Obama's 'Promise Zones' Have Potential if They Include Anchor Institutions

Jan 10, 2014Joelle Gamble

Efforts to promote economic development must shift to the local level, but they can't overlook some of the biggest players in these communities.

Efforts to promote economic development must shift to the local level, but they can't overlook some of the biggest players in these communities.

At a press conference yesterday, President Obama told the story of his time organizing in Chicago and highlighted the work local communities do to support their neighbors and prepare them to be contributors to the economy. This renewed emphasis on the importance of localities accompanied the President’s announcement of five “Promise Zones,” specially designated communities that will receive increased federal resources and coordinating support in their efforts to develop economically. This announcement comes as welcome news to advocates for equal economy opportunity in the United States, but the approach seems to be constrained by an overly narrow definition of community stakeholders.

According to the White House, the Promise Zones, which will be established in Los Angeles, San Antonio, Philadelphia, southeastern Kentucky, and the Choctaw Nation of Oklahoma, will focus on replacing distressed housing, reducing crime rates, increasing student high school graduation prospects, and stimulating economic growth via tax incentives. As I’ve written before, the ineffectiveness of the modern United States Congress has made federal legislation to address rising inequality a pipe dream. Thus, the local level is the new battleground for tackling pressing economic challenges such as these.

However, questions still remain as to whether these new Promise Zones take the best possible approach to generating sustainable economic development. At this point, information provided by the Department of Housing and Urban Development and the White House focuses primarily on the usual community stakeholders: businesses, K-12 programs, the local government, etc. Given the financial constraints many localities and school districts are facing and the natural limitations of tax incentives, it would behoove the administration to widen the scope of the policies they implement in pursuit of growth.

Anchor institutions, such as universities and hospitals, are an untapped source of job growth, financial investments, intellectual capital, and community support. Hospitals and universities spend over $1 trillion a year and employ 8 percent of the total U.S. labor force. My colleague Alan Smith recently wrote about the work that the Roosevelt Institute is doing to analyze the local impact of these anchor institutions through its new Rethinking Communities initiative.

Identifying and engaging with anchor institutions would not be difficult. For example, local governments could recommend the allocation of federal grants to universities and hospitals that make targeted hiring efforts in particularly distressed portions of the Promise Zone communities.

Shifting responsibility for economic development away from the dysfunctional legislative branch and toward our local communities will require us to think more broadly about what community means and what kinds of actors shape it. With this challenge in mind, Promise Zones would benefit greatly from the incorporation of anchor institutions in their strategies for promoting long-term growth and economic opportunity.

Joelle Gamble is the Roosevelt Institute | Campus Network's National Field Strategist.

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The Bernard L. Schwartz Rediscovering Government Initiative: Building on the Successes of 2013 in the New Year

Jan 6, 2014Jeff Madrick

The Rediscovering Government Initiative takes a look back and a look ahead...

The Rediscovering Government Initiative takes a look back and a look ahead...

The Bernard L. Schwartz Rediscovering Government Initiative had an active and rewarding second year. Our programs continue to be directed toward broadening the public discourse on the purposes of government, and in particular, countering the ideological anti-government attitudes that have so influenced discourse about public policies since the 1970s. We believe that many of America’s most challenging problems are a consequence of the neglect and misuse of government.

In 2013, we emphasized job creation. The facts are stark: America has a 7 percent unemployment rate four years into a recovery. It has a record-low employment-to-population ratio, especially for young workers. A record number of workers have been unemployed for more than six months.

In addition, the large majority of jobs created in the recovery have been low-wage jobs. As a result, typical household income is no higher than it was more than a decade ago. Unequal and stagnating incomes cannot be separated from the jobs crisis. There is concern that weak job markets are now a long-term reality.

To us, this is not just a jobs crisis. It is a full-fledged jobs emergency.

We also pursued other programs related to government and the perpetuation of the New Deal legacy of Franklin and Eleanor Roosevelt.

Here are a few of the 2013 successes we plan to build on in 2014:

A Conference: A Bold Approach to the Jobs Emergency

The crown jewel of our 2013 efforts was a June conference in Washington, D.C., which we called “A Bold Approach to the Jobs Emergency.” Our keynote speakers, Senator Tom Harkin (D-IA), Former Federal Reserve Vice Chairman Alan Blinder, and Congresswoman Jan Schakowsky (D-IL), addressed the jobs emergency from a variety of viewpoints to a jam-packed auditorium.

At the conference, we held seven separate panels on solutions to the jobs emergency. These included fiscal stimulus, public-private infrastructure projects, financial regulations to encourage jobs, improved education, raising the minimum wage, labor law reform, and local political advocacy programs.

Our panelists represented a diversity of backgrounds and perspectives, and included Ai-Jen Poo of the National Domestic Workers Alliance, Federal Reserve Board Governor Sarah Bloom Raskin, Gar Alperovitz of the Democracy Collaborative, Dean Baker of the Center for Economic and Policy Research, Damon Silver of the AFL-CIO, and Maya Wiley of the Center for Social Inclusion, along with Roosevelt Institute Fellows Dorian Warren, Annette Bernhardt, Richard Kirsch, and Mike Konczal.

The video and transcripts of the proceedings, along with summaries of the key points made in each panel, are available on our website.

A Report: “A Bold Approach to the Jobs Emergency: 15 Policy Ideas”

Despite a pessimistic and persistent refrain that government cannot solve America’s jobs problems, we learned from the many experts at our jobs conference that there are multiple ways to return to full employment. Based on these and other ideas we researched over the course of 2013, we will publish a report in January outlining 15 bold ideas to deal with the jobs emergency. Our report amounts to a call for renewed optimism about how we can solve this central economic problem.

A New Book: Myths of Government

In 2013, UC Press offered the Initiative a book contract, based on the essays presented by several participants at our Washington, D.C. conference on the purpose of government in summer 2012. Myths of Government will include contributions from Lane Kenworthy of the University of Arizona, Peter Lindert of the University of California at Davis, Jon Bakija of Williams College, and Rediscovering Government Director Jeff Madrick. The book debunks major economic claims that government’s role must be limited if economic growth and the standard of living are to be improved. To the contrary, it shows that constructive government policies are critical to the future of the economy and a rising standard of living for all.

Other Public Events

Here are a few of the public events we held:

-- In April, we hosted Mark Levitan and Moe Magali of the New York City Center for Economic Opportunity to discuss the staggering 30 percent youth unemployment rate in New York City and the job creation programs that the city government is implementing to mitigate this problem.

--In August, in New Orleans, we gathered leading local experts on youth unemployment, including Amy Barad of the Cowen Institute for Public Education Initiative, Cherie LaCour-Duckworth of the Urban League of Greater New Orleans, Lauren Bierbaum of Partnership for Youth Development, and Jerome Jupiter of the Youth Empowerment Project, to discuss strategies to reconnect the 6.7 million young people nationwide who are both out of work and out of school. Jeff Madrick wrote about the gathering in his monthly Harper’s magazine column, and Program Manager Nell Abernathy wrote a comprehensive post on the subject of youth unemployment for the Roosevelt Institute’s blog, Next New Deal. Jeff Madrick was interviewed on NPR’s Marketplace on these issues.  Roosevelt Institute | Pipeline, our nationwide network of young progressive professionals, co-hosted the event.

--In September, we hosted a panel in New York City entitled “Inequality: The Next Mayor’s Challenge.” Local experts outlined policies the mayor’s office could enact to fight rising inequality. The panel included David Jones of the Community Services Society, NYU professor Lawrence Aber, Maya Wiley of the Center for Social Inclusion, Tsedeye Gebreselassie of the National Employment Law Project, and James Parrot of the Fiscal Policy Institute.

--In October, as part of our commitment to updating the Roosevelts’ New Deal legacy, we partnered with the Frances Perkins Center in Portland, Maine to host a discussion on the changing attitudes of Americans toward government and how to keep the New Deal’s spirit alive. The event highlighted Perkins’s role as the FDR adviser most responsible for Social Security. Participants included Ai-Jen Poo, Sally Greenberg of the National Consumers League, and Jeff Madrick.

--Also in October, Jeff Madrick participated in “Progressivism in America: Past, Present, and Future,” a conference in Dublin, Ireland hosted by the Roosevelt Institute and University College Dublin’s Clinton Institute for American Studies. Madrick contributed an essay on the future of progressivism to be published in 2014.


Throughout the year, the Rediscovering Government staff published a range of longer-form essays and blogs that reflected the central themes of the Initiative.

The subjects we focused on most closely are listed below.

Youth Unemployment:

The Real Lost Generation, by Jeff Madrick for Harper’s Magazine

Tragedy as a Generation for US Youth, Jeff Madrick with David Brancaccio for Marketplace on NPR

How Can We Help America’s Opportunity Youth? Five Lessons Learned in New Orleans, by Nell Abernathy for Next New Deal

Fiscal Policy and Public Investment:

America Is Having the Wrong Fiscal Argument, by Jeff Madrick for Harper’s Magazine

Simpson-Bowles Consensus isn’t Common Sense. It’s Nonsense, by Jeff Madrick for Next New Deal

The Truth About the GOP's Phony Shutdown Offer, by Jeff Madrick for Next New Deal

Social Security:

No Need to Cut the Little that Recipients Get, by Jeff Madrick for The New York Times

Good News on the Deficit Makes Social Security Cuts Even Worse, by Jeff Madrick for Next New Deal

Monetary Policy:

A Bit of Good News, by Jeff Madrick for Harper’s Magazine

Summers’ View on Monetary Policy Not So Hidden, by Jeff Madrick for Next New Deal

It Would be Tragic to Raise Rates Now, by Jeff Madrick for U.S. News & World Report

Unemployment Benefits:

Conservatives and Progressives Agree: Congress Should Not Cut Unemployment Benefits, by Nell Abernathy for Next New Deal

Looking Ahead: 2014 

In 2014, we will continue to develop and promote ideas about the positive role of government in the U.S. in general as well as how government can and should improve employment opportunities for all Americans. We specifically plan to host public events and commission papers on three key strategies for improved employment and GDP growth: the minimum wage, infrastructure investment, and government support of research and development.

In addition, we will increasingly focus our efforts on reducing the number of children living in poverty in America, arguably America’s greatest social problem and a major contributor to inequality and stagnating wages. In June, we will host a conference in Washington, D.C. that will bring together top policymakers and advocates to promote an agenda for fighting child poverty and reducing inequality overall.

In September, Alfred A. Knopf will publish Jeff Madrick’s new book, Seven Bad Ideas; How Economists Damaged America and the World. Its theme is related to the neglect of government, and much of the contents of the book reflect issues and ideas pursued by Rediscovering Government. 

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Looking to 2014: The Emerging Movement for the Next New Deal

Jan 2, 2014Richard Kirsch

The rise of a new progressive organizing is cause to believe that economic reform and a shift toward broadly shared prosperity are within reach.

The rise of a new progressive organizing is cause to believe that economic reform and a shift toward broadly shared prosperity are within reach.

Thomas Edsall, who now is capping off his long career writing insightfully about the relationship between economics and public opinion as a blogger for The New York Times, concluded a piece in late December by saying, “Progressives are now dependent on the fragile possibility that inequality and socioeconomic immobility will push the social order to the breaking point and force the political system to respond.”

Edsall’s bleak prognosis raises the biggest question facing not only progressives, but the future of our democracy: is the political system in the United States capable of responding to the escalating crisis of stagnant wages, shrinking benefits, dissolving economic opportunity, and disappearing hopes of living anything that resembles the American Dream?

It is a question I ask myself every day. But I reach a different conclusion than Edsall, because for all his powers of observation, he misses the role that people play in changing history. I see a growing movement of Americans organized by progressives who are not waiting for the social order to break, but are instead forcing the political system to respond.

Edsall reaches his conclusion by way of two commentators, my colleague Mike Konczal at the Roosevelt Institute and Harvard economist Ben Friedman. Konczal’s analysis of the quandary is cogent, as he provided “a two part description of the liberal state” in a 2011 post:

#1 you would have the government maintaining full employment, empowering workers and giving them more bargaining power, and #2 you would have a safety net for those who fell through the cracks… I think it is safe to say that liberals have abandoned #1 and doubled-down on #2… Without a strong middle and working class you don’t have natural constituencies ready to fight and defend the implementation and maintenance of a safety net and public goods. The welfare state is one part, complementing full employment, of empowering people and balancing power in a financial capitalist society.

Friedman’s contribution is to point out, as Edsall summarizes, that “during hard times people become less altruistic and more inclined to see the poor as undeserving.” Friedman says that when people are squeezed economically, rather than identifying with those still worse off, they “enter a period of retreat and retrenchment.” That is certainly what we are seeing now, with the government cutting unemployment benefits, food stamps, and a much larger swath of the safety net in a shrinking budget.

On the other hand, Friedman says times of broadly-shared prosperity encourage “greater generosity toward those who, through some combination of natural circumstance, market forces and sheer luck, have been left behind.”

When we look at the big periods of progressive change in the 20th century through this lens, we can ask, are we more similar to the soaring post-World War II middle class that led to the Great Society, or to the wrecked economy that led to the New Deal? After the Great Recession, that’s a no-brainer.

So is Edsall then correct in concluding that the only way to get to the next New Deal is waiting for another disintegration of the economy like we saw after the Great Depression? Or is even that a misreading of New Deal history, in which decades of building a movement of working people laid the groundwork for the New Deal laws that established the right to organize unions, fair labor standards like a minimum wage, and social insurance programs like Social Security and unemployment compensation?

If we have to wait, we’re in big trouble, because as we saw in 2008, we are much less likely to see another collapse like the Great Depression thanks to the progressive accomplishments of the 20th century. The aggressive use of the Federal Reserve and banking regulations prevented a total collapse of the financial system. The safety net – food stamps, Medicaid, etc. – and the social insurance programs of unemployment insurance, Social Security, and Medicare prevented widespread destitution. These measures allowed us to have a Great Recession rather than a second Great Depression.  

But the Great Recession also deepened the three-decade-long trend of families seeing their incomes and lifestyles squeezed by stagnant wages, eroding benefits, and the rising costs of gateways to opportunity. As a result, we are seeing an escalation of the path to the next New Deal: organizing people to demand that we create a 21st century economy of broadly-shared opportunity and prosperity.

The past year saw the explosion of organized fast food workers, from a handful of community-supported walk-outs demanding higher wages a year ago to actions involving thousands of workers and supporters in some 130 cities in December. The growing movement earned national as well as local news coverage.

Less visible, but deeper, is the emergence of new forms of worker organizing, taking place largely outside of traditional unions and the national labor law, known generally as the workers’ center movement. Domestic workers, through the National Domestic Workers Union, have won passage of laws giving them new labor protections in California and New York. Tomato pickers in Florida, under the banner of the Coalition of Immokalee Workers, have won higher wages by building consumer pressure against the supermarkets and restaurant chains that buy the crops they pick. Immigrant and low-wage workers around the country, at workers’ centers that are part of the National Day Laborers Organizing Network, have resisted wage theft and won basic protections in day labor and construction. The examples go on and are analogous to the emergence of the labor movement in the late 19th and early 20th centuries.

The long-simmering pressure for raising the minimum wage is now becoming a national political force, with Democrats embracing the issue. The passage of a $15 minimum wage in Sea-Tac, outside of Seattle, will be a harbinger of more local actions to define a minimum wage in ways that make sense for people’s lives, not some political calculation about what’s possible.

In New York City, City Council Speaker Christine Quinn’s reluctance to support paid sick days, siding with the business community, destroyed her support among the progressive base, paving the way for the election of Bill de Blasio, who rose both on his progressive platform and as the result of a decades-long base-building project in the city. These contests will continue to escalate, as we’ve seen in Philadelphia, where a Democratic mayor has twice vetoed a paid sick day ordinance approved by the City Council. As they do, Democrats who take the Quinn route will find themselves on the sidelines with her.

Cultural and demographic trends are encouraging, too. While the progressive politics of the growing numbers of the young, single women, and Latinos have garnered notice, another hopeful trend is that among non-college-educated whites, one of the most conservative groups in the country, the young are much more progressive than their older counterparts. Pope Francis has become an instant hero not just by easing back on his church’s focus on sex, but by directly challenging trickle-down economics.

In all this, history will look at President Obama as a transitional figure. He has pledged to make income inequality the defining issue of the day, but he still chooses a low-wage Amazon warehouse as a venue to address the issue. He still seeks to reconcile the destruction of the middle class with the rise of Wall Street.

Wall Street and K Street and the U.S. Chamber of Commerce, all greasing the system while stoking resentment of “the takers” and people of color, in a nation with a deep “it’s up to me and my family alone” streak, remain huge obstacles to building an America that works for all. The change we are making will take time.

What gives me hope is that, for all its flaws, we still live in a nation where popular will can make change. And we have a history of creating change from below and then electing leaders who, like FDR, drilled into the deep well of hope that has given life to the best of America, from the Revolution, through the Civil War, the Progressive era, the New Deal, the Civil Rights Movement, and the Great Society.

Earlier this week, on the last day of 2013, I called up Mike Konczal and asked him to reflect on Edsall’s dark conclusion. Here’s what he told me: “I’m more optimistic than I was when I wrote that piece two years ago. People are agitating, building new infrastructure. Issues like the minimum wage are gaining prominence. We’re seeing mobilizing among non-traditional workers like day-care workers.”

It is up to us to make history. Let’s get to work in 2014. 

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.


2014 banner image via Shutterstock.com

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Daily Digest - December 23: It's Hard to Trust in Systemic Economic Inequality

Dec 23, 2013Rachel Goldfarb

Click here to receive the Daily Digest via email.

In No One We Trust (NYT)

Roosevelt Institute Chief Economist Joseph Stiglitz argues that the behavior of banks leading up to the financial crisis and rising inequality have eroded Americans' trust in a fair economy. Stiglitz says that trust must be rebuilt through stronger regulations.

Click here to receive the Daily Digest via email.

In No One We Trust (NYT)

Roosevelt Institute Chief Economist Joseph Stiglitz argues that the behavior of banks leading up to the financial crisis and rising inequality have eroded Americans' trust in a fair economy. Stiglitz says that trust must be rebuilt through stronger regulations.

It’s Still Too Early for Congress to Stop Worrying About Unemployment (WaPo)

Roosevelt Institute Fellow Mike Konczal looks at data that demonstrates that the labor market hasn't fully recovered from the financial crisis. Mike says that policymakers have moved on from unemployment despite the data, but that doesn't mean the crisis is over.

Is the Economy in Good Shape–or Not? (MSNBC)

Timothy Noah considers the theory that long-term news about the economy demonstrates "secular stagnation," which could mean that the recovery won't last or is weaker than expected. GDP growth should reveal whether the slow recovery is a short-term or long-term problem.

Deserving vs. Undeserving Poor — for the Love of God, Here We Go Again (Washington Monthly)

Kathleen Geier looks at recent discussion of poverty by policymakers, journalists, and researchers. She concludes that those who divide the poor into "good" and "bad" groups are ignoring the structural causes of poverty, which can be fought through existing anti-poverty programs.

Wall Street Unlocks Profits From Distress With Rental Revolution (Bloomberg News)

Heather Perlberg and John Gittelsohn report on the new hot market on Wall Street: rental homes, and corresponding securities. These investors' high cash bids beat out individual prospective homeowners, which is a problem when a house is a key way to build family wealth.

Goldman Real-Estate Play Skirts Volcker Ban (WSJ)

Craig Karmin and Justin Baer explain how Goldman Sachs is working around the Volcker rule's prohibition on banks owning more than 3 percent of a private equity portfolio. The rule doesn't apply to real estate, which creates an opening for highly concentrated and potentially risky investments.

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A Silicon Valley CEO's Words Can't Hurt the Poor, But Government Can Help Them

Dec 18, 2013Nell Abernathy

Greg Gopman's callous comments about San Francisco's homeless demonstrate why we need government to support the most vulnerable Americans.

Greg Gopman's callous comments about San Francisco's homeless demonstrate why we need government to support the most vulnerable Americans.

So yet another Silicon Valley innovator is in trouble for publicly ranting about the horrifying experience of having to share San Francisco’s streets with our nation’s tired, poor, and huddled masses. Last week, AngelHack CEO Greg Gopman wondered why San Francisco’s homeless have the temerity to wander into civilized parts of the city. He wrote on his Facebook page, “You can preach compassion, equality, and be the biggest lover in the world, but there is an area of town for degenerates and an area of town for the working class. There is nothing positive gained from having them so close to us. It's a burden and a liability having them so close to us.”

The Internet went into a full-throttle shame-fest and forced Gopman to apologize on his Facebook page. Maybe I am jaded, but my indignation is a little less acute than some. Mostly, I don’t find arrogance and corruption on the part of industry leaders to be very novel. (To be fair, I’m not much surprised by arrogance and corruption on the part of think tank academics, non-profit do-gooders, or politicians either.)

Don’t econ textbooks tell us that our world is one comprised of individuals maximizing their own best interest? Why should any of us be surprised that techie X’s interest is to avoid homeless people or that banker Z’s interest is to get a really big bonus? While I vehemently oppose Gopman’s sentiments, I know that I am more likely to spend Wednesday night on my couch watching Nashville than working in a soup kitchen, so, you know, glass house and stones and all.

What this whole incident does underscore is the absolute need for a public sphere where we join together in service of something larger than our own petty interests. Through our government we can choose to live in a city and state and country where we are guided by more than our most self-serving of instincts. This is what so much of American anti-government rhetoric misses. The rules we choose to codify as “government” do not need to proscribe our freedom; rather, they can free us from the constraints of Lord of the Flies-like living.

This is a debate that could bring us back to Locke and Hobbes and even get us speaking in Greek, so instead I’ll stick to a few points.

1) Mr. Gopman is not unique in his dismissal of poverty in his neighborhood. Americans have demonstrated a remarkable ability to dismiss poverty in our country. Of the world’s top 35 richest countries, the U.S. is second only to Romania in child poverty. And just last week, Andrea Elliot at the New York Times put a face to the grim statistics with her meticulously reported series “Invisible Child.”

2) The belief that visionary entrepreneurs or privately funded non-profits can reduce poverty has not produced tangible evidence of success. The optimism from Silicon Valley that technology can save the world is perhaps best encapsulated by George Packer’s July New Yorker piece on the tech community’s political culture and Dave Eggers’ dystopian novel The Circle. We hear the same argument from Wall Street about the value of accessible capital; who can forget when Lloyd Blankfein claimed to be “doing God’s work”?  Indeed, finance and technology are powerful tools to improve lives, but who uses them and how they are used are important questions.

Keep in mind that despite the enormous increases in technology capacity and availability of credit, the official U.S. poverty rate has shifted from 14 percent in 1964 to 15 percent in 2012.  A new Columbia University study released last week measured American poverty according to location and transfers, and found the poverty rate in fact dropped from 26 percent in 1967 to 16 percent in 2012.  How did this drop occur? The researchers attributed the gains largely to government transfers.

3) The third false idea so often repeated is that the government cannot effectively do anything to help people. And as much as I wish the Department of Health and Human Services had turned to Mr. Gopman and his friends to build Healthcare.gov, I’m not ready to turn my back on government’s efficacy at tackling any or all public goals.

Let’s think of a few things that government has done that Mr. Gopman and the Silicon Valley crowd might appreciate. There’s the taxpayer-funded state college he attended, the government roads he drives on, the big bridges he probably crosses to get in and out of San Francisco, the public safety services he relies on to keep him from being mugged, the legal system he most likely employs to protect his company, and the cheap loans he may have benefited from thanks to remarkably low interest rates and inflation.

But let’s ignore all that and just focus on his bread and butter, technological innovation, which, Mr. Gopman and his friends may be surprised to learn, has been driven largely by government-funded research in basic science. Take the iPhone, for example. It took the genius of Steve Jobs to imagine and design the product, but it also took decades of government research to develop the components an iPhone needs to function. In a recent book, The Entreprenuerial State, Mariana Mazzucato traces the iPhone's roots to the defense researchers who developed the Internet, GPS, and the voice activation programs that served as Siri’s prototype. Public universities and labs funded by government dollars developed HTML and touch screens. Before going public, Apple even benefited from a $500,000 loan from the federal government’s Small Business Administration.

And for those who believe the private sector could have done it better, perhaps you will take the word of the American Energy Innovation Council, led by Bill Gates and Jeff Immelt. “When firms make investments in basic science or R&D, they create knowledge spillovers that benefit society as a whole, as well as other firms. Those other firms get a free ride on their competitors’ R&D investment. Because it is difficult for any individual firm to monetize all the benefits of these types of investments, the private sector has tended to systematically under-invest in R&D relative to the potential gains to society — even where a market for the desired technology exists.”

There is a time and a place for rugged individualism.  But I am grateful that I am dependent neither on the good will of Mr. Gopman nor the good will of any other rational self-interested individual for the common services I consume. Rather, I am relieved to rely on the good will of the public, that amorphous body in which we can all project our ambitions for a world more just and more free than one guided by the anarchy of our impulses.

Nell Abernathy is the Project Manager for the Roosevelt Institute's Bernard L. Schwartz Rediscovering Government Initiative.


Golden Gate Bridge image via Shutterstock.com 

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Daily Digest - December 16: When the Right Attacks "Corporatism," It Means "Government"

Dec 16, 2013Rachel Goldfarb

Click here to receive the Daily Digest via email.

"Corporatism" is the Latest Hysterical Right-Wing Accusation: The Secret History of a Smear (TNR)

Click here to receive the Daily Digest via email.

"Corporatism" is the Latest Hysterical Right-Wing Accusation: The Secret History of a Smear (TNR)

Roosevelt Institute Fellow Mike Konczal writes that when right-wing critics call out the Obama administation for "corporatism," or colluding with the rich to make them richer, they invoke government as the source of all market problems and forget that markets don't exist in a vacuum.

Is There a Conservative Alternative to Financial Reform? (WaPo)

Mike Konczal examines one possible alternative to Dodd-Frank proposed by Nicole Gelinas at the Manhattan Institute. He finds that she attacks policies she supported in 2009 and champions policies with no support in today's conservative movement, making it difficult to move forward.

Why Inequality Matters (NYT)

Paul Krugman argues that inequality is "the most important single factor behind lagging middle-class incomes." He also links inequality to the political reaction to the economic crisis, noting that policies focused on deficit reduction are economically destructive, but supported by the wealthy.

Justin Timberlake’s Union Tour (The Nation)

Jessica Weisberg speaks with Dana Wilson, a dancer and union organizer who helped to secure the first-ever union contract for back-up dancers on a tour. Wilson says many young dancers think they are invincible, but that doesn't keep them from needing health benefits and a pension.

The American Way of Hiring Is Making Long-Term Unemployment Worse (Harvard Business Review)

Gretchen Gavett interviews MIT's Ofer Sharone, whose research suggests that the white-collar "chemistry game" of hiring, which is focused on networking and intangibles, causes many rejected American job-seekers to think there is something wrong with them rather than the system.

Poverty Nation: How America Created a Low-Wage Work Swamp (Salon)

Joan Walsh ties the current crisis of low-wage workers who must rely on public assistance to get by to policy choices in the 1990s, which determined that any job was better than no job. These policies allowed some corporations to make huge profits subsidized by government support.

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Local Government is the Secret Weapon in the Fight Against Economic Inequality

Dec 12, 2013Joelle Gamble

With Congress gridlocked, we must look to local governments to pursue more innovative strategies for promoting equal opportunity.

With Congress gridlocked, we must look to local governments to pursue more innovative strategies for promoting equal opportunity.

Americans don’t believe in guaranteed equal outcomes, but we do believe in equal opportunity and the ability to achieve a decent livelihood if one works hard. Unfortunately, the United States, despite being the world’s largest economy, is in the top quartile of the most unequal states, along with countries like Bulgaria, and is more unequal than all of Europe. In addition to high levels of income inequality, the United States still faces a jobs crisis, meaning that many people who want to work to achieve economic stability cannot find gainful employment.

Given the congressional gridlock impeding efforts to promote economic opportunity at the federal level, we should look to community-based solutions to mitigate our unsustainable levels of inequality.

Over the past several decades, political leaders have tried to stimulate the economy on the supply side. They have provided incentives for businesses to invest in capital improvements, loosened regulations to encourage business growth, and lowered tax rates to give investors an incentive to take risks and create jobs. But we do not have a supply-side problem.

Our problem is on the demand side. Average Americans have so little wealth that they cannot afford to consume what companies sell. Income inequality has grown to the extent that those who are not at the very top can no longer afford to participate in the market.

Hyper-partisanship and the special interests that fuel it make it impossible for the current Congress to address the declining wealth of America’s middle- and low-income communities. Just look to the Ryan-Murray budget compromise: Congress is refusing to extend unemployment insurance, claiming that an extension will discourage recipients from looking for new work, while at the same time, congressional Republicans complain that the president is not creating enough jobs for those same workers. While they focus on scoring political points, American workers continue to suffer.

Given the intransigence and stalling at the federal level, what immediate actions can be taken to provide economic security and agency to average Americans? For this, one must turn to our cities and towns.

This is not a simple solution, because local governments do not have the same fiscal tools that Congress has. Cities cannot levy a progressive income tax on residents to fund redistribution, but instead must work with sales and property taxes. These taxes are regressive and punish the very people localities want to support. Some municipalities have tried to attract high-dollar business and residential developments in order to bring in revenues to support progressive programs such as universal pre-K and housing support. Unfortunately, too much development to this degree will backfire by pushing out lower-income and middle-class families.

In order to be effective, plans to address rampant inequality at the local level must be innovative. Instead of focusing on attracting developments solely as a source of tax revenue, local governments should incentivize the creation of local businesses that have fair and uplifting worker practices. For example, the Evergreen Cooperative Laundry in Cleveland Ohio, frequently referred to as the Cleveland Model, pays living wages and allows its employees to earn ownership in the company after a certain period of time. It is a prime example of providing an equal opportunity for American workers to maintain a decent livelihood and to move up economically if they commit to it.

By providing direct loans, utility subsidies, bonds for capital purchases, and other incentives to cooperative model businesses that promote high wages and greater employee agency, localities can support the growth of living wage businesses in areas where they may never have existed before. This will jumpstart a cycle of quality jobs for underserved communities and begin to remedy the demand-side economic challenges our economy faces.

While the detrimental effects of rising income inequality in America are widespread, we do not have to wait for federal action to start implementing solutions that will level the economic playing field. By supporting worker-empowering businesses close to home, local governments can both support job creation in their areas and provide workers with the opportunity they need to lift themselves out of their tough financial situations. 

Joelle Gamble is the Roosevelt Institute | Campus Network's National Field Strategist.


Vintage U.S. map image via Shutterstock.com

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Corporate Education Reform Won’t Solve the Problems Caused by Poverty

Dec 11, 2013Raul Gardea

Arne Duncan’s latest gaffe highlights the critical inequities of federal education “reforms.” Reversing these trends will require policymakers to acknowledge that education alone cannot create perfect equity of opportunity. 

Arne Duncan’s latest gaffe highlights the critical inequities of federal education “reforms.” Reversing these trends will require policymakers to acknowledge that education alone cannot create perfect equity of opportunity. 

Secretary of Education Arne Duncan hastily walked back his comments recently after dismissing Common Core opponents as “white suburban moms”  who had suddenly realized that their kids aren't as bright as they thought. This sparked a furor amongst parents and educators and thrust the Common Core back into the spotlight. Although the controversy over standards-based education is nothing new, it speaks volumes that the outrage doesn’t make the evening news until white suburban moms are singled out. If there is something positive to be gleaned from Duncan’s tactless comments, it is the public recognition that these federal policies have stratified education along race and class divisions—policies that Duncan presides over and advocates for as Obama’s education secretary.

Perhaps the uproar prompted by Duncan’s comments has less to do with white suburban outrage and instead signals a tipping point: a mainstream rejection of policies that are finally being exposed for their disproportionately detrimental impact on poor and minority communities. Duncan’s remarks provided a glimpse at the man behind the curtain. Race and class matter in education and Duncan simultaneously acknowledged and dismissed this.

It’s hard to sympathize with Duncan’s dismissiveness.

Common Core is just one of several examples of corporate influence in education. The foundations and consortiums behind these policies, like the Gates Foundation, Pearson, and others, all stand to profit from adoption of their methods, resources, and technology. But that’s neoliberalism in a nutshell. What is truly surprising has been the full-fledged support of high-stakes testing by the US Department of Education (DoE) under a Democratic president, continuing the infamous legacy of No Child Left Behind (NCLB). The mission of the DoE has been to fire “bad” teachers, as determined by their students’ test scores, and close schools which don’t meet these arbitrary and subjective goals.

Few would dispute that we should hold our educators and the children they are entrusted with to a high bar of excellence, but evaluating performance on test scores has never been a viable strategy. As Common Core test results have started trickling in, the results aren’t pretty. In New York, they show a widening of the achievement gap between black and white students. This leaves young teachers at a disadvantage since they are often placed in high poverty schools and are still learning on the job. They often have to also play the role of counselor, psychiatrist, and day care provider. So while the White Suburban Mom is disappointed because she’s tried her best to ensure the highest quality of life for her daughter, the Single Black Urban Mom who works two jobs simply can’t be as engaged with her son’s education: a child afflicted with toxic stress who then takes the same exam on an empty stomach. Ignoring these elements and relying solely on improving testing scores demeans the teaching profession and puts the students who need the most attention and wraparound services at a disadvantage.

Of course, this forms the ideological basis of corporate reform: firing “bad” teachers will fix education which will lead to middle class prosperity which will alleviate poverty. “College and career readiness” are the choice buzzwords found in the text of the Common Core. Speaking to Politico, Duncan said, “the path to the middle class runs right through the classroom.” Such a perspective, keen in the 1960s, sounds positively outmoded in 2013. As Millennials are quickly realizing, that rose-tinted vision of education as the great social equalizer simply cannot reconcile the effects of the Great Recession and decades of bad policy.

This is the crux of the issue. It really is all about money. Merit pay, standardization, union-busting, school closures, austerity budgets, unregulated charters, all coupled with persuasive messaging and the endorsement of both major political parties means corporate reform will make a few people very rich at the expense of equity and inclusiveness. Education is just another avenue where the profit motive has been pecking away at the remains of public institutions that we spent decades building.

It seems like grassroots uproar is finally coming to a head. The start of National Education Week this year saw anti-Common Core protests in New York, South Carolina, Maryland, and several other states. Much like the solidarity seen in recent fast food employee strikes and Black Friday protests from workers demanding fair wages and labor practices, teachers, parents, administrators, and legislators from all political stripes are uniting in opposition to unproven policies and their slapdash implementation across the country. Parents and educators should not be pitted against one another but realize their interests are very much aligned.

We have to acknowledge that non-school factors play a major role in learning outcomes and policymakers must know that enough is enough. Vast income inequality can lead to inequality in education, so we must ensure adequate funding formulas can meet the needs of diverse demographics. We must ensure access to affordable, quality healthcare for all families. We must further integrate schools to reduce achievement gaps. We must support the collective bargaining rights of teachers, who are often overburdened by factors outside the scope of their profession. As progressive populism is reignited, we must recognize that these issues are not about ideology but about pragmatism. Reinventing our social infrastructure for the 21st century means we simply cannot afford to treat our schools as a market ripe for competition any longer.

Raul Gardea is the Roosevelt Institute | Campus Network's Senior Fellow for Education.

Photo via Shutterstock.

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Daily Digest - December 10: A Reminder That Policy Affects Human Lives

Dec 10, 2013Rachel Goldfarb

Click here to receive the Daily Digest via email.

Invisible Child (NYT)

Andrea Elliot reports in great depth on the life of a homeless girl in Fort Greene, Brooklyn. By placing this story in context with Mayor Bloomberg's housing and homelessness policies, she makes the effects of bad policy on human lives crystal clear.

Click here to receive the Daily Digest via email.

Invisible Child (NYT)

Andrea Elliot reports in great depth on the life of a homeless girl in Fort Greene, Brooklyn. By placing this story in context with Mayor Bloomberg's housing and homelessness policies, she makes the effects of bad policy on human lives crystal clear.

Study: U.S. Poverty Rate Decreased Over Past Half-Century Thanks to Safety-Net Programs (WaPo)

Zachary Goldfarb reports on a new study from Columbia University, which contradicts the official poverty rate significantly. The researchers traced back poverty using newer standards, and found that the safety net is particularly effective at protecting kids from poverty.

How Inequality Became as American as Apple Pie (The Nation)

Jessica Weisberg compares the concepts of inequality and mobility, ways to discuss poverty that appeal to opposite ends of the political spectrum. The right may prefer to talk about mobility, but social mobility in the U.S. is pretty terrible, which maintains inequality.

Let's Get This Straight: AIG Execs Got Bailout Bonuses, but Pensioners Get Cuts (The Guardian)

Dean Baker asks why the White House had to maintain AIG's contractual obligations during the bailout, even when it meant paying bonuses in March 2009, but Chicago can ignore its contracts to pensioners today.

Robbing Illinois's Public Employees (TAP)

David Dayen explains how pension theft has become a new norm. Public employees can no longer count on ever seeing the pension funds they negotiate for today, and the current retirees are in an even worse place, because many don't receive Social Security.

Tea Party Representative Supports Wasteful Government Program, Because YOHO (NY Mag)

Jonathan Chait says there's one clear tie among the government programs supported by Republican obstructionists: private profits. When sugar subsidies are "accepted norms," as Rep. Yoho (R-FL) said, it must be better to cut SNAP or Medicaid.

More Than Three-Quarters of Workers Missing from the Labor Force Are Under Age 55 (Working Economics)

Heidi Shierholz looks at a breakdown of "missing workers" (those who are neither employed nor looking for work) by age. Only a quarter of the missing workers could be early retirees, and the other 4.3 million will probably reenter the job market when it picks up.

New on Next New Deal

Think Global, Act Hyper-Local: Campus Network Rates Colleges on Economic and Social Impact in Their Communities

Roosevelt Institute Associate Director of Networked Initiatives Alan Smith explains a new Roosevelt Institute | Campus Network initiative, in which students will help their schools find ways to improve how they affect local communities.

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Think Global, Act Hyper-Local: Campus Network Rates Colleges on Economic and Social Impact in Their Communities

Dec 9, 2013Alan Smith

The Roosevelt Institute | Campus Network is launching a new project next month to analyze how anchor institutions such as colleges and universities affect their local economies, and help those institutions make changes for the better.

The Roosevelt Institute | Campus Network is launching a new project next month to analyze how anchor institutions such as colleges and universities affect their local economies, and help those institutions make changes for the better.

With the social contract failing many Americans, the Roosevelt Institute | Campus Network has undertaken a new project to explore ways to reverse it. The things we, as Millennials, have long been told are core parts of the American bargain – public education, safe working environments, affordable healthcare, the basic ability to provide for one’s family – are becoming harder to achieve in the 21st century.

To address this daunting trend, students in our campus chapters are undertaking an experiment, which we call “Rethinking Communities.” It is based on the assumption that localities – cities, towns, and even neighborhoods – will drive the economies and politics of the future. This approach reflects the innovative thinking that has been a hallmark of the Campus Network for the past decade. The Campus Network has long looked to local action in many places as a means of influencing the direction of the nation. We see an intentional community-building endeavor as a start to counter issues raised by globalization, increased inequality, outsourcing of jobs, and changes in technological capabilities.

We reject a binary vision of the government and economy that holds that either government exists solely to support markets, or that government responds to societal challenges through regulation and policy change. The Millennial generation has had ample evidence that this dichotomy misses something: the Great Recession undercut the idea that markets are reliable adjudicators of the public good, and the recent government shutdown made amply evident that Washington cannot respond effectively to many of the immediate problems we face.

This is why the Campus Network will look to bring a different social pressure to bear: that of community governance, which draws on the strengths of local structures to fill the gaps left by the market and the federal systems. While the concept of trusting local groups to rule on local issues is not a new one, the possibilities of a truly networked system of community governance opens up huge new potential. Just as the Internet has driven down costs and other factors in manufacturing and production, we aim to explore possibilities for a new labor movement, new locally supported economies, and new ways of patching together shared identity and support from many small collaborating groups instead of a single top-down organizing force.

Our objective at the Campus Network is to take advantage of our physical presence in communities nationwide, and find optimal ways to rethink local economies. With the goal of reforming anchor institutions that are the backbone of these communities (anchor institutions are places like hospitals or colleges and universities), here’s what we’ll be doing in the coming year with chapters throughout our 115-chapter network:

Using the set of metrics developed by the Democracy Collaborative, an organization based at the University of Maryland that advocates for economic justice and increased access to democracy, that were expanded and refined by Campus Network’s membership, students at multiple chapters, including University of Tennessee, Goucher College, and the University of Michigan, will assess their own college or university. These metrics, which are akin to a report card (think LEEDS standards), have been built to define how well an institution facilitates local economic development, community building and education, health, safety and environment. By using the same set of metrics across the board, we will both grow our understanding of a how a specific institution can improve in its role as a local anchor, and contribute to a larger understanding of how anchor institutions compare to each other.

Based on these metrics, groups will write proposals that improve a specific weakness. Redirecting a portion of a University’s purchasing to focus on locally owned businesses, facilitating the creation of financially secure households, or working to improve the health of community residents are all projects that play to the social role of colleges and universities. While we work to implement these local fixes, the Roosevelt Institute | Campus Network will collectively create a method to grade anchor institutions across the country on how they alleviate or exacerbate economic inequality. Might this comparative process put real pressure on universities – and eventually, hospitals, airports, or even sports teams – to do a better job in responding to the needs and values of the communities where they’re based? That is what we hope to examine.

We can’t be sure if we can scale the Rethinking Communities project to our national problems, in order to rebuild the robust social contract that America has with its citizens. But through the bold and persistent experimentation of the Campus Network, we aim to see how far we can go to create new self-sustaining economies that resist the economic pressures of the larger world. And in that innovative spirit, we hearken back to the values of Franklin Roosevelt that undergird all of our work: a system that is more balanced, more sustainable, and more able to support the common good.

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

Photo via Roosevelt Institute | Campus Network

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