Economy

Now It’s Time to Talk About Chicago’s Tale of Two Cities

AP Images/Charles Rex Arbogast

Rahm Emanuel has a favorite four-letter word for members of the labor movement. When Emanuel was White House chief of staff, he was told that tens of thousands of autoworkers could lose their jobs if General Motors and Chrysler didn’t receive a federal bailout. His response: “Fuck the UAW.” As mayor of Chicago, Emanuel became so enraged during negotiations with Karen Lewis, president of the Chicago Teachers’ Union, that he shouted “Fuck you, Lewis.” (The teachers went on strike for seven days, claiming Emanuel had “disrespected” them, as well as tried to force them to work longer hours after reneging on a promised pay raise.)

The Republican Problem With Independent Voters

Still a problem.

As I've discussed before, there are moral judgments liberals and conservatives make about things like economics that not only underlie the positions they take on policy, but also make most of the empirical conversation we have about those issues kind of superfluous. We spend a lot of time marshalling facts to support positions that have a moral basis, when those facts have virtually no chance of persuading large segments of the population. For example, you can tell many conservatives that income mobility in the United States is lower than that in many countries, and it won't dent their belief that in this land of opportunity, everyone gets what they deserve and your wealth is a clear indicator of your virtue.

The good folks at the Pew Research Center have a new poll that includes some interesting questions probing how people think about poverty and economic fairness, and it shows how on this increasingly salient question, Republicans have a real political problem. Let's take a look at their key table:

The State of Our Union? Economically Unjust

AP Images

To honor Martin Luther King, Jr., the White House declared a “day of service” in Dr. King’s memory, and President Obama spent a few minutes on Monday helping to serve meals in a soup kitchen near the White House. Talk about a tin ear, or a timid one.

The Penultimate Watergate Baby

georgemiller.house.gov

The 1974 midterm elections, held in the wake of Watergate, were a Democratic landslide. The party increased its strength in the House of Representatives by more than 50 new members, many from suburban districts that had previously elected Republicans.

Class War: The View From the Board Room

The Vice-President for Governmental Affairs has just finished his report to the corporate board of directors.

“Thanks, Ted,” says the Chairman. “You and your Washington staff have done a great job. Getting that little amendment inserted in the budget bill will save us at least $25 million next year. …. Questions or comments? Paul?”

Paul, the hedge fund CEO: “I’m worried about the big picture down there in Washington, Ted. It’s a mess. Deficit out of control. The anti-business attitude. Not to mention incompetence. Can’t even run a website for their own health care program. Pathetic.”

Economic Outlook Remains Depressing

Every month at this time when the jobs report comes out, we get reminders not to put too much stock in any one month's numbers. This is wise counsel, first because there's some inherent volatility in month-to-month movements—for instance, December numbers may have been affected by bad weather—and second because these figures often get revised later as more data come in. So the pretty bleak numbers from December don't, in and of themselves, tell us much about how the recovery is going.

But those numbers are indeed pretty bleak. Only 74,000 new jobs were created in December, compared to a monthly average of 182,000 for the year. The unemployment rate fell to 6.7 percent, but that's because so many people dropped out of the labor force. The labor force participation rate is now 62.8 percent, its lowest rate since 1978. Some of that is a long-term decline due to an aging population, but most of it comes from people deciding there's no point in looking for work.

So let's look at the big picture.

Europe Limps on in the Year Ahead

The last meeting of the European Council in December 2013 was absent of much concern for economics. Instead the Council, a body made up of heads of EU states, who come together twice a year to discuss big picture policy issues, decided to focus on security and foreign policy instead. It was a sign that the region was no longer in an acute economic crisis and that other issues like the protests in Ukraine and the NSA’s spying program were of graver concern. In 2014 don’t expect the troubled waters of the eurocrisis to recede completely, but do look forward to a year full of small scares and pseudo-crises that might seem big but will amount to little.

The Flying News

AP Images/Daniel Reinhardt

It was a damned-if-you-do/damned-if-you-don’t contract that Boeing offered its workers last week, and its workers responded accordingly. Confronted with a contract that transformed their pensions into 401k’s, and with the company’s threat to relocate production of its new 777x to some other, lower-wage state unless its workers took the deal, the members of the International Association of Machinists Puget Sound/Boeing district approved the company’s offer by a suitably ambivalent 51-percent-to-49-percent margin.

The Government Guide to Screwing Poor Homeowners

AP Images/Carlos Osorio

The December 28th expiration of extended unemployment benefits, which cut off payments to 1.3 million recipients—and will cut off 3.6 million more over the next year), has been a painful body blow to highly vulnerable members of our society. Rolling back unemployment insurance to a maximum of 26 weeks, when the average duration of unemployment is still 36 weeks, puts millions of families’ lives in jeopardy.

Another recently expired provision could cause comparable damage to the same population, but it has yet to trigger similarly urgent attention from lawmakers. The end of the Mortgage Forgiveness Debt Relief Act, which lapsed December 31, means that any type of debt forgiveness on a mortgage will result in a giant tax bill—one that a stressed homeowner cannot usually afford. Even homeowners entitled to compensation for past abuse by the mortgage-lending industry would be subject to unfavorable tax treatment. This will lead to more economically debilitating foreclosures and weaken the housing market. Despite bipartisan support for an extension, it's anybody's guess whether Congress will get around to helping out struggling homeowners.

The Moral Calculus Underlying the Debate Over Unemployment Insurance

The FDR memorial's depiction of Depression-era moochers. (Wikimedia Commons/Stefan Fussan)

The Senate is working its way toward (possibly) overcoming a Republican filibuster of an extension of long-term unemployment insurance, after which the measure will die when John Boehner refuses to bring it up for a vote in the House. Or perhaps not; Boehner's current position is that he's "open" to allowing a vote if the cost of the benefits is offset, presumably by taking money from some other program that helps the less fortunate. Boehner might also allow a vote in exchange for a fun-filled afternoon in which a bunch of orphans and widows are brought to the Capitol building so Republicans can lecture them about their lack of initiative, then force them to watch while members of the Banking Committee and a carefully selected group of lobbyists eat mouth-watering steaks flown in from an exclusive ranch in Kobe, Japan.

I kid. But there is a particular kind of moral clash at play in these negotiations, one that we don't think about very often. It has to do with the question of what makes liberals and conservatives distressed and angry.

Dan Cantor's Machine

Timothy Devine

Election night, New York City, November 5, 2013. Mayoral candidate Bill de Blasio, the candidate for both the Democratic and Working Families parties, is racking up a huge victory after running on a platform that calls for raising taxes on the rich and raising wages for workers. Shunning the usual Manhattan-hotel bash, de Blasio has decided to celebrate in a Brooklyn armory, where his supporters have gathered to mark the end of the Michael Bloomberg era and, they hope, the birth of a national movement for a more egalitarian economy.

The Fed Transformed

AP Images/Charles Dharapak

It is a small miracle that on February 1, Janet Yellen will become chair of the Federal Reserve. She is not just the first woman to head America’s central bank but the first labor economist. While the Fed is ordinarily obsessed with inflation, Yellen has given equal or greater emphasis to unemployment. Yellen represents a break with the Wall Street–friendly senior Obama economic officials who promoted their former colleague Larry Summers for chair. Had Summers gotten the post, the Fed and Treasury would both have been in the hands of the same old boys’ club that coddled the big banks before and after the financial collapse of 2008. That the job went instead to Yellen means the Fed will be an independent power center, and somewhat to the left of the administration. With a four-year term as chair, Yellen will serve at least two years into the next presidency as well.

The Year in Preview: Labor's Outlook

AP Images/PAUL BEATY

Labor—both unions and the broad working class of wage workers—haven’t had a good year in a very long time. Union membership continues its long, slow decline, as does median family income. But if nothing else, 2014 should be a clarifying year in the life of several legal and organizing struggles which will either advance or retard the progress of labor.

Google to Begin Building Robot Army

Boston Dynamics' Atlas marches over the rubble of our shattered world.

When Amazon bought a robotics company called Kiva Systems last year, it made perfect sense. Kiva makes robots that move things around warehouses; Amazon has a lot of warehouses full of a lot of stuff that needs moving around. Google, on the other hand, would seem to have no obvious need for robots, which is why it might appear odd that they just announced the purchase of Boston Dynamics, a company developing robots that mostly resemble animals and are designed to do things like carry equipment for soldiers, run really fast, and jump really high. In fact, it's only the latest of a bunch of robotics companies Google has bought.

So what are they up to? In some ways, Google increasingly resembles a corporation out of a near-future sci-fi novel, one that begins by making some nice but (seemingly) not exactly world-transforming product, then that product turns out to be bigger than anybody imagined, then it gradually expands into one area after another until it controls practically the entire world. Eventually, the corporation becomes a nuclear power and wages war on its few remaining competitors, then becomes a practical one-world government. If that's their goal, a steady supply of robots would obviously be extremely useful.

The Year in Preview: Paul Ryan's Misguided Poverty Plan

Next year will mark the fiftieth anniversary of the War on Poverty, launched by President Lyndon Johnson. But don’t expect a golden anniversary party for the tired, poor, huddled masses.

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