Class Always Tells

Class conflict - Wikipedia

At the risk of exploiting unforeseeable turns of events to validate all my priors, I want to argue that the unfolding of the 2020 Democratic primaries does not invalidate a class-based approach to politics. The exponent of this notion whom I want to criticize is Zack Beauchamp in “Why Bernie Sanders Failed.”

His basic argument is that the Sanders’ campaign strategy rested on two premises that didn’t prove out. One was to ground the appeal to the working class and youth, which fell flat because black voters supported Biden, white workers who flirted with Bernie in 2016 are now for Biden or Trump, and youth didn’t turn out.

Beauchamp concludes that identity and party affiliation trumped class. He fails to consider that those things are themselves founded on material self-interest, which is to say, class.

The normal reason to be interested in politics is out of an interest in policy outcomes. How will this candidate affect my life. Are her policies good or bad for the country. So the first question ought to be, what outcome should we prefer?

The horserace commentary seldom takes that concern as a point of departure, perhaps on the grounds that it reflects a bias. I would suggest that a neglect of policy is also a bias. Choose your poison.

There is widespread acknowledgment that Sanders’ proposals are popular, well beyond the boundaries of his actual electoral showings. If the usual warnings about climate change are taken seriously, then his proposals are not merely nice to have, but vital to the future of humanity. Beauchamp conflates a vote for Biden not merely with a rejection of Sanders’ proposals, but with a flight from material interest.

A different conclusion is that voters interpreted their class interest more broadly, and more pragmatically, than with support for Medicare For All, etc. In other words, they could have concluded that because Biden is the most electable of alternatives on offer, a vote for Biden was the best guarantor of their class interest. One could disagree with that reasoning, but it makes perfect sense, as far as it goes. Your class-obsessed author happens to think a second Trump term will create more irreversible damage and constitute a harbinger of a more open fascism. Defeating fascism is a legitimate, class-based interest too. The underlying sentiment is not necessarily detected from the responses to survey questions that ask, “What is more important, beating Trump or free college?” The refusal of Democratic Socialists of America (DSA), of which I’m a member, to endorse the only candidate who can prevent a second Trump, namely Joe Biden, is a travesty.

One could make similar arguments when it comes to identity or party affiliation.

I’m not the person to explain African Americans to anyone, but it seems reasonable to suspect that Trump is viewed as profoundly inimical to black material interests, over and above his class warfare. Trump screws the working class, but there’s an extra turn of the screw for minorities. Nor does it take a genius in a minority group to realize that political power depends on alliances, which points back to electability and class consciousness. In other words, African Americans understand they have some common economic interests with a broader group – the working class, so they see the Democratic Party as most deserving of their support.

When it comes to women, anyone who does not think reproductive rights are unrelated to material interests just needs to fall back. As for racial or religious minorities, a pragmatic choice should not be conflated with an indifference to class.

It is true that minorities and women may perceive a material interest that is often not well-served by a narrow class-oriented politics. The dilemma is that there is no viable, alternative way to pursue that interest, other than accepting the limited rewards that come from Democratic Party rule. Support for an often disappointing alternative is somewhat compensated for by hopes of progress, and indeed progress – incremental, positive reforms – are often observed.

When it comes to party, of course Sanders has always based his appeal on not being a Democrat. But why are Biden voters Democrats in the first place? Is it possibly out of some conception of their class interest? I don’t think one can reject this possibility out of hand, or legitimately ignore it altogether, as Beauchamp does.

Another angle of criticism of Sanders is the claim that voters do not act on policy, so a programmatic campaign lacks the juice for voter appeal. This could be read as another knock on class politics, but here again a preference for an anodyne appeal based on ‘values’ or warm fuzzies, a performance rather than a platform (Hi, Senator Booker!), is not a neutral policy stance. By foregoing policy commitments, we simply cede decision-making flexibility to the powers that be.

I do think the Sanders movement is hampered by some misconceptions and biases.

One goes to a running argument I’ve had with anti-Sanders voices complaining that he failed to drop out in 2016 or this year when it became obvious he could not be nominated. My point was that the Sanders campaign is a movement, not a mere electoral vehicle. It’s raison d’etre is to be self-sustaining, indefinitely. No letting up, no permanent victories. A primary campaign is just another opportunity to preach the gospel, one that some on the left discount to their disadvantage.

It is possible to continue to campaign, even compete with Joe Biden, without diminishing his chances in November. In fact, I would argue that a continued campaign could enhance those chances, providing it focuses its fire on Trump. If I was Sanders, I would focus on the locales where I had the best chance of turning non-voters or Trump voters into Democratic voters.

Civil criticism of Biden is conducive to party unity and heightens the contrast with the current, barbaric administration. The contrast also tends to debunk likely Republican charges that Biden is some kind of crypto-socialist. Moreover, the other extreme of Bernie-or-nobody reduces the prospects for future contenders from the left for Democratic Party nominations. You can’t expect to be welcomed to compete within the party if you walk away after a defeat. Nobody wants to play heads-I-win/tails-you-lose.

Ironically the campaign itself may have lost sight of this, its fundamental mission. One factor is its failure to discipline the ranks of its most toxic supporters, which diminishes prospects in November, as well as for the indefinite future. I happen to think that factor is highly overblown, but it is not utterly without significance.

The other was the reported belief that Sanders could win the nomination if he could beat the other candidates one-on-one with pluralities of votes, what we could call a thirty percent strategy.

Both of those notions may have been magnified by the urgency of winning this year by hook or crook, since it will be Sanders’ last rodeo. But if we acknowledge the campaign is an ongoing movement to radically change capitalism, not just an electoral campaign, then it should be realized that this is not accomplished with 30 percent pluralities and a Congress full of meh Democrats. It’s a long-term project, a marathon rather than a sprint. Politically it requires not a thin majority, but a crushing one.

Moreover, it must be about more than Sanders. There ought to be a new raft of leaders that are being groomed to take over. I love AOC as much as anyone, but we need more than one or four of her, and probably some with a decade or two of additional experience. A singular leadership lends itself to personality cults.

I go back to the question, what do we want? If it’s ultimately the Sanders platform, the working class is the logical vehicle. It would be foolish to fail to appeal to all who would benefit from one’s proposals.

There has been an argument that racism has been indelibly ingrained in white people since the dawn of America, but in one sense that is beside the point. The nature and doings of racism are shaped by the social and economic environment. There have been periods when class power reduced the salience of race. In particular, the industrial union movement in the 1930s, which included not a few profoundly racist white workers, wreaked enormous, positive changes that benefitted the entire working class. Clearly those benefits were not uniform across racial lines, but they left everyone better off.

In more recent years, the Jesse Jackson campaign resonated with a noticeable slice of the white working class, and we also have stories about Obama-to-Trump voters. Given the closeness of the 2016 election, it only requires the defection of a slender margin of such Trump voters to swing the outcome to the Democrats.

The usual alternative proposed to class politics is an appeal to ‘the suburbs.’ This is a bit of a misnomer. Of course, there are working class suburbs. What’s really in question is politics without much of a redistributive edge. A ‘suburban strategy’ is just another way to evade class issues, an evasion that is equivalent to an anti-working-class posture. There is no neutrality in this dimension. You’re always on one side or the other.

A common attack on Sanders was his neglect of race and gender. While he is fair game for that criticism, when the choice was between him and Hillary Clinton or Joe Biden, any hint of a relative shortcoming on issues of race is ridiculous. There was more grist for this mill in the case of gender, but only in comparison to Clinton.

It remains the case that removing the Trump Administration is a necessary condition for progress, since progress requires survival. Another four years of Trump further erodes voting rights, especially for youth and minorities, fills out the Federal judiciary with right-wing ideologues, and removes all regulatory constraints on capitalist predation. In that scenario, survival, much less opportunities for our revolution, look unlikely.

All indications are that the Sanders movement, the U.S. social-democratic movement, will keep banging away on its class program. It has obviously gotten the message that it needs better roots in African American communities, better turnout among youth, and more difficult work cracking the white working class.

Coming of age in the 60s, my awakening to the country’s racist and imperialist moorings led me to think a revolution was not just urgent, but because it was urgent, it would also be possible in a relatively short time. The former does not imply the latter.

Lost in the history of the New Left, a wise woman once said something to the effect, “We had convinced ourselves we would make a revolution. But revolutions are not made. They are rare events.” Practical possibilities do not follow from moral imperatives.

These States

Government Budget Cuts Programs for Elderly

I ought to get my wonk on and write about the priority of bolstering state and local government resources, since I’ve worked on this intermittently since the 80s. This crisis will blow a huge hole in state government budgets, due to increased expenses and greatly reduced revenues. When I was at the Government Accountability Office (GAO), I worked with the group that designed the Medicaid bump-up for Obama’s recovery act to aid the states. I was in the formula gang.

Federal efforts in this regard were notably inadequate. The state-local sector suffered a huge loss during the Great Recession, which meant less money for the full gamut of public services that people rely upon, and a slower national recovery from the recession. At GAO, we couldn’t tell Congress how much to spend on aid, but we could suggest the most efficient way to distribute it.

Ezra Klein once remarked that the Federal government was like a huge insurance company with an army. I don’t know if that witticism was original to him. The basic point is that, aside from deploying military force all over the world, what the Feds mainly do is mail checks to health care providers (Medicare), seniors and the disabled (Social Security), and state governments (Medicaid).

Services are delivered by state and local governments. These governments lack the borrowing and money-printing capacities of the national government. They are obliged by law and by economic reality to balance their budgets, at least approximately. They need to keep spending in line with revenues, in order to convince lenders the government’s loan obligations will be honored.

An exception to strict budget balance is the practice of capital budgeting, which allows for long-term borrowing, principally for capital projects. The ability of governments to borrow, by selling bonds, hinges on their perceived ability to meet their debt-service obligations. If their finances are a mess, they must agree to pay higher interest. Borrowing will cost more. In any event, the scope for this “off-budget” borrowing is limited.

State laws regarding finance are relevant insofar as they are forced to rank debt obligations above other spending, even for basic services like public safety, water, or sanitation. It helps if a capital project comes with a guaranteed revenue stream, such as the tolls for a bridge. Those factors are what disciplines state and local budgeting. In a downturn, state and local governments can only deal with lost revenues by cutting services.

Years ago, I organized a seminar for a bond expert who noted that although the state government of Illinois was a financial basket-case, its law protected the bonds it sold. Creditors would be paid before anyone else. In this sense, state governments rarely go bankrupt. There are a few cases of local governments going bankrupt. Detroit, the District of Columbia, and Puerto Rico are notable examples. In extreme circumstances, the local governments are effectively superseded by some kind of control board. The citizens bear the burden of a downturn, in the form of a contraction of vital public services. The creditors are usually made whole.

Two key considerations in designing aid provided according to formula are targeting and timeliness. Targeting benefits from more data, but in the case of state and local governments, some data is too infrequently available for use in combating a recession. Moreover, older data can fail to reflect changes on the ground, in the interim between when data is collected and when it is provided. Target effectiveness erodes over time.

Less data pertaining to state and local jurisdictions is available on a timely basis. You can forget anything like Gross Domestic Product at the state level. There are published numbers, but they involve some hocus-pocus.

The best option is the local unemployment rate, which is revised every month. It is widely understood (at least, people think they understand it), and it is sensitive to local business conditions. It was the key variable used to make the temporary increase in Medicaid grants sensitive to state economic conditions.

It isn’t perfect. The monthly state unemployment data is ‘noisy,’ meaning subject to error. Moreover, a pair of states could have the same unemployment rate but different levels of personal income or poverty. In principle, other data would be relevant to allocations, but other data are only available on an annual basis, and with a lag.

Below the state level, meaning counties or cities, there is even less information to go on: less reliable, and less frequent. One resort is to leave local distribution up to the states, on the grounds that state governments will have a better handle on intra-state conditions. Their considerations, of course, will also depend on the state government’s solicitude towards their local counterparts, which is not always forthcoming.

When Congress considers formula options, it is a seamy business. Often suggestions to include this or that variable are self-interested. Members want to see how the numbers come out for their own state. If they like the results, they volunteer high-minded arguments for their variation that purport to advance the national effort.

In the fight over recovery act money during the Great Recession, Senator Jay Rockefeller of West Virginia played the heroic, selfless role. Senator Max Baucus only cared about what was in it for Montana. Certain Republican Senate staff were most concerned with how to screw California and New York. There was one in particular, whose name I have forgotten, with absolutely the worst hair plugs you have ever seen. It looked like it had been done by a first grader with library paste and dog hair. It was painful to look at.

For the most recent annual data available, state and local governments spent $2,364 billion. A ten percent downturn in GDP, right now an optimistic estimate, would roughly translate to a $236 billion hole in their budgets. You could double or triple that number to simulate the impact of a 20 or 30 percent fall in GDP.

To some extent, state shortfalls will filter down to local governments. Services of all types will have to be curtailed. That means police, fire, corrections, education, sanitation, etc.

The latest Congressional action provides $150 billion to the states, clearly inadequate, and an unnecessary brake to economic recovery. At this point, it looks like the money will be distributed on a straight per-capita basis. It’s the simplest option, which may be encouraged during an emergency, since it minimizes arguments. More sophisticated designs are possible, but once politics is involved, it becomes more of a food fight. With a more enlightened Congress, better technical fixes would be more feasible.

Speaker of the House Nancy Pelosi has noted that the state aid breaks with usual practice and fails to treat the District of Columbia like a state. The aid has a floor for states with the lowest population counts. For no rational reason, the district’s allocation has been set well below that minimum, even though the district has higher population counts than several states. It’s a disgrace.

One available pipeline to increase aid, used after the previous recession, is the Medicaid program, as the National Governors Association has proposed. What’s also in store, on top of the $150 billion noted above, is an increase in Medicaid matching rates for all states. Insofar as Medicaid eligibility expands, this will be eaten up in increased medical services. The rest is effectively unrestricted fiscal assistance, not a bad thing.

An even percentage expansion of Medicaid matching rates has the advantage of being somewhat sensitive to state conditions, but the data employed to determine the rates is not current. In the Obama recovery package, the increase in the matching rate was further modified to reflect up-to-date state unemployment rates.

The advantage of distribution by formula is that it broadcasts what every state will get, which facilitates planning. It is easy to agree upon and the mechanisms are already in place, so the money can be moved quickly. The provision of unrestricted funds in the current moment is justifiable, since it affords discretion to state governments that are better situated to assess needs in their own budgets than is the U.S. Congress.

State governments are not always the most solicitous of local needs in urban areas, but we have to go to this war with the system we have. Whether the politics of this struggle will yield a better system for the future remains to be seen.

32 Poems: Republican Debate Liveblog with Allen Ginsberg

Killing Us: The Genius of Capitalism

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The title was a phrase that I believe emerged after the 2008 financial meltdown. There was also a book title about a hedge fund that effectively went belly-up but was saved by action of the Federal Reserve. The latter title was “When Genius Failed.” Failure is much in evidence now.

The most recent press conference atrocity had an interesting exchange between Trump and a reporter about the Defense Production Act. The president went on a riff about the shortcomings of nationalization. His basic example was the hypothetical of telling a company to produce ventilators, and “they have no idea what ventilator is.” This sort of stupidity is killing us, in real time.

Behind the scenes, it has been reported that the U.S. Chamber of Commerce has been lobbying against implementation of the DPA. So the Chamber is killing us too. Their members, not surprisingly, don’t want to be told what to do.

For his part, I imagine the president likes the idea of dickering with specific companies, which he imagines he is good at, trading favors. His idea is that business firms will volunteer to produce what is in short supply. In the fullness of time, they probably will. But that will be too late, and the cost will be needlessly high. Governor Andrew Cuomo of New York noted that face masks that used to cost 80 cents are now being hawked for $8.00. This is indeed the genius of capitalism.

Trump wants to apply the Department of Defense model to virus-related purchases. In that model, the “market” is reduced to a sole-source contract with soft constraints on cost overruns, guaranteed minimum returns for the company, and concealment of all details of the transaction on proprietary grounds.  

The point of nationalization, even if temporary, is to nail down specific production targets and fair prices. There are undoubtedly business firms in the U.S. that can produce anything that is in short supply. New York State seems to be doing it all by itself, if Governor Cuomo is to be believed.

When a bank fails, the government’s regulators march in after Friday close-of-business. The owners and top managers are dismissed. Shareholders and debtors are given haircuts or beheadings, depending on how bad things have gotten. Depositors are made whole, with capital infusions if necessary.

The Reconstruction Finance Corporation model is relevant here. A firm that fails to produce what is needed, when it is needed, can be propped up with loans or grants, or taken over if necessary.

What’s in question here is not planning versus “the market.” There is no market in any meaningful sense of the word for critical items. Failure to generate necessary supplies, relying on volunteers, is a plan in its own right. A very shitty plan. We can do better.

Cash Me Out

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It’s been said that there are no atheists in foxholes, and more recently, no fiscal conservatives in a recession. In the same spirit, calls for the Federal government to send money are coming from some unlikely quarters.

There are obvious reasons to proceed.

  • Sending individuals money encourages consumer spending, which supports the employment of those producing and distributing the goods and services which are purchased. This boost to spending alleviates the negative impact of workers’ reduced spending resulting from layoffs and business shut-downs;
  • The families of workers who are forced to skip paychecks would suffer losses of food, clothing, and shelter, absent cash assistance from the Federal government;
  • An economic slow-down will generate business bankruptcies and investment reductions that will detract from future economic growth and well-being.

Before consorting with strange bedfellows, it is best to get prior agreement on unorthodox practices

Remedies that have been proposed include expanding the Earned Income Tax Credit, cutting the payroll tax, and sending individuals money directly. Aid to business firms or to state and local governments is a separate can of worms, important but not discussed here.

When it comes to giving individuals cash, the two values in principal tension are the desires to stimulate the economy, and to provide relief to families in greatest difficulty. In one sense, these could be seen to be complementary, but in another, they are not.

They are complementary in the sense that families in the greatest economic distress are also the most likely to spend any Federal aid. The higher one’s income, the less this crisis is likely to detract from one’s routine spending. So what could be seen as fair also happens to yield the biggest ‘bang for the buck.’

This is a little too easy a judgment, however. The reality is that any Federal aid program will be constrained to some finite allocation of funds. We can think of reasons to forego any such limitation, but for political and economic reasons, a ceiling on aggregate aid is likely. That brings up the issue of targeting by means-testing, something that has become anathema on the left.

Means-testing may be conflated with a bias towards a small program with less cash forthcoming, in contrast to a universal program. To the contrary, a means-tested program can be huge, and a universal one can be small. Supplemental Nutrition Assistance Program (formerly, ‘food stamps’), for instance, is a large means-tested program. So is Medicaid. Total expenditure is a separate decision. There should be little doubt that the circumstances call for a new, very big, ongoing program.

Size matters, but for any given allocation of funds, means-testing can improve both the spending impact of aid during an economic downturn, and the fairness of the allocation of funds (meaning those of less means get more).

Size aside, another nostrum is that a universal program is more politically durable than a means-tested one. Typical examples are Social Security, as the universal case, and Aid to Families with Dependent Children (AFDC, or popularly, ‘welfare’) as means tested. This is not a good argument.

Here durability is not an immediate concern. The priority is to get through the crisis. That aside, Social Security in the first place is not universal. It requires somebody to have a record of labor earnings. Moreover, it is more than a universal program. It is social insurance, the political strength of which rests in great part on its contributory nature. To be eligible (or for one’s dependents to be eligible), one must have paid into the program directly, via the payroll tax. People can say, “Don’t you dare cut my Social Security; I paid for it!” And they did. Besides not quite being ‘universal,’ Social Security benefits are determined according to a progressive formula, itself a type of means-testing.

The unpopularity of AFDC rested to a great extent on its racialized and gendered connotations. It was viewed as an inducement to irresponsible behavior by poor, black women with illegitimate children.

Both Medicaid and SNAP are means-tested and have proven politically robust. Medicaid in particular grew by leaps and bounds during the presidency of Ronald Reagan. It is also true that Social Security has been under assault since the 1990s, its so-called universal status notwithstanding.

Where does this leave us as far as sending folks money goes? We should keep in mind that in isolation, no program can live up to an idealized scheme. It is always a question of tenable alternatives. We could readily acknowledge that in the current crisis, most any program is better than none. But we ought to do better than “better than nothing.”

Sending everybody (or every adult) a fixed payment, these days, often described as a Universal Basic Income (UBI) grant, is a poor allocation of resources. Those of greater means will spend relatively less of their aid. So the flat payment is inefficient. At the same time, those with lower income have greater need for aid, so a flat payment is arguably unfair as well.

My friend Dean Baker disposes of the “send everybody a check” idea, though a close reading reveals that he says the idea provides both too much and too little. Too much to those who would not spend the money, and too little to those in greater need, who would spend their assistance. In other words, it lacks the impact and efficiency of a targeted program.

Sending everybody a check appeals because it sounds simple and could readily gain political approval. Yes, but that’s because it is less progressive than alternatives. It’s easier to do because it isn’t as good. A concession to conservative politics may sometimes be necessary, but it’s still a concession.

A payroll tax cut is an even less fair or efficient allocation, since there is more relief, the higher one’s salary. Moreover, it provides nothing for those unable to work, those who have been laid off, or retirees whose working lives are over, many of whom have low or zero income.

Bumping up the Earned Income Tax Credit (EITC) brings up similar gaps as a payroll tax cut. Apparently the temporary payments supported by the Republicans resemble an EITC: the benefit starts at zero for those with no income and increases as income does over some range. Then it phases out over some higher range.

For any fixed amount of funds, there is no getting around the superiority of a negative income tax (NIT) scheme. It would provide a fixed payment that decreases as income increases. Benefits could be as high as you like.

It is true that such a scheme would not easily gain political approval, but that’s because it is better – more progressive – not because it is complex. On the complexity front, there is one extra parameter to stipulate – the rate at which the benefit declines as income increases. That’s it. Individuals would have to apply for it and report income and, if you like, dependents.

Remember, the right way to evaluate an option is in light of alternatives. Sending everybody a check sounds simple. It is not, either administratively or politically. For one thing, there is no unified list of “everybody.” And who is everybody? The incarcerated? The undocumented? Ex-offenders? The homeless?

We have existing pipelines that can be used for assistance. The IRS knows who files income tax and pays payroll tax. A problem is that many low-income persons need not file an income tax return. They are invisible to the IRS. The undocumented and the homeless are invisible to the authorities entirely. The states’ Unemployment Insurance systems stand ready to pay workers. But these sources also neglect many in greatest need, who would spend every nickel of their assistance.

Administration is not the only basis upon which to judge a proposal. Administration can be enhanced with a relatively modest expenditure of funds, compared to the size of any significant program. The IRS needs to be scaled up anyway. Moreover, all alternative schemes would have administrative costs.

The difficulty of immediately implementing an NIT scheme suggests the option of providing a fixed payment for a limited period of time, until the NIT could be stood up. The point is that a progressive distribution, as soon as it can be achieved, is both more equitable and more effective.

Every aid program is proposed and evaluated considering some total expenditure. There is a continuous back and forth between adjustments in proposals and their cost estimates. Whether anybody likes it or not, that’s just the reality of how these laws are written. There is competition for every public dollar among Members of Congress. Other worthy causes are crying out for resources.

From the standpoint of fighting the coming recession and providing the greatest possible relief to the working class, the negative income tax is the best option. Assistance should be large and quickly forthcoming, and nostrums about the public debt should be left by the wayside. The permanent well-being of tens of millions of families depends directly and significantly on the relief that is provided over the next six months.

The Story of Trumpsgiving

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“It was wonderful to find America, but it would have been more wonderful to miss it”.

– Mark Twain, The Tragedy of Pudd’nhead Wilson

The Story of Thanksgiving (updated)

MaxSpeak Summary: Among Puritan Christian fundamentalists, the Pilgrims were treacherous, murderous swine. The Pilgrims made a treaty with the indigenous people around Plymouth until they had enough forces to wipe them out. This they later did with smallpox and guns, unless they were able to sell them into slavery, all for the greater glory of God.

Wait a minute. That wasn’t quite right. Let’s try it again. Here’s how it goes.

The Puritans in England were subjected to religious persecution, lo unto death. They were not allowed to say ‘Merry Christmas.’ They needed borders, because without borders you don’t have a country. But in order to have borders, you need land. The Puritans tried to settle in the Netherlands, but the people there were all crooked; they refused to accept eminent domain, provide tax subsidies, or hand over land for free. The New World beckoned. It was a land without a people, with first-class hotels and golf courses, and they were a people without a land.

Upon settling around Plymouth, the first Puritans (Pilgrims) began to get along with the Wampanoag Nation. The Wampanoug were lovely people but subject to aggression by immigrants from other Native American groups, who sent murderers and rapists and bad hombres instead of their best. Sad! The Wampanoag provided thousands, no millions of jobs for the Puritans; their alliance became an outpost of peace and freedom in the New World.

As more Puritans arrived, they required more lebensraum. The Wampanoag, like other indigenous peoples, lacked a modern system of property rights. They did not see fit to build fences, put up street signs, or trade in mortgage-backed securities. The Puritans remedied these defects of indigenous civilization. It just happened that the Puritans ended up owning all the property, and Native Americans themselves became classified as property.

Taking umbrage at this advance of Judeo-Christian civilization, the indigenous people were reduced to terrorism. Some were sufficiently maniacal as to sacrifice their own lives in order to murder innocent settlers. There was a virtual cult of death. Underlying this irrationality was a primitive religious belief system that celebrated exterminating one’s enemies, as well as the consumption of locoweed and psychedelic mushrooms. Nobody knew how bad they were. In short, the natives hated America.

As a matter of self-defense, the Puritans were compelled to rise to the challenge of this war of civilizations; they had to get tough by exterminating both the terrorists, their families, and the societies that nurtured them. There was no middle ground; you were with them or against them. Those Native Americans that were willing to live in peace were provided with alternative living arrangements, under the protection of the new government. Sadly, they proved unequal to the rigors of modern society and eventually disappeared.

Today we celebrate Thanksgiving as a tribute to their memory, and to the invaluable assistance they unselfishly provided to the Christian conquest of America.

Now please pass the gravy, and have a Happy Thanksgiving, from all the MaxSpeak mispochah.

John Bolton, My Hero

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Many comrades have trouble getting their arms around the removal of the most depraved, reactionary president in memory. Not surprisingly, nobody in their right mind wants to launch a new Cold War against the Satanic Russians. Nevertheless, heartfelt encouragement of impeachment from the Left is fully warranted.

As the impeachment process struggles to be born, Democrats in Congress are cautiously constructing a case against the president on the narrowest grounds available – his attempt to extort the government of Ukraine to assist his 2020 re-election campaign.

It has not mattered that Donald Trump manifested his crookedness from day one, not to mention earlier. As one pundit noted, New York area elites have a lot to answer for, in failing to restrain this creature decades ago. His racist rhetoric, his vicious assault on immigrants, his indulgence of violence-prone right-wing street goons, his blatant attempts to obstruct justice, his myriad acts of garden-variety graft, none of this was enough to jump-start impeachment.

We have a lot to be bitter about. It’s turning out that the Democrats are impeaching Trump for being a bad Republican, for betraying the conservative principles of Ronald Reagan, the Bushes, and their foreign policy attack dog, John Bolton.

Nevertheless, we are where we are. Democrats have Trump dead to rights on Ukraine. A vote to impeach in the House of Representatives is likely. Democratic Speaker-of-the-House Nancy Pelosi is not known for calling votes she will lose.

On the Senate side, of course a vote to remove Trump is unlikely. However, a weekly ventilation of evidence over the next six months cannot but have a salutary political impact on public opinion and on Democratic prospects in 2020.

One dubious objection is that failure of the Senate to remove Trump would enable him to claim vindication. As we speak, the president is shoveling money to Republican incumbent senators in danger of defeat next year. The legitimacy of their votes to keep him in office is vulnerable to derision. Trump’s burgeoning record of dishonesty increasingly diminishes the veracity of claims he will make between now and next November.

Another objection is that removal would give us President Pence. Of course, if the Senate doesn’t vote to remove, there will never be a President Pence. If it does, however, the ensuing intra-Republican bloodletting would cripple the party for several electoral cycles. Resentment of Pence and any traitors by Trump’s core deplorable voters would lead to a Democratic tidal wave of victories in 2020. Odds are that an embittered, vengeful Trump would facilitate it.

In criminal proceedings, it is common for lawyers to impugn the credibility of witnesses or defendants by reference to acts outside whatever offense is in question. Sometimes this is legal and sometimes it isn’t. The relevance is that while the House Democrats are pursuing a political project – impeachment – on the narrowest of grounds, no such scruples restrain the Left.

A full-spectrum assault on the Republican Party’s depredations over the past three years, under the leadership of their poster boy, Donald Trump, facilitates impeachment in the same way aspersions on a defendant’s character reduce his or her standing in the eyes of the jury. In court this can be unfair; in politics, it is fair. It also supplies much-needed progressive context to the proceedings.

The specifics of the Ukraine affair should not be off-putting on the Left. Whatever you think of the U.S./EU aligned government of Ukraine, itself chock-full of dubious characters, there is no good reason to favor Russian aggression against it. Nor is criticism of Russia really redolent of Cold War hysteria. Russia is no longer Soviet or Red. Arguably, it has drifted quite far from any such station. It is merely one of the larger autocratic adversaries of the U.S. Foregoing any sympathy for its conflicts with less-powerful, neighboring countries is no indulgence of U.S. imperialism.

So impeachment can be fun. Others may take different sorts of satisfaction with it, but our own interests can be furthered as well. Democratic Party victories open up space for challenges to incumbents from the left. It’s easier to consider a progressive challenger when the potential Republican alternatives have little hope of benefitting. A higher margin of D votes in Congress, as well as possession of the White House, puts a greater obligation on the party establishment to produce results for the working class. Instead of being embroiled in arguments with ridiculous Trumpist loons, we can look forward to more serious debate with Democratic centrists on neoliberalism vs. democratic socialism.

The alternative to progressive engagement in the impeachment drama is progressive invisibility, just as public opinion is moving left and crying for change and leadership.

It doesn’t pay to get too far ahead of where the heads of most people are at. Back in the day, at a certain point the anti-war movement that the Left had done so much to germinate became mainstream. Some radicals became bored when everybody started agreeing with them. It was no longer cool. They moved on to more distant concerns.

That was a mistake.

M4A is not easy

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Jacobin tees off again on Elizabeth Warren’s M4A proposal. I’m afraid I don’t think much of Higgenbotham’s argument. At the start, he centers the political difficulty of M4A on the resistance of providers. That is certainly one pole of resistance. There is another that he fails to note until later in the article — the disruption entailed in changing financing from the status quo to something — Warren’s or Bernie’s — entirely different. Later in the piece he makes this explicit: “We can easily pay for Medicare for All. Let’s reject the premise that financing it is our main fight.” I call this whistling past the graveyard.

Warren’s plan is arguably crafted to resist political problems in the latter realm, and for this the author criticizes her. Another gloss on the difficult politics of finance.

Then the author echoes Bruenig’s arguments, which I addressed in my previous post.

Ultimately, for Higginbotham, the politics are magically overcome by political revolution, but while it should be clear that furious mobilization will be required to win M4A, simply invoking it doesn’t make the politics of a grand financing change go away.

Warren’s M4A, Round 1

Just read this blast from Brother Matt, lambasting Warren’s M4A financing plan as “a disaster.” Wrong on several counts. Every count, actually.


Matt castigates Warren’s employer tax as a “Medicare head tax,” contrasting it unfavorably with a straight payroll tax. (The ‘head tax’ in this case is a firm-specific dollar amount based on prior health insurance costs; a payroll tax is simply a rate — a.k.a. ad valorem —  applied to taxable payroll). Matt glosses over the fact that the status quo is also a head tax, also known as employer-paid health insurance, in his sense.

Warren’s tax is less disruptive than a straight employer tax. It would be lower for firms that had cheaper insurance, because of healthier workforces and/or more narrow coverage. I don’t know how it would apply to firms with no coverage.

Matt’s comparison of the head tax with a non-existent payroll tax does not follow. In public finance jargon, a head tax is the same fixed charge applied to all persons. Warren’s tax varies with prior health insurance premium costs, which are generally assumed to be borne by the worker.

That exemption of smaller firms would encourage a wave of outsourcing and vertical disintegration may be doubted. There are already incentives for this, and we are stuck with what we have, at least for the time being. Currently, employer provision of coverage is voluntary, so if their costs are not much altered under Warren’s ‘head tax,’ there is less reason to fear some wave of spin-offs. Firms are a bundle of non-market transactions for reasons that supersede the purported efficiencies of fragmented, competitive sub-markets, as someone wrote in the 1930s.

Matt gives the game away by acknowledging he might start with Warren’s plan, horrible though it may be, but transition it towards a payroll tax. At first blush I would agree this end result is preferable to a nationally-uniform charge per worker.

There are going to be plenty of reasons to take exception to Warren’s proposal, but these aren’t very good ones.

Bruenig & UBI

“Politics is not arithmetic.”

– Álvaro Cunhal, former Secretary-General, Partido Comunista Português

My friend, the semi-notorious Matt Bruenig, responded to my bit in Jacobin on Andrew Yang and Universal Basic Income (UBI) on his Peoples Policy Institute website, so here I return the favor. (An older piece is here.)

He leads off with a claim that there is five trillion in capital income available to pay for a three trillion UBI. There are two problems with this claim, one a matter in national income accounting, the other – much the more important one – in political economy.

The five trillion (line 9 in BEA Table 1.10) of Matt’s “Net Operating Surplus” includes the incomes of proprietors, much of which is implicitly labor income. If you run a candy store you record your net income as profit, even though it’s basically a wage. In the same vein, another component, rental income, is received by Uncle Joe who rents a house as well as by the Trumps. Some corporate profits and interest are received by workers as a return on their savings.

I note in passing that Matt characterizes capital income as passive income paid to those who do not have to work for it. This is not exactly right. Besides the candy store and Uncle Joe, if I save part of my wage and receive interest, dividends, or capital gains, the latter types of income are not quite benefits for which I did not have to work. And finally, a piece of that is tax already being paid, which can’t be paid again to finance a UBI.

I would grant that the bulk of the five trillion is received by the top quintile of the population, with a disproportionate, gross amount to the top tenth of a percent.

This is quibbling in light of the larger point, which is that financing a UBI is not a matter of arithmetic, but of political economy. The Federal budget includes about $4.4 trillion in spending. Diverting one-tenth of the cost of the UBI from other uses would be daunting. Three trillion? End of story. Carving it out of capital income? Ambitious goals deserve praise. But at some point ambition can give way to hallucination. Matt acknowledges this, saying “Liquidating the capitalist class will of course be difficult to pull off politically.” Ya think? When he says “pull off,” I think of the difficulty of pulling off a thirty-foot putt or winning a tango contest.

Matt wants to distinguish between political difficulty and “what is possible as a policy matter.” Policy requires arithmetic, but it is never reducible to arithmetic. It is only made possible by struggle. Power concedes nothing, notwithstanding the technocratic elegance of any proposal.

The distraction implied by UBI chatter is underlined by the primacy of other priorities on the Left, especially Medicare For All and the Green New Deal, neither of which individuals could buy on their own with a UBI check.

The way things look now (9/4/19), I’d say we have an excellent chance in 2020 for a President Sanders or Warren, and a conceivable opportunity to flip the Senate. In that scenario, we can look forward to non-trivial expansions of health insurance coverage and the green transformation of the economy. Liquidating the capitalist class is about as likely as that dude Andrew Yang being elected president.