The following article by Democratic strategist Robert Creamer, author of “Stand Up Straight: How Progressives Can Win,” is cross-posted from HuffPo:
Last week JPMorgan Chase’s Board approved a 74 percent pay raise for its CEO, Jamie Dimon, for 2013, a year when JPMorgan barely escaped a criminal penalty and paid $20 billion in fines and penalties for wrongdoing — much of it on his watch.
Sometimes we get numb to numbers like $20 million. To put it in perspective, in 2013, Dimon made $9,615 per hour. In other words, he made more in the first two hours of the first workday of the year than a minimum-wage worker made all year long.
There has been much debate about whether Dimon deserved his big increase in a year that the bank paid so much in fines, and narrowly avoided criminal prosecution.
Still others are outraged that Wall Street bankers whose reckless speculation lead to the collapse of the world economy — and cost 8 million Americans their jobs — should continue to be rewarded with lavish economic benefits.
But the real scandal is the fact that for more than 30 years, a tiny slice of Americans have rigged the rules of the economic game so they could siphon off all of the more than 80 percent increase in our per capita gross domestic product.
Last week the New York Times reported that even though Dimon’s massive pay package was inconceivable to most ordinary Americans: “… in the world of executive compensation, especially when viewed from the rarefied perspective of other chief executives, and more broadly on Wall Street, Mr. Dimon’s pay — and how it is determined — is not only defensible, but laudable.”
Yep. To other CEOs his $20 million salary seems quite reasonable. After all, the chairman of the JPMorgan Compensation Committee was Lee R. Raymond, former chairman and CEO of Exxon Mobil. When he left Exxon he got a $400 million retirement package — no kidding.
The Compensation Committee apparently reasoned that “in context,” Mr. Dimon’s compensation package was quite reasonable. Mr. Raymond’s successor at Exxon Mobil, Rex Tillerson, was paid $40.3 million in 2012. Leslie Moonves, CEO of CBS, was paid $62.2 million. Larry Ellison of Oracle brought home $96.12 million.
And these salaries are nothing compared with the incomes of some of Wall Street’s greatest speculators — people like John Paulsen, who several years ago made a whopping $5 billion.
What do the very rich do with all of this money?
Of course most of it is used to invest in making more money. It isn’t hard to make lots of money if you have some to start with. If you have $50,000 of savings in the stock market, just let it sit and stock prices go up 40 percent over a couple of years, you make $20,000 — not bad. But if you have a million dollars in the same stock market and expend the same effort you make $400,000.
And they spend it. According to a study by the Institute for New Economic Thinking, in 2012, 38 percent of all personal consumption expenditures were made by the top 5 percent of earners. That’s up from 27 percent in 1992. In response, the New York Times reports that “the customer base for businesses that appeal to the middle class is shrinking as the top tier pulls ever further away.” As it result the Times reports firms like Olive Garden, Red Lobster, J.C. Penney and Sears that cater to the middle class are struggling and fine-dining restaurants and retailers are thriving.
And the very rich also use their extraordinary wealth on other “critical necessities”:

• How about a Seamagine Aurora personal submarine — great for ice-diving or spotting tropical fish. It’s safe down to 3,300 feet, comes in three, four or five person designs and sells for a mere $3 million.
• Or you might want to buy a Vacheron Constantin Patrimony Traditionnelle Chronograph (watch). The advertisement for this piece says that “this Patrimony Traditionelle carries over the aesthetic cues from those dress chronographs into a modern 42 mm case size.” Sells for only $55,900. Keeps time about as well as a $22.95 Timex — and for all but the most sophisticated looks pretty much like a $250 Bulova — and certainly no better than a $8,000 Rolex. But I’m sure to someone for whom money is no object it’s worth it.
• Or perhaps you might want to stroll down Rodeo Drive in Beverly Hills and drop in on a little boutique where you could pick up a $4,000 blouse. That’s right, some people actually pay four grand for a blouse that looks for all the world like one you could get for $100 — and probably not much better than a knock off you could pick up for $50. Must be that designer name in the label.

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From a Greenberg Quinlan Rosner Research e-blast:
Voters overwhelmingly want to see the country move away from coal and toward renewable energy, and they believe the government should be taking more action to combat climate disruption, according to a new national survey for the Sierra Club conducted by Greenberg Quinlan Rosner. As a result, voters show very strong support for new EPA limits on carbon pollution from power plants, support which holds up after voters hear pros and cons about the proposal, including strong arguments from opponents of the plan on its potential impact on jobs and energy prices.
Other key findings include:

• The EPA gets very solid favorability ratings. Forty-four percent of voters give the EPA a warm, favorable rating compared to only 27 percent who give the agency a cool, unfavorable rating. By comparison, the ratings for the U.S. Congress are severely underwater (13 percent favorable, 64 percent unfavorable).
• By more than a 2-to-1 margin, voters believe that climate disruption is a serious problem and they believe that the federal government should be doing more, not less, to address it. Two-thirds say climate disruption is a serious problem, and by a 50 to 19 percent margin, voters think the federal government should be doing more to address the problem.
• Voters believe, incorrectly, that the federal government already regulates carbon pollution. A majority of voters incorrectly believe that the government currently regulates carbon pollution, while just 28 percent correctly understand that there are currently no regulations on the amount of carbon pollution power plants can release.
• Seventy percent of voters support the President’s proposal to have the EPA set new limits on carbon pollution. Key demographic groups, including millennials, African Americans, Hispanics, moderates, and Midwestern voters, strongly support the plan.
• Support holds after pros and cons about the debate. Support for EPA carbon limits holds steady at 70 percent after voters hear pros and cons about the proposal, including strong arguments against the plan centered on its potential impact on energy prices.
• Voters overwhelmingly believe that the proposal will make a positive impact on public health and climate disruption. Nearly 7 in 10 voters (69 percent) think the plan will help public health, and 57 percent think it will help reduce climate disruption. Meanwhile, 58 percent of voters reject the notion that the plan would harm the economy.

Click here to read the results and full analysis from the survey conducted by Greenberg Quinlan Rosner.

At Talking Points Memo, Josh Marshall flags a big goof from one of the talking heads on MSNBC’s ‘Morning Joe’ who probably should have known better:

Jon Meacham says Lincoln and FDR never tried to “rebuild America on an Executive Order” like President Obama is supposedly proposing to do. Really? There are real issues with excessive reliance on executive orders. But I think someone needs to crack a history book and maybe find some better examples since Lincoln probably relied on executive powers (like ending slavery by executive order in most of the United States) more than any president in the country’s history (it’s still pretty controversial) and FDR is a close runner-up. Eeesh. This is an amazing thing for someone who presents himself as Mr. History and longivew to say…

Marshall links to another TPM post, by Tom Kludt, who elaborates:

Meacham’s take was somewhat baffling. Franklin Delano Roosevelt issued more executive orders than any president –3,522 to be exact and 1,719 more than the next closest president — including several that helped usher in New Deal programs. And Abraham Lincoln, of course, issued a pretty famous executive order known as the Emancipation Proclamation.

Obama gets the GOP to blast him for strategy used by two of America’s greatest presidents to achieve historically-acclaimed reforms — not too shabby.

This post from Dean Baker, co-director of the Center for Economic and Policy Research in Washington, D.C., is the fifth contribution to the joint American Prospect/Democratic Strategist forum, Progressive Perspectives on the Future of the New Deal/Great Society Entitlement Programs. It is cross-posted from the Prospect.
The American Prospect deserves credit for sponsoring this forum. It gives progressives an opportunity to engage in a serious discussion about many of the key economic, social, and political issues facing the country. At least as important, it allows us to tie them together in a way that generally is not done but is essential in a serious discussion.
Asserting that budget policy, fiscal policy, and inequality are integrally linked is not just rhetoric. In fact, they are inextricably tied through economic relations that are too little appreciated. The failure to appreciate these ties often leads to policies that are ineffective or even self-defeating. This essay describes how the policies are necessarily linked beginning with fiscal policy and macroeconomic policy. It then turns to a discussion of social insurance programs and inequality and the long-term budget.
 
Macroeconomics and the Iron Truths of Accounting Identities
Most college-educated people have been through an intro econ class where they were punished with the basic macroeconomic accounting identities. They then quickly forget them as soon as the class was over. Unfortunately, this appears to be as true for people engaged in economic policy debates as for the larger public.
 
The good or bad thing about accounting identities is that there is no way around them: They must be true. One of the basic macroeconomic accounting identities is that net national savings must be equal to the trade surplus. This means that the total of private and public savings, net of investment, must be equal to the trade surplus. For algebra fans this means that:
(S -I) + (T-G) = X-M;
Where S is the sum of all private savings, both household and corporate. I is investment, which means both corporate investment and the construction of residential housing. T is taxes and G is government spending, so T-G means the budget surplus. (Since we have been running large deficits in recent years, T-G has been negative.)
X is exports from the United States, while M is imports into the United States. This means that X-M is the trade surplus. This number has also been a large negative in recent years, as the country has been running a large trade deficit.
 
I apologize for the detour to intro macro, but it is important that people understand the logic of this accounting identity. If the country has a trade deficit, then it means we have negative national savings. There is no way around this fact.
If we have negative national savings then either the government must have negative savings, the private sector must have negative savings, or both sectors can have negative savings. Again, there is no way around this fact.
Currently our trade deficit would be between 4-5 percent of GDP if the economy were at full employment. This comes to $650 billion to $800 billion a year in the current economy. This means that the budget deficit, plus whatever negative savings we see on the private side, must sum to between $650 billion to $800 billion.
 
If the deficit hawks got their dream and we somehow balanced the budget, and the trade deficit stayed the same (I’ll come back to this), then it would mean that the private sector would need to have negative annual savings of between $650-$800 billion. In most of the post-war period private sector savings have been close to zero, with households providing the savings businesses needed to finance investment.
The two notable exceptions were during the years of the stock bubble at the end of the 1990s and the housing bubble in the last decade. In both cases household savings plummeted as the wealth generated by the two bubbles led households to increase their consumption at the expense of their savings. Both bubbles also led to an increase in investment. In the stock bubble years, the uptick was in corporate investment. In the housing bubble years, residential construction reached post-war highs measured as share of GDP.
It is difficult to imagine that anyone would actually advocate bringing back bubbles to sustain the economy. Furthermore, since their main impact was on boosting consumption at the expense of savings, one result of the bubble driven growth of the last two decades was that households did not save as much as they would have otherwise, leaving them less well prepared for retirement. That can hardly be a desirable outcome.
The alternative way to have negative savings on the private side is to have an investment boom. That might be wonderful, but that is not a story for the real world. The investment share of GDP has varied little over the last 50 years. Even at the peak of stock bubble years, when concerns over the Y2K problem spurred software investment and people threw money at every crazy Internet start-up, non-residential investment rose by just 1.4 percentage points above its 12.7 average share of GDP over the past 40 years.

If we can’t expect private savings to turn negative in a big way, and we keep the government budget balanced, then there is one other way for the income accounting identity to hold. If the economy shrinks due to insufficient demand, then savings will fall more than investment. At some point, this will give us a large enough excess of private investment over private savings for the national income accounts to be in balance. 
If it is not clear, we are bringing the national accounts into balance in this story with a shrinking economy and rising unemployment. That is what happens if we run a balanced budget in the context of having a large trade deficit. The deficit hawks may yell and scream that they don’t want to shrink the economy and have mass unemployment, but this is what they will get if we have deficit reduction without a clear plan for reducing the trade deficit.
Of course, the trade deficit is not a law of nature. The trade deficit exploded in the years following the East Asian financial crisis. It fell back substantially in the years from 2006 until the recession. The main factor in both cases was changes in the value of the dollar: first a sharp rise following in the wake of the crisis and a gradual decline in the years after 2002. The trade deficit clearly responds to changes in the value of the dollar. The high dollar that we saw after the East Asian financial crisis made U.S. goods less competitive in the world economy. When it fell back to more normal levels, the trade deficit began to shrink.

Many actors in policy debates have argued for alternative methods of reducing trade deficits, such as new trade agreements or industrial policy. In fact, the former have often increased the trade deficit. Well-designed industrial policy can raise productivity and increase competitiveness, but even in a best-case scenario this is a long-term outcome. Even with optimistic assumptions, currency adjustments will swamp the plausible impact of industrial policy.
This means that if we want to see a substantially lower trade deficit, we should want to see a lower valued dollar. This should be front and center of every progressive’s agenda.
 
If we don’t see a drop in the dollar, then we should anticipate that the large trade deficit persists. In this case, our alternatives are large budget deficits or unemployment. That’s it: Those who are not prepared to push for a lower valued dollar and also want a balanced budget, want more unemployment. 
Flipping this over, we can attain full employment by running large budget deficits. Given the size of the current trade deficit, budget deficits of the size needed to bring the economy back to full employment would probably be in the neighborhood of $1 trillion a year or 6 percent of GDP. The U.S. government can certainly run deficits of this size for a very long time.
 
In the downturn financial markets have shown little reluctance to hold U.S. government bonds at extraordinarily low interest rates, in fact the real interest rate on long-term bonds has been close to zero. This makes borrowing for both short-term stimulus and longer-term investment measures attractive. This would mean not just physical infrastructure (including retrofitting buildings to make them more energy efficient) but research and development in a wide range of sectors.
 
Since the main point is to stimulate demand, we can also experiment in various areas. For example, we could allocate money to allow some cities to offer free bus fares for two years. It would be interesting to see the extent to which bus travel can be encouraged if it were simple, quick, and free. The potential reduction in greenhouse gas emissions would be substantial.
We could also use public funds to encourage shorter work weeks/work years. It is important to realize that our central problem right now is too much supply, not too little. Traditional stimulus addresses this problem by increasing demand. We can also address the problem by giving employers an incentive to reduce work hours in family friendly ways. We work 20 percent more hours on average than do people in Western Europe. If our work years were comparable in length to those in Western Europe, unemployment would be immediately eliminated. 
Of course such a transition could not be accomplished overnight, but there is no reason that government funds could not be used to provide incentives for shortening work hours with policies like paid vacations, paid family leave, and paid sick days, rather than paying workers unemployment benefits. There is already a short-work program attached to the unemployment insurance system in 25 states (including New York and California), but the take-up rate on this program is low. If the problem is that we don’t want all the goods and services that we are capable of producing then a simple answer would be to produce less and let people share the leisure. 
If this discussion seems dismissive of deficit concerns, it is because it is based in economic logic and not Washington generated hysteria. We are not and cannot be Greece. That is not a subjective assessment of the relative strength of the U.S. and Greek economies, where we could turn out to be Greece at some point in the future. It is a statement about the fundamental differences in our currency regimes.
 
The United States has its own currency. Greece does not. If we actually saw the investor panic that the Washington deficit hawks crave, we could always have the Federal Reserve Board just buy up U.S. debt. Greece did not have this option with the euro. This could create inflation, but only in a context where the country was seeing a serious problem of excess demand – too many dollars chasing too few goods and services. Inflation does not just drop out of the sky.
This means that the idea that we have to fear investors turning on a dime and running from the dollar is nonsense. We could envision scenarios in which we overheat the economy and have serious problems with inflation, but that will not happen overnight and it certainly will not happen in a context where we are 9 million jobs below the trend level of employment as is the case presently.
There is one other crucial point about the need to get to full employment. Low levels of unemployment disproportionately benefit those in the bottom half, and especially the bottom third of the income distribution. There is no better policy than to ensure that those at the middle and bottom share in the gains of economic growth. In fact, the decision to have fiscal and monetary policies that do not bring the economy to full employment can be viewed as a decision to run policies to redistribute income upward, since that is their clear effect.
 
Long-term Budget Deficits and Social Insurance
While there may be no reason to worry about the budget deficit in the near or even intermediate future, the longer-term projections showing large deficits should provide some cause for concern. It is worth noting that even these longer term projections show much smaller deficits now than they did a few years ago due to the slower projected pace of health care cost growth. Nonetheless there are still substantial, if manageable increases in spending projected over the next two decades. The main sources are, of course, Social Security and Medicare.

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From “A Diary by Hamden Rice” cross-posted from Daily Kos:

I would like to remind everyone exactly what Martin Luther King did, and it wasn’t that he “marched” or gave a great speech.
“Dr. King ended the terror of living in the south.”
Please let this sink in and and take my word and the word of my late father on this. If you are a white person who has always lived in the U.S. and never under a brutal dictatorship, you probably don’t know what my father was talking about.
But this is what the great Dr. Martin Luther King accomplished. Not that he marched, nor that he gave speeches.
He ended the terror of living as a black person, especially in the south…

Read the article after the jump:

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The following article by Democratic strategist Mike Lux, author of “The Progressive Revolution: How the Best in America Came to Be,” is cross-posted from HuffPo:
Noam Scheiber was out with a great new piece last week contrasting Elizabeth Warren’s political message and priorities with New York City Mayor’s Bill de Blasio, where he described Warren’s populism as the “anti-government left,” an intriguing phrase. While I generally agree with the article, as I relate below, I would frame things differently. Also out was a thoughtful new article in The Democratic Strategist by Andrew Levison on how a successful populist strategy requires more than just economic issues. A series of big events in the last couple of years has prompted a lot of discussion in Democratic circles and the media about the new wave of populism that is building: Obama using Bain-bashing populism to win reelection in a tough economy, Warren’s victory in 2012, the election of Tammy Baldwin in Wisconsin, the reelection of Sherrod Brown in Ohio, the election of de Blasio and Boston Mayor Marty Walsh, the emergence of Warren as a powerful new iconic leader for progressives, and the going down in flames of Larry Summers as a potential Fed Chair nominee. As someone who has been a progressive populist my entire career, and who believes it can be a winning political formula in purple and even red states as well as blue ones, this is an exciting time, and I do believe this may become our moment if our movement creates a successful message and strategy. But the challenges that have kept progressive populists from winning presidential elections and creating a lasting majority movement are still there, and those of us who want to pursue this path need to be aware of them and have a strategy for dealing with them. This blog post lays out the challenges I think we have to overcome, and a strategy for doing so.
Let me say at the outset that I call this blog post “Winning Warren-Style” not because she is necessarily following all of the strategy I lay out below. She is setting her own course, and while I respect her and am inspired by the kind of politics she is pursuing, the ideas in this piece are the course I believe we should follow, not the course I think she is following. However, because Warren is inspiring a new generation of progressive populist activism and creating an iconic brand and a way of framing issues that is fresh and exciting, I think Warren has already become the leader of a new kind of modern populism that will grow into a bigger movement.
But before discussing that new movement, let’s go back and look at the history of the last half-century. It was 50 years ago that the New Deal era reached its pinnacle of political power and success, when LBJ won his overwhelming landslide victory in 1964. Martin Luther King and Bobby Kennedy were constructing a politics that had great potential for uniting working-class whites and blacks into a powerful political coalition. But 1964 would be the last time a full-throated progressive populist on economic issues won the presidency. The Vietnam War broke apart the progressive coalition, and King and Kennedy were dead by assassins’ bullets four years later. Even though plenty of populists have won big competitive races in purple states many times since then, and even though populists have tended to way outperform the amount of money that has been raised in presidential politics, there are some deeply entrenched reasons that Democratic populists (as opposed to the faux-populists in the Republican Party) have failed to win national elections in that time. Here are the four biggest barriers to a populist progressive president and Congress:

1. The money thing. Let’s start with the most obvious point, which is the fact that big-money special interests don’t like progressive populists, and those big-money types have a huge sway over the political process. It’s not just that they don’t give to populists, and do give a huge amount to their opponents, historically meaning that the kind of candidates people like me support are way outspent. That is just one part of the distortion that big money makes in our political system. There is also the huge influence, and control through actual ownership or advertising dollars, that big-money corporate interests plays with the journalistic coverage of the campaign. And there is the fact, to which I can directly attest from years of conversations on campaigns, that, a great many times, Democrats distort, mute, and muffle a populist message — even if it polls well, which is usually does — because of fears about not being able to raise enough money from the business interests if they are too open in their populism.
I would add another note here as well. One of the problems the entire Democratic party has suffered from since the 1970s is that the power of big money has made the party, even in the years we controlled both Congress and the presidency, look weak or worse policy-wise in terms of actually delivering tangible benefits for working families. We couldn’t pass labor law reform or health care in the 1970s, but we did deregulate a bunch of industries (like oil companies, airlines, trucking) and let them run roughshod over people. We couldn’t pass health care reform in the 1990s, but we did pass NAFTA and banking deregulation, things that ended up badly hurting the economic standing of most Americans. When we did pass health care reform and financial reform in 2010, that was good, but we made enough compromises that seriously weakened those bills’ ability to help make tangible improvements for most Americans, lessening in a big way the political credit that we could have gotten for the legislation.
2. The race and poverty thing. As Stan Greenberg found in his seminal research into the attitudes of white working-class voters in suburban Detroit in the 1980s, Republicans had been very successful at convincing those kind of voters that when Democrats talked about economic fairness, who they really cared about were poor and black people. (Now we can add Hispanic immigrants to the mix.) The infamous GOP “Southern strategy” worked for a long time in the industrial Midwest too. This dynamic is still around, although it is fading somewhat as our nation’s demographics change, but it is still a big thing Democrats have to deal with, because we can’t build a long term national majority without a significant share of the white working-class vote.
3. The business thing. Working-class voters, who tend to account for the bulk of swing voters in national elections, have a very complicated set of mixed emotions about business. They don’t like the businesses that exploit their workers, outsource jobs, pay huge CEO salaries, and care only about their enormous profits, but they also know that businesses are the source of badly needed jobs, and they don’t want to hurt the ability of businesses to create and maintain those jobs. Thus, if populist Democrats seem like they are too anti-business, or that they are too angry at business abuses to be able to help those businesses create more jobs, it makes those voters nervous.

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At The Cook Political Report Amy Walter puts what one hopes is the final nail in the coffin of widespread pundit references to “independent voters” as a major force in swinging elections.
It’s been one of those stubborn myths that refuses to die among political talking heads of lighter weight, particularly those favoring the ‘Dems in disarray’ meme, despite extremely convincing work by Alan Abramowitz and others. Walter covers some familiar territory, noting that “pure independents” are 10 percent tops and she adds to our understanding of what is really going on with the increase in self-described ‘independents’. Walter analyzes data from a recent paper by Kimberley Norman and Zachary Zundel for the University of Chicago’s Harris School of Public Policy which explains:

that “the majority of Independent voters have political opinions that align with one of the two major parties at least as well as party members.” In fact, they write, “independents who “leaned” toward one party or the other actually had stronger alignment than those who identified as “not very strong” in the same party. Additionally, their results were far more similar with those who identified themselves as being “strong” in their party.”
In other words, those who call themselves “independent” may actually be closer to the views of the core GOP or core Democratic policy positions than even those who identify themselves as a party member.
Using the 2010 Cooperative Congressional Election Study as their source of public opinion, the authors of the study compared the opinions of 55,400 Americans (34 percent Democrat, 25 percent Republican, 30 percent independent) with the official party positions of the Democratic and Republican party platforms of 2012. They broke the 23 policy issue questions into roughly equal buckets of economic and social issues.The further an individual deviated from the “official party” position, the higher their score. For example, a Democrat who believed that “by law, abortion should never be permitted” got a score of two. One who said that “the law should permit abortion only in case of rape or incest or when the woman’s life is in danger” got a score of one. The Democrat who believed a “woman should always be able to obtain an abortion as a matter of personal choice” was give a score of zero.
On average, those who identified as an independent who “leaned” toward one party or the other, had lower deviation scores (i.e. were more closely aligned with core positions of the party) than those who were not as strongly identified with the party.
Among Democrats, those who said they were “strong Democrats” had an average score of 7.97. Those who said they were independent with a “lean” to Democrats had an average score of 7.73. But, those who said they were “not very strong” Democrat had a higher average score of 9.46.
The Republican gap looks similar, with “strong Republican” averaging 5.95 and independent, “lean” Republican at 6.63. Meanwhile, those who identified themselves as “not very strong Republican” had an average score of 8.58.

Contrary to much pundit palaver, Walter concludes that ‘independent’ voters are not abandoning self-identifying with the two parties because they are too extreme. Rather, “many may be leaving because they see the party as getting too moderate or insufficiently aligned with its core values…These voters may be better aligned with strong partisans than they are with those who are not as committed to their party label.”
None of this is to say that the 10 percent of “pure independents” can’t swing an election if they line up with one party or the other. But they usually break roughly even, or stay at home. Chasing them is most always a fruitless endeavor.