Franklin County Democrats

The official site of the Democratic Party of Franklin County, Missouri

Browsing Posts published in February, 2015

The Roosevelt Institute has just released the first installment of their Financialization Project with Disgorging The Cash.

I hope you check out the full paper. Here’s the executive summary:
This paper provides evidence that the strong empirical relationship of corporate cash flow and borrowing to productive corporateImage result for Image, electric blanket investment has disappeared in the last 30 years and has been replaced with corporate funds and shareholder payouts. Whereas firms once borrowed to invest and improve their long-term performance, they now borrow to enrich their investors in the short-run. This is the result of legal, managerial, and structural changes that resulted from the shareholder revolution of the 1980s. Under the older, managerial, model, more money coming into a firm – from sales or from borrowing – typically meant more money spent on fixed investment. In the new rentier-dominated model, more money coming in means more money flowing out to shareholders in the form of dividends and stock buybacks.
These results have important implications for macroeconomic policy. The shareholder revolution – and its implications for corporate Image result for Image, cold, wet blanketfinancing decisions – may help explain why higher corporate profits in recent business cycles have generally failed to lead to high levels of investment. And under this new system, cheaper money from lower interest rates will fail to stimulate investment, growth, and wages because, as we show here, additional funds are funneled to shareholders through buybacks and dividends.
That might explain why the rich are enjoying an economy that ‘s warmer than a thick electric blanket while most of us struggle with wages held down by corporate practices that throw a heavy, cold, wet blanket on the chances of a better life.  It doesn’t have to be this way.

Stereotypes abound in this parody of American Sniper done as if our neighbors to the North had told the story.  Enjoy Canadian Sniper and have a good Canadagiggle.

An instant classic by Jon Stewart as he challenges Fox News(?) to a lie off.  In the process he exposes the driving hypocrisy of American conservativesPantsonfire. Not new but fun!

Mark Ronson has put together this mash-up of Bruno Mars “Uptown Funk” sung by President Barack Obama.  A young female in my house brought thisUptownFUNK to my attention, please thank her or blame me if such a reaction is provoked.

Tony Messenger published From Voicemail to Voicemail: The Short Political Life and Times of Tom Schweich after the recent death of the potential Republican Gubernatorial candidate and current state auditor.  A powerful piece that raises big questions about the Missouri Republican Party.

I have no idea why Schweich killed himself.  But for the past several days he had been confiding in me that he planned on accusing the Chairman of the Missouri Republican Party, John Hancock, of leading a “whisper campaign” among donors that he, Schweich, was Jewish.

This story is likely to go national.  It is definitely going to raise questions about the MO GOP.

As ALEC, the Koch Brothers, and other extreme corporate lobbying groups push state legislatures around the country, including in Missouri, to enact strongmanRight-to-Worse and other anti-paycheck bills a backlash is growing.  Turns out even conservatives don’t like their paychecks getting smaller and their standard of living declining.  This sentiment was expressed in a recent opinion piece by Nicholas Kristof – The Cost of a Decline in Unions.

The abuses are real. But, as unions wane in American life, it’s also increasingly clear that they were doing a lot of good in sustaining middle class life — especially the private-sector unions that are now dwindling.

“All the focus on labor’s flaws can distract us from the bigger picture,” Rosenfeld writes. “For generations now the labor movement has stood as the most prominent and effective voice for economic justice.”

I’m as appalled as anyone by silly work rules and $400,000 stagehands, or teachers’ unions shielding the incompetent. But unions also lobby for programs like universal prekindergarten that help create broad-based prosperity. They are pushing for a higher national minimum wage, even though that would directly benefit mostly nonunionized workers.

I’ve also changed my mind because, in recent years, the worst abuses by far haven’t been in the union shop but in the corporate suite. One of the things you learn as a journalist is that when there’s no accountability, we humans are capable of tremendous avarice and venality. That’s true of union bosses — and of corporate tycoons. Unions, even flawed ones, can provide checks and balances for flawed corporations.

Many Americans think unions drag down the economy over all, but scholars disagree. American auto unions are often mentioned, but Germany’s car workers have a strong union, and so do Toyota’s in Japan and Kia’s in South Korea.

In Germany, the average autoworker earns about $67 per hour in salary and benefits, compared with $34 in the United States. Yet Germany’s car companies in 2010 produced more than twice as many vehicles as American companies did, and they were highly profitable. It’s too glib to say that the problem in the American sector was just unions.

Joseph Stiglitz notes in his book “The Price of Inequality” that when unions were strong in America, productivity and real hourly compensation moved together in manufacturing. But after 1980 (and especially after 2000) the link seemed to break and real wages stagnated.

It may be that as unions weakened, executives sometimes grabbed the gains from productivity. Perhaps that helps explain why chief executives at big companies earned, on average, 20 times as much as the typical worker in 1965, and 296 times as much in 2013, according to the Economic Policy Institute.

Lawrence F. Katz, a Harvard labor economist, raises concerns about some aspects of public-sector unions, but he says that in the private sector (where only 7 percent of workers are now unionized): “I think we’ve gone too far in de-unionization.”

Get ready for the Mea Culpa…

He’s right. This isn’t something you often hear a columnist say, but I’ll say it again: I was wrong. At least in the private sector, we should strengthen unions, not try to eviscerate them.

I applaud Mr. Kristof for having the strength to look at the facts and reach a new conclusion.  To admit it in print is an act only a strong man could commit.  Any strong men in the Missouri legislature ready to stand up for worker rights?

WalMart’s announcement last week that it would be boosting employee wages to $9 this year and $10 next year is a long overdue development. Image result for Image, world's largest yacht So overdue it raises the question – why now?

Wal-Mart Stores Inc.’s landmark decision to boost wages for half a million employees will increase pressure on rival retailers such as Target Corp. to follow suit as the labor market tightens and worker pay climbs nationwide. The world’s largest retailer said Thursday that it would begin paying all of its U.S. hourly workers at least $9 an hour by April and $10 an hour by next February. The plan will result in raises for about 500,000 workers in the first half of the current fiscal year and cost about $1 billion, the company said in a statement. Wal-Mart, the nation’s largest private employer, is trying to reduce turnover among its 1.3 million U.S. workers, which would in turn cut training costs and improve service at its 4,400 domestic stores. With the unemployment rate dropping and jobs more widely available, Wal-Mart’s move may ripple through the retail industry, including at Target.

While it is undeniable that when the nation’s largest employer raises wages there will be an effect on wages in the rest of the economy.  It happened in the 1950′s when General Motors was the largest employer in America and as wages increased at GM the affect reverberated to the benefit of other American workers.  To use a little minor league business lingo – What was the root cause?

The mainstream/corporate media explains it with reasoning like the above excerpt.  Sure, employee turnover and productivity are factors but there are other reasons that they don’t even want to mention – out of sight, out of mind is their operational creed. These reasons are pressures generated by worker advocates like the Occupy movement, labor unions either directly through organizing or financing of groups like OurWalmart, and workers at these companies and others like the FastFood $15 movement.  These are to be avoided by the corporate media lest there be copycat movements or proveImage result for Image, bass boat to be inspirational to workers in other industries.

Of course, these movements have combined with individual need and real world economics to raise awareness that income inequality is exploding not just because the wealthy have set the table but because the scraps falling off the table aren’t enough to live on. I know the GM workers of yesteryear and WalMart workers of today recognize the efforts of other worker advocates to help them achieve a better standard of living.

Let’s hope the tide of rising wages helps dockworkers and oil refinery workers currently involved in labor actions achieve improvements that will flow to other workers.  Who knows, this year’s negotiations between the UAW and automakers may provide even more momentum to a tide that will lift all boats not just the yachts that are already loaded with champagne and caviar.

This week’s audio netcast: Historian and LBJ expert Julian Zelizer says Hollywood missed an opportunity with the movie “Selma.” Former Image result for Image, radioCongressman Mike Barnes calls Vladimir Putin “a KGB thug” but says he has lost his swagger. And Bill Press talks with Erica Sagrans, head of the group trying to draft Elizabeth Warren.

Legislative Update
by Otto Fajen, MNEA Legislative Director
Number 7   Feb. 19, 2015
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