Category Archives: Economics

A Reminder Where the Real Money Is

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From Philadephia Inquirer columnist Will Bunch’s newsletter (you can sign up here — it’s free):

>> The billions for a more just, less racist America are hiding in plain sight at the Pentagon 

You couldn’t blame the legions of marchers who’ve taken over some of America’s streets this past month in the name of justice for George Floyd for wondering which army they were fighting. Many protests have been met with weapons of warfare — with choking tear gas (actually, the UN doesn’t even allow that in war!), sharpshooters taking out eyes with rubber bullets, or cops tossing grenades that go flash and bang, occasionally with an armored personnel carrier as a scenic backdrop.

To protesters, the massive response by helmeted robocops is proving their point that America spends too much on policing, and it does! $115 billion a year to be exact. But what if the problem with “militarized police” isn’t only the police but the “militarized” part? … a sickness that manifests itself in warrior cops at home but also drone strikes in an endless U.S. “forever war” overseas.

What if the money to pay for all the social programs that our over-policed cities really need — to hire school nurses and buy new textbooks, and recruit a new kind of army of social workers and drug counselors — isn’t only supporting your local police, but hiding in plain sight on the left bank of the Potomac River?

No political leaders from either party ever ask how taxpayers could possibly afford the $1.5 trillion for the Pentagon’s underwhelming F-35 stealth jet, even as your coronavirus nurse works the ICU wearing a Hefty bag. — Will Bunch

Defund the police? Sure. But real leaders defund the Pentagon.

“Our security investments have been in too many of the wrong places,” Matt Duss, the top foreign-policy advisor to former presidential candidate Sen. Bernie Sanders, told me this week, in what could arguably be called an understatement. “We’ve need to have a serious conversation about reducing the defense budget.”

Do we ever! The current Pentagon annual budget of $736 billion is larger than military spending by the next 10 biggest nations combined — and we’re talking about places like China, Russia and India. (For the curious, only China’s military spends more than that $115 billion America spends just on cops.) Yet somehow, no political leaders from either party ever ask how taxpayers could possibly afford the $1.5 trillion (yes, with a “t”) that’s gone down a sinkhole for the Pentagon’s underwhelming F-35 stealth jet, even as your coronavirus nurse works the ICU wearing a Hefty bag.

The weird part of this, though, is the way that congressional Democrats — who once could be counted on to at least pay lip service to curbing the military-industrial complex — have thrown in the towel on defense cuts in the Trump era. When Democrats re-took control of the House in 2019, their $733 billion proposal for the Pentagon was only a tad smaller than President Trump’s bloated plan.

“Members of Congress are very concerned about being cast as ‘weak on defense,‘” Duss told me — a problem that’s become deeply rooted in the so-called “war on terror” era, post 9/11. There’s other issues — America’s politically wired allies in the Middle East and elsewhere pushing for a U.S. military presence, and defense jobs scattered across so many congressional districts.

Despite all these roadblocks, Congress, led by Duss’ boss, Vermont’s Sanders, last year turned heads with an unprecedented vote to end U.S. support for Saudi Arabia’s war in Yemen — thwarted, of course, by a Trump veto. Now, in a George Floyd moment where radical change seems possible, Sanders is pushing an amendment to immediate cut defense spending by 10 percent to funnel more than $70 billion into anti-poverty programs.

Currently the most ambitious dreamer among the defund-the-Pentagon crowd is California Rep. Barbara Lee, the only House member to cast a “no” vote on authorizing the anti-terror war in 2001. Her resolution aims to cut U.S. defense spending roughly in half — some $350 million — which would include canceling Trump’s Space Force (the real one, not the badly reviewed TV show) and getting rid of a majority of America’s global archipelago of military bases. Can’t afford it? With a deep economic recession and pressing social needs, can we afford not to?

Taking on the military-industrial complex isn’t a distraction from the demands on the street for racial justice; rather, it cuts to the core of the problem. Whether armed men are firing tear gas into Lafayette Square or Predator drones into weddings in Afghanistan, the amount of money that America spends on suppressing, attacking and killing human beings is obscene. And there’s a new generation, with a new explanation, that’s figuring this out.

Relevant Comments from the Last Century

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Ken Makin of the Christian Science Monitor says that, at times like this, it’s too easy to quote the final words of Martin Luther King’s “I Have A Dream” speech, when King looked forward to the day “all of God’s children … will be able to join hands and sing … Free at last! Thank God almighty, we’re free at last!” Mr. Makin suggests we remember some of Dr. King’s other, more specific words.

From his last book, Where Do We Go From Here: Chaos or Community?:

Ever since the birth of our nation, white America has had a schizophrenic personality on the question of race. She has been torn between selves – a self in which she proudly professed the great principles of democracy and a self in which she sadly practiced the antithesis of democracy. This tragic duality has produced a strange indecisiveness and ambivalence toward the Negro, causing America to take a step backward simultaneously with every step forward on the question of racial justice, to be at once attracted to the Negro and repelled by him, to love and to hate him. There has never been a solid, unified, and determined thrust to make justice a reality for Afro-Americans.

From his final speech, “I’ve Been to the Mountaintop”, delivered in Memphis, Tennessee, the day before he was shot:

Let us keep the issues where they are. The issue is injustice. The issue is the refusal of Memphis to be fair and honest in its dealings with its public servants, who happen to be sanitation workers. Now, we’ve got to keep attention on that. That’s always the problem with a little violence. You know what happened the other day, and the press dealt only with the window-breaking. I read the articles. They very seldom got around to mentioning the fact that one thousand, three hundred sanitation workers were on strike, and that Memphis is not being fair to them, and that Mayor Loeb is in dire need of a doctor [the mayor being one of our “sick white brothers”]. They didn’t get around to that.

And from the “I Have a Dream” speech five years earlier:

It would be fatal for the nation to overlook the urgency of the moment. This sweltering summer of the Negro’s legitimate discontent will not pass until there is an invigorating autumn of freedom and equality. Nineteen sixty-three is not an end, but a beginning. And those who hope that the Negro needed to blow off steam and will now be content will have a rude awakening if the nation returns to business as usual. And there will be neither rest nor tranquility in America until the Negro is granted his citizenship rights. The whirlwinds of revolt will continue to shake the foundations of our nation until the bright day of justice emerges.

One Way To Return To Work and School

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Three professors think there is a good way for people to start going back to work and school. Their suggestion is partly based on how long people who get the virus usually become contagious, which is three days on average.

First, the population would be divided into two groups — like our cars were divided into two groups by odd and even license plates when OPEC made trouble in the 1970s and it was very hard to buy gas.

Grouping could be done using the first letter of everyone’s last name, such as A to L and M to Z. Doing the groups that way would give the members of a family the same schedule (of course, there would have to be flexibility to handle special cases).

Each group would then go to work or school on a schedule of four days on, ten days off. Group A to L would start work on a Monday, work four days, then take off ten days. Group M to Z would go to work or school the following Monday, work four days and then take off.

The result would be that people would be at work or school 40% of the time: four days instead of the usual ten every two-weeks (of course, there would have to be flexibility again, one reason being that somebody has to mind the store or the police station on Fridays and weekends).

Working or being educated would still be possible during our ten days “off” at home. The totally unemployed would be working part-time. The point is that we’d be taking a step toward a more normal existence for most people.

When I read the professors’ article, I wondered why they chose a four-day schedule if people are usually contagious after three days. Aside from how four days fits nicely into the fourteen days of two weeks, they believe that getting sick would be unlikely even if people were in close contact and someone became contagious at the beginning of the four days. They did some math:

Models we created at the Weizmann Institute in Israel predict that this two-week cycle can reduce the virus’s reproduction number — the average number of people infected by each infected person — below one. So a 10-4 cycle could suppress the epidemic while allowing sustainable economic activity.

More from the article:

Even if someone is infected, and without symptoms, he or she would be in contact with people outside their household for only four days every two weeks, not 10 days, as with a normal schedule. This strategy packs another punch: It reduces the density of people at work and school, thus curtailing the transmission of the virus.

The cyclic strategy is easy to explain and to enforce. It is equitable in terms of who gets to go back to work. It applies at any scale: a school, a firm, a town, a state. A region that uses the cyclic strategy is protected: Infections coming from the outside cannot spread widely if the reproduction number is less than one. It is also compatible with all other countermeasures being developed.

Workers can, and should still, use masks and distancing while at work. This proposal is not predicated, however, on large-scale testing, which is not yet available everywhere in the United States and may never be available in large parts of the world. It can be started as soon as a steady decline of cases indicates that lockdown has been effective.

The cyclic strategy should be part of a comprehensive exit strategy, including self-quarantine by those with symptoms, contact tracing and isolation, and protection of risk groups. The cyclic strategy can be tested in limited regions for specific trial periods, even a month. If infections rates grow, it can be adjusted to fewer work days. Conversely, if things are going well, additional work days can be added. In certain scenarios, only four or five lockdown days in each two-week cycle could still prevent resurgence.

The coronavirus epidemic is a formidable foe, but it is not unbeatable. By scheduling our activities intelligently, in a way that accounts for the virus’s intrinsic dynamics, we can defeat it more rapidly, and accelerate a full return to work, school and other activities.

Two Charts (Signs of the Times)

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This first one is hard to believe. The rate on the government’s 10-year Treasury bond is around 0.70%. That’s the lowest it’s been for more than 150 years. Whoever buys one of these bonds is basically giving the government an interest-free loan, money the government could use to help people who’ve lost their jobs, small businesses that have lost their customers and local governments that are spending more and collecting less in taxes because of the virus.

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This second chart is easy to believe. It shows confirmed Covid-19 cases per million people. Although the president and his cronies claim that America’s response to the virus has been “spectacular”, compared to a country with a competent national government, South Korea, our response has been spectacularly bad. We’re the red line. South Korea is the blue.

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A Really Big Pile Indeed

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The (Roughly) Daily blog has a visual guide to wealth in America (thanks, Ted). The text, which takes a while to find, includes a few key facts:

We rarely see wealth inequality represented to scale. This is part of the reason Americans consistently under-estimate the relative wealth of the super rich.

Jeff (Bezos) is so wealthy, that it is quite literally unimaginable.

You can use your scroll bar to see why you can’t imagine it. But don’t stop until you get to the wealth of the 400 richest Americans, a sum that’s super-unimaginable.

Remember during the presidential campaign when Senators Warren and Sanders called for a wealth tax and at least one billionaire wept bitter tears?

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It looks like they’re still selling the mugs, although, given current circumstances, nobody knows when they’ll be delivered.

Note: I can’t vouch for the visual guide’s accuracy, but according to other sources, Bezos’s pile is around 1,500,000 times more — that’s 1.5 million times more — than the median net worth of a U.S. household, and 12,600,000 times more than the median for households under 35. That’s a really big pile.