US Politics

The Fed is about to raise interest rates and shaft American workers – againRobert ReichPolicymakers fear a labor shortage is pushing up wages and prices. Wrong. Real wages are down and workers are struggling The January jobs report from the US labor department is heightening fears that a so-called “tight” labor market is fueling inflation, and therefore the Fed must put on the brakes by raising interest rates.This line of reasoning is totally wrong.Trump and his enablers unwittingly offer Democrats the best hope in the midterms | Robert ReichRead moreAmong the biggest job gains in January were workers who are normally temporary and paid low wages: leisure and hospitality, retail, transport and warehousing. In January, employers cut fewer of these workers than in most years because of rising customer demand combined with Omicron’s negative effect on the supply of workers. Due to the Bureau of Labor Statistics’ “seasonal adjustment”, cutting fewer workers than usual for this time of year appears as “adding lots of jobs”.Fed policymakers are poised to raise interest rates at their March meeting and then continue raising them, in order to slow the economy. They fear that a labor shortage is pushing up wages, which in turn are pushing up prices – and that this wage-price spiral could get out of control.It’s a huge mistake. Higher interest rates will harm millions of workers who will be involuntarily drafted into the inflation fight by losing jobs or long-overdue pay raises. There’s no “labor shortage” pushing up wages. There’s a shortage of good jobs paying adequate wages to support working families. Raising interest rates will worsen this shortage.There’s no “wage-price spiral” either, even though Fed chief Jerome Powell has expressed concern about wage hikes pushing up prices. To the contrary, workers’ real wages have dropped because of inflation. Even though overall wages have climbed, they’ve failed to keep up with price increases – making most workers worse off in terms of the purchasing power of their dollars.Wage-price spirals used to be a problem. Remember when John F Kennedy “jawboned” steel executives and the United Steel Workers to keep a lid on wages and prices? But such spirals are no longer a problem. That’s because the typical worker today has little or no bargaining power.Only 6% of private-sector workers are unionized. A half-century ago, more than a third were. Today, corporations can increase output by outsourcing just about anything anywhere because capital is global. A half-century ago, corporations needing more output had to bargain with their own workers to get it.These changes have shifted power from labor to capital – increasing the share of the economic pie going to profits and shrinking the share going to wages. This power shift ended wage-price spirals.Slowing the economy won’t remedy either of the two real causes of today’s inflation – continuing worldwide bottlenecks in the supply of goods and the ease with which big corporations (with record profits) pass these costs to customers in higher prices.Supply bottlenecks are all around us. Just take a look at all the ships with billions of dollars of cargo idling outside the Ports of Los Angeles and Long Beach, through which 40% of all US seaborne imports flow.Big corporations have no incentive to absorb the rising costs of such supplies – even with profit margins at their highest level in 70 years. They have enough market power to pass these costs on to consumers, sometimes using inflation to justify even bigger price hikes.“A little bit of inflation is always good in our business,” the chief executive of Kroger said last June.“What we are very good at is pricing,” the chief executive of Colgate-Palmolive said in October.In fact, the Fed’s plan to slow the economy is the opposite of what’s needed now or in the foreseeable future. Covid is still with us. Even in its wake, we’ll be dealing with its damaging consequences for years: everything from long-term Covid to school children months or years behind.Friday’s jobs report shows that the economy is still 2.9m jobs below what it had in February 2020. Given the growth of the US population, it’s 4.5m short of what it would have by now had there been no pandemic.Consumers are almost tapped out. Not only are real (inflation-adjusted) incomes down but pandemic assistance has ended. Extra jobless benefits are gone. Child tax credits have expired. Rent moratoriums are over. Small wonder consumer spending fell 0.6% in December, the first decrease since last February.Many people are understandably gloomy about the future. The University of Michigan consumer sentiment survey plummeted in January to its lowest level since late 2011, back when the economy was trying to recover from the global financial crisis. The Conference Board’s index of confidence also dropped in January.Given all this, the last thing average working people need is for the Fed to raise interest rates and slow the economy further. The problem most people face isn’t inflation. It’s a lack of good jobs.
Robert Reich, a former US secretary of labor, is professor of public policy at the University of California at Berkeley and the author of Saving Capitalism: For the Many, Not the Few and The Common Good. His new book, The System: Who Rigged It, How We Fix It, is out now. He is a Guardian US columnist. His newsletter is at robertreich.substack.com
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Wealthy California town cites mountain lion habitat to deny affordable housing Officials in Woodside – a mansion-filled, tech entrepreneur enclave – claim wildcat land keeps them from building multi-unit homes At first glance, the town of Woodside may look more like a sprawl of mansions built on big-tech billions than crucial habitat for threatened California mountain lions.But town officials might suggest looking again.The wealthy San Francisco Bay area suburb has said it cannot approve the development of new duplexes or fourplexes to ease the statewide housing shortage because it encompasses the habitat of the elusive wildcats.Crow-plagued California city turns to lasers and boomboxes to clear the airRead moreResidents in Woodside had long bristled at SB 9 – a new California measure that makes it easier to build multi-unit housing in neighborhoods previously reserved for single-family homes. But a clause in the measure exempts areas that are considered habitat for protected species. “Given that Woodside – in its entirety” is habitat for mountain lions that environmental groups are petitioning to list as threatened or endangered under the state’s Endangered Species Act, “no parcel within Woodside is currently eligible for an SB 9 project”, the town’s planning director wrote in a memo on 27 January.Critics of the town council, including many housing advocates, have accused the town of cynically using environmental concerns to avoid compliance with state law. “This is nimbyism disguised as environmentalism,” said Scott Wiener, a California senator who co-authored SB 9. “The notion that building duplexes hurts mountain lions – it’s just ridiculous.”Woodside is not only a habitat for mountain lions, but also for notable tech entrepreneurs including the Intuit co-founder Scott Cook and Oracle co-founder Larry Ellison. The latter modeled his 23-acre Woodside estate on a 16th-century Japanese imperial palace. The median home price in the town is $5.5m, and the median household income is more than $250,000. The landscape is scattered with sizable mansions and estates as well as sprawling ranches.Mountain lions – also called pumas, cougars and panthers – have been known to wander into suburbs and cities across California, and may occasionally traverse the town. “You can see there’s a fair amount of habitat in the undeveloped areas around the city,” said Winston Vickers, director of the Mountain Lion Project at the UC Davis Wildlife Health Center.“Any development should be done with careful consideration of whether it is going to impact a nearby travel corridor, green belt or large adjacent habitat area for mountain lions,” Vickers said. “But to say that any expansion of housing, anywhere in a given city, would likely impact mountain lions is likely a bit of a stretch.”Woodside’s mayor, Dick Brown, declined an interview request from the Guardian. “We love animals,” he told AlmanacNews. “Every house that’s built is one more acre taken away from [mountain lions’] habitat. Where are they going to go? Pretty soon we’ll have nothing but asphalt and no animals or birds.”As far as wildlife biologists know, mountain lions are not especially comfortable on land zoned for single family homes, nor are they particularly put off by two-story apartment buildings.The biggest challenge that mountain lions are facing is “ex-urban development pushing into the wild areas that they need, and major roadways cutting through those habitats,” said Josh Rosenau, a conservation advocate with the Mountain Lion Foundation, one of the organizations seeking to have the mountain lions in the south and central coast listed as threatened or endangered under the California Endangered Species Act.In most cases, “increasing [housing] density where possible, is going to be better for mountain lions ultimately”, he said, than expanding construction further into wildland areas.As California pushes to expand housing amid a crisis of housing affordability and homelessness, communities across the state have resisted efforts to build more densely, often using the state’s strict environmental laws as a shield. With SB 9 taking effect this year, cities across the state also sought to pass design restrictions, or designate historic districts and sites in a scramble to find loopholes in the law.Earlier last month, Woodside had passed an ordinance prohibiting basements in SB 9 developments, capping their size to 800 square feet – the minimum required by the law – and prohibiting their construction in “very high fire severity zones, for health and safety reasons”.“My hope is that Woodside thinks better of its position, and figures out how to comply with this new law,” Wiener said.Or there’s an option that some critics have offered: return all the land to the mountain lions that once prowled there freely.TopicsCaliforniaWildlifeUS politicsnewsReuse this content More

California county recalls top official, giving militia-aligned group a path to governmentSupervisor Leonard Moty has been ousted after two years of threats and increasing hostility over pandemic health restrictions Voters in far northern California have solidified the ouster of a Republican county official, giving control of the Shasta county board of supervisors to a group supported by local militia members.Leonard Moty, a retired police chief and Republican with decades of public service, lost his seat in a recall election in one of California’s most conservative counties. The Tuesday recall came as tensions reached a high in the county after two years of threats and increasing hostility toward moderate Republican officials over pandemic health restrictions.California county on track to be run by militia-aligned groupRead more“I really thought my community would step up to the plate and they didn’t and that’s very discouraging,” Moty said in an interview with the Guardian earlier this week, warning the recall would shift the area to the “alt-right”.Updated polling numbers released on Friday showed about 56% of 8,752 voters supported recalling Moty. Cathy Darling Allen, the county registrar of voters, said there were about 121 ballots left to count. The results won’t be finalized until next month, but the two candidates in the lead to replace Moty attended a celebration on Tuesday with members of an area militia group, the Sacramento Bee reported.The recall is a win for the county’s ultra-conservative movement in their efforts to gain a foothold in local government in this rural part of northern California and fight back against moderate Republicans they felt didn’t do enough to resist state health rules during the pandemic.Though Shasta county was among the least restrictive in California amid Covid, residents unhappy about state rules and mask requirements have showed up to meetings in large numbers since 2020. Moty and others were subjected to what law enforcement has deemed “credible threats” and personal attacks in meetings – one person told him that bullets are expensive, but “ropes are reusable”.Experts have warned the pandemic and eroding trust in US institutions has fueled extremism in local politics and hostility against officials. In Shasta county, the successful recall campaign will likely set up more conflict between the local government and the state government, said Lisa Pruitt, a rural law expert at the University of California, Davis.Carlos Zapata, a local militia member who helped organize the recall efforts, in 2020 told the board there could be blood in the streets if the supervisors didn’t reject state health rules such as mask requirements.“This is a warning for what’s coming. It’s not going to be peaceful much longer. It’s going to be real … I’ve been in combat and I never wanted to go back again, but I’m telling you what – I will to stay in this country. If it has to be against our own citizens, it will happen. And there’s a million people like me, and you won’t stop us,” he said.TopicsCaliforniaUS politicsThe far rightCoronavirusnewsReuse this content More

Republican party calls January 6 attack ‘legitimate political discourse’Party censures Cheney and Kinzinger, the only Republicans on the Capitol attack House panel, as Pence says ‘Trump is wrong’ In an extraordinary move, the Republican party officially said Donald Trump’s attempt to overturn his 2020 election defeat and the deadly attack on the US Capitol were “legitimate political discourse”.Revealed: Trump reviewed draft order that authorized voting machines to be seizedRead moreA leading Democrat on the House committee investigating the January 6 insurrection said historians would be “aghast”.The move by the Republican National Committee (RNC) came at its winter meetings in Salt Lake City on Friday, as part of the formal censure of Liz Cheney of Wyoming and Adam Kinzinger of Illinois, the only Republicans on the January 6 panel.A resolution approved unanimously said Cheney and Kinzinger were engaged in the “persecution of ordinary citizens engaged in legitimate political discourse”.On January 6, 2021, two weeks before the inauguration of Joe Biden, the US Capitol in Washington was attacked by Trump supporters who the former president had told to “fight like hell” in service of his lie that his defeat was the result of electoral fraud.The Confederate battle flag was carried into the halls of Congress. Rioters smeared feces on walls. Property was stolen, windows smashed. Members of Congress were hurried to safety. Some rioters sought lawmakers to capture and possibly kill. Some chanted for the hanging of Mike Pence, Trump’s vice-president who resisted pressure to refuse to certify electoral college results.Seven people died. More than 100 police officers were hurt. More than 700 people have been charged. Eleven members of a far-right militia face charges of seditious conspiracy.Steve Bannon, a close Trump adviser, has pleaded not guilty to criminal contempt of Congress. Mark Meadows, Trump’s White House chief of staff, could face the same sanction.Trump was impeached for inciting an insurrection but acquitted by Republican senators. He has repeatedly promised pardons for January 6 rioters if he is president again. He has openly stated that his goal was to “overturn” the election.Revelations concerning his involvement in events prior to and on January 6 keep coming.On Friday, the Guardian revealed that Trump personally reviewed a draft executive order concerning the seizure of voting machines in key states and came close to approving the appointment of Sidney Powell, a lawyer and conspiracy theorist, as a special counsel to investigate electoral fraud.CNN, meanwhile, reported that Trump spoke to Jim Jordan of Ohio, a leading ally House ally, for 10 minutes on the morning of January 6.What did Jim Jordan know about the insurrection and when did he know it? | Sidney BlumenthalRead moreWhat Jordan knew about the Capitol attack and when he knew it remains a central part of the House investigation. Jordan has refused to co-operate. Many expect him to play a prominent role in moves for vengeance should Republicans retake the House in November’s midterm elections.Newt Gingrich, a former House speaker and candidate for the presidential nomination now advising Republican leaders, has said the party could seek to jail members of the January 6 committee.Some establishment Republicans have stood up to Trump. Pence, who faces a difficult balancing act ahead of a likely presidential run in 2024, spoke on Friday at a Florida event staged by the conservative Federalist Society.“President Trump is wrong,” he said. “I had no right to overturn the election.”Pence also said: “The truth is there’s more at stake than our party or our political fortunes. If we lose faith in the constitution, we won’t just lose elections – we’ll lose our country.”Mitt Romney, meanwhile, was one of seven Republican senators who voted to impeach Trump in 2021 over the Capitol attack – and the only one to vote to convict in Trump’s first impeachment in 2019, over approaches to Ukraine for dirt on Biden. On Friday, the Utah senator condemned the decision to censure Cheney and Kinzinger.“Shame falls on a party that would censure persons of conscience, who seek truth in the face of vitriol,” Romney wrote. “Honour attaches to Liz Cheney and Adam Kinzinger for seeking truth even when doing so comes at great personal cost.”Romney, the 2012 Republican nominee for president, did not mention that the RNC chair, Ronna McDaniel, is his niece. McDaniel stopped using Romney in her name after Trump took power.Other Republicans in Congress, media reported, sought to avoid discussion of the RNC resolution. Democrats excoriated it. Jamie Raskin of Maryland, a member of the January 6 committee who led Trump’s second impeachment, told the New York Times: “The Republican party is so off the deep end now that they are describing an attempted coup and a deadly insurrection as political expression.“It is a scandal that historians will be aghast at.”Rick Wilson, a former Republican strategist now part of the anti-Trump Lincoln Project, said the resolution showed his old party was now a “cult”. Republicans, he said, “don’t get to retcon 1/6”.The RNC seems determined to try, though it has not yet gone further and kicked Cheney and Kinzinger out of the party, a goal of many Trump supporters.Kinzinger will leave Congress in November, among Republicans who voted for impeachment who have said they will retire.He said he had been censured for upholding his oath of office by a party which had “allowed conspiracies and toxic tribalism to hinder their ability to see clear-eyed”.Cheney, the daughter of the former congressman, defense secretary and vice-president Dick Cheney, faces a Trump-backed challenger endorsed by her own state party.She said: “The leaders of the Republican party have made themselves willing hostages to a man who admits he tried to overturn a presidential election and suggests he would pardon January 6 defendants, some of whom have been charged with seditious conspiracy.“I’m a constitutional conservative and I do not recognise those in my party who have abandoned the constitution to embrace Donald Trump. History will be their judge. I will never stop fighting for our constitutional republic. No matter what.”McDaniel told the Washington Post: “We’ve had two members engage in a Democrat-led persecution of ordinary citizens who engaged in legitimate political discourse. This has gone beyond their original intent. They are not sticking up for hard-working Republicans.”TopicsRepublicansUS Capitol attackUS politicsnewsReuse this content More

US appears to shake off Omicron and adds nearly half a million January jobsEconomists had predicted dramatic slump in job growth but labor department figures much better than expected The US economy appeared to shake off the Omicron variant in January as employers added 467,000 new jobs, the labor department reported on Friday.Data for the report was collected in mid-January when the Omicron variant was at its peak in the US. While some economists – and the White House – had predicted a dramatic slump in jobs growth, the number of jobs added was far better than expected.The unemployment rate remained low overall at 4%, down from a pandemic high of 14.8% in April 2020 but up from 3.9% in December.The news comes at a sensitive time for the Biden administration and the Federal Reserve. The US economy is wrestling with soaring inflation and signs of an economic slowdown after last year’s strong rebound.Joe Biden celebrated the jobs news in a speech in Washington. “America is back to work,” Biden said. “History’s been made here.”His comments were in stark contrast to those made by White House officials earlier in the week. In a highly unusual move, the White House sought to manage expectations ahead of the latest jobs figure release, cautioning that Friday’s jobs report could be “confusing” because of the timing of the survey and suggesting that the US would add few or even lose jobs in January.Covid infections have fallen sharply across the US since the report was compiled.The government report follows on from a survey conducted by ADP, the US’s largest private payroll supplier, which reported that companies cut jobs in January for the first time in more than a year. Payrolls fell by 301,000 for the month with more than half the losses coming from the pandemic-sensitive leisure and hospitality industries.“The labor market recovery took a step back at the start of 2022 due to the effect of the Omicron variant and its significant, though likely temporary, impact to job growth,” said Nela Richardson, ADP’s chief economist.There were signs that the jobs market is still recovering ahead of Friday’s report. On Thursday, the labor department reported that new unemployment claims fell to 238,000 for the final week in January, dropping 23,000 from the week prior, a second straight week of falls.TopicsUS economyUS unemployment and employment statisticsUnemployment and employment statisticsCoronavirusOmicron variantUS politicsnewsReuse this content More

A court caught Republicans discriminating against Black voters – here’s howAn Alabama case tests how much Republicans can legally dilute the power of Black votersIt has been called a textbook example of discrimination against Black voters in the US. And a ruling on it from the supreme court is expected any day.It isn’t the kind of explicit voting discrimination, like poll taxes and literacy tests, that kept voters from the polls in the south during the Jim Crow era. Instead, it is more subtle. Let us walk you through the case with our visual explainer. The case focuses on Alabama, where the Republican-controlled legislature, like states across the US, recently completed the once-a-decade process of redrawing the boundaries of congressional maps. If partisan politicians exert too much control over the redistricting process, they can effectively engineer their own victories, or blunt the advantages of the other side, by allocating voters of particular political persuasions and backgrounds to particular districts.Under the new districts, Black people make up 25% of the Alabama’s population, but comprise a majority in just one of the state’s seven districts.In late January, a panel of three federal judges issued a 225-page opinion explaining how the state was discriminating against Black voters.“Black voters have less opportunity than other Alabamians to elect candidates of their choice to Congress,” the panel wrote. 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