What does ObamaCare have to do with postal banking?

banking1_2For the self-employed, among others, a whole lot. To set the stage, consider the case of one Luis Lang, the now-famous self-employed ex-Republican who rejected the opportunity to sign up under the Affordable Care Act (ACA). (His GoFundMe page is here.) Then he got sick and saddled with the choice of crippling medical bills or going blind. His story is that it was risky to apply for subsidies when your future income is uncertain. If you underestimate income too much, you get a big tax bill the following tax filing season since the subsidy is means-tested (higher income, less subsidy). ACA subsidies are doled out monthly in the form of reduced premiums, so with higher-than-expected income you could be looking at the need to repay a loan from the Gov.

The underlying problem is that a worker’s accounting period (wherein he or she tries to balance in-go and out-go) is short. People spend as they get, except insofar as they can borrow to fill in gaps. When you borrow the piper must shortly be paid.

Of course, Medicare for all would be better. So would other permutations of public and private insurance. But the ACA is our world for the time being.

What does this have to do with banking? A postal savings bank is an institution that provides plain-vanilla financial services at low cost. For convenience its branches can be located in post offices, hence the name. Other countries have availed themselves of this simple device, including the U.S.A. in past years. Such a bank could provide low-cost insurance against an unpleasant ACA surprise, come April 15.

A related case is that of the Earned Income Tax Credit (EITC). In a book I’m reading, It’s Not Like I’m Poor: How Working Families Make Ends Meet in a Post-Welfare World, by Sarah Halpern-Meekin, Kathryn Edin, Laura Tach, and Jennifer Sykes, the use of the EITC as a convenient piggy bank for the working poor is elaborated. The credit functions as a nudge towards savings, since most people receive it for their year’s earnings the following February, after W-2s arrive and they have filed for the income tax. It’s used to pay off accumulated debt and big-ticket household purchases–appliance, auto repair, and the occasional special treat.

The bottom line is that earnings for the working poor besides being low are volatile. Volatility in and of itself is a burden that levies additional costs. In the semi-privatized world of the ACA, the interest in providing means-tested benefits is complicated by the underlying market model of linking subsidies to incomes. Short of expanding Medicaid and Medicare to drain the pool of uninsured and subsidized insured, a postal savings system would improve matters.

Not insignificantly, postal savings could also exterminate the world of usurious payday lending, check cashing, and installment loans, all of which cause burden the poor.


Expect little, and you will be rewarded: Part One

I somehow missed this promulgation of progressive objectives. Apparently New York Mayor Bill DeBlasio provided the impetus. It came to my notice in this fanferiffic HuffPo piece on how Hillary is conquering liberals like Khaleesi coming down on Yunkai. Some of the signatories are friends of mine. Some of them I don’t care for. I don’t take exception to anything in it. What surprises me are some of the oversights, about which more in a bit.

The purpose of the document could be to hold Democratic office-seekers to a liberal standard, which I think would be just fine. Or, the purpose could be entirely different: to stage a dialog between Hillary Clinton and the domesticated left that ends in harmony and electoral season unity. With respect to Senator Bernie Sanders, someone described it as “sheep-dogging.” The mechanism in Bernie’s case is similar: stage a debate that can only end in reconciliation, since Bernie is emphatic that he will support the party’s nominee. It’s World Wrestling Federation practices brought to politics.

The problem in these exercises is that at the outset the progressive side rejects its greatest weapon–the threat of abstention, or even worse, opposition. You have exit and voice. With no exit, you don’t have as much voice. I’m not out of the woods here myself. There should be no question that in the national elections, a vote for Hillary is the correct vote. I’ve acknowledged that myself. I would help Bernie or others in the primaries, and HRC in the general, given the opportunity. However, there is another way of gathering voice without the threat of abstention.

Abstention or third-party opposition is a binary choice. You either do it or you don’t. But there are partial alternatives. In short, you can agree that a vote is an inevitable obligation, but you can also be a royal pain in the ass in the meantime. In other words, you can exact costs that might add to Progressive Voice by providing a constant blast of criticism. If a Left doesn’t do that, what is it ever for? What kind of left always reconciles itself to whatever the Democratic powers have decided?

In this light, there are some problems with The Progressive Agenda. For one thing, the endorsements are salted with hacks. Al Sharpton? Oh please. The signers are a tip-off that the standards of the agenda are modest and the associated rhetoric will be gentle. Otherwise we would be seeing something like the back-and-forth between Senator Elizabeth Warren and the Obama Administration. By contrast it is so easy for Mrs. Clinton to make agreeable noises about trade deals, like her husband before her, and like Barack Obama in 2008. Noises that culminated in endless lies, perfidy, and betrayal. Particularly on this issue, how could anyone take these people seriously?

I would not apply a purity test to any endorsements. But the tenor of the exercise should result in limited approval by your average politician. Otherwise it looks kind of squishy.

In the next post I’ll get into the meat and potatoes of the platform.







Notes from God’s Waiting Room

mugI shouldn’t even be here. I discovered a couple of weeks ago I have a congenital heart condition which involved plaque building up in the aortic valve. A little piece breaks off and you’ve got yourself a stroke. Now that’s not happening. I had the valve replaced Wednesday. I’d show you my lovely scar, but for the sake of small children I will limit the exposure to the mug shot from Friday.

I’ve learned there’s a thin line between daydreams, dozing off, and hallucinations. For a good 48 hours it seemed I would be in some banal conversation with somebody, but when I open my eyes, there is nobody there. Happened dozens of times.

I feel like the beneficiary of gold-plated health care, thanks to Suburban Hospital in Bethesda and Blue Cross/Federal Employee. There was a constant stream of people coming and going, monitoring blood sugar, checking blood pressure, etc. etc. They had me set up for a pacemaker, in case I needed it. I didn’t. Pulling those little wires out of my chest was exciting.

I’ve spent time in a couple of other hospitals looking after others, and I wouldn’t go to either of them if I could avoid it. I’ve also seen a few nursing homes in my day, and boy do they ever suck. I guess if you don’t know anything else, you don’t know what you’re missing. Of course there are a lot of people with little or no access to health care, but there are a lot more with access to what might be called narrow care. Which is better than nothing, but speaks volumes about our retrograde welfare state.

This kind of operation involves a myriad of details to attend to, after the fact. You’re not quite fixed, you’re in some kind of indefinite maintenance regime (see gold-plated, above). Main thing is now I can get around the house by myself. I don’t need anybody constantly attending to me, though all such attendance is welcome.

I’m involved in a few different social media situations. Frequently someone announces a life event. I had previously foregone the common practice of wishing them well, since what’s another perfunctory note. After all the friendly remarks I received, I’ll have to change my habits. Every little remark or ‘like’ has value. Do them.

I can’t drive for a month. This continues to boggle my mind. The reason is the expansion of an airbag can send you right back to the hospital, since your sternum has been fucking sawed apart and reattached with chewing gum and paper clips. For the same reason, there are all sorts of things you shouldn’t do with your arms, like this:

One of my favorite positions. And looking at Frank makes me feel a bit better too.

That’s all for now, folks. Try to eat something, then nap time.


After Baltimore, II: A Wonk’s Notes

Rockwell_1958_The-RunawayNow those responsible for the death of Freddie Gray have been charged, but all is still far from right with the world. The process could easily drag out for a good while and culminate unsatisfactorily. The local liberal-Democratic political establishment has changed the story for the time being, but what should be expected of them?

I can recite chapter and verse the story of the hollowing out of U.S. manufacturing, and the flight of good jobs and middle class incomes from the ghetto. Addressing this is a long-term project about which more below.

The more urgent priority is law enforcement applied to police forces. This means civilian-police review boards with subpoena power, backed by special prosecutors. I would not put it down to tanks or training. Police know when they’re doing it wrong. That’s why they don’t want people filming them. We could also support the idea of police being drawn from the neighborhoods in which they work.

The other curb on police abuse is a free press and a free citizenry. There should be no restrictions on the press going where they like to cover citizens who are free to assemble and monitor police.

Because a crisis stemming from police brutality is a terrible thing to waste, I would also take the opportunity to talk about decriminalization of drugs and plans to transition a good part of the prison population back to their communities.

When it comes to economics, the landscape shifts more to the state and national levels. Cities bereft of taxable resources aren’t in much of a position to heal themselves. The practice of offering tax breaks to business firms to locate anywhere in particular has been shown to be a huge waste of money. This also goes for sports stadium boondoggles, recognized by both left and right. A partial exception is that local land value taxation is a neglected municipal revenue source.

The dilemma when it comes to investment in broken areas is that some state governments might do it but others will not. Maryland is a good candidate for activism in this area, since its wealthy suburbs could afford more taxes. Other states dominated by retrograde politics will abstain. The Federal government is also stalemated in this respect by the Republican Congress. So in general the chatter about programs is blocked by the political consensus against such policies. If I knew how to fix the politics, you would have heard about it. The best I can do is support independent organizing, as noted in the previous post.

My attitude about the manufacturing story is a little jaundiced. There was no manufacturing renaissance in the late 90s, when wages and employment advanced by historic rates. That leads me to suspect it’s more about the Federal Reserve’s monetary policy and the Federal government’s budget.

Of course more manufacturing would be welcome. When I started working at the Economic Policy Institute in 1990, one of my portfolios was industrial policy. We gave it up because, frankly, nobody gave a shit about it. Some time ago, Herbert Stein wrote that people talk about industrial policy during recessions, then forget about it after the downturn has passed. If you think it’s important, it’s still a long-term project. Much simpler as a technical matter is to get the Federal government financing all manner of infrastructure repair and expansion. Get serious about high-speed rail, the national power grid, renewable energy sources, universal pre-K.

One stray thought about housing. I would not start with housing, something tried before in Baltimore. I would start with employment (see infrastructure, above). When people have incomes they will create demand for decent housing, and they can do some fixing up themselves. People aren’t children.


After Baltimore, I: Activism

brokenRisking the wrath of Steve Randy Waldman, I have a few thoughts. My own ancient left prejudices led me to see the property destruction as an unhelpful distraction from the good, constructive folk marching and demonstrating. But this separates things that are organically linked. When order breaks down, beginning with the police violence victimizing the Freddie Gray, it can set off both responses. We have to ask whether the charges against the offending officers would have resulted if the response had been entirely peaceful.

There has been commentary to the effect that property destruction is a legitimate, justifiable tactic, or that it is a meaningful statement, in and of itself. The idea of a tactic implies a tactician, a self-conscious intelligence guiding an insurgency. But there has been no indication of any such guidance. No anarchist underground is in evidence. So it’s what I prefer to call random bullshit, or what Ta-Nehisi Coates called a “forest fire.” That doesn’t mean it is without any possibility of positive effect. It just isn’t anything a sane political person would try to actively foment. As a practical matter, the authorities would roll you up in, oh, about three days. Nor does it further actual mass organization, the actual substance of which–meetings, meetings, meetings–is not a natural transition from running the streets.

The charges against the officers mark a new stage, the end of the beginning. All systems are now go for a spring of mobilization. People have gotten a taste of redress, and they will want more of it.

Democratic politicians will try to get in front of the activism–Hillary Clinton actually uttered the phrase “mass incarceration”–but they have a lot to answer for, not least in Baltimore itself. The way pressure is built up is not by following these hacks, because their job is to get elected and keep doing very little. Pressure is created by doing just the opposite — creating independent force, on the ground. I’m reminded of the absorption of the protests in Wisconsin into Democratic electoral activity, which turned out to be an utter failure. Agitation ceased, and the a-holes still got reelected.

Social movements get results. An enduring weakness of the U.S. left is the proliferation of atomized efforts. Every specific issue has a group or groups focused on it like a laser beam, and my issue is more important than any other. What’s lacking is the merger of these efforts into a broad-based, united, national movement. The fragmentation is conducive to creativity and energy, but it can retard synthesis of problems and associated causes into the new world view on which our survival depends.

In my next post I will offer some ideas on tenable policies to highlight.


Rumor control is self-control

rumorsDuring the tumult in Baltimore, a few days ago I put up two tweets in the space of about ten minutes, both of which went mini-viral, both containing inaccuracies. One showed a picture of white kids looting. Not just black kids! Hooray. Turned out it was from Oakland last year. The other was the now famous clip of a few Baltimore cops throwing rocks, which I offered saying you’d never see this on the nightly news. Turned out it had been on the nightly news. I posted corrections and took a chill pill. The new social media lets us fasten onto whatever fragments–‘decontextualized’ in the current lingo–that confirm our prejudices.

Wild West Show

Activist Cornel West is knocked over during a scuffle with police during a protest at the Ferguson Police Department in FergusonI’ve been following the Cornel West/Michael Eric Dyson brouhaha, so I might as well say something about it. A lot of the reactions, especially from commenters on assorted web sites, dwell on imputed motives. That’s a bankrupt line of criticism. Nobody’s a mind-reader. Stated words and deeds are the sources of evidence, not suspicions that somebody is self-serving. Everybody is self-serving; the questions are how, and to what effect.

091812-politics-bet-townhall-voting-rights-rev-al-sharpton-tj-holmesThe reactions of others I usually follow include: Jeet Heer, Glen Ford, Gary Younge, Dave Zirin, Max Blumenthal, and Scott McLemee. For historical background, and also because it is one of the most wicked funny essays ever, there is also this from Adolph Reed Jr. (sample from Reed: ” . . . Dyson, as usual, is bringing his best Pigmeat-Markham-Meets-Baudrillard act along behind.”).

My initial reaction on Twitter to the Dyson hit, because that’s what it is, was a qualified positive. As a friend notes, it’s “a mix of excellent and terrible.” Scott had a similar reaction.

At the same time, like Glen Ford (and Scott, I imagine), I am most sympathetic to West’s political stance. By contrast, Dyson as MSNBC talker is for all practical purposes an apologist for the president. He subs occasionally for FBI informer Al Sharpton, who has elevated Probama hackery to an art form. Dyson’s claims to a critical stance are unconvincing. In his New Republic article (side note: TNR, although they’ve lost some people I like and some I don’t, has gotten better lately), he lets the cat out of the bag himself, describing his own rhetorical contortions before African-American audiences. His priority is self-protection, not forthright commentary.

West’s own response to Dyson on Facebook was brief and utterly lame. People are dying, why talk about me. Oh please. Nobody is above criticism. West is an important figure. He is fair game. But what’s the criticism?

Dyson’s chief claim is the devolution of West’s scholarly output. I am not well-situated to render any verdicts on this question. I’ve read exactly one scholarly essay by West, written a long time ago, on populism. I thought it was excellent. I don’t actually think that’s the real issue here. West has passed any reasonable threshold for noteworthy scholarly output. There’s no law that he can’t switch gears. Noam Chomsky doesn’t write about linguistics any longer, as far as I know.

What’s really in question is the proper progressive stance in Politics, the Correct Line, as we used to say (ironically). Dyson wants some radical cred, but he can’t get any on his present path. From that standpoint, his attack on West is a distraction. Like the other Democratic Party cheerleaders on MSNBC, MED has become part of the problem. West for his part has been doing all the right radical things, offering blistering criticism of the Administration and getting busted. I am apprehensive about his dalliances with the likes of Bob Avakian and the so-called Revolutionary Communist Party (which, like the joke goes, is neither revolutionary, communist, nor a party). But Cornel is mostly right. Obama’s MSNBC supporters have every right to be Democrats, but they have to surrender their radical cards. That’s what they’re fighting to keep, the better to guard the Administration’s left flank. No.

Come the  2016 election campaign, I’ll be gritting my teeth like everyone else. I have no problem with the cottage industry of constant attack on the G.O.P. You go, Daily Kos. Right on, Media Matters for America. It’s a dirty job, but somebody has to do it. I will be joining in myself when the time comes. But until then we shouldn’t leave our brains behind in considering the limits of the Democratic Party’s contribution to Humanity.


Work makes Fritos

Clinton_prwora(Update: The Sandwichman delivers.) I’ve gone around on the Universal Basic Income (‘UBI’) more times than I care to remember, but Vox’s Dylan Matthews brings something news to the table, pointing to the contemporary Democrats’ default anti-poverty policy: get people into a job, any job. Translated that means work supports for jobs with very low pay and scant prospects for upward mobility.

The genesis of this policy was the so-called Personal Responsibility and Work Opportunity Reconciliation Act of 1996, also known as “welfare reform.” This bill destroyed the Aid to Families with Dependent Children (AFDC) program by transforming it into a block grant. It was signed by Bill Clinton and supported by many Democrats, including liberal Democrats. Consequently, the Democratic Party is invested in the program and its logical implications, about which more below.

The block grant under the name “Temporary Assistance for Needy Families” is a fixed payment to state governments to finance welfare programs of their own design, subject to some limited Federal regulations. The chief innovation of states was to require of beneficiaries work or work-related activities. In return cash assistance and other support, especially subsidies for child care, might be available.

From 1996 to 2000, most of the evidence on TANF, with one important exception, showed up positive. Poverty decreased, employment and wages increased. The problem for evaluation is that this same period happened to be one of the best in U.S. history, in terms of labor market advance. In addition, the minimum wage (in 1996 and 1997) and the Earned Income Tax Credit (in 1993) increased. This makes it hard to isolate any beneficial effects of TANF.

Unfortunately, the positive signs for those in the bottom income quintile (20%) of the population have crumbled since 2000. Truth is, they weren’t that positive to begin with. The impact on work in “leavers” studies (where TANF recipients were tracked after graduating from the program) tended to show work effects in the high teens. Think about that for a second. You’re working, say, one week a month. You increase work (assuming you have the option) by the top of the range, 20%. Instead of working five days a month, you work six days. Twelve extra days a year. Nor does work necessarily mean higher income, since increased earnings offset benefits, and work expenses reduce net income.

The other ominous, early sign was income decline for the poorest single mothers’ families, documented by the saintly Wendell Primus and colleagues. (Primus actually resigned from his post with the Clinton Administration after the welfare was signed. How often do you see that.)

Since 1996, participation in TANF among those eligible fell from 80-something percent to forty-something. In the grand scheme of what we like to call the U.S. safety net, it is now a minor program. There are now fewer than five million persons receiving benefits (not necessarily cash benefits). In 2013, nearly 46 million persons were below the official poverty line. About the same number get what used to be called food stamps.

At the time I hoped that the reform might cast a different light on welfare recipients. Instead of being bums, they would be workers. But enrollment in TANF has dropped off the table. Meanwhile, Barack Obama is slurred as “the Food Stamp president.” So the meanness has not dissipated, it has just been redirected.

Well-intentioned supporters of the reform could have hoped that wages would continue to grow and draw more people into the labor market, to the benefit of all. But employment and wage growth since 2000 have been lackluster. We have yet to return to the employment-population ratios of 2000, including for ‘prime-age’ workers. Although there are some recent, positive signs, job prospects still look bleak for those with no skills and little education. Work-conditioned benefits are helpful, but we should aspire to greater heights.

All this is a lengthy prelude to Matthews’ post. His remedy for a future of lousy jobs is the UBI. The basic reasoning is solid — an unconditional cash grant provides support for labor market abstention. You’re not as much at the mercy of employers. And of course if you can’t work you really need the money. The chief benefit of the ‘exit’ option is the implied upward pressure on wages. So far, so good.

But Matthews’ thrust is actually more radical than that. He is throwing shade on the moral obligation and axiomatic economic imperative of work itself, in particular employed work. You working for somebody else. You in thrall to Capital: what used to be called ‘wage labor.’

chillinThere are alternatives to low-pay employment. There is production in cooperatives, or in worker-owned and managed firms. These are real things. There is self-employment. There is working less — workers of the world, relax! This entails reduction in hours of the working day, through the institution of shorter work weeks or work-sharing. These are also real things. My comrade, the legendary Sandwichman, will have more to say in this vein, among others. He is an expert on less work, in theory and in practice.

Last, and not least, there is the wages agenda. You will seldom hear a Democratic big-shot suggesting less work. The labor movement, for understandable reasons, is fixated on maximizing employment and wages. I call it ‘productionism,’ even though I love me some labor unions and wage growth. Of course people need jobs because they need income. The question is whether an exclusive focus on any-damn-job and wages is good strategy. There is a lot wrong with Econ 101 supply-and-demand, but there should be little doubt that constricting labor supply to employers will force them to offer better wages and accept lower profits.

Let’s desacralize work. Dignity of work, my fanny. Work that is truly voluntary would be nice. Work that is compelled as an alternative to destitution does not comport with any reasonable concept of dignity. It’s like the dignity of kicking back to Tony Soprano.

Where does the UBI come in? The principle of providing an alternative to employment is sound. A universal program, however, is too diffuse. More than half the country doesn’t need a UBI. Giving them one requires taxing it all back, which is a lot of money — trillions — sloshing back and forth, the proverbial putting out and taking in the same laundry. Lots of opportunities for slips between the cup and lip, at both ends. It looks stupid.

The challenge is focusing income guarantees where they are most needed, in a politically feasible way. As soon as the word ‘need’ comes in, we have to drop the ‘U’ in UBI and take up the negative income tax framework–you are guaranteed a certain amount of money, and as your other income grows, your benefit is phased out.

So who should get an NIT? For starters, I’d suggest two groups:

1. Families with dependent children. The first but not the only source of finance for this would be a re-Federalization of TANF, and the return of the ‘UP’ component (unemployed parent). Call it a family allowance. The second source is the current ‘Supplemental Nutrition Assistance Program,’ formerly known as Food Stamps. SNAP is an NIT.

Food stamps was politically sustained historically by support from agricultural interests, support that may now be a dead letter thanks to, you know, newly insane congress persons from rural districts. The ‘food’ requirement may have become a political anachronism. Democrats’ historic support for TANF renders SNAP vulnerable to the same reform.

ladyhippie2.  Unlucky geezers. The financial meltdown ate a lot of folks’ retirement nest eggs or bilked them out of their houses. This was not bad luck; it was a crime. Institute a financial transactions tax and provide an additional retirement floor (more Social Security). Send the bill to those who threw the party, as somebody used to say.

This pairing could be politically effective, uniting constituencies that are otherwise not necessarily in sync on social policy, to say the least.

Income should indeed be guaranteed and universal. I’d say the first job is getting it to where it is most lacking.