Monthly Archive for October, 2011

Here is the chart that may sink President Obama’s reelection prospects:

The median American salary fell to $26,364 in 2010, the lowest real level since 1999. (The wage data includes part-time workers which is why it’s so low.) And there are 5.2 million people who had a job in 2007 but who didn’t earn a penny in 2010. 

Less employment and lower pay is decidedly not the way to win the future. Add in the sharp decade-long decline in total household wealth, and it’s extremely difficult to map out what "recovery" is supposed to look like. The prospect of what I believe is the first generational decline in the standard of living for average Americans is by far the most pressing political issue of the day, or it ought to be.

At the Republican debate the other night, Rick Santorum, of all people, had a very interesting comment which addressed a major underlying symptom of the crisis: 

Believe it or not, studies have been done that show that in Western Europe, people at the lower parts of the income scale actually have a better mobility going up the ladder now than in America.

He’s right. I’ve touched on this before, but here is a chart of relative income mobility among Western  nations:

This means that an American child born into the bottom fifth of the income distribution is more likely to remain there throughout his life than is his counterpart in every advanced European country except the UK. This is not a symptom of the global economic downturn, it’s an American (and British)malady. It’s often said that our system is designed to promote equality of opportunity, not equality of outcomes. But we do neither well.

So, just after citing this important data, in a surprise move, Santorum said that this clearly shows that the U.S. needs to undergo a major expansion of the social welfare state so we can reach Scandinavian-like levels of class mobility and economic dynamism. He then made an impassioned argument in favor of universal health care, free education from birth through university, and generous federal maternity and paternity leave, all paid for through a steeper progressive tax structure and higher rates.

Well, no, not exactly. In fact, in a remarkable real-time display of cognitive dissonance, he sort of came to the opposite conclusion, and started talking about all sorts of supply-side tax cuts for manufacturers:

I believe [the lack of income mobility in America] is because we’ve lost our manufacturing base. No more stamp "Made in America" is really hurting people in the middle.

And that’s why I focus all of the real big changes in the tax code at manufacturing. I cut the corporate rate for manufacturing to zero, repeal all regulations affecting manufacturers that cost over $100 million and replace them with something that’s friendlier, they can work with. We repatriate $1.2 trillion that manufacturers made overseas and allow them to bring it back here, if they invest in plants and equipment. They can do it without having to pay any — any excise tax.

Is this really true? That the collapse of American manufacturing has lead to a decline in income and class mobility?

Manufacturing employment certainly has fallen in this country; however, our total manufacturing output has continued to increase dramatically. This is due to productivity gains and to the fact that Americans work ever-longer hours.

For Santorum’s thesis to be right, European countries with better socioeconomic mobility must have even more robust manufacturing sectors than the U.S. This isn’t true at all, however.

The same forces that have eroded our manufacturing employment base—lower labor costs in Asia chief among them—have done the same for every advanced economy. It’s not like big manufacturers in the U.S. are packing up the plant and relocating to Denmark. Santorum’s prescriptions are incoherent. 

I really don’t mean to pick on Rick Santorum, who has plenty of Google-related problems of his own, and whose election prospects are such that the nation will never be turning its lonely eyes to him. He actually deserves credit for trying to bring attention to the hardening class structure in this country, which really undercuts the Republican mythos of America as a place where people can transcend the unlucky circumstances of their birth merely through various bootstrap manipulations.

Though Santorum acknowledges the problem, the fact that he is wholly incapable of drawing any useful conclusions is indicative of the Republican party’s larger failure when it comes to addressing the concerns and anxieties of the working and middle class. David Frum—almost alone on the right—has been lamenting this failure of his party for a long time. As the steady stream of rotten statistics pile up, Frum reminds us that economic mobility is not our only problem:

Conceptually, you could imagine a highly unequal society with rapid income mobility. You could imagine a society with little mobility, but in which all classes were getting richer at approximately the same pace. America, however, is a society of widening inequality, hardening class lines, and stagnating living standards for most people.

Eventually, sometime, I have to believe that ignoring or obscuring these problems will become politically untenable. We desperately need a two-party consensus in this country that at least recognizes the fissures and deficiencies in our social contract; then we can quibble about the remedies. But we’ll remain in big trouble so long as the spectrum of Republican solutions runs from covering the ears and shouting "American exceptionalism!" to the better-but-awful Santorum line that says if only we cut taxes and slash regulations we’ll be more like Denmark. Actual conservatives in this country really deserve better, and I hope they demand it soon.

The biggest distortion you get from watching presidential primary debates is the idea that the president of the United States is totally unconstrained by countervailing political forces, and that there is no veto point within the system that can possibly stand up to the hurricane force of a tough president who is really serious about getting stuff done.

So you have the GOP candidates at the debate the other night promising all sorts of big crazy unilateral moves, wiping out the whole tax code, getting rid of financial regulation and health care reform, passing constitutional amendments, building giant border fences; and of course they alone will create millions of jobs, achieve national energy independence, produce a compliant Iran, etc. This is all presumably achieved through nothing more than sheer force of personality, or through applying sufficient boldness or toughness or seriousness to the problem, or through the candidate’s professed supernatural ability to build consensus “across party lines” as evidenced by that one time he got someone somewhere to agree to do something. It’s all a very bizarre view of modern presidential power and the legislative process, but I think it’s one that is pretty widely held among both media elites and average voters.

The GOP candidates’ omnipotent view of the presidency is particularly ironic given that since 2009 Republicans in Congress have adopted a (successful!) legislative strategy of using procedural tactics and institutional veto points to stymie the president’s agenda. You’d think the ongoing stellar success of this strategy would give presidential hopefuls a degree of humility before proposing sweeping changes. But it doesn’t.

Sometimes candidates deny that Congress has any ability to influence policy whatsoever. At the debate, Rick Perry told us of his “pretty bold plan” (boldness alert!):

…to put 1.2 million Americans working in the energy industry. And you don’t need Congress to do that. You need a president with a plan, which I’m laying out over the next three days, and, clearly, the intent to open up this treasure trove that America’s sitting on and getting America independent on the domestic energy side.

Basically boldness and plan-creation will be the hallmarks of President Perry’s legislative strategy. Good luck.

When not ignoring Congress altogether, candidates will sometimes appeal to the power of public opinion to get their crazy initiative through. For instance, when challenged on the ability of his goofy and discredited 9-9-9 plan to pass Congress, Herman Cain assured us, “It will pass because the American people want it to pass.” This may be termed the Tinkerbell Theory of Governance, where if only enough people believe something and clap their hands in unison, the belief will manifest itself. It’s a happy thought, but it’s not how the legislative process works.

A fresh example: the president’s Jobs bill. At first glance, there’s a lot to recommend it. The measure contains many proposals that Republicans have supported previously. The president “took it to the people,” hitting the road to sell it retail. The PR campaign worked: Americans now favor almost every single proposal in the Jobs bill; many of the components get 70% or 80% approval, even from Republicans. Should pass easily, right Herman Cain? It didn’t. It was blocked by a Republican filibuster yesterday. How can this be?

Notwithstanding the superstitous notions of the former pizza executive, there’s actually a growing body of research on the link between public preferences and policy outcomes. How much does public opinion affect government behavior? According to a large survey study (pdf) by political scientist Martin Gilens, the answer is: depends on what you mean by “the public”:

I find a moderately strong relationship between what the public wants and what the government does, albeit with a strong bias toward the status quo. But I also find that when Americans with different income levels differ in their policy preferences, actual policy outcomes strongly reflect the preferences of the most affluent but bear virtually no relationship to the preferences of poor or middle-income Americans.

Though of course, being rich and powerful is no guarantee you can effect your preferred policy outcome. There’s a remarkably candid interview in the Washington Post with former Google CEO Eric Schmidt, on the subject of tech regulation and the growing sophistication of Silicon Valley’s engagement with the legislative process and with politicians in Washington. At one point Schmidt says he’s exasperated with Washington’s failure to increase the number of H-1B visas for highly-skilled foreign tech workers:

Now, the following arguments are so obvious, it’s hard for me to believe that anyone would believe that they’re false. These industries are full of very smart people. There are very smart people who don’t live in America. They come to America, we educate them at the best universities, they are smarter than I am, and then we kick them out. If they stayed in the country, let’s just review: They would create jobs, pay taxes, have high incomes, pay more taxes than the average American, and generally increase the GDP of the country…It’s the stupidest policy the government has with respect to high tech.

Then he gives a depressing public choice accounting of why nothing’s ever been done about this obvious problem:

In the current cast of characters, the Republicans are on our side, our local Democrats support us because our arguments are obvious, and the other Democrats don’t—because they don’t get it. The president understands the argument and would like to support us, he says, but there are various political issues. That’s roughly the situation. That’s been true for twenty years, through different presidents and different leaders.

Eric Schmidt has a far deeper understanding of Washington than do most of the GOP candidates. Between amorphous but powerful “political issues” and the inability of average Americans to influence legislative behavior, domestic presidential power is deeply circumscribed.

I know “Candidates promise stupid stuff in primary debate” is not exactly a shocking headline, but I think the sheer scope of stupidity in this case reflects an evolution in the cult of the presidency and the growing power of the executive in other areas. I think this ubiquitous assumption of the omnipotent president is, in part, bleed-over from the extreme deference Congress gives the executive in foreign affairs. You can understand how seekers of executive office and the public might assume that the same power that lets a president wage indefinite war and engage in torture with impunity and assassinate U.S. citizens abroad might transmute somehow to the domestic sphere. We can joke about the silliness or unworkability of some of these GOP proposals, but the assumptions about modern presidential power that animate them are pernicious and should be resisted. With boldness, of course.