Daily Digest - April 17: How Democracy Became a Luxury Good

Apr 17, 2014Rachel Goldfarb

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Government by the Few (All In with Chris Hayes)

Roosevelt Institute Fellow Dorian Warren notes that we now have social science data that proves Occupy was right: our democracy is dominated by the wealthiest Americans.

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Government by the Few (All In with Chris Hayes)

Roosevelt Institute Fellow Dorian Warren notes that we now have social science data that proves Occupy was right: our democracy is dominated by the wealthiest Americans.

Happy Tax Day (The New Yorker)

Benjamin Soskis examines America's esteem for charitable donors over taxpayers, drawing on Roosevelt Institute Fellow Mike Konczal's piece on the "voluntarism fantasy."

Millennial Perspective: Title X is Vital, Efficient, and Largely Unknown (National Priorities Project)

Tarsi Dunlop argues that Millennials should advocate for Title X, the nation's only federally funded family planning program, because of its massive impact on the lives of low-income women.

  • Roosevelt Take: Tarsi uses data from Roosevelt Institute Fellow Andrea Flynn's white paper, "The Title X Factor: Why the Health of America's Women Depends on More Funding for Family Planning."

Bill de Blasio’s Great Experiment (The Nation)

Jarrett Murphy looks at the New York City mayor's first 100 days, and finds that de Blasio is sticking to the progressive policies he proposed on the campaign. Unfortunately, the forces against him are strong.

Obama's Job-Training Unicorn: It's Time for Some New Ideas Already (The Guardian)

Pushing the same kind of job training programs isn't making any dent in the unemployment crisis, says Heidi Moore. She wants Congress to try something new, whether that's infrastructure fixes or direct hiring.

  • Roosevelt Take: A Roosevelt Institute report released last week, "A Bold Approach to the Jobs Emergency: 15 Ways We Can Create Good Jobs in America Today," provides more suggestions for government solutions.

New York Lawmakers Push to Raise Wages at Biggest Chains (NYT)

Kate Taylor reports that a group of New York City-based Democrats has proposed a bill to mandate a $15-an-hour minimum wage for employees of businesses with $50 million or more in annual sales.

The Toughest Cop on Wall Street You've Never Heard Of (TNR)

Benjamin Lawsky at the New York Department of Financial Services is pushing stricter penalties on banks, and David Dayen says that could push federal regulators to toughen up.

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Daily Digest - April 4: McCutcheon Makes Money Speak Louder

Apr 4, 2014Rachel Goldfarb

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Big Money in Politics (ABC World News)

Roosevelt Institute Senior Fellow Jonathan Soros speaks with Brian Ross about political spending in the post-McCutcheon era, with no limits on aggregate campaign contributions.

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Big Money in Politics (ABC World News)

Roosevelt Institute Senior Fellow Jonathan Soros speaks with Brian Ross about political spending in the post-McCutcheon era, with no limits on aggregate campaign contributions.

Supreme Court Decision Opens Floodgates for More Campaign Cash (Real News Network)

Roosevelt Institute Senior Fellow Tom Ferguson discusses how the McCutcheon decision will affect American democracy. He says that without public campaign financing, just a few people get to control the system.

Fast Food Workers Will Protest Again Today. Here's What They're Up Against. (MoJo)

When fast food workers rally for a $15-an-hour wage, they're facing a well-funded and well-coordinated restaurant industry. Erika Eichelberger runs through the numbers from a new report on the restaurant lobby.

Emails Show Sen. Corker’s Chief of Staff Coordinated with Network of Anti-UAW Union Busters (In These Times)

Mike Elk reports on leaked documents showing that members of Tennessee Senator Bob Corker and Governor Bill Haslam's staffs worked directly with anti-union groups during the union drive at the Chattanooga Volkswagen plant.

Ryan Budget Gets 69 Percent of Its Cuts from Low-Income Programs (Off the Charts)

With $3.3 trillion of the budget's $4.8 trillion in non-defense spending cuts coming from programs that support low-income Americans, Richard Kogan questions the rhetoric of the Ryan budget helping the poor.

New on Next New Deal

In the Wake of McCutcheon, Can Democracy Tame Capital?

Roosevelt Institute Senior Fellow Richard Kirsch ties the McCutcheon v. FEC decision to Thomas Piketty's new book, Capital in the 21st Century, as the Supreme Court has just increased the power of wealth in this country.

Farewell, Campaign Finance Restrictions, and Hello, Mega-Donors

Jeff Raines, Chair of the Student Board of Advisors for the Roosevelt Institute | Campus Network, looks at the McCutcheon decision and the state of campaign finance law and considers what's to come in the 2014 elections.

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Daily Digest - April 3: Once Upon a Time There Was No Safety Net

Apr 3, 2014Rachel Goldfarb

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Faith in Values: The Conservative Fairy Tale About Government (CAP)

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Faith in Values: The Conservative Fairy Tale About Government (CAP)

Sally Steenland draws on Roosevelt Institute Fellow Mike Konczal's argument against "the voluntarism fantasy" to argue for the strength of the progressive narrative, in which government and private entities work together to help society.

  • Roosevelt Take: Mike debunked the idea that private charity could take the place of government in fighting poverty in Democracy Journal.

The Supreme Court’s Ideology: More Money, Less Voting (The Nation)

Connecting the dots between yesterday's decision in McCutcheon v. FEC and other recent decisions on voting and campaign finance, Ari Berman says that the same groups are favoring secret money and voting restriction.

  • Roosevelt Take: Jeff Raines, Chair of the Student Board of Advisors for Roosevelt Institute | Campus Network, argued in October that McCutcheon was really about how much influence we allow the wealthiest Americans to have over our elected officials.

Will Disclosure Save Us From the Corrupting Influence of Big Money? (TAP)

Paul Waldman raises the question of whether campaign finance disclosure is enough to limit political corruption, because he thinks the courts could one day use disclosure as justification to eliminate all contribution limits.

Are The Views Of America's Wealthiest Undermining Democracy? (Forbes)

A new study on the opinions of the top 0.1 percent of Americans shows that they hold substantially different political views, and their high rate of campaign contributions may mean those views get more attention from policymakers.

A Union Aims at Pittsburgh’s Biggest Employer (NYT)

Steven Greenhouse reports on the Service Employees International Union's efforts to unionize the University of Pittsburgh Medical Center, where workers say great benefits don't matter when they can't afford the health insurance.

New on Next New Deal

Labor Law that That Would Support Organizing in Today’s Economy

In the fifth piece in his series on his new report on labor reform, Roosevelt Institute Senior Fellow Richard Kirsch begins to lay out some of the possible ways to strengthen labor laws.

Taking on Big Business Wage Theft

Harmony Goldberg, the Program Manager for the Roosevelt Institute's Future of Work Initiative, argues that government needs to strengthen enforcement and change laws so that workers aren't forced to sue in order to get their fair wages.

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Daily Digest - March 28: How to Be a Better Anchor

Mar 28, 2014Rachel Goldfarb

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Click here to receive the Daily Digest via email.

New Student Initiative Asks Anchor Institutions to Rethink Their Communities (Community-Wealth.org)

The Democracy Collaborative interviews Alan Smith, Roosevelt Institute's Associate Director of Networked Initiatives, to discuss the Campus Network’s Rethinking Communities initiative, which uses the Collaborative’s Anchor Dashboard to examine how institutions like colleges affect local economies.

  • Roosevelt Take: Alan explains the ideas behind the Rethinking Communities initiative, and why this project makes sense for Millennials.

The PAC to End All PACs (Politico Magazine)

David Freedlander speaks with Roosevelt Institute Senior Fellow Jonathan Soros about his work on campaign finance reform. Soros says his aim is to help ensure lack of money doesn't shut candidates out.

Domino's Franchisees Settle Wage Theft Investigation In New York For $448,000 (HuffPo)

Dave Jamieson reports on the second major wage theft settlement in as many weeks out of New York Attorney General Eric Schneiderman’s office.

A Nation of Takers? (NYT)

Nicholas Kristof writes that there are, in fact, public welfare programs that are wasteful: subsidies for private planes and yachts, subsidies to hedge funds in the form of "carried interest," and the like.

New on Next New Deal

In Seattle, Calls for a Higher Minimum Wage are Calls for Democracy

In her remarks to the Seattle Income Inequality Symposium, Roosevelt Institute President and CEO Felicia Wong says that we should raise the minimum wage for the same reasons that President Roosevelt first implemented it.

Insurance Pays for Health Care. Who’s Providing It?

Following a congressional briefing last week, Roosevelt Institute Communications Associate Rachel Goldfarb emphasizes the distinction between insurance and care providers as a key reason to keep publicly funded family planning.

  • Roosevelt Take: Read Roosevelt Institute Fellow Andrea Flynn's remarks from the briefing here.

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Daily Digest - March 24: Public Financing: Compromise Won't Fix Corruption

Mar 24, 2014Rachel Goldfarb

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A Promise Cuomo Can Keep (Albany Times Union)

Roosevelt Institute Senior Fellow Jonathan Soros and Frederick A.O. Schwartz call on New York's Governor Cuomo to avoid compromise on public campaign financing where concessions just extend a corrupt status quo.

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A Promise Cuomo Can Keep (Albany Times Union)

Roosevelt Institute Senior Fellow Jonathan Soros and Frederick A.O. Schwartz call on New York's Governor Cuomo to avoid compromise on public campaign financing where concessions just extend a corrupt status quo.

The Tea Party and Wall Street Might Not Be Best Friends Forever, But They Are for Now (TNR)

Tea Party Republicans in Congress insist that the financial crisis was all government's fault, says Roosevelt Institute Fellow Mike Konczal. That narrative, and the corresponding legislative agenda, couldn't make Wall Street happier.

Why Charity Can’t Replace the Safety Net (Slate)

Jordan Weissmann praises Mike Konczal's recent piece in Democracy Journal, emphasizing that charity can't replace government aid during recessions. Charitable donations drop just when need rises.

All Economics Is Local (NYT)

Raising the local minimum wage is an effective step towards reducing inequality, say Michael Reich and Ken Jacobs. Moreover, their research shows that low-income industries can absorb the increase and benefit from greater employee retention. 

Payday Lending: The Loans with 350% Interest and a Grip on America (The Guardian)

David Dayen explains the vast regulatory conundrum of these predatory loans. He lays out how state and national regulators, Congress, and the Justice Department are working side-by-side, but often a step behind lenders.

The End of Jobs? (In These Times)

Sarah Jaffe argues that under our current system, the shrinking of secure full-time work increases inequality. Instead, we could restructure our economy to push for a universal basic income and shorter working hours.

New on Next New Deal

Memo to Congress: Family Planning Needs More Funding

In her remarks at a Congressional briefing last week, Roosevelt Institute Fellow Andrea Flynn explains why publicly funded family planning needs to expand as the Affordable Care Act is implemented. 

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Daily Digest - March 12: Political Influence Carries a Price Tag

Mar 12, 2014Rachel Goldfarb

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Ready for a Surprise? Money DOES Equal Access in Washington (WaPo)

Matea Gold reports on a randomized field study that proves the long-held belief that campaign donations buy attention from legislators and their staff.

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Ready for a Surprise? Money DOES Equal Access in Washington (WaPo)

Matea Gold reports on a randomized field study that proves the long-held belief that campaign donations buy attention from legislators and their staff.

Obama Will Seek Broad Expansion of Overtime Pay (NYT)

Michael D. Shear and Steven Greenhouse report that the president plans to use his executive authority to alter who is eligible for overtime according to their job classification, as well as the salary threshold.

A Modern Day ‘Harvest of Shame’ (ProPublica)

The 1960 CBS documentary showed the plight of migrant farm workers. Michael Grabell says that today, blue collar temp laborers are facing many of the same terrible working conditions.

Nowhere Close: The Long March from Here to Full Employment (EPI)

Josh Bivens explains how low demand is keeping the U.S. economy away from full employment. He also has suggestions for how to boost demand, including increased public spending and net exports.

Plan for Mortgage Giants Takes Shape (WSJ)

Nick Timiraos reports on a bipartisan plan to replace Fannie Mae and Freddie Mac with a system of federally insured mortgage securities. The Senate Banking Committee's liberal Democrats hold the power to move this forward or stop it.

A Conservative Meme On School Lunches: Work For It, Kids! (TPM)

What's wrong with free school lunches? Sahil Kapur says that the opposition combines the idea that people are mooching off the government with the claim that liberals don't value the dignity of work.

New on Next New Deal

The Story of Atalissa Highlights America's Long-Term Care Problem

Sarah Galli responds to The New York Times’s story about the abuse of Iowan men with intellectual disabilities by considering the nation's lack of options for long-term care for adults with disabilities.

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Daily Digest - March 3: Will New York Fight for the People's Trust?

Mar 2, 2014Rachel Goldfarb

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The Future is Public Financing of Elections (Times Union)

Roosevelt Institute Board Chair Anna Eleanor Roosevelt, granddaughter of FDR and Eleanor, calls on New York Governor Andrew Cuomo to fight for public campaign financing in the state for the sake of trust in democracy.

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The Future is Public Financing of Elections (Times Union)

Roosevelt Institute Board Chair Anna Eleanor Roosevelt, granddaughter of FDR and Eleanor, calls on New York Governor Andrew Cuomo to fight for public campaign financing in the state for the sake of trust in democracy.

IBM Fires Small-Town Workers for Wall Street Numbers. That’s the Good Part (The Guardian)

Heidi Moore ties layoffs at IBM to the company's goal of $20 earnings per share by 2015. Layoffs cut costs, an easy way to get closer to this arbitrary target.

The Real Job Killers (Robert Reich)

We could create jobs by eliminating the minimum wage, safety regulations, and such – but that wouldn't create progress, which requires safe jobs that pay well, writes Robert Reich.

College, the Great Unleveler (NYT)

Reforms to federal student aid, increased state funding for public universities, and tighter regulation of for-profit schools are all needed to maintain the American Dream of upward mobility, writes Suzanne Mettler.

Amidst Camp Tax Plan Debate, D.C. Needs to Close the Reality Gap (WaPo)

The real problem in Washington, writes E.J. Dionne, is the gap between the real-life issues that American voters worry about and the abstractions, like the deficit, that get all of Congress's focus, as in Senator Camp's tax reform plan.

The Progressives' Image Problem (Washington Monthly)

When progressives take over, as in New York City Mayor Bill de Blasio's administration, their leadership experience is often criticized. Martin Longman says that's because managing activist groups is counted against them.

New on Next New Deal

Venezuela: The Crisis We Fuel With Our Apathy

Leslie Bull, former Roosevelt Institute | Campus Network Senior Fellow for Defense and Diplomacy, writes that when the American media ignores international crises, it only causes them to become more urgent.

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Daily Digest - February 26: Public Financing Means People Speak Louder Than PACs

Feb 26, 2014Rachel Goldfarb

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Making Every Voter Equal (Reuters)

Roosevelt Institute Senior Fellow Jonathan Soros says Super PACs should be made irrelevant, and public campaign financing that magnifies the small contributions of ordinary voters is the way to do it.

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Making Every Voter Equal (Reuters)

Roosevelt Institute Senior Fellow Jonathan Soros says Super PACs should be made irrelevant, and public campaign financing that magnifies the small contributions of ordinary voters is the way to do it.

For Our Youth, Good Jobs Are Green Jobs (HuffPo)

Rocky Kistner speaks to Roosevelt Institute | Campus Network member David Meni about young people's desire to approach environmental issues from an economic perspective.

U.S. Lags Behind World in Temp Worker Protections (ProPublica)

Michael Grabell writes that the U.S.'s labor laws offer shockingly little protection to temp workers, which may lead to dangerous assignments, lack of training, and wage theft.

Where Have All the Workers Gone? (New Yorker)

The faceless nature of companies like Amazon allows people to forget the nature of the work involved in delivering goods and services, says George Packer.

American Cowboys Fight for Better Wages, Working Conditions (Fortune)

Claire Zillman says the workers, whose lawsuit will be heard by the D.C. Circuit Court of Appeals next week, oppose Department of Labor rules that set a wage ceiling for livestock herders.

Dems Ramp Up Pressure on Minimum Wage (WaPo)

The House Democrats will begin circulating a discharge petition on raising the minimum wage, which would force a House vote despite GOP opposition, reports Greg Sargent.

Stamp of Disapproval (In These Times)

Theo Anderson writes that the American Postal Workers Union says selling local post offices won't solve the Postal Service's real financial problem: being forced to pre-fund 75 years of retiree benefits.

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The Political Underbelly of the Pensions Crisis: What Broke the System, and How Do We Fix It?

Feb 25, 2014Robert Johnson

Roosevelt Institute Senior Fellow Robert Johnson will join Roosevelt Institute Senior Fellow and Chief Economist Joseph Stiglitz, Roosevelt Institute Senior Fellow Thomas Ferguson, former Lieutenant Governor of New York Richard Ravitch, and others today in New York City to explore the underbelly of the public pensions crisis. The following is adapted from Johnson's forthcoming paper on this topic.

Roosevelt Institute Senior Fellow Robert Johnson will join Roosevelt Institute Senior Fellow and Chief Economist Joseph Stiglitz, Roosevelt Institute Senior Fellow Thomas Ferguson, former Lieutenant Governor of New York Richard Ravitch, and others today in New York City to explore the underbelly of the public pensions crisis. The following is adapted from Johnson's forthcoming paper on this topic.

Since the beginning of the Great Recession, policymakers and reporters have spoken of a growing crisis in public pensions. Many state and local governments are struggling to meet their obligations to retirees, and the easiest explanation is that government workers are overpaid and their pensions are unaffordable. But the evidence suggests that the pensions crisis is both less pervasive and more complex than that. Beyond the economic crisis, which put enormous pressure on state and municipal budgets, a range of factors including poor decision-making and the influence of big money interests has led to the underfunding of some state and city public pensions. With a clearer understanding of the problem, we can begin to take steps to solve it and keep our promises to public workers.

Contrary to public perception, pension underfunding is not a widespread issue. There is wide variation in pension performance across states, and underfunding is concentrated in particular states (for example, Illinois and Kentucky) and cities (Chicago and Providence). Where underfunding does occur, it seems to stem largely from the internal problems of those governments, which existed well before the recent economic crisis put additional pressure on their budgets.

There is also little basis for the conclusion that state and local employees are significantly overcompensated. On the contrary, pay is comparable at lower skill levels, and private-sector employees are significantly better paid at higher skill levels. According to Alicia Munnell, Director of the Center for Retirement Research, “Pension and retiree health benefits for state and local workers roughly offset the wage penalty, so that total compensation in the two sectors is roughly comparable.” There are surely examples of extreme individual pension obligations that warrant scrutiny, but they do not appear to contribute significantly to the total level of underfunding reported by analysts.  

The evidence suggests that pension underfunding is at times associated with choosing an unreasonably high discount rate. The discount rate is the expected rate of return on invested pension funds. A lower discount rate means governments must provision more now in order to meet future liabilities. Politicians tend to prefer a higher discount rate, which reflects a better “expected” yield on assets in the pension fund, since it allows them to justify provisioning less for pensions now. Unfortunately, a higher yield also means more investment risk. If the pension fund loses money, the pension liability does not go away; instead, taxpayers are forced to make up the difference or the government defaults on its obligations. This approach may help to mask the true cost of providing public services, but it is the public financial equivalent of the Hail Mary pass in football: you score a touchdown or you lose.

This may explain why governments are increasingly attracted to investment alternatives that have a record of substantial returns and are not closely correlated with the stock indices. Alternative asset investments (primarily hedge funds, venture capital funds, and private equity) averaged just below a combined 5 percent share of U.S. public pension funds’ portfolios between 1984 and 1994, but they averaged nearly a 20 percent share from 2008 to 2011. These more volatile assets may provide substantial benefit, but in times of stress, it is unclear if “reaching for yield” is a prudent strategy or simply reflects desperation. It also raises ethical concerns due to a lack of transparency and the potential for “pay to play” schemes, in which placement agents offer financial incentives, such as campaign contributions, to the people responsible for making decisions about pension fund allocations. This appears to be a system prone to abuse, and significant reforms must be enacted to realign the incentives of pension officials with the incentives of taxpayers and pensioners. This could include immunizing some pension investment boards with financial compensation, requiring disclosure of all outside income, and prohibiting individuals and firms that manage assets for a particular government from making campaign contributions to local representatives.

Even when there is no direct corruption, big money can have a powerful influence over pension funding decisions. It becomes very difficult for the political process to defend the common interest when ambitious politicians are under pressure from concentrated interests. Policymakers may be reluctant to adequately provision for pensions if doing so requires them to raise tax rates on high-income individuals, cut corporate subsidies, or otherwise drive away capital. Just look at the case of Detroit, where restructuring pension obligations is on the table at the same time the state is approving money to build a new hockey arena. This is not antiseptic technocracy at work; this is politics.

Relief could come from reforms in the political systems to lessen big money's influence and empower small donors. To accomplish this, states could establish systems of public campaign financing. Maine, Arizona, and Connecticut already have such systems, as does New York City, and New York State is on the cusp. Though the mechanics differ, all of these systems would change incentives to make candidates responsive to average people, not just big donors. As a result, policy is more likely to be oriented to the public interest.

The pensions crisis has far-reaching implications for the future of the U.S. economy: the state and local government sector is about 14 percent of the American workforce. Failure to uphold the promises we’ve made to current workers and retirees would create a brain drain in the public sector, drive down private-sector wages, exacerbate inequality, and lead to more economic volatility. The good news appears to be that there are a large number of pension plans that are solvent thanks to prudent management. The real problem rests with the governments of a few states that have historically failed to provision adequately for their pension obligations and are increasingly turning to riskier investment assets. These problems can be solved, but it will require substantial reform and swift and collective action.

Robert Johnson is a Senior Fellow at the Roosevelt Institute.

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Daily Digest - February 25: Big Money and the Pension Crisis

Feb 25, 2014Rachel Goldfarb

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The Political Underbelly of the Pensions Crisis: What Broke the System, and How Do We Fix It? (Next New Deal)

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The Political Underbelly of the Pensions Crisis: What Broke the System, and How Do We Fix It? (Next New Deal)

Roosevelt Institute Senior Fellow Rob Johnson explains how big money in politics can influence public pension funding decisions, and what must be done to ensure the system's future.

  • Roosevelt Event: Today, at 9am, join the Roosevelt Institute at the CUNY Graduate Center's Martin Segal Theatre for a conference marking the release of Senior Fellow Rob Johnson's new study on the role of big-money campaign financing in the pension crisis, from which his blog post is adapted.

Introducing the Comcast Tax (Bloomberg View)

Netflix is now paying for direct access to Comcast's network. Roosevelt Institute Fellow Susan Crawford says Comcast's new revenue stream will just mean higher costs passed on to consumers.

Panel Seeks Greater Disclosures on Pension Health (NYT)

Mary Williams Walsh reports that a blue-ribbon panel will recommend greater transparency around the cost of pension obligations to prevent the kind of disaster that's hit Detroit.

Citizens United Takes Another Swing at Campaign Finance Rules (MoJo)

The organization's new target is the IRS, thanks to proposed rules defining the political activities that cannot make up the majority of the work of non-profit 501(c)4 groups, reports Patrick Caldwell.

A Massive Outbreak Of Callousness (Forbes)

When economists push to improve the labor force participation rate, Frances Coppola asks for caution against hurting those who can't work. She'd prefer to just push job creation instead.

This Year’s Crazy Weather is Freezing the Economy (WaPo)

Zachary Goldfarb reports on estimates from Goldman Sachs on how the weather has slowed economic growth. Fortunately, winter is temporary: estimates show that by spring, growth will have bounced back.

Obama to Propose 1 Percent Pay Raise for Federal Workers (The Hill)

This is the second year in a row with such an increase, writes Erik Wasson, following a three-year pay freeze and lost income due to furloughs.

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