Daily Digest - April 23: Repealing Health Care Reform Gets Harder Every Day

Apr 23, 2014Rachel Goldfarb

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Ted Cruz's Worst Nightmare Is Coming True (Politico)

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Ted Cruz's Worst Nightmare Is Coming True (Politico)

As Americans get used to having access to affordable health care, repeal will become less and less likely, writes Roosevelt Institute Senior Fellow Richard Kirsch. That's just as Senator Cruz predicted last summer.

AT&T Tries to Bully the Government (Bloomberg View)

Roosevelt Institute Fellow Susan Crawford says the Federal Communications Commission should stand strong and limit how many spectrum licenses any one wireless carrier can buy at its upcoming auction.

Elizabeth Warren is the Teacher (Esquire)

Charles P. Pierce profiles Senator Warren's work in academia and politics, framing her as an eternal educator. Today, she continues to educate on critical issues like financial reform - but also makes that reform happen.

Elizabeth Warren’s Needed Call for Student Loan Reform (WaPo)

With graduation season upon us, Katrina vanden Heuvel, a member of the Roosevelt Institute's Board of Directors, praises Senator Warren's work on student debt, which she says is holding back the economy.

The American Middle Class Is No Longer the World’s Richest (NYT)

Data shows that middle-income people around the world have experienced greater gains over the past three decades than Americans, write David Leonhardt and Kevin Quealy. They tie this to rising income inequality.

Waiter, Am I Subsidizing Your Pay? (Other Words)

Marjorie Elizabeth Wood argues that taxpayers are heavily subsidizing the restaurant industry, which takes advantage of tax loopholes for high CEO pay and doesn't pay its workers a living wage.

  • Roosevelt Take: Roosevelt Institute Fellow and Director of Research Susan Holmberg and Roosevelt Institute | Campus Network alumna Lydia Austin discuss the performance pay loophole in their white paper.

The Revolt of the Cities (TAP)

Harold Meyerson looks at the new wave of progressive mayors and city councils, elected primarily with labor community coalitions. He says this new city leadership is reshaping American liberalism.

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JW Mason on Disgorge the Cash

Apr 21, 2014Mike Konczal

 

I'm happy to have been part of the editing team on this piece by JW Mason for The New Inquiry's money and finance issue, Disgorge the Cash. It summarizes some of the issues he's been developing at his blog slackwire on the relationship between the financial sector and the real economy. As both an economic matter, with the relationship between corporate borrowing, investments and dividends before and after the early 1980s, as well as a socio-cultural matter of managers and their relationships to the firms they manage, it's fascinating stuff. It also points to a question, one Piketty doesn't touch in his new Capital book, of whether supermanagers who are creating the runaway 1% labor incomes gain should really be thought of more as part of capital income.

Much of the rest of the finance and money issue is now online, though you should still subscribe.

From the piece:

In 1960, there was a strong link between borrowing and investment. A firm that was borrowing $1 million more than a typical firm of that size would usually be investing $750,000 more. [...] Before 1980, there was no statistical relationship between borrowing and payouts in the form of dividends and share repurchases at the firm level. But since then, a clear positive relationship emerged, especially at business-cycle peaks. Firms that borrow more have significantly higher payouts to shareholders. [...] It was a common trope in accounts of the housing bubble that greedy or shortsighted homeowners were extracting equity from their houses with second mortgages or cash-out refinancing to pay for extra consumption. What nobody mentioned was that the rentier class had been playing a similar game longer and on a much larger scale.

[...]

At the moment, finance seems to be doing its job well. The idea that corporations will spontaneously socialize themselves looks utopian and naïve. The evolution described by Keynes, Berle and Means, Galbraith, and other theorists of managerialism early in the 20th century had been halted or reversed by its end.
 
But that doesn’t mean it wasn’t real. Just look at the scale of the financial apparatus required to keep productive enterprises focused on profit maximization, and the fear capitalists have of allowing managers discretion over corporate resources, even when their incentives have been arduously “aligned.” Isn’t it testimony to how tenuous and unnatural production for profit is? In these far from revolutionary times, radicals often fret about the difficulty of transforming the existing organization of production into socialism. But this project is nothing compared with the Sisyphean task faced by the other side, of constantly transforming the existing organization of production into capitalism.

 

I'm happy to have been part of the editing team on this piece by JW Mason for The New Inquiry's money and finance issue, Disgorge the Cash. It summarizes some of the issues he's been developing at his blog slackwire on the relationship between the financial sector and the real economy. As both an economic matter, with the relationship between corporate borrowing, investments and dividends before and after the early 1980s, as well as a socio-cultural matter of managers and their relationships to the firms they manage, it's fascinating stuff. It also points to a question, one Piketty doesn't touch in his new Capital book, of whether supermanagers who are creating the runaway 1% labor incomes gain should really be thought of more as part of capital income.

Much of the rest of the finance and money issue is now online, though you should still subscribe.

From the piece:

In 1960, there was a strong link between borrowing and investment. A firm that was borrowing $1 million more than a typical firm of that size would usually be investing $750,000 more. [...] Before 1980, there was no statistical relationship between borrowing and payouts in the form of dividends and share repurchases at the firm level. But since then, a clear positive relationship emerged, especially at business-cycle peaks. Firms that borrow more have significantly higher payouts to shareholders. [...] It was a common trope in accounts of the housing bubble that greedy or shortsighted homeowners were extracting equity from their houses with second mortgages or cash-out refinancing to pay for extra consumption. What nobody mentioned was that the rentier class had been playing a similar game longer and on a much larger scale.

[...]

At the moment, finance seems to be doing its job well. The idea that corporations will spontaneously socialize themselves looks utopian and naïve. The evolution described by Keynes, Berle and Means, Galbraith, and other theorists of managerialism early in the 20th century had been halted or reversed by its end.
 
But that doesn’t mean it wasn’t real. Just look at the scale of the financial apparatus required to keep productive enterprises focused on profit maximization, and the fear capitalists have of allowing managers discretion over corporate resources, even when their incentives have been arduously “aligned.” Isn’t it testimony to how tenuous and unnatural production for profit is? In these far from revolutionary times, radicals often fret about the difficulty of transforming the existing organization of production into socialism. But this project is nothing compared with the Sisyphean task faced by the other side, of constantly transforming the existing organization of production into capitalism.

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Daily Digest - April 11: Do Universities Make the Grade on Local Impact?

Apr 11, 2014Rachel Goldfarb

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What's the Deal: How Can We Grade Universities On Their Local Economic Impact? (YouTube)

Roosevelt Institute Associate Director of Networked Initiatives Alan Smith and NYU student Eugenia Kim explain the Campus Network's Rethinking Communities Initiative and how universities can promote local development.

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What's the Deal: How Can We Grade Universities On Their Local Economic Impact? (YouTube)

Roosevelt Institute Associate Director of Networked Initiatives Alan Smith and NYU student Eugenia Kim explain the Campus Network's Rethinking Communities Initiative and how universities can promote local development.

Don't Be Fooled: The Fed's New Rule Lets Banks Off Easy (TNR)

Roosevelt Institute Fellow Mike Konczal says that increased leverage ratio requirements aren't the end-all solution to Too Big To Fail, even though they are a strong regulatory tool.

Does Christianity Really Prefer Charity to Government Welfare? (The Week)

Elizabeth Stoker agrees with Mike Konczal: the social safety net allows private charities to function better. She also argues for the safety net from a Christian perspective.

  • Roosevelt Take: Stoker's piece responds to Mike's recent essay on "the voluntarism fantasy" in Democracy Journal.

Missing Ingredient on Minimum Wage: A Motivated G.O.P. (NYT)

The last three minimum wage increases have involved a president working with a congressional leader from the other party. John Harwood says President Obama seems unlikely to find such a partner.

Yes, Being a Woman Makes You Poorer (TAP)

Monica Potts lays out the complexities of the wage gap, and emphasizes that blaming the gap on women's choices ignores the realities of those choices. Wage gap deniers seem to suggest that gender discrimination doesn't exist.

The Safety Net Catches the Middle Class More Than the Poor (WaPo)

Safety net spending has increased since the 1990s, but not for those in deep poverty, writes Catherine Rampell. Paul Ryan's budget proposal takes the idea of supporting the "deserving" over the most needy even further.

MAP: In 31 States, Daycare Is More Expensive Than College (MoJo)

Erika Eichelberger looks at a comparison of the cost of in-state college tuition and infant daycare from Child Care Aware America. The growing cost of childcare may help explain a recent increase in stay-at-home mothers.

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Money Issue of The New Inquiry is Out

Apr 8, 2014Mike Konczal

I helped edit (curate might be a better word) the latest New Inquiry issue on Money and Finance. Their editor Robert Horning wanted to get some of the vibe of the older financial blogs, when the thing was still a wild west, and so we got a ton of our favorite old-school finance writers like Steve Waldman, Izzy Kaminska, and the Epicurean Dealmaker to contribute. I also helped edit a good explainer of MMT from Rebecca Rojer, and a definitive "disgorge the cash" piece on the rentier takeover of the economy by JW Mason, both which are definitely worth your time. I have my own piece in the article, now also online, about buying the future.

These pieces will eventually be rolled out and available online over the next month, but for now you can read it by subscribing. Hope you check it out!

I helped edit (curate might be a better word) the latest New Inquiry issue on Money and Finance. Their editor Robert Horning wanted to get some of the vibe of the older financial blogs, when the thing was still a wild west, and so we got a ton of our favorite old-school finance writers like Steve Waldman, Izzy Kaminska, and the Epicurean Dealmaker to contribute. I also helped edit a good explainer of MMT from Rebecca Rojer, and a definitive "disgorge the cash" piece on the rentier takeover of the economy by JW Mason, both which are definitely worth your time. I have my own piece in the article, now also online, about buying the future.

These pieces will eventually be rolled out and available online over the next month, but for now you can read it by subscribing. Hope you check it out!

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Daily Digest - March 19: What Colleges Can Give Back

Mar 19, 2014Rachel Goldfarb

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Op-Ed: GW Can Fight D.C.’s Income Divide with Endowment (The GW Hatchet)

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Op-Ed: GW Can Fight D.C.’s Income Divide with Endowment (The GW Hatchet)

David Meni and Zach Komes, leaders of the Roosevelt Institute | Campus Network's George Washington University chapter, suggest their school should invest in financial institutions focused on community development.

  • Roosevelt Take: Roosevelt Institute Associate Director of Networked Initiatives Alan Smith explains Rethinking Communities, a Campus Network project examining how colleges and universities can have do more to help local economies.

Economic Reform Is a Human Right (The Nation)

Radhika Balakrishnan and James Heintz argue that a human rights framework can lead to better social and economic policy; for example, bailing out the banks but not homeowners could be considered a human rights violation.

Conservatives Defend Inequality out of Self-Interest — Nothing More (The Week)

Class interest keeps the wealthy from admitting that inequality harms economic growth, writes Sean McElwee, but they don't necessarily have bad intentions. He instead calls on them to do some self-examination.

The House GOP's Obamacare Alternative Won't Curb Health Care Costs—But It Will Enrich the Insurance Industry (MoJo)

The Republican plan includes restrictions on medical-malpractice lawsuits. Stephanie Mencimer cites a recent Florida Supreme Court decision, which declared that such restrictions only serve to increase profit for the insurers.

Costly Loans Are Drawing Attention From States (NYT)

Jessica Silver-Greenberg and Rachel Abrams report on the ways that short-term loan providers are working to get around existing regulations, and how states are starting to crack down.

The Polar Vortex Kept Shoppers at Home—Will the Economy Pick Up Now? (The Atlantic)

Matthew O'Brien looks at a study on car sales in January, which shows weaker growth in the states with the worst winters. But sales are everything: he says we'll know the economy is really picking up when people take on more debt.

Fast-Food Workers Get New Ally in New York City Fight for Fair Pay (The Guardian)

New York City's public advocate, Tish James, is stepping up to help in the wake of wage theft lawsuits against McDonald's, reports Jon Swaine. She's proposing legislation to create a whistleblower hotline to fight these practices.

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Daily Digest - March 10: Main Street Pays Rent to Wall Street

Mar 10, 2014Rachel Goldfarb

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Could a Wall Street Firm be Your Landlord? (Melissa Harris-Perry)

Roosevelt Institute Fellow Dorian Warren points out the possibility that new rental-backed securities from Wall Street could pose a civil rights problem if they capitalize on communities of color.

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Could a Wall Street Firm be Your Landlord? (Melissa Harris-Perry)

Roosevelt Institute Fellow Dorian Warren points out the possibility that new rental-backed securities from Wall Street could pose a civil rights problem if they capitalize on communities of color.

US Postal Service Inspector General Proposes Launching Low-Fee Public Bank (Real News Network)

Postal banking would aim to help low-income Americans who are currently unbanked, says Roosevelt Institute Fellow Mike Konczal, without the predatory fees they would face at traditional banks.

The Real Story Behind the Detroit Pension Fight and What it Means to America's Future (Alternet)

Lynn Stuart Parramore speaks to Roosevelt Institute Senior Fellow Rob Johnson about the so-called pensions crisis. The key takeaway: cutting pensions is a choice, one that will cause harm for generations.

More on CBO and the Limits of Economic Analysis (On The Economy)

Jared Bernstein responds to a critique from Roosevelt Institute Senior Fellow Jeff Madrick, arguing that what needs to change isn't the Congressional Budget Office's analyses, but our lack of skepticism.

Unemployment in February Remains Elevated Across the Board (Working Economics)

Heidi Shierholz compares February's jobs report to pre-recession numbers, and argues that the sustained high unemployment across the board is proof that the jobs crisis comes from a lack of demand.

Why Americans Should Take August Off (The Nation)

Vacationing isn't a sign of laziness, writes Bryce Covert; it boosts spending and productivity, both of which would be great for the U.S. economy.

New on Next New Deal

What Les Misérables Can Teach Us About Paul Ryan's Poverty Plan

"Honest work, just reward" is a central conceit in GOP anti-poverty plans, but Nell Abernathy, Program Manager for the Roosevelt Institute's Bernard L. Schwartz Rediscovering Government Initiative, says this ignores the realities of low-income work.

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Daily Digest - February 21: When Wall Street Worries Too Much

Feb 21, 2014Rachel Goldfarb

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An Aggressive Fed Finds Critics on Wall Street (NYT)

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An Aggressive Fed Finds Critics on Wall Street (NYT)

Some bankers blame easy money for the boom-and-bust cycle, writes Peter Eavis, but Fed supporters like Roosevelt Institute Fellow Mike Konczal argue the critics have unrealistic expectations about the economy.

You Still Need to Care About Sky-High Wall Street CEO Pay (U.S. News & World Report)

Pat Garofalo says that while high CEO pay is a problem across the board, it's especially worrisome on Wall Street, where a CEO's decisions can affect the entire economy.

South Carolina Governor Says Ford, GM, Chrysler Union Jobs not Welcome in State (Detroit Free Press)

Governor Nikki Haley is happier to have unionized companies, including many Detroit-based auto manufacturers, keep their jobs far, far away from her right-to-work state, reports Rudolph Bell.

Why Gap’s Wage Hike Matters (MSNBC)

Ned Resnikoff argues that with House Republicans unlikely to allow a vote on a minimum wage increase, it's worth cheering for companies that do it themselves.

Obama to Drop Entitlement Cuts from 2015 Budget (POLITICO)

Reid J. Epstein reports that the president is done floating compromises for the GOP in his budget. Chained CPI, an inflation metric that would reduce benefit increases for Social Security, is gone.

New on Next New Deal

In Campus Network’s Summer Academy, Students Learn What Good Work Really Looks Like

Roosevelt Institute | Campus Network's Jeff Raines and Joe Swanson consider the effect that the Summer Academy Fellowship has had on their college experiences and career goals.

  • Note: Current students can still apply for the Campus Network's Summer Academy. For more information, click here.

We Need More Nuance from the CBO

Presenting a single number instead of a range of economic opinions is irresponsible of the Congressional Budget Office, writes Jeff Madrick, Roosevelt Institute Senior Fellow and Director of the Bernard L. Schwartz Rediscovering Government Initiative.

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Daily Digest - February 13: Public Finance Can Help Weather the Storm

Feb 13, 2014Rachel Goldfarb

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Preparing for Disaster by Betting Against It (NYT)

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Preparing for Disaster by Betting Against It (NYT)

The Metropolitan Transit Association's catastrophe bond, a type of insurance to cover the costs of future storms like Hurricane Sandy, could be a model for disaster prep, says Roosevelt Institute Fellow Georgia Levenson Keohane.

A Comcast-Time Warner Cable Deal Would Combine Two of America’s Most-Reviled Companies (Quartz)

Adam Pasick reports on the newly-announced merger plan. He quotes Roosevelt Institute Fellow Susan Crawford, who predicts that the only way this will affect customers is through higher prices.

GOP Succumbs to Rare Outbreak of Sanity (The New Yorker)

John Cassidy says the moment passed after the House voted to raise the debt ceiling. Ted Cruz's reaction proved that nothing had changed, even as the debt ceiling increase passed the Senate.

I Can’t Find Enough Skilled Workers! (At the Crappy Wage I’m Offering…) (On The Economy)

When employers complain about a lack of skilled workers, Jared Bernstein says they're forgetting the second half of that equation. Case in point: regional airline pilots, who sometimes barely break minimum wage.

After Outcry, White House Extends $10.10 Minimum Wage to Some Disabled Workers (In These Times)

Mike Elk reports on the change, which follows public objections to keeping disabled workers' wages lower than the minimum. Disabled service and concessions workers will now get minimum wage, not less.

Up in Arms Over Union ‘Persuader’ Rule (The Hill)

Kevin Bogardus and Ben Goad report on the proposed regulation, which would require companies to disclose when they bring in legal consultants on union election strategy.

America Has Forgotten Its Three Biggest Economic Lessons (Salon)

According to Robert Reich, those lessons are that consumers create jobs, the rich do better with a smaller share of a growing economy, and taxes pay for public investment that helps everyone.

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Mike Konczal on What's Next for Financial Reform

Feb 6, 2014

In a new episode of the Roosevelt Institute's video explainer series, "What's the Deal," Roosevelt Institute Fellow Mike Konczal talks about what the Dodd-Fran

In a new episode of the Roosevelt Institute's video explainer series, "What's the Deal," Roosevelt Institute Fellow Mike Konczal talks about what the Dodd-Frank financial reform law accomplished, what still needs to be done to change the system, and why there are reasons for reformers to be optimistic.

For more, check out An Unfinished Mission: Making Wall Street Work for Us, a report co-edited by Konczal.

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Daily Digest - February 3: Financial Reform Enters a New Era

Feb 2, 2014Rachel Goldfarb

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What's the Deal: What's Next for Financial Reform (YouTube)

Roosevelt Institute Fellow Mike Konczal talks about what the Dodd-Frank financial reform law accomplished, what still needs to be done to change the system, and why there are reasons for reformers to be optimistic about the future.

Click here to receive the Daily Digest via email.

What's the Deal: What's Next for Financial Reform (YouTube)

Roosevelt Institute Fellow Mike Konczal talks about what the Dodd-Frank financial reform law accomplished, what still needs to be done to change the system, and why there are reasons for reformers to be optimistic about the future.

  • Roosevelt Take: Read "An Unfinished Mission," the report from the Roosevelt Institute and Americans for Financial Reform that Mike discusses in this video, here.

New Fed Chief Janet Yellen Lets a Long Career of Breaking Barriers Speak for Itself (WaPo)

Ylan Q. Mui profiles Janet Yellen's career with a focus on gender, as Yellen has been a prominent face for women in economics over the years. She notes that Yellen has rarely spoken on gender issues, and has asked her staff to use the title "chair" rather than "chairwoman."

Oh, Sweet Mercy, Are We About To Have Another Debt Ceiling Fight? (HuffPo)

Jason Linkins examines why another debt ceiling fight seems likely, even though the GOP has already lost bargaining power by giving in on the last two. He sees the Republicans' insistence on turning everything into a fight against Obamacare as a losing strategy.

Domino’s Delivery Workers Settle Suit for $1.3 Million (NYT)

Steven Greenhouse reports on the settlement between 61 deliverymen and a Manhattan Domino's franchise. The workers filed the suit based on minimum wage and overtime violations after many were forced to list far fewer hours on time sheets than they actually worked.

Walmart’s Holiday Profits are Way Down. Food Stamp Cuts are a Big Part of the Reason. (Washington Monthly)

Kathleen Geier says the most interesting part of this story is the explicit tie Walmart has made between food stamp cuts and low sales. She sees this as part of the cycle of austerity politics, which fail to recognize how government cuts can slow the overall economy.

Jerry Brown's Austerity Kick Unpopular with Advocates for Poor (LA Times)

Anthony York writes that Californians disagree on how to use their multibillion-dollar budget surplus. In his State of the State address, Governor Brown pushed for a rainy-day fund, but others are discussing popular social safety net proposals like universal pre-K and paid sick leave.

The Problem with Retirement Savings: Making Enough Money to Save (The Guardian)

Suzanne McGee praises President Obama's MyRA plan as a "tiny positive step," but points out that it won't do anything to solve the real problem. As wages have flatlined, increased options for saving won't help workers who need every dollar for bills today.

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