Are Student Loans Becoming a Macroeconomic Issue?

Apr 23, 2013Mike Konczal

What's the general economic consensus on the impact of student loans on the household finances of those who hold them? Here's "Student Loans: Do College Students Borrow Too Much—Or Not Enough?" (Christopher Avery and Sarah Turner, 2012), which argues, "[t]here is little evidence to suggest that the average burden of loan repayment relative to income has increased in recent years." Using data from 2004-2009, the authors find that "the mean ratio of monthly payments to income is 10.5 percent" for those in repayment six years after initial enrollment.

They boost that number with a 2006 study by Baum and Schwarz to conclude that two trends cancel each other out: there's rising debt but steady student debt-to-income ratios. How can this happen? It "can be attributed to a combination of rising earnings, declining interest rates, and increased use of extended repayment options." This is how, though average total undergraduate debt jumped 66 percent to a value of $18,900 from 1997 to 2002, "average monthly payments increased by only 13 percent over these five years. The mean ratio of payments to income actually declined from 11 percent to 9 percent because borrower.”

Let's put this a different way. If you asked economists looking at the data if student loans could be having a macroeconomic effect, especially through a financial burden on those that have them, they'd say that the actual percent of monthly income paying student loans hasn't changed all that much since the 1990s. They may be making larger lifetime payments, since they'll carry the debts longer, but that's a choice they are making, which could reflect positive or negative developments. Certaintly there's no short-term strain. So there aren't any economic consequences worth mentioning when it comes to student loans.

I always thought this approach had problems. First, they were only looking at the pre-crisis era, so we couldn't see the impact of student loans once we hit a serious problem. And they were just rough averages of short-term income aggregates, rather than looking at specific individuals with or without student-debt and seeing what kinds of spending, particularly on longer-term durable goods, they do. But since I had no data myself, I never pushed on this very hard. Part of the problem is that student loans have happened relatively quickly, so quantitatively it's hard for data agencies to adjust their techniques to "see" this data easily, and not just lump them in with "other debts."

That is starting to change. The Federal Reserve Bank of New York is doing some high-end analysis of student loans, and their economists Meta Brown and Sydnee Caldwell have a great post from last week, "Young Student Loan Borrowers Retreat from Housing and Auto Markets." They find that over the past decade, people with student loans were more likely to have a mortgage at age 30 and a car loan at age 25. In the crisis this edge has collapsed:

There's a similar dynamic for car loans.

The researchers argue that two obvious explanations stands out for this collapse. The first is that the actual future expected earnings have fallen for this group, so they are going to spend less. The second is that credit constraints are especially binding, as those with student loans have a worse credit score than those without.

Derek Thompson at The Altantic Business responds critically, arguing that: (1) cars and mortgages are falling out of favor with young people, so this is likely a secular trend; (2) young people are essentially doing a "debt swap," switching cars and mortgages for education to take advantage of an education premium, and the cars and mortgages will come later; and (3) though this is, at best, a short-term drag on the economy and reflecting short-term problems, it'll super-charge our economy come later.

What should we make of this?

(1) It's possible that there is a secular trend to it, with young people not wanting mortgages or cars. But why wouldn't the spread survive? "People with student loans" is a broad category of people, and it is difficult to assume that it's just people moving to become renters in urban cores driving the entire thing. The collapse of the spread between the two coinciding with the crisis makes it hard to believe it's just a coincidence.

(2) As discussed at the beginning, the overall idea in the student loan data literature is that student loans shouldn't have a negative impact on consumption, especially at the national level. The extra cost of servicing the debt is more than balanced out by the extra income earned, even if the length of the debt needs to adjust to meet that. Indeed, there's often a "best investment ever" or "leaving money on the table" aspect to the discussion of higher education and student loans. So if this data holds, it's a major change from the normal way economists understand this.

And the issue of student debt is where the problem with the "education premium" is going to hit a wall. The college premium is driven just as much by high school wages falling as it is by college-educated wages increasing, which has slowed in the past decade. So if you have to take on large debt to secure a stagnating college-level income, it suddenly isn't clear that it is such a great deal, even if there's a strictly defined "premium" over the alternative.

(3) It isn't clear that the upswing in people, particularly women, taking on additional education is involved with this collapse in borrowing, as the ages of 25 and 30 cut off many people in school. I think it would reflect the collapse in the housing market, but the auto loan market is there as well. It is true that the economy as a whole is deleveraging, but that is largely reflective of housing and foreclosures.

How much this reverts if we get back to full employment and whether there's a "swap" that could lead to a better long-term economy are good questions, but the fact that we even have to put the question these way shows a change in what economists believed about student loans. No matter what, this shows that education isn't enough of an insurance against the business cycle.

And I actually see it the other way - right now Ben Bernanke is working overtime to try and get interest rates to the lowest they've ever been, and he still can't induce borrowing by college-educated young people. Congress also lowered interest rates on new student loans, though too many student loans are out there at high rates given the disinflationary times. If the lower lending isn't the result of institutional issues with credit scores, that means college-educated young people are particularly battered in this economy. And there could be a low-level drag on the economy for the foreseeable future.

If the New York Fed is taking requests, the biggest question I have is how student loans are impacting household formations. Young people are living with their parents for longer at a point where getting an additional million homebuyers would supercharge the economy. Are they living at home because they are unemployed, or because they are un(der)employed and have student loans? If it is the second, then there's definitely a serious lag on the economy.

But the real issue revealed by this study is that this stuff is important. It is showing up in national data; the people arguing that student loans simply disappear under higher earnings now have a macroeconomic issue to deal with.

Follow or contact the Rortybomb blog:

  

 

What's the general economic consensus on the impact of student loans on the household finances of those who hold them? Here's "Student Loans: Do College Students Borrow Too Much—Or Not Enough?" (Christopher Avery and Sarah Turner, 2012), which argues, "[t]here is little evidence to suggest that the average burden of loan repayment relative to income has increased in recent years." Using data from 2004-2009, the authors find that "the mean ratio of monthly payments to income is 10.5 percent" for those in repayment six years after initial enrollment.

They boost that number with a 2006 study by Baum and Schwarz to conclude that two trends cancel each other out: there's rising debt but steady student debt-to-income ratios. How can this happen? It "can be attributed to a combination of rising earnings, declining interest rates, and increased use of extended repayment options." This is how, though average total undergraduate debt jumped 66 percent to a value of $18,900 from 1997 to 2002, "average monthly payments increased by only 13 percent over these five years. The mean ratio of payments to income actually declined from 11 percent to 9 percent because borrower.”

Let's put this a different way. If you asked economists looking at the data if student loans could be having a macroeconomic effect, especially through a financial burden on those that have them, they'd say that the actual percent of monthly income paying student loans hasn't changed all that much since the 1990s. They may be making larger lifetime payments, since they'll carry the debts longer, but that's a choice they are making, which could reflect positive or negative developments. Certaintly there's no short-term strain. So there aren't any economic consequences worth mentioning when it comes to student loans.

I always thought this approach had problems. First, they were only looking at the pre-crisis era, so we couldn't see the impact of student loans once we hit a serious problem. And they were just rough averages of short-term income aggregates, rather than looking at specific individuals with or without student-debt and seeing what kinds of spending, particularly on longer-term durable goods, they do. But since I had no data myself, I never pushed on this very hard. Part of the problem is that student loans have happened relatively quickly, so quantitatively it's hard for data agencies to adjust their techniques to "see" this data easily, and not just lump them in with "other debts."

That is starting to change. The Federal Reserve Bank of New York is doing some high-end analysis of student loans, and their economists Meta Brown and Sydnee Caldwell have a great post from last week, "Young Student Loan Borrowers Retreat from Housing and Auto Markets." They find that over the past decade, people with student loans were more likely to have a mortgage at age 30 and a car loan at age 25. In the crisis this edge has collapsed:

There's a similar dynamic for car loans.

The researchers argue that two obvious explanations stands out for this collapse. The first is that the actual future expected earnings have fallen for this group, so they are going to spend less. The second is that credit constraints are especially binding, as those with student loans have a worse credit score than those without.

Derek Thompson at The Altantic Business responds critically, arguing that: (1) cars and mortgages are falling out of favor with young people, so this is likely a secular trend; (2) young people are essentially doing a "debt swap," switching cars and mortgages for education to take advantage of an education premium, and the cars and mortgages will come later; and (3) though this is, at best, a short-term drag on the economy and reflecting short-term problems, it'll super-charge our economy come later.

What should we make of this?

(1) It's possible that there is a secular trend to it, with young people not wanting mortgages or cars. But why wouldn't the spread survive? "People with student loans" is a broad category of people, and it is difficult to assume that it's just people moving to become renters in urban cores driving the entire thing. The collapse of the spread between the two coinciding with the crisis makes it hard to believe it's just a coincidence.

(2) As discussed at the beginning, the overall idea in the student loan data literature is that student loans shouldn't have a negative impact on consumption, especially at the national level. The extra cost of servicing the debt is more than balanced out by the extra income earned, even if the length of the debt needs to adjust to meet that. Indeed, there's often a "best investment ever" or "leaving money on the table" aspect to the discussion of higher education and student loans. So if this data holds, it's a major change from the normal way economists understand this.

And the issue of student debt is where the problem with the "education premium" is going to hit a wall. The college premium is driven just as much by high school wages falling as it is by college-educated wages increasing, which has slowed in the past decade. So if you have to take on large debt to secure a stagnating college-level income, it suddenly isn't clear that it is such a great deal, even if there's a strictly defined "premium" over the alternative.

(3) It isn't clear that the upswing in people, particularly women, taking on additional education is involved with this collapse in borrowing, as the ages of 25 and 30 cut off many people in school. I think it would reflect the collapse in the housing market, but the auto loan market is there as well. It is true that the economy as a whole is deleveraging, but that is largely reflective of housing and foreclosures.

How much this reverts if we get back to full employment and whether there's a "swap" that could lead to a better long-term economy are good questions, but the fact that we even have to put the question these way shows a change in what economists believed about student loans. No matter what, this shows that education isn't enough of an insurance against the business cycle.

And I actually see it the other way - right now Ben Bernanke is working overtime to try and get interest rates to the lowest they've ever been, and he still can't induce borrowing by college-educated young people. Congress also lowered interest rates on new student loans, though too many student loans are out there at high rates given the disinflationary times. If the lower lending isn't the result of institutional issues with credit scores, that means college-educated young people are particularly battered in this economy. And there could be a low-level drag on the economy for the foreseeable future.

If the New York Fed is taking requests, the biggest question I have is how student loans are impacting household formations. Young people are living with their parents for longer at a point where getting an additional million homebuyers would supercharge the economy. Are they living at home because they are unemployed, or because they are un(der)employed and have student loans? If it is the second, then there's definitely a serious lag on the economy.

But the real issue revealed by this study is that this stuff is important. It is showing up in national data; the people arguing that student loans simply disappear under higher earnings now have a macroeconomic issue to deal with.

Follow or contact the Rortybomb blog:

  

 

Share This

If More Efficient Government is the Goal, Capping Revenues Isn't the Answer

Apr 18, 2013Joelle Gamble

Arbitrarily limiting revenues and cutting critical services doesn't boost efficiency; it just shifts the burden onto citizens.

Arbitrarily limiting revenues and cutting critical services doesn't boost efficiency; it just shifts the burden onto citizens.

The 2013 tax-filing deadline is just a few days behind us, but many Republican members of Congress have already started talking about this year’s revenue intake. Due to CBO projections that federal revenues in 2013 will be the highest in history, Republicans are arguing that the real issue with government is that it has a serious spending problem, and that it is too big and too inefficient to allow for domestic economic prosperity. Predictably, their solution to this problem is to cut taxes and spending. But this approach could actually create more of the inefficiency they claim to oppose.

If we want to build a more efficient government and increase economic prosperity, we should not slash critical government services or restrict revenues across the board. In fact, in a still weak and recovering economy, limiting revenues can heighten inefficiencies in government in a way that exacerbates resource inequalities. We can look to the effects of state property tax caps in Massachusetts and California as local-scale examples of what happens when we try to shrink government just for the sake of shrinking it.

In 1978, at the height of an anti-tax wave, California voters passed proposition 13, a cap on residential and commercial property taxes. Under the new law, increases in tax rates on assessed real property values essentially cannot exceed 2 percent per year. In addition, the law imposed two strict requirements for how new state and local revenues can be raised: State taxes can only be increased either by ballot or with a supermajority vote in both houses of the state legislature, and special-purpose taxes by local governments can only be increased by a supermajority of votes in a local election.

Similarly, Massachusetts’ proposition 2 ½, passed in 1980, limited property tax revenues to 2.5 percent of an area’s assessed property value while also capping growth in revenue from those assessments to 2.5 percent per annum.

Arguments in favor of these initiatives assert that caps on taxes are a needed move to increase government efficiency and to relieve strained families from the economic burden of higher taxes. Essentially the same ideas are permeating the national debate around the federal budget and deficit reduction as deficit hawks claim that government is too big and its spending is too much of a burden on the economy. Recently, as Roosevelt Institute Fellow Mike Konzcal notes, evidence has been growing that this argument is built on shaky ground.

Caps on annual property assessments, which had been a statistically stable source of revenue, forced municipalities to scramble to adjust to the permanent loss of resources, resulting in haphazard cuts and unreliable financial decision-making. Coupled with the movement to give more direct power over taxation to the voters (see CA proposition 218, the Right to Vote on Taxes Act), this state of uncertainty has only calcified – and uncertainty does not breed the efficient government systems that anti-tax advocates have promised.

Furthermore, instead of providing “efficiency savings” to state and local government, reduced revenues have simply shifted the burden of providing services from a stable entity onto the backs of the affected communities. The price of basic government operations doesn’t suddenly get cheaper because there is less revenue. It forces officials to sacrifice important programs to cover basic operational costs, and often the people who relied on those programs are those who can least afford to take the sudden hit. For local low- and middle-income communities in California and Massachusetts, this meant school funding shortages that exist to this day. At the federal level, the mounting effects of sequestration on various services and workers are setting up similar long-term problems.

Everything is amplified in a weak or recovering economy. Direct cuts to services that low- and middle-income communities rely on only exacerbate economic inequality and further hamper future prosperity. Families who already are having difficulty paying bills will be forced to deal with new challenges, from cuts to student aid and Medicaid to being laid off or furloughed.

In setting our fiscal course for the next several years, Congress should take a hard look at the risks taken by the states and avoid caving into the idea that revenue is a necessary evil to be restricted as much as possible. We can agree that our common goal is a smarter, more efficient government; however, cutting revenue streams to force reform is not the smartest, most efficient policy to achieve that goal.

Joelle Gamble is Deputy Field Director of the Roosevelt Institute | Campus Network.

Share This

Higher Ed Cuts Could Hold States and Students Back

Mar 21, 2013

President Obama has talked about the need to "win the future" by investing in higher education, but based on the deep budget cuts states have made in recent years, it looks more like we're trying to forfeit. A new report from the Center on Budget and Policy Priorities finds that states are now spending 28 percent less per student on higher education than they were before the recession.

President Obama has talked about the need to "win the future" by investing in higher education, but based on the deep budget cuts states have made in recent years, it looks more like we're trying to forfeit. A new report from the Center on Budget and Policy Priorities finds that states are now spending 28 percent less per student on higher education than they were before the recession. Many states have experienced a budget crunch due to decreased tax revenues, but instead of raising tax rates to close the gap, they've often resorted to counterproductive cuts in public resources and services. In the case of higher education, those cuts have been passed on to students and their families in the form of soaring tuition rates. CBPP finds that per-student revenue fell by $2,600 while per-student tuition rose by $2,600 in the last 25 years. But even tuition hikes aren't covering the full cost of state budget cuts, so public colleges and universities have been forced to lay off staff and elminate programs while students wind up paying more for less.

The Roosevelt Institute | Campus Network and the United States Students Association released a report this week on Millennial solutions to the student debt crisis, and this is part of the problem. If we're not willing to invest more in our public university systems, we won't just be driving students further into debt. We'll be denying them the quality education they need to become productive and competitive members of the work force.

Share This

The Real State of the Union Requires a Stronger Government

Feb 15, 2013David B. Woolner

Instead of downplaying the role of government, we should recommit to a "spirit of charity."

We of the Republic sensed the truth that democratic government has innate capacity to protect its people against disasters once considered inevitable, to solve problems once considered unsolvable…

In this we Americans were discovering no wholly new truth; we were writing a new chapter in our book of self-government . –Franklin D. Roosevelt, 1937

Instead of downplaying the role of government, we should recommit to a "spirit of charity."

We of the Republic sensed the truth that democratic government has innate capacity to protect its people against disasters once considered inevitable, to solve problems once considered unsolvable…

In this we Americans were discovering no wholly new truth; we were writing a new chapter in our book of self-government . –Franklin D. Roosevelt, 1937

In his State of the Union address, President Obama challenged the Congress and the American people to join him in a common effort to make the United States a better nation; to recognize that while we “may do different jobs, and wear different uniforms” we are all “citizens” imbued with the rights and responsibility “to be the authors of the next great chapter in our American story.”

Certainly, the president’s call for “investments” in setting up universal preschool, increasing access to higher education, promoting research and development, fixing our broken infrastructure, and establishing a higher minimum wage so that in “the wealthiest nation on earth, no one who works full-time should have to live in poverty,” is a welcome development. So too is the president’s acknowledgment that there are still communities in this country where, thanks to inescapable pockets of rural and urban poverty, young adults find it virtually impossible to find their first job. “America,” he insisted, shouldnot [be] a place where chance of birth or circumstance should decide our destiny.”

And yet, if we examine the state of our union honestly, it not only becomes apparent that we are indeed a society where “chance of birth or circumstance” decides our destiny, but also a society that has fallen far behind the rest of the world in education, health care, infrastructure, and a host of other indicators that determine the overall quality of life.

In study after study, for example, Americans are found to be far less economically mobile than their counterparts in Canada and Europe. In education, the U.S. now ranks 17th in the developed world overall, while we are ranked 25th in math, 17th in science, and 14th in reading, well behind our Asian and European counterparts. For decades the U.S, was ranked number 1 in college graduation, but we now stand at number 12, and even more shocking, we are now ranked 79th in primary school enrollment. This is no way to sustain or build a competitive edge in a global economy.

Other statistics tell a similar tale. How many Americans, for example, are aware that out of the 35 most economically advanced countries in the world, the U.S. now holds the dubious distinction of ranking 34th in terms of child poverty, second only to Romania? In infant mortality, the U.S. ranks 48th. As for overall health and life expectancy, a recent report by the Institute of Medicine and the National Research Council found that among the 17 advanced nations it surveyed, the U.S.—which in the 1950s was ranked at the top for life expectancy and disease—has declined steadily since the 1980s. Today, “U.S. men rank last in life expectancy among the 17 countries in the study and US women rank second to last.” In infrastructure, the World Economic Forum recently ranked the U.S. 25th in the world, behind virtually all other advanced industrialized nations and even some in the developing world.

Still, there are some categories where the United States ranks number one: we have the highest incarceration rate in the world—far higher than countries like Russia, China, or Iran. We have the highest obesity rate in the world and we use more energy per capita than any other nation. And while the U.S. does not possess the highest homicide rate in the world—that distinction goes to Honduras—the rate of death from firearms in the U.S. is nearly 20 times higher than it is among our economic counterparts. And on a city-by-city basis, we would find that if New Orleans were a country, for example, its homicide rate would rank number 2 in the world.

Eighty years ago, when the United States found itself in an even more precarious state than it does today, Franklin Roosevelt used the occasion of his first inaugural address to say to the American people that “this is preeminently the time to speak the truth, the whole truth, frankly and boldly,” to avoid the temptation “to shrink from honestly facing conditions in our country today.” The president then went on to implore the American people to reject the fear and apprehension that had paralyzed the nation by reminding them that “in every dark hour of our national life, a leadership of frankness and of vigor has met with that understanding and support of the people” which is essential to overcoming the challenges we face.

Four years later, in the first State of the Union address of his second term, President Roosevelt observed that “the deeper purpose of democratic government is to assist as many of its citizens as possible, especially those who need it most, to improve their conditions of life…” But, he went on, even with the “present recovery,” the United States was “far from the goal of that deeper purpose, for there were still “far-reaching problems… for which democracy must find solutions if it is to consider itself successful.”

President Obama certainly echoed these sentiments when he spoke about the meaning of citizenship and “the enduring idea that this country only works when we accept certain obligations to one another and to future generations; that our rights are wrapped up in the rights of others.” But the president said little about the role of government in ensuring that these obligations are met, and he qualified his remarks by opening his speech with his oft-repeated maxim that the American people do not expect government “to solve every problem.”

FDR took a different tack. For him government was the instrument of the common people, and as such its primary responsibility was not to serve as an arbiter between the demands of the rich and the needs of the poor, but rather as the vehicle through which the hopes and aspirations of all Americans could be met. In this he argued that:

The defeats and victories of these years have given to us as a people a new understanding of our government and of ourselves…It has been brought home to us that the only effective guide for the safety of this most worldly of worlds, the greatest guide of all, is moral principle.

We do not see faith, hope, and charity as unattainable ideals, but we use them as stout supports of a nation fighting the fight for freedom in a modern civilization…

We seek not merely to make government a mechanical implement, but to give it the vibrant personal character that is the very embodiment of human charity.

We are poor indeed if this nation cannot afford to lift from every recess of American life the dread fear of the unemployed that they are not needed in the world. We cannot afford to accumulate a deficit in the books of human fortitude.

In the place of the palace of privilege we seek to build a temple out of faith and hope and charity.

To bring about a government guided by the “spirit of charity,” FDR initiated the most far-reaching social and economic reforms in our nation’s history; reforms designed to provide the average American with a measure of economic security; reforms that reduced the vast, unjust, and unsustainable economic inequality that had brought the country to ruin just a few short years before.

If we are going to “honestly” face “conditions in our country today,” then we need to recognize that the steady abandonment of the principles of governance put in place by Franklin Roosevelt in the past three decades have done enormous harm to the state of the union. In light of this, rather than repeat the conservative mantra that government cannot solve every problem, perhaps President Obama should follow the example of President Roosevelt by reminding the Congress and the American people that even though

Governments can err, [and] presidents do make mistakes… the immortal Dante tells us that Divine justice weighs the sins of the cold-blooded and the sins of the warm-hearted on different scales.

Better the occasional faults of a government that lives in a spirit of charity than the consistent omissions of a government frozen in the ice of its own indifference.

David Woolner is a Senior Fellow and Hyde Park Resident Historian for the Roosevelt Institute. He is currently writing a book entitled Cordell Hull, Anthony Eden and the Search for Anglo-American Cooperation, 1933-1938.

Share This

Won't Somebody Please (Not) Think of the Children? On the Benefits of Pre-K for Parents.

Feb 15, 2013Mike Konczal

I wrote a piece I was pretty happy with in The American Prospect called "The Great Society's Next Frontier." Given that health care had passed and wasn't going to be overturned, the question was what would be the next battles for the liberal project. Rather than showing the exhaustion of the liberal project, I found the recent State of the Union a nice checklist of things that have been done, as well as new areas to take the project next, with some markers for a longer-term agenda.

At the Prospect I noted that a mix of "predistribution" and redistribution to expand opportunities while boosting wages were going to be an important part, and two of the ideas that addressed those issues were present in President Obama's State of the Union address: a higher minimum wage and pre-K. Pre-K is going to be a big topic, and this Boston Review symposium by James Heckman is a great place to read what experts are saying.

There's a big debate starting about how good pre-K would be for the kids involved. Would it make them smarter, more capable adults, less likely to have pathological behaviors later in life and more likely to develop a rich range of capabilities and opportunities? There is also the conversation on what that will mean for the economy as a whole. Will an additional year of schooling make us an economically richer country? Will it be a better investment than the stock market?

But there's a very interested party missing from this conversation, and that is parents themselves, particularly mothers who are working or would like to be. As my colleague Bryce Covert notes, pre-K "would also be hugely important in helping parents of all incomes go to work and know that their children are in good hands."

I'm not sure what research has or has not been done on this topic, but here are some fascinating things. A 2011 report from UC Berkeley's Labor Center on the "Economic Impacts of Early Care and Education in California" highlighted some important points. Having access to a dedicated, high-quality preschool can reduce absenteeism and turnover for working parents. Child care arrangements often break down, usually on short notice, which causes work absences as well as other problems. Headaches over child care issues can reduce productivity.

This is a fascinating experiment, from the Labor Center report:

A study of public employees in New York City who were provided with child care subsidies found that the employees had a 17.8 percent decrease in disciplinary action compared to a control group that did not receive the subsidy. Overwhelmingly, those in the subsidy group reported leaving work less often, concentrating better at work, being more productive at work, and using fewer sick days to deal with child care issues.

Fathers can and do stay home with young children, but women are more likely to do this. And this will impact women's existence in the labor market. The OECD shows that the wage gap is significantly higher for women with children and notes that the United States' public investment in child care (ages 0-5) is 0.4 percent of GDP, compared the average OECD of 0.7 percent. Lack of child care access also impacts whether women start businesses and whether they have career arcs that take full advantage of their talents.
 
This strikes me as a politically volatile point to make, if only because few people make it. Why is that? Patrick Caldwell had a piece recently in The American Prospect about the Right's obsession with an Obama re-election campaign tool called "The Life of Julia." The online infographic showed how government structures and counterbalances the risks and opportunities we face over the course of our lives. The Right, correctly, understands this as a challenge to its vision of the primacy of the (patriarchal) family and the market as having complete dominion over those risks. Using the state to give parents, and especially women, more opportunities to inhabit other roles, either in the market or not, is going to run straight into the Right's worldview.
 
I noticed a bit of this on the Left as well, specifically the parts of the Left that are distrustful of public education. In the debate over "unschooling" (lefty homeschooling, usually as a critique of the conformity of public education), Dana Goldstein pointed out the class bias in this critique. She noted "more than 70 percent of mothers with children under the age of 18 are in the workforce. One-third of all children and one-half of low-income children are being raised by a single parent. Fewer than one-half of young children, and only about one-third of low-income kids, are read to daily by an adult. Surely, this isn’t the picture of a nation ready to 'self-educate' its kids." Having an additional year of school is a major boon for parents when you understand the stresses they face.
 
But again, I'm outside the policy topics I hang outside my wonk door. What's your take?
 
Follow or contact the Rortybomb blog:
  

 

I wrote a piece I was pretty happy with in The American Prospect called "The Great Society's Next Frontier." Given that health care had passed and wasn't going to be overturned, the question was what would be the next battles for the liberal project. Rather than showing the exhaustion of the liberal project, I found the recent State of the Union a nice checklist of things that have been done, as well as new areas to take the project next, with some markers for a longer-term agenda.

At the Prospect I noted that a mix of "predistribution" and redistribution to expand opportunities while boosting wages were going to be an important part, and two of the ideas that addressed those issues were present in President Obama's State of the Union address: a higher minimum wage and pre-K. Pre-K is going to be a big topic, and this Boston Review symposium by James Heckman is a great place to read what experts are saying.

There's a big debate starting about how good pre-K would be for the kids involved. Would it make them smarter, more capable adults, less likely to have pathological behaviors later in life and more likely to develop a rich range of capabilities and opportunities? There is also the conversation on what that will mean for the economy as a whole. Will an additional year of schooling make us an economically richer country? Will it be a better investment than the stock market?

But there's a very interested party missing from this conversation, and that is parents themselves, particularly mothers who are working or would like to be. As my colleague Bryce Covert notes, pre-K "would also be hugely important in helping parents of all incomes go to work and know that their children are in good hands."

I'm not sure what research has or has not been done on this topic, but here are some fascinating things. A 2011 report from UC Berkeley's Labor Center on the "Economic Impacts of Early Care and Education in California" highlighted some important points. Having access to a dedicated, high-quality preschool can reduce absenteeism and turnover for working parents. Child care arrangements often break down, usually on short notice, which causes work absences as well as other problems. Headaches over child care issues can reduce productivity.

This is a fascinating experiment, from the Labor Center report:

A study of public employees in New York City who were provided with child care subsidies found that the employees had a 17.8 percent decrease in disciplinary action compared to a control group that did not receive the subsidy. Overwhelmingly, those in the subsidy group reported leaving work less often, concentrating better at work, being more productive at work, and using fewer sick days to deal with child care issues.

Fathers can and do stay home with young children, but women are more likely to do this. And this will impact women's existence in the labor market. The OECD shows that the wage gap is significantly higher for women with children and notes that the United States' public investment in child care (ages 0-5) is 0.4 percent of GDP, compared the average OECD of 0.7 percent. Lack of child care access also impacts whether women start businesses and whether they have career arcs that take full advantage of their talents.
 
This strikes me as a politically volatile point to make, if only because few people make it. Why is that? Patrick Caldwell had a piece recently in The American Prospect about the Right's obsession with an Obama re-election campaign tool called "The Life of Julia." The online infographic showed how government structures and counterbalances the risks and opportunities we face over the course of our lives. The Right, correctly, understands this as a challenge to its vision of the primacy of the (patriarchal) family and the market as having complete dominion over those risks. Using the state to give parents, and especially women, more opportunities to inhabit other roles, either in the market or not, is going to run straight into the Right's worldview.
 
I noticed a bit of this on the Left as well, specifically the parts of the Left that are distrustful of public education. In the debate over "unschooling" (lefty homeschooling, usually as a critique of the conformity of public education), Dana Goldstein pointed out the class bias in this critique. She noted "more than 70 percent of mothers with children under the age of 18 are in the workforce. One-third of all children and one-half of low-income children are being raised by a single parent. Fewer than one-half of young children, and only about one-third of low-income kids, are read to daily by an adult. Surely, this isn’t the picture of a nation ready to 'self-educate' its kids." Having an additional year of school is a major boon for parents when you understand the stresses they face.
 
But again, I'm outside the policy topics I hang outside my wonk door. What's your take?
 
Follow or contact the Rortybomb blog:
  

 

Mother and child image via Shutterstock.com.

Share This

What Did the State of the Union Say to Women?

Feb 14, 2013Ellen CheslerAndrea Flynn

The president didn't just lay out specific policies that will benefit women. He also shifted the theory of how government can help them.

The State of the Union address is inherently a political exercise, intended to chart a course for governing but also to let important constituencies know that they are heard and valued. On Tuesday night, President Obama seemed intent on sounding down-to-earth, sensible, unthreatening, and easy to understand. He presented a long list of concrete proposals as if there couldn’t be any disagreement over their merits.

The president didn't just lay out specific policies that will benefit women. He also shifted the theory of how government can help them.

The State of the Union address is inherently a political exercise, intended to chart a course for governing but also to let important constituencies know that they are heard and valued. On Tuesday night, President Obama seemed intent on sounding down-to-earth, sensible, unthreatening, and easy to understand. He presented a long list of concrete proposals as if there couldn’t be any disagreement over their merits.

For women, a critical voting bloc who helped deliver his second term, the president checked off many important boxes. He spoke about ending violence against women, guaranteeing them equal pay, preventing teen pregnancy, providing working families with more daycare and early child education, and promoting military women in combat roles. He also acknowledged that women around the world are drivers of prosperity and must be empowered if we hope to reduce global poverty and secure emerging democracies.

Hearing this litany of familiar issues was reassuring, but the overall theme of the speech provided an even more important takeaway. Without much fanfare, the president put forward a reshaped agenda for government programs that are, as he put it, not “bigger” but “smarter.” This is vital for women because it would have the government target policies and marshal resources for women and families, which, in turn, prevent larger and costlier social and economic problems. It’s a welcome departure from forgetting about women and children and waiting around to address the unfortunate consequences after the fact.

No grand principles were enunciated. But the president craftily put forward a theory of change that emphasizes strategic and comprehensive investments and interventions to establish a floor of well being for at-risk women and families.

  • He called on the House of Representatives to follow the Senate’s lead and reauthorize the Violence Against Women Act, not just as a moral imperative but because studies since its passage demonstrate the effectiveness of the social services and criminal justice reforms this pioneering legislation funds. Over two decades, rates of intimate partner violence and homicides have decreased dramatically, as the White House recently reported.
  • He called for expanding mandatory and free early childhood education – currently available to only three in ten American children – not just because it’s the right thing to do for hard-pressed parents, but because the data shows that it also boosts graduation rates, decreases teen pregnancy, and even correlates with palpable reductions in violent crime in communities across the country.
  • He promised to fight to increase the minimum wage and pass the Paycheck Fairness Act. This would close a real gender earnings gap. It would also benefit the nearly two-thirds of all minimum wage workers who are female, many of them single heads of households who can’t possibly lift their families out of poverty without this critical and long overdue intervention. Small businesses have long opposed a raise, despite studies that demonstrate a return to employers through increased productivity.
  • He mentioned the Affordable Care Act only in passing, but it too provides many additional preventive policies, which, as he noted, are already improving services while driving down health care costs overall. For example, the ACA has already brought comprehensive, affordable family planning and reproductive health care to more than 1 million women. By 2016, it could extend those services to as many as 13 million additional uninsured women if the many state challenges to contraceptive coverage and the Medicaid expansion do not undermine its potential reach and impact. And here again, as we have written previously, data demonstrates incontrovertibly that these services will dramatically reduce rates of unintended pregnancy and abortion.
  • While the focus of the president’s speech was primarily domestic, he also mentioned America’s responsibilities in the world and obliquely referenced the signature efforts of his administration to mainstream gender considerations into our diplomatic, defense, and development policies. Under the president and Secretary of State Hillary Clinton, the United States has joined 30 other countries in adopting a National Action Plan on Women, Peace, and Security, facilitated by the United Nations, which applies gender considerations and disaggregates spending across all agencies to require focused investment to improve the status of women. The government recognizes that this is not just the right thing to do, but also the smarter course if our aim is to meet the security and development challenges of our foreign policy. This shift in thinking lies behind the decision to promote military women to combat rank, for example, because in conflicts that involve civilian populations, as in Afghanistan and Iraq, women officers on the frontlines have played critical roles in connecting with local populations. And local women empowered by the U.S. presence have in turn become important agents in post-conflict resolution and peace processes and in relief and reconstruction efforts.

The president’s State of the Union provided a blueprint for a strong, positive government obligation to secure the wellbeing of women and families at home and abroad. Not a lot of detail was offered, nor was there any fancy philosophical framework for what would represent a palpable shift in U.S. priorities and our traditional ways of governing. He spoke as if this was all pretty much just common sense – the better part of wisdom.

But certainly if Senator Marco Rubio’s response is any indication, the president’s intentions, however masked in straightforward, anodyne rhetoric, face innumerable obstacles to their realization. That should not, however, stop us from applauding and getting behind the potential for meaningful policy change.

Ellen Chesler and Andrea Flynn are Fellows at the Roosevelt Institute.

Share This

Are "Educational Services" Off-Setting the Reduced Number of Public Education Workers?

Jan 15, 2013Mike Konczal

One important reason the recovery has been so weak has been the collapse in the number of government employees, a decline that continues years after the recession has technically "ended." An important check on the economy, unemployment would be significant lower if there weren't 651,000 fewer government jobs since January 2009.

Education jobs are a large part of this decline. State and local education job together declined 224,700 since January 2009. These losses are entirely at the local level, with state-level education workers going up slightly over the time period. This is consistent with declining spending on public primary and secondary education broadly in the states, and a large increase in the number of young people attending higher educaiton.

But what if these public sector jobs are being replaced with private sector ones? Several people on twitter have noted that the number of "educational service" jobs have gone up quite significantly in the past several years, gaining 244,500 jobs since January 2009. What if they are replacing K-12 education workers? That would be a much different picture of how the public sector is evolving in the past several years.

Luckily, the CES has the ability to break out primary and secondary education workers from education services. Let's graph this out:

(The breakout is not seasonally adjusted, and education has large seasonal changes. As such, all these numbers are a 12-month moving average. The conclusions are robust to other specifications.)

As you can see, there's been a minimal increase in the number of private elementary and secondary school workers, on the order of an increase of 39,600, all relatively recent. The vast majority of the increase in education sector workers are working in postsecondary education. This is consistent with the large increase in post-secondary education we are seeing in this recession. The private sector isn't offsetting either the state and local level austerity imposed through the school system, nor is it, as far as I can see, offsetting the major disinvestments we are making in the education and opportunities of our young people.

 

Follow or contact the Rortybomb blog:

  

One important reason the recovery has been so weak has been the collapse in the number of government employees, a decline that continues years after the recession has technically "ended." An important check on the economy, unemployment would be significant lower if there weren't 651,000 fewer government jobs since January 2009.

Education jobs are a large part of this decline. State and local education job together declined 224,700 since January 2009. These losses are entirely at the local level, with state-level education workers going up slightly over the time period. This is consistent with declining spending on public primary and secondary education broadly in the states, and a large increase in the number of young people attending higher educaiton.

But what if these public sector jobs are being replaced with private sector ones? Several people on twitter have noted that the number of "educational service" jobs have gone up quite significantly in the past several years, gaining 244,500 jobs since January 2009. What if they are replacing K-12 education workers? That would be a much different picture of how the public sector is evolving in the past several years.

Luckily, the CES has the ability to break out different groups of educational services workers, so we can focus on primary and secondary education workers as well more post-secondary workers. Let's graph this out:

(The breakout is not seasonally adjusted, and education has large seasonal changes. As such, all these numbers are a 12-month moving average. The conclusions are robust to other specifications.)

As you can see, there's been a minimal increase in the number of private elementary and secondary school workers, on the order of an increase of 39,600, all relatively recent. The vast majority of the increase in education sector workers are working in postsecondary education. This is consistent with the large increase in post-secondary education we are seeing in this recession. The private sector isn't offsetting either the state and local level austerity imposed through the school system, nor is it, as far as I can see, offsetting the major disinvestments we are making in the education and opportunities of our young people.

Follow or contact the Rortybomb blog:

  

Share This

Are High College Costs Redistributive?

Dec 11, 2012Mike Konczal

Aaron Bady has a fantastic piece on the boosters who argue that MOOCs and other forms of online education will fundamentally transform higher education, addressed as a response to Clay Shirky. There's a few important moves to watch when people make this line of argument. Many who prize the "disruptive innovation" of higher education usually concede that what it will mostly do is provide a cheaper but poorer alternative to the large number of non-elite public institutions that educate the majority of those who seek higher education. The talk is all "Watch out Harvard and Yale! This online education company is going to take you down like Napster took down the record companies." Then it quickly reverts to the idea of providing "access," which gets much of its power through the ongoing dismantling of mass public higher education.

Note that, given that online education's success will be a function of the weakness of public education, there's a huge incentive for for-profit higher education firms to participate in that dismantling project. And sure enough, there's a great new article by Sarah Pavlus at the American Independent, "University of Phoenix fought against community college expansion." There's "so much money to be made online, and [for-profit schools] didn’t want community colleges coming in at a much lower tuition rate,” she writes. Public institutions are attempting to innovate and provide better services to citizens, but for-profit schools are trying to stop them to bolster their own bottom lines.

This is why the debate about the actual quality of online education is important. Online education can succeed not by providing a better service at a cheaper price, but instead by just providing "access" if public education slowly becomes unavailable. If there's no public option, then the quality issue becomes moot - then it is just about providing the now missing access to meet the large demand our country has for higher-level education.

Also watch for when online education boosters make an argument of higher education decline rather than online success. They do a rhetorical move to argue that the problems in the non-profit private education institutions extend to public ones. Kevin Carey, for instance, argues that "college spending is the driving force behind affordability or lack thereof in the long run" before noting several paragraphs later that "Inflation-adjusted per-student spending at private research universities, in particular, increased sharply." He quickly notes that "private universities set the aspirational standards for the industry as a whole," but public higher education cost inflation is driven mostly by declining public support, not a competitive war with private schools.

As Josh Mason pointed out, this is the equivalent of saying that since the private savings vehicle of 401(k)s have turned out to be a bit of a bust, we should scale back the public retirement vehicle of Social Security. That's not the case at all! And, if anything, we should view the public option as a version that works.

Tuition as Redistribution

But maybe higher tuition isn't a real problem. Maybe higher costs are driven by the rich paying more to help out the poor in a private form of egalitarian redistribution. A few weeks ago, Evan Soltas at Bloomberg wrote a version of this argument, which Matt Bruenig picked up on his blog (and here as well). Soltas argues that the huge rise in the advertised ("sticker") price of colleges is misleading, because the actual cost people pay ("net cost") is much lower and has been increasing at a lower rate. Soltas argues that "what has happened is a shift toward price discrimination -- offering multiple prices for the same product. Universities have offset the increase in sticker price for most families through an expansion of grant-based financial aid and scholarships." Bruenig and Soltas both emphasize that the rich pay more while the poorest pay less. They use data from the most recent Trends in College Pricing.

There are a few critical points to bring up about this analysis. Contrary to Soltas, this is driven as much, if not more, by public policy, specifically the effect of of a significant expansion in public funding, notably in Pell Grants and military grants. (I believe Soltas' graph also uses data that includes the extensive network of tax credits, which add up to a lot of money; the cross-section graphs in Bruenig's graphs does not.) From Trends in Student Aid:

This is one way of providing public funding. Another would be to drive down tuition directly. I took up the idea of supporting public provisioning directly, instead of coupons that provide targeted support, in my recent New America paper. If there are market imperfections, incumbents can capture some of the subsidy while driving up the price for all those who aren't getting the coupons. Public provisioning, in these cases, lowers the cost for everyone.

Now if you look at the net price by income, you also see those in the top income bracket, here being those with incomes over $100K a year, paying more than the poor, those under $33,000. From Bruenig's piece:

Soltas argues that "the cost burden of college has become significantly more progressive since the 1990s. Students from wealthier families not only now pay more for their own educations but also have come to heavily subsidize the costs of the less fortunate." He argues that differences in price reflects an institutional goal of cross-subsidization, where private firms make the rich pay more to compensate the poor. This didn't strike me as obvious from the data or other resources. In general, price discrimination should be thought of as a transfer from consumers to producers' surplus. Meanwhile, businesses usually don't cross-subsidize, and as we saw from the Pell Grant information, a big driver of this is poor people's payments beng compensated through public funding.

Just to confirm that higher tuition wasn't redistribution, I emailed one of the authors of the study, Sandy Baum, who told me that "very few students pay more than the actual cost of their education. Affluent students are generally subsidized less than low-income students, but they aren't actually paying any part of the cost of education for low-income students. Taxpayers generally are subsidizing Pell Grant recipients. But that's quite different from students paying more than their educational costs to cross-subsidize low-income students."

Another technical note worth making: Bruenig's graph also assumes that the poor are attending the same institutions as those who are better off. But they are almost certainly attending schools part-time instead of full-time, and cheaper institutions compared to more expensive ones. One can see this by just looking at the sticker cost of tuition. The sticker price by income has large differences that are slowly increasing.

(Net room and board and other costs has a similar dynamic.)

 Making sure that the poor can access education through grants could work as a plan over the future, though we must understand that it is a plan, specifically government planning. There are other plans we could do as well.

 

Follow or contact the Rortybomb blog:
  

Aaron Bady has a fantastic piece on the boosters who argue that MOOCs and other forms of online education will fundamentally transform higher education, addressed as a response to Clay Shirky. There's a few important moves to watch when people make this line of argument. Many who prize the "disruptive innovation" of higher education usually concede that what it will mostly do is provide a cheaper but poorer alternative to the large number of non-elite public institutions that educate the majority of those who seek higher education. The talk is all "Watch out Harvard and Yale! This online education company is going to take you down like Napster took down the record companies." Then it quickly reverts to the idea of providing "access," which gets much of its power through the ongoing dismantling of mass public higher education.

Note that, given that online education's success will be a function of the weakness of public education, there's a huge incentive for for-profit higher education firms to participate in that dismantling project. And sure enough, there's a great new article by Sarah Pavlus at the American Independent, "University of Phoenix fought against community college expansion." There's "so much money to be made online, and [for-profit schools] didn’t want community colleges coming in at a much lower tuition rate,” she writes. Public institutions are attempting to innovate and provide better services to citizens, but for-profit schools are trying to stop them to bolster their own bottom lines.

This is why the debate about the actual quality of online education is important. Online education can succeed not by providing a better service at a cheaper price, but instead by just providing "access" if public education slowly becomes unavailable. If there's no public option, then the quality issue becomes moot - then it is just about providing the now missing access to meet the large demand our country has for higher-level education.

Also watch for when online education boosters make an argument of higher education decline rather than online success. They do a rhetorical move to argue that the problems in the non-profit private education institutions extend to public ones. Kevin Carey, for instance, argues that "college spending is the driving force behind affordability or lack thereof in the long run" before noting several paragraphs later that "Inflation-adjusted per-student spending at private research universities, in particular, increased sharply." He quickly notes that "private universities set the aspirational standards for the industry as a whole," but public higher education cost inflation is driven mostly by declining public support, not a competitive war with private schools.

As Josh Mason pointed out, this is the equivalent of saying that since the private savings vehicle of 401(k)s have turned out to be a bit of a bust, we should scale back the public retirement vehicle of Social Security. That's not the case at all! And, if anything, we should view the public option as a version that works.

Tuition as Redistribution

But maybe higher tuition isn't a real problem. Maybe higher costs are driven by the rich paying more to help out the poor in a private form of egalitarian redistribution. A few weeks ago, Evan Soltas at Bloomberg wrote a version of this argument, which Matt Bruenig picked up on his blog (and here as well). Soltas argues that the huge rise in the advertised ("sticker") price of colleges is misleading, because the actual cost people pay ("net cost") is much lower and has been increasing at a lower rate. Soltas argues that "what has happened is a shift toward price discrimination -- offering multiple prices for the same product. Universities have offset the increase in sticker price for most families through an expansion of grant-based financial aid and scholarships." Bruenig and Soltas both emphasize that the rich pay more while the poorest pay less. They use data from the most recent Trends in College Pricing.

There are a few critical points to bring up about this analysis. Contrary to Soltas, this is driven as much, if not more, by public policy, specifically the effect of of a significant expansion in public funding, notably in Pell Grants and military grants. (I believe Soltas' graph also uses data that includes the extensive network of tax credits, which add up to a lot of money; the cross-section graphs in Bruenig's graphs does not.) From Trends in Student Aid:

This is one way of providing public funding. Another would be to drive down tuition directly. I took up the idea of supporting public provisioning directly, instead of coupons that provide targeted support, in my recent New America paper. If there are market imperfections, incumbents can capture some of the subsidy while driving up the price for all those who aren't getting the coupons. Public provisioning, in these cases, lowers the cost for everyone.

Now if you look at the net price by income, you also see those in the top income bracket, here being those with incomes over $100K a year, paying more than the poor, those under $33,000. From Bruenig's piece:

Soltas argues that "the cost burden of college has become significantly more progressive since the 1990s. Students from wealthier families not only now pay more for their own educations but also have come to heavily subsidize the costs of the less fortunate." He argues that differences in price reflects an institutional goal of cross-subsidization, where private firms make the rich pay more to compensate the poor. This didn't strike me as obvious from the data or other resources. In general, price discrimination should be thought of as a transfer from consumers to producers' surplus. Meanwhile, businesses usually don't cross-subsidize, and as we saw from the Pell Grant information, a big driver of this is poor people's payments beng compensated through public funding.

Just to confirm that higher tuition wasn't redistribution, I emailed one of the authors of the study, Sandy Baum, who told me that "very few students pay more than the actual cost of their education. Affluent students are generally subsidized less than low-income students, but they aren't actually paying any part of the cost of education for low-income students. Taxpayers generally are subsidizing Pell Grant recipients. But that's quite different from students paying more than their educational costs to cross-subsidize low-income students."

Another technical note worth making: Bruenig's graph also assumes that the poor are attending the same institutions as those who are better off. But they are almost certainly attending schools part-time instead of full-time, and cheaper institutions compared to more expensive ones. One can see this by just looking at the sticker cost of tuition. The sticker price by income has large differences that are slowly increasing.

(Net room and board and other costs has a similar dynamic.)

 Making sure that the poor can access education through grants could work as a plan over the future, though we must understand that it is a plan, specifically government planning. There are other plans we could do as well.

 

Follow or contact the Rortybomb blog:
  

Share This

Mike Konczal: Is Occupy a Small Government Movement?

Nov 29, 2012

In the latest episode of the Roosevelt Institute's Bloggingheads series, Fireside Chats, Fellow Mike Konczal talks to Yale JD/PhD candidate Jeremy Kessler about the intersection of the law and the left and about

In the latest episode of the Roosevelt Institute's Bloggingheads series, Fireside Chats, Fellow Mike Konczal talks to Yale JD/PhD candidate Jeremy Kessler about the intersection of the law and the left and about leftists who dissent from mainstream progressivism. In the clip below, they discuss whether the Occupy movement, which Mike says has "made a comeback recently" with Strike Debt and Occupy Sandy, represents a libertarian rejection of the state rather than a progressive revolution.

Mike notes that despite Occupy's renewed vigor, some progressives continue to write "quasi-obituaries" that paint it as an aimless anarchist movement. Critics argue that "when you think of them creating a whole new world in Zuccotti Park" it sounds like "the gulches of Ayn Rand novels," and that "a lot of this focus on mutual aid essentially fills in for a rapidly receding government presence under neoliberalism." Mike says this can be seen with Occupy Sandy, which essentially serves as a replacement for FEMA, or the push for homeschooling, which is "just amplifying the way the state is privatizing and dismantling public education." But while Jeremy admits "there is a lot of allergy to the idea of centralized power" in the movement, he and Mike agree that it advances the left's cause by highlighting the failure of the neoliberal state and the "zones of privation" that the shrinking of government has created.

For more, including their discussion of the changing politics of the Supreme Court and the conservative police state, check out the full video below:

Share This

Mike Konczal: Is Occupy a Small Government Movement?

Nov 29, 2012

In the latest episode of the Roosevelt Institute's Bloggingheads series, Fireside Chats, Fellow Mike Konczal talks to Yale JD/PhD candidate Jeremy Kessler about the intersection of the law and the left and about leftists who dissent from mainstream progressivism. In the clip below, they discuss whether the Occupy movement, which Mike says has "made a comeback recently" with Strike Debt and Occupy Sandy, represents a libertarian rejection of the state rather than a progressive revolution.

In the latest episode of the Roosevelt Institute's Bloggingheads series, Fireside Chats, Fellow Mike Konczal talks to Yale JD/PhD candidate Jeremy Kessler about the intersection of the law and the left and about leftists who dissent from mainstream progressivism. In the clip below, they discuss whether the Occupy movement, which Mike says has "made a comeback recently" with Strike Debt and Occupy Sandy, represents a libertarian rejection of the state rather than a progressive revolution.

Mike notes that despite Occupy's renewed vigor, some progressives continue to write "quasi-obituaries" that paint it as an aimless anarchist movement. Critics argue that "when you think of them creating a whole new world in Zuccotti Park" it sounds like "the gulches of Ayn Rand novels," and that "a lot of this focus on mutual aid essentially fills in for a rapidly receding government presence under neoliberalism." Mike says this can be seen with Occupy Sandy, which essentially serves as a replacement for FEMA, or the push for homeschooling, which is "just amplifying the way the state is privatizing and dismantling public education." But while Jeremy admits "there is a lot of allergy to the idea of centralized power" in the movement, he and Mike agree that it advances the left's cause by highlighting the failure of the neoliberal state and the "zones of privation" that the shrinking of government has created.

For more, including their discussion of the changing politics of the Supreme Court and the conservative police state, check out the full video below:

Share This

Pages