Put another way, credit reporting has become an important foundation for modern economic life, but the private market has notable problems, including weak accountability and lack of transparency. Regulation offers one solution: the law might, for instance, require greater accountability by requiring the credit bureaus to fix erroneous information. All three companies now offer processes for disputing information in your credit report, but unless you are a VIP, you will not speak with a human being or find that the error is resolved quickly. Instead, you will find yourself “herded into a largely automated system” with minimal review. Horror stories abound. Bobby Allyn, an NPR reporter, hit a roadblock when trying to lease an apartment in Philadelphia. The landlord pulled a credit report that included “a clutch of criminal offenses, including two felony firearms convictions.” The problem was someone with the same name. Allyn spent six weeks working to correct the error—even after he identified himself as a journalist, an asset not available to most of us.19
But even tighter dispute resolution wouldn’t solve the underlying problem, which is that the credit bureaus are so sloppy in their information-collecting that one in four Americans has an error on at least one of her three credit reports.20 Unless you know about that error, you won’t know to enter even the best dispute-resolution system.
Some have proposed nationalizing the three credit bureaus in order to turn over the task of credit reporting to a public agency.21 But instead of full nationalization, a public option may be worth considering, perhaps in conjunction with regulation. A public option could offer much-needed competition in the market for consumer information and credit reporting. Today, consumers have no choice in the matter: they are involuntarily opted in to all three credit bureaus, with no legal right to opt out. A public option might be combined with an opt-out right that could help discipline both the public and the private credit reporters to collect accurate information and offer quick and reliable dispute resolution.
We haven’t worked out the details, and many questions remain to be answered. People might be uncomfortable with the government owning so much data about them. But the government already has much of that data and then some, thanks to the tax filing process. And the big credit bureaus have shown themselves to be untrustworthy custodians of the data. We think that a public option should be part of the conversation as Americans come to terms with the failure of the present model and look to alternatives.
A National Jobs Guarantee
Throughout America, millions of people are unemployed or underemployed. They want to work full-time but can’t find a private sector job. In some cases, people just give up. In other cases, they take a temporary, part-time, or seasonal job. Both joblessness and underemployment are serious problems for society. They are economic problems: people without jobs don’t have enough money to buy things and expand demand. They are social problems: people without jobs can end up homeless, lonely, susceptible to drugs and crime, or just disaffected from society. And they are fiscal problems: the jobless and unemployed are more likely to use social services like food stamps and unemployment insurance, costing taxpayers money.
A public option for jobs could help solve these problems, putting millions of Americans to work for productive ends while improving the economy. The idea itself, while it might seem radical, isn’t new. During the Great Depression, President Roosevelt’s New Deal created a variety of jobs programs that employed millions of Americans in productive work throughout the country. The most famous were the Works Progress Administration (WPA), which built schools, buildings, roads, and other infrastructure, and the Civilian Conservation Corps (CCC), which put people to work on environmental and conservation projects all across the country. For a generation after the successes of Roosevelt’s experiment, many Americans sought to address the challenges of unemployment through a national jobs guarantee. A robust full employment bill almost passed into law in the 1940s. Martin Luther King Jr., A. Philip Randolph, and Bayard Rustin pushed for a jobs guarantee in the 1960s because they thought it essential to freedom for all Americans. In the 1970s, Congress passed the Humphrey-Hawkins Full Employment Act, which didn’t establish a jobs guarantee but did direct the Federal Reserve to consider employment when pursuing monetary policy.
In recent years, however, some policy entrepreneurs have resurrected the idea of a jobs guarantee.22 The way it would work is simple: the federal government would guarantee that any adult who wants to work could do so, and it would get that person a job. The program would be voluntary (it is a public option, after all), funded either entirely or mostly by the federal government, and administered locally with input and participation from local communities. Workers would get paid a living wage, have health, retirement, and other fringe benefits (perhaps through other public options), and, like all other workers, get vacation time. The work itself would vary considerably but would focus on beneficial projects to communities and the public more broadly. Examples might include repairing and building infrastructure; environmental cleanup and conservation; urban blight removal and revitalization; care and support for the elderly, young, sick, or at-risk; and other projects that local communities deem important.
Advocates for a jobs guarantee have identified a number of benefits. First, it would give millions of Americans a job, both taking them out of despondency and putting money in their pockets. Second, it would help the economy. With millions of people having more money and engaging in productive work, the economy would grow—both because of wages being spent in the marketplace (therefore expanding the market) and because of the investment in growth-creating infrastructure and other services. Because unemployment is countercyclical (more people don’t have jobs in a recession), the jobs guarantee would help smooth out the ups and downs from economic cycles. People who lose their private sector job could move into the public option until they can get a new private sector job. A jobs guarantee would also set a wage and benefits floor, improving wages and working conditions throughout the private sector economy. Finally, it would mean reduced spending on a variety of social services that target those who are poor or unemployed. While a jobs guarantee would undoubtedly be expensive, this public option could provide many benefits to the economy.
Public Defense
A storied but sometimes troubled public option grew out of the constitutional right to counsel. Clarence Earl Gideon was arrested, tried, and convicted of felony breaking and entering, all without the assistance of a lawyer despite his request to the Florida judge. His case made it all the way to the Supreme Court, which held in Gideon v. Wainwright in 1963 that every criminal defendant must be provided with counsel, free of charge.23
The constitutional right to counsel ensures universal access to an important service, but it doesn’t always operate as a public option, because not all public defender services are government-run. Instead, in many places, the work of public defense is hired out to private lawyers.
In our terms, then, public defense spans two models for government provision. One is a true public option: a government agency provides free criminal defense and exists alongside private defense options. In New Jersey, for instance, public defenders work for an agency run and financed by the state.24 A second model is a privatized system: in this system, the government pays private lawyers to take cases. In New York, for instance, many counties pay private lawyers to act as public defenders; these lawyers may be in private practice or may be employed by nonprofit legal aid organizations.25 Public defense is notably fragmented in its organization, not only among states but across counties within states.26
In popular culture and many television shows, the public defender has a bad reputation: overworked at best, lazy and negligent at worst. Indeed, the heavy caseloads shouldered by public defenders and the underfunding of public defense pose a serious threat to justice, as do poor training and spotty oversight of private lawyers engaged in public defense.27
Still, there is evidence that the public option outperforms privatization. A 20
17 study focused on San Francisco, where most cases are handled by the state or federal public defender’s office, but some cases are handled by private lawyers paid by the government (typically in cases of conflict of interest). Controlling for differences among defendants, the study found that private lawyers paid on a case-by-case basis performed worse than public defenders employed by the government. Even controlling for the better credentials of salaried public defenders (compared to private attorneys paid by the case), public defenders still had greater success.28 Measuring such differences can be tricky, it’s true.29 But other studies have reached a similar conclusion.30
Reforming public defense is a critical item on the nation’s agenda, because the promised right to counsel requires diligent, skilled lawyers who have reasonable caseloads and access to the resources they need to investigate cases and defend their clients. Expanding the public option is—and should be—very much on the table.
Notes
1. The Limits of Private Action
1. Nelson Lichtenstein, The Most Dangerous Man in Detroit 280 (1995).
2. AARP Public Policy Institute, “The Social Compact in the Twenty-First Century” 1 (2009), http://assets.aarp.org/rgcenter/ppi/econ-sec/d19224-sc.pdf.
3. AARP, “Social Compact,” at 22. On the relationship between wartime policies and health care, see Ezekiel J. Emanuel, Reinventing American Health Care 30–32 (2014). Most accounts focus on wartime policies, though some scholars argue that the shift happened before those policies took effect. See Timothy Stoltzfus Jost, Health Care at Risk: A Critique of the Consumer-Driven Movement 59–61 (2007).
4. This is not to say that this model was the lived reality for Americans. For a discussion of both breadwinner liberalism and its limits, see Robert O. Self, All in the Family: The Realignment of American Democracy Since the 1960s (2012).
5. Economic Policy Institute, “The Top Charts of 2014,” at chart 2 (Dec. 18, 2014), www.epi.org/publication/the-top-10-charts-of-2014; U.S. Census Bureau, Historical Income Tables, table P-2: “Race and Hispanic Origin by Median Income and Sex,” available at www.census.gov/hhes/www/income/data/historical/people; St. Louis Federal Reserve Bank, “Real Gross Domestic Product,” FRED Economic Data, available at https://research.stlouisfed.org/fred2/series/GDPC1.
6. Jacob Hacker, The Great Risk Shift: The New Economic Insecurity and the Decline of the American Dream (2006).
7. AARP, “Social Compact,” at 12.
8. Gallup, “How Millennials Work and Live,” www.gallup.com/reports/189830/millennials-work-live.aspx.
9. See U.S. Department of Labor, Bureau of Labor Statistics, “Number of Jobs, Labor Market Experience, and Earnings Growth at 50: Results From a Longitudinal Survey” (2017), at https://www.bls.gov/news.release/pdf/nlsoy.pdf. For skepticism of multiple career transitions, see Carl Bialik, “Seven Careers in a Lifetime? Think Twice, Researchers Say,” Wall Street Journal (Sept. 4, 2010); Ben Casselman, “Enough Already about the Job-Hopping Millennials,” FiveThirtyEight (May 5, 2018).
10. David Weil, The Fissured Workplace: Why Work Became So Bad for So Many and What Can Be Done to Improve It (2014).
11. Shayna Strom & Mark Schmitt, “Protecting Workers in a Patchwork Economy,” Century Foundation (Apr. 7, 2016), https://tcf.org/content/report/protecting-workers-patchwork-economy.
12. U.S. Bureau of the Census, “Income and Poverty in the United States: 2017,” Figure 2; The Hamilton Project, “Median Annual Earnings since 1964,” www.hamiltonproject.org/charts/median_annual_earnings_since_1964; David Wessel, “The Typical Male U.S. Worker Earned Less in 2014 than in 1973,” Brookings Institution (Sept. 18, 2015), www.brookings.edu/opinions/the-typical-male-u-s-worker-earned-less-in-2014-than-in-1973.
13. On household income stagnation, see Federal Reserve Economic Data (hereinafter FRED), “Real Median Household Income in the United States,” https://fred.stlouisfed.org/series/MEHOINUSA672N; Ben Casselman, “The American Middle Class Hasn’t Gotten a Raise in 15 Years,” FiveThirtyEight (Sept. 22, 2014), http://fivethirtyeight.com/features/the-american-middle-class-hasnt-gotten-a-raise-in-15-years. On the broader phenomenon, see Elizabeth Warren & Amelia Warren Tyagi, The Two-Income Trap: Why Middle Class Parents Are Going Broke (2003).
14. FRED, “Civilian Labor Force Participation Rate: Women,” https://fred.stlouisfed.org/series/LNS11300002.
15. David Singh Grewal & Jedediah Purdy, “Introduction: Law and Neoliberalism,” 77 Law and Contemporary Problems 1–3, 6 (2014).
16. Angus Burgin, The Great Persuasion: Reinventing Free Markets since the Depression (2012).
17. See David Harvey, A Brief History of Neoliberalism (2005).
18. On privatization, see John Donahue, The Privatization Decision (1989); E. S. Savas, Privatization: The Key to Better Government (1987). On neoliberalism in general, see Manfred B. Steger & Ravi K. Roy, Neoliberalism: A Very Short Introduction (2010); Harvey, A Brief History.
19. On the failures of privatization, see Jody Freeman & Martha Minow, Government by Contract (2009); Jon D. Michaels, Constitutional Coup: Privatization’s Threat to the American Republic (2017).
20. United States Senate Committee on Health, Education, Labor, and Pensions, For Profit Higher Education: The Failure to Safeguard the Federal Investment and Ensure Student Success 3 (July 30, 2012), www.help.senate.gov/imo/media/for_profit_report/PartI.pdf.
21. Senate Committee, For Profit Higher Education, at 1–3.
22. Federal Deposit Insurance Corporation, “2015 FDIC National Survey of Unbanked and Underbanked Households” 1 (Oct. 20, 2016), at www.fdic.gov/householdsurvey/2015/2015report.pdf.
23. Naomi R. Lamoreaux, The Great Merger Movement in American Business, 1895–1904 2, 5 (1985); Alan Trachtenberg, The Incorporation of America: Culture and Society in the Gilded Age 4 (1982).
24. Ganesh Sitaraman, The Crisis of the Middle-Class Constitution: Why Economic Inequality Threatens Our Republic 141–160 (2017).
25. “Pushing the Limits,” Economist (Dec. 12, 2015).
26. “Too Much of a Good Thing,” Economist (Mar. 26, 2016).
2. Why Public Options?
1. 26 U.S.C. section 1402(g) provides a limited exception for members of religions (e.g., the Old Order Amish) whose beliefs prohibit them from participating in a public retirement scheme. Under the statute, religious objectors must apply for exemption and must waive all Social Security benefits.
2. Raj Chetty et al., “Where Is the Land of Opportunity? The Geography of Intergenerational Mobility in the United States,” 129 Quarterly Journal of Economics 1553 (2014).
3. FCC, “2016 Broadband Progress Report” (Jan. 29, 2016), www.fcc.gov/reports-research/reports/broadband-progress-reports/2016-broadband-progress-report.
4. Alicia H. Munnell et al., “NRRI Update Shows Half Still Falling Short,” Boston College Center for Retirement Research (Dec. 2014), http://crr.bc.edu/briefs/nrri-update-shows-half-still-falling-short.
5. Yuval Levin, The Fractured Republic: Renewing America’s Social Contract in the Age of Individualism (2016).
6. Burwell v. Hobby Lobby Stores, 537 U.S. (2014); Zubik v. Burwell, 578 U.S. (2016).
7. GAO, “Health Care Coverage: Job Lock and the Potential Impact of the Patient Protection and Affordable Care Act,” 5 (Dec. 15, 2011), www.gao.gov/assets/590/586973.pdf.
8. GAO, “Health Care Coverage,” at 6.
9. Ammar Farooq & Adriana Kugler, “Beyond Job Lock: Impacts of Public Health Insurance on Occupational and Industrial Mobility,” NBER Working Paper (March 2016), www.nber.org/papers/w22118.
10. GAO, “Health Care Coverage”; Austin Frakt, “Job Lock,” The Incidental Economist (Mar. 19, 2014), http://theincidentaleconomist.com/wordpress/job-lock-introduction, http://theincidentaleconomist.com/wordpress/job-lock-conclusion; Dean Baker, “Job Lock and Employer-Provided Health Insurance: Evidence from the Literature,” AARP Public Policy Institute (March 2015), www.aarp.org/ppi/info-2015/job-lock-and-employer-provided-healthcare.html.
11. Robe
rt W. Fairlie, Kanika Kapur, & Susan M. Gates, “Is Employer-Based Health Insurance a Barrier to Entrepreneurship?,” RAND Working Paper (2010), www.rand.org/pubs/working_papers/WR637-1.html.
12. Department of Labor, Bureau of Labor Statistics, “Employee Benefits in the United States” (March 2016), www.bls.gov/news.release/pdf/ebs2.pdf.
13. Tom Perez & Jeffrey Zients, “Helping Workers Save for Retirement in an Ever-Changing Economy,” Obama White House Archives (Jan. 26, 2016), https://obamawhitehouse.archives.gov/blog/2016/01/26/helping-workers-save-retirement-ever-changing-economy.
14. Beth Kowitt, “Starbucks CEO: ‘We Spend More on Health Care than Coffee,’ ” Fortune (June 7, 2010).
15. GAO, “Health Care Coverage.”
16. “Too Much of a Good Thing,” Economist (Mar. 26, 2016).
17. FCC, “Internet Access Services: Status as of June 30, 2016,” 6 (Apr. 2017), http://transition.fcc.gov/Daily_Releases/Daily_Business/2017/db0503/DOC-344499A1.pdf. This uses developed census blocks; the actual number might be lower because not all service providers might offer service to every household within a census block.
18. Andrei Schleifer, “A Yardstick Theory of Competition,” 16 RAND Journal of Economics 319 (1985); Robert Nordhaus, “Yardstick Competition in a Deregulated Electric Utility Industry,” 12 Natural Resources and the Environment 256 (1998).
19. Franklin D. Roosevelt, campaign address in Portland, Oregon (Sept. 21, 1932).
20. William Darity Jr. et al., “What We Get Wrong About Closing the Racial Wealth Gap,” Samuel DuBois Cook Center for Social Equity, Apr. 2018, https://socialequity.duke.edu/sites/socialequity.duke.edu/files/site-images/FINAL%20COMPLETE%20REPORT_.pdf.
21. For a review of some of the recent studies, see Richard Florida, “America’s Worsening Geographic Inequality,” The Atlantic, Oct. 16, 2018.
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