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      Democrats will struggle to keep control of Congress in midterms, expert says

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      Democrats will struggle to keep control of Congress in midterms, expert saysRay Fair’s latest analysis suggests Democrats will get 46.7% of the national vote – and he usually comes within 3% of the final tally Since 1978 Ray Fair, ​​professor of Economics at Yale University, has been using economic data to predict US election outcomes. His bare-boned, strictly by the numbers approach has a fairly impressive record, usually coming within 3% of the final tally.Sadly for Democrats – if Fair’s on track again this time – the Biden administration will struggle to keep control of Congress in November’s crucial midterm elections.Elections are noisy events and this year’s is no different. Recent polling suggests Joe Biden is on a roll, reclaiming some of the ground he lost earlier in his presidency. The Democrats have passed major legislation. There has been a surge in women registering to vote after the supreme court overturned Roe v Wade. Abortion rights drove voters to the polls in deep-red Kansas. Gas prices, if not overall inflation, are falling. In the meantime, Donald Trump and the candidates he has backed are dominating the headlines and helping Democrats’ poll numbers.But if Fair is right, we can largely set aside the personalities and the issues: the economy is the signal behind the noise and Biden is still in trouble.Using data going back to 1916 Fair’s latest analysis suggests that Democrats will get 46.7% of the national vote in November – down from the 51.3% in 2020 when Biden defeated Donald Trump and took control of the House and a slim majority in the Senate.Fair’s model looks at the national picture, he doesn’t dig down to state battles and won’t be drawn into more granular prognostications. But given the gloomy economic picture in recent months, his prediction is unlikely to improve before November and suggests a loss in the House and a very tough fight to keep control of the Senate.When Fair’s last prediction was published in July, the Democrats’ share of the vote had fallen from 48.99% in October “due to two fewer strong growth quarters and slightly higher inflation”. The economic malaise has only deepened since then.“This prediction is based on business as usual,” said Fair. “It’s based on estimations back to 1918, a 100-plus years of data. In that period what seems to matter, election after election, is inflation, output, growth and the penalty you get for being the incumbent party in the White House.”Fair will update his model before the election and given its economic focus, Biden’s percentages are unlikely to improve. Inflation remains close to a 40-year high – soaring prices are now costing the average American household an extra $717 a month. The US economy has shrunk for two consecutive quarters, a sign taken by many as a harbinger of recession. Interest rates are rising at their sharpest pace since the 1990s as the Federal Reserve fights to tamp down price rises.The strength of the economic headwinds Biden faces are apparent even in his improving poll numbers. About 69% of Americans think the nation’s economy is getting worse – the highest percentage since 2008 – according to a recent ABC News/Washington Post poll.Fair doesn’t think elections are only about the economy. “This is not a perfect story, there’s room for other stories in each election,” he said. Given the equations narrow, economic focus he said it was “reasonable” that people were now looking at what other factors might impact the Democratic vote share in the midterms.One factor that may have skewed his results in the past, and could do again, is Donald Trump. In 2016 Fair’s model predicted Hillary Clinton would beat Trump. She did win 2.9m more votes than Trump, securing 48.2% of the vote to Trump’s 46.1%. But she lost in the electoral college.This time too Trump could be a factor, although he is difficult to measure. “There are many reasons why the Democrats may do better. Certainly Trump could be one of them,” said Fair.But history – or at least the history that Fair measures – suggests for all the recent positive polling, the Democrats face an uphill struggle this November.“How large is the error I make on average? It’s about 3 percentage points. If the prediction is 47 that would get you up to 50. So it’s a long shot that the Democrats would get more than half,” he said.TopicsUS politicsUS economyEconomicsJoe BidenDonald TrumpnewsReuse this content More

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      in US Politics

      Fed raises interest rate by 0.75 percentage points as US seeks to rein in inflation

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      Fed raises interest rate by 0.75 percentage points as US seeks to rein in inflationThird outsized rate increase in a row as central bank struggles to fight runaway inflation, increasing the cost of everything The Federal Reserve announced another sharp hike in interest rates on Wednesday as the central bank struggles to rein in runaway inflation.The Fed raised its benchmark interest rate by 0.75 percentage points, the third such outsized rate increase in a row, bringing the Fed rate to 3%-3.25% and increasing the cost of everything from credit card debt and mortgages to company financing.The central bank signaled more raises to come, predicting rates would reach 4.4% by the end of the year and not start coming down until 2024. The Fed expects the rate rises to hit the job market – raising unemployment from 3.7% to 4.4% next year – housing prices and to lower economic growth.“We have got to get inflation behind us. I wish there were a painless way to do that. There isn’t,” the Fed chair, Jerome Powell, said. “We have always understood that restoring price stability while achieving a relatively modest increase in unemployment and a soft landing would be very challenging. And we don’t know. No one knows whether this process will lead to a recession or if so, how significant that recession would be.”Central bankers around the world are raising rates sharply as they too attempt to tackle the cost of living crisis. This week the Bank of England is expected to announce its largest rate rise in 25 years. The European Central Bank raised interest rates across the eurozone by a record margin earlier this month.The Fed initially dismissed rising inflation, arguing it was a “transitory” phase triggered by the pandemic and supply chain issues. But as prices escalated the Fed announced a series of aggressive moves in the hopes of bringing prices back under control.Until recently Powell had said he hoped that the economy could achieve what he called a “soft landing” – a slowdown that would bring costs down but not lead to a spike in unemployment and a recession.Speaking at a congressional hearing on Wednesday, some of the US’s top bankers said it was too early to tell how rate rises would impact the economy. “I think there’s a chance, not a big change, a small chance, of a soft landing,” said Jamie Dimon, chief executive of JPMorgan Chase.“There’s a chance of a mild recession, a chance of a hard recession. And because of the war in Ukraine and the uncertainty in global energy and food supply, there’s a chance that it could be worse. I think policymakers should be prepared for the worst, so we take the right actions if and when that happens,” he said.Raising rates makes borrowing more expensive which should reduce spending and lower prices. But the policy is a blunt instrument and rate rises take time to filter through to the wider economy. So far the Fed’s rate rises have not had a significant impact.The US jobs market remains robust, with unemployment still close to a 50-year low, consumer spending rose last month and inflation remained stubbornly high in August, 8.3% higher than a year ago.There are, however, some signs of a slowdown. Existing home sales fell in August for the seventh consecutive month, according to the National Association of Realtors. Sales were 19.9% lower than in August 2021 and are now at their lowest level since they briefly stalled during the height of the pandemic in 2020. And large employers including BestBuy, Ford and Walmart have announced layoffs or hiring freezes.TopicsFederal ReserveUS economyBank of EnglandInflationEconomicsEuropean Central BankUS politicsnewsReuse this content More

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      in US Politics

      Criticism intensifies after big oil admits ‘gaslighting’ public over green aims

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      Criticism intensifies after big oil admits ‘gaslighting’ public over green aimsFury as ‘explosive’ files reveal largest oil companies contradicted public statements and wished bedbugs upon critical activists Criticism in the US of the oil industry’s obfuscation over the climate crisis is intensifying after internal documents showed companies attempted to distance themselves from agreed climate goals, admitted “gaslighting” the public over purported efforts to go green, and even wished critical activists be infested by bedbugs.The communications were unveiled as part of a congressional hearing held in Washington DC, where an investigation into the role of fossil fuels in driving the climate crisis produced documents obtained from the oil giants ExxonMobil, Chevron, Shell and BP.“First they ignore you, then they laugh at you, then they wish bedbugs on you, then you win,” said Varshini Prakash, executive director of Sunrise. The organization accused Shell of a “legacy of violence and of ignoring the wellbeing of communities across the globe”.Pakistan floods ‘made up to 50% worse by global heating’Read moreThe revelations are part of the third hearing held by the House committee on oversight and reform on how the fossil-fuel industry sought to hamper the effort to address the climate crisis. Democrats, who lead the committee, called top executives from the oil companies to testify last year, in which they denied they had misled the public.The new documents are “the latest evidence that oil giants keep lying about their commitments to help solve the climate crisis and should never be trusted by policymakers”, said Richard Wiles, president of the Center for Climate Integrity.“If there is one thing consistent about the oil and gas majors’ position on climate, it’s their utter inability to tell the truth,” Wiles added.Ro Khanna, co-chair of the committee, said the new documents are “explosive” and show a “culture of intense disrespect” to climate activists. The oil giants’ “climate pledges rely on unproven technology, accounting gimmicks and misleading language to hide the reality,” he added. “Big oil executives are laughing at the people trying to protect our planet while they knowingly work to destroy it.”Several of the emails and memos within the released trove of documents appear to show executives, staffers and lobbyists internally contradicting public pronouncements by their companies to act on lowering planet-heating emissions.Exxon, which recently announced profits of $17.9bn for the three months until June, more than three times what it earned in the same quarter a year ago, has publicly said it is “committed” to the Paris climate agreement to curb global heating.However, the documents released by the Democratic-led House committee include an August 2019 memo by an executive to Darren Woods, Exxon’s chief executive, on the need to “remove reference to Paris agreement” from an announcement by an industry lobby group that Exxon is a member of.Such a statement “could create a potential commitment to advocate on the Paris agreement goals”, the executive warned. A separate note on a 2018 Exxon presentation also admitted that biofuels derived from algae was still “decades away from the scale we need”, despite the company long promoting it as a way to lower emissions.Shell, meanwhile, has committed to becoming a “net zero” emissions business by 2050, and yet the documents show a private 2020 communication in which employees are urged to never “imply, suggest, or leave it open for possible misinterpretation that (net zero) is a Shell goal or target”. Shell has “no immediate plans to move to a net-zero emissions portfolio” over the next 10 to 20 years, it added.A Shell tweet posted in 2020 asking others what they could do to reduce emissions resulted in a torrent of ridicule from Twitter users. A communications executive for the company wrote privately that criticism that the tweet was “gaslighting” the public was “not totally without merit” and that the tweet was “pretty tone deaf”. He added: “We are, after all, in a tweet like this implying others need to sacrifice without focusing on ourselves.”The UK-headquartered oil company, which in July announced a record $11.5bn quarterly profit, also poured scorn on climate activists, with a communications specialist at the company emailing in 2019 that he wished “bedbugs” upon the Sunrise Movement, a youth-led US climate group.Previous releases of internal documents have shown that the oil industry knew of the devastating impact of climate change but chose instead to downplay and even deny these findings publicly in order to maintain their business model.The hearings have been attacked by Republicans as a method to “wage war on America’s energy producers” and the oil companies involved have complained that the documents don’t show the full picture of their stance on the climate crisis.Exxon supports the 2015 Paris climate deal, a spokesman said, claiming that the “selective publication of dated emails, without context, is a deliberate attempt to generate a narrative that does not reflect the commitment of ExxonMobil and its employees, to address climate change and play a leading role in the transition to a net-zero future.”A Shell spokesman, meanwhile, said the committee chose to highlight only a small handful of the nearly half a million pages it provided to the body on its “extensive efforts” to take part in the energy transition.“Within that pursuit are challenging internal and external discussions that signal Shell’s intent to form partnerships and share pathways we deem critical to becoming a net-zero energy business,” he said.TopicsClimate crisisUS politicsFossil fuelsOilnewsReuse this content More

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      in US Politics

      Republicans planning legal assault on climate disclosure rules for public companies

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      Republicans planning legal assault on climate disclosure rules for public companiesThe SEC’s proposed new rules, which would require public corporations to disclose climate-related information, have been critized by industry groups Republican officials and corporate lobby groups are teeing up a multi-pronged legal assault on the Biden administration’s effort to help investors hold public corporations accountable for their carbon emissions and other climate change risks.The US Securities and Exchange Commission (SEC) proposed new climate disclosure rules in March that would require public companies to report the climate-related impact and risks to their businesses.The regulator has since received more than 14,500 comments. Submissions from 24 Republican state attorneys general and some of the country’s most powerful industry associations suggest that these groups are preparing a series of legal challenges after the regulation is finalized, which could happen as soon as next month.“I would expect a litigation challenge to be brought immediately once the final rule is released,” Jill E Fisch, a business law professor at the University of Pennsylvania, told the Guardian. “They probably have their complaints already drafted, and they’re ready to file.”Some opponents claim that requiring companies to publish climate-related information infringes on their right to free speech. Others (often the same ones) say that the rule exceeds the SEC’s legal authority.Both critiques feature prominently in comments from the Republican attorneys general and the US Chamber of Commerce, which spent more than $35m lobbying the federal government in the first half of 2022, according to OpenSecrets. The Republican letter warns that if the new disclosure requirements are finalized, “capitalism will fall by the wayside.”The SEC proposal does not establish environmental policy or require that companies take any climate-related actions other than making more information publicly available.The free speech and legal authority objections have been met with profound skepticism from legal experts and former SEC officials.In a letter to the commission, John Coates, a Harvard Law School professor and former SEC general counsel, said that instead of challenging the climate disclosure rule on its merits, “critics have resorted to mischaracterizing the proposal, and inventing their own, fictional rule”.How a top US business lobby promised climate action – but worked to block effortsRead moreIn another letter, a bipartisan group of former SEC officials, legal scholars, securities law experts and corporate lawyers noted that “the SEC has mandated environmental disclosure at least as far back as the Nixon administration.” Even though not all of the letter’s authors support the substance of the rulemaking, they agreed without exception “that there is no legal basis to doubt the commission’s authority to mandate public-company disclosures related to climate.”“The SEC is promulgating a disclosure rule that’s square within its wheelhouse,” said Fisch, of the University of Pennsylvania. “It’s exactly what Congress told it to do, and which it has done consistently since 1933.”But the legal authority and free speech charges, however tenuous, are not the only grounds on which opponents of the climate disclosure rule have hinted at litigation.In a recent analysis, the Guardian revealed how the Business Roundtable, a lobbying group for CEOs of America’s biggest companies, opposes a key provision of the SEC proposal that would require some large companies to measure and report emissions generated throughout their supply chains – known as Scope 3 emissions.Chart showing the difference between Scope 1, 2, and 3 emissions.In addition to challenging the substance of the rule, the Business Roundtable also rejects the SEC’s estimate of how much it would cost businesses to comply. (The organization said in an email that its comments “[are] focused on identifying challenges in the proposed rule in the hopes the SEC will address them.”)The SEC projects that companies will face compliance costs of $490,000 to $640,000 in the first year of climate reporting, and less in subsequent years. (By comparison, a 2019 study predicted that climate change could cost firms around $1trn over the following five years.)A detailed assessment from Shivaram Rajgopal, Columbia Business School professor of accounting and auditing, concluded that even without taking into account any benefits from the climate disclosure rule, the costs would prove negligible for most firms. “The loss in market capitalization, if any, from compliance costs is likely too tiny for any outsider to detect and to separate from daily volatility in the stock returns for unrelated reasons,” Rajgopal wrote.Last quarter ExxonMobil earned nearly $18bn in profit, the largest quarterly earning in the company’s history. Over the same period, General Motors generated more than $35bn in revenue, while Walmart reported revenues of nearly $153bn. The Economist recently reported that after-tax corporate profits as a share of the US economy have surged to their highest level since the 1940s.ExxonMobil, GM and Walmart are members of the US Chamber of Commerce and the Business Roundtable. According to a report from the nonprofit Center for Political Accountability, during the 2020 election cycle each company donated at least $125,000 to the Republican Attorneys General Association, which supports the political campaigns and legal agendas of GOP attorneys general across the country.In their letter to the SEC, 24 of these attorneys general called the commission’s cost-benefit analysis “woefully unfinished” and warned that finalizing the climate disclosure rules “will undoubtedly draw legal challenges”.The Business Roundtable, meanwhile, described the analysis as “fundamentally flawed” and said that its member companies “believe [the costs of the rule] will be orders of magnitude more than what the SEC estimates.” The chamber issued a similar condemnation, writing in its voluminous submission that the SEC’s “economic analysis … is incomplete and substantially underestimates compliance costs.”Asked to comment, neither organization responded specifically to questions of whether it planned to pursue legal action against the SEC if the final rule is not changed significantly.Trade associations might be expected to instinctively oppose new regulations, but in the past such statements have proven to be more than routine political rhetoric. On multiple occasions in response to prior rulemakings, the chamber and the Business Roundtable have successfully sued the SEC on cost-benefit grounds.In 2011, following a suit filed by the two groups, the DC circuit struck down an SEC rule that would have made it easier for shareholders to consider new board members for public companies, deeming the rule “arbitrary and capricious”. The decision in Business Roundtable v SEC said that the commission “neglected its statutory obligation to assess the economic consequences of its rule”, citing, among other figures, a cost estimate submitted to the SEC by the chamber.In their comments on the climate disclosure proposal, the Republican attorneys general and the chamber each cite Business Roundtable v SEC in claiming that the SEC’s cost-benefit analysis is flawed.The Republican letter is co-led by Patrick Morrisey, the West Virginia attorney general who recently helmed a successful legal challenge to the Environmental Protection Agency (EPA).In West Virginia v EPA, the Supreme Court endorsed a relatively novel legal notion – the so-called “major questions doctrine” – to halt an EPA effort to regulate greenhouse gas emissions from power plants. As the Bulletin of the Atomic Scientists explained, “Under this doctrine, when a regulation crosses a certain threshold of being ‘major’ – a line which remains poorly defined – the court rejects the regulation unless it has been clearly authorized by Congress.”The major questions doctrine looks to be the basis of Morrisey’s campaign against the climate disclosure rule. In a July TV appearance, Morrisey said that the Biden administration “can’t get the congressional majorities behind their policies, so they’re trying to resort to the [regulations]. But as we saw with West Virginia v EPA, I don’t think the courts are going to let that happen.” (Morrisey’s office did not respond to emails requesting comment.)“I don’t think there’s any natural reason to infer that the court’s decision [in West Virginia v EPA] would have any implications for the SEC,” said the University of Pennsylvania’s Jill Fisch. “At the same time, you can read the West Virginia case, and you can say: ‘This is part of the Supreme Court, and the federal courts generally, taking a different look at government agencies. This is cutting back on the fourth branch, on the power of the administrative state.’ And if that’s true, in theory, everything is up for grabs.”“Historical legal precedent suggests that the SEC has a pretty strong case,” Tyler Gellasch, the president and CEO of the nonprofit Healthy Markets Association, said. “But if you’re the Business Roundtable, you don’t necessarily need historical legal precedent on your side. You just need a court today. And that seems far more likely today than it would have been at any time in modern history.”TopicsClimate crisisBiden administrationSecurities and Exchange CommissionUS politicsReuse this content More

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      in World Politics

      How Aging America Is Driving Consumer Inertia

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      The Fair Observer website uses digital cookies so it can collect statistics on how many visitors come to the site, what content is viewed and for how long, and the general location of the computer network of the visitor. These statistics are collected and processed using the Google Analytics service. Fair Observer uses these aggregate statistics from website visits to help improve the content of the website and to provide regular reports to our current and future donors and funding organizations. The type of digital cookie information collected during your visit and any derived data cannot be used or combined with other information to personally identify you. Fair Observer does not use personal data collected from its website for advertising purposes or to market to you.As a convenience to you, Fair Observer provides buttons that link to popular social media sites, called social sharing buttons, to help you share Fair Observer content and your comments and opinions about it on these social media sites. These social sharing buttons are provided by and are part of these social media sites. They may collect and use personal data as described in their respective policies. Fair Observer does not receive personal data from your use of these social sharing buttons. It is not necessary that you use these buttons to read Fair Observer content or to share on social media. More

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      in US Politics

      You might think Starbucks is a ‘progressive’ company. You’d be wrong | Hamilton Nolan

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      You might think Starbucks is a ‘progressive’ company. You’d be wrongHamilton NolanRarely in modern history have we seen a company that so exquisitely cultivates an image as a caring, progressive employer while actually acting like a bullying, union-busting gangster Corporate hypocrisy is as old as corporations themselves. But there are levels. It is important to recognize astounding achievements in business insincerity. So let us send a note of congratulations today to Starbucks: rarely in modern history have we witnessed a company that so exquisitely combines a cultivated image as a caring, progressive employer with the well-documented, large-scale behavior of a gangster who expects to rule employees through bullying and fear.The $100bn coffee-and-flavored-syrup chain meticulously refers to its employees as “partners”. What does it mean to be a partner to someone? Reasonable people might say that a partnership is a relationship in which you treat the other person as an equal, zealously uphold their basic rights, and deal with them in all cases as fully formed human beings deserving of respect. Luckily for Starbucks, they’ve had a great chance to exhibit these values over the past year, as thousands of employees at more than 230 of their stores across the country have voted to unionize. The historic union wave has offered the company an unprecedented opportunity to respect their “partners’” right to organize; to listen to their concerns and requests for change; and to bargain contracts with them in good faith, as partners, of course, should.To say that Starbucks has failed to live up to their progressive reputation would be far too polite. It’s more like the union is Scooby-Doo, and they have yanked off the company’s pleasant mask to reveal Tony Soprano lurking underneath.This week, the National Labor Relations Board (NLRB) said that Starbucks had illegally withheld raises and other benefits from its unionized workers. This is one of the oldest pseudo-friendly union busting tactics in the book – a company in the midst of a union campaign will hand out goodies to its non-union employees and then shrug theatrically and say: “Gee, we’re not allowed to give these things to the union people!” (which, as the NLRB has affirmed, is a lie).And that giant, illegal ripoff is not even the worst part. The union, Starbucks Workers United, says that the company has fired more than 85 workers for organizing. The company has begun permanently closing stores that recently unionized or were in the process of doing so. The NLRB still has hundreds of charges of illegal labor practices against Starbucks that it has yet to rule on. There were so many GoFundMe campaigns floating around for fired Starbucks workers that the union finally had to set up a national Solidarity Fund to try to help them all. In the midst of all of this brash intimidation, Starbucks has complained that the NLRB has unfairly favored the union, which is akin to a bank robber complaining that the police are unfairly favoring the bank.What accounts for the hubris of a company that so boldly risks its own reputation to flout labor law and treat its “partners” like so many automatons who must be whipped back into submission? I’m no psychoanalyst, but I imagine that it flows from the same source as the hubris that made the billionaire Starbucks CEO Howard Schultz imagine that he could get elected president as an independent. It seems that none of Schultz’s sycophants were brave enough to tell him up front that he is, perhaps, the single worst presidential candidate you could ever imagine: Conservatives hate him because he pretends to be progressive; progressives hate him because he is, in fact, a cutthroat billionaire businessman who slathers himself in symbolic liberalism to ward off accurate criticism; and his own employees hate him because he treats their request for labor rights like an act of war.Schultz, who returned to Starbucks as CEO this year for the express purpose of fumbling the company’s response to unionization, seems to imagine himself as some sort of kindly Stewart Brand figure who will redeem capitalism, but acts in practice like just another irate union-buster – Andrew Carnegie with an espresso machine. (A monstrous bit of Democratic party trivia: Hillary Clinton reportedly considered Schultz as labor secretary in her presidential administration, something that the next reporter to interview Clinton should absolutely ask her about.)It may be that the very idea of a “progressive corporation” is, given the realities of American capitalism, an oxymoron. But anyone who has ever held a job understands what a good employer is. It is someone who treats workers as humans. When you get right down to it, the demands of the many Starbucks workers who have unionized are downright modest. They have asked the company to sign a pledge to simply allow workers to choose to organize “without fear of reprisal”. The company has not only refused to sign, but has dedicated itself to instilling fear of reprisal in the hearts of every single employee. That is not how a good boss treats his workers. That is not how a genuine progressive treats anyone. And it is certainly not how you would treat a “partner”.In Boston, recently, I stopped by a unionized Starbucks store where workers have been on strike for more than a month. Through scorching days and lonely nights, these young workers, who could have spent the time doing anything more fun, have maintained a 24/7 picket line. That is not something people do if they do not care – about their co-workers, about their rights, and about the company itself. Schultz, who sits in his $30m mansion and sends out messages exhorting his employees to show “collective courage”, has not been there. He should pay it a visit. I bet they could teach him a lot about what real progressive values look like.
      Hamilton Nolan is a writer based in New York
      TopicsUS politicsOpinionUS unionsStarbucksCorporate governanceFood & drink industrycommentReuse this content More

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      in UK Politics

      ‘Action needed now’ says British Chambers of Commerce as deeper, longer recession looms

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      For free real time breaking news alerts sent straight to your inbox sign up to our breaking news emails Sign up to our free breaking news emails Business leaders have called on the new prime minister to urgently tackle the economic crisis as new estimates suggest the looming recession will last longer than forecast. “Action […] More