Karen Dolan Weighs in on Romney's Latest Gaffe

By Emily Schwartz Greco, February 2, 2012

Karen Dolan, an IPS expert on poverty and the nation's frayed safety net, has published an op-ed on CNN's website in response to GOP presidential hopeful's latest "oops" moment:

"I'm not concerned about the very poor." Oops. Mitt Romney messed up. Again. This was a bigger "oops moment" for Romney than when he said a few weeks ago that the $374,327 he earned in speakers' fees over the course of 12 months amounted to "not very much." It was bigger than "I like being able to fire people." It was the biggest since he blurted out that "corporations are people, my friend" at the Iowa State Fair.

Call it a Freudian slip, call it overconfidence emerging from a big win in the Florida Republican primary, call it a classic, out-of-touch-sounding "Rich Romney" gaffe. It may be all of those things, but this comment represents a scripted piece of the Romney campaign strategy. He hopes to co-opt an Obama campaign message aimed at appealing to the middle-class voters each will need in the general election.

Due to CNN.com's editorial policies, we're unable to post the whole thing here. But please read it on their website, and check out some of the 1,800 comments logged so far. Since too many of them are unsympathetic toward the poorest among us, be sure to weigh with your two cents, and spread the word via Facebook and Twitter.

Update: Many conservatives are attacking Romney in the wake of this gaffe. The Daily Kos has a fantastic summary. Here's a sample quote from National Review's Jonah Goldberg: "His language makes him seem like a caricature of a conventionally stiff country club Republican."

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The Lineup: Week of Jan. 30-Feb. 5, 2012

By Emily Schwartz Greco, January 30, 2012

In this week's campaign finance special edition, OtherWords columnist Donald Kaul unveils his new Super PAC and Jim Hightower gives Newt Gingrich's Super PAC a more accurate name. Peter Hart casts a spotlight on the big-money effort underway to bypass the electoral system altogether, and Timothy Karr says the broadcast media should balance its quadrennial avalanche of election-year ads with solid coverage of the candidates and their issues. Khalil Bendib's cartoon lampoons the role big money is playing in the 2012 elections. Get all this and more in your inbox by subscribing to our weekly newsletter. If you haven't signed up yet, please do.

1. Immobility Nation / Salvatore Babones
2. The 1 Percent Candidate / Peter Hart
3. The Hottest TV Drama in 2012 / Timothy Karr
4. The Risky Business of Post-War Contracting / Beth Schulman
5. Destroy Our Future / Donald Kaul
6. Buying Our Future / Jim Hightower
7. Overthrow Wall Street / William A. Collins
8. USS Super PAC / Khalil Bendib

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Good News and Bad News about GDP Growth

By Salvatore Babones, January 27, 2012

The U.S. economy grew at an annualized rate of 2.8 percent in the fourth quarter of 2011, the Bureau of Economic Analysis reported.

With Europe in crisis and the world teetering on the brink of a new global recession, that quarterly growth figure is a welcome ray of sunshine in an otherwise bleak outlook. The nation accounts for 23 percent of total world GDP.

The 2.8 percent headline figure represents the real (adjusted for inflation) growth in gross domestic product (GDP) between the third and fourth quarters of 2011, adjusted to account for ordinary seasonal variability and converted to an annual growth rate.

It compares favorably with both the 1.8 percent figure for the third quarter and the economy's long-term average annual growth rate of 2.5 percent over the past two decades.

Unfortunately for the United States and its trading partners, the news isn't as good as it seems.

Final sales — defined as GDP less change in private inventories — increased at a rate of only 0.8 percent in the fourth quarter.

In other words, only 0.8 percent of the fourth quarter's growth came from actual sales of goods and services. The other 2 percent came from businesses building up their inventories.

What does that mean? Here are two possible interpretations.

The optimistic interpretation is that businesses were accumulating inventory in late 2011 in anticipation of high sales figures in 2012. Seen in this light, inventories can be a leading economic indicator. They suggest stronger economic growth in 2012.

The pessimistic interpretation is that inventories rose in the fourth quarter of 2011 because businesses couldn't sell their goods. With sales slowing, inventories pile up. This view doesn't bode well for 2012.

While either interpretation could be correct, there's strong circumstantial evidence for the pessimistic interpretation.

When measured in actual dollars, without adjusting for inflation, nominal GDP rose at an annual rate of 3.2 percent annual rate in the fourth quarter, compared with a 4.4 percent rate in the third.

The only reason that real GDP (which is adjusted for inflation) rose faster in the fourth quarter was that inflation declined from 2 percent to less than 1 percent.

This means that GDP growth actually slowed in the fourth quarter of 2011, but inflation slowed even more, resulting in a net increase in real GDP growth.

Strong demand causes inflation to rise; weak demand causes inflation to fall. Falling inflation indicates that demand is weak. This suggests that the pessimistic interpretation of rising inventories is probably the right one.

The 27 January fourth quarter GDP figures are only "advance" estimates, not final results. Revised figures will be released on Feb. 29 and final figures on March 29.

GDP figures are often revised downward after the initial estimates have been published. Inventory statistics in particular have been a source of error.

The U.S. economy has shed more than 6 million jobs since the beginning of the recession in December 2007.

Due to a rise in part-time employment, the number of Americans employed in full-time jobs is down more than 8 million.

According to the Bureau of Labor Statistics, the economy is currently creating about 150,000 net new jobs per month. Even accounting for retirees, that barely keeps pace with the rate of new graduates entering the labor market each year.

There is little relief in sight. At the Fed's latest Federal Open Market Committee (FOMC) meeting January 24-25, expectations were muted.

The FOMC said in its official statement that it "currently anticipates that economic conditions — including low rates of resource utilization and a subdued outlook for inflation over the medium run — are likely to warrant exceptionally low levels for the federal funds rate at least through late 2014."

In promising to keep interest rates "exceptionally low" the FOMC indicates that it expects the US economy to remain sluggish for at least the next three years.

Officially, the economy entered recession in December 2007 and emerged into recovery in July 2009. The recovery, however, has been slow and relatively jobless.

In the experience of most ordinary Americans, the recession that started at the end of 2007 is not yet over. If the FOMC expects current economic conditions to continue through the end of 2014, that suggests a grand total of seven years of slow going.

This raises the question: when does a recession become a depression? There's no "official" definition of a depression used by U.S. or international authorities, but the current experience must come close.

Full-year 2011 real GDP growth for the United States stood at 1.7 percent. Factoring in population growth, real GDP-per-capita was roughly the same last year as it was in 2005.

It's certainly good news that the U.S. economy is growing again, but if the Federal Reserve forecasts are right it will be a long time before Americans have anything much to cheer about. Depression or no depression, Americans are in for a long, hard slog.

Salvatore Babones is a senior lecturer in sociology and social policy at the University of Sydney and an associate fellow at the Institute for Policy Studies. An earlier version of this post appeared on the inequality.org website. www.ips-dc.org

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The Lineup: Week of Jan. 23-29, 2012

By Emily Schwartz Greco, January 23, 2012

In this week's OtherWords editorial package, Donald Kaul explains why it was hard to notice the official end of the Iraq War, and Jim Hightower describes the Drug War's losing battle in Afghanistan. Get all this and more in your inbox by subscribing to our weekly newsletter. If you haven't signed up yet, please do.

We also have a special feature this week: OtherWords contributor Martha Burk posted an interview with Roe v. Wade lawyer Sarah Weddington to our blog. Check it out.

1. Wealthy Tax Cheats / Sam Pizzigati
2. Cheering Obama's Wise Tar Sands Choice / Bill McKibben and Michael Brune
3. Climate Insurance / Julia Olmstead
4. Dollar Democracy / Tim Butterworth
5. A Zero on the Home Front's Richter Scale / Donald Kaul
6. Afghanistan's Poppy War / Jim Hightower
7. Fukushima Is So Yesterday / William A. Collins
8. Endless War / Khalil Bendib

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Interview with Roe v. Wade Lawyer Sarah Weddington

By Martha Burk, January 20, 2012

January 22 marks the 39^th anniversary of Roe v. Wade, the landmark Supreme Court decision that legalized abortion in the United States. That ruling has been called the most significant of the 20^th century. Certainly it was the most significant for women.

The case was argued by a 27-year old female lawyer from Texas — Sarah Weddington, in her first appearance before the Court. Female lawyers were so rare in those days that the Supreme Court lawyers lounge didn't even have a ladies room. There were no female Supreme Court justices. Weddington faced a wall of older white men.

Almost 40 years later, Sarah Weddington is still a tireless advocate for women. She now teaches leadership at the University of Texas at Austin, writes and speaks nationwide, and continues to educate young women and men on rights and responsibilities, and the fragile nature of progress without vigilance. I took a look back (and a look forward) with her last week on my radio show, Equal Time with Martha Burk. Here are some highlights:

MB: When you argued the case, you were a young inexperienced lawyer. Were you scared?

SW: Well, yes. I cared so much about the result. I was the only person that would be allowed to speak to the Court for the plaintiffs, asking them to overturn the restrictive Texas law. So it was fear-invoking, awe-inspiring, and something you just want so much to win you can taste it.

MB: You won the case 7-2. It seems like every decision that comes out of the Court now is 5-4. Is the Court more politicized now than it was then?

SW: I think it definitely is, particularly on the issue of abortion. Now you have several judges who are very strongly in favor of Roe v. Wade, but you also have several who are strongly against. We have two women judges that we're not absolutely sure what their position is going to be. They didn't really talk about it in their confirmation hearings, and the Court hasn't had a case [on Roe] since they've been on it.

MB: You did something very unusual when you testified against Clarence Thomas. You brought a picture of a pregnant Thomas to the confirmation hearing.

SW: Yes. He had made some comments that were so outrageous and controversial, and I was trying to say that if he had ever been in the position to be pregnant, he would have much more sympathy and understanding of the way women feel when they're pregnant and don't want to be. There are so many in such dire economic straits — many couples who both have to work to take care of their families, and there is no day care. If Thomas could appreciate the position so many are in, he would understand why it should not be his decision, it should not be the government's decision. They should have a right of privacy on when to continue and when to terminate a pregnancy.

MB: Did the case hang primarily on the right to privacy?

SW: Yes. We had in our Supreme Count packets these documents from previous cases where the Supreme Court had said there is a right to privacy in the use of contraception. We were trying to get them to pull that rubber band a little wider, and say it also covers the decision of whether to continue or terminate a pregnancy. But when you argue a case before the Supreme Court you will argue anything that you think might be possible, so we had many [other possible arguments], in other words several parts of the constitution that might apply.

MB: It seems the opposition is no longer attacking the right to abortion head on — they're concentrating more on onerous restrictions — waiting periods, mandatory sonograms, clinic size requirements and the like.

SW: There is a real split in the opposition. Most of the opposition in recent years has not concentrated on making abortion illegal. They're waiting for the Supreme Court to change so they can win. [In the meantime], they want to make it unavailable. [These restrictions] belittle women and their families who try to make the best decision for their own situations.

MB: Given the Roberts court, do you believe a successful challenge will be argued on the privacy issue or will it be "fetal rights" or even "fertilized egg bills" trying to declare that eggs have the same rights as everyone else?

SW: Even that would probably have several [affirmative] votes on the Court. But the voters have turned down similar laws, most recently in Mississippi. So the voters have said there are some things you should not have the government deciding. I trust the voters on those cases more than I do the U.S. Supreme Court.

MB: Do you see the fervor in young people today? Or do they think we've got their rights won?

SW: I do see young people trying to help, supporting Planned Parenthood. But I'd say far greater numbers are having such a hard time just going to work, getting money for school and the like. So it's harder for them, but I wish somehow we could get their attention. Part of it is for young people to know what they have now that women didn't have before. We never want to go back to the way it was. And we really need the help of voters and of younger people to save their ability to make their own choices.

MB: You teach leadership at the University of Texas. If you could give only one piece of advice to young people today, what would it be?

SW: Leadership is about leaving your thumb print — a concept of trying to leave the world a better place for others. So I would say to young people, ask yourself, what can I do and how can I leave the world a better place than I found it.

Listen to Weddington's full interview here:

OtherWords contributor Martha Burk is a political psychologist, women's issues expert, and director of the Corporate Accountability Project for the National Council of Women's Organizations (NCWO). Follow her on twitter at @MarthaBurk.

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The Lineup: Week of Jan. 16-22, 2012

By Emily Schwartz Greco, January 16, 2012

In this week's OtherWords editorial package, Janet Redman offers a "recipe" for action on climate change and Andrew Korfhage underscores the dangers of natural-gas fracking following Ohio's recent spate of earthquakes. Get all this and more in your inbox by subscribing to our weekly newsletter. If you haven't signed up yet, please do.

1. A Recipe for Climate Action / Janet Redman
2. Uncle Sam Is Sheltering the SWAG Economy / Sam Pizzigati
3. Let's Stop Sentencing Children to Life without Parole / Everette R.H. Thompson
4. Ohio Earthquakes Underscore Fracking Dangers / Andrew Korfhage
5. What I'm Giving Up in 2012 / Donald Kaul
6. We're No. 27! / Jim Hightower
7. A Watchbird Is Watching You / William A. Collins
8. A Fracking Miracle / Khalil Bendib

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The Lineup: Week of Jan. 9-15, 2012

By Emily Schwartz Greco, January 9, 2012

In this week's OtherWords editorial package, Marc Morial offers his top 10 wishes for 2012 and Jim Hightower says that progressives will soon ramp up the battle against "corporate personhood." Get all this and more in your inbox by subscribing to our weekly newsletter. If you haven't signed up yet, please do.

I'd like to express my gratitude to everyone from Arkansas to California who contributed in response to OtherWords' year-end appeal. Your support is crucial for the operation of this non-profit editorial service.

1. Obama's New Military Strategy Doesn't Add Up / Miriam Pemberton
2. How the 1 Percent Could Do Its Share to Rebuild America / Susan Adelman
3. Animal-Rights Activists Like Me Aren't Terrorists / Lauren Gazzola
4. Get Jobless Americans Back to Work / Marc Morial
5. South Carolina on my Mind / Donald Kaul
6. Organize in 2012 / Jim Hightower
7. Climate Change Disaster Has Struck / William A. Collins
8. Tax the Rich / Khalil Bendib

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America's Skimpy Minimum Wage

By Salvatore Babones, January 4, 2012

In 2012, the 63 million Americans who depend on Social Security are getting their first cost-of-living adjustment (COLA) in three years: a 3.6 percent increase in benefits. In other words, one in five Americans are getting a raise. For the average beneficiary, this amounts to an extra $38.95 a month.

That's not much, but it's something.

For workers earning the federal minimum wage, the COLA for 2012 is…zero. Washington raised the minimum wage to $7.25 on July 24, 2009, and there it stands. There's no regular COLA for the federal minimum wage. (Eight states, which set their own minimum wages slightly higher than the federal level, are raising them in 2012.)

COLAs are necessary because inflation constantly changes the dollar's value. A dollar today isn't worth the same as a dollar yesterday. The year-to-year changes are small, but over time they add up. The Bureau of Labor Statistics estimates that it costs $4.58 today to buy what a buck bought in 1974.

Because of inflation, payments for government benefits can't be set once for all. Most federal programs have some kind of built-in mechanism to update dollar amounts for inflation. For Social Security, benefits have been indexed to changes in the Consumer Price Index (CPI) since 1974.

No Adjustment System

While federal benefit programs like Social Security are indexed for inflation, the federal minimum wage isn't. It only gets adjusted whenever Congress and the White House get around to it. As a result, the minimum wage has only increased seven times in the past 30 years.

Back in 1974, when COLAs for Social Security were first indexed for inflation, the federal minimum wage was $2 an hour. If the minimum wage had also been indexed to the CPI, the inflation-adjusted minimum wage today would be $9.16 an hour.

If the federal minimum wage had been updated since 1974 using the Social Security yardstick, it would now stand at $10.74 an hour.

In other words, after adjusting for inflation minimum wage workers today are paid less — about 26 percent less — than they were in 1974.

But that's not the end of the story. The Social Security COLA is an adjustment made for people who are already receiving benefits. People's benefit levels are determined at the point of retirement by the average wages they earned over the course of their working lives.

Because of inflation, it's not fair to lump wages earned in the 1970s with wages earned in the 2000s. The earlier wages have to be adjusted to make them comparable with recent wages. But the Social Security Administration doesn't use the CPI for this purpose. It uses something called the Average Wage Index (AWI).

The AWI is exactly what it sounds like. It's an index of the average wages paid in any given year. Because wages tend to go up faster than inflation, the AWI goes up faster than the CPI.

The Social Security Administration uses the AWI instead of the CPI because the CPI doesn't capture changes in living standards over time. The CPI adjusts for changes in the cost of living, but it doesn't adjust for changes in the quality of life. Simply put, we expect people to live better in 2012 than they did in 1974.

How about $10.74 per Hour? $14.41? $26.96?

If the federal minimum wage had been updated since 1974 using the Social Security AWI, it would now stand at $10.74 an hour. That's quite a bit more than the $9.16 an hour it would be if it had been updated for inflation using the CPI. It's a whole lot more than today's $7.25 an hour federal minimum wage.

A very strong case can be made for a $10.74 minimum wage, which is only 50 cents higher than San Francisco's CPI-adjusted minimum wage.

But that's not the end of the story. The Social Security AWI is based on the changes in people's average annual wages over time. Wages, however, have not kept pace with rising economic prosperity.

Since the 1970s ordinary workers' wages have failed to rise along with the economy as a whole. The massive rise in non-wage income (dividends, interest, and capital gains) has made workers' wages a smaller and smaller slice of the overall pie. America's total personal income per capita — including income from all sources — has risen much faster than the Social Security AWI.

Between 1974 and 2011 the AWI rose a cumulative 17 percent (adjusted for inflation). Per capita personal income, on the other hand, rose 57 percent (adjusted for inflation). Had the minimum wage been indexed to per capita personal income growth starting in 1974, the minimum wage today would be $14.41 an hour.

That's a far cry from $7.25.

By today's standards $14.41 an hour might sound like a lot for a minimum wage, but it doesn't have to stop there. At the top 1 percent of the American income distribution, average incomes rose 194 percent between 1974 and 2011. Had U.S. minimum wages risen at the same pace as U.S. maximum wages, the minimum wage would now be $26.96 an hour.

The difference between $7.25 an hour and $26.96 an hour shows just how much inequality has increased in America over the past four decades.

An Inequality Indicator

Inequality has risen across the developed world in recent years, but nowhere as much as in the United States. Incomes are higher for the top 1 percent in America than anywhere else in the world. And the rest of the world's developed countries in turn have much higher minimum wages.

In Canada, the minimum wage is between 9 and 11 Canadian dollars, depending on the province or territory. That's between $8.59 and $10.50 in U.S. dollars. These figures and the figures below are based on average exchange rates for the three year period 2009-2011.

In the United Kingdom, the minimum wage is £6.08, or about $9.56. In France, it's €9.19, or about $12.44. In Australia, the statutory minimum is A$15.51, or about $14.20, but very few workers earn so little. The standard wage for fast food and other service jobs is A$17.03, or about $15.59.

In all these countries, minimum-wage work also includes benefits like paid sick days and government-sponsored universal health insurance.

So how high should the U.S. minimum wage be? It's currently $7.25. Adjusted for inflation using the CPI it would be $9.16. Adjusted for wage growth using the AWI it would be $10.74, similar to the minimum wages found in other countries.

On the other hand, if the minimum wage had grown along with personal income overall, it would now be $14.41. That would put us on the high end of international comparisons. Once upon a time, America was always on the high end of international comparisons. Maybe someday we'll get there again.

Salvatore Babones is a senior lecturer in sociology and social policy at the University of Sydney and an associate fellow at the Institute for Policy Studies. An earlier version of this post appeared on the inequality.org website. www.ips-dc.org

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The Lineup: Week of Jan. 2-8, 2012

By Emily Schwartz Greco, January 2, 2012

In this week's OtherWords editorial package, Raul A. Reyes explains why Gov. Robert Bentley is considering changes to Alabama's draconian immigration law and Marian Wright Edelman says that the education cuts underway in many states are unwise. Get all this and more in your inbox by subscribing to our weekly newsletter. If you haven't signed up yet, please do.

Happy New Year!

1. Fumbling Foreign Policy / Peter Certo
2. Alabama's Immigration Aftershock / Raul A. Reyes
3. High Stakes for Immigration / Christine Gofreddo
4. Education Cuts Aren't Smart / Marian Wright Edelman
5. Losing My Cool / Donald Kaul
6. Shoveling America's Wealth to the Top / Jim Hightower
7. Disenfranchising Voters is Un-American / William A. Collins
8. Voting Rights Obstacles / Khalil Bendib

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The Lineup: Week of Dec. 26, 2011- Jan. 1, 2012

By Emily Schwartz Greco, December 26, 2011

As 2011 draws to a close, OtherWords wishes you and your families a happy holiday season.

In this week's editorial package, Wenonah Hauter explains why you should resolve to avoid genetically engineered foods in 2012, Jim Hightower cheers the reappearance of New York's state bug, and Donald Kaul sums up the evidence against the Iowa caucuses serving as an electoral weathervane. Get all this and more in your inbox by subscribing to our weekly newsletter. If you haven't signed up yet, please do.

OtherWords commentaries and cartoons run in at least 275 newspapers across the nation and dozens of websites. If you're one of the many readers who eagerly await Donald Kaul's weekly column, or a newspaper editor who would panic if we suddenly stopped showing up in your inbox, please make a tax-deductible contribution today.

We're seeking new sources of support that will enable us to continue our distribution of bold, newsroom-ready commentaries and cartoons free of charge. Any amount you can spare will make a big difference.

1. Two Cold War Milestones / John Feffer
2. Defending the Ballot Box / Leslie Watson Malachi
3. New Iran Sanctions Would Do More Harm than Good / Andrew Carpenter
4. Resolve to Keep Science Experiments off Your Dinner Table in 2012 / Wenonah Hauter
5. Reading Frog Entrails / Donald Kaul
6. Three Cheers for the Nine-Spotted Ladybug / Jim Hightower
7. Runaway Spending Cuts / William A. Collins
8. Engineered Foods / Khalil Bendib

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