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Rent Control: A Review of Brink Lindsey and Steven Teles’s Captured Economy

In the Fray - Sat, 07/21/2018 - 22:22

The Captured Economy: How the Powerful Enrich Themselves, Slow Down Growth, and Increase InequalityBy Brink Lindsey and Steven M. TelesOxford University Press. 232 pages.

The rents are too damn high. That’s the conclusion of Brink Lindsey (of the center-right Niskanen Center) and Steven M. Teles (of Johns Hopkins University and Niskanen) in their book The Captured Economy: How the Powerful Enrich Themselves, Slow Down Growth, and Increase Inequality. By “rents,” Lindsey and Teles don’t mean what you’re late in paying your landlord, but rather “rent” as economists understand it: profits in excess of what a free market would normally allow. In recent years, they argue, large corporations and wealthy individuals have taken larger and larger slices of the economic pie not by creating things of value—inventing the next iPhone-like innovation, say—but by using government policies to quash competition. This involves not just “regulatory capture” (a social-science term for when the industry fox watches the consumer henhouse) but a broader takeover, with all levels of the government—both those who write the rules, and those who enforce them—bending the knee to particular business interests or organized elites.

Lindsey and Teles put forward a thought-provoking and persuasive argument, one that challenges some of the pieties of America’s two major political sects. The conservative belief that the market, when left to its own devices, will work things out for the good of all can be naïve, they say, about how easily the biggest players on the economic field find ways to rig the rules or work the ref. And the view on the left that income inequality is skyrocketing because government is not doing enough is true enough, but it is also the case that government is doing too much—or, more specifically, too much on behalf of certain wealthy interests. When these privileged groups tilt the playing field to win outsized gains in the markets, the outcome is less economic growth and greater inequality—which should trouble both conservatives who champion free markets and liberals who favor government intervention, Lindsey and Teles argue.

The book examines rent-seeking (“business activity that seeks to increase profits without creating anything of value”) in several domains. In the financial sector, for example, the banker and investor class has set up a cozy nook of legal protections and government subsidies, enabling them to pursue highly profitable but systematically risky ventures (such as their aggressive hawking of the complex mortgage products whose explosive chain-reaction of failures lit up the world economy in 2008). Their market misadventures, in turn, are routinely bailed out by politicians desperate to avoid being blamed for the collateral damage wreaked on ordinary Americans. Meanwhile, the incomes of these financial mavens inexplicably get taxed at lower rates, so much so that Warren Buffet and Mitt Romney pay less in tax than doctors or lawyers in their same tax bracket (or, for that matter, their own administrative assistants).

Lindsey and Teles (who describe themselves as a libertarian and a liberal, respectively) also criticize forms of rent-seeking that happen to have fans across the left/right divide. For example, they discuss how overly stringent copyright and patent laws—the outcome of years of well-funded lobbying—have stymied innovation and creativity while benefiting a bipartisan group of business interests that includes Hollywood studios, tech companies, and pharmaceutical firms. (Big Pharma’s rent-seeking recently made the news thanks to an investigation by the Center for Public Integrity and National Public Radio, which found that “drug companies have infiltrated nearly every part of the process that determines how their drugs will be covered by taxpayers.”) In a similar way, state licensing laws regulating a wide range of occupations—from doctors and lawyers, to sign-language interpreters and interior designers—have clamped down on competition by discouraging newcomers from entering these fields, keeping wages up for industry insiders while effectively raising prices for consumers. And zoning laws have helped homeowners of all political stripes prop up the value of their property while making it harder for others to find affordable housing, particularly in booming areas with good jobs.

As smart as its analysis often is, The Captured Economy ultimately underscores a major blindspot in much think-tank thinking on matters of income inequality. To fight rent-seeking, Lindsey and Teles recommend a range of good-government reforms, from bulking up in-house expertise in federal agencies to moving decision-making out of venues where the deciders can easily be swayed by outsiders. But the authors lack a compelling vision for how these sorts of technocratic reforms will be enacted. At one point, they suggest anti-rent-seeking campaigns could follow the lead of the environmentalist and school reform movements, which each drew decisive support from wealthy donor-activists. “In the present context, the ironic implication is that efforts to claw back upward-redistributing rents depend significantly on the willingness of wealthy individuals and foundations to provide funding and organization,” they write.

But there is an alternative source of funding and organization that Lindsey and Teles don’t much discuss: labor unions. Before its decline in recent decades, the labor movement helped keep America’s economic system in some sort of balance, providing a countervailing power to check the influence of big business. As scholars have found, a thriving union sector helped not just workers they directly organized, but also those in workplaces that had to compete for workers. And when policies like higher minimum wages and expanded health care coverage were enacted, labor unions often provided the economic, political, and informational muscle to win those struggles.

But by the definition Lindsey and Teles use, unions are rent-seekers—able to “increase the wages and job security of their members above what a competitive market would provide, with costs passed on to consumers,” as the authors put it. In fact, the goal of school reformers has often been to smash teacher unions, which they label special interests that rack up unfairly high salaries and employment protections at the expense of kids. Based on the book’s anti-rent-seeking analysis, one could draw the conclusion that we should rein in all unions with the very same aggressiveness used to rein in, say, Wall Street bankers.

But the problem is not really that there is too much rent-seeking. As I argue in my book, the problem nowadays is that there isn’t enough on behalf of the working class. Indeed, with the decline of organized labor, ordinary American workers are the one “special interest” that routinely gets ignored in Washington and the nation’s statehouses today.

Here it is important to recognize an important fact about the economy: the rents are always going to be too damn high. Many social scientists, particularly economists, like to imagine a state of nature where markets are truly free, competition leads to greater efficiency and innovation, and government has nothing to do but enforce a few rules—mainly about who owns what. But others, particularly sociologists, would point out that the government is always heavily involved in the economy. Markets are not some Platonic ideal or divine design, handed down from up high. Governments construct them, at every step along the way making political choices about what rules will exist, and how they will be enforced. Those choices are judgment calls that inevitably give some players an advantage over others.

Attaining a nirvana of perfectly free markets, where individual buyers and sellers frolic together, is not only impossible, but also ignores the fact that certain market players always wield more power than others, and there are always losers as well as winners. Whether we call it rent-seeking or not, collective organizing on behalf of policy advantages is not inherently bad, and in fact, given the inherently unequal nature of political and economic life, it is essential if disadvantaged groups are to get a “fair” deal. (Think of the political party machines of past centuries, which, as scandal-ridden as they were, gave impoverished new European immigrants well-paid patronage jobs and a powerful voice in the country’s politics.)

The distinction I’m making is not a trivial one. If it is true that rent-seeking is not a bug, but a feature, of our economy—that every group bands together on behalf of their interests—that changes how we should deal with it. Rather than seeking to root it out everywhere, we’re better off understanding economic policy—and politics more broadly—as a way of prioritizing interests. As Lindsey and Teles themselves point out, the wealthy have an easier time at rent-seeking—not just because they have more money, but also because they often hail from the same cultural and intellectual worlds as the politicians and regulators they seek to win over. Other kinds of rent-seekers—such as taxi drivers of “modest incomes,” or labor union members who are, “at best, middle class”—are, by default, at a disadvantage in this contest. Because they are playing at a handicap, we should not only tolerate some degree of rent-seeking on behalf of the working class, but actively encourage it.

This is not to say that unions don’t have their flaws. Corruption can be a major problem (again, think of political party machines). And at times unions are too willing to prioritize narrow gains for their current members over contracts and policies that will help workers more broadly. But that is the point: politics is a messy, ugly business, a continual clash between organized interests, and we should not be so naïve to think that a movement of genteel reform—particularly one “funded and organized” by “wealthy individuals and foundations”—will bring about an economy free of this sort of collective self-advancement. It is better, and more realistic, to give the working class a decent shot at prevailing in the fight.

Exclusive: Listen to two tracks from Mike Brody album Sell Me A Bridge, out Oct. 27

Punchline Headlines - Tue, 10/17/2017 - 15:08

When NBA star forward Kevin Love left the Timberwolves to join LeBron James and the Cleveland Cavaliers, stand-up comedian Mike Brody – like most sports fans in Minnesota – was all sorts of bummed. But Brody turned his pain into comedy and his comedy into nearly three million views on YouTube with “Kevin Love Jersey Burning – Minnesota Nice Style,” a video poking fun at those who think defiling store-bought sportswear is a bold protest while simultaneously having a laugh at his Midwestern roots. It’s hilarious and, actually, kind of sweet.

Three years later Brody’s head is in a different place, not that he’s above light-hearted goofs. But as he prepares for the release of a new stand-up album Sell Me A Bridge (Oct. 27 on Rooftop/Audible) Brody is reveling in the newfound freedom he feels from writing much more personal material. “I think I got to a point in my career where I realized that I wasn’t really being me on stage,” Brody tells Laughspin. “I was down in the dumps and stalling creatively. Plus, my best friend, comedian Bill Young, had died and it sent me into a tailspin. I had a career and I was funny. But I wasn’t sharing anything about me as a person and I made a conscious decision to change that immediately.”

With that in mind, Laughspin is psyched to exclusively premiere two tracks from Sell Me A Bridge, which you can ear-peep below. Also below: A complete track listing plus more from Brody on the making of the album. Enjoy!

PRE-ORDER MIKE BRODY’S ALBUM ‘SELL ME A BRIDGE’

Sell Me A Bridge – Complete Track Listing

1. Fat Again
2. Reality Check
3. Grief Porn
4. Sobriety is a Tricky Thing
5. Sell Me a Bridge
6. Adult Child
7. Mike Brody Goes West
8. Moment of Truth
9. A Tale of Two Dachshunds
10. Pet of the Week
11. Look at Me!
12. Tell Everybody!
13. Cat Attack

ON WRITING NEW MATERIAL
I recorded this album in mid-August and every joke except one was written since January 2017. I just gave myself a deadline and stuck to it and I ended up writing my favorite material ever, because it’s all me.

ON GETTING PERSONAL
In the past, I really had a hard time talking about sobriety and things like that on stage. Any time I’d start, someone would yell out ‘Quitter!’ or something shitty. I don’t get stage fright anymore, but if an audience doesn’t like a joke about a sandwich, it’s no big deal. If they don’t like your joke about your personal struggle with sobriety that you’ve fought for over a decade, it hurts. It’s YOU.

ON THE TONE OF ‘SELL ME A BRIDGE’
The album is dark in places and light in others, just like life. It’s incredibly personal, talking about struggles with weight, suicidal thoughts and moments in my life when I felt trapped and depressed with no way out. But at the end of the day I’m an optimist, and I got through it all. And I wanted this album to reflect that life can be dark with twists and turns, but there’s always a light at the end of the tunnel. And I dedicated the album to the memory of Bill Young, because the tragedy of his death was the beginning of all this for me.

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Julian McCullough headlines fundraising event to ‘stand up’ against mental health stigma (guest post)

Punchline Headlines - Thu, 09/07/2017 - 13:03

Storytelling is a powerful agent for change. Sharing personal stories with others takes bravery, especially when a person is opening up about their own mental health journey. In doing so, they may feel vulnerable or judged. And while those feelings may exist because of the dark shadow stigma casts on mental health, something far more important and impactful is happening; people are learning, relating—empathizing. Stigma is replaced with a message of hope.

The individuals listening may be going through similar issues, and therefore the storytelling is helping others feel like they are not alone. Sharing mental health stories is combatting stigma. These stories of lived-experience are relatable and genuinely felt. They are not forced, staged, or mechanical. They are truths being told based on that person’s life.

Similarly, comedy that resonates with an audience is also storytelling at its finest. Human life as told through the eyes of a comedian has a very unique appeal. Good stand-up comedy wouldn’t exist without comedians willingly stepping outside of their comfort zone to share their personal stories. It can even be therapeutic for the comedians and audience members. The very events a comedian shares on stage may be similar to the experience of an audience member, giving them both an opportunity to laugh and find humor in life’s situations.

On Monday, September 18, 2017 at 8pm, comedian, actor, and writer Julian McCullough will bring you comedic storytelling at its best. He will team up with the Jordan Porco Foundation charity for a night of stand-up comedy to stand up against mental health stigma at the Comedy Cellar at the Village Underground. All proceeds — TICKETS HERE — will benefit the mental health promotion and suicide prevention programs of the Jordan Porco Foundation.

“When celebrities like Julian use their influence in support of raising mental health awareness, it makes them key allies for challenging stigma, wherever it may be. With comedy, Julian has found ways to broach tough topics, providing what many cannot—a sense of relief and laughter,” said Marisa Giarnella-Porco, President and CEO of the Jordan Porco Foundation.

Relief from stigma is needed. Research on stigma towards mental illness shows that most people, starting at a young age, hold negative attitudes towards people with mental illness. These attitudes include stereotypes and perceptions that those with mental illness are dangerous to others. According to the World Health Organization, depression alone is the leading cause of disability in the world. One in four American adults is suffering from a mental health disorder this year. But, even though this crisis is so visible in our society, only 25% of those diagnosed with mental illness feel that other people are caring and sympathetic towards individuals with mental illness.1 Stigma can create overwhelming feelings of isolation and shame that cause people with mental health issues to distance themselves from their family and friends, due to fear of being judged.

“I don’t want my daughter to feel alone, to distance herself from the people she loves. My daughter’s mental health is important to me because I don’t want her to simply endure life, I want her to enjoy it. I want her to be able to talk about how she is feeling without fear being judged. I want her to freely share her talents with the world, know how to take care of herself, and how to take care of the people she loves… especially me when I get old,” said Julian.

Sharing our stories helps bring people together, replacing fear with hope. It takes a village to stand up against mental health stigma and change the mental health landscape. Come be part of our village at the Comedy Cellar at the Village Underground. Get your tickets, here. Tickets are $80 per person. Doors open at 7:15pm for the 8pm show. 21 and older.

About the Jordan Porco Foundation

The Jordan Porco Foundation’s mission is to prevent suicide, promote mental health, and create a message of hope for young adults. This is accomplished by providing engaging and uplifting peer-run programs on college campuses. Their programs strive to start a conversation about mental health that reduces stigma while encouraging help-seeking and supportive behaviors in order to save young adult lives. Learn more at jordanporcofoundation.org.

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