Economy

Daily Meme: It Ain't Easy Being a Koch

AP Photo/Damian Dovarganes
Pity the poor Koch brothers. All Charles and David want to do is make America safe for good, old-fashioned, Wild West capitalism. But somehow, they seem to be teeing everybody off—left and right. Plus, it's so doggone pricey to buy control of the federal government these days! The K-Bros dished out $400 million to defeat President Obama in 2012, all for naught. According to an Americans for Prosperity memo that fell into the hands of Politico , they learned a startling lesson from the effort: “If the presidential election told us anything, it’s that Americans place a great importance on taking care of those in need and avoiding harm to the weak." Who knew!?! So now, as they prepare to spend $125 million to buy Congress this year, the memo says the Kochs are softening their message so people don't get the wrong idea : "We consistently see that Americans in general are concerned that free-market policy—and its advocates—benefit the rich and powerful more than the most vulnerable of...

Koch Brothers Struggle Against Misconception That They Care About the Wealthy

Jared Rodriguez/Truthout
Politico's Kenneth Vogel got hold of some internal strategy documents from Americans for Prosperity, the pass-through for much of the political spending by cartoon villains Charles and David Koch, and while apart from the eye-popping spending being planned ($125 million this year) there isn't too much that's shocking, there is this poignant passage about how misunderstood free-market ideology is among the voters: "If the presidential election told us anything, it's that Americans place a great importance on taking care of those in need and avoiding harm to the weak," reads the AFP memo. Echoing Charles Koch's opposition to the minimum wage , it asserts that free market, low-regulation policies "create the greatest levels of prosperity and opportunity for all Americans, especially for society's poorest and most vulnerable." Yet, the memo says, "we consistently see that Americans in general are concerned that free-market policy — and its advocates — benefit the rich and powerful more...

Seattle's $15 Minimum Wage Agreement: Collective Bargaining Reborn?

15 Now/Seattle
15 Now/Seattle Activists at an April demonstration demanding a $15-per-hour minimum wage in Seattle. W e have seen the future of collective bargaining, and it just may work. It should work brilliantly in Seattle if the city council doesn’t screw it up. Last Thursday—May Day, for the nostalgic among you—Seattle Mayor Ed Murray announced that a business-labor task force he appointed had agreed on a plan to raise the minimum wage in the city to $15 per hour, over four years (with annual incremental increases) for businesses with more than 500 employees, and up to seven years for smaller businesses. By the end of the process, tipped employees would have an assured hourly income of $15, not counting whatever tips they received on top of that, and the wage would thereafter be indexed to the rise with the cost of living. Business, labor and the mayor having agreed, the plan now goes before the city council, whose members, like Mayor Murray, have backed the $15 hourly rate, but who may yet...

The Best Way to Deal With Putin? Take It Slow

AP Photo/RIA Novosti, Alexei Nikolsky, Presidential Press Service
(AP Photo/RIA Novosti, Alexei Nikolsky, Presidential Press Service) Russian President Vladimir Putin speaks during a nationally televised question-and-answer session in Moscow on Thursday, April 17, 2014. “A nd then, in an instant, everything changed forever.” It’s one of the great clichés of literature and public policy. Not only overused, it’s often deployed in an overly-deterministic way: “9/11 changed everything.” Well, no it didn’t, at least not until officials acted as if it did, and then decided to change everything: torturing innocent people, building black site prisons, starting (and failing to win) two wars, collecting information on everyone’s phone calls. Sometimes, though, U.S. foreign policy discourse has the opposite problem: Failing to absorb change, it continues to move its legs in mid-air, like Wile E. Coyote, without never looking down to notice that it’s already gone over the cliff. That’s where we are right now with Russia. Putin-huggers and old Cold Warriors...

Who's Got the Political Will to Save the Middle Class?

Demonstrator blocks traffic at December fast-food workers' protest in Washington, DC. (AP Photo/Charles Dharapak)
AP Photo/Charles Dharapak I t’s not easy being president during an epoch of downward mobility for the American people. The shrinking of the middle class--a phenomenon to which Americans are historically unaccustomed, most particularly during recoveries-- depresses the president’s popularity, drags down that of his party, and generally plays hell with incumbents’ election prospects. That the American people are downwardly mobile was underscored this weekend by a report from the National Employment Law Project demonstrating that while lower-wage jobs accounted for just 22 percent of the jobs lost during the recession, they account for 44 percent of the jobs created since the recession ended in 2010. Middle-wage jobs, by contrast, accounted for 37 percent of the jobs lost during the recession, but just 26 percent of the jobs created since. Median annual household income is still roughly $4,000 beneath its level before the recession started. Indeed, the most alarming polling for the...

Walmart Does Something Good

Flickr/Walmart
Walmart is able to use its enormous size and market power to mercilessly squeeze its suppliers and bring its prices down to extraordinarily low levels. Liberal elitists like the ones who read this magazine tend to believe that although those low prices provide a boon to the store's largely low-income customer base, that is outweighed by the negative effects Walmart has on wages and benefits, when it comes not only to its own employees but also those through its supply chain and the larger labor market. And that's not to mention its dependence on government—the company not only makes billions of dollars every year in sales from food stamps, because of its meager wages and benefits, taxpayers subsidize tens of thousands of Walmart employees with those very food stamps, and Medicaid insurance as well. OK, so you know all that. But what if Walmart uses its huge footprint to create a separate benefit for low-income people in an area where they could really use it, and without hurting (...

Today In American Exceptionalism

This graph will blow your mind. Click inside to see why.
We're going to talk about rich people and government spending, but first, some context. At some point you may have wondered about parliamentary systems like they have in Great Britain, in which the party that gets the most seats in the legislature also installs its leader as chief executive. With complete control over government, why don't they go hog-wild and completely remake the entire country after every election? The simple answer is that they know they'll have to stand for another election before long. But the other key factor is that a transition from, say, Labour to the Conservatives isn't as jarring as a transition of total control from our Democrats to Republicans might be, because there isn't as much distance between the parties. In many of our peer countries in Europe and elsewhere, some things we fight bitterly over have basically been settled. For instance, everyone in the U.K. accepts that the National Health Service is a good thing, even if there might be some...

Too Big to Fail. Not Too Strong.

Nomi Prins’s new book traces America’s propping up of banks since the robber barons.

F rom Andrew Mellon’s nearly 11 years as Treasury secretary under Presidents Warren G. Harding, Calvin Coolidge, and Herbert Hoover to our time, when Timothy Geithner went from financial regulator at the New York Federal Reserve to Treasury secretary to investment executive, journalists have often employed the image of a revolving door to describe the flow of bankers between Wall Street and the U.S. Department of the Treasury. But few know that the White House and the Treasury are, arguably, a single building. A tunnel connects 1500 Pennsylvania Avenue with 1600. Presidents use this passageway to slip visitors in and out of the Oval Office. Nomi Prins, in her new history All the Presidents’ Bankers , does not say it in so many words. But she shows that the tunnel from the White House to the Treasury extends, metaphorically, for 226 miles to Lower Manhattan. Prins digs into presidential libraries and national archives and mines a shelf of books. She also knows Wall Street from the...

How Big Data Could Undo Our Civil-Rights Laws

iStockPhoto
iStockPhoto B ig Data will eradicate extreme world poverty by 2028, according to Bono , front man for the band U2. But it also allows unscrupulous marketers and financial institutions to prey on the poor . Big Data, collected from the neonatal monitors of premature babies , can detect subtle warning signs of infection, allowing doctors to intervene earlier and save lives. But it can also help a big-box store identify a pregnant teenager —and carelessly inform her parents by sending coupons for baby items to her home. News-mining algorithms might have been able to predict the Arab Spring . But Big Data was certainly used to spy on American Muslims when the New York City Police Department collected license plate numbers of cars parked near mosques, and aimed surveillance cameras at Arab-American community and religious institutions. Until recently, debate about the role of metadata and algorithms in American politics focused narrowly on consumer privacy protections and Edward Snowden’s...

A Chance to Remake the Fed

J anet Yellen has only chaired the Federal Reserve for a few months, but you could forgive her if she feels like the new kid in school that nobody wants to sit with at lunchtime. With the resignation of Jeremy Stein earlier this month, there are only two confirmed members of the seven-member Board of Governors: Yellen and Daniel Tarullo. Three nominees—Stan Fischer, Lael Brainard and Jerome Powell, (whose term expired but has been re-nominated)—await confirmation from the Senate. Another two slots are vacant, awaiting nominations. One consequence of the shortage of Fed governors is that regional Federal Reserve Bank presidents, chosen by private banks, now outnumber Board members at monetary policy meetings, allowing the private sector to effectively dictate monetary policy from the inside, and creating what some call a constitutional crisis . The need for two more nominees, however, provides an opportunity to reunite the progressive coalition that prevented Larry Summers from getting...

When Shareholder Capitalism Came to Town

The rise in inequality can be blamed on the shift from managerial to shareholder capitalism.

Jason Schneider
I t was only 20 years ago that the world was in the thrall of American-style capitalism. Not only had it vanquished communism, but it was widening its lead over Japan Inc. and European-style socialism. America’s companies were widely viewed as the most innovative and productive, its capital markets the most efficient, its labor markets the most flexible and meritocratic, its product markets the most open and competitive, its tax and regulatory regimes the most accommodating to economic growth. Today, that sense of confidence and economic hegemony seems a distant memory. We have watched the bursting of two financial bubbles, struggled through two long recessions, and suffered a lost decade in terms of incomes of average American households. We continue to rack up large trade deficits even as many of the country’s biggest corporations shift more of their activity and investment overseas. Economic growth has slowed, and the top 10 percent of households have captured whatever productivity...

Cuomo's Wedge

AP Images/Mike Groll
O n Monday, Mary Fallin, Oklahoma’s Republican governor, signed legislation forbidding her state’s cities from enacting ordinances that set their own minimum wage standards or that entitle workers to paid sick days. Even in hard-right Oklahoma, citizens were collecting signatures to put initiatives raising the minimum wage and mandating sick-day on the Oklahoma City ballot. Fallin has now put an unceremonious end to such egalitarian frippery. As an increasing number of cities have considered setting their minimum wages higher than those of their states, conservatives in state government have moved to strip them of that power. Most Southern states explicitly forbid their municipalities from indulging in such displays of egalitarian economics. In Washington, a Republican state senator has introduced legislation that would keep Seattle from raising its wage. In Wisconsin, Republican Governor Scott Walker is backing legislation that would strip cities of the right to enact living wage...

Karl Polanyi Explains It All

Tim Bower
I n November 1933, less than a year after Hitler assumed power in Berlin, a 47-year-old socialist writer on Vienna’s leading economics weekly was advised by his publisher that it was too risky to keep him on the staff. It would be best both for the Österreichische Volkswirt and his own safety if Karl Polanyi left the magazine. Thus began a circuitous odyssey via London, Oxford, and Bennington, Vermont, that led to the publication in 1944 of what many consider the 20th century’s most prophetic work of political economy, The Great Transformation: The Political and Economic Origins of Our Time . Polanyi, with no academic base, was already a blend of journalist and public intellectual, a major critic of the Austrian School of free-market economics and its cultish leaders, Ludwig von Mises and Friedrich Hayek. Polanyi and Hayek would cross swords for four decades—Hayek becoming more influential as an icon of the free-market right but history increasingly vindicating Polanyi. Reluctantly,...

Yes, Being a Woman Makes You Poorer

AP Images/Susan Walsh
S enate Republicans blocked the Paycheck Fairness Act yesterday, a bill that would make it illegal for employers to punish workers for discussing wages and would require them to share pay information with the Employment Opportunity Commission. President Barack Obama has already signed an executive order prohibiting federal contractors from punishing employees who talk about their pay. These two actions were pegged to the somewhat made up holiday called “Equal Pay Day” celebrated Tuesday, and were discussed by many in Washington in merely political terms : evidence of attempts by Democrats to woo women voters and a continuing sign of Republicans' “difficulties” with them. Elsewhere, pundits and writers wanted to discuss whether the pay gap really existed. A few years ago, some conservatives and a few liberals began to attack the much-talked-about fact that women make 77 cents to every man’s dollar as untrue, based largely on the idea that the gap itself was mostly accounted for by...

Workers on the Edge

AP Images/Amy Sancetta
O ne of the most significant contributing causes of the widening inequality and insecurity in the American workforce is the accelerating shift to what economists call contingent employment. That means any form of employment that is not a standard payroll job with a regular paycheck. It can take the form of temps, contract workers, part time jobs, or jobs with irregular hours. A study by the GAO found that fully one-third of the U.S. workforce, or 42.6 million workers, was contingent, meaning in a work arrangement that is “not long-term, year-round, full-time employment with a single employer. “ It is a common myth that the shift to precarious, irregular employment reflects either the structure of the new, digital economy or the preferences of workers themselves. But in reality, most contingent work is the result of efforts by employers to undermine wages, job protections and worker bargaining power. Work that could be (and once was) standard payroll employment is turned into...

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