Daily Clips: October 24th, 2016

Doomsayers keep getting it wrong on the minimum wage: Barry Ritholtz over at Bloomberg points out that minimum wage opponents have failed (again) at predicting the effects of a higher minimum wage. His reasoning behind why they got it so wrong is particularly acute, in my opinion:

Why did so many economists get this wrong? They looked at the micro and ignored the macro. In the basic model of supply and demand, an increase in the cost of something reduces demand. This may be true in an isolated laboratory setting. But when minimum wages went up in the real world, it affected not just the parties to that transaction, but the regional economy. By considering only the relationship between employer and employee, the dismal-science set was focusing too narrowly. The critics failed to consider the impact of lower-wage employees earning more money; these folks typically spends almost everything they earn, which means that when they’re paid more it goes right back into the local economy.

Down-ballot Democrats: With a little over two weeks to go before Election Day, President Obama is releasing “150 endorsements of Democratic candidates for state legislatures all across the country.”

Liberals compete for the soul of economics: Nick Hanauer’s love of complexity economics is highlighted in this piece.

Trump’s greatest service to America may be ending Paul Ryan’s career: Thank god.

Tweet of the day:


Daily Clips: October 21st, 2016

David Brooks equates Trump’s lack of morality with HRC’s: 

This year Trump is dismantling those restraints one by one. By savagely attacking Carly Fiorina’s looks and Ted Cruz’s wife he dismantled the codes of etiquette that prevent politics from becoming an unmodulated screaming match. By lying more or less all the time, he dismantles the fealty to truth without which conversation is impossible. By refusing to automatically respect the election results he corrodes confidence in our common institutions and risks turning public life into a never-ending dogfight.

Clinton has contributed to the degradation too. As the James O’Keefe videos remind us, wherever Hillary Clinton has gone in her career, a cloud of unsavory people and unsavory behavior has traveled alongside. But she is right to emphasize that Trump is the greatest threat to moral capital in recent history and that the health of that capital is more fundamental than any particular policy position.

Paul Ryan’s faith in “A Better Way”:

Indeed, frantic to lift his brand above the swirl of electoral filth, Ryan has wrapped himself in the role of policy missionary, his sights firmly trained on leading the American people into a better, brighter future—no matter how uninterested they may seem. Rejection, disdain, mockery, abuse: Ryan has endured them all in his proselytizing. (“I am not ready to support Speaker Ryan’s agenda,” declared Trump, during one of their passive-aggressive skirmishes.) But mostly, his efforts have been met with overwhelming indifference, which may be the most discouraging response of all for a man convinced that he holds a map to the Promised Land.

Voter suppression is a much bigger problem than voter fraud: Someone should tell Kim Wyman.

Daily Clips: October 20th, 2016

Trump’s refusal to accept election’s legitimacy is no surprise:

…by insisting the election is rigged, Trump won’t have to acknowledge that he lost, something that could shatter his self-image. In the mind of Donald Trump, there’s nothing worse than being a loser. By avoiding conceding, by claiming that the election was stolen and fixed, then he won’t really be a loser after all.

We’re working harder, so why is productivity plummeting? A lot of great theories are presented in this piece, some of which I’d never considered before. Example: “some tech proponents have theorized that productivity is not being counted correctly.”

Paul Ryan’s favorable rating among Republicans drops 28 points – in a week: Couldn’t happen to a more deserving person.

ST3 is the transit system our region has needed for 40 years: Yep. Vote Yes on Prop 1.

Colorado poll workers trained to respond to mass shooting: Greatest country on earth.

Tweet of the day:

Hillary Clinton Just Explained How She’ll Grow the Economy from the Middle Out: Here’s What That Means

One of these two people knows how to fix the economy. The other one  is Donald Trump.

One of these two people knows how to fix the economy. The other one is Donald Trump.

Donald Trump made headlines at tonight’s presidential debate by refusing to say whether he would accept the results of the election on November 8th. And that should absolutely be the top media takeaway from the debate; it’s unprecedented in modern history for a presidential candidate to deny the legitimacy of an election. This puts the peaceful transfer of leadership that has been at the heart of our democracy at risk.

But it’s important to remember that there were two people onstage tonight. And while Donald Trump was busy unnecessarily imperiling the future of the United States for the sake of his own tremendous (and tremendously fragile) ego, we must also remember that Hillary Clinton was turning in her single best debate performance. Clinton was poised, prepared, and downright presidential up there.

Clinton didn’t just maintain her integrity in the response to the most erratic presidential candidate in generations—she articulated her case more clearly than she ever has. Specifically, she knocked it out the park when she talked about economics. More than she ever has, Clinton made a clear and concise case for why middle out economics is the only way forward for a prosperous America.

“I think when the middle class thrives, America thrives,” Clinton said early in the debate. “And so my plan is based on growing the economy, giving middle class families many more opportunities.” Clinton called for a jobs program that would reinforce America’s infrastructure and our investment in clean energy. She said she wanted America to compete with “high wage countries,” which is especially important considering Trump kept calling for us to compete with China and India and other low-wage nations.

Clinton correctly argued that we don’t want the kind of growth that comes with simply creating more jobs; we want more better-paying, higher-quality jobs. (If you’d like to learn more about middle out economics, Civic Ventures founder Nick Hanauer’s TED Talk remains one of the best crash courses available. If you want a deeper dive, Democracy Journal’s “Middle Out Moment” issue is a terrific resource.)

This next piece of Clinton’s argument is vitally important, so I’m going to quote it in full. (All of these quotes, by the way, come from Vox’s rush transcript of the debate, which is a tremendous public service.)

 I want to raise the minimum wage because people who live in poverty, who work full-time should not still be in poverty. I want to make sure that women get equal pay for the work we do. I feel strongly we have to have an education system that starts with preschool and goes through college. That’s why I want more technical education in high schools and community colleges, real apprenticeships to prepare people for the real jobs of the future. I want to make college debt free and for families making less than $125,000, you will not get a division bill from a public college or university if the plan that I worked on with Bernie Sanders is enacted.

This, right here, is the exact recipe to create lasting, quality growth in America. Raising the minimum wage and closing the gender pay gap is the first step, and it’s pivotal because it engages every worker in the economy. For too long, low-wage Americans have been basically frozen out of the economy because they’ve had no spending power at all, beyond meeting the most basic food, shelter, and transportation expenses required to survive.

Raising the wage enables them to participate in the economy as consumers, which increases demand and therefore creates more jobs. Once that happens, the encouragement of affordable education and apprenticeship programs allows workers to easily pick up the skills required to participate in a fast-moving 21st century economy. The days when Americans would go to work in the same factory for 40 years and then retire have passed. That’s not a bad thing, assuming every American has the opportunity to learn and adapt to the market throughout their lives.

Clinton acknowledges that the top one percent and corporations will have to pay more in taxes if we want to fight rampant inequality, but those taxes will help spur the growth that we haven’t seen under four decades of trickle down economics. Indeed, she acknowledges that Trump’s plan is “trickle down economics on steroids,” which would “give the biggest tax breaks ever to the wealthy and to corporations, adding $20 trillion to our debt.”

Later in the debate, Clinton was asked if she defended President Obama’s economic growth. She praised him for leading us out of the worst economic downturn since the Great Depression. “We’re standing,” she explained, “but we’re not yet running.”

“We’re beginning to see some increase in incomes, and we certainly have had a long string of increasing jobs. We’ve got to do more to get the whole economy moving, and that’s what I believe I will be able to do.”  In the end, she concluded, America needs to “invest from the middle out and the ground up, not the top down.”

It’s heartening to finally hear a presidential candidate get the economy exactly right. Clinton wasn’t proposing making rich people pay more in taxes because it’s fair, and she wasn’t arguing that we need to punish business to support workers. Instead, she clearly and directly made the case that we all do better when we all do better, that in order to make an economy work, everyone—from the top one percent to small business owners to young adults making minimum wage at their first full-time jobs—has to participate. If debates are the final test of a candidate’s fitness for the presidency, Trump absolutely failed on every single level. But more importantly, tonight Clinton passed with flying colors.


Seattle’s Jobless Rate Drops Below Four Percent in September

Seattle choo-choo-chooses a higher minimum wage! (God, I'm sorry.

Seattle choo-choo-chooses a higher minimum wage! (God, I’m sorry.)

Mike Rosenberg at the Seattle Times writes:

For the first time in more than eight years, the Seattle-area unemployment rate has dipped below 4 percent, a milestone in the region’s continued economic resurgence, according to new figures released Wednesday.

September’s 3.9 percent unemployment rate for the Seattle-Bellevue-Everett area is down from 4.1 percent a month prior, and 4.6 percent a year ago.

It is vitally important to note that we didn’t raise the minimum wage in Seattle so we could drive unemployment numbers down to nothing. Unemployment rises and falls in a dynamic economy, and Seattle’s unemployment rate will undoubtedly rise with the next recession. We raised the minimum wage because Seattle believes in inclusivity. The minimum wage was way too low, which was removing people from the economy. When everyone prospers, we all prosper more and the economy is strengthened in a positive feedback loop.

But this latest dip in unemployment is important because it refutes, yet again, the position that if we were to raise the minimum wage, restaurants would close in Seattle and automation would take all our jobs away and nobody would ever open a new business here. The sky has not fallen. (And now that some time has passed, people who were on the wrong side of the minimum wage fight will try to move the goalposts, claiming that nobody threatened those sorts of things. We can’t allow them to do that.  They most certainly did claim they’d never open new restaurants. Some argued that we’d lose a quarter of all restaurants downtown if the wage went up.)

We do not live in a restaurant-free hellhole. We are not scavenging for scraps in the empty husk of the downtown McDonald’s. The city is doing just fine, thanks. At some point, you have to apply Occam’s Razor to those threats and consider the source: maybe the restaurant owners who threaten apocalypse with every minimum wage hike are simply doing so because they don’t want to pay their employees more money?

Now, some might argue that Seattle would be doing even better if we didn’t raise the minimum wage. That argument is pretty dumb. Sure, we could goose unemployment numbers lower if we got rid of the minimum wage entirely, but then we’d be expecting those employees making $7, or $6, or $5 dollars an hour to figure out how to survive as human beings in Seattle in 2016. In fact, because that would literally be impossible, we’d likely be paying more in government programs for housing and food to subsidize low-wage employers.

So yes, the unemployment numbers are a great sign for Seattle. But they’re not just great because they mean more Seattleites are working — they’re great because they demonstrate that an economy doesn’t have to be a race to the bottom in order to succeed. Seattle is racing to the top by ensuring that even our lowest-paid workers have enough money to be full participants in the economy, and the sky hasn’t fallen. In fact, we’re flying high.



Daily Clips: October 19th, 2016

Would progressive economics win over Trump’s white working class voters? Mike Konczal is one of my favorite thinkers and he delivers an excellent piece on how the Democratic Party can bring-in disenchanted Trump supporters. He says:

The inability of liberals to use this opportunity to push an economic agenda that speaks to Trump’s voters is a waste, both because they are our fellow citizens and because winning them on the economics can defuse the very racism and authoritarianism that is scary about them.

Poll: Clinton up 4 points over Trump in Arizona: When pundits said Trump was going to redraw the electoral map, who knew this is what they meant?!

McCain vows that political gridlock will continue:

Whether this was a case of a politician revealing his true intentions, or — maybe more likely — a Republican playing to what he knew his partisan audiences wanted to hear, it’s a disaster for democracy and constitutional government.

Guns at polling places worry Virginia election officials:

The Prince William County electoral board, wary of the heated atmosphere of the coming Election Day, considered seeking a one-day ban on weapons at polling places located on private property but was rebuked by a gun-friendly state legislator. Late last week, Del. Robert G. Marshall (R-Prince William) sent a letter to the board pointing out that it has no power to ban guns from polling places except for schools and courthouses, where weapons are prohibited by state law.

Tweet of the day:

Daily Clips: October 18th, 2016

Small donors still aren’t as important as wealthy ones: Contrary to popular belief, the authors argue that “the truth is that small donors aren’t as important to campaigns as they were before internet fundraising became popular.”

Wal-Mart figures out that paying workers more helps retain talent: Turns out that Wal-Mart could afford to pay their workers better.

Trump: maybe Paul Ryan wants me to lose he can run in 2020: A broken clock is right twice a day.

Americans work 25% more than Europeans, study finds: 

“As recently as the early 1970s, according to several studies, people in the U.S. and Western Europe worked about the same number of hours per week.”

Tweet of the day:

Governor of Maine Claims an Increased Minimum Wage Will Kill Senior Citizens, Somehow

If you think this is a dumb thing for the governor of Maine to say, history indicates that you should just wait a couple days; he's sure to say something even dumber pretty soon.

If you think this is a dumb thing for the governor of Maine to say, history indicates that you should just wait a couple days; he’s sure to say something even dumber pretty soon.

And here I thought we’d heard it all before.

Every time a community considers raising the minimum wage, business owners and conservative politicians love to toss out threats. They’ll never open new restaurants again. They’ll have to close their existing restaurants. No new businesses will want to move in. When the minimum wage is adopted, of course, those threats prove to be empty. Businesses keep opening and existing businesses keep hiring.

As Civic Ventures co-founder Nick Hanauer notes, a National Employment Law Project study found that when you measure all of “the nearly two dozen federal minimum wage hikes since 1938, total year-over-year employment actually increased 68 percent of the time.” The few times when employment stayed flat or decreased? They generally unfolded during recessions, when employment always decreases or stays flat.

The American people have finally figured out that these threats are baseless. Minimum wage increases are polling incredibly well around the country, because people understand that raising the minimum wage doesn’t kill business — in fact, when more people make more money, businesses have more customers. So I’ve figured for a while that conservative minimum-wage opponents were going to try to figure out a new tack; after all, they need to figure out a way that will allow their base—the top one percent—to keep their money.

I just didn’t figure that new tack would be quite this crazy:

[Maine] Gov. Paul LePage affirmed his statement Friday that two advocates of a state ballot question to increase the minimum wage should be jailed, saying they are guilty of the “attempted murder” of senior citizens because of the alleged impact of a wage increase.

So raising the minimum wage is killing people now? LePage’s rationale is that an increased minimum wage is “attempted murder in my mind because it is pushing people to the brink of survival.” He says it will increase costs, which means senior citizens on a fixed income won’t be able to afford goods and services and so they’ll starve to death.

Of course, studies in Seattle show that an increased minimum wage has resulted in “little or no” increase to costs. And if there has been an increase in senior citizen deaths in Seattle due to these nonexistent cost hikes, I sure haven’t heard about it. (Seems like it would be tough to measure a response to something that hasn’t happened, but I’m not a genius like Governor LePage, so what do I know?)

Look: I can’t believe I’m saying this, but there is no correlation between senior citizen deaths and the minimum wage. Governor LePage is spinning bullshit out of thin air. And it should go without saying that it is highly irresponsible for a sitting governor to accuse two private citizens of attempted murder. Of course, LePage is the same hopelessly racist brain donor who said that Donald Trump needs to be in charge so he can show “authoritarian power.” He’s about the furthest thing from an expert on any legitimate topic that you can imagine.

LePage’s claims aren’t going to catch on, because they’re completely insane. But LePage does prove that the conservative anti-minimum wage crowd is on the hunt for a new message (lord knows their old message isn’t working anymore.) Let’s hope their next attempts to find plausible claims are a little more believable—and responsible—than these.