Powerful 6.8 Earthquake Strikes in Area of Fukushima, Japan, but No Tsunami
POSTED 1:01 PM, JULY 11, 2014, BY CNN WIRE, UPDATED AT 03:51PM, JULY 11, 2014
(Credit: USGS)
A powerful earthquake struck early Saturday off the coast of northern Japan — rattling nerves in a region rocked three years ago by a deadly tremor, tsunami and nuclear crisis, though thankfully the latest episode didn’t nearly measure up.
The Japan Meteorological Agency at one point issued a tsunami warning, which it later amended to tsunami advisories for coastal regions in Iwate, Miyagi and Fukushima prefectures. The latter is the site of the Fukushima Daiichi nuclear power facility that was the center of a weeks-long radioactive crisis.
But a large tsunami never materialized.
At 6:15 a.m. Saturday (5:15 p.m. ET Friday), the same agency noted that all tsunami advisories had been canceled.
Whereas before the JMA urged everyone to “get out of the water and leave the coast immediately,” that last update was less alarming. “Pay attention when fishing, swimming or engaging in other activities,” the agency noted, “as there may still be slight sea-level changes for the time being.”
The Japan Meteorological Agency characterized the quake as a 6.8-magnitude. Yet the U.S. Geological Survey had it a little weaker, downgrading its earlier estimate in calling it a 6.5-magnitude tremor.
According to the USGS, the quake was centered off Honshu island some 129 kilometers (79 miles) east-southeast of Namie and 284 kilometers east-northeast of Tokyo. It was 11 kilometers, or 7 miles, deep.
There were no immediate reports of damage.
Any sizable tremor in or near Japan — and any tsunami warning — inevitably raises dark memories dating to March 11, 2011, when a 9.0-magnitude struck 231 miles northeast of Tokyo.
That quake, the fourth largest on record since 1900 and the largest ever to hit Japan, produced a tsunami with 30-foot waves
When all was over, the combination of the quake and, especially, the tsunami left some 16,000 people dead.
The event also set off a prolonged crisis at the Fukushima Daiichi nuclear power plant in the northern part of Honshu, including the spread of some radioactive material and very real fears of an even worse calamity as authorities tried to bring the dangerous situation under control.
A repeat of that situation seemed unlikely after the early Saturday earthquake.
A spokesperson for TEPCO, the utility company that controls the Fukushima Daiichi facility, told CNN there were no disruptions to operations at the plant and that everything was operating normally.
Steve Orr, Staff writer4:47 p.m. EDT July 11, 2014
The owner of the Ginna nuclear power plant, hoping to stave off closure of the facility, has asked New York regulators to help secure a deal with RG&E to sustain Ginna's operations.
Exelon Corp., which owns the Wayne County nuclear plant, wants Rochester Gas and Electric Corp. to sign a contract promising payments keep the plant running. Chicago-based Exelon filed a petition Friday asking the state Public Service Commission to enter into a multiyear contract by the end of 2014.
The contract would be based on the conclusion that Ginna, which provides a good part of all the electricity used by RG&E's customers, must continue to operate to ensure the continued reliability of that service.
With no contract, Exelon said in its petition that it likely would close the 44-year-old Ginna, one the oldest commercial nuclear plants in the country. Located on the Lake Ontario shoreline, it can generate 577 megawatts of electricity, or enough to satisfy the needs of about 400,000 residential customers.
"It is no secret that our plant, like others in the region, faces financial challenges. But this filing is actually good news for the hundreds of hardworking men and women that work at the plant and for the community that we serve because it is an encouraging step toward continuing to operate the plant for the foreseeable future," Joe Pacher, Ginna site vice president, said in a statement released Friday.
About 700 people work at the plant, which is by far the largest property taxpayer in the town of Ontario and likely is the largest in Wayne County.
In statements issued Friday afternoon, RG&E and Exelon both pledged to work with the PSC on the proceeding. Exelon will continue to operate the plant while the process unfolds, spokeswoman Maria Hudson said.
RG&E built the plant in the late 1960s and named it for a former chairman, Robert E. Ginna. As part of a move to deregulate energy markets, the PSC ordered utilities to sell off their power generation, and in 2004 RG&E sold Ginna to Constellation Energy for $423 million. Constellation now is part of Exelon.
Under terms of the Ginna sale, RG&E was given the right to buy up to 90 percent of the electricity generated at Ginna at fixed prices, an arrangement cast at the time as a good deal for both parties. That 10-year arrangement expired June 30.
Exelon, the nation's largest nuclear-plant operator, has talked openly about the possibility that it might close some of its facilities because they're not economically viable.
In the petition filed Friday, the company said that as the expiration of the long-term arrangement with RG&E loomed, it examined Ginna's finances and concluded it was likely to lose money and was a candidate for closure.
But Exelon then asked for a study to determine what effect Ginna's closure would have on the reliability of electric service in RG&E's service territory. According to the petition, that study, finished in May, concluded that Ginna remained essential.
So Exelon now has invoked a regulatory procedure under which, if the PSC issued the requested order, RG&E would pay a fixed amount of money each year to keep Ginna in operation. The amount, the number of years and other terms remain to be negotiated after the commission acts, if it does.
A similar "reliability support services agreement" exists between the owners of a coal-fired power plant in Tompkins County and New York State Electric and Gas Corp., RG&E's sister company.
That deal drew criticism from environmentalists because NYSEG was paying to prop up a polluting coal plant. It remains to be seen whether an RG&E-Exelon deal with provoke similar criticism from opponents of nuclear power, some of whom have stated publicly they hope financial pressure would lead to the shuttering of Ginna and other plants.
In either a truly embarrassing attempt at humor or yet another display of the inner workings of his profoundly imbalanced and unpleasant mind, radio star and conspiracy theory enthusiast Alex Jones announced on Thursday that comedienne Joan Rivers was right to call President Obama the first gay president, because first lady Michelle Obama is a “tranny.”
“Well, Joan Rivers talked about it the other day, and now it’s an international news story,” Jones said on-air. “The question is, ‘Who is Michelle Obama? Is she really a woman? Is she a man?’”
Jones went on to say he was “not drawing any conclusions” but that “it’s fair to question anything and everything this administration says” because no other administration in American history has “been caught with such a perfect record of everything they say and do being a lie or a fraud.”
Because the Obama administration is so dishonest, Jones concluded — what with its refusal to acknowledge chem trails, and how 9/11 was an inside job, and FEMA concentration camps, and Agenda 21, and the lizard-men who are secretly trying to harvest our precious bodily fluids — it is entirely understandable that “the public doesn’t believe anything they’re saying.”
“[E]specially,” Jones added, “when every time I look at ‘Michelle’ or ‘Michael’ Obama — the first lady, or first tranny — something doesn’t look right.”
Jones added that Michelle Obama “doesn’t look like any black woman I’ve ever known” and criticized her for having “shoulders that are wider than a man’s, which physiologically doesn’t happen.”
“You can put three heads on a man’s shoulders, and two heads on a woman’s shoulders,” Dr. Jones noted. “That’s a known anatomy.”
Jones did not blame Obama herself for her wide shoulders, however, arguing instead that it was a result of a chemically induced mutation. “For me,” Jones said, “this really isn’t just a laughing matter. It’s not just the sexuality, but the very genetics of the human species across the board is being manipulated.”
Jones then began to talk about the “small percentage … of men who identify as females and females who identify as males,” saying that he does not “judge that” but is “just sick of the societal obsession with it.” He described the obsession as an example of “the force-feeding of all of this culturally, to reduce population and break up the family.”
If you follow this link to the Raw Story, you can watch video of Jones’ sermon on Michelle Obama’s sexuality. Alternatively, you could watch these two fantastic videos of Alex Jones being a totally ridiculous clown of a human being that no one should listen to except for laughs. Your call.
A poll conducted by the Wall Street Journal, NBC News, and Annenberg finally gave a numerical answer to a question we at Mediaite often ask ourselves: Out of all political figures that should pipe down just a bit, which one should do it immediately?
Answer: Sarah Palin. Overwhelmingly Sarah Palin, says America.
52% of surveyed American adults want Sarah Palin to “be quiet,” according to the poll taken between June 30 and July 7 — immediately before she published a Breitbart column demanding Obama be impeached. Notably, four out of every ten Republicans surveyed said that Palin should quiet down. (Two-thirds of Democrats and a “majority” of independents agreed with that sentiment.)
45% of respondents added that they wanted Jesse Jackson to be quiet, too; followed by Dick Cheney (42%), Newt Gingrich (39%), Al Gore (37%), and Bill Clinton (31%).
Only 12% surveyed said that the politicians should keep talking.
I'm writing you in the hope that you will reconsider meeting with Nicole Hockley, a mother whose bright-eyed, beautiful son Dylan was one of the 20 first-graders systematically shot to death at Sandy Hook Elementary School.
Since the middle of May, Nicole and several of the other Sandy Hook family members have called your office multiple times a week requesting a meeting to discuss an important piece of legislation -- legislation that if passed, could prevent a similar tragedy or lessen the loss of life. You ignored them at every turn. Last week, they waited outside your office holding a petition with enough signatures to fill MetLife Stadium, and you walked past them and vetoed the bill anyway. Governor, you have to make this right. These families have endured the most horrific kind of loss. They deserve better from our leaders. And I believe, perhaps naively, given your purported values, beliefs, influences that deep down inside, you're not this guy.
Your springs are spent coaching little league. Mine too. Your summers are spent passionately (and often frustratingly) rooting for the New York Mets. Mine too. And like me, you came of age to the songs of New Jersey's Poet Laureate/Boss -- one, Bruce Frederick Joseph Springsteen. You're not the guy that shuns the Sandy Hook families. If you are, you have bigger problems than a Fort Lee traffic jam.
As someone who has had the honor and privilege of meeting with Nicole Hockley, I can attest Nicole's courage will move you. If you cry during her story (and cry you will), she'll apologize for bringing you to tears. You will learn that before her son's life was so violently taken, Dylan was autistic. Whenever Dylan became excited he would flap his arms. When his mother asked him why he liked to flap his arms he would say, "Because I am a beautiful butterfly." Nicole draws inspiration on the image of her son flapping his wings -- the idea that the flutter of a butterfly can spark the winds of change. And that's exactly why she's trying to meet with you -- so no other parent will experience such grief. It's a pretty noble pursuit, whether or not you agree with her politically.
The parents behind Sandy Hook Promise are far from anti-gun. This isn't a radical fringe organization. It's a group of regular moms and dads from Connecticut. Much of what they advocate for, like background checks, are policies endorsed by 90 percent of Americans. These families have learned that in a mass shooting, the more bullets a magazine or clip can hold, the greater chance of mortality -- evidence you dismissed last week as "trivial." Perhaps you didn't realize, if the gunman at Sandy Hook were forced to reload more often, a greater number of 6-year-olds would now be 8-year-olds -- which is why this bill is extremely significant, and why your dismissive veto felt like a slap in the face to the memory of their dead children.
Your fallback excuse has been that you met with some family members more than a year ago. But that was before this legislation, and back then, you pledged your support to the families and alluded that you would be the kind of politician who would rise above party politics. You've been silent since.
This week you said you didn't want to meet the families because it would be "hypocritical," because you had already decided to veto the legislation. With all due respect, I don't think you're afraid to appear hypocritical. All politicians, Democrat or Republican, appear hypocritical at one point in their careers. It's practically part of the job description, right under "must be comfortable to shake hands" and "willing to kiss babies."
I do believe you're afraid of hearing Nicole's story. Because in hearing that story, Nicole is going to boldly ask you to imagine that it was your child that was gunned down. And like most of us, I think you are afraid to imagine what happened to Nicole's son, God forbid, happening to one of your four lovely children or a member of the little league team you coach. I don't blame you. I have young kids, I coach little league, and the thought of Newtown scares the hell out of me too. I get it. It's easier just to turn away and decline the meeting.
While most politicians are masters at feigning empathy for political gain, I sense you have the ability to feel real empathy. This seemed evident in the aftermath of Hurricane Sandy. Maybe I was swept up in the moment, but I kind of thought all the heart and soul you experienced at countless Springsteen concerts finally rubbed off on you.
Bruce is my hero too -- not just because of the joy his music brings -- but because of where he's chosen to point his songwriting pen. Springsteen met with Vietnam veterans left behind in a country they so valiantly defended, and he reminded us we were all "Born in the USA." When gay men were stigmatized by the burgeoning AIDS epidemic, Springsteen took us to the "Streets of Philadelphia." After 9/11 left us heartbroken, "The Rising" lifted us. And perhaps most relevant to this argument, after 23-year-old Amadou Diallo was shot at 41 times by NYPD plainclothes officers, he gave us "American Skin," a haunting, cautionary tale about the rules of the street from a mother's point of view. When Springsteen debuted the song, shortly before performing at Madison Square Garden, members of the NYPD called him a "dirtbag" and threatened to boycott working his MSG stand. Springsteen performed the song anyway. He could have shied away from the controversy and played one of hundreds of other songs in his canon.
It's that kind of courage, compassion and leadership that Americans are asking you to find within yourself. The Boss' music measures the distance between the American dream and American reality. When we go to his shows, we measure the distance between who we are and who we'd like to be. The mark on you at this moment is you're a guy who puts himself before his people. Take a page from Springsteen. Is this who you want to be?
When you were justifying the decision to keep 15 bullets in a clip instead of 10, you inadvertently said something pretty profound: "If you take the logical conclusion of [the families'] argument, you go to zero, because every life is valuable." Exactly.Every life is valuable. So here's the website to Sandy Hook Promise. Invite these parents back. You'll be a better man for it, and maybe a better leader too.
"Missouri Lawmaker Introduces Bill To Halt All EPA Regulations"
Share on ema
CREDIT: AP PHOTO/REED HOFFMANN
For one Missouri lawmaker, fighting individual Environmental Protection Agency regulations — like the recent rule on carbon emissions from power plants — isn’t enough.
Rep. Sam Graves (R-MO) introduced a bill on Wednesday that would halt all EPA rules that are currently in the works and prompt a review of all previous EPA regulations. H.R. 5034, titled the Stop the EPA Act, would also require Congress to approve all previous and new regulations that cost $50 million or more. Under the bill, any that aren’t approved by Congress won’t become law.
“My legislation will give the American people a voice in the regulator’s room when the President and the EPA try and go around Congress,” Graves said in a statement. “EPA aggression has reached an all-time high, and now it must be stopped.”
Graves’ legislation was prompted by the EPA’s “Waters of the United States” proposal, which aims to clarify what streams and rivers are under the jurisdiction of the federal government, under the Clean Water Act. It’s also aimed at the EPA’s new rule on carbon emissions from power plants, a proposal that multiple other lawmakers have attempted to undermine or overturn in recent months. House Republicans introduced an EPA funding bill this week that would block the agency’s new power plant rule, and nine states have signed on to coal company Murray Energy’s lawsuit against the agency, claiming that the new rule constitutes EPA overreach.
The EPA has long been the target of attacks from industry and lawmakers, however.
Take asbestos. On Thursday morning, the House side of the U.S. Capitol was shut down due to a possible spill of asbestos that occurred while workers were cleaning out the hazardous material from the building.
Something fell during “asbestos abatement work” at the Capitol overnight, prompting the closure of the House side of the building. Hazardous material response teams and Environmental Protection Agency investigators are conducting testing at the scene to determine whether or not the material that fell exposed the area to asbestos.
Breathing in asbestos fibers, which can be found in old insulation, flooring, roofing, paint, and fabrics, can cause lung disease and lung cancer. The EPA has taken multiple regulatory actions against asbestos use over the last few decades, including banning it from pipe insulation and sprays. The agency banned most products containing asbestos in 1989, but two years later, that rule was overturned after outcry and a lawsuit from the asbestos industry and product manufacturers, who said the ban would cause “death by regulation” to the asbestos industry. That’s the same claim coal companies and lawmakers from coal-producing states are making about the EPA’s new power plant rule: that the EPA is waging a War on Coal, and that its regulations will hasten the demise of the coal industry.
“The Obama EPA has waged an all-out War on Coal, promulgating a series of rules and regulations seeking to eliminate the United States coal industry, and the very good jobs, and low cost electricity, which it provides,” Murray Energy said in a release after filing its lawsuit against the EPA. “Indeed, the lives and livelihoods of entire families in many regions of America are being destroyed.”
Though not as immediately hazardous as asbestos, coal, too, poses a danger both to the miners are at risk of black lung disease and to the Americans whose risk of respiratory illnesses and a range of other health effects goes up as exposure to pollution increases.
WASHINGTON — The bipartisan leadership of the Senate Finance Committee neared agreement Thursday on legislation to keep the federal highway trust fund from going broke next month, setting up a clash with the House just weeks before the deadline.
The deal between Senators Ron Wyden of Oregon, the chairman, and Orrin G. Hatch of Utah, the ranking Republican, will be formally drafted on Thursday, just hours after the House Ways and Means Committee marks up its competing version.
It relies on many of the same elements of the Ways and Means Committee proposal: prolonging customs fees on importers that would otherwise expire, taking money from a separate trust fund for fixing underground storage tanks and changing rules on private pension contributions.
But the Senate proposal adds many smaller provisions that House Republicans have rejected, like extending penalties on tax preparers who do not comply with stringent reporting rules for the child tax credit.
Mr. Wyden, the new Finance Committee chairman, trimmed back the changes to private pension law that the House is considering, reaping less money for the federal government so that he can use that money for other legislation. That decision has become the crux of the dispute with House Republicans, since it forced Mr. Wyden to find money through other revenue-raising measures that House leaders have rejected.
The differences, subtle as they are, raise the possibility of a clash between the House and Senate versions just weeks before an Aug. 1 deadline, when the federal government is set to cut its highway and infrastructure spending by 28 percent.
Representative Dave Camp of Michigan, chairman of the Ways and Means Committee, is betting that with the deadline looming, the Senate majority leader, Harry Reid of Nevada, will put Mr. Camp’s version of the bill to a vote in the Senate and disregard Mr. Wyden’s wishes.
But both bills have strong opposition. They finance the trust fund for only a few months, when lawmakers in both parties had hoped for a multiyear deal. Senator Bob Corker, Republican of Tennessee, called the bills an “embarrassment” and the product of “cowardice.”
“Republicans criticized heavily the health care bill that the president put forth because he had six years’ worth of cost and 10 years’ worth of revenues,” Mr. Corker said. “What the highway bills that I’ve seen coming out of both bodies do so far is they spend it over six months, not six years, pay for it over 10. It’s absolute generational theft.”
Heritage Action, a political arm of the conservative Heritage Foundation, called the House bill a “spend now, pay later bailout.”
How would you react if one of your neighbors announced that while he obviously benefits from having clean water, highways, Medicare, police protection, parks, schools, and other public services, he was no longer going to pay his part of the taxes that make them available?
And what if this neighbor also said he was renouncing his American citizenship to become a citizen of Switzerland, because he could pay less taxes there? Not that he was actually moving to that cold country, mind you — no, no, he’d still be living right here in the good ol’ USA, still benefitting from all those public services that taxpayers like you and I provide.
Surely, you think, this has to be a joke. A person can’t really do this, can they? No, of course a “real” person could not get away with this You see, corporations are funny creatures. For example, they don’t want to pay their share of America’s tax bill, but then they’re first in line demanding subsidies, grants and other special handouts from America’s government to pad their financial bottom line.
That’s hilarious hypocrisy — but it’s no laughing matter, since it means you and I have to pay more to cover their tax avoidance, while also seeing our public money siphoned out of the programs that we need into the pockets of corporate elites, who most often use the funds against the public interest.
Corporate tax dodging has become both rampant and ridiculous. Take an increasingly popular scam called “inversion,” which is nothing but a perversion of tax law, business ethics and common decency. It works like this: By merging with a corporation based in a country with lax tax laws, a U.S. corporation can reincorporate as a citizen of that country and shift its tax obligations there, even though all or most of its profits are made from sales in the U.S-of-A.
For example, Gregory Wasson of Long Grove, Illinois, announced that he has plans for all of the above. Gregory isn’t my neighbor, but he sounds like a “real” person. So how is he getting away with this scam, you ask? While Greg is not personally my neighbor, or yours, the corporation he heads might be. Wasson is CEO of America’s largest drugstore chain, Walgreens Corporation, the sprawling, $72-billion-a-year behemoth that is in all 50 states and has stores in thousands of neighborhoods all across the country.
But Greg no longer wants Walgreens to be American, so he is presently trying to use this tax-shifting film-flam by merging with a Swiss-based chain. Rather than paying the roughly $800 million a year tax tab it owes to our nation, Walgreens would pay maybe $600 million to Switzerland.
Of course, the stores will not move to Switzerland. Wasson fully intends to keep extracting profits from our neighborhoods and for Walgreens to keep benefiting from all the public services that America provides, from police to infrastructure. Through inversion — a reversal of the natural order — the giant corporation would continue to enjoy enormous profits and benefits it gets from the United States, but pay Swiss taxes. So you and I are left picking up Walgreens’ tab, and the Swiss gain 600 million in tax dollars for services and infrastructure they did not provide — unless you count being a tax shelter as service and infrastructure.
Walgreens’ crass tax ploy would also give it a competitive advantage over other American drug stores that aren’t so greedy as to abandon America and, as Sen. Dick Durbin put it, “move their headquarters for a tax break.”
Oh, one more thing: About a fourth of Walgreens’ annual income is derived from — guess who? — our U.S. government. Yes, our very government that the people of Wasson & Co. say they no longer want to help support. The unpatriotic drugstore ingrate drew nearly $17 billion last year from Medicare and Medicaid payments provided by Uncle Sam.
If Walgreens doesn’t want to support public programs like these, the programs should not be supporting Walgreens.
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 sharedabout 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.
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.” Forbeslabeled 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 Art of the Fat Cat A century and a half of soaking the rich—with ink. By MATT WUERKER
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.
