Trump aims at insurers in battle over healthcare subsidies

Reuters Politics

Trump aims at insurers in battle over healthcare subsidies

Susan Heavey and Caroline Humer     July 31, 2017

WASHINGTON/NEW YORK (Reuters) – U.S. President Donald Trump took aim at insurers on Monday in an escalating threat to cut the healthcare subsidy payments that make Obamacare plans affordable, after repeatedly urging Republican senators to keep working to undo his Democratic predecessor’s healthcare law.

“If ObamaCare is hurting people, & it is, why shouldn’t it hurt the insurance companies & why should Congress not be paying what public pays?” Trump, a Republican, wrote on Twitter.

Trump, frustrated that he and Republicans have not been able to keep campaign promises to repeal and replace Obamacare, has threatened to let it implode. So far, the administration has continued to make the monthly subsidy payments, but withholding them would be one way to make good on Trump’s threat.

Republican Senator Rand Paul told reporters on Monday he spoke to Trump by phone and the president was considering taking executive action to address problems with the healthcare system.

Paul said he told Trump he thought he had the authority to create associations that would allow organizations – such as the AARP that represents retirees, or the U.S. Chamber of Commerce – to offer group health insurance plans.

The White House declined to comment on matter.

On Capitol Hill, Senate Finance Committee Chairman Orrin Hatch said senators were too divided to keep working on healthcare overhaul legislation, and that he and other senior Republicans would take that message to the White House.

“There’s just too much animosity and we’re too divided on healthcare,” Hatch said in an interview. He said lawmakers could return to a healthcare overhaul later but for now should pivot to tax reform.

Some senators were not ready to drop healthcare, however.

Senator Bill Cassidy, Republican of Louisiana, met with Health and Human Services Secretary Tom Price and several Republican state governors at the White House on Monday to discuss a proposal Cassidy and others have made to send federal healthcare funds to the states in grants, Cassidy told reporters.

But Cassidy said he had not discussed bringing his proposal to the Senate floor with Senate leaders. And the third-ranking Republican senator, John Thune, told reporters Monday evening that until there is a proposal that can win a majority of senators’ support, “I think we’ve had our vote and we’re moving onto tax reform.”

Hatch, in the interview with Reuters, also said he thought Congress would have to approve new funds for the government’s cost-sharing reduction subsidies to insurers that Trump had been threatening to end. These subsidies lower the price of health coverage for the poor under the Affordable Care Act, known as Obamacare.

Insurers have asked the government to commit to making the $8 billion in payments for 2018, saying they may raise rates or leave the individual insurance marketplace if there is too much uncertainty.

Reporting by Susan Heavey, Caroline Humer, Susan Cornwell and Amanda Becker; Editing by Richard Chang and Tom Brown

Related:

Reuters  Politics

Exclusive: Senate too divided to keep up healthcare push – Senator Hatch

Susan Cornwell      July 31, 2017

WASHINGTON (Reuters) – U.S. Senate Finance Committee Chairman Orrin Hatch said on Monday that senators for now are too divided to keep working on healthcare overhaul legislation and that he and other senior Republicans will take that message to the White House.

President Donald Trump has been urging lawmakers not to drop the matter, despite a series of failed votes last week. “There’s just too much animosity and we’re too divided on healthcare,” Hatch said in an interview with Reuters.

He said he would prefer Congress not appropriate cost-sharing subsidies that help make Obamacare plans affordable but added, “I think we’re going to have to do that.”

Trump over the weekend urged Republican senators to stick with trying to pass an overhaul of the Affordable Care Act, former President Obama’s signature domestic initiative known as Obamacare.

Trump made replacing Obamacare a key part of his presidential campaign and Republicans have promised for years to repeal or replace the law. The House of Representatives has passed an overhaul but the Senate has been unable to do so despite having worked on it for months. Three Senate Republicans joined Democrats in voting against repealing even part of the law at the end of last week.

“Don’t give up Republican senators, the world is watching: Repeal & Replace …,” Trump tweeted on Sunday while White House budget director Mick Mulvaney said the Senate should stay in session to get something done on healthcare, even if it means postponing votes on other issues.

Hatch said although he understood Mulvaney’s position, he did not think he was right. The senator said he saw no real desire on the part of Democrats to work together on the healthcare issue “and I have to say some Republicans are at fault there, too.”

Hatch said he had not given up on healthcare. “I think we ought to acknowledge that we can come back to healthcare afterwards but we need to move ahead on tax reform,” Hatch said.

Asked who would relay the message to the Trump administration, Hatch laughed and said, “I’m going to be one who does that,” adding that he expected Republican leaders of the House and Senate, Paul Ryan and Mitch McConnell, would do so, too.

Hatch said lawmakers would need to appropriate the cost-sharing subsidy payments that the administration has been making. Trump has threatened to cut off these subsidies, which help insurers keep deductibles down for low-income people who get health insurance through the Obamacare exchanges.

“I’m for helping the poor, always have been. And I don’t think they should be bereft of healthcare,” Hatch said.

Additional reporting by David Morgan; Editing by Kevin Drawbaugh and Bill Trott

Farm-To-Table May Feel Virtuous, But It’s Food Labor That’s Ripe For Change

NPR

The Salt Opinion-What’s On Your Table

Farm-To-Table May Feel Virtuous, But It’s Food Labor That’s Ripe For Change

Andrea Reusing       July 30, 2017

Mexican farmworkers harvest lettuce in a field outside of Brawley, Calif.

Sandy Huffaker/AFP/Getty Images

Novel and thrilling in earlier days, today’s farm-to-table restaurant menus have scaled new heights of supposed transparency. The specificity can be weirdly opaque, much like an actual menu item that recently made the rounds: Quail Egg Coated in the Ashes of Dried Sheep’s S***. Farm-to-table fatigue is most evident in those of us who cook in farm-to-table restaurants — Even We Are Sick of Us.

In the 15 years since Lantern opened, guests at my Asian-influenced farm-to-table restaurant have only rarely asked why a white girl from New Jersey is cooking fried rice in North Carolina alongside a kitchen crew mostly born in Mexico. The food we cook is openly and inherently inauthentic. But guests are sometimes surprised to learn that every single thing we serve isn’t both local and organic, that our relatively expensive menu yields only slim profit or that we can’t afford a group health plan. Diners occasionally comment that our use of Alaskan salmon or California cilantro has detracted from a truly “authentic” farm-to-table experience.

The ubiquity that makes farm-to-table meaningless also gives it its power. It has come to signify authenticity on almost any level, suggesting practices as complicated as adherence to fair labor standards, supply chain transparency or avoidance of GMOs. As farm-to-table has slipped further away from the food movement and into the realms of foodie-ism and corporate marketing, it is increasingly unhitched from the issues it is so often assumed to address.

Farm-to-table’s sincere glow distracts from how the production and processing of even the most pristine ingredients — from field or dock or slaughterhouse to restaurant or school cafeteria — is nearly always configured to rely on cheap labor. Work very often performed by people who are themselves poor and hungry.

Inequality does not affect our food system — our food system is built on inequality and requires it to function. The components of this inequality —racism, lack of access to capital, exploitation, land loss, nutritional and health disparities in communities of color, to name some — are tightly connected. Our nearly 20-year obsession with food and chefs has neither expanded access to high-quality food nor improved nutrition in low-resource neighborhoods.

Only an honest look at how food gets to the table in the U.S. can begin to unwind these connections.

Food workers, as members of both the largest and lowest-paid U.S. workforce, are in a unique position to lead these conversations. Many of us have already helped incubate policy change on wage equality, organic certification and the humane treatment of animals. But a simpler and maybe even more powerful way we can be catalysts for real change in the food system is to simply tell the stories of who we are.

Take immigration. Our current policy renders much of the U.S. workforce completely invisible. This is more true in the food industry than in any other place in American life. There is a widespread disconnect on the critical role recent immigrants play in producing our food and an underlying empathy gap when it comes to the reality of daily life for these low-wage food workers and their families.

The Salt –Cheap Eats, Cheap Labor: The Hidden Human Costs Of Those Lists

Cheap Eats, Cheap Labor: The Hidden Human Costs Of Those Lists

The Salt –Dinner in Appalachia: Finding Common Ground In Trump Country

Dinner in Appalachia: Finding Common Ground In Trump Country

For example, here in North Carolina, over 150,000 immigrant farm and food-processing workers harvest nearly all the local food we eat and export, but their living and working conditions would shock most Americans.

Our state produces half the sweet potatoes grown in the U.S. — 500,000 tons a year — which are all harvested by hand. A worker here has to dig and haul 2 tons to earn about $50. In meatpacking plants, horrific injuries and deaths resulting from unsafe working conditions are widespread. Farmworkers are exposed to far more pesticides than you or I would get on our spinach. Poverty wages allow ripe strawberries to be sold cheaply enough to be displayed un-refrigerated, piled high in produce section towers. Nearly half of immigrant farm workers and their families in North Carolina are food insecure.

When as chefs we wonder whether a pork chop tastes better if the pig ate corn or nuts but we don’t talk about the people who worked in the slaughterhouse where it was processed, we are creating a kind of theater. We encourage our audience to suspend their disbelief.

The theater our audience sees — abundant grocery stores and farmers markets, absurdly cheap fast food and our farm-to-table dining rooms — resembles what Jean Baudrillard famously called the simulacrum, a kind of heightened parallel world that, like Disneyland, is an artifice with no meaningful connection to the real world.

As chefs, we need to talk more about the economic realities of our kitchens and dining rooms and allow eaters to begin to experience them as we do: imperfect places where abundance and hope exist beside scarcity and compromise. Places that are weakened by the same structural inequality that afflicts every aspect of American life.

Roger Ebert described the capacity of movies to be “like a machine that generates empathy.” With more expansive definitions of authenticity and transparency, restaurants can become empathy machines and diners will get a better understanding of the lives of the people who feed us.

Reusing (@AndreaReusing) is the James Beard award-winning chef at Lantern in Chapel Hill, N.C.

About This Essay

This essay was crafted in response to a summit on racism and difference in food, staged at Rivendell Writers Colony by The Southern Foodways Alliance and Soul Summit.

Trump threatens insurer payments and health care enjoyed by Congress

STAT

Trump threatens insurer payments and health care enjoyed by Congress

Lev Facher, STAT News      July 29, 2017

WASHINGTON — President Trump on Saturday indicated he will make good on a months-old threat to destabilize the health insurance market if Senate Republicans cannot repeal and replace major elements of the Affordable Care Act.

Donald J. Trump @realDonaldTrump….If a new HealthCare Bill is not approved quickly, BAILOUTS for Insurance Companies and BAILOUTS for Members of Congress will end very soon!    July 29, 2017

The first part of the ultimatum likely refers to cost-sharing reduction payments made by the federal government to insurers, which in turn offer discounted plans for many low- or middle-income Americans buying plans through ACA marketplaces.

The second portion, while far narrower in scope, is significant in that it highlights an additional tool at the president’s disposal for acting unilaterally on health policy. Though ACA repeal has been in the spotlight throughout 2017, other rumblings regarding subsidies specific to Congress have been rare.

In January, Rep. Ron DeSantis (R-Fl.) introduced a bill that would end an exemption enabling members of Congress and Capitol Hill staff to obtain employer contributions from the government to pay for plans on D.C.’s small-business exchange, which the federal Office of Personnel Management in 2013 issued guidance to allow.

Read more: Get ready for the next big health care fight. This one’s all about kids

“By blowing the whistle on this special deal concocted by OPM, we will make members of Congress better understand the burdens of ObamaCare, thereby incentivizing members to get to work on a good repeal and replace plan,” DeSantis wrote then in a statement.

Heather Higgins, CEO of the conservative-leaning advocacy group Independent Women’s Voice, wrote last week in a Wall Street Journal op-ed: “Congress is essentially unaffected by the high costs of the ObamaCare exchanges because of a special exemption crafted under the Obama administration.” Some subsidies obtained via D.C.’s small-business exchange, the op-ed claimed, were worth as much as $12,000 annually.

While Trump’s meaning was not entirely clear, it is possible he could direct OPM to rescind the ruling enabling the exemption, as a coalition of right-wing groups encouraged him to do in a July 21st letter.

The president’s threat regarding cost-sharing reduction payments, however, is more broadly impactful, more familiar, and more widely understood.

It also echoes a warning made by Senate Majority Leader Mitch McConnell (R-Ky.) in the early hours of Friday, just after his chamber’s efforts to pass a narrow compromise bill fell one vote short.

“I bet I’m pretty safe in saying, for most of the people on this side of the aisle, that bailing out insurance companies — bailing out insurance companies with no thought of any kind of reform — is not something I want to be part of,” McConnell said in his speech on the Senate floor.

Trump has made the threat before, indicating he believed ending the payments would leave Democrats with no choice but to negotiate with Republicans on a broader repeal bill. But it takes on added significance in light of GOP senators’ setback.

Insurers have repeatedly indicated that ending CSR payments would throw markets into turmoil and even cause the type of “death spiral” Republicans in Congress have long warned against.

The Congressional Budget Office has estimated the payments’ value at $7 billion in 2017, $10 billion in 2018, and $11 billion in 2019.

The Kaiser Family Foundation projects that without CSR payments, the cost of “silver” insurance plans in Medicaid expansion states would increase by 15 percent, and in non-expansion states by 21 percent.

Senate Minority Leader Chuck Schumer (D-N.Y.) responded to Trump quickly via the same medium on Saturday:

Chuck Schumer @SenSchumer… If @POTUS  refuses to make CSR payments, every expert agrees that premiums will go up & #healthcare will be more expensive for millions. July 29, 2017

Trump Supporters Furious That They Still Have Health Care

The New Yorker

Satire from The Borowitz Report

Trump Supporters Furious That They Still Have Health Care

By Andy Borowitz        July 28, 2017

Photograph by Sean Rayford / Getty

WASHINGTON (The Borowitz Report)—With a fury that could spell political trouble for Republicans in the midterm elections, Trump voters across the country on Friday expressed their outrage and anger that they still have health coverage.

“I went to bed Thursday night and slept like a baby, assuming that when I woke up I would have zero health insurance,” Carol Foyler, a Trump voter, said. “Instead, this nightmare.”

Harland Dorrinson, who voted for Trump “because he promised that he would take my health care away from me on Day 1,” said that he was “very upset” that he will still receive that benefit.

“I woke up this morning, and my family and I could still see a doctor,” he said. “This is a betrayal.”

Many Trump supporters said that congressional Republicans “gave up too soon” in their efforts to deprive ordinary Americans like them of their health care.

“They should not take August off,” Calvin Denoit, a Trump supporter, said. “They should stay in Washington and keep working until I totally lose my coverage.”

For Trump voters like Benoit, the abject disappointment of continuing to have health care raises fears about which other campaign promises might soon be broken.

“Now I don’t know what to believe,” he said. “Are we still going to get to pay billions of dollars in taxes for that wall?”

Andy Borowitz is the New York Times best-selling author of “The 50 Funniest American Writers,” and a comedian who has written for The New Yorker since 1998. He writes the Borowitz Report, a satirical column on the news, for newyorker.com.

Shell preparing for world economy that shifts away from oil

Washington Post Business

Shell preparing for world economy that shifts away from oil

FILE – This Wednesday, Jan. 20, 2016, photo shows the Shell logo at a petrol station in London. Royal Dutch Shell is planning for the day when demand for oil starts fading as major economies move away from oil and increasingly turn to electric-powered cars. (Kirsty Wigglesworth, File/Associated Press)

The Associated Press    By Danica Kirka       July 28, 2017

LONDON — Royal Dutch Shell is planning for the day when demand for oil starts fading as major economies move away from oil and increasingly turn to electric-powered cars, Chief Executive Ben van Beurden said Thursday.

Van Beurden welcomed recent proposals to phase out passenger vehicles powered by fossil fuels in Britain and France, saying they are needed to combat global warming. Shell is looking at “very aggressive scenarios” as it makes plans to remain competitive in a world that gets more of its energy from renewable sources and less from crude oil, or “liquids,” he said.

“The most aggressive scenario – much more aggressive than what we are seeing at the moment, by the way – with maximum policy effect, with maximum innovation effect, can see us peaking in liquids consumption somewhere in the early thirties,” he said as Shell reported second-quarter earnings. “If there are a lot of biofuels in the mix, that may mean that oil will peak in the late twenties, but then everything has to work up.”

Van Beurden’s comments come amid increased focus on the future of the industry after the Paris climate agreement saw governments commit to tougher action on emissions and shareholders push for more long-term plans.

Britain this week pledged to ban the sale of new cars and vans using diesel and gasoline starting in 2040 as part of a sweeping plan to tackle air pollution. France announced a similar initiative earlier this month.

Car makers are also moving in this direction. Volvo says that by 2019 all of its cars will be powered by electricity or hybrid engines.

“It’s not a surprise that the international super-majors are starting to accept a future with the question of just how much oil and gas is needed,” said David Elmes, an energy industry expert at Warwick Business School. “They realize that is now in their planning horizons and therefore needs to be discussed with shareholders because it is influencing the decisions today, and one might argue that has been prompted by shareholder activism.”

Shell has already begun to respond to changing energy demand by increasing its focus on natural gas, van Beurden said. But the company also needs to get involved in electricity and renewable energy and expand its petrochemicals business, he said.

Van Beurden also stressed that while developed nations are moving away from gasoline- and diesel-powered passenger vehicles, the world will continue to depend on these fuels for many years.

Developing nations don’t yet have the money or electricity networks needed to shift away from fossil fuels, and aviation, shipping and trucking can’t easily shift to non-hydrocarbon energy sources, he said.

“As far as oil and gas are concerned, and certainly as far as oil is concerned, you have to bear in mind that if we have a peak and then go into decline, this doesn’t mean that it is game over straight away,” van Beurden said.

Shell’s discussion of the future came as it said second-quarter earnings more than tripled due to cost cuts and recovering oil prices.

The Anglo-Dutch energy giant said profit adjusted for changes in the value of inventories and excluding one-time items rose to $3.60 billion from $1.05 billion in the same period last year. Net income rose 31 percent to $1.55 billion.

The earnings reflect efforts to restructure the business to cope with lower oil prices and the purchase of natural gas producer BG Group. Shell’s oil price averaged $45.62 a barrel for the quarter, up 16 percent from a year earlier. Prices were above $100 a barrel as recently as 2014.

“The external price environment and energy sector developments mean we will remain very disciplined, with an absolute focus on the four levers within our control, namely capital efficiency, costs, new project delivery, and divestments,” van Beurden said.

Energy Transfer Partners LP Pipeline Problems Are Getting Worse

Motley Fool

Energy Transfer Partners LP Pipeline Problems Are Getting Worse

Two of the pipeline builder’s largest projects hit roadblocks this week, which could spell more trouble down the road.

Matthew DiLallo        July 26, 2017  

Energy Transfer Partners‘ (NYSE:ETP) has had its share of difficulties over the past year. The headliner was the problems it faced in building the Dakota Access Pipeline, which endured several months of setbacks due to protests that caused a delay in getting a key permit. While that project finally entered service last month, the issues with that pipeline haven’t gone away.

Unfortunately, those nagging issues aren’t the only problems facing the company. Just this week, two more of its pipeline construction projects came to a halt. Not only could these new roadblocks delay the in-service date of these key projects, which would have an adverse impact on its cash flow as well as the operations of its customers, but it would further tarnish the company’s already sullied reputation. That could haunt Energy Transfer in the future unless it cleans up its act.

Pipeline construction worker waling past a blue sky.Image source: Getty Images.

Rover’s problems spread to West Virginia

The largest project Energy Transfer currently has under construction is the $4.2 billion Rover Pipeline that would move natural gas from the Marcellus and Utica shale plays of West Virginia, Pennsylvania, and Ohio to market centers in the Michigan and Ontario. The company initially expected an in-service date of the first phase in July, with full service anticipated by November.

That said, the company hit a roadblock this spring after 2 million gallons of drilling fluids used in horizontal drilling underneath roads and waterways spilled into wetlands in Ohio. Worse yet, regulators found that the fluids didn’t just contain the clay and water mixture that Energy Transfer disclosed, but also had trace amounts of diesel. Because of that, the company hasn’t been able to complete any new directional drilling on the project, which has delayed the in-service date of the first phase until late summer.

Meanwhile, this past week environmental regulators in West Virginia ordered the company to stop work on certain sections of the pipeline after finding that it violated state rules and a water pollution permit. As a result, the company must cease work on these sections in the state until it regains compliance with all the terms and conditions of its permits and local laws.

Mariner East 2 hits a road block

Another major project for the company is the $2.5 billion Mariner East 2 natural gas liquids (NGL) pipeline, which would move NGLs from the Marcellus and Utica to an export terminal near Philadelphia. However, this project has also come under intense opposition and scrutiny. Its latest setback came this past week when a judge in Pennsylvania halted construction of the pipeline in a town in the southwestern part of the state due to a dispute over the location of a valve and other equipment, which the town says is in violation of a 2015 agreement.

That said, this isn’t the first problem with this construction project. The company already had to halt directional drilling due to another inadvertent release of drilling fluids in the area. Further, the company was recently fined by Pennsylvania’s Department of Environmental Protection for a violation during construction that affected wetlands in another part of the state.

A pipeline under construction.Image source: Getty Images.

Customers are counting on these projects

These delays represent more setbacks for investors given that Energy Transfer Partners is counting on these projects to fuel its distribution growth plans. That said, it’s not just Energy Transfer’s investors that will feel the impact if these projects don’t start service as expected because many of its customers are counting them to drive future growth. Antero Resources (NYSE:AR), for example, is an anchor shipper on the Rover Pipeline, which it’s counting on to help it deliver on its long-term production targets to increase its gas output by 20% to 22% through 2020. Without the project, there might not be enough regional pipeline capacity, which could force Antero to scale back its growth plans. Meanwhile, Antero Resources is also an anchor shipper on Mariner East 2, which the company expects will improve the prices it realizes for its NGL production because it will have the ability to export them to international markets.

Southwestern Energy (NYSE:SWN) and Eclipse Resources (NYSE:ECR) are also counting on Energy Transfer’s projects entering service. In Southwestern Energy’s case, it’s rapidly ramping up production in Southwest Appalachia due to its view that new pipeline projects like Rover will reduce the discount its gas fetches compared to market rates from $0.67 in 2017 to $0.21 by 2019. Meanwhile, Eclipse Resources is planning to increase its output by a 25% compound annual rate in the coming years due in part to the greater market access it sees in the forecast once Rover enters service.

The black eye to its reputation might start to hurt

Energy Transfer Partners has taken quite a hit to its reputation over the past year due to the issues it has had with constructing its major pipeline projects. Because of that, it could become harder for the company to move forward with new projects because customers might be reluctant to sign up for capacity given its prior issues. That could give competitors the upper hand in winning new projects, which might impact the company’s ability to grow in the coming years. That dimming growth outlook gives investors less incentive to stick with the company over the long term unless it can clean up its act.

Matt DiLallo has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned.

Bosses want capitalism for themselves and feudalism for their workers

The Washington Post-Wonkblog

Bosses want capitalism for themselves and feudalism for their workers

By Matt O’Brien         July 26, 2017

(HBO)

If some employers had their way, you would have to pledge eternal fealty to them just to get a paycheck.

You would bend the knee, bow your head, and swear to serve them faithfully, now and forever, even if someone else tried to hire you away for more money. And in return for this loyalty, you of course would get none. Your company could fire you whenever it wanted and wouldn’t have to take care of you when you got old. If you were really lucky, it might, just might, give you a small 401(k) match. In other words, it’d be capitalism for bosses, and feudalism for workers.

Now, as much as this might sound like a caricature, it’s actually the way things are in Idaho. Well, except maybe for the genuflecting. As the New York Time’s Conor Dougherty reports, the state’s non-compete laws are so strict that people can’t leave their jobs for a new one unless they can show that it wouldn’t “adversely affect” their current employer. That’s an impossible standard that would leave workers — and, more to the point, their wages — entirely at the mercy of their bosses.

This is not, to put it mildly, the way things are supposed to work. When unemployment is as low as it is now, companies are supposed to have to fight over workers by paying them more. If there’s one thing chief executives excel at, though, it’s cutting every cost other than their own bonuses. They’ve figured out that it’s a lot cheaper to simply tell their employees that they’re not allowed to leave than it is to pay them enough that they wouldn’t want to leave in the first place. Which is to say that Idaho isn’t the only state going medieval on workers. Many of them are. Non-competes, which started off as a way to stop a company’s top executives from revealing legitimate trade secrets to rivals, have turned into a tool for suppressing wages that now cover 14 percent of all people making $40,000 or less, according to the U.S. Treasury Department.

There’s no reason that sandwich shop makers or doggy day-care workers or summer camp counselors should have to sign non-compete agreements like some of them have recently. No reason other than that businesses know they can get away with it. Jobs were so scarce for so long in the aftermath of the Great Recession that companies realized they could put almost any condition on them and still find plenty of people willing — no, desperate — to take them. To the point that even people who were trying to get jobs at Jimmy John’s felt like they had to promise that they wouldn’t take any of the secrets they were about to learn about putting slices of meat in between pieces of bread to go work for, say, Subway instead.

It’s a reminder that economics isn’t just about supply and demand. It’s also about who has the power to make demands. Which actually has more to do with government policies than market forces. Things like how high the minimum wage is, how easy it is to form a union, and, yes, how tough non-compete laws are all affect the balance of power between capital and labor independent of the unemployment rate. So does the welfare state itself. Indeed, businesses have historically been opposed to Social Security, Medicare and, more recently, Obamacare not only because those programs cost them money, but also control over their workers. When the government helps people be able to afford to retire, companies can’t afford to hire quite as many of them — not if they want to maintain their profit margins. That’s because workers have more bargaining power when there aren’t as many of them actually looking for, well, work.

The same kind of logic, by the way, applies to stimulus spending. As economist Michal Kalecki argued back in 1943, a government that hires unemployed people is a government that doesn’t have to give business what it wants to get them to hire unemployed people. The more the government does, then, the less sway businesses have over the economy and everyone in it.

The important thing to understand is that capitalists don’t believe in capitalism. They believe in profits. There’s a difference. Capitalism is about free competition, while profitability, taken to the extreme, is about the lack of it. After all, the best way to make money is to drive everyone else out of business, and to then force your workers to accept subsistence-level wages. It’s the contradiction at the heart of capitalism, which, if it weren’t for the fact that governments can intervene to save the system from itself, could very well lead to revolution.

That’s what happens when you turn workers into vassals.

Matt O’Brien is a reporter for Wonkblog covering economic affairs. He was previously a senior associate editor at The Atlantic.

Made in the USA, Baby

Esquire

Made in the USA, Baby

Scott Walker, Foxconn, what could go wrong?

By Charles P. Pierce       July 27, 2017

(Permanent Musical Accompaniment To This Post)

Being our semi-regular weekly survey of what’s goin’ down in the several states where, as we know, the real work of governmentin’ gets done, and where you look for work and money and you walk a ragged mile.

The big news of the week comes to us from Wisconsin, where Scott Walker, the goggle-eyed homunculus hired by Koch Industries to manage that particular Midwest subsidiary, is all puffed up because Foxconn has decided to make liquid crystal screens in his state. Not only that, but the president* and Vice President Galatians are puffed up, too. From the Journal Sentinel:

“This is a great day for American workers and manufacturers and everyone who believes in the concept and the label ‘Made in the USA,’ ” said an ebullient President Donald Trump at the White House announcement. As Republicans in Washington struggle to repeal Obamacare and advance bills on tax cuts and infrastructure, Trump seized on the announcement as a win in a key swing state, crowing that the deal wouldn’t have been done “if I didn’t get elected.” The agreement represents an opportunity as well as a risk for Wisconsin — state lawmakers must now consider a subsidy package nearly 50 times bigger than the state’s previous record.”

It will surprise approximately nobody that the plant likely will be built on the home turf of obvious anagram Reince Priebus and Speaker Paul Ryan, the famous zombie-eyed granny starver. And then, ah, yes. The “incentives.” Always interesting, always reasonable, at the start of the deal.

“At $3 billion for 13,000 jobs, the Wisconsin deal would cost $231,000 per job. The subsidies would total more than the combined yearly state funding used to operate the University of Wisconsin System and the state’s prison system. The company would have to meet certain job and investment targets up front to get the money, which would include up to $1.5 billion in state income tax credits for jobs created, up to $1.35 billion in credits for capital investment and up to $150 million in sales tax exemptions on construction materials. In addition, like other manufacturers in Wisconsin, Foxconn would pay no corporate taxes on profits from sales on products made here. The incentives would cost the state about $200 million a year, but Foxconn’s payroll in Wisconsin could reach $700 million a year, Walker’s office said.”

This next part sounds creepy and more than a little Hazzard Countyish.

The factory project would involve a virtual village, with housing, stores and service businesses spread over at least 1,000 acres, according to interviews. That acreage, a 1.5 square-mile area the size of Shorewood, could be assembled from parcels that initially aren’t contiguous, the source said.

If Wisconsin is very lucky, Foxconn will not run a de facto slave-labor camp the way it does in China. An epidemic of worker suicides in, say, Kenosha would not be good for anyone. From The Guardian:

“In 2010, Longhua assembly-line workers began killing themselves. Worker after worker threw themselves off the towering dorm buildings, sometimes in broad daylight, in tragic displays of desperation – and in protest at the work conditions inside. There were 18 reported suicide attempts that year alone and 14 confirmed deaths. Twenty more workers were talked down by Foxconn officials… The corporate response spurred further unease: Foxconn CEO, Terry Gou, had large nets installed outside many of the buildings to catch falling bodies. The company hired counsellors and workers were made to sign pledges stating they would not attempt to kill themselves.”

Of course, thanks to Walker, Wisconsin is a right to work state now, so who knows? Obviously, this is a massive trust-but-verify gamble by the state government, and I suspect there will be more trusting than verifying involved as the project goes forward. Walker has promised to call a special session of the state legislature to debate the deal. Of course, this probably depends on whether or not he and his legislature ever get their acts together to produce a budget.

Sliding on down to Texas, where there’s an actual special session of the state legislature happening, we find that body still functioning as a petri dish for very contagious and really bad ideas, and doing it at light speed. From the good folk at The Texas Tribune:

“In abortion cases where complications arise, reporting to the state is already required. Under state Rep. Giovanni Capriglione’s House Bill 13, those requirements would get more strict: Physicians would have to submit reports to the state health commission within three days that include detailed information like the patient’s year of birth, race, marital status, state and county of residence, and the date of her last menstrual cycle. Physicians and facilities that fail to comply with the reporting requirements would face a $500 fine for each day in violation. “What I’m trying to do with this law is validate and verify data,” said Capriglione, R-Southlake.”

Of course, why wouldn’t anyone buy that?

Democrats fought the measure, which reproductive rights groups say would violate the privacy rights of doctors and patients, and is an attempt to intimidate abortion providers. It was approved on a 97-46 vote.

And it wouldn’t be a petri dish for very contagious and really bad ideas if bathrooms weren’t involved. From The Waco Tribune-Herald:

“If anything, tensions are running even hotter. Now at stake for Republican Gov. Greg Abbott, who faces re-election in 2018 and has gone against the tide of GOP governors who have shied from following the lead of North Carolina, is whether his party will deliver after ordering them to finish the job in a special legislative session that ends in August. Big business and police —two usually important groups to Texas Republicans — have urged Abbott to drop it. Just as the bill came to floor inside the Senate, police chiefs and commanders from Texas’ largest cities stood outside on the Capitol steps and railed against the effort as a waste of time.”

You have to wonder, don’t you, Governor Greg Abbott? If the police chiefs in Texas think this is a waste of time, exactly how far off the beam has your legislature fallen?

And we conclude, as is our custom, in the great state of Oklahoma, where Blog Official Abandoned Drive-In Theater Monitor Friedman of the Plains brings us yet another tale of stuff being where stuff is not supposed to be. From readfrontier.org:

A little more than half — 52 percent — of the oil estimated by the Corporation Commission to have been released during that time was recovered by the operator or a remediation company, and about two-thirds of the wastewater released was recovered, according to the data. The data reflects releases of oil and wastewater at locations such as well sites and storage tanks, and does not include spills from interstate pipelines, which are regulated by the U.S. Department of Transportation. In many cases, the numbers are only estimates of how much oil or wastewater was spilled, said Matt Skinner, spokesman for the Oklahoma Corporation Commission, and in some cases an estimated amount spilled may not have been provided or noted in the data field by the inspector. “There’s no way of knowing how much higher it would be. Chances are, (actual total amounts) would be to the high side, rather than the low side, but there’s no way of knowing,” Skinner said. “It can be very difficult to gauge unless the operator has the records where we can get a better idea.”

A business-friendly state economy remains full of surprises. Trust, but verify.

This is your democracy, America. Cherish it.

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