“Low Wage Jobs Endanger Nothing”: Wall Street’s 2013 Bonuses Were More Than All Workers Earned Making The Federal Minimum
Purveyors of Ferraris and high-end Swiss watches keep their fingers crossed toward the end of each calendar year, hoping that the big Wall Street banks will be generous with their annual cash bonuses.
New figures show that the bonus bonanza of 2013 didn’t disappoint. According to the New York State Comptroller’s office, Wall Street firms handed out $26.7 billion in bonuses to their 165,200 employees last year, up 15 percent over the previous year. That’s their third-largest haul on record.
That money will no doubt boost sales of luxury goods. Just imagine how much greater the economic benefit would be if that same amount of money had gone into the pockets of minimum-wage workers.
The $26.7 billion Wall Streeters pocketed in bonuses would cover the cost of more than doubling the paychecks for all of the 1,085,000 Americans who work full-time at the current federal minimum wage of $7.25 per hour.
And boosting their pay in that way would give our economy much more bang for the buck. That’s because low-wage workers tend to spend nearly every dollar they make to meet their basic needs. The wealthy can afford to squirrel away a much greater share of their earnings.
When low-wage workers spend their money at the grocery store or on utility bills, this cash ripples through the economy. According to my new report, every extra dollar going into the pockets of low-wage workers adds about $1.21 to the national economy. Every extra dollar a high-income American makes, by contrast, only adds about 39 cents to the gross domestic product (GDP).
And these pennies add up.
If the $26.7 billion Wall Streeters pulled in on their bonuses last year had instead gone to minimum wage workers, our economy would be expected to grow by about $32.3 billion — more than triple the $10.4 billion boost expected from the Wall Street bonuses.
This immense GDP differential only speaks to one price we pay for Wall Street’s bonus reward culture. Huge bonuses, the 2008 financial industry meltdown made clear, create an incentive for high-risk behaviors that endanger the entire economy.
And yet, nearly four years after passage of the Dodd-Frank financial reform, regulators still haven’t implemented the modest provisions in that law to prohibit financial industry pay that encourages “inappropriate risk.” Time will tell whether last year’s Wall Street bonuses were based on high-risk gambles that will eventually blow up in our faces.
Low-wage jobs, on the other hand, endanger nothing. The people who harvest, prepare and serve our food, the folks who keep our hotels clean, and the workers who care for our elderly all provide crucial services. They deserve much higher rewards.
By: Sarah Anderson, Moyers and Company, Bill Moyers Blog, March 12, 2014; This post originally appeared at Other Words
“Stand By It, Support It, Argue For It”: Democrats Should Run On Obamacare, Not Run From It
Alex Sink should have won the special congressional election in Florida yesterday. She had more money, she had a better resume and profile, and she was certainly a good candidate.
Florida’s 13th congressional district is a very competitive district that President Obama carried in both 2008 and 2012. True, it had been in Republican hands for a long time, but it was a good chance for the Democrats to pick up an open seat.
So, what went wrong? Hard to tell, of course, from inside the beltway, but let me offer up one thought. Sink tried to straddle health care and got caught in the middle.
As we all know, the notion that “I was for it before I was sort-of against it” does not sit well with voters. Certainly one could argue that the “fix what is wrong” strategy could work in 2014 for Democrats. But my fear is that what the voters hear is “I don’t really like Obamacare much because it may be hurting me politically.”
It is my strong belief that Democrats need to argue vociferously for the benefits of Obamacare. They need to tout what it will do for the country, for average Americans, for those without health insurance, for the economy, for keeping health care costs under control. If candidates believe they can distance themselves politically, especially after they voted in favor of it, they are making a tragic mistake. Own it. Don’t shy away from the important impact it is having now and will have in the future.
Sure, each race is different, each race will have its own dynamics, each race will have its own issues and differences among candidates. But if Democrats are hopelessly divided on health care, even at odds with themselves, they will not be able to stop the Republicans from hammering them.
By emphasizing the “mend it, don’t end it” strategy rather than the “here’s what it will do for you” strategy, Democrats are playing defense. Sure, they can use the Bill Clinton line, “We’ll be fixing it this year, will fix it next year and we’ll fix it the year after that,” but stand by it, support it, argue for it. This is the way Social Security worked and Medicare too — they were constantly amended and changed — but the end result is that they are among the most effective and popular programs ever enacted.
Gov. Mitt Romney tried to straddle the auto bailout, Republicans try obfuscating on women’s issues and Kerry tried to argue both sides of his Iraq vote. It’s hard to make those plays work.
On Obamacare, Democrats should argue strongly for it. Over the next eight months, Democrats should point to the number of people signing up, the care that people are receiving, the improvements in delivery and cost, and, most importantly, what it will accomplish in the future. Once Obamacare is fully operational, fewer people will be bankrupted by health care expenses, our populace will be healthier and the overall impact on the nation will be similar to Social Security and Medicare.
In short, if Democrats start now and double down on the issue, they will fare better in November than if they run and hide.
By: Peter Fenn, U. S. News and World Report, March 12, 2014
“No Bellwether Or Harbinger Of Anything”: Meaningless Special Elections And The Press’s Consequential Imperative
If it were up to me, I would eliminate special elections for the House of Representatives entirely. They make sense when it comes to the Senate, where every state has only two senators and terms run six years, meaning a vacancy can leave a state without significant representation for an extended period of time. But when a congressman dies or retires and there’s another election to fill that critical 1/435th portion of the lower house’s lawmakers in a few months, do we really need to mobilize the state’s electoral resources, spend millions of dollars, and get a bunch of retirees to haul themselves down to the polls, only to do it all again before you know it? Hardly.
The other objectionable thing about special elections is that because they’re almost always the only election happening at that moment, they not only get an inordinate amount of attention, the results also get absurdly over-interpreted. This is a symptom of what we might call the Consequential Imperative among the press (note: if you have a better moniker for this that could propel me to the front rank of contemporary neologism-coiners, hit me up on Twitter). The Consequential Imperative is the impulse, the desire, the need to assert that whatever a journalist happens to be reporting on is very, very important. So for instance, if your editor sent you down to Florida to do a week’s worth of stories on the special election that just concluded there, you are extremely unlikely to write that this election was a contest between a couple of bozos, and means next to nothing for national politics (unless you’re Dave Weigel, who for some reason seems to be almost the only reporter capable of saying such a thing). It’s the same impulse that causes every gaffe, polling blip, and faux-controversy of every campaign to be presented as though it could dramatically alter the outcome of the election, despite all the experience telling us it won’t.
What happens after every special election is this: The losing side says, “This means nothing!”, while the winning side says, “This is a bellwether, signifying more victories to come for us!” And the press almost always agrees with the winning side, whichever party that happens to be, because the Consequential Imperative dictates that, like every other political event, this one must be of great consequence.
So in the case of yesterday’s special election in Florida, we get articles like “Why a Republican Wave In 2014 Is Looking More Likely Now” (National Journal) and “Florida Loss Big Blow to Democrats’ 2014 Hopes” (Politico), explaining that the results of this low-turnout election in one district in Florida can reasonably be extrapolated to tell us what will happen in the November 2014 elections.
As it happens, this race was decided by less than 3,500 votes. To believe that it emphatically means one thing for election outcomes all over America eight months from now, whereas if those 3,500 votes had gone the other way it would have just as emphatically meant the exact opposite, is just absurd. But, you may be saying, that’s because the Republican won! And if the Democrat had won, I’d be saying it really was significant! Well, no. Special elections don’t mean anything beyond deciding which person is going to represent that district until the next election. They may be interesting for one reason or another in and of themselves, but they’re never a harbinger or a bellwether of any national trend. If you ever catch me saying otherwise, feel free to call me a hypocrite and a fool.
By: Paul Waldman, Contributing Editor, The American Prospect, March 12, 2014
“Demographic Death Spiral”: 2014 May Be White Enough For The GOP, But What Comes Next?
Overshadowed amid Sarah Palin’s unique interpretation of Dr. Seuss, Wayne LaPierre’s overheated vision of America’s apocalyptic decline, and all of the other craziness at the 2014 Conservative Political Action Conference, Republican pollster Whit Ayres gave a fact-based presentation to the gathering of right-wing activists. What he said should terrify the GOP.
Ayres, whose firm counts the RNC, NRSC, NRCC, and several influential Republican politicians among its clients, appeared on a panel on Saturday to discuss electoral trends and the future of the GOP.
The slides from Ayres’ presentation, which are available on his firm’s website, reiterate something that many Republicans have long warned: America’s changing demographics leave the increasingly white GOP at risk of entering what Senator Lindsey Graham (R-SC) memorably described as a “demographic death spiral.”
In short, as the Republican pollster explained, the white proportion of the American electorate is declining at an alarming rate. Meanwhile, Republicans are performing much worse among non-white voter groups. If the party doesn’t change something — Ayres suggests immigration reform as a good place to start — it will cease to be viable in national elections.
One particular point in the presentation stood out, however. Turning to the midterm elections, Ayres declared to hearty applause that “we’ve got some good news: We’re going to have a great 2014. We’re going to hold the House, we’re going to pick up the Senate, it’s going to be a great 2014.”
“One of the reasons why,” he explained, “is that the percentage of whites in the electorate is about five points higher in the off-year elections.”
Perhaps Ayres — who, like most pollsters, does not have a spotless record when it comes to predicting elections — should remember what he said in 2012 before asserting that the whiteness of the midterm electorate will bring his party certain success in 2014. Back then, he explained his party’s failure to elect Mitt Romney as president by noting that “it is a mistake to place rosy assumptions on a likely electorate that are at variance — and substantial variance — with recent history.”
Democrats immediately called foul on the crowd’s warm reception to Ayres’ assertion.
“It says a lot that top Republicans believe that lower minority participation in the electoral process is something to celebrate. They know that when the electorate represents more Americans and more voices, they lose,” DNC Director of Voter Expansion Pratt Wiley said in a statement.
In fairness to Ayres, he made it perfectly clear that Republicans need to diversify their party, instead of relying on shrinking the electorate.
“Some people see it as a problem,” he said of America’s demographic shift. “I see it as a real opportunity.”
“Conservative values of free markets, and limited government, and low taxes, and good education, and reward for hard work appeal across all boundaries regardless of race, color, religion, or national origin,” Ayres argued. “Conservatives can be very successful in the new America if we reach out and adopt an inclusive tone, bring people into our coalition, and aggressively campaign in their communities.”
That theory sounds very good on paper — and very familiar. That’s because it’s almost identical to the RNC’s post-election “autopsy report,” which was released almost exactly one year ago. Back then, the RNC suggested that “if we want ethnic minority voters to support Republicans, we have to engage them, and show our sincerity.”
Indeed, one has to wonder whom Whit Ayres thought he could convince that America’s ascendant minority populations could be a positive development. Certainly not the white nationalist-led group manning an English-only booth at the conference. Or racial provocateur Ann Coulter, who used her CPAC speech to decry the “browning of America,” and warned that if immigration reform passes, “then we organize the death squads for the people who wrecked America.” Or the CPAC attendees who delivered a resounding victory in the conference’s presidential straw poll to Senator Rand Paul (R-KY), who has spoken out against the Civil Rights Act of 1964.
Ultimately, Ayres may be right, and the combination of a whiter electorate and a friendly electoral map could deliver a big win for the Republican Party in 2014. But it couldn’t be clearer that the GOP’s broader demographic problem hasn’t been solved — and in fact, it’s actually getting worse.
By: Henry Decker, The National Memo, March 11, 2014. Graph via Northstaropinion.com
“An Outsized Voice”: There’s A Big Difference Between Union Money And Koch Money
For dozens of readers, our editorial this morning on the Democratic criticism of the Koch brothers left out something crucial: the big financial muscle of unions in backing liberal politcians.
“As the editors of The Times must know, unions in America far outspend the Kochs in their funding for Democratic candidates,” wrote Yitzhak Klein of Jerusalem wrote in the comments section. “What Harry Reid is doing is cheap demagoguery. Also this editorial.”
Mr. Klein, like many other commenters (some of whom are prominent) has his figures wrong. As the Washington Post and the Center for Responsive Politics recently reported, unions poured about $400 million into the 2012 elections. That almost matched the $407 million raised and spent by the Koch network in that same election cycle.
But think about what those numbers mean. Two brothers, aided by a small and shadowy group of similarly wealthy donors, spent more than millions of union members. The fortunes of just a few people have allowed them an outsized voice, and they are openly trying to use it to turn control of the Senate to Republicans.
The Koch group Americans for Prosperity has also joined the right-wing drive to reduce union rights and membership around the country, with the goal — made explicit at last week’s Conservative Political Action Conference — of muzzling the voice of union members in politics.
The Times has long deplored the vast amount of cash that is polluting politics, whether it comes from the right or left. (And we were critical of a Democratic donor who plans to spend $100 million this year against candidates who ignore climate change.) But for the most part, unions, unlike the Koch network, don’t try to disguise their contributions in a maze of interlocking “social welfare” groups. Their contributions on behalf of candidates or issues may be unlimited, thanks to Citizens United, but they are generally clearly marked as coming from one union or another. (They want Democrats to know which unions raised the money.)
Union members aren’t coerced into giving political money, either, despite the claims of several commenters. Thanks to a 1988 Supreme Court case, workers have the right not to pay for a union’s political activity, and can demand that their dues be restricted to collective bargaining expenses. The union members who contributed to that $400 million pot in 2012 opted into the system.
That’s still too much money. But there’s a world of difference between a small group of tycoons writing huge checks, and a huge group of workers writing small ones.
By: David Firestone, Taking Note, Editor’s Blog, The New York Times, March 11, 2014
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