The Great Retrenchment of 2022
I was going to respond in just a note to this paper (free download) by Biden Administration honcho Samuel Bagenstos (‘SB’), now at the U of Mich Law School, but it’s too important. It also scratches many of my itches. In a good way.
The basic story is that the Bidens brought forth a plateful of social welfare expansions in 2021, in the teeth of the Covid crisis, all of which were subsequently taken back, and under Trump, will be reversed by the end of this year to less than what we had five years ago (before Biden).
The key question addressed is the weakness of the old theory that social benefits that are “universal” are politically durable because they are universal. This happens to be a point invoked in dumb advocacy of the so-called “Universal Basic Income” (UBI) that I have been ranting about for years. (Here’s a sample.)
On the broadest level, the “entrenchment theory” was developed in a period of relative political normalcy, which seems well out the window these days. Today a president sees fit to utter perfectly ridiculous statements on a daily basis. The implied political-cultural chaos detracts from the generality of any such theory.
The bulk of the paper is a useful layout of the Biden-era initiatives, along with copious documentation of their benign effects on poverty and other social indicators. Perhaps the most poignant note is the finding that under Biden the U.S. uninsured rate was ground down to 7.7 percent. With Trump’s Medicaid and ObamaCare cuts in prospect, it is set to crank back up.
Closer to SB’s story is the notion that employers killed the social benefits. SB provides a few bits of evidence in this vein, but the weight of it strikes me as insubstantial. The theory is perfectly reasonable, even appealingly Marx-y. Kalecki and Cloward-Piven come in for honorable mention. No doubt employers are very interested in the disposition of Unemployment Insurance, itself the object of a significant, temporary expansion in 2021.
We were certainly treated to an avalanche of complaints that Covid-inspired social benefits financed a “Great Resignation” — a plague of workers refusing to work. But we could just as well imagine this as ordinary Republican/conservative bitchery (with crucial assists from senators Joe Manchin and Kyrsten Sinema). In that sense, it’s a routine hurdle that must always be overcome. It’s like saying the capitalists won’t let us have socialism.
This matters for me as a democratic socialist whose idea of progress depends on incrementalism. SB paints the Biden/Covid moves as leading toward universalist benefits in the manner of UBI. UBI is not my destination.
SB raises a point about ‘universality’ that I did myself a while back. (I very much doubt he followed my scribbling.) Social Security, for instance, is not universal, certainly not the way that UBI schemes are suggested. Benefit eligibility depends on an employment record, among other things. SB suggests, as I did, that the key metric was the size of the beneficiary clientele.
That points to a question not mentioned in the paper. Why do we still have “food stamps” (now called the Supplemental Nutrition Assistance Program). SNAP is less “universal” than other benefits, but its clientele is huge. It has certainly been under assault, in the form of work requirements, but it endures nevertheless.
As a sort-of Marxist, I completely dig the idea that social benefits offer a temporary refuge from the oppressions of employment, one that enhances the bargaining power of labor. I also doubt that any tenable UBI, in the sense of financing an adequate standard of living, is financially realistic. (Tell me what your idea of a basic income is, multiply it by the U.S. population of 330 million, and compare that to the entire Federal budget.)
My folk wisdom on this, for which I have zero academic or research support, is that most people would not be content with any remotely plausible UBI. It would either be insufficiently low, or it would clash with their idea of earning an honorable living. Few are willing to be thought of, or think of themselves, as lazy reprobates. (Personally I have no problem with it.) Nobody would refuse a UBI check, but it is not what most people want.
SB diagnoses the great retrenchment as a sign of flagging labor movement power, including a failure by the Administration to undertake a comprehensive marketing campaign on behalf of its benefit expansions. I neither believe nor disbelieve this explanation. As working economists like to say, more research will be needed, and no, I’m not in the market for supplying any such research. I lack the strength.
He makes a point I am taken with, that the great debate about social benefit expansions centers on pitting the ‘truly needy’ with the population as a whole, which to me means the working class. It’s useful, and revolting, to note that enemies of social welfare pitched their case as a desire to nourish the most needy by avoiding wasting money on regular folks. The other key contrast was remporary aid for those in momentary distress, versus permanent benefits that fostered cultural ‘welfare bum’ degeneracy.
To be clear, I am all for cash benefits. The correct model is the negative income tax (NIT). UBI advocates like to say everything is a UBI, including the NIT. No. UBI means an unconditional cash grant that goes to every living soul annually and supports a ‘basic’ standard of living. It ain’t happening.
A few other quibbles. If I understood him, SB suggested that more stringent eligibility requirements reduce administrative costs. I could imagine an opposite finding related to another UBI bitch of mine.
It’s been said that universality reduces administrative costs. Oh really? Who makes and maintains the list of people to whom the checks are sent? Would they go to immigrants? Felons? The insane? Seymour L. Chapo?
Some people think the Post Office has everyone’s address. It does not. It knows physical addresses, not necessarily who resides there, much less anything about them. You could buy your cat a subscription to The Washington Post for obvious purposes and it would start getting other mail, maybe a credit card.
Another quibble, again re: UBI. SB quotes others to the effect that UBI or somesuch would be financed out of profits. Another pet peeve of mine. Someone check the volume of corporate profits against the notional cost of a UBI mentioned above. For real social-democracy, or for a UBI that is defensibly ‘basic,’ the tax system will have to cast a much wider net than profits and ‘the rich.’
Short term, the individual income tax could supply much more revenue. It has in the past. Longer term, to that could be added a repaired estate and gift tax and a progressive consumption tax. The former would be for political purposes, to curb the power of the rich, the latter to pay for all the nice things we need.
That’s for the future. Right now, we’re playing defense on the five yard line and we need to stop the imminent tush push.