Friday, February 7, 2014

Republicans are right when they say ACA will ruin their economy, but it will improve the economy of the 99%

By Marc Jampole

If a business owner has three job openings and 10 people apply, she can pay less than if only two apply. It’s one of the most simple examples of the law of supply and demand—the less the supply or the greater the demand, the higher the price.

The law of supply and demand is a basic principle of western economic theory and explains why Republicans and right-wingers are sincere when they say that it’s an economic disaster that 2.5 million job-holders will probably retire from the work world when they have secure and inexpensive health care insurance under the Patient Protection and Affordable Care Act (ACA). It’s an economic disaster, but only for rich folk who do most of the hiring.

Certainly, the Republicans and other right-wingers lie when they say that 2.5 million jobs will be lost, but they are lying out of a sincere motive: they fear the impact of that many people exiting the job market on the economy. They don’t care about the size of the economy. They care about their cut. And with fewer people seeking or wanting to hold jobs, businesses will have to pay more to replace the 2.5 million who bid Sayonara to the rat race, but also to attract other workers.

Maybe I missed it, but I don’t think anyone has mentioned that the net effect of 2.5 million people leaving the workforce will be a decline in unemployment. It has to be, because employers will most definitely hire another 2.5 million to replace the ones going on permanent vacation. They’ll hire them because no matter what any right-winger tells you, very few if any businesses that last beyond a few months will ever hire an employee they don’t believe they need, unless it’s a relative. I think we can assume that the sibling, children, nieces and nephews are mostly already hired and that employers will replace most of the 2.5 million who quit their jobs or went part time.

A lower employment rate also leads to a higher price on the labor of one worker. Because 2.5 million now feel secure enough to retire from working a job, the people who keep working will see their wages and benefits increase. The decision of these workers to exit the workforce thus results in a profound redistribution of wealth.

It’s not that Republicans don’t like government to redistribute wealth. They understand that on the economic level, it’s the function of government—take money from some people and give it others. Unless a government is controlled by a dictator or King/Queen (who can funnel taxes to private accounts), it will eventually always spend every penny it takes in (and more). So every government is going to redistribute.

But the right is used to government redistribution taking money from the poor and middle class and giving it to the wealthy and very wealthy. That’s the flow of the cash for the past 30 some odd years. Financing the lowering of taxes on the wealthy by cutting programs redistributes wealth upwards. Privatizing government functions—the polite term for “crony capitalism”—redistributes wealth upwards. Passing legislation that hurts unionization efforts or takes jobs from union members redistributes wealth upwards. Deficit spending financed by bonds bought primarily by rich folk redistributes wealth upwards, especially when it’s done in lieu of raising taxes.  In short the entire right-wing program for government since the Reagan years distributes wealth upwards.

The ACA gets the money flowing in the other direction, from wealthy and upper middle class to the poor and lower middle class. That benefit to the lives of 99% of all Americans may be as important as the fact that the new law will extend healthcare insurance to 30 or 40 million people who couldn’t previously afford it. 

It also explains why the Republicans are correct when they say the economy will suffer. They mean their economy—the economy for the one percent. 

Tuesday, February 4, 2014

New book by G. William Domhoff traces control of country by corporate elite since 1930’s

By Marc Jampole

Here is an abridged version of my review of G. William Domhoff’s new book, The Myth of Liberal Acendancy: Corporate Domination from the Great Depression to the Great Recession, which appears in the Winter 2014 issue of Jewish Currents.  Check out the longer version online and buy the issue, which has a lot of other interesting articles in it! 

Many contemporary progressives look back at the 1960s and early ’70s as a golden age when the United States was supposedly a much more politically liberal land. Sometime in the mid-’70s, the commonly believed story goes, corporations started working together to move our nation. After thirty years of union-busting, elimination or privatization of government functions, and lower taxes on the wealthy, we have devolved into a society of rich and poor with a shrunken middle class, inadequate tax revenues, a frayed social safety net, and the most inequitable distribution of wealth since the Gilded Age.

Many progressive writers and pundits, including myself, have recently taken to reciting this brief history of class warfare in America with some frequency. But as G. William Domhoff reminds us in his latest masterpiece, The Myth of Liberal Ascendancy, the class war perpetrated by corporations and their owners against the rest of America predates the Reagan Era and, in fact runs all the way back to the New Deal and earlier. In his new book, Domhoff establishes the peak of liberal-progressive influence in the United States not in the 1960s and early ’70s, but during the last two years of Franklin Roosevelt’s first term, 1935-1937.

Domhoff, Distinguished Professor Emeritus at the University of California-Santa Barbara, is one of the most important sociologists and progressive thinkers of the past hundred years. His specialty is the sociology of power: who has it in America, how they got it, how they keep it and how they use it. His seminal Who Rules America Now?, now in its seventh edition, builds on and broadens the scope of C. Wright Mill’s classic, The Power Elite, in its analysis of the power structure in America. Domhoff and his collaborators keep the world updated on new research on who has power and wealth in America on his website,

In The Myth of Liberal Ascendancy, Domhoff tells a stirring tale of class struggle between four power groups:
  1. The liberal-labor coalition of lefties and labor unions, formed during the early part of the New Deal years.
  2. Corporate moderates, from the New Deal to the oil shocks of the 1970s, believed in using Keynesian techniques to combat recessions, and recognized the value of full employment.
  3. Ultraconservatives comprised two groups that always planned and voted together: the rightwing ultra free-marketers, and the Southern, primarily agrarian, racists who were opposed to any kind of desegregation or granting of voting or workplace rights to African-Americans.
In Domhoff’s telling, these three groups have been the major power players on the national level since the mid-1930s. On the local level, however, he points to a fourth group, real estate and development interests, which dominated regional policy decisions and often made deals on a national level with any and all of the three primarily national power players.

Domhoff’s history runs through the formation and passage or failure of major legislation from Roosevelt’s second term until the Reagan years and beyond. He inspects how these three and sometimes four power centers viewed each piece of legislation, and how the legislation developed or stalled based on their push-and-pull.

In the end, the corporate moderates win — every battle, all the time. Gradually and inexorably, the power of unions is weakened, taxes on the wealthy decrease, the purchasing power of the minimum wage declines, and the wealthy control a greater share of income, wealth and power. The story of each policy decision comes down to the policy groups, experts and lobbyists who define and discuss the issues, promulgate the solutions and help create the laws. Corporate moderates spend far and away the most money forming these groups and supporting economists and other scholars who formulate the policy and advise the various presidents.

Domhoff makes a very convincing case that the liberal-labor coalition reached a pinnacle of power in the mid-1930s and has been losing ground ever since. The high-water mark came in 1935, after Democrats had swept the midterm elections. After about 1937, even when the liberal-labor coalition got an occasional win, it was incomplete or tainted. Take Medicare: Despite the protests of labor unions, private insurers were allowed to have a large role administering the program. This led to rampant medical-cost inflation, as predicted beforehand by labor experts. If the corporate moderates were going to let taxes pay for medical care for senior citizens, however, they insisted that the private sector be able to enrich itself in the process.

Two dynamics seem to predict and direct the move rightward that corporate moderates took in the 1970s: First, they have always hated unions as much as the ultraconservatives have, and always have had curtailing the power of unions high on the policy agenda. Second, unions were too often unsupportive of the efforts of minorities to gain civil and workplace rights, and, in fact feared and distrusted minorities and the organizations representing them. Anti-unionism thus drove conservative moderates into the arms of the ultraconservatives, while racism fractured the liberal-labor coalition.  Tragically, the left contributed to its own demise.

After chewing my way lately through the annoying personal anecdotes and trivializing analogies that clutter many other recent books of social science and science, I found The Myth of Liberal Ascendancy refreshing for its sustained focus on the subject, and its breezy and direct but non-patronizing style. I found no jargon and little if any academic circumlocution.

As an electorate, we currently stand at the dawn of what progressives hope is a new day for the United States. Voters seem sick of Tea Party nihilism and understand that the government must get involved to jump-start our economy, provide medical care to all, educate our young and protect our environment. Domhoff’s book is a prescient reminder, however, not to become too enthusiastic about a Democratic sweep in 2014 and 2016 if the Democrats elected are centrists and look to the corporate moderates for legislative direction.  

Monday, February 3, 2014

This year, Super Bowl ads went to the dogs, like much of the rest of the country

By Marc Jampole

Most media critics are calling the Super Bowl ads tame and sweet compared to past years, then declare unofficial commercial winners based on how much online activity each ad drew.

Virtually ignored is a trend that has been has been building gradually but inexorably over the past few decades. The trend has encompassed all of public life—from movies to ads to discretionary purchases. And in this year’s Super Bowl we may have seen it reach a new peak.

I’m talking about the current emphasis in our culture on dogs. It seems nowadays that every other ad has a dog in it, and it wasn’t always the case. 

Thirty years ago very few ads featured dogs, but our canine friends play an important role in at least five 2014 Super Bowl and a major role in two.

First the five which feature dogs, but are not about dogs:
·         Doritos has an ad in which a boy around 8 or 9 rides a very large dog as if it were a horse to the sound of the “William Tell Overture,” AKA the Lone Ranger’s theme.  At one point, the dog rears back like Silver, the Lone Ranger’s horse.
·         In the controversial interracial Cheerios spot, the daughter—again around 8 or 9—refuses to agree to have a baby brother unless they also get a puppy.
·         A dog sits atop the carriage being pulled by the Clydesdales in the Budweiser commercial about welcoming home a soldier from an unstated war.
·         Most prominent among the many “Peanuts” characters in the MetLife spot is Snoopy.
·         Toyota has a bunch of Muppets driving and riding in its cars, including Rowlf, the Muppet that is supposed to be a dog.

The two Super Bowl advertisements focused primarily on dogs belong in a Victor Hugo novel because together they represent the terrifying and the sentimental, much like a Hugo novel does.

The terrifying comes from an Audi commercial based on the conceit of a Doberman pincer mating with a Chihuahua, creating a monstrosity that has a huge Doberman head on a small Chihuahua body, kind of like placing Sarah Jessica’s head on a pooch body in Mars Attacks! This ugly freak of a dog rages for most of the rest of the spot, causing all kinds of havoc and damage. Horror movies always walk the line between evoking reactions of camp or terror. We are conditioned to look at evocations of terror in commercials only with an ironic, comic eye, but in the right context—large screen, lights off, surrounded by others—the horrible abomination of the Doberman head grafted onto a Chihuahua body would likely frighten.

As hideously off-putting as this commercial is, so is the overly sentimental Budweiser spot in which a puppy and a Clydesdale form a bond of friendship or love that is so strong that the dog escapes his home and the horse with Clydesdale pals rescues it. The two are reunited and happy at the end in a moment as maudlin as only cheaply manufactured anthropomorphic sentiment can be.

The companies advertising in the Super Bowl and their advertising agencies are not making the dog trend—they are just riding on what has become a long-lasting wave.

Just short of 57% of all U.S. household now own dogs (far more than the 45% owning cats). There are 83.3 million dogs owned in all in the country and owners spend an average of $1,650 a year on each. We have seen a proliferation of luxury and designer products for dogs. Advertisements exhort us to buy Christmas presents for dogs. There is even a satellite TV station for dogs to watch—not their owners, but the dogs themselves! A survey a few years back found that a large number of women prefer their dog to their husband.

One can only speculate as to why the past 20-30 years has seen such a large growth not just in dog ownership and products for dogs, but also in the prominence of dogs in the mass media, especially commercials.  To be sure, there has been a great resurgence of the ideal of the American family, even as that ideal has fragmented into dozens of different versions in the real world.  A dog is a key icon in the American dream, right next to the house in the suburbs and the two cars.

There has also been an increase in single households. Pets in general and dogs in particular can serve the place of children, spouses and close friends. So can cats, but humans tend to co-exist with cats, since they are mostly untrainable. We control dogs and can make dogs an extension of our personalities and our values in a way it is hard to do with cats, birds, fish and most other common pets. One can look at the growing popularity of dog ownership as a humanistic response to the growing isolation of contemporary society. We could flip the script, though, and say it reflects the growing narcissism of the politics of selfishness: instead of putting time and money into other humans, we spend it on dogs that appear to agree with our every word and do whatever we say.

I’m just thinking out loud. I really have no idea why dogs have become so popular in our homes and in the media.  I will say however, that it does not speak well of the human race in the United States of American that in the same year that spending on pets increased once again, we cut food stamp and unemployment benefits, forcing hundreds of thousands of families into lives we wouldn’t wish on a dog.

The future of eating out: microwaved frozen food served by robots

By Marc Jampole

The dining experience of most Americans is beginning to resemble how the agricultural industry prefers to raise cattle and chickens: an impersonal industrialized process. 

Unbeknownst to many, most of the food eaten in casual dining restaurants comes to the restaurant already prepared and partially cooked, often frozen, ready to be popped in the microwave or plunged in the deep fryer for a little finishing. As it turns out a very small number of companies manufactures these mostly finished dinners.

While diners might not know that their restaurant night out is little more than microwaved frozen food, they can’t help but notice automation beginning to take over the service part of the dining experience. Some restaurants have now started placing order tablets in their outlets. A few years back, McDonald’s announced that it was replacing human cashiers with touch-screens at more than 7,000 European locations.

Right-wing ideologues such as Michael Saltsman, research director at the Employment Policies Institute, use service industry automation as a stick to beat back the beasts of the minimum wage, mandatory sick leave and employer-sponsored health care. Saltsman, who never saw an employee benefit or government program he liked, writes that raising the minimum wage will make employers in the fast food, casual dining and retail industries seek to automate as many parts of the food delivery process as possible as quickly as possible.

Saltsman’s reasoning is specious: The large retail, fast food and casual dining chains are already galloping towards greater automation as fast as they can. If we lowered the minimum wage, the manufacturers would still seek to automate. The top 1% of the country—the people who own and run the large retail corporations that are automating—has consumed virtually all of the economic gains we have made in recent decades. And yet this outsized explosion in their slice of the pie has not prevented major employers from continuing to look for whatever way possible to cut more of their employees…and automation does just that!   

Standard economic theory states that automation frees labor to do other things: new needs are created, such as designing and building the machines and computers that have taken away so many jobs. Educating workers for the new jobs is the key according to this standard version of the creative destruction of capitalism.

Unfortunately, it may not work this time. A recent Economist article reports that a 2013 paper by two Oxford professors theorizes that jobs are at high risk of being automated in 47% of all occupational categories, including such “brain-work” service professions as accountancy, the law and technical writing. Employment caused by the coming blitzkrieg of automation may permanently disrupt the economy. There is no way that training and retraining will enable us to fit all the workers that future automation will replace in the next few decades.

Economic right-wingers don’t like to hear it, but for our economy to perform its basic function of providing goods and services to people, the distribution of the wealth will have to become far more equitable. We will need to implement higher minimum wages and cut the number of hours that constitute full-time work, to spread the work that does exist around to more people. With so many people out of jobs, the safety net will have to be expanded—more unemployment and food stamp benefits. It would help if our population falls, so that our automated economy has fewer people chasing after jobs. 

We will also have to consider how much automation is really good for society. Having waiters serve meals that are prepared on the premises by individual chefs expressing their creativity is a pleasure that more people could enjoy if salaries were high enough to enable people to afford something other than Mickey D’s. Organic agriculture and animal husbandry are more labor intensive than the industrialized agriculture that developed in the 20th century. Requiring greater environmental regulations on coal and natural gas production and electricity generation creates more jobs as well.

But it’s not just a matter of seeing where it makes more sense to have humans do the work, even if it costs more money. We also have to raise wages, benefits and the government safety net—change the split between labor and capital—so that the other 99% can afford to enjoy the benefits of human intervention in the delivery of goods and services.