Daily Digest - December 11: We Don't Need Weakened Financial Regulations in the Spending Bill

Dec 11, 2014Rachel Goldfarb

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Democrats Revolt Against 'Wall Street Giveaway' In Deal To Prevent Government Shutdown (HuffPo)

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Democrats Revolt Against 'Wall Street Giveaway' In Deal To Prevent Government Shutdown (HuffPo)

Zach Carter and Sabrina Siddiqui quote Roosevelt Institute Chief Economist Joseph Stiglitz on why a provision that will bring risky derivative trades under FDIC protection is a disaster.

Warren Leads Liberal Democrats’ Rebellion Over Provisions in $1 Trillion Spending Bill (WaPo)

Senator Warren is calling on House Democrats to withhold support of the spending bill unless this derivatives provision is removed, report Lori Montgomery and Sean Sullivan.

Congress' Backroom Pension-Cutting Deal is Even Worse Than Expected (LA Times)

Michael Hiltzik details the pension-cutting measure attached to the omnibus spending bill, which he says has far fewer protections for older retirees than originally implied.

The Wall Street Takeover of Charity (ProPublica)

Donor-advised charitable funds, which are run by financial firms, aren't increasing charitable giving as much as they're making money for the firms, writes Jesse Eisinger.

Walmart Illegally Punished Workers, Judge Rules (NYT)

Steven Greenhouse reports on a National Labor Relations Board decision in California, which found that Walmart managers had illegally intimidated workers for supporting unionizing efforts.

The Economic Threat to Cities Isn't Gentrification; It's the Opposite (Vox)

With gentrification comes a higher concentration of poverty, writes Danielle Kurtzleben, and increased economic segregation comes with less economic mobility.

New on Next New Deal

The Financial Regulation Congress Is Quietly Trying to Destroy in the Budget

Roosevelt Institute Fellow Mike Konczal explains why Section 716 of Dodd-Frank was implemented in the first place, and why weakening it today would put the economy and taxpayers at risk.

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The Financial Regulation Congress Is Quietly Trying to Destroy in the Budget

Dec 10, 2014Mike Konczal

There are concerns that the budget bill under debate in Congress will eliminate Section 716 of Dodd-Frank, using language previously drafted by Citigroup. So what is this all about?

Section 716 of Dodd-Frank says that institutions that receive federal insurance through FDIC and the Federal Reserve can’t be dealers in the specialized derivatives market. Banks must instead “push out” these dealers into separate subsidiaries with their own capital that don’t benefit from the government backstop. They can still trade in many standardized derivatives and hedge their own risks, however. This was done because having banks act as exotic swap dealers put taxpayers at risk in the event of a sudden collapse. That’s it.

Why would you want a regulation like this? The first is that it acts as a complement to the Volcker Rule. As Americans for Financial Reform notes, the Volcker Rule allows banks to make markets in derivatives. What 716 does is regulate the most exotic and custom derivatives, like the custom credit default swaps that generated the financial crisis of 2008. These derivatives are the most difficult part for the Volcker Rule to manage, so 716 adds a crucial second layer of protection.

A second reason is 716 will also prevent exotic derivatives from being subsidized by the government’s safety net. As the Roosevelt Institute’s Rob Johnson notes, removing this language would “extend guarantees to complex derivatives within banks, which in turn will subsidize and encourage their overuse.” We should be finding a balance for the derivatives market, not expanding it.

The third reason is for the sake of financial stability. The major banks have been unable to produce credible living wills describing how they can go through bankruptcy without tearing down the system. There is no world in which these banks will be closer to achieving this crucial goal by cramming themselves full of even more exotic types of derivatives.

Pushing out these risky derivatives enables the financial sector to focus more on its core job. As Roosevelt’s Chief Economist Joseph Stiglitz wrote in favor of 716, “[b]y quarantining highly risky swaps trading from banking altogether, federally insured deposits (and our basic payments mechanism) will not be put at risk by toxic swaps transactions. Moreover, banks will be forced to behave like banks, focusing on extending credit in a manner that builds economic strength as opposed to fostering worldwide economic instability.”

Stiglitz reiterated this point today, saying “Section 716 facilitates the ability of markets to provide the kind of discipline without which a market economy cannot effectively function. I was concerned in 2010 that Congress would weaken 716, but what is proposed now is worse than anything contemplated back then.”

Now many on Wall Street would argue that this rule is unnecessary. However, their arguments are not persuasive.

They might argue that many people opposed this bill at the time it was proposed, and indeed it was the source of great controversy. But what they overlook is that there was already a wave of compromise on this provision during the drafting Dodd-Frank. 716 focuses mainly on a subset of risky and exotic derivatives. Under the final law, banks can still hold most types of standardized and common derivatives, like ones for interest rates. This is the vast majority of the market. Banks can also hold derivatives that they use to mitigate their own risk. There was significant debate in 2010 over how this regulation should play out, and the final language reflects this compromise.

They might also argue that the financial sector is taking care of this issue on its own. But instead of being moved out, derivatives are being moved into backstopped banks. As the former FDIC chairperson Sheila Bair notes, the “trend has been to move this activity from the investment banking affiliates, which do not use insured deposits, into the banks where the activity can be funded with cheap, FDIC backed deposits. Section 716 would at least keep certain credit default swaps outside of insured banks.”

The question of how we should regulate derivatives and the financial markets more broadly has not been settled. There’s still an ongoing debate over how derivatives will be regulated across borders. And as noted, banks are still unable to produce credible living wills to survive a bankruptcy court. It’s for reasons like this that a wide variety of people who didn’t support the initial language of 716 now oppose removing 716: Timothy GeithnerJack LewSheila BairBarney Frank, and more.

We should be strengthening, not weakening, financial reform. And removing this piece of the law will not benefit this project.

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There are concerns that the budget bill under debate in Congress will eliminate Section 716 of Dodd-Frank, using language previously drafted by Citigroup. So what is this all about?

Section 716 of Dodd-Frank says that institutions that receive federal insurance through FDIC and the Federal Reserve can’t be dealers in the specialized derivatives market. Banks must instead “push out” these dealers into separate subsidiaries with their own capital that don’t benefit from the government backstop. They can still trade in many standardized derivatives and hedge their own risks, however. This was done because having banks act as exotic swap dealers put taxpayers at risk in the event of a sudden collapse. That’s it.

Why would you want a regulation like this? The first is that it acts as a complement to the Volcker Rule. As Americans for Financial Reform notes, the Volcker Rule allows banks to make markets in derivatives. What 716 does is regulate the most exotic and custom derivatives, like the custom credit default swaps that generated the financial crisis of 2008. These derivatives are the most difficult part for the Volcker Rule to manage, so 716 adds a crucial second layer of protection.

A second reason is 716 will also prevent exotic derivatives from being subsidized by the government’s safety net. As the Roosevelt Institute’s Rob Johnson notes, removing this language would “extend guarantees to complex derivatives within banks, which in turn will subsidize and encourage their overuse.” We should be finding a balance for the derivatives market, not expanding it.

The third reason is for the sake of financial stability. The major banks have been unable to produce credible living wills describing how they can go through bankruptcy without tearing down the system. There is no world in which these banks will be closer to achieving this crucial goal by cramming themselves full of even more exotic types of derivatives.

Pushing out these risky derivatives enables the financial sector to focus more on its core job. As Roosevelt’s Chief Economist Joseph Stiglitz wrote in favor of 716, “[b]y quarantining highly risky swaps trading from banking altogether, federally insured deposits (and our basic payments mechanism) will not be put at risk by toxic swaps transactions. Moreover, banks will be forced to behave like banks, focusing on extending credit in a manner that builds economic strength as opposed to fostering worldwide economic instability.”

Stiglitz reiterated this point today, saying “Section 716 facilitates the ability of markets to provide the kind of discipline without which a market economy cannot effectively function. I was concerned in 2010 that Congress would weaken 716, but what is proposed now is worse than anything contemplated back then.”

Now many on Wall Street would argue that this rule is unnecessary. However, their arguments are not persuasive.

They might argue that many people opposed this bill at the time it was proposed, and indeed it was the source of great controversy. But what they overlook is that there was already a wave of compromise on this provision during the drafting Dodd-Frank. 716 focuses mainly on a subset of risky and exotic derivatives. Under the final law, banks can still hold most types of standardized and common derivatives, like ones for interest rates. This is the vast majority of the market. Banks can also hold derivatives that they use to mitigate their own risk. There was significant debate in 2010 over how this regulation should play out, and the final language reflects this compromise.

They might also argue that the financial sector is taking care of this issue on its own. But instead of being moved out, derivatives are being moved into backstopped banks. As the former FDIC chairperson Sheila Bair notes, the “trend has been to move this activity from the investment banking affiliates, which do not use insured deposits, into the banks where the activity can be funded with cheap, FDIC backed deposits. Section 716 would at least keep certain credit default swaps outside of insured banks.”

The question of how we should regulate derivatives and the financial markets more broadly has not been settled. There’s still an ongoing debate over how derivatives will be regulated across borders. And as noted, banks are still unable to produce credible living wills to survive a bankruptcy court. It’s for reasons like this that a wide variety of people who didn’t support the initial language of 716 now oppose removing 716: Timothy GeithnerJack LewSheila BairBarney Frank, and more.

We should be strengthening, not weakening, financial reform. And removing this piece of the law will not benefit this project.

Follow or contact the Rortybomb blog:
 
  

 

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Daily Digest - December 10: Young People Want Political Engagement Across the Calendar

Dec 10, 2014Rachel Goldfarb

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Millennials Need to Turnout Every Day, Not Just Election Day (Huffington Post)

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Millennials Need to Turnout Every Day, Not Just Election Day (Huffington Post)

Joelle Gamble, National Director of the Roosevelt Institute | Campus Network, argues that young people want to be asked not just to show up to the polls, but to be engaged in the political process year-round.

New York's Signature College Aid Program Turns 40, But Falls Short of Meeting Needs (Gotham Gazette)

Roosevelt Institute | Campus Network Leadership Director Kevin Stump proposes ways to update New York State's Tuition Assistance Program, which he argues is woefully out of date after 40 years.

Elizabeth Warren's Latest Wall Street Attack Was Her Boldest Yet (TNR)

David Dayen reports on Senator Warren's speech at yesterday's "Managing the Economy" conference, co-sponsored by the Roosevelt Institute. The senator directly attacked Wall Street's influence on financial policy.

Workers at Amazon Warehouses Won't Get Paid for Waiting in Security Lines (Bloomberg Businessweek)

Josh Eidelson reports on the Supreme Court's decision in Integrity Staffing Solutions, Inc. vs. Busk. The Court held that workers do not have to be paid for time spent waiting for security checks.

Congressional Leaders Hammer Out Deal to Allow Pension Plans to Cut Retiree Benefits (WaPo)

Michael A. Fletcher says retirees on the plans that will be permitted to make unprecedented cuts feel betrayed by this speedy congressional decision.

How Income Inequality Holds Back Economic Growth (AJAM)

A new report examines the significant link between income inequality and slowed economic growth, which cost the U.S. as much as 7 percent of GDP from 1990 to 2010, writes Ned Resnikoff.

New on Next New Deal

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

Roosevelt Institute Fellow Saqib Bhatti suggests that allowing the Fed to make long-term loans to municipalities would protect cities from economic crises and promote fair and sustainable development.

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

Ariel Smilowitz, Northeast Regional Policy Coordinator for the Campus Network, and Monika Johnson, a member of the Alumni Advisory Committee, call for an expanded approach to human rights, including non-state actors like corporations accepting responsibility.

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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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Monetary Policy Event with Paul Krugman and Senator Warren Today

Dec 9, 2014Mike Konczal
I'm very excited to share that AFR, EPI, and the Roosevelt Institute have teamed up to host a conference on monetary policy, the recovery and the financial sector today. The conference will feature keynotes from Paul Krugman and Senator Elizabeth Warren.
I'm very excited to share that AFR, EPI, and the Roosevelt Institute have teamed up to host a conference on monetary policy, the recovery and the financial sector today. The conference will feature keynotes from Paul Krugman and Senator Elizabeth Warren. It also features, among many other great panelists, friend of the blog and Roosevelt fellow JW Mason (who recently wrote about monetary policy here and here, and at the old rortybomb blog here), and who has been part of the financialization project we'll be releasing soon.
 
Though the event is sold out, EPI will be posting the video after the event, and I hope you'll watch it.
 
Tuesday, December 9, 2014
 
12:30 – 4:00 p.m. ET
 
Hart Senate Office Building 902
Washington, DC
 
Sponsored by Americans for Financial Reform, Economic Policy Institute, and Roosevelt Institute's Financialization Project
 
FEATURING
Senator ELIZABETH WARREN
Economist/columnist PAUL KRUGMAN
 
Today, pressure is building on the Federal Reserve to use monetary policy to raise short-term interest rates, a move that could short-circuit a still far from complete economic recovery. Proponents of this move argue it is needed to avert wage and price inflation and prevent excessive risk-taking in the financial sector. But there are serious questions about this argument, and there are new tools available to the Fed to influence Wall Street and the wider economy. These tools and better economic analysis could allow the Fed to better target specific concerns regarding Wall Street financial risk-taking while minimizing unnecessary drag on the Main Street economy.
 
Join Elizabeth Warren, Paul Krugman, and experts on monetary and regulatory policy for a discussion of Federal Reserve economic management. The discussion will range from what the Fed’s next moves should be in monetary policy to the ways in which the Fed can use new regulatory tools to address problems in the financial market without causing unnecessary problems in the broader economy.
 
AGENDA
 
12:30pm – Keynote by Senator Elizabeth Warren
 
1:00pm -  Panel: Monetary Policy and the Economy
 
Panelists: 
 
Josh Bivens, Research and Policy Director, Economic Policy Institute
William Spriggs, Chief Economist, AFL-CIO
JW Mason, John Jay College, Roosevelt Institute
Robert Pollin, Professor of Economics and Co-Director of PERI, University of Massachusetts Amherst
 
2:15pm – Keynote by Paul Krugman
 
2:45pm – Panel: Regulatory Tools For Managing Financial Cycles
 
Panelists: 
 
Marcus Stanley, Policy Director, Americans for Financial Reform
Jill Cetina, Associate Director for Policy Studies,  Office of Financial Research
Jennifer Taub, Professor of Law, Vermont Law School
Jane D'Arista, Author, “The Evolution of U.S. Finance"

 

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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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Daily Digest - December 9: One Strong Voice Against the Mega Cable Company

Dec 9, 2014Rachel Goldfarb

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Blows Against the Empire (Medium)

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Blows Against the Empire (Medium)

Roosevelt Institute Fellow Susan Crawford praises the new "Stop Mega-Comcast Coalition" for uniting the voices of those who view the Comcast-Time Warner Cable merger as monopolistic.

Fed’s Lockhart Still Favors Mid-2015 for First Fed Rate Increase (WSJ)

Lockhart, President of the Atlanta Fed, calls for patience regarding raising interest rates, writes Michael S. Derby, who describes Lockhart as "a bellwether of policy makers’ consensus outlook."

Congress Races to Reach Spending Deal Before Shutdown Deadline (MSNBC)

With a potential shutdown approaching at midnight on Thursday, Benjy Sarlin says Congress is working through disagreements on issues like environmental regulation and financial reform.

Are West Coast Longshoremen Spoiling Christmas? (Politico)

As their union continues to negotiate wages and benefits, Mike Elk reports that the longshoremen are accused of slowing holiday season shipping by sticking exactly to company rules.

The Lame-Duck Congress Plots to Undermine Retiree Pensions (LA Times)

A proposed change – which has no public language only days before Congress goes on vacation – would decrease the pensions of already-retired workers on certain plans, writes Michael Hiltzik.

U.S. States' Revenue Growth Picks Up But Still 'lackluster' (Reuters)

Lisa Lambert reports on a new survey on state revenues and budgets, which says that stagnant wages are keeping revenues from growing as well.

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Daily Digest - December 8: What Changes When China is the Largest Economy?

Dec 8, 2014Rachel Goldfarb

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The Chinese Century (Vanity Fair)

Roosevelt Institute Chief Economist Joseph Stiglitz considers the implications of China becoming the world's largest economy, particularly as the U.S. system perpetuates so much inequality.

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The Chinese Century (Vanity Fair)

Roosevelt Institute Chief Economist Joseph Stiglitz considers the implications of China becoming the world's largest economy, particularly as the U.S. system perpetuates so much inequality.

U.S. Jobs Report Beats Forecasts as 321,000 Positions Added in November (The Guardian)

Heidi Moore looks at the November jobs report, which surprised many economists with its strength. She emphasizes that many of the jobs created are low-wage.

Even at 321,000 Jobs a Month, It Will Be Nearly Two Years Before the Economy Looks Like 2007 (Working Economics)

Charting out scenarios for catching up with the jobs shortfall, Elise Gould points out that even a "good" jobs report like this one isn't indicative of a speedy recovery.

Recovery at Last? (NYT)

Paul Krugman considers what recent positive economic news means for our understanding of this recession. He thinks it's proof that government paralysis slowed the recovery.

Wall Street to Workers: Give Us Your Retirement Savings and Stop Asking Questions (In These Times)

David Sirota looks at current cases in which public officials have refused to release information about the fees paid to investment firms by public pension funds.

  • Roosevelt Take: Roosevelt Institute Fellow Saqib Bhatti explains how predatory municipal finance deals are harming taxpayers in his recent report.

Labor's New Reality -- It's Easier to Raise Wages for 100,000 Than to Unionize 4,000 (LA Times)

Harold Meyerson looks at the labor movement's shift toward focusing on issues that impact many workers who are not members, a project in which Los Angeles is at the center.

Elizabeth Warren Doesn't Like This Treasury Nominee. Here's Why. (Mother Jones)

Erika Eichelberger explains Senator Warren's opposition to Antonio Weiss's nomination, which is based on his lack of experience in banking regulation and coziness with the financial sector.

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Daily Digest - December 5: Policy Created This Economy – And Policy Can Fix It

Dec 5, 2014Rachel Goldfarb

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The Poor Used to Have the Most Opportunity in America. Now the Rich Do. (WaPo)

Click here to subscribe to Roosevelt First, our weekday morning email featuring the Daily Digest.

The Poor Used to Have the Most Opportunity in America. Now the Rich Do. (WaPo)

In the 1960s, the bottom 10 percent saw faster growth than the top 1 percent, but Matt O'Brien says policy has since promoted fundamental economic shifts that benefit the rich.

  • Roosevelt Take: Roosevelt Institute Chief Economist Joseph Stiglitz says that policy, in the form of tax reform, can fix the inequality in the U.S. economy.

Strong Voice in ‘Fight for 15’ Fast-Food Wage Campaign (NYT)

Steven Greenhouse profiles Terrance Wise, who works at a Burger King in Kansas City, MO and has become a leader in the fast food workers' movement over the past two years.

Apple and Camp Bow Wow: Sharing Strategies to Keep Wages Low (Working Economics)

Ross Eisenbrey ties non-compete clauses at low-wage jobs to tech companies' refusal to "poach" each other's workers: in both cases, corporate entitlement keeps wages down.

Chicago Raises Minimum Wage to $13 by 2019, But Strikers Say It’s Not Enough (In These Times)

Those who have been fighting for a $15-per-hour minimum wage are sticking to that number and accusing Mayor Emanuel of political opportunism, writes Will Craft.

Does the Media Care About Labor Anymore? (Politico)

Timothy Noah argues that strong labor reporting, taking a close look at workers and the labor movement's ideas, will be needed to get the economy back on track.

JPMorgan Said to Put Mortgage-Bond Trader on Leave Amid Scrutiny (Bloomberg)

Jody Shenn reports on the latest in a string of suspensions at JPMorgan, which is currently under strong regulatory scrutiny due to recent mortgage securities fraud cases.

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Daily Digest - December 4: Fixing Overtime Will Boost the Economy

Dec 4, 2014Rachel Goldfarb

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An Overdue Fix to Overtime (Other Words)

Roosevelt Institute Senior Fellow Richard Kirsch argues that raising the salary limit for mandatory overtime pay would help the underemployed, too, as they would likely get more hours.

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An Overdue Fix to Overtime (Other Words)

Roosevelt Institute Senior Fellow Richard Kirsch argues that raising the salary limit for mandatory overtime pay would help the underemployed, too, as they would likely get more hours.

Study Finds Violations of Wage Law in New York and California (NYT)

Steven Greenhouse reports on a new Department of Labor study that finds that in 2011, between 3.5 and 6.5 percent of workers in New York and California were paid less than the minimum wage.

Even the Night Owls Need to Go Home Eventually (Pacific Standard)

Jake Blumgart looks at the Philadelphia subway system's shift to 24-hour weekend service, which was advertised as a nightlife service but has been heavily used by workers who get off late.

Legislator to Introduce Right-to-Work Legislation (Bloomberg Businessweek)

Todd Richmond reports on the Wisconsin GOP Assembly member who plans to introduce the legislation despite warnings from Democrats that it could lead to protests like Wisconsin saw in 2011.

Are Cities the Next Front in the Right’s War on Labor? (The Nation)

Moshe Marvit looks at anti-union groups' plans to push right-to-work laws on a local level, which has no legal precedent but is likely to be attempted anyway in labor-friendly states.

Democrats, It’s Time to Move On (WSJ)

Focusing on the could'ves and should'ves of the midterms won't deliver the economic momentum that American voters want, writes William Galston. Democrats need to instead focus on these next two years.

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