Worker productivity, spending and the Democrat's big infrastructure bill

The Washington Post published an interesting article this morning and a possible sustained increase in worker productivity. That might sound boring to some, but it really isn't.  When productivity increases, wages tend to increase and the overall economic situation tends to be solidly good. One of the key points is that the second infrastructure bill the Democrats have advocated and, not surprisingly the fascist Republican Party (FRP) opposes, increases funding for R&D. Economists point to that as a good indicator of increased productivity. 

Evidence of the increase is in recent data. Second quarter worker productivity grew by 2.3% and 4.3% in the first quarter, according to the Bureau of Labor Statistics. Productivity gain in the decade after the financial crisis averaged 1.2%.

WaPo writes:

Rapid adoption of robots and artificial intelligence during the pandemic combined with a rebound in government investment is making some economists optimistic about a return of a 1990s economy with widespread benefits.

As companies and customers embrace new technologies, making it easier for Americans to produce more with fewer workers, a growing number of economists say this is not a blip and could turn into a boom — or, at least, a “mini boom” ― with wide-ranging benefits for years to come.

Higher productivity typically leads to more goods and services available at a lower cost and increases in wages. Without it, economic growth is sluggish.

“America used to do a lot more public investment and it used to grow faster. I don’t think that’s a coincidence. It seems like we are reentering an era of public investment,” said professor Erik Brynjolfsson, director of Stanford University’s Digital Economy Lab. He forecasts “a productivity surge that will match or surpass the boom times of the 1990s.”

The other key dynamic is increased government investment in the economy. The $1.2 trillion bipartisan infrastructure bill that recently passed the Senate has received widespread praise among business leaders and economists. The decision to stimulate the economy has also created a lot more demand than normal coming out of a recession, which is helping drive continued productivity and business investment.

“Infrastructure investment certainly has the potential to improve our productivity,” said Julia Coronado, founder of MacroPolicy Perspectives and a former Federal Reserve economist.

The nation hasn’t seen this kind of public investment in years. Improvements in roads and bridges are much needed, but economists are most excited about the money in the bill to expand and enhance broadband, and research and development. Democrats are also working on a $3.5 trillion spending package that is more controversial, though some economists praise parts of that bill that would expand child care and paid leave to make it easier for more U.S. parents, especially mothers, to work.

“It won’t be a game changer to just fix roads and bridges. It will help at the margin, but it’s not transformational,” Coronado said. Instead, she noted that “creating more child-care infrastructure could cause the labor market to be more dynamic and drive stronger workforce participation from women.”

Higher productivity could also alleviate many of the nation’s top economic concerns. Inflation is currently running at a 13-year high, with many Americans citing it as a big worry. As prices for so many goods and services rise, workers can’t afford to buy as much. Productivity gains typically lead to lower prices since factories and offices can produce more, and it tends to bring higher pay as workers are seen as more valuable and effective.  

“We are going to be short of young people. So all the tasks that were being done with the prior amount of the labor will have to be automated quite a bit,” said Rajeev Dhawan, director of the Economic Forecasting Center at Georgia State University. “There won’t be that many drivers available for Uber and garbage trucks and all that. It’s very clear. Something will have to give.”

This is some rationale to think that the broader infrastructure spending the Democrats want could have good economic effects. Despite that, the FRP constantly attacks it because it believes that things like daycare and expanded broadband access aren't infrastructure. The FRP's fascist ideology considers (1) that infrastructure is roads, bridges, railroads and not much more, and (2) government and domestic spending is unconstitutional, evil, socialist and ineffective at everything other than (i) running a huge military-industrial complex, and (ii) courts to defend and advance the the dominant interests of the FRP and its wealthy donor class, namely power, wealth and non-democratic government. 

It's not clear why some of the FRP in congress voted for the first, narrower bill. After all, the spending is still evil, socialist and something Democrats want. The FRP vehemently opposes all of that. If the FRP had its way, all infrastructure, like 100% of public schools, would be privatized and run by the always better free markets. Probably fear of the 2022 elections mostly explains it. Re-election first, ideological coherence second.

Questions: If the productivity boom does sustain itself for a while, say at least the next six months, would that justify spending on the Democrat's broader vision of what constitutes infrastructure these days, or does one need to wait a couple of years to assess the cost-benefit? Is one or both infrastructure bills and their spending socialist, unconstitutional and/or evil as the FRP and its ideology sees it? Should all infrastructure and all public schools be privatized as the FRP wants, or is it exaggerated and inaccurate to say that is what the FRP wants? Is it exaggerated and inaccurate to say that the Republican Party, including its rank and file, is fascist? 

Any thoughts on Afghanistan?

The end of the end game is starting to become clear. The next few days ought to shed more light on the end of the very end. For example, will the Taliban allow militarily unopposed flights out to evacuate Americans and allies, or will we have to fight our way out on foot into Pakistan? Will the US actually be able to evacuate its allies? How many will be left behind? Who lied to the American people, when did they lie and who gets what share of credit or blame? What did the former president do or not do to prepare the US to get out by the May 1, 2021 deadline that the usually incompetent Lyin' Donnie "negotiated," assuming he actually negotiated anything of substance? What did Biden do well or badly? What whoppers did Obama and Bush lay on us? How culpable is the US intelligence community for not coming close to reading the situation, assuming they did misread it?

Taken together, the answers will help shape reasonable answers to who gets how much credit and/or blame. Over the next month or two, it is reasonable to expect more important information to come out. That could reasonably change assessments made now. 

Skinny children playing with detritus of war

At the grocery store

Children playing, I think

The guy in the cage just might be hosed

Town meeting! Town meeting!

Afghan women expressing their unique identities

A displaced family on the move

At the bakery

At school

Friendly Taliban folks

Thoughts on tax subsidies for religious organizations

No church property is taxed and so the infidel and the atheist and the man without religion are taxed to make up the deficit in the public income thus caused. -- ascribed to Mark Twain, but it's nonetheless true if someone else said it

Context

Although this topic is complicated and probably boring to most people, I believe it is far more important than most know. In my opinion, it is one of a few central aspects of potentially lethal political and social threats to secularism, American democracy, the rule of law, civil liberties and transparent, honest governance that I and some other people strongly believe is now dire and imminent. 

Included in this blog post are some points and counterpoints raised by informed, intelligent people about tax privileges for religion in the US. They are in disagreement about the nature and cost-benefits of the US government allowing the gift of unique tax privileges for religion worth tens of billion per year.  But they strike me as (1) much better informed than ~98% of the American people about this, including at least ~95% of the people and organizations that run this country, and (2) quite thoughtful and sincere.

In my opinion, public ignorance of this issue underpins public complacency and its inability to see the seriousness of the threat.

The church-tax break industrial complex is especially privileged, opaque, 

resists transparency and thus can be corrupt 

Point: Churches are the same as other non-profits, and they do not enjoy special privileges in their tax exempt status.

Counterpoint 1: Not true. Religious organizations have a number of important benefits that secular 501c(3)s do not. First, no application is required from a religious organization. The US government grants tax exempt status without application, and without any need to demonstrate that the exemption serves the purpose for which it was offered. Second, unlike secular 501c(3)s, religious orgs are not required to make their accounting public, ensuring that their operations are opaque. Third, it is extremely difficult for the government to audit them. A very high level official at the IRS must sign off on the audit - unlike all other non-profits. The result of this is that there have been but a handful of such audits in decades, and their ability to run opaque operations is matched by their ability to avoid any oversight.

Counterpoint 2: The opacity is central to the entire church tax break-industrial complex. By estimates in 2012 and 2013, tax breaks were worth ~$70-80 billion/year. Those estimates are likely significantly understated because complete information was impossible to obtain. Many religious groups refuse to disclose their finances for analysis. Not surprisingly, sometimes that opacity hides massive wealth, e.g., a secret ~$100 billion investment fund, that essentially no one knows anything about, including the US government. Gains on those investments are not taxed. The amount of the gains are unknown. The amount of crime that may be involved is apparently unknown, which makes sense. We only find out about crimes after a whistleblower files a whistleblower complaint in hopes of making a lot of money. 

The scope of religious tax breaks is broad

Religious organizations pay no sales tax. When representatives of a religious entity make a purchase such as office supplies, cars or travel, they are exempted from local sales taxes. They also pay no income taxes for businesses they own, if they can show that the business furthers the objectives of the religion. For example, a bookstore that sells religious books would be exempt. Clergy and members of religious orders are the only citizens who can opt out of paying Self-Employed Contributions Act taxes, which are 15.3% taxes on income for self-employed individuals that pay for Social Security and other federal benefits. If they opt out, they don't get social security benefits on retirement.

Religious organizations pay no property taxes, which are used primarily to fund local services such as firefighting, emergency medical services and police departments, schools and other infrastructure, all of which religious organizations use. One analysis indicated that the value of property one Florida county, Manatee county, asserted to be fairly typical for moderately populated US counties was $406.7 million. Property tax savings in that county amounted to $8.5 million annually, or about 1% of the county  budget. Extrapolated nationally, that benefit would amount to about $6.9 billion/year.

Tax breaks and religious freedom

Point: Denying religious organizations tax exempt status unfairly or illegally singles out religious churches and groups specifically and punishes them by denying them the same opportunities offered everyone else.

Counterpoint: Not true. Any religious organization is free to create a subsidiary non-profit, whose tax exempt status would then be the same as for any other. There is no reason a homeless shelter or kitchen for the undernourished couldn't be run by a church as a non-profit, but it could not be run as a church. Many businesses run subsidiary non-profits, like the Coca Cola Foundation.

The foregoing only hints at the complexity of the religious tax subsidy issue. Other serious aspects of this include fights over constitutional interpretation, fights over Free Speech and fights over the Establishment clause. The powerful Christian nationalism political movement is highly focused on advancing legal arguments to expand its reach into the US treasury. It has been refining and advancing those arguments for years with slowly increasing success in recent years as the number of radical Christian nationalist federal judges increase in dominance. With each expansion of access to tax dollars the federal courts grant, the Christian nationalist movement's power and influence increases and so does the intensity of the attack on democracy, the rule of law, civil liberties, secularism, and honest governance. 

Immediate concerns vs long term concerns

 Before Covid I would meet every weekend for coffee with a group of friends and we would talk sports, politics, and yup - gossip.

That was on hold for a while, now we are back to getting together on the weekends at our favorite coffee shop (which is observing limited seating) to hash out this and that.

I expressed an opinion recently to Germaine, that U.S. politics and the worry about the rise of rightwing fanaticism is not THE biggest worry I have, it is the environment, because it IS more of a "existential" threat not only to Americans, but the world.

Now new flags are being raised about what will happen in Afghanistan, and will terrorism grow again there so at some point we will AGAIN have to deal with another ISIS or Al Qaeda situation.

Maybe, because it is too far away for my feeble mind to contemplate, but I just can't get overly concerned about what will happen next in Afghanistan, neither (as I have expressed multiple times) am I AS concerned about rightwing politics. For me it is the environment.

So, back to my having coffee with my friends. We raised this subject of what is most worrisome to us right now - and to those who I have coffee with two things were MORE worrisome to them than even the environment.

They stated first worry is Covid variants and the rapid spread of the Delta variant, and the 2nd worry was inflation - they are convinced inflation is going to get a lot worse, and they see the spread of Delta and the rising costs of goods going hand in hand.

When I tried to argue that as long as you are vaccinated and keep masking your risks are low, and inflation is something that can be absorbed, but you can't stop worrying about the environment because of the existential risk, they balked and said that YES while the environment is a concern the immediate concern should be fighting misinformation and getting everyone vaccinated and finding ways to combat inflation.

Not to be critical (though no doubt I am sounding critical) but clearly their views on what is the most worrisome is what is most close to home and immediate. MAYBE that is why so many people worry about what the Republicans are up to, it is close to home and immediate.

So, are people like myself, who are less worried about the immediate crisis and worry more about future dangers off base? Or is it just human nature to view future dangers as less important than those dangers we perceive as immediate? 

Weigh in.

Some thoughts on ideology in politics, cognitive biology and pragmatic rationalism

Context

My ideology, pragmatic rationalism, is intended to function as an anti-biasing, anti-ideology ideology. The core concepts are based on what human social behavior and cognitive science tells us about sources of flawed politics and policy such as bias, error, irrational distrust, false beliefs and flawed reasoning (motivated reasoning). Political, religious and/or economic ideologies, constitute major sources of flawed politics. With the dominant ideology-based mindset, politics and policy are largely grounded in ideology and competition for ideological influence. In the pragmatic rationalist mindset, the hope is to shift politics and policy from mostly ideology-based to somewhat more empirical evidence and sound reason-based. Nothing can be perfect, but it's at least theoretically possible to do better. That's the hope. Some evidence supports this possibility for at least some people.

Ideologues of all flavors of ideology strenuously claim (1) they are empirical evidence and sound reason-based, and (2) political opposition and opposing groups and institutions are not. Evidence from social science convincingly shows that is simply not true most of the time for most issues. Politics usually significantly disconnected from evidence and sound reasoning is settled science. Like human-cause climate change, this not something that experts still dispute. 

A 2013 research paper 

The concept of ideology can be difficult to reconcile with empirical research on political knowledge and belief system organization. First, ideology is a construct that is used at multiple levels. Political ideologies exist as formal systems of political thought. Texts on Marxism, liberalism, conservatism, and fascism develop elaborate interpretations of social, economic, and political arrangements and offer prescriptions for political actions. In somewhat less structured ways, ideologies operate at the societal level to organize political debate by allowing political parties to offer more or less coherent policy platforms. And, in the primary focus of this chapter, ideology is also used to describe the ways in which people organize their political attitudes and beliefs. It is easy to introduce confusion into discussions of ideology by blurring the lines between these levels of analysis. Some connections between these levels should exist, but we must not make the mistake of assuming that there are straightforward relationships between these varied uses of ideology. While I will review a great deal of important research on the structure and determinants of political ideology in this chapter it is important not to lose sight of the implications of low levels of political knowledge, instability in measures of issues preferences, and multiple dimensions of issue preferences when evaluating research on individual-level political ideology. At a minimum, these findings encourage us to consider models of ideology that do not require a great deal of sophistication from most people and to be aware of the limits of ideology among nonelites. --- Feldman, S. (2013). Political ideology. In L. Huddy, D. O. Sears, & J. S. Levy (Eds.), The Oxford handbook of political psychology (pp. 591–626). Oxford University Press.

What that says is that average people generally do not apply ideology in sophisticated or consistent ways. My interpretation is that ideology can be used as a glue to help hold groups of people together, while at the same time be a framework lens to inform or misinform people and to divide societies by creating in-groups (e.g., Republicans) with credibility and trust and out-groups without (e.g., Democrats). 

Another 2013 research paper 

Decision scientists have identified various plausible sources of ideological polarization over climate change, gun violence, national security, and like issues that turn on empirical evidence. This paper describes a study of three of them: the predominance of heuristic-driven information processing by members of the public; ideologically motivated reasoning; and the cognitive-style correlates of political conservativism. The study generated both observational and experimental data inconsistent with the hypothesis that political conservatism is distinctively associated with either unreflective thinking or motivated reasoning. Conservatives did no better or worse than liberals on the Cognitive Reflection Test (Frederick, 2005), an objective measure of information-processing dispositions associated with cognitive biases. In addition, the study found that ideologically motivated reasoning is not a consequence of over-reliance on heuristic or intuitive forms of reasoning generally. On the contrary, subjects who scored highest in cognitive reflection were the most likely to display ideologically motivated cognition. These findings corroborated an alternative hypothesis, which identifies ideologically motivated cognition as a form of information processing that promotes individuals’ interests in forming and maintaining beliefs that signify their loyalty to important affinity groups. 

Much more perplexing, however, are the ubiquity and ferocity of ideological conflicts over facts that turn on empirical evidence. Democrats (by and large) fervently believe that human activity is responsible for global warming, Republicans (by and large) that it is not (Pew Research Center, 2012). --- Ideology, Motivated Reasoning, and Cognitive Reflection: An Experimental Study; Judgment and Decision Making, 8, 407-24 (2013) Cultural Cognition Lab Working Paper No. 107 Yale Law School, Public Law Research Paper No. 272

Clearly, even before the ex-president rose to power, researchers were well-aware of the phenomenon of people fighting over empirically true facts. Political observers had written on that years ago. The data here indicates that this does not have anything to do with differences in cognitive ability, roughly intelligence. It is grounded in psychological and social factors such as tribe and ideology.

A 2015 paper abstract

In this commentary, we embed the volume’s contributions on public beliefs about science in a broader theoretical discussion of motivated political reasoning. The studies presented in the preceding section of the volume consistently find evidence for hyperskepticism toward scientific evidence among ideologues, no matter the domain or context—and this skepticism seems to be stronger among conservatives than liberals. Here, we show that these patterns can be understood as part of a general tendency among individuals to defend their prior attitudes and actively challenge attitudinally incongruent arguments, a tendency that appears to be evident among liberals and conservatives alike. We integrate the empirical results reported in this volume into a broader theoretical discussion of the John Q. Public model of information processing and motivated reasoning, which posits that both affective and cognitive reactions to events are triggered unconsciously. We find that the work in this volume is largely consistent with our theories of affect-driven motivated reasoning and biased attitude formation. --- Why People “Don’t Trust the Evidence”: Motivated Reasoning and Scientific Beliefs, Patrick W. Kraft, Milton Lodge, Charles S. Taber,[1] The ANNALS of the American Academy of Political and Social Science, 2015

Here, the concept of motivated reasoning is seen as central to ideologue thinking when empirical evidence is rejected. Ideologues tend to treat their political and economic beliefs as as both sacred in a religious sense and correct and thus not open to question. Religious ideology, of course, is usually seen by the believer's mind as sacred and infallible.

Footnote: 

1. Lodge and Taber wrote the 2013 book, The Rationalizing Voter. A non-technical book review is here and a technical review is here. Lodge and Taber focused a lot on affect or feelings and how they influence perceptions of reality and thinking. This aspect of the how the human mind operates seems to be central to politics.

A 2009 research paper, Affect as a Psychological Primitive, described emotion and feelings like this:

Historically, “affect” referred to a simple feeling—to be affected is to feel something. In modern psychological usage, “affect” refers to the mental counterpart of internal bodily representations associated with emotions, actions that involve some degree of motivation, intensity, and force, or even personality dispositions. In the science of emotion, “affect” is a general term that has come to mean anything emotional. A cautious term, it allows reference to something’s effect or someone’s internal state without specifying exactly what kind of an effect or state it is. It allows researchers to talk about emotion in a theory-neutral way.

The phrase, 'internal bodily representations associated with emotions' reflects a belief that some or all of the human body can contribute to feelings in the mind. Some researchers occasionally refer to this as speaking directly to the gut, not the mind. The point is that there is evidence to believe human emotions and feelings are powerful influencers of perceptions of reality and thinking about whatever reality individuals think they see, including when the reality is false. Strong ideological beliefs tends to make it easier to deny, distort and/or downplay inconvenient facts, truths and sound reasoning. 

The ties that bind…

 

 

This OP is mostly directed at U.S. bloggers here, but please, all feel free to chime in with your opinions/insight. 

Afghanistan is in the news a lot lately. Understandable, in light of the final withdrawal of our military troops there. Provinces are falling daily with an almost complete Taliban takeover of that country. 

Reasons we’ve heard for the major takeover have included government corruption, self-preservation in the form of submission to the ever-encroaching dangerous enemy, resentment for being “abandoned,” equipment malfunctions, etc.  Things are looking beyond bleak for the Afghan people/citizenry.  No… democracy did not come to fruition there, in spite of Herculean efforts of blood and treasure.  

That got me wondering, when we (when I) zoom out to the 30k-foot level, are there not similarities between those people and our own, here in the U.S.?  We also have:

Religious and cultural differences and attempts at imposition (e.g., WCN and its many tentacles), dysfunction, scandals and corruption shenanigans, extreme political tribalism, etc.  Does not the U.S. currently experience the same kinds of things?  Spoiler alert: Gotta give that a “Yes.”

When those nasty dominoes fall, they tend to take down all around them. There is no special magic, no super-glue, that steadfastly holds the US together.  Personally, I think that’s just a starry-eyed rumor that we keep telling ourselves.  Dysfunction, in the forms mentioned above, abound.

So, my question:

What is the specific glue that binds us, here in 2021?  Are we not barrelling down the same paths as other dysfunctional countries?  If you say “no,” tell me what you base that on, because I’m not that hopeful/convinced.  Be as specific as you can.

Thanks for posting and recommending.