Fed Up with Washington, DC? Look to Washington State.


(Photo: Flickr/ Takver)

Forward thinking in Washington these days is limited to federal law-makers scheming new and innovative ways to bolster the fortunes of the ultra-wealthy at the expense of just about everyone else.

That is, in Washington, DC. On the other side of the country in Washington State, and specifically Seattle, policymakers are taking a much different tack, choosing to build an economy that works for everyone.

Congress, and other states, should take notice.

The Seattle City Council voted on July 10 to pass a city-level income tax on its wealthiest income-earners. The small 2.25 percent tax will only apply to income over $ 250,000 for individuals, or $ 500,000 for married couples, and will raise an estimated $ 125 million per year.

This new revenue will strengthen the city’s public programs to address homelessness and affordable housing, create jobs and reduce carbon emissions, and improve the city’s education and transit.

The new revenue will also shore up federal funding lost as a result of budget cuts from the Trump administration. Opposition to the president’s budget proposal was a motivating factor for many, leading organizers to name the campaign “Trump-Proof Seattle.”

Katie Wilson co-founded the Transit Riders Union, which helped coordinate the campaign. As she put it, “We can’t count on solutions at the federal level coming anytime soon, so we need our city and our state to step up for the most vulnerable members of our community.”

Stand up the city did. Whether state lawmakers, and the state supreme court, mirror the sentiments of their largest metropolis remains to be seen. Washington State has among the country’s most unfair tax structures — it’s one of just seven states without a statewide income tax — and opponents of Seattle’s income tax claim it violates the state constitution.

It’s not just on tax and budget issues where Seattle is leading the charge for a more equitable future. In 2014 the city council passed the first minimum wage increase scheduled to rise to $ 15 an hour. Other cities have followed, including San Francisco and, just recently, Minneapolis.

Research from University of California-Berkeley professor Michael Reich shows that significantly raising the minimum wage boosts worker pay and hasn’t led to either job losses or a slowdown in economic growth, among a slew of other social and economic benefits.

The federal minimum wage remains at $ 7.25 an hour, so low that there isn’t a single city in the country where a worker can afford to live and support a family on that wage.

Yet Congress has shown less than zero appetite for raising the wage either under President Obama or President Trump. Many Republicans in Congress, including Tennessee Senator Lamar Alexander and a number of his colleagues, have gone so far as to call for abolishing the federal minimum wage altogether.

On taxes, Congress is also working directly against the needs and wishes of working and middle-class families. Repealing the Affordable Care Act, the issue most animating Capitol Hill right now, is a thinly veiled effort to pass massive tax cuts for the rich — to the tune of $ 346 billion over 10 years exclusively aimed at households with incomes over $ 200,000.

What would the rest of the country get in return for this massive handout to the already wealthy? Well, about 23 million people would lose their health insurance. And it would pave the way for an even more comprehensive set of tax cuts for the wealthy. Ugh.

Hopefully Washingtonians of the east coast variety will take a look to their namesake brethren in western Washington for inspiration. Congress is heading tragically toward deeper inequality, a path riddled with unnecessary harm for working people. It’s not too late to change course.


Black-led Labor Organizers Discuss Challenges and Tactics of Black Worker Organizing in the Trump Era at State of Black Workers in America Conference


(Photo: Victoria Borneman / Institute for Policy Studies)

(Washington, DC) – Six months into the Trump administration Black labor organizers are facing new and old challenges. The Institute for Policy Studies held its 3rd State of Black Workers in America Conference at historic Howard University led by our Black Worker Initiative project to discuss big-picture national trends impacting black workers, as well as the innovative Black-led labor organizing happening in the U.S. Panelists engaged with the audience to talk about topics from the women of color-led fight for a domestic worker bill of rights, to alternative power for Black workers, to partnerships for workforce training with German corporations in the Deep South.

Three dynamic panels included:

We Dream In Black: Telling the Story of Black Women Low-Wage Domestic Organizing in the South, moderated by Alicia Garza of the National Domestic Workers Alliance. This all women of color led panel introduced the partnership between We Dream in Black and the Black Worker Initiative. It focused on telling the compelling stories of Black female domestic workers in North Carolina and Georgia who are fighting for better wages, access to benefits, and a Domestic Workers Bill of Rights at the state level. This project hopes to move both hearts and policy in the coming years.

“While Black women are working hard, democracy isn’t working for us. Black families depend on Black women, yet Black women face the highest poverty rates in the nation, second only to indigenous women,” Alicia Garza of the National Domestic Workers Alliance and Black Lives Matter said. “We do our part to make this country better—we vote at higher rates than any other racial or ethnic group. It’s time for an agenda that puts Black women at the center. When Black women succeed, all women succeed.”

What the Hell do We Have to Lose? Black Workers Reflect on the First Six Months of the Trump Administration, moderated by MSNBC’s Joy Ann-Reid. This panel featured Carmen Berkley of Planned Parenthood (formerly the Civil Rights Director for the AFL-CIO), Tanya Wallace-Gobern of the National Black Worker Center Project and the Black Worker Initiative’s own Marc Bayard.  The panel discussed big-picture national trends impacting black workers, especially in the Deep South. These former and current labor leaders and activists discussed the effects of this administration on civil rights, the shift in focus back to white male workers, alternative power for Black workers, and the power of narrative change.

“This Trump moment has shown the world that the needs of U.S. workers have not been met and many of them are suffering. But if we continue to leave Black workers out of the conversation, we will never see a revitalization of a labor movement that serves the people,” Marc Bayard, director of the Black Worker Initiative at the Institute for Policy Studies said.

Building Bridges Between German Corporations, the Civil Rights Movement, and Labor. The Black Worker Initiative is seeking to build stronger and more positive relationships between German firms working in the U.S. and civil rights, academic, labor and racial justice organizations.  Our focus states are Mississippi and Alabama.  This panel showed the success of our early efforts. This panel including powerful opening remarks from DNC Chair Tom Perez. Perez set up an important frame as to the value of the German apprenticeship model for education, jobs and dignity at work.  Perez stated, “In Germany, everyone has the same stature.  We devalue apprenticeship here. [We] need to change that perception.” representatives from the Mississippi NAACP, Foundation for the Mid South and Adah International discussed vigorously the role of German corporations in the Deep South and their relationship to the Black communities that live and work there. Conversations about future partnerships and access to workforce skills and training in German companies for Black high school and college students was a key to the discussion.

This day-long event attended by one hundred and fifty labor, civil rights, women’s and community activists as well as a number of foundations and academics.

See the full program here.



IPS to Host 3rd State of Black Workers in America Conference


Media Contacts:
Domenica Ghanem, domenica@ips-dc.org, 202 787 5205

(Washington, DC) – The Institute for Policy Studies will host The State of Black Workers in America Conference led by our Black Worker Initiative project on June 7 from 10:00AM to 4:00PM at the Howard University School of Social Work. This day-long conference will feature three panels discussing the best and most innovative organizing led by Black workers in the U.S. because the role of Black workers is key to the revitalization of the labor movement. Opening statements will be made by Marc Bayard, Director of IPS’ Black Worker Initiative, and Clarence Lusane, Professor of International Relations at Howard University.

Panelists will be available for interviews at the conference.

Panels will include:

We Dream In Black: Telling the Story of Black Women Low-Wage Domestic Organizing in the South, moderated by Alicia Garza of the National Domestic Workers Alliance. This all women of color panel will introduce a project led by Black domestic workers in North Carolina and Georgia who are fighting for better wages, access to benefits, and a Domestic Workers Bill of Rights at the state level.

What the Hell do We Have to Lose? Black Workers Reflect on the First Six Months of the Trump Administration, moderated by MSNBC’s Joy Ann-Reid. This panel will discuss big-picture national trends impacting black workers, especially in the Deep South. Former and current labor leaders and activists will discuss the effects of this administration on civil rights, the shift in focus back to white male workers, alternative power for Black workers, and the power of narrative change. *Please note, this panel may not be video recorded or broadcast.*

Building Bridges Between German Corporations, the Civil Rights Movement, and Labor, moderated by Marc Bayard of the Black Worker Initiative. This panel, including DNC Chair Tom Perez, representatives from Adah International, Foundation for the Mid South, and the NAACP, will discuss German corporations in the Deep South and their relationship to the Black communities that live and work there. They will have a conversation about future partnerships and access to workforce skills and training in German companies for Black high school and college students.

WHO:     Marc Bayard, Black Worker Initiative, Institute for Policy Studies
Clarence Lusane, Howard University
Alicia Garza, National Domestic Workers Alliance and Black Lives Matter
Kimberly Freeman Brown, Race and Gender Equity and Inclusion Consultant
Tamika Middleton, National Domestic Workers Alliance
Premilla Nadasen, Barnard College
Joan Samuel Lewis, We Dream in Black
Joy Ann-Reid, MSNBC
Carmen Berkley, Planned Parenthood
Tanya Wallace-Gobern, National Black Worker Center Project
Tom Perez, Democratic National Committee and former U.S. Secretary of Labor
Derrick Johnson, NAACP Mississippi
Nadja Dalberg, Adah International Inc.
Ivye L. Allen, Foundation for the Mid South

WHAT:    State of Black Workers in America Conference to feature panels discussing most innovative organizing led by Black workers in the U.S. in the Trump era.

WHERE: Howard University School of Social Work
601 Howard Place NW
Washington, DC 20059

WHEN:   June 7, 2017
10:00 AM – 4:00 PM



If Washington Won’t Rein in Corporate Greed, Your State Might


(Photo: Shutterstock)

Josh Elliott is fed up with overpaid CEOs. As the owner of a Connecticut natural foods market with 40 employees, he says he could never justify pocketing hundreds of times more pay than his employees.

“I’m very much a capitalist,” Elliott told me in an interview. “But there need to be limits.”

Skyrocketing CEO pay and inequality last year motivated this 32-year-old businessman to launch a successful bid for a seat in the Connecticut General Assembly. Elliott hit back hard on the campaign trail against right-wing claims about high taxes driving wealthy job creators out of his state.

“This is not an issue of over-taxation — it’s an issue of taxing the wrong people and the wrong entities,” he told the New Haven Register. “When the middle class has to subsidize huge corporations like Wal-Mart that criminally underpay their workers, the narrative that we are overtaxed ought to be outed as ludicrous.”

Since taking office, Rep. Elliott has co-sponsored several bills aimed at narrowing our economic divide, including two that directly address the CEO pay problem.

One of these bills mirrors a Portland, Oregon law enacted last December that imposes a tax penalty on publicly traded corporations with CEOs making more than 100 times their typical worker pay.

These laws don’t set a ceiling on how much corporations can pay their executives. But they do provide an incentive to rein in excess CEO pay and lift up workers at the bottom end. They can also generate significant revenue for urgent needs like funding pre-school programs or fixing roads and bridges.

Legislators in Illinois, Minnesota, Massachusetts, Rhode Island, and San Francisco are also considering CEO pay tax proposals.

Elliott’s other bill would use the power of the public purse to reduce pay disparities. If enacted, companies with CEO-worker pay ratios of more than 100 to 1 wouldn’t qualify for state subsidies and grants.

That would help ensure taxpayer dollars are used wisely. Research has shown that narrower pay gaps make businesses more effective by boosting employee morale and reducing turnover rates.

Elliott pointed out that he’s able to go to the state capital in Hartford four times a week when the General Assembly is in session because he trusts his managers to do a good job running the market in his absence. “You need to have good employees to make money,” he told me.

While efforts to narrow CEO-worker pay gaps are spreading around the country, Republicans in Washington are working to undercut them.

How? By killing a federal disclosure law requiring corporations to report the gap between their CEO and median worker pay. This data, scheduled to become available in early 2018, would make the kinds of policies Elliott is promoting much easier to administer.

But overpaid CEOs — and their lobbyists — want to throw up as many obstacles as they can. The massive Financial CHOICE Act, which just passed a House committee, would eliminate the pay ratio disclosure regulation, along with loosening other regulations on big Wall Street banks. It could come up for a full House vote soon.

But as the debate shifts, Elliott is confident that bold proposals for change will eventually gain traction.

“The conservative narrative is that business owners are the job creators,” he told me. “But if the CEOs and owners of capital have unlimited potential for their own compensation, they’re just taking money away from their employees. And that’s a system that is simply unsustainable.”


State and Local Governments Can Take the Lead on Climate Policy


(Photo: Philippe Roos / Flickr)

In March, the World Meteorological Organization released data on the state of the earth’s atmosphere in 2016. Last year, it found, was the hottest year since humanity started recording temperatures, continuing a trend of steadily rising mercury.

Inevitably, the rising temperatures led to record severe storms, floods, droughts, and wildfires, from the United States to Brazil to South Africa. Experts believe that the planet will become a much harder place to live if the temperature rise exceeds 1.5 degrees Celsius, and will start becoming unlivable if it crosses 2 degrees.

The vast majority of atmospheric scientists attribute these rising temperatures, of course, to emissions from fossil fuels, among other human activities. Yet completely without irony, the Trump administration chose the week after the release of the WMO data to completely roll back even the insufficiently ambitious steps taken by the prior administration to address this looming global disaster.

This is very bad news. But the good news is that there is much ordinary people can still do to ensure that the United States continues to cut back on carbon emissions.

For one thing, we can exert popular pressure on the administration to reverse course, as the tens of thousands of people gathering in late April for the People’s Climate March in Washington are doing, along with thousands more in sister marches worldwide. And we can use the courts to challenge aspects of the administration’s attack on sound environmental policy.

But we can also push a wide range of policy changes in our states and cities to proactively advance a just clean energy agenda, regardless of what’s going on at the federal level.

In fact, states are already being the adults in the room when it comes to taking bold steps to address carbon emissions. Let’s look at just one possible policy — expanding electricity generation from renewable sources, the subject of a report I recently authored for the Institute for Policy Studies.

Transitioning our fossil-fueled electric grid to renewables would reduce emissions more than if we took every single car in the U.S. off the road, so this is a huge deal.

One adult in the room is Oregon, which legislated that coal be completely phased out of its electricity supply by 2030, and that half its electricity come from renewables by 2040.

The legislation in Oregon also enabled the formation of shared solar projects. A shared solar project is an array of solar panels typically located on the roof of a large building such as a school or church, and collectively owned by community members who cannot install solar panels on their own roof, often because they are renters. To ensure economic inclusiveness, Oregon mandated that 10 percent of the capacity of these shared solar projects be set aside for low-income residents.

Given the disproportionate prevalence of poverty among people of color, this is also a step forward for racial justice. And the idea is spreading far beyond Oregon. Shared solar projects are enabled by legislation in 14 states and the District of Columbia.

Another adult is California, which not only provides dedicated funding to install solar panels on low-income homes, but also requires that the jobs and skills training in those solar jobs be made accessible to people from underserved communities.

The states displaying these signs of maturity don’t follow predictable political lines. The South Carolina Senate has passed a bill, for example, exempting homeowners with solar panels from paying property taxes on their panels.

Expanding renewable energy helps reduce carbon pollution and makes the energy system more just. It also creates lots of jobs. Energy Department data show that solar energy accounts for 43 percent of direct electricity generating jobs — the most of any one source, even though it represents only 2 percent of generating capacity.

Even after accounting for the coal mining and oil and gas drilling jobs created by fossil fueled electricity generation, solar remains the second largest employer in the sector, with 18 percent of jobs — still ahead of natural gas, which is the single largest source by generating capacity.

If solar can create this many jobs at 2 percent of capacity, imagine what a dynamic job creation engine it would be if we aggressively expanded it. Compared to that, Trump’s fantasy of bringing back coal — which accounts for less than half as many electricity generation jobs as solar, even though its generating capacity is more than 10 times as much — doesn’t even hold a candle.

Yes, states can be grown-ups, counteracting Trump’s perspective on climate change. But it doesn’t happen by magic. It’s going to take lots of local organizing. Environmentalists will have to join hands with anti-poverty groups, civil rights organizations, small businesses, workers, clergy, and other constituencies united in demanding a clean energy economy designed to benefit historically excluded populations and to create good jobs.

So after you march, find out what your state has already accomplished in this regard. If you see room for improvement, start organizing now!


IPS on the Offense: Big Visions for State and Local Power

The Institute for Policy Studies is going on the offense with initiatives in a large number of cities and several key states. Join us and our affiliates for engaging workshops and dialogue that build power and move in the direction of transformative change.

Let’s go beyond reactionary and put forward big visions solutions that will inspire people to think and act differently.

Spring Event Series

Challenging the U.S. War on the Atmosphere: How We Fight Back

April 28 @ 6:30 pm – 9:30 pm
St. Stephen’s Church, 1525 Newton St NW

A dynamic teach-in as a prelude to the People’s Climate March (PCM), exploring concrete ways we can advance a just climate agenda and roll back the extractive economy.

Find out more »

State and Local Strategies for Reversing Inequality

May 10 @ 3:00 pm – 4:00 pm
Institute for Policy Studies, 1301 Connecticut Avenue NW, 6th Floor

Details coming soon

Bringing Global Resistance to the Local Level

Details coming soon


Even Red State Voters Want Action on Inequality


(Photo: Glynnis Jones / Shutterstock.com)

On the campaign trail, Donald Trump once described our country’s stratospheric CEO pay as “a total and complete joke.” He was right about that. The idea that the guys in the corner office are worth hundreds of times more than their employees does not pass the laugh test.

He was also right when he pointed his finger at cronies on corporate boards as a big part of the problem. “The CEO puts in all his friends,” Trump said. “And they get whatever they want you know because their friends love sitting on the board. That’s the system that we have and it’s a shame and it’s disgraceful.”

But where the president-elect is off base is in his suggestion that we can’t do anything about this disgrace. In reality, there are many ways policymakers could take responsible action to rein in executive excess. And huge numbers of Trump’s own voters want them to do so.

Shortly before the election, Lake Research Partners surveyed likely voters in four states that all wound up in Trump’s column (Florida, Pennsylvania, Missouri and Ohio) and found strong support for specific policy reforms aimed at cracking down on excessive executive pay and Wall Street greed.

Read the rest at U.S. News and World Report.

The post Even Red State Voters Want Action on Inequality appeared first on Institute for Policy Studies.

CEO pay expert Sarah Anderson directs the Global Economy project at the Institute for Policy Studies.


We’ve Been Calling Out the Overpaid Oil Execs Trump’s Considering for Secretary of State for Years

(Photo: Mike Mozart/flickr)

(Photo: Mike Mozart/flickr)

Reuters is reporting that Donald Trump is considering ExxonMobil CEO Rex Tillerson and former ExxonMobil CEO Lee Raymond for the post of Secretary of State.

As someone who’s been analyzing CEO pay for more than 20 years, I feel like I know these guys.  So I couldn’t resist pulling out excerpts from two of our annual Executive Excess reports in which Raymond and Tillerson played starring roles. First, in 2006, our report zeroed in on the CEOs who were profiting from the war in Iraq. Lee Raymond, as the outgoing CEO of ExxonMobil, was cashing in big-time on war-related oil price volatility, something he readily admitted he had no control over. While ordinary Americans were feeling “pain at the pump,” high oil prices had sent the value of his pay package soaring. Here’s the timely excerpt:

Lee Raymond, ExxonMobil CEO, 1999-2005:

In 2005, ExxonMobil collected $ 36 billion in profit, the grandest annual profit total ever recorded anywhere. Last November, called before Congress to explain the rising gas prices that appear to have fueled these record profits, ExxonMobil’s Lee Raymond explained that rising prices reflect global supply and demand, nothing more.

“We are all,” Raymond assured Congress, “in this together, everywhere in the world.”

We’re all in this together, except Raymond. As ExxonMobil CEO in 2005, his basic salary alone ran 63 times the average paycheck in the oil industry. Raymond’s $ 4 million salary last year amounted to a weekly take-home of $ 83,333.

But Raymond hardly had to content himself with just salary in 2005. His overall pay for the year totaled $ 69,684,030.

Raymond retired from ExxonMobil at the end of 2005, and his near $ 70 million in compensation for the year seemed, at the time, a more than ample reward for his career of service to company shareholders. Company directors disagreed. This past April, news reports revealed that Raymond walked off into the retirement sunset with a going-away pay package that sets a staggeringly new golden parachute standard.

This retirement package — a grab-bag of stock options, restricted stock awards from previous years, retirement-independent salary, and bonuses, plus a $ 1 million consulting contract, security services, a car and driver, access to the company corporate jet, and $ 210,800 in country club fees — would add up to nearly $ 400 million.

“He is a porker of the first order,” executive pay expert Graef Crystal told Bloomberg after the news of Raymond’s good fortune broke. “Those CEOs out there who are doing better at the trough must be thrilled he’s flying fighter cover for them.”

Rex Tillerson, ExxonMobil CEO, 2006-present:

And now on to ExxonMobil’s current CEO, Rex Tillerson. In 2015, our Executive Excess report was the first to analyze how CEO pay practices are rewarding corporate leaders for accelerating climate change. The report documented, for example, how oil executive bonuses encourage behaviors that further lock their companies into fossil fuel dependency instead of diversifying into renewables.

At ExxonMobil, the company’s proxy statement cited successful drilling in “the first ExxonMobil-Rosneft Joint Venture Kara Sea exploration well in the Russian Arctic” among the reasons for awarding high executive payouts in 2014. The Russian government-owned Rosneft has a dismal environmental, safety, and transparency record, according to Greenpeace. Within months of the ExxonMobil bonus awards, international sanctions against Russia led to the scrapping of this controversial joint venture.

Here’s more from that report about Tillerson:

A regular on lists of America’s highest-paid corporate executives, Rex Tillerson pocketed $ 33 million in 2014, raising his total compensation over the past five years to $ 165 million. His gargantuan reward package doesn’t just reflect the massive size of his firm, the nation’s second-largest. As detailed later in this report, ExxonMobil aggressively uses stock repurchases to boost share prices, a move that in turn inflates Tillerson’s equity-based pay. Between 2003 and 2013, buybacks accounted for an estimated 51 percent of ExxonMobil earnings per share growth. As of year-end 2014, Tillerson, who became ExxonMobil chair and CEO in 2006, was sitting on more than $ 166 million worth of unvested stock grants.ExxonMobil stock buybacks3

In the midst of all this share repurchasing, ExxonMobil has also been spending generously to support climate deniers. In the 2014 election cycle, ExxonMobil’s PAC dished out $ 715,000 in campaign contributions to candidates who have either denied or raised questions about climate science. ExxonMobil, adds the Union of Concerned Scientists, also continues to quietly fund climate denial organizations.

Shareholders have pushed hard for change at ExxonMobil. They’ve introduced 62 climate-related resolutions over the past 25 years. Management has opposed every one. CEO Tillerson, ironically, has little tolerance for environment-threatening behavior in his own backyard. Last year, his efforts to block a fracking project in his posh Dallas suburb made the front page of the Wall Street Journal.

In a follow-up article in AlterNet, I noted that when a Catholic priest and shareholder activist urged investment in renewables at the company’s annual meeting in 2015, Tillerson openly mocked him.

I know I should add something thoughtful here about how Tillerson or Raymond might perform as our nation’s top diplomat, including in global climate negotiations and international efforts to fight global poverty. Sorry, I’ve got nothing to say.

The post We’ve Been Calling Out the Overpaid Oil Execs Trump’s Considering for Secretary of State for Years appeared first on Institute for Policy Studies.

Sarah Anderson directs the Global Economy Project for the Institute for Policy Studies.


Bipartisan Unity in a Deep Red State

(Photo: americans4financialreform / Flickr)

(Photo: americans4financialreform / Flickr)

A couple years ago, two South Dakota men on opposite ends of the political spectrum got into a nasty fight over marriage equality. But after one offered the other an olive branch, they wound up forming a bipartisan alliance that won big this election year.

Their story offers important lessons for our divided country.

It all began with a Twitter feud between Steve Hildebrand, a gay former Obama campaign adviser, and Steve Hickey, a conservative pastor and former Republican state legislator. To defuse the tension, Hickey decided to invite Hildebrand out for coffee.

Eventually, the two men realized they had something in common: a deep concern about poverty and homelessness. They also agreed that the payday loan industry in their state was making these problems much worse.

Payday lenders give customers short-term cash advances, typically for two weeks, against their paycheck or Social Security check. But most borrowers can’t pay back the loan when it comes due — which is exactly what the lenders want.

According to the Consumer Financial Protection Bureau, the majority of all payday loans are renewed so many times that borrowers end up paying more in fees than they originally borrowed. In South Dakota, the average interest rate on such short-term loans is 574 percent.

In a show of bipartisan unity, Hickey and Hildebrand resolved to work together to crack down on these loan sharks. They formed a coalition, South Dakotans for Responsible Lending, to take the issue of predatory lending directly to the voters. Their goal: a 36 percent interest rate cap on short-term payday loans.

The coalition’s first step was to marshal a volunteer army of all ages, income levels, and political stripes to collect almost 20,000 signatures to get the proposal on the ballot. To build support, they held prayer vigils, gave talks at churches and Rotary and Lions clubs, and wrote letters to the editors of newspapers across the state. For Halloween, they painted pumpkins with their campaign slogans.

On November 8, despite being outspent 16 to 1 by industry opponents, the coalition won a crushing victory. More than three-quarters of South Dakota voters supported the rate cap measure.

Reflecting on their success, Pastor Hickey said, “Knowing that today in America we have reached perhaps the apex of hyper-partisanship, our efforts here of working together across the party lines is really a breath of fresh air, and we believe this is the way forward.”

Hickey also made clear that the coalition’s fight isn’t over. They’re worried the loan sharks may pursue new legal tricks to keep exploiting the poor, and they’re looking for ways to make credit more affordable for low-income South Dakotans. One option they’re looking into is using a fraction of the state’s reserves to guarantee affordable loans through credit unions.

But even though there’s more work to be done, this coalition’s bipartisan ballot box success is an inspiring example of how we can still make progress in our polarized nation.

The post Bipartisan Unity in a Deep Red State appeared first on Institute for Policy Studies.

Sarah Anderson directs the Global Economy project for the Institute for Policy Studies.


A Failed State in Latin America?


Opposition activists and Chavistas confront each other in Caracas. (Photo: Rodrigo Suarez)

Venezuela is at the mercy of its fluids.

For a country that depends on oil for 95 percent of its exports, the prolonged drop in the price of crude has been a serious financial blow.

If nothing else, though, Venezuela should be able to use its oil resources to keep the lights on and the factories going. After all, Venezuela has the largest proven oil reserves in the world. It has more

than Saudi Arabia. It has more than Africa, Eurasia, and Asia combined. Only Russia and Iran are sitting on more overall energy resources.

But most of Venezuela’s energy is slated for export or is hard to access. Not to worry: Some years ago, the country diversified its electricity supply to rely more on renewables. Hydroelectric power now supplies 60 percent of the country’s energy.

Ordinarily, diversifying away from fossil fuels is a smart move.

But not when there’s a drought, which the country experienced in 2010 and again even more devastatingly this spring. Thanks to a combination of El Nino and global warming, the dams are dry. The result: widespread power outages.

Even the best-managed government would have difficulties coping with these twin problems of oil and water. Venezuela is not blessed with such a government. Nicolas Maduro, who took over from Hugo Chavez in 2013, has not been adroit in his handling of the crisis.

To retain public support, he’s tried to keep consumer prices low and wages flowing by printing money and maintaining government subsidies. As a consequence, the country has suffered hyperinflation, the highest in the world last year. The economy shrank by nearly 6 percent in 2015 and is expected to contract another 8 percent in 2016. The country owes $ 120 billion, with a $ 7 billion debt repayment expected this year. Default is a possibility, though the government has gone to great lengths to meet its obligations.

Some Venezuelans are doing well. For instance, black marketeers are making a killing by reselling subsidized goods at higher prices. Political insiders have privileged access to hard currency, which one former government adviser estimates has cost the country $ 25 billion. Some of the corruption is even uglier. High-level officials — including the former head of the anti-narcotics agency, the former speaker of the national legislature, various military officers, and two nephews of the first lady — have been charged with drug trafficking.

Virtually everyone else in Venezuela is frantic. The lack of food in supermarkets has created long lines and the prospect of widespread food riots. The crime rate has surged. Government services, once the pride of the government of Maduro’s predecessor Hugo Chavez, have practically disappeared, with government offices open only two days a week to save electricity. A huge swath of the population is sinking into poverty as inflation and recession have eliminated the gains made during the Chavez years. The medical system, with shortages of critical drugs, verges on collapse.

As New York Times reporter Nicholas Casey observes, parts of the country now look like a war zone:

And these hospitals, they look like — they look like hell on earth, basically. You’re seeing people on gurneys and on the floor in their own blood. One of the hospitals that we went to, there had been a number of newborn infants who had died the day before when there was also a power outage.

Maduro’s Response

President Maduro has reacted to this economic decline with bluster, nationalism, and his now routine reliance on ruling by decree.

As if soldiers can defeat global warming and economic mismanagement, he recently put together the largest military exercise in his country’s history. His specific recommendations — for instance, that women should forgo blow dryers to save electricity — have attracted the ridicule of none other than late-night TV host John Oliver.

Last December, the political opposition to Maduro, a coalition of not terribly united parties, won the legislative elections. The elections, moreover, were free and fair. All of this seemed to disprove the contention of critics both inside and outside the country that Venezuela had departed from democracy.

Unfortunately, Maduro has gotten around these electoral results in a classic autocratic manner by declaring a state of emergency and then expanding and extending this period until at least the end of 2017. The Supreme Court, which Maduro allies in parliament packed with supporters just before they lost control of the legislature in December, nullified the election results in Amazonas state and prevented the opposition from acquiring a sufficient parliamentary majority with which it could, for instance, remove Supreme Court justices. The court has granted Maduro his emergency powers and prevented the opposition from having much influence at all over the country’s direction.

In early May, the opposition put together a petition demanding the removal of Maduro from power. Nearly 2 million people signed (out of a population of 30 million). Indeed, two-thirds of Venezuelans want the president to resign this year before his term is up. But even if the authorities validate the petition, organizers will then have to collect another 4 million signatures to trigger the recall referendum.

Meanwhile, street protests continue. But they’re not as big as they were a couple years ago. Many people are worried about violence — dozens died in the 2014 protests — or are preoccupied with survival issues. Plus, a lot of people have voted with their feet. In the last 15 years, a million people have left Venezuela, and of those remaining, an astounding 30 percent of the population is making preparations to leave.

Venezuela’s descent into chaos owes much to factors beyond Madura’s control, such as the price of oil and the scarcity of rain. But Venezuela, under both Chavez and Maduro, failed to break its dependency on oil for its exports earnings.

Chavismo, though it pulled many out of poverty, also constructed an economic patronage system — or, rather, replaced the old patronage system with a new one — that guaranteed political loyalty but at the expense of building durable democratic institutions or a sustainable economy. Venezuela could have broken the resource curse — the convergence between resource wealth and corruption, mismanagement, and gross economic inequity.

Instead, Chavez redistributed the windfall profits from the oil industry and did little to prepare for the future.

Chile Redux?

Maduro has pinned much of the blame for his woes on the United States.

“Washington is activating measures at the request of Venezuela’s fascist right,” he intoned recently. Washington has indeed applied sanctions against Venezuela, but they focus only on a handful of individuals. The United States also supported a coup against Hugo Chavez back in 2002, and the Obama administration would surely like to see a different team in charge in Caracas. But “Yankee imperialism” is not really a major contributing factor in Venezuela’s current crisis.

The great irony, of course, is that the Obama administration has expended considerable political capital in pursuing a rapprochement with Cuba, a country that’s had a more implacably hostile relationship with the United States for a much longer period. The U.S. Congress maintains an economic embargo against Cuba even as the two countries reestablish diplomatic relations. The United States and Venezuela enjoy very close economic ties, by contrast, but haven’t hosted each other’s ambassadors since 2010.

In March 2015, a few months after the United States and Cuba announced that they would restore diplomatic relations, Maduro reached out quietly to Washington to see whether he could benefit as well from the new good-neighbor policy. Washington responded positively, and a two-track set of negotiations began, with one track devoted to shared interests and the other to disagreements.

A détente has yet to materialize. Even though diplomatic relations between the two countries remain in limbo, business as usual has proceeded. Venezuela has major economic interests in the United States — including the Citgo refining complex in Lake Charles, Louisiana, and thousands of gas stations. Meanwhile, the United States is Venezuela’s largest trading partner, with 500 U.S. companies invested in the country.

Although Maduro suspects that Washington is plotting a coupe, the Obama administration seems more worried of late about Venezuela becoming a failed state than Maduro maintaining his hold on power. The Obama administration has been quietly supporting Spanish efforts to mediate between Maduro and the opposition-controlled parliament, and has even been trying to rope in the Vatican, a key mover behind the Cuba détente.

No doubt Washington would prefer a more pliant partner in Caracas. But with Venezuela one of the top five suppliers of oil to the United States, Washington doesn’t want the country to disappear into the black hole of chaos.

In other words, the standoff in Venezuela today is not Chile 1973 all over again. It’s not the United States that has destabilized the Maduro government. And Maduro is not a noble, idealistic leader, like Salvador Allende, who is trying to take his country in a bold new direction. If you want to see what the United States would look like after a dozen years of Trumpismo, behold Venezuela.

International Response

International pressure has been building against the Maduro administration.

Human rights organizations have slammed the government’s record. The head of the Organization of American States, Luis Almagro, has been complaining that Venezuela has violated the organization’s charter through its undemocratic practices, thus risking suspension. Almagro published a detailed report backing up his charge. Maduro responded with characteristic bluntness:

I suggest you put this democratic charter in a very thin tube and find a better use for it, Mr. Almagro. You can shove that democratic charter wherever it fits. Venezuela has self-respect and no one will apply this charter to Venezuela.

But it’s not just organizations like the OAS, which has a reputation of being a U.S. lapdog, that are criticizing the Maduro government. The Socialist International — to which Maduro’s United Socialist Party of Venezuela belongs — has slammed the Venezuelan government on several occasions, most recently around democratic irregularities, political prisoners, and the overall “deterioration of institutional life.”

So, let’s put to rest the notion that the travails of Nicolas Maduro are in any way connected to some retreat of the “pink wave” that swept away decades of authoritarian, right-wing rule in Latin America. Venezuelans are tired of corruption, economic mismanagement, and political repression. Fewer than half of those who self-identify as leftists believe that the country is heading in the right direction, according to a December Pew poll. Venezuelans of all persuasions want a change.

In a future column, I’ll take a big-picture look at the Latin American left and what’s happening in Argentina, Brazil, Chile, and elsewhere. But the turn against Maduro has little to do with any rejection of the left. Maduro is a populist with autocratic tendencies, and the opposition coalition consists of parties across the entire political spectrum, including Radical Cause, the Progressive Movement of Venezuela, Progressive Advance, and several social democratic parties.

Hugo Chavez is dead. Chavismo, which was more of a cult than a political ideology, is on its last legs. Before Venezuela succumbs as well, it’s time for a radical restart in the land of Bolivar.

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