Category Archives: Economics

Bookmarking Our National Transgressions

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Going through old bookmarks, I found Eric Foner’s review of The Half Has Never Been Told: Slavery and the Making of American Capitalism by Edward Baptist. Professor Foner is a leading historian of the 19th century. From the review:

Where Baptist breaks new ground is in his emphasis on the centrality of the interstate trade in slaves to the regional and national economies and his treatment of the role of extreme violence in the workings of the slave system….

The cotton kingdom that arose in the Deep South was incredibly brutal….Violence, Baptist contends, explains the remarkable increase of labor productivity on cotton plantations. Without any technological innovations in cotton picking, output per hand rose dramatically between 1800 and 1860. Some economic historians have attributed this to incentives like money payments for good work and the opportunity to rise to skilled positions. Baptist rejects this explanation.

Planters called their method of labor control the “pushing system.” Each slave was assigned a daily picking quota, which increased steadily over time. Baptist, who feels that historians too often employ circumlocutions that obscure the horrors of slavery, prefers to call it “the ‘whipping-machine’ system.” In fact, the word we should really use, he insists, is “torture.” To make slaves work harder and harder, planters utilized not only incessant beating but forms of discipline familiar in our own time — sexual humiliation, bodily mutilation, even waterboarding. In the cotton kingdom, “white people inflicted torture far more often than in almost any human society that ever existed.” When Abraham Lincoln reminded Americans in his Second Inaugural Address of the 250 years of “blood drawn with the lash” that preceded the Civil War, he was making a similar point: Violence did not begin in the United States with the firing on Fort Sumter.

Foner concludes:

It is hardly a secret that slavery is deeply embedded in our nation’s history. But many Americans still see it as essentially a footnote, an exception to a dominant narrative of the expansion of liberty on this continent. If the various elements of “The Half Has Never Been Told” are not entirely pulled together, its underlying argument is persuasive: Slavery was essential to American development and, indeed, to the violent construction of the capitalist world in which we live.

Reading this review again reminded me of another book review. It was easy to find, although it was published eight years ago. Janet Maslin wrote the review. The book was Douglas Blackmon’s Slavery By Another Name: The Re-Enslavement of Black Americans From the Civil War to World War II. Maslin says it’s a corrective for those who think slavery ended with the Civil War:

[The author] is not simply referring to the virtual bondage of black sharecroppers unable to extricate themselves economically from farming. He describes free men and women forced into industrial servitude, bound by chains, faced with subhuman living conditions and subject to physical torture. That plight was horrific. But until 1951, it was not outside the law.

All it took was anything remotely resembling a crime. Bastardy, gambling, changing employers without permission, false pretense, “selling cotton after sunset”: these were all grounds for arrest in rural Alabama by 1890. And as Mr. Blackmon explains in describing incident after incident, an arrest could mean a steep fine. If the accused could not pay this debt, he or she might be imprisoned.

Alabama was among the Southern states that profitably leased convicts to private businesses. As the book illustrates, arrest rates and the labor needs of local businesses could conveniently be made to dovetail. For the coal, lumber, turpentine, brick, steel and other interests described here, a steady stream of workers amounted to a cheap source of fuel.

It’s hard not to think of contemporary practices that mimic the “pushing system” or the cruel exploitation of prison labor. Today, we read about corporations like Amazon that set ever-increasing production quotas. If you don’t meet your quota, you’re fired. If you do meet your quota, you’re quota goes up. Then there’s the way towns and cities like Ferguson rely on fines for their funding. If you can’t pay your fine or miss your court date, you’re hit with a bigger fine or thrown in jail. And, of course, we now have a huge prison-industrial complex that’s devoted to mass incarceration as a way to lower the unemployment rate while increasing corporate income.

After writing the above, I looked at another bookmark. It was to a New York Times interview with someone who isn’t quoted very often in newspapers like the Times or on television: Noam Chomsky. I’d forgotten that he cites both The Half Has Never Been Told and Slavery By Another Name. His subject is “the roots of American racism”:

There is … a common variant of what has sometimes been called “intentional ignorance” of what it is inconvenient to know: “Yes, bad things happened in the past, but let us put all of that behind us and march on to a glorious future, all sharing equally in the rights and opportunities of citizenry.” The appalling statistics of today’s circumstances of African-American life can be confronted by other bitter residues of a shameful past, laments about black cultural inferiority, or worse, forgetting how our wealth and privilege was created in no small part by the centuries of torture and degradation of which we are the beneficiaries and they remain the victims….

Jefferson, to his credit, at least recognized that the slavery in which he participated was “the most unremitting despotism on the one part, and degrading submissions on the other.” And the Jefferson Memorial in Washington displays his words that “Indeed I tremble for my country when I reflect that God is just: that his justice cannot sleep forever.” Words that should stand in our consciousness alongside of John Quincy Adams’s reflections on the parallel founding crime over centuries, the fate of “that hapless race of native Americans, which we are exterminating with such merciless and perfidious cruelty
among the heinous sins of this nation, for which I believe God will one day bring [it] to judgment.”

The entire interview is here.

The Second Bill of Rights

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If Franklin Roosevelt had lived longer, the United States might have a Second Bill of Rights. We might have had more amendments to the Constitution, or simply a collection of new laws, but in either form we would have established a set of economic rights to go along with the political rights already stated in the Constitution.

This was news to me until recently. Here’s what President Roosevelt said in his State of the Union address on January 11, 1944, as the war continued in Europe and the Pacific:

It is our duty now to begin to lay the plans and determine the strategy for the winning of a lasting peace and the establishment of an American standard of living higher than ever before known. We cannot be content, no matter how high that general standard of living may be, if some fraction of our people—whether it be one-third or one-fifth or one-tenth- is ill-fed, ill-clothed, ill housed, and insecure.

This Republic had its beginning, and grew to its present strength, under the protection of certain inalienable political rights—among them the right of free speech, free press, free worship, trial by jury, freedom from unreasonable searches and seizures. They were our rights to life and liberty.

As our Nation has grown in size and stature, however—as our industrial economy expanded—these political rights proved inadequate to assure us equality in the pursuit of happiness.

We have come to a clear realization of the fact that true individual freedom cannot exist without economic security and independence. “Necessitous men are not free men.” People who are hungry and out of a job are the stuff of which dictatorships are made.

In our day these economic truths have become accepted as self-evident. We have accepted, so to speak, a second Bill of Rights under which a new basis of security and prosperity can be established for all regardless of station, race, or creed.

Among these are:

The right to a useful and remunerative job in the industries or shops or farms or mines of the Nation;

The right to earn enough to provide adequate food and clothing and recreation;

The right of every farmer to raise and sell his products at a return which will give him and his family a decent living;

The right of every businessman, large and small, to trade in an atmosphere of freedom from unfair competition and domination by monopolies at home or abroad;

The right of every family to a decent home;

The right to adequate medical care and the opportunity to achieve and enjoy good health;

The right to adequate protection from the economic fears of old age, sickness, accident, and unemployment;

The right to a good education.

All of these rights spell security. And after this war is won we must be prepared to move forward, in the implementation of these rights, to new goals of human happiness and well-being….

I ask the Congress to explore the means for implementing this economic bill of rights… Many of these problems are already before committees of the Congress in the form of proposed legislation. I shall from time to time communicate with the Congress with respect to these and further proposals. In the event that no adequate program of progress is evolved, I am certain that the Nation will be conscious of the fact.

The President began his fourth term one year later, on January 20, 1945, but he didn’t live past April. President Truman took over and didn’t pursue the idea of an economic Bill of Rights.

There’s more about the speech, including the full text, here. Roosevelt would have delivered the State of the Union to Congress, but he didn’t feel well that night. Instead, he gave the speech over the radio from the White House (Congress received a printed copy). But he also had parts of the speech filmed by newsreel companies so it could be shown in movie theaters. Here’s some of that footage:

Roosevelt said a lot else that night. For example, he criticized what we now call “special interests”, calling attention to the millions of people with “few or no high pressure representatives at the Capitol”:

The overwhelming majority of our people have met the demands of this war with magnificent courage and understanding…. However, while the majority goes on about its great work without complaint, a noisy minority maintains an uproar of demands for special favors for special groups. There are pests who swarm through the lobbies of the Congress and the cocktail bars of Washington, representing these special groups as opposed to the basic interests of the Nation as a whole. They have come to look upon the war primarily as a chance to make profits for themselves at the expense of their neighbors – profits in money or in terms of political or social preferment.

Well, that situation has only gotten worse since 1944.

Roosevelt also warned against right-wing reactionaries trying to turn back the clock:

One of the great American industrialists of our day … recently emphasized the grave dangers of “rightist reaction” in this Nation. All clear-thinking businessmen share his concern. Indeed, if such reaction should develop — if history were to repeat itself and we were to return to the so-called “normalcy” of the 1920’s — then it is certain that even though we shall have conquered our enemies on the battlefields abroad, we shall have yielded to the spirit of Fascism here at home.

Even if Roosevelt wasn’t feeling well that night, I bet he would have had a good laugh if someone had suggested that a certain 32-year old actor, then making Army Air Force training films in California, would one day lead just such a right-wing reaction.

Garry Wills on Who’s Afraid of the Pope

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Garry Wills is one of America’s leading intellectuals. He’s now 80 years old and has had a brilliant career, but he’s still going strong. From the New York Review of Books blog:

Now, as the pope prepares a major encyclical on climate change, to be released this summer, the billionaires are spending a great deal of their money in a direct assault on him. They are calling in their chits, their kept scientists, their rigged conferences, their sycophantic beneficiaries, their bought publicists to discredit words of the pope that have not even been issued: “He would do his flock and the world a disservice by putting his moral authority behind the United Nations’ unscientific agenda on the climate,” they say. They do not know exactly what the pope is going to say in his forthcoming encyclical on preserving God’s creation, but they know what he will not say. He will not deny that the poor suffer from actions that despoil the earth. Everything he has said and done so far shows that Francis always stands for the poor.

Those who profit from what harms the earth have to keep the poor out of sight. They have trouble enough fighting off the scientific, economic, and political arguments against bastioned privilege. Bringing basic morality to the fore could be fatal to them. That is why they are mounting such a public pre-emptive strike against the encyclical before it even appears…..

The real issue here is not science vs. ignorance, or the UN vs. xenophobia, or my 97 percent of experts against your 3 percent. It is a case of the immensely rich few against the many deprived poor. The few are getting much of their wealth from interlocking interests that despoil the earth. The fact that the poor get poorer in this process is easily dismissed, denied, or derided. The poor have no voice. Till now. If the pope were not a plausible voice for the poor, his opponents would not be running so scared. Their fear is a testimony to him.

More here.

A Bit More on the Cost of Health Insurance

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A Vox article cites a report from the Center for American Progress that helps explain why many employees who get health insurance at work don’t like the Affordable Care Act and believe it’s causing the cost of health insurance to go up:

In recent years, the growth in overall health care costs has slowed dramatically. But for millions of Americans with employer-sponsored insurance…, this slowdown is illusory. From 2008 through 2013, the average annual growth rate of employees’ monthly premium contributions and out-of-pocket expenses, adjusted for inflation, was more than double that of average annual growth in real per-capita national health care spending, which was less than 2 percent per year. This growth has also outpaced employers’ costs of offering these benefits by more than 40 percent.

Employees experiencing higher health care costs tend to blame the Affordable Care Act, or ACA, even though the law largely leaves the employer-based system alone….The actual reason why employee and employer costs are increasing at different rates is because employers have, over time, shifted greater responsibility for health care expenses to their employees through higher deductibles, higher copayments, and higher coinsurance—a practice that began long before the passage of the ACA. Other employers pay smaller shares of their employees’ health care premiums….

In other words, almost everyone in the health care system is realizing savings, but employees’ costs are rising.

Or as Vox puts it, in still other words:

Your company’s health insurance costs are going down. But yours are going up.

This is in addition to many companies incorrectly telling their employees that the ACA is to blame for rising costs.

A Month of Unwritten Posts Condensed Into One

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It’s not as if there’s a shortage of reading material on the Internet. Nevertheless, since I haven’t done my part lately:

You might hear of a new Quinnipiac University poll, according to which Fox News is the most trusted network news in America. The poll found that 29% of American voters trust the news on Fox more than any other network. However, the poll also found that 57% of American voters trust either CNN, ABC, CBS, NBC or MSNBC more than Fox. In other words, 29% of us trust the right-wing propaganda “news” delivered by Rupert Murdoch, and twice as many of us trust the other kind, the “mainstream media” news that Rupert doesn’t own. So it’s bad enough, but not as bad as it sounds.

Meanwhile, a Pew Research Center poll found that 53% of Americans disapprove of the Affordable Care Act, even though the ACA has resulted in more people getting health insurance than the Obama administration predicted, while contributing to slower growth in overall healthcare spending. A Bloomberg article helps explain this discrepancy. First, many people think they can do without the comprehensive health insurance the law mandates and resent paying for services they’ll never need (like maternity care) or don’t think they’ll ever need (like rehabilitation). Second, more than half of the big companies in America have told their employees that the ACA is forcing them to pay even more for health insurance.

The Bloomberg article says that the coverage mandates aren’t making health insurance more expensive. The mandates are merely “pooling the cost of that coverage across more people”, which is why fewer people are having trouble paying for healthcare. Furthermore, employers are blaming an ACA provision (the so-called “Cadillac” tax) for immediate cuts in benefits and higher insurance payments, even though it’s unlikely that these employers will ever be subject to that provision.

But does it matter what the facts are? According to a very interesting article by Heather Cox Richardson, Professor of History at Boston College, America’s right-wing doesn’t accept the importance of empirical evidence or rational argument. She traces this amazing attitude back to William F. Buckley Jr.’s 1950s book God and Man at Yale. Richardson says that:

Buckley rejected the principles that had enabled social progress for centuries and laid out a mind-boggling premise: The Enlightenment, the intellectual basis of Western Civilization, was wrong.

Rational argument supported by facts did not lead to sound societal decisions, Buckley claimed; it led people astray. Christianity and an economy based on untrammeled individualism were truths that should not be questioned. Impartial debate based in empirical facts was dangerous because it led people toward secularism and collectivism—both bad by definition, according to Buckley. Instead of engaging in rational argument, Buckley insisted, thinkers must stand firm on what he called a new “value orthodoxy” that indoctrinated people to understand that Christianity and economic individualism were absolute truths.

If we accept the premise that Christianity and economic individualism (the idolatry of the “free market”) are absolute truths, it makes sense to reject any contradictory ideas, however well-founded those ideas are given the empirical evidence.

For example, the governor of Minnesota, Mark Dayton, inherited a $6 billion deficit from his predecessor, a self-styled “fiscal conservative” who wouldn’t raise taxes. Dayton convinced the legislature to raise taxes on the rich and increase the minimum wage. Republicans predicted, as always, that businesses would leave the state and unemployment would rise. What actually happened was that the deficit turned into a surplus, unemployment went down and Minnesota now has one of the best economies of any state. Forbes Magazine (a bastion of capitalism) recently ranked Minnesota as having the 7th best “economic climate” and the 2nd best “quality of life” in the nation.

But if you believe that higher taxes on the rich and a higher minimum wage are absolutely wrong, since they conflict with your “understanding” of morality and economics, it’s understandable that you’ll reject the evidence. Nothing that conflicts with absolute truth can possibly be true.

To end on a positive note, however, consider that Larry Summers, a leading economist and Wall Street-friendly Democrat, is now arguing for a relatively progressive set of policies. According to an encouraging article by Thomas Edsall of the New York Times, Summers has concluded that “free market capitalism, as now structured, is producing major distortions”:

In order to stem the disproportionate share of income flowing to corporate managers and owners of capital, and to address the declining share going to workers, the report calls for tax and regulatory policies to encourage employee ownership, the strengthening of collective bargaining rights, regulations requiring corporations to provide fringe benefits to employees working for subcontractors, a substantial increase in the minimum wage, sharper overtime pay enforcement, and a huge increase in infrastructure appropriations – for roads, bridges, ports, schools – to spur job creation and tighten the labor market…. Summers also calls for significant increases in the progressivity of the United States tax system.

Summers has advised both President Obama and Hillary Clinton on economic matters, so it’s a positive sign that he now advocates more worker-friendly policies.

Finally, with our harsh winter finally winding down, I want to express my sincere appreciation for everyone who has to work outside or travel to their jobs during terrible winter weather. Many such people aren’t able to take a day off or “work at home”, because you can’t drive a snowplow or staff your boss’s restaurant from your living room. I also want to express my profound appreciation for whoever devised the snow shovel with a bent handle. I’ve used one for years and there’s nothing better for shoveling snow while avoiding back pain!

backsaver-shovel2