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“Sanders Is Exploiting The Trade Issue”: Mirroring The Republican Approach To Obamacare

Some people are suggesting that Bernie Sanders‘ win in Michigan was a result of his opposition to trade deals like NAFTA and TPP and that this will serve him well with white working class voters in the so-called “rust belt” states. Just prior to the debate in Flint, Michigan, Sanders tweeted this:

Both Danielle Krutzleben at NPR and Steve Chapman at the Chicago Tribune did some fact-checking on the role of trade deals in the challenges faced by cities like Detroit and Flint. Krutzleban begins with a chart showing that the migration out of Detroit started around 1950 and that since then, it has lost more than 60% of its residents. That started long before the trade deals Sanders suggested as the cause of all those abandoned buildings.

Chapman identifies several factors that are not accounted for if we simply look at things like NAFTA to blame. He points out that Michael Moore’s documentary “Roger & Me” about the shut-down of the General Motors plant in Flint came out four years before NAFTA took effect and that the challenge to the auto industry back then was coming from Japan (not China or Mexico), where they were producing more reliable and fuel-efficient cars.

The other issue that hurt Detroit was the migration of auto plants – not overseas – but to states (mostly in the South) who adopted so-called “right to work” laws that undermined unions. Another factor was automation – which reduced the number of workers required to produce cars by a third. Finally, Chapman makes this observation:

Breaking down trade barriers would actually help the American auto industry and those on the assembly lines. One major attraction of building cars in Mexico is that it has free trade agreements with 45 countries — while the U.S. has free trade deals with just 20. Exporting to most of the world is easier there than here.

Bernard Swiecki, an analyst at the Michigan-based Center for Automotive Research, told Business Alabama why Audi recently decided to put a factory in Mexico instead of the U.S.: “If they export it, they save $4,500 per vehicle in tariffs they don’t have to pay.”

These are just some of the complicating factors that affected a state like Michigan. But they are paralleled by a look at history that informs us of what drove the manufacturing boom in the United States as well as what is challenging its survival today. To sum up: it is not as simple as blaming trade deals.

What I find troubling about Sanders’ approach to all of this is not simply his avoidance of even a cursory mention of these complex issues. It is more about the fact that he is obviously tapping into the anger and despair that is felt by those who are affected (much like Donald Trump is doing) and then locating a singular culprit on which to focus their blame.

But beyond even that, the one thing many of us have spent the last seven years criticizing about Republicans is their use of anger/fear mongering to foster obstruction. What is totally lacking from Sanders is any articulation of what his own approach to trade would be. In that way, he is mirroring the Republican approach to Obamacare: suggesting that trade deals need to be repealed without offering a replacement. For those of us who think that it is important to get beyond the anger/fear and talk about actual policy that works, that is not good enough.

 

By: Nancy LeTourneau, Political Animal Blog, The Washington Monthly, March 10, 2016

March 16, 2016 Posted by | Bernie Sanders, NAFTA, Trade Agreements | , , , , , , , , , | Leave a comment

“Scott Walker’s Race To The Bottom”: His Plan Is As Pure An Expression Of Supply-Side, Trickle-Down Economics As You’ll Find

Scott Walker wants to take his fight against organized labor national. Today he released a plan for a new war not just on union representation, but on worker rights in general.

It’s quite a document, one we might call Scott Walker’s Race to the Bottom.

I have no doubt that Walker is sincere in his desire to see every labor union crushed and every vestige of workers’ power banished — or, in his lingo, “flexibility.” I’d also be surprised if any of the other candidates objected to any part of it. So the plan is worth understanding if you want to grasp what today’s GOP is offering today’s workers.

While he doesn’t say so explicitly, what Walker seems to hope for is really a world without any labor unions at all, or at the very least a world where unions are so weakened that they are unable to advocate for anyone. Here are the major parts of his plan:

Eliminate the National Labor Relations Board. Walker says the NLRB is “a one-sided advocate for big-labor special interests,” but the truth is that Democrats appoint pro-labor members to the board, while Republicans appoint anti-labor members to the board. Transferring the NLRB’s authority to adjudicate labor disputes to the courts would probably be a mixed bag in terms of worker rights.

“Eliminate big-government unions.” This is pretty straightforward. You don’t like unions? Get rid of ’em. Today there are around seven million Americans represented by a public sector union, and around one million of those are employed by the federal government (including the Postal Service). If Walker got his way, the latter group could kiss their representation goodbye — and given his record, it’s pretty clear he wouldn’t mind getting rid of the state and local public-sector unions as well.

Institute a national “right to work” law. The phrase “right to work” is a triumph of conservative PR, because how could anyone object to a right to work? What it means in practice, however, is that in places where unions negotiate salaries and benefits for workers, those workers can’t be required to contribute to the union that got them those salaries and benefits (no one can be required to join a union, but where there are no right to work laws, you can be required to contribute when the union negotiates on your behalf). Whenever a right to work law is being debated in a particular state, Republicans argue that because the law would weaken unions, it will draw employers who don’t want to have to bother with the high wages and good benefits those unions can negotiate.

Which, the evidence suggests, is probably true. But such laws have another effect: they pull down wages and benefits. So that’s the bargain a state makes when it passes a right to work law:  more jobs, but worse jobs.

Think about what would happen if you took this policy national. On a state level, it’s possible for a right to work law to draw a factory from one state to another. But if every state was a right to work state, then that incentive to move is eliminated. The decrease in union representation would spread, which drives down wages and benefits for everyone. Whether you think that’s a good thing depends on whether you are concerned with the interests of large business owners or the interests of workers.

There are a number of smaller ideas in Walker’s plan, like eliminating the requirement that federal contractors pay the “prevailing wage” (i.e. union wage) for construction projects, further reinforcing what seems to be Walker’s belief that the problem with unions is that they let workers earn too much money. And I have to highlight this bit:

“The Obama administration’s government-knows-best proposed rules will require employers to pay overtime rates to greater numbers of salaried works and require federal contractors to provide paid sick leave. Unfortunately, these rules will only reduce wages and deprive workers of the flexibility to balance work and life commitments.

“On Day One of my administration, I will repeal any regulation that reduces employee flexibility, as well as work for changes to federal law to allow time off for overtime hours worked. My changes will protect workplace flexibility by ensuring that misguided big-government mandates do not stand in the way of individuals and families.”

So Walker will roll back the Obama administration’s efforts to make more workers eligible for overtime pay and sick leave, because that would mean more “employee flexibility.” Indeed, just imagine the worker making $7.50 an hour saying to herself, “Boy, now that I have the flu I sure am glad I have to choose between dragging myself into work or staying home and losing my pay. Thanks for the flexibility, President Walker!”

Though Walker’s plan is couched in all kinds of pro-worker rhetoric like that (and endless repetition of the phrase “union bosses”), in truth it’s about as pure an expression of supply-side, trickle-down economics as you’ll find. Its basic principle is that once we eliminate workers’ ability to bargain collectively, everything will turn out great for everyone.

But here’s what we know: union membership has been declining for decades, while incomes have been stagnant and Americans have felt increasingly at the mercy of employers who treat them like interchangeable cogs who can be manipulated, surveilled, and tossed aside at the employer’s whim. There’s no question that Scott Walker succeeded in creating a politically beneficial showdown with public sector unions in Wisconsin. But how many Americans think that the problem with our economy is that too much power in the workplace lies in the hands of workers?

 

By: Paul Waldman, Senior Writer, The American Prospect; Contributor, The Plum Line, The Washington Post, September 14, 2015

September 16, 2015 Posted by | Organized Labor, Scott Walker, Workers Rights | , , , , , , , | Leave a comment

“It’s Increasingly Obvious That Scott Walker Sucks”: When You’re As Bad At Campaigns As Scott Walker, You Should Just Give Up

Scott Walker’s presidential campaign is only a little over 50 days old, and it’s increasingly obvious that Scott Walker sucks. Not for his record or what he believes, although both of those are – to borrow a phrase from William Safire – extremely sucky. But Scott Walker is not good at this campaign thing.

A good campaign introduces a candidate and his best ideas to sympathetic and like-minded voters through a combination of events, press coverage and paid outreach, allowing him or her to attract campaign donations and new supporters alike. A bad campaign forces a candidate to get on the phone to reassure his existing donors that he exists and is going to abandon the “sinking into obscurity” tactic that hadn’t been working. A truly terrible campaign is at hand when the most widely-reported news story is the candidate’s old claim that his bald spot totally isn’t genetic but comes from banging his head against the underside of a cabinet.

It wasn’t supposed to be this way: one of Walker’s selling points was winning three elections in five years (the first one, the recall, then the reelection). In theory, Walker should have been the most experienced, most natural and most effortless Republican candidate. Jeb Bush hasn’t run this decade; Ted Cruz only ran once; Chris Christie is dogged by corruption allegations; Rick Perry has the mental aptitude of two dogs in an overcoat; and Rand Paul was gifted his father’s movement and all his out-of-state donors but none of his charisma at talking about basing an international currency on stuff you dig out of the ground.

Walker should have been able to campaign circles around everyone else in the race. Instead, he’s getting his rear end handed to him by a meringue-haired hotelier and a political neophyte surgeon who speaks with the dizzy wonderment of someone trying to describe their dream from last night while taking mushrooms for the first time.

Donald Trump’s existence in the race actually seems to be goading Walker into looking worse, when you’d think that The Donald’s hogging all the attention might have helped Walker avoid embarrassing revelations. After all, Walker’s political record basically involves refusing to tell anyone what his plans are and then doing something politically craven: he first campaigned on fixing Wisconsin’s budget, then once elected decided that it was public-sector unions’ fault and used a short-term crisis as an excuse to gut them; he evaded discussion about potential anti-union “right-to-work” legislation by calling it a distraction, then signed a right-to-work bill; he ducked questions about legislating more abortion restrictions, then signed a 20-week abortion ban.

And that doesn’t even get into the hail of convictions and indictments in his administration and the campaign finance investigation that suddenly stopped thanks to Wisconsin Supreme Court justices who received donations from many of the same groups being investigated. Walker was always going to have trouble with the scrutiny of a national campaign, outside those justices’ reach and outside the demographics of an overwhelmingly white state whose racial divisions he heightened with the help of a sycophantic right-wing media.

Instead, Walker seems to have felt that any gap in his coverage should have an unforced error hurled through it. He’s blamed cop-shootings (which are down since the Bush Administration) on President Obama and declared himself the candidate who can heal racial divides by getting black people to forgive, instead of protest, racists and racist violence. Instead of just mouthing the Republican repeal-and-replace Obamacare mantra, he came up with an actual replacement plan for the other candidates to criticize – a medley of conservative ideas so old they’ve got whiskers – while his competitors simply promise to deregulate the sucker and tell poor people they can pay for healthcare with trickling-down Ayn Rand fun-bucks. Walker even unsuccessfully tried his hand at xenophobic Trumpism, calling out Barack Obama for meeting with Chinese President Xi Jinping – the same Chinese president that Walker himself flew to China to meet.

And, most incredibly, last weekend Walker started talking about the need to secure the border with Canada: not only securing it, but building a wall, never mind the fact that the border is 3,500 miles longer than the US-Mexico border and goes through four of the Great Lakes. When you start speculating about a US-Canada wall, maybe you should be doing literally anything else; this gig is probably just not for you when your most recent big idea is seeing what happens when you confront a wholly unnecessary problem with a solution that’s completely insane.

Still, Walker soldiers on, trying to get political mileage out of being a Harley Davidson owner, a problematic and confused form of symbolism at best. It’s not like you have to do or be anyone to buy a Harley – they sell bikes on the basis of currency, not biker credibility. Harley Davidson is, however, a union company that has benefited from millions in state subsidies and government assistance during the 2007-8 financial crisis – not quite the right fit for an anti-union, anti-government assistance poster boy.

Walker, touring New Hampshire on said Harley, seems to love any photo op when he’s in his leather jacket, though it does nothing to obscure the fact that he looks like he wakes up every morning and frowns at 30 identical chambray button-downs before picking one to tuck into one of 30 identical flat-front chinos. Scott Walker looks like every dad who is trying too hard to look cool during his Saturday afternoon trip to Home Depot to buy an Allen wrench because he lost the one that came with his wife’s Ikea Hemnes dressing table.

But trying and failing to look hardcore is sort of a thing with Walker. On the debate stage near a one-man burn unit like Donald Trump, Walker did everything short of vanish into the background. At CPAC, he burnished his credibility as someone who can stop Isis by saying, “If I can take on 100,000 protesters, I can do the same across the world. But he didn’t take on 100,000 protesters. During the protests, he slunk to and from the Wisconsin state capitol via underground tunnels and his legislature hasrepeatedly revised rules to restrict capitol protests. He even lied about having his car threatened.

On Tuesday, a benighted Walker told CNBC that he doesn’t think he’s a career politician: “A career politician, in my mind, is somebody who’s been in Congress for 25 years,” he said. Walker, who is 47, first ran for office at age 22, and finally did so successfully at age 25. That was 22 years ago. When you have negligible work experience outside your current field, which you’ve been in for nearly half your time on this earth, sorry, it’s your career. It’s like someone who just drank a case of 3.2% beer claiming he’s sober because he didn’t touch any hard liquor. Sure, pal, take the keys and fire up the road beast and try to peel out of here.

The longer a presidential campaign goes on, the more fundamental truths you inevitably encounter, usually things the candidates and their handlers labor tirelessly to obscure. But sometimes the revelations come fast, and when they do, they are usually particularly unkind.

Scott Walker should’ve been the Republicans’ – or at least the Koch Brothers’ – Dark Money Knight, riding manfully to Washington on his union-busting, climate-change-denying Harley, driving the real career politicians from the city like Sobieski lifting the siege of Vienna. Instead, he’s looking more like a man destined to return to Madison with a wad of Delta Sky Miles to haunt the capitol tunnels, a wraith occasionally seizing hapless passersby at underground crossroads and demanding they tell him if they’ve seen Ronald Reagan, what causes male-pattern baldness and how big Canada is.

 

By: Jeb Lund, The Guardian, September 3, 2015

September 6, 2015 Posted by | GOP Presidential Candidates, Koch Brothers, Scott Walker | , , , , , , , , , | 2 Comments

“The Outrageous Ascent Of CEO Pay”: Corporate Law In The United States Gives Shareholders At Most An Advisory Role

The Securities and Exchange Commission approved a rule last week requiring that large publicly held corporations disclose the ratios of the pay of their top CEOs to the pay of their median workers.

About time.

For the last 30 years almost all incentives operating on American corporations have resulted in lower pay for average workers and higher pay for CEOs and other top executives.

Consider that in 1965, CEOs of America’s largest corporations were paid, on average, 20 times the pay of average workers.

Now, the ratio is over 300 to 1.

Not only has CEO pay exploded, so has the pay of top executives just below them.

The share of corporate income devoted to compensating the five highest-paid executives of large corporations ballooned from an average of five percent in 1993 to more than 15 percent by 2005 (the latest data available).

Corporations might otherwise have devoted this sizable sum to research and development, additional jobs, higher wages for average workers, or dividends to shareholders – who, not incidentally, are supposed to be the owners of the firm.

Corporate apologists say CEOs and other top executives are worth these amounts because their corporations have performed so well over the last three decades that CEOs are like star baseball players or movie stars.

Baloney. Most CEOs haven’t done anything special. The entire stock market surged over this time.

Even if a company’s CEO simply played online solitaire for 30 years, the company’s stock would have ridden the wave.

Besides, that stock market surge has had less to do with widespread economic gains than with changes in market rules favoring big companies and major banks over average employees, consumers, and taxpayers.

Consider, for example, the stronger and more extensive intellectual-property rights now enjoyed by major corporations, and the far weaker antitrust enforcement against them.

Add in the rash of taxpayer-funded bailouts, taxpayer-funded subsidies and bankruptcies favoring big banks and corporations over employees and small borrowers.

Not to mention trade agreements making it easier to outsource American jobs, and state legislation (cynically termed “right-to-work” laws) dramatically reducing the power of unions to bargain for higher wages.

The result has been higher stock prices but not higher living standards for most Americans.

Which doesn’t justify sky-high CEO pay unless you think some CEOs deserve it for their political prowess in wangling these legal changes through Congress and state legislatures.

It even turns out the higher the CEO pay, the worse the firm does.

Professors Michael J. Cooper of the University of Utah, Huseyin Gulen of Purdue University and P. Raghavendra Rau of the University of Cambridge, recently found that companies with the highest-paid CEOs returned about 10 percent less to their shareholders than do their industry peers.

So why aren’t shareholders hollering about CEO pay? Because corporate law in the United States gives shareholders at most an advisory role.

They can holler all they want, but CEOs don’t have to listen.

Larry Ellison, the CEO of Oracle, received a pay package in 2013 valued at $78.4 million, a sum so stunning that Oracle shareholders rejected it. That made no difference because Ellison controlled the board.

In Australia, by contrast, shareholders have the right to force an entire corporate board to stand for re-election if 25 percent or more of a company’s shareholders vote against a CEO pay plan two years in a row.

Which is why Australian CEOs are paid an average of only 70 times the pay of the typical Australian worker.

The new SEC rule requiring disclosure of pay ratios could help strengthen the hand of American shareholders.

The rule might generate other reforms as well – such as pegging corporate tax rates to those ratios.

Under a bill introduced in the California legislature last year, a company whose CEO earns only 25 times the pay of its typical worker would pay a corporate tax rate of only seven percent, rather than the 8.8 percent rate now applied to all California firms.

On the other hand, a company whose CEO earns 200 times the pay of its typical employee, would face a 9.5 percent rate. If the CEO earned 400 times, the rate would be 13 percent.

The bill hasn’t made it through the legislature because business groups call it a “job killer.”

The reality is the opposite. CEOs don’t create jobs. Their customers create jobs by buying more of what their companies have to sell.

So pushing companies to put less money into the hands of their CEOs and more into the hands of their average employees will create more jobs.

The SEC’s disclosure rule isn’t perfect. Some corporations could try to game it by contracting out their low-wage jobs. Some industries pay their typical workers higher wages than other industries.

But the rule marks an important start.

 

By: Robert Reich, The Robert Reich Blog, August 9, 2015

August 17, 2015 Posted by | CEO Compensation, Corporate Law, Public Corporations | , , , , , , , , | 1 Comment

“Emerging From The Ferment”: The Real Irony Of Scott Walker’s Messy Personal Finances

The finances of Wisconsin Gov. Scott Walker got a rather stern once-over from National Journal on Monday.

“Walker has two credit-card debts of more than $10,000 apiece on separate cards and is paying an eye-popping 27.24 percent interest rate on one of them,” the Journal harrumphed, before quickly lasering in on the irony. “The Republican presidential candidate has cast himself as both a fiscal conservative leader and a penny-pinching everyman on the campaign trail, often touting his love of Kohl’s, the discount department store.”

Walker isn’t the first Republican presidential hopeful to get this treatment either. Back in June, The New York Times took Sen. Marco Rubio of Florida to task for a “strikingly low savings rate” and some household purchases of questionable wisdom.

This is a deeply silly genre of journalism. It treats troubles the vast majority of Americans grapple with as vaguely scandalous. And it implicitly assumes the same rules of thumb that should guide household budgets should also guide the federal budget, which is catastrophically wrong.

More to the point, other details in the Journal piece offer a brief look at a presidential candidate of relatively modest means.

“Walker listed only six investments worth between $1,000 and $15,000, a whole life insurance plan worth between $15,000 and $50,000, and a deferred compensation plan from Milwaukee County worth between $15,000 and $50,000,” the Journal continued. Walker received a $45,000 advance for a book in the last year, and it looks like his annual salary since assuming the governorship in 2011 has been around $140,000. That’s certainly a lot of income compared to most Americans — it puts Walker just below the threshold for the top 10 percent — but it’s obviously nothing compared to the fortunes Jeb Bush and Hillary Clinton have amassed.

This gets at something poignant about Walker the politician, and by extension Walker the man. While most all presidential candidates and politicians have a significant amount of socioeconomic distance from the median American, Walker has less than most. Besides his income and wealth, Walker came from modest beginnings as a preacher’s kid in a small Wisconsin manufacturing town. He attended Marquette University in Milwaukee, but didn’t finish his degree — passing on one of the key status symbols that American elites use to separate themselves from the pack.

And yet few Republicans, and certainly no other Republican presidential candidate, has been so ferociously focused on grinding everyday workers into the ground.

Like any good conservative, Walker pushed massive tax cuts for the well-to-do through Wisconsin’s state budget, creating a hole he’s now trying to fill by slicing education spending. But he also drove a blistering and brutally successful push to crush Wisconsin’s public-sector unions, followed by “right to work” laws that will likely cripple the state’s private unions as well.

Nor does it look like Walker did this because Republican and business interests were demanding it — he did it because he wanted to, as a matter of ideology.

An explanation probably lies in the unique and poisonous way the history of race and class intersected in the Milwaukee political milieu Walker came from. In the early 20th century, large numbers of black Americans migrated from the South to northern urban centers. But no sooner had they put down roots than the mid-century collapse of manufacturing arrived, sucking away jobs and bringing poverty to the cities.

Black Americans had never been permitted to build up the wealth that white Americans had: Along with the aftereffects of slavery and the social consequences of segregation, they were initially excluded from policies like Social Security and the G.I. Bill, which helped build the white middle class. And racist policies like redlining and the construction of the highway system destroyed many of their neighborhoods and prevented them from accessing areas of economic vibrancy.

So when the white middle class fled to the suburbs, the poorer black populations could not follow. That set up Reaganite white suburbs, which surrounded and disdained the urban interiors of impoverished African-Americans, and all the vicious politics that followed. The funny thing, as Alec MacGillis laid out in a 2014 profile of Walker, was that this process came a few decades late to Milwaukee. The future governor cut his political teeth as a member of Milwaukee’s fleeing white upper-middle class, just as this conflict was reaching its apex.

So it should come as no surprise that those public-sector jobs Walker helped crush have also been one of the great economic havens where black Americans can actually earn a decent living.

For decades, American macroeconomic policy has done a terrible job providing enough work to keep everyone employed. That’s introduced a bottom-up desperation that’s trickled higher and higher over the years. On top of that, while America has a hidden welfare state for the rich and the upper-middle class, its explicit social safety net is skimpy and targeted at the poorest Americans. This creates a perverse circumstance in which many Americans in the middle of the pack feel left behind, while they see people with different skin colors and alien cultural habits — habits often shaped by poverty — receiving aid (however grossly inadequate).

More and more, American society is becoming a brute contest, in which the groups of varying power must trample one another for the scraps that fall from the elite table. This sort of divide-and-conquer effect, in populations that should be uniting over common interests and common foes, has a long history in U.S. labor struggles.

When people find themselves outside the elite inner circle, and see themselves as in a zero-sum economic game with impoverished subcultures that look and act different from them, the likes of Scott Walker is often what emerges from the ferment.

 

By: Jeff Spross, The Week, August 5, 2015

August 7, 2015 Posted by | GOP Presidential Candidates, GOP Primaries, Scott Walker | , , , , , , , , | Leave a comment

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