Saturday, March 6, 2021

Are We Seeing a Fundamental Shift in the Macroeconomic Policy Set?

Getting the American Rescue Plan through the Senate was a great thing and pretty soon it should be signed into law. The effect of the bill should be very good for the country and its recovery. But could it be even better and more significant than that. Adam Tooze, not know for over-optimistic pronouncements thinks so:
"'[T]he stimulus is designed to deliberately generate a high-pressure economy.
This involves an element of inflationary risk. Bond markets are having a mini tantrum about that prospect. So far, the administration and the Federal Reserve System should be congratulated for holding their nerve. They clearly agree that the risk of doing too little is larger than the risk of doing too much. That is a matter of technocratic judgement. But, as the howls of protest from economist Lawrence Summers make clear, it is more than that. How you strike that balance is a matter of politics. And what we are seeing in 2021 is the balance shifting in favor of the left.
For more than a generation, all the way back to 1993 and the Clinton administration, the bias of technocratic judgement has been the other way. In both fiscal and monetary policy, the preference has been for erring on the side of caution, for penny-pinching when it came to stimulus, and for raising interest rates preemptively. That has left millions of people unemployed when they might have found jobs. It has undercut the bargaining position of working people when they might have been able to demand better pay and conditions. It has made it harder for organized labor to mobilize. It has undercut the case for minimum wages to be raised to a decent level. It has provided little incentive to prioritize investment in increasing labor productivity. And all of this has disproportionately disadvantaged Black workers and especially Black men."

Thursday, March 4, 2021

The Empirical Case Against Cultural Leftism in the Democratic Party

It's a strong case and I summarize it in my latest post for The Liberal Patriot, which draws on David Shor's recent interview in New York Magazine.
"The good news is that the Democrats control all three branches of the federal government and appear competent enough to successfully contain the covid pandemic and unified enough to do the legislative necessary to get the economy running on all cylinders, possibly moving into outright boom territory. That’ll be great for the country and should be good for the Democrats as the party presiding over the country’s turnaround.
The bad news is that the Democrats still face a daunting situation, even if these developments pan out. Despite running against an historically unpopular President embroiled in twin health and economic crises, Biden’s victory was much narrower than expected, accompanied by a reduced majority in the House, poor Senate results that were only redeemed by the Georgia runoffs and losses in state legislative elections when Democrats desperately needed gains to protect themselves in the redistricting process.
Moreover, with control of both the House and the Senate are on a razor’s edge, they will shortly confront the administration’s first midterm elections which are typically very tough for the incumbent President’s party. Even with the goodwill generated be a successful first two years, 2022 will be a daunting challenge.
This underscores the necessity of understanding how the Democrats fell short in 2020 and what can be done to maximize Democratic votes in the future. They simply can’t afford underperformance if they hope to hold power and continue to move the country in a progressive direction.
With data from voter files starting to come in and precinct returns having been ever more elaborately analyzed, the contours of Democratic underperformance and its probable causes are starting to emerge. The findings make clear that Democratic chances are undercut by cultural leftism but can be at least partially remedied by moving to the center on cultural issues and emphasizing economic issues that have broad appeal across working class constituencies."
Read the rest at The Liberal Patriot! Democrats ignore Shor's findings at their peril.
How Cultural Leftism Is Crippling the Democratic Party
How Cultural Leftism Is Crippling the Democratic Party
What Needs to Change and Why

Tuesday, March 2, 2021

Progressives Should Relax about the $15 Minimum Wage and Concentrate on What's Most Important

There's been a lot of rending of progressive garments about the looming excision of the $15 minimum wage from the relief package, both due to the Senate Parliamentarian's ruling and the general realities of a Senate where Joe Manchin's and Kyrsten Sinema's votes cannot be dispensed with. But really, they should relax. This development was inevitable anyway. It's far, far more important to move the relief bill fast and get it into the economic bloodstream of the country, showing that Democrats can and will deliver big for the American people. From the Times:
"The demise of President Biden’s plan to raise the federal minimum wage as part of his economic stimulus plan has prompted anger among progressives on Capitol Hill and around the country, threatening to overshadow a moment of triumph for Democrats this week as they push through a nearly $2 trillion pandemic aid package.
The simmering tension is unlikely to derail the plan, which is packed with longtime Democratic priorities including enhanced federal jobless aid, direct payments to Americans, and hundreds of billions of dollars for states, cities and tribal governments suffering fiscal shortfalls. But the liberal angst over the measure, coming little more than a month after Mr. Biden took office, foreshadows larger fights to come over the rest of his agenda, and a difficult road ahead for Democrats in navigating the divide.
It also risks muddling what the White House and party leaders had hoped would be a clear and politically potent message on the stimulus measure, which Democrats are working feverishly to portray as a momentous and broadly popular accomplishment that Republicans should be scorned for opposing.
Instead, some of the loudest progressive voices in recent days have been focused on demanding that Mr. Biden and leading Democrats push harder to rescue the minimum wage increase proposal from a procedural thicket in the Senate by changing the chamber’s rules. Their pleas ignore the fact that the proposal does not have enough support even among Democrats to pass."
That's right; the filibuster will not be broken and/or Senate rules changed for the $15 minimum wage. Nor would there be any point in doing so.
Moreover, the next big thing after the relief bill will likely be another spending bill--the recovery/infrastructure bill--to be passed through reconciliation as well. And no, it will not include the $15 minimum wage either. But that's OK. That second bill could be a real doozy in terms of moving the economy and the country in a way that progressive Democrats should be ecstatic about. Greg Sargent:
"The New York Times reports that some Democrats are already thinking about how to move a far-reaching infrastructure repair agenda, if they can get the economic relief bill through the Senate and into law.
This coming debate may be uniquely positioned to expose Trumpism’s bankruptcy as it sinks into QAnon-ification, cultishness and mythologizing about the Lost Cause of the stolen election.
First, such rebuilding is exactly what Trumpism was supposed to do. Just after Trump’s 2016 victory, his adviser Stephen K. Bannon famously vowed a “trillion-dollar infrastructure plan” that would realign the working class behind populist nationalism, launching an “entirely new political movement.”
That never happened, largely because Trump mostly adopted conventional GOP plutocratic economics. Yet as the Times piece reports, proponents of a new infrastructure effort are now envisioning large government investments as a way to “help the economy run more efficiently, leading to stronger growth and faster wage gains for workers.”
Delivering successfully here would establish that it is progressive economics — not Trumpist nationalism — that offers the truly concrete approach to rebuilding the country in a way that lifts the fortunes of workers and promotes the common good."
So don't sweat it, $15 minimum wage fans. We'll get to it eventually--or as close as possible under current political constraints. But there's a lot of other stuff going on which is actually more important.

President Biden Wants You to Join Your Union!

Well, he didn't exactly say that but then again it's not clear FDR actually made such a statement either. But Biden, in his video message relating to a unionization vote at an Alabama Amazon warehouse made clear where his sympathies lie and warned Amazon not to try to manipulate the vote. That's a big deal by the standards for American presidents for a very long time.
We'll see if Biden keeps it up so the headline here really does seem the message to workers. If so, that could easily be one of the most consequential parts of Biden's Presidency. Right now, the private sector unionization rate is only 6.3 percent, so there's a very long way to go. But perhaps Biden's intervention is a harbinger, at long last, that a more favorable environment for union activity has arrived.
May be an image of 2 people, including Dipankar Samanta and text that says 'I WANT YOU To Join Your Union If I went to work in a Factory, the first thing Id do would be to join a union." Franklin D. Roosevelt'

Monday, March 1, 2021

I Believe I May Have Mentioned This Before....But Just Do Popular Stuff!

Perry Bacon Jr. at 538 points out that Democrats seem to have three general factions about how to move forward legislatively:
* Camp No. 1: We are in a Democratic and democratic emergency.
* Camp No. 2: Maybe there’s an emergency, maybe not; either way, just do popular stuff.
* Camp No. 3: We can and should work with Republicans.
I'm a camp #2 man myself. As you can see from the graphic below the $1.9 trillion covid-19 relief bill is a good start on that strategy! This bill will be passed through reconciliation. The Democrats also have an open path to passing a second large spending bill on recovery/build back better through reconciliation later this year.
After that....well, the filibuster will likely have to be dealt with. With all due respect to the camp #3 folks, the likelihood of finding 10 Republican votes in the Senate to do genuinely worthwhile legislation seems low. Not that it's not worth a good faith effort but just very unlikely to be successful.
So the path forward for Democratic priorities outside of the two big spending bills (which I hasten to say are hugely important) likely entails breaking the filibuster around a really popular piece of Democratic legislation. That needs to be carefully chosen, given the state of play in the Senate and the sensitivities of the political actors involved, but it seems an inevitable move forward at this point. It won't be easy but the time may have finally come.
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What American Foreign Policy Should Really Be Focused On

At The Liberal Patriot, John Halpin and Brian Katulis consider the latest Pew Research findings on foreign policy public opinion and wonder why elites are so clueless about Americans' most pressing concerns.
"Pew is out with another fantastic public opinion study examining the contours of American attitudes about foreign policy at the start of the Biden administration. The new study contains rich findings throughout. But what is striking to us is how the two issues that most divide Democrats and Republicans in terms of priorities—climate change and immigration, respectively—are the main focus of political discussions in elite circles these days rather than the issues that most unite people—protecting American jobs and protecting the homeland from terrorist attacks, along with steps to stop pandemics."
No photo description available.