Economy

On Inequality, Obama's Words Aren't Enough

President Obama speaking Wednesday on inequality.
There are times, like the speech Barack Obama gave yesterday on economic inequality, when he reminds liberals of what we found so appealing about him. The address can stand among the most progressive statements of his presidency. Not for the first time, Obama declared inequality "the defining challenge of our time," and articulated an eloquent case, based in American history and values, for the damage it does and why we need to confront it. So why was I left feeling less than enthusiastic? Because over the last five years, Obama has succeeded in doing so little to address the problem. "Making sure our economy works for every American," he said, is "why I ran for president. It was the center of last year's campaign. It drives everything I do in this office." If that's true, then his presidency hasn't been particularly successful. Now granted, it's not as though he hasn't been awfully busy. And he still has some notable achievements in this area, none greater than the Affordable Care...

Plan for Robotification of Everything Proceeding Apace

In the late 19th century, major American cities began installing networks of underground pneumatic tubes between post offices, enabling them to whisk hundreds of letters back and forth at speeds up to 35 miles per hour, with the satisfying thurp sound as an added bonus. Most of the systems were dismantled in the 1920s, but somehow New York's managed to stay in use until the 50's ( here's a description of this odd bit of postal history). Sadly, the dream of universal pneumatic tube delivery to the home was never achieved. But in a 14-minute ad for Amazon that was cleverly staged as a report on 60 Minutes ("If you can do this with all these products, what else can you do?" gushed Charlie Rose on the floor of a fulfilment center. "You guys can organize the world!"), the company revealed the future of package delivery: drones. It isn't as though they're the first ones to have thought of this; people have been making jokes about things like pizza-delivery drones for a few years now. But as...

The People's Court?

If you want to see where the problems of unaffordable housing and low wages and poor education play out every day, go to Detroit's 36th District Court. 

Associated Press
*/ Associated Press Detroit's 36th District Court T he first time I went to Detroit’s 36th District Court, I didn’t know the drill. Most people don’t know the drill the first time they go. A lawyer I’d met agreed to accompany me. He went in the side door, reserved for attorneys and court staff. I joined the long line at the main entrance, waiting to pass through the metal detectors and have my bag scanned. No cell phones, the guard told me. Put it in your car. I waved the lawyer back outside. He was due in court, and his car was blocks away. Give me the phone, he said. I’ll bring it in. I returned to the line. You can’t bring in that hair clip, the guard told me. Just throw it out, I said. I scooped my bag off the belt and joined the lawyer, who was standing where the entryway carpet meets the linoleum, near a line of people snaking through a rope maze, waiting to pay tickets. I was intimidated and upset, and I’d been at the 36th less than five minutes. The lawyer and I rode the...

Europe's Miserable Credit Score

Without access to credit, the European South is unlikely to bounce back anytime soon.

AP Photo/Michael Probst,File
E uropean Central Bank president Mario Draghi surprised markets last Thursday by cutting the Bank’s benchmark interest rate to a record low 0.25 percent (as low as the federal funds target rate in the U.S.). Explaining his decision, Draghi—the person who deserves most of the credit for the lull in the euro crisis over the past 15 months—noted that “monetary and, in particular, credit dynamics remain subdued” and that monetary policy must remain accommodative in order to “assist the gradual economic recovery” taking hold in the Eurozone. In other words, monetary policy must remain extremely loose to prevent Europe from sliding into a Japan-style period of protracted stagnation. The Eurozone recovery, which materialized in the second quarter of 2013 after a year-and-a-half of double-dip recession, is weak and, more importantly, uneven— as the head of the ECB is well aware. While Germany and Finland grew 0.7 percent quarter-on-quarter and France followed closely behind with 0.5 percent,...

Krugman Boots One

Paul Krugman has played an indispensable role challenging the conventional wisdom during the financial crisis and the slump that followed. He has been proven right again and again in his brilliant debunking of austerity as the cure for recession. Therefore, it was astonishing to read a rare, truly wrongheaded Krugman column in Monday’s New York Times . The offending column is titled “ A Permanent Slump? ” In it, Krugman proposes that something fundamental—something structural—has changed in the economy so that the new normal is what economists call “secular stagnation,” or as Krugman puts it, “a persistent state in which a depressed economy is the norm, with episodes of full employment few and far between.” As I read through the column, I kept waiting for the pivot. Surely Krugman was setting up this claim as a straw man, the better to demolish it. But, no. Krugman evidently buys this view. Even worse, the expert whose research he cites in defense of this thesis is one Lawrence...

Poor, with Savings

B eing poor is expensive. A winter heating bill that comes due before the paycheck arrives can compel a trip to a payday lender who charges 350 percent interest. It takes the entire paycheck to pay off that loan in a week—emptying out the bank account and requiring yet another visit to the lender. A child who is too sick to go to school for a week may need her single father to stay home with her, costing him a quarter of his monthly income. He’s overdue on the rent and the bills, so he’s responsible for late fees as well. Even a few hundred dollars in a savings account could help low-income families weather such predictable but unavoidable crises—provided they have extra money to save. Their budgets are tight, and saving makes sense only if they’re not sacrificing food or child care in order to put money aside. Anti-poverty advocates have long known there could be a relatively cheap, simple way to help people avoid such trade-offs if the government structured savings plans tailored to...

Gillibrand Steps Up for Working Women

AP Photo/Carolyn Kaster
At the end of September, New York Senator Kirsten Gillibrand announced her Opportunity Plan promoting progressive economic policies for women. The plan includes Gillibrand’s proposed FAMILY Act. The legislation builds upon the 1993 Family Medical Leave Act (FMLA), which allows certain workers—public-sector employees or private-sector ones who have been employed for at least a year—to take unpaid leave for child care or health reasons. Under Gillibrand’s proposed legislation, all workers—no matter the size of their company, duration of their employment, or number of hours worked in the past year—would be able take up to 12 weeks of paid leave. Modeled after state additions to temporary disability insurance (TDI) programs in California, New Jersey, and Rhode Island, her plan would require 0.2 percent deposits of employee earnings to be matched by employer contributions in a Social Security Administration fund. Workers would then receive up to 66 percent of their earnings when they took...

The Supply-Side Economics of Abortion

AP Images/Rex C. Curry
AP Images/Rex C. Curry L ast June, Ohio Republicans quietly slipped a handful of abortion restrictions into the state’s budget, alongside provisions to invest in Ohio’s highway system and a new funding model for the state’s colleges and universities. Eight states, including Ohio, already require clinics that perform or induce abortion to have a “transfer agreement” with a local hospital so that patients can be transported quickly to a more sophisticated medical center in case of an emergency. The budget, which Republican Governor John Kasich signed into law with the abortion provisions intact, included an innovative new rule, making Ohio the first state to prohibit abortion clinics from entering into transfer agreements with public hospitals. Four months later, the new rule is already bearing fruit for its anti-choice architects. Ohio had 14 abortion providers at the beginning of the year; soon, it could be down to seven. Toledo’s two abortion clinics had their licenses revoked...

Will Amazon Swallow the Postal Service?

Don't worry, they only do this in Japan. (Flickr/Fugu Tabetai)
For a while now, the Postal Service has been telling us that they'd like to end Saturday mail delivery as a way to cut costs and deal with their ongoing financial difficulties. Congress isn't about to let that happen, so now they've gone the other way: they're going to start delivering on Sunday. But only packages. And only from Amazon. The natural response to this is, "Wait, what?" Since when does a single corporation get to commandeer an enormous government agency to use for its own profit-making purposes? What's next, are we going to just rename it the Lockheed Martin Department of Defense? Sell the naming rights to national parks? ("Welcome to the Doritos Locos Tacos Grand Canyon!") OK, it isn't as bad as all that. In fact, as long as they do this in a fair way—essentially for any company that wants it—it could be good for everyone. According to news reports, they're exploring similar arrangements with other companies. And the Postal Service does sometimes negotiate special...

The 40-Year Slump

To see interactive package, visit this article on a non-mobile browser or on our website . T he steady stream of Watergate revelations, President Richard Nixon’s twists and turns to fend off disclosures, the impeachment hearings, and finally an unprecedented resignation—all these riveted the nation’s attention in 1974. Hardly anyone paid attention to a story that seemed no more than a statistical oddity: That year, for the first time since the end of World War II, Americans’ wages declined. Since 1947, Americans at all points on the economic spectrum had become a little better off with each passing year. The economy’s rising tide, as President John F. Kennedy had famously said, was lifting all boats. Productivity had risen by 97 percent in the preceding quarter-century, and median wages had risen by 95 percent. As economist John Kenneth Galbraith noted in The Affluent Society , this newly middle-class nation had become more egalitarian. The poorest fifth had seen their incomes...

Between a Rock and a Polling Place

AP Photo/J. Scott Applewhite
AP Photo/Pablo Martinez Monsivais F ew things excite a political reporter more than polls. They're the sports statistics of the electoral grind, giving any argument that little extra oomph. For people not necessarily known for their numerical prowess, a cleverly placed percentage point is the perfect condiment for any story. Heck, polls can even be the story. Unfortunately, our enthusiasm for those alluring little numbers can end badly. In election off-season it's not so noticeable, with polls slowing to a relative trickle and our attentions focused elsewhere—or so far in the future that the ambitious dreams of Chris Christie and Hillary Clinton dancing in our heads outweigh any margins of error. But the polls are still there. Exhibit A: presidential approval ratings. Public-opinion polls released in the past few weeks have come together to cast Mean Girls -like aspersions on President Obama's popularity. According to today’s Gallup tracker, the president’s popularity is at 41 percent...

Fruits of Republican Folly

AP Images/J. Scott Applewhite
The Republicans badly damaged themselves with their contrived government shutdown and debt crisis, but it remains for the Democrats to drive home their advantage. Will they? Based on the cost to the Republican brand and the pressure from corporate elites not to harm the economy, the days of shutdowns and games with the debt are probably over for the foreseeable future. If the Tea Party faction tries to repeat these maneuvers, House Speaker John Boehner would likely permit a free vote again, and enough Republicans would vote with Democrats to keep the government open. The Republicans seem hopelessly split between a Tea Party faction that relishes governing crises and a more mannered corporate faction that kills government softly. But the GOP is still one party when it comes to destroying government as a constructive force in the economy and society. Since Barack Obama took office, the two Republican factions have complemented each other in a successful “good cop, bad cop” effort to...

Be Our Guest Worker

A look at the uncertain existence of the legal migrant farmworkers that the agricultural industry relies on for cheap labor. 

AP Images/Eric Risberg
AP Images/Eric Risberg L uis Perez sits up on the edge of his bed, a stiff cot mattress resting on a flimsy metal bedframe a few inches above the concrete floor. He’s in the 120-square-foot cinder block walled room that he shares with a fellow migrant worker in Angier, North Carolina. “The television and coffee maker, that’s all his,” Perez says, pointing toward a corner where a mini-refrigerator sits. A half-empty bag of rice slouches on top. “I know he’ll take those back to Mexico, but I don’t want to carry stuff like that with me. Or waste my money at Wal-Mart.” He smiles broadly and laughs. With the door closed, that smile seems to be the only light in the room. Perez is legally employed through the federal H-2A visa program, which allows foreign workers to be hired to work seasonally in U.S. agriculture. Each May for the past five years, Perez has boarded a bus in Mexico City, Mexico with about 20 other workers headed to North Carolina to plant and harvest crops until November...

From White Collars to Pink Slips

Americans have been told that a college education will help them avoid the fate of workers whose jobs have been shipped overseas. A new report pours water on that idea.

AP Photo/Wally Santana
AP Photo A t first glance, Kingston Technology doesn’t appear to have much in common with big auto manufacturers like General Motors (GM). Based in sunny Southern California, the computer-technology company makes small memory products and primarily employs white-collar programmers and designers. But Kingston and GM have at least one thing in common: They ship jobs overseas. Kingston recently handed out pink slips to 80 employees and moved its RAM and flash-memory production operation to China. “Our company has been, and continues to shift primarily production work from the U.S. to China,” Kingston wrote in a disclosure to the Department of Labor. But the company is also letting go of "finance, engineering, and IT positions." Outsourcing is usually associated with blue-collar jobs that require a high-school education or less. But an increasing number of workers in the technology industry with a bachelor’s degree or more—electrical engineers, computer designers, and audio and visual...

Bill de Blasio's Elements of Style

AP Photo/Seth Wenig
Jenny Warburg W hen he wins New York City's mayoral election today, Bill de Blasio will have succeeded in branding himself the next big thing in progressive politics. But it remains to be seen which de Blasio shines through over the next four years: the former Hillary Clinton operative who admires neoliberal Governor Andrew Cuomo and is friendly with the real-estate industry, or the activist lefty who got arrested protesting the closure of a Brooklyn hospital and has promised to take on income inequality and the New York Police Department's sprawling anti-terrorism apparatus. "The aspiration is to be fundamentally transformative," says Professor John Mollenkopf at The City University of New York's Center for Urban Research. "He really does want to see how New York City can become less unequal and more capable of promoting upward mobility. But assuming things go the way the polls suggest, he still faces an enormous challenge." In particular, de Blasio will have to muscle through an...

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