Thomas L. Friedman: Who Are We?

[John F]

Friedman for president!

Who Are We?
Thomas L. Friedman
FEB. 17, 2016

I find this election bizarre for many reasons but none more than this: If I were given a blank sheet of paper and told to write down America’s three greatest sources of strength, they would be “a culture of entrepreneurship,” “an ethic of pluralism” and "the quality of our governing institutions.” And yet I look at the campaign so far and I hear leading candidates trashing all of them.

Donald Trump is running against pluralism. Bernie Sanders shows zero interest in entrepreneurship and says the Wall Street banks that provide capital to risk-takers are involved in “fraud,” and Ted Cruz speaks of our government in the same way as the anti-tax zealot Grover Norquist, who says we should shrink government “to the size where I can drag it into the bathroom and drown it in the bathtub.” (Am I a bad person if I hope that when Norquist slips in that bathtub and has to call 911, no one answers?)

I don’t remember an election when the pillars of America’s strength were so under attack — and winning applause, often from young people!

Trump’s famous hat says “Make America great again.” You can’t do that if your message to Hispanics and Muslims is: Get out or stay away. We have an immigration problem. It’s an outrage that we can’t control our border, but both parties have been complicit — Democrats because they saw new voters coming across and Republicans because they saw cheap labor coming across. But we can fix the border without turning every Hispanic into a rapist or Muslim into a terrorist.

Trump seized on immigration as an emotional wedge to rally his base against “the other” and to blame “the other” for lost jobs, even though more jobs, particularly low-skilled jobs, are lost to microchips, not Mexicans.

What we have in America is so amazing — a pluralistic society with pluralism. Syria and Iraq are pluralistic societies without pluralism. They can only be governed by an iron fist.

Just to remind again: We have twice elected a black man whose grandfather was a Muslim and who defeated a woman to run against a Mormon! Who does that? That is such a source of strength, such a magnet for the best talent in the world. Yet Trump, starting with his “birther” crusade, has sought to undermine that uniqueness rather than celebrate it.

Sanders seems to me like someone with a good soul, and he is right that Wall Street excesses helped tank the economy in 2008. But thanks to the Dodd-Frank Wall Street Reform and Consumer Protection Act, that can’t easily happen again.

I’d take Sanders more seriously if he would stop bleating about breaking up the big banks and instead breathed life into what really matters for jobs: nurturing more entrepreneurs and starter-uppers. I never hear Sanders talk about where employees come from. They come from employers — risk-takers, people ready to take a second mortgage to start a business. If you want more employees, you need more employers, not just government stimulus.

I have just the plan for him: The 2015 “Milstein Commission on Entrepreneurship and Middle-Class Jobs” report produced by the University of Virginia, which notes: “The identity of America is intrinsically entrepreneurial, [enshrined] by the founders, popularized by Horatio Alger, embodied by Henry Ford. … With enough hard work anyone can use entrepreneurship to pave their own way to prosperity and strengthen their communities by creating jobs and growing their local economy.”

In short, we’re not socialists.

The report outlines many steps government can take — from deregulation to education to finance — to unlock more entrepreneurship in America, and not just in Silicon Valley, but anywhere, like Louisville, where “a vibrant start-up community has developed. … Today, the city boasts five accelerators, a vibrant angel investor community and partnerships with large companies to support start-up enterprises like the GE FirstBuild center, which brings together micro-manufacturing and the maker movement.” We can do this! We are doing it. “Roughly half of private-sector employees work in small businesses, and 65 percent of new jobs created since 1995 have come from small enterprises.”

Unlike Sanders, Ted Cruz does not have a good soul. He brims with hate, and his trashing of Washington, D.C., is despicable. I can’t defend every government regulation. But I know this: As the world gets faster and more interdependent, the quality of your governing institutions will matter more than ever, and ours are still pretty good. I wonder how much the average Russian would pay to have our F.B.I. or Justice Department for a day, or how much a Chinese city dweller would pay for a day of the U.S. Securities and Exchange Commission or Environmental Protection Agency? Cruz wraps himself in an American flag and spits on all the institutions that it represents.

America didn’t become the richest country in the world by practicing socialism, or the strongest country by denigrating its governing institutions, or the most talent-filled country by stoking fear of immigrants. It got here via the motto “E Pluribus Unum” — Out of Many, One. Our forefathers so cherished that motto they didn’t put it on a hat. They put it on coins and then on the dollar bill. For a guy with so many of those, Trump should have noticed by now.

http://www.nytimes.com/2016/02/17/opini ... re-we.html

[lennygoran]

Friedman for president!

Who Are We?
Thomas L. Friedman
FEB. 17, 2016

Sanders seems to me like someone with a good soul, and he is right that Wall Street excesses helped tank the economy in 2008. But thanks to the Dodd-Frank Wall Street Reform and Consumer Protection Act, that can’t easily happen again.

I’d take Sanders more seriously if he would stop bleating about breaking up the big banks and instead breathed life into what really matters for jobs:

I don't look at Friedman's comments that enthusiastically.

1. Our nation’s infrastructure is collapsing, and the American people know it. Every day, they drive on roads with unforgiving potholes and over bridges that are in disrepair. They wait in traffic jams and ride in railroads and subways that are overcrowded. They see airports bursting at the seams.

For too many years, we have dramatically underfunded the physical infrastructure that our economy depends on. That is why I have proposed the Rebuild America Act, to invest $1 trillion over five years to modernize our infrastructure. It would be paid for by closing loopholes that allow profitable corporations to avoid paying taxes by, among other things, shifting their profits to the Cayman Islands and other offshore tax havens.

Importantly, the Rebuild America Act will support more than thirteen million good-paying jobs – jobs that our economy desperately needs.

— Senator Bernie Sanders
https://berniesanders.com/issues/creati ... g-america/

2. Sanders Applauds Minneapolis Fed President’s Call to Break Up Too Big To Fail Banks
February 16, 2016

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CHARLESTON, S.C. — U.S. Sen. Bernie Sanders issued the following statement after Minneapolis Federal Reserve Bank President Neel Kashkari, a former Goldman Sachs banker and manager of the government’s Troubled Asset Relief Program, gave a speech calling for “breaking up large banks into smaller, less connected, less important entities”:

“I am delighted that the new president of the Minneapolis Federal Reserve believes that we need to break up too big to fail banks.

“If a bank is too big to fail, it is too big to exist. When it comes to Wall Street reform that must be our bottom line. The risk of another bailout is too great, and the economic and political power of a handful of huge financial institutions is simply too large.

“We need a banking system that is part of the productive economy – making loans at affordable rates to small- and medium-sized businesses so that we can create decent-paying jobs. Wall Street cannot continue to be an island unto itself, gambling trillions in risky financial instruments, making huge profits, assured that, if their schemes fail, the taxpayers will be there to bail them out.”

https://berniesanders.com/press-release ... ail-banks/

3.And today's NY Times:


The Opinion Pages | Editorial
Hillary Clinton Should Just Say Yes to a $15 Minimum Wage

By THE EDITORIAL BOARD FEB. 17, 2016


On the campaign trail, Hillary Clinton has eloquently defined workers’ rights as human rights. She could assert both more forcefully by championing a stronger federal minimum wage of $15 an hour.

So far, Mrs. Clinton has proposed lifting the federal hourly minimum to $12, from its current level of $7.25 an hour. Bernie Sanders is pushing for $15. Under both proposals, the increase would be phased in over five years, which means 2022 at the earliest, assuming that legislation to raise the minimum becomes law in 2017, the first year of the next president’s term.

Reasonable people can disagree about the ideal level for the minimum wage. There is no doubt, however, that the longer it takes to get to a new minimum, the higher it should be, and that by any political or practical calculation, 2022 is a long way off. This alone argues for Mr. Sanders’s more generous proposal.

Mrs. Clinton has argued that $15 might be too high for employers in low-wage states, causing them to lay off workers or make fewer hires. There is no proof for or against that position. There is solid empirical evidence showing that moderate increases in the minimum wage do not harm employment. But there is no similarly rigorous research on the effects of large increases, mainly because there haven’t been very many, either in the United States or internationally.

The question is what to do in the face of uncertainty. Mrs. Clinton’s argument for $12 overlooks the fact that a long phase-in would give employers and the economy time to adjust to a higher, $15 minimum.

Her minimum-wage proposal is also inconsistent with her larger agenda to increase middle-class wages. Historically, a robust minimum is one that equals at least half the average wage for typical workers, recently $21 an hour. Assuming Mrs. Clinton’s plan raised middle-class wages — through profit-sharing, paid sick and family leave, updated overtime-pay rules, fair-scheduling policies and labor-law enforcement — then $15 in 2022 would be a logical goal for the federal minimum wage.

Increasing the minimum wage to $15 a hour from $7.25 would double the expense for labor for many small companies. Would you like the...
Prometheus 34 minutes ago

But instead of embracing $15, Mrs. Clinton fights on for $12, saying that states could set their own, higher minimums. That is cold comfort. Experience has shown that without a robust federal minimum, state minimums also tend to be inadequate. Today, 21 states still do not have minimums higher than the federal level, and of the 29 that do, none have minimums high enough to cover local living expenses for an individual worker.

Worse, Mrs. Clinton’s stance misses the big picture, which is that the risk in keeping the minimum too low is bigger than the risk of raising it too high. One reason a third of Americans today live in or near poverty is that many jobs in the United States do not pay enough to live on. This is due in part to the steady erosion in the minimum wage — even as labor productivity, corporate profits and executive compensation have gone up. A raise to $12 an hour in 2022, or a mere $24,000 a year for a full-time job, would only lock in that dynamic. Even a $15 minimum works out to only $31,000 a year.

Economic obstacles are not standing in the way of a $15-an-hour minimum wage. Misplaced caution and political timidity are. The sooner Mrs. Clinton overcomes those, the stronger her candidacy will be.

http://www.nytimes.com/2016/02/17/opini ... eft-region

Regards, Len

[John F]

1. Infrastructure repair: Friedman writes, "If you want more employees, you need more employers, not just government stimulus." But Friedman doesn't exclude government stimulus as well, such as infrastructure repair.

2. Breaking up banks that are supposedly too big to fail. Friedman says the danger from this is dealt with by the Dodd-Frank Wall Street Reform and Consumer Protection Act. Is he mistaken?

3. Minimum wage. That only affects people who already have jobs, and at the lowest level. Friedman's emphasis is on job creation, both quantity and quality, which can be hampered by a higher minimum wage - as some responses to the Times editorial point out. If a small business or a startup can only afford so much in employee costs, a higher minimum wage can mean fewer employees. At that level, it looks like a zero sum game.

[lennygoran]

1. Infrastructure repair: Friedman writes, "If you want more employees, you need more employers, not just government stimulus." But Friedman doesn't exclude government stimulus as well, such as infrastructure repair.

2. Breaking up banks that are supposedly too big to fail. Friedman says the danger from this is dealt with by the Dodd-Frank Wall Street Reform and Consumer Protection Act. Is he mistaken?

3. Minimum wage. That only affects people who already have jobs, and at the lowest level. Friedman's emphasis is on job creation, both quantity and quality, which can be hampered by a higher minimum wage - as some responses to the Times editorial point out. If a small business or a startup can only afford so much in employee costs, a higher minimum wage can mean fewer employees. At that level, it looks like a zero sum game.

1. Infrastructure spending can create a tremendous number of jobs and in a vital area for our country:
http://www.brookings.edu/research/repor ... ne-puentes


2. I'm skeptical-I look at what the banks did in 2004-I sure hope the system is no longer rigged
http://www.bloomberg.com/politics/artic ... re-clinton

3. I'm no expert but I'll go with what the NY Times recommends here-it seems reasonable enough to me.

Regards, Len

[BWV 1080]

The infrastructure bit is a canard made up by the American Society of Civil Engineers which is nothing more than a lobbying group representing the self-interest of its members. Politicians like Sanders of course love infrastructure spending because it gives them more power through having contracts to dole out and other forms of patronage. We should not give them anymore credibility than when McDonnell Douglas opines on our need for new defense systems.

http://www.strongtowns.org/journal/2011 ... -cult.html

We have a government that can borrow and tax as much money as needed and a Federal Reserve to print whatever Congress lacks the "courage" to raise. Combine that with a cult-like belief that the path to prosperity in America is to create more growth through more infrastructure spending, and you have a recipe for financial disaster. There is no negative feedback loop here that will slow this madness. Even Tea Party darling Michele Bachmann is a shill for massively unproductive transportation projects in her own district.

So in steps the American Society of Civil Engineers. If this is an infrastructure cult, they are the normal-looking guy that is there to reassure anyone who might think of leaving. That is probably what upsets me the most. I'm proud to be a civil engineer, but I will have nothing to do with ASCE and their self-serving, narrow view of the world. Consider the following:

ASCE estimated the "costs to households and businesses" from transportation deficiencies in 2010 to be $130 billion. (page 3)
ASCE estimated the cumulative losses to businesses will be $430 billion by 2020. (page 5)
ASCE estimated the cumulative losses to households will be $482 billion by 2020. (page 5)
If you add these together, the total cost to households and businesses is $1.042 trillion. Well, ASCE states that to reach "minimum tolerable conditions" (a pretty sad standard) would take an investment of $220 billion annually. Over 10 years, that's $2.2 trillion. Yeah, you read that right. The American Society of Civil Engineers wrote a report that suggested over the next decade we spend $2.2 trillion so that we can save $1.0 trillion. And you wonder why we're broke.

There are some things to understand about the $1 trillion as well. Those aren't losses to businesses and households as in money out of their pockets. This is the same old game we reported on extensively last year with our analysis of the benefit/cost analysis approach on the Staples overpass. The costs are all very real dollars that we spend. The benefits -- or in this case the losses -- are things like lost driving time and wear and tear on your car.

You work at a job making $25/hour. By ASCE math, I as an engineer spend untold sums and improve your commute by two and a half minutes in each direction. Each day that is five minutes saved. Each week it is 25 minutes. Each year I've saved you 22 hours. Over the 25 years of that road, I've saved you 540 hours which, at $25 per hour, is worth $13,500. Now, it is not just you that has enjoyed this tremendous windfall. Look around at the thousands of others on the road with you. Add them all up and, according to ASCE and the standard engineering approach, this transportation project is making us all very rich.

ASCE is touting some other GDP costs as well, although it is hard to discern them clearly since, due to the ridiculousness of the numbers, they are forced to project out to 2040. Anytime someone has to project out that far to make an economic argument they are grasping. For some context, consider that 30 years ago inflation was over 10%, interest rates were over 15%, the Internet was still a decade and a half away, Ronald Regan was president and the big event of the year was the launching of the Space Shuttle. Think they've factored in that kind of volatility? And you have to love the hubris of engineers making projections. What other profession would do a 30-year projection and come up with a precise number like $3.248 trillion?

ASCE estimated that, in a 30-year trend projection, we would have 400,000 more jobs in 2040 if we fully funded our transportation system (page 13). The ridiculousness of this number can't be overstated. NEW jobless claims last week alone were 400,000. We're supposed to make a multi-trillion dollar investment over the next three decades on a trend line projection that we'll have 400,000 more jobs? Are they serious?

One other thing in the report that made me shake my head was a table they had titled, "Top 20 Countries and Economies Ranked by the Quality of Roads and Railroads." (page 17) For roads, the United States is ranked 19th behind such countries as France (2), Switzerland (3) and Germany (5), all countries that I have driven in. Anyone who has done likewise will attest that the standard highway in Europe is like a country road here in the U.S. I agree that their freeways are awesome, but they are also designed to connect towns, not feed strip development. I would attest that the "quality" in this case is less engineering-based and more a function of their adjacent land use not messing things up as ours does.

The table itself is based on an "Executive Opinion Survey" from The Global Competitiveness Report for 2010-2011. ASCE doesn't point out that, despite the sad opinion of our roads, the report ranks the United States as the fourth most competitive economy in the world. It is not really clear how we became so competitive with an infrastructure system ASCE ranked as a 'D'. Just maybe there is more to an economy than infrastructure?

At Strong Towns, we want our infrastructure maintained. In fact, it's the common denominator of a Strong Town. But the reason why we can't maintain our infrastructure is not because we lack the money or are afraid to spend it. It is because the systems we have built and the decisions we've made on what is a good investment are based on the kind of ridiculous math you see reflected in this ASCE report. We spend a billion here and a billion there and we get nothing but a couple minutes shaved off of our commutes, which just means we can build more roads and live further away from where we work. (Or, as we call that here in America: growth.)

Sixty years of unproductive infrastructure spending later, we are awash in maintenance liabilities with no money to pay for them. This is what happens when you have a government-subsidized, Ponzi-scheme growth system that, at all times, lives for the next transaction. America is all about new growth, which is why we don't even bother to question the findings in a study like this.

The ASCE report is an embarrassment to the engineering profession. The fact that politicians, journalists and bloggers are all lined up to mindlessly parrot these conclusions is pathetic. If we are actually going to get this country moving in a positive direction, we need a real understanding of how infrastructure spending is used to create value. We need a new approach to land use. We need to start building Strong Towns.

http://www.forbes.com/sites/paulroderic ... 8f1db137a4

[lennygoran]

The infrastructure bit is a canard made up by the American Society of Civil Engineers which is nothing more than a lobbying group representing the self-interest of its members.

How would you get our infrastructure fixed--seems to me only government working with private industry can do it-you don't deny our infrastructure is in tremendous need of repair-if you do drive up 10th Ave in nyc and then get back to us. Regards, Len

[jbuck919]

People quite far to the Right could read this as supportive of their program. John F mitigated Friedman somewhat in his later post, but Friedman is good enough that he should have done a better job of self-mitigation. For one thing, we are not a socialist country, but Bernie Sanders is not a real socialist, though he calls himself that. For another, Americans will have a tendency to read "not socialist" and think it is a denunciation of the use of government to provide necessary and desirable social services and support, an area where the US is far behind and falling farther behind. I am known to favor Clinton, who among other things does not want to break up the big banks just for the sake of doing so, but I would have appreciated the piece more if Friedman had said explicitly that he prefers Clinton (assuming he does), than leave it to the reader to draw that inference.

As for the ASCE thing, isn't somebody confusing the lobbying power of a professional organization with that of a huge industry? If everyone involved in civilian construction were monolithic the way, say, the gun lobby or big pharma or the petroleum industry are, and they were pushing this agenda, it would have happened. The fact that efforts to increase infrastructure spending have been largely ineffectual indicates that there is little in the way of corrupting influence there. Against BWV 1080's argument is the evidence of our eyes (and other senses) all around us. BTW the author of the article cited is simply wrong about German secondary roads. It is not a question of them looking like American country roads. It is a question of them being built to superior engineering standards and properly maintained. Potholes are almost non-existent in Germany.