Tapped: The Prospect Group Blog

Homejoy’s Closure May Signal A Turn for the On-Demand Economy

On Friday Adora Cheung, the co-founder and CEO of Homejoy, announced she will be closing down the app-based cleaning service by the end of July. Homejoy, which started in 2012, relies entirely on contract labor and is commonly referred to as the “Uber for house cleaning.”

Cheung told Re/code that the “deciding factor” to shut Homejoy down was the four lawsuits her company faces over whether Homejoy workers were misclassified as independent contractors. These controversial lawsuits have made it even harder for Homejoy to raise funds in Silicon Valley. As Re/code’s Carmel DeAmicis put it, “The on-demand space has become a riskier bet for investors in a short amount of time.”

Just days earlier, David Weil, the head of the Wage and Hour division at the Department of Labor, issued new guidelines for interpreting when an independent contractor should actually be considered an employee. Weil stressed that the scope of the employment relationship under the Fair Labor Standards Act is “very broad.”

The debate over worker misclassification is shaping up to be a contentious point in the 2016 election. Though Hillary Clinton’s campaign told TechCrunch that Clinton has not taken a stance on whether Uber drivers should be labeled contractors or employees, she did recently say that the “so-called gig economy” was “raising hard questions about workplace protections and what a good job will look like in the future.”

On the other hand there’s Jeb….

It looks like many employers aren’t waiting around to see where the next president will land on the on-demand economy and worker classification. More companies, like Homejoy, may close up shop in light of costly litigation they can’t afford. Others may follow the lead of Instacart—the “Uber for groceries”—which recently announced that its “personal shoppers” could become part-time employees if they so choose.

Buzzfeed labor reporter Caroline O'Donovan suggests that maybe what Homejoy’s closure signifies is that the on-demand model is simply unsustainable for smaller companies. “Homejoy’s closing isn’t necessarily an indication that the on-demand economy is doomed,” she writes. “It might instead be the beginning of an opportunity for bigger players like Amazon and Google, which have pockets deep enough to stay alive when the classification issues wends its ways through the courts.”

Indeed, the day Cheung announced Homejoy would be closing down, Google quickly scooped up 20 members of the Homejoy product and engineering team to help the Internet search giant enter into the home services market.

Fusion’s Kevin Roose made a similar argument back in June, predicting that, “in the next six to 12 months, we will see a significant consolidation in the on-demand industry.” While companies like Uber aren’t going away, he thinks “lots of small and mid-sized companies will be washed out of the market.”

Looks like some Silicon Valley entrepreneur will need to innovate the “Uber for saving smaller Ubers”—stat. 

Court Upholds Delaware Dark Money Disclosure Law

Yesterday, the U.S. Court of Appeals for the Third District upheld the constitutionality of Delaware’s Election Disclosure Act. The 2012 law, which is a transparency safeguard instituted after Citizens United v. FEC, closed the loophole allowing outside groups to evade disclosure as long as their ads, known as “sham issue ads,” refrained from expressly advocating for a certain candidate’s victory or defeat.

For instance, the ad could simply say “Call Senator So-and-So and tell them to stop doing such and such.” The 2012 disclosure act stipulates that if an outside political group mentions any Delaware candidate in a message, it must identify itself and who its main donors are. And in upholding the law, a three-judge panel unanimously rejected the plaintiff’s argument that disclosure should be confined specifically to instances of “express advocacy.”

“The Delaware Elections Disclosure Act promotes transparency in elections, which the Supreme Court has long recognized as a vital governmental interest, and yesterday’s ruling ensures that Delaware voters will continue to have access to the information they need to make informed decisions on Election Day,” said Tara Malloy, senior counsel for the Campaign Legal Center, in a statement.

Campaign finance reform advocates call this law one of the strongest state disclosure laws in the country. It’s actually largely based on federal law that was passed in the 2002 McCain-Feingold Act, which was the last major act of campaign finance reform at the federal level. There are a number of states that have instituted similar provisions that keep unaccountable groups from swaying voters.

Chalk this up as one small win in the broader fight to expose the big-money billionaires who run rampant in our brave, new post-Citizens world.

From Civil Rights to Obama, the Confederate Flag Has Meant One Thing

Oklahoma was not a part of the old Confederacy, but that historical fact did not stop some from greeting the first black president with the Confederate flag when he arrived in Oklahoma City on Wednesday.

The purpose of Obama’s trip to the small town of Durant, Oklahoma was to visit the Choctaw Nation of Oklahoma, and to talk about expanding economic opportunity, which the white protesters seemed to think was a good time to display one of the most prominent symbols of intolerance, hatred, slavery, and racism. And unfortunately, the photo of the battle flags being waved looks eerily similar to multiple such “protests” in America’s bloody and hateful past.

The Confederate flag was re-popularized during the Civil Rights era as a way for Southern states to protest integration. Arkansas, like many other Southern states, was hostile to the desegregation of schools. At Little Rock Central High School, nine black students were prevented from entering the school on September 2, 1957. The next day, a protest was held outside of the high school in which the crowd waved Confederate flags.

President John F. Kennedy had campaigned on equal rights for blacks—earning him the disdain of many white Southerners—and on June 11, 1963, he delivered a civil rights speech calling for equality. On the day of his assassination, just five months later, Kennedy was greeted by a Confederate flag upon his arrival in Dallas.

In March 1965, when Martin Luther King Jr., John Lewis, and countless others marched from Selma to Montgomery to protest the lack of voting rights for black people, hostile whites taunted the marchers, yelled slurs, and proudly waved the Confederate flag.

White people who flew the Confederate flag during the Civil Rights era had very clear intentions. They were against equal rights for black people and invested in maintaining the status quo of white supremacy. Any black person, or any person, advocating for the equality of blacks was often met with a symbol of hate.

We are living in a time when black people are killed by police for traffic violations, a white presidential candidate calls Mexican immigrants rapists (and subsequently surges in popularity), and a white supremacist murders nine people in a historically black church and the media bend over backward looking for a reason to not call him what he is—a racist.

So when the first black president goes to a Southern state and is met with the old Confederate flag, the message is clear: You are not equal. Electing a black man to the highest office of the land was an impressive feat for a country with such an ugly recent history, but we still have a long way to go before blacks are truly equal. The fact that people, under the guise of “heritage,” will still wave a symbol of hatred to protest racial progress is proof. 

Scott Walker Weasels Away from Campaign Coordination Investigation

A shocking decision came down from the Wisconsin Supreme Court today that quite literally destroys a longstanding investigation into whether Governor Scott Walker illegally coordinated with right-wing political groups during his 2012 recall campaign. This comes just three days after he formally announced his presidential run.

As ThinkProgress reports, the court, voting along partisan lines, ruled that in order to “prevent the chilling of otherwise protected speech” investigators must “permanently destroy all copies of information and other materials obtained through the investigation” and ordered that all those accused of illegal coordination doesn’t have to cooperate with investigators any longer.

Watchdog groups have called out the court for refusing to recuse justices with very clear conflicts of interest. And in one of those lovely twists of fate only found in the world of American politics, the groups that Walker allegedly coordinated with were fundamental in electing a number of the conservative judges currently on the bench.

The decision is a devastating blow for campaign finance reform advocates because a successful investigation could have set broad precedent for future political campaigns. It is possible, according to The New York Times, that the decision will be appealed before the United States Supreme Court.

“This decision effectively eviscerates contribution limits in Wisconsin,” said Daniel Weiner, senior counsel at the Brennan Center, in a statement. “By limiting the reach of Wisconsin coordination rules to ‘express advocacy,’ for or against candidates, the court has made campaign finance law extraordinarily easy to evade. No other court has gone this far and for good reason—it is a misreading of the law and threatens fair and transparent elections.”

Here’s a very helpful video from The New York Times on why it’s so easy—despite campaign law—for politicians to coordinate with super PACs and other shadowy groups.

For more on the pile of dark money that Scott Walker has used throughout his slithery political ascension, read Prospect columnist Adele Stan’s detailing of his long history of donor scandals.

Zero is Actually the Loneliest Number

Each year, the last player chosen in the NFL draft is nicknamed “Mr. Irrelevant.” If the Democratic presidential nominating contest was like the NFL draft, former Republican, Independent, and Rhode Island Governor Lincoln Chafee wouldn’t even be Mr. Irrelevant—he’d be the next guy in line.

In a new poll from Monmouth University poll released on Wednesday, Chafee’s support registered at 0.0 percent. As Mother Jones pointed out, he didn’t just get less than 1 percent of the vote, he got none of it. Out of the 1,001 people Monmouth polled, zero of them said Chafee was their candidate of choice.

Think for a second about how rare it is for 1,001 people to agree on anything. You probably couldn’t get 1,001 random people to agree that the U.S. has 50 states or that the Chicago Cubs haven’t won a World Series since 1908. If you had 1,001 scientists, 100.1 of them wouldn’t believe in the manmade origins of climate change. If you had 1,001 dentists, 100.1 of them would not recommend Crest. In Chafee’s case, the unanimity of his rejection was undoubtedly aided by the fact that 78 percent of those polled had no idea who he was and thus had no real option to choose him—although that shouldn’t make his campaign feel much better.

Full disclosure: some of us here at the Prospect’s office are a bit obsessed with Chafee. From his insistence on converting to the metric system to the bizarre saga of his Facebook password, his presidential campaign is equal parts fascinating and funny, and we are not embarrassed to say we can’t get enough of it. So yes, when it comes to Chafee, we may not be the most objective critics of his newsworthiness. But while his abysmal polling numbers (or lack thereof) may not be technically newsworthy, they do beg a few interesting questions. First and foremost: why is he doing so poorly?

There is the obvious: he’s underfunded and his name recognition is nil. But why?

On Wednesday, Matthew Yglesias at Vox had a piece on Donald Trump in which he says that “Trumpism” is what a successful third party in American politics would look like:

Indeed, Trumpism is what a third party would have to sound like to get traction in America—a grab bag of issue positions that appeal to a substantial minority of the electorate but that neither party wants to wholeheartedly embrace because the ideas are too toxic in the elite circles that fund campaigns.

He specifically compares Trump to Michael Bloomberg, the kind of independent moderate who conventional wisdom tells us would be an attractive third party candidate—the best of both worlds. Yglesias makes a convincing case that it’s actually the best of no worlds. This is exactly the kind of candidate Chafee is, just on the Democratic side.

On the one hand, voters and donors who are attracted to his dovish foreign policy, environmentalism, and opposition to the death penalty already have a candidate, Bernie Sanders, and an alternative, Martin O’Malley. On the other hand, voters and donors who are attracted to his support for market solutions and free trade also already have a candidate, Jim Webb. For everyone else in the Democratic Party who wants someone who can beat the Republican nominee, there’s Hillary Clinton. Chafee is really just a fifth wheel.

Someone might point out that O’Malley and Webb have very little support either, and this is true. But they don’t have zero support.

Of course, all of this begs the question: why is he running? One of my colleagues at the Prospect has become a little too attached to the idea of the metric system and claims Chafee is just angling for a Cabinet position as Commerce Secretary (the department in charge of the National Institute of Standards and Technology). Originally, I saw his candidacy as the Democratic equivalent to Lindsay Graham’s, as something to check off his career bucket list. The more and more I read about him, though, I’m not so sure. He may genuinely believe he is the best choice for both the party and the country—despite the fact that he’s the only one. 

Haiti Needs Help, but It Doesn't Need Evangelizing

As I boarded my flight to Port-au-Prince, Haiti, on Friday morning, I was struck by something peculiar: There were almost no Haitians and at least five groups of white Americans in matching T-shirts. The back of one bright blue shirt read, “Al checher moun pou Jezi,” which means “Go look for people for Jesus” in Haitian Creole. It dawned on me that my plane was filled with evangelicals who were on their way to my mother country to preach Christianity.

At least 80 percent of Haiti identifies as Catholic and there are Protestants, such as Seventh-Day Adventists, in Haiti, too. On Sunday morning as we drove to the coast, the roads were flooded with adults and children dressed in their Sunday best, clutching Bibles and heading to church. Tap taps, the colorful buses that transport people in and around Port-au-Prince, often display religious slogans like “Christ Lives” and “God is love.” In a country like this, mission trips to Haiti to spread the word of Jesus seem self-serving, at best.

Haiti is no doubt compounded by political, environmental, and economic problems. But the way to help is not by bringing a Bible and talking religion to people who already go to church regularly but are worried about where their next meal is coming from. If churches are truly interested in helping Haiti, there are several ways to do so.

Deforestation has devastated much of Haiti. My father has made it his personal mission to remind the people living near my grandmother’s countryside home that for every tree they cut down, they should plant ten more. To combat hunger, religious people who travel to Haiti can teach kids how to plant vegetables and fruits and show them how to sustainably fish in the rivers and Caribbean Sea. Religious groups can donate money to schools, which in turn can educate the youth and turn them into the teachers, lawyers, and doctors that Haiti badly needs.

The list of ways to participate in the rebuilding and reconstruction in Haiti is endless. Unfortunately, spreading the word of evangelical Christianity doesn’t do much—except bring self-satisfaction to those invested in spreading their own beliefs. 

Trump’s Other Nightmare for the GOP: Running as an Independent

Donald Trump has performed an immense service by saying squirm-inducing things and thus forcing Republicans to either distance themselves from his idiocy—or not.

It’s a delightful vise, because Trump is now tied for first place in GOP presidential preference polls, with Jeb Bush. Attack him and you alienate Trump admirers. Fail to attack him and you look as crazy as he is.

It’s tempting to dismiss this lead as just celebrity and name-recognition, but one way or another the Donald is destined to play a major role in the 2016 campaign. He has the money and the ego, and he will be an embarrassment for the next 16 months.

And it gets worse (or better, depending on your perspective).

Trump is probably too much of a buffoon to get the Republican nomination, however he has pointedly refused to rule out running as an independent.

This is a wonderful turnabout from recent years, when independent candidacies haunted Democrats. In 2000, Ralph Nader running as a third-party candidate very likely denied Al Gore the presidency.

At the time, I begged Nader, whom I know well, to run instead in the Democratic primaries, but to no avail. This time, Bernie Sanders is playing the far more salutary role of challenging Hillary Clinton as a Democrat, and Sanders will not run as an independent should he fail to be nominated.

By contrast, the 2016 election could be like 1992, when third party crackpot H. Ross Perot ran as an independent—and at one point in the spring of 1992 was running ahead of both Clinton and his Republican rival, the sitting president George H.W. Bush. In the end, Perot drew off more Republican votes than Democratic ones, and Clinton was elected with just 43 percent of the popular vote.

The Republican game has been to fight about who can posture farthest to the far right. Now they are getting exactly what they deserve. For sheer lunatic appeal and demagogy, it’s hard to trump Trump.

The IMF Breaks with Europe on Greece—About Time!

As I’ve written on several occasions, the only player with the power to alter Europe’s disastrous demands on the long-suffering Greeks is the International Monetary Fund. Yesterday, the IMF acted.

In a stunning rebuke to the Germans and the rest of the sadists leading Europe’s Greek policy, an unnamed senior IMF official yesterday warned that Greece needs massive debt relief, at minimum $85 billion, or its economy will never recover and it will never be able to pay the rest of its debts. This is exactly what European officials have refused to concede.

This welcome and bold IMF stand throws a useful monkey wrench into the humiliating deal extracted over the weekend—especially since the IMF is one of the three entities that is supposed to enforce the deal. Conceivably, if Greece now were to decided to thumb its nose at Germany and the other brutal austerity-masters, the IMF could underwrite an alternative course.

One possibility would be for Greece to leave the euro and return to the drachma—but not as a punishment, as contemplated by the worst of the lot, German finance minister Wolfgang Schäuble. Rather, the IMF could provide new aid to Greece to make such a transition a plus for the Greeks by getting Greece out from under German diktats.

This brings the IMF full circle to the role proposed by its leading architect, John Maynard Keynes, when the IMF was created in 1944—to prevent foreign payments difficulties from pushing nations into self-deepening austerity. After a detour into the austerity camp, the IMF is returning to its roots.

Where did this change of heart come from? Economists at the IMF have long chafed at the absurd economic premises of the European leaders. But they key player in this surprise move was the IMF’s biggest shareholder, the United States.

Behind the scenes, the Obama administration and especially Treasury Secretary Jack Lew have been pressing the Germans to give the Greeks more room to breathe—to no avail until now. The IMF move was done with the full knowledge and encouragement of the United States government. Kind of makes you proud to be an American.

This was a good week for President Obama. The IMF move on Greece was overshadowed by the breakthrough in the nuclear talks with Iran. But if this latest IMF play, promoted by Washington, should prove to be a game changer, it will be as important a diplomatic achievement.

The End of the Special Relationship?

America has no ally quite like Israel. No other country has benefited as extensively from U.S. support. Successive administrations have routinely vetoed Security Council resolutions seeking to punish or condemn Israel’s behavior. The U.S. has blocked attempts to add Israel’s nuclear arsenal to the IAEA agenda. And while Israel was not decisive in instigating the Iraq War, it was one of the most ardent voices pushing for an invasion.

There have, of course, been spats. Increasingly, they have become public. There have even been moments where the U.S. has forced Israel to acquiesce to agreements it might otherwise wish to avoid—like when it temporarily halted settlement construction in 2009. But these disputes never seriously shifted American policy. When push came to shove, the U.S. and Israel presented a united front.

That might have ended today. In its deal with Iran, the United States has dramatically defied Israel’s explicit desires despite an extraordinary campaign against the deal by lobbying groups considered to be among the most powerful in the country, capped by a congressional address given by a foreign head of state who lacked a presidential invite.

Indeed, it has usually been Israel that has violated the wishes of its partner—not the other way around. In 2010, for example, Benjamin Netanyahu resumed settlement-building in the West Bank over American protests, thereby torpedoing peace talks with the Palestinians. And in 1991, the State Department’s inspector general accused Israel of making “unauthorized transfers” of American weapons to other countries—including China. But the U.S. has nonetheless hewed closely to Israel’s interests, even in cases where those interests diverge.

Iran is such a case. The White House and its allies have argued that this deal will ultimately make Israel safer by preventing (or delaying) Iran’s acquisition of a nuclear weapon. That may be true, but there are other reasons for Israeli opposition. Ending sanctions will enrich Iran, and the regime could use its newfound resources to increase funding of proxy militias like Hezbollah, which attack Israel. And it is doubtlessly unnerving for the Israeli government to see its closest ally engage in any kind of rapprochement with its most prominent enemy.

But America is not Israel, and if it wants to disentangle itself from the Middle East’s intractable conflicts, resolving a longstanding dispute is surely a boon. This deal reflects that fact.

The agreement is not yet final, and Congress could vote by a two-thirds majority to stop its enactment (though that seems unlikely). Nor is it the be-all and end-all of American-Israeli relations. Obama will leave the White House in less than two years, and whoever comes next may have a less acrimonious relationship with their Israeli counterpart. On the whole, support for Israel within the U.S. still remains strong.

But this deal will be difficult to undo, even under a GOP administration (Clinton has already given it her blessing). Should it survive, and should public disagreements between the U.S. and Israel persist, then the relationship will no longer be what it once was.

Bernie is Putting Black Youth Unemployment Front and Center

A point of criticism regarding Bernie Sanders’s presidential campaign is that as an old white man from the whitest state in the union, he’s not good at talking about racial issues in the United States. He’s more comfortable, the argument goes, focusing broadly on issues of economic inequality and unwieldy corporate influence.

The critique, however, doesn’t mesh well with reality. While Sanders may not be perfect on race—his closest advisers are on the older, male-er, and paler side and he has next to no name recognition among the black community—he’s proven a willingness to go beyond the obligatory liberal lip service.

In addition to calling for a complete reform of policing practices and saying that America as a country must apologize for slavery (how controversial, right?), Sanders is going a step further: He’s increasingly calling out the lack of discourse on and solutions for black unemployment.

“How do you discuss Ferguson and not know that, in that particular community, unemployment is off the charts?" the democratic socialist said in an extensive interview with The Nation. "How do you discuss Baltimore and not know that, in that particular community, unemployment is off the charts?"

Nationally the black unemployment rate is 9.5 percent, compared with 4.6 percent for whites. The unemployment disparity, however, is far more striking for youth. The unemployment rate for young African Americans is 21.4 percent—seven percentage points more than the national youth unemployment rate.

Early last month, Sanders introduced the Employ Young Americans Now Act (he previously introduced the same bill last year) in a neighborhood in Southeast Washington, D.C., that’s long struggled with high unemployment rates. The legislation calls for the creation of one million jobs for disadvantaged young people by sending $5.5 billion in funds to state and local job-training programs—much of which would be aimed at areas with persistent black unemployment. 

Still, Sanders has a long way to go to get any significant portion of the black vote in the Democratic primaries. A recent poll shows that 91 percent of non-white voters prefer frontrunner Hillary Clinton, while only 3 percent intend to vote for Sanders. “We’re reaching out, but it’s no secret that Bernie represents a state that is heavily Caucasian, and his decades of work on issues of importance to African Americans aren’t known amid the national conversation on race that is underway,” a Sanders adviser told The New York Times.

His polling numbers among minorities may increase as his name recognition and platform awareness increases. By placing black youth unemployment, along with a cadre of other policies, on the marquee of his campaign platform, Sanders is showing that he’s aware, he’s not oblivious, and he’s willing to make outreach to the black community a priority.

As Collier Meyerson notes for Fusion, though, Clinton is echoing Sanders. At a speech at a community college in South Carolina last month, she announced a plan to combat rampant youth unemployment by offering tax credits to businesses that bring on young apprentices. And advisers said she’ll unveil more concrete plans aimed at black youth unemployment this summer.

Clinton has embedded recognition among the country’s black voters, and as Clinton mirrors some of Sanders’s ideas, the Vermont senator will have his work cut out for him as he attempts to ensure his broader platform for addressing economic inequality remains distinct, and as he works for greater recognition and support among a broader swath of American voters. Homing in on black youth unemployment could be a good jumping-off point. 

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