On TAP: Kuttner + Meyerson

Dayen

The House Border Supplemental Debacle. While we’ve spent the past two days watching candidates who want to win the next election, we’ve neglected a disaster from the winners of the last election. For the past week, the House has been working on a $4.5 billion emergency border supplemental appropriation, responding to the inhumane conditions in migrant holding cells. Progressives wanted to condition aid so it only went to improving standards for migrants, and wasn’t stolen by the president to finance deportation raids or a border wall.

The Progressive Caucus worked closely with Nancy Pelosi to craft those conditions. Alexandria Ocasio-Cortez played the inside game to improve the policy. The bill would have specified the delivery of food, water, sanitary items, and medical care to migrant children, would have limited stays in holding cells to 90 days, and would have terminated the contracts of all for-profit management companies who violated the standards. The process was hard-fought and progressives didn’t get everything, but they advanced the policy.

And then it all fell apart. Senate Republicans neglected the House bill and got widespread Democratic support for its own $4.6 billion measure, which had none of the conditions to limit the funding to emergency aid, and even earmarked some of it for continuing President Trump’s draconian immigration policies, including funding for ICE that the House left out, and money for the Pentagon likely to go to tent camps to warehouse more migrants.

With Chuck Schumer failing to coordinate with Pelosi and enabling such big bipartisan support, McConnell could just jam the House and leave town, telling Pelosi to take it or leave it. She took it. The last straw was a rebellion by House centrists led by Josh Gottheimer, who organized enough votes to block the House from putting back in the safeguards. Pelosi caved, putting the Senate bill on the floor for an up or down vote. It passed strongly, with 129 Democrats supporting it.

This was an all-around debacle. Schumer did nothing to back up the Democratic position. The centrists fought to give Trump a blank check. And Pelosi got herself backed into a corner to such a degree that she simply accepted a bill her majority had no hand in writing. House Democrats had leverage over the process that they squandered. In the end, a week of disgusting images at the border that repulsed a nation ended with Trump getting more money to carry out the same abuses, without accountability.

It calls into question whether last November’s victory signified any real change, and raises ominous questions about next year’s efforts. If Democrats don’t have the backs of children sleeping in cages, whose backs will they have?

Kuttner

When the Grown-Up in the Room is Trump. For two years, the grown-ups in the room restrained Trump. He managed to get rid of all of them—an attorney general in Jeff Sessions who wasn’t willing to do all of Trump’s bidding; some White House chiefs of staff such as Reince Priebus who acted to protect him from himself; the traditional generals who served as homeland security secretary, and national security adviser, and secretary of defense. 

Trump managed to get rid of them all. Now he has in Bill Barr, Mike Pompeo, and John Bolton senior advisers who are even more reckless than he is. Plus Mick Mulvaney as White House chief of staff, and Steve Miller as all purpose wing-nut.

So last week, we were treated to the spectacle of Trump reining in his advisers. And almost behaving like a normal president as he sought a diversity of views before pulling the trigger on war with Iran. 

Thankfully, Trump watched Tucker Carlson on Fox, warning him that an Iran war would be fatal to his re-election campaign, rather than tuning in to Sean Hannity egging him on. In the Trump era, this passes for restraint. 

Meyerson

Why Willie Sutton Is a Sounder Guide to Taxing Wealth Than Chuck Lane. Today, the Economic Policy Institute and the Institute for Policy Studies are holding a conference entitled “Taxing the (Very) Rich,” featuring such luminaries as New York Times columnist Paul Krugman, author Barbara Ehrenreich, Senator Chris Van Hollen, Congresswomen Pramila Jayapal and Jan Schakowsky, and a veritable minyan of economists. Moreover, a number of certifiable gazillionaires, including George Soros and Abigail Disney, just released a letter calling for a wealth tax, a cause that their fellow gazillionaire Eli Broad also embraces in a Times op-ed today. In his article, Broad argues, persuasively, that all the charitable giving that he and his peers have undertaken, and all the progressive economic policies that his state (California) and city (Los Angeles) have enacted, still fall woefully short of remedying our stratospheric levels of economic inequality. Taxing the nation’s great fortunes, he concludes, is required if we are ever to seriously seek to rebuild our middle class.

In an endeavor to halt this rush to social decency and economic viability, a host of right-wing and centrist commentators have punditized that wealth taxes don’t work. In today’s Washington Post, columnist Chuck Lane argues that the Nordic countries tried wealth taxes and then abandoned them (well, actually, Norway didn’t; it still has one), and that expanding social programs requires major tax increases on the middle class. He advances this argument the better to pooh-pooh Senator Elizabeth Warren’s proposal to levy such a wealth tax.

What Lane’s argument misses is that the level of income and wealth inequality in the United States is many times higher than those in the nations of the Nordic north. Comparing the Gini coefficients (in which zero equals perfect equality of income and 1 equals all of a nation’s income going to just one person) of the Scandinavian nations to that of the U.S., the coefficients of the four Scandinavian nations range from 0.25 to 0.28, while that of the U.S. is 0.39. The Nordics are not nations where median incomes (particularly when their generous social benefits are factored in) have stagnated since the 1970s, as is lamentably the case here. Nor is ours a nation where the great mass of taxpayers are accustomed to getting their full money’s worth in social benefits, as most Nordic taxpayers are. Polling shows that taxing wealth is a popular, and hence, potentially enactable, idea, should an anti-plutocratic government emerge following the 2020 election. A lot more popular and enactable than raising taxes on the middle class.

In short, neither the economic nor the political preconditions for levying a tax on great wealth in the United States are comparable to those in Scandinavia. A look at our nation’s comparative levels of inequality and the political perceptions shaped by those levels suggests that Broad and his cohort are right. We should tax wealth here for many reasons, most particularly that which Willie Sutton advanced in explaining why he robbed banks. “That’s where the money is,” he said. Indeed.

Kuttner

Trump: The Wrong Version of the Right Policy, Take Two.  As we’ve seen, Trump has moved into the vacuum on trade policy left by globalist Democrats and Republicans who care more about corporate interests than about working Americans. Trump has also made far more of an issue of China’s abusive mercantilism than previous administrations of either party. 

The trouble is that Trump is royally screwing up the delicate carrot-and-stick diplomacy with Beijing, and may yet roll over for token concessions by the Chinese that he can depict as a great victory.

That’s Exhibit A. Exhibit B is interest rates. 

Trump has been crudely strong-arming the Federal Reserve to cut rates. He’s threatened to fire Fed Chair Jerome Powell, even though the president lacks the power to do that. But his threats have had some effect. Interest rates have stayed very low and Powell has indicated that they will be cut further if the economy encounters headwinds.

Other presidents have played games with the Fed, though usually with far more delicacy and finesse. But Trump has a point. The Fed, with its built-in creditor bias, would rather risk a recession than the faintest whiff of inflation. 

The Fed chronically errs on the side of overly tight money at the expense of the real economy. The main exception to this pattern was in the aftermath of the 2008 financial collapse, when the Fed opened the spigots. Why? Because in these dire circumstances, the banks, playing against type, were the advocates and recipients of the cheap money.

But in the aftermath of the collapse, the Fed reverted to its own type and tightened money too quickly after 2010, needlessly slowing the recovery, even as Fed economists fretted that the inflation rate was too low. So once again, even if Trump violates the usual norms of relations between the president and the supposedly nonpolitical (read pro-Wall Street) Fed, Trump is right to warn the Fed to keep rates low. 

His action may be totally self-serving—having a strong recovery in the election year—and it may be short sighted. But once again, as on trade, he has stolen the Democrats’ clothes.

Left-Democrats have criticized the Fed for its overly tight money bias, but the centrist Democrats and their financial advisers who have held the White House mostly share the Fed’s excessive inflation phobia.

For the most part, Trump is a corporate stooge, as well a congenital liar, an aspiring dictator, and a corrupt kleptocrat. But every once in a while, his populism has real content. That’s another of the things that makes him so dangerous.

Meyerson

Iran War Justification: Repurposing an Old Lie. It’s not just Donald Trump’s ongoing rants about Hillary Clinton’s emails—which featured prominently in his declaration of candidacy for re-election earlier this week in Orlando—that suggest a president and administration waging the battles of yore. Now, their rationalizations for going to war against Iran are the same spurious ones that the George W. Bush administration used to justify going to war against Iraq in 2003. Just as the Bushies claimed that Saddam Hussein’s regime was conspiring with al-Qaeda, so the Trumpettes are arguing that the Ayatollah’s regime is also conspiring with al-Qaeda.

Those with fond memories of how we got ourselves stuck in Iraq for well over a decade will recall that on 9-11, Bush started insisting Iraq was behind the attack, though it was clear that the culprit was al-Qaeda. Undeterred, the Bushniks and their friends in the media insisted that al-Qaeda and Iraq had been in cahoots. Number-one media friend was New York Times columnist William Safire, who wrote close to two dozen columns insisting that an Iraqi official had taken lunch with an al-Qaeda official in Prague before the attacks, though his claim was soon disproved, and no evidence of Iraqi-al Qaeda ties has turned up in the 17 years since. 

Today, there are even more elemental reasons why an al-Qaeda-Iran alliance is improbable. Al-Qaeda is a fundamentalist Sunni organization that views Shiites as apostates and infidels, and Iran happens to be a Shiite theocracy. Al Qaeda has its roots in Saudi Arabia, which is Iran’s mortal enemy. 

Still, since the al-Qaeda lie helped push us into a war once, that’s two reasons why the Trumpistas probably are invoking it: First, it helped produce the policy that its spinners sought, and second, it was a lie—both good things in the universe of Donald Trump.

Kuttner

The China End-Game. We are now familiar with Trump’s signature style: Create a Trumped-up crisis, pull back from the brink at the 11th hour, and pose as the hero who saved the day.

There is only one thing wrong with this method. When applied to genuinely thorny policy challenges, it only simulates progress and leaves genuine problems unresolved, and often worse for the saber-rattling. 

Trump’s elaborate dance with North Korea, even if it averted war, did nothing to address that nation’s increasing nuclear capability. Likewise with Iran, while Trump may avoid outright war, by renouncing the nuclear deal he has emboldened Iran’s hard-liners and has exacerbated tensions.

In the case of China, where the long-delayed summit meeting with President Xi Jinping is now set for next week, the smart money seems to think that Trump will pull back from the brink yet again. The stock market, after plunging in late May, is back to near its peak.

Yet the problems with China’s predatory trade model are real. Containing its impact on the United States will require a complex array of sticks and carrots, not just the threat or execution of tariffs. If Trump and Xi cut a face-saving deal that doesn’t change China’s model in any serious way, the winner will be the stock market and President Xi, and the loser will be the United States.

Meyerson

To the Barricades! How to Counter Trump’s New Deportation Orders. Inasmuch as virtually every policy Donald Trump implements is grotesque, it’s a good thing he telegraphs his punches.

Last night, the Tweeter-in-Chief gleefully tweeted that his immigration goons would begin deporting “millions” of undocumented immigrants next week. The Supreme Three-Year-Old isn’t much for keeping secrets; be thankful he wasn’t president on the eve of D-Day.

Now that ICE agents are under orders to run amok again, that means they’ll be once more separating parents from children—a practice not confined to families arriving at the border. They’ll be taking exemplary as well as non-exemplary humans from their homes, workplaces, and communities, incarcerating and sending them to their countries of origin where their lives may not be worth the proverbial plugged nickel. 

Which means that Americans of good will need to mobilize as well. Civilly disobedient blockades of ICE offices and the jails and concentration camps where detainees are held, police non-cooperation in sanctuary cities, attorneys on call to represent the detainees—all these and more need to go into overdrive, now that our president has tipped us off to another Trumpian assault on civil society. As concerned citizens and public officials in antebellum Northern states tried and sometimes succeeded in thwarting the Southern thugs—some of them federal officials—who kidnapped fugitive slaves to return them to bondage, so the concerned citizens and public officials in our immigrant-rich cities today need to go on high alert. In the 1850s, as I wrote last year, Northern states passed their own version of sanctuary legislation denying federal jurisdiction over escaped slaves, and citizens filled the streets to protest and occasionally stop the seizure of fugitives.  

Today, another invasion of the body snatchers is set to commence. Americans, to the barricades!

Dayen

Facebook World Domination Announcement Set for Tuesday. Tomorrow, Facebook is set to unveil its own currency, because that’s a thing companies do now. It’s a throwback to 19th-century coal and lumber companies that would pay workers in scrip. But in this case, Facebook has 2.5 billion users instead of a few thousand laborers, giving it the potential to dominate the payment system.

The cryptocurrency, known as Libra, got a huge boost last week, when over a dozen companies agreed to back it, including Visa, MasterCard, PayPal, Stripe, and Uber. Unlike bitcoin, Libra will be pegged to various international currencies, so it theoretically won’t swing widely in value (the term for this, which you don’t need to know, is a stablecoin). Facebook users could share the coins with each other, purchase items on Facebook, or even on other websites that agree to take it. 

Technically speaking, Facebook won’t control Libra. But you can easily imagine a world in which products on Facebook only accept Libra as payment, or paying with Libra grants access to discounts. And of course, tracking Libra purchases makes the data Facebook uses for its real business—serving ads—even more powerful. Adding a payment revenue stream to the ad revenue could expand Facebook’s control over the economy.

As Facebook is global, Libra would serve as a global currency, usable in countries without needing to exchange dollars for pesos or euros. That raises significant questions for monetary policymakers and banking regulators. If Libra is backed by a basket of currencies, which country would actually be responsible for storing the reserves? And what if one of the currencies collapses, and citizens of that state plow their money into Libra? Will a global stablecoin facilitate hot money flows during a crisis and make things even more, well, unstable?

Facebook probably doesn’t care much about those questions. It clearly wants to emulate WeChat, the Chinese social media app with a payment option that has essentially replaced paper money in China. I have written before that payment systems represent the final piece for world domination by the tech giants. Getting the credit card networks involved in particular could make Libra the accepted next-generation payment architecture: It’s almost as if Visa and MasterCard are resigned to tech industry disruption. Wall Street analysts love the idea, even if it might render their employers obsolete.

The rest of us may ask whether we really want so much dependency on Mark Zuckerberg to buy groceries.

Meyerson

The Supreme Court of the Republican Party? Last Sunday, close to a million people jammed the streets of Hong Kong to protest pending legislation that would permit the government of mainland China to extradite Hong Kong residents for whatever constitutes “crimes”—actual or ideological—in the eyes of Xi Jinping’s government. Yesterday, Carrie Lam, the CEO of Hong Kong’s Beijing-dominated government, said that she would continue to advance the extradition bill through the city’s also Beijing-dominated legislature, despite the fact that the overwhelming majority of Hong Kong residents don’t want their justice system made an appendage of China’s. (At one million, the crowd that assembled Sunday constituted one-seventh of Hong Kong’s total population.) 

But Lam, though officially the CEO of Hong Kong, is actually a servant of Xi’s neo-totalitarian regime.

Lam isn’t the only powerful leader who serves a master distinct from the jurisdiction she’s supposed to serve. The five Republican justices on the U.S. Supreme Court may well be poised to dispel forever any thoughts that their loyalty is to the United States.

Later this month, the justices will rule on two landmark cases. The first concerns whether the 2020 Census will be conducted as the Census always has, tallying every person who lives in the U.S., or whether it will include a new question asking respondents to say whether or not they’re citizens, which is intended to reduce the number of immigrants, or households with immigrants in them, who answer. That, in turn, would reduce the recorded population of immigrant-heavy states like California—which is to say, reduce the number of seats Democrats will hold in the House of Representatives following the 2020 redistricting.

The second case concerns the legality of gerrymandering by state legislatures, which in this age of computer-assisted demographic precision has enabled Republicans to so cluster various groups that they dominate state legislatures and congressional delegations even in states where Democrats outvote them statewide. (North Carolina and Pennsylvania are among the prime examples.) Gerrymandering at this level negates two fundamental premises of electoral democracy: majority rule, and the ability of electors to select their representatives (which in a gerrymandered state becomes the ability of representatives to select their electors).

In short, the Gang of Five—Roberts, Thomas, Alito, Gorsuch, and Kavanaugh—could misshape the electorate and thwart majority rule to the long-term advantage of a group to which they’ve pledge their true loyalty: the Republican Party. If they deliver such rulings—and recent remarks by Justice Ruth Bader Ginsburg suggest that they may well—they will have continued a long line of major decisions intended to cement Republican rule in place, even if a clear majority of the nation favors the Democrats. These prior decisions include those in Janus (designed to weaken public employee unions, which often have the most extensive voter mobilization campaigns during election time), Shelby (which decimated the Voting Rights Act and thereby loosed a wave of Republican voter suppression), Citizens United (enhancing the role of big corporate money in elections), and the granddaddy of them all, Bush v. Gore—no explanation required. Each of these rulings gave a clear partisan advantage to the Republicans, and two more such decisions may be right around the bend.

So just as Carrie Lam actually represents mainland China rather than the entity she nominally serves as CEO, so the chief justice and four associate justices of the United States may actually have taken their real and binding oaths to the Republican Party. We’ll see soon enough.

Meyerson

A Great Union Threatens a Strike and Makes a Questionable Endorsement. As usual, the union of America’s hotel and (some) food-service workers is having an interesting week.

Earlier this year, UNITE HERE executed a brilliant, multi-city series of strikes at Marriott Hotels. Its members walked picket lines holding signs bearing the inspired slogan, “One Job Should Be Enough”—a reference to the fact that, in the high-cost cities where their jobs were located, some of them were compelled to work a second job after finishing a full-time shift at their hotel. The slogan resonated with the public and the press; the workers maintained a stay-off-the-job discipline; and the strike was settled with considerable wage hikes across the nation.

This week, the 11,000 UNITE HERE-member workers who prepare and deliver the food and drink to American, United, and Delta flights at the airports in 21 major cities are also threatening to go on strike, with strike authorization votes scheduled for the next two weeks. For this largely low-wage workforce, the union is demanding an hourly wage floor of $15 and more affordable health insurance. 

There’s a problem, though. The catering company employees’ right to bargain collectively was established not by the National Labor Relations Act but rather the 1926 Railway Labor Act, under whose terms they cannot legally strike unless given a go-ahead by the National Mediation Board, a majority of whose members are Trump appointees. They’re no more likely to get that go-ahead than Trump is to go through a day without tweeting insults.

Here’s where UNITE HERE’s extensive member involvement, socialization, and preparation makes a big difference. If unable to strike, the workers still could “work by the book,” and thereby slow down the process of getting food and drink to the planes, just as the summer travel surge starts surging. As well, it shouldn’t be that hard for the union’s public relations staff to convince both the public and the press that airlines that treat their passengers so shabbily also treat their workers shabbily, too. Such an action will be a test of the union’s vaunted mobilization capacities, but UNITE HERE is one of the relatively few unions that may be up to the challenge.

Meanwhile, in another part of the UNITE HERE forest, its New York hotel local today endorsed the presidential campaign of Mayor Bill de Blasio. The local is storied for winning excellent contracts for its members; it even provides its members and their families with its own medical care services, as Bob Kuttner once documented in these pages. It’s also known for making a number of political endorsements on the most transactional of criteria, all consequences to the general good to the contrary notwithstanding. Such were the considerations that lay behind its endorsement of Republican George Pataki for governor of New York (which had something to do, as I recall, with the union’s ability to organize workers at a tribal-owned casino). De Blasio, of course, is no Pataki; he’s been an excellent mayor, supporting groundbreaking policies for New York’s workers. Still, Bernie Sanders has been an excellent senator for Vermont’s workers, as has Elizabeth Warren for Massachusetts workers, Governor Jay Inslee for Washington state workers—you get the picture. What prompted the New York local’s endorsement of de Blasio isn’t his overall record on workers’ issues; it’s his stance against Airbnb’s incursions into the New York tourism market and its effect on hotel workers. 

Based on every poll under the sun, de Blasio is almost certainly beyond helping in the presidential contest—and if he does pick up any votes, it will likely be at the expense of Warren and Sanders, fellow lefties who, unlike Hizzoner, actually have a shot at winning the nomination. On the other hand, the New York local is not beyond mayoral helping in its fight to protect its members from the income-eroding specter of AirBnb. 

So it goes—another typical week at UNITE HERE.

Pages