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Daily Clips: August 29th, 2016

Trickle down is on its way to history’s dustbin: So tax cuts for the rich, deregulation for the powerful, and wage suppression for the 99% aren’t winning the economic battle anymore. That much is clear. And that’s great. But what is filling the economic void in America? According to Felicia Wong and Dorian Warren:

The emerging progressive economic agenda, which calls for rebalancing power at the top, strengthening our labor market by creating strong floors of standards and greater access for the most vulnerable workers at the bottom, and investing in public goods and economic security through a more robust role for the state, is the antidote to neoliberal tax-cutting.

Solid US consumer spending boosts prospect of Fed rate hike: US consumer spending increased for the fourth straight month. An interest rate hike looks more and more likely, as a result.

The snooze economy: Gotta say, catchy headline there, Robert J. Samuelson. His analysis is less praiseworthy, but its always intriguing to see how right-of-center thinkers view the economy. I like how he points out that “if you’re not confused [about the economy], you’re not paying attention.”

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Daily Clips: August 26th, 2016

Want economic prosperity? Go to a Democratic state: An excellent overview from the NYT on economic indicators of individual states. Here’s one of their conclusions:

Red states dominated by Republicans embrace cut and extract. Blue states dominated by Democrats do much more to maintain their investments in education, infrastructure, urban quality of life and human services — investments typically financed through more progressive state and local taxes. And despite what you may have heard, blue states are generally doing better.

Americans are embracing transgender rights: Wow – a recent poll found 72 percent of Americans favor laws that protect LGBTQ people from discrimination.

Most welfare dollars don’t go directly to poor people anymore: Ugh.

Yellen says case for rate hike has “strengthened in recent months”: I plead ignorance over whether or not this is sage judgement.

David Brooks is a moron: He lectures Clinton on her lack of “grace”, but doesn’t say a word about…oh, you know…the white nationalist representing his party. What the f*** is he thinking?

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Daily Clips: August 25th, 2016

The Federal Reserve needs new thinking: When the Wall Street Journal starts questioning the status quo, you know economic thinking is in flux.

Democratic women can take the Senate back: “In five of the seven states where Democrats have a strong chance of picking up seats, the candidates are women.”

The plight of the over-worked nonprofit employee: Here at Civic Skunk Works we feel quite strongly about overtime pay—by that I mean, we think it’s a basic labor right. Crazy, I know. Not everyone shares this view with us, however. Many nonprofits think they should be exempt from Obama’s new overtime rule. But that seems…odd. Listen to how a nonprofit veteran explains the situation:

Too often, I have seen the passion for social change turned into a weapon against the very people who do much—if not most—of the hard work, and put in most of the hours…Because they are highly motivated by passion, the reasoning goes, they don’t need to be motivated by decent salaries or sustainable work hours or overtime pay.”

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The Free Market Doesn’t Care If You Live or Die

Kind of fitting that the American Psycho loves tanning beds, isn't it?

Kind of fitting that the American Psycho loves tanning beds, isn’t it?

This Associated Press story about the tanning industry is so terrible you just have to stare at it for a second, slack-jawed:

Business owners around the country say the little-noticed 10 percent tax on tanning in President Barack Obama’s health care overhaul has crippled the industry, forcing the closing of nearly 10,000 of the more than 18,000 tanning salons in the U.S.

It’s like a hideous traffic accident, this thing. The unnamed reporter quotes a tanning salon owner from Kentucky with a sentence that is basically Trickle Down 101: “When I go to vote, I’m supporting candidates who are pro-business and who want less government involvement, less government regulation.” Uh-huh. So the tragedy of over-regulation is killing your business. Got it. But why is the mean old government targeting these brave entrepreneurs? What does Obama have against innocent small business owners?

The story buries the lede way down in the fifth paragraph: “The American Cancer Society Cancer Action Network says those who use tanning beds before age 35 increase their lifetime risk of melanoma, the deadliest type of skin cancer, by 59 percent.” That is a staggering figure. Not even cigarettes claim that kind of cancer rate.

But could you imagine a similar story featuring cigarette manufacturers complaining about rampant government intervention? Of course you can’t, but that’s because we’ve passed a tipping point—in modern American society, smoking is no longer widely acceptable. Our leaders made it so cigarette manufacturers couldn’t advertise to children, our governments taxed cigarettes, they made smoking indoors in public spaces illegal, they funded studies to explore the health impacts of smoking. It was the work of multiple generations of leaders, and it will save millions of lives in the long run.

Could you imagine a libertarian free market solution to smoking? Or what our nation’s health would look like if we allowed the invisible hand of the market to decide the fate of tanning salons? Without the Affordable Care Act’s tax on tanning beds, without local laws banning teenagers from using tanning beds, what are the odds that young Americans—a group that, I note as a former smoker, is famously bad at making healthy choices—would suddenly turn away from the tanning industry en masse?

This is when people start dragging “freedom” into the conversation to muddy things up. You can argue all you want that the Founding Fathers wanted us to be free to tan ourselves to melanoma-town, but I would argue that the freedom to make uninformed choices in an environment where unregulated industry has a bottomless well of money with which to persuade public opinion is no kind of freedom at all. In fact, given that government tends to enforce public-health solutions that extend the lives of the general population while industries like cigarette manufacturers and tanning salons tend to extract profits from people until they die at a young age, I’d much rather choose the freedom of a long life.

And of course, the tanning industry doesn’t pay the medical bills of those afflicted by skin cancer—we do, in the form of increased health insurance premiums and Medicare payments. So for many years, the true cost of tanning salons were protected from the free market by government nonintervention. In effect, without that tax we were all subsidizing the tanning industry’s impacts.

All of which brings me to EpiPens. Matt Novak at Gizmodo writes:

EpiPen, the life-saving allergy product, is now a $1 billion a year business for Mylan, a drug company that’s currently enduring a wave of bad publicity over the extraordinary surge in EpiPen pricing. In 2007, an EpiPen cost about $57. Today that price has skyrocketed to over $600—all for about $1 worth of injectable medicine.

In the last eight years, Ben Popken at NBC reports that Mylan’s CEO gave herself a raise “from $2,453,456 to $18,931,068, a 671 percent increase.” This is your free market at work, people. A highly profitable lifesaving allergy medication was deemed to be not profitable enough. And in true trickle-down fashion, those profits then climbed all the way to the top of the company…and stayed there.

The EpiPen story is a fascinating one because it debunks a couple of conservative free-market claims. Mitt Romney famously argued that the free market was terrific because “corporations are people,” which he later interpreted as meaning that investors in corporations are people. He defined trickle down as passing from consumers to shareholders. Which entirely abandons the over half of all Americans who don’t invest in stocks, but that’s a post for another time. My point is that Romney’s style of trickle down is not an efficient system at all: Popken notes that Mylan’s “stock price more than tripled, going from $13.29 in 2007 to a high of $47.59 in 2016.” If I were an investor in Mylan, I’d be pissed that the CEO was proportionally hoovering up way more profit than me.

Further, conservatives claim that the invisible hand of the free market is the most efficient tool to establish prices and distribute innovations. Not so in this case! The free market has instead ratcheted up prices of EpiPens to an unreasonable level, and it has effectively removed EpiPens from a portion of the population that could previously afford them. It has made the American people more unsafe, and it has funneled profits to a tiny portion of the population at the expense of the general public’s health.

The funny thing about free market arguments is that they’re always so clean and crisp when you’re talking about apples or widgets or other hypothetical products. But when you incorporate them into the real world—into industries that have real, moral effects on actual human lives—the free market arguments stop making sense. In fact, they careen into absurdity. In the real world, economics is a matter of life and death, and dorm-room Ayn Rand philosophizing is more than just annoying—it’s downright irresponsible.

Daily Clips: August 24th, 2016

Texas has highest maternal mortality rate in the developed world: “Pro life” policies.

The feudal origins of property tax: Property tax was first instituted by William the Conqueror in 1066, and King James “made sure that this system traveled overseas with the first settlers at Jamestown, so that he could partake in the profits of exploration of the new land.”

Why didn’t the Founding Fathers, who were looking to unshackle themselves from the norms of European monarchy get rid of property tax? In short, they needed the cash.

Berkeley put a tiny tax on sodas. Consumption went down 21%: How can you not be excited by these findings? Such good news. The long-term impact on obesity is still unknown, but this is a great first step.

Cost of U.S. healthcare now 800% higher per person than it was in 1960, even when adjusted for inflation

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Remember the High Costs of Unpaid Sick Leave When You’re Voting This Fall

The Other Washington guests Jessyn Farrell and Bill Marler.

The Other Washington guests Jessyn Farrell and Bill Marler.

This fall, Washington state will vote on Initiative 1433. Many Washingtonians know that a “yes” vote on 1433 will raise the state minimum wage to $13.50 by the year 2020. But fewer people know that 1433 also provides up to seven days of paid sick and safe leave for workers per year.

This is so important. Over a million Washington workers have no access to paid sick leave, which means that a missed day of work results in the disappearance of one-fifth of a weekly paycheck for those who work 40 hours a week. Many minimum-wage workers simply can’t afford that kind of a hit to their weekly pay; an unpaid sick day could mean the difference between paying rent or driving up credit card debt yet again. And many of these workers are in the food service industry, which means that when they show up to work sick, they put all their customers’ health at risk.

For the latest edition of our podcast, The Other Washington, we talked with 46th District State Representative Jessyn Farrell about why she supports paid sick and safe leave. She makes a great case for the initiative to provide sick leave for food service workers, but she also makes a strong, personal case for family leave: Farrell was born with a quarter-sized hole in her heart, and the economic impact of that birth defect was hugely consequential in her family.

We also talked with food safety lawyer Bill Marler about the nearly quarter-century he’s spent fighting companies that make customers sick. Marler is one of the world’s leading experts on foodborne illnesses, and he provides a compelling case for allowing sick workers to stay home. The tiny amount that employers like Chipotle are saving by not providing sick leave is insignificant when viewed in comparison to the millions—even billions—that companies pay out to sickened customers after protracted legal battles.

We hope you’ll enjoy this latest episode of The Other Washington, though—just being honest, here—you might not want to listen to it while you’re on your lunch break. And remember to vote yes on Initiative 1433 when your ballots arrive in the mail this fall.

Daily Clips: August 23rd, 2016

Tax cuts for the rich aren’t needed in today’s economy: If you are a believer of supply-side economics, you are probably a fan of wealth accumulating at the very top. You probably believe it is best when these “job creators” are unconstrained by the burdens of civilization and are allowed to use their wealth creatively. That economic view, however, is remarkably inept (for a variety of reasons) and borders on sinister, as Bruce Bartlett points out:

When asked about the newly announced Trump tax plan and the deficit, Bartlett told us by email that all Republican tax cuts ‘are designed to lose revenue’ and ‘create deficits,’ despite any statements made to the contrary.

‘Then when deficits emerge, they must always be dealt with only by cutting spending,’ Bartlett writes. ‘If tax increases are necessary they will be in the form of sales taxes paid largely by the poor.’

David Brooks waxes lyrical about spirits or something: Brooks’ reflex for relating any problem to a lack of spiritual or self-awareness is truly mesmerizing. In his latest column, he wonders if American leadership has failed not because of quantifiable outcomes like increased partisanship, but instead because our leaders don’t have a “sense of vocation.” What exactly does that mean? Nothing, really. He does take a swipe at Hillary Clinton though, because, you know, she’s evil. And her opponent isn’t a lunatic who needs to be lambasted.

Oregon collects $25.5 million in marijuana taxes since start of the year. Here is how some of the tax revenue will be spent: “40 percent will go to the state’s Common School Fund, 20 percent to mental health, alcoholism and drug services, 15 percent to Oregon State police, and 10 percent for city law enforcement…”

US new-home sales climb to best level since late 2007: Obamacare is continuing to decimate the American economy.

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Daily Clips: August 22nd, 2016

Why Hillary Clinton might win Georgia: The GOP is so screwed.

Western economies and their minimum wages: This study looks at minimum wages and their relation to a country’s median wage. Predictably, one can see that the US has let the purchasing power of their minimum wage descend since 1980:

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How the first liberal Supreme Court in a generation could reshape America: Dylan Matthews’ latest is a brilliant piece of historical work, correctly pointing out that “over the past half-century liberals have been playing defense as an organized and well-planned movement of conservatives has limited the scope of rights trumpeted by liberals.” His analysis rings true. For the past fifty years, the American conservative movement has largely been a reactive. They gain support through saying “no” to progress. See abortion, women’s rights, voting rights, welfare reform, gay marriage, minimum wage. The list could go on.

But finally progressives have an opportunity to have the SCOTUS on their side. As Matthews notes, “Scalia’s vacancy and Kennedy’s coming exit have opened the door for liberals to rethink American law in dramatic ways.”

Twenty years since welfare “reform”: Our own Hanna Brooks Olsen writes an incredibly detailed review of welfare reform. Read it.

Daily Clips: August 19th, 2016

Obamacare hits a bump: Krugman looks at the ACA since it took full effect in January of 2014. Private insurance companies, he notes, “are now finding themselves losing money, because previously uninsured Americans who are signing up turn out to have been sicker and more in need of costly care than we realized.”

That intuitively makes sense. And as a result, some insurers have hiked premiums and some (like Aetna) are pulling out of the ACA. That is a problem. Especially because private insurers don’t want the government to offer a public option. Krugman asks, “But if these insurers aren’t actually interested in providing insurance, why not let the government step in?”

A good question, Paul.

Donald Trump is the least of the GOP’s problems: I don’t agree with all of the author’s premises, but this point in particular I found to be compelling:

Trump is desperately trying to fashion a new reactionary politics out of the bits and pieces that are now left to it: a white nationalism that draws its animating energies from its hostility to a black president, immigration, and Islam. But the evidence is increasingly clear that that kind of politics simply does not possess enough appeal to propel him or any other similar candidate to the White House.

Why women are no longer catching up to men on pay: It turns out that “wage gains have gone disproportionately to people working longer hours” and the people working longer hours are primarily men.

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Daily Clips: August 18th, 2016

Aetna threatened to quit Obamacare…even though their market cap has tripled since 2012: Have they no shame?

The Breitbart alt-right has taken over the GOP: 

Trump lives in a Breitbart fantasy world, and he’s now invited Bannon to personally decorate that world for him. The GOP establishment, too weak and cowardly to oust Trump earlier, risks displacing the true, constitutional conservatives for whom the party has been a natural political home, and now it looks prepared to ride the Trump train, next to alt-righters, all the way into the electoral ravine.

The Class of 2016’s labor market: Here are some of the key findings from EPI’s report:

  • “Members of the Class of 2016 currently have better job prospects than the classes of 2009–2015.”
  • “For young college graduates, the unemployment rate is currently 5.6 percent (compared with 5.5 percent in 2007), and the underemployment rate is 12.6 percent (compared with 9.6 percent in 2007).”
  • “Young male college graduates earned 8.1 percent more in 2016 than in 2000, while young female college graduates earned 6.8 percent less than in 2000.”

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