Policy Shop

Policy as if people mattered

Finishing the Job: Next Steps on Financial Reform

(Flickr/Medill DC)
Now that we know that the president will not be someone who pledged openly to repeal Dodd-Frank, it's time to look forward to the agenda for the next four years. One thing is certain: The job of reforming Wall Street is far from finished. The most profitable investments for the big banks continue to be Washington lobbyists chipping away at reform and litigators challenging every major rule in court . I see three topics on the agenda: Unfinished Business; Defending Won Territory; and New Initiatives. A few of the major agenda items for each are described below. Unfinished Business The single most important holdover from the Dodd-Frank implementation process is completion of the Volcker Rule regulations . Unlike other financial reform that curbs activities, the Volcker Rule prohibits federally insured banks from engaging in specific business lines: proprietary trading and investment in hedge funds and private-equity funds. It should have been completed in July, but the war of words and...

A Mandate for a Conservative Victory on Taxes?

The tax cuts enacted by Congress under George W. Bush in 2001 and 2003 stand as the greatest achievement ever for small government conservatives. While a good chunk of Reagan's historic tax cuts had been cancelled out before he even left office, Bush's tax cuts have lived on and on, draining trillions from the U.S. Treasury. These cuts have not, as hoped, triggered deep cuts in government spending and "starved the beast." Instead, they have simply fed the debt. Now, though, the stage may finally be set for the Bush tax cuts to start achieving their goal of downsizing government—all with the acquiescence of a Democratic president and Congress. That's because, bizarrely, the mainstream Democratic position is that the bulk of the Bush tax cuts should stand and, instead of repealing those cuts in their entirety, the U.S. should only end tax breaks for the rich and then make up the rest of the lost revenue by enacting deep cuts in government spending. As I wrote yesterday in a Reuters:...

Just How Bad Was Citizens United For Business?

(Flickr/billy_pilgrim)
Tuesday’s race was the first presidential election to take place since Citizens United , and campaign spending this cycle exceeded $6 billion . With fundraising split roughly evenly between the two major parties, it was inevitable that some donors wouldn’t be able to buy the electoral outcomes they were hoping for. Tuesday’s election did offer a number of encouraging signs that coalitions of grassroots activists, volunteers, and voters can, in fact, stand up to SuperPACs, 501(c)4 groups, and other powerful aggregations of wealth that have been empowered as a result of America’s deregulated campaign finance system. Despite these positive developments, it would be a mistake to think that the fight against money in politics is over. As my colleague Heather McGhee wrote yesterday, millionaire political donors still ended the night with far more political access and influence than the vast majority of American voters. Inequality in political spending continues to undermine the principle of...

Workers Won! An Election Fly-Around

(Flickr/uusc4all)
There’s no question that Tuesday’s elections brought some significant wins for working people. I’m not talking about the candidates—although national political reporters are busy acknowledging Obama’s reelection as a clear sign that “ labor ain’t dead ” and pondering the policy implications of victories for pro-worker politicians like Ohio Senator Sherrod Brown—but rather thinking about the ballot initiatives, where in several votes across the country voters spoke out clearly in favor of raising workplace standards and preserving rights on the job. We can speculate about exactly what candidates will do once in office, but it seems certain that many working people will benefit from higher wages, improved benefits, and a right to a voice at work as a direct result of the following ballot measures: In Albuquerque, New Mexico, 40,000 low-wage workers in will get a pay boost as voters in the city overwhelmingly cast their ballots in favor of an increase in the municipal minimum wage. In...

It's Wrong to Think Big Money Lost Last Night

With the election over, pundits and other race watchers are attempting to write the final word on the most expensive, secret, and billionaire-friendly election in history. Many are starting to take the position that in the end, the $6 billion in spending didn’t matter much because swing states voters got so saturated with ads that they tuned out. If the balance of power doesn’t change, some are even saying, that tsunami of spending will have been for naught. These folks are missing the point. In the game of high-dollar financing of political campaigns, it’s not about the spending—it’s about the giving. No matter how a campaign spends the check written by a millionaire donor, that millionaire donor has purchased exactly what he or she wanted: influence. Today, November 7th, the real game begins—when those who purchased a full term of access to their favored candidate begin to exercise an undemocratic advantage over the millions of Americans who merely voted, to shape the laws and...

Segregation Forever?

(Flickr/agentvladimir)
Nikole Hannah-Jones has written an important article for ProPublica about how the Fair Housing Act has failed to reduce racial segregation in America's housing market since its passage in 1968—or more accurately, how the FHA has been failed by a bipartisan political consensus against activist integration polic y from the federal level. Nikole's piece focuses on the betrayal of the spirit of the law at federal level, but it's also worth remembering what kinds of policies and behaviors the federal law was trying to combat at the local and state level. Then as now, the primary tool of segregationists is land use policy. Back in the heyday of de jure segregation, people used to pass cartoonishly racist zoning laws. Stuff like: Cities and towns began adopting zoning codes that designated neighborhoods as all-white and all-black. When the U.S. Supreme Court struck down those laws as unconstitutional, real estate agents wrote "codes of ethics" that included bans on selling homes to African...

Your Young Adult Employment Report for October 2012

This month’s employment report points to a trend of job growth crawling just barely above our low expectations for recovery, which is good news for Millennials returning to the labor pool after years of flagging participation. And—surely this counts for something—we were spared a repeat of September’s politicized BLS paranoia . According to the October numbers, the employment gains average 170,000 jobs per month since August, a better showing than previously thought and supporting last month’s revisions for the summer. Although a swift labor revival remains elusive, at this point in the recovery, the prospect of restoring pre-recession employment rates sometime around the beginning of the next decade seems like a boon. Millennials, who are now flowing back into the labor market after yet another listless summer, appear to be looking on the bright side. In October unemployment rates increased for 20 to 24-year-olds (from 12.4 percent in September to 13.2 percent) and 25 to 34-year-olds...

Closing the Jobs Gap Requires Much Bigger Thinking

(White House)
Today's job numbers show that the economy continues to creep in the right direction—but also that job creation will remain a paramount challenge over the next few years. The problem is not just the millions of working-age adults who remain unemployed or under-employed. It's also that the labor force is growing every month by some 100,000 would-be workers, according to the Hamilton Project—or over a million people every year who need work. The Obama Administration has trumpeted all the jobs created since the President took office in January 2009—more jobs, actually, than were created under President George W. Bush. But the fact is that, as the Hamilton Project points out, the overall "jobs gap" has continued to grow even as the unemployment rate has fallen as more workers have poured into the labor force and the economy has way underperformed. And that jobs gap will continue to grow if the recovery continues at only a creeping pace. Today's job numbers of 171,000 new jobs may look...

Why Should Government Respond Differently to Natural vs. Economic Disasters?

(FEMA.gov)
With millions of Americans struggling to recover from Sandy, few people question that government has a central role to play in rebuilding battered communities in New Jersey and other states. Natural disasters are often highpoint moments for the public sector, reminding us of the power of common institutions that allow citizens to help each other in times of need. The residents, say, of sunny Los Angeles needn't do anything special at this moment, because they have already been doing something—helping fund FEMA with their tax dollars so that it has the capacity to respond to unexpected events like a "Frankenstorm." But here's a question: If most of us take for granted that we should be there for our fellow citizens during natural disasters, using the tool of government, why is it so controversial that we should also lend a helping hand during man-made economic disasters? Why are unemployment benefits under attack in numerous states, even as millions remain jobless through no fault of...

Extreme Partisanship: Preserver of our Democracy

(Flickr/Austen Hufford)
(Flickr/Austen Hufford) According a recent Pew poll, the partisan gap has almost doubled since George W. Bush’s presidency through Barak Obama’s. It is widely assumed that partisanship, particularly of the rabid variety, is detrimental to the political process and harms our democracy. I believe this is naive and not borne out by the evidence. Partisanship is responsible for the “dysfunction of Washington,” to use the current popular pejorative, and polls have recorded as much as 80 percent of the electorate dissatisfied with Congress. This figure is not easily obtained. According a recent poll conducted by the Pew Research Center, the partisan gap has almost doubled since George W. Bush’s presidency through Barak Obama’s. America is becoming more partisan, if that is possible. Incumbent senators and congressmen have worked extremely hard for this and have forged a difficult alliance to reach this goal. This alliance is often overlooked by ideologues, but obviously, though appearing...

The Subversion of Direct Democracy

(Flickr/Neon Tommy)
A few months ago, I attended a large political gathering. There, a gentleman was handing out flyers which read, “Abolish the Congress and replace it with direct citizen voting by phone or television.” A few days later, a newly-arrived transplant to Southern California wrote a letter to the Los Angeles Times . He said he was mystified by California’s method of writing and enacting laws by ballot initiative. He wondered what happened to the concept of laws being written by elected legislators. The flyer and the letter represent polar opposite views about direct versus representative democracy. The major complaint I hear about the initiative process is that it is dominated by those very interests it was originally designed to overcome. For one thing, proponents write initiatives as a wish list. Unlike the legislative process, which involves hearings, debates, and compromise, drafters of initiatives often write extreme measures representing their own agenda in the hopes of boosting...

Direct Democracy, for Billionaires

(Flickr/ehoyer)
Over a century ago, progressive reformers were deeply worried about how wealthy interests had hijacked American politics populating state legislatures with cronies who did as they were told and otherwise steamrolled the will of the people. To level the playing field, reformers worked to create mechanisms for direct democracy through state referendum and ballot initiatives, allowing voters to bypass corrupted political systems. Now, in a classic case of unintended consequences, these mechanisms for popular power are routinely used by the rich to change state laws—or try to, anyway. Again and again in recent years, wealthy individuals or interest groups have poured fortunes into ballot initiative campaigns. As the Progressive States Network has shown, the deep-pocketed right has been especially effective in using ballot initiatives to cut taxes, limit government, restrict affirmative action, and ban gay marriage. Regardless of what the rich want, the ability of a single wealthy person...

Why Schumer Is (Mostly) Right on Taxes

(Pete Labrozzi/Flickr)
Senator Schumer offered a much needed intervention in the tax debate in a speech on Tuesday. What Schumer said is that revenue-neutral tax reform was a fantasy and that any big Congressional deal on tax reform had to include higher rates on the wealthy, as well as more revenue overall. Yes and yes to both points. As Schumer pointed out, one major distortion in today's tax code that needs to be fixed is its favorable treatment of the wealthy, particularly through the historically low rate of taxes on capital gains—the source of much income for the wealthiest Americans: Over time, our tax code has widened the nation’s wealth gap. Reversing this trend ought to be a top goal of tax reform; at a minimum, we certainly should not make the tax code any less progressive than it would be if the high-income tax cuts expired. The basic goal of several tax reform plans, including Mitt Romney's, is to lower top rates and make up lost revenue by closing loopholes. But Schumer rightly points out that...

Devolving Federal Programs to the States Means Cutting Them

(Flickr/donrelyea)
On Tuesday, the Pew Center on the States released a summary of the differences between the presidential candidates on key issues affecting the states . The summary reflects Governor Romney’s preference for devolving to the states responsibility for critical policy matters. Among other things he would replace the Affordable Care Act with state plans, and convert Medicaid and federal job training programs into block grants. The proposal to devolve programs to the states has a certain resonance in American political rhetoric. States are famously “laboratories of democracy,” as Justice Brandeis once wrote and Gov. Romney reminded his audience in the first presidential debate. There’s a measure of truth to this homily, but it should be understood in context. When issues are bubbling to the surface or when Federal lawmakers are conflicted, states can indeed show the way, as they did with child labor laws and labor protections. More recently, states have been bolder than the Federal...

Invasion of the Climate Deniers

(Flickr/pennstatelive)
When it comes to climate change, there is one area in which the United States leads all other nations: Our media gives more time and attention to climate deniers than other countries. A recent study from researchers at Oxford University and Birkbeck College took a look at the level of climate skepticism in media coverage in the United States, Brazil, China, France, India, and the United Kingdom. The study, which focused on a three-month period that spanned the “ Climategate ” scandal, shows that media in the United States gives voice to climate skeptics almost twice as often as Britain—second on the list. The graph below shows the number of articles containing voices skeptical of climate change as a percentage of the total: The study also found that while climate critiques ran in most U.S. papers regardless of ideology, right-leaning papers left most of the claims uncontested. For example, the left-leaning New York Times ran 14 opinion pieces that included some form of climate...

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