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Robert Reich, Detroit and the bankruptcy of America’s social contract
Permit me an impertinent question (or three).
Suppose a small group of extremely wealthy people sought to systematically destroy the U.S. government by (1) finding and bankrolling new candidates pledged to shrinking and dismembering it; (2) intimidating or bribing many current senators and representatives to block all proposed legislation, prevent the appointment of presidential nominees, eliminate funds to implement and enforce laws, and threaten to default on the nation’s debt; (3) taking over state governments in order to redistrict, gerrymander, require voter IDs, purge voter rolls, and otherwise suppress the votes of the majority in federal elections; (4) running a vast PR campaign designed to convince the American public of certain big lies, such as climate change is a hoax, and (5) buying up the media so the public cannot know the truth.
Would you call this treason?
If not, what would you call it?
And what would you do about it?
At what point do we say, ‘Enough’?
Reich took a vacation — lucky guy — and had a brainstorm:
Robert Reich, Back from Three Weeks Vacation with a Bold Proposal
Here’s a bold proposal I offer free of charge to Obama or Romney: Every American should get a mandatory minimum of three weeks paid vacation a year.
Most Americans only get two weeks off right now. But many don’t even take the full two weeks out of fear of losing their jobs. One in four gets no paid vacation at all, not even holidays. Overall, Americans have less vacation time than workers in any other advanced economy.
This is absurd. A mandatory three weeks off would be good for everyone — including employers.
Studies show workers who take time off are more productive after their batteries are recharged. They have higher morale, and are less likely to mentally check out on the job.
This means more output per worker — enough to compensate employers for the cost of hiring additional workers to cover for everyone’s three weeks’ vacation time.
Sounds good, but Reich never mentions what the so-called self-employed are supposed to do. I guess this is another way that the government could screw us over, like having to pay both halves of social security taxes.
Here’s a thought. Since Freelancers are at least 30% of the professional and creative workforce in the US now, so if Reich’s vacation idea becomes law (as if) maybe the laws could have a clause granting a tax rebate that is equivalent to 3/52’s of our freelance income, each year. That way we could receive ‘paid’ vacation each year.
But his proposal will go nowhere in this ideologically charged political environment. Who is going to stand up for the average worker, after all? No one.
And Dr. Reich? Please don’t forget the freelancers. You were the Secretary of Labor once, so it looks bad for everyone.
Joe Nocera writes about Howard Schultz, the CEO of Starbucks, who is advancing the idea that we should withhold campaign contributions until our elected officials start working on creating jobs. I’m down with that:
Joe Nocera via NY Times
The contribution boycott, as Schultz envisions it, would be completely bipartisan; indeed, it would have to be for it to work. Schultz isn’t calling on Washington to come up with solutions that are aligned with his political leanings (which are Democratic). Rather, he wants solutions, agreed to by both parties, that will help get the country back on its feet.
He believes Congress needs to come back from the August recess now, instead of waiting until September. Then, he says, the president and Congress should hammer out a debt deal, which will restore confidence. And finally, and most importantly, they should start focusing “maniacally” on the nation’s most pressing concern: job creation. Once they’ve done that, the boycott would be lifted.
What I particularly like about Schultz’s idea is that it is not just another plea for compromise and civility, which does nothing to affect political behavior. It is hardheaded and practical, the kind of idea you would expect from a good businessman. Although it would require contributors from both the left and right to join arms, it seems to me that there are enough people in both parties who are fed up enough to give this a try. He’s already lined up one organization, Democracy 21, to support the idea; he’s searching for more.
Is Schultz’s idea a long shot? Yes. Is it worth trying? You bet it is.
I wonder if Schultz will be the populist I have predicted, who will rise up and create a new party:
It will take the people to take our future back.
The form this might take? I foresee the emergence of a grassroots movement, based on what I call ‘trade populism’: an ideology that explicitly identifies a globalized business ecology, made up of wall street bankers, multinational corporations and their leaders, and booming foreign countries (China, India, Brazil, etc.) as the enemies of our freedoms, and channeling the anger of Americans of all political stripes. This movement will not be the Tea Party, although it may attract tea partiers.
And this new populism will also revolve a few other premises, including the idea that we are in a crisis, so special rules apply. For one, they will argue that we need to put aside issues on which we cannot agree for the duration of the emergency. So the leaders of this movement will explicitly defer taking a stand on abortion, foreign aid, or climate change.
Trade populists will argue for the creation of trade barriers, as a support for the American worker, and as a start at dismantling the global business economy of interlocking banks, global business, and state capitalism.
Another bit of ‘trade populism’ will be that foreclosures must stop for the duration of the emergency, pensions must be paid, and elected officials and businesses that don’t meet their obligations to plain folk will face criminal penalties.
Nearly all union members will join this movement, perhaps even some of the police and firefighters. Progressive democrats, tired of being part of the centrist wing of neoliberal capitalism, will break with the national party. Libertarians will join. The Greens will join. Even moderate Republicans, weary of the clamor, might join. The unemployed young and the disheartened old will join. The poor will join. Maybe even some rich people will join.
This new populism will emerge piecemeal, a little here, a little there. But by 2012 it will be the swing force, and with the right charismatic and confident leaders (Elizabeth Warren, Sheila Bair, Will Allen?), it could shake the elections.
And now, maybe Howard Schultz? With Paul Krugman as Secretary of the Treasury, Robert Reich back in Labor, Will Allen as Interior, and Sheila Bair and Elizabeth Warren on the Council of Economic Advisors.
The problem with taking about for-fee versus free writing on the internet is that it has become strongly biased by those who are most interested in making money into being only about making money. AOL’s acquisition of the Huffington Post has set off a wide-ranging discussion, often based on financial analysis like Nate Silver’s at FiveThirtyEight, where he calculates the value of a post (very cleverly), and discovers that even the most popular of writers there wouldn’t get paid much:
The Economics of Blogging and The Huffington Post
At this 50:1 ratio, the average blog post, which received 43 comments, got about 2,150 page views. This distribution, however, was highly inequitable. The top-performing blog post — one by the former Secretary of Labor, Robert Reich — had received 547 comments (tantamount to about 27,000 page views) as of Friday morning. By contrast, more than 40 percent of the blog entries received 5 comments or fewer.
This distribution reflects a classic power law relationship, with 20 percent of the blog posts accounting for about 80 percent of the comments (and, we are assuming, the traffic). The median blog post, on the other hand, received just 11 comments, which equates to only about 550 page views.
Next question: how much are those page views worth? The Huffington Post had revenues of about $30 million last year, they’ve reported, almost all of which was from display advertising. This revenue was generated on roughly 4.8 billion page views over the course of 2010, according to Quantcast data. That means the average page view was worth a little more than six-tenths of a cent, or that 1,000 page views were worth about $6.25.
Do the multiplication, and you find that the average blog post — which we estimate generated a couple thousand page views — was worth about $13 in advertising revenue. The median blog post, with several hundred views, was worth only $3 or $4. Even Mr. Reich’s strongly-performing post was worth only about $170, by our estimates.
I’d imagine there are occasional instances in which blog posts hit the jackpot and generate thousands of comments and hundreds of thousands of page views. For the most part, however, they do not move the needle very much.
But even if The Huffington Post makes relatively little money from these blog posts, could not they pay their bloggers something? Of course they could — and maybe they should. But the mechanics would get a little tricky.
If they were to pay a small flat fee, for instance, they might run into some problems with adverse selection. An amount like $10, for instance, would provide more of an incentive to people who were producing relatively low-quality posts than to someone like Mr. Reich, who could probably command several hundred dollars for a freelance article if he were so motivated. The presence of well-known writers like Mr. Reich, also — along with the armada of politicians and celebrities that blog at The Huffington Post on occasion — brings up the group average. The expected figures for a typical piece from a typical freelancer, instead, is probably closer to the group median: a few hundred page views, worth just a few bucks in advertising revenue.
The Huffington Post could instead compensate writers based on a revenue-sharing scheme; perhaps they are vulnerable to a competitor that might elect to adopt such a business model. Still, even if The Huffington Post were to lose most or all of its unpaid bloggers, this would have a fairly negligible impact on its bottom line. Those posts make up only about 4 percent of the traffic in their politics section, according to our estimate.
One of the omissions in this analysis is that the impact of a post, nowadays, is much greater than its page hits or the number of comments on the website might indicate. Tech savvy users might be reading Reich’s post, excerpts, or commentary about the post on other websites, or through tools that pull a copy of the post once, and distribute to many users. So the social impact of a post might be much larger than the raw numbers indicate.
And the gorilla in the room is ‘why does Robert write?’ Not just at the Huffington Post, but anywhere? He is a successful person, working in academia these days, probably with millions invested from his books and public speaking. Even if HuffPo would pay him $170 for his post — or even $1700 — his motivations must be extra-market oriented: his goals lie beyond the financial incentives that might influence some of the contributors at HuffPo.
From the perspective of a participant in open social discourse, Reich is confronted with the challenge of being heard, of making an impact, pulling society in some direction. From this viewpoint, HuffPo is one of many alternatives where his thoughts could be published and distributed. His motivation to contribute to the Huffington Post run in a completely different dimension than a paycheck.
Reich is picking the Huffington Post for extra-market reasons: it is not an economic choice. He is making a choice based on utility and his desire to make a difference by swaying others to his arguments.
So, part of the HuffPo valuation is about the perceived value of the site as a locale in which valuable and open social discourse can and does occur. Yes, for every Reich post there are 100 repackagings of breaking news, or summaries of important articles elsewhere, all of which lead to page hits and ad clicks. But that is just like the litter and noise in the plaza, where on the podium a great voice is making a case for us to care about something and take action. The value of the plaza to the city shouldn’t be measured by the number of cigarette butts or candy wrappers on the ground, or the cost of the timbers in the bandstand, except to the degree that they indicate that the needs of the community are being met. And even if 80% of what gets posted in HuffPo is banal and bland, the other 20% that matters justifies it.
Paul Boutin, The New York Times
Holy moly, I’m flattered. Thanks, Paul!
Tumblr in the NY Times