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“Why Liberals Have To Be Radicals”: Going After The Grotesquely Concentrated Wealth And Power At The Top

Just about nothing being proposed in mainstream politics is radical enough to fix what ails the economy. Consider everything that is destroying the life chances of ordinary people:

  • Young adults are staggered by $1.3 trillion in student debt. Yet even those with college degrees are losing ground in terms of incomes.
  • The economy of regular payroll jobs and career paths has given way to a gig economy of short-term employment that will soon hit four workers in 10.
  • The income distribution has become so extreme, with the one percent capturing such a large share of the pie, that even a $15/hour national minimum wage would not be sufficient to restore anything like the more equal economy of three decades ago. Even the mainstream press acknowledges these gaps.

The New York Times’s Noam Scheiber, using Bureau of Labor Statistics data, calculated that raising the minimum wage to $15 for the period 2009 to 2014 would have increased the total income for the 44 million Americans who earn less than $15 an hour by a total of $300 billion to $400 billion. But during the same period, Scheiber reported, the top 10 percent increased its income by almost twice that amount.

Scheiber concludes:

So even if we’d raised the minimum wage to $15 an hour, the top 10 percent would still have emerged from the 2009-2014 period with a substantially larger share of the increase in the nation’s income than the bottom 90 percent. Inequality would still have increased, just not by as much.

Restoring a more equal economy simply can’t be done by raising incomes at the bottom, even with a minimum wage high that seemed inconceivable just months ago. It requires going after the grotesquely concentrated wealth and power at the top.

Last week, another writer in the Times, Eduardo Porter, assessed Hillary Clinton’s eagerly anticipated speech on how to rescue the middle class.

Porter’s conclusion? Far from sufficient. He writes:

Mrs. Clinton’s collection of proposals is mostly sensible. The older ones — raising the minimum wage, guaranteeing child care to encourage women into the labor force, paying for early childhood education — have a solid track record of research on their side. The newer propositions, like encouraging profit-sharing, also push in the right direction.

But here’s the rub: This isn’t enough.

Nothing in mainstream politics takes seriously the catastrophe of global climate change. Few mainstream politicians have the nerve to call for a carbon tax.

The budget deadlock and the sequester mechanism, in which both major parties have conspired, makes it impossible to invest the kind of money needed both to modernize outmoded public infrastructure (with a shortfall now estimated at $3.4 trillion) or to finance a green transition.

The economy is so captive to financial engineers that even interest rates close to zero do not help mainstream businesses recover. There is still a vicious circle of inadequate purchasing power and insufficient domestic investment.

The rules of globalization and tax favoritism make it more attractive for companies to assemble products, export jobs and book profits overseas.

To remedy the problem of income inequality would require radical reform both of the rules of finance and of our tax code, as well as drastic changes in labor market regulation so that employees of hybrids such as Uber and TaskRabbit would have both decent earnings and the protections of regular payroll employees.

Congress would have to blow up the sequester deal that makes it impossible to invest money on the scale necessary to repair broken infrastructure and deal with the challenge of climate change.

Politicians would have to reform the debt-for-diploma system, not only going forward, as leaders like Bernie Sanders and Elizabeth Warren have proposed, but also to give a great deal of debt relief to those saddled with existing loans.

Unions would need to regain the effective right to organize and bargain collectively.

This is all as radical as, well, … Dwight Eisenhower. Somehow, in the postwar era, ordinary people enjoyed economic security and opportunity; and despite the economy of broad prosperity, there were plenty of incentives for business to make decent profits. There just weren’t today’s chasms of inequality.

But the reforms needed to restore that degree of shared prosperity are somewhere to the left of Bernie Sanders.

This is one of those moments when there is broad popular frustration, a moment when liberal goals require measures that seem radical by today’s standards. If progressives don’t articulate those frustrations and propose real solutions, rightwing populists will propose crackpot ones. Muddle-through and token gestures won’t fool anybody.

 

By: Robert Kuttner, Co-Founder and Co- Editor, The American Prospect, July 22, 2015

July 25, 2015 Posted by | Economic Recovery, Economy, Middle Class | , , , , , , , , | 1 Comment

“GOP Thinks The 47 Percent Aren’t Trying Hard Enough”: News Flash, Middle-Class Rowboats Are Taking On Water

Remember the “47 percent”?

During his 2012 campaign for the presidency, Mitt Romney was caught on tape describing nearly half the country in disparaging terms, labeling them moochers who want handouts. They are voters “who are dependent upon government, who believe that they are victims, who believe the government has a responsibility to care for them, who believe that they are entitled to health care, to food, to housing, to you-name-it,” he said.

Romney’s remarks — and he stood by them immediately after his election defeat — didn’t just damage him; they also sullied the entire Republican Party, reinforcing its image as the lapdog of the very rich. Even now, as some of its strategists push hard for the GOP to reach out to ordinary working folks, its congressional leaders continue to protect the 1 percent.

If President Obama has no hope for passage of his ambitious program of “middle-class economics,” as he called it during last week’s State of the Union speech, at least he has a plan. His proposals for free community college, increasing the minimum wage and providing tax cuts to families in the middle of the economic spectrum have the advantage of recognizing the reality of income inequality.

So far, his GOP critics continue to resist that reality, sticking to the old Reagan-era bromide that a “rising tide lifts all boats.” Perhaps that’s true, but those middle-class rowboats are taking on water even as the rich float along comfortably in their yachts.

The growing gap between the haves and the have-nots is one of the most critical issues of our time, a dispiriting trend that has struck most Western economies. Because of complex forces, especially globalization and technology, the incomes of ordinary workers are falling further and further behind, even as the rich get, well, richer.

That’s not the fault of Democrats or Republicans, Libertarians or Socialists. Nor did this growing inequality start with the Great Recession. It started way back in the 1970s, as the factories that had powered the middle class started to shut down. American steel mills closed; textile mills went away; automotive plants moved out. The trends have simply accelerated since then, as robots power assembly lines and low-wage workers in places like Bangladesh sew garments once made in Maine and North Carolina.

Even now, in a resurgent economy, many families haven’t regained their footing. Their savings accounts have evaporated. They can’t replace the house they lost to foreclosure. They work two or three part-time jobs without benefits. And even those with full-time jobs aren’t living it up. According to The New York Times, the median weekly wage for full-time workers at the end of 2014 was $796, below the levels in 2009, when the expansion began.

Those workers are hardly moochers. They are struggling to find their way in a world where their skills have less value. They need help from a government that knows its role is to lend a hand, to steady the ladder, to help them find a toehold.

Even Romney, who is making noises about running again, has finally gotten the message. He has at least called for an increase in the minimum wage.

But most Republicans can’t get over the notion that those who haven’t made it simply aren’t trying hard enough, that if you’re stuck on the economic margins, it’s your own fault. Their allegiance to the very rich — people like the billionaire Koch brothers — overrides any concern for the vast middle.

Take their insistence on resisting tax increases for the 1 percent — a plan proposed by Obama to pay for tax cuts for the middle and working classes. Republicans claim any tax hikes would kill the recovery. But that’s not so. George W. Bush’s tax cuts led to no new job growth, while Bill Clinton, who raised taxes, presided over a period of widespread prosperity.

So what do Republicans propose? So far, they’ve pushed building the Keystone pipeline, which would create about 42,000 jobs over a period of two years, but only about 35 permanent jobs. And, of course, the GOP still wants to kill Obamacare, a strategy that would create zero jobs.

That’s not much better than dismissing the 47 percent.

 

By: Cynthia Tucker, The National Memo, January 24, 2015

January 25, 2015 Posted by | Economic Policy, GOP, Middle Class | , , , , , , , , | Leave a comment

“In A Pretty Pickle”: I Did Not Have Economic Relations With That Company

There’s something weird about Bain Capital. It seems that the company was going along doing what ordinary private-equity firms do—buying and selling companies, making lots of money—until about 1999 or so, when things took a sinister turn. At that point, terrible things began to happen. The firms they backed went into bankruptcy, costing thousands of people their jobs, while Bain still walked away with millions in management fees. They invested in companies that profited from outsourcing and offshoring. Who knows, they may have been producing magical hair-thickening elixirs made from the tears of orphans. Every time one of these new revelations comes out, it seems to concern the period after 1999. But fortunately for Mitt Romney, he has an explanation: When all these bad things happened, I was no longer part of the firm. I left in 1999, when I took the job leading the Salt Lake City Olympics.

Yet today, the Boston Globe comes out with an investigation that seems to reveal that Romney was still in charge after he left for Salt Lake:

Government documents filed by Mitt Romney and Bain Capital say Romney remained chief executive and chairman of the firm three years beyond the date he said he ceded control, even creating five new investment partnerships during that time.

Romney has said he left Bain in 1999 to lead the winter Olympics in Salt Lake City, ending his role in the company. But public Securities and Exchange Commission documents filed later by Bain Capital state he remained the firm’s “sole stockholder, chairman of the board, chief executive officer, and president.”

Also, a Massachusetts financial disclosure form Romney filed in 2003 states that he still owned 100 percent of Bain Capital in 2002. And Romney’s state financial disclosure forms indicate he earned at least $100,000 as a Bain “executive” in 2001 and 2002, separate from investment earnings.

It doesn’t seem too hard to believe that while Romney was in Salt Lake, he also continued to be involved in the major decisions at Bain—even if he wasn’t available to pitch for the company softball team. The problem now is that he’s spent a lot of time denying that he had anything at all to do with the firm after February 1999. He and Bain say he “retired” from Bain at that point, which is directly contradicted by the SEC filings. I’m guessing the truth is somewhere south of his denials—he may not have been “running” the firm, but he was still involved at some level. But if he were to admit that, then he’d have to answer specific questions about his knowledge of the steel mill that went bankrupt, the outsourcing companies, and so on. And there is nothing in the world Mitt Romney wants to do less than have to answer specific questions about Bain and what he did there.

In a way, this all reminds me of some of what we learned about Bill Clinton during the Monica Lewinsky scandal. One of the details that came out was that he was adamant that he and Monica did not have intercourse during their affair, apparently because that meant that he could convince himself that he wasn’t really cheating on his wife and say with sincerity that he “did not have sexual relations” with her when he eventually got caught. All of this wrangling over when exactly Romney “left” Bain Capital has some of the same flavor.

 

By: Paul Waldman, Contributing Editor, The American Prospect, July 12, 2012

July 13, 2012 Posted by | Election 2012 | , , , , , , , | Leave a comment

Mitt Romney Takes His China-Bashing Campaign To Company That Touts Its Chinese Outsourcing

Well, this is awkward. Mitt Romney, who’s been on the trail recently talking tough on China, is making his last campaign stop of the day before the caucuses at a business that touts the way it outsources much of its manufacturing to China.

Competitive Edge is a firm headquartered near Des Moines that creates and sells promotional items with corporate logos. Romney’s scheduled to make a campaign stop there at around 9:00 PM CT, as part of a day-long tour through the Hawkeye State in the run-up to Tuesday’s caucuses.

What he may not mention: customers of Competitive Edge are choosing a company to make their promotional goods that brags about how much manufacturing work it sends to China.

From the company’s website:

We achieve this goal by utilizing a global network of manufacturers that assist us in sourcing, designing and making our products. It is not surprising that most labor-intensive products are produced in China. What may not be as well known is the level of sophistication and technical expertise that Chinese manufacturers have developed. Competitive Edge takes advantage of these foreign assets and has been working with Chinese manufacturers for over 25 years. As a result of our years of experience and our extensive factory and agent relationships in China, we are able to bring great value and a high level of service to our customer.

The website also features pictures of Chinese employees hard at work on what looks to be Competitive Edge orders. They’re really quite good at sending work to China, the website says:

Our extensive use of cutting edge technology makes it easy for us to collaborate and compete in real time with people and companies located anywhere in the world. Utilizing computer networking, e-mail, teleconferencing and dynamic software applications, conducting business in China is as easy for us as working with domestic companies.

At the Clive location, where Romney will be speaking, the company houses its “Screen Printing and Embroidery Departments.”

On the trail, Romney has said he’d take China before the WTO to be penalized for currency manipulation. Rival Jon Huntsman has warned against that, saying it would start a trade war that would boost prices on Chinese goods and, presumably, making life a lot harder for companies like Competitive Edge.

 

By: Evan McMorris-Santoro, Talking Points Memo, January 2, 2012

January 3, 2012 Posted by | Election 2012, GOP Presidential Candidates, Iowa Caucuses, Jobs | , , , , | Leave a comment

Illegal Immigrants Not To Blame For Unemployment

Memo to Alabama: George W. Bush was right.

The former president, making a too-late push for what  could have been a game-changing, bipartisan immigration reform law, noted that  immigrants now here illegally make an important contribution to the economy.  They do the jobs Americans can’t or won’t do.

Opponents disagreed, arguing that the undocumented  workers were  stealing jobs that should go to Americans—jobs like picking  fruit for  low wages in the hot sun. That was a questionable claim when the   economy was better, but as Alabama farmers are now learning, Bush’s  statement  is correct even now, when Americans are working for far less  pay in jobs for  which they are way over-qualified, just to have a job.

In June Alabama passed a draconian immigration law—most  of which is  still in place, even while courts decide its constitutionality—that has  driven many immigrants from the state. The result has not been a wave   of grateful unemployed teachers and skilled workers, eager to be  underpaid for  difficult manual labor. Instead, at the San  Francisco Chronicle reports:

The agriculture industry suffered the most  immediate impact. Farmers  said they will have to downsize or let crops die in  the fields. As the  season’s harvest winds down, many are worried about next  year.

In south Georgia, Connie Horner has heard just about  every reason  unemployed Americans don’t want to work on her blueberry farm.  It’s  hot, the hours are long, the pay isn’t enough, and it’s just plain hard.

“You can’t find legal workers,” Horner said.  “Basically, they last a day or two, literally.”

There are a number of lessons here. One is that there are  surely  elected officials and people in the business community who are using the   recession to roll back all kinds of hard-fought rights for workers,  cutting  pay, eliminating job security, and drastically reducing or  zeroing out  benefits. Another is that while Americans don’t want to do  farm work for low  wages, they also don’t want to pay higher prices for  food harvested by workers  paid a decent salary. That’s not an argument  for abusing undocumented workers,  but it’s also not an argument for  scaring foreigners out of the state so locals  can have their bad jobs.

What’s remarkable is that some of the same people who  scream about  illegal immigrants taking American jobs here in the United States  are  quieter when it comes to foreigners abroad taking what could be American   jobs here. Outsourcing of manufacturing jobs increases corporate  profits, but  adds to the unemployment rate domestically. Those are jobs  American will do. If  that anti-immigrant worker crowd is genuinely  concerned about retaining U.S.  jobs, they should focus on bringing back  the outsourced jobs—not evacuating  the foreign workers.

By: Susan Milligan, U. S. News and World Report, October 24, 2011

October 25, 2011 Posted by | Businesses, Class Warfare, Corporations, Economic Recovery, GOP, Government, Labor, Lawmakers, Middle Class, Republicans, Right Wing, Unemployment | , , , , , , , , , | Leave a comment

   

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