The Battle Is Far From Over

 Forget about our last set of comments on this issue of the recent anti-arbitration bill. The issue is far from solved and is considered a major win for the banks, big and small (i,e. the big banks, who had everything to gain from the measure, created a Potemkin’s village of small banks and lending institutions and let them lead the battle). 

These are just the battles we cannot afford to lose if we are to regain some equality in this country. We must find a way to successfully resist the relentless drive of the money interests to marshal everything in their favor.

By ANDREW ACKERMAN and YUKA KAYASHI Oct. 272017 for The Wall Street Journal

WASHINGTON—The financial-services industry, relying on a group of small banks, successfully targeted a few Senate Republicans to ensure lawmakers scuttled a rule that would have made it easier for consumers to join in class-action lawsuits against banks.

The vote late Tuesday to kill the Consumer Financial Protection Bureau’s arbitration rule marks the most significant legislative victory for the financial-services industry in years. Industry lobbyists and congressional aides had always expected the difference in the vote count to be razor thin, so swaying just a couple of GOP senators could determine the fate of the independent agency’s rule.

   

Senators Lisa Murkowski and Susan Collins voted “yes” to kill the rule.

One of the main targets of the campaign, Sen. Lisa Murkowski of Alaska, privately told community bankers in her home state as early as August that she would likely support the resolution to block the rule, according to people familiar with her remarks. Yet she never publicly telegraphed her plans, leaving some lobbyists guessing on the vote’s outcome close to the last minute on Tuesday, when shortly after 10 p.m. she appeared on the Senate floor and voted “yes.”

Adding to the drama, Ms. Murkowski was the last Senate lawmaker to arrive, her vote leaving the chamber tied at 50-50, largely along party lines. Minutes later, Vice President Mike Pence put Republicans over the top with the deciding vote, as some lawmakers returning from a black-tie dinner looked on in tuxedos. Ms. Murkowski couldn’t be reached for comment Wednesday.

Vice-President Mike Pence delivered the coup-de-grâce that killed the rule.

The CFPB rule would have barred fine-print requirements in financial-services contracts that consumers use arbitration to resolve disputes, though consumers still would have had the option to use arbitration rather than the courts.

Under the Congressional Review Act of 1996, lawmakers can overturn a newly issued regulation on an expedited schedule with a simple majority vote in Congress. Had Congress not acted, the arbitration rule would have gone into effect next year.

 The House voted to kill the rule shortly after its completion in July, but Senate Republicans struggled to muster the votes needed to do the same. Several GOP senators expressed reservations about voting to overturn the regulation, worried they might be portrayed as siding with banks and against consumers. The issue also sat on the Senate back burner as other high-priority issues competed for floor time, including an ill-fated health-care overhaul, according to people familiar with the process.

Congressional action to roll back financial regulation has been rare. Though the Trump administration has pledged to “dismantle” much of the postcrisis financial rulebook, wholesale legislative efforts to kill the 2010 Dodd-Frank regulatory measures languish in the Senate. Meantime, the Trump administration has favored easing certain Dodd-Frank rules administratively.

Proponents of killing the CFPB rule also lobbied Susan Collins of Maine and John Kennedy of Louisiana, two Republicans who at least initially hesitated to take a position publicly. Ms. Collins voted against the rule, while Mr. Kennedy voted to keep it.

Ms. Collins said Wednesday that lobbying by small credit unions convinced her they would be “devastated” by the measure. She also said she conducted her own review of the CFPB’s economic studies and came to the conclusion that “consumers in most cases were far better served by arbitration than by class-action lawsuits.” Proponents say arbitrated cases are generally resolved more quickly and less expensively than court cases.

Senators John Kennedy and Linsey Graham voted to keep the rule.

Mr. Kennedy, who told reporters the morning of the vote that he was still studying the rule in question, was one of two GOP lawmakers to vote “no” to killing it, joining Lindsey Graham of South Carolina. Mr. Kennedy said he voted the way he did after hearing from veterans groups who support the CFPB rule, and after taking account of revelations that credit monitor Equifax Inc. initially sought to require victims of its massive hack to settle disputes through arbitration.

  “Just about every adult in my state had his or her data stolen,” he said. “I am not going to tell my people they cannot have their day in court.”

Mr. Graham, a former trial attorney, had long said he would vote in support of the CFPB’s rule. In an interview earlier this year, he said arbitration is “a windfall for the companies in terms of how you settle their cheating.”

Efforts to influence Sen. Murkowski intensified in recent months, with Alaska’s credit unions and community banks joining the fray. Helping lead the lobbying was Dan McCue, senior vice president of Alaska USA Federal Credit Union, by far the largest credit union in the state with $6.86 billion in assets.

Mr. McCue wrote an opinion piece on Oct. 13 for the Juneau Empire criticizing the CFPB regulation.

The rule “doesn’t make sense for any credit union member across this state,” Mr. McCue wrote. “Unfortunately, more Washington-based groups, many representing the interest of trial lawyers, are putting pressure on our senators to back the anti-arbitration rule, and we couldn’t disagree with them more.”

Mr. McCue declined to comment Wednesday, referring questions to the Credit Union National Association, a trade group that opposed the arbitration rule.

Beyond credit unions and community banks, overturning the rule was also a priority for regional, national and global financial companies that lobbied to have it overturned.

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Richard Cordray’s Surprising Admission

 Richard Cordray, Consumer Financial Protection Bureau Director                                        Photo Alex Wong/Getty Images

A surprising revelation, revealed below, that relates directly to the editorial remarks of a recent posting, turned up in today’s Opinion section of The Wall Street Journal. If this is true, what has all the fuss been about? Consumers have had  plenty of arbitration clause-free options to exercise right along without any “$330 billion in wealth” having “been transferred from businesses to trial lawyers” as threatened in an editorial piece later on in the same edition of The Journal.

So we may now shift our attention away from this issue and toward more profitable ones such as the fate of migrant farm workers.

By DARREN MCKINNEY  Oct. 26, 2017 for The Wall Street Journal

The U.S. Senate voted Tuesday to repeal the Consumer Financial Protection Bureau’s rule prohibiting arbitration clauses in financial contracts. The Treasury Department and the Office of the Comptroller of the Currency had both weighed in with warnings about the rule’s effects—criticisms that prompted a surprising admission from CFPB Director Richard Cordray.

The Treasury projected that the rule would have generated an additional 3,000 federal class-action lawsuits over five years, costing businesses $500 million to defend plus $330 million in payments to plaintiffs’ lawyers.

The CFPB had denied those costs would be passed on to consumers in higher interest rates. But the comptroller’s analysis of the CFPB’s data found an 88% chance that the total cost of credit would increase and estimated the likely increase at almost 3.5 percentage points. “That means a consumer, living week to week, could see credit card rates jump from an average 12.5 percent to nearly 16 percent,” acting Comptroller Keith Noreika wrote in an op-ed for the Hill. Mr. Noreika urged the Senate to “vacate” the rule, as the House had already done.

 Here’s where things got interesting. In response to the comptroller’s analysis, Mr. Cordray fired off a letter to Sen. Sherrod Brown of Ohio, the Senate Banking Committee’s ranking Democrat, insisting the criticism is “mistaken and unfounded.”

Perhaps inadvertently, however, Mr. Cordray let slip a broader truth—that contrary to the argument of the rule’s supporters all along, consumers are not being forced to sign contracts with mandatory arbitration clauses to access financial services.

“We know,” Mr. Cordray wrote, “that roughly half of the credit card market does not have arbitration clauses in their agreements. If the OCC review were correct, it would mean that these banks are operating at a substantial competitive disadvantage.” He added that the CFPB had surveyed a “random sample” of 141 community banks, and found only 7% of them use arbitration agreements.

To sum up, the head of the CFPB now admits that roughly half of big banks that issue credit cards, and nearly all smaller banks that provide checking accounts, do not require their customers to sign contracts with mandatory arbitration clauses. So how in the world did the CFPB ever conclude it needed to impose itself on a sound and functioning market—a market in which consumers have plenty of choices and banks that don’t require arbitration are free to advertise themselves as such?

The History of Migrant Farm Workers in California—Where Will They Go?

Few American industries are as invested in the decades-long political battle over immigration as agriculture. Paying low wages for backbreaking work, growers large and small have historically relied on immigrants from south of the Rio Grande. These days, over one-quarter of the farmhands in the United States are immigrants working here illegally.

This is how the growers will respond to President Trump’s threatened crackdown on immigration: They will lobby, asking Congress to provide some legal option to hang on to their foreign work force. They will switch to crops like tree nuts, which are less labor-intensive to produce than perishable fruits and vegetables. They will look for technology to mechanize the harvest of strawberries and other crops. And they will rent land in Mexico.

migrant-fieldworkers-farm-workers

download   French artist Jean François Millet’s famous 19th century painting, “L’Angelus”—a surprising resemblance. Both make statements about the nature of agricultural labor, one in this century, one in the other. “Plus ça change, plus c’est la même chose,” as the French say.

 There is one thing they won’t do. Even if the Trump administration were to deploy the 10,000 immigration agents it plans to hire across the nation’s fields to detain and deport farmhands working illegally, farmers are very unlikely to raise wages and improve working conditions to attract American workers instead.

“Foreign workers will always be harvesting our crops,” Tom Nassif, who heads the Western Growers Association, told me. The only question for policymakers in Washington is whether “they want them to be harvesting in our economy or in another country.” If they choose the latter, he warned, they might consider that each farmworker sustains two to three jobs outside the fields.

Most of what we know about the effect of immigration on American-born workers is based on studies of what happens when immigrants arrive. Almost 30 years ago, the economist David Card found that the Mariel boatlift of 1980, in which more than 100,000 Cubans fleeing the island landed in Florida, did little damage to either the employment or the wages of the Americans they competed with.

A flurry of research since then has tried to find fault with that counterintuitive conclusion. Yet despite the claims from the Trump administration that immigrants have decimated the working class, Mr. Card’s analysis has emerged pretty much unscathed: With few exceptions, economists agree that even less-educated natives suffer little when immigrants arrive.

What if the shock goes the other way, though? We know less about what happens when immigrant workers are kicked out. But a series of studies over the past year are also coming to something of a consensus: Expelling immigrants does not open opportunities for workers born in the United States, either. Rather, the shock leaves them worse off than when the immigrants were here.

In a forthcoming study, Giovanni Peri and Annie Laurie Hines of the University of California, Davis, take advantage of an underappreciated fact of American immigration policy: President Barack Obama went on a deportation spree in his first term. The number of unauthorized immigrants detained far from the border — on the job, at home, in public spaces — more than tripled, to nearly 350,000 from 2007 to 2011, after which Mr. Obama changed tack to focus more narrowly on unauthorized immigrants with criminal records.

The researchers found that employment and wages in states like Arizona, where apprehensions by Immigration and Customs Enforcement surged, did no better than in states where apprehensions changed little, like Delaware, Pennsylvania and West Virginia. The results suggest that in regions where enforcement intensified the most, the wages of American-born workers actually did worse.

08.9-Jornaleros-Agricolas

The argument of Professor Peri and Ms. Hines is intuitive. Raids and deportations are disruptive. They can scare away other workers — leaving employers scrambling to maintain production. When immigration agents raided a mushroom farm in Pennsylvania this year, they scared away workers in nearby farms — which had to cut their own production.

These sorts of events can increase uncertainty among businesses and depress investment. “The uncertainty and the disruption of labor market activities caused by the surge in apprehensions is likely to have generated the departure of firms and the relocation of production,” the researchers wrote. Think of California avocado farmers checking out plots in Michoacán.

One could argue that growers will eventually get over the shock of immigration raids. Once the dust settles, they may have more jobs at better wages for American workers. But the evidence is not promising.

Another study published last month by Professor Peri and two colleagues examined the effect of forced repatriation of Mexicans and Mexican-Americans in 893 cities between 1929 and 1934. It was sold as an effort to reduce unemployment and give jobs to Americans who had been clobbered by the Great Depression. But unemployment rates for American-born workers were actually higher in cities that repatriated more Mexicans — a consequence that persisted until 1940.

As my colleague Binyamin Appelbaum has noted, a separate study this year looked at the end of the Bracero program in 1964, when Mexican farmhands who had been invited to work the fields in place of American men shipped off to World War II were asked to leave. It found that the exclusion of Mexican farmworkers “had little measurable effect on the labor market for domestic farmworkers.” Instead, growers mechanized some crops and dropped crops that remained labor intensive.

 Another exclusion seems to be at hand. Immigration enforcement has become increasingly severe since Mr. Trump took office. The Department of Homeland Security is no longer focused on criminal immigrants, as it was at the end of the Obama administration, and is casting a wider net. Immigration and Customs Enforcement said its agents had made 43 percent more arrests of unauthorized immigrants than they did last year. From Jan. 22 through Sept. 2, there were 28,000 arrests of “noncriminal immigration violators” — three times as many as during the same period in 2016.

It’s not only businesses that are brainstorming about how to navigate the changing immigration politics. The hotel employees’ union, for instance, wants labor contracts to assert that employers will not allow ICE agents into workplaces without warrants. Hoteliers and the union are talking about jointly training supervisors about what to do when immigration authorities show up.

From California to Florida, they are trying to figure out how to respond if, come January, Haitians lose the temporary protected status that allows them to work in the United States. In that case, “1.1 to 1.2 million people could become undocumented overnight,” said María Elena Durazo, vice president for civil rights, diversity and immigration with Unite Here, the hospitality workers’ union.

The Trump administration will cast these efforts as a sign of success: immigrants cowering before an American administration finally willing to stand up for its own.

But American workers might not want to hold their breath as they wait for the great new jobs to appear. Consider agriculture. There were 30,000 fewer workers in the industry this past spring than there were a year before, according to government statistics. Yet for all the complaints from farmers about labor shortages that forced them to pay more, the wages of field workers failed to keep up with inflation.

Migrant-Farm-Workers

The Bracero Program

Here is where the importation of outside labor to the United States for fruit picking began:

   

The Bracero program (1942 through 1964) allowed Mexican nationals to take temporary agricultural work in the United States. Over the program’s 22-year life, more than 4.5 million Mexican nationals were legally contracted for work in the United States (some individuals returned several times on different contracts). Mexican peasants, desperate for cash work, were willing to take jobs at wages scorned by most Americans. The Braceros’ presence had a significant effect on the business of farming and the culture of the United States. The Bracero program fed the circular migration patterns of Mexicans into the U.S.

Several groups concerned over the exploitation of Bracero workers tried to repeal the program. The Fund for the Republic supported Ernesto Galarza’s documentation of the social costs of the Bracero program. Unhappy with the lackluster public response to his report, Strangers in Our Fields, the fund hired magazine photographer Leonard Nadel to produce a glossy picture-story exposé. Presented here is a selection of Nadel’s photographs of Bracero workers taken in 1956.

    

Shortage of Truck Drivers: Is This Good News or Bad?

 

 

 

 

 

We’ve written and blogged a great deal about truck drivers in the past because truck driving is one of the few occupations a young man or woman can look forward to doing well in without having to go to college (see the salaries in the following article). But from this article we learn that driving a truck does not offer a lifestyle that attracts young Americans, in spite of rising wages. 

Long-haul trucking  has also been threatened by automation (imagine the big rigs on American highways becoming driverless—what a great Spielberg movie that could make). But, as you will learn from the news item that follows this article, long-distance hauling is limited for the time being, even in Elon Musk’s futuristic vision, by battery size. 

By JENNIFER SMITH Oct. 25, 2017 for The New York Times

Trucking companies are worried about finding enough drivers now that the freight market is recovering.

Shipping demand is strengthening after a roughly two-year slump, as manufacturing activity expands and retailers stock up in advance of the holiday season. Meanwhile, fleets are reporting trouble recruiting qualified drivers to haul those loads. Some are raising wages even before they secure rate increases from shippers.

Long-haul truck drivers often hop from one fleet to the next in search of better pay or other benefits, such as schedules that permit them to spend more nights at home. They also tend to be older than the general workforce, fueling concern about driver supply as more truckers near retirement age and younger people enter other fields.

A tight employment market compounds the issue, as the construction and energy sectors draw from the same labor pool. Long-haul truckers make on average about $55,000 a year, compared with the roughly $80,000 to $100,000 they could earn driving for the oil-and-gas industry, said Bob Costello, chief economist with the American Trucking Associations, an industry group.

This year “driver shortage” ranked as the trucking industry’s top concern for the first time since 2006, according to an annual survey released Monday by the American Transportation Research Institute. Nearly 40% of respondents ranked driver supply among their top three concerns, according to the industry research group’s report.

“This is as tight a market as we’ve seen in 25 years, and we expect it to tighten further,” said Derek Leathers, chief executive of Werner Enterprises Inc., a large truckload carrier based in Omaha, Neb. “Demographics are working against us.”

Over the past two years, Werner has boosted wages by about 15%, one of a number of steps to aid driver recruitment and retention. The company has also spruced up its equipment and terminals. . . . .

J.B. Hunt Transport Services Inc., one of the biggest U.S. carriers, said earlier this month that rising driver pay, a decline in fleet size and an increase in trucks lacking drivers weighed on third-quarter results in its truckload division. That unit had a 5% drop in revenue from the year-earlier period, though operating income increased 12%.

Companies are increasing wages “and they should,” said Mr. Costello. “But it’s about more than pay. It’s about the lifestyle.”

The ATA says the driver shortage is leading to delivery delays, and estimates the shortfall has yet to peak this year. Carriers will need to hire about 898,000 new drivers over the next decade as more truckers retire and the industry expands, according to the group.

 

Tesla’s Big Rig

By MARC VARTABEDIAN  Aug. 24, 2017 for Business News

[Elon] Musk, a quirky billionaire whose transportation ambitions include colonizing the planet Mars, has long delighted in defying conventional wisdom.  At Tesla’s annual meeting in June, he repeated his promise of a battery-powered long-haul big rig.

“A lot of people don’t think you can do a heavy-duty, long-range truck that’s electric, but we are confident that this can be done,” he said.

While the prototype described by [Scott] Perry [an executive at Miami-based fleet operator Ryder System] would fall well short of the capabilities of conventional diesels, Musk may well have found a sweet spot if he can deliver. Roughly 30 percent of U.S. trucking jobs are regional trips of 100 to 200 miles, according to Sandeep Kar, chief strategy officer of Toronto-based Fleet Complete, which tracks and analyses truck movement.

A truck with that range would be able to move freight regionally, such as from ports to nearby cities or from warehouses to retail establishments.

“As long as (Musk) can break 200 miles he can claim his truck is ‘long haul’ and he will be technically right,” Kar said.

Interest in electric trucks is high among transportation firms looking to reduce their emissions and operating costs. Electric motors require less maintenance than internal combustion engines. Juice from the grid is cheaper than diesel.

But current technology doesn’t pencil when it comes to powering U.S. trucks across the country. Experts say the batteries required would be so large and heavy there would be little room for cargo. . . .

Battery weight and ability would limit a semi to a range of about 300 miles with an average payload, according to a paper recently published by [Venkat] Viswanathan and [Shashank] Sripad [of Carnegie Mellon University]. The paper thanked Tesla for “helpful comments and suggestions.” Tesla did not endorse the work or comment on the conclusions to Reuters.

A range of 200 to 300 miles would put Tesla at the edge of what the nascent electric truck industry believes is economically feasible, the researchers and industry insiders said.

New Rule from Consumer Financial Protection Bureau on Payday Loans Favors the Borrower

A small victory for the American working man and woman. But this is what it’s going to take—an aggregate of these small, incremental gains—to ultimately undo the enormous unfairness perpetrated on this country since the 1980s by a cabal of ruthless billionaires concerned solely with their own interests. We could start with an effort to reverse the recent Congressional defeat of a measure that would have allowed class action suits by consumers against bank malfeasance (which might have prevented Wells Fargo from committing its predatory offenses against its customers).

Since the federal Consumer Financial Protection Bureau opened its doors in 2011, the agency’s investigations and enforcement actions have returned more than $12 billion to auto buyers, homeowners, credit-card holders and other borrowers who were victimized by deceptive or predatory practices. Consumers who have been trapped in debt by the notorious payday lending industry will now get extra help from the bureau with a rule imposed this month.

These lenders advertise as “easy” the short-term loans that come due in two weeks. The borrower typically writes a postdated check for the full balance — including fees — or allows the lender to electronically debit funds from his or her checking account. The borrowers often take out another loan to pay off the first, falling to a cycle of increasing debt.

The bureau found in a 2014 study of about 12 million payday loans that only 15 percent of borrowers could repay the total debt without borrowing again within two weeks. Nearly two-thirds of borrowers renewed the loans — some more than 10 times — paying heavy fees that further eroded their financial standing. Strikingly, the bureau found that most people pay more in fees than they originally borrowed.

The new rule limits how often and how much customers can borrow. And lenders must take the common-sense underwriting approach, determining whether the borrower can pay the total loan and still meet living expenses.

Borrowers can take out one short-term loan of up to $500 without that test, as long as it is structured so that they are not automatically trapped into borrowing again. The rule also limits the number of times the lender can debit the borrower’s account, so borrowers can contest erroneous withdrawals.

The payday industry is predictably crying wolf, arguing that the new restrictions will dry up credit in some areas. In truth, payday loans will continue at lower profit margins — stripped of the debt trap. Beyond that, small banks and credit unions are beginning to realize that they can make money in the small-loan business without predatory tactics.

Payday industry leaders are urging Congress to overturn the rule through the Congressional Review Act, which lets lawmakers nullify regulations within 60 legislative days. But vulnerable lawmakers will be hesitant to vote for predatory lending tactics that drive people into poverty.

The Trump administration could undermine the regulations after the bureau’s director, Richard Cordray, leaves office or when his term expires next summer. Consumer advocates need to remain vigilant against that possibility.

It Is Time to Man the Barricades!

“Liberty leading the people” by Eugene Delacroix

This blog has for a long time tried to stay out of immediate politics, preferring to tackle the issue of inequality on its own grounds of economics. The model for our behavior was Thomas Piketty’s “Capital in the 21st Century.” We tried to follow his dispassionate reasoning to achieve a more just and equitable monetary system. But maintaining this has become increasingly hard as the current administration persists in pursuing a course that enriches the rich at the expense of the poor while all the time pretending it is doing the opposite.

The following article by an editor of The Nation and editor-at-large of Dissent struck this writer as a call-to-arms for all of us who, in our different ways, have been working to return this country to decency and fairness and steer it away from the winner-take-all mentality into which it seems headed. It echoes what Naomi Klein has told us in “No Is Not Enough.” This is no longer a time for pale remedies—the moment has come for extreme measures that work and will permanently fix what is terribly wrong with this country (as the New Deal did).

By SARAH LEONARD  Oct. 2, 2017 for The New York Times

On Nov. 9, 2016, millions of Americans woke up with a crushing sense that something was terribly wrong with their country.

Donald Trump’s election inspired such moral revulsion and political outrage that by that afternoon, parts of the American electorate had taken to calling themselves “the resistance,” evoking the guerrillas who took to the hills and fought the Nazis during World War II. Just a day before, many of these same people were enthusiastically casting their ballots for a centrist Democrat; suddenly they were self-styled revolutionaries.

The day after Mr. Trump’s inauguration saw enormous protests across the country that incorporated a panoply of groups and interests. For those of us on the left, the millions of protesters in pink hats and the dads toting funny signs was a promising sight: Could this be the moment that liberals were converted into radicals?

The years since the 2008 financial crisis have seen a wave of protest movements, including Occupy, Black Lives Matter and immigrant rights campaigns. What’s different now — and what’s encouraging — is that new people are getting involved, those for whom the status quo before Mr. Trump’s arrival in the White House didn’t necessarily seem so bad.

But the resistance can’t just adopt the symbols and language of revolutionaries. It has to involve the whole package — including radical leadership and ideas. To win meaningful victories, the resistance needs to look beyond the White House or even Congress, and toward solutions that attack inequality and injustice at its roots. That will require not just energy and money but also listening to and working with activists who have been resisting since long before Mr. Trump arrived on the political scene and who might have opinions far to the left of the Democratic Party.

Mr. Trump — like right-wing populists across Europe — rode into power on waves of discontent with unaccountable globalization and growing inequality that have increased even under liberal and social-democratic parties. As the French economist Thomas Piketty demonstrated in “Capital in the 21st Century,” inequality’s staggering growth shows no signs of stopping. And it’s pulling democracy apart at the seams; no one but the rich feels represented.

The failure of the Democratic Party to reverse this over the past 40 years can’t be overstated, which is precisely why the resistance cannot just be about getting Democrats elected. One of the biggest groups to emerge from the new wave of “resisters” is Indivisible, which was founded by a few liberal former congressional staffers and says it wants to borrow tactics from the Tea Party, as it did when it inspired the raucous protests at town hall meetings that helped turn the tide against Obamacare repeal.

This enthusiasm has gotten the traditional Democratic donors and fund-raisers excited: From longstanding groups like Democracy Alliance to liberal tech entrepreneurs, money is pouring into Indivisible and similar organizations. But often these groups have focused on influencing Democrats or getting them elected (sometimes successfully, sometimes not) rather than building a broader movement.

The Indivisible activists should be making common cause with another movement that has surged since the election: the Democratic Socialists of America, an activist group that works on both national and local levels, has grown to about 30,000 members from about 5,000 since the election, largely driven by its association with Bernie Sanders, who, though not a member, also identifies as a democratic socialist. (Disclosure: I’m a member.)

New members of the D.S.A., most of them millennials, have instinctively recognized the need for radical wealth redistribution, forming what the group’s national director, Maria Svart, calls “the left wing of the resistance.”

The D.S.A. — which isn’t a political party — has supported some left-wing candidates across the country, from the Brooklyn City Council to a Virginia House race. But even as it is willing to work with some Democratic candidates or with Democrats on specific issues, its focus is pushing a broader agenda for equality, such as making the case for single-payer health care, while criticizing capitalism itself for driving upward redistribution of wealth. That might make some traditional liberals and Democrats uncomfortable, but in order to resist Mr. Trump, we ought to be thinking about how we ended up with a yawning wealth gap in the first place.

If the resistance is going to turn into a vital, sustainable left-wing social movement, it has to build strong relationships and share its resources with the people who are most affected by oppressive economic policies, sexism, xenophobia and racism.

“I come from a people who’ve been resisting for the past several centuries in this country,” Charlene Carruthers told me recently when we discussed activism since the election. Ms. Carruthers is the national director of Black Youth Project 100, a racial justice organization for black youth founded in Chicago and active in a dozen states. The best first step after a shock like the election isn’t just to throw yourself into a churn of activity, Ms. Carruthers said, but to “listen to the people who aren’t shocked.” . . .

In January, protesters gathered at John F. Kennedy Airport in New York after President Trump announced his first travel ban. CreditYunghi Kim/Contact Press Images

The election has galvanized activists of all kinds. After Hillary Clinton’s poor performance with working-class white voters, many on the left have realized that this constituency deserves more of its attention. I spoke recently to Kate Hess Pace, who founded Hoosier Action in her home state of Indiana, a membership organization for working-class Indianans who, with the decline of unions, have few ways of influencing politics. The group has brought members to Washington to lobby their senators on health care, among other actions. Ms. Pace says that most of the people she talks to in Indiana don’t hate Democrats or Republicans, but “outsiders,” people in Washington who have caused their state’s decline.

Some new members of the resistance may have people they can turn to easily for guidance: their kids. The radical movements calling attention to inequality and racism well before Mr. Trump’s election — from Occupy to the movement for black lives to a growing interest in socialism to the Dreamers protests — have been driven by millennials. And these movements are eager to grow.

There’s a reason that young people were taking up activism and protest years before “President Donald Trump” was a phrase anyone could imagine: Racism, sexism and inequality are nothing new. Mr. Trump’s election just ripped the polite veneer off American politics. In the process, I hope, he’s woken up a lot more people to the deep problems in our society.

“Many people that become deeply discontent with the status quo have some moment in their lives when all of a sudden they realize that what they’ve been taught are lies,” said Stuart McIntyre, a 27-year-old activist with the Ohio Organizing Collaborative, an umbrella group with much of the membership coming from black-led organizations in Ohio’s cities that has also seen an influx of new members since the election. “In my experience, a lot of people of color have that ‘mirror moment’ when they’re children. Among left-wing groups, a lot of people maybe have that moment in college. But for a lot of middle-class people, and for a lot of white Americans, that mirror moment is actually happening right now.” That’s a good thing.

“I’m looking for converts rather than for traitors,” Mr. McIntyre said. “I want our movement to be as big as possible.”

Sarah Leonard (@sarahrlnrd) is the features editor at The Nation and an editor at large at Dissent. She is a co-editor of “The Future We Want: Radical Ideas for the New Century.”

 

Who’s Right, Trump or Desai? There’s a Discrepancy of $8200

By JIM TANKERSLEY Oct 17, 2017 for The New York Times

. . . Mr. Trump’s Council of Economic Advisers said in a report released on Monday that reducing corporate taxes could raise average household incomes by as much as $9,000 a year. The top end of that estimate was based on work by a trio of researchers, and on Tuesday one of them, Mihir Desai of Harvard, said Mr. Trump’s team had misread the research. The actual income gain implied by his study, he estimated, would be $800.

Mr. Trump’s economic team disagreed — saying Mr. Desai had erred in interpreting his own paper. [Imagine!]

Mihir Desai at Harvard

The Republican proposal, which still lacks key details, thus far includes what analysts project will be only modest reductions in income taxes for many middle-class Americans. But it reduces the top corporate income tax rate to 20 percent from 35 percent, a move that Mr. Trump and Republican leaders say will spark faster economic growth and higher profits. Their theory is that companies will pass those winnings on to workers by raising their pay.

That claim has already run into opposition from many economists, particularly liberal-leaning ones. It could prove a difficult sell politically, at a time when corporate profits are near record highs and polling suggests Americans are skeptical that the Republican plan will help average workers.

They are facing a lot of headwinds” in selling the plan, because Americans will not see it as a boon to the middle class, said Andrew Bates, a spokesman for the liberal opposition research group American Bridge, which is gearing up to oppose the Republican plan. “This plan is vulnerable, based on that landscape.”

As they prepare to release a full tax plan in the coming weeks, though, Republicans are pressing the argument.

“Fixing the business side of our tax code is really all about helping families and workers,” House Speaker Paul D. Ryan, Republican of Wisconsin, said last week. “Cutting the corporate tax rate means more jobs here in the United States. It will foster increased competition, which will directly drive up wages for our workers. Higher wages means bigger paychecks.” [What delusion—cutting the tax rate will do no such thing. Who is Speaker Ryan kidding—himself or the American worker?]

The parliamentary language in the resolution would allow Republicans to pass tax cuts that cost as much as $1.5 trillion over the next decade with only 50 votes in the Senate, not the 60 needed to overcome a filibuster. Republican leaders have said that without a budget, there will be no tax cut.

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President Trump at the Heritage Foundation

In a speech at the Heritage Foundation in Washington on Tuesday evening, Mr. Trump called on Congress to quickly pass “incredible tax cuts” that he said will allow individuals, big corporations and small businesses to keep more of the money they earn.

 

“Our tax plan will ensure that companies stay in America, grow in America and hire in America,” Mr. Trump told employees and supporters of the conservative organization. “We will lift our people from welfare to work, from dependence to independence, and from poverty to total, beautiful prosperity.”

The president urged the Heritage Foundation audience to help the administration put pressure on Republican lawmakers to support the tax cuts, saying that “you will see things happen like have never happened before. We will have employment. We will have jobs. We will have companies moving back into our country.” [All of these are pure presidential pipe dreams!]

He added: “Let’s give our country the best Christmas present of all: massive tax relief.”

Many economists, including ones who served Democratic presidents, agree that lowering corporate taxes could lead to higher incomes for workers. A few, such as Lawrence B. Lindsey, the former director of President George W. Bush’s National Economic Council, have estimated the Republican plan for corporate cuts could lead to income gains of the magnitude that Mr. Trump’s economists are projecting.

But other economists have criticized the Trump team’s estimates as well above what research supports. That includes Mr. Desai, a professor at Harvard Business School and Harvard Law School, who co-authored a study on corporate taxation that Mr. Trump’s Council of Economic Advisers drew upon for its estimate. The report said that a corporate tax cut would increase average household income by $4,000 per year on the low end to as much as $9,000 at the high end.

Mr. Desai, who wrote the study with Harvard’s C. Fritz Foley and James Hines Jr. of the University of Michigan, said his own estimates of the effect of such a rate cut was closer to $800 a year. “I’m a believer in corporate tax reform, and I’m a believer in corporate tax cuts, and I believe they would go to workers,” he said. “But I don’t believe those numbers add up.”

The chief of staff for the council, D.J. Nordquist, said in an email that the $800 estimate was “far” from the academic consensus on the effects of corporate tax reductions on workers. “It’s gratifying to see Professor Desai agrees with us that there is a need for corporate tax reform and that rate reduction is the best way to help the middle class,” she wrote. “But the CEA did not misinterpret the Desai, Foley, and Hines paper.”

Other economists have attacked the council’s estimates in harsher terms than Mr. Desai. Robert J. Shapiro, the chairman of the consulting firm Sonecon and a former economic adviser to President Bill Clinton, said on Tuesday that there was no evidence in United States history of lower federal corporate tax rates driving surges in investment or wages. The council’s mistake, he said, was “in believing that the corporate tax rate determines the investment rate. That’s just not true.”

Polling suggests middle-class Americans are not clamoring for corporate rate cuts, and that they do not expect the Republican plan to reduce their own taxes. Recent polls by ABC News and the Pew Research Center show a majority of Americans would prefer to raise, not cut, corporate taxes. . . . 

Will the California Wine Country Lose its Immigrant Workers Through Housing Loss?

An irony of the fires in Northern California is that its vineyards, having been mercifully saved from the conflagration, may have lost their rightful harvesters, whose houses burned down and who may be forced to leave.

Remember Steinbeck’s novel, “Grapes of Wrath,” where the fruit harvesters lived in squalid makeshift camps?  How far have Californians come from there? The need for employers to do more for their workers is evident.  

18migrants3-superJumboCameron Mauritson, who supplies 60 wineries in Sonoma County, Calif. overseeing the harvest on Monday. Losing immigrant labor would be “catastrophic to our economy,” he said. Photo credit Bryan Meltz for The New York Times

SEBASTOPOL, Calif. — The lush vineyards that dot the hillsides and valleys here largely survived the fires that leveled neighborhood after neighborhood to the east.

Crushed cabernet sauvignon, merlot and other grapes in tanks are now fermenting into wines that have earned California a prestigious place among global producers.

But the wine industry and the lodging, restaurant and construction sectors that help make this bucolic region a draw for millions of visitors each year are now bracing for a different crisis: the potential loss of many members of their immigrant work force.

Some 5,700 houses and structures have been destroyed and many more damaged by the blazes that barreled through Northern California last week. About 100,000 people were displaced, temporarily or permanently.

It is still too early to know how many of them were immigrants, who are in the most precarious position of any group. Because many of them are in the country illegally, they are ineligible for most disaster aid, raising concerns that those without places to live will move to other regions where housing is more plentiful and cheaper.

“To function, we have to be able to retain the immigrant workers in the area,” said Cameron Mauritson, who grows grapes on 350 acres in Sonoma County for 60 wineries. Losing them, he said, would be “catastrophic to our economy.”

. . . [I]mmigrants play a significant role here: nearly one-fifth of the residents in Santa Rosa’s metropolitan area are foreign-born, according to an analysis by Manuel Pastor, a professor at the University of Southern California who studies immigration. Latin American immigrants, mainly from Mexico, dominate the blue-collar work force.

Immigrant enclaves straddle Sebastopol Road, a thoroughfare in Santa Rosa lined with Latino-owned restaurants, supermarkets and gown shops catering to teenage girls celebrating their quinceañeras. Coffey Park, a Santa Rosa neighborhood that is home to many foreign-born residents, was devastated by blazes lit by flaming embers that flew across a six-lane highway.

Immigrants make up a majority of the 55,000 people employed by the wine industry and are also ubiquitous in the kitchens of farm-to-table restaurants and ritzy resorts that make the region a magnet for affluent tourists.

18migrants4-superJumboCabernet grapes being harvested at Mauritson Vineyards. The wine industry draws millions of visitors to the area, fueling the lodging, restaurant and construction sectors. PhotoCredit Bryan Meltz for The New York Times

Sonoma County also has some of the highest rents in the country, at par with the San Francisco Bay Area. But pay here tends to be lower than in the city.

In San Francisco, housekeepers at unionized hotels earn about $23 an hour, compared with $11 to $13 an hour in Sonoma County, according to Unite Here, the union that represents room cleaners in those areas.

“It’s extremely expensive to live in Sonoma County, and rents keep going up,” said Wei-Ling Huber, president of Local 2850 of Unite Here. “The fire is only going to exacerbate the housing crisis.”

It is not uncommon for immigrants who earn $40,000 annually to pay $1,800 a month in rent in Santa Rosa, and anecdotal evidence suggests that prices have been rising since the fires swept through.

Manuel Vieyra was paying $1,650 a month to rent a three-bedroom house. Having endured a traumatic escape as his house went up in flames last week, his family is now struggling to find a place they can afford.

“They’re asking $2,000, even $2,800 a month,” he said. “I don’t know what we’ll do.” The family, which lost everything, also needs money to replace their car, which his wife used to reach her housekeeping job, and his work truck.

Mr. Vieyra, 51, a father of three, works in high-end residential construction and has lived in Sonoma County since he crossed the border as a teenager to work in the vineyards of Sebastopol.

His family is staying at a friend’s small house, rather than in one of the shelters, out of concern that Mr. Vieyra and his wife, Fabiola, who are both undocumented Mexicans, could be arrested.

Spanish-language media and advocacy groups have publicized that federal immigration authorities will not be conducting enforcement actions in areas affected by the fires. Senator Kamala Harris, the California Democrat, tweeted over the weekend that she had “personally confirmed” that policy with the acting Homeland Security secretary, Elaine Duke.

I’ve personally confirmed with Acting DHS Secretary Elaine Duke that ICE will not be conducting immigration enforcement in impacted areas.

But at a tidy, comfortable shelter at the Finley Community Center in Santa Rosa, there appeared to be no Latinos in sight on Sunday, not even in the semiprivate “family suites.”

Even those who did not lose their homes have had their lives upended.

For years, Manuel Correa has tended the gardens of 40 homes in an exclusive subdivision in Santa Rosa. At least 10 of the houses were destroyed, and another 25 were evacuated. Mr. Correa and his crew have not worked for a week.

“I’m worried about how we’ll manage; there are so many bills,” said Mr. Correa, 29, who has two young children and another on the way. His monthly rent is $2,000.

No one expects a prolonged work shortage, as cleanup and reconstruction will create a demand for cheap labor, and the vineyards were largely untouched.

The question is whether the workers can find places to stay.

Along with not qualifying for assistance from the Federal Emergency Management Agency, undocumented immigrants also do not qualify for unemployment and welfare benefits.

A coalition of immigrant-service providers and advocates on Sunday started Undocufund, a fund-raising effort for undocumented families affected by the fires. By Tuesday afternoon, it had raised about $175,000. The Sonoma County Grape Growers Foundation started a fund on Tuesday to help farmworkers pay their rent, find housing and refurnish their dwellings, with an initial commitment of $50,000.

Duff Bevill, head of Bevill Vineyard Management, which harvests his vineyards and those of 30 other growers in Sonoma County, was already planning to build a dormitory to house 38 seasonal workers that he hopes to bring in from Mexico. He intends to use a visa program for farmworkers that requires employers to provide housing.

In the past, that rule and others have led many farmers to bypass the visa program and hire workers who overwhelmingly are undocumented. But more farms in the wine country could soon be forced to consider providing housing. [And why not?]

Mr. Bevill attended a meeting on Sunday with county supervisors, Hispanic community leaders, business representatives and farmers to discuss rebuilding Sonoma County. One of the biggest risks they identified was the loss of workers.

“The first thing that will start happening is, people who work in vineyards, hotels and restaurants will lose access to affordable housing and start leaving,” Mr. Bevill said. “At some point, workers are going to say they can’t find a place to live, and they’re going to leave.”

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Vineyards around the Sonoma County town of Healdsburg. Even though the crops were mostly unscathed, the fires have put pressure on an already tight housing market. PhotoCredit Bryan Meltz for The New York Times

Deep in Trump Country, a Big Stake in Health Care – Part Three

Part Three of an article from The New York Times on how the President’s proposed curtailment of the Affordable Care Act will act to the detriment of those that voted for him.

 

Even now, with a repaved Route 62 running through it, Mountain Home is still what residents call a place you’ve got to be coming to, to get to. Joe Miles, now 65 and president of Integrity First Bank, grew up about 90 miles downstream on the White River and used to hunt and fish here as a child. “You couldn’t get here except by ferry,” he recalled.

Steve Stamey, left, and Mike Browder fishing at Gaston’s White River Resort. The trout-filled river has lured fishermen to the area for decades.

Spectacular Ozark scenery, lakes and a river crowded with trout, thanks to federal dam projects, started luring fishermen to the area in the 1950s. The next decade, a group of local businessmen pushed development at a time when the ambulance doubled as a hearse, and the traffic light at Seventh and Main Streets was removed because there were so few cars.

One was T. J. McCabe, a co-founder of Integrity First, who traveled to boat and recreational-vehicle shows in the Midwest, giving away deeds for “one square inch of heaven” and telling the recipients to come visit their property.

“And they would come,” Mr. Miles recalled. “What we’re reaping today are second and third generations from Chicago, Green Bay and Minneapolis.”

Vacationers — blue-collar workers with dependable pension plans — turned into retirees. They were drawn by the lower cost of living, natural beauty and, over time, a full-service, community-centered hospital that could treat hip fractures, diabetes and congestive heart failure without a three-hour drive.

Marjorie Swanson’s parents moved to Mountain Home after researching best-places-to-retire lists. It was during a vacation visit that she and her husband decided it would be a great place to raise their children.

Sloan Lively, 23, training development coordinator, giving Joann Bell, 86, a manicure at Elmcroft of Mountain Home, a senior living center. The town has long been a haven for retirees.

Many of the retirees — who make up 30 percent of the county’s population — join a large network of volunteers at the hospital; a smaller circle of wealthier ones are big financial donors as well.

In a county where two-thirds of the public-school children qualify for free or reduced-price lunch, such contributions have funded scholarships that helped pay for Ms. Green’s advanced nursing training, and college for Alison Swanson and her brother, Matt. In addition, they have underwritten emergency-room furniture, wheelchairs, free wigs for cancer patients and more.

The stream of retirees slowed when the housing market crashed, and nest eggs turned into foreclosures. During the recession, those who came were like Sarah and Blair Brozynski, Chicago residents who had long vacationed here. They lost their jobs and moved to their summer house in Mountain Home, where they could live with their five children more cheaply.

Now director of education at the hospital, Ms. Brozynski, 47, remembers when the factories laid off workers, the hospital stopped hiring and a wave of closings hit resorts. Car lots were full because no one was buying.

“That was pretty sad, and we got a taste of it,” said Ms. Brozynski, whose husband is training to be a paramedic on a hospital scholarship. A son, also named Blair, is working in the hospital kitchen while he finishes college. She fears that if Republicans unwind the health care law, the tough times will return.

Many were skeptical about the Affordable Care Act, but its funding is cited as a lifeline in extending coverage.

Ms. Brozynski supported Mr. Obama’s health care legislation when it was first proposed, but many others in the county were skeptical. Some objected to the rise in premiums or a provision devised to keep the plan solvent — fining people who failed to sign up for coverage.

Now, whatever the criticisms, the dozens of employees interviewed at Baxter Regional and elsewhere all expressed thanks that more people had insurance. Michael Haynes, a 64-year-old real estate agent, credited the Affordable Care Act with saving his life. He didn’t have insurance before 2014. Without it, he would not have gone for a routine physical, which led to a diagnosis of prostate cancer and Hodgkin’s lymphoma. After chemotherapy treatments, he is in remission.

At the Christian Clinic — the health care provider of last resort — the number of nonpaying patients seen each week has dropped from 90 to about 50 because of the expanded coverage, said Dr. Paul Wilbur, the clinic’s chairman.

The Affordable Care Act has reduced the number of nonpaying patients at the Christian Clinic, the area’s health care provider of last resort. Dr. Paul Wilbur saw a patient in an examination room.

 

The law has brought insurance to more than 360,000 people in Arkansas, and it now covers 61 percent of children in the state’s small towns and rural areas. “That meant just a gigantic helicopter drop of federal funding,” said Mark Duggan, an economist at Stanford. If that is reversed, “the hospital sector is going to get really hard hit.”

Dr. Bradley, who voted for Mr. Trump and credits him with shaking up inside-the-Beltway cronyism, said the health care law had “benefited hospitals, patients and providers in the state of Arkansas.”

“There were lots of parts in that bill that were done right, parts that were necessary,” Dr. Bradley said. There were significant shortcomings, too, he said, but they are fixable. Sadly, he added, bitter partisanship has made the law a lasting target.

The endless fighting over the health care law has left some of the Swansons so frustrated that they wonder if starting from scratch is the only way to move forward.

“Let it implode and start from ground zero,” Marjorie Swanson suggested at one point. But that prospect, echoing a threat by Mr. Trump, scared other members of the family.

“What does that actually mean?” Ms. Green said. “If he’s going to let it fail and there’s no reimbursements and things are closing, how many casualties are in the wake?”

This concludes the three-part article on health care in the Ozarks.

Deep in Trump Country, a Big Stake in Health Care – Part Two

Part Two of 

Fans arriving for a high school football game in Yellville, Ark., that raised money for the Peitz Cancer Support House

 

 

The financial effect of the Affordable Care Act on the hospital has been mixed. The Medicaid expansion in Arkansas allowed residents earning 138 percent of the federal poverty level — $16,643 for an individual or $33,948 for a family of four — to buy private insurance paid for primarily by the federal government. That extended health care access to people in the hills and surrounding counties who had never been insured, and shrank charity-case costs.

But it also reduced Medicare reimbursements, which cover the elderly. This trade-off left many hospitals ahead, but not Baxter Regional, which has an unusually large share of Medicare patients — 67 percent compared with a national average of 40 percent.

The added $4 million in Medicaid payments did not make up for the $12 million lost through Medicare. As Mr. Peterson points out, however, the Republican proposals to remake the law would have decreased Medicaid money without restoring any Medicare cuts. Arkansas would be particularly hard hit because it is among a handful of states with provisions that automatically end expanded Medicaid benefits if federal funding is reduced. The results would include fewer insured patients and a lot more debt.

A repeal now, Mr. Peterson said, would be calamitous.

“I was not initially a proponent,” he said of the law. “But once Medicare was cut, then it was very important to make sure you got the whole benefit from the Medicaid expansion. Otherwise, you would have just seen the cuts. Why would I be for that?”

Health Care as a Reason to Stay.

It’s a five-minute drive from Baxter Regional to the office of Robin Myers, the chancellor of Arkansas State University-Mountain Home, a two-year college that works closely with the hospital to produce job-ready students.

Arkansas State University-Mountain Home works closely with the hospital to produce job-ready students. Brittney Harkins, training to be a licensed practical nurse, practiced checking heartbeats

“I can’t tell you how intricately we are tied together with the hospital,” Mr. Myers said. “We could not survive without them.”

“We’re really educating people in the health care professions to stay here,” he added, noting that the school’s typical student is a 28-year-old woman. Once housed in a funeral home and feed store, the college now occupies a stately campus completed in 2000 and styled on Thomas Jefferson’s neo-Classical design for the University of Virginia.

Mountain Home, like other rural towns, is seeing an outflow of young people. The kindergarten has 100 fewer children than it did five years ago. But Mr. Myers said that “if we have opportunities for them, they want to come back.”

Alison Swanson                                      

Marjorie Swanson’s daughter, Alison, 23, returned after graduating from college in 2016 with a fine-arts degree. She found an internship with a Stanford University professor, but when it ended, she had no job and no way to afford San Francisco’s sky-high rents.

“I was broke,” she said. “I came back home and was just trying to save up money and working a minimum-wage job that was terrible.”

When a rare opening as a well-paid pharmacy technician arose, her mother urged her to apply. “I’m really, really fortunate, and I really like this job,” Ms. Swanson said. “I would have never thought I would have done this, but the opportunity was there.”

Dr. Lucas Bradley, a neurosurgeon who had just finished up his residency in Little Rock, grew up in Maine, not Mountain Home, but he and his wife, Karla, knew they wanted to raise their family in a small town. Without a growing full-service hospital, though, Dr. Bradley, 37, said he probably wouldn’t have moved here and bought a house. His children — six with a seventh on the way — wouldn’t attend nearby public schools. His wife wouldn’t shop at Harps or fill the car’s gas tank at Valero. His family wouldn’t attend one of the area’s churches.

Members of the Bradley family — who have a seventh child on the way — on their property outside Mountain Home. A study found that Baxter Regional workers generated more than $216 million a year in economic activity.

An economic impact review by the hospital concluded that workers’ earnings combined with their spending on groceries, clothing and the like generated more than $216 million a year in economic activity and helped create 1,280 jobs beyond their own. The hospital spends an additional $19 million a year on goods and services in a dozen surrounding counties. Based on the loss of Medicaid expansion money, the review estimated that a repeal of the Affordable Care Act could mean up to 500 layoffs at the hospital.

To be continued