Organizing the Middle Class

Matt Yglesias has a complaint:

I think labor-friendly writers sometimes don’t do the best possible job of distinguishing between unions qua social and political institutions and collective bargaining as a labor market institution. Something like EFCA is the only way to revive collective bargaining as a major force in private sector labor markets. But I don’t think it’s correct to see EFCA → union density as the only conceivable form of politically influential mass membership organization. 

Actually, I'm pretty sure that most labor-friendly writers are keenly aware of this distinction. But put that aside. It's obviously true that organized labor isn't the only conceivable form of politically influential mass membership organization. The question is whether it's the only conceivable form of politically influential mass membership organization dedicated to the economic concerns of the middle class. Right now I'd say it is for the simple reason that no one seems able to conceive of an alternative. But I sure wish someone would.

The View From My Picture Frame

Andrew Sullivan has great success getting people to figure out the location of random photos taken around the world, so I'm going to try it too. Except this is a photo of a painting. It's signed by someone named J. Gaston, and pretty obviously seems to be a Paris street scene. But is it? And which street? We're giving this to my sister-in-law in a couple of weeks, and I thought it would be nice if I could tell her what it's a painting of. Anyone know?

UPDATE: It's the Porte Saint Martin on St. Martin Boulevard in Paris. Thanks to Rjerrard and Skeptc for the ID. Pictures here and here.

The Problem With Damage Caps

Few things demonstrate the deliberate bad faith of conservative arguments for tort reform more than their support of damage caps in medical malpractice suits. Their claim is that caps reduce "frivolous lawsuits," but of course they do nothing of the sort. Almost by definition, frivolous lawsuits are those filed for small dollar claims in hopes that insurance companies will figure it's cheaper to settle than to fight. Big dollar lawsuits that exceed damage caps are the exclusive domain of serious injury — the precise opposite of frivolous.

The LA Times has a good piece today about the problem with medmal caps in California, which were set at $250,000 for non-economic damages in 1975 and haven't been changed since. This means that in 1975 dollars, today's caps are set at about $60,000. The problem is that this number is so low that lawyers are reluctant to take anything but the most slam dunk cases. And in the case of Olivia Cull, who died due to an "incident" at Mattel Children's Hospital UCLA two years ago, that turned into an insurmountable obstacle because a lawsuit was the only way for her parents to find out what really happened:

Distraught, the Culls sought answers from their daughter's doctors....When they demanded answers from hospital officials, the Culls said, they were told to review the records and, if they found a problem, to contact a lawyer.....As they sifted through records, they wondered how others in similar situations made sense of it all. "It's confusing," Joy Cull said...To get more information, the Culls decided to sue the hospital. But like others, they had trouble finding a lawyer willing to take the case. Given the state cap on damages, they said, many lawyers did not consider their case worth pursuing.

....In July 2009, weeks after first seeking counsel, the Culls filed a wrongful death lawsuit after lawyer Jin Lew at Los Angeles-based Michels & Watkins agreed to take the case pro bono....The lawyers found that Olivia's medical records were incomplete, the Culls said, and filed more requests until the hospital supplied hundreds of additional pages.

In addition to the lawsuit, the Culls filed a complaint with Los Angeles County health officials that triggered an investigation by the state Department of Public Health. In February, state investigators reported that a postdoctoral fellow who treated Olivia removed her catheters without a doctor's supervision. Investigators also found that a second fellow who treated Olivia had not been cleared to treat patients.

Imagine that. The records were incomplete until a lawyer forced the hospital to cough up the whole file. A pro bono lawyer, because a case with maximum damages of $250,000 simply isn't worth the number of hours it takes to pursue it.

Medical malpractice cases are complex and expensive. Hospitals won't voluntarily admit to mistakes, and they won't voluntarily make their full records available unless they're forced to. They'll especially not do this if they know perfectly well that damage caps make it vanishingly unlikely that they'll have to deal with anyone but distraught family members who have no idea how to work the system.

A $250,000 cap is plenty high for storefront lawyers filing frivolous lawsuits. The only things it prevents are real lawsuits over serious malpractice, like the one in the Culls' case. In the end, they got their $250,000 settlement, which they're using to fund scholarships in their daughter's memory, and the hospital agreed to change its procedures. But it almost didn't happen thanks to California's antiquated damage cap law.

POSTSCRIPT: And just to address the obvious questions: No, there's been no explosion in medical malpractice suits over the past 20 years. Nor has there been an explosion in payouts. Nor are medical malpractice suits a major component of rising healthcare costs. Medmal reform is a good idea, but mainly to make it fairer. A reformed system that actually worked properly would cut down on frivolous lawsuits but would probably increase the number of legitimate complaints that never see the light of day under current rules. More here.

Chart of the Day: Financial Assets

The Wall Street Journal reports:

Over the two years ending September 2010, Americans withdrew a net $311 billion — or about 1.4% of their disposable income — from their savings and investment accounts, according to the Federal Reserve. That’s a sharp divergence from the previous 57 years, during which they never made a net quarterly withdrawal. Rather, they added an average of 12% of disposable income to their holdings of financial assets — including bank accounts, money-market funds, stocks, bonds and other investments — each year.

There were no net withdrawals during the 2001 recession. Nor the 1991 recession or the 1981 recession. Nor during the oil shock recessions of the 70s. Not during any recessions until now. It's just another way in which the the 2008-09 recession has been the most damaging to household finances since World War II.

Housekeeping Note

Just to clear up a couple of things from the previous post:

  • No, I don't think private sector unions are going to make a comeback. I'm not delusional.
  • No, I don't think the middle class wage stagnation of the past few decades is due solely to the demise of unions. I do, however, think that economists underrate this because they focus too much of their attention on the pure effect of unions on wages and too little on the broader influence of (a) unions on politics, (b) politics on economic and financial institutions, and (c) economic and financial institutions on the distribution of wages (and everything else, for that matter).

That is all. 

Power, Baby, Power

Tim Lee says that American liberalism has incorporated libertarian critiques at a striking rate over the past few decades:

Libertarians have had a pretty impressive winning streak in recent decades, especially on economic policy. Income tax rates are way down. Numerous industries have been deregulated. Most price controls have been abandoned. Competitive labor markets have steadily displaced top-down collective bargaining. Trade has been steadily liberalized....This isn’t to say there are no longer disagreements about economic policy; clearly there are. But what’s striking is that the left’s smartest intellectuals and policy advocates now largely make their arguments from libertarians’ intellectual turf.

He's right! And there are both benefits and drawbacks to this. Still, Will Wilkinson points out that liberals and libertarians remain pretty far apart. So far apart, he says, that most liberals won't even accept this third-best not-even-very-libertarian proposition:

It’s best to just maximize growth rates, pre-tax distribution be damned, and then fund wicked-good social insurance with huge revenues from an optimal tax scheme.

Will is right too! I don't accept this. I think there are two big problems here.

First, it contains an implicit conviction that libertarian notions of tax and regulatory structures will maximize growth rates. This is practically an article of faith on the right, but there's virtually no empirical evidence to support it. As it happens, I'd argue that my preferred brand of the modern mixed economy is, on the whole, probably more efficient than a stripped down libertarian state, even one that includes lots of centrally-directed income redistribution. But not by much. Personally, I'd be pretty happy if both sides accepted the notion that within a fairly wide range of modern capitalist systems — from Sweden to the U.S., say — overall growth rates change very little. For the most part, we're really arguing about other things.

Second, I suspect there's no feasible path to Will's state of the world. The problem is that a system that generates enormous income inequality also generates enormous power inequality — and if corporations and the rich are allowed to amass huge amounts of economic power, they'll always use that power to keep their own tax rates low. It's nearly impossible to create a high-tax/high-service state if your starting point is a near oligarchy where the rich control the levers of political power.

I am, fundamentally, old fashioned about this stuff: I think of the world as largely a set of competing power centers. Economics matters, but power matters at least as much, and I think that students of political economy these days spend way too much time on the economy and way too little time on the political. This explains, for example, why I regret the demise of private sector labor unions. It's not because I don't recognize their many pathologies, or even the fact that sometimes they stand in the way of economic efficiency. I'm all in favor of trying to regulate the worst aspects of this. But large corporations have their pathologies too, and those pathologies are far worse because there's no longer any effective countervailing power to fight them. Unions used to provide that power. Today nobody does.

So when Tim Lee writes that "Competitive labor markets have steadily displaced top-down collective bargaining," I just have to shake my head. Competitive for whom? For the upper middle class, labor markets are fairly competitive, but then, they always have been. They never needed collective bargaining to begin with. For everyone else, though, employers have been steadily gaining at their expense for decades. Your average middle class worker has very little real bargaining power anymore, and this isn't due to chance or to fundamental changes in the economy. (You can organize the service sector just as effectively as the manufacturing sector as long as the law gives you the power to organize effectively in the first place.) Rather, it's due to a long series of deliberate policy choices that we've made over the past 40 years.

It's worth noting, by the way, that corporations and the rich know this perfectly well, even if lots of liberals have forgotten it. They know exactly what the biggest threat to their wealth is, and it's not high tax rates. This is why the steady erosion of labor rights has been, by far, their single biggest obsession since the end of World War II. Not taxes, unions. If, right now, you were to offer corporations and the rich a choice between (a) passage of EFCA or (b) a return to Clinton-era tax rates on high incomes, they wouldn't even blink. If you put a gun to their head and they had to choose between one or the other, they'd pay the higher taxes without a peep. That's because, on the level of raw power, they know how the world works.

Who Wants to Repeal Healthcare Reform?

Via Greg Sargent, I see that the New York Times decided to go the extra mile and do more than simply ask people if they support or oppose the healthcare reform law. They first asked them if they wanted the law repealed, and if so, what part they wanted repealed. The basic result was 48% in favor of keeping the law as is, 18% who wanted to repeal part of the law, and 20% who wanted to repeal the whole thing. The details look like this:

So 8% are opposed to everything and 11% are opposed to the individual mandate. And that's about it. Not a single other provision was opposed by more than 1% of the respondents. Not even higher taxes! Hell, a full 14% were supposedly in favor of repeal but couldn't name even a single provision they disliked.

It's true that most people don't know anything about anything. So this isn't exactly man bites dog news. Still, with general opposition this small and this amorphous, and specific opposition limited almost entirely to the mandate, Democrats really shouldn't have such a hard time selling their side of this. It's yet another piece of evidence that, like it or not, healthcare reform is here to stay.

A Near Death Experience for the Death Penalty?

Trouble in death penalty land:

The sole American manufacturer of an anesthetic widely used in lethal injections said Friday that it would no longer produce the drug, a move likely to delay more executions and force states to adopt new drug combinations....No other American companies manufacture the drug, which has largely been supplanted by alternatives in hospitals but is used by 34 of the 35 states that use lethal injection to carry out the death penalty....During what had been described as a temporary halt to production last year, scarcity of sodium thiopental led to delays in scheduled executions in at least two states, California and Oklahoma.

I oppose the death penalty on pragmatic grounds (it's too expensive) and moral grounds (it's pretty obvious that we aren't able to apply it fairly), but it's never been a huge hot button for me because I've never thought that it's inherently barbaric or wrong. That said, some of the best evidence that most of us feel pretty queasy about the whole thing is the idiocy of lethal injections. Frankly, if the whole process is so unbearable that hangings and electric chairs and firing squads and gas chambers are all beyond the pale, then maybe it really is inherently barbaric. And if that's the case, we shouldn't kid ourselves that recreating a sterile hospital environment makes it any less so.

Besides, it's still the case that putting someone to death is a mind-bogglingly expensive and convoluted process; we plainly aren't able to apply it fairly; and alone among punishments it's impossible to reverse if and when a mistake is discovered. That's reason enough to end the practice, and hopefully the end of sodium thiopental will prompt at least a few states to bring an end to the death penalty too.

Decluttering the Blogosphere

The bandwagon effect has always been with us, but OTB's James Joyner complains today about the baleful tendency of popular aggregators like Memeorandum to supercharge the herd instinct:

Regardless of how it happens, though, the result is the same: Everyone in a given niche winds up feeling obligated to weigh in. Indeed, I frequently see a headline or story somewhere, decide it’s not worth my time, and then get drawn into it hours later when I see conversations about it on Twitter or my blog feed reader. Sometimes, it’s just a function of “well, this must be important so let me say something.”

I have a solution: don't do it! If it's not something that you personally care much about, just skip it. I, for one, would actually enjoy the blogosphere more if fewer people repeated the same things over and over, and in particular I'd pay more attention to OTB if it had fewer posts. I can't read 20 or 30 posts a day on a single blog, which means that I probably miss lots of good stuff that gets lost in the clutter.

So let's make 2011 the year of decluttering in the blogosphere. Now if I can just figure out a way to get this meme to catch on.

Friday Cat Blogging - 21 January 2011

On the left, here's a good picture of Domino's stubby front legs. Or is it something else at work? In any case, when she walks she definitely slopes up toward the rear, which you don't normally see in a cat. On the right, here's another shot from the series of pictures of Inkblot and the laser pointer that I took a couple of weeks ago. Why? Because you can never get enough of cats and laser pointers. Note also that he's sitting on a cheap area rug that we originally bought to protect a high-traffic area of the carpet. It's almost literally in shreds now because Inkblot has adopted it as his personal scratching post. But I'm basically OK with this. It only cost twenty bucks, and if it lures him away from the furniture and the carpet, that's fine. I'll just buy a new one every six months or something