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OpenMarket: October 2012

  • Obama Makes False Claim About Supreme Court Decision; Fact-Checkers Parrot It

    October 17, 2012 3:47 PM

    Reading a Supreme Court decision is so hard! If you are a fact-checker, it's much easier just to let President Obama, a critic of a Supreme Court decision, caricature the decision and then parrot the baseless caricature as if it were fact.

    The Supreme Court’s 2007 decision in Ledbetter v. Goodyear Tire & Rubber Co., said employees who want to bring a pay discrimination lawsuit under Title VII (the federal antidiscrimination law with the shortest deadline) generally have to file a complaint with the federal Equal Employment Opportunity Commission (EEOC) within 180 days. But it specifically left open the possibility they could sue later on -- even if they failed to file a timely EEOC complaint -- if they did not discover the discrimination until later. The case involved Lilly Ledbetter, who waited more than five years after learning of a pay disparity between her and her male co-workers to file an EEOC complaint.

    The White House falsely claimed “The Court ruled that employees subject to pay discrimination like Lilly Ledbetter must file a claim within 180 days of the employer’s original decision to pay them less . . . even if the employee did not discover the discriminatory reduction in pay until much later (check out Justice Alito’s arguments in the Court’s opinion).” In yesterday’s debate, Obama falsely claimed the Supreme Court said Ledbetter could not sue even if she had no way of discovering the discriminatory pay disparity. He said "the Supreme Court said that she couldn’t bring suit because she should have found about it earlier, whereas she had no way of finding out about it.”

    These claims are utterly false. The Supreme Court specifically left open the possibility employees who learn of the discrimination later can sue under the “discovery rule” exception to the 180-day deadline. In footnote 10 of its opinion, the Court wrote, "We have previously declined to address whether Title VII suits are amenable to a discovery rule. . . .Because Ledbetter does not argue that such a rule would change the outcome in her case, we have no occasion to address this issue."

  • UNITE HERE President John Wilhelm To Step Down Following Turbulent Tenure

    October 17, 2012 3:22 PM

    John Wilhelm, the long-time president of the union UNITE HERE, has just announced he plans to step down. Union leadership changes are not often considered major events, but the end of Wilhelm's tenure is significant in that it closes a tumultuous chapter in his union's history.

    UNITE HERE formed as a result of the 2004 merger of two unions in two very different industries -- textiles and hospitality. UNITE stands for Union of Needletrades, Industrial & Textile Employees; HERE stands for Hotel Employees & Restaurant Employees. Wilhelm was head of HERE, while Bruce Raynor headed UNITE.

    While mergers across different industries have become more common as a way for unions to cope with declining membership, the UNITE-HERE merger had a symbiotic logic of its own. In recent years, UNITE had seen its membership fall as a lot of textile manufacturing has moved offshore. HERE, on the other hand, has faced better organizing prospects, since hotels and restaurants, like most service industries, cannot be outsorced.

    So what did UNITE have to offer HERE? Quite simply, money -- via its control of Amalgamated Bank, the nation's only union-owned bank. Thus, with UNITE's resources and HERE's organizing prospects, the merged union would have a bright future. Or so it seemed, until union politics got in the way.

    From the outset, UNITE HERE adopted a clearly unsustainable bifurcated leadership structure. Raynor became the union's president, while Wilhelm headed its hospitality division. Raynor and Wilhelm would go on to clash, accusing each other of attempted power grabs.

  • During Debates, The Only Good Businesses Are Small Businesses

    October 17, 2012 10:59 AM

    During last night's debate, President Obama and Governor Romney referred to small business 23 times. (Obama did it eight times; Romney did it fifteen times.)

    But where was the love for big business? In both presidential debates, big business has been the big elephant in the room. Last night, while responding to a question about George W. Bush, Romney said:

    Our party has been focused on big business too long. I came through small business. I understand how hard it is to start a small business. That’s why everything I’ll do is designed to help small businesses grow and add jobs.

    It's not hard to understand why both Obama and Romney want to stick to talking about small business. Everyone likes small businesses—they're uncontroversially good. The streets of small-town America are lined with small stores and restaurants well-loved by their local communities.

    But are small businesses really the key to exponential job growth? Bill Aulet and Fiona Murray of MIT don't think so. In an op-ed in today's Boston Globe, Aulet and Murray draw an important distinction between two different routes to new job creation:

    There are small- and medium-sized companies created to offer traditional goods and services to a local or regional market. Think “mom and pop” operations. They include your yoga studio and the pizza place down the street. While valuable to the economy in general, these companies are not large enough to serve as a growth engine for the entire economy. They do, however, offer important opportunities for employment and provide valuable services.

  • China's High-Speed Rail Disaster Is Not A Model For The U.S.

    October 17, 2012 10:23 AM

    After taking office in 2009, President Obama aggressively marketed high-speed rail in the United States. (I noted at the time that most of what the administration called "high-speed rail" was in fact expensive slight upgrades to existing, money-losing passenger rail service.) After several states rejected rail funding and with California's planned L.A.-San Francisco corridor facing majority opposition, lawsuitsballooning costs, and generally dismal prospects, the Obama administration has largely downplayed its previous rail boosterism.

    In his 2011 State of the Union address, President Obama made high-speed rail a priority of his administration:

    Our infrastructure used to be the best, but our lead has slipped. South Korean homes now have greater Internet access than we do. Countries in Europe and Russia invest more in their roads and railways than we do. China is building faster trains and newer airports. Meanwhile, when our own engineers graded our nation's infrastructure, they gave us a "D."

    We have to do better. America is the nation that built the transcontinental railroad, brought electricity to rural communities, constructed the Interstate Highway System. The jobs created by these projects didn't just come from laying down track or pavement. They came from businesses that opened near a town's new train station or the new off-ramp.

  • Today's Links: October 17, 2012

    October 17, 2012 8:25 AM


    MATTHEW YGLESIAS: "Five Bad Ideas in Tonight's Debate"
    "E-Verify: Mitt Romney is normally very upset about the potential job-killing impact of regulations, except when it comes to the idea of creating new and stricter regulatory supervision of who businesses are hiring! It's easy to see why investing extra resources in hounding potential unauthorized migrants out of jobs would be bad for the migrants and their employers, but high levels of immigration also turns out to boost the wages of native-born American workers, so there's just no reason to do this."

    ORANGE COUNTY REGISTER EDITORIAL: "Romney Encounters Feistier Obama"
    "President Barack Obama's performance Tuesday surpassed that in his first debate with Gov. Mitt Romney. He fared much better on style, but on substance, his rhetoric in many instances didn't match his record. 'I think a lot of this campaign, maybe over the last four years, has been devoted to this notion that I think government creates jobs, that that somehow is the answer,' Mr. Obama said. 'That's not what I believe. I believe that the free-enterprise system is the greatest engine of prosperity the world's ever known.' Yet the Obama administration, in the first 26 months of his presidency, imposed 75 new major regulations. The costs to the private sector exceeded $40 billion, according to the Heritage Foundation."

    VIRGINIA POSTREL: "An Economics Nobel For Saving Lives"
    "[Alvin E.] Roth, whose 'market design' bridges economics and operations research, is known for developing algorithms to find the best available matches in real-world situations: medical residencies, public schools and -- the analogy to my child-care hypothetical --kidney transplants from living donors. 'He likes to study markets that don’t involve money,' says Michael Rees, a kidney transplant surgeon at the University of Toledo Medical Center in Ohio who has worked with Roth on paired kidney donations."

  • Dodd-Frank's Democratic Dissenters -- From Brian Schweitzer To Debbie Wasserman Schultz

    October 16, 2012 4:36 PM

    "For some reason, some Republicans in Congress are still waging an all-out battle to delay, defund and dismantle these commonsense new rules." That was, in a recent weekly address, President Obama's all-or-nothing defense of the 2,600-page Dodd-Frank financial "reform" rammed through Congress just after Obamacare in 2010. Yet, almost by the day, members of the president's own party are coming to realize Dodd-Frank is actually toughest on smaller financial institutions while institutionalizing too-big-to-fail for large ones.

    Take this exchange last Friday on HBO's "Real Time With Bill Maher," not a place where you expect a conservative 0r libertarian critique on regulation. Certainly not from a Democratic officeholder.

    Yet listen (at 37:55; HBO subscription required) to the  the exact words of Montana's outgoing Democrat Governor Brian Schweitzer on the show:

    Banks that actually did their job like in Montana – where we didn’t have banks go upside down,  because they made you bring your financials in and they’d only loan you money if they understood your business plan – now, they are the ones that are being penalized. They now have more regulation on them, and it’s more difficult for them to make the loans.  The very banks that were doing their job are having a tougher time because of the banks that are too big to fail.

    Fellow panelist Rep. Darrell Issa (R-Calif.), there to represent conservatives, replied with a grin to Schweitzer, "I knew there was something I liked about you."

    Yet, remarkable as his words were in such a prominent liberal venue, Schweitzer is far from the only community banking advocate, and not even the only Democrat, criticizing Dodd-Frank's provisions. As real estate columnist Ken Harney writes in Inman News, the proposed  regulation implementing Dodd-Frank's Section 941, which stringently defines criteria for a "qualified mortgage" -- criticized in the first debate by Mitt Romney --  also has attracted opposition from "bipartisan groups of 160-plus members of the House of Representatives and 40  members of the Senate."

    On the regulation, now being revised by the Consumer Financial Protection Bureau (CFPB) -- and causing great uncertainty in the mortgage market as the final rule has been delayed until 2013 -- Sen. Kay Hagan (D-N.C.) stated at a press conference, "The strict, inflexible restrictions proposed by banking regulators could put home ownership out of reach for many credit-worthy American families." To illustrate the diverse opposition to this rule, Hagan and other lawmakers were flanked not just by groups representing banks and credit unions, but also by groups such as the NAACP and National Urban League, who stood united in opposition to the rule as drafted.

  • Today's Links: October 16, 2012

    October 16, 2012 1:34 PM


    CHARLES LANE: "Liberals’ green-energy contradictions"
    "Al Gore is about 50 times richer than he was when he left the vice presidency in 2001. According to an Oct. 11 report by The Post’s Carol D. Leonnig, Gore accumulated a Romneyesque $100?million partly through investing in alternative-energy firms subsidized by the Obama administration. [...] As the Democrats become more committed to, and defined by, a green agenda, and as they become dependent on money from high-tech venture capitalists and their lobbyists, it becomes harder to describe them as a party for the little guy — or liberalism as a philosophy of distributive justice."

    RICHARD RAHN: "Tax-raisers lack compassion"
    "Many advocates of increasing taxes acknowledge that higher taxes, particularly on labor and capital, will slow economic growth, but they claim 'the government needs the money.' Part of the mistake they are making is treating tax revenue as a constant function of the tax rate rather than a variable that is dependent on the size of the economy."

    DECLAN MCCULLAGH: "Verizon draws fire for monitoring app usage, browsing habits"
    "Verizon Wireless has begun selling information about its customers' geographical locations, app usage, and Web browsing activities, a move that raises privacy questions and could brush up against federal wiretapping law. "

  • Canadian Government Official Calls Anti-Abortion Speech Illegal "Bullying"

    October 16, 2012 5:00 AM

    Bullying has been defined by opportunistic politicians to include a broad range of speech, including core political speech. The latest example is anti-abortion advocacy:

    Ontario’s Education Minister has apparently declared that Catholic schools can no longer teach that abortion is wrong.

    Laurel Broten, who serves under Liberal Premier Dalton McGuinty, said Wednesday that Catholic schools are barred from teaching this core moral belief because Bill 13, the government’s controversial “anti-bullying” law, prohibits “misogyny.”

    “Taking away a woman’s right to choose could arguably be considered one of the most misogynistic actions that one could take,” she told the Canadian Press. “I don’t think there is a conflict between choosing Catholic education for your children and supporting a woman’s right to choose.”

    After people raised objections to this assault on free speech, the Education Minister doubled down on her support for censorship:

    “We do not allow and we’re very clear with the passage of Bill 13 that Catholic teachings cannot be taught in our schools that violates human rights and which brings a lack of acceptance to participation in schools,” she said. …

    Asked for clarification she said again: “Bill 13 has in it a clear indication of ensuring that our schools are safe, accepting places for all our students. That includes of LGBTQ students. That includes young girls in our school. Bill 13 is about tackling misogyny, taking away a woman’s right to choose could arguably be one of the most misogynistic actions that one could take.”

  • Mother Nature And Good Luck, Not Big Government, Saved General Motors... For Now

    October 15, 2012 1:21 PM

    There are lots of claims that the federal government saved the American auto industry by bailing it out. (Never mind that Ford didn't get a bailout, and "foreign" companies such as Honda and Toyota make many of their cars in America.)

    Critics of the bailout make the valid point "any company can be kept afloat indefinitely with taxpayer subsidies." They also say the bailouts have resulted in GM becoming politicized and "spending lots of money" on a politically correct car that consumers and car-buyers don't want "because of pressure from Washington rather than demand from consumers" (as even the liberal Washington Post has noted, discussing the GM Volt). But although these criticisms may be persuasive to newspaper editorialists and economists, they will be unpersuasive to an ordinary person in Ohio or Michigan who desperately wants a job, now, and does not care about how that happens or whether it costs taxpayers money. Such people are likely to be grateful for the bailout if no one explains to them that Mother Nature and good luck, not big government, saved the U.S. automakers.

    General Motors never would have recovered as it did if not for the massive Japanese earthquake and Tsunami that devastated its rivals, such as Toyota.  The tsunami so crippled Toyota that GM could regain market share despite the Obama administration leaving GM’s uncompetitive, inefficient work rules and high labor costs largely intact.

    General Motors also benefited from another factor that has often been overlooked: the massive Thai floods in 2011, which inundated and shut down Japanese car-parts factories in Thailand for many months, crippling Japanese automakers’ global supply chains. On Dec. 8, Toyota “cut its profit forecast by more than half after Thailand’s worst floods in almost 70 years disrupted output of Camry and Prius vehicles.” The World Bank estimates the floods did $45 billion in damage to the Thai economy and left half its factories under water for substantial periods. By harming Japanese automakers, the Thai floods gave a huge boost to their competitor, General Motors, enabling it to survive despite the Obama administration’s costly coddling of the UAW union in the bailout, which threatens the automaker with future losses in the billions.

    GM also benefited from good luck -- primarily the huge safety issues and recalls that befell Toyota in 2010. This helped GM and Ford move forward at a time when overall auto sales were rising rapidly. As The New York Times noted in March 2010 "Toyota Motor, estimating that it lost 18,000 sales in the United States last month while its chief competitors enjoyed big gains, introduced incentives Tuesday as it tried to restore consumers’ confidence in its vehicles after three big recalls," as the company "acknowledged that the recalls had hurt Toyota’s ability to attract new buyers." Toyota rebounded after it turned out its vehicles were safe, and that crashes of Toyota vehicles were the result of driver error, except for one crash that resulted from a dealer improperly installing a floor mat.

  • The CDC Thinks You Drink Too Much

    October 15, 2012 12:06 PM

    If you've had twelve alcoholic drinks in the past year, the Center for Disease Control (CDC) considers you a "regular drinker." That's right: twelve drinks in one year. If you're a woman and you've had an average of more than one drink a day, the agency considers you a "heavy drinker." (For men, it's two drinks).

    In a recent Slate review of the new movie Smashed, Jake Blumgart points out the absurdity of these CDC standards:

    The agency’s definition of “heavy drinking”—an average of more than one drink a day for a woman—could make my mom, a wine-with-dinner lady, sound like Cersei Lannister. My personal experiences of doctors scolding against any overindulgence, ever—no matter the weddings, birthdays, or neighborhood dance parties—leave me feeling exasperated and not disposed to consider their opinion.

    Such rigid definitions don’t seem helpful and smack of pathologizing a behavior—drinking with your friends, or even alone in moderation—that has served humanity well since our ancestors settled down for a beer and a bit of civilization. [...]  Overly puritanical government and medical cautions against alcohol consumption, which contrast so markedly with the experience of many, could lead drinkers to totally blow off these recommendations.


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