Daily Digest - November 26: What Are One-Day Strikes Achieving?

Nov 26, 2014Rachel Goldfarb

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The Daily Digest is taking a short break for Thankgiving. It will return on Monday, December 1.

Why Wal-Mart Workers Keep Using One-Day Strikes (Bloomberg Businessweek)

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The Daily Digest is taking a short break for Thankgiving. It will return on Monday, December 1.

Why Wal-Mart Workers Keep Using One-Day Strikes (Bloomberg Businessweek)

Josh Eidelson explains that one-day strikes are on the rise because, while they don't shut down workplaces, they embarrass employers and engage the public just like work-stopping strikes of the past.

Exclusive: Kmart Workers Say They Risk Being Fired If They Don’t Come In On Thanksgiving (ThinkProgress)

Bryce Covert reports on the scheduling practices of some major retailers that will open on Thanksgiving. One Kmart employee she spoke to is quitting rather than miss Thanksgiving with her husband, who has cancer.

The Rich Are Getting Richer, But It Has Nothing To Do With Their Paychecks (Vox)

Salaries and wages of the top 400 taxpayers have fallen in recent years, reports Danielle Kurtzleben, but their incomes continue to rise, and their tax rates drop, thanks to capital gains.

San Francisco Passes First-In-Nation Limits on Worker Schedules (Politico)

Marianne Levine writes about the city's new restrictions on how chain stores can alter their employees' schedules. Changes within two weeks will require additional "predictability pay."

Obama Threatens Veto of Emerging Tax-Break Agreement in Congress (Bloomberg)

Richard Rubin reports on the president's opposition to this deal, which extends a set of corporate tax cuts but doesn't extend lapsing expansions of the child tax credit and earned income tax credit.

Why Living-Wage Laws Are Not Enough—and Minimum-Wage Laws Aren’t Either (The Nation)

Jonathan Lange, who led the first living wage campaign in Baltimore, says that without building worker power more generally, these laws fall short.

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Artisanal Millennials and the Resurrection of Free Labor Ideology

Nov 25, 2014Brit Byrd

Millennial's rising preferences for artisanal, local, and genuine products must not minimize the importance of wage labor in the economy.

In July, John Oliver’s Last Week Tonight summarized the state of the minimum wage debate in one grand old super-cut of sound bytes. To top off repeated invocations of “class war!” Senator Marco Rubio croons that “We have never been a nation of haves and have-nots. We are a nation of haves and soon-to-haves. Of people who have made it and people who will make it.”

Millennial's rising preferences for artisanal, local, and genuine products must not minimize the importance of wage labor in the economy.

In July, John Oliver’s Last Week Tonight summarized the state of the minimum wage debate in one grand old super-cut of sound bytes. To top off repeated invocations of “class war!” Senator Marco Rubio croons that “We have never been a nation of haves and have-nots. We are a nation of haves and soon-to-haves. Of people who have made it and people who will make it.”

Putting aside Oliver’s observation that this statement “makes no sense – economically, mathematically, or even grammatically,” it is nonetheless very informative of the ideology behind the resistance to raising the minimum wage.

Rubio’s rhetoric is an ideological descendent of “free labor ideology,” a defining tenet of the Republican Party before the Civil War. Made famous by historian Eric Foner in his seminal work, Free Soil, Free Labor, Free Men, free labor ideology stood vigorously against the economic dependence of one individual on another.

Although this ideology admirably stood in opposition to slavery, it predated the industrial revolution and thus developed a strange relationship with the rise of the non-propertied, yet emancipated, wage-earning class. When the wage earner was introduced to the dichotomy between the slave and the propertied man, the ideal citizen of free labor ideology remained “a farmer or independent mechanic,” with wage labor on the outside looking in.

In Free Soil, Free Labor, Free Men, Foner observes that although the progenitor of capitalism, Adam Smith, had “seen intractable class divisions as an inevitable consequence of economic development,” across the ocean, thinkers and politicians held that “in America, wage labor was a temporary status, and 'laborers for hire do not exist as a class.'”

Eventually, after a grand period of nation building, the industrial revolution, and the progressive movement, wage labor was recognized beyond this transitory status.

But even the most casual observer of American politics knows of the continued ubiquity of the “self-made man” in the political lexicon. Although less blatant, the specific image of the homestead also remains inappropriately fixed in our collective political imagination – and not just with Marco Rubio, but also amongst Millennials who may consider themselves committed progressives.

Weighing in on what is and isn’t “Millennial” has been the media’s fetish for quite awhile now, but earlier this year the Pew Research Center threw some fresh meat into the otherwise overcooked discussion. Their report, “Beyond Red vs. Blue: The Political Typology” identified a “next generation left” that was six times more likely than traditional liberals to agree with the statement “blacks who can’t get ahead are responsible for their own condition.”

The headlines wrote themselves: Millennials are libertarians, Millennials have abandoned the state, seven gifs that show how Millennials are racist, and so on. Amongst the dreck, an exceptional column in The New York Times by Anand Giridharadas distinguishes this anti-institutional vogue as a personal reaction against impersonal big-box capitalism, not a political reaction. In his most potent example, “the locally foraged mushrooms on menus in Brooklyn … are a small-scale elite secession from the ways of ruthless global trade, not a political resistance of it.“

Giridharadas contrasts this urban farm-to-table fascination with the more familiar, anti-state views we see from the right, which are “anchored in rural life.” Yet his local-mushrooms example is his most potent because it hints effectively at an actual connection between this millennial angst and the very old image of bucolic self-sufficiency. It is not just the newfangled app-tech craze of Uber and Venmo driving this reaction, but also a very organic, homestead aesthetic.

In fact, this visual connection has already been made explicit. Look no further than Portlandia’s revised anthem for the city that so infamously exaggerates our generation: the “dream of the 1890s is alive [in Portland].” As front man Fred Armisen notes, remember when “everyone was pickling their own vegetables and brewing their own beer?”

Now obviously, Portlandia is an exaggeration of a particular trend. But this compulsion towards the “genuine” and “artisanal” does permeate our current moment. Not every child of the late 60s was at Woodstock or burning draft cards, but it would be specious to suggest that such cultural touchstones did not and do not affect the generational perspective.

Ultimately, Portlandia’s invocation of the 1890s is cruelly apropos, given that we are now living in what many refer to casually as a “New Gilded Age.” Giridhadaras’ take that, “though some [millennials] may fight it, they cannot, in the main, escape Amazon and its cutthroat brand of capitalism,” is similar to the dominance of industrial tycoons in the late 19th century that overshadowed even the state.

Farm-to-table fascination represents a welcome political-cultural rebellion against the big box, but it shares an aesthetic with the free labor ideology that lifts Senator Rubio’s rhetoric and head into the clouds.

To finish Portlandia’s anthem, front woman Carrie Brownstein notes of 2014 Portland, “it’s like President McKinley was never assassinated.” As a nation, we were lucky enough to have none other than President Theodore Roosevelt fill McKinley’s shoes and plant the seeds of the Progressive Movement that his fifth cousin would later go on to solidify in the New Deal.

Millennials must be careful to not let fascination with the artisan keep them rooted in an era before Roosevelt. This reevaluation of authenticity is, on the whole, a welcome development . But now, just as in the 1890s, the frontier has closed and wage labor is a pressing political, economic, and quotidian reality.

Brit Byrd is the Roosevelt Institute | Campus Network Senior Fellow for Economic Development and a senior at Columbia University.

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Daily Digest - November 25: Wall Street's Deals Hit Every Taxpayer

Nov 25, 2014Rachel Goldfarb

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Wall Street’s Taxpayer Scam: How Local Governments Get Fleeced — and So Do You (Salon)

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Wall Street’s Taxpayer Scam: How Local Governments Get Fleeced — and So Do You (Salon)

Elias Isquith interviews Roosevelt Institute Fellow Saqib Bhatti about his new report on how governments can push back against Wall Street's predatory deals.

Food Pantries Stretched to Breaking Point by Food Stamp Cuts (AJAM)

Ned Resnikoff reports on the crisis facing food pantries in NYC, where one-third of food banks and soup kitchens had to turn people away in September.

Corporate America Is Using the Sharing Economy to Turn Us Into Temps (TNR)

Noam Scheiber says the sharing economy's expansion into temp work is part of a trend of workforce restructuring from hiring staff for peak loads to hiring the absolute minimum.

This Is the Next Big Fight Between Progressives and the Wall Street Dems (The Nation)

Senator Warren and others are protesting the nomination of Antonio Weiss to a major role in Treasury, citing his work on tax-avoiding practices like corporate inversions, writes Zoë Carpenter.

Let Old Labor Die (In These Times)

Jeremy Gantz reviews Tom Geoghegan's new book, which prescribes new models of labor organizing that are more democratic, outside of the bounds of the National Labor Relations Board.

New on Next New Deal

Artisanal Millennials and the Resurrection of Free Labor Ideology

Roosevelt Institute | Campus Network Senior Fellow for Economic Development Brit Byrd says growing preferences for artisanal products cannot be allowed to erase the importance of wage labor in our economy.

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Bigger Health Care Providers Mean Bigger Profits, But Not Always Better Care

Nov 24, 2014Emily Cerciello

Hospitals are buying private physician practices left and right, and state attorneys general should consider whether such mega-providers violate anti-trust laws.

Hospitals are buying private physician practices left and right, and state attorneys general should consider whether such mega-providers violate anti-trust laws.

In 2002, only 22 percent of private physician practices were owned by hospitals. Today, this number has climbed to more than 50 percent, and 75 percent of newly hired physicians are entering the workforce as hospital employees. As the physician population ages, the behaviors of young physicians will have long-term impact on the organization and norms of care delivery.

Amid declining reimbursements and a shift toward value-based payment models in which physicians are reimbursed for quality rather than quantity of services, health care providers are facing pressure to reduce costs and improve outcomes. An increasing number of physicians are selling their practices to hospitals, and hospitals are aggressively buying to remain competitive.

Two chief catalysts that are driving hospitals to purchase physician practices include the recent economic downturn and passage of the Patient Protection and Affordable Care Act (ACA).

In this economic environment, hospital survival is a matter of cost cutting and care organization. The ACA requires compliance with new quality regulations, including curbed readmission rates and a reduction in hospital-acquired infections, and facilities are compelled to spend money in efforts to meet those requirements. Hospitals are acquiring physician practices to increase scale for better negotiating positions with insurers, further penetration of local markets, the ability to integrate IT systems, and the improvement of purchasing power with suppliers.

Physicians are selling their practices to hospitals for greater access to capital and fewer administrative responsibilities amid reform, an improved work-life balance, and recruiting incentives by hospitals.

But when hospitals purchase physician practices instead of contracting with physicians, the results can be costly. A recent Health Affairs study gives authority to the issue: hospital ownership of physician practices increases hospitals’ pricing power, and prices rise for privately insured patients. A one-standard-deviation increase in market share can increase prices by 3 percent, and a one-standard deviation increase in hospital Herfindahl-Hirschman Index (a statistical measure of market concentration), can increase prices by 6 percent.

In central North Carolina, Duke University Health System has been aggressively converting nearby clinics into Duke-affiliated outpatient centers. State Attorney General Roy Cooper is examining whether antitrust laws or new legislation can be used to reduce growing hospital prices.

In January, a federal judge blocked a major purchase of Idaho’s largest physician practice by the state’s largest hospital system. In light of that case, the FTC has suggested it will show greater scrutiny of healthcare provider consolidations.

In theory, true integration of physician practices into hospital systems can provide substantial gains for both parties. By reducing barriers to patient information and care coordination, facilities can improve quality and generate cost-savings in the long-term. Truly integrated practices employ a well-managed infrastructure, aligned incentives, coordinated IT tools, and a culture of partnership and collaboration. But there is a great possibility that hospitals are primarily motivated by the prospect of greater bargaining power with insurers, and are not truly integrating.

State Attorneys General should renew a focus on anti-trust legislation to protect the strained wallets of healthcare consumers in states where transactions are occurring. In a time of seismic shifts in care delivery and payment mechanisms, we need to keep the patient at the center of health activity and ensure that transactions do not further burden consumers in an already expensive system.

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 - November 24: How to Win Minimum Wage Fights

Nov 23, 2014Rachel Goldfarb

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The Fight for $15.37 an Hour (NYT)

Steven Greenhouse explains how the Los Angeles Alliance for a New Economy won its campaign to get hotel workers in L.A. a significantly higher minimum wage.

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The Fight for $15.37 an Hour (NYT)

Steven Greenhouse explains how the Los Angeles Alliance for a New Economy won its campaign to get hotel workers in L.A. a significantly higher minimum wage.

Elizabeth Warren Tells NY Fed President: Fix Your Problems, Or We’ll Find Someone Who Will (Buzzfeed)

At the Senate Banking Committee on Friday, the four senators in attendance – all Democrats – pushed back hard on William Dudley's framing of his work as a "fire warden," reports Matthew Zeitlin.

What’s a CEO Really Worth? Too Many Companies Simply Don’t Know (WSJ)

Paul Vigna writes about a new report examining how executive compensation lines up with company performance. It turns out that most companies don't measure success very accurately.

  • Roosevelt Take: In her primer on the CEO pay debate, Roosevelt Institute Fellow Susan Holmberg lays out the main theories for the skyrocketing in executive pay and potential policy solutions.

Obama's Executive Action Is About Labor Policy, Not Just Immigration (AJAM)

E. Tammy Kim explains how work authorization will transform opportunities for many undocumented workers, who will have new opportunities to organize or fight wage theft without fear.

The Antitax Push Has Done Harm to State and Local Government (WaPo)

Catherine Rampell says the piecemeal way that state and local governments create new revenue sources are far worse for the economy and inequality than raising taxes would be.

  • Roosevelt Take: Roosevelt Institute Fellow Saqib Bhatti explains the impact of predatory financial deals taken on by state and local governments struggling to fund public services.

The GOP Controls Congress So Now It Can Change How Math Works (MoJo)

The Republicans' preferred method of calculating budget projections uses impossible predictions about economic growth, writes Erika Eichelberger, making tax cuts appear less costly.

New on Next New Deal

Bigger Health Care Providers Mean Bigger Profits, But Not Always Better Care

Roosevelt Institute | Campus Network Senior Fellow for Health Care Emily Cerciello calls on state attorneys general to consider whether hospitals that buy up physicians' practices are violating anti-trust laws.

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Daily Digest - November 21: Costly, Risky Deals Can Be Undone

Nov 21, 2014Rachel Goldfarb

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Teachers Union, Advocates Protest and Ask CPS to Act on Costly Borrowing (Chicago Tribune)

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Teachers Union, Advocates Protest and Ask CPS to Act on Costly Borrowing (Chicago Tribune)

Heather Gillers reports on a rally led by the Chicago Teachers Union, where Roosevelt Institute Fellow Saqib Bhatti urged the mayor to push hard on banks to recoup losses from too-risky deals.

  • Roosevelt Take: For more on this issue, read Bhatti's new report, "Dirty Deals: How Wall Street’s Predatory Deals Hurt Taxpayers and What We Can Do About It."

From Phone Booths to Hot Spots (Medium)

Roosevelt Institute Fellow Susan Crawford praises a new plan to convert New York City's pay phones into high-speed wireless hotspots, which she says would help local businesses immensely.

Facebook’s Shuttle Bus Drivers Seek to Unionize (NYT)

Steven Greenhouse reports on the drivers' reasons for unionizing, which center around their very difficult split-shift schedule and wages that are insufficient for housing near work.

Wall Street is Taking Over America's Pension Plans (The Intercept)

Murtaza Hussain calls Wall Street's funding campaigns in hopes of shifting public pensions to investments that build their profits "the biggest financial story of our generation that you’ve never heard of."

Congress Must Not Let Wind Energy Jobs Blow Away (The Hill)

Michael Brune and Leo W. Gerard call for the renewal of the Wind Production Tax Credit, arguing that wind power isn't just better for the environment, but also has the potential to create thousands of jobs.

Fed’s Dudley Sees Loss of Trust in Banks as Threat to Stability (WSJ)

Senate testimony from the President of the New York Federal Reserve argues that there is a case to be made for splitting up the big banks even now, writes Pedro da Costa.

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Daily Digest - November 20: From the Banks to the Fed and Back Again

Nov 20, 2014Rachel Goldfarb

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New Scrutiny of Goldman’s Ties to the New York Fed After a Leak (NYT)

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New Scrutiny of Goldman’s Ties to the New York Fed After a Leak (NYT)

The leak has led to questions regarding the conflict of interest that arises when people advise the same banks they used to regulate, write Jessica Silver-Greenberg, Ben Protess, and Peter Eavis.

Are Financial Whistleblowers Worth It? Study Says Yes – to the Tune of $21.27bn (The Guardian)

Jana Kasperkevic reports on a new study that proves the value of financial whistleblowers. Rewards encourage whistleblowers to step up, and companies in such cases pay heavier penalties.

Loan Servicer Busted for Backdating, But Foreclosure Victims Say Shenanigans Haven’t Stopped (In These Times)

Ocwen Financial has admitted to a "glitch" involving back-dated loan modification letters, but Joel Sucher says the slow work to fix the problem follows familiar patterns.

Lenders Shift to Help Struggling Student Borrowers (WSJ)

Annamaria Andriotis reports on the plans of two major private student loan providers to lower interest rates, extend repayment periods, and modify loans.

Why It's So Hard for Millennials to Find a Place to Live and Work (The Atlantic)

Derek Thompson explains that cities that provide the best opportunity for economic mobility and cities that have affordable housing hardly overlap at all today.

New on Next New Deal

A Dem Who Can Explain that Fairness is Prosperity Will Sweep in 2016

Roosevelt Institute Senior Fellow Richard Kirsch argues that Democrats who focus on economic policies that emphasize fairness (which are the best ones for economic growth) will succeed.

Leadership Wanted: Governor Cuomo, Homeless Students Need College Support

Roosevelt Institute | Campus Network Leadership Director Kevin Stump proposes a new program to support homeless youth in achieving their college goals.

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A Dem Who Can Explain that Fairness is Prosperity Will Sweep in 2016

Nov 19, 2014Richard Kirsch

The policies that will deliver economic growth also center fairness, and that's what Democrats need to emphasize to keep the presidency in 2016.

The policies that will deliver economic growth also center fairness, and that's what Democrats need to emphasize to keep the presidency in 2016.

The familiar debate within the Democratic Party – move left or right – is on. In a memo to a “limited number of Democratic leaders,” Third Way, the leading organization for corporate Democrats, lays down the gauntlet: “Democrats are offering economic fairness, but voters want economic growth and prosperity.” And for good measure, Third Way declares, “And it has to be meaningful; Democrats can’t simply stick a 'growth' label on the old bottle of 'fairness' policies.”

The folks at Third Way are right about one thing; voters do want economic growth and prosperity. Where they are wrong is in their assumption that fairness can't be a part of that growth. The policies that do the most to bolster fairness are in fact the most powerful policies to move the economy forward and create broadly shared prosperity.

Progressives and Democrats don’t always make that clear. Most of the time they talk about fairness as separate from broadly-shared prosperity. The Democrat who bases his or her campaign on that crucial link will sweep into the presidency in 2016.

Policies that increase fairness are key to driving the economy forward.

Raising the minimum wage is not just about basic fairness for low-wage workers. Raising wages is about creating economy boosting jobs, not economy busting jobs. When wages are raised, workers have more money to spend, essential when 70 percent of the economy is made up of consumer spending.

An economy boosting job pays enough to cover the basics, which is why the fight for a $15 per hour minimum wage mobilizes people to action. It is about working at that wage for enough hours, with predictable schedules, so that the wages add up to a decent paycheck. It is about getting paid when you are out sick and having paid family leave, so you can care for and support your family. It is about women getting paid as much as men. It is about being able to afford your health care, so you have money to spend on other essentials and don’t end up bankrupt because of a high-cost illness. It is about increasing Social Security benefits and bolstering retirement savings, so you can keep supporting yourself and keep the economy moving well into your retirement.

These measures reward people fairly for work and are essential to rebuilding the middle class engine of the economy, as shown by the evidence collected in the Center for American Progress’s middle-out economics project.

The flip side of creating economy boosting jobs is reversing the soaring concentration of wealth. It’s not just unfair that the rich are grabbing more and more of the wealth we all create, it’s a big reason that the economy remains sluggish. When the top 1 percent capture virtually all of the economic progress, it's impossible for them to spend much of it. When corporations sit on trillions of dollars of cash because there aren’t markets for their goods, that money doesn’t go to higher wages or investment in creating jobs or other things that would boost productivity throughout the economy.

Even Wall Street is beginning to get it. In a report that is stunning only for its source, Standard & Poor's found this summer that “Our review of the data, as well as a wealth of research on this matter, leads us to conclude that the current level of income inequality in the U.S. is dampening GDP growth, at a time when the world's biggest economy is struggling to recover from the Great Recession and the government is in need of funds to support an aging population.”

A big goal of Third Way’s memo is to justify policies that they admit “may not be the most politically popular.” While some of the Third Way proposals are worthwhile, like millions of teachers for pre-K, much of their agenda is that of corporate America and in some cases would actually be bad for the economic growth they claim to seek.

Using coded language in an attempt to dilute the political poison, Third Way pushes for cutting Social Security benefits, lowering corporate tax rates rather than stopping corporate tax evasion, and agreeing to new trade deals which would drive the race to the bottom and allow corporations to challenge environmental and health and safety laws, instead of bolstering American workers' already hard-pressed incomes.

Instead, what the country needs and what Democrats should push are bold policies which drive the economy forward and create broadly shared prosperity: fairness.

We can start by putting Americans to work with a massive investment in core productive infrastructure in three areas: transportation, from roads and bridges to high speed rail; clean, renewable energy, which will simultaneously tackle climate disruption; and high-speed Internet for every home and business in America. Everyone who does this work should be paid enough, with good benefits, to support and care for their families, and be given the flexibility needed to care for those families.  In doing so, we doubly boost the economy: through the investment in infrastructure and through the good jobs.

It is both fair and essential for our economic future to ensure that every child has a quality education and the opportunity to succeed in school, career, and life. We need to modernize and replace dilapidated schools and assure that every child has a well-prepared and supported teacher in a small enough class to learn. We need to transform schools, particularly those that teach children in low-income neighborhoods, into community centers. We should make high-quality child care and pre-K universal, employing millions more providers and teachers.

We need to provide career training for the high-skilled jobs that don’t require traditional college. We need to make college affordable, by dramatically lowering the cost of public colleges and universities, providing much more tuition assistance, and tying the payment of student loans to earnings.

And as in infrastructure, all these jobs – from day-care providers to teachers to college professors (no more adjuncts) – should be good jobs, with good pay, benefits, and the flexibility to care and support families.

The only reason that Democrats would consider an agenda that Third Way admits is politically unpopular is to please corporate campaign donors and elites. But with President Obama pushing for new trade deals, advocating revenue-neutral corporate tax reform and having supported cuts in Social Security benefits, that agenda is as alive as the billions in campaign contributions that pour into both political parties.

Americans are right about two things. One, the system is rigged to favor the wealthy and powerful. Two, unless we change course, the future will not be better for our children. Those are the core reasons we saw historically low voter turn out this month and why minimum wage hikes passed at the same time voters decided to give Republicans their turn in the continuing roller-coaster of Congressional control over the past decade.

The Democrat who champions bold policies to build an America that works for all of us, not just the wealthy, and policies that create broadly shared, sustainable prosperity, will triumph in 2016.

The key, as Franklin Delano Roosevelt did (and as great organizers do), is to tap into anger and lift up hope. FDR railed against the “economic royalists” and experimented with bold policies that reigned in financial speculation and put Americans to work building the foundations for the 20th Century economy. 

The next FDR will name the villains who are rigging the system: Wall Street speculators and corporations that cut wages and benefits and ship jobs overseas. The next FDR will reveal the truth that “we all do better when we all do better.” That when we all earn enough to care and support our families, when we can shop in our neighborhoods, give our kids a great education, afford our health care, retire with security, we drive the economy forward.

Mamby-pamby won’t cut it. Americans are crying for bold leadership, a way out of a narrowing world towards a better world for our children.

The Democrat who leads a political party that stands up against the rich and powerful and stands up for working families and the middle class, who declares that Americans have done this before and that together we can do it again, will triumph in 2016. A Democratic party that relentlessly presses that agenda into action will meet the great challenge of our time. 

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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Daily Digest - November 19: Why Do So Few Workers Get Overtime Pay Today?

Nov 19, 2014Rachel Goldfarb

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Whatever Happened to Overtime? (Politico Magazine)

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

Whatever Happened to Overtime? (Politico Magazine)

Nick Hanauer says that raising the earnings threshold for mandatory overtime pay would kickstart the economy by either ensuring workers have more money or forcing companies to hire more workers.

Can Republicans Shut Down the Government Without Actually Shutting Down the Government? (WaPo)

Paul Waldman explains the GOP plan to stop any executive action on immigration without shutting down the government. The strategy: to pass spending bills that exclude the offices that would work on that issue.

Over Bentley's Objections, Golden Dragon Plant Votes for Union (Montgomery Advisor)

The Republican governor of Alabama urged workers at a copper plant to vote against unionizing with a letter distributed directly to the plant workers shortly before they voted in favor of their union.

Republicans Sure Love to Hate Unions (NYT)

Thomas Edsall points out that while Republicans demonize unions, and public sector unions in particular, the Democrats aren't doing much of anything to push back on labor's behalf.

When Mega Corporations Get Mega Tax Breaks, We All Pay (The Nation)

Katrina vanden Heuvel, a member of the Roosevelt Institute's board of directors, says that closing corporate income tax loopholes could fund incredible projects, like national universal pre-K.

Here's Why Conservatives Will Never Give Up Their War on Obamacare (TNR)

The "partisan incomprehension" that follows the Affordable Care Act around in the news is primarily based in the fact that Republicans lost a highly partisan fight, writes Brian Beutler.

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Dirty Deals: How Wall Street's Predatory Deals Hurt Taxpayers and What We Can Do About It

Nov 18, 2014

Download the report by Saqib Bhatti.

Download the report by Saqib Bhatti.

The financialization of the United States economy has distorted our social, economic, and political priorities. Cities and states across the country are forced to cut essential community services because they are trapped in predatory municipal finance deals that cost them millions of dollars every year. Wall Street and other big corporations engaged in a systematic effort to suppress taxes, making it difficult for cities and states to advance progressive revenue solutions to properly fund public services. Banks take advantage of this crisis that they helped create by targeting state and local governments with predatory municipal finance deals, just like they targeted cash-strapped homeowners with predatory mortgages during the housing boom. Predatory financing deals prey upon the weaknesses of borrowers, are characterized by high costs and high risks, are typically overly complex, and are often designed to fail.

Predatory municipal finance has a real human cost. Every dollar that cities and states send to Wall Street does not go towards essential community services. Across the country, cuts to public services and other austerity measures have a disparate impact on the working class communities of color that were also targeted for predatory mortgages and payday loans, further exacerbating their suffering.

The primary goal of government is to provide residents with the services they need, not to provide bankers with the profits they seek. We need to renegotiate our communities’ relationship with Wall Street. We can do this by implementing common sense reforms to safeguard our public dollars, make our public finance system more efficient, and ensure that our money is used to provide fully-funded services to our communities. Taxpayers do trillions of dollars of business with Wall Street every year. It is time we start making our money work for us.

Key Recommendations
  • Transparency: Officials should disclose all payments for financial services and conduct an independent investigation of all financial deals to identify predatory features.
  • Accountability: Cities and states should take all steps to recover taxpayer dollars when bank deal unfairly with them, including taking legal action, renegotiating bad deals, and refusing future business.
  • Reducing Fees: Officials should identify financial fees that bear no reasonable relationship to the costs of providing the service and use their leverage as customers to negotiate better deals.
  • Collective Bargaining with Wall Street: Cities and states should agree to a common set of guidelines for an efficient municipal finance system and refuse business with any bank that does not abide by them, creating a new industry standard.
  • Creating Public Options for Financial Services: Cities and states should determine which services they could do themselves more cheaply if they hired the right staff, and make a plan to insource those functions.
  • Establishing Public Banks: Cities and states should establish public banks that are owned by taxpayers, can deliver a range of services, including municipal finance, and provide capital for local investment.

Read: "Dirty Deals: How Wall Street’s Predatory Deals Hurt Taxpayers and What We Can Do About It," by Saqib Bhatti.

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