There is the additional factor that right-leaning audiences have a complete, self-reinforcing media ecosystem to lure them away from the mainstream. Every defenestration at the NY Times or Facebook suppression of a story about Hunter Biden shunts more right-of-center media consumers to Earth 2.0. That phenomenon is working in the same direction as educational polarization.
I am currently in the only Republican congressional district in a blue state and it is very, very Trumpy. Very Trumpy. Like, sub-contractors go out of their way to tell you how Trumpy they are when they show up for a job, you know, just that's clear to my ECCO-wearing ass up front.
IMHO mainstream media outlets are totally unaware of just how alienating they can be to non-urban, non-diehard-liberals. (For the own-the-libs side of the coin, The Fox News Cinematic Universe, that is a feature, not a bug.) On paper, I am the exact demographic that the NY Times et al. is pursuing, yet I don't read it at all because it feels like a liberal echo chamber where city-dwelling millennials with liberal arts degrees vigorously inhale their own farts and then write condescending articles about how I am a bad person because I don't understand the subtle bouquet of artisanal fart-smell.
I read my local paper and a few substacks of differing ideological viewpoints. So, to me, there is no upside of education polarization because it isn't translating to cultural power, it is just empowering bad ideas from the left the way right-wing media translates into virtue-signalling legislation in Texas.
A recent example: Andrew Sullivan interviewed Brihana Joy on his podcast and it was delightful to hear two ridiculously intelligent people bat ideas around. That is the cultural hegemony I want; core liberal values of empiricism, debate and free speech. But when Andrew pointed out that 'defund the police' was a brilliant slogan to sweep Trumpy Republicans into power, Joy sternly lectured him, asserting that 'defund the police' actually means 'increase police funding and reallocate resources to better serve the community' and that he was willfully misunderstanding 'the movement'. Then she played the race card. In other words, fuck you for not adopting our faculty lounge lexicon of literal irony where words mean their opposite; also, you're racist.
To me, that is what the cultural hegemony of education polarization is delivering; a lefty purity spiral that aggressively and gleefully sics the Thought Police on anyone who deviates even slightly from The Party. That is the highly-educated mirror image of the dumb righty purity spiral that demands absolute fealty to the alternate reality where Trump won in 2020 and Democrats are a whisker from implementing full-blown socialist totalitarianism using Jewish space lasers and Italian satellites.
The commitment to using the right language rather than delivering the right results seems like the natural conclusion to the Twitterification of left-of-center society. It can be very challenging and require a lot of nuance to explain how some desirable individual outcome (say, a college degree, or home ownership) is seeing increased representation among some historically disadvantaged demographic.
Using the new in-term "equity" rather than "equality", and shouting at those who don't know the current correct codeword, correctly signals to those you want to signal to, and it fits easily into 140 characters.
I find that phenomenon deeply frustrating. If you really want to advocate for a cause, then you should use whatever language is necessary to build broad public support, not retweets. You know, like calling deficit-financed tax-cuts for the rich "The Tax Cuts and Jobs Act". It isn't hard! And once the public experiences good policy, they will start punishing the party that wants to take it away. But no, we don't want to stick a fake horn on a pony, we want an actual unicorn and we're totally fine with pony genocide if we don't get our way, because the pony blood will be on your hands, you gendered-pronoun-using monster!
There is a chance that the Democrats drift from today's mostly-genuine commitment to pluralism and a broad-based middle class economy, albeit tinted with a neo-Puritanical version of middle class propriety, to running on nothing but the latter.
At which point they look like a Latin American liberal party, and the GOP starts looking like Fidesz or the PSUV, and we're into "uh-oh" territory.
One or another of the parties is going to come to represent working class interests. It's just a matter of whether they understand that mandate more like FDR or more like Hugo Chavez. Given the GOP's divorce from scientific expertise, evidence-based policy, and consensus/pluralism, I cannot conceive of them taking populism in a productive direction.
The GOP is a lost cost, for sure. The question is not whether or not Democrats can work with Republicans, it is whether they can deliver sufficient electoral shellackings that the GOP throws Trumpism overboard.
I totally agree that, in order to do that, Democrats need to figure out how to convey their commitment to pluralism and a broad-based middle class economy to voters. Right now the opposite is happening.
Tucker Carlson is branding the Democratic Party as foot soldiers for The Squad every night while social media reinforces that narrative with no push-back because liberals are too busy fighting with each other about when the country was founded. Meanwhile, elected Democrats are having public fights over SALT deductions—not exactly a great look to working-class voters—while beltway media vilifies centrists Democrats and attacks the Biden Administration for not reversing every, single policy enacted by the Trump Administration, no matter how popular they are with non-college educated / working-class / minority voters. And their messaging? "Nevermind the bi-partisan bill we already passed to fix roads and bridges, we're going to spend $3.5 trillion on asdlkjhasfiounwacv!"
Even when the Democrats are talking about popular shit, they keep wording it as if it should be unpopular. "We're going to lower the cost of drugs" somehow morphs, in certain circles, into "We'll make drugs more available to historically marginalized populations." FFS, poor white voters *are* a marginalized population, just perhaps not *quite* as marginalized as poor black voters are.
There's certainly no contest between the poor white voter who can't get their kid's diabetes under control because they can't afford insulin and the rich black voter who risks getting shot when the cops pull them over for no reason. And I don't mean that in the sense of "one is clearly worse," I mean it in the sense of "we can solve both, they don't need to jockey for priority with one another."
God forbid we use inclusive and hopeful rhetoric when confronting entrenched problems, instead of encouraging the electorate to think in terms of what's in it for their own narrow demographic slice. Solidarity is a necessary precursor to making life better for all of us, but since we're now home to a bunch of upper-middle class professionals who're here only to seek tribal reasons to look down on other people, we just can't make it stick.
As for the media... the fundamental problem of news media is that we pay full-timers jackshit to pontificate on weighty matters, instead of paying experts well to loan some of their time to discuss them. The overwhelming majority of the people who can afford to get into that gig are the scions of the professional and upper classes, and they mostly don't actually want to put the work in to understand complex issues well enough to be able to distill them to the audience. The state of reporting on the three topics for which I'm a passable subject matter expert (Chinese political economy, mega-project economics, and AEC process automation) is absolute, miserable, could-not-be-worse-if-actively-trying BULLSHIT. I assume that extends to everything else.
Of course, because the media draws its workforce from the same demographics as the new Democratic base, its biases mean that even when it's trying to be even-handed, it's ham-fisted about it.
Just as an example of the former issue, if there were experts in the media who actually spent time writing about what "asdlkjhasfiounwacv" is, we'd be in golden shape, because most of it is popular among working class voters of all stripes.
At the same time, they would have to avoid the IDpol framing for that to come across effectively to all audiences, and I'm not confident that even genuine SMEs could do that now, since it's almost required for academia.
"We'll make drugs more available to historically marginalized populations" perfectly captures the seemingly deliberate effort of Democrats and liberals to write attack ads against their own policies by injecting virtue signalling into absolutely everything. And I blame the Twitter Thought Police for that.
Republicans and conservatives are super good at this game—they routinely sponsor legislation that is nothing but virtue signalling. The difference is that the "Democrats want to raise your taxes so they can kill babies" energizes their base, while "historically marginalized people" drives a wedge between white college-educated liberals and historically marginalized people. How many focus groups do they need to figure out that the latter group tends to finds that language pointless and condescending?
I cannot wrap my head around the zeal with which Democrats and liberals rush to make own-goals with their messaging. Worse, when they get booed for it, they escort the dissenting fans from the stadium and tell them that they are part of the problem.
My expertise is in esoteric science stuff that was rarely reported on. That was before the pandemic. Now I encounter the same phenomenon as you—every time I see a good-faith journalistic effort to explain science to the masses, key details are missing, misunderstood or totally wrong. But that's ok, because they get the contours right and I'm not the target audience. What I don't like is how some substacks then use those journalistic efforts to criticize the liberal-media-industrial-complex by ascribing some nefarious purpose to the uneven spots in what is very difficult reporting.
"How many focus groups do they need to figure out that the latter group tends to finds that language pointless and condescending?"
"We" know this. The DNC knows this, most of the party understands it, and the leadership certainly does. But the Democratic Party is not a monolith, and it's just not possible to shut up the very large part of the wokeist faction for whom the snark, condescension, and feelings of superiority *are the point.* Just because they're "on our side" doesn't mean we share so much as a single motivating factor, or that they're right.
I occasionally wonder if we shouldn't simply spin off an urban/woke party and use it the same way the Canadian Liberals use the NDP, as a foil to highlight their sensible centrist bona fides, even as they govern with an informal confidence-and-supply arrangement. But again, if we could ram that through, we'd also be able to exert messaging discipline, and we can't.
"I cannot wrap my head around the zeal with which Democrats and liberals rush to make own-goals with their messaging"
Well... hard to do otherwise when a significant fraction of (loud) Democrats are in this solely for tribalistic kicks, nothing more. There is no avoiding that, and I'm not sure that the problems it causes can be solved or even mitigated very much. Without a full-court press to marginalize and silence those people, at least... and the Democrats simply don't have the ability to stare down half their donor base, say "Give us money and STFU already," and get on with it.
As for the media... I'm less charitable than you, because in my three sectors everything is still wrong in entirely predictable ways that the media has been told about for a decade or more.
As far as I can tell, a typical reporter just isn't brilliant but thinks they are, finds it very hard to swallow or even understand their own biases, and many have family money propping them up while their "career develops." There's no reason to do better, and their corporate masters have financial incentives that make their reporting even worse.
There are exceptions; many are found in obscure topic-specific publications or here on Substack.
Overall, I'm not sure the problems posed by the current alignment are solvable for Democrats. I suspect the only way out is to lose and for the GOP to fail to solve problems. That will speed the ongoing realignment quite handily.
If I'm right, the party system will continue shifting in a way that eventually makes the woke people less important. That, IMO, will initially redound to the benefit of the GOP, who may actually create a durable majority *without cheating* but be unable to govern effectively, and probably eventually to the Democrats, who will spend a long time in the wilderness purging the idiots while the GOP screws everything up, so that they can sweep back into power.
While the GOP would *love* to turn the US into a one-party state, the mechanisms are just not there, and I doubt they can do much more than give themselves (in current form) a few percentage points of lean in the House to match the ones in the EC and Senate.
If the party system shifts a lot, that will all be for naught.
There's a weird asymmetry there. Every crazy thing uttered by any self-proclaimed liberal or Democrat gets sucked into the right-wing media vortex, glowered about ad nauseum and irrevocably associated with the "D" next to a politician's name. I am always astonished by the ability of your median Trumper to rattle off the same, exact set of "ten crazy things liberals believe" at the drop of a hat.
For some reason, when Republicans—all the way up to His Orangeness—say completely batshit crazy stuff, up to and including direct threats of violence against individual voters, it gets repeated everywhere from late night to podcasts to newspapers to cable news to exactly zero effect.
The marginal voters who decide elections now seem to weigh "that one time AOC wore a dress that said 'Tax The Rich'" against literal threats to overthrow the government violently and decide that they'll just stay home on election day because they didn't get a pony. And I think that Matt's post gets at the reason for that. The mainstream media / discourse / national conversation / etc. is increasingly college-educated liberals talking to each other. They are just incapable of talking in a way that the median democratic voter that Matt always talks about (the non-college-educated white guy in his 50's) takes seriously.
I actually never realized that so many journalists were, in fact, trust fund kids trying to find themselves. It used to be the opposite—journalists used to be hungry and needed to do good reporting to, you know, earn a paycheck and keep the lights on. But through the magic of podcasts, I get glimpses into the backgrounds of journalists (many of whom I respect a great deal). It seems that they come in three flavors; the gruff old reporter who worked their way up from the mail room, the trust fund kid trying to prove something to mom and dad and the sad-sack millennial who can barely make rent and resents the other two flavors.
Wow, you said everything I wanted in that comment with wit and the right touch of polemic.
I would just add the controlling the commanding heights of the culture only goes so far. It doesn't actually control the culture.
And self-assured arrogance always - always - causes a reactionary response. And a big part of that reactionary response can be boiled down to the lyrical refrain in Rage Against the Machine's "Killing in the name" - "fuck you, I won’t do what you tell me"
I partially agree, but you can and do hear from the NYT that what most people mean by "defund the police" or more generally who want to see policing changed (I'll bet "defund the Police" has been uttered more times on Fox that in the NYT) IS "'increase police funding and reallocate resources to better serve the community." You would never hear that on Fox.
Anytime your slogan needs a detailed explanation for what it actually means...you've picked a bad slogan and should pick a new one. I've never understood why they didn't coop the pledge and choose "with liberty and justice for all" or even just "justice for all." Would have tied Fox hosts in knots trying to explain how the pledge was now bad.
They can say what they want, but when proggo bastions like San Francisco can’t keep Walgreens open because they have no will to police “victimless property crimes”, people will call BS.
I lived in a social democratic country for over a decade. It had it all; super high taxes, robust social programs, excellent public transportation, universal health care... and one of the lowest incarceration rates in the world, partly because they decriminalized petty crimes. In fact, if someone breaks into your home, you are supposed to let them take what they want and then file an insurance claim. (It will be denied if you didn't maintain your locks property.) If you try to interfere, you can be charged with assault. Ditto for shoplifting; ask them to put back the merchandise and if they don't, report it to the police, but do not intervene.
Now, I'm not saying those policies would work in the US, particularly because of the vast difference in gun laws, but not policing victimless property crimes can actually work just fine as a policy. It is not as crazy as Fox News makes it out to be. Nor is it as frictionless as they make it sound in 'proggo bastions'.
Once, an American friend of mine came home (to the house that he owned) and found his girlfriend (who didn't live with him) in bed with another man. He told the guy to get out of his house before he beat the shit out of him. The guy refused and said it was his right to be there. My friend proceeded to remove him from his home, with violence. The guy called the cops, who arrested my friend for assault and began deportation proceedings. It is quite a bit different than the "I can shoot you in the face if you knock on my door in a way I don't like" American attitude towards private property!
Frankly, despite being well to the left of the median American, I find that absolutely obscene and would never willingly reside in a country with that legal framework. How the hell am I to know at a glance whether someone poses a threat only to my property or to my life and those of my family?
Sure, I understand the incidence of violent crime to be considerably lower in most of Europe, but even so, I simply cannot know if the person prowling my kitchen is looking for my jewelry and wallet, or looking for my wife who he's been stalking for months.
It is entirely moral and good that anyone in that situation should receive a very, very strong benefit of the doubt, such that the onus in any legal setting should be on the intruder (or authorities) to prove they posed no threat to life or limb.
If I find someone breaking into my home in the middle of the night, I'm shooting them and asking questions after.
If I feel secure enough, they might get a yelled warning to get out before I shoot them, but if I can't tell they're armed or not, I'm going to shoot them with no warning and will not feel much remorse.
Was his "visitor" correct in that he had a legal right to be there? Or was the expectation that your friend would call the police to have a trespasser removed?
Well, the type of crime is important in that comparison. Petty crimes like burglary, vandalism and pickpocketing are rampant. But where I was, there was virtually no violent crime. In the 12 years I was there, the entire province had zero murders. And in the cities (and this is true of much of Western Europe) violent crime mostly happens in the immigrant ghettos, i.e., the neighborhoods next to train tracks that are covered in satellite dishes all pointing the same direction.
You are 100% correctly that social democratic policy only works in homogeneous populations, which is a key detail that American socialists do not understand. People are only ok paying super-high taxes for super-great social benefits if they see those benefits as going to "people like me". (Those uber-progressive social policies also came with a very conservative and coercive culture, which is a byproduct of homogeneity.) The influx of Muslim and African immigrants into Europe—something mostly homogeneous modern Europe is not accustomed to—is jet fuel for the far-right populists parties that are gaining traction.
Personally, I did like being an "other" in such a homogeneous place and I found the culture paradoxically very tolerant and very constraining. But Singapore really creeps me out, especially when random people start professing their love of the quasi-dictator to you for no apparent reason. I like the American way of doing things.
Oh, to be sure, I agree with Joy completely and fully understand and support what 'the defund movement' is all about. But I'm not the one who needs to be persuaded!
People in under-policed neighborhoods forwarding bath-faith memes and chain emails about how Democrats want to abolish their police department are not likely to read a think piece in the NY Times. And yet, there is no shortage of liberals wagging their fingers and lecturing people who can't be bothered to dive into nuanced, long-form articles about municipal police budgets.
But if you need to have a NYT subscription to understand what a slogan "really means" then it's probably a bad slogan. Especially if the true meaning is in some ways the exact opposite of a literal reading.
True. DFP is a bad slogan. MY point was that most (not, unfortunately 100%) NYT readers a) probably knew all along what it meant and b) read things "explaining" what it meant. No one viewing Fox ever saw it explained.
Democrats believe as do their voters that they are the party that supports the working class (minimum wage, unions, etc…), but if the educational polarization continues, then s their an inflection point where Democrat voters abandon the working class and pivot to policies that only support themselves.
Student Loan Forgiveness is one of the issues on the forefront on this. Most blue collar workers don’t go to college and don’t obviously benefit from this, whereas the rising creative educated class will.
And I suppose the same question goes for Republicans… at what point do they alter.
As I have said before, I honestly think there’s a scenario where the parties switch sides at least economically.
I'm not sure the point of this comment. I'm talking about the future. Matt addresses the trends in working class votes with non-whites trending away from Democrats.
You are talking about "still". It's like saying, our climate temperature has only risen 1 degree. Sure, it's true, but we are worried about the future 1.5 vs 2.5 increase.
I think his point is that as long as non-whites are a big part of the Dem coalition, and non-whites are disproportionately working class, that reality will ensure Dems can't ignore working class issues. E.g., the $15 min wage
That still goes to the point that the trend is for non-white working class to drift away from the Democratic Party. And at a certain point, this trend accelerates (possibly... I don't know that it happens... just that it could happen). You are still talking about now or immediate future. I'm talking a decade or two from now.
You can't really claim to be the party of the working class when you don't represent the largest group of the working class. As of 2016, whites constitute 58% of all working class adults.
The question of "selfish grasping" strikes me as critical. At some level, politics has to be about "what's in it for me," hence the popularism thing. Politicians (& smart people like Matt) have the critical job of designing policies that highlight a broad definition of "me."
Which is why "I took out this big loan for a fun four years, please make it go away via policy or magic so the next generation can make exactly the same mistake" seems DOA forever, as it should be.
If it was just "a fun four years", then that would be a fair point. But we do actually need some graduates, and education has a value in itself.
The point is that, unless you think that university education is a mistake, then you have to have a way to fund it that doesn't financially cripple the minority of graduates who don't get well-paid jobs (even if the number of graduates is reduced by policy, there are still going to be people who have mental or physical health issues that prevent them working). That means either you restore the ability to discharge the loans in bankruptcy (though the problem is that the vast majority of graduates are technically bankrupt the day they graduate, so there is a risk of abuse), or you have to replace it with an income-based contribution system (or make all taxpayers pay).
It seems to me that the most logical approach is to contract for income-based contributions up-front, where the percentage of income can be based on the amount that the student receives. Remove the upper limit, ie get rid of the idea that this is a debt that can be repaid, and make it more like an equity investment that cannot be repaid, but where the ex-student pays out a percentage of income either for life or until Social Security eligibility. That way the small number of super-successful graduates can make up for those that don't earn enough to repay, which resolves the usual issue with income-based plans (that being that poor graduates don't pay off their debt, but no-one pays in more than their debt to make up for it).
I don't pretend to understand the scope of the problem, but I think a big part of it is that Big State U down the street correctly sees prospective students as prospective customers, and it needs to market itself to those customers with attractive amenities that surpass those at Big State U in the next state over. Some amount of this bloat (again, I don't pretend to know how much) is paying for increasingly opulent dorms and student unions and rec centers and other things that are legitimately nice things for students to have, but don't necessarily show up in black on the societal bottom line. And then if you're already taking out 100k for undergrad, or whatever, then why *not* spend a little extra to be in that nice new apartment building just off campus?
I say all of this as a proud thrice-graduate of Big State U.
Sure. And the administrative/management layers of Big State U are a lot bigger and a lot better paid than they used to be, which increases tuition.
And Big State is no longer contributing nearly as much to Big State U per in-state student, which has also driven tuition up.
But this gives you a system that can set real incentives: go live in that apartment building and you'll pay 0.5% more income tax for life. Go to Directional State U instead, and you'll pay 5% less income tax for life.
We’re talking about 17 year old kids entering into financial arrangements of which they don’t understand the implications, usually at the behest of trusted adults who tell them college is the only way to secure a decent future.
In context, it’s not the least bit unreasonable for many of these folks to feel this is not their fault, and it’s destroying the prospects of a large part of a whole generation.
At some point, the “reset” button will be pressed, it’s just a matter of how.
The thing is, when I read this characterization of the problem, I find it damning of every single party involved. It reminds me of the subprime mortgage bubble.
- The government is financing predatory financial arrangements that in total are insolvent. They know it's a failure and won't take the hit.
- Parents/guardians/trusted adults are deluded/swindled into convincing their children on the cusp of legal adulthood to sign away years of their future. They have responsibilities they are abdicating.
- 17/18-year-olds who are supposed to have learned some math to be in this situation are borrowing huge sums to buy lottery tickets and a huge portion aren't even trying to fill out the lotto ticket properly to have a shot at a return.
Yes, the reset button will be pressed. Just like in the subprime mortgage bubble, the borrowers' credit will likely still be devastated by that reset button. The lenders will need to be recapitalized, which will mean tax increases. Everyone will be to blame and we'll try to just forget how it happened.
When I say "reset button," I mean that there shouldn't be a market for "student debt" at all.
It requires both explicit (subsidized interest rates) and implicit (bankruptcy exemptions) to make it work at all and only exists because both higher education and banking lobbies have captured the regulatory apparatus.
For the amount of money the Federal government spends running this so-called "market" that it created and operates entirely on its own, we could instead make community and public 4-year degrees free for all current enrollees.
Obviously, doing so would provoke enrollment to increase, but we can actually resurrect a selective admissions process for state schools.
The whole damned thing needs to be burnt to the ground.
Without sweeping reform of the system that brought upon that debt, that would only make the problem worse. The next generation would *correctly* learn the lesson that they can be fairly casual about the educational debt they take on--if things get too bad, society will decide to wipe those debts away.
Trueness. I had my daughter max out her student loans, even though she was getting by without them. Worse case scenario, she just pays them back (the money is sitting there).
People's politics are always quite transparent when they're forced to reveal exactly *who* they feel are the crux of moral hazard problems.
I am simply not concerned about moral hazard applied to a bunch of stupid kids who were led by the nose into bad decisions.
I am concerned about moral hazard on the part of those who did the leading, most especially the higher education lobby and the politically connected finance interests involved in this so-called "market".
If we burn the latter badly enough, the whole "market" goes away, and the former problem solves itself with no moral hazard for students.
"it’s destroying the prospects of a large part of a whole generation." this is hyperbole. 85% of the population has no loans! The average student loan debt is 32k, but the median is 17k. Less than 4% of the population has student loans over 25k.
Large student loans are painful, but they are concentrated among a very small percentage of the population (who often have significant earning potential). We should definitely address the problem, but recognize that it doesn't have anywhere close to the impact that other issues have.
75% of the population is under 19 or over 40. If close to half of the remaining 25% have loans, as is born out by your statement, that is a "large part of a whole generation".
We're aware that 40% or so of each of my generation and the next one have student loans.
Approximately half of those are people who did not ultimately graduate, and for many or most of them a median burden of $17k is a near-impossible impediment to a stable life.
Approximately half of graduates are not realizing a significant value premium from their degree.
There's a large body of economic work showing that these debts are impacting home purchases and child-bearing. Not just their direct costs, but by forcing people to live in high-cost-of-living areas to earn the income to pay them down, and thereby subjecting themselves to high housing costs and delayed family formation.
Given the extent to which stable family structures and child-rearing are crucial to the next generation, it needs to be fixed.
And I maintain that the moral culpability here is not on the 17 year old, but on the college counselor, the parents, and the higher education lobby. Gut their ability to make this happen again, but fix the existing problem too.
I would argue that the cartel is only part of the problem. Without the Fed's easy money this would be much less of a problem.
No bank is going to loan someone $100k for a gender studies major. But with the Fed skies the limit.
I strongly support making total loan amounts contingent on average expected salary of the major. In addition, colleges should get tuition clawed back from bad loans. And student loans should be easier to discharge in bankruptcy
You've studied this so perhaps you have a reasoned opinion on it (as opposed to me who, like Jon Snow, knows nothing). Can't a goodly portion of the higher education funding problem be laid at the feet of state legislators who simply don't want to pay? Admittedly, they've got lots of reasons for this, but many of them are indeed extremely shortsighted or, in the grand scheme of things, not very important.
This assumes that millennials are a monolith. Taking it back to student loans. Only 39% of millennials have a bachelors degree, 42% have student loans.
That's not to say that there won't be some push towards democratic socialism, but I don't think its a given.
I do agree with you in the future that it won't be a straight flip-flopping of positions... it will be most likely two versions of more liberal positions.
But taxes on middle class are definitely one thing that has potential to flip.
If Democrats are overwhelmingly middle to upper middle class, then support on raising taxes on themselves will be... not so enthusiastic. The battle over the SALT reduction is a prime example of this.
Everyone self-selects their cohort and misinterprets them as being representative (no one I know voted for Nixon, etc.), but none of my mid-30s college-educated friends express a loan forgiveness view that doesn't include at least some pretty hefty public service requirements. Blanket forgiveness of any magnitude is not discussed.
"Only 39% of millennials have a bachelors degree, 42% have student loans."
It's worth pointing out that those figures shouldn't be interpreted the way we do at first glance. Half of those degree holders don't have debts, and half of debt-holders are blue collar kids who didn't finish their degree.
The biggest beneficiaries of wiping the slate clean would be blue collar folks who made a run at a degree and didn't grasp the brass ring, not actual graduates.
>>If the Boomers' descent from idealism into selfish grasping can teach us anything<<
As a Boomer growing up in the 1960s and was part of my generation's lumping every single one of my parent's generation into the category of stifling 1950s conformism, I confess I'm pleased to see the younger generations are eager to play the same trick on us as well.
However, recall that those folks condemned as hawks, conformists, racists and misogynists were then later transformed into the "Greatest Generation" and venerated perhaps a tad too much. What goes around, comes around, I guess. I await my generation's exoneration.
Demarcating the generations is a mugs game. The baby boomers could be defined to include people who became adults in the sixties and people who did so in the early eighties. This is all to say that spending too much energy on describing what a generation believes isn’t worth the effort.
I definitely agree that it's harder to get ahead now days. I've got my CPA, MBA. And am head of finance for a mid sized company. And without my wife working, I feel it's still a struggle to live a upper middle class lifestyle. 40 years ago, that would have been no problem. The primary driver of that is because of higher housing costs.
As for austerity politics. Nobody likes austerity. What people like is low taxes with lots of government benefits. But the problem is the real world doesn't work that way, at least not long term.
You mention "privatizing" Social Security as one of those awful ideas Republicans proposed. The GWB 2005 proposal was to allow people to divert part of their Social Security taxes into an investment account for their own benefit. It was soundly beaten back by Democrats and Progressives.
Since 1/1/2005, as measured by the VTI (an ETF tracking the total stock market), the stock market is up by 427%, for a CAGR of 10.4%. Thank goodness we didn't allow workers to participate in that growth and left it all to the rich.
But that’s not how it works in reality for most people. IIRC the average return on a 401k is negative as people buy high and then panic and sell low. Now you’re going to say, “What moron trades their 401k?” My point exactly.
This appears to be a myth; I didn't find any supportive sources and found a number of contradictory sources. And certainly the trend has been to default retirement savers into auto-investment target-date funds and let them forget about it. I'm sure some people still manage to actively buy and sell their retirement funds so badly that they make a negative return, but it doesn't make sense that a *majority* of people do that. Probably most people ignore it, as intended.
The Fed had a report a while back talking about how in an emergency, 40% of people wouldn't be able to come up with $600 without selling something they own or borrowing. (Crazier to me is that 20%+ of people making over 100k couldn't come up with 2k in an emergency).
A large portion of people only have their 401k account as savings. So if they lose their job, they take money out of it because its the only money they have. This often looks like > the economy tanks (2008) > people lose their job > access the only savings they have in their 401k,when its the absolute worst time to do so > lose money on their 401k.
This isn't true for everyone, or even the majority, but its a real thing for a lot of people. It also doesn't apply to SS.
I don’t know how easy that would be to include in the legislation. Certainly some people would argue that people should be able to access the money in various circumstances. The real estate lobby would certainly push to allow home buyers to access it.
The incremental paycheck funding structure of a 401k makes it impossible to buy high. Some might sell low - IDK. As other have mentioned, [citation needed].
I can, and have, shifted investments between index funds and cash-equivalent funds.
Thanks to my China contacts, I had the advance warning to shift retirement holdings into cash-equivalent funds in Feb. 2020 and only moved them back into index funds later on.
I got it mostly right, but it's entirely possible to shift between asset classes in a way that's effectively buying high and selling low.
Sure. I have too. Different strategy, I reallocated a % of my cash position on 3/27/20 to AMZN. So we have n = 2. Still ... I'll defer to Thaler's research at UChicago on the inherent stickiness of 401k selection and allocations here. The TL:DR is people don't touch their 401k. That's the problem he was solving with the Save More Tomorrow (SMaRT) program.
You forgot the part about "incremental paycheck funding structure" which is accurate. Even if you trade the low - the next contribution comes in to dollar cost average.
I find that almost impossible to believe. You're pretty limited in when you can withdraw money from a 401k before retirement, so money tends to sit in 401ks with little meddling. Also, the government could prohibit withdraw money from the portion of SS that's privatized. In principle, you could lose money by rebalancing in dumb ways, but I doubt that's common.
I'll add that this is kind of a moot point for social security privatization. Just prohibit early withdraws. That's what current social security effectively does.
"More than half of workers in their 20s who have 401(k) plans cash out their holdings when they change jobs, partly because their balances are relatively low, according to a report from the benefits consultant Aon Hewitt. Only about a third of those who change jobs in their 50s do the same."
1/3 of people in their 50s!! are cashing out, paying taxes and a 10% penalty.
That said, it still doesn't mean that the ROI is negative --- either by how the actual funds do or simply comparing input to output. The 10% penalty sucks, but it's partly (more than?) offset by any employer match to 401k contributions. I can only speak to my personal experience: my previous employer would do a 1/3 match (up to 6% of salary) and my current employer does a 1/2 match (up to some high level). So 10% penalty + taxed as income vs taxed at capital gains (say 13% difference) vs 33% or 50% employer match. That comes out as positive --- especially if the stock market is doing well.
Also, given that 2/3 of people in their 50s don't cash out, I stick by my intuition that the average ROI is positive.
I don't think its negative but I have read that its VERY low, like maybe 3%? Because people do buy high and sell low. However I just Googled it and couldn't find any real info.
Sure they can. They choose the money market or bond option because they are worried about losing money. Then the market shoots up and they worry about missing out so they move it to equities. Then the market slide and they sell in a panic.
That's not at all what the "intelligent default choice" research indicates. The problem is people don't *look* at their 401k. That's why the set-up is so important.
I'm deeply incredulous that large numbers of people are actively moving money around in their 401Ks trying to time the market. I mean, I have a JD and a BS in economics and *I* don't know offhand how to move money around in my 401K -- the money is just going into whatever funds I designated when I set it up.
Hang on, to my knowledge "since Social Security already does that by investing its trust fund" is wrong.
They're statutorily required to invest *only* in US Treasuries. The Social Security Trust Fund is explicitly *not* permitted to act as a sovereign wealth fund, at all.
At the time I was marginally in favor of privatizing social security but couldn't get past the moral hazard issue.
Some of the plans either provided a minimum benefit no matter how your investment did. This can encourage risky stock market investment (assuming you weren't forced into some government managed index fund - which would be a HUGE index fund - unclear how that would distort the market), with the knowledge that it's not _really_ that risky because you've got guaranteed minimum payouts. So the right thing to do might be to put those in high risk accounts.
If the plans did _not_ provide a minimum benefit, and people went risky and lost it all... I did not believe that we as a country would not feel bad and end up giving them their money anyway down the road.
In general, I liked the _theory_ of letting people invest it, but the _practice_ seemed terribly fraught.
In sitting in Massachusetts, me and all my friends with doctorates and professional degrees, waiting for my blue state utopia. I’ve wondered why we don’t just go for it. We have a Republican governor now, but we didn’t a few years ago, so I don’t think it’s that. Plus, we got our “commonwealth care” during the Romney years.
How does the blue state utopia project intersect with Milan’s piece about state legislatures not working well?
There is the additional factor that right-leaning audiences have a complete, self-reinforcing media ecosystem to lure them away from the mainstream. Every defenestration at the NY Times or Facebook suppression of a story about Hunter Biden shunts more right-of-center media consumers to Earth 2.0. That phenomenon is working in the same direction as educational polarization.
I am currently in the only Republican congressional district in a blue state and it is very, very Trumpy. Very Trumpy. Like, sub-contractors go out of their way to tell you how Trumpy they are when they show up for a job, you know, just that's clear to my ECCO-wearing ass up front.
IMHO mainstream media outlets are totally unaware of just how alienating they can be to non-urban, non-diehard-liberals. (For the own-the-libs side of the coin, The Fox News Cinematic Universe, that is a feature, not a bug.) On paper, I am the exact demographic that the NY Times et al. is pursuing, yet I don't read it at all because it feels like a liberal echo chamber where city-dwelling millennials with liberal arts degrees vigorously inhale their own farts and then write condescending articles about how I am a bad person because I don't understand the subtle bouquet of artisanal fart-smell.
I read my local paper and a few substacks of differing ideological viewpoints. So, to me, there is no upside of education polarization because it isn't translating to cultural power, it is just empowering bad ideas from the left the way right-wing media translates into virtue-signalling legislation in Texas.
A recent example: Andrew Sullivan interviewed Brihana Joy on his podcast and it was delightful to hear two ridiculously intelligent people bat ideas around. That is the cultural hegemony I want; core liberal values of empiricism, debate and free speech. But when Andrew pointed out that 'defund the police' was a brilliant slogan to sweep Trumpy Republicans into power, Joy sternly lectured him, asserting that 'defund the police' actually means 'increase police funding and reallocate resources to better serve the community' and that he was willfully misunderstanding 'the movement'. Then she played the race card. In other words, fuck you for not adopting our faculty lounge lexicon of literal irony where words mean their opposite; also, you're racist.
To me, that is what the cultural hegemony of education polarization is delivering; a lefty purity spiral that aggressively and gleefully sics the Thought Police on anyone who deviates even slightly from The Party. That is the highly-educated mirror image of the dumb righty purity spiral that demands absolute fealty to the alternate reality where Trump won in 2020 and Democrats are a whisker from implementing full-blown socialist totalitarianism using Jewish space lasers and Italian satellites.
The commitment to using the right language rather than delivering the right results seems like the natural conclusion to the Twitterification of left-of-center society. It can be very challenging and require a lot of nuance to explain how some desirable individual outcome (say, a college degree, or home ownership) is seeing increased representation among some historically disadvantaged demographic.
Using the new in-term "equity" rather than "equality", and shouting at those who don't know the current correct codeword, correctly signals to those you want to signal to, and it fits easily into 140 characters.
I find that phenomenon deeply frustrating. If you really want to advocate for a cause, then you should use whatever language is necessary to build broad public support, not retweets. You know, like calling deficit-financed tax-cuts for the rich "The Tax Cuts and Jobs Act". It isn't hard! And once the public experiences good policy, they will start punishing the party that wants to take it away. But no, we don't want to stick a fake horn on a pony, we want an actual unicorn and we're totally fine with pony genocide if we don't get our way, because the pony blood will be on your hands, you gendered-pronoun-using monster!
There is a chance that the Democrats drift from today's mostly-genuine commitment to pluralism and a broad-based middle class economy, albeit tinted with a neo-Puritanical version of middle class propriety, to running on nothing but the latter.
At which point they look like a Latin American liberal party, and the GOP starts looking like Fidesz or the PSUV, and we're into "uh-oh" territory.
One or another of the parties is going to come to represent working class interests. It's just a matter of whether they understand that mandate more like FDR or more like Hugo Chavez. Given the GOP's divorce from scientific expertise, evidence-based policy, and consensus/pluralism, I cannot conceive of them taking populism in a productive direction.
The GOP is a lost cost, for sure. The question is not whether or not Democrats can work with Republicans, it is whether they can deliver sufficient electoral shellackings that the GOP throws Trumpism overboard.
I totally agree that, in order to do that, Democrats need to figure out how to convey their commitment to pluralism and a broad-based middle class economy to voters. Right now the opposite is happening.
Tucker Carlson is branding the Democratic Party as foot soldiers for The Squad every night while social media reinforces that narrative with no push-back because liberals are too busy fighting with each other about when the country was founded. Meanwhile, elected Democrats are having public fights over SALT deductions—not exactly a great look to working-class voters—while beltway media vilifies centrists Democrats and attacks the Biden Administration for not reversing every, single policy enacted by the Trump Administration, no matter how popular they are with non-college educated / working-class / minority voters. And their messaging? "Nevermind the bi-partisan bill we already passed to fix roads and bridges, we're going to spend $3.5 trillion on asdlkjhasfiounwacv!"
Broadly agreed.
Even when the Democrats are talking about popular shit, they keep wording it as if it should be unpopular. "We're going to lower the cost of drugs" somehow morphs, in certain circles, into "We'll make drugs more available to historically marginalized populations." FFS, poor white voters *are* a marginalized population, just perhaps not *quite* as marginalized as poor black voters are.
There's certainly no contest between the poor white voter who can't get their kid's diabetes under control because they can't afford insulin and the rich black voter who risks getting shot when the cops pull them over for no reason. And I don't mean that in the sense of "one is clearly worse," I mean it in the sense of "we can solve both, they don't need to jockey for priority with one another."
God forbid we use inclusive and hopeful rhetoric when confronting entrenched problems, instead of encouraging the electorate to think in terms of what's in it for their own narrow demographic slice. Solidarity is a necessary precursor to making life better for all of us, but since we're now home to a bunch of upper-middle class professionals who're here only to seek tribal reasons to look down on other people, we just can't make it stick.
As for the media... the fundamental problem of news media is that we pay full-timers jackshit to pontificate on weighty matters, instead of paying experts well to loan some of their time to discuss them. The overwhelming majority of the people who can afford to get into that gig are the scions of the professional and upper classes, and they mostly don't actually want to put the work in to understand complex issues well enough to be able to distill them to the audience. The state of reporting on the three topics for which I'm a passable subject matter expert (Chinese political economy, mega-project economics, and AEC process automation) is absolute, miserable, could-not-be-worse-if-actively-trying BULLSHIT. I assume that extends to everything else.
Of course, because the media draws its workforce from the same demographics as the new Democratic base, its biases mean that even when it's trying to be even-handed, it's ham-fisted about it.
Just as an example of the former issue, if there were experts in the media who actually spent time writing about what "asdlkjhasfiounwacv" is, we'd be in golden shape, because most of it is popular among working class voters of all stripes.
At the same time, they would have to avoid the IDpol framing for that to come across effectively to all audiences, and I'm not confident that even genuine SMEs could do that now, since it's almost required for academia.
"We'll make drugs more available to historically marginalized populations" perfectly captures the seemingly deliberate effort of Democrats and liberals to write attack ads against their own policies by injecting virtue signalling into absolutely everything. And I blame the Twitter Thought Police for that.
Republicans and conservatives are super good at this game—they routinely sponsor legislation that is nothing but virtue signalling. The difference is that the "Democrats want to raise your taxes so they can kill babies" energizes their base, while "historically marginalized people" drives a wedge between white college-educated liberals and historically marginalized people. How many focus groups do they need to figure out that the latter group tends to finds that language pointless and condescending?
I cannot wrap my head around the zeal with which Democrats and liberals rush to make own-goals with their messaging. Worse, when they get booed for it, they escort the dissenting fans from the stadium and tell them that they are part of the problem.
My expertise is in esoteric science stuff that was rarely reported on. That was before the pandemic. Now I encounter the same phenomenon as you—every time I see a good-faith journalistic effort to explain science to the masses, key details are missing, misunderstood or totally wrong. But that's ok, because they get the contours right and I'm not the target audience. What I don't like is how some substacks then use those journalistic efforts to criticize the liberal-media-industrial-complex by ascribing some nefarious purpose to the uneven spots in what is very difficult reporting.
"How many focus groups do they need to figure out that the latter group tends to finds that language pointless and condescending?"
"We" know this. The DNC knows this, most of the party understands it, and the leadership certainly does. But the Democratic Party is not a monolith, and it's just not possible to shut up the very large part of the wokeist faction for whom the snark, condescension, and feelings of superiority *are the point.* Just because they're "on our side" doesn't mean we share so much as a single motivating factor, or that they're right.
I occasionally wonder if we shouldn't simply spin off an urban/woke party and use it the same way the Canadian Liberals use the NDP, as a foil to highlight their sensible centrist bona fides, even as they govern with an informal confidence-and-supply arrangement. But again, if we could ram that through, we'd also be able to exert messaging discipline, and we can't.
"I cannot wrap my head around the zeal with which Democrats and liberals rush to make own-goals with their messaging"
Well... hard to do otherwise when a significant fraction of (loud) Democrats are in this solely for tribalistic kicks, nothing more. There is no avoiding that, and I'm not sure that the problems it causes can be solved or even mitigated very much. Without a full-court press to marginalize and silence those people, at least... and the Democrats simply don't have the ability to stare down half their donor base, say "Give us money and STFU already," and get on with it.
As for the media... I'm less charitable than you, because in my three sectors everything is still wrong in entirely predictable ways that the media has been told about for a decade or more.
As far as I can tell, a typical reporter just isn't brilliant but thinks they are, finds it very hard to swallow or even understand their own biases, and many have family money propping them up while their "career develops." There's no reason to do better, and their corporate masters have financial incentives that make their reporting even worse.
There are exceptions; many are found in obscure topic-specific publications or here on Substack.
Overall, I'm not sure the problems posed by the current alignment are solvable for Democrats. I suspect the only way out is to lose and for the GOP to fail to solve problems. That will speed the ongoing realignment quite handily.
If I'm right, the party system will continue shifting in a way that eventually makes the woke people less important. That, IMO, will initially redound to the benefit of the GOP, who may actually create a durable majority *without cheating* but be unable to govern effectively, and probably eventually to the Democrats, who will spend a long time in the wilderness purging the idiots while the GOP screws everything up, so that they can sweep back into power.
While the GOP would *love* to turn the US into a one-party state, the mechanisms are just not there, and I doubt they can do much more than give themselves (in current form) a few percentage points of lean in the House to match the ones in the EC and Senate.
If the party system shifts a lot, that will all be for naught.
There's a weird asymmetry there. Every crazy thing uttered by any self-proclaimed liberal or Democrat gets sucked into the right-wing media vortex, glowered about ad nauseum and irrevocably associated with the "D" next to a politician's name. I am always astonished by the ability of your median Trumper to rattle off the same, exact set of "ten crazy things liberals believe" at the drop of a hat.
For some reason, when Republicans—all the way up to His Orangeness—say completely batshit crazy stuff, up to and including direct threats of violence against individual voters, it gets repeated everywhere from late night to podcasts to newspapers to cable news to exactly zero effect.
The marginal voters who decide elections now seem to weigh "that one time AOC wore a dress that said 'Tax The Rich'" against literal threats to overthrow the government violently and decide that they'll just stay home on election day because they didn't get a pony. And I think that Matt's post gets at the reason for that. The mainstream media / discourse / national conversation / etc. is increasingly college-educated liberals talking to each other. They are just incapable of talking in a way that the median democratic voter that Matt always talks about (the non-college-educated white guy in his 50's) takes seriously.
I actually never realized that so many journalists were, in fact, trust fund kids trying to find themselves. It used to be the opposite—journalists used to be hungry and needed to do good reporting to, you know, earn a paycheck and keep the lights on. But through the magic of podcasts, I get glimpses into the backgrounds of journalists (many of whom I respect a great deal). It seems that they come in three flavors; the gruff old reporter who worked their way up from the mail room, the trust fund kid trying to prove something to mom and dad and the sad-sack millennial who can barely make rent and resents the other two flavors.
Wow, you said everything I wanted in that comment with wit and the right touch of polemic.
I would just add the controlling the commanding heights of the culture only goes so far. It doesn't actually control the culture.
And self-assured arrogance always - always - causes a reactionary response. And a big part of that reactionary response can be boiled down to the lyrical refrain in Rage Against the Machine's "Killing in the name" - "fuck you, I won’t do what you tell me"
I partially agree, but you can and do hear from the NYT that what most people mean by "defund the police" or more generally who want to see policing changed (I'll bet "defund the Police" has been uttered more times on Fox that in the NYT) IS "'increase police funding and reallocate resources to better serve the community." You would never hear that on Fox.
Anytime your slogan needs a detailed explanation for what it actually means...you've picked a bad slogan and should pick a new one. I've never understood why they didn't coop the pledge and choose "with liberty and justice for all" or even just "justice for all." Would have tied Fox hosts in knots trying to explain how the pledge was now bad.
"All Lives Matter", "Justice for All", "Concerned Citizens for Better Cops"
This ain't hard.
I agree 100% about it being a bad slogan. "Re-fund the Police" would be closer. :)
They can say what they want, but when proggo bastions like San Francisco can’t keep Walgreens open because they have no will to police “victimless property crimes”, people will call BS.
I lived in a social democratic country for over a decade. It had it all; super high taxes, robust social programs, excellent public transportation, universal health care... and one of the lowest incarceration rates in the world, partly because they decriminalized petty crimes. In fact, if someone breaks into your home, you are supposed to let them take what they want and then file an insurance claim. (It will be denied if you didn't maintain your locks property.) If you try to interfere, you can be charged with assault. Ditto for shoplifting; ask them to put back the merchandise and if they don't, report it to the police, but do not intervene.
Now, I'm not saying those policies would work in the US, particularly because of the vast difference in gun laws, but not policing victimless property crimes can actually work just fine as a policy. It is not as crazy as Fox News makes it out to be. Nor is it as frictionless as they make it sound in 'proggo bastions'.
What did the police do upon being informed that someone was shoplifting or breaking into your home?
Make a report for your insurance claim.
Once, an American friend of mine came home (to the house that he owned) and found his girlfriend (who didn't live with him) in bed with another man. He told the guy to get out of his house before he beat the shit out of him. The guy refused and said it was his right to be there. My friend proceeded to remove him from his home, with violence. The guy called the cops, who arrested my friend for assault and began deportation proceedings. It is quite a bit different than the "I can shoot you in the face if you knock on my door in a way I don't like" American attitude towards private property!
Frankly, despite being well to the left of the median American, I find that absolutely obscene and would never willingly reside in a country with that legal framework. How the hell am I to know at a glance whether someone poses a threat only to my property or to my life and those of my family?
Sure, I understand the incidence of violent crime to be considerably lower in most of Europe, but even so, I simply cannot know if the person prowling my kitchen is looking for my jewelry and wallet, or looking for my wife who he's been stalking for months.
It is entirely moral and good that anyone in that situation should receive a very, very strong benefit of the doubt, such that the onus in any legal setting should be on the intruder (or authorities) to prove they posed no threat to life or limb.
If I find someone breaking into my home in the middle of the night, I'm shooting them and asking questions after.
If I feel secure enough, they might get a yelled warning to get out before I shoot them, but if I can't tell they're armed or not, I'm going to shoot them with no warning and will not feel much remorse.
Was his "visitor" correct in that he had a legal right to be there? Or was the expectation that your friend would call the police to have a trespasser removed?
Well, the type of crime is important in that comparison. Petty crimes like burglary, vandalism and pickpocketing are rampant. But where I was, there was virtually no violent crime. In the 12 years I was there, the entire province had zero murders. And in the cities (and this is true of much of Western Europe) violent crime mostly happens in the immigrant ghettos, i.e., the neighborhoods next to train tracks that are covered in satellite dishes all pointing the same direction.
You are 100% correctly that social democratic policy only works in homogeneous populations, which is a key detail that American socialists do not understand. People are only ok paying super-high taxes for super-great social benefits if they see those benefits as going to "people like me". (Those uber-progressive social policies also came with a very conservative and coercive culture, which is a byproduct of homogeneity.) The influx of Muslim and African immigrants into Europe—something mostly homogeneous modern Europe is not accustomed to—is jet fuel for the far-right populists parties that are gaining traction.
Personally, I did like being an "other" in such a homogeneous place and I found the culture paradoxically very tolerant and very constraining. But Singapore really creeps me out, especially when random people start professing their love of the quasi-dictator to you for no apparent reason. I like the American way of doing things.
Oh, to be sure, I agree with Joy completely and fully understand and support what 'the defund movement' is all about. But I'm not the one who needs to be persuaded!
People in under-policed neighborhoods forwarding bath-faith memes and chain emails about how Democrats want to abolish their police department are not likely to read a think piece in the NY Times. And yet, there is no shortage of liberals wagging their fingers and lecturing people who can't be bothered to dive into nuanced, long-form articles about municipal police budgets.
But if you need to have a NYT subscription to understand what a slogan "really means" then it's probably a bad slogan. Especially if the true meaning is in some ways the exact opposite of a literal reading.
True. DFP is a bad slogan. MY point was that most (not, unfortunately 100%) NYT readers a) probably knew all along what it meant and b) read things "explaining" what it meant. No one viewing Fox ever saw it explained.
Democrats believe as do their voters that they are the party that supports the working class (minimum wage, unions, etc…), but if the educational polarization continues, then s their an inflection point where Democrat voters abandon the working class and pivot to policies that only support themselves.
Student Loan Forgiveness is one of the issues on the forefront on this. Most blue collar workers don’t go to college and don’t obviously benefit from this, whereas the rising creative educated class will.
And I suppose the same question goes for Republicans… at what point do they alter.
As I have said before, I honestly think there’s a scenario where the parties switch sides at least economically.
The Democratic Party is still the party of the working class, just not the white working class
I'm not sure the point of this comment. I'm talking about the future. Matt addresses the trends in working class votes with non-whites trending away from Democrats.
You are talking about "still". It's like saying, our climate temperature has only risen 1 degree. Sure, it's true, but we are worried about the future 1.5 vs 2.5 increase.
I think his point is that as long as non-whites are a big part of the Dem coalition, and non-whites are disproportionately working class, that reality will ensure Dems can't ignore working class issues. E.g., the $15 min wage
And if that was not his point, it's mine :-)
That still goes to the point that the trend is for non-white working class to drift away from the Democratic Party. And at a certain point, this trend accelerates (possibly... I don't know that it happens... just that it could happen). You are still talking about now or immediate future. I'm talking a decade or two from now.
You can't really claim to be the party of the working class when you don't represent the largest group of the working class. As of 2016, whites constitute 58% of all working class adults.
The question of "selfish grasping" strikes me as critical. At some level, politics has to be about "what's in it for me," hence the popularism thing. Politicians (& smart people like Matt) have the critical job of designing policies that highlight a broad definition of "me."
Which is why "I took out this big loan for a fun four years, please make it go away via policy or magic so the next generation can make exactly the same mistake" seems DOA forever, as it should be.
If it was just "a fun four years", then that would be a fair point. But we do actually need some graduates, and education has a value in itself.
The point is that, unless you think that university education is a mistake, then you have to have a way to fund it that doesn't financially cripple the minority of graduates who don't get well-paid jobs (even if the number of graduates is reduced by policy, there are still going to be people who have mental or physical health issues that prevent them working). That means either you restore the ability to discharge the loans in bankruptcy (though the problem is that the vast majority of graduates are technically bankrupt the day they graduate, so there is a risk of abuse), or you have to replace it with an income-based contribution system (or make all taxpayers pay).
It seems to me that the most logical approach is to contract for income-based contributions up-front, where the percentage of income can be based on the amount that the student receives. Remove the upper limit, ie get rid of the idea that this is a debt that can be repaid, and make it more like an equity investment that cannot be repaid, but where the ex-student pays out a percentage of income either for life or until Social Security eligibility. That way the small number of super-successful graduates can make up for those that don't earn enough to repay, which resolves the usual issue with income-based plans (that being that poor graduates don't pay off their debt, but no-one pays in more than their debt to make up for it).
I don't pretend to understand the scope of the problem, but I think a big part of it is that Big State U down the street correctly sees prospective students as prospective customers, and it needs to market itself to those customers with attractive amenities that surpass those at Big State U in the next state over. Some amount of this bloat (again, I don't pretend to know how much) is paying for increasingly opulent dorms and student unions and rec centers and other things that are legitimately nice things for students to have, but don't necessarily show up in black on the societal bottom line. And then if you're already taking out 100k for undergrad, or whatever, then why *not* spend a little extra to be in that nice new apartment building just off campus?
I say all of this as a proud thrice-graduate of Big State U.
Sure. And the administrative/management layers of Big State U are a lot bigger and a lot better paid than they used to be, which increases tuition.
And Big State is no longer contributing nearly as much to Big State U per in-state student, which has also driven tuition up.
But this gives you a system that can set real incentives: go live in that apartment building and you'll pay 0.5% more income tax for life. Go to Directional State U instead, and you'll pay 5% less income tax for life.
We’re talking about 17 year old kids entering into financial arrangements of which they don’t understand the implications, usually at the behest of trusted adults who tell them college is the only way to secure a decent future.
In context, it’s not the least bit unreasonable for many of these folks to feel this is not their fault, and it’s destroying the prospects of a large part of a whole generation.
At some point, the “reset” button will be pressed, it’s just a matter of how.
The thing is, when I read this characterization of the problem, I find it damning of every single party involved. It reminds me of the subprime mortgage bubble.
- The government is financing predatory financial arrangements that in total are insolvent. They know it's a failure and won't take the hit.
- Parents/guardians/trusted adults are deluded/swindled into convincing their children on the cusp of legal adulthood to sign away years of their future. They have responsibilities they are abdicating.
- 17/18-year-olds who are supposed to have learned some math to be in this situation are borrowing huge sums to buy lottery tickets and a huge portion aren't even trying to fill out the lotto ticket properly to have a shot at a return.
Yes, the reset button will be pressed. Just like in the subprime mortgage bubble, the borrowers' credit will likely still be devastated by that reset button. The lenders will need to be recapitalized, which will mean tax increases. Everyone will be to blame and we'll try to just forget how it happened.
When I say "reset button," I mean that there shouldn't be a market for "student debt" at all.
It requires both explicit (subsidized interest rates) and implicit (bankruptcy exemptions) to make it work at all and only exists because both higher education and banking lobbies have captured the regulatory apparatus.
For the amount of money the Federal government spends running this so-called "market" that it created and operates entirely on its own, we could instead make community and public 4-year degrees free for all current enrollees.
Obviously, doing so would provoke enrollment to increase, but we can actually resurrect a selective admissions process for state schools.
The whole damned thing needs to be burnt to the ground.
Without sweeping reform of the system that brought upon that debt, that would only make the problem worse. The next generation would *correctly* learn the lesson that they can be fairly casual about the educational debt they take on--if things get too bad, society will decide to wipe those debts away.
Trueness. I had my daughter max out her student loans, even though she was getting by without them. Worse case scenario, she just pays them back (the money is sitting there).
People's politics are always quite transparent when they're forced to reveal exactly *who* they feel are the crux of moral hazard problems.
I am simply not concerned about moral hazard applied to a bunch of stupid kids who were led by the nose into bad decisions.
I am concerned about moral hazard on the part of those who did the leading, most especially the higher education lobby and the politically connected finance interests involved in this so-called "market".
If we burn the latter badly enough, the whole "market" goes away, and the former problem solves itself with no moral hazard for students.
"it’s destroying the prospects of a large part of a whole generation." this is hyperbole. 85% of the population has no loans! The average student loan debt is 32k, but the median is 17k. Less than 4% of the population has student loans over 25k.
Large student loans are painful, but they are concentrated among a very small percentage of the population (who often have significant earning potential). We should definitely address the problem, but recognize that it doesn't have anywhere close to the impact that other issues have.
"85% of the population has no loans!"
75% of the population is under 19 or over 40. If close to half of the remaining 25% have loans, as is born out by your statement, that is a "large part of a whole generation".
We're aware that 40% or so of each of my generation and the next one have student loans.
Approximately half of those are people who did not ultimately graduate, and for many or most of them a median burden of $17k is a near-impossible impediment to a stable life.
Approximately half of graduates are not realizing a significant value premium from their degree.
There's a large body of economic work showing that these debts are impacting home purchases and child-bearing. Not just their direct costs, but by forcing people to live in high-cost-of-living areas to earn the income to pay them down, and thereby subjecting themselves to high housing costs and delayed family formation.
Given the extent to which stable family structures and child-rearing are crucial to the next generation, it needs to be fixed.
And I maintain that the moral culpability here is not on the 17 year old, but on the college counselor, the parents, and the higher education lobby. Gut their ability to make this happen again, but fix the existing problem too.
I would argue that the cartel is only part of the problem. Without the Fed's easy money this would be much less of a problem.
No bank is going to loan someone $100k for a gender studies major. But with the Fed skies the limit.
I strongly support making total loan amounts contingent on average expected salary of the major. In addition, colleges should get tuition clawed back from bad loans. And student loans should be easier to discharge in bankruptcy
You've studied this so perhaps you have a reasoned opinion on it (as opposed to me who, like Jon Snow, knows nothing). Can't a goodly portion of the higher education funding problem be laid at the feet of state legislators who simply don't want to pay? Admittedly, they've got lots of reasons for this, but many of them are indeed extremely shortsighted or, in the grand scheme of things, not very important.
This assumes that millennials are a monolith. Taking it back to student loans. Only 39% of millennials have a bachelors degree, 42% have student loans.
That's not to say that there won't be some push towards democratic socialism, but I don't think its a given.
I do agree with you in the future that it won't be a straight flip-flopping of positions... it will be most likely two versions of more liberal positions.
But taxes on middle class are definitely one thing that has potential to flip.
If Democrats are overwhelmingly middle to upper middle class, then support on raising taxes on themselves will be... not so enthusiastic. The battle over the SALT reduction is a prime example of this.
Everyone self-selects their cohort and misinterprets them as being representative (no one I know voted for Nixon, etc.), but none of my mid-30s college-educated friends express a loan forgiveness view that doesn't include at least some pretty hefty public service requirements. Blanket forgiveness of any magnitude is not discussed.
True... but there are plenty of blanket forgiveness advocates out there... at least on twitter.
"Only 39% of millennials have a bachelors degree, 42% have student loans."
It's worth pointing out that those figures shouldn't be interpreted the way we do at first glance. Half of those degree holders don't have debts, and half of debt-holders are blue collar kids who didn't finish their degree.
The biggest beneficiaries of wiping the slate clean would be blue collar folks who made a run at a degree and didn't grasp the brass ring, not actual graduates.
Maybe true.... but the key factor is its under 50% of people no matter how you look at it.
Find-replace "millennials"->"very #online millennials" for a great many of these comments.
>>If the Boomers' descent from idealism into selfish grasping can teach us anything<<
As a Boomer growing up in the 1960s and was part of my generation's lumping every single one of my parent's generation into the category of stifling 1950s conformism, I confess I'm pleased to see the younger generations are eager to play the same trick on us as well.
However, recall that those folks condemned as hawks, conformists, racists and misogynists were then later transformed into the "Greatest Generation" and venerated perhaps a tad too much. What goes around, comes around, I guess. I await my generation's exoneration.
Demarcating the generations is a mugs game. The baby boomers could be defined to include people who became adults in the sixties and people who did so in the early eighties. This is all to say that spending too much energy on describing what a generation believes isn’t worth the effort.
I definitely agree that it's harder to get ahead now days. I've got my CPA, MBA. And am head of finance for a mid sized company. And without my wife working, I feel it's still a struggle to live a upper middle class lifestyle. 40 years ago, that would have been no problem. The primary driver of that is because of higher housing costs.
As for austerity politics. Nobody likes austerity. What people like is low taxes with lots of government benefits. But the problem is the real world doesn't work that way, at least not long term.
You mention "privatizing" Social Security as one of those awful ideas Republicans proposed. The GWB 2005 proposal was to allow people to divert part of their Social Security taxes into an investment account for their own benefit. It was soundly beaten back by Democrats and Progressives.
Since 1/1/2005, as measured by the VTI (an ETF tracking the total stock market), the stock market is up by 427%, for a CAGR of 10.4%. Thank goodness we didn't allow workers to participate in that growth and left it all to the rich.
But that’s not how it works in reality for most people. IIRC the average return on a 401k is negative as people buy high and then panic and sell low. Now you’re going to say, “What moron trades their 401k?” My point exactly.
I'm hoping my child's first words are "buy and hold"
"HODL"
This appears to be a myth; I didn't find any supportive sources and found a number of contradictory sources. And certainly the trend has been to default retirement savers into auto-investment target-date funds and let them forget about it. I'm sure some people still manage to actively buy and sell their retirement funds so badly that they make a negative return, but it doesn't make sense that a *majority* of people do that. Probably most people ignore it, as intended.
I think they included cashing out when switching jobs which apparently more than half of 20 somethings do as well as over 1/3 of 50 somethings.
The Fed had a report a while back talking about how in an emergency, 40% of people wouldn't be able to come up with $600 without selling something they own or borrowing. (Crazier to me is that 20%+ of people making over 100k couldn't come up with 2k in an emergency).
A large portion of people only have their 401k account as savings. So if they lose their job, they take money out of it because its the only money they have. This often looks like > the economy tanks (2008) > people lose their job > access the only savings they have in their 401k,when its the absolute worst time to do so > lose money on their 401k.
This isn't true for everyone, or even the majority, but its a real thing for a lot of people. It also doesn't apply to SS.
easy solution then: no cash out early. Same as with current Social Security.
I don’t know how easy that would be to include in the legislation. Certainly some people would argue that people should be able to access the money in various circumstances. The real estate lobby would certainly push to allow home buyers to access it.
The incremental paycheck funding structure of a 401k makes it impossible to buy high. Some might sell low - IDK. As other have mentioned, [citation needed].
I mean...
I can, and have, shifted investments between index funds and cash-equivalent funds.
Thanks to my China contacts, I had the advance warning to shift retirement holdings into cash-equivalent funds in Feb. 2020 and only moved them back into index funds later on.
I got it mostly right, but it's entirely possible to shift between asset classes in a way that's effectively buying high and selling low.
Sure. I have too. Different strategy, I reallocated a % of my cash position on 3/27/20 to AMZN. So we have n = 2. Still ... I'll defer to Thaler's research at UChicago on the inherent stickiness of 401k selection and allocations here. The TL:DR is people don't touch their 401k. That's the problem he was solving with the Save More Tomorrow (SMaRT) program.
I'm not claiming anything with regards to prevalence, because I have no idea.
But "makes it impossible to buy high" is not accurate.
You forgot the part about "incremental paycheck funding structure" which is accurate. Even if you trade the low - the next contribution comes in to dollar cost average.
"IIRC the average return on a 401k is negative"
[Citation Needed]
I find that almost impossible to believe. You're pretty limited in when you can withdraw money from a 401k before retirement, so money tends to sit in 401ks with little meddling. Also, the government could prohibit withdraw money from the portion of SS that's privatized. In principle, you could lose money by rebalancing in dumb ways, but I doubt that's common.
I believe something like 70% of 20 somethings cash out their 401ks and pay the penalty when they switch jobs.
I'll add that this is kind of a moot point for social security privatization. Just prohibit early withdraws. That's what current social security effectively does.
Citation needed here.
Here is a better one:
"More than half of workers in their 20s who have 401(k) plans cash out their holdings when they change jobs, partly because their balances are relatively low, according to a report from the benefits consultant Aon Hewitt. Only about a third of those who change jobs in their 50s do the same."
1/3 of people in their 50s!! are cashing out, paying taxes and a 10% penalty.
Yikes, that statistic is worse than I expected.
That said, it still doesn't mean that the ROI is negative --- either by how the actual funds do or simply comparing input to output. The 10% penalty sucks, but it's partly (more than?) offset by any employer match to 401k contributions. I can only speak to my personal experience: my previous employer would do a 1/3 match (up to 6% of salary) and my current employer does a 1/2 match (up to some high level). So 10% penalty + taxed as income vs taxed at capital gains (say 13% difference) vs 33% or 50% employer match. That comes out as positive --- especially if the stock market is doing well.
Also, given that 2/3 of people in their 50s don't cash out, I stick by my intuition that the average ROI is positive.
https://www.nytimes.com/2013/10/03/your-money/what-to-do-with-your-retirement-plan-if-you-change-jobs.html
“And yet, nearly half of employees cash out their 401(k) balance when they move to a new job, according to a survey by Hewitt Associates.”
It’s higher for 20 somethings but I can’t find that statistic.
https://diversyfund.com/blog/what-should-i-do-with-my-401-k-when-my-job-ends/?utm_source=www.google.com
I don't think its negative but I have read that its VERY low, like maybe 3%? Because people do buy high and sell low. However I just Googled it and couldn't find any real info.
401k funding = dollar cost averaging. They literally can't "buy high".
Sure they can. They choose the money market or bond option because they are worried about losing money. Then the market shoots up and they worry about missing out so they move it to equities. Then the market slide and they sell in a panic.
That's not at all what the "intelligent default choice" research indicates. The problem is people don't *look* at their 401k. That's why the set-up is so important.
I'm deeply incredulous that large numbers of people are actively moving money around in their 401Ks trying to time the market. I mean, I have a JD and a BS in economics and *I* don't know offhand how to move money around in my 401K -- the money is just going into whatever funds I designated when I set it up.
Hang on, to my knowledge "since Social Security already does that by investing its trust fund" is wrong.
They're statutorily required to invest *only* in US Treasuries. The Social Security Trust Fund is explicitly *not* permitted to act as a sovereign wealth fund, at all.
Do you have a link to support your lockbox claim? I don’t recall that being part of the proposal.
leave the stock market growth to us rich folk
At the time I was marginally in favor of privatizing social security but couldn't get past the moral hazard issue.
Some of the plans either provided a minimum benefit no matter how your investment did. This can encourage risky stock market investment (assuming you weren't forced into some government managed index fund - which would be a HUGE index fund - unclear how that would distort the market), with the knowledge that it's not _really_ that risky because you've got guaranteed minimum payouts. So the right thing to do might be to put those in high risk accounts.
If the plans did _not_ provide a minimum benefit, and people went risky and lost it all... I did not believe that we as a country would not feel bad and end up giving them their money anyway down the road.
In general, I liked the _theory_ of letting people invest it, but the _practice_ seemed terribly fraught.
Crazy that people prefer a defined benefit to a savings account.
In sitting in Massachusetts, me and all my friends with doctorates and professional degrees, waiting for my blue state utopia. I’ve wondered why we don’t just go for it. We have a Republican governor now, but we didn’t a few years ago, so I don’t think it’s that. Plus, we got our “commonwealth care” during the Romney years.
How does the blue state utopia project intersect with Milan’s piece about state legislatures not working well?