Peter Lindert & Jeffrey Williamson: Will the rise in inequality ever stop?


By Peter H. Lindert and Jeffrey G. Williamson

Could the steep rise in the share of income gains falling into the hands of the top one percent of Americans since the 1970s have been stopped, and will the rise stop in the near future? A newly revealed history of American growth and inequality suggests the answer is yes to both questions.* What is exceptional about recent American experience is that inequality has risen faster than in other rich countries. Furthermore, it has happened twice in our history – before the Civil War, and again since the 1970s. Without some exogenous crisis like revolution, war, and great depressions, does America have the political will to stop the widening of income gaps between the very rich and the rest?

How hard would it be to stop, or even reverse, the trend? The economics is easy. The politics may be harder. However, to make the policies politically acceptable, just follow a simple equality-growth rule: Make life chances more equal in a pro-growth manner. Prioritize those economic policies that have been shown to equalize people’s opportunities without doing any damage to the growth of our average incomes.

$100 bills lying on the sidewalk

Finding such win-win policies is easy. To see why it’s so easy, just remind yourself: Has our political system seized all the chances to make us richer and more equal at the same time? Of course not. Throughout American history politicians have failed to cash in on equitable growth opportunities, even though they are all around us like so many $100 bills left lying on the sidewalk.

Four easy win-win choices stand out when we compare our experience with that of other countries – and yes, the United States can learn positive lessons from other countries.

Early and basic education for all. The United States has slipped down the rankings in its delivery of early education since the 1960s. At the primary and secondary levels, other countries have caught up with us in years of school completed, and we rank about 27th among all tested countries in the quality of the math, science, and reading skills that students actually learn by age 15.

We are also below the OECD average in the enrollment of three- and four-year olds in early education-plus-care institutions, mainly because we are also below average in our commitment to both public and private funds in pre-primary education. A growing body of evidence shows high returns to early education. Providing it to all serves both equality and growth.

Investing in the careers of young parents with newborns. Our country lags behind all other developed countries in public support for parental work leave. We are failing to invest in both child development and mothers’ career continuity. All of society gains from the better nurturing of our children and the extra career continuity of their mothers, and all of society should help pay for parental leave, not shoving the whole burden onto the young parents or their employers. Other countries figured this out long ago.

Equal opportunity and the inheritance tax. We should return to the higher federal tax rates on top inheritances that we had in the past. This would force rich children receiving bequests to work harder, make Americans more equal, and, by leveling the playing field for new generations a bit, even promote economic growth. A return to a policy which dominated the twentieth century would deliver on the American claim that “in our country, individuals make their own way, with their own hard work and abilities.” To honor that claim, we should make sure that the top economic slots are not reserved for those born very rich. We have done it before. Our top rate of inheritance taxation was 77 percent from 1942 to 1977, years when American incomes grew at the fastest rate this country has ever attained. We haven’t achieved that growth performance since the policy was changed in the 1970s.

Taxing high inheritances is not anti-growth. Instead, it promotes productive work by those who would have inherited the top fortunes. Statistical studies have demonstrated the strength of the “Carnegie effect”. Carnegie was right: passing on huge inheritances undermines the heirs’ work incentives. We also need to stress that bigger inheritance taxes do not take income away from any living rich citizen who has earned it.

Riding herd on the financial sector. Since our Independence, the United States has been above average in its history of financial meltdowns. One could even say that America has been “exceptional” in that regard. Frequent bubbles, booms, and crashes have done great damage to our growth and our equality. The danger of future meltdowns remains, because the Dodd-Frank reforms of 2010 are weaker than the tougher regulatory reforms of the 1930s, which served us so well until the ill-advised de-regulation of the 1980s. More regulatory vigilance, government liquidation authority, and capital requirements are needed to prevent financial breakdowns that tax the non-rich to bail out the rich, and make the poor also pay by losing their jobs.

History is also clear on the inequality connection. When the financial sector was closely regulated in response to the Great Depression disaster, the incomes of the rich in the financial sector fell to more moderate levels. After de-regulation in the 1980s, incomes of the rich in the financial sector soared.

Picking up the easy money takes time – and votes

Implementing just these four win-win policies may or may not be enough to stop any trend toward more inequality, or to raise growth rates from their now-modest levels. We will have to push against a strong headwind coming from competition with poorer countries. Lower-skill jobs in this country will continue to suffer from the competition produced by the long-overdue catching up rise in Asian economies since the 1970s, and from Africa in the future. This new global competition is to be welcomed. There is no reason to wish that poor countries remain hobbled by the bad institutions that have impoverished them for so long. Yet the rising competition challenges the United States to continue to upgrade its own skills to keep ahead. All the more reason to upgrade our human capital.

It will take some time to do these things. Politicians and voters hate to wait for good results that are more than two years away. And such policies may face opposition from those who would not directly gain from such win-win policies.

Still, our democracy can achieve reforms that promote both growth and equality. We’ve done it before. We can do it again. That’s what elections are for.

* The findings reported here are substantiated in Peter H. Lindert and Jeffrey G. Williamson, Unequal Gains: American Growth and Inequality since 1700 (Princeton University Press, 2016).

unequal gains lindert jacketPeter H. Lindert is Distinguished Professor of Economics at the University of California, Davis. His books include Growing Public: Social Spending and Economic Growth since the Eighteenth Century. He lives in Davis, California.

Jeffrey G. Williamson is the Laird Bell Professor of Economics, emeritus, at Harvard University. His books include Trade and Poverty: When the Third World Fell Behind. He lives in Madison, Wisconsin. Both are research associates at the National Bureau of Economic Research.

Together they have written Unequal Gains: American Growth and Inequality Since 1700.

Nicholas Dagen Bloom: The Perilous Politics of Housing Poor People


By Nicholas Dagen Bloom

The rolling disaster of America’s urban poverty housing programs is evident in the packed homeless shelters, tent encampments, high rent burdens, lead poisoning, frequent evictions, and public housing disinvestment featured widely in American newspapers, books, and television shows. The differences in housing conditions that once separated big American cities (such as New York from Los Angeles) are much less important than they were a decade or two past.

To shore up their urban base, the Democratic presidential candidates even made quick visits to public housing developments in New York City, an acknowledgement of a new urban housing crisis in both the quantity and quality of housing. The candidates showed genuine concern, looked earnestly at the damage caused by decades of federal disinvestment, and reminded voters of their generous housing platforms.

Both candidates know that it won’t be easy. Liberals with national ambitions and power who support housing programs have wrestled with the issue of housing poor people for decades. They want to help, but they understand that most Americans distrust direct federal housing programs for the poor. And housing the poor, on its own merits, comes with many liabilities.

President Franklin Roosevelt, under intense pressure from his New York base, may have created the first permanent public housing multifamily program in the United States (the Housing Act of 1937) for the third of the population that was “ill housed”, but he also believed most “families should have individual homes . . . however modest.” His public housing program, attacked by conservatives as “creeping socialism,” thus remained comparatively small and stingy. Roosevelt’s Federal Housing Administration proved, in time, nationally popular as it made single-family homes more affordable, operated in an indirect manner on the housing market (mortgage insurance), left private builders and owners almost entirely to their own devices (redlining), and focused almost exclusively on the lower/middle class rather than the urban poor. The success of the FHA in helping build suburbia in the 1940s and 1950s undermined the mass support for public housing because most of the middle-class got their dream homes.

Roosevelt’s successor, President Harry Truman, made public housing a national priority in the context of a temporary postwar housing shortage, winning the Housing Act of 1949 that called for 800,000 public housing units. Yet the Korean War emergency, which slashed public housing subsides dramatically, stretched those targets out over a decade. As the postwar housing shortage eased in the 1950s, as private builders created miles of affordably priced suburban single-family homes, it was primarily in big cities where residual support for public housing remained, often for purposes related more to commercial redevelopment than humanitarianism.

Even many dedicated liberals wavered in their faith as the public housing towers rose in the 1950s and 1960s. Liberal Republican Governor Nelson Rockefeller (R-NY), in an address to the NAACP in 1962, admitted that subsidized housing “has been building up social and economic problems even more serious that the problems it was expected to solve” including racial and social segregation. And while Rockefeller himself remained committed to big government housing programs, building more housing than any New York Governor then or since, subsidized housing figured very little in his national appeal. Most of his state housing programs, even for the poor, also relied on public/private partnerships.

By the 1960s, the “projects” had taken on their full range of negative connotations even though in cities like New York they provided a necessary form of permanent low-cost housing for the urban poor and working class (and still do today). Most American politicians of both political parties ran from programs like public housing, substituting a complicated mix of subsidies for private interests in the low-income housing field.

Many of these new public/private programs proved, in many respects, quite successful. Richard Nixon ended new public housing in 1973 and introduced vouchers (Section 8) in private housing to de-concentrate poverty concentration. Ronald Reagan slashed direct housing programs but signed off on the new Low Income Housing Tax Credit (LIHTC) which gave tax breaks to corporations who invested in new affordable housing serving income levels generally higher than public housing. The 1990s and Bill Clinton will best be remembered for the Hope VI program which paid for the knocking down and redeveloping public housing as privately run, mixed-income communities.

Even the meltdown of the private housing market during subprime financial crisis in 2007 did not lead to a new era of direct government housing despite the fact the poor, or those just above the poverty line, were far more likely to be victims of predatory schemes and evictions. Presidents Bush and Obama secured trillions to stabilize the big private or semi-private players in housing market (the FHA, Freddie Mac, Citibank, Bank of America, etc.) so that the private market could continue as the primary housing provider for all American households.

Americans on the whole today thus remain well served by the private housing market, but the poor, and those living in expensive cities in particular, face a bleak housing future in the privatized affordable housing system.

Hillary Clinton, now the presumptive Democratic nominee and the only liberal likely running this fall, has endorsed a mix of portable Section 8 vouchers, additional tax credits for affordable housing, home ownership subsidies, and renovation of urban housing. These notable initiatives share in a well-worn path of minimizing direct federal involvement. And tested programs like these are likely to improve the lives of many poor people, particularly those lucky enough to use these programs to find housing in higher-income neighborhoods. But American politicians, even liberals, have yet to face the hard truth that to do right by the poor may take a lot more than more subsidies of private interests.

There is a large and growing population in and around cities that needs permanent, basic housing as a prerequisite to getting their lives in order. Existing large-scale low-cost government run housing for the poor such as public housing (or supportive housing with social services on site) is complicated to manage, a public relations quagmire, and often very expensive to build right and preserve. Yet we are already paying embarrassing amount to house the homeless and poor in “temporary” institutional settings such jails, hospitals, and shelters. Preserving what public housing is left (such as the 178,000 units of public housing in New York) and building more decent, very low-cost housing remains a standing invitation for federal officials—should they accept the responsibility.

BloomLasnerNicholas Dagen Bloom is associate professor of social science and director of the Urban Administration program at New York Institute of Technology. His books include Public Housing That Worked: New York in the Twentieth Century. His most recent book is from Princeton University Press is Affordable Housing in New York: The People, Places, and Policies That Transformed a City.

Christopher Kutz on drone warfare: The real moral debate


By Christopher Kutz

Despite all the sound and fury of the Presidential primary campaign, the candidates have been effectively silent on one issue: our use of drone strikes as the central tool of security policy. Perhaps they could watch Eye on the Sky, by director Gavin Hood. The film vividly imagines two nations’ officials confronting a classic military dilemma, whether to kill an enemy at the risk of civilian life. In the movie, British officials, using drone-based cameras, have identified the home of two al-Shabbab terrorist leaders (one of whom is a British woman) in Kenya as they prepare young militants for a suicide terrorist mission. Given al-Shabbab’s history, which includes the attack on a Tanzanian shopping mall, the British officials have good reason to suspect an attack against large numbers of civilians. Because local forces are unable to storm the compound, the officials request support from an American drone with a Reaper missile.

The movie’s theme is that while drone technology appears to make war ethically easier, by reducing risks to civilians and soldiers, it mainly shifts the scene of responsibility, from the battlefield to the conference room and control center. The movie gains its dramatic power by reintroducing the dilemma, in the form of a little girl who comes to sell bread outside the compound during the crucial moments. The British and American officials and drone operators must now decide how to weigh the likely death of this concrete and identified girl against the unidentifiable civilians who might be killed in a terrorist attack. The film very effectively personalizes this debate by foregrounding a few of the officials and soldiers with clear views, for and against the strike, against the majority of officials who seek only to refer judgment to other layers and departments in government. (The movie indulges in a – perhaps accurate – stereotype of Americans as callously decisive and Brits as hand-wringingly nuanced and unsure.)

Eye on the Sky is right to remind us that the ethical dilemmas of war survive the shift to drone warfare. But I believe it makes a dangerous mistake about the real ethical problem with drones. The real problem is not that officials are too rarely courageous or principled. The problem is that we citizens have given up our own responsibility for the choices of war. What ought to be a wrenching decision for a democracy, about when to kill foreigners in pursuit of its interests, has been confined within the consciences of a few.

Few doubt that a state can use lethal force in the classic circumstances of national self-defense, with an invader at the border or missiles and bombs raining in. But drone campaigns are not like this: they involve decisions made through national security bureaucracies about killing people (or categories of people) identified through disparate intelligence as members of hostile networks, whose hostilities are often directed not at the US but at local and temporary allies of US security policy. According to public information, far from strapping suicide vests onto would-be martyrs or assembling dirty bombs, most of the targets identified in intelligence or surveillance reports are, essentially, young men with rifles. What used to be a strategic decision to go to war, with Congress involved and citizens rallied, has become a matter of executive decision making at the tactical level, made by the President and his security team, and the director of the CIA.

The personalization of the decision to kill is not unique to the drone program: special forces killing teams have been part of US security policy for decades. But the emergence of drone warfare has both let the policy of secret killing come out of the shadows on the one hand, while keeping it even more deeply in the shadows in another respect, placing it largely within the confines of the CIA, with White House oversight. While even former CIA Director Michael Hayden acknowledges the myth of the surgical strike, since inevitably non-combatants, including women and children are killed, the lesson we citizens are asked to accept is that these are difficult but reasonable choices for the President, not for us.

We should fear the loss of our accountability as citizens more than the myth of the surgical strike. Presidents and CIA advisors, not to mention drone operators, may well agonize over the potential deaths of innocents. But I fear our own complacency, in wanting these dilemmas to be theirs, and theirs alone. The deaths of civilians and militants alike belong to us as citizens, and we must be prepared as citizens to deliberate about our killing policy, and accept its consequences. Instead, the complicity of the media in personalizing drone warfare keeps us citizens in a fraudulent innocence.

How can we stop the fraud we are perpetrating on ourselves? We must put ourselves in the imaginary position of the drone warriors, and come to think of ourselves as making the decision when to kill. President Obama has done little to make good on his promises of greater transparency in the drone program. To the extent the primary candidates have addressed the issue at all, Bernie Sanders has said only that he would seek to use drone strikes rarely, while Hillary Clinton has praised drone strikes as a critically effective counter-terrorism tool. Meanwhile, the rhetoric of Ted Cruz and Donald Trump, on “carpet bombing” and killing terrorist families, does not suggest much reticence on their parts. Only John Kasich has offered a specific position that moves in the right direction: to effectuate the transfer of the drone program from the CIA to the Pentagon — a shift that was promised two years ago by President Obama but later abandoned. Such a move would work to increase accountability for drone killings, and to locate decisions within an institution historically better suited to considering legal and ethical limitations on the use of force. (Recall that the use of torture in interrogation was much more firmly resisted by military than CIA officials.)

We need to force our candidates, and our media, to do better than this, to discuss what we citizens must know if we are to take honest responsibility for the deaths of the children and other bystanders in our security policy. While Eye on the Sky does a terrific job of provoking a debate on the way out of the movie theatre, we need a debate that extends all the way to the voting booth.

kutz on war and democracy jacketChristopher Kutz is the C. William Maxeiner Distinguished Professor of Law and director of the Kadish Center for Morality, Law, and Public Affairs at the University of California, Berkeley. He is the author of Complicity: Ethics and Law for a Collective Age.

A Single Issue Candidate?

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by Jason Stanley

On February 11th, in the democratic debate between Hillary Clinton and Bernie Sanders in Milwaukee, Clinton introduced a new criticism of Sanders that has since become one of her campaign’s central themes. Sanders is a single issue candidate, focusing on the problems caused by Wall Street, big financial interests, insurance companies and other wealthy and powerful business interests to the exclusion of other, equally important and structurally central issues.

There are, refreshingly, legitimate philosophical disagreements at issue in the democratic primary. However, I will present strong reasons to reject Clinton’s position. The Sanders’s campaign addresses significant issues that speak to a large, diverse, and important number of social and political ills, made worse by the lack of significant campaign finance reform. Most importantly, Clinton’s campaign strategy and arguments for it give us reason to suspect that they are problematically influenced in a way that strengthens, rather than minimizes, Sanders’s concerns.

Bernie Sanders could not be more explicit about his central political concern. It is wealth and income inequality. On his website, it is the first issue listed. It is described as “the great moral issue of our time…the great economic issue of our time, and…the great political issue of our time.” His view about how to tackle the problem is also clear. We must “take on the enormous economic and political power of the billionaire class.” This is a stark contrast with Hillary Clinton. In a recent article, Thomas Frank writes, “income inequality has little role in the grand sweep of her political career.”

Clinton introduced the charge that Sanders is a “single issue candidate” in Milwaukee:

Yes, does Wall Street and big financial interests, along with drug companies, insurance companies, big oil, all of it, have too much influence? You’re right. But if we were to stop that tomorrow, we would still have the indifference, the negligence that we saw in Flint. We would still have racism holding people back. We would still have sexism preventing women from getting equal pay. We would still have LGBT people who get married on Saturday and get fired on Monday. And we would still have governors like Scott Walker and others trying to rip out the heart of the middle class by making it impossible to organize and stand up for better wages and working conditions.

Clinton here blames the crisis in Flint on “negligence”, which is a failure of individual responsibility (presumably, the governor’s). The “racism holding people back” has nothing to do with “Wall Street and big financial interests, along with drug companies, insurance companies.” These are notions of racism, sexism, and homophobia detached from oppressive economic structures.

One model of racism, sexism, and homophobia treats them as problematic attitudes that individuals have. Clinton attributes Governor Scott Walker’s assault on the labor movement to his lack of empathy, also a problematic individual attitude. I begin by responding to Clinton’s arguments, using this individualist interpretation of Clinton’s examples.

Clinton is fair to describe Sanders’s mission in terms of a battle against the excessive influence of “Wall Street and big financial interests, along with drug companies, insurance companies, big oil”. Clinton clearly thinks this is not serious enough to be the basis of a presidential campaign. Her campaign strategy is to minimize the problems these institutions pose to our social and political system.

Many of us agree that racism, sexism, homophobia, Flint, and Scott Walker are serious problems. Clinton presents them as clearly outside the scope of Sanders’s single issue, the “excessive influence” of the billionaire class and the institutions they control. Instead, she attributes these problems to individual failings. Let’s take the problem of racism as a test case of this view. Is the problem of racism mainly or centrally a problem of individual racist attitudes? Or is racism substantially interrelated with the practices and institutions Sanders targets?

In “The Case for Reparations”, Ta-Nehisi Coates builds a case for reparations for Black Americans. One of his central examples of a historical racist harm reparations should address is the 20-1 wealth gap between white and Black Americans. Is the wealth gap mainly a problem of individual attitudes?

Coates argues that a central mechanism in the maintenance of the wealth gap is homeownership. At the heart of his analysis are the structural practices of mortgage lending at the intersection of government housing policy, banks, and other lending institutions. His argument for reparations culminates in an account of the predatory lending practices of financial institutions during the recent subprime mortgage crisis, which as have been well-documented, reinforced and increased the racial wealth gap. In short, he argues that in explaining a chief racial harm, the 20-1 wealth gap, one must appeal to the structural practices of the apparatus of mortgage lending, practices at the heart of the financial industry.

The practices of finance are mainly guided by the view that pure profit seeking is in the public good. The poor have no choice but to accept high interest rates. So when such practices are applied to a group that has been historically disenfranchised, their effect is to support and maintain that disenfranchisement. These are essential mechanisms in the support and maintenance of the racial wealth gap. After a certain point, the mechanism can even be self-sustaining. After all, even if everyone working in those institutions suddenly adopted antiracist views, practices that already target poor populations would not substantially change.

I have represented Clinton’s argument with the use of individualist notions of racism and sexism. But the argument cannot be saved by appeal instead to structural ones. There is no notion of structural racism that is entirely devoid of economic oppression of the sort Coates discusses (mutatis mutandis for the structural effects on race of the health industry and the energy industry). Similar points can be made about structural sexism.

Clinton has spoken movingly and incisively about structural sexism. But in this campaign, Clinton has repeatedly represented calls for significant structural reform as juvenile or pointless. This suggests an ideology that minimizes the effects of structural oppression. Clinton tends to propose policies that support the ideal of enhanced individual opportunity. The rhetoric of individual opportunity suggests a picture of social and political reality as consisting simply of array of individual citizens. It supports general enhancement of opportunities as a natural policy goal. But this is dangerous political illusion.

Suppose one group fails to benefit from a policy intended to benefit all. A picture of political reality that omits structural barriers to a group will leave its members as the only visible source of fault for policy failures. When a policy fails because of the structural barriers the group faces, its failure will instead be attributed to character flaws of members of that group. A correct picture of social and political reality must include not just individuals but also the significant structural barriers between them.

Sanders’s agenda in running for President is to reform institutions and practices responsible for the maintenance of structural barriers between groups, with the structural barriers erected by wealth and income inequality as his focus. He emphasizes “the billionaire class”, by which he means those who control and direct streams of capital, out of suspicion that their practices bear outsized responsibility for maintaining unjust social and economic distinctions. The individuals and institutions provide mechanisms through which historical structural injustices become self-reinforcing. I have used Coates’s explanation of how mortgage and lending practices are mechanisms in the maintenance of the racial wealth gap to illustrate Sanders’s point. In our society, much structural injustice runs through the mechanisms that control flows of money. They are far from the only mechanisms supporting the diversity of kinds of structural injustice, but given our economic system, they are the ones that have the widest application.

Why did Hillary Clinton choose the general campaign of minimizing concern for the causes of wealth inequality? Why not instead coopt the Sanders agenda, combining it with her indisputable policy expertise, experience, and brilliance? This would show respect for Sanders’s concerns, while making a powerful case that she is the best candidate to address them. It’s implausible to attribute this campaign strategy to a decision about electoral strategy; indeed her campaign strategy has widely been taken as the cause of Sanders’s shocking upset in Michigan. As a short-term plan, her campaign strategy was unwise. This has not been addressed in recent discussions. It requires explanation.

Two examples Clinton prominently used of real problems that would not be addressed by Sanders’s concerns and reforms are crucial to discuss in explaining her choice of campaign strategy. These are the examples of Scott Walker’s policies, and the disaster in Flint, Michigan. Her choice of these two examples is concerning. On closer inspection, it supports Sanders’s views about the moral and political threat posed by “the billionaire class”.

Is the cause of Scott Walker’s anti-labor policies lack of empathy? Or is it rather that he is, in the words of a prominent national politician, just getting “his marching orders from the Koch brothers”? The Koch brothers are the nation’s premier financial supporters of politicians whose policies reinforce structural barriers due to wealth inequality. Their relationship to Scott Walker is one of the most salient examples of the “enormous economic and political power of the billionaire class”. And Hillary Clinton is undeniably aware of the duplicity involved in using this example; after all she is the “prominent national politician” quoted at the start of this paragraph.

Far more worrying, however, is Clinton’s use of the water disaster in Flint, Michigan as a problem that would be left completely unaddressed by Sanders’s “single issue” reformist agenda. Clinton attributes the cause of the crisis to a failure of individual responsibility. This is an egregious misrepresentation. There are two central causes of what occurred in Flint. One cause is Michigan’s Emergency Manager laws, which were used to replace democratically elected mayors with “emergency managers” who were then in complete control of financial decisions. Racism played a significant role here, as claims of emergency seemed to suspiciously correlate with majority Black cities. These “emergency managers” then made undemocratic decisions, which seemed to serve the “billionaire class” at the center of Sanders’s concerns, rather than the citizenry.

The second central cause of the disaster in Flint is the swap contract the banks engineered with Detroit Water and Sewerage Department (DWSD). DWSD had to pay $537 million simply for a swap contract termination fee. DWSD was forced to raise its fees drastically. Since Detroit sits on the world’s largest body of fresh water, it is quite obviously not because of a resource poor situation. It is because of a swap contract that was, to say the least, ethically deeply troubling.

The first nationally reported effect of these deeply problematic financial industry contracts was the widespread water terminations in Detroit. It was predictable then that there would be additional victims of the combination of undemocratically appointed “emergency managers” with financial industry practices of offering absurd swap contracts to “protect” municipalities and public utilities from drastically rising interest rates that never arrived. The general consensus is that the EM’s decision to switch Flint’s water source away from DWSD was to avoid high rates for water paid by customers of DWSD. If so, the cause of the Flint emergency is the disastrous swap contract that the banks negotiated with DWSD, i.e. a direct result of bank practices that Sanders’s campaign targets.

In recent weeks, newly uncovered emails have suggested an alternative motivation for the switch from DWSD to the Flint River. According to the Detroit Metro Times, the emails suggest the motivation for the switch was instead [Governor Rick] “Snyder’s desire to privatize and break up DWSD or maybe Snyder’s goal of opening up fracking opportunities around the new KWA pipeline.” After all, removing Flint, an important source of revenue for DWSD, obviously adds to the financial woes caused by its deal with the banks, and strengthens the claim to sell it into private hands.

This too squarely places the blame on the agendas of the “billionaire class”. DWSD is a public utility with access to the world’s greatest supply of fresh water, the Great Lakes. There are many wealthy and powerful interests who would wish to own such a unique resource and use it for profit, and its debt is used in the argument to privatize it. The entire story about Flint is one about the “billionaire class” jockeying for money and power; the only question is which exact interests are the cause. None of it involves “negligence”. Quite the contrary, it involves careful strategic planning.

Why has Clinton’s campaign strategy taken the form of minimizing the problem of wealth inequality? To deepen the mystery, why use examples that underscore the importance of the issues at the heart of Sanders’s campaign, in an effort to minimize them? What follows, of necessity, involves speculation about motivations.

The water crisis in Flint has attracted international attention. A shady financial industry deal with a public water utility is generally agreed be its cause (a point oddly absent from the national press narrative). The situation raises serious concerns for the financial industry. Flint is an obvious example to use to build public pressure for a general reformist agenda that would address the problem of shady municipal loans. Perhaps the whole practice of such contracts with public utilities and municipalities might be drastically reformed, well beyond what already has occurred in Dodd-Frank.

The second concern is that Flint could be employed to extract a record settlement as well as lawsuits against the banks (conservative estimates of costs of repairing the water system start at 1.5 billion). JP Morgan Chase offered a swap contract to the public water and sewer utility in Jefferson County, Alabama, which almost led to the country’s largest municipal bankruptcy. The SEC leveled a 722 million dollar fine against JP Morgan Chase for overcharging on swaps. The state of Michigan is Jefferson County writ large.

As Wallace Turbeville documents in an important 2013 piece in Demos, the “risky financial deals” Wall Street sold to Detroit in 2005 and 2006 play a large role in its financial problems. DWSD’s rate hike due to a problematic swap contract led to the water crisis in Detroit last year. The water crisis in Flint is also directly connected to the debts DWSD incurred from this Wall Street contract (even the argument for privatizing DWSD is based on its thus incurred debt). At some point, even the national media might recognize that there is a stream of problems in Michigan connected to water. It is but a short step to trace them to the public utility supplying it, and to recognize that its problems are due to an ethically dubious swap contract arranged by Wall Street. A good deal of the work of Snyder’s “emergency managers” has been to obscure and prevent such an outcome, by directing the blame elsewhere (e.g. pensions), and keep revenue streams flowing to the banks. But if the national media were somehow (miraculously) to draw the connections, there could be strong public pressure for settlements and lawsuits of historic proportions.

The above facts raise the possibility that Clinton disconnected the crisis in Flint from its actual causes in a highly prominent television moment as part of an agenda to protect the interests of Wall Street.

Hillary Clinton has received 2.9 million dollars in speaking fees from speeches to financial institutions between 2013 and 2015. She has many other connections, and is the recipient of much campaign support from them. These facts lead her to be less critical about these institutions and their practices, to minimize their harms, including the influence of their lobbying on politicians. And isn’t that exactly the problem Sanders’s reformist agenda seeks to address?

“The billionaire class” directs vast flows of cash at our politicians. We have seen strong evidence that is has influenced Clinton’s recent rhetorical strategy, whose purpose after all is to minimize concerns about the influence of “the billionaire class”. The very campaign strategy she has taken is in fact its own best self-refutation.

Stanley jacketJason Stanley is the Jacob Urowsky Professor of Philosophy at Yale University. Most recently, he is the author of How Propaganda Works. Read more on his website, here.

Philosopher Jason Stanley on Donald Trump and mass incarceration

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Donald Trump and Mass Incarceration

by Jason Stanley

Donald Trump’s support is in large part due to the fact that he gives explicit voice to ideologies that are outside the bounds of public respectability. It is natural to think that the problem then is not Trump, but rather the prevalence of these ideologies. Indeed, you might think that in some sense Donald Trump couldn’t be the problem. A candidate giving voice to such ideologies would only attract support to the extent to which those ideologies have underlying support. If so, much of the criticism that has been directed at Trump’s candidacy is misguided. Perhaps we should even be grateful to Trump for making explicit what is so often present yet hypocritically denied.

And yet it is a powerful thought that the very mark of a demagogue is precisely their willingness to exploit the ideological spaces left firmly outside the sphere of “respectable” public discourse. Hannah Arendt writes:

…the spokesmen for totalitarian movements possessed an unerring instinct for anything that ordinary party propaganda or public opinion did not care or dare to touch. Everything hidden, everything passed over in silence, became of major significance, regardless of its own intrinsic importance. The mob really believed that truth was whatever respectable society had hypocritically passed over.[1]

Arendt is quite clear that Trump’s campaign strategy is the favored choice of democracy’s worst enemies. But she does not explain how giving public voice to disreputable ideology is a greater threat to democracy than the fact of its existence.

The prevalence of xenophobia, Islamophobia, racism, and commitment to harsh retributive justice is undeniably a problem that is independent of Donald Trump. But Trump’s political strategy poses an additional threat to democratic practice. Even when fundamentally illiberal ideologies are publicly repudiated, they serve as barriers to fair democratic deliberation, as politicians appeal to them with the use of coded language (“inner city”, “welfare”). As long as the public ethos against them remains firmly in place, there is a strategy to combat coded appeals to illiberal ideologies, colloquially known as “calling it out”. But Trump is not denying he holds these ideologies; he rather advertises it. In so doing, he legitimizes these ideologies in the public domain. When illiberal ideologies are rendered legitimate, it is no longer clear what strategy to employ to combat them.

In a healthy democracy, democratic deliberation is guided by a norm of impartiality, in the sense that policy makers at least take themselves to be responsible to such a norm, others take them to be responsible to this norm, etc. In political philosophy, there are disputes about which notions of impartiality should be at the basis of liberal democracy. The most important aspect of impartiality is what has come to be known as reasonableness. To be reasonable in one’s conduct towards others is a matter of being open to these other perspectives.

The norm of reasonableness has a long history in democratic political thought. The most well-known contemporary formulation is due to John Rawls:

Persons are reasonable in one basic aspect when, among equals say, they are ready to propose principles and standards as fair terms of cooperation and to abide by them willingly, given the assurance that others will likewise do so. Those norms they view as reasonable for everyone to accept and therefore as justifiable to them; and they are ready to discuss the fair terms that others propose. (John Rawls, Political Liberalism, p. 49)

It could hardly be fair to expect some citizens to comply with a policy if it was devised without their perspectives in mind. Policy that is genuinely fair must come from deliberation that takes every reasonable perspective into account. The stability of democracy as a system therefore depends upon a citizenry who are not sealed off from the perspectives of their reasonable co-citizens by fear, panic, or hatred. A general belief that Jews are out to deceive will undermine reasonable public discourse, as it will lead citizens to discount the actual perspective of their Jewish co-citizens in forming policy. It would be no surprise to discover in such a society policies unfair to Jewish citizens.

Problematic ideological divisions do not immediately disappear in a society even when wars are fought to overcome them. But in the presence of a public ethos that repudiates them, it becomes unacceptable to endorse them in public. As Tali Mendelberg has brilliantly described, this does not mean that the problematic ideological fissures become politically neutralized. It rather means that politicians who seek to exploit them must do so in a way that does not undermine the public’s view of them as reasonable public servants. This dialectic, applied to the ideological fissure of racism in the United States, is aptly reflected in a 1981 interview with Lee Atwater, later to lead George H.W. Bush’s 1988 presidential campaign, with the notorious Willie Horton ad:

You start out in 1954 by saying, “Nigger, nigger, nigger.” By 1968 you can’t say “nigger”—that hurts you, backfires. So you say stuff like, uh, forced busing, states’ rights, and all that stuff, and you’re getting so abstract. Now, you’re talking about cutting taxes, and all these things you’re talking about are totally economic things and a byproduct of them is, blacks get hurt worse than whites.… “We want to cut this,” is much more abstract than even the busing thing, uh, and a hell of a lot more abstract than “Nigger, nigger.”

When a politician uses language that explicitly represents a group in negative terms, it undercuts the social norm that keeps such ideological fissures part of the private sphere. Since it is assumed that legitimate public discourse is guided by a norm of reasonableness, it gives an aura of reasonableness to the description of Muslims as terrorists, Mexican immigrants as “rapists”, or climate science as “bullshit”.

Certain ideologies subordinate by targeting a group, and representing the perspectives of its members as unworthy of consideration in the formation of policy. In the extreme case, such ideologies dehumanize its targets. When ideologies that subordinate or dehumanize a group are legitimated in public debate about policies governing members of that group, democratic deliberation about policy is placed into crisis. We can see this process quite clearly at work by considering the effects of public discourse about US criminal justice practices from the late 1980s through the 1990s.

Violent crime declined continuously and steeply throughout the 1990s, beginning in 1991. But the debate about criminal justice policy and practice during this time was ideologically removed from this reality. Criminal justice policy had become a proving ground for politicians to demonstrate their perceived toughness. Debate was infused by an ethos that frowned on expressions of empathy for perpetrators. Dehumanizing vocabulary targeting those caught up in the criminal justice system was commonplace, and many of the words were racially coded (“super predator”, “thug”, “gang member”, though not “sex offender”). Rehabilitation is hard to envisage for those described as “thugs”, “super predators”, or “gangsters”. These are words that describe persons whose characters are resistant to any such method. Criminal justice practices became harshly retributive as a consequence.

Though the precise mechanisms continue to be a matter of debate, it is widely agreed that the culture surrounding crime policy had an effect on criminal justice practices that was both rapid and extreme. The U.S. Incarceration rate hovered around the norm for liberal democracies of 100 per 100,000 for many decades until the late 1970s. Then it started to rise; the current rate of 756 per 100,000 in prison or jail is by far the highest in the world. The United States has also developed a culture of policing marked by a level of fear and lack of empathy that is without parallel in liberal democracies (a 2015 headline of an article in the Guardian states “By the Numbers: US Police Kill More in Days than Other Countries do in Years”). Nor is the unprecedented decrease in crime since 1991 tightly connected to the intensely punitive criminal justice path the United States chose to take in the 1990s. Canada has experienced a similarly unprecedented drop in crime during this same time period, without following the US path into mass incarceration.

The harshly punitive criminal justice practices that emerged from the American public culture of the 1990s have harmed the United States morally and fiscally, as well as its standing in the world. Rhetoric in the public sphere that describes immigrants as “rapists” and “terrorists” can be expected to have a similar effect on immigration policy. And since Trump uses all opportunity for political debate as a means to signal toughness, the realization of the electoral power of his political strategy poses a broad challenge to democratic practices.

Let us return to the comparison between a political climate in which politicians must cleverly conceal an appeal to (say) racism so it is noticed only by fellow racists, on the one hand, and one in which politicians feel free to loudly proclaim it, on the other. A plausible moral to take from the politics of criminal justice policy and practice in the United Slates in the late 1980s and 1990s is that there is a significant additional policy cost in the latter climate. Politicians signaled their toughness to voters by flaunting their lack of empathy for those accused of crimes. The criminal justice practices that grew out of this were harshly cruel and socially and economically destructive.

American politicians typically avoid rhetorical strategies that explicitly dehumanize even widely disparaged groups. In the 1980s and 1990s, this mechanism of protection evaporated in the debate surrounding criminal justice. American politicians eagerly trolled for votes by employing incendiary rhetoric to describe criminal offenders. The result is the current crisis.

Trump’s candidacy is focused on policy debates whose structure parallels that of the criminal justice debate, where there is a clear “friend/enemy” distinction exploitable for political gain, such as immigration and terrorism. His rhetoric emulates the dehumanizing tropes of the late 1980s and 1990s criminal justice debate. This is no accident, as Trump developed this rhetorical style during these very debates. Indeed, any history of the rhetorical excesses of that debate must include the full page advertisement Donald Trump published in several New York city newspapers in 1989, during the trial of the Central Park Five, the five teenagers on trial for the brutal rape of a jogger in Central Park, entitled BRING BACK THE DEATH PENALTY BRING BACK OUR POLICE”. It said the “crazed misfits” causing crime in city streets “should be forced to suffer, and when they kill, should be executed for their crimes” (the teenagers were later discovered to be innocent). In the current campaign, criminal justice is again central. Trump urges the country, in language evoking that previous era, “we have to get a lot tougher on crime.” One of this signature campaign issues is broadening the use of the death penalty. His “tough on crime” rhetoric has already been credited with threatening to undermine the bipartisan consensus that there is a crisis of incarceration.

Trump is also increasingly experimenting with the most extreme dehumanizing representations, ones that have pre-genocidal associations. His first national advertisement, released this week, showed Mexican immigrants as insects scurrying and scattering like an infestation. It would be nice to dismiss such representations as unlikely to affect public debate. History suggests that this is wishful thinking. The representation of targeted groups as insects or vermin is a theme in Nazi propaganda about Jews; in the buildup to the Rwandan genocide, Hutu ethnic radio pride radio stations began calling Tutsi, “inyenzi”, meaning “cockroach”. Recent US history with the criminal justice debate suggests we may even be particularly vulnerable.

In the late 1980s and throughout the 1990s, politicians across the political spectrum seemed to tacitly agree that reasonable criminal justice policy would have to be sacrificed for electoral expediency. Debate about criminal justice became a way of appealing to the worst appeals to fear and voters’ desire for revenge, without fear of social sanction by the media or the public. Democrats could freely use it to enact the flawed masculine ideal of a complete lack of empathy. The case of US criminal justice policy shows that when democratic deliberation breaks down in this way, it is not just the democratic process that is lost. Trump’s campaign promises to broaden this to every policy debate. Its success is already leading to broader emulation. More than just our democracy is in peril.

[1] Hannah Arendt, The Origins of Totalitarianism (Harcourt Brace and Company: San Diego, 1973), p. 351.

Stanley jacketJason Stanley is the Jacob Urowsky Professor of Philosophy at Yale University. Most recently, he is the author of How Propaganda Works. Read more on his website, here.

Jason Stanley discusses democracy and demagogues in The New York Times

stanley jacketJason Stanley, author of How Propaganda Works, had a popular op ed in the New York Times this weekend on democracy and demagogues, containing references to both Plato and Trump.

On Trump’s well known comments on Mexican immigrants and Ben Carson’s recent claim that he “would not advocate that we put a Muslim in charge of this nation”, Stanley writes in the NYT:

Liberal democratic rhetoric is supposed to unify citizens with diverse perspectives and backgrounds, and make visible previously discounted perspectives (for example, the perspective of women during the struggle for women’s right to vote). Trump’s and Carson’s comments are explicitly antidemocratic. The fact that they seem to have been rewarded — at least in immediate improvements in poll standings — confronts defenders of the American political system with two questions. There once was a facade of equal respect that required political strategists to use code words to avoid accusations of violating it. What has caused it to crack? And what are the risks for our democracy?

According to Stanley, two of the causes are the need to court donors, and the fact that politicians feel compelled to appeal to voters who don’t share democratic values. Read the rest of the piece here and the introduction to How Propaganda Works, his acclaimed examination of how propaganda undermines democracy and particularly the ideal of equality, here.

Jason Stanley is professor of philosophy at Yale University. He is the author of Knowledge and Practical Interests, Language in Context, and Know How.