• The Budget Fight Was the First Skirmish in the War for the Soul of the Democratic Party

    Dec 12, 2014Richard Kirsch

    Democrats had the leverage to nix a deal that opens the door to more Wall Street bailouts, but they caved in to Republican blackmail.

    Progressives lost the battle over the budget last night because President Obama and a minority of Democrats took the side of Wall Street. It is the first of many losses we will see in the next two years as Republicans relentlessly pursue their corporate agenda. The bigger question is whether progressives will lose the war in the Democratic Party.

    Democrats had the leverage to nix a deal that opens the door to more Wall Street bailouts, but they caved in to Republican blackmail.

    Progressives lost the battle over the budget last night because President Obama and a minority of Democrats took the side of Wall Street. It is the first of many losses we will see in the next two years as Republicans relentlessly pursue their corporate agenda. The bigger question is whether progressives will lose the war in the Democratic Party.

    Blowing up this budget deal should have been easy for Democrats. They were handed a perfect message: the Republicans are willing to shut down the government so they can bail out Wall Street the next time it wrecks the economy.

    Democratic votes were needed because a group of 67 right-wing Republicans opposed the bill on the grounds that it did not go far enough in opposing the president’s executive order on immigration. The Republican split gave Democrats the leverage to demand that the bank bail-out provision be stripped from the bill.

    But with President Obama twisting enough Democratic arms (57 in total) to give in to the Wall Street-engineered Republican blackmail, that powerful, winning message was diluted.

    Democratic negotiators also agreed to the deal to repeal a provision of the Dodd-Frank law that prevents government bailouts of banks who engage in a form of risky trading. Their argument was “Republicans made us do it; it’s the best we could do.” But of course, with all the Wall Street money going to Democrats, that’s a convenient excuse. They can turn around and wink at the lobbyists who deliver Wall Street campaign contributions, playing a game in which the dupes are the American people.

    The bailout of banks and Wall Street speculators remains deeply and broadly unpopular. It is an issue that generates anger among grassroots activists on the left and the right. For Americans who see Wall Street billionaires getting richer by gaming the system while families struggle to meet the basics, there could be no clearer contrast.

    Progressive Democrats fought back. In a rapid-fire display of the energy and nimbleness of progressive organizations and champions in Congress, the deal was quickly exposed.

    Senator Elizabeth Warren laid it out clearly on the Senate floor: “We put this rule in place because people of all political persuasions were disgusted at the idea of future bailouts… Republicans in the House of Representatives are threatening to shut down the government if they don’t get a chance to repeal it.”

    In the House, progressive Democrats joined the call. California Rep. Maxine Waters, the senior Democrat on the House Financial Services Committee, said, “We don't like lobbying that is being done by the president or anybody else that would allow us to support a bill that ... would give a big gift to Wall Street and the bankers who caused this country to almost go into a depression.”

    The vigorous pushback from progressive groups and their allies in Congress convinced Minority Leader Nancy Pelosi to break with the White House. Pelosi said that they were being “blackmailed” to vote for the bill, which she called “a moral hazard.” Still, Pelosi did not use her considerable powers of persuasion to get fellow Democrats to vote no.

    For the next two years we will see Republicans do everything they can to deliver for corporate America at the expense of the American people. The only question is whether Democrats will enable them. Will President Obama continue to make compromise after compromise? Will Democrats in the Senate use the filibuster to block the Republican attack on working families? Will enough Democrats in the House keep coming to the rescue of a divided Republican Party?

    We will see the same fight in the Democratic primary for president. Will Hillary Clinton break from the Wall Street wing of the party with which she aligned as a senator from New York? Will her challengers make the same sharp contrast that Senator Warren did, when she began her speech on the Senate floor by asking, “Who does Congress work for? Does it work for the millionaires, the billionaires, the giant companies with their armies of lobbyists or lawyers? Or does it work for all the people?”

    As I wrote after the election last month, Democrats who used a populist economic message – who named the corporate villains and declared that “we all do better when we all do better” – won. Democrats who ran to the mushy middle lost.

    But this is not just a fight for the soul of the Democratic Party, it’s a fight for our very democracy. As Justice Louis Brandeis said almost a century ago, “We may have a democracy or we may have great wealth concentrated in the hands of a few, but we cannot have both.”

    Americans are yearning for champions who stand up for them. If we have any hope of changing the direction of our economy from enriching the rich at the expense of the rest of us and of recapturing our democracy from the CEO campaign contributors and Wall Street bag men, it will be because progressive forces and elected champions stand up not just to Republicans but to President Obama and any Democrat who takes the side of Wall Street against America’s working families.

    It is clear that progressives and the American people will lose battle after battle in Congress over the next two years. The real question is whether we will lose the war. 

    Richard Kirsch is a Senior Fellow at the Roosevelt Institute, a Senior Adviser to USAction, and the author of Fighting for Our Health. He was National Campaign Manager of Health Care for America Now during the legislative battle to pass reform.

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  • The Universal Declaration of Human Rights at 66: How Do We Make the Promise a Reality?

    Dec 10, 2014Ariel SmilowitzMonika Johnson

    Full implementation of the UDHR isn't a pipe dream, but it will require us to look beyond governments and international institutions.

    Sixty-six years after the adoption of the Universal Declaration of Human Rights, who is responsible for upholding our most basic rights as humans? And are rights truly universal, or are they relative?

    Full implementation of the UDHR isn't a pipe dream, but it will require us to look beyond governments and international institutions.

    Sixty-six years after the adoption of the Universal Declaration of Human Rights, who is responsible for upholding our most basic rights as humans? And are rights truly universal, or are they relative?

    These questions are indelibly inked into the fabric of our economy, society, and political system. Following World War II and the creation of the United Nations, the UDHR represented “the first global expression of rights to which all human beings are inherently entitled.” Championed by Eleanor Roosevelt, the widely accepted manifesto built upon the work of her husband, who famously declared that worldwide democracy should be founded upon four essential freedoms.

    This primordial soup of rights-based ideology and dialogue resulted in the birth of the United Nations, and subsequently a handful of substantial treaties, frameworks, and guiding principles for our quest to define and maintain human rights globally.  

    However, after decades of debate, we have yet to answer the ultimate question: who is responsible for ensuring this productive discourse is transformed into tangible action? Earlier this year, political scientist Stephen Hopgood proclaimed that we have reached “the end of human rights.” Hopgood argued that despite successful recognition of all human beings’ moral equivalence (no minor feat), little has been done to meld regional differences in interpretation and practice. In other words, our attempts to answer the critical question of implementation -- whether through international declarations like the UDHR, conventions like the International Covenant on Civil and Political Rights, or the creation of the UN Human Rights Council -- have fallen short.

    As we reflect on the anniversary of the UDHR, perhaps it is time for us to reconsider and expand our approach toward human rights. Leaders of the classical human rights movement envisioned a world in which governments agreed on and multilaterally implemented a set of principles. Since that time, we have witnessed immense globalization, putting civil and political rights at odds with economic and social ones while introducing a set of new players, including multinational enterprise.

    Consequently, these conventions, declarations, and institutions are not fully equipped to enforce human rights at every level of society. It is necessary for us to be inclusive of all influencers, including the private sector, non-state actors, and other organizations and groups, in order to truly realize a society in which every person can fulfill his or her full potential -- the dream of FDR’s progressivism and Eleanor’s Declaration of Human Rights.

    Beyond Institutions: Global Enterprise and Human Rights

    If governments and international institutions are unable to police human rights at every level, non-state actors must accept responsibility for integrating dignity into their practices. While vast ground remains to be covered, many companies are taking the lead on assessing their spheres of influence and ensuring their profits do not come at the expense of the choices and livelihoods of others.

    One such company is Carlson, a corporation in the hotel and travel industries that works to stop human trafficking crimes. According to the International Labor Organization, 14.2 million people are victims of forced labor exploitation in economic activities worldwide. Despite 90 percent of countries enacting legislation criminalizing human trafficking under the UN Convention against Transnational Organized Crime, it persists as tragic but preventable collateral damage of everyday economic and social activity.

    Upon realizing that traffickers regularly use the hospitality industry to transport victims, Carlson used the valuable information provided by UNODC to be part of a solution. Now, they train their employees to recognize and report trafficking and have partnered with the State Department to educate travelers on the sexual exploitation of children.

    For Ford Motor Company, being a more responsible business wasn’t as simple. Forced labor was buried deep in its supply chain, far from Detroit in Brazil’s charcoal mines, which provide an ingredient in steel production. When slave labor was exposed there in 2006, Ford was purchasing pig iron made from refined charcoal and using it in Cleveland to manufacture cars sold nationwide. The company took action to halt the use of pig iron and ensure its supply chain procured materials responsibly. Today, it collaborates with the State Department, the ILO, and the Brazilian National Pact to eradicate forced labor and improve transparency in manufacturing.

    Like Ford’s model, supply chain innovation offers an opportunity for rising leaders to use the economic influence of private business to impact human rights. Both of these companies leveraged their own success to help solve a global problem. They confronted their spheres of influence and were willing to work with partners to develop solutions.

    Similarly, Unilever, the maker of products including Dove soap and Ben and Jerry’s Ice Cream, partnered with Oxfam in 2013 on a supply chain analysis of its operations in Vietnam. The partners sought to better understand the implications of the UN Framework for Business and Human Rights and Global Compact Principles on global companies, and to improve conditions for thousands of workers along their manufacturing chain. Oxfam discovered that while Unilever was committed to high labor standards, policies ran only skin deep; Vietnamese managers were not equipped to implement them and lacked internal reporting mechanisms for violations.

    Oxfam dissected Unilever’s business practices and concluded that while Unilever still had a long way to go, its positive corporate culture and long-term relationships with suppliers make it well positioned to confront the root causes of labor problems and authentically attempt to solve them.

    Unilever, Ford, and Carlson did not sacrifice profits or shareholder obligations. Instead, they participated in a global conversation on human rights -- one aggregated by the UN Global Compact -- and underscored the importance of effective, cross-sector collaboration to reform their own practices.

    A New Legacy for Our Generation

    Each of these entities demonstrates the many spheres of influence at play in the pursuit of full human rights and dignity for all. What if every company took the same initiative to understand the social repercussions of its actions?

    We need to rethink human rights by recognizing the power of our own choices upon others. Everyone is responsible for upholding human rights, whether as a part of your day job or as a member of a community. Seemingly benign actions -- how much you pay your employees or which charities you support -- are manifestations of your own unique interpretation of what dignity and rights mean.  

    The UN, NGOs, and other global institutions have provided a priceless platform for dialogue on human rights. Without the consensus-building mechanisms they provide, there would be no Universal Declaration of Human Rights, no “naming and shaming” of human rights abusers, and no coordinated effort to stop the world’s cruelest atrocities.

    And yet, as we continue our efforts to avert the "end of human rights," what will our own generation's legacy of implementation be? As this generation rises to power in public and private leadership roles, those at decision-making tables across the spectrum will have an opportunity to think critically about their own actions. The foundation and forums, from the UDHR to the UN Global Compact, certainly exist. Now, it’s up to us to ensure a future in which human rights are celebrated not only at the institutional level, but at a more personal, human level as well.

    Ariel Smilowitz is a senior at Cornell University majoring in Government and the Northeast Regional Policy Coordinator for the Roosevelt Institute | Campus Network.

    Monika Johnson is a member of the Roosevelt Institute | Campus Network's Alumni Advisory Committee.

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  • Let the Fed Lend Directly to Cities and States to Save Taxpayers Billions

    Dec 9, 2014Saqib Bhatti

    Using our central bank's resources to save cash-strapped local governments from bankruptcy would prevent economic devastation and bring other benefits.

    Using our central bank's resources to save cash-strapped local governments from bankruptcy would prevent economic devastation and bring other benefits.

    The Federal Reserve should be allowed to make long-term loans directly to cities, states, school districts, and other public agencies so taxpayers can get low interest rates and avoid predatory Wall Street fees. Currently, banks borrow money at near-zero interest rates from the Fed while public entities are forced to pay billions in fees and interest each year. Cities and states should have access to the same low interest rates that banks enjoy so that taxpayer money earmarked for infrastructure improvement and other public goods will no longer be spent subsidizing corporate profits. If the Fed lent directly to cities and states at low interest, it would free up public dollars for services like education and mass transit. Direct loans from the Fed could also help alleviate fiscal crises and become a tool for promoting stronger environmental and labor protections.

    Fiscal crises and municipal bankruptcies are typically caused by revenue shortfalls. The definition of "municipal insolvency" is the inability to pay debts as they come due. A city is insolvent and can file for bankruptcy if it is not bringing in enough revenue to be able to pay its bills on time. For example, although there were many political and economic causes for Detroit’s bankruptcy, the technical reason that Detroit went bankrupt was that the city had a $198 million revenue shortfall and could not pay all of its bills. A $198 million loan could have allowed Detroit to avoid bankruptcy. In the future, we can prevent untold devastation if the Fed can provide affordable loans to municipal borrowers.

    Detractors will argue that it would be imprudent to use federal taxpayer dollars to make loans to distressed cities and states that might be unable to pay them back. However, the reality is that municipal borrowers in the United States have extremely low rates of default because their debt is ultimately backed by tax revenues. According to Moody’s, one of the three major credit rating agencies in the country, the default rate for municipal issuers that it rates was 0.012 percent between 1970 and 2012. Even though there has been a slight uptick following the financial crisis, the likelihood of municipal default is still virtually nonexistent.

    If a municipality defaults on a loan, it is because elected officials made a political decision to default rather than raise taxes. In the case of Detroit, state elected officials in Michigan made that decision by cutting revenue-sharing with the city and prohibiting it from raising additional taxes. The Fed could take proactive steps to address this political problem. For example, it could attach a provision requiring elected officials to raise taxes on large corporations and high-income earners to avoid defaulting on loans from the Fed.

    Direct loans from the Fed could also be used to promote fair and sustainable development. Either Congress or the Fed could establish minimum labor and environmental standards that cities and states must abide by to qualify for a loan from the Fed. For example, cities that borrow from the Fed could be required to pay all workers a living wage. Any state that borrows from the Fed for highway repairs could be required to establish stronger fuel efficiency standards for cars. The Fed could also prioritize loans for green infrastructure improvements. This would ensure that direct loans from the Fed support long-term national interests.

    Currently, the Fed already has the power to purchase municipal debt securities that mature within six months. In other words, the Fed effectively has the power to lend to cities and states for up to six months, with some caveats. But if Congress were to pass a law allowing the Federal Reserve to make long-term loans directly to cities and states, we could start using our central bank to support the long-term financial, economic, and environmental health of our cities and states. It would allow us to cut Wall Street out of the middle and ensure that our taxpayer dollars are going toward improving our communities instead of padding banker bonuses.

    Saqib Bhatti is a Roosevelt Institute Fellow and Director of the ReFund America Project.

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  • Universities Can Prevent the Race to the Bottom for Labor Standards

    Dec 1, 2014Alan SmithJulius Goldberg-Lewis

    Some of the negative changes in the workplace brought on by new technologies can be countered by institutions like universities setting higher standards.

    Some of the negative changes in the workplace brought on by new technologies can be countered by institutions like universities setting higher standards.

    The past 30 years have seen a revolution in communication and analytic technology, one that has begun to shape the nature of firms and the types of work that exist in the labor market. Internet communication technology (ICT) allows firms to share information across the world at speeds that are nearly instantaneous and practically for free. With this explosion of information has been a concerted effort on the parts of firms, governments, and individuals to capture and analyze the torrent of information being produced every second.

    ICT is driving transaction costs to zero, and with it comes a hollowing out of traditional corporate infrastructure. Tasks that were once cheaper to do in-house can now be outsourced to private contractors in the U.S. or around the world. The firms that are most heralded as ‘the next big thing’ are no longer producers of widgets, but platforms that connect individuals. Facebook and Twitter do not provide content, but provide access; Uber and Lyft are not taxi companies, but rather platforms that connect individual demanders and suppliers. On the other side, incumbent firms are using ICT to develop to-the-minute data on sales patterns, allowing them to track exactly when and where their workers are needed. Whether it’s in the form of surge pricing‘just-in-time’ scheduling, or contracting out nearly every function of a company, the use of ICT has profound and evolving implications for consumers and workers.

    With the explosion of technology has come a scramble to achieve maximum efficiency and minimal cost. As production expands horizontally, as opposed to vertically, Millennials are discovering that a life-long career simply can’t exist in a market that’s trending towards more and more freelance and contract work. One result of all this is that Millennials have begun to look to the stories of retirement parties and 30-year Rolexes as anachronistic Mad Men-style stories of an age long gone. We don't think of ourselves as working for the same place for long periods of time, and any notion of a pension or a retirement plan is hard to imagine. 

    The second troubling effect of this is a lack of accountability of the largest and most powerful corporations. The old economic model of in-house labor allowed labor disputes, liability, and accountability to be tracked to a single corporate entity. As firms increasingly turn to specialized contractors to build their websites, staff their calling centers and warehouses, drive their taxis, and run their cafeterias, corporate responsibility becomes similarly defuse. When workers lose overtime pay at an Amazon fulfillment center, should the contractor or the parent company be at fault? Should the private contractor hold all the accountability, or should Amazon accept some responsibility? There is no sense that this new wave of "sharing economy" businesses is doing anything other then creating structured marketplaces, and skimming money off the top. This leaves the people doing the work – as Uber drivers and Airbnb hosts – without anything to hold on to. As firms continue to contract, and subcontract, the economic befits to workers shrink dramatically, and there is an increased incentive to cut costs and corners. These cases are just coming to the surface, and no doubt will shape the labor landscape immensely.

    It is precisely because of this complex and rapidly changing social situation that anchor institutions like colleges and universities need to take the lead in providing wages and careers that make sense. Anchor institutions, which are generating more attention in the post-recession economy, are those mission-driven institutions that are large sources of capital, purchasing, and employment, and which are tied to their communities. Unlike traditional firms, an anchor cannot move to another country for lower taxes, and they are often public or receive large amounts of public investment. Anchors hold a special place in our society: they are not corporations governed by a single-bottom line reality, and their missions are often directed toward and even mandate the promotion of the social good.

    They also have real economic clout: One classic anchor type, universities, account for approximately 3 percent of U.S. gross domestic product, and they employ more than 3 million people. The hospital industry has an even larger impact with some 5 million employees. And these anchor institutions, tied as they are to location, are perfectly positioned to end the race to the bottom that is happening in other sectors. They will be able to reap the benefits from more money being injected in a local community, and they will grow as the social safety net continues to grow around them.

    Anchors, working together, can do more than create a few hundred jobs at good wages with a real retirement plan. Anchors working together can set strong city-wide baselines for wages, and serve as a driving factor for economic development, public safety, local purchasing, and quality-of-life initiatives. Further, anchors actually have a values-based, mission-driven call to this work. As Millennials become a greater share of the workforce, it is on us to ensure that the economy of the future is one that promotes responsibility, accountability, growth, and equality. The technological strides of the past few decades have been enormous, and while they have allowed businesses to continue on a race to the bottom, they have also connected and mobilized a generation. In order to shift the national dialogue, the Campus Network has always believed that one must start at the local level. In order to ensure that the businesses of the future work for everyone, it must be shown that they can. The global brand of anchor institutions, from top tier universities to pioneering hospitals, have the soapbox, the moral imperative, and the means to drive this change, and a more democratic economy can begin to grow based on the successes of anchor reinvestment.

    Alan Smith is the Associate Director of Networked Initiatives at the Roosevelt Institute.

    Julius Goldberg-Lewis is the Midwestern Regional Coordinator for the Roosevelt Institute | Campus Network and a senior at the University of Michigan.

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