NDN Blog

Krugman - War on Wages

Paul Krugman is - excuse the pun - waging war. And his use of Wal Mart as an example of exactly how companies chose to depress paypackets is interesting. (I'm quoting here from Mark Thoma's longer extract.)

The problem from the company’s point of view, then, is that its workers are too loyal; ... not enough workers quit before acquiring the right to higher wages and benefits. Among the policy changes the memo suggested to deal with this problem was a shift to hiring more part-time workers...

And the strategy is being put into effect. ... Wal-Mart ... wants to transform its work force to 40 percent part-time from 20 percent.” Another leaked Wal-Mart memo describes a plan to impose wage caps, so that long-term employees won’t get raises. And the company is taking other steps to keep workers from staying too long: in some stores, according to workers, “managers have suddenly barred older employees with back or leg problems from sitting on stools.”

Krugman's remarks put into practical view something that Rob Shapiro has discussed before - how company's are forced to depress wages in order to remain competitive in the face increased competition:

The first effect of an increase in competitive pressures is that companies find it harder to raise their prices, even when their costs increase. For example, health insurance and energy costs have risen by more than 60 percent since 2001, and pension costs have gone up sharply as well for many of them. When a firm’s costs increase and competitive pressures prevent it from raising its prices enough to cover those cost increases, it has to find other costs to cut – and most have turned to jobs and wages. And that’s what’s been happening in the United States.

And, as NDN has been saying for a while, this is is why this happens. So good job to Krugman for keeping the pressure on.

 

 

Another reason to understand the New Media

The purpose behind our New Politics Institute (featuring a new website!) gets tremendous validation from this article in this morning's Post. In it, John Harris points out that the Foley scandal, Senator Allen's "macaca" comment, and the interview between former President Clinton and Fox's Chris Wallace all had one thing in common: "each originally percolated in the world of new media." Touching on the dichotomous nature of the New Media, he adds that "a changed media culture that creates new perils for politicians also provides new forms of refuge."

(Hmm. Maybe I should link to our new NPI site again, since this article underscores the importance of realizing the influence new media has on politics.)

 

Pelosi, the economy and the missing $5000

The FT this morning highlights Nanci Pelosi banging the economy drum.

Speaking at Georgetown University in Washington, the Democratic leader, who represents San Francisco on Capitol Hill, said most Americans had suffered income stagnation in the past five years. But she avoided giving a clear diagnosis of why that had happened.

“There are those who will say that our economy is successful for everyone because corporate profits are the highest share of GDP in 50 years,” said Ms Pelosi. “But the incomes of middle class families have declined for five straight years . . .  People are working more productively than ever but their purchasing power is down. The cost of everything – from housing to healthcare to energy – is tightening the middle-class squeeze.”

Although it has been criticised for lacking in depth, the Democrat party’s economic platform appears to be tapping into widespread economic anxiety among voters that is expected to help the opposition party at the polls in November.

All of this is to the good. As we pointed out in last week's memo on the economy, it isn't just the median family has lost roughly $1250 in income under the President. It s that if trend rate of income growth under Bush had matched four comparable years under Clinton, the median family would be more than $5000 better off.

Desperate Times...

Rick O'Donnell, the Republican running in the Colorado 7th Congressional District, is down by 11% in the latest Reuters/Zogby poll, and he's getting desperate.  Exhibit A: his latest ad which uses grainy images of Hispanics to try and scare voters and convince them that his opponent is soft on immigration and border security.  A pretty hypocritical move from a member of the party that failed to pass immigration reform

CAP / SEIU Shows "Middle Class in Turmoil"

Those billionaires are back, but this time they aren't so keen on Bush. The DOW might be shooting up, but for the first time an influential survey of business chiefs has found that a majority expect the economy to decline next year. There was also more bad news yesterday, when Ben Bernanke gave his official blessing to the tanking housing market. There is a some danger now that President Bush's last years in charge of the American will involve questions more testing than: "things are going well - why don't i get any credit?" But on that very issue, an important and interesting report came out from CAP and the SEIU last week - Middle Class in Turmoil. It adds to Jacob Hacker's work, which uses increased risk as an explanation for the public's economic bad cheer, and lays out various new measures on why middle class families have insufficient savings to cope with bad luck, or bad circumstances. They use a composite indicator, and use it come up with this graph , showing a sharp decline in middle class security.

Much of this comes from issues well known to NDN - inadequate demand begets slow job creation begets less than full employment begets stagnant wages and incomes, all compounded by a sharp increases in many consumer product prices. But CAP add various other stats, in particular that the number of American families with 3 months of income in liquid financial wealth fell by 6.2% from 2001-2004, while the number of families who could sustain themselves through unemployment decreased from 39.2% in 2001 to 28.8% in 2004. The report shows CAP and their allies at their best when turning out well researched yet politically relevant analysis. It is well worth a read.

Calls For Hastert To Go

A good round-up of "hastert must go" calls from the excellent Democratic Strategist.

First there was the Washington Times, not exactly the intellectual vanguard organ of the conservative movement. Now, however, the higher-browed conservative opinion leaders have begun to weigh in. Bloomberg.com quotes Tom Winter, editor-in-chief of the conservative weekly magazine Human Events :"We think the Republicans need new leaders, and I don't think Hastert will be there much longer...I think he has to do this for the team, he has to step down."

Maggie Gallagher can’t resist getting in a few licks against the Democrats en passant, but she gets to the point in her National Review Column “Hastert Must Resign,” as does NRO National Economics Editor Larry Kudlow in “Step Aside, Speaker Hastert: This goes way beyond Foley.”

 

"Fair" and "Balanced"

Of all the coverage being given to Foley scandal in the last week, by far the greatest reaction has come from this image:

Fox's mistake, which seems, if anything, to validate Bill Clinton's "conservative hit job" comment, has caused uproar all over the online community. BradBlog was the first to capture the screenshot, DailyKos followed suit, along with The Huffington Post (here and here), eventually ending up on the Washington Post's blog OFF/beat; TPM's Josh Marshall reported that, perhaps worse, the AP made the same blunder--though later corrected it.

Surely, one way to fan the flames of a Republican sex scandal is to have the premier conservative news outlet misreport it!

A Tale of Three Trade Policies

When did Republicans stop supporting trade liberalization?  New US Trade Rep. Susan Schwab said that the United States "won't try to revive the [Doha] talks by being the first to make a new agricultural offer."  Remember, just one year after the Doha Round began in 2001 President Bush signed into law a farm bill that actually increased subsidies to large agribusiness companies.  For more on the failures of Presidential leadership on trade read the NDN Globalization Initiative's recent report Rebuilding the National Consensus on Trade.

Compare the administration's inaction on Doha with the Democrat who may be the next  Chair of the Ways and Means Committee, Rep. Charlie Rangel.  In an insightful article from yesterday's Financial Times, Rangel talks about supporting a new push on Doha and even the renewal of trade promotion authority for President Bush.

Another contrast to the Bush Administration's leadership failures on trade is the European Union, which is talking about overhauling its trade policy to deal with the 21st century globalize economy:

Brussels said its new strategy would strike a balance between helping to develop new markets, ensuring fair competition for European firms abroad and ensuring open access to its own markets.

"A changing global economy needs a new trade policy," said Peter Mandelson, the EU's Trade Commissioner.

The magic of October

I became a Mets fan in 1969.   It was their magical year, and I was just old enough to start following the game in earnest.  I have been a loyal and passionate fan ever since. 

When I went into politics full time I had not thought through all the consequences of my career choice.  You see October is a busy time in my day job, making it a whole lot harder to follow my boys when they make their October run.  I missed big chunks of the 2000 playoffs, when they went all the way to the World Series.  And yesterday I missed Delgado's home run and David Wright's two doubles on their way to a first game win.  But this year I have three surrogates, rooting at home, wearing their Mets clothes - Jed, Will and Kate, my three kids.  They all wore their Mets gear yesterday, bought by grandpa, another die-hard Mets fan. My oldest son Jed, the same age now I was in 1969, regaled me with stories of the game when I got home last night.  He has caught the baseball virus, no doubt about it. 

A few years ago when I would go to New York I would joke that I was both a Mets fan and a Democrat, suffering at the superiority of the Yankees and Republicans.  What is so sweet this October is that it sure appears that we Mets fans and Democrats are not a suffering lot anymore. 

NPI launches completely revamped website and new "Engage the Blogs" Memo

The new website is filled with new features and new content, including video of a multimedia talk that gives an overview of the New Politics transformation, an edited viral video introducing the Millennial Generation, and exclusive video interviews with Kos of DailyKos and other NPI fellows. All can be accessed from the front page or the video page.

We're also unveiling the next recommendation in our fall New Tools Campaign. Make sure to read “Engage the Blogs,” a memo by longtime blogger and internet strategist Jerome Armstrong, coauthor of the book Crashing the Gate. Armstrong explains how progressives can best leverage the blogs over the coming weeks and months, as well as think of them as a long-term asset.

We forward to your feedback on the new website and hope you will check back frequently in the coming weeks as new features and new content are added to the site.

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