Monthly Archives: December 2013

Centrists Attack, Liberals Strike Back: Should Democrats Copy the Political Tactics of the Right?

This question came to my mind recently, while observing an interesting back and forth in the news between two factions of the Democratic Party.

Centrists Attack, Liberals Strike Back

Elizabeth Warren

Elizabeth Warren

A lobbying group called Third Way published an opinion piece in the Wall Street Journal, “Cowan and Kessler: Economic Populism Is a Dead End for Democrats.” Inside they say, “The political problems of liberal populism are bad enough. Worse are the actual policies proposed by left-wing populists.” They go on to attack policy proposals for Social Security and Medicare supported by Senator Elizabeth Warren and others. This excerpt characterizes the picture they paint of Sen. Warren’s wing of the democratic party:

The movement relies on a potent “we can have it all” fantasy that goes something like this: If we force the wealthy to pay higher taxes (there are 300,000 tax filers who earn more than $1 million), close a few corporate tax loopholes, and break up some big banks then—presto!—we can pay for, and even expand, existing entitlements.

Liberal democrats lashed back, as in the New York Times, “Coalition of Liberals Strikes Back at Criticism From Centrist Democrats.” At least four advocacy groups, including the Progressive Change Campaign Committee, urged their members to contact Congregational Democrats who are affiliated with Third Way. Senator Warren wrote a letter to CEOs of six large banks, asking them to reveal the groups they help finance, implicitly raising questions about the funding sources for Third Way.

In the meantime, Paul Krugman debunked the economic arguments in a blog post, “Pathetic Centrists.” He argues, in addition to the Democratic Party becoming more progressive, that “centrists are also suffering from their own intellectual bankruptcy.” His points, in defense of the Warren camp, include cost savings from President Obama’s Patient Protection and Affordable Care Act, and the slowing of health care costs generally. He summarizes:

It’s just so tired and tiring. If being a “centrist” means fact-free denunciations of progressives for not being willing to cut entitlements, who needs these guys?

David Weigel, of Slate, summarized the story in the article, “Left Hook, How a few liberal activists got the mainstream media to cover a “war” they made up.” The article provides good information, although I don’t see the point of characterizing this as a “made up war.” While it is true that pundits and think tanks have debated these issues for years, that does not mean that this flare up is not news. After all, one faction of a political party is aggressively using social media to get out their point of view, and trying to counterbalance another faction that has more funding. That seems to be a legitimate struggle.

Weigel describes Third way as an organization founded in 2005 by “New Democrats” that lost red state elections, and wanted to focus on how to recapture the center. He quotes Matt Bennett, VP of Public Affairs at Third Way, as saying this about the controversy:

We didn’t view the president’s speech last week as populist, for example. He was talking about poverty—and that’s a Democratic point of view, what he said. We view populism the way we view right-wing populism. It’s a way to avoid making choices. Right-wing populists say that if we cut government down, everything will be better. The idea on the left is that if we can just expand entitlements, everything will be better and we don’t have to make choices. And we just don’t agree.

This sounds like a reasonable difference of opinion, but Elizabeth Warren is not backing down from this fight, as shown by her recent interview with Mother Jones, “Elizabeth Warren Fires Back at Centrist Dems on Social Security.” She says:

If we made no changes at all to Social Security, it would continue to make payments at the current level for about 20 years . . . Modest adjustments will make certain . . . we could increase benefits for those who need it most.

She is not alone in discrediting the arguments of Cowan and Kessler: Michael Hiltzik also provides a detailed rebuttal in the Los Angeles Times, “How to debate the ‘undebatable’ falsehoods about Social Security.” Also, Richard (RJ) Eskow published a strong counter argument in the Huffington Post, “The Democrats’ ‘Third Way’ Quarrel Could Change Your Future.” In addition to discussing the original article that started the controversy, Eskow talks about possible motivations when he says:

This is not an “inside baseball” story about politics. It’s a battle for party control whose outcome could affect every household in the country. If this quarrel is to be remembered — and it’s incumbent upon genuine progressives to make sure that it is — it should be remembered as an attempt by a the corporate class to retain control of the Democratic Party and limit the leftmost limits of political and economic debate.

In our two-party system, this struggle could determine whether voters are offered a genuinely democratic and equitable economic agenda anytime in the near future.

We all worry about corporate interests having too much power. With the Democratic Party on the ascent, it is no surprise that these interests would try to keep control. Power, in corporations and on Wall Street, is more important than party, because the objective is to control policy. Senator Warren is right to vigorously defend her positions. She has the data, and she is advocating in the best interests of the majority.

Should Democrats Copy the Political Tactics of the Right?

It is frustrating to watch well-funded interests produce disinformation faster than it can be debunked. It is frustrating to watch people buy into propaganda because they can’t or won’t do the research. Maybe Third Way is advocating for Wall Street Interests. Nevertheless, we need to maintain discourse about difficult problems, while we root out bad information, unsubstantiated ideas, and lack of transparency.

What concerns me about this flare up is the suggestion that some liberals think it would be a good idea to adopt tactics used by the right (like the Tea Party) to push people out of office because they don’t uphold a single specific position. This is a bad idea. Consider this excerpt from, “Coalition of Liberals Strikes Back at Criticism From Centrist Democrats“:

Liberals have witnessed the success the right has enjoyed in recent years by using such tough tactics. Conservative groups have pushed Republicans to take a harder line, most recently over the federal health care law, and have seen their leverage with officeholders grow.

The last thing we need in this country are more litmus tests. We should remove politicians from office when they lack integrity, refuse to acknowledge facts, or ignore scientific experts. We should not, however, force them to hold uncompromising positions.

Democracy cannot flourish without people of integrity engaged in legitimate debate. If that is lost, then both sides of the political spectrum will become echo chambers of extreme positions, good ideas will be silenced, and discussion will be shut down. Sometimes progress is made one step at a time. Had Single Payer been beyond compromise, we might have failed, yet again, to enact any health care reform. The Patient Protection and Affordable Care Act is not perfect, but it is surely a step in the right direction. Just because a faction on the right uses intimidation and disinformation to govern doesn’t mean that all interest groups should do the same.

The Digital Revolution and the Inequality Debate

This article, “Sorry, neoliberals: Inequality is driven by greed, not technology,” by Sean McElwee, says in summary that “A new study shows low wages are really caused by low minimum wage, weakened unions and the effects of globalization.” As I mentioned in my series, “Working Till 2025,” this is part of a raging debate in economics that is going on right now. What I find perplexing is the attempt by many to characterize the problem as an either / or proposition. Consider this excerpt:

Mishel is more hopeful. After all, if inequality is the inevitable product of technological change, the only way to prevent higher inequality is to slow innovation. But Mishel is no Luddite. His State of Working America 2012 report (co-written with Josh Bivens, Elise Gould and Heidi Shierholz) argues that it is economic policy, not changing technology, that drives wage inequality. The decreasing value of the minimum wage, the weakness of unions and the impacts of globalization have all coalesced to keep down wages.

Sure, poor policy was part of the problem, but that does not mean technological change was not a factor. The financial meltdown was amplified by the invention of derivatives and high speed trading with computers. Seems kind of hard to argue that technology played no role there. Yes, policy changes are needed, but let’s make those changes with our eyes wide open. The is a complex problem with multiple facets, and we need to treat it as such.

In this article, “Gordon Versus The Androids,” Paul Krugman reviews a paper by Bob Gordon, and concludes that he is most likely wrong. Let me echo and amplify Krugman’s conclusion starting with this excerpt from the paper:

The analysis links periods of slow and rapid growth to the timing of the three industrial revolutions (IR’s), that is, IR #1 (steam, railroads) from 1750 to 1830; IR #2 (electricity, internal combustion engine, running water, indoor toilets, communications, entertainment, chemicals, petroleum) from 1870 to 1900; and IR #3 (computers, the web, mobile phones) from 1960 to present. It provides evidence that IR #2 was more important than the others and was largely responsible for 80 years of relatively rapid productivity growth between 1890 and 1972. Once the spin-off inventions from IR #2 (airplanes, air conditioning, interstate highways) had run their course, productivity growth during 1972-96 was much slower than before. In contrast, IR #3 created only a short-lived growth revival between 1996 and 2004.

So, the industrial revolution was more important than the digital revolution, and the latter created only a short-lived revival that ended in 2004? I’m sorry, but I most respectfully disagree. Krugman himself goes on to say:

So how are things going on the android front? A decade ago I would have said “very badly”: the field of artificial intelligence had marched from failure to failure.

But something has happened—things that were widely regarded as jokes not long ago, like speech recognition, machine translation, self-driving cars, and so on, have suddenly become more or less working reality. Our suddenly smarter machines aren’t intelligent in the way people are, and the way they do their work is nothing like the way we do it: the translation program doesn’t understand the text, the self-driving car isn’t consciously avoiding collisions. Instead, they’re using big data and correlations and so on to implement algorithms – mindless algorithms, you might say. But if they can take people’s place, does it matter?

He is reading the tea leaves: the digital revolution has only just begun.

Articles on Changing Economic Conditions

In this post, I’ll highlight a few articles that offer an update on changing economic conditions. To get your attention, Amazon’s Jeffrey P. Bezos reported in on CBS’s 60 minutes that he has plans to use drones to deliver packages to your doorstep. The video will show you the concept. Lots of media outlets covered the story.

In the New York Times, there was this recent article, “Europe vs. Amazon: Anger Rising,” essentially saying that people in Europe are unhappy with working conditions in warehouses. The article make reference to this article in the Huffington Post, “Amazon Warehouse Staff In ‘Slave Camp’ Conditions, Workers Say.” Here’s an excerpt from the Post:

Online retail giant Amazon makes its staff work under “unbelievable” pressure in “slave camp” conditions, with employees at their warehouses having to walk 11 miles in a shift and collect orders every 33 seconds, an investigation has found.

David MIchael, from Eugene Oregon, commented on the New York Times article. Here’s an excerpt of what he said:

Well, let’s see, most of the comments here are based on hear-say and personal opinions, not on fact. Here’s my experience as a current workamper (seasonal employee) … I like it. At age 76, I get up at 4 AM, check the internet for a half hour while sipping coffee. My wife makes breakfast, and then together we drive 15 minutes over to the Fernley, Nevada Warehouse. Our RV camping site is paid for by Amazon. By 5:55 AM we punch in for the day and we are ready to start a ten hour day. Normally, five days a week meaning one day of overtime pay. … I am grateful for the work to spruce up our retirement savings.

It would be so easy to get pulled into the “corporate exploitation” vs. “proud worker” argument. I don’t think that’s the right discussion, however, so I’m not going to go there. Workers are people, not robots. While I’m happy that Mr. Michael found a job at Amazon that he likes, that does not mean that these working conditions are acceptable to everyone. Mr. Michael is lucky because he has a choice: he earns his retirement and chooses to work at Amazon a few months a year to “spruce up” his savings. If everyone working at Amazon had such a choice then there would be no issue; the exchange of labor for money would work according to the ideals of market based capitalism. The problem is that some people have only a bad choice: work at Amazon or don’t work at all.

On another topic, Arindrajit Dube writes in the New York Times, “The Great Divide: The Minimum We Can Do,” and concludes that a 10% increase in the minimum wage would reduce poverty by around 2 percent. It is a long article, and he provides some of the same background that I discussed in, “Working Till 2025: Life is Tough These Days.” Nevertheless, he adds some excellent research that I had not referenced before. Here are a few excerpts from the article:

By 2011, … over 43 percent of low-wage workers had spent at least some time in college.

inflation-adjusted minimum wages in the United States have declined in both absolute and relative terms for most of the past four decades.

while higher minimum wages raise earnings of low-wage workers, they do not have a detectable impact on employment.

While the evidence may not convince the most strident of critics, it has shifted views among economists. A panel of 41 leading economists was asked recently by the University of Chicago’s Booth School of Business to weigh in on President Obama’s proposal to increase the minimum wage and automatically index it to inflation. A plurality, 47 percent, supported the policy, and only 11 percent opposed it, while the rest were uncertain or had no opinion.

Dube’s article is worth reading if you have the time. Paul Krugman wrote a new opinion column, “Better Pay Now,” that describes why he believes  we have good evidence to support raising the minimum wage, saying:

When it comes to the minimum wage, however, we have a number of cases in which a state raised its own minimum wage while a neighboring state did not. If there were anything to the notion that minimum wage increases have big negative effects on employment, that result should show up in state-to-state comparisons. It doesn’t.

He goes on to conclude:

An increase in the minimum wage, on the other hand, just might happen, thanks to overwhelming public support. This support doesn’t come just from Democrats or even independents; strong majorities of Republicans (57 percent) and self-identified conservatives (59 percent) favor an increase.

In short, raising the minimum wage would help many Americans, and might actually be politically possible. Let’s give it a try.

Raising the minimum wage is not the ultimate solution to future economic problems, but it is an intermediate step that we will likely have to take. As Dube points out, Roosevelt got the principle right when he said that working men and women are entitled to “a fair day’s pay for a fair day’s work.”