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The YOYO Handcuffs

by Jared Bernstein Tue Jun 6th, 2006 at 08:07:19 PM EST

Here's a test: name one economic policy, other than tax cuts, associated with outgoing Treasury Secretary John Snow.

Give up?

Now think about this: what is the economic policy of the Bush administration? What about the Congress? What about the Democrats?


If all you could come up is that the first two aforementioned groups want to cut rich people's taxes, I'm with you. Beyond that, none of the above has offered a coherent strategy for meeting America's economic challenges.

And these problems are prodigious: global economic competition; 46 million people lacking health insurance; the seemingly inexorable climb of inequality; obscene CEO compensation packages totally unrelated to performance; an economy that's doing fine, until you consider the people in it.

Each of these problems needs concerted thought and action. But while the administration's new nominee for Treasury Secretary, Henry Paulson, is certainly an able economist, he will likely be as ineffectual as was Secretary Snow.

There's a reason why the nation's economic policymakers are suffering from a deficit of ideas: It's YOYO economics.

YOYO is an acronym for "You're on your own," and it is the guiding light of economic policy as practiced today. The idea is that no matter what the problem is, the solution is less government and more markets.  You've seen many examples of YOYOism in action, but here's a primer:

Problem: The looming health care crisis.

YOYO solution: individualized Health Savings Accounts, designed to create better "health care shoppers."

Problem: The economic insecurity associated with globalization.

YOYO solution: more education. If you're not smart enough to compete with cheaper, skilled workers abroad, well, "you're on your own."

Problem: Solvency in your old age.

YOYO solution: Try your hand in the stock market with a private account.

And underlying all of this is the biggest YOYO tactic of all: cut taxes to the point where government is forced to contract so there's no question of an activist agenda. If you can enrich your donors along the way...well, then it's a "twofer."

The problem is, as is becoming undeniably clear, YOYOism doesn't work. It failed lethally in New Orleans. It's done nothing to stop the growth of the uninsured, the rise in poverty, the decline in median earnings (i.e., the real earnings of the typical worker, down 2% over the recovery, while productivity is up 15%), nor the rise in the profit share of national income, now at a 39-year high.  The public rejected it with the failure of the Bush-push to privatize Social Security, and now the polls show deep dissatisfaction with the president's management of the economy.

There's a countervailing message rising out of the anxiety generated by the new economy:

"Policy makers, work with us. We're in this together. Rebuild a government that we can believe in, and we will do so. Conceive and articulate an agenda that harnesses the tremendous capacity, skill, and flexibility of our economy to meet the challenges. Instead of creating 300 million individual risk-bearing silos, let's pool risk though universal health insurance coverage and a strengthened pension system. Let's build an ambitious public/private partnership with the goal of energy independence to replace the jobs and wages lost to globalization."

You have to strain to hear this message, but it's there. It is, however, in desperate need of amplification. The new treasury secretary can't help--his hands are tied by YOYO ideology. So the question is: who will step up and amplify this liberating message?

 

Display:
and I heartily recommend his new book All Together Now. Jared combines progressive core values with common sense solutions.

Intrepid Liberal Journal
by Intrepid Liberal Journal on Tue Jun 6th, 2006 at 08:49:46 PM EST
by breakingranks (manifestdignity@breakingranks.net) on Tue Jun 6th, 2006 at 09:59:09 PM EST
[ Parent ]
Thirded - though dont say it with a NJ accent ;-)

You can't be me, I'm taken
by Sven Triloqvist on Wed Jun 7th, 2006 at 03:39:05 AM EST
[ Parent ]
The noyoyo message should be brought to prominence. It's a good soundbite and simply and efficiently defines the argument.

'We're all in this together WAITT versus YOYO. It is not just American politics that needs to see this - but the entire planet, inclusive of non-humans.

You can't be me, I'm taken

by Sven Triloqvist on Wed Jun 7th, 2006 at 03:44:47 AM EST
Much more YOYO and it'll be WAITS :

We're All In The Shit.

by afew (afew(a in a circle)eurotrib_dot_com) on Wed Jun 7th, 2006 at 08:31:40 AM EST
[ Parent ]
who will step up and amplify this liberating message?

...with an energy banker currently underway to Las Vegas, scheduled to address a large audience and most likely several members of the US Senate. Add in several other knowledgeable people floating about and team up to become Extraordinary Economics or the X-onomics.

I can dream...

by Nomad on Wed Jun 7th, 2006 at 11:21:47 AM EST

 "So the question is: who will step up and amplify this liberating message?"

 Okay, I'll bite. In your opinion, then, who shall do that?

 I'm rather flattered that you'd ask this group of us to help on answering that question.

 A major problem, as I see it, is this: let's say we think on a scale of grand success and that some 63% to 66% of the American public--the public to which your case is to be made--hear and approve of it rather enthusiastically.

 Question: what then?

 It's now the case that only some 34% of the American public has a generally favorable view of the Bush administration.  That implies that some 66% don't have that favorable view.  And yet, in the face of that, Mr. Bush was nonetheless able to see his most recent tax-cut package passed in one or both houses of Congress--I must confess that I haven't read which one or if it was in both.  But the point remains that despite a whopping lack of general approval for his administration, the Congress obviously feels free to give its assent in approving such a tax program--again.

 That suggests to me two things: one, that under the prevailing circumstances, our national government's office-holders do not regard themselves as having to heed the wishes of the ordinary public and, going further in that vein, two, that this speaks of a now-critical disconnection between those who have effective influence on people in elective and appointive office and those who do not.  I fall into the latter category.

 As your biographical profile indicates,


Jared Bernstein is a senior economist and director of the Living Standards Program at the Economic Policy Institute in Washington, DC. He is the coauthor of the last seven editions of The State of Working America as well as The Benefits of Full Employment: When Markets Work for People. He writes a regular column for the American Prospect online, and his op-eds have appeared in the New York Times and the Washington Post.

 your book, The State of Working America is in its seventh edition and you write for prestigious publications as well as holding a columnist's spot at the American Prospect online.

 Such exposure and such privileged speaking platforms as yours leave those available to us here pale in contrast.

 You can do what I and perhaps most of the others here cannot: directly reach a host of influential people.  I don't mean to over-estimate the influence of the Economic Policy Institute in Washington, DC., but its hard for me to imagine its senior economists as having no better influence on public opinion than mine.

 There is, then, I suspect, something, many things, systemically wrong if your place and your work still leave you looking to sites such as this for amplification of your message.

 I cannot directly speak to my congresswoman, or to my Senators--Feingold and Kohl.  I can call their offices, but I could never get one of them on the phone.  At best, I can leave a message with a staff aide.  I've done this.  Moreover, among them, Senator Feingold, at least, is almost certainly sympathetic to your case.  Thus, I imagine him already doing what he can to further it.

 Suppose then, that what I fear may be true, is true.  Suppose the problem is so large, so systemic, that it is not amenable to our combined efforts-- our posts here, our calls and messages left with our congressmen and women, your books, papers, columns in the press and online.  Suppose that with all of these we find that

 1) ordinary Americans are simply tuned out and not reading and listening to the sources through which your message is diffused and

 2) that the public is rather ill-equipped to grasp and respond effectively to your case, even were it attentive and

 3) that the present arrangement of political power is such that even if the public did listen, understand and react, there is no reason why government officialdom is obliged to pay them any more than placating attention ?

  Or, to put it other words, suppose that in order to bring the sort of change you seek, people such as you, in places of influence such as you hold, find their own places and prerogatives put into question and into risk?

 What then?  I gather you could adopt a much more militant position; you could rock the boat in which you find yourself much more vigorously.  What if that were necessary?

 Or, as your own question puts it:

 " Who will step up and amplify this liberating message?"

And who shall do that if doing so implies some risk to his place and his privileges?

 _ There are_, as it happens, many people calling for the sort of fair society you advocate; it's just that so very, very few of them are in a position to make any effective difference about it.

 My question to you is, "Why do you suppose that is?"

"In such an environment it is not surprising that the ills of technology should seem curable only through the application of more technology..." John W Aldridge

by proximity1 on Wed Jun 7th, 2006 at 11:27:44 AM EST
proximity, you are starting to sound like me...

Policies not Politics
---- Daily Landscape
by rdf (robert.feinman@gmail.com) on Wed Jun 7th, 2006 at 02:38:24 PM EST
[ Parent ]

  to quote George Costanza,

 "Is that wrong?"

  Proud to "sound like [you]", rdf.

  But time to log off and walk around.

 ;^)

"In such an environment it is not surprising that the ills of technology should seem curable only through the application of more technology..." John W Aldridge

by proximity1 on Wed Jun 7th, 2006 at 03:11:40 PM EST
[ Parent ]
The insightful comments by proximity1 should probably form the theme of my next book.

The process of change is many-faceted.  It comes from the top, from the bottom-up, and from force five hurricanes destroying levees.  It comes from tragic national disasters, like the Great Depression and 9/11.  And it comes from quiet intellectual developments, like a shift in the teaching and practice of economics, which, in the shift from Keynesian-based full employment economics to individualized, incentive-based economics, created an launching point for YOYO.

I'm fortunate to have some amplification to my voice, but it exists in a context formed by all of the above.  Too often, views of people like myself become the "she said" in a "he-said/she said" discussion.

Voices like yours and those of others on the blogosphere are hopefully helping to change the context so that the voices of those of us with the microphones can be heard and acted upon.  

http://www.noyoyoeconomics.com

by Jared Bernstein on Wed Jun 7th, 2006 at 03:36:12 PM EST
[ Parent ]
 One other comment regarding your remark,


"The process of change is many-faceted.  It comes from the top, from the bottom-up, and from force five hurricanes destroying levees.  It comes from tragic national disasters, like the Great Depression and 9/11.  And it comes from quiet intellectual developments, like a shift in the teaching and practice of economics, which, in the shift from Keynesian-based full employment economics to individualized, incentive-based economics, created an launching point for YOYO."

 is simply this:

if "The process of change" must depend, in addition to other things, upon "force five hurricanes destroying levees," or " ...tragic national disasters, like the Great Depression and 9/11", then that means nothing less than that the intended processes of representative government in any which deserves the name "democratic" do not work.

While it is hardly disputable that such things as hurricanes and other natural or man-made disasters do indeed figure in the elements which prompt long-needed, long-recognized and long-demanded political changes, it is no less a disgrace for that for being so.

 If ever the general public should come to grasp that view and take it as their own, what would happen then?

 I cannot look passively or favorably on the idea that hurricanes --with the man-made disasters included in Katrina--or economic collapse such as the Great Crash of 1929 or the attacks of September, 2001, or the repeat of any of these, are simply part of the accepted and acceptable process of legislative attention-getting.


"In such an environment it is not surprising that the ills of technology should seem curable only through the application of more technology..." John W Aldridge

by proximity1 on Wed Jun 7th, 2006 at 04:34:02 PM EST
[ Parent ]
 "The insightful comments by proximity1 should probably form the theme of my next book."

 ;^)

 My rates are very reasonable--even if my commentary isn't. I know a sure-buyer of that text, too.  The fact is, it's very rare to have the opportunity to reach a person in policy-making.

 If you brought to even a handful of your colleagues and other influential Washington actors the depth of the feeling among the some parts of the public that there is now a virtually total disconnect between policy-makers and their peers--very much including the press, which is no longer the public's eyes and ears--on the one hand, and "the rest of us", on the other, I think you'd be doing a rare and a fine public service.  If, as is perhaps the case, you see yourself as fully a part of "the rest of us", then so much the better!

  In truth, there should be more Washington people of influence reading and writing in blogs such as this one, many more.

  If I were an elected official of however so exalted a rank, I'd insist on answering the office telephone for a minimum of one hour per day--and damn the cost to other demands on my time.  One hour per day, I'd take the calls and listen myself to my constituents'  views.  Doesn't seem to me a great deal to expect.

"In such an environment it is not surprising that the ills of technology should seem curable only through the application of more technology..." John W Aldridge

by proximity1 on Wed Jun 7th, 2006 at 03:57:04 PM EST
I just wanted to applaud your idea of our political representatives actually taking an hour a day to listen to their constituents. (And not just "influential" constituents and "somebodies" - the regular people they are supposed to be representing). Just say no to rankism.

Manifest Dignity!
by breakingranks (manifestdignity@breakingranks.net) on Wed Jun 7th, 2006 at 06:18:37 PM EST
[ Parent ]
 Jared,

 The following excerpt, taken from Europe, la trahison des élites ( [expanded edition], (c) 2005, Fayard, Paris), sums up as well as any I have so far seen the basics of a contrasting general viewpoint regarding individual versus societal rights and obligations which distinguishes so many Americans from so many Europeans---


" If there is a European model, it is not the one  which the Brussels Commission's technocrats are imposing; it's the one which, with their heart, with their hands, with their blood, the people have obtained by tearing from its witholders the rights which others today would have offered to sell to them on the market.  Nothing was given, everything had to be conquered in order that certain European countries might evolve little by little and on public authority a triple role: regulator, redistributor and actor."

   "The idea according to which people have not only individual rights ( liberty of opinion, freedom of expression, of assembly, of the press, of worship...) but equally rights which are held collectively (the right to health-care, education, to culture, to employment, to housing, to social security...) was born in Europe.  The "European model" thus became, especially after World War II, the most powerful expression of a concept of the state as guarantor of a democracy tends toward a real equality of opportunity for everyone."

"This willingness to go beyond the formal aspects of democracy and to give to it a substance is expressed through the elaboration of underwritten policies, guaranteed, or even managed by public authorities: guaranteed minimum salary, maximum weekly working-hours limits, unemployment compensation, family financial aid, old age and disability insurance coverage, retirement pensions, minimum guaranteed subsistence allowances, etc. These policies have entailed the existence of union and cooperative organizations; they have incited a regular interaction among the what are called the workplace partnership [employee, management, union]; they've led, finally, to public authorities working with a network of institutions and private associations in the service of everyone and supported by the public authorities under the category of non-market services."

" Such is, with variations from one country to another of Old Europe, the "European model".  It is certainly subject to improvement, but it represents to date the strongest advance in reconciling freedom and social responsibility and in the reinforcement of democracy, in refusing to limit the latter to electoral ritual and to a few constitutional principles, be they ever so important.  In several European countries, two centuries of trial, sacrifice and tenacity have shown that it is possible to go beyond every man for himself and to bring some harmony to individual liberties and the general interest.  If there is a European project worthy of the name, it is that."

"The alternative is the American model where, in the name of the absolute primacy of freedom, the individual takes first place, where "every man for himself" is the common rule, where private charity takes the place of the public recognition of rights vindicated by public services and compensates as well as it is able for the refusal of that public role, where the civil law affords only to those with the means to pay for it the opportunity to see wrongs recognized and sanctioned, where the minimum-government is powerful only in the domain of armed force, the apparatus of repression, and in the sectors where it may support private firms of the like."

 "You're On Your Own" describes not only a set of convenient (convenient for the interests it so well serves) economic imperatives, it also describes an entire ethos subscribed to as if by birth-right by many, many Americans who've had this ingrained in them by school, church, associations, public and private authorities, popular culture.  You're aware of that, of course.

 But countering it is a task of proportions comparable to the means by which Americans are imbued with this ethos.  Imagine a nation of Americans who believe by second-nature, the converse, that they are not on their own, that they are part of a larger social community with commonly held and commonly vindicated rights, and you have an image of the proportion of the change that is required.

 Whether there remains the time to bring about such a reversal of assumptions about their roles and common inter-responsibilities before  the onset of too many natural events forces upon them under urgent and imperative conditions a survival-based cooperation, I can't say.  But it seems to me that it must be one, the other, or some combination of both of these-- patient effort and nature-driven necessity--which prompts this sort of reconsideration.

I've raised already in this forum the interesting matter of how it happens that, somehow, a nation such as the United States can successfully instill any such ethos as that of "You're on your own", generation after generation, and yet not devise a means to similarly instill other chosen and very different habits of thought and action, much, much more socially useful.

 The most entrenched and traditional of socializing agents--school, church, workplace--apart from the family itself, are rather opposed to such reversal of "YoYo", I'd imagine.

Americans define themselves as self-reliant and independent; your project seeks their redefining themselves as members of a socially interrelated and commonly-bound collectivity.  This suggests not a self-conscious and planned development but more a process of organic growth through processes which arrive by their own time and means.


"In such an environment it is not surprising that the ills of technology should seem curable only through the application of more technology..." John W Aldridge

by proximity1 on Tue Jun 13th, 2006 at 04:01:29 PM EST
 I want to add this thought which occurred to me after posting the above--

  there is another approach which is possible in theory but which suffers great difficulties in practicability; that is, that government agencies themselves could do again what F. D. Roosevelt did in putting in place a range of programs which demonstrate in practice that people are not, after all, on their own in face of life's pitfalls.

 If that approach were taken, it would have its practical effects just as does the fact that these programs, not being in place, "teaches" people not to expect or depend on them.

  This rather more direct and less didactic approach enjoys the advantage of requiring a far less holistic change in thinking.  It's then the administrators of government whose viewpoint must be addressed and not those of millions of ordinary Americans.

  This is the "if-you-build-it,-they-will-come approach.  Franklin Roosevelt resorted to it out of dire necessity.

 We can always of course wait for a similar such Great Depression-like national catastrophe for that necessity to become apparent to the apparatchiks.

 But, as they are the "best and the brightest", I don't see why they should not be amenable to recognizing the benefits in advance of such a general catastrophe.

"In such an environment it is not surprising that the ills of technology should seem curable only through the application of more technology..." John W Aldridge

by proximity1 on Wed Jun 14th, 2006 at 08:34:00 AM EST
How did FDR get away with the New Deal in the first place anyway? It seems so... unamerican :-/

A society committed to the notion that government is always bad will have bad government. And it doesn't have to be that way. — Paul Krugman
by Migeru (migeru at eurotrib dot com) on Wed Jun 14th, 2006 at 08:36:46 AM EST
[ Parent ]
 Franklin Roosevelt's life and his administrations are two things I wish I'd read much more about before now.  What little I know about him has come incidentally through related histories and biographies.

 There are, anyway, some important differences I can mention.  FDR had the enormous motivator of the Great Depression, the vast numbers of unemployed who were obviously unemployed through no fault of their own.

 The Congressional elections of 1932 gave the Democrats a 196-seat majority-- 96 of them added by that election!  


 "From March 9 to June 16, 1933, Franklin D. Roosevelt sent Congress a record number of bills, all of which passed easily. To propose programs, Roosevelt relied on leading Senators such as George Norris, Robert F. Wagner and Hugo Black, as well as his own Brain Trust of academic advisers. Like Hoover, he saw the Depression as partly a matter of confidence, caused in part by people no longer spending or investing because they were afraid to do so. He therefore set out to restore confidence through a series of dramatic gestures."

The New Deal

Interesting thing about Roosevelt--he apparently really cared very much about the lot of ordinary people.  Perhaps their recognition of that was a large part of the reason so many felt such affection for him--though, of course, not everyone did.

Consider, by contrast, recent leadership in the House and White House.  Newt Gingrich and John Tower both went from university teaching into politics, while Tom DeLay was the owner of a pest-control business in the outskirts of Houston.  All of them were avowed enemies of government as they thought of it--"big government".  Unlike Roosevelt, they didn't see the government as the necessary partner of the people, and the defender of last resort when private interests failed the poor and middle class.  Yet Tower, Gingrich and DeLay were all once part of the middle class, while Roosevelt was not.  Tower, Gingrich and DeLay--as with so many others of their peers--showed little or no sign of any sense of direct responsibility for representing average people who depended on government for things that they could not supply for themselves.
It's just that sense of responsibility to the average public which Roosevelt acted upon at least part of the time.

 Where is it today?  Not with the Republicans, certainly; and not with the Democrats, either.

"In such an environment it is not surprising that the ills of technology should seem curable only through the application of more technology..." John W Aldridge

by proximity1 on Thu Jun 15th, 2006 at 08:46:07 AM EST
[ Parent ]


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