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For Amalgamated Bank, having owners from both organized labor and the financial world is not just a marriage of convenience. The move will also help the bank take advantage of growth areas.
On Wednesday, Amalgamated Bank, long the nation’s only union-owned bank, announced that two financiers who offered it a lifeline — Wilbur L. Ross Jr. and Ronald W. Burkle — had closed a deal giving them 41 percent ownership in the bank.
Their firms each invested approximately $50 million, with Mr. Burkle’s firm, the Yucaipa Companies, bringing in Magic JohnsonEnterprises as an investor in the deal.
Amalgamated had sought the investments from Mr. Ross, a prominent investor in the steel and coal industries, and Mr. Burkle, a supermarket magnate, after the New York State Banking Department ordered the bank to increase its capital ratio to 7 percent by this August, after it had slipped to 6.2 percent.
Workers United, part of theService Employees International Union, will reduce its stake to 59 percent, from 100 percent. Noel Beasley, the president of Workers United, will remain the bank’s chairman.
Amalgamated said that the deal would not merely help it close a financing gap, but also help it expand.
“This money will give us the opportunity to grow significantly,” Edward Grebow, the bank’s chief executive, said in an interview.
Mr. Grebow said the bank would soon issue a nationwide, prepaid debit card that will provide a convenient, lower-cost way for union members and other workers — many of whom do not have bank accounts or bank cards — to manage their money and make purchases. Such products will also make it easier for many low-wage workers who do not have regular credit or debit cards to rent cars or reserve hotel rooms.
Those growth prospects helped attract the interest of the financiers.
“Amalgamated is well positioned to meet the needs of specific segments of the population who are not well served by the major banks,” Mr. Ross, chief executive and chairman of WL Ross, said in a statement. “The bank will use its stronger capital base to meet this demand.”
Investing in a union-owned bank is not a big leap for the financiers.
Mr. Ross has played a major role in revamping ailing companies in struggling, old-line industries, most notably steel and coal, where he worked closely with the United Steelworkers union. But he has occasionally battled unions when he restructured numerous steel mills, including several he bought from the bankrupt Bethlehem Steel in 2003.
Mr. Burkle is a prominent contributor to Democratic causes and has made Yucaipa a major investor in the supermarket business, having purchased stakes in Ralphs, now part of Kroger, and Pathmark, now part of the Great Atlantic & Pacific Tea Company. In that capacity, he has forged a close relationship with the nation’s largest grocery union, the United Food and Commercial Workers.
“Amalgamated’s long history of union ownership places it in a unique position to serve the financial needs of America’s labor organizations, the pension fund community and working people throughout the nation,” Mr. Burkle said in a statement.
Even as the Occupy Wall Street movement has denounced many big banks, Amalgamated has been one of the banks that has benefited from it. Amalgamated’s branch near Zuccotti Park, the square in Lower Manhattan where the Occupy demonstrators had set up camp, hung a banner voicing support for the movement.
Soon, Occupy Wall Street set up its bank account at the Amalgamated. The bank has also attracted deposits from many Occupy supporters who pulled their deposits out of major banks, maintaining that those banks had not done enough to end foreclosures and help Main Street.
As a result, Mr. Grebow said, his bank’s total number of retail depositors has doubled to 60,000 since the Occupy movement began last September.
The bank, which was founded in 1923 by the Amalgamated Clothing Workers of America union, now has $4.5 billion in assets. It is the nation’s largest manager of union pension funds, with its trust department managing or serving as custodian for $31 billion in assets.
In February, the Federal Reserve gave official approval for Workers United to own Amalgamated. The bank had been owned by Unite Here, a union formed by the 2004 merger of the nation’s main apparel workers union and the nation’s main hotel workers union. But that merger ended in an ugly split in 2009 with some tensions over which of the unions would own the bank.
Amalgamated now has 25 retail branches including 20 in New York, as well as branches in Washington, Las Vegas, New Jersey and California.
(Reuters) – Less than a day into the general election campaign, probable Republican nominee Mitt Romney stumbled on a key issue on Wednesday in an early warning that he needs to sharpen up quickly to compete with President Barack Obama.
Romney made the unlikely claim that the vast majority of U.S. jobs lost under Obama were held by women, and his campaign team struggled to say whether their candidate supports a fair pay law for women.
Romney is now under pressure to show he can take on Obama’s well-organized campaign, after main Republican rival Rick Santorum quit the White House race on Tuesday and left the former Massachusetts governor as the presumptive nominee.
In an attempt to deflect Democrats’ accusations that Republicans have launched a war on women by criticizing birth control, Romney produced a statistic in a television interview that was widely questioned.
“Over 92 percent of the jobs lost under this president were lost by women. His policies really have been a war on women,” he told Fox News. Romney later repeated the number in a speech in Hartford, Connecticut. Fact checking website Politifact branded the claim “mostly false.”
The missteps were notable in that women voters are a weakness that Romney needs to address ahead of the November 6 election. Obama holds an advantage with women in polls and recent Republican comments on contraception have likely helped widen that gap.
“We’ll get back to you on that,” the unidentified adviser said. The Romney campaign later said he backed the law and released a flood of statements attacking Obama’s record on creating jobs for women.
“And it also takes time for the senior staff to be reminded of all the niche issues they’ve learned and forgotten due to long purely red meat populated primary election season. They’ll get there fast enough,” she said.
Romney faces a potentially difficult few days. On Thursday, Democrats like Massachusetts Governor Deval Patrick plan to highlight the sixth anniversary of Romney’s Massachusetts healthcare plan that has been criticized by Republicans.
Romney came under fire from conservatives during the primary for his past support of gun control measures, criticisms that surrogates from the Obama campaign are likely to discuss on Friday, according to a Democratic official.
As part of Mitt Romney’s ongoing attempt to project all of his weakness onto President Obama, the presumed GOP nominee is accusing his general election opponent of waging a “war on women.”
Democrats have used the same charge to highlight Republicans’ systematic attacks on women’s rights, but Romney flipped the claim at a rally last night night, saying, “The real war on women has been the job losses as the result of the Obama economy.” He continued the attack on Fox News this morning, where he repeatedly went out of his way to attack Obama’s record on women:
ROMNEY: Over 92 percent of the jobs lost under this president where lost by women. His policies have been really a war on women. … Women in particular suffered under this presidency.
With Romney’s campaign now arguing that Dems are the ones who are hurting women, thanks to Obama’s bad economic policies, Democrats pounced today on the news that Romney advisers were unable to say on a conference call with reporters whether he supports the Lily Ledbetter Fair Pay Act.
According to audio of the call circluated by Dems, a Romney adviser, after being questioned about the law, said: “We’ll get back to you on that.”
Subsequently, Romney spokesperson Andrea Saul clarified: “He supports pay equity and is not looking to change current law.”
The question now is whether a President Romney would veto or refuse to sign any effort by a GOP-controlled Congress to repeal the Lily Ledbetter Act. I’ve asked for further clarification and will update if I hear back.
A few points on this. First, this isn’t the first time the broader issue has come up. As you’ll recall, neither CBS News nor the Hill were able to get the Romney campaign to say whether he supports Scott Walker’s repeal of Wisconsin’s equal pay law. And as Sam Steinnotes today, if the Romney campaign is going to attack Obama for failing women economically, it should have had a ready answer at hand about Lily Ledbetter, given that this is one of Obama’s oft-trumpted achievements.
Second, this dust-up offers a signal that conservatives suspicious of Romney will be policing his pivot to general election mode very closely. After the news broke that Romney isn’t looking to change the law, right-leaning writer Philip Klein immediately tweeted: “Wow, Romney spox says he won’t get rid of Lilly Ledbetter act. Terrible legislation.” Expect more of this.
Third, the larger context is key. The Romney campaign has rolled out Ann Romney to argue in multiple forums that the battle over contraception and cultural issues won’t hurt Mitt, because women mostly care about jobs and kitchen table concerns. But this gender issue is an economic issue, too.
Romney’s seeming support of the law notwithstanding, Dems will work hard to remind voters that all but five Republican Senators voted against Lily Ledbetter. Romney seems to recognize that this is an area where he absolutely must achieve separation from the Congressional GOP, even if it risks angering conservatives. But this dust-up shows that where warranted, Dems will continue using the GOP’s overall damaged brand among women to complicate Romney’s effort to reintroduce himself to this key swing constituency.
“Apparently,” sighs Matt Yglesias, “the ridiculous political attack line we’re supposed to talk about today is Mitt Romney’s claim that 92.3 percent of jobs lost since Barack Obama took office belonged to women.” You betcha! Mainly, though, this is interesting as an object lesson in how to mislead with statistics. As a political attack, it’s too lame to last more than a day or two.
So do you want to know how Team Romney came up with this number? The chart below, which shows job losses among men and women, tells the tale. If you look at jobs lost since the beginning of the recession, here’s what you get:
- Women 1,840
- Total: 5,161
- Percent women: 36%
But that’s too boring! As you can see, there was a steep job loss among men right at the beginning of the recession and a slower job loss among women. So what happens if you just lop off that bit of the recession and count only the strength of the recovery since January 1, 2009? Well, men have recovered steeply and women have recovered more slowly. So now we have:
- Men: 57
- Women: 683
- Total: 740
- Percent women: 92%
Pretty snazzy, eh? Men have made up ground faster then women since January 2009, so technically that means that women have sustained the bulk of the job losses since then. Very clever indeed. Politifact has morehere.
ALSO WORTH NOTING: It’s important for Romney to start on January 1, even though Obama wasn’t inaugurated until January 20. Why? Because if you started on February 1, you’d end up with women accounting for something like 300% of all job losses, and that’s ridiculous enough that it would give the whole game away. Even the rubes wouldn’t buy that.
I’m glad to see that there’s been a moderately aggressive media response to Mitt Romney’s latest falsehood: The claim that 92 percent of the people who have lost jobs on Obama’s watch are women.
The argument, which his campaign is now making regularly, is central to Romney’s effort to win back women who were apparently alienated by the primary.
The assertion has now been debunked by Politifact, the Post’s Glenn Kessler, and MSNBC’s Domenico Montanaro. All three of them point out, among other things, that the claim relies on a net overall job loss calculation that uses January 2009 as a starting point. It factors in the huge amount of jobs lost when the economy was in free fall in the first months when Obama was in office, before hispolicies took effect.
As Politifact said of Romney’s female job loss claim: “One could reasonably argue that January 2009 employment figures are more a result of President George W. Bush’s policies, at least as far as any president can be blamed or credited for private-sector hiring.”
Good work! But here’s the thing about this. Romney’s use of the basic fallacy on display here goes well beyond this one claim about women.It’s central to virtually his entire case against Obama’s economic record.
Romney has been arguing in every conceivable forum for many months that jobs were lost on Obama’s watch, proving that he is a job destroyer and that his policies failed. To do this, he’s using that same metric to prove this point — even though that metric factors in job losses that occurred before those policies took effect.
Back in January the Romney campaign was using that metric to argue that two million jobs were lost on Obama’s watch. Romney has echoed this basic charge multiple times since then, changing the number to keep pace with improving economic news; earlier this month, Romneywas claiming that “800,000 jobs have been lost.” Even if the number has changed, the methodology used to calculate it has remained consistent.
But as the new fact checks of Romney’s claim about women drive home, this methodology is thoroughly bogus. And it goes far beyond this one assertion about women. It is central to Romney’s whole candidacy.
To be sure, this month’s disappointing jobs numbers put a crimp in Obama’s case about the recovery, and another dip remains very possible. But that doesn’t make Romney’s creative use of the jobs numbers defensible. And it’s good to see that the current dust-up over female job loss may be awakening more media people to the far larger falsehood at the center of his whole argument.
Out of touch, waging a war on women, pursuing an “alarming” foreign policy, trying to “end Medicare as we know it.”
President Obama must feel like he’s gone through the looking glass to hear Mitt Romney leveling those charges against him — after all, Romney is the former CEO with the $200 million fortune, whose party erupted in debate this year over the merits of contraception, prenatal testing and forced ultrasounds, whose hawkish foreign policy views include a threat to invade Iran, and who has endorsed conservative proposals to change Medicare from a government health program to one based on private insurance.
The script in these early days of the 2012 general election campaign carries echoes of 2004. Think George W. Bush — who snagged a coveted spot in the National Guard rather than go to Vietnam — winning reelection in part because his allies used Democrat John Kerry’s military service to eviscerate his character. Kerry volunteered to serve in Vietnam and was respected for it until the well financed “Swiftboat Veterans for Truth” came along and wrote the definitive chapter on how to turn your opponent’s strength into a fatal vulnerability — even if your own record on the same subject is weaker.
Polls show Obama has an advantage over Romney on many fronts. That’s at least partly the result of a primary process that did Romney no good. It is finally winding down, but he’s starting the general-election campaign hobbled by his own missteps (repeated unforced reminders that he’s a rich former boss) and rivals who damaged both him and the party brand with their attacks and preoccupations.
If Romney wants to win, he has little choice but to challenge Obama’s hold on women, his claims on foreign and economic policy, even his personality — and he’s not entirely without ammunition. His suggestion that women were disproportionately hurt by the recession is off-base, but there’s no question that women — like men — have suffered in the downturn. That means Romney may get mileage out of his charge that “this president has failed America’s women” economically, and out of his promise of good jobs and higher incomes for women. Romney has also come up with a good riposte to the out-of-touch line of attack: “The person I’m out of touch with is Barack Obama.” And he’s right that Obama’s health law tries new ways to control Medicare costs and cuts $500 billion out of Medicare over 10 years.
But you have to hand it to Obama and his team: Unlike some campaigns of the recent past, such as Kerry’s, they are not sitting back and assuming their advantage will last. Instead they are moving very fast to try to cement the image of Romney that took hold in the primaries.
Swing-state independents might be turned off in November by an emphasis on fairness, as one survey has found. But the Obama campaign isn’t focused on that now. Its first order of business is to tattoo “rich guy” on Romney’s forehead and “party of the rich” on the GOP. The latest twist, part of a week-long buildup to a vote on the so-called Buffett rule (meant to that ensure billionaires don’t pay lower rates than secretaries) is an online calculator to compare how much you pay in taxes to how much Romney pays.
Obama’s foreign-policy achievements — killing Osama bin Laden, ending the Iraq war — are higher profile than his vulnerabilities. So that’ll be a tough challenge for Romney, exacerbated by rookie mistakes like demanding that Obama release transcripts of private meetings with foreign leaders. As for Medicare, opinion polls, a 2011 special election and the relish Democrats show for talking about it suggest the issue could hurt Romney and the GOP more.
There is material for Romney to make an out-of-touch argument. Obama can be reserved and snappish, and he is more solitary than most politicians. Still, Obama scores higher than Romney on poll questions about likability and understanding people’s problems. Obama was a scholarship student whose first rusty car cost $900 and who was paying off student loans for years. He can always pull out those stories — and recently has — when Romney starts talking about President Out-Of-Touch.
Romney has a pot-kettle problem on that front, given that he has two Harvard degrees to Obama’s one. That isn’t going to prevent a few months of hand-to-hand combat over what makes a person more detached from real life — Air Force One and lots of money, or several houses and far more money. Best case: They fight that one to a draw and move on to the future of the economy.
Mitt Romney’s latest line of attack against President Obama’s proposal to make sure millionaires don’t pay a lower income tax rate than the middle class plays ironically on a familiar theme. It’s hardly a tool to ensure people like Warren Buffett pay their fair share, says his campaign, but rather a sort-of kickback for Buffett himself.
But that’s not quite true.
As Obama touted the “Buffett Rule” in a televised speech Wednesday for the second day in a row, Romney’s economic policy adviser Kevin Hassett delivered the campaign’s response during a morning call with reporters.
“The rule, I think, is also an example of Washington at its worst,” Hassett said. “It exempts municipal bond interests from the harsh capital treatment and you might wonder why, given that we’re calling it the Buffett Rule — I think it’s no coincidence Berkshire [Hathaway, Buffett’s firm] has been a big player in municipal bond markets.”
The proposal, on which the Democratic-led Senate is set to vote Monday, would ensure that people earning over $1 millionpay at least 30 percent of their income in taxes. The bill’s ability to raise revenue is limited by some exceptions, including the one exempting municipal bonds. That exemption was designed to prevent city and state taxpayers of all income levels frompicking up a bigger tab for loans taken by local governments.
Hassett’s implication is that the carve-out is a kickback for Buffett himself — a way for him to avoid the financial impact of his own policy namesake.
Buffett was not immediately available for comment.
Asked whether Romney would support the “Buffett Rule” if that exemption is eliminated, a campaign spokesperson did not respond.
Stan Collender, a budget expert and partner at Quorvis Communications, said the Romney campaign’s implication “sounds like total and utter nonsense and a heavy-handed attempt to change the subject.” Collender said the Buffett Rule would “require that Warren Buffett and others who earn $1 million per year pay their fair share in taxes. Does that sound like something that will benefit him financially?”
The Romney campaign’s line of attack is part of a broader effort neutralize the candidate’s vulnerabilities by projecting them onto Obama. It’s a risky strategy — one that involves picking battles on Obama’s turf: In this case, it allows the president to repeatedly tout his support for a popular economic policy.
From the Obama Campaign
[…] President Obama has money troubles. The president’s re-election campaign was rumored to be a $1 billion juggernaut, it was supposed to dominate the 2012 election. But it has fallen short of that lofty number, by a lot.
Of course part of the problem stems from Super PACs, groups that can raise and spend unlimited amounts of money on candidates, as long as they do not co-ordinate with those candidates. The disparity between the Super PAC backing Obama — Priorities USA — and the conservative one affiliated with Karl Rove — American Crossroads — is stark: American Crossroads has ten times as much money in the bank as Priorities USA.
Once the general election begins, the Karl Rove group can start dumping a lot of cash on Obama’s head, which will lead to a wake-up call for Democrats to start writing checks. Will the top fundraiser also be the Electoral College winner? This will be a hard-fought campaign where money is going to have to play.
Speaking on a conference call with bloggers, DNC chair Debbie Wasserman Schultz mocked Mitt Romney’s campaign for being unable to come up with an immediate answer earlier in the day as to whether the candidate supported the Lilly Ledbetter Fair Pay Act.
“For the president, equal pay for equal work has always been a no brainer,” she said. “Meanwhile on a question that shouldn’t have required a milisecond of hesitation, Mitt Romney’s aides responded with a deafening six second silence followed by ‘We’ll get back to youon that.’”
She continued: “Romney’s spokeswoman then attempted to pivot by saying Romney is not interested in changing current law but that wasn’t the question,” adding that Romney’s campaign did not answer whether he would sign a bill repealing the legislation or whether he would have signed it as president himself in 2009.
According to the chair, the episode offered “yet another glimpse of the vastly different direction Mitt Romney wants to take us – it’s a sharp turn to the right.”
This week’s “Loop Quote of the Week,” goes to former President George W. Bush, who reminds us to use the proper terminology when referring to certain Americans who have more access to money than other Americans do.
Bush spoke Tuesday at a tax-policy conference in New York hosted by his presidential institute.
“If you raise taxes on the so-called rich you’re really raising taxes on the job creators,” he explained. So if you want “private-sector growth” then the best thing to do “is to leave capital in the treasuries of the job creators,” Bush said.
We thought those folks were called “rich” because, well, they are. But that, apparently, is not the proper term. They are the “job creators.”So President Obama’s deplorable class warfare rhetoric pits the so-called poor and middle classes against the job creator class.
And don’t try to sneak around that by calling them wealthy, big-wigs, plutocrats, oligarchs, fat-cats, tycoons or robber barons.
They are the true working class, working 24-7 to create jobs for you and other ingrates.
From the Obama Campaign:
Mitt Romney has an empathy problem. A new Washington Post/ABC News poll finds that 49 percent of respondents think that President Obama “better understands the economic problems people in this country are having.” Only 37 percent believe that Mr. Romney does. This echoes a finding from my own research: in a January YouGov poll, 51 percent said they believed that the phrase “cares about people like me” describes President Obama well, while 41 percent said that about Mr. Romney. And in a later poll, the empathy gap widened, with only 33 percent saying they believed that Mr. Romney cared about people like them. Perceptions of empathy are also correlated with whether people currently favor Mr. Romney or Mr. Obama.
But is the empathy gap the central obstacle to Mr. Romney’s campaign? Some commentators suggest that it is. On Tuesday, Chris Cilliza and Aaron Blake of The Washington Post said:
In our mind, tracking how the two candidates perform on this question between now and November is the single best measure (or at least one of them) of how the race will turn out. … Romney must — must — close the empathy gap to win this fall.
This view is predicated on a belief that Americans vote based on their perceptions of the candidates as people:
Presidential elections are rarely won and lost on policy. Voters instead tend to choose the person they most want to be president based on who they like. And that feeling is heavily influenced by which of the candidates they believe best understands their hopes and dreams.
Political science research presents a far more qualified view, however.
In reality, Republicans win all the time without closing the empathy gap. This is because Democratic candidates are generally perceived as more empathetic — more likely to “care about people like me” — than Republican candidates, regardless of who wins. Ronald Reagan in 1984, George H. W. Bush in 1988 and George W. Bush in 2000 and 2004 were all perceived as less empathetic than their Democratic opponents. Danny Hayes, a political scientist, has shownthat political parties come to “own” certain traits just like they “own” certain issues, and empathy is a “Democratic” trait. (By contrast, Republicans own “leadership,” at least in recent presidential races.) To be sure, Mr. Hayes shows that candidates benefit when voters come to view them favorably on trait dimensions that their party does not own. This might give Mr. Romney an incentive to feel some voters’ pain. Indeed, in February, Rick Santorum was, counter to stereotype, perceived as no less empathetic than Mr. Obama, so perhaps Mr. Romney could shift perceptions in his favor. But history shows that perceived empathy is no requirement for victory.
More generally, voters’ perceptions of candidates as people are not necessarily consequential to presidential election outcomes. In part, this is because perceptions of candidates are more a consequence than a cause of voting. Rather than objectively evaluate the candidates’ personal qualities, many if not most voters simply profess to like the candidate running in their preferred party and dislike the other party’s candidate. For example, according to my analysisof YouGov polls, 83 percent of Democrats view Mr. Obama as empathetic, but only 14 percent see Mr. Romney this way. Republicans have the opposite view: 82 percent view Mr. Romney as empathetic, but only 25 percent see Mr. Obama this way. Like most perceptions of candidates, perceptions of their traits are rife with partisan bias.
Furthermore, perceptions of candidates’ personalities aren’t necessarily consequential because there are many potential trait dimensions on which voters could evaluate candidates — honesty, leadership, empathy — and across these different dimensions, voters’ assessments may not help any one candidate. A candidate’s empathy advantage could be offset by a leadership disadvantage. Thus, the total effect of these trait perceptions on the election’s outcome would be small. This is exactly what the political scientist Larry Bartelsfound in a study of the presidential elections from 1980 to 2000. He wanted to know how these elections might have turned out if perceptions of the candidates’ traits had differed. So he simulated hypothetical elections — one in which the two candidates’ advantages and disadvantages on every trait dimension were erased. In other words, he made all the gaps — empathy and otherwise — disappear. What happened?
Not much. Across the six elections, the average change in the election’s outcome was 1.6 points. In no single election, except perhaps 2000’s, was the shift large enough to affect the outcome. In many elections, the results ran explicitly counter to the prevailing narratives of the campaign. Mr. Bartels is worth quoting in full here:
Ronald Reagan, the “great communicator” and consummate actor, had a net advantage of only 1 percentage point over Jimmy Carter in 1980 and a net advantage of less than 1 percentage point over Walter Mondale in 1984. Michael Dukakis, widely regarded as cold and politically inept, appears here to have been the only Democratic presidential candidate to enjoy a more favorable personal image than his Republican opponent. And Bill Clinton, a “once-in-a-lifetime political performer,” appears to have had the worst personal image of any presidential candidate in recent American history, at least as measured by the impact of trait assessments on electoral outcomes.
These small effects make sense if trait assessments are shaped by more fundamental political predispositions, like party identification, which themselves are the real movers of vote choice, and if a candidate’s advantages on some dimensions are offset by disadvantages on others.
So does that mean that Mr. Romney can just give up and accept his empathy gap? Maybe, maybe not. But the answer will certainly depend on how he is perceived on other dimensions relative to Mr. Obama — to say nothing of the many other factors that may prove more consequential in November. For example, voters’ assessments of the economy have improved but are hardly positive. Mr. Romney may be able to argue successfully that economic conditions under President Obama haven’t been good and aren’t improving fast enough. And all the empathy in the world probably won’t help Mr. Obama win if there’s a double-dip recession.
In general, be wary of any claim that there is a single path to victory, particularly if that path involves a candidate’s personality.
Have you heard that close to half of U.S. households currently don’t owe federal income tax? Does that mean, as some policymakers and pundits claim, that low- and moderate-income families don’t pay taxes, or don’t pay enough of them? Not at all, as our updated analysis of this widely misunderstood issue explains.
Here are some of its key points:
The oft-cited figure that 51 percent of households didn’t pay federal income tax in 2009 is a temporary spike caused by the recession. In 2007, before the economy turned down, 40 percent of households did not owe federal income tax.
These figures cover only the federal income tax and ignore the substantial amounts of other federal taxes — especially the payroll tax — that many of these households pay (see graphs at right). Some 82 percent of working households pay more in payroll taxes than in federal income taxes. In fact, low- and moderate-income people pay a much larger share of their incomes in federal payroll taxes than high-income people do.
Most of the people who pay neither federal income tax nor payroll taxes are low-income people who are elderly, unable to work due to a serious disability, or students, most of whom subsequently become taxpayers.
Low-income households also pay substantial state and local taxes. Most state and local taxes are regressive, meaning that low-income families pay a larger share of their incomes in these taxes than wealthier households do (see graph below).
When all federal, state, and local taxes are taken into account, the bottom fifth of households pays about 16 percent of their incomes in taxes, on average. The second-poorest fifth pays about 21 percent.
The fact that most people who don’t owe federal income tax in a given year do pay substantial amounts of other taxes — and also are net income taxpayers over time — belies the claim that households that do not owe income tax in a given year will form bad policy judgments because they “don’t have any skin in the game.”
Furthermore, although the federal tax system is progressive overall, state and local tax systems are regressive and undo a significant share of that progressivity. There is nothing wrong with having one part of the overall tax system shield low- and moderate-income households, who pay substantial amounts of other taxes and generally pay federal income tax as well in other years.
Why is this recovery different from all other recoveries? Many of the reasons are widely known: Rebounding from a financial crisis takes an excruciatingly long time; the huge decline in housing values has reduced Americans’ purchasing power; large corporations are making do with fewer employees — at least, in this country. But what really sets the current recovery apart from all its predecessors is this: Almost three years after economic growth resumed, the real value of Americans’ paychecks is stubbornly still shrinking…This recovery differs from its predecessors because it is concentrated among the affluent, and almost entirely among the very rich. Until we address the imbalance of power in the U.S. economy, and until Americans regain the clout that their parents and grandparents had to compel employers to share their revenue more equitably, the difference between our recoveries and our recessions will grow harder to discern.
The deadline for filing tax returns is almost upon us. If you are like me, you must be pondering how such a rich, high-technology democracy as the United States could endure what must be the most inefficient, mind-bogglingly complex tax system known to man. Either you’ve hired an accountant to prepare your tax returns or you’ve spent countless hours plowing through schedule after schedule, noting deductions, exemptions and limitations and hoping the software you are using will get it right. Exhausted and anxious, you’re thinking surely there must be a better way. There are, in fact, more efficient ways for government to collect money. They are much less complicated. And they can raise a lot of revenue to solve our long-run budget deficit and pay for the increased benefits demanded by our aging society. What’s more, they can do so without raising income tax rates. Unfortunately, history suggests we won’t really consider these alternatives.
In the drive to double America’s exports, Washington has been focusing on manufacturers. But that may be the wrong target. With an educated work force, a culture of innovation and strong capital markets, the United States has a larger comparative advantage in high-skilled services like engineering, law and finance than in lower-skilled manufacturing jobs that rely on cheap labor. For these reasons, economists see tremendous potential for growth — if, that is, Washington helps clear the way…America already exports more services than any other country in the world, even more than the next two competitors combined. In 2011, that amounted to $612 billion exported in services, up 10.1 percent from 2009, and up 136 percent since 1991. Still, there is great untapped potential for more, since all of these exports are being sold from a tiny share of all the American companies that could participate in the global marketplace.
In the depths of the financial crisis, borrowers with tarnished credit like Ms. Alejandro were almost entirely shut out from credit at traditional lenders. It was hard enough for people with stellar credit to get loans. But as financial institutions recover from the losses on loans made to troubled borrowers, some of the largest lenders to the less than creditworthy, including Capital One and GM Financial, are trying to woo them back, while HSBC and JPMorgan Chase are among those tiptoeing again into subprime lending. Credit card lenders gave out 1.1 million new cards to borrowers with damaged credit in December, up 12.3 percent from the same month a year earlier, according to Equifax’s credit trends report released in March. These borrowers accounted for 23 percent of new auto loans in the fourth quarter of 2011, up from 17 percent in the same period of 2009, Experian, a credit scoring firm, said.
US states are increasingly being blocked from changing public employees’ retirement benefits as the fight over shoring up chronically underfunded public pension systems moves from state legislatures to the courts. While some states have successfully altered terms for future employees, plans to force all current public workers to contribute more to state pensions have been ruled unconstitutional in Florida, Arizona and New Hampshire in recent weeks, a significant victory for public sector employee unions. Other states are expected to face similar legal battles as they plan to close large holes in their public pension funds by redrawing benefits. US state and local pensions could face a shortfall of as much as $4.4tn, up from $3.1tn in 2009, according to some estimates…The courtroom battles are being fought over the extent to which state laws protect benefits for existing workers. In many cases the question is where the defining line from which workers accrue benefits begins.
The reversal of fortune in America’s energy supplies in recent years holds the promise of abundant and cheaper fuel, and it could have profound effects on what people drive, domestic manufacturing and America’s foreign policy. Cheaper fuel produced domestically could reduce the cost of shipping and manufacturing, trim heating and cooling bills, improve the auto market and provide tens of thousands of new jobs. It might also pose new environmental challenges, both predictable and unforeseen, by damping enthusiasm for clean forms of energy and derailing efforts to wean the nation from its wasteful energy habits. But for Americans battered by rising gasoline prices, frustrated by the dependence on foreign oil, skeptical of the benefits or practicality of renewable fuels and afraid of nuclear power, the appeal of plentiful domestic oil and gas could far outweigh the costs.
Just a few years ago, the future of renewable energy looked as bright and shiny as a white turbine blade coming out of the mold. The federal government was handing out money under the stimulus package, states were approving clean energy mandates, young companies were racing ahead with promising new technologies and big global developers were planting stakes for ambitious, utility-scale projects. Now that picture has dimmed…Yet, though the waters ahead are choppy, with businesses laying off workers and shutting down, the prospects for renewables continue to grow. Major companies like General Electric, Dow Chemical and ConocoPhillips are developing or investing in new technologies. Many projects — some rushing to start in time to qualify for federal tax breaks before they disappear — are going forward. And the Obama administration has been using some of its powers to promote clean energy.
Here’s George Zimmerman’s new lawyer, Mark O’Mara last night discussing “Stand Your Ground” laws
Salon and AlterNet, two of the longest-running and most-visited independent online news organizations, today announced the Salon-AlterNet Investigative Fund to finance original reporting on under-covered issues. The series kicked off with “Inside the Growing Prescription Pill Epidemic That’s Ravaging Communities” – a deep analysis by former New York Times correspondent Evelyn Nieves into the rampant culture of prescription drug abuse in Appalachia.
“AlterNet is very pleased to be teaming up with Salon to produce top quality investigative work, ensuring that it reaches the largest audience possible,” said AlterNet executive editor Don Hazen. “Evelyn Nieves’ terrific piece about the scourge of pill addiction spreading across the land is a great start.”
In a post on Open Salon, Salon editor-in-chief Kerry Lauerman added, “We both earned our reputation for fierce independence by tenaciously reporting stories that make a difference – from the rapid expansion of U.S. drone policy to the severe abuse of Bradley Manning. This kind of journalism takes real resources, but we’re committed to hard-hitting investigative reporting and we’re looking forward to pursuing this mission with AlterNet.”
Reporters who want to propose a story for the Salon-AlterNet Investigative Fund should send a short pitch and two writing samples to “inve...@alternet.org”
AlterNet is an award-winning, progressive news site that combines original investigative reporting, breaking news culled from around the web, and smart analysis from America’s most influential progressive voices. Since its founding in 1998, AlterNet has grown to serve more than 2.6 million unique visitors and 10 million pageviews per month.
Salon Media Group (Ticker Symbol: SLNM.PK) is the home of Salon.com, the country’s largest independent news site, with a monthly audience of more than 7 million unique visitors. Salon.comcovers politics and culture through award-winning investigative reporting, fearless commentary and criticism, and provocative personal essays. A reader-supported medium, Salon readers help fund the site through its Core membership program, and contribute to its Open Salon blog network. Salon.com has bureaus in New York, Washington D.C. and San Francisco.
The task force report on the November 18, 2011 pepper spraying incident at UC Davis concludes that the incident “should and could have been prevented.” Images from the incident went viral and sparked a national outcry against the university. UC President Mark Yudof in a statement said: “We can and must do better. I look forward to working with Chancellor Katehi to repair the damage caused by this incident and to move this great campus forward.”
Use the calculator to see how your tax rate stacks up against Mitt Romney’s—and then see what the Buffett Rule would do.
And here’s Ronald Reagan supporting taxing the rich. Now called the “Reagan-Buffett Rule”
This week brought another major report on all the efforts in state capitals, almost all Republican-led, to restrict voting rights via new limits on voter registration, early voting, proof of residency and voter identification, all in the name of countering the phantom menace of voter fraud. In a conference call to announce the report, which was produced by the Center for American Progress, Rep. James Clyburn, the South Carolina Democrat, noted that the new rules had led several groups to stop registering voters in that most crucial of swing states, Florida, for fear of running afoul of the law: “To see the League of Women Voters walking away from voter registration activities in the state of Florida because to do so makes it almost inevitable that they will be brought before a court of law and charged with crimes — that is not the America so many of us started, back in our pre-teenaged years, working to make possible.”
This prompted me to wonder again, as I did when I first heard about the decision by the registration groups to abandon Florida, why there hasn’t been more visible pushback against the new restrictions. Back in the 1950s and ’60s, after all, people risked imprisonment and worse to protest on behalf of voting rights and civil rights. Why is the threat of penalties under an obviously unjust law now enough to discourage groups from challenging them outright?In Florida, for instance, the many new restrictions on registering voters include the requirement that any volunteers registering voters get all registration forms to the proper authorities within two days of the voters having been signed up. That’s down from an already strict 10-day window, and it’s a rule that’s awfully easy to break if you lack a car or if the good ole USPS doesn’t get your envelope to the right place in time. Why not just keep registering voters, doing one’s best to comply with the rules but daring the Florida authorities to haul you before the judge if you happen to fall outside the absurdly narrow lines?
Well, it turns out that a lot of thought went into this question. And several of the big voter registration groups decided that, for now, it was better to challenge the new rules in court rather than in the street, as it were. The thinking was that proceeding under the new rules was a lose-lose proposition. If one was able to proceed without getting accused of violating the rules, it might buttress the argument that the new rules were workable — even if the rules resulted in far lower registration totals in the past, as presumably would be the case. Meanwhile, if one did get accused of breaking the rules, the penalty might not be enough to provoke media attention and general outrage; but the resulting large fine or blot on one’s record might still be enough to cause real hardship for the volunteer in question.
Lee Rowland of New York University’s Brennan Center, which is representing the groups challenging the Florida rules in court, noted sympathetically that the NAACP, which is pressing ahead with registering voters in Florida, has seen its registration totals decline, even as it was slapped with a warning for delivering some forms an hour outside the 24-hourwindow. “You’re damned if you, damned if you don’t. If you screw up then your reputation is on the line and these laws are designed to make you screw up. You get a ding on a flawless record,” she said. “The NAACP has attempted to comply with the law, and had mixed success, but the new law has clearly chilled their activity…[It] is running afoul of the rules in a way that’s not flashy and drawing media attention – they’re just risking legal action and a big fine.”
The League of Women Voters, which proudly notes that it has not been cited for a single case of registration fraud in its 72 years of work, decided it was better off pulling back entirely and hoping the courts block the new rules ; a federal judge in Tallahassee is expected to decide soon whether to issue an injunction putting the new rules on hold while the challenge over their constitutionality is being weighed. “We looked at the specifics of the law and we strongly believed it would be jeopardizing to our volunteers, and that the regulations in and of themselves were simply not workable,” said Deirdre Mcnab, president of the Florida League of Women Voters. “The rules are confusing, vague and broad, and perhaps worst of all, they’re intimidating. Have you seen the forms you have to sign? It talks about $5,000 in fines and two years in prison and third-degree felonies. Knowing what I do about the law, as avid as I am to get people involved in the process, I’ve encouraged them to be very cautious or stay awayentirely.”
Heather Smith, president of Rock the Vote, sounded a similar note in explaining why her organization pulled out of Florida and joined the lawsuit instead. “It wasn’t a decision we made lightly,” she said. “It was with a great deal of reluctance that we halted our volunteer-led programs on the ground…But at the end of the day we decided that as a prudent organization, as a volunteer organization of high school and college-age volunteers…that we couldn’t put those young people at risk.”
As sensible as the groups’ logic is, it can’t help but leave one feeling slightly dissatisfied. Shouldn’t the response to voter suppression be to urge young people to get more engaged, not less, even if there is a risk of confrontation, as happened four and five decades ago? When I asked Clyburn about this, he argued that times had changed, and not necessarily for the better. “I cannot remember, even sitting in the Orangeburg County Jail, when I had as much anxiety as I’m experiencing today. Back then, even when we had to sit at the back of the bus, we felt strongly that what’s happening to me here, in Orangeburg, South Carolina, if I can just get my plight before the U.S. Supreme Court, the promise of the country will be delivered to me. I can remember our discussion in meetings — yeah, we’re going to jail now and we’re going to be convicted, but we know that the conviction is going to be overturned by the United States Supreme Court.”
His insinuation was plain: that young people facing the same question today can no longer be so sure. Still, though, one can’t help but wonder whether, in the absence of more direct and visible challenges to these new laws, the Clyburns of today are even asking themselves the question to begin with.
The American Legislative Exchange Council (ALEC) faces a run on its membership as Kraft, Pepsi, Coca-Cola, Intuit, theGates Foundation and, as of yesterday, McDonald’s broke ties with the conservative organization. While some companies are refusing to distance themselves from ALEC’s involvement in Voter ID legislation and support for the “stand your ground” laws that may play a pivotal role in the defense of Trayvon Martin’s shooter, newly released SEC documents show that shareholders are increasingly uncomfortable with their companies’ involvement in the conservative organization.
Newly filed SEC documents show that shareholders at five publicly traded companies are launching their own resolutions, to be voted on at upcoming annual meetings in May, calling on the companies to disclose their contributions to tax-exempt organizations, like ALEC, that write and endorse model legislation.
At the UPS annual meeting on May 3, in Wilmington, DE, shareholders will vote on a proposalcalling on the board to “authorize the preparation of a report, updated annually” disclosing the companies legislative and lobbying activities. A supporting statement reads:
UPS spent approximately $14 million in 2009 and 2010 on direct federal lobbying activities, according to disclosure reports. (U.S. Senate Office of Public Records). In 2010, UPS also spent at least $384,279 in 4 states that require lobbying expenditure disclosure (according to state disclosure reports). These figures may not include grassroots lobbying to influence legislation by mobilizing public support or opposition. Also, not all states require disclosure of lobbying expenditures to influence legislation or regulation. And UPS does not disclose contributions to tax-exempt organizations that write and endorse model legislation, such as the company’s $25,000 contribution to ALEC’s annual meeting (http://thinkprogress.org/politcs/2011/08/05/288823/alec-exposed-corporations-funding/).
Such expenditures and contributions can potentially involve the company in controversies posing reputational risks.
The UPS board urged shareholders to “vote AGAINST the proposal” because “UPS already has effective policies for the appropriate disclosure and oversight of the Company’s lobbying and political activities.”
According to SEC filings, nearly identical proposals — all citing ThinkProgress’s Aug. 2011 story— will come up for votes at the May annual meetings of the Altria Group, Union Pacific,Peabody Energy and Kraft Foods. All of the boards recommended that shareholders vote against the proposals.
Altria and Peabody both contributed at the “Chairman” level to ALEC, requiring a $50,000 contribution per year. UPS contributed $25,000 (“Vice Chairman” level) and Kraft and Union Pacific each contributed $5,000 (“Director” level).
A new report by a Bush administration economist has reignited the spin wars over the fiscal soundness of President Obama’s health care reform law, and is being promoted by conservatives as a counterweight to official, non-partisan government estimates that the law will reduce the deficit by billions of dollars over the next 10 years.
Making it all the more provocative is the fact that the author is the Republican Medicare trustee. His paper, published by the conservative Mercatus Institute, is designed to raise doubts about the soundness of the official estimates, causing editors and reporters, typically ill-equipped to adjudicate partisan disputes, to throw up their hands in frustration and cite it as a valid alternative to the consensus view that the health care law will improve the country’s budget situation. But it goes further than that, in subtle attacks on both ‘Obamacare’and Medicare, intentionally obscured by abstruse budget language and doomsday graphs.
At issue is the reform law’s seemingly inconsistent claim that it will take money from Medicare to subsidize the uninsured while at the same time extending the solvency of Medicare itself. It’s an impossible feat, opponents of entitlements argue, and proof that the law is nothing but fiscal smoke and mirrors. In reality this core promise of the health care reform law isn’t fiscally inconsistent, but it gives conservatives a subtle way to chew away at the roots of popular entitlement programs.
The paper’s central assumption is rooted in years-old conservative unhappiness with the structure of popular entitlement programs, which are financed via trust funds. These trust funds help keep the programs protected from legislative meddling by politicians who’d like to roll them back and spend the money elsewhere. But they also require complicated accounting methods that at times make it difficult for laypersons to understand how the financing regimens work — and allow opponents to muddy the political waters.
So how can Obama’s reform law both take from Medicare and give back to it all while extending insurance to tens of millions of Americans? Once you move beyond sound bites, it isn’t a difficult issue to understand. First, look at Medicare as a program all its own — an enduring feature of the domestic policy landscape, completely distinct from ‘Obamacare.’
Medicare spending is projected to explode over the coming years, in large measure because health care costs are becoming more expensive and, crucially, because we assume the country won’t support abruptly slashing benefits that have been promised to seniors their whole working lives. That means Congress has to frequently retool the program so that its per-beneficiary costs stay low. When the health care law took steps to dramatically reduce those expected future health care expenditures, the saved money was reallocated to extending health care coverage to the uninsured. Both programs win.
“For as long as anyone’s been doing either Medicare or budget projections, those projections have always assumed that Medicare hospital insurance benefits are paid in full, even if the trust fund at some point doesn’t have quite enough money to pay for 100 percent of benefits,” said Paul Van de Water, a Medicare expert at the liberal-leaning Center on Budget and Policy Priorities.
The Mercatus report comes at the problem a different way. It’s written by Charles Blahous, a top economic adviser to President George W. Bush who was active in that administration’s efforts to privatize Social Security. He concludes that the law will actually increase deficits by about $340 billion.
One of the conservative assumptions Blahour relies on to come to that conclusion is the basis of the so-called “double counting” critique, which says that if savings taken from Medicare are spent on other priorities, they can’t — or shouldn’t — also be counted toward improving the program’s solvency. Advocates of this argument raise a fair point: If the health care law used savings taken from other programs, then those programs would have to be shrunk, and wouldn’t automatically be allowed to draw on new government funds by fiat.
Doug Holtz-Eakin, a conservative economist and former director of the Congressional Budget Office who now runs the American Action Forum, argues for this point of view. Follow the money flowing into the Treasury from the Medicare taxes in the health care law, he advises.
“It comes into the Treasury, the Treasury says this is Medicare money, it gets deposited in the Medicare trust fund, Medicare doesn’t need the money now to pay so it gives it back to Treasury and gets bonds back instead,” Holtz-Eakin said.
Treasury then uses that money, among other things, to provide subsidies to the uninsured — it’s been spent. Years later, when Medicare needs to cash out that bond, the government has to either borrow, tax or cut other spending to honor it. The savings, in other words, didn’t really hold up. “[The law] increased the deficit and a future Congress has decided that’s not acceptable and does something about it,” Holtz-Eakin said.
There’s a real logic to this. But it requires looking at Medicare not as a retirement guarantee, but as an ordinary government program that hasn’t been promised to generations of workers, whose costs are baked into the country’s long-term budget.
“The point that Chuck makes is that from a technically correct, legal point of view, the hospital insurance part of Medicare is constrained so that once you’ve depleted the trust fund balance to zero you can only spend as much as is coming in, primarilyfrom payroll taxes,” Van de Water said. “If we did things that way, a lot of stuff would look different.”
Indeed, if things really worked this way, the country’s budget picture would look fine — Medicare cuts and Social Security cuts would happen abruptly and automatically whenever funding ran dry. That the public wouldn’t stand for this is key to the programs’ durability and the reason long-term budget projections look so dire. But they’re also why Obama is on solid ground saying he extended Medicare’s life and used the savings to pay for the health care law.
Unless future Congresses control Medicare-spending growth or increase funding to the program down the line — or unless ‘Obamacare’ does a better-than-expected job of reducing health care cost growth — the program’s costs are expected to swamp the rest of the budget in the coming decades. The trust fund system makes it difficult for Congress to do this simply by scaling back the program’s benefits. They’ve got to figure out how to preserve the guarantee. This is problematic for those who want to shrink government programs.
“I do not believe we should have trust funds,” Holtz-Eakin said. “Our budget problem is entitlements, and entitlements have trust funds.”
But for supporters of these programs, this is really just a Trojan horse.
“The trust fund notion is bound up with the notion of creating a system in which people are considered to have earned the right to their benefits by paying in taxes, whether it be Social Security or part A of Medicare,” Van de Water said. “Opponents of these programs don’t like that notion. It makes the programs too hard to change, and since they think they should be changed, they find that result unfortunate. Of course we know that both Medicare and Social Security and any other government program can be changed. While Social Security isn’t changed very often, Medicare is changed all the time [and] there’s a strong rationale for maintaining a strong degree of predictability and dependability on programs that people are counting on for their retirement benefits.”
The other Medicare trustee — Democratic appointee Robert Reischauer — dismisses the Mercatus study as misleading old hat.
So does Don Berwick, the man who led implementation of the health care law as director of the Center for Medicare and Medicaid Services. “The economist who’s coming up with this new standard, he’s simply arbitrarily abandoning a standard that the non-partisan CBO uses and has used for years,” Berwick said.
You can read the Mercatus report in full here.
Using TPM’s aggregation of the latest poll numbers, here is the current state of the electoral battleground. I’m even keeping in Rasmussen polls to give the GOP an unwarranted bump in their numbers.
[…] But Democrats have traditionally had an edge with the female vote. More striking is the fact that Obama narrowly leads Romney, 44%-42%, among men. Romney led this group, 47%-42%, in March, but Obama led, 45%-43%, in February, suggesting that Romney is vulnerable among male voters.
While the female side of the gender gap gets the most media attention, the male side is equally important. Men typical balanced out Republicans’ losses among women voters. If Romney is going to win, he’s going to have to reignite the GOP’s bromance with male voters.
In 2008, Obama won the White House with the support of women, 56%-43% but only barely edging out Republican nominee John McCain among men, 49%-48%. That translated into a 53%-47% win.
In 2004, George W. Bush lost the female vote to John Kerry, 51%-48%, but won the election by seizing the male vote, 55%-44%. In 2000, Bush essentially tied Al Gore by winning men by 11 points, while losing women by 10 points.
“The gender gap is a permanent feature of our politics,” said Karlyn Bowman, polling analyst for the free-market American Enterprise Institute. “Since the late 1970s or early 1980s, Republicans have done better with men and Democrats with women.”
Romney’s image as a man of wealth who has never gotten much dirt under his fingernails may be one explanation for his troubles with male voters.
Another explanation is that Obama is doing much better with his base than Romney. Obama gets the support of 87% of Democrats, but just 77% of Republicans back Romney. The gender gap appears in party registration too, with Republicans having more men and Democrats more women.
Pew Research News IQ Quiz
Why adjusting our expectations to reality is so difficult
Most of us hold unrealistically optimistic views of the future, research shows, downplaying the likelihood that we will have bad experiences. Now a study in Nature Neuroscience last October has found clues to the brain’s predilection for the positive, identifying regions that may fuel this “optimism bias” by preferentially responding to rosier information.
Tali Sharot, a University College London neurology researcher, and her colleagues asked 19 individuals between the ages of 19 and 27 to estimate their odds of experiencing 80 unfavorable events, such as contracting various diseases or being the victim of a crime. Participants were then told the actual average probability of each before repeating the exercise.
The participants revised most of their estimates the second time around, but 79 percent of those tested paid much more attention when their actual risk was lower than what they had initially guessed. After getting the good news, these subjects rated their risk for these events as significantly lower than they did earlier. In contrast, when they had underestimated their odds of meeting with a particular misfortune, they made less drastic revisions to their guess or none at all—clinging to their earlier belief that they would probably avoid the bad luck.
Using functional MRI, the researchers found areas in the prefrontal cortex, where conscious reasoning takes place, that were active when participants received information that was better than anticipated. The greater the difference between the subjects’ initial guess of their risk and the true probability, the more activity appeared in these regions, hinting that they contribute to positive error correction.
Activity in another part of the brain, the right inferior frontal gyrus, changed in response to discouraging information. There, however, activity did not correspond as closely with the magnitude of error in the participants’ initial risk estimates, matching the poorer correction later. That inconsistent neural response was observed most clearly or most often in individuals who scored higher on standard tests for optimism as a personality trait.
This finding jibes with past studies that observed an optimism bias in about 80 percent of the population. Its absence can signal anxiety or depression. Yet being overly optimistic has consequences, too, Sharot says, preventing us from taking some precautions to avoid harm or misfortune. Realizing the brain’s partiality may be half the battle. “If you are aware of the optimism bias, you can commit to actions or rules that will help protect you,” Sharot notes.
WAR ON WOMEN
Last week, Republican National Committee Chair Reince Priebus tried blaming the gender gap on the media’s reporting of Democratic talking points. According to Priebus, the right-wing attacks on women’s health are as real as the war on caterpillars.
The fact of the matter is the attacks on women’s health are not fiction. From 2011-2012, legislators in all 50 states introduced more than 1,500 measures targeting women’s health, and 130 anti-women’s health measure have already become law. The gender gap is very real and here’s why…
Last week’s USA Today/Gallup poll showed Obama with a significant lead over Romney among women, and a new Washington Post/ABC News poll released this morning confirmed this gender gap, showing Obama leading Romney by 19 points among women.
There’s a reason Mitt Romney is doing poorly in the polls: American women can tell fact from fiction.
The more Wal-Mart stores a county has, the more likely it is to have active hate groups in the area, according to Penn State economists.
“Wal-Mart has clearly done good things in these communities, especially in terms of lowering prices,” Stephan Goetz, professor of agricultural economics and regional economics, explained. “But there may be indirect costs that are not as obvious as other effects.”
The study, published in Social Science Quarterly, found that the number of Wal-Mart stores was a better predictor of hate group participation than the unemployment rate, high crime rates and low education.
There were 1,018 active hate groups in the United States in 2011, according to theSouthern Poverty Law Center, up from 1,002 in 2010.
The researchers believe that the correlation between Wal-Mart and hate groups exists because of breakdown of the community. Small local businesses are more likely to be members of civic groups and involved in the community. They are also more likely to have closer relationships among their employees.
“While we like to think of American society as being largely classless, merchants and bankers are part of what we could call a leadership class in a community,” Goetz said.
In contrast, people are more likely to feel alienated by big-box retailers like Wal-Mart, the researchers explained. They noted that areas that had Wal-Mart stores were also likely to have other big-box retailers, like Target.
“We’re not trying to pick on Wal-Mart,” said Goetz. “In this study, Wal-Mart is really serving as a proxy for any type of large retailer.”
“We doubt strongly that Wal-Mart intends to create such effects or that it specifically seeks to locate in places where hate groups form,” the researchers said.
QUOTE OF THE DAY:
“The Republican party is now facing a great crisis. It is to decide whether it will be, as in the days of Lincoln, the party of the plain people, the party of progress, the party of social and industrial justice; or whether it will be the party of privilege and of special interests, the heir to those who were Lincoln’s most bitter opponents, the party that represents the great interests within and without Wall Street which desire through their control over the servants of the public to be kept immune from punishment when they do wrong and to be given privileges to which they are not entitled.”
~ T. Roosevelt, The Outlook p812 (April 13, 1912)