Another Reason to Kill the Debt Ceiling: Conservative Think Tanks' Responses to Default

Dec 5, 2012Mike Konczal

House Republicans are looking to weaponize the debt ceiling again, while the Obama administration is trying to make removing the threat of default part of any agreement.

Here's one reason why the debt ceiling needs to go: the conservative intellectual infrastructure cheered on a potential default. I had imagined that there would be a good cop/bad cop dynamic to the right. Very conservative political leaders would be the bad cop, saying that they weren't afraid to default on the debt, while conservative think tanks would play a version of the good cop, warning of the dire consequences of a default for the economy if their bad cop friend didn't get his way.

For instance, here's bad cop Sen. Pat Toomey (R-PA) saying that the markets "would actually accept even a delay in interest payments on the Treasuries," especially "if it meant that Congress would right this ship, address this fiscal imbalance, and put us on a sustainable path, and that the bond market would rally if it saw we were making real progress towards this." Missing interest payments is fine; in fact, it is great for the country if it is used to pass the Ryan Plan.

Financial analysts, to put it mildly, disagreed. JP Morgan analysts wrote that "any delay in making a coupon or principal payment by Treasury would almost certainly have large systemic effects with long-term adverse consequences for Treasury finances and the US economy."

Here's where the think tanks are fascinating. You could image them saying "our partner Toomey is nuts, we can't control him, and you better do what he says or there's going to be real damage." But that's not what they did. It's best to split the work they did on the debt ceiling in two directions:

1. Technical Default Ain't No Thang. The first is arguing, like Toomey, that a "technical default" wouldn't matter, and in fact it could be a great thing if the Ryan Plan passed as a result. How did James Pethokoukis, then of Fortune and now of AEI, deal with a Moody's report arguing a "short-lived default" would hurt the economy? Pethokoukis: "I guess I would care more about what Moody’s had to say if a) they hadn’t missed the whole financial crisis, b) didn’t want to see higher taxes as part of any fiscal fix and c) if they made any economic sense." Default doesn't matter because Pethokoukis doesn't want taxes to go up, and there's no economic sense because of an interview he read in the Wall Street Journal.

Others went even further, arguing that the real defaulters are those who, umm, don't want to default on the debt. Here's the conservative think tank e21 with a staff editorial arguing that "policymakers need to stay focused on the real default issue: whether the terms of the debt limit increase this summer will be sufficiently tough to ensure that the nation’s debt-to-GDP ratio is stabilized and eventually sharply reduced." All these people who want a clean debt ceiling increase are causing the real default issue. As someone who used to do a lot of credit risk modeling, this is my favorite: "Indeed, those demanding the toughest concessions today actually have a strong pro-creditor bias." S&P disagreed with whoever wrote that editorial and increased the credit risk (downgraded) based on the threat of this technical default.

Heritage wrote a white paper saying that you could just "hold the debt limit in place, thereby forcing an immediate reduction in non-interest spending averaging about $125 billion each month," and that "refusing to raise the debt limit would not, in and of itself, cause the United States to default on its public debt." Dana Milbank noted that these kinds of shuffling plans would still leave the government short and likely cause a recession. Milbank: "Without borrowing, we’d have to cut Obama’s budget for 2012 by $1.5 trillion. That means even if we shut down the military and stopped writing Social Security checks, the government would still come up about $200 billion short." Cato also jumped in with the technical default crowd here.

But that was the reaction from the number-crunching analysts. What about the bosses?

2. Civilization Hangs in the Balance of the Debt Ceiling Fight. Here's the president of AEI, Arthur C. Brooks, in July 2011: "The battle over the debt ceiling...is not a political fight between Republicans and Democrats; it is a fight against 50-year trends toward statism...No one deserves our political support today unless he or she is willing to work for as long as it takes to win the moral fight to steer our nation back toward enterprise and self-governance."

Even better, the president of the Heritage Foundation, also in July 2011, compares Democrats to Japan during World War II and then argues: "We must win this fight. The debate over raising the debt limit seems complicated, but it is really very simple. Look beyond the myriad details of the awkward compromises, and you see an epic struggle between two opposing camps....Congress should not raise the debt limit without getting spending under control."

So the the conservative intellectual infrastructure, which consumes hundreds of millions of dollars a year, looked at the possibility of a debt default and determined it was both inconsequential and also the only way to stop statism in our lifetimes. No wonder the time period around the debt ceiling in 2011 was such a disaster for our economy, killing around 250,000 jobs that should have been created. There's no reason to assume all the same players won't play an even worse cop this time around.

There's no good reason for the debt ceiling, and now there are really bad consequences for its existence. Time to end it.

Follow or contact the Rortybomb blog:
  

House Republicans are looking to weaponize the debt ceiling again, while the Obama administration is trying to make removing the threat of default part of any agreement.

Here's one reason why the debt ceiling needs to go: the conservative intellectual infrastructure cheered on a potential default. I had imagined that there would be a good cop/bad cop dynamic to the right. Very conservative political leaders would be the bad cop, saying that they weren't afraid to default on the debt, while conservative think tanks would play a version of the good cop, warning of the dire consequences of a default for the economy if their bad cop friend didn't get his way.

For instance, here's bad cop Sen. Pat Toomey (R-PA) saying that the markets "would actually accept even a delay in interest payments on the Treasuries," especially "if it meant that Congress would right this ship, address this fiscal imbalance, and put us on a sustainable path, and that the bond market would rally if it saw we were making real progress towards this." Missing interest payments is fine; in fact, it is great for the country if it is used to pass the Ryan Plan.

Financial analysts, to put it mildly, disagreed. JP Morgan analysts wrote that "any delay in making a coupon or principal payment by Treasury would almost certainly have large systemic effects with long-term adverse consequences for Treasury finances and the US economy."

Here's where the think tanks are fascinating. You could image them saying "our partner Toomey is nuts, we can't control him, and you better do what he says or there's going to be real damage." But that's not what they did. It's best to split the work they did on the debt ceiling in two directions:

1. Technical Default Ain't No Thang. The first is arguing, like Toomey, that a "technical default" wouldn't matter, and in fact it could be a great thing if the Ryan Plan passed as a result. How did James Pethokoukis, then of Fortune and now of AEI, deal with a Moody's report arguing a "short-lived default" would hurt the economy? Pethokoukis: "I guess I would care more about what Moody’s had to say if a) they hadn’t missed the whole financial crisis, b) didn’t want to see higher taxes as part of any fiscal fix and c) if they made any economic sense." Default doesn't matter because Pethokoukis doesn't want taxes to go up, and there's no economic sense because of an interview he read in the Wall Street Journal.

Others went even further, arguing that the real defaulters are those who, umm, don't want to default on the debt. Here's the conservative think tank e21 with a staff editorial arguing that "policymakers need to stay focused on the real default issue: whether the terms of the debt limit increase this summer will be sufficiently tough to ensure that the nation’s debt-to-GDP ratio is stabilized and eventually sharply reduced." All these people who want a clean debt ceiling increase are causing the real default issue. As someone who used to do a lot of credit risk modeling, this is my favorite: "Indeed, those demanding the toughest concessions today actually have a strong pro-creditor bias." S&P disagreed with whoever wrote that editorial and increased the credit risk (downgraded) based on the threat of this technical default.

Heritage wrote a white paper saying that you could just "hold the debt limit in place, thereby forcing an immediate reduction in non-interest spending averaging about $125 billion each month," and that "refusing to raise the debt limit would not, in and of itself, cause the United States to default on its public debt." Dana Milbank noted that these kinds of shuffling plans would still leave the government short and likely cause a recession. Milbank: "Without borrowing, we’d have to cut Obama’s budget for 2012 by $1.5 trillion. That means even if we shut down the military and stopped writing Social Security checks, the government would still come up about $200 billion short." Cato also jumped in with the technical default crowd here.

But that was the reaction from the number-crunching analysts. What about the bosses?

2. Civilization Hangs in the Balance of the Debt Ceiling Fight. Here's the president of AEI, Arthur C. Brooks, in July 2011: "The battle over the debt ceiling...is not a political fight between Republicans and Democrats; it is a fight against 50-year trends toward statism...No one deserves our political support today unless he or she is willing to work for as long as it takes to win the moral fight to steer our nation back toward enterprise and self-governance."

Even better, the president of the Heritage Foundation, also in July 2011, compares Democrats to Japan during World War II and then argues: "We must win this fight. The debate over raising the debt limit seems complicated, but it is really very simple. Look beyond the myriad details of the awkward compromises, and you see an epic struggle between two opposing camps....Congress should not raise the debt limit without getting spending under control."

So the the conservative intellectual infrastructure, which consumes hundreds of millions of dollars a year, looked at the possibility of a debt default and determined it was both inconsequential and also the only way to stop statism in our lifetimes. No wonder the time period around the debt ceiling in 2011 was such a disaster for our economy, killing around 250,000 jobs that should have been created. There's no reason to assume all the same players won't play an even worse cop this time around.

There's no good reason for the debt ceiling, and now there are really bad consequences for its existence. Time to end it.

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Should Plummeting Interest Rates Change Deficit Hawks' Arguments?

Dec 5, 2012Mike Konczal

Several deficit reduction plans came out at the end of 2010, including a proposal of the co-chairs of the Simpson-Bowles comission and another by Pete Domenici and Alice Rivlin. Since then, the economic recovery has been sluggish, with unemployment stubbornly high. The Republicans threatened what they called a "technical default" during the debt ceiling fight, a move which led to a ratings downgrade for the United States and months of subpar growth. Rather than balancing the budget, the deficit was 8.7 percent of GDP in 2011, and is projected to be 7.3 percent of GDP for 2012.

What else has happened? Borrowing costs for the United States have plummeted. While real interest rates for borrowing 10 years out were still positive in late 2010 when these plans came out, they have since gone negative and stayed there. Investors are paying us to borrow money for the next 10 years.

If you were concerned about our nation's deficits in late 2010 and you follow this crucial market signal, you should be significantly less worried now, right? It's important to note that this fall in our borrowing costs hasn't been incorporated into any of the debt discussion happening right now, discussions which still use frameworks created in 2010.

Take Version 2.0 of the Domenici-Rivlin Plan, released on Monday. Defenders argue that this plan calls for stimulus right away, and even has an "economic growth" checkbox in its slideshow to prevent immediate austerity. However, there are two big things in Version 2.0 that don't incorporate collapsing interest rates.

1. It Cuts Its Stimulus Plan by 80 Percent. When I brought this up on Twitter, several people noted that Version 2.0, much like Version 1.0, contains stimulus. However, it wasn't noted that it recommends significantly less stimulus in the second version, even though borrowing costs are significantly cheaper and getting to full employment is equally crucial for dealing with our deficits.

The first version recommends a payroll tax holiday of $650 billion. The new version calls for an income tax rebate of just $120 billion dollars (line 34). That's 80 percent less stimulus than in the original version, even though the price of providing stimulus has plummeted. Is getting to full employment suddenly less of a priority? We are still quite a ways away from there.

2. It Reuses "Down Payment" and Credibility Theories. A popular theory in 2010 was that any short-term stimulus needed to be paired with long-term deficit reduction. Why? Not for political reasons, like that being the only way to get either through Congress. It was because of strictly economic reasons. Without deficit reduction, the upfront stimulus would panic the financial markets, raising interest rates and canceling out the stimulus. (This ignores that rates would rise because the economy was getting stronger, but forget that.)

Here's Version 1.0, recommending "a short-term jump-start to growth and a commitment to long-term deficit reduction that makes stimulus credible." In Version 2.0 we get a similar claim: "Of course, this and any other policies that add to the short-term deficit should be paired with a long-term debt reduction agreement rather than be enacted in isolation." The authors also think that removing the fiscal cliff requires a "down payment" to satiate the markets for the time being.

Once again, it isn't clear what macroeconomic theory is animating the "of course" here other than a vague sense of credibility. To whatever extent that theory made sense in 2010, it's significantly less, ahem, credible now. The end of 2010 saw an increase in stimulus through extensions of the Bush tax cuts, unemployment insurance, and the payroll tax without any long-term deficit reduction, and there's no evidence it caused a market panic. Indeed, one of the sadder moments for President Obama's economic team was them walking through confidence fairy arguments during the debt ceiling fight in summer 2011, the logical end results of this credibility argument.

If we can pass stimulus right now, why don't we do it? Certainly Version 2.0 doesn't think Medicare changes must go with, say, their plans to adjust the COLA of Social Security. I'd say it's because making it clear that these are two separate issues with very different solutions keeps the Very Serious People from using manufactured short-term crises and mass unemployment to reengineer social insurance programs to do the things they want them to do. Regardless of whether you like those ideas, there's no reason to hold our current unemployed hostage in the process. And unfortunately for them, the capital markets for U.S. debt, one of the most liquid and transparent markets in the history of modern capitalism, agree. I'm still not hearing good reasons to ignore this big market movement from those still worried about the deficit as the major priority.

Follow or contact the Rortybomb blog:
  

Several deficit reduction plans came out at the end of 2010, including a proposal of the co-chairs of the Simpson-Bowles comission and another by Pete Domenici and Alice Rivlin. Since then, the economic recovery has been sluggish, with unemployment stubbornly high. The Republicans threatened what they called a "technical default" during the debt ceiling fight, a move which led to a ratings downgrade for the United States and months of subpar growth. Rather than balancing the budget, the deficit was 8.7 percent of GDP in 2011, and is projected to be 7.3 percent of GDP for 2012.

What else has happened? Borrowing costs for the United States have plummeted. While real interest rates for borrowing 10 years out were still positive in late 2010 when these plans came out, they have since gone negative and stayed there. Investors are paying us to borrow money for the next 10 years.

If you were concerned about our nation's deficits in late 2010 and you follow this crucial market signal, you should be significantly less worried now, right? It's important to note that this fall in our borrowing costs hasn't been incorporated into any of the debt discussion happening right now, discussions which still use frameworks created in 2010.

Take Version 2.0 of the Domenici-Rivlin Plan, released on Monday. Defenders argue that this plan calls for stimulus right away, and even has an "economic growth" checkbox in its slideshow to prevent immediate austerity. However, there are two big things in Version 2.0 that don't incorporate collapsing interest rates.

1. It Cuts Its Stimulus Plan by 80 Percent. When I brought this up on Twitter, several people noted that Version 2.0, much like Version 1.0, contains stimulus. However, it wasn't noted that it recommends significantly less stimulus in the second version, even though borrowing costs are significantly cheaper and getting to full employment is equally crucial for dealing with our deficits.

The first version recommends a payroll tax holiday of $650 billion. The new version calls for an income tax rebate of just $120 billion dollars (line 34). That's 80 percent less stimulus than in the original version, even though the price of providing stimulus has plummeted. Is getting to full employment suddenly less of a priority? We are still quite a ways away from there.

2. It Reuses "Down Payment" and Credibility Theories. A popular theory in 2010 was that any short-term stimulus needed to be paired with long-term deficit reduction. Why? Not for political reasons, like that being the only way to get either through Congress. It was because of strictly economic reasons. Without deficit reduction, the upfront stimulus would panic the financial markets, raising interest rates and canceling out the stimulus. (This ignores that rates would rise because the economy was getting stronger, but forget that.)

Here's Version 1.0, recommending "a short-term jump-start to growth and a commitment to long-term deficit reduction that makes stimulus credible." In Version 2.0 we get a similar claim: "Of course, this and any other policies that add to the short-term deficit should be paired with a long-term debt reduction agreement rather than be enacted in isolation." The authors also think that removing the fiscal cliff requires a "down payment" to satiate the markets for the time being.

Once again, it isn't clear what macroeconomic theory is animating the "of course" here other than a vague sense of credibility. To whatever extent that theory made sense in 2010, it's significantly less, ahem, credible now. The end of 2010 saw an increase in stimulus through extensions of the Bush tax cuts, unemployment insurance, and the payroll tax without any long-term deficit reduction, and there's no evidence it caused a market panic. Indeed, one of the sadder moments for President Obama's economic team was them walking through confidence fairy arguments during the debt ceiling fight in summer 2011, the logical end results of this credibility argument.

If we can pass stimulus right now, why don't we do it? Certainly Version 2.0 doesn't think Medicare changes must go with, say, their plans to adjust the COLA of Social Security. I'd say it's because making it clear that these are two separate issues with very different solutions keeps the Very Serious People from using manufactured short-term crises and mass unemployment to reengineer social insurance programs to do the things they want them to do. Regardless of whether you like those ideas, there's no reason to hold our current unemployed hostage in the process. And unfortunately for them, the capital markets for U.S. debt, one of the most liquid and transparent markets in the history of modern capitalism, agree. I'm still not hearing good reasons to ignore this big market movement from those still worried about the deficit as the major priority.

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New Inquiry's Drive; Twilight of the Bureaucratic Elite

Dec 3, 2012Mike Konczal

The New Inquiry is running a subscription drive for their $2/month pdf magazine and for keeping the site running and free. Given that their project is very different than this blog, I'm not sure how to recommend them. So here are some of my favorite 2012 items from them, which should give you a sense of whether or not you'd enjoy subscribing yourself.

Given that the project emphasizes younger voices outside institutions currently circling their wagons, a lot of their writing is more interesting and closer to the issues at hand than what you'd normally read. Atossa Abrahamian's piece on Going Lebron and Malcolm Harris' review of Julia Leigh’s film Sleeping Beauty are two of the more interesting pieces on youth unemployment I've read, particularly since they approach it from a much different angle than the normal stories. David Noriega's piece on serving as a Civilian Complaint Review Board investigator for the NYPD is again another way of understanding NYPD abuses outside the regular critique of abuses. I found Kate Redburn's piece on the GLBTQ case against hate crimes laws convincing and well-argued. Molly Knefel's piece reflecting on teaching and her brother's arrest was a fascinating look into dealing with the realities of policing and privilege. Freddie DeBoer's review of Twilight of the Elites was an aggressive, left-wing review unlikely to be seen at other venues. This excerpt (and interview) from Kate Zambreno's Heroines on the role of madness, gender and genius is brilliant. And Lili Loofbourow's review of the movie Brave was the best read of it I've seen.

There's a blogging sabermetrics element to the site, either publishing writers who are up-and-coming, giving talented people in other fields a space to write with good editing, or providing a more prominent home for some of the Internet's better bloggers. Aaron Bady, who had the best take on the Mike Daisey flap, found a new home for his zunguzungu blog there, as did other blogs I enjoy like those of Rob Horning and Austerity Kitchen. If you find this or other articles by them interesting, and are looking for new places to read, consider subscribing.

====

While going through those New Inquiry articles, I re-read Freddie DeBoer's review of Chris Hayes's Twilight of the Elites. One of the challenges of the book is that Hayes doesn't actually want to tear down the meritocracy period or wage war against all institutions -- there's no "and good riddance" subtitle. I noticed that this is a postiive tension in my review of the book for Dissent, because it allows the book to come up with a model of how the meritocratic elite function in society and ways in which it fails, pointing to possible better ways.

But why the ambivalence? Freddie argues that mainstream liberals can't cope with the implications. They are used to proposing "a moderate, capitalism-sustaining set of policy proposals" because, either professionally or ideologically, "alternatives to capitalism are beyond the realms of acceptable discussion."

Maybe. Post-Dworkin, there's been a lot of energy in fleshing out a liberal project that is, to use the jargon, "ambition-sensitive and endowment-insensitive," so I don't think it is a complete blindspot. The book argues, following Robert Michels' arguments in Political Parties, that some level of stratification and power is inevitable to any sufficiently large and important enterprise. The important part is to have that stratification best embody democratic principles, particularly by resisting ossification, and keep the project as a search for and a process of democracy.

But I think the book gives a very clear and specific reason I haven't seen emphasized on why it thinks a meritocratic elite is necessary - we need it to combat global warming. From Twilight:

Certain political issues do not require elite mediation...that doesn't hold for global warming, which I would argue is the single most pressing challenge our civilization faces...Here, we need elites and experts to tell us it's happening and that we have to take steps to prevent it. Implementing corrective policy on the scale necessary requires, as a precondition, a robust and widely shared level of pubic trust that climate scientists and the political leaders who favor a carbon policy are telling us the truth. But the crisis of authority makes that impossible...

Progress is dependent upon a productive and dynamic tension between institutionalism and insurrectionism. Insurrectionists keep our institutions honest. Institutionalists are stewards of our collective public life...without the social cohesion that trusted institutions provide, we cannot produce the level of consensus necessary to confront our greatest challenges. I believe the most important of these is climate change.

Without functioning institutions, trustworthy because some ideal of merit is guiding credentials and access, we can't tackle global warming. We can't trust the scientists to diagnosis the problem, or the bureaucrats to carry out the policy solutions.

Abstracting away from the specifics of the book, I wonder how much a meritocratic elite is necessary for social democratic liberalism generally. If you are going to have a bureaucratic system determining access and pricing of health insurance, projecting the costs of old age pensions, determining what kinds of activities count as market-making for financial regulations, figuring out the costs of pollution, etc., you'll need some way of ensuring that this system is accountable and competent.

But, and here I think the book misses the opportunity to discuss this, does that require a meritocracy as we understand it? How does the need for good government policy carried out well square with, or contrast against, the winner-take-all form of meritocracy, where everything is collapsable into a combination of wealth and IQ? Competence, accountability, a spirit of public service, and dependability are missing from our elite, though they are values that are, or should be, prized in a bureaucracy.

I think I'm going to have to spend some time in 2013 coming up with a better working theory of the bureaucracy, especially how we want it to be. What features does it take from our meritocracy and, more importantly, in what ways can it serve as a corrective? Several people noted to me that the ethos of public service is one of the things missing from the paper I just wrote on the general case for public options, as a public service ethic is exactly what you don't get from private provisioning. What should I be reading?

 

Follow or contact the Rortybomb blog:
  

The New Inquiry is running a subscription drive for their $2/month pdf magazine and for keeping the site running and free. Given that their project is very different than this blog, I'm not sure how to recommend them. So here are some of my favorite 2012 items from them, which should give you a sense of whether or not you'd enjoy subscribing yourself.

Given that the project emphasizes younger voices outside institutions currently circling their wagons, a lot of their writing is more interesting and closer to the issues at hand than what you'd normally read. Atossa Abrahamian's piece on Going Lebron and Malcolm Harris' review of Julia Leigh’s film Sleeping Beauty are two of the more interesting pieces on youth unemployment I've read, particularly since they approach it from a much different angle than the normal stories. David Noriega's piece on serving as a Civilian Complaint Review Board investigator for the NYPD is again another way of understanding NYPD abuses outside the regular critique of abuses. I found Kate Redburn's piece on the GLBTQ case against hate crimes laws convincing and well-argued. Molly Knefel's piece reflecting on teaching and her brother's arrest was a fascinating look into dealing with the realities of policing and privilege. Freddie DeBoer's review of Twilight of the Elites was an aggressive, left-wing review unlikely to be seen at other venues. This excerpt (and interview) from Kate Zambreno's Heroines on the role of madness, gender and genius is brilliant. And Lili Loofbourow's review of the movie Brave was the best read of it I've seen.

There's a blogging sabermetrics element to the site, either publishing writers who are up-and-coming, giving talented people in other fields a space to write with good editing, or providing a more prominent home for some of the Internet's better bloggers. Aaron Bady, who had the best take on the Mike Daisey flap, found a new home for his zunguzungu blog there, as did other blogs I enjoy like those of Rob Horning and Austerity Kitchen. If you find this or other articles by them interesting, and are looking for new places to read, consider subscribing.

====

While going through those New Inquiry articles, I re-read Freddie DeBoer's review of Chris Hayes's Twilight of the Elites. One of the challenges of the book is that Hayes doesn't actually want to tear down the meritocracy period or wage war against all institutions -- there's no "and good riddance" subtitle. I noticed that this is a postiive tension in my review of the book for Dissent, because it allows the book to come up with a model of how the meritocratic elite function in society and ways in which it fails, pointing to possible better ways.

But why the ambivalence? Freddie argues that mainstream liberals can't cope with the implications. They are used to proposing "a moderate, capitalism-sustaining set of policy proposals" because, either professionally or ideologically, "alternatives to capitalism are beyond the realms of acceptable discussion."

Maybe. Post-Dworkin, there's been a lot of energy in fleshing out a liberal project that is, to use the jargon, "ambition-sensitive and endowment-insensitive," so I don't think it is a complete blindspot. The book argues, following Robert Michels' arguments in Political Parties, that some level of stratification and power is inevitable to any sufficiently large and important enterprise. The important part is to have that stratification best embody democratic principles, particularly by resisting ossification, and keep the project as a search for and a process of democracy.

But I think the book gives a very clear and specific reason I haven't seen emphasized on why it thinks a meritocratic elite is necessary - we need it to combat global warming. From Twilight:

Certain political issues do not require elite mediation...that doesn't hold for global warming, which I would argue is the single most pressing challenge our civilization faces...Here, we need elites and experts to tell us it's happening and that we have to take steps to prevent it. Implementing corrective policy on the scale necessary requires, as a precondition, a robust and widely shared level of pubic trust that climate scientists and the political leaders who favor a carbon policy are telling us the truth. But the crisis of authority makes that impossible...

Progress is dependent upon a productive and dynamic tension between institutionalism and insurrectionism. Insurrectionists keep our institutions honest. Institutionalists are stewards of our collective public life...without the social cohesion that trusted institutions provide, we cannot produce the level of consensus necessary to confront our greatest challenges. I believe the most important of these is climate change.

Without functioning institutions, trustworthy because some ideal of merit is guiding credentials and access, we can't tackle global warming. We can't trust the scientists to diagnosis the problem, or the bureaucrats to carry out the policy solutions.

Abstracting away from the specifics of the book, I wonder how much a meritocratic elite is necessary for social democratic liberalism generally. If you are going to have a bureaucratic system determining access and pricing of health insurance, projecting the costs of old age pensions, determining what kinds of activities count as market-making for financial regulations, figuring out the costs of pollution, etc., you'll need some way of ensuring that this system is accountable and competent.

But, and here I think the book misses the opportunity to discuss this, does that require a meritocracy as we understand it? How does the need for good government policy carried out well square with, or contrast against, the winner-take-all form of meritocracy, where everything is collapsable into a combination of wealth and IQ? Competence, accountability, a spirit of public service, and dependability are missing from our elite, though they are values that are, or should be, prized in a bureaucracy.

I think I'm going to have to spend some time in 2013 coming up with a better working theory of the bureaucracy, especially how we want it to be. What features does it take from our meritocracy and, more importantly, in what ways can it serve as a corrective? Several people noted to me that the ethos of public service is one of the things missing from the paper I just wrote on the general case for public options, as a public service ethic is exactly what you don't get from private provisioning. What should I be reading?

 

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New Paper: Against the Coupon State

Dec 3, 2012Mike Konczal

Imagine if current neoliberal policymakers had to sit down today and invent the idea of a library. What would it look like? They'd likely create a tax credit to subsidize the purchasing and reselling of books, like much of our submerged welfare state. They might require a mandate for people to rent books from approved private libraries run by Amazon or Barnes and Noble, with penalties for those who don’t and vouchers for those who can’t afford it, like the recent health care expansion. 

Or maybe they’d create means-tested libraries only accessible to the poor, with a requirement that the patrons document how impoverished they are month after month to keep their library card. Maybe they’d also exempt the cost of private library cards from payroll taxes. Or let any private firm calling itself a library pay nothing in taxes while exempting their bonds from taxation and insuring their losses by, say, paying for books that go missing. You can imagine them going through every possible option rather than the old-fashioned, straightforward, public library, open to all, provided and run by the government, that our country enjoys everyday.
 
I have a new white paper out with New America's "Renewing the American Social Contract" series, titled "No Discount: Comparing the Public Option to the Coupon Welfare State." Here's the introduction, and here's the full pdf.
 
Given that the state wants to provide a certain good, I wanted to find the arguments over whether or not the government should provide that good itself or provide coupons for purchases in the private market. Surprisingly, there were few cohensive summaries, so I created one myself. Though not explicitly stated, It's relevant for discussions over whether or not the welfare state should be entirely replaced with cash (the ultimate coupon).
The rest of the papers in the series are very much worth your time too. I hope you check them out. Mine starts out with:
 
The fundamental ideological conflict surrounding the Welfare State in the U.S. is no longer over the scope of government, but instead how the government carries out its responsibilities and delivers services. The conservative and neoliberal vision is one of a government that provides a comparable range of benefits as conventional liberals, but rather than designing and delivering the services directly, it provides coupons for citizens. Coupons – whether by that name or more anodyne terms such as “vouchers” or “premium support” or tax subsidies – could then be used to purchase the services in the private market. Whenever neoliberals have sought to expand the scope of the welfare state or conservatives have tried to fundamentally shrink it, both have come bearing coupons.
 
Read the rest at New America.
 
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Imagine if current neoliberal policymakers had to sit down today and invent the idea of a library. What would it look like? They'd likely create a tax credit to subsidize the purchasing and reselling of books, like much of our submerged welfare state. They might require a mandate for people to rent books from approved private libraries run by Amazon or Barnes and Noble, with penalties for those who don’t and vouchers for those who can’t afford it, like the recent health care expansion. 

Or maybe they’d create means-tested libraries only accessible to the poor, with a requirement that the patrons document how impoverished they are month after month to keep their library card. Maybe they’d also exempt the cost of private library cards from payroll taxes. Or let any private firm calling itself a library pay nothing in taxes while exempting their bonds from taxation and insuring their losses by, say, paying for books that go missing. You can imagine them going through every possible option rather than the old-fashioned, straightforward, public library, open to all, provided and run by the government, that our country enjoys everyday.
 
I have a new white paper out with New America's "Renewing the American Social Contract" series, titled "No Discount: Comparing the Public Option to the Coupon Welfare State." Here's the introduction, and here's the full pdf.
 
Given that the state wants to provide a certain good, I wanted to find the arguments over whether or not the government should provide that good itself or provide coupons for purchases in the private market. Surprisingly, there were few cohensive summaries, so I created one myself. Though not explicitly stated, It's relevant for discussions over whether or not the welfare state should be entirely replaced with cash (the ultimate coupon).
The rest of the papers in the series are very much worth your time too. I hope you check them out. Mine starts out with:
 
The fundamental ideological conflict surrounding the Welfare State in the U.S. is no longer over the scope of government, but instead how the government carries out its responsibilities and delivers services. The conservative and neoliberal vision is one of a government that provides a comparable range of benefits as conventional liberals, but rather than designing and delivering the services directly, it provides coupons for citizens. Coupons – whether by that name or more anodyne terms such as “vouchers” or “premium support” or tax subsidies – could then be used to purchase the services in the private market. Whenever neoliberals have sought to expand the scope of the welfare state or conservatives have tried to fundamentally shrink it, both have come bearing coupons.
 
Read the rest at New America.
 
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Following Walmart and Black Friday

Nov 21, 2012Mike Konczal

My colleague Dorian Warren describes what is going on with Walmart in the video above and here.

Here's a list of events and ways to particpate by standing with Walmart on Black Friday. I encourage you to check it out.

Josh Eidelson has been a must read on this topic. Read him at his new Nation blog here, and follow him on twitter here.

Also, I enjoyed reading Sarah Jaffe reporting at the Guardian, and Seth Ackerman talking about Walmart via Hostess here.

My colleague Dorian Warren describes what is going on with Walmart in the video above and here.

Here's a list of events and ways to particpate by standing with Walmart on Black Friday. I encourage you to check it out.

Josh Eidelson has been a must read on this topic. Read him at his new Nation blog here, and follow him on twitter here.

Also, I enjoyed reading Sarah Jaffe reporting at the Guardian, and Seth Ackerman talking about Walmart via Hostess here.

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Are We at the End of the Welfare State?

Nov 21, 2012Mike Konczal

I have a piece at the American Prospect, The Great Society's Next Frontier, about potential futures for the welfare state. It attempts to answer the question over whether or not the passage of Obamacare means that the welfare state is now complete.

I have a piece at the American Prospect, The Great Society's Next Frontier, about potential futures for the welfare state. It attempts to answer the question over whether or not the passage of Obamacare means that the welfare state is now complete. If we take the project of American liberalism to be Keynesian economics, plus the mixed economy, plus social insurance, plus political liberalism, can we check the social insurance part as complete? I decided to ask several scholars of the welfare state what they see as potential steps in the decades ahead, and lay out their answers.

The "completed welfare state" usually means a few different things. One is that the major committments of social insurance are now determined, and it is just a matter how broadly or narrowly to construe those committments. That's many people's answer for the issue. Dylan Matthews gave a similar answer on bloggingheads recently, noting that things like universal pre-K will fall out of our obligations to provide universal K-12 schooling. Many of the changes experts in the piece proposed were extensions of already functioning programs, like the EITC or unemployment insurance or expanding K-12 schooling to a younger age.

Another is that the level of expenditure and revenue is set for the near future, so if social insurance is expanded it'll require a more fundamental change in what we are willing to pay for our government. And indeed many of the debates going forward will be about spending less than projected on health care through controlling costs, or changing how we fund things, such as taking the tax expenditures for 401(k)s and making them more progressive. There are many things that don't require changing the level of expenditure and revenue, such as raising the minimum wage (which compliments the EITC quite well). This is one reason we may see more of a focus on "predistribution" policy in the years ahead.

I wanted to add this point from Envisioning Real Utopias about a basic income, but also pertains to both the minimum wage and things like Demos' call for raising retail wages. In addition to reducing coercion as workers aren't separated from the means of subsistence, eliminating poverty without creating the major pathologies of means-tested anti-poverty transfers, recognizing the value of decommodified care-giving activities and subsidizing the social and cooperative market economies, a basic income also does the following:

Second, universal basic income is likely to generate greater egalitarianism within labor markets. If workers are more able to refuse employment, wages for unpleasant work are likely to increase relative to wages for highly enjoyable work. The wage structure in labor markets, therefore, will begin to reflect more systematically the relative disutility of different kinds of labor rather than simply the relative scarcity of different kinds of labor power. This, in turn, will generate an incentive structure for employers to seek technical and organizational innovations that eliminate unpleasant work. Technical change would therefore have not just a labor-saving bias, but a labor-humanizing bias.
This connection between cheap labor and technology change is a constant theme of Peter Frase, who mentioned the Prospect piece in a recent post.
 
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Children, Parents and Mass Incarceration

Nov 21, 2012Mike Konczal

After a round of discussion on family structure, Reihan Salam tweeted out "@reihan Important point about family stability and public policy: mass incarceration is a huge part of the problem." I've just read a book, Invisible Men: Mass Incarceration and the Myth of Black Progress, by the sociologist Becky Pettit, whi

After a round of discussion on family structure, Reihan Salam tweeted out "@reihan Important point about family stability and public policy: mass incarceration is a huge part of the problem." I've just read a book, Invisible Men: Mass Incarceration and the Myth of Black Progress, by the sociologist Becky Pettit, which addresses this. Let's get a few charts out.

Here's a chart of children with a parent behind bars:

That's a fivefold increase since 1980. But that's with a parent behind bars at any one moment. What about the percentage of children who will have had a parent behind bars at some point in their childhood?

24% of black children will have had a parent behind bars by age 17, an eightfold increase since 1980.

The interesting thesis of Invisible Men is that the government, through the means it uses to record, analyze and ultimately see the population it governs, systematically misses incarcerated people. This biases various policy debates, as researchers build their arguments off these records. This is particularly important for some serious ongoing debates, like gaps between blacks and whites in earnings or labor-force participation, or the high-school dropout rate. This missing population also means that a variety of research agendas, from political participation to family structure, are also lacking an analytical mechanism for understanding how the large increase in incarcerated populations are impacting the topics.

There aren't definitive answers for how incarceration changes family structure, though there is evidence that incarcerated fathers are less like to be cohabitating or marrying a year after their child's birth. And incarceration increases the liklihood of divorce. But we don't have full answers, in part because the incarcerated fall off the government's radar for data collection. Hopefully Pettit's book will draw attention to this gap in our knowledge, and help future researchers understand the subtle yet devestating consequences of the War on Drugs and other means of mass incaraceration for our country.
 
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What Are Conservatives Getting Wrong About the Economy? (Douthat Reply Edition)

Nov 19, 2012Mike Konczal

Ross Douthat argues in his recent New York Times editorial, The Liberal Gloat, that the coalition that elected President Obama was "created by social disintegration and unified by economic fear." Douthat argues that "single life is generally more insecure and chaotic than married life, and single life with children." The implicit argument is that marriage is an important part of handling the economic fears of the business cycle, and if there were more married couples there'd be

Ross Douthat argues in his recent New York Times editorial, The Liberal Gloat, that the coalition that elected President Obama was "created by social disintegration and unified by economic fear." Douthat argues that "single life is generally more insecure and chaotic than married life, and single life with children." The implicit argument is that marriage is an important part of handling the economic fears of the business cycle, and if there were more married couples there'd be less call for economic policy. Krugman notes that "insecurity is on the rise for everyone, driven by changes in the economy" and that "[y]our church and your traditional marriage won’t guarantee the value of your 401(k)."

For fun, how well has the income of couples with children held up in the Great Recession when compared to single households with children? Let's look at the Federal Reserve's recent Survey of Consumer Finance. This comes out every three years, with the last version covering 2010. Here's net income for single households with a child versus couple households ("families in which the family head was either married or living with a partner") with a child:

In the Great Recession, single households with a child lost 2.3 percent of their income, while couple households with a child lost 9.4 percent of their income. Now obviously having $67K is better than having $29K. And the 2.3 percent loss of income for people with less could sting a lot harder than the 9.4 percent loss for those with more.

But what is important to emphasize is that having a couple raising kids, whatever its other virtues, is not a good form of insurance against the business cycle. The Great Recession has hit married households with larger drops in income. This is probably driven by having two people working in the household, which, as Senator (!) Elizabeth Warren emphasized years ago, doubles the chance that someone might lose their job. So even if the number of children being raised in single households dropped suddenly, that's no replacement for an aggressively liberal, Keynesian welfare-state approach to driving the macroeconomy to full employment.

This isn't just conservatives, as education-obsessed centrists and liberals have a blind-spot here as well. I recently wrote a piece for The American Prospect about young people graduating into the recession. The focus was how the average college graduate is likely to have a permanent loss to their income, compared to the more temporary income loss for those who attend elite colleges or don't go to college at all. I mentioned it in passing at the end, but this technically means that the college premium, especially at the margins, drops in a recession. Therefore getting more education is a poor form of insurance from the business cycle compared to, once again, Keynesian welfare-state full employment.

Paradigm Down

I have no interest in seeing a resurgent conservative movement in this country. One reason I was worried about Romney winning the 2012 election and passing the Ryan Plan in January 2013 and Lochnerizing the Supreme Court is because an animal is most dangerous when it is dying and knows it. But it might be helpful for those on the right to get an outsider's perspective.

Douthat argues that conservatives focused too much on those getting "gifts" and other free-loader metaphors. But the most sustained conservative economic arguments of the Great Recession have been reviving the liquidationist, Mellonite approach to the business cycle. I think that's one important reason Romney and conservatives were unable to put real pressure to President Obama's vulnerability on the economy. They believe the recession is purging the weakness in the economy, doing healthy work, and to the extent the recovery is sluggish it is the fault of activist government and policy attempting to address unemployment.

The House GOP, in particular, has pushed the Mellon-wing, calling for austerity to promote growth, while also pulling back on monetary policy to stimulate the economy. Understanding the "47 percent" and "free stuff" comments benefit from the context of conservative arguments that government policy is the primary reason that unemployment remains high, as all the free stuff allows the unemployed to stay on vacation. If conservatives want to build a new economic paradigm that works for working people, they should probably have some idea on getting unemployment down sometime in the next decade.

Another important conservative focus is running everything the government does through private hands. The conservative movement is not about small government, it is about privatized government. From Bush and Ryan's attempts to privatize Social Security, to turning Medicare into a Groupon, to bringing private industry into the military, every step involves introducing market agents into government processes and pushing market risk to individuals. This continued under Mitt Romney's big policy ideas. He had an idea for taking our system of unemployment insurance and turning it into a system of private unemployment savings accounts. He wanted to fix higher education costs by expanding the for-profit industry, which would "hold down the cost of education," even though they are far more expensive than their non-profit equivalents.

The conservative idea that citizens don't have enough undiversifiable exposure to the risks of the new economy - long-term unemployment, low wages, risks of a large drop in income, globalization, automation etc. - is not one that is going to work going forward. The economic voters Douthat wants to win over see the cronyism of funneling money through private agents, and they think of the market with far more dread and anxiety than entrepreneurial glee. Though they may be ambivalent about more liberal solutions, they certainly don't like the perpetual conservative project of making all of government's functions look more and more like their empty 401(k)s. That might be another place to start for conservatives who want to rebuild their economic ideas.

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Keep Calm and Get Excited About the Rolling Jubilee

Nov 15, 2012Mike Konczal

Occupy has created a Strike Debt wing, which has a new project: a Rolling Jubilee. There will be a livestream of the Debt Jubilee fundraiser tonight, starting at 8pm ET, that you can access from their webpage. It features Janeane Garofalo, Jeff Mangum from Neutral Milk Hotel, Lee Ranaldo of Sonic Youth, Lizz Winstead, and many more. You should check it out.

Occupy has created a Strike Debt wing, which has a new project: a Rolling Jubilee. There will be a livestream of the Debt Jubilee fundraiser tonight, starting at 8pm ET, that you can access from their webpage. It features Janeane Garofalo, Jeff Mangum from Neutral Milk Hotel, Lee Ranaldo of Sonic Youth, Lizz Winstead, and many more. You should check it out.

To give you a sense why I find this new project fascinating, I'll quickly review three random projects I've been working on recently, all of which are related to this new project.

The first is on what bankruptcy law professor Ronald Mann refers to as the "sweat box" model of consumer debt and bankruptcy. Mann argues that the 2005 bankruptcy amendments benefit creditors "by slowing the time of inevitable filings by the deeply distressed and allowing issuers to earn greater revenues from those individuals" and functions as a windfall for creditors because it "enable[s] issuers to profit from debt servicing revenues paid by distressed borrowers who are not yet in bankruptcy." More broadly, the distressed debt markets allow debt collectors the right to make huge profits by "sweating" debtors through assessing fees, raising rates, and inflating the debts owed while debtors struggle to pay the debts back over long periods of time. At the distressed end, debts aren't about recovering what is owed or making sure loans that aren't being paid turn into good debts that have reliable payments, but instead about the option to harrass small payments indefinitely. Debt collectors don't want these loans to work. (The same distorted incentives might be in play with those who have missed a mortgage payment.)

Another is focused on student debt, particularly about how the collapse of public higher education has been a planned political project. Rather than student debt levels being the result of individual greed or cost inflation driven by productivity levels, they result from a specific project to shift costs for public education onto the individual that has been consciously planned. This is part of a larger project to dismantle the access and mobility inherent in the centuries-old public higher education system in this country.

The final one is arguing that one explanation for why our recovery is so slow has to do with a debt overhang. Rather than forcing the losses of our housing bubble onto creditors, we've left them to stagnate, dragging down aggregate demand. Or we've solved it through foreclosures, which have huge costs for communities and municipalities. The financial sector itself understands that these loans aren't worth much and are fighting among itself over who will eat the losses, but this knowledge hasn't spread to homeowners or the country at large.

Rolling Jubilee

Explaining these issues and how they connect is difficult, but it is now easier with Strike Debt and its Rolling Jubilee project. What is the Rolling Jubilee? "Banks sell debt for pennies on the dollar on a shadowy speculative market of debt buyers who then turn around and try to collect the full amount from debtors. The Rolling Jubilee intervenes by buying debt, keeping it out of the hands of collectors, and then abolishing it."

The project relentlessly emphasizes the social conditions for the creation of debt: "We believe people should not go into debt for basic necessities like education, healthcare and housing." Debt in our country evolves in a system of institutions where publicly provided goods are missing or being dismantled in real-time, with private systems designed to benefit the few replacing them, and that is something that can be resisted. And the Jubilee also emphasizes that these specific debts that they are buying no longer reflect something that's owed, as they were written to zero on a balance sheet a long time ago. These are debts whose real value consists of a harrassment option to try and collect more than the pennies on the dollar that they were bought for.

Strike Debt can only purchase so much debt. What can it do going forward? There's the obvious ability to use this to highlight how bad debts actually play out in our country and expose the ins-and-outs of this system.

I'd personally like people to make the connection between random groups of people doing this and the government doing this itself through eminent domain. Right now southern California, for instance, is a battlefield between municipalities looking to prevent destructive foreclosures and the financial industry, which is looking to do a capital strike. Other cities are turning to eminent domain to buy mortgage debt at its real value, write it down, and save their communities. It would be great for them to say, "Hey, if cultural studies icon Andrew Ross and some Occupy kids are capable of doing this, certainly we, with our legal powers of eminent domain and power to tax, could do the same!"

And I'm already hearing about people proposing a form of "debt-holder activism" akin to the idea of shareholder activism: exposing wrong-doing, suing debt traders for selling debt without proper documentation, etc. It might be far-fetched, but it is worth exploring.

Critiques

There are reasonable criticisms of this project. But I'll start with some that I don't find convincing.

Doug Henwood, for instance, believes that this is generated by activists' uncritical populism, or the anarchist anthrology of David Graeber's Debt, or the reification of Bowles-Simpson's debt talk. But this is putting the carriage before the horse. A little over a year ago, I wrote some code that went through the We are the 99% Tumblr and parsed it for clues about what was motivating the people submitting their stories. And even I was shocked at how much student debt, medical debt, and debt overall were factors in those people's misery. It is how they identify the challenges they face, and this was equally so at Occupy sites.

It's fun to imagine people writing hostile comments on that 99% tumblr saying that all these people's misery is not useful to the cause because it focuses on the sphere of circulation instead of the sphere of production. But this is what is behind young people's suffering and it is an important project to address it as such. Linking it to a larger project of broad-based propserity is the work of others, and I believe the Strike Debt people are trying to do so.

Henwood also argues that Strike Debt can't buy in sufficiently large amount to buy up all the debt. That's true, but hardly the goal. He also brings up the idea that bankruptcy is a universal solvent here and should be emphasized over other projects. I disagree. To go back to Ronald Mann's "sweat-box" theory of bankrutpcy, the fees, waiting period, and other charges involved in post-2005 bankruptcy means that the legal DNA of bankruptcy code, while very useful, amplifies these problems. You can see it in the academic research that finds a spike in bankruptcy filings after people get tax rebates, because they finally have the resources to declare bankruptcy. You also see it in this random We Are the 99% tumblr entry, which notes, "I have been trying for the last 4 years to save $2000 to file bankruptcy for $5000-$10000 medical debt. It still hasn’t happened."

There are other worries that I find to be more important.

First, it's a big problem that it isn't clear yet whether those whose debt will be forgiven are stuck with a tax bill. Blogs are going back and forth on this issue, though the IRS should have given a comment already. That there aren't, say, tax attorneys Occupy can direct people to is a problem. It's funny that, given Marcel Mauss' influence on David Graeber and many in Occupy, the tax issue might hinge on being able to legally define what a "gift" is.

Another worry is whether or not this will build a community of people committed to the cause going forward. According to a Strike Debt spokesperson, when they forgive debts they send certified mail containing the Debt Resistor's Operation Manual and a notice explaining what the Debt Jubilee is. Contrast it with foreclosure activism,  where there is a lot of work that goes into building up the person in their community and making sure the person has the strength and the resources to both fight and contribute back. I've debated whether or not this is an actual problem, but it is certainly not sufficient to keep me from being excited. The people contributing are more energized than I had expected to see, which means you many see a community of people vested on the donation end as well.

The last issue is debt itself. As Jacob Hacker and Nathaniel Loewentheil argued in the Boston Review forum on debt, "[B]y focusing so much on debt...the challenge of reform appears both smaller and larger than it really is. Smaller because providing write-downs for households with underwater mortgages, while valuable, would not be enough...[yet a debt focus sets] sights higher than necessary... [W]e do not have to change people’s conception of debt or personal responsibility... [A] broad coalition will be based more on effective organizing than on consciousness-raising or cultural change around debt."

I think in the long-run Hacker is right, which is why I'm happy that the Strike Debt coalition has worked to link its concerns back to larger ones of public health care, free education, and a more robust safety net. Weaving these concerns with broader ones is precisely the work that needs to be done.

Last year, Suresh Naidu sent me the following chart, which is an evolution of different tactics during the civil rights movement, 1955-1962, charted by frequency of occurrences:

This chart is taken from Tactical Innovation and the Pace of Insurgency by the sociologist Doug McAdam. Tactists will come and go. What is necessary to keep in mind are the goals and the spirit of experimentation. I hope you check out the telethon tonight and follow the Strike Debt news to see if this is a wave of experiments worth following in the months ahead.

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Dagan and Teles on the Conservative Movement Against Mass Incarceration

Nov 13, 2012Mike Konczal

David Dagan and Steven M. Teles have a great, 5K+ word story about changing movement conservative attitudes against prisons in the recent issue of the Washington Monthly. I've worried that the changing narrative about conservatives and prisons have mostly been about minor cosmetic changes.

David Dagan and Steven M. Teles have a great, 5K+ word story about changing movement conservative attitudes against prisons in the recent issue of the Washington Monthly. I've worried that the changing narrative about conservatives and prisons have mostly been about minor cosmetic changes. Having completed their project of incapacitation through mass incarceration, conservatives can tinker at the edge, especially to bring in favored groups like charity workers or government privatizers. This article gives some hope, implying that the changes are real, very serious about both the conditions of prisons and after prison, but also the policies that lead to too many people being locked up for too long. And these reforms are likely to build upon themselves going forward.

Before you start the Dagan/Teles paper, here's a quick reading guide summarizing some worries one might have about the conservative anti-prison project.

- The obvious one is that this is primarily about getting the large amount of money that flows through criminal justice into private hands. This isn't just private ownership of prisons expanding (though If you look at the 10 states in the U.S. that rely the most on private prisons, they incarcerate a percentage of their population in privately owned facilities roughly equivalent to what Europe does in all its facilities). It's things like ALEC's project of privatizing parole.

- Another worry is that this is less focused on reducing mass incarceration than finding more policy for the proper management of incarcerated people. Laissez-faire classical liberals have always been fascinated by the efficient management of people behind bars. People often encounter the idea of laissez-faire Jeremy Bentham's panopticon prison through Michel Foucault's use of it as a metaphor for modernity, but Bentham was being a policy wonk when he was writing about it. He wrote the equivalent of 19th century white papers proposing an all-seeing prison with titles like "Proposal for a New and Less Expensive mode of Employing and Reforming Convicts." His arguments for it were all focused on good public policy, like "morals reformed, health preserved, industry invigorated, instruction diffused, public burthens lightened, economy seated as it were upon a rock, the gordian knot of the poor-laws not cut but untied -- all by a simple idea in architecture?" If he was writing about the panopticon today, you could imagine Bentham arguing that an all-seeing prison would bend the incarceration cost curve during an interview with Dylan Matthews on Wonkblog.

Which is a long way of saying that conservatives often like reforms that try to deal with the chaos and waste of mass incarceration instead of dealing with why our prison system is the largest in the world. They want prison charities to provide aid to those who have become despondent from being locked up, or prison markets designed to teach job skills to those who have been removed from the labor markets. Note that you could just lock up fewer people rather than finding clever ways to try and use more government to solve problems that the government is creating. We are locking up too many people, for too long, for the wrong reasons. Finding better ways to manage the people locked up, while often a praiseworthy goal, might be a distraction.

- Another worry is anti-federalism. The recent attempt by Jim Webb to create a comission dedicated to widespread criminal justice reform failed in the Senate. Republicans killed it because "allowing a federal commission to examine state and local criminal justice systems would encroach on states' rights." The 2012 GOP platform, which many people found encouraging on the issue of incarceration, had a strong focus on the "over-federalization of offenses" and called on Congress to "reconsider the extent to which it has federalized offenses traditionally handled on the State or local level." Though this is important, a lot of changes need to happen at the state and local level too.

- The last worry is the straightjacketing of judges. This is the wave of policy that has created the conditions where, as William Stuntz wrote, "criminal law does not function as law. Rather, the law defines a menu of options for police officers and prosecutors to use as they see fit." Do conservative reformers get worried about the militarization of the police? The courtroom becoming a factory of plea bargains determined by prosecutors?

As I said earlier, the Dagan/Teles piece gives me hope that these won't be major stumbling blocks. But I'd love to read your thoughts in comments.

One thing I would like to see addressed in the future is an answer to this: "By and large, however, it is conservative institutions who now pay the most attention to criminal justice." Why aren't liberal institutions? The failure of liberal groups to prioritize this issue was one of the provocative parts of Michelle Alexander's The New Jim Crow, and the question still needs an answer.

 

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