Entrepreneur-in-Chief: The New Model City

4 01 2013

Jamelle Bouie, a moderate liberal writer for The American Prospect, tweeted this:

around the same time that Mick Dumke, a left-leaning Chicago Reader reporter, wrote this:
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Labor Markets and the Jolly Monopoly

27 09 2012

I can’t believe I’m having to write this, but after a number of emails, twitter back-and-forths, and this fabulously stupid article by John Stossel at Reason, apparently it is in fact a thing that needs writing.

Critics of unions get easily worked up over the so-called “monopoly” that unions “enforce” in workplaces–their characterization of the requirement that upon a vote of employees, an employer must deal with an exclusive bargaining representative (i.e., a union) and may not cut individual deals. Basically, they say, if you work somewhere that is unionized, you are forced to join the union (this is technically untrue; at most, you are forced to pay an agency fee since the union is required by law to represent you); it is, they call it, “forced” rather than “free” association. Therefore it is the inverse of free association–and therefore it violates one of the most hallowed American rights, found right there in the First Amendment. Unions, unlike firms, get this “monopoly” power that they abuse to force people to pay dues. Outrageous.

Like so many reactionary arguments, it is elegantly simple and obvious until you spend an extra moment to think past the sloganeering.

Yes, in a superficial way unions act like monopolies–the sole “seller” of labor–in a single workplace or for a single employer. But that is only because the employer is a monopsonist–the sole “buyer” of labor. If you’re looking just at a single company, of course there is a sole “buyer” of labor–the single workplace. And if you’re in a situation where there is a single buyer, it only makes sense to allow the sellers to act like a single “seller”–that’s the only way they have equal bargaining power.
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Vacuous Deference and the Affordable Care Act

28 06 2012

During oral arguments on the Affordable Care Act, Justices asked the challengers of the bill if they wanted to see a return to the “Lochner era.” The bill’s challengers strenuously denied this was their aim. The term refers to the era of Supreme Court jurisprudence after the turn of the last century, when the Court repeatedly struck down state statutes regulating workers hours, overtime pay, child labor, and the like, on the grounds that they violate a nebulous “freedom of contract.” The name refers to the case Lochner v. New York, a case striking down a New York statute setting wages and conditions for bakers and confectioners. The Lochner era was characterized close judicial scrutiny of legislatures’ determination of social ills and the best means to address them. In other words, the Justices were concerned that striking down the ACA would set a precedent of lack of judicial deference to legislatures’ political judgment.

I was of the belief that Chief Justice Roberts would not vote to strike down the minimum coverage requirement of the Act as a whole, for two reasons: first, because invalidate a law so hotly debated, that resulted from intense negotiation between massive political and economic interests (not just between parties) in an election year, would forever tarnish his name and his Court as the politicized Supreme Court. Second, because as the Chief Justice, he could by voting with the upholding majority, author the opinion and narrowly limit the holding. These two dynamics certainly won out when weighed against the potential risks and rewards of creating a nebulous line between “activity/inactivity” that the dissent encourages and striking down the law.

Indeed, Justice Roberts hewed to some basic canons in Supreme Court jurisprudence: don’t judge a statute as policy; defer to the legislature’s judgment as to findings of facts and potential remedies; and, if a statutory provision can be considered constitutional in any way, it should stand. In other words, be deferential to the legislature. That deference cuts both ways.

He got the best of both worlds: he upheld the statute, avoiding the firestorm that would have resulted from a murky decision, but also reinforced the Court’s traditional deference to the legislature particularly on its use of the taxing power. Reading the opinion, Roberts’ elan and cunning shines through. Scholars are going to be all over this bad boy for the next decade.

Ultimately, the Court avoided the more exacting “Lochner deference” standard for economic legislation that requires a legislature to prove that their statute address an actual problem, and that the means they’ve chosen will certainly achieve those ends.

That’s good news. The legislature is the most frequently elected body of government, thus the most accountable; and it is the largest, thus most representative. It should be afforded deference in all but a handful of narrow categories of legislation.

It has also become hopelessly manipulated by corporate and cash influence, such that elections are perennially losing efficacy, and lobbyist power neuters what change is made at the ballot box–for an example, look at the Affordable Care Act itself.

Americans largely supported the public option, but it was a non-starter not for electoral reasons but because of the power of a handful of very wealthy and influential lobbies, particularly AHIP, the insurance trade association that made it clear that the public option was unacceptable to them.

In a post-Citizens United electoral landscape, expanding deference to the legislature is not necessarily a victory for progressives. It indicates very little risk for elites. In the Lochner era, the Court was applying minimal deference as a reaction to populist legislation fighting the excesses of capital. In the current era, applying generous deference just enables capital’s excess as it is expressed through the legislature. Deference to the legislature is in other words a neutral value.

What’s more, Justice Roberts’ narrow holding–that the minimum coverage requirement was constitutional as a taxing-and-spending power, not a commerce clause power–makes the jurisprudential effect of the decision even less problematic for the political right. Taxation is always less-than-popular. In the big-cash-as-speech era, expansive deference to Congress’ power to impose and spend new taxes is judicial deference to political poison.

Ultimately, the Court held that the minimum coverage requirement or individual mandate is constitutional not under the Commerce Clause, which gives Congress the power to regulate commerce “among the several States” (Art I, Sec. 8), but because it operates like a tax. If Congress wants to tax you for not having health insurance, a risk-taking behavior that potentially creates costs for others, they can do that. What they cannot do, Roberts says, is use the Commerce clause to induce people to buy a product. The Court held this explicitly.

The government briefed an alternative to their Commerce Clause argument, that the mandate was constitutional under Congress’ explicit power to lay and collect taxes for the public welfare. It was this alternative argument that Roberts accepted. Roberts is winning praise from progressive and moderate commentators for his deference to the political judgment of legislators–but the fact that he accepted this alternative argument means that that deference is qualified. The Commerce Clause is not a near-boundless grant of power for Congress to regulate social and economic relations.

Whether the case was “rightly decided” is not particularly interesting. The act of judicial restraint in not invalidating a statute because it is clumsy was appropriate. As a piece of precedent, the holding that the Commerce Clause does not justify consumer mandates is fairly politically neutral; recall that the individual mandate was originally a conservative idea. The precedent of deference shown to Congress’ taxing-and-spending power tracks with historical treatment of Congress’ taxing-and-spending power (see for example South Dakota v. Dole) and, in the big-money era of electoral wheel-spinning for progressives, such deference doesn’t promise anything new.

On the ramifications of the policy actually moving forward, more to come.





Privatization, Non-Profits, and Disinheriting the Public

26 06 2012

Privatization has been accelerating at break-neck speed (and in ludicrous ways) the last thirty years or so, in part because of the decline in government revenues and the general growth of the neoliberal consensus that assumes the profit motive brings with it ideal efficiency. It is also an efficient means of weakening the labor movement, because employees of a government contractor are covered by a different, considerably weaker, set of labor laws than employees of a state actor.

But privatization isn’t new; in fact, privatization of public services was quite common back in the day, and by back in the day I mean ancient Rome.

The late Roman Republic grew quickly as a result of conquests and voluntary ceding. There was no time to inculcate Roman civic values and grow the necessary institutions to ensure administration along Roman lines. Instead, what the Roman Senate, Consuls, and other governing bodies did to guarantee the provisioning of necessary public services and the gathering of taxes was to contract powerful local men, called Publicans, to provide these services and gather these taxes.

The Publicans in turn grew immensely wealthy with these government contracts, and thus were able to flex significant political muscle in Rome itself, through the buying of tribal leaders in elections and the funding of foreign adventures for ambitious soldiers and politicians. It was a textbook rent-seeking loop.

The privatization craze may be leading to similar results in the U.S. (hopefully without the foreign adventures, although, you know; military-industrial complex). Stories have been popping up with increasing frequency indicating that privatizing the provisioning of public goods is creating wealth, but not, you know, provisioning public goods any more efficiently.

First, here’s Paul Krugman on the privatization of the prison industry–he touches on several of the key points, so I’m quoting at length:
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The Error of an Era: The End of Elections

8 06 2012

The failure of Tom Barrett to beat Scott Walker in Tuesday’s recall election was probably about a lot of things. For social historians of this era, though, it will be this: a miscalculation of epic proportions, an error that defines the post-Citizens United era.

The public rage after Governor Walker instituted his de facto recission of public workers’ collective bargaining rights was palpable and widespread. It was by no means universal, but it brought together lots of people who felt targeted, misled, and who saw the legislation as an existential threat to their economic security and well-being. Wisconsin’s public sector after all is storied–Wisconsin passed the country’s first public worker collective bargaining law–and public sector workers in that state came from all partisan stripes and economic classes.

The direct action that resulted, occupation of the capitol building, was a reasonable response. The decision to turn all of that activist energy into an election campaign was fatally misguided.

I argued, on the heels of the Citizens United decision, that the left could finally admit that elections are not a feasible method of obtaining particularly economic goals, and that it should begin exploring alternative, direct action methods; particularly, occupations, work stoppages, and boycotts:

With the electoral process eliminated as a viable strategy, resources can finally be diverted to organizing at the community and workplace level. All this decision does is remind us that a small number of corporations–by no means corporations generally–have accumulated much too much power and wealth.

On the single issue of collective bargaining rights, hundreds of thousands of Wisconsinites were united on an activist level. Millions more agreed in spirit, if not enough to take any sort of direct action. The conditions were ripe for some kind of direct action that would have forced the government’s hand–a work stoppage, boycotts of public services, occupations of facilities. The millions of dollars and the thousands of hours of activist energy spent on an election campaign, if diverted to direct action, could not only have ground the machinery of the state to a halt, but would also have created a well-organized, on-the-ground organization of activists who have worked together, fought together, and developed invaluable social relationships. The attendant electoral advantage would have expressed itself naturally in November and again in subsequent elections.

Elections are no longer a fruitful means for progressive change. Citizens United cemented in fact something that was already more or less true: the wealthy, both corporations and individuals, have an outsize influence on elections that is nearly impossible to overcome. President Obama’s 2008 election campaign, soaked as it was in Wall Street cash, was not an exception to this fact but an expression of it. Public intellectuals and activists who advocate for elections as a way to achieve any fundamental reform are wrong in every instance. Increasingly, their only arguments will be negative ones–“The other side is worse”–and, with each passing election, we’ll see that even where elections are won, the power of the ultra-wealthy will be such that public relations campaigns and lobbying smother legislative initiatives in the crib.

Corporate power has purchased the electoral process. Pouring any more money and energy into it is not worthwhile at all. It’s over. Volunteering for or giving money to an election campaign is a waste of that time and money in every instance. Debate and discussion about the variable merits of candidates, the positioning of candidates on issues, fundraising, relative strength in different states and among different demographics, is not a serious use of anybody’s time or intellect.

For the foreseeable future, in other words, electioneering and election work–fundraising, door-knocking, blogging, running for office, whatever it is–is in no way progressive or left wing, in each and every instance. To the contrary; it’s essentially the political equivalent of playing the lottery, a habitual distraction predicated on infinitesimally small chances of achieving anything, and in that way it diverts resources from real change and is inherently conservative, biased towards the status quo.

Wealth, or capital, engages in direct action all the time: capital flight and strike threats are the basis for almost every piece of nasty legislation, and every corporate welfare or tax giveback, that state, local, and the federal government have passed for years. All the talk about “increasing confidence” for “job creators,” is a different way of saying appeasing striking capital. It’s the direct action that makes the change. The left for some reason has become hypnotized by chimera of electoral change, and we see the result: even when the left wins an election, they can achieve little, rebalance power not at all, and income inequality and debt peonage grows and grows.





Gas and Cigarettes and Addiction Funding

25 05 2012

So here’s an interesting problem for students of how cities operate.

Public health and public transportation are two of the marquee issues for planners, and they’re intertwined. Land use planners have recently turned towards policies that encourage walkability, bikeability, and “transit-oriented development.” Mayor Emanuel’s administration is currently undertaking an impressive, ambitious plan to introduce more than 100 miles of protected bike lanes, of the type found on Kinzie Avenue between Jefferson and Wells. Decreasing reliance on cars is a public health issue because it makes it easier for people to be active, and decreases vehicle emissions that pedestrians encounter as they move around the city. Similarly, the Affordable Care Act had provisions for public/private community health facilities with a focus on patient outcomes rather than fee-for-service models that merely encourage remedial care.

Two of the main sources of funding for public transportation and public health (particularly as the latter is undergirded by state Medicaid) are gasoline and cigarette taxes, respectively. You can see the immediate problem; the better transportation and health systems are designed, the more they must compromise the source of their funding. With transportation, this creates the most immediate problem: with increased volatility of gasoline taxes and a sharp increase in ridership, ill-equipped public transportation systems need more and more money to handle the increase (the fares are never enough to capitalize increased infrastructural capacity).

A brief by the American Public Transportation Association touches on this problem; as public transportation ridership increases, capacity needs increase even while revenues drop. Because fares will never be sufficient for real expansion of capacity, there’s a systemic knot that can’t be untied without a federal-state-local approach to overhauling the funding system.

Obviously, there’s a similar problem with the vice-and-obesity taxes on things like cigarettes, alcohol, and fast and junk food. Where these revenues are meant to fund necessities–community health care in particular–the fact that the tax exists as a “disincentive” to unhealthy decision making implies the outcomes we want–healthier city living–are not really priorities. The addiction persists.





Student Loans and Clientage

14 05 2012

Mike Konczal, a man after my own heart on most issues, posted a link to an article from the 1980s discussing the student loan system as a recrudescent form of the indentured servitude system that was once used a way to finance the importation of needed cheap labor. It’s a fascinating and prescient analysis, and it also reminds me of another troubling trend that has reemerged as a function of the accelerating concentration of wealth among fewer and fewer persons and institutions.

One of the most interesting things about the American Revolution that we don’t learn about in most high school curricula is the profound changes in social organization and relations that it wrought. Of particular interest to me is the breakdown of the patron/client system, a patriarchal system as old as the Roman republic. The breakdown of that system put stress on the ancient institutions of slavery and patriarchy and culminated in the civil rights movements of the 20th Century.

The patron/client system was so universal as to probably be invisible to the Revolutionary generation; indeed, many of them were practitioners of it, which you quickly realize if you’ve ever read their correspondence. Because of the way property, and through it institutional political power, was held, currying favor with “important men” either personally or through marriage was the standard way young ambitious men (and it was just men) moved up in the world. Before credit ratings and statutes forbidding negative job references without permission, access to the property and influence of important men was the only way, or rather the surest way, to secure the resources necessary to build a business, enter a profession, and be taken seriously in politics and even the arts.

Before the abolition of primogeniture and entail (first abolished by Georgia in 1777), wealth, particularly in the form of property, was difficult to dislodge. Thus the head of a household would inherit a typically undisturbed, massive estate, and the various dependents associated with it: not only household staff and laborers, but also the attorneys and middle managers who ran various enterprises, political allies who owed allegiance in return for appointments to desirable government commissions, and so forth. Communities, even in cities outside of the nascent dense industrial pockets, were structured this way. A young climber would identify himself in part by his association with a particular family and structure his life–his social obligations, clubs, career, education, and of course marriage–based on that association. Association with a family or group of families compelled a type of loyalty that is absent today, requiring from the client fealty to the political and business ambitions of his patron, up to and including whom he could vote for, marry, and entertain.

The immiseration of labor over the last forty years has brought us back to a similar, though much more impersonal, situation. The ambitious young person today, particularly in the professions, has a very narrow range of options for very practical reasons: the financing for meaningful education requires significant debt, and the jobs that allow for manageable service of that debt are concentrated in fewer and fewer firms and sub-fields. Professionals graduate with enormous debt that quickly becomes unmanageable if you do not go to work for a major employer, or have access to significant capital to start your own business.

Unpaid internships are the most stark example of this new patron/client program. Just getting a valued internship often requires connections either through a university that, in turn, requires wealth and connections to get into, or through a familial or social relation. These internships are often necessary to “build relationships,” i.e., curry favor, with one of the small coterie of institutions controlling immense marketshare. They’re also often subsidized by family wealth, reinforcing the representation of socially connected elements of the upper classes in the professions, political institutions, and the arts.

The need for debt to finance education is unique to those outside of the upper classes. In turn, debt places pressure on those individuals to contour their professional practices and social lives to secure favor with the comparably small social cohort that enjoys control over capital and how it is spent.

The result is much different from meritocracy. While not a mirror of the essentially hereditary and patriarchal patronage systems of pre-Revolution America (and pre-Augustine Rome), the debt requirement for access to the only institutions that grant any kind of economic security has impersonalized the patronage system while serving its basic function: to keep wealth within a particular social milieu, with a hefty cost of admission that requires de facto conformity with particular sets of values and norms that contribute to class cohesion.

Here’s a picture of my dog:

From the Liz Claiborne Canine Collection. Moda.