Sunday, June 29, 2014

Supreme Court and the Rights of Women

Last week in the McCullen case the Supreme Court decided that the conflicting rights of women to peacefully seek healthcare (which mostly does not involve the termination of pregnancy) were subordinated to the right of protesters to make their voices heard regarding their choices. In this upcoming week they will make two more decisions regarding the economic and health care rights of women. One decision many see that way (the Hobby Lobby case on contraception) and the other (Harris v Quinn) they don't because the media has a tendency to avoid speaking honestly about what is at stake when it comes to the economic rights of working people.

The Harris case boils down to whether workers in diffuse professions such as home health care workers can be asked to pay an agency fee for a union contract that offers protections on wages and benefits such as health care. The anti-union lobby is pressing to have the decision impact all public employee unions and we will find out on Monday which way the court moves. Given its decisions in cases such as Citizens United, McCullen and NFIB (making Medicaid expansion voluntary) I am not optimistic that they will take a stand in favor of the rights of groups of women (overwhelmingly) to band together to improve their economic lot.

Women are a majority of public sector workers, despite being a minority of the civilian work force. They have suffered economically in this sector because of the policies of austerity pursued since 2009. Under the Harris case their economic prospects, particularly for the lowest paid, will be  spiked by a court more interested in ideological outcome than showing empathy toward working people. Women could lose their rights to healthcare and economic security in one week.

Sad. Ironically it might be resolved until we have a women as president who can outlast the ideological majority.

Friday, January 10, 2014

ASSA - AEA 2014 The Return of Conventional Thinking

The recently concluded Allied Social Sciences Association annual meeting (better known as the American Economic Association and affiliated groups) showed a re-emergence of conventional thinking as the "mainstream" tries to rehabilitate their positions on debt, economic growth and austerity. The conference had a bit of a rocky start thanks to the snow storm that hit Philadelphia and the rest of the Northeast so there were incomplete panels and speakers who were not able to be in attendance.

My concern in sitting through six panels on Friday and Saturday is that there is still a large number of economists, prominent members of the mainstream, that are hell bent on twisting economic policy toward the same thinking that got us into the crisis in the first place. Over the last few years the volume has increased at these gatherings. The introspection seen in 2010 is largely gone. The creative thinking comes from the "allied" groups like Labor and Employment, Evolutionary Economics and URPE.

For example, there were several different panels, three by my count, which featured either Rogoff or Reinhart from Harvard talking about their twin theories of the difficulty of recovering from financial crisis and the relationship of levels of public debt and economic growth. While economists like Pollin from UMass and Krugman from Princeton have debunked much of what they write, the AEA gave them plentiful platforms for discussion of their work. These panels frequently involved a discussion of austerity; the process by which advanced economies have been shrinking their public sectors during this period of economic stagnation (or decline if you are in Europe).

The great irony in all this … the mainstream economist who made the most sense in these discussions was Larry Summers. He has a theory of contemporary secular stagnation which discusses the current stagnation and whether it is fixable given normal mechanisms … he thinks no. Of course, significant progressives like Paul Krugman and Brad DeLong did not participate this year. There were interesting talks from others at the Evolutionary Economics, URPE and Economists for Peace panels. If you are interested in seeing significant work from progressive economists skip the AEA proceedings and go right to Dean Baker, Larry Mishel and Stephanie Kelton.

Oh and hope it doesn't snow in Boston in the first couple days of New Year 2015; because that is where the conference meets next year. I'm a bit worried it is going to be me and some folks from Harvard and MIT if the weather is as bad as this year.

Thursday, January 2, 2014

The challenges of inequality

The great Heidi Moore of The Guardian writes about the sad juxtaposition of the fortunes being made in the Twitter IPO and the first round of cuts in SNAP benefits (food stamps). Bonnie Kavoussi has a new blog where her first post is about the growing emotional and physical tie of workers to their jobs because of lessened security in the tepid recovery. Larry Mishel of the Economic Policy Institute (who I had the pleasure of siting next to at a recent Dissent Magazine celebration) writes a series of pieces about how the problem of slow job growth is not due to automation (or the hollowing of the workforce) but rather weak policy responses to the bursting of bubbles and the stagnant economy for the overwhelming majority of Americans.

I think all of these folks would agree that this is the fundamental graphical depiction of the challenge

which shows the change in productivity (high) and median wages (low) from the mid-1970's until today. The fundamental question is why? (Thanks to EPI for the graphic) The reasonable explanations include loss of worker power due to uncertain labor market conditions and decline of union protections, the internationalization of labor markets due to off-shoring, capital inflows into the US from bad trade policies where we import finished goods and capital which provides an incentive to automate production, increased reliance on financialization of industry and increasing dependence on service companies for employment.

As a former executive from the software and automation industry I have always been interested in the hollowing out hypothesis that Mishel refutes. To some extent it is intuitive that automation would be applied to higher paid, lower skilled jobs (like material handling or administration). Anecdotally I have seen that in projects that I participated in during my years in business. However, the most successful projects didn't eliminate positions in real time but rather increased productivity so that as the businesses grew they would need to apply less labor effort to the enterprise. Yet as I go through the checklist of places I helped from the mid 1980's until 2010 I recognize that many of the projects involved either manufacturing or distribution/warehousing firms that eventually off-shored. Of course I saw my share of service industries that are still in business and placed a premium on more accurate information which improved customer service but lessened labor content of service delivery. In the end there are lots of reasons why but we arrive in the same place, the benefit of economic progress (productivity) flow to those with the power.

These are the threads of the debate about inequality and what to do about it. You can't deny that that we are staring at a chasm of economic inequality greater than at any time since the Great Depression. In recent months this has drawn critical appraisal from Pope Francis, President Obama and a vast array of government officials as well as commentators on the social, economic and political environments. This weekend marks the beginning of the ASSA and AEA 2014 in Philadelphia which should be an interesting intellectual battleground between those looking to do something to help heal the festering sore of inequality and those looking to stoke the fires of austerity which promise to make things worse.

Sunday, November 10, 2013

Adventures in the Pundit Trade

The great screenwriter, William Goldman wrote a memoir many years ago called Adevntures in the Screen Trade. His central theme was basically that in Hollywood nobody knows anything about anything. In a hysterical post from the American Prospect they show the same for political punditry. At least when it comes to what President Obama should do or not do now.

Saturday, October 5, 2013

Not Greece but rather Belgium

The continuing government shutdown has real impacts beyond the symbolic, in several states there have been closures of Head Start programs, Arizona is suspending public assistance, several government contractors are furloughing their employees, Governors are scrambling to sustain programs where federal funding is in danger and the list goes on.

In past years we heard on and on about how the federal deficit and debt was going to turn us into Greece. It couldn't possibly but that is a discussion for another day. In fact, the government shutdown is turning us into Belgium. A few years ago Belgium set a modern record for the longest streak without a government. Well, without a permanent government. Te election of 2010 resulted in a very diffuse vote and many parties held seats in Parliament. Belgium is complicated because of linguistic, political and regional differences. All you really need to know is that the BIGGEST party got 17.5% of the vote. So the country was ruled by a temporary government for almost two years.

They became a sort of dysfunctional joke and even though the EU is headquartered there, Belgium had no real influence over anything. Which is what crossed my mind when President Obama was forced to cancel a trip to Southeast Asia. The meetings will be dominated by the Chinese and it will diminish US influence a bit at a time where our leadership is needed to show the example of democracy to Indonesia, Malaysia and Brunei. Except we come off like Belgium. Too splintered to show anything. Some politicians too concerned with the appearance of power to actually recognize that they have already won everything they could rationally want and more. The cuts to the federal budget over the past year have brought the deficit down hard and fast resulting in slower economic growth than target and higher unemployment than could ever make sense.

Saturday, September 28, 2013

When is Democracy not so Democratic?

In Political Thought this week we discussed the following from the Boston Mayoral election first round of voting.

Candidate Total votes % of votes
Martin Walsh  20,838 18.50%
John Connolly  19,420 17.20%
Charlotte Golar Richie 15,536 13.80%
Daniel Conley 12,764 11.30%
Felix Arroyo 9,888 8.80%
John Barros 9,138 8.10%
Rob Consalvo 8,592 7.60%
Michael Ross 8,155 7.20%
Bill Walczak 3,822 3.40%
Charles Yancey 2,388 2.10%
Charles Clemons Jr. 1,799 1.60%
David Wyatt 334 0.30%

In this system voting is done on a non-partisan basis and the top two vote getters move on to the final election on November 5th. This election is remarkable in that long time incumbent Mayor, Tom Menino, is retiring so there is an open race for the first time in 20 years. The dynamics of a once in a generation opportunity attracted a field of very strong candidates. Not surprising then, the result of first round voting was split so that the two winners emerged with a combined total of just under 36% of the vote.

The question posed to the students is what constitutes a "democratic" method of electing officials. Under our system we have two forms of democratic participation, direct democracy, which allows the people through mechanisms like initiative and referendum to have a direct say over the passage of legislation or creation of constitutional law at the state and local level. The other form is representative democracy where we elect our officials. According to the eminent political scientist Robert Dahl, Democracy consists of far more than just the form of selection, but that form must allow for the weighting of their preferences equally with no discrimination because of content or source. There is more in his work, A Preface to Democratic Theory.

At first blush that seems to be the case. All voter preferences are equally reflected in that in totaling 112, 674 votes all are counted equally. Until they need to turn into a decision and then the top two finishers win and the rest don't. Which means that the preferences of over 64% of the voters are not reflected in the participants moving onto the final round. In the second round the winner is the candidate with over 50% of the vote, but does that actually represent a majority given that the first choice of almost two-thirds of the voters is no longer and option.

This is why advocates for voting reform pose options such as Alternative Vote, where voters can rank order their preferences. Under that scenario the complaint heard about the Boston result, crowded field of candidates including six candidates of color, yet two Caucasian males emerge. For example, under an Alternative Vote, by rolling up the lesser preferences of the bottom candidates someone like Charlotte Golar Richie could have challenged the top finishers. It will be interesting to see if the second round of voting this year results in a higher turnout. In 2009 when Mayor Menino faced a serious challenge the first round brought out 81000 voters in a four way first round and nearly 110,000 in the run-off between Menino and Flaherty. In that case almost 75% of the voters in the first round saw their choices move on to the second round.

Full disclosure, as readers know I did spend some time helping Marty Walsh in this election and I will be thrilled when he is elected Mayor.