Why Infrastructure Is More Than Roads and Bridges

Merriam-Webster defines “infrastructure” as “the system of public works of a country, state, or region — also : the resources (such as personnel, buildings, or equipment) required for an activity”.

Jonathan Cohn of Huff Post explains why improving the services that help people prosper counts as infrastructure:

Building roads and bridges is good for the economy, pretty much everybody agrees. But helping senior citizens stay out of nursing homes? Raising pay for child care workers? 

President Joe Biden says those sorts of initiatives can help, too. And he’s got a strong case.

Ever since the 2020 presidential campaign, Biden has talked about having the government spend a lot more on caregiving ― for children, older adults and disabled people. . . [He] pointedly included them as part of his economic agenda, arguing they would create better, higher-paying jobs and unleash untapped potential for growth.

Now Biden is president, and his approach hasn’t changed. On Wednesday, he introduced the first half of what he has called his “Build Back Better” agenda. And although he proposed big new spending on traditional infrastructure projects like bridges and waterways, he also proposed a dramatic increase in federal support for “home- and community- based services.” 

Those are supports and services for elderly and disabled people who need help with daily living to stay out of nursing homes or other types of congregant care settings. In practical terms, that means everything from personal attendants who help seniors with bathing to counselors who help people with intellectual impairments find jobs so they can live on their own.

More proposals are on the way. The second half of the Build Back Better agenda, which Biden plans to introduce later this month, is likely to include major new initiatives to make child care and preschool more widely available, as well as some kind of paid leave program.

And these do not appear to be token gestures. Wednesday’s home care proposals envision $400 billion in new federal spending, accounting for nearly one-quarter of the $2 trillion package Biden unveiled. A meaningful initiative on child care and preschool would likely require hundreds of billions of dollars more.

The primary case for these initiatives is that they make life easier on a day-to-day basis. That’s certainly true for the home- and community-based services Biden proposed on Wednesday to support.

Medicaid, the government health insurance program that states operate using federal funds and under federal guidelines, already pays for nursing homes and other forms of institutional care. And there’s no pre-set limit on that spending. The more people who need the help, the more funding Medicaid provides.

Medicaid also pays for services at home and in the community, but with limited allotments that don’t rise with demand. This disparate treatment is a legacy of the program’s history. When Democrats created Medicaid in 1965, during Lyndon Johnson’s presidency, there was a much bigger push to keep older and disabled people in institutions ― and much less awareness of how many of them wanted to, and could, stay at home.

The lack of open-ended funding forces states to cut off enrollment and put everybody else on waiting lists. Nationwide, about 800,000 people are now on those lists, and some have been for years. It’s a well-known fact that deters many others from even trying. Most experts think the actual unmet demand for home- and community-based services is closer to 1.5 million.

For decades, advocates have proposed putting home-based care on an equal footing with institutional care. That way, the choice between whether to stay at home or to go into a congregant living setting would be about the preferences and needs of individual people and their families ― not because of a financial disparity rooted in a decision lawmakers made half a century ago. . . . 

Biden’s proposal “can help millions of Americans who live with disabilities or chronic illnesses receive needed care at home or on a human scale within their own communities rather than within institutional settings,” Harold Pollack, professor at the University of Chicago and an expert on long-term care, told HuffPost.

Other types of caregiving are just as sorely in need of extra federal support.

Quality child care in the U.S. is notoriously hard to find and financially out of reach for large numbers of working families. The U.S. is the only country in the developed world that does not offer paid leave, which puts a huge strain on workers whenever they have children or older family members battling medical problems ― and sometimes when they have medical problems of their own.

Caregiving has gotten more attention generally in recent years, especially from Democrats. The new twist, from Biden, is to place these proposals alongside traditional infrastructure projects as part of a broader economic agenda.

That’s bound to seem like an awkward fit, at least to some people, because infrastructure spending more commonly consists of front-loaded or one-time expenditures ― money for airport runway expansion or the construction of a pipeline that stops flowing once the projects are done.

But the economic benefits of caregiving initiatives are real. For one thing, caregiving is literally an investment in making individual human beings more productive. This is most obviously the case when it comes to early childhood programs. Research has shown repeatedly that, when infants and toddlers get good care, they are more likely to stay in school, remain employed and stay physically healthier as adults.

That logic applies just as surely to home- and community-based services, especially for disabled people, many of whom can go to school and join the workforce with proper support.

“It has a huge economic development component,” said Nicole Jorwic, senior director of public policy at The Arc, a civil rights organization for people with intellectual disabilities. “You’ve got all these people with disabilities who right now are on waiting lists, and can’t work because of services they need in order to … become part of the economy.” 

Another way government caregiving initiatives can help the economy is by providing the families of children, disabled and older people with more choices about how they spend their time. Many caregivers will choose to work more outside of the home, putting specialized skills to use, because they will be able to know their loved ones are getting the care they need. . . . 

One final way a caregiving agenda can help boost the economy is by improving the pay and working conditions for the professional caregiving workforce, which is another part of Biden’s agenda.

The median hourly wage for home health aides is barely more than $12, for example, which is about what retail workers and parking lot attendants make. For child care providers, the median hourly wage is even lower. Meanwhile, those caring for children and older people do some of the most intimate, difficult jobs imaginable.

“We place a high value on the work that [caregivers] do, and we don’t pay them in a way that’s consistent with that value,” Sen. Bob Casey (D-Penn.) told HuffPost. . . . 

Doing this all at once ― helping more people to pay for caregivers while simultaneously requiring that caregivers get higher pay ― makes the project a lot more expensive. . . .That’s bound to be a hard sell politically . . . , perhaps even among some conservative Democrats . . . . That is undoubtedly one reason why Biden and his allies are talking about these proposals in the context of their potential to create a more dynamic economy. . . .

As Ai-jen Poo, executive director of National Domestic Workers Alliance, put it on Wednesday, “like our physical infrastructure — roads, bridges, green energy — our care infrastructure needs permanent investment to ensure our communities can thrive.”

Congress and the President Do Something Big for a Change

One congressman said he and other longtime Democratic lawmakers feared they’d never do anything consequential in Congress again. But the American Rescue Plan (aka the Covid relief bill) will be extremely consequential. There’s much more in it than $1,400 checks for most Americans and extended benefits for the unemployed.

Paul Waldman of The Washington Post describes some of the bill’s other features, the totality of which make this an historic bill (that, unlike the only major legislation of the past four years, isn’t designed to help corporations or the rich):

If anything, we’ve underplayed how significant this bill is.

Yes, those subsidy checks are important . . . A family of four with a household income under $150,000 will get $5,600, even before other measures, such as the boosted child tax credit, are accounted for. That . . . will provide a tremendous boost of economic activity that will accelerate the recovery; the American economy is now projected to grow this year at a pace we haven’t seen in decades.

But . . . the bill is full of provisions that could have significant or even transformative effects on the country, many of which have gotten little or no attention:

The child tax credit. For the next year, the bill increases the child tax credit and makes more of it “refundable,” which means that more people with very low incomes will be able to get that credit as a refund even if they’re paying little or nothing in taxes. It will also send the child tax credit to families on a monthly basis, rather than having it as something they might or might not get as a lump sum after filing their taxes. . . . 

The Earned Income Tax Credit. The bill expands the EITC for childless low-income workers; 17 million of them could see a boost in their after-tax income.

Pensions. The bill includes a provision championed by Sen. Sherrod Brown (D-Ohio) that bails out a group of 185 multi-employer union pension plans that are in danger of failing. As the New York Times put it, “without the rescue, more than a million retired truck drivers, retail clerks, builders and others could be forced to forgo retirement income.”

Student loan debt. Under current law, if you have outstanding student loan debt that is canceled, the IRS treats your forgiven debt as income, which can result in a huge tax bill. Millions of borrowers on repayment plans pay a set portion of their income every month, and after 20 years the remaining balance is forgiven. The ARP would make that kind of loan forgiveness tax-free, and it would also apply to future loan forgiveness the Biden administration might undertake.

Exploitation of veteran students. The ARP closes a loophole in student-loan rules that has provided an incentive for colleges, particularly for-profit operations, to heavily recruit veterans paying for college with the G.I. Bill; these veterans are often roped in with false promises and then left without a degree or a good education.

Farmers. The ARP provides billions of dollars in assistance to disadvantaged farmers, many of whom are Black. As The Post reports, the bill would benefit “Black farmers in a way that some experts say no legislation has since the Civil Rights Act of 1964.”

Affordable Care Act subsidies. Under the ACA, only those earning up to 400 percent of the federal poverty level, or $106,000 for a family of four, are eligible for any subsidies to help afford health insurance they buy on the private marketplaces. The ARP removes that limit, meaning those at higher incomes could get some help if their insurance costs more than 8.5 percent of their income. In addition to removing this “subsidy cliff,” it also enhances the subsidies for those at lower incomes, which will mean significant premium cuts for many people.

Medicaid expansion. Twelve states have still refused to accept the ACA’s expansion of Medicaid, leaving huge numbers of poor citizens without health coverage. The ARP boosts the federal contribution to Medicaid so that holdout states will actually make money if they accept the expansion. According to the Kaiser Family Foundation, if Texas accepted the expansion, it would [improve] its state budget [and provide] coverage to 878,000 uninsured, low-income Texans.

Mass transit. The bill includes $30 billion to shore up mass transit systems that were hit hard by the pandemic, forestalling service and maintenance cuts. As Mike Konczal of the Roosevelt Institute says, “Where we’d normally see the recovery worse from cuts, and financial weakness used as a cynical excuse to slash, privatize, and never restore public functions, the ARP moves to stop that dead in its tracks.”

There’s plenty more, including funds for child care, rental assistance and food assistance, among other things. Some of these provisions, including the student loan forgiveness provision, the pension bailout and the “subsidy cliff” fix, will only be in effect until 2025. Democrats are hoping that they’ll prove popular and effective enough that they can be made permanent. It’s a good bet that at least some of them will.

There’s a lot more to say about this bill, especially how it represents a rethinking of fiscal policy and the incentives government provides citizens. . . . But the big picture of the American Rescue Plan is that, to paraphrase a former vice president, this is a seriously big deal. And the more we learn about it as it gets implemented, the bigger it will probably look.

In a Crisis, Bigger Is Better

Paul Krugman explains why Biden’s Covid relief package has to be big (I’ve left out some of the economics discussion, but left in the history):

. . . No, the Biden plan isn’t too big. While [some] pundits’ concern that the size of the package might produce some economic stresses isn’t silly, it’s probably overwrought. And they have the implications of an expansive plan for the future completely backward: Going big now will enhance, not reduce, our ability to do more later.

. . . What policymakers are trying to do here is like fighting a war — a war both against the pandemic itself and against the human fallout from the pandemic slump.

And when you’re fighting a war, you don’t decide how much to spend by asking “How much stimulus do we need to achieve full employment?” You spend what you need to spend to win the war.

Winning, in this case, means providing the resources for a huge vaccination program and for reopening schools safely, while limiting the economic misery of families whose breadwinners can’t work and avoiding gratuitous cuts in public services provided by fiscally constrained state and local governments.

And that’s what the American Rescue Plan mostly involves; it is, as Biden’s economists say, a bottom-up plan that starts with estimated needs. Using numbers from the Committee for a Responsible Federal Budget, here’s the composition of the proposed package:070221krugman1-jumboAlthough discussion is weirdly dominated by those proposed $1400 checks, they’re only a fraction of the total; medical spending, school aid, aid to the unemployed, and help for state and local governments dominate the plan. And there’s a good case for those checks, too; more about that later.

. . . But what about the argument that there are big elements of the Biden plan that aren’t essential relief?

Skepticism about the substance of the Biden plan, as opposed to its size per se, mainly centers on the idea of sending cash to the great majority of American adults — the so-called stimulus checks, although they aren’t stimulus and they aren’t checks. There are other elements; . . . some believe that aid to state and local governments will be bigger than necessary. But the stimulus checks are the big question mark. So let’s focus on them, and with them the broader question of how to set the stage for future policy.

There’s no question that many people receiving stimulus checks will be people who haven’t taken a serious hit to their income and don’t need special help. In that sense the checks will be poorly targeted, certainly as compared to enhanced unemployment benefits.

However, we know that a substantial number of people experiencing significant income losses won’t be helped by unemployment benefits — for example, those who are still working but at reduced hours or wages. Universal basic payments will give such people much-needed help. True, they’re a leaky bucket, and you wouldn’t want them to be the main element of a rescue plan — but they aren’t! They’re a supplement that will do some good.

And they’re also hugely popular, which isn’t an irrelevant consideration.

Actually, every major element in the Biden plan has strong public approval. But support for stimulus checks is through the roof.

[Note: According to a poll taken this month, 68% of voters want Biden and the Democratic Congress to pass a relief package that will do the most to stop the spread of coronavirus and help people economically. Only 32% favor a smaller package that will do less but have bipartisan Republican support.]

Now, policy shouldn’t be driven entirely by opinion polls. But if you care about setting the stage for policy beyond the pandemic, delivering the goods to voters in the first round will be crucial.

Of all the arguments made by critics of a big rescue plan, the one that really has me rubbing my eyes is the suggestion that we should scale the plan back to make room for later policies, like investment in infrastructure. Wasn’t the overwhelming lesson from the Obama years that that’s not how it works? The effective constraint on good policy isn’t financial, it’s political — and as a result underpowered policy in the short run ends up killing the chance of good policy in the years ahead.

A trip down memory lane: Back in 2009 I was more or less frantically warning that the Obama stimulus was too small, and a key part of that warning was my fear that going small would undermine future policy prospects. Here’s what I wrote in January 2009:

“I see the following scenario: a weak stimulus plan, perhaps even weaker than what we’re talking about now, is crafted to win those extra GOP votes. The plan limits the rise in unemployment, but things are still pretty bad, with the rate peaking at something like 9 percent and coming down only slowly. And then Mitch McConnell says “See, government spending doesn’t work.”

“Let’s hope I’ve got this wrong.”

Alas, I didn’t have it wrong.

Circumstances are different now, but the basic logic is the same. If you want effective policy on infrastructure, on the environment, on children and more, Biden has to deliver big, tangible benefits with his rescue plan. Otherwise he’ll squander political capital, and probably lose any chance to do significantly more.

So this plan really needs to go big. The risks, economic and political, of falling short are huge, and should [end the discussion].

“Merit” vs. Community

An Oxford professor of economics and public policy writes about “meritocracy and its critics” for the Times Literary Supplement:

What is going on with our conception of community? Amid the prevailing cacophony of mutual abuse, serious answers to that question are sorely needed and, belatedly, the cavalry is arriving. Communitarian intellectuals, who see a good society as a web of mutual regard rather than a random accumulation of entitled individuals, are beginning to turn the tide on decades of damaging ideas. Michael Sandel’s new book, The Tyranny of Merit, is a valuable reinforcement to this process: Sandel is the most important and influential living philosopher. And Sandel is not alone. For example, in The Third Pillar (2019), Raghuram Rajan, the world’s most respected financial economist, set out a powerful critique of our exaggerated reliance on states and markets: his missing third pillar was community. Many other similar analyses are out or currently in press: an intellectual cascade is under way.

Journalists have also caught up with community. David Goodhart’s new book, Head Hand Heart, critiques the excessive prestige awarded to cognitive skills, relative to equally demanding vocational skills, and the moral strengths needed for care work. In a telling statistic, the author shows that, in contrast to other European societies, the UK spends eight times more on training the cognitively gifted half of the population than on everyone else. . . .

The tide may be turning but Sandel and his fellow communitarians are all building on a long-dead, and mutually acknowledged, pioneer: The Rise of the Meritocracy (1958) by Michael Young, the remarkable social activist who wrote the Labour Party manifesto of 1945. Young presciently realized that meritocracy would be even more socially divisive than the then-prevailing class system of inherited status. His essential insight, based on his experience as a social anthropologist in the East End, was that a fully meritocratic society, with widespread ladders by which “the best” could ascend, would create a new class of “the best”, thereby turning those left at the bottom into “the worst”, bereft of dignity.

And so it has proven. The costs are both physical and mental – physical as evidenced by the falling life expectancy recently documented by Anne Case and Angus Deaton in Deaths of Despair and the Future of Capitalism; mental as evidenced by the anger harnessed by populist politicians in recent years. For while the intellectual cavalry was still asleep, mavericks spotted it coming and offered snake oil remedies that identified the anxiety while proposing fantasy solutions, leading to the political mutinies that baffled and exasperated so many of the successful. Even in 1958, this argument was uncongenial to many on the Left. The Fabian Society refused to publish Young’s book; denial has since become more entrenched.

Sandel develops Young’s critique of meritocracy by tracing its history back to theological disputes between grace and deeds as the criteria for entry into heaven. In the fifth century Saint Augustine emphasized grace, arguing that we did not earn heaven but were granted it by God’s grace. Yet heaven as the reward for deeds kept reappearing. The sale of indulgences by the Church to finance St Peter’s helped to provoke Martin Luther’s rebellious insistence on grace. The same dispute then rapidly infected Protestants. John Calvin took the power of grace into the cul de sac of predestination: some were born blessed by grace and others were not. How could we tell who was blessed? Because they performed good deeds.

Repeatedly, Sandel argues, societies have veered into exaggerated respect for success. . . . Meritocracy intrinsically over-emphasizes the distinctive individual attributes of “the best”. And as those attributes in modern materialist society are exceptional cognitive ability and exceptional effort, the rich and successful have come to see themselves as uniquely clever and hard-working. And deserving. This attitude is Sandel’s target, and it has been the leitmotif of our times . . .

Yet something is lost in that translation of grace into a secular vocabulary. It is the need to transcend “me” and “now”. In short, Sandel offers a profound critique of individualism, making the case for the move away from self to community, from “my wants now” to “the common good”. By this approach we transcend ourselves neither by the utilitarian calculus of the biggest sum of utilities nor the Rawlsian contrivance of detachment from our place in society by a veil of ignorance, but rather through the satisfaction gained from fulfilling social obligations. . . . A healthy society would aim to equip everyone to be able to contribute in some way to our common good: an objective quite different from “let the best rise”. . . .

An efficient journalistic magpie, Goodhart picks out an eclectic range of telling evidence. On the rise of “my wants now”, he cites the sharp decline in moral language: the use of words such as “gratitude”, “humility” and “kindness”, he claims, drawing on a Google study of words published in books, has dramatically reduced over recent decades, to be replaced by more economic language. On his final page Goodhart cites recent research on measuring wisdom, not a social science concept but one used by psychiatrists. They find it, he tells us, to be unrelated to cognitive ability. Psychiatrists define wisdom as “concern for the common good”, the loss of which being where Goodhart ends and Sandel starts.

I end with my initial question. What Sandel, Goodhart and all the communitarians are lambasting is the recent division of society created by a cognitive route to success that belittles all else. . . . Sandel’s thesis is . . . accurately captured as one of “insiders” versus “outsiders”, a distinction first formulated in the analysis of the labour market. Insiders have habitually defended privilege from outsiders: see the professionals such as lawyers, medics and accountants, whose high earnings are protected by their various associations through control of entry (eg setting entry standards unnecessarily high to prevent delegation to the less skilled). But insider advantage extends far beyond the labour market: many of our aspirations are set by the prevailing narratives of the privileged. In Happy Ever After (2019) the behavioural scientist Paul Dolan . . . showed how unwarranted norms set by the insider class, such as the over-emphasis on cognitive achievement, condemn the outsider class to a loss of respect and self-worth. . . .

Insider privilege has become both educational and spatial: the cognitively endowed, clustered together in the metropolis, have life chances radically superior to those of the outsiders. And insider advantage, just like the class system that it replaced, replicates itself. By assortative mating and hothousing their children, the insiders pass their privilege on: they have rapidly become a hereditary caste. All have the opportunity to succeed but the insiders have decisively rearranged the ladders, while – especially on the Left – bemoaning the “inequality” for which [the insiders] are primarily responsible. Goodhart tells a story about the advice offered by senior civil servants to the Minister of Education during the UK years of austerity. It was to save money by closing the colleges of further education. The 8:1 differential in spending on tertiary education, in favour of universities, would become 8:0. Their justification was that “nobody would notice”. What they meant was that the insiders (such as they themselves) wouldn’t notice, since they sent their children to university.

Not before time, the smugly successful are getting their comeuppance: our understanding of contemporary society is finally changing. An insider with a belated conscience, as these disruptive ideas are absorbed by my class, I will try to resist the pleasures of watching hubris turn to nemesis.

Unquote.

I was suspicious about psychiatrists saying “wisdom” involves concern for the common good, but the American Psychological Association offers this definition

wisdom: the ability of an individual to make sound decisions, to find the right—or at least good—answers to difficult and important life questions, and to give advice about the complex problems of everyday life and interpersonal relationships. The role of knowledge and life experience and the importance of applying knowledge toward a common good through balancing one’s own, others’, and institutional interests are two perspectives that have received significant psychological study.

Will society ever devote fewer resources to cultivating the head and more to helping the hand and heart? Recent appreciation for workers who keep society functioning, not just doctors and nurses and medical technicians but truck drivers, grocery store workers, sanitation workers, nursing home staff, et al. seems unlikely to reorder society’s priorities unless government takes much more control of “the market”. Will more people’s merit be recognized and rewarded? Time and the results of future elections will tell.