Wherein the Nonprofiteer Does a Literature Review and Endorses an Increased Minimum Wage

Over on The Nonprofiteer, I demonstrate my recovery from the Chicago School of economics by reviewing arguments for (and even one against) an increase in the minimum wage. Not sophisticated but (I hope) clear.

Stupid Billionaire Tricks: Give Charity to MBAs

The Nonprofiteer is at it again, gently suggesting that a Sun Microsystems billionaire isn’t necessarily the world’s authority about how to combat poverty.  But maybe fighting poverty isn’t what he had in mind after all.

Who taught people to say “charity” with a sneer?

What The Well-Off Would Pay for Wendy’s Coffee Doesn’t Matter

The fast food industry may not be able to pay higher wages because its customers are as poor as its employees

Labor protests were recently held in front of more than 1,000 fast food restaurants around the country. As a result of our job-killing recession and subsequent job-lite recovery, the fast food workforce is no longer composed mainly of teenagers. It now comprises many adults who are raising families, which is pretty hard to do on eight or nine bucks an hour and no health insurance benefits. Hence the protesters’ call for unionization and higher wages.

Many members of the San Francisco Bay Area Starbucks-going crowd (of which I am one) responded to the protests by lambasting Wendy’s, McDonald’s, Burger King et al., e.g., “Starbucks charges more for coffee so that it can give its staff good wages and benefits. Wendy’s is just too stupid or too cheap to do the same thing”. When I hear comments like this from my fellow well-intentioned members of the upper-middle class, they make surface sense to me for a few seconds. But then I remember my experience working in a fast food restaurant. Continue reading “What The Well-Off Would Pay for Wendy’s Coffee Doesn’t Matter”

I have a snooze

The GOP boycotts the public commemoration of the March on Washington.

Where was the party of Lincoln at the commemoration of the March on Washington and MLK´s great speech?

Former President George H.W. Bush: too poorly to attend (he´s 89)

Former President George W. Bush: recovering from surgery

Former Governor Jeb Bush (invited to stand in for other Bushes): other engagements

Senate Minority Leader Mitch McConnell: no reason published (spoke at a special Capitol event  on July 31, the true anniversary, along with Nancy Pelosi and Harry Reid) [Correction from comments: August 28 was the true anniversary; the earlier event was presumably brought forward to fit with Congress´ recess.]

House Speaker John Boehner (invited to speak): other engagements

House Majority Leader Eric Cantor (invited to speak): other engagements

Former GOP Presidential candidate Senator John McCain: other engagements

African-American GOP Senator Tim Scott: claimed not to have been invited, then pled other engagements.

The earlier Capitol event provides a figleaf, but where was it on TV? If the GOP were serious about reaching out to black voters, its leaders would have been fighting their way to Obama´s microphone on the Mall with their crutches.

African-Americans will draw their own conclusions. The Democratic Party is not always a reliable or effective ally in politics, but it´s the only one they´ve got.

 

 

On Blaming Black Leadership

This fine piece in In These Times  reminds us how instrumental Federal policies on homeownership and road construction were in killing Detroit, and gives the lie to those who want to blame the city’s bankruptcy on corrupt leadership–specifically, corrupt Black leadership.

Certainly there were, and are, Black leaders whose personal weaknesses interfere with the progress of the entities they seek to lead; but the pattern of blaming Black leaders comes from the same bag of racist tricks as the suggestion that the President isn’t really an American because he has black skin.

Detroit is not struggling because its leaders, or its people, are Black.  Its troubles lie at the door of white legislators who made abandoning cities a winning proposition for white families, and white regulators who contributed to the same flight, and white car company executives who decided they owed nothing back to the city of their birth.

To claim otherwise is simply to blame the victim.

 

 

What Detroit means

The first thing I thought about Detroit is that the state’s appointment of a receiver demonstrated the Republican governor’s profound indifference to the democratic process of a Democratic city, not to mention a white governor’s profound indifference to a black city.   This may be true, but it’s also true that Detroit’s finances are such a catastrophe that, like New York in the 1970s, it seems to need an outsider to get its house in order. It helps that the trustee is African-American, though not very much: even temporary government without the consent of the governed should cause us alarm.

The second thing I thought about Detroit is that selling off the collection of the Detroit Institute of Art, which the trustee estimates would be sufficient to retire all of the city’s debt, is the best of a number of bad options. Museums nationwide are hyperventilating at the prospect, but they also think it’s sensible to keep on hand huge numbers of items that no one ever sees.  I don’t quarrel with the need to have a deep collection for research purposes, but I also don’t see why it’s considered bad form verging on unethical to sell the parts of the collection you’re not using in public to sustain the parts of the collection you ARE using in public, and at the same time not coincidentally making the sold pieces available to the public, albeit in a different location.

If there had been a Great Fire of Detroit, and the whole city destroyed, no one would argue that recreating the city’s art collection should take priority over food and shelter for the city’s people.  The years of financial mismanagement have incinerated Detroit just as surely as a physical fire; why shouldn’t we pay more attention to basic needs than to cultural institutions?

And isn’t the whole function of assets to provide financial security when income doesn’t suffice? Again, I wonder about the racial composition of those who champion the inviolability of the collection as against the racial composition of those who think it might be necessary to dispose of it. The state’s Attorney General has opined that the city may not sell them because they’re held in trust for the citizens.  But “The United States shall guarantee to every State in this Union a Republican Form of Government,” and I don’t notice anyone’s raising a ruckus about the loss of that part of our patrimony.

The third thing I thought about Detroit is that the bondholders’ interests are being given absolute priority over the interests of current and former employees, whose pensions are at stake. This is the case in Illinois as well, where at least some portion of the pension “crisis” could be solved by refinancing the debt and stretching out repayment but where that solution is not even considered because the bondholders don’t like it. I understand the value of the municipal bond market to cities’ ability to expand infrastructure but municipal bond investors are investors and should be prepared to accept some pain when they toss their dollars into what’s obviously a money pit.

And the fourth thing I thought about Detroit is that it’s Americans’ closest analogue to what’s casually referred to as “the European debt crisis,”  throughout which salvaging the Euro has meant satisfying bondholders at the expense of people who’d like to work or collect their pensions.   Very few commentators seem aware that the real crisis is one of self-government (or its destruction), or that the Germans have managed to do through economics what they couldn’t do through war, that is, run Europe.  When externally-imposed austerity hit Greece, all I could remember was the bumper sticker from the era of the junta: “Greece: Democracy born 508 BC, died 1967 AD.”  Or, this time around, “reborn 1974, killed again 2011 or -12 A.D.”  As the saying goes, same s**t, different day.

Back to Detroit: if I were trustee, I’d sell off DIA’s assets in a heartbeat and use the proceeds to protect employee pensions. If there was anything left for the bondholders, fine; if not, too bad: it’s the pensioners who paid their share and are entitled to what they were promised. Even after years of trashing public employee unions (brought to you by the Heritage Foundation and other fronts for wealthy people who don’t like to pay taxes or see working people make reasonable money), there must be some court somewhere willing to recognize that the obligation of contracts shall not be impaired.

Of course, I would never be chosen trustee, but that’s not the point. The point is, my solution is what would happen if Detroit were still governed by its people. Detroit: Democracy died 2013 A.D.

David Frum’s Strange Critique of Obama’s Record on Public Employment

In endorsing Mitt Romney for President, David Frum writes:

Obama is following a path explored by the British Labor governments of 1997-2010, when the majority of the net new jobs created in northern and western England, Scotland, and Wales were created in the public sector. That approach pushed Britain into fiscal crisis, when the recession abruptly cut the flow of funds from south-eastern England to pay everybody else’s government salary.

The Bureau of Labor Statistics tracks governmental and private sector employment every month (data right here). In January 2009, seasonally adjusted public sector employment at all levels in the United States totalled 22,576,000. Under President Obama, it has fallen to 22,011,000 as of last month. Meanwhile, private sector employment increased over the same period from 110,985,000 to 111,744,000.

Whether it is good or bad to grow public sector jobs is a matter about which reality-based people can reasonably disagree. But lambasting a President for growing public sector jobs when in fact they have contracted on his watch is a departure from reality.

Boss: I’m sending my employees to their rooms without dinner

Behind the new fashion of bosses telling employees how to vote is a very old idea: corporate paternalism.

Yesterday’s New York Times story about bosses who tell their employees how to vote (a practice apparently legalized, under the radar, by Citizens United) raises a dilemma.

Critics of the practice, not implausibly, say the goal of the practice is intimidation: while voting is secret, other campaign activities (including donations) are not. Employers naturally deny that. But to the extent that they do, it raises the question: if not intended as threats, why are such communications necessary at all? Why can’t employees make up their own minds, as the equal citizens they are?

In the article, David A. Siegel, the Westgate Resorts CEO who told his 7,000 employees to vote for Romney if they valued their jobs if they didn’t want the company to be forced to shed jobs, gave the Times the only plausible answer:

“I really wanted them to know how I felt four more years under President Obama was going to affect them. It would be no different from telling your children: ‘Eat your spinach. It’s good for you.’ ”

Call me convinced. If you look up to CEOs who regard their employees as children, Romney’s your candidate.

(Don’t) Keep Your Head Down

Government needs to have mandatory discipline for high-ranking officials who act like jerks, and a mandatory snitch rule for lower-level employees who pretend they didn’t see it.  If Massachusetts had such a policy, we might not be in the mess we now face about faked test results at the state lab.

Have you ever heard the term “disruptive physician”?  Continue reading “(Don’t) Keep Your Head Down”