Category Archives: CONGRESS WATCH

Low unemployment isn’t worth much if the jobs barely pay

By Martha Ross and Nicole Bateman – Each month, the Bureau of Labor Statistics releases its Employment Situation report (better known as the “jobs report”) to outline latest state of the nation’s economy. And with it, of late, have been plenty of positive headlines—with unemployment hovering around 3.5%, a decade of job growth, and recent upticks in wages, the report’s numbers have mostly been good news.

But those numbers don’t tell the whole story. Are these jobs any good? How much do they pay? Do workers make enough to live on?

Here, the story is less rosy.

In a recent analysis, we found that 53 million workers ages 18 to 64—or 44% of all workers—earn barely enough to live on. Their median earnings are $10.22 per hour, and about $18,000 per year. These low-wage workers are concentrated in a relatively small number of occupations, including retail sales, cooks, food and beverage servers, janitors and housekeepers, personal care and service workers (such as child care workers and patient care assistants), and various administrative positions. more>

There is No Economics without Politics

Every economic model is built on political assumptions
By Anat Admati – There is absolutely no way to understand events before, during, and since the financial crisis of 2007-2009 while ignoring the powerful political forces that have shaped them. Yet, remarkably, much of the economics and finance literature about financial crises focuses on studying unspecified “shocks” to a system that it largely accepts as inevitable while ignoring critical governance frictions and failures. Removing blind spots would offer economists and other academics rich opportunities to leverage their expertise to benefit society.

The history of financial economics is revealing in this regard. By the second half of the 20th century, when modern finance emerged as part of economics, the holistic approach of early thinkers such as Adam Smith—which combined economics, moral philosophy, and politics—was long gone. Narrow social-science disciplines replaced the holistic approach by the end of the 19th century. In the 20th century, economists sought to make economics formal, precise, and elegant, similar to Newton’s 17th-century physics.

The focus in much of economics, particularly in finance, is on markets. Even when economists postulate a “social planner” and discuss policy, they rarely consider how this social planner gets to know what is needed or the process by which policy decisions are made and implemented. Collective action and politics are messy. Neat and elegant models are more fun and easier to market to editors and colleagues.

Lobbyists, who engage in “marketing” ideas to policymakers and to the public, are actually influential. They know how to work the system and can dismiss, take out of context, misquote, misuse, or promote research as needed. If policymakers or the public are unable or unwilling to evaluate the claims people make, lobbyists and others can create confusion and promote misleading narratives if it benefits them. In the real political economy, good ideas and worthy research can fail to gain traction while bad ideas and flawed research can succeed and have an impact.

Having observed governance and policy failures in banking, I realized that the focus on shareholder-manager conflicts is far too narrow and often misses the most important problems. We must also worry about the governance of the institutions that create and enforce the rules for all. How power structures and information asymmetries play out within and between institutions in the private and public sectors is critical. more>

Why Corporations Can No Longer Avoid Politics

By Alana Semuels – For decades, most companies went to great lengths to avoid opining on social issues. No longer.

What’s changed? Frustrated with political gridlock, consumers have turned to business for leadership. “I think business has to pick up the mantle when governments fail you,” Patagonia CEO Rose Marcario told TIME earlier this year. Young consumers are also more likely to patronize brands whose business models claim to include social change.

Nine in 10 members of Generation Z, who account for as much as $150 billion in spending power globally, believe that companies have a responsibility to social and environmental issues, according to McKinsey. In an age when companies have detailed information on customers’ ages, incomes and political persuasions, they’re calculating that these socially aware consumers are more lucrative than those who might be put off by social-justice campaigns.

“In a politically polarized world that is saturated in social media, you’re not going to escape politics,” says Jerry Davis, a professor of management and sociology at the University of Michigan. “This is a sea change–in the past, companies kept their heads down and did their best to never be seen.” more>

Too Much Democracy Is Bad for Democracy

The major American parties have ceded unprecedented power to primary voters. It’s a radical experiment—and it’s failing.
By Jonathan Rauch and Ray La Raja – Americans who tuned in to the first Democratic presidential debates this summer beheld a spectacle that would have struck earlier generations as ludicrous. A self-help guru and a tech executive, both of them unqualified and implausible as national candidates, shared the platform with governors, senators, and a former vice president. Excluded from the proceedings, meanwhile, were the popular Democratic governor of a reliably Republican state and a congressman who is also a decorated former marine.

If the range of participants seemed odd, it was because the party had decided to let small donors and opinion polls determine who deserved the precious national exposure of the debate stage. Those were peculiar metrics by which to make such an important decision, especially given recent history.

Had the Democrats seen something they liked in the 2016 Republican primary? The GOP’s nominating process was a 17-candidate circus in which the party stood by helplessly as it was hijacked by an unstable reality-TV star who was not, by any meaningful standard, a Republican.

Americans rarely pause to consider just how bizarre the presidential nominating process has become. No other major democracy routinely uses primaries to choose its political candidates, nor did the Founders of this country intend for primaries to play a role in the republican system they devised.

Abraham Lincoln did not win his party’s nomination because he ran a good ground game in New Hampshire; rather, Republican elders saw in him a candidate who could unite rival factions within the party and defeat the Democratic nominee in the general election.

Today’s system amounts to a radical experiment in direct democracy, one without precedent even in America’s own political history.

The two major parties made primaries decisive as recently as the early 1970s. Until then, primaries had been more like political beauty contests, which the parties’ grandees could choose to ignore. But after Hubert Humphrey became the Democrats’ 1968 nominee without entering a single primary, outrage in the ranks led the party to put primary voters in charge. Republicans soon followed suit. more>

Updates from ITU

ITU Green Standards Week adopts Call to Action to accelerate transition to Smart Sustainable Cities
ITU News – ITU Green Standards Week has brought together governments, city leaders, businesses and citizens to share their experiences in driving the behavioral change required to achieve smart city objectives.

These participants have adopted a ‘Call to Action’ urging city stakeholders to accelerate the transition to Smart Sustainable Cities.

These participants have adopted a ‘Call to Action’ urging city stakeholders to accelerate the transition to Smart Sustainable Cities.

The Call to Action highlights that our cities – as powerful hubs of innovation, and a central force behind humanity’s impact on our environment – must make a defining contribution to the achievement of the United Nations Sustainable Development Goals (SDGs). more>

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Obama’s Idealists

American Power in Theory and Practice
By Peter Beinart – In different ways, each book traces a narrative arc that begins with a vow, made in young adulthood, to use the United States’ might for good and ends with a sober realization about how hard fulfilling that vow actually is. For Rice, the arc begins with her failure, as a young NSC aide, to rouse the Clinton administration to halt the 1994 Rwandan genocide, after which she pledged “to go down fighting, if ever I saw another instance where I believed U.S. military intervention could . . . make a critical difference in saving large numbers of human lives.” For Power, it starts during her time as a war correspondent in Bosnia, where the besieged residents of Sarajevo asked her to “tell Clinton” about the horrors she had seen. For Rhodes, it begins with 9/11 and the Iraq war, which left him yearning to harness the idealism he felt the Bush administration had squandered.

In each book, three moments during the Obama administration play outsize roles in chastening this youthful idealism: the decision to bomb Libya in 2011, the decision not to bomb Syria in 2013, and the 2016 election.

The problem isn’t that Rice, Power, and Rhodes shade the truth to make themselves look good. To the contrary, all three are, at various points, admirably frank about their mistakes. The problem is that by refusing to reveal what happened behind closed doors, they fail to help readers understand what lessons to draw from the Libya debacle. Is the lesson that presidents who lack the stomach for nation building shouldn’t topple regimes? Is it that the United States needs greater diplomatic capacity? Is it that brutal dictatorships are better than failed states? By not explaining Libya’s lessons, liberal internationalists like Rice, Power, and Rhodes make it easier for nativist bigots like Trump to proffer a lesson of their own: that Washington should care less about people overseas, especially if they are not Christian or white.

In each, the saga of disillusionment reaches its nadir in 2016, with Russia’s electoral interference and Trump’s election. After witnessing the limits of the United States’ ability to defend democracy and human rights abroad, Rice, Power, and Rhodes realize to their horror the limits of its ability to defend those principles at home. When Obama asks Mitch McConnell, the Republican Senate majority leader, to issue a joint statement condemning Russian interference in the election, McConnell refuses, a move that Rhodes calls “staggeringly partisan and unpatriotic.”

Although none of the authors puts it this way, it’s possible to read their books not only as tales of tempered idealism but also as chronicles of America’s declining exceptionalism. In retrospect, the belief in democracy promotion and humanitarian intervention that Rice, Power, and Rhodes embraced early in their careers rested on a faith that democracy was stable at home. With that faith now eroded—and the United States battling its own rising tribalism, authoritarianism, and brutality—it is hard to imagine a book like Power’sA Problem From Hell,” a critique of the country’s repeated failure to stop genocide, becoming the sensation it did in 2002.

As Americans have grown more preoccupied with, and more pessimistic about, their own country’s moral condition, they have turned inward. As a young woman, Power helped expose concentration camps in Bosnia. Today’s young activists are exposing them in Texas. As of September, foreign policy has barely figured in the Democratic presidential debates. more>

National Security: Keeping Our Edge

By James Manyika, William H. McRaven and Adam Segal – The United States leads the world in innovation, research, and technology development. Since World War II, the new markets, industries, companies, and military capabilities that emerged from the country’s science and technology commitment have combined to make the United States the most secure and economically prosperous nation on earth.

This seventy-year strength arose from the expansion of economic opportunities at home through substantial investments in education and infrastructure, unmatched innovation and talent ecosystems, and the opportunities and competition created by the opening of new markets and the global expansion of trade.

This time there is no Sputnik satellite circling the earth to catalyze a response, but the United States faces a convergence of forces that equally threaten its economic and national security. First, the pace of innovation globally has accelerated, and it is more disruptive and transformative to industries, economies, and societies. Second, many advanced technologies necessary for national security are developed in the private sector by firms that design and build them via complex supply chains that span the globe; these technologies are then deployed in global markets.

The capacities and vulnerabilities of the manufacturing base are far more complex than in previous eras, and the ability of the U.S. Department of Defense (DOD) to control manufacturing-base activity using traditional policy means has been greatly reduced. Third, China, now the world’s second-largest economy, is both a U.S. economic partner and a strategic competitor, and it constitutes a different type of challenger.

Tightly interconnected with the United States, China is launching government-led investments, increasing its numbers of science and engineering graduates, and mobilizing large pools of data and global technology companies in pursuit of ambitious economic and strategic goals.

The United States has had a time-tested playbook for technological competition. It invests in basic research and development (R&D), making discoveries that radically change understanding of existing scientific concepts and serve as springs for later-stage development activities in private industry and government.

It trains and nurtures science, technology, engineering, and mathematics (STEM) talent at home, and it attracts and retains the world’s best students and practitioners. It wins new markets abroad and links emerging technology ecosystems to domestic innovations through trade relationships and alliances. And it converts new technological advances into military capabilities faster than its potential adversaries.

Erosion in the country’s leadership in any of these steps that drive and diffuse technological advances would warrant a powerful reply. However, the United States faces a critical inflection point in all of them. more>

E Pluribus Unum?

The Fight Over Identity Politics
By Stacey Y. Abrams; John Sides, Michael Tesler, and Lynn Vavreck; Jennifer A. Richeson; and Francis Fukuyama – Recent political upheavals have reinvigorated a long-running debate about the role of identity in American politics—and especially American elections. Electoral politics have long been a lagging indicator of social change. For hundreds of years, the electorate was limited by laws that explicitly deprived women, African Americans, and other groups of the right to vote. (Efforts to deny voting rights and suppress voter turnout continue today, in less overt forms but with the same ill intent.)

When marginalized groups finally gained access to the ballot, it took time for them to organize around opposition to the specific forms of discrimination and mistreatment that continued to plague them—and longer still for political parties and candidates to respond to such activism.

In recent decades, however, rapid demographic and technological changes have accelerated this process, bolstering demands for inclusion and raising expectations in communities that had long been conditioned to accept a slow pace of change. In the past decade, the U.S. electorate has become younger and more ethnically diverse. Meanwhile, social media has changed the political landscape.

The marginalized did not create identity politics: their identities have been forced on them by dominant groups, and politics is the most effective method of revolt.

To seek redress and inclusion, the first step is to identify the barriers to entry: an array of laws and informal rules to proscribe, diminish, and isolate the marginalized.

The specific methods by which the United States has excluded women, Native Americans, African Americans, immigrants, and the LGBTQ community from property ownership, educational achievement, and political enfranchisement have differed; so, too, have the most successful methods of fighting for inclusion—hence the need for a politics that respects and reflects the complicated nature of these identities and the ways in which they intersect.

The basis for sustainable progress is legal protections grounded in an awareness of how identity has been used to deny opportunity. more>

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Anatomy of an oversight investigation: White House security clearances

By Isabella Gelfand and Jackson Gode – Since regaining the majority in January, House Democrats have been conducting oversight of the Trump administration on issues ranging from family separation at the border to the rollback of environmental regulations. While the policy areas addressed by these investigations are diverse, House committees often apply the same tools to perform oversight. As Congress attempts to exert influence on the White House in hopes of obtaining information, Trump administration officials continue to utilize several tactics of their own to stall the process.

As part of its mandate to conduct oversight of “the operation of Government activities at all levels,” the House Oversight and Reform Committee is frequently engaged in conflicts with the executive branch over information access. One such clash during the 116th Congress has involved the White House security clearance process, which came under fire when media reports indicated that the administration allowed individuals to operate under interim security clearances for extended periods and ignored concerns raised by intelligence officials. Here, we outline the ongoing security clearance investigation and use it to highlight a set of common steps in the oversight process.

When conducting oversight, members of Congress have several tools at their disposal. Most notably, they can request documents, call witnesses to testify, issue subpoenas, and hold individuals in contempt of Congress for noncompliance. Oversight investigations are often initiated by an official request for information, usually in the form of a letter written by a committee chair to an executive branch official. The chair uses this correspondence to ask for documents and/or to invite a witness to give testimony before the committee. more>

Low Wages, Sexual Harassment and Unreliable Tips. This Is Life in America’s Booming Service Industry

By Alana Semuels and Malcolm Burnley – The decade-long economic expansion has been a boon to those at the top of the economic ladder.

But it left millions of workers behind, particularly the 4.4 million workers who rely on tips to earn a living, fully two-thirds of them women. Even as wages have crept up–if slowly–in other sectors of the economy, the minimum wage for waitresses and other tipped workers hasn’t budged since 1991.

Indeed, there is an entirely separate federal minimum wage for those who live on tips. It varies by state from as low as $2.13 (the federal tipped minimum wage) in 17 states including Texas, Nebraska and Virginia, up to $9.35 in Hawaii. In 36 states, the tipped minimum wage is under $5 an hour. Legally, employers are supposed to make up the difference when tips don’t get servers to the minimum wage, but some restaurants don’t track this closely and the law is rarely enforced.

Waitresses are emblematic of the type of job expected to grow most in the American economy in the next decade--low-wage service work with no guaranteed hours or income. more>