ThinkProgress Logo

Economy

Romney Misleadingly Portrays Common Academic Standards As An Obama-Led Takeover

A common claim among Tea Partiers and the right-wing fringe is that the Obama administration is engineering a “federal takeover” of the public education system through its support for common, national academic standards. During a townhall in New Hampshire a few days ago, 2012 GOP presidential hopeful Mitt Romney played into this nonsensical fear, responding to a question about a “national takeover” of public education via national standards by warning about the Obama administration’s “so-called experts taking over the rights of people, states and local governments”:

If Barack Obama says I’m going to take that and impose it on the nation I will fight it to the ‘n’th degree. We do not have the federal government stepping in with their so-called experts taking over the rights of people, states and local governments. It’s against the Constitution and it’s wrong for America. [...]

I can’t imagine in America where you’re going to have a White House, Republican or Democrat, or a Congress, a Republican or a Democrat, laying out what our kids have to be taught. That is unacceptable.

Education Week’s Michele McNeil sets the record straight:

First, the Common Core, as most of our readers know, is a state-led effort launched and maintained by the organizations representing the state chiefs and governors. The Common Core started before Obama even became president. Certainly, Obama and Education Secretary Arne Duncan have used the bully pulpit — and Race to the Top — to cajole states into jumping on board. The feds also put up money for states to develop common tests. [...]

Second, the teachers’ unions—who are undeniably a key part of the Democratic base — haven’t exactly been the ones driving the train when it comes to the Common Core or common tests. And third, neither Obama nor Duncan say they plan to have anything to do with school curriculum, which is messy business.

Romney is turning a common-sense, bipartisan effort designed by the National Governors Association into an Obama-led socialist takeover. It was a Republican governor — former Georgia Gov. Sonny Perdue — who co-chaired the development of the standards. National standards also have the support of Gov. Mitch Daniels (R-IN). These two are hardly raging socialists. But Romney, to placate the right-wing of his party, has to turn the common standards effort into a plot by the Obama administration to circumvent the Constitution, even if that portrayal is completely absurd.

Yglesias

Newt Gingrich Thinks High-Inflation ‘Reagan-era Monetary Policies’ Would ‘Strengthen The Dollar’

Odd monetary policy ideas are coming so fast and quickly from the right these days that I can’t quite tell if Newt Gingrich’s notion that we ought to be “returning to the Reagan-era monetary policies” is a great idea or a terrible one. The problem is that rather than proposing this as an effort to boost employment, Gingrich says we should “strengthen the dollar by returning to the Reagan-era monetary policies that stopped runaway inflation and reforming the Federal Reserve to promote transparency.”

The problem, as we’ve seen before, is that a review of 30 years of inflation history makes it clear that Reagan-era policies featured much higher inflation than Obama-era ones:

Now by my lights, this is a perfectly good idea. A wide range of economists from Paul Krugman, Olivier Blanchard, and Mark Thoma on the left to Greg Mankiw, Tyler Cowen, and Scott Sumner on the right think that setting a 4 percent inflation target will stimulate real output and reduce unemployment. Indeed, Federal Reserve Chairman Ben Bernanke himself agrees that this would work, but refuses to do it anyway. Under the circumstances, political pressure for a return to “Reagan-era monetary policy” could do a lot of good.

Conversely, if by “Reagan-era monetary policy” Gingrich means that we need to stop “runaway inflation” then of course the question is what runaway inflation is he talking about. Inflation is much lower than it was during the late Reagan years, and wildly lower than it was when Reagan took office.

Security

Wikileaks Cables: U.S. Companies, Diplomats Fought To Prevent Minimum Wage Increase In Haiti’s Textiles Factories

Hanes thought it would be too expensive to pay Haitians $5 a day.

As ThinkProgress reported earlier, The Nation magazine and the Haitian weekly newspaper Haïti Liberté have announced a partnership where they will publish revelations from leaked American diplomatic cables made public by Wikileaks. Over the weekend, the papers published evidence that the U.S. aggressively worked to scuttle a gas development deal on behalf of Big Oil and to counter the influence of left-wing governments in the region. Now, The Nation has published a report detailing efforts by the United States under the Obama administration to successfully defeat a hike in the minimum wage in the textile industry to $5 a day.

In 2009, the Haitian parliament unanimously passed a measure that would hike the Haitian minimum wage to $5 a day. Yet much as the United States government mobilized to protect Big Oil’s profits a few years earlier, American diplomats immediately protested the hike in wages.

Contractors for large American clothing firms like Fruit of the Loom, Hanes, and Levi’s began protesting the increase in the minimum wage, aggressively lobbying the parliament and the populist Haitian president, René Préval, to reverse course. They were soon joined by American diplomats who began to lobby the Haitian government as well, arguing that it would be too costly for textile manufacturers. As one cable noted, “more visible and active engagement by Préval” would be crucial to reverse the hike. Deputy chief of mission David E. Lindwall argued in one cable that the wage hike “did not take economic reality into account” and that the measure was intended solely to appease the “the unemployed and underpaid masses.”

The U.S. Agency for International Development and the Association of Haitian Industry — the main trade organization for textile manufacturers in the country — both funded studies claiming that raising the wages would “make the sector economically unviable and consequently force factories to shut down.” Yet at the same time, in private cables the embassy noted that the wage “had support from a majority of Haitian private sector representatives” because of “reports that wages in the Dominican Republic and Nicaragua (competitors in the garment industry) will increase also.”

In August 2009, Préval partially conceded to the demands of the garment industry and the United States. He negotiated a new arrangement with his parliament that would offer a special carveout for the textile sector — allowing it to pay $3 a day rather than $5 a day — which marked a huge win for major textiles corporations like Hanes and Dockers.

Commenting on the revelations, the Columbia Journalism Review (CJR) calculates exactly how little it would’ve cost the clothing companies to comply with the new $5 a day wages. “Haiti has about 25,000 garment workers. If you paid each of them $2 a day more, it would cost their employers $50,000 per working day, or about $12.5 million a year.” CJR notes that if Hanes had to comply with the new law, it would cost them about $1.6 million a year — yet it made $211 million in profit last year. Yet unfortunately for the people of Haiti, Hanes’ greed was too great to sacrifice so little to help so many.

Gov. Perdue Signs Executive Order To Reinstate Unemployment Benefits — Will Others Follow?

Our guest blogger is Danielle Lazarowitz, Special Assistant for the Economic Policy Team at the Center for American Progress Action Fund.

Gov. Bev Perdue (D-NC)

With North Carolina’s Republican General Assembly holding jobless benefits captive as part of a tough budget battle, Gov. Bev Perdue (D-NC) took a unique action to help the people of her state, and other governors should take note. In an unexpected move last Friday, Perdue issued an executive order that would reinstate unemployment benefits for the 47,000 long-term unemployed people in North Carolina who lost their benefits in April:

“This should not have been about who holds whom hostage,” Perdue said Friday. “They were holding me hostage, but they were really holding 47,000 people hostage. So, yeah, finally I’m going to act on my own. I’m tired of waiting for a partner that does the right thing.”

On April 18, Perdue vetoed the state’s budget bill that while extending unemployment benefits, would have also slashed funding for early childhood education programs, cut millions from Medicaid and mental health services, reduced affordability of public universities, dismantled public safety programs, and triggered massive state layoffs.

Additional bills were introduced into the North Carolina General Assembly to extend benefits that were tied to everything from education cuts to a requirement of community service to receive benefits. Perdue’s executive order finally put an end to this game of chicken that played with the financial well-being of innocent North Carolinians.

As the Center for American Progress continues to show, unemployment benefits are critical to boosting our economy as a whole and reducing poverty. But currently, eight states (Alaska, Arizona, Utah, Kansas, Wisconsin, Alabama, Pennsylvania, and Virginia) and the District of Columbia find themselves in the same position as North Carolina, with extended unemployment benefits expired or about to expire.

If the eight states — and DC — that see their jobless benefits disappearing do not find themselves in the political environment to pass legislation to extend them, their governors might look to Perdue for a new approach to provide that crucial safety net for their state’s long-term unemployed. To be sure, there are some that have questioned the governor’s authority to issue such an order, but the U.S. Department of Labor said on Monday, “The provisions of the executive order meet federal requirements.” And that is all that the 20,000 people who began seeing funds in their benefits accounts yesterday needed to hear.

NEWS FLASH

GOP Economists Call Pawlenty’s Economic Plan ‘Impossible,’ ‘Totally Unrealistic’ | TPMDC asks former Congressional Budget Office (CBO) directors who worked under Republican presidents to evaluate 2012 GOP presidential hopeful Tim Pawlenty’s economic plan. “It’s impossible,” said Robert Reischauer, CBO director under President George H.W. Bush. “It’s totally unrealistic,” added Reagan CBO director Robert Penner. As we’ve noted, Pawlenty’s tax cut plan would cost three times as much as the Bush tax cuts.

NEWS FLASH

Senate Defeats Swipe Fee Regulation Delay | The Senate today refused to adopt an amendment by Sen. Jon Tester (D-MT) that would have delayed new regulations capping the fees that banks can charge merchants for debit card transactions. The banking lobby had invested heavily in trying to get the delay enacted, but Tester’s bill received only 54 votes (with 60 needed for adoption). As we noted earlier, several senators who had previously supported the cap flipped their support to back the delay.

Pawlenty’s Economic Plan Cuts Taxes For Millionaires By 41 Percent

2012 presidential hopeful Tim Pawlenty (R) yesterday laid out his economic “plan,” which is based around huge tax cuts that Pawlenty claims will spark a decade of 5 percent GDP growth, even though growth staying at that rate for that long has literally never occurred in America. As Michael Linden noted, Pawlenty’s tax plan would cost $7.8 trillion over ten years, triple the size of the Bush tax cuts.

During his speech introducing the plan, Pawlenty excoriated President Obama as “a champion practitioner of class warfare.” “I come from a working class background. I didn’t grow up with wealth. But I’ve never resented those who have it,” Pawlenty said. But as a new analysis from Citizens for Tax Justice shows, in addition to being outrageously expensive, Pawlenty’s tax plan is based on the Republican brand of class warfare — giving millionaires huge tax breaks:

– Taxpayers with incomes in excess of $1 million would enjoy an average cut in personal income taxes of $288,822, a 41.4 percent cut.

– Taxpayers with incomes in excess of $10 million would enjoy an average cut in personal income taxes of $2.4 million, a 46.3 percent cut.

The cost of the personal income tax cuts just for taxpayers with incomes in excess of $1 million would be $141.8 billion.

And that’s just for Pawlenty’s income tax plan. He has also proposed eliminating the capital gains and estate taxes entirely, two moves which would overwhelmingly benefit the very richest Americans.

Pawlenty likes to point to his middle-class background while giving his economic pitch, but his tax plan implies either a huge tax shift, requiring the middle-class to pay for his massive tax cuts for the wealthy, or sky-high deficits in perpetuity. As part of the plan he introduced yesterday, Pawlenty also endorsed a spending cap that would require deeper cuts than the radical House Republican budget, as well as a cockamamie “Google test” that, if taken literally, implies that Pawlenty would be okay with eliminating the Pentagon.

Walmart Allows Its Workers To Unionize In Other Countries, Just Not In The United States

To complete its acquisition of Massmart, a chain of retail stores in South Africa, Walmart struck a deal that must seem extraordinary to the company’s American employees. To win government approval of the acquisition, Walmart made concessions to a South African labor union, agreeing to avoid worker layoffs, honor existing union contracts, and use local suppliers.

The idea that Walmart negotiated with and made concessions to a labor union in South Africa may seem odd to workers in the United States, where Walmart has developed a reputation as one of the country’s most virulent opponents of organization efforts. In fact, Walmart’s workers are organized in many of the foreign countries in which it does business.

In Brazil, Argentina, China, the United Kingdom, and now South Africa, some Walmart employees are organized. In China, Walmart is required by law to recognize union membership, and in Mexico, 18 percent of its workers are organized. British labor leaders describe their dealings with Walmart as “honest,” and in Argentina, organized employees make as much as 40 percent more than employees at retailer’s major competitors. Walmart has a convenient response to why it lets workers organize in these countries, as the Washington Post reports:

We have a local philosophy,” Wal-Mart International Chief Executive Doug McMillon recently told reporters. “It’s our intention to demonstrate that we are a great corporate citizen.”

In Brazil and Argentina, meanwhile, Walmart says it allows workers to unionize because “that’s what the associates want”:

We recognize those rights,” said John Peter “J.P.” Suarez , senior vice president of international business development at Walmart. “In that market, that’s what the associates want, and that’s the prevailing practice.”

Apparently for Walmart, however, it matters not what workers want if those workers happen to be American.

Former Walmart Executive Vice President John Tate, who also served on its board, once said, “Labor unions are nothing but blood-sucking parasites living off the productive labor of people who work for a living.” Walmart claims that view is Tate’s alone and is not representative of the company’s attitude toward unions, but its history of dealing with American unions seems to tell a different story.

The United Food and Commercial Workers has been trying to help organize Walmart employees for more than two decades. At each turn, it has been rebuffed by the company, which spent millions to oppose organization efforts. In 2000, when the meatcutting department at a Texas store organized, Walmart responded by announcing the phase-out of its meatcutting departments.

In 2008, Walmart spent millions more fighting the Employee Free Choice Act, lobbying against it in Washington and going so far as to summon “thousands of Wal-Mart sotre manages and department heads to mandatory meetings,” where it warned that voting for Barack Obama “would be tantamount to inviting unions in.”

Luckily for Walmart’s American employees, they have a useful ally in, of all places, South Africa. According to the Washington Post, the union that will represent Walmart workers in South Africa went to bat for the company’s American employees during its own negotiations. “You can’t say you violate the right to freedom of association because the culture in that country supports it,” Mduduzi Mbongwe, a South African union representative, said of Walmart’s approach to American unions. “We don’t accept such an argument.”

Anti-Union Delta Charges $2800 In Baggage Fees To Returning Afghanistan Troops

Delta Airlines was caught this week charging troops returning from Afghanistan an extra $200 each to bring a fourth bag home, forcing one unit to pay more than $2,800 in baggage fees. Evidently, Delta’s policy is to allow troops only three free checked bags, while the soldiers said that their military orders allow them to carry up to four bags free of charge. In a video, Staff Sergeant Robert O’Hair explained what occurred:

We had four bags, and Delta Air Lines only allows three bags. Anything over three bags you have to pay for, even though there’s a contract between the United States government and Delta Air Lines when returning from Afghanistan on military orders, you’re authorized up to four bags. [...] We actually had to end up paying, out of pocket, our own money, to allow that fourth bag to be taken on the plane. [...] For me [the fourth bag] was a weapons case…the tools that I use to protect myself and Afghan citizens while I was deployed in the country.

Watch it:

The airline has apologized for “any inconvenience we may have caused,” but it has not indicated whether it will reimburse the troops for the fees. “We are currently looking further into the situation, and will be reaching out to each of them personally to address their concerns and work to correct any issues they have faced,” the company said in a blog post.

Delta is not only willing to charge troops to bring their equipment back from a war zone, but is notoriously anti-union. The National Mediation Board, which oversees union elections under the Railway Labor Act, has launched a series of investigations into whether Delta interfered with unsuccessful union drives at the company last year.

In the past, Delta has engaged in all sorts of shenanigans when it came to union campaigns, including putting the names of dead workers on their employee lists, to up the bar for the number of votes required to approve a union. As a Delta flight attendant wrote regarding a failed 2008 unionization drive, “The company has harassed, videotaped, and threatened arrest of union activists…Management also puts out confusing and deceptive materials claiming favorable pay, benefits, and conditions.”

Delta has also been accused of taking away seats from paying customers so that its employees can come to Washington, DC to lobby. So for Delta, it seems doing right by employees, customers, and even troops returning overseas is a bridge too far.

Update

Delta has changed its policy to allow members of the U.S. military to check up to four bags free of charge.

NEWS FLASH

Granholm: Let Romney Go Bankrupt | With former Massachusetts Gov. Mitt Romney (R) attending fundraisers in Detroit today and tomorrow, former Gov. Jennifer Granholm (D-MI) is calling on Michigan voters to “Let Mitt Romney go bankrupt.” Romney, a native Michigander, wrote an op-ed in 2009 opposing the auto bailouts, titled, “Let Detroit Go Bankrupt.” Granholm writes that the bailouts saved Detroit’s auto industry, adding, “When Romney comes here with his hand out Wednesday, his Michigan supporters should treat him in the same way he treated the auto industry.”

Three Senators Co-Sponsor Bill To Delay Financial Reform Provision They Voted For Last Year

As part of the Dodd-Frank financial reform law, a new provision was put into place allowing the Federal Reserve to cap the amount that banks can charge merchants for processing debit card transactions. The Fed has proposed capping the fees at 12 cents, far below the 44 cents per transaction that the banks currently charge. These fees account for about $16 billion annually for the banks.

The banks have launched an all-out lobbying campaign to delay (and ultimately repeal) this swipe-fee amendment, which was written by Sen. Dick Durbin (D-IL) and passed by a bipartisan 64-33 vote. The Electronic Payments Coalition, which is representing the banks in this debate, spent $2.5 million lobbying on this issue between January and April.

Today, the Senate will vote on a provision authored by Sen. Jon Tester (D-MT) that would delay the swipe fee cap for a year, giving the bank lobby another 12 months to convince Congress to kill it off entirely. And already, three senators who supported Durbin have flipped and will support Tester’s plan, delaying for a year a regulation that they already voted to approve:

The amendment represents the latest twist in the uphill effort to roll back a provision of the Dodd-Frank financial overhaul law and would prevent the financial industry from losing billions of dollars in swipe-fee revenue. The changes have won Mr. Tester the support of at least three senators who voted for Sen. Richard Durbin’s (D., Ill) amendment to curb swipe fees last year: Sens. Kay Hagan (D., N.C.) and Mike Crapo (R., Idaho) and Michael Bennet (D., Colo.)

As the Roosevelt Institute’s Mike Konczal pointed out, “Interchange rates in the United States are among the highest, if not the highest, in the developed world.” The fees have grown by more than 300 percent in the last decade. “The proposed regulations will benefit consumers by lowering the billions of dollars annually in non-negotiable swipe fees paid by merchants to large banks and the dominant credit card networks,” said Ed Mierzwinski of U.S. Public Interest Research Groups.

Dodd-Frank is under assault in multiple ways, from House Republicans looking to gut the budgets of the financial regulatory agencies to the bank lobby pushing for delay after delay in bringing rules online. These three senators agreed last year that swipe fees needed to be reined in. So what changed?

  • Comment Icon

Econ 101: June 8, 2011

Welcome to ThinkProgress Economy’s morning link roundup. This is what we’re reading. Have you seen any interesting news? Let us know in the comments section. You can also follow ThinkProgress Economy on Twitter.

  • Sen. Jon Kyl (R-AZ) says Republicans want $2.5 trillion in spending cuts in return for agreeing to raise the debt ceiling and avoiding economic calamity. [The Washington Post]
  • According to a new Pew poll, “by a wide margin, more Americans think the wars in Iraq and Afghanistan have inflated the national debt than the percentage who blame domestic spending or the tax cuts enacted in the past decade for doing the same.” This view is incorrect. [TPMDC]
  • The number of underwater mortgages declined slightly in the first three months of the year, falling from 23.1 percent to 22.7 percent. [The Los Angeles Times]
  • The White House says that a jobs bill crafted by Senate Democrats is too expensive. [The Hill]
  • Federal Reserve Chairman Ben Bernanke takes on JP Morgan Chase CEO Jamie Dimon on financial reform. [The Wall Street Journal]
  • House Republicans introduce a bill to privatize Social Security. [TPMDC]
  • Foreclosure fraud settlement update: “As state attorneys general continue their months-long settlement negotiations with the nation’s largest banks over widespread problems in foreclosure practices, they have yet to resolve differences within their own group on key issues.” [The Washington Post]
  • Regulators have decided to delay a rule requiring mortgage lenders to hold onto at least a small portion of risky loans that they make. [The Hill]
  • Comment Icon

Switch to Mobile
ThinkProgress Signup Overlay Skip and Continue to ThinkProgress Skip and Continue to ThinkProgress

Sign Up