Private Affluence and Public Squalor Revisited

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        By almost every objective measure, the United States is a country in decline, as elected officials at the federal, state and local level continue to reduce investments in the public sector that are essential for economic growth and productivity.

 

            In 2012, the Brookings Institute reported that total government employment - i.e., the sum of state, local, and federal - employment had decreased by over 580,000 jobs since the end of the recessionthat officially ended in July 2009, and that state and local governments, confronted by balanced-budget requirements, falling tax revenues, and greater demand for public services, continued to fire teachers, police officers, and other public employees.

 

            In 2011 alone, state and municipal governments cut nearly 250,000 jobs. Between December of 2014 and March of 20015, the number of state and federal jobs continued to decrease according to the Department of Labor's Bureau of Labor Statistics.

 

            In addition, the U.S. Department of Transportation reports that more than 25 percent of America's nearly 600,000 bridges need significant repairs or are burdened with more traffic than they were designed to carry. The Federal Highway Administration reports that  approximately a third of America's major roadways are in substandard condition - and have been significant factor in a third of the more than 43,000 traffic fatalities that occur in the United States every year.

 

            At the state level, the Texas Transportation Institute estimates that traffic jams caused by insufficient infrastructure waste  4 billion hours of commuters' time and nearly 3 billion gallons of gasoline a year because of a lack of public transportation.

 

            A survey by the Association of State Dam Safety Officials has found that the number of dams in the United States that could fail has grown 134% since 1999 to 3,346, and that more than a 1,300 of the damns are considered to pose a "high-hazard."  In addition, more than a third of all dam failures or near failures since 1874 have happened in just the last decade.

 

            According to the U.S. Environmental Protection Agency, aging sewer systems spill an estimated 1.26 trillion gallons of untreated sewage every single year, resulting in an estimated 50.6 billion dollars in cleanup costs.

 

            The Advisory Council of American Society of Civil Engineers assigns the grades every four years for infrastructure based upon eight criteria: capacity, condition, funding, future need, operation and maintenance, public safety, resilience, and innovation. Since 1998, the Advisory Council have been reported to be near failing, averaging only Ds, because of  delayed maintenance and underinvestment.  The 2013 Report Card graded America's cumulative GPA for infrastructure at a D+.

 

           Most recently, a day after the Amtrak derailment in Philadelphia, the GOP dominated House of Representatives voted cut more than $1 billion from President Obama's $2.45 billion Amtrak funding request.  Defending the GOP's vote, a testy Speaker John Boehner declared, "Well, obviously, it's not about funding. The train was going twice the speed limit. Adequate funds were there, no money's been cut from rail safety. And it's hard for me to imagine that people take the bait on some of the nonsense that gets spewed around here."  Left unaddressed by a timid media and craven politicians was any acknowledgment of the data which showed that, while the U.S. spent a miserly $1.9 million to subsidize Amtrak passenger rail service last year, China spent $199 billion maintaining, improving and expanding its railroads.

 

             Despite the virtual collapse of this country's infrastructure and the precipitous decline in  public sector jobs that have historically provided the educational, health, transportation, scientific research/ technical and public safety underpinnings that have been essential predicates for economic progress, most Americans remain oblivious or in denial.

 

            In February of this year, President Obama unveiled a $4 trillion fiscal year 2016 budget that proposed to lift spending limits on national security and some discretionary domestic spending.  A month later, the GOP responded with its plan that would add nearly $40 billion in "emergency" war funding to the defense budget for next year and that contained more than $1 trillion in savings from unspecified cuts to programs like food stamps and welfare. The GOP plan also demanded full repeal of the Affordable Care Act, including the tax increases that finance the health care law.

 

            "A budget is a moral document; it talks about where your values are,"  Representative Rob Woodall, Republican of Georgia and a member of the Budget Committee, piously proclaimed. "We've never had the opportunity to partner with the Senate to provide real certainty."

 

            But if a budget is a moral document, Senator Bernie Sanders correctly notes that the "The U.S. currently spends more money on the military than the next nine countries combined. Yet, despite some 45 million Americans living in poverty, 35 million without health care and veterans throughout the country sleeping out on the streets, the only program that the Republicans want to increase funding for is the military. Why?"

 

            At a time when the public sector is being gutted, Philip Bump reports in The Washington Post that the top 25 hedge fund managers earned more than all kindergarten teachers in U.S. The estamated158,000 kindergarten teachers in the United States, earned an average teacher salary of $53,480, for a collective income of about $8.5 billion for 2012.  By contrast, the 25 top hedge fund managers found that the 25 most successful managers were paid $11.62 billion in 2014.

           

            The continued decline in this country's investment in public goods is directly attributable to the "market-based" mythology that dominates current American political discourse. That mythology, which extolls unfettered Social Darwinism, seeks to minimize the role of government on the theory that, all evidence to the contrary, government is the enemy of prosperity. Not surprisingly, these same minimalists also deny the notion of a  separate public interest or choose to define it, if at all, as merely an aggregation of private interests seeking to maximize their self-interests.

 

        John Kenneth Galbraith published The Affluent Society in 1956. In that important little book, the economist worried that the United States had become a nation that tolerated the existence of "private affluence and public squalor." Little could Galbraith imagine that by 2015 the gap between private affluence and public squalor would grow so large that the United States would come to resemble the Victorian England that Charles Dickens chronicled and ridiculed.  

 


   

Economic Myths and the TPP

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US FTAs

US FTAs (Photo credit: Wikipedia)

            Congress will soon begin formal deliberations on the proposed Trans Pacific Partnership Agreement (TPP). Not surprisingly, the U.S. Chamber of Commerce, corporate America, Wall Street and other members of this country's "entrepreneurial class" enthusiastically support the proposed deal.

              Last week, President Obama granted an interview of Chris Mathews of MSNBC to discuss the TPP. The president was surrounded during the interview with a group of hand-picked, local, purportedly small business owners, all of whom insisted that the agreement would be a boon to their businesses.

              During the interview, President Obama claimed that Senator Elizabeth Warren and other progressive senators such as Sherrod Brown sand Bernie Sanders were wrong on the facts and he insisted that the proposed trade agreement would result in widespread economic benefits throughout the economy and create thousands of well-paying jobs. The president's claim, however, was not backed by any hard economic data, nor was he pressed to explain the reason why if the TPP was such a good deal, the American public and Congress should not be permitted to publicly view and debates the merits of the proposed pact. In addition, President Obama was not why, if the TPP was certain to produce so many well-paying jobs, not one labor union in the United States supports the proposed agreement and why no labor leaders were invited to appear with him during the interview.

             The essence of the president's argument was "Trust me. This is a good deal." 

              For his part, Chris Matthews' analysis of the TPP boiled down to more consumer choices for people like him. A week prior to his interview with President Obama, Matthews, during is "Hardball" show, dismissed Ohio Congresswoman Marcy Kaptur's insightful objections to the TPP and to free trade agreements in general. He commented that he grew up in an era when  America was protectionist and one could only choose between two styles of jeans to buy at a clothing store. Now, since the advent of free trade, all kinds of styles and brands of jeans were available for purchase. Left unsaid, of course, is the fact that the value of consumer choice is meaningless to people whose jobs have been out-sourced because of free trade agreements.

              The hard economic data shows that President Obama and other supporters of free trade are wrong and that the TPP is a bad deal for the United States. In his first administration, President Obama predicted that the South Korean -U.S. Free Trade Agreement (KORUS FTA) would create 70,000 American jobs and that U.S. exports to South Korea would grow faster than imports. The reality has been very different.

              Data compiled by the U.S. Census Bureau shows that U.S. exports to South Korea increased from $38, 820.6 million in 2010 to $44,544.0 million in 2004. Correspondingly, South Korean exports to the United States increased in value from $48,875.23 million in 2010 to $69,605.7 million in 2104. The net effect was to increase - to exacerbate - the U.S. trade deficit with South Korea from -$10,054.00 million to -$25,061.17. In addition, a study by the Economic Policy Institute has predicted that more than 150,000 American jobs will be lost over the next few years as a result of KORUS. 

              The North American Free Trade Agreement (NAFTA), negotiated during the Clinton Administration, is Exhibit Number 1 of failed free trade agreements. In 1993, the U.S. States had a $1.6 billion trade surplus with Mexico, but by 2101 the U.S. trade deficit reached $61.6 billion. During that same time period, the U.S. trade deficit with Canada increased from $ 8.1 billion to $71 billion. Further, the U.S. Department of Labor estimated that NAFTA cost 525,000 jobs between 1994 and 2002.

              In 2014, Public Citizen published a report that identified more than one million jobs that had been lost as a result of NAFTA between 1994 and 2014, and noted that more than 845,000 U.S. workers in the manufacturing sector have been certified for Trade Adjustment Assistance (TAX) since NAFTA because they lost their jobs due to imports from Canada and Mexico or the relocation of factories to those countries.

               Public Citizen also observed that NAFTA contributed to downward pressure on U.S. wages and growing income inequality and pointed to the U.S. Bureau of Labor Statistics that found two out of every three displaced manufacturing workers who were rehired in 2012 experienced wage reductions, with a majority having lost more than 20 percent. The Public Citizen reported, "As increasing numbers of workers displaced from manufacturing jobs joined the glut of workers competing for non-offshorable, low-skill jobs in sectors such as hospitality and food service, real wages have also fallen in these sectors since NAFTA. The resulting downward pressure on wages has fueled recent growth in income inequality."

              From its founding until 1975, the United States enjoyed an overall trade surplus with all other nation-states. In 1975. U.S. exports exceeded foreign imports by $12,400 million. That was the last trade surplus the United States has ever enjoyed. By 1987, the American trade deficit had swollen to $153,300 million and has continued to increase exponentially since then.

             The administrations of Ronald Reagan and George Bush eschewed tariffs and chose to endorse the GATT/WTO free trade policies. Since then, most Republicans, far too many Democrats and the popular media - exemplified by Thomas Friedman and his nonsensical book, The Earth Is Flat - have followed in lock-step.

             Purveyors of conventional economic wisdom invoke David Ricardo's theory of comparative advantage as the premise upon which free trade should be supported.The paradigm, however, no longer explains the anomalies. Patrick Buchanan, no fan of government meddling in the economy, has noted in The Great Betrayal: How American Sovereignty and Social Justice Are Being Sacrificed To the Gods of The Global Economy, has correctly noted, "Ricardo's theory...demands that more efficient producers in advanced countries give up industries to less efficient producers in less advanced countries....Are Chinese manufacturers more efficient than U.S. factories? Of course not!"

            Recently, in addition to opposition from labor unions, the United States Conference of Catholic Bishops (USCCB), issued a statement on the president's proposed TPP trade agreement. While the Conference did not address the issue of whether Congress should grant fast track authority to the TPP, the Bishops stated, "we are concerned about the moral and human implications of the limits and parameters that may be set in the pending legislation for the rapid negotiation of such specific agreements, and their potential effect on human life, human dignity and the right of people to participate in decisions that impact them."

            The Conference's statement of Concern is in keeping with the spirit of Pope Francis who in his Apostolic Exhortation, Evangelii Gaudium ("Joy of the Gospel") warned that, "Today everything comes under the laws of competition and the survival of the fittest, where the powerful feed upon the powerless. As a consequence, masses of people find themselves excluded and marginalized: without work, without possibilities, without any means of escape."

             Historically, the Catholic Church has rejected those economic doctrines that have elevated the primacy of the markets and capitalism over basic human needs. Catholic social thought has insisted that the state exists to serve the needs of the community; not as libertarians and classical liberals would have it, to serve only the needs of the individual. As such, the state should not be viewed as a passive instrument, designed merely to protect private property or to protect rights, but it imposes reciprocal obligations upon each citizen as a member of a political community.

            Today the United States remains the only major advanced economy that has not adopted a coherent industrial policy. Market enthusiasts continue to condemn such notions as socialist propaganda and dismiss any arguments for enlightened protectionism with the mantra, "It's a global economy now." Nevertheless, these enthusiasts turn a blind eye to currency manipulation, labor law violations, predatory export policies and blatant protectionism that is still engaged in by so many countries that are parties to GATT and to subsequent fee trade agreements.

             One also wonders when, if ever, those who still cling with an almost religious fervor to the mythology of unfettered capitalism will admit that their support for trickle-down economics, continued public austerity, and free trade have led to the gutting of the American heartland, appalling economic inequality, wage stagnation and the evisceration of the middle class and the American Dream?

            John Maynard Keynes observed that, "The ideas of economists and philosophers, both when they are right and when they are wrong, are more powerful than is commonly understood. Indeed the world is ruled by little else. Practical men, who believe themselves to be quite exempt from any intellectual influences, are usually slaves of some defunct economist."

            By and large, the GOP has chosen to become the party of William Graham Sumner and
Ludwig von Mises and, given its worldview, the party's leadership consider employees to be only so many interchangeable ("fungible" is the terms their apologists prefer), disposable units of production. Now,  as the party of Franklin Roosevelt also pivots to satisfy the interests of the 1%, American workers and their ever-dwindling union membership will continue to receive the back-of-the-hand and they will be left without a voice or a vote that really matters
.

 

        

 

         


Bobby Jindal, Meet Pope Francis

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       By all accounts, Louisiana Governor Bobby Jindal is an extremely well-educated person who was once considered to be an up-and-coming star of the Republican Party.

 

        Before he became involved in politics, Jindal received a Bachelor of Science in biology and public policy from Brown University thereafter earned a Master of Letters in political science from New College, Oxford, as a Rhodes Scholar.  In 1996, Governor Murphy Foster appointed Jindal Secretary of the Louisiana Department of Health and Hospitals, and in 1999, he was appointed President of the University of Louisiana System. In 2001, Jindal was appointed as the principal adviser to Tommy Thompson, the United States Secretary of Health and Human Services by President George W. Bush.

 


 

        In 2004, Mr. Jindal was elected as to the United States House of Representatives, reelected in 2006 and in 2007, he became the very first Indian-American to ever be elected as a governor.

 

       It's been all downhill since. In February of 2014, Jindal accused President Obama of appeasement and poor stewardship of the economy.  "What I worry about is that this president and the White House seem to be waving the white flag of surrender after five years under this administration," Jindal announced to reporters. "The Obama economy is now the minimum wage economy. I think we can do better than that. I think America can do better than that."

 

        More recently, New York Times columnist Charles Blow reminded readers that, in January of this year, Jindal repeated a preposterous claim that parts of Europe were "no-go" zones because of Muslim extremists and recalled British Prime Minister David Cameron reply to that claim: "When I heard this, frankly, I choked on my porridge and I thought it must be April Fools' Day. This guy is clearly a complete idiot."

 

       Blow also noted that on March 19th of this year Jindal appeared on Fox News to defend his statement that America "shouldn't tolerate those who want to come and try to impose some variant, or some version, of Shariah law." Jindal added that, "In America we want people who want to be Americans. We want people who want to come here. We don't say, 'You have to adopt our creed, or any particular creed,' but we do say, 'If you come here, you need to believe in American exceptionalism.'"        

 

       In a letter to the editor, Jindal took umbrage at Blow's comments and at recent New York Times' editorial that criticized him and other GOP governors for their failures as chief executives of their states. With regard to Jindal, the editors observed, "Mr. Jindal is blithely dealing with a looming budget gap by proposing draconian cuts of $1.2 billion. Even Louisiana Republicans were decrying a 40 percent cut for the state university until Mr. Jindal on Friday reduced that to a 6 percent cut by adjusting certain tax break programs to increase revenues. Mr. Jindal, in a recent interview with Politico, said he was proud that he had slashed the budget by a quarter and the state work force by almost a third. Mr. Walker seems no less proud of the way his new budget

avoids tax increases by relying on borrowing and spending cuts, particularly for state universities."          

 

        Jindal's reply tends to confirm Blow's conclusion that, "The smart-on-paper Jindal increasingly comes across as nuttier than a piece of praline." Jindal first raised the usual right-wing canard about the alleged ideological bias of the newspaper and its reporters: " Mr. Blow's column and your editorial critical of my record as governor provide good examples of how liberals at The New York Times and I have a different opinion on how to measure successful governance and what it looks like in practice."

 

       Jindal continued, "When I campaigned for governor seven years ago, I promised to make the government smaller and the economy larger. That's exactly what I have done. We cut taxes and reduced the size of government. In fact, the government is smaller by more than $9 billion and 30,000 workers. This fiscal responsibility resulted in eight straight upgrades by the major credit agencies. And what did lower taxes do for our economy? They spurred growth. Louisiana now has higher incomes, a larger gross domestic product, more exports, more jobs and more people than we've ever had in the history of our state. That's a record of which I am proud. I measure success not in the prosperity of government, but in the prosperity of citizens."

 

       Left unexplained by Jindal was how cutting $9 billion dollars in public spending improved the quality of life and public service for the average citizen of his state, nor did he explain how eliminating 30,000 public jobs reduced the overall unemployment rate in Louisiana.

 

       Jindal presides over a state that is, by almost all measures, a rural, third-world, low-wage state. The economy of  Louisiana, aside from tourism, some ship building and commercial fishing, is still largely dominated by oil, gas and extractive mining interests  - i.e. the production of minerals, oil and natural gas, sulfur, lime, salt, lignite; petroleum refining; chemical and petrochemical manufacturing - and agriculture. 

 

        According the U.S. Census Bureau data, Louisiana has fewer high school graduates than almost all other states in the union, and the number of adults who have earned a bachelor's degree or better is well below the national average, as is the number of residents who have ever served in the Armed Forces of the United States. In addition, between 2008-and 2012, Louisiana's median household income lagged almost $10,000 below the national median while the number of persons living in poverty between 2008-2012 - 18.7% or almost one fifth of the states' population - was the second largest recorded number among the 50 states.

 

       A Gallup study reported in USA Today, February 27, 2014, descried Louisiana as the "tenth most miserable state" in the union based upon its misery index. The report summarized its findings: "Louisiana residents suffered from limited access to basic needs. Last year, nearly 9% of those surveyed in the state noted they did not have easy access to clean and safe drinking water, while nearly 12% of residents lacked easy access to medicine, both among the worst rates in the nation. Just 61.4% of respondents felt safe walking home alone at night, the lowest rate in the U.S., and significantly lower than the national rate of more than 70% who felt safe in the same circumstances. Louisiana also ranked among the lowest in healthy behaviors because of its residents' high smoking rate and limited healthy eating. As of 2010, there were 229.4 deaths due to heart disease per 100,000 people in the state, fourth-highest nationally. That same year, life expectancy at birth in the state was just 75.7 years, one of the worst figures in the nation."

 

       Although Jindal claims to be a conservative, to the contrary he is, in fact, an exemplar of a virulent and discredited strain of 19th century classical liberalism that still insists, all evidence to the contrary, that a competitive marketplace with minimal government regulation somehow promotes economic growth and protects personal freedom.

 

       Jindal is unable to reconcile this professed belief with his unwavering support for Louisiana's "right-to-work" laws. Those laws - which epitomize government inference in the most basic unit of economic organization - the work place - impair the ability of employees to organize unions and to bargain freely and collectively with management over wages and working conditions. Those laws also make it virtually impossible for agricultural workers - who are often among the most vulnerable and exploited - to ever be able to improve their standard of living through mutual, collective action.

           

       Gov. Bobby Jindal is also unable to explain how, given his rejection of Medicaid expansion under the Affordable Health Care Act, the "free-for-profit - market" is a more efficient way and effective to improve access to health care, when U.S. Census Bureau data showed that in 2011, 886,000 residents -or roughly 20% of the population of Louisiana-  were uninsured.

 

       Jindal's defense of minimalism and unfettered capital is is utterly alien to the authentic conservative political tradition that traces its lineage from the Greeks and Romans  through Thomas Aquinas to contemporary Catholic thinkers.  In his Apostolic Exhortation, Evangelii Gaudium ("Joy of the Gospel"), Pope Francis restated the historic essence of Catholic social philosophy as he called upon people of good will everywhere, believers  and non-believers alike, to work for a better, more just world.

 

       In unequivocal terms, the pope condemned the free market ideology that has become the conventional wisdom in today's GOP: "Just as the commandment 'Thou shalt not kill' sets a clear limit in order to safeguard the value of human life, today we also have to say 'thou shalt not' to an economy of exclusion and inequality. Such an economy kills. How can it be that it is not a news item when an elderly homeless person dies of exposure, but it is news when the stock market loses two points? This is a case of exclusion. Can we continue to stand by when food is thrown away while people are starving? This is a case of inequality. Today everything comes under the laws of competition and the survival of the fittest, where the powerful feed upon the powerless. As a consequence, masses of people find themselves excluded and marginalized: without work, without possibilities, without any means of escape."

 

       The pope lamented that, "Human beings are themselves considered consumer goods to be used and then discarded. We have created a 'disposable' culture which is now spreading. It is no longer simply about exploitation and oppression, but something new. Exclusion ultimately has to do with what it means to be a part of the society in which we live; those excluded are no longer society's underside or its fringes or its disenfranchised - they are no longer even a part of it. The excluded are not the 'exploited' but the outcast, the 'leftovers.'"

 

        Pope Francis concluded that the status quo is no longer acceptable because it is incompatible with human dignity. Passionate defenders of the status quo who are enamored of conventional wisdom - such as Governor Jindal - counter that the pope's call social justice is far too radical and that our economic needs are best served when decisions about the resources of the public are made in private, behind closed doors. 

 

        One would not expect Governor Jindal to agree with Pope Francis, nor would he understand the import of Anatole France's observation that "The law, in its majestic equality, forbids the rich as well as the poor to sleep under bridges, to beg in the streets, and to steal bread." But perhaps he might heed the advice of one sage, Neapolitan political thinker whose writings Jindal possibly read at Oxford - Niccolò Machiavelli: "He who blinded by ambition, raises himself to a position whence he cannot mount higher, must fall with the greatest loss."

 

 

A Death Spiral for the Middle Class

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       This past Monday, Wisconsin Gov. Scott Walker on Monday signed into law a measure that prohibits requiring a worker to pay union dues, striking another blow against organized labor four years after the state effectively ended collective bargaining for public-sector employees.