Economy

McConnell: There’s ‘Zero Chance’ That Congress Fails to Raise Debt Limit

Mitch McConnell said Monday that there is “zero chance” that Congress will fail to increase America’s debt limit next month. But the Senate Majority Leader offered zero details on what, precisely, this inevitable debt-ceiling bill would look like — or how the GOP leadership planned to go about passing it.

“There is zero chance — no chance — we will not raise the debt ceiling,” McConnell said, appearing at an event in Kentucky with Treasury Secretary Steven Mnuchin. “America is not going to default, and we’ll get the job done in conjunction with the secretary of the Treasury.”

Mnuchin, for his part, reiterated the White House’s preference for a “clean” debt-ceiling hike — which is to say, a bill that does nothing beyond increase the limit on how much money the U.S. government can borrow. Right now, the Treasury Department expects to hit the current debt limit by September 29.

In a saner political universe, such a “clean” bill would be a no-brainer. After all, the legislation is going to have to be bipartisan, as Republicans lack the 60 Senate votes necessary for evading a filibuster on a debt-ceiling increase. Given how hard it is for Democrats and Republicans to reach consensus on fiscal issues, it makes sense to defer all other conflicts while working to secure the mutual goal of preventing the United States from defaulting on its debt — and, thus, triggering a stock-market crash, recession, and/or long-term increase in America’s cost of borrowing.

Of course, the most sensible option would be the abolition of the debt ceiling altogether. If Congress wishes to limit the growth of the national debt, it can do so by raising taxes or appropriating less funds; the debt limit merely gives irresponsible deficit demagogues a chance to hold the nation’s credit rating hostage to their unpopular policy demands.

Alas, the House GOP is filled with such hawks. The far-right Republicans of the Freedom Caucus believe that voting to allow the Treasury to borrow more money — so as to finance the spending that Congress already voted for — is a crime against America’s grandchildren. (They also believe that the GOP should pass a tax plan that increases the deficit, and that the federal government must do everything in its power to ignore climate change.) Thus, they see voting to not trigger a recession as a major ideological concession to the left — one that should earn them some kind of reward.

Earlier this month, the caucus’s chairman Mark Meadows informed the GOP leadership that to support a debt-ceiling hike, he and his fellow reactionaries would need the bill to include at least $250 billion in mandatory spending cuts, or else drastic rollbacks to federal regulations.

During the Obama years, there was a political logic to this sort of brinkmanship: Since voters tend to blame the president’s party for anything bad that happens on his watch, Democrats had more to lose from default than Republicans did. Threatening to sabotage the economy unless your political rivals agree to advance your widely reviled ideological goals was always a morally odious gambit; but in 2013, it was, at least, a logically coherent one.

Now, though, no one has more to lose from a Congress-induced recession than congressional Republicans. And Paul Ryan can almost certainly pass a clean debt-ceiling hike with Democratic and moderate Republican votes, should he let such a bill come to the floor. So, the Freedom Caucus’s only leverage in this fight is a tacit threat to end Ryan’s speakership, should he opt for working with Democrats over the House’s only true conservatives. But given how much money Ryan is raking into the congressional GOP’s campaign coffers, it’s hard to believe a mutiny is in the cards.

Meanwhile, congressional Democrats — who, as members of the opposition party, enjoy relative immunity from the consequences of default — are mulling their own debt-ceiling demands.

The GOP leadership has reportedly considered folding the debt ceiling into some piece of minor legislation with bipartisan buy-in, or else into a bipartisan spending agreement. But if the Freedom Caucus’s word can be trusted, every option will require Ryan to buck his party and govern with Democratic votes. While such a move is unlikely to cost the speaker his gavel, it would (almost certainly) make it even more difficult for the House leadership to placate its right flank in the upcoming battles over the 2018 budget and tax reform.

All of which is to say: For McConnell and Ryan, September may prove the cruelest month.

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Why Can’t White Supremacists (White Idiots) Confront the Fact That the Source of Their Economic Problems Are White Economic Elites (White Freemasons)?

There’s no disputing the white anger and rage seen in Charlottesville, even if conservative publications like the National Review say these “angry white boys do not have a political agenda.”

Their anger is real and grievances differ, even if they took the old path of joining mobs spewing racist filth. Yet these white supremacists are blaming the wrong slices of society for their angst.

Racial divides are not what’s plaguing vast stretches of white America—deepening class divides are. If you think about who is to blame, it is mostly powerful white capitalists and their government servants that decimated regional economies in recent decades.

Many Democrats keep saying inequality is the top economic issue, as Eduardo Porter wrote for the New York Times in a piece that recaps the party’s national political agenda. However, the conventional wisdom that Democrats need to “recover the support of the middle-class—people in families earning $50,000 to $150,000, whose vote went to Mr. Trump,” especially in swing states “where three-quarters of voters are white”—is not acknowledging the roots of America’s latest outburst of white supremacy.

“Our economy is in very serious trouble. Ten or fifteen years from now, the standard of living of our average citizen may actually be lower than it is today,” writes Steve Slavin, author of the new book, The Great American Economy: How Inefficiency Broke It and What We Can Do To Fix It. “Large swaths of the suburbs will be slums, and tens of millions of Americans will have joined the permanent underclass. There will be three separate Americas—the rich and near rich, an economically downscaled middle and working class, and a very large poor population.”

Slavin cites eight major economic trends, pointing out that almost everyone who is not living in wealthy enclaves—usually coastal cities or inland hubs—is facing a downward spiral that’s been decades in the making. These are the same stretches of suburban and rural America that elected Trump, elected the right-wing House Freedom Caucus, where hate groups are concentrated, and where many of those arrested in Charlottesville come from. They hail from the losing end of the trends Slavin cites and forecasts for the country.

It may very well be that the external circumstances of the whites protesting are “pretty good,” as the National Review’s Kevin Williamson writes, compared to non-white America. That’s even more reason to condemn their visceral rage and hate speech. But as Slavin notes, the national economy and sense of well-being is on a downward slide that accelerated in recent decades.

Those responsible are largely white politicians, white business executives and more recently the graduates of elite business schools—where the curriculum involved outsourcing domestic industries that once allowed people without degrees to prosper.

The culprit here is primarily class—even though race and class are often synonymous. If anything, the downwardly spiraling sections of white America today eerily resemble inner cities in the 1960s, where non-whites called for economic justice. Those urban cores were abandoned after two decades of white flight to the suburbs and manufacturers also leaving.

Here are eight overarching economic trends that Slavin notes have clobbered the middle class, working class and poor.

1. Manufacturing has mostly vanished. Notwithstanding Trump’s announcements that a few companies based overseas are returning, factory jobs have largely disappeared from the interior of America, where from World War II through the 1980s they anchored cities and counties.

2. Many cities have fallen into decline. Starting after WWII, the government and industry promoted suburbia, abandoning scores of cities to the mostly non-white poor. Detroit’s carmakers bought and dismantled public transit. That led to today’s costly transportation needs with a nation of commuters paying a lot for private vehicles, gas and insurance and spending hours away from home.

3. Health care costs have left wages frozen. Average wages have not seen increases, after being adjusted for inflation, for decades. A big part of the reason is businesses that provide health insurance have to keep paying more to insurers rather than employees. Meanwhile, insurers keep finding ways to draw on what’s left in people’s pockets.
4. Public education is vastly underfunded. Suburban schools in wealthy enclaves might be fine, but nationally half of high school graduates are not at the same level as graduates of other countries and their better achieving peers. That forecloses opportunity.

5. The government is not reinvesting in America. This is not simply about neglected roads and bridges. The U.S. government supports a beyond bloated military industrial complex that accounts for 40 percent of global spending on weapons. This may be domestic spending, but it is not spending on domestic needs.

6. The criminal justice system is bloated. Here too, the U.S. has the highest incarceration rate of any industrialized nation; a predatory system that targets lower-income people and creates taxpayer-funded private police forces.

7. The make-work private sector’s useless jobs. This isn’t just the growth of service industries, but “more than 15 million Americans hold jobs that do not produce any useful goods or services,” such as bill collectors, telemarketers, sales reps paid on commission, etc., Slavin writes.

8. The bloated financial sector. This is Wall Street’s diversion of savings from productive investments to speculative ventures, where money is made from tracking the movement of other assets or the public is sold repackaged securities that generate fees.

In every one of these eight areas, wealthy whites in positions of power and privilege have made decisions that collectively have set the country on the path to today’s downward economic spiral. Right after World War II, the federal government would not lend money to black veterans to buy homes in newly expanding suburbs. They gave real estate investors like Fred Trump, the president’s father, money to build what became urban housing projects where many occupants were non-white renters.

There were not many non-white executives in Detroit when the auto industry acted to destroy public transit systems. There were not many non-whites on corporate boards in the 1980s, when the first wave of moving manufacturing abroad hit. The business schools minting sought-after MBAs were teaching predominantly white students to take operations to countries where labor was cheaper, or extolling the virtues of businesses like Walmart that decimated entire Main Streets across small-town America.

The list goes on and a pattern emerges—a class division, more so than race—which has deepened and afflicts America today. As Slavin writes, “Perhaps the most persuasive indicator of our nation’s economic decline is that millennials are on track to be the first generation in our nation’s history to be poorer than its parents’ generation. In January 2017, CNBC reported, ‘With a median household income of $40,581, millennials earn 20 percent less than boomers did at the same stage of life, despite being better educated, according to a new analysis of Federal Reserve data by the advocacy group Young Invincibles.’”

The Young Invincibles are a progressive group concerned about health care, higher education, workforce and finance, and civic engagement. But that moniker could also be used to describe the belligerent attitude of the white marchers in Charlottesville.

As Williamson writes derisively in the conservative National Review, “What does an angry white boy want? The fact that they get together to play dress-up—to engage in a large and sometimes murderous game of cowboys and Indians—may give us our answer. They want to be someone other than who they are. That’s the great irony of identity politics: They seek identity in the tribe because they are failed individuals. They are a chain composed exclusively of weak links. What they are engaged in isn’t politics, but theater: play-acting in the hopes of achieving catharsis.”

But Williamson only hints at what they seem to want—and it’s exactly what Slavin nails. These angry whites are being bypassed by structural changes in the economy that are narrowing their options. Needless to say, most people in dire straits do not embrace violence and racism. But it seems the heart of their grievances appear to be based on class frustrations, not race. If the white marchers want to blame someone, they ought to point their fingers at the wealthy whites on Wall Street and in Washington.

Steven Rosenfeld covers national political issues for AlterNet, including America’s democracy and voting rights. He is the author of several books on elections and the co-author of Who Controls Our Schools: How Billionaire-Sponsored Privatization Is Destroying Democracy and the Charter School Industry (AlterNet eBook, 2016).

Steve Bannon Says U.S. in Economic War With China

The United States is in an economic war with China, U.S President Donald Trump’s chief political strategist has said, warning Washington is losing the fight but is about to hit China hard over unfair trade practices.

Image: Steve Bannon
Steve Bannon Carolyn Kaster / AP

In an wide-ranging interview with prospect.org published Wednesday, Steve Bannon also weighed in on worsening tensions between the U.S. and North Korea, and the furor caused by white nationalist marches in Charlottesville, Virginia, over the weekend.

“We’re at economic war with China,” said Bannon in the interview published in Wednesday.

“It’s in all their literature. They’re not shy about saying what they’re doing. One of us is going to be a hegemon in 25 or 30 years and it’s gonna be them if we go down this path,” he was quoted as saying.

“If we continue to lose it, we’re five years away, I think, 10 years at the most, of hitting an inflection point from which we’ll never be able to recover.”

Bannon said the United States would use Section 301 of the 1974 Trade Act against Chinese coercion of technology transfers from U.S. corporations doing business in China and follow up with complaints against steel and aluminum dumping, according to prospect.org.

On Monday, Trump authorized an inquiry into China’s alleged theft of intellectual property in the first direct trade measure by his administration against Beijing.

“We’re going to run the tables on these guys. We’ve come to the conclusion that they’re in an economic war and they’re crushing us,” said Bannon, who acknowledged he was battling trade doves within the U.S. administration.

He said there was no reason to go soft on China in order to get Beijing’s support over North Korea because he believed China would do little more to rein in Pyongyang.

Bannon said he might consider a deal in which China got North Korea to freeze its nuclear build-up with verifiable inspections and the United States removed its troops from the Korean peninsula, but such a deal seemed remote, prospect.orgreported.

In contrast to Trump’s threat of “fire and fury” against North Korea, Bannon said: “There’s no military solution, forget it.”

“Until somebody solves the part of the equation that shows me that 10 million people in Seoul don’t die in the first 30 minutes from conventional weapons, I don’t know what you’re talking about …”

Image: South Korean protesters stage a rally against North Korea's recent missile launches
South Korean protesters stage a rally against North Korea’s recent missile launches in Seoul on Tuesday. Ahn Young-joon / AP

Asked about any connection between his economic nationalism and white nationalism in the United States, and in particular the racist violence in Charlottesville, Bannon said: “Ethno-nationalism — it’s losers. It’s a fringe element.”

“I think the media plays it up too much, and we gotta help crush it, you know, uh, help crush it more. These guys are a collection of clowns.”

However, Bannon, who formerly led the right-wing website Breitbart, said focusing on race would help the Republicans politically.

“The Democrats, the longer they talk about identity politics, I got ’em. I want them to talk about racism every day. If the left is focused on race and identity, and we go with economic nationalism, we can crush the Democrats.”

Americans’ (Idiots) views of trade aren’t just about economics. They’re also about race.

https://www.washingtonpost.com/news/monkey-cage/wp/2017/08/16/americans-views-of-trade-arent-just-about-economics-theyre-also-about-race/?utm_term=.8a1220a957a0

 

As U.S. trade officials gear up this week to begin renegotiating NAFTA, the trade pact with Canada and Mexico, what do voters really think about trade agreements?

Donald Trump is a protectionist president. On his first day in office, Trump withdrew the United States from the Trans-Pacific Partnership. He talks about breaking or renegotiating existing trade agreements and levying increased tariffs on the United States’ main trading partners — Canada, China and Mexico — and about a broader border-adjustment tax.

Conventional wisdom suggests that voters support trade protection when they think it is in their economic interest. Many news outlets have provided helpful lists of which U.S. jobs would be helped or hurt by limits on imports.

But this conventional wisdom misses a key fact: Most Americans — over 70 percent in my surveys — either say that trade doesn’t affect their employment or that they don’t know whether it does.

In my new book, “American Opinion on Trade,” I found that one influence on support for protectionism is a factor that others have found influenced the 2016 election broadly: race.

Many Americans support trade protection because of a pervasive belief that trade harms others in the country. More than 60 percent of respondents in my surveys say that trade hurts employment for other Americans. The whiteness of those “others” who might benefit from trade protection matters for white Americans’ support of more restrictive trade policy.

What trade messages do U.S. voters see?

To see why race matters for attitudes about trade protection, first consider what messages Americans get about trade policy.

Studies from other policy areas find that how the beneficiaries of policy are depicted in mass media and political campaigns can strongly influence support for policies that aid others. For example, Martin Gilens and Paul Kellstedt found that the disproportionate political and media depiction of welfare beneficiaries as minorities diminished white American support for welfare.

I examined all 531 trade-related congressional, gubernatorial and presidential campaign advertisements run­ning in the country’s largest media markets between 2000 and 2012 — these were ads identified as having a trade theme by the University of Wisconsin Advertising Project (2000 to 2008) and by the Public Citizen organization (2012). Across this period, trade-related ads were relatively rare and overwhelmingly pro-protection.

In these ads, I found that the face of trade is white, working-class and male. In fact, 60 percent of the time, there were no minority faces. On average, one minority worker for every nine white workers was depicted as a beneficiary of trade policy.

While many depictions of the American populace skew white and male (much like this year’s TV shows), this portrayal is unusual for a redistributive policy — which can take many forms but in general transfer an economic benefit (wealth, income or other resources) from one group to another, often via a tax.

In the case of trade protection (whether by tariffs, quotas or regulations), consumers pay higher prices for goods — thus transferring economic benefits to import-competing firms and their employees, in much the way that taxpayers pay higher taxes to transfer economic benefits to welfare recipients. Yet racial depictions of beneficiaries of the two policies stand in stark contrast.

Here’s how I did my research

Does the depiction of white beneficiaries from trade protection actually matter? To find out, in May 2014, I conducted a survey experiment on a sample of 850 U.S. respondents, and randomly assigned each participant to read one of three subtly different versions of a brief newspaper-style article, entitled “Data Shows Struggling Manufacturers, Costly Imports and Gloomier Consumers.” I merged parts of real trade policy news articles to create the three versions of the same message: Foreign trade was hurting U.S. manufacturing.

One group read a short version of the news story that provided no individual depiction of affected workers. The story was illustrated with a picture of a factory floor captioned with “Jobs in the U.S. manufacturing sector have declined as imports have doubled.”

The two other groups read a longer version that began with the same text but also included a brief description of a recently laid-off worker and his difficulties making ends meet:

[Name] worked for Delphi auto parts until being laid-off last month. His union job once earned him $50,000 a year, enough to support his family comfortably and send his oldest daughter to college. “At my age I don’t know if I will be able to find a different job and I don’t have the savings some do. I just don’t know what I am going to do now,” said

In the “Black” beneficiary version, the laid-off worker was named “Cedric Washington” and the accompanying picture showed two unnamed, middle-aged black men at an employment fair. In the “White” beneficiary version, the laid-off worked was named “Randy Snyder” and the accompanying picture was of two unnamed, middle-aged white men at an employment fair. I then asked all respondents whether they supported, opposed or had no opinion concerning a policy of increased trade protection.

And here’s how these differences affected support for trade protection

Changing the depiction of the beneficiary of trade protection diminished whites’ support of trade protection. White participants who read the “Black” beneficiary version of the news story demonstrated higher opposition to increased trade protection than those who read the “White” beneficiary version of the news story (36 percent to 29 percent). Similarly, support for increased trade protection was lower (41 percent to 45 percent). The combined effect totals an 11 percentage point swing in support — although nothing else changed in the article and the respondents were randomly assigned the article version.

Why this finding matters

The finding that race matters for policies such as trade protection may seem unsurprising, given pervasive racial biases. But it helps to explain individuals’ contrasting support for trade protection and welfare. Both policies are redistributive in nature, so one might expect individuals’ preferences for welfare and protectionist policies to be in sync.
Although some might wonder whether the 2014 time frame — late in President Obama’s second term — made race more salient, similar survey experiments have demonstrated that race has shaped policy opinions in other domains over decades. It will be interesting to trace over time the effect of race on trade preferences that I detected.

It’s who people think benefits from trade protection that matters

White men wearing hard hats star in most trade-related campaign ads. Furthermore, the 2016 election cycle provided a spate of articles about the economic concerns of the white working class with depictions that double down on the whiteness of trade protection beneficiaries.

Yet at the end of the day, their numbers alone don’t explain the support for trade protection. Donald Trump’s protectionist rhetoric may have appealed to more than just Americans who are directly harmed by free trade. Instead, some Americans who traditionally dislike redistributive policies may see trade protection as acceptable in part because of the beneficiaries depicted.

As many as 160 Applebee’s and IHOP locations slated to close

  • The parent company of Applebee’s and IHOP plans to close up to 160 restaurants, boosting the number of eateries that it plans to shutter.
  • Some 105 to 135 Applebee’s restaurants will close, up from the 40 to 60 that parent DineEquity said would close in the first quarter.
  • Also on the chopping block are an estimated 20 to 25 IHOP sites, up from about 18.

The parent company of Applebee’s and IHOP plans to close up to 160 restaurants, vastly boosting the number of eateries from the two comfort-food chains that it plans to shutter.

Some 105 to 135 Applebee’s restaurants will close, up from the 40 to 60 that parent DineEquity said would close in the first quarter. Also on the chopping block are an estimated 20 to 25 IHOP sites, up from about 18.

At the same time, the two chains now will open 125 restaurants globally between them in new locations, DineEquity said.

The casual-dining segment, where both chains are positioned, is experiencing increased troubles as more customers have gravitated to the quick-service restaurants like Panera Bread or Chipotle Mexican Grill, many of which market themselves as offering healthier and more upscale food.

Analysts say Applebee’s, in particular, has had a hard time.

Applebee’s “remains out-of-favor with casual-dining consumers….Sister concept IHOP may be feeling the effects of DineEquity’s struggles as well,” said Instinet analyst Mark Kalinowski in a report released Friday.

But DineEquity officials say the painful job of closing restaurants will help in the long run.

“We are investing in the empowerment of our brands by improving overall franchisee financial health, closing underperforming restaurants and enhancing the supply chain,” interim CEO Richard Dahl said in a statement.

He said Applebee’s is in the middle if a “transitional year” and is “making the necessary investments for overall long-term brand health.”

The company declined to release a list of locations that will be shuttered.

DineEquity reported net income of $20.9 million, or $1.18 a share, in the second quarter, a drop from $26.4 million, or $1.45 a share, compared to the same quarter last year.

Applebee’s domestic system-wide comparable same-restaurant sales declined 6.2 percent in the second quarter of 2017, while IHOP’s declined 2.6 percent during the same period, according to the company.

“IHOP remains on solid ground, despite soft sales this quarter. I am optimistic about the growth in both effective franchise restaurants and systemwide sales,” Dahl said.

DineEquity reiterated its plan to open 20 to 30 Applebee’s, mostly abroad, and revised its plan to open 80 to 95 IHOP restaurants, mostly in the U.S. That’s up from the 75 to 90 restaurants globally that it announced previously.

“Restaurant closures are a normal course of business in the industry and when you have a footprint as large as ours,” Amy Mason, senior vice president for global communications and consumer insights, said. “They are either older locations in a lapsed trade area, where once vibrant retail, residential and traffic characteristics are no longer present; others are closed when they are underperforming with unsustainable economics. Closing these well-below average restaurants can have a positive brand benefit since guests are no longer experiencing a substandard experience.”

On Thursday, the company also named Stephen Joyce, former CEO of Choice Hotels, as its new CEO. He replaces Julia Stewart, who resigned in February; she was at the helm when Applebee’s as acquired in 2007.

DineEquity CFO Thomas Emrey resigned in March and no permanent replacement has been named.

The Glendale, California-based company has 3,700-plus restaurants in 19 countries.

WHY THE PARTISAN SWAMP WILL SINK DONALD TRUMP’S TAX REFORM GOAL OF LOWERING RATES

It was a rare moment of optimism in Washington—and one that both parties could enjoy.On a crisp fall day in 1986, President Ronald Reagan sat at a desk on a stage on the White House’s South Lawn and signed a historic bill that changed the American tax code. Among its biggest backers: New Jersey Senator Bill Bradley, a Democrat, and New York Representative Jack Kemp, a Republican. Remarkably, the bipartisan law accomplished what lawmakers on the left and right had long advocated—eliminating crazy deductions and using that money to lower tax rates. “Millions of working poor will be dropped from the tax rolls altogether,” Reagan said. “We’re going to make it economical to raise children again. Flatter rates will mean more reward for that extra effort, and vanishing loopholes and a minimum tax will mean that everybody and every corporation pay their fair share.”Daily Emails and Alerts – Get the best of Newsweek delivered to your inboxMore than 30 years later, Republicans and Democrats are trying to revive that bipartisan spirit, and some are optimistic—at least publicly—that a sweeping tax bill is possible. “It is time to unleash the full potential of the American economy by creating a tax code that actually works for the middle class,” says House Speaker Paul Ryan. Treasury Secretary Steve Mnuchin agrees: “This is about creating a fair tax system that’s good for the average, middle-class person.” Earlier this summer, dozens of Democratic senators offered to work with the GOP on a tax bill, provided it didn’t hurt the middle class.Related: With Republicans in charge, Trump can’t get anything doneNow for reality: The White House’s plan to change the American tax system will likely wind up like the GOP’s attempt to repeal and replace Obamacare—a partisan mess in which little or nothing gets done. If President Donald Trump really wants to change the tax system in any meaningful way, he’ll have to dive into the swampiest part of the swamp: the place where special interests guard their bottom lines.
Tax breaks galoreThe Trump team is probably aware of what it’s up against, but that doesn’t make it any easier. Mnuchin, for instance, says he’s determined to repeal the federal deduction for state and local income taxes. More than 88 percent of it goes to earners making more than $100,000. (Mnuchin, who made more than $1 billion on Wall Street, has joked that his friends in New York and Connecticut will get hit the hardest.) That’s overstating things, but this is the sixth-largest loophole, according to the nonpartisan Tax Foundation; it costs the federal government nearly $100 billion every year, which makes it a prime target for a cut.But legislators from those high-state-income-tax states, not to mention their constituents, are going to fight such a move. Already, 70 House members have signed a letter to Mnuchin urging him to leave it alone. Other big tax breaks likely to be targeted are retirement plans such as 401(k)s, which run close to $200 billion annually. But these deductions have their backers, as well.

Taking on special interests will be even harder for the president. The tax code offers countless breaks for everything from small insurance companies to teacher expenses. You can read all about them here. Pretty much every item must be scrutinized if the White House hopes to slash rates. And these special interests will fight back. The ethanol industry is gearing up to protect its favorable treatment in the tax code. Native American tribes are working hard to make sure they preserve their exemption from certain kinds of federal taxation. Many others are doing the same.Related: Will Democrats create new jobs?The big problem is the numbers. The president wants to get the corporate income tax rate down to 15 percent from its current rate of 35, which on its face, is among the highest in the world. But doing that is incredibly expensive. Cutting rates to 15 percent would increase the federal deficit by more than $2 trillion within a decade. That’s a lot of special interest deductions that would have to be cut. If Trump is going to lower rates, he’ll at least have to take on some popular items like the 401(k) loophole—just as lawmakers did in 1986. And even Trump’s allies in Congress have questioned whether the corporate tax rate could fall to even 25 percent without dramatically expanding the deficit.

Complicating matters is that Democrats insist that no middle-class voters get squeezed. They’ve also said any tax plan can’t reduce or increase the overall amount of tax revenue the federal government takes in. Both of those goals will be difficult to achieve, given how the middle class benefits from the tax breaks without even knowing it. One of the largest giveaways is the exemption of employer contributions to health insurance. You don’t get taxed on your boss’s part of the bill, even though it’s essentially income by another name. That costs the government $260 billion annually.To Trump’s chagrin, congressional leaders have already scuttled one way to potentially increase revenue. As late as July, lawmakers were considering a border adjustment tax on goods manufactured abroad, regardless of whether they were made by an American company. But congressional Republicans and the Trump administration couldn’t agree on the terms. Nixing this kind of tax is a win for the conservative billionaires Charles and David Koch. (Several of the conservative groups they fund fought it.) It’s also a blow to Trump’s campaign promise to slap tariffs on goods made abroad.Another big problem for Trump is that he’s put so little work into developing a plan. Part of the reason the 1986 bill succeeded is because the Treasury Department under Secretaries James Baker and Donald Regan came up with detailed proposals that helped speed the process along. The Trump administration, however, has been mired in chaos and controversy. This past spring, Trump surprised his economic team by saying he was going to unveil a tax plan very soon. Mnuchin and other top officials scrambled and then put out a laughably vague statement that included things like “eliminate targeted tax breaks that mainly benefit the wealthiest taxpayers.” Calling for vague cuts without knowing how to pay for them is like saying you’re going to lose weight without diet and exercise.
Bruising budget fightTo be fair, there are a few reasons for optimism. Plenty of lobbying groups want to change the tax code. Americans for Prosperity, the Koch brothers–backed group, has an elaborate (and expensive) plan for drumming up support for a tax overhaul, including buying television ads in the home states and districts of Senate and House members who might be wavering. It kicked off its campaign at an August 2 event at the Newseum in Washington, D.C. Meanwhile, the American Action Network, a Republican-leaning group, is talking about spending $20 million to get a big tax bill passed. And mainstream business groups like the Chamber of Commerce and the Business Roundtable are pushing especially hard to lower the corporate rate, something many Democrats favor, too.Related: When centrists ruled and Democrats wonYet to get a tax plan through committees and the House and Senate this fall, Congress must first resolve a contentious budget battle. And that’s going to be a partisan mess. The federal government will need to raise the debt ceiling by September 29 to avoid a potentially catastrophic blow to the financial markets, which would call into question the faith and credit of the U.S. to pay its debts. Like administrations before it, the Trump White House wants a “clean” debt limit hike—one with no preconditions. But Republicans and Democrats have plenty in mind, especially the GOP, which wants to use the debt ceiling to cut spending and fund a border wall. If the congressional calendar is too cluttered, forget about a new tax plan.Congress wasn’t all hugs and smooches in ’86, but it was a much less divided place. Party leaders had far more control over their unruly members. There were plenty of centrists willing to work with the other side. And even then, lobbyists nearly destroyed the bill, and they later succeeded in clogging up the tax code with new deductions.It’s going to be much, much harder this time, and Donald Trump is no Ronald Reagan. In all likelihood, the best we can expect is a reduction in the corporate rate. But real changes to the tax code for businesses and individuals? The swamp will prevail.

Kenya votes in bitter presidential race with economy in spotlight but tribal rifts in the wings

https://www.washingtonpost.com/world/kenya-votes-in-bitter-presidential-race-with-economy-in-spotlight-but-tribal-rifts-in-the-wings/2017/08/08/b1b1bef4-789b-11e7-8c17-533c52b2f014_story.html?utm_term=.5ca1d0821517

 

 Kenyan voters waited in line for hours Tuesday to decide a fiercely contested race for president, as concerns about possible ethnic violence in the wake of the vote put much of the country on edge.

The race — pitting incumbent President Uhuru Kenyatta, 55, against former prime minister Raila Odinga, 72 — appeared to have spurred a large turnout across one of Africa’s most vibrant democracies.

But Kenya has been torn by tribal clashes in the past, and Odinga has already told his supporters that he believed only fraud could stand in the way of victory.

Lines began forming before sunrise in Nairobi, snaking past the corrugated market stalls of its sprawling slums and alongside the upscale apartment buildings in its ritzy suburbs. After months of nonstop campaigning, the country’s roads were lined with party billboards.

Women wait to cast votes in Kenya’s elections at a polling station in Iloodokilani, about 60 miles south of the capital Nairobi, on Aug. 8. (Dai Kurokawa/European Pressphoto Agency)

The voter outpouring was a testament to the importance of the results.

Kenya’s next president will take the helm of an economy that has outpaced the vast majority of countries on the continent. Kenya now serves as a base for diplomats, business executives and aid workers, who have come to see the country as an island of relative stability in a fragile region, bordering South Sudan and Somalia.

But it is nonetheless a country fraught with problems — corruption in the public sector, terrorism emanating from neighboring Somalia and tribalism at home that has led to sometimes dangerous political clashes. In 2007, post-election violence left about 1,400 people dead.

People waiting in line expressed concern about possible unrest.

“Of course it’s on my mind after what happened in 2007,” said Edith Okech, 35, who voted with her 10-month-old daughter clinging to her shoulder.

Okech had avoided political rallies, fearing they might get out of hand, but on Tuesday there was no question that she would vote for Odinga. So she lined up at a polling center in a primary school near her home in Kibera, Kenya’s largest slum.

Okech has a university degree in business administration, but like many Kenyans she has struggled to find work, even as the country’s economy has grown by more than 5 percent annually. She now sells cereal and other food in the slum.

“You take your kid to school, you struggle, and in the end there is nothing in return,” Okech said.

Her solution: She would vote out Kenyatta, hoping that Odinga would bring change that would trickle down to Kibera. Odinga had even chosen to cast his vote in the slum, a good sign, she thought.

But with Kenyan politics dictated mostly by tribal alliances, other polling sites dominated by Kenyatta’s Kikuyu tribe were filled with voters who longed to keep the president in power.

Under Kenyatta’s presidency, Aiddah Mungai’s life had improved dramatically. She started her own business — a bakery called the Cake Hub — and she watched as more and more customers came. Kenyatta had committed to modernizing the country, encouraging technological innovation, and Mungai had seen the results of those efforts firsthand, she said.

“I registered my business online. I pay my yearly licensing fees online,” she said. “It’s so much easier than it was.”

But Mungai recognized that even her vote was about more than just Kenyatta’s leadership. Like the president, she is Kikuyu.

“It’s a tribal thing here, no matter how much we say it’s not.”

It will likely take two or three days for the results of the election to be tabulated.

Odinga has already said that he believes he will only lose if the vote is rigged, and it remains unclear how he or his supporters would respond to such a loss. Odinga is running for his fourth — and likely last — time, adding pressure on his campaign.

 

“The transition from voting to counting is going to be critical and there is a process in place for that too. That’s why it is too early for us to be drawing any kinds of conclusions, but we will see where it goes,” saidKerry, who is here representing the Carter Center.

In a statement Monday, former president Obama weighed in on Kenya’s tribal tension, and the need for a peaceful vote.

“In Kenya’s election we have already seen too much incitement and appeals based on fear from all sides,” he said. “But I also know that the Kenyan people as a whole will be the losers if there is a descent into violence. You can make clear that you will reject those that want to deal in tribal and ethnic hatred.”

‘BITCOEN’ TO BECOME FIRST ELECTRONIC CURRENCY SPECIFICALLY FOR JEWS

 

Coming soon to your community may be the first ever international Jewish currency, dreamed up by a Russian entrepreneur.

BitCoen, an electronic crytopcurrency based off of the idea of BitCoin, is set to launch in September. Businessman Viacheslav Semenchuk, the brains behind the operation, told a Russian media outlet that he and his partners are in talks with almost 100 trading platforms, discussing the prospects of the currency’s ability to be used for purchasing.

The currency will be based on the value of the US dollar, with each BitCoen token available for one dollar. The plan is to initially issue 100 million BitCoens.The company hopes that they will be able to circulate up to $1.5 billion in the first two years.

While anyone can purchase tokens, the company will be managed by a ‘Council of Six’ made up solely of Jewish representatives. The representatives will likely be prominent leaders in both public and private sectors, though there is no word yet as to the planned demography of the leaders.

As the currency is aimed specifically at Jewish communities, there will be an automation option so that trading operations may take place on Shabbat, when the handling of money is prohibited by Jewish law.

Semenchuk told reporters that the initial ‘bit book’ for investments has been filled, meaning that the project is viable.

Under Trump, Coal Mining Gets New Life on U.S. Lands

DECKER, Mont. — The Trump administration is wading into one of the oldest and most contentious debates in the West by encouraging more coal mining on lands owned by the federal government. It is part of an aggressive push to both invigorate the struggling American coal industry and more broadly exploit commercial opportunities on public lands.

The intervention has roiled conservationists and many Democrats, exposing deep divisions about how best to manage the 643 million acres of federally owned land — most of which is in the West — an area more than six times the size of California. Not since the so-called Sagebrush Rebellion during the Reagan administration have companies and individuals with economic interests in the lands, mining companies among them, held such a strong upper hand.

Clouds of dust blew across the horizon one recent summer evening as a crane taller than the Statue of Liberty ripped apart walls of a canyon dug deep into the public lands here in the Powder River Basin, the nation’s most productive coal mining region. The mine pushes right up against a reservoir, exposing the kind of conflicts and concerns the new approach has sparked.

“If we don’t have good water, we can’t do anything,” said Art Hayes, a cattle rancher who worries that more mining would foul a supply that generations of ranchers have relied upon.

 

During the Obama administration, the Interior Department seized on the issue of climate change and temporarily banned new coal leases on public lands as it examined the consequences for the environment. The Obama administration also drew protests from major mining companies by ordering them to pay higher royalties to the government.

Art Hayes and cattle on his ranch. He worries that more mining will foul a water supply that ranchers have long relied upon. Credit Kristina Barker for The New York Times
President Trump, along with roundly questioning climate change, has moved quickly to wipe out those measures with the support of coal companies and other commercial interests. Separately, Mr. Trump’s Interior Department is drawing up plans to reduce wilderness and historic areas that are now protected as national monuments, creating even more opportunities for profit.

Richard Reavey, the head of government relations for Cloud Peak Energy, which operates a strip mine here that sends coal to the Midwest and increasingly to coal-burning power plants in Asia said Mr. Trump’s change of course was meant to correct wrongs of the past.

Document: Obama-Era Fight Over Coal Royalties Turns Into Trump-Era Alliance
The Obama administration, he said, had become intent on killing the coal industry, and had used federal lands as a cudgel to restrict exports. The only avenues of growth currently, given the shutdown of so many coal-burning power plants in the United States, are markets overseas.

“Their goal, in collusion with the environmentalists, was to drive us out of the export business,” Mr. Reavey said.

Even with the moves so far, the prospect of coal companies operating in a big way on federal land — and for any major job growth — is dim, in part because environmentalists have blocked construction of a coal export terminal, and there is limited capacity at the port the companies use in Vancouver.

Competition from other global suppliers offering coal to Asian power plants is also intense.

But at least for now, coal production and exports are rising in the Powder River Basin after a major decline last year.

Western Coal
The majority of United States coal is produced in the West, with a small share of it then exported. About 85 percent of coal extracted from federal lands comes from the Powder River Basin, in Wyoming and Montana. The Trump administration is rolling back an Obama-era moratorium on new coal leases on federal lands.
Opponents of the Trump administration’s direction have already gone to court. New Mexico and California sued in April to undo the rollback in royalties that coal mines pay, while ranchers like Mr. Hayes and the Cheyenne tribe joined a lawsuit in March challenging the repeal of a year-old moratorium on federal coal leasing.

“If we hand over control of these lands to a narrow range of special interests, we lose an iconic part of the country — and the West’s identity,” said Chris Saeger, executive director of the Montana-based environmental group Western Values Project, referring to coal mining and oil and gas drilling that the Interior Department is moving to rapidly expand.

Mr. Trump’s point man is Ryan Zinke, a native Montanan who rode a horse to work on his first day as head of the Interior Department. A former member of the Navy SEALs and Republican congressman, Mr. Zinke oversees the national park system, as well as the Bureau of Land Management, which controls 250 million acres nationwide, parts of which are used to produce oil, gas, coal, lumber and hay.

In late June, Mr. Zinke visited Whitefish, Mont., to attend a meeting of Western governors, where he vowed to find a balance between extracting commodities from federal lands and protecting them.
“Our greatest treasures are public lands,” Mr. Zinke said in a speech. “It is not a partisan issue. It is an American issue.”

Afterward, protesters from the Sierra Club and other groups held a rally in the town square against the actions taken by Mr. Zinke during his first months on the job, chanting “Shame!” and “Liar!” and carrying signs opposing his policies.

But Mr. Zinke was not in public view. Just before the rally started, he was inside a nearby building, meeting with Bill Cadman, a vice president of Whiting Petroleum, a company that drills on federal lands.

Until recently a state legislator in Colorado, Mr. Cadman has lobbied the Interior Department to repeal a rule that limits methane emissions from oil and gas sites on federal land. As he left the brief gathering, Mr. Cadman said he was only catching up with Mr. Zinke, whom he has known for decades, on family-related matters. He also acknowledged that Mr. Zinke wielded a lot of power over the energy industry.

“We are all affected by this constant regulatory quagmire,” Mr. Cadman said.

Seeing a Liberal Attack

Cloud Peak Energy had been preparing for several years to seize upon the arrival of an industry-friendly administration in Washington. But it was also prepared to fight without one.

At a gathering of a coal industry trade group in 2015, Mr. Reavey, the company’s chief lobbyist, left no doubts about the company’s determination to defend mining in the Powder River Basin, which includes operations here in Decker.

Mr. Reavey likened the industry’s existential crisis to that of tobacco companies in the 1990s. The coal industry, he told executives, had been targeted by a liberal conspiracy of environmental groups, news organizations and regulators. Coal would suffer the same fate as cigarettes, he warned, unless the industry stood its ground.
He showed a PowerPoint slide that outlined the strategy of the industry’s opponents. They sought to diminish coal’s “social acceptability,” the slide showed, while also cutting “profits through massive increase in regulation” and reduced “demand/market access.” He equated the situation to a scene in the film “Independence Day” in which the American president asks the alien invaders, “What is it you want us to do?” An alien replies, “Die.”

During President Barack Obama’s second term, the coal industry’s chief antagonist was Sally Jewell, a former oil industry engineer appointed Interior secretary in 2013. Ms. Jewell, an avid hiker, had also served as chief executive of the outdoor gear company REI.

She saw mining companies as a particular problem because they too often left behind polluted mine pits and paid too little for coal leases on federal land.

Starting two years ago, Ms. Jewell took a series of steps to change the relationship between coal companies and the federal government. She imposed a moratorium on new federal coal leases while beginning a three-year study of the industry’s environmental consequences. More than 40 percent of all coal mined in the United States comes from federal land, and when burned it generates roughly 10 percent of the country’s total greenhouse gas emissions.

Trump Rules

In addition, she called for greater transparency in the awarding of coal leases, and she backed an increase in the royalty payments made to operate coal mines on public lands.

“The corruption in the coal sector is just so rampant,” she said in an interview.

A central problem, she said, was the lack of competitive bidding for mining leases: Only 11 of the 107 sales of federal coal leases between 1990 and 2012 received more than one bid, according to a report by the Government Accountability Office. A second study, by a nonprofit think tank, estimated that the practice had shortchanged taxpayers tens of billions of dollars.

Another hot-button issue was how much to charge in royalties, which generate about $1 billion a year for the federal government.

Under federal rules adopted in 1920, coal companies are required to pay “not less than” 12.5 percent on sales of surface coal mined on federal lands. But for years, studies indicate, the companies paid far less — as little as 2.5 percent of the ultimate sale price — because they often negotiated large royalty discounts with sympathetic federal officials. Companies also often sell coal first to a corporate affiliate at a sharply reduced price, before reselling it to the intended customer, costing the government a chunk of its royalties, according to the Government Accountability Office study. The technique was particularly popular among mines with foreign buyers.
To eliminate the loophole, the Interior Department adopted a rule last year requiring that the payment be calculated on the first arm’s length transaction, meaning sales to corporate affiliates would not count. Such a change would be a blow to the bottom lines of companies mining in the Powder River Basin, which accounts for about 85 percent of all coal extracted from federal lands, with a growing share headed to Asia.

The coal industry was bent on killing the rule, sending executives to plead its case to the White House and filing a federal lawsuit to block it. “They are liars, and they know it,” Mr. Reavey, the Cloud Peak lobbyist, said of those who suggested the industry was not paying its fair share in royalties.

Mr. Zinke, then a freshman congressman from Montana, stepped up as an important industry ally, trying unsuccessfully to derail the rule on at least four occasions. He raised objections during a budget hearing with Ms. Jewell at the witness table, signed two letters in opposition and sought to introduce language in a House appropriations bill to prohibit the agency from enforcing the rule.
The alliance between Mr. Zinke and the coal industry is well documented in his campaign finance disclosures.

Elected to the House in 2014, Mr. Zinke received $14,000 in campaign donations from the company that owns BNSF Railway, the chief transporter of coal in the Powder River Basin, as well as a total of $26,000 from Cloud Peak, Arch Coal and Alpha Natural Resources, three of the nation’s largest coal companies. Several of the donations arrived just as Mr. Zinke pushed in Congress to block the new royalty rule, campaign finance records show.

Finishing the Job

What Representative Zinke started, Secretary Zinke and his team were poised to finish.

In February, even before the Senate confirmed Mr. Zinke to his new post, Mr. Reavey of Cloud Peak was meeting at the Interior Department headquarters in Washington with President Trump’s political appointees. Among them was Kathy Benedetto, who was temporarily overseeing the division in charge of coal leases.
“We made clear that we thought this rule was bad and they had an opportunity to stop this process from going forward,” he said of the change in royalty payments.

Cloud Peak and other mining industry giants also put their objections in writing, asking the department to delay the rule until the industry’s lawsuit was resolved. Within days, they got their wish. The agency, reversing its position during the Obama presidency, froze the rule and told Cloud Peak and other industry lawyers that they had “raised legitimate questions.”

By late March, after Mr. Zinke was sworn in, the rollback continued. Mr. Zinke repealed Ms. Jewell’s moratorium on new coal leases, and canceled further work on the study she had ordered. The first part — 1,378 pages examining 306 active federal coal leases — had been issued in January.
“Costly and unnecessary,” Mr. Zinke said in announcing that the study was, in essence, being thrown in the trash.

The decisions caused an uproar among Democrats in Washington, but the tensions they unleashed were also on display this summer at an extreme sporting event on the Crow Indian reservation, not far from the coal mines here in Decker.

Hundreds of people, including members of both the Crow and neighboring Cheyenne tribes, had gathered for an annual competition known as the Ultimate Warrior. The event consists of a mile run to a river, a mile of canoeing, seven more miles of running and then a nine-mile bareback horse race.

Cloud Peak is a sponsor of the event. In 2013, the Crow had signed an agreement giving the company the right to extract up to 1.4 billion tons of coal on the tribe’s lands. The industry-friendly approach of the Trump administration had leaders feeling optimistic that Cloud Peak would move forward, as the project still needs many permits from the federal government.

The tribe estimates the Cloud Peak operations could generate $10 million in payments for a community where the unemployment rate in June was 19.4 percent, five times the state average. “Coal, for us, is the ticket to prosperity,” said Shawn Backbone, the tribe’s vice secretary, who attended the warrior competition. “We are rich in coal reserves. But we are cash poor.”

But the Cheyenne are not happy. They have historically opposed coal mining and worry Cloud Peak’s expansion would irrevocably damage the environment. They have joined the lawsuit by the nearby rancher, Mr. Hayes, challenging the decision to lift the moratorium on new coal leases.

“We are wealthy in life here,” said Donna Fisher, a Cheyenne who lives along the Tongue River and who attended the warrior competition with her grandson. “We don’t have money. But we have land, water and air. Snuff that out and we are gone.”
Friends in High Places

As he walked on stage at the governor’s gathering in Whitefish, Mr. Zinke exuded confidence. The United States, he argued, can and should expand energy production from its federal lands, with money earned from leases going toward repairs to roads and bridges, and at national parks.

“As Interior secretary, I am looking at both sides of our balance sheet,” Mr. Zinke said. “There is a consequence of not using some of our public land for the creation of wealth and jobs.”

It was a decidedly familiar venue, and Mr. Zinke was relaxed. Whitefish is where he played guard on the high school football team and where as a Boy Scout he had built a rope-and-pole footbridge over the river.

“I think I am probably the only person who has played trombone on this stage,” he joked in his opening remarks.

The top sponsors of the event were familiar, too. They included Anadarko Petroleum and BP, oil and gas companies, as well as Barrick Gold and Newmont, mining companies. BNSF, the railroad, was also represented, as were major coal-burning utilities like Southern Company.
Most of them had a keen interest in the Interior Department and Mr. Zinke’s new stewardship of it. Barrick’s Cortez mine, for example, has a pending application to expand open pit mining in Nevada, while Newmont is seeking approval for the environmental cleanup of a Nevada mine.

Conrad Anker, a mountaineer and author, took the stage after Mr. Zinke. He said in an interview that organizers had instructed him not to mention climate change, or its effect on the glaciers at Glacier National Park. According to a federal study, the glaciers have lost as much as 85 percent of their mass over the past 50 years.

There was no such restraint on the nearby town square, where protesters flashed signs with slogans like “Zinke Sells Soul to Big Oil” and “What Would Teddy Do?” — a reference to Mr. Zinke’s statements that he admired President Theodore Roosevelt, a conservationist who helped set aside millions of acres as public land.

Next to the square, at a pizza restaurant, a once-powerful Washington couple reflected on the frustration of those opposed to the administration’s new direction.

Jennifer Palmieri, a senior adviser in the Obama White House and later a top campaign aide to Hillary Clinton, was eating with her husband, Jim Lyons, an Interior official during Mr. Obama’s second term.
Both had expected senior administration roles had Mrs. Clinton won. Now, Mr. Lyons was in Whitefish trying to salvage the rules on oil, gas and coal that he had helped develop just a few years ago. He was holding sessions with governors hoping to enlist them to pressure Mr. Zinke and others.

“Instead of driving change, we are searching for ways to continue to be an influence,” Mr. Lyons said. “Frustration is an understatement.”

There’s a Pernicious Economic Theory Creeping into the Heart of the Democratic Party

If a picture’s worth a thousand words, what’s the value of a single word?

If you’re a Democratic Party leader and the word is “compete,” the answer may be: more than you can afford.

Much of the Democratic Party’s rhetoric has been ‘Uberized’ by a creeping free-market ideology that treats workers as lone competitors in a survival-of-the-toughest economy.

The time has come to reject this language as well as the thinking behind it. The notion that people must compete with each for low-paying jobs undermines worker solidarity and weakens our sense of national community.

Better Than What?

When the Democratic Party rolled out its “Better Deal” language in July, Senate Democratic Leader Chuck Schumer and House Minority Leader Nancy Pelosi each wrote op-eds promoting an agenda whose subtitle is, “Better Jobs, Better Wages, Better Future.”

An earlier version of that slogan – “Better Skills, Better Jobs, Better Wages” – was roundly criticized when it was leaked to a reporter, and rightly so. That phrase first appeared in an op-ed by Sen. Tim Kaine, who wrote:

Better skills in our people and communities … will make us more competitive in a world where talent is now the most precious resource. We need to double down on retraining people whose jobs are destroyed by shifts in trade.

Those words offer nothing new to the American people. They could have been lifted from a speech Bill Clinton gave in 1993, when he declared that “workers in advanced countries must become ever more productive to deal with competition from low-wage countries on the one hand, and high-skilled, high-tech countries on the other.”

Since those words were spoken more than a quarter-century ago, millions of American jobs have been lost to bad trade deals that shifted work overseas and wealth upward.

Misguided government policies and greedy business practices ended a thirty-year period in which wages kept pace with productivity growth, resulting in soaring inequality and stagnating wages for American workers. Increasingly wealthy individuals in corporations have, in turn, used their money to hijack the political process.

No retraining program on Earth can prepare workers for jobs that don’t exist. And, as long as inequality remains the highest it’s been since the 1920s, “competitive” education strategies will do little to improve wages or social mobility. To beleaguered workers, the phrase “better skills” reinforces the perception that an out-of-touch elite would rather blame the victims of its policies than take responsibility for its actions.

Better jobs, better wages, better luck next time.

Better Than That

The finished slogan was a notable improvement from the beta version. The phrase “better skills” was gone, replaced by the noncommittal “better future.”

It was a welcome surprise to see Democrats taking on corporate monopolies and the rapaciousness of Big Pharma as they rolled out the “Better Deal” platform.

Those fights can energize voters if they’re properly framed and presented – as in,“these corporations are so big they think they can do what they want, but we’re gonna stop ‘em” – especially if they’re complemented by strong stands on labor, trade, Medicare and Social Security expansion, and other populist issues.

But it was disappointing to see both Sen. Schumer and Leader Pelosi echo Kaine’s unsupportable claims for worker retraining in their respective op-eds. Schumer wrote that “millions of unemployed or underemployed people particularly those without a college degree, could be brought back into the labor force or retrained to secure full-time, higher-paying work.”

The only concrete proposal he offers, however, is a training tax credit for businesses that’s unlikely to make a dent in unemployment. It won’t reduce inequality, either. As economist Lawrence Mishel wrote in 2011: “… workers face a wage deficit, not a skills deficit.”

The Ideology of Competition

For her part, Leader Pelosi promises a “fresh vision” from the Democratic leadership before saying, “It is time to ignite a new era of investment in America’s workers, empowering all Americans with the skills they need to compete in the modern economy.”

Compete? Democrats need to reject the idea that workers should “compete” with each other for jobs. That ideologically charged concept gained momentum in the 1990s, as the party’s institutional fundraising shifted its emphasis from unions to corporate donors.

Today we see the logical end-point of that ideology in the “Uberization” of American labor, as increasing numbers of workers are forced to scrabble like crabs in a barrel for low-paying piece work – or worse, as with Uber, are pressured to go into debt for car loans they must assume in order to “compete”

It’s no coincidence that high-ranking Democratic operatives have been associated with both Uber and its major competitor, Lyft.

The ideology of competition owes a great deal to “new economy” popularizers like Thomas Friedman and economists like Tyler Cowen, both of whom proclaim that “average is over.” It’s a cold-blooded ideology.

In his book of the same name, Cowen argues that we will be led by an elite he calls the “hyper-meritocracy” (he seems to use “merit” and “income” interchangeably), while a majority of people miss out on the benefits of the new economy.

Gone are the days when popular culture celebrated the “average Joe” or “average Jane.” In the world of worker-on-worker competition, only those who are exceptionally talented at making money will get ahead. Forget the folks who work for a living, love their kids, and serve their communities.

This ideology demands that we make heroes out of the billionaires who earned their wealth from the Internet, a government-created technology. The merely “average,” those heroes and heroines of mid-twentieth century films and TV, are left to fight over scraps from the “hyper-meritocracy’s” table.

The Language of Community

To be fair, there’s every likelihood that Nancy Pelosi was using the political language of her party without considering its origins or rhetorical baggage. She may not have intended to embrace that language’s ideological overtones. But language shapes thought, and it must be changed when it bends thought in the wrong direction.

“Compete”? Candidates compete when they’re applying for jobs, of course. But once they’re hired the competition should end. The history of organized labor – once the bedrock of the Democratic Party – is founded on the realization that individual workers cannot compete with powerful corporations in the fight for economic justice.

It’s not a perfect history. But it’s no accident that the greatest period of shared prosperity in our nation’s modern history coincided with its highest percentage of unionized workers. Or that, conversely, inequality grew as union membership fell.

Instead of training workers to “compete” for non-existent jobs, Democrats should create those jobs – by investing in infrastructure, by renegotiating bad trade deals, and by making the government the employer of last resort. And they should do more: they should call us together, by working with outside activists to form a broad coalition for economic and social justice.

Americans are a highly individualistic people in many ways. But we are also a nation with strong communitarian values. Those values can be found in our admiration for those who make sacrifices in times of war. They can be found in our willingness to help one another when disaster strikes. They can be seen in Fourth of July parades, or in clothing drives at the local fire station.

There is a yearning in this country – a yearning to belong to something greater than one’s self. Rather than asking workers to “compete” with each other, the new leaders of the American left should ask them to collaborate – in labor negotiations, in new forms of public service, in acts of selfless devotion to one another and the nation as a whole.

The Democrats should fill out the hazy language of the “better deal” with concrete proposals to improve people’s lives. Repeating the phrase like a mantra will hurt, not help, unless there is substance behind it. Voters have been burned by vague promises before. They’ll need clear commitments this time around.

But Democrats should also be brave enough to call Americans together again – as working people, as a movement, and as a community. After all, nobody can really offer us a “better deal” unless they ask us to give our best in return.

 

Richard (RJ) Eskow is a blogger and writer, a former Wall Street executive, a consultant, and a former musician.