“Time For Some Happy Talk From Democrats”: Ban The Word “But” Until After The Election
Democrats, if you want to win in the fall, take some advice from Pharrell Williams: “Clap along if you feel like happiness is the truth.”
The Mountie-hat-wearing pop singer’s infectious “Happy” should be the Democratic Party’s theme song for the midterm election. Despite Republican claims to the contrary, things are definitely looking up. Democrats ought to be clicking their heels and spreading the good news.
Friday’s announcement that unemployment fell to 6.3 percent was huge. The fact that the economy added 288,000 jobs in April — despite continued bad weather early in the month in parts of the country — suggests that the recovery has greater momentum than pessimists had feared. Economists were expecting decent numbers. These are great.
The stock market, meanwhile, is flirting with an all-time high. The Dow has risen about 10 percent over the past year; the S&P 500, more than 16 percent; the Nasdaq, about 22 percent . During President Obama’s term in office, the Dow has more than doubled. If he were a socialist, as his harshest critics claim, he’d be a truly lousy one.
The numbers prove that Obama is, in fact, a skillful capitalist who guided the economy out of its worst slump since the Great Depression. He accomplished this feat despite being saddled with a Republican opposition in Congress that reflexively opposes his every initiative — even those based on policies the GOP supported in the past.
Speaking of which, the Affordable Care Act — which is based, you’ll recall, on a framework developed in Republican think tanks — is clearly a success and may soon be seen as a triumph. More than 8 million people have signed up for insurance through the federal and state exchanges; Obama’s benchmark had been 7 million. Enough of these enrollees are young and healthy to ensure the program’s continued viability.
The disasters predicted by the Republican Party have not come true. Critics have stopped talking about a hypothetical “death spiral” in which the health insurance reforms collapse of their own weight, since it is now clear that nothing of the sort will happen. Early indications are that any increase in premiums for next year will be modest. Republicans will keep attacking Obamacare because it fires up the base, but the program is here to stay.
Democrats now have a positive story they can tell in their campaign ads and speeches: “We promised you that these were the right policies to get the economy on track and reform health care. We said it would take time to see results and asked for patience. You gave us your trust, and now we’re seeing the benefits. This is just the beginning. Give us a mandate to keep moving forward on an agenda that is working.”
This is what Democrats are saying, more or less. But would it hurt to show a little enthusiasm?
Obama can be excused for his brief and relatively low-key reaction to the jobs numbers Friday. He spoke in the White House Rose Garden alongside German Chancellor Angela Merkel, with whom he had just met, and the situation in Ukraine was clearly weighing on both leaders’ minds.
“The grit and determination of the American people are moving us forward,” Obama said, “but we have to keep a relentless focus on job creation and creating more opportunities for working families.”
I propose that Democrats ban the word “but” until after the election.
Republicans are giving “but” a workout. Unemployment may be down to 6.3 percent, they say, but too many people are leaving the workforce. The jobs numbers for April may look good, but we don’t know if this rate of growth can be sustained. Enrollment numbers for the Affordable Care Act may be impressive, but have all those people actually paid their premiums?
These are not honest caveats. Republican claims about enrollees not paying their insurance premiums, for example, are based on a survey taken before many of those premiums were even due. The GOP wants to foster the notion that nothing is going well with Democrats in charge of the White House and the Senate — and that it’s time for a change.
When Democrats sound like the old “Saturday Night Live” character Debbie Downer — emphasizing what’s still ailing about the economy, promising to “fix what’s broken” in Obamacare — they reinforce the Republicans’ message rather than refute it.
Listen up, Democrats. You fixed the economy. You expanded access to health care. Oh, and you ended two wars.
Show a little happiness. It’s contagious.
By: Eugene Robinson, Opinion Writer, The Washington Post, May 5, 2014
“The Four Biggest Right-Wing Lies About Inequality”: Don’t Listen To All Those Right-Wing Lies
Even though French economist Thomas Piketty has made an air-tight case that we’re heading toward levels of inequality not seen since the days of the nineteenth-century robber barons, right-wing conservatives haven’t stopped lying about what’s happening and what to do about it.
Herewith, the four biggest right-wing lies about inequality, followed by the truth.
Lie number one: The rich and CEOs are America’s job creators. So we dare not tax them.
The truth is the middle class and poor are the job-creators through their purchases of goods and services. If they don’t have enough purchasing power because they’re not paid enough, companies won’t create more jobs and economy won’t grow.
We’ve endured the most anemic recovery on record because most Americans don’t have enough money to get the economy out of first gear. The economy is barely growing and real wages continue to drop.
We keep having false dawns. An average of 200,000 jobs were created in the United States over the last three months, but huge numbers of Americans continue to drop out of the labor force.
Lie number two: People are paid what they’re worth in the market. So we shouldn’t tamper with pay.
The facts contradict this. CEOs who got 30 times the pay of typical workers forty years ago now get 300 times their pay not because they’ve done such a great job but because they control their compensation committees and their stock options have ballooned.
Meanwhile, most American workers earn less today than they did forty years ago, adjusted for inflation, not because they’re working less hard now but because they don’t have strong unions bargaining for them.
More than a third of all workers in the private sector were unionized forty years ago; now, fewer than 7 percent belong to a union.
Lie number three: Anyone can make it in America with enough guts, gumption, and intelligence. So we don’t need to do anything for poor and lower-middle class kids.
The truth is we do less than nothing for poor and lower-middle class kids. Their schools don’t have enough teachers or staff, their textbooks are outdated, they lack science labs, their school buildings are falling apart.
We’re the only rich nation to spend less educating poor kids than we do educating kids from wealthy families.
All told, 42 percent of children born to poor families will still be in poverty as adults – a higher percent than in any other advanced nation.
Lie number four: Increasing the minimum wage will result in fewer jobs. So we shouldn’t raise it.
In fact, studies show that increases in the minimum wage put more money in the pockets of people who will spend it – resulting in more jobs, and counteracting any negative employment effects of an increase in the minimum.
Three of my colleagues here at the University of California at Berkeley — Arindrajit Dube, T. William Lester, and Michael Reich – have compared adjacent counties and communities across the United States, some with higher minimum wages than others but similar in every other way.
They found no loss of jobs in those with the higher minimums.
The truth is, America’s lurch toward widening inequality can be reversed. But doing so will require bold political steps.
At the least, the rich must pay higher taxes in order to pay for better-quality education for kids from poor and middle-class families. Labor unions must be strengthened, especially in lower-wage occupations, in order to give workers the bargaining power they need to get better pay. And the minimum wage must be raised.
Don’t listen to the right-wing lies about inequality. Know the truth, and act on it.
By: Robert Reich, The Robert Reich Blog, May 5, 2014
“They Get You Coming And Going”: In America, Being Poor Can Be An Expensive Proposition
Today I came across this very interesting, albeit depressing, bit of data. It’s an analysis by a travel site called Hopper that shows that it costs more to fly in states that have the lowest median incomes.
For example, the study found that in Mississippi, the poorest state, a “good deal” round-trip flight costs about $400, while in Maryland, the state with the highest income, an equivalent ticket costs around $300. The researchers also found that “typical round-trip airfare declines by $2.30 for every additional $1000 in median household income.” The reasons for the increased prices in the poorer states include “average distance traveled, demand density, and airline competition.” Presumably, there’s less demand and less airline competition in poor areas of the country because people there have less money for leisure travel, and also because those locales have less economic development and thus less business travel.
The higher price of air travel for low-income folks is yet another data point that paints a bigger picture: in America, being poor can be an expensive proposition. There are countless, painful examples of this. Food and other basic items tend to cost more in poor neighborhoods. The poor lack access to credit and so are easy prey for payday lenders charging exorbitant interest rates. Poor people are more apt to bounce checks; hello, fees for insufficient funds! There are also late fees for credit card payments — you know, the kind of thing listed in print so fine you need a magnifying glass to be capable of reading about it. But my personal favorites are those extra charges they tack on for restoring utilities they shut off because you couldn’t pay your bill on time in the first place. “They get you coming and going,” as my old man used to say.
In her classic book, Nickel and Dimed, Barbara Ehrenreich described a host of other expensive indignities that plague the working poor. For example, many of her low-wage co-workers were living in hotel rooms, which actually were far costlier, on a monthly basis, than local apartments. But the workers couldn’t move into the apartments because they lacked the month’s rent plus security deposit the landlord required. Many low-wage jobs also require uniforms, the cost of which comes out of the worker’s paycheck, or cars, which the workers are expected to maintain themselves.
There are even darker examples. I wonder how many Americans have put off going to the doctor because they lacked health insurance, sought treatment only when their symptoms were advanced, and ended up being bankrupted by medical bills as a result.
Many of the examples I’ve cited in this post could be greatly improved by some well-targeted regulatory fixes. The rights of workers and consumers against employers, the banks, and the credit card companies need to be vigorously championed, and in some cases, re-invented for our new digital era. There’s no earthly justification other than greed for the $35 bank overdraft ripoff, or the cell phone company gouging you to restore your service because your payment is late. It’s also long past time we bring re-regulation to the airlines. A more regulated airline industry might help bring down fares in certain overpriced markets. Our 30-year old experiment with airline deregulation has hardly been a rousing success — read the excellent 2012 Washington Monthly magazine article by Phillip Longman and Lina Khan for more information on this score.
In addition to more consumer regulation, we also need a much higher minimum wage and a far more generous safety net for poor people in this country. If poor people had more economic resources to begin with — if they simply had enough money to pay their bills on time, and to save a little money for a rainy day — they would never be forced to pay such an outrageously high price for being poor.
By: Kathleen Geier, Washington Monthly Political Animal, May 3, 2014
“It’s Time For The Right Wing To Stop Lying”: Six Studies That Show Everything Republicans Believe Is Wrong
The great 20th-century economist John Maynard Keynes has been widely quoted as saying, “When the facts change, I change my mind. What do you do, sir?” Sadly, in their quest to concentrate economic and political power in the hands of the wealthiest members of society, today’s Republicans have held the opposite position – as the evidence has piled up against them, they continue spreading the same myths. Here are six simple facts about the economy that Republicans just can’t seem to accept:
1. The Minimum Wage Doesn’t Kill Jobs.
The Republican story on the minimum wage takes the inordinately complex interactions of the market and makes them absurdly simple. Raise the price of labor through a minimum wage, they claim, and employers will hire fewer workers. But that’s not how it works. In the early Nineties, David Card and Alan Krueger found “no evidence that the rise in New Jersey’s minimum wage reduced employment at fast-food restaurants in the state.” Since then, international, national and state-level studies have replicated these findings – most recently in a study by three Berkeley economists. Catherine Ruetschlin, a policy analyst at Demos, has argued that a higher minimum wage would actually “boost the national economy” by giving workers more money to spend on goods and services. The most comprehensive meta-study of the minimum wage examined 64 studies and found “little or no evidence” that a higher minimum wage reduces employment. There is however, evidence that a higher minimum wage lifts people out of poverty. Raise away!
2. The Stimulus Created Millions of Jobs.
In the aftermath of the 2007 recession, President Obama invested in a massive stimulus. The Republican belief that markets are always good and government is always bad led them to argue that diverting resources to the public sector this way would have disastrous results. They were wrong: The stimulus worked, with the most reliable studies finding that it created millions of jobs. The fact that government stimulus works – long denied by Republicans (at least, when Democrats are in office) – is a consensus among economists, with only 4 percent arguing that unemployment would have been lower without the stimulus and only 12 percent arguing that the costs outweigh the benefits.
3. Taxing The Rich Doesn’t Hurt Economic Growth.
Republicans believe that the wealthy are the vehicles of economic growth. Starting with Ronald Reagan in the 1980s, they tried cutting taxes on the rich in order to unleash latent economic potential. But even the relatively conservative Martin Feldstein has acknowledged that investment is driven by demand, not supply; if there are viable investments to be made, they will be made regardless of tax rates, and if there are no investments to be made, cutting taxes is merely pushing on a string. Thomas Piketty and Emmanuel Saez, two of the eminent economists of inequality, find no correlation between marginal tax rates and economic growth.
In fact, what hurts economic growth most isn’t high taxes – it’s inequality. Two recent IMF papers confirm what Keynesian economists like Joseph Stiglitz have long argued: Inequality reduces the incomes of the middle class, and therefore demand, which in turn stunts growth. To understand why, imagine running a car dealership. Would you prefer if 1 person in your time owned 99% of the wealth and the rest of the population had nothing, or if wealth was distributed more equally, so that more people could purchase your cars?
Every other country in the Organization for Economic Cooperation and Development has far lower levels of inequality than the United States. Since there are no economic benefits of inequality, why hasn’t the right conceded the argument? Because it’s based on class interest, not empirical evidence.
4. Global Warming is Caused by Humans.
Even as global warming is linked to more and more extreme weather events, more than 56 percent of Republicans in the current congress deny man-made global warming. In fact, the infamous Lutz memo shows that Republicans have actually created a concerted campaign to undermine the science of global warming. In the leaked memo, Frank Lutz, a Republican consultant, argues that, “The scientific debate is closing [against us] but not yet closed. There is still a window of opportunity to challenge the science.”
In truth, the science of global warming is not up for debate. James Powell finds that over a one year period, 2,258 articles on global warming were published by 9,136 authors. Of those, only one, from the Herald of the Russian Academy of Sciences, rejected man-made global warming. That one article was likely motivated by the Russian government’s interest in exploiting arctic shale. Another, even more comprehensive study, examining 11,944 studies over a 10-year period, finds that 97 percent of scientists accepted the scientific consensus that man-made global warming is occurring.
This is not an abstract academic debate. The effects of climate change will be devastating, and poor countries will be hurt the worst. We’ve already seen the results. Studies have linked global warming to Hurricane Sandy, droughts and other extreme weather events. More importantly, doing nothing will end up being far more expensive than acting now. One study suggests it could wipe out 3.2% of global GDP annually.
5. The Affordable Care Act is Working
President Obama’s centrist healthcare bill was informed by federalism (delegating power to the states) and proven technocratic reforms (like a board to help doctors discern which treatments would be most cost-effective). Republicans, undeterred, decried it as Soviet-style communism based on “death panels” – never mind the fact that the old system, which rationed care based on income, is the one that left tens of thousands of uninsured people to die.
From the beginning, Republicans have predicted disastrous consequences or Obamacare, none of which came true. They predicted that the ACA would add to the deficit; in fact, it will reduce the deficit. They claimed the exchanges would fail to attract the uninsured; they met their targets. They said only old people would sign up; the young came out in the same rates as in Massachusetts. They predicted the ACA would drive up healthcare costs; in fact it is likely holding cost inflation down, although it’s still hard to discern how much of the slowdown was due to the recession. In total, the ACA will ensure that 26 million people have insurance in 2024 who would have been uninsured otherwise.
It’s worth noting that every time the CBO estimates how much Obamacare will cost, the number gets lower. Odd how we’ve never heard Republicans say that.
6. Rich people are no better than the rest of us.
Politicians on the right like to pretend that having money is a sign of hard work and morality – and that not having money is a sign of laziness. This story is contradicted by human experience and many religious traditions (Jesus tells a graphic story about a rich man who refused to help the poor burning in hell). But it’s also contradicted by the facts – more and more rich people are getting their money through inheritances, and science shows that they are no more benevolent than others.
More and more, the wealthy in America are second or third generation. For instance, the Walton family, heirs to the Walmart fortune, own more wealth than the poorest 40 million Americans. Thomas Philippon and Ariell Reshef have found that 30 to 50 percent of the wage difference between the financial sector and the rest of the private sector was due to unearned “rent,” or money they gained through manipulating markets. Josh Bivens and Larry Mishel found the same thing for CEOs – their increased pay hasn’t been correlated to performance.
If rich people haven’t really earned their money, are they at least doing any good with it? Studies find that the wealthy actually give less to charity as a proportion of their income than middle-class Americans, even though they can afford more. Worse, they use their supposed philanthropy to avoid taxes and finance pet projects. Research by Paul Piff finds that the wealthy are far more likely to exhibit narcissistic tendencies. “The rich are way more likely to prioritize their own self-interests above the interests of other people,” Piff recently told New York magazine. “It makes them more likely to exhibit characteristics that we would stereotypically associate with, say, assholes.”
By: Sean McElwee, Rolling Stone, April 23, 2014
“If We All Lose Together, We Practically Win Together”: Oklahoma Governor Mary Fallin Makes It Illegal To Establish A Minimum Wage
In a move that fits seamlessly into the GOP’s War on the War on Poverty, Oklahoma governor Mary Fallin (R) has signed a bill into law that prohibits cities in the state from establishing mandatory minimum wages or vacation and sick-day requirements. The new law’s proponents claim that such a ban is necessary for economic homogeneity across the state, as allowing different municipalities to have different minimum wages could draw work disproportionately away from or towards certain cities. In essence, it seems that the logic goes something like this — if we all lose together, we practically win together.
According to Rep. Randy Grau (R-Edmond), the bill’s main supporter in the House, the ban provides ”safeguards that protect small businesses and consumers,” while raising the minimum wage “could derail local economies in a matter of months.” According to Grau, without a “level playing field” across the state, it seems that economic prosperity would all but perish. Currently, Oklahoma’s minimum wage stands at $7.25, equal to the federal level.
The bill was officially passed by Oklahoma’s House of Representatives on Tuesday.
Oklahoma’s new law comes only two months after Governor Fallin, the chair of the National Governors Association, led a national conference of governors that clashed over President Obama’s proposal to increase the national minimum wage to $10.10. In February, Obama signed an executive order that required federal contractors to pay their employees $10.10 an hour. But Gov. Fallin, along with many of her Republican colleagues, found the minimum-wage hike to be poor planning.
Claiming that the market would “take care of itself,” Governor Fallin insisted that a higher minimum wage was not only unnecessary, but actively harmful to the American economy.
“I’m not for increasing the minimum wage because I’m concerned it would destroy jobs, especially for small-business owners,” she said at the time. Her concerns were quickly echoed by GOP leaders, who latched onto a Congressional Budget Office report that said raising the minimum wage by nearly $3 could reduce jobs in 2016 by about 500,000. Of course, the CBO also found that approximately 45 million Americans would fall below the poverty line in 2016 if the minimum wage were to remain at its current level. That finding was handily ignored.
Many critics say that Fallin’s new measure unfairly targets Oklahoma City, where proponents of Obama’s $10.10 wage are collecting signatures to support the increase. The author of the initiative petition, lawyer David Slain, told the Associated Press that he was disappointed that state lawmakers “would vote in such a way to take the right of the people to decide minimum wage.”
In a press release on Monday, Governor Fallin insisted that increasing the minimum wage is not the path out of poverty that Democrats suggest it is, stating:
“Most minimum-wage workers are young, single people working part-time or entry-level jobs. Many are high school or college students living with their parents in middle-class families. Mandating an increase in the minimum wage would require businesses to fire many of those part-time workers. It would create a hardship for small business owners, stifle job creation and increase costs for consumers, and it would do all of these things without even addressing the goal of reducing poverty.”
Governor Fallin, once again, seemed to ignore the CBO’s report that such an increase could boost collective earnings by $31 billion for 33 million low-wage workers and bring an estimated 900,000 people out of poverty. But who’s counting?
By: Lulu Chang, The National Memo, April 15, 2014
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