Economy

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  • Rachel Maddow Rips Trump After "Stunning" And "Profound Rejection" From Reputable Economists

    Blog ››› ››› ALEX MORASH

    MSNBC host Rachel Maddow ridiculed Republican presidential nominee Donald Trump after a Wall Street Journal survey found not a single former member of the White House Council of Economic Advisers (CEA) would support his presidency.

    Maddow opened the August 25 edition of her program by blasting Trump over a Wall Street Journal survey that revealed that no former CEA members would state support for the GOP nominee. Maddow reported that while this “very diverse group” of 45 economists had served eight different presidents -- including five Republicans -- “the one thing they all have in common is that not a single one of them supports Donald Trump for president.”

    According to the Journal, no Democratic or Republican advisers expressed support for Trump. Two former Republican advisers (Matthew Slaughter and Richard Schmalensee) crossed party lines to offer support for Democratic nominee Hillary Clinton. And two GOP advisers (former Reagan appointees William Poole and Jerry Jordan) even stated their support for Libertarian candidate Gary Johnson over their own party’s nominee. Maddow called the survey result “stunning,” and compared the economists’ “profound rejection” of Trump to being passed over at a dance. Maddow noted that it was like asking someone to dance, “and everybody in the world decides they will never dance again because of you” (emphasis added):

    RACHEL MADDOW (HOST): It's one thing to have, you know, some dissident Republicans rejecting a party's presidential nominee. It happens here and there. It happens, to a greater or lesser extent, with almost every nominee from both major parties every election cycle. There's always a dissenter here or there, but when it's everyone alive who has ever worked for any American president as an economic adviser including the last five Republican presidents, and they all reject you. That’s not like, you ask somebody to dance and they say, “no I don't want to dance with you.” That's like, you ask someone to dance and everybody in the world decides they will never dance again because of you. I mean, this is just -- this is profound rejection. I find that just stunning.

    During the segment, Maddow also highlighted a bitingly critical indictment of Trump that Harvard economist Martin Feldstein, a former CEA chairman under President Reagan, told to The Wall Street Journal:

    “I have known personally every Republican president since Richard Nixon. They all showed a real understanding of economics and international affairs. The same was true of Mitt Romney. Donald Trump does not have that understanding and does not seem to be concerned about it. That alone disqualifies him in my judgement.”

    The revelations from the Journal’s survey were also a topic of conversation on the August 26 edition of CNN’s New Day, during which Trump booster Steve Forbes dismissed the revelation and pivoted to highlight the supposed strength of Trump's advisers: Stephen Moore and Larry Kudlow. Moore and Kudlow have been dogged for making inaccurate statements and failed predictions over the years. Moore was accused of having “a troubled relationship with facts” by Nobel Prize-winning economist Paul Krugman, who went on to say that Moore may be maintaining a career in conservative economics only because “incompetence is actually desirable at some level” in those circles. Meanwhile, Kudlow recently lectured single parents that they are partly to blame for poverty even though he admitted to having "virtually no knowledge in this field.”

    The Journal's failure to find a single Democratic or Republican supporter of Trump among 45 former presidential economic advisers follows an August 22 report from the paper that hundreds of business economists overwhelmingly prefer Clinton as the best candidate on the economy. Clinton received the support of 55 percent of 414 economists surveyed by the National Association of Business Economics (NABE). Trump drew votes from just 14 percent of NABE members, once again registering less support on the economy than Gary Johnson, who garned 15 percent.

    The almost complete lack of support for Trump on the economy comes despite months of the GOP nominee being the dominant force in cable news discussions of the economy -- thanks in part to appearing on Fox News’ Hannity 24 times during the first six months of 2016.

  • New Research Debunks Right-Wing Media Myths About Effects Of Paid Leave

    Research Suggests Paid Sick Leave Improves Public Health

    ››› ››› ALEX MORASH

    Several media outlets highlighted new research that found workers that had access to paid sick leave are less likely to come to work when contagious -- thus slowing the spread of diseases and improving overall public health. While this may seem like an obvious conclusion, right-wing media have criticized paid sick time and other forms of earned leave as unnecessary “giveaways” for low-wage workers.

  • Fox Business Guest Completely Dismantles Any Economic Case For Trump’s Presidency

    Robert Powell: “The Reality Is Money Doesn’t Grow On Trees”

    Blog ››› ››› CRAIG HARRINGTON

    During an appearance on Fox Business, former Economist editor Robert Powell dispelled claims from Republican presidential nominee Donald Trump's campaign that the candidate’s tax and economic policy proposals would generate at least five consecutive years of economic growth in excess of 4 percent annually.

    Powell, who is now the global risk briefing manager for the Economist Intelligence Unit, a forecasting and advisory business operated by The Economist, was interviewed on the August 24 edition of Fox Business’ Varney & Co. Host Stuart Varney opened the segment by asking for a response to Trump economic adviser Stephen Moore’s guarantee earlier this week that the massive tax cuts proposed by the Republican nominee would generate sustained economic growth far outpacing anything witnessed in the United States since 1966. Along the way, Powell poked holes in the arguments in favor of the budget-busting supply-side tax cuts Trump and other Republicans have advocated for years as a silver bullet solution to economic malaise.

    Powell mocked Moore’s guarantee, noting that “the reality is money doesn’t grow on trees,” and slammed Trump’s tax plan for promising to add trillions of dollars to the debt -- far more than Democratic nominee Hillary Clinton’s proposal might. He undermined Varney’s unsubstantiated claim that cutting taxes will kickstart economic expansion, and reminded the Fox Business audience that President Reagan actually had to raise taxes to regain revenue lost to early tax cuts. Powell noted that to make up for built-in revenue losses, the rate of economic expansion would actually have to hit 10 percent or more -- which is not a “feasible” rate of growth. Most importantly, he questioned why Varney and his Fox Business cohort are gripped with so much economic anxiety when “unemployment is 4.9 percent” and the American economy is doing “relatively well” and is “a star performer” when compared with other developed countries around the world. From Varney & Co.:

    Powell mentioned during the interview that The Economist does not believe either Trump’s or Clinton’s plan can meet Moore’s arbitrary growth threshold, stating that “we’re perfectly reasonable, and we don’t think Hillary Clinton will deliver 4 percent growth either.” But Powell did argue that Trump’s position on taxes and economic policy is “less responsible” than his Democratic opponent’s.

    Trump’s inherent lack of responsibility is why the Economist Intelligence Unit’s global risk forecast for September 2016 ranks Trump being elected president as a threat to the global economy that is as big as “the rising threat of jihadi terrorism” and “a clash of arms in the South China Sea,” the site of a territorial dispute between China and other neighboring countries, including U.S.-allied Taiwan:

    One of the things that went unsaid during the interview was how absurd it was for Varney to accept Trump’s 4 percent growth target in the first place. According to data from the Bureau of Economic Analysis (BEA), the United States has not witnessed five consecutive years of growth in excess of 4 percent in five decades. When failed Republican candidate Jeb Bush first promoted the target in June 2015, experts slammed it as “impossible” and “nonsense.” Since then, arbitrary targets of 4 or 5 percent growth have been adopted by other GOP hopefuls, including Sen. Ted Cruz (R-TX) and now Trump. For its part, Fox News has consistently fixated on setting arbitrary growth targets for the American economy in excess of 3 percent, which it claims is proof of a failed economic recovery under President Obama.

  • On Black Women’s Equal Pay Day, Media Highlight Plight Of Women Of Color In The Workplace

    ››› ››› ALEX MORASH

    According to the most recently available data, African-American women on average are paid only 60 percent of what white men are paid in a year, meaning they would have to work almost nine additional months to catch up. August 23 is an annual day of action, Black Women’s Equal Pay Day, focused on that issue, and numerous media outlets have noted the event by highlighting the plight of African-American women in the workforce.

  • WSJ Claims Clinton Penalizing Tax-Dodging Corporations Is Akin To “Class Warfare”

    Editorial Board Calls For “Trumpian Pragmatism” On Corporate Taxes Even Though Journal’s Own Reporting Shows Experts Prefer Clinton On The Economy

    Blog ››› ››› ALEX MORASH

    The Wall Street Journal blasted Democratic presidential nominee Hillary Clinton’s plan to assess a tax on corporations that move overseas as “familiar class-warfare artillery” and claimed that what these supposedly overburdened American multinational corporations really deserve is "Trumpian pragmatism" in the form of massive tax cuts. The editorial, which promoted a number of discredited and misleading talking points to advocate for corporate tax cuts, was published just hours before the Journal reported on a survey of over 400 economists showing an overwhelming expert preference for Clinton’s economic policies.

    In an August 21 editorial, the Journal attacked Clinton’s push to rein in corporate tax avoidance schemes as a means of “class warfare” and “the sort of thing banana republics impose when their economies sour.” Clinton’s plan would be to levy an “exit tax” on corporations that engage in a process called “tax inversion,” wherein an American multinational corporation acquires a foreign company and claims its taxable profits are now based outside the United States. Rather than imposing a tax on companies that try to skirt federal law -- and using the revenue to invest in critical infrastructure projects, as Clinton has suggested -- the Journal advocated for what it called “Trumpian Pragmatism”: slashing the corporate tax rate by more than half as a way to “deter inversions” and convince companies to relocate in the United States. From the August 21 edition of The Wall Street Journal:

    The Democrat would impose what she calls an “exit tax” on businesses that relocate outside the U.S., which is the sort of thing banana republics impose when their economies sour. She’d conduct a census and then categorize any multinational with more than 50% U.S. ownership as a domestic concern that would be subject to a tax on its deferred profits if it inverts. She isn’t specifying the punitive tax rate.

    [...]

    Mr. Trump proposes to cut the U.S. corporate rate to 15% from 35% (or 40% counting average state rates). Fifteen percent is low enough to deter inversions while making the country more attractive to capital investment and better primed for higher wages. He would also offer a preferential rate of 10% for the $2 trillion already earned overseas.

    Mrs. Clinton calls this tax-cutting for billionaires and corporate-jet owners, which shows how unhappy her Presidency could be. Such Trumpian pragmatism—10% of $2 trillion is better than 35% of $0—is the only realistic way for Mrs. Clinton to fund her infrastructure plan, and Republicans in Congress have sounded out Democrats for such a deal for years. President Obama has rebuffed their entreaties, settling for nothing—and now Mrs. Clinton is setting herself up for the same.

    Despite the editorial board’s claims against Clinton, reporter Ben Leubsdorf actually reported in the Journal’s Real Time Economics blog on August 22 that business economists overwhelmingly prefer Clinton as the best candidate on the economy. According to a recent survey by the National Association for Business Economics (NABE) that Leubsdorf cites, 55 percent of the 414 economists surveyed believed Clinton “would do the best job of managing the economy” compared to just 14 percent who picked Republican nominee Donald Trump. (Trump registered less support in the survey than did Libertarian nominee Gary Johnson, who garnered 15 percent.)

    An independent economic analysis of Clinton’s plan from Moody’s Analytics found it would boost job creation by roughly 10 million jobs over four years -- over 3 million more jobs than would be gained by maintaining current economic policies. When Moody’s ran the same analysis of Trump’s tax plan, which the candidate has since revised, it found that his proposals were likely to stymie economic growth and job creation while increasing the debt and deficit, largely for the benefit of “very high-income households” like his own.

    When CNNMoney correspondent Cristina Alesci and CNN analyst Ali Velshi compared Clinton's economic plan to Trump’s on the August 17 edition of CNN's Legal View with Ashleigh Banfield, Alesci noted that Clinton's plan would largely benefit the middle class while Velshi reported that the lack of details in Trump's economic plan makes it "unclear ... who it actually helps and who it doesn't." Velshi added that experts believe parts of Trump's plan, including the child care tax deduction, are "designed for higher-income, more affluent families."

    Trump’s tax plan would sharply reduce corporate tax rates from 35 percent to 15 percent and create three individual income tax brackets of 12, 25, and 33 percent. The Trump plan has been lambasted by economists as “nonsense,” and media fact-checkers ridiculed its “pathetic” lack of details. Nobel Prize-winning economist and New York Times columnist Paul Krugman slammed Trump for promoting more of the “standard voodoo” economics frequently pushed by Republican supply-side advocates. Economic policy professor and former Secretary of Labor Robert Reich blasted Trump and his economic advisor Stephen Moore for attempting to rebrand the “sheer lunacy” in Trump’s original tax plan into the “normal nonsense of supply-side, trickle-down economics.”

    For its part, The Wall Street Journal is no stranger to pushing discredited “trickle-down” tax cuts, so the editorial board’s decision to embrace Trump’s implausible platform in the face of overwhelming evidence is no surprise.

  • New Research Counters Myth That Banning Discrimination Against LGBT People Is “Economically Harmful”

    Researchers Found Innovators Flock To States That Prevent Discrimination Against LGBT Workers

    Blog ››› ››› ALEX MORASH

    Recently published research highlighted by the Harvard Business Review found that states with laws that ban employment discrimination against LGBT Americans saw a direct increase in business innovation -- counter to right-wing media myths that such laws result in negative interference in the market.

    According to a study published on June 15 by the journal Management Science, “state-level employment nondiscrimination acts (ENDAs) -- laws that prohibit discrimination based on sexual orientation and gender identity -- spur innovation” among firms headquartered in those states. The study’s authors -- finance professor Huasheng Gao and economist Wei Zhang -- published an op-ed on August 17 in the Harvard Business Review highlighting their findings that states that protect employees with ENDAs see an increase in innovators moving to those states and a boost in business productivity. The research found that “firms headquartered in states that passed ENDAs experienced an 8% increase in the number of patents and an 11% increase in the number of patent citations, relative to firms headquartered in states that did not pass such a law.” The researchers concluded that this change was a result of individuals moving based on their approval or disapproval of the change in the law and theorized that “pro-LGBT individuals are likely to be more creative than the anti-LGBT ones” leading to companies in states that prohibit workplace discrimination having broader access to more creative talent:

    We looked at data for thousands of firms — almost all U.S. public firms that actively filed patents — from 1976 to 2008. We found that the adoption of ENDAs led to a significant increase in innovation output. On average, firms headquartered in states that passed ENDAs experienced an 8% increase in the number of patents and an 11% increase in the number of patent citations, relative to firms headquartered in states that did not pass such a law. These results start to show up two years after the adoption of ENDAs and largely are driven by firms that previously did not implement non-discrimination policies, by firms that operate in human-capital-intensive industries, and by firms in states with large lesbian, gay, bisexual, and transgender (LGBT) populations.

    These findings contradict years of right-wing media myths falsely claiming that protecting LGBT people from discrimination curbs free market innovation and hurts business. Daily Signal commentator and Heritage Foundation fellow Ryan Anderson claimed that the passage of nondiscrimination laws for LGBT Americans would “foster economically harmful government interference” and that this interference could result in “potentially discouraging job creation.” In an op-ed for CNN, Peter Sprigg of the Family Research Council -- an extremist organization designated as an anti-LGBT hate group by the Southern Poverty Law Center -- pushed the myth that banning discrimination would be be tantamount to “federal government interference in the free market.”

    Right-wing claims that banning employment discrimination against LGBT people would hurt business are often followed with the myth that nondiscrimination laws are unnecessary. The Boston Globe columnist Jeff Jacoby misleadingly argued that, save for “occasional incidents of bigotry … there is no urgent crisis in the treatment of gay and lesbian employees,” because “free markets” have already rooted out systematic discrimination.”

    Contrary to myths promoted by right-wing outlets that ENDAs are unwarranted, the Williams Institute found that “widespread discrimination” against LGBT employees remains a problem in American workplaces. American workers still face discrimination based on their sexual orientation and gender identity, and the results outlined in the Harvard Business Review show that laws prohibiting such discrimination are beneficial to both workers and businesses, regardless of right-wing media claims.

  • NY Times Contributor Highlights How Unionization Helps Fight Economic Inequality, Gender Pay Gap

    Unions Benefit All Workers With Better Pay And Stable Shifts, Collective Bargaining Reduces The Gender Pay Gap

    Blog ››› ››› ALEX MORASH

    A New York Times contributor shared her experience working as a cocktail server in Las Vegas, where she saw how unions helped workers -- especially women and immigrants -- receive better pay, benefits, and job security.

    Brittany Bronson, a Times contributor and an instructor at the University of Nevada, Las Vegas (UNLV) highlighted the importance of unions in an August 17 op-ed, discussing how unions provide many benefits that specifically help women in the workplace. Bronson reported from her own experience that “unions are strong in Las Vegas,” providing workers in the casino and hospitality industry “benefits that cocktail servers and hotel workers in other states can only dream of.” These benefits and protections -- including good wages, health care packages, and stable scheduling -- are why Bronson saw “so many lifers in [the] industry.” The op-ed also discussed how union seniority helped women maintain their rights at work -- something that “runs counter to most American workplaces, where women tend to lose power as they age” and the gender pay gap widens for women as they get older.

    The role unions can play in tackling pay disparities and overall economic inequality is frequently dismissed by right-wing media, which deny the existence of a gender pay gap and misleadingly blame unions for contributing to economic deterioration. Working women in the United States earned “just 79 percent of what men were paid” in 2014, according to a Spring 2016 report by the American Association of University Women (AAUW). Pay disparities follow women throughout their careers, depressing their earnings potential and contributing to elevated rates of poverty in retirement. Union seniority rights and collective bargaining opportunities could be an important part of ending the gender pay gap by preventing pay discrimination against women -- as the op-ed pointed out, the Pew Charitable Trust found that the gender pay gap narrows in union shops, where women are paid roughly 88 percent as much as their male counterparts. From the August 17 edition of The New York Times:

    Unions are strong in Las Vegas, and they bring benefits that cocktail servers and hotel workers in other states can only dream of: Beyond better wages and health care packages, union members are ensured set schedules and their first choice of coveted shifts, based on seniority. It’s why there are so many lifers in my industry: At the top of our cocktailing matriarchy was a woman who had joined the union in 1973.

    [...]

    The Las Vegas casino scene runs counter to most American workplaces, where women tend to lose power as they age. According to research by the recruiting site Glassdoor, the pay gap, even after it’s adjusted for things like occupation, increases with age — from 2.2 percent for women ages 18 to 24 to 10.5 percent for women between 55 and 64. Family obligations and gender discrimination take women out of the American work force, meaning fewer promotions, fewer women in management and ultimately fewer raises.

    [...]

    The benefits ripple outward, in the form of family wealth building and educational opportunities. According to a March 2015 New York Times report, a girl in a poor family who grows up in Las Vegas will make 7 percent more than she would elsewhere by age 26. Income mobility for women is better in Clark County, where Las Vegas is, than it is in 71 percent of counties nationwide.

  • Fox Resurrects Obamacare “Death Spiral” After News Of Aetna’s Withdrawal From Insurance Exchanges

    Right-Wing Media Warnings Of Previous “Death Spirals” All Fell Flat

    ››› ››› CAT DUFFY

    Fox News exaggerated the implications of insurance giant Aetna’s decision to reduce its participation in health insurance exchanges created by the Affordable Care Act (ACA), also known as “Obamacare,” by claiming that the announcement was proof of an impending “death spiral” in insurance markets. Conservative media outlets have opportunistically used various so-called “death spiral” predictions over the last several years to falsely forecast the imminent demise of the President Obama’s signature legislation.