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“Main Street Nashuans Weren’t Feeling It”: The GOP Clown Show’s Alternate Reality In New Hampshire

Saturday morning found the America that politicians endlessly seek and love to mention but barely know strolling along the first floor of Alec’s Shoes on Main Street here in a city where at least 20 people running for President of the United States were at a hotel less than three miles away, talking. The candidates up the road ranged from a Bush, a Christie, one Paul, a Perry, a Trump, a Rubio, a Cruz, and more than a dozen others, all in town seemingly a decade before the primary next year.

But that traveling clown show didn’t matter much to Roland LeBlanc, who held a Nike sneaker in one hand and a Reebok in the other as he watched his 11-year-old son inspect a wall covered with hundreds of sneakers for sale at reasonable prices. He checked the price on both because the boy, like most kids, was only interested in style.

The Nikes were marked down to $70. The Reeboks were $64.

“How about this one, Dad?” the boy asked, holding a Nike that cost $90.

“I kinda like this one better,” the father replied, showing him the $70 sneaker.

A nuclear deal with Iran, a trade agreement with Pacific Rim nations, all of that and more was a long way from the immediate issue of the moment: the price of sneakers for a boy who would probably grow out of them by the end of summer.

“We get a good cross-section of people here,” John Koutsos, the owner of Alec’s Shoes, was saying. “We get fairly-high-income people here, low- and moderate-income families. We get them all.”

The store itself is a definition of a country too many people think is a distant, fond memory. It was opened in 1938 by John Koutsos’s father, Alec.

Alec Koutsos was born in Pentalofus, Greece, in 1917. He came to America and Nashua in 1934, in the middle of a Great Depression that knocked America to its knees. He did not know the language but he knew what it meant to work hard and to dream of better days and bigger things. He passed away last year at the age of 96, a proud, prosperous citizen.

Today the store is a local magnet to many looking for affordable footwear and clothing in a region hammered by our latest and very deep recession. It is the beating commercial heart of a Main Street where ‘For Lease’ signs are papered to windows of a dozen empty storefronts.

At the Church of Good Shepherd across Main Street a daily meeting of Alcoholics Anonymous had ended and several people stood on the sidewalk talking and smoking cigarettes, some looking as if their immediate future was simply the long day ahead, an agonizing wait before the next meeting when they would again fight temptation together. One of them, Eddie, a 26-year old-unemployed machinist, walked across Main Street to Joanne’s Kitchen & Coffee Shop, where he sat, sipping his coffee, reading the sports page.

“Heroin,” Eddie said. “That’s one of the biggest problems here. It’s all over the place and it’s cheap too. I used to do it but not anymore.”

Heroin overdose has stalked the region around parts of New Hampshire and Vermont. All the politicians gathered at the Crowne Plaza Hotel for the First-in-the-Nation Republican Leadership Summit came prepared to discuss how lethal, how dangerous, ISIS was but there was no mention of the life-destroying availability of a drug that has flooded parts of the nation they seek to lead.

“I don’t know much about any of them,” John Koutsos said. “But it seems to me that the country needs a pep talk. There’s something wrong. People seem to be just sitting back, almost like they’re giving up a little. It’s hard to explain. Hard to put your finger on. It’s like everyone wonders, ‘Where we going?’”

At one end of Main Street in Nashua, there are the local offices of the state’s two United States senators. Republican Kelly Ayotte’s office is at the corner of Main and Temple. It is in a storefront next to the Vietnam Noodle House and across the street from a large Gentle Dental building. Jeanne Shaheen, the Democrat, is a hundred yards farther along on the second floor of a fairly new brick office building.

In between there is the empty, for lease, building that once housed Aubuchon Hardware, a staple of northern New England life. Then there are fairly new buildings where Citizen Bank, Santander Bank, and CVS are found; chains that swallowed up small savings banks and corner drug stores, not just here, but everywhere.

Saturday found local residents out enjoying a sun-splashed New Hampshire morning, the weather offering immediate relief from a long, punishing winter. The parking lot at Nashua’s Pheasant Lane Mall, a few miles from Main Street, was packed with cars and shoppers, each parking space another bullet in the heart of downtown commerce.

At the Crowne Plaza there were the candidates, gathered, shaking hands, smiling, surrounded by the curious and the committed, talking about their views, their opinions on all the big issues that their handlers and their pollsters indicate will help propel them to the front of a truly predictable political pack. And, standing at the cashier’s counter of Alec’s Shoes, Roland LeBlanc paid cash for a $70 pair of Nike sneakers for an 11-year-old boy he hopes will grow up in a country filled with more optimism than too many think exists today.

 

By: Mike Barnicle, The Daily Beast, April 19, 2015

April 21, 2015 Posted by | Election 2016, GOP Presidential Candidates, Republican Leadership Summit | , , , , , , | Leave a comment

“The Lifetime Framework”: The Devastating, Lifelong Consequences Of Student Debt

America has gone through a rapid social experiment over the last 20 years. We have created a system, in large part through public disinvestment, where our young people take on large amounts of student debt in order to achieve a college degree. The sea change has been so quick it’s been difficult to gather even basic, solid numbers on it, making the consequences of such massive student debt subject to intense debate.

A new report from Beth Akers and Matthew M. Chingos of the Brookings Institution has further fueled that debate, arguing that the conventional story of escalating debt burdens due to student loans are overstated. Even though the number of young households with debt has increased from 14 percent to 36 percent between 1989 and 2010, the percentage of monthly income those people put toward their student debt payments is largely the same. Even though student loan debts are going up, they’ve been accompanied by rising incomes, largely balancing out the burden. The focus shouldn’t be on student loans broadly, and instead on more targeted solutions like focusing on those who drop out of college but still have debt.

But this study, like many arguments along these lines, suffers from a major problem: It focuses on a month-to-month comparison. When we look at the effects of a major economic changewhether it’s government debt, taxes, or replacing a system of publicly funded free colleges with a system of debt for a diplomawe can’t just look at what immediately happens. We need to also consider how people behave in the long run. And when we look at student loans from the point of view of a lifetime, the results are more worrisome.

How could this matter? An infamous study on student debt by Jesse Rothstein of the University of California, Berkeley, and Cecilia Elena Rouse of Princeton looked at the results of a highly selective university replacing loans with grants. It concluded “that debt causes graduates to choose substantially higher-salary jobs and reduces the probability that students choose low-paid ‘public interest’ jobs.”

Let’s imagine two scenarios. In the first you have high student loans, so you work for a corporation in the private sector for high wages. And in the second you have virtually no student loans, and you work for less wages in a job focused on the public interest, say as an educator or at a nonprofit. In both cases your student loan payment would be the same as a percentage of your income. The Brookings result would hold. However your lifetime choices will have radically changed as a result.

We see this with other lifetime measures, such as how entrepreneurial people are. A recent study by Brent W. Ambrose of Pennsylvania State University, and Larry Cordell and Shuwei Ma of the Federal Reserve Bank of Philadelphia, found “a significant and economically meaningful negative correlation between changes in student loan debt and net business formation for the smallest group of small businesses.” This makes sense. You can keep your high student loan burdens low if you stay with an established employer. But if you strike out on your own, you’ll have less and more volatile income when you start. This is harder to manage with student loans, which also impacts your credit rating. Again, we can see the short-term student loan burdens staying the same, even though lifetime choices are much more limited as a result.

The lifetime framework also puts front and center something the Brookings study largely hand-waves: the rapid increase in how long people are paying off their student debt. Though the percentage of income that student-loan debtors pay stays the same, the length they are paying those loans is up 80 percent. What was once an average length of 7.4 years in repayment in 1992 is now 13.4 years. All things equal, a large increase in the length you will be paying student loans means you will dedicate a larger portion of your lifetime income to student loans. This burden goes missing by narrowly looking at a month-to-month basis.

This has major consequences for people’s ability to build wealth. Indeed, much of the current energy in analyzing student loan burdens are looking at this longer dynamic, and how it interplays with the ability for people to amass savings. As Richard Fry of Pew found, using the same data set as Brookings, “households headed by a young, college-educated adult without any student debt obligations have about seven times the typical net worth ($64,700) of households headed by a young, college-educated adult with student debt ($8,700).” Fry also finds that those who took out loans are less satisfied with their financial situation compared to people without loans. Similar results have been investigated and found by the Federal Reserve Bank of St. Louis.

This, in turn, has major consequences for how young people will ultimately transition into adulthood. According to Dora Gicheva of the University of North Carolina at Greensboro, student debt decreases the long-term probability of marriage by a significant amount. In a result that should make social conservatives gasp, Gicheva found that an additional $10,000 in loans decreases the probability of marriage by at least 7 percentage points. Meanwhile, the Federal Reserve Bank of New York found that young student debtors are retreating from those traditional markers of adulthood, homeownership and owning a car. These effects reflect the long-term consequences of student debt on a young person’s economic security just as much, if not more, than their monthly bill.

This system of student debt has happened so fast that proper analysis is hard to do. But what’s most interesting is research showing how student debt threatens fundamentally American ways of life. Student debt chips away at the ability to be a risk-taking entrepreneur, a homesteader who has amassed enough wealth to be self-sufficient, or someone who has dedicated their craft to working in our rich civil society. These are three very real versions of the American Dream, and contrary to what studies like Brookings’s might show over the short term, they are all being weakened by the way we saddle young people with student debt burdens.

 

By: Mike Konczal, a Fellow with The Roosevelt Institute; The New Republic, June 24, 2014

June 30, 2014 Posted by | Higher Education, Student Debt | , , , , , , , | Leave a comment

“The Boost That Comes From Raising The Minimum Wage”: Au Contraire, Raising Wages Does Not Destroy Jobs

The standard argument — really, the only argument — against raising the minimum wage is that it will lead to job loss. The argument is beloved by die-hard opponents of raising the wage because it provides them with a veneer, however flimsy, of concern about the welfare of the working poor.

Economic studies have repeatedly shown that argument to be spurious. Now the latest survey of 350,000 small businesses from Paychex, a payroll provider company, and IHS, a business analysis firm, provides strong indications that the exact opposite may be true.

In April, the Paychex/IHS survey, which looks at employment in small businesses, found that the state with the highest percentage of annual job growth was Washington — the state with the highest minimum wage in the nation, $9.32 an hour. The metropolitan area with the highest percentage of annual job growth was San Francisco — the city with the highest minimum wage in the nation, at $10.74.

This suggests that the relationship between a high minimum wage and job creation needn’t be inverse. If anything, it suggests that relationship is direct.

To be sure, the Bay Area economy is booming, but minimum-wage opponents would nonetheless have us believe that mandating the payment of close to $11 an hour must cause job loss at least in fast-food joints and Chinatown’s kitchens. San Francisco shouldn’t be creating more small-business jobs than any other city. It’s theoretically impossible.

So much for the theory. San Francisco is doing exactly that.

The compatibility of higher wage standards and job creation shouldn’t come as a surprise. A classic study of fast-food employment by former White House economic adviser Alan Krueger and Berkeley economics professor David Card demonstrated that raising the minimum wage does not lead to an appreciable decline in employment. Opponents of a higher wage have invoked a recent study by the Congressional Budget Office that argued a raise in the national minimum wage from $7.25 to $10.10, as President Obama has advocated, might cost up to 500,000 jobs. But even that study said that the raise would increase the wages of 16.5 million Americans — at least 33 times the number of those who might lose jobs — and elevate 900,000 people out of poverty.

What critics of a higher minimum wage ignore is that, by putting more money into the pockets of the working poor — a group that necessarily spends nearly all its income on such locally provided basics as rent, food, transport and child care — an adequate minimum wage increases a community’s level of sales and thereby creates more jobs. The Los Angeles Economic Roundtable recently concluded that raising the hourly minimum to $15 in Los Angeles County — the nation’s largest, home to 10 million people — would generate an additional $9.2 billion in annual sales and create more than 50,000 jobs.

The Seattle City Council is expected to enact a proposal from Mayor Ed Murray, developed by a business-labor task force, to phase in a $15 citywide minimum wage over seven years. The progress of the measure is a testament not only to the fast-food workers nationwide who’ve been campaigning for $15 hourly pay from McDonald’s and other chains but also to local labor and community leaders. They injected that issue into last year’s mayoral election, winning a pledge from Murray to push for the $15 standard. With direct employee-employer collective bargaining close to a dead letter in the private-sector economy, the likely success of the Seattle measure points to a new model for bargaining, in which progressive governments respond to worker pressure by legislating the wage increases employees can no longer win in the workplace.

In a nation where most people’s wages have been stagnant or dropping for many years, and where the combination of globalization and de-unionization has stripped from workers the bargaining power they once possessed, the role of government in addressing wage issues has become more central than ever. By investing in job-creating public works, by raising the minimum wage, by lowering taxes on those corporations that give their workers annual productivity increases and raising taxes on those that don’t, government can take up the slack created by the suppression and near-disappearance of private-sector unions. But first, it must dispel the canard that raising wages destroys jobs. Now it can point to San Francisco and Washington as evidence that it doesn’t.

 

By: Harold Meyerson, Opinion Writer, The Washington Post, May 21, 2014

May 25, 2014 Posted by | Jobs, Minimum Wage | , , , , , , | 1 Comment

“No, Really, You Didn’t Build That”: How The Rich Became Dependent On Government Subsidies

Remember when President Obama was lambasted for saying “you didn’t build that”? Turns out he was right, at least when it comes to lots of stuff built by the world’s wealthiest corporations. That’s the takeaway from this week’s new study of 25,000 major taxpayer subsidy deals over the last two decades.

Titled “Subsidizing the Corporate One Percent,” the report from the taxpayer watchdog group Good Jobs First shows that the world’s largest companies aren’t models of self-sufficiency and unbridled capitalism. To the contrary, they’re propped up by billions of dollars in welfare payments from state and local governments.

Such subsidies might be a bit more defensible if they were being doled out in a way that promoted upstart entrepreneurialism. But as the study also shows, a full “three-quarters of all the economic development dollars awarded and disclosed by state and local governments have gone to just 965 large corporations” — not to the small businesses and start-ups that politicians so often pretend to care about.

In dollar figures, that’s a whopping $110 billion going to big companies. Fortune 500 firms alone receive more than 16,000 subsidies at a total cost of $63 billion.

These kinds of handouts, of course, are the definition of government intervention in the market. Nonetheless, those who receive the subsidies are still portrayed as free-market paragons.

Consider Charles and David Koch. Their company, Koch Industries, has relied on $88 million worth of government handouts. Yet, as the major financiers of the anti-government right, the Kochs are still billed as libertarian free-market activists.

Similarly, behold the big tech firms. They are often portrayed as self-made success stories. Yet, as Good Jobs First shows, they are among the biggest recipients of the subsidies.

Intel leads the tech pack with 58 subsidies worth $3.8 billion. Next up is IBM, which has received more than $1 billion in subsidies. Most of that is from New York – a state proudly promoting its corporate handouts in a new ad campaign.

Then there’s Google’s $632 million and Yahoo’s $260 million — both sets of subsidies primarily from data center deals. And not to be forgotten is 38 Studios, the now bankrupt software firm that received $75 million in Rhode Island taxpayer cash. The company received the handout at the very moment Rhode Island was pleading “poverty” to justify cuts to public workers’ retirement benefits.

Along with propping up companies that are supposedly free-market icons, the subsidies are also flowing to financial firms that have become synonymous with never-ending bailouts. Indeed, companies like Goldman Sachs, Bank of America and Citigroup – each of which was given massive taxpayer subsidies during the financial crisis —are the recipients of tens of millions of dollars in additional subsidies.

All of these handouts, of course, would be derided if they were going to poor people. But because they are going to extremely wealthy politically connected conglomerates, they are typically promoted with cheery euphemisms like “incentives” or “economic development.” Those euphemisms persist even though many subsidies do not end up actually creating jobs.

In light of that, the Good Jobs First report is a reality check on all the political rhetoric about dependency. Most of that rhetoric is punitively aimed at the poor. That’s because, unlike the huge corporations receiving all those subsidies, the poor don’t have armies of lobbyists and truckloads of campaign contributions that make sure programs like food stamps are shrouded in the anodyne argot of “incentives” and “development.”

But as the report proves, if we are going to have an honest conversation about dependency and free markets, then the billions of dollars flowing to politically connected companies need to be part of the discussion.

 

By: David Sirota, Salon, February 27, 2014

February 28, 2014 Posted by | Corporate Welfare, Corporations | , , , , , , , | Leave a comment

“Welfare Queens? Welfare Kings Rule The Land”: For Corporations, Giving Is Giving And Taking Is Pure And Simply Taking It All

Since “welfare queens” and the idea of “givers versus takers” are the topic is “du jour” again, let’s look at the forgotten takers: the “welfare kings” on the corporate side.

Section 5010 of the U.S. tax code is a very interesting piece of federal law. Not to pick on my friends in the liquor industry, but we the taxpayers subsidize “flavored” liquors to the tune of $1.1 billion every 10 years. Think about it: when I turned 18 (yes I’m that old), I’d walk into a bar and there would be plain vodka, plain rum, plain gin, etc. Today, walk into a bar and there are thousands of flavors to be had. Why? Well because Section 5010 of the Internal Revenue Code gives distillers a “discount” for adding flavor. Makes sense right? Don’t get me wrong. I love my citrus flavored vodka with club soda. It’s refreshing but I’m not sure if it’s $1.1 billion worth of refreshment in these tight times.

Or take the domestic sugar industry. Case in point: I hate Valentine’s day but not for reasons you may think. It’s a made-up holiday so people tell each other they love each other. That’s ridiculous. So I’m forced to tell you I love you on this day or I’m in the doghouse? Um, not so much. If you have to be reminded to tell your loved one on that day you love them, then you pretty much suck anyway. This past V-Day, I was waiting in the green room for an appearance on MSNBC and I struck up a conversation with a representative from the candy industry. We were talking about this very issue of corporate subsidies and he told me this year, the U.S. government will buy back $80 million worth of sugar from the domestic sugar producers and store it in warehouses because prices didn’t meet government targets. I really kind of like being single, independent, carefree but I’ll be damned if I want my federal government propping up the domestic sugar industry so husbands across America can go buy crappy chocolate for their less-than-pleased spouses.

Or take the domestic oil and gas industries. They make the liquor industry look destitute. We the taxpayers subsidize companies like Chevron, Exxon and Shell to the tune of $7 billion a year. This confuses me. This confuses most Americans.

If you want to dive into the weeds on corporate subsidies, read this. It’ll blow your mind.

While we’re at it, let’s look at America’s small businesses. Every small business is allowed certain deductions, from business meals to gas or mileage to depreciation of computers. What is a deduction, really? It’s taxpayer-subsidized welfare. Greedy small business owners!

According to the Cato Institute, we the American people subsidize corporate America to the tune of more than $90 billion annually, while individual people on welfare only pull down around $59 billion. I like simple math. It’s easy for me to understand. Corporations are getting the better end of that bargain but I don’t hear Sen. Mitch McConnell and Reps. Jack Kingston and Bill Cassidy – the latest decriers of welfare – declaring a war on the corporate CEOs (who are actually driving real Cadillacs). The hypocrisy is staggering.

Let me be clear: These provisions may be good policy. You’re welcome to make that decision. My point is, if we are going to keep having a conversation about “welfare queens” then I’m going to wholeheartedly keep talking about the “welfare kings of industry.” After all, giving is giving and taking is pure and simple taking.

Oh, and I almost forgot: Here’s a great interactive map where you can pinpoint current data on “welfare queens” by state and congressional district. And Congressman Kingston, you best be thankful that a majority of the kids in your district can’t vote or you’d lose reelection.

 

By: Jimmy Williams, U. S. News and World Report, December 20, 2013

December 21, 2013 Posted by | Corporations, Welfare | , , , , , | Leave a comment

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