Mike Konczal

Roosevelt Institute Fellow

Recent Posts by Mike Konczal

  • Four Histories of the Right's 47 Percent Theory

    Sep 20, 2012Mike Konczal

    As you've likely heard, Mitt Romney was recorded at a fundraiser saying that "there are 47 percent who are with [President Obama], who are dependent upon government, who believe that they are victims, who believe the government has a responsibility to care for them, who believe that they are entitled to health care, to food, to housing, to you-name-it [...] These are people who pay no income tax."

    As you've likely heard, Mitt Romney was recorded at a fundraiser saying that "there are 47 percent who are with [President Obama], who are dependent upon government, who believe that they are victims, who believe the government has a responsibility to care for them, who believe that they are entitled to health care, to food, to housing, to you-name-it [...] These are people who pay no income tax."

    The right is splitting over whether or not the 47 percent argument is worth defending. It's important to understand that, while it is true that 47 percent of households don't pay a federal income tax, the distribution of the tax burden isn't what the 47 percent theory is about. The 47 percent theory is all about grand political battles. My colleague Mark Schmitt has one examination of where this theory comes from hereBrian Beutler also investigates the background of the 47 percent meme, and Kevin Drum does a history of the EITC here.

    Digging into different arguments, there are two distinct parts to a good 47 percent theory. The first is who creates and sustains the 47 percent as a political agent. This can't be the bipartisan set of policymakers who wanted to do income support through work requirements as well as expand certain credits, particularly the child credit; it needs to be agents with specific, outside political goals. Those who pay little or no income tax are a coherent group that acts like a special interest or a class. Instead of the young and the old, as well as the working poor moving into and out of the EITC, this group of people is stable enough that it can act as a coherent political class, but it needs to be created and sustained. Who does it?

    The second part of a good 47 percent theory is that the consequences need to be terrible because the stakes are so high. Rather than successfully transitioning people out of poverty and into work, the consequences are negative for our country. But how high are those stakes, and what do they represent?

    Let's start at the beginning. Where does this meme start?

    1. Trickle On Trickle Down: The Lucky Duckies of the Wall Street Journal Editorial Page: Let's look at the Wall Street Journal's opinion page, November 20, 2002, "The Non-Taxpaying Class: Those lucky duckies":

    "Who are these lucky duckies? They are the beneficiaries of tax policies that have expanded the personal exemption and standard deduction and targeted certain voter groups by introducing a welter of tax credits for things like child care and education [...] The 1986 tax reform, for example, with its giant increase in the personal exemption and standard deduction, took six to seven million people off the tax rolls [...] This complicated system of progressivity and targeted rewards is creating a nation of two different tax-paying classes: those who pay a lot and those who pay very little. And as fewer and fewer people are responsible for paying more and more of all taxes, the constituency for tax cutting, much less for tax reform, is eroding. Workers who pay little or no taxes can hardly be expected to care about tax relief for everybody else. They are also that much more detached from recognizing the costs of government.

    All of which suggests that the last thing the White House should do now is come up with more exemptions, deductions and credits that will shrink the tax-paying population even further."
    This argument was developed in future editorals. A few weeks later, in  "Lucky Duckies Again: Look at who won't pay taxes under Bush's plan", the Journal noted that "No doubt the Bush team proposed this tilt toward lower income taxpayers to mute the class-warrior critics, not that we've noticed any lower decibel level."
     
    Who? Interestingly enough, this looks like an internal fight among conservatives and Republicans. That's how Krugman read it at the time, and it seems obvious from that last sentence. The Bush tax cuts are going to be across all families, and the editorial is warning that this is the wrong approach. It should focus just on the rich, corporations, and capital income holders. The editorial is clear that they don't want to raise taxes on those who are exempted from the federal income tax; they just fear that these across-the-board tax cuts will knock a lot of people out of the system.
     
    This was a correct assertion, as this number skyrocketed after the George W. Bush tax cuts. To whatever extent the Bush team didn't want to do this, they felt boxed in politically. As a top Bush administration official later told Ezra Klein, “Do you think we wanted to include a welfare payment to people who don’t pay taxes and call it a tax cut? No. But that’s what we needed to do to get it done.”
     
    Consequences? The editorial warned that this policy would buy them no room with the "class-warrior critics," and that's probably a fair assessment. Repealing the Bush tax cuts has been a consistent goal for Democrats, and their preferred approach is even worse than the Wall Street Journal could have imagined. The Journal just wanted tax cuts on those making over $250,000, and warned about cutting at the bottom end of the spectrum because of the lucky duckies. Now the situation is reversed, and President Obama is looking to keep the tax cuts for those making under $250,000 and repeal the rest.
     
    There's the idea that as a policy matter workers will simply not care for cutting taxes or for tax reform more broadly. This is why Romney can say "So our message of low taxes doesn't connect." But this isn't played up in apocalyptic terms. The editorials seemed more concerned that the federal tax code will retain its progressivity under this tax cut, rather than the lucky duckies initating a new culture war. This is in stark opposition to:
     
    2. The Battle: Right Wing Think Tanks and the New Culture War: Let's jump forward, and see how the expensive, Washington D.C. think tanks react to President Obama. President Obama is a wonky technocrat, and much of his policy borrows from conservative policy of the 1990s (health care) or bipartisan policy of the 2000s (cap-and-trade) or policy that was new and open to debate (post-crisis financial regulations). The new president of the American Enterprise Institute, Arthur C. Brooks, writes a book called The Battle: How the Fight between Free Enterprise and Big Government Will Shape America's Future. How does he think of the 47 percent? Focusing on "long-term strategies to keep the young in the 30 percent coalition," he writes:
    Federal tax policies are ensuring that an increasing number of people in our society will never develop a pocketbook interest in free enterprise. Even as they grow older, develop their careers, and earn more money, many will never pay a dollar in federal income tax because they'll never catch up with an increasingly progressive tax system.
     
    To put a modern twist on an old axiom, a man who is not a socialist at 20 has no heart. But a man who is still a socialist at 40 has no head-or pays no taxes. The current trend will increase the percentage of Americans who are permanent net takers from our society, who use more in public resources than they contribute, and for whom a free-enterprise system of entrepreneurship and limited government holds few obvious personal rewards. In a nutshell, the strategy is to make fewer and fewer people pay all the taxes and bear the brunt of paying for a growing government [...] After President Obama's budget stimulus and the proposed tax changes of 2011 [...] this proportion will increast to almost 47 percent. [...]
     
    Simply stated, in the future there will be fewer and fewer people with "skin in the game." Nonpayers will outnumber the payers. We will enventually reach a threshold beyond which most Americans have no economic incentive to defend free enterprise because it is so far from their interest to do so. The young sympathizers of socialism today may be the grown-up defenders of socialism tomorrow.
    As Mark Schmitt wrote, "this theory that we're headed toward a radical egalitarian state is being developed is the American Enterprise Institute, the oldest of the conservative think tanks and one that, much like Romney, has forsaken the traditional business-minded conservatism of, say, the first President Bush, for hard conservatism in which everything is a grand showdown of incompatible worldviews." And The Battle was the first statement that President Obama was at the vanguard of a new culture war on economic issues. Instead of wanting a government that consumes 25 percent of GDP and has a public welfare state versus one that consumes 19 percent and has a private welfare state, he is the economic equivalent of Robert Mapplethorpe. The right takes this book seriously; the author of the most prominent critical review of the book from the right was canned from his think tank job a month after it came out.
     
    Who? The "30 percent" are the ones behind this expansion of people who don't pay federal income taxes, and they'll continue to expand it. Now before you think you wandered into a Wu-Tang song, we should clarify Brooks' definition of the 30 percent and the 70 percent. The 30 percent are a group of people who "reject the free enterprise system culturally." The free enterprise system stands in "stark contrast to European-style social democracy." The 30 percent "twists equality of opportunity into equality of outcome." Any idea that American liberalism stands in contrast to free market laissez-faire and Marxism isn't explored; the 30 percent are entirely the bad guys, waiting to fundamentally change the country. Jonathan Chait wrote an excellent review of the book here,
     
    Consequences? The big consequence is that this locks young people into socialism and the intellectual space of the 30 percent coalition, building their power. Having never paid taxes, they and others who benefit will think of government as free. So the 30 percent are then capable of continuing to seize more centralized control of the economy and defeat the cultural forces of free enterprise. The Battle is obsessed with how President Obama won in 2008; one conclusion is that the 30 percent doesn't need to win people over intellectually, but just needs to keep enough people not paying taxes so that they'll form a coherent base, particularly the young. But the 30 percent culture allows Romney to note that those who oppose his message "are dependent upon government [and] believe that they are victims."
     

    3. The Hammock. During the Q&A part of this 2011 Paul Ryan speech at Heritage (19m35s), Ryan noted:

    I think it's 49 percent of people who don't pay taxes today, though there are other taxes. Here's the danger I think we have. We're coming close to a tipping point in America where we might have a net majority of takers versus makers in society and that could become very dangerous if it sets in as a permanent condition. Because what we'll end up doing is we will convert our safety net system - which is necessary I believe, to help people who can't help themselves, to help people who are down on their luck get back on their feet - we could turn that into a hammock that ends up lulling people into lives of dependency and complacency, which drains them of the incentives and the will to make the most of their lives.

    Who? The do-gooders who created the social safety net.  It's too generous, too unconditional and not tied enough to work. In a practical way, it is the safety net itself that is creating this condition. Rather than the correct interpretation that people who are not paying taxes are receiving income support that requires work or various, purposely chosen tax credits, this indicts everything from health care to unemployment insurance (which, by definition, you needed to have worked to receive). This is a smart approach, because while going after the "30 percent" isn't really a political platform, dramatically reducing the social safety net is.

    Consequences? It's not clear what "complacency" means in this condition, but dependency means that more and more income will come from the government. As this happens, their ability to take personal responsibility will fall apart. People will be beyond the ability to help themselves, hypnotized as they are by the siren's call of the welfare state. This is why Romney can say "I'll never convince them that they should take personal responsibility and care for their lives."

    4. Takers and Public Choice:
     
    From Reason Magazine a while ago:
    DeMint: Almost half of Americans are getting something from government, and the other half are paying for it. And we're on a track where 60 percent are getting something from government and 40 percent are paying for it. You can't sustain a democracy with that mix.
     
    Reason: Because the 60 percent is going to be voting a bigger and bigger share of the 40 percent's money?
     
    DeMint: It's hard to win elections when you're talking about limited government if the constituents want more from government. You see that phenomenon on display in Greece. When the country is going down in flames, there are still people in the street, demonstrating for more government benefits. We've got to understand we're in trouble, that we don't have much time. 
    Or this from Steve Doocey on Fox and Friends: "Coming up! A controversial question. With 47% of Americans not paying taxes – 47% – should those who don’t pay be allowed to vote?"
     
    Who? The 47 percent themselves. As predicted by Public Choice theory, those at the bottom half of the income scale vote into office people willing to take from the top half of the income scale. Since the average is above the median in income, there's always redistribution from the average to the median to be done. Here the intellectuals of the 30 percent, or the welfare state, or GOP strategy are all secondary; the ravages of democracy are the culprit.
     
    Consequences? The system eventually collapses into itself, as those at the margin work less and also join in demanding more. DeMint alludes to Greece, where the collapse of the government seems almost to be part of the plan to then take over the state, which is consistent with the right's conspiracy theory of the Cloward-Piven strategy. But this focus on stop-gating the median voter allows for Romney to think "What I have to do is convince the 5 to 10 percent in the center that are independents."

    Presumably there are more. What else is missing?

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  • On the Occupy/Strike Debt "Debt Resistors'" Manual

    Sep 14, 2012Mike Konczal

    People have been talking a lot about the one-year anniversary of Occupy Wall Street. There is special interest with the movement's turn to organizing around the idea of debt as a "connective thread" for the 99%. The most recent issue of The Nation has two articles on the topic, with Astra Taylor witing "Occupy 2.0: Strike Debt" and David Graeber writing "Can Debt Spark a Revolution?"

    People have been talking a lot about the one-year anniversary of Occupy Wall Street. There is special interest with the movement's turn to organizing around the idea of debt as a "connective thread" for the 99%. The most recent issue of The Nation has two articles on the topic, with Astra Taylor witing "Occupy 2.0: Strike Debt" and David Graeber writing "Can Debt Spark a Revolution?"

    There's a Strike Debt/Occupy Wall Street group, and they have put out a Debt Resistors' Operations Manual, which is embedded here at the end of this post and available at that link as a pdf. You can pick up a hard copy of the document tomorrow, Saturday, in Washington Square Park from 10:30 a.m. till 7:30 p.m. and at Judson Church from 7:30 p.m. till 9:30 p.m.

    Reading it, I agree with Yves Smith's assessment that it "achieves the difficult feat of giving people in various types of debt an overview of their situation, including political issues, and practical suggestions in clear, layperson-friendly language." You should read her review in its entirety, and check it out for yourself. I want to talk a little bit about it from a different angle, noting how each half of the book builds out a new direction for Occupy.
     
    Over the summer, Jodi Dean argued that debt would be a difficult connective thread to pull off for a political movement. It's too individualized, too prone to viewing people as failed market agents, too moralized, and it can mimic unhelpful reactionary arguments against the welfare state and the government. I know people involved in organizing homeowners, especially underwater and deliquent homeowners, and I can say that these are all very accurate problems. Beyond that, nobody likes their identity as a struggling debtor. People can take pride in their role as workers, as citizens, and as numerous other things organizers can build on, but debt is a real challenge. The failure part runs deep.
     
    So there's a couple of interesting things in the Strike Debt booklet that I think are useful as a political statement. The first half of the book is about the major types of consumer debt -- medical, housing, education, and credit card -- as well as the credit scoring agencies. And the book places runaway consumer debt in the context of larger institutions that are failing to meet the needs of the population.
     
    The medical debt chapter calls for universal health care, the student debt chapter calls for free public colleges, and the credit card chapter is titled "The Plastic Safety Net," directly alluding to weakness in income maintence and basic income support. The credit scoring chapter points out how these debts, and your ability to pay them, are tied to your ability to gain access to basic needs like utilities, phone lines, and health care.
     
    These are all essential goods for our lives, and we choose the institutions that will deliver them. They can be publicly provided, based in principles of social insurance, decommodification, and access independent of wealth. Or they can be provided in individualized ways, ones that replace social insurance with self-insurance through individualized, large debt loads, while also working to the benefit of private agents.
     
    But these are both choices. And this focus on debt is a way of understanding the wrong choices we've made as a society in providing for these goods, and who benefits and who loses from them. People should understand their debts as part of a system's design, rather than its failure. If developed, it could turn into a powerful statement for the commons and for a more progressive and social democratic approach to all of these topics.
     
    It also approaches the 1 percent issue in a new way. Instead of a lot of arguments about the just deserts of the richest, the 1 percent and the "financialized" sectors of the economy are those who profit from inserting themselves between social goods and those who desperately need them. The second half of the book focuses not on individual debts but structures that benefit creditors. From municipal debt to the "expensive to be poor" areas of fringe finance to debt collection and bankruptcy, there's a whole series of institutions that work against debtors, the poor, and civic infrastructure.
     
    Here the banks aren't just nefarious agents taking too much of the pie; they are the people overcharging the poor to be able to cash a check or otherwise engage in trade. They are the people ignoring the Fair Debt Collection Act, harassing your family on old debts they bought on the cheap. And they are the ones privatizing municipal structures, collecting the gains while socializing the losses. And that's a new way of understanding the 1 percent's power, and how to resist it, and ultimately overcome it in the kind of world we want to build, which is a major step forward.
     
    As Astra Taylor wrote in her Nation piece, "As individuals, many of us are in debt because we have to borrow to secure basic social goods—education, healthcare, housing and retirement—that should be publicly provided. Meanwhile, around the world, debt is used to justify cutting these very services, even as the game is further rigged so that the 1 percent continues to profit, raking in money from tax cuts, privatization schemes and interest on municipal and treasury bonds."
     
    Will it be enough to spark a genuine political movement? Who knows. But it is a document worth your time, and the issues it brings up will hopefully form a core narrative of all future political struggles.

    Occupy Wall Street/Strike Debt: The Debt Resistors' Operations Manual

     

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  • Should We Stop Referring to Student Loans as "Financial Aid"?

    Sep 14, 2012Mike Konczal

    Students who take out loans aren't receiving special favors. They're making financial transactions like any other.

    Do we make both a conceptual and analytical mistake when we refer to student loans as a form of "financial aid"? Should that term be something to be resisted? Demos' Tamara Draut brought up this point in a conversation recently, and I think it needs to be explored further, because it frames how we speak about student loans.

    Students who take out loans aren't receiving special favors. They're making financial transactions like any other.

    Do we make both a conceptual and analytical mistake when we refer to student loans as a form of "financial aid"? Should that term be something to be resisted? Demos' Tamara Draut brought up this point in a conversation recently, and I think it needs to be explored further, because it frames how we speak about student loans.

    The government records and documents student loans as a form of aid. Here's a list of the "amount of financial aid awarded to full-time, full-year undergraduates, by type and source of aid," and loans are listed right next to grants. When pundits say that "student aid" has exploded over the past decade, and argue that aid is driving increases in tuition, it disguises that the aid that has exploded is a signficant amount of debt for young people.

    I've taken out loans and received gifts. When I've signed up for, say, a car loan, I never went "oh you shouldn't have" afterwards, like when I've received a really nice birthday gift. I understood that the creditor wanted to lend me a certain amount of money at a certain rate, and I wanted to borrow it. Full stop. Unless the interest rate charged is purposely manipulated for some reason [1], there's no reason to think of this as aid at all.

    Student loans are an economic transaction, the same as if the government contracted out to build a bridge, or hired a person to serve in the military or police force or be a teacher. The money spent here isn't "aid." Hiring someone to build a bridge exchanges labor for cash. Student loans exchange cash now for cash later plus interest. Those student loans would be underprovided without the government, certainly, but in the same way that bridges and law enforcement and other goods would also be underprovided if they weren't done by government.

    I think this clarifies some of the issues and responses I'm seeing in the discussion about whether or not higher education is driven by increases in so-called "aid." Megan McArdle wrote in Newsweek, "In a normal market, prices would be constrained by the disposable income available to pay them. But we’ve bypassed those constraints by making subsidized student loans widely available." Let's leave aside the issue that the vision of education constrained by disposable income is Mitt Romney's vision that students should get "‘as much education as they can afford." There's a bigger issue.

    I'm not sure what "normal market" means here, but many kinds of markets, perhaps even all of them, aren't constrainted by disposable income. Major, long-term debt fuels all kinds of important purchases, from houses to cars to health care to big-ticket durable goods. Events like retirement or having kids are dictated by longer-term savings decisions. Much of your monthly spending, like your rent or your cell phone, is in a contract that stipulates some future payments must be made regardless of your disposable income. There's a reason economists talk about spending as influenced by lifetime incomes.

    Student loans are a way of mitigating a credit constraint, which is different than providing aid. Here it reflects not subsidized demand, but actual demand smoothed over a long time period. That's going to put a lot of demand into play. It shouldn't surprise us that demand is very high when credit constraints are removed. Higher education is one of the most important mechanisms of social and economic mobility we have, and it is also one of the primary ways we have for people to fully develop their talents and capabilities.

    If actual demand overwhelms the supply of the system, that's a problem of supply, not demand. And the obvious solution is to increase the supply. Throughout our country's history we've done that in landmark bills that do it through public provisoning paid for by taxation, bills like the Morrill Act and California Master Plan. Now, as that system is left to crumble, we are looking to the private, for-profit sector to fill that gap. I fear that will only exacerbate the cost problems we've seen so far, and the data is looking that way too

    But if not as a form of financial "aid," how should we refer to student loans?

    [1] There's a narrow, though important, question about whether or not student loans are a "subsidy" because their interest rates are too low or too high. The Department of Education found that (R-10) for ”Direct Loans, the overall weighted average subsidy rate was estimated to be -13.91 percent in FY 2011; that is, the overall program on average was projected to earn about 13.91 percent on each dollar of loans made, thereby providing savings to the Federal Government.” What's a good word for the opposite of a subsidy? Whatever it is, student loans are that. Others argue that there needs to be a higher discount rate used to calculate this, and then you would see a subsidy. Let's assume for this post that the interest rate is seen to be fair by all parties.

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    Young woman paying bills image via Shutterstock.com.

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  • Two Issues with Megan McArdle's Piece on Higher Education

    Sep 13, 2012Mike Konczal

    Megan McArdle has a new cover story at Newsweek, "Is College a Lousy Investment?"  Is the benefit worth it with rising costs? Several people have addressed the benefit part, particularly Dylan Matthew here and Reihan Salam here.

    Megan McArdle has a new cover story at Newsweek, "Is College a Lousy Investment?"  Is the benefit worth it with rising costs? Several people have addressed the benefit part, particularly Dylan Matthew here and Reihan Salam here.

    I have a piece about higher education that I'm really excited about coming out in the next few weeks with Aaron Bady for Dissent, so I don't want to spoil it. But for now, I think there are two important things to engage with in McArdle's piece. The costs part is important, because this will likely be the center-right argument going forward, and I think it has problems in an important way. McArdle:

    Vedder adds, “I look at the data, and I see college costs rising faster than inflation up to the mid-1980s by 1 percent a year. Now I see them rising 3 to 4 percent a year over inflation. What has happened? The federal government has started dropping money out of airplanes.” Aid has increased, subsidized loans have become available, and “the universities have gotten the money.” Economist Bryan Caplan, who is writing a book about education, agrees: “It’s a giant waste of resources that will continue as long as the subsidies continue.” [...]

    In a normal market, prices would be constrained by the disposable income available to pay them. But we’ve bypassed those constraints by making subsidized student loans widely available. No, not only making them available: telling college students that those loans are “good debt” that will enable them to make much more money later.

    This is based on something called the Bennett Hypothesis. In the 1980s Education Secretary William Bennett argued that increases in student aid largely just allowed colleges to raise their tuition, capturing all that money. If true, this would be the lowest hanging policy fruit imaginable: save money by not providing aid and lower tuition in the process.

    Sadly, there's no evidence for this argument. And I mean "no evidence" not like "there's significant debate" or "reasonable people disagree," but like this has been extensively studied and the general consensus is that it is not true. I spent some time going through this research and couldn't find anything conclusive, and requests from others writing on this haven't been helpful. This could likely be true as it relates to for-profit schools -- there's a study somewhere that indicates this -- which shouldn't suprise us, as for-profits exist to suck up federal subsidies by business design. But it doesn't appear to be true for the vast majority of higher education, and to whatever extent it could be true it isn't a major driver.

     Here's a big post by David L. Warren, president of the National Association of Independent Colleges and Universities, listing all the institutions that have investigated this. Among other studies and experts quoted, here's:

    “Regarding the relation between financial aid and tuition, the regression models found no associations between most of the aid packaging variables (federal grants, state grants, and loans) and changes in tuition in either the public or private not-for-profit sectors.”
     
    – U.S. Department of Education National Center for Education Statistics, Dec. 2001, Study of College Costs and Prices 1988-89 to 1997-98, Vol. 1
     
    “The Commission finds no evidence to suggest any relationship between the availability of Federal grants and the costs or prices in these institutions,” and “has found no conclusive evidence that loans have contributed to rising costs and prices.”
     
    – National Comission on the Cost of Higher Education, February 1998, Straight Talk about College Costs & Prices
     
    “After the change to the Stafford loan limits beginning in AY 2007-08, the price [of college] … increased at a rate generally consistent with prior years. [...] Overall, [previously conducted] analyses are descriptive and do not necessarily indicate a linkage between increases in the loan limits and changes in tuition or borrowing.”
     
    – Government Accountability Office, May 2011, Federal Student Loans: Patterns in Tuition, Enrollment, and Federal Stafford Loan Borrowing Up to the 2007-08 Loan Limit Increase
    This is important, because McArdle's argument allows her to make it seem like government action to provide for higher education is largely counterproductive. Rather than examining the decreasing support for higher education, the difficulty of finding "Baumol’s cost disease" in higher education, the growth of a "hybrid" design for our public education sector, the decrease in Pell grants relative to total college costs, the way that the for-profit industry is taking over for public institutions, or the issue of risk-shifting to the individuals and providing services out of fees instead of taxes - rather than it being a choice on how we provide the essential social good of higher education, and who benefits and who loses from those choices - McArdle can imply that if the government tried to make education more affordable it would backfire and just make the problem worse.
     
    This becomes even more of a problem with the second issue, the likely transmission mechanism. Just because aid goes up doesn't mean that prices must go up - the increases in food stamps haven't caused an equivalent increase in food prices. In a follow-up post to her article, she alludes to the microeconomic issue at play: "Vedder’s theory is that, as he put it, universities are raising tuition 'because they can'."
     
    In economics-speak, that means that the supply of higher education is inelastic relative to price. If that's the case, then the right course of action is for the government to provide more supply at a cheaper price; i.e., free higher education. JW Mason has argued that if supply is inelastic, "each dollar spent on grants to students reduces final tuition costs less than one for one, each dollar spent on subsidies to public institutions reduces tuition costs by more." Think of it as "the public option for higher education" argument, with the same motivations. This is not a new argument. in 1899, the president of Stanford argued that “if the State makes no provision for higher education there is no other agency on which we can depend to supply it.” That seems as relevant now, over 100 years later, as it did back then.
     

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  • New Article: On Paul Ryan's World of Welfare Capitalism

    Sep 13, 2012Mike Konczal

    I have a new article at The Nation with Bryce Covert titled How Paul Ryan Would Decimate the New Deal. "Ryan’s vision for reforming the social safety net can be explained in three verbs: he wants to block grant Medicaid, voucherize Medicare and privatize Social Security.

    I have a new article at The Nation with Bryce Covert titled How Paul Ryan Would Decimate the New Deal. "Ryan’s vision for reforming the social safety net can be explained in three verbs: he wants to block grant Medicaid, voucherize Medicare and privatize Social Security. Yes, Medicare, Medicaid and Social Security would likely still exist, but those changes would mean a profound difference for the average person who receives government benefits over his or her lifetime."

    We walk through how a specific person would encounter these programs as they are administered currently and under Ryan's vision. We then talk about Gøsta Esping-Andersen's idea of "Worlds of Welfare Capitalism" and try to understand what a social-democratic welfare state would look like versus a classically liberal (read: libertarian) welfare state. We use that to formalize Ryan's vision as shredding the remaining social democratic parts of the New Deal and Great Society's welfare state and replacing them with a new, libertarian framework.

    I just had my mind blown from encountering Gøsta Esping-Andersen's work about six months ago. So even if you are tired of debates about Paul Ryan's budget from the blogosphere, this might be a helpful way to approach the topic from a new angle. Hope you check check out the new article!

     

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