Too bad George W. Bush is persona non grata among congressional Republicans. If he were less unpopular, they might find in the waning years of his presidency an example of what to do about a vexing issue facing them in 2016, an issue Senate Majority Leader Mitch McConnell called that “gosh darn” minimum wage.
In their bid to take over the Congress in 2006, the Democrats vowed to raise a federal minimum wage that had remained unchanged since the second term of the Clinton administration. After sweeping midterm victories in both chambers, congressional Democrats put the issue on their agenda, calling for an incremental increase from $5.15 an hour to $7.25 by 2009.
That wasn’t enough for Barack Obama, who vowed to raise the minimum wage to $9.50 by 2011 if elected president. His promise, however, came before the Great Recession cast a pall over many of his campaign promises. The minimum wage has remained $7.25 since he took office. (It is now higher in some cities and states; New York State recently raised it to $15 an hour in the New York City metropolitan area and $12.50 upstate.)
So the push to raise the minimum wage isn’t new. That’s a bit counterintuitive given the attention being paid to economic inequality, an issue that arose in the aftermath of the 2007 financial collapse. Even Republican contenders for the White House are obliged at least to pay lip service to the issue. And to be sure, a stagnant minimum wage is the bedrock of economic inequality. But the thread of the debate began during the second Bush administration, which was hostile or indifferent to the law, and allowed the purchasing power of the base wage to erode while the cost of living continued to climb or, indeed, soar. (To briefly illustrate, using 2013 dollars: if the minimum wage were $7.25 in New York City, the actual value would be about $4 an hour.)
What did President Bush do that could serve as a model for today’s congressional Republicans? First, two observations. One, Bush’s presidency was nearing historic levels of unpopularity by 2007. Two, voters tend to punish the party in power in hard times. The 2008 election was going to be rough for any GOP candidate.
But also keep in mind the nature of the business wing of the GOP. It is against wage mandates, because wages cut into profits. But the faction is also politically canny. It was willing to concede to demands for a higher minimum wage, if conceding weakened Democrats in 2008. Put another way: if Republicans had continued to resist raising the wage, then the wage issue may have become more potent for Barack Obama. So the business wing of the Republican Party — including 82 members of the House, all but three senators, and the president — held its nose and supported a wage hike.
The conservative wing of the GOP, on the other hand, is the opposite of canny. It does not see the wisdom of conceding on the minimum wage, even as the minimum wage has taken on more significance than it had a decade ago. Conservatives believe losing now means losing forever, and losing is inconceivable given the righteousness of their cause. Therefore, the more they resist raising the minimum wage, the more potent it will be for the Democratic Party’s nominee. As Harry Reid told The Hill yesterday: “If Republicans don’t do something about it, it’s a major issue.”
Reid was commenting on the most recent effort to exploit conservative intransigence. In the past, the Democrats called for $10.10 an hour. Yesterday, Senator Patty Murray introduced a bill raising the wage to $12 by 2020. The Raise the Wage Act, she said, would affect 38 million workers. Moreover, she was clearly relishing the moment. “I want to hear what the Republican presidential candidates have to say about this,” she said.
And they responded in predictable fashion.
Ted Cruz said the bill would be a “job-killing” disaster. Marco Rubio warned that workers would be replaced by robots. Scott Walker questioned the validity of wage mandates in general. Rand Paul said a base wage is good for young people but nobody else. And Jeb Bush, who most represents the interests of the business wing of the Republican Party, punted to the “private sector.”
You’ve got to wonder whom they think they are speaking for. According to a February poll by the Associated Press, 6 in 10 favor raising the minimum wage, including 40 percent of Republicans. In 2013, Gallup found more than 71 percent in favor, including half of Republicans. Last year, a Washington Post/ABC News survey found that 50 percent of respondents are more likely to vote for candidates who favor raising the minimum wage.
Clearly, the Republican presidential field isn’t speaking for the majority, or even for members of their party who see the good in increasing the wage. Jeb Bush is speaking for a business faction that fears higher wages eating into profits, while the rest is speaking for conservatives who believe compromise equals surrender.
The smart thing would be to give in now to prevent the minimum wage from haunting the Republican candidate later. But don’t hold your breath. On the occasion last summer when Mitch McConnell complained about the Democrats proposing to raise that “gosh darn” minimum wage (once again!), he added one more comment suggesting there’s no returning to the political pragmatism the George W. Bush administration exhibited in 2007.
“These people believe in all the wrong things,” he said.
By: John Stoehr, Managing Editor of The Washington Spectator; The National Memo, May 8, 2015
“Most Glaring Drawback Is He’s A Bush”: Jeb Bush Cannot Escape His Brother’s Undeniably Disastrous Presidency
Earlier this year, Mitt Romney had a Galadriel moment. He appeared to be briefly seized by a vision of himself as an all-powerful, world-striding President Romney, before turning away from temptation and settling for the plain old Mitt Romney he has always been. It was political theater at its most bizarre, a flack-driven frenzy that doubled as a flashback to the self-delusion that blinded the Romney 2012 campaign in its final days.
With Romney now out of the way, Jeb Bush has consolidated the support of the GOP’s moneyed class with surprising alacrity. As Politico noted last week, the contest for the Republican nomination was previously seen as a “free-for-all among a half-dozen or so viable candidates” but has since shifted to a game of catch-up, with a clear leader way out front who has a “bull’s-eye on his back.” He may soon be out of sight: The Washington Post reported that Bush is amassing so much money so quickly that his potential rivals “do not even claim they can compete at his level.”
The Republican primary process is a fearsome thing for any establishment candidate, but history shows that he (and it is always a he) will win in the end. None of this is good news for Bush’s would-be competitors, whether they be on the fringe (Rand Paul, Ted Cruz), slow starting out of the gates (Chris Christie), or Pawlenty-esque (Scott Walker, Bobby Jindal).
The problem for the GOP is that a Bush running in 2016 is almost as eye-rubbingly bizarre as another Romney campaign.
I’m not talking about Jeb Bush’s policies or his abilities as a campaigner (though for the most part he has been deft in avoiding the usual pitfalls and has handled the media well). I’m talking about his most glaring drawback: the fact that he’s a Bush. It seems too obvious to mention, but as Republican elites rally around his flag, it appears they need a reminder. Just a few years ago, the idea of another Bush running for president would have been laughable. Today, the party is so desperate for a winner that it is willing to entirely overlook eight disastrous years in the White House.
In early February, Jeb Bush said his brother was a “great president.” Maybe that’s just what a younger brother has to say to avoid seeming like a heartless backstabber. Then again: Really?
George W. Bush’s Iraq War was a horrible blunder — the worst foreign policy disaster since Vietnam. There was a brief moment at the dawn of the Arab Spring when conservatives were crediting Bush’s pro-democracy agenda for a wave of anti-authoritarian protests across the region, but you don’t hear them saying that anymore. Iraq was a really, really bad idea, and nothing has changed that.
Then there’s the economy. There are not many modern presidents who enjoy the dubious honor of overseeing a recession so bad that it compares only to the Great Depression. In fact, there is only one: George W. Bush. While it would be unfair to lay the entire economic collapse at his feet, it’s clear that the financial crisis stemmed from a stew of GOP policies, from deregulation to crony capitalism to overly prizing homeownership. Again, not great. Not even good.
Next up: the budget. Bush entered office with a budget surplus, then gave a huge chunk of it away to the rich. That’s not good. That’s very, very bad.
Then there’s all the rest of it: Katrina, Scooter Libby, torture, wiretapping, Dick Cheney, and on and on and on.
George W. Bush’s approval rating has improved since its 2008 nadir, but it doesn’t take a genius to figure out that it will plummet once the Bush years are relitigated in the context of a hypercompetitive presidential race in which another Bush is on the ballot.
To win a general election, Jeb Bush would have to come up with a way to disown his brother’s legacy — and so far he has only embraced it. That means that, should Hillary Clinton be the Democratic nominee, the 2016 election could very well come down to a contest between the 1990s and the 2000s.
Americans have fond memories of the 1990s. The 2000s? Not so much.
By: Ryu Spaeth, The Week, February 17, 2015
“Wall Street’s Threat To The American Middle Class”: Do We Really Need To Be Reminded About What Happened Six Years Ago?
Presidential aspirants in both parties are talking about saving the middle class. But the middle class can’t be saved unless Wall Street is tamed.
The Street’s excesses pose a continuing danger to average Americans. And its ongoing use of confidential corporate information is defrauding millions of middle-class investors.
Yet most presidential aspirants don’t want to talk about taming the Street because Wall Street is one of their largest sources of campaign money.
Do we really need reminding about what happened six years ago? The financial collapse crippled the middle class and poor — consuming the savings of millions of average Americans, and causing 23 million to lose their jobs, 9.3 million to lose their health insurance, and some 1 million to lose their homes.
A repeat performance is not unlikely. Wall Street’s biggest banks are much larger now than they were then. Five of them hold about 45 percent of America’s banking assets. In 2000, they held 25 percent.
And money is cheaper than ever. The Fed continues to hold the prime interest rate near zero.
This has fueled the Street’s eagerness to borrow money at rock-bottom rates and use it to make risky bets that will pay off big if they succeed, but will cause big problems if they go bad.
We learned last week that Goldman Sachs has been on a shopping binge, buying cheap real estate stretching from Utah to Spain, and a variety of companies.
If not technically a violation of the new Dodd-Frank banking law, Goldman’s binge surely violates its spirit.
Meanwhile, the Street’s lobbyists have gotten Congress to repeal a provision of Dodd-Frank curbing excessive speculation by the big banks.
The language was drafted by Citigroup and personally pushed by Jamie Dimon, CEO of JPMorgan Chase.
Not incidentally, Dimon recently complained of being “under assault” by bank regulators.
The American middle class needs stronger bank regulations, not weaker ones.
Last summer, bank regulators told the big banks their plans for orderly bankruptcies were “unrealistic.” In other words, if the banks collapsed, they’d bring the economy down with them.
Dodd-Frank doesn’t even cover bank bets on foreign exchanges. Yet recent turbulence in the foreign exchange market has caused huge losses at hedge funds and brokerages.
This comes on top of revelations of widespread manipulation by the big banks of the foreign-exchange market.
Wall Street is also awash in inside information unavailable to average investors.
Just weeks ago a three- judge panel of the U.S. court of appeals that oversees Wall Street reversed an insider-trading conviction, saying guilt requires proof a trader knows the tip was leaked in exchange for some “personal benefit” that’s “of some consequence.”
Meaning that if a CEO tells his Wall Street golfing buddy about a pending merger, the buddy and his friends can make a bundle — to the detriment of small, typically middle-class, investors.
That three-judge panel was composed entirely of appointees of Ronald Reagan and George W. Bush.
But both parties have been drinking at the Wall Street trough.
In the 2008 presidential campaign, the financial sector ranked fourth among all industry groups giving to then candidate Barack Obama and the Democratic National Committee. In fact, Obama reaped far more in contributions from the Street than did his Republican opponent.
Wall Street also supplies both administrations with key economic officials. The treasury secretaries under Bill Clinton and George W. Bush – Robert Rubin and Henry Paulson, respectfully, had both chaired Goldman Sachs before coming to Washington.
And before becoming Obama’s treasury secretary, Timothy Geithner had been handpicked by Rubin to become president of Federal Reserve Bank of New York. (Geithner is now back on the Street as president of the private-equity firm Warburg Pincus.)
It’s nice that presidential aspirants are talking about rebuilding America’s middle class.
But to be credible, he (or she) has to take clear aim at the Street.
That means proposing to limit the size of the biggest Wall Street banks; resurrect the Glass-Steagall Act (which used to separate investment from commercial banking); define insider trading the way most other countries do – using information any reasonable person would know is unavailable to most investors; and close the revolving door between the Street and the U.S. Treasury.
It also means not depending on the Street to finance their campaigns.
By: Robert Reich, The Robert Reich Blog, January 26, 2015
J.P. Morgan was recently socked in the wallet by financial regulators who levied yet another multi-billion-dollar fine against the Wall Street baron for massive illegalities.
Well, not a fine against John Pierpont Morgan, the man. This 19th-century robber baron was born to a great banking fortune and, by hook and crook, leveraged it to become the “King of American Finance.” During the Gilded Age, Morgan cornered the U.S. financial markets, gained monopoly ownership of railroads, amassed a vast supply of the nation’s gold and used his investment power to create U.S. Steel and take control of that market.
From his earliest days in high finance, Morgan was a hustler who often traded on the shady side. In the Civil War, for example, his family bought his way out of military duty, but he saw another way to serve. Himself, that is. Morgan bought defective rifles for $3.50 each and sold them to a Union general for $22 each. The rifles blew off soldiers’ thumbs, but Morgan pleaded ignorance, and government investigators graciously absolved the young, wealthy, well-connected financier of any fault.
That seems to have set a pattern for his lifetime of antitrust violations, union busting and other over-the-edge profiteering practices. He drew numerous official charges — but of course, he never did any jail time.
Moving the clock forward, we come to JPMorgan Chase, today’s financial powerhouse bearing J.P.’s name. The bank also inherited his pattern of committing multiple illegalities — and walking away scot-free.
Oh, sure, the bank was hit with big fines, but not a single one of the top bankers who committed gross wrongdoings were charged or even fired — much less sent to jail.
With this long history of crime-does-pay for America’s largest Wall Street empire, you have to wonder why Jamie Dimon, JPMorgan’s CEO, is so P.O.’d. He’s fed up to the tippy-top of his $100 haircut with all of this populist attitude that’s sweeping the country, and he’s not going to take it anymore!
Dimon recently bleated to reporters that “banks are under assault.” Well, he really doesn’t mean or care about most banks — just his bank. Government regulators, snarls Jamie, are pandering to grassroots populist anger at Wall Street excesses by squeezing the life out of the JP Morgan casino.
But wait — didn’t JPMorgan score a $22 billion profit last year, a 20 percent increase over 2013 and the highest in its history? And didn’t those Big Bad Oppressive Government Regulators provide a $25 billion taxpayer bailout in 2008 to save Jamie’s conglomerate from its own reckless excess? And isn’t his Wall Street Highness raking in some $20 million in personal pay to suffer the indignity of this “assault” on his bank. Yes, yes and yes.
Still, Jamie says that regulators and bank industry analysts are piling on JPMorgan Chase: “In the old days,” he whined, “you dealt with one regulator when you had an issue. Now it’s five or six. You should all ask the question about how American that is,” the $20-million-a-year man lectured reporters, “how fair that is.”
Well, golly, one reason Chase has half a dozen regulators on its case is because it doesn’t have “an issue” of illegality, but beaucoup illegalities, including deceiving its own investors, cheating more than two million of its credit card customers, gaming the rules to overcharge electricity users in California and the Midwest, overcharging active-duty military families on their mortgages, illegally foreclosing on troubled homeowners and… well, so much more.
So Jamie, you should ask yourself the question about “how fair” is all of the above. Then you should shut up, count your millions and be grateful you’re not in jail.
From John Pierpont Morgan to Jamie Dimon, the legacy continues. Banks don’t commit crimes. Bankers do. And they won’t ever stop if they don’t have to pay for their crimes.
By: Jim Hightower, The National Memo, January 28, 2015
This is unlikely to prompt anyone to break out the bubbly in the Oval Office, but last week’s poll numbers are nevertheless good news for President Obama. Since Democrats were thrashed in November’s midterm elections, the president’s approval ratings have been on the upswing.
As he prepares to deliver his sixth State of the Union address on Jan. 20, Obama’s approval has crept up to 47 percent, according to a new survey from Pew Research. That’s up 5 points since December.
Most analysts believe Obama’s recovering fortunes are the result of a much-improved economy — the one gauge that’s reliably important to voters. It’s taken a few years, but average workers are finally beginning to put the Great Recession behind them.
Take note of this now. Keep it in a spare file in your memory bank. Remember that the economy has been advancing for the six years of Obama’s tenure — a frustratingly slow process that is finally bearing fruit. The unemployment rate is now at 5.6 percent, the lowest since 2008. Foreclosures are down to pre-recession levels. The stock market is in historically high territory.
Why do I want you to remember this? In a stunning show of chutzpah, the president’s harshest critics, the hyper-conservatives who’ve done everything they could to wreck his presidency, want to take credit for the recovery they tried to sabotage.
Just take a look at the speech Kentucky Republican Mitch McConnell gave on the day he took the helm of the Senate as the new majority leader.
“After so many years of sluggish growth, we’re finally starting to see some economic data that can provide a glimmer of hope. The uptick appears to coincide with the biggest political change of the Obama administration’s long tenure in Washington: the expectation of a new Republican Congress,” he said.
According to his logic, consumers spent more money and businesses hired more workers starting back in the summer because they expected Republicans to win a majority in Congress. That’s nonsense.
Obama inherited a mess from George W. Bush — a financial crisis brought on by the excesses of Wall Street. President Bush started the bailout, but most of the work was left for the Obama administration. Obama continued the Wall Street bailout, passed a massive stimulus package and rescued the auto industry. Congressional Republicans, meanwhile, fought him every step of the way. That the economy has bounced back anyway is testament to its underlying resiliency.
Perhaps the greatest driver of consumers’ new optimism is the free-fall in gas prices, which haven’t been this low since the Great Recession drove down demand worldwide. Obama didn’t spur the investment in domestic oil drilling, but he has encouraged it, noting that it would help to free us from a dependence on foreign oil.
None of these hard-won gains have come a moment too soon. And, yes, there’s still much work to be done to revive the American middle class. The growing gap between the comfortable and everybody else remains one of the biggest threats to domestic tranquility. Wages are still stagnant.
Obama is well aware of that. In his State of the Union speech, he is expected to announce an ambitious new proposal to provide free access to the nation’s two-year community colleges. It’s an excellent plan.
Education experts say there are about 8 million community college students, and their average annual tuition is around $3,800. To the comfortable classes, that might not seem like much. But it presents a barrier to many working-class students trying to change their circumstances. It’s an investment that the nation can afford to make — and should make.
But like the other proposals the president has made to boost the economy, this one is likely to meet resistance from the Republicans in Congress. They want to take credit when things go well, but they’re only too willing to block a good idea if it comes from Obama.
By: Cynthia Tucker, The National Memo, January 17, 2015