Hanauer Ruffles Some Feathers

Here is an interesting video of Nick Hanauer at TED. Hanauer is a wealthy venture capitalist who dares to say what some of his class do not want to hear; the wealthy are not the prime job creators and that nothing matters without a healthy middle class. This apparently offended the operatives at TED so much that they refused to post, as is customary, the video at their website.

Alex Pareene provides some perspective, noting first that TED is a self-indulgent, over-hyped organization funded by and for wealthy Silicon Valley types who love to congratulate themselves on what they fancy is their proper position in the pantheon of money and privilege. As Pareene puts it:

In case you’re unfamiliar with TED, it is a series of short lectures on a variety of subjects that stream on the Internet, for free. That’s it, really, or at least that is all that TED is to most of the people who have even heard of it. For an elite few, though, TED is something more: a lifestyle, an ethos, a bunch of overpriced networking events featuring live entertainment from smart and occasionally famous people...Strip away the hype and you’re left with a reasonably good video podcast with delusions of grandeur. For most of the millions of people who watch TED videos at the office, it’s a middlebrow diversion and a source of factoids to use on your friends. Except TED thinks it’s changing the world, like if “This American Life” suddenly mistook itself for Doctors Without Borders.

TED has a lot riding on its continued success and it doesn't want anyone, including a fellow rich guy, screwing things up by speaking too plainly. Attendees shell out big time to have their egos stroked, not to hear a presentation that was inappropriately "political". That, at least, is how TED was spinning it. My own view is that many in the crowd are not indifferent to Hanauer's argument. Many even share it, including his point that growing inequality will hurt us all, and the wealthy need to pay more taxes.

Republicans say Republicans are the Problem

Perhaps you heard recently that two prominent Republican strategists have acknowledged that Republicans are the problem with government. Surely you have read by now the whirlwind tour that Messrs. Thomas Mann and Norman Ornstein have been on, where they have been able to discuss in detail their damning indictment against what the Republican Party has become. All the major media outlets have hosted the pair where they have been able to honestly discuss the issues. Shawn Hannity says he has had an epiphany, a veritable mea culpa. Even Rush Limbaugh admits to rethinking his positions.

All right, so that will never happen. Not when their salaries depend upon them not understanding it, to paraphrase Upton Sinclair. But Mann and Ornstein, writing in none other than the Washington Post, did indeed acknowledge how toxic their party has become:

We have been studying Washington politics and Congress for more than 40 years, and never have we seen them this dysfunctional. In our past writings, we have criticized both parties when we believed it was warranted. Today, however, we have no choice but to acknowledge that the core of the problem lies with the Republican Party.

It is grimly gratifying to hear them admit that

The GOP has become an insurgent outlier in American politics. It is ideologically extreme; scornful of compromise; unmoved by conventional understanding of facts, evidence and science; and dismissive of the legitimacy of its political opposition.

The Republican party was not always like this. Geoffrey Kabaservice's history of the party, Rule and Ruin, reminds us Republicans had long stretches of moderation and sensibility. Mann and Ornstein plead this point as well. They acknowledge what progressives have been saying for years; "...the center of gravity of the Republican Party has shifted sharply to the right."

And you thought all that talk about obstructionist Republicans was just whiny liberals:

Today, thanks to the GOP, compromise has gone out the window in Washington. In the first two years of the Obama administration, nearly every presidential initiative met with vehement, rancorous and unanimous Republican opposition in the House and the Senate, followed by efforts to delegitimize the results and repeal the policies. The filibuster, once relegated to a handful of major national issues in a given Congress, became a routine weapon of obstruction, applied even to widely supported bills or presidential nominations. And Republicans in the Senate have abused the confirmation process to block any and every nominee to posts such as the head of the Consumer Financial Protection Bureau, solely to keep laws that were legitimately enacted from being implemented.

I remind readers that Mann and Ornstein are fixtures in Washington and in Republican circles, often called upon to do the intellectual heavy lifting on conservative issues. So what makes the media response even more interesting, in an Alice-in-Wonderland sort of way, is the systemic refusal of Washington elites, beyond the Wapo, to acknowledge or even bother to dispute, the veracity of Mann and Ornstein's contentions. They are simply being ignored. Bear in mind that these two authors are among the most quoted in politics; they are frequent guests on the media talk shows.

Not this time. Republicans and their media masters can blow off such talk when it comes from Democrats; it is harder to do when your own policy wonks say the same thing. So you do the next best thing. Ignore them and be thankful the news cycle is as short as the American attention span.

Good For Business

I see where America's biggest corporations, the Fortune 500, have just reported record profits of $824 billion for 2011. This wasn't supposed to happen, not if you listened to the rhetoric from the chieftains of these firms, along with the paid shills of the Republican Party. After all, wasn't President Obama supposed to be a closet Marxist? And isn't he set on destroying free enterprise and turning us all into wards of the Democratic Party? Or was it a Muslim caliphate?

How did that argument go again? They said business needs tax cuts in order to hire more workers, and that America's seemingly high corporate tax rate was stifling business. They said that Wall Street had no confidence in Obama and that business would languish as a result. All those regulations and taxes had to be cut if we were ever to recover. If only Obama wasn't so extremist or anti-business. This is after Wall Street trashed the economy under Bush's indifferent watch, and before, during, and after the dramatic recovery of corporate profits and stock prices after Obama took office.

Couldn't have happened to a more deserving bunch, the same Wall Street crowd that was, and under Obama, continues to be, the wealthiest and most privileged people this side of the House of Windsor.

Republican talking points have become a fantastical bundle of contradictions, increasingly disconnected to empirical reality. Here is ThinkProgress with more on how well big business has done under Obama and more background on increased productivity (with no commensurate wage increases), increasing CEO pay, and the 40-year low in the tax rates corporations actually pay.

Undermine What Works

Hope you are keeping up with the drama with our postal service, the one many claim is poorly run and should be rescued by privatizing it. Here is a quick summary, as provided by Stephanie Whiteside at Current.com.

The Senate has scrambled to prevent the closing of hundreds of local post offices and give communities a right to appeal closures after the U.S. Postal Service proposed the closings in response to a budget gap.

Officials claim the gap is due to a move towards other services  — people paying bills and conducting business online rather than relying on the postal service. But is email the main reason for the gap?

While the postal service may be facing challenges due to the Internet, it's not the only reason the agency is feeling squeezed. In 2006 Congress passed the Postal Accountability and Enhancement Act, which requires that the Postal Service pre-fund 100 percent of its health benefits for 75 years. Not just that, but the USPS was given only 10 years to accomplish the task. That's something no other organization(public or private) is required to do. Prior to the 2006 act, USPS generated a profit; now, with the additional $5.5 billion a year it must pre-fund, it's facing a budget shortfall. 

Is it really any surprise, as Whiteside points out, that industry lobbyists, meaning competitors to the USPS, were in favor of the legislation? Said legislation, passed when Republicans held Congress and the White House, also made it more difficult for the USPS to innovate and experiment with new avenues of growth.

The problem now is that the postal service is being compelled to close numerous small rural PO's to cut costs, an extraordinarily inefficient tactic that will save a pittance but ensure that many communities will have greater costs and hobbled mail delivery. And of course, thousands will lose their jobs.  Here is a similar take on the impact of the Postal Accountability and Enhancement Act, including a video on how rural America will be hurt.

I can only hope that these rural folks will gain a sense of irony. We're talking mostly red state America, the ones that want government out of their lives, the ones who think private firms will always provide better service. As the PO closings continue, it is they who will pay more and get less. Just don't tell me our government is doing this. That "Accountability Act" of 2006 wasn't passed by Congress, it was passed by Republicans in Congress. And those same Republicans know how their low-info voting base works: Fox and others will try to pin this on Obama. They will use it as more evidence of government ineptitude. They won't tell you it was their own legislation, signed into law by George Bush, and that it was meant to bring down the USPS. 

Low Wages are Crippling Us

Since posting on the problem of suppressed wages on April 25, I've noticed others have posted on the subject and the problems the US* has created for itself by squeezing the incomes of the middle and working class. Nice to know they got my memo. The paste-up below is from Morgan Housel at Motley Fool. Nice write up, Morgan.

Nearly every recent survey asking Americans about their most pressing concern points to the same answer: a job. People are upset about taxes, politics, deficits, and wars, but until you can clock in five days a week and get a paycheck every other Friday, almost nothing else matters.

The good news: Jobs are starting to come back. About 3.3 million more Americans are working today than were just two years ago. That's great from a social perspective. People are going back to work and regaining dignity. Let's hope it lasts. 

But even if it does, it might not be enough to fuel a strong recovery. What drives the economy isn't necessarily jobs -- it's people's ability to save and spend money. And even though jobs are coming back, average weekly hours and wages, by and large, are not. More people have jobs than did a year or two ago, but we're working fewer hours, for barely more money, than before the recession began.

The average private-sector employee worked 34.3 hours per week this year, according to the Bureau of Labor Statistics. Five years ago, the average workweek was 34.7 hours long. That might sound like a small difference, but it adds up fast. Working more hours means bigger paychecks, which means more saving and spending, which drives economic growth -- just like adding new jobs would. According to UBS economist Sam Coffin, every one-tenth of an hour increase in an average private-sector workweek is the equivalent of adding 320,000 jobs. So if employees were working the same number of hours today as they were five years ago, the increase in spending would be like having an additional 1.3 million people employed -- enough to push the unemployment rate well under 8%. 

Then there are wages. From the end of World War II through the late 1990s, average real (after inflation) hourly earnings increased 1.8% a year, and growth coming out of recessions was usually stronger than that. Not this time. Average real hourly earnings have been essentially flat over the last several years. If wage growth followed its historic growth rate from 2009 through today, the average worker would be earning almost $1 an hour more than they are now. The additional spending that would generate is the equivalent of some 2 million new jobs in today's economy. 

All of this underlines something important about today's jobs market: A disproportionate number of jobs being created are for low-wage, part-time work. According to a recent Bloomberg Briefing, 41% of jobs created since 2010 are from "low-wage" sectors like retail and hospitality, even though such sectors only make up 29% of the total labor force. When government job losses are factored in, 70% of all job gains in the last six months came from low-wage sectors. In March, the notoriously low-wage restaurant and food-service industry added 37,000 of the 120,000 total jobs created for the month. "Administrative and waste services" made up another 15,000 of the total (though month-to-month figures can be murky). 

Measured by the number of jobs alone, our employment recovery has been extraordinarily weak. But, when you factor in the quality and pay of the jobs that are bouncing back, it's been downright abysmal. When it comes to spending and stimulating the economy, creating 3.3 million new jobs today might be the equivalent of several hundred thousand jobs in years past. That's a dark thought when thinking about our future.....

*Actually, it can be problematic to use "country" or "nation" as the unit of analysis; the United States is an abstract concept.The decision to promote policies that benefit the rich is not done by a country, or even a government, but by certain specific individuals within the government and others who support them. Using expressions such as "the US believes" or "the American people demand" are clumsy but often effective simplifications. People who conflate the two parties and claim that "politicians" got us in this mess have a perverse devotion to symmetry and are intellectually lazy.