Harold Meyerson

No More Playing With Money

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If you’re looking for the personification of the Washington economic establishment, you could do a lot worse than Fred Bergsten. National Security Council economics deputy under Henry Kissinger (at age 27), then head of the international desk and the monetary portfolio in Jimmy Carter’s Treasury Department, and from 1981 through last year the founding director of the Peterson Institute for International Economics, Bergsten has been a forceful advocate for what used to be called the Washington Consensus: an unflagging belief in the virtues of free trade and fiscal discipline. This Thursday, he delivers what looks to be at least a semi-valedictory at the Peterson Institute, the annual Stavros Niarchos lecture. Rather than celebrate the virtues of free trade—a topic he says (in an advanced text of his speech) that he considered and then rejected—he devotes his talk instead to an analysis of the devastating effect that currency manipulation has had on the American and other economies, and...

The Upside Down Economy

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AP Photo/Richard Drew O ne aspect that defines our current economy is that things are happening that shouldn’t be happening. I don’t mean that things are happening that are illegal or immoral. (Well, some of them are immoral, but that’s not what I mean.) Rather, things are happening that defy economic logic—a slippery term that really means, the economic patterns of roughly the past half-century. The first such logic-defying thing is that corporate profits are soaring even as corporate revenues limp along. The quarterly reports of S&P 500 corporations for the first three months of 2013 are almost entirely in now, and they show profits rising by more than 5 percent even while revenues have risen by less than 1 percent. Seventy percent of these companies—the largest publicly traded U.S. firms—exceeded the analysts’ profit projections. On the other hand, 60 percent came in under the projections for their sales. Were this disjuncture just a one-time epiphenomenon, we could pass it off...

Fast Food, Slow to Change

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The strikes of fed-up fast-food workers move westward with the sun. On Wednesday evening, fast-food employees in St. Louis, like their peers in New York and Chicago earlier this spring, staged a one-day strike to dramatize the low wages they, and millions of American workers in the restaurant and food sectors, take home. The job action is one of a series of short strikes that the Service Employees International Union, in conjunction with a range of local community groups, is helping to organize. Similar actions in other cities are slated in coming weeks. The goal of these actions is to catalyze a broader movement of workers in the sector—not with the intent of winning contracts from corporations like McDonald (that’s far beyond the labor movement’s capacity, alas), but in hopes that such a movement could spur city councils and state legislatures to enact higher minimum wages or living wage provisions for workers in specified sectors. At Tuesday’s night annual Hillman Prize...

Schneiderman Strikes Back

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New York Attorney General Eric Schneiderman, who headed a group of state attorneys general that won homeowners and former homeowners a $26 billion settlement from five mega-banks over their foreclosure abuses, announced yesterday that he’d sue two of the banks—Wells Fargo and Bank of America—for allegedly violating the terms of the settlement. The February 2012 settlement with those two banks, as well as JP Morgan Chase, Citibank, and Ally Financial (formerly GMAC), had required the banks to adhere to a set of standards that would end the kind of abuses that had led to wholesale foreclosures of homes when they could have worked out alternative arrangements with the homeowners. Some of those standards—such as requiring the banks to notify struggling homeowners within five days that they had received the documents required to modify mortgages—sound so obvious they shouldn’t have needed to be codified, yet it was precisely such practices that the banks had repeatedly shunned. Homeowner...

How Low Can Part-Timers' Hours Go?

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flick/ Carol Green S ay you’re an employer with an employee who works 30 hours a week. If you have 50 employees or more come next year, you’ll be required either to provide her with health-care coverage, which the Affordable Care Act will by then mandate for all employees who work at least 30 hours a week, or you’ll have to pay a $2,000 penalty for failing to cover her. Or, you could just cut her weekly hours to 29. That way, you won’t have to pay a dime, in either insurance costs or penalties. This thought, not surprisingly, has crossed the minds of quite a number of employers. Right now, the average number of hours an employee in a retail establishment works each week is 31.4 . And a whole lot of Americans work in retail—just slightly over 15 million, according to the latest employment report , out Friday, from the Bureau of Labor Statistics (BLS). Not all of them work hours that hover just over 30, of course, but the UC Berkeley Labor Center has calculated that 10.6 percent of...

How Unions Are Getting Their Groove Back

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Yesterday—April 24th — was a red-letter day in the annals of worker mobilization in post-collective-bargaining America. In Chicago, hundreds of fast-food and retail employees who work in the Loop and along the Magnificent Mile called a one-day strike and demonstrated for a raise to $15-an-hour and the right to form a union. At more than 150 Wal-Mart stores across the nation, workers and community activists called on the chain to regularize employees’ work schedules. And under pressure from an AFL-CIO-backed campaign of working-class voters who primarily aren’t union members, the county supervisors of New Mexico’s Bernalillo County voted to raise the local minimum wage. The Chicago demonstration, which began in the dawn’s early light of 5:30 a.m., included workers at McDonald’s, Dunkin’ Donuts, and Subway, as well as Macy’s, Sears, and Victoria’s Secret, all of whom make the state minimum wage ($8.25) or just slightly more. Roughly one-third of the jobs in Chicago are low-wage, and...

The Curse of the Small Stuff

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We can stop a plot. Get a group of would-be terrorists meeting with each other and our agents can infiltrate it. Get them meeting in Yemen and we can send in the drones. Let North Korea threaten the South and we can threaten them, completely plausibly, with obliteration. Scale is our friend—we know how to detect enemies who go to scale, and we detect so well in these post-9-11 years that it doesn’t take much to go to scale. It’s the small stuff that we can’t stop. The loners, the solo operators, the guys who march to their own deranged drummers. Be they bombers for some cause or shooters without one, whether we call them terrorists or just mass killers, they’re the ones most likely to slip our grasp. You can’t penetrate the social networks of the asocial. The unibombers of this world live inside their heads, coming out only in the acts of rage through which we meet them—too late. As I write, we don’t know if the Boston Marathon bombings were the act of one contorted soul or several,...

Mr. Brooks’s Planet

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Since New York Times columnist David Brooks is the very model of the sentient conservative, his acknowledgements of social reality are often more than just personal—they signal that a particular state of affairs has become incontestable to all but the epistemically shuttered. Writing today on President Obama’s new budget, Brooks applauds the president for proposing to reduce Social Security and Medicare payments, and wishes he’d boost spending on discretionary spending programs that might stem the collapse of working- (and much of middle-) class America. Conservatives generally—over to you, Charles Murray—now acknowledge that the American working class, very much including the white working class, is imploding, citing the decline in marriage rates and out-of-wedlock births. They note as well that incomes and labor force participation are tanking, too. But they usually resist the idea that there’s a causal link between the lack of economic opportunity and the decline in the number of “...

California Fights Back

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Last fall, California voters were confronted with two major and hotly-contested ballot measures—Governor Jerry Brown’s proposal (Proposition 30) to raise taxes on the rich to end the state’s chronic budget shortfalls, and a conservative initiative (Proposition 32) which would have curtailed unions’ ability to spend their treasuries on political campaigns. Proposition 30 passed and Proposition 32 was soundly defeated, but they had to overcome a joint, well-funded campaign by rightwing interests to prevail. As we reported in the January-February issue of the Prospect, the anti-30, pro-32 campaign received an $11 million contribution a few weeks before the election whose source could not be traced. The money came into the campaign from an Arizona-based 501c4—a “social welfare” organization that spends its funds on political campaigns but is not required to list the source of its funding. Under public pressure and in response to a court order, the Arizona group did reveal shortly before...

Few Waves in California

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Flickr/msun523 Cuts on overtime for customs inspectors at the Port of Long Beach in Long Beach, California, may hinder its ability to process cargo. I f the sequester had come to California 25 years ago, its effect would have been catastrophic. Today, its effects are decidedly less draconian. Nonetheless, California has a considerably less robust economy than that of the late '80s, and the sequester will cool off the state’s already tepid recovery. In considering the effects of the sequester, the difference between the California economy of 1942-1992 and its economy today is critical. For the half-century beginning with the attack on Pearl Harbor, California was the centerpiece of the American defense industry. Southern California in particular was a home base for much of the aviation industry even before World War II, but wartime and Cold War spending built up aviation and then aerospace to the point that they employed more Californians than any other industry. When the Cold War...

The Once and Future Gov

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AP Photo/Eric Risberg A merica’s most futuristic governor seems borne back ceaselessly into the past these days. As he shows me around his office on a crisp winter morning, California Governor Jerry Brown points out not just the desk that his father, Edmund “Pat” Brown, used during his own term as governor from 1959 to 1967 but also photos of his grandparents and his great-grandfather, who came to California in the gold rush years. “He knew John Sutter,” Brown says. The only two governors in the past half-century who were native Californians, he points out, were he and his father. At 74, Brown has lost little of the intensity that impressed and occasionally discomfited voters during his first tenure as governor nearly 40 years ago. His outfit—an open-collar shirt under a white pullover sweater, blue jeans—may be West Coast casual, his shaved head may call to mind the Zen monks with whom he’s studied, but Brown’s emotional repertoire does not include laid-back, except when he’s talking...

The Maximum Impact of the Minimum Wage

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Cristina Romer, Berkeley economics professor and the former head of President Obama’s Council of Economic Advisers, passed judgment on the merits of raising the minimum wage in Saturday’s New York Times , and in the process made clear why she wasn’t a member of the president’s de facto council of political advisers. She argued, as some mainstream economists do, that the merits of a heightened minimum wage were slight—that it may, for instance, raise prices, offsetting the gain to low-wage workers. The better solution, she argues, is to raise the earned income tax credit (EITC)—the government’s payment to the working poor—and to support universal pre-K education. “Why settle for half-measures,” she concludes (by which she means raising the minimum wage), “when such truly first-rate policies [by which she means the EITC and pre-K schooling] are well understood and ready to go?” Ready to go? Congressional Republicans are rarin’ to increase government spending on the working poor and...

Boehner on the Fringe

In announcing Thursday that he would no longer negotiate with President Obama over a deal to reduce the nation’s budget deficit, House Speaker John Boehner said that Republicans would support no more tax increases. The question, he said, came down to “how much more money we want to steal from the American people to fund more government. I’m for no more .” Proudhon proclaimed that property is theft. Boehner proclaims that taxation is theft. That’s the kind of claim more associated with fringe parties that have never been in government, parties that argue that their governmental system is no longer legitimate. It’s the language of Beppe Grillo’s xenophobic Five Star Movement in Italy or the neo-fascist Golden Dawn Party in Greece, two nations in which both government corruption and tax evasion are systemic. It’s not the kind of claim we associate with a party that has controlled the executive branch of the U.S. government for 20 of the last 32 years and one or both houses of Congress...

Why Republicans Should Want to Index the Minimum Wage

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If Republicans have any political sense at all, they’ll support not just raising the minimum wage, but indexing it. The economic case for raising the wage, at a time when economic inequality is rampant, working-class incomes are declining, and Wal-Mart sales are falling through the floor, is overwhelming. But while Republicans may blow off the economic consequences of not raising the federal standard, they can’t be so cavalier in dismissing the political consequences. The constituency that today’s GOP most desperately seeks to win, or at least neutralize, is Latinos—the ethnic group most clustered in low-wage jobs, and most certain to benefit from a minimum wage hike. In swing districts with substantial Latino populations, Democrats are certain to highlight Republican opposition to raising the wage in the 2014 elections. Nor is support for a higher wage limited to Latinos. On each occasion in the past decade that a state minimum wage increase has been put before voters as a referendum...

Darrell Issa's Tight Spot

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Tuesday’s House Judiciary Committee hearing on the status of the undocumented produced a united front of Republican support for legalizing those immigrants, but not allowing them to become citizens. Well, an almost united front. As Kitty Felde of Los Angeles public radio staton KPCC reported , one GOP Committee member dissented from his peers’ halfway-house stance. Darrell Issa, the sole Republican committee member from California, told Felde that he believes the undocumented should be allowed to become citizens. “I believe that that’s the inherently American thing to do,” he said. Issa is nobody’s idea of a Republican moderate—to the contrary, he’s a doctrinaire right-winger. As chair of the House Oversight Committee, moreover, Issa has consistently endeavored to inflate various Obama administration contretemps into full-blown scandals (Fast and Furious, Benghazi) despite the absence of supporting facts. But Issa also represents a district that, according to the 2010 Census, is 26...

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