Strangers in Their Own Land (part 2)

June 19, 2018

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The deep story

Arlie Hochschild defines a deep story as a “feels-as-if-story…the story feelings tell, in the language of symbols. It removes judgment. It removes fact. It tell us how things feel.” She tries to grasp the deep story Tea Party conservatives tell themselves and others that explains many of the political positions they take, some of which seem to work against their own economic self-interest.

Hochschild conveys the deep story using the metaphor of a long line leading up a hill. “Just over the brow of the hill is the American Dream, the goal of everyone waiting in line.” If you work hard and live your life responsibly, you should expect to move forward.

You’ve suffered long hours, layoffs, and exposure to dangerous chemicals at work, and received reduced pensions. You have shown moral character through trial by fire, and the American Dream of prosperity and security is a reward for all of this, showing who you have been and are—a badge of honor.

But something has gone wrong in recent decades. While the very front of the line continues to progress, the line has bogged down for the great majority. That’s because gains in income have gone primarily to the richest tenth of the population. (Actually, she could have said the richest 1% or less.) There is still some individual movement forward or backward, of course. But without general advancement for the line as a whole, someone’s movement forward must be offset by someone else’s movement backward. That intensifies competition and puts the aspirations of different groups in conflict.

The people in the back of the line certainly aspire to move up, and liberals say that they deserve to, since most of them were born with fewer advantages than those farther ahead, and many have been unfairly held back for one reason or another. (In a fair race, of course, everyone is supposed to begin at the same starting line and run unimpeded.) On the other hand, people in the middle of the line can make a case for at least keeping the position they have, a position that reflects their hard-earned achievements. They may see the line more as a checkout line, where no one should cut in front of you.

In this context, people can have a strong emotional reaction to government assistance to those in the back of the line. Whether your reaction is sympathetic or resentful depends on whether you are willing to acknowledge the folks back there as underprivileged and disadvantaged, or if you prefer to defend your own position by seeing them as less deserving than you are. In the latter case, you see government assistance not so much remedying an injustice as creating one. As Hochschild’s Tea Partyers saw it, “The free market was the unwavering ally of the good citizens waiting in line for the American Dream. The federal government was on the side of those unjustly ‘cutting in.'”

Race and Southern conservatism

In theory, such attitudes toward economic inequality and the role of government can exist even if all the people in line are the same race. Add America’s sad racial history to the mix, and the emotional stakes get even higher. Hochschild considers race an essential part of the deep story, although her subjects were reluctant to discuss it.

The American South has always been known for its extremes of wealth and poverty, including considerable white poverty.

Compared to life in New England farming villages, there was much more wealth to envy above, and far more misery to gasp at below. Such a system suggested its own metaphoric line waiting for the American Dream—one with little room for the lucky ahead, and much room for the forgotten behind.

Lower-income Southern whites have always been stuck in the middle, having only limited opportunities to move up, but determined to defend their place against the aspirations of the large populations of black people behind them.

Here I would like to add that the voting history of Southern whites shows that they have not always been so hostile to Big Government. Louisiana supported every Democratic presidential candidate from Roosevelt to Kennedy (1932-1960), except when they supported the States Rights Democrat Strom Thurmond in 1948. Only after the national Democratic Party supported the Civil Rights Act of 1964 did Southern whites turn Republican in large numbers. Now they vote very Republican in national races–Trump won by a 20% margin in Louisiana–although Democrat John Bel Edwards did win the governor’s race in a runoff election in 2016. As part of the Roosevelt coalition, Southern whites had little objection to New Deal programs like the WPA and GI Bill that benefited mostly whites, but they are more critical of anti-poverty programs like Medicaid and Food Stamps that go disproportionately to people of color. In fact-checking her subjects’ opinions, Hochschild found that they tended to exaggerate how much of the federal budget went to safety-net programs, how many people of working age were living on “welfare” instead of working, and what proportion of the poor were getting TANF (today’s main family assistance program), a proportion which was quite low in Louisiana.

Hochschild does not specifically accuse her subjects of racism, settling for the more general statement that “many Americans, north and south, are racist.” What we can say is that Tea Party conservatives oppose government programs designed to help the most disadvantaged Americans; that people of color rely more on such programs because of the legacy of discrimination; and that Southern whites are especially drawn to Tea Party conservatism. Put all that together and it strongly suggests that racial divisions reinforce the status anxieties and resentments of white people in the winner-take-all economy.

To the extent that Southern conservatism is racist, it is rarely the explicit segregationism of Strom Thurmond or the Ku Klux Klan. Hochschild’s subjects didn’t want to talk about black people very much at all, at least in her presence. But they did want to talk about the freeloaders and line-cutters, the people who want to get ahead of them without deserving to. It is hard for such complaints to avoid implicit reference to the people of color who are still at the back of the line, people who have long been demeaned by stereotypes of laziness and irresponsibility.

Many Southern whites are not very far from the back of the line themselves. Yet they have strong motives to distance themselves from the most needy and disdain government dependency, although they do use programs for which they qualify. That emotional distancing helps explain why they “identify up,” voting with the white rich even when the latter are enriching themselves at the expense of the majority. It also explains why they oppose Obamacare, even though it makes health insurance more affordable for millions who are not poor. They did not succeed in stopping the expansion of Medicaid in Louisiana, once it was championed by the new Democratic governor. A recent LSU study concluded that the additional $1.8 billion in federal spending on health care created thousands of jobs and had a $3.5 billion economic impact on the state. In general, poor red states like Louisiana receive more federal dollars than their residents pay in taxes.

Cultural marginalization

In addition to feeling both economically challenged and threatened by less deserving competitors, Tea Party supporters also feel that their cultural norms and values are under attack. Since the 1960s and 70s, the mainstream culture has been moving away from them in several respects.

The government no longer endorses and enforces Christian norms as much as it used to. Gone are official prayers in public schools, laws against contraception and abortion, strict divorce laws, and anti-sodomy statutes. This too has alienated Christian conservatives from their government.

In Lake Charles, religious teachings “focus more on a person’s moral strength to endure than on the will to change the circumstances that called on that strength.” This conservative brand of religion helps explain why even people who personally experience environmental disasters look to God for answers instead of to government. That puts them at odds with most of the environmental movement, although some evangelicals are starting to see good stewardship of the earth as part of their religious obligations.

When women joined the “long parade of the underprivileged” to call for equal rights, it was experienced by many conservative men as another threat to their precarious economic position. It was experienced by many conservative women as a disparagement and rejection of their traditional, and perhaps God-given, role as homemakers. Family variations that liberals see as liberation from a “one-size-fits-all” family system strike conservatives as the “breakdown of the family.”

The 1960s also saw immigration reforms that ended the quotas favoring Europeans, opening the country to more Asians, Africans and Latin Americans. Whereas establishment conservatives have often welcomed the cheap labor, Tea Party conservatives more often see the new immigrants as unwelcome competitors for jobs and as carriers of alien cultures.

All this puts white Christians on the defensive, especially the Southern, white, Christian males who are the primary supporters of right-wing conservatism. The two main political parties used to disagree mainly over economic policy. Since the cultural revolution of the 1960s, they have come to disagree over deeply emotional cultural issues as well.

Political propaganda

Hochschild says that the deep story her subjects tell is “also the Fox News deep story.” She describes a man who supported environmental causes, but also put up lawn signs for a candidate who wanted to cut the EPA. One reason was that “his source of news was limited to Fox News and videos and blogs exchanged by right-wing friends, which placed him in an echo chamber of doubts about the EPA, the federal government, the president, and taxes.”

Right-wing messages appeal to people for many different reasons:

You may assume that powerful right-wing organizers—pursuing their financial interests—“hook” right-wing grassroots adherents by appealing to the bad angels of their nature—their greed, selfishness, racial intolerance, homophobia, and desire to get out of paying taxes that go to the unfortunate. As I saw at the Trump rally in New Orleans, some of that appeal goes on. But that appeal obscures another—to the right wing’s good angels—their patience in waiting in line in scary economic times, their capacity for loyalty, sacrifice, and endurance—qualities of the deep story self.

If we can cross the “empathy divide” and relate to conservatives as human beings, we can avoid dismissing them as stupid or evil. They are standing up for what they deeply believe to be right, even if they create or perpetuate problems for other people by doing so.

Having said that, I still worry that political propaganda may be threatening our democratic institutions, as indicated by the success of Fox News and the election of a master propagandist as president. Much of the blame for that goes to the abundance of dark money in politics and the fragmentation of media by cable TV and the internet. Our society makes it awfully easy to promote extremism. But I also suspect that the cultural revolution of the 1960s and 70s, much of which I support, ushered in an era of unusual emotionalism in our politics, making people much too susceptible to emotional appeals unsupported by rational, fact-based arguments. Something is lost if deep stories do indeed remove judgment and fact. Hochschild’s sociology of emotions may reflect the times as well as illuminate them. In a previous post, I expressed some concerns about the extraordinary weight Jonathan Haidt gives to intuitions in The Righteous MindI don’t doubt that people vote their deep feelings, but I think that educators and other responsible leaders should be encouraging people to examine their feelings, not just catering to them.

My next post will deal with Hochschild’s take on the rise of Donald Trump and possible liberal responses to far-right conservatism.



The Price of Inequality (part 2)

December 12, 2012

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The previous post summarized Joseph Stiglitz’s discussion of the market inefficiencies that allow more inequality than is necessary to reward productive activity. In any free market, some will be more successful than others; the problem is that the winners can win in ways that erect barriers to the success of others, or impose costs on the rest of society, or take advantage of privileged access to information. The excessive inequality that results then undermines social mobility, aggregate demand, investment in public goods, and economic growth in general. Contrary to the view that less government is always better economics, Stiglitz sees an essential role for government in keeping markets fair and efficient, countering tendencies toward excessive inequality, and encouraging economic growth for the benefit of all.

In general, the policies that Stiglitz recommends flow naturally from his understanding of market inefficiencies and limitations. Where markets allow companies to capture private benefits while evading responsibility for social costs (such as environmental damage), government can restore the balance with taxes and regulation, and make sure that producers pay a fair price for access to public resources (such as oil on federal lands). Where markets tend to give unearned benefits to those with inside information (such as bankers who know that some of the securities they market have been designed to fail), government can insist on regulated exchanges with greater transparency. Where markets underinvest in public goods, government can specialize in the creation of public goods. Where markets leave a large segment of society too poor to afford the products that they offer, government can use progressive taxation and spending to stimulate aggregate demand. Where markets erect barriers to upward mobility, government can provide better access to education and health care, as well as “active labor market policies” to help workers transition to occupations in which their labor is needed. It can also impose estate taxes to keep the children of the rich from enjoying large unearned advantages over other children.

All of these things are easier said than done, for the simple reason that the same inequalities that distort the economy also distort the political process, undermining government’s ability to address the inequalities. Stiglitz calls this an “adverse dynamic” or “vicious circle,” a self-amplifying feedback loop perpetuating and strengthening social inequality.

As the wealthy get wealthier, they have more to lose from attempts to restrict rent seeking and redistribute income in order to create a fairer economy, and they have more resources with which to resist such attempts. It might seem
strange that as inequality has increased we have been doing less to diminish its impact, but it’s what one might have expected. It’s certainly what one sees around the world: the more egalitarian societies work harder to preserve their social cohesion; in the more unequal societies, government policies and other institutions tend to foster the persistence of inequality. This pattern has been well documented.

Economic elites use a variety of tactics to tilt the political playing field in their favor. They employ lobbyists to make their case, and gain access to politicians with large campaign contributions (minimally regulated thanks to recent Supreme Court decisions). They “use their political influence to get people appointed to the regulatory agencies who are sympathetic to their perspectives,” so-called “regulatory capture.” In the global economy, capital can flow toward countries with the most permissive tax and regulatory policies, and international bankers have enormous power over countries that rely on foreign capital. “If the country doesn’t do what the financial markets like, they threaten to downgrade the ratings, to pull out their money, to raise interest rates; the threats are usually effective.”

In a nominally democratic country like the United States, ordinary people can theoretically outvote the wealthy. Much of Stiglitz’s political discussion concerns the question of why they don’t do so more often, that is, why people frequently vote against their own economic self-interest. Here he draws heavily on behavioral economics, which tries to understand “how people actually behave–rather than how they would behave if, for instance, they had access to perfect information and made efficient use of it in their attempts to reach their goals, which they themselves understood well.” Economic elites benefit from the fact that “many, if not most, Americans possess a limited understanding of the nature of the inequality in our society: They believe that there is less inequality than there is, they underestimate its adverse economic effects, they underestimate the ability of government to do anything about it, and they overestimate the costs of taking action.” In addition, the wealthy use their economic power to market their ideas, cleverly framing policies that benefit the few to make them appear beneficial to all. Weapons programs that profit defense contractors are always described as good for the economy, while the same amount to protect the environment is just “wasteful government spending.”

The media play a crucial role here, either performing a public mission of informing the citizenry, or just presenting whatever programing brings in the most advertising revenue, including political advertising revenue. In the US, not surprisingly, the media underperform their public mission, leaving citizens at the mercy of the advertisers with the deepest pockets. Stiglitz sees this as another example of rent-seeking: The media get an unearned private benefit from free access to a public resource, then use it in a way that produces private profit at the expense of democratic discourse. “The public owns the airwaves that the TV stations use. Rather than giving these away to the TV stations without restriction–a blatant form of corporate welfare–we should sell access to them; and we could sell it with the condition that a certain amount of airtime be made available for campaign advertising.” If the public is too often misinformed, manipulated, and alienated from a political process that doesn’t represent them very well, that works to the advantage of the economically powerful: “If voters have to be induced to vote because they are disillusioned, it becomes expensive to turn out the vote; the more disillusioned they are, the more it costs. But the more money that is required, the more power that the moneyed interests wield.”

The result of this distorted democracy is that legislation to serve the public interest is extremely difficult to pass. The government is prohibited from bargaining with pharmaceutical companies over the price of prescription drugs, costing the taxpayers an estimated $50 billion a year. Banks have succeeded in blocking most regulations intended to protect student borrowers from fraudulent educational programs, as well as most state laws intended to curb predatory lending. Patent law protects the interests of large corporations and their lawyers, but allows them to “trespass on the intellectual property rights of smaller ones almost with impunity.” Corporate executives who perpetrate fraud are rarely penalized personally for doing so. The recent housing crisis revealed that the foreclosure laws make it easy for banks to foreclose without actually proving that homeowners owe the amounts claimed. And on and on.

The biggest battle over public perceptions is fought over the role of government in the economy, over the Reagan question of whether government is the solution to economic difficulties or government is the problem. Since the Reagan years, conservatives have had great success convincing politicians, the media, and much of the general public that conservative fiscal and monetary policies are good for the economy, even if they favor the wealthy and aggravate inequality. In fiscal policy, the conservative approach is to tax and spend less; this is supposed to help the economy by freeing up capital for private investment. (Conservatives often support increases in military spending, however, which in combination with tax cuts produce large deficits.) Stiglitz acknowledges that constraints on taxes and spending might make sense under some conditions: “Of course, when the economy is at full employment, more government spending won’t increase GDP. It has to crowd out other spending….But these experiences are irrelevant…when unemployment is high (and it’s likely to be high for years to come) and when the Fed has committed itself to not increasing interest rates in response.” Under these conditions, government can borrow cheaply and spend with great economic effect, increasing the size of the pie for all.

The government could borrow today to invest in its future— for example, ensuring quality education for poor and middle-class Americans and developing technologies that increase the demand for America’s skilled labor force, and
simultaneously protect the environment. These high-return investments would improve the country’s balance sheet (which looks simultaneously at assets and liabilities) and yield a return more than adequate to repay the very low interest at which the country can borrow. All good businesses borrow to finance expansion. And if they have high-return investments, and face low costs of capital— as the United States does today— they borrow liberally.

Stiglitz maintains that government spending can help the economy even if it is balanced by higher taxes to avoid increasing the deficit:

There is another strategy that can stimulate the economy, even if there is an insistence that the deficit now not increase; it is based on a long-standing principle called the balanced-budget multiplier. If the government simultaneously increases taxes and increases expenditure— so that the current deficit remains unchanged— the economy is stimulated. Of course, the taxes by themselves dampen the economy, but the expenditures stimulate it. The analysis shows unambiguously that the stimulative effect is considerably greater than the contractionary effect. If the tax and expenditure increases are chosen carefully, the increase in GDP can be two to three times the increase in spending.

That means that by insisting on low taxes for the wealthy and low spending on public goods, the economically powerful and their political allies are putting private gain before the public good. They are not only promoting social inequality, but they are impeding rather than facilitating economic growth.

Stiglitz is also a long-time critic of conventional monetary policy, as practiced by the Federal Reserve, the European Central Bank and the International Monetary Fund. He believes that the so-called “independent” central banks have been captured by the financial sector, so that they serve private rather than public interests. Their main focus has been on fighting inflation, a policy that has the greatest benefit for wealthy lenders (since they have the most to lose if loans are repaid in devalued currency). Central banks tend to raise interest rates too quickly during an economic expansion, cooling the economy and maintaining unemployment at an unnecessarily high level. On the other hand, in the Great Recession governments have relied on expansionary monetary policy, pumping more capital into the system by lending banks money at near-zero rates. This is less effective than an expansionary fiscal policy, since the problem is not so much a lack of capital as a lack of spending. But it’s a sweet deal for banks, who get money so cheaply that they can make a good profit even from very low-risk investments like treasury bonds, and are not required to invest it in productive enterprises or housing loans. Cheap capital also encourages companies to finance labor-saving equipment instead of employing more workers, contributing to a jobless recovery.

Stiglitz describes a system so tilted in favor of the rich as to leave the reader pessimistic about finding any way out of the vicious circle of economic and political inequality. In the end, he suggests two general routes to reform. One is that “the 99 percent could come to realize that they have been duped by the 1 percent: that what is in the interest of the 1 percent is not in their interests.” The other is that the 1% themselves come to see beyond their own narrow and short-term self-interest. Although the wealthy have become more and more insulated from the problems experienced by ordinary people, that insulation is not absolute. If the United States were to become as unequal as a Latin American oligarchy, there would be plenty of costs to go around as a result of underutilized human talent and social unrest. Even Brazil, one of the world’s most unequal societies, has been taking steps to alleviate inequality recently. No doubt Stiglitz hopes that books like his can sound the alarm and help change opinions at all levels of American society.