Take a look at any of the candidates for governor this year in Massachusetts ,with one exception, and you’ll notice that “Jobs and the Economy” take center stage. Yes sir, you betcha, jobs and the economy, that’s all you want and unfortunately, that’s all you are going to get.
If you are like me, and odds are you are, you are a laborer. In simple terms, you work for a living. You don’t own a large company with many employees; you don’t live off your investments, rental property, and so on. If you are able to support yourself with your labor and enjoy a few days off, we call you middle class. If your labor cannot support you no matter how hard you work, we call you poor. As more and more of us are learning, there is a thin line between the middle class and the poor and that line is vanishing.
Here’s a video from Elizabeth Warren that explains is more. It’s about an hour long, but worth your time:
https://www.youtube.com/watch?v=akVL7QY0S8A
Here’s the problem. Since the early 70’s, we laborers have been working hard and that hard work has pushed the GDP, soared the DOW, and created mountains of wealth. Unfortunately, that wealth has gone elsewhere, not to us laborers. For the past forty years we’ve asked for and elected representatives in government who promised to deliver “jobs and the economy” and that’s all labor got.
No one who is a laborer is immune from this. Even doctors today are feeling the pinch. Adjusted for inflation, a general practitioner in 1970 was making $185K. In 2011, that figure fell to $161K despite the fact that in this time, there has also been a doubling of patients seen by doctors per day. I just looked over my earnings since I started working in 1971 and discovered that I am just another example of many of us who are working more, making less, and paying more for necessities, especially health care. It’s hard to imagine that in 1974, as a kid out of high school, I managed to make $45K (adjusted for inflation) plus full medical, and two weeks paid vacation.
By the way, in this same period, corporate profits have soared and corporate tax payments have been reduced by two thirds. But hey, you wanted “Jobs and the Economy” and that’s what you got. If you are like me, you want to know where all the money went if we all got jobs and the economy grew. The CEO of a local not for profit hospital network raked in $2.1 million in 2011. The CEO the nation’s third largest health insurer added $30.7 million to his piggy bank in 2013. Sheldon Adelson, the casino guy, is currently pocketing $32 million……per DAY! (No wonder the casino people have money to burn trying to get a piece of citizens of Massachusetts) All that money comes from someone else’s labor and if you are wondering who that someone is, look in the mirror.
In closing, if you want the same old same old, your choices are simple. You can’t throw a rock into the crowd of candidates from either party and not hit someone pushing for “jobs and the economy” and casinos. Just pick one and stay on the same path we laborers have been on since 1970.
But if want more than a job, if you want justice, if you want an egalitarian America where your hard work really does pay off in your bank account, where you are able to get your own health insurance without being held captive by your employer (or his religion), vote for Don Berwick, the only candidate running on more than “Jobs and the Economy”.
Jobs and the economy are the most pressing needs.
If the wages that the jobs provide will not support a family and the growth of the economy goes only to a small number of Americans?
The average wage of the jobs lost during the Great Recession was about $62K. The average wage of the jobs that have now closed that gap is about $45K.
You really want more of this?
…NOT about jobs and the economy? In fact those things sound EXACTLY like improving jobs and the economy.
Steve Grossman has been talking about raising the minimum wage and earned sick time forever, both of which address these issues to some extent, and has walked the walk in managing his own company.
Talking about raising the minimum wage and adding sick time are quaint Band Aids to a larger problem.
What good is $11 or $12 an hour when health care costs over one year eats up that increase? What good is a sick day when you can’t afford the co-pay or deductibles to visit your doctor?
This is the same “throw them a bone” attitude that has gotten us to where rank in the developed nation.
Others have talked about bring costs of health care down too. It is a universally recognized concern at least within our party. Not everyone is storming the barricades for immediate single payer, but frankly I’m losing patience with your attitude of purity that would make the Tea Party proud.
Vermont is going single payer. Massachusetts lead the nation in health care reform with a Republican governor. Storm the barricades? The timidity of our leaders is embarrassing. All of the developed nations on earth have universal health care, most are single payer. Is it “an attitude of purity” to simply want to bring Massachusetts up to that level?
…but I don’t like the idea that if you don’t do it my way right now you are a bad person, which I am inferring from your comments. I also don’t understand why you complain about stagnant wages, but then seem to say we shouldn’t talk about or do something about that.
We need to stop asking for “jobs and the economy” and start demanding health care, housing, education, and yes, we will agree to “work for it” which means we need wages that can afford health care, housing, education.
that arguing with JTM may be no more productive than arguing with DFW.
*
Obviously, when one is a candidate for governor, one is going to talk about stuff one won’t get to do until one wins. So this whole “talk is cheap” line — especially given Grossman’s track record — is simply lame. Berwick, for example, is claiming to be able to do things he has only talked about. How much legislation has he gotten passed? Well, none. So one could, if one wanted to follow this lame line of thinking, complain that he’s just offering us “cheap talk” on his ability to usher stuff through the legislature.
Please stop the personal remarks, OK?
and I’ll stop.
Promise.
So yeah, I’ll try and you’ll try.
That’s a start.
Remember, if you can’t be kind, be vague!
The old jobs paid more than the new jobs. That’s the path we’ve been on since the early 70’s.
…at least no Democrat. What I said is FIXING that is about jobs and the economy. If income is down then that sounds like the RIGHT reason to talk about jobs and the economy.
With “jobs and the economy” while ignoring health care as a human right, housing as a human right, education as a human right has us where we are today. Our failure to tax the upper wealth brackets at a higher rate and bestow massive loopholes to these individuals and corporations has us where we are today. Our acceptance of a minimum wage that will not support an individual is what has us where we are today. A drowning man in 20 feet of water is not helped by lowering the water level to 15 feet.
Economic distress is not like drowning; it is not an on or off thing.
This remark suggests that you have not experienced much in the way of extreme economic distress. Economic distress is very often indeed an on or off thing, its approach invisible or willfully ignored, its advent total and seemingly insurmountable.
Either the landlord lets you stay in your apartment even though someone in your family is in trouble with the law,
or not.
Either the bank refinances your crappy mortgage,
or not.
Either your utilities are on
or they’re not.
Either you can use affordable public transit to get to work,
or not.
Either the crappy car you got has been repossessed,
or not.
Either a marshal changes the locks on your door,
or not.
Either you can buy affordable food near your home,
or not.
Either someone can watch your kids,
or not.
Either you have family, friends and neighbors who’ll look out for you when you are desperate,
or not.
Either you can get meds for your kid’s environmentally induced asthma,
or not.
Either someone pays attention and offers you immediate help,
or not.
The chief cause of death by drowning is absence of timely observation and intervention – there is so little time to jump in. From my personal observations, I’d suggest that the same is true of abandonment and death as a result of poverty.
Help on some of those things is significantly better than help on none.
That was my point.
If I can summarize the argument, I think it runs like this:
1. Since the 1970s, we’ve been making demands for jobs and the economy.
2. Real wages have stagnated or declined over that period.
3. Therefore, demands for jobs and the economy are misguided.
4. So we should fix healthcare.
5. Vote for Berwick.
The leaps from 2 to 3 and from 3 to 4 are a bit breathtaking. There’s been a lot written recently about income inequality (e.g. Thomas Piketty’s recent book). Healthcare reform is really not the core problem behind income inequality, but perhaps our OP needed some way to arrive at 5.
1. Since the 1970’s have been flat, or eroded and basic living costs have risen.
2. We’ve had Republicans and Democrats in the Oval Office and Beacon Hill thorough this period.
3. Both parties have run on a platform of “jobs and the economy”, with no mention of lowering basic living costs.
4. There are three major costs that have affected the working class (I guess you did not watch the Warren video). Education, Housing, and Medical Care. These costs need to be lowered.
5. We should fix all three, but we should in the very least, fix one. Let’s start with health care.
6. Of all the candidates, only one is offering a specific workable plan to fix health care.
7. Vote for that candidate.
Both parties have been following several pieces of woefully misguided dogma:
1. High deficits hurt the economy and kill jobs
2. The best way to create jobs and improve the economy is to lower taxes (and make the above deficits worse)
3. The government needs to practice “austerity” in order to create jobs and grow the economy
4. Lowering taxes on the wealthy creates jobs and grows the economy.
5. Inflation is a terrible thing
In practice, the actual effect of these (and similar myths) is to transfer wealth from the 99% to the 1%.
Here’s the truth:
1. High deficits stimulate the economy, increase the amount of money in circulation, increasing prosperity (and creating jobs and growing small businesses) in the process.
2. Lowering taxes concentrates more wealth in the already wealthy, taking money out of circulation, starving the consumer-driven economic engine of its fuel. The resulting retraction kills jobs and destroys small businesses.
3. The effect of “austerity” is to cut off government goods and services. Since the consumers of those goods and services are the 99%, the effect is to take wealth (in the form of goods and services) away from the 99% so that it can be concentrated in the 1% (particularly if the savings that result from the “austerity” are used to pay down government debt).
4. Lowering taxes on the wealthy allows them to keep more wealth, move more wealth offshore, and become even more wealthy. Businesses create jobs based on demand, not the taxes paid by executives.
5. Inflation helps the 99% who need credit, and hurts the 1% who extend credit. When money is borrowed in an inflating economy, each dollar is worth more when it is spent than when that dollar is later (after inflation) repaid. For fixed-rate debt instruments, inflation directly hurts PROFITS of the lender. Inflation (at least moderate inflation) is good for the 99% and terrible for the 1%.
The lines joining (1), (2), and (3) are relatively straightforward to draw.
The most significant problem with our healthcare system is that it suffers from a dollar-consuming parasite — the constant drain of insurance company profits, large health conglomerate profits, and the costs of an entire industry of lawyers, accountants, programmers, actuaries, and similar professionals. The latter is dedicated to using all the resources at their disposal to perform as few services as possible, pay as few claims as possible, and move as much revenue as possible into profits, dividends, and similar rewards for the 1%.
Yes, we should fix that. I don’t think anything we do in Massachusetts will make a significant difference. If Don Berwick were running for a national office, I would be more inclined to support his focus on single-payer.
Since he’s running for governor, I think it’s a mistake. I think he emphasizes it because it plays to the strongest suit in his experience. I think that as this hand is played out, he’ll learn that trump will end up being something OTHER THAN single-payer health care. He may win a trick or two, but it’s a losing strategy.
I’ll vote for Don Berwick because I think he is far more likely to make substantial progress on the economic and tax issues I cited above. I’ll vote for Don Berwick because I think he’s more motivated to invest in public transportation. I’ll vote for Don Berwick because I think he shares my intolerance for the wholesale political corruption that so pollutes our state government today.
I agree that we have to demand more than “jobs and the Economy”. I think that the minimum wage increase was VERY belated step that doesn’t nearly go far enough.
I think we have to do something about our income and wealth concentration. Don Berwick is the only candidate in the race, for either party, who is likely to tackle that problem.
A bit careful here.
Deficits are not at all a good thing in general. However during this period, in response to the recent contraction, they are very necessary. Now, when we are paying such low interest rates would be an excellent time to rebuild infrastructure.
On the other hand, though, you don’t want a society that is sending a lot of its wealth to creditors to pay off interest. So running up debt is not good always and forever.
… doing the same thing repeatedly expecting different results, then economics is the study of insanity as, clearly, the same actions can often produce wildly different (even opposing) results. This might, however, just be an attempt at a pithy way of saying context matters.
Let me be more specific. I mean federal government deficits.
The federal government controls the money supply. Unlike individual households, there is no need to send ANY of its wealth to creditors other than through debt service. The creditors of the federal government are, in general, T-Bill holders. T-Bill holders are, in turn, generally very wealthy Americans. Therefore, when we “reduce deficits” by reducing government spending, in essence we remove wealth (in the form of government goods and services) from the taxpayers (the 99%) in order to pay T-Bill holders. Since the federal government controls the money supply, debt service is itself paid in variable-value dollars.
There is intuitive appeal in the argument that in times of plenty, the government should run surpluses and perhaps use those surpluses to pay off whatever debt has been accumulated during the preceding period of need. As noted above, though, the effect of that is to transfer wealth from the 99% to the 1%.
I therefore suggest that some level of structural deficit is, in fact, a desirable and sustainable long-term strategy for the federal government. Some level of inflation is similarly a desirable and sustainable long-term strategy, as another weapon in the arsenal against excessive wealth concentration.
In any case, the government should NOT be talking of “austerity” and worrying about the deficit right now. The federal government should instead be addressing the enormously dangerous wealth and income concentration that is eating away our culture.
Well more than half of Americans are now one paycheck away from poverty. The much-vaunted and now mythological “middle class” was wiped out years or decades ago. The “middle class”, as determined by examining the three middle quintiles of our wealth distribution, is at or near poverty.
THAT is what we should be addressing — nationally AND locally.
It also makes everything we need to spend cost more and thus the overall cost of living rises. We CAN also keep inflation and unemployment down simultaneously.
By construction, inflation means that, on average, consumables cost more. It also means that, on average, salaries increase. The effective cost of living, in inflation adjusted dollars, is either unchanged or affected positively or negatively by other factors.
In fact, if you examine the EFFECTIVE cost of living today versus, say, twenty or thirty years ago — especially in your age group — you’ll see that you are MUCH worse off today, after years or decades of desperately seeking “low inflation and low unemployment”.
In particular, the effort to reduce inflation since 2008 has hurt the bottom end of the wealth distribution FAR MORE than the top end.
The priority to keep inflation low is the priority of the bankers and financial institutions that are hurt by it. THAT is why it is also the priority of the Federal Reserve Board (regardless of who the President is).
I strongly suggest that you re-examine both your fear of inflation and your desire to “keep inflation and unemployment down simultaneously” in the context of facts rather than political dogma.
Good luck selling that. I’m hardly the 1% and no, salaries do not go up. If they went up at the same rate as costs there would by definition be no inflation because the value of the dollar would remain constant. Inflation means the value of the dollar goes down – it buys less. I know we are worse off today. A lot went into that, but not during the Clinton years, the strongest and fastest growing economy of my lifetime when both inflation and unemployment were kept to their lowest levels. This is pretty standard economics 101 as I learned it so I wouldn’t be quite so quick to call it dogma.
I encourage you to compare starting teacher’s salaries today with starting teacher’s salaries in, say, 1974. Those salaries ARE higher today. If the increases have not kept pace with inflation, then something else is going on. Inflation itself affects compensation and prices the same way in the aggregate.
Of course it means that the value of the dollar goes down, that’s the point. We have had historically low inflation since 2008 (actually, since well before then), and effective worker compensation is FAR worse than it was at the start of the comparison period.
“Inflation” is not a monster to be terrified of. It is one of the things that happens in an economy. In particular, it happens in a growing economy.
The fact that what you describe is “standard economics 101 as [you] learned it” is precisely what I mean by “dogma”. What you are taught is not always the same as what IS.
…over economic teachers and texts, why? This is WAY beyond myself, that’s for sure. Of course salaries have gone up some, and maybe if I had to choose especially in this economy I’ll take the jobs, and for a long time it was assumed you could not have both. Now that that has been debunked I prefer to keep both unemployment and inflation low. Interest works both ways remember. Banks charge it, but also pay it if you have certain accounts with them.
I didn’t suggest that you listen to me, I suggested that you educate yourself. The things we learned in “fill-in-the-blanks 101” very quickly become obsolete.
Regarding inflation, perhaps you might find the opinion of Paul Krugman on inflation illuminating. Like most good economic analyses, the piece provides sufficient links for the interested reader to learn more on their own.
… The Krugman piece is not a wholesale endorsement of inflation: It is a call to do what we need to do and to not let fears of inflation change us from this path. What we need to do may increase inflation and we should be prepared to allow that, according to Krugman. But I don’t see anywhere he’s endorsing completely unleashing the dogs of inflation upon the economy.
Inflation is not synonymous with growth but they are intimately related: We can have growth without inflation but we really can’t have inflation without growth. Krugman advocates a wide range of aggressive, positive, pro-growth strategies, with the side effect of increased inflation, which is slightly different from advocating specifically pro-inflation strategies.
Perhaps we agree.
Here is what I initially wrote (emphasis added here):
“Inflation (at least moderate inflation) is good for the 99% and terrible for the 1%.”
I agree with Mr. Krugman (and perhaps you) that FEAR of inflation is a bad thing (at least for the 99%). I specifically suggest that the bromide offered by Christopher “pursuing low inflation and unemployment simultaneously” is a failed formula, driven by the fear of inflation, that hurts the 99% and benefits the 1%.
Is whether wages rise faster than prices or not. Since the 1970s they have not. The main period of low unemployment, low inflation was the mid to late 1990s. Alice Rivlin ascribed the paradoxically low inflation rate to the fact that unions were weakened and workers considered their position too precarious to push for wage increases. I don’t consider that a good thing at all. It’s a sign of a labor market unfriendly to workers.
.. both wage and price increases are contained under the theory of inflation, though, as you point out, they are not guaranteed to move together.
Right. But the situation now is high-unemployment and low inflation.
I guess, to clarify what I said before, the idea isn’t about inflation per se. Krugman’s argument is two-fold: A) those who screaming about the inflation boogey-man since 2009 were wrong (it has yet to happen) and: 2) even if it did happen it wouldn’t be so bad, in the short term. The point, in our present situation, that of a liquidity trap, isn’t to say inflation is good or bad, but that for the short term inflation is almost wholly irrelevant. In other words, the argument shouldn’t pivot around inflation. It should pivot around pro-growth strategies, the side-effect of which might be inflation (but probably not) and not to be derailed in that.
I agree with everything you’ve written. We appear at no risk of high inflation for the moment and certainly should not be deterred from promoting growth by fear of it. It’s sad that people promoting such a theory would get any traction at all.
My only intent was to respond to Christopher’s reference to low unemployment and low inflation by saying that – if things are going well for workers – there probably won’t be extremely low inflation in a time of low unemployment, and there shouldn’t be. When this occurred in the 1990s, it was only because workers didn’t believe they had any leverage in what was almost certainly the best economy we’ve had in several decades. I’d rather see workers with leverage accompanied by somewhat higher inflation than workers without leverage. By “higher inflation” I don’t mean the 20% of the late 1970s/early 1980s which was caused by the external shock of the oil embargo and extremely anti-growth monetary policy on the part of the Volcker Fed.
…but one line in particular still does not make sense.
“Since our biggest economic problem is an overall lack of demand, falling inflation makes that problem worse.”
If inflation falls, thus giving the dollar MORE buying power, wouldn’t I be MORE able and thus MORE likely to spend that dollar, and if everybody spends dollars that stretch further, would that not INCREASE demand? Why would it not also encourage borrowing since the money I could borrow would also stretch further? I’m also not sure borrowing is a good thing. I think one thing that got us into the current mess is that we have all been told we can put everything on a credit card and use our homes as ATMs.
I am genuinely confused here.
First off, a slowing of inflation is not deflation. It is under deflation that the money gains more buying power. It’s possible that disinflation can lead to deflation but the ‘trap’ is the people waiting for different shoes to drop… will we end up with deflation? Inflation? Also, when deflation hits, and money gains more purchasing power, debt similarly gains more value…
Under the liquidity trap, as I understand it, the lenders and creditors are unable to loan at interest rates that are amenable and thus they tighten their lending standards to keep defaults at an absolute minimum. As it becomes harder to get credit business owners and investors slow down their investments to avoid a single bad investment or decision having deleterious affect. So you have banks, businesses, entrepreneurs and institutions sitting on large pools of liquidity but unwilling to spend any because they don’t really know what’s going to happen next. Thus the trap. Krugmans major proof of the liquidity trap is the massive amounts of money the Fed has injected into the economy (3x monetary base) since 2005 that has not, in any meaningful way, moved the needle. Water water everywhere… but not a drop to drink…
… since 2009 (two – zero -zero -niner)
but the TARP program as well.
The point of the bailout, as defended by even Paul Krugman, was that the banks had to be put in a position to lend again. At least in economic terms, the justification wasn’t about saving bankers from their bad bets so much as about restoring access to credit sorely needed by the “real economy.” But that didn’t really happen – instead of loaning it out the banks hoarded the money. Partially because their balance sheets were worse than originally suspected, partially for the liquidity trap reasons you cite. Remember Mike Capuano railing about the failure to “get the money on the street” in 2009?
Economies hum where there are lots of transactions, when there’s lots of producing and consuming and buying and selling. Under conditions of mild inflation, cash is a bit like a hot potato: it loses value by sitting, and so it is better for holders of cash to invest it so they don’t lose value.
Under deflation, cash constantly accumulates value. The incentive to invest weakens. Less investment, less economic activity; unemployment rises; economic resources are under-utilized.
The latest studies seem to indicate that very low inflation can have many of the same effects as deflation. With inflation at 0.5% or lower in a number of places, we’re getting a chance to see that proved.
I think you’re being a bit obtuse, here. I see nothing in Johntmay’s post that suggests that improving the economy and creating new jobs are unworthy goals. I think it should be obvious to even the most casual reader that he is expressing a loss of patience with the spent force of the rhetorical tropes employed by mainstream candidates on both sides: when polls say that middle/lower income independent voters (the Golden Demographic) consistently rate job security and economic stability close to the top of their political priorities (surprise, surprise!), the consultants train their candidates (Republican or Democratic) to repeat the words “jobs” and “economy” as frequently as possible at the expense of the proposition of more bold or nuanced policy propositions on how to actually create new jobs or improve the economy.
At this point, “jobs and the economy”, along with “working for folks like you”, has become an instrument of what I’ve come to call the Basket of Puppies Paradigm: when things get too complicated, the campaign (of any party) airs a commercial featuring 30 seconds of a basket of puppies with a tag along the lines of “Candidate X. He/She likes puppies. Don’t you?”, or, if they’re in a negative mode, “Candidate Y doesn’t seem to like puppies much. What’s up with that? Call him/her and ask, “What have you got against puppies?”
So johntmay is weary of bullshit. Can you blame him?
Berwick has made no claims of legislative accomplishment. He is justly proud of his accomplishments as a doctor and as an administrative official. His statements of principle may be sweeping, but his policy proposals for healthcare, and for the strengthening of our economy through re-investment in public infrastructure (especially transportation) are clear and comprehensive while also reflecting a refreshing humility in their invitation to critical cooperation. Why should any progressive settle for less?
Finally, I think your reduction of John’s argument is wildly off the mark. Here is my ammended version of your summary:
1. Since the 1970s, we’ve been making demands for jobs and the economy.
*If you mean the Democratic Party, well not really. We pretty much threw
in the towel after Reagan.
2. Real wages have stagnated or declined over that period.
*Yup.
3. Therefore, demands for jobs and the economy are misguided.
*Who said that? The formulation “demands for jobs and the economy” is, in
itself, hopelessly vague and incoherent.
4. So we should fix healthcare.
*Yes we should. Especially since the high cost and inequitable distribution
of healthcare is one of the biggest obstacles to true economic reform, and
one of the few that can be addressed aggressively and independently at the
state level.
5. Vote for Berwick.
*Yes. Because he’s the only candidate willing to tackle this stuff head-on.
Happy Labor Day!
…it sounds EXACTLY to me like johntmay thinks that jobs and the economy are unworthy goals and items to discuss. He has done quite a bit of disparaging of the idea that those are even brought up.
that you just don’t get it.
and adding that Johntmay’s response to me was much more coherent than the diary. My main complaint was that the original just didn’t make sense, but I thought his response addressed that surprisingly well. He would have us think about reducing expenses of wage earners, whereas others seem to emphasize increasing their/our income. The U.S. is certainly behind the rest of the industrialized world when it comes to the administration of healthcare, but we’re also pretty bad on income distribution. Again, as Christopher, I, and others have pointed out, the labor participation rate remains quite low after the recession; it has not recovered. Maybe an income focus, for now, makes a bunch of sense. I don’t know. There’s some calculation here of what’s achievable and what’s going to give the greatest benefit.
*
Campaign rhetoric is certainly not one of the crowning achievements of our culture. It is intentionally manipulative.
Unfortunately too, there’s quite a large distance between campaign messaging and policy.
is one of the chief purposes of all rhetoric. The art of rhetoric predates the particularities of our specific political culture by many a moon. That’s not the problem here. The problem is boring, sloppy and innefective rhetoric. The bottom line is that everyone in this discussion -you, me, johntmay, and most Republicans, probably- recognizes that the availabity of jobs and the over-all health of the economy are important. But rhetoric that relies on banging the drum about gdp growth and increased employment rings hollow with folks who know that the new jobs are pretty crappy and don’t pay squat and won’t allow the “lucky” new employees a chance to enjoy any of the fruits of the expanding economy. It’s not just unpersuasive – it’s clueless.
If paying for health care were not tied to employment, worker mobility would be increased. Yes, I know that Romneycare and Obamacare have reduced the impediments to changing jobs, but they are still there to some extent. Even without changing jobs, insurance plans change the terms of coverage without any recourse for employees. My employer’s plan paid 100% of one prescription last year, but this year it costs $30 for a refill. I didn’t know that was happening, even though I read the notice that “some changes in coverage” were being made. How can an employee possibly assess just what impact changing to a different employer’s plan would have?
Having health-care tied to employment is a big drain on the economy. As mentioned, there’s the parasitic role of insurance companies’ making a profit from all interactions between patients and health-care providers. Then there’s their inability to effectively restrain rapacious big providers like Partners. Then there’s the added administrative costs for providers and employers, and the time and aggravation costs to patients. Auto makers have actually moved production of some vehicles from Michigan to Canada specifically to escape the burden of health-insurance, Can you see what an advantage Massachusetts would have, if businesses no longer had to deal with health insurance at all?
and adds to the tilted terrain that labor and capital compete on. If health care were not tied to employment, think of the entrepreneurial explosion when individuals would not be risking their health when they strike out with a new business. Think of people who actually liked their jobs and were not there just for the health care. Or better yet, take a look at Denmark where this is a reality. I have a few dear friends there and just marvel over how content and happy they are.
no one has used the word regulation. Yet businesses will complain that regulations for them are a bigger drag on doing business than tax policy. If we’re going to create jobs, then businesses are going to have to create them. If we’re going to have businesses grow, add jobs, or relocate here, then we have to create a favorable business climate. Currently that is not the case. Doesn’t anyone think that if we’re going to create jobs that we need to hear from the likes of AIM and NFIB?
Like the ones that regulate compound pharmacies in Framingham Massachusetts and fertilizer plants in West Texas?
…I believe the stat cited was that MA was 5th best state to do business in or something like that.
Of course, one can have a boneheaded partisan take on regulation of the form: regulation, for or against? There are a number of things in play though:
1. Efficiency. It’s best if regulation can be as efficient and predictable as possible. All time spent by businesses documenting compliance is non-productive time in an economic sense, i.e., it creates no goods and provides no services. Getting regulation to be efficient and predictable depends on government being well-managed, quite well-managed actually. Those of us on the progressive side of the spectrum have a strong interest in government functions being well-managed, and that doesn’t always show unfortunately.
2. Necessity. There are always going to be regulations businesses don’t like. Taking your hint, I went over to the NFIB website and was mildly horrified. For example, insisting on balancing the federal budget every year is insanely stupid, and, if we hit another recession like the last, would cause lots of small businesses to fail. But on regulation, we really do need the EPA to do its job and OSHA too. Recent problems with Toledo’ s drinking water, deaths of bee colonies, and threats to the Florida citrus crop all suggest that we’re ignoring the environment too much and not too little.
3. Business benefits. Some industries, like pharmaceuticals and insurance, depend upon regulation — even upon regulation they don’t “like”. Unregulated, no one would trust insurance or drugs.
4. Regulatory skew. Regulatory capture, unfortunately, has led to regulations being promulgated that unfairly benefit those who can afford lobbyists. Sen. Warren has pointed out that some regulations, due to their complexity, can only be followed by large businesses and have the result of crowding out small ones. Regulatory skew definitely hampers economic growth.
5. Regulatory inconsistency. A number of social psychology experiments show that people are much more ethical when they believe the rules are really being enforced. Too many of our regulatory organs are understaffed or poorly run, and this leads to the excessive loss of human life, say, in mining. If I believe my competitor is getting away with regulatory violations, then I’ve been given too strong a temptation to try to duck the rules myself.
How was that? Was that mention enough?
What state near us has a more business-friendly climate? If you say New Hampshire, I’m going to laugh. The huge numbers of NH residents who clog Rtes 3 and 93 every morning aren’t driving to jobs at businesses that found NH more friendly.
It’s more about the “developed” (my joke) states.
I don’t trust those surveys as facts. “Best places to live, etc” are all too subjective.
I’m only talking MA here rather than the broader points of Federal regulation in general.
Some regulations in MA are more onerous than anywhere.
Our contractor/1099 regulations are the most stringent in the country.
Our regulations around pharmaceutical and medical device companies collaborating with medical professionals border on silly.
Our environmental and general development rules are excessive.
Our energy costs are way too high, and this relates partly to regulation. See: stories about the proposed new gas pipeline in MA.
There is a general unwillingness to work with business, and this is perhaps the most troubling. There is a perception, true or not that we’re a tough place to locate a company.
I suspect that the Boston metropolitan area is doing well compared to the state average or the national average in recovering from the recession. However, as the excellent Springfield diary by nopolitician points out, there are areas of the state lacking industrial concentrations where jobs are scarce, random, dead-end, low-paying, or a combination of all four. For such areas of the state, I’d imagine that people really do want to see an improvement in jobs and the economy. Possibly Mass Health has already alleviated a significant portion of that pain of health insurance coverage. In depressed areas, housing is very cheap. So the two usual drivers of expense may not be felt nearly so keenly as the lack of job, career, and income.
So possibly priorities and a message of great appeal in say Everett may not resonate so much in Springfield because the economic challenges could be significantly different.
Disclaimer: I’m speculating here, and I’m not sure how one would go about proving or disproving the above hypothesis.
I agree that real wages are down and politicians of both parties have put up web pages with language on “jobs and the economy” but haven’t delivered on a solution. From the post and comments it seems clear that johntmay’s suggesting we should move past “jobs and the economy” altogether to focus on lowering prices to match the declining wages. For the most part, I don’t agree. I think that would be dangerous – we don’t want overall deflation. To me the solution remains to promote workers’ rights and craft policy around boosting wages. If, like some folks running for Governor, I had a “magic wand,” I’d do card check, strengthen labor laws in other ways, reform the tax code to create incentives for good jobs here, raise taxes on high incomes and on capital gains. And of course raise the minimum wage to at least $15.
With the exception of the oil embargo period, inflation overall hasn’t been a problem these last 30 years. It’s been fairly modest. There are major exceptions, though. First and foremost is healthcare – which is not just a family pocketbook problem but a government budgetary problem. I’d love to see cost containment there and it does seem single payer is the best way to achieve that. It also would help the labor market issues by giving workers more flexibility to leave.
Another exception is higher ed. One solution here is boosting investment in public colleges so they’re affordable like they used to be.
And, in Massachusetts, another thing that’s badly outpaced the official inflation rate is housing costs. Many causes: Lax mortgage standards over the years. Our zoning laws (which I DON’T want to change too much; anyone who’s been to Phoenix will understand why). But I think it’s mostly a function of being an area where high-income fields dominate in an era when income distribution is skewed wildly to the top. No matter how much home prices in some places go into the stratosphere, there are people lining up to buy. Ditto NYC, SF, etc. The sheer amount of money the top 10% or 20% have to spend also drives private university tuition to some extent, I think.
Housing, college education and healthcare. Each sector effectively tries to gobble up all the available spending money and/or debt intake that we have. I would argue the economy ought to be focused on what happens outside these three sectors.