Avoiding Another Recession

The Great Recession of 2007–8 led to the passage of the Dodd-Frank Act, which hopes to make it harder for financial companies to engage in the kind of risky, damaging behavior that led to the recession in the first place. But for the legislation to work, the people involved have to support its provisions and intent. In other words, the businesses and people whom the regulations are supposed to regulate must not be allowed to "capture" the regulatory system and manipulate it for their own ends.

In that regard, at least in the first few years after the act was passed, a group of small organizations emerged as important players in the effort to curtail irresponsible behavior by the Morgan Stanleys and Citigroups of the world. Two of those small organizations are the Financial Stability Oversight Council and the Commodity Futures Trading Commission. 

The Financial Stability Oversight Council, a federal body created by Dodd-Frank, deals with the problem of what is known as systemic risk. Systemic risk is any action that, through a series of related, subsequent events, can bring down the entire economy. 

The other organization, the Commodity Futures Trading Commission, already existed. Its mission was expanded by Dodd-Frank to include regulating what are known as derivatives. A derivative is an asset such as a stock or bond that depends on an underlying asset for its value.

What does this all mean? Well, for political scientists, it means this: traditional accounts of the politics of financial regulation are no longer sufficient. The traditional accounts hold that concentrated business groups pilot the industry through new regulatory waters. At least in the last decade, smaller organizations such as the two mentioned here have played a role as well.

For an account of the situation described here, see "After Dodd-Frank: Ideas and the Post-Enactment Politics of Financial Reform in the United States," by J. Nicholas Ziegler and John T. Woolley, in the June 2016 issue of Politics & Society.

Models of Economic Growth in the Post-recession Era

Are all advanced capitalist economies alike? Or is each unique?

That question is asked by a branch of political economy known as "comparative political economy," or CPE. Before the 2008 recession, the general consensus was that each capitalist economy was different. But since the recession, that consensus has fallen apart. Some scholars now hold that all capitalist economies, far from differing from country to country, are essentially alike, insofar as they are all socially regressive. 

But could both camps be right? Do advanced capitalist economies share many features in common while still retaining important differences?

A 2016 article in Politics & Society says yes. The article presents a new framework or way of understanding capitalist economies that incorporates the important elements of capitalist economies in their full complexity. 

The main contribution of the framework is the addition of certain insights that are neglected by CPE scholars. Those insights stem from the work of two twentieth-century economists: John Maynard Keynes and Michał Kalecki. The insights emphasize the demand side of the economy and place the distribution of income, among households and between labor and capital, at the center. 

To understand the new framework, consider that until around the 1970s, most capitalist economies were driven by growth in wages. But wages have been largely flat since then. As a result, countries such as Germany and the UK have looked for other ways to expand their economies. Countries that have been successful in that regard have relied on increases in household spending or on increases in exports.

But the two--consumption and exports--should not be seen as equivalent. Each, for example, will affect the income distribution in different ways.

The 2016 article, which is titled "Rethinking Comparative Political Economy: The Growth Model Perspective," is by Lucio Baccaro, a professor of sociology at the University of Geneva, and Jonas Pontusson, a political scientist also at the University of Geneva. It appears in the June issue of Politics & Society.

Whither the White Voter?

The 2016 US presidential election prompted many people to wonder if working-class white voters had finally shifted their allegiance to the Republican Party. For decades, the Democratic Party had been the party of the little man, right? But has that really changed?

Not entirely. What's really been happening is that the white working class has become fickle, open to persuasion by the political party that can best articulate the right combination of economic and noneconomic concerns. So says a 2019 article in the social science journal Politics & Society by two political scientists, Herbert P. Kitschelt of Duke University and Philipp Rehm of The Ohio State University.

Professors Kitschelt and Rehm were able to reach those findings by grouping voters by both education and income, rather than just one or the other, as other studies tend to do. They then compared the groups of voters with respect to views about welfare programs and views about civic and cultural liberties, race, and immigration. 

What they find is that there has been a profound switch. The two groups that used to be swing voters are now tried and true Democrats or Republicans: high-education/low-income voters are today loyal to the former, and low-education/high-income voters now support the GOP. By the same token, the old reliable constituencies are now swing voters: low-education/low-income voters who used to reliably vote Democrat, and high-education/high-income voters who used to reliably vote Republican, are both up for grabs.

The lesson for those seeking office is that voters cannot be treated as simple actors who care only about a small number of issues. As the authors write, "Politicians in a knowledge society will not enjoy the luxury of reducing the political-issue space to one dimension." 

The article by Professors Kitschelt and Rehm is titled "Secular Partisan Realignment in the United States: The Socioeconomic Reconfiguration of White Partisan Support since the New Deal Era" and appears in the September 2019 issue of Politics & Society.

Blowing the Whistle in the New Age of Big Data

In recent years there have been several high-profile cases of whistleblowing, including the case of Christopher Wylie, who in 2018 reported publicly that his employer, Cambridge Analytica, had misused Facebook data to help political campaigns. Whistleblowing, of course, has been around for some time. But is there something different about whistleblowing in today's age of big data?

A 2019 article in Politics & Society answers yes. The article, which is by Thomas Olesen, a professor of political science at Aarhus University, argues that big data and digitalization are changing the nature of whistleblowing from a solitary action to one involving a collaboration between whistleblowers themselves, investigative journalists, and political activists. Collaboration has become vital because, as Olesen writes, "the sheer volume of the [data] and its raw and undigested content make its full use beyond the capacity of any single journalist or even media organization." Two generations ago, a single, printed document was usually leaked; in contrast, today's leaks involve data access, distribution, and storage.

Olesen says that today's whistleblowing is usually preceded by a major shift in the loyalties of the whistleblower. Rather than feeling mostly loyal to her employer, the whistleblower develops a stronger loyalty to the "universal community of society and democracy." In short, the whistleblower decides that the greater good is more important than her own security and comfort.

Olesen predicts that with continuing advances in digital technology, whistleblowers are likely to play "an increasingly pronounced political role." Governments and corporations are now far more vulnerable to embarrassing or damaging data leaks, and it stands to reason that they will seek to protect themselves in ways that might put democracy at risk.

Olesen's article, which is titled "The Politics of Whistleblowing in Digitalized Societies," appears in the June 2019 issue of Politics & Society. 

Parking in Mexico City

Suppose you live in an overpopulated city with a corrupt government and corrupt institutions generally. Suppose too that the government and other institutions are slow to respond to your needs, and when they do, they usually bungle things in significant ways. In short, you can't trust them. In such a city, would you hand the keys of your expensive car over to some random man or woman for parking and safekeeping while you attend to your personal and professional business?

That's exactly what people do in Mexico City. And against all odds, it's a system that works.

Those random men or women to whom you give the keys to your car are known as viene-vienes, which loosely translates as "come, come." They function much like valet parkers—except they are complete freelancers, and usually complete strangers, not formally employed by any company or service. They can be found all over Mexico City, and they guide motorists in this overcrowded city into tight parking spots or park the cars themselves. 

It's a paradox, really. Most studies show that corrupt and inefficient institutions destroy trust. Yet here in Mexico City, trust is present in the interactions between the viene-vienes and the people whose cars they park. The police are involved too: the work of viene-vienes is not completely legal, so in some cases the police extort small bribes in exchange for looking the other way. Together, the viene-vienes, car owners, and the police form a three-way system that allows trust to flourish—and cars to get parked.

This account of the viene-vienes is based on an article titled "Leaving Your Car with Strangers: Informal Car Parkers and Improbable Trust in Mexico City," by Yuna Blajer de la Garza, a PhD candidate in political science at the University of Chicago. As Ms. Blajer de la Garza explains, underlying the interactions among motorists and the viene-vienes is a complicated performance of class identities. The work of the viene-vienes is possible "only when a set of conditions are met, class differences are deep and unambiguous, the viene-viene enacts familiar scripts, and the driver can read the amalgam of all those elements." 

The article appears in the September 2019 issue of Politics & Society.

Government Wages and Racial Pay Parity

The US federal government relies on wage scales to establish wage rates for many of its employees. One of those scales is the Federal Wage System, or FWS. The FWS was passed in 1972 and is used to set the wages of many blue-collar workers.

How did the FWS come to be in the first place? Therein lies a tale of workers—and specifically African American workers—who mobilized to make sure the FWS was adopted.

It all started with a union of federal workers called the American Federation of Government Employees. Formed in the early 1930s, the AFGE began as a largely white union that initially involved itself with women's issues; it even pushed through a maternity leave bill in 1949. But its concern for women workers did not translate into a concern for black workers—not yet. 

That began to change in the 1960s. With the passage of the Civil Rights Act of 1964, more and more blacks began to be hired for federal jobs. It was then that the question of organizing them arose. The AFGE took up the charge. The effort to organize black workers was led by a man named Ralph Biser, a former auto repairman and Metal Trades unionist, and a man named John Griner, who was elected head of the union in exchange for promising to work on behalf of black-worker issues.

By 1967, the AFGE was ready for action, pushing for a bill in Congress that would improve the pay of black workers in laundry services, housekeeping, and dining. Crucial was the testimony before Congress of a man named Royal Sims, the union's most prominent black member. Sims worked with Griner to draw up a bill to present to Congress. Republicans opposed the bill, and President Nixon even vetoed one version of it. But by then, other unions had rallied to support the AFGE, and momentum was building. “We are being faced with a grave situation,” Griner told Congress. “Militancy among this group of employees is on the increase. All they are asking for is justice and equity. I say to you, they are not getting justice and equity.” Finally, in 1972, Nixon struck a political deal with Griner and signed the Federal Wage System into law. 

This account of the Federal Wage System draws on a new article in Politics & Society titled "Racial Pay Parity in the Public Sector: The Overlooked Role of Employee Mobilization," by Isabel M. Perera, an assistant professor of government at Cornell University, and Desmond King, the Andrew W. Mellon Professor of American Government at the University of Oxford. Unlike previous researchers, Perera and King stress the role of worker mobilization in the passing of the wage system. Thanks to the FWS and other scales like it, black workers have found a level of pay parity with whites that is missing in the private sector.