Wednesday, December 23, 2020
Washington Metro and the Dismal Side of Privatization
Washington Metro and the Dismal Side of Privatization
The Washington Post ran a story November 13, 2019 about an area bus strike, which perfectly and transparently illustrates the dismal side of privatization. [Justin George and Luz Lazo, “Bus Strike in N. Va. Poised to Spread”] It turns out a French company named Transdev, received privatization contracts from the Washington Metropolitan Area Transit Authority, usually referred to as Metro, to run a bus garage and a second one to Fairfax County, Virginia to operate its Fairfax Connector bus service.
Wednesday, the day the story ran, was the 20th day of a strike of 120 garage workers at the Cinder Bed Road garage. Strikers are former Metrobus employees and members of the Amalgamated Transit Workers Union local 689 on strike in protest of wage and benefit cuts by Transdev. The Fairfax Connector bus drivers and members of Amalgamated Transit Workers local 1764 voted to authorize a strike against Transdev with a likely strike date of November 30, the date the current contract expires. The strike of garage workers has shut down 15 routes in Northern Virginia affecting 8,500 riders. A strike at the Fairfax Connector would leave 30,000 without service.
All are unhappy with Transdev pay scales set below Metro employees and with cuts in health care and benefits. Transdev defends their pay as competitive because they are able to fill their positions, but not because the pay is the same. They have further issued the usual company boilerplate claiming to be negotiating in “good faith.”
The Metro director in Fairfax encourages both sides to reach agreement, but sits on the sidelines refusing to be involved. A metro spokesman Dan Stessel excused any responsibility Metro might have telling the Washington Post “This is a labor dispute between the union and Transdev, not Metro, so while we are concerned about the impact the strike has had on our customers, we are not a party to the negotiations and are limited in the role we can play as an outside party.” This transparent and disgusting evasion reflects their failure to write and enforce protections into the contract. The Metro contract calls for Transdev to have a plant to operate the routes during strikes, which they have not done.
Then we learn Metro elected to outsource bus operations to Transdev for $89 million that saves them $15 million over five years by not paying Metro pensions and benefits. They actually admit the savings are from cuts to their workforce. Striking employees complain there is no annual pay scale and they have never had a raise. Health benefits have a $6,000 deductible.
Transdev can expect to pay the same amount for equipment and fuel as Metro. As well a privatization contract adds the cost of a second bureaucracy. Any savings in a privatization contract comes from cutting pay and benefits. Metro director Paul Weidefeld defended privatization: “And there’s lots of examples of things that are run by the private sector that are good. Doesn’t mean its always good.” He did not offer examples, but Metro would not be an example of “things that are good.”
Monday, December 14, 2020
Andy Puzder and the Pandemic Unemployed
Andy Puzder, Secretary of Labor drop out and former chief executive of CKE Restaurants, does not like the enhanced unemployed benefits. In a Washington Post op-ed piece [Unemployment benefits are causing a worker shortage” WP June 3, 2020] he claims the Pandemic Unemployment Assistance Program creates a shortage of labor because benefits are too high.
He
cites the National Federation of Independent Business (NFIB) June Jobs Report
that 32 percent of all owners reported job openings they could not fill. NFIB’s
chief economist, William C. Dunkelberg, complains “generous unemployment
benefits are making it harder for some firms to recall workers and fill open
positions.” Puzder goes on to tell us “Virtually anyone in business will tell
you that this $600 per week bonus is discouraging work.” He concludes “It isn’t
complicated. If you pay people more to stay home than to work, fewer people
will work.”
How true, but irrelevant because his comments only tell us what we already know: millions worked for less than $600 a week before the pandemic and people like Puzder earned millions exploiting them. He expects public policy to be a priority for corporate America and ignores the dangers of the pandemic entirely; it interferes with his privileges. Since $600 a week is $15 an hour for full time work, or $30,000 a year, he demands that public policy must continue to promote salaries so low they convert people into the working poor.
Friday, April 3, 2020
A Good American Family - A Review
David Maraniss, A Good American Family: The Red Scare and My Father, (NY: Simon & Shuster, 2019)
In A Good American Family: the Red Scare and My Father, journalist David Maraniss writes three intermixed narratives: a history of the 1950’s Red Scare mixed with a biography of his parents, Elliot and Mary Cummins Maraniss with their extended family, and a memoir of his own growing up in the 1950’s.
The book opens March 12, 1952 with 34 year old Elliott Maraniss at the witness table in Room 740 of a Federal building in Detroit for an inquisition before the House Un-American Activities Committee (HUAC). A paid government informer has identified everyone subpoenaed as a communist. Elliot Maraniss dabbled in left wing politics for a period at the University of Michigan in the 1930’s and after college into the 1940’s and joined a group of devotees of the Communist Party. Now his son wants to know if there is “an essential radical tradition in America” . . . “propelled by a desire not to destroy but to realize something better and fairer?” Or if not, what?
The book has 26 chapters but these are grouped into clusters of subtopics of four parts. Part one – Watching One Another - includes four chapters devoted entirely to historical material from the Red Scare - Chapter 2, 4, 5, 6 – where we meet Bereniece “Toby” Baldwin, the informer, the operation of HUAC and its Chair, Congressman John Stephens Wood, a soft spoken racist from Georgia. Then readers get the flavor of committee hearings with the inquisition of two uncooperative black men: Attorney George Crockett and a Baptist minister, Charles A. Hill.
In Chapter 3 readers meet Elliot Maraniss growing up in Brooklyn and attending Abraham Lincoln High School from 1932 to 1936. There he encountered some especially progressive educators and socially conscious liberals who introduced people like Baruch Spinoza and Willa Cather. Then in Chapter 7 readers meet Robert Cummins who will become Elliot Maraniss brother in law and David Maraniss’ uncle. The older Cummins went to the University of Michigan three years before Elliot; both worked on the Michigan Daily and shared political views.
Cummins and several of his U of M friends volunteered to serve in the Spanish Civil War and fought to protect an elected government in Spain from fascist Franco. Maraniss devotes chapters 8 and 9 to the Spanish civil war and the sacrifice and death of American volunteers that contrast with a transcript of the testimony of Cummins before the HUAC. Questions ooze with contempt for volunteers since the elected Spanish government carries the communist label.
Chapters 10-12 return to the Maraniss family history. The narrative includes Elliot’s time writing for the Michigan Daily and his term as editor; his meeting Mary Cummins and their marriage in 1939. Here Maraniss provides the HUAC transcript of Bereniece Baldwin citing Elliot Maraniss as a communist in testimony February 29, 1952. Readers learn some family consequences that include immediate firing from his copy desk job at the Detroit Times.
Part Two – In Time of War – covers Elliot’s enlistment in the army and four years of service in World War II. It describes his work as the commander of the 4482nd company, an otherwise all black unit doing repair and salvage for the Quartermaster Corps in the Pacific. The war service narrative includes two significant family letters, one written to his infant son Jimmy describing his views and hopes for him and the future of America.
The first three chapters of Part Three – Trials and Tribulations – return to Red Scare History. Maraniss narrates post war efforts to exploit the fear of communism to suppress dissent and free speech. These chapters include biographical material of members and staff of the House Un-American Activities Committee and some of the events that define the era like the 1949 trial at the Foley Square Courthouse in New York. Red Scare events give background for the appearance of Elliot Maraniss before the HUAC on March 12, 1952. The remainder of the book includes the transcript of the March 12 testimony, the prepared statement he was not allowed to read and related family woes that include the direct consequences of his firings. The consequences involved forced family moves from Detroit to New York to Ann Arbor to Cleveland back to Detroit to Bettendorf Iowa and to Madison Wisconsin over five years. The book finishes with a synopsis of the family’s lives after the last move to Madison, where readers learn life mostly returned to normal and people settled in to live productive and enjoyable lives.
The book makes a good story by itself. It flows along and reads easily and includes notes and a bibliography as an academic history would and which it sometimes resembles. Readers will also feel the personal importance of the narrative to the author, which at times sounds like a resolution of long unfocused thoughts and emotions.
Toward the end at Chapter 22 “A Good American Family” includes a three generation picture of the Cummins-Maraniss clan on the front steps of a house at 1402 Henry Street in Ann Arbor in 1950. For me the picture pulls together the stories in the book as a question: What does it mean to be a “A Good American Family?” Compare the family in the picture to your own or to some generic ideal.
The stories and details in the book repeatedly raise the question “What is patriotism?” The question comes up numerous times. One, in particular, was the testimony of the informer Berenice Baldwin and the relationship she had with her victims and elected officials. Beginning in 1943 the FBI paid her a generous salary to join the communist party in Detroit solely to systematically inform on others she met.
Over nine years she befriended many while attending their parties, baby showers and social events. Then in 1952 she appeared before the House Un-American Activities Committee to betray all of them knowing full well the hardship she would cause. Congressman Charles E. Potter, a disabled war veteran, thanked her for serving her country. He could think of no person “more worthy of a decoration for gallantry than you, Mrs. Baldwin.” Congressman Donald Jackson declared “The American people have no way of expressing directly to you their thanks.”
For them patriotism means obedience to their views delivered with authoritarian power not to be challenged. For others, patriots might believe a paid stool pigeon that betrays friends betrays the ideals the country was founded to sustain. In Good American Family readers will find plenty of opportunities to consider patriotism and what it means.
In A Good American Family: the Red Scare and My Father, journalist David Maraniss writes three intermixed narratives: a history of the 1950’s Red Scare mixed with a biography of his parents, Elliot and Mary Cummins Maraniss with their extended family, and a memoir of his own growing up in the 1950’s.
The book opens March 12, 1952 with 34 year old Elliott Maraniss at the witness table in Room 740 of a Federal building in Detroit for an inquisition before the House Un-American Activities Committee (HUAC). A paid government informer has identified everyone subpoenaed as a communist. Elliot Maraniss dabbled in left wing politics for a period at the University of Michigan in the 1930’s and after college into the 1940’s and joined a group of devotees of the Communist Party. Now his son wants to know if there is “an essential radical tradition in America” . . . “propelled by a desire not to destroy but to realize something better and fairer?” Or if not, what?
The book has 26 chapters but these are grouped into clusters of subtopics of four parts. Part one – Watching One Another - includes four chapters devoted entirely to historical material from the Red Scare - Chapter 2, 4, 5, 6 – where we meet Bereniece “Toby” Baldwin, the informer, the operation of HUAC and its Chair, Congressman John Stephens Wood, a soft spoken racist from Georgia. Then readers get the flavor of committee hearings with the inquisition of two uncooperative black men: Attorney George Crockett and a Baptist minister, Charles A. Hill.
In Chapter 3 readers meet Elliot Maraniss growing up in Brooklyn and attending Abraham Lincoln High School from 1932 to 1936. There he encountered some especially progressive educators and socially conscious liberals who introduced people like Baruch Spinoza and Willa Cather. Then in Chapter 7 readers meet Robert Cummins who will become Elliot Maraniss brother in law and David Maraniss’ uncle. The older Cummins went to the University of Michigan three years before Elliot; both worked on the Michigan Daily and shared political views.
Cummins and several of his U of M friends volunteered to serve in the Spanish Civil War and fought to protect an elected government in Spain from fascist Franco. Maraniss devotes chapters 8 and 9 to the Spanish civil war and the sacrifice and death of American volunteers that contrast with a transcript of the testimony of Cummins before the HUAC. Questions ooze with contempt for volunteers since the elected Spanish government carries the communist label.
Chapters 10-12 return to the Maraniss family history. The narrative includes Elliot’s time writing for the Michigan Daily and his term as editor; his meeting Mary Cummins and their marriage in 1939. Here Maraniss provides the HUAC transcript of Bereniece Baldwin citing Elliot Maraniss as a communist in testimony February 29, 1952. Readers learn some family consequences that include immediate firing from his copy desk job at the Detroit Times.
Part Two – In Time of War – covers Elliot’s enlistment in the army and four years of service in World War II. It describes his work as the commander of the 4482nd company, an otherwise all black unit doing repair and salvage for the Quartermaster Corps in the Pacific. The war service narrative includes two significant family letters, one written to his infant son Jimmy describing his views and hopes for him and the future of America.
The first three chapters of Part Three – Trials and Tribulations – return to Red Scare History. Maraniss narrates post war efforts to exploit the fear of communism to suppress dissent and free speech. These chapters include biographical material of members and staff of the House Un-American Activities Committee and some of the events that define the era like the 1949 trial at the Foley Square Courthouse in New York. Red Scare events give background for the appearance of Elliot Maraniss before the HUAC on March 12, 1952. The remainder of the book includes the transcript of the March 12 testimony, the prepared statement he was not allowed to read and related family woes that include the direct consequences of his firings. The consequences involved forced family moves from Detroit to New York to Ann Arbor to Cleveland back to Detroit to Bettendorf Iowa and to Madison Wisconsin over five years. The book finishes with a synopsis of the family’s lives after the last move to Madison, where readers learn life mostly returned to normal and people settled in to live productive and enjoyable lives.
The book makes a good story by itself. It flows along and reads easily and includes notes and a bibliography as an academic history would and which it sometimes resembles. Readers will also feel the personal importance of the narrative to the author, which at times sounds like a resolution of long unfocused thoughts and emotions.
Toward the end at Chapter 22 “A Good American Family” includes a three generation picture of the Cummins-Maraniss clan on the front steps of a house at 1402 Henry Street in Ann Arbor in 1950. For me the picture pulls together the stories in the book as a question: What does it mean to be a “A Good American Family?” Compare the family in the picture to your own or to some generic ideal.
The stories and details in the book repeatedly raise the question “What is patriotism?” The question comes up numerous times. One, in particular, was the testimony of the informer Berenice Baldwin and the relationship she had with her victims and elected officials. Beginning in 1943 the FBI paid her a generous salary to join the communist party in Detroit solely to systematically inform on others she met.
Over nine years she befriended many while attending their parties, baby showers and social events. Then in 1952 she appeared before the House Un-American Activities Committee to betray all of them knowing full well the hardship she would cause. Congressman Charles E. Potter, a disabled war veteran, thanked her for serving her country. He could think of no person “more worthy of a decoration for gallantry than you, Mrs. Baldwin.” Congressman Donald Jackson declared “The American people have no way of expressing directly to you their thanks.”
For them patriotism means obedience to their views delivered with authoritarian power not to be challenged. For others, patriots might believe a paid stool pigeon that betrays friends betrays the ideals the country was founded to sustain. In Good American Family readers will find plenty of opportunities to consider patriotism and what it means.
The Economic Crash from Covid-19
The Economic Crash from Covid-19
A $2 trillion Corvid-19 spending bill is now law, but Congress better hope Trump gets the money pumped into the spending stream fast. There are roughly 17 million working in the leisure and hospitality industry with about 12 million of them working in restaurants or related food services. There are 22 million more working in wholesale and retail trade. The brunt of the layoffs will fall on them and without enough money for people in these industries to keep up rent or house payments, car payments, groceries, utility bills the economy will collapse, disintegrate.
Congress wants the IRS to send $1,200 to each of the furloughed workers. For someone furloughed earning $62,400 a year, $1,200 is one weeks pay. While its better than unemployment compensation its a one time check to pay bills that keep coming.
Apparently, unemployment compensation that currently averages $300 a week gets bumped up to $600 a week in the new survival bill, although it only goes for 13 weeks. Converted to annual pay $600 amounts to a raise from $15,600 a year to $31,200, which will not maintain spending power for millions. It must be extended. Since the unemployment compensation has an operating bureaucracy it would be wise to let those furloughed from a job earning more than $31,200 to produce their last pay stub and send them their net pay as unemployment compensation. That gives a better chance of sustaining buying power and the flow of transactions. It will now apply to the self employed and gig workers, helping to boost spending.
Unless the money handed over to corporations finds its way back into the spending stream the business subsidies will do nothing to stem the immediate potential for decline. If they pay wages to prevent layoffs that would help, but corporations are notoriously slow putting capital back into the spending stream.
The final bill restricts corporate stock buybacks, executive pay and dividend payments, but those were put there to restrict opportunists from capitalizing on the Pandemic; they will do nothing to sustain the economy. The bill does not add anything for those living on Social Security, nor cancel student loan payments, nor pay the health care bills for the uninsured and so these do nothing to sustain the economy.
The disruption creates a netherworld for economic policy but the astonishingly quick action to provide $2 trillion by a normally battling Congress suggests they at least understand they have to do something to avoid a collapse. I can’t imagine this will go well. They will have to do more to support the working class or the economy will go into a steep recession/depression. Good luck to all!
A $2 trillion Corvid-19 spending bill is now law, but Congress better hope Trump gets the money pumped into the spending stream fast. There are roughly 17 million working in the leisure and hospitality industry with about 12 million of them working in restaurants or related food services. There are 22 million more working in wholesale and retail trade. The brunt of the layoffs will fall on them and without enough money for people in these industries to keep up rent or house payments, car payments, groceries, utility bills the economy will collapse, disintegrate.
Congress wants the IRS to send $1,200 to each of the furloughed workers. For someone furloughed earning $62,400 a year, $1,200 is one weeks pay. While its better than unemployment compensation its a one time check to pay bills that keep coming.
Apparently, unemployment compensation that currently averages $300 a week gets bumped up to $600 a week in the new survival bill, although it only goes for 13 weeks. Converted to annual pay $600 amounts to a raise from $15,600 a year to $31,200, which will not maintain spending power for millions. It must be extended. Since the unemployment compensation has an operating bureaucracy it would be wise to let those furloughed from a job earning more than $31,200 to produce their last pay stub and send them their net pay as unemployment compensation. That gives a better chance of sustaining buying power and the flow of transactions. It will now apply to the self employed and gig workers, helping to boost spending.
Unless the money handed over to corporations finds its way back into the spending stream the business subsidies will do nothing to stem the immediate potential for decline. If they pay wages to prevent layoffs that would help, but corporations are notoriously slow putting capital back into the spending stream.
The final bill restricts corporate stock buybacks, executive pay and dividend payments, but those were put there to restrict opportunists from capitalizing on the Pandemic; they will do nothing to sustain the economy. The bill does not add anything for those living on Social Security, nor cancel student loan payments, nor pay the health care bills for the uninsured and so these do nothing to sustain the economy.
The disruption creates a netherworld for economic policy but the astonishingly quick action to provide $2 trillion by a normally battling Congress suggests they at least understand they have to do something to avoid a collapse. I can’t imagine this will go well. They will have to do more to support the working class or the economy will go into a steep recession/depression. Good luck to all!
Wednesday, February 19, 2020
Incompetents at the Fed
Trump and Incompetents on the Fed
Trump keeps telling us how great the economy is doing and how we should all take a bow to his great skill. Well, the economy is doing quite well under the circumstances, for which Federal Reserve Board Chair Jerome Powell and his fellow board members deserve the credit. Trump is just going along for the ride and deserves no credit whatsoever. His abusive comments dashed out on Twitter sound like his usual angry response to anyone who does not follow orders, but the abuse has not deterred Powell from acting in good faith.
By now it is hard to think the Trump base would object to anything he might do after what has already transpired, but if ruining the economy accounts at all, then he might want to question his latest scheme to take over monetary policy. His current nomination for Federal Reserve Board, a women named Judy Shelton, wants to return to a gold standard and eliminate deposit insurance.
As every good capitalist knows the value of money is determined by the supply of it relative to its demand for needed transactions. Obsessives like Ms. Shelton want money to be a supply of something they can pick up and store like gold, but gold is a commodity like cars, clothes and corn flakes, all subject to rising prices.
When money was gold, changes in its price rippled through the economy causing inflation or recession. A gold standard requires giving the public the opportunity to exchange currency for gold at a fixed price making it necessary for the government to stabilize the price of gold by holding large inventories to sell in a shortage, or buy in a surplus. Managing gold inventories was subject to the erratic success or failure of mining ventures and the erratic whim of hoarders and speculators.
If Ms. Shelton would ask herself how the U.S. Treasury could remain ready to exchange gold at a fixed price if the market price of gold goes up, she might notice a problem with a gold standard. If the market price of gold starts to rise there will be speculators to show up at the U.S. Treasury to exchange their currency for an ounce of gold at the fixed price. They will speculate the government will eventually run of gold by having to sell it and have to let the price rise to a new level. Then they can resell their gold at the higher market price.
The need to buy or sell gold to hold the price changes the money supply the same way open market operations change the money supply now, except the buying and selling of gold to keep its price stable cannot be timed to meet the needs of stabilizing the economy.
In 1933, the United States left the gold standard, announcing it would no longer convert dollars to gold at any price. Banks were allowed to designate other assets than gold as reserves, which make it easier to manage the money supply. Other countries followed and in 1971 the gold exchange standard for international payments ended by mutual agreement of the international community.
Using gold as money creates many problems that have to be solved, but has no benefits of any kind. It does not impose discipline because money is always a human decision. Humans decide what it is and how much of it there will be. The Republicans know this, but they are willing to pander to Trump and his conspiratorial base.
A few Republican Senators express worry with a crackpot on the Fed. The Washington Post from February 9, 2020 quoted an insider who says “I don’t think she belongs on the [Fed] Board, but it’s not going to be an apocalypse. She’s not going to change the direction of monetary policy.” Don’t be too sure. Others think Trump is positioning her to be Fed Chair when Powell’s term ends in early 2022.
Republicans have their own agenda and while they are not against a stable well managed economy, it is not first on their agenda for economic policy. Recall the Bush recession of 2008-2010 following the 1999 Banking deregulation, which provided the wealthy and well placed unlimited opportunities for speculation and financial gambling. If the incompetent Trump gets control of monetary policy, it will be much worse than that.
Trump keeps telling us how great the economy is doing and how we should all take a bow to his great skill. Well, the economy is doing quite well under the circumstances, for which Federal Reserve Board Chair Jerome Powell and his fellow board members deserve the credit. Trump is just going along for the ride and deserves no credit whatsoever. His abusive comments dashed out on Twitter sound like his usual angry response to anyone who does not follow orders, but the abuse has not deterred Powell from acting in good faith.
By now it is hard to think the Trump base would object to anything he might do after what has already transpired, but if ruining the economy accounts at all, then he might want to question his latest scheme to take over monetary policy. His current nomination for Federal Reserve Board, a women named Judy Shelton, wants to return to a gold standard and eliminate deposit insurance.
As every good capitalist knows the value of money is determined by the supply of it relative to its demand for needed transactions. Obsessives like Ms. Shelton want money to be a supply of something they can pick up and store like gold, but gold is a commodity like cars, clothes and corn flakes, all subject to rising prices.
When money was gold, changes in its price rippled through the economy causing inflation or recession. A gold standard requires giving the public the opportunity to exchange currency for gold at a fixed price making it necessary for the government to stabilize the price of gold by holding large inventories to sell in a shortage, or buy in a surplus. Managing gold inventories was subject to the erratic success or failure of mining ventures and the erratic whim of hoarders and speculators.
If Ms. Shelton would ask herself how the U.S. Treasury could remain ready to exchange gold at a fixed price if the market price of gold goes up, she might notice a problem with a gold standard. If the market price of gold starts to rise there will be speculators to show up at the U.S. Treasury to exchange their currency for an ounce of gold at the fixed price. They will speculate the government will eventually run of gold by having to sell it and have to let the price rise to a new level. Then they can resell their gold at the higher market price.
The need to buy or sell gold to hold the price changes the money supply the same way open market operations change the money supply now, except the buying and selling of gold to keep its price stable cannot be timed to meet the needs of stabilizing the economy.
In 1933, the United States left the gold standard, announcing it would no longer convert dollars to gold at any price. Banks were allowed to designate other assets than gold as reserves, which make it easier to manage the money supply. Other countries followed and in 1971 the gold exchange standard for international payments ended by mutual agreement of the international community.
Using gold as money creates many problems that have to be solved, but has no benefits of any kind. It does not impose discipline because money is always a human decision. Humans decide what it is and how much of it there will be. The Republicans know this, but they are willing to pander to Trump and his conspiratorial base.
A few Republican Senators express worry with a crackpot on the Fed. The Washington Post from February 9, 2020 quoted an insider who says “I don’t think she belongs on the [Fed] Board, but it’s not going to be an apocalypse. She’s not going to change the direction of monetary policy.” Don’t be too sure. Others think Trump is positioning her to be Fed Chair when Powell’s term ends in early 2022.
Republicans have their own agenda and while they are not against a stable well managed economy, it is not first on their agenda for economic policy. Recall the Bush recession of 2008-2010 following the 1999 Banking deregulation, which provided the wealthy and well placed unlimited opportunities for speculation and financial gambling. If the incompetent Trump gets control of monetary policy, it will be much worse than that.
Thursday, February 6, 2020
Beaten Down, Worked Up
Steven Greenhouse, Beaten Down, Worked Up: The Past, Present, and Future of American Labor, (NY: Alfred A Knopf, 2019) 340 pages
Journalist Steven Greenhouse has returned with a second book on American labor and the condition of life for the working class. This new book is partly an update of his 2008 book, the Big Squeeze, but there are also five chapters of narrative from American labor history, along with new current and emerging topics.
In the introduction Greenhouse tells readers the decline of labor unions has helped to generate income inequality, wage stagnation, declining mobility, low wage jobs and the skewing of politics to favor the wealthy. In this new book he pledges to focus far more on why so many Americans have been squeezed.
The first three chapters are part I – State of the Union - that give a warm up for the discussions to come. In Chapter one, entitled Losing Our Voice, we hear from eight people and their job experiences to show “something is fundamentally broken in the way many employers treat their workers.” After a data review readers get some quotations from corporate America and their self serving justification for what they do and believe, and then finally some news of new labor organizing. Chapter Two continues with this but has longer discussions with people and their work at Burger King, Caterpillar Inc. and General Motors. Chapter Three shifts to one of organized labor’s recent success stories, organizing the Culinary Workers Union and local 226 in Las Vegas.
Part II shifts to five significant episodes from labor history. First, there is the early 1900’s garment industry organizing, mostly in New York and mostly by women. We hear about Clare Lemlich and organizing for the International Ladies Garment Workers Union (ILGWU) and the courage of women to face assault, arrest and jail for picketing and striking. Next, in Chapter 5, we get an account of the deadly 1911 Triangle Shirtwaist fire in New York. This story introduces Francis Perkins, who was a witness to the fire. That story allows a transition to a biography of her career and work in the depression era Franklin Roosevelt administration. Greenhouse writes twelve pages of narrative of her work and life, wanting, I expect, to give her the recognition she deserves but does not usually get. Some of us argue she did more for labor and the working class than Franklin Roosevelt, anyone else.
Chapter 6 continues with the December 31, 1935 General Motors sit-down strike by the United Auto Workers (UAW) that allows an easy transition to Chapter 7 with Walter Reuther and the UAW during WWII and into the 1950’s. Chapter 8 moves on to a narrative of the 1968 Memphis Sanitation strike and the last campaign of Martin Luther King, Jr.
The history discussions in Part II ends in 1968, but Part III – Hard Times for Labor – continues with labor history’s events of the 1980’s. After accounts of the disastrous PATCO strike, and then on to the grimy Phelps-Dodge and Hormel strikes Greenhouse declares “In the 1980’s everything seemed to go wrong for labor.” He is sure right about that; it was a time of manufacturing moving abroad, demands for wage cuts, lockouts and union busting. Readers get short accounts of some of the companies and their union busting talk and tactics: T-Mobile, Menards, Staples, Amazon, and of course Walmart, or really Walmart again, since Greenhouse discussed them in his first book.
The title of chapter 12, Labor’s Self Inflicted Wounds, signals a critical look at labor leadership. This inevitably brings up the honest but opinionated George Meany and the always controversial Jimmy Hoffa and labor racketeering exposed in the 1957-59 McClellan committee hearings. Labor needs solidarity but George Meany refused to endorse the 1963 civil rights march on Washington, which represented a legacy of discrimination in the labor movement going back many decades. Unfortunately Meany was AFL-CIO president a long time: 1955 to 1979.
Greenhouse devotes the last two chapters of Part III to a narrative account of the attack on public sector unions by Wisconsin Governor Scott Walker, his union busting tactics and then a chapter to discuss the declining political influence of labor. In recent years the AFL-CIO has been unable to secure favorable legislation or prevent unfavorable legislation.
Part IV – Labor Today and Tomorrow – devotes seven chapters to current topics and trends in today’s labor. The sweatshops of the 19th and early 20th century have a new name: Gig economy. We hear about the abuses of Uber as a good example of the Gig economy although there are many others. After the Gig discussions we find some successes and a little optimism. There is a chapter devoted to raising the minimum wage. Here readers meet Adriana Alvarez, who tries to support herself and her infant child on $8.50 an hour working at McDonalds. She wants to help organize in the fight for a $15 an hour wage. She found out something legions of the oppressed and mistreated working class have learned before her: the owner of the McDonald’s franchise refused to speak with her. Management refusals to speak continue to be one of the clearest examples of class warfare in America.
Next we learn about some modestly successful farm worker organizing in Florida and the tactics applied to pressure the large vegetable purchasing fast food franchises and then move on to Los Angeles to review similar efforts there. In Los Angeles readers learn about the Los Angeles Alliance for a new economy (LAANE), an organizing group to push for social justice reforms.
Greenhouse devotes a chapter to labor relations at Kaiser-Permanente (KP), the giant, multi-state, health care provider and to the Saint Paul Federation of Teachers (SPFT) efforts to improve area public schools. KP did not always have good labor relations. From the 1970’s into the 1990’s KP had several disruptive walkouts but in the mid 1990’s management decided to work with their many unions in a Labor Management Partnership. Greenhouse reviews the workings of this Labor Management Partnership and its success.
The recent statewide teacher strikes get a whole chapter. Recall the first strike was in West Virginia, which spread to the Oklahoma teachers, to Arizona, to Los Angeles and a few more states not reviewed here. Teachers need college degrees and licensed certification, which makes them hard to replace with scabs and therefore the ideal employees to organize and strike if necessary. They make a good example for other occupations.
Author-Journalist Steven Greenhouse reports labor news for the New York Times and so has a salary, a travel budget and time to get some of the stories from the legions of under paid, over worked and over taxed Americans that slog along in America’s miserable jobs. Too often we cite and accept empirical data to show wage and price effects as a way to measure the changing fortunes of the working class. Interviews do not give a percentage change, but hearing the stories of people and their attempts to cope are empirical and valuable in every sense of the word.
The Beaten Down material in the book comes through clearly, but the Worked Up material points to more positive organizing than his previous book, the Big Squeeze. Too often labor unions start to act like the top down hierarchy of corporate America. Union officials make decisions on behalf of a barely involved rank and file, which has not worked well. The Worked Up material here shows the methods the rank and file can use to make progress organizing from the bottom up.
The last chapter makes a few suggestions for political organizing to change campaign finance laws, the National Labor Relations Act and a few more, but the book remains essentially free of legislative and party politics. It is well organized, reads easily and has detailed footnotes for those wanting to go a little deeper. Lets hope in the next book the Worked Up side will continue to show progress and a decline of the Beaten down; there are still plenty of them.
Journalist Steven Greenhouse has returned with a second book on American labor and the condition of life for the working class. This new book is partly an update of his 2008 book, the Big Squeeze, but there are also five chapters of narrative from American labor history, along with new current and emerging topics.
In the introduction Greenhouse tells readers the decline of labor unions has helped to generate income inequality, wage stagnation, declining mobility, low wage jobs and the skewing of politics to favor the wealthy. In this new book he pledges to focus far more on why so many Americans have been squeezed.
The first three chapters are part I – State of the Union - that give a warm up for the discussions to come. In Chapter one, entitled Losing Our Voice, we hear from eight people and their job experiences to show “something is fundamentally broken in the way many employers treat their workers.” After a data review readers get some quotations from corporate America and their self serving justification for what they do and believe, and then finally some news of new labor organizing. Chapter Two continues with this but has longer discussions with people and their work at Burger King, Caterpillar Inc. and General Motors. Chapter Three shifts to one of organized labor’s recent success stories, organizing the Culinary Workers Union and local 226 in Las Vegas.
Part II shifts to five significant episodes from labor history. First, there is the early 1900’s garment industry organizing, mostly in New York and mostly by women. We hear about Clare Lemlich and organizing for the International Ladies Garment Workers Union (ILGWU) and the courage of women to face assault, arrest and jail for picketing and striking. Next, in Chapter 5, we get an account of the deadly 1911 Triangle Shirtwaist fire in New York. This story introduces Francis Perkins, who was a witness to the fire. That story allows a transition to a biography of her career and work in the depression era Franklin Roosevelt administration. Greenhouse writes twelve pages of narrative of her work and life, wanting, I expect, to give her the recognition she deserves but does not usually get. Some of us argue she did more for labor and the working class than Franklin Roosevelt, anyone else.
Chapter 6 continues with the December 31, 1935 General Motors sit-down strike by the United Auto Workers (UAW) that allows an easy transition to Chapter 7 with Walter Reuther and the UAW during WWII and into the 1950’s. Chapter 8 moves on to a narrative of the 1968 Memphis Sanitation strike and the last campaign of Martin Luther King, Jr.
The history discussions in Part II ends in 1968, but Part III – Hard Times for Labor – continues with labor history’s events of the 1980’s. After accounts of the disastrous PATCO strike, and then on to the grimy Phelps-Dodge and Hormel strikes Greenhouse declares “In the 1980’s everything seemed to go wrong for labor.” He is sure right about that; it was a time of manufacturing moving abroad, demands for wage cuts, lockouts and union busting. Readers get short accounts of some of the companies and their union busting talk and tactics: T-Mobile, Menards, Staples, Amazon, and of course Walmart, or really Walmart again, since Greenhouse discussed them in his first book.
The title of chapter 12, Labor’s Self Inflicted Wounds, signals a critical look at labor leadership. This inevitably brings up the honest but opinionated George Meany and the always controversial Jimmy Hoffa and labor racketeering exposed in the 1957-59 McClellan committee hearings. Labor needs solidarity but George Meany refused to endorse the 1963 civil rights march on Washington, which represented a legacy of discrimination in the labor movement going back many decades. Unfortunately Meany was AFL-CIO president a long time: 1955 to 1979.
Greenhouse devotes the last two chapters of Part III to a narrative account of the attack on public sector unions by Wisconsin Governor Scott Walker, his union busting tactics and then a chapter to discuss the declining political influence of labor. In recent years the AFL-CIO has been unable to secure favorable legislation or prevent unfavorable legislation.
Part IV – Labor Today and Tomorrow – devotes seven chapters to current topics and trends in today’s labor. The sweatshops of the 19th and early 20th century have a new name: Gig economy. We hear about the abuses of Uber as a good example of the Gig economy although there are many others. After the Gig discussions we find some successes and a little optimism. There is a chapter devoted to raising the minimum wage. Here readers meet Adriana Alvarez, who tries to support herself and her infant child on $8.50 an hour working at McDonalds. She wants to help organize in the fight for a $15 an hour wage. She found out something legions of the oppressed and mistreated working class have learned before her: the owner of the McDonald’s franchise refused to speak with her. Management refusals to speak continue to be one of the clearest examples of class warfare in America.
Next we learn about some modestly successful farm worker organizing in Florida and the tactics applied to pressure the large vegetable purchasing fast food franchises and then move on to Los Angeles to review similar efforts there. In Los Angeles readers learn about the Los Angeles Alliance for a new economy (LAANE), an organizing group to push for social justice reforms.
Greenhouse devotes a chapter to labor relations at Kaiser-Permanente (KP), the giant, multi-state, health care provider and to the Saint Paul Federation of Teachers (SPFT) efforts to improve area public schools. KP did not always have good labor relations. From the 1970’s into the 1990’s KP had several disruptive walkouts but in the mid 1990’s management decided to work with their many unions in a Labor Management Partnership. Greenhouse reviews the workings of this Labor Management Partnership and its success.
The recent statewide teacher strikes get a whole chapter. Recall the first strike was in West Virginia, which spread to the Oklahoma teachers, to Arizona, to Los Angeles and a few more states not reviewed here. Teachers need college degrees and licensed certification, which makes them hard to replace with scabs and therefore the ideal employees to organize and strike if necessary. They make a good example for other occupations.
Author-Journalist Steven Greenhouse reports labor news for the New York Times and so has a salary, a travel budget and time to get some of the stories from the legions of under paid, over worked and over taxed Americans that slog along in America’s miserable jobs. Too often we cite and accept empirical data to show wage and price effects as a way to measure the changing fortunes of the working class. Interviews do not give a percentage change, but hearing the stories of people and their attempts to cope are empirical and valuable in every sense of the word.
The Beaten Down material in the book comes through clearly, but the Worked Up material points to more positive organizing than his previous book, the Big Squeeze. Too often labor unions start to act like the top down hierarchy of corporate America. Union officials make decisions on behalf of a barely involved rank and file, which has not worked well. The Worked Up material here shows the methods the rank and file can use to make progress organizing from the bottom up.
The last chapter makes a few suggestions for political organizing to change campaign finance laws, the National Labor Relations Act and a few more, but the book remains essentially free of legislative and party politics. It is well organized, reads easily and has detailed footnotes for those wanting to go a little deeper. Lets hope in the next book the Worked Up side will continue to show progress and a decline of the Beaten down; there are still plenty of them.
Tuesday, January 21, 2020
The Economists' Hour
Binyamin Appelbaum, The Economist’s Hour: False Prophets, Free Markets, and The Fracture of Society, (Boston: Little, Brown and Company, 2019), 332 pages, $30.00
Economics education in the United States walks a fine line between education and indoctrination. Applied economics in the United States walks a fine line between economic policy and religious faith. Author Binyamin Appelbaum understands this well. In his 2019 book the Economists’ Hour he writes a lively, clearly written narrative of the post WWII economist ideologues, their rise to influence, their one and only policy and trail of devastation.
Appelbaum defines the economist’s hour in the introduction as the period 1969-2008. Before 1969 economists struggled to be heard and economics remained the dismal science where scarce resources limit choices and opportunities. In the post WWII economists campaigned to make free markets the best way to bring annual economic growth and benefits to all. The book narrates the economist’s rise to power with brief biographies of economists and their pitch for growth and happiness via free markets, which in combination Appelbaum calls a biography of a revolution. Readers should be advised Milton Friedman’s name appears first on page six of the introduction and in every chapter and the conclusion after that.
The book has 332 pages divided into ten chapters between the introduction and a conclusion. The first chapter tells the story of the campaign to end the draft and convert the army to “volunteers” recruited by offers of pay and benefits. Here Milton Friedman leads the way in a political campaign to make troops just like hires in the private sector. This chapter includes a four page biography of Friedman, one of the longest of many more to come.
Chapters two, three and four can be called the macroeconomics chapters. Chapter two entitled Friedman v. Keynes follows the debate between monetary and fiscal policy, also known as the AM-FM debates, after economists Ando and Modigliani on the fiscal side and Friedman and Meiselman on the monetary side. The ideologue Friedman insisted the money supply set to grow at a predetermined rate should be the one and only policy. Keynes died in 1945, but his famous book the General Theory of Employment, Interest and Money lives on. The General Theory is not a general theory at all but a book of special cases. For decades Keyne’s colleagues in the economics profession counseled, wait, because they insisted an economy self corrects; prices and interest rates will fall, generating an increase in spending and production, and so depressions end automatically. Free market ideologues believe an economic system works like Newtonian physics.
In 1936 after 5 years of worldwide depression Keynes filled his book with examples where an economy might not be self-correcting, where the spending needed to restore production and employment might not recover. He was so bold as to suggest the government could help by putting funds in the spending stream to restore the economy. Since then Republicans and free enterprisers have hated Keynes as readers will find in chapter two.
Chapter three and four continue the macro debates by following the key economic advisers through the presidents of 1969 to 2008. Chapter three follows the “stagflation” debate with Nixon and Arthur Burns, Jimmy Carter and Paul Volker and on to the Alan Greenspan era. Chapter four covers the demand free enterprisers make for lower taxes and less government spending and their conviction these will be an aid to economic growth.
Chapters five, six and seven cover domestic microeconomics issues and policies. Appelbaum describes the ideologues opposition to Antitrust law, market regulation in the airline and truck transportation industries, safety and environmental regulation and their preferred arguments against them.
Chapters eight, nine and ten shift to international economic issues. Chapter eight, the longest chapter in the book, recounts the death of the gold exchange standard established in the 1944 Bretton Woods agreement and the ideologues view that nothing should be done to influence international exchange rates after the end of the fixed exchange rate era.
Chapter nine covers the ideologues advance into the economies of Chile and Taiwan. I learned that during the 1960’s a third of the graduate students in economics at the University of Chicago came from Chile; they were known there as the Chicago boys. They campaigned for the free market policies they absorbed under the tutelage of Milton Friedman. There was stout resistance at first, but with a few visits from Friedman and several colleagues the ideologues got their way, although not with the happiest results for Chile.
Chapter Ten makes a review of the people and financial concoctions of the 1990’s that brought the 2008 financial meltdown and two year recession. Those entrusted to manage the nations financial assets used their protected political status and new concoctions to gamble with the nations loanable funds. They lost the gamble, but not to worry “W” and the Republicans were there to bail them out. It was all supported by free market ideologues like Alan Greenspan and approved by the ever helpful Bill Clinton.
It turns out Republicans and their corporate allies support all of the free market arguments of the free market ideologues. Milton Friedman and some of his confreres made themselves into unpaid corporate spokesmen by effectively advocating growth while ignoring the troubles it generates, especially the inequality. Generations of economics students in the United States read Milton Friedman’s “Essay in Positive Economics” that explains so well how economics should be an empirical science where hypotheses about free markets should be proved. While “Uncle Milton” as we graduate students of the 1960’s used to call him, made a good salesman he marched along from theory to policy without the empirical proof, a still common practice, especially in microeconomics.
In each of the chapters Appelbaum names the players, often with some biography, narrates the arguments, the disagreements and the consequences when the ideologues prevail, as they inevitably did after 1969. As an example, chapter 7 gives a history of the use and abuse for cost-benefit analysis for health and safety regulations. In 1967 actress Jayne Mansfield and two others were killed when their car slid under a truck stopped in a fog of pesticide. The Johnson administration proposed a regulation to require installing a safety bar to prevent future accidents. After stalling for years President Ford killed the regulation because it would only save 180 lives a year they valued at $200,000 a life. The benefit of lives saved did not justify the cost of installation, estimated at four times the benefits.
True blue free enterprisers cite the workings of the market place as the best safety protection. Milton Friedman was adamant the health department does not need to regulate health standards in restaurants: “the quality of restaurants was assured by the availability of other restaurants” i.e. the competition. When the coast guard found 90 percent of Bayley “survival suits” were defective the ideologues at the FTC blocked recall and correction: “If deaths actually occur market forces – such as lawsuits by surviving heirs – may be adequate to remedy the problem.”
When Carter Administration economists Charles Schultze and William Nordhaus demanded to scrap “brown lung” air quality regulations in the textile industry Senator Edmund Muskie objected “that it was undemocratic for economists to substitute their own tallies of costs and benefits.”
Senator Muskie saw the problem exactly, corporate America and their economist spokesmen do not care about democracy; it can interfere with markets and hurts profits. Since the benefits of regulations go to individuals and the larger society, corporate America objects to any costs they incur from regulations. The use and abuse of benefit cost analysis lets them disguise their aims in a haze of economist’s easily manipulated cost-benefit justifications.
The chapters report many failures of free markets, which Appelbaum pulls together in a seventeen page conclusion. He suggests the broader consequences of all these failures on the economy: growing inequality of income and wealth, the dismal job prospects for the powerless working class and the threat to public civility and democratic institutions. Here he reminds readers that markets function from the constructs of property and contract rights determined in a political process. They do not come down from heaven.
The book avoids economic jargon and while it will be of special interest to economists it can be read by a much broader audience. There are 88 pages of footnotes, which give references but also include some long background discussions his editor may have convinced him to take out of the text. The more engaged reader should take a look.
Appelbaum tells readers in the introduction his father was born in 1951 while he was born in 1978. I am closer to his father’s age and went to graduate school in the 1960’s and finished a doctorate in economics in the 1970’s. Finally, I say, the younger generation has assembled a thoughtful and readable attack on doctrinaire economics. It’s about time.
Economics education in the United States walks a fine line between education and indoctrination. Applied economics in the United States walks a fine line between economic policy and religious faith. Author Binyamin Appelbaum understands this well. In his 2019 book the Economists’ Hour he writes a lively, clearly written narrative of the post WWII economist ideologues, their rise to influence, their one and only policy and trail of devastation.
Appelbaum defines the economist’s hour in the introduction as the period 1969-2008. Before 1969 economists struggled to be heard and economics remained the dismal science where scarce resources limit choices and opportunities. In the post WWII economists campaigned to make free markets the best way to bring annual economic growth and benefits to all. The book narrates the economist’s rise to power with brief biographies of economists and their pitch for growth and happiness via free markets, which in combination Appelbaum calls a biography of a revolution. Readers should be advised Milton Friedman’s name appears first on page six of the introduction and in every chapter and the conclusion after that.
The book has 332 pages divided into ten chapters between the introduction and a conclusion. The first chapter tells the story of the campaign to end the draft and convert the army to “volunteers” recruited by offers of pay and benefits. Here Milton Friedman leads the way in a political campaign to make troops just like hires in the private sector. This chapter includes a four page biography of Friedman, one of the longest of many more to come.
Chapters two, three and four can be called the macroeconomics chapters. Chapter two entitled Friedman v. Keynes follows the debate between monetary and fiscal policy, also known as the AM-FM debates, after economists Ando and Modigliani on the fiscal side and Friedman and Meiselman on the monetary side. The ideologue Friedman insisted the money supply set to grow at a predetermined rate should be the one and only policy. Keynes died in 1945, but his famous book the General Theory of Employment, Interest and Money lives on. The General Theory is not a general theory at all but a book of special cases. For decades Keyne’s colleagues in the economics profession counseled, wait, because they insisted an economy self corrects; prices and interest rates will fall, generating an increase in spending and production, and so depressions end automatically. Free market ideologues believe an economic system works like Newtonian physics.
In 1936 after 5 years of worldwide depression Keynes filled his book with examples where an economy might not be self-correcting, where the spending needed to restore production and employment might not recover. He was so bold as to suggest the government could help by putting funds in the spending stream to restore the economy. Since then Republicans and free enterprisers have hated Keynes as readers will find in chapter two.
Chapter three and four continue the macro debates by following the key economic advisers through the presidents of 1969 to 2008. Chapter three follows the “stagflation” debate with Nixon and Arthur Burns, Jimmy Carter and Paul Volker and on to the Alan Greenspan era. Chapter four covers the demand free enterprisers make for lower taxes and less government spending and their conviction these will be an aid to economic growth.
Chapters five, six and seven cover domestic microeconomics issues and policies. Appelbaum describes the ideologues opposition to Antitrust law, market regulation in the airline and truck transportation industries, safety and environmental regulation and their preferred arguments against them.
Chapters eight, nine and ten shift to international economic issues. Chapter eight, the longest chapter in the book, recounts the death of the gold exchange standard established in the 1944 Bretton Woods agreement and the ideologues view that nothing should be done to influence international exchange rates after the end of the fixed exchange rate era.
Chapter nine covers the ideologues advance into the economies of Chile and Taiwan. I learned that during the 1960’s a third of the graduate students in economics at the University of Chicago came from Chile; they were known there as the Chicago boys. They campaigned for the free market policies they absorbed under the tutelage of Milton Friedman. There was stout resistance at first, but with a few visits from Friedman and several colleagues the ideologues got their way, although not with the happiest results for Chile.
Chapter Ten makes a review of the people and financial concoctions of the 1990’s that brought the 2008 financial meltdown and two year recession. Those entrusted to manage the nations financial assets used their protected political status and new concoctions to gamble with the nations loanable funds. They lost the gamble, but not to worry “W” and the Republicans were there to bail them out. It was all supported by free market ideologues like Alan Greenspan and approved by the ever helpful Bill Clinton.
It turns out Republicans and their corporate allies support all of the free market arguments of the free market ideologues. Milton Friedman and some of his confreres made themselves into unpaid corporate spokesmen by effectively advocating growth while ignoring the troubles it generates, especially the inequality. Generations of economics students in the United States read Milton Friedman’s “Essay in Positive Economics” that explains so well how economics should be an empirical science where hypotheses about free markets should be proved. While “Uncle Milton” as we graduate students of the 1960’s used to call him, made a good salesman he marched along from theory to policy without the empirical proof, a still common practice, especially in microeconomics.
In each of the chapters Appelbaum names the players, often with some biography, narrates the arguments, the disagreements and the consequences when the ideologues prevail, as they inevitably did after 1969. As an example, chapter 7 gives a history of the use and abuse for cost-benefit analysis for health and safety regulations. In 1967 actress Jayne Mansfield and two others were killed when their car slid under a truck stopped in a fog of pesticide. The Johnson administration proposed a regulation to require installing a safety bar to prevent future accidents. After stalling for years President Ford killed the regulation because it would only save 180 lives a year they valued at $200,000 a life. The benefit of lives saved did not justify the cost of installation, estimated at four times the benefits.
True blue free enterprisers cite the workings of the market place as the best safety protection. Milton Friedman was adamant the health department does not need to regulate health standards in restaurants: “the quality of restaurants was assured by the availability of other restaurants” i.e. the competition. When the coast guard found 90 percent of Bayley “survival suits” were defective the ideologues at the FTC blocked recall and correction: “If deaths actually occur market forces – such as lawsuits by surviving heirs – may be adequate to remedy the problem.”
When Carter Administration economists Charles Schultze and William Nordhaus demanded to scrap “brown lung” air quality regulations in the textile industry Senator Edmund Muskie objected “that it was undemocratic for economists to substitute their own tallies of costs and benefits.”
Senator Muskie saw the problem exactly, corporate America and their economist spokesmen do not care about democracy; it can interfere with markets and hurts profits. Since the benefits of regulations go to individuals and the larger society, corporate America objects to any costs they incur from regulations. The use and abuse of benefit cost analysis lets them disguise their aims in a haze of economist’s easily manipulated cost-benefit justifications.
The chapters report many failures of free markets, which Appelbaum pulls together in a seventeen page conclusion. He suggests the broader consequences of all these failures on the economy: growing inequality of income and wealth, the dismal job prospects for the powerless working class and the threat to public civility and democratic institutions. Here he reminds readers that markets function from the constructs of property and contract rights determined in a political process. They do not come down from heaven.
The book avoids economic jargon and while it will be of special interest to economists it can be read by a much broader audience. There are 88 pages of footnotes, which give references but also include some long background discussions his editor may have convinced him to take out of the text. The more engaged reader should take a look.
Appelbaum tells readers in the introduction his father was born in 1951 while he was born in 1978. I am closer to his father’s age and went to graduate school in the 1960’s and finished a doctorate in economics in the 1970’s. Finally, I say, the younger generation has assembled a thoughtful and readable attack on doctrinaire economics. It’s about time.
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