The Era of Big Government Being Over Is Over

The era of big government is not over. It was never over (I'm looking at you Bill Clinton). It's still going strong and, in fact, may be getting a second wind. As Larry Summers put it (reported by Albert Hunt in a recent Bloomberg column):

The Republican vow to significantly reduce the size of government is a foolish pipe dream, Larry Summers says, not because of liberal policy aspirations but because of structural economic realities.

At a lunch on Wednesday, Summers, a former Treasury secretary and a leading Democratic economic-policy thinker, explained the substantive as well as political impracticalities of cutting entitlements and defense spending in the years ahead. 

"If we want to maintain traditional American values, government will need to be significantly larger," Summers declared at the event, hosted by the liberal Center on Budget and Policy Priorities.

Significantly larger! That Overton window is moving..... 

And, as Paul Krugman notes, it's not like the Republican efforts to downsize government and cut taxes were ever as successful as they claimed and many liberals feared:

We tend to think of the period since Reagan’s election as a conservative era; even though Republicans controlled the White House only a few years more than Democrats, there were lots of centrist Dems willing to cooperate with R agendas, versus almost no cooperation when Ds held the WH. And one tends to think of the period as a whole as involving tax-and-transfer policy tilting to the right.

Yet that’s not something that jumps out from the numbers. Think about taxes on the top 1%. Yes, Reagan and GW Bush cut them; but both Clinton and Obama raised them. The CBO estimates have some funny fluctuations, driven I think by capital gains: big capital gains raise tax receipts without a corresponding rise in measured income, as I understand it. Still, the overall picture is that at the end of the Obama years taxation of the rich was pretty much back where it was pre-Reagan:

Meanwhile, there were harsh cuts to some social programs — Clinton ended welfare as we knew it — but expansions of others. One simple metric: Medicaid enrollees as a percent of the nonelderly population, via the CDC:

He concludes: "a welfare state supported by progressive taxation has been much more robust than the year-by-year political narrative might lead you to think."

Exactly. Big government never went away and, looking 10 or 15 years down the road, the chances are very good that it's going to get much bigger. As Margaret Thatcher put it in a completely different context: there is no alternative.

Science Fiction Saturday: Lists. Lists, Lists!

Besides asking me for my personal SF recommendations, sometimes people ask if there is anywhere where there are lists of good SF books to consider reading. Is there ever! Look no further than the very nicely-produced Worlds Without End site. There's an entire section devoted to elaborately displayed lists (all those beautiful covers!) of SF books from various sources, including all of the best ones available as far I can figure out. I particularly recommend the Classics of Science Fiction list, based on a meticulous synthesis of critical opinion, and the SF Masterworks list which collects all the books issued by the British firm, Gollancz, in that fantastic series. But there are lots of other good lists, not to mention an entire other section that has complete book lists for all the major SF awards.

Fabulous resource. Highly recommended.

Can You Say "Prime Minister Corbyn"?

The excellent Stephen Bush--whose daily Morning Call email I highly recommend for keeping up on  British politics--has an intriguing article in the latest New Statesman arguing that Jeremy Corbyn should be considered the favorite in the next British election. Think it can't happen--that only bad stuff you think can't happen will happen (e.g., Trump)? Well, think again and read Bush's article. 

Obscure Music Friday: Milton Brown and His Musical Brownies

Most people who are at least vaguely aware of that wonderful musical genre called "western swing" have heard of  Bob Wills and the Texas Playboys. But sadly few know of Milton Brown and His Musical Brownies, a competing band that for my money was better. Brown, with Wills, is generally credited with founding western swing but he died in 1936 from injuries suffered in a car crash so never had a chance to make the impact Wills did. But he was great! Do yourself a favor and give Mr. Brown and his smokin' band a listen.

Hey, Remember White Evangelicals?

While nobody was looking, white evangelicals, once regarded as a fast-growing base group for the GOP, have gone into sharp decline. Meanwhile, the unaffiliated actually are a fast-growing base group, but for the Democrats. Read all about this and lots else besides in the Public Religion Research Institute's massive report, America's Changing Religious Identity, based on over 100,000 survey respondents.

Leading Republican Pollster Ready to Bail on GOP

Kristin Soltis Anderson is a leading Republican pollster--specializing in the Millennial vote--who is pretty close to giving up on her party. Guess she wants to be a winner!

If Unions Are So Popular, Why Aren't There More of Them?

It's a sad fact that union density is going nowhere in this country--that is, nowhere good. Yet, as just-released Gallup polling shows, they are actually pretty popular, with the latest poll reading (61 percent approval) the highest since 2003. 

So why do we have so few unions these days? The simple answer is there's been a a concerted effort by business and conservative political forces to get rid of them. But why has this effort been so successful? Part of the reason lies within the economics profession: the conservative counter-revolution in economics, starting in the 1970's, disparaged the role of unions and mainstream liberal economists lost interest in them about the same time. That left unions' effort to push back against a tilted playing field through labor law reform without a lot of policy street cred. They were easily portrayed as just an interest group out to help themselves.

That's why Larry Summers' latest Financial Times column, in which he forthrightly calls for more policy support for unions and worker power, is arguably more important than the Gallup poll result. Summers is a reliable barometer of the left-of-center conventional wisdom so his views represent more than just the personal opinion of one very influential economist. They suggest that a good chunk of the economics profession--the non-market fundamentalist part--is now ready to see policies that promote unions and labor organization as an important part of the solution to our economic problems. That means the Overton window of "responsible" policy discourse is shifting. And that's a very good thing.

Here's what Summers had to say:

The central issue in American politics is the economic security of the middle class and their sense of opportunity for their children. A pervasive sense of vulnerability and missing opportunity leads to dissatisfaction, reduces faith in government and institutions, diminishes willingness to support the least fortunate, increases resentment towards members of other ethnic groups and fuels truculence towards other nations.

As long as a substantial majority of American adults believe that their children will not live as well as they did our politics will remain bitter and divisive. Middle class anxiety is surely also fed by the slow growth of wages even in the ninth year of economic recovery with unemployment at historic low levels. The Phillips curve — the view that tighter labour markets spur an acceleration of wage growth — appears to have broken down. The Bureau of Labor Statistics just reported that average hourly earnings last month rose by all of 3 cents or little more than 0.1 per cent. For the last year, they rose by only 2.5 per cent. In contrast profits of the S&P 500 are rising at a 16 per cent annual rate.

What is going on?....I suspect the most important factor explaining what is happening is that the bargaining power of employers has increased and that of workers has decreased. Bargaining power depends on alternative options. Technology has given employers more scope for replacing Americans with foreign workers, or with technology, or by drawing on the gig economy. So their leverage to hold down wages has increased…..

On this Labor Day we would do well to remember that unions have long played a crucial role in the American economy in evening out the bargaining power between employers and employees. They win higher wages, better working conditions and more protection from unjust employer treatment for their members. More broadly they provide crucial support in the political process for broad measures such as Social Security and Medicare, which benefit members and non-members alike. Both were at their inception passionately opposed by major corporations….

What can be done? This is surely not the moment for policy to tilt further to strengthening the hand of large employers. Sooner or later labour law reform that gives organisers a chance by seriously punishing employers who engage in illegal reprisals should be back on the agenda. Union efforts to organise non-traditional groups in non-traditional ways need to be encouraged. And policy support needs to be given to institutions where workers have a chance to share in profits and in corporate governance. (emphasis added)

OK, I grant you, he's not exactly singing "Solidarity Forever". But in the world of people who shape policy discourse, this is pretty hot stuff.