All the news, views, and filtered excellence fit to consume during your morning grumpy.
1. An interesting take on Obama and the white working class.
The problem, as on almost all issues relating to government’s role, is centered on whites, particularly those in the working class….Just 18 percent believe Obamacare will leave their family better off, compared to 38 percent who believe they will be worse off as a result.
….Gallup Polling in March 2010 found that while few whites expected to personally benefit from the law, a majority of them believed it would benefit low-income families and those without health insurance. That suggested they viewed health care reform primarily as a welfare program that would help the needy but not their own families.
We’re still operating off cultural assumptions that the tax dollars of white working class voters are being funneled to “lazy” lower class voters. It’s not a eureka moment, but it’s interesting to see the issue illustrated by polling results. Obama won the battle by getting Obamacare passed, but he lost the war on the messaging. People still overwhelmingly support the components of the bill when presented with them, but think the bill is bad for them. How did a Presidential candidate with such incredible communication skills lose so solidly on this front as a President?
2. Another cool idea from Detroit, pop-up retail shops in commercial districts with high vacancy rates.
“A lot of retailers are enthusiastic about a retail comeback because they remember downtown shopping at Winkleman’s, Kresge and Hudson’s department store when they were young,” Kazmierak said. “They are curious about the big players who are igniting this retail movement downtown.
The Downtown Detroit Partnership recently hired Heather Kazmierak as retail program manager to entice suburban retailers in Wayne, Oakland, Macomb and Washtenaw counties to sign short-term leases in vacant stores along Woodward Avenue.
The newest addition to downtown is D:Hive Detroit, a multipurpose facility on Woodward Avenue. Margarita Barry, owner of 71Pop.com, opened the first short-term boutique last week and seeks to recruit other entrepreneurs with limited start-up capital.
Temporary retail stores have become a permanent part of the Metro Detroit and nationwide retail scene because there is too much vacant space and not enough retailers willing to sign long-term leases.
3. The following is a common story in the new economy. Caterpillar, a heavy machine company reported $15BN in profits on $60BN in revenue for FY11. CEO Douglas Oberhelman earned $16.9 million in 2011 in salary, bonuses, stock and option awards and retirement plan contributions. Also, healthy dividends were paid to shareholders and forward looking guidance on both revenue and profit were very healthy. So, what’s the next move for the company? If you guessed “break the union and get wage and benefit concessions”, you nailed it!
780 union members went on strike May 1 after rejecting the company’s proposal for a new six-year pact. Union officials said the deal offered no raises while weakening seniority rights and increased health care costs at a time when Caterpillar was making record profits.
Bruce Boaz, an assembler at the Joliet plant for 39 years, repeated what other union members have said. “With all the money this company is making, all we want is a fair deal. (In previous contracts,) we gave away stuff when times were bad. Now it’s time for us to reap some benefits.”
The deal also eliminated the pension plan for younger workers. You might remember when Fortune Magazine wrote that Caterpillar was “crushing it” when it came to profitability. Guess that’s MBA newspeak for “screw the workers who helped us do it”. America 2012!
4. Some “inside the numbers” analysis on swing state economies and why the national unemployment numbers might not hurt President Obama in the general election.
Most of the swing states by the third quarter of this year will have a lower unemployment rate than the national average,” said Xu Cheng, a senior economist at Moody’s Analytics who compiled the latest state-by-state economic data and updated Moody’s voting model for POLITICO. “And most of the battlegrounds will be below 8 percent unemployment, which will negate the ‘grumpy voter effect.’” Cheng was referring to data suggesting voters will discount by half any improvement in joblessness if the national rate remains above 8.
An interesting, yet very cautious analysis.
5. Ezra Klein makes the Keynesian case for Mitt Romney…based on assumptions of Republican actions in the event of an Obama victory and the ensuing gridlock.
The Congressional Budget Office estimates that if Congress gridlocks this year — if it simply gets nothing done — the economy will take a $607 billion hit in 2013 as the Bush tax cuts expire, the payroll tax cut expires and assorted spending cuts kick in. Falling off that “fiscal cliff,” they predict, will throw us back into recession.
Speaker John Boehner has said he wants another debt-ceiling showdown. We’re not expected to hit the debt ceiling until February or March, and so the only scenario in which the debt ceiling matters is one in which Congress has already pushed us over the fiscal cliff. So as bad as the last debt-ceiling crisis was — and Gallup’s polling showed it did more damage to consumer confidence than the fall of Lehman Bros — this one would be worse.
However, if Romney wins…
Time magazine asked (Romney) about cutting spending in 2013. “If you take a trillion dollars for instance, out of the first year of the federal budget, that would shrink GDP over 5 percent,” Romney said. “That is by definition throwing us into recession or depression. So I’m not going to do that, of course.” You couldn’t have gotten a clearer definition of Keynesian budgeting from Obama.
There’s a good chance that a Romney administration would extend both Bush and Obama’s tax cuts and delay the scheduled spending cuts. Congress would raise the debt ceiling after Romney promised congressional Republicans that he’d sign some variant of Paul Ryan’s budget as soon as it’s sent to him. Somewhere along the way, Romney would pass both more short-term tax cuts and a long-term transportation bill — something Republicans have been blocking under Obama — that doubles as an infrastructure package and includes, to secure Republican support, the Keystone XL oil pipeline.
An interesting argument, which Klein describes as “vote for us or the recovery gets it”. I assume this will be undercurrent throughout election season.
Fact Of The Day: The Texas Department of Justice keeps track of all the last statements of those executed by the state and posts those words to the Internet shortly after they die.
Quote Of The Day: “This land is your land and this land is my land, sure, but the world is run by those that never listen to music anyway.” – Bob Dylan
Video Of The Day: “We Stopped Dreaming” – Neil DeGrasse Tyson
Song Of The Day: “Don’t Come Knocking” – Bono with Andrea Corr
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