Archive for the ‘Business’ Category
Ezra Klein runs the speech in Wonkblog, and the italicized portion below is his introduction; following that, the President.
The speech President Obama delivered this morning at THEARC in D.C. is perhaps the single best economic speech of his presidency. That’s in part because it exists for no other reason than to lay out Obama’s view of the economy. His other speeches on the subject have been about passing legislation, defining campaign themes, or positioning himself against Republicans. But Obama’s done running for office. He’s not getting anything through this Congress. And he’s not negotiating with John Boehner. This is just what he thinks. I’ll have more to say on it later. But it’s worth reading it for yourself first.
Over the last two months, Washington has been dominated by some pretty contentious debates — I think that’s fair to say. And between a reckless shutdown by congressional Republicans in an effort to repeal the Affordable Care Act, and admittedly poor execution on my administration’s part in implementing the latest stage of the new law, nobody has acquitted themselves very well these past few months. So it’s not surprising that the American people’s frustrations with Washington are at an all-time high.But we know that people’s frustrations run deeper than these most recent political battles. Their frustration is rooted in their own daily battles — to make ends meet, to pay for college, buy a home, save for retirement. It’s rooted in the nagging sense that no matter how hard they work, the deck is stacked against them. And it’s rooted in the fear that their kids won’t be better off than they were. They may not follow the constant back-and-forth in Washington or all the policy details, but they experience in a very personal way the relentless, decades-long trend that I want to spend some time talking about today. And that is a dangerous and growing inequality and lack of upward mobility that has jeopardized middle-class America’s basic bargain — that if you work hard, you have a chance to get ahead.
I believe this is the defining challenge of our time: Making sure our economy works for every working American. It’s why I ran for President. It was at the center of last year’s campaign. It drives everything I do in this office. And I know I’ve raised this issue before, and some will ask why I raise the issue again right now. I do it because the outcomes of the debates we’re having right now — whether it’s health care, or the budget, or reforming our housing and financial systems — all these things will have real, practical implications for every American. And I am convinced that the decisions we make on these issues over the next few years will determine whether or not our children will grow up in an America where opportunity is real.
Now, the premise that we’re all created equal is the opening line in the American story. And while we don’t promise equal outcomes, we have strived to deliver equal opportunity — the idea that success doesn’t depend on being born into wealth or privilege, it depends on effort and merit. And with every chapter we’ve added to that story, we’ve worked hard to put those words into practice.
It was Abraham Lincoln, a self-described “poor man’s son,” who started a system of land grant colleges all over this country so that any poor man’s son could go learn something new.
When farms gave way to factories, a rich man’s son named Teddy Roosevelt fought for an eight-hour workday, protections for workers, and busted monopolies that kept prices high and wages low.
When millions lived in poverty, FDR fought for Social Security, and insurance for the unemployed, and a minimum wage.
When millions died without health insurance, LBJ fought for Medicare and Medicaid.
Together, we forged a New Deal, declared a War on Poverty in a great society. We built a ladder of opportunity to climb, and stretched out a safety net beneath so that if we fell, it wouldn’t be too far, and we could bounce back. And as a result, America built the largest middle class the world has ever known. And for the three decades after World War II, it was the engine of our prosperity.
Now, we can’t look at the past through rose-colored glasses. The economy didn’t always work for everyone. . .
In Salon Josh Eidelson reports an encouraging development:
With accusations of abuse directed at private companies providing public services, a package of privatization safeguards is expected to be introduced in nearly half the nation’s state legislatures in the next session, according to a group pushing the measures.
“If you contract to fix your car or paint your house” and “don’t figure out exactly in advance what you want, and get that done precisely, and you don’t watch real closely, then you get screwed,” said Donald Cohen, who directs In the Public Interest — a project of the Partnership for Working Families, which produces research critical of the subcontracting of government work — and chairs the ITPI Action Fund, a 501(c)(4) that pushes legislation. “That’s what happens with contracting.” ITPI’s funders include foundations and unions.
In a report being released Wednesday afternoon, ITPI urges adoption of a battery of measures to confront alleged abuses by such companies providing public services. According to ITPI Action Fund, legislators in nearly half the states – including California, Maryland and Pennsylvania – plan to introduce versions of that legislation.
To increase transparency, the ITPI package would require governments to disclose online how much contractors cost and how many people they employ, and require each company with a contract to “open its books and its meetings to the public.” To promote accountability, ITPI urges states to establish minimum staffing devoted to oversight, bar scofflaw companies from receiving contracts, require clauses letting governments cancel contracts based on broken promises, and limit contracts to companies that guarantee a cost savings of at least 10 percent. To advance “shared prosperity,” ITPI would require wage and benefit standards for subcontracted employees, and impact analyses taking into account potential outsourcing’s effect on the environment, local business and social services. And in the name of competition, ITPI’s program would forbid language promising profits for contractors or allowing automatic contract renewals, and would require that direct public employees have the chance to submit competing proposals for work the government is considering contracting out.
“There’s a myth around private sector doing things cheaper, better, faster, which turns out not to be accurate,” Cohen told Salon. He contended that recent outsourcing abuses make the case for reform.
The forthcoming ITPI report, “Out of Control: The Coast-to-Coast Failures of Outsourcing Public Services to For-Profit Corporations,” offers a parade of such alleged abuses. Among them: In New Mexico, a district judge sided with the city of Truth or Consequences (that’s the actual name) when it refused to share video recordings of city commission meetings on the grounds that an open records law didn’t cover the private contractor that did the recording (that ruling was overturned by an appeals court). In Indiana, a private toll road operator refused to let state troopers shut down a toll road due to a snowstorm. In Florida, the Palm Beach Post found that three out of six private prisons saved taxpayers no money. In Chicago, a 75-year contract signed in 2009 restricts the government from adding bicycle lanes or sidewalk space because of the potential impact on private parking meter profits. In New York City, a 1998 contract with the private company CityTime to oversee time records of public employees was still unfinished a dozen years later, after costing taxpayers over 10 times the expected $63 million price tag.
“The rationale has long been that work or things might be done better by bringing in outside experts,” said New York City Comptroller John Liu, whose office investigated CityTime. “In New York City, that line of thinking has largely failed … Part of it is the sheer lack of oversight over these outside consultants, who are given too much free rein and too much flexibility in the contractual agreements with the city.” Liu told Salon that the CityTime example had also shown that “the work can always be done in-house, if the will is there.”
“Desperate governments will do desperate things,” said Cohen, “and … there is a huge industry whose purpose and mission is now to walk the halls … saying, ‘We’ve got a deal for you.’” Still, he argued that public attention to the role of contracting in the Healthcare.gov and Edward Snowden stories and the trans-ideological appeal of “fiscally prudent government” offered an opportunity to effect reforms. Signs of progress cited by ITPI include the suspension of the process of Chicago airport privatization, the cancellation of a Cincinnati parking lease, and media scrutiny on a Nashville private prison contract under which taxpayers owe Corrections Corporation of America extra cash when prison occupancy falls below a contractual minimum. . .
Rather than take Bisphenol-A (BPA) off the US market, it is increasingly used. Tom Philpott in Mother Jones writes:
Bisphenol A, a chemical used in can linings and plastic bottles, is pretty nasty stuff. The Food and Drug Administration recently banished it from baby bottles (at the behest of the chemical industry itself, after baby bottle producers had already phased it out under consumer pressure). BPA, as it’s known, is an endocrine-disrupting chemical, meaning that it likely causes hormonal damage at extremely low levels. The packaging industry uses it to make plastics more flexible and to delay spoilage in canned foods.
You might think that such a substance would lose popularity as evidence of its likely harms piles up and up. Instead, however, the global market for it will boom over the next six years, according to a proprietary, paywall-protected report from the consultancy Transparency Market Research. The group expects global BPA sales to reach $18.8 billion by 2019, from $13.1 billion this year—about a 44 percent jump.
TMR researchers declined to be interviewed by me and wouldn’t give me access to a full copy of their report. But they did send me a heavily redacted sample. One of the few trends I could glean from it is that the “steady growth” in global BPA consumption is driven by “increasing demand in the Asia-Pacific region.” (According to this 2012 paper by Hong Kong researchers, Chinese BPA production and consumption have both “grown rapidly” in recent years, meaning “much more BPA contamination” for the nation’s environment and citizens.) As for the United States, the report says that North America is the globe’s “third largest regional market for BPA,” behind Asia and Europe. North American BPA consumption is growing, but a “at a very slow rate,” the report states. As a result, our share of the global BPA is expected to experience a “slight decline” by 2019. Not exactly comforting.
The sample that Transparency Market Research sent me blacked out its analysis of which companies have what share of the global BPA market. . .
Very interesting story in Salon by Vinnie Rotondaro:
In under a year, Pope Francis has managed to rouse and inspire Catholics across the world with his calls of a “church for the poor.” He has done this without making any changes to Church doctrine.
Last week, Francis continued his populist charge, releasing a powerful papal exhortation titled Evangelii Gaudium. The document decries economic inequality as “the result of ideologies which defend the absolute autonomy of the marketplace and financial speculation,” ideologies, like trickle down economics, which, “reject the right of states, charged with vigilance for the common good, to exercise any form of control.”
“A new tyranny is thus born,” the pope wrote, “invisible and often virtual, which unilaterally and relentlessly imposes its own laws and rules.”
Again and again, by virtue of his tone and contextual aim, Francis wins over many (including much of the mainstream press). Even non-believers and the disaffected have taken notice. But while much of his popularity can be attributed to his populist charm, there also seems to be an element of surprise in the public’s reaction to his papacy, as if the Pope’s simple, Christ-like message of love and inclusion has come as a shock to the system – as something new, unexpected.
Why? Take a look at the agenda items addressed earlier last month by U.S. Conference of Catholic Bishops at their annual meeting in Baltimore. The bishops of the richest, most powerful and increasingly unequal nation in the world, convening in a city wracked by generational poverty, talked about pornography, they discussed contraception and gay marriage, and addressed questions of minor liturgical importance. Poverty was not on the agenda.
The image offered up was that of a place where the old-guard rules, where reactionary tsk-tskers inveigh on what people can and cannot do in their personal lives, where “liberal” political concerns are mentioned while “conservative” causes are crusaded over.
And if the whispers that some bishops “appear willing to wait out this pope,” or the election of the conference’s new chair, Archbishop Joseph Kurtz, a “smiling conservative” who signed the Manhattan Declaration and cannot seriously be seen as a reformer, are any indication, it doesn’t look likely this image will change anytime soon.
Why does Pope Francis surprise us? He surprises us because he seems unlike so much the hierarchy he represents.
But let’s not jump the gun. A quick spin through history shows it’s not so much Francis who is unlike his Church, but his Church which is unlike its past, and in attempting to bring Catholicism back-to-the-future, as it were, it’s conceivable that the pope could trigger a significant political shift here in the U.S.A.
Throughout most of the 20th century, . . .
States are doing it because Congress seems unable to do anything in recent years. The need is great—see this post by Kevin Drum, which includes this chart:
And Paul Krugman also supports a higher minimum wage:
’Tis the season to be jolly — or, at any rate, to spend a lot of time in shopping malls. It is also, traditionally, a time to reflect on the plight of those less fortunate than oneself — for example, the person on the other side of that cash register.
The last few decades have been tough for many American workers, but especially hard on those employed in retail trade — a category that includes both the sales clerks at your local Walmart and the staff at your local McDonald’s. Despite the lingering effects of the financial crisis, America is a much richer country than it was 40 years ago. But the inflation-adjusted wages of nonsupervisory workers in retail trade — who weren’t particularly well paid to begin with — have fallen almost 30 percent since 1973.
So can anything be done to help these workers, many of whom depend on food stamps — if they can get them — to feed their families, and who depend on Medicaid — again, if they can get it — to provide essential health care? Yes. We can preserve and expand food stamps, not slash the program the way Republicans want. We can make health reform work, despite right-wing efforts to undermine the program.
And we can raise the minimum wage.
First, a few facts. Although the national minimum wage was raised a few years ago, it’s still very low by historical standards, having consistently lagged behind both inflation and average wage levels. Who gets paid this low minimum? By and large, it’s the man or woman behind the cash register: almost 60 percent of U.S. minimum-wage workers are in either food service or sales. This means, by the way, that one argument often invoked against any attempt to raise wages — the threat of foreign competition — won’t wash here: Americans won’t drive to China to pick up their burgers and fries.
Still, even if international competition isn’t an issue, can we really help workers simply by legislating a higher wage? Doesn’t that violate the law of supply and demand? Won’t the market gods smite us with their invisible hand? The answer is that we have a lot of evidence on what happens when you raise the minimum wage. And the evidence is overwhelmingly positive: hiking the minimum wage has little or no adverse effect on employment, while significantly increasingworkers’ earnings.
It’s important to understand how good this evidence is. Normally, economic analysis is handicapped by the absence of controlled experiments. For example, we can look at what happened to the U.S. economy after the Obama stimulus went into effect, but we can’t observe an alternative universe in which there was no stimulus, and compare the results.
When it comes to the minimum wage, however, we have a number of cases in which a state raised its own minimum wage while a neighboring state did not. If there were anything to the notion that minimum wage increases have big negative effects on employment, that result should show up in state-to-state comparisons. It doesn’t.
So a minimum-wage increase would help low-paid workers, with few adverse side effects. And we’re talking about a lot of people. Early this year the Economic Policy Institute estimated that an increase in the national minimum wage to $10.10 from its current $7.25 would benefit 30 million workers. Most would benefit directly, because they are currently earning less than $10.10 an hour, but others would benefit indirectly, because their pay is in effect pegged to the minimum — for example, fast-food store managers who are paid slightly (but only slightly) more than the workers they manage.
Now, many economists have a visceral dislike of . . .
Do look at this graph. It’s stunning.
Interesting list. From the post, by Juan Cole:
In many key ways America’s political and financial practices make it in absolute terms far more corrupt than the usual global South suspects. After all, the US economy is worth over $16 trillion a year, so in our corruption a lot more money changes hands.
1. Instead of having short, publicly-funded political campaigns with limited and/or free advertising (as a number of Western European countries do), the US has long political campaigns in which candidates are dunned big bucks for advertising. They are therefore forced to spend much of their time fundraising, which is to say, seeking bribes. All American politicians are basically on the take, though many are honorable people. They are forced into it by the system. House Majority leader John Boehner has actually just handed out cash on the floor of the House from the tobacco industry to other representatives.
When French President Nicolas Sarkozy was defeated in 2012, soon thereafter French police actually went into his private residence searching for an alleged $50,000 in illicit campaign contributions from the L’Oreale heiress. I thought to myself, seriously? $50,000 in a presidential campaign? Our presidential campaigns cost a billion dollars each! $50,000 is a rounding error, not a basis for police action. Why, George W. Bush took millions from arms manufacturers and then ginned up a war for them, and the police haven’t been anywhere near his house.
American politicians don’t represent “the people.” With a few honorable exceptions, they represent the the 1%. American democracy is being corrupted out of existence.
2. That politicians can be bribed to reduce regulation of industries like banking (what is called “regulatory capture”) means that they will be so bribed. Billions were spent and 3,000 lobbyists employed by bankers to remove cumbersome rules in the zeroes. Thus, political corruption enabled financial corruption (in some cases legalizing it!) Without regulations and government auditing, the finance sector went wild and engaged in corrupt practices that caused the 2008 crash. Too bad the poor Afghans can’t just legislate their corruption out of existence by regularizing it, the way Wall street did.
3. That the chief villains of the 2008 meltdown (from which 90% of Americans have not recovered) have not been prosecuted is itself a form of corruption.
4. The US military budget is bloated and enormous, bigger than the military budgets of the next twelve major states. What isn’t usually realized is that perhaps half of it is spent on outsourced services, not on the military. It is corporate welfare on a cosmic scale. I’ve seen with my own eyes how officers in the military get out and then form companies to sell things to their former colleagues still on the inside.
5. . . .
It seems hard to understand why a hospital cannot tell you what they would charge you for an electrocardiogram. Do they wait until they see you in person to decide how much to charge? Why can’t they tell you over the phone. Sarah Kliff asks a good question in the Washington Post:
Hospitals can easily tell you how much it will cost to leave your car in the parking lot. But how much it will cost for a simple test? That, a new study in JAMA Internal Medicine suggests, is much more difficult to track down.
Two researchers in Philadelphia reached out to 20 local hospitals, asking them how much they would charge for electrocardiogram. This is a pretty simple test to measure the rate of a heartbeat. It doesn’t involve multiple doctors, nor is there any chance of a complication. And that was key to the study: The authors wanted to look at one of the most basic medical tests out there and see if hospitals could provide a price for it.
In the phone calls, the researchers would say they were uninsured and planning to pay for the test themselves, asking how much that would cost. Three hospitals were able to provide that information. By way of contrast, 19 hospitals were able to respond to a query about how much it would cost to park at the hospital, even when some of those parking prices had a few variables. . .
What I would like to know is to compare the results of such a test for non-profit hospitals against for-profit hospitals.
Interesting article by R.J. Eskow in Salon:
You don’t have to be an unqualified fan of the Affordable Care Act to recognize the lunacy of most Republican objections to it. From “death panels” to “a loss of liberty,” there’s only one consistent through-line to most of their objections: They come from Republicans, they’re directed at a Democratic president, and they’re irrational.
The president’s self-imposed deadline for fixing the website has arrived and, while it’s still far from perfect, the complaints are likely to become broader once again. The Republicans may not realize it, but that way lies danger.
More than once, Democrats have made the mistake of taking victory laps for a plan with very real problems. But the Republicans are setting traps for themselves – traps they may find it difficult to escape, especially if Democrats are shrewd enough to take advantage of them.
This shortsightedness already wounded them once, in the 2012 election, when candidate Mitt Romney was forced to attack a program that was nearly identical to the one thatGov. Mitt Romney implemented in Massachusetts. It looked absurd – because it was. Romney’s campaign was probably always a lost cause, but that didn’t help.
For the Republicans, there’s more where that came from.
The trouble starts with their gleeful rubbing of hands over the Healthcare.gov rollout. Gloating about the website is unwise for a couple of reasons. First, the website’s design and implementation was conducted by a private government contractor, CGI Global, not by government employees. There are many lessons to be learned from the website’s problems, but one of them clearly seems to be this: The privatization of government services, a key goal for the Republican Party, can work very poorly.
Accounts of the Obamacare implementation read like a how-to manual in inept contracting with outside corporations, and the administration deserves to take a hit for that. But the problem isn’t that government created the website. A larger part of the problem lies in the fact that it used a private contractor to do the job.
Worse, the administration chose to use a company whose specialty was not healthcare administration but “government contracting.” The fact that this is now an industry of its own, and one with enormous growth, shows just how far the privatization trend has come on the federal level.
That’s a problem. Professional government contractors know how to game the government procurement system for maximum profits, and those profit margins are added to the cost for taxpayers.
CGI Global, the all-purpose government contractor that handled the website, is a case in point. Even though the Obama administration has made a point of saying government should end no-bid contracts, this project – the most important of Obama’s presidency – was offered on a no-bid contract.
As someone who once led a company that contracted with government agencies, I can tell you that somebody “worked the system” extremely well on this one. Unfortunately, the “system” works much better for the contractors than it does for the public. Every time Republicans crow about the website’s problems, another thought should be implanting itself in the public’s mind: privatizing government services is a very bad idea.
The challenge for Republicans runs even deeper than that. They’ve been mocking the very concept behind the Obamacare exchanges. It’s a concept that made the rollout extremely difficult. The idea was that government would create an electronic “marketplace” where people could comparison-shop for health insurance. This, we were told, would keep costs down by employing market forces and competition.
This also happens to be an excellent way to describe the Republicans’ plan for Medicare. The description is still up at Rep. Paul Ryan’s website:
Beginning in 2024, for those workers born in 1959 or later, Medicare would offer them a choice of private plans competing alongside traditional fee-for-service option(sic) on a newly created Medicare Exchange (emphasis ours) … The Medicare Exchange would provide all seniors with a competitive marketplace where they could chose a plan the same way members of Congress do.
Every time the Republicans tell horror stories or make fun of the ACA’s exchange, they’re telling people that their own plan for Medicare is going to turn the most popular, cost-effective and successful health plan in the country into a tragedy – or a joke.
They’re also sabotaging their own arguments for privatizing Social Security. The plan that George W. Bush proposed in 2005 called upon the government to administer a portfolio of private investment plans on behalf of retirees. There’s still talk of reviving this GOP proposal. Rep. Paul Ryan, leading House Republican and 2012 vice-presidential candidate, continues to push a privatization scheme that even the Bush administration described as “irresponsible.”
As Obamacare goes, so goes the Social Security privatization plan.
There’s a reason why their negative characterizations of Obamacare match their own proposals so closely. As many people know, the Affordable Care Act began its life as a right-wing proposal meant to blunt the drive toward healthcare reform during the Clinton administration. Republicans loved the idea back then. They loved it when Gov. Arnold Schwarzenegger proposed something similar in California. And they loved it when future presidential candidate Mitt Romney implemented it in Massachusetts.
That’s why they’re in such a trap now. Their attacks have already trashed the credibility of the Heritage Foundation, which was a principal architect of the plan back in the Clinton years. The Heritage Foundation’s Robert Moffit brought ridicule on himself and his organization when he wrote that the ACA’s individual mandate was “an Unconstitutional Violation of Personal Liberty” that “Strikes at the Heart of American Federalism,” adding that “It is an assertion of federal power that is inherently at odds with the original vision of the Framers.”
In fact, most experts agree that the idea of the individual mandate originated with the Heritage Foundation itself in a 1989 paper that proposed that the government “mandate all households to obtain adequate insurance.” The paper by Stuart M. Butler argues that:
Many states now require passengers to wear seatbelts for their own protection. Many others require anybody driving a car to have liability insurance. But neither the federal government nor any state requires all households to protect themselves from the potentially catastrophic costs of a serious injury or illness.
The paper continues, “Under the Heritage plan, there would be such a requirement.” And in case there is still any doubt about whose plan contains this individual mandate proposal, the section of the document containing these words is titled “The Heritage Plan.”
Then there’s the issue on which Republicans have scored most heavily . . .
The Catholic church really wants nonbelievers to follow the dictates of Catholicism. For example, the Catholic church strenuously fights against contraception, a mortal sin, and whenever it has the chance, it makes contraceptives illegal. (For example, contraceptives for years were illegal in Connecticut.) The only reason is that the Catholic church doesn’t accept contraceptives, which is tough for Catholics but should be irrelevant for others. Jews and Muslims don’t make pork illegal: they don’t eat, but they do not insist that others refrain. The Catholic church might learn from them.
The problem is when the Catholic church owns a hospitals and requires all patients and all staff to work in accordance with Catholic doctrine. Sarah Kliff has an example in the Washington Post at http://www.washingtonpost.com/blogs/wonkblog/wp/2013/12/02/catholic-hospitals-are-growing-what-will-that-mean-for-reproductive-health/
As pointed out by Randall Win in a comment to the article:
I was born and raised Catholic. It is beyond disgusting that the bishops want to buy hospitals to promote religion. Owning a hospital is a choice not a requirement of our religion and if the bishops think they cannot allow real medicine to be practiced there, then they should not own the hospital.
Kliff’s article begins:
Tamesha Means was 18 weeks pregnant when her water broke. Means, then 27 and the mother of two, knew something was wrong. So she called a friend to take her to the one hospital within a half-hour’s drive, Mercy Health Partners.
During that trip to the hospital–and two return trips, one later that night and then again the next morning–Means says she was discharged with medication and instructions to wait for her pain to subside. According to her account, she was not offered the option to induce labor or terminate the pregnancy, options that could have ended her pain, nor was she told that the fetus was unlikely to survive.
“The pain was unbearable,” Means said in an interview from her home in Muskegon, Mich. “I told them, ‘I need you guys to help me.’ They told me there was nothing they could do.”
Three years later, Means’s treatment at Mercy, part of a Catholic health system, has become the centerpiece of an American Civil Liberties Union lawsuit against the United States Conference of Catholic Bishops.
The suit, filed in late November, argues that the Catholic Bishops’ religious directives for hospitals–which generally bar discussion or performance of abortions–result in negligent care for patients such as Means.
Without being offered “the medically appropriate treatment option of terminating her pregnancy,” the case argues, Means “suffered severe, unnecessary, and foreseeable physical and emotional pain.”
The lawsuit comes in the midst of a wave of high-profile mergers between Catholic hospitals and secular systems. The partnerships have raised questions about how care will be delivered at institutions guided by religious directives, particularly in rural areas like Muskegon where patients have little choice of where to be seen.
“As the number of Catholic hospitals increases, we’re highlighting the way they can constrain care,” Louise Melling, ACLU deputy legal director, said. “The suit is significant in that it’s calling attention to what is happening at these hospitals. In some instances, the directives are governing care rather than medical guidelines.”
Mercy Health Partners declined to comment on the case through a spokeswoman, as did the United States Conference of Catholic Bishops.
Much of the tension tends to center on reproductive health; 52 percent of obstetricians who work in Catholic hospitals say they have experienced a conflict over religious-based policies, according to a 2012 article in the American Journal of Obstetrics and Gynecology.
One obstetrician, according to a recent report published this summer in the American Journal of Bioethics Primary Research, faced off with his Catholic hospital’s ethics committee when he wanted to terminate the pregnancy of a women newly-diagnosed with cancer, who needed to undergo chemotherapy.
Another doctor reported a conflict at her hospital that had been sold to a Catholic hospital chain three years prior. The ethics committee ruled that a doctor could not terminate a “molar pregnancy,” where the embryo begins to develop but, due to a tumor, will not survive.
“Some of the doctors have read them all and practice exactly according to the directives,” study author Lori Freedman, a medical sociologist at the University of California – San Francisco, said. “Some don’t quite remember what they signed on for, but they learn from colleagues what you need to get approval for. I do hear about at least some level of awareness.”
There are 630 Catholic hospitals in the United States, according to the American Hospital Association, accounting for 15 percent of all hospital beds in the country. One-third of Catholic hospitals are in rural areas and, according to the Catholic Hospital Association, one in six American patients are treated in a Catholic facility. . .
Read the whole thing.
“Doesn’t Eat, Doesn’t Pray, Doesn’t Love” begins:
The question of whether for-profit companies can claim a religious identity, one that exempts them from obeying a generally applicable law, is fully worthy of the attention the Supreme Court is about to give it. But to the extent that much of the commentary about the challenges to the Affordable Care Act’s contraception-coverage insurance mandate frames the issue as a debate about the rights of corporations – as a next step beyond Citizens United’s expansion of corporate free speech – I think it misses the point. What really makes these cases so rich, and the reason the court’s intervention will dramatically raise the temperature of the current term, lies elsewhere.
The religious-based challenges that have flooded the federal courts from coast to coast – more than 70 of them, of which the Supreme Court agreed on Tuesday to hear two – aren’t about the day-in, day-out stuff of jurisprudence under the First Amendment’s Free Exercise Clause: Sabbath observance, employment rights, tax exemptions. They are about sex.
As such, the cases open a new front in an old war. I don’t mean the overblown “war on religion” that some Catholic leaders have accused the Obama administration of waging. Nor do I mean the “war on women” that was such an effective charge last year against a bevy of egregiously foot-in-mouth Republican politicians.
I mean that this is the culture war redux – a war not on religion or on women but on modernity.
All culture wars are that, of course: the old culture in a goal-line stance against a new way of organizing society, a new culture struggling to be born. Usually, that’s pretty obvious. This time, somehow, it seems less so, maybe because the battle is being fought in the complex language of law, namely a 20-year-old law called the Religious Freedom Restoration Act.
This tendentiously named statute, aimed at overturning a 1990 Supreme Court decision that cast a skeptical eye on claims to religious exemptions from ordinary laws, provides that the government “shall not substantially burden a person’s exercise of religion” unless the burden serves a “compelling” government interest and is the “least restrictive means” of doing so.
What’s a substantial burden? What governmental interest is sufficiently compelling? And with particular respect to the two new Supreme Court cases, is a for-profit corporation a “person” that can engage in religious exercise? . . .
Tim Lee has an interesting article in the Washington Post:
An organization called the TPL Group has put together a handy compilation of letters opposing the patent reform legislation that was approved by the House Judiciary Committee earlier this month. Many of the letters come from organizations you’d expect to be oppose legislation weakening patent protection: patent attorneys, the pharmaceutical industry, biotechnology companies and the Intellectual Property Owners Association. But one letter opposing the legislation comes from a surprising source: academia.
The legislation, sponsored by Judiciary Chairman Bob Goodlatte (R-Va.), targets patent trolls, “non-practicing entities” that acquire broad patents not to commercialize them but to earn licensing revenues from others who have done so. When it’s pointed out that this definition of a patent troll also applies to some universities, patent reformers are usually quick to clarify that they don’t regard universities as patent trolls. But the reality is that some universities do, in fact, behave like patent trolls. And now they’re lobbying like them, too.
Billed as a “statement from the higher education community,” the Nov. 8 letter is signed by the Association of American Universities, the American Council on Education and four other university groups. “We strongly support the goal of H.R. 3309 to reduce abusive patent litigation and the corrosive impact it has on the US patent system,” the groups write. However, the academic organizations argue, some provisions have an “over-broad scope” that “raises the specter of unintended problems and thereby raises particular concerns for universities.”
Essentially, the universities are concerned that the legislation would make it harder for patent holders to enforce their patents. And they’re right. The line between patent trolls and other patent holders isn’t always clear, so any reform designed to make patent trolling more difficult is also going to inconvenience many conventional patent holders — including universities.
But it’s far from obvious that that would be a bad thing. After all, while universities don’t engage in the most egregious troll tactics, universities’ efforts to generate licensing revenue have imposed significant costs on the public that aren’t so different from the problems created by patent trolls.
A good example of this is a lawsuit by genetic testing company Myriad Genetics seeking to force a competing breast cancer test off the market. Myriad persisted in its litigation even after the Supreme Court ruled that human genes could not be patented. Joining Myriad as plaintiffs are two universities, the University of Pennsylvania and the University of Utah. If the lawsuit succeeds, the likely result will be less competition and higher prices for breast cancer testing.
Another example: For more than a decade, a troll called Eolas sued major Internet companies claiming to own the concept of embedding interactive content in a Web page. Its co-plaintiff was the University of California, where the patent originated. Internet pioneers, including World Wide Web founder Tim Berners-Lee, have disputed claims that the University of California invented interactive Web content. But Eolas was able to get tens of millions of dollars from leading Internet companies, with UC taking a cut.
Universities’ efforts to maximize their patent revenues create other problems, too. For example, Yale researcher William Prusoff developed d4T, one of the first AIDS drugs. . .
Money disrupts values, doesn’t it? As studies show, for individuals as well as for institutions.
The chart above is from a very interesting piece by Arindrajit Dube in the NY Times:
During most of the 20th century, wages in the United States were set not just by employers but by a mix of market and institutional mechanisms. Supply and demand were important factors; collective bargaining and minimum wage laws also played a key role. Under Presidents Franklin D. Roosevelt and Richard M. Nixon, we even implemented more direct forms of wage controls.
These direct interventions, however, were temporary, and unions have become rare in most parts of the United States — virtually disappearing from the private sector. This leaves minimum wage policies as one of the few institutional levers for setting a wage standard. But while we can set a wage floor using policy, should we? Or should we leave it to the market and deal with any adverse consequences, like poverty and inequality, using other policies, like tax credits and transfers? These longstanding questions take on a particular urgency as wage inequality continues to grow, and as we consider specific proposals to raise the federal minimum wage — currently near a record low — and to index future increases to the cost of living.
The idea of fairness has been at the heart of wage standards since their inception. This is evident in the very name of the legislation that established the minimum wage in 1938, the Fair Labor Standards Act. When Roosevelt sent the bill to Congress, he sent along a message declaring that America should be able to provide its working men and women “a fair day’s pay for a fair day’s work.” And he tapped into a popular sentiment years earlier when he declared, “No business which depends for existence on paying less than living wages to its workers has any right to continue in this country.”
This type of concern for fairness actually runs deep in the human psyche. There is a widespread sense that it is unfair of employers to take advantage of workers who may have little recourse but to work at very low wages. For example, the economists Colin F. Camererand Ernst Fehr have documented in numerous experimental studies that the preference for fairness in transactions is strong: individuals are often willing to sacrifice their own payoffs to punish those who are seen as acting unfairly, and such punishments activate reward-related neural circuits. People also strongly supportbanning transactions they see as exploitative of others — even if they think such a ban would entail some economic costs.
Of course, if most minimum wage workers were middle-class teenagers, many of us might shrug off concerns about their wages, since they are taken care of in other ways. But in reality, the low-wage work force has become older and more educated over time. In1979, among low-wage workers earning no more than $10 an hour (adjusted for inflation), 26 percent were teenagers between 16 and 19, and 25 percent had at least some college experience. By 2011, the teenage composition had fallen to 12 percent, while over 43 percent of low-wage workers had spent at least some time in college. Even among those earning no more than the federal minimum wage of $7.25 in 2011, less than a quarter were teenagers.
Support for increasing the minimum wage stretches across the political spectrum. As Larry M. Bartels, a political scientist at Vanderbilt, shows in his book “Unequal Democracy,” support in surveys for increasing the minimum wage averaged between 60 and 70 percent between 1965 and 1975. As the minimum wage eroded relative to other wages and the cost of living, and inequality soared, Mr. Bartels found that the level of support rose to about 80 percent. He also demonstrates that reminding the respondents about possible negative consequences like job losses or price increases does not substantially diminish their support.
These patterns show up in recent survey data as well, as over three-quarters of Americans, including a solid majority of Republicans, say they support raising the minimum wage to either $9 or $10.10an hour. It is therefore not a surprise that when they have been given a choice, voters in red and blue states alike have consistently supported, by wide margins, initiatives to raise the minimum wage. In 2004, 71 percent of Florida voters opted to raise and inflation-index the minimum wage, which today stands at $7.79 per hour. That same year, 68 percent of Nevadans voted to raise and index their minimum wage, which is now $8.25 for employees without health benefits. Since 1998, 10 states have put minimum wage increases on the ballot; voters have approved them every time.
But the popularity of minimum wages has not translated into legislative success on the federal level. Interest group pressure — especially from the restaurant lobby — has been one factor. Ironically, the very popularity of minimum wages may also have contributed to the failure to automatically index the minimum wage to inflation: Democratic legislators often prefer to increase the wage themselves since it allows them to win more political points. While 11 states currently index the minimum wage, only one, Vermont, did so legislatively; the rest were through ballot measures.
As a result of legislative inaction, inflation-adjusted minimum wages in the United States have declined in both absolute and relative terms for most of the past four decades. The high-water mark for the minimum wage was 1968, when it stood at $10.60 an hour in today’s dollars, or 55 percent of the median full-time wage. In contrast, the current federal minimum wage is $7.25 an hour, constituting 37 percent of the median full-time wage. In other words, if we want to get the minimum wage back to 55 percent of the median full-time wage, we would need to raise it to $10.78 an hour. . .
Using what he sees as conservative principles to advocate a policy long championed by the left, Mr. Unz argues that significantly raising the minimum wage would help curb government spending on social services, strengthen the economy and make more jobs attractive to American-born workers.
“There are so many very low-wage workers, and we pay for huge social welfare programs for them,” he said in an interview. “This would save something on the order of tens of billions of dollars. Doesn’t it make more sense for employers to pay their workers than the government?”
The comments to Dube’s article are quite interesting. Here’s one from “Greg” in Massachusetts:
Another useful datapoint is to compare a full-time job at minimum wage to the per-capita GDP. In the period 1938-1978, a full-time minimum wage job yielded, on the average, 60% of per-capita GDP. That fraction is now less than 30%. Thus, doubling the minimum wage to about $15/hr brings us back to a sustainable historic norm.
Of course, we will be told that unemployment will skyrocket. Given that the minimum wage has been increased 20 times over its history, including an increase of 87% in 1950, there should be plenty of empirical evidence to support this hypothesis if it is true–but we are never given any such evidence. Instead, we are told “Econ 101!” and “It stands to reason!” When the empirical evidence fails to support the theory, rethink the theory.
Elias Isquith has a very interesting column in Salon. From that column:
. . . While most people at least intuitively understand that big-time political campaigns are financed largely by the very wealthy, Ferguson and his co-authors’ paper reveals the degree to which these national operations are funded by a vanishingly small number of people. “We really are dealing with a system that is of by and for the one percent — or the one-and-a-half percent,” Ferguson told Salon in a recent interview. And the numbers bear him out. Assuming that contributions over $500 come largely from the one percent, the paper finds that no less than 59 percent of Obama’s funding, and 79 percent of Romney’s, emanates from that small sliver of society. This contrasts rather jarringly with the popular image of the 2012 campaign as one pitting Obama’s middle-class constituency against Romney’s plutocratic backers. It was more of a plutocrat vs. plutocrat affair.
Even on that score, however, the lines of demarcation are fuzzy at best. It’s undeniable that Romney was more popular among big business than Obama, but the differences between the two were smaller than you’d imagine. In fact, the authors “suspect” that “the president probably enjoyed substantially higher levels of support within big business than most other modern Democratic presidential candidates, even those running for reelection.” Obama got walloped when it comes to what you could call Koch brother industries — oil, gas, plastics, etc. — but he did OK with Wall Street and, especially, the telecom and tech industries.
It’s that last point — Obama’s popularity among the industries that make up the surveillance state — that forms the most surprising and relevant takeaway of the paper. In the wake of the ongoing revelations from Edward Snowden of a national security state-turned-surveillance behemoth, the level of financial support the president enjoys from the industries working with the government to spy on Americans starts to make sense. But to compare this synchronicity to Obama’s 2008 campaign, and its pledges to rein in and civilize the Bush-Cheney post-9/11 national security leviathan, is to risk vertigo.
The distressing conclusion to be drawn from all this is that those interested in truly curtailing the surveillance state will find few friends within the two-party system. Democrats, after all, were supposed to be the ones who were more cautious, pragmatic, and civil liberties-minded when it came to surveillance. Voicing a sentiment that’s no doubt still held by many, if not most, Ferguson told Salon that, prior to his research, he “thought there was more distance between the Democrats and the Republicans on the National Security State.” That distance, if it ever was significant, is certainly gone now. . .
Mike Konczal in the Washington Post with an interesting idea:
“The world has changed, the syllabus hasn’t.” That’s the motto of the Post-Crash Economics Society, a group of students at the University of Manchester who demand reforms to the way undergraduate economics is taught in light of the worldwide economic crisis. Similar activism is occurring in other elite undergraduate institutions: There was the well-publicized Open Letter to Greg Mankiw from students in the introductory economics class at Harvard, during the height of the Occupy movement. Meanwhile, institutions like the Institute for New Economic Thinking (INET) are getting involved by launching a pilot program to revamp the undergraduate economics curriculum.
Economics professors sometimes respond to these demands for change by arguing that, though the crisis presents unique challenges, there’s still a core set of knowledge that needs to be taught. If students want, they can move on to advanced classes which give a more nuanced view of elements of economics. But in order to critique economics, either inside the discipline or outside of it, they need to know the basics.
These professors have a point. But the stakes of even basic economic education are high. The language of economics is the language of elite discourse, and revamping undergraduate economic curriculum has the potential to profoundly shift the ways the next generation understands economies and crises–for better or for worse.
So here’s one temporary fix for introductory economics: teach it backwards. Reversing the order in which introductory economic classes are taught today might be the easiest way to respond to the crisis in undergraduate education. Plus, the history of how it gets taught now is more interesting and more political than you might think.
Today, first-year undergraduate students typically start with microeconomics, or the study of individuals and individual markets. This begins with the study of abstract, decontextualized, markets, where supply and demand work perfectly, individuals exist in isolation, and they effortlessly trade with others in isolation of society, the law, and politics. Students are often asked to imagine Robinson Crusoe, stranded on his island, making choices about how to work, eat and play. Introductory studies then proceed, at the end, to situations where markets don’t work perfectly–for instance, when environmental pollution imposes costs on others, or when someone has monopoly power to set prices.
In their second class, students begin to learn macroeconomics, or what happens when you add up all those markets. After gathering the basics of the field, they study the concept of long-run growth first. Though hard answers are often unclear to expert economists, this course of study is meant to figure out how things in the long-run change. Then, if there’s time left in the term, the class may turn to short-run issues, particularly the topics of the business cycle, recessions, and involuntary unemployment.
Notice how this orients the casual student, the non-major who will only encounter economics once in this survey course. They start off with an abstract market that always works, versus having to see the messy parts when it doesn’t. They then proceed to the long-run, and only after everything else do they get to something that might help them understand why unemployment is so high for young college graduates. Only then might they be introduced to the institutions that make markets happen, if those are discussed at all.
So, what if we just reversed all that?
What if macroeconomics came first, before the study of individual markets? If were to reverse the typical curriculum, the first thing undergraduates would encounter wouldn’t be abstract theories about people optimizing, but instead the idea of involuntary unemployment and the idea that the economy could operate below its potential. They’d study the economy in the short-run before going to issues of long-term growth, with professors having to explain the theories on how the two are linked, bringing in crucial concepts like hysteresis.
Then, in the second class, . . .
Obama clearly knows which side his bread’s buttered on and is undoubtedly looking forward to big payoffs once he leaves office. Turning over the trade negotiations to the companies involved and ignoring the public interest seems quite typical of recent administrations, which operate in service of corporate rather than public interests. Tim Lee notes in the Washington Post:
On Tuesday, I wrote about the close relationship between the Office of the U.S. Trade Representative, which negotiates U.S. trade agreements, and industry groups that favor stronger copyright and patent protections. New e-mails released by the advocacy group Knowledge Ecology International shine further light on the close working relationship between Obama trade negotiators and K Street lobbyists.
The e-mails were released in response to a freedom of information request by IP-Watch this year. They don’t provide much information about the substance of USTR’s conversations with industry groups. But there are dozens of e-mails in which lobbyists from the pharmaceutical, medical device, video game, biotechnology and recording industries arranged meetings with senior USTR officials. The close relationship suggested by the e-mails contrasts with the more arms-length relationship public interest groups say they’ve experienced when they try to influence USTR officials.
One name that comes up frequently in the e-mails is Ralph Ives, a lobbyist for AdvaMed, a trade group representing medical device makers. In Tuesday’s story, I quoted an AdvaMed spokeswoman, who said that “neither AdvaMed nor Ives has ever provided USTR comments on a provision of the TPP IP chapter.”
The e-mails, which cover a period from 2009 to 2013, demonstrate regular contact between Ives and Jared Ragland, whose title in 2011 was director, Office of Intellectual Property and Innovation at USTR. On two occasions, on March 16, 2011, and Feb. 14, 2012, Ragland e-mailed Ives seeking advice. On two other occasions, on Sept. 20, 2011, and March 16, 2012, Ives e-mailed Ragland asking for a meeting.
The e-mails also show that Ives participated in a Feb. 1 conference call between USTR officials and industry lobbyists arranged by Medtronic lobbyist Trevor Gunn. On Jan. 22, in an e-mail with the subject line “TPP IP Issues,” Gunn wrote that USTR official Probir Mehta “has confirmed a meeting for the following individuals, representing ITAC3 on TPP IP issues.” ITAC3 is a USTR advisory committee representing pharmaceutical and medical device companies. Ives was one of six individuals listed as participating in the meeting, and subsequent e-mails suggested he joined the meeting by phone.
On Wednesday, an AdvaMed spokeswoman told me that the intellectual property chapter of the TPP was not discussed at any of these meetings. She noted that “Ragland was the lead negotiator for the transparency issues and procedural fairness provision of the TPP.” She says that those issues, not IP issues, were the focus of Ives’s conversations with Ragland.
As for the “TPP IP issues” e-mail, AdvaMed says that Gunn is simply in the habit of using “TPP IP issues” as a shorthand for all of the issues that he works on, which also includes non-IP issues of interest to medical device companies. The AdvaMed spokeswoman, after consulting with Ives, said that despite the meeting’s title, intellectual property issues did not come up during that Feb. 1 conference call.
The documents suggest that USTR interacts differently with industry insiders seeking to influence its policymaking than it does with public interest groups seeking to do the same. The e-mails contain numerous references to “cleared advisors,” individuals to whom USTR has granted access to confidential documents. Numerous companies and industry groups have had their personnel named as cleared advisers, and many of the meetings described in the e-mails were limited to cleared advisers so that confidential matters could be discussed.
In contrast, few public interest groups have been named as cleared advisers. Indeed, a USTR spokeswoman couldn’t name any examples of non-industry public interest advocates who have been cleared to advise USTR on IP issues. That severely limits the ability of public interest groups to have productive conversations with USTR officials, some of those groups say. “I can walk up to the front of the Department of Commerce building and tell them everything I think,” says Sherwin Siy, an attorney at the advocacy group Public Knowledge. “It doesn’t mean a thing unless we know what’s in the text.”
Another difference: the e-mails show that USTR doesn’t just take meetings with industry advocates, the agency also regularly solicits their advice. As we’ve seen, Ragland asked Ives for advice on two occasions. On another occasion, July 24, 2012, USTR’s Stanford McCoy e-mailed Jay Taylor of the pharmaceutical industry group PhRMA: “Can we possibly have a cleared adviser meeting Thursday or Friday of this week? I’d like to get up to speed on your concerns about medpharm and get a fresh start on the way forward.”
Peter Maybarduk, who works on pharmaceutical issues at the advocacy group Public Citizen, says that he never gets e-mails like that from USTR. “We don’t get any request for our take on this or that. If we ask to meet with Probir [Mehta of the USTR's Office of Intellectual Property and Innovation] for example, he’ll meet with us. We’ll have a conversation. Those conversations have gotten better over time. But it’s a complex diplomatic exercise, it’s not like a frank exchange of information about what is actually happening.” . . .
Brian Fung notes the criminal acts of the Army—and the piracy of just the one application amounts to theft of $180 million worth of software.
Q: Will anyone in the Army suffer any punishment at all for the $180 million theft?
A: Are you kidding? Maybe some enlisted man here or there, but certainly no officers.
The cool thing is: the Army stole $180 million, and they’re offering to pay back $50 million and call it even.
This gives me an idea on how to get rich quickly…. (Assuming the same rules apply to individuals as to organizations.)
Suzanne Kapner at the Wall Street Journal breaks the illusion:
When shoppers head out in search of Black Friday bargains this week, they won’t just be going to the mall, they’ll be witnessing retail theater.
Stores will be pulling out the stops on deep discounts aimed at drawing customers into stores. But retail-industry veterans acknowledge that, in many cases, those bargains will be a carefully engineered illusion.
The common assumption is that retailers stock up on goods and then mark down the ones that don’t sell, taking a hit to their profits. But that isn’t typically how it plays out. Instead, big retailers work backward with their suppliers to set starting prices that, after all the markdowns, will yield the profit margins they want.
The red cardigan sweater with the ruffled neck on sale for more than 40% off at $39.99 was never meant to sell at its $68 starting price. It was designed with the discount built in.
Buyers don’t seem to mind. What they are after, especially in such a lackluster economy, is the feeling they got a deal. Retailers like J.C. Penney Co. who try to get out of the game get punished.
“I don’t even get excited unless it’s 40% off,” said Lourdes Torress, a 44-year-old technical designer, as she browsed the sale racks at Macy’s Inc.’s flagship store in New York on a recent afternoon.
The manufactured nature of most discounts raises questions about the wisdom of standing in line for the promotional frenzy that kicks off the holiday shopping season. It also explains how retailers have been able to ramp up the bargains without giving away the store.
The number of deals offered by 31 major department store and apparel retailers increased 63% between 2009 to 2012, and the average discount jumped to 36% from 25%, according to Savings.com, a website that tracks online coupons.
Over the same period, the gross margins of the same retailers—the difference between what they paid for goods and the price at which they sold them—were flat at 27.9%, according to FactSet. The holidays barely made a dent, with margins dipping to 27.8% in the fourth quarter of 2012 from 28% in the third quarter of that year.
“A lot of the discount is already priced into the product. That’s why you see much more stable margins,” said Liz Dunn, an analyst with Macquarie Equities Research. . .
Oops! Gates pushes Microsoft management technique onto school systems, then Microsoft abandons the technique as destructive
Unfortunately, schools cannot simply abandon a bad technique if the technique is required by law. (See high-stakes testing.) David Morris reports at AlterNet:
Schools have a lot to learn from business about how to improve performance, Bill Gates declared  in an op-ed in the Wall Street Journal in 2011. He pointed to his own company as a worthy model for public schools.
“At Microsoft, we believed in giving our employees the best chance to succeed, and then we insisted on success. We measured excellence, rewarded those who achieved it and were candid with those who did not.”
Adopting the Microsoft model means public schools grading teachers, rewarding the best and being “candid”—that is, firing those who are deemed ineffective. “If you do that,” Gates promised  Oprah Winfrey, “then we go from being basically at the bottom of the rich countries to being back at the top.”
The Microsoft model, called “stacked ranking,” forced every work unit to declare a certain percentage of employees as top performers, then good performers, then average, then below average, then poor.
Using hundred of millions of dollars in philanthropic largesse, Bill Gates persuaded state and federal policymakers that what was good for Microsoft would be good for the public schools system (to be sure, he was pushing against an open door). To be eligible for large grants from President Obama’s Race to the Top program, for example, states had to adopt Gates’ Darwinian approach to improving public education. Today more than 36 states have altered their teacher evaluations systems with the aim of weeding out the worst and rewarding the best.
Some states grade on a curve. Others do not. But all embrace the principle that teachers continuing employment will depend on improvement in student test scores, and teachers who are graded “ineffective” two or three years in a row face termination.
Needless to say, the whole process of what has come to be called “high stakes testing” of both students and teachers has proven devastatingly dispiriting. According  to the 2012 MetLife Survey of the American Teacher, over half of public school teachers say they experience great stress several days a week and are so demoralized that their level of satisfaction has plummeted from 62 percent to 39 percent since 2008.
Now, just as public school systems have widely adopted the Microsoft model in order to win the Race to the Top, it turns out that Microsoft realizes its model has led the once highly competitive company in a race to the bottom.
In a widely circulated 2012 article  in Vanity Fair, two-time George Polk Award winner Kurt Eichenwald concluded  that stacked ranking “effectively crippled Microsoft’s ability to innovate.” He writes, “Every current and former Microsoft employee I interviewed—every one—cited stack ranking as the most destructive process inside of Microsoft, something that drove out untold numbers of employees. It leads to employees focusing on competing with each other rather than competing with other companies.”
This month Microsoft abandoned the hated system.
On November 12, all Microsoft employees received a memo from Lisa Brummel, executive vice-president for human resources, announcing the company will be adopting “a fundamentally new approach to performance and development designed to promote new levels of teamwork and agility for breakthrough business impact.”
Brummel listed four key elements in the company’s new policy.
- More emphasis on teamwork and collaboration.
- More emphasis on employee growth and development.
- No more use of a Bell curve for evaluating employees.
- No more ratings of employees.
Sue Altman at EduShyster  vividly sums up the frustration of a nation of educators at this new development. “So let me get this straight. The big business method of evaluation that now rules our schools is no longer the big business method of evaluation? And collaboration and teamwork, which have been abandoned by our schools in favor of the big business method of evaluation, is in?”
Big business can turn on a dime when the CEO orders it to do so. But changing policies embraced and internalized by dozens of states and thousands of public school districts will take far, far longer. This means the legacy of Bill Gates will continue to handicap millions of students and hundreds of thousands of teachers even as the company Gates founded, along with many  other businesses, has thrown his pernicious performance model in the dustbin of history.
Very interesting article, slightly wonky, by Miles Kimball and Noah Smith, in Quartz:
A personnel shakeup at the US Federal Reserve Bank of Minneapolis last week at first flew under the radar; by the time the Minneapolis Star-Tribune reported the news, followed by other news outlets, it had been percolating through the economist grapevine for weeks. But the world should be paying attention, because the shakeup may be a part of big changes that are happening at the Fed, as well as a tectonic shift in the field of economics itself.
Two of the Minneapolis Fed’s most eminent and long-serving economists, Patrick Kehoe and Ellen McGrattan, have been fired. The Star-Tribune article makes it clear that their departure was not voluntary on the part of either researcher. (Fortunately, both Kehoe and McGrattan will be fine, career-wise—both have stellar publication records and tenured professorships at the University of Minnesota.)
Why did this happen? We cannot know, especially since Minneapolis Fed Chief Narayana Kocherlakota isn’t giving his side of the story. But Jeffrey Sparshot makes this possible connection in the Wall Street Journal:
Mr. Kocherlakota switched in 2012 from opposing some of the Fed’s easy-money policies to calling for more aggressive Fed action to spur economic growth and employment. The move reflected a shift in his views on persistently high unemployment: He went from thinking the cause was largely structural (and thus could not be fixed with monetary policy) to thinking it was largely due to weak demand (which means it could be addressed through policies aimed at boosting demand).
In other words, although the Minneapolis Fed shakeup could be due to any number of reasons—a personality conflict, a disagreement over the Fed bank’s mission, etc.–one possibility is that the personnel changes are related to Fed officials’ changing attitude toward business cycles. To understand that possibility, it is crucial to understand an academic controversy that has been simmering for decades.
Freshwater vs. Saltwater
Patrick Kehoe, one of the economists dismissed from the Fed, is a key figure in a school of economics called “Freshwater Macroeconomics” (the other, Ellen McGrattan, is his frequent co-author). The labels “Freshwater” and “Saltwater” go back to the arguments and new ideas generated by the double-digit inflation in the 1970s. The names refer to the geography of key combatants in that period, when economists at the University of Chicago, Carnegie Mellon University and the University of Minnesota spearheaded the “Rational Expectations Revolution.” They believed that people are very, very smart and sensible in their economic decisions. Taken to its logical extreme, the idea of economic rationality led the Nobel-winning Freshwater pioneer Edward Prescott to argue that recessions are not economic failures, but instead are inevitable, healthy outcomes of economies responding to the uneven pace of technological progress. In other words, Prescott and the economists who followed his lead said that the government shouldn’t try to fight recessions.
If the Fed prints money to try to stimulate demand, they say, it will only succeed in creating inflation rather than reviving the economy. And given this view of rationality, Freshwater macroeconomics often pushes the idea that the government should keep its hands off the economy in other policy domains as well.
Prescott and his fellow-travelers established a bastion for this apotheosis of Freshwater macroeconomics at the University of Minnesota and the Minneapolis Fed. Patrick Kehoe carries that torch, being one of the greatest of the Freshwater macroeconomists to follow the founding generation, and one of the most extreme in his views.
The Freshwater school gained enormous clout in the ‘80s. But in the ‘90s, there was a counterattack from the coast. The Saltwater macroeconomists believed that recessions were economic failures, and that monetary policy was important in fighting them. Led by Michael Woodford, they adopted the tools and language of the Freshwater economists, and managed to convince many of their Freshwater brethren to reluctantly agree that monetary policy can, in fact, boost the economy. But one bastion of hard-line freshwater thinking held firm: “Minnesota macro.” The researchers at the University of Minnesota and the Minneapolis Fed have largely hung onto the belief that monetary policy can affect inflation, but can’t fight recessions.
But there is good reason to think that this view is losing credibility at the Fed.
Narayana Kocherlakota is an influential Fed official, and as such is an important bellwether of Fed thinking. His views have shifted decisively toward believing that monetary policy can stabilize the economy. What changed his mind? The answer is obvious: the Great Recession, and the failure of large purchases of long-term government bonds and mortgage-backed assets—QE—to create inflation. It makes all the difference in the world when the number one event shaping the questions macroeconomists ask is no longer the Great Inflation of the 1970s, but the Great Recession that still casts its shadow over the world.
Nor is Kocherlakota the only Fed official to change his mind. So even if the Minneapolis Fed shakeup wasn’t caused by a clash of ideas, the Fed’s shift toward Saltwater macro is a real phenomenon, and needs to be understood.
Freshwater Not So Fresh?
Whether people realize it or not, the thinking behind macroeconomic policy has such a decisive influence on the world that it is worth the effort for everyone to try to understand the central ideas and characteristics of the key schools of macroeconomics. Even many non-economists will remember John Maynard Keynes and Milton Friedman; it is these economists whose ideas led to the theories of the Saltwater school. But very few people even know what Freshwater macro is. We hope to give you a little introduction. . .
For some background on Milton Friedman, who began (and to an extent remained) a lobbyist for big business, see this profile, which points out the weaknesses of Libertarianism, much espoused by Milton Friedman.
Here’s a 2008 article blasting the Freshwater school, also identified with the U of Chicago economists.
Joshua Holland interviews Gary Ruskin at BillMoyers.com:
In 2010, a group of hackers known as LulzSec gave us a peek into the shadowy world of corporate espionage. The group released 175,000 emails it obtained from a private security firm called HBGary Federal.
The hack revealed, among other things, that Bank of America (BofA) had grown concerned about a promise that Wikileaks founder Julian Assange made in 2009 to release a trove of sensitive documents that Assange claimed could “take down” the bank. BofA went into crisis-control mode, setting up a “war room” to handle the fallout from the expected release (which, as it turned out, never came).
It also approached the Justice Department, which referred the mega-bank to a K-Street lobbying firm, which introduced BofA executives to a group of private security firms called Team Themis.
Peter Ludlow, a professor at Northwestern University, wrote in The New York Times that the group offered, among other services, a “common aspect of intelligence work: deception. That is, it is involved not just with the concealment of reality, but with the manufacture of it.”
Team Themis (a group that included HBGary and the private intelligence and security firms Palantir Technologies, Berico Technologies and Endgame Systems) was effectively brought in to find a way to undermine the credibility of WikiLeaks and the journalist Glenn Greenwald… because of Greenwald’s support for WikiLeaks.
Team Themis considered falsifying documents and feeding them to Greenwald in order to discredit his reporting. They also pitched the Chamber of Commerce with a plan to infiltrate Chamber Watch, a progressive group that opposes the CoC’s anti-regulatory agenda. They suggested creating “two fake insider personas, using one as leverage to discredit the other while confirming the legitimacy of the second.”
When the story broke, Bank of America and the Chamber of Commerce rushed to distance themselves from the plans and HBGary claimed that they had never gotten past the planning stage. But the leaked emails briefly shined a light on the murky, largely unregulated world of corporate spying – an industry that watchdogs say has grown exponentially since the 9/11 attacks.
Last week, the nonpartisan, nonprofit Corporate Policy Center issued a report titled, “Spooky Business: Corporate Espionage Against Nonprofit Organizations,” which detailed a number of revelations of corporate espionage operations against non-profit activist groups. Moyers & Companyspoke to the report’s author, Corporate Policy Center Director Gary Ruskin, last week.
Joshua Holland: Over the past few years, a few cases of corporate espionage against various activist groups have come to light, but your report is the first to attempt to document this phenomenon in detail. Do we know how widespread this practice is?
Gary Ruskin: We really do not. Our report, “Spooky Business,” is really an effort to say something that we really know very little about. It’s kind of like documenting the tip of the iceberg, but we don’t know how deep the iceberg goes. So it’s going to require a lot more journalistic work, as well as some investigations by the Department of Justice and other law enforcement officials.
Holland: Let’s look at an example of the kinds of stories that have come to light and then we can discuss the ramifications. What is S2i, the company formerly known BBI?
Ruskin: Those two companies are basically private investigation firms and they were very active in surveilling and conducting espionage against a wide variety of nonprofit organizations.
Holland: What kind of specific activities did you find these private ‘spooks,’ if you will, doing to disrupt activist groups — or is disrupt even the right word? . . .