The scam economy

Mark Schmitt had a great Op-Ed in the NYT today on the “scam economy.”  It’s really good, but this Onion piece is even better:

FBI Warns Of ‘American Dream’ Scam

WASHINGTON—Noting that millions have already fallen victim to the long-running grift, the FBI warned Monday of the ‘American Dream’ scam. “Reports are coming in all across the country of Americans who were promised great prosperity and success in exchange for a lifetime of hard work, only to find themselves swindled and left with virtually nothing,” said agent Dean Winthrop, who explained that susceptible parties are made to believe that class mobility is possible simply through ability or achievement, despite the fact that innumerable social, economic, and racial barriers prevent the vast majority of U.S. citizens from attaining even marginal amounts of upward movement. “Many even travelled across the world to live in what they were calling ‘The Land Of Opportunity,’ a fictitious meritocratic society where any person can simply work their way up from the bottom. The victims, it appears, were drawn in by wild promises about equitable access to wealth, education, and home ownership, but before they knew it, they got played for suckers.” Winthrop added that they haven’t identified the scheme’s kingpin, but are investigating a number of upper-middle class white men who have suspiciously benefitted from the longtime scam.

Damn is that good.  Anyway, here’s some of Schmitt’s take:

It’s the experience of the scam economy, where nothing is certain and anything gained might disappear without warning. It’s an economy where risk is shifted onto individuals and families, financial predators lurk behind every robocall and pop-up ad, work schedules are changed without notice and Americans have endless choices about savings, education, health care and other needs but very little clear guidance about how to make those choices wisely or safely.

Since the 2016 election, Democrats have looked for an economic story and policy that would speak to the frustrations of Trump voters — even while recognizing that more nuanced analysis shows that “economic anxiety” wasn’t driving most of Mr. Trump’s well-off supporters — without losing their own base. While the headline economic statistics like gross domestic product, low unemployment, wages on a slow but steady upward path have been healthy, other indicators like stagnating wages, Gilded Age levels of inequality, and communities and older industries that have been left behind together create an obligation to think ambitiously beyond the assumptions of Clinton- and Obama-era economics…

What government does at its best, from the New Deal forward, has been to provide some certainty and predictability: that what you earned would be yours, that what you saved would be there for you and that you wouldn’t have to bear all the risk on your own… [emphases mine]

Some families, perhaps the top 20 percent, have some ability to absorb these risks. But for the vast majority, there are major setbacks around every corner.

Mr. Trump and Congress have done nothing to alleviate those anxieties and, especially in higher education, the financial industry and health care, have worsened them. By contrast, Social Security and bank deposit insurance, while very different New Deal policies, all served the goal of security. They don’t interfere with the free market — they just give people a bit of confidence in navigating it. The Affordable Care Act expanded this social contract, enabling people to share risk rather than taking it all on themselves.

The policies of the Trump-Ryan coalition weaken that confidence in three ways. The carelessness about policy, exemplified by the frantic process that led to the withholding mess, is the least important of the three. Specific policies also deliberately shift risk toward individuals: Consider the rules in the new tax act that encourage pass-through businesses, which will lead employers to convert employees into independent contractors, costing them protections such as unemployment insurance and health care…

Giving people some security from the scam economy is never going to involve one big program or idea, like universal basic income or single-payer health care. It will always involve dozens of policies, even to replace the dozens that are currently being dismantled.

But together they add up to a big theme, ensuring that people who pursue education, work hard and try to save for the future have some assurance that they will be able to navigate a complex and quickly changing economic climate. Progressives should give it a name, because it connects with the experience of every American outside of the very wealthy.

Quote of the day

Excellent Jonathan Bernstein piece on the perverse incentives that reward somebody like Devin Nunes.  This concluding paragraph nails it:

The bottom line is that as long as there’s demand from Republican-aligned media for partisan nonsense, Republican politicians will scramble to supply it — and as long as Fox News and the others don’t care about quality control, at least some Republican politicians will be happy to supply garbage.

Exactly.  And, “garbage in; garbage out,” as they say.

Photo of the day

Recent National Geographic photo of the day:


“Whilst out snorkelling late one afternoon on Jervis Bay [in Australia], I stumbled across this Common Stingaree gracefully gliding over the shallow sand flats,” says Your Shot photographer Jordan Robins. “As the sun was setting, I managed to captured this over-under image where you can see above and below the water captured in a single exposure.”


What bad faith and a credulous media looks like

Damn to articles like this one in the Post yesterday just drive me nuts:

Republicans are completely reversing themselves on the deficit

Republican lawmakers in 2011 brought the U.S. government to the brink of default, refused to raise the debt ceiling, demanded huge spending cuts, and insisted on a constitutional amendment to balance the budget.

On Wednesday, they formally broke free from those fiscal principles and announced a plan that would add $500 billion in new spending over two years and suspend the debt ceiling until 2019. This came several months after Republicans passed a tax law that would add more than $1 trillion to the debt over a decade.

With all these changes, the annual gap between spending and revenue in 2019 is projected to eclipse $1.1 trillion, up from $439 billion in 2015. And they are expanding the deficit at an unusual time, when the economy is growing and unemployment is low, a dynamic that often leads to shrinking budget gaps…

The debt binge caps off a major reversal for the Republican Party, which has been swept up by President Trump’s demands for more spending and tax cuts at a time when the public seems to care less about debt than it has in years.

Really?!!  Were journalists Damian Paletta and Erica Werner born yesterday?!  Just pathetic journalism.  And, heck, if Paletta and Werner somehow think the Republican Party is only 9 years old, at least some Politics editor at the Post should know better.

The evidence going all the way back to 1980 could not be more clear.  When there is a Democratic president, Republicans pretend to care about deficits as a way to argue against government spending that benefits the poor and minorities.  When Republicans are in charge, deficits don’t matter so that we can have tax cuts for rich people.  Again, this is not new!  Yes, there is a reversal in rhetoric, but no evidence for actual reversal in their beliefs.  This is pretty much a textbook case of what a bad faith argument looks like.  And damn doesn’t it just horribly mislead voters for the Post’s writers to pretend otherwise.

[Nice to see Werner’s link to this on twitter getting excoriated by smart commenters who know better.  Somehow, I doubt she’ll learn.  Also, not trying to be sexist, but as of this posting, Paletta’s later tweet of the same article hasn’t drawn any response.]

The white working class and identity politics

Well, haven’t written on either of these in a while and there’s been two thought-provoking articles on the matter of late.  First, Ruy Texeira (co-author of The Emerging Democratic Majority), who made the case many years ago that the rise of professional whites in a coalition with ethnic minorities would bring Democrats a a stable majority.  What he did not count on was working class whites fleeing the party in response.  Nice piece in Vox:

However popular, the view that Democrats can get along without working-class white voters is simply wrong. It reflects wishful thinking and a rigid set of political priors — namely, that Democrats’ political problems always stem from insufficient motivation of base voters — more than a cold, hard look at what the electoral and demographic data say. Consider the following:

There were far more white non-college voters in the 2016 election than shown by the exit polls

The exit polls claimed there were more white college voters (37 percent) than white non-college voters (34 percent). But in a report for the Center for American Progresssynthesizing available public survey data, census data, and actual election returns, Robert Griffin, John Halpin, and I found that 2016 voters were 44 percent white non-college and just 30 percent white college-educated…

Simulations we conducted indicated that Hillary Clinton would have won the 2016 election if she had held Obama’s modest support among white non-college voters from 2012

In 2012, Obama lost whites without a college degree nationally by 25 points. Four years later, Clinton did 6 points worse, losing these voters by 31 points, with shifts against her in Rust Belt states generally double or more the national average.

Had Clinton hit the thresholds of support within this group that Obama did, she would have carried, with robust margins, the states of Michigan, Wisconsin, Pennsylvania, and Iowa, as well as (with narrower margins) Florida and Ohio. In fact, if Clinton could simply have reduced the shift toward Donald Trump among these voters by onequarter, she would have won.

To put this into fuller context: If Clinton had replicated the black turnout levels enjoyed by Obama in 2012, she still would have lost the 2016 election, because the other shifts against her were so powerful. [emphasis mine]

There is no way around it — if Democrats hope to be competitive in Ohio and similar states in 2020, they must do the hard thing: find a way to reach hearts and minds among white non-college voters.

This is hardly an impossible task. The view that white non-college voters who do not already vote for Democrats are hopelessly racist and reactionary is a canard. They’re a vast and variegated group.

Indeed, there are positive signs already in trends among white non-college voters, particularly among millennials (Democrats actually carried this group in many states in 2016, according to our analysis), and to a lesser extent among women (Democratic margins in this group of women, while negative, tend to run 20 points better than among men.) To build on these trends, Democrats will probably have to offer something besides vigorous denunciations of Trump, who is more popular with these voters than with the rest of country (though he’s slipping).

That does not mean that Democrats need to capitulate to Trumpism by, for instance, changing their position on key immigration issues like DACA. That would hardly pull Trump’s hardcore supporters from their man, and it would compromise a serious policy commitment of the party. Instead, Democrats should reach out to those white non-college voters for whom issues besides immigration are potentially more salient.

It is on economic issues that these voters are most open to overtures, the polling data shows…

Needless to say, issues besides immigration and “identity politics.”  Not suprisingly, I agree with most of what Texeira has to say.  In no way should Democrats drop their defense of immigrants rights, women’s rights, minority rights and genuine social justice.  But, you can do this and focus more on a broadly popular economic agenda than the party of “tax cuts for the rich at all costs” which has a much broader appeal.

Rebecca Traister, meanwhile argues, that Democrats can connect identity to politics to economics.  It’s an interesting argument, and it’s got some genuine validity to it, but I do find it, but I’m not entirely persuaded.

It’s just this effort — to make explicit how identity issues are economic issues and that economic issues are tied to identity — that is behind the Roosevelt Institute’s book The Hidden Rules of Race. Published at the end of 2017, it is a follow-up to Roosevelt Institute economist Joseph Stiglitz’s 2015 book on widening economic inequality in America, Rewriting the Rules. In the wake of the 2016 election, the Roosevelt Institute’s team wanted to return to the question of economic injustice, this time applying a racial (and gendered) lens to the questions of how American disparities have been built and why they thrive. The Hidden Rules of Race takes issue with universalist economic fixes alone as progressive panacea, instead examining the web of often invisible racialized and gendered obstacles to opportunity faced by millions of Americans, obstacles with roots as far back as Bacon’s Rebellion of 1676, which prompted the calcifying of the racial caste system of slavery, the institution on which the country’s economy, politics, and infrastructure were built…

Felicia Wong: We were writing this in particular for two versions of white progressives. The first is white neoliberal trickle down–light 1990s folks who believed that privileging the capital markets was going to strengthen our economy. The other version of progressive we were writing for was literally ourselves: white progressives who are worker aligned. Bernie Sanders is one of those people; he’s not the only person, but in the 2016 race he was regularly seen as somebody who had a class analysis and not a race analysis. We wanted to say: You must have both. The class analysis is essential. But on top of it you also have to look at the 350-year history of racial rules, some of which are really obvious — like school segregation rules or Jim Crow voting laws — and some of which are not obvious, and have to do with tax code and anti-trust and corporate-consolidation stuff. So in a sense we were talking to ourselves.

Hell, yeah, economic opportunity in this country is inexplicably tied to race and gender.  And to ignore that fact when trying to create more genuine economic opportunity is folly.  We absolutely have to take this into account in policies.  But to me, the point is still an emphasis on economic opportunity.  Better child care and maternity leave policies disproportionately benefit women, but really, they benefit all Americans, let’s talk more about these policies.  Better policies disproportionately benefits Black people.  Hugely so.  But, really, better policing benefits all Americans, let’s talk more about it.

I think we run into problems when we more narrowly focusing on particularistic benefits to minorities, women, LGBT, etc.  I think by focusing more broadly, we can have a policy agenda that absolutely takes into account, race, class, gender, etc., and gives real disproportionate benefit to the groups that currently suffer more, yet at the same time not alienate the non-deplorable white working class that will really help in winning elections and actually put these policies into place.

Sounds good when I write it in a blog post, but presumably reality is more difficulty.  Still, I think this is the general direction we should be heading.

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