Friday, February 28, 2014

Unfortunately, Economic Libertarianism’s Time Has Passed

An ideology based on what some might call extreme freedom has established a renewed foothold in American political thought.  Libertarianism, which can be defined as a policy of no laws except those preventing force, fraud, or coercion, has ebbed and flowed throughout the decades.  The philosophy generally supports Democrats on social issues and Republicans on economic ones; true libertarians want both lower taxes and legal drugs, and oppose both school prayer and inflationary money policies.  They differ from populists by advocating freedom for businesses as well as people, but both dislike excessive government power.  The Libertarian Party has attracted people as diverse as hippies, motorcycle-gang members (who also don’t want mandatory helmet laws), and economists advocating a return to the gold standard.  In a sense, libertarianism is the archetypal political scheme for the freest governed country in the world, with a main strength that is clear – if people can choose to do what they want, limited only by the inherent rights of others, they will find their own niches and be happier and more successful.    

My libertarian roots are deep.  I voted for Ed Clark, the first and maybe still most high-profile Libertarian Party presidential candidate, in 1980.  I also chose Harry Browne from the same in 2000, and heavily supported Ron Paul in the 2008 primaries.  I still may be closer to a libertarian than to a consistent conservative or liberal.  Yet, because of changes we have seen, the ideology now has a fatal flaw which makes it unsuitable as a whole.  What is that?

Central to libertarian thinking is the value of free markets.  In them, people provide resources and obtain others in return.  The United States has had a long, fine run with relatively free markets, during which exchanged assets or experiences have often ended up with the people valuing them the most.  When you buy bread, you want it more than Wonder or Winn-Dixie does, and so you pay more than their costs.  If you sell old postcards at a flea market, you are saying you value the money they bring more than the cards themselves, opposite to your customers.  Paid workers in any job trade their expendable time for pay and benefits they want more. 

Unfortunately, an increasing share of people cannot participate in these deals on their own.  Work’s New Age Principle #13 holds that in order for markets to work, people must have money to spend.  Many Americans, over the centuries, have had only one real source for their money, selling their labor, so if people are not working, large numbers of them will not have anything to offer.  Although they may choose to raise money through other of their resources, such as selling things on eBay or renting out rooms in their homes through Airbnb, their tangible goods will run out, and those needing to raise money the most tend to have the least.  Accordingly, even a temporary jobs crisis, which in effect happened in Ireland’s Potato Famine in the 1840s, can ruin a free market system, and the jobs crisis we now face is permanent.

What happens, then, to markets?  The result must be a permanent market crisis.  It is now alleviated through safety-net programs such as welfare, food stamps, and unemployment benefits, none of which, though, true libertarians would support.  With the number of employment opportunities in relation to the population dropping, the need will only get greater, with more and more people in the position hunter-gatherers would have if their animals and plants disappeared. 

Ayn Rand, the patron saint of libertarianism, allegedly said that she would not rescue a drowning person she didn’t care about, even if it would be easy.  That is a choice we can make about our countrymen, when, in addition to their labor becoming worthless, they sell all of their possessions of value and can no longer keep houses with spare rooms to rent out.  Yet what might result for a country with more and more people without possessions, jobs, or social services, such as a new feudalism with the masses beholden to the 1% for their survival, or a Somalia-like or even Mad Max-style milieu with the security industry having the best growth prospects, are not pleasant to think about. 

The libertarian influence, progressive in the right ways, has been tremendously positive.  It is hard to imagine, to name only two things, the recent legalizations of gay marriage and marijuana without it.  Once, libertarianism promised great prosperity to go with its freedom.  From here on out, though, it will not be enough, economically, for the federal government just to leave people alone.  For too many, that kind of freedom would be only an indication that they had, as Kris Kristofferson put it, nothing left to lose.  That is not what we want for the greatest country in the world.   

Thursday, February 20, 2014

Jeb, Ignore Your Mother

It’s less than two years before the 2016 presidential primaries, and the Republicans are in real trouble. 

New Jersey governor Chris Christie, a month and a half ago the clear frontrunner for the presidential nomination, has fallen on his sword with the Fort Lee traffic-blocking scandal.  Even if nobody can show that he knew about the plan to punish that city’s Democratic, non-endorsing mayor, he will be left with responsibility for the actions of his subordinates and the climate of his administration, both ugly.  People don’t tolerate bullies these days, and the time of popular autocrats, such as Chicago’s old-time mayor Richard J. Daley, has long past.  Accordingly, on, the site I use to determine the true chances for presidential candidates (since as they take bets on their projections, they cannot afford to be partisan), odds on Christie have worsened from 6.5 to 1 against on January 10th to 12 to 1 yesterday.   Strangely, Christie is still listed as more likely than anyone else to be nominated, though tied with Florida senator Marco Rubio.  Over the 40 days, much of Christie’s gain has been absorbed by the overall favorite, Democrat Hillary Clinton, up to two-to-one against from 2.25.

Jeb Bush, former Republican governor of Florida, stayed the same at 15 to 1.  His chances did not improve, probably due to his mother, Barbara Bush, saying in a January 20th-airing C-SPAN interview that he shouldn’t run in 2016.  Her thinking was that two from one dynastic family, her husband George H. W. and her oldest son George W., were enough.  But would that be best for the country?

During my 23 years in Florida, there were only two governors I liked, Lawton Chiles, a Democrat, and Jeb Bush.  One or the other had the office for nearly 16 of those years, and they had something critical in common – they did nothing destructive.  Chiles, with a reputation as a media darling, wanted a state income tax, so he arranged for a balloon to be floated in the Orlando Sentinel.  The query took the form of a question readers were asked to respond yes or no to; it was, approximately, “If Florida sales tax were reduced from 6% to 4%, and a small state income tax were introduced, the combination meaning almost everyone with incomes under $60,000 would come out ahead, would you support it?”  The vote could have been close, but it wasn’t –an amazing 97% said no.  After that, we heard nothing more about Chiles’s income tax effort.  Similarly, on his second day in office, Bush put an end to a statewide high-speed rail project, accurately considered to be a boondoggle by most Florida residents, and through his two terms did little to impede the great economic growth, high prosperity, and sub-4% unemployment rates the state then enjoyed.  Having the discipline to do nothing when nothing is called for can be hard for politicians, who want so badly to make their marks, but it’s a sign of true leadership.

So, in the absence of Bush, what can Republicans do for 2016?  Though many like and almost all accept the austere preferences of the Tea Party, their leadership has to know that nobody who wants to crush food stamps, wants to deny employment benefits to people who have been looking for months and months, and calls people such as my late Republican-voting, 45-year-working father-in-law “moochers” for not refusing their Social Security benefits, will be elected.  They need someone moderate, who can at least see both sides.  Rubio may or may not qualify.  Bush’s criticism of the most conservative half or so of Republicans would fit right in, as wouldn’t the attitudes of the Paul Ryan and Ted Cruz, the two others in his party given the highest chances.    

What about the Democrats?  Our experience we have had and project to have with President Obama on jobs says one thing:  We do not want a generic, party-beholden Democrat in 2016.  That means Hillary.  As for the rest of that party’s field, it is telling that the only others with odds shorter than 50-to-1 are Joe Biden and Elizabeth Warren, both with more baggage than O’Hare and little crossover appeal. 

That brings us back to Jeb Bush.

Unlike most of the 2012 Republican field, he is sane, sober, non-precipitate, and grounded in reality, which is why he is often described as “the only adult in the room.”  With a Phi Beta Kappa, he has also been called “the smart one” in his family, even more than his Yale-educated father.  Along with his degree in Latin American affairs, he has a Mexican wife and speaks Spanish fluently, which, given the growth of the country’s Hispanic population, are fine credentials.  He would bring a virtual assurance of winning Florida’s 29 electoral votes.  Befitting the title of a recent Atlantic article, “Jeb Bush, Republican Savior in 2016?,” he is, or will soon be, the most sought-after non-running presidential candidate since Colin Powell. 

So what could he do about jobs?  His proven ability to take a moderate course, even when irritating what most would call his political base, tells us enough.  He could extend unemployment benefits and strengthen food stamps, while rejecting minimum wage increases, assaulting government waste better than any Democrat would dare, and, if turned down by Obama, approving the Keystone XL pipeline.  He could start a federal jobs program, convincing fellow Republicans that the infrastructure work America badly needs is not optional and working with Democrats to get approval of the labor paying much less than union scales.  He could start a bipartisan commission to research and evaluate guaranteed income, charges and payments for Internet activities, and other radical ideas that must be considered.  He could use the strength of his family and Spanish-language connections to achieve more consensuses than our current president has been disposed to do.

Could Jeb Bush accomplish all this?  I doubt it, but his chances seem better than anyone else’s.  It is much easier to imagine him, for example, pushing for the next WPA than it is to think of Hillary Clinton saying we can’t afford a higher minimum wage.  Politics, is after all, largely about hope, and, from where I am sitting, he can provide the most. 

Jeb, sometimes your mother doesn’t know best.  We need you.         

Friday, February 14, 2014

Millennials’ Late Independence: From Laziness, Immaturity, or Another Reason?

Those in the millennial generation, born between 1981 and 2000, now range from 13 to 34 years old.  Not only are they the great bulk of high school and college students, they extend well beyond the age when Americans have generally been well established in life.  Yet, as we have read, many now are not.    

Aside from age, the three transitions most Americans have used to mark truly growing up have been getting married, moving away from parents, and working steadily at a full-time job.  Although of course some never do all of these things, achieving any two of them has been for a century or longer a good indicator that someone is no longer a child or adolescent.  So how quickly have recent generations been maturing?     

As of the 1950s, half of women married by 20 and more than half of men by 23.  From there, mean marriage ages for men increased, from 24.0 in 1975 to 24.8, 25.9, and 27.0 in 1980, 1985, and 1990 respectively.  For women the age crept up to 21.9 in 1975, then grew to 22.7 in 1980, 24.0 in 1985, and 25.0 in 1990.  By 2005, average marriage ages were 27.2 for men and 25.1 for women, which became 28 and 26 by 2009.

As for living with parents, in economically poor 1940, 63% of Americans aged 18 to 24 did, but by 1960 it had dropped to 42%.  From 1977 through the 1980s the trend reversed, and more stayed longer.  By 1994, 51% of men and 37% of women 20 to 24 lived with their parents, as did, in the mid-2000s 20% of 26-year-olds.  As well, in the late 1990s almost 40% of young adults who had moved out returned for four months or more, and in 2010 the Great Recession alone had caused 10% of those under 35 who had left to move back in.

How about working full-time?  It has been several decades since being able to start at a low-level position in a hierarchical company with hopes of working oneself up has been the norm for people out of high school or college.  In fact, only half of people aged 18 to 29 had a full-time job of any kind in 2006, which fell to 41% by early 2010.  The high school part-time job, which has often led to full-time work later, is fading away; the share of those 16 and 17 years old with work experience in the year plunged from 51.8% in 1987 to 28.5% in 2007.  For the same years, ages 18 to 19 fell from 76.6% to 57.3%, and 20 to 24 from 85.5% to 76.6%.

So what is the connection between lower employment opportunities, later marriages, more time living with parents, and later independence in general?  Younger adults with jobs have long tended to move out earlier.  Opportunities for career positions, however modest, for young men were much greater in the 1950s and 1960s than since.  The 1970s were not all bad recession years, but they may have seemed that way for graduates seeking entry-level career positions, as that market segment became flooded.  The slackers of the 1990s were unemployed in large part to lack of opportunities instead of lack of ambition.  With the Great Recession damaging younger workers disproportionately, positions offered to new college graduates dropped 28% from 2008 to 2010, and for the year ending February 2011, joblessness for graduates less than 25 years old averaged 9.5%.  One 2013 study showed half of new and employed B.A.’s  working jobs requiring no degree.

What can millennials do about their economic plight?  Robert Nelson, of that generation himself, wrote an article last month in Salon, saying that what his cohort needed was to get involved more in the nuts and bolts of politics, and push for change through the electoral system.  It is not enough to do symbolic things, since, as Nelson put it, “The Tea Party has had more of an impact on American politics than Occupy Wall Street, because they focused on winning victories in the political arena rather than just banging on drums in a park.”  If there were more millennial candidates, with, for example, strong pro-jobs agendas, the generation might be able to improve its lot considerably.

People born in the 1980s and 1990s are not a group of shirkers.  They have done what any other generation would have in similar circumstances – using the resources they can call upon, such as more affluent, more tolerant parents, to offset what they can’t get.  Just as many potential young military heroes were not born between 1915 and 1925, millennials have largely been stopped by a lack of opportunities.  We all choose from what life makes available to us, and the current generation of young adults has been the most affected by the permanent jobs crisis than any other.  Before we make any negative generalizations about the millennial generation, we first need to understand that about them. 

Friday, February 7, 2014

January 2014: AJSN Well Over 20 Million Again as Lower Unemployment Rate Attracts Job Interest

When I saw this morning’s Bureau of Labor Statistics Employment Situation Summary, I glanced at a few numbers and thought “another lousy month.”  Yes, it was that, but a few things in the report are worthy of note.

First, the main factor pushing the American Job Shortage Number up to 20.6 million was the number of unemployed, which, not seasonally adjusted, rose almost 900,000.  Second, the count of people wanting to work but not technically jobless due to not looking for at least a year soared over 400,000, while those claiming to have no interest in employment fell almost 400,000.  Those together show just how non-binding these categories are for many, in particular that some who claim they don’t want to see the inside of a workplace may reconsider when they think their chances might be better.  Third, offsetting the poorish job increase data, four key secondary factors showed real improvement.  The number of people unemployed for 27 weeks or longer dropped 232,000, those working part-time for economic reasons plunged 514,000, the labor force participation rate increased to 63.0%, and the employment to population ratio went up to 58.8%.  These numbers have not been getting much better lately, and while still inferior, could be the start of something.

The AJSN components for January are as follows:

Other changes from December include 80,000 fewer discouraged workers, 101,000 more in school or training, and 222,000 more in institutions, in the military, or falling through the statistical cracks.  The non-seasonally-adjusted unemployment rate increased from 6.5% to 7.0%.

Compared with a year ago, when the AJSN was almost 22.4 million, the American employment situation has substantially improved.  Since January 2013, unemployment is down 2.3 million, and the group of those wanting to work but having not looked for at least a year lost almost 300,000, but over three million more claim no interest in employment, and almost 4 million more were non-civilian, institutionalized, or not accounted for. 

Yes, with the number of jobs added once again not covering population increase, January was a poor month.  We will see, though, if the improvement in the long-term jobless and involuntary part-time workers will continue.  If it does, times may truly be improving.  If those figures bounce back to where they were in the fall, we will be left with no reason to see progress in American jobs.