And Another Thing . . .

Dog-piled again by what I call the Twitter Policy Institute, Matt Bruenig’s army of followers. Many are computer techies, musicians, poets, and other free-spirited souls, few have a clue about public policy. I can identify. I was an English major and thought I knew politics. It was great to be young and insane. They criticize texts without reading them, based on tweets by anyone they trust. Within Twitter, it’s impossible to deal systematically with all the foolishness thrown into those threads, hence this response.

Briefly about Matt: we broke bread following his professional defenestration by the D.C. pwogie policy elite. I have praised his work in the past. I try to be supportive, but not uncritical. He can be easily provoked, can’t we all.

The latest imbroglio is about how to guarantee minimum incomes. I did a piece for In These Times celebrating the new Child Tax Credit and urging the defense of means-tested benefits such as the Earned Income Tax Credit (EITC). Matt has been on jihad against the EITC for some time now, usually on spurious grounds. I’ve commented on this in the past.

The focus of the argument in the wake of my ITT piece was on the phase-in of benefits under the EITC. A phase in means that labor earnings are matched at some rate by the government in the form of cash assistance, up to some limit. Matt hates the phase in, arguing that 1) it excludes the poorest families, 2) it was designed that way out of malevolence towards such families, and 3) it is inferior to universal benefits without any means test.

These are really bad arguments. Their core is that the EITC (and logically, all means-tested benefits) are bad because they are not universal. Universal is good because it means more benefits for all, and that fact means that they are politically robust.

I like more benefits for all. The question is how to get them. The fact is that there are no permanent, universal cash benefits, anywhere in the world. There are experiments and temporary programs, and there is the Alaska Permanent Fund benefit. That’s it. That should cast doubt on the political invulnerability of money for everybody. In my article I explained why their purported ease of administration and political acceptance are a mirage.

Matt is obsessed with “trapezoidal programs.” That means benefits that phase in and out, in other words benefits that require labor income to qualify (among other stipulations) and wither away at higher levels of income. I’m afraid there is much more to the nature of these programs than their formulaic character. The trapezoidal obsession is reductionist, the way an economist might think.

The EITC was instituted to encourage work on the debased reasoning that the poor need incentive to work and be self-supporting. Without doubt, some may have supported it out of scorn for the poor (Matt’s #2 objection), though that doesn’t make much sense. If you hate the poor, why support any benefit? Why would hatred fall away for someone with an income of half the minimum wage?

We might suppose that the hatred is limited to those with zero labor income, though if the thought of someone not working and getting government support is objectionable, from that malign standpoint, anyone making very low earnings may still not be working up to his or her limits. Why would they be deemed deserving?

The likelihood is that the work requirement was either accepted as a political expedient, a pretense for providing cash aid, since most of the poor work to some extent, when they can, or out of misguided “tough love.” It also means a less expensive program, and in an environment of competition for budgetary resources, more for other things.

What about eliminating the EITC phase-in? An EITC without a phase-in makes no sense. What would constitute eligibility? A dollar of earnings? The real criticism here is that the EITC is not a UBI. We could call that a Universal less-than-Basic Income (“ULTBI”). That reveals that the underlying dispute, notwithstanding protests to the contrary, is really about the EITC vs. some kind of UBI.

The new Child Tax Credit has no phase-in and only phases out at a much higher income. As such it is not really comparable to anti-poverty programs. It is closer to a UBI though it is neither ‘basic’ in the sense of providing a family with an adequate minimum income, nor universal in the sense of being available to everybody.

The Biden Administration will be proposing to lengthen the legislative lifespan of the new CTC. I would say politically, the opening the new CTC provides should be exploited to cement it to remain fully in effect well beyond the current year, and to widen its eligibility standards. That’s what the advocates are fighting for now. Throwing shade on the EITC (which Biden also expanded) because it isn’t a UBI, or a ULTBI, is a distraction with a small risk of facilitating the use of the EITC as a ‘pay-for’ to buttress the CTC.

It’s good to have ambitious goals, even utopian ones. They stimulate thought. But it is a mistake to confuse them with actual struggles that are in progress. That is preserving the gains in the American Rescue Plan, including extending the expansion of both the CTC and the EITC.

Some will quibble that an expansion of only four years is unsatisfactory, but that is due to stupid budget rules, a different and larger battle that I address here.

State Capacity as the Next Revolution

I want to recommend this article in Jacobin by Leigh Phillips that offers an explanation for different successes at coping with the pandemic in different parts of the world. It comes down to what LP calls state capacity, or lack thereof, what is also called industrial policy.

A popular treatment of this issue can be found in Michael Lewis’s “The Fifth Risk.” It’s a page-turner for policy wonks. I tore through it in two days. The accounts pertaining to nuclear weapons and waste are scary as hell.

Phillips’s point of departure is Canada, home of glistening, universal, single-payer health care and utter laggard in its pace of vaccination. Canada lacks any domestic means of production for vaccines, the result of its few firms being gobbled up by global corporations over the years, much as rapacious private equity operates today. Its conservative and liberal parties embraced the global turn towards feeling that markets, rather than governments, would fix problems. (From the U.S. standpoint, the Canadian Liberal Party is not unlike the Rockefeller Republicans of days gone by.)

One of the problems is that vaccine production is not very profitable, especially in smaller countries like Canada that lack mass markets. I would venture to add that the public health urgency of vaccination against epidemics drives down the prices governments permit companies to charge, and there are no repeat customers. By contrast, drugs for chronic conditions are the gifts that keep on giving.

Canadian Prime Minister Trudeau’s fumbling efforts to start up a vaccine industry have been hampered by self-imposed nostrums about privatization. LP doesn’t mention it, but this tale reminded me of the debacle of England’s transit privatization, chronicled in a report for the Economic Policy Institute by Elliott Sclar of Columbia University that I edited twenty years ago.

The other sick man of the West is the European Union, also the home of vaunted public health insurance systems. Here too the vaccination rates, as well as public willingness to be vaccinated, are dismal.

It turns out that a public health system has to be propelled towards providing for public health, in terms of being prepared for and dealing with epidemics. It doesn’t happen automatically. Otherwise it devolves to focusing on the routine but no less pressing need to treat people who are sick today.

For me, the most interesting idea here is that the formation of the EU ‘superstate’ entailed an actual reduction in the power of the public sector, not to mention democratic accountability. Although a friend advises me that the EU began as a social-democratic project, not the EU is more about suppressing public initiative in its members, for the sake of privatization, than about concentrating affirmative power – the ability to do things that alter market outcomes – in itself. This has been painfully clear as far as fiscal policy goes: the E.U. has none, as well as in its sado-monetarist central bank.

In the literature on “fiscal federalism” in the U.S., the traditional view was that state centralization entailed state expansion. An analysis along these lines was promulgated by my old adviser, the late Professor Wallace Oates. Cases where a central government held back its member jurisdictions were thought of as aberrations with the term of art “pre-emption.” It was fun to cite cases where Republicans violated their own “government is best that governs least” code for the sake of ideological preferences. An old example was conditioning transportation grant funds on state governments drug-testing truck drivers.

The U.S. and the U.K. have done a lot wrong, but one thing they did right was gin up the development and production of vaccines. For this reason, as LP notes, Matt Bruenig tweeted that the new U.S. R&D vaccine capacity could make Donald Trump the greatest president in history, which is both wicked and hilarious. The progress on vaccines is a case of the selective application of industrial policy, ordinarily reserved for times of war. (Arguably, climate change requires an equally intense effort, on a much larger scale.)

In the U.S., the Defense Production Act is the legal framework that permits the Federal government to redirect the means of production. The government can order factories to be opened, supply to be redirected, corporations to collaborate.

The success in one particular field – vaccine development and production – has sadly not been replicated in pandemic-related functions, such as being able to detect the onset of contagious disease, trace those who carry the disease, produce and distribute protective gear to the health care sector for the safety of workers engaged in caring for the infected, and until this year, distributing vaccines. In this sense, the abandonment of initiative to the market, or to nobody at all, is manifest and egregious.

The great contrast is East Asia, where the virus is mostly a memory, even though little vaccination has been implemented. It could be tempting to suppose that in totalitarian China, behavior to reduce incidence of the virus is easy to regulate, but the fact is that in democratic Asian nations, such as South Korea or Taiwan (sorry, CCP), the pandemic has been similarly eliminated. Though celebrated by the less-informed as a triumph for capitalist markets, the truth is that these nations, democratic or otherwise, conduct vigorous industrial policy.

LP notes a challenge for the Left, I would say in the U.S. in particular, is to get beyond welfarist limits to public policy, Medicare For All, free college, and the like, as well as labor market regulation focused on wages and union rights. All those things are essential, but the virus demonstrates, with a vengeance, that the nation needs a public sector with a more interventionist role in the economy. The specter of climate change ought to convince everybody of this. I tried to get into it in my paper on public investment, in terms of the neglected place of public enterprise.

Oddly enough, the sort of slogans in favor of workers’ control on the U.S. left are usually bereft of content. What we need are politically tenable counterparts to the sort of policies that got citizens of the U.S. and U.K. a fistful of working Covid-19 vaccines in record time, under the leadership of no less than Donald J. Trump and of Boris Johnson.

Chillin’ with Critical Race Theory

“The law, in its majestic equality, forbids the rich as well as the poor to sleep under bridges, to beg in the streets, and to steal bread.” – Anatole France

So I read here that the April 8 meeting of the Loudoun County School Board was a reboot of The House of Flying Daggers. My caution to all is that for the sake of winning attention, folks often make too much out of too little. That seems to be the case in the matter of Critical Race Theory (CRT). Some parents see indoctrination, radical ideology, and abuse of students.

Remember when we were at risk of invasion by caravans of illegal immigrants? Or when the Zika virus was going to kill everybody? When Obama was going to take away all the guns? When the left-wing Antifa sacked the Capitol? By contrast, evidence of an actual pandemic that has killed over half a million Americans was pooh-poohed for weeks, and by many, still. Consider your sources, people.

Two key questions are, just what is Critical Race Theory, and is it being taught in Loudoun County public schools. What follows is a short guide for the perplexed.

Critical Race Theory began as a movement in schools of law. Delving into that literature should make it clear that it is w-a-a-y over the heads of high school students, most lay persons, and probably me as well. It is borderline ridiculous to imagine it being taught in any depth in our schools. That aside, I will try to explain it in a nutshell.

Contrary to some anguished reports, CRT is not about you, or about white people, so relax! Nobody is accusing you of anything. It’s about the waters in which we all swim. In these waters, racial disparities in income, wealth, employment, housing, and education have been well-documented.

The Urban Institute in Washington, D.C. used to run experiments where they sent white and black individuals, alike in all other respects, to apply for jobs. Clear differences in receptivity were recorded to the disadvantage of black applicants. By the same token, clear racial differences in wages are observed, after factoring out other likely causes of wage levels such as education, age, and educational credentials.

I did a radio interview years ago with Bill O’Reilly and made this point. He blurted out, “I don’t believe it!” That wasn’t an argument, Bill-O. We all know about that river in Egypt.

CRT is about how institutions, general patterns of behavior, the process of making law itself, result in racial disparities in wealth, income, wages, and other things that matter. This is what is meant by white supremacy. White privilege just refers to those holding the long end of the stick. The subject is not ungenerous, ignorant opinions about black people held by some whites.

The goal of CRT is to get past the obvious, now bygone displays of racism – whites-only drinking fountains – to deep roots in the law that lead to inferior economic status for African Americans. The crime is what’s legal, in race as in money.

Another hysterical claim is that by CRT, America (And you! Again!) is racist. That phraseology suggests a view of the U.S.A. as having no redeeming value. Everyone is deplorable. As a depiction of CRT, that is simply false, what the late Senator Daniel Moynihan described as “Boob bait for Bubba.”

It is true that CRT aims to analyze racist institutions, which it sees as ubiquitous. The inescapable truth of that is reflected in what I noted above: there is simply no other reasonable explanation for the disadvantaged economic and social status of African Americans and other minorities in the U.S.

As the France quote at the top illustrates regarding wealth, a law can be blind on the surface to individual circumstances but still have implications for those subject to such circumstances. So too with race. Race-blind is not necessarily race-neutral. CRT aims to uncover the links between race-neutral law and racism-infected outcomes.

On the second question, is CRT being “taught”? When people say taught, they are worried about indoctrination. But a theory can be taught without students being told, “This is what you should believe.” One can learn about China without being converted to Confucianism.

The county has extensive educational materials on racism. Should students not be taught about racism? Does racism not exist? Shouldn’t minority students be afforded a learning environment free of juvenile, racially motivated distractions? Who in good faith could object?

There would be nothing wrong with teaching about CRT, though it would not be easy to do well. Without doubt, I could find objectionable elements in the LCPS anti-racist curricula. Just as surely, there have been episodes in classrooms that I would find unfortunate. But these same risks apply no less to not teaching about racism. Every offensive episode stemming from anti-racist education has been mirrored in abuse from the opposite direction, ever since school integration began.

CRT is nothing but an effort to analyze how racism functions, not in the form of inter-personal beefs, but through social forces. It would be nice for everyone, me included, to learn more about it. So like I said, we can all relax. There is no good reason to vulgarize a legitimate academic subject into a personalized rebuke of multitudes of white folks. Everything is not about you.

New Horizons for a Children’s Allowance

Pig Fabric, When Pigs Fly Fabric, Cotton or Fleece 1759 | Beautiful Quilt

(Post revised to reflect new law and some errors.)

Senator Mitt Romney (R-UT) has broken with one of the fundamental tenets of conservative economics and politics by proposing a new, expanded Child Tax Credit in his American Family Act (AFA). The novel feature of his proposal is that cash assistance would not be conditional on employment. A similar proposal from the Biden Administration that has been enacted into law is equally a landmark for Democrats, who have historically been defensive about “welfare.” There are also reports of a new proposal that will be put forward by Senator Bernie Sanders (I-VT) and Rep. Rashida Tlaib (D-MI).

All these plans should be welcomed for their ground-breaking nature.The plan of this paper is as follows. First, we describe the credits focused on in this paper – the Child Tax Credit (CTC), the Additional Child Tax Credit (ACTC), and the Earned Income Tax Credit (EITC), as well the related filing status for unmarried parents who file as Heads of Households. Then we compare Biden and Romney proposals to old 2020 law and to each other. An issue that emerges with respect to the Romney plan is the treatment of single parents. Other important details of the plans are beyond the scope of this note.

Tax-Based Benefits for Children

The Federal Individual Income Tax provides several benefits to families with children. Besides the CTC and EITC, they include the Additional Child Tax Credit, the Dependent Care Tax Credit and the “Cafeteria Flex Spending Benefit.” The latter two are beyond the scope of this analysis. Important, related benefits that were eliminated in the Tax Cut and Jobs Act of 2017 were the personal and dependent exemptions. These are scheduled to revive after 2025.

The CTC was popularized as part of the 1994 “Contract with America,” led by then Speaker of the House Newt Gingrich (R-GA). It was enacted in 1997 and provided a reduction in individual income tax liability. Since then, it has been expanded and came to provide a cash “refund” over and above any income tax liability through the Additional Child Tax Credit (ACTC). (“Refund” could be seen as a misnomer, since income taxes are not actually being refunded. In an indirect sense, the refund could be said to offset payroll tax liability.)

The refund is phased in with the taxpayer’s labor earnings, so it is conditional on employment. While it benefits taxpayers with children in the bottom half of the income distribution, it misses those with very low incomes.

The Earned Income Tax Credit (EITC) was first enacted into law during the administration of President Gerald Ford. It began as a “refundable” credit also contingent on earnings. It increases in value with increases in earnings and number of children (up to three) and phases out altogether at higher income levels. Like the CTC, the EITC is not available to those with zero earnings.

President Biden and Senator Romney have both proposed to provide the CTC on a fully refundable basis at all levels of income below $200,000, although under the new law (the Biden plan) the credit phases down to $2,000 per eligible child for incomes of $112,500 and $150,000 for heads of households and married couples, respectively. For most taxpayers, the CTC does not vary with filing status, except in the sense that it is unavailable to those filing single, who have no dependents.

The Proposals

After describing the Biden and Romney plans, we note a problem raised by the Romney scheme: the treatment of single parents. As noted at the outset, both Biden and Romney propose to provide a fixed credit depending on the number and ages of eligible children. Both provide a larger credit for children under age six. For income levels under $200,000 , the credits do not phase out.

The virtue of a fixed credit is that it is higher as a share of income, the lower one’s income, so it serves the objective of tax progressivity. Moreover, in both plans, it is provided irrespective of tax liability. In this respect, it is a marked improvement over 2020 law for families whose incomes are very low, or who have no income at all. It amounts to a “child allowance,” a long-standing goal of liberal social welfare policy.

The absence of a phase-out for most taxpayers means that there is no benefit reduction from earning more money. Such a reduction is understood as an increase in the taxpayer’s marginal tax rate, unlike a “means-tested” benefit that is winnowed away with growth in income. Eliminating a benefit phase-out reduces the taxpayer’s marginal tax rate.

On the other hand, the elimination of a benefit phase-in increases the taxpayer’s marginal tax rate, relative to current law. However, one would be hard-pressed to find a taxpayer who resented such a marginal tax rate increase, since it also means that notwithstanding very low or zero income, they receive a no-strings credit worth thousands of dollars a year for each eligible child.

In general, the preoccupation with marginal tax rates is founded on a dubious view of labor supply – namely, that it is solely a decision by the individual worker. The availability of decent-paying jobs is ignored. The extent to which marginal tax rates actually affect individual decision-making is also debatable.

Another feature of a fixed credit is that it does not change with the taxpayer’s filing status or number of children, so it could be said to be marriage neutral. (Romney’s child benefit entails a partial exception, since it is limited by an annual cap that could affect families with more than three children.)

The first figure below compares the total CTCs for tax year 2021 under old law, and under the Biden and Romney proposals. Both the Biden and Romney credits are reflected in the horizontal line. For children under age six, both the Biden and Romney credits would be bigger, and Romney’s would be bigger still than Biden’s. As we will see below, the greater amount of Romney’s CTC for children under age six offsets some contrasting disadvantages of his plan in certain cases.

The greatest impact of both credits is on taxpayers with less than $40,000 in annual income, including the very poorest. Under current law, both the CTC and EITC reduce poverty. The Biden and Romney plans reduce it further.

The benefits of the Romney CTC are substantially reduced by other “pay-for” provisions in his plan, included for the sake of deficit neutrality. (With a Democratic president, it’s time again to get worried about the national debt.) For purposes of this discussion, the relevant pay-fors are a reduction in the EITC and the elimination of the head of household filing status. The latter pertains mostly to unmarried parents, usually women.

The next figure compares the benefits of the head of household filing status, the CTC, and the EITC under current law, and under the Biden and Romney plans. For heads of households with one child over age six, the Romney plan means a net reduction in these benefits for almost all but those with very low incomes (under $13,625, approximately).

The same pattern can be seen in Figure 3, for households with two children, although the differences are narrowed. The Romney plan looks better in relative terms with additional eligible children, since the EITC phases out altogether and the head of household benefit does not increase with more children. With children under age six, the Romney scheme looks better still. Since it lacks the same higher-income phase-outs as the new Biden plan, Romney beats Biden incomes above roughly $140,000.

Net taxes (taxes minus credits) are shown in the next figure. A lower vertical point in the chart means a larger cash refund for points below the horizontal axis, or lower taxes otherwise. It turns out that for heads of households with one child, the Romney plan reduces credits or raises taxes for most taxpayers. Biden’s plan is better for these taxpayers for every income level below $112,500.

The disadvantages of Romney’s plan disappear for married couples filing a joint return, as shown in Figure 5. Romney and Biden identically increase credits and reduces taxes for all taxpayers, Biden more so than Romney at lower income levels, since Biden avoids Romney’s cuts in the EITC, Romney more than Biden at higher levels, since Romney lacks Biden’s higher-income phase-out for couples with incomes exceeding $150,000. With younger children, Romney would reduce taxes more than Biden for all incomes.

In a few important respects, all these comparisons are flawed. since their underlying financing differs. Biden’s plan is entirely deficit-financed, while Romney’s is “budget neutral.” It’s easier to provide a bigger benefit or tax cut without the burden of offsetting increases in revenue. On the other hand, as we discussed in my report on the Biden budget, under current circumstances, at least for 2021, a massive “free lunch” is available in the form of spending increases and tax cuts. There is no good reason to apply pay-fors in the midst of this deep recession. How either plan would fit into budget planning in the economic recovery hoped for beyond 2021 is a different matter.

As noted at the outset, other details in the respective plans not analyzed here are important. The Biden plan entails a somewhat complicated payment mechanism, since it is based on a partial advance credit paid by the IRS against future taxes. In contrast, the Romney plan locates administration in the Social Security Administration. The Biden plan is set to expire after 2021, while Romney’s runs for ten years.

The extent of new Republican interest in this sort of program makes it more possible to imagine a compromise measure that would extend child benefits beyond this year.

Substack Econ

Yglesias is radically under-informed about public finance. He seems blind to the principal question underlying his remarks, namely, what is the output gap? Pay for public consumption, borrow for investment are nearly useless as principles. The real questions are how much for each, how soon, and what is the economic context for the policies. The desired aggregate deficit depends on the anticipated state of employment, GDP, inflation, and interest rates.

Trying to plan beyond the coming year is futile. The only exception I’d make is to schedule revenue increases to cover the growth of Medicare Trust Fund shortfalls, starting in 2024. (Social Security doesn’t go red until the middle 2030s.)

Revenue coming to the Federal government is fungible. The citizen as taxpayer doesn’t care whether his own dollars are “paying for” infrastructure or infant formula. He only cares about the conditions under which taxation is in force.

Politically speaking, the pay-for notion is creeping back into the public debate, but it remains unsubstantiated by any economic content.

To start with, there is still a lot of free lunch available, as I discussed here.

TIGER and New Starts were tiny programs, evidence of nothing. It’s true that some completed projects can be pointed to as misbegotten. That risks myopia. The year after completion, the Brooklyn Bridge might not have looked great either. Now life without it is unimaginable. Big new projects reorganize economic life around them. Their future value is only dimly visible in the present. Secondly, the cure for bad projects is to do more projects. Diversification.

On the spending side, a number of Green New Deal priorities beckon: the electricity grid, solar, rail (regional and inter-city). Also, just urgent targets of more investment spending include school repair and the care infrastructure.

To be fair, it’s not easy to deal justly with these questions in a Substack column thrown off to meet the quota.

New Shit Has Come to Light

Image result for lebowski new shit has come to light

The past four years have brought about a major shift in the U.S. political landscape, one that affects the entire span of left-of-center political strategy. I’m talking about the transformation of the Republican Party into a fascist formation, following the path of its maximum leader, Donald Trump. As Professor David Hopkins points out, the ascendance of Trump coincides with the collapse of the center-right. This makes a huge difference for our politics.

In past decades, the center-right functioned as an anchor for both parties. It kept the wilder side of the G.O.P. in line, and it constantly beckoned to Democratic centrists with policies that precluded moves to the left. These compromises included obeisance to the twin canards of fiscal responsibility and humanitarian interventionism.

Fiscal responsibility entailed commitments to austerity in the guise of deficit reduction, and opposition to significant expansions of the non-defense public sector. As Bill Clinton argued, “The era of big government is over.” Compared to the social democracies of Europe, of course, that era never began in the U.S.

Major concessions to the center-right were made or came close. Welfare reform destroyed the only, paltry source of a national guaranteed income in the U.S., while work requirements took bites out of Supplemental Nutrition Assistance Program (formerly “food stamps). Social Security might have been privatized, were it not for Monica Lewinsky’s blue dress. De-unionization was indulged, labor rights were ignored, and wages were allowed to stagnate.

The rubric of “humanitarian interventionism” was cover for maintaining aggressive, forward military positions in the world, backed some 800 U.S. bases. This posture was focused on blocking transitions to social democracy in the Global South, and thwarting regional ambitions by unfriendly Mideast powers such as Iraq and Iran.

The upshot of this Democratic Party lean to the right was that a case could be made that minimized the differences between the two major parties. The mistake was not evident until the aftermath of 2000, in the form of the disastrous war in Iraq. We have to hope that Al Gore would not have committed that blunder, for his sake at least.

Now there should be no question of a big difference. A strong majority of Republican voters and politicians continues to support Trump and all his works. These works now include a violent attack on the U.S. Congress, the deaths of police officers, hints of homicidal intentions towards Democratic politicians and the Republican Vice President, and repeated warnings from Trump himself of more to come.

The clear objective, thankfully unrealized, was to prevent the democratic transfer of power. Molly Ball provides a useful history of Republican efforts to wreck the nation’s basic democratic electoral processes, going back months and extending through the entire process of certification of the election results. There was parallel indulgence of murderous, fascist plots against Democratic governors, and literal apologetics for lethal street violence.

Academics may want to debate whether it all qualifies as fascism, but it’s close enough for me.

As Ball recounts, Trump’s excesses have gone to the point of alienating important sections of the capitalist class. His movement threatens the legitimacy of the State, which is a big no-no. The Trump ascendancy leaves a minority faction of Republicans politically homeless. Except in a handful of cases, this #NeverTrump faction is powerless to motivate Members of Congress. It has money to throw around, and its personalities’ faces are sought by CNN and MSNBC in their quests for perceived objectivity, but it cannot muster enough votes in the U.S. Senate to defeat Republican filibusters of Democratic initiatives.

The crucial consequence is that the Republicans no longer have any juice in legislative affairs, and the Democrats no longer have any reason to seek accommodations with them. To the contrary, given their thin majorities, the Democrats need Bernie people and “The Squad” more than ever. And of course, we need them, since the alternative, rule by Trumpists, is unthinkable.

The centrists’ dilemma now is what Jerry Garcia may or may not have said: “We were always ready to sell out, but nobody was buying.” To the contrary, rather than incentives to collaborate, there are diametrically opposite incentives for the Democratic establishment to destroy the GOP, lest they be destroyed themselves. That requires a closer alliance with the Bernie people. Conversely there is incentive for the Bidens to be solicitous towards the Left.

As Hopkins notes, this explains the somewhat surprising firmness of the incoming Biden Administration, showing a willingness to eliminate the filibuster, stick by its $1.9 trillion relief/stimulus package, fire a bunch of Republican holdovers, grant appointments to progressives, and cast off or downgrade such centrist retreads as Larry Summers, Bruce Reed, and Cass Sunstein.

Senator Lindsey Graham predicted in 2016 that Trump’s advance would destroy the Republican Party. This is now a real possibility. Nobody can stand successfully as a Republican for Congress without Trump’s approval. At the same time, few of them can win if the #NeverTrumpers defect.

For the #NeverTrumpers to have any future, they must destroy the party in its present form. Defection is their only option. This might take the form of a new third party with a spoiler impact on GOP candidates. Alternatively, there is some talk of Trump splitting away to form his own party. Either outcome spells a complete meltdown of the Republican caucuses in Congress and in state legislatures.

Electoral failure of Trumpism does not get us out of the woods. One component of our fascist sub-culture is the so-called “Three Percenters.” The name is derived from the fable that only three percent of the population was needed to liberate the American states from the British. The truth of this idea is that it is not impossible for a minority to seize power by violent means. Trumpists, besides being heavily armed, have infected organizations of U.S. law enforcement and the military. In effect, the Republican Party has its own military wing.

The process of liquidating the G.O.P. and reconstituting a viable conservative party in the U.S. will probably take a generation. The interregnum of right-wing disarray will be an opportunity to move from the current system to social democracy. As with ObamaCare in 2018, with all its faults, once people get a look at universal health insurance coverage and the like, it will be difficult to persuade them to give up their newly-acquired economic security.

Broad unity within the Democratic Party will be hard for some on the left to get their arms around. Consider the misbegotten “Force the Vote” exercise. Some deluded souls thought that “The Squad” and others in the House should demand that Speaker of the House Nancy Pelosi hold a vote on Medicare for All as a price for getting their votes for Speaker.

Time for some game theory. What would denying leadership of the House to Pelosi accomplish for the Left? Who would be a desirable substitute? The most likely would have been Rep. Steny Hoyer, hardly a preferable alternative. How about conceding control of the House to the Republicans, completely tying the hands of the Biden Administration?

Or, suppose there is a vote. It would surely be defeated. I am all for primaries against unsuitable Democrats, but the dispensable Democratic Members of Congress are already well-known. Many of them are in marginally Democratic districts and would have no trouble fending off primary challenges.

The Republican Party is busying destroying itself as an electoral organization. Meanwhile, it connives at restricting the right to vote and gerrymandering legislative districts. And it angles for an insurrection that would permit it to take power by force.

Contrary to the rants of some ex-comedians playing at political commentary, now is no time for rejecting collaboration under the umbrella of Democratic Party unity, for centrists no less than the Left. They need us, but we need them too. Barbarism has never been a more plausible threat to the U.S. working class.

There was a riot goin’ on, and a #BLM digression

Donald Trump has been looking for the line for four years. At the start of 2021, he finally found it, and then he stomped all over it. Now for him and his maniacal supporters comes the whirlwind. There have been many identifications of the miscreants who sacked the Capitol, and not a few arrests. There will be many more. The prospects of the Republican Party, at least in the near term, are dim.

Senator Lindsey Graham observed in 2016 that Trump would destroy the Republican Party. I thought as much myself. Now it appears to be finally coming to pass. For a while I cheered on his nomination, until it stopped being amusing. I failed to reckon with the damage that could be done to the country in the interim, nor could I believe he could actually win a national election. I’m afraid I over-estimated his fellow Republicans and the mainstream media.

It is true that Trump retains the support of the bulk of the Republican Party. But this hard core is insufficient to elect people to national office, even under conditions of extreme voter suppression and gerrymandering. We saw the proof of that in Georgia, occurring before the infamous events of January 6th. Now the likelihood of centrists and independents voting R has become remote. The other side of this coin is that while the hard core of the movement will have more trouble winning elections, there is no end to the civic mischief it can cause.

In the riveting Handmaid’s Tale television series on Hulu, it is revealed that the Christian dominionists take power by busting into the Congress and machine-gunning everyone. That is a scenario I’ve been thinking about for the past few years. It seems implausible as a prelude to a successful revolution in the U.S., but now it is not as far from the realm of possibility as a terrorist threat. The fascist share of the citizenry may be too dumb to realize that such a thing could never work as a revolution, but smart enough to pull off a lethal attack with mass casualties. There are hints that something of that nature was afoot this week.

A crippled Republican Party brings some benefits but also some problems. The born-again anti-Trumpers will tend to collaborate with Democrats on some issues and weaken the status of their caucus in Congress, which will be a minority one to begin with. On the other hand, the fruits of Democratic/Republican collaboration are not promising. We will see talk of fixing the non-existent “entitlement problem” and babbling about the public debt.

To be sure, a neo-liberal regime is much to be preferred to a neo-fascist formation, but it presents a different strategic situation for progressive advocates and Members of Congress. With the thinnest of possible majorities in Congress, Democratic-sponsored legislation would be inordinately difficult. The Left would be reduced to promoting proposals with no immediate chance of enactment.

Now there is more chance of legislation passing, but it could be bad centrist legislation. This will require progressives to focus more on criticism than on positive alternatives. Of course, ‘you can’t be something with nothing.’ But neither can you beat something without explaining why it ought to be beaten.

The failure of the authorities this past Wednesday has been well-illustrated, though many questions remain to be answered. The contrast between police preparation for the Trumpist mob and perfectly civil #BLM demonstrators is stark. Reverend Raphael Warnock, soon to be Senator Warnock, was recently arrested in the Capitol for praying.

I would just like add that in fifty years of attending demonstrations in Washington D.C., never violent ones but occasionally naughty ones – peace marches, by and large – I have never seen a situation where police and soldiers were not overwhelmingly capable of making us go anywhere they wanted us to go, or stop us from going anywhere they didn’t want us to go. When a mob of hippies went to the Pentagon to vocalize Buddhist chants of Hare Krishna, we were met with soldiers wielding fixed bayonets.

Treatment of #BLM protests around the country has been a scandal, but we also have examples of brutality against multi-racial and white demonstrators. A recent example was the attack on demonstrators just across the street from the White House, for purposes of affording Trump a cheap photo-op in front of a church.

Another was a demonstration at the International Monetary Fund, in downtown D.C., in April of 2000. Police behavior there was egregious enough to cause the city to lose a civil case brought against it on behalf of the demonstrators, to the tune of $14 million. A similar episode transpired in 2009, also resulting in millions in damages imposed on D.C. At the tail end of the Clinton Administration, there were the massive, non-violent demonstrations in Seattle over the pending World Trade Organization agreements. Anyone who has attended protests of Democratic National Conventions, in cities run by Democratic mayors, can tell the same kind of stories.

The police presence, or lack thereof, is not a black thing. It’s a Left thing. Centering it on race, as far as demonstrations are concerned, is neo-liberal schtick that obscures a more fundamental truth.

Death of Freddie Gray - Wikipedia

Routine, outrageous police abuse of POC is of course a reality. But such treatment is common to cities run by black, liberal, Democratic politicians. One of the best examples was the eruption over the death of Freddie Gray in Baltimore, Maryland, a city government run top to bottom by African Americans. And what of the treatment of #BLM protesters in cities with African American mayors, such as Chicago, Richmond, or Washington, D.C.?

The travail of the victims screams out race, but the source of the victimization is founded on class.

“We don’t think you fight fire with fire best; we think you fight fire with water best. We’re going to fight racism not with racism, but we’re going to fight with solidarity.
We say we’re not going to fight capitalism with black capitalism,
but we’re going to fight it with socialism.” — Fred Hampton, 1948-1969

The Current Political-Economic Conjuncture and the Twitter Policy Institute

Even as Trump and his gang are being ushered off center stage, the inanity of Twitter raves on. Left Twitter. Rose Twitter. Jacobin Twitter. Why do so many feel compelled to opine so often on subjects about which they know so little? It is a mystery. All are welcome to play on my lawn. Just please try not to defecate on it quite so much, o.k.?

I am no more reluctant to criticize the incoming regime than anyone else. I have a long paper trail. I slammed Biden himself in the recent past. I’ve been hammering Democratic leadership for decades, including when I might have hoped to get jobs with them. Now all that is over. I am retired and solvent, my ambitions tempered. I can say any damn thing I want. I don’t need a full-time job that requires a 90-minute train ride twice a day, though out of curiosity I would accept the directorship of the CIA.

I recently wrote that criticism of Biden and company should be held in abeyance until they actually propose to do bad stuff. Of course, trial balloons for bad stuff deserve to be shot down. So too with appointments of objectionable people. But blanket condemnations, along with fantasies of getting anything done solely by extra-parliamentary agitation, are idiotic. Holding our breaths till we turn blue will not inaugurate Medicare For All. Agitating for MFA will empower friendly parties in the Administration and Congress to get Medicare for more.

The ideological confusion also pervades commentary on prospective appointments. Popular babble from the Twitter Policy Institute is similarly ill-informed. (I am not referring here to my friend, Matt B.)

Take Neera Tanden. (Please!) Her nomination to run the Office of Management and Budget was greeted with howls of disapproval. Why? Because she was nasty on Twitter, maybe got someone fired. Now, I’ve never met her, never worked for her, but really? She has been left of center her entire career. It’s easy to imagine much worse at the head of OMB. (Hello, Bruce Reed!)

It gets worse. Then we have Heather Boushey, who is well to the left of center. Unlike Tanden, she has a scholarly paper trail to prove it. We have testimony from people that she is a shitty boss. I’ve known her for over twenty years, though she’s been ignoring me for the last ten. So I don’t owe her anything. I have no first-hand information one way or another about her managerial practices.

In the high-pressure environment of political Washington, D.C., people run over other people. The closer to power, the denser the pit is with snakes. I repeat that I am totally agnostic about the truth of any accusations flying around. I neither support any charges nor reject any.


The indubitable fact remains: anyone complaining about either of these appointments has a dubious grounding in commitment to democratic socialism or to social-democracy. Some things are more important than others. Among the most important is the political-economic framework guiding the incoming Administration. So many other things depend on that, and that depends on who gets the relevant jobs.

You know what matters? The appointment to director of the National Economic Council, who could end up being an unhelpful filter for good analyses and proposals that come from elsewhere in the Administration. It may be a fellow named Brian Deese, from Blackrock, Inc., one of the leading investment firms in the country. The possibility of his appointment has provoked hardly any reaction. I’m reminded of the pointless defenestration of Senator Al Franken. Can anyone not from Minnesota name his replacement or anything she has done?

You might argue, all this is easy for you to say. Nobody is asking you to take one for the team. But the truth is, you couldn’t know whether or not I’ve already taken one for the team. In any event, my own situation, present or past, is irrelevant to the truth of what I’m saying.

With respect to what matters the most, the incoming Council of Economic Advisers has to be very encouraging for the Left. Related is a new paper by Jason Furman and Larry Summers, both for what it says and for who is saying it. Furman was Obama’s chief economist, and Summers is the Bigfoot of Democratic Party economic policy.

The paper reflects a significant, positive evolution for Summers. I would say the same for Furman, except he hasn’t had as long a career and didn’t establish as negative a track record as Summers. The paper is tantamount to a papal encyclical from the Grand Poobahs of Democratic Party economic policy, and it signals a major change in direction. Furman and Summers radically raise the bar to austerity policies. They contemplate a huge expansion in public spending, financed by higher deficits. (I can’t resist adding that there are points in the paper that those of my ilk have been making for decades.) It gives the incoming CEA, as well as progressive advocates, a lot to work with.

I would still quibble on one point: their analysis is incomplete in the sense that it does not preclude a resort to so-called entitlement reform as a remedy for growth of the public debt. It’s hard to find any deficit hawks on the Democratic side these days, both because of the recession and after witnessing the perfidy of Republicans. The latter only worry about deficits when a Democrat is in the White House. But rejection of deficit reduction in the short- or medium-term does not preclude a commitment to it in the longer term.

Changes in Social Security or Medicare typically steer clear of effects on current or imminent beneficiaries. There is nothing complicated about scheduling benefit cuts that take hold ten years out, all the while campaigning for deficit spending in the present.

In other words, no matter what assurances we get about the irrelevance of deficit reduction under current circumstances, there is nothing in such assurances that precludes “entitlement reform” in the longer term. To make it more palatable, it will be described as “saving Social Security,” and it could be designed to be triggered by appropriate conditions in the slightly distant future. Once such a framework is in place, it is much easier for those who subsequently come into political power to tighten the screws.

Bottom line, the grand questions of political economy should not hinge on the course of Twitter beefs or disgruntled employees, however justified their grievances might be. Should the civil rights movement have been sidetracked because MLK was fooling around? I think not.

This should not be a hard call. Criticism of the Biden Administration will be effective to the extent it focuses on the right fights, not by maintaining an incessant, indiscriminate uproar.

Welcoming President Biden

I’m seeing a bunch of lefty “O.K., now let’s go after Joe Biden.” I expect to be in that game myself, but some preliminary cautions are appropriate. At the very least, shouldn’t we hold back criticism until some proposals are rolled out? Some of them will be in the form of trial balloons, which can be shot down as needed. Others will be more forthright. In either case, our brickbats should be substantive.

The fate of Senate races in Georgia will of course be enormously consequential, but they don’t make as much difference when it comes to our longer-term aspirations. Whether or not the Senate ends up even (with Vice President Kamala Harris holding the tie-breaking vote), our vision for social transformation is the same. What is different will be the short-term bargaining situation.

One thing to avoid is binary, all-or-nothing responses. For instance, Biden will propose to expand coverage under the Affordable Care Act. Rejecting any such proposals because they are not “Medicare For All” would be unwise. The convenient and inconvenient thing about health care is that it is infinitely divisible along a continuum. There are always ways to get a bit more, or a bit less. Of course we should demand more than what we expect to get in the end. On the surface, there is nothing wrong with the M4A slogan.

Even so, Medicare For All is an empty box. I’m on Medicare, and I can assure you that in its present form, by itself, it is woefully inadequate as health insurance. M4A proposals in Congress substantially expand Medicare benefits and coverage. With a hostile Senate, expansion of Medicare will be daunting. It will also be a potent political demand. M4A will come to signify universal coverage, something hard to reject for Republicans who are up for election in 2022.

The Biden plan will put a ceiling, at least in the short term, over what is possible. Any such cap is — should be — vulnerable to criticism. Ironically, the more intransigent a Republican Senate could prove to be, the more flexibility it lends to the side of full-blown M4A. If McConnell refuses to deal and keeps his people in line, then there is no incentive to noodle with compromises. If the Senate isn’t blue by January, M4A can make it so in two years.

Aside from genuinely popular initiatives of the sort introduced by Bernie Sanders, Biden has another source of leverage: executive decisions that do not require legislation. Threats on this front might motivate some stray Republican votes on measures that do require legislation. We have every right to expect a blizzard of executive orders that fill the hopper and will be ready to go, the day after the inauguration. The other immediate priority is another Covid/recession relief measure, since anything negotiated with Mitch McConnell and Trump prior to January 20th is likely to be inadequate.

Two things worry me the most.

One is a return to the old-time religion of deficit reduction. Most Democrats have wised up to the political chicanery embodied in this issue. Republicans care about deficits when it comes to Democratic proposals, never when it comes to their own. The problem is, some Democrats, including some liberal economists, still think the national debt is a Problem. Like Obama, Biden might be gulled into some kind of ‘grand bargain’ that entails cuts in Social Security and Medicare and tax increases. It will be marketed as “Saving Social Security.” Such a decision would certainly lead to disaster in the next midterm elections, as did similar decisions by Bill Clinton in 1994 and Barack Obama in 2010. It would also pave the way for Trump: The Sequel in 2024.

The other thing that bothers me is the prospect of Biden returning to the traditional, bipartisan posture of U.S. world policeman hegemony that leads to debacles in Libya and Iraq. The flashpoints include North Korea and Iran. I count the latter as less likely since Biden would probably resurrect the agreement with Iran made by Obama. But by and large, this is an appetite that is never satiated. Ironically, Trump’s signal contribution to the national well-being lay in his aversion to any such grand-scale projects. His violence was focused on defenseless drone victims in the Middle East and desperate asylum seekers at the U.S. southern border.

One tip-off will be the new administration’s plans for the military budget. The need for the “empire of bases” or the ability to fight a couple of ground wars has never seemed less persuasive. The most evident threats to U.S. national security would seem to be in cyberspace, where meddlesome state actors and potential terrorists communicate.

The Chigago 7, Sorkinized

Last night I watched “Trial of the Chicago 7.” Entertaining, nice acting, wildly inaccurate in key respects:

1. ‘Sorkinizing’ Abbie Hoffman into a liberal West Wing intern.

2. portraying SDSers as button-down nerds. In reality they (we) were as raggedy as the Yippies.

3. Inventing a romance between Jerry Rubin and a non-existent, sympathetic female undercover agent.

4. downplaying the abuse of Bobby Seale.

5. turning Fred Hampton from a man into a juvenile.

6. humanizing prosecutor Schultz, who was actually a pig.

7. turning Tom Hayden into a Boy Scout with the never-happened tribute to the war dead. A friend notes that Hayden showed up for the first day of the Weathermen’s “Days of Rage” antics.

So in general sanding off the rough edges of both sides. The Hoffman bit, with his fictional equating of elections with revolution, was the worst.