Economy

Dave Bing’s Detroit

AP Photo/Carlos Osorio
Cal Sport Media via AP Images This piece is the first in a two-part series about the Detroit mayoral race. Check in tomorrow for part two, about the Democratic candidates currently campaigning. Y ou could say that Dave Bing is a celebrity politician. But Detroit’s mayor is so mild-mannered, it’s easy to forget that he’s a Hall of Fame basketball star who was drafted second overall in 1966, earned Rookie of the Year honors, and played in the NBA for 12 seasons—most of them, naturally, with the Detroit Pistons. The league chose him as one of its 50 greatest players in 1996, and the Pistons retired his number. But that’s all history. When Detroiters elected Dave Bing to the city’s top office four years ago, it wasn’t because of his fame. It was because he was boring. When the 65-year-old Bing declared his intention to run back in 2008, Detroit had become something of a spectacle. Kwame Kilpatrick, the city’s young and talented two-term mayor, had resigned as part of a plea bargain for...

Budget Roulette: The Uncertain End Game

AP Images/Carolyn Kaster
AP Images/Carolyn Kaster This budget crisis, weirdly, has nothing to do with the budget. It is the expression of the Tea Party Republicans’ animus against Obamacare, their general loathing of government, and their willingness to resort to wildly destructive tactics. As Senate Majority Leader Harry Reid, one of the few heroes in this mess, put it so aptly, “They’ve lost their minds.” A fine irony is that one of the few things that the government shutdown doesn’t affect is the Affordable Care Act, which takes effect today. The Act is a mandate to purchase affordable insurance via hybrid “exchanges,” which are not closed by the failure to approve a budget. In a just world, the extremist Republicans would take the fall. Republicans as conservative as Dana Rohrabacher of California, who came to prominence as an ally of the John Birch Society, and arch conservative Karl Rove, have warned that the Republicans are courting political suicide. “What we’re doing here is shooting ourselves in the...

Pandora's Box

AP Images/Austin American Statesman/Jay Janner
AP Images/Austin American Statesman/Jay Janner O n a clear day this past May, Cody Wilson stood at a firing range just south of Austin, Texas. The BBC crew he’d invited stood a few feet away as the 25-year-old University of Texas law student adjusted his earplugs and sized up his target—a mound of dirt off in the distance. He raised a small handgun, pulled the trigger, and a .380 caliber shot rang out, kicking up a cloud of dust. The pistol Wilson held was made of black-and-white plastic and looked like a cheap children’s toy. What had drawn the BBC was that the gun, which Wilson dubbed the “Liberator,” had been created with an $8,000 3-D printer bought used on eBay. A self-described “techno-anarchist,” Wilson is on a quest to prove that new technology is rapidly changing what we can hope to regulate—from information and ideas to physical objects. The proof is that anyone with an Internet connection, a computer, and a 3-D printer can now manufacture a gun. Three-dimensional printing...

John Boehner Has Speaker Tenure for Life—If He Wants It

AP Photo/Cliff Owen
AP Photo/Molly Riley D on’t worry about John Boehner. Yes, there seem to be near-constant rumors and suspicions of a revolt against him, and Republican members of the House have been conspiring with Texas senator Ted Cruz. But it’s unlikely to actually cost him his job. He’s probably going to survive and remain as speaker of the House just as long as he wants to. At least, as long as divided government and the Republican House majority last. Over at The New Republic , Noam Scheiber argues that Boehner’s job will “ almost certainly ” be lost if he allows the debt limit to be raised with mostly Democratic votes. That’s probably wrong. To see why, however, we need to step back. See, the reasons that Boehner has seemingly been five minutes from getting ousted throughout his speakership have nothing to do with Boehner; they’re structural. Which means that any possible speaker—Boehner, Majority Leader Eric Cantor, Michele Bachmann, or Ronald Reagan risen from the dead—would have pretty much...

Five Reasons Food Stamps Work Just Fine

Melanie Stetson Freeman/The Christian Science Monitor L ast week, House Republicans passed a bill that would cut the food stamp program by about $40 billion over the next ten years. They’re drawing on headline numbers—the program serves about 47 million people each year and has the biggest price tag of any program in the farm bill, $80 billion—to drum up support. The aid, technically known as the Supplemental Nutrition Assistance Program, or SNAP, is still known as food stamps to nearly everyone who receives it. There’s little chance that the bill will be enacted, given the more moderate makeup of the Senate, although it’s likely that some cuts will end up on the president’s desk. (The Senate is cutting $4.4 billion from the program.) Still, food stamps are one of the most robust federal entitlements for the poor we have left, so it’s always going to be a target for cuts. It’s worth looking beyond those bold-face numbers in the news to see how the program is performing—and why it’s...

The Day after Shutdown

AP Photo/Carolyn Kaster
AP Photo/Denis Paquin, File S o it’s October … or maybe it’s six or ten weeks later, after a short-term continuing resolution has come and gone. The clock strikes midnight, Congress has failed to fund the government, and the next day it shuts down. What happens next? There’s been plenty of talk about the possibility of a government shutdown, along with the potential ways it could be avoided. But what happens after the shutdown? I don’t mean how the government operates or doesn’t operate; the Congressional Research Service has a good explainer on that. I’m talking about how the bargaining situation changes. Because remember: Government shutdown or not (I'm on Team Probably Not, for those counting at home), sooner or later a deal will be reached. 1. It’s Getting Hot in Here People will be inconvenienced, directly, by a shutdown, whether it’s vacations ruined (thanks to national parks closing), Social Security applications postponed , or government grants and contracts not awarded. Which...

Playing Hunger Games with Food Stamps

When the House voted yesterday to cut $40 billion from the food-stamp program, they doubled the cuts the House had previously considered. The Congressional Budget Office estimates that 3.8 million people will be taken off the program, primarily because the House is removing some of the flexibility states have to meet the needs of their communities. They are restoring strict federal rules to the program. That’s an odd move for a bunch of Republicans. Most of the people who will be removed from the Supplemental Nutrition Assistance Program’s (SNAP) rolls are adults in high unemployment areas who don’t have children and can’t find jobs, and families with gross incomes that are slightly higher than the poverty line, but whose disposable incomes fall below it. These changes were introduced a few years ago to meet a rising need. The poverty line is low, and doesn’t take into account how much families spend on the costs of necessities like housing and childcare. More than half of all food...

The Conservative Plan for Medicaid Expansion

AP Photo/Osamu Honda
AP Photo/The Columbus Dispatch, Chris Russell A number of policymakers on both sides of the aisle cheered when, in April, the Arkansas Legislature passed a law both expanding Medicaid and transforming it into a service available in a marketplace of insurance options, a move known as the “private option.” Similar cheers erupted in June when Iowa Governor Terry Branstad approved a similar measure. The legislation marked a major accomplishment—not because the policies are necessarily improvements over traditional Medicaid but because they establish politically palatable paths for conservatives who want to increase access to health care. In Pennsylvania, GOP Governor Tom Corbett—who was against Medicaid expansion and this week announced he is is tepidly for it—has pointed to the these new plans as a model he might consider (among other, more controversial changes.) The private option may be a way to make comprehensive health-care coverage viable in other Republican states—but that depends...

The Fed Stays the Course

AP Photo/Susan Walsh
F inancial markets rallied when the Federal Reserve defied the rumor-mongers and resolved to continue its program of keeping interest rates very low until the unemployment rate improves. There was only one dissenting vote on the Fed’s policy-setting open market committee. What’s going on here? Ever since the run-up to the collapse of 2008, what’s good for Wall Street hasn’t exactly been good for the rest of the economy. Are these ultra-low interest rates just pumping up more financial bubbles, as critics fear? Or does a still weak economy need this form of stimulus? Think of it this way. There are risks to continuing a policy of very easy money, but premature tightening would be even worse. The markets and the pundits got this one wrong because the hawks in the Fed system had been leaking rumors that they had the votes and that the Fed would soon be “tapering” (pulling back) its program of $85 billion-a-month in bond purchases. Chairman Ben Bernanke, to appease the hawks, lent...

The Obamacare Is Falling! The Obamacare Is Falling!

AP Photo/Charles Dharapak
AP Photo/Steve Browne, Valley City Times-Record As we approach the full implementation of the Affordable Care Act at the end of the year, confusion still reigns. Most Americans don't understand what the ACA does or how it works, which is perhaps understandable. It is, after all, an exceedingly complex law, and from even before it passed there was an aggressive and well-funded campaign of misinformation meant to confuse and deceive Americans about it, a campaign that continues to this day and shows no sign of abating. To undo uncertainty and banish befuddlement, we offer answers to a few questions you might have about Obamacare. What's happening when? The next important date is October 1, when open enrollment for insurance plans on the new exchanges begins. Those who sign up will begin their new insurance on January 1, when the rest of the high-profile components of the law take effect. The individual mandate, requiring everyone to carry insurance or pay a fine, takes effect, as does...

Obama Just Changed the Most Racist Law in the Country

(flickr/uncgspecia)
You may have missed it, but yesterday President Obama dramatically altered one of the most racially damaging laws in America when the Department of Labor announced that it would extend minimum wage and overtime protections to home care workers. To say there's a backstory here would be a wild understatement. Seventy-five years ago, Franklin Roosevelt achieved a historic victory—but a morally compromised one—when he signed the Fair Labor Standards Act (FLSA) of 1938. The law created the modern labor regulations that we're all familiar with today, including the minimum wage, overtime pay, and much more. Yet getting the FLSA passed entailed a major concession to southern Democrats, who successfully fought to exclude agricultural and domestic workers. Why? Because, as legal scholar Juan Perea has shown in his illuminating history of the law, that exclusion was seen as crucial to preserving a southern way of life that hinged on exploiting cheap African-American labor—both in the fields...

Shutdown Report: How to Play Chicken and Lose

AP Images/J. Scott Applewhite
AP Images/J. Scott Applewhite R epublicans are likely to incur serious political damage in their effort to hold hostage continued funding of the government in exchange for deep spending cuts. This routine has become an annual ritual, and in the past President Barack Obama has been the first one to cave. The 2011 Budget Control Act, which includes the automatic sequester, is one bitter fruit of the president’s past failure to hang tough in the face of Republican extremist demands. But this time is different. The Tea Party Republicans, who dominate the GOP House Caucus, are demanding that President Obama de-fund the Affordable Care Act in exchange for their willingness to fund ordinary government spending in the new fiscal year, which begins October 1. But they picked the wrong demand. In the past, Obama was willing to make deep cuts in federal spending in order to get a budget deal with Republicans. The Affordable Care Act, however, is a nonnegotiable for the president. It’s his...

We Shall Overwhelm

AP Images/J. Scott Applewhite
AP Images/J. Scott Applewhite F our years ago, the modern Tea Party seemed to emerge from nowhere, leaving journalists bewildered and the public with few reference points to understand seemingly spontaneous rallies by middle-class people seeking lower tax rates. A search for the phrase “tea party” in connection with “politics” in major newspapers yielded fewer than 100 mentions in 2008—and when the words did appear linked together, they suggested studied formality and decorum. The next year, they appeared more than 1,500 times, often connected to “protest demonstration.” But little was spontaneous about the new party. “Social movements that explicitly defend the interests of the rich and the almost-rich have been a recurring feature of American politics,” Isaac William Martin, a sociologist at the University of California, San Diego, reminds us in his new book, Rich People’s Movements: Grassroots Campaigns to Untax the One Percent . “Such movements shook the American polity before the...

Time to Give America a Raise

AP Photo/Louie Balukoff
I t’s been a good week for the nation’s numerous poverty-wage workers. They’ve been way overdue for a good week. On Tuesday, the Labor Department issued a much anticipated and delayed extension of the federal minimum wage and overtime regulations to the nation’s 2 million homecare workers. Last Thursday, the California legislature passed (and Governor Jerry Brown pledged to sign) a bill that raised the mega-state’s minimum wage from $8-an-hour to $10. Taken together, these two measures limiting poverty-wage work underscore a host of significant changes to the political economy. The Labor Department’s extension of the minimum wage recognizes the growth of homecare as an industry increasingly like any other, with agencies big and small, many relying on partial government subsidies, employing millions of workers. It also signals the continuing extension of federal work standards beyond those that originally covered white men disproportionately. When the Fair Labor Standards Act (which...

A Long Way from the End of Men

AP Photo/Mark Lennihan
AP Photo/Patrick Semansky T hough we’ve technically been recovering from the Great Recession since late 2009, the poverty rate in the United States has been stuck at about 15 percent since 2010. New data released yesterday from the Census Bureau showed that last year wasn’t much better. Poverty rates held steady at the highest levels in a generation. Median incomes have fallen in the last ten years by more than 11 percent. Coupled with recent studies showing that most of the recovery’s gains have gone to the top 1 percent of income earners, the data on poverty confirms what many already knew: Inequality is growing, and the middle class is dying. That’s especially true when you examine the status of women and racial minorities. The median incomes for Asian and white families last year were $68,636 and $57,009 respectively. For Hispanics and blacks, they were $39,005 and $33,321. These incomes are statistically unchanged from 2011, which means that if the economy is growing, the average...

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