Showing posts with label Bill Clinton. Show all posts

Tuesday, July 27, 2010

. The Great Decoupling of Corporate Profits from Jobs

Robert Reich of the Roosevelt National Advisor...

Published on Tuesday, July 27, 2010 by robertreich.org

The Great Decoupling of Corporate Profits from Jobs

Second-quarter earnings reports are coming in, and they're making Wall Street smile. Corporate profits are up. And big American companies are sitting on a gigantic pile of money. The 500 largest non-financial firms held almost a trillion dollars in the second quarter, and that money pile is growing larger this quarter. Profits that plummeted in the recession have bounced back. Big businesses have recovered almost 90 percent of what they lost.
So with all this money and profit, they'll start hiring again, right? Wrong - for three reasons.
First, lots of their profits are coming from their overseas operations. So that's where they're investing and expanding production.
GM now sells more cars in China than it does in the US, but makes most of them there. The company now employs 32,000 hourly workers in China. But only 52,000 GM hourly workers remain in the United States - down from 468,000 in 1970.
GM isn't just hiring low-tech assembly workers in China. Last week the firm broke ground there on a $250 million advanced technology center to develop batteries and other alternative energy sources.
You and I and other American taxpayers still own over 60 percent of GM. We bought GM to save GM jobs, remember?
GM officials say no American taxpayer money is being used to expand in China. But money is fungible. Because of our generosity, GM can now use the dollars it doesn't have to spend in the United States meeting its American payrolls and repaying its creditors, for new investments in China.
Second, big U.S. businesses are investing their cash in labor-saving technologies. This boosts their productivity, but not their payrolls.
Last Friday, for example, Ford reported a $2.6 billion second-quarter profit. The firm is already more than two-thirds the way to equaling its record 1999 profits. But due to labor-saving technologies, Ford now has half as many employees as it did a decade ago.
Wall Street analysts are happy with Ford's "commitment to keeping capacity in check," according to the Wall Street Journal. Ford shares rose 5.2 percent Friday. "Keeping capacity in check" is the Street's way of saying "no new hiring." In fact, the Street is advising investors to sell the stocks of companies that talk openly of expanding capacity.
Finally, corporations are using their pile of money to pay dividends to their shareholders and buy back their own stock - thereby pushing up share prices.
Last Friday, GE announced it would raise its dividend by 20 percent and reinstate its share-buyback plan. It's GE's first dividend increase since the company cut its dividend in early 2009. As a result, GE shares are up more than 5% in the past few days.
Bottom line: Higher corporate profits no longer lead to higher employment. We're witnessing a great decoupling of company profits from jobs.
The next supply-side economist who tells you companies need more incentive (i.e. lower taxes) before they'll hire is living on another planet.
The reality is this: Big American companies may never rehire large numbers of workers. And they won't even begin to think about hiring until they know American consumers will buy their products. The problem is, American consumers won't start buying against until they know they have reliable paychecks.

Saturday, June 19, 2010

Family Values Exemplified by Obama

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Washington Post

On Father's Day, hypocrites are all in the family

By Colbert I. King

Saturday, June 19, 2010

Family, marriage and the contribution of fathers come together as topics for reflection on Father's Day. So I'd like to know why Barack Obama, a husband and a father in a family structure that encompasses bonds deemed essential to our society, is constantly and savagely attacked by conservative leaders whose personal circumstances undermine the family values they espouse?
Consider Obama: Raised by a single mother in a middle-class family where hard work and education were watchwords, Obama graduated from two of the top schools in the country, Columbia University and Harvard Law School. His legal scholarship was recognized when he became the first African American president of the Harvard Law Review. He married and, equally important, has stayed married to Michelle Robinson, a Princeton graduate and Harvard Law alumna. He lives with his wife, two children and his mother-in-law. Obama: constitutional law professor, civil rights lawyer, state legislator, U.S. senator, 44th U.S. president, family man.
Now let's turn to Obama's foremost critics: Rush Hudson Limbaugh III, Newton Leroy Gingrich and Sarah Palin.
Limbaugh and Gingrich have said too many negative things about Obama to count. "I want him to fail" (Limbaugh) and "secular socialist" (Gingrich) are just two of their attacks. Yet two of the nation's loudest proponents of family-values issues are serial husbands. Between them, the two men have had seven wives.
Limbaugh, who dropped out of college after one year, married his first wife, a sales secretary, in September 1977. She filed for divorce three years later; it was granted in July 1980. Limbaugh next married an usherette in 1983; they divorced in 1990. In May 1994, he married an aerobics instructor he met online. They separated in June 2004 and divorced that December.
Two weeks ago, Limbaugh married a Florida party planner. He's still wedded to her as far as I can tell.
Gingrich is one nuptial behind Limbaugh. But he started earlier. In 1962, at age 19, Gingrich married his 26-year-old former high school geometry teacher. Gingrich left her in the spring of 1980. He did return to see her at the hospital where she was getting treatment for cancer. He was there to discuss divorce terms. Formally divorced in 1981, Gingrich remarried six months later.
That marriage lasted until 2000. By his own admission, Gingrich started an affair with a woman 23 years his junior during his second marriage. It was around the time he was taking Bill Clinton to task over Monica Lewinsky.
Gingrich's second marriage ended in 2000, and he married his girlfriend the same year. The current Mrs. Gingrich is still with him, as far as I can tell.
Gingrich and Limbaugh, national icons in the conservative movement -- and mockers of this country's most traditional and honored symbol of commitment: holy matrimony.
But what would a Father's Day discussion of the nuclear family and a moral society be without bringing into the picture Mrs. Family Values herself, Sarah Palin?
The same Palin who last week said of President Obama, "It sounds like the inner circle that he has are some Chicago thugs." Well, Palin knows lawbreaking, too.
Her sister-in-law, Diana Palin, half sister of the former governor's husband, got a 15-month sentence this year. Burglarizing the same Alaska house three times for money to satisfy a drug habit is the kind of thing that can get you arrested. Thuggery? How about Sherry Johnston, the mother of Levi Johnston, the high school dropout who fathered Palin's grandson? She was arrested and charged with selling drugs; after pleading guilty to one count with intent to deliver the drug OxyContin she was sentenced to three years.
Because of her medical condition, the woman who was once Bristol Palin's future mother-in-law was released from prison to home confinement, where she wears an ankle-monitoring device.
And the whereabouts of 19-year-old Levi on this Father's Day weekend? His bonds with the Palins were so tight, he said on TV, that Sarah and her husband, Todd, allowed Levi to live in their house with Bristol while they dated. Conservative family values?
Levi can be found on the cover of Playgirl magazine, his nude body blocked from full exposure by his strategically placed arm.
And to think, as we prepare to celebrate this day of men and family, Limbaugh, Gingrich and Palin have the unmitigated gall to look down their noses at our president.

Tuesday, May 4, 2010

Fact Checking Found Lacking Says FAIR Media Advisory

Media Advisory

Checking ABC's Factcheck
Scrutiny of This Week better in theory than practice

5/4/10

On its surface, the announcement by ABC's This Week that the website PolitiFact would monitor the show's content was a welcome development, despite the obvious downside that the Web-only factchecking would deprive the show's TV audience of needed correctives. But an evaluation of the record thus far suggests that even this limited attempt to test the accuracy of claims made on the show has focused largely on trivial points and ignored more substantive and controversial arguments.

So far, the PolitiFact assessments of This Week--which started on April 11, thanks to a suggestion from New York University professor Jay Rosen--have focused on relatively trivial matters. On one program, Bill Clinton said, "I never had a filibuster-proof Senate." PolitiFact determined this was true. Was anyone suggesting otherwise? Republican Sen. Jon Kyl noted (4/11/10) that Barack Obama had joined with other Democratic senators in an attempt to filibuster Supreme Court nominee Samuel Alito, which PolitiFact also judged to be true (and which also is not subject to much debate). When Secretary of State Hillary Clinton responded to a question about a Mideast peace plan by saying, "I don't answer hypotheticals," PolitiFact attempted to determine whether that stray comment was true.

Not every assertion analyzed has been so trivial. When Defense Secretary Robert Gates appeared on the program (4/11/10), he was asked about a video released by Wikileaks that showed U.S. helicopters firing on a group of Iraqis in 2007, killing a dozen people. Gates responded by saying that "the video doesn't show the broader picture of the firing that was going on at American troops."

PolitiFact judged that statement "Mostly True," based in part on the military's previously disclosed investigation of the incident, which claimed that weapons were found near the victims' bodies. To its credit, PolitiFact quoted Salon's Glenn Greenwald, who argued that Gates' response was "sufficiently vague that it can't be called factually false, but is quite misleading." Greenwald noted, for instance, that a firefight somewhere else would not justify the attacks portrayed in the video, and that those killed in an apparent attempt to retrieve some of the victims could not plausibly be considered as posing a threat to U.S. forces. So what would make Gates' words "mostly true," then?

This kind of analysis feeds the impression that everything else on these particular programs was more or less true or uncontroversial. But on many of these same episodes of This Week, guests and panelists have made puzzling comments that cried out for greater scrutiny or explanation. On April 18, for instance, Wall Street Journal columnist Kim Strassel seemed to echo a right-wing talking point that the Democratic Wall Street reform bill will actually create additional taxpayer bailouts of financial giants. Fellow panelist Al Hunt disagreed. Was one of ABC's panelists wrong about this, or was it a simply a disagreement over a matter of opinion?

PolitiFact had weighed in on this question already (4/14/10), determining that Republican Sen. Mitch McConnell's claims about bailouts were false: The language of the bill, as it was written at the time, concerned a special fund paid for by the industry that would be used to liquidate failing institutions--which is very different from being bailed out. So why not step in and clarify this argument between the panelists?

When host Jake Tapper interviewed former President Bill Clinton, he asked about regulation of Wall Street derivatives and the separation of banks' commercial and investment businesses. This led Clinton to bring up the repeal of the Glass-Steagall Act, which critics argue led to some of the consolidation in the financial services industry over the past decade. Clinton, though, argued that the deregulation--championed by several Republicans and by the banking industry--actually increased regulation: "There was already a total merger, practically, of commercial and investment banking, and really the main thing that [the repeal of] the Glass-Steagall Act did was to give us some power to regulate it." This is an unusual suggestion--that a major deregulatory policy was in fact a move towards greater regulation--and something that deserved greater examination.

On the April 25 show, ABC pundit George Will declared his support for the construction of a wall on the U.S./Mexico border: "Build the fence, do what McCain suggests, and you'll find that the American people are not xenophobic, they are not irrational on this subject, but they do want this essential attribute of national sovereignty asserted." When pressed by panelist Cynthia Tucker about the cost of this project, Will quipped: "It's a rounding error on the GM bailout." The border fence project has been marked by delays and cost overruns; the Government Accountability Office released an evaluation last year (AP, 9/18/09) that found that it could cost $6.5 billion to maintain the fence over 20 years—on top of the $2.4 billion spent on 600 miles of fencing so far. A 2007 report by the Congressional Research Service estimated that a 700-mile fence could cost $49 billion over 25 years (San Francisco Chronicle, 1/8/07). ABC viewers could have benefited from some sort of clarification on this point.

It goes without saying that the ABC/PolitiFact effort could be a step in the right direction. Their network competitors have shown no interesting in following ABC's lead; NBC's Meet the Press host David Gregory (Washington Post, 4/12/10) said that he was not interested: "People can factcheck Meet the Press every week on their own terms." CBS's Face the Nation host Bob Schieffer (Yahoo!News, 4/22/10) said that "everybody's welcome to factcheck us all they want," adding: "I kind of think that by the time we get around to factchecking...we'd already be factchecked."

Those dismissals are, at the very least, alarming. But it's little comfort that an effort that could in theory produce more rigorous factchecking has so far offered so little.

Wednesday, February 17, 2010

A Thought on Evan Bayh and Partisan America

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Robert Reich is Professor of Public Policy at the University of California at Berkeley. He has served in three national administrations, most recently as secretary of labor under President Bill Clinton. He has written twelve books, including The Work of Nations, Locked in the Cabinet, and his most recent book, Supercapitalism. His "Marketplace" commentaries can be found on publicradio.com and iTunes.

A Thought on Evan Bayh and Partisan America

Tuesday, February 16, 2010

Not long ago I was debating someone on television. I thought the discussion was going well until the commercial break when a producer said into my earpiece “be angrier.”

“Why should I be angrier?” I asked him, irritated that he hadn’t appreciated the thoughtfulness of debate.

“That’s how we get channel surfers to stop and watch the program,” the producer explained. “Eyeballs are attracted to anger.”

At this point I lost my temper.

The incident came back to me when I heard about Evan Bayh’s decision to leave Congress because he felt it was becoming too partisan. The real problem isn’t partisanship. Bold views and strong positions are fine. Democratic debate and deliberation can be enhanced by them.

The problem is the intransigence and belligerence that has taken over Congress and much of the rest of the public — a profound distrust of people “on the other side,” an unwillingness to compromise, a bitterness and anger disproportionate to issues being discussed.

Anger makes good television, but it’s fake and it teaches Americans the wrong lessons. Anger also can win elections (Senate Republicans haven’t given Obama any votes because they’ve been eyeing the 2010 midterms since he took office, hoping for a rerun of 1994), but partisan anger is just as fake, and it undermines the capacity of our democracy to do the public’s business.

By the way, I was on CNBC this morning, and the subject of discussion was Bayh’s decision. No producer prodded me to be angrier but Larry Kudlow introduced the segment by saying that I’d be “duking it out” with Steve Moore, who writes editorials for the Wall Street Journal. And when it came for us to discuss the gridlock in Congress, Larry continuously interrupted, saying the reason for the gridlock was Obama’s lefti-leaning agenda.

When this is almost all the public sees and hears about public issues, it’s no wonder Americans begin to think everything is an angry shouting match. Americans stop listening to each other. We retreat into small ideological bubbles and talk only with people who agree with us. We forget how much we have in common, and how important it is to get on with the task of making the nation better.

Monday, January 18, 2010

Flawed Bill Harms Health of Democratic Party

Image by Jeffrey Guterman via Flickr

Published on Monday, January 18, 2010 by Huffington Post
A Wake Up Call from Massachussetts

by Robert Kuttner

How could the health care issue have turned from a reform that was going to make Barack Obama ten feet tall into a poison pill for Democratic senators? Whether or not Martha Coakley squeaks through in Massachusetts on Tuesday, the health bill has already done incalculable political damage and will likely do more. Polls show that the public now opposes it by margins averaging ten to fifteen points, and widening. It is hard to know which will be the worse political defeat -- losing the bill and looking weak, or passing it and leaving it as a piñata for Republicans to attack between now and November.

The measure is so unpopular that Republican State Senator Scott Brown has built his entire surge against Coakley around his promise to be the 41st senator to block the bill -- this in Ted Kennedy's Massachusetts. He must be pretty confident that the bill has become politically radioactive, and he's right.

It has already brought down Senator Byron Dorgan of North Dakota, a fighter for health care and other reforms far more progressive than President Obama's. Dorgan championed Americans' right to re-import cheaper prescription drugs from Canada, a popular provision that the White House blocked. Dorgan, who is one of the Senate's great populists, began the year more than twenty points ahead in the polls of his most likely challenger, North Dakota Governor John Hoeven. By the time he decided to call it a day, Dorgan was running more than twenty points behind. The difference was the health bill, which North Dakotans oppose by nearly two to one. The fact that Dorgan's own views were much better than the Administration's cut little ice. He was fatally associated with an unpopular bill.

So, how did Democrats get saddled with this bill? Begin with Rahm Emanuel. The White House chief of staff, who was once Bill Clinton's political director, drew three lessons from the defeat of Clinton-care. All three were wrong. First, get it done early (Clinton's task force had dithered.) Second, leave the details to Congress (Clinton had presented Congress with a fully-baked cake.) Third, don't get on the wrong side of the insurance and drug industries (The insurers' fictitious couple, Harry and Louise, had cleaned Clinton's clock.)

But as I wrote in Obama's Challenge, in August 2008, it would be a huge mistake to try to get health care done right out of the box. Obama first needed to get his sea-legs, and focus like a laser on economic recovery. If he got the economy back on track, he would then have earned the chops to undertake more difficult structural reforms like health care.

Deferring to the House and Senate was fine up to a point, but this was an issue where the president needed to lead as only presidents can -- in order to frame the debate and define the stakes.

Cutting a deal with the insurers and drug companies, who are not exactly candidates to win popularity contests, associated Obama with profoundly resented interest groups. This was exactly the wrong framing. This battle should have been the president and the people versus the interests. Instead more and more voters concluded that it was the president and the interests versus the people.

As policy, the interest-group strategy made it impossible to put on the table more fundamental and popular reforms, such as using Federal bargaining power to negotiate cheaper drug prices, or having a true public option like Medicare-for-all. Instead, a bill that served the drug and insurance industries was almost guaranteed to have unpopular core elements.

The politics got horribly muddled. By embracing a deal that required the government to come up with a trillion dollars of subsidy for the insurance industry, Obama was forced to pursue policies that were justifiably unpopular -- such as taxing premiums of people with decent insurance; or compelling people to buy policies that they often couldn't afford, or diverting money from Medicare. He managed to scare silly the single most satisfied clientele of our one island of efficient single-payer health insurance -- senior citizens -- and to alienate one of his most loyal constituencies, trade unionists.

The bill helped about two-thirds of America's uninsured, but did almost nothing for the 85 percent of Americans with insurance that is becoming more costly and unreliable by the day -- except frighten them into believing that what little they have is at increased risk of being taken away.

All of this made things easier for the right, and left people to take seriously even preposterous allegations such as the nonsense about death panels. It got so ass-backwards that the other day Ben Nelson, who successfully held out for anti-abortion language and a sweetheart deal for Nebraska's Medicaid as the price of his vote, found himself facing a wholesale voter backlash.

Nelson began running TV spots assuring Nebraska voters that the Obama health plan is "not run by the government." That's one hell of a slogan for a party that relies on democratically elected government to offset the insecurity, inequality and insanity generated by private commercial forces. If not-run-by-government is the Democrats' credo, why bother?

So we went from a politics in which government is necessary to provide secure health insurance -- because the private insurance industry skims off outrageous middlemen fees and discriminates against sick people -- to a politics in which Democrats, as a matter of survival, feel they have to apologize for government. Thank you, Rahm Emanuel.

The budget-obsessives around Obama also insisted that most of the bill not take effect until 2013, so that all of the scary stuff gets three years to fester before most people see any benefit. Call it political malpractice.

Finally, the health insurance battle sucked out all the oxygen. When Obama made time to work the phones personally, it wasn't to enact serious financial reform (this was left to the tender mercies of Tim Geithner) or to fight for a real jobs program (deficit hawks Peter Orszag and Larry Summers got to blunt that one). No -- Obama got on the phone and met with legislators to round up the last vote or two for a sketchy health reform that crowded out far more urgent issues.

As a resident of Massachusetts, in the last two days I've gotten robo calls from Barack Obama, Joe Biden, Bill Clinton, Martha Coakley, and Angela Menino, the wife of Boston's mayor -- everyone but the sainted Ted Kennedy. In Obama's call, he advised me that he needed Martha Coakley in the Senate, "because I'm fighting to curb the abuses of a health insurance industry that routinely denies care." Let's see, would that be the same insurance industry that Rahm was cutting inside deals with all spring and summer? The same insurance industry that spent tens of millions on TV spots backing Obama's bill as sensible reform?

If voters are wondering which side this guy is on, he has given them good reason.

Looking forward, one can imagine several possibilities. Suppose Coakley loses. Obama and the House leadership may then decide that their one shot to salvage health reform after all this effort is for the House to just pass the Senate-approved bill and send it to the president's desk. They can fix its deficiencies later. This is an easy parliamentary move. But the bill passed the House by only five votes; many House members are dead set against some of the more objectionable provisions of the Senate bill; a Coakley loss would make the bill that much more politically toxic; there will be Republican catcalls that Congress is using dubious means to pass a bill that has just been politically repudiated; and the House votes just may not be there this time.

Alternatively, let's say Coakley narrowly wins, the Democrats have a near death experience, and the House and Senate stop squabbling and pass the damned bill.

Either way, the Massachusetts surprise should be a wake-up call of the most fundamental kind. Obama needs to stop playing inside games with bankers and insurance lobbyists, and start being a fighter for regular Americans. Otherwise, he can kiss it all goodbye.
© 2010 Huffington Post

Robert Kuttner is co-founder and co-editor of The American Prospect magazine, as well as a Distinguished Senior Fellow of the think tank Demos. He was a longtime columnist for Business Week, and continues to write columns in the Boston Globe. He is the author of Obama's Challenge and other books.

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Tuesday, July 27, 2010