Monday, March 06, 2023

Why Stock Buybacks are Bad

 Robert Reich explains:

Companies don’t get better because of buybacks. Shareholders only get richer. While railroads spent more on stock buybacks than rail safety, Warren Buffett’s wealth increased by $42 billion.

Researchers at Deloitte point out that buybacks and dividends have soared as a share of GDP, while corporate investments in equipment and infrastructure have stagnated. Many of the social costs of this failure to invest have been shifted to the public-at-large, as we saw in East Palestine.

Stock buybacks don’t create more jobs. They don’t increase wages. They don’t grow the economy.

Before 1982, it was illegal for corporations to purchase their own stock to artificially prop up share prices. Then Ronald Reagan’s SEC adopted a rule protecting corporations from being charged for this kind of stock manipulation.

Jump ahead to 2017 and the Trump-GOP tax cuts added fuel to the fire. Since then, stock buybacks have more than doubled, reaching a record high $1.2 trillion in 2022 alone.

That’s $1.2 trillion that did not go into improving quality of life for American workers or building the American economy. It just went straight into the pockets of already-wealthy shareholders and CEOs.

Once again, Wall Street gains at the expense of working families.

Saturday, March 04, 2023

The Power of the Climate Policies in the Inflation Reduction Act

  Paul Krugman

huge progress in renewable energy and related technologies, notably batteries, means that it now looks almost easy to achieve a low-emission economy. We can now easily envision a society in which people drive electric vehicles and cook on induction ranges, using power generated by solar panels and wind turbines, and experience no sense of sacrifice.

The role of policy then becomes to accelerate this transition — to push us over the tipping point into a sustainable economy. And this need not involve huge amounts of public money, just enough to act as a sort of catalyst for change.

A second, somewhat related reason to think that Biden’s climate policy is a big deal is that it doesn’t actually mandate $400 billion in spending. What it does, mainly, is set conditions under which consumers and businesses can receive tax credits for adopting green technology. That $400 billion is based on an estimate of how many people will actually take advantage of these tax credits — and given the spectacular rate of technological progress, that estimate may well turn out to be low.


it depends not just on a rapid expansion of solar and wind power, but also on linking these new energy sources to the electrical grid. But the U.S. power grid doesn’t have enough capacity, and it is in general a mess.

Part of the reason is that there isn’t really a U.S. grid: Investment in electricity transmission is, as a Reuters report put it, “controlled by a Byzantine web of local, state and regional regulators who have strong political incentives to hold down spending.” And this regulatory system wasn’t designed to handle the sudden influx of new energy sources; as a result, simply getting permission to connect to the grid can take years.

we may need a third, bureaucratic miracle to fix the electricity grid and make this whole thing work.

Friday, December 23, 2022

A Journey

 Why the red wave faltered.

He had White co-workers who flagrantly used the n-word and made racist comments to him, and he came to enjoy their shock when he told them to cut it out.

“It was disgusting that people might think I was okay with that,” he said. “I decided I wasn’t going to just let it slide. Because if you let it slide, you become complicit, and complicity turns into guilt, and guilt turns into shame, and shame turns into fear, and I don’t want to live in fear.”

He came to see the Trump movement rising all around him as built upon exactly that kind of fear, and when 2020 came around, he remembers his wife telling him that all his philosophizing meant nothing if he did not take action. He remembers how it felt to vote for the first time.

“There was this well-dressed fellow,” he recalled. “He was pleasant, and as we were leaving, he said, ‘We’ve got to keep them demon Democrats from stealing the election.’ He thought he knew how I was going to vote because of my skin color. I said, ‘Are you serious?’ I said, ‘Nah. And just so you know, I just canceled you out. So, suck on that.’”

He had been part of a minor uprising against Trumpism all across the country — a revolt of contrarians and others who defied expectations of pundits, polls, and even the Democratic Party itself.

Sometimes he and his wife discussed how the Trump movement had ever taken root in this place they loved, and sometimes hated, and nonetheless had chosen to make their home.

“The hardest part is the juxtaposition of knowing these are good, kind, loving, caring people here,” Johnson’s wife would say. “It’s like they put their morality in a box.”

To Johnson, though, it was less about other people and more about the kind of person he wanted to be. And so when it was time to vote again — this time in Georgia’s Dec. 6 runoff for the U.S. Senate — he got into his pickup truck and headed to Beulahland Baptist Church one more time.

He walked across the parking lot, past other pickup trucks and cars with Trump stickers, and through the door. And then a 33-year-old White man from northwest Georgia voted for the third time in his life.

He voted against the Trump-backed candidate, and as he saw it, he voted against all the politics of Trumpism that had been expected to work on somebody like him — white nationalism, grievance, bitterness, bullying and, perhaps most of all, fear of a changing world.

“I have relatives who retreated rather than adapted,” he said, thinking of the life he left behind. “I think of it as, I left the mountain to come into the world, to go out into the world. It’s something I’m kind of proud of.”

Wednesday, December 21, 2022

It's the "Persuadables"

 John Feffer examines the roots of right-wing successes.

Sure, the far right attracts plenty of “deplorables” from outright racists and homophobes to QAnon crackpots. But far more of those who support candidates like Kari Lake and her global counterparts — Giorgia Meloni in Italy, Jair Bolsonaro in Brazil, and Narendra Modi in India, among others — are actually “persuadables,” voting in their perceived self-interest based on perfectly real economic and political needs. By courting such voters, the far right has managed to pivot from the fringe to the mainstream.

Monday, December 12, 2022

The Root Cause of Violent Crime Is Not What We Think It Is

 insufficient punishment is not the root cause of violence. And if someone is talking about how tough they are and how scared you should be, they care more about keeping you scared than keeping you safe.

I have seen the message of “strong communities keeping everyone safe” open the minds of Republican voters, Democratic voters, and many in between. It is backed up by science. Academicsgovernment commissions and even many police chiefs have agreed with the substance behind the message for decades. And there is evidence, including the results of last month’s midterms, that it can work politically on a larger scale.

Local successes can be harder for national and statewide candidates to take credit for. But they are still better off telling a story about solutions than trying to out-punish their opponents. Senator-elect John Fetterman, Democrat of Pennsylvania, often advertised his efforts to eliminate shooting deaths as the mayor of Braddock, Pa.

local policies that get closer to the cause are showing results. Dozens of communities are demonstrating how to ensure safety and, in many cases, save money along the way. In Austin, Texas, a 911 call from a person reporting a mental health emergency used to get directed to the police. Now, if there is no immediate danger, dispatchers have the option to transfer the call to a mental health clinician. In the first eight months after the program’s 2019 launch, 82 percent of calls that were transferred were handled without police involvement, which resulted in savings to the taxpayer of $1,642,213. By the 2021 fiscal year, the program was involved in almost 2,000 calls. In Brooklyn, young people who completed an alternative program for illegal gun possession had a 22 percent lower rearrest rate than peers who went to prison. In Olympia, Wash., a new unit of the Police Department that provides “free, confidential, and voluntary crisis response assistance” has responded to 3,108 calls since 2019, all while minimizing arrests and with zero injuries to responders.

Communities that have adopted these approaches have not done away with enforcement; they have just required less of it. 

 the black hole narrative cannot be changed by statistics alone. If you want policies that actually work, you have to change the political conversation from “tough candidates punishing bad people” to “strong communities keeping everyone safe.” Candidates who care about solving a problem pay attention to what caused it.

common sense and recent polling show that a majority of voters are concerned about crime and also supportive of changes in how we keep communities safe.

Voters know the status quo does not work. In the run-up to 2024, for the sake of public safety, candidates need to give them real alternatives. That is the only way to get out of the black hole and into the light.

Gretchen Whitmer illustrated how to win

Gretchen Whitmer shows Democrats how to win.

She ran on economics and abortion, increased Democratic turnout and persuaded swing voters, all while connecting with the party’s largest base: Black voters. She embodied the way smart campaigns in Pennsylvania, Wisconsin and around the country operated this cycle, and she gave a blueprint for Democrats in 2024.

The first lesson of Ms. Whitmer’s campaign is that economic good news and development — especially building things — really make a difference. Democrats should run on American manufacturing: Whether it was a new semiconductor plant (to help ease the chip shortage facing the auto industry) or generational-level investments from G.M. in electric-vehicle battery plants (to make sure the critical supply chains for electric cars will be based in Michigan, not China, where many E.V. batteries are currently built), Ms. Whitmer fought to bring them to Michigan.

In in multiple TV ads, she told voters, “I can’t solve the inflation problem, but we’re doing things — right now — to help.” She listed tangible benefits that she proposed or got done, like more affordable community college, insurance refunds and tax cuts for seniors. She passed four balanced, bipartisan budgets with no tax increases, and she let voters know about that.

This was paired with a pocketbook attack. Her opponent, Tudor Dixon, took millions of dollars from the wildly unpopular (in Michigan) billionaire Betsy DeVos and her family. For months her campaign highlighted Ms. Dixon’s connections to Ms. DeVos and how Ms. Dixon’s tax plan would benefit Ms. DeVos and hurt the middle class — working-class tax hikes, cuts to schools and the like. Ms. Whitmer also highlighted abortion rights as a vote-deciding issue for swing voters.

Ms. Whitmer also developed a deep connection with Black voters well before she picked as her running mate and governing partner the state’s first Black lieutenant governor, Garlin Gilchrist. After winning Black voters decisively with high turnout in 2018, she deepened that connection

What Ms. Whitmer has done in Michigan can be done by Democrats across the country. We can talk about economics and abortion, we can invest in turnout and persuasion, and we can strengthen our appeal to voters of color while winning over white voters.

Sunday, November 13, 2022

Democrats after election

 Elizabeth Warren provides guidance for the lame-duck session.

Democrats should fight back by making this lame-duck session of Congress the most productive in decades. We can start by lifting the debt ceiling now to block Republicans from taking our economy hostage next year. Democrats must then continue delivering for families. Where we can pursue legislative action, we should fight aggressively. When Republicans try to obstruct such action and the president can act by executive authority, he must. Most of all, the Democrats should be aggressive in putting Republicans on the defensive, pressing hard on why they are blocking much-needed initiatives to help Americans.

Continuing to reduce inflation and putting money in people’s pockets, expanding the work force through affordable child care, lowering housing costs by increasing supply, raising taxes on the superwealthy, tackling corporate price gouging — this is not a progressive wish list.

It’s the unfinished business of the Biden agenda, and the way to help families and win elections.

Tuesday, October 25, 2022

Minimum Wage vs, SSA COLA

 Robert Reich reviews the details.

The media talk about this as a “boost” in Social Security benefits but it’s not. The adjustment simply enables people living on Social Security (more than 70 million of us) to maintain the purchasing power they had a year ago.

On the other hand, the people working at the federal minimum wage haven’t got an inflation adjustment. They’ve been getting poorer at a faster pace and for a longer time than most of the rest of us.

Remember: Corporations pay for the minimum wage. Taxpayers pay for Social Security.

So is it ever going to be possible to raise the minimum wage? Yes.

But is it possible to include an automatic inflation adjustment in the minimum wage?

When I suggested it, Republicans balked. This didn’t surprise me.

What surprised me was that Democrats also balked. Why?

"If it’s automatic, then we can’t fight about it,” a senior Democratic senator explained. “And in presidential election years, it’s a fight we like to have.”

Bottom line: Even if Republicans control one or both houses of Congress in 2024, that would be a good year to try to raise the minimum wage again. As to including an automatic adjustment for inflation, though, I’m less optimistic.

Saturday, October 22, 2022

Rural America Being Deceived

 Paul Krugman explains why rural America is in the tank. They are hurting but they don't realize that Republicans will make it worse. And Democrats are making real strides in making it better.

Political scientists have found that rural Americans believe that they aren’t receiving their fair share of resources, that they are neglected by politicians and that they don’t receive enough respect. So it seems worth noting that the first two beliefs are demonstrably false — although I’m sure that anyone pointing this out will be denounced as another sneering member of the urban elite.

The truth is that rural America is heavily subsidized by urban America. You can see this by looking at states’ federal balance of payments — the difference between federal spending in a state and the amount a state pays in federal taxes.

for the most part this subsidization of rural America reflects the nature of our social safety net rather than explicitly favorable treatment. Rural areas are relatively poor, old and sick. This means that they pay fairly little in federal taxes while receiving large benefits from Social Security, Medicare and other government programs.

But there is also considerable aid targeted directly on rural areas. Most notably, in 2020 Donald Trump sent $46 billion in aid to farmers. To get a sense of how huge this was, note that these days there are only about two million farms in America, and annual net farm income is only about $150 billion.

So the idea that the government discriminates financially against rural areas is the opposite of the truth. That said, it’s true that rural areas are hurting economically, despite receiving a great deal of aid.

The modern economy, with its growing focus on knowledge-intensive industries, tends to favor metropolitan areas with highly educated work forces. And highly educated workers also tend to prefer such areas, so the drift of economic opportunities away from small-town and rural America is a self-reinforcing process. Jobs, especially good jobs, are becoming scarce outside the big metros.

While rural woes are real, however, it’s hard to see how supporting right-wing politicians makes sense as a response to these woes. Republicans in Congress have made it clear that if they take control, they will try to slash the safety-net programs that do so much to support rural America. On the other side, Biden administration actions, especially the subsidies associated with climate policy, represent a serious effort — one that has no G.O.P. counterpart — to bring jobs back to declining regions in the heartland.

When commentators call on Democrats to address rural needs, well, they’re actually doing that — certainly more than Republicans, who are preparing to pull the rug from under programs that rural areas depend on. When people call on urban elites to end their disrespect for rural Americans, well, perceptions about such disrespect may not have much to do with reality.

rural perceptions are so much at odds with reality, and rural America is becoming so monolithic politically, that it’s hard to imagine that they’ll have much success.

How to Defeat Fascism

 Anand Giridhradas has the rundown.

Command Attention

The right presently runs laps around the left in its ability to manage and use attention. It understands the power of provocation to make people have the conversation that most benefits its side. “Tucker Carlson said what about the war on ‘legacy Americans’?” “Donald Trump said what about those countries in Africa?” It understands that sometimes it’s worth looking ridiculous to achieve saturation of the discourse. It knows that the more one’s ideas are repeated — positively, negatively, however — the more they seem to millions of people like common sense. It knows that when the opposition is endlessly consumed by responding to its ideas, that opposition isn’t hawking its own wares.

Make Meaning

A concept you often hear among organizers (but less in electoral politics) is meaning making. Organizers tend to think of voters as being in a constant process of making sense of the world, and they see their job as being not simply to ask for people’s vote but also to participate in the process by which voters process their experiences into positions.

Voters read things. They hear stories on cable news. They notice changes at work and in their town. But these things do not on their own array into a coherent philosophy. A story, an explanation, a narrative — these form the bridge that transports you from noticing the new Spanish-speaking cashiers at Walgreens to fearing a southern invasion or from liking a senator from Chicago you once heard on TV to seeing him as a redemption of the ideals of the nation.

Meet People Where They Are

There is a phrase that all political organizers seem to learn in their first training: Meet people where they are. The phrase doesn’t suggest watering down your goal as an organizer because of where the people you are trying to bring along are. It suggests meeting them at their level of familiarity and knowledge and comfort with the ideas in question and then trying to move them in the desired direction.

Many organizers I spoke to aired a concern that, in this fractious and high-stakes time, a tendency toward purism, gatekeeping and homogeneity afflicts sections of the left and threatens its pursuits.

Pick Fights

If the left could use a little more grace and generosity toward voters who are not yet fully on board, it could also benefit from a greater comfort with making powerful enemies. It needs to be simultaneously a better lover and a better fighter.

“What Republicans are great at doing is telling you who’s to blame,” Senator Chris Murphy, Democrat of Connecticut, told me. “Whether it’s big government or Mexican immigrants or Muslims, Republicans are going to tell you who’s doing the bad things to you. Democrats, we believe in subtleties. We don’t believe in good and evil. We believe in relativity. That needs to change.”

Once again, the exceptions prove the rule. Why did the Texas Democratic gubernatorial candidate, Beto O’Rourke, go viral when he confronted the Republican governor, Greg Abbott, during a news conference or called a voter an incest epithet? Why does the Pennsylvania Senate candidate John Fetterman so resonate with voters for his ceaseless trolling of his opponent, the celebrity surgeon and television personality Mehmet Oz, about his residency status and awkward grocery videos? In California, why has Gov. Gavin Newsom’s feisty postrecall persona, calling out his fellow governors on the right, brought such applause? Because, as Anat Shenker-Osorio, a messaging expert who advises progressive causes, has said, people “are absolutely desperate for moral clarity and demonstrated conviction.”

Provide a Home

Many leading political thinkers and doers argue that the right’s greatest strength isn’t its ideological positioning or policy ideas or rhetoric. It is putting a metaphorical roof over the head of adherents, giving them a sense of comfort and belonging to something larger than themselves.

“People want to find a place that they call home,” Alicia Garza, an activist prominent in the Black Lives Matter movement, told me. “Home for a lot of people means a place where you can feel safe and a place where someone is caring for your needs.

Tell the Better Story

As befits a polity on the knife’s edge, Democrats have good political days, and Republicans have good political days. But in the longer contest to tell the better story about America and draw people into that story, there is a great worry among organizers that the left is badly falling short.

The left has a bold agenda: strengthen voting rights, save the planet, upgrade the safety net. But policies do not speak for themselves, and the cause remains starved for a larger, goosebumps-giving, heroes-and-villains, endlessly quotable story of America that justifies the policy ambitions and helps people make sense of the time and place they’re in.

Friday, October 14, 2022

Jan 6 Summary

 For clear talking points about the January 6 attack on the Capitol, Robert Reich has a great list.

The committee then showed evidence that:

1.  Trump concocted his plan long before Election Day. Knowing that mail-in votes would be more likely cast for Biden and would not be counted until possibly days after Trump had taken the lead on Election Day, Trump planned to give a false election victory speech on the evening of Election Day. Even though the networks were starting to call the race for Biden, Trump declared victory and demanded that voting counts stop. “This is a fraud on the American public, an embarrassment to our country. We were getting ready to win this election, we did win this election.”

2.  Trump knew he lost. He also knew that there was no evidence of fraud or irregularities sufficient to change the outcome. In none of 62 court cases was he able to establish election fraud. His Attorney General told him there had been no fraud. His advisors repeatedly told him there was no evidence of fraud sufficient to change the outcome. The Supreme Court rejected his case on December 11. Electors voted on December 14. His senior staff advised him to concede. Nonetheless, Trump’s intended to ignore the rule of law to stay in power.

3.  Trump was personally and directly involved in a plan to remain in power, regardless.

(1) He knew he was lying when he told the public that Dominion Voting machines were rigged against him, when he told the public there were more votes than voters, and when he told the public about a “vote dump” in Detroit. He purposely and maliciously repeated these lies to the public over and over again.

(2) He knew his allegations of fraud in Georgia were false. But he nonetheless sought to pressure the Georgia secretary of state Brad Raffensperger into giving him the votes he needed, saying “I want to find 11,780 votes.” When the secretary of state demurred, Trump threatened that he’d be prosecuted.

(3) He also tried to pressure election officials in Arizona and Michigan, knowing he lost those states.  

(4) Knowing he lost the election, he also pressured the Justice Department to change the results of the election until Justice Department officials threatened mass resignation.

(5) He sought to replace real Biden electors with fake Trump electors on January 6. He knew this was illegal.

(6) He tried to get Vice President Pence to unilaterally disregard the electoral count. Trump knew this was illegal.

(7) He intentionally summoned his supporters to the Capitol, and then, knowing they were armed, intended that they march to the Capitol.

(8) Even before his Ellipse speech, he knew there would be violence. He knew people coming to Washington planned to attack the Capitol and that multiple users online were targeting members of Congress. The Secret Service had this information at least 10 days before the attack. On January 6, during his speech on the Ellipse, Trump knew the crowd was armed and dangerous.

4. Even when Trump knew about the violence unfolding at the Capitol on January 6, he refused to call off the mob.

Next steps?

This is probably the last of the committee’s hearings. If Republicans succeed in their drive to win the House majority (which seems likely), they will almost certainly disband the committee in January and shut down any official accounting by Congress for the largest attack on the Capitol in centuries.

This means the panel has less than three months to finish up its investigation, write and release its final report (likely in December), make any legislative recommendations, and decide whether to make a criminal referral to the Justice Department.

The January 6 committee, led by Chairman Bennie Thompson (D-MS) and Vice Chair Liz Cheney (R-WY), has done America a great service — giving the nation exactly what it has most needed: an accounting of what occurred January 6, why it occurred, and Trump’s role in it.

Whether this will lead to Trump being held criminally accountable does not depend on the committee making a criminal referral. Regardless of whether it makes such a referral, that decision is solely up to the U.S. Attorney General, Merrick Garland (who would now be sitting on the Supreme Court had it not been for Mitch McConnell and a Republican Senate majority).

But the committee’s work — its investigation and its public hearings — have played a part in persuading Garland to move forward with a criminal case against Trump. If you’d asked me six months ago, I’d have said Garland would not do so, for fear of dividing the nation even more deeply. Now, I believe he will.

Thursday, October 13, 2022

It's Scam Season

 Especially for insurance companies that sell Medicare Advantage plans that line their pockets.

 insurance industry whistleblower Wendell Potter warns that it’s because the only “advantage” to these HMO-style networked plans is for the insurers.

Oh, yes. Susie Madrak has more at Crooks and Liars.

Wednesday, October 12, 2022

Avoiding Financial Crises

 On the recent Nobel Prize award for economics, Paul Krugman has some good thoughts on avoiding financial abysses.

What can be done to mitigate the risk of self-fulfilling panic? As Diamond and Dybvig noted, a government backstop — either deposit insurance, the willingness of the central bank to lend money to troubled banks or both — can short-circuit potential crises. Indeed, the mere knowledge that a backstop exists can often quell a bank run; no money need actually change hands.

But providing such a backstop raises the possibility of abuse; banks may take on undue risks because they know they’ll be bailed out if things go wrong. Case in point: the huge costs to taxpayers of bailing out irresponsible players during the savings and loans crisis in the 1980s. So banks need to be regulated as well as backstopped.

From an economic point of view, banking is any form of financial intermediation that offers people seemingly liquid assets while using their wealth to make illiquid investments.

This insight was dramatically validated in the 2008 financial crisis. Conventional banks were, for the most part, unaffected by the panic; there was no mass exodus from bank deposits. By the eve of the crisis, however, the financial system relied heavily on “shadow banking” — banklike activities that didn’t involve standard bank deposits. For example, many corporations had taken to parking their cash not in deposits but in “repo” — overnight loans using things like mortgage-backed securities as collateral. Such arrangements offered a higher yield than conventional deposits. But they had no safety net, which opened the door to an old-style bank run and financial panic.

a sort of meta point about the Diamond-Dybvig work: Once you’ve understood and acknowledged the possibility of self-fulfilling banking crises, you become aware that similar things can happen elsewhere.

Sure enough, when Mario Draghi, the president of the European Central Bank at the time, finally did provide a backstop in 2012 — he said the magic words “whatever it takes,” implying that the bank would lend money to the troubled governments if necessary — the spreads collapsed and the crisis came to an end