Public Policy

Beyond Protection vs. Liberalization - Thinking Historically About Trade and Policy

Note: this is a cross-post from The Realignment Project. Follow us on Facebook!


In about two years of blogging at TRP (and another two years’ policy-blogging elsewhere), I’ve never discussed trade. It’s not because it’s unimportant, because trade is clearly a major issue within economic policy and politics, but rather because of when I came of age politically. In 2001 student politics, the free trade vs. anti-globalization/protectionism debate seemed remarkably deadlocked and somewhat sterile. Twin camps of policy contenders required allegiance with either side, and I found myself unhappy with the analysis and debate and more drawn to questions of domestic economic policy.

However, in the wake of the Great Recession and the increasingly-urgent need to reassess the structure of the U.S economy, I can’t avoid it any longer. The trade question isn’t the whole of our economic problems, I think it can be exaggerated in a way that obscures a more important class conflict inside nations. And yet, the global balance of trade – between Germany and the rest of Europe, between China and the U.S, and so on – is clearly out of whack.

Time for a Bailout for the American Workforce


Note: this is a cross-post from The Realignment Project. Follow us on Facebook!


As the third year of recession ends, the scale of the task of undoing the social and economic damage of the recession is now made plain. It is already well-known that 15 million Americans are officially unemployed, with another 15 million unofficially unemployed. But the scope of the recession goes far beyond their ranks  - more than half of the U.S. labor force (55 percent) has “suffered a spell of unemployment, a cut in pay, a reduction in hours or have become involuntary part-time workers” since the recession began in December 2007.

The widespread nature of workers' declining fortunes, even if they have not suffered unemployment, explains why it is that one-third of U.S working families are now low-income (i.e, under 200% of poverty), one lost paycheck, one illness, or one accident away from disaster. But as I have noted before, the underlying illness of stagnant wages and a weak labor market have existed before - the one-third figure discussed above is only 7% higher than before the recession, and during the previous recovery in '02-05 we saw that figure increase, never falling below its 2007 level.

A rescue is deeply needed.

Fiscal Policy By Dummies: Looking at the Deficit Plans from a Progressive Standpoint

Note: this is a cross-post from The Realignment Project. Follow us on Facebook!



Following the on-going drama of the Deficit Commission - which just adjourned without even voting on its own proposal, and which never came close to getting the necessary votes to trigger an up-or-down vote in the Senate - has been rather painful. Especially in light of the Republican takeover of the House and the ongoing dispute over extending the Bush tax cuts and raising the debt ceiling, the grip of austerity thinking seems paradoxically strong and weak at the same time, pervasive enough to be omnipresent within the media yet not actually persuasive enough to get anyone to vote for anything they dislike.

However, there is one point that needs to be cleared up - behind the banalities of "living within our means" and other balanced-budget platitudes, there is ideology at work. The budget is not just a technical issue, but a moral document - it is a choice between a high road or a low road to the future.

Industrial Policy Can Work - Rethinking the Auto Bailout

Note: this is a cross-post from The Realignment Project. Follow us on Facebook!


How NOT to Do It



When the first generation of historians begin their work on the Obama Administration, one of the more puzzling chapters will be the winter of 2010, when a major sea-change occurred in public policy that neither the administration nor the media were particularly eager to spend that much time trumpeting - namely, the revival of industrial policy after forty years or more beyond the pale of the Conventional Wisdom, as demonstrated by the success of the American automotive industry rescue.

While we wait for that generation of historians to get started being born, we can at least begin to learn some lessons about how and why the Big Three rescue worked when other industry bailouts have been such miserable failures.

Creating Budget-Neutral Jobs Policy in an Era of Irrational Austerity

Note: this is a cross-post from The Realignment Project.


Recently, the Senate attempted for the second time to pass a small jobs bill. The American Jobs and Closing Tax Loopholes Act of 2010 – which would provide for an extension of Unemployment Insurance, COBRA health insurance subsidies, $24 billion in aid to states’ Medicaid programs to prevent deficit-driven layoffs, partially paid for through closing loopholes that benefit the wealthy – already passed the House three months ago, but is stalled in the Senate. The fact that the bill failed with 56 senators voting in the affirmative not only sharpens the ironies of the anti-democratic nature of the Senate, but also shows that we’re stuck in the middle of a full-blown austerity craze.

Hence Senator Hatch’s call for the unemployed to be drugs tested - for Unemployment Insurance that they have paid for through years and years of contributions – and even supposedly liberal Senators like Dianne Feinstein suggesting that “people just don’t go back to work at all” if UI eligibility is extended beyond 99 weeks. On the simplest level, this is insanity – there are about thirty million unemployed (including both official and unofficial) and only three million job openings. Drugs tested or not, the 27 million left over don’t have a choice of whether to go back to work.

Unfortunately, to paraphrase Keynes, politics can stay irrational longer than the unemployed can stay solvent. Austerity is in full political swing, and unlikely to improve, except in the improbable scenario that Congress remains Democratic in the midterm elections and the Senate Democratic Caucus follows through on their threats to reform the filibuster. A public policy that can only work in optimal circumstances isn’t worth much, though, and there are still ways to move forward on jobs despite being lumbered by irrational budget-neutral burdens.

A Defense of Public Sector Unionism - Part the Second

In part 1 of "In Defense of Public Sector Unions," I concentrated mostly on the ideological side of public sector unions - both why the existence of public sector unions is troubling to some progressives, and why ideologically progressives should support public sector unions. However, in the comments on the various sites where part 1 was cross-posted, one of the frequent themes of discussion was a request for some hard numbers to prove that public sector union workers aren't the goldbricking, featherbedding "thugs" they're made out to be.

So let's talk numbers.

A Defense of Public Sector Unionism - Part the First

Note: this is a cross-post from The Realignment Project.



There is something strange about the Democratic Party’s love of attacking parts of its own coalition. Every political party has divisions inside it, but disagreements between factions and interest groups are usually solved through negotiation, power-sharing, and the like. The Democratic Party is highly unusual in the level of existential opposition it’s willing to engage in – the infamous “Sister Soljah” moment, the bitterness of the Rainbow Coalition vs. New Democrat conflict that arguably lasted well into 2008, and so on.

However, there’s nothing quite as strange as the loathing of certain parts of the Democratic Party for the very existence of public sector unions.

What Makes a Jobs Bil Work? (A Job Insurance Supplement)


Up until a week ago, the prospects for a second round of economic stimulus looked bleak; an ominous coalition of Senate moderates (the same folks who shrank the stimulus and cut out Pelosi’s teacher preservation program, and who’ve tried their level best to stop the health care reform effort in its tracks) threatened to force the U.S government into default unless Congress agreed to a deficit-reduction committee with authority over Social Security and Medicare, and President Obama responded by talking up deficit reduction in his next budget.

And then the October jobs report came out, showing unemployment rising over the magical 10% level that signals political disaster in a midterm election. Suddenly, President Obama began to talk up a December “jobs summit,” and Senator Reid announced that he’s pulling together a pre-election jobs bill.

This sudden momentum is welcome, but if we want to significantly reduce unemployment, and thereby protect our Democratic Congress at the same time, we need to be very careful about what goes into this jobs bill.

Virtues of the Public - Part 4 (Power of the Purse)


For earlier parts in the series, see here and here.

In the history of public policy, like in other disciplines, sometimes the most fascinating topics are the most ordinary, the most overlooked. The things we don’t really notice can be the most powerful influences in our lives, because they can function unseen. And that brings us to the topic for today’s post.

We grumble about taxes, we handle money every day, but we don’t really think about what the power of the public purse means.