Obamacare's Nine Lives

Mar 5, 2015Richard Kirsch

If Obamacare survives yesterday’s Supreme Court challenge, it will really be the cat with nine lives.

The death of what became the Affordable Care Act has been predicted regularly ever since President Obama’s election in 2008. Right after Obama’s election, I got a wave of calls from reporters, each highly skeptical that the President-elect would really try to get health care passed. When you consider the relentless attacks and near-death experiences ever since, the reporters’ skepticism was understandable.

If Obamacare survives yesterday’s Supreme Court challenge, it will really be the cat with nine lives.

The death of what became the Affordable Care Act has been predicted regularly ever since President Obama’s election in 2008. Right after Obama’s election, I got a wave of calls from reporters, each highly skeptical that the President-elect would really try to get health care passed. When you consider the relentless attacks and near-death experiences ever since, the reporters’ skepticism was understandable.

So when I found myself with a fresh wave of anxiety before the Supreme Court heard oral arguments yesterday on the latest assault on the law, I decided to list all the times that the survival of what became the Affordable Care Act was up in the air. And when I then counted them, it turned out that they number eight. So if Obamacare survives this last, desperate challenge at the Supreme Court, it really will have nine lives. Here they are, in chronological order:

1. The Great Recession: After Obama’s election a chorus of pundits predicted that the new President would have to give up his promise of health care reform because of the economic crisis. Instead, the President worked to get the economic stimulus passed, while paving the ground for health reform moving. Just a few weeks after the stimulus became law, the President went on a national tour to push for action on health care. 

2. Tea Party August: The tea party movement came to national attention, with loud, vitriolic attacks on health care at congressional town meetings held by Democrats in August 2009. Republicans gleefully predicted they had killed the bill. But by the second half of August supporters of health reform had rallied at dozens of town hall meetings, usually turning out more activists than the tea partiers. The press didn’t give the same attention to meetings that were not marked by raucous demonstrations. But Democratic members of Congress were sent back to Congress knowing they had support in their home districts to move ahead.

3. Scott Brown’s Election: The surprise election of Republican Scott Brown to the U.S. Senate in January 2010, on a platform opposing health care, looked like it might kill the bill. But having voted to pass the legislation in both houses, Democrats were not going to turn back. President Obama rallied the public by finally attacking the practices of health insurance companies and even without a filibuster proof majority in the Senate, the Patient Protection and Affordable Care Act became law.

4. The Supreme Court Challenge: Immediately after the ACA’s passage, opponents launched a legal attack, which – shocking most legal scholars – was taken seriously by the courts. And by the time the Supreme Court heard the challenge, the odds were that the Court would gut the key provision of the law that enabled insurance to be affordable to individuals. But Chief Justice Roberts saved the day  – and much of the Court’s credibility.

5. The 2012 Election: If the Senate had gone Republican in 2012 – as was widely predicted – and Mitt Romney been elected, Obamacare would have been repealed. Instead, the ACA emerged with a new electoral mandate.

6. Government Shutdown and Congressional Repeals: I hesitated to put the 50 or so Republican votes to repeal the law, culminating in the government shutdown in the fall of 2013, on the list, only because of President Obama’s veto pen. But even if the ACA always had the presidential veto as armor, the barrage of repeal missiles has got to be counted. Texas Senator Ted Cruz led the government shut down before health insurance enrollment opened up because, as he said, “no major entitlement has ever been implemented and then unwound.”

7. Healthcare.gov: And then, with the disastrous launch of the website to enroll people in health care, Ted Cruz appeared to have gotten his wish fulfilled. The ACA might not be legally dead, but much of it was functionally comatose. Then the administration resuscitated the website, and millions were enrolled and started benefitting from the coverage. It looked like, As Cruz feared, the ACA was here to stay.

8. Supreme Court Redux: That is until the Supreme Court agreed to hear a desperate, last minute challenge to ACA’s for millions of newly enrolled people in the King v. Burwell case. Could this be like one of those movies where the soldier survives the war, only to be killed by a bullet on his way home, fired by an enemy that hadn’t heard the war was over?

The news reports of the oral arguments yesterday were encouraging, particularly Justice Kennedy’s raising of a constitutional issue with the plaintiff’s case. And there are a host of other legal reasons to believe that the lawsuit is groundless. But then it did get this far. The opponents have been relentless. They haven’t gotten the message that the war is lost.

In June, we’ll find out if the ACA is the cat with nine lives. Easy to laugh at, if not for the fact that the actual lives of millions of people who rely on the law for life-saving health care are at stake. 

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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America's Tax Code Is Broken, But the Rubio-Lee Plan Won't Fix It

Mar 4, 2015Eric Harris Bernstein

"We believe that America’s best days are still ahead. But we also recognize that restoring the shared prosperity that comes from a strong economy requires reforming the most antiquated and dysfunctional government policies, beginning with the federal tax system."

-Senators Marco Rubio and Mike Lee 

Finally, something we can all agree on. 

"We believe that America’s best days are still ahead. But we also recognize that restoring the shared prosperity that comes from a strong economy requires reforming the most antiquated and dysfunctional government policies, beginning with the federal tax system."

-Senators Marco Rubio and Mike Lee 

Finally, something we can all agree on. 

In their joint op-ed in this morning's Wall Street Journal, the two Republican senators proposed a new tax plan and argued that our current federal tax structure is broken, its problems "rooted in the same fundamental unfairness and inequity of a government that picks winners and losers."

Again, we here at the Roosevelt Institute welcome this realization. For too long, our tax code has helped the few at the expense of the many. Unfortunately, an analysis of their proposed solutions shows that the senators have come out on the wrong side of this argument. 

First, they propose lowering the top corporate tax rate to 25 percent. This would be a step worth discussing if not for the fact that, with offshore tax havens and a wealth of other tax benefits, America's largest corporations currently pay an effective rate of just 12.6 percent. In the words of Roosevelt Institute Chief Economist Joseph Stiglitz, it would seem that the problem is not double taxation, but no taxation.

The senators then argue that, in order to incentivize investment, they would make all capital expenditures 100 percent tax-deductible, suggesting that taxes have squeezed corporations out of the investment business. But if this is the case, then how do we explain the $2 trillion currently being held abroad by America's largest corporations? And what about the enormous sums that companies like Apple and Home Depot are spending on buybacks to enrich investors? 

In fact, new research from Roosevelt Institute Fellow J.W. Mason shows us that the link between corporate cash flow and productive investment has been all but severed since the shareholder revolution of the 1980s. Shareholders now pocket an increasingly large portion of corporate earnings and borrowing that would have once gone to capital investments, job creation, or raising workers’ pay. Given these facts, as well as the current level of historically high profts, it is clear that corporate investment is not suffering from lack of funding, and that more spending on corporate welfare is the wrong way to go.

Lee and Rubio suggest that corporate taxes drive American industries abroad. This is absolutely true: Corporations want to benefit from American security, infrastructure, and human capital, but they don't want to pay their share to maintain those invaluable assets, so they shelter themselves in tax havens like Ireland. The problem, from our point of view, is not, as Rubio and Lee suggest, that the tax code taxes corporations (indeed, that is what a tax code exists to do); the problem is that it allows wealthy corporations to avoid those taxes. 

We need policies that will ensure corporations contribute like the rest of us, not ones that will commit more public money to private enterprise. 

The senators state that their plan is guided by the principles of fairness, freedom, and growth. This raises the question: In whose mind is it fair to spend hundreds of billions of dollars on wealthy corporations, while Americans drive on pothole-pocked roads and send their children to overcrowded schools to learn from underpaid teachers?

For the individual income tax, Rubio and Lee propose reducing the number of brackets to two -- one at 15 percent and one at 35 percent. Even though they have been greatly reduced since the 1980s, lowering rates for middle-income earners is worth discussing. The far more significant part of this proposal, however, is the 11 percent tax break for top income earners, which would further reduce the amount of public funds available for things like roads and schools, and which would further tip our economic balance toward the wealthy.

The senators would likely argue that this tax break will stimulate productive spending, but trickle-down economics did not work under Reagan and will not work now.

Toward the end of their op-ed, the authors posit a series of pro-family tax reforms, like tax credits for children and tax breaks for couples filing jointly. These policies are rooted in a belief that families with married parents are more economically stable and productive than single-parent families. Again, this may be a point worth debating, but these miniscule incentives are scarcely more than lip service to the American middle class, which this plan largely forsakes in favor of more tax cuts for large corporations and the wealthy. 

More generally, Rubio and Lee frame their entire plan as a benefit to average Americans, but do this while glossing over policies that will only continue our current trend of supporting the wealthy at the expense of the country as a whole. The Stiglitz tax reform plan, on the other hand, offers a blueprint for a tax code that would bolster the middle class while driving growth and opportunity. 

Now that we’ve all agreed on the problem, we should look to solutions that economists tell us actually work.

Eric Harris Bernstein is a Program Associate at the Roosevelt Institute.

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What are the Robots Doing? Rebalancing our Inequality Intellectual Portfolio

Mar 4, 2015Mike Konczal

A blog post responding to a blog post responding to a blog post. Who says the blogosphere is dead?

Recently I wrote about Larry Summers demolishing an argument about robots and our weak recovery on a panel. Jim Tankersley called up Summers to further discuss the topic, and put his interview online as a response meant to correct and expand on my post. But I don’t think we disagree here, and if anything Summers’ interview shows how much the consensus has changed.

Before we continue, I should clarify what we are talking about. When people talk about “the robots,” they are really telling one of three stories:

1. Technology has played an important role in the economic malaise of the past 35 years, broadly defined as a mix of stagnating median wages, increased inequality, and weakening labor-force participation.

2. The Great Recession has led to such a weak and lackluster recovery in large part because of technology. In one version of this story, technology is simply taking all the jobs that would normally be found in a recovery. As the AP put it, “Five years after the start of the Great Recession, the toll is terrifyingly clear: Millions of middle-class jobs have been lost... They're being obliterated by technology.” (President Obama himself often mentioned this story throughout the dark period when unemployment was much higher.)

Another, more popular, version is that workers simply don’t have the skills required for a high-technology labor force. A representative quote from the Atlanta Fed President Dennis Lockhart in 2010: “the skills people have don't match the jobs available. Coming out of this recession there may be a more or less permanent change in the composition of jobs.”

3. We are moving to a post-work economy, one where robots substitute for human labor in massive numbers and fundamentally change society. Here’s an example. We may or may not be seeing the first hints of such a change now, depending on the story.

The story I said Summers (as well as David Autor) demolished is the second. There’s no evidence that we are having a technology renaissance right now, or that technology has contributed in a major way to the weak recovery, or that a skills gap or other educational factor is holding back employment, or that highly skilled workers are having a great time in the labor market. The arguments against this story from the original post are pretty damning, and Summers either reiterates them or doesn’t walk them back in the Washington Post column. (Let’s leave the third story to science fiction speculation for now, noting that the second story getting demolished means it isn't happening now, and that it's hard to imagine robot innovation when labor is so cheap and abundant.)

However, Summers does argue for the first story as well, the one in which technology has played a role in the malaise of the past 30 years. As he tells the Post, “In the 1960s, about 1 in 20 men between the age of 25 and 54 was not working. Today, the number is more like 1 in 6 or 1 in 7. So we have seen some troubling long-term trends, and they appear to be continuing trends.” Summers also notes, “to say that technology is important is not to say that technology is the only important factor, or even that it is the dominant factor.” He mentioned this as the conference as well; Brad DeLong and Marshall Steinbaum noted it in their posts.

Intellectual Portfolio Rebalancing

When we think of the economic malaise of the past 30 years, we should probably think of it as a combination of technology, globalization, sociology, and public policy. Tankersley wants to emphasize technology as a piece of this story, and I agree it should be there.

But here’s what I find interesting. Whenever we have a portfolio of ideas, some ideas get more weight than others. And what strikes me about this conversation is how much technology and skills have been deemphasized relative to other stories since the Great Recession, especially those of public policy.

This is a pretty quick and important change. Almost ten years ago, Greg Mankiw could write, "Policy choices [...] have not been the main causes of increasing inequality. At least that is the consensus, as I understand it, of the professional labor economists who study the issue.” Brad Delong also said in 2006 that he “can't see the mechanism by which changes in government policies bring about such huge swings in pre-tax income distribution.” Skill-biased technical change (SBTC) and technology were assumed to cover the entire inequality story.

That consensus is weaker now than it was then. Certainly the argument for SBTC, while always shaky, has taken a hit. You can see it with Summers himself in the Washington Post, where he notes that “changing patterns of education is unlikely to have much to do with a rising share of the top 1 percent, which is probably the most important inequality phenomenon.”

Meanwhile, more and more inequality research is focused on institutional factors, ranging from marginal tax rates to the minimum wage to the inefficiency and growth of the financial sector to deunionization.  And as the Mankiw quote hints, 10 years ago you’d be less likely to hear, as Summers says at the Washington Post, that a “combination of softer labor markets and the growing importance of economic rents” are an essential part of inequality spoken with the same confidence as you see here. I read that as a major change of the consensus.

This is a major rebalancing of our intellectual portfolio of inequality stories, a change that I think is opening up a much more rich and accurate description of what has happened. I hope the research and conversation continues this way.

Follow or contact the Rortybomb blog:
 
  

 

A blog post responding to a blog post responding to a blog post. Who says the blogosphere is dead?

Recently I wrote about Larry Summers demolishing an argument about robots and our weak recovery on a panel. Jim Tankersley called up Summers to further discuss the topic, and put his interview online as a response meant to correct and expand on my post. But I don’t think we disagree here, and if anything Summers’ interview shows how much the consensus has changed.

Before we continue, I should clarify what we are talking about. When people talk about “the robots,” they are really telling one of three stories:

1. Technology has played an important role in the economic malaise of the past 35 years, broadly defined as a mix of stagnating median wages, increased inequality, and weakening labor-force participation.

2. The Great Recession has led to such a weak and lackluster recovery in large part because of technology. In one version of this story, technology is simply taking all the jobs that would normally be found in a recovery. As the AP put it, “Five years after the start of the Great Recession, the toll is terrifyingly clear: Millions of middle-class jobs have been lost... They're being obliterated by technology.” (President Obama himself often mentioned this story throughout the dark period when unemployment was much higher.)

Another, more popular, version is that workers simply don’t have the skills required for a high-technology labor force. A representative quote from the Atlanta Fed President Dennis Lockhart in 2010: “the skills people have don't match the jobs available. Coming out of this recession there may be a more or less permanent change in the composition of jobs.”

3. We are moving to a post-work economy, one where robots substitute for human labor in massive numbers and fundamentally change society. Here’s an example. We may or may not be seeing the first hints of such a change now, depending on the story.

The story I said Summers (as well as David Autor) demolished is the second. There’s no evidence that we are having a technology renaissance right now, or that technology has contributed in a major way to the weak recovery, or that a skills gap or other educational factor is holding back employment, or that highly skilled workers are having a great time in the labor market. The arguments against this story from the original post are pretty damning, and Summers either reiterates them or doesn’t walk them back in the Washington Post column. (Let’s leave the third story to science fiction speculation for now, noting that the second story getting demolished means it isn't happening now, and that it's hard to imagine robot innovation when labor is so cheap and abundant.)

However, Summers does argue for the first story as well, the one in which technology has played a role in the malaise of the past 30 years. As he tells the Post, “In the 1960s, about 1 in 20 men between the age of 25 and 54 was not working. Today, the number is more like 1 in 6 or 1 in 7. So we have seen some troubling long-term trends, and they appear to be continuing trends.” Summers also notes, “to say that technology is important is not to say that technology is the only important factor, or even that it is the dominant factor.” He mentioned this as the conference as well; Brad DeLong and Marshall Steinbaum noted it in their posts.

Intellectual Portfolio Rebalancing

When we think of the economic malaise of the past 30 years, we should probably think of it as a combination of technology, globalization, sociology, and public policy. Tankersley wants to emphasize technology as a piece of this story, and I agree it should be there.

But here’s what I find interesting. Whenever we have a portfolio of ideas, some ideas get more weight than others. And what strikes me about this conversation is how much technology and skills have been deemphasized relative to other stories since the Great Recession, especially those of public policy.

This is a pretty quick and important change. Almost ten years ago, Greg Mankiw could write, "Policy choices [...] have not been the main causes of increasing inequality. At least that is the consensus, as I understand it, of the professional labor economists who study the issue.” Brad Delong also said in 2006 that he “can't see the mechanism by which changes in government policies bring about such huge swings in pre-tax income distribution.” Skill-biased technical change (SBTC) and technology were assumed to cover the entire inequality story.

That consensus is weaker now than it was then. Certainly the argument for SBTC, while always shaky, has taken a hit. You can see it with Summers himself in the Washington Post, where he notes that “changing patterns of education is unlikely to have much to do with a rising share of the top 1 percent, which is probably the most important inequality phenomenon.”

Meanwhile, more and more inequality research is focused on institutional factors, ranging from marginal tax rates to the minimum wage to the inefficiency and growth of the financial sector to deunionization.  And as the Mankiw quote hints, 10 years ago you’d be less likely to hear, as Summers says at the Washington Post, that a “combination of softer labor markets and the growing importance of economic rents” are an essential part of inequality spoken with the same confidence as you see here. I read that as a major change of the consensus.

This is a major rebalancing of our intellectual portfolio of inequality stories, a change that I think is opening up a much more rich and accurate description of what has happened. I hope the research and conversation continues this way.

Follow or contact the Rortybomb blog:
 
  

 

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Reduce Police Brutality Through Community-Building

Mar 2, 2015Andrew Lindsay

Efforts that connect police to the community in which they serve help to reduce encounters that lead to extrajudicial killings by police.

Efforts that connect police to the community in which they serve help to reduce encounters that lead to extrajudicial killings by police.

In Darren Wilson’s grand jury testimony, he describes Michael Brown, an unarmed teen, as a “demon.” After he fired the first shot, Wilson says he heard a “grunting, like aggravated sound” coming from the teenager. He explains, “You could tell he was looking through you. There was nothing he was seeing.” After firing 12 rounds, Wilson eventually shot Brown in the head, killing him.

In a 911 report, a caller related that someone, possibly a child was pointing “a pistol” at random people in a Recreation Center. The caller clarified that the gun was “probably fake.” According to the responding officers, they approached 12-year-old Tamir Rice, ordering him to hold up his hands. Tamir reached to his waistband and grasped a bb gun. In a matter of seconds, one of the officers fired two shots, fatally hitting Rice once in the torso. Footage was released of the officers tackling the bereaved 14-year-old sister of Rice after they shot her 12-year-old brother. Rice’s mother said that a friend had given him the toy gun to play with minutes before the police arrived.

In these descriptions we see fewer teenagers and more vicious animals. Many extrajudicial killings of Black people share similar dehumanizing stories. Policy makers and community members need to shift this pervasive negative narrative. Micro-place community policing is one solution.

In vulnerable communities, high rates of gang violence and high rates of police bias come hand in hand. Between 1991 and 2013, there were on average approximately 400 police killings reported to the FBI from local police. Out of all these incidents reported annually, an average of 96 per year involved a white police officer killing a black person. In contrast, there were no fatal police shootings in Great Britain in 2013. In Canada, cases of ‘justifiable homicide’ hover around a dozen annually. These figures reveal a disturbing propensity for US police officers to use deadly force and a high potential for racial bias in shoot/don’t shoot scenarios.

Project Longevity in Connecticut, Operation Ceasefire in Boston, and lesser-known initiatives in Chicago and Cincinnati are organize to reduce the homicide victimization and gang violence among young people in these areas, with the help of local law enforcement and community partners. However, these programs also have unseen potential to increase police-community relationships and humanize black lives in the eyes of law enforcement. Community members not only patrol with police but also are considered equal partners.

Project Longevity is a community-oriented policing strategy to reduce gang violence in three of Connecticut’s major cities: New Haven, Bridgeport, and Hartford. It is modeled after successful efforts implemented by the Chicago Police Department (CPD) and Operation Ceasefire: Boston Gun Project. Connecticut has seen dramatic declines in police and civilian violence after the initial implementation of this program.

Project Longevity directs federal and state spending to the most vulnerable communities in these cities with the purpose of steering at-risk youth and repeat offenders away from violence. A broad array of social services (housing, educational opportunities, addiction and mental/health care) are offered to those who want to end the cycle of community violence and gang activity – with the option of “receiv[ing] the full attention of the law” the next time any crime occurs.

Longevity combines social services, law enforcement, and community involvement to target crime and positively influence dynamics between residents and the police. Key to this strategy is a quarterly “call-in,” an intervention that combines local, state, and federal level law enforcement; community members; service providers; parents; and members of the clergy.

According to Tiana Hercules, “They speak to these young men and in some cases young women at the call-in and explain to them the consequences of further gun violence in the city of Hartford. Essentially, the message is put the guns down or the next body that drops in the city or person to get shot is going to receive the full focus of law attention. And not only yourself, but also those who you run with.” Violent crime in Connecticut’s three big cities after Project Longevity has decreased nearly 15 percent and crime in the state has decreased 10 percent, twice the national average. Longevity is credited with half of this overall cut in statewide violent crime.

The problem of police brutality in the United States is one of police accountability, but not in the conventional understanding of the term. The typical hypothesis is that once law enforcement is vigorously policed they will be held to a higher standard, decreasing the likelihood of police excess. This is the motivation behind the Obama administration’s $75 million push for mounted body cameras nationwide. Perhaps if Darren Wilson were monitored, he would not have so easily killed Mike Brown, or so the story goes. However, history teaches us that this conventional way of policing the police may be misplaced. In the trial of LAPD officers who beat Rodney King in 1991, videotape evidence was argued away because it did not present the full picture. This year, apparently indisputable video was refuted in the recent police killings of Eric Garner and John Crawford.

Instead of external accountability, police officers need to develop a greater sense personal accountability to the vulnerable in communities where they serve. This need for personal accountability stems from a racial and spatial separation that keeps communities and police isolated. This gap reinforces the biases that keep youth like Mike Brown and Tamir Rice dehumanized by the very people tasked with their protection. Programs that put law enforcement and communities in greater contact should be encouraged.  There is no better policing mechanism than one’s conscience. Working closely with residents provides information that can prevent dangerous encounters with police, simply by police intimately knowing community members and their families. More importantly, these programs humanize members of vulnerable communities to law enforcement. Darren Wilson was wrong. There are no demons, just police officers isolated from communities.

Andrew Lindsay, a 2015 Truman Scholarship Finalist in Massachusetts, is a junior at Amherst College, where he is an active member of the Roosevelt Institute | Campus Network and studies Law, Jurisprudence & Social Thought.

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Daily Digest - February 27: We're Missing the Mark on Monetary Policy, and a Goodbye

Feb 27, 2015Rachel Goldfarb

Click here to subscribe to updates from the Roosevelt Institute.

Click here to subscribe to updates from the Roosevelt Institute.

The Roosevelt Institute has produced the Daily Digest five days a week since 2009, but its time has now come to an end. Today will be the final Daily Digest; however, we hope you'll subscribe to our weekly e-mail updates to stay in the loop with all the exciting work we're doing here at the Roosevelt Institute. You can also stay in touch with us on Facebook and Twitter. Thank you for reading!

Corporate Borrowing Now Flows To Shareholders, Not Productive Investment: Study (IB Times)

Owen Davis reports on J.W. Mason's new white paper, "Disgorge the Cash," explaining how the paper fits into a growing body of research that suggests flaws in our basic understanding of economics.

Students Question Own Role in Participatory Budgeting (Columbia Spectator)

Sasha Zeints reports on a Campus Network event discussing students' role in participatory budgeting. Chapter president Brit Byrd says students are well-suited to participate as volunteers.

The Federal Reserve Speaks in Mumbo Jumbo. Here's How to Fix That. (The Week)

Referencing Roosevelt Institute Fellow Mike Konczal, Jeff Sprots argues that the opacity of Federal Reserve statements could be solved by mandating a numerical target for the Fed.

The Real Meaning of $9 an Hour (Time)

Rana Foroohar says that Walmart's wage hike might not make a dramatic impact on the real economy, but it shows that workers can still get the largest companies in the world to change.

What Is ‘Middle-Class Economics’? (NYT)

Josh Barro points out that government policies that help the middle class are only able to produce small shifts. He says the best option might be to step back and hope positive trends continue.

The FCC Approves Strong Net Neutrality Rules (WaPo)

Cecilia Kang and Brian Fung report on the Federal Communications Commission's vote yesterday, which classified the Internet as a public utility to protect access for all.

New on Next New Deal

Make the Stop Overdose Stat Act a Priority for 2015

Roosevelt Institute | Campus Network Senior Fellow for Health Care Emily Cerciello explains why this bill targeting opioid overdose prevention should be on both parties' agendas this year.

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Make the Stop Overdose Stat Act a Priority for 2015

Feb 26, 2015Emily Cerciello

It’s time for Congress to take an evidence-based and public health focused approach to the epidemic of opioid overdoses.

It’s time for Congress to take an evidence-based and public health focused approach to the epidemic of opioid overdoses.

Opioid overdose is an epidemic in the United States. Drug overdose death rates have more than tripled since 1990, with the vast majority of these deaths attributable to an increase in the prescription and sale of opioid medications. The death rate from heroin overdose doubled between 2010 and 2012, and young people are now more likely to die from drug overdose than from motor vehicle crashes.

These statistics may be surprising, but their causes are familiar – commonly abused prescription opioid medications include names such as Vicodin, OxyContin, Percocet, or codeine, as well as the illicit drug heroin, which creates similar pain-relieving effects. Prescription drugs are often considered a “gateway” to heroin use as heroin addiction often begins as a cheaper alternative to prescription painkillers.

In March 2014, Rep. Donna Edwards (D-MD) introduced the Stop Overdose Stat (SOS) Act to create a federal plan for preventing fatal drug overdoses and prioritizing community- and state-based efforts for the development of best practices. The SOS Act would provide federal support for overdose prevention programs, which can include training bystanders, law enforcement, and first responders in recognizing signs of overdose, seeking medical assistance, or administering naloxone. Naloxone is a life-saving medication that reverses the effects of heroin or opioid prescription overdose. As of December 2014, twenty-six states and the District of Columbia have removed legal barriers to provider prescription and layperson administration of naloxone. Additionally, 20 states and the District of Columbia have established Good Samaritan protection, which grants immunity from arrest for calling 911 to seek medical assistance in the event of overdose.

The SOS Act, cosponsored by 39 legislators, approaches opioid prevention and treatment through a public health and health equity lens. While no socioeconomic or demographic group is immune to the abuse of prescription drugs or heroin (the most dramatic increases have occurred among white, middle-aged women in rural areas), urban areas with large African American populations are still where the majority of overdoses are happening. The SOS Act would create a grant program administered by the Centers for Disease Control and Prevention that gives priority to community organizations working to prevent overdose in high-risk populations.

The SOS Act would also create a mechanism for detailed reporting of overdose data for the development of best practices for preventing overdose deaths. It would require the Secretary of Health and Human Services to develop a national plan to be submitted to Congress within 180 days of enactment that incudes a public health campaign, recommendations for expanding overdose prevention programming, and recommendations for legislative action.

The bill was closed out of the 113th Congress, but should be reconsidered in the current session as the issue builds momentum in both Democratic- and Republican-led states. The re-introduction of the SOS Act is an opportunity for Congress to take immediate action in responding to a significant public health issue with a bipartisan solution. States are implementing evidence-based laws to address the worsening overdose epidemic. It is time for the federal government to follow suit.

Emily Cerciello is the Roosevelt Institute | Campus Network Senior Fellow for Health Care, and a senior at the University of North Carolina at Chapel Hill.

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Daily Digest - February 26: Where Is All the Corporate Cash Going?

Feb 26, 2015Rachel Goldfarb

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

Why Companies are Rewarding Shareholders Instead of Investing in the Real Economy (WaPo)

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

Why Companies are Rewarding Shareholders Instead of Investing in the Real Economy (WaPo)

Lydia DePillis looks at Roosevelt Institute Fellow J.W. Mason's new white paper on how the shift towards increased shareholder payouts since the 1980s has decreased corporate investment.

  • Roosevelt Take: Read J.W. Mason's paper, "Disgorge the Cash: The Disconnect Between Corporate Borrowing and Investment," here.

Hewlett-Packard Shows How to Fatten Shareholders While Firing Workers (LA Times)

Referencing J.W. Mason's paper for context on the impact of shareholder payouts on the larger economy, Michael Hiltzik explains how H-P has managed to fire workers and increase payouts at once.

Don't Wait Until 2016 to Make Political Change (HuffPo)

Roosevelt Institute | Campus Network National Director Joelle Gamble argues for the need for young people to participate in governance, not just elections.

The Push for Net Neutrality Arose From Lack of Choice (NYT)

Steve Lohr speaks to Roosevelt Institute Fellow Susan Crawford, who agrees that the current approach to net neutrality makes sense while cable is most people's only option for high-speed Internet.

The Lawyer Who Went from Fighting for Guantánamo Bay Inmates to Going After Shady Banks (Vice)

David Dayen profiles Josh Denbeaux, a lawyer who is fighting back against foreclosure abuse in the courts and trying to develop class-action suits for homeowners facing illegal foreclosures.

New on Next New Deal

Launching Our Financialization Project with "Disgorge the Cash"

Roosevelt Institute Fellow Mike Konczal introduces our Financialization Project, which aims to define and explain the topic, as well as J.W. Mason's paper. Learn more about the project here.

Millennials Want More Than Obama’s Keystone Veto

Roosevelt Institute | Campus Network Senior Fellow for Energy and Environment Torre Lavelle says the veto isn't good enough, because Millennials are seeking a real commitment to transforming energy usage.

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Millennials Want More Than Obama’s Keystone Veto

Feb 25, 2015Torre Lavelle

The president's veto of Keystone XL was not the decisive step towards transforming the country's energy usage that Millennials are looking for.

The president's veto of Keystone XL was not the decisive step towards transforming the country's energy usage that Millennials are looking for.

In June 2013, President Obama revealed his carefully crafted litmus test for approving the Keystone XL pipeline, stating that the project’s effect on climate change would be the deciding factor in his decision. Upholding this ‘climate test’ in his 2015 State of the Union, he called on Americans to set their sights higher than a single pipeline. However, the president’s 104-word veto message to the Senate on Tuesday, which cites the necessary completion of the State Department’s administrative review procedure, fails to include more decisive language for a final decision even after six years.

The Millennials, born between 1984 and 2004, hold a unique role in the debate, as the proposed Keystone pipeline has surfaced as a larger symbol in energy, climate change, and economic policy wars. Young people across the country view this issue as a literal line in the sand – rejection of the pipeline would serve as the ultimate indication of moving away from dependence on fossil fuels towards clean energy technologies. Millennials not only believe that clean energy investment is vital to our economic future, but they also view this transformation as one of the defining features of our generation.

Young people have also been at the forefront of climate activism, organizing XL Dissent, the largest student-led protest at the White House in a generation. This strong millennial support was clear at my university last year, when Beyond Coal, a student group organized under the Sierra Club Student Coalition, pressured the University of Georgia to shut down its coal-fired boiler, the single largest source of pollution in the city. The key policy change was confirmed in September, after students put incredible amounts of pressure on the administration​.

Senate Majority Leader Mitch McConnell has been fond of noting that no energy bill has been passed in the last seven years, therefore articulating his vision for why Keystone is necessary. With arguments for jobs and oil independence falling flat, McConnell and others in Congress should instead push for an energy bill that supports the generational shift in our energy infrastructure. We need congressional leadership to advance policies in stronger energy efficiency standards, incentives for better fuels, and electric vehicle incentives to widen the market. Former Republican Treasury Secretary George Schultz has even proposed a revenue-neutral carbon fee and dividend system.

Most pressingly, the new Senate majority has vowed to dismantle the Environmental Protection Agency’s new carbon emissions standards for new and existing power plants, a policy that would allow the U.S. to honor its international commitment to reduce greenhouse gas emissions by 17 percent. My home state of Georgia, home to some of the dirtiest coal plants in the nation, is required to reduce carbon emissions by 44 percent. These carbon emissions standards represent a potential milestone shift in job creation and alternative energy opportunities and must stay in place.

As the fastest growing workforce demographic, millennials can combine their strong support for clean energy with their foundation in activism and technological advancement, and lead the industry and its politics forward in ways that past generations could not. Indeed they can remind Congress that if you aren’t a climate denier, you shouldn’t be voting like one. It’s come time for a generational shift in the types of energy we use, and a generational shift in political engagement will make it happen.

Torre Lavelle is the Roosevelt Institute | Campus Network Senior Fellow for Energy and the Environment. She is majoring in ecology and environmental economics at the University of Georgia.

 

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Launching Our Financialization Project with "Disgorge the Cash"

Feb 25, 2015Mike Konczal

So excited to be launching our new Financialization Project. Check out the website here. Part of the goal of the project is to define financialization, and we've focused on the changes to savings, power, wealth, and society that have occured over the past 35 years. We'll have more there soon, but for now check out the general idea here.

We're also releasing our first paper, "Disgorge the Cash: The Disconnect Between Corporate Borrowing and Investment," by Roosevelt fellow J.W. Mason. There's a great writeup of the paper by Lydia DePillis – "Why companies are rewarding shareholders instead of investing in the real economy" – at the Washington Post.

There's a ton in there, from the key intellectual, ideological, legal, and institutional changes that brought about the shareholder revolution, to reasons to doubt a credit crunch has played any kind of role in the Great Recession. But the core of it is told in these two graphs, dug out from detailed Compustat data:

The first figure shows that a firm borrowing $1 would correlate with an additional 40 cents of investment before the 1980s. Since the 1980s that has collapsed. Today, there is a strong correlation between shareholder payouts and borrowing that did not exist before the mid-1980s. Since the 1980s, shareholder payouts have nearly doubled; in the second half of 2007, aggregate payouts actually exceeded aggregate investment.

This next figure, a little harder to follow, uses flow-of-funds data to make the same point more dramatically.

These graphs plot corporate investment and shareholder payouts against cash flow from operations and net borrowing, respectively. Here the series are broken into three periods: 1952–1984; 1985 to the business-cycle trough in 2001; and 2002–2013. As the paper notes, the upper two panels show a strong relationship between corporate sources of funds and investment in the 1950s through the early 1980s: the points of the scatterplots fall clearly along an upward-sloping diagonal, indicating that periods of high corporate earnings and high corporate borrowing were consistently also periods of high corporate investment. The relationship between investment and the two sources of funds is still present, though weaker, in the 1985–2001 period.
 
But in the most recent business cycle and recovery, the correlations appear to have vanished entirely. The rise, fall, and recovery of corporate cash flow over the past dozen years is not associated with any similar shifts in corporate investment, which seems stuck at a low level of 1–2 percent of total assets. Similarly, the very large swings in credit flows to the corporate sector do not correspond to any similar shifts in aggregate investment. Turning to the lower two panels of Figure 6, which show shareholder payouts, we see at most a weak relationship with the two sources of funds in the earlier period. In the earlier period, it is payments to shareholders that are stable at 1–2 percent of corporate assets. In the most recent period, by contrast, payouts to shareholders vary much more, and appear more strongly associated with variation in cash flow and borrowing. The transitional period of 1985–2001 is intermediate between the two.
 
I hope you check out the full paper. Here's the executive summary:
 
This paper provides evidence that the strong empirical relationship of corporate cash flow and borrowing to productive corporate investment has disappeared in the last 30 years and has been replaced with corporate funds and shareholder payouts. Whereas firms once borrowed to invest and improve their long-term performance, they now borrow to enrich their investors in the short-run. This is the result of legal, managerial, and structural changes that resulted from the shareholder revolution of the 1980s. Under the older, managerial, model, more money coming into a firm – from sales or from borrowing – typically meant more money spent on fixed investment. In the new rentier-dominated model, more money coming in means more money flowing out to shareholders in the form of dividends and stock buybacks.
 
These results have important implications for macroeconomic policy. The shareholder revolution – and its implications for corporate financing decisions – may help explain why higher corporate profits in recent business cycles have generally failed to lead to high levels of investment. And under this new system, cheaper money from lower interest rates will fail to stimulate investment, growth, and wages because, as we show here, additional funds are funneled to shareholders through buybacks and dividends.
 
Follow or contact the Rortybomb blog:
 
  

 

So excited to be launching our new Financialization Project. Check out the website here. Part of the goal of the project is to define financialization, and we've focused on the changes to savings, power, wealth, and society that have occured over the past 35 years. We'll have more there soon, but for now check out the general idea here.

We're also releasing our first paper, "Disgorge the Cash: The Disconnect Between Corporate Borrowing and Investment," by Roosevelt fellow J.W. Mason. There's a great writeup of the paper by Lydia DePillis – "Why companies are rewarding shareholders instead of investing in the real economy" – at the Washington Post.

There's a ton in there, from the key intellectual, ideological, legal, and institutional changes that brought about the shareholder revolution, to reasons to doubt a credit crunch has played any kind of role in the Great Recession. But the core of it is told in these two graphs, dug out from detailed Compustat data:

The first figure shows that a firm borrowing $1 would correlate with an additional 40 cents of investment before the 1980s. Since the 1980s that has collapsed. Today, there is a strong correlation between shareholder payouts and borrowing that did not exist before the mid-1980s. Since the 1980s, shareholder payouts have nearly doubled; in the second half of 2007, aggregate payouts actually exceeded aggregate investment.

This next figure, a little harder to follow, uses flow-of-funds data to make the same point more dramatically.

These graphs plot corporate investment and shareholder payouts against cash flow from operations and net borrowing, respectively. Here the series are broken into three periods: 1952–1984; 1985 to the business-cycle trough in 2001; and 2002–2013. As the paper notes, the upper two panels show a strong relationship between corporate sources of funds and investment in the 1950s through the early 1980s: the points of the scatterplots fall clearly along an upward-sloping diagonal, indicating that periods of high corporate earnings and high corporate borrowing were consistently also periods of high corporate investment. The relationship between investment and the two sources of funds is still present, though weaker, in the 1985–2001 period.
 
But in the most recent business cycle and recovery, the correlations appear to have vanished entirely. The rise, fall, and recovery of corporate cash flow over the past dozen years is not associated with any similar shifts in corporate investment, which seems stuck at a low level of 1–2 percent of total assets. Similarly, the very large swings in credit flows to the corporate sector do not correspond to any similar shifts in aggregate investment. Turning to the lower two panels of Figure 6, which show shareholder payouts, we see at most a weak relationship with the two sources of funds in the earlier period. In the earlier period, it is payments to shareholders that are stable at 1–2 percent of corporate assets. In the most recent period, by contrast, payouts to shareholders vary much more, and appear more strongly associated with variation in cash flow and borrowing. The transitional period of 1985–2001 is intermediate between the two.
 
I hope you check out the full paper. Here's the executive summary:
 
This paper provides evidence that the strong empirical relationship of corporate cash flow and borrowing to productive corporate investment has disappeared in the last 30 years and has been replaced with corporate funds and shareholder payouts. Whereas firms once borrowed to invest and improve their long-term performance, they now borrow to enrich their investors in the short-run. This is the result of legal, managerial, and structural changes that resulted from the shareholder revolution of the 1980s. Under the older, managerial, model, more money coming into a firm – from sales or from borrowing – typically meant more money spent on fixed investment. In the new rentier-dominated model, more money coming in means more money flowing out to shareholders in the form of dividends and stock buybacks.
 
These results have important implications for macroeconomic policy. The shareholder revolution – and its implications for corporate financing decisions – may help explain why higher corporate profits in recent business cycles have generally failed to lead to high levels of investment. And under this new system, cheaper money from lower interest rates will fail to stimulate investment, growth, and wages because, as we show here, additional funds are funneled to shareholders through buybacks and dividends.
 
Follow or contact the Rortybomb blog:
 
  

 

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Daily Digest - February 25: The Big Banks Had a Bad Year

Feb 25, 2015Rachel Goldfarb

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Annual Bank Profit Falls for First Time in Five Years (WSJ)

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

Annual Bank Profit Falls for First Time in Five Years (WSJ)

Victoria McGrane says the trend is primarily because seven of the 10 largest banks posted lower earnings, while other parts of the banking sector, like community banks, are thriving.

The White House Has No Back-Up Plan if SCOTUS Rules Against Obamacare (Vox)

Sarah Kliff reports on the announcement that the Department of Health and Human Services has been unable to find an administrative fix in case they lose in King v. Burwell.

State Orders Minimum Wage Increase for Tipped Workers (Capital New York)

The New York State Labor Department has ordered an increase in the minimum wage for tipped workers from $5.00 to $7.50 per hour, writes Jimmy Vielkind.

Labor Takes Final Stand as Wisconsin Prepares Way for Anti-Union Law (AJAM)

Ned Resnikoff says Wisconson labor leaders see the governor's new support for right-to-work legislation as proof that he's already focused on appealing to donors for a 2016 presidential run.

Obama Proposal Recognizes How Retirement Saving Has Changed (NYT)

Neil Irwin argues that by requiring those who manage retirement savings to put their clients' best interests first, Obama is bringing back some of the protections of old-school pensions.

One Sign Americans Won't See Big Raises Anytime Soon (Bloomberg Business)

An increasing share of hires are workers who are just entering or re-entering the workforce, writes Jeanna Smialek, which is good for labor force participation but keeps salaries down.

New on Next New Deal

Guns on Campus: Not an Agenda for Women's Safety

Roosevelt Institute Fellow Andrea Flynn breaks down the data that proves allowing guns on campus will only increase the safety risks women face, not reduce sexual assault.

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