Thursday, July 2, 2015

Mainstream media help to establish Koch-financed professor as an economic guru

I have been scratching my head as to why the mainstream news media has seemed to lionize George Mason professor Tyler Cowen over the past few years. It seems that everywhere you turn—Wall Street Journal, New York Times, Newsweek, New Republic—you can see an article by Cowen. 

Stupid me, I just wasn’t digging deep enough into Cowen’s professional background. I want to thank Twitter follower Alan Parker for his tweet to me that states flatly that the Koch Brothers “bought and paid for” the university at which Cowen teaches, the ostensibly public George Mason University. 

As it turns out, “bought and paid for” is not entirely hyperbolic: Koch gave $30 million to George Mason in the mid-80’s (roughly $66 million today) and in return, George Mason took over a right-wing think tank now called the Mercatus Center. The Kochs, and other ultra-rich ultra-rights, continue to fund Mercatus, which means “market” in Latin.  

The Center comprises more than 70 professors and an additional staff of more than 50, all dedicated to churning out research and reports that advances knowledge about how markets work to improve people’s lives,” as the Mercatus mission statement puts it. In other words, all Mercatus work begins with the false premise that free markets can solve every social and economic problem.  

Here are some examples of untrue assertions by Mercatus scholars:

·         Three years ago, Charles Blahous infamously predicted that the Patient Protection and Affordable Care Act (ACA) would worsen federal deficits. In reality, ACA has saved more money than was originally anticipated.

·         As I have reported on OpEdge, Tyler Cowen continually argues for a deregulated free market by focusing on individuals and ignoring large groups, as when he claims that workers have nothing to worry about in the shared economy since a few of them will flourish economically or when he states that because individual families gain and lose wealth over generations inequality of wealth has not increased.

·         Richard Williams ridiculously compares trans fats to water in an opinion article that appeared in The Orange County Times. Both are bad for you in large amounts, so why ban trans fats from foods until we know for fact they bad for you in small amounts. What a completely scurrilous analogy, especially considering that 50-75% of the body is water. Unlike trans fats, we have no reason to test to determine whether water is inherently safe before we allow it to be consumed, although we do demand tests that it be safe water! Just as we demand our food be safe.

·         Four Mercatus scholars combined on a white paper that asserts that consumer rating systems provide enough protections that Internet, smart-phone and shared economy markets do not need consumer protections. The paper calls for an end of consumer regulations, ignoring the fact that consumer may not be aware of what safety or quality entails in a good or service.

Let’s take a look at a small excerpt of this last example of Mercatus twisted reasoning to support a one hundred percent free market:

“Regulations…are not as effective as market solutions, and may harm consumers instead of helping them. Regulators can be influenced by regulated industries, erecting barriers to keep out new competition, stifling innovation, and imposing higher prices and reduced quality on consumers. By making it more difficult to do business, regulations can have the unintended consequence of entrenching already-established businesses while closing the market to entrepreneurs with innovative ideas.”    

Pure rhetoric that we’ve heard from conservatives since Congress passed the Pure Food & Drug Act of 1906. This standard rightwing cant ignores the cost to individuals and societies when vendors sell substandard goods. The public is willing to pay more for safety.  

I’ve given just a few examples of bogus “analysis” and “research” I found on the Mercatus website. There are literally hundreds of published opinion and analysis pieces, white papers and books spewing out of Mercatus “scholars” every year. 

And who is the chair and general director of Mercatus? 

Yes, you guessed it. It’s Tyler Cowen.   

We have to wonder, then, whether there is a connection between Cowen’s consistently weak arguments and the fact that he’s on the payroll of Koch Industries? 

Nothing would delight me more than making a case against George Mason’s involvement with Mercatus, but they can’t censor these guys, and plenty of scholars spin fantasies and garbage in the social sciences and humanities; it even happens from time to time in the natural sciences. There is nothing wrong with rich folk giving money for university research, as long as the money is earmarked for answering questions and not asserting conclusions. But what we have with Mercatus is rich folk paying for an elaborate academic cover for a bunch of policies that hurt everyone but them.   

I can make a good case against the mainstream media for publishing the claptrap of Mercatus employees while pretty much ignoring the solid research of legitimate scholars who either self-identify as progressives or demonstrate progressive ideas. It just demonstrates that 1) the mainstream media seek out research that will confirm their existing prejudices, even if the research is suspect or ultimately financed by special interests; and 2) far from being liberal as politicians often aver, the mainstream media are at best centrist looking right.

Sunday, June 28, 2015

George Mason professor tries to tell us that the Uber is good for workers

If there’s a false argument to be made in support of corporate interests, Professor Tyler Cowen of George Mason University is sure to make it. Cowen specializes in spinning dispassionate sounding short articles that sell economic nonsense in the better mainstream media, such as The New York Times, Wall Street Journal and Foreign Affairs. 

A year ago, Professor Cowen was embarrassing himself with a series of articles that purported to disprove the findings of Thomas Piketty in his Capital in the 21st Century. Cowen’s argument tended to follow the pattern of staring at the trees so you won’t see the forest, which in this case means believing that the fact that individual families gain and lose wealth through generations proves that over time more wealth does not tend to accumulate into fewer hands. By focusing on the trees—individual wealthy people, Cowen ignores the forest—the class of the wealthy—who have accumulated more and more of the wealth of the world and the United States over the past 35 years.

Cowen now uses the same trick of ignoring the group to perform another feat of corporate justification in a New York Times article titled “In an Uber World, Fortune Favorsthe Freelancer.” Cowen asserts that some workers—those who hustle, i.e., “are willing and able to turn their spare time to productive uses,”—will do very well in the freelance economy created by sharing services such as Uber and Airbnb.  

The good professor creates hypothetical situations to assert that workers who are more educated will be more likely to take advantage of the opportunities to freelance as a driver, dog-watcher, private tutor or whatever, and therefore make a lot of money. He never proves this point, but he does make a clear implication that some individuals will thrive in the sharing economy.  

Of course, Cowen never defines what thriving means—will these successful freelancers make $150,000 a year, or will they just do a little better than average for the driving, delivery, baby-sitting and other semi-skilled, low-wage labor that constitutes a large part of the sharing economy. Surely Cowen isn’t talking about freelance attorneys or accountants, who tend to make less than their peers with real jobs. 

The hidden premise behind Cowen’s argument—one that right-wing economists and social thinkers never tire of making—is that those who thrive will deserve to do so, while those who don’t will deserve their fate.  This argument is an important foundation stone of our free market system, because it justifies the obscene wealth that a few possess—they earned it and they deserve it, just as much as that young go-getter who is delivering your package to the airport for $5.00 an hour. 

Now maybe some of the trees in the forest of the shared economy will grow to the clouds, but what about the rest of the forest, which in this case comprises most people trying to scrape a living together on freelance and part-time jobs.  Cowen neglects to tell us what’s going to happen to the group of workers who don’t thrive in an entrepreneurial environment. They will make less money and will always be in competition with fellow workers for every little job.  Their work world, always brutal, becomes more so in an apps-driven world. 

That the Times accepted Cowen’s article should disappoint anyone who believes in high journalistic standards. In making his case, Cowen cites two studies, one sponsored by Uber and partially written by an Uber executive and the other paid for by Airbnb. When I was a journalist, we tried not to depend on research paid by parties who had a vested interest in the research results. For a scholar to accept such non peer reviewed research is surprising, unless Cowen is feeding at the same corporate trough as those who took Uber and Airbnb’s money. For the New York Times not to ask Cowen to remove the research from his article is equally as disconcerting. Don’t the editors remember all the bogus research that the tobacco industry generated for decades?  

As with all labor and wage challenges, Cowen finds the answer to the dilemma of some workers not thriving is to give them greater education and training.  He avers that the educated shared economy worker will provide better service and get higher ratings, and thereby get more jobs and make more money. As usual, Cowen never considers the conundrum of what happens when every worker is better educated. Interestingly enough, Cowen manages to get a tiny plug into the article for for-profit education when he proposes that in the future going through an Uber training program might serve as a legitimate educational credential on par with “those of some lower-tier colleges and universities.” 

Cowen hides the brutal fact that the sharing economy hurts workers in several ways. It either replaces the stable income and benefits of full-time work with a precarious freelance existence or it floods labor markets with people who may or may not be qualified, thus driving down rates. It creates dangerous situations, such as the apartment that’s really a sub-standard hotel or the unsafe driver. It takes profit out of the hands of those who do the actual work. It makes it much harder for workers to organize into unions. 

But none of that matters to Cowen, who prefers to force a smile and focus on those who will succeed in the sharing economy. If he looked at the whole forest, he would see that the wage-suppressing nature of the sharing economy creates a major economic challenge for the country, as more and more workers fall into permanent economic insecurity.