In defense of social insurance

oldmanyellsatcloud_thumbOn Twitter I said: “The basic income movement is an attack on the strongest political pillar of social-democracy: social insurance.” I’ve inveighed against the Universal Basic Income in the past, so here I go again. Another edition of old man yelling at clouds.

Throughout history, in certain communal settings some variant of the Marxian “From each according to his abilities, to each according to his needs,” has applied. In a naive sense, the UBI is not far off from that ideal. What economists call a demogrant* — a fixed, unrestricted, unconditional transfer payment to every individual (to each according to his needs**) — would presumably be financed by some kind of progressive tax (from each according to his abilities). I have no quarrel with the ideal. The problem is that it’s an utter fantasy that beclouds thinking about more plausible social policies. It’s a distraction from the need to defend really-existing social insurance and to attack the devolution of the safety net (about which a bit more below).

The most tenable model to which we could aspire for a step forward in social progress is some version of social-democracy on display in Western Europe. By a variety of measures of inequality, poverty, and other indicators of human well-being, this model offers hope of improvement. Social-democracies are certainly far from perfect, but if we want to be ambitious but also practical, it’s the direction in which to head. The foundation of these systems is extensive programs of social insurance. (Incidentally, these programs are not as a rule funded with highly progressive tax systems.)

Now it’s appealing to imagine the  from-each/to-each model as a type of social insurance. We all pitch in and we take care of each other. The difficulty is that this pushes the concept beyond the breaking point. Actual social insurance is more bloody-minded: what you get depends by some specific formula and set of rules on what you pay. It accords with common notions, whether we like them or not, of fairness. This contributory backbone of the system is what has solved the problem of gaining political consent for massive tax-and-transfer programs. There is no modern precedent for a UBI of comparable scope. (In the Alaskan bonus payment system, there is no visible Peter who is paying Paul. It’s like manna from heaven.)

Social insurance offers more than just a pay-in/pay-out mechanism. As insurance, it protects ordinary people from risks they face. Insurance is more efficient than mere saving. Individual saving can be inadequate in a number of respects. Take the case of Disability Insurance. After some limited work history, the worker is protected against loss of earnings in the event of disability. It would take a lifetime to save enough to substitute for earnings in the event of disability. In the meantime you accept a reduced standard of living, for decades, to provide for a possibility that may never come to pass. That’s inefficient. Or suppose you become disabled before you have saved enough? Suppose you invest your savings in uncertain ventures. In general people don’t know if they will become disabled. Pooling risk — insurance — solves the problem.

The social part of social insurance permits the basic market-like insurance arrangement of you-pay/you-get to be shaped according to social values. Both the tax side and the benefit side can be somewhat progressive. There is room for some flexibility, but it is not limitless. Go too far in the from-each/to-each direction and you lose the political support available under an insurance rubric.

Much as been written about why the U.S. has such a retrograde system of social provision. I don’t expect to add to it myself, except to say that in this context it is only social insurance that provides a political platform for collective provision for individual well-being. Straight-forward, simple redistribution is not well supported. It’s all we can do these days to protect what benefits have already been won.

It’s true that we have non-insurance programs providing means-tested benefits: anti-poverty programs. These programs are under attack. This is not a sea-worthy vessel you would want everyone else to board. I have urged UBI partisans to direct their attention to the atrocity of welfare reform. The biggest hole in the U.S. safety net is the misery of families with children whose wage-earners are unable, often for reasons beyond their control, to solidify an attachment to the labor market and the social insurance provided to wage-earners.

In 1972 Senator George McGovern proposed a demogrant of $2,000 as part of his electoral campaign for president. He received 17 electoral votes, winning Massachusetts and the District of Columbia, to cheatin’ Dick Nixon’s 520 votes.

We still live in Nixonland.

Tomorrow I’ll offer some remarks on the latest Vox blast on the UBI.

* Not to be confused with a negative income tax, social wage, or the Earned Income Tax Credit, each of which differ from a demogrant in fundamental ways.

** Please do not mistake my characterization as a suggestion that the UBI is dangerously radical or communist. I’ve got no problem with communist, as an ideal. The problem is that the UBI is utopian in an unedifying way.

Meet the new war, same as the old war

I echo Chris Hayes’ incredulity, expressed last night, at Barack Obama’s long strange trip: from his rise to political stardom as an opponent of the (second) Iraq invasion, to his devolution as a born-again interventionist, proposing to reinject the U.S. into the very same war he originally opposed.

It looks like the same war because the U.S. enemy in Iraq was Saddam Hussein and his base in the Sunni population. The Shiites and Kurds had nothing but hatred for Saddam. So this was a war on the Sunni. This onslaught continued in the person of the Shiite-dominated, U.S.-backed Iraqi puppet government.

The newest Hitler-of-the-month, the so-called Islamic state or ‘ISIS,’ is nothing but the reemergence of the Sunni under a distinctly less wholesome leadership. We traded Saddam for a group that looks worse than Al Qaeda, from the standpoint of non-Sunni minorities in Iraq, and possibly for the U.S. too, eventually.

The exploitation of the execution of American journalists as an excuse for war is patently ridiculous. I have no less regard for the victimized Americans than anyone else who doesn’t know them. But the U.S. government doesn’t start new wars because Americans are murdered. After all, the USG murders Americans all on its own. It needs better reasons, by its own lights. I wouldn’t get stuck on the beheading thing either. A U.S. ally does beheadings, recently for the criminal offense of “sorcery.” This particular ally will be enlisted to join against the barbaric ISIS.

The more important reason the executions are an insane pretext for war is because that was precisely their purpose. ISIS is saying, please attack us. They are smart enough to know the U.S. is dumb enough to oblige them.

My standard approach starts with the question of efficacy. Can some kind of escalated U.S. assault on  ISIS accomplish its objective? If it can’t, all the moral considerations pro and con are irrelevant. If you listen to area experts, rather than rabid baboons in pin-stripe suits, the efficacy is dubious. You might be able to blow up all their new toys (courtesy of the U.S. government, via the Iraqi joke army). But their grip on the population will remain. This is a population that is disaffected from the U.S., ISIS or no ISIS. In the past there are cases where the USG has conquered unfriendly populations and pacified them. This is not going to be one of those cases.

The U.S. was not greeted as a liberator in Iraq. What combination of other countries would receive a more congenial reception, if it put ground troops onto the field against ISIS? The great oil sheikdoms, lead by the great beheading nation of Saudi Arabia? Other white folks from Europe? Shiite Iran? Will Kurdish or Shiite troops be willing to fight ISIS on turf in which they have no political interest?

I can’t get upset if the U.S. helps the Kurds, with anything they need, including air support. But what is in store may go well beyond that and contain its own dynamic of escalation. In the end, the question may still remain, who will march into Sunni territory, extirpate the opposition, and construct the political basis for a new Sunni politics? I don’t see it.


MaxSpeak at the movies: “Murder, My Sweet”

I’ve been asked to resume doing movie reviews. I rarely go to the theater. Hey I’ve got a 52″ screen. Don’t need to. One Transformers film is enough.

Proof I’m getting old — I watched a Turner Classic Movie, and it was great: Murder, My Sweet, from the Raymond Chandler novel Farewell, My Lovely. (Not to be confused with the 1975 remake starring Robert Mitchum.) This one stars Dick Powell and people I’d never heard of, with the exception of Mike Mazurki. It came out in 1944.

Mike Mazurki (6'5")

Mike Mazurki (6’5″)

The violence in the movie is pretty tame for a murder/detective flick, no great loss. None of the actors’ physiques would get them into a screen test today. Powell in one scene is wearing pants and just an undershirt when The Dame walks in and compliments him on his build, not much different than Ozzie Nelson’s. These days he wouldn’t frighten anyone in a dark alley. By contrast, the heavy Mazurki (born Mikhaił Mazurkiewicz, an Austrian), had been a football player and professional wrestler. He looks like he could more than hold his own with any of today’s action heroes. Moreover, Mazurki is a pretty good actor as a low-brow thug. In reality he had a college degree and spoke better English than Schwarzenegger.

The plot is reasonably intricate and the dialog snappy. It works more as camp than as seriously gripping, but it’s still great fun.

The director was Edward Dmytryk. He had done some anti-fascist movies in the Forties. He later ran afoul of the red scare, did time, got blacklisted, eventually appeared before HUAC, and named names. He got back to working in the U.S. afterwards; the most memorable later effort was The Caine Mutiny.

I could detect no political memes in this film. One bit of prescience, at one point the protagonist Powell is injected with psychotropic drugs and suffers hallucinations, the depictions of which are also campy, given the limited state of movie technology.

I hate movie reviews that preview the plot, so I won’t do it. If you like film noir detective movies, you should like this. One of my favorite courses in college was called “The Tough Guy Novel,” taught by one Peter Manso, who later became a big-time author. We read Raymond Chandler, James M. Cain (The Postman Always Rings Twice, Double Indemnity), Dashiell Hammett, others I don’t recall at the moment. Great stuff.

Hillary Clinton and stimulating war criminals she has known

020513ClintonKissingerEverything old and evil will be new and evil again.

“Anybody aiming for high office in America has to be able to swear they’re capable of dropping the Big One. Obama knows that. HRC knows it too, but nobody bothers to ask her, since they know the answer anyway. That woman probably uses a bomb sight to target in on her breakfast grapefruit.” — Alexander Cockburn, 4/23/06

Expect nothing and you’ll never be disappointed

voting-paper-ballotsIf Arianna Huffington is too edgy for you, here’s Joan Walsh of Salon. She’s another tribune of presidential powerlessness. Once again the naive Obama critics harbor a foolish belief in a magical president. Once again Cornel West is name-checked, succumbing to “cruelty and irrelevance.” Cornel, cruel? The dude loves everybody! How could he be cruel? I sure don’t love everybody, and I can be cruel.

The article subhead is “what the left must really do to defeat the wingnuts.” (Spoiler alert: the answer is stop being lefty, shut up, and vote for Democrats.) Walsh tries to have it both ways. She has criticized Obama too, really. In fact, most of the column is about bad Republicans. This gives her the right to lecture us on not expecting too much.

Let’s tick off a few things Obama could have done, that did not depend on the Congress, but didn’t.

1.  He could have said, every day, that additional deficit spending, lots of it, would facilitate the otherwise anemic economic recovery.

2.  He could have prosecuted miscreants in the financial sector, instead of putting that task in the hands of a fellow in DoJ who ended up joining that sector.

3.  He could have reduced the rate at which U.S. drones blew up wedding parties and unindicted U.S. citizens.

4.  He could have defended the right of assembly of Occupy and Ferguson demonstrators, and freedom of the press for reporters who covered them. (Walsh calls this “stagecraft,” rather than “statecraft.”) He could have restrained the NSA and prevented them from lying to Congress.

5.  He could have provided a word of encouragement to the folks who besieged the Wisconsin state capital in 2011.

I could go on  . . . The point is that Obama could continue promoting policies that the Republicans have blocked, and he has had free rein to screw up foreign policy, homeland security, and the administration of justice. And he doesn’t need permission to speak. So the Green Lantern/magical president memes are just crap. Apologetics for the DP: shut up and vote.

The common thread is the desperate need of electoral obsessives to deny the possibilities of independent (of Democrats) political organization. I vote Democrat, and I encourage all to do so, but there is no actual party to join. It’s a machine to harvest your credit card and get you to the polls. Outside of that, there is nothing there. Your contributions pay for elites to hobnob with each other. That’s the party. You’re not in it.

It is not even necessary to specify here where independent action should go. I’ve got my own preferences. The point is the conversation should proceed from there. It is the starting point for progress. Vote-nagging is not progressive politics.

By the way, we did vote for Obama like good little boys and girls, and still . . .shit

The worst thing that Barack Obama has done

ScreenHunter_05 Aug. 31 19.31I don’t think I’m naive about the inflexibility of the political system, as far as its congeniality towards progressive policies goes. I have worked in and around Washington, D.C. since 1980. Big, liberal projects require overwhelming political support. Small gains are vulnerable to reversal. No victories are permanent. Public opinion is usually lacking and requires time to come together, solidify, and sustain. That is one reason among others I was unjustifiably optimistic about an Obama presidency. Obama did not just have the right approach on some issues. He had a movement. It was called Obama for America, or OFA. It promised to be a force in the future for continued progress by shifting public opinion and electoral outcomes. Obama himself alluded to the function of such a movement.

What would a vibrant, effective movement look like? First of all, it would be a place for inquiring persons to go. It would be built to expand. There would be regular meetings everywhere, with public participation. It would provide a social outlet, not one solely devoted to political meetings. There would be democratic discussion of social problems and remedies. There would be plans to mobilize ever-wider circles of people in a coordinated way. The gatherings would not resemble so-called “town meetings” routinely staged by politicians, which meetings consist of Numero Uno controlling the microphone and batting away serial remarks from the bleachers, to the cheers of his supplicants.

After the 2008 triumph OFA morphed into Organizing for Action. And just what is that? It’s an email-address-gathering machine for fund-raising. Visit the website. Sign a petition to raise the minimum wage, provide your email address, and sure as shooting you will start to get emails urging you to donate money to OFA, ostensibly to further that objective. Browse all the Administration propaganda. My favorite, the economy section. Boosts for the minimum wage and unemployment insurance. That’s it.

How about an event? Is there somewhere we can go, to do something? Under “attend an event,” I search for what’s happening within 100 miles of my zip code (just outside Washington, D.C.). Between today and the end of this year, there are two events. (Both proposed, neither set.) One is a voting rally in October, the other is a symposium on women in the arts. Organizing For America is organizing squat. OFA is big on voting, but on political participation, not so much.

merchFor all practical purposes, OFA is just another letterhead plus perpetual money vacuum. For a feeling for what real movements are like, read Mike Kazin on The Populist Persuasion, or Lawrence Goodwyn on The Populist Moment.

There is sad precedent for this demobilization. Jesse Jackson ran for president a couple of times. He too had the makings of a movement, and he too demobilized it. A fellow named Ron Daniels could tell you about that. Bill Clinton had the makings of a movement too. His administration launched a half-hearted bus tour to promote Hillary’s health care reform. The tour was viciously attacked, failed to organize serious support, and fizzled along with HillaryCare.

Why can’t leaders mobilize people on a sustained basis? Why is the Democratic Party just a shell run by elites? They don’t want people mobilized.

They’re afraid of you.


Unradical chic

Not Jonathan Chait

(Not Jonathan Chait)

Jonathan Chait did an annoying hit piece on _____ in New York Magazine. I put in a blank there because I expect to reuse the text. This time around the names to fill in are Cornel West, Tom Frank, and Mike Kazin. The subject is alleged “hatred” of the president. I will probably be able to reuse that sentence too.

Describing a position with which you disagree as motivated by “hatred” is one way to avoid engaging any actual arguments. Your adversaries don’t have any substance, they are just emotional: too stupid to be afforded the respect of having an argument worth acknowledging. These dummies have tenured positions at Princeton and Georgetown and/or have written well-regarded books.

Chait links to two offending pieces (linked above). His central point is common among defenders of the president: that critics fail to see any real constraints on what the president could have accomplished. Defense of Obama’s failures goes under assaults on the “Green Lantern theory of presidential power.”

While presidential power can be exaggerated, so too can the inertia of public opinion. There are positions that enjoy massive public support but little presidential effort, such as universal background checks for firearms purchasers. That doesn’t mean Congress will just roll over in support of positions that their constituents actually support, but it does indicate political potential. If nobody is talking about it, when does anybody think a change would be possible? There are other positions where public opinion is malleable.

Speaking for myself, I’d be happy to stipulate that Obama got most of what could be gotten in the realm of domestic legislation when he had Democratic majorities in the Congress. Health care could have been somewhat better, but not much. Ditto Dodd-Frank. The first stimulus was about as big as it could have been.

The main problem in the big domestic policy cases was the cynicism that the Administration and its apologists share: that public opinion is something they are stuck with, rather than something they can influence. I do not suggest this could have been changed enough in real time to affect the legislative result. I am certain if no ambitious policies are ever put forward and motivated, we will never get them. That’s the defensible truth of the West/Frank/Kazin critique: it’s not so much the policy compromises at the end of the process, it’s the rhetorical compromises at the beginning and right on through to the end, and beyond. It’s the lack of any sustained focus on any big, affirmative national goal (Kazin’s point). The prospect of some future innovation in policy seems foreclosed. The Obama presidency is over. He has turned himself into a lame duck.

An example. Obama’s own advisers knew a bigger stimulus was needed, one larger than $800 billion. (With the benefit of hindsight, even the bigger numbers would have been inadequate.) So the Administration took a deal for $800 billion. Fine. The problem was, they never motivated the need for something much larger. Their rhetoric was further crippled by the false notion that deficit reduction was something we needed to worry about any time soon. Even now, they tout deficit reduction, notwithstanding its harmful effect on employment. The advocacy for infrastructure, never incidentally put forward as any kind of strategy, is a sideshow. It should be the main event. If the GOP won’t give you the $20 billion you’re asking for, why not say we need $200 billion more? (Which we do.)

Perhaps at every point the president believed deeply everything he said. That brings up the bamboozle issue. A different person contested in the primaries in 2008. I’ll give you another example. In the debates Obama upheld the value of increasing the payroll tax to “fix” Social Security. Not my preferred solution, but whatever. After the election that notion sank beneath the waves, never to reappear. Instead we got support for the Simpson-Bowles bullshit: benefit cuts amidst a bouquet of other policy canards. That’s not a minor difference on a major issue.

Even presidential speech with no immediate legislative implications can be important. Here again the president a) failed; and b) contradicted prior stances. Two examples: during the goings-on in Wisconsin, the president might have said more than public school teachers ought to be respected, even though in the campaign he was Mister Labor Movement. This was a huge leftish uprising. Of white people. The White House was mute. For Occupy Wall Street, there was a national pattern of police abuse, including numerous violations of civil liberties. Ditto in Ferguson, MO. Did our professor of constitutional law president say anything? If Kennedy could deploy the national guard to protect black school children in Alabama, isn’t there something the Department of Justice could have done to defend the right of protesters to stand in the street in Missouri?

There remain huge areas of executive authority for the president that are not subject to micro-management by the Congress. One is foreign policy, another is homeland security, another still is law enforcement in regard to the financial crisis. Elaboration in these areas is left for another time. The point here is they are vital areas where the White House had substantial freedom of action. You can’t blame the manifest deficiencies on the Republicans.

The bit that has most got Obama’s dander up lately is the barbaric beheading of an American journalist by the latest Hitler-of-the-month, the so-called Islamic State (‘ISIS’). Events in the world have handed him a focus he could not bring himself to gin up on his own.

(Evidently not so barbaric are beheadings carried out on a routine basis by staunch U.S. ally Saudi Arabia. About some recent U.S. exercises in capital punishment, the less said the better. More barbaric, there’s the Israeli pummeling of Gaza, supported by the Orwellian rhetoric of an Israel besieged.)

ISIS now threatens to absorb all the political oxygen. Nothing else of consequence will be done. What does beckon is the morass of interventionism, and the way is prepared for the person who promises to outstrip Obama in this regard: Hillary Clinton.

The way is also open for a peace candidate in the 2016 primaries. More generally, there is space for new voices on the left willing to contradict the awful inevitability of a second Clinton presidency (again). A critical spirit must begin with the inadequacies of the current Administration. For that we will need other sources than New York Magazine.


“We are blues people. The blues aren’t pessimistic. We’re prisoners of hope but we tell the truth and the truth is dark. That’s different.”

— Cornel West

Today in liberal self-abuse


Hammer time

Hammer time

There’s a bit of a boomlet in counter-intuitive liberal assaults on the corporate income tax.

Bob Reich, amplified by Markos on Daily Kos, suggests we ditch the CIT and increase other taxes we like (on capital gains or stock transactions). My friend and brother from another mother Dean Baker has a baffling column on how eliminating the CIT would somehow cripple the tax avoidance industry. For a counter-argument, see Jared Bernstein. For the Slatepitch approach, see Matthew Yglesias.

While there is empirical research to support the premise that at least some of the CIT is borne by workers, 1) that isn’t the worst incidence one could imagine (consumers would be worse); and 2) that still leaves some of the burden on capital. (There is no evidence, none, contrary to Reich, that the tax is borne by consumers.) That hardly provides a good reason to pee on an existing revenue source in favor of politically dubious alternatives, especially now. Repeal of the CIT is likely to lose revenue, on net.

Economists have been disagreeing on the incidence of the CIT (who bears the burden) forever. As the paper I link to shows, by the formidable Jennifer Gravelle of the Congressional Budget Office, it’s not easy to pin down. Ergo confident assertions of this or that are dubious on their face. First do no harm is a good principle to restrain repeal proposals.

Reich also supposes there is some secret sauce in eliminating the CIT effect on domestic production. Notable in BR’s blurb is the utter lack of empirical evidence. It is an argument based on pure logic, notwithstanding there are counter-arguments that are equally logical.

One ought to recall the late 90s when no such tax relief was required to observe remarkable gains in employment and wages. (Didn’t somebody write a book about that?) This unfortunately dovetails with Obama Administration’s cockamamie plans to doodle the CIT and somehow incentivize domestic manufacturing.

Then Dean weighs in suggesting that eliminating the CIT will cripple tax avoidance. Well sure that is one way to eliminate tax avoidance; eliminate a tax. But untaxed corporations will gain value as tax shelters and spawn tax planning aimed at extracting cash from corporations at reduced or no tax rates. Increased dividends to the rich will stimulate their own use of tax planning. The same for increased capital gains. Capital gains taxation is the Disneyland of tax avoidance. And then, as Dean acknowledges, there is also the possibility of individuals erecting personal corporations to shelter income, which possibility Dean imagines can be easily precluded.

It’s all about aggregate demand, folks. The only tax reform worth discussing is one that would increase revenue, once the economy gets back to full employment. In the meantime we need higher deficit spending and Janet Yellen sitting on interest rates. All the rest is noise.