Tag Archives: economy

Uber’s CEO would like you to re-download the company’s app, please.

On Sunday, Steyer joined protesters at the San Francisco airport. Now, he’s saying Trump’s election has convinced him to broaden his focus from the environment to other issues.

Trump threatens “everything we care about: our climate, our economy, our fundamental rights and freedoms, and our republic itself,” Steyer said in a statement. “Trump’s racism, his crass attempts to personally profit from the presidency, and his unquenchable thirst for power have sparked a vital American resistance movement.”

In a video posted Tuesday, Steyer said, “I promise to do everything in my power to stand up to Trump.” When you’ve got a billion dollars to play with, that kind of promise means something.

Making good on the commitment might include a run for office — rumor has it that Steyer may try for the governor’s seat when California’s Jerry Brown steps down in two years.

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Uber’s CEO would like you to re-download the company’s app, please.

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This Insider Trading Case Raises Troubling Questions About Trump’s Commerce Secretary Nominee

Mother Jones

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Wilbur Ross, Donald Trump’s pick for commerce secretary, is a legendary corporate raider who made billions of dollars buying failing companies and flipping them for a profit. But as he built his $2.5 billion fortune, Ross and his private equity firm, WL Ross & Co., have faced several lawsuits and regulatory actions accusing them of financial misconduct, including breach of fiduciary duty and fraud. His controversial business record received some scrutiny during his confirmation process. But one recent lawsuit involving Ross has garnered little attention. And it raises serious ethical questions about the business dealings of the billionaire who, if confirmed by the Senate, will be in charge of promoting job creation and economic growth.

The case, filed in a Florida federal court, involved a publicly traded mortgage company called Ocwen Financial. Ross served as a board member for the firm. In 2013 and 2014, state and federal regulators targeted the company over allegations that it engaged in a variety of improper practices. Ocwen’s stock plummeted, and shareholders suffered major losses. Its stock peaked in 2013 at about $56 per share, and the company is currently trading at about $5. But Ross managed to avoid millions in losses by off-loading his holdings in the company in two curiously timed trades that came shortly before damaging news was revealed that sent Ocwen shares into a tailspin. In the suit, shareholders accused Ross and other company directors of using inside information to enrich themselves and of leaving “ethics, integrity, and fair dealing by the wayside in their quest for ever higher revenues and thus, higher compensation and ever more lucrative incentives for themselves.”

The White House press office and Invesco (which is a corporate parent of WL Ross) did not respond to multiple requests for comment. Ocwen spokesman John Lovallo declined to respond to questions from Mother Jones, but he provided a statement about the company’s corporate governance practices. “Today, the composition, structure, experience and diversity of Ocwen’s Board, which consists of eight members, seven of whom are independent directors, is as strong as any comparable financial services company,” Lovallo wrote. “Ocwen is recognized as the industry leader in responsible home retention through foreclosure prevention.”

Ross’ ties to Ocwen date back to October 2012, when the Atlanta-based company announced plans to acquire mortgage-servicing firm Homeward Residential Holdings from WL Ross & Co. for $766 million in cash and preferred stock. Six months later, Ross joined Ocwen’s board.

The Homeward deal came during an Ocwen buying spree, as the company rapidly scooped up the mortgage-servicing units of big banks and other financial firms following the housing crisis. (Mortgage services are not lenders, but they collect loan payments and initiate foreclosure proceedings if homeowners default.) Ocwen’s business practices—including allegations that it had prematurely foreclosed on homeowners and mishandled loan modifications—placed the company on the radar of regulators, including the New York Department of Financial Services (NYDFS). The agency held up the Homeward sale until December 2012, when Ocwen agreed to two years of independent monitoring to ensure that “reforms are implemented and homeowners have a real chance to avoid foreclosure,” according to the agency’s head, Benjamin Lawsky.

In their lawsuit—a consolidated version of several previously initiated lawsuits was filed in federal court in March 2016—the Ocwen shareholders presented a timeline that they claimed supported their allegations. Through the sale of Homeward, Ross and his firm had received $162 million in Ocwen shares. In September 2013, Ross, on behalf of his private equity firm, sold more than 3.1 million Ocwen shares, at $50.19 a share, netting almost $158 million. Three months later, in December, the Consumer Financial Protection Bureau announced that Ocwen had agreed to pay $2.1 billion to settle charges of mortgage-servicing misconduct dating back to 2009, including hitting homeowners with unauthorized fees and deceiving consumers about foreclosure alternatives and loan modifications. As part of the settlement, Ocwen did not admit to or deny the CFPB’s allegations. Soon afterward, Ocwen’s stock had dropped to $44.14 per share, and it continued its downward slide from there.

The following year, WL Ross sold another large block of Ocwen stock. Once again, the sale came shortly before negative news was announced that sharply affected Ocwen’s stock. On July 14, 2014, WL Ross sold nearly 2 million Ocwen shares back to the company at about $37 a share, netting $72.1 million. On July 31, the company reported poor quarterly returns and within days its shares fell in value by more than 20 percent. Ocwen blamed its subpar earnings on the rising costs of complying with NYDFS’ required monitoring. On August 4, the NYDFS announced it was probing Ocwen for requiring homeowners to pay for “forced-placed insurance”—insurance that is taken out by the lender. By the end of December, Ocwen stock had sunk to about $15 per share. Due to the timing of his trade, Ross and his company avoided $18 million in losses. (The NYDFS investigation led to a broader December 2014 settlement, in which Ocwen agreed to pay a $150 million fine.)

Other Ocwen shareholders were not as lucky as Ross and his firm. Three Ocwen shareholders subsequently filed lawsuits against Ross and other company directors. The subsequently consolidated lawsuit alleged that Ross and two other members of the board of directors ignored “systemic and ongoing” wrongdoing by Ocwen. It claimed that the misconduct had ultimately cost the company more than $2 billion, and that Ross and his co-defendants “sold their personal holdings of Ocwen stock…while having knowledge of material, adverse inside information, in violation of state and federal law and in breach of their fiduciary duties to the Company.” And the suit charged that Ross, his firm, and its related funds “profited handsomely at the Company’s expense and thereby unjustly enriched themselves.” Ross, the suit maintained, was in a particular position to know about Ocwen’s mounting regulatory issues because he was not just a company director but a member of the board’s compliance committee.

Ross and fellow members of this committee had “total access to all documents and information bearing upon the Company’s operations,” the complaint alleged. And they were “personally aware or should have been aware that the Company was not in compliance with legal and regulatory requirements, including…applicable state and federal consumer protection laws and regulations and the multiple agreements and consent decrees made with Ocwen’s regulators, which were regularly breached by the company.”

Despite their knowledge of the company’s financial condition, mortgage-servicing misconduct, and ongoing regulatory actions, Ross and other company directors signed their names to a Securities and Exchange Commission filing in March 2014 affirming that Ocwen was successfully managing its regulatory obligations and reiterating the company’s “previously-announced financial results and financial positions,” according to the complaint.

Ocwen settled the suit in December on behalf of Ross and the other directors, agreeing to pay up to $2.2 million in attorney’s fees and other expenses and to institute a range of corporate governance reforms. As part of the settlement, Ross and the other defendants did not deny or acknowledge wrongdoing.

Lawrence Harris, one of the Securities and Exchange Commission’s chief economists during the George W. Bush administration and now a finance professor at the University of Southern California’s Marshall business school, said that because the Ocwen case was settled instead of going to trial, it is unclear what Ross knew at the time that he made his trades. “When confronted with the fortuitous timing of his sale, careful observers will certainly ask themselves whether Ross had knowledge as to what was going to happen,” Harris says. “If his knowledge was obtained through his insight, then he’s simply a disciplined investor. But if his knowledge was obtained through his position as director of the firm, of course there would be substantial concerns of the ethics of his subsequent sale.”

Harris says Ross’ combined history leaves lingering questions.

“If you had two otherwise identical candidates for commerce secretary, one has this record, the other one doesn’t, there’s no question that you would prefer the candidate who doesn’t have the record,” he says. “At some point you have to ask yourself, if you have a candidate with this type of record, who exactly are we dealing with?”

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This Insider Trading Case Raises Troubling Questions About Trump’s Commerce Secretary Nominee

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Here’s a New, Simpler Unemployment Rate For Our New, Simpler President

Mother Jones

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Donald Trump thinks the official unemployment rate is “fiction,” so Jordan Weissmann suggests we judge him by a different metric. Instead of a complicated measure that tries to divine whether someone “wants” to work, or whether they “want” full-time work but can’t get it, or any of that nonsense, let’s use a simpler measure for this new, simpler era:

The BLS even produces a data point that Trump himself might like: The employment-to-population ratio for adults between the ages of 25 and 54—or “prime-age EPOP.”…It gives us a raw look at the employment rate, without any fancy caveats about who is and isn’t part of the labor force. And because it only tracks workers 25 to 54, it isn’t really distorted by the wave of retiring boomers or growing college attendance. It’s a simple snapshot of the portion of the population we most need to worry about….Best of all, from Trump’s perspective at least, prime-age EPOP has plenty of room for improvement….If Trump wants to argue that Obama left him an economy that was still hurting, this is one stat that will easily help make the case.

Fine. But we don’t really want to know how many people are working, we want to know how many people aren’t working. So here’s the inverse prime-age EPOP, since 1990:

IPA-EPOP1 fell steadily during the postwar period as more and more women left the (unpaid) household workforce and entered the (paid) market workforce, but it’s been relatively stable since 1990. That means we can think of the period from 1990 until the start of the Great Recession as sort of a baseline for normal. The average during this period was 20.2 percent, and right now we’re still 1.6 percentage points away from that. As Weissmann says, this gives Trump some room to show improvement.

Now, naysayers are going to complain that this doesn’t really make sense. After all, this number includes lots of people who don’t want to work, mostly stay-at-home mothers and fathers. Shouldn’t we take them out of this calculation? Sure, we should, but then we’re back to that whole tedious discussion of who’s in the labor force and who’s just given up and all that stuff. We want simple: working or not working, end of story. And in fairness, when the economy is hot, wages go up and more stay-at-home parents are drawn back into the workforce. That makes this an OK measure of economic hotness.

So there you have it. Trump’s starting point is an IPA-EPOP of 21.8 percent. In four years we’ll see if he’s managed to bring that down.

1Rolls right off the tongue, doesn’t it?

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Here’s a New, Simpler Unemployment Rate For Our New, Simpler President

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Peter’s Choice

Mother Jones

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This past October, I taught a weeklong seminar on the history of conservatism to honors students from around the state of Oklahoma. In five long days, my nine very engaged students and I got to know each other fairly well. Six were African American women. Then there was a middle-aged white single mother, a white kid who looked like any other corn-fed Oklahoma boy and identified himself as “queer,” and the one straight white male. I’ll call him Peter.

Peter is 21 and comes from a town of about 3,000 souls. It’s 85 percent white, according to the 2010 census, and 1.2 percent African American—which would make for about 34 black folks. “Most people live around the poverty line,” Peter told the class, and hunting is as much a sport as a way to put food on the table.

Peter was one of the brightest students in the class, and certainly the sweetest. He liked to wear overalls to school—and on the last day, in a gentle tweak of the instructor, a red “Make America Great Again” baseball cap. A devout evangelical, he’d preferred former Arkansas Gov. Mike Huckabee at the start of the primary season, but was now behind Donald Trump.

One day the students spent three hours drafting essays about the themes we’d talked about in class. I invited them to continue writing that night so the next morning we could discuss one of their pieces in detail. I picked Peter’s because it was extraordinary. In only eight hours he’d churned out eight pages, eloquent and sharp.

When I asked him if I could discuss his essay in this article, he replied, “That sounds fine with me. If any of my work can be used to help the country with its political turmoil, I say go for it!” Then he sent me a new version with typos corrected and a postelection postscript: “My wishful hope is that my compatriots will have their tempers settled by Trump’s election, and that maybe both sides can learn from the Obama and Trump administrations in order to understand how both sides feel. Then maybe we can start electing more moderate people, like John Kasich and Jim Webb, who can find reasonable commonality on both sides and make government work.” Did I mention he was sweet?

When he read the piece aloud in class that afternoon in October, the class was riveted. Several of the black women said it was the first time they’d heard a Trump supporter clearly set forth what he believed and why. (Though, defying stereotypes, one of these women—an aspiring cop—was also planning to vote for Trump.)

Peter’s essay took off from the main class reading, Corey Robin’s The Reactionary Mind: Conservatism From Edmund Burke to Sarah Palin. Its central argument is that conservative movements across history are united in their devotion to the maintenance of received social hierarchy. Peter, whose essay was titled “Plight of the Redneck,” had a hard time seeing how that applied to the people he knew.

“We all live out in the wilderness, either in the middle of a forest or on a farm,” he wrote. “Some people cannot leave their homes during times of unfortunate weather. Many still dry clothes by hanging them on wires with clothespins outside. These people are nowhere near the top, or even the middle, of any hierarchy. These people are scraping the bottom of the barrel, and they, seemingly, have nothing to benefit from maintaining the system of order that keeps them at the bottom.” His county ended up going about 70 percent for Trump.

Concerning race, Peter wrote, “In Oklahoma, besides Native Americans, there have traditionally been very few minorities. Few blacks have ever lived near the town that I am from…Even in my generation, despite there being a little more diversity, there was no racism, nor was there a reason for racism to exist.” His town’s 34 or so black people might beg to differ, of course; white people’s blindness to racism in their midst is an American tradition. As one of the African American students in the class—I’ll call her Karen—put it, whites in her town see “racism as nonexistent unless they witness it firsthand. And then it almost has to be over the top—undeniable acts of violence like hate crimes or cross burnings on front lawns—before they would acknowledge it as such.” But it’s relevant to the story I’m telling that I’m certain Peter isn’t individually, deliberately racist, and that Karen agrees.

Still, Peter’s thinking might help us frame a central debate on the left about what to make of Trump’s victory. Is it, in the main, a recrudescence of bigotry on American soil—a reactionary scream against a nation less white by the year? Or is it more properly understood as an economically grounded response to the privations that neoliberalism has wracked upon the heartland?

Peter knows where he stands. He remembers multiple factories and small businesses “shutting down or laying off. Next thing you know, half of downtown” in the bigger city eight miles away “became vacant storefronts.” Given that experience, he has concluded, “for those people who have no political voice and come from states that do not matter, the best thing they can do is try to send in a wrecking ball to disrupt the system.”

When Peter finished with that last line, there was a slight gasp from someone in the class—then silence, then applause. They felt like they got it.

I was also riveted by Peter’s account, convinced it might be useful as a counterbalance to glib liberal dismissals of the role of economic decline in building Trumpland. Then I did some research.

According to the 2010 census, the median household income in Peter’s county is a little more than $45,000. By comparison, Detroit’s is about $27,000 and Chicago’s (with a higher cost of living) is just under $49,000. The poverty rate is 17.5 percent in the county and 7.6 percent in Peter’s little town, compared with Chicago’s 22.7 percent. The unemployment rate has hovered around 4 percent.

The town isn’t rich, to be sure. But it’s also not on the “bottom.” Oklahoma on the whole has been rather dynamic economically: Real GDP growth was 2.8 percent in 2014—down from 4.3 percent in 2013, but well above the 2.2 percent nationally. The same was true of other Trump bastions like Texas (5.2 percent growth) and West Virginia (5.1 percent).

Peter, though, perceives the region’s economic history as a simple tale of desolation and disappointment. “Everyone around was poor, including the churches,” he wrote, “and charities were nowhere near (this wasn’t a city, after all), so more people had to use some sort of government assistance. Taxes went up as the help became more widespread.”

He was just calling it like he saw it. But it’s striking how much a bright, inquisitive, public-spirited guy can take for granted that just is not so. Oklahoma’s top marginal income tax rate was cut by a quarter point to 5 percent in 2016, the same year lawmakers hurt the working poor by slashing the earned-income tax credit. On the “tax burden” index used by the website WalletHub, Oklahoma’s is the 45th lowest, with rock-bottom property taxes and a mere 4.5 percent sales tax. (On Election Day, Oklahomans voted down a 1-point sales tax increase meant to raise teacher pay, which is 49th in the nation.).

As for government assistance, Oklahoma spends less than 10 percent of its welfare budget on cash assistance. The most a single-parent family of three can get is $292 a month—that’s 18 percent of the federal poverty line. Only 2,469 of the more than 370,000 Oklahomans aged 18 to 64 who live in poverty get this aid. And the state’s Medicaid eligibility is one of the stingiest in the nation, covering only adults with dependent children and incomes below 42 percent of the poverty level—around $8,500 for a family of three.

But while Peter’s analysis is at odds with much of the data, his overall story does fit a national pattern. Trump voters report experiencing greater-than-average levels of economic anxiety, even though they tend have better-than-average incomes. And they are inclined to blame economic instability on the federal government—even, sometimes, when it flows from private corporations. Peter wrote about the sense of salvation his neighbors felt when a Walmart came to town: “Now there were enough jobs, even part-time jobs…But Walmart constantly got attacked by unions nationally and with federal regulations; someone lost their job, or their job became part-time.”

It’s worth noting that if the largest retail corporation in the world has been conspicuously harmed by unions and regulations of late, it doesn’t show in its profits, which were $121 billion in 2016. And of course, Walmart historically has had a far greater role in shuttering small-town Main Streets than in revitalizing them. But Peter’s neighbors see no reason to resent it for that. He writes, “The majority of the people do not blame the company for their loss because they realize that businesses are about making money, and that if they had a business of their own, they would do the same thing.”

It’s not fair to beat up on a sweet 21-year-old for getting facts wrong—especially if, as is likely, these were the only facts he was told. Indeed, teaching the class, I was amazed how even the most liberal students took for granted certain dubious narratives in which they (and much of the rest of the country) were marinated all year long, like the notion that Hillary Clinton was extravagantly corrupt.

Feelings can’t be fact-checked, and in the end, feelings were what Peter’s eloquent essay came down to­—what it feels like to belong, and what it feels like to be culturally dispossessed. “After continually losing on the economic side,” he wrote, “one of the few things that you can retain is your identity. What it means, to you, to be an American, your somewhat self-sufficient and isolated way of life, and your Christian faith and values. Your identity and heritage is the very last thing you can cling to…Abortion laws and gay marriage are the two most recent upsets. The vast majority of the state of Oklahoma has opposed both of the issues, and social values cannot be forced by the government.”

On these facts he is correct: In a 2015 poll, 68 percent of Oklahomans called themselves “pro-life,” and only 30 percent supported marriage equality. Until 2016 there were only a handful of abortion providers in the entire state, and the first new clinic to open in 40 years guards its entrance with a metal detector.

Peter thinks he’s not a reactionary. Since that sounds like an insult, I’d like to think so, too. But in writing this piece, I did notice a line in his essay that I had glided over during my first two readings, maybe because I liked him too much to want to be scared by him. “One need only look to the Civil War and the lasting legacies of Reconstruction through to today’s current racism and race issues to see what happens when the federal government forces its morals on dissenting parts of the country.”

The last time I read that, I shuddered. So I emailed Peter. “I say the intrusions were worth it to end slavery and turn blacks into full citizens,” I wrote. “A lot of liberals, even those most disposed to having an open mind to understanding the grievances of people like you and yours, will have a hard time with your words.”

Peter’s answer was striking. He first objected (politely!) to what he saw as the damning implication behind my observation. Slavery and Reconstruction? “I was using it as an example of government intrusion and how violent and negative the results can be when the government tries to tell people how to think. I take it you saw it in terms of race in politics. The way we look at the same thing shows how big the difference is between our two groups.”

To him, focusing on race was “an attention-grabbing tool that politicians use to their advantage,” one that “really just annoys and angers conservatives more than anything, because it is usually a straw man attack.” He compared it to what “has happened with this election: everyone who votes for Trump must be racist and sexist, and there’s no possible way that anyone could oppose Hillary unless it’s because they’re sexist. Accusing racism or sexism eliminates the possibility of an honest discussion about politics.”

He asked me to imagine “being one of those rednecks under the poverty line, living in a camper trailer on your grandpa’s land, eating about one full meal a day, yet being accused by Black Lives Matter that you are benefiting from white privilege and your life is somehow much better than theirs.”

And that’s when I wanted to meet him halfway: Maybe we could talk about the people in Chicago working for poverty wages and being told by Trump supporters that they were lazy. Or the guy with the tamale cart in front of my grocery store—always in front of my grocery store, morning, noon, and night—who with so much as a traffic violation might find himself among the millions whom Trump intends to immediately deport.

I wanted to meet him halfway, until he started talking about history.

“The reason I used the Civil War and Reconstruction is because it isn’t a secret that Reconstruction failed,” Peter wrote. “It failed and left the South in an extreme poverty that it still hasn’t recovered from.” And besides, “slavery was expensive and the Industrial Revolution was about to happen. Maybe if there had been no war, slavery would have faded peacefully.”

As a historian, I found this remarkable, since it was precisely what all American schoolchildren learned about slavery and Reconstruction for much of the 20th century. Or rather, they did until the civil rights era, when serious scholarship dismantled this narrative, piece by piece. But not, apparently, in Peter’s world. “Until urban liberals move to the rural South and live there for probably a decade or more,” he concluded, “there’s no way to fully appreciate the view.”

This was where he left me plumb at a loss. Liberals must listen to and understand Trump supporters. But what you end up understanding from even the sweetest among them still might chill you to the bone.

Read Peter’s full essay at motherjones.com/oklahoma.

Link – 

Peter’s Choice

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California Mobilizes for War Against Trump

Mother Jones

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Here in America’s most populous state, the wealthy pay the nation’s highest income tax rate, the minimum wage will soon rise to $15 an hour statewide, more than a quarter of the population is foreign born, and the economy is booming. California, the world’s sixth-largest economy and a bastion of progressivism, is now being hailed as a kind of great blue firewall—Democrats’ most important bulwark against the retrograde policies of Donald Trump.

“If you want to take on a forward-leaning state that is prepared to defend its rights and interests, then come at us,” Xavier Becerra, the state’s incoming attorney general, taunted the president-elect in December.

“One thing that should be made very clear is that one election won’t change the values of the state of California,” Kevin de León, the Senate president pro tempore, told Mother Jones. “What we would say to the incoming Trump administration is that we hope you find value in what we do in California—by growing the economy, creating real jobs that can be verified, reducing our carbon footprint, respecting immigrants for who they are, and recognizing that diversity, a rich mosaic of different hues, is actually a strength, not a weakness.”

Soon after Trump announced Cabinet nominees that “confirmed our worst fears about what a Trump presidency would look like,” says de León, he and his colleagues in the Statehouse retained former US Attorney General Eric Holder to advise on potential legal challenges from the next White House. “He brings a lot of legal firepower to do everything within our power to protect the policies, people, and progressive values of California.”

In a state where Democrats control all statewide elected offices and a supermajority of the Legislature, the economy grew 4.1 percent in 2015—the fastest in the country and nearly double the national average. Since 2011, when Democrat Jerry Brown replaced Republican Arnold Schwarzenegger as governor, the state has turned a $26 billion budget deficit into a surplus that is projected to include upward of $8 billion for a rainy-day fund by the end of 2017. California has leveraged its booming economy to expand social services; since 2014, it has increased its budget for child care and preschool for low-income children by 24 percent, to $3.7 billion.

Trump’s bigoted rhetoric and alignment with far-right extremists during the presidential campaign alienated many people in California, which boasts an economy that in many ways is defined by immigrant labor, global free trade, and a progressive regulatory regime. A push to deport undocumented farmworkers could hurt the state’s agricultural sector. The green-energy sector fears a loss of subsidies and more drilling, maybe even in pristine federally protected waters just off the coast. Silicon Valley is suspicious of Trump on cybersecurity, trade protectionism, and the import of highly skilled tech workers. And then there is Hollywood: Meryl Streep’s condemnation of Trump at the Golden Globes this month underscored a deep antipathy for the president-elect among celebrities, many of whom have declined to perform at his inauguration.

But California’s leaders aren’t just engaging in a rhetorical war on Trump. Here’s what the Golden State is already doing to counter the president-elect on a range of major issues and defend its progressive achievements.

Climate Change

Trump famously suggested global warming is a Chinese hoax and has vowed to “cancel” the Paris Accord committing nearly every nation to curb emissions. His pick to lead the Environmental Protection Agency, Oklahoma Attorney General Scott Pruitt, is a climate change denier best known for suing the EPA in an effort to overturn its clean-energy policies. A darling of oil and coal interests, Pruitt has vowed as EPA chief to fight “unnecessary regulations” and promote “freedom for American business.”

But even if the Trump administration works to pull America back toward its carbon-spewing past, it will have little impact in California, which last year enacted a bill requiring the state to slash greenhouse gas emissions to 40 percent below 1990 levels by 2030. Recently, Gov. Brown and other state leaders said they would bypass Trump and work directly with other nations and states to reduce emissions; California already trades emissions credits with Quebec, and in 2013 the state inked a pact with China committing to joint efforts to combat climate change and support clean energy—the only such agreement China has signed with a subnational government.

California plays a unique role in setting national energy policy: Section 209 of the Clean Air Act allows California, but not other states, to set its own stricter-than-federal emissions standards for automobiles if they address “compelling and extraordinary conditions.” Other states are then allowed to adopt those regulations. To date, 10 other states, representing 40 percent of the US population, have signed on to California’s tighter efficiency and emissions rules for cars, appliances, and automobiles. “The California standard actually governs in many cases rather than the federal standard,” notes Hal Harvey, president of Energy Innovation, a policy research group in San Francisco, “because nobody wants to make two product lines.”

California plays a less decisive role in directly supporting environmental sciences and energy research, which depend heavily on federal support, but Brown has signaled a desire to step in if Trump pulls the plug. “We’ve got the scientists, we’ve got the lawyers, and we’re ready to fight,” Brown said at the American Geophysical Union Conference in San Francisco. He even suggested that if Trump follows through on some advisers’ ambitions to end NASA’s role in climate science, California could step in and “launch its own damn satellite.”

Immigration

Though Trump campaigned on the idea of deporting America’s estimated 11 million undocumented immigrants, he has more recently said he will focus first on deporting 2 million to 3 million immigrants with criminal records—a number that would presumably include many people who’ve committed minor infractions. (Only about 820,000 undocumented immigrants have been convicted of crimes, according to the nonpartisan Migration Policy Institute.) But pursuing mass deportations in California won’t be easy. A 2014 law bans state authorities from holding immigrants convicted of minor crimes for any longer than required by criminal law, thereby protecting them from being turned over to federal authorities for deportation. Many California cities have even broader “sanctuary city” policies.

Last month, state legislators introduced a package of bills that would go even further: Legislation authored by de León would bar state and local authorities from enforcing immigration laws, limit records sharing with federal immigration officials, and create “safe zones” at schools, hospitals, and courthouses where immigration enforcement would be prohibited. “To the millions of undocumented residents pursuing and contributing to the California Dream, the state of California will be your wall of justice should the incoming administration adopt an inhumane and overreaching mass-deportation policy,” de León said last month.

Other proposed bills would subsidize immigrant legal services by training public defenders in immigration law and setting up a fund to cover legal bills for immigrants caught up in deportation proceedings. Studies have shown that immigrants with a lawyer are far more likely to succeed in challenging deportation proceedings. Los Angeles last month announced a $10 million immigrant legal fund; the San Francisco Public Defender’s Office has proposed a similar $5 million fund.

More than a quarter of immigrants in the United States illegally live in California. In 1994, voters approved Proposition 187, a ballot measure making undocumented immigrants ineligible for public benefits. But since then, the state has moved sharply in the other direction. In 2011, Brown signed the California DREAM Act, allowing Californians who came to the country illegally when they were children to apply for financial aid from state colleges. In 2013, California allowed undocumented immigrants to obtain driver’s licenses, qualify for in-state tuition, and obtain law and other professional licenses. Last year, the state expanded its California-only Medicaid (Medi-Cal) program to undocumented children.

Anticipating that the Trump administration could use records collected through such programs to identify and round up undocumented immigrants, the American Civil Liberties Union is pushing for further safeguards here. “We’re concerned about ensuring that information is protected and can remain confidential,” says Jennie Pasquarella, the director of immigrant rights for the ACLU of California. “It is critical that California first show a model for the rest of the country—our values as a state that is filled with immigrants.” California’s Kamala Harris announced earlier this month that her first act as a US senator would be to co-sponsor legislation to protect the nation’s 744,000 “DREAMers” from deportation.

Health Care

Republicans and Trump have vowed to repeal the Affordable Care Act—but in California the law is overwhelmingly popular and successful. The law has provided $20 billion for the Medi-Cal program and for insurance subsidies for 1.2 million Californians, helping to cut the state’s uninsured rate by half, from 6.5 million people in 2012 to 3.3 million in 2015. Patient advocacy groups don’t want to give up those gains. In December, the California Endowment announced that it would spend $25 million over three years to defend against federal cuts to Obamacare and other social programs. “California has made great progress both economically and on the health front over the past several years,” says Daniel Zingale, senior vice president of the Endowment’s Healthy California program. “We think it is important to defend that from threats in Washington.”

Several California leaders are even pushing Trump to replace Obamacare with “Medicare for All,” a.k.a. single-payer health care. “The one I am counting on the most to push nationalized health care is Trump,” RoseAnn DeMoro, the head of the Oakland-based National Nurses United union, told Politico, citing Trump’s “international perspective” as a businessman and the fact that his wife comes from Slovenia, which has a single-payer system. Another major backer of “Medicare for All” is California Lt. Governor Gavin Newsom, who as mayor of San Francisco in 2007 launched Healthy San Francisco, a health care plan available to all city residents regardless of their immigration status, employment, or preexisting conditions.

Marijuana

Trump’s pick for attorney general, Alabama Sen. Jeff Sessions, last year killed a bipartisan bill that would have reduced prison sentences for some lower-level drug offenders. He said last April that “good people don’t smoke marijuana” and that “we need grown-ups in charge in Washington to say marijuana is not the kind of thing that ought to be legalized.”

Though Sessions moderated that rhetoric during his confirmation hearing this week, his nomination is staunchly opposed by California’s $3 billion legal marijuana industry and its representatives in Washington. “Sessions has a long history of opposing marijuana reform, and nothing he said at the hearing suggests he has changed his mind,” Bill Piper, senior director of the Drug Policy Alliance’s Office of National Affairs, said in a press release. The DPA was a major backer of November’s successful California Proposition 64, which legalizes recreational marijuana.

In an echo of the Proposition 64 campaign, drug policy reform groups have partnered with civil rights groups such as the NAACP and LatinoJustice to oppose Sessions on the grounds that the war on drugs has fueled mass incarcerations of people of color for nonviolent offenses. They want to make sure Trump stands by his 2015 statement to the Washington Post that marijuana legalization “should be a state issue.”

Marijuana industry leaders expect California to vigorously defend Proposition 64 from any federal court challenges. “We would expect a very, very strong pushback from the state, because the reality is it’s a public safety issue,” Nate Bradley, executive director of the California Cannabis Industry Association, told the Los Angeles Times. “They have decriminalized a product, so if you don’t allow any sort of regulation in place for people to access that product, the underground market is only going to grow.”

Guns

Enthusiastically endorsed by the National Rifle Association, Trump has vowed to diminish federal gun regulations, including eliminating gun-free zones at schools and on military bases, and he supports a national right-to-carry law for concealed guns. During the presidential campaign he also suggested he would appoint an explicitly anti-gun-control justice to the US Supreme Court.

But California this year further strengthened its gun laws, which were already among the toughest in the nation. In July, Brown signed off on legislation that outlawed the possession of ammunition magazines that hold more than 10 bullets, required background checks for the purchase of ammunition, and banned the sale of certain types of semi-automatic assault rifles. Proposition 63, approved by voters in November, added requirements for owners to report lost and stolen guns and created a system for confiscating guns from felons.

“The United States is a federal republic, not a monarchy, and California plays an outsized role in our nation’s success,” Lt. Governor Newsom, the architect of Proposition 63, said in a statement to Mother Jones. “The reduction of our state’s gun violence rate is a model for the nation and we’re resilient, flexible, and well prepared for any effort by the NRA and the President-elect to make California a Wild West again.”

One place where California hasn’t pushed back much against Trump since the election is Silicon Valley. A few rank-and-file tech workers have held meetings with civil rights groups, but tech CEOs have quietly sidled up to the president-elect. A few weeks ago, a handful of top tech names climbed Trump Tower for an awkward photo op with Trump and his children. “We definitely gave up a little stature now for possible benefit later,” one source told Recode’s Kara Swisher at the time. “It’s better to be quiet now and speak up later if we have to, and save our powder.”

The San Francisco-based Electronic Frontier Foundation, which defends free speech and privacy on the internet, took out a full-page advertisement in Wired magazine in December, warning the technology community, “Your threat model has changed.” The ad calls upon tech companies to secure their networks against an incoming Trump administration by encrypting user data, scrubbing data logs, and disclosing government data requests while fighting them in court.

“For California, Trump is creating a lot of fronts where organizations and government are going to be fighting battles,” says Dave Maass, an investigative researcher at EFF. “We are focused on civil liberties and privacy, and we believe they are fundamental to whatever kind of activism battle that you want to fight. If you don’t have free speech and don’t have the ability to organize, then you can’t do anything.” He anticipates that California lawmakers will be generating a flurry of new bills, and that no small number of them “are going to be direct responses to Trump.”

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California Mobilizes for War Against Trump

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What Trump’s Interior pick means for federal lands and national parks

President-elect Trump tapped Montana Congressman Ryan Zinke to head the Department of the Interior, the cabinet position tasked with management of 500 million acres of federal lands — about one-fifth of the entire United States. As Secretary of the Interior, Zinke’s decisions will impact conservation, recreation, wildlife refuges, endangered species, tribal lands, clean air and water, energy development, and the economy, as well as the beloved National Parks.

So who is this guy anyway? Watch our video above.

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What Trump’s Interior pick means for federal lands and national parks

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Trump’s Pick for Labor Secretary Doesn’t Think Workers Should Get Breaks

Mother Jones

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The US Department of Labor exists to “foster, promote, and develop the welfare of the wage earners and job seekers,” and to “improve working conditions” and “assure work-related benefits and rights.” Andrew Puzder, Donald Trump’s choice to lead the department, has not exactly embodied those values in his career as CEO of CKE Restaurants, parent company of fast-food chains Hardee’s and Carl’s Jr. He’s a staunch and vocal opponent of minimum-wage hikes, and his company has had to pay out millions of dollars to settle overtime claims (more here).

And now, thanks to OC Weekly‘s Gabriel San Roman, we know what Puzder thinks of worker breaks. Spoiler: not much.

San Roman got to digging into the archives of Cal State Fullerton’s Center for Oral and Public History, where he found a 2009 interview (not available online) with Puzder. According to San Roman, Puzder “complained about regulations and overtime laws, claiming workers are overprotected.” San Roman adds, quoting from the interview:

“Have you ever been to a fast food restaurant and the employees are sitting and you’re wondering, ‘Why are they sitting?'” Puzder asked. “They are on what is called a mandatory break emphasis his.” He shared a laugh with the interviewer, saying the so-called nanny state is why Carl’s Jr. doesn’t open up any new restaurants in California anymore.

Now, anointing a burger tycoon who openly disdains worker rights as labor secretary might seem like a quintessentially Trumpian move. But it’s worth remembering that Puzder is very much an establishment Republican. A major donor to GOP political campaigns, he served as an economic adviser and spokesman for Mitt Romney’s 2012 presidential campaign, and as a delegate to the 2012 Republican National Convention and as chairman of the Platform Committee’s Sub-Committee on the Economy, Job Creation, and the Debt.

In late 2014, as the 2016 presidential race was about to heat up, Puzder listed his top three choices for the Republican nomination: Romney, former Texas Gov. Rick Perry (now Trump’s choice to lead the Department of Energy), and former Florida Gov. Jeb Bush. That same year, Puzder and then-Gov.Perry even appeared together at a Carl’s Jr. event in Austin, to roll out the burger chain’s “Texas BBQ Thickburger” and raise funds for a veterans’ charity, along with Sports Illustrated swimsuit model Hannah Ferguson. Puzder declared Perry “America’s best governor.”

And now they’ll both be in the Cabinet. Trump ran hard against the GOP establishment, only to hand it the keys to power.

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Trump’s Pick for Labor Secretary Doesn’t Think Workers Should Get Breaks

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Am I Still Bitter Over Republican Perfidy in 2009? Oh Yes.

Mother Jones

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The Economic Report of the President is out, and we should probably take a look at it, if only for old time’s sake. The rumor mill says that the next chairman of the CEA will be supply-side TV blatherer Larry Kudlow, and God knows what we can expect from him. Probably a ten-minute YouTube video. Or maybe a tweetstorm. Who knows?

Anyway, this year’s report is stocked full of the usual number of interesting charts, but I’m going to highlight their version of my favorite chart. This one shows state and local spending following the Great Recession:

Normally, spending increases after a recession, and this is one of the things that powers the recovery. This time that didn’t happen. Thankfully, we at least had a bit of help at the federal level:

Needless to say, Republicans feverishly opposed all attempts at economic stimulus because they didn’t want the economy to get too much better. That might have helped Obama’s reelection chances, you see.

Oh well. Bygones. I’m sure Trump will fix everything.

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Am I Still Bitter Over Republican Perfidy in 2009? Oh Yes.

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Saving for Retirement Is a Struggle—Unless You’re a CEO

Mother Jones

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President Barack Obama has called runaway income inequality the “defining issue of our time.” The disparity between exploding corporate profits and stagnating paychecks fueled Bernie Sanders’ presidential campaign and continues to grow. Currently, the United States has a wider gap between the very rich and everyone else than at any time since the late 1920s. And according to a new study from the Institute for Policy Studies, that spells disaster for Americans trying to save enough to retire.

The study, titled “A Tale of Two Retirements,” found that in 2015 just 100 CEOs had retirement funds worth $4.7 billion—equivalent to the entire retirement savings of the least wealthy 41 percent of American families, or 116 million people. That figure is even more staggering when broken down by race: Those 100 execs’ retirement funds are worth as much as the entire retirement savings of the bottom 44 percent of white working-class families, the bottom 59 percent of African American families, and the bottom 75 percent of Latino families.

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Look at it another way. Those 100 CEOs have nest eggs large enough to generate a retirement check of more than $250,000 per month for the rest of their lives. Meanwhile, the average American fortunate enough to have a 401(k) plan has socked away only enough to receive a monthly check of just $101. And those are the lucky ones: 37 percent of all US households have no retirement savings at all. Neither do 51 percent of African American families and 66 percent of Latino families. Things are also particularly bleak for millennials, as Americans younger than 40 have saved 7 percent less for retirement than similarly aged boomers.

The hollowing out of workers’ retirement benefits punishes female retirees, in particular: Median incomes for women 65 and older are 45 percent lower than men’s. And since women live longer than men, on average, they must stretch their retirement savings even further.

So who are these rapacious retirees? Many of them head companies that have been cutting back on worker pensions and retirement funds for years. John Hammergen, the CEO of the pharmaceutical giant McKesson, holds nearly $150 million in retirement assets. Shortly after joining the company in 1996, he closed its pension fund to all new employees. Yet Hammergen found enough money to set up a retirement account that has furnished him with assets worth more than $20,000 for every day he’s spent at the company’s helm.

Walmart CEO Doug McMillon already had $67.8 million stashed in an untaxed, deferred compensation account in 2015, despite having only held his post since 2014. His predecessor, Michael Duke, retired with more than $140 million in deferred compensation. In contrast, fewer than two-thirds of Walmart’s 1.5 million employees have a company-sponsored retirement account. Those who do have an average balance of less than $24,000, enough for a monthly retirement check of $131—not even 0.04 percent of what McMillon can expect to take home every month.

Jeff Immelt, the CEO of General Electric, has more than $92 million in retirement assets. Between 1987 and 2011, the company contributed not one penny to employee pension plans, counting on rising stock prices to offset its expected contribution. After the economy crashed in 2008, Immelt froze pensions and closed them to new participants. The company has only funded 67 percent of its outstanding pension obligation to workers and its pension deficit has grown by $5 billion since 2011. During the same time, Immelt’s company-sponsored retirement assets have swelled from $53 million to $92 million.

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So how has this happened? Simply, the tax rules are structured in favor of massive executive retirement packages. Ordinary workers face strict limits on how much pre-tax income they invested in tax-deferred plans like 401(k)s. (The current limit is $18,000.) CEOs may participate in regular employee plans, but they also get Supplemental Executive Retirement Plans, which Fortune 500 companies set up with unlimited tax-deferred compensation. Since more than half of executive compensation is tied to stock price, CEOs have direct incentives to cut back on worker retirement benefits to pad their balance sheets. The money saved by those cost-cutting measures goes straight back into executives’ pockets, often tax-free: Corporations may deduct unlimited amounts of executive compensation from their federal taxes so long as it’s “performance based.”

Much of this is the result of Reagan-era policies that worked to prioritize corporate profits and undo the power of unions. Under Reagan, companies began to adopt 401(k)s over pensions, shifting investment risk from employers to workers, as these plans required workers to deduct savings from their paychecks with no guarantee of future benefits. Companies have also reduced retirement benefits by converting workers’ pension assets to cash balance plans, freezing retirement plans, closing retirement plans to new hires, or terminating retirement plans altogether.

Might this get better under President-elect Donald Trump, whose economic message seemingly resonated with white-working class voters? Don’t count on it. If Trump and congressional Republicans cut the top marginal tax rate from 39.6 percent to 33 percent, Fortune 500 CEOs would stand to save $195 million when they withdraw cash from their tax-deferred retirement accounts, according to IPS.

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Saving for Retirement Is a Struggle—Unless You’re a CEO

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Turns out putting on a condom is good for the planet AND the economy.

This year marked our inaugural class of the Grist 50: innovators, organizers, and visionaries who are dedicated to and passionate about solving tomorrow’s problems. The honorees come from all walks of life — politicians, chefs, scientists, and even supermodels.

If you haven’t already, check out the project. We’re already busy rounding up next year’s batch of Grist 50-ers, so stay tuned!

As part of our annual winter fund drive, we’re highlighting the stories of 2016 that defined our year. Why? Now more than ever, the world desperately needs independent nonprofit journalism. With the media landscape rife with antagonism, spectacle, and fake news, Grist dives deep and brings important stories you just can’t find elsewhere.

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Grist’s journalism is powered by readers like you. So if you enjoyed Climate on the Mind or any of the great work the team brought you this year, please consider making a gift!

As an added bonus, all new monthly donors will receive a beautiful limited-edition Grist steel pint glass to drink your political sorrows away toast to the progress we make toward a more sustainable, just future. Supplies are limited — get yours now.

 

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Turns out putting on a condom is good for the planet AND the economy.

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