I was thinking of writing a post with a different title - Why Is It So Hard For Us To Get Along? - but as I pushed the ideas a little bit I kept coming back to the issues represented by the current title. So let me give a quick sketch of how I got here in my thinking and then get to those issues in one particular, but very important case.
I went to Junior High School 74 in Bayside, Queens New York. I started 7th grade in 1966, two years after the Civil Rights Act of 1964. There was busing to achieve integration in school. But, as I've written several times, there was tracking via SP classes at 74 and later via Honors classes at Cardozo, the local high school I attended after graduating from 74. The tracking created a school-within-a-school effect and the so-called academically elite kids were not really exposed to integration in their academic classes, with only a small number of exceptions. Ironically, one of the exceptions was economics, which I took in the fall semester of my senior year. My vague recollection is that it was a nondescript course, more macro than micro, with some attempt to give students familiarity with variables that economists care about, e.g., unemployment rate, GDP, and inflation. It had no impact on me whatsoever and was not a factor in why I eventually chose to go to graduate school in economics. But as it was my only experience with a truly integrated academic class (this class included many non-honors students who weren't bused to Cardozo) it's just too small a sample for me to make sweeping judgments about what a full curriculum of this sort would have been like. The takeaway point for what I want to argue here is that when I was in Junior High and High School there was plenty of room for the implementation of integration to improve over time.
And this perspective is only my own as a student. What about the perspective of those students who were bused in? Did they or their families see benefits from integration regarding the quality of the schooling? I don't know. But I do know that at the time in high school there were three different types of diplomas offered: academic, general, and commercial. The tracking I referred to earlier was within the academic category. In principle, for those students who expected high school to be the culmination of their formal education, such categories might make sense to better prepare students for the world of work. But if a school is perceived by its academic achievements then it might "strategically" shortchange students in the non-academic categories. And I believe that some years later NYC got rid of the other types of diplomas because they were perceived as discriminatory. But I have no information about how bused-in students were distributed over the diploma categories nor any information about what non-integrated NYC schools were like prior to 1966, other than my own elementary school experience. So I will just make a theoretical statement. If average quality of schooling was notably higher for bused-in students, then integration of the schools might be socially preferred even if quality of education dropped a bit for those students who weren't bused to school.*
But there were other reasons why the integration was less than perfect and these may have mattered more. Many kids went to parochial school rather than to public school. I never fully understood this. Among the kids I knew who went to public school, many also went to Hebrew school, which had meeting times that did not overlap with public school. I recall that when I was in elementary school a few Christian kids would leave early on Wednesday afternoons to attend religious training. So there was some overlap in this case, but it was modest. And I have no clue about the respective tuition rates then at those parochial schools that were full substitutes for public school and those other parochial schools that operated outside of public school times. Clearly that matters in drawing any inferences here. My prior would have been that the parochial schools that operated outside of public school hours would have the majority of kids. I believe that to be the case of the Jewish students, but not for the Catholic students. (In NYC at the time, those two groups together constituted a majority of the population, though I'm asserting this from memory. I did a quick search online for this information but didn't find it.) This is the part I'm referring to when I said above that I never fully understood this. And I believe this division between Jews and Catholics about the religious training of the children preceded busing in the NYC public schools.
There were also ritzy prep schools, where I know even less than I know about the parochial schools. I will use the tennis player John McEnroe to illustrate. According to Wikipedia he grew up in Douglaston, not too far from where I grew up in Bayside, and graduated from high school in 1977, five years after I graduated. I'm not 100% sure that he would have gone to Cardozo had he attended public school, but it seems from that Wikipedia entry that he went to Trinity School instead, an elite private K-12 school.
The conclusion I'd like the reader to draw is that regarding school in New York City at the time I was growing up (50+ years ago) there was stratification of students by race, religion, and parental income/wealth. (One surely could also discus stratification by gender, but not with the very broad strokes of evidence that I'm utilizing here.) There were efforts to reduce the stratification by race via busing to achieve integration of the schools. But there were no efforts to reduce the other sources of stratification at that time, as far as I know. One might argue that New York was already such a "melting pot" that there was no need for the schools to play this role. I think that argument is wrong. In an American Politics class in college we read parts of Beyond the Melting Pot, which spoke about persistent cultural difference well after assimilation should have occurred. And this word assimilation begs the question, assimilation into what? Was there a distinctive American culture that we all learned? If so, how did we learn it?
Much later, sometime in the early 1990s, when I had been a faculty member for over a decade, I read Lawrence Levine's The Opening of the American Mind, a book whose title suggests a refutation of Bloom's The Closing of the American Mind. In a nutshell Levine argues that we can readily maintain two identities and there is no problem doing so. I can be American and I can be Jewish. Both identities co-exist without difficulty. But then, there is the question of how the American part gets educated. I would argue that public schools play an indispensable role here.
In any event, this provides the initial conditions I want to consider. In the intervening 50 years or so, has there been progress? Do we get along better now than we did back then in ways that are obvious to all? If not, why not?
Now I will put on my economics hat. There is an elegant explanation for why we don't always make progress, innovation notwithstanding, and instead remain locked into the status quo. The quintessential example is the QWERTY keyboard, which was invented to slow people down in typing when the mechanical keys would jam if you typed too quickly. (The linked paper by Paul David is quite interesting and readable by the non-economist.) We no longer have any issues with the keys jamming, but the layout of keys on the keyboard persists. The explanation is about interdependencies. Too many other things would break if the layout were changed. (Not the least of which is that old fogies like me would balk at learning a new system, compared to now when typing is more or less an automatic process.) Interdependencies can sustain the status quo, even in the presence of substantial innovation. (The academic calendar is another example. The summer break is a vestige of an agrarian economy that no longer exists yet we still have the summer break.)
Particularly with regard to race and the persistence of racism, we don't normally talk about identifying the sources of interdependency. Maybe we should do that to inquire whether these are so fixed that realistically nothing can be done about it. Alternatively, maybe our focus should be on changing these linkages in a way that they no longer block the more fundamental change we'd like to see, although doing so will be arduous. Yet doing difficult things for the greater good may be the right antidote for our social ills at present.
Evidently, our national politics provides one big source of this interdependency. I thought this piece by Michelle Goldberg quite insightful on how those who preach "family values" are using that lens as a way to attack "critical race theory" and thereby generate high voter participation rates. Is there a way to espouse a strong anti-racist message that folks who put great stock in family values would find palatable and non-threatening? It seems to me an interesting question to ask, but one beyond my own competence to answer. So I will merely pose it here and push on.
A different source is based on economic dislocation. This isn't about losing a particular job. It is about an entire sector of work drying up. For a long time the culprit was manufacturing and the blame was on offshoring and automation. It was blue collar workers who experienced this dislocation. Many of them are white and without a college degree. When they lost their good manufacturing jobs they didn't want to switch to lower paying service sector work, which they viewed as namby pamby. Indeed, an important factor to consider with this economic dislocation is that it engenders a sense of emasculation. The image of the man as the provider for the family was defeated by the facts on the ground and there was no alternative positive image that they could embrace. Among the social consequences to note, the opioid crisis took firm hold within this sub-population.
It's my understanding that this is the core of Trump's base. MAGA as well as the anti-immigration and the implied racism that goes with it serves an emotional compensation for this sub-population, who are frustrated by their poor employment prospects. They blame the Democrats who abandoned them, recalling that when private-sector unions were a strong force in this country they were aligned with the Democratic party. In this story, they were thrown under the bus to make room for the new identity politics.
My knowledge of labor history in the U.S. is a little rusty, but I believe some of this story is revisionist and perhaps outright wrong. Those who recall the TV show All In The Family might remember that Archie Bunker worked on the loading dock, was a union guy, but was a very strong Nixon supporter. This was at a time when unions were still strong. How can this be explained? It's easy enough if you include the Vietnam War in the picture. That war created a different divide within the country, the hardhats versus the hippies. Being a union guy, but already in the Republican fold followed from being for the war. And this was the early 1970s. In the next decade, Reagan busted PATCO, and thereby signaled to the private sector that his administration would accommodate a hard-line response to unions. Yet somehow Reagan remains a hero to these Trump supporters.
It may be that Biden's aggressive economic policies can fundamentally change this ethos by raising the economic well being of blue collar types of all races and ethnicity. But it will take time for that to happen, to experience this economic improvement and modify expectations that this change is permanent. I really don't know how long that will take. But I'd guess that if the Democrats don't maintain control of both Congress and the White House for at least the next couple of election cycles, there won't be enough time for this change to happen.
Further, we need to consider the messaging that voters are exposed to. Trump's base is passionate about supporting their guy. The messaging aims to stoke anger in the base and it has done a remarkable job of doing that. The constant exposure to the messaging is addicting and one can embrace the message regardless of the economic circumstances of the individual. From my point of view it has been this way since Nixon invoked his Southern Strategy and came more firmly into the spiel under Reagan, which is when the so-called culture wars surfaced.. Making low taxes and deregulation the focus of the economic policy, coupled with the union busting I already mentioned, made the economic policy favor the rich and well to do. The symbolic wins, particularly the not so veiled racism, kept the base in line. Since I view the economic issues as paramount, particularly in times when otherwise life seems ordinary, meaning neither pandemic nor war, that the base settled for these symbolic rewards only makes it seem to me that they've been played. At present, that's just my thinking. It's not in the messaging of the Biden Administration, as far as I can tell, probably because they don't want to inflame Trump supporters now given how tense the situation already is. However, it may become part of the messaging over time, particularly if the economic policies are perceived as a success and blue collar voters increasingly come to accept that the government has a significant role to play in simultaneously providing needed public goods (infrastructure) and the good jobs that go along with that provision.
Would the reality and future prospect of a middle class lifestyle reduce the racism of White blue-collar workers? One hopes so, even if that happened only gradually. If the primary source of emasculation was removed, what emotional need would continued racism provide? I'm not a sociologist, so don't really want to get into the status needs of individuals and groups. Those may very well persist, in which case some racism will endure, though I'd predict it would be much milder than what we currently have. So, possibly, this is an example of interdependencies that can actually be changed, both the reality and the perception of that, via a sustained economic policy aimed at doing so.
Were it only so easy. Unfortunately, economic displacement will continue unabated with the new culprit Artificial Intelligence and with the old reasons for displacement still present. This will impact white collar workers whose jobs may no longer be necessary. Will they be able to reeducate sufficiently to find new work in a different sector of the economy? Or will they languish and go through a life cycle similar to what displaced blue collar workers have previously experienced? I wish I knew the answer to that question. I don't even have a good feel on this to let the free market sort things out or to have government play a big role in the solution. Is a guaranteed minimum income a possibility? Who knows? Might the retirement age become lower, with 55 the new 65 for that purpose? Again, who knows? All I will speculate on here is that Trump's base might expand significantly in the future if this happens more rapidly than expected and good solutions for this new type of displacement are not readily found.
Now I want to make a brief aside before making a segue to the next idea. This piece has taken me a very long time to write. I started it well before the violence in Israel erupted and at the outset I expected it to take only a day or two to write. That it has taken so much longer is evidence of my personal struggle with the ideas I'm presenting here. I certainly haven't resolved those to my satisfaction, but I have made enough progress with them that I think I can finish writing this piece now.
It turns out that selfishness as a concept is not sufficient to consider. Consider the hypothetical world that economists refer to as complete information, where all decision makers have all the information at their fingertips. Further, economists assume individuals are rational. In this setting, selfishness is the issue. But that hypothetical world is not the world in which we live. In reality there is incomplete information. Sometimes what people don't know is a matter of happenstance. Other times it is that the information is too complex for them to process in a meaningful way, so they ignore it even if the information is available. Still a third possibility is that people deliberately choose to be ignorant, meaning they could acquire the information, perhaps by reading about it, but choose not to do so. I want to consider all three taken together as insularity, though in the mind of the individual it is deliberate ignorance which most people consider insularity.
The reason for considering all three together is that to a third party it may be difficult or indeed impossible to understand which is the true explanation for the person not understanding what is going on. It may then be that for highly complex information there is a need for simplified versions that are available to the layman. In this way everyone becomes somewhat aware and experts learn to communicate with the rest of the population in terms they can understand. For the case where the person deliberately opts for ignorance, undoubtedly this choice is driven by the perception that knowledge might create an undue burden that the person would like to avoid. Education might counter that perception, either by demonstrating that the burden is not so large or by making the point that mature adults would accept the responsibility of the burden because it is the right thing to do. If that's correct, then willful ignorance is itself a kind of selfishness.
The particular case I want to apply this idea to is upscale voters who typically vote for Democratic candidates. Elsewhere I've referred to people in this income category as the professional class - households in the top 10% of the income distribution but below the top 1%. These are people who are comfortable financially, borderline rich perhaps, but not the uber rich. I'm in this category. And I'm guessing that many of them are, like me, horrified by what has happened since Trump has appeared on the national stage and terribly frightened of the possibility that there will be an encore performance. These people would be willing to do a lot to prevent that from happening, especially if they could be convinced that their collective efforts really would matter in preventing a Trump Act II. This is the backdrop for the following.
Suppose the big project that most Democrats can agree upon is to remake America as a middle class society. This means many things. It means good educational opportunities are available to all. Likewise, it means decent healthcare is available to all. And it also means readily available childcare so the parents can earn a decent living while working. Further, it means median household income makes one feel middle class, part of the mainstream, and a citizen proud of the country who wants to contribute to keep the country's well being. Moreover, the household income distribution is not too skewed, meaning those households with income below the median are still within shouting distance of the median and likewise for those households with income about the median. The big picture question, then, is how do we get from where we are now to this remake of America as a middle class society?
In my way of thinking Biden's current economic plans are focused around raising the incomes of low income households, dealing with the child care issue, and addressing other areas of concern (global warming) that we don't normally think of as an income distribution matter. There remains the issue of compression of household incomes for households above the median. Can that be a voluntary matter, with household members stepping up and willingly accepting the income reduction? Or must it be coerced, for well off households will resist compression in their part of the income distribution? For the last six or seven years I've argued in a variety of posts that we should be trying very hard to make this a voluntary matter. But nothing I've read elsewhere seems to give support to my view. Instead, it is implicitly assumed that we're all selfish, so such compression in the income distribution would require an involuntary taking.
Under normal political circumstances, the Democratic party would never make an educational appeal to upscale voters, hoping they will willingly accept compression of the income distribution as a consequence, for fear of driving such voters out of the party and into the hands of the Republicans, where selfishness in matters of income and taxation is part of their core ethos. But we are not in normal political circumstances now and likely won't be for some time to come. If there ever was a time to make such an educational appeal, it's now.
Such an education won't happen in a few brief moments by a viral video that captures the issues for all. Rather, it will take a sustained effort that treats the learners as intelligent adults, yet they are perhaps baffled by many economics issues, as indeed I find myself baffled even though I have a PhD in economics. Below I list some questions and my tentative answers to them, which others are free to challenge on the analysis. Any such education of upscale voters will need answers that are understandable and in accord with the economic analysis of administration economists.
On Taxation at the Federal Level
- The U.S. Government has the ability to issue new debt (government bonds) to finance additional spending. This is an alternative to raising taxes to finance additional spending. When should it use one method and when the other?
Old Answer: When the economy is operating well below capacity, a high unemployment rate an indicator of this, then deficit financing to boost aggregate demand is appropriate. In addition to the direct benefit the spending provides, there is a multiplier effect that helps to bring the economy back to operating near full capacity. When the economy is already at full capacity, then the new spending should be financed by increased taxes. Depending on how those taxes are raised they will either reduce private consumption or private saving and that is what is really paying for the new government spending.
New Answer: Krugman had an interesting column on this recently and I'm basing what I say on that. In the past we've worried about the Debt to GDP ratio. But interest rates have been very low for quite some time. Krugman argues that this is likely to be continue to be true in the long run, due to low population growth, which we can expect will persist. So we should worry more about debt service - the interest payments on the debt. Partial deficit financing may then make sense, even when the economy is at full capacity. But there will still be a need for some of the new spending to be financed out of tax increases. The right balance between the two still needs to be worked out. - If taxes are to be raised is there a right balance between raising rates and capping deductions?
My Answer: Deductions are sometimes referred to as tax expenditures - government policy to encourage a certain type of spending initiated either by individual citizens or by localities. So, for example, the mortgage interest deduction encourages home ownership over renting. Likewise, the deduction for charitable giving encourages donations to charity. As there is a standard deduction, which most taxpayers will use, the tax benefit for itemized deductions accrues to wealthier taxpayers. In that sense, itemized deductions are the opposite of progressive taxation (where marginal tax rates rise with income). So, in my view these deductions should be capped, in aggregate, not with a hard cap that is the same for everyone but with a percentage cap that is hard so the actual cap varies with income. Undoubtedly non-profits that rely on donations will object to this. That is a separate issue and needs to be worked out elsewhere. If there were such a percentage cap imposed on deductions, raising additional taxes would require raising rates. In my view this should be done based on a principle of progressive taxation - the higher income taxpayers would face higher rates. - Is there a socially desirable set of tax rates that we should stick with? Or should rates continue to vary with economic circumstance?
My Answer: Some will point to the tax rates that were in place right before Reagan became President as offering the ideal. However, if one looks at the history of tax rates since then one will note that they have changed with some frequency. This suggests strongly that which party is in power matters as to what the tax rates will be. Let me wave my hands here and assume that isn't an issue. Instead imagine rates are set by a benevolent social planner. (This is a convenient dodge that economics professors use to discuss optimal taxation.) In this case one might imagine the planner determines that long term ideal set of rates and then announces that we'll get there in a series of steps rather than in one fell swoop, so taxpayers who will see their rates rise can make adjustments to that. How many steps there would be and how frequently a new step would be take still needs to be determined. Once the long term structure has been set, it would be good to stick with it, though temporary tax increases remain a possibility if dire circumstances suggest they are needed.
On State and Local Taxes and Spending
- Given that some states (or localities) are high tax while others are low tax and K-12 public schools are financed at this level, how can we guarantee a decent education for all students?
My Answer: This is truly a disaster, in my opinion. Plessy v. Ferguson is no longer the law. But as Jonathan Kozol documents, for example in The Shame of the Nation, it is still the practice in Apartheid schools. The short term answer, and this will be quite a heavy lift politically, is to extend the Biden economic initiative by providing substantial funding to schools in low income areas. This money must go directly to the municipality or even to the individual schools. It should not be filtered through the states, which will likely redirect the funds to wealthier districts. In the longer term, either the Federal government takes over the funding of public schools, or the states and localities figure out a way to equalize funding for schools across districts. This won't be easy. We should not kid ourselves that it will be otherwise. But it is necessary. - If adjacent states have quite different tax rates, how does one prevent wealthy people from migrating to the lower tax state so they can lower their tax burden?
My Answer: The logic of state government goes back to the colonial period. If we were to design government jurisdictions anew, we might find that local government is still necessary but state government is not. For example, that each state has its own public university system instead of one national public university system is very hard if not impossible to justify on efficiency grounds. I view this as another example of lock in that was discussed above. One possible solution to this is to have some of what is currently state expenditure to evolve into federal expenditure, so that what remains at the state level is small and those tax differentials become smaller as well. Another possibility is to incentivize states to equalize their tax rates with their neighboring states, via Federal grants. A third possibility is to make the tax deduction for state and local taxes depend on the tax rates in neighboring states.
On the Free Rider Problem and How to Avoid It Derailing Upscale Voters from Paying Higher Taxes
- The reality is that what any individual contributes in increased taxes is a drop in the bucket compared to the aggregate contribution. If others were indeed unselfish and did pay more in taxes, wouldn't it still be rational for an individual taxpayer to remain selfish and look for ways to avoid paying any tax increase? But if this is true in general, wouldn't it defeat the underlying idea entirely?
My Answer: A group of peers needs to monitor each other. The group as a whole needs to agree to the increased tax burden and then with some frequency the group needs for each member to account for how the member is meeting that burden. Making this an individual matter will encourage the selfishness to stick. Instead, letting this become a social matter has a chance for such a change to take hold.
In the above I've stuck with taxes and haven't considered the question of consumption of local public goods as a choice. It too is a big deal issue. For example, will parents send their kids to the local public school even after changes in zoning restrictions mean kids in that school will come from families with varying incomes? Or will the wealthier parents opt for a stratified solution, like what I described was happening in NYC when I was a student? I don't have a full answer for this, but I do want to note the following. If somehow we were able to return to a middle class society with much less income variation about median household income, there would be far less incentive for parents to game the system to get their kids into elite schools as the financial return from doing so would be far less. So I think it is possible to imagine a world where most every kid went to the local public school and each of these schools was of decent quality. Getting there from where we are now, however, will be an enormous undertaking.
I want to close. I meant my bulleted list of questions and answers merely as suggestions of what is needed to consider educating the populace on the desirability of flattening the income distribution and how that might be done. Surely these issues would need to be debated and fleshed out a lot further. And it may be that other relevant issues I haven't considered at all need to be brought to the fore. So be it.
And I want to make a bow to my own selfishness. I have a tendency to write quite long posts. Partly this is to allow my own formative thinking to give a full exploration of the subject matter. And partly it is because I think the reader needs context for considering what is said, so I want to provide that context. But I'm fully aware that this cuts against the trend where shorter pieces are apt to gather more readers, while longer pieces are ignored. It's true that I'd like to have more readers. Yet in this choice I opt to first and foremost please myself. Maybe some selfishness can never be overcome.
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*I have felt for some time that in our social thinking too much burden for a child's education has been placed on school and not enough thought has been given to education opportunities outside of school, which can be substantial. The most obvious of these is having the student develop a strong reading habit, which would promote self-education and help the student develop a very important life skill. Unfortunately, it cuts against current trends. It is also true that reading itself is asocial and without some subsequent way for the student to talk about what was read with others the reading may be seen as a path toward loneliness.
Nevertheless, if the criticism of classes that are not tracked is that is that very bright students might get bored, giving such students more opportunity to learn on their own may be a reasonable answer. Further, there might be some social interaction found in such students helping other students who are more challenged by the course content. If this is done in a non-threatening way it can benefit both students and seem a natural thing to do.
Let me conclude this aside with the observation that even within the SP and the Honors classes there was far from full equality regarding how bright students were, imperfectly measured by their GPA. I was one of those very bright students. I don't remember ever being bored, but I do remember goofing off with friends quite a bit. Was this purely wasting time in an otherwise unproductive way? Or was some of this developing both valuable social skills and outside-of-school ideas that wouldn't happen with only the formal education. It is not good social science to generalize completely from one's own experience, but I'm prone to think that since it was more the latter for me, it could be the latter for other students too. And, perhaps equally important, none of it was the sort of thing you'd put on a resume, so you did it because you wanted to. Nowadays, with so many kids entirely instrumental about their education, some of this learning as play with friends surely would be a step in the right direction.
