these groups are being left behind in ways that hard work and personal achievement alone cannot address.

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Thoughts On Cost

Money is a means to an end. To believe that it is an end unto itself is to ignore the greater values that his country is capable of standing upon. Some policies cost money; others cost lives. That ethos, I believe, is at the heart of the progressive movement.

The Most Rev. Rowan Williams, the Archbishop of Canterbury and titular leader of the world’s third largest Christian denomination (my own, the Anglican Communion), has an essay about finance and economics in the upcoming issue of Newsweek. I am particularly struck by this paragraph:

We must hang on to the idea that not everything reduces to one standard of value. Treat economic exchanges as the only "real" thing that people do, and you face the same problems confronted by the evolutionary biologist (for whom the only question is how organisms compete and survive) or the Freudian fundamentalist (for whom the only issue is how we resolve the tensions of infantile sexuality). Traditional religious ethics—traditional ethics of any kind, in fact—do not require you to ignore the hidden forces that may be at work in any particular setting. Being human is learning how to ask critical questions of your own habits and compulsions, and it's learning how to adjust them against a model of human behavior—an idealized truth about the purpose of our humanity.

Those in positions of power are rightly concerned with “cost”, but all too often it is the wrong kind of cost. They speak as if money is the only thing that matters when weighing the pros and cons of a given decision.  Medical evacuations from Haiti to the U.S. were suspended for four days because Florida Governor Charlie Crist didn’t want his state paying for them. New York City Mayor Michael Bloomberg is against giving Khalid Shaikh Mohammed the judicial rights our founders believed all persons should have because it would be “expensive for the taxpayers and… disruptive for New York City.” The Republican National Committee opposes cap-and-trade because, they say, "The Democrats are planning to jack up energy prices and pass the cost on to you and your family… Can you and your family afford an additional $3,100 in higher energy taxes a year?" (Ignore for a moment that that number is grossly exaggerated and focus on the underlying implication that fiscal cost is the only thing that matters.)

Money matters – you can’t do what you can’t pay for – but it should not make up the entire definition of the word “cost.” One of the most important textbook words I learned in college was “externality,” and Crist, Bloomberg, and the RNC have failed to internalize the externalities. They are not asking the right questions about cost. Yes, security for KSM’s trial would cost a bundle, but where does the Constitution say that “we the people” means only the people with cash? Aren’t our values supposed to be universal, not fiscal? Having the trial costs money; not having it costs our principles. Governor Crist, it’s only January; isn’t eleven months enough time to rework the budget for a new expenditure or to ask the federal government for retroactive aide? The evacuations cost money; the supsension costs lives. And yes, cap-and-trade might cost families a few hundred dollars a year, but do we really think that saving a few hundred dollars is worth the cost of 24,000 American lives lost each year to coal pollution, or that $300 per year is worth the cost of entire low-lying cultures?

Money is important. I’m ticked that, even without the stimulus and Iraq, the 2010 budget will have a bigger deficit than the 2009 budget. If we want to ensure that our most important programs are sustainable in the long term, then we can’t keep running deficits anywhere near this large. At the same time, however, there are things are worth paying for. When facing a choice between dollars and lives, money should be used on behalf of greater values. It should not be hoarded for its own sake nor distributed inefficiently through corporate welfare and tax cuts for the rich.

That is why I am a part of the progressive movement: My values remind me that people matter, and that money is nothing more than a means to an end. It may well be the most important means, but it is still just that, a means. Anyone who comes to believe that money, whether their own or the nation’s as a whole, is an end unto itself risks losing sight of the true power and depth of human relationships and of life. American citizens should seriously question the gap between our historical rhetoric and our modern reality.

Excise Tax Harms Health Care Policy

I argue against the excise tax for the following reasons:

a. The tax penalizes the middle class by cutting health care. 

b. The tax does not increase wages, and, now, there is evidence against the argument that it does. These arguments favoring the tax relied upon correlation rather than causation.

c. The tax assumes health care consumers are rational based on right wing ideological assumptions. These assumptions are often paraded around as fact, and, indeed, this can be seen with regard to how often issues of correlation on wages are quickly assumed to be causation for the purposes of buying into the right wing ideological frames. I do not assume intend here. I merely assume that one has bought intentional or not into right wing assumptions.

d. As a corollary, the argument assumes we will "bend the cost curve" is also false. This depends on assuming monopolies will stop being monopolies and that consumers will not under or overestimate their need for health care services. 

e. Finally, the tax is regressive rather than progressive. Thus, the ideological reason for the tax is flawed.

This is an extremely long post, and for that, I apologize, but often in these debates people attempt to reduce complicated debates to talking points. I want to delve into why I have a problem with the assumptions, and that means really covering all angles of the discussion with supporting evidence.

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Toward American Economic Realism-- Assessing Risks

Polling data indicates that Americans are more positive than Europeans about economic outcomes. The question is whether this positive attitude represents economic realism, or, to put it another way, the ability to accurately assess risk? Does the American attitude reflect a gap between reality and belief that harms our ability to assess what policies politicians should be enacting? On the flip side, are politicians enacting policies that properly assess economic risks to the American middle class?  I argue here that our attitude does not reflect a proper assessment of risk, and that this harms our ability to properly set for the right policies.

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Economic Stimulus (From a Layman Perspective)

By: Inoljt, http://thepolitikalblog.wordpress.com/

There is something very fishy with Keynesian economics and the theory that government stimulus best fights recessions.

Before I continue, I should note that I am entirely unqualified to offer this critique of a fundamental economic tenet. I do not have a Ph.D in economics; nor do can I offer any alternative to combating recession. Nevertheless, here are my non-intellectual thoughts on the matter.

The best test of an economic principle (or any principle, for that matter) is in the field - in real life. For example, reality contradicted the economic theory that financial markets are rational in a particularly memorable way. On the other hand, reality supports the principles of supply and demand.

As far as I can tell, the "reality test" for economic stimulus has had quite mixed results. Two stimuli come off the top of my head: Franklin Roosevelt's New Deal and Japan's response to its 1990s housing bubble. The New Deal, while popular and praised to this very day, did not end the Great Depression. Likewise, Japan's stimulus also did not stop its Lost Decade.

Supporters of Keynes, in response, assert that both Roosevelt and Japan needed even more stimulus; both cut back government spending when they should have spent even more.

To me, this argument recalls the saying, "The definition of insanity is doing the same thing over and over again and expecting different results." It's as if a medieval doctor proposes "bleeding" a sick patient. Upon seeing that bloodletting is not working, the doctor concludes that the patient needs even more bloodletting - when in reality the doctor's "cure" is only making the patient sicker.

The analogy is probably exaggerated; after all, WWII government spending did end the Great Depression. As stated before, the "reality test" has not proven one side right.

What is certain is that more test results are upcoming. The general response to the Great Recession has been economic stimulus; we shall see whether or not it works fairly soon. I hope the evidence goes against my suspicions. I fear it will not.

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Diaries

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