Monthly Archives: January 2014

Inequality, Government Policies, and Yogi Berra Wisdom

SONY DSC

CCNY — Where I Went to School. Part of CUNY

The story which prompts today’s post is a study reported in the Economist Magazine.  It examines “inequality” in countries, before and after taxes and transfer payments. The study originated at the City University of New York (CUNY).   (Unnecessary Disclosure: I received my undergraduate degree from CUNY, actually its flagship campus, CCNY).

The story has some implications for the elevation of inequality as a public issue by President Obama in his State of the Union speech last night, and to earlier statements, by the President, the Pope, and many others, along these lines. Here is the Economist story: http://www.economist.com/blogs/democracyinamerica/2013/11/inequality-america 

As the story details, the CUNY professors first measure income inequality after the government has taxed its citizens and used some of the money for “welfare” and “safety net” programs.  They measure the inequality by computing a “Gini Ratio.”   The higher that number (between 0 and 1), the more inequality.  The Gini Ratio has been around and used by economists for a very long time.  I first learned about it in an ECON 101 class in 1968 at CCNY.

Then the CUNY profs looked at what inequality would have been without those tax and transfer policies.  The result is a reasonable, if imperfect, measure of how much governments do to minimize income inequality.

Not that there aren’t some problems with the data.  One red flag:  The data used by the author is from the early to mid 2000s; so it does not include the effects of the Great Recession nor differences in the policy responses of the countries after the 2008 crash.

We know, for example, that inequality, based on many measures,  has increased in U.S. since 2008.  The Federal Reserve’s “quantitative easing” policy has helped boost equity markets, which has generally been more beneficial to upper income people.  I don’t know what has happened with inequality in other countries over that time.

As confirmed by many other studies, the CUNY report shows that the U.S. leads all advanced economies in post tax and transfer inequality.  Perhaps surprisingly, the U.S. is not an outlier when you examine pre tax and transfer income inequality.    In other words, (free) market driven forces don’t seem to foster much more inequality in the U.S. than elsewhere, according to the CUNY findings.    But other countries apparently do more with public policy to protect people who don’t fare well in the free enterprise system.

One obvious conclusion that might be drawn from the study is that more spending on income transfer programs and more shifting of taxes from lower to higher income people – i.e., more policy driven re-distribution  — reduces inequality.  That should not be a surprise.

Of course, there are fierce ideological differences about redistributive policies; and a lot of differences about how much they harm (or help) overall economic growth, and the size of the total pie to be sliced up and distributed.

The Economist story (based on the CUNY research) reminds us that the few (potentially effective) things government can do to enable lower income folks to be more prosperous,  are very difficult to accomplish, either because the political support is lacking or collateral damage is (or is believed to be) too high. There is also (collateral) damage of not acting.

In addition to major changes to tax and transfer policies, changes to both International and Domestic Free Trade policies, are two other things government can do to move the needle on wage and income stagnation.   The International side of this would have to include an end to currency manipulations (thanks again to Alex McLaughlin for the reminder)  by our major trading partners, which make their goods artificially cheaper here and our’s more expensive abroad.

Changes on the Domestic Free Trade side would involve creating strong  national labor, as well as tax and industrial policy, standards covering all the states.  That ain’ going to happen any time soon, without a massive change in public opinion, and a different Congress and Supreme Court.   Besides, there are also legitimate collateral damage issues here.

Notably, President Obama did not really suggest any blatant re-distributive policies in his State of the Union Address on Tuesday.    At least I did not hear them.  I am sure that his opponents did, whether he said them or not,   Yes, he proposed some changes to transfer policies  — a modest increase in the minimum wage and restoration of lapsed unemployment insurance benefits.  Both of these are marginal and will move the needle only a little for relatively few people.

Also, I did not hear the President mention anything about raising taxes on the rich, this time.  Did I miss that?   And the only mention of Free Trade was a pitch aimed at fast tracking the Trans Pacific Trade Pact.  He may have also said something about FAIR Trade, to acknowledge skeptics in both parties who believe that NAFTA style Free Trade has been harmful.    But significant or game changing transfer payment, tax code, trade and labor policy changes were notably absent.

The President is a pragmatist, to the chagrin of Democrats on his left.   Those on his right think it was all he could do to not quote from the Communist Manifesto.  So it goes.

The President did talk about education and training as a remedy for wage stagnation. That plays better with conservatives and many others, who prefer policies which aim to improve “opportunity” rather than “outcomes.”

Education and training reforms are worthy.  But, unless they are more finely tuned than simply “lets send everyone to college,”  they will not make much difference, especially if they add to mounds of student debt that are both personal tragedies and a major drag on the economy.

We need a vastly better (and respected) system of workforce training.  And we need to help a lot more poor and (shrinking) middle class folk to learn the high end mathematics, science, computing, and engineering skills needed to play a part in the front end of commerce, the ideas and inventions, which can’t be outsourced to cheap labor abroad.  The President mentioned both of those approaches, even if he couldn’t resist more cheer leading for NAFTA like Free Trade.  (Does he really believe that, or is it part of the accommodation pact with the Clintons?)

50 s robinson slide cloeup wb

Yogi Berra about to be sliced by Jackie Robinson

Getting back to overall economic growth, and the size of the pie to be sliced up and distributed.   We may be on safer ground here if we take Yogi Berra’s observation to heart.  When asked by a waitress whether he wanted his pizza sliced in four or eight pieces, he said, “well, Geez, I don’t think I can eat eight.”   Policy makers ought to keep this in mind when they decide how finely to slice the pie.

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Seahawks as Villains – An Omen of Victory

Not a Sea Hawk, But a Harris Hawk

Not a Sea Hawk, But a Harris Hawk

This is Part II of my celebration of the 2013 Seahawks, and recollections about Seattle’s 2005 Superbowl team.  See Part I, here:  https://olyirv2.wordpress.com/2014/01/23/250/    

These Seahawk posts are prompted by an L.A. Times Bill Plaschke article which broke new ground in Emerald City sports coverage, painting Seattle as the Darth Vader, the villain, in the upcoming showdown with Denver.  A Seattle sports team as mean and nasty is a first.    Here again is the Plaschke article.  http://www.latimes.com/sports/la-sp-super-bowl-plaschke-20140122,0,7596503.column#axzz2rCEB031j 

Seattle sports teams have often been ignored, or dismissed by the national media as lacking the stuff to close the deal.  There is of course some basis for that – the great Sonic and Mariner regular season teams, for example, that failed to close. The picture Plaschke painted was cartoonish.  But it was a welcome sign of notoriety and respect for the 2013 Seahawks. And, to me, an omen of victory.   

The 2013 Seahawks are respected — even likeable — because they are fearless, charismatic, unscripted, electric, confident, cool, and  — here I’ll concur with Plaschke a bit – sometimes brutal, and not so nice.  This is football, after all, not croquet.  Please give me a brownie point for not saying “football ain’t bean bag.”

Compared with the 2005 Superbowl team, the current edition has many more followers and admirers across the country, more positive coverage, and an aura that should keep the refs in Superbowl 48 from (subconsciously) acting like the 12th man for Denver.  Here are some reasons for the atmospheric changes between 2005 and 2013: 

Mike Holmgren versus Pete Carroll:   Holmgren, of Green Bay Superbowl fame, of course brought legitimacy to the Hawks, as does Carroll.  But Carroll is charismatic, animated, svelte, spontaneous, unscripted, and has Hollywood star quality.  Some of these qualities may lack substance, especially the one about Hollywood, but they all play big in contemporary media.  Holmgren was accomplished, respected but definitely not a movie star.

Matt Hasseback versus Russell Wilson:  Hasselback had his greatest season in 2005, posting remarkable numbers with a great QB rating.  He did all of that with a make-shift receiving corp for most of the season, led by the famed Joe Jurevicius.  At one point they played a guy who had been working at the post office, or was it a supermarket(?), just before being summoned to play at Quest Field.  Hasselback should have been MVP that year, rather than Shaun Alexander.  (More about Shaun soon). But Hasselback was quiet, bland, workmanlike, non-electric, and viewed nationally as a Manning or Brady wannabe, not a unique brand. 

On the other hand, Russell Wilson has a distinct brand.   A small (5’10” is an exaggeration)  late round draft pick, fluid, fast, elusive, with an (unexpectedly) remarkable arm that can fire bullets or loft tear drop passes over the heads of tall defenders into receivers’ arms.  He reminds us of Tarkenton, but his scrambling is more fluid and graceful. And Wilson is more a big play quarterback than Hasselback.  The 2005 QB was competent, accomplished and respected.  The 2013 QB has those attributes too, plus electricity, cool, and a brand of his own

Shaun Alexander versus Marshawn Lynch.  In 2005,  Shaun Alexander posted some of the greatest numbers of any running back in the history of the game, including almost 1,900 yards rushing and 27 touchdowns. While that remarkable year came on the heels of several very good seasons, Alexander was never in the conversation about the greatest running backs in history.  You have to be good to accumulate those numbers, but to adapt a phrase from the U.S. President, “he didn’t build it himself.”  He played in front of one of the best offensive lines of his time.  Yes, he was durable; showed up every game for several years in a row, and got 20 to 30 carries a game.  When combined with a great offensive line (Jones, Hutchinson et. al.), and  an exceptional blocking back (Matt Strong), the result was off-the-chart numbers.  He had nowhere near the moves of a Gayle Sayers or Walter Payton, or the power of Jim Brown or Earl Campbell.  His greatest asset was durability and consistency.  Like Hasselback and Holmgren, Alexander was not especially charismatic.

Marshawn Lynch, on the other hand, is as powerful as Shaun (perhaps more so),  a lot faster, has more open field moves, and he can break for a score at any time, from any point on the field.  His numbers are not close to Alexander’s, but then he has missed games and carries due to injury and his offensive line is just ordinary.    Yet, Lynch is known as “The Beast” and when he breaks for a long run , shedding tacklers and running over people, he is characterized as being in “Beast Mode.”   Was there anything  nearly as colorful associated with Alexander?

The Heart of the 2005 Hawks (the offensive line) versus The Heart of the 2013 Hawks (their defensive secondary).  The heart of the 2005 team was the offensive line — Walter Jones, Steve Hutchinson, Robbie Toebeck et. al.,  plus blocking back Matt Strong. They should have received a group MVP, instead of either Alexander or Hasselback.  But MVPs are not for 300 pound linemen.  Even though Jones is surely headed to the Canton, Ohio Hall of Fame, and Hutch has a chance to get there too, offensive lines, no matter how great, don’t excite fans the way backs, receivers, and even the “front four” on defense can.

On the other hand, the heart of the 2013 Seahawks  — their defensive secondary  –  is fast, spectacularly athletic, brutal, edgy, “in your face,” and (mostly) tall and handsome.  The icing on the cake was Richard Sherman’s breath-taking, game saving play in the NFC conference championship game against the 49ers.   Even his startling performance after that on national TV,  though offensive to many, added to Seahawk notoriety and respect (of a certain kind). Sherman is already more of a celebrity than Jones or Hutchinson. (Though Sherman is of course a very long way from HOF consideration).

So, there you have it – why the 2013 Seahawks will do what their ancestors brethren failed to in 2005; i.e.,win the Superbowl, and with panache.

Shirt Button Cameras and Self Driving Cars

What You Can See With Your Shirt Button Camera

What You Can Capture with Your Shirt Button Camera

The two stories which prompt this post made the rounds within a couple of days of each other.  They illustrate the difference between two types of technological advances.

In the one case we have (1) a technological advance we’ve actually requested, in contrast to being brainwashed into it; (2) the new product will improve our lives; and (3) the technology will generally enhance economic productivity.  What a deal!   I am referring to the self driving car. Check out the story in the Wall Street Journal (WSJ):

http://blogs.wsj.com/speakeasy/2014/01/24/ford-taps-stanford-mit-to-help-develop-self-driving-cars/

In the other case, the technology is an example of yet another high tech toy which is enticing, has little value other than to entertain, is annoying to many, and adds nothing to productivity.  Indeed, it’s likely to subtract from it.  I refer here to the tiny, high resolution cameras the size of buttons marketed to consumers,  that can be worn on shirts and blouses, unbeknownst to others, and record everything in sight.  If you want to call attention to them, they come in designer colors which to match your Google glasses.  Check out the story, also in WSJ (online):

http://online.wsj.com/news/articles/SB10001424052702304757004579334690844629788

I disparage only the consumer gadget, play thing version of this technology, not the entire genre which includes, for example, tiny cameras to perform colonoscopies without having plumber’s snakes shoved up our butts…..and which thus enhance our lives (the tiny cameras, that is).

Let me also explain why I am not impressed by new high tech tools that are overwhelmingly just for entertainment.  We have way too many of those.  All they do is replace one form of entertainment with another.  We may embrace them, but we wouldn’t miss them had they never arrived on the scene.

Do you ever recall a time when you couldn’t figure out how to be entertained?   The challenge was, and still is, carving out the time, not finding something to do that was fun.  It’s time savers, like dish washers, which materially improve life, because they give us more time to enjoy ourselves or be creative.  Humans have never been at a loss to find ways of doing that…..given the time.

So, thumbs up for the self driving car, which will save lives, reduce insurance costs, and enable old or disabled people to “drive” their vehicles.  That will be especially good if we can also reduce carbon emissions.  And a middle finger for the tiny shirt button cameras and their purveyors, who are of course free to invent such things in our free enterprise system.  Wouldn’t want to have that any other way.

Seattle Finally Gets Respect

seattle03The newspaper story instigating today’s blog post was a column by noted L.A. sports writer Bill Plaschke, who casts Superbowl 48 as a clash between good and evil, light and darkness, Darth Vader versus Prince Valliant; with Denver as good and light,  and Seattle as dark and evil.  Huh?

If ever there was a case of a guy being brainwashed by the very last thing he’s heard  —  in this case, no doubt Plaschke viewing the Richard Sherman rant on national TV — this is it.

Superbowls bring out the best and worst in sports writers looking for handy and clever metaphors to paint a simple and compelling story for fans.  They have two long weeks in which to produce copy.  Plaschke’s article works if you don’t know much about Seattle or the Seahawks.  Otherwise, it’s a lot of nonsense.  Read it, and enjoy.

http://www.latimes.com/sports/la-sp-super-bowl-plaschke-20140122,0,7596503.column#axzz2rCEB031j

Like Plaschke, I too want to write a ying-yang, dialectic piece about the upcoming Superbowl; but rather than another Bronco-Seahawk side-by-side, I prefer comparing the 2005 and  2013 Seahawk teams, the only two editions of the franchise to reach the Superbowl.

For Seattleites like me (I lived in or near Seattle for 33 years), understanding why the 2013 football team is receiving enormous respect nationally, compared with the 2005 club, is more interesting than yet another orange versus teal or John Denver versus Jimmy Hendrix face-off.

seattle39Seattleites are an insecure lot. They aren’t sure they are a “major league” city (or even want to be one).   But they get upset when not treated like  one of the big dogs.  In particular, they believe their sports teams are not taken very seriously.

Some of this is a collective emotional problem warranting therapy;  maybe a form of mass seasonal affective disorder (SAD). But some of those beliefs have a solid basis in reality. Seattle is, indeed, in the lonely upper left hand corner of the continent; one of several reasons why Boeing moved its headquarters to Chicago. But wait, after the Trans Pacific Trade Agreement passes, Seattle will be at the center of that new trans national universe, with Chicago in the boonies.

As I mentioned, some of the disrespect, even disdain, for Seattle sports teams is real and understandable. For example, why should the rest of the country respect the George Karl 1990s Supersonics teams, and the self destruction of that mini (regular season) dynasty?

Those (first place) Seattle NBA teams lost two first round playoff series against pathetic #8 seeds, the first time highlighted by Dikembe Mutombo writhing in ecstasy at center court in Seattle’s arena.  What an embarrassment!   The second time,  they were mugged by a mediocre, Vlady Divac led Laker team.

Even in 1996 when the Sonics eventually made it to the NBA finals against the Chicago Bulls, comporting themselves well in a six game series, they were almost beaten in the first round by a miserable Sacramento Kings squad.   They were “this close” to a humiliation trifecta.

After holding their own against the Bulls, the Sonics were poised to challenge Chicago’s dominance. But the front office  pulled off one of the worst deals in Seattle sports history, giving the unproven Jim McAllvaine a $33 million contract, while refusing to re-negotiate with team MVP Shawn Kemp.  The franchise collapsed from there. You can trace the lineage, from that deal to the creation of the Oklahoma City Thunder.   Why should the rest of the country have respected the Seattle NBA franchise?

baseball25There are other examples of  Seattle sports teams not taken seriously by the rest of the country, but where the slights where truly unfair and unjust.    One case was the remarkable 2001 Seattle Mariner baseball team, which won a record 116 games, led by Ichiro. That’s an astonishing feat.  Yet, no one remembers them.  Barely two books were written about that team, both by obscure local sports writers.  Can you imagine how many books would have been penned and monuments erected had this been accomplished in New York, L.A., Chicago, Boston?  Even if these franchises, like the Mariners, had lost in the post season,  the paeans would still be pouring out today.  Winning 116 games is really sick. Nothing accomplished over a 162 game season can reasonably be considered a fluke, but was by the rest of the country.

Then there are the 2005 Seattle Seahawks.  (Now we’re getting closer to the real topic).  That team was 13-3; it boasted the league’s most valuable player (Shaun Alexander, who set many rushing records that year), and  was coached by Mike Holmgren, who will likely be inducted into the Canton, Ohio Hall of Fame sometime soon. He had previously won a superbowl with the Green Bay Packers, and gave a lot of credibility, or so it seemed, to the Seahawks.   That 2005 team also had the best offensive line in football.  Arguably one of the best ever, with one Hall of Famer, Walter Jones, and seven time pro bowler Steve Hutchinson, who may also make it to Canton Ohio.

But this fine professional football team was never in the national lime light. No one but maybe John Clayton style wonks and other professors of the game,  mentioned them much all season long, on their way to a 13-3 record. That really annoyed Seattlites; and they were right to feel disrespected.

I vividly recall listening to sports talk in L.A. and San Diego in 2005.  (We had a second home in southern California which I visited often in those years). You could literally go thru an entire four hour dialogue ranging from high school basketball scores through soccer and motor cross discussions, and finally to the Chargers, still without hearing a peep about the first place Seattle Seahawks.

Then, when that 2005 Seahawk team clinched a berth in Superbowl 40,  against the Pittsburgh Steelers, Seattle’s Rodney Dangerfields really had something to cry about.

The long two weeks prior to the Big Game in Detroit was a national tribute to Jerome Bettis, a good Steeler running back,  and a fine NFL citizen, with a nice thirteen year career who would be retiring after Superbowl 40.  Everyone outside Seattle, including the news media, was unabashedly rooting for Bettis and Pittsburgh.  Bettis was good, and deserved honors, but he was no Jim Brown, Gayle Sayers or Walter Payton.  Meanwhile Seahawk MVP running back, Shaun Alexander, had just set records that Bettis never approached at any time in his career. Yet, all I heard on talk radio in California in January 2006 was about how grand it would be if Bettis won a superbowl ring in his final game. I never begrudged him that.

To the rest of the country the Seahawks were to the Steelers what the Washington Generals were to the Harlem Globe Trotters.  Or what Arnold  (“Golden Boy”) Skoland was to Antonino Rocca in pro wrestling:  Foils and patsies.

You think that’s whiney, exaggerated, and delusional?  Not if you watched the ensuing big game in Detroit, with critical calls that negated touchdowns and long gains for the Seahawks.  The Seahawks didn’t have much to show for  outplaying the Steelers over 60 minutes.   That remains the single worst officiated post season football game I have ever seen.   A lot of people, including the officals crew chief for that game, a Mr. Leavey,  practically said so later, and apologized.   Mr. Plaschke would call me a whiner if he deigned to read this article.

But things are much different now for the 2013 Seahawks.  Even if most of the country winds up rooting for the team from John Denver, Rocky Mountain High Country or finds many Broncos more likeable than Richard Sherman, the 2013 edition of the Seahawks doesn’t lack respect or notoriety.  They are taken very seriously. What happened?

seattle48Its not that the City of Seattle is better liked or respected than it was in 2005. Since then, Seattle has identified itself even more closely with one side of our national culture war, so it probably has more supporters, but also more ardent detractors today. Practically everyone agrees it continues to be so obsessed with correctness, process, and inclusion, that it’s remarkable it has remained in at least the second tier of major league cities, with occasional flirtations with the first.

No,  the 2013 Seahawks are respected and notorious because of who they are. And probably a lot more likeable than Bill Plaschke knows or understands.   They are respected and even likeable because they are fearless, charismatic, unscripted, electric, confident, cool, edgy, sometimes brutal, and not always nice.  Its about time.

Part II of this post (forthcoming, and scheduled for July 24th) will detail some of the most pertinent comparisons between the two Seahawk Superbowl teams,  In the mean time, read one of the many (new) short biographies of Richard Sherman and his accomplishments.  Tell me if you think everyone on the Broncos, including the front office, not just Michael Crabtree,  might possibly be mediocre in comparison with Richard.    In fact, most of us reading this blog are mediocre in comparison.   Will be back tomorrow with Part II.

 

 

Can’t We All Just Get Along? Public Prayer in Greece, N.Y.

SONY DSC  The “buried” story here is about Democrats in South Carolina sponsoring a bill which calls for mandatory prayer in the public schools.   Here is one version of this story: http://www.rawstory.com/rs/2014/01/02/south-carolina-democrats-back-bill-calling-for-mandatory-daily-prayers-in-public-schools/

 It triggers reactions about the public prayer case in Greece N.Y. currently under consideration by the U.S. Supreme Court, Galloway vs. Town of Greece.  This is really an old story, going back at least to the days of William F. Buckley Jr., Madelyn Murray O’Hair, hula hoops, Davy Crockett, and the 1962 U.S. Supreme Court case, Engel vs. Vitale, which involved a mandatory public school prayer composed by school officials.  In the 1962 case, the Warren Court’s ruling,  that the practice violated the first amendment prohibition against “establishment of religion,”  ushered-in a fifty year period of legal and political conflict over religion in public life.  

When I heard about the recent, November 2013, argument before the U.S. Supreme Court involving public prayers at Board meetings in the township of Greece, N.Y.,  posing questions eerily similar to the 1962 case, it elicited a sigh, and some feelings of sadness and frustration. 

Here is one version of that story:  http://www.nytimes.com/2013/11/06/nyregion/town-divided-as-prayer-case-heads-to-supreme-court.html?pagewanted=all&_r=0

One of the benefits of growing old is the perspective you gain on issues that have been around one’s entire life.   That’s not a pure benefit.  When the world (or your family) goes round and round on an issue, neither resolving nor agreeing to let it go (in some constructive manner), sometimes for decades (or centuries, as we see in the Middle East), it’s tiresome, disappointing, and sad. 

For me, the disputes around prayer in public schools or legislative bodies – more broadly, the role of religion in public life – is one of those.  It is one of the most contentious issues in today’s culture wars. 

When I first became aware of it as a civics student in the early 1960s through Engel vs. Vitale, I was genuinely puzzled that the adversaries couldn’t just somehow “work it out” without a soul and energy draining legal battle.

My religious and cultural heritage is Jewish,  I had a lot of religious training in my youth.  I had a Bar Mitzvah in 1961, shortly before Engel vs. Vitale.    I attended public school in a Brooklyn community that was about as diverse as you could get, ethnically, racially, and religiously.  That was before all the groups dispersed to live in their enclaves.

I truly can’t recall whether we had anything resembling prayers in school or not.  We did “pledge allegiance” to the flag and to “one nation under god” every morning.   I also recall,  for sure,  that Christmas was openly acknowledged and celebrated in school, along with Chanukah.  True, no mention was made of Islam, or Buddha, Mormons, or Atheism.  But to me in those years celebrating Christmas and Chanukah in class, was real diversity.

My parents thought this (limited) diversity was fine.  They calmly explained  to me that Jews and Christians differed about Jesus (not around whether he was a good man or not) and the basis of Christmas,  and we moved on.  christmas05My grandmother, on the other hand, warned me about Christmas, and about the great harm that would come to me if I attended my best friend’s communion in the neighborhood Catholic church.  My mother told me grandma was generally wise, but not about everything.   I went to that communion, and recently found my friend Robert on Facebook.

I have always thought the Supreme Court went a little too far in regarding activities like prayers in public schools as a governmental “establishment of religion.”   Recall, there is also the “freedom of expression” clause pertaining to religion in the first amendment.   I could see why the Court majority was upset about the prayers being mandatory, non sectarian, and composed by public officials.   Hmmm.  But I thought there should have been some way to mediate all of that, rather than have it settled in a win-lose fashion.  Or perhaps to meditate,  if not mediate. (Is meditation a religious activity?  That too is in dispute in a few public school districts around the country which offer their students meditation and yoga as a health exercise).

On the other hand, I have never understood why so many religious people are not just satisfied to practice religion privately and on their own time.  Public schools in New York City in the 1950s allowed kids to be released a half an hour early each day so they could attend private “religious instruction” (somewhere off campus) at a place of their parents choosing. Not all kids took part in this.

The public school coordinated with a Catholic Church and a Yeshiva in the neighborhood to make this happen. The kids were picked up by the Church and Yeshiva, so the public schools didn’t pay for transportation.  (Whew!).

Yes, we did lose a small amount of educational instruction by letting a few kids leave early.  My parents thought this was a fair solution.  I have no doubt that today there would be litigation around this. BTW, I was not one of the kids who left early.SONY DSC  I completed the school day…and THEN went immediately for two hours of  more study with a Rabbi across the street from my apartment building.  It was too cold to play stick ball anyway or sit on the fire escape counting the number of Henry J’s passing by.

Though I am relatively lenient legally about public displays of religion,  I don’t buy the argument that taking religion out of public life was a major factor, if a factor at all,  in the “disintegration of  family values” or general social decline in America.   Blaming this on the U.S. Supreme Court and atheists (or non Christians) does not make sense to me.  Parents have always had ample freedom and opportunity to raise kids according to their values and beliefs.  The fact that parents have had less time to do that for the last forty years, because full time parenting is not economically practical (possible) for most people, has a lot more to do with social disintegration than the absence of a morning school prayer or overt celebrations of Christmas (or Chanukah) in classrooms.

Sooo, lets get back to the Greece, N.Y. case, which concerns prayers given at the opening of public Board meetings in that town.   Some people argue that any publicly sponsored prayer violates the first amendment to the U.S. constitution. Others argue that its alright, provided the prayer is rotated among various religious orders.  Still others object even to taking public time for a silent prayer or meditation.  How do you make everyone happy?   

Since the good people of Greece, N.Y. have not been able to sit down and work this out, here is my solution.  I propose a technological fix. What else?  Technology and Drugs seem to solve all of America’s problems these days.  

My solution is roughly as follows:  Attach an electronic pad to the arm rest of every chair in the Greece, N.Y., Board room.  Along with the pad comes a tiny ear bug (sanitized after every usage).  No wires; this is a blue tooth.   The pad, which comes with a little hood to ensure privacy, allows anyone to punch in a prayer choice, with options from numerous religions or non sectarian messages.  It also allows you to choose silence, elevator music, soothing water falls, or a recording of Madelyn Murray O’Hair.  (Perhaps one of her legendary interviews with William F. Buckley, Jr. on Firing Line).

At the beginning of each Board meeting, everyone stands for a minute or two (you can choose to remain seated), slips in the ear bug, and punches one of the buttons on the pad.  No one hears anything but their prayer of choice, or no prayer at all.   

Granted, something is lost when prayer is experienced individually rather than in a group;  but, hey, this is America, where individualism reigns; and technology (or drugs) solves everything.   And yes, you do have to give up a minute or two of public time to make this happen, but consider it an opportunity to gather your thoughts or steel yourself for the nonsense to come (at the ensuing Board meeting). And yes, sitting while others are standing is conspicuous, but get over it.  The Affordable Car Act provides health insurance options for therapy.

This technology could be a little costly to install; but to remain revenue neutral,  Greece N.Y.  could cut back on library services, or something like that.   Or maybe impose a user fee – just punch in your credit card number before you choose the prayer.   Can this system be hacked so “they” will know your religious preference AND your credit card number?  Privacy?  Oh that!

 

 

“Race to the Bottom,” and the Twin Doctrines of International and Domestic Free Trade, Part II

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Nathan’s Famous: Hot Dogs for Kings, Queens…..and Workers

The twin philosophies of Free International Trade and Free Domestic Trade provide the legal foundation for race to the bottom. They also shape the incentive structure for corporate behavior in America.  See the January 15th post on this blog for Part I of this discussion, on  Boeing and the recent round of tax cuts and labor concessions aimed at keeping higher paying jobs in Washington State.

The international pressures are the larger problem.  They provide much of the impetus for corporations to play states off against each other on the domestic side of free trade.  Boeing is the perfect example. Boeing wasn’t trying very hard to move its operations to “right to work” states before Airbus competition.

Arguably, other forces are involved. Workforces, transportation, and energy in those states weren’t always able to support Boeing in the past. But improvements and the growing sophistication of smokestack chasers has changed the landscape.

However, the bleeding of good jobs and shrinking of the middle class is not likely to stop without some reasonable compromises and adjustments to those dual Free Trade principles. More and better education is helpful, but all of the states are doing that. And most of the world has caught up with (and even surpassed) the U.S. in education and training.  Countries which haven’t, send their students to America’s finest universities, which are happy to accept the (higher) foreign, subsidized tuition dollars.

The other conventional remedy for the effects of race to the bottom – various forms of income redistribution —  is more direct, and probably more effective than education and training, but only up to  a point.    There are diminishing returns to this approach.  Liberals and conservatives differ profoundly about the “tipping point”  — the point where too much redistribution destroys entrepreneurial risk taking – but there is a tipping point.  My own take on this is: for the past 30 to 40 years, government policies have redistributed wealth from poorer to richer people (in reaction to the prior policies of the two Roosevelts and the Great Society), so that there is some room for the pendulum to swing back in the other direction. 

Nonetheless, without addressing the effects of foreign and domestic free trade, more education appears (no matter how well intentioned) to be a weak response; and income distribution, a band aid, with serious limitations.

A realistic strategy for attacking race to the bottom also has to be informed by history. The thirty year period from the end of World War II,  through the late 1970s, which American liberals view as an approximate model for compassionate capitalism, is glaringly atypical in American history. 

The precise conditions that made it possible were never sustainable; and they are mostly not replicable.  They include the Great Depression, which ushered in New Deal regulatory, tax, and labor reforms, the economic boost from World War II, the mother of all stimulus packages, and America’s emergence from the Great War as the only intact industrial economy in the world. Those years are long gone. America was never going to be permanently in the world’s economic driver’s seat.

Notice that I have yet to offer a concrete proposal on how to adjust the twin Free Trade policies so that workers don’t continue to be squeezed.  (I was going to say “screwed” or “effed”,  but am not sure whether Google or WordPress is letting those words through).     

The reason I’m not (yet) offering specific remedies, is that I lack the smarts.  I have been telling my economist friends for years, that a Nobel Prize awaits one of them, or political scientists (yes, a political scientist, Herbert Simon, once received a Nobel in economics), who can devise a new (legitimate, not junk science) theory of free trade which benefits workers, alongside consumers.   Classic, Ricardian Free Trade, as my erudite colleague, Brian Pollins, from OSU in Columbus points out, is consumption centric. i.e., it seeks only to optimize benefits to consumers across nations (and by inference, across U.S. states as well).

Keep an eye on the Trans Pacific Trade Agreement (TPTA) and efforts to “fast track” it.  There is so much anger about the negotiations for that treaty on both left and right, that it could be a catalyst for change.   TPTA was supposed to address some of the aspects of NAFTA that contribute to the international version of race to the bottom.  But U.S. negotiators have apparently not kept that promise. We hear about efforts to modify those positions.

One of my goals for this blog is to encourage sensible discussions on big issues like this.  Maybe we will be honored by a group Nobel Prize for the answer to race to the bottom.  Lets hope the prize is in economics and not literary fiction. Why is there a Nobel Prize for literature, anyway?  Or even for economics?  Might as well have a Nobel Prize for art.  That will sure be easy to vote on.

Racing to the Bottom”: Airbus Flies Past Boeing in Jet Orders – Part I

French Concorde at Boeing Field

French Concorde at Boeing Field

“Racing to the Bottom”: Airbus Flies Past Boeing in Jet Orders – Part I

Check out this story from the NY Times

This story, from page 6 of the January 14th  NY Times reports that Airbus, Boeing’s main rival in the commercial aircraft industry, received more orders for jets last year than Boeing.  Boeing, however, beat Airbus by a small margin in aircraft “deliveries” in 2013.   Deliveries are a better measure than orders, because many orders are never consummated.   Nonetheless, Boeing and Airbus, as the story points out, are neck and neck in the commercial aircraft market. 

These data support Boeing’s arguments in the latest round of brinksmanship in Washington State.  The threat of jobs leaving the state, resulted in (additional) large tax cuts for the company, as well as wage and benefit concessions by the Machinists Union.  Boeing says its fierce battle with Airbus for market share means it has to cut production costs. There is much truth to that.

On the other hand, as the Machinists Union points out, Boeing has been highly profitable and its shareholders have received solid returns in recent years.  A share of Boeing stock was $119 in October 2013; it closed yesterday at $140.  All of this good financial news was the back drop to the massive tax cuts and Union concessions.   

Also, as critics of the deals cut by State Government and Labor point out, Airbus is somehow able to sell planes at competitive prices, even though it’s manufacturing workers are in powerful unions, located in European countries with strong labor laws.  Labor and liberals in Washington see the recent Boeing events as a defining moment in “race to the bottom.”  Compensation for unionized workers in one of the last strongholds of U.S. manufacturing is headed south (in more ways than one).

So, here are three immediate inferences from this story:

1) Boeing demanded and gained more from Washington State and the Machinists Union than it needed to just remain highly profitable and keep shareholders happy in the next few years.  Boeing wasn’t acting out of character; it behaved like most multi-national and multi-state, profit maximizing corporations; which is not to entirely excuse the company.     

2) Boeing was also looking to the longer term.  The company knows it  faces not just tougher competition from Airbus, but  aggressive aircraft manufacturing programs in China, Russia, Japan, and Brazil, which will  shake up the Airbus-Boeing duopoly.   (Boeing of course fostered some of those programs, i.e., transferred technology, through its outsourcing).

The short story in the NY Times about aircraft orders reminds us about these (mostly) well known conditions in the airliner business. That’s not big news.  But It should also make us aware of some stark realities about “race to the bottom.”   Hence, point #3: 

3) Slowing down, much less reversing, this free fall in workers with middle class incomes, would require changes to the the twin meta policies of Free International Trade and Free Domestic Trade.  You don’t often hear the phrase “free domestic trade”, because easy commerce among our fifty U.S. states was a basic reason for our Confederation, and later our Constitutional Republic; and more importantly it’s in our DNA.  

These twin philosophies provide the legal and economic foundations, as well as the basic incentive structure, for race to the bottom.  It doesn’t forgive Boeing for upsetting the apple cart in Washington, but it does explain what encourages and makes it possible….and why stopping the race to the bottom is so daunting.   Just yelling at Boeing, blaming Washington politicians, or slamming the International Union for “helping locals see the light” is not enough.

A lot more about that in Part 2 of this discussion in a forthcoming  blog post.