A Telling Comparison

local scenePeople in small towns, nearly everywhere in this country, have access to national programming & news on television and online. As easily as one could subscribe online to something like the Janesville Gazette, one could subscribe to the Chicago Tribune or Washington Post.

Imagine, then, a choice between editorials in the Gazette and the Post on the state of labor in America. Just a few days ago, both papers published on this national topic: the Gazette in a Sunday editorial, the Post in a guest article from Lawrence Summers, former Secretary of the Treasury, and a longtime academic (for president, current professor, of Harvard).

The Gazette offers Economy, not unions, boosts labor, a 500-word editorial that contends that union membership has declined in the Janesville area, yet that the paper’s editorial board “cannot claim that the economy is worse off for membership declines. Indeed, poverty rates statewide have fallen to the lowest level in years, while unemployment rates are also near record lows. The labor market now favors skilled workers employers are competing for and struggling to find.”

I hold no brief for unions, although I think that they should be a robust choice available to workers, at any worksite, should they choose. The problems with the Gazette‘s use of these simple measures are obvious. Poverty is a measure of economic sickness, but its decline is no assurance of overall health. (Cancer rates might be low, for example, but a population still beset by anemia, high-blood pressure, alcoholism, for example.) The absence of the severe does not assure the presence of temperate. A low unemployment rate still begs the question of overall productivity and employee gains. Finally, a labor market that favors skilled workers (under the Gazette‘s implication that that’s Janesville) still doesn’t answer how many workers are skilled, how many are non-skilled, and how both groups are faring.

Look, instead, at the analysis that Summers offers in the Post. (Summers isn’t a libertarian, to be sure, but that’s not significant. What’s significant is how Summers presents a strong argument, even if one disagrees.) Here’s Summers on the state of labor, in It’s time to balance the power between workers and employers:

….Surely related to middle-class anxiety is the slow growth of wages even in the ninth year of economic recovery. The Phillips curve — which postulates that tighter labor markets lead to an acceleration of wage growth — appears to have broken down. Unemployment is at historically low levels, but the Bureau of Labor Statistics reported Friday that average hourly earnings last month rose by all of 3 cents — little more than a 0.1 percent bump. For the past year, they rose by only 2.5 percent. In contrast, profits of the S&P 500 are rising at a 16 percent annual rate.

What is going on? Economists don’t have complete answers. In part, there are inevitable year-to-year fluctuations (profits have declined in several recent years). And in part, BLS data reflects wages earned in the United States, even though a bit less than half of profits are earned abroad and have become more valuable as the dollar has declined relative to other currencies. And finally, wages have not risen because a strengthening labor market has drawn more workers into the labor force.

But I suspect the most important factor is that employers have gained bargaining power over wages while workers have lost it. Technology has given some employers — depending on the type of work involved — more scope for replacing American workers with foreign workers (think outsourcing) or with automation (think boarding-pass kiosks at airports) or by drawing on the gig economy (think Uber drivers). So their leverage to hold down wages has increased.

On the other hand, other factors have decreased the leverage of workers. For a variety of reasons, including reduced availability of mortgage credit and the loss of equity in existing homes, it is harder than it used to be to move to opportunity. Diminished savings in the wake of the 2008 financial crisis means many families cannot afford even a brief interruption in work. Closely related is the observation that workers as consumers appear more likely than years ago to have to purchase from monopolies — such as a consolidated airline sector or local health-care providers — rather than from firms engaged in fierce price competition. That means their paychecks do not go as far….

These two analyses aren’t the same in depth: the local editorial misses key points, either through ignorance or sophistry, that Summers easily covers in his succinct, general-readership essay.

Those reading Summers – even if in disagreement, and perhaps especially if so – will gain something from his observations. Those reading the Gazette will find only shallow contentions.

In a small town, one could read either. In a school district, one could teach either. At university, one could research either.

Why settle for less, why teach a new generation to accept less, when one could engage and think at a competitive national level, just as easily as any other person in America? Summers and others are as accessible to us as the Gazette, and offer so much more.

Anything less is short-changing onself and one’s community.

In a Principled Opposition, the Basis for a Grand Coalition

Writing at The Week, Jeff Spross nicely summarizes Why Trump’s Cabinet poses a unique threat to the working class.  Spross both explains Trump perceptively & succinctly, and in the same post implicitly holds out the prospect of a grand coalition (principled liberals, conservatives, and libertarians) to oppose him. (For an explicit call for broad opposition, from a conservative, see Evan McMullin’s Ten Points for Principled Opposition to Authoritarianism.)

Libertarians can easily agree with both Spross & McMullin.

First, Spross’s spot-on description of Trump, someone far from the traditional American political spectrum:

Trump is an authoritarian. And like all authoritarians, he wants the adulation of the masses. So he’s happy to ditch GOP ideological orthodoxy to throw voters the occasional scrap of economic populism. But being an authoritarian, he also wants zero democratic accountability. And unions are one of the most powerful and effective institutions Western society has yet devised for making both the economic and political powers-that-be answerable to working people. Trump wants nothing to do with that. His combination of reactionary populist rhetoric with a Cabinet and agenda that looks set to smash the American labor movement to smithereens is not some mistake or oversight. It’s a perfectly logical outgrowth of Trump’s specific worldview.

It wasn’t long ago, truly, that almost all libertarians saw that freedom of association was in the very fiber of a free society, and that anyone (including public employees) should be able to form associations to bargain against an employer, whether government or business.  There are many of us who yet feel this way, and will never yield our wider view to a narrower one.

Spross does more, however, than describe Trump accurately.  He implicitly recognizes the possibility of a grand coalition of left, right, and libertarian against Trump:

Trump’s goal is neither a coherent set of pro-worker social values and policies, nor a coherent set of free-market social values and policies. Rather, his goal is the obedience of both realms to a central strongman — namely, himself.

We can – and should – form alliances from diverse parts of American politics.  There is not a single political difference between the principled left, right, or libertarian that matters more than the assurance of a free society and the defeat of its authoritarian enemies.

We’ve much good work to do.

Immigration in America Is Not Broken

Immigration has proven to be one of the most divisive issues in the 2016 presidential race. Both Hillary Clinton and Donald Trump have expressed that the system is broken, but a consensus on any solution seems untenable. In this video, Atlantic national correspondent James Fallows and contributing writer Deborah Fallows ventured across the country to bridge the disconnect between national political rhetoric on immigration and the realities in migrant communities. They travelled to three American states—Pennsylvania, California, and Kansas—to understand the economic benefits that immigrants bring to the small towns they most often reside in.

This documentary was produced for American Futures, an ongoing reporting project from James and Deborah Fallows. The couple has spent three years exploring small town America by air, “taking seriously places that don’t usually get registered seriously.”

Via The Atlantic.

Film: From Dishwasher to Award-Winning Restaurateur

I suppose that if I wanted to curry favor with others, I’d talk about the need for immigration restrictions, or at the least I’d avoid taking a contrary view (a restrictive position being so popular these days). That would seem to me a timid way to face the world, unfit for robust Americans. One should be direct in one’s views.

So, I’ll say what I do believe — in the ethical and practical value of free markets in capital, goods, and labor.

A major party that once embraced these views has turned away from them. We who are libertarian will not do the same. We are confident that an economic philosophy of free markets was right yesterday, is right today, and will be right tomorrow.

Hugo Ortega crossed over the Mexican border and arrived in Houston, Texas, without documents and without knowing any English. Over the next few years, he would become a citizen through President Reagan’s amnesty program and go from washing dishes to owning multiple restaurants. Now, he and his wife, Tracy Vaught—whom he met while working as a dishwasher in her restaurant in the 80’s—are the “reigning powerhouse couple of Houston’s competitive restaurant scene.”

In this documentary produced by Katherine Wells for The Atlantic‘s American Dreams series, Ortega reflects on his journey within the industry. “I have a great responsibility to represent the Mexican cuisine in a proper way,” he says. “It’s a magnificent cuisine.”

Education: Substance & Spending

Following comments to yesterday’s post on proposed cuts to the UW System schools (Caution arrives late, doesn’t recognize its surroundings), here are nine quick comments about education.

1.  Act 10 as a budgetary tool.  This centrally-planned idea didn’t work.  Reductions in public-union bargaining powers in exchange for the ‘tools’ to balance school and other public budgets hasn’t brought balance.  If it had, districts across the state wouldn’t have felt the need to go to referendum so often (or so easily). 

2.  Act 10 as a matter of labor policy.  Here’s one libertarian, from an old, movement family, who will always believe that any worker, peacefully and conveniently, should have the right to assemble, associate with others, and bargain collectively against the government.  Collective bargaining rights should be – but sadly aren’t recognized properly – as rights of association.   

There are those who don’t believe that public workers should be able to bargain collectively against government.  They’re not libertarians; they have different names.  They’re called conservatives, Republicans, etc.  

3.  How WEDC spending matters within a given budget.  It’s true that within any given budget, if one municipality doesn’t take white-collar welfare, another may.  Practically, this means that funds appropriated within a given year will probably be scarfed by one glutton or another.  Stopping what’s been authorized and appropriated immediately is hard.

4.  How WEDC spending over time affects budgeting.  Use of these funds for insiders’ programs signals demand for insiders’ programs.  The problem of the WEDC is that bad spending after bad spending compounds a distorted, government-driven incentive to fund undeserving cronies and projects.

The Innovation Center predated the WEDC; Whitewater’s eagerly lapped two rounds of WEDC funding, and wants a third.  Most – but not all of it – has gone to white-collar projects undeserving of the cash.

5.  What officials’ commitment to WEDC spending (for example) says about education.  It says they’ve substituted a true learning in the humanities, social sciences, and natural sciences for a hyper-politicization of the academy. 

Government support for business insiders is a distortion of properly functioning markets, a perversion of a sound teaching in markets and economics.  (That’s why I’ve described corporatism as a gutter ideology – it’s like a junk science.)

It’s repulsive because it doesn’t work as advertised, and advocacy of it rests on dishonesty that’s inimical to a genuine commitment to the truth. 

One might look upon some of this this as finger-pointing, but I’ll always believe that the embrace especially of these software-startup-whatever projects is simply alchemy, not legitimate science, so to speak.  In these eyes, it’s a significant degradation of education and university life. 

I don’t think it’s high and sophisticated; I think it’s low and base.

6.  On state budget cuts generally, for the last two budgets and the next. I would have spent and would spend (or borrow) nothing on road construction (just the least possible repairs), nothing on the WEDC or its proposed successor agency, and would have frozen overall state spending in Gov. Waker’s first term (it’s been rising).  This would have meant state employee layoffs, but it would have preserved (as much as possible) spending on the poor and for education.  

A spending freeze produces a smaller government. 

7.  State university or K-12 education cuts, specifically, would never have been to my thinking. An overall freeze may act as a cut, of course, but even so one much smaller for education than anything we’ve seen or likely will see. 

Billions might have been and yet could be saved apart from education. 

8.  Autonomy for the UW System.  The System would benefit from strong autonomy; the farther it’s away from politics, the better. 

9.  Legislatively-imposed tuition freezes.  I’d let universities decide what to do about tuition; competitive (not regulatory) pressures should influence their choices. 

There is a love of education, a true one, that rejects both how state officials and local university administrators have managed these last few years. That’s the place in which I and others of like views find ourselves.  

Who Should Live in Whitewater?

It’s a simple question, with a simple answer: anyone who’d like to live here.

Who those many will be, ten or twenty years on, I am not sure. One may be confident that the city will be more diverse, but in which ways there’s no certainty.

(It’s better that there is no certainty, for if there were, we’d not merely know the future, but likely know it because we were trying to control the time from now until then.)

Did some want to bring Arizona’s laws to Wisconsin, and — of all places — Whitewater? One well knows that there were some in this town who wanted exactly that, who dreamed of making something like the Star Packaging Raid the standard practice of this beautiful city. Their dreams were, in truth, the dark nightmares of intolerance and unfairness. They stood against free choice, voluntary exchange, and free markets.

The unreconstructed, nativist impulse to restrict immigration into Whitewater – an impulse that was the fuel of lies, rogue policing, prejudice, and cruelty – is finished in this city, as it is now finished in most of America. (See, along these lines, Rubio Shows Opposition to Immigration Reform is an Inch Deep.)

Those who sought to torment and roust Whitewater’s immigrants, and to build a career or legacy upon it, may now look around and see the ruin of their ambitions. It would have been better for all Whitewater if this rebuke had come sooner, but come it has.

There’ll be rear-guard actions and ferocious kicking and screaming – but a Know Nothing impulse has met its deserved rejection by the majority, a majority with a respect for tolerance and pluralism.

We’re a better city today, and will be a better city in the generation to come, for having turned away from that dark course toward a better one.