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'Economy' Archive

Weekly Audit: The Closing Bell

Posted May 3, 2011 @ 11:38 am by
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Creative Commons, Flickr, sushi inaBy Lindsay Beyerstein, Media Consortium blogger

This week marks the final edition of the Weekly Audit. It has been a pleasure compiling the best financial and economic writing in the Media Consortium. Thanks to all the contributors whose work we’ve showcased and to all the loyal readers who have shared in this experience.

Debt Ceiling 101

As the Weekly Audit wraps up, we’re looking ahead to some critical economic issues facing the country. Christen Simeral and Veronica Beebe of The American Prospect explain what the debt ceiling is and why the debate over raising it is shaping up to be the political battle of the year.

In short, the debt ceiling is the maximum amount the government can borrow. The debt ceiling is currently $14.294 trillion. At the current rate of spending, we’re due to hit the wall around May 16, if Congress doesn’t vote to raise it. Usually, raising the debt ceiling is a formality. Congress has voted to raise the debt ceiling 10 times in the last 10 years.

If the debt ceiling isn’t raised, the government can’t take on any new spending commitments. Worse still, the government may not have the cash it needs to pay tax refunds, Social Security payments, and other critical disbursements. Failing to raise the debt ceiling would hurt the U.S.’s credibility in global markets, making it more expensive for us to borrow money in the future.

The war on unions

All across the country, right wingers are trying to turn union workers into scapegoats for the nation’s economic woes.

Right wing media baron Andrew Breitbart tried to frame some labor history instructors at the university of Missouri by deceptively splicing together hours of classroom footage to make it look like the professors were advocating violence and sabotage, Dave Gilson of Mother Jones reports. The unedited video shows that the instructors are discussing the bloody history of the American labor movement, in which violence has overwhelmingly been perpetrated by management against workers.

NAFTA reprise

Multinational corporations are renewing their lobbying push for more NAFTA-like trade deals, Michelle Chen reports for Colorlines.com:

The construction giant Caterpillar is reportedly planning to treat its workers to steaming cups of Colombian coffee in the coming weeks, to warm them to the benefits of doing business with their “partners” in Latin America. While employees enjoy their break, lobbyists will be working hard, in their name, to peddle so-called “open markets” in Colombia, Panama and South Korea.

Chen reports that lobbyists for multinationals are besieging Congress to push for three new accords. The Panama deal is expected to be first on the agenda. Advocates for fair trade have been fighting these deals since the George W. Bush administration.

The push for deregulated international trade is on at the state level, too. The conservative American Legislative Exchange Council (ALEC) is handing out boilerplate resolutions to state representatives urging Congress to approve the trade deals. Chen notes that the Koch Foundation is among the major backers of ALEC.

High gas prices

Gas prices have long been seen as a bellweather of the electorate’s state of mind. When gas is cheap, incumbents rest a little easier. When gas prices rise, challengers start licking their chops. Daniel J. Weiss and Valeri Vasquez report in Campus Progress that rising gas prices are frustrating consumers and enriching speculators:

This year “it’s like déjà vu all over again.” Oil prices are rising to heights not seen since 2008. Oil rose from $85 per barrel to $112 per barrel in a little more than two months—a whopping one-third leap. Gasoline prices have followed along, rising by 70 cents per gallon—or 23 percent—during this same time. As our economy struggles to recover from the Great Recession, Americans are again forced to pinch pennies to afford their commute to work, school, and worship. Meanwhile, oil companies prepare to reap record profits in the first quarter of 2011.

The authors note this combination of rising pump prices and soaring corporate profits looks an awful lot like the oil shock of 2008, which helped push the economy into recession.

Archives from The Weekly Audit can be found here and will remain posted at this site. If you’d like see more top news and headlines from independent media outlets, please follow us on Twitter, or fan The Media Consortium on Facebook.

Weekly Audit: Hostage-Taking Over the Debt Ceiling

Posted Apr 26, 2011 @ 11:29 am by
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Creative Commons, Flickr, cszarBy Lindsay Beyerstein, Media Consortium blogger

The latest contrived showdown between Congressional Republicans and the White House is over what concessions the GOP will demand in order to increase the federal debt ceiling.

George Zornick of The Nation explains how the shakedown works:

Congress now needs to approve any borrowing past the $14.3 trillion debt ceiling, which the United States will reach “no later” than May 16, according to Treasury Secretary Timothy Geithner. If Congress doesn’t raise the debt ceiling, the government would have to stop spending—including stopping interest payments on those Treasury bonds, meaning that the United States would effectively default on its debt.

The debt ceiling has to be raised and everyone knows it. Surely the Republicans knew it when they voted for tax cuts for the rich with borrowed money. If the debt ceiling is not raised, the United States will default on some of its obligations. Just like what happens after you miss a credit card payment, the country’s creditors will demand higher interest in order to lend to us in the future.

Playing chicken with the debt ceiling is a recipe for increasing the national debt. Paul Waldman argues in The American Prospect that the Republicans hate government so much that they are willing to declare war on the economy in a quixotic bid to smash the state:

The reason we’re now seeing an unprecedented amount of attention paid to a vote that ordinarily passes with little notice is that the Republican Party’s agenda is being set by a group of ideological radicals who seem quite willing to cripple the American economy if that’s what it takes to strike a blow against the government they hate so much.

Peak Crazy

At AlterNet, Joshua Holland explains why failure to raise the debt ceiling would be an economic catastrophe that could jeopardize the economic recovery. “Peak Crazy,” he calls it.

However, Holland notes that a showdown over the debt ceiling does not risk an immediate government shutdown, like the one we faced over the budget battle. Borrowing isn’t the only way that government agencies are funded. The government could still spend the $150 billion or so it takes in every month in tax revenue, for example.

Yet, Senate Minority Leader Mitch McConnell (R-Kentucky) has announced that 47 GOP senators oppose raising the debt ceiling unless “credible attempts” are made to cut federal spending. Meanwhile the Tea Party is launching an all-out lobbying effort to urge House Republicans not to raise the debt ceiling without major spending cuts.

The Tea Party’s wish list includes some total pipe dreams like a balanced budget amendment to the constitution, and a law to require a two-thirds majority for all future tax increases. Former senator and current U.S. presidential hopeful Rick Santorum cheerfully announced that he would let the United States default on its debt if health care reform is not repealed. Rep. Michele Bachmann (R-Minn) helpfully suggests paying the interest on Treasury Bills using money that would otherwise go to Social Security.

Shoot the hostage

Cenk Uygur of the Young Turks argues that Democrats are panicking needlessly and, once again, offering needless preemptive concessions to the Republican fringe in the form of a proposed “hard cap” on government spending, which would cap new government spending, and subtract any overruns from social welfare programs like Medicare and Social Security.

The truth, Uygur notes, is that Wall Street has already told the Republicans in no uncertain terms that the debt ceiling will be raised. The economic consequences of doing anything else would be unthinkable. The Tea Party can yell and scream, but the adults have already made the decision. Knowing this, Democrats should not be trying to placate the Republicans so as to induce them to do something they will ultimately end up doing.

Digby on Social Security

Democrats are wavering in their decades-long commitment to defend Social Security, Heather Digby Parton (a.k.a., “Digby”) writes in In These Times:

In a quixotic attempt to fix the problems in the current economy without confronting the plutocrats, the Democrats are using the illogical argument that since Social Security is projected to have a shortfall in 35 years, we must cut benefits now. And they seek to prove to “the market” that the government is fiscally responsible by showing it’s willing to inflict pain on its citizens—in the future.

Even if we do nothing, Social Security can pay out full benefits for the next 35 years. There is no crisis. A small increase on the payroll cap on Social Security could shore up the program for generations to come. Republicans oppose Social Security because they are ideologically opposed to social welfare programs, not because Social Security is broken.

This post features links to the best independent, progressive reporting about the economy by members of The Media Consortium. It is free to reprint. Visit the Audit for a complete list of articles on economic issues, or follow us on Twitter. And for the best progressive reporting on critical economy, environment, health care and immigration issues, check out The Mulch, The Pulse and The Diaspora. This is a project of The Media Consortium, a network of leading independent media outlets.

Weekly Audit: The Shocking Truth About Taxes

Posted Apr 19, 2011 @ 10:45 am by
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Creative Commons, Flickr, soukupBy Lindsay Beyerstein, Media Consortium blogger

The super rich are different from you and me. For one thing, their tax rates are lower.

According to IRS statistics, the nation’s top 400 taxpayers increased their average income by 392% and slashed their average tax rate by 37% between 1992 and 2007, Dave Gilson reports in Mother Jones. Furthermore, when you factor in payroll taxes, the tax rate for Americans earning $370,000 is nearly equal to the rate for those making between $43,000 and $69,000 a year.

Meanwhile, at TAPPED, Jamelle Bouie notes that, in 2007, more than 10,000 Americans reported incomes of $200,000 or higher and paid no income tax at all. These lucky ducks are known to the IRS as HINTs, which stands for High Income, No Taxes.

Pseudo-farms of the rich and tax-dodging

The ultra-rich are using deluxe hobby farms to dodge millions of dollars in taxes, Yasha Levine reports for The Nation:

Take Michael Dell, founder of Dell Computers and the second-richest Texan, who qualified for an agricultural property tax break on his sprawling 1,757-acre residential ranch in suburban Austin and saved over $1 million simply because his family and friends sometimes use the land as a private hunting preserve to shoot deer. Or take billionaire publisher Steve Forbes, who got more than a 90 percent property tax reduction on hundreds of acres of his multimillion-dollar estate in upscale Bedminister, New Jersey, just by putting a couple of cows out to pasture.

Agricultural tax breaks were originally designed to help farmers stay on their land as suburban sprawl grew up around them. As neighborhoods shifted from rural to residential in the 1950s and ’60s, farmers struggled to keep up with rising local taxes.

So, who’s a farmer for tax purposes? Levine reports that the standards are ridiculously low in many states, like New Jersey, where a yard full of weeds can qualify as a farm.

Worst of all, tax breaks for faux farms are depriving public schools of billions of dollars of desperately needed revenue. In Texas–which loses over a billion dollars a year in property taxes from pseudo-ranches of the rich and famous–hundreds of public school students are taking to the streets to protest massive proposed layoffs of teachers and support staffers, Abby Rapoport reports in the Texas Observer.

Tax me, I’m rich

A group of self-proclaimed “trust fund babies” is demanding higher taxes, Pete Redington reports for Working In These Times:

Resource Generation recently teamed up with another nonprofit that organizes affluent activists, Wealth for the Common Good, to form a Progressive Tax Campaign. They will be organizing and advocating a change in the policy, laws and perceptions of our tax system. Specifically, the campaign aims to draw attention to the social services that taxing the wealthy could fund, and advocates higher tax bracket rates for top income earners, as well as higher taxes on investment income.

Major debt

Student loan debt is likely to reach $1 trillion this year, outpacing credit card debt for the second year in a row, Julie Margetta Morgan reports for Campus Progress. Student loans can be a smart investment if they lead to a lifetime of higher earnings. However, Margetta Morgan notes, the average bachelor’s degree holder will shell out $250 a month for a decade to pay back the loan.

Many Americans won’t pay off their debt until their own children are in college. President Obama was still making payments into his late 40s.

As college tuition continues to rise, we can expect students to borrow even more for their education in years to come. Much of this debt is guaranteed by the taxpayer. Margetta Morgan argues that colleges should be doing more to educate students about smart borrowing.

The economics of happiness

Kristy Leissle reviews the new documentary, The Economics of Happiness, for YES! Magazine. The film argues that community is the foundation of happiness and that globalization is the enemy of community. The movie also examines what ordinary citizens can do to nurture their own communities.

This post features links to the best independent, progressive reporting about the economy by members of The Media Consortium. It is free to reprint. Visit the Audit for a complete list of articles on economic issues, or follow us on Twitter. And for the best progressive reporting on critical economy, environment, health care and immigration issues, check out The Mulch, The Pulse and The Diaspora. This is a project of The Media Consortium, a network of leading independent media outlets.

Weekly Audit: Government Shutdown Averted, But At What Cost?

Posted Apr 12, 2011 @ 10:44 am by
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Creative Commons, Flickr, PhotoOptikBy Lindsay Beyerstein, Media Consortium blogger

Congressional leaders and President Barack Obama reached an eleventh hour budget deal on Friday night, to fund the government for the rest of the 2011 fiscal year and avert a government shutdown for the time being.

The deal would cut about $38 billion, Amy Goodman reports for Democracy Now!, including $13 billion in cuts to the Department of Health, Labor, and Human Services.

John Nichols describes the nuts and bolts of the stopgap plan in The Nation:

The arrangement worked out Friday night averted the threatened shutdown with a two-step process. First, the House and Senate passed a one-week spending bill that addressed the immediate threat. That should give Congress and the White House time to finalize a fiscal 2011 spending deal—on which they have agreed in principle—before an April 15 deadline.

The Republicans will not be allowed to zero out Planned Parenthood. Instead they were allowed a separate, largely symbolic vote, which passed the House, but which is expected to die in the Senate.

Planned Parenthood and ACORN

Nick Baumann of Mother Jones argues that the deal is a case study in the priorities of the Democratic Party. At the last minute, congressional Democrats rallied to save Planned Parenthood. The venerable family planning organization was under fire because of an undercover video sting by Lila Rose, a onetime protegee of conservative propagandist James O’Keefe, who himself pulled a similar stunt against the anti-poverty, pro-voter registration group ACORN in 2009.

O’Keefe’s videos created a media firestorm and Congress rushed to de-fund ACORN with little protest from Democrats. Subsequent independent investigations revealed that the tapes had been deceptively edited. Vindication came too late for ACORN, which was forced to close its doors.

Baumann argues that Democrats spared Planned Parenthood and sacrificed ACORN because ACORN didn’t have friends in the right places:

Abortion rights affect everyone. But to put it bluntly, big Dem donors care a lot more about abortion rights than they do about community organizers in inner cities.

Specious “victory”

In the days leading up to the deal, the media created the expectation that the budget was a game that one party would “win.” Paul Waldman of The American Prospect argues that in his eagerness to declare “victory” in the budget showdown, President Obama is undermining his own political agenda.

It would have been nice if when announcing the budget deal, President Obama had set aside the politician’s natural inclination to declare victory and his own preference for casting himself as the adult who settles things between the squabbling children. He could have said something like this: “The deal we just made is preferable to a government shutdown, which would have been truly disastrous. But nobody should mistake it for anything but the tragedy it is. As a result of the cuts Republicans have forced, people who rely on government services will suffer, and the economy will lose jobs. The Republicans held the government hostage, and we had no choice but to pay the ransom.”

By rushing to champion the spending cuts, Obama may be saving face, but he’s also setting a precedent that will make the next round of cuts even easier. The truth is that Democrats conceded under duress, they didn’t volunteer to cut spending because they thought it would help the country.

Indeed, Democrats agreed to far more cuts than the Republicans initially asked for. Cenk Uygur of the Young Turks argues that the Tea Party and the ostensibly more mainstream Republicans set up a very effective good cop/bad cop negotiating strategy in which the Democrats would offer cuts and the mainstream Republicans would say, “I’d like to help you, really I would, but you know my partner isn’t going to like that.”

Corporate taxes

Joshua Holland of AlterNet explains how corporate American has successfully lobbied to shift an ever-increasing share of its tax burden onto the backs of individual citizens:

Well, consider this: in the 1940s, corporations paid 43 percent of all the federal income taxes collected in this country. In the 1950s, they picked up the tab for 39 percent. But by the time the 1990s rolled around, corporations were paying just 18.9 percent of federal income taxes, and they forked over the same figure in the first decade of this century. We – working people – paid the difference.

Something to think about as we prepare to file our income tax returns.

This post features links to the best independent, progressive reporting about the economy by members of The Media Consortium. It is free to reprint. Visit the Audit for a complete list of articles on economic issues, or follow us on Twitter. And for the best progressive reporting on critical economy, environment, health care and immigration issues, check out The Mulch, The Pulse and The Diaspora. This is a project of The Media Consortium, a network of leading independent media outlets.

Weekly Audit: Republicans’ Budget Declares War on Medicare

Posted Apr 5, 2011 @ 10:43 am by
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Creative Commons, Flickr, howzeyBy Lindsay Beyerstein, Media Consortium blogger

The Republicans are poised to unveil a model budget on Tuesday that would effectively end Medicare by privatizing it, Steve Benen reports in the Washington Monthly. House Budget Committee Chair Paul Ryan (R-WI) is touting the budget as a strategy to reduce the national debt.

Ryan’s plan would turn Medicare from a single-payer system to a “premium support” system. “Premium support” is a euphemism for the government giving up to $15,000 per person, per year, to insurance companies to defray the cost of a health insurance policy.

As Benen points out, privatizing Medicare does nothing to contain health care costs. On the contrary, as insurance customers weary of double-digit premium increases can attest, private insurers have a miserable track record of containing costs. They excel at denying care and coverage, but that’s not the same thing.

The only way the government would save money under Ryan’s proposal is by paying a flat rate in vouchers. Medicare covers the full cost of medical treatments, but private insurers are typically much less generous. So, after paying into Medicare all their working lives, Americans currently 55 and younger would get vouchers for part of their health insurance and still have to pay out-of-pocket to approach the level of benefits that Medicare currently provides.

Taking aim at Medicaid

The poor are easy targets for Republican budget-slashing, Jamelle Bouie writes on TAPPED. Ryan’s proposal would also cut $1 trillion over the next 10 years from Medicaid, the joint federal-state health insurance program for the poor, by eliminating federal matching and providing all state funding through block grants. Most of this money would come from repealing the Affordable Care Act’s Medicaid expansion, which is slated to add 15 million people to Medicaid.

Block grants are cuts in disguise. Currently, Medicaid is an entitlement program, which means that states have to enroll everyone who is eligible, regardless of the state’s ability to pay. In return, the states get federal matching funds for each person in the program. Ryan and the Republicans want to change Medicaid into a block grant program where the federal government simply gives each state a lump sum to spend on Medicaid. The states want to use this new found “flexibility” to cut benefits, narrow eligibility criteria, and generally gut the program.

This is incredibly short-sighted. The current structure of Medicaid ensures extra federal funding for every new patient. So when unemployment rises and large numbers of new patients become eligible for Medicaid, the states get extra federal money for each of them. But with a block grant, the states would just have to stretch the existing block grants or find money from somewhere else in their budgets. Medicaid rolls surge during bad economic times, so a block grant system could make state budget crises even worse.

Ryan’s proposal has no chance of becoming law as long as Democrats control the Senate. The main purpose of the document is to lay out a platform for the 2012 elections.

Fake debt crisis

In The Nation, sociologist and activist Frances Fox Piven argues that the Republicans are hyping the debt threat to justify cuts to social programs:

Corporate America’s unprovoked assault on working people has been carried out by manufacturing a need for fiscal austerity. We are told that there is no more money for essential human services, for the care of children, or better public schools, or to help lower the cost of a college education. The fact is that big banks and large corporations are hoarding trillions in cash and using tax loopholes to bankrupt our communities.

She notes that Republican-backed tax cuts for the wealthy are a major contributor to the debt.

Jesus was a non-union carpenter?

Josh Harkinson of Mother Jones reports on the religious right’s crusade against unions. He notes that James Dobson of the socially conservative Family Research Council tweeted: “Pro-family voters should celebrate WI victory b/c public & private sector union bosses have marched lock-step w/liberal social agenda.”

Harkinson reports that the Family Research Council is backing the Republican incumbent, David Prosser, in today’s Wisconsin Supreme Court election–a battle that has become a proxy fight over Gov. Scott Walker’s anti-collective bargaining bill:

The FRC’s new political action committee, the Faith, Family, Freedom Fund, is airing ads on 34 Wisconsin radio stations in an effort to influence the April 5 judicial election that could ultimately decide the fate of the law. The ads target Wisconsin Assistant Attorney General JoAnne Kloppenburg, who’s running against a conservative incumbent, David Prosser, for a seat on the state Supreme Court. If elected, Kloppenburg would alter the balance on the court in favor of Democrats, giving them the ability to invalidate the recently enacted ban on public-employee collective bargaining. “Liberals see her as their best hope to advance their political agenda and strike down laws passed by a legislature and governor elected by the people,” say the ads. “A vote for Prosser is a vote to keep politics out of the Supreme Court.”

Roger Bybee of Working In These Times argues that recalling Republican state senators in Wisconsin is not enough to defend workers’ rights from Gov. Scott Walker’s anti-union onslaught.

This post features links to the best independent, progressive reporting about the economy by members of The Media Consortium. It is free to reprint. Visit the Audit for a complete list of articles on economic issues, or follow us on Twitter. And for the best progressive reporting on critical economy, environment, health care and immigration issues, check out The Mulch, The Pulse and The Diaspora. This is a project of The Media Consortium, a network of leading independent media outlets.

Weekly Audit: Wolf in Sheep’s Clothing–The Myth of Fiscal Conservatism

Posted Mar 29, 2011 @ 11:37 am by
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Creative Commons, Flickr, The 2-BeloBy Lindsay Beyerstein, Media Consortium blogger

Fashionable pundits like to say that the Republican Party has shifted its focus from “social conservatism” (e.g., banning abortion, shoving gays back in the closet, teaching school children that humans and dinosaurs once walked the earth hand-in-claw) to fiscal conservatism (e.g., tax cuts for the rich, slashing social programs). But is that really true? Tim Murphy of Mother Jones argues that the old culture war issues never really went away. Rather, the Republicans have simply rephrased their social agenda in fiscal terms.

For example, Rep. Mike Pence (R-IN) is quite upfront about the fact that he hates Planned Parenthood because the group is the nation’s leading abortion provider. Yet, he seeks to de-fund the Planned Parenthood and the entire Title X Family Planning Program in the name of balancing the budget. Never mind that the federal money only goes toward birth control, not abortion, and research shows that every dollar spent on birth control saves $4 in Medicaid costs alone.

Steve Benen of the Washington Monthly surveys the current crop of GOP presidential hopefuls in Iowa and agrees that reports of the death of the culture war have been greatly exaggerated.

But the key takeaway here is that fiscal issues have largely been relegated to afterthought status. That’s just not what these right-wing activists — the ones who’ll largely dictate the outcome of the caucuses — are focused on. Indeed, even Ron Paul, after pandering to a home-school crowd last week, conceded, “I haven’t been asked too much about fiscal issues.”

Budget cuts

Sarah Babbage writes in TAPPED that Obama and the Democratic leadership in Congress seem poised to grant an additional $20 billion in spending cuts for FY 2011, in addition to the $10 billion in cuts they’ve already pledged for this fiscal year. Babbage notes that, after weeks of negotiations, we’re right back to the $30 billion in cuts the GOP initially demanded. She warns that these cuts will have a trivial impact on the $1.6 trillion deficit, but they could have a devastating effect on the fragile economy.

Taxes for thee, but not GE

General Electric raked in $14.2 billion in profits last year, $5.1 billion of which came from the United States, yet the company paid $0 in U.S. income tax, Tara Lohan notes in AlterNet. Despite its healthy bottom line, and its sweet tax situation, GE is asking 15,000 unionized U.S. workers to make major concessions at the bargaining table. GE wants union members to give up defined benefit pension programs in exchange for defined contribution programs.

As we discussed last week in The Audit, defined benefit plans guarantee that a retiree will get a set percentage of her working salary for the rest of her life; defined contribution plans pay the worker a share of the revenue from a pool of investments. As the fine print always says, investments can decrease in value. So, if the stock market crashes the day before you retire, you’re out of luck.

Generation Debt

Higher education is supposed to be a stepping stone to a better standard of living, but with unemployment hovering around 10%, many college graduates are struggling to find jobs to pay their student loans. Aliya Karim argues in Campus Progress that the government should compel colleges and universities to be more transparent about the realities of student loan debt:

The government should require colleges to provide information about graduation rates, college costs, and financial aid packages on college websites, enrollment forms, and guidebooks. This information should be easy to find and understand. Without such information available to them, students may not be aware that their future college has a graduation rate lower than 20 percent or that its graduates face close to $30,000 in debt.

The government has a lot of leverage over public and private schools because so much student debt is guaranteed by taxpayers. Greater transparency will enable students to make more informed choices, and give colleges with low graduation rates a greater incentive to clean up their act.

This post features links to the best independent, progressive reporting about the economy by members of The Media Consortium. It is free to reprint. Visit the Audit for a complete list of articles on economic issues, or follow us on Twitter. And for the best progressive reporting on critical economy, environment, health care and immigration issues, check out The Mulch, The Pulse and The Diaspora. This is a project of The Media Consortium, a network of leading independent media outlets.

Weekly Audit: Hostile Takeover Threat Spurs Concessions from Michigan Unions

Posted Mar 21, 2011 @ 5:35 pm by
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Creative Commons, Flickr, maistoraBy Lindsay Beyerstein, Media Consortium blogger

Michigan’s new Emergency Manager Law is already forcing major concessions from unions. The law gives the governor the power to declare a city insolvent and appoint an emergency manager with virtually unlimited power to reorganize every aspect of city business, including dissolving the city entirely. The emergency manager even has the power to terminate collective bargaining agreements.

As a result of these expanded new powers, public employees unions in some Michigan municipalities are already making large preemptive concessions to keep their cities from tripping any of the “triggers” in the new law that might give the governor an opening to send in a union-busting emergency manager, Eartha Jane Melzer reports in the Michigan Messenger.

In Flint, the firefighters’ union agreed to increase contributions to health insurance and give up holiday pay and night shift differentials. Flint Firefighters Union President Raul Garcia told the Wall Street Journal that these concessions were driven by fear of a state takeover of Flint. “I would rather give concessions that I would like than have an [emergency financial manager] or something of that magnitude come in and say this is what you are going to do,” Garcia said.

The new law also gives the Emergency Manager the power to privatize prisons, Melzer notes.

Detroit grows green

The citizens of Detroit aren’t waiting around for an emergency manager to take over. The city’s industrial economy is dying, but its grassroots economy is stirring to life, Jenny Lee and Paul Abowd report in In These Times. Detroit residents have been growing their own food in town for decades, but recently activists and the city have joined forces to link many small producers into a network that will provide food security for the city.

Wal-Mart and wage discrimination

Next week, the Supreme Court will take up the case of 100 women who are suing Wal-Mart for wage discrimination. As Scott Lemieux explains in The American Prospect, the Court will decide whether these women can band together to sue the nation’s largest retailer, or whether each must sue the firm individually.

Lemieux argues that, for the sake of women’s rights at work, it is very important that these Wal-Mart employees be allowed to sue together instead of one at a time:

Given the compelling stories these individual women can tell, does it matter whether they can file suit collectively? Absolutely, for at least two reasons. First of all, only a class-action suit can properly create a record of the systematic gender discrimination at Wal-Mart. Any individual case can be dismissed as an anomaly or a misunderstanding, but the volume of complaints makes clear that gender discrimination was embedded deeply within the culture of the corporation, a very relevant fact for a discrimination suit.

Litigation is expensive and time-consuming, for the individuals and for the court system. Forcing victims of discrimination to sue one by one makes it less likely that they will seek justice, especially if they’re suing because they were underpaid in the first place. Wal-Mart claims that the class is too large to be allowed to proceed, and that the women couldn’t possibly have similar enough claims. But as Lemieux points out, the class is huge because Wal-Mart is huge.

War and the deficit

Jamelle Bouie writes at TAPPED, in response to the United States’ new military commitments in Libya:

I just wish we could at least acknowledge the obvious truth: conservatives don’t care about deficits but will use them to cut spending on poor people. When it comes to things they like — wars, for instance — they’re willing to pay any price.

The U.S. fired 110 Tomahawk Missiles at Libya on Saturday, at an estimated total cost of $81 million, or 33 times the annual federal funding for National Public Radio.

Sally Kohn of TAPPED notes that the United States scraped together $2.3 million worth of “blood money” to pay off the families of the victims of Raymond Davis, a rogue CIA operative who shot and killed two men who tried to rob him in Pakistan. Laura Flanders of GRITtv calculates that $2.3 million ransom for a single killer would have paid the salaries of 45 Wisconsin public school teachers for a year.

Public pensions 101

We often hear that public pensions are unfunded. On the Breakdown, Chris Hayes of The Nation asks economist Dean Baker what this actually means. Baker explains that s0-called “defined benefit” pensions have become rare in the private sector, but remain relatively common in the public sector. A defined benefit pension guarantees the pensioner a certain income. Most private sector pensions are so-called “defined contribution” plans, which means that employer puts aside a certain amount of money each month for the employee, but there’s no guarantee how much return the pensioner will eventually get on that investment.

A state pension fund is considered unfunded if the assets the fund has today aren’t sufficient to cover the defined benefits that are due to workers over the next 30 years. Baker notes that many funds are a lot healthier than they look because their values were calculated at the nadir of the stock market in 2009. The market has since made up a large percentage of that ground. A handful of states were mismanaging their pension funds, but most states have been responsible.

Ethical outlaws

Bea is a manager of a big-box chain store in Maine. The company pays her staff between $6 and $8 an hour and many are struggling. Even as she tries to keep a professional atmosphere in the store, Bea has been known to bend the rules to help an employee in need, as Lisa Dodson describes in YES! Magazine:

When one of her employees couldn’t afford to buy her daughter a prom dress, Bea couldn’t shake the feeling that she was implicated by the injustice. “Let’s just say … we made some mistakes with our prom dress orders last year,” she told me. “Too many were ordered, some went back. It got pretty confusing.” And Edy? “She knocked them dead” at the prom.

Andrew, a manager in the Midwest is quietly padding his employees’ paychecks because he knows their wages aren’t enough to live on. Andrew knows he might be accused of stealing, but he does it anyway because the alternative is unthinkable.

Dodson interviewed hundreds of low- and middle-income people about the economy between 2001 and 2008. Along the way, she stumbled on what she calls “the moral underground,” a world where managers bend the rules at corporate expense to enable their low-wage staff to get by. It is legal to pay people less than a living wage, but increasing numbers of people like Bea and Arthur have decided that the situation is morally unacceptable, and quietly acted accordingly.

This post features links to the best independent, progressive reporting about the economy by members of The Media Consortium. It is free to reprint. Visit the Audit for a complete list of articles on economic issues, or follow us on Twitter. And for the best progressive reporting on critical economy, environment, health care and immigration issues, check out The Mulch, The Pulse and The Diaspora. This is a project of The Media Consortium, a network of leading independent media outlets.

Weekly Audit: Massive Protest In Wisconsin Shows Walker’s Overreach

Posted Mar 15, 2011 @ 10:44 am by
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Creative Commons, Flickr, Jessie ReederBy Lindsay Beyerstein, Media Consortium blogger

About 100,000 people gathered in Madison, Wisconsin to protest Gov. Scott Walker’s new anti-collective bargaining law. The state Senate hurriedly passed the bill without a quorum last Wednesday. Roger Bybee of Working In These Times reports:

The rally featured 50 farmers on tractors roaring around the Capitol to show their support for public workers and union representatives from across the nation, stressing the importance of the Wisconsin struggle. Protesters were addressed by a lineup of fiery speakers including fillmaker Michael Moore, the Texas populist radio broadcaster Jim Hightower, TV host Laura Flanders, the Rev. Jesse Jackson, U.S. Rep. Dennis Kucinich, U.S. Rep. Tammy Baldwin, and The Progressive editor Matt Rothschild, among others.

The bill is law, but the fight is far from over. The Wisconsin Democratic Party says it already has 45% of the signatures it needs to recall 8 Republican state senators. So far, canvassers have collected 56,000 signatures, up from 14,000 last weekend. The surge in signature gathering is another sign that the Walker government’s abrupt push to pass the bill has energized the opposition. (more…)

Weekly Audit: Standoff Continues in Wisconsin

Posted Mar 8, 2011 @ 11:56 am by
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Creative Commons, Flickr, antroverBy Lindsay Beyerstein, Media Consortium blogger

The 14 Democratic state senators who fled Wisconsin to thwart the passage of a draconian anti-union have no plans to return.

On Sunday night, a Wall Street Journal blog reported that the senators planned to return soon. Steve Benen of the Washington Monthly found it odd that the piece didn’t contain any direct quotes from the exiled Democrats. The claim that the Democrats were planning to return rested on a paraphrase of State Sen. Mike Miller said about the Democrats coming back. Miller says the Journal misconstrued his remarks and that the Dems are only coming back “when collective bargaining is off the table.”

It would be an odd time for Democrats to return. Republican governor Scott Walker has offered them zero concessions. Furthermore, as Benen observes, Walker’s popularity is plummeting. The latest poll by the Wisconsin Research Institute puts the governor’s approval rating at 43%, with 53% disapproving. A majority of respondents had favorable opinions of state Senate Democrats, public employee unions, and teachers’ unions.

Benen writes:

The significance of these polls can’t be overstated — they stiffen Democratic spines, while making Republicans increasingly nervous about standing behind an unpopular governor with an unpopular plan.

In YES! Magazine, Amy B. Dean explains why every American should care about the situation in Wisconsin. The collective bargaining rights of public employees are the central issue in this standoff. Walker is testing a radical new approach to unions and several other Republican governors are poised to follow his model if he succeeds. It is naive to assume that the war on unions will end with the public sector.

Jobs gap

Writing at The Nation, Chris Hayes explains why Washington doesn’t care about jobs. Hayes argues that Washington elites are insulated from the toll of unemployment by class and geography. The jobless rate for workers with college degrees is only 4.2%, which is less than half of the official unemployment rate of 9% and a quarter of the 16.1% underemployment rate. (The underemployment rate counts both the jobless who are still looking for work and those who have given up and left the labor force.) Furthermore, Hayes notes, the unemployment rate in greater Washington, D.C. is only 5.7%, which is lower than that of any other major city in America. He writes:

What these two numbers add up to is a governing elite that is profoundly alienated from the lived experiences of the millions of Americans who are barely surviving the ravages of the Great Recession. As much as the pernicious influence of big money and the plutocrats’ pseudo-obsession with budget deficits, it is this social distance between decision-makers and citizens that explains the almost surreal detachment of the current Washington political conversation from the economic realities working-class, middle-class and poor people face.

Even as the overall unemployment rate falls, economic recovery proves elusive for many workers of color, Shani O. Hilton reports at Colorlines.com. The February jobs report shows that the economy added 192,000 jobs, with overall unemployment falling by a tenth of a percentage point, bringing joblessness to its lowest rate since 2009. However, the unemployment rates for black and Hispanic workers remained fixed in February, at 15.3% and 11.6%, respectively.

Hilton notes that even if the economy were to add 200,000 jobs a month, it would take three years to bring general employment up to pre-recession levels.

Public innovation

The stereotype is that the private sector drives innovation. However, as Monica Potts reports in The American Prospect, industry’s well-deserved reputation for innovation is built on a foundation of publicly funded basic research. Conservatives often argue that the private sector would pick up the slack if public funding for basic research were reduced. Potts argues that public funding for basic research is essential because companies will naturally gravitate towards research that has an immediate payoff, instead of investing in cultivating deeper scientific understanding through basic research.

This post features links to the best independent, progressive reporting about the economy by members of The Media Consortium. It is free to reprint. Visit the Audit for a complete list of articles on economic issues, or follow us on Twitter. And for the best progressive reporting on critical economy, environment, health care and immigration issues, check out The Mulch, The Pulse and The Diaspora. This is a project of The Media Consortium, a network of leading independent media outlets.

Weekly Audit: Police Defy Order to Clear Protesters from Wisconsin Capital

Posted Mar 1, 2011 @ 12:14 pm by
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Creative Commons, Flickr, eaghraBy Lindsay Beyerstein, Media Consortium blogger

On Monday afternoon, the Capitol Police in Madison, Wisconsin refused to enforce an order to clear the Capitol building of hundreds of peaceful protesters who have been occupying the site to protest Governor Scott Walker’s plan to eliminate the collective bargaining rights of public employees.

Amy Goodman of Democracy Now! interviews State Rep. Kelda Helen Roys (D), who spent Sunday night in the Capitol building with other protesters. Roys describes what happened at four o’clock on Monday afternoon when the government gave the order to clear the protesters from the building:

And after several hours of the same sorts of scenes that we’ve been seeing all week—singing, chanting, drumming, speechifying—the Capitol police captain, Chief Tubbs, made an announcement, and he said that the protesters that had remained in the building, they were being orderly and responsible and peaceful and there was no reason to eject them from the Capitol.

Police attempted to clear the building of protesters on Sunday night, but they relented when the protesters refused to leave and allowed them to stay another night. On Monday, the police decided not to eject protesters already inside, but no additional activists would be allowed in. The governor plans to deliver his budget address on Tuesday afternoon. Walker is expected to call for spending cuts that could exceed $1 billion dollars.

Gov. Walker has threatened mass public sector layoffs if the Democratic senators do not return from Illinois by March 1. However, the Uptake.com reports that one of the absent legislators, State Sen. Jon Erpenbach, claims Walker is not telling the truth. Erpenbach says the unions have already agreed to come up with the money the governor needs to balance the budget, and therefore, he has no need to lay anyone off to bridge the gap.

Wisconsin 101

Matthew Rothschild of The Progressive describes the epic scale of the Wisconsin protests:

This is the largest sustained rally for the rights of public sector workers that this country has seen in decades — perhaps ever.

The crowds at the state Capitol have swelled from 10,000-65,000 during the first week all the way up to 100,000 on Feb. 26. Hundreds of people occupied the Capitol building with a sit-in and sleep-in for days on end, and total strangers from around the world ordered pizzas for them.

In case you’re still wondering what all of this means, Andy Kroll, Nick Baumann, and Siddhartha Mahanta of Mother Jones have joined forces to bring you this “Wisconsin 101″ primer.

The Republicans in the Wisconsin House passed a bill that would take away collective bargaining rights for public sector unions, restrict their ability to collect dues, and force them to undergo yearly recertification votes. But the bill cannot become law until the state Senate also passes it. Currently, 14 Democratic state senators are hiding out in Illinois to deprive the Republican majority of the quorum they need to vote on the bill. However, as Kroll notes, if only one Democrat breaks faith and returns to Madison, the Republicans will be able to pass the bill.

Nationwide solidarity

Jamilah King of Colorlines.com brings us a photo essay on the solidarity rallies held around the country over the weekend in support of the Wisconsin protesters. From San Francisco to Salt Lake City to Atlanta to New York, people took to the streets in support of the right of workers to organize. Also at Colorlines.com, historian Michael Honey draws parallels between the situation in Wisconsin and Dr. Martin Luther King‘s last crusade. Shortly before his assassination, King stood with the sanitation workers of Memphis to demand collective bargaining rights and the power to collect union dues.

George Warner of Campus Progress profiles some young activists who took to the streets of Washington, D.C. to express their solidarity with the Wisconsin protesters. About 1,500 people came out to a rally in support of the protesters on Saturday.

Anonymous strikes again

In a bizarre twist, a loosely organized coalition of anarchic hackers known as “Anonymous” attacked websites linked to Koch Industries on Sunday, Jessica Pieklo reports for Care2.com. The Koch brothers are among Gov. Walker’s most generous benefactors. The hackers launched a distributed denial of service attack on the website of the Koch-funded conservative group Americans for Prosperity.

In addition to generous campaign contributions, the Koch brothers gave $1 million to the Republican Governors Association, which in turn paid for millions of dollars worth of ads against Walker’s opponent in 2010. Walker is evidently very grateful to Koch. Last week, a writer for a Buffalo-based website got Walker on the phone by pretending to be David Koch.

Don’t look now, but…

Meanwhile, in Indiana, the state assembly reconvened on Monday to find most of the 40 Democratic members had decamped for Illinois. The legislators are apparently taking a page from the Wisconsin playbook. Indiana’s Republican governor is trying to pass legislation that would make permanent a ban on collective bargaining by public sector workers and the Democratic legislators are seeking to deny him the 2/3rds quorum required to vote on the bill.

This post features links to the best independent, progressive reporting about the economy by members of The Media Consortium. It is free to reprint. Visit the Audit for a complete list of articles on economic issues, or follow us on Twitter. And for the best progressive reporting on critical economy, environment, health care and immigration issues, check out The Mulch, The Pulse and The Diaspora. This is a project of The Media Consortium, a network of leading independent media outlets.