Category Archives: Dan Kervick

Putting the Pains in their Place

By Dan Kervick

As part of his Tuesday night statement on the fiscal cliff deal he had just concluded with Congress, President Obama boldly affirmed that he would not negotiate over the debt ceiling, implicitly raising the dire specter of government default to defend his position:

Now, one last point I want to make — while I will negotiate over many things, I will not have another debate with this Congress over whether or not they should pay the bills that they’ve already racked up through the laws that they passed. Let me repeat: We can’t not pay bills that we’ve already incurred. If Congress refuses to give the United States government the ability to pay these bills on time, the consequences for the entire global economy would be catastrophic — far worse than the impact of a fiscal cliff. 

Now this is the kind of thing that tends to make star-struck Democrats weak in the knees.  Partisan Democrats are always extraordinarily impressed by ejaculations of tough talk from President Obama.  But they often have difficulty distinguishing the stagy theatrics of tough talk from the drab backstage reality of tough action.  And unfortunately, every time Obama succeeds in turning some policy debate into a theatrical tilt with Republican leaders, progressives lose.  They lose because Obama’s Democratic supporters will usually follow him almost anywhere – so long as he gives them an emotionally gratifying “win” in the end.  Of course, they will allow Obama himself to define the rules and objectives of the games he is playing, and thus to implicitly define what constitutes winning.

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It’s Time for Progressives to Act

By Dan Kervick

By the time I post this, the Republicans in the House of Representatives may already have torpedoed last night’s fiscal cliff budget deal.  But the miserable lessons of both the budget deal and the White House political strategy that engendered it stand in any case: the Obama administration is both economically incompetent and hostile to progressive values.  Progressives need to stop acting like submissive partisan hacks, and stop offering mealy-mouthed gestures of moral support to a conservative, deceitful and morally bankrupt administration that is complicit in the attack on progressive values and broad prosperity.

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Dystopia Friday

By Dan Kervick

Chris Bertram, reflecting on cyborg technologies in a possible robot-human future, points to a potentially dystopian outcome for this technology: employers could make the willingness to undergo human technological enhancement a condition of employment contracts.  Bertram sarcastically quips, “Oh well, I expect someone will be along to explain how such contracts would be win-win.”  Matt Yglesias responds, “It seems pretty obvious how they would be win-win: They’d be agreed to voluntarily by two mentally competent adults.”

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Republicans and Democrats Should Agree to Do No Harm

By Dan Kervick

I suppose it is has become too much to expect that the White House and US Congress might actually succeed in doing something useful for the economy at some point in the near future.  But perhaps they could at least settle on the wisdom of Hippocrates and agree to do no harm.   Why not agree on a statement like the following:

Given the recent decline in the federal deficit – a natural result of US economic recovery – both parties agree the best economic policy for our country right now is to adopt a “wait and see” strategy.  Rather then putting pressure on fragile private sector balance sheets by peremptorily reducing spending or raising taxes, we have concluded that it is best to allow the recovery to continue to take hold by standing pat with our current level of fiscal accommodation.  Mindful of the hopeful economic signs and the self-stabilizing reduction in the deficit,  we have agreed to repeal the Budget Control Act of 2011 and extend the payroll tax holiday at this time, and to stand ready to reevaluate the situation as economic developments merit.

Then come back in January and pass further middle class tax relief.  Obama gives up on his grand bargain dreams; Republicans give up the goal of attacking entitlement programs.  Both sides eat a little crow after putting the country through two years of wholly unnecessary debt hysteria.

Full Employment as the New Progressive Paradigm

By Dan Kervick

Part Two of a four-part essay

In Part One of this essay, I evoked the dismal state of the progressive movement in the developed world, and proposed that as part of the effort to turn this situation around progressives should embrace the political ideal of a full employment economy, with an activist government permanently standing ready to provide a productive job for every person who is both willing and able to work, but who is unable to find work in the private sector.

I would hope people of every political stripe would see value in a full employment economy.  But my argument here is aimed at progressives specifically.  I want to explain why, given the kinds of defining values they have traditionally embraced – democracy, equality, solidarity and progress – progressives should be drawn to the full employment ideal.  I will first explain why, in my view, progressives should view the pursuit of a full employment economy as a political, economic and moral imperative, and embrace the full employment cause as a foundation for progressive political revival.  I will then set out a few basic proposals about how a full employment economy might be structured.

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Full Employment as the New Progressive Paradigm

By Dan Kervick

Part One of a four-part essay

Progressives might have been permitted a short respite from anxiety after the election of November 7th, 2012.  They could find a measure of solace from the result: at least the country hadn’t fallen into the hands of an expert practitioner of one of the more barbarous styles of American capitalism, a man who had expressed open contempt for the 47% of Americans who receive assistance from the government he was seeking to head.   Of course, Mitt Romney’s disdain for government assistance extends only so far, since he has no objection to the sturdy fortress of legislative, judicial and police protections erected to both institute and protect private property.   He knows as well as anybody that without these government-funded protections many members of the propertied classes would not remain propertied.  But let us not dwell on the past.   We can move on knowing that at least there will be no Mitt Romney era.   Romney can now go back to his former occupation of buying, selling, dismantling, dismembering, repackaging and reselling the enterprises built by other people, throwing many of the people who work in those enterprises out on the street, and stashing the proceeds in island banks, far away from the greedy hands of the democratic rabble whose votes he recently begged.

Alas, the desired respite has been all but non-existent, because Washington has moved on immediately to renew the flagellation of the American people.   Continue reading

Paying for Lunch – MMT Style

By Dan Kervick

A common criticism of Modern Monetary Theory is that it is a naïve doctrine of free lunches.  The critics grant that a country like the United States, which issues its own freely floating fiat currency, can always make the policy choice to issue whatever quantity of that currency it deems appropriate.  The US government can spend as many dollars into the private sector economy as it chooses, without obtaining those dollars from some other source first, and it can always pay any debts that have been incurred by borrowing dollars.  But the critics will go on to charge that MMT mistakenly concludes from these few institutional and operational facts that there are no economic limits to the wealth-generating capacities of the government.  They caricature MMT as a doctrine of manna from heaven, in which the power of issuing a generally accepted medium of exchange confers the power of conjuring real wealth into existence by prestidigitation.   In short, they see MMT as a disordered syndrome characterizing people who are experiencing massive money illusion.

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The Social Dimension of Prosperity

By Dan Kervick

In a recent interview in The Straddler, James K. Galbraith discusses some of the points he developed in his recent book, Inequality and Instability.  One of the most important of those points is that inequality leads to a stop-and-go crisis economy of credit-fueled asset bubbles.  This economy delivers large rewards to a few fortunate predators, but delivers a lot of instability, stagnation and insecurity to the rest of us.

But, Galbraith also makes some striking and important points in the interview about what he sees as mistaken places of emphasis in contemporary progressive political rhetoric.  One problem is the tendency to lose sight of the most vital systemic constituents of postwar American middle class prosperity – and also the expectations and aspirations that constituted the middle class outlook.  Continue reading

Will We Be The Lamest Generation?

By Dan Kervick

Matt Yglesias is now hawking an initial White House budget proposal that is apparently being negotiated by Tim Geithner.   Predictably, the two-stage proposal involves entitlement “savings” and cuts in both stage one and stage two, and backs off a bit on higher tax rates on the rich.  In exchange, the White House gets some more stimulus spending.  Yglesias advises Republicans to tell Obama:

… he can have his stimulus and he can even have higher tax revenue if he really wants it, but that the price is giving up his obsession with higher rates. Is he more interested in soaking the rich or in creating jobs? I don’t think Obama says no to a deal like that, and if he does lots of sensible liberals (like this guy) will call him out on it. Then we can put this sorry episode behind us, proclaim the Grand Bargaining Era done for, and hopefully move on to other things.

It seems strange to endorse a grand bargain in order to move on and proclaim the Grand Bargaining Era over.  Maybe next week Democrats should propose the elimination of the minimum wage so we can then declare an end to the Era of the Fight Over the Minimum Wage?

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Neoliberal Mythologies

By Dan Kervick

It’s hard enough for ordinary citizens to keep up with the routine crony rackets the American plutocracy runs with their lackeys in Washington to rob us blind and lock us in the neo-feudal cages they are trying to build out of the bones of what was once the US middle class.  But the task of keeping up with the scams becomes even harder when central bankers promulgate myths and hide behind shibboleths designed to prevent the public from grasping just how much power we all still possess to seize control of our own destinies.

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