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Saving Young People From Themselves – Steve Rattner Saving Young People From Themselves

Saving Young People From Themselves

Posted: 13 Apr 2014 11:38 AM PDT

Originally published in the New York Times.

RETIREMENT is a financial obligation that today’s younger generations are not handling well. That may be through no fault of their own — they suffer from lower incomes, after being adjusted for inflation, and student debt that makes it a struggle to save. But regardless of the reason, the failure to save for retirement is setting up Americans in their 20s and early 30s for financially stressed golden years.

The statistics are startling: Only 43 percent of eligible workers under 25, and 62 percent of those between 25 and 34 participate in 401(k) plans, compared with 70 percent or more of those over 45. And the young contribute less — 4.3 percent of income for those under 25 and 5.5 percent for ages 25 to 34. In contrast, Americans between 55 and 64 direct 8.7 percent of their incomes to these plans.

Skimpy retirement assets might be manageable if they were being offset by other wealth accumulation. But that hasn’t happened. In fact, adjusted for inflation, members of Gen Y — those born after 1980 — are poorer than their parents were at similar ages.

We should address this looming crisis via a radical restructuring of our retirement plans, including mandated savings.

While the saving problem may be acute for young people, it’s hardly limited to them. After rising during the financial crisis, the overall savings rate of Americans has once again declined to paltry levels. For those who have saved and invested in equities, the surge in stock market prices since the recession ended has helped, which has pushed up the value of retirement holdings.

But in an unfortunate irony, many millennials, who watched share prices collapse in 2008, then steered clear of the market, thereby missing out on its rise. Typically, these young Americans keep about half of their portfolios in cash — not a sensible long-term investment strategy.

Earlier this year, to take a stab at addressing the retirement issue, President Obama proposed a new form of Individual Retirement Account that would allow Americans with household incomes below $191,000 to put aside money that would accumulate tax free. Unfortunately, the Obama idea is only a symbolic and inadequate gesture. For one thing, its cap of $5,500 per year is too small, and it lacks automatic enrollment or mandatory employer-contribution.

For another, contributions would initially be invested at low Treasury rates. Younger workers should be investing mostly in equities, which, over time, should provide higher returns.

Under the Obama plan, when an individual’s account reached $15,000, funds would be moved into an investment offering from the private sector, which would confront people with the same daunting and unfamiliar choices that face holders of 401(k)s and Individual Retirement Accounts.

A better idea, but still offering only marginal improvement, is the one proposed annually by the president and ignored annually by Congress: requiring employers who do not provide 401(k) programs to offer automatic enrollment in I.R.A.s.

I’d love to see the restoration of defined benefit pensions, which combined automatic saving and sensible, long-term investment strategies. But that’s not going to happen. So at the least, we should take the responsibility for managing retirement funds away from ill-equipped individuals.

To that end, Senator Tom Harkin, Democrat of Iowa, has proposed a plan that would offer a more certain retirement benefit than existing individual plans provide, together with automatic enrollment, universal coverage, portability from employer to employer and professional management.

However, Senator Harkin’s plan has its own flaws — it doesn’t require any employer participation, and participants would be allowed to reduce their contributions or opt out entirely.

The best solution would take up the question of mandated savings. I understand that in today’s world of stagnant incomes, forced savings mean less money for individuals to spend now. But would we seriously prefer that our children become impoverished senior citizens? The approach I like is Australia’s superannuation program, which requires that 9 percent of workers’ pay be diverted into retirement accounts. Tax incentives are also provided, to encourage additional deposits.

The superannuation funds collectively have $1.7 trillion in investment assets. Adjusted for population, that’s the equivalent of $25 trillion for the United States, over twice what Americans have parked in 401(k)s and I.R.A.s. That’s an idea worth considering.

Young Americans are on track to be worse off in retirement than their parents. Let’s not just sit by and watch that happen.

Saving Young People From Themselves.

America in 2013, as Told in Charts

One of my favorite things about there being a “New Year” is that people get a feeling that they can better themselves, and start over somewhat. In order for the yearly reset button to be worth anything at all there must be need for change, and thus we have a reason to ask ourselves about the past and what should stay the same, as well as what needs to change. This article by Steve Rattner addresses our nation with plenty of wonderful words, but even better he also does so with charts! I hope that you enjoy this, and if you don’t I beg of you to kick yourself.


America in 2013, as Told in Charts

Posted: 31 Dec 2013 09:45 AM PST

Originally published in the New York Times.

Looking back on 2013, many of the economic and political themes seemed familiar: a weak economy. Growing income inequality. Gridlock in Washington. Partisan wrangling over fiscal policy. But others, like the disastrous rollout of the Affordable Care Act website and the government shutdown, were new or at least revivals. Below are 10 charts to illustrate a depressing first year of President Obama’s second term:


Not only did trends of recent years continue in 2013 – particularly the diverging fortunes of the rich and everyone else — but in some ways they accelerated. The stock market, as measured by the Standard & Poor’s index, was up a stunning 32 percent (through Dec. 27). Corporate profits rose to a record $2.1 trillion. Meanwhile, incomes remained nearly flat and jobs tallies grew slowly. Through Oct. 30, earnings were up just 1.4 percent, an even smaller increase than in 2012. The only relative bright spot for the average American was housing; thanks in part to the aggressive efforts by the Federal Reserve to hold down interest rates, sale prices of homes were up by 13.3 percent in September, compared with a year earlier.


Economic growth — a likely increase in gross domestic product of just 1.8 percent in 2013, after adjusting for inflation — was also unbalanced in other ways, particularly the impact of the government. The nation’s quickly falling deficit (it dropped from $1.09 trillion to $680 billion in a single year) cost dearly in economic activity. Spending by cash-strapped consumers and investment by skittish businesses both grew at slightly below customary rates. A flat-lining Europe dented President Obama’s pledge to double American exports by 2015. On the other hand, home building and related residential activity, depressed since the onset of the financial crisis, provided a second annual lift to the economy.


Employment remained an overarching problem. While job growth has picked up steam in the last few months, the fall’s higher pace of job creation – around 200,000 per month – would still not be nearly enough to bring unemployment down to pre-recession levels. According to calculations by the Brookings Institution’s Hamilton Project, even if the 200,000 jobs per month rate were maintained, the unemployment rate would not fall to the November 2007 level of 4.7 percent for another five years.


Not only has the job recovery been sluggish, but also a disproportionate number of those that have been created have been in lower wage occupations, such as retail clerks and fast-food workers. And that trend is projected (by the Bureau of Labor Statistics) to continue; using a simple average, the 10 job categories expected to add the most jobs during the current decade boasted a collective median wage of $32,386 in 2010, roughly $15 per hour and far below the United States median of $51,892 at the time. Seven of the 10 categories pay below this average. Note the conspicuous absence of manufacturing; it may be recovering, but it isn’t what is driving new jobs.


Wage increases haven’t been paltry because the efficiency of the American worker has flagged; indeed, productivity has continued to chug along. But those productivity gains have simply not been passed on to workers. Between 2000 and 2012, productivity rose by 22 percent while wages increased by 7.7 percent. The divergence was particularly great over the last three years of that period – productivity up 4.6 percent and real wages down 1.1 percent. For this failure of the American worker to be rewarded for his growing output, blame a variety of factors, perhaps most important, globalization, which has allowed companies to move production to whatever part of the planet offers the lowest cost labor. In that respect, American workers remain in a race to the bottom.


The troubles with the Affordable Care Act’s rollout sure grabbed daily headlines this fall. But throughout the commotion, little mention was made of the most fundamental aspect of the law: the way in which it raises nearly $2 trillion over the next decade — mostly from wealthy individuals and health care providers — and uses the money to fund the largest expansion in insurance coverage since Medicare was created nearly 50 years ago. As shown above, the end result should be better health care options for those closer to the bottom end of the income scale, through the Medicaid expansion and creation of exchanges with subsidies for most participants. The intended result: 25 million fewer uninsured Americans. Yes, this is redistribution on a grand scale, and we should all be very proud of it. But as evidenced by Obamacare’s consistently poor poll numbers, most Americans are not feeling charitable toward the less well off.


Trust in many American institutions has been declining, but few institutions have fallen so far out of grace as Congress. Last year, I showed that the previous Congress was the least productive Congress in modern times, including the famous Do-Nothing Congress of 1947-48, passing just 238 laws, 37 percent of the average of the 32 Congresses that preceded it. In 2013, the first year of this Congress, the number of new laws passed fell further, to 55 (as of Nov. 30), seven fewer than during the same period in 2011. As a result, Congress now stands dead last in approval rating among key American institutions – far below other braches of government, below news outlets, below banks and even below big business.


Congress well deserves that poll standing, in significant part because of the damage that it has done to the federal budget. The combination of Republican determination to cut spending and Democratic insistence that none of the entitlement programs (such as Medicare and Social Security) be meaningfully affected has resulted in the utterly inane policy of starving key domestic programs, including education, infrastructure and research and development. The recent budget fight and subsequent agreement did nothing to change that trajectory. As shown by the red line above, all that resulted was avoiding the worst two years of forced budget cuts to these programs; for the 10 years beginning in 2008, this important spending will rise slightly in nominal numbers but will fall by 5 percent, after adjusting for inflation.


The dysfunction in Washington has taken its toll in other important ways. Not only has business confidence been shaken, but each new political battle has also been terrifying for consumers. Back in the summer of 2011, when the United States had its AAA credit rating removed by S.&P. after it flirted with default, consumer confidence recorded the second biggest two-month drop ever, behind only the aftermath of Hurricane Katrina. A smaller decline occurred at the end of 2012 when Congress nearly went over a fiscal cliff. Beginning this past July, consumer confidence dropped to its lowest level in nearly two years as a result of the government shutdown, the A.C.A. problems and related battles. Now, a two-year budget nearly in hand, Americans’ moods seem to have improved. At a time when we need consumers to spend (prudently), these periods of faltering confidence have real economic consequences.


In contrast to the mood in most of the country and the still slow economy, Silicon Valley is partying again, albeit not quite like 1999. The Facebook initial public offering in May 2012 helped usher in a resurgence of excitement among investors for anything that looks like a sexy new high-tech service. This year’s poster child I.P.O. was Twitter, which set a new record of one kind among recent major technology I.P.O.’s: its valuation of more than 28 times its revenues. That didn’t daunt investors; the stock promptly more than doubled and now trades at 65 times revenues. (Of course, there are no profits.)

What is Economics / Supply and Demand? (Short Videos)


As I personally enjoy discussions about current events and what is in fact happening, and philosophical conversations about how the world should be, one of the most common phrases I hear injected in conversation intended as a trump card is the word “economics”. And when people start talking about economics they almost surely will use the phrase “supply and demand”. As my undergraduate degree was in economics I think it’s great that people care about what I studied, but I have found that many times people don’t understand what they’re saying… So, I decided I might just post these quick videos about economics, and the principles of supply and demand. I really enjoy this guys YouTube page, and if you would like a simplified lesson or two about economics and have two or three minutes you might want to watch some of these videos.

What is Economics?

Supply and Demand

The Exploited Laborers of the Liberal Media

I generally tend to enjoy Vice as a news/countercultural voice because it marches to the beat of it’s own drum. I found this article in particular to be interesting as it challenges the cultural norms of believing that the community that has been crying so heartily about stagnant wages as been so blind to it’s own hypocrisy. I have had a lot of these basic thoughts myself over the years, and I would imagine that anyone who has worked for free, supported someone who worked for free, or just known someone who worked for free could sympathize with this philosophical question of when we cross the line of exploitation. What do you think about this?

The Exploited Laborers of the Liberal Media


Photo courtesy of Intern Labor Rights

Editor’s note: For years, VICE used part-time unpaid interns—a practice that we recently halted. We currently pay interns $10 an hour and limit them to 20 hours a week during the school year and 25 hours a week during the summer.

I was 21 years old when I took out my earring, combed my hair, and tried concealing my distaste for power and Washington, DC, in order to ask questions at press conferences. It was the summer of 2006, and I had just left college to work for a small, do-gooding nonprofit that covered Capitol Hill for public radio.

I went through the whole experience of being a journalist in the nation’s capital: attending deadly boring policy luncheons, interviewing near-dead lawmakers and dead-inside lobbyists, and dying a little inside myself every time I saw my work “edited”—turned into shameful garbage—before going on air.

Like any other reporter, I pitched stories at morning meetings and then did the legwork to put them together, in the process learning the job. While my gut impulse at first was to righteously confront the powerful with strident questions highlighting their logical inconsistencies and factual errors, I soon found it was often smarter to affect an earnest demeanor just a hair shy of sarcastic. You need to let the person being interviewed explain why he is terrible, which is more easily done when he thinks you are stupid or on his side.

What I did looked and felt like an entry-level job in the media. And I enjoyed it—I liked going up to any old white guy in a suit and asking him to explain in his own words why he’s destroying the country. I felt as if I had sort of made it, as much as an English major can. I wasn’t living at home, I got to carry a microphone, and my work was broadcast over the radio. To an outsider looking in, I almost looked a respectable person.

The problem was I wasn’t being compensated for any of that work or my veneer of respectability. What I did every day might have appeared to be a job, but I was labeled an “intern,” meaning I got paid in experience and networking opportunities, not anything tangible. I made rent by taking a part-time job serving mediocre Mexican food across from the National Press Club and asking Washington Post columnists if Pepsi was OK instead of Coke. Periodic calls to Mommy and Daddy also helped. That was what was expected of me—I’m part of a generation conditioned to believe that if you just work for free hard enough and long enough, you can become president some day.

I was fortunate, all things considered. My labor was being exploited by a boss who took in $100,000 a year, but I was privileged enough that I could afford the exploitation for a few months, sort of. I had parents who could kick me some cash every now and then with only moderate-to-severe grief. And it hadn’t yet hit me that I had to pay back all those student loans.

The problem with unpaid internships is that interns are people, and in capitalist economies people generally must work for money in order to obtain food and shelter. While I managed to pull it off, a lot of those who want to become journalists aren’t lucky enough to be born white and middle class. My family had enough money to support my stupid “dream,” while others, many no doubt more talented and deserving than I, were barred from even trying because they were too poor to work for nothing.

America’s leading liberal periodicals are aware of the obstacles to advancement the less privileged face in our decidedly not meritocratic society. Indeed, they often provide excellent coverage of the class war, from union-busting at Walmart to the fight for a living wage at fast-food chains. At the same time, though, many of them are exploiting workers in a way that would make corporate America proud: relabeling entry-level employees “interns” and “fellows” in order to dance around US labor laws.

Paying people little to nothing because you can—a practice aided by the awfulness of the job market and the desperation of people trying to make it in “glamour” industries like journalism—is both exploitive and discriminatory, but many good liberals do not appear to recognize it as such, even as they decry that behavior elsewhere.

Photo via Flickr user Joel Gillman

Do as I Say, Not as I Pay

Robert Reich served as labor secretary under Bill Clinton and is outspoken in his support for a living wage. But when I asked him about the trend of entry-level jobs being relabeled “internships” and being stripped of the pay, benefits, and legal rights they once offered recent college grads (by some estimates, half of the estimated 1.5 million interns in America are unpaid), he professed ignorance.

“This is not a topic I’ve given much thought,” said Reich.

Reich is a busy guy, but he should think about the issue more. His political advocacy group, Common Cause, is only one of the organizations he has a hand in that relies on free or near-free labor. In a recent listingThe American Prospect, a magazine founded by Reich and other veterans of the Clinton administration, announced it was looking for editorial interns to assist “with fact-checking and research.” The interns will be “encouraged to contribute editorially and participate in meetings in addition to pursuing their own projects.”

Sounds good, but, “This is a full-time internship and comes with a $100 weekly stipend,” according to the listing. That comes to about $2.50 an hour, or “not nothing” if you are a glass-half-full type. However, there is a catch: “Interns who receive full course credit are ineligible for the weekly stipend.”

The American Prospect did not respond to a request for comment, but a writer for the magazine explained the inequality-compounding problem with unpaid, for-credit work in 2010: “If you can’t afford to work for free, you certainly can’t afford to shell out money for tuition on top of that.” That, of course, is what the Prospect is asking from its interns. And that publication isn’t the only one exempting its own interns from its concern over exploited workers.

“Be Our Hero” 

Last year, progressive magazine Mother Jones, named for a 20th-century radical who campaigned against child labor, ended its internship program. Though editor Clara Jeffery had previously written that the magazine “couldn’t live without our interns,” using unpaid and low-paid labor was rapidly becoming controversial in the media world, so the magazine decided to be proactive. No longer would young people be expected to work long hours for crumbs as lowly “interns”—they would now be “fellows.”

“We used to call some of these positions internships,” the magazine explains on a job listing. “But in late 2012 we changed the title because this is no entry-level internship… You should be ready to drill down into complex research, fact-checking, and strategic projects and have the reporting bona fides or other relevant experience to show you’re ready.” And you should be prepared to do it full-time for six months.

“We’ll work you hard and demand your best,” the magazine says. “And in the end you’ll learn a ton, and be our hero.”

Uh oh.

The fellowship offered by Mother Jones is neither an internship nor an entry-level job—“No coffee or laundry errands here!” says the magazine—but the compensation could fool you: “Fellows receive a $1,000 monthly stipend.” Assuming a 40-hour workweek (many journalists work much longer hours than that), that means a fellow at Mother Jones earns less than $6 an hour in a state, California, that just decided to raise the minimum wage to $10. In San Francisco, where the magazine is based, $1,000 a month isn’t enough to pay for both food and shelter.

“It’s not easy, but our fellows… make it work,” said Elizabeth Gettelman, a spokesperson for Mother Jones. “Some supplement their incomes with freelance work, and they find shared housing in the Bay Area that they can afford. But we are very aware of the financial challenges they face.” She added that the magazine is always looking for ways to “improve the level of financial support.” After six months, she notes, a fellowship at Mother Jones can be extended the rest of the year at a rate of $1,400 a month.

That’s a raise, but it’s still not enough. In California, a single adult needs to earn more than $1,900 per month “to make a secure yet modest living,” according to a living wage calculator on the Mother Jones website. Work a full year as a fellow at the magazine and you will make $14,400—or put another way, about $11,000 less than you will need to support yourself in a place that enjoys the highest rents in the nation. When it’s all over, you may get a better title on your resume, sure, but you will also lose the title to your car.

One former MJ intern who spoke to me on the condition of anonymity told me they “slept on an air mattress for six months while I worked there because I couldn’t afford a real one.” Another former intern said, “During our first meeting with HR at Mother Jones, we were advised to sign up for food stamps.”

It must be said that MJ appears to treat its nonfellowship workers pretty well—about half of their employees, including some editors, belong to the UAW union. And as with most major publications, the names at the top of the masthead are very comfortable. Editors Monika Bauerlein and Clara Jeffery each make more than $167,000 a year, while chief operating officer Madeleine Buckingham makes $159,000.

Photo via Intern Labor Rights

Are You Experienced?

Employers will usually say they offer internships as a form of training to those who lack the experience to get hired. They say this because they are legally required to in order to justify paying people below minimum wage. But at the liberal online news magazine Salon, internships are not for those just starting out.

“Some professional experience is required,” says a listing for an editorial internship at Salon. If you get that job, you’ll be helping “research, report, write and produce our news and culture coverage,” which sounds a lot like a job. The position, based in New York City, is unpaid.

Though it does not pay its professionally experienced interns a dime, Salon (which has published my work in the past) has had the chutzpah to run a number of stories on the plight of unpaid workers, such as, “‘Intern Nation’: Are We Exploiting a Generation of Workers?” and “Unpaid and Sexually Harassed: The Latest Intern Injustice.” The company did not respond to a request for comment.

The New Republic is another liberal outlet with a problematic labor record. Owned by a co-founder of Facebook worth more than $600 million, the magazine is currently hiring interns whose responsibilities include “conducting research for editors,” as well as “pitching and writing blog posts and web pieces.” Previous experience in journalism is “preferred, but not imperative.”

TNR used to advertise that its internships “are full-time, unpaid, and based in the DC office,” but that language was removed soon after the magazine became aware of this story. Spokesperson Annie Augustine told me that despite the change in language, “there has not been a change in policy.” However, she added that “interns are given the option to work flexible hours so they can take part-time jobs.” She also pointed out that the magazine offers a separate “reporter-researcher” program that comes with benefits and a $25,000 salary, though that is still a couple grand short of a living wage in Washington, DC.

Augustine did not explain why the magazine does not pay all its full-time employees, but the publication has written about the issue before—in a piece published this past summer, TNR editor-at-large Michael Kinsley mocked the idea that uncompensated interns supplant paid employees and deserve to be paid themselves. “Right,” wrote Kinsley. “Why, just the other day we saw Rupert Murdoch wielding an allen wrench over the pieces of an Ikea desk,” which the intern who copy-edited his piece probably found uproariously funny. (Another piece recently published by a paid contributor to the magazine: “Yes, Young Writers Should Give Their Work Away for Free.”)

TNR has the money to pay interns but doesn’t, likely because there is an established culture in the media world that treats working for free as the cost of admission. And when everyone else is doing it, why not? And so Harper’s is looking for interns to “work on a full-time, unpaid basis for three to five months”; the Seattle-based YES! magazine is hoping to hire an “online reporting intern” to work up to six months for free (though it does offer housing); and the Washington Monthly, which claims to be “thriving” thanks to “generous long-term support from foundations and donors,” is offering internships that are “unpaid and can be either part-time or full-time.”

“The reason we don’t pay interns is that we’re a small nonprofit operation and we can’t afford it,” explained Paul Glastris, editor of the Washington Monthly. “We think it’s a valuable experience—it certainly was for me, having started in this business as an unpaid intern at the Washington Monthly.

That internships provide interns experience is not in doubt; so do most jobs. And there’s no disputing that internships can lead to more lucrative work down the line; so do most jobs. The issue is that asking people to work for free is exploitive—and no one would do it were they offered a paying gig elsewhere. When left-leaning outlets in particular refuse to provide a living wage for the people producing and editing their content, it’s not a good look. In These Times, which has published work by left-wing icons such as Noam Chomsky and Barbara Ehrenreich, is currently hiring interns to do everything from editing to fundraising—but none of those funds are set aside to pay those raising them. On its official Twitter account, the publication has said, “Interns must unite to stop the trend toward free labor becoming the norm,” but it did not reply when asked if such a campaign should include its own employees.

Meanwhile, Democracy Now!, the venerable progressive broadcast hosted by journalist Amy Goodman, requires interns at its new, LEED Platinum–certified office in Manhattan to work for free for two months, for a minimum of 20 hours a week, after which “a $15 expense allowance is provided on days you work five or more hours.”

“They really held that $15 over us,” said one former intern, who added that “they told us pretty explicitly on our first day that the internship wouldn’t lead to a job.” According to the source, who requested anonymity, interns were required to fill out daily accounts of the “results” they achieved each day. (“Wrote headline tweets for the day, monitored stream from last night, listened to interviews for quotes”; “Got a retweet from Lupe Fiasco (rapper).”)

In 2011, Democracy Now! asked its $15-a-day employees to work the program’s 15th anniversary gala, a major fundraiser. Interns were asked to “greet and thank guests, check their coats, make sure the event goes smoothly, and help clean up,” according to an email obtained by VICE. “We will provide you with a delicious pizza dinner, but ask that you refrain from eating the catered dinner at the event.”

Back then, interns did not have to wait two months to get their $15 stipend, which probably made the Domino’s go down easier. But while entry-level staffers at Democracy Now! are paid less than ever, not all have shared in the sacrifice: Goodman made more than $148,000 in 2011, twice what she took home in 2007—and that doesn’t include income from book sales or speaking engagements.

Requests for comment were not acknowledged by Democracy Now!.

Raising the Bar

“When one restricts internships to people who can afford to work for free, you institute a form of economic-based discrimination,” said Richard Tofel, president of ProPublica, an outlet that focuses on investigative journalism. ProPublica pays all of its interns $700 a week for the simple reason that $700 a week (which works out to around $35,000 a year) is “what we thought was a competitive wage” for an entry-level journalist in New York City.

ProPublica does not claim to be liberal or progressive. But Tofel, a former assistant publisher at the Wall Street Journal, appears to believe—sort of radically for his industry—that people who work should be paid a wage, even if they are in their 20s and haven’t yet suffered through a crucible of unpaid internships. The experience these internships offer is great, he said, but not enough.

“I don’t think there’s any question that unpaid internships can be enormously beneficial to interns,” said Tofel. “But that’s not the issue.”

Experience is great and can open doors, but unpaid and low-paid internships can also slam doors shut. Failing to pay young journalists a decent wage is effectively a way of saying that those too poor to work for nothing need not apply. That socio-economic filter leads to a pool of journalists—even at good, upstanding progressive publications—that is wealthier and whiter than the public as a whole. And that hurts the final product.

“Any time you have a more diverse workforce, you get better coverage,” said Tofel. “Any time you have a less diverse workforce, you get worse coverage.”

Liberals should know all about the virtues of diversity and providing ways for poorer people to climb into positions of influence. Yet maddeningly, they continue to exploit the idealistic people who are willing to give their labor away for free, which isn’t just wrong, it hurts the mission of a liberal news organization.

Money is not an excuse. If you set out believing you are obliged to pay your employees, you find a way to do it. The progressive Utne Reader manages to pay its interns minimum wageDissent magazine just started paying their college interns $2,000 a semester, which comes out to about $7.80 cents an hour by my calculations. And the left-wing pays every intern $10 an hour. None of these places are rolling in money.

Other publications have had their hands forced by an increasingly emboldened class of young journalists who have presumably taken their employers’ liberal rhetoric to heart. Earlier this year, interns at The Nation penned a letter to their bosses lamenting the fact they were asked to work full-time for five months while receiving a measly $150 a week, “an impossible prospect for many who are underrepresented in today’s media.” The magazine was sufficiently shamed that it announced it “took their concerns seriously” and would soon start paying minimum wage.

That’s a start, paying people the bare minimum required under US law. But try living off that anywhere in America, much less the ultra-expensive cities where most of these publications are based. You can’t, even if you turn to the generic cat food.

So here’s a challenge to the liberal media: If you are in favor of a living wage and oppose discrimination against the poor, let’s see that reflected in your newsrooms, not just on your blogs. Support workers, including the young ones who work for you, by insisting they get a fair wage for a fair day’s work. There is no justification for not paying people for their labor—that’s why so many lefty publications did not even offer a defense when I asked for one—and failing to do so means failing to live up to one’s stated liberal ideals. It also just sets a bad example. If the bleeding hearts aren’t ashamed enough to pay their workers, why should anyone?

Charles Davis is a writer and producer in Los Angeles. His work has been published by outlets including Al Jazeerathe New Inquiry, and Salon.

More on interns:

I Interned for Pauly Shore (and It Really Sucked)

One of Our Interns Chatted with the Founder of ‘Intern’ Magazine

The Overtime Secret


Risk Pools: Why It’s Dangerous to Swim in the Shallow End


With the government shutdown well underway, and the debt ceiling looming, seemingly many people are still very confused about the Affordable Care Act (Obama care), and it seems like a good time to address what the actual philosophical principles are that are being disagreed upon. Sometimes it can be difficult to recognize amongst such bitter fighting that there are ideas.

This fight has essentially been over the the government mandating that people buy private insurance, which is a law and has been ruled constitutional so long as it is considered a tax. This mandate as a philosophical idea is supposed to manipulate risk pools. You see, we seem to live in a world where it is becoming essential for us to have insurance for everything, and I personally don’t love that, but it’s apparent. The basic reason for this in regards to health is that as a society we aren’t willing to watch those who run into health bouts lose everything for having misfortunes. This is insurance at its most basic elemental, as insurance is a risk buffer. It’s like gambling, sometimes people will make a bet and then they will actually make a bet against that bet (like bonds and derivatives on Wall Street) so that they can minimize their probability of something bad happening.

One key component about risk pools is that the larger they are the more stable they are likely to be. Imagine the difference between throwing a rock into a lake rather than a bathtub, the lake is just affected less on the whole. Now this is oversimplified, but it paints a picture that I believe is somewhat helpful to those trying to understand why anyone would want this system, or even a single payer system.

The Affordable Care Act demands that we get private insurance, and as I wrote about recently they will be subsidizing some plans to make them “more afforadable” and thus those who currently don’t pay for healthcare will pay something, not to mention they will have insurance policies and receive better care that will prevent them from getting super sick and becoming an expensive part of the risk pool… The subsidized policies will also enlarge the risk pools and voilà, that should make for a more competitive pricing system (as we all know we could use considering the price of healthcare). As far as I can tell these 2 things should help with the reduction in the price of healthcare, other than one external factor, which is that doctor’s offices will get more crowded with people who were mostly getting care at the emergency room, and with a higher level of Scarcity doctors will be seeking higher paying clients / costumers. And thus healthcare will either become much more expensive all together, or some doctors will lower their prices to be more competitive.

Now the last factor that I find rather interesting about the cost debate of the Affordable Care Act is the outlawing of preexisting conditions for insurance coverage. This may seem like it would guarantee a larger risk pool, but one with larger (riskier/more expensive) waves. the only problem with this idea is that preexisting conditions cause 1 of 2 probable outcomes: we as a society pick up their tab as they receive specific preventative treatment for their specific ailment (which we already do), or they receive more expensive emergency care and live with a lower health and quality of life (which also already happens, and we also already pay for). We already pay for those who can’t pay by way of the emergency room care. We won’t essentially be changing who we’re paying for, we will be changing what we pay for.

The question of whether or not these changes will be for the better I’m not certain that we know for sure. However, we have the most expensive healthcare in the world, and we are not the healthiest, and we’re not even close. All that to say it must be noted that we also have the most profit driven system in the world. People come from around the world to receive catastrophic and major health treatment, and we have a health system based on haves and have nots, and it’s probably rather important to figure out whether or not your comfortable with that reality. One part of that reality is that there are even selfish advantages to more people having health insurance, primarily that with larger more stable risk pools we might see our overpriced system trim down a little bit, which might greatly boost our economy, as inflationary medicine has been an overall drag on our economy. But, the question really is simply whether or not we believe that as a society a group effort can make things better in regards to our health.

How Does The Affordable Care Act “Obamacare” Shift Who Pays For Our Rising Health Care Costs?


Incase you don’t have time to read this whole post here are the high points of what we’re talking about:

– The ACA (Affordable Care Act / Obamacare) primarily raises funds through the individual mandate
– The individual mandate was invented by Republicans
– As a society we already seem to have decided that we won’t let the least among us die without emergency care
– Emergency care is less affective and more expensive then preventative care
– The idea is that we get “free-loaders” to pay something instead of nothing by offering partially subsidized insurance plans
– The insurance plans would hypothetically provide for more preventative care, and less emergency care, and they are still through the private market
– The private insurance mandate is designed to shift the cost back to those who are getting care (ei: the “free-loaders” who will go from paying nothing to something for the care that they are already getting)

There is more to all of this, so if you’d like to I encourage you to read the rest, but these are the basic ideas behind this post.

I have differing feelings about the government being involved in our lives. With that said, I think that when it comes to more integral parts of our society surviving as an organism we must take care of our health as a whole. I don’t think that people should be rewarded equally for unequal work, and I consider myself to be a genuine capitalist, but it is important to ensure that when it comes to the health of our societal unit (like our health) we must consider the true cost of living in a society that allows it’s weakest to die and blame it on their own sins. That’s essentially what we are doing when society as a whole allows people to die with negligent resources at their disposal, which do exist. Ineffective healthcare is part of the result of a system where those who can’t afford care are only patched up in the emergency for extreme problems, when they might possibly been more easily treated for less money at an earlier date.

Scarcity is when a society has been depleted of a resource that it desires, and thus the resource becomes more important and valuable amongst those seeking it. Every resource has a degree of scarcity, and many of them vary over time. One of the most unchanging “Price Inelastic” resources (and it really is too small to call it a single resource considering it’s enormous scale and scope into our lives) is healthcare. We as a society want to be healthy, and thus the demand in the market is high for healthcare – we demand “adequate” healthcare. By adequate I essentially mean that anyone can get emergency care, but not preventative care because that is for people could afford “real” insurance.

So we seem to have decided that by some means people need to have basic emergency healthcare, but that’s it. And whether or not it should be that way it is that way. Some people do not pay for their healthcare. I think that a large number of people would really enjoy the idea of getting some of these people who are having trouble paying for private insurance to have an option to at least pay something, to maybe receive partially subsidized insurance policies (as Obamacare allows for). In essence, the same people who are generally getting free healthcare, and thus driving our insurance premiums up, would be required to pay for some of their health costs. People would of course have to qualify, much like on food stamps (which I know a lot of people who I know hate), except instead of giving them something that they wouldn’t already have this policy incourages them to pay for some of what they’re already getting for free. It actually has the reverse affect of that of food stamps financially. I still have my questions about whether or not it’s a good idea, but as of now I think that it makes economic sense. With that I would like to remind everyone that this philosophical idea of mandating insurance was invented by (the heritage foundation), and first implemented by (Gov. Romney of Massachusetts) Republicans. I’m not 100 percent sure that it’s a good idea, but the outrage against it has really seemed to be just another of tribalism and group think that is the inverse of critical thinking.

This has been a bit of a rant, and I really didn’t intend to let that happen, but we need to simplify for people what it means to be governed as they are governed. There needs to be better explanations about what it means to require citizens to have health insurance, and discuss whether or not we should ever subsidize insurance, or anything for that matter. I tend to think that there might be a few things worth subsidizing, and those things are usually linked to survival and health. A large part of the care that is being mandated will not be subsidized, and that will be part of what helps fund the system that is already costing more than it’s taking in to our society. Calling for healthy people (at least currently healthy) to pay into insurance pools is designed to bring premiums down. Now whether it will truly work or not seems yet to be a mystery. And we would do ourselves a favor if we were to admit that there are multiple variables that are being changed in this experiment, not just your standard 1 for a real scientific experiment.

So, Obamacare, or at least an enormous facet of it, is underway and I’m curious what will happen. I’m pretty sure that the only way for this to work is if people who would be candidates to sign up for subsidized insurance will find out and sign up. Ezekiel Emanuel said recently on Real Time with Bill Maher that they have estimated that if at least 7,000,000 people sign up for this Obama that it will be considered a success (I’m not sure exactly what that is defined by however), and with over 8,000,000 people clicking on the site to sign up on Tuesday when it opened I’d say that number doesn’t sound all of that out of reach. Let’s also not forget that this is run through private companies being bid on and having their market produce their price.

So, here we are with a front row seat to government interventionism… How Does The Affordable Care Act “Obamacare” Shift Who Pays For Our Rising Health Care Costs? To be honest I don’t think we fully know. But having about 18% of our GDP (gross domestic product) going towards healthcare, and most of the nations that are healthier than ours pay about 7% to 10% of theirs – we pay the most for our healthcare in the world, which runs counter to a free market providing the cheapest price for the product in demand. Finding out whether or not taking the “at least have everyone pay something” approach with subsidized insurance is a good idea or not will probably take a while, and I doubt it will go away for a long time. How this program works out really will affect the future of our nation, and the world.

The New Economic Risk: Complacency – Steve Rattner

A couple of my favorite political things collided in this article: Steve Rattner, and No Labels (who I used to work for). I’d be very interested to know what kind of measures might be proposed as Mr. Rattner suggests in this article.

The world is complicated, so while reading about large often controversial topics like the ones discussed in this article I suggest attempting to observe yourself, and whether or not you have your mind made up before you read about such challenging things or not.

The New Economic Risk: Complacency

Posted: 21 Jun 2013 07:06 AM PDT

Originally published in the New York Times

With each month of steady employment growth — in May, 175,000 jobs were created — the feeling of lassitude around the issues facing the American economy takes hold a little bit more.

Amid the gathering drumbeat of pronouncements of economic optimism, most dramatically from the Federal Reserve Board on Wednesday, the feeling of dread that used to bubble up in the moments before each month’s jobs report has largely dissipated.

That’s good news, certainly. But still, the thing that has replaced our collective dread may be even more dangerous in the long run — and that’s complacency. The slowness of our economic recovery should remain our biggest national worry, particularly as that sluggishness is manifested in inadequate job totals and stagnant incomes.

For example, the Hamilton Project, a research group based at the Brookings Institution, has calculated that on the current trajectory, it would take until October 2022 for the unemployment rate to return to its level at the end of 2007, just before the recession began, when it stood at 5 percent.

That would mean nine more years in which too many Americans without steady incomes struggled to make ends meet.

Even if the rate of job growth accelerated to 200,000 per month, it would still take until late 2020 to get the nation back to full employment.

Equally concerning is the stagnation of wages. Over the past four years, the average incomes of Americans (after adjusting for inflation) have remained mired at 2008 levels. With income inequality incontrovertibly rising, that means that most Americans have suffered cuts in their purchasing power.


But here’s the really incredible part: despite these worrisome facts, Congress has been doing nothing, absolutely nothing, to address the problem.

Or of late, any of the nation’s real problems. The 112th Congress, which ended on Jan. 3, passed 17 percent fewer bills than any previous Congress since 1948 (and possibly even before that), according to the Library of Congress. And this Congress is already off to a slower start than its predecessor.


Small-government conservatives may view this as good news; the less government does, the happier they say they would be. I have a different opinion. I believe we have plenty of challenges and that it’s Congress’s job to address them.

For his part, President Obama has been faithfully unfurling proposals, including major ones during the last presidential campaign and in his new budget, released in April. And since early spring, he has tried to mobilize public opinion by journeying to places like Austin, Tex., Baltimore and Mooresville, N.C., on his “Middle Class Jobs and Opportunity Tour.”

But neither the tepid economic data nor the president’s exhortations have moved Congress. After demanding that the Senate Democrats pass a budget for the first time in four years, a clutch of important Republican senators are now refusing to participate in the next procedural step, a conference committee between the houses of Congress to reconcile their competing budget proposals.

So instead of pounding out thoughtful policy, Congress hurtles toward the next fiscal crisis — a double showdown this fall over financing the government for the next fiscal year, which begins Oct. 1, and over raising the debt ceiling that limits the federal government’s ability to borrow money to finance its budget deficit.

No one should be surprised, then, that the American people’s confidence in Congress has now dropped to 10 percent, the lowest on record.


It’s time for Congress to do something. That doesn’t mean that I’m signing up with those who advocate a Japanese-style exercise of scattering huge sums of government money willy-nilly to try to stimulate the economy. That may provide a short burst of energy, but it would compound our debt problem — yes, we still have a big one — without offering long-term relief.

Happily, there’s no shortage of smart policy programs that, for small amounts of money (at least some of which could come from trimming other parts of the budget), could address the structural problems that are holding back our jobs recovery.

For example, last week, the left-leaning Center for American Progress released an exhaustive compendium of ideas, some of them hugely idealistic (like overhauling the tax code), but others quite manageable in the short term. One such idea is to reprogram education spending to better target science and engineering — areas where the next generation of jobs is likely to emerge.

Similarly, President Obama’s latest budget provides for long-term deficit reduction while carving out additional funding for critical needs like establishing an infrastructure bank.

And yet, Congress has let these and other good ideas wither on the vine.

Maybe the solution is to borrow one good idea from Republicans. At Republican leaders’ insistence, an earlier budget deal included a requirement that lawmakers’ salaries be held in suspension if the Senate and House did not each pass a budget. The threat seemed to work: both chambers passed one.

Now it’s time to extend that concept to force Congress to do something to spur job growth and prepare the next generation of American workers — something, that is, other than the misguided sequester now in place.

Morning Joe Charts on Government Printing and Buying Money – Steve Rattner Morning Joe Charts: Fed
Morning Joe Charts: Fed

Posted: 20 Jun 2013 11:55 AM PDT

If you have time I recommend watching the video by clicking on the link below.

On yesterday’s Morning Joe, Steven Rattner discusses the growing number of bonds purchased by the Fed in its efforts to stimulate the economy. He shows how markets have reacted to Ben Bernanke’s pronouncements that the Fed will begin tapering down its bond-buying program should the economy continue to improve. Click here to view the video.

(Note: Red bulls-eyes on the last chart indicate statements made by Bernanke.)




The three dots in the chart above represent times when Chairman of the Federal Reserve Ben Bernanke has spoken publicly. The most recent example of this showed some short term turmoil on the stock market.



Elizabeth Warren Rips Regulators in Banking Committee Hearing on Illegal Foreclosures


There is something wrong with our society if a video like this doesn’t outrage virtually everyone you know… We know that the game is rigged, and we know that some people have such built in advantages that they are simply insurmountable, but when it’s put in front of us like this there had better be some outrage… Ms. Warren has been a very divisive figure over the last couple of years due to her aggressive sentiment towards financial regulations. I am sure that if many things were dumbed down for me enough I would find that I disagree with what she wants, and that she would want more regulation than I would. However, this short clip shines light on an what seems to me to be such blatantly obvious injustice that I can’t imagine why someone would agree with Senator Warren, outside inhumane greed… Does this sound completely reasonable to everyone else?

Jobs Update in the Economy – Steve Rattner (4/8/13)

Morning Joe Charts: Jobs – April 8, 2013

These are just some figures you might want to know about. There are many moving parts here, and jobs reports could be better, but let’s make sure that we note that the deficit is decreasing. This means that if people are saying that we’re increasing spending they are un/misinformed. With that said, things could be better on all sides, but they could of course be much worse.

One of the biggest mistakes we could make in looking at all of this is making political hay of the final chart. Not that it’s unfair to ask questions and make arguments about the effects of policy on jobs, but assuming that low participation by able bodied workers in the American economy is all due to President Obama is simply not wise. I’ve posted about this before, but technology and outsourcing labor has created a dichotomy in our economy, where the stock market is booming and nontechnical jobs are evaporating. This is a complicated time, and politicization of big problems like this could prevent us from actually getting past them.

1. Real Hourl Wages 2. Six Month Deficit 3. Labor Force Participation

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