Economy

Will the Fed Kill the Recovery Again?

(Photo: Wikimedia Commons/AgnosticPreachersKid)
(Photo: Wikimedia Commons/AgnosticPreachersKid) The Marriner S. Eccles Federal Reserve Board Building in Washington, D.C. This article originally appeared at The Huffington Post . T he Labor Department reported that the economy added 295,000 payroll jobs in February, the 12th straight month of job creation of better than 200,000 a month. And the Dow Jones Industrial Average promptly dropped by nearly 300 points. What gives? Do capitalists hate workers? Well, perhaps; but the immediate explanation is concern about the Federal Reserve. If unemployment keeps falling, the Fed is more likely to raise interest rates. And if the Fed raises rates, that's bad for the stock market because bonds start to be a better investment than stocks; and the expectation of flat or declining stock prices feeds on itself and sets off a wave of stock-selling. Supposedly, the assumption that the Fed will raise rates in the not-too-far-distant future has been already "priced in" to share prices. But that's...

Markets, States, and the Green Transition

To get renewable energy technologies into broad use, government needs to promote both supply and demand. Markets are too risk-averse.

(AP Photo/U.S. Army)
(AP Photo/U.S. Army) This solar array at White Sands, New Mexico, is the largest of the U.S. Army's solar photovoltaic systems. The $16.8 million project includes nearly 15,500 sun-tracking solar panels spread across 42 acres. This article appears as part of a special report, "What the Free Market Can't Do," in the Winter 2015 issue of The American Prospect magazine. Subscribe here . I f you believe in the perfect efficiency of free markets, then any government intervention, by definition, has to make things worse. Evidence is of no consequence. I once participated in a debate on innovation with two panelists from two of Washington’s most market-oriented think tanks. When I pointed out that a government program—the Department of Defense’s Advanced Research Projects Agency (DARPA)—had created the Internet, my opponent was hardly fazed. He responded, in effect, by saying we don’t know whether the private sector might have done it faster and better had the government not been interfering...

Saving Obama from a Bad Trade Deal

Republican intransigence may have saved the president's legacy—from himself.

(AP Photo/Evan Vucci, File)
(AP Photo/Evan Vucci, File) In this June 11, 2013, photo, President Barack Obama speaks in the East Room of the White House in Washington, prior to a trip to Europe for a Group of Eight summit of major Western democracies, where the proposed Transatlantic Trade and Investment Partnership with Europe was be a top item. The deal is touted as a means of boosting growth and jobs by eliminating tariffs and other barriers, but those expectations are unlikely to be fulfilled in the deal, which would benefit corporations far more than governments or citizens, which would likely be hurt. P lans to rush fast-track authority for two trade deals for a quick House and Senate vote abruptly broke down on Tuesday. The White House was hoping to put the vote to Congress as early as this week. But Republicans wanted to see more details of one of the deals, which addresses trade with Pacific nations—before agreeing to a fast-track vote. Democrats who favored the deal were seeking some concessions to...

The Perils of Privatization

When a public function is privatized, the result is a muddled middle ground.

(AP Photo/Gerry Broome)
This article appears as part of a special report, "What the Free Market Can't Do," in the Winter 2015 issue of The American Prospect magazine. Subscribe here . O ne November morning in 2004, three U.S. military men boarded a small turboprop plane at Bagram Air Base near Kabul for a two-and-a-half-hour flight to Farah, a base in western Afghanistan. They were Lieutenant Colonel Michael McMahon, Chief Warrant Officer Travis Grogan, and Specialist Harley Miller, the only passengers on Flight 61. The flight was operated by an affiliate of Blackwater, the private military company under U.S. contract for air transport of mail, supplies, and troops. Forty minutes after takeoff, flying far north of the customary route from Bagram to Farah, the plane crashed into the side of a mountain. McMahon, Grogan, the pilot, co-pilot, and the mechanic apparently died instantly. At the time, McMahon was the highest-ranking U.S. soldier to die in the war. Miller, though he suffered internal injuries, may...

CPAC Labor Panel Does GOP No Favors in Outreach to Latinos, Women

Organizing among fast-food workers and home health-care aides has clearly gotten under the skin of anti-labor leaders—even as they boast of another anti-union triumph in Wisconsin.

(Photo: Ron Sachs / CNP via AP Images)
(Photo: Ron Sachs / CNP via AP Images) Governor Scott Walker, Republican of Wisconsin, speaks at the Conservative Political Action Conference (CPAC) at the Gaylord National at National Harbor, Maryland on Thursday, February 26, 2015. He's expected to sign new anti-union legislation, passed by the Wisconsin Senate on the day before, into law if, as is likely, the bill passes the state assembly. O n February 26, day one of the Conservative Political Action Conference (CPAC) in National Harbor, Maryland, a panel convened on the state of the labor movement. To describe the tone of presenters as triumphant would be an understatement. At the Thursday afternoon breakout session titled “There’s No ‘I’ in Teamsters: Obama’s Bow to Big Labor Bosses,” panelists discussed a long list of topics, ranging from the salaries of top union leadership to “pernicious” attacks on franchisers of fast-food restaurants, whose workers have taken to the streets to demand predictable schedules and livable wages...

CPAC 2015: Right-Wing American Dream Kind of Crappy

Republican politicians are rarely shy about expressing some hatred of the government, and Mia Love is no exception.

(Photo: C-SPAN)
(Photo: C-SPAN) (L-R) Raffi Williams of the Republican National Committee, Charlie Kirk of Turning Point USA, U.S. Representative Mia Love and U.S. Senator Ben Sasse, appear on a panel about millennials and the American dream at the Conservative Political Action Conference on February 26, 2015. W hat is the American dream? Is it owning a house and having a job you love? Perhaps you want to be able to have children and send them off to school? Well, this year at the annual Conservative Political Action Conference, members of the Republican Party are promising to help you make your dreams come true. On Thursday morning, CPAC—an annual gathering at which a broad range of right-wing constituencies are represented—officially started as presidential hopefuls, political pundits, conservative activists and college students filled the Gaylord National Convention Center at National Harbor, Maryland, just outside of the nation’s capital. Because both political parties go through great lengths to...

Christie Blusters His Way Through CPAC Appearance

Christie’s bluster has some appeal, but there’s only so long that he can use it to avoid owning up to some of his massive leadership failures.

(Photo: C-SPAN)
(Photo: C-SPAN) N ew Jersey Governor Chris Christie wasn’t going to let something like record-low approval ratings get him down as he took the stage Thursday afternoon at CPAC’s annual gathering in National Harbor, Maryland. Exuding that Sopranos-style confidence that’s earned him notoriety, Christie, sitting on the CPAC stage for an interview with conservative radio talk-show host Laura Ingraham, dismissed the idea that, compared to other potential presidential candidates in the crowded Republican field, he’s not well-positioned to run for president. (A January survey conducted by Bloomberg Politics and the Des Moines Register showed Christie was the first choice candidate among just 4 percent of Iowa Republican caucus-goers .) Asked by Ingraham if such numbers disturb him, Christie retorted, “Uh, is the election next week?” He continued: “I’m not worried about what polls say 21 months before [the election],” going on to point out that he won gubernatorial races twice in a blue state...

Why Markets Can't Price the Priceless

It takes government planning to promote the rational conservation and use of water.

(AP Photo/Wichita Falls Times Record News, Torin Halsey)
(AP Photo/Wichita Falls Times Record News, Torin Halsey) A public works wastewater reuse project accounts for approximately half of the water used daily by Wichita Falls, Texas. This article appears as part of a special report, "What the Free Market Can't Do," in the Winter 2015 issue of The American Prospect magazine. Subscribe here . W ater sources for many Southwestern cities such as Las Vegas and Phoenix are drying up. Meanwhile, most Eastern cities have ample supplies but decaying infrastructure that can’t handle the more frequent and severe flooding brought on by climate change. The Cato Institute and Reason Foundation are part of a libertarian movement arguing that market pricing of water could solve both problems. But water, as a public good, can’t just be left to private markets, or we will have billionaires watering lush lawns while other citizens have dry taps. Privatizers are also notorious for underinvesting in the infrastructure needed both to supply fresh water and to...

Failed Theory Posed by Wall Street Dems Puts Hillary Clinton in a Bind

The Hamilton Project, led by the presumed presidential candidate's adviser Robert Rubin, serves up a prescription for the middle class that won't help much—and defies the recommendations of her friends at CAP.

(AP Photo/Lynsey Addario)
(AP Photo/Lynsey Addario) Hillary Rodham Clinton speaks with former U.S. Treasury Secretary Robert Rubin at Columbia University Wednesday, Sept. 27, 2000, in New York. T here was a time where it was plausible to argue that more education and innovation were the primary solutions to our economic problems. But that time has passed. You cannot tell that, however, to the Wall Street Democrats and their Hamilton Project at the Brookings Institution. They’re not ready to change just yet, even though most of the Democratic Party has. This shift was signaled by a recent report by the Center for American Progress (CAP) Commission on Inclusive Prosperity, which is co-chaired by Lawrence H. Summers, who served as Treasury secretary in the Clinton administration, and as chairman of the Council of Economic Advisers in President Barack Obama's first term. The report calls for full employment (a "high pressure economy," as Summers calls it), a more welcoming environment for collective bargaining,...

A Talent for Storytelling

Rick Perlstein tells how Reagan imagined his way into the American psyche.

(AP Photo)
This book review is from the Fall 2014 issue of The American Prospect magazine. Subscribe here. Simon & Schuster The Invisible Bridge: The Fall of Nixon and the Rise of Reagan By Rick Perlstein 880 pp. Simon & Schuster $37.50 I n 1959, as the Cold War heated up and the economy cooled down, President Dwight Eisenhower received a letter from World War II veteran Robert J. Biggs. Tired of hearing the president explain the complexities of the modern world, Biggs begged Eisenhower to lead the nation with firm assertions rather than “hedging” and “uncertainty.” The former general responded that such guidance by authority was imperative in a military operation but fatal in a democracy. Self-government demanded that men reject easy answers and instead carefully weigh the often contradictory facts about great issues facing the nation. Just as Eisenhower did, Rick Perlstein’s new book, The Invisible Bridge: The Fall of Nixon and the Rise of Reagan , illuminates the deadly attraction of...

Will E.U. Leaders Wreck Europe’s Economy to Teach Greece a Lesson?

(AP Photo/Petros Giannakouris)
(AP Photo/Petros Giannakouris) Pro-government protesters passes in from of a banner outside Greece's parliament to support the newly elected government’s push for a better deal on Greece’s debt, in central Athens, on Sunday, February 15, 2015. The protests held in Athens by around fifteen thousands supporters of the left-wing Syriza party as the new Greek government on Monday, February 16, presented its proposals to skeptical rescue lenders at a euro zone finance ministers' meeting in Brussels. G reece and the European Union are now in a final showdown. And if you had to place odds, the likelihood is that the stubbornness and folly of Europe’s senior leaders will create a catastrophe for both Greece and the E.U. On Monday, at a key meeting of finance ministers in Brussels, the Greek negotiators walked away from a demand that Greece recommit to the terms of the current austerity program as the precondition for extending talks on possible easing of the terms. In return, E.U. leaders had...

Will the Recovery Finally Translate into Better Wages?

(iStockPhoto/© JLGutierrez)
whitehouse.gov Federal Reserve Chairman Janet Yellen and President Barack Obama. This article originally appeared at The Huffington Post . T he good news about the economy's improved job creation dominated the weekend's headlines. Many commentators concluded that the economy is finally shaking off the effects of the financial collapse of 2008 and the long period of stagnation that followed. The creation of 257,000 new jobs in January is surely good news, as is the long-awaited increase in wages, reported at half of one percent in that month. Even so, the one-year increase in wages has been only 2.2 percent, barely more than 1 percent when adjusted for inflation, and it's been a long time since most workers have seen substantial raises. In this recovery, the economy has been creating more low-wage jobs than high-wage ones. The shift from standard payroll jobs to temp and contract work continues. The uptick in the measured unemployment rate, from 5.6 percent to 5.7 percent, suggests...

Index: The 1 Percent Cleans Up in Florida and the South

Since 2009, Florida's elite captured all of the state's income growth—and then some.

Institute for Southern Studies
Institute for Southern Studies In 39 states, the wealthiest 1 percent captured at least half of the income growth between 2009 and 2012. In 17 states of those states, the 1 percent captured it all. This article originally appeared at Facing South , the website published by the Institute for Southern Studies. Percent of U.S. states that have experienced widening income inequality in recent decades: 100 Of the 50 states, number where the wealthiest 1 percent captured at least half of all income growth between 2009 and 2012: 39 Number of states where all of the income growth during that period went to the wealthiest 1 percent: 17 Number of those dramatically unequal states that are in the South: 5 * In Florida, among the most unequal states, percent change in the top 1 percent's income from 2009 to 2012: +39.5 Percent change in income for Florida's bottom 99 percent in that period: -7.1 Percent share of total income growth captured by Florida's wealthiest: 259.9 Income growth captured by...

To Check Power of Greedy Bosses, Workers Need to Bargain in New Ways

When workers' power is diminished and people’s voices are shut out of the workplace, job quality and job standards suffer.

(AP Photo/Seth Perlman)
(AP Photo/Seth Perlman) Tanya Melin of Chicago, right, Service Employees International Union members, home care consumers, workers, and allies rally in support of home care funding at the Illinois State Capitol Tuesday, Feb. 28, 2012 in Springfield, Illinois. W ork looks a lot different today than it did 100, 50, or even 10 years ago: It’s faster, it’s automated, and it’s complex. We used to pin these shifts on globalization; now we’re tying everything to the rise of an on-demand sharing economy. And while it may seem like progress in terms of how quickly and cheaply we can get things, we can’t forget that it’s happening at the expense of regular people and their ability to work full time and earn a decent living. That’s because, for far too long, greedy CEOs have held all of the power, giving those of us doing the work very little room to make our voices heard. Corporate interests have been on a decades-long bender to depress wages, benefits and job standards, trapping you and me and...

Here's How to Achieve Full Employment

If we don't get there, then many communities—particularly those of color—will be left out of the recovery.

(AP Photo/Mary Altaffer)
iStockPhoto The following is the testimony of Economic Policy Institute President Lawrence Mishel before the U.S. House Committee on Education and the Workforce hearing on “Expanding Opportunity in America’s Schools and Workplaces” on February 4, 2014. It originally appeared at the EPI website , where you can also find the source material . I t is encouraging that there is now widespread agreement across the political spectrum that the key economic challenge is middle-class income stagnation. To address this stagnation we must confront two underlying trends. The first is to address the ongoing but incomplete jobs recovery from the financial crisis that Wall Street inflicted on the global economy. The second trend is the stagnation of wages for the vast majority of workers since the late 1970s, an era of “wage suppression.” That wage trends lay at the heart of income stagnation is just common sense. After all, middle-class families rely almost completely on what they earn from their...

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