Posted by: Doug Henwood | November 13, 2010

Radio commentary, November 13, 2010

Pacifica • deficit commission • QE2 • education “reform”

Before that, and before some comments on the news, a few words on the Pacifica situation. I did this show on WBAI in New York for 15 years. I was given the show by our late program director, Samori Marksman, who was a very intelligent and charismatic man with contacts all over the world. After his early death at the age of 52 in 1999—a death I’m certain was hastened by the pressures of Pacifica infighting—he was succeeded by an endless procession of oddballs and mediocrities. The latest in that devolving series decided that my show’s frequency should be cut in half. I was already exhausted by the endless crisis and rot at WBAI, and this was the last straw. So I quit. I’m going to continue to do the show for KPFA and what I’ve recently learned is a large, loyal, and truly global Internet audience. (I’ve been really touched over the last couple of weeks by the outpouring of support from that audience—thank you!) WBAI can run the show if and when it likes. But while the current gang remains in charge, I won’t be setting foot in their studios again.

I hope I can keep doing this show for KPFA. But I’ve also been distressed by the goings-on around here, instigated by a Pacifica leadership that seems to be way out of its depth. (Follow the story here: KPFA Worker.) This network consists of five powerful stations in very large metropolitan areas, but it looks now to be run by provincials, with the assistance of people who think that pirate radio should be our model. Being radical and listener-sponsored shouldn’t mean amateurish; marginality is no proof of authenticity. Eviscerating the show with the biggest audience and the strongest fundraising appeal isn’t the way to reverse a financial crisis and build the audience over the long term. I hope I’ll be sticking around here, but you never know, given the whimsy of management and some of the people on the local board.

Ok, enough housekeeping—though it makes a convenient pivot to observe that almost every institution in American society looks to be caught in some sort of suicide attempt.

deficit commission horror

Let’s start with the recommendations of the co-chairs of that dreadful deficit commission. Clearly Obama’s intention in appointing this thing was to create political pressure for some sort of bipartian package that would get rammed through Congress with little debate. The screaming coming from the far ends of the spectrum would bring a smile to every orthodox centrist, who loves to spread the pain (not that the smiling centrists would feel much of it themselves).

Here’s how a far leftist screams about this thing. First, it aims to cap federal spending at 21% of GDP, forever. That’s a very low number. It would preclude any sort of serious social democratic initiatives, like single-payer healthcare or good public childcare or free higher education, and it would make very difficult any sort of infrastructure or green technology invesetment program. But of course that’s part of the idea.

Its recommendations on Social Security are mostly terrible. The only good thing would be to increase the level of income over which one need not pay Social Security taxes. They’d keep some limit, just raise it. But eliminating it entirely would eliminate the system’s alleged long-term problems forever, according to the Congressional Budget Office. They’d raise the retirement age to 69. They’d change the formula for cost of living adjustments (COLAs) to a less generous version of the Consumer Price Index, even though an experimental price index for elderly households has incresed more rapidly than the official one over the last couple of decades—and they want to use an even meaner one than the official index. There’s also a sinister, but superficially just, proposal to increase benefits at the bottom and trim them at the top. That may sound good but this fits in with a long-term elite scheme to turn Social Security into a welfare program—the nonpoor would be expected to fend for themselves in retirement, which is something that rich pundits find easily imaginable, but not the rest of us. Chipping away at the top will reduce support for Social Security, and will lubricate the route towards making it a welfare program. And, as the old saying goes, programs for the poor are poor programs.

Medicare cost containment would consist of more co-pays and higher deductibles—more shifting towards consumers, the very ones whose COLAs would be cut because their expenses are allegely going up so slowly.

They also propose to cut military spending by about $100 billion a year. It’s nice to see the Pentagon on the chopping block—it’s often exempted from these exercises. But since 2000, the military share of GDP has increased by about 2 percentage points. Taking us back to 2000 levels, when the military was hardly running bake sales to fund itself, would save $300 billion a year.

On the tax side, they’d eliminate a lot of deductions and lower rates. Supposedly this would have limited distributional impact, but I doubt it. I’d love to see the mortgage interest tax deduction go—it makes no sense for the government to subsidize homeownership, and the lion’s share of the benefits go to upper-income filers—but it’s impossible to imagine such a thing getting through Congress, so it’s hard to figure why they even mentioned it.

In his New York Times column on Friday, the revolting David Brooks suggested that we need a program of national greatness, to restore American pre-eminence—a program he had the chutzpah to compare to the civil rights movement. He actually wrote this sentence: “Are you really unwilling to sacrifice your Social Security cost-of-living adjustment at a time when soldiers and Marines are sacrificing their lives for their country in Afghanistan?” Squeezing the old is heroic, like imperial war. My god. Instead of a program of national greatness, could we have one of national decency?

We do have a long-term budget problem. You can’t run giant deficits forever. But the way to solve the problem is to slash military spending and tax the rich. In Robert Penn Warren’s novel All The King’s Men, the political figure at the center of the story, Willie Stark (modeled on Huey Long), began his career delivering long, dull policy addresses. His advisor, the novel’s narrator Jack Burden, advises Stark to drop the wonkery and just say he’s gonna soak the fat boys. I love that. Let’s soak the fat boys. They’re mostly not fat anymore, and they’re not all boys, but you get the idea.

QE2

And now onto quantitative easing, known to connoisseurs of finance as QE2. Basically this refers to the Federal Reserve buying $600 billion in Treasury bonds over the coming months. (Details: FAQs.) It’s supposed to kickstart an economy that just won’t recover. This buying binge will transform the Fed into the largest holder of Treasury paper in the world, comfortably surpassing Japan and China (which, by the way, has been reducing its stock of T-bonds). What this will do is mysterious. Banks are still not eager to lend to businesses or consumers, and many businesses and consumers aren’t all that eager to borrow. So the wad of cash that the Fed’s buying will inject into the system could just sit there, or get distracted playing complex and dangerous financial games.

QE2 is a very poor substitute for fiscal policy. We need a long-term government investment program, and a state-driven redistirbution of income from top to bottom. We’re not going to get that. Instead, we get this murky program of dubious effect.

But even that bizarre attempt at economic stimulus is too much for the austerity hounds at home and abroad. Germans and other Europeans are moaning about excessive stimulus—the very people who are putting the periphery of their own continent through an austerity wringer. That austerity isn’t having the desired effect; Greece and Ireland are in deep recession, and interest rates are rising there because their recessions are hammering tax revenues. Weak revenues make it hard to service debts, and servicing debts are what austerity programs are supposed to be about. Britain, whose austerity program is still young and still not bearing serious recessionary fruit, has also seen its bond yields rise, as investors expect the worst. At least British students rioted the other day. Could we please have some of that? Why are Americans so damned passive?

Our president is also getting snubbed by his comrades in the G20. The forces of European austerity are moaning about stimulus, and Asians are lecturing him about the need for budget balancing. As he’s done at home, Obama hasn’t even tried to make a serious case for stimulus, or denounce the orthodox at the core of Europe for creating unemployment and misery at the periphery. Instead, he’s mouthing off about China’s undervalued currency, always the easy thing for a Democrat to do.

Listening to the Asians go on about profligacy is pretty funny. Their prosperity is the flip side of our profligacy. If China and the rest weren’t stuffing container ships with goods for export to Long Beach, and thence onto Walmart shelves, would they be enjoying 10% growth rates? It’s funny how the successful always attribute their fortune to their own virtue and mount the lecture platform, isn’t it? The U.S. did it for years, so I guess there’s rough justice in this.

school “reform”

[And my intro to guest Leonie Haimson of Class Size Matters.]

Earlier in the week, it was announced that New York City schools chancellor Joel Klein would be leaving to go work for Rupert Murdoch. Mayor Michael Bloomberg nominated Cathie Black, head of Hearst’s magazine group, and the former publisher of USA Today, to succeed him. Amazing. Klein didn’t have any education experience when he took office, and she doesn’t either. But that doesn’t matter. They, and Bloomberg (and, by the way, Obama and his education secretary Arne Duncan) are all partisans of a marketized, competitive educational model, and they seem to think that teachers are mostly just problems, and not professionals doing hard jobs that require actual skills.

It’s important to say that their testing and privatization strategies don’t work. Haimson will talk about the testing part. But there’s also no evidence that charter schools do any better than the public schools do now. They do offer some promise for cost-cutting and union-busting though. And that is probably key to their appeal.

My own thought about all this is that the American elite have decided that there’s no future for a lot of children, especially those from the bottom half of the income distribution, so the business of the schools (and it is a business) is cutting costs while spewing a lot of high-minded rhetoric about excellence and accountability. Many experts find my analysis too cynical, but I don’t.

About these ads

Responses

  1. Isn’t the increase to age 69 the same as a product that is for sale at $6.99… so people can’t say 70. Grotesque marketing.

    Re: China – most of its growth now comes from investment – raw Keynesianism , funded through the ‘tax’ of currency undervaluing – and seems to be pretty successful on its own terms. What is going on in China is not dissimilar to the massive public investment in the US during WW2, when household consumption increased rapidly even as its share within GDP decreased. A lot of right-wing Western economists have been waiting for a collapse in the Chinese banking system due to this ‘malinvestment’ for near a decade – meanwhile it was the Western system that collapsed. It could happen , but it is by no means a certainty.

  2. YPSI, but just in case, for future linking purposes: up until now the best single top to bottom summary of what was wrong with the charter/testing/firing bullshit was your own 1/hr interview with Diane Ravitch (which was more concise, more involving, and better organized than her book). But now she’s written it up as a very nice succinct article for NYRB: http://j.mp/ce47lq

  3. Doug,

    Regarding the mortgage tax deduction (as well as the Commission’s recommendations about “defense” spending): they are both there as diversions, providing a veneer of shared sacrifice, when in fact there is no chance whatsoever that they will be enacted. They are just part of the PR rollout for the attack campaign that is now beginning in earnest. The cuts to programs that actually help people, however, will be all too real.

    Obama, as the Diversion Candidate, is fulfilling the role for which he’s been groomed by his foundation and hedge fund backers, and which will be his likely legacy. It’s win-win for the ruling class: a Democrat and a black man as the vehicle for austerity. That he will then turned upon by his supposed backers, who will have taken advantage of his almost pathological need to ingratiate and win approval, will be a cheap consolation for us.

    As for your take on corporate ed deform (kudos for featuring Leonie Haimson: in a sane world she’s be receiving the Key to the City for her heroic efforts to stop the hostile takeover of the schools), you’re not being cynical enough: the so-called “experts” (Bill Gates? Eli Broad?), virtually none of whom have classroom experience in urban public schools or send their children to them, range from the willfully naive to the bought-and-sold to the can’t- keep- their- hands- off- the- silverware.

    The narrative of education reform, in which public education has failed because of teachers and their unions, was long ago hijacked by the corporate/philanthropic/academic complex, and is of a piece with the efforts to undermine progressive taxation, unions, Social Security and all other quaint 20th century efforts at social solidarity.

    I hope you continue to highlight the efforts of our small band of resisters who are trying to keep the public in public education.

  4. Doug:

    As a former teacher of seniors in one of the toughest (not THE toughest, but close) public schools on the South Side of Chicago, I must sadly tell you that you are not being cynical about education reform, specifically that “the American elite have decided that there’s no future for a lot of children, especially those from the bottom half of the income distribution.”

    From the point of view of a teacher the system breaks down very early: with the Principals (never mind Bill Gates and Co.), all of whom have been completely co-opted and put their careers ahead of even pretending to care about students.

    Without Principals who have some principles (ha ha) there is no hope.

    Best,

    Greg

  5. Some NYC councilmembers are fighting back against Black and Bloomberg, according to the terrific CM Brad Lander:

    http://www.huffingtonpost.com/brad-lander/nyc-schools-democratic-pu_b_782360.html

  6. […] would have no serious impact; taxing their income, on the other hand, would. As Doug Henwood put it, raising the cap on taxable income "would eliminate the system's alleged long-term problems […]

  7. […] would have no serious impact; taxing their income, on the other hand, would. As Doug Henwood put it, raising the cap on taxable income “would eliminate the system’s alleged long-term […]

  8. Leonie wasn’t entirely correct about the UK. Without wishing to defend for an instant Labour’s record on education, the types of test were better than those used in NY. The results were collated and normalised by statisticians (eventually), and they did (eventually) move to value added tests which reduce (partially) the effects of poverty/family background, etc, however because these tests were also used to judge schools they have never been that reliable as schools have had incentives to game the results. It took a while though. As I remember it the Tories were doing this stuff first, and Labour merely inherited and (as was typical) expanded it.

    Testing was never very popular in the UK, and rapidly became extremely unpopular with parents (but then that’s the New Labour story). The stress placed upon young children was unforgivable in my opinion. Incidentally, while they may get rid of testing, our current masters are obsessed with importing another dumb idea from the US, charter schools. Quite why there’s this obsession in the UK political classes with the US educational system given that its one of the few systems that’s worse than our own is beyond me, but there you are.

    NY’s educational system is depressing. Its like reading that a health system has decided to return to the practices of 1930s. This is what happens I guess when you put someone who knows nothing on a subject in charge of the system.

  9. Tara Bernard, in the New York Times’ Bucks blog, mentions the experimental CPI for the elderly, but says the CPI-E figures still wouldn’t have resulted in cost of living adjustments for the past two years.

    http://bucks.blogs.nytimes.com/2010/11/17/debating-social-securitys-cost-of-living-adjustment/

  10. […] possible that the coming drive to slash Social Security, Medicare, and Medicaid will provide the impetus for massive, disruptive protest. But as of yet, here in the U.S. neither […]

  11. […] post, the retirement age is already rising, which amounts to a benefit cut for the poor, and raising the cap on taxable income–which would be a tax hike on the wealthy–would take care of all the supposed long-term […]


Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

Categories

Follow

Get every new post delivered to your Inbox.

Join 13,220 other followers

%d bloggers like this: