^ center left pact ? unity in New York as Bill Clinton swears in mayor Bill deBlasio

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By asking Bill Clinton to swear him in as New York City’s new Mayor, Bill deBlasio has already made history. On this one move, deBlasio has assured that the Democratic Party will not split between wings “Labor’ and “Centrist.”

This is good news for all Americans who want to see economic progress come to their lives, not just the very favored top earners. Many Americans — myself included — are pushing legislation and referenda to relieve the huge rush of money to the top, money away from everybody else. These moves cannot take the field as an opposition movement within the only political party placed to bring them about. Bill deBlasio and Bill Clinton have signalled that they understand this and will move forward as Democrats together. The initiatives the two men agree on could not be more vital :

1.raise the Federal minimum wage to $ 10.10 n hour and index it to inflation.
2.protect unemployment benefits for long-term unemployed, many of whom have been without work so long that they already require job retraining in order to maintain skills currency
3.commit all the Federal spending needed to repair and improve America’s infrastructure
4.maintain the Federal food stamp program, do not cut funding for it

To which I could add the following :

1.fully staff the National labor relations baord (NLRB) to monitor and protect the organizing and bargaining rights of workers in organizable industries
2.make it an unfair labor practice to (a) reduce workers’ hours to part-time levels so as to avoid paying benefits or providing health insurance (b) make such workers “independent contractors” rather than W-2 employees
3.extend the “earned income” credit to incomes up to 150 % of Federally defined “poverty” level.
4.pass a comprehensive immigration bill that provides all undocumented immigrants other than those with a felony criminal record a pathway to citizenship, and immediately grant social security numbers, access to drivers’ licenses, and access to health care to all such immigrants.

The initiatives that deBlasio and Bill Clinton jointly advocate, and those that I have added to the list, purpose to do the right thing by many millions of our neighbors; they will grow the economy strongly. Did we need Jeb Bush –a Republican — to point out, as he did at last year’s CPAC Conference, that undocumented immigrants are a boon to the economy, in the work that they do and, yes, the taxes that they pay ? That by their young demographic, they help rescue the Social Security fund ? Jeb Bush said that. Why it needed saying, I’ll never understand. It’s common sense ! The economy is ALL of us. If millions cannot participate in it except at the margins, the economy suffers. Time and again I have editorialized that consumer spending = two thirds of our ENTIRE economy. You want jobs created ? Consumer spending creates them. businesses do not hire people because taxes drop. They hire people because demand increases for their products and services.

Why can’t the funders of today’s Republican party get this ? The businesses that have pushed most current Republicans to fight every move that puts more money into more people’s budgets are blind to their own interests. Any business exec with half a brain knows that his or her employees are the strongest asset, that employee turnover is a huge and largely unnecessary expense; that prosperous and loyal employees buy what they make or the services they provide; that they spread the company’s good reputation by word of mouth to everyone they talk to.

May I add, as I’ve said before, that if the Republican-funding business execs don’t like unions, don’t make your workers organize one in order to get paid what they deserve ? Otherwise, expect a union and all the hassle, drama, and — unhappily — oppression and even intimidation that comes with union organizing and job actions.

Granted that almost all of the new job descriptions being formed in the technology world are not union work. They’re as individualistic as innovation in the raw always is. New economy jobs also pay well. There’s no lack of venture funding for innovation work. I also note that many, maybe most, innovation venturists work with the Democratic party now. They’re not the breed of CEO that funds self-defeating money PACs.

In Boston, in our Mayor election, these innovation capitalists and the start-up world that they fund split with union and union-organizing interest groups about which man to support. Nor do we have available a Bill Clinton to swear in Marty Walsh and reunify our state’s Democratic party. But the issue that divided Boston’s Democrats in the mayoral election wasn’t part of the economic progress agenda that Bill Clinton and Mayor deBlasio have shaken hands on. Here the issue was the part that public worker unions should play in the City’s budget and what level of influence they should have on City policy governance. On the economic progress agenda, Walsh and John Connolly fully agreed.

—- Mike Freedberg / Here and Sphere

PS : many of the innovation venturists and execs who supported John Connolly were and are of a mind to support some Republican candidates, at least locally in Massachusetts; possibly even nationally. Why the current Republican consensus cannot connect to these innovation capitalists, I’ll never understand. It would help, of course, if the party could ditch the lifestyle bigotry and lose the opposition to women’s reproductive rights. Fortunately, those obstacles mine no ground in Massachusetts. Charlie Baker, if he hopes to be our Governor, is free to embrace innovation capitalism, discard Scrooge agendas, wave off the anti-immigrant talk, and embrace diversity, economic dispersion, and the future. He might just do that. His excellent plan to end homelessness in Massachusetts is a promising first step.



^ destructive : Governor Pat McCrory of North Carolina

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There has always been money in campiagns and in governance. This we understand; governments chiefly are formed and operate to move money from here to there. Campaigns cost money too. Community conversations about how to move money require money, for media and for communication services.

All of the above we know, we accept, we can agree to. But as my Dad used to say, “too much of anything is a poison.” Too much money kills off the civic events. We saw this in the recent Mayor election, where a majority of the money spent by the two finalists came from “outside” PACs, some of them secret. We see it in Washington, where big-pocket book PACs threaten Congressmen, put challengers in the field to run against them, and inundate elections with all manner of misleading — deceptive — palpably false — advertising to promote the PAC’s specific interest and, so doing. have brought the Federal government almost to a standstill : a condition that many of these PACs openly seek. the best-funded and greediest of them want to roll back 80 to 130 years of social progress . They want government out of thed way and unfunded so that their donotrs can do want they want with America’s money.

This we have seen and tasted and found most foul. It is most foul. Our society is everybody who lives in it — nothing less. A raid upon the inclusion of everyone is sedition.

Somebody in my twitter feed recently said, “the rich employ FOX to set the middle class against the poor.” True. And after they come for the poor, they will come for the middle class. You don’t like it ? Too bad about you.

It need not be. There’s another saying that seems germane right now : “you can fool all of the people some of the tome and some of the people all of the time, but you can’t fool all of the people all of the time.” Abraham Lincoln said that. He knew the truth of it so well, because no president in our hiostory was the object of so much vitriol amd so many self=seeking lies as was he. Eventually the voters will wake up to the fraud that the greedy are perpetrating upon them, and all the PAC money in the world will then just prove the point.

But in the meantime what damage is abroad in our land ! Our economy is hugely tilted toward the top earners. 95% of us have seen oure arnings stay still, por dtrop, in trelation to procers. Millions of us have been out of work for years; skills have vitiated; how will they now start over ? As for the lost years, the years of penury or bare survival, they can’t be made good. An entire genmeration of workers — maybe 20,000,000 of us — has been hammered by student debt that can’t bne discharged in bankruptcy, weakened by under-employment, injured by stress that hurts one’s health, left almost helpless by having no helath insurance. Barbara Ehrenreich says that these millions of us have been “nickeled and dimed.” She nails it.

Worse still, in the current tone of our politics, these 20,000,000 — and many millions more whose home in come amounts to just a little more, enough to get by but not to save or move up — don’t get heard. Who speaks for those of us who most need a speaker ? A few do. Senators Elizabeth Warren and Bernie Sanders speak for America’s vulnerable. I’m not sure they have much effect, however. The huge monery greed-PACs can’t trouble warren in Massachusetts or dsanders in Vermont, and they can’t trouble Barbara Boxer in California or Chris Murphy in Connecticut. The Northeast of our country — its richest part, ironically — still has a social conscience and honors the social compact that america used to take for granted. But outside the Northeast (and even in some areas of the Northeast), the greed money pressures, intimidates, forces legislators to kick most constituents to the curb.

Among the worst offenders is the Governor whose picture heads this column : Pat McCrory of North Carolina. His entire legislative program has been pushed by — much of it drafted by — seditious big money organizations. Two more favorites of greed money are Sam Brownback of Kansas and Rick Scott of Florida. Brownback wants all state taxes gone; Rick Scott cuts social services to the poor. Are these guys nuts ? What sane politician would purposely alienate a huge number of voters ? Well, politicians do that if the money demnds it of them. It’s hardly likely that Governors would dare to propose eliminating state income taxes, file vote suppression legislation, cut teacher staffs, wipe out union benefits, make abortion all but unobtainable, harass immigrants, cut off unemployment pay, engage private prisons, loosen gun control, or cut funding for infrastructure — were it not that the vast money pools insist upon it, demand it, swamp their state with demagogic advertising that demonizes those who need state services, health care, voting rights. This is the reality in those parts of america where sedition has a paymaster with unlimited funds to pay. Candidates compete to see who can express the basest contempt for the most people. Why ? Because that’s where the campaign donations are.


^ sedition : Rick Scott of Florida

America is losing its might to these paymasters. Companies can’t get new hires who have the technology skills to handle evn entry-level jobs. Kids don’t learn anything about American history or citizenship. Parents are too busy working two and three jobs to give their kids the reading time — the intellectual and citizenship challenges — that kids need. Immigrants, our nation’s very essence and its source of innovation, new ways, striving, and heroic endurance, were once valued and welcomed. Now they are disliked and pushed out. Self-serving religionists push their voices into the news, gain attention for their bigotry and outrage, thus reaping huge donor dollars for theur “ministries.” We are mounte-banking our society, collapsing its organs. We are killing our future chunk by chunk.

The Supreme Court has ruled that corporations have free speech rights; that money for political advertising is protected as free speech’s enabler. It’s hard to find a workable way to didagree that does not impede legitimate expenditures for speech. I have yet to see a Constitutional amendment for this purpose that won’t throw the baby out with the bath. The most effective way is to fight the sedition on its chosen field of huge money demagoguery. Where are the social compact hedge funders ? The income fairness billionaires, the civil rights tycoons, the urban reform grandees ? There are some. There are more than just some. It’s time for them to commit huge money against a sedition that is destroying millions of families, society’s decency — the economy itself — day by day, election by election.

Occasionally the people can defeat the armies of reaction. Rick Scott ;looks likely to lose in 2014. Tom Corbett, the vote-suppression avatar, seems in big trouble in Pennsylvania. that’s good; but it is not enough. It’s time for the Cavalry of progress to rescue us.

—- Michael Freedberg / Here and Sphere



^ new regulations governing big bank trading almost in place : Treasury Secretary Jacob Lew announcing

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Twice, since Here and Sphere’s inception last May, we have editorialized in favor of raising the legal minimum wage. To those editorials I refer you, if you’re interested : you’ll find them in our Archives section. Today, however, I want to expand upon the economic realities and policy choices that command our support for raising the minimum wage substantially. I understand that economic talk can be boringly statistical. But would you prefer exciting talk that was false or a fantasy ? After all, we’re talkiing the family’s income here; so I hope that you and I can be real for a while ? “Yes,” you tell me ? Good. Now for some facts :

1.Many political economists recently have written about the rapid increase of income inequality in America. Money is flowing ever faster to the top 1 % of earners and away from the bottom FIFTY (50) percent. Today the top 1 % of earners take in ten times greater a pecentage of America’s entire national income than it did fifty years ago. If current increase rates continue, the top 1 % of earners will soon control more income than the bottom SIXTY percent.

2.Incomes for the bottom 60 % of earners has barely grown at all in the past 30 years. That of the top 1 % has increased almost 100-fold. (Former Clinton economic adviser Robert Reich recently opined on this point. His column is well worth reading.)

The trend I have outlined has serious implications not just for the bottom 60 percent of earners bit for the entire economy. People whose incomes aren’t growing much at all can’t grow the economy without taking on more and more debt. The advent of credit cards in the late 1970s began a splurge of plastic money that eventually grew the spending economy by a full 20 percent of GDP. That splurge was the only reason that most Americans were able to grow their spending and thus grow the economy. But that splurge ended abruptly in 2008, and total credit card debt has fallen in almost every month since. Because credit card spending constituted 20 % of America’s 2008 GDP, a fall of merely 10 % in total credit card debt shaved a full 2 % off total GDP. Little wonder that since 2009 our economy has grown a slow 2.7 %; and little wonder that with consumer spending — which totals 2/3 of the ENTIRE economy — not growing at all, job growth has been slower than needed.

So the questions are ; ( 1 ) how are we going to get most family incomes growing again ? ( 2 ) how are we going to grow the economy fast enough so that businesses need to hire more people ? and ( 3 ) how can we assure that these new hires will benefit the economy rather than impede it ?

To these questions the Republican party, ever since the Bush ’43 years at least, has had one answer only : lower taxes for everyone. For most of us, so that we can spend more; for the top 1 %, because they are businesses owners, and the more money that business owners have, the more jobs they will create.

The first part of the GOP policy — lower taxes for most of us — did not work beause the added money in most of our pockets was far outstripped by the rush of income to the top 1 %, by price increases, and by credit card debt payments. The second part of the GOP policy was false to begin with. Businesses do NOT create more jobs because their owners have more money. They increase jobs because there is increased consumer demand for their products and services. If businesses see more money come in, while demand for their offerings barely grows, they put that money in the bank. They don’t invest it in new plant or research. They park it.

Today this huge accumulation of “parked money” — economists estimate it at FOUR TRILLION dollars (!) — overhsngs our economy like a mountain of tumors. And there it will stay, until the factor that totals TWO THIRDS of our entire economy — consumer spending — picks up significantly.

Parked money robs the economy in two ways. First, it does not spend and so generates no hires. second, it attracts money and financiers to its management : and reecently that has meant using parked money to speculate in trading markets, in search of arbitrage, the most useless of economic events. “Arbitrage” is simply the differences in the value of money in one place, or one time — or both — rather than another resulting from inefficiencies in communication. At the time of the Napoleonic wars — 200 years ago — when the Rothschilds first realized that profits could be made in arbitrage by acquiring information more rapidly than their trading rivals, arbitrage forced the world’s money markets to work together : out of which our present, world-wide economy has developed. Today, however, the inefficiencies that profit an arbitrageur are slight, and the huge amounts of money chasing them a damaging diversion from uses of money far better for the people who live in this arbitraged economy.

What is needed now are ( 1 ) to flow money back into the paychecks of consumers and ( 2 ) to tax the advantages of arbitrage so that investment of money now parked becomes more profitable than arbitraging it.

It really is that simple. We do the ( 1 ) by increasing the minimum wage so that full workers don’ need public assistance to make ends meet and can even earn enough to participate in the discretionary spending economy ; by banning so-called “payday loans” and other loan schemes that prey on the survival conditions in which many of us live; and by assuring workers paid sick leave and single-payer health insurance, so that most of us don’t have to stress over life situations that deflect our work vigor and enthusiasm. If we then do ( 2 ) , we make it clear to those with large money that it benefits them to invest it, not park it, and to hire — and pay decently — knowing that everyone who is hired can then become an effective consumer of what invested money produces.

The more of us who are able to consume effectively, the stronger the economy. One reason why this is so is that someone who earns 50 times as much as another doesn’t spend 50 times more money. He or she spends maybe 30 times more. The rest of the money is saved, either out of prudence or because after one has bought one’s luxury stuff there isn’t anything else to buy. For most of us, however, almost every dollar available needs be spent, on necessities and on things useful to a normal life, such as a smarter suit of clothes (so that one looks successful, which is often needed in the businesses world) or a newer car (which won;t need repair down time any time soon)>

The above is, more or less, the economic policy of today’s Democratic Party. Apologists for the GOP policy sometimes call Democratic economic policy “socialism.” It is nothing of the kind. It is simply smart commercial regulation, an application of capitalism to the real deal rather than to what isn’t real at all. Which is why we prefer it.

Not to mention that paying full time workers a decent and useable wage is the right thing to do.

—- Michael Freedberg / Here and Sphere



^ Walt Michalik of Roslindale : a question that went right to the heart of economic matters

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Last night, at Hyde Park Main Streets’s tribute to City Councillor Rob Consalvo — retiring after 12 years service — I ran into an old friend, Walt Michalik, who lives in Roslindale and supported me the one time that I put aside political work for others to become a candidate myself. That was 1986. I had known Walt, and, very early on, as I visited “people of influence” in my “Rozzie” neighborhood seeking support, before I actually made a decision to run, I knocked on his door. (He was, in fact, my first such visit.) Walt was a Democratic activist. He knew that I was a Republican. So he asked me : “what is your opinion of the prevailing wage law ?”

For those who don’t know, the Prevailing Wage law, also known as the Pacheco Law, requires that on all State-funded contracts, the contractor pay his workers, whether they are union members or not, the same hourly amount that prevails in union-labor contracts. It wasn’t a law that I had thought much about and wasn’t something that I had planned to base my candidacy upon. So I didn’t answer Walter right away. But I knew a lot of ironworkers well, and I knew that they spent their big paychecks and thus brought a lot of prosperity to a lot of businesses. So an answer came to me :

“You know what, Walter ? I don’t see how taking money out of the pockets of workers helps the economy.”

Walter shook my hand, a handshake of solidarity.

Well, that was then. A generation has passed; and the answer that I came up with that afternoon opened the door for me to understanding how a democratic economy works — and should work ; it begins with the customer.

1.The less customers a business has, the less it prospers.

2.The less that a person earns (or receives by way of public assistance if that he needs), the less of a customer he can be.

3.An economic policy that impedes worthwhile money from accruing to most people defeats itself.  This axiom is one big reason why I support the welcoming immigration policy that until the past 90 years or so was America’s boon. Every immigrant is a potential customer and this grows the economy. This same axiom is why I support Massachusetts’s impending minimum wage hike. The more that workers earn, the more they can spend.

Quite frankly, the above is my ENTIRE economic policy. All else is commentary and implementation.

One hears the political Right talk about businesses being “job creators.” But businesses CANNOT create ANY jobs unless there are customers for its products or services. The more customers, the more jobs. Angel investors for start-up businesses want to know, first of all, who and how large will be the “market” — i.e., the customers — for that start-up’s offerings. No “angel investor” I have ever presented to requires the business plan to pay workers so little that they need public assistance to make ends met. Just the opposite ; angel investors want the start-up’s workers paid enough that they will stay, not leave, and thus (1) see the venture through to success and (2) avoid the huge costs, in money and time, of hiring and training replacements. I also know no “angel” investor who doesn’t want a start-up’s workers to not have paid sick time. Angel investors know that life is hard enough; a start-up shouldn’t make things harder for its workers than they already are.

Just who, then, does the political right speak for as it pursues “job creator” corporate tax breaks and opposes both workers’ wage hikes and the social safety net ? It doesn’t speak for workers, obviously, and it doesn’t speak for venture capitalists or the management of smart businesses. So who then ?

Speculators figure prominently among those who push this destructive agenda. Stock market funds often push publicly owned companies to cut back everything and anything in search of maximum immediate buy and sell gains. For the sake of purely paper windfalls these money poolers would trouble every other interest in our society. Unhappily, these money pools have drawn to them more and more money that, instead of investing in economic innovation, which bears vast risk and takes long time to accrue, seek sharp-fingered quickie hits; arbitrage — the most economically useless item in the entire money picture.

Even the money-lender has his place in an economy. Yes, he seeks interest on his money and does no work to earn it other than to have it to lend. But the money lender knows that if the borrower doesn’t prosper, he won’t get paid back. Yes, the lender may, if not paid back, claim the borrower’s assets as security; but no money lender wants those assets; he wants his interest and he wants his principal repaid.

For the stock trader, however — the arbitrageur — it;s just the opposoite,. He DOEs wnat that asset. He buys it at current value and dumps it at whatever higher value he can squeeze out of it by whatever means and as soon as possible, even if it means destroying the business and laying off its workers. This is what Bain Capital did, famously, during Mitt Romney’s partnership there and was a major reason why his candidacy for senator in 1994 earned the enmity of a majority of voters.

Not all stock buyers and hedge funders pursue a strategy of profit by desruction. Many investors buy in or the long term — and the huge success of a long term investment, wisely chosen, says all that needs be said : look at Warren Buffett, who has become a multi- billionaire by buying and holding, forever it seems, well chosen businesses whose management he supports and whose growth — in the classic economic manner I have outlined — he encourages. But for every dollar invested with the Warren Buffett sort of investor, 1000 dollars are invested these days with swift destroyers.

It is difficult to conceive legislation that will curb the economics of profit through destruction, that will not also limit the free movement of capital to positive purposes. But we are not helpless as a society to limit the impact of arbitrage money. We can impose a strong societal disapproval upon those who would profit by hurting all who stand in profit’s way. We can continue to angel-fund innovation businesses and support their entrepreneurs — and approve them socially too, social approval being one of a society’s strongest ways of policing good works and bads. At the same time, we can make it quite clear that he who would take money out of the pockets of workers lies beyond the pale of approval.

You don’t have to be a Wal-mart. You can be a Costco. It is an outrage that we allow low-wage employers to leave their staff no choice but to need taxpayer dollars in order to make ends meet. It’s also a no-growth policy, maybe even a recession policy. It is stupid. And immoral.

So how do we fight this stupidity ? Simple. It really does start with the question that Walt Michalik asked of me on a February afternoon 27 years ago.

—- Michael Freedberg / Here and Sphere