Liberals on the Precipice: Knowing that Neoliberalism has Failed while Pretending that Politics can Fix It

Eduardo Porter has a column every Wednesday on the business page of The New York Times. It is interesting because it records how a liberal is comings to grips with a bankrupt neoliberal economic paradigm. Lately Porter has been jousting with proponents of a universal basic income (UBI).

Today, "For Hillary Clinton, a Risk of Excess Caution in Economic Policy," Porter implores Hillary to go big in addressing the problems of today's economy, which he correctly identifies as the shrinking of the working class:

A big part of the problem is the erosion of America’s working class. It has been hollowed out as trade and technology have done away with most of the well-paid jobs once available to Americans without a college degree, tipping many of them into a service economy of low wages, uncertain hours and little job security.

He likes Clinton's emphasis on rebuilding the nation's infrastructure, but he thinks her proposal to do so is too stingy:

For instance, she is proposing $275 billion in federal infrastructure investment over five years. That is less than 10 percent of what the American Society of Civil Engineers estimates will be needed. 

Mrs. Clinton’s entire tax plan would raise only $1.1 trillion over the next decade, according to the Tax Policy Center, half a percentage point of the nation’s gross domestic product.

Porter then goes on to list some helpful liberal ideas on how to create a more equitable economy:

What about dismissing the deficit scolds who shape the outdated Washington Beltway consensus and borrowing $1 trillion or so to sharply increase the spending on infrastructure, letting states and municipalities select the investments and manage the job?

How about taking advantage of the cheapest oil prices in a very long time to propose a carbon tax? Or how about imposing a progressive wealth tax to tap into the good fortune of 160,000 American families at the very tip of the wealth pyramid, who are on their way to pass $12 trillion to the next generation, much of it untaxed.

The money could be spent on high quality and universal early education, providing the next generation a better shot at a level playing field. It could be spent on training, to provide workers with needed skills, or job search services to help match workers and jobs. These strategies have been successfully employed by other advanced nations but remain a rarity in the United States.

Mrs. Clinton, of course, is not the only candidate indulging in nostalgia. Witness Donald Trump’s bombastic appeal to white working class men uncomfortable in an America where one must dial “1” for English.

Still, she has a rare opportunity. If she wins, she may well come into office with the political wind at her back: a Senate returned to Democratic control and a divided Republican Party with only a tenuous hold on the House. [Some robust magical thinking here.]

Americans have just lived through perhaps the most progressive presidency [!] since the 1960s. President Obama raised tax rates on the rich and expanded health insurance for millions of Americans. Facing stubborn resistance in Congress, he leaned on his executive powers to improve working conditions.

Yet the nation’s enormous inequities just got bigger. The income of the richest 1 percent grew 27 percent from 2009 to 2014. The average gain for everybody else barely exceeded 4 percent. A future projected along these lines does not look promising.

Bernie Sanders talks about a revolution. Mrs. Clinton might want to try to deliver one.

Most liberals (they don't call themselves liberals anymore; if pushed, they call themselves progressives) are where Porter is at. They realize the economic paradigm is malfunctioning for the vast majority of people, but they are still attached to the delusion that the political system can address and solve the problem. It can't.

The idea that Clinton is going to have long coattails in November and sweep the GOP from control of the Senate, or even substantially reduce the Republican majority in the House, is fanciful. No fix is in store. And what will be interesting is the level of allegiance Hillary will enjoy from liberals who remained loyal to Obama even after it became apparent post-2012 election that he was not "the one we were waiting for." I suspect liberal loyalty will be at a minimum.

At least liberals like Porter are able to frame the question, as he did in last week's column on technology-induced unemployment, "Jobs Threatened by Machines: A Once ‘Stupid’ Concern Gains Respect":

Jeffrey D. Sachs of Columbia University has been working with a series of colleagues on an economic model of a world in which robotization both raises economic output and immiserates workers, pushing them out of their jobs. It is not a theoretical impossibility.

“The point for me is that these two scenarios — robots lead to nirvana and hell — can happen side by side,” Professor Sachs told me. “Generally capital wins and all labor can lose. It shows up as a fall in the labor share of national income.”

In that event, preventing a dynastic society of relentlessly growing inequality would require large-scale redistribution. It could even take the form of a universal income paid for with a hefty estate tax — using some of the vast profits accruing to the owners of robots to finance a living for everybody else.

Since most paid human labor would be pointless, the disincentive to work produced by a monthly check would be unimportant. People could devote themselves to unpaid creative affairs.

“Don’t destroy the robots,” Professor Sachs said. But recognize that “not everybody would be better off as a result of market forces. With redistribution everybody could be made better off.”

Many experts are not convinced. For every analysis like this one — forecasting that half of all jobs in the United States will be replaced by new technology — others point out that there is no evidence of humanity’s impending redundancy.

A research paper published last month by the Organization for Economic Cooperation and Development argued that even the occupations most at risk of being replaced by machines contained lots of tasks that were hard to automate, like face-to-face interaction with customers.

My sense is that given a choice between interacting with another human or a computerized machine, consumers will overwhelming opt for the machine. Look at the fate of the corner video store. Streaming home video had a lot to do with the demise of the mom-&-pop neighborhood video rental store, but not so much as the appearance of the Redbox movie kiosks in grocery stores and in front of 7/11s.

We have to give more weight to predictions of 50% job loss due to automation than a pie-in-the-sky-by-and-by faith that robotic efficiencies in the job market will trickle down and create other types of employment.

To this end, Porter concluded his column last week with a Larry Summers anecdote. And who doesn't love a story about the pompous economics guru ex-Harvard president?

Last November, Lawrence H. Summers — a former Treasury secretary under President Bill Clinton, a top economic adviser in President Obama’s first term and one of the youngest people to earn tenure on the Harvard faculty — strode up to the podium at the Peterson Institute for International Economics in Washington and made an unlikely admission: Perhaps economists were not always the smartest people in the room.

He reminisced about his undergraduate days at M.I.T. in the 1970s, when the debate over the idea of technological unemployment pitted “smart people,” exemplified by the great economist Robert Solow, and “stupid people,” “exemplified by a bunch of sociologists.”

It was stupid to think technological progress would reduce employment. If technology increased productivity — allowing companies and their workers to make more stuff in less time — people would have more money to spend on more things that would have to be made, creating jobs for other people.

But at some point Mr. Summers experienced an epiphany. “It sort of occurred to me,” he said. “Suppose the stupid people were right. What would it look like?” And what it looked like fits pretty well with what the world looks like today.

For large categories of workers, wages are inadequate. Many are withdrawing from the labor force altogether. In the 1960s, one in 20 men between 25 and 54 were not working. Today it’s three in 20. The population is generally healthier than it was in the 1960s; work is almost uniformly less demanding. Still, more workers are on disability.

“Maybe the stupid people weren’t quite as stupid as I thought they were,” Mr. Summers conceded. “This was at least a serious concern that had to be thought about.”

In a world in which many Americans do not work during large chunks of their lives, we might have to conceive of Social Security and disability much more broadly than we do today.

That, Mr. Summers said, “could start to look like a universal income.”

So this is where smart-set type liberals are now. They are the on the precipice. The economic system is clearly not working for the masses, and it promises to only get worse. Talk about solutions is headed in the right direction, but there is very little acknowledgement that the political system will address the problem in any significant way.

A political revolution is called for, but in the United States a political revolution is not on the horizon. So things are going to continue to get worse.

The Future of Work + Hillary's Suicidal Southern Strategy + the Biden Decoy

On this Labor Day, give yourself a sense of the perilous times we are in by scanning the weekly Popular Resistance newsletter put together by Kevin Zeese and Margaret Flowers. What jumped out at me is "The Future of Work" section:

The Future of Work 

There are some major trends that indicate we are in the midst of a radical transformation of what work means and how people will have income. 

The most significant trend involves robotics, artificial intelligence and software that will do most current jobs. The research firm Gartner predicts that “one in three jobs will be converted to software, robots and smart machines by 2025.” Oxford University researchers estimate that 47 percent of U.S. jobs could be automated by 2033.  Already the official unemployment rate hides the fact only 63% of working-age adults are actually working. 

These changes are happening alongside the demise of unions and worker power; as well as globalization resulting in lost jobs and a race to the bottom of low paid workers.  Workers are already in politically and economically weak positions to survive the onslaught of robots. 

It is time for these issues to rise to the top.  The transformation of jobs and what to do about them is not even discussed in the 2016 elections, other than reforms like raising poverty wages. A broader discussion is needed.

The authors go on to advocate for a universal basic income and worker cooperatives.

One thing is for sure, the economy is not working for most people. Official unemployment is down to 5.1 percent, what many mainstream economists believe to be the "natural" rate of unemployment, but wages are still broadly stagnant. This fact is succinctly explained in Doug Smith's "Labor Day? Let's Tell the Truth and Call It 'Assets Day' ": "Take heart. Through your self-denial, executives, owners, and shareholders have grabbed all the productivity gains of the past quarter century for themselves."

Krugman's Labor Day column, "Trump Is Right on Economics," addresses the root of Trump's popularity: He is the only Republican addressing this issue of the systemic lack of work in the globalized neoliberal economy:

And here’s what’s interesting: all indications are that Mr. Bush’s attacks on Mr. Trump are falling flat, because the Republican base doesn’t actually share the Republican establishment’s economic delusions.

The thing is, we didn’t really know that until Mr. Trump came along. The influence of big-money donors meant that nobody could make a serious play for the G.O.P. nomination without pledging allegiance to supply-side doctrine, and this allowed the establishment to imagine that ordinary voters shared its antipopulist creed. Indeed, Mr. Bush’s hapless attempt at a takedown suggests that his political team still doesn’t get it, and thinks that pointing out The Donald’s heresies will be enough to doom his campaign. 

But Mr. Trump, who is self-financing, didn’t need to genuflect to the big money, and it turns out that the base doesn’t mind his heresies. This is a real revelation, which may have a lasting impact on our politics. 

Again, I’m not making a case for Mr. Trump. There are lots of other politicians out there who also refuse to buy into right-wing economic nonsense, but who do so without proposing to scour the countryside in search of immigrants to deport, or to rip up our international economic agreements and start a trade war. The point, however, is that none of these reasonable politicians is seeking the Republican presidential nomination.

Like Trump, Bernie Sanders is also bringing the neoliberal temple down, except for the Democratic half of the duopoly. Sanders only gets a fraction of the media attention though; nonetheless, at this point, the Clinton camp has basically acknowledged that it is going to lose Iowa and New Hampshire. That was the point of yesterday's "Hillary Clinton Relying on Southern Primaries to Fend Off Rivals," by Patrick Healy and Amy Chozick:

Hillary Rodham Clinton’s presidential campaign is methodically building a political firewall across the South in hopes of effectively locking up the Democratic nomination in March regardless of any early setbacks in the Iowa caucuses and the New Hampshire primary.

Mrs. Clinton’s advisers, struck by the strength of Senator Bernie Sanders in those two states, have been assuring worried supporters that victories and superdelegate support in Southern states will help make her the inevitable nominee faster than many Democrats expect. They point to her popularity with black and Hispanic voters, as well as her policy stances and the relationships that she and her husband, former President Bill Clinton, have cultivated. Mrs. Clinton was similarly confident at this point eight years ago, before Barack Obama and his superior organizers began piling up delegates, including in many Southern states.

In interviews, advisers said the campaign was increasingly devoting staff members and money to win the South Carolina primary on Feb. 27 while laying the groundwork to sweep Alabama, Arkansas, Georgia, Oklahoma, Tennessee, Texas and Virginia on March 1. Those Super Tuesday states are highlighted in red on maps in the offices of Mrs. Clinton’s senior aides in Brooklyn.

The eight primaries will deliver several hundred delegates for Mrs. Clinton, advisers believe, toward the goal of more than 2,200 needed to clinch the Democratic nomination. The campaign is barraging superdelegates in the South with requests for support — sometimes even jumping the gun by sending pledge forms prematurely — in hopes of adding scores of these party leaders who can bring their votes to the Clinton column at the Democratic National Convention.

The Southern firewall also includes Florida, Louisiana, Mississippi and North Carolina, which vote through mid-March. If Mrs. Clinton wins big in the Michigan and Ohio primaries that month, her advisers and supporters believe, the nomination will essentially be hers (though crossing the total delegate threshold takes time).

In order to sew up the nomination, Hillary is relying on votes in states Democrats have slim chance of winning in 2016, votes based on ignorance of Bernie Sanders' positions vis-a-vis Clinton's. This is her "Southern Strategy." If it is to pay off and she is to win the nomination, it will almost certainly be a Pyrrhic victory. Winning a nomination based on the ignorance of voters who reside in states most of which will not be in play for Dems next year is a prescription for disaster. How can Hillary juice turnout and return the Obama coalition to the polls if she is relying on public ignorance and superdelegates to push her across the finish line?

As for the Biden, after reading the coverage of his jaunt to Florida and Georgia, it is clear to me he is not going to run. Seventy-two is 72 and not an age that allows for a late-entry, come-from-behind win of a presidential nomination. Biden exists as a decoy to keep rank-and-file Democrats from giving Bernie a look and thereby to keep as many Dem voters on the Clinton reservation as possible. Clinton's support is fast disappearing. To slow things down the Democrat power elite have introduced a Biden mirage.

Where Monsters Dwell #29: Ozamm the Terrible

Where Monsters Dwell #29 reprints "Ozamm the Terrible," a filler story from Tales to Astonish #39. Tales to Astonish #39 featured Ant-Man. So this is the first one of these Silver Age monster reprints that I've been working through in Where Monsters Dwell that originally appeared alongside Marvel's new line of superheroes.

Where Monsters Dwell #29, with a publication date of July 1974, features new cover art by the great Larry Lieber, Stan Lee's little brother, famous for penciling the daily Amazing Spider-Man newspaper comic strip. Lieber also scripted "Ozamm the Terrible," which had a publication date of January 1963. Stan Lee provided the plot; Don Heck, the art.

"Ozamm the Terrible" tells the story of a nefarious alien, Ozamm, with the head of a piranha and the body of a mountain gorilla, who comes to New York City to assert total domination over the dwellers of the metropolis. This is a standard storyline for Silver Age outer-space alien monsters. What is different is the backstory of machinist Joe Baxter. The tale begins with Joe being laid off due to automation at the factory where he works.

The last forty years of woe for the working class can be boiled down to its inability to share in the productivity gains made from the introduction of new technology. The promise of the 20th century -- i.e., the workerless factory -- was that the working class would share in these gains and be able to reduce the number of hours worked while maintaining the wages and benefits. In fact the opposite has occurred; people are working more for less. (For a study of how the idea of the workerless factory went from a utopian to a dystopian concept, see Jeremy Rifkin's excellent The End of Work, published in 1995.)

Jobs flow overseas because machines can be boxed up and shipped across the border; Detroit goes bankrupt; the mighty Boeing Machinists are in danger of losing their defined benefit pension plan. Who could have conceived of such things forty years ago?

Lee/Lieber end the story on a happy note. Joe Baxter saves the day by realizing that the source of Ozamm's power resides in electrical generation equipment in the alien's flying saucer; he is rewarded with his old job back by a newly appreciative boss, who says,

He is worth a hundred machines! Any human being is! Let's hope we've learned that lesson for good now!

Capitalism is not so ethical.