Less Figgieness

Despite the insouciant smile, Mariners’ third baseman Chone Figgins is no doubt churning inside. He’s got the numbers to prove it.

A typical at-bat:

  • first pitch fastball down the middle for a called strike
  • off-speed pitch for another called strike
  • a swing and a miss on either a fastball out of the zone or a breaking ball in the dirt.

This gets old.

But his few supporters tell us that he’s still the best glove at that position in the club’s organization. Yet, he muffed a sure double-play grounder yesterday, almost costing the M’s another game. Fortunately, the pitching, for the most part, has done phenomenally well.

The emerging star of the lineup is Brendan Ryan, known more for his glove and psychological quirks. He’s now hitting the ball with consistency, batting over .500 this past week. Mercifully, manager Eric Wedge dropped Figgins to the 8th slot, promoting Ryan to the second, Figgins’s normal place in the order.

I routinely study the Tacoma Rainiers’s box scores. Dustin Ackley is finally demonstrating his batting prowess, inching up toward the magical .300. I’ve not seen him play defense, but he’s a quick learner and hard worker, so I imagine it’s just a matter of some polishing before he’s called up.

Italian-born Alex Liddi has hit .300 for a season; he’s currently at .276 with 9 homeruns. Again, I can’t vouch for his fielding. Matt Mangini was sharing third-base duties with Liddi, but is now listed at first base, with Matt Tuiasosopo. Mangini hits about as well as Liddi.

Both Mike Carp and Josh Bard have batted over .300, with Carp leading the club with 14 round-trippers. While a first baseman by trade, Carp has been tried in the outfield, but is now listed as the DH. Bard, we know, is a capable catcher, having been with the parent club much of last year.

I sense that there will be some movement over the next few weeks. Jack Wilson can’t be satisfied with his part-time role at second base, since he’s used to playing shortstop full time. Will management try to trade him? What about Figgins, who has a very lucrative contract?

If I were the GM, I’d try the following:

  • send Michael Saunders back to the Rainiers so that he can learn how to hit; like Figgins, he lets too many good pitches go by and swings at the bad ones;
  • as high as I was on Carlos Peguero, he’s become a human helicopter at the plate, creating a mighty wind with each empty swing; I’d send him back down to learn the strike zone and, more important, to start his swing earlier without prematurely opening up his front shoulder;
  • bring Ackley up to share second base with Adam Kennedy, the off-season acquisition I truly loved, and I have not been disappointed; Wilson, as much as I liked his becoming an M, would benefit from new environs;
  • Figgins’s problems appear to be mental more than physical, like Milton Bradley before him; he, too, might welcome new settings, which would leave room for Liddi.

These past few games I had opportunity to view the Yankees at the plate. There’s a reason their games last longer than the rest. Almost all their hitters exercise plate discipline. And when they see a pitch to hit, they swing hard, though not overly so, to bash solid line drives or four-baggers. I would not want to face them. I’m hoping that the Mariner hitters are watching films of Cano, Teixeira, and Granderson.

On the other hand, the Mariners are playing extremely well of late, winning more than losing. They’re within striking distance of first place. They can afford to play host to Figgins and Wilson and Peguero and Saunders. They are solid up the middle, especially with the return of Gutierrez in center. I’ve always liked Miguel Olivo behind the plate. He doesn’t have to hit to be valuable (notice how he frames the close pitches to receive favorable calls from the umps), yet he’s contributed much to the M’s current offensive performance.

We’ll see. How nice it is to be a fan again.

The New York Times does Krugman

Apropos of yesterday’s post on unemployment, today the New York Times editors remind us that we’re still in economic doldrums. Worse, the data suggest more of the same for an indefinite duration.

A month ago, when an initial gauge of first-quarter economic growth came in surprisingly weak, many policy makers and economists expected the bad news to prove fleeting. But when revised data were released last week, the growth estimate remained stuck at an annual rate of 1.8 percent, compared with 3.1 percent at the end of last year.

More troubling in the latest figures, consumer spending — the largest component of the economy — was especially slow. Stagnant wages and higher prices for gas and food are squeezing family budgets, while falling home equity hurts consumer confidence. That suggests more bad news to come.

The editors, echoing Keynes and Krugman, tell us that the government must do more to stanch the hemorrhaging. For example, and as Krugman suggested, the government could do more on the housing front: “The administration could work to ease the rules for refinancing mortgages owned by Fannie Mae and Freddie Mac, the government-run mortgage giants. Easier refinancings would lower monthly payments for potentially hundreds of thousands of borrowers in good standing, and in that way, free up spending money to boost the economy.”

But I fear that the problems are more systemic, having much to do with the growing gap between the privileged few and the rest of us. Labor, now judged a haplessly quaint term, has been losing substantial ground to Capital over the last few decades; and it was never in parity, to be sure.

The signs are all around us, and chronicled in these pages. Let me list a few:

  • reduced marginal tax rates
  • declining union participation rates
  • stagnating real wages
  • rising “normal” unemployment levels
  • increasing concentration of wealth in fewer hands
  • eroding safety nets (e.g., pension funds, niggardly unemployment benefits)
  • ineffectual financial regulations
  • continuing subsidies to big oil and big Pharma

Alas, it has also become increasingly difficult merely to talk about potential solutions, because the political arena is rife with ideological intransigence marinated in rhetorical excrement. That is, our political “leaders” are blathering nonsensical shit. As the Times put it:

Republican lawmakers have responded to renewed signs of weakness with a jobs plan that prescribes more of the same “fixes” that Republicans always recommend no matter the problem: mainly high-end tax cuts, deregulation, more domestic oil drilling and federal spending cuts.

Such irresponsibility in the face of dismal news reveals pathological adolescence. It’s long since time to have some adults take over. However, the current crop of GOP presidential hopefuls offers no relief from “more of the same.”

Out of work. Have you noticed?

“The way out of a depression is bold spending on public works.”

— Anthony Snaith, character in South Riding

The councilman in PBS‘s fictional series gets it. So, why don’t our Very Serious leaders?

April’s unemployment rate inched back up to 9.0, after it had fallen to 8.8 the previous month. We’re talking about some 14 million people who can’t find a job, and perhaps another 12 million who have either stopped looking for work out of frustration or are working at jobs that pay substantially less than what they need.

It was not that long ago, four years to be precise, that the rate was just 4.5, or half the current number. Then the housing bubble burst, quickly evaporating some eight trillion dollars in wealth and the source of consumer spending. Wages hadn’t risen all that much, so people relied on their housing equity to finance the purchase of durable goods.

As Paul Krugman writes in today’s column,

Yet a strange thing has happened to policy discussion: on both sides of the Atlantic, a consensus has emerged among movers and shakers that nothing can or should be done about jobs. Instead of a determination to do something about the ongoing suffering and economic waste, one sees a proliferation of excuses for inaction, garbed in the language of wisdom and responsibility.

Despite protracted unemployment, the focus of debate is on reducing debt and preventing an inflationary spiral. The British economist John M. Keynes warned against implementing austerity measures during recessionary periods. His reason was both simple and profound: economic downturns are generally the result of declines in aggregate demand. That is, people stop buying things, and consumer purchasing is responsible for 70 percent of gross domestic product.

Krugman goes on to fault the OECD’s recent report.

So what did the O.E.C.D. have to say about high unemployment in its member countries? “The room for macroeconomic policies to address these complex challenges is largely exhausted,” declared the organization’s secretary general, who called on countries instead to “go structural” — that is, to focus on long-run reforms that would have little impact on the current employment situation.

Keynes reckoned that during recessions people lack the income (because they’re out of work) to sustain aggregate demand. On the other hand, business leaders are understandably reticent to invest in production, since there’s too little demand for their products. What to do?

As Mr. Snaith noted above, the government must boldly spend on public works. And, yes, that means more, rather than less, debt. But Keynes also reckoned that such debt-based spending would be temporary, as people returned to work, spent their dollars, and sent tax revenues to government.

Krugman:

The core of our economic problem is, instead, the debt — mainly mortgage debt — that households ran up during the bubble years of the last decade. Now that the bubble has burst, that debt is acting as a persistent drag on the economy, preventing any real recovery in employment. And once you realize that the overhang of private debt is the problem, you realize that there are a number of things that could be done about it.

For example, we could have W.P.A.-type programs putting the unemployed to work doing useful things like repairing roads — which would also, by raising incomes, make it easier for households to pay down debt. We could have a serious program of mortgage modification, reducing the debts of troubled homeowners. We could try to get inflation back up to the 4 percent rate that prevailed during Ronald Reagan’s second term, which would help to reduce the real burden of debt.

Where policymakers differ is on the question: Can national governments reduce unemployment? Keynes and Krugman, among others, argue in the affirmative. Republicans and so-called ‘fresh water economists’ disagree.

It would appear that the contrarians must believe that the economy will right itself, but only if governments shed debt. For them, austerity yields economic expansion.

Suppose they’re wrong. Is it not possible that, in the absence of demand, austerity measures (reducing spending and, if the GOP has its way, lowering taxes further) will exacerbate the problem?

The private sector added 244,000 jobs in April and 2.1 million since February 2010. Nevertheless, the “labor force participation rate” continues to fall. (Chart below from Bureau of Labor Statistics.

It should be obvious that the private sector alone can’t fix the unemployment problem. Indeed, as the above chart indicates, matters are getting worse: the new jobs being added have not kept pace with the increase in the total labor force, which is partially a function of population growth.

Or, the contrarians may believe that the economy will not reset to the pre-recession days. That is to say, we’d better get used to higher unemployment rates as the new norm. Easy, perhaps, for the contrarians. Not so much for those wanting a job.

The historical trend bodes ill.

We need another Roosevelt. Instead, we got an Obama.

Another way

I have been writing of late on governance, the method and manner by which public agencies, including whole governments, are superintended and directed. My views should not be construed as anti-government à la Tea Party bashing. Rather, I have come to praise government, not to bury it.

You see, I happen to believe that most, if not all, of us benefit from the purveying of public goods and services, whether or not we choose to realize it. Here’s a partial list:

  • education
  • transportation
  • legal and judicial systems
  • environmental protection
  • social safety nets (e.g., Medicare and unemployment benefits)
  • corporate regulation

I’ll go further. I believe that we citizens deserve the best governments—and their governance—that our taxes can purchase. And there’s the rub: many of us seem to have a preternatural objection to paying taxes.

There are, no doubt, historical reasons for this antithesis, not the least of which is lousy governance. Too many of our public agencies are clogged by a labyrinth of bureaucracy, as my Viewpoints piece argued. In brief, we are systematically denied the services, both quantitatively and qualitatively, because governments and their derivative agencies have been stymied and choked, much of it our doing, aided and abetted by outmoded structures and attitudes.

Over my many years I have occasionally enjoyed asking foundational questions, as if I, and a small group of civic-minded individuals, were gathered around a table to draft a different future. Suppose that we could become “Founding Fathers,” tasked with the challenge of forming a new and improved United States. What might we keep? What would we abandon? What, in the final analysis, would be different?

At first blush, it seems to me that we would have something to say about government and their agencies. But we’d also want to tackle the economic system and how the public and private sectors interact.

Those familiar with John Rawls’s A Theory of Justice can appreciate this kind of thought experiment. We’d understand that it would be incumbent on us to develop guiding principles, as Rawls did in his seminal book on moral and political philosophy. Rawls argued in favor of justice as fairness, taking us through an elaborate discussion of the “original position,” a “veil of ignorance,” and the “difference principle.” Given a set of initial conditions, how should we decide such issues as the distribution of goods and services? Who should pay for the services?

It’s beyond the scope of this essay and my limited skills to replicate a Rawlsian process here. I will make some assumptions, and leave their justification for another time.

We begin with the premise, an observation, really, that what we currently have in place isn’t working for most of us. We appear to have become a country that no longer works, except for a privileged few, who have exploited sclerotic governments for their own ends. Our existing systems, however described, yield unfair results.

So, I, with Rawls, would want a new and improved government-cum-economy that avoided extremes: people would be neither too rich nor too poor. Call it the “Goldilocks approach.” At the same time, I’m all about providing an economic environment that not only allows but encourages people to fulfill their dreams, whether it’s building a better mousetrap or painting the next Mona Lisa. Any regulatory scheme, then, that stifled innovation and the entrepreneurial spirit should be dead on arrival.

Unlike my more fiery friends, I do not advocate revolution, mostly for practical and pragmatic reasons. First, I am not a violent person, for the most part, and any revolution undertaken in the weapons-ladened United States would be suicidal. I mean, what’s the good in being dead? Nor do I think we’d need to reinvent the wheel; we can selectively borrow from other models.

So, at the risk of shortchanging the whys and the wherefores, I’ll cut to the quick. Here’s what I envisage.

I begin with a parliamentary form of government in Washington, D.C., with a single legislative chamber and proportional representation. Instead of an independently elected president, the parliament would select a prime minister, who, in turn, would select his or her cabinet. The federal court would not have the power to judicially review parliamentary decisions. After all, the people, through their parliament, have spoken.

The real Founding Fathers, distrustful of monarchical tyranny, sought to create a system of checks and balances, with three co-equal branches. However well-intentioned, this system has now become the problem, making it extremely difficult for the federal government to accomplish much on behalf of its citizens, unless you like war or pandering to wealth.

On the economic side, and this may surprise, I would not heavily tax businesses. I would, however, increase the marginal tax rate on personal income and, for the moment, consider replacing state sales taxes with a federal value-added tax, or VAT, which is prevalent in Europe. Again, in my world, people would neither be too rich nor too poor, which suggests a progressive tax structure that requires the winners to compensate the losers. (For more insights into why I believe this, read this Wikipedia entry on Rawls’s book.)

Regulations on corporations would be such as to facilitate innovation and ensure protection of the environment. Global warming is real and worrisome. Therefore, I would impose a tax on carbon sufficient to curb greenhouse gas emission to levels judged necessary by the IPCC. I would also impose taxes on other pollutants so as to secure safe water, air, and soils.

The parliament would establish and adequately fund a universal health care system, recognizing that health care is a right rather than a privilege. It does not necessarily follow that the government itself be in the business of provisioning health care; there are examples of hybrid systems in, say, Switzerland, which seem to be effective in covering all or most citizens while controlling health-care costs.

While defending the nation from foreign and domestic attacks is a paramount duty of the federal government, I see no reason to protect the private interests of American corporations in other lands. Empire may be our way of life, but it’s terribly expensive, undermines international cooperation, and steals precious dollars from meeting the urgent needs of the people.

The focus of the government should be on that short list I presented above. That government should be adequately funded to accomplish goals and objectives. It must also be smaller and more nimble, with an emphasis on doing rather than talking.

Or, I could just move.

My sentiments, exactly

While reading this piece by Jordan Royer in Crosscut, I heard a strong echo of my words in the Herald. I, too, have read the Economist critique of my home state of California, an absolute political mess we Washingtonians are bent on duplicating.

Why must we vote on everything? Aren’t we electing leaders to do something? Anything?

The controversy around the Alaskan Way Viaduct project is a stark illustration of the problems with direct democracy and why our Founding Fathers chose, after much debate, to develop a representative democracy, or a republic. The explosion of the initiative process in the West has handcuffed elected representatives and made it virtually impossible to move forward on any number of issues, especially transportation.

We systematically deny our governments both the governance tools and the resources to get things done, and, yes, there’s much to be done, if you haven’t noticed. Then, when the governments understandably fail to perform, we condemn and distrust them.

In danger of becoming an IDIOCRACY, I say.

Are we seeing the future?

The stark scenes of tornado-caused destruction portend an ominous future of nature’s unleashed fury. If the scientists are correct—and who among us is qualified to dispute their predictions?—this is only the beginning.

We have entered the Anthropocene era, say the Nobel Laureates gathered in Stockholm last week. They write:

Science makes clear that we are transgressing planetary boundaries that have kept civilization safe for the past 10,000 years. Evidence is growing that human pressures are starting to overwhelm the Earth’s buffering capacity.

Humans are now the most significant driver of global change, propelling the planet into a new geological epoch, the Anthropocene. We can no longer exclude the possibility that our collective actions will trigger tipping points, risking abrupt and irreversible consequences for human communities and ecological systems.

Homo sapiens have been slopping around the planet for millennia, with no appreciable effects on the biosphere. Then we discovered carbon. Gosh, how plentiful we found it, and so well-suited for heating, transportation, and just about everything we do these days. Indeed, our modern industrial economy could not exist without oil and coal. So, combust the carbons we did, year after year, decade after decade.

Unfortunately, as the scientists tell us, we are “starting to overwhelm the Earth’s buffering capacity.” The oceans, which have absorbed about half of the carbon emissions, are reaching saturation, as evinced by increased acidity levels. The glaciers’ albino effect (reflecting rather than absorbing heat) is diminishing because the glaciers themselves are shrinking due to global warming. Prolonged drought encompasses large swaths of land.

Meanwhile, weather patterns have become more frequent, fierce, and volatile. View this film of Joplin, Missouri, tornadoes. You can find dozens more on YouTube.

Yes, we cannot, with certainty, attribute any single tornado or other destructive weather event to global warming. We’re looking for trends, however. The physics of global warming, combined with our complex “Earth system,” strongly suggest increased volatility and magnitude.

In a market economy, where costs and benefits are transparent to participants, repairing devastated areas would send appropriate signals, resulting in attempts to arrest or mitigate global warming. Buying property insurance in the Midwest, for example, should become an expensive proposition, perhaps unaffordable to most. Pumping billions more into FEMA should be offset by higher taxes or cuts made elsewhere.

Or, the Very Serious People, as Paul Krugman likes to call the folks in Washington and the punditocracy that feeds off them, could start getting serious about global warming. The Nobel Laureates have a plan (pdf).

We recommend a dual track approach:

a) emergency solutions now, that begin to stop and reverse negative environmental trends and redress inequalities within the current inadequate institutional framework, and

b) long term structural solutions that gradually change values, institutions and policy frameworks. We need to support our ability to innovate, adapt, and learn.

All I can say at the moment, given my profound distrust of our political “leaders,” is good luck with that.

The reserve army

Against the austerity crowd, who continue to warn of inflation “just around the corner,” data disappoint. Inflation remains low, too low, in fact, for the likes of Federal Reserve Board chair Ben Bernanke. Investors keep buying treasury bonds, despite low yields. This is important, since rising inflation and bond yields are the oft-cited arguments for tightening the nation’s fiscal belt.

So why haven’t “soaring” deficits and “burdensome” debt led to inflation and a decline in investor confidence? I think we need look no further than the awful employment numbers.

Corporate America has what it’s always wanted: a reserve army of workers. That millions of people lack jobs keeps a lid on wages. Moreover, those who are working realize that, for the grace of God, they could be receiving pink slips tomorrow. So, they’re willing to work harder and put in more hours to avoid being laid off.

Labor productivity, as it happens, is steadily increasing. But instead of sharing the fruits of doing more with less, corporate heads are skimming off the higher profits for themselves, leaving their employees’ wages stagnant or diminished. They know that they can get away with this, refuse to share the wealth, because of rampant job insecurity in the labor force.

In turn, that insecurity results from extremely low and ever-declining union density rates. Consider this chart from OECD.

Look how far down the list America is, with only 11.9 percent of the workforce belonging to unions. See which countries are at the top.

Now we should look at comparative unemployment rates and, most especially, comparative inequality (the Gini coefficient).

We see that the US has the lowest union density rate, the highest unemployment rate, and the highest metric of inequality of these selected countries. I submit that there’s a causal relationship. The less political clout enjoyed by labor relative to capital’s, the greater the unemployment rate, the greater the inequality, and the more depressed workers’ wages. (Note: The per capita GDP of Americans is higher than most of the above countries’. However, our greater inequality means that income and wealth are more heavily concentrated in fewer hands. We know what happens to average income in a bar when Bill Gates enters.)

For more on these points, see this article.