Friday, September 11, 2015

Reevaluating Barack Obama: one of the best presidents since WWII

By Marc Jampole

A few years back, I rated Barack Obama as the sixth best president of the twelve we have had since World War II, behind Johnson, Clinton, Eisenhower, Nixon and Carter, in descending order. At the time, I wrote, “Obama is basically a pro-business, anti-union liberal who shares the consensus view that the United States should have special rights in world affairs.”

But since the defeat of his party in the 2014 mid-term elections, still less than a year ago, Obama has soared in rank, thanks to a series of unilateral executive actions that he could have taken for years, but chose instead to try to work with the recalcitrant and openly disrespectful Republicans.

In the past year, Obama has advanced an immigration plan that doesn’t require the approval of Congress, restored relations with Cuba, established new regulations to cut our dependence on burning fossil fuels and negotiated the historic deal that keeps nuclear weapons out of the hands of the Iranians and may pave the way to a rapprochement with Iran.  His administration has begun to prosecute executives and pass regulations favorable to unions. When you add all that to the passage of the Patient Protection and Affordable Care Act (ACA), his ending of American torture and the efficient and compassionate response to Superstorm Sandy, it makes for a pretty good record.  I still don’t like drones, the development of other automated weaponry and government snooping into electronic records, but realistically, every president would support these security state lunacies.

I would therefore like to amend my rankings and say that Obama ties with Clinton as the second best president since World War II.

What we’ve seen is a complete turnabout of traditional American politics. Traditionally, during the last two years of any president’s second term, he is considered a “lame duck,” unable to fly or get anything accomplished because he has essentially lost his clout, since he’s on his way out. Obama should have been even less effective than the usual lame ducks, because he faced Republican majorities in both houses of Congress. But the modern imperial presidency has accumulated so much power that all the last year or two means is that the commander-in-chief can’t call on the cooperation of Congress. Of course, Obama never had that cooperation after his first two years, which were dominated extraordinarily by the tortuous process of passing the ACA.

Over the next four years, Obama showed a lot of weakness, outside of engineering Sandy efforts. Obama backed down and agreed to link raising the debt ceiling to making spending cuts. He folded the tent instead of standing up to the Republicans and letting them defund the government; luckily he learned from that mistake and has not let the Republicans blackmail the budgetary process again. His decision to wait to start building the national healthcare exchange website until the Supreme Court blessed the ACA was political cowardice of the highest order. That makes it something of shock to see him proceeding so boldly and confidently over the past year. By contrast, George Bush, Jr., goaded by his vice president, began asserting the prerogatives of the imperial presidency from day one of his administration.

Why Obama waited so long to begin throwing the weight of the presidency around is a mystery to me. I contend that if he had taken his stands on immigration and human-caused global warming before the November election that it might have energized Democratic voters and prevented the debacle that was the 2014 mid-term elections. Be that as it may, his aggressiveness since then will help the country.

Thursday, September 10, 2015

Conservative factotum proposes socialist alternative to minimum wage, but it’s socialism for the wealthy

By Marc Jampole

When is a government payment to someone poor really a handout to someone rich?

It happens when the government gives money to the working poor because they earn so little that they qualify for food stamps, medical assistance or other aid to the poor.

Wal-Mart has perfected this scam. Wal-Mart workers collectively receive $2.66 billion a year, or $420,000 per Wal-Mart store in food stamps. Year after year, low Wal-Mart wages lead to the government providing food stamps and other assistance to their workers and thus indirectly subsidizing Wal-Mart’s profit.

Now another in the horde of modern Sophists hired by conservative think tanks is proposing to help Wal-Mart, McDonald’s and other low-wage employers continue to suppress wages and grow profits.  It’s Oren Cass, formerly the domestic policy director of Mitt Romney’s 2012 presidential campaign and now a senior fellow at the right-wing Manhattan Institute.

Cass’s idea is to replace earned income credits and other government unmentioned poverty programs with a subsidy that the government pays directly to workers who don’t make living wage. His plan, presented in a New York Times opinion piece titled “A Smarter Way to Raise Paychecks,” is nothing more than a subsidy to big businesses. In total, he proposes to reallocate $150 billion in aid to the poor from current programs to direct payments to workers.

All of these right-wing diatribes against the minimum wage start with the notion that raising the minimum wage forces employers to hire fewer workers and leads to higher prices. The first assertion—that raising the minimum wage leads to staff reductions—goes against common sense. Virtually all employers only hire employees they need and routinely analyze their workforce to see whether reductions or increases in employees are in order. There is always some inefficiency in the system—friction is what Milton Friedman called it—and raising the minimum wage will likely make employers find and eliminate that friction sooner than they usually would have. Right-wing economists like to ignore the “friction factor” and blame higher minimum wages for job losses, but the jobs were going to go as soon as the employer found out he didn’t need the employees. Last year, the Congressional Budget Office computed that raising the minimum wage to $10.10 an hour might reduce total jobs by three-tenths of one percent of all jobs. In a world in which 4%, 5% and sometimes 6% unemployment is considered full employment, these jobs losses certainly seem more like “friction” than a real shrinkage of total jobs.

The second assertion—that raising the minimum wage leads to higher prices, which will hurt other poor people—is also ridiculous because it overemphasizes labor as a cost factor and ignores the other choice an employer has: to take less profit.  I’m not disputing the law of price elasticity, which says that when you raise prices, fewer people buy. What I am disputing is the idea that companies must always expand the profit they make, no matter what. I’ve routinely eaten raises to my employees rather than charge clients more. And I still make a pretty good living, as do the owners and executives of just about all thriving businesses.

Cass accepts these false notions about raising the minimum wage at the very beginning of the article, freeing him to use most of his column inches talking about the benefits to workers and taxpayers of direct payments to low-wage employees. He never mentions the benefit to employers: that they don’t have to pay their workers any more money, since the government is doing it for them. Yet when we follow the cash flow of Cass’s proposal, we find that all the $150 billion he intends to pull from other government programs will end up in the pockets of the wealthy, because it’s money they don’t have to pay out to their workers. Since Cass is proposing to reallocate money that already goes to the poor, they will make nothing additional from his plan.

One particularly odious comment Cass makes is to claim that since rich folk pay most of the taxes, it is the rich that will finance giving workers direct cash payments. With all seriousness, Cass writes Taxpayers, meaning disproportionately higher-income households, pay for the subsidy. This is a key advantage over the minimum-wage increase, whose cost must be borne by some combination of the employers, other employees and customers.“  Cass ignores the fact that taxes are too low on the wealthy and have been since the Reagan years. He ignores the fact that while the minimum wage and wages to all employees have stagnated for 30 years, the wealthy have been taking more of both the income and the wealth pie. Prices have gone up, but wages haven’t. Employees and customers have both suffered, while the wealthy keep doing better and better.

Raising the minimum wage will put pressure on all wage levels, so eventually all employee salaries will go up. Those employees are most of the customers about whom Cass expresses concern.  Keeping the minimum wage below a living wage results in no pressure on other wage levels, thus helping companies continue to suppress wages to other, higher-paid employees. In other words, the benefits he believes will magically appear if the government pays part of the salaries of millions of low-wage workers will not come about.

If Cass really wanted to help the working stiff and the economy, he would call for a higher minimum wage, much higher taxes on the wealthy and a tax on wealth like France has. But Cass is not really interested in helping any employees. He just wants to see the wealthy continue to ride the gravy train.

Wednesday, September 9, 2015

Contrast between “Officer & Gentleman” and “The Brink” demonstrates how middle class income has lagged

By Marc Jampole

Cultural imperatives can transform slowly and subtly without anyone being aware of the change. But sometimes we see something in an old movie or TV show that depicts attitudes or conditions that have changed so much that it makes us realize how different things are from “the good old days,” “our salad days” and “back in the day.”

The other day I had one such epiphany of change while channel surfing for something to watch while exercising. I chanced upon the 1982 Taylor Hackford melodrama, “An Officer and a Gentleman,” which dissects the lives and loves of Naval pilots in training. At the beginning, Lou Gossett Jr. chews up the scenery for what seems like an eternity as a sergeant who is abusing the new recruits, who are all lined up in front of him. In his diatribe, he throws every invective and emotion at them, each a reason why he will make sure they fail.  The anger rises in his throat when he tells them how pissed off he is that they’ll get out of military in six years and make big bucks flying for the airlines.

That reference stopped me in my tracks.

Just a few weeks earlier I had seen an episode of HBO’s very funny “The Brink,” in which two fighter pilots in trouble for a variety of reasons bemoan that they may have to leave the Navy and get a job making some puny amount, $30,000 I think, working terrible hours. FYI, these guys will later save the world from nuclear holocaust by dive-bombing their jet into a rogue Pakistani refueling jet loaded with nuclear devices headed to downtown Tel Aviv. It being fiction, they are able to eject from the plane seconds before impact.

Think about it. In 30 years, the cultural reference to commercial pilots went from they have a great-paying glamorous job to they mill a grindstone for peanuts.

Back in 1982, commercial pilots—primarily unionized—were considered to be at the top of the middle class. Today, the question is, what middle class?

The change in pilot status implicit in these two references in works of art 30 years apart indeed symbolizes what has happened to the American middle class over the past three decades. The Reagan program of suppressing unions, cutting taxes on the wealthy, cutting government spending on education and social programs and privatizing government services to for-profit, mostly non-unionized companies has laid waste to the incomes and wealth of the middle class and poor.  The wealthy now take a far greater share of the wealth and income pie than they have since the Gilded Age of the 19th century. That piggish slice of the pie came at the expense of all others.

The difference between the America with a strong middle class and shrinking poverty that existed before Ronald Reagan took office and the nation of rich and poor we have today is so obvious that it comes across in minor details of the extended dramatic exhortations of popular culture. The reality then and now was and is baked into the popular art of the times.  

Monday, September 7, 2015

Germany does the right thing for Syrian refugees and for the German economy

On the surface it seems inconsistent that the same country, Germany, that submitted Greece to such harsh punishment is opening its arms so generously to Syrian refugees, agreeing to take as many as 800,000, or one percent of its own population. 

But it makes perfect sense once you accept that a deeply Protestant—perhaps Lutheran—streak still runs through Germany and its politics and foreign policy. It’s the peculiar Protestantism of the capitalist class that Max Weber defined in The Protestant Ethic and the Spirit of Capitalism in 1905. To the capitalist following the Protestant ethic, the Greeks and their government committed the ultimate of all sins—they did not meet their obligations. Imagine debt as an original sin, and you quickly understand the German attitude towards nonpayment of debt.   

But as good citizens of the world—the secular version of being good Christians—the Germans are leading the way in doing what’s right to ameliorate the fates of those displaced by the tragic Syrian civil war. They don’t look at the Syrian and other refugees as profligates the way they characterized Greece for not paying its debts, letting itself become a nation of tax scofflaws, not exercising discipline and not following the rules. No, the Syrians are innocent victims who require not just our empathy but our help. When you add it up, it’s a kind of “tough love” approach to foreign affairs. 

Let’s keep in mind, however, that even as it takes on the massively expensive job of integrating 800,000 refugees into its economy and society, Germany is acting its own self-interest, following the ethical capitalist creed to do well by doing good.  Like the rest of Western Europe and the United States net of its immigrants, Germany is experiencing negative population growth. The influx of 800,000 new workers and consumers will be a shot in the arm to the German economy.  

Would that the rest of Europe and the United States followed the German model and opened its doors to more immigration from refugees and others. The West faces a population bust and must either get an influx of younger workers from elsewhere or learn how to operate a stagnant, no-growth economy. Instead of shifting into permanent decline, doesn’t it make sense to feed new workers into the economy, and in the process, address the problems of less stable, poorer nations? 

People fear that immigrants take their jobs, even though statistics show otherwise. People fear that immigrants suppress the wages of the native born, and statistics disprove this myth, too. But most of all, people in France, German, the United States, Great Britain and everywhere else fear the “the stranger,” the other who may corrupt or dilute the culture.  

There can be no doubt that a large influx of one culture into another will change the larger culture. That’s why gefilte fish, matzah, pizza, taco shells and soy sauce are on the shelves of every American supermarket. But without enough people talking the language and following the cultural norms that define a culture, the culture will shrivel up. Fewer Germans having kids mean fewer Germans in the future, which certainly manifests a decline in the culture. On the other hand, does it matter much what is the color of the German citizen if he or she speaks German and studies Goethe and Schiller in school? 

The old racist Germany of Nazi days thought it did matter. The new Germany—minus the usual small percentage of virulent racists—knows better.