“Why So Many Americans Feel So Powerless”: Most Working People Have No Choice; It’s Now Take It Or Leave It
A security guard recently told me he didn’t know how much he’d be earning from week to week because his firm kept changing his schedule and his pay. “They just don’t care,” he said.
A traveler I met in the Dallas Fort-Worth Airport last week said she’d been there eight hours but the airline responsible for her trip wouldn’t help her find another flight leaving that evening. “They don’t give a hoot,” she said.
Someone I met in North Carolina a few weeks ago told me he had stopped voting because elected officials don’t respond to what average people like him think or want. “They don’t listen,” he said.
What connects these dots? As I travel around America, I’m struck by how utterly powerless most people feel.
The companies we work for, the businesses we buy from, and the political system we participate in all seem to have grown less accountable. I hear it over and over: They don’t care; our voices don’t count.
A large part of the reason is we have fewer choices than we used to have. In almost every area of our lives, it’s now take it or leave it.
Companies are treating workers as disposable cogs because most working people have no choice. They need work and must take what they can get.
Although jobs are coming back from the depths of the Great Recession, the portion of the labor force actually working remains lower than it’s been in over thirty years – before vast numbers of middle-class wives and mothers entered paid work.
Which is why corporations can get away with firing workers without warning, replacing full-time jobs with part-time and contract work, and cutting wages. Most working people have no alternative.
Consumers, meanwhile, are feeling mistreated and taken for granted because they, too, have less choice.
U.S. airlines, for example, have consolidated into a handful of giant carriers that divide up routes and collude on fares. In 2005 the U.S. had nine major airlines. Now we have just four.
It’s much the same across the economy. Eighty percent of Americans are served by just one Internet Service Provider – usually Comcast, AT&T, or Time-Warner.
The biggest banks have become far bigger. In 1990, the five biggest held just 10 percent of all banking assets. Now they hold almost 45 percent.
Giant health insurers are larger; the giant hospital chains, far bigger; the most powerful digital platforms (Amazon, Facebook, Google), gigantic.
All this means less consumer choice, which translates into less power.
Our complaints go nowhere. Often we can’t even find a real person to complain to. Automated telephone menus go on interminably.
Finally, as voters we feel no one is listening because politicians, too, face less and less competition. Over 85 percent of congressional districts are considered “safe” for their incumbents in the upcoming 2016 election; only 3 percent are toss-ups.
In presidential elections, only a handful of states are now considered “battlegrounds” that could go either Democratic or Republican.
So, naturally, that’s where the candidates campaign. Voters in most states won’t see much of them. These voters’ votes are literally taken for granted.
Even in toss-up districts and battle-ground states, so much big money is flowing in that average voters feel disenfranchised.
In all these respects, powerlessness comes from a lack of meaningful choice. Big institutions don’t have to be responsive to us because we can’t penalize them by going to a competitor.
And we have no loud countervailing voice forcing them to listen.
Fifty years ago, a third of private-sector workers belonged to labor unions. This gave workers bargaining power to get a significant share of the economy’s gains along with better working conditions – and a voice. Now, fewer than 7 percent of private sector workers are unionized.
In the 1960s, a vocal consumer movement demanded safe products, low prices, and antitrust actions against monopolies and business collusion. Now, the consumer movement has become muted.
Decades ago, political parties had strong local and state roots that gave politically-active citizens a voice in party platforms and nominees. Now, the two major political parties have morphed into giant national fund-raising machines.
Our economy and society depend on most people feeling the system is working for them.
But a growing sense of powerlessness in all aspects of our lives – as workers, consumers, and voters – is convincing most people the system is working only for those at the top.
By: Robert Reich, The Robert Reich Blog, April 26, 2015
“Clinton Must Address Income Inequality In 2016”: Hillary Needs A Set Of Policies That Go Beyond Raising The Minimum Wage
Poor Hillary Clinton. She’s rich. And that’s a problem for her presidential campaign.
Even as the economy finally mounts an apparently sustained recovery, income inequality remains a primary worry for American voters. According to a poll by the Pew Research Center last November, 78 percent saw the gap between the haves and the have-nots as a big problem.
Since the 1970s, wages have been stagnating for average workers, who have been buffeted by the crosswinds of globalization and the technological revolution. Factories have fled to cheaper lands. Jobs that were once commonplace — such as those of bank tellers and grocery store clerks — have been lost to technological innovations: ATMs and digital scanners. Meanwhile, the economic gains have accumulated in the bank accounts of a wealthy few.
Clinton — who shares with her husband, former president Bill Clinton, an estimated net worth of more than $20 million — is definitely among those haves. That means the optics of her lifestyle are considerably different from those of Barack and Michelle Obama when he sought the White House: They had barely paid off their student debt.
But appearances aren’t the biggest problem for the former secretary of state. Plenty of rich folk have won the White House in the past; wealth is clearly no barrier.
The far bigger problem for her is that she is not easily associated with the battle to lift up the 99 percent, unlike, say, Sen. Elizabeth Warren (D-MA). If Warren runs for the presidency, as many observers assume she will, Clinton needs to quickly come up with a viable plan to restore America’s dwindling middle class. That ought to be the centerpiece of her campaign.
For that matter, her rivals, especially among the Republicans, need viable proposals to restore the middle class, too. (Warren has said she will not run, but Sen. Bernie Sanders of Vermont, a self-described socialist, is considering a run for the Democratic nomination. He is a longtime advocate for average workers.)
Mitt Romney’s greatest weakness during his 2012 presidential campaign wasn’t his wealth, which, at an estimated $250 million, dwarfs that of the Clintons. His Achilles’ heel was his clear disdain for those who struggle to make ends meet, evidenced in his infamous remarks about the “47 percent.”
He was also weakened by his association with Bain Capital, a private equity firm that, among other things, bought up companies and sometimes streamlined their workforces. In an age of widespread economic anxiety, Obama was able to paint Romney as a callous — and clueless — plutocrat.
Clinton can’t be so easily characterized as an out-of-touch member of the 1 percent; her political positions fit comfortably within the moderate-to-liberal wing of the Democratic Party. Still, she is associated with the centrist economic policies of her husband, who worked hard during his presidency to cozy up to Wall Street and change the image of the Democratic Party, which was believed to be hostile to the business elite. Indeed, President Clinton helped to loosen some of the regulations that had held Wall Street in check.
The results of that loosening are still wreaking havoc on households across the country. The big banks, reckless and greedy, used their new freedom to crash the economy. And, unfortunately, many of the moguls responsible for the mess were unscathed by the wreckage.
As if that were not galling enough, the taxpayers bailed out Wall Street, even as millions of average folks lost their homes to foreclosure. The bailout may have been necessary, but it’s still infuriating. Clinton needs to demonstrate that she understands the anger still loose in the land — among liberal and conservative voters alike.
She needs to be able to answer questions about the high-dollar fees that she has collected from exclusive audiences and about the campaign contributions she has accepted from corporate interests, especially Wall Street types. But more than that, she needs a set of policies that go beyond raising the minimum wage.
She may have to risk alienating some of her big-money donors if she is to assist the shrinking middle class. If she has the courage to do that, Clinton will be hard to beat.
By: Cynthia Tucker, The National Memo, February 14, 2015
“GOP Lawmakers Hit The Ground Running To The Far-Right”: House Republican Leaders Still Haven’t Mastered The Art Of Vote-Counting
In the weeks immediately following the 2014 midterm elections, there was an enormous amount of talk about the need to avoid “poisoning the well.” The point seemed to be, policymakers should be cautious about picking political fights in order to avoid partisan rancor in the new Congress.
Clearly, those concerns have been thrown out a Capitol Hill window.
House Democrats on Wednesday knocked down a GOP bill that would have delayed a key Wall Street reform known as the Volcker Rule, stunning Republican leaders who had expected it to pass with ease. […]
The bill would have allowed banks to hang onto billions of dollars in risky collateralized loan obligations for two additional years by amending the Volcker Rule, which is part of the 2010 Dodd-Frank financial reform law. The rule bans banks from speculating in securities markets with taxpayer funds, requiring them to dump their CLO holdings. A Volcker Rule delay would be a major boon to the nation’s largest banks.
Note, a majority of the House voted for the measure, but because Republican leaders brought the bill up under the suspension calendar, it needed a two-thirds majority to pass. It fell far short.There are a few ways to look at yesterday’s failure. The first, of course, is that House Republican leaders still haven’t mastered the art of vote-counting. The second is that GOP lawmakers clearly remain committed to using their power to do Wall Street’s bidding.
But even putting that aside, let’s not miss the forest for the trees: on only the second day of the new Congress, House Republicans immediately turned their attention to a controversial proposal, backed by financial-industry lobbyists. These guys really aren’t wasting any time.
Indeed, it’s amazing to see just how aggressive the new Republican majority has been since taking its oath of office on Tuesday.
Barring crisis conditions, the start of a new Congress can generally be compared to the start of new school year: folks like to get settled in before tackling a lot of work. On Capitol Hill, some members, especially the freshmen, are still unpacking and learning their way around.
And it’s against this backdrop that House Republicans this week are voting to undermine the Volcker Rule, undermine Social Security, undermine the Affordable Care Act, approve the Keystone pipeline, and impose irresponsible “dynamic scoring” rules – all in the first three days.
It’s one thing when lawmakers furiously try to get stuff done before the end of a Congress – they tend to move quickly when facing an inflexible deadline – but the House GOP majority seems desperate to get this new Congress off to a fast, far-right start, just for the sake of doing so.
What’s more, we’re not even going to touch the newly introduced legislation – including major new abortion restrictions proposed yesterday – which will be considered in the weeks and months to come. I’m just talking about measures on the House floor this opening week.
E.J. Dionne Jr. reminded us this morning, “This will be no ordinary Congress.” Republicans are eager to prove this prediction true.
By: Steve Benen, The Madow Blog, January 9, 2014
“Heads We Win, Tails The Taxpayers Lose”: Wall Street’s Revenge; Dodd-Frank Damaged In The Budget Bill
On Wall Street, 2010 was the year of “Obama rage,” in which financial tycoons went ballistic over the president’s suggestion that some bankers helped cause the financial crisis. They were also, of course, angry about the Dodd-Frank financial reform, which placed some limits on their wheeling and dealing.
The Masters of the Universe, it turns out, are a bunch of whiners. But they’re whiners with war chests, and now they’ve bought themselves a Congress.
Before I get to specifics, a word about the changing politics of high finance.
Most interest groups have stable political loyalties. For example, the coal industry always gives the vast bulk of its political contributions to Republicans, while teachers’ unions do the same for Democrats. You might have expected Wall Street to favor the G.O.P., which is always eager to cut taxes on the rich. In fact, however, the securities and investment industry — perhaps affected by New York’s social liberalism, perhaps recognizing the tendency of stocks to do much better when Democrats hold the White House — has historically split its support more or less equally between the two parties.
But that all changed with the onset of Obama rage. Wall Street overwhelmingly backed Mitt Romney in 2012, and invested heavily in Republicans once again this year. And the first payoff to that investment has already been realized. Last week Congress passed a bill to maintain funding for the U.S. government into next year, and included in that bill was a rollback of one provision of the 2010 financial reform.
In itself, this rollback is significant but not a fatal blow to reform. But it’s utterly indefensible. The incoming congressional majority has revealed its agenda — and it’s all about rewarding bad actors.
So, about that provision. One of the goals of financial reform was to stop banks from taking big risks with depositors’ money. Why? Well, bank deposits are insured against loss, and this creates a well-known problem of “moral hazard”: If banks are free to gamble, they can play a game of heads we win, tails the taxpayers lose. That’s what happened after savings-and-loan institutions were deregulated in the 1980s, and promptly ran wild.
Dodd-Frank tried to limit this kind of moral hazard in various ways, including a rule barring insured institutions from dealing in exotic securities, the kind that played such a big role in the financial crisis. And that’s the rule that has just been rolled back.
Now, this isn’t the death of financial reform. In fact, I’d argue that regulating insured banks is something of a sideshow, since the 2008 crisis was brought on mainly by uninsured institutions like Lehman Brothers and A.I.G. The really important parts of reform involve consumer protection and the enhanced ability of regulators both to police the actions of “systemically important” financial institutions (which needn’t be conventional banks) and to take such institutions into receivership at times of crisis.
But what Congress did is still outrageous — and both sides of the ideological divide should agree. After all, even if you believe (in defiance of the lessons of history) that financial institutions can be trusted to police themselves, even if you believe the grotesquely false narrative that bleeding-heart liberals caused the financial crisis by pressuring banks to lend to poor people, especially minority borrowers, you should be against letting Wall Street play games with government-guaranteed funds. What just went down isn’t about free-market economics; it’s pure crony capitalism.
And sure enough, Citigroup literally wrote the deregulation language that was inserted into the funding bill.
Again, in itself last week’s action wasn’t decisive. But it was clearly the first skirmish in a war to roll back much if not all of the financial reform. And if you want to know who stands where in this coming war, follow the money: Wall Street is giving mainly to Republicans for a reason.
It’s true that most of the political headlines these past few days have been about Democratic division, with Senator Elizabeth Warren urging rejection of a funding bill the White House wanted passed. But this was mainly a divide about tactics, with few Democrats actually believing that undoing Dodd-Frank is a good idea.
Meanwhile, it’s hard to find Republicans expressing major reservations about undoing reform. You sometimes hear claims that the Tea Party is as opposed to bailing out bankers as it is to aiding the poor, but there’s no sign that this alleged hostility to Wall Street is having any influence at all on Republican priorities.
So the people who brought the economy to its knees are seeking the chance to do it all over again. And they have powerful allies, who are doing all they can to make Wall Street’s dream come true.
By: Paul Krugman, Op-Ed Columnist, The New York Times, December 15, 2014
“More Silliness And Hysteria”: Gripes About Excessive Regulations And Taxes Often Are Baseless
In the last couple of months we have seen the country whipped up into near hysteria over the virtually nonexistent threat of Ebola.
While the only people who contracted the disease in this country were those who treated a man who died of the disease, tens of millions of people became convinced they were in danger on airplanes and public buses and even routine visits to the supermarket.
Politicians have sought to exploit the same sort of fears with their rants about regulations and high taxes sinking the economy. These complaints have as much foundation in reality as the Ebola threat.
The regulation screed usually focuses on the number of pages in bills like the Affordable Care Act and the Dodd-Frank financial reform bill. While lengthy bills are unfortunate from the standpoint of the trees cut down for the paper, the length bears no relationship to the amount of regulation.
To take one example, the Volcker Rule, which prohibits banks with government insured deposits from engaging in risky speculation, ended up more than three times its original length as the industry carved out an array of exceptions. The greater length was associated with less regulation, not more.
Dodd-Frank was about curbing the sorts of abuses that gave us the financial crisis. Is the argument that we need corrupt banks to foster growth?
The screams over the ACA are equally misguided. The rules have little impact on large firms, the vast majority of whom already offered insurance that met ACA requirements. It might have been expected to affect mid-sized firms that did not previously offer insurance, but none of the complainers has yet presented any evidence that these mid-sized firms have been especially hard hit in the last few years.
The tax complaints require some serious amnesia. Tax rates were higher for most people in the 1990s when we saw the strongest growth in almost three decades. We then lowered taxes in 2001 and saw a weak recovery followed by the collapse in 2008.
The explanation for the continuing weakness is not a surprise to those of us who warned of the housing bubble before the crisis. The bubble had been driving the economy both directly through its impact on construction and indirectly through the impact that $8 trillion of housing bubble wealth had on consumption. When the bubble burst, the economy lost its driving force.
The building boom of the bubble years lead to enormous overbuilding of housing. When the bubble burst, construction didn’t just fall back to normal. It fell to the lowest levels in 50 years, costing the economy more than four percentage points of GDP, amounting to $700 billion annually in lost demand. The loss of housing wealth meant that consumption fell back to more normal levels.
While both housing and construction are up from their low-points in the recession, they are not going to return to bubble peaks, at least not without another bubble. This means that the economy continues to have a huge shortfall in demand. Cutting taxes and reducing regulation will not magically fill this gap in demand.
There are essentially two ways to increase demand. One is directly through more government spending. This is currently taboo in Washington since we are all supposed to hate budget deficits.
The other is by reducing the trade deficit. The way to reduce the trade deficit is to make U.S. goods more competitive with a lower-valued dollar. Talk of a lower dollar is also taboo in political circles.
In short, it is not difficult to find ways to boost the economy; the problem is that politics prevents them from being discussed. Instead we get silliness about taxes and regulation.
By: Dean Baker, Co-Founder of the Center for Economic Policy and Research; The National Memo, November 20, 2014
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