“The Biggest, Most Important 2016 Debate”: Writing The Obituary Of Supply-Side Economics
It’s now shaping up that wages and the condition of the middle class are going to be the dominant issues as we enter this first phase of the 2016 slog. Don’t take it from me, or even from Elizabeth Warren. Speaker John Boehner said as much (well, almost) on the day he opened the new session of Congress.
This is a very big deal, and it’s about more than our usual, tug-of-war politics. Boehner’s mention of wage stagnation was clearly opportunistic, because it’s a current problem that can be hung around the President’s neck. But middle-class wage stagnation is much more than an Obama problem. It’s our main economic reality for 30-plus years now.
The first chart in this article tells the basic story. Since 1979, American workers’ productivity has increased by 80 percent. The income of the top 1 percent has increased 240 percent. And the average American wage, adjusted for inflation, has gone up just a few percentage points, maybe 8 percent. It wasn’t always this way, and it isn’t nearly this bad in other advanced countries. The median wage in the United States today is around $50,000. If wages had kept pace with productivity gains, the median wage would be more than $90,000.
But look: It’s highly serendipitous that the wage problem is something the Republicans can use against Obama (at least for now). That means they’ll talk about it. What they’ll come up with in terms of solutions beyond tax cuts and deregulation is another matter, but the mere fact that they’ll talk about it means that both parties will be talking about it, and when both parties are talking about an issue, that issue tends to rise to the top of the charts.
On paper at least, this is great for Democrats, because wage stagnation is basically a Democratic issue, one that most voters would probably trust the Democrats to do a better job on than Republicans. Although of course, if it comes to be October 2016 and wages are still as flat as they’ve been since the crash, that could be a problem for the Democrats. So what they need to do is frame wages not as a post-crash, Obama-era problem, but instead to make sure Americans know that this is a deep historical problem, and that the moment to address it is right now.
To that end, you should know that this past week was a really good one for progressive economics in Washington (and none of it had anything to do with Warren!). Two major proposals were floated to address these problems. They’re real and meaty. And if events go in the direction I hope they do, their release in mid-January 2015 will be remembered as the moment when the debate turned.
First, on Monday, Democratic Rep. Chris Van Hollen of Maryland put out a report by the Democratic staff of the House Budget Committee called “An Action Plan to Grow the Paychecks of All, Not Just the Wealthy Few.” All right, a bit cumbersome as a title. But give it credit anyway for getting to the point.
“I sat down with our team many months ago,” Van Hollen told me Thursday, “and we began to really tackle what would need to be done to deal with wage stagnation.” The plan is built around nine ideas. The one that’s gotten the most attention because of the obvious “class warfare” angle is the so-called Wall Street tax, a fee of .1 percent on financial market transactions.
But there are much more interesting ideas in the paper. The most notable may be a limit on the amount of deductions corporations can take for executive pay if those executives are keeping wages stagnant or laying off workers. “From 2007 to 2010,” Van Hollen says, “corporations took $66 billion in deductions on executive pay. That’s a huge amount of money. We say here that if you want to take a tax deduction, you’d better be giving your employees a raise.”
Van Hollen unveiled his proposals at the Center for American Progress on Monday. Then, two days later, CAP president Neera Tanden led a press conference unveiling a major new report on inclusive prosperity, under a panel co-chaired by Larry Summers and Ed Balls, the shadow chancellor of the exchequer for the British Labour Party. The CAP plan, which Tanden stressed is international in the scopes of its analyses and proposed fixes (hence Balls’s inclusion), is aimed at the same basic problem Van Hollen is shooting at—the need to raise the incomes of the middle class.
Summers, speaking at the press conference, emphasized an issue he’s been talking up for a long time, a “very substantial” increase in infrastructure investment. “When we can borrow at 1.8 percent in our own currency, and when construction unemployment approaches double digits,” as it is now, Summers said, “that’s the moment when Kennedy Airport should be fixed.”
No one is under the illusion that John Boehner and Mitch McConnell are going to rush out and pass these measures. That isn’t the point. The point is to influence the direction of the debate, especially the presidential campaign debate. And that, of course, raises the question of the extent to which a certain former senator and secretary of state will embrace these ideas. Tanden was a longtime Hillary Clinton staffer. The imprimatur of Summers on these progressive ideas should raise Clinton’s comfort level with them. If Clinton runs on half of these ideas, and she’s signaling that she might, she’ll be a more progressive candidate than she was in 2008.
It’s hard to believe that we’ve lived with this kind of wage picture, this kind of raging unfairness, for nearly 40 years. Of course, part of the reason that we have lived with it for 40 years is that the Democratic Party wasn’t always much good at articulating a theory of economic growth that could counter the Republicans’ trickle-down argument. They’re finally finding their voice on this. And so, the real importance of the next election is not the Supreme Court, not climate change, not foreign policy, crucial as all those things are. It’s that it could write the obituary of supply-side economics.
By: Michael Tomasky, The Daily Beast, January 17, 2015
“When Things Go Well”: Republicans Now Take Credit For The Recovery They Sabotaged
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
“So Much For The Deep Bench”: Republicans Look To The Past For 2016
On Friday, 2012 Republican presidential nominee Mitt Romney walked back months of promises and told a group of his past donors that he is “seriously considering” another White House bid. According to the Washington Post, he then spent the weekend “calling former aides, donors and other supporters” to rebuild his political operation, and even told one senior Republican that he “almost certainly will” launch another presidential campaign.
There’s still plenty of reason to believe that Romney will not run — and that he’d struggle to win if he did. But if Romney does join the race, he won’t be the only retread candidate seeking the GOP nomination in 2016.
Romney’s runner-up in 2012, former Pennsylvania senator Rick Santorum, has made no secret of his intention to pursue the Republican nomination again. When Santorum was informed that Romney may run again in 2016, he reportedly responded, “bring it on,” and declared that he sees himself as “the winner” in what looks as though it will be a crowded field. Former Texas governor Rick Perry has also begun laying the groundwork for a campaign, huddling with donors and policy experts in the hopes of avoiding a repeat of his 2012 disaster.
If Santorum does run, he’ll likely be joined by fellow Iowa caucus winner Mike Huckabee. The former Arkansas governor recently ended his Fox News show to explore a White House bid. Huckabee won 278 delegates in the 2008 presidential race, barely edging Romney’s 271 but losing easily to Senator John McCain (R-AZ), who has dismissed 2016 speculation by quoting the late Morris Udall: “The people have spoken — the bastards.”
As Romney, Huckabee, Perry, and Santorum weigh their options, former Florida governor Jeb Bush has moved decisively towards a run and established himself as the early frontrunner. Of course, Bush isn’t exactly a fresh face, either; he has not held elected office in six years, and he would almost certainly not be mentioned as a top-tier candidate were he not the brother of the 43rd president and the son of the 41st.
There’s plenty of precedent for Republicans considering well-known national figures and former candidates for their nomination; it’s been the party’s modus operandi for decades. But this year was supposed to be different. As various pundits repeated ad nauseam during the 2012 campaign, the Republican Party was supposed be the party with a “deep bench” of “rising stars” to lead America into the future. But upon further review, anointing Bob McDonnell, Chris Christie, or Marco Rubio as the party’s standard-bearer doesn’t seem like such a great idea.
Some candidates who won media favor in 2012 (such as Wisconsin governor Scott Walker and Kentucky senator Rand Paul) still seem capable of mounting serious campaigns. But they have generated so little support as to leave candidates like Romney and Huckabee confident that they could run again and win. And so the GOP once again seems poised to turn to its failed candidates of the past.
Perhaps it’s no wonder that many Republicans seem determined to take down Democratic frontrunner Hillary Clinton with a campaign straight out of 1994.
By: Henry Decker, The National Memo, January 13, 2015
“It’s Time To Amend The Constitution”: Orrin Hatch Is Third In Line To The Presidency!
The swearing-in of a new Congress is often marked by precipitous climbs and sudden tumbles. Last week, former Senate Minority Obstructionist Mitch McConnell realized his lifelong ambition of becoming majority leader; his rival Harry Reid backslid to his old role in the minority (though not before a less figurative fall sprinkled a little injury over the insult); and more than a dozen Republican senators took over as committee chairs, which contributed such marvelous ironies as global warming skeptic James Inhofe becoming America’s top gatekeeper for environmental legislation.
One of the most consequential changes, however, has passed virtually without comment. Coinciding with the rise of the new Republican majority in the upper chamber, Utah’s archconservative Senator Orrin Hatch is now the Senate president pro tempore. That means that he’s been transformed overnight from a minority-party graybeard to third in line to the presidency.
Most Americans probably didn’t realize that the good people of Beaver, Daggett, and Juab Counties had selected a possible future president for the rest of the country back in 2012, when they reelected Hatch to a seventh term. He is now the second Republican, behind Speaker John Boehner, in line to succeed the Democratic president and vice president in the event of their deaths, incapacitations, or resignations. Here is convincing proof, even more than the vice presidencies of Spiro Agnew and Dan Quayle were, that the voters, our political parties, and America’s entire system of government don’t really take the issue of presidential succession seriously.
It almost never matters who the Senate president pro tempore is. The position is basically a constitutional quirk arising from the eighteenth and nineteenth centuries, when the body occasionally had to call on a designated lawmaker to substitute for its normal presiding officer, the vice president. That function declined in importance over the last 60 years as veeps began to embrace a larger role outside the Senate. Thereafter a tradition arose to entrust the meager duties of the office (you get to sign legislation and administer oaths) to the longest-serving member of the majority party. That practice has frequently—one might even argue necessarily—resulted in the appointment of enfeebled old men from small states, often not of the president’s own party, to a position just a few heartbeats away from the big office.
Hatch is 80 years old, and he takes over the job from the comparatively spry Pat Leahy, a 74-year-old from Vermont. The two presidents pro tempore before Leahy were Hawaii’s Daniel Inuoye and West Virginia’s Robert Byrd, both of whom died in office at the ages of 92 and 86, respectively. Keep in mind that the oldest president in history, Ronald Reagan, left the White House at 77 already showing signs of the Alzheimer’s disease that would swiftly put an end to his public life. It’s flatly dangerous to put men of such advanced years anywhere near the Oval Office without the kind of rigorous medical vetting that presidential candidates receive during campaigns; if they assumed control over the government, it would almost certainly occur during a time of national crisis that would tax their abilities to the extreme.
Even if Hatch’s health and faculties could be guaranteed, his ascent would still mean the retroactive disenfranchisement of tens of millions of Democratic voters nationwide in favor of a vastly smaller group of some 600,000 Hatch voters from his home state—this at a time when national unity would be of paramount importance. This is doubly true of Boehner, a perfectly capable man whose entire congressional district consists of less than 800,000 people.
It may seem fanciful (or morose) to speculate on the subject of succession. After all, no Speakers outside of The West Wing have risen to replace a fallen president, let alone Senate presidents pro tempore. But we’ve lived far more dangerously than we ought to be comfortable with. The assassination of Abraham Lincoln originated in a plot to decapitate the government by also killing the vice president and secretary of state—one that very nearly succeeded. To pick an example of more recent vintage, United Airlines Flight 93 came within a forty-minute flight delay of wrecking the United States Capitol or White House. After 9/11, the joint Brookings/AEI Continuity of Government Commission issued a set of recommendations to help our succession process better reflect an age of global threats that strike without warning. Its counsel—to cut congressional and more junior cabinet secretaries out of the picture, as well as establish protocols for the appointment of temporary members of Congress and the judiciary—has gone thus far unheeded.
The group’s best suggestion was its most provocative: Instead of concentrating our entire crop of possible successors within the small area around Washington, where they are clearly vulnerable to a devastating act of terrorism, the president should select a small group of prominent Americans around the country who could be regularly briefed and prepared to step into power should the need arise. These figures—state governors, former cabinet officials, or other successful government administrators—could even be put forward by candidates during a presidential election, giving the public the partial opportunity to review and approve the choices (and providing political reporters and strategists with even more fodder). In the name of prudence, democracy, and a better news cycle, we should implement this plan—and for the same reasons, we should get elderly, out-party members of Congress some other ceremonial job.
By: Kevin Mahnken, The New Republic, January 16, 2015
“Politics, Not Policy, Trumps Police”: Nothing Gets Done On The Policy End Unless There Are Serious Changes In The Political Climate
As a 10-member delegation of Congressional Black Caucus members head to Ferguson on Sunday for a moment of Martin Luther King, Jr. birthday observance with its citizens, there’s been an emerging argument that now is the time for this second coming of the Civil Rights Movement to transition from its current protest phase to a much more mature public policy phase. As we speak, black elected officials on the state, federal and local level are engaged in a mad dash to draft bills addressing a number of issues related to police violence and misconduct.
There’s a big snag, though: nothing gets done on the policy end unless there are serious changes in the political climate. Without any dramatic alterations on the political landscape, don’t expect any radical implementation of public policy, much less full passage of it. Many observers, and even caucus members themselves, describe the flurry of police brutality, law enforcement data and criminal justice reform bills as “dead on arrival” in the very conservative House Judiciary Committee chaired by Rep. Bob Goodlatte (R-VA).
Republicans have shown no real public interest in addressing these issues, although CBC members claim that they will be getting hearings – at least – on the various bills introduced. But an emboldened Republican majority is running things in Congress and a very red political map of Republican governors and supermajorities in state capitols will keep that going.
The problem is that protesters are failing to make a very important distinction between Politics and Policy. These are two separate functions. They’re like cousins: they are definitely related, and yes, they support or, sometimes, fight each other. But the long-held perception that they’re identical twins is flat out wrong.
Ultimately, cousin policy can’t be implemented unless cousin politics is in the mix as bodyguard and hit man. Even when legislation becomes law, there’s no incentive for folks to follow it without political leverage in place to enforce it. President Obama may have signed the Death in Custody Reporting Act as an important nod to protesters, but it’s not like they’re whipping out the Grey Goose – many movement organizers don’t even know that happened.
And once it’s in place, there’s the question of funding and making sure there’s adequate political influence in cities and states to ensure police departments will be compliant.
Jim Crow didn’t suddenly crumble the day the Civil Rights Act was signed. Acceptance, albeit still slow, didn’t happen until black voters were mobilized into a solid political force to be reckoned with. Soon, we were electing black mayors, black city council members, and black state and federal legislators at a frantic pace. Eventually we got a black president. Since 1970, the number of black elected officials combined on the state, federal and local level has risen by about 650 percent (sadly, the folks who faithfully tallied that number over the past 44 years just went out of business last year – and no one seems to care).
We can quibble later over whether that’s translated into full equality for African Americans. But, you can’t argue with one clear fact: we have way greater flexibility to engage fully in society than we’ve ever had before.
Don’t get me wrong: this new discussion about transitioning from protest to policy is a very, very encouraging development. All movements, at some point, have to mature and grasp the legislative process. Recent criticism showed patience wearing thin from both prominent figures watching the movement and those within it as #BlackLivesMatter activists suddenly found themselves losing public sentiment. A recent YouGov poll shows 44 percent of Americans believe protesters should shoulder some responsibility for the murder of NYPD officers Rafael Ramos and Wenijian Liu – along with 40 percent saying police should have more say over law enforcement than the elected officials who pass their budgets and oversee their activities.
Such polling data reveal the uncomfortable reality that protesters are losing the public narrative, which is usually the direct result of a failed political game.
It’s been nearly six months since Michael Brown was killed, police unleashed blue fury on Ferguson, Missouri and Officer Darren Wilson got a pass. To date, the same mayor and city council are in place, with no plans for a recall election in the foreseeable future. That is downright unacceptable.
No heads have rolled and no public firings of ranking officials or police chiefs have taken place in any of those cities where there are large black populations that can be groomed, prepped and mobilized into ferocious take-no-prisoners political machines. Police officers are turning their back on the Mayor of New York City and actively engaging in “work stoppages” – yet, where’s the black political counter-act to that? Progressives and others are always clowning or bashing the Tea Party and other conservative political groups. But current civil rights protesters could actually learn something from them: Tea Party influence may have declined a bit in the past year, but Republican politicians are still forced to shape policy to their liking or face the prospect of job loss in a primary. Stand Your Ground and voter suppression laws would not have passed if powerful interests like the conservative American Legislative Exchange Council hadn’t applied pressure on Republican state lawmakers.
Right now, that’s a missing piece in the movement. People want immediate change they can see, hear and touch. Passing bills through a complex legislative process few average citizens understand won’t make a bit of difference if political blood isn’t spilled first. Bills don’t give you control. Winning elections and running things do.
By: Charles Ellison, Political Animal Blog, The Washington Monthly, January 16, 2015
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