Robert Reich's I'll Be Short 1

I started Robert Reich's 2002 book, I'll Be Short: Essentials for a Decent Working Society.  This book was published in the year that Reich was running for Governor of Massachusetts, as a Democrat.  But Reich did not gain the Democratic nomination, and Republican Mitt Romney was elected Governor of Massachusetts.

In my latest reading, Reich was talking about issues that I have discussed before on this blog, as I've gone through other books: technological advancement and trade getting rid of jobs, the decline of unions, disparity of wealth, etc.  Jobs are lost and wages are depressed, as corporations increase productivity and get more profits for CEOs and shareholders.  (UPDATE: Reich actually did not mention increased productivity, as far as I can remember, but he did mention more profits.) Reich says that he is not for turning the clock back, but he recognizes that the decline of the middle-class and growing disparities of wealth are a problem.  In the 1950's, Reich says, his parents' clothing shop made money when the wages of local factory workers went up, for the factory workers had more money in their pockets to spend.  

It will be interesting to see how Reich proposes that we deal with this problem.  I doubt that he is for decreasing productivity, but is he for limiting the amount that CEOs and shareholders can make?  But, without a profit motive, would CEOs take risks, and would investors invest?  That's a good question, and people of different ideological persuasions would offer different answers.  In my opinion, even if the government takes more in taxes from profits, CEOs and investors are still making more than they would make by not taking risks and investing, so an incentive could still be there. 

One topic that Reich mentions that I was going to address but did not in my write-ups on Paul Krugman's The Conscience of a Liberal was the minimum wage.  On pages 261-262, Krugman attempts to refute the argument that raising the minimum wage will increase unemployment.  He refers to a study by David Card of Berkeley and Alan Krueger of Princeton that says that recent increases in the minimum wage did not result in job losses.  Krugman also notes that the state of Washington has a higher minimum wage than Idaho (higher by three dollars), but The New York Times says that "Small business owners in Washington...say they have prospered far beyond their expectation[, and] Idaho teenagers cross the state line to work in fast-food restaurants in Washington" (the New York Times' words on page 262).  Krugman acknowledges that a fifteen dollar increase in the minimum wage could result in a loss of jobs, but he doubts that a modest increase would do so.

I'd like to close this post by quoting what Reich says on page 21.  "Hey, Reich, you might say.  You were in Washington.  You were a cabinet member in the Clinton administration.  Why didn't you and your friends fix this problem?  Well, we did raise the minimum wage, implement the Family and Medical Leave Act, close sweatshops, get millions of Americans the skills they need for better jobs, and get the economy back on track.  But we didn't get everything done by a long shot."  I've long wondered what exactly Reich thinks about the Clinton Administration, since he was more progressive than some of the prominent people who served in it.  Maybe I'll one day read his memoir about that time, Locked in the Cabinet.  What I got out of that passage in I'll Be Short, however, is that he believes that the Clinton Administration did good things, but it was not enough.

Paul Krugman's The Conscience of a Liberal 8: Party of Ideas

I finished Paul Krugman's The Conscience of a Liberal.  In this post, I'll highlight something that Krugman says on page 271:

"In fact, to survey the current political scene is to be struck by just how well formulated the progressive agenda is----and how intellectually decrepit movement conservatism has become.  As this book was being written, Democratic presidential candidates [for 2008] were discussing plans for universal health care, new approaches to poverty, options for helping troubled home buyers, and more.  Meanwhile, Republican contenders offered no concrete proposals at all----they seemed to be competing over who sounded most like Ronald Reagan, and who was most enthusiastic about torture.  To the extent that the Democratic Party represents the progressive movement, the Democrats have become the party of ideas."

I don't think that this assessment is entirely fair, but I can see where Krugman is coming from.  Why don't I think that Krugman's assessment is entirely fair?  Because, in my opinion, there have been times when movement conservatism has generated ideas, particularly when it comes to tax reform.  Moreover, I remember even some of the Republicans in 2008 talking about why health care was so expensive and how to cut costs.  And, four years later, is not Newt Gingrich the king of ideas?  And was not Mitt Romney an idea man in his first Presidential debate with Barack Obama?

Why can I see where Krugman is coming from?  Because, during the 2008 Presidential election, when we had just been hit with economic cataclysm, the only person I remember who offered a solution that made sense to me was Hillary.  She proposed that the bad mortgages be renegotiated so that people can keep their homes and pay some sort of mortgage over a period of time.  I don't recall hearing any solutions from the Republicans.  But I heard a solution from Hillary.  And, as a Republican at that time, I was upset with her over that, and yet deep down I thought that her idea made sense, and that she did well to have an actual idea for dealing with the crisis.  That's just how I remember it, and my memory may be flawed.  But I can still identify with what Krugman is saying on account of that memory.

Paul Krugman's The Conscience of a Liberal 7

In my latest reading of The Conscience of a Liberal, Paul Krugman refers to a study by Elizabeth Warren and business consultant Amelia Warren Tyagi (who is also Elizabeth Warren's daughter) concerning bankruptcy in the U.S.  Krugman summarizes their findings on page 247:

"By 2005, just before a new law making it much harder for individuals to declare bankruptcy took effect, the number of families filing for bankruptcy each year was five times its level in the early 1980s.  The proximate reason for this surge in bankruptcies was that families were taking on more debt----and this led to moralistic pronouncements about people spending too much on luxuries they can't afford.  What Warren and Tyagi found, however, was that middle-class families were actually spending less on luxuries than they had in the 1970s.  Instead the rise in debt mainly reflected increased spending on housing, largely driven by competition to get into good school districts.  Middle-class Americans have been caught up in a rat race, not because they're greedy or foolish but because they're trying to give their children a chance in an increasingly unequal society.  And they're right to be worried: A bad start can ruin a child's chances for life."

This is very sobering.  And, although Warren and Tyagi wrote this study before the 2008 financial crisis, I'm curious as to whether their findings are in any way relevant to the sub-prime mortgages that led to that crisis.  A conservative lady once told me that the people who lost their homes should not be bailed out because they deserved what they got, for they were greedy, and the Bible condemns greed.  Aside from wondering why a right-wing conservative is suddenly critical of greed, I also question whether we should be so quick to judge those who tried to purchase homes that they could not afford.  Maybe some did so out of greed, but perhaps there were many who were just seeking a better future for their children, and they realized that the best schools were in the areas that had expensive homes.

Paul Krugman's The Conscience of a Liberal 6: "What's Okay with Kansas?"

In my latest reading of The Conscience of a Liberal, Paul Krugman interacts with Thomas Frank's 2004 book, What's the Matter with Kansas?  How Conservatives Won the Heart of America?  In that book, Frank argues that many people in Kansas vote Republican against their own economic interests because the Republican Party exploits social and cultural issues, such as abortion, homosexuality, creationism, etc.

I bought Frank's book, and I may still read it before this year is over and I go on to my "Year (or More) of Nixon" in 2013, in which I celebrate the Nixon centennial by reading and blogging through books by and about Richard Nixon.

Krugman disagrees with Frank.  First of all, Krugman believes that we're heading in a direction in which conservative stances on social and cultural issues are not particularly popular.  Krugman in making this point does not focus on Kansas specifically, but he cites polls that indicate that Americans are becoming increasingly tolerant of homosexuality.  Second, Krugman questions the notion that "religious and social issues...have actually led a large number of working-class whites to vote against their economic interests", for "'Values voters' seem to be decisive only in close races" (page 212).  And, third, Krugman looks specifically at Kansas, where, after 2004, prominent Republicans became Democrats in protest of the religious right.  Moreover, Krugman states that "At the time of writing, Kansas has a Democratic governor, and Democrats hold two of its four House seat" (page 212).  (I didn't know it's House was that small!)

Krugman's book is dated to 2008.  In my latest reading, Krugman talked a lot about how a Democratic majority is emerging, as the country becomes less white and more tolerant.  Consequently, Krugman talks about the Democratic victories in 2006, but his book was written before the Republican triumphs in 2010.  Moreover, the current governor of Kansas, Sam Brownback, is not only a Republican, but a strongly conservative Republican when it comes to social issues.

Is Krugman's analysis dated, then?  He still may be on to something.  My impression is that many voted Republican in 2010, not out of a firm ideological conviction, but rather because they were disappointed about the economy.  I don't think that most of the electorate is hard-core conservative, and so there may be potential for a Democratic majority.  Or there could even be potential for a Republican majority, only Republicans will have to recognize that the white working-class may not be enough in the near future to carry them to victory on a consistent basis.  Republicans will have to show that their economic policies of less government can benefit minorities, such as Hispanics.  And perhaps even a conservative stance on social issues could help them with many Hispanic voters.  I don't know.  That thought would have to be balanced with the realization that many in America are becoming tolerant.

Paul Krugman's The Conscience of a Liberal 5: How the G.O.P. Became the Daddy Party

It's a common cliche that Republicans are the Daddy-party whereas Democrats are the Mommy-party.  That means that Republicans are believed to be tough towards America's foreign enemies and good at keeping the United States safe, whereas the Democrats are regarded as compassionate because of their support for social programs for the vulnerable.  A belief that the Republicans are the Daddy-party especially helped the G.O.P. soon after 9/11.

How did Republicans come to be known as the Daddy-party, even as Republicans characterized the Democrats as wimpy and soft in their foreign policy?  In my latest reading of The Conscience of a Liberal, Paul Krugman tackles that question, but I'll also bring into the discussion things that Krugman said earlier in the book.  According to Krugman, we can see in Ronald Reagan's 1964 speech a conservative view that the U.S. needs to be tough on Communism and that the Democratic foreign policy is weak.  Moreover, Richard Nixon in 1972 defeated George McGovern, and there are many who hold that the "national security advantage" for Republicans goes back to that (page 184).

But Krugman does not buy that, for he argues that Nixon's defeat of McGovern did not radically shape the electorate's view of Democrats as a whole.  Although McGovern lost in 1972, Democrats gained seats in the Senate and "suffered only modest losses in the House" (page 184).  Krugman cites a 1979 poll by the Republican National Committee in which 29 percent of respondents said that Republicans would do better at "maintaining military security" (the poll's words), 28 percent said that the Democrats would, and 21 percent said both.  Moreover, whereas the U.S. military today is regarded as an institution that consists largely of Republicans, that was not always the case, for, in 1976, "a plurality of military leaders identified themselves as independents, while a third identified themselves as Republicans" (page 186).

So what happened?  According to Krugman, there were a variety of factors.  First of all, in the 1980's, when the memories of the horrors of the Vietnam War were not as fresh they were in the 1970's, the sentiment that the U.S. lost the war because of weak civilian leadership gained popularity, as did the image of liberals "disrespecting the troops" (page 185)----an image that Krugman says lacks the support of evidence.  Krugman cites the first Rambo movie in 1982, and the subsequent Rambo movies, as indicators of this trend.  My impression from what Krugman says is that the U.S. in the 1980's was trying to get back its self-esteem after losing the Vietnam War (and yet enough time had passed that Americans had foggy memories about what actually occurred during the War), and so the tough-on-communism stance of conservatives resonated with a number of Americans at that time.

Second, regarding why the military became more Republican, there were different reasons, according to Krugman: military leaders were particularly susceptible to the notion that the U.S. lost Vietnam due to weak civilian leadership, Jimmy Carter was presiding over the "post-Vietnam shrinkage of the military" whereas Ronald Reagan increased government military spending (page 186), and a number of ROTC programs were closing in the northeast even as their number increased in the South, which had become a Republican stronghold.  And Krugman speculates that the military was alienated from the sexual revolution, since the military frowned on permissiveness.

There may be something to Krugman's analysis.  In any case, I do enjoy this book because of this sort of analysis.  Even though a lot of his book contains your typical liberal narratives, there are times when Krugman is quite three-dimensional in his evaluation of history and politics.

Paul Krugman's The Conscience of a Liberal 4: Why Income Disparity?

In my latest reading of The Conscience of a Liberal, Paul Krugman seeks the causes of the vast disparity of wealth in the United States and the stagnation of middle-class income.

Krugman does not think that these things are just a matter of supply and demand.  According to Krugman, some believe that it is.  There is one view that says that technology has rendered a number of manufacturing jobs obsolete, and, when that happens, you have a lot of people competing for the few manufacturing jobs that remain.  When there are only a few manufacturing jobs to go around, and a lot of people want them, then the wages for those jobs either stagnate or go down, since the companies don't have to make the jobs high-paying to attract people to them.    

And then there's another view that blames free trade.  As Krugman states on page 135 in summarizing this view, "We tend to export 'skill-intensive' products like aircraft, supercomputers, and Hollywood movies; we tend to import 'labor-intensive' goods like pants and toys."  The result is that the number of labor-intensive jobs in the U.S. goes down, since the U.S. is importing the labor-intensive products from overseas rather than relying on home production of them.  Meanwhile, because there is foreign demand for the U.S.'s skill-intensive products, the number of skill-intensive jobs goes up.  As Krugman notes, "U.S. trade with Third World countries reduces job opportunities for less-skilled American workers, while increasing demand for more-skilled workers", which "widens the wage gap between the less-skilled and the more-skilled, contributing to increased inequality" (page 135).  Because there is a greater demand for skill-intensive jobs and not labor-intensive jobs in the U.S., the skill-intensive jobs pay much more than the labor-intensive ones.

Krugman acknowledges that these factors contribute to disparity of wealth, but he doesn't think that they sufficiently explain why the disparity is so vast in the United States.  After all, European countries contend with technology and free trade, but income inequality is not as great there as it is in the U.S.  Krugman, therefore, looks for other explanations.

Krugman believes that the decline in unions is highly relevant to the vast income inequality in the U.S.  Krugman says that the Reagan Administration was hostile to unions, and Ronald Reagan's firing of the air-traffic controllers gave a signal for a "broad assault on unions throughout the economy" (page 131).  Unions brought high wages to workers, and they even encouraged non-union companies to offer good wages and benefits because these non-union companies had to compete with the unionized ones for good workers.  When unions declined, middle-class wages stagnated.

Meanwhile, the wages of the upper-income people ballooned.  One reason was that Ronald Reagan as President dramatically rolled back the personal income tax rate and the corporate tax rate.  As Krugman states on page 156, "Both of these measures delivered proportionately large benefits to upper-income households, which paid a much higher income tax rate to start with, and also owned most of the stocks that benefited from lower corporate taxes."  Another reason was that there was a death of outrage over "soaring incomes at the top" (page 145).  In the 1960's-1970's, Krugman narrates, companies did not pay huge salaries to their executives, for they did not want to be perceived as paying their executives a gross amount of money while giving the shaft to their workers; they also thought that such a policy would hurt the company's team-spirit.  But it got to the point where the media was glorifying high-paid executives as super-stars, with the result that companies felt that they had to pay their executives a large amount of money to look good.  And "politicians who might once have led populist denunciations of corporate fat cats sought to flatter the people who provide campaign contributions" (page 145).  Consequently, there was not as much of a disincentive in the 1980's to have a narrow gap between the pay for the executives and the pay for the workers.

Krugman's discussion put a lot of things in perspective, for me.  I'd say that there's truth in his scenario, but also the scenarios that he presents but doesn't entirely embrace.

Paul Krugman's The Conscience of a Liberal 3

In my latest reading of The Conscience of a Liberal, Paul Krugman continues his narrative about movement conservatism.  It's not like a lot of left-leaning narratives about conservatism that I've encountered----the types that romanticize William F. Buckley and Barry Goldwater and view them as more reasonable than today's tea party.  No, Krugman is quite critical of Buckley and Goldwater!  According to Krugman, Buckley wrote in convoluted sentences, and his National Review championed Francisco Franco and white suppression of African-American voting in the U.S. south during the late 1950's.  And Goldwater defended Joe McCarthy and earnestly searched for corruption in Walter Ruether's union, even though Ruether was so squeaky-clean that he "paid his own dry-cleaning bills when traveling on union business" (page 114).

On a couple of occasions, Krugman tries to see where conservatives were coming from.  He notes, for example, that many conservatives during the 1960's were from the ranks of medium-sized business-owners, for these were the types of businesspeople who especially resented union demands----probably because the demands were costlier for them than they were for big businesses (that's just my hunch).  

I'd like to highlight something that Krugman says on pages 122-123, regarding foreign policy:
"In retrospect the hand-wringing over Communist advances looks ludicrous; the Soviet invasion of Afghanistan, in particular, turned out to be the beginning of communism's collapse.  The Islamic revolution in Iran was a real setback, but it's hard to see how an aggressive foreign policy could have done anything except worsen the situation."  Earlier, on page 107, Krugman states: "...in the end, the strategy of containment----of refraining from any direct attempt to overthrow Communist regimes by force, fighting only defensive wars, and combating Soviet influence with aid and diplomacy----was completely successful: World War III never happened, and the United States won the Cold War decisively."

Is a hard-line foreign policy the best approach?  When I was a child and a teenager, the books that I read were largely right-wing, and they criticized U.S. leaders for not having a tough stance against the Soviet Union.  These leaders sought to contain Communism rather than defeat it, I read.  In some cases, the authors of these right-wing books advocated a non-military way to get rid of Communism: simply cut off aid to Communist countries, then they would shrivel up!  In other cases, the authors were clearly open to the U.S. being aggressive militarily.  They supported General Douglas MacArthur's attempt to expand the Korean War into China, for example.  And then there were times when I was unclear as to what exactly these authors thought the U.S. should have done.  Our failure in the 1950's to stop the brutal Soviet suppression of freedom movements in Eastern Europe was cited as an example of us being soft on Communism, but what exactly did these right-wing authors think we should have done?  Gone to war with the Soviet Union?

I'm not the sort of person who thinks that we should go to war over everything in the world that is problematic.  War is costly, in terms of lives and money, and so it should be the last rather than the first solution that we consider.  I'm also not the sort of person who is intent on provoking our enemies.  I'm not in favor of us being wimps, but there's little point to going around making people angrier at us than they already are.  Consequently, I can somewhat see Krugman's points.

At the same time, unlike Krugman, I'm hesitant to regard our Cold War policy prior to Reagan as any sort of success.  I agree with Ann Coulter's point in Treason that Communism was expanding throughout the world, until Reagan came along.  But I don't see Reagan as a belligerent President in his stance towards Communism.  He didn't send American troops to beat up on the Communists, for example, but he supported anti-Communist forces in Communist countries.  And, as Pat Buchanan once said, Reagan did not say "Mr. Gorbachev, I will tear down this wall", but rather "Mr. Gorbachev, tear down this wall."  There were downsides to Reagan's policies, however----some of the anti-Communist forces whom we supported could probably be classified as terrorist in their methods, in that they wrecked havoc and killed innocent people.

In terms of how our foreign policy should be today, I'm not a neo-con who supports the broad use of American force to eradicate radical Islam.  I'm more in favor of us cultivating relationships with moderate Muslims, and also seeking to eliminate some of the problems that get radical Muslims a following.  I think of poverty, and things that we have done that have been insensitive towards the Muslim religion.  I'm not saying that we should combat poverty only by being a welfare state to the world, or that we should suppress the rights of people in America to criticize Islam.  But we should do something to help countries to have a higher standard of living, and we should think before we (say) put U.S. military bases on Saudi soil.

Paul Krugman's The Conscience of a Liberal 2

In my latest reading of The Conscience of a Liberal, Paul Krugman tells a typical left-wing narrative, and yet he also diverges from it, in areas.  Where Krugman echoed the typical left-wing narrative was in his argument that a number of Republicans succeeded in the late 1960's-1970's through exploiting the race issue.  Ronald Reagan when he ran for Governor of California in 1966 was an opponent of a fair housing law.  And Reagan's attacks on welfare----when the Aid to Families to Dependent Children was only a small part of the government's budget----won racist voters, even if Reagan did not explicitly mention race.

At the same time, Krugman acknowledges nuance.  He notes that President Richard Nixon had progressive policies.  He acknowledges that crime was a real problem in the late 1960's-1970's, whereas a number of liberals maintain that Republican appeals to "law and order" at that time were racist.  He argues that the Democratic Party's coalition included the South for some time after the New Deal, since southern states benefited from government programs, and that the Republicans for some time were the progressive party when it came to race.  At one point, Krugman says that Harry Truman was progressive on race for a political reason----because he thought that he could benefit from urban African-American votes in 1948----whereas Bruce Bartlett in Wrong on Race contends that Truman was principled because he stood for African-Americans even when it hurt him politically (see here).

I thought that Krugman's discussion of crime was noteworthy.  According to Krugman, the reason that there was a high crime rate in the inner-cities was the lack of manufacturing jobs there, as these jobs moved to the suburbs.  But Krugman notes that crime came down during the 1990's, when more cops were put on the street.  During the 1960's-1970's, were there attempts to bring jobs to the inner-cities?  Krugman says that the increase in crime during that time shocked a number of liberals because they did not expect for crime to rise after their social justice policies were put into effect.  Maybe there were efforts to revive the inner-city at that time, but they were poorly administered.  As I discussed in this post, one reason that Richard Cheney became a conservative was that need-based assistance to poor areas lined the pockets of local politicians.  But could the enterprise-zones that Bill Clinton supported in the 1990's have contributed somehow to the decline in crime during that decade, by bringing jobs to the inner-cities?

Paul Krugman's The Conscience of a Liberal 1

I started Paul Krugman's The Conscience of a Liberal.

According to Krugman, prior to the New Deal, particularly during the period after the Civil War through the 1920's, the United States had a significant amount of income inequality.  Granted, Krugman states on pages 19-20 that "Urban workers, in particular, saw a vast improvement in the quality of life over the course of the Long Gilded Age, as diets and health improved, indoor plumbing and electricity became standard even in tenements, and the emergence of urban mass transit systems enlarged personal horizons."  But Krugman also says on page 43 that most Americans in the 1920's lacked indoor plumbing, washing machines, private automobiles, and private telephones.

For Krugman, the government at that time was not part of the solution.  Taxes on the rich during the 1920's were not that high.  The government tended to side with management over unions.  And there was hardly any social safety net.  Moreover, Krugman narrates, it was hard to change that sort of set-up through the political process.  The Republicans from the post-Civil War days on largely sided with Big Business, which funded their campaigns.  About the only Democrats who could get anywhere politically were the Bourbon Democrats, who supported less government.  Elections were bought.  Any attempt to redistribute wealth or to set limits on businesses was labelled socialistic, in a time when Americans were especially afraid of Communism (but Krugman acknowledges that some states took steps to limit the excesses of businesses, as when they established worker's compensation and age-old pension systems, and yet some of these laws were struck down by courts).  Meanwhile, populists failed to create a broad coalition.  William Jennings Bryan, for example, focused his attention on farmers in his support for free-silver, which would lessen their debts.  And it was difficult to unite various immigrants, white farmers and workers, and African-Americans into a reform movement.

But things changed with President Franklin D. Roosevelt's New Deal, Krugman contends.  For the first time since Woodrow Wilson, the government now was on the side of unions.  Taxes went up on the rich.  The government for a time controlled wages and prices, and it used that power to elevate the wages of people who weren't paid that much.  There was Social Security, unemployment insurance, and farm programs.  According to Krugman, the reason that American society did not revert back to gross inequality after World War II was that Dwight Eisenhower chose to retain prominent elements of the New Deal.  And the result was not economic stagnation, which many conservatives warn would be the result of unions and high taxes on the rich.  Rather, the U.S. thrived economically.

Krugman seems to think that we can go back to that.  Can we really turn back time, though?  Krugman admits that there wasn't much foreign competition during the 1950's.  Well, there's a whole lot of it today!  And unions and taxes would arguably make us less competitive.  Would Krugman support protectionism to lessen that problem?