Monday, January 5, 2009

Daydreams of Prosperity

All men dream, but not equally. Those who dream by night in the dusty recesses of their minds, wake in the day to find that it was vanity: but the dreamers of the day are dangerous men, for they may act on their dreams with open eyes, to make them possible.
-- Lawrence of Arabia
In This Week's Sift:
  • What's Really Stimulating? The outline of Obama's stimulus package is coming out, with more tax cuts than anyone expected. Whether that's good or bad, it says something about his political approach.
  • The Next Time You're in the Book Store ... look at Whatever It Takes by Paul Tough. Geoffrey Canada wants to turn one Harlem neighborhood into an example that will permanently change the debate about education and poverty.
  • Three Democratic Senate Votes Off the Table. What's going on with the Minnesota, Illinois, and New York senate seats?
  • Short Notes. Robin Hood meets Mission Impossible. Has Alberto Gonzales gotten his memory back? Slate's top political videos of 2008. The Golden Dukes spotlight the year's corrupt elite. And more.

What's Really Stimulating?
Obama's stimulus package is starting to take shape, and with it the kind of politics he's planning to practice. Apparently, he really is planning to govern from the center. So the stimulus package will provide an early test of Republican intentions: Is bipartisanship possible or not?

Here's the outline: The stimulus will be a two-year proposal with a total cost in the neighborhood of $700 billion, split into $400 of spending and $300 of tax cuts. The tax cuts will be about $200 billion for individuals and $100 billion for businesses. In other words, almost half of the plan is what conservatives claim they want a stimulus to be: tax cuts.

This is worrying the heck out of a lot of liberals, who believe that Republicans will only see this proposal as a sign of weakness. Paul Krugman writes:
Look, Republicans are not going to come on board. Make 40% of the package tax cuts, they’ll demand 100%. Then they’ll start the thing about how you can’t cut taxes on people who don’t pay taxes (with only income taxes counting, of course) and demand that the plan focus on the affluent.
Maybe, maybe not. The plan is also going to be a test of how well Democrats can use their power to shape the public discussion. The Democratic leadership in Congress will determine which proposals come up for a vote, so Republicans could find themselves with the kind of choice that Democrats remember well: They're either for the bill being voted on, or they're for doing nothing.

In addition to sheer political power, Democrats have economic common sense on their side: Cutting taxes for the wealthy is the worst form of stimulus, because the wealthy are already buying what they want to buy. The Economic Policy Institute has crunched the numbers: Each dollar of an across-the-board tax cut yields $1.02 of stimulus, various cuts targeted at the wealthy yield a mere 30-38 cents, and a dollar of additional food stamps yields $1.73. (Numbers can be over $1 because each dollar gets passed on: By spending your food stamp money, you give the grocer more money to spend, and so on.)

So if Republicans try to block the plan, here's a possible Obama counter-message: "In spite of every attempt to compromise with them, Republicans are standing against this much-needed stimulus plan because they are holding out for a plan that won't create jobs, but will shovel more money towards their wealthy special interests."

But that leads to this question: If what the Republicans want won't work, why compromise with them at all? Isn't Obama compromising the country's interests for political reasons? Not exactly, for two reasons.

(1) Obama's tax cuts are going to be different than Bush's tax cuts. Bush cut taxes mainly for the wealthy, while Obama wants to focus them on people making less that $200,000 a year. (The ineffectiveness of Bush's tax cuts as a stimulus was a roundabout cause of the housing bubble. Responsibility for getting us out of the 2001 recession fell to the Fed, which had to cut interest rates almost to zero.) Obama's business tax cuts (according to the Wall Street Journal) would not be permanent cuts in the tax rates, but rather a temporary provision that would let businesses use current losses to offset past profits.

(2) The stimulus that the economy needs may be bigger than what the government can spend effectively. There are lots of bridges that need replacing, but that doesn't mean we have ready-to-go designs for replacing them all. Krugman again:
We need stimulus fast, and there’s a limited supply of “shovel-ready” projects that can be started soon enough to deliver an economic boost any time soon. ... [So] there’s a reasonable economic case for including a significant amount of tax cuts in the package, mainly in year one.
If Obama relies too much on infrastructure spending, he'll have to fund boondoggle projects just to get the numbers up. And nothing would undo public support for a New New Deal faster than egregious examples of "wasteful government spending".

Whenever the wasteful-government-spending meme raises its head, it will be worthwhile to point out how much of the New Deal turned out to be wise public investment. Rural electrification, for example. And the town where I grew up is still using the stadium the WPA built.

I don't often agree with Reagan economic advisor Martin Feldstein, but he's right about this: One non-wasteful stimulus is for the government to buy stuff now that it will have to buy eventually anyway. "Replacing the supplies that have been depleted by the military activity in Iraq and Afghanistan is a good example of something that might be postponed but that should instead be done quickly. The same is true for replacing the military equipment that has been subject to excessive wear and tear."

Another piece of Obama's plan is to help state and local governments, whose falling revenue is forcing them to cut spending at the worst possible time. Just when governments should be looking for ways to create new jobs, they have to lay off people who are already productively employed.

Over Christmas I was talking to my sister, who is a public school teacher in Tennessee. Her district is responding to a revenue shortfall by cutting back on teachers. (First the carrot of early retirement, with the threat of lay-offs later on.) There are also cut-backs at the state universities -- not because there are fewer students, or because Tennesseans have decided they don't really need college educations, but because Tennessee has to balance its budget. Similar things are happening all over the country, and federal aid can stop it.

The Next Time You're in the Book Store ...
... look at Whatever It Takes: Geoffrey Canada's Quest to Change Harlem and America by Paul Tough.

One way to guess what Obama will do is to look at the people he admires. One is Van Jones, whose book The Green Collar Economy I reviewed a couple Sifts ago. Another is Geoffrey Canada, who created and leads an ambitious collection of education and anti-poverty projects called the Harlem Children's Zone.

The HCZ comes from Canada's frustration with well-intentioned projects whose results are unclear. You do something that sounds good, like giving poor children pre-school training or homework help or a safe place to go after school, and you wind up with some anecdotes about kids that seemed to make progress for a while. But long-term, did you actually help them succeed in life? (Maybe, maybe not. Pre-school programs, for example, can bring disadvantaged kids up to average as they enter grade school. But the effect fades. They start falling back again as soon as the program ends.) If you did help a few specific kids, did you actually change the community statistics? The ambitious, attentive parents -- the ones whose kids were most likely to succeed without you -- are also the ones most likely to take advantage of whatever programs you offer.

So Canada picked one poor neighborhood in Harlem and launched a long-term project with a goal so audacious that there will be no doubt whether it succeeded or failed: He wants every child born in that neighborhood to graduate from college.

What's he going to do to make that happen? Whatever it takes.

The reason he can even imagine such a goal (in addition to having impressed some wealthy backers) is that he believes we're starting to understand the root disadvantage that poor children have, the disadvantage that creates those persistent IQ-score gaps between poor children and rich ones, and between blacks and whites. For years, conservatives (see The Bell Curve) have pointed to those gaps as evidence that Harlem's children are just inferior; they fail not because of racism or classism or social neglect, but because they just don't have talent. Liberals, on the other hand, haven't wanted to deal with those IQ gaps at all. The gaps are increasingly hard to explain away as testing bias. (Any testing service that could create a truly race-and-class neutral test would own the market, but they can't come up with one.) But calling any attention to them is "blaming the victim" and letting society off the hook.

Chapter 2 of Tough's book is a history of this debate about why people are poor, and about the failure of many well-intentioned efforts to help them. (Just giving them money, for example, makes them less poor as long as you keep giving it to them, but doesn't integrate them into the productive economy. Their kids grow up with no model of how to succeed.) Most of the chapter is depressing, but it ends with some fascinating recent research into how the brain develops and the difference in the typical home environments of poor children and professional-class children.
By age three, Hart and Risley concluded, welfare children would have heard 10 million words addressed to them, on average, and professional children would have heard more than 30 million. ... [T]he average professional child would hear about 500,000 encouragements and 80,000 discouragements. For welfare children, the ratio was reversed: they would hear, on average, about 80,000 encouragements and 200,000 discouragements. ... [T]he children from wealthy families were exposed to millions of extra words on top of [the necessities that all children heard], and those words tended to be more varied and rich. As conversation moved beyond simple instructions, it blossomed into discussions of the past and future, of feelings, of abstractions, of the way one thing causes another -- all of which stimulated intellectual development in a way that "Put that down" or "Finish your peas" never could.
What's more, these ideas about development are commonplace among professional-class parents, but virtually unknown in the ghetto. So to Canada, his first move is obvious: His people scour the Zone for expecting parents (because he wants everybody, not just the self-selected volunteers) and conjole them, bribe them, badger them, and solve whatever problems keep them from attending "Baby College" -- a series of classes that teach parents how to develop their children's brains and provide them with free enriching toys and books.

Then there's the pre-school program, which attempts to make up for language-poor home environments (and has a much easier job if Baby College reduces the number of language-poor home environments). But Canada knows that pre-school effects fade after the program ends -- so what if the program never ends? He starts a charter school.

The bulk of the book describes the first four years of the charter school, which he starts in two 100-student chunks: a kindergarten and a sixth-grade class, with the idea of expanding each chunk one grade a year. The two chunks inadvertently demonstrate the two models of social work: what Canada calls the "superhero" model, where one-by-one you try to save kids who are failing, and the "conveyor belt" model, where you create a system for general success. In Canada's head, he knows the conveyor belt is the right solution. But in his heart he's a superhero, and he can't offer nothing to the older kids who already have six years of bad habits.

After four years, the elementary school seems on its way to success. Last year, 70% of its third-graders scored at or above grade-level in the state's reading tests -- not quite wealthy-suburb numbers, but close -- and an amazing 95% are at or above grade level in math. And these are kids chosen by lottery from inner-city Harlem, not selected for their potential.

But the middle school has been a struggle. In particular, its test results (Canada insists on measuring things and taking the results seriously rather than justifying his program on anecdotal or intangible results) have suffered from the comparison with another Harlem charter school run according to the KIPP model. But the contrast between the two is interesting. KIPP is quick to throw out students who aren't with the program and fosters an elite attitude -- their students are the few who are going to get out of the ghetto. Canada is looking to change Harlem, not help a few kids escape it. The kids force him into becoming a disciplinarian, but the ultimate discipline -- expulsion -- is a place he doesn't want to go.

Probably Canada's middle school is doing some good, though it won't really take off until his elementary-school kids get there. But ultimately, if he completes his conveyor belt and his third-graders get into good colleges just like the kids in Beverly Hills, Canada will have permanently changed the debate about poverty in America. People will continue to argue about what is most effective and how much we want to spend, but no one will be able to say that there's nothing we can do.

Last month Canada showed up on Stephen Colbert's show.

Three Democratic Senate Votes Off the Table
Obama's stimulus package is going to need every vote it can get in the Senate, but at least three seats are remaining unfilled: Minnesota's, Illinois', and New York's.

In Minnesota, Democrat Al Franken has won the recount. Back when the initial election-night returns showed him with a narrow lead, Republican Norm Coleman urged Franken to waive the automatic recount called for by Minnesota law, saying:
I would step back. I just think the need for the healing process is so important.
So, is Coleman "stepping back" now that the shoe is on the other foot? Don't be silly. Coleman's lawyer says:
We are prepared to go forward and take whatever legal action is necessary to remedy this artificial lead.
The Republicans in the Senate can keep Franken from taking his seat during the court challenges, if they unite in a filibuster. Harry Reid is starting to apply pressure in the opposite direction: "I would hope now that it is clear he lost, that Senator Coleman follow his own advice and not subject the people of Minnesota to a costly legal battle."

In Illinois, Democrats are shooting themselves in the foot for bad reasons. Yes, everyone wishes Governor Blagojevitch would just go away and let his successor name Obama's replacement in the Senate, but there is a legal reality here: Unless and until the legislature impeaches him, Blagojevitch is still governor, and the 17th amendment gives governors the right to fill empty senate seats until the legislature authorizes a special election. He named Roland Burris, a former state attorney general who isn't an obviously bad choice.

The Senate should let Burris take his seat. The whole situation looks bad, but sometimes the law forces you to do things you'd rather not do. We've just had eight years of an administration that interpreted the law to suit its own desires, and that kind of thinking needs to stop.

In New York, nothing is stopping Governor Patterson from naming somebody to fill Hillary Clinton's seat, and presumably he will soon. On both sides, the controversey over whether he should appoint Caroline Kennedy seems over-blown. There's a long history of sentimental appointments to keep seats warm until an election -- widows replacing their deceased husbands, for example -- and it's never been this big a deal before. Particulary ridiculous are the comparisons between Kennedy and Sarah Palin. By herself, a junior senator can do remarkably little harm, but Palin would have been in line for the presidency.

Short Notes
The most subversive TV show I've seen in a while is TNT's Leverage. (Windows users can watch episodes online. Otherwise it's on Tuesdays at 10.) It's an entertaining mix of Robin Hood and Mission Impossible. The premise: Corporations so dominate our system that sometimes you have to break the law to get justice. So the Leverage Group's "partners" are high-tech thieves and its "clients" are ordinary people who have been screwed by corporations. Each episode is an elaborate operation that sets something right. Along the way you usually learn something about actual corporate wrong-doing. (The group's professional criminals are often appalled by what legitimate businesspeople get away with.) But the clients pay nothing. "Our business model is based on an alternate revenue stream," explains the group's leader (played by oscar-winner Timothy Hutton).

Alberto Gonzales is writing a book "to set the record straight." I wonder if he has remembered all the things he couldn't remember when Congress started asking questions. Meanwhile, if I were Gonzales I'd be quietly urging Dick Cheney to shut-the-bleep-up before we all wind up in front of a war crimes tribunal.

Juan Cole speculates that the Bush administration's persistent lies about Iraq have made Americans more skeptical about Israel's claims in Gaza.
Yeah, Christmas really was that bad.

TPM has announced the 2008 Golden Duke Awards, presented each year "in recognition great accomplishments in muckiness including acts of venal corruption, outstanding self-inflicted losses of dignity, crimes against the republic, bribery, exposed hypocrisy and generally
malevolent governance."

Slate counts down 2008's top 20 political video moments.

If you're upset that Rick Warren is doing the invocation at Obama's inauguration, imagine how God feels.
The NYT has a depressing report on the state of corruption in Afghanistan. In 2008, 155 Americans died defending this Afghan government -- breaking 2007's record 117.

Harper's Index looks back at the Bush years. Number of signing statements: 1069. Appointees regulating industries they used to lobby for: at least 98.

Here's the extent to which the Republicans still don't get it about race. It's not just that a candidate for party chairman would distribute a CD including "Barack the Magic Negro." It's that people would defend him for doing it.


Anonymous said...

About Leverage. Have you read John Rogers's blog Kung Fu Monkey?

Doug Muder said...

Now I have.