Saturday, August 1, 2015

JOHN ADAMS DESTROYS REPUBLICAN TALKING POINTS ON ECONOMIC POLICY IN ONE SENTENCE


- Mark 

SEATTLE BILLIONAIRE NICK HANAUER EXPLAINS HOW HIGHER WAGES CREATES JOBS






I would normally post a link to this in a Weekend Reading on my blog, but this piece is a gem. So I'm posting it in its entirety. From the "Other 98" the following is the prepared testimony that Seattle billionaire Nick Hanauer delivered before the wage board in New York City on Monday, June 15th, 2015. Bold italics are mine. Enjoy.
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I’d like to start with a quote that may be familiar to you:
From our perspective, raising the minimum wage is a job killer…If the minimum wage were increased, there would be price inflation for consumers or we would likely employ fewer people.—Domino’s Pizza CEO David Brandon.
Raising the wage above $5.15 is a “job killer” at Domino’s? According to their 10-K filings, Domino’s and their franchisees currently employ 220,000 people—an increase of more than 70,000 (almost 30%) since 2004.
“When wages go up, employment goes down.” This so-called “theory” is presented by industry and the economists we employ, as if it is an immutable law of physics describing the real world. The focus of my testimony this morning is to show that it is not.
It’s not just that this claim isn’t always true. Or that it isn’t even usually true. It’s more or less never true. The claim that when wages rise, employment shrinks does not describe how the real world works. It is a scam and an intimidation tactic. The only thing true about this claim is that if business owners like me can get workers to believe it is true, that will be very advantageous to business owners like me. Which is why we say it again and again and again, even though it’s not true. It is really just a polite way of saying “I am rich, you are poor. I prefer to keep it that way.” Saying that if wages go up, the economic sky will fall is what I call “Chicken Little Economics.”
According to the U.S. Department of Labor, “a review of 64 studies on minimum wage increases found no discernible effect on employment.” And contrary to popular belief, relatively large minimum-wage hikes like those recently passed in Seattle, San Francisco, and Los Angeles are not unprecedented. For example, the federal minimum wage jumped 88% in one year, from 40 cents an hour in 1949 to 75 cents in 1950. Yet despite the usual warning from the Chicken Littles at the National Association of Manufacturing that the hike would prove “a reckless jolt to the economic system,” unemployment plummeted, from 5.9% in 1949 to 2.9% in 1953.
Likewise, my home state of Washington raised the minimum wage for tipped workers by 85% between 1988 and 1990—yet over the following decade restaurant employment growth somehow managed to outpace the nation as a whole.
I live in Seattle, the first major city in the US to enact a $15 minimum wage. But a high minimum wage was not a departure for us or something new. Seattle already had the highest minimum wage in the country. Rather, $15 was a continuation of an economic strategy that already was allowing our city to outperform yours.
Our current state minimum wage is $9.47—30% higher than the federal minimum. Seattle’s minimum wage is now $11.00 , 52% higher than the national minimum. But we have no tip penalty in our state, so our tipped workers make $11 plus tips, 513% higher than the federal tipped minimum of $2.13, and more than twice the $5 still paid here in NY.
So, if the good people from the industry were right, that a higher minimum wage killed jobs, then we should have no restaurants in Seattle, right? You would have to bring food and cooking equipment when you came to visit us in the hinterlands. How could it not be otherwise, with these stratospherically high wages?
But here’s a really odd thing. Not only do we still have some restaurants in Seattle, we have a lot of them. In fact, we have more of them per capita than even—wait for it—New York City. According to a Bloomberg analysis, of all major cities in the US, Seattle ranks second in restaurants per capita. New York is number four. Read it and weep, New York. OK, so surely the number one spot will be held by some low-wage paradise, right? Not hardly. The number one spot is San Francisco, the only place in America that pays restaurant workers $12.25, even more than Seattle. Why? How can this be? They told us that high wages killed jobs!! And business! And the economy!
Nonsense.
Seattle has more restaurants than New York because that’s how capitalism works. The fundamental law of capitalism is: when workers have more money, businesses have more customers, and need to hire more workers. In places where wages are high, business is good—particularly for restaurants.
Let me say that another way. When restaurants pay restaurant workers enough so that even they can afford to eat in restaurants, that isn’t bad for the restaurant business—it’s great for it, despite what the good folks at the National Restaurant Association may tell you.
With the highest minimum wage in the country, my state somehow manages to outpace the rest of the country in small business job growth.
According to Paychex IHS Small Business Job Index, Washington, after leading for most of the last two years, is still number two in small business job creation. Why? Because a person earning $7.25 an hour, or $2.13 plus tips, isn’t eating in restaurants. Or visiting the hair salon. Or taking piano lessons. Or sending mom flowers on Mother’s Day.
So why the disconnect? Why do so many people—good people—claim that when wages go up it will be bad for employment and the economy? And yet, it never is. The answer is simple.
From the point of view of the individual business owner, paying workers more is bad. Paying them less is good. But only from the point of view of the individual business owner—which is as far as most business owners think.
Here’s how that thinking goes. I’ll run my business and pay poverty wages and make high profits. And hopefully, everyone else who runs a businesses will pay their workers well. Your workers have the money to buy what my company makes. But, sadly, my workers will not be able to reciprocate and buy the products your company makes. Your workers will pay taxes. Sadly, my workers won’t be able to afford taxes. In fact, they will need taxpayer-funded services like food stamps and Medicaid that your workers’ taxes will pay for.
So I ask you: who wouldn’t want that deal? But the problem with that deal is that it is both morally questionable and economically unsustainable. It’s what we call a free rider problem. Because while it is awesome if I can get you to go along with that deal, it won’t work out if everyone gets that deal. Because if every company owner paid every worker poverty wages, then who will buy the stuff? And who will pay the taxes?
All human endeavors depend on solving obvious collective action problems. Should we put our own fires out? Or should we have a fire department? Should we hack our way through the forest to visit and trade? Or should we build roads? Should only some businesses pay workers enough to support themselves without tax payer assistance? Or should all businesses be required to do so?
It’s pretty obvious to me that the latter is the only answer. And it’s also really obvious why business people and industries who currently have this incredible deal—they pay poverty wages, while being supported by businesses who pay decent wages—want to keep that deal. Who wouldn’t? But wake up, New York. That is what is going on here. That is what is going on every place industry objects to paying workers fair wages. And it always has.
Raising wages for fast food workers won’t reduce employment or harm business. The people saying it will are simply trying to scare you and intimidate their workers. In fact, paying your fast food workers decent wages will be great for those workers, great for business and great for New York’s taxpayers too. And it may finally give you New Yorkers a shot at having a restaurant industry as robust as the one we enjoy in the hinterlands like Seattle and San Francisco.
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- Mark 

Friday, July 31, 2015

READING FOR THE WEEKEND (7-31-15)

40 years ago today (July 31, 1975), the Teamsters' Jimmy Hoffa disappeared. 

Jimmy Carter: The United States is an "oligarchy with unlimited political bribery" (The Intercept).

When the hunter becomes the hunted - the American dentist who paid $55,000 to kill Cecil the Lion now receiving death threats (Business Insider).

After being asked to call, the hunter of Cecil the Lion contacts federal authorities (Huffington PostCNBC).

China dumps U.S. treasuries at record rate (sott.net).


CONSERVATIVE NIGHTMARE:  EASY VOTING & EDUCATED VOTERS
Under new Oregon law, all eligible voters are registered unless they opt out (LA Times).

The rights fear of education: What I learned as a (former) conservative military man (Salon).



MORE CLIMATE NEWS
Climate change skeptics may be about to lose one of their favorite arguments (Washington Post).

We'll probably be paying for this too ... Florida leads nation in property at risk from climate change (Miami Herald).

Alaska's terrifying wildfire season and what it says about climate change (Washington Post).

It's not climate change - It's everything change (Medium Matter).


RACE IN AMERICA ... IS THIS THE 21st CENTURY?
This 1956 guidebook for black travelers - "The Negro Motorist's Green Book" - is an important reminder of America's racist past (Fusion).

'Collective Healing' at Black Lives Matter convergence ends with police pepper-spraying teen (Nation of Change).


TRYING TO UNDERSTAND DYSFUNCTIONAL AMERICA
It's not who he is, it's who he hates: The secret to Donald Trump's toxic appeal (Salon).

Texas governor vetoes mental health legislation because he doesn't believe mental illness is real (Green Village Gazette).

Addiction: It's not you, it's your cage (Huffington Post).

Growing Up Inside: How the cards are stacked against America's 'youngest murderers' (Yahoo News).


THE CHANGING FACE OF AMERICAN HEGEMONY
China and Russia lay foundation for massive economic cooperation (Foreign Policy).

How China and Russia are running rings around Washington establishment politics (Salon).

The balance of power just changed in the Middle East (Nation of Change).


DAMMIT, WE NEED MORE GUNS ... OR DO WE?
Florida road rage incident turns deadly in horrifying 'stand your ground' killing (Raw Story).

New Harvard study obliterates every single NRA lie about guns (Addicting Info).


MAPPING NORTH AMERICA
Which of the 11 American nations do you live in (Washington Post)?

Nine nations of North America, 30 years later (NY Times).


FOX NEWS & THE CLOSING OF THE CONSERVATIVE MIND
Sean Hannity is killing the GOP: Fox News & conservative media have the party in a stranglehold (Salon).

They don't give a damn about governing: Conservative media's influence on the Republican Party (Harvard's Shorenstein Center on MP & PP).

David Frum in 2010: "Republicans originally thought that Fox worked for us and we're discovering we work for Fox" (ABC News).

What David Frum's firing from the AEI tells us about conservative think tanks ... they're supposed to "serve as made-to-order propagandists" (Harper's Magazine).

David Frum and the closing of the conservative mind (Bruce Bartlett's Blog).


MISCELLANEOUS
What do you know ... cost growth in Medicare has been slower than in the private sector (Paul Krugman / NY Times).

Princeton Study: The U.S. is an oligarchy, not a democracy (BBC).

IMF: No bailout for Greece (Business Insider).

Deal with it - Tom Brady and the Patriots are cheaters (Boston Globe).

- Mark

REPUBLICAN PARTY: "PLEASE, DON'T VOTE ... BUT IF YOU DO, BE PREPARED TO BE HARRASSED"

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Over the years I've written or posted about Republican efforts to manipulate or discourage voting in America. Recognizing that their message and platform doesn't resonate with women, people of color, or America's youth the GOP has gone out of its way to make it harder for these groups to vote.

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To learn more about these efforts you can click on the links provided above, or you can check out this clip - which mocks the real goal behind GOP voter ID laws (among others). It's sardonic humor at its finest.

Enjoy ...

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And, yes, I'll try and post this again a few months before the 2016 elections.

- Mark

Thursday, July 30, 2015

ANOTHER LOOK AT AMERICA'S WELFARE QUEENS ... IT'S NOT WHO YOU THINK THEY ARE


Over two years ago I wrote how corporate welfare and tax breaks for the rich outpaces what we spend on general welfare programs. While tax breaks for corporations and higher income groups are confusingly referred to as "tax expenditures" the net effect is they cost the U.S. Treasury well over $1 trillion

These tax breaks are usually write-offs and deductions that come in the form of subsidies, legal protections, and various legislative gifts. Because they cover so many areas, they have also created a sense of tax entitlement for America's wealthiest class. For a glimpse into the entitlement mindset one needs to look no further than the state of New York's tax breaks for millionaire yacht owners.


The sense of tax entitlements is so entrenched that financial analysts and wealth managers (yes, my friends in the field too) speak of financial subsidies and specialized tax breaks like they're gifts of nature, as if they're part of the periodic table of the elements.

Below is a list of just ten tax expenditure categories, which contribute to our $1.1 trillion tax deduction bonanza each year.

The Washington Post took a look at these 10 deductions, which you can see here.

In the FYI category, the $1.1 trillion in tax expenditures discussed here does not include the more than $4 trillion we dumped into Wall Street after 2008.

At the end of the day, we need to think about our priorities as a society. For me, they're quite clear. And they don't include subsidizing the lifestyles of those who have the highest incomes, and then claim to be rugged individualists who get no help from the government.



- Mark

FYI: From Forbes magazine we get "15 Ways to Turn Your Bucket List Into a Tax Deduction."

Wednesday, July 29, 2015

WORLD RECORD SEMI TRUCK JUMP

In the FYI category, I would pay to see this event with my son ...


- Mark

RETIREMENT SCAMS, STRAIGHT FROM WALL STREET (Part II): Put Wall St. in Charge of Social Security?

Wall Street and their brokers want our social security accounts. What could go wrong?

In "Retirement Scams, Straight From Wall Street (Part I)" I discussed Wall Street's penchant for putting their interests above their clients. I wrote the post not just to "let the clients beware" of how their accounts are used by others. I wrote about Wall Street scamming clients because we are being told - once again - that Wall Street is the best place for your money since, you know, market players are rational and know what they're doing.

Never mind that Wall Street has been rescued so often since the 1980s that it's hard (for me, at least) to keep a straight face when anyone discusses the discipline and magic of the market today


Never mind that Wall Street has been the beneficiary of so much artificially cheap money from the Federal Reserve that the once mocking reference to the "Greenspan Put" has been replaced with
 a confused sounding "Quantitative Easing" so ordinary Americans never catch on to the financial welfare.

Never mind that after a string of market bailouts that Wall Street still needed the Mother of All Bailouts, which included an infusion of well over $4 trillion after 2008 - plus additional guarantees of $14 trillion - for their market bets. 


So, yeah, don't pay attention to the financial wizard behind the curtains. 




With neither history nor market fundamentals on their side, one has to wonder why we're being asked to trust Wall Street one more time. 

The reason why is built on a retirement scam for the ages, straight from Wall Street.


THE SMOKE & MIRRORS BEHIND PRIVATIZATION
The suggestion that market players know what they're doing is part of a larger strategy designed to transfer money in the social security trust fund over to Wall Street. To do this the Republicans need to talk about protecting social security. The problem is there's nothing wrong with social security. The reality is "protecting social security" is a deliberate scare tactic, and a GOP Trojan Horse. 

The GOP needs you and me to believe that social security is going broke. It's the only way they can propose their solution, which is to "privatize" the program. Don't be confused by the pitch. In real simple terms privatization is another way of saying let's transfer your social security account over to Wall Street.  



To do this the GOP is pushing impressively sounding plans that create "private retirement accounts" for you and me. Again, let's not be fooled by language. The real goal is to gut and destroy social security by shifting the trillions we have in social security accounts into Wall Street managed accounts. 

The problem with this plan is that - with the exception of Paul Ryan a few years back - no one in the GOP is saying, "Let's hand over the trillions we have in the social security accounts to Wall Street." That would be political suicide. Even Donald Trump isn't crazy enough to say it (then again, who knows about tomorrow). 


So it's all smoke & mirrors for the GOP, and begins with the scary sounding plan to protect social security since it's going broke.


THE SMOKE ...
Here's the problem with the GOP plan. It's based on a lie. Actually, it's based on many lies. I'll discuss just two here.  

Lie #1: Social security is going broke.

I've written and spoken about this lie so often it's just easier for me to list several op-eds and other social security posts for you to review.
"The 'Social Security Is Going Bankrupt' Lie" (Bakersfield Californian, 12-17-12). 
"The Stock Market vs. Social Security" Part I (Which Pays More?), Part II (Worse Case Scenarios), and Part III (Privatization ... A Bailout in Perpetuity). 
"No 'Crisis' in Social Security: National Leadership in 'Crisis' as it Attempts to Dupe America" (Bakersfield Californian, 3-27-05)
Not only is the social security program good, but our nation owes the "trust fund" trillions of dollars. Why do we owe it trillions? Because the program is self funding, and has generated such a large surplus that successive presidents - both Republican and Democrats - have raided the surpluses to run the country.

There's more. Much more. So let me repeat. Social security is not going broke. The only "protecting" it needs is from the financial sycophants in Congress who want to hand social security over to Wall Street. 


This brings us to our second lie.

Lie #2:  We can rescue and protect social security by letting private market players - and especially those on Wall Street - manage "private" social security accounts. 



Incredibly, we've done something like this before. Let's take a look.

THE MIRRORS ... WE'VE 'PRIVATIZED' BEFORE
In 2009 I wrote about Bush administration appointee Charles E.F. Millard. He was put in charge of the Private Benefit Guaranty Corporation (PBGC), the federal agency that manages the retirement fund of 44 million retirees.

The PBGC is a government managed pension program that has absorbed retirement plans from collapsed industries and bankrupt companies. The goal of the PBGC is to make sure people who worked and paid into company sponsored retirement accounts get what they paid for, even if the company or industry went bankrupt or no longer exists.


Here's where it gets fun. 


For years the PBGC embraced a very conservative market strategy. They didn't go after "can't lose" or high paying "double your money" derivative markets. They played it safe and purchased boring but stable products, like government bonds. 

Then Charles E.F. Millard - who came from the financial sector - was appointed as head of the PBGC. Then he had a market epiphany. 


Months before the market crashed in 2008 Millard put almost all of the PBGC's very stable $64 billion account into the market. He wanted to grow the fund, as it were.


In effect Millard was "privatizing" the PBGC's portfolio by turning it over to Wall Street. A once stable and protected multi-billion dollar portfolio account was sent to a place where market players could bet on the stock market and emerging market accounts

Then the market collapsed. Oops.



Millard would later say that he can't be criticized for making such an ill-timed and famously bad decision because we don't know how the markets will look in the future. 

Yeah, and that lemon of an automobile the used car dealer sold you actually works, as long as you let it coast down hill.


CONCLUDING COMMENTS
With investors losing 5-10 percent of their long-term savings due to "conflicted" advice from brokers and wealth managers, we know that at least $17 billion from private 401k accounts gets transferred to brokers. And it's all legal. This alone should give pause to any privatization talk.


For those of you pointing to our soaring stock market, suggesting that private accounts would be soaring too - so none of this matters - I have one thing to say: Get a life. 

Wall Street's doing fine because we dumped over $4 trillion into the market in the Mother of All Bailouts, and have committed another $14 trillion. The financial magic we're seeing on Wall Street has nothing to do with market fundamentals, and everything to do with taxpayer backed bailouts, and "magically" appearing Federal Reserve credits and guarantees for market players. 

By now you're probably wondering, "So if history and market fundamentals aren't on Wall Streets side, why should we dump our social security funds into Wall Street accounts?". 


The answer is really simple.  We shouldn't. The proposal is a scam. 




Creating private social security accounts - or privatizing social security - guarantees that trillions of dollars will be dumped into the market, in perpetuity. It's designed to insure that the bailout gravy train for Wall Street that started in 2008 continues. 
Best of all, with the federal government insuring that the "rents" are collected Wall Street doesn't have to worry about the peasants doing something irrational, like stopping payments when market players screw things up again (and they will).

So, yeah, privatizing social security is a Trojan Horse. Worse, it's a retirement scam straight from Wall Street. 

- Mark

"DO AS I SAY, NOT AS I DO" ... CONSERVATIVE ADVICE, AND THEIR GROWING VICTIMHOOD REALITY

What conservatives say and do are two different things. The incredible part is they don't see it. Via fusion.net ... 


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- Mark

Tuesday, July 28, 2015

BILL COSBY'S ACCUSERS SPEAK OUT

This is an extraordinary review from New York magazine: "'I'm no longer afraid': 35 women tell their stories about being assaulted by Bill Cosby and the culture that wouldn't listen."


- Mark 

FIRST AMENDMENT RIGHTS AND HOLOGRAM CONCERTS ... EVEN A DIGITAL LIKENESS IS NOW A THREAT?


In this Rolling Stones piece, contributor John Knefel asks if city officials in Hammond, Indiana and Chicago, Illionois are treating rapper Chief Keef like a terrorist. After the city of Hammond shut down a digital performance by the artist, they claimed that the rapper's lyrics and show posed a threat to the safety of the general public.


Using language more appropriate for terrorist threats, government officials are arguing that public safety is the issue here. Their rationale seems to be that an ounce of prevention is better than a pound of cure.


In Chicago the office of Mayor Rahm Emmanuel called off a Chief Keef concert, referring to Keef as "an unacceptable role model" whose music "promotes violence," which "posed a significant public safety risk" - even if he was not present but appearing in hologram form.


Without drawing any parallels to the messages, it's instructive to review Robert Kennedy's comments to the Sheriff and D.A. of Kern County (California) on how the First Amendment and the U.S. Constitution are supposed to work in America.



If we really want to do something about public safety I suggest we address the conditions that drive someone like Chief Keef to carve his message the way he does. Killing the messenger has never been a good idea, especially because of the threat it poses to America's First Amendment rights.

- Mark 


Addendum: In the FYI category, the Kennedy clip captures an iconic moment between Senator Robert F. Kennedy and Kern County Sheriff Roy F. Galyen in 1966. The exchange between Kennedy and Galyen focused attention on Kern County law enforcement in general, and Sheriff Galyen in specific, because they had a habit of arresting picketing farm workers organized by UFW co-founders Cesar Chavez and Dolores Huerta, which I discuss here.