Tag Archives: inequality

A New Deal for California Part 3 – Educate and Punish

Note: this is a cross-post from The Realignment Project.

Introduction:

In part 1 of a New Deal for California, I discussed why any effort to rebuild the state must begin with a frontal assault on high unemployment as the only reliable means of achieving budget stability – as opposed to self-defeating quests for balance via austerity. In part 2, I studied how the quest for a more perfect democracy is inextricably linked to a renewal of democratic control over the state's own revenues.

Today, I want to discuss two areas of policy that are among the largest spending categories in the California state budget, but which also represent two faces of the state, and two approaches to developing its youth, and two sets of values – namely, education and prisons.

Arnold's recent proposal to put a floor under higher education at 10% of the state budget and a ceiling over prisons at 7% of the state budget is only the most recent example of a long trend of discussing the two in the same breath. As I discussed in the linked article, Schwarzenegger's approach is fundamentally flawed, a mirage of egalitarianism masking a reality of utter callousness. A moral society cannot pay for the future of its most talented youth through the deliberate immiseration of its least advantaged.

However, a New Deal for California will have to grapple with the reality that California will either educate or incarcerate its young, and that the power to choose lies with us.

Higher Education:

In my previous posts on higher education, I've tried to get across the idea that the purpose of public higher education is to expand and improve the functioning of democracy, that higher education is a social and public good, not a private commodity, and that the way a public university is run speaks volumes about the values of the society. If there is an overarching theme here, it's that the choices a state makes on higher education both reflect and shape the nature of its society. A state where the children of the poor and the children of the rich are equally limited only by the boundaries of ambition and ability will be a society is genuinely one of equal opportunity and healthy, meritocratic competition. At the same time, states should also think of higher education as a social investment in a high-road economy, distinguished by high levels of skill and education, high wages, and high living standards.

A New Deal for California is absolutely about making that investment and choosing that high-road, but one of the things you see in public discourse about higher education in California in progressive circles is a certain fuzziness – when it's razor-sharp conviction that wins the day in politics. There's the required genuflections in the direction of the 1960 Master Plan, and perhaps even a statement about how “college should be free!” or how cheap it was to attend the U.C when they were young, but nothing about how we proceed from where we are to were we want to go.

By contrast, I think a New Deal for California had to start with a genuine commitment to a new Master Plan for California that charts a path for gradually reducing tuition to $0 for the U.Cs, CSUs, and Community Colleges over the next 20 years. We should be clear about how much this will cost: it will take about $1.7 billion a year to make the U.C tuition-free, about $2 billion a year to make the CSUs tuition-free (about $5,000 a year in tuition times 417,000 students), and about $1.78 billion a year ($614 a year times 2.9 million students) to make the Community Colleges tuition. Altogether, we're talking about $5.8 billion per year, or an extra $290 million per year.

Assemblyman Torrico's AB 656, which would establish a 10% excise tax on oil extraction to provide about $2 billion a year to higher education (a system already in place in Texas, which funds the University of Texas through an oil excise tax). That gets us about a third of the way to our goal. The rest could be assembled from a variety of revenue sources – this is not beyond the means of one of the richest states in the Union,  and one of the richest economies in the world.

One idea that has been suggested in the United Kingdom by Ed Milliband (Labour M.P, Shadow Energy and Climate Change Secretary) is to replace tuition costs with a “grad tax.” The idea would be that, instead of requiring students to pay tuition and go into debt up-front, which acts as a prohibitive burden for many working-class students and constraints the future career choices of graduates, that we instead ask graduates to pay a progressive surcharge of between “0.25% and 2% of their income over a 20-year period,” enabling graduates to contribute, according to their ability to pay, to higher education whether they work for a non-profit or a Fortune 500 company.

As I have said before, the ultimate goal that we should be thinking about is not 100% of the youth population attending university, but rather that 100% of the youth population being able to achieve whatever level of skill or training that their ability and ambition provides for. This means treating skills training- whether it comes in the form of a union apprenticeship, vocational or technical college, or a professional course in a community college – as just as important as any other form of education. It means paying more attention to helping students get employed as well as enrolled (such as is the case in the German and Japanese education systems). And it means making sure that students graduate high school able to take advantage of higher education/training.

A Word About K-12:

I'll only say a few words onK-12 education, since it's not an area of public policy that I've actually done much work on. As someone who's been a TA at the U.C for four years, I can certainly attest to the fact that California needs to do a better job at preparing students, both for college and employment, because it's quite surprising how many of the top 12.5% of high schoolers in California have real problems with constructing essays or interpreting reading.

Here's what I'll say – I believe that the “Educational Equality Project” reform community has over-emphasized college preparation, has tended to over-emphasize incentives over resources, and relies too much on an economistic model of corporate efficiency. I think primary and secondary schools should emphasize employment as well as college, and experiment with the German and Japanese model of partnering with employers to offer students additional paths for career development; in part, I think this comes from an approach to manifest class and racial inequalities that opts for individual, behavioral intervention (assuming that schools can “solve for” poverty without outside interventions on social conditions, and emphasizing college attendance without consideration for labor market conditions).

Moreover, I think reformers have under-sold the degree of resources that will be needed to correct inequalities in resources (which is why California needs to move to equalization of funding across school districts) as well as social and cultural capital. Things like increasing instruction time, providing tutoring to struggling students, and lowering class sizes are all well and good – I'd even add commitments to expand Head Start to 100% of those within 150% of poverty, and extend it, “Follow Through” style, to prevent “Head Start fade” in primary school –  but they will require a significant commitment of funds to work.

I think the rhetorical emphasis on incentives over resources comes from two sources: first, it comes from the unspoken recognition that a lot of the key policies adopted in heavily-promoted charter schools aren't costless, which raises questions about scaling. KIPP is lauded among EEP-style reformers, but a 60% longer school day/year, 24/7 teacher availability, and weekend work costs, and not just in dollar terms – 50%-plus turnover rates are common in KIPP schools. Second, it comes from what Matt Yglesias refers to as a “Green Lantern” theory about education – if teacher productivity and efficiency are what matters, then you don't have to deal with the fact that California schools are 43rd in the nation in per-pupil spending, because all you have to do is push teachers hard enough. At the end of the day though, resources are real and it is not impossible for California to commit to raising its commitment to the top 10 in the nation over a period of 10-20 years, similar to the commitment to tuition-free higher education as well.

Finally, as I've said before, I think the debate over accountability and results has become poisoned by the link between the models of accountability used by reformers and ideas about corporate efficiency, leading to a massive level of distrust among teachers and their unions. I've said it before, but it bears repeating – I'd be very interested to see how EEP reformers would react to an offer to have accountability and performance targets negotiated right into collective bargaining contracts, and put the unions in charge of and responsible for teacher quality.

Prisons:

All of this discussion of resources brings us to the piggy bank that both Schwarzenegger and I are hoping to use to improve the quality of education – California's overstuffed prison population, the second-largest in the nation. Right now, California imprisons 616/100,000 persons, and its prison population has been growing 500% over the last twenty years. This expansion has led to a growing budgetary burden, overcrowding, and a series of lawsuits over health and safety standards. No one particularly disputes that something needs to be done, but there are different ways to go about it.

Schwarzenegger's vision is to combine privatizationand outsourcing – essentially to shove our prisons off our books and avoid changing the way we deal with our offenders. This is morally unacceptable for any sane society. Private prisons are rightly notorious for corruption, abuse, and the further cutting of corners on medical care, living conditions, and safety standards. Shifting our prisons to Mexico is simply an attempt to do privatization without getting tripped up by lawsuits filed in American courts when the inevitable lawsuits alleging subhuman standards emerge. California should certainly commit to keeping prison spending below 7% of the state budget, but this is not a just way to do it.

However, there are ways to solve our prison problems. California's shift to drug courts and rehabilitation has paid dividends in the form of 10,000 fewer prisoners on drugs charges than in the 1990s, but there are still 30,000 prisoners on non-violent drugs charges who could be better dealt with outside the prison system. The bigger target is California's broken parole system – about 70% of parolees are re-incarcerated (the vast majority of cases being not new criminal violations but rather some technical violation of the terms of parole), at a rate that has increased six-fold in the last 20 years. As a result, about two-thirds of prison admissions are parolees rather than new offenders. There are better ways to handle our parolee problem than the current system of catch and release, and solving our parole problem would largely solve our overcrowding problem.

Dealing with these two factors would allow California's criminal justice system, including the police, courts, prisons, and parole systems, to focus on doing a better job with the prisoners we've got. This means more, not less, effort directed at deterring violent crime and higher rates of arrest; this means freeing up resources to separate out first-time and non-violent offenders from hard-core criminals and violent offenders, with an eye towards reducing our state's abysmally high recidivism rate. In the end, being smart about crime works better than toughness for toughness' sake.

On an ironic note, one of the few truly successful anti-recidivism strategies in the U.S has been the oft-targeted, poorly-funded college education programs. Expanding the commitment of college for all to the prisons might itself help to solve our prison problem.

Side-note – on Interdependent Parts:

In earlier segments of this series, I talked about the need for an overarching vision for California, beyond just the policy-specific pieces. To that end, it's important to see how education and prison policy fit as parts of a larger whole. For example, let's examine the impact of full employment policy and changes to democratic governance and revenue on these two areas of public policy.

To begin with, full employment would greatly increase the public revenues available for K-12 and higher education. It would also add on a crucial back-stop to our system of educational development, ensuring that U.C and CSU and CCC graduates who've received incredibly expensive training don't get thrown on to an overcrowded labor market (as is happening now) where they can't find work, leaving their training to go to waste. It also means that rather than focusing solely on college attendance as our only strategy for getting kids out of poverty that we can offer them a chance at high-wage full time employment. Prior to the unraveling of high-wage labor in the 1980s, a high school graduate who had neither interest nor aptitude for an academic career could get a job for life as a skilled, semi-skilled, or even unskilled worker and be assured of economic security and a middle-class standard of living. With full employment, there's no reason that we can't build our way to an economy that provides opportunity to those kids as well as the college-bound.

Full employment would also greatly reduce our prison burden. We know that anywhere from one-third to two-thirds of prison admissions are unemployed at the time of incarceration, that many property crimes are associated with unemployment, and that the increased difficulty of finding employment as an ex-offender is a major cause of recidivism. While certainly not a silver bullet (violent crime is not particularly correlated with employment rates), full employment can only help. (On a slightly more cynical note, one of the reasons why prison guard unions have resisted parole reform, decriminalization, and other efforts that might reduce the prison population is out of a desire to protect the jobs of their members. In a full employment economy, where workers could be assured of having a job, this political inertia could be more easily overcome).

A similar case is true for democracy and revenues. A more functional democracy, where legislators could more easily match our revenues to the level and kind of goods and services demanded by the people, is one where the kinds of commitments we want to make to both higher and primary education can be made, and where reforms to our prisons systems can be more transparently and directly debated and carried out.

Conclusion:

There are 159,000 students at the University of California. They are among the top 12.5% of our youth, the most talented, the best educated, with the greatest likelihood to succeed. There are 170,000 prisoners in the California prison system – they are disproportionately young, non-white, and less-educated. Even when they are released, they will find it more difficult to find employment, housing, and credit. To place the burden of the best prepared on the least prepared is to compound injustice with unfairness.

After Health Care Reform – State-Level Single-Payer

Introduction:

In the wake of the passage of the Affordable Choices Act into law, there are a lot of questions about how we go on from here. Obviously, one line of activism focuses on ways to improve the health care reform act. To some progressives so morally outraged at the defeat of the public option that they’ve given up on the Congress as hopelessly wedded to corporate interests, obviously, this isn’t so appealing.

However, if the progressive movement can be clever and strategic for a second, and is willing to work from within rather than to cry defeat, we can actually work on the state level to move the goalposts of the health care debate in the direction of single-payer before we even get to the next round of national legislation.

Movement on the State Level:

One of the shortcomings of the Affordable Care Act of 2010 is that instead of one national exchange (as progressives in the House had hoped to establish), we will have 50 state-level exchanges (possibly more if states decide to establish separate individual and group plan exchanges). While there are Federal standards applied to state exchanges (with the ultimate stick being that the Federal government will step in to create their own exchange if the state fails to meet the new standards), the double-edged sword of the bill’s passage means that a lot of political action now moves to the states.

We’ve already seen this starting on the right, with states like Oklahoma, Arizona, Mississippi and Tennessee acting to ban plans that cover abortions from their state exchanges. This is a terrible attack on the right of women to control their own health care coverage with their own money, and needs to be met with prompt resistance. However, while state exchanges are an opening for conservatives in the states in which they dominate, the reverse is also true.

There is an opening for progressives in deep blue states to act in ways not possible in Congress. While single-payer was completely boxed out in negotiations, and even a weak public option was ultimately thrown out at the behest of conservative Democratic Senators, there’s no reason why states where progressives dominate can’t take the lead and change the “facts on the ground.”

Step 1- Public Option and Single Payer in One State:

As I have repeatedly discussed, the single most important change that the Affordable Care Act made was to expand Medicaid to Medicare reimbursement levels (thus providing an incentive for most doctors, hospitals, and clinics to accept Medicaid patients) and to expand Medicaid coverage to everyone within 133% of poverty.  While most of the health care bill is not that historically revolutionary in nature, this is. Progressives who claim that this bill is worse than nothing cannot ignore the fact that 16 million out of the 32 million covered will be covered essentially through Medicare – while not Medicare for all, we have at least achieved “Medicare for half.”

Moreover, nothing in the bill prevents a state from increasing its eligibility standards above 133% of poverty, as many states have already begun to do with programs like SCHIP, or from expanding eligibility for “Medicare/aid” to groups who are interested in buying into public programs (like the labor movement, for example). Hence, there’s nothing that prevents states from establishing a single-payer system, either by expanding existing programs or by establishing entirely new entities.

At the moment, an entirely new system like California’s AB810, would likely run into a problem with ERISA (the Employee Retirement Income Security Act), which “supercede[s] any and all State laws insofar as they may…relate to any employee benefit plan.” (For example, AB810 bans the sale of duplicative private insurance plans) Progressives in the House and Senate tried to fix this problem, and the best that they were able to do was a provision that kicks in in 2017 for states to receive waivers from the Department of Health and Human Services as long as the new system is “at least as comprehensive,” “at least as affordable,” for “at least a comparable number of its residents.”

While one progressive objective in the next seven years will be to add an amendment to the law that either advances the timeline for waivers to the present, or that amends ERISA to explicitly allow for state single-payer programs, there’s a lot that can be done in the meantime. To begin with, state-level single-payer systems like AB810 can be drawn in such a way to avoid a conflict with ERISA (see here for the details). Alternatively, a state could pass a Medicaid For All law to cover the six year gap between the present and the time at which the new system could receive a waiver from HHS, or just pass a Medicaid For All law and stick with it.

Step 2 – Seizing the Commanding Heights of the Exchanges:

Even before 2017, there’s nothing that stops a state from placing a Medicaid-for-All plan on the state’s exchange as a public option. As the law is currently written, there’s already explicit provisions for states to put existing SCHIP programs on the exchanges (Title II, Subsection C, Section 2201) – and states are currently allowed to structure SCHIP within their Medicaid programs.

Thus at the very least, it’s possible to establish a robust public option on any state’s health exchange. Once such a program is on the state’s exchange, it can easily compete and win on price and quality. The robust public option envisioned by progressives in the House would have provided health care plans on the basis of reimbursement rates set at Medicare’s set prices plus 5%. Estimates of the robust public option suggested that premiums would be 11% cheaper than private plans – state public options would be 5% cheaper, at an average of $209/month for an individual and $443/month for a family. At the same time, the state public option would gain advantages of quality – providers would prefer to deal with payers that aren’t going to run up their administrative costs by trying to avoid paying its bills, whereas consumers would prefer to be covered by an insurer they know isn’t going to try to boost profits with premium hikes, rescissions, and fraudulent denials.

Once states either get waivers or are explicitly allowed to shift to true single-payer programs, premiums would likely fall even lower. AB810 envisions progressive premiums that vary by income, and further savings from administrative costs and bulk purchases, for example.

Step 3 – Uniting Across State Lines:

As other observers of health care reform (such as Ezra Klein) have noted, one major problem with state-run health care is the intersection between the costs of running their own health care systems and the budget limitations placed on them by balanced budget and debt limitation requirements, and the kind of massive declines in state revenues that come with recessions. Even in the case of cheaper single-payer systems, states are going to run into trouble unless they can capture revenues and budget counter-cyclically. This doesn’t have to be a problem – as I’ve written before, there are ways to make states capable of running a Keynesian counter-cyclical program either with or without Federal assistance.

One opening that the Affordable Care Act provides is explicit permission for states to combine their exchanges as early as 2013 (Title I, Subsection D, Part IV, Sec 1333), or to allow plans from other states onto their exchanges. This creates something of a domino effect – once one state establishes a Medicaid For All plan or a true single-payer plan, any other state that wants to have Medicaid For All or single-payer can do so through an inter-state compact. By sharing the costs of providing single-payer health care across a larger population and a larger revenue basis, states can reduce the overall fiscal burden on each state’s revenue system.

Obviously, conservative states that are rushing to ban abortion on their exchanges are unlikely to cooperate in this venture. Thus, what we are likely to see is a process by which the establishment of California OneCare or the New York State Health Plan leads to the union of states with progressive majorities, until we see something like “BlueCare” for everyone in the blue states. Now, I’ve written before that progressives who dismiss the red states or who envision either letting them or the blue states to secede are deeply wrong, because such an attitude ignores the millions of people who vote Democratic in those states, usually poor and minority voters.

A “BlueCare” system would still leave America grappling with enormous national health challenges, with Sweden in the Blue States and the Third World in the Red States. But what such a system would do is to change the political arithmetic of health care reform.

Conclusion:

From here on out, a huge part of the politics of health care reform will not be the establishment of new programs, but the capturing of territory and populations. We know that when people actually get public health insurance or single payer health coverage that they quickly learn to love it. Fears of government takeover of health care transform into “hands off my Medicare!”

Hence, the expansion of state public health coverage or single-payer coverage will (in addition to the immediate practical impact on health care outcomes in that state) will greatly change the expectations and thinking of the electorate. As significant populations shift from private health insurance to public health insurance, Congressional Representatives and Senators face a different electorate. Instead of a nation where the majority of the population have employer-based private health insurance and are afraid of losing it through some new government intervention, they’ll have to deal with a large and mobilized constituency of voters who are used to public or single-payer health care, who like it and want to keep it, and who will react with hostility to any attempt to limit it.

And that’s how we get to single-payer.

A New Deal for California

Introduction:

The current state of California politics can be summed up in a simple comparison: in the Republican gubernatorial primaries, we see one candidate promising that their first action upon becoming governor is to put 40,000 people out of work and the other complaining that this isn’t enough; in the Democratic convention, we see a party divided over whether to fight for majority rule for budgets or for budgets and taxes.

As a state, California seems caught between the scissors of an increasing need for public services to provide a basic level of social protection for the sick, the elderly and the poor and to restore our high-road, high-wage economy based on superior public education and green technology, and a paralyzed, undemocratic, and irrational political structure that is unwilling and unable to take the necessary actions to meet those needs.

We know that the strategies proposed by the GOP’s gubernatorial candidates won’t work because they are essentially a retreat of the last seven years of failed policies – Schwarzeneggerism without a human face.

Yet Democrats lack a forceful message about what we want to do beyond the immediate issue of the budget.

What Won’t Work:

Contrary to conservative spin, government spending is not out of control in California. Especially when you take into account the fact that the California Price Index (i.e, the rate of inflation) has gone up 72% in the last 20 years, and that the population has increased 28% in that time, government spending is flat or declining. As the California Budget Project notes, thanks to rounds of drastic budget cuts, current spending is $16.9 billion below the previous year, and next year’s budget is projected to $20 billion below 2007-8 levels. As a share of the economy, California state government is down to levels we haven’t seen since the 1970s.

In this situation, regressive tax cuts to wealthy corporations is only going to make things worse. Meg Whitman’s proposed $10 billion dollar capital gains tax cut would increase our current deficit by 53%, and the savings that she proposes to make from unspecified but supposedly gargantuan amounts of “waste, fraud and abuse” wouldn’t come close to filling in this hole. Poizner’s proposals are equally ludicrous.

Moreover, the proposals by either candidates to eliminate tens of thousands of workers make the same elementary mistake that all anti-government activists make: public sector workers are real workers. 40,000 workers laid off means that California’s unemployment rate will rise from 12.6% to 12.84% at the very least, because it will also mean the loss of $1.59 billion in consumer spending, mortgage payments, and local tax base.

Simply put, the theoretical basis behind right-wing economic policy only makes sense in rare occasions in which government taxation is so soaringly high that businesses can’t make a profit, government borrowing is “crowding out” demand for credit in the private sector, and we’re in full employment so that a higher public sector workforce is causing a “substitution effect” which lures people away from the private sector. Now, even in those rare occasions, it’s not a slam dunk case (you have to take into consideration the increased provision of public goods and services, how much of private sector demand is for useful investment as opposed to speculation, and whether employers compete by offering higher wages) – but that’s not what the situation is right now.

Taxation in California is relatively modest (19th out of 50 states), and isn’t that progressive (the poorest fifth of Californians pay 11.1% of their income in taxes, the richest 1% pay 7.8% and 2,000 people who made more than $200k a year paid no taxes). Far from crowding out private investment, interest rates are basically at zero percent thanks to the Federal Reserve, and the private sector isn’t lending out of fear of losses. As far as unemployment goes, California’s 12.6% unemployment rate is one of the highest in the country, and our underemployment rate (including discouraged workers, part-time workers who want to be full-time, and so on) is even worse at 24%.

Where We Need to Go:

The Democratic Party is clearly correct in beginning with majority rule, because it will be impossible for California to do anything about our current fiscal or economic situation without the ability to pass budgets and raise revenues on a democratic basis. To that end, I heartily support the California Democracy Act (majority rule ballot initiative) being sponsored by George Lakoff and the progressive movement – and so should you.

However, I do want to make the point that Democrats need to look beyond the 2/3rds issue, no matter how hard this might be – because we cannot address the budget crisis (or any other of California’s pressing needs) without addressing unemployment. Even if we had majority rule, if we don’t act to bring down the unemployment rate, trying to balance the budget in our current economic climate is chasing a moving target over a cliff. Only when we get more people employed, so that they have paychecks to spend (which brings in sales, income, and payroll taxes), so that they can pay their mortgages (which will at least staunch the bleeding from declining property values and assessed taxes), and so that employers respond to increased consumer spending by expanding their inventories and expanding their payrolls (which in turn brings in more sales taxes, corporate income, property, payroll, and capital gains taxes), will we be able to solve our budget crisis once and for all.

Hence, job creation needs to be made a central part of the Democratic Party message, in the same way that single-payer health care for California (AB810) or historic climate change legislation (AB32) should be the core of the Democratic Party message about what we want to do to fix California.

Step 1 – A Jobs Program as a Tourniquet:

As I’ve discussed in previous posts, it is well within the fiscal capacity of California (or indeed, of most states) to create a jobs program on its own. In order to bring California’s economy and job market into normality, we need to create about 1 million jobs – which would bring our unemployment rate down to 6% (that’s not full employment, but it’s a start). It costs approximately $35 billion to put 1 million people to work for a year.

By structuring our jobs program as a form of social insurance – funding it by the equivalent of a 1% payroll tax, which would raise about $5.7 billion a year, and then using that as collateral for either a Federal or state reserve bank loan – a jobs program could be passed on a majority vote basis. Social insurance premiums are fees by any rational definition of fees, and therefore aren’t subject to the 2/3rds rule.

The reason why we need to pass an immediate jobs program is that it acts like a defibrillator applied to someone in cardiac arrest – especially if we target the jobs to areas where unemployment is concentrated (due to the downturns in the construction and agricultural industries, areas of the Inland Empire have underemployment rates of 40% or more), a jobs program that suddenly cuts unemployment in half not only has a direct impact in terms of fewer people unemployed, more paychecks flooding into depressed local and regional economies, fewer foreclosures and improved property values, but it also has a powerful effect on the “animal spirits” of employers and investors. No matter how low the taxes, employers and investors are not going to increase their payrolls or their inventories if they lack confidence that there’s going to be enough consumer demand to support expansion – by making a sudden and dramatic shift in employment levels, the public sector can radically reboot the expectations of private sector employers and investors. Then and only then will we see private sector employment recover – and with it, California’s tax base and budget.

Long Term Thinking – Full Employment for CA:

Getting back to 6% unemployment isn’t full employment, although it really helps. With a normal unemployment rate and sustained recovery in consumer spending, private-sector employment, and so forth, we can get the fundamentals of California in order. With a stable economic outlook, we can make budgetary decisions that will have a long-term impact – instead of cobbling together fixes that become undone a few months later as revenues continue to fall. With more resources flowing into state coffers, we can begin again to make the investments in public education, mass transit, and alternative energy.

However, there is a big difference between a California that averages 5-6% unemployment and a California which guarantees full employment (i.e, unemployment is kept below a “frictional” level of 3%). For one thing, that 2-3% of the workforce means $43.2 billion a year in production of goods and services that never happen, as well as about $13 billion in wages that won’t be earned, spent, and taxed, and it means increased costs for Unemployment Insurance, CalWorks, Medical, and other social services for the unemployed. In the same way that a single-payer health care system will make California a better place, both by ensuring that everyone has access to health care, but also that employers, start-ups, and other ventures won’t be burdened by heavy health care costs, full employment will mean that California will be a state where no one goes without work (frictional unemployment refers to the temporary periods of unemployment caused by people moving between jobs), with much lower poverty, and many more resources to make the kinds of investments we make.

In its own right, full employment is an investment in a better California. Like any blue-chip investment, it’s not free. In addition to using labor market policies to create incentives for employers to keep their workers on the job instead of laying them off, we’d also need a reserve of about 330,000-500,000 jobs in order to keep unemployment below 3% if the private sector falls down on the job. That costs about $11.7 to $17 billion a year, which the equivalent of a 2-3% payroll tax would cover without the need for regular loans from the Fed or a state reserve bank – which would be reserved for emergency situations in which a sudden recession causes a sharp spike in unemployment.

Conclusion:

A state jobs program isn’t sufficient by itself to create a “New Deal for California” – but it is a necessary prerequisite for the rest of the progressive agenda. Full employment will put us on the path to a high-road, high-wage economy, and from there, it will be much easier to get to single-payer or a green economy than it would be with a 12% unemployment rate.

50-State Keynesianism, Part 3

Note: this is a cross-post from The Realignment Project

Introduction:

In part 1 of this series, I discussed the possibility of creating state economic recovery bonds that the Federal government could buy to lend its ability to deficit-spend in recessions to the state governments to counter-act their natural pro-cyclical tendencies. In part 2, I expanded on how we could adapt state governments to Keynesian economic policies by passing anti-recession budget reform initiatives allowing limited deficits during times of economic recession, establishing state banks to provide borrowing capacity for state governments, and establishing state job insurance programs.

So what remains to be done for Keynesian economic policy to be brought to the benefit of state government?

Investment Function:

Historically speaking, the economists who followed John Maynard Keynes can be grouped into two camps: fiscal Keynesians, who created a synthesis between Keynes and standard neoclassical microeconomics, and emphasized the power of aggregate spending and monetary policy, and social Keynesians, who emphasized the more heterodox elements of Keynes’ thinking, and argued that the government had to be a more dynamic actor in the economy. One of the chief arguments of the social Keynesians was that fiscal Keynesians, in their attempt to fit Keynes’ theories into the free market orthodoxy, had neglected the great man’s denunciation of the market as a tool for investment. Less well known than his arguments about aggregate demand, John Maynard Keynes had argued in the General Theory that the stock, bond, and money markets were terrible ways to distribute capital for investment, likening them to a giant casino, in which people made bets on what they thought other people would think the average man would think. Keynes argued that this process inevitably led to excesses of fear and exaltation that led at various times to over-investment, under-investment, maldistribution of capital, and general inefficiency – the government, he argued, would have to take over the investment function. And so the social Keynesians argued that it was insufficient merely to boost the level of Federal spending in recessions; the government had to use its spending power to invest counter-cyclically in those needed areas (infrastructure, for example) over the long run.

So, what do we need in order to make sure that 50-State Keynesianism can handle both the short-term consumption function (boosting aggregate demand in recessions, dampening things down in bubbles) and the longer-term investment function?

To begin with, as mentioned in part 2, the establishment of state reserve banks are a critical structure for developing a stable and counter-cyclical source of financing during recessions, both to fund the consumption function programs , and to provide the capital to keep necessary public investments running in times when the private credit markets have frozen up. However, it is only once “fractional reserve lending is combined with an agile use of the power to tax (as opposed to the 2/3rds rule in California) and a temporary suspension of balanced budget rules that individual states can muster enough financial muscle to be able to run counter-cyclically.

The second part of establishing a capacity to do long-term investments is to set up mechanisms for state planning. A State Full Employment Budget, modeled after the process outlined in the Full Employment Bill of 1945-6, would require governors to send to the state legislature an economic projection of the labor market for that year, estimating the total number of jobs that will be created by private industry, and recommending public programs to create the necessary shortfall. This would create the necessary political infrastructure for doing Keynesian policy on a regular basis, create a framework for infrastructure development and jobs programs, and incidentally is a major policy accomplishment that any progressive governor could accomplish for free. Similarly, establishing the bureaucratic organization necessary for carrying out a Swedish-style labor market policy is also a way to develop the institutional mechanisms for doing long-range, counter-cyclical investment projects.

Consumption Function:

All of this fiscal capacity to do long-term investment in recessions (in order to keep the pace of job creation, technological improvement, and the like on pace) must also be matched by an equally-strong capacity to use effective and efficient “consumption function” policies to boost incomes and employment in the teeth of a recession. As I have discussed, a Job Insurance system (backed up by state bank lending, a state Full Employment Budget, and a Labor Market Board system) can provide an extremely efficient form of such Keynesian stimulus: a job insurance system, unlike standard Keynesian spending (where money is plugged into spending, and then a multiplier effect is supposed to generate additional employment), adds to aggregate employment in the first place, and then again when the wages generated by that employment create a multiplier effect on the rest of the economy. Similarly, a state-level Unemployment Insurance program that actually covers all workers and provides a decent pension would provide a truly effective “automatic stabilizer,” rather than the sad, crippled thing we have today.

Moreover, the expansion of state EITCs (earned income tax credits) into a system of guaranteed minimum income for workers can serve as a third line of defense. In addition to re-distributing wealth to the working poor (and thus, abolish working poverty), such a system could be made into a counter-cyclical program by providing temporary boosts in recessions and then freezing the EITC during “overheats.”

Sadly, if one looks at the state of California, where the state has dramatically accelerated withholding to counter-act falling tax receipts and fill up the deficit, one sees the illogic of states following balanced-budget policies in a recession. By increasing withholding, the state partially recoups some of its lost revenue, but directly reduces the monthly take-home pay of workers, further depressing consumer purchasing power, which in turn hammers retailers, manufacturers, transport, and so on, who in turn reduce employment and order, which further reduces spending. Alternatively, with a sufficient financing system (as outlined in the previous section), one could counter-cyclically adjust state income tax withholding to boost or lower monthly income.

Fitting The Pieces Together:

With the potent array of economic policy tools outlined above, state governments should have the “state capacity” to do Keynesian economic policy in recessions. However, as critics of Keynesian policy used to point out (and it’s the rare “honest cop, guvna”), Keynesian policy is supposed to be applied in economic boom-times as well as recessions: governments are supposed to raise taxes and slash spending when overly rapid economic growth pushes inflation too high.

Naturally, this tends to be somewhat politically unpopular. However, as I’ve argued in “Linking Taxation and Spending,” I don’t think it’s automatically the case that increasing taxes and freezing spending has to be a political killer, as long as it’s done in the right way. By linking tax increases to specific policy areas – boosting the “education tax” or the “transportation tax” – and thus framed as making investments for the future, I think we can short-circuit anti-tax politics by shifting the debate towards public priorities. Similarly, freezing spending can also be reframed as saving for future initiatives, such that the public knows that spending on popular programs is not being miserly forgone, but rather delayed, can also have a positive effect.

The same institutions that could make Keynesian policy easier and more successful in recessions can also have the same effect in boom-times. For example, the Swedish Labor Market Policy system involves rebating taxes on profits if companies agree to sequester the money in restricted accounts in the state bank that are set aside for infrastructure investments (and released during recessions). When investment is running too high, these accounts can be re-frozen and the tax rate on profits can be boosted – again, reframing the issue from taxing business to laying aside money for the future (since the businesses aren’t actually losing the money, just having it sequestered, it’s not even really a tax).

Conclusion:

As the thrust of this series has pointed out, the question of whether states can pursue Keynesian policy is not ultimately a question of ability. There are many different, tried-and-tested methods for conducting Keynesian economic policies that states can make use of (especially if states can get themselves out of the crippling legacies of supermajority and balanced budget rules). Ultimately, it is a question of political will, whether progressive  politicians at the local and state-wide level are willing to take up the banner of activist governance and challenge the orthodoxies of modern statecraft, and whether the voters who decry the mass firing of teachers and the closure of state parks – to say nothing of double-digit unemployment, millions of foreclosures, and falling levels of health coverage – are willing to take control of their economic destinies.

CA-10: An Interview With Sen. Mark DeSaulnier

Mark DeSaulnier has had a rapid ascent through the state legislature and now, potentially, into Congress.  Within three years, this former restaurant owner won elections to the State Assembly (in 2006) and the State Senate (in 2008), with a Congressional primary scheduled for September 1.  Prior to that, he was a 3-time member of the Contra Costa County Board of Supervisors and the California Air Resources Board.  A former liberal Republican in the mold of Edward Brooke, DeSaulnier switched parties several years ago and compiled a liberal voting record in the State Legislature.  His first ad of the campaign covered the topic of health care, and I asked him about this and several other issues in an interview conducted last week.  Having taken place before the crucial budget vote, I spent a good deal of time asking DeSaulnier about that, and you can see his responses here.  Depending on your perspective, he either did or did not fulfill the promise to vote against “most” of the budget, by the way, voting no on 11 of 26 bills, including all of the more controversial ones.

I’ll pick up with a paraphrased transcript of the rest of the interview below:

DD: So, other than the budget, how’s it going with your campaign?

Mark DeSaulnier: Well, this is a tough campaign, with a big field and a lot of good candidates.  The polls we’ve done show us winning.  We’ve got 70% of the money that we need to compete, and a lot of great endorsements.  I would say we have the most local endorsements inside the district.  And we’re going to be able to put together a great ground campaign, with people I’ve worked with for 20 years in the district.  I think we’re going to be concentrated in Contra Costa County, where we can post a big number.  I think we’re putting ourselves out there as the local candidate, who has represented the district for a long time.  And we have people out there walking and phoning, putting forward that message.

DD: As long as we’re on California, obviously you’ve seen the dysfunction at the local level.  What do you think you can do at the federal level to remedy this situation?

MD: You know, I read a lot of Paul Krugman, and I agree with him that we’re going to need a second stimulus package.  And I think we need it sooner and not later.  I think we can take what’s been learned from the stimulus package that we’re doing now.  I think the problem is that the banks like Citi and Bank of America aren’t lending, and so we need to require the banks to lend, with relief for the credit worthy who are falling behind on their payments, and more money out to the credit unions who have done a better job handling this crisis.  Next, I think we have to do some sort of fiscal stabilization.  I see it in this state, people who need to access the safety net go up when the economy goes down.  And so we have to break that cycle, and I think we can by providing some relief.  Finally, we should say that we can do things more efficiently.  There shouldn’t be this silo mentality.  I’ll give you an example.  We put together these “one-stops,” places where you can go for unemployment and job training.  And people tell me that you have to get out of one line and pick up a phone in the office to get your unemployment benefits.  That just doesn’t seem like good government to me.  And I think we have an opportunity to make government work better.

DD: Let’s move on to health care.  Seems to be a big issue for you.  What are the principles you carry in this debate?

MD: To me, the gold standard is single payer.  We have the problem of getting health care to those who need it, and also how we get control of costs.  I think the public option is the first step, and if we do it right, it could be, and really I think it should be, single payer.  The question is what are the Democrats willing to give up to get moderates on board, and I think there have to be some lines we cannot cross there.  In the end, it has to be about flexibility and more choice.  That’s the way you’re going to sell this thing.  It’s telling that the moderates want firewalls in their plan, they don’t want the people to have more choice, they want to preserve something for the insurance companies.

DD: Will you commit to not vote for anything that doesn’t have a quality public plan available on day one, not a trigger, open to everyone, and with the kind of rates necessary to force the insurance companies to compete?

MD: Yes.  I think as liberals, as progressives, something we don’t do a lot but which we can learn from Republicans, sometimes we’ve just got to say no.

DD: Congress has started to debate the regulatory reform ideas put forward by the Obama Administration, and they’re getting a ton of pushback from the banking industry, particularly on the concept of the Consumer Financial Protection Agency.  It’s the same way on a lot of these issues, the banks just won’t relent.  How do we solve this problem?

MD: Honestly, the politics will never get totally fixed without a public finance system in this country.  And then people say, “why should we pay for elections?”  The truth is that the average American is paying disproportionately already, when the giveaways to businesses and corporations are factored in.  They buy elections fairly cheaply, and they get the rewards.  So that’s something we have to pursue.  As far as your question, yes, I think we need a Consumer Financial Protection Agency, in fact I think it should be cabinet-level.  A Secretary of Consumer Protection.  The point to all of this is that if middle income people don’t have wealth, democracy ends.  That’s just the bottom line.  And one way to ensure that is by protecting consumers, so you don’t see all their wealth go into someone else’s pockets.  Inequality is just killing us right now.  Kevin Phillips wrote about this years ago, in Bad Money, and he was very prophetic.  I also think that you can’t reform the financial system without holding people accountable.  And so I would involve the Department of Justice right at the beginning.  That’s the only way to really ensure it doesn’t happen again.

DD: You mention inequality, it’s something Democrats don’t talk about enough.  A recent Wall Street Journal story talked about the top 1% earning 35% of all the compensation in the country.

MD: It’s stunning.  And our tax structure, by the way, rewards the accumulation of wealth, not work.  This happens when you get a financial services economy, which is completely not sustainable.  We don’t have manufacturing, we just have this financial services giant, and it trades in bubbles.  So one way to reduce that inequality is to retool the financial services sector, make it smaller, make it more boring.

DD: OK, last question.  I wanted to ask you about SB375, the smart growth measure that you played a big part in passing last year.  This bill doesn’t get a lot of attention, but it really offers a blueprint to how to achieve smart growth policies with the statewide authority working in concert with local communities.  Do you plan to scale that up if you make it to Congress?

MD: Oh, absolutely, and this is where I think my background really suits me to replace Ellen Tauscher.  I chaired the Transportation Committee in the Assembly as a freshman, I think the first person to do that.  I spent ten years on the California Air Resources Board, and I co-authored SB375.  I’m pretty sure there’s a companion bill in Congress right now.  Doris Matsui (CA-05) is carrying it right now.  I have honed in throughout my career on the changing transportation and mobility side of the energy issue.  We accomplish this, in part by reducing miles, and also finding new energy sources for transportation.  We need more transit, and a move away from single-occupancy vehicles and long commutes.  It’s about bringing the work space closer to the living space, and creating livable communities.  So I think I’m naturally suited  for such a task.  I’d like to get on the Transportation Committee if I get to Congress.

DD: Thanks for your time today.

MD: No problem, thank you.

Fighting inequality, starting at the top

(Welcome back Representative! – promoted by Bob Brigham)

We have a problem with our economy. The raw numbers say the economic pie is growing, but the larger pieces are all going to a small minority of Americans — meaning that for most Americans, wages are barely keeping pace with inflation.

We see this rising income inequality clearly in recent IRS data, which show that the share of income going to the wealthiest Americans is the highest it has been since before the Great Depression. To pick but one example of this disturbing trend, last year the average CEO made more in one day than the average worker made over the entire year.

Clearly, it's time to reconnect the economic fortunes of front-line workers to those of their CEO's — who are commonly making making tens of millions of dollars annually — by cutting off tax subsidies for these enormous compensation packages if they are more than 25 times the salary of the lowest paid worker in the company.

When the economy is growing and the only people who are benefiting are the wealthiest among us, we have a problem with our priorities.

When the share of income going to the wealthiest Americans is growing, and the number of people living in poverty is rising as well, we have a problem with our priorities.

When issues like income inequality and poverty are not part of our national political debate, we have a problem with our priorities.

It is time to finally put to rest the ridiculous idea that if we just take care of the wealthy then the rest of the economy will take care of itself. The evidence is overwhelming: it is just not true.

That's why I have introduced new legislation designed to fight income inequality in America starting at the top: by reconnecting the economic fortunes of those in the executive suite with those of their frontline employees.

My bill, the Income Equity Act of 2007, is a simple, common sense piece of legislation that would limit the amount of executive compensation corporations can deduct as a legitimate business expense to 25 times the pay of a company's lowest paid worker.

It's not the government's job to tell corporations what they can pay their executives, but American taxpayers have the right to choose whether or not to subsidize these out of control executive salaries. If a corporation chooses to provide compensation packages that are disconnected from the wages of average workers, then I believe we should have a say over how much of that compensation is tax deductible.

If you'd like to help us build support for this legislation in Congress, you can click here to email your Representative today.

While this particular driver of income inequality can be slowed through specific legislation, it speaks to a larger trend that will require comprehensive changes to fully address. In short, the basic assumptions of the Bush “ownership society” have been shown to be bankrupt: the culture of individualism; the conviction that people who aren't getting ahead “just aren't trying”; the belief that government's only responsibility is to protect business and the wealthy, and the rest will magically take care of itself — these ideas are not just unsustainable, but fundamentally at odds with the sense of collective responsibility that is a core part of who we are as a nation.

On a very basic level, we understand that our fates — rich and poor alike — are ultimately connected.  I believe that we should aspire as a nation to be judged not by how well we do by the wealthy, but rather, in the words of gospel, by how we treat “the least of these.”

I hope that this legislation is something that will start a conversation about the best way to address widening inequality here at home, and best wishes to everyone for a wonderful Thanksgiving!

Talkin’ Bout My Generation: Widening Inequality in Post-1979 California

The California Budget Project’s report, A Generation of Inequality: The State of Working California, 1979-2006, has already started to grab public attention, such as a front-page article in the SF Chronicle.

It’s about time. Although neoliberalism has been hurting working Californians since 1979, it’s been in the last few years that the situation has become dramatically worse. Low wages, poor job growth prospects, and soaring costs of living are killing the California Dream for millions of residents of this state.

Below I offer an overview of the report, and some suggestions on what we can – and should – do about the growing crisis.

The CBP has identified several major factors that illustrate the widening inequality in California:

  • 70% of job creation in California since 1979 has been in high-wage or low-wage jobs. The middle-income folks have faced stagnation or declining incomes.
  • Wage gains are not only unevenly shared, but inflation and the soaring cost of living has hit low- and middle-income workers harder than their counterparts in other states.
  • Workers are getting fewer benefits – health care has been slashed, as have pensions.
  • Young Californians – those born since 1979 – have fared poorly in the state’s job market, and since 2000 those with college degrees have had *fewer* job prospects than those with only a high school diploma, though the latter group is still facing poor prospects of their own.

California is becoming a place where only the rich can afford to enjoy basic economic security – whereas everyone else must face high housing costs, rising energy, food, and health care costs with shrinking wages and poor job prospects.

It’s apt that this report focuses on 1979 to the present, as that corresponds to my own lifespan. Parts of this report ring all to true to my own cohort. Take my high school class, which graduated from an Orange County school in 1997. Today most of us work either in financial services, high-tech, or education, with many of the grads who did not attend college working in the service sector.

This is not a recipe for economic security. Those who work in financial services are facing the specter of widespread job losses as a 25-year long asset bubble starts to unwind. Those who work in high-tech already faced a bust in 2000, and know all too well how easily their jobs can be outsourced. Those of us who work in education are dependent on government funding, which Republicans are seeking to cut at every opportunity. Those who work in the service sector find their employment to be unsteady and their wages wholly inadequate to the cost of living in California. And most of us who attended college are saddled with student loan debts, cutting into our incomes even more deeply. And that’s just from a suburban high school – Californians from poorer backgrounds obviously have fared much worse than we.

Meanwhile the situation continues to worsen. The bursting of the housing bubble has already caused the state’s unemployment rate to rise every month in 2007. Gas prices have retreated somewhat from their spring highs, but remain around $3/gal in the state, still an unsustainably high level. At the same time Republicans successfully gutted state mass transit funds, effectively shackling Californians to their cars and to the oil companies. Arnold’s preferred health care plan would merely saddle these struggling families with hundreds of dollars a month in premiums, while still not actually delivering them affordable, comprehensive health care.

This report illustrates a state in crisis, lurching toward catastrophe. 28 years of neoliberalism has put us on the edge of a precipice. How do we deal with it, then?

Do we follow the advice of conservatives like Joel Kotkin, who in the SF Chronicle article about the CBP study called for more of the same – less regulation and taxation of business, implying though not saying that this will also require further cuts to vital public services? That would be like turning to the folks who broke Iraq and asking them to fix it.

Instead we need to revive the old progressive, New Deal era emphasis on economic security. Some believe that progressive politics remains amorphous and without a core agenda. Economic security, I believe, MUST be that agenda.

We must build a diverse coalition of all ethnic and racial backgrounds, of middle- and low-income households, to challenge the neoliberal economy. Instead we must demand and put into action policies that will help even out the balance in California, and save the state from impending ruin.

We need, at minimum, the following:

  • Universal health care. Providing cost certainty to families, as well as health, is vital to providing for our future security.
  • A redefinition of the California Dream – a new urban strategy for California life, providing for affordable housing, sustainable transportation, and better use of our resources. We must stop subsidizing suburban sprawl, one of the culprits behind this inequality, and instead redirect our energies to building up our cities.
  • A new, long-term source of good jobs for California’s low- and middle-income families. The Green Jobs initiative pioneered by Rep. Hilda Solis could well be the prototype for this, providing for a clean environment, sustainable practices, and jobs for ALL Californians, across class and racial lines. California can become a leader in 21st century manufacturing, building on local resources to provide a sustainable and clean range of products for America as we face the dual shocks of climate change and peak oil.
  • Root-and-branch reform of agriculture. Californians have already become major leaders of the Farm Bill reform movement and we need to ramp this up significantly. Agriculture is the backbone of California’s economy and, of course, of civilization itself. We need to shift CA ag toward sustainable, organic, healthy practices, linking city and country in a new network of local food production and consumption that provides income and jobs for rural counties and affordable, quality food for the cities.
  • Educational reform and affordability. The cost of higher education – including technical and vocational training – has soared, and these costs represent a massive drain on earning power for working families. We need to put into place a plan to forgive ALL student loans, and redeem the promise we made in 1960 to give Californians free higher education. This will spur entrepreneurial activity, as well as ensure that the young can help pay for the needs of aged.

All of those solutions will help Californians of all backgrounds and class status. We cannot follow in the footsteps of those who will tell us that in the hard times that we now face, we must choose who to include and who to exclude – a choice that always seems to come down to race.

This is the challenge we face as California progressives. And these can be the solutions that we offer. This can be our opportunity to build a prosperous and secure 21st century state.

The LA Times and the Working Class

I have a conflicted relationship with the LA Times.  On the one hand, they still do a stellar job covering international news; I would put the paper’s Iraq reporting up with any other news organization in the world.  But on the editorial side, the paper has taken up the neoliberal consensus with a vengeance, and turns a blind eye to vital issues to this community, like inequality and poverty.  Nancy Cleeland, an excellent writer, has decided to leave the paper for just this reason:

It’s awkward to criticize an old friend, which I still consider the Times to be, but I think the question of how mainstream journalists deal with the working class is important and deserves debate. There may be no better setting in which to examine the issue: The Los Angeles region is defined by gaping income disparities and an enormous pool of low-wage immigrant workers, many of whom are pulled north by lousy, unstable jobs. It’s also home to one of the most active and creative labor federations in the country. But you wouldn’t know any of that from reading a typical issue of the L.A. Times, in print or online. Increasingly anti-union in its editorial policy, and celebrity — and crime-focused in its news coverage, it ignores the economic discontent that is clearly reflected in ethnic publications such as La Opinion.

Of course, I realize that revenues are plummeting and newsroom staffs are being cut across the country. But even in these tough financial times, it’s possible to shift priorities to make Southern California’s largest newspaper more relevant to the bulk of people who live here. Here’s one idea: Instead of hiring a “celebrity justice reporter,” now being sought for the Times website, why not develop a beat on economic justice? It might interest some of the millions of workers who draw hourly wages and are being squeezed by soaring rents, health care costs and debt loads.

Go read the whole thing, this is an important article.  You would think that it would be easier and more cost-effective for the Times to cover what’s happening in its own backyard.  Of course, the Times was first part of a corporate-owned media collective, the Tribune Corporation, and now Sam Zell, a multi-millionaire.  The top editors and senior staff aren’t affected by the real issues impacting working people, and it shows in where they place their emphasis.

I remembered the workers who killed chickens, made bagged salads, packed frozen seafood, installed closet organizers, picked through recycled garbage, and manufactured foam cups and containers. They were injured from working too fast, fired for speaking up, powerless, invisible. I saw that their impact on all of us who live in the region is huge.

Now, like hundreds of other mid-career journalists who are walking away from media institutions across the country, I’m looking for other ways to tell the stories I care about. At the same time, the world of online news is maturing, looking for depth and context. I think the timing couldn’t be better.

I would suggest that Cleeland would always be welcome on the blogosphere, particularly on this site, where I’m proud to say that issues of class and inequality are often foregrounded.

UPDATE: I would add that proof of the LA Times’ relationship to the poor can be easily gleaned in this BS hit piece on John Edwards by Jonah Goldberg, someone who doesn’t live in California but is hired to write lazy smear jobs based on two-week old stories without merit.

Prison Policy No Longer Invisible

This was surprising to me: grassroots action last week protesting the Governor’s prison policy.

Busloads of protesters fighting the construction of new penitentiaries swarmed the Capitol on Wednesday, while inside the statehouse, the simmering politics surrounding the prison overcrowding crisis boiled into full view.

The protesters attacked Gov. Arnold Schwarzenegger’s plan to build 78,000 new prison and jail beds, saying that $11 billion worth of “bricks and mortar and debt” are no substitute for true reform.

Instead, the demonstrators – some dressed in orange prison jumpsuits and standing in makeshift cells – said lawmakers could quickly thin the inmate population by releasing geriatric and incapacitated convicts and by sanctioning thousands of parole violators in their communities rather than in state lockups.

I would add revising sentencing guidelines through a newly-created independent commission, but just the presence of these protesters at all suggests that this issue will not be as invisible as it has been in previous years.  Which makes sense, as we’re two months from a court-imposed deadline to do something about overcrowding.

over…

And good for Gloria Romero for stepping out on something that will win her no friends in the voting public, but is simply the right thing to do.

Meanwhile, political fireworks were flying over a decision by Senate Democrats to place a moratorium on bills that would lengthen criminal sentences and thereby exacerbate prison crowding.

The maneuver infuriated Republicans, but Sen. Gloria Romero (D-Los Angeles), chairwoman of the Senate Public Safety Committee, said it could not be “a business-as-usual year” in Sacramento given the overcrowding emergency.

“The Legislature bears a share of the responsibility for the crisis, and we must accept that,” Romero said. “We can’t keep having bills fly out of committee like pancakes just because we want to appear tough on crime.”

There have been over 1,000 such bills in the last 30 years.  They look good on glossy mailers and they can easily be used as a club to damage opponents.  But they have a major indirect impact on our quality of life.

And this mass incarceration is a symptom as well, a function of increasing inequality in the Bush years.  As the chasm between haves and have-nots grows, desperation leads to increased crime.  And then the imprisonment itself keeps the snowball rolling down the hill:

Imprisonment does more than reflect the divides of race and class. It deepens those divides-walling off the disadvantaged, especially unskilled black men, from the promise of American life. While violent criminals belong in jail, more than half of state and federal inmates are in for nonviolent crimes, especially selling drugs. Their long sentences deprive women of potential husbands, children of fathers, and convicts of a later chance at a decent job. Similar arguments have been made before, but Western, a Princeton sociologist, makes a quantitative case. Along the way, his revisionist account of the late 1990s detracts from its reputation as an era of good news for the poor…

The 1990s were said to be a time when rising tides finally did lift all boats. Western warns that part of the reason, statistically speaking, is that many poor men have been thrown overboard-the government omits prisoners when calculating unemployment and poverty rates. Add them in, as Western does, and joblessness swells. For young black men it grows by more than a third. For young black dropouts, the jobless rate leaps from 41 percent to 65 percent. “Only by counting the penal population do we see that fully two out of three young black male dropouts were not working at the height of the 1990s economic expansion,” Western warns. Count inmates and you also erase three quarters of the apparent progress in closing the wage gap between blacks and whites.

The increased recidivism rate and the drive to incarcerate more and more for longer and longer walls off opportunity to families on the wrong side of the race and class divide.  Prison policy is job policy, poverty policy, family policy, education policy, and so on.  It took a massive crisis to get anyone to focus on it, but I hope that in the future, we can understand it in these terms.

CA-41 CALITICS NEWSFLASH: Jerry Lewis under investigation

Beep…beep…we now interrupt your regularly scheduled blogreading.  Ok I kid (and I rip of k/o’s humor).  This is nothing new.  Jerry Lewis is once again under investigation.  From the AP:

Federal investigators probing Rep. Jerry Lewis’ ties to lobbyists are looking into a land deal that put nearly 41 pristine acres in the congressman’s neighborhood off-limits to developers, The Associated Press has learned.

The land was given to the city of Redlands by Jack and Laura Dangermond, who have donated generously to Lewis, R-Redlands. The Dangermonds founded and run a company ESRI in Redlands that has gotten tens of millions of dollars’ worth of contracts through the powerful House Appropriations Committee, which Lewis chairs.

One government contract came months after the land donation.

The land, some of which sits directly across from Lewis’ home, is part of a scenic canyon in one of Redlands’ wealthiest neighborhoods. Keeping the land free of development helps ensure that property values remain high.(San Bernadino Sun 9/6/06)

So what’s new? Well, I guess it’s just one more example of the GOP corruption here in California and in DC.  Lewis just loves his little quid pro quo arrangements, passing out government contracts like candy to his supporters.  It’s really rather revolting.  It’s also another example of why we need the bipartisan legislation championed by Sens. Obama and Coburn to create a searchable online database of government contracts.  Sen Stevens, Remove this hold!