Unemployment: Propaganda and Truth

We have gone beyond partisanship; the party in power in our country has engaged in a systematic campaign to manipulate the electorate by destroying the credibility of governing institutions.

This campaign has been disturbingly successful.

Citizens interested in preserving democracy, legitimate political debate and rule of law must combat propaganda – by identifying it, revealing the selfish and destructive motives behind it, and responding with truth.

Last week I wrote about the assault on the free press. The civil service – now presented to supporters of the current occupant of the White House as part of a “Deep State” — has been another object of attack. One target has been the Commerce Department’s Bureau of Labor Statistics, and the otherwise apolitical process of calculating the unemployment rate.

With the unemployment rate declining steadily during the Obama presidency and in the aftermath of the 2008-9 financial crisis, Republicans decided that reality was stubbornly inconvenient. The unemployment rate was not moving in the desired direction (after all, political ends come before the welfare of the country). The numbers themselves, therefore, would have to be declared fictitious, and those involved in compiling the data would have to be villainized.

With a willing hyperpartisan following committed to condemning the Obama administration no matter the facts, Republican operatives embarked on a coordinated assault on the unemployment data and the civil servants involved in processing the data.

The right-wing Heritage Foundation was at the center of the process. In 2006, Heritage published a “Jobs and Labor” report “Hard at Work,” explaining why the decline in the unemployment rate under George Bush was real, despite a fall in the labor force participation rate. The author of that report argued that “Changing demographics explain part of the lower participation rates. Beyond that, much of the decline in labor force participa­tion (LFP) rates-the propor­tion of the population either in or actively looking for work- can be attributed to the rising numbers of younger Americans opting to invest in their future by continuing their education rather than entering the work­force.”

Five years later, when no longer suited to the political moment, Heritage turned the argument on its head, embarking on a steady stream of efforts to delegitimate the measured unemployment rate. In September 2012, Heritage reported that “The workers now outside the labor force are primarily either studying in school or collecting disability benefits. Approximately 2.1 million more Americans report being outside the labor force and enrolled in school. The weak economy has both made it more difficult for students to find part-time jobs and reduced the opportunity cost of going to school.”

While leaving the labor force to pursue further education represented a choice “to invest in their future” under George W. Bush, under Obama people left the labor force for education because of declining opportunity costs of doing so.

In fall 2012; the right-wing Washington Times brought the popular media into the propaganda effort, publishing an article claiming of the pre-election reduction in the unemployment rate: “At best the new unemployment number is a fluke; at worst it is the product of partisan hacks.”

The New York Post broadened the claim with a fall 2013 article simply asserting “Census ‘faked’ 2012 election jobs report.” The article pointed to a single Census Bureau data canvasser who claimed to have made up his jobs data. Never mind that (a) the person in question did not work for the Census Bureau during the period claimed; and (b) economists familiar with the calculations explained that even if one person’s data WAS entirely made up, there would be zero impact on the data accumulated by thousands of canvassers. As with the news, the concept of “fake” unemployment numbers had entered the discourse.

MarketwatchMic and Forbes (“Did the BLS Give Obama a Major Election 2012 Gift?”) amplified the campaign, picking up on the Post’s invitation to elaborate a case for partisan fixing of the data.

Declaring the officially calculated unemployment rate “fake” or manipulated – a claim that has been proven false — is itself a manipulation, an act of propaganda.

The political advantages of propaganda are that it provides a shortcut to desired political conclusions and that it is immune to evidence. But anyone truly committed to democratic debate shuns such shortcuts and embraces evidence.

The recent decline in the measured rate of unemployment under the current administration is real. But there is important context to this decline, and discussion of that context constitutes legitimate political debate rather than the shameful, destructive propaganda that has become the stock-in-trade of the present administration.

To begin with, the recent fall in the unemployment rate clearly is a continuation of a trend well established during the Obama administration. The unemployment rate is now at 3.9%; during the Obama years, the rate declined from a peak of 10.0% in December 2009 — during the financial crisis the Obama administration inherited — to 4.7% at the end of his second term:

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True, there have been 17 straight months of job gains. But this follows 75 consecutive months of job gains under Obama.

Furthermore, the rate of job gains has not increased. During the stretch of 75 months of job gains of the Obama recovery, the U.S. economy gained 199,000 jobs per month; during the second Obama administration, the average monthly gain was 217,000.

Since January 2017, the rate has been 189,000 per month.

Finally, the decline in the unemployment rate does not mean that working people are better off. In fact, during the past year, while wages rose by 2.7%, inflation was 2.9%. The average worker, in other words, is losing ground in real terms.

In short, while propaganda renders recent job market performance miraculous and unprecedented, facts suggest otherwise. The Bureau of Labor Statistics has not been lying; the current administration cannot tell the truth.

 

Time to Defend Democratic Institutions

Partisan division over the news media is nothing new; but something new – and more sinister – is certainly afoot.

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Assessments of the fairness of news coverage have long varied by party identification, with each party perceiving news coverage of the presidency as less fair when their party occupies the White House. Partisan identification also shapes perceptions of media bias – views of whether the media are “liberal” or “conservative.”

Seething crowds ranting against the press at rallies held by the current occupant of the White House provide anecdotal evidence of a more sharply divisive tone. But there is something more systematic going on.

So what has changed?

A 2013 Pew Research Survey revealed a deep partisan divide, with 65% of Republicans viewing the media as liberal (17% conservative; 12% as neutral) and Democrats more evenly divided between 36% perceiving the media as liberal, 37% as conservative and 20% as neutral. But there was a critical area of common ground: 69% of Republicans and 67% of Democrats indicated in the survey that the press play a vital watchdog role, “keeping leaders from doing things that shouldn’t be done.”

In just four years, that shared assessment vanished. Pew conducted a similar survey in 2017, and a review of the findings proves unsettling. While 89% of respondents identifying with the Democratic Party believe the media “keeps political leaders from doing things that shouldn’t be done,” only 42% of Republicans believe this. What’s especially astonishing is that the figure for Republicans tracks that of Democrats upward during the financial crisis and the latter years of the Obama era. In fact, at the close of the Obama era, Republicans had a slightly higher preference for the media’s watchdog role, at 77%, versus 74% for Democrats.

The 47 percentage point gap in views of the role of the press as a check on government’s exercise of power between Republicans and Democrats is by far the highest ever recorded in the Pew Survey, which has been asking this question since 1985. The highest gap prior to this was 28 points, recorded during the George W. Bush administration in 2005.

An academic article on public attitudes toward the press by John Immerwahr and John Doble published in Public Opinion Quarterly in 1982 – still close on the heels of the Watergate scandal – showed that citizens wanted evenhanded coverage of major news events and equal time to competing political candidates. Survey respondents also strongly supported the rights of reporters to criticize the president and of newspapers to print stories the president considers biased and inaccurate.

But partisanship has now produced an environment in which respect for those press freedoms is not shared across the political spectrum.

I’ve written previously about the deep perceptual divide in American society (and in the UK, as evidenced by the Brexit vote and the debate that has ensued), and the manner in which the arrival of new evidence – of, say, Russian contacts previously denied by people associated with this administration – only deepens the divide rather than drawing citizens toward common conclusions. By itself, the perceptual rift is not new.

What IS new is that the current administration and its backers have systematically undermined support for institutions that represent checks on its authority – and which also represent the bedrock of democracy.

In the realm of media perceptions, Republican political operatives have prepared the ground for years; the 2013 Pew Survey reveals evidence of this in a strong perception of “liberal” bias by Republicans. But, as I will write about next week, the intensified assault on institutions began with a systematic critique of the unemployment rate and the Bureau of Labor Statistics during the Obama Administration. Unable to accept evidence of a steadily declining unemployment rate following the financial crisis, right-wing political groups and think-tanks embarked on a systematic campaign to impugn the data and the institution producing them. The results were inconvenient, so the strategy was to label them a fiction.

That assault continued with the press, and has since encompassed the civil service (“the deep state”) and even citizens expressing dissent in the form of protest (“paid actors”).

We’ve moved well beyond a simple partisan divide. From a state of affairs in which adherents of each political party believe institutions are biased in favor of the other side, but embrace the value of the institutions and want them to be fair, we’ve arrived at a moment in which supporters of the party in power reject the institutions themselves. This gives license to the party in power to systematically undermine those institutions.

In his book, On Tyranny, Timothy Snyder underscores a lesson also advanced by leading scholars of fascism, such as Robert Paxton: institutions do not defend themselves. As Snyder points out, the error made by supporters of democratic institutions is “to assume that rulers who came to power through institutions cannot change or destroy those very institutions – even when that is exactly what they have announced that they will do.”

It is time to defend our institutions. Stand up for the free press. For the civil service. And yes, for the Bureau of Labor Statistics.

 

 

 

 

Californians and Oklahomans Unite!

Spending the 4thof July in San Diego, California, I am wondering about the source and meaning of negative perceptions of California presented to me in recent months by several people in my home state of Oklahoma.

“California” has long had a mythical quality in large portions of the United States, with the association ranging from admiration and wonder – California as the harbinger of technological and cultural things to come – to bemused skepticism – California as a vortex of religious, culinary and leisure time experimentalism and oddity (from the water bed, advanced as a Master’s thesis project by a student at San Francisco State University in 1968 to the hot tub, initially developed in old wine vats in northern California in the 1960s), and a place that is simply weird.

In discussions over the course of the past year or so, I’ve discovered that for some of my fellow residents of Oklahoma, “California” has come to symbolize everything they despise: excessive regulation, environmental fundamentalism, moral decay and lawlessness (marked by the sanctuary cities movement).

In response I’ve pointed out that California is an extremely dynamic place; that the San Francisco Bay Area, for example, has one of the fastest growing economies in the United States and is a locus of technological innovation that yields tremendous benefits for the entire country.

But rather than seeing my alma mater, UC Berkeley, as the home of the largest number of Nobel Prize winners of any public university in the country (by far, with 69 Nobel laureates; the University of Illinois is second with 24), my interlocutors see it as a haven of intolerance and repression of free speech.

And herein is a clue to the puzzling perceptions I’ve encountered: the politics stoked by the current administration and its supporters have turned bemusement and skepticism over California’s oddities and innovations into a full-blown sense of “otherness.”

Despite California’s pivotal place in the economic, cultural and political fabric of the nation, the political message is to reject the entire state (with its 40 million inhabitants and GDP of $2.5 trillion) as a blight on the country.

The message, that is, is one of division — an effort to rupture the social cohesion of the nation, as I wrote about in my last post.

Of course, there are many inventive, broad-minded Oklahomans who realize their kinship with Californians and the contribution of the state to the national endeavor. And California is itself an extremely diverse place in every way; even those Oklahomans who condemn the state would in fact find much in common with many of their fellow Americans in California were they to spend time here.

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Accordingly, though I do so with skepticism and deep concern about the destructive politics that may unfold in the coming months, I express the hope that this 4thof July marks the nadir of the erosion of social cohesion in the United States.

The Costs of Destroying Social Cohesion

During my week in small, wealthy, verdant Norway, I thought extensively about how societies create and sustain social cohesion.

As I was considering this process, U.S. Ambassador to the United Nations Nikki Haley publicized the administration’s rejection of a May report of the UN Human Rights Council documenting the immense scope of inequality and poverty in the United States.

The report, based on an intensive visit to the U.S. by U.N. Special Rapporteur on Extreme Poverty and Human Rights Philip Alston (who met with government representatives at every level as well as civil society organizations and poor people themselves) points out that inequality and poverty have long been higher in the U.S. than in other western countries.

As Alston, a scholar of international law and human rights, underscores, the United States clearly has the resources to ameliorate these problems, but simply lacks the political will.

What is distinctive, though, is the extent to which the current administration has embarked on a path deliberately designed to exacerbate inequalities of wealth, power and opportunity.

While handing out enormous tax breaks to the wealthy, the administration has embarked on reductions in benefits for the poor; a rollback of environmental, health and safety protections that are vital to the quality of life of the poor and the middle class; and an ongoing effort to narrow access to health care.

The report of the Human Rights Council, which also identifies serious problems of a high rate of infant mortality, broad discrimination and racism, systematic disenfranchisement and criminalization of poverty, should be a great embarrassment for the United States.

But rather than acknowledging flaws in outcomes and policy and identifying means by which the U.S. might achieve better results, the administration withdrew from the U.N.’s Human Rights Council (though the motive likely was broader than this report), scolded the U.N. for focusing on the United States rather than any of a number of developing countries with high rates of poverty, and attacked the Human Rights Council as a “cesspool of bias.”

Noting the contrasts involved in a country of such vast wealth and innovation, the U.N. Rapporteur writes that these attributes “stand in shocking contrast with the conditions in which vast numbers of its citizens live. About 40 million live in poverty, 18.5 million in extreme poverty, and 5.3 million live in Third World conditions of absolute poverty. It has the highest youth poverty rate in the Organization for Economic Cooperation and Development (OECD), and the highest infant mortality rates among comparable OECD States. Its citizens live shorter and sicker lives compared to those living in all other rich democracies.”

The U.N. report underscores that the dominant political narrative guiding attitudes toward social welfare policy begins from the (false) premise that past policies were a wasteful failure. In fact the evidence clearly shows that the War on Poverty initiated fifty years ago was highly successful in reducing poverty in the ensuing decades.

Also essential to this narrative is the notion that the poor themselves are unworthy: recipients largely consist of people dedicated to “cheating” the system, and the poor themselves are responsible for their situations because of laziness and bad decision making. Both elements are undoubtedly heavily tinged with racism, especially since prevailing conceptions of who receives social welfare assistance do not correspond to the actual racial makeup of recipients.

The report observes that “it is striking how much weight is given to caricatured narratives about the purported innate differences between rich and poor that are consistently peddled by some politicians and media. The rich are industrious, entrepreneurial, patriotic and the drivers of economic success. The poor are wasters, losers and scammers.”

In scrutinizing these narratives, the U.N. Rapporteur made the effort to gather real evidence those currently in charge of policy willfully refuse to see: “The Special Rapporteur wonders how many of those politicians have ever visited poor areas, let alone spoken to those who dwell there. There are anecdotes aplenty, but little evidence.”

In contrast with this divisive narrative and the socially destructive policies that follow, social democratic societies like Norway and Sweden engaged in sustained policy efforts to cultivate a broad sense of societal inclusion starting from the Great Depression. Norwegians pay much higher taxes than Americans. They like paying taxes no more than Americans do, but the willingness to pay is sustained by the services that Norwegians receive in return (including health care benefits, university education, modern and efficient public transportation, etc.) – and by the trust between citizens cultivated by inclusive policies.

Conservatives will respond that Norway is a “socialist” society whose relevance is to be dismissed. That’s completely wrong.

Norwegians are capitalist entrepreneurs par excellence, where technological strides in sectors such as aquaculture (primarily salmon farming, a booming and rapidly growing industry) are possible because of policy consistency that encourages long-term investment and innovation.

Similarly, Norway’s policy makers recognize that all policies affect market incentives. Innovations to reduce CO2 emissions in Norway have been hard fought, requiring a series of measures designed to alter market calculations, such as reductions in taxes, road tolls and parking fees for electric vehicles. These incentives rather than some inherent “green gene” account for a recent explosion of electric vehicle sales in Norway.

The current U.S. administration, in contrast, views the inequalities documented by the U.N. NOT as a series of policy problems requiring attention, but as an opportunity that can be exploited to deepen societal divisions for political gain. The administration, in other words, is invested in destroying rather than building social cohesion.

Social cohesion is under stress in Norway over contentious issues such as immigration and taxation. But past policy has mobilized a constituency dedicated to preserving that cohesion and the societal benefits it brings, so efforts to deepen societal divisions will meet with significant resistance.

Put differently, high levels of trust between citizens and a strong sense of social cohesion tend to reinforce themselves. Once destroyed, citizen trust of governing institutions and trust between citizens are extremely difficult to rebuild.

The U.S. is not Norway, nor can it be. But there is an important lesson here: policies that generate social cohesion have dramatically positive effects not only socially, but for longer-term economic innovation and growth.

Intergenerational economic mobility in the U.S. is among the very lowest of the world’s rich countries.

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The degree to which income of one generation determines the income of the next (0 = income completely independent of prior generation; 1.0 = income completely determined by prior generation)                                                                                         Source: the Norwegian American; https://www.norwegianamerican.com/opinion/opportunity-of-social-mobility-great-in-scandinavia/

The best predictor of where children will end up in the future is the zip code into which they were born.

Talent, entrepreneurship and innovation are lost.

As the U.N. report notes, “The United States already leads the developed world in income and wealth inequality, and it is now moving full steam ahead to make itself even more unequal. But this is a race that no one else would want to win, since almost all other nations, and all the major international institutions, such as OECD, the World Bank and IMF, have recognized that extreme inequalities are economically inefficient and socially damaging.”

An administration truly dedicated to the welfare of the country would receive the U.N. report as a call to action. Instead, the reaction of defensiveness, spite and lashing out only further erodes the sinking international reputation of the U.S.

On top of this, the destruction of social cohesion wrought by the administration will yield long-term economic costs.

The Virtue of Political Accountability

I am in Oslo this week, investigating sustainability issues and government accountability in Norway. While there is no easy comparison between a country of 5.3 million people with low levels of poverty and income inequality and the United States, the contrast in degrees of political accountability could not be starker.

For all its tradition of social democracy through much of the 20th century, Norway is now governed by a right-wing coalition that includes a libertarian/nationalist/populist party advocating strict controls on immigration and asylum-seekers. This includes a Progress Party proposal to essentially criminalize asylum seekers by detaining in secure facilities those arriving without documentation as well as those whose asylum applications are rejected.

Three months ago, Norway’s Justice Minister, Progress Party member Sylvi Listhaug, posted on Facebook comments accusing the opposition Labour Party (Norway’s single largest party) of weakness in combatting terrorism.

Specially, Listhaug wrote that Labour put “terrorist’s rights” above national security.

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The Stortinget, Noway’s parliament building

Context makes the remarks particularly offensive, painful and highly inappropriate. Seven years ago, on July 22, 2011, a terrorist attack by a Progress Party supporter targeted a Labour Party youth summer camp in the worst mass shooting in Norway’s post-World War II history. The perpetrator set off a car bomb in central Oslo, killing 8, and then boarded a ferry to the island of Utoya. Impersonating a police officer checking on security in the wake of the car bombing, he spent 90 minutes executing 69 young people for their political affiliation.

What was the political reaction to the March 2018 remarks of Norway’s right-wing Justice Minister?

The opposition parties unified in condemnation of the minister’s comments, vowing to issue a vote of no confidence in the government if Listhaug did not resign.

Although Listhaug resorted to the empty “free speech” defense that has become so tiresome as justification for outrageously uncivil and destructive comments in American politics, she ultimately did resign. Listhaug was free to speak her mind. But she was held accountable for her verbal recklessness.

Accountability is vital for democracy; without it, trust in governing institutions, trust between citizens and the willingness to treat political opponents as loyal fellow citizens evaporates.

Politics in Norway may in recent years have become highly contentious, but a sense of competition between competing policy agendas nonetheless endures.

Perhaps so for Norway, but no longer for the United States.

In U.S. politics, spokespersons for the current administration now say virtually anything, no matter how scurrilous, about anyone – from the Prime Minister of a friendly country to a former U.S. President or Vice President, to elected members of the opposition party, to the policies and role of the Democratic Party, with increasing abandon and zero accountability.

Over time, the ultimate casualty may be democracy itself.

“Disruption” Imperils the U.S. at Home and Abroad

Many of us have watched in horror during the past week as the current U.S. administration has attempted to bully our allies on trade. The drama culminated in the U.S. executive repudiating the G7 communiqué issued on June 9 with a contrived attack on the Canadian Prime Minister.

The confrontation and bravado is for domestic political show. The approach makes no sense as foreign economic policy, only as domestic political mobilization. For the first time in memory, the United States has a “President of his base” rather than a President of the United States.

The disruption to valued domestic institutions and critical international relationships appears to be considerably effective with “the base.” As numerous media accounts suggest, supporters of the administration approve of disruption because the current occupant of the White House “is not a normal politician” and “says what he believes.” The substance of behavior, no matter how offensive, misguided and destructive, does not matter.

While supporters of the administration in the farming sector express reservations about the aggressive use of tariffs, recent accounts of voters in politically decisive districts reveal that some advocates of disruption believe the tariffs and threats of more to come are “necessary” to protect America.

But protect the United States from what, exactly?

Let’s start with the U.S. trade deficit. It is, in fact, enormous, typically running in the range of $50 billion per month. Ironically, though, trade deficits have fallen in recent months, largely due to an acceleration of U.S. exports in a growing global economy.

Global economic growth –- best nurtured through stability rather than disruption — is one of the surest ways to trim the trade deficit.

Trade deficits with individual countries – bilateral deficits – do not tell us a great deal, and a bilateral deficit with a country is certainly not a “loss.”

The U.S. ran a $318 million trade deficit with Bolivia in 2016. Are we “losing” to Bolivia, a country with a GDP per capita of $3100, about 1/19th that of the U.S.? U.S. producers import from Bolivia precious metals, gems and mineral ores, obviously inputs to higher value added production that enriches U.S. companies that import these goods.

Overall, the U.S. consistently runs a trade deficit precisely because the dollar is the world’s reserve currency. The dollar is the most widely used currency for transactions around the globe, and it is the currency most widely held in reserves of central banks around the world, comprising something like 63% of all global reserves.

This means demand for the dollar remains high, bolstering its “price” – i.e., the value of the dollar. Put differently, the value of the dollar is higher than it would be were the dollar not the global reserve currency. The consequence is that U.S. goods are more costly on global markets than they would otherwise be; the flip side of this is that imported goods are cheaper in the U.S. than they would be were the dollar not the principal global reserve currency.

Americans maintain a higher standard of living because of the global role of the dollar.

Were the dollar to decline as a global reserve currency, its value would fall relative to other major currencies. The U.S. trade deficit would as a consequence diminish.

Would we be better off?

Well, to begin with, with less demand for dollars, the U.S. would have to pay higher rates of interest to induce investors to purchase U.S. government debt. With the rising deficits ahead due to the slashing of corporate taxes in December 2017, a considerably larger share of U.S. spending would have to be directed toward paying interest on our debt.

Additionally, our standard of living would be lower due to the higher cost of imported goods.

Perhaps, then, it does not make much sense to focus so exclusively on the size of the trade deficit?

What about our G-7 allies? Supporters of the current administration point to high EU tariffs on U.S. products; the 10% tariff on U.S. autos gets a lot of attention, since the U.S. imposes a tariff of only 2.5% on auto imports from Europe. There are Canadian tariffs on U.S. milk, without which Canadian dairy farmers would be swept aside by a river of U.S. milk.

Nonetheless, Canada imports a much larger share of its total dairy product consumption than does the U.S. (which restricts imports), and the U.S. runs a large overall surplus in dairy trade with Canada.

Canada is also, by far, the leading market for U.S. exports; last year U.S. businesses sold $341 billion of goods and services to Canada.

Canada is also the second-largest source of foreign direct investment in the U.S.

At least three additional points are worth noting in response to claims that tariffs are necessary to protect the country. First, according to World Bank calculations based on U.N. Conference on Trade and Development data, the average level of tariffs between the U.S. and our European allies on traded goods is less than 2% on each side, among the lowest in the world among major economies (with the exception of Canada, which has an average applied tariff rate of about 0.8%).

Collectively, the G-7 countries purchase approximately 1/3 of all U.S. goods and services.

Second, while there are some goods for which European tariffs on U.S. goods are higher than U.S. tariffs on European goods, there are also many products for which the reverse is true.

Finally, while the U.S. runs a large trade deficit with its European Union partners, those partners in turn send a vast flow of investment into the U.S. EU investments in the U.S. total more than $2.7 trillion; U.S. firms hold about $2.3 trillion in investments in the EU. EU investment in the U.S. is eight times the size of EU investments in China and India combined.

The six countries of the G-7 just shunned by the current occupant of the White House account for a larger share of foreign direct investment in the U.S. than the rest of the world combined. Furthermore, these investments contribute enormously to U.S. exports.

Perhaps a policy of disrupting this relationship is not in the interest of the U.S.?

If the administration were genuinely interested in lowering trade barriers rather than engaging in a brawl over trade, diplomacy and steady negotiation would make sense. This could include resuming talks on a Transatlantic Trade and Investment Partnership, a focus of negotiations from 2013 to 2016.

As conveyed by the U.S. Trade Representative during the negotiations, “The Transatlantic Trade and Investment Partnership (T-TIP) is an ambitious, comprehensive, and high-standard trade and investment agreement being negotiated between the United States and the European Union (EU). T-TIP will help unlock opportunity for American families, workers, businesses, farmers and ranchers through increased access to European markets for Made-in-America goods and services.”

But the current administration abandoned TTIP upon entering office.

Careful diplomacy is inconsistent with a policy of bluster and “disruption” designed to appeal to the 40% or so who think the current administration is doing a superb job of putting “America first.”

Support for disruption is especially frightening because disruption drains policy of content. For supporters, it doesn’t matter what the current administration does, only that it is done loudly, that it trample on existing norms and structures, and that it be done in the name of “America first.”

But make no mistake, there are costs. Last week I wrote about the cost to domestic institutions, rule of law and democracy.

There are also costs of disruption to politically and economically important international relationships that can prove especially valuable for coordinating responses to international turmoil or crises.

Disrupting these relationships may just hasten the decline of American economic dominance and the role of the dollar — reducing the trade deficit, and our standard of living – after all.

 

Perspectives on American Democracy: Why We Should Worry

This past week the U.S. found itself isolated and received a stinging rebuke from our closest economic allies for unilaterally imposing tariffs on the insultingly flimsy grounds that the measure was necessary for U.S. national security.

The collective perspective of these otherwise friendly countries is a useful mirror that should (but likely will not) stir introspection regarding U.S. trade policies.

We can take a similar approach to assessing the state of democracy in the U.S. What do objective indicators, as well as views from the media in allied countries, tell us about our democratic trajectory?

Let’s start with objective indicators.

Freedom House is a highly respected and independent organization that works to promote democracy and to defend human rights, and which has been in existence for more than 75 years. Freedom House produces an annual report on Freedom in the World.

The 2018 report, assessing freedom for 195 countries on a carefully-crafted 100-point scale measuring the status of political rights and civil liberties in the previous year, downgrades the score for the U.S. from 89 in 2016 to 86 in 2017. The score was 92 as recently as 2014, and the 3-point decline from 2016 to 2017 is alarmingly steep.

FitW9_820px_United_States_Trajectory-cropped.pngAs the report indicates, “The past year brought further, faster erosion of America’s own democratic standards than at any other time in memory, damaging its international credibility as a champion of good governance and human rights.”

With any further slippage in 2018, the US will be as close in its freedom score to the highest ranking “partly free” country, Albania, as to the highest ranking “free” countries, Finland, Norway and Sweden.

To put this in perspective, while remaining in the “free” category, the U.S. now ranks markedly lower than countries at a similarly high level of economic development and comes closest in overall score to poorer former communist regimes that are now inside the European Union (though ranking lower than some of these countries, such as the Czech Republic and Slovakia).

COUNTRY/COUNTRIES

Freedom Score

Finland, Norway, Sweden

100

Canada

99

Australia

98

Germany, UK, Spain, Estonia

94

Czech Republic, Slovenia

93

France

90

Italy, Slovakia

89

Croatia, US

86

Poland

85

Romania

84

The largest decline in the score for democracy in the U.S. was in the realm of political rights, which includes ratings for the electoral process, the functioning of government, and political pluralism and participation. There were downgrades in the first two of these categories. Lower scores in the “functioning of government” category followed from these questions: Are safeguards against official corruption strong and effective? Does the government operate with openness and transparency? 

The report asserts of the U.S.: “in 2017 its core institutions were attacked by an administration that rejects established norms of ethical conduct across many fields of activity.”

The assessment continues: “The president’s behavior stems in part from a frustration with the country’s democratic checks and balances, including the independent courts, a coequal legislative branch, the free press, and an active civil society. These institutions remained fairly resilient in 2017, but the administration’s statements and actions could ultimately leave them weakened, with serious consequences for the health of U.S. democracy and America’s role in the world.”

Moving outside the U.S. to perspectives from friendly foreign territories, the Economist Intelligence Unit in its annual ranking of countries on democratic values recorded its second consecutive year of the United States falling below the threshold for a fully democratic society.

Scoring 7.98 out of 10, the United States ranks 21st globally – below 20 “fully democratic” societies — and is now categorized as a “flawed democracy.”

In the fall of 2015, German President Johannes Gauck, expressing admiration for American democracy on a visit to the Liberty Bell and Independence Hall in Philadelphia coinciding with 25 years of German unification, labelled these “holy sites of democracy.”

Two years later, the prominent journalist Jakob Augstein asked in the German news weekly Der Spiegel, “When will (American democracy) reach the point of no return?” (Wann ist der Punkt ohne Wiederkehr erreicht?)

Just yesterday, the British newspaper The Guardian featured an account of the erosion of democratic norms in the U.S.

The article focuses on the onslaught of attacks on institutions and rule of law. The piece quotes an American legal scholar, Eric Posner, who warns: “when you look at other countries that have slid into authoritarianism, what has happened is that the leaders of those countries have proceeded incrementally   . . . And you could slide into an authoritarian regime without a real crisis ever taking place, and I think that’s what people should be focusing on.”

Posner’s assessment echoes that of American political scientists Steven Levitsky and Daniel Ziblatt, who in their recent book, How Democracies Die, establish that while democracies have in the past fallen to violent overthrow, democracies also have and can be undermined by elected leaders. The current incumbent of the White House has launched a dangerous assault on the “referees” of democracy, resembling actions of past authoritarians that have at first imperceptibly and then more visibly undermined other democratic regimes.

Those in the “America First” camp may wish to dismiss – and may even disdain – views of foreigners and foreign press, no matter how favorably inclined toward the U.S. these sources may be more generally.

But just as dismissing allied views of U.S. trade policy without deep introspection is a mistake, disregarding the growing swell of indicators and voices warning of democratic erosion misses the point. These observations tell us that American democracy has eroded.

Objective indicators show us that attitudes toward governing institutions already became negative in the U.S. prior to this administration, with citizens considering government overbearing, wasteful, intrusive and ineffective. This leaves the American electorate and political system vulnerable to a campaign portraying government as actively working to undermine policies of an elected government, as I wrote about last week: https://mitchellpsmith.com/2018/05/27/progressives-the-right-and-the-dangerous-purge-of-the-deep-state/

This move is the stuff of authoritarianism.

A process of democratic erosion is underway in the United States. How far will it go, and when do we reach a point where the damage is irreversible?

Please follow the blog and associated news on my new Twitter account: @mpsmithblog: https://twitter.com/search?src=typd&q=%40mpsmithblog&lang=en

 

 

 

Progressives, the Right and the Dangerous Purge of “the Deep State”

While out walking my dog yesterday I had a revealing political exchange with a neighbor.

The conversation began with a polite discussion of the neighborhood; the neighbor generously volunteers to keep up maintenance in the community to save the homeowner’s association money on repairs. As we discussed various concerns about the neighborhood people had brought to his attention, his reference to “the liberals” came up; I self-identified as such. That’s when things got interesting.

In response to my confession, the first thing my neighbor asked was how much I knew about Stalin and the number of deaths for which he bore responsibility. Taken aback, I probed the source of the question. Knowledge about Stalin was his litmus test for liberals – and evidence of their denial of atrocities on the political left.

University students, apparently, are kept from knowledge of the horrors of Stalinism by professors who sweep this history under the rug as a means of sanitizing the political left.  I responded that this was not only entirely untrue, but that his association of progressives with Stalinism was severely misguided.

I chose not to take the discussion in this direction, but the obvious irony is that the political right is at this moment engaged in a campaign to “purge” the “deep state” in our federal government – a project with clear Stalinist overtones.

What is this project about?  What are its objectives and its consequences?

The New Yorker recently published an insightful account of the shameful “deep state” campaign.

The project amounts to a decision to go after civil servants who were important to developing Obama-era policies that the new administration finds objectionable. The New Yorker focuses on a loyal, talented young woman who was targeted due to her value in negotiating the nuclear deal with Iran and extracting the best possible terms for the U.S.

Of course, the record of the federal civil service is one of faithfully executing policies of successive administrations regardless of their politics. There can be obstruction and foot-dragging, but civil servants also are bound by a code of ethics that illuminates by contrast the disgraceful behavior of the current cabinet oligarchy.

The New Yorker points out how the Nixon administration systematically sought to marginalize civil servants it saw as a threat to that lawless administration’s political control.

The infamous “Malek Manual” was the guiding document for that project. This was an 80-page memo associated with a business executive brought into the Nixon Administration as a loyalist to1526960943.jpeg be assigned to political tasks in various agencies.

The manual establishes a system for classifying civil servants on a K, O, L, or N basis — for “Keep,” “Out,” “Let’s Watch,” and “Neuter.” The very project is reflective of an administration with no more regard for the rule of law than the current administration.

The manual rehearses in detail civil service rules of appointment and laments the difficulty of removal and adverse action against civil servants.

The objective is to identify means to circumvent these rules.

As the manual states on p. 72: “there are several techniques which can be designed, carefully, to skirt around the adverse action proceedings.” These include the “frontal assault” involving a frank announcement that the individual “is no longer wanted” and can leave either under favorable conditions immediately or be forced out under humiliating conditions later on.

“There should be no witnesses in the room” for the frontal assault.

Then there is the “special assistant technique” of assigning a “family man” who does not want to travel to duties involving extensive travel in order to force a resignation. The report actually contains this passage: “Until his wife threatens him with divorce unless he quits, you have him out of town and out of the way.”

But even this odious document refers in its conclusion to political costs that will ensue: “There is no question that the effective activities of a political personnel office will invoke a one-shot furor in the hostile press and Congress.” The costs would nonetheless be worth the benefits because of the necessity of establishing “political control.”

That political control, the document arrogantly concludes, “is the difference between ruling and reigning.”

Still, the document was to be kept confidential and there could be no links to the president.

What differs now is the brazenness of the purge and the very public way in which the process is portrayed as a virtuous assault on forces seeking to undermine a legitimately elected political authority.

In fact, while the Nixon era politicization of the civil service relied on secrecy, the “deep state” purge depends on its public nature.

In short, the current occupant of the Oval Office is attempting to turn the world inside out by weaving a story of victimization at the hands of federal institutions – from the intelligence agencies to the Justice Department to the Obama loyalists seeded throughout the federal bureaucracy.

This narrative has gained momentum on Fox and other right-wing media, and has reverberated on the official English-language Russian news station, RT.

If American citizens like my neighbor buy into the “deep state” purge, American democracy is on very treacherous ground indeed. As reported recently by the Washington Post, that is precisely what is happening as increasing numbers of Republicans (now a substantial majority) express opposition to the Mueller probe.

The objective, of course, is to undermine the legitimacy of Mueller’s findings in advance so that it will be possible to continue to wage political war on the findings as a buttress to the legal assault, which may well fail.

But democracy can not function without effective institutions whose legitimacy is widely embraced by citizens. The American political system will bear the costs of this institutional wreckage for years to come.

 

 

 

 

 

Subordinating the Public Good to Private Profit: The Abuses of the Department of Education Under DeVos

It is one of the many ironies of contemporary American politics: On the one hand, portions of the Republican Party attack the nation’s leading public institutions of higher education. On the other, the federal government withdraws scrutiny from for-profit colleges, some of which do nothing more than exploit vulnerable populations of students.

Like so much Republican Party propaganda, the campaign against American universities, which have contributed enormously and in multiple ways to U.S. global leadership in the decades since World War II, has been effective. The consequences have been popular discourses ranging from the insistence that universities smother free speech to the more fundamental claim that college may just not be “worth it.”

One consequence of this assault on not-for-profit higher education institutions is to make for-profit colleges look less unattractive in comparison – a development in synch with the current administration’s elevation of activities that generate private profit over investments in the public good.

The Department of Education under Betsy DeVos has embarked on a systematic deconstruction of efforts to investigate and punish fraudulent activity at for-profit colleges. Why, in a capitalist economy, would we wish to encourage and abet fraud?

Last week it became public that DeVos has appointed as the head of one of the Department’s teams that had been investigating fraudulent activity at for-profit institutions a Dean from one of the largest colleges formerly under scrutiny.

De Vos has appointed other officials from for-profit institutions to senior positions in the Department of Education – displaying the blatant disdain for rule of law and the public good repeatedly demonstrated by this administration.

This week, the New York Times reported on the frustrations of New Jersey’s Attorney General as the Department of Education withdraws its cooperation on efforts to punish fraudulent activities exploiting students at for-profit colleges in that state.

The scope of federal support for for-profit colleges is not new, and has been a problem in our system of higher education for years. In 2010, a Government Accountability Office (GAO) report documented the explosion in enrollment at for-profit colleges, which were the beneficiaries of $4 billion in Pell Grants and $20 billion in federal loans provided by the Department of Education in 2009.

In 2008-9, for profit institutions received 23% of the $105 billion total in federal grant and loan funding to higher education. Furthermore, for-profit colleges garner a large share of their funding from the federal government; in 2014-15, 30% of 1838 for-profit institutions received more than 80% of their funds from federal financial aid.

These institutions do enroll a disproportionate share of financially needy students; nonetheless, a model in which institutional existence is based on pulling in students and their federal loan money should at the very least face tough public scrutiny to ensure students are well-served. In the event they are not, the model comprises a grossly ironic federal subsidization of the for-profit system.For-Profit-College-List-4.png

The GAO report focused on 15 for-profit institutions, identifying fraudulent activities at 4 of these, and deceptive practices (including misleading information about graduation rates, accreditation, program costs and earnings potential) at all 15. While there are undoubtedly some honest for-profit institutions, the GAO report establishes that deception is the prevailing business model.

The Obama Administration drafted regulations to address these issues, citing the high debt to earnings ratio of student borrowers at for-profits as well as their high loan default rate – 11.9%, nearly double the 6.2% rate at public colleges.

Federal regulations drafted in 2010-11 established debt to earnings limits, adjusted based on program-completion and job placement rates.

According to the Sunlight Foundation, when the Obama Administration began pursuing regulations to address the high level of student loan defaults at for-profit colleges, the industry responded by tripling its funds spent on lobbying to more than $7.5 million. Lobbying activity intensified in 2011, focused on contact with officials in the then-Democratic administration. Reporting from the time refers to the industry’s “aggressive efforts, even by Washington standards.” As a Penn State education professor who studied the process concluded, “the industry did largely what it set out to do.”  “The Department of Education,” he added, “really bent to the lobbying push.”

With the new administration, subordination of the public good to private profit, and the misallocation of federal resources, have become far more egregious.

In recent weeks I’ve written about the evisceration of the Consumer Financial Protection Bureau; policy making there, at the Department of Education, the Environmental Protection Agency, etc. reveal a very clear pattern: industry personnel are being ushered into the federal government not for their business expertise, but so that they may systematically restructure federal regulation in the service of private profit and at the expense of American citizens.

Other than those who are profiting from predatory financial and marketing practices, which Americans are served by these policies?

No citizen, regardless of political inclination, has an interest in supporting this massive fleecing of the American people and the resources of the federal government at the hands of a colossally corrupt administration. The damage is spreading; Americans of all political persuasions should be alarmed.

Why Democracy Will Not Save Us From the Globalization Divide

Those of us interested in trying to understand the deep political divide that has emerged in the U.S., the UK and other capitalist democracies trace the gulf to citizens’ starkly contrasting experiences of globalization.

The prescient and prolific Harvard political economist Dani Rodrik suggests we’ve entered an era of hyperglobalization, in which globalization has become an end in itself that drives policy choices and constraints rather than serving as a means to prosperity.

Rodrik argues that negotiation of international trade agreements has been captured by lobbyists, with gains accruing narrowly to powerful transnational businesses such as financial institutions and pharmaceutical companies.

As a consequence, he points out, we are witnessing an “insurrection against business and political elites” by workers bypassed by the gains of globalization.

In his work, Rodrik considers two ways of reining in hyperglobalization: intensified global economic governance or greater reliance on domestic economic control.

Rodrik makes the case for the latter. His argument rests on two premises: any effort to derive global standards would encroach on and deny the norms and preferences of varying societies; and inclusion, transparency and accountability of policy making do not operate effectively at a global level. The excesses of globalization are very real, and must be balanced by greater national autonomy if we are to avoid still deepener societal fissures and to begin healing the enormous societal divide between those thriving in a globalized world and those who are struggling.

Fair points.

But there’s a problem. The argument for enhanced national autonomy implicitly assumes that democratic accountability functions well at a national level. Is this true? Is this so in the contemporary U.S.? Is it true in a UK mired in a divisive and debilitating process of exiting the European Union?

Can we assume that the policies pursued by the U.S. government are any more the “will” of the American people than international trade or other agreements reached between negotiators in closed processes?

British exit from the European Union was indeed the result of a popular referendum. But the ill-advised referendum itself was a result of political maneuvering by governing elites who sought to avoid the costs of political leadership. (Put differently, it makes a great deal of democratic sense to hold a referendum on whether to build a new water treatment plant across town. Does it make equal sense to hand over to the public a decision on something with such far-reaching, multifarious and irreversible consequences for the national welfare as membership in the European Union? No. Doing so was, therefore, a gross abdication of political leadership.)

Is domestic policy making any more accountable and any less subject to control by powerful and wealthy elites than the international agreements about which Rodrik so insightfully voices skepticism? Did the American people demand steel and aluminum tariffs? Have we asked the administration to gut the Consumer Financial Protection Bureau?

Did the public clamor for the U.S. federal government to abandon the Obama-era Clean Power Plan and to withdraw from a Paris Climate Agreement based on voluntary national contributions?  Did advocates of ordinary taxpayers have more than marginal input into the recent tax bill?

More directly to the point, do ANY of these policies serve the interests of those who have been left out of the gains from globalization? Or, in contrast, are these policies simply political tools to reward and retain rich and powerful political supporters, while simultaneously mobilizing a political “base”?

Sadly, we cannot – at least at present — rely on domestic democratic accountability to ensure the “sane” globalization Rodrik justifiably calls for. Rodrik is an astute student of economic incentives. At present, political incentives encourage exploitation and exacerbation of societal divisions. These divisions carve a path to political power.

No doubt, the dynamics of globalization deepen the economic and social divide. But our political leadership is dedicated to exploiting this divide, not to healing it.

Without democratic renewal, domestic politics will remain part of the problem.