Economy

Every Great American City Deserves a Shot—Including Detroit

AP Photo/Carlos Osorio
AP Photo/Carlos Osorio A major American city teeters on the brink of financial ruin. Garbage goes uncollected. Crime is rampant. Municipal officials are so desperate for cash to pay creditors that they have to beg the local teachers union for financial assistance. If this sounds like Detroit, think again. The city was New York. The year was 1975. Thanks to sensible assistance from federal and state government and a focus on economic growth rather than just reckless cuts, the Big Apple emerged from insolvency in the mid-1970s to become the most prosperous urban center in the modern world. As Motown navigates its current fiscal crisis, policymakers should remember the core lesson from New York's experience: The key to recovery is investment. There is no doubt that Detroit’s current situation is difficult. The fragile municipal tax base was decimated in the Great Recession, and the city now has thousands of abandoned properties, unacceptably slow emergency response rates, and painful...

Meet the Doctor Who Went to Jail to Save North Carolina Lives

There is right, and there is wrong. And having to watch patients die because legislators refused the administration's Medicaid expansion—that's just wrong, says physician Charlie van der Horst.

@JennyWarburg
Next month in Raleigh, North Carolina, physician Charlie van der Horst is scheduled to appear before a Superior Court judge and jury to appeal his second-degree trespassing conviction stemming from his participation in the Moral Monday protests that filled the state legislature building last year. Van der Horst, an internationally recognized AIDS researcher and professor of medicine at the University of North Carolina at Chapel Hill, joined 28 other activists who occupied the legislative building on May 6, 2013, disobeying a police order to disperse. They were among 945 people arrested last year during twelve demonstrations. North Carolina’s Republican legislative majority has cut education funding, curtailed abortion access, and created new barriers to voting. While all those measures have offended van der Horst, his deepest concern as a doctor has been the legislature’s refusal to expand Medicaid under President Barack Obama’s Affordable Care Act. In this three-minute excerpt from...

Et Tu, Jet Blue? The Airlines' War on the 99%

AP Photo/Rick Maiman, file
AP Photo/File This combination of Associated Press file photos show, on the left, a first class interior section of a United Airlines 747 plane at San Francisco International Airport in San Francisco in 2011, and on the right, the coach interior section of a JetBlue E190 plane at Seatac International Airport in Seattle, in 2008. N ext month, JetBlue is adding a first-class section to its hitherto classless—but relatively classy—planes. By virtue of not having a first-class section, JetBlue has been able to provide something that most airlines have long since abolished: legroom for its passengers. But the egalitarian seating plan has long since disappeared from nearly every airline, and JetBlue is a decided latecomer to the prevailing model of airline seating, which we will term the Piketty-Saez Seating Plan, or PSSP. To be sure, airlines are in no way responsible for the polarization of income and wealth that defines our time. Increasingly, however, their seating plans reflect that...

Moral Monday Movement Gears Up for Round Two

2013 ©Jenny Warburg
©Jenny Warburg Rev. William Barber, president of the North Carolina conference of the NAACP, leads a Moral Monday protest in Raleigh, N.C., in 2013. This article has been corrected. O n Wednesday afternoon, the North Carolina legislature will open its 2014 session. It will be hard for the Republican majority to top last year’s performance, which shattered the final vestiges of the state’s 50-year reputation for moderate governance. With the help of newly elected GOP Gov. Pat McCrory, lawmakers in 2013 slashed both public education and unemployment benefits. They rejected an expansion of Medicaid, paid for almost entirely by the federal government, that would have covered at least 300,000 low-income North Carolinians. They cut corporate taxes and eliminated the earned-income credit for low-wage workers. And they rewrote the state’s election laws in a way that will make registration and voting harder, particularly for African-American, blue-collar, and younger voters. They might have...

Daily Meme: Is the Obamacare Tantrum Finally Over?

AP Photo/Jacquelyn Martin
Sometimes, the best thing to do with a child throwing a tantrum is to let them have it and wait for them to wear themselves out. Could the GOP—after voting to repeal Obamacare more than 50 times —have finally grown tired of its own screams? For the first time in quite some time, Republicans' congressional calendar over the next few weeks is clear of any hearings or votes about the health-care law. According to The Hill , “The lack of action highlights the GOP’s struggle to adjust its message now that enrollment in the exchanges beat projections and the uninsured rate is going down.” The reason? Sign-ups have beaten expectations, people are paying their premiums, and the rate of uninsured is plummeting. In total, 17.8 million people now have health-care coverage because of Obamacare . “There is absolutely zero evidence that any Republican is talking about Obamacare less,” says the National Republican Senatorial Committee. Just like climate change, huh? It may be futile given...

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...

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