David Coates 2014-12-28T15:26:12-05:00 David Coates http://www.huffingtonpost.com/author/index.php?author=david-coates Copyright 2008, HuffingtonPost.com, Inc. HuffingtonPost Blogger Feed for David Coates Good old fashioned elbow grease. The American Global Stance as Chuck Hagel Departs tag:www.huffingtonpost.com,2014:/theblog//3.6248500 2014-12-01T11:29:21-05:00 2014-12-01T11:59:01-05:00 David Coates http://www.huffingtonpost.com/david-coates/
That resignation should have triggered a wide-ranging discussion on the direction of US foreign policy and the adequacy of the Obama administration's response to a seemingly endless series of global crises. In particular, it should have enabled us to explore whether this is the right moment to ramp up US military action abroad, or the right moment to persist in reducing the scale and role of American arms abroad. It should have, but so far -- with only a few notable exceptions -- it has not.

Why? Well, mainly, no doubt, because of the powerful political and industrial interests committed to the ever-expanding role of America abroad. But also partly, I imagine, because of two recent and disturbing developments -- one abroad and one at home -- that are currently getting in the way of any sustained consideration of bringing more American troops home.

One is the recent arrival on the world stage of a particularly horrendous form of Islamic fundamentalism (ISIS), one so grotesque as to regularly behead its captives (including American ones). The second is the mid-term capture of the Senate by the Republicans. The first has created a new threat to less radical Islamic forces in a region long recognized as vital to American interests. The second will strengthen the presence in Washington, D.C., of neo-con Republicans in both the House and the Senate, and so increase rather than reduce demands for further US military activity overseas.

Yet precisely because of the latter, this is exactly the moment to raise in a systematic fashion the following set of critical questions. As Republican pressure grows on a beleaguered president to become even more militarily assertive on a range of global issues from the Ukraine to the Levant, we all need to ask ourselves:

Are we currently even in full control of our own foreign policy in the Middle East, or is policy being driven there by the actions of ISIS just as once it was driven by those of Al Qaeda? By launching air strikes against them, are we not actually playing ISIS's game: winning for them a legitimacy in the region that they would otherwise lack? And even if we are not, how is it that we are once more leading what is at best only a reluctant coalition of the willing, with the US military doing the bulk of the heavy lifting for a group of nations (including Arab ones) whose direct interest in the defeat of radical Islam is far greater than ours, but whose enthusiasm for the fight is so much less evident than our own? And since the current view of the American intelligence agencies is apparently that, even though ISIS is now being attacked by US war planes, it still "poses no immediate threat to the United States," does the current return to extensive bombing-runs over Iraq (and now also over Syria) constitute Barack Obama's own version of a "war of choice"? And if it does, why -- after all that has gone wrong since 9/11 -- are our political leaders still making that kind of choice?

Is that military heavy-lifting actually working, or has US military intervention in the region inadvertently become part of (or a major cause of) the problem that military deployment is supposed to resolve? Military interventions invariably solve fewer problems than the neocons of this world are ever likely to admit. Certainly, two Middle Eastern wars since 9/11 have so far failed to produce long-term political stability in either of the war zones (Afghanistan and Iraq) in which they have been waged. In fact the data sets run the other way: Only last month, the IEP's latest Global Terrorism Index reported that 2013 "saw the highest number of terrorist incidents since 2000" -- less than 1,500 in 2000, nearly 10,000 in 2013 -- with the bulk of the incidents occurring in countries in which the US has recently waged ground wars (Iraq and Afghanistan), a drone campaign (Pakistan) and air-strikes (Syria). It is data like these that then led the Institute to suggest that US foreign policy, far from reducing the incidence of terrorism in the Middle East, is actually "making the problem worse." They have a point, do they not -- one indeed that, if The Guardian report is correct, they may even share with at least some unnamed but heavily involved CIA operatives.

Can the US go on affording the cost of military expenditures of the scale into which we have currently settled, given the attendant domestic problems which are in consequence insufficiently funded or not funded at all? It is not as though the US military is in any way tiny, or that curbing its budgets would somehow leave us vulnerable to stronger opponents abroad. Right now, the United States is responsible for at least 40 percent of total global military spending, and has a military budget larger than that of the next 17 military powers combined (many of whom, of course, are also our allies). This, at a time when our transport infrastructure is in desperate need of modernization, our trade deficit with China is at an all-time high, and we are slipping down a series of key international indicators -- not least those on educational performance --for want of greater spending and renewed investment. We have so far expended $8 trillion on the war on terror, and as we continue to lay out treasure at this unprecedented rate, are we absolutely sure that it is the terrorists we are weakening in the process, rather than ourselves?

Is the US so benign a force globally, and so "indispensable" a nation, as virtually the entirety of our political class continues to insist? And if we are, why is there so much anti-American sentiment among the populations directly exposed to all this benign indispensability? Or are we, like every other major power, ultimately engaged in the pursuit of our own national interest, which only occasionally and accidentally involves us in doing good for others? The post-war reconstruction of West Germany and Japan often figures large in the litany of those convinced that we, and we alone, are the first non-imperial global power; but was that benign reconstruction of former global enemies the exception or the rule? In the wake of so many unsuccessful recent nation-building efforts from Vietnam to Afghanistan, and this side of so many ethically problematic covert operations waged by the CIA, it is a question that needs to be both asked and explored to the full. How benign a global force are we -- or can we ever hope to be -- as we send black-ops teams into at least 76 countries, maintain maybe 1000 military bases overseas, deploy drones over other nation's airspace in both South Asia and Africa, and run a secret "black budget" for US spy agencies of over $52 billion: all this in 2013 alone.

If the answer to any one of the clusters of questions set out above is as negative as some commentators have argued, then should we not consider, at the very least, the phased return of the bulk of US military personnel currently abroad, and the closing down of the vast majority of US overseas bases and covert operations? Is it not time to insist that the European Union pick up prime responsibility for handling expansionist moves by a resurgent Russia into territory that is on Europe's borders but not on ours? Is it not also time to return to the institutions of the international community -- especially to the UN -- prime responsibility for the protection of basic human rights wherever they are challenged; and time for the United States to restore full funding to those international organizations, the better to enable them to perform precisely that protecting role?

And is it not time to recognize -- the horrendous events of 9/11 notwithstanding -- that what has turned most manifestations of Islamic fundamentalism from being a regional irritant into a global one threatening American security at home is the sustained US military presence (and active support for unpopular regimes) in its region of greatest concern: the heart of the Islamic world itself? Beheading Americans certainly required a military response: one that was specific, measured and finite. It did not, of itself, require an open-ended commitment to degrade and ultimately destroy. If anyone needed to respond in that longer-term fashion, it was surely those countries and social forces immediately affected by ISIS. It was not the United States itself -- and certainly not the United States acting to all intents and purposes entirely alone.

As policy-makers in Washington struggle with how best to respond to ISIS, they would do well to remember that the roots of religious and national conflict, across areas of the globe as contested as the Middle East, go back far in time and remain in their modern manifestations immensely complicated phenomena. If any of those conflicts had ever possessed the possibility of a quick fix, that moment was lost long ago: and now cycles of violence -- whether US-initiated or ISIS-driven -- are more likely to feed upon each other, deepening and intensifying the problem to which the violence was an initial response, rather than to offer a quick route to a lasting solution. Policy-makers would also do well to remember that, to the degree that political and religious divisions in an area as complex as the Middle East are accentuated rather than reduced by a sustained US presence in the region, plans to lower that presence, rather than to ratchet it up, need to be in the mix when considering how best to keep America safe from terrorism at home.

It is already one of the ironies of the Obama presidency that a candidate elected on a clear mandate to end the war in Iraq should (as president) not only have escalated the American military presence in Afghanistan before eventually drawing it down, but should also now be engaged in an air-war that covers not just northern Iraq but also Syria. If people elected Barack Obama hoping to see the American military footprint in the Middle East reduced, they must now be sorely disappointed. That footprint is still large, and remains (under this president) open-ended. Vice President Biden even promised an ISIS pursuit "to the gates of hell" if one was needed, and those gates are presumably a long way away. Which is why, both in progressive circles and between the two main parties, the case needs to be made again for a fundamental resetting of American foreign policy into a calmer and less ambitious mold. We need to see created in Washington an overall understanding of American foreign policy that will drop the claim about indispensability and returns us --as even a Washington foreign policy insider like Richard Haass has recently argued -- to a global stance more commensurate with our actual capacities and requirements.

It is time, surely, for a calm conversation about what those capacities and requirements happen to be.

A longer version of this posting, with full sourcing, titled "Taking the Imperial Out of the Role of America Abroad," is at www.davidcoates.net

The argument in both postings are developed more fully in David Coates, America in the Shadow of Empires: to be published by Palgrave-Macmillan on December 10. ]]>
The Mid-Term Elections: Taking the Longer View tag:www.huffingtonpost.com,2014:/theblog//3.6184726 2014-11-19T08:59:49-05:00 2014-11-19T09:59:01-05:00 David Coates http://www.huffingtonpost.com/david-coates/
For defeat on the scale we have just experienced really requires a period of quiet reflection and careful conversation about the important lessons to be drawn from recent events by those keen to see a long-term reconstruction of a progressive majority in American politics. That emerging conversation is already underway, here on The Huffington Post and elsewhere; and the following thoughts are meant to be simply one contribution.

Certain mid-term lessons seem clear, at least to me if not (from what I have been reading) always to everybody else.

Democrats don't win elections by trying to be more conservative than the Republicans they are trying to defeat. As we noted in a posting last September, you don't win elections by simply playing defense, and you don't defeat Republicans by trying to outflank them on their right. If the American electorate want to support conservative candidates for public office, there are plenty enough in Republican ranks without the Democratic Party having to put up any more. And in any case, American voters aren't stupid. They know real conservatives from fake ones, and so are not to be fooled by a Democratic Party offering them simply a more civilized form of conservative politics than the Republicans happen to be offering at the time. The Senate candidates who distanced themselves from Obama all went down to defeat: and rightly so, because their insistence on keeping their distance from the president just played into (and helped powerfully to reinforce) the Republicans' main argument in their mid-term campaign: namely that the problem in Washington was too active and too radical a president. Voters believing that rhetoric rightly supported Republicans who offered principled resistance to White House policies rather than giving their votes to Democrats who offered simply to slow those policies down.

Electoral coalitions that are not also governing coalitions flatter to deceive. Cruel as it may be to say now, much of the November 2008 hype to which many progressives (me included) subscribed, was just that -- hype -- the product of a profound misreading of what had, and what had not, just happened. The election of a black president was a critical achievement -- that is not to be denied -- but as we now well see, it did not by itself turn America from a racial to a post-racial society. And the election of a Democratic majority in both the House and the Senate did not, by that achievement alone, provide America with a progressive governing coalition. At the time we thought it did, but it didn't. Far more of the 2008 Democratic Party vote than we initially realized was a vote against George W. Bush and because of the financial crisis, rather than one for Barack Obama as the leader of a progressive coalition. Too many seats were won in 2008 by blue-dog Democrats capitalizing on a temporary conservative unease with the Republican in the White House. Those "conservative" Democrats in the House were quickly replaced by proper Republican conservatives in the first re-election they then faced -- in the "shellacking" of the 2010 mid-terms -- and their equivalents in the Senate have just gone the same way in their first moment of re-election. They were defeated, even though in their time in office many of them did (as they often proudly asserted in their subsequent re-election campaigns) slow down the pace and dilute the direction of progressive reform. We should not forget just how much of the Affordable Care Act was chipped away, during its legislative passage, by resistance from blue-dog Democrats who are now no longer in office.

Governing coalitions have to be created electorally by winning the argument as well as the immediate vote. The main Democratic candidates who won re-election two weeks ago were those who did not distance themselves from the president, but who instead maintained and re-affirmed their progressive credentials. More Democratic candidates might have succeeded in that fashion, indeed, had the White House not chosen to delay its immigration initiative. That delay certainly did not save Kay Hagan in North Carolina, or even Mark Pryor in Arkansas: it simply left the immigration lobby, the Democratic Party and the president in a far weaker position as he makes that initiative now. Polls taken during and after the election show popular majorities for many key Democratic Party policies, and yet in spite of that, the Republicans took back control of the entire Congress. It is quite an achievement for a political party to lose power when people agree with more of its program than they do of its opponent's: and that rather suggests that a party confident about its positions -- and willing to push them hard -- is likely to win both electoral respect and electoral support. It is certainly more likely to do so than one so lacking in self-confidence that it simply chases the tail of its opponent's policies, offering itself as a softer conservative political force rather than as an assertively progressive one.

The building of electoral support for progressive politics requires total honesty about the problems that make progressive politics necessary. Too often, as elections loom, the governing temptation is one of talking up the administration's achievements rather than of emphasizing just how much more needs to be done, and could be done, if Congressional support for the administration was more secure. Building the case for progressive change always leaves its advocates open to the charge that they are talking America down, that they are unpatriotic, even that they are the cause of the very problems to which they draw attention when making the case for change. But there is no ducking this dilemma. Making America stronger by progressive reform is an argument that has to be made; and making it may actually require a critique of existing Administration policy as well as of its current Republican alternative. The case for a different, more progressive, foreign policy will be the subject of a later posting. Now it is perhaps enough to insist that the Democratic Party -- as a prerequisite for an eventual return to effective power in Washington -- be entirely honest about the scale and origins of key domestic difficulties: embedded poverty, stagnant wages, hidden unemployment, lack of adequate welfare services, under-funded public education, and an inadequate transport infrastructure, to name but a few. And that honesty will also require a clear recognition of how far the Obama Administration has actually failed to live up to much of its early promise. The man himself is fine, but his Administration has seriously under-performed. If it had not, many of these problems would no longer be in view.

Why this under-performance? Largely because effective politics is about more than candidates. It is about programs. Yet in making that case for programs over personalities, it is likely that both the media and our own political habits won't help; because left to ourselves, we (and the particular television channel we watch) will no doubt both remain excessively preoccupied with the comings and goings of different members of the political class. Left to themselves, the media in particular will invariably reduce politics to a matter of personalities, in a democratically-unhealthy pact with those personalities themselves. It is such easy journalism -- the journalism of talking heads -- but it is also a journalistic laziness that we can no longer afford to leave unchallenged. The question should not be: will Hilary run? The question should be: on what programs will the Democratic nominee who will follow Barack Obama run? And then, and only then: is Hilary the candidate most likely to pursue those programs with all due diligence? (where the answer may possibly be 'no' ) In other words, one lesson of last November, and indeed of the last six years, is that progressive politics requires programs that select candidates, not candidates that select programs. For until we, the Democratic left in the United States, go through a progressive equivalent of the Republican's Tea Party moment -- until the Democratic Party base, that is, gets serious about policy choices and policy discipline -- the party might win a few elections down the stretch, but the basic status quo in this country will remain fundamentally unchanged. And where will be the gain in that?

Which is why it is now time again for a serious battle of ideas. Partly that battle will be one that Democratic Party activists are long accustomed to waging: pushing back against wholly misleading Republican claims about trickle-down economics, welfare queens, the burden of regulation on American business, climate change denial, and so on. All that will be vital, but there will need to be more -- more ideological struggle on at least two fronts. (1) The case will need to be made again for the important role the federal government can and must play in managing the domestic economy and in regulating the worst excesses of American business: managing the domestic economy to bring back middle-class employment and wages, and to ensure that the benefits of economic growth are felt at the very bottom of the income ladder and not just at the top; and regulating in particular financial institutions that threaten us all if they focus more on speculation than on investment, as well as transnational corporations that make excessive profits by outsourcing American jobs. (2) And the overall narrative of American political history needs to be recaptured again, by challenging (for example) the conservative nonsense that the Federal Reserve System is a problem rather than currently a major source of economic stability and job creation, and by reminding this generation of American voters that the United States was at its strongest under FDR, and not under Ronald Reagan. Electorates are not simply inert phenomena. They are voting blocs molded by the political forces that appeal to them. Why leave that molding to the Republicans alone?

The temptation will be enormous -- on both political activists and political candidates -- to chase the rightward drift of American politics for short-term advantage, surrendering principle for expediency in some desperate attempt to hold on to the White House at any cost. But that temptation is a false one. The only way to be sure that the White House (and ultimately Congress) will stay out of Republican Party control is to stem the rightward drift from which the Republicans alone ultimately benefit. To negotiate effectively, as the English radical R.H. Tawney once told an equally embattled Labour Party in the UK, you first have to get off your knees. It is time for Democrats to stand up proudly for a progressive program to put America back to work and all Americans back into prosperity -- stand up proudly, risk all, and go win elections again on a principled basis.

First posted, with full citations, at www.davidcoates.net]]>
Hype and Reality: American Economic Numbers tag:www.huffingtonpost.com,2014:/theblog//3.5962692 2014-10-09T21:12:57-04:00 2014-12-09T05:59:01-05:00 David Coates http://www.huffingtonpost.com/david-coates/ Evanston a week ago, wanting "people to know that there are some really good things happening in America." The worst of the recession is at last behind us. Since in economic terms, it is also bleak mid-winter in the Eurozone, it is additionally time for a little American triumphalism. The Wall Street Journal reported the IMF forecast that way on October 7: a one-in-three chance of return to recession in the Eurozone, only a one-in-seven chance here. The Europeans are doing badly. We are doing better. The American economy is turning around. There are good times ahead for all of us here in America.

Really? Oh that it was that simple: but it is not. The view from the top of the American economy, and the view from the bottom, are still miles apart. If we are to grasp fully the current strengths and weaknesses of our economic position, it is vital that we go beyond the hype.


From the top, looking at the economy using the standard indicators coming out of Washington, the signs all look positive. After all, the rate of economic growth is up, rebounding strongly from the winter doldrums, with the overall economy growing at a 4.2 percent annual rate of growth in the second quarter of 2014. The rate of unemployment is down, now officially under 6 percent for the first time since the financial crisis of 2008 -- and down now mainly for the right set of reasons: less than because people have stopped looking for work, more because the economy added nearly a quarter million jobs in September alone, in the process putting 2014 on pace to be the "best year for job growth since the 1990s." The number of job openings across the U.S. reached a 13-year high in August; and the overall trend of job creation, up from around 2.1 million new jobs at the start of the year to 2.6 million now, is the highest since April 2006.

Median income is rising again (up 3.8 percent to $53,891 in June), underpinning a modest surge in consumer spending and borrowing. By mid-2014 credit card borrowing was expanding at an annual rate of 7.4 percent, and borrowing on cars and student loans at 10.6 percent: this in an economy in which wo-thirds of whose growth depends on consumer spending. Indeed "the net worth of American households is now 20 percent higher than it was before it began to decline in 2007, the Federal Reserve reported" in September. Adjust that figure for inflation, and the net worth of American households is still 4 percent higher than it was before the financial crisis, one reason perhaps why September 2014 was the month when "at last more consumers say they are better off than a year ago than [say they were] worse off."

So is everything in the economic garden now smelling like roses? Sadly, the answer still has to be "no." Seen from below, the state of the economy seems significantly less buoyant than the data released regularly in Washington might lead us to suppose.


It is true that the rate of economic growth has quickened, but that rate is still low by pre-recession standards. In July the IMF actually cut the U.S. growth forecast for 2014 to just 1.7 percent, the CBO's in August was just 1.5 percent. These are not stellar growth numbers.The official rate of unemployment is falling, and jobs are coming back: but the numbers flatter to deceive. Too great a part of the improvement in the unemployment numbers reflects a shrinkage in the labor force seeking employment -- down 97,000 again in September -- leaving the overall labor market participation rate at less than 63 percent, the lowest since 1978. In December 2007, the participation rate was 66 percent. Since then, 8 million Americans have simply dropped out of the labor force. Had they stayed, the unofficial unemployment rate would be nearly double its current level. The number of long-term unemployed remains high (at 3 million) and so too does the number of those only able to find part-time employment (at 7.1 million). And the rate of job growth still falls short of the numbers required to match labor force growth.

The September job creation number (at just under 250,000) is one of only six months of such job growth since 2008. In the 1990s, there were 47 such months, one reason why "the Hamilton Project estimates we will not reach our former level of employment, when factoring in new labor-force entrants, until mid-2019."

Then there is the issue of the quality of the jobs being created: the bulk are in low-paying sectors, not in manufacturing. In September, leisure and hospitality added 33,000 jobs. Retail added 35,000. Employment in manufacturing, by contrast, flat over the last three months, added just 4000 jobs. This helps explain that most intriguing of trend-lines in the current U.S. economy: job creation rising, but wages -- for the vast majority of Americans -- remaining stuck: and where they are rising, still on catch-up from their levels in 2007. The median income may now be going up, but it is still short of its 2007 peak (of $55,589) by 3.1 percent: indeed, there were 36 states in the Union, plus the District of Columbia, that saw no rise at all in the median income of their citizens between 2012 and 2013. That was in part because overall, half of all the jobs lost during the post 2008 recession were in high-paying manufacturing and construction, while since 2010 the fastest growing employment sectors have been the low-paying accommodation and food sectors. The result: "the annual wage in sectors where jobs were lost during the downturn was $61,637, but new jobs gained through the second quarter of 2014 showed average wages of only $47,171. This wage gap represents $93 billion in lost wages."

So the squeeze on the middle-class is still on, inequality remains entrenched and poverty is still a daily reality for far too many Americans. The Center for American Progress's recent report on middle class living standards contrasted stagnant wages with rising costs. As they put it, "the costs of key elements of middle-class security -- child care, higher education, health care, housing and retirement -- rose," for a family with two children, "by more than $10,000 in the 12 years from 2000 to 2012, at a time when this family's income was stagnant."

Meanwhile, if the data from the Federal Reserve's tri-annual Survey of Consumer Finances is correct, the rich continued to do very well: "incomes rose nicely in the 2010 to 2013 time frame for the top 10 percent of earners (who had a median income of $230,000 last year). They rose slightly, by 0.7 percent, for the 80th to 90th percentile of earners (median of $122,000). But real incomes fell for every other group of earners." For the second year in a row, indeed, the 14 richest Americans earned more from their investments than the entire federal Food Stamp budget now helping 50 million Americans! This, in a year when the American Community Survey showed that "poverty rates were essentially unchanged from 2012 to 2013 in virtually every state;" and a year in which -- with 2.1 job seekers for every available job opening - the historically low figure of less than 30 percent of the long-term unemployed still had access to unemployment Insurance. No wonder, then, that Federal Reserve Chair Janet Yellen could tell a Washington conference in September that she remained concerned that "the large share of American families remain extraordinarily vulnerable to economic catastrophe." Little wonder too that, for all the hype about improving American economic performance, many Americans (anywhere between a third and a half) remain 'unhappy, worried and pessimistic... in the aftermath of the Great Recession."


Currently, the Eurozone may well be struggling more. Certainly its core engine of growth, the German economy, now teeters on the edge of recession, the casualty of its own government's excessive enthusiasm for austerity and retrenchment in its key southern European markets. But as we bemoan Europe's problems, it is worth recognizing the scale and depth of our own; and it is worth remembering too, amid all the European gloom, that workers in the United States still work, on average, anywhere between 250 and 400 hours a year more than in their equivalents in Western Europe. 250 to 400 hours is no less than "an additional six to ten weeks of work a year." High-wage, low-hours Western Europe may now be struggling; but low-wage, long-hours America is not doing that much better.

Several things seem to follow. One is that the recovery of the U.S. economy from the recession is at best patchy and that its benefits are still very unevenly distributed. A second is that we could all do with a lot more honesty and soul-searching on this both in Washington and beyond. A third is that we will never fully recognize the depth of the economic and social failures going on around us if we continue to measure something we call economic success by simple market-based numbers alone. A fourth is that this is no time to crow about U.S. superiority. Times are bad, for far too many people, on both sides of the Atlantic. As Christine Lagarde, the Director of the International Monetary Fund, put it earlier this month, if public policy does not radically improve, the entire "global economy could be stuck on a 'new mediocre' growth path with high debt and unemployment." And mediocrity is an economic condition that none of us should tolerate, let alone praise.

First published, with full citations, at www.davidcoates.net]]>
Playing Defense and Still Losing tag:www.huffingtonpost.com,2014:/theblog//3.5810510 2014-09-12T12:08:55-04:00 2014-11-12T05:59:02-05:00 David Coates http://www.huffingtonpost.com/david-coates/

Political parties can't go forward effectively if they spend all their time running backwards. But running backwards now seems to be the dominant order of the day in key Senate races as Election Day looms. In my home state of North Carolina, for example -- in as key a Senate race as any -- the Democratic incumbent seems set on proving that she, and not her Republican opponent, is the kind of ultra-moderate politician that a southern state should send to Washington. It is apparently not the Kay Hagan strategy to boast of her closeness to the president. On the contrary, whenever her Republican challenger criticizes her for her 95 percent pro-Obama voting record, as he regularly does, the Hagan response is to insist on the independence of her political position and judgment -- and on her reputation as the most moderate of Democratic senators and as the most bipartisan. If the first televised debate between the candidates is any guide, Kay Hagan's 95 percent voting on party lines is something she discounts rather than celebrates.

She is not alone, however, in building a campaign for re-election around the damage Republicans would do if they were to capture the Senate -- in Kay Hagan's case, particularly in the field of education -- rather than around the fundamental changes Democrats could introduce across a swathe of pressing public issues if they were ever again to control both houses. In a string of key races, it is the Democratic candidates, not simply Republican ones, who are currently emphasizing their distance from the president. It is Democrats who are urging the White House not to do things -- particularly not to introduce major changes to the way the immigration laws are implemented, at least not in this election cycle. Time and again, that is, Democratic candidates are allowing their Republican opponents to get away with the nonsense that "Washington is broken" because of Democratic intransigence rather than because of their own, and are leaving unchallenged their opponents' assertion that the problem we face in Washington is the Democratic Party's propensity for big government, rather than the Republican Party's enthusiasm for small government or no federal action at all.

But parties that are running scared of their electorates don't deserve to win elections; and invariably they don't win them. For all that their back-peddling does is to further reinforce their opponents' claim that the wrong party controls (in this case) the White House and the Senate. By nervously playing to some mythical middle ground, defensive parties inevitably hurt themselves more than they hurt their opponents: and they do so in a myriad of ways. For by lacking the courage of their own convictions, they immediately surrender to their opponents the framing of the contemporary political debate. In the process, they also demobilize their own base -- why go out and campaign for someone who lacks the "vision thing"; and they additionally run the risk of alienating would-be floating voters by visibly putting expediency before principle. Defensive parties inevitably fall victim to the first rule of progressive politics -- that you can't negotiate on your knees.

It makes a certain kind of crazy sense, in this election cycle, for Republicans to use voting-loyalty to the president as a critique of Democratic incumbents, because Republican opposition to Barack Obama (and indeed to the first lady) is currently so visceral as in many cases to border on the racist. Tragically, too many Republican voters right now seem to treat Barack Obama as someone to hate, rather than as someone with whom simply to disagree. But particularly in so toxic a political climate, it makes no parallel sense for Democratic candidates to respond to the charge of voter loyalty by retreating from it. That retreat simply reinforces the Republican claim that it is the president's policies, rather than their own, which have gridlocked Washington and deepened our economic and political crisis. That retreat helps simply to demonize the president further. In such a context of conservative intransigence, support for progressive policies emanating from the White House should not be denied. It should be celebrated. It should be worn as a badge of pride by Democratic candidates resolute in their opposition to Republican austerity measures and to the covert racism that informs the politics of at least part of the Republican base.


There is more. Defensiveness in a political party of the size and importance of the Democrats speaks to a deeper lack of confidence in their own political project -- a defensiveness rooted in a growing failure, in the case of the contemporary party, to recognize and celebrate the achievements of Democrats in the past. It is not simply that Tea Party Republicans now dominate the framing of the contemporary political debate. It is also that, to a greater extent than is safe for the future of future progressive politics in the United States, they dominate the way in which today's electorate is told about, and so comes to understand, its own political history. Ronald Reagan was not the first, and he will certainly not be the last, great American president -- arguably, he was not even a great president at all -- not that you would know that if all you listen to, on a regular basis, are the television programs and radio talk-shows of the Right.

Ahead of next week's PBS airing of Ken Burns' The Roosevelts, the importance of telling historical stories, as ways of shoring up support for political achievements still to come, was underscored for me by reading Michael Wolraich's Unreasonable Men: Theodore Roosevelt and the Republican Rebels Who Created Progressive Politics. The Wolraich volume has been widely praised, and rightly so, for it accurately recalls an important moment in the resetting of modern American politics. And in the way the Wolraich argument is developed, the book has clear and present lessons for the way progressive politics need to be developed in this -- our equivalent moment.

Wolraich's Roosevelt was no temporizer with political opponents. Nor was Robert ("Fighting Bob") La Follette, the governor of Wisconsin and then Senator, his major rival among progressive politicians within Republican ranks. Both understood (La Follette rather more clearly and earlier than Roosevelt, if Wolraich is right) that issues of social injustice and economic privilege needed to be addressed openly, resolutely, and without fear or favor. The job of political leadership - for the men who would forge the modern progressive movement -- was not to broker quiet deals in smoke-filled rooms. It was to use the bully-pulpit of the presidency, and then the public attention of the political campaign, to address the major problems of the day with the seriousness and regularity that their severity required. Elections were not to be won or lost, for Wolraich's unreasonable men, by hiding the differences between political philosophies. Elections were to be won -- if not always immediately, but certainly over the longer term -- by widening and deepening them: on the premise that, by taking the longer view, clear and principled political leadership from Washington could catalyze and strengthen progressive sentiment in the wider electorate. Being unreasonable in politics now could shift public understanding of what politics could reasonably become.


There was a moment in the Obama presidency when Barack Obama seemed to realize that. He chose, after all, to make the centenary of Teddy Roosevelt's Osawatomie speech ("the greatest speech he ever delivered," in Wolraich's view) with an Osawatomie speech of his own. (Rush Limbaugh called the Obama version "a Marxist attack on America." ) But the theme the two men shared across the years -- the danger to American democracy of excessive inequality of income and wealth -- stayed as a central theme of Roosevelt's politics to the end. It has not stayed as central to Obama's. Too many Democrats read too many fleeting opinion polls, and urged him to back off. And he did.

We need that progressive confidence, and that willingness to take the longer view, back center-stage in the last weeks of this mid-term election cycle. There is plenty of unreasonableness around in Republican circles right now, and a willingness there to link principle to policy. This is therefore no time to reach across the aisle, to broker deals with a party whose principles are so different from our own. It is time for progressives to emphasize again the choice between the real alternatives now before the American people, and to remind voters that America's greatest days occurred under progressive presidents, not under conservative ones.

It is time, that is, for the Democratic Left in America to remember that elections, like football games, are only won by combining good defense with a potent attack. The occasional "Hail Mary" kick is no substitute -- in politics if not in football -- for the sustained presentation of a principled progressive vision for a better America. It is time to play ball.

First published, with full academic citations, at www.davidcoates.net]]>
Responding to David Brooks: The Question of Poverty and Character tag:www.huffingtonpost.com,2014:/theblog//3.5653041 2014-08-05T21:35:00-04:00 2014-10-05T05:59:06-04:00 David Coates http://www.huffingtonpost.com/david-coates/ "The Character Factory" would have us believe that "nearly every parent on earth operates on the assumption that character matters a lot to the life outcomes of their children" while "nearly every government anti-poverty program operates on the assumption that it doesn't." Assertions like that, coming in the wake of Paul Ryan's proposal to devolve more and more of such programs down to the state level where they can be more properly "personalized," raises a question of fundamental importance. Is poverty ultimately a matter of character? If it is, then anti-poverty programs need resetting, as David Brooks would have them reset, to focus more on the development of character than on the provision of material resources. If it is, then people like Paul Ryan are right: the propensity of liberals to treat the poor as victims of circumstances, rather than as the authors of their own fate, needs to be rethought. If poverty is ultimately a question of character, as the Brooks' essay would suggest, then poverty is genuinely something that can be solved by the poor themselves showing more of the effort and determination necessary to transform their circumstances.

Such a view of the causes of poverty, and the best route to its resolution, is common among conservative commentators and politicians in contemporary America. Poverty, they regularly tell us, is the consequence of the character of the poor themselves. People put themselves in poverty by the poor choices that they make: specifically by having children out of wedlock, or before they have the economic means to be successful parents; by dropping out of school far too early; and by simply not developing the appropriate work ethic -- what David Brooks characterized in "The Character Factory" as "grit and perseverance." The poor make a choice, and they suffer accordingly. Logically, two consequences seem to follow. One is that if those Americans currently trapped in poverty had made other choices, they would not now be poor. A second is that, to the degree that generous welfare provision panders to the very character traits that keep people in poverty, cutting welfare actually becomes a far more effective way of helping the poor than any addition to welfare programs can ever hope to be.

But is a discussion of character the best way to frame a conversation about the causes of contemporary poverty, and is individual choice the key variable at play here? I, for one, don't believe that it is.


Focusing on issues of character and choice, when discussing poverty, suits conservatives because it emphasizes the causal role of "agency" rather than "structure" in the creation of social problems. Talking about character pulls attention away from the underlying set of economic and social forces that are currently making so many Americans poor. Such a focus obscures the extent to which so many people are currently poor in America, not because of character defects of their own, but because they are involuntarily under-employed - or trapped in part-time employment -- in an economy running at only half-speed. They would choose full-time paid employment if only they could get it, but they can't. It isn't there to be had.

Focusing on issues of character and choice also obscures the extent to which so many Americans are currently trapped in poverty by their dependence on inadequate welfare payments, from which they can only escape into low paying jobs that, for them, mean simply a move from public sector-based poverty to a private-sector one. And focusing on character and choice obscures the extent to which yet more people are trapped in poverty by working full-time in jobs that pay poverty wages (one American job in four currently is of that kind). Cumulatively, what this conservative refocusing of the poverty debate does is to obscure the extent to which people of good character are made poor by bad circumstances that they didn't choose, circumstances that they don't want and circumstances against which they daily struggle.

For do most people "choose" to be so trapped? Do they really? I don't believe that they do. If a life of poverty is something people genuinely choose to adopt, then it is remarkable just how many people in America now seem keen to make that choice -- both for themselves and for their children. It is even more remarkable that the children of the poor consistently make that choice again and again as they get older; that women (especially single mothers) make that choice more than men; that retirees dependent on Social Security make it more than retirees with occupational pensions; and that African-Americans and Hispanic Americans consistently make that choice in greater numbers than do their white equivalents.

There seem to be patterns here, patterns reproduced by a myriad of isolated individual decisions, but patterns that hold regardless of the individuals whose decisions call them into existence. Which is why there is something particularly offensive about the speed and ease with which so many commentators on the American Right, instead of probing beneath the surface for the underlying causes of the "pathologies" of poverty they so dislike, move instead to demonize the poor, endlessly blaming them for making "bad choices" as though good ones were plentiful and immediately at hand.


Conservative commentators see individuals acting quite rationally within the parameters of what is possible there, and then condemn those individuals for not doing what they could have done had the parameters been wider. They see the last act in the drama but never the prologue. Margaret Thatcher's great ally in her pro-market reforms of the 1980s, Norman Tebbit, used to tell the UK poor to "get on their bikes and go find work", as his father had before him in a British economy then full to overflowing with jobs. But when jobs are scarce, you have to peddle further. If you are already trapped in urban poverty, the incline up which you have to cycle is steeper than in the suburban flatlands. If the world around you is racist, cycling alone can be dangerous if you are black/Hispanic. If it is sexist, women cyclists beware! The level playing field on which all of us are supposed to act with responsibility is just not there in a world scarred by inequalities of class, race, gender and age that have built up over the generations.

So advocate peddling by all means. Personal responsibility (David Brooks' "character") is the necessary last moment. We can all agree on that. But if we do not simultaneously work on the positions that create poverty, focusing instead only on the individuals currently occupying them, all that can happen is that some of those individuals will escape to affluence, but the positions of the poor will still be there, to be filled by the next generation of the under-resourced. People will rotate in and out of poverty, but poverty itself will remain; and people of good character will remain trapped in poverty for want of the good jobs and the good wages which alone can bring the rate of poverty down. To the extent that refocusing the public debate about poverty onto issues of character pulls that debate away from a conversation about wages and jobs, it does real damage, by helping to perpetuate the very poverty it claims to be concerned to resolve.

First posted at www.davidcoates.net]]>
Defending Trade Unions While the Justices Are Away tag:www.huffingtonpost.com,2014:/theblog//3.5601891 2014-07-19T10:02:01-04:00 2014-09-18T05:59:06-04:00 David Coates http://www.huffingtonpost.com/david-coates/ Burwell v Hobby Lobby has attracted most of the ire of progressive commentators, but that judgment was not the only one handed down on that last day. The nine justices also ruled, in Harris v Quinn, on an Illinois law requiring public sector employees to pay union dues even if they have no wish to become union members. Because it is likely that both judgments will have long-term adverse consequences for progressive causes, a moment of reflection on that second judgment is well in order.

The Harris v Quinn case was focused on government home-care workers in Illinois. The majority ruling struck down a law authorizing the state to agree with the relevant trade union (the SEIU) the dues that those workers should pay as a fair share of the cost of the union services provided. The majority struck that law down on the grounds that it "violated the government employees' First Amendment rights to be free from providing financial support to collective bargaining." And they struck it down even though under Illinois law unions "have a legally imposed duty of fair representation: they are required by law to act in the interest of everyone they represent, not just those who voted for the union."

The judgment was presented by Samuel Alito -- writing for the majority -- as a narrow one, applying only to what he termed people who are "not fully-fledged public employees" -- but in truth it was not a narrow ruling. It had, and will continue to have, far wider implications and significance than that: for the following reasons at least.

The Ruling's Place in the Wider Attack on Trade Union Power

The Alito claim for narrowness is disingenuous in part because of where the ruling stands in relation to the general conservative attempt now underway to remove trade unions entirely from the U.S. industrial and political landscape. This attempt is currently both nation-wide and nationally coordinated, focused primarily on where trade unionism remains vestigially strong (among public employees): with one set of state-level Republican legislators after another now systematically introducing legislation "aimed at lowering labor standards, weakening unions and eroding workplace protections for both union and non-union workers." To take just 2011-12 as an example: that year -- the first after the Republican 2010 mid-term sweep of state legislatures and the House of Representatives -- 15 states suddenly passed laws restricting public sector collective bargaining, and 19 introduced "right to work" bills, the cumulative effect of which was "to undercut the ability of low and middle wage workers, both union and non-union, to earn a decent wage." (This at a time when, as the EPI calculated, "wages in right-to-work states [were] 3.2 percent lower than those in non RTW states, after controlling for a full complement of individual demographic and socioeconomic variables as well as state macroeconomic indicators." ) It is not that the Supreme Court, in adjudicating Harris v Quinn, was merely marginally restricting trade union rights in a period of ever expanding trade union strength. It was far more a matter of the Supreme Court lining itself up alongside powerful interests that have already brought American trade unionism to its weakest condition for a generation, chipping away still further at the modest remains of the social architecture of the 1930s New Deal. The particular judgment in Harris v Quinn did not fully reverse earlier Supreme Court decisions upholding the rights of public sector unions - of teachers, firefighters and law enforcement officers -- to insist on fees from everyone they represent: but it sent a very strong signal that any future challenge to that insistence will be well received by the conservative majority on John Roberts' Supreme Court.

The Ruling's Place in a Set of Recent Supreme Court Judgments Cumulatively Reducing the Rights of Individual Workers Against Their Corporate Employers

This judgment does not stand alone. It followed others. It followed the ruling in Citizen's United, for example, that gave free speech rights to corporations as well as to individuals, so leaving the former able to effectively drown out the latter by the sheer size of the resources available to corporate America. It followed Samuel Alito's 2012 emphasis on the First Amendment rights of non-union workers in his ruling in Knox v SEIU. And it was handed down alongside the ruling in Burwell v Hobby Lobby where "the court ruled that corporations have religious rights that trump the rights of their employees and allow[ed] the corporation to pick which laws it would like to follow and which it would like to ignore." It is true that the majority of the Supreme Court presented themselves in the Harris v Quinn ruling as siding with individual workers against the unions that negotiate their collective agreements, but as Paul Waldman rightly observed at the time, it would appear that "the court's conservatives become concerned about workers and their rights only when some subset of workers is seeking to undermine unions, which exist to equalize the power imbalance between employers and employees." While the ostensible purpose of the court was one of extending individual rights and defending the freedom of work, the reality behind the judgments was and will remain just the reverse. As Michael Kinsley recently put it, " 'Right to work' sounds like a law guaranteeing you a job, or at least protecting your job once you've got it... in fact, it's almost the opposite: the main effect of right-to-work laws is to outlaw regulations of employment and to allow your boss to fire you without cause."

Standard Misunderstanding of the Special Nature of Labor Markets

In launching their "individual rights" defense of Harris, the conservative majority on the Supreme Court reinforced the usual image of unions as unwanted and unneeded monopolies, as private institutions distorting labor markets in which individual workers would be better off by simply acting alone. But labor markets are not like other markets -- markets for commodities or markets for money -- in which demand and supply regularly balance out unless monopoly forces distort their interaction. It is simply not the case that labor markets automatically settle at socially and economically optimum levels of employment and efficiency unless disturbed by trade union intervention, or that what we face without trade unionism is a level playing field between employer and worker which trade unionism then distorts. We do not. Unregulated labor markets are stacked heavily against labor. There is a basic asymmetry of power between the individual worker and his or her employer that trade unionism attempts to address. There is a power gradient running against labor unless unions act to pull it back. That redressing has never been more than partial, even at its greatest (to date) in the labor codes of the western European welfare states. If American conservatives now want to widen still further the distance between U.S. labor rights and European ones, as they appear to do, what they are actually arguing for is an intensification of the power gradient against labor -- one that will leave individual workers less free than before to control the terms and conditions of their employment.

The Beneficial Consequences of Strong Trade Unionism

In the context of such power inequality, trade unions do not so much distort the labor market as help level the playing field within in. For workers without union protection face employers for whom their individual employment is at best only a marginal concern, even though for the individual worker it is the major one; and workers without union protection face work processes in which the employer's interest is invariably to intensify that work process whilst minimizing the associated worker compensation. In unionized industries, workers staying out of the union free-ride on those who join -- taking the benefits of collective bargaining without being willing to help fund the trade union bargaining for them. And in non-unionized industries (now virtually the entirety of U.S. manufacturing industry and the service sector) employers who treat their employees as just another factor of production -- one that is disposable when no longer needed -- invariably under-utilize the full potential of the skills and capacities of the workers they dehumanize in that fashion. Individual workers need trade union protection to block-off sweat-shop routes to short-term profitability; and workers in general need strong trade unions to keep rising wages as the key driver of the consumer demand so vital to long-term U.S. economic growth. Stronger trade unions are not part of the American economic problem. Rather, it is their weakness which is the problem: leaving one American employer after another free to survive by dragging down wages and by intensifying working conditions in a desperate collective race to the bottom. It is the continuing weakness of American trade unions which helps explain why, when the ITCU in 2014 graded 139 countries against 97 indicators of working conditions - seeking to discover the world's worst countries for workers -- the U.S. scored only a four on a six-point scale (Denmark scored best -- a one): with the ITUC finding in the U.S. case "the government and/or companies engaged in serious efforts to crush the collective voice of workers putting fundamental rights under continuous threat."

Consequences of the Contemporary Weakness of American Labor.

The conventional wisdom in conservative circles on both sides of the Atlantic is that the economies strengthen as trade unions decline. But the reality in contemporary America is entirely otherwise: dwindling trade union power and long-term U.S. economic and social under-performance now go together; and that is evident in at least four different ways. One is that with trade unions weak after years of employer and political resistance, wages have actually stagnated or fallen since 2000 for the vast majority of American workers: with hourly wage rates falling particularly severely for low-wage workers, and for young workers without college degrees. Currently almost one in four Americans in full-time employment earns less than the poverty rate for a family of four; and those proportions are higher still for Hispanic Americans (42.2 percent) and for African-Americans (35.7 percent). A second is that wages remain particularly low in industries in which trade unionism is particularly weak -- across manufacturing as a whole, across retail, agriculture, leisure and entertainment -- with serious consequences for pay inequality within key economic sectors. Top restaurant industry CEOs, for example, made a staggering 721 times more than the minimum wage workers they employed in 2013: a ratio no strong trade union would ever tolerate. A third is that, because wages are generally low in spite of rising labor productivity, the rate of economic recovery from the 2008-9 recession has been singularly slow. The demand for new commodities has simply not been there in the volume required to pull America's factories back to full output and to full employment. So that fourth, with total demand across the economy remaining so low, resulting levels of unemployment and under-employment remain disproportionately high. To date, two-thirds of states still haven't recovered all the jobs they lost in the recession, and that includes 14 of the 22 states with those strident right-to-work laws on their books that are supposed to make their states particularly employer-friendly. Meanwhile, "the broadest measure of unemployment, which includes people who are working part-time because full-time positions are not available, [still] stands at 12.1 percent."

An America Free of Trade Unions Is Not, Therefore, Free of the Labor Market Defects That First Called Those Unions Into Existence

Rather and on the contrary, as trade unions have weakened in the United States in the years since the Reagan presidency, income and wealth inequality has grown, poverty has remained entrenched, and vital public services such as education and law enforcement continue to be underfunded. A strong trade union presence in public life does more than protect individual workers against excessive exploitation. It also helps create a public culture that recognizes the limits of individualism, the need for cooperation and trust between all of us active in the U.S. economy, and the vital role that fairness and equity play in creating a genuinely free and prosperous society. Conservatives appear to recognize full well this link between trade union activity and social justice: that is why they work so assiduously to undermine trade unionism whenever an opportunity occurs. Those of us who care for social justice need therefore to be equally assiduous in our defense and advocacy of strong trade unionism. We need to push back as hard as we can: for as income and wealth inequality intensifies in contemporary America, and the gap widens between the haves and the have-nots, this is not the time to weaken trade unionism further. It is time instead to build the strong collective institutions vital to a successful progressive coalition. The reconstruction of a vibrant labor movement will simply not happen on the scale we now require until progressives seize every opportunity to speak out clearly in defense of the benefits of strong trade unionism. When the judges get it as wrong as they did on this occasion, that defense becomes even more vital than it was before.

First posted, with full academic sourcing, at www.davidcoates.net]]>
Winning in November by Defending the Affordable Care Act Now tag:www.huffingtonpost.com,2014:/theblog//3.5487931 2014-06-12T10:17:08-04:00 2014-08-12T05:59:05-04:00 David Coates http://www.huffingtonpost.com/david-coates/ roll them back.

That defense is particularly vital in the case of the Affordable Care Act, which is both the singular domestic achievement of this administration and the prime target of Republican invective. As many of us are only too painfully aware, the Affordable Care Act is not -- and never was -- a perfect solution to the many-sided problems of the American healthcare system. But rolling it back in the manner now proposed by its conservative critics would only make those problems worse. So to bolster support for Democratic candidates in November, and to begin to lay the ground for a progressive reform of the Affordable Care Act in the years to come , it is vital that we push back now against Republican criticisms of what they continue to mislabel and disparage as "Obamacare."

How exactly?

By challenging the Republicans' core criticisms of the Affordable Care Act.

The ACA is not a job-killer as the Republicans like to claim. Nor did the recent Congressional Budget Office report say that the full implementation of the ACA will "kill" 2.3 million jobs by 2021. On the contrary, the report made clear that the Affordable Care Act will not increase either unemployment or underemployment (people working part time who want to work full time). It also found little evidence of employers dismissing workers to avoid having to provide coverage. What the Report did predict was that 2.3 Americans may chose not to work because they no longer need to do so to get healthcare cover from their employer. The ACA will increase their choice. It will not take away their jobs.
Far from costing jobs, the full implementation of the ACA may actually help increase employment by slowing the rate of healthcare costs and by subsidizing the purchase of healthcare coverage by the low paid. The effect in both cases will be to increase that part of total national income available for the purchase of other goods made by other workers. If the full implementation of the ACA then does enable some sick or poorly-paid workers to pull out of the labor market entirely or in part, their departure will leave fewer people competing there, so strengthening wage growth (and consumer demand) again. It seems reasonable to expect therefore that the marginal disincentive to work associated with the phasing out of federal healthcare subsidies as income rises (a common feature of all safety-net programs) will be more than offset in the ACA case by the general boost to consumer demand triggered by the subsidies themselves.
The ACA will not institutionalize death panels, bring big brother control of your individual healthcare decisions, grossly inflate existing insurance rates or expose private health data to the wider world. All it will quietly do (and is now doing) is make access to adequate healthcare affordable for that wide tranche of Americans currently unable to afford healthcare insurance and so forced back onto an erratic dependency on emergency hospital coverage and free clinics. The ACA is not driving people out of healthcare coverage. It is simply obliging some people to change their particular healthcare plans, often for something better.
Nor will the ACA collapse under its own weight -- there is no "death spiral" for the Act because enough young healthy people are already enrolling and far fewer than anticipated are choosing to take the fine -- and the long-term budgetary implications of the ACA are all positive. A healthier population paying more taxes, helping to bring the long-term trajectory of public debt down rather than up.

Listing the many ways in which the Affordable Care Act is already bringing much needed improvements to the U.S. health care system, and will yet bring more.

• In spite of the problems associated with the initial launch of the healthcare exchanges, the number of Americans signing up on them for coverage has already reached at least 8 million.
• Among those not signing up on the exchanges but gaining/retaining cover, we need to count the 2.37 million young Americans enabled by the ACA to stay on their parents insurance until age 26, 1.87 million of whom would otherwise be likely uninsured.
• The ACA improves access to healthcare for those with pre-existing medical conditions, and for women of all ages, by banning a series of insurance company practices that discriminated against both categories of Americans.
• People without employer-provided healthcare insurance (a growing proportion of the U.S. population ) can now buy insurance on exchanges especially created for that purpose, and receive financial help from the federal government if their income falls below four times the poverty level for their size of family.
• In states that take up the option, people on the edge of poverty (earning up to 133 percent of the poverty level for their size of family) become eligible for Medicaid, with the federal government initially picking up all the additional costs involved in making that provision.
• Senior citizens get help financing part of the doughnut hole in their purchase of prescription drugs (with the hole to be fully eradicated by 2020). In 2011, 3.6 million Americans saved more than 42 million as a result.
• The ACA contains a number of cost-containment provisions that can only help to lower the trajectory of overall healthcare costs over time. These include changes to payment systems (especially for Medicare), an Independent Payment Advisory Board, and funding for research designed to increase medical efficiency, as well as an increased emphasis on wellness and illness prevention.

Showing that the impact of the Act would have been greater but for opposition from conservatives to key elements of its design & implementation.

The impact of the Act on the trajectory of health care costs would have been greater if the original legislation had included a public option, but that element was removed from the original bill in order to win support from blue-dog Democrats and moderate Republicans.
The numbers of Americans without adequate health care coverage would have been greater had a conservative majority on the Supreme Court not allowed states to opt out of Medicaid expansion; and had Republican-led state governments not taken that opportunity to refuse the large federal funds earmarked for that very purpose. Twenty-six such states have now rejected expansion, and with it the "federal funds that would finance 100 percent of the expansion costs for three years and at least 90 percent thereafter."
That refusal by Republican state legislators to expand Medicaid coverage will shut out from affordable healthcare anywhere between 5 and 8 million of the most vulnerable and poorly paid Americans. It also creates a genuine "Medicaid Gap" in which people eligible for full assistance in purchasing healthcare coverage on the state exchanges run the risk -- if they lose their jobs and end up with income between 100 percent and 133 percent of the poverty level -- of finding that Medicaid will not step in to make up the loss.
The people paying the price of Republican intransigence are the very people most in need of healthcare coverage. The evidence is now clear that the proportion of uninsured Americans aged 18 and over is falling faster in states that choose to extend Medicaid and set up their own exchanges than in states that refused. The evidence is also clear that the proportion of the uninsured who become eligible for federal assistance in purchasing healthcare cover is significantly higher in states expanding Medicaid eligibility under the ACA (at 68 percent) than in states declining to do so (44 percent). Indeed, "if the latter states were to extend Medicaid eligibility, 71 percent of their uninsured would be eligible for assistance."

Demonstrating that -- to the degree that the Republicans do possess a coherent alternative set of reforms -- those reforms will only make health matters worse.

The Republican Party has been very slow to offer a detailed alternative, caught as it has been in the realization that "you can't achieve the good stuff in the ACA, like coverage for people with pre-existing conditions, without also including the stuff they hate, the requirement that everyone buy insurance and the subsidies that make that requirement possible." This silence on policy design is compounded by the fact that the main thing Republicans appear to dislike in the ACA -- the individual mandate -- was originally a Republican rather than a Democratic suggestion, offered as an alternative to the Clinton health plan in the 1990s.
The main plan currently on offer -- the Hatch/Coburn/Burr plan -- will add to middle-class tax burdens. The plan would use market competition to keep costs down, and level the playing field between employer-provided healthcare and privately purchased health care by capping the proportion of health insurance contributions by both employers and their employees that goes untaxed. Currently 100 percent does. They propose setting a cap at 65 percent. But that would represent a significant tax-hike on middle -class Americans, the very thing Republican lawmakers regularly set their face against doing. The Senate Republican plan would also "likely cover fewer uninsured people, raise premiums for many older Americans, shrink Medicaid...scale back protections for people with pre-existing conditions, and allow private insurers to escape many of the consumer-friendly protections now imposed on them." It is hardly surprising then that Republican enthusiasm for the plan has quickly wilted.
A simple repeal of the ACA would leave the status-quo-ante in place: and that is itself both morally and politically questionable. Are Republicans really in favor of taking young adults off their parents' healthcare coverage, allowing insurance companies to discriminate against pregnant women and the really sick, or ending subsidies for healthcare for low-income hardworking American families? In the name of what: the right of young currently healthy Americans to free-ride on the hospital system should they become suddenly and unexpectedly sick? Untrammeled freedom for young millennials is a weak moral basis for rolling back even the modest gains made by the Affordable Care Act: and even healthy twenty-year olds eventually grow old.

Recognizing the limits of the Affordable Care Act, and proposing ways of improving it.

32 million Americans were still without coverage in 2012. The CBO estimated in April that 31 million will still be uninsured a decade from now. They will not get that coverage until/unless we reverse the refusal of states to extend Medicaid availability, or effect a root-and-branch replacement of the ACA with a single-payer system. Currently, 80 million Americans remain either uninsured or underinsured. That cannot be right.
The early implementation problems have damaged the credibility of the ACA and continue to bedevil it. Right now, for example, of the six million Americans who have gained Medicaid coverage since last September, at least 1.7 million of them are still waiting for their applications to be processed -- some indeed have waited eight months already. Improvements here are needed fast.
Health care costs continue to rise, as is the proportion of that rise falling back on patients (via deductibles and co-pays), with the burden greatest for the chronically ill. Neither trend is satisfactory. We will not pull healthcare costs fully under control without tighter regulation of insurance companies, the breaking of local insurance monopolies, and the replacement of a fee-for-service medical reimbursement system with one based on a per capita basis.
The ACA remains unpopular. It is time to reverse that by some honest, detailed and informed talk. It is time to insist that the social contract at the heart of the ACA -- that the healthy pay for the sick, and when sick themselves are covered by the healthy -- remains a morally desirable one. It is also time to re-emphasize the basic choice that all healthcare systems face -- of how to balance conflicting demands for treatment with the necessarily limited resources available to meet them -- and to stress again that unregulated market mechanisms are singularly inappropriate for the striking of that balance, given the current level of income inequality.
• It is time to say too that the case for a single-payer system remains compelling, and that the ACA should be best thought of as one more stage in the on-going struggle to achieve a healthcare system free at the point of use.

The biggest problem the Republicans have with their opposition to the ACA is that, for all its faults, the Act is actually making a positive difference. The evidence is everywhere. When its prototype was introduced (by Mick Romney of course!) in Massachusetts, the mortality rate fell. When medical providers combined in the ACA's Accountable Care Organizations, their spending on Medicare fell. "State health insurance marketplaces that offered consumers very few health plan choices in 2014 are starting to add more insurers," ...and so on. We can't afford to let Republicans take us backwards in this key area of social reform, which is why now is the time to push back against the ACA's conservative critics with all the force we can muster. Hopefully this checklist will be of some value in that pushback.

First posted with full sourcing at www.davidcoates.net
Progressive Politics After Piketty: Making the Case for Managed Markets tag:www.huffingtonpost.com,2014:/theblog//3.5320309 2014-05-13T23:02:40-04:00 2014-07-13T05:59:03-04:00 David Coates http://www.huffingtonpost.com/david-coates/ Capital in the Twenty-First Century is currently being both widely read and even more widely discussed. That is great news. The question it leaves us with is how to put all that reading and discussion to best use.

My suggestion is that we capitalize on this rare moment of clarity on the true sources of contemporary inequality by placing the Picketty thesis at the core of a wider argument on the need for a managed capitalism. We need that progressive argument now -- and we need it disseminated widely in the run-up to the mid-term elections -- because of the equally wide dissemination around us of its obverse: namely the libertarian and conservative counter-assertion that markets work best when regulated least.

The standard line for a fully deregulated set of capitalist markets goes something like this.

There is no need to regulate capitalism because, left to themselves, capitalist markets are the great drivers of human progress. Unregulated markets not only generate economic growth, as recent history so clearly demonstrates. They also allocate scarce resources in an entirely optimal way. Prices in unregulated markets educate consumers, trigger entrepreneurial activity and set in motion Adam Smith's "invisible hand" -- the one that leads entrepreneurs to benefit society without planning to do so. Interference in such markets by well-meaning governments only distorts those optimal settlement points. Heavy taxation discourages enterprise. Labour laws create unemployment; and bailing out the weak only penalizes the strong. Letting the market decide is more than economic common sense. It is also the quintessential American way of doing business. Let Europeans regulate markets if they must, but don't bring those European weaknesses to this side of the Atlantic.

So what does the Piketty argument do to that general case?

Debunking core claims It blows a huge hole in the central libertarian and conservative claim about optimal allocation. Conventional economics would have us believe that unregulated markets can be expected to reduce income and wealth inequalities over time. Piketty, by contrast, demonstrates that, without political intervention, unequal societies are likely to become more unequal rather than less. That is particularly so, he argues, in periods of slow economic growth of the sort we have witnessed in advanced capitalist economies since the 1970s; for in those periods, when the rate of return on capital and the rate of economic growth both diminish, the latter slows much more dramatically than the former. As he recently put it:

"Beyond education and income factors, history tells us that, in the long run, the most powerful force pushing in the direction of rising inequality is the tendency of the rate of return to capital (r) to exceed the rate of output growth (g). When r exceeds g, as it did in the nineteenth century and seems quite likely to do again in the twenty-first, initial wealth inequalities tend to amplify and to converge towards extreme levels."

The Piketty data suggests that inequality in contemporary capitalism is now at such a level that ordinary market processes no longer apply. Instead the trend is otherwise: "The past tends to devour the future: society inexorably tends towards dominance by inherited wealth." So just because healthy competition requires some degree of inequality, there is no reason to claim that for reasons of competitiveness we must tolerate whatever level of inequality happens to prevail. If Piketty is right, too much inequality is as damaging to long-term economic health as too little.

Perfect & Imperfect Competition The data-sets in the Picketty volume are new and extremely valuable, but the basic argument that they sustain has its own long and well-established pedigree. It has long been recognized by critics of market deregulation that only under the very special circumstances of perfect competition do capitalist markets perform in the optimal way claimed for them by their advocates. Unregulated markets work in that optimal way only when the economy is entirely composed of small firms competing with each other in sectors that are easy for new firms to enter. And unregulated markets only work in an optimal way in economies in which no one firm is capable of affecting prices in the market by its actions alone. But modern capitalist markets are rarely of that kind; and when they are, the competitive processes that go on within them invariably move them away from such perfect competitiveness. Markets necessarily generate both winners and losers. As the winners get bigger and the losers smaller relative to each other, perfect competition between them becomes necessarily imperfect in character unless those markets are managed back into competitiveness. No matter how often it is asserted otherwise, market competition rarely works in the manner of Adam Smith's invisible hand; and it does so only if, and to the degree that, periodically the invisible hand is itself given some externally-generated assistance.

Arguments for market regulation Nor is anti-monopoly policy of itself enough for progressive purposes, for unregulated markets do more than generate structurally-embedded inequalities of wealth of the Piketty variety. They also suffer from a basic fallacy of composition. In unregulated markets, action that is rational for the individual firm is not necessarily rational for the economic system as a whole. That is why there is an environmental case for market regulation. Unless markets are regulated, there is no incentive for firms to factor in the costs of pollution. That is also why there is a Keynesian argument for market regulation. Cutting wages for competitive advantage works for individual firms, but if all firms cut wages simultaneously they open a race to the bottom that leaves each of them short of consumers with money to spend. That is also why there is a labor market argument for market regulation. Successful firms growing larger gain market power not only over their competitors but also over their employees. Unless trade unions can establish minimum standards of wages and conditions, there is nothing in unregulated markets that blocks off sweat-shop routes to immediate profitability. And that is why there is always a democratic argument for market regulation. Because unregulated markets produce losers as well as winners, they eventually settle at points of economic optimality which are not automatically socially optimal. Their minimum standards and ours are not automatically the same.

The moral limits to markets Moreover, it is simply not the case that everything produced and consumed in modern economies can safely be left for allocation to unregulated market forces. There are moral limits to markets that everyone recognizes, limits that have to be imposed from outside, since ultimately the only morality an unregulated market recognizes is that of the jungle. Morality in unregulated markets lies with the victor in the perennial competitive struggle between demand and supply. Yet there are things which any civilized person recognizes are not suitable for allocation in that manner. In modern America, it isn't legal to sell people any more. We don't allow small children to work when they should be at school. We don't think people should be allowed to starve simply because disabilities of age, illness or infirmity exclude them from labor markets. And in modern America, most of us don't think that every good or service available to us should be freely sold. Instead, we implicitly agree that a list of exceptions to market mechanisms is required while we explicitly disagree - often intensely -- about what that list ought to contain. For some, at the top of that list ought to be abortions. For others, it ought to be drugs. For many more, it ought to be health care itself. But clearly, for all the sharp disagreement on detail, all of us recognize that some limits to unregulated market processes are required. So the one thing that is illegitimate in the political conversation between us is the anger that many libertarians project back at progressives for having the audacity to propose market limits at all. It is not that progressives are out to destroy America -- or God forbid, Europeanize America -- by proposing that certain market outcomes need to be amended by public policy. It is simply that different ways of understanding how modern economies work produce different sets of policy proposals for their greater success.

With inequality at the levels they currently occupy in contemporary America, unregulated markets lock most individuals onto self-fulfilling trajectories of wealth or poverty. A particularly fortunate or gifted individual might break away from the poverty into which he/she was born, but for the mass and generality of us, the reality is that we have to strive endlessly just to stand still. As Thomas Piketty's colleague Emmanuel Saez has recently demonstrated, since 2008, the richest 1 percent have taken a remarkable 95 percent of the new income and wealth generated by the collective efforts of us all, in the process locking the economy onto a low growth trajectory that over time excludes more and more of us from the core claim of the American Dream. What is that core claim: namely that through hard work, Americans can achieve a higher living standard as adults than they enjoyed as children. It is time to un-wrap the flag placed around unregulated markets by their libertarian and conservative advocates, and to wrap it instead around a progressive program of managed markets. It is time to advocate again a genuinely American New Deal that uses tax policy to break cycles of poverty and deprivation, and public spending to trigger the return of strong middle class jobs anchored in prosperous American-based businesses.

These arguments are developed more fully in David Coates, Making the Progressive Case: Towards a Stronger U.S. Economy. New York: Continuum Books, 2011

First posted at www.davidcoates.net]]>
Dozing Through 'The Great Moving Right Show' tag:www.huffingtonpost.com,2014:/theblog//3.5145640 2014-04-14T08:37:15-04:00 2014-06-14T05:59:02-04:00 David Coates http://www.huffingtonpost.com/david-coates/ great moving right show.

Those of us of a progressive predisposition are drifting towards a political defeat of historic proportions -- one underpinned by an economic and social settlement of a highly conservative kind -- and we are doing so with what would appear to be only the slightest sense of alarm. If that is true, we do now need to wake up, and do everything we can to stop the drift.


The political drift is understandable. The idealism briefly mobilized by the Obama candidacy in 2008 against the backdrop of an unpopular war and an unprecedented recession has long gone, washed away by the moderation of Obama the president and by the steady post-recession pressure on the job security and living standards of Democratic voters. Any generalized faith among particularly young Obama supporters that the levers of power in Washington could be deployed for progressive ends by our first African-American President has been rendered mute by the gridlock of divided government and by the intransigence of Republican opposition to each and every one of his policies, no matter how moderate those policies turned out to be. And the resulting White House horse-trading of big gains for minor ones has taken the gloss off a presidency that once promised so much, by restricting the capacity of even as gifted a politician as Barack Obama to use the presidential bully pulpit to articulate a convincing alternative progressive vision.

It is conservatives who are enthusiastic for politics now, not progressives -- that is how much has changed since 2008 -- and that conservative enthusiasm constitutes a real and present danger not just to the Affordable Care Act but also to what still remains of the legacy of both the New Deal and the Great Society. The fate of minimum labor rights, of Social Security, of Medicare and Medicaid -- all that also hangs in the balance as America goes into its next electoral cycle. So this is no time for understatement. Right now the democratic left in America is being seriously outplayed. Progressives are losing both the public argument and public support. We have to understand why, and we have to do something about it.

Why are we losing support? We are losing public support in part because there is currently so much money flowing against us, as the Supreme Court repeatedly opens the sprocket through which the funds of conservative billionaires so easily flow. We are losing public support in part because the Republicans, sitting in power in the House, are able to block one progressive initiative after another, so generating an impotence in Washington which further alienates people from government, reinforcing the very antipathy to public policy on which conservative Republicanism feeds. And we are losing public support in part because what progressive leadership there still is in Washington is either preoccupied by the wider responsibilities of office or rendered invisible by the mainstream media's almost total focus on the daily pantomime of Congressional deadlock. Mix into that lethal political cocktail the additional fact that so many of the senators now struggling for re-election are themselves on the conservative wing of the Democratic coalition, and it becomes even clearer why the November elections could be a progressive wipe-out. It could be a complete wipe-out to the degree that one uninspiring Democratic office-holder after another is rejected in favor of an even more conservative Republican opponent by a mid-term electorate seriously reduced in size by the unwillingness of so many Democratic supporters to vote at all.

We cannot let that debacle happen without trying to prevent it; which is why the fight-back has to start now. Starting in November will be far too late. The current Republican onslaught of ideas and money has to be challenged throughout the summer and the fall -- challenged with ideas and money of our own. Progressive ideas need to be widely reasserted, the better to encourage the flow of Democratic money and activism. The American electorate needs to hear again, in every corner of the public debate, progressive arguments that undercut core Republican claims and progressive ideas that project a clear and superior alternative social and economic compact. Potential American voters need to hear again arguments and ideas, that is, which collectively constitute an equivalent great moving left show.


Good shows need a good script. This one could use at least the following.

Markets, left to themselves, work well when everyone within them has equal purchasing power. But when that basic equality of consumer power is missing, unregulated markets simply privilege the rich and intensify the inequality that corrodes their inner working. If Republicans genuinely want markets to work well, they should join us in creating a level playing field for all the participants.

In any case, even when markets do work well, not all of them are the same and not all services are properly bought and sold. Labour markets (markets in which people sell their skills) are not the same kind of markets as those for the commodities people then make; and because they are not, they require different kinds of regulation. Some services (not least the provision of decent health care) are not best distributed by price. You shouldn't buy and sell things that are more properly available to everyone by right.

The current Republican Party resistance to effective federal regulation runs counter to the fundamental truth that, for long-term democratic health, public policy should always take precedence over private monopoly. Public goods are vital to the public good. Even Adam Smith recognized that such public goods required their public provision; and what was good for Adam Smith ought to be good for those who follow him.

Trickle-down economics simply does not work; and because it does not, the most effective route back to full employment and rising living standards -- given our contemporary economic conditions -- is not through a growth strategy that further empowers the rich. It is through a growth strategy based on greater income and wealth equality. Greater equality is currently an economic as well as a moral imperative.

Equal pay for equal work, as part of a sustained assault on the gender gap, is more than a morally desirable objective -- though it is certainly that. It is also a key element in a vitally needed resetting of the balance between work and life in contemporary America, and as such is by far the most effective way currently available to us to immediately strengthen the American family. You don't strengthen families by underpaying women.

Nor do you strengthen American employment by exporting jobs overseas. A strong American middle class requires a strong American manufacturing sector. Low-paid service employment simply will not cut it. Nation-building at home needs to precede nation-building abroad; and

Climate-change denial is a conservative luxury that we can no longer afford. No adequate economic strategy can or should ignore the appalling environmental consequences of excessive business de-regulation. The route to long-term and secure growth has to be a green route, and it is a route whose time has come.


Each of these central progressive assertions needs to be developed and justified by detailed arguments relevant to them alone. In the months to come, my contribution to creating and sustaining a great moving left show will be focused on that task. I hope that others will contribute too, adding to the list of progressive assertions and developing the arguments to sustain each. Conservative and libertarian voices have been allowed to frame public discourse in Obama's America for too long. The few progressive public intellectuals on which we now regularly rely -- the Paul Krugman's, E.J. Dionne's and Harold Meyerson's of this world -- have carried the burden alone for too long. It is time for the entirety of the Democratic Left to stir itself, and to be heard again.


These arguments are more fully developed in David Coates, Answering back: Liberal Responses to Conservative Arguments. New York: Continuum Books, 2010.

First posted with full academic citations at www.davidcoates.net]]>
The Poverty of Policy on Poverty tag:www.huffingtonpost.com,2014:/theblog//3.4956316 2014-03-13T10:39:27-04:00 2014-05-13T05:59:01-04:00 David Coates http://www.huffingtonpost.com/david-coates/ alleviated, you could legitimately expect that the proposals that each brought to the table might significantly erode the poverty under review. Sadly, however, neither set of proposals do.


The first were those contained in the House Budget Committee Report, The War on Poverty: 50 Years Later, released by the Committee's chairman, Paul Ryan, on March 3. The report presents itself as a calm stocktaking of the effectiveness of particular federal welfare programs based on the latest official data and academic research. It purports to be even-handed -- not partisan -- both in its understanding of poverty and in its evaluation of individual programs. It recognizes that "there are many reasons why poverty persists to such a wide extent today" and that "not every program is counterproductive or unnecessary; indeed some are very important." But the overall message of the report is still exactly what you would expect from a House Committee dominated by Republicans: that "federal programs are not only failing to address the problem. They are also in some significant respects making it worse." According to the report, federal programs make poverty worse primarily by acting as a disincentive to labor-market entry, trapping people behind effective tax rates that can reach nearly 100 percent as people replace welfare benefits with low-paid earned income. As the text puts it, "there are so many anti-poverty programs -- and there is so little co-ordination between them -- that they often work at cross purposes and penalize families for getting ahead."

However, the report is not quite as serious or scholarly as Paul Ryan would like us to believe. Much of it looks like simple cover for any future House budget prioritizing -- as earlier budgets have done -- substantial cuts to federal programs behind the softening rhetoric of "welfare reform." It is true that the report concedes the effectiveness of some programs -- Earned Income Tax Credits being the most significant, among at least 16 programs in total -- but it still directs its particular ire at two (Food Stamps and Medicaid) that were heavily targeted in previous Republican-designed budgets and will no doubt be similarly targeted in Republican budgets to come. The problem with the report in general is that its claim for serious scholarship was rapidly challenged by some of the experts cited, unhappy at the interpretation placed there on their work. And the problem with that particular targeting of SNAP and Medicaid is that those two have been among the most effective of welfare programs to date -- food stamps alone reducing the poverty rate by nearly 8 percent in 2009 according to figures recently released by the Department of Agriculture, and Medicaid providing access to basic healthcare for millions of poor Americans otherwise unable to afford it. Contrary to the thrust of the Ryan Report, "without government programs such as food stamps and unemployment benefits, the poverty rate would grow from 16 percent to 28.7 percent, causing the ranks of the poor to swell from 50 million to 90 million people." How could it be otherwise when the incomes of one American in three fell below the poverty level for their size of family for at least two months between 2009 and 2011, and when programs like SNAP currently reach 47 million Americans, 91 percent of whom are on incomes below the poverty line. Decrying the importance of such federal aid takes some doing when half of all American children receive food stamps at some point in their lives. Sadly, the main ideas canvassed in Paul Ryan's War on Poverty are, as The New York Times rightly put it, both "small and tired," foreshadowing not an end to poverty but rather yet another period of public parsimony to those most in need of support. And if you doubt that, just remember what Paul Ryan subsequently told CEPAC -- criticizing federally-funded school lunch programs for offering children "a full belly and an empty soul."

Even the claims about poverty traps in the House Budget Committee Report are heavily overdrawn. All welfare systems contain poverty traps. That is widely known: but welfare provision in the United States is so modest -- you try living on $133 a month (the average figure for food stamp payouts nation-wide) -- that the notion that such generosity prevents most welfare recipients from actively seeking work is clearly nonsense. So too is the underlying implication that a significant number of those trapped in poverty in the contemporary United States are trapped there voluntarily -- poor pure and simply because they are not actively seeking work. But with nearly three unemployed Americans for every job now available, voluntary unemployment is not our major poverty problem right now. Our major problem is the large number of Americans trapped in or on the edge of poverty because of their inability to find work, or to find work that pays enough to lift them and their families into affluence: which is why the House Budget Committee would do better to redirect energies towards the evaluation of policies that reduce involuntary unemployment. Unfortunately doing that would, of course, commit House Republicans to a serious engagement with federal programs designed to stimulate the economy -- programs to which they are opposed in principle and against which the Tea Party wing of the Republican Party has entirely set its face.


The president's budget, released on March 4, is significantly better in these regards, in that it proposes raising the minimum wage to $10.10 an hour, extending access to Earned Income Tax Credits for 13.5 million low-income childless workers and young workers, and making long-term unemployment insurance immediately available to the 1.7 million Americans now in need of it. If ever implemented, this particular iteration of an Obama budget will increase federal funding to states and localities that provide training and employment services, and direct extra funding to Community Colleges that partner with local employers to create new training programs and apprenticeships. These moves are advocated this time -- they have been advocated many times before -- as part of what this budget calls an "Opportunity, Growth and Security Initiative" which, on the non-defense side, proposes investments in six areas: education, research & innovation, infrastructure and jobs, labor market support, public health & safety, and efficient government. The money involved in each area is modest, but the package as a whole, some $56 billion -- split evenly between defense and non-defense spending -- is offered by the Administration as a serious spur to both immediate economic recovery and long-term economic growth. And as a budget, it comes at the end of a series of Presidential calls for action -- calls made in both the last State of the Union Address and in an important policy speech in Washington in December -- urging policy-makers to address and reduce levels of income and wealth inequality in the United States that, in the President's view at least, now threaten America's social fabric.

Unlike the Ryan proposals, these are at least moves in the right direction. But they remain flawed in at least three fundamental respects. One is the sheer modesty of the policy aspirations, when set against the scale of the poverty problem. A second is their co-existence with other policies -- not least the Administration's active pursuit of free trade deals in a Trans-Pacific Partnership -- that are likely to further speed the outsourcing of well-paid American jobs; and the third is simply the sheer political inability of even a well-intentioned Administration to squeeze any of its key proposals through a House of Representatives whose majority is determined that no Obama-designed proposals will pass. This latter weakness is hardly of the Administration's direct making, but the other two definitely are. A minimum wage of $10.10 an hour will still leave trapped in poverty a family of four dependent on that income alone -- this in a country in which since 1979, as the president himself said, "our economy has more than doubled in size, but most of that growth has flowed to a fortunate few." A $56 billion stimulus package will still leave millions unemployed throughout the remaining Obama term in office; and proposals as modest as these fall way short of those advocated by more serious voices on the Democratic Left -- just canvass any/all of the policy packages currently available from the Center for American Progress, the Center for Economic & Policy Research, or the Economic Policy Institute.

For as those think-tanks realize, it just isn't enough to offer small-scale industrial policy changes when the scale of long-term unemployment remains as high, and indeed as entrenched, as it now is. The job numbers in the United States are currently terrible. As this is drafted, "more than one in six men between 25 and 54 is without a job;" 70 percent of those who had entirely dropped out of the labor market are under 55; and "four and a half years since recovery began," there are "still no jobs for more than 60 percent of job seekers." Indeed, one unemployed worker in every three has currently been unemployed for more than 27 weeks; and those unemployed workers - nearly 40 percent of the total unemployed -- are currently living without wages in households that also contain 2.3 million children. Nor is policy-moderation appropriate on either the minimum wage or the taxation of high earners when we stand, as we now do, at the end of a decade in which wages have stagnated, the real value of the minimum wage has eroded, and the degree of income and wealth inequality has returned to 1920s levels. "Currently, half of American employees earn less than $26,000 annually"; and because they do, poverty in the United States is no longer a monopoly of those dependent on inadequate welfare payments or a limited state pension. One-third of those now officially poor in the United States are poor even though they work full-time; and they are joined in their poverty by the nearly two million adult workers who were employed but are now the victims of long-term entrenched unemployment. Well might Robert Kuttner criticize those who labeled the 2014 budget proposals as populist and radical. They were neither: indeed as recently as "a decade ago, [they] would have been regarded as center-right." Food-stamp protection, a modest stimulus program, and a push for a $10.10 minimum wage can only scratch the surface. If we want truly to eradicate poverty, we have to do so much more.


The short-fall in policy proposals is not accidental. It is the product of deep flaws in policy design, themselves reflective of serious misunderstandings about (or mis-specifications of) the causes of poverty and its cures.

Those design flaws and misunderstandings are at their greatest on the Republican side. To a significant degree, many Republican lawmakers seem entirely indifferent to the plight of the American poor. Nicholas Kristof has recently written of a serious compassion gap in contemporary America -- a gap touching both left and right, and holding majority sway among Republicans. He is right: and when Republicans in particular do address the plight of the poor, far too often they are content to place the blame for poverty on those actually trapped inside it. Regardless of the regularity with which they are repeated, many of the stereotypes common in Republican poverty-discourse are quite simply false. The scale of welfare fraud is over-stated: no one is living the life of Riley on welfare handouts alone. Drug use among welfare recipients is only marginally higher than in the population as a whole. Long-term unemployment insurance does not stop people looking for work. The vast majority of the American poor are not shiftless and idle: they are either involuntarily unemployed or hardworking but underpaid. Low-wage workers are not less educated than in the past. They are more educated. And it simply is not the case that you exhaust the causes of poverty by pointing to family breakdown, the incidence of under-aged pregnancy, and the lack of high-school diplomas by members of the American poor. Factors like that help to explain who is poor, but they do not explain why the poverty-slots exist into which those people then fall. For low wages to cause anyone to be poor, there have to be low wages. For single-parents to fall out of the labor market because of the impossibility of combining the role of worker with that of parent, there has to be a shortage of affordable childcare. For unemployment to rob people of the ability to survive without public assistance, there has to be an economy running at less than full employment; and for welfare payments to keep people poor, those welfare payments have to be disproportionately low. People make their own history, but they do not do so in conditions of their own choosing.

Republican anti-poverty policy places great weight on personal responsibility. It is the job of the American poor, so we and they are regularly told, to get themselves out of poverty. Now personal responsibility is the necessary last moment. We can all agree on that. But if the Republican audience genuinely wants the American social play to have the happy ending they desire, they will have to do something too about the inequalities and inadequacies that currently characterize the stage-set on which it is being performed. If they do not work on the positions that create poverty, and focus instead only on the individuals currently occupying them, all that can happen is that some of those individuals will escape to affluence, but the positions of the poor will still be there, to be filled by the next generation of the under-resourced. "People will rotate in and out of poverty, but poverty itself will remain." Republican anti-poverty policy, that is, focuses exclusively on agents rather than on structures. A full anti-poverty policy has to focus on both. And an anti-poverty policy that focuses on agents while reinforcing the structures creating poverty is to be doubly damned: and how else are we to judge Republican enthusiasm for cutting welfare while simultaneously defending corporate welfare and the light taxation of the rich.

Even the Democrats fall short of an adequate anti-poverty policy when they treat poverty as just another policy area to be tackled alongside the rest, and when they too focus on helping people to escape from poverty while leaving structures of wealth and income inequality intact. Helping people get up the income ladder is better than telling them, Republican-style, to simply climb harder on their own; but such help is not enough if the rest of the policy agenda fails to raise the whole ladder, or even elongates its lower rungs by trade policies that export good jobs abroad. Poverty of the scale we have now is neither accidental nor superficial. Poverty on the scale we have now is a core consequence of the economic growth strategy first put in place during the Reagan Administration and subsequently sustained by both Clinton and Bush II: a strategy based on the deregulation of business and finance, the celebration of trickle-down economics, the tax-supported outsourcing of well-paid manufacturing jobs, and the tolerance of 1920s-scale inequalities in income and wealth inequality. An effective attack on existing levels of poverty has therefore to do so much more than merely raise the minimum wage, protect food stamp provision, increase earned income tax credits and give federal support to low-paid workers seeking healthcare coverage -- though it obviously has to do all those things in very short order. It has also to entirely reset US industrial and trade policy over the longer-term, the better to reconstitute a strong US-based manufacturing sector, to replace a wage race to the bottom with one to the top, and to make full-employment the central goal of fiscal and monetary policy at both the federal and state level.

The poor don't always have to be with us. They are with us only because of choices -- not choices made by them, but choices made by the rest of us. It is time to change the choices.

First posted, with full academic citations, at www.davidcoates.net]]>
The Long-Term State of the Union - Counting the Cost of Empire? tag:www.huffingtonpost.com,2014:/theblog//3.4798647 2014-02-16T15:45:18-05:00 2014-04-18T05:59:01-04:00 David Coates http://www.huffingtonpost.com/david-coates/







The sets of questions are these.




For progressives at least, maybe a fourth set.





Posted with full citations at www.davidcoates.net

This argument is developed more fully in David Coates, America in the Shadow of Empires, (forthcoming 2014), relevant extracts from which are at www.davidcoates.net]]>
The State of the Union Address -- Taking the Longer View tag:www.huffingtonpost.com,2014:/theblog//3.4694659 2014-01-30T09:24:19-05:00 2014-04-01T05:59:01-04:00 David Coates http://www.huffingtonpost.com/david-coates/
That, in truth, is most of what we heard from President Obama on Tuesday evening. Fine rhetoric well delivered, mildly progressive goals modestly pursued, and a strong statement of the continuing importance of American exceptionalism and American power. Chris Matthews on MSNBC particularly liked the latter: a Democratic president, rather than a Republican one, for once wrapping his policies in the flag.

But just because a president cannot do a full and honest stock-taking of our overall condition, that doesn't mean that we shouldn't. When currently 63 percent of us think the country is going in the wrong direction, polling numbers of that scale rather suggest that an honest and full stock-taking is long overdue. We won't all agree on what is going wrong, but at least there could be gain for all of us in stepping back from the detail of immediate policy disagreements in order to reflect upon a set of longer term issues.

The president touched briefly in his State of the Union address on four of these issues, each of which is now worth a more considered second look.

• On Afghanistan he said, "We will complete our mission there by the end of this year, and America's longest war will finally be over." But will it? As he also made clear on Tuesday night, there is no Pentagon plan to fully pull Americans out of Afghanistan, or to cease a drone war on Islamic militants that, as the president implied, likely creates more militants than it kills. Our federal deficits run high in large part because of the scale of our military expenditures. We currently spend more on defense than the next 17 nations combined (many of whom are actually our allies) and are responsible for over 40 percent of global military spending. Moreover, we are currently active in clandestine operations in 134 countries. No wonder there is so much global pushback against our power. Imagine how we would respond if Chinese drones flew over California, or if Russian secret service personnel intervened in our domestic politics with the regularity with which our clandestine forces interfere in the domestic politics of others. This Administration, like every other since FDR, remains committed to a global policing role for the United States. The price of that policing role, in both human and financial terms, is a vast one -- the human cost was showcased in the most dramatic way at the end of the SOTU address. Yet although we spend and suffer so much, and put our military power down in so many places, our security remains in peril. One vital debate, therefore, that we need to have as a nation is whether, after seven decades of such an undertaking, it is now time not simply to bring home the troops but also to bring home the mission.

• The president dedicated much of Tuesday's address to the question of job creation, calling on Congress to "lower tax rates for businesses that create jobs right here at home," and announcing new initiatives "to make sure that every American has the skills to fill those jobs." All this is both reasonable and necessary, but there is so much more that also needs to be said and done. The conditions underpinning the job-creation record of the 1990s have entirely gone. There can be no more economic security in a growth model based on inflated stock prices, stagnant wages and rising levels of personal debt. There can be no secure long-term prosperity for all Americans if we continue to tolerate an economy divided between over-mighty finance, outsourced manufacturing employment and the proliferation of low-paid service jobs. Rebalancing our economy, rebuilding a strong manufacturing base, and creating solid middle-class wages again will not come from yet more free trade agreements with low-wage competitors or from simply tinkering with tax incentives on companies diversifying overseas. It will only come -- if it will come at all -- from an administration willing and able to develop an industrial policy based on systematic public investment in vital infrastructure, powerful incentives to relocate industries back to the United States, and strong labor laws to ensure that the jobs created by this relocation are genuinely high-paying ones. We need not just more jobs. We need an entirely new growth strategy to get them; and it is on the nature of that growth strategy that public debate now needs to be refocused.

• On inequality, the president rightly talked on Tuesday night about the need for "equal pay for equal work" and for an increase in the minimum wage. "Give America a raise," he told Congress, and at the same time reform the all-important Earned Income Tax Credit to do more "for single workers who don't have kids." He linked his concern with inequality to the need for new ways to save for old age and to the importance of health care reform. But again there is just so much more to say and to do about the inequality that is now draining the content out of the reality of our union. For more than three decades, politicians and commentators have made a fetish of trickle-down economics and the indulgence of the rich. That fetish has consolidated both an entitlement culture at the top of this society of a kind last seen in the pre-Depression 1920s, and a tolerance of levels of income and wealth inequality that make a mockery of any notion that all Americans "are created equal and are endowed by their makers with inalienable rights." There are, fortunately, strong voices within the Democratic Party -- Elizabeth Warren, for one -- reminding us that wealth creation is a collective activity; and there are economists -- Paul Krugman, among others -- reminding us that the major barrier to job creation now is not excessive taxation of the rich but inadequate purchasing power among the middle class and the poor. Executive action on the minimum wage is therefore a modest step in the right direction, but we as a nation need more. We need to hear again arguments from the left that are as strident and self-confident as those now coming from the tea party right -- an insistence that the union between us is being so eroded by the greed of the rich that for everyone's long-term sake we need an immediate effective attack on poverty and low wages.

• On American exceptionalism, the president said this: "No other country does what we do. On every issue, the world turns to us, not simply because of the size of our economy or our military might but because of the ideals we stand for and the burdens we bear to advance them." Really? Is that true: no other country, on every issue, the entire world? In many ways, this is the most important conversation that we as Americans need to have with each other. There was a time when America was exceptional in the way the president presented it Tuesday night -- a beacon of light to those seeking freedom in every other country -- though even then, it was an exceptionalism that was built partly on slavery and the eradication of native peoples. But America was indeed once "the first new nation," and immigrants did then come because this country was a land of economic opportunity and political freedom for them and for their children. They came fleeing from a world that generally lacked both economic opportunity and civil rights. But that world has gone. There are now many fully-functioning democracies in the advanced industrial world, and many of those democracies give their citizens an extensive set of democratic and social rights that we simply do not. They don't battle with voter suppression. They don't leave a seventh of their populations without healthcare. They don't let private money buy political influence on the scale now allowed here by Citizens United. They have higher rates of social mobility than we do. To make our union genuinely strong again, we would do well to trumpet our exceptionalism less and to reflect on the exceptionalism of others more -- opening our minds again, as our founding fathers did, to lessons gleaned from the best of the rest abroad. We would do well to start telling ourselves, at moments like the State of the Union, that we need to recreate the exceptionalism of which we are so proud -- because right now that exceptionalism is more tarnished than presidents making SOTU addresses seem able to admit.

The political gridlock in Washington currently constrains us all. It certainly constrains the president, and helps explain the modesty of both the vision and the policy on show in Tuesday's address. That political gridlock will not be broken until the Democratic left debates and agrees a set of progressive solutions to these entrenched and long-standing sources of American economic and social weakness, and then takes those solutions to the American electorate. We need the dialogue. We need the agreement, and we need to build the movement to sustain both. The president has a short-term job to do. The rest of us have a longer-term one to do as well. As we do all that we can to help the president achieve his "year of action" in 2014, we also need to begin thinking and working for a post-Obama politics that is more potently progressive that his, sadly, have managed to be.

New Year Reflections: The Character of the Task Before Us tag:www.huffingtonpost.com,2013:/theblog//3.4519556 2013-12-30T12:23:20-05:00 2014-03-01T05:59:02-05:00 David Coates http://www.huffingtonpost.com/david-coates/
Our Present Condition

Our present condition is not good. Five years on from the worse financial crisis since the start of the Great Depression, the economic consequences of the 2008 credit-crunch are still fully visible in America's labor markets. The official level of unemployment in the United States in November, though falling, remained at 7 percent, and as such is still higher than in any month of the George W. Bush presidency except for its very last one. Unemployment in December 2008 was 7.1 percent. The unemployment rate now remains particularly high among teenagers (20.8 percent) and minority populations (12.5 percent for African-Americans, 8.7 percent for Hispanic Americans), and it remains high too among older workers trapped in long-term unemployment (4.1 million such workers in November 2013) and among laid-off workers trapped in part-time employment (7.7 million). When you drill down further into the unemployment statistics and add in those Americans so discouraged by unemployment that they have stopped even looking for work, the true unemployment rate (the BLS U6 number in the official figures) starts to creep over 14 percent: in an economy where job-seekers still exceed available jobs by a ratio of 2.9:1. The medium household income in the United States has now fallen for five years in a row, and "the typical American family now earns less in real terms than in 1989." Meanwhile, income and wealth inequality has returned to a scale last seen in the 1920s, and the poverty rate remains stuck at 15 percent. Currently, one American in seven has an income at or below the official poverty level -- either because of low wages or a dependence on welfare benefits -- and as many as two Americans in three live within one tranche of the official poverty level for their size of family. In terms of average GDP/head, America may be among the richest nations on earth, but for a significant minority of our fellow-citizens that status has no meaning in the daily reality of their existence.

There is more: Our present economic conditions are not simply dire. They are also qualitatively new. We are at some kind of watershed moment in our economic history. For most adult Americans, that history does not stretch back much passed the presidency of Ronald Reagan. Older Americans might remember the pre-Vietnam War era of full employment and union-negotiated wages that created a prosperous white middle class. They might remember the days of rapidly rising labor productivity produced by a strong U.S.-based manufacturing sector, and of targeted federal spending on a new transport infrastructure. But younger Americans (anyone born since the 1960s) grew up being taught that the retention of that prosperity required limited federal spending and the deregulation of business. They learned to work under laws that weakened trade unions and under tax codes that encouraged income and wealth inequality. Most of them grew up protecting and enhancing their own living standards by working more hours per week than their parents had done, by turning themselves into two-income families as more and more women combined childcare and paid employment, and also more recently by maxing out their credit cards, using rising house prices as collateral. America's present condition is so dire because that debt-based economic growth model -- the post-1980 one initially championed by Ronald Reagan and then followed by both Bill Clinton and George W. Bush -- fell entirely to pieces in 2008. The result is that what all of us now need is not simply a return to economic growth. To return to growth, we also need to find an entirely new basis on which to build rising prosperity again.

If that was not enough, there is also this. We have to find that way back to generalized prosperity in completely new and difficult conditions. The new conditions are those of a fully-integrated global economy in which communism no longer shuts out one-third of the world from competition with us as it did before 1989, and one in which colonialism no longer guarantees favorable terms of trade to northern economies from southern ones as it did in the heyday of empire. The conditions are more difficult because of the weakening of the productivity-drivers which once generated a steady increase in output/hour from American workers: first in the 1950s (via the semi-automated production lines first pioneered by Henry Ford) and then in the 1990s (via the generalized application of information technology to both manufacturing production and the retail economy). Those productivity boosters have run their course, so that we now urgently need to find new ones. But those are hard to come by in an economy in which -- through the outsourcing of many basic manufacturing processes to cheaper labor markets abroad -- so many high-wage/high output jobs in the manufacturing sector have been replaced by low-wage/low output ones in the service sector. The task before us in 2014 is nothing less than to find a route back to generalized prosperity amid the wreckage left in place by the collapse of the Reagan growth model and the rise of the globalized economy.

Ways of Improving That Condition

It is in that context that the recent exchange of views between Ezra Klein, Paul Krugman, Jared Bernstein and others is particularly to be welcomed. They at least are debating calmly and intelligently, without rhetoric or cliché, whether full unemployment or income inequality is the defining problem of the age; and they are exploring what exactly is the nature of the relationship between wage dispersal and job creation. Is inequality a barrier to full employment, as some progressive economists have argued , or is inequality a pre-requisite to full employment -- as conservatives often claim? Will full employment bring income inequality down without any need for anti-poverty initiatives of a direct kind, or is a reduction in income inequality something that progressives should prioritize over the creation of jobs, precisely because it will not happen without that prioritization? These are good questions -- not least because they take us away from our normal preoccupation with the daily tedium of the Washington gridlock, and focus our attention instead on the less visible and more basic underlying processes that shape our daily existence. They are good questions, but they are also limited ones.

They are limited partly by not being framed in watershed terms. The debate now underway about the relationship between full employment and income inequality is vital because progressives have to find -- and find quickly -- a set of economic policies that can credibly refute the sustained attempt by the GOP to take us back to the future. Tea Party-driven conservatives are currently set on "solving our economic problems" by reconstituting the Reagan-era growth model in its purest and most reactionary form. From conservative circles, we now face a coordinated campaign to intensify income inequality, to erode the welfare safety net, to undermine public services and to weaken still further already weak labor unions -- with the entire right-wing initiative legitimated by what should be the completely discredited claims of trickle-down economics. For moral as well as for economic reasons, progressives have to challenge this conservative renaissance by developing a political program that explicitly and proudly combines job creation and inequality reduction, one that insists on greater income equality as the route to full employment. And we have to develop that program now, and in a hurry, in order to restore the reality of the American Dream to those many working families across this nation who are currently struggling on low incomes and facing insecure employment. The GOP will deny it, of course, but in reality their policies will hurt those people. They will hurt the poor, the unemployed and the partially employed, and progressives have therefore to be the defenders and the champions of all three.

Such a progressive program will gain credibility partly through the careful examination of the causal relationships between employment and income disparities of the kind now underway in the Klein-Krugman-Bernstein debate. But it will gain even greater traction if that examination is widened -- to explore alongside it how to increase the rate of growth of labour productivity again, and how to ensure a fair sharing of the benefits of any productivity gains. Full employment itself will be a greater productivity-booster -- no more wastage of the economic output of so many men and women keen to be economically productive -- but that productivity boost will be so much greater if it is also linked to the re-industrialization of the American economy (to the bringing of American jobs home through a commitment to fair rather than to free trade) and to the facilitation of a better work-life balance. The European evidence is overwhelming that married women with children, and their men, all work more effectively if they can combine high levels of effort at work with proper care of their families at home, and striking that key balance between work and life requires a new set of public policies on affordable childcare, flexible working hours, and paid maternity and paternity leave. We can no longer afford to waste the productivity potential of skilled workers of either gender.

The task before progressives in 2014, therefore, is to develop and campaign for policies that simultaneously prioritize job creation, poverty eradication, the strengthening of American manufacturing and the empowerment of the American family. Conservatives will tell us that those four things are mutually incompatible. It is our job to demonstrate that they are not.

This argument is developed more fully in David Coates,
Making the Progressive Case: Towards a Stronger U.S. Economy

First published with full academic citations at www.davidcoates.net]]>
Negative Freedom or Positive Freedom: Time to Choose? tag:www.huffingtonpost.com,2013:/theblog//3.4266736 2013-11-13T10:15:31-05:00 2014-01-23T18:56:26-05:00 David Coates http://www.huffingtonpost.com/david-coates/
That conversation has often turned on the distinction between two kinds of freedom -- negative and positive -- and on the relationship between them. We enjoy negative freedom when we are free from rules blocking our ability to act. We enjoy positive freedom when we possess enough resources to act as we wish. Keeping that distinction in mind makes clear that:

Critics of the Obama administration invariably define freedom narrowly and negatively. They focus on the limits new legislation places on people not to buy healthcare. They stress the constraints the administration wish to place on the kinds of guns and bullets that we are currently free to buy. They create an impression of a society so full of freedoms for each and every American that new government regulations can only take that freedom away. The critical role of government in guaranteeing those freedoms never gets a look in.

In the process, critics invariably exaggerate the threat posed to negative freedom by healthcare reform and by gun control advocates. In the daily reporting of implementation problems, far too often the Affordable Care Act becomes quickly synonymous with total government control of healthcare provision -- even though when fully implemented, the Act will still leave private insurance companies as the key source of healthcare finance for most working Americans. Similarly the NRA is invariably far too quick to treat any constraint on access to particular weapons or ammunition as the precursor to a full-scale attack on Second Amendment Rights -- even though no such attack is contemplated by those proposing modest reforms to existing gun legislation.

In the midst of those disagreements, critics of government regulations invariably downplay the necessary trade-offs between freedoms, and therefore the legitimate need for a conversation about how to protect freedom by limiting excess. Presumably no one in their right mind thinks that children should be able to buy machine guns, or that adults should be free to purchase nuclear weapons. Such unbridled freedom to consume would threaten the freedom of the rest of us to survive. So some limits on the freedom to buy weapons are both vital and necessary. Similarly the freedom to rely simply on the emergency room for healthcare coverage adds to healthcare costs for everyone else, and so erodes the ability of those paying for healthcare to purchase the full coverage they desire. Here again, one person's freedom is another's constraint. Yet such trade-offs rarely surface in most critiques of gun control or healthcare reform. The relentless focus of those critiques is on freedoms lost, not on other freedoms guaranteed or gained.

Critics of the Affordable Care Act regularly ignore the gain to freedom (understood as positive freedom) that comes from the subsidies at the core of the legislation. Those subsidies will enable millions of Americans to gain access to healthcare insurance that they previously lacked the means to purchase. Low-income Americans had the formal freedom to buy healthcare insurance before Obamacare, but that freedom was an empty one. Now it is not. Extending their freedom to buy healthcare also adds to the total size of the insurance pool, so helping to bring down the trajectory of healthcare costs for all of us. Indeed, that trajectory could be lower still if only Republican governors and legislators would, even now, stop throwing up roadblocks to the full implementation of the Act. There are therefore positive gains for freedom to be had from Obamacare-positive gains that need to be recognized and understood.

No matter where each of us stands on the key issues of the day, it is time for all of us to widen the debate on freedom in America. We need to move from a focus on negative freedoms to a focus on positive ones. We need to distinguish sharply between liberty and license. We need to ask ourselves why we prefer to live under rules privately determined by insurance executives we do not appoint than to live under rules publicly decided by the politicians we elect. We need, that is, to begin a more mature conversation than the one we have known of late -- a conversation on how to balance freedoms and responsibilities, and on how to act democratically to maximize the liberties of all.

See also www.davidcoates.net]]>
Placing the Affordable Care Act in the Wider Debate on Healthcare Systems tag:www.huffingtonpost.com,2013:/theblog//3.4070858 2013-10-09T11:41:31-04:00 2014-01-23T18:58:21-05:00 David Coates http://www.huffingtonpost.com/david-coates/ Todd Rokita (R-IN) was not treated as mentally insane by his party's leadership last week for denouncing Obamacare as "one of the most insidious laws ever devised." Nor was Representative William O'Brien (R-NH) dismissed by them as an idiot for likening the Affordable Care Act to the nineteenth century Fugitive Slave Act. It is that hysteria which has currently persuaded Republicans to shut down the government and might yet persuade them to impose on the global economy an American debt-default. That hysteria, therefore, is doing real damage both at home and abroad; which is why it would be a good idea to replace it, wherever possible, with a calm and informed conversation about the real choices we all face when designing and implementing modern healthcare systems.

One way of moving from demagoguery to discourse on the Affordable Care Act might be to consider and discuss the following six points.

Funding Choices No healthcare system is without problems, and those that currently beset the American one are not the product of the Affordable Care Act. The issues that are so contentious here are also contentious abroad. They certainly are in the United Kingdom. More than a decade ago, Tony Blair's Labour government commissioned the Wanless Report, as it pondered how best to reform the National Health Service (NHS), the U.K.'s version of a single-payer system. That report mapped for the Blair government the strengths and weaknesses of the four main ways of funding healthcare then in use in leading economies -- healthcare funding from general taxation, by social insurance, from direct payments by patients, or by private insurance -- and suggested that each of those funding methods had a set of endemic strengths and weaknesses. Systems relying on general taxation were good on overall cost control and at providing universal access to services, but tended to be poor on consumer choice and tight on resources. Social insurance systems had little incentive to restrain health-care costs -- they could always raise rates -- and imposed extra burdens on employers, but were good at getting health care to everyone. Having people buy their own health care certainly constrained costs and maximized choice for those able to pay, but made access by the poor very difficult to guarantee. And systems based on private insurance were fine if your employer provided it and could give you lots of choice, but such a method of running a healthcare system necessarily penalized those without an employer, or with an employer who was unwilling/unable to provide healthcare insurance.

Markets & Healthcare In the event, the Blair Government decided not to fundamentally redesign the U.K.'s single-payer system, remaining convinced that markets for healthcare never work like markets for other privately-consumed commodities. Buying healthcare and buying broccoli are qualitatively different processes because, in accessing healthcare (as Gordon Brown, then Blair's finance minister, put it in response to the Wanless Report) "the consumer is not sovereign: use of healthcare is unpredictable and can never be planned in the way that, for example, weekly food consumption can." In healthcare, Brown argued, market processes are necessarily distorted by "the combination of, on the one hand, chronically imperfect and asymmetric information, and the potentially catastrophic and irreversible outcome of healthcare decisions based on that information and, on the other, the necessity of local clusters of medical and surgical specialisms." Or as he put it more simply: in healthcare "price signals don't always work, the consumer is not sovereign, there is potential abuse of monopoly power, it is hard to write and enforce contracts, it is difficult to let a hospital go bust, [and] we risk supplier induced demand." So the U.K. remained with its much-beloved single-payer system, and is now locked in an equally intense political debate about the use of market mechanisms within the NHS -- market mechanisms the new Coalition Government think will enhance quality and cost control, and which its critics think will produce inequalities in healthcare provision and lead to a two-tier system favoring the rich. That debate will be ongoing in the U.K. and elsewhere precisely because balancing equality of access to healthcare with market ways of generating cost-effectiveness is perennially difficult.

The Complexity of the American System For our purposes however, the intensity of the current U.K. debate -- informative as it is -- is actually less important than the fact that the U.K. has one national system to debate about. There is a small private healthcare sector in the U.K., but over 80 percent of healthcare comes from the NHS itself. And that is true of each major economy except the U.S. Each has one main system (Germany and France each rely on social insurance, Sweden, Canada, and Australia all rely on general taxation); and accordingly each struggles to ameliorate the weaknesses of its predominant method of funding without losing the associated strengths. The key thing that we need to grasp about the U.S. healthcare system is that within it there is a mixture of all four forms of funding; with the entire system in consequence accumulating the weaknesses of each and adding additional weaknesses rooted in the system's own unique complexity. The four systems in place before the arrival of the ACA? General taxation for the VHA and Medicaid; social insurance for Medicare; private insurance for those lucky enough to have employer-provided healthcare coverage; and the direct purchase of insurance/services by those less fortunate. The system is complex and costly: certainly right now we combine the low access characteristic of private systems with the lack of cost-control characteristic of insurance based ones. No wonder therefore that we spend so much more of our GDP on healthcare than do other advanced societies, and yet achieve health outcomes that are comparatively so poor.

Agendas common to all systems Some of the things generating healthcare cost-inflation are uniquely American, but most are not. Among the specifically American cost-drivers are: too heavy a reliance on fee-for-service rather than per-capita payments to doctors, heavy malpractice insurance and excessive defensive medicine; and burdensome debts acquired during medical training. But no matter what system of healthcare funding is in place, common problems of demand and supply trouble each -- problems largely linked to the success of modern medicine. As scientific medicine developed, popular expectations for ever-better health developed alongside it. People live longer now because of improved medical knowledge; and with more consumers and ever-more sophisticated medicines and procedures, costs have risen faster in all healthcare systems than in the economies on which they depend. With modern life styles, new illnesses have proliferated as old ones are cured: less TB and polio now, more obesity and high blood pressure. Healthcare systems across the industrialized world struggle with cost containment in a context of new demands from patients and new drugs from the pharmaceutical industry; and in consequence each national healthcare system has to find a way of rationing provision and establishing priorities. Medical services can only be rationed in certain ways. They can be rationed by need. They can be rationed by price. They can be rationed by timing (the U.K.'s famous waiting lists): but they have to be rationed somehow. There is never enough healthcare to go round, no matter which healthcare system, and which underlying funding model, is in play. And beneath each such model, a basic social contract has continually to be reassessed and sustained: a contract between the healthy and the sick, between the old and the young, between men and women, between rich regions and poorer ones, and between those who look after their own health by sensible living and those who do not.

The ACA as quintessentially American The United States has acquired such a variegated set of healthcare systems because political debate here never generates unanimity about the desirability of any one of the four ways of financing healthcare that the Wanless Report identified. Twice (under Truman and Clinton), Democratic presidents made a serious attempt to introduce universal coverage, but each time the political coalition to implement such a radical change failed to materialize. So instead, here in the United States access to publicly-funded/supported medicine expanded by category of people. It was provided first to veterans immediately after World War II, then to the old and the poor (Medicare and Medicaid in 1965), then to the children of the near poor (SCHIP in 1996), and now to the low-paid without employer-provided healthcare (via the Affordable Care Act). The ACA is simply the latest in a series of incremental changes to an already complicated and confusing healthcare system. Whether it is an ideal addition or not is in dispute; but what should not be in dispute is its place in that prolonged series of incremental reforms by which the United States has moved from a healthcare system in which people bought healthcare only if they could afford it, to one in which access to healthcare is less and less a matter of the patient's immediate personal financial capacity.

The Unavoidable Choices What the ACA does is to move slightly the position occupied by the United States on that basic continuum of healthcare provision that stretches from private provision at one end to a single-payer system at the other. At one end of the continuum, fully-privately funded healthcare systems have access problems linked to income inequality. The U.S. has lots of income inequality. At the other end of the continuum, single-payer systems have problems of cost control due to patient overuse. Critics of the ACA fear that development here. And systems in the middle of that continuum (those distributing healthcare support by category of people, as the ACA does) inevitably have boundary problems, with subsidized healthcare tapering off as people move out of the category. Medicaid has that problem big time -- as people raise their incomes over the poverty level, they lose access to free healthcare. The ACA attempts to ease that boundary problem by phasing out subsidies only as incomes rise well beyond the poverty level: but the boundary problem doesn't go away. It just shifts to employees earning more than four-times-the-poverty-level, and to firms employing more than 50 workers.

So we would do well not to be hysterical about the consequences of the ACA. Those consequences were predictable, once the choice of some middle-way solution was made. Whenever you go for a compromise model in the middle of the basic continuum of healthcare systems, you inevitably ease access while increasing total health costs -- both effects achieved through letting more people in. You also inevitably create new boundary problems on the edge of the categories of the people you help; and you inevitably offend those who advocate either a fully market-based system or a single-payer one, because any "mess in the middle" necessarily fails to garner the full advantages of a single and consistent system. Many of us outside the ranks of the Republican Party would prefer a single-payer system to the ACA's complicated alternative, and will no doubt keep pressing for that. Many of us know that fully market-based systems accentuate access issues, leaving greater numbers of people uninsured; so that we don't want to go back to purely market-based healthcare. Many of us know too that, had the ACA moved further along the continuum (not least by including a public option in the health exchanges), it would have lowered the trajectory of rising healthcare costs more than does an ACA without such an option. Indeed, such an option was in the original design. It was dropped only during (and because of) the negotiations that squeezed the Affordable Care Act through a Congress dominated by conservative Republicans and blue-dog Democrats (especially the latter, in the case of the ACA). It was not faulty system-design that got in the way of the creation of a single-payer system this time round. It was politics.

The choice for liberal critics of the Affordable Care Act is a stark one. One option is for advocates of a single-payer system to join Republicans in repealing the Act, so moving the United States back towards a fully market-based system before trying again to achieve wholesale reform. The other is to support the administration as it implements and beds-in an admittedly flawed Affordable Care Act, and then to campaign for additions to it -- not least by the creation of a public option -- to move us still closer to universal healthcare free at the point of use for all. Speaking personally, it is not a difficult choice to make. Letting the perfect block out the good is too high risk a strategy for me. Better we build on what we have, knowing that the forces pushing for a return to market-based healthcare provision are currently strong enough without the addition of liberal voices.

These issues are more fully discussed in Chapter 6 of David Coates, Answering Back: Liberal Responses to Conservative Arguments. New York: Continuum Books, 2010.

First posted, with full academic citations, at www.davidcoates.net