Paul Krugman | Biden and the Future of the Family – The New York Times

https://www.nytimes.com/2021/05/03/opinion/biden-family-aid.html?action=click&module=Opinion&pgtype=Homepage

Opinion Columnist

“Like many progressives, I like the Biden administration’s plan to invest in infrastructure, but really love its plans to invest more in people. There’s a good case for doing more to improve physical assets like roads, water supplies and broadband networks. There’s an overwhelming case for doing more to help families with children.

To Republican politicians, however, the opposite is true. G.O.P. opposition to President Biden’s infrastructure plans has felt low-energy, mainly involving word games about the meaning of “infrastructure” and tired repetition of old slogans about big government and job-killing tax hikes. Attacks on the family plan have, though, been truly venomous; Republicans seem really upset about proposals to spend more on child care and education.

Which is not to say that the arguments they’ve been making are honest.

How do we know that we should be spending more on families? There is, it turns out, a lot of evidence that there are big returns to helping children and their parents — stronger evidence, if truth be told, than there is for high returns to improved physical infrastructure.

For example, researchers have looked into the long-term effects of the food stamp program, which was rolled out gradually across the country in the 1960s and 1970s. Children who had early access to food stamps, the Washington Center for Equitable Growth concluded, “grew up to be better educated and have healthier, longer and more productive lives.” Researchers have found similar effects for children whose families received access to the earned-income tax credit and Medicaid.

Paul Krugman | Good Luck to Republicans if Biden’s Family Plan Becomes Law – The New York Times

https://www.nytimes.com/2021/04/29/opinion/child-care-biden.html

Mr. Krugman is an Opinion columnist.

“Conservatives beware: If the main elements in Joe Biden’s American Family Plan become law, they’ll be very hard to repeal. Why? Because they’ll deliver huge, indeed transformational benefits to millions.

I mean, just imagine trying to take away affordable child care, universal pre-K and paid leave for new parents once they’ve become part of the fabric of our society. You’d face a backlash far worse than the one that followed Republican attempts to eliminate protection for coverage of pre-existing health conditions in 2017. And that backlash quickly gave Democrats control of the House and set the stage for their current control of the Senate and White House as well.

So what’s the Republican counterargument? Well, much of the party appears uninterested in debating policy, preferring to lash out at imaginary plans to ban red meat or give immigrants Kamala Harris’s children’s book.

The official G.O.P. response to Biden’s speech on Wednesday, by Senator Tim Scott, seemed low-energy; Scott is still complaining about “big government” and denouncing Biden for spending money on things other than roads and bridges. The closest thing to a real argument was the claim that Biden is proposing “the biggest job-killing tax hikes in a generation” — presumably a reference to Bill Clinton’s tax increase in 1993.

Indeed, Biden intends to pay for his proposals with higher taxes on corporations and high-income individuals, including a dastardly plan to give the Internal Revenue Service enough resources to crack down on wealthy tax cheats.

It’s important, then, to realize that the family plan would, if enacted, be a major job creator. That is, it would increase the number of Americans — women in particular — in paid employment substantially, probably by several million.

To understand why, the first thing you need to know is that while Republicans always claim that raising taxes on the rich will destroy jobs, they have never yet been right. Scott’s rejoinder to Biden appeared to suggest that the 1993 Clinton tax hike killed jobs; in reality, the United States added 23 million jobs on Clinton’s watch. People also seem to forget that Barack Obama presided over a significant hike in high-end taxes at the beginning of his second term; the economy continued to add jobs rapidly, at the rate of about 2.5 million a year.

Oh, and employment in California boomed after Jerry Brown raised taxes on the wealthy in 2012, defying conservative declarations that the state was committing economic suicide.

It’s also instructive to compare the United States with other advanced countries, almost all of which have higher taxes and more generous social benefits than we do. Do they pay a price for these policies in the form of reduced employment?

Many Americans would, I suspect, be surprised to learn that the truth is that many high-tax, high-benefit countries are quite successful at creating jobs. Take the case of France: Adults between the ages of 25 and 54, the prime working years, are more likely to be employed in France than they are in America, mainly because Frenchwomen have a higher rate of paid employment than their American counterparts. The Nordic countries have an even larger employment advantage among women.  . . . “

Paul Krugman | Helping Families Will Help Create Jobs – The New York Times

Mr. Krugman is an Opinion columnist.

“Conservatives beware: If the main elements in Joe Biden’s American Family Plan become law, they’ll be very hard to repeal. Why? Because they’ll deliver huge, indeed transformational benefits to millions.

I mean, just imagine trying to take away affordable child care, universal pre-K and paid leave for new parents once they’ve become part of the fabric of our society. You’d face a backlash far worse than the one that followed Republican attempts to eliminate protection for coverage of pre-existing health conditions in 2017. And that backlash quickly gave Democrats control of the House and set the stage for their current control of the Senate and White House as well.

So what’s the Republican counterargument? Well, much of the party appears uninterested in debating policy, preferring to lash out at imaginary plans to ban red meat or give immigrants Kamala Harris’s children’s book.

The official G.O.P. response to Biden’s speech on Wednesday, by Senator Tim Scott, seemed low-energy; Scott is still complaining about “big government” and denouncing Biden for spending money on things other than roads and bridges. The closest thing to a real argument was the claim that Biden is proposing “the biggest job-killing tax hikes in a generation” — presumably a reference to Bill Clinton’s tax increase in 1993.  . . . “

Paul Krugman | What’s the Secret of Biden’s Success? – The New York Times

Opinion Columnist

Credit…Angela Weiss/Agence France-Presse — Getty Images

“Stop me if you’ve heard this one before: A new Democratic president has inherited a nation in crisis. His first major policy initiative is a short-term relief bill intended to lead the way out of that crisis. He follows that bill with proposals to address longer-term problems and, if possible, to change American society for the better. His party holds majorities in the House and the Senate, but both of his initiatives face scorched-earth opposition from Republicans.

I could be describing the early months of either the Obama administration or the Biden administration. But there’s one huge difference between them: Even though Barack Obama began his presidency with high personal approval ratings, his policies never had strong public support. Public approval for Joe Biden’s policies, by contrast, is almost surreally high. Why?

To see what I’m talking about, compare polling on the Affordable Care Act — Obamacare — with polling on Biden’s American Jobs Plan.

The A.C.A., famously, had negative net approval throughout the Obama years. Its image didn’t improve until the Trump administration tried to kill it, and even then it faced overwhelming disapproval from Republican voters.  . . . “

Paul Krugman | America Needs to Empower Workers Again – The New York Times

Opinion Columnist

Credit…William C. Shrout/The LIFE Picture Collection, via Getty Images

“Labor activists hoped that the unionization vote at Amazon’s Bessemer, Ala., warehouse would be a turning point, a reversal in the decades-long trend of union decline. What the vote showed, instead, was the continuing effectiveness of the tactics employers have repeatedly used to defeat organizing efforts.

But union advocates shouldn’t give up. The political environment that gave anti-union employers a free hand may be changing — the decline of unionization was, above all, political, not a necessary consequence of a changing economy. And America needs a union revival if we’re to have any hope of reversing spiraling inequality.

Let’s start by talking about why union membership declined in the first place, and why it’s still possible to hope for a revival.

America used to have a powerful labor movement. Union membership soared between 1934 and the end of World War II. During the 1950s roughly a third of nonagricultural workers were union members. As late as 1980 unions still represented around a quarter of the work force. And strong unions had a big impact even on nonunion workers, setting pay norms and putting nonunion employers on notice that they had to treat their workers relatively well lest they face an organizing drive.” . . .

David Lindsay Jr.
Hamden, CT | NYT Comment:
My teacher Paul Krugman leaves me unimpressed today. Some unions are desparately needed, but others, especially police unions, and some fire unions, are too strong, and almost criminal in their overreach and protection of bad cops, etc. I remember when Reagan broke up the air traffic controllers strike, and I agreed with Reagan on that call. They had the power to blackmail the public for as much as they could image, and it didn’t seem right. What was to stop them from asking for more every year? The bad unions have given the movement a bad reputation. Ignoring that history, and the ongoing crisis with over powerful police unions, doesn’t help fix the public’s distast for unions. I am with FDR, who apparently said the police and civil service should not be allowed to join unions, because they would grow to strong, and were already on the public’s tab.

 

Paul Krugman | Biden, Yellen and the War on Leprechauns – The New York Times

Opinion Columnist

Credit…Illustration by The New York Times; photograph by Thinkstock, via Getty Images

“In the summer of 2016, Ireland’s Central Statistical Office reported something astonishing: The small nation’s gross domestic product had risen 26 percent in the previous year (a number that would later be revised upward). It would have been an amazing achievement if the growth had actually happened.

But it hadn’t, as government officials acknowledged from the beginning. It was, instead, an illusion created by corporate tax games. At the time, I dubbed it “leprechaun economics,” a coinage that has stuck; luckily, the Irish have a sense of humor about themselves.

What really happened? Ireland is a tax haven, with a very low tax rate on corporate profits. This gives multinational corporations an incentive to create Irish subsidiaries, then use creative accounting to ensure that a large share of their reported global profits accrue to those subsidiaries.

In 2015 a few big companies appear to have gotten even more aggressive about their profit-shifting, which led to a surge in the value of production they reported doing in Ireland — a surge that didn’t correspond to anything real.

To understand the big corporate tax reform proposed by the Biden administration, what you need to know is that it’s all about the leprechauns.

One way to think about the huge corporate tax cut Republicans rammed through in 2017 is that its underlying premise was that the leprechauns were real. That is, the tax cut’s architects insisted that corporations had been moving operations abroad to avoid U.S. taxes, and that slashing those taxes would bring millions of jobs back home.

It didn’t happen. In fact, the tax cut had no visible effect on business investment, probably because it was addressing a fake problem. U.S. corporations hadn’t been moving jobs overseas to avoid taxes; they had just been avoiding taxes.

The true impact — or actually lack of impact — of profit taxes on business decisions becomes obvious if you look at where corporations report big overseas earnings.

If they were truly responding to taxes by making large foreign investments that eliminated American jobs, we’d expect to see a lot of their profits coming from major production centers like Germany or China. Instead, more than half of the profits U.S. corporations report from overseas investments come from tiny tax havens, including places like Bermuda and the Cayman Islands where they have no real business at all.

By the way, this isn’t just an American problem. The International Monetary Fund estimates that about 40 percent of the world’s foreign direct investment — basically corporate cross-border investment, as opposed to “portfolio” purchases of stocks and bonds — is “phantom” investment, accounting fictions set up to avoid taxes. That’s why on paper Luxembourg, with just 600,000 people, hosts more foreign investment than the United States does.

So the real problem with U.S. corporate tax policy isn’t loss of jobs, it’s loss of revenue — and the Trump tax cut made that problem worse.

For the most part the Biden administration’s Made in America Tax Plan is an effort to reclaim the revenue lost both as a result of profit-shifting and as a result of the Trump tax cut, in order to help pay for large-scale public investment.”   . . .

Paul Krugman | Embracing the Softer Side of Infrastructure – The New York Times

“. . . The idea that investment isn’t real if it doesn’t involve steel and concrete would come as news to the private sector. True, back in the 1950s around 90 percent of business investment spending was on equipment and structures. But these days more than a third of business investment is spending on “intellectual property,” mainly R&D and purchases of software.

Businesses, then, believe that they can achieve real results by investing in technology — a view ratified by the stock market, which now puts a high value on companies with relatively few tangible assets. Can the government do the same thing? Yes, it can. In fact, the Obama administration did.

Investment in technology, especially in renewable energy, was only a small fraction of the Obama stimulus, but it’s the piece that got the worst rap. Remember how Republicans harped endlessly on how loan guarantees for the solar-power company Solyndra went bad?

The thing is, if your technology strategy produces only winners, you’re not taking enough risks. Private investors don’t expect every bet to succeed; three out of four start-ups backed by venture capital fail. The question is whether there are enough successes to justify the strategy.

And the Obama investment in green technology produced many successes. You’ve probably heard about Solyndra; have you heard about the crucial role played by a $465 million loan to a company named Tesla?

More broadly, the years since 2009 have been marked by spectacular progress in renewable energy, with solar and wind power in many cases now cheaper than electricity from fossil fuels. There are still people who seem to imagine that green energy is flaky hippie stuff, but the reality is that it’s the wave of the future.” . . .

Paul Krugman | Bidenomics Is as American as Apple Pie – The New York Times

“. . . The Biden administration infrastructure fact sheet alludes to part of that history, declaring that the plan “will invest in America in a way we have not invested since we built the interstate highways and won the space race.” Indeed, one way to think about the Biden program is that it’s an attempt to bring back the Dwight stuff — that is, in fiscal terms it would represent a partial return to the Eisenhower era, when we had much higher government investment as a share of gross domestic product than we do now, and also much higher tax rates on both high-income individuals and corporations.

The era of big government investment and high taxes on the rich coincided, not incidentally, with the U.S. economy’s greatest generation — the postwar decades of rapidly rising living standards.

But the story of public investment and progressive taxation in America goes back much further than the ’50s.

We’ve relied on government infrastructure investment to jump-start economic growth ever since the construction of the Erie Canal between 1818 and 1825. Unlike the privately owned canals that had proliferated in 18th-century Britain, the Erie Canal was built by the government of New York State, at a cost of $7 million. This may not sound like a lot, but the economy was vastly smaller then, and prices much lower too. As a share of state G.D.P., the canal was probably the equivalent of a $1 trillion national project today.

And a big public role in infrastructure continued down the generations. Land grants were used to promote railway construction and higher education. Teddy Roosevelt built the Panama Canal. F.D.R. brought electricity to rural areas. Eisenhower built the highway network.

So when Republicans denounce the American Jobs Plan as an “out-of-control socialist spending spree,” remember, large-scale public investment is the American way.

We can say much the same thing about Biden’s tax proposals.

Actually, given extremely low borrowing costs it’s not obvious that we would even need a tax hike if infrastructure spending were the end of the story. But we will need more revenue to pay for the whole Biden program, which everyone expects will eventually include another round of spending targeted on families. So it makes sense to tie tax hikes to the jobs plan; polling suggests that paying for public investment with taxes on corporations and the rich increases support for an infrastructure plan, and that something along the lines of the Biden proposals will command very high public approval.

Republicans will no doubt denounce the idea of taxing the rich as un-American class warfare. In reality, however, such taxation is another long tradition in this country. As Thomas Piketty, the inequality scholar, likes to put it, America basically invented progressive taxation.” . . .

Paul Krugman | Why Can’t Republicans Be Populists? – The New York Times

https://www.nytimes.com/2021/03/29/opinion/republicans-populism.html?action=click&module=Opinion&pgtype=Homepage

Opinion Columnist

Credit…Daniel Acker for The New York Times

President Biden’s American Rescue Plan is incredibly popular, even among Republican voters. We don’t have details yet on the next big Democratic initiative, but we can expect it to poll well, because we know that it will combine major infrastructure spending with tax hikes on corporations and the rich — which are all popular things.

But like the rescue plan, the next plan probably won’t get a single Republican vote in Congress. Why are elected Republicans still so committed to right-wing economic policies that help the rich while shortchanging the working class?

Fair warning: I’m not going to offer a good answer to this question. The point of today’s article is, instead, to argue for the question’s importance.

I ask why Republicans are “still” committed to right-wing economics because in the past there wasn’t any puzzle about their position.

Paul Krugman | The Decline of Republican Demonization – The New York Times

https://www.nytimes.com/2021/03/25/opinion/republicans-biden-stimulus.html?action=click&module=Opinion&pgtype=Homepage

“. . . And looking forward, why should we expect the G.O.P. to do any better in opposing Biden’s longer-term initiatives?

Bear in mind that both infrastructure spending and raising taxes on the rich are very popular. Democrats seem united on at least the principle of an invest-and-tax plan — and these days they seem pretty good at turning agreement in principle into actual legislation.

To block this push, Republicans will have to come up with something beyond boilerplate denunciations of socialists killing jobs. Will they? Probably not.

In short, the prospects for a big spend-and-tax bill are quite good, because Democrats know what they want to achieve and are willing to put in the work to make it happen — while Republicans don’t and aren’t.”   -30-