Scary journalism

I know, a contradiction in terms. But consumers of news are quite familiar with the media’s preference for sensationalism at the expense of information. (Readers of the Everett Herald have been routinely treated to scary headlines about the PUD. The stories amounted to much sound and fury, but signified nothing, as official judgments later revealed.)

Economist Dean Baker calls out the New York Times for scary headlines about public pensions. We expect more from the Grey Lady of journalism. He writes:

The NYT has committed itself to putting numbers in context, where is the context here? Virtually none of the NYT’s readers has any clue how large a burden $78 trillion is for the OECD countries over the rest of the century. The article did not inform readers with this comment, it tried to scare them. That is not journalism.

Baker provides a public service with the necessary context. The $78 trillion represents a mere fraction of total OECD GDP. The scare does not hold.

Unions make a difference

We know that membership in unions has fallen steadily since the 1950s. We should not be surprised, then, that labor’s share of economic output has also declined, as the chart below illustrates.

labor share 3:2016

Indeed, over 90 percent of economic output since the Great Recession has gone to the top one percent of households, which now control as much wealth as the bottom 90 percent.

There is a strong correlation between union participation rates and inequality, as we can see in this chart.

unions and inequality

The diamonds at the lower right of the above chart are Scandinavian countries. The U.S., at the upper left, has the highest level of inequality of the major industrial democracies and the lowest level of union membership.

Greedy rich men like the Koch brothers aren’t content to have billions of dollars in their portfolios. They want more, and will do just about anything to ensure that their avarice continues unabated. Since unions check inequality, the Koch brothers and their circle of friends target labor organizations, as Jane Mayer recounts in her book Dark Money.

Dead man makes a difference

I’m talking about Antonin Scalia, who passed away a few weeks ago. Had he still been on the Supreme Court the outcome of Friedrichs v. California Teachers Association would have been different, a ruling that would have denied the teachers union the ability to collect dues from non-members who nevertheless receive the protection and bargaining services the union provides members. The court vote was a tie, 4-4. Scalia would surely have sided with the conservatives, jeopardizing the existence of all public unions, if not eventually even private-sector labor organizations. As the New York Times explains:

Under California law, public employees who choose not to join unions must pay a “fair share service fee,” also known as an “agency fee,” typically equivalent to members’ dues. The fees, the law says, are meant to pay for collective bargaining activities, including “the cost of lobbying activities.” More than 20 states have similar laws.

Government workers who are not members of unions have long been able to obtain refunds for the political activities of unions, like campaign spending. The case, Friedrichs v. California Teachers Association, No. 14-915, asked whether such workers must continue to pay for any union activities, including negotiating for better wages and benefits. A majority of the justices seemed inclined to say no.

Had the court decided in the plaintiffs’ favor, it would have upended its own 1977 ruling with essentially the same issues at play. Nothing to do with politics, of course, though we can bet that the Koch brothers were involved directly or indirectly in the Center for Individual Rights, a libertarian group that spearheaded the case.

This case also underscores the importance of who replaces Obama in the White House. If it’s any of the Republicans, and if the GOP maintains control of the Senate, then a Scalia-like appointment would deliver a court whose decisions would further erode the power of unions.

From A to B

Puget Sound, like many U.S. metropolises, suffers from traffic congestion. There are just too many people driving too many cars on too few roads. When we set out for work each morning, we inevitably join the congealed goo that clogs our freeways. Getting to and from Seattle involves one of the worst commutes in the country.

A big reason for this is the lack of alternative transportation. We are too sparsely distributed to rely on bicycles, and even if we are intrepid enough to bike, we must share the roads with giant SUVs and trucks—an iffy proposition. Buses must also compete with thousands of other vehicles, which does not make commute times any less. But the absence of trains is the largest factor in our region’s transportation mess.

The King County Executive, Dow Constantine, announced that residents of the area should not expect relief to come via more roads and freeway lanes.

With the three-county region’s population expected to grow by 1 million over the next 25 years, Constantine said transit is the only solution that can move a lot of people — 16,000 an hour, or the equivalent of 14 new lanes on Interstate 5.

The proposal going to the region’s voters this fall, dubbed ST3 (Sound Transit 3), will ask residents to pay a combined $50 billion extra to serve the citizens of Everett and elsewhere. The Sound Transit agency estimates that the average Puget Sound household would pay about $392/year, or a bit over a dollar a day.

But Republicans, as a rule, loathe anything public and especially anything to do with public rails. They believe, in their idiocy, that rails and buses undermine the freedom to roam and, though they do not admit it, wreak havoc on the environment in their libertarian pursuits. So Republicans, as a rule, oppose any collective efforts to solve aggregate problems, and transportation is the mother of all aggregate problems.

Meanwhile, the United States continues to fall behind other countries in just about all categories of social and economic wellbeing, save for our One Percent, who reign supreme throughout the world. Consider this chart on high-speed rail, based on data collected by GoEuro, a website devoted to transportation.

high speed rail

Notice where the U.S. ranks. That’s right, next to last in population coverage and dead last in costs per kilometer traveled. The GoEuro website includes a table showing high-speed rail either planned or already under construction. Again, look at The Americas.

Screen Shot 2016-03-29 at 12.35.28 PM

The entire Western Hemisphere has just three percent of the world’s total of rail lines under construction (most of that the California project) and under 10 percent of the total planned. Current usage of existing high-speed rail is roughly two percent of all the global high-speed rail now operating.

Against Europe and Asia we suck. For you Trumpites out there, know that American cannot be made great again by cutting taxes on the wealthy or building a big wall, however beautiful. More helpful would be to get Americans moving again, quickly and efficiently, along with their goods and services. Asians and Europeans understand this.

Ben Adler, writing for Grist, offers his thoughts:

GoEuro notes dryly that the “USA and Russia, both once in competition during the Space Race,” are now struggling just to move their citizens around swiftly on land. Well, Russia is actually in 15th place, so unlike the space race, we’re losing this one. Well-known rail leaders Japan, South Korea, China, and France are the top four nations, in that order. Spain, which is persistently economically troubled, ranks fifth. None of these countries has as high a GDP per capita as the U.S., so our problem isn’t lack of resources, it’s lack of political will.

Ah, politics. The necessary evil.

Three charts and a “rigged system”

As an addendum to a previous post, I include three charts from an essay by Martin Wolf in the Financial Times. He favors a stronger Keynesian response to our economic doldrums than Congress or the White House proposes. Indeed, the Republican-controlled Senate and House cling to the mistaken belief that deficits are the problem, along with the usual suspects—viz., Those People dependent on government largesse.

Screen Shot 2016-03-28 at 8.50.47 AM

We live in an era of negative interest rates. Firms and large investors are actually paying the federal government to park their cash. The second graph above shows the glut of capital, dollars that are being hoarded rather than invested in productive activities. Meanwhile, central governments have tightened belts, the antithesis to Keynesian prescriptions. We see this pronounced in the Eurozone.

The next chart shows U.S. real GDP and federal government investment and spending, expressed as percentage change from preceding period (quarters).

 

real gdp and federal spending from 2012 to 2015, inclusive

Investors save rather than spend because they know that demand is too low to support increased production of goods and services. Wages for the many have stagnated or declined, while incomes of the few explode. Idle cash, mountains of it, against unemployment and underemployment yields a toxic yet fertile soil for the likes of both Trump and Sanders, the former a faux populist, the latter a very genuine article.

Donald Trump has won the support of disaffected white workers who used to toil at blue-collar jobs but have now been displaced by “immigrants” or “globalization.” Hitler’s Jews have become Trump’s Mexicans.

And Republicans have succeeded in undermining Americans’ support for unions, which in more sophisticated countries provide bargaining power to workers and a countervailing force to excessive capitalism such as practiced in the U.S. Here’s Paul Krugman in his NY Times column this morning:

…As a member of the European Union, Denmark is subject to the same global trade agreements as we are — and while it doesn’t have a free-trade agreement with Mexico, there are plenty of low-wage workers in eastern and southern Europe. Yet Denmark has much lower inequality than we do. Why?

Part of the answer is that workers in Denmark, two-thirds of whom are unionized, still have a lot of bargaining power. If U.S. corporations were able to use the threat of imports to smash unions, it was only because our political environment supported union-busting. Even Canada, right next door, has seen nothing like the union collapse that took place here.

Krugman adds that Denmark provides a stronger social safety net than our miserly Congress deigns for the Rest of Us. Republicans, again, deride those in need rather than helping them.

As part of the conservative assault on the Rest of Us demonizing anything public stands out. But it seems obvious that if we are to overcome our economic doldrums, we need more public and less private. We need more government spending on transportation infrastructure, education, environmental protection, and, yes, a stronger social safety net. The last thing we need is to put even more money into the pockets of the very rich, who will simply sit on it. The wealthy do us no good.

When Republicans counter with fear-mongering debts and deficits, what they are really saying is “screw you.” Besides, if you are a “loser,” it’s your own damn fault.

Sanders knows that “the system is rigged.” The evidence clearly supports this view. Remarkable, though, how the extremely wealthy succeeded in convincing so many Americans that the solution for what ails them is further rigging.

Perspective

Violent deaths are not beautiful, or glorious. Bullets pierce eyes and buttocks and slice off little fingers. Bombs mean nails and screws and assorted shipyard confetti shredding through human flesh and embedding infection and debris deep in the bodies of survivors. There is nothing glorious about any of it. People don’t die gloriously for their beliefs. They die instantly or silently or crying out in pain.

The notion of tactically risible but symbolically meaningful blood sacrifice is one that angry and stymied young men have always embraced, not least this week in Brussels. There is nothing new about disenfranchised twenty-somethings appropriating the images and ideas of whatever religion they happen to grow up around to tart up the essentially adolescent idea that blood cleanses, especially the blood of others.

What we now call radicalisation is simply the age-old desire of the young to believe in purity; to believe in it so completely that it comes above human life. But purity does not exist. Humanity isn’t good enough at any single thing to make it more important than the irreplaceable consciousness of just one of us.

— Maria Farrell, writing for Crooked Timber

The person trumps the idea.