The Economy Hub
With Michael Hiltzik
Los Angeles joins the local movement to raise the minimum wage

Los Angeles Mayor Eric Garcetti marked Labor Day on Monday by proposing a minimum wage increase for workers in LA, to $13.25 an hour by 2017. The city would join a host of municipalities nationwide that have taken matters into their own hands in the face of resolute inaction by Congress.

It has long been obvious to all but the most conservative politicians and retrograde business lobbyists that this raise is long overdue. The billionaire investor and philanthropist Eli Broad has signed on, observing in a Labor Day op-ed in The Times that the increased wage "would be a great boost to our local economy. Workers would spend their higher wages on groceries, clothes and other basics for their families, putting the money right back into local businesses, which would, in turn, create jobs."

By 2017, the affected workers would have a cumulative $1.8 billion more to spend. That's according to a study Garcetti commissioned from the Institute for Research on Labor and Employment at UC Berkeley. 


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A sour mood despite sweeter outlook

This week brought another nugget of good economic news for the U.S. economy. Gross domestic product expanded at a healthy annual rate of 4.2% in the second quarter — a slight upward revision from the earlier reading by the Bureau of Economic Analysis.

Corporate non-residential investment shot up 8.4%, annualized, a big improvement over the previous quarter's 1.6%. Meanwhile, the unemployment rate has been falling and personal income rising, according to the Commerce Department.

So why are Americans so glum?

That's the question asked by investment and economic analyst Zachary Karabell in a recent piece at After running through these and other positive economic statistical trends, he observes that the Gallup poll's index of economic confidence remains mired in negative territory. (The most recent weekly reading was -18 on a scale of -100 to +100.) That's certainly better than the most recent weekly low of -42, reached early last October, and obviously a whole lot better than...

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Q: What do you need when your CEO is a dog-abuser? A: Lots of PR!

There's no surer path to public disgrace than to be caught mistreating a defenseless animal. Say hello to Desmond Hague, CEO of the food-service company Centerplate, who has made himself simultaneously famous and infamous on a Michael Vick scale by getting videotaped kicking and abusing his year-old Doberman puppy in a Vancouver hotel elevator. 

I'm with George Dohrmann of Sports Illustrated on this: Don't watch the video unless you want to "ruin your day, your week." It shows Hague repeatedly kicking the cowering dog, then hauling on her leash so violently that she's pulled off her feet.

The dog has been turned over to the British Columbia Society for the Prevention of Cruelty to Animals in Vancouver, where the incident occurred. Hague may face charges there, amid reports that the dog has been systematically abused.

This has created something of a public-relations issue for Stamford, Conn.-based Centerplate, a privately owned firm that provides food and beverage concession services at...

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The Josh Shaw case: Another sign that big-college football must go

The joke around Southern California long has been that Los Angeles doesn't need an NFL team because it already has a pro franchise -- USC football. The Josh Shaw case is another indication that the joke's on USC.

We reported recently, in connection with Ed O'Bannon's lawsuit over the licensing of his name and image as a former UCLA basketball player, that big-time college football and basketball are basically incompatible with the mission of a university. The Shaw case underscores that these industrial-scale athletic programs and academic programs simply don't mix. The only way to resolve the conflict is for universities to cut their football and basketball programs loose.

You may know already that Shaw is the fifth-year USC cornerback who has been caught in a lie. He explained his two ankle injuries with a story about leaping from a second-story balcony in Palmdale to save his 7-year-old nephew from drowning.

USC's publicity machine, knowing money when it smells it, swung into action,...

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A (rather misleading) message from Comcast on net neutrality

Say this for Politico and the daily Playbook emails it blasts out to a large circle of Washington opinion makers and their ilk: They make it easy to keep track of the latest lobbying balderdash put out by big corporations. That's because the lobbying messages show up as advertising messages in the Playbook emails.

In the past, we've highlighted a campaign of disinformation sponsored by BP in connection with its responsibility for the Gulf of Mexico oil spill. Now let's take a look at Comcast.

The big cable company, which is trying to persuade the Federal Communications Commission to approve its merger with Time Warner Cable, has been the Playbook email sponsor this week. On Monday and Tuesday, its message included the following assertion:

"[W]e are the only Internet Service Provider to agree to be legally bound by full Net Neutrality rules." (See accompanying graphic.) The company also incorporates this statement in its corporate publicity about the proposed merger. 

As a straight...

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The right wing steps up its attack on the teaching of U.S. history

It appears that the right's effort to suck the teaching of advanced U.S. history into the culture wars won't be going away soon.

Last week, we reported on the conservatives' attack on the instructional "framework" for advanced placement U.S. history courses published by the College Board.

A new salvo appeared Monday in National Review Online. It was written by Stanley Kurtz, a contributing editor at that publication and a senior fellow at the Ethics and Public Policy Center, a conservative think tank.

"This Framework will effectively force American high schools to teach U.S. history from a leftist perspective," Kurtz writes. But as we showed earlier, that assertion is utter claptrap.  

So far, the College Board is standing firm against this anti-intellectual assault. Let's hope its spine remains stiff.


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Warren Buffett is 'betting against America' on Burger King. Or is he?

Back in February, in his annual message to shareholders in his company Berkshire Hathaway, Warren Buffett said this:

"Who has ever benefited during the past 237 years by betting against America? ... America's best years lie ahead."

You can expect these words to be thrown back in Buffett's face this week (as we're doing), as word spreads of his investment in a corporate "inversion" deal, in which Burger King will relocate its tax home to Canada.

But it's worthwhile to take a closer look at Buffett's involvement, and about his opinion of corporate taxation -- indeed, of taxes in general. Here's a spoiler: He doesn't think U.S. corporate taxes are too high, and he's not really in favor of the inversion loophole. 

First, some background.

Inversion deals involve U.S. companies buying smaller foreign firms to take advantage of the latters' lower tax rates and other opportunities for financial manipulation. (We outlined the issues here and here...

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Another GOP state may be signing up for Medicaid, and the reason is obvious

Reports out of Cheyenne say that Wyoming is finally talking to federal officials about expanding Medicaid. 

That would make Wyoming the 12th state with a Republican governor to expand Medicaid under the Affordable Care Act, leaving 16 with GOP leadership still in the "no expansion" column. The reason for Wyoming's wavering is clear: It's money.

The Health Department says Medicaid expansion could save the state $50 million or more if it expands the program, for which the federal government will pay at least 90%. Meanwhile, Wyoming hospitals say they're losing more than $200 million a year in uncompensated care for people without insurance.

The state Legislature has rejected the expansion, but Republican Gov. Matt Mead has been saying it's time to pack up. He's entering negotiations with the feds for a way to expand Medicaid next year, covering as many as 17,600 low-income residents.

Mead's actions reflect some realities about the Affordable Care Act that may finally be hitting home for...

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Wisconsin shows how job incentives are handed out -- in Bizarro world

Via the Wisconsin State Journal of Madison, we learn of the zany way that political officials in that state are handing out job-creation funds. Long story short, they've voted to hand over $6 million in taxpayer cash to a company that's planning to cut its Wisconsin work force in half.

The company is Ashley Furniture, which has had its snout in the taxpayer trough before. But the new grant is more than all those others combined, the Journal says. The $6-million grant, which has been voted by the state Economic Development Corp. but not yet finalized, won't require Ashley to create any new jobs. Instead, it will allow the manufacturer to "lay off half of its current 3,848 Wisconsin-based workers," the newspaper says.  

The chairman of the incentive-awarding body is Republican Gov. Scott Walker. A few weeks after the WEDC approved the grant to Ashley, its owners donated $20,000 to Walker's re-election campaign.

Walker also is a candidate for the 2016 GOP nomination for president, so his...

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A women's rights victory as California nixes an attack on abortion coverage

With minimal fanfare, California state officials have nixed an underhanded effort by two Catholic-affiliated universities and their insurers to deprive the universities' employees of insurance coverage for abortions. 

The move by the Department of Managed Health Care is one of the strongest statements in favor of women's reproductive health rights you're likely to hear from officials of any state, at a time when those rights are under systematic attack. So it's proper to pay attention.

On Friday, the DMHC informed the state's major health insurers by letter that provisions in health plans eliminating coverage of "voluntary" or "elective" abortions, or limiting coverage only to "medically necessary" abortions, violate state law and the state constitution.

A copy of the letter--this version sent to Anthem Blue Cross--can be found here. It says health plans in California are prohibited from "discriminating against women who choose to terminate a pregnancy. Thus, all health plans must...

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Big business takes aim at corporate activists

"Shareholder democracy" long has been derided as an oxymoron, like "military intelligence" or "jumbo shrimp." Yes, corporate managements bow endlessly to the mandate that they act exclusively in the shareholders' interest, but in real life they treat the poor sap with a few hundred shares as hardly more important than the night janitor.

So it's proper to ask why Big Business has been aiming its heavy artillery at a small clutch of shareholders who have the temerity to try to obtain for their fellows the right to vote at annual meetings on issues that might affect the value of their stock. Issues such as the structure of their companies' boards of directors, oversight of their chief executives' actions, the right to call special meetings — of shareholders — and so on.

The shareholders include John Chevedden, 68, a former employee of Honeywell and Hughes Aircraft who lives modestly in Redondo Beach and submits about 20 or 30 shareholder resolutions for annual meetings per year; and James...

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What the history of Medicare Part D can tell us about Obamacare

How Americans will take to the Affordable Care Act over the long haul may be hard to predict, but mapping out its future course need not be entirely the product of guesswork. That's because we have a model on which to base our predictions: Medicare Part D, the prescription drug benefit enacted just over 10 years ago.

That's the conclusion of an article in the latest New England Journal of Medicine by Julie M. Donohue, a health policy expert at the University of Pittsburgh. Her main message: gaining public acceptance for a major program takes time.

"It takes a couple of years at least for people who are eligible for coverage to become aware of a program, to enroll in that program and to experience the benefits," Donohue says in a taped interview accompanying the article. "And until people experience the benefits of an insurance program, especially something that's new and a little different, the public opinion of that program may be relatively low." 


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