On TAP: Kuttner + Meyerson

Meyerson

Yesterday’s restatement of corporate purpose from the Business Roundtable is a clear acknowledgment that America’s economic pooh-bahs have realized they’re about as popular as a strain of bacteria. There is much to be said about this about-face, in which the Roundtable said that the purpose of American corporations is no longer to maximize shareholder value at the expense of all other corporate stakeholders, but rather to treat those stakeholders—including employees, consumers, and communities, as well as shareholders—as equals. I’ll say more at greater length later this week.

For now, though, here’s a suggestion to the business page editors of American newspapers: Now that shareholder value isn’t the be-all and end-all of corporate purpose, you need to supplement your business coverage with indices of more than a corporation’s share prices. How about posting the median wage of its employees, and the ratio of CEO pay to median worker pay alongside the daily share value? How about posting (it’s OK to use abbreviations) whether a particular corporation offers defined benefit pensions (DBFs) or 401(k)s, paid sick days (PSDs—you get the point), paid family leave, and paid vacation time—for starters. How about listing the number of U.S. employees and whether a company is unionized or not?

Obviously, media outlets devoted to Milton Friedman’s nostrums, which have done more to destroy the American middle class over the past 40 years than any other body of thought, will have no interest in listing more than the share price. But the general welfare of the vast majority of the American people depends primarily on wages and benefits, not share values. How about conforming your economic coverage to ’muricans’ actual needs?

Kuttner

Justice Democrats, the grassroots group that recruited AOC to successfully challenge Representative Joe Crowley in New York’s 14th Congressional District, has taken heat for breaking the unwritten rule that Democrats are not supposed to take down their own incumbents. So far, the group has endorsed six new challengers for 2020, generally progressives taking on centrists.

But what happens when a progressive challenger takes on a progressive incumbent, and that challenger’s name is Joe Kennedy, grandson of Bobby? Kennedy is likely to launch a primary challenge against Massachusetts Senator Ed Markey. An exploratory committee has mysteriously materialized, along with a July telephone poll asking voters if they would be inclined to back Kennedy over Markey.

Markey, 73, has been a reliable progressive vote but not one of the Senate’s leaders. Kennedy, at 38, who has represented Barney Frank’s old district since 2013, has also been a strong progressive but less than a superstar.

Markey surprised many observers when he became the lead Senate sponsor of AOC’s version of a Green New Deal. That was taken as an attempt to bulletproof himself against attacks from the left.

But a Kennedy challenge to Markey would be less about left-right than about continuing the Kennedy dynasty. Kennedy needs to move fast, since Markey already has two other challengers. If someone else takes the Markey seat, Kennedy’s next chance to move to the Senate depends on Elizabeth Warren getting elected president. Insiders say that Kennedy’s hope is to bluff Markey into retiring.

I’m no fan of dynasties, but neither am I fan of the sacredness of incumbents. These Kennedys—they are very ambitious, they start out callow, and they tend to grow in office. We will probably find out if Joe follows the pattern.

Kuttner

In all of the calculations about whether there is sufficient evidence to impeach, and what effect impeachment would have on the 2020 election, the most obvious reason keeps being ignored. Trump is plainly unfit to govern.

He makes impulsive decisions, makes stuff up, alienates allies, refuses to vet prospective nominees, doesn’t read briefing materials, reverses policies on a dime, brings on a needless recession, and so on. As his Republican allies know all too well, he is out of his mind.

Trump incautiously contends that Joe Biden is “not playing with a full deck.” Trump doesn’t have a picture card in his hand.

If we needed one more bit of evidence, we now have … Greenland.

The ice-man cometh.

If someone at The Onion had made the Greenland story up, the editors would have rejected it as too far-fetched. But Trump’s aides have now confirmed that he has been badgering them for weeks to find out how he can buy Greenland.

Imagine his thought processes. With global warming, there are all these minerals ready to be exploited. Or maybe it can be a source of the ice that the rest of the world is losing. Today, Greenland; tomorrow Antartica.

The fact that Greenland is not for sale doesn’t seem to deter him. In Trumpworld, everyone is for sale. It’s just a matter of price.

When he finally goes, in the spirit of Napoleon’s exile to Elba, Greenland would be a great place to put Trump on ice. But can’t we please do this sooner rather than later?

Meyerson

Ken Cuccinelli, President Trump’s new man at the Citizenship and Immigration Services Agency, has now famously opined that a proper understanding of Emma Lazarus’s poem inscribed on the Statue of Liberty—the one that begins, “Give me your tired, your poor/Your huddled masses yearning to breathe free,” should be revised to include the caveat, “so long as they’re not likely to receive any public services targeted to the poor.”

Historically, of course, most immigrants to the United States have been poor: Certainly, the Irish fleeing the potato famine (who received plenty of public services from big-city machines like Tammany Hall); the Central European refugees forced to flee after the failed revolutions of 1848; the Chinese who built our transcontinental railroad; the Italians, Jews and Slavs who came here in the late 19th and early 20th century; the Mexicans who’ve come in recent decades; and the Central Americans arriving today. Every one of those groups has been reviled by the nativists of their era, who actually enacted bans against the Chinese, Italians, Jews and Slavs at various times over the past 140 years, as Trump and his ilk are doing today against the Central Americans.

Among the poorest ever to come to our shores was the Baline family, who arrived dead broke and stayed that way for a number of years. Their little boy, Izzy, who changed his name to Irving Berlin in his late teens, not only wrote such iconic anthems as “White Christmas,” “Easter Parade,” and “God Bless America,” but also, for his 1949 musical “Miss Liberty,” set Emma Lazarus’s poem to his music.

Berlin’s three daughters are still alive, and his company still holds the rights to most of his songs. I can’t imagine his daughters or grandchildren or great-grandchildren view Trump’s new immigration policy—turning back the poor—with anything other than horror. So herewith, a suggestion for them:

Why don’t they request (I don’t think they can legally demand) that every performance of “God Bless America” include, as a new verse between the initial and repeated singing of the chorus, the Lazarus-Berlin song as an intervening verse? In other words, if Trump and the Republicans, or ball clubs during the seventh-inning stretch, want a performance of “God Bless America,” they should have to explicitly include as part of that performance Berlin’s paean to our exceptionalism: that we are distinctively the land that welcomes immigrants, even poor, huddled masses. That, after all, was a decisive reason why Berlin believed God blessed America.

Berlin daughters, Berlin company: What say?

Kuttner

America’s ace in the hole is Donald Trump’s impulsive incompetence. 

In 2017, history handed Trump an economy on the mend, with interest rates at historic lows, no inflation in sight, low unemployment, and a booming stock market. With automation and low-wage competition making products ever more plentiful and cheaper, economists forecasted sunshine. As unemployment kept declining, some people even got modest wage hikes.

But then Trump presided over a massive tax cut for the rich, which did nothing for the real economy while increasing deficits by close to $2 trillion. Next, he escalated trade conflicts with China—not in service of a clear plan but to show how tough he was. Just to pour oil on the flames, so to speak, he brought America to the brink of war with Iran. 

None of this had any strategic coherence. Belatedly, these chickens are coming home to roost. 

The stock market was pumped up by corporate stock buybacks financed by Trump’s tax cuts. Silicon Valley’s inflated stock prices are the result of monopoly abuses that even the Trump Federal Trade Commission is resisting. Trump’s trade bluster with China has added to the risks of global economic slowdown. And the prevailing mix of speculation and austerity has just taken down Argentina’s economy, with traders worldwide worrying about contagion.

The Dow is down over 700 points today alone, and about 2,000 points off its recent peak. As financial markets sink back down to earth with the real economy following, all of these blunders will hurt Trump’s chances for re-election. 

Character, as the Greeks liked to say, is fate. Let’s hope there is not too much collateral economic suffering, and that Trump’s complementary foreign policy debacles don’t blow us all to hell before the voters throw him out.

Meyerson

They keep coming, these papers by economists, chock full of equations I can’t decipher and an economists’ jargon I have to translate into English, but all of which conclude what has been obvious for some time: A massive redistribution of wealth from labor to capital has been ongoing for decades.

That’s not to denigrate these surveys; it matters that the clear statistical evidence is backed up by clear statistical analysis. The latest such analysis comes from three professors: Daniel Greenwald at MIT’s Sloan School of Business, Martin Lettau at Berkeley, and Sydney Ludvigson at NYU. The subject of their investigation is, in Piketty patois, how r (the rate of return on investment, in this case, share values) has grown faster than g (the overall growth of the economy) in the United States since 1988. What the Gang of Three concludes is that “from 1952 to 1988, economic growth accounted for 92 percent of the rise in equity values, “but that from 1989 to 2017, economic growth was responsible for just 24 percent of the rise in the value of stocks. What made stocks rise in recent decades was “reallocated rents to shareholders and away from labor compensation,” which accounted for 54 percent of the rise in share values. That is, the share of income going to corporate shareholders increased because the share of income to corporate employees decreased.

As I said, economists have been discreetly sharing this message for some time now. In July 2011, a report JPMorgan Chase distributed to its large investors concluded that 75 percent of the increase in American corporations’ profit margins in this century was due to “reductions in wages and benefits.”  

This isn’t to validate Proudhon’s famous charge that “property is theft.” Then again, it doesn’t invalidate it, either. 

Kuttner

I have long argued that neglect by Democratic presidents of the long slide of America’s working families paved the way for Trumpism. The rules and rewards were increasingly tilted to elites. Legitimate economic grievances were then racialized, by Bannon, Trump and company, and the stench of racism lingers. 

Now democracy itself is at stake. So Democrats must not just win in 2020, but win as economic progressives, with a broad appeal that can bridge rather than inflame divisions of race and identity. The common foe is not other working people of different races—it’s Wall Street heisting all the economy’s gains.

That’s why the line we often hear—I’ll vote for anyone who can beat Trump—doesn’t make sense. A progressive appeal and a progressive candidate are needed, both to beat Trump and to reclaim America. More corporate centrism won’t accomplish either.

I’ve put this case into a short book titled, The Stakes: 2020 and the Survival of American DemocracyIt’s being published on Labor Day.

Surprisingly, it’s an optimistic book. Democracy is battered, but as the 2018 midterms showed, we can still win elections when progressives are mobilized. 

Trump is not quite self-destructing, but he keeps narrowing his appeal to only the haters; and thankfully the haters are nowhere near a majority. And we actually have progressive candidates who connect a radical program to a human narrative, and they are being heard above the noise.

We’re having several book events, to which you are cordially invited, beginning with the D.C. bookstore Politics and Prose at the Wharf, 7:00 p.m. on September 3. It’s a free event with no RSVP needed. Others will be held in New York, Boston, Chicago, Madison, and elsewhere. I’ll keep you posted.

Kuttner

I spent some time last week with Alex Morse, the 30-year-old mayor of Holyoke, Massachusetts, who has just announced his primary challenge to Ways and Means Chair Richie Neal, 70, the most corporate of congressional Democrats. 

Neal’s constituents in western Massachusetts are rather more liberal than he is. Morse has gained national attention for running his own home-grown Green New Deal in the depressed factory town that he has governed since first winning the election at age 22.

This will be one of at least a dozen such challenges in 2020 that stand a decent chance of succeeding. Justice Democrats, the group that recruited AOC, has already announced endorsements of six challengers to incumbent Democratic members of the House.  

Some of this is salutary. But if a hundred insurgents and incumbents are competing to raise money, organizer volunteers, and take down each other, Democrat against Democrat, in the most important election year of our lifetimes, that’s not so good.

One other useful bit of collateral damage is that these races could force the House Democrats’ fundraising arm, the Democratic Congressional Campaign Committee (DCCC) to mend its ways. The DCCC has been notorious for backing corporate Democrats over progressives.

I did a deep dive into all of this. Here’s my full story.

Meyerson

In my Tuesday On Tap, I noted that a number of Walmart employees, in the wake of the mass murder at an El Paso mega-store, had begun expressing concern about the company’s policy of selling guns (Walmart is the nation’s leading gun retailer) and allowing open carry in stores in the states that permit it. 

That discontent is now ballooning. 

In Walmart’s Silicon Valley e-commerce office, 40 white-collar employees walked off the job yesterday to urge their employer to stop selling guns. Actions were also held at e-commerce offices in Portland, Oregon, and Brooklyn, and organizers also initiated a Change.org petition calling on Walmart to cease selling firearms. By Wednesday night, 38,000 people had signed it.

Ever eager to stomp on any workers voicing discontent, Walmart suspended the email and Slack accounts of the two Silicon Valley employees who initiated the action, but then thought better of it and reinstated those accounts. Perhaps Bentonville calculated that it had to deal with its tech workers a bit less brutally than it customarily does with its blue- and pink-collar employees. 

The Walmart rising comes on the heels of mass employee walkouts at Google, Amazon, and other tech giants over such issues as the sale of facial recognition technology to China and the failure to clamp down on sexual harassment. Considered alongside the strike wave of teachers and hotel workers that began last year, we’re clearly entering the Era of Worker Walkouts, most of which pose demands about the employees’ own situations but also about the greater social good. Our dysfunctional labor law makes it nearly impossible for non-union workers to gain a legally recognized collective voice, but that doesn’t seem to be deterring actual American workers, who for all manner of good reasons are plain fed up.

Kuttner

Trump’s latest impulsive moves against China, which reflect no coherent trade strategy other than his own petulance, could well derail the strongest thing he has going into the 2020 election: a relatively strong economy.

The New York Times’ Paul Krugman has calculated that the costs of a trade war with China could equal or exceed the fiscal benefits of the tax cuts and lower interest rates combined. The stock market has been oscillating widely in anticipation of a weakened economy.

Something had to change in U.S. passive acceptance of China’s predatory economic model. But as I’ve previously written, that course would have taken subtle diplomacy and patience, neither of which are Trump’s strong suits. 

Some U.S. manufacturers are now looking past China in their supply chains. That shift will probably benefit other Asian nations such as Vietnam more than it benefits the U.S. 

China, for its part, rapidly becoming the global leader in a broad range of industries and technologies, is already looking beyond the U.S., which under Trump is fast squandering the leverage we have. China's willingness to reduce the value of its currency, daring the U.S. to retaliate, is only the latest evidence that Trump's bravado is backfiring.

At the rate things are going, Trump is squandering one election year advantage after another. What remains is his brew of racism, violence, and hatred. It won’t be enough.

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