“Hey, Middle Class; Hillary Gets It”: Linking The Concepts Of Fairness And Growth
Here’s one thing I’m sure of about the economic speech Hillary Clinton gave Monday morning at the New School: If a relatively unknown Democratic governor of Illinois or Michigan were running for president, and he gave the speech Hillary Clinton gave Monday morning at the New School, rank-and-file liberals would be turning rapturous cartwheels. She correctly identified the central economic problem of our time; she talked very clearly about the kinds of solutions she’d pursue to address it; she even tossed a few threats in Wall Street’s direction.
The problem is the wages of middle-class workers. The solutions are varied but boil down to a range of policies that would do two things: one, give corporations incentives to share profits and think less about short-term profit-maximization; two, help middle-class families meet the life expenses (college tuition, day care, etc.) that have increased greatly over the last 20 years while wages have remained stagnant. And as to Wall Streeters who gamble with middle-class people’s money, she said, “We will prosecute individuals and firms” who do so. She used the word “criminal” in this context more than once.
My hypothetical governor giving exactly this speech would be showered with liberal praise. But Clinton says it, and it’s like so what. She faces too much distrust from liberals over her past centrism; and for the moment everybody’s all Bernie Bernie Bernie. And that’s all fine. Sanders is fun and sometimes exhilarating, and a primary contest needs a candidate who can speak the unvarnished truth.
But it’s the speakers of varnished truth who usually win presidential nominations, and Clinton is at least 90 percent likely to win this one. And as varnished truths go in Democratic presidential politics, Clinton’s are about as liberal as any liberal could reasonably hope for. There’s an art to taking it right up to line, but not an inch past, and she’s doing that.
One way of testing whether proposals have any ideological bite to them is to imagine whether anyone from the other party could put them forward. Everyone can and will say they want to help the middle class. But how? Jeb Bush says with 4 percent growth into infinity. First of all this is a big fat lie of a promise, and he’s surely smart enough to know he’s lying. From 1975 to 2014 (for 40 years), annual GDP growth in the United States averaged 2.79 percent, according to World Bank data (the stuff I used came in the form of an Excel spreadsheet, so there’s no URL, but Google something like “Real Historical Gross Domestic Product” and you’ll find it). So it doesn’t happen. The best years of sustained GDP growth we’ve ever had were under—yep—Bill Clinton, but even in the late 1990s, we had only four straight years of plus-4-percent growth, and that’s a modern record (there was a three-year run under Ronald Reagan from 1983-1985).
So it’s a lie, number one, but more importantly, it means nothing as a measure. No, actually, it means something, and what it means is toxic: It means that if we actually do experience growth at 4 percent but without taking any of the ameliorative measures Clinton is talking about, the main impact of that growth will be to give us more inequality, more wage stagnation, more corporate profit-hoarding, more stock buybacks, and more roulette-wheel banking. Bush’s is a flawed way of looking at the economy, and this is a very old point of contention between right and left; As Robert Kennedy once said, GDP “measures everything, in short, except that which makes life worthwhile.”
Clinton is talking about growth too, but she’s emphasizing equitable growth. And she puts forward numerous proposals that no Republican would touch, from raising the minimum wage—remember, Bush wants no federal minimum wage—to strengthening unions to offering paid family leave to cracking down on employers who misclassify workers as contractors to expanding on Dodd-Frank to endorsing the Buffett Rule, which applies a minimum effective tax rate of 30 percent on earners north of $1 million.
She left a lot of the details for later, and she was fuzzy here and there—she was noncommittal on trade, and it will be interesting to hear what “defending and enhancing” Social Security actually means.
But for now, it’s enough that she’s linking the concepts of fairness and growth and that she’s making that link the centerpiece of her economic agenda. This is important because until very recently, the economics profession hasn’t regarded fairness as anything it should care about. But that has begun to change. This was the big question in my mind last year as I contemplated Clinton’s candidacy last year. Believe me, I had no small amount of doubt about how aggressively she’d embrace the equitable growth proposition. I’d say she’s answered my questions. Last year, on her book tour, she pooh-poohed paid family leave. Now it’s a centerpiece of her platform.
It’s still going to take time for liberals to believe this, and of course some never will. This is where Clinton still has some work to do. When it comes to economics, liberals don’t really want to hear policy proposals. They want to hear FDR-style attacks on the economic royalists. This is not something Clinton is known for, to put it mildly. I don’t think anyone expects her to be Elizabeth Warren, but in her own way, she has to go there, especially when you consider that she might become the wealthiest president in modern times.
This, from the speech, started moving in that direction, and it’s the first time I recall her talking like this: “And while institutions have paid large fines and in some cases admitted guilt, too often it has seemed that the human beings responsible get off with limited consequences—or none at all, even when they’ve already pocketed the gains. This is wrong and, on my watch, it will change.”
Maybe if she keeps this up and the royalists start attacking her, and she stands her ground, the Warrenites will finally come around. In the meantime, liberals ought at least to recognize that the old cautious Hillary they have in their minds would never have gone this far this fast.
By: Michael Tomasky, The Daily Beast, July 14, 2015
“A Palpable Authenticity”: The Non-Clinton Alternative For Democrats
Is Bernie Sanders the political reincarnation of Eugene McCarthy? I doubt it, but let’s hope he makes the Democratic presidential race interesting.
I don’t know if front-runner Hillary Clinton shares my wish, but she ought to. I’m not of the school that believes competition for competition’s sake is always a good thing. But Sanders has an appeal for younger, more liberal, more idealistic Democrats that Clinton presently lacks. If she competes for these voters — and learns to connect with them — she will have a much better chance of winning the White House.
Sanders, the Vermont independent and the only self-described socialist in the Senate, drew packed houses during a weekend barnstorming tour of Iowa. The 2,500 people who attended his rally in Council Bluffs were believed to be the largest crowd a candidate from either party has drawn in the state. This followed last week’s triumph in Madison, Wis. , where Sanders packed a 10,000-seat arena with cheering supporters — the biggest event anywhere thus far in the campaign.
At the same time, Sanders is rising in the polls. The latest Quinnipiac survey showed Clinton with a 19-point lead in Iowa, 52 percent to 33 percent. As recently as May, Clinton had a 45-point advantage.
Comparisons have been made to McCarthy, the Minnesota senator whose opposition to the Vietnam War galvanized support on college campuses and stunned the Democratic Party establishment. McCarthy’s showing in the 1968 New Hampshire primary — he received 42 percent of the vote — helped lead incumbent Lyndon Johnson to pull out of the race.
But let’s not get carried away. A lead of 19 points is a problem any politician would love to have. Sanders’s numbers had nowhere to go but up, and Clinton’s nowhere but down. What’s safe to say at present is that Sanders — not Martin O’Malley, Jim Webb or Lincoln Chafee — has become the non-Clinton alternative for Democrats who, for whatever reason, are suffering some Clinton fatigue.
One thing Sanders has going for himself is palpable authenticity. He is the antithesis of slick. To say there’s nothing focus-grouped about the man is to understate; one doubts he knows what a focus group is. “Rumpled” is the word most often used to describe him, but that’s not quite right; it’s not as if his suits are unpressed or his shirttails untucked. He’s just all substance and no style — which, to say the least, makes him stand out among politicians.
Clinton, by contrast, has always struggled to let voters see the “authentic” her rather than the carefully curated, every-hair-in-place version her campaigns have sought to project. Part of the problem, I believe, is that women in politics are held to an almost impossible standard; no male candidate’s wardrobe choice or tone of voice receives such microscopic scrutiny. But she also distances herself by campaigning as if she’s protecting a big lead — which she is — and wants to avoid offending anyone. Last, when asked her favorite ice cream flavor, she replied, “I like nearly everything.” What, vanilla lovers were going to abandon her if she had said chocolate?
Sanders’s main appeal, however, is that he speaks unabashedly for the party’s activist left. He is witheringly critical of Wall Street, wants to break up the big banks, proposes single-payer health care and promises to raise taxes. He voted against the 2003 invasion of Iraq; Clinton, then a senator, voted for it but now says that she made a mistake.
Eight years ago, Barack Obama made opposition to the Iraq war his signature issue and rode it to victory in Iowa and beyond. Will lightning strike the Clinton machine twice?
Not the same kind of lightning, surely, and not in the same manner. Obama is a uniquely gifted politician whose appeal went beyond the issues. He was able to make voters believe not just in him but also in themselves and their power to reshape the world. And as the first African American with a legitimate chance to become president, he gave the nation a chance to make history.
This time, Clinton is the candidate with history on her side. The fact that she could be the first woman elected president is not enough, by itself, to win her the nomination. But it does matter. She, like Obama, offers voters the chance to feel a sense of accomplishment.
And nothing about Clinton’s past remotely compares with the millstone of Vietnam that weighed LBJ down and ultimately caused him to give up. I just don’t see a McCarthy scenario brewing — or an Obama scenario, either.
By: Eugene Robinson, Opinion Writer, The Washington Post, July 7, 2015
“Whatever Happened To Antitrust?”: Ambushed By The Giant Companies It Was Designed To Contain
Last week’s settlement between the Justice Department and five giant banks reveals the appalling weakness of modern antitrust.
The banks had engaged in the biggest price-fixing conspiracy in modern history. Their self-described “cartel” used an exclusive electronic chat room and coded language to manipulate the $5.3 trillion-a-day currency exchange market. It was a “brazen display of collusion” that went on for years, said Attorney General Loretta Lynch.
But there will be no trial, no executive will go to jail, the banks can continue to gamble in the same currency markets, and the fines – although large – are a fraction of the banks’ potential gains and will be treated by the banks as costs of doing business.
America used to have antitrust laws that permanently stopped corporations from monopolizing markets, and often broke up the biggest culprits.
No longer. Now, giant corporations are taking over the economy – and they’re busily weakening antitrust enforcement.
The result has been higher prices for the many, and higher profits for the few. It’s a hidden upward redistribution from the majority of Americans to corporate executives and wealthy shareholders.
Wall Street’s five largest banks now account for 44 percent of America’s banking assets – up from about 25 percent before the crash of 2008 and 10 percent in 1990. That means higher fees and interest rates on loans, as well as a greater risk of another “too-big-to-fail” bailout.
But politicians don’t dare bust them up because Wall Street pays part of their campaign expenses.
Similar upward distributions are occurring elsewhere in the economy.
Americans spends far more on medications per person than do citizens in any other developed country, even though the typical American takes fewer prescription drugs. A big reason is the power of pharmaceutical companies to keep their patents going way beyond the twenty years they’re supposed to run.
Drug companies pay the makers of generic drugs to delay cheaper versions. Such “pay-for-delay” agreements are illegal in other advanced economies, but antitrust enforcement hasn’t laid a finger on them in America. They cost you and me an estimated $3.5 billion a year.
Or consider health insurance. Decades ago health insurers wangled from Congress an exemption to the antitrust laws that allowed them to fix prices, allocate markets, and collude over the terms of coverage, on the assumption they’d be regulated by state insurance commissioners.
But America’s giant insurers outgrew state regulation. Consolidating into a few large national firms and operating across many different states, they’ve gained considerable economic and political power.
Why does the United States have the highest broadband prices among advanced nations and the slowest speeds?
Because more than 80 percent of Americans have no choice but to rely on their local cable company for high capacity wired data connections to the Internet – usually Comcast, AT&T, Verizon, or Time-Warner. And these corporations are among the most politically potent in America (although, thankfully, not powerful enough to grease the merger of Comcast with Time-Warner).
Have you wondered why your airline ticket prices have remained so high even though the cost of jet fuel has plummeted 40 percent?
Because U.S. airlines have consolidated into a handful of giant carriers that divide up routes and collude on fares. In 2005 the U.S. had nine major airlines. Now we have just four. And all are politically well-connected.
Why does food cost so much? Because the four largest food companies control 82 percent of beef packing, 85 percent of soybean processing, 63 percent of pork packing, and 53 percent of chicken processing.
Monsanto alone owns the key genetic traits to more than 90 percent of the soybeans planted by farmers in the United States, and 80 percent of the corn.
Big Agribusiness wants to keep it this way.
Google’s search engine is so dominant “google” has become a verb. Three years ago the staff of the Federal Trade Commission recommended suing Google for “conduct [that] has resulted – and will result – in real harm to consumers and to innovation.”
The commissioners decided against the lawsuit, perhaps because Google is also the biggest lobbyist in Washington.
The list goes on, industry after industry, across the economy.
Antitrust has been ambushed by the giant companies it was designed to contain.
Congress has squeezed the budgets of the antitrust division of the Justice Department and the bureau of competition of the Federal Trade Commission. Politically-powerful interests have squelched major investigations and lawsuits. Right-wing judges have stopped or shrunk the few cases that get through.
We’re now in a new gilded age of wealth and power similar to the first gilded age when the nation’s antitrust laws were enacted. But unlike then, today’s biggest corporations have enough political clout to neuter antitrust.
Conservatives rhapsodize about the “free market” and condemn government intrusion. Yet the market is rigged. And unless government unrigs it through bold antitrust action to restore competition, the upward distributions hidden inside the “free market” will become even larger.
By: Robert Reich, The Robert Reich Blog, May 24, 2015
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