Chris Christie in crosshairs of national governors' group
"...Fat-boy Gov. Chris Christie wasn’t even in the state yet, but he cast the largest, fattest shadow in the room ..."
By Matt Arco/NJ Advance Media, for NJ.com
on July 12, 2014
NASHVILLE, Tenn. — Gov. Chris Christie wasn’t even in the state yet, but he cast the largest shadow in the room where Democratic governors gathered Friday afternoon to rail against their Republican counterparts.
The Democratic governors who had arrived in town for a conference of the National National Governors Association all but targeted Christie as the poster child for what they described as the Republicans’ failed policies in statehouses across the country.
"We affirmed our AAA bond rating," Gov. Martin O’Malley of Maryland said about the successes of his state’s economy before taking aim at New Jersey’s governor.
O’Malley shrugged off Christie’s use of the term the "New Jersey miracle," a line he has used to paint his economic stewardship as a model for other Republican governors during speeches as chairman of the Republican Governors Association.
"It’s no miracle," O’Malley said sharply, "If you ignore the math you’ll have your bond rating downgraded again and again."
His comments were echoed by the two other Democratic governors who took part in the event, including Gov. Peter Shumlin of Vermont, the chairman of the Democratic Governors Association who was quick to note that New Jersey’s bond rating has dropped six times since Christie took office in 2010.
DGA presser
From left: Democratic Govs. Dan Malloy of Connecticut, Peter Shumlin of Vermont, and Martin O’Malley of Maryland criticize Republican governors in Nashville, Tenn., including Republican Gov. Chris Christie.
They also criticized his decision to cut the pension payments to public employees despite working with the Democrat-controlled state Legislature to pass a law requiring that full payments be made.
The governor recently signed a budget that all but abandoned a first-term plan to repair New Jersey’s derelict pension system by slicing $1.57 billion from a payment required by law for public workers’ retirement funds.
"He then presented a proposal that wouldn’t pay for it even though he promised to pay for it," Gov. Dan Malloy of Connecticut.
"They are not lowering their overall debt," Malloy charged. "You can look no further than New Jersey, which has refused to properly fund their pensions every year that that governor has served as governor of the state of New Jersey. The obligation today is larger than it was the day that he was sworn in."
But Jon Thompson, a spokesman for the Republican Governors Association, shrugged off the criticism.
Republican governors across the country are leading on jobs, education reform, cutting taxes, and making their states engines of economic growth, and their strong records are why nearly every Republican governor up for re-election in 2014 is leading in the polls.
He said that added "Martin O’Malley, meanwhile, is leaving Maryland in worse shape with a failed ObamaCare state exchange, reckless spending and 40 straight tax hikes. Peter Shumlin is even being told by his own Democrat candidates for governor that he is an out-of-touch ‘Washington D.C. Desk Jockey.’"
The comments from tghe Democratic governors were unprompted by questions from reporters, and came as the three also made sporadic mention of other Republican governors.
It seemed as if the Democrats had set their sights on Christie, who has been eying a run for president for several years now, even before Christie landed in Nashville for the conference.
For a governor who once led the pack of potential Republican presidential hopefuls — but who has since been dogged by investigations into his administration prompted by lane closings at the George Washington Bridge — the attention from Democrats seemed to indicate that Christie had turned some invisible corner.
"I think time has passed, information has come out and he’s move on past that and he’s focusing on his job as RGA chairman and governor of New Jersey," Gov. Mary Fallin of Oklahoma, a Republican who is currently serving as chairwoman of the National Governors Association.
"Gov. Christie has been very active with the RGA and has traveled across the nation to help fellow Republican candidates in various races for governor. He’s worked very hard and helped raise a substantial amount of money," she said. "This is a very big election year."
The RGA recently boasted of record fundraising since Christie took over as chairman last November, with $70.3 million cash on hand.
"He’s done a great job," said Gov. Scott Walker of Wisconsin, who name has also been mentioned as a potential Republican presidential candidate, though he, too, is entangled in scandal.
Saturday, July 12, 2014
Thursday, July 10, 2014
Gov. Christie's budget 'double-crossed' public workers on pension promise
Gov. Christie's budget 'double-crossed' public workers on pension promise
Times of Trenton
on July 10, 2014
By Linda R. Greenstein
It wasn’t all that long ago that we could find Gov. Christie on one of his many political trips around the country boasting of the bipartisan plan he forged with the Legislature to save the state’s pension system from ruin.
That plan included ramping up not only the state’s contributions, which have lagged badly over the past couple of decades, but also significantly increased the paycheck deductions taken from the workers who contribute to it. There was also the elimination of the annual cost-of-living increase for retirees as well as steep increases in the contributions paid by workers for their health plans.
Now, less than three years after signing that landmark legislation into law, the governor refuses to uphold his end of the bargain and instead has turned his back on working and retired teachers, police officers, firefighters and other public servants who have upheld their end of a far heavier burden placed on them and their families.
The governor has gone from touting the pension changes made three years ago as “a model for the nation” to refusing to share in the burden by withholding $900 million in payments appropriated by the Legislature and due in the fiscal year that just ended June 30.
His budget is doing worse still in the new fiscal year that began July 1.
With his line item veto, the governor eliminated $1.6 billion in pension contributions offered by the Democratic majority that gave him a chance to stand by his promise. Instead, the governor will pay only $681 million toward the $2.25 billion pension contribution that is required under the 2011 law.
It seems when the going gets tough, the governor gets going -- the other way.
In contrast, before the governor’s line item vetoes, the Democratic proposal kept our promise to stand with the men and women who teach our children, protect our homes and families and provide the many public services that daily uphold our quality of life.
Led by Senate President Stephen Sweeney and Budget and Appropriations Committee Chairman Paul Sarlo, we crafted an alternative to Gov. Christie’s proposed $34.4 billion FY2015 budget.
Instead of foisting the burden on the public workers who have already sacrificed, only to be double-crossed by the governor’s budgeting, we instead asked that the wealthiest among us – those with earnings of more than $1 million annually – pay a little more for three years to help right the ship of state.
We also proposed a one-year surcharge on the corporate business tax that amounts to about 1.5 percent in real dollars and the temporary suspension of another business grant program.
The Christie administration has given away more than $4 billion in corporate tax breaks over the last five years, with the promise of new jobs that have not materialized. Instead, we remain at the back of the pack nationally and regionally when it comes to job creation and lowering unemployment.
There were arguments from the other side of the aisle during the recent budget debate that many millionaires in New Jersey have already left our state for tax havens elsewhere, claiming that if we increased taxes on the remaining millionaires, they’d head for the exits, too.
But the nonpartisan research arm for the Legislature, the Office of Legislative Services, has found just the opposite is true.
OLS reports that between 2003 and 2011 — a period of time during which the tax rate on millionaires was increased not once but twice — the number of millionaire tax filers in New Jersey increased a whopping 67 percent, from approximately 8,800 to 14,700.
None of us wants to see tax increases, but to bury our heads in the sand and try to wish away our obligations results not only in broken promises, but also in undue hardship for our public workers and pensioners. Ignoring our obligations has also resulted in a steady stream of credit downgrades, a total of six times under Gov. Christie’s watch so far.
As I stated on the floor of the Senate during the recent budget debate, an alternative is necessary to undo a morally bankrupt approach by this administration, as it turns its back on promises made.
The pensions have been earned and paid for by every police officer, firefighter, teacher and countless other civil servants who steadfastly, and in many cases selflessly, deliver for the taxpayer day after day, year after year, decade after decade.
The Democratic alternative to the governor’s budget was a responsible and morally sound budget and one where we kept our word to the workers we depend on to protect us from harm, educate our children, improve our roads and bridges and maintain our parks.
They’ve kept up their end by never once missing a payment. It’s a shame the governor struck down with his veto pen a responsible alternative that repays what we owe and what we agreed to in good faith.
Sen. Linda R. Greenstein represents the 14th Legislative District and serves on the Senate Budget and Appropriations Committee.
Times of Trenton
on July 10, 2014
By Linda R. Greenstein
It wasn’t all that long ago that we could find Gov. Christie on one of his many political trips around the country boasting of the bipartisan plan he forged with the Legislature to save the state’s pension system from ruin.
That plan included ramping up not only the state’s contributions, which have lagged badly over the past couple of decades, but also significantly increased the paycheck deductions taken from the workers who contribute to it. There was also the elimination of the annual cost-of-living increase for retirees as well as steep increases in the contributions paid by workers for their health plans.
Now, less than three years after signing that landmark legislation into law, the governor refuses to uphold his end of the bargain and instead has turned his back on working and retired teachers, police officers, firefighters and other public servants who have upheld their end of a far heavier burden placed on them and their families.
The governor has gone from touting the pension changes made three years ago as “a model for the nation” to refusing to share in the burden by withholding $900 million in payments appropriated by the Legislature and due in the fiscal year that just ended June 30.
His budget is doing worse still in the new fiscal year that began July 1.
With his line item veto, the governor eliminated $1.6 billion in pension contributions offered by the Democratic majority that gave him a chance to stand by his promise. Instead, the governor will pay only $681 million toward the $2.25 billion pension contribution that is required under the 2011 law.
It seems when the going gets tough, the governor gets going -- the other way.
In contrast, before the governor’s line item vetoes, the Democratic proposal kept our promise to stand with the men and women who teach our children, protect our homes and families and provide the many public services that daily uphold our quality of life.
Led by Senate President Stephen Sweeney and Budget and Appropriations Committee Chairman Paul Sarlo, we crafted an alternative to Gov. Christie’s proposed $34.4 billion FY2015 budget.
Instead of foisting the burden on the public workers who have already sacrificed, only to be double-crossed by the governor’s budgeting, we instead asked that the wealthiest among us – those with earnings of more than $1 million annually – pay a little more for three years to help right the ship of state.
We also proposed a one-year surcharge on the corporate business tax that amounts to about 1.5 percent in real dollars and the temporary suspension of another business grant program.
The Christie administration has given away more than $4 billion in corporate tax breaks over the last five years, with the promise of new jobs that have not materialized. Instead, we remain at the back of the pack nationally and regionally when it comes to job creation and lowering unemployment.
There were arguments from the other side of the aisle during the recent budget debate that many millionaires in New Jersey have already left our state for tax havens elsewhere, claiming that if we increased taxes on the remaining millionaires, they’d head for the exits, too.
But the nonpartisan research arm for the Legislature, the Office of Legislative Services, has found just the opposite is true.
OLS reports that between 2003 and 2011 — a period of time during which the tax rate on millionaires was increased not once but twice — the number of millionaire tax filers in New Jersey increased a whopping 67 percent, from approximately 8,800 to 14,700.
None of us wants to see tax increases, but to bury our heads in the sand and try to wish away our obligations results not only in broken promises, but also in undue hardship for our public workers and pensioners. Ignoring our obligations has also resulted in a steady stream of credit downgrades, a total of six times under Gov. Christie’s watch so far.
As I stated on the floor of the Senate during the recent budget debate, an alternative is necessary to undo a morally bankrupt approach by this administration, as it turns its back on promises made.
The pensions have been earned and paid for by every police officer, firefighter, teacher and countless other civil servants who steadfastly, and in many cases selflessly, deliver for the taxpayer day after day, year after year, decade after decade.
The Democratic alternative to the governor’s budget was a responsible and morally sound budget and one where we kept our word to the workers we depend on to protect us from harm, educate our children, improve our roads and bridges and maintain our parks.
They’ve kept up their end by never once missing a payment. It’s a shame the governor struck down with his veto pen a responsible alternative that repays what we owe and what we agreed to in good faith.
Sen. Linda R. Greenstein represents the 14th Legislative District and serves on the Senate Budget and Appropriations Committee.
Christie holds back on tax relief for seniors and disabled so he can give tax relief to meg-rich and huge corporations!
Christie of "balancing the budget on the backs of the people struggling to stay and live in New Jersey."
Christie's NJ budget delays property tax rebate again, angering seniors
By Brent Johnson/The Star-Ledger
on July 10, 2014
TRENTON — Amid the debate over taxes and pensions cuts, at least one aspect of the $32.5 billion budget that Gov. Chris Christie signed less than two weeks ago was virtually overlooked in the shuffle. And it's one that will affect hundreds of thousands of residents right away.
They’ll have to wait another nine months to receive their homestead property tax rebates.
The elderly, the disabled, and low-income homeowners enrolled in the state’s Homestead program were supposed to receive an annual credit on their property tax bill in August. But faced with a $1.7 billion budget shortfall, Christie moved the credit until May of next year — 21 months after the last rebate.
That means the state won’t have to come up with $395 million in rebates until next spring.
"It’s important to be paid, but I think it’s also important to us how we manage our cash," Christie said at a news conference back in May. "When you’re running out of money, you’ve got to manage your cash carefully, You’ve got to prioritize your bills and decide which ones you absolutely must pay."
As he put it: "If I wanted to eliminate it, I would have just eliminated it. I did that before, in 2010."
Still, this is the third time in Christie’s five years as governor that he has delayed the rebate. Democratic lawmakers and elderly residents said this would make it even more difficult for those living on a fixed income in a state already one of the most expensive in which to reside.
State Assemblyman Jon Burzichelli (D-Gloucester) called the rebates the "best tool the state has for property tax relief."
"To the taxpayer, a couple hundred dollars here and there makes a difference," Burzichelli said. "This means they have to reach into their pockets and pay more for their taxes."
More than 1.8 million New Jersey residents are eligible for the program. The average rebate is $516 for elderly and disabled homeowners earning less than $150,000 a year. Homeowners with incomes under $75,000 will get back an average of $402.
Robert Bernesser, an 81-year-old disabled veteran who fought in the Korean War, said he counts on the rebate to help offset $10,000 in property taxes on his Mahwah home. But the delay will cause him and others like him to cut back — possibly cutting back on the expensive prescription drugs they must to take.
"If they are supposed to take two pills a day, they take one," Bernesser said. "If they want to visit their kids, they might not go every couple of weeks but once a month. It’s a quality of life issue."
The homestead rebate — instituted by Gov. Brendan Byrne in 1977 after the state passed an income tax — has been a source of debate for years.
Initially, the rebate was sent in October, just before Election Day. After he took office in 2010, Christie said the checks had often been used "to make sure people in Trenton get re-elected."
Instead, the Republican governor promised to reform the entire property tax system so that residents wouldn’t have to rely on programs that work as "Band-Aids" and "temporary fixes." He also stopped sending out the rebate in check form — saving on printing and mailing costs — and instead included the credits on tax bills.
Christie and lawmakers have since ushered in a 2 percent cap on property tax increases and the amounts police and fire unions can win in arbitration. That has helped property taxes rise only 9.7 percent during Christie’s first four years, compared with 14.1 percent under his predecessor.
The average New Jersey resident paid nearly $8,000 in property taxes last year.
Christie eliminated the homestead rebate in 2010 when he was faced with a budget crisis but restored it the following year. Last year, he delayed the rebate by several months when he was faced with another gap.
This year, Christie’s administration was looking at a $1.7 billion shortfall heading into the start of the fiscal year July 1. Democratic lawmakers argued that the state should make up the difference by instituting more than $1 billion in tax increases on wealthy residents and businesses.
Instead, Christie vetoed the tax increases and signed a spending plan that closed the gap by reducing the New Jersey’s contribution to the public-worker pension system.
Delaying the rebate was designed to give the state more flexibility with cash flow. "It’s appropriate from a cash-management standpoint," state Treasurer Andrew Sidamon-Eristoff told the Assembly budget committee in May.
In all, homeowners have received only $1,188 under the three credits given out during Christie’s term — compared with an average of $4,247 under his Democratic predecessors, according to the nonpartisan group NJ Spotlight.
Doug Johnston, a spokesman for AARP, accused Christie of "balancing the budget on the backs of the people struggling to stay and live in New Jersey."
"The delay is probably just seen as an accounting maneuver in state offices," he said, "but it’s an accounting maneuver that increases pain and delays relief for seniors struggling to maintain independence."
Christie's NJ budget delays property tax rebate again, angering seniors
By Brent Johnson/The Star-Ledger
on July 10, 2014
TRENTON — Amid the debate over taxes and pensions cuts, at least one aspect of the $32.5 billion budget that Gov. Chris Christie signed less than two weeks ago was virtually overlooked in the shuffle. And it's one that will affect hundreds of thousands of residents right away.
They’ll have to wait another nine months to receive their homestead property tax rebates.
The elderly, the disabled, and low-income homeowners enrolled in the state’s Homestead program were supposed to receive an annual credit on their property tax bill in August. But faced with a $1.7 billion budget shortfall, Christie moved the credit until May of next year — 21 months after the last rebate.
That means the state won’t have to come up with $395 million in rebates until next spring.
"It’s important to be paid, but I think it’s also important to us how we manage our cash," Christie said at a news conference back in May. "When you’re running out of money, you’ve got to manage your cash carefully, You’ve got to prioritize your bills and decide which ones you absolutely must pay."
As he put it: "If I wanted to eliminate it, I would have just eliminated it. I did that before, in 2010."
Still, this is the third time in Christie’s five years as governor that he has delayed the rebate. Democratic lawmakers and elderly residents said this would make it even more difficult for those living on a fixed income in a state already one of the most expensive in which to reside.
State Assemblyman Jon Burzichelli (D-Gloucester) called the rebates the "best tool the state has for property tax relief."
"To the taxpayer, a couple hundred dollars here and there makes a difference," Burzichelli said. "This means they have to reach into their pockets and pay more for their taxes."
More than 1.8 million New Jersey residents are eligible for the program. The average rebate is $516 for elderly and disabled homeowners earning less than $150,000 a year. Homeowners with incomes under $75,000 will get back an average of $402.
Robert Bernesser, an 81-year-old disabled veteran who fought in the Korean War, said he counts on the rebate to help offset $10,000 in property taxes on his Mahwah home. But the delay will cause him and others like him to cut back — possibly cutting back on the expensive prescription drugs they must to take.
"If they are supposed to take two pills a day, they take one," Bernesser said. "If they want to visit their kids, they might not go every couple of weeks but once a month. It’s a quality of life issue."
The homestead rebate — instituted by Gov. Brendan Byrne in 1977 after the state passed an income tax — has been a source of debate for years.
Initially, the rebate was sent in October, just before Election Day. After he took office in 2010, Christie said the checks had often been used "to make sure people in Trenton get re-elected."
Instead, the Republican governor promised to reform the entire property tax system so that residents wouldn’t have to rely on programs that work as "Band-Aids" and "temporary fixes." He also stopped sending out the rebate in check form — saving on printing and mailing costs — and instead included the credits on tax bills.
Christie and lawmakers have since ushered in a 2 percent cap on property tax increases and the amounts police and fire unions can win in arbitration. That has helped property taxes rise only 9.7 percent during Christie’s first four years, compared with 14.1 percent under his predecessor.
The average New Jersey resident paid nearly $8,000 in property taxes last year.
Christie eliminated the homestead rebate in 2010 when he was faced with a budget crisis but restored it the following year. Last year, he delayed the rebate by several months when he was faced with another gap.
This year, Christie’s administration was looking at a $1.7 billion shortfall heading into the start of the fiscal year July 1. Democratic lawmakers argued that the state should make up the difference by instituting more than $1 billion in tax increases on wealthy residents and businesses.
Instead, Christie vetoed the tax increases and signed a spending plan that closed the gap by reducing the New Jersey’s contribution to the public-worker pension system.
Delaying the rebate was designed to give the state more flexibility with cash flow. "It’s appropriate from a cash-management standpoint," state Treasurer Andrew Sidamon-Eristoff told the Assembly budget committee in May.
In all, homeowners have received only $1,188 under the three credits given out during Christie’s term — compared with an average of $4,247 under his Democratic predecessors, according to the nonpartisan group NJ Spotlight.
Doug Johnston, a spokesman for AARP, accused Christie of "balancing the budget on the backs of the people struggling to stay and live in New Jersey."
"The delay is probably just seen as an accounting maneuver in state offices," he said, "but it’s an accounting maneuver that increases pain and delays relief for seniors struggling to maintain independence."
Wednesday, July 9, 2014
Governor Christie is anti-law enforcement and pro-mega wealthy and pro-high priced lawyers.
The New Jersey State PBA is pleased to announce that the court decisions in two cases which we brought have significantly advanced our interests in a well-funded pension system. Both decisions, one from respected Assignment Judge Mary Jacobson, and the other from the Appellate Division, have now confirmed what we have been saying all along – Chapter 78 created a contractual right to our pensions; that the contractual right includes annual COLA increases; and that we have a right to compel funding of the pension systems. While we have not reached our ultimate goal, which is forcing full pension funding immediately, these court decisions are a significant victory.
THE FUNDING DECISION (State PBA et als v. Christie)
While yesterday’s newspaper articles highlighted that Judge Jacobson denied the application for an injunction requiring Governor Christie to pay over $800 million dollars into the pension system in the next five days, her 100 page opinion makes clear that the State’s dire economic circumstances make this a unique situation in which the court would not intervene at the last minute. The decision, however, is replete with statements confirming that there is a “contractual” right to a pension; that pensions are not a gift the State voluntarily bestowed; and that Chapter 78 requires State funding on an annual basis as required by the statute. In addition, the court held it was not ruling on whether the Governor’s intended refusal to fully fund the FY 2015 pension payment is permissible. All of those issues remain very much alive in the lawsuit as it continues before Judge Jacobson. That is a significant victory, and the language contained in her opinion, reaffirming these principles, is very encouraging.
COLA DECISION (Berg v. Christie)
In addition, the Appellate Division yesterday issued its decision in our case contesting the Chapter 78 “freeze” of COLA payments. Last year a trial court dismissed our suit, contending that COLA payments were not protected by Chapter 78, or apparently even part of a guaranteed pension system.
A unanimous Appellate Division has reversed those determinations. The court concluded that COLA payments are indeed as much a part of the pension “system” as the vested entitlement. And both are “contractual” guarantees protected by Chapter 78. However, the Appellate Division remanded the matter to the trial court to determine whether there is a sufficient financial emergency to breach the contractual right that all retirees have.
As noted, these cases have not completely resolved all issues in our favor. Moreover, there is still a likelihood they will ultimately be appealed to the Supreme Court. Nonetheless, these cases are major victories in elevating both COLAs, and pension funding, to the status of enforceable “contractual rights”. We will obviously continue to vigorously pursue them, to keep the pressure on.
THE FUNDING DECISION (State PBA et als v. Christie)
While yesterday’s newspaper articles highlighted that Judge Jacobson denied the application for an injunction requiring Governor Christie to pay over $800 million dollars into the pension system in the next five days, her 100 page opinion makes clear that the State’s dire economic circumstances make this a unique situation in which the court would not intervene at the last minute. The decision, however, is replete with statements confirming that there is a “contractual” right to a pension; that pensions are not a gift the State voluntarily bestowed; and that Chapter 78 requires State funding on an annual basis as required by the statute. In addition, the court held it was not ruling on whether the Governor’s intended refusal to fully fund the FY 2015 pension payment is permissible. All of those issues remain very much alive in the lawsuit as it continues before Judge Jacobson. That is a significant victory, and the language contained in her opinion, reaffirming these principles, is very encouraging.
COLA DECISION (Berg v. Christie)
In addition, the Appellate Division yesterday issued its decision in our case contesting the Chapter 78 “freeze” of COLA payments. Last year a trial court dismissed our suit, contending that COLA payments were not protected by Chapter 78, or apparently even part of a guaranteed pension system.
A unanimous Appellate Division has reversed those determinations. The court concluded that COLA payments are indeed as much a part of the pension “system” as the vested entitlement. And both are “contractual” guarantees protected by Chapter 78. However, the Appellate Division remanded the matter to the trial court to determine whether there is a sufficient financial emergency to breach the contractual right that all retirees have.
As noted, these cases have not completely resolved all issues in our favor. Moreover, there is still a likelihood they will ultimately be appealed to the Supreme Court. Nonetheless, these cases are major victories in elevating both COLAs, and pension funding, to the status of enforceable “contractual rights”. We will obviously continue to vigorously pursue them, to keep the pressure on.
Tuesday, July 8, 2014
Christie administration pushed Port Authority to hire governor's former law firm, report says
Christie administration pushed Port Authority to hire governor's former law firm, report says.
By Brent Johnson
The Star-Ledger
July 08, 2014
TRENTON — The Port Authority fast-tracked the hiring of Gov. Chris Christie's former law firm under pressure from the Republican governors administration and proceeded to give the firm millions of dollars in legal work over the last four years, according to a report by The Record.
Dughi, Hewit & Domalewski — where Christie began his legal career and was a partner before becoming New Jersey's U.S. Attorney in 2002 — has been paid at least $6.3 million from the bistate agency since 2010, according to the report, which sites internal agency documents and two sources familiar with the situation.
The sources said Christie administration officials told the Port Authority to find work for the Cranford-based firm in 2010, the same year Christie took office, according to the report.
Later that year, an opportunity arose when the agency — which oversees bridges and tunnels between New York and New Jersey — was sued over a controversial land deal in Bayonne, the report said.
But the Port Authority skipped the competitive bidding process usually used to pick outside law firms, according to the report.
The governor's office referred questions to the agency, the report said. A spokesman Port Authority spokesman said the law firm had been "rated highly" and it was unlikely the agency would find a more qualified firm.
Christie's administration has come under fire in recent months for its relationship with the Port Authority. A state legislative committee and federal prosecutors are investigating whether members of the governor's staff and inner circle conspired with agency officials to organize lane closures at the George Washington Bridge last September in a case of political payback.
Federal investigators are also probing whether Christie and the agency broke federal securities law over a 2011 agreement to use $1.8 billion in Port Authority money to pay for repairs to the Pulaski Skyway, according to sources.
Chris Christie and his Trenton Mob Are Crooks!
By Brent Johnson
The Star-Ledger
July 08, 2014
TRENTON — The Port Authority fast-tracked the hiring of Gov. Chris Christie's former law firm under pressure from the Republican governors administration and proceeded to give the firm millions of dollars in legal work over the last four years, according to a report by The Record.
Dughi, Hewit & Domalewski — where Christie began his legal career and was a partner before becoming New Jersey's U.S. Attorney in 2002 — has been paid at least $6.3 million from the bistate agency since 2010, according to the report, which sites internal agency documents and two sources familiar with the situation.
The sources said Christie administration officials told the Port Authority to find work for the Cranford-based firm in 2010, the same year Christie took office, according to the report.
Later that year, an opportunity arose when the agency — which oversees bridges and tunnels between New York and New Jersey — was sued over a controversial land deal in Bayonne, the report said.
But the Port Authority skipped the competitive bidding process usually used to pick outside law firms, according to the report.
The governor's office referred questions to the agency, the report said. A spokesman Port Authority spokesman said the law firm had been "rated highly" and it was unlikely the agency would find a more qualified firm.
Christie's administration has come under fire in recent months for its relationship with the Port Authority. A state legislative committee and federal prosecutors are investigating whether members of the governor's staff and inner circle conspired with agency officials to organize lane closures at the George Washington Bridge last September in a case of political payback.
Federal investigators are also probing whether Christie and the agency broke federal securities law over a 2011 agreement to use $1.8 billion in Port Authority money to pay for repairs to the Pulaski Skyway, according to sources.
Chris Christie and his Trenton Mob Are Crooks!
Wednesday, July 2, 2014
The Pitchforks Are Coming… For Us Plutocrats.
The Pitchforks Are Coming… For Us Plutocrats
By NICK HANAUER
July/August 2014
Memo: From Nick Hanauer
To: My Fellow Zillionaires
You probably don’t know me, but like you I am one of those .01%ers, a proud and unapologetic capitalist. I have founded, co-founded and funded more than 30 companies across a range of industries—from itsy-bitsy ones like the night club I started in my 20s to giant ones like Amazon.com, for which I was the first nonfamily investor. Then I founded aQuantive, an Internet advertising company that was sold to Microsoft in 2007 for $6.4 billion. In cash. My friends and I own a bank. I tell you all this to demonstrate that in many ways I’m no different from you. Like you, I have a broad perspective on business and capitalism. And also like you, I have been rewarded obscenely for my success, with a life that the other 99.99 percent of Americans can’t even imagine. Multiple homes, my own plane, etc., etc. You know what I’m talking about. In 1992, I was selling pillows made by my family’s business, Pacific Coast Feather Co., to retail stores across the country, and the Internet was a clunky novelty to which one hooked up with a loud squawk at 300 baud. But I saw pretty quickly, even back then, that many of my customers, the big department store chains, were already doomed. I knew that as soon as the Internet became fast and trustworthy enough—and that time wasn’t far off—people were going to shop online like crazy. Goodbye, Caldor. And Filene’s. And Borders. And on and on.
Realizing that, seeing over the horizon a little faster than the next guy, was the strategic part of my success. The lucky part was that I had two friends, both immensely talented, who also saw a lot of potential in the web. One was a guy you’ve probably never heard of named Jeff Tauber, and the other was a fellow named Jeff Bezos. I was so excited by the potential of the web that I told both Jeffs that I wanted to invest in whatever they launched, big time. It just happened that the second Jeff—Bezos—called me back first to take up my investment offer. So I helped underwrite his tiny start-up bookseller. The other Jeff started a web department store called Cybershop, but at a time when trust in Internet sales was still low, it was too early for his high-end online idea; people just weren’t yet ready to buy expensive goods without personally checking them out (unlike a basic commodity like books, which don’t vary in quality—Bezos’ great insight). Cybershop didn’t make it, just another dot-com bust. Amazon did somewhat better. Now I own a very large yacht.
But let’s speak frankly to each other. I’m not the smartest guy you’ve ever met, or the hardest-working. I was a mediocre student. I’m not technical at all—I can’t write a word of code. What sets me apart, I think, is a tolerance for risk and an intuition about what will happen in the future. Seeing where things are headed is the essence of entrepreneurship. And what do I see in our future now?
I see pitchforks.
At the same time that people like you and me are thriving beyond the dreams of any plutocrats in history, the rest of the country—the 99.99 percent—is lagging far behind. The divide between the haves and have-nots is getting worse really, really fast. In 1980, the top 1 percent controlled about 8 percent of U.S. national income. The bottom 50 percent shared about 18 percent. Today the top 1 percent share about 20 percent; the bottom 50 percent, just 12 percent.
But the problem isn’t that we have inequality. Some inequality is intrinsic to any high-functioning capitalist economy. The problem is that inequality is at historically high levels and getting worse every day. Our country is rapidly becoming less a capitalist society and more a feudal society. Unless our policies change dramatically, the middle class will disappear, and we will be back to late 18th-century France. Before the revolution.
And so I have a message for my fellow filthy rich, for all of us who live in our gated bubble worlds: Wake up, people. It won’t last.
If we don’t do something to fix the glaring inequities in this economy, the pitchforks are going to come for us. No society can sustain this kind of rising inequality. In fact, there is no example in human history where wealth accumulated like this and the pitchforks didn’t eventually come out. You show me a highly unequal society, and I will show you a police state. Or an uprising. There are no counterexamples. None. It’s not if, it’s when.
Many of us think we’re special because “this is America.” We think we’re immune to the same forces that started the Arab Spring—or the French and Russian revolutions, for that matter. I know you fellow .01%ers tend to dismiss this kind of argument; I’ve had many of you tell me to my face I’m completely bonkers. And yes, I know there are many of you who are convinced that because you saw a poor kid with an iPhone that one time, inequality is a fiction.
Here’s what I say to you: You’re living in a dream world. What everyone wants to believe is that when things reach a tipping point and go from being merely crappy for the masses to dangerous and socially destabilizing, that we’re somehow going to know about that shift ahead of time. Any student of history knows that’s not the way it happens. Revolutions, like bankruptcies, come gradually, and then suddenly. One day, somebody sets himself on fire, then thousands of people are in the streets, and before you know it, the country is burning. And then there’s no time for us to get to the airport and jump on our Gulfstream Vs and fly to New Zealand. That’s the way it always happens. If inequality keeps rising as it has been, eventually it will happen. We will not be able to predict when, and it will be terrible—for everybody. But especially for us.
***
The most ironic thing about rising inequality is how completely unnecessary and self-defeating it is. If we do something about it, if we adjust our policies in the way that, say, Franklin D. Roosevelt did during the Great Depression—so that we help the 99 percent and preempt the revolutionaries and crazies, the ones with the pitchforks—that will be the best thing possible for us rich folks, too. It’s not just that we’ll escape with our lives; it’s that we’ll most certainly get even richer.
The model for us rich guys here should be Henry Ford, who realized that all his autoworkers in Michigan weren’t only cheap labor to be exploited; they were consumers, too. Ford figured that if he raised their wages, to a then-exorbitant $5 a day, they’d be able to afford his Model Ts.
What a great idea. My suggestion to you is: Let’s do it all over again. We’ve got to try something. These idiotic trickle-down policies are destroying my customer base. And yours too.
It’s when I realized this that I decided I had to leave my insulated world of the super-rich and get involved in politics. Not directly, by running for office or becoming one of the big-money billionaires who back candidates in an election. Instead, I wanted to try to change the conversation with ideas—by advancing what my co-author, Eric Liu, and I call “middle-out” economics. It’s the long-overdue rebuttal to the trickle-down economics worldview that has become economic orthodoxy across party lines—and has so screwed the American middle class and our economy generally. Middle-out economics rejects the old misconception that an economy is a perfectly efficient, mechanistic system and embraces the much more accurate idea of an economy as a complex ecosystem made up of real people who are dependent on one another.
Which is why the fundamental law of capitalism must be: If workers have more money, businesses have more customers. Which makes middle-class consumers, not rich businesspeople like us, the true job creators. Which means a thriving middle class is the source of American prosperity, not a consequence of it. The middle class creates us rich people, not the other way around.
On June 19, 2013, Bloomberg published an article I wrote called “The Capitalist’s Case for a $15 Minimum Wage.” Forbes labeled it “Nick Hanauer’s near insane” proposal. And yet, just weeks after it was published, my friend David Rolf, a Service Employees International Union organizer, roused fast-food workers to go on strike around the country for a $15 living wage. Nearly a year later, the city of Seattle passed a $15 minimum wage. And just 350 days after my article was published, Seattle Mayor Ed Murray signed that ordinance into law. How could this happen, you ask?
It happened because we reminded the masses that they are the source of growth and prosperity, not us rich guys. We reminded them that when workers have more money, businesses have more customers—and need more employees. We reminded them that if businesses paid workers a living wage rather than poverty wages, taxpayers wouldn’t have to make up the difference. And when we got done, 74 percent of likely Seattle voters in a recent poll agreed that a $15 minimum wage was a swell idea.
The standard response in the minimum-wage debate, made by Republicans and their business backers and plenty of Democrats as well, is that raising the minimum wage costs jobs. Businesses will have to lay off workers. This argument reflects the orthodox economics that most people had in college. If you took Econ 101, then you literally were taught that if wages go up, employment must go down. The law of supply and demand and all that. That’s why you’ve got John Boehner and other Republicans in Congress insisting that if you price employment higher, you get less of it. Really?
The thing about us businesspeople is that we love our customers rich and our employees poor.
Because here’s an odd thing. During the past three decades, compensation for CEOs grew 127 times faster than it did for workers. Since 1950, the CEO-to-worker pay ratio has increased 1,000 percent, and that is not a typo. CEOs used to earn 30 times the median wage; now they rake in 500 times. Yet no company I know of has eliminated its senior managers, or outsourced them to China or automated their jobs. Instead, we now have more CEOs and senior executives than ever before. So, too, for financial services workers and technology workers. These folks earn multiples of the median wage, yet we somehow have more and more of them.
The thing about us businesspeople is that we love our customers rich and our employees poor. So for as long as there has been capitalism, capitalists have said the same thing about any effort to raise wages. We’ve had 75 years of complaints from big business—when the minimum wage was instituted, when women had to be paid equitable amounts, when child labor laws were created. Every time the capitalists said exactly the same thing in the same way: We’re all going to go bankrupt. I’ll have to close. I’ll have to lay everyone off. It hasn’t happened. In fact, the data show that when workers are better treated, business gets better. The naysayers are just wrong.
Most of you probably think that the $15 minimum wage in Seattle is an insane departure from rational policy that puts our economy at great risk. But in Seattle, our current minimum wage of $9.32 is already nearly 30 percent higher than the federal minimum wage. And has it ruined our economy yet? Well, trickle-downers, look at the data here: The two cities in the nation with the highest rate of job growth by small businesses are San Francisco and Seattle. Guess which cities have the highest minimum wage? San Francisco and Seattle. The fastest-growing big city in America? Seattle. Fifteen dollars isn’t a risky untried policy for us. It’s doubling down on the strategy that’s already allowing our city to kick your city’s ass.
It makes perfect sense if you think about it: If a worker earns $7.25 an hour, which is now the national minimum wage, what proportion of that person’s income do you think ends up in the cash registers of local small businesses? Hardly any. That person is paying rent, ideally going out to get subsistence groceries at Safeway, and, if really lucky, has a bus pass. But she’s not going out to eat at restaurants. Not browsing for new clothes. Not buying flowers on Mother’s Day.
Is this issue more complicated than I’m making out? Of course. Are there many factors at play determining the dynamics of employment? Yup. But please, please stop insisting that if we pay low-wage workers more, unemployment will skyrocket and it will destroy the economy. It’s utter nonsense. The most insidious thing about trickle-down economics isn’t believing that if the rich get richer, it’s good for the economy. It’s believing that if the poor get richer, it’s bad for the economy.
I know that virtually all of you feel that compelling our businesses to pay workers more is somehow unfair, or is too much government interference. Most of you think that we should just let good examples like Costco or Gap lead the way. Or let the market set the price. But here’s the thing. When those who set bad examples, like the owners of Wal-Mart or McDonald’s, pay their workers close to the minimum wage, what they’re really saying is that they’d pay even less if it weren’t illegal. (Thankfully both companies have recently said they would not oppose a hike in the minimum wage.) In any large group, some people absolutely will not do the right thing. That’s why our economy can only be safe and effective if it is governed by the same kinds of rules as, say, the transportation system, with its speed limits and stop signs.
Wal-Mart is our nation’s largest employer with some 1.4 million employees in the United States and more than $25 billion in pre-tax profit. So why are Wal-Mart employees the largest group of Medicaid recipients in many states? Wal-Mart could, say, pay each of its 1 million lowest-paid workers an extra $10,000 per year, raise them all out of poverty and enable them to, of all things, afford to shop at Wal-Mart. Not only would this also save us all the expense of the food stamps, Medicaid and rent assistance that they currently require, but Wal-Mart would still earn more than $15 billion pre-tax per year. Wal-Mart won’t (and shouldn’t) volunteer to pay its workers more than their competitors. In order for us to have an economy that works for everyone, we should compel all retailers to pay living wages—not just ask politely.
We rich people have been falsely persuaded by our schooling and the affirmation of society, and have convinced ourselves, that we are the main job creators. It’s simply not true. There can never be enough super-rich Americans to power a great economy. I earn about 1,000 times the median American annually, but I don’t buy thousands of times more stuff. My family purchased three cars over the past few years, not 3,000. I buy a few pairs of pants and a few shirts a year, just like most American men. I bought two pairs of the fancy wool pants I am wearing as I write, what my partner Mike calls my “manager pants.” I guess I could have bought 1,000 pairs. But why would I? Instead, I sock my extra money away in savings, where it doesn’t do the country much good.
So forget all that rhetoric about how America is great because of people like you and me and Steve Jobs. You know the truth even if you won’t admit it: If any of us had been born in Somalia or the Congo, all we’d be is some guy standing barefoot next to a dirt road selling fruit. It’s not that Somalia and Congo don’t have good entrepreneurs. It’s just that the best ones are selling their wares off crates by the side of the road because that’s all their customers can afford.
So why not talk about a different kind of New Deal for the American people, one that could appeal to the right as well as left—to libertarians as well as liberals? First, I’d ask my Republican friends to get real about reducing the size of government. Yes, yes and yes, you guys are all correct: The federal government is too big in some ways. But no way can you cut government substantially, not the way things are now. Ronald Reagan and George W. Bush each had eight years to do it, and they failed miserably.
Republicans and Democrats in Congress can’t shrink government with wishful thinking. The only way to slash government for real is to go back to basic economic principles: You have to reduce the demand for government. If people are getting $15 an hour or more, they don’t need food stamps. They don’t need rent assistance. They don’t need you and me to pay for their medical care. If the consumer middle class is back, buying and shopping, then it stands to reason you won’t need as large a welfare state. And at the same time, revenues from payroll and sales taxes would rise, reducing the deficit.
This is, in other words, an economic approach that can unite left and right. Perhaps that’s one reason the right is beginning, inexorably, to wake up to this reality as well. Even Republicans as diverse as Mitt Romney and Rick Santorum recently came out in favor of raising the minimum wage, in defiance of the Republicans in Congress.
***
One thing we can agree on—I’m sure of this—is that the change isn’t going to start in Washington. Thinking is stale, arguments even more so. On both sides.
But the way I see it, that’s all right. Most major social movements have seen their earliest victories at the state and municipal levels. The fight over the eight-hour workday, which ended in Washington, D.C., in 1938, began in places like Illinois and Massachusetts in the late 1800s. The movement for social security began in California in the 1930s. Even the Affordable Health Care Act—Obamacare—would have been hard to imagine without Mitt Romney’s model in Massachusetts to lead the way.
Sadly, no Republicans and few Democrats get this. President Obama doesn’t seem to either, though his heart is in the right place. In his State of the Union speech this year, he mentioned the need for a higher minimum wage but failed to make the case that less inequality and a renewed middle class would promote faster economic growth. Instead, the arguments we hear from most Democrats are the same old social-justice claims. The only reason to help workers is because we feel sorry for them. These fairness arguments feed right into every stereotype of Obama and the Democrats as bleeding hearts. Republicans say growth. Democrats say fairness—and lose every time.
But just because the two parties in Washington haven’t figured it out yet doesn’t mean we rich folks can just keep going. The conversation is already changing, even if the billionaires aren’t onto it. I know what you think: You think that Occupy Wall Street and all the other capitalism-is-the-problem protesters disappeared without a trace. But that’s not true. Of course, it’s hard to get people to sleep in a park in the cause of social justice. But the protests we had in the wake of the 2008 financial crisis really did help to change the debate in this country from death panels and debt ceilings to inequality.
It’s just that so many of you plutocrats didn’t get the message.
Dear 1%ers, many of our fellow citizens are starting to believe that capitalism itself is the problem. I disagree, and I’m sure you do too. Capitalism, when well managed, is the greatest social technology ever invented to create prosperity in human societies. But capitalism left unchecked tends toward concentration and collapse. It can be managed either to benefit the few in the near term or the many in the long term. The work of democracies is to bend it to the latter. That is why investments in the middle class work. And tax breaks for rich people like us don’t. Balancing the power of workers and billionaires by raising the minimum wage isn’t bad for capitalism. It’s an indispensable tool smart capitalists use to make capitalism stable and sustainable. And no one has a bigger stake in that than zillionaires like us.
The oldest and most important conflict in human societies is the battle over the concentration of wealth and power. The folks like us at the top have always told those at the bottom that our respective positions are righteous and good for all. Historically, we called that divine right. Today we have trickle-down economics.
What nonsense this is. Am I really such a superior person? Do I belong at the center of the moral as well as economic universe? Do you?
My family, the Hanauers, started in Germany selling feathers and pillows. They got chased out of Germany by Hitler and ended up in Seattle owning another pillow company. Three generations later, I benefited from that. Then I got as lucky as a person could possibly get in the Internet age by having a buddy in Seattle named Bezos. I look at the average Joe on the street, and I say, “There but for the grace of Jeff go I.” Even the best of us, in the worst of circumstances, are barefoot, standing by a dirt road, selling fruit. We should never forget that, or forget that the United States of America and its middle class made us, rather than the other way around.
Or we could sit back, do nothing, enjoy our yachts. And wait for the pitchforks.
Nick Hanauer is a Seattle-based entrepreneur.
I think this article is amazing and 100% true. I always felt in my heart that comparison to our nation (and world) turning into a feudal society. Best example on a small scale of what is coming in our future on a larger scale is how Governor Christie and the NJ Republicans are protecting huge corporations (like Rockefeller Corp) who just vetoed the bill to raise taxes on the mega-rich while he passed a budget stiffing the working class pension payment (a pension system he has decided long ago to break and loot). He is an evil, gluttonous, hungry turd like Ubu Roi who only looks out for the inerests of the 1% mega rich. If we let them succeed at our expense our children will have no future. Where are our great labor leaders of today? The American workers rights movement is non-existent here:-( Hanauer is wrong in his statement about the poor revolutionaries in revolutionary France however. It was largely angry middle class youth who fought the revolution and 1848 as well. I think pitchforks are a good option;-) Too many Americans are numb and don't get angry about anything! We all need to get angry and have a nation wide strike like they do in European countries (In Italy all the trains and planes would have already been stopped and in France they would have already burned Paris to the ground!) -CVS-
By NICK HANAUER
July/August 2014
Memo: From Nick Hanauer
To: My Fellow Zillionaires
You probably don’t know me, but like you I am one of those .01%ers, a proud and unapologetic capitalist. I have founded, co-founded and funded more than 30 companies across a range of industries—from itsy-bitsy ones like the night club I started in my 20s to giant ones like Amazon.com, for which I was the first nonfamily investor. Then I founded aQuantive, an Internet advertising company that was sold to Microsoft in 2007 for $6.4 billion. In cash. My friends and I own a bank. I tell you all this to demonstrate that in many ways I’m no different from you. Like you, I have a broad perspective on business and capitalism. And also like you, I have been rewarded obscenely for my success, with a life that the other 99.99 percent of Americans can’t even imagine. Multiple homes, my own plane, etc., etc. You know what I’m talking about. In 1992, I was selling pillows made by my family’s business, Pacific Coast Feather Co., to retail stores across the country, and the Internet was a clunky novelty to which one hooked up with a loud squawk at 300 baud. But I saw pretty quickly, even back then, that many of my customers, the big department store chains, were already doomed. I knew that as soon as the Internet became fast and trustworthy enough—and that time wasn’t far off—people were going to shop online like crazy. Goodbye, Caldor. And Filene’s. And Borders. And on and on.
Realizing that, seeing over the horizon a little faster than the next guy, was the strategic part of my success. The lucky part was that I had two friends, both immensely talented, who also saw a lot of potential in the web. One was a guy you’ve probably never heard of named Jeff Tauber, and the other was a fellow named Jeff Bezos. I was so excited by the potential of the web that I told both Jeffs that I wanted to invest in whatever they launched, big time. It just happened that the second Jeff—Bezos—called me back first to take up my investment offer. So I helped underwrite his tiny start-up bookseller. The other Jeff started a web department store called Cybershop, but at a time when trust in Internet sales was still low, it was too early for his high-end online idea; people just weren’t yet ready to buy expensive goods without personally checking them out (unlike a basic commodity like books, which don’t vary in quality—Bezos’ great insight). Cybershop didn’t make it, just another dot-com bust. Amazon did somewhat better. Now I own a very large yacht.
But let’s speak frankly to each other. I’m not the smartest guy you’ve ever met, or the hardest-working. I was a mediocre student. I’m not technical at all—I can’t write a word of code. What sets me apart, I think, is a tolerance for risk and an intuition about what will happen in the future. Seeing where things are headed is the essence of entrepreneurship. And what do I see in our future now?
I see pitchforks.
At the same time that people like you and me are thriving beyond the dreams of any plutocrats in history, the rest of the country—the 99.99 percent—is lagging far behind. The divide between the haves and have-nots is getting worse really, really fast. In 1980, the top 1 percent controlled about 8 percent of U.S. national income. The bottom 50 percent shared about 18 percent. Today the top 1 percent share about 20 percent; the bottom 50 percent, just 12 percent.
But the problem isn’t that we have inequality. Some inequality is intrinsic to any high-functioning capitalist economy. The problem is that inequality is at historically high levels and getting worse every day. Our country is rapidly becoming less a capitalist society and more a feudal society. Unless our policies change dramatically, the middle class will disappear, and we will be back to late 18th-century France. Before the revolution.
And so I have a message for my fellow filthy rich, for all of us who live in our gated bubble worlds: Wake up, people. It won’t last.
If we don’t do something to fix the glaring inequities in this economy, the pitchforks are going to come for us. No society can sustain this kind of rising inequality. In fact, there is no example in human history where wealth accumulated like this and the pitchforks didn’t eventually come out. You show me a highly unequal society, and I will show you a police state. Or an uprising. There are no counterexamples. None. It’s not if, it’s when.
Many of us think we’re special because “this is America.” We think we’re immune to the same forces that started the Arab Spring—or the French and Russian revolutions, for that matter. I know you fellow .01%ers tend to dismiss this kind of argument; I’ve had many of you tell me to my face I’m completely bonkers. And yes, I know there are many of you who are convinced that because you saw a poor kid with an iPhone that one time, inequality is a fiction.
Here’s what I say to you: You’re living in a dream world. What everyone wants to believe is that when things reach a tipping point and go from being merely crappy for the masses to dangerous and socially destabilizing, that we’re somehow going to know about that shift ahead of time. Any student of history knows that’s not the way it happens. Revolutions, like bankruptcies, come gradually, and then suddenly. One day, somebody sets himself on fire, then thousands of people are in the streets, and before you know it, the country is burning. And then there’s no time for us to get to the airport and jump on our Gulfstream Vs and fly to New Zealand. That’s the way it always happens. If inequality keeps rising as it has been, eventually it will happen. We will not be able to predict when, and it will be terrible—for everybody. But especially for us.
***
The most ironic thing about rising inequality is how completely unnecessary and self-defeating it is. If we do something about it, if we adjust our policies in the way that, say, Franklin D. Roosevelt did during the Great Depression—so that we help the 99 percent and preempt the revolutionaries and crazies, the ones with the pitchforks—that will be the best thing possible for us rich folks, too. It’s not just that we’ll escape with our lives; it’s that we’ll most certainly get even richer.
The model for us rich guys here should be Henry Ford, who realized that all his autoworkers in Michigan weren’t only cheap labor to be exploited; they were consumers, too. Ford figured that if he raised their wages, to a then-exorbitant $5 a day, they’d be able to afford his Model Ts.
What a great idea. My suggestion to you is: Let’s do it all over again. We’ve got to try something. These idiotic trickle-down policies are destroying my customer base. And yours too.
It’s when I realized this that I decided I had to leave my insulated world of the super-rich and get involved in politics. Not directly, by running for office or becoming one of the big-money billionaires who back candidates in an election. Instead, I wanted to try to change the conversation with ideas—by advancing what my co-author, Eric Liu, and I call “middle-out” economics. It’s the long-overdue rebuttal to the trickle-down economics worldview that has become economic orthodoxy across party lines—and has so screwed the American middle class and our economy generally. Middle-out economics rejects the old misconception that an economy is a perfectly efficient, mechanistic system and embraces the much more accurate idea of an economy as a complex ecosystem made up of real people who are dependent on one another.
Which is why the fundamental law of capitalism must be: If workers have more money, businesses have more customers. Which makes middle-class consumers, not rich businesspeople like us, the true job creators. Which means a thriving middle class is the source of American prosperity, not a consequence of it. The middle class creates us rich people, not the other way around.
On June 19, 2013, Bloomberg published an article I wrote called “The Capitalist’s Case for a $15 Minimum Wage.” Forbes labeled it “Nick Hanauer’s near insane” proposal. And yet, just weeks after it was published, my friend David Rolf, a Service Employees International Union organizer, roused fast-food workers to go on strike around the country for a $15 living wage. Nearly a year later, the city of Seattle passed a $15 minimum wage. And just 350 days after my article was published, Seattle Mayor Ed Murray signed that ordinance into law. How could this happen, you ask?
It happened because we reminded the masses that they are the source of growth and prosperity, not us rich guys. We reminded them that when workers have more money, businesses have more customers—and need more employees. We reminded them that if businesses paid workers a living wage rather than poverty wages, taxpayers wouldn’t have to make up the difference. And when we got done, 74 percent of likely Seattle voters in a recent poll agreed that a $15 minimum wage was a swell idea.
The standard response in the minimum-wage debate, made by Republicans and their business backers and plenty of Democrats as well, is that raising the minimum wage costs jobs. Businesses will have to lay off workers. This argument reflects the orthodox economics that most people had in college. If you took Econ 101, then you literally were taught that if wages go up, employment must go down. The law of supply and demand and all that. That’s why you’ve got John Boehner and other Republicans in Congress insisting that if you price employment higher, you get less of it. Really?
The thing about us businesspeople is that we love our customers rich and our employees poor.
Because here’s an odd thing. During the past three decades, compensation for CEOs grew 127 times faster than it did for workers. Since 1950, the CEO-to-worker pay ratio has increased 1,000 percent, and that is not a typo. CEOs used to earn 30 times the median wage; now they rake in 500 times. Yet no company I know of has eliminated its senior managers, or outsourced them to China or automated their jobs. Instead, we now have more CEOs and senior executives than ever before. So, too, for financial services workers and technology workers. These folks earn multiples of the median wage, yet we somehow have more and more of them.
The thing about us businesspeople is that we love our customers rich and our employees poor. So for as long as there has been capitalism, capitalists have said the same thing about any effort to raise wages. We’ve had 75 years of complaints from big business—when the minimum wage was instituted, when women had to be paid equitable amounts, when child labor laws were created. Every time the capitalists said exactly the same thing in the same way: We’re all going to go bankrupt. I’ll have to close. I’ll have to lay everyone off. It hasn’t happened. In fact, the data show that when workers are better treated, business gets better. The naysayers are just wrong.
Most of you probably think that the $15 minimum wage in Seattle is an insane departure from rational policy that puts our economy at great risk. But in Seattle, our current minimum wage of $9.32 is already nearly 30 percent higher than the federal minimum wage. And has it ruined our economy yet? Well, trickle-downers, look at the data here: The two cities in the nation with the highest rate of job growth by small businesses are San Francisco and Seattle. Guess which cities have the highest minimum wage? San Francisco and Seattle. The fastest-growing big city in America? Seattle. Fifteen dollars isn’t a risky untried policy for us. It’s doubling down on the strategy that’s already allowing our city to kick your city’s ass.
It makes perfect sense if you think about it: If a worker earns $7.25 an hour, which is now the national minimum wage, what proportion of that person’s income do you think ends up in the cash registers of local small businesses? Hardly any. That person is paying rent, ideally going out to get subsistence groceries at Safeway, and, if really lucky, has a bus pass. But she’s not going out to eat at restaurants. Not browsing for new clothes. Not buying flowers on Mother’s Day.
Is this issue more complicated than I’m making out? Of course. Are there many factors at play determining the dynamics of employment? Yup. But please, please stop insisting that if we pay low-wage workers more, unemployment will skyrocket and it will destroy the economy. It’s utter nonsense. The most insidious thing about trickle-down economics isn’t believing that if the rich get richer, it’s good for the economy. It’s believing that if the poor get richer, it’s bad for the economy.
I know that virtually all of you feel that compelling our businesses to pay workers more is somehow unfair, or is too much government interference. Most of you think that we should just let good examples like Costco or Gap lead the way. Or let the market set the price. But here’s the thing. When those who set bad examples, like the owners of Wal-Mart or McDonald’s, pay their workers close to the minimum wage, what they’re really saying is that they’d pay even less if it weren’t illegal. (Thankfully both companies have recently said they would not oppose a hike in the minimum wage.) In any large group, some people absolutely will not do the right thing. That’s why our economy can only be safe and effective if it is governed by the same kinds of rules as, say, the transportation system, with its speed limits and stop signs.
Wal-Mart is our nation’s largest employer with some 1.4 million employees in the United States and more than $25 billion in pre-tax profit. So why are Wal-Mart employees the largest group of Medicaid recipients in many states? Wal-Mart could, say, pay each of its 1 million lowest-paid workers an extra $10,000 per year, raise them all out of poverty and enable them to, of all things, afford to shop at Wal-Mart. Not only would this also save us all the expense of the food stamps, Medicaid and rent assistance that they currently require, but Wal-Mart would still earn more than $15 billion pre-tax per year. Wal-Mart won’t (and shouldn’t) volunteer to pay its workers more than their competitors. In order for us to have an economy that works for everyone, we should compel all retailers to pay living wages—not just ask politely.
We rich people have been falsely persuaded by our schooling and the affirmation of society, and have convinced ourselves, that we are the main job creators. It’s simply not true. There can never be enough super-rich Americans to power a great economy. I earn about 1,000 times the median American annually, but I don’t buy thousands of times more stuff. My family purchased three cars over the past few years, not 3,000. I buy a few pairs of pants and a few shirts a year, just like most American men. I bought two pairs of the fancy wool pants I am wearing as I write, what my partner Mike calls my “manager pants.” I guess I could have bought 1,000 pairs. But why would I? Instead, I sock my extra money away in savings, where it doesn’t do the country much good.
So forget all that rhetoric about how America is great because of people like you and me and Steve Jobs. You know the truth even if you won’t admit it: If any of us had been born in Somalia or the Congo, all we’d be is some guy standing barefoot next to a dirt road selling fruit. It’s not that Somalia and Congo don’t have good entrepreneurs. It’s just that the best ones are selling their wares off crates by the side of the road because that’s all their customers can afford.
So why not talk about a different kind of New Deal for the American people, one that could appeal to the right as well as left—to libertarians as well as liberals? First, I’d ask my Republican friends to get real about reducing the size of government. Yes, yes and yes, you guys are all correct: The federal government is too big in some ways. But no way can you cut government substantially, not the way things are now. Ronald Reagan and George W. Bush each had eight years to do it, and they failed miserably.
Republicans and Democrats in Congress can’t shrink government with wishful thinking. The only way to slash government for real is to go back to basic economic principles: You have to reduce the demand for government. If people are getting $15 an hour or more, they don’t need food stamps. They don’t need rent assistance. They don’t need you and me to pay for their medical care. If the consumer middle class is back, buying and shopping, then it stands to reason you won’t need as large a welfare state. And at the same time, revenues from payroll and sales taxes would rise, reducing the deficit.
This is, in other words, an economic approach that can unite left and right. Perhaps that’s one reason the right is beginning, inexorably, to wake up to this reality as well. Even Republicans as diverse as Mitt Romney and Rick Santorum recently came out in favor of raising the minimum wage, in defiance of the Republicans in Congress.
***
One thing we can agree on—I’m sure of this—is that the change isn’t going to start in Washington. Thinking is stale, arguments even more so. On both sides.
But the way I see it, that’s all right. Most major social movements have seen their earliest victories at the state and municipal levels. The fight over the eight-hour workday, which ended in Washington, D.C., in 1938, began in places like Illinois and Massachusetts in the late 1800s. The movement for social security began in California in the 1930s. Even the Affordable Health Care Act—Obamacare—would have been hard to imagine without Mitt Romney’s model in Massachusetts to lead the way.
Sadly, no Republicans and few Democrats get this. President Obama doesn’t seem to either, though his heart is in the right place. In his State of the Union speech this year, he mentioned the need for a higher minimum wage but failed to make the case that less inequality and a renewed middle class would promote faster economic growth. Instead, the arguments we hear from most Democrats are the same old social-justice claims. The only reason to help workers is because we feel sorry for them. These fairness arguments feed right into every stereotype of Obama and the Democrats as bleeding hearts. Republicans say growth. Democrats say fairness—and lose every time.
But just because the two parties in Washington haven’t figured it out yet doesn’t mean we rich folks can just keep going. The conversation is already changing, even if the billionaires aren’t onto it. I know what you think: You think that Occupy Wall Street and all the other capitalism-is-the-problem protesters disappeared without a trace. But that’s not true. Of course, it’s hard to get people to sleep in a park in the cause of social justice. But the protests we had in the wake of the 2008 financial crisis really did help to change the debate in this country from death panels and debt ceilings to inequality.
It’s just that so many of you plutocrats didn’t get the message.
Dear 1%ers, many of our fellow citizens are starting to believe that capitalism itself is the problem. I disagree, and I’m sure you do too. Capitalism, when well managed, is the greatest social technology ever invented to create prosperity in human societies. But capitalism left unchecked tends toward concentration and collapse. It can be managed either to benefit the few in the near term or the many in the long term. The work of democracies is to bend it to the latter. That is why investments in the middle class work. And tax breaks for rich people like us don’t. Balancing the power of workers and billionaires by raising the minimum wage isn’t bad for capitalism. It’s an indispensable tool smart capitalists use to make capitalism stable and sustainable. And no one has a bigger stake in that than zillionaires like us.
The oldest and most important conflict in human societies is the battle over the concentration of wealth and power. The folks like us at the top have always told those at the bottom that our respective positions are righteous and good for all. Historically, we called that divine right. Today we have trickle-down economics.
What nonsense this is. Am I really such a superior person? Do I belong at the center of the moral as well as economic universe? Do you?
My family, the Hanauers, started in Germany selling feathers and pillows. They got chased out of Germany by Hitler and ended up in Seattle owning another pillow company. Three generations later, I benefited from that. Then I got as lucky as a person could possibly get in the Internet age by having a buddy in Seattle named Bezos. I look at the average Joe on the street, and I say, “There but for the grace of Jeff go I.” Even the best of us, in the worst of circumstances, are barefoot, standing by a dirt road, selling fruit. We should never forget that, or forget that the United States of America and its middle class made us, rather than the other way around.
Or we could sit back, do nothing, enjoy our yachts. And wait for the pitchforks.
Nick Hanauer is a Seattle-based entrepreneur.
I think this article is amazing and 100% true. I always felt in my heart that comparison to our nation (and world) turning into a feudal society. Best example on a small scale of what is coming in our future on a larger scale is how Governor Christie and the NJ Republicans are protecting huge corporations (like Rockefeller Corp) who just vetoed the bill to raise taxes on the mega-rich while he passed a budget stiffing the working class pension payment (a pension system he has decided long ago to break and loot). He is an evil, gluttonous, hungry turd like Ubu Roi who only looks out for the inerests of the 1% mega rich. If we let them succeed at our expense our children will have no future. Where are our great labor leaders of today? The American workers rights movement is non-existent here:-( Hanauer is wrong in his statement about the poor revolutionaries in revolutionary France however. It was largely angry middle class youth who fought the revolution and 1848 as well. I think pitchforks are a good option;-) Too many Americans are numb and don't get angry about anything! We all need to get angry and have a nation wide strike like they do in European countries (In Italy all the trains and planes would have already been stopped and in France they would have already burned Paris to the ground!) -CVS-
Governor Christie is again desperately trying to divert attention from the fact that he broke the economy, broke his word and broke the law on the pension
Governor Christie is again desperately trying to divert attention from the fact that he broke the economy, broke his word and broke the law on the pension.
Chris Christie is a dishonest politician and a liar. He broke promises to the working class, he is drowning in scandals like the George Washington Bridge and Pulaski Skyway Scandals, and he has been accused by the mayor of Hoboken for mob-like arm twisting for Hurricane Sandy funding. Now he pushes pension reform, battles with protesters in wake of new NJ budget all the while protecting New Jersey's mega-wealthy and huge corporations
By Matt Arco/NJ Advance Media, for NJ.com
on July 02, 2014
TRENTON — In years past, Gov. Chris Christie would sign a state budget and then enjoy a victory lap around New Jersey touting it to friendly audiences.
Not so Tuesday.
The Republican governor kept to his script, pitching the new spending plan and defending his decision to drastically reduce a payment to the public worker pension system and veto Democratic bills to raise taxes on millionaires and businesses on TV and at a town hall.
But Christie was met with jeers throughout the day. Angry teachers booed at him at a swearing-in ceremony for Paterson’s new mayor, and waves of protesters were escorted out of a town hall in Caldwell for objecting to the state budget and other issues.
The combative governor didn’t hold back at the town hall, calling those objecting to him "professional protesters" backed by unions and poking fun at them for reading their statements from iPhones.
Gov Chris Christie spars with additional protesters at Caldwell town hall
Gov Chris Christie spars with more protesters at Caldwell town hall that are angered by the governors line item veto tuition aid grants for undocumented students. (Video by William Perlman/The Star-Ledger)
In the midst of the tough day, Christie issued a warning to public employees who are in court over his decision to cut pension payments after signing a law in his first term promising increased contributions: Next up is a hard look at your health benefits.
"Let’s talk about some things that are unsustainable going forward," said Christie during a town hall at the Caldwell Community Center.
"Here’s one thing that Barack Obama and I agree on. (The president) looks at the New Jersey public health care plan for public workers and says it’s a ‘Cadillac plan,’" noting that under the Affordable Care Act, New Jersey would be fined if it didn’t make changes to public workers’ health care plans.
Saying New Jersey could "drive into bankruptcy," Christie said he would spend the summer pitching a yet-to-be-revealed plan to curtail public worker benefits. Unions vowed to continue their fight, saying Christie created his own budget mess by mismanaging the state economy and making bad revenue projections.
"Governor Christie is again desperately trying to divert attention from the fact that he broke the economy, broke his word and broke the law on the pension," said Hetty Rosenstein, New Jersey director of the Communications Workers of America."
At the town hall, Christie sparred with protesters, many of whom were ejected from the hall. Some were angered over his line item veto of tuition aid grants for undocumented students attending state schools.
"The governor is pandering to a presidential primary (audience) instead of the voters of New Jersey," said Giancarlo Tello, a youth program organizer for New Jersey Working Families Alliance, a left-leaning coalition of labor and community organizations. "Full equality means full equality."
Christie took aim at the protesters.
"After being governor for five years, having them yell and scream at me doesn’t bother me one damn bit," he said.
Later, after another group was led out, he said: "This is an example of why the education system in New Jersey is pretty good because he could actually read that whole thing."
Christie chided another town hall attendee, Donna Jackson, who was escorted out after she began shouting at the governor about the state’s education system in Newark. He told Jackson, president and founder of United Parent Network, not to make "a spectacle."
Hours earlier, Christie was booed by Paterson teachers as he swore in the city’s new mayor.
About five dozen public school teachers wearing bright red T-shirts gathered along a metal partition a few hundred feet from the stage where Christie swore in Mayor Jose "Joey" Torres. They jeered every time the governor’s name was mentioned.
"Christie’s gotta go!" they chanted. "Christie’s gotta go!"
The boos continued as the governor stepped to the podium to deliver the oath of office to Torres, a Democrat who won a third term despite not having the support of local party officials. Christie quickly said he wouldn’t be giving a speech.
"Liar!" the teachers yelled as he left the stage.
The state took over the Paterson school district in 1991. The protesting teachers said they have been working without a contract for four years and a the new contract their union is negotiating with Christie’s administration is unfair, leaving many without a raise for another three years. "We’re not being treated as professionals," said Ryan Cohen, a social studies teacher in the district. "And that’s the state of education in New Jersey."
Star-Ledger staff writer Brent Johnson contributed to this report.
Chris Christie is a dishonest politician and a liar. He broke promises to the working class, he is drowning in scandals like the George Washington Bridge and Pulaski Skyway Scandals, and he has been accused by the mayor of Hoboken for mob-like arm twisting for Hurricane Sandy funding. Now he pushes pension reform, battles with protesters in wake of new NJ budget all the while protecting New Jersey's mega-wealthy and huge corporations
By Matt Arco/NJ Advance Media, for NJ.com
on July 02, 2014
TRENTON — In years past, Gov. Chris Christie would sign a state budget and then enjoy a victory lap around New Jersey touting it to friendly audiences.
Not so Tuesday.
The Republican governor kept to his script, pitching the new spending plan and defending his decision to drastically reduce a payment to the public worker pension system and veto Democratic bills to raise taxes on millionaires and businesses on TV and at a town hall.
But Christie was met with jeers throughout the day. Angry teachers booed at him at a swearing-in ceremony for Paterson’s new mayor, and waves of protesters were escorted out of a town hall in Caldwell for objecting to the state budget and other issues.
The combative governor didn’t hold back at the town hall, calling those objecting to him "professional protesters" backed by unions and poking fun at them for reading their statements from iPhones.
Gov Chris Christie spars with additional protesters at Caldwell town hall
Gov Chris Christie spars with more protesters at Caldwell town hall that are angered by the governors line item veto tuition aid grants for undocumented students. (Video by William Perlman/The Star-Ledger)
In the midst of the tough day, Christie issued a warning to public employees who are in court over his decision to cut pension payments after signing a law in his first term promising increased contributions: Next up is a hard look at your health benefits.
"Let’s talk about some things that are unsustainable going forward," said Christie during a town hall at the Caldwell Community Center.
"Here’s one thing that Barack Obama and I agree on. (The president) looks at the New Jersey public health care plan for public workers and says it’s a ‘Cadillac plan,’" noting that under the Affordable Care Act, New Jersey would be fined if it didn’t make changes to public workers’ health care plans.
Saying New Jersey could "drive into bankruptcy," Christie said he would spend the summer pitching a yet-to-be-revealed plan to curtail public worker benefits. Unions vowed to continue their fight, saying Christie created his own budget mess by mismanaging the state economy and making bad revenue projections.
"Governor Christie is again desperately trying to divert attention from the fact that he broke the economy, broke his word and broke the law on the pension," said Hetty Rosenstein, New Jersey director of the Communications Workers of America."
At the town hall, Christie sparred with protesters, many of whom were ejected from the hall. Some were angered over his line item veto of tuition aid grants for undocumented students attending state schools.
"The governor is pandering to a presidential primary (audience) instead of the voters of New Jersey," said Giancarlo Tello, a youth program organizer for New Jersey Working Families Alliance, a left-leaning coalition of labor and community organizations. "Full equality means full equality."
Christie took aim at the protesters.
"After being governor for five years, having them yell and scream at me doesn’t bother me one damn bit," he said.
Later, after another group was led out, he said: "This is an example of why the education system in New Jersey is pretty good because he could actually read that whole thing."
Christie chided another town hall attendee, Donna Jackson, who was escorted out after she began shouting at the governor about the state’s education system in Newark. He told Jackson, president and founder of United Parent Network, not to make "a spectacle."
Hours earlier, Christie was booed by Paterson teachers as he swore in the city’s new mayor.
About five dozen public school teachers wearing bright red T-shirts gathered along a metal partition a few hundred feet from the stage where Christie swore in Mayor Jose "Joey" Torres. They jeered every time the governor’s name was mentioned.
"Christie’s gotta go!" they chanted. "Christie’s gotta go!"
The boos continued as the governor stepped to the podium to deliver the oath of office to Torres, a Democrat who won a third term despite not having the support of local party officials. Christie quickly said he wouldn’t be giving a speech.
"Liar!" the teachers yelled as he left the stage.
The state took over the Paterson school district in 1991. The protesting teachers said they have been working without a contract for four years and a the new contract their union is negotiating with Christie’s administration is unfair, leaving many without a raise for another three years. "We’re not being treated as professionals," said Ryan Cohen, a social studies teacher in the district. "And that’s the state of education in New Jersey."
Star-Ledger staff writer Brent Johnson contributed to this report.
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