While the Fed has done a good job bringing down inflation in the past year, it should be cognizant of its blind spots and the flawed process it has been utilizing to make decisions.

The Fed and its chairman, Jerome Powell, have been unable to recognize a heating or cooling economy in a timely fashion to take orderly action to minimize the negative effects.

In 2019, Powell began to tighten the Fed rate prematurely, recognized his mistake and reversed course. 

In spring 2020, facing a pandemic-induced economic collapse, he pumped trillions of dollars into the economy for far too long, held the fund rate close to zero and induced high inflation.

In March 2022, he finally began tightening and has been moving rates higher and faster ever since. So far, he has raised rates 10 times, brought the fund rate to 5 percent-5.25 percent and plans to raise rates by .25 points in the upcoming July and September meetings. 

As a result, the Consumer Price Index went down from 9.1 percent to 3 percent in the year through June. And the latest Producer Price Index for all goods minus food and energy — an indicator of future core inflation that the Fed watches — decreased 0.2 percent in the year through June, and according to the University of Michigan's ongoing survey, consumer sentiment soared to 72.6 in July— higher by 13 percent from June.

These data indicate a steep downward CPI trend that would continue to lower inflation for several more months toward the Fed’s 2.0 percent rate, and therefore not require additional hikes. But the fact that the Fed intends to raise rates twice more suggests an unsound decision-making process. As I have reported elsewhere, for the past 18 years the seven U.S. Federal Reserve Board governors who make up the stable core of the rate-setting committee have voted in lockstep. During that period, spanning approximately a collective 144 decisions and 1,008 individual votes, not one governor dissented. As a result, these decisions could have been made by one person, and in the future, they can be made using AI.

Looking at this issue from a cost-benefit perspective leads to a similar conclusion.

The negatives of raising rates further include a greater chance of a hard landing, that is, a sudden and quickly-evolving recession, a higher rate of unemployment, which tends to affect minorities and people of color more harshly than the rest of the population and thus increase social disparities, and a need to start lowering rates quickly after landing.

On the other hand, refraining from further rate increases would result in a better chance for a soft landing, which will assure both consumers and producers a more stable and predictable economy. There will be fewer unemployed, which will contribute to social cohesion, and a less urgent need to lower rates.   

All of these obviate the need for further rate increases in the near future. It is time for Fed members to rest on their laurels for a while, watch their past rate hikes continue to percolate in the economy and drive inflation down with little or no side effects.

Will the Fed listen? Not likely. Except for the pause in June, the Fed has been raising rates for more than a year — several times by .75 percent. It’s a path to which it is committed and in which it feels comfortable. And it makes decisions by a consensus that has not been enhanced for many years.  

It behooves the Fed to pause now and critically examine and modify the way it makes decisions before Congress forces such changes, which could be far more overreaching.  

Avraham Shama is the former dean of the College of Business at the University of Texas, The Pan-American. He is a professor emeritus at the Anderson School of Management at the University of New Mexico. His new book, “Cyberwars: David Knight Goes to Moscow,” was recently published by 3rd Coast Books.

In baseball, it’s three strikes and you’re out. By that standard, antitrust enforcers at the Federal Trade Commission should have stepped off the playing field a while ago.

In tallying up the losses, it’s hard to know where to start. The regulatory parade of follies includes the agency’s debatable effort to block Altria’s minority equity investment in Juul, a struggling e-cigarette maker; its puzzling suit to block Facebook’s acquisition of Within, a metaverse fitness app; and now a federal court’s rejection of its challenge to Microsoft’s acquisition of the video-game publisher Activision (which the FTC immediately appealed).

While the FTC has succeeded in disrupting Illumina’s acquisition of Grail, a cancer-diagnostic startup, that is only because the agency effectively outsourced enforcement to European Union regulators (which asserted jurisdiction and blocked the acquisition even though Grail does no business in Europe). The FTC subsequently lost the case against Illumina in its own administrative court, which the commissioners then simply overruled.

In rejecting the vertical merger guidelines that the FTC and the Justice Department had jointly issued in 2020, current FTC leadership advanced the view that federal case law applies excessively demanding standards that overlook the competitive risks posed by vertical acquisitions. Yet regulators have a duty to enforce the law as it exists today, not as regulators would like to rewrite it.

Having lost the fight to reinterpret the antitrust laws in court or to amend those laws in Congress, FTC leadership has adopted an in terrorem strategy of bringing causes of action against vertical acquisitions even in the absence of a credible legal or factual basis.

These litigation theatrics impose an “antitrust tax” that can lead targeted firms to pull a transaction and enable the agency to secure outcomes that it couldn’t otherwise achieve. In some acquisitions, the prospect of litigation will cause parties to withdraw, while transactions that may have benefited consumers are likely not being undertaken given the unpredictable regulatory climate. Legal uncertainty is now heightened in the case of vertical acquisitions, since the FTC has not provided guidance to replace the vertical merger guidelines withdrawn in 2021, leaving the agency with regulatory discretion that has few known limits.

Concerns over the absence of regulatory guardrails are illustrated by the agency’s challenge to the Microsoft/Activision acquisition. The weakness of the case is notable in two key respects, which explains why Japan’s competition regulator approved the transaction in March 2023 and EU competition enforcers — who are hardly reluctant to intervene — did so in May 2023.

First, concerns that Microsoft could prevent the current leaders (Sony and Nintendo) in the console-based segment of the video-game market from offering the popular “Call of Duty” game are mitigated by Microsoft’s disinclination to forfeit the licensing revenues that would be sacrificed by doing so (or to risk discouraging use by degrading the game’s cross-platform functionality). Moreover, Microsoft has entered into a 10-year licensing agreement with Nintendo (which currently does not offer “Call of Duty”)and committed to maintain Sony’s access to the game for the same period. Hence the agency’s foreclosure concerns now appear to be moot.

Second, the FTC’s case overlooks the fact that the Microsoft/Activision combination can improve competitive conditions in the video-game market by promoting development of a cloud-based streaming segment that challenges current leaders in the console-based segment. This is a formidable undertaking that only the largest firms can feasibly attempt: even Google was compelled to close its Stadia cloud-gaming service due to meager adoption. Turning antitrust law on its head, the FTC’s challenge impedes the emergence of a new delivery model that could pose a competitive threat to the leading console-based services. Moreover, to allay foreclosure concerns raised by EU regulators, Microsoft agreed to license Activision content to other cloud-based streaming services.

FTC leadership has made the broader case that antitrust enforcement has been constrained by an analytical framework that requires compelling factual evidence of competitive harm. Taking antitrust law several decades backwards, agency leadership seeks to revert to the discredited formalism of post–World War II antitrust policy, which reflexively assumed competitive harm based largely on market share or business practices.

The Microsoft/Activision case illustrates the counterproductive outcomes to which this categorical approach can lead. The fact that Microsoft is a “mega”-sized firm, or that it wishes to expand vertically into the content segment of the video-game market, cannot condemn the transaction without persuasive evidence that it would “substantially lessen” competition. By adopting a “big is bad” approach to merger review that overlooks a well-developed economic literature rejecting inferences of competitive harm based merely on firm size or a certain type of business practice, the FTC has brought a case that threatens to entrench incumbents, suppress innovation and harm consumers.

The populist narrative that now prevails in antitrust discussion sometimes asserts that courts and agencies integrated economic principles into antitrust law based on a nefarious campaign to protect “big business.” This historical fable hurts real-world markets and consumers. The integration of economic concepts reflected careful efforts by scholars, judges, and regulators to develop an evidence-based framework for enforcing antitrust law to protect competition rather than particular competitors. Ironically, the weakness of the FTC’s case against the Microsoft/Activision transaction provides the best evidence for the wisdom of this approach.

Jonathan Barnett is the Torrey H. Webb Professor of Law at the University of Southern California, Gould School of Law and the author of “Innovators, Firms, and Markets: The Organizational Logic of Intellectual Property.”

These are very promising developments, but only if both parties are prepared to put everything on the table. This is not simply a political imperative. It is a policy imperative as well.

The political imperative comes from the need to build trust across party lines. Neither party wants to go it alone in proposing tough choices out of fear that the other side will attack them. Similarly, neither side wants to discuss possible compromises of their own priorities out of fear that the other side will take the concessions and run. Unfortunately, these fears are justified. The only way to get both parties at the table is to ensure that all options can be discussed in good faith.

The policy imperative to put everything on the table comes from the sheer magnitude of our fiscal imbalance. The Congressional Budget Office projects that under current law, annual budget deficits will grow from 5.8 percent of GDP this year to 10 percent in 2053. Debt held by the public is already near a historic high and is projected to nearly double over the next 30 years.

Another way to consider the challenge is to look at the “primary deficit,” which excludes interest on the debt. This is useful because it measures the difference between the cost of government programs (primary spending) and revenues. As CBO explains, these are “the main mechanisms through which lawmakers can directly influence the trajectory of the federal debt and interest costs.” 

The CBO projects a persistent primary deficit averaging 3.1 percent of GDP between now and 2053, a level that far exceeds the 1.5 percent average over the past 50 years. It is the added annual costs of servicing these primary deficits that produce a vicious cycle of rising deficits and debt. In CBO’s projections, interest costs rise from 2.5 percent of GDP this year to 6.7 percent of GDP in 2053.

We are truly headed into uncharted waters and it is difficult to conceive of a remedy that does not draw from all parts of the budget.

A crucial factor propagating future deficits is population aging. An aging population accounts for all of the Social Security growth. The major healthcare programs grow due to a combination of population aging and higher costs per beneficiary, which CBO refers to as “additional cost growth.” Over the next 30 years, about one-third of the cost growth for healthcare programs is attributable to population aging, while the remaining two-thirds comes from rising costs per beneficiary.

Other federal programs, including defense and nondefense discretionary spending, are actually projected to shrink as a share of GDP over the next 30 years. If a fiscal commission were to leave Social Security and healthcare programs off the table, it would exempt the main cost drivers of the budget and undermine its chances of substantially improving the long-term budget outlook.

On the revenue side, there is superficial good news. In CBO’s estimate, revenue under current law will grow from 18.4 percent of GDP this year to 19.1 percent in 2053. That would exceed the past 50-year average of 17.2 percent and roughly keep pace with the increase in primary spending. But there is a significant glitch in the current law revenue projection: It assumes a substantial boost beyond 2025 with the scheduled expiration of many tax cuts enacted in 2017.

According to CBO, extending these tax cuts (and if history is a guide there will be great political pressure to do so) would drive revenues lower relative to the baseline by about 0.8 percent of GDP on average. In other words, it’s quite likely that revenues will flatten or even fall as a share of GDP over the next 30 years. 

Theoretically, the primary deficit could be closed all on the spending side or all on the tax side but neither of these outcomes stands the slightest chance of being supported by the public or being enacted by politicians wishing to be reelected.

While reforms should be enacted that would reduce the long-term growth in federal spending, it is unlikely that any realistic array of reforms would allow an aging society to keep spending from rising. What might have been adequate revenues in past years will not be sufficient in the face of growing commitments to the elderly.

Higher economic growth would help, but no realistic level of growth would be enough by itself to close the expanding budget gap. Here again, population aging is a factor. Labor force growth, a key component of economic growth, is projected to slow by about three-quarters from the recent historical average as the population ages and fertility rates remain low. Mainly for this reason, CBO projects that annual real GDP growth will fall to just 1.5 percent by the 2040s. This compares to an annual rate of 2.4 percent from 1993 to 2022. 

So there are some intractable problems for a new fiscal commission to address: population aging, rising healthcare costs, slowing workforce growth, stagnant revenues, and spiraling interest on the debt. A fiscal commission that does not get at these root causes by putting everything on the table will not be able to solve the problem.

Robert L. Bixby is executive director of The Concord Coalition.

This new proposal would also do something more fundamental, though, that we haven’t seen before. It would require the Securities and Exchange Commission (SEC) to consider how everything it does could impact innovation. If enacted, this would eviscerate securities regulation as we know it. 

The SEC was formed in 1934, after a post-World War I speculative frenzy culminated in the stock market crash of 1929, and thousands of people lost their life savings. The financial markets of that era were rife with worthless assets supplied by unscrupulous dealers who did not provide any meaningful disclosure. The SEC was created to implement a new investor protection regime focused on registration and disclosure requirements and anti-fraud provisions.  

These investor protections would be jeopardized by the House Republicans’ new proposal. Already, superficially neutral requirements for the SEC to analyze the costs and benefits of its rules are weaponized in the courts to undermine the SEC’s rulemaking process, even though those requirements are a very poor fit for financial regulation. If the SEC were given a new innovation mandate, it would be a new and potent tool for attacking SEC rules. Litigants will argue that these rules should be struck down for impeding their innovations. But the SEC wasn’t created to help private sector innovators. The SEC was created to protect the public from harm.   

Innovation is often but not always a positive force. As a society, we have become overly credulous of technological innovation in particular, and we tend to overlook its limitations and harms. But let’s be honest — most technological innovation is not done for the purpose of making the world a better place. It is done for the purpose of making money for innovators and their investors. That is not always a win-win proposition for society as a whole.  

Sometimes, making money means ignoring or breaching regulations designed to protect people from harm. Sometimes it means actively lobbying to get those regulations changed, arguing that your innovation is so “paradigm-shifting” that the old rules shouldn’t apply.

For example, the prominent venture capital firm Andreessen Horowitz realized several years ago that “Delivering significant returns on all [their crypto] investment…would necessitate playing a major role in shaping rules for these companies,” the New York Times recently reported. Intense lobbying followed, leading to legislative proposals like the one we now see before us. 

Ultimately, technology is only a tool, and the lessons we have learned over decades (sometimes centuries) about how people can harm one another remain relevant even as the tools available for inflicting harm become more sophisticated. And so many of the rules addressing those harms also remain relevant.  

Back in 1946, the Supreme Court recognized that the securities laws were flexible enough to adapt “to meet the countless and variable schemes devised by those who seek the use of the money of others on the promise of profits.” These laws shouldn’t be discarded just because they do not accommodate the business models of the latest wave of innovators — especially if those business models are predatory or rife with conflicts of interest.  

Last month, OceanGate’s Titan submersible imploded, killing OceanGate’s CEO Stockton Rush and four passengers. In June 2019, Smithsonian Magazine had published an article on OceanGate and Rush, saying Rush believed that regulation was well-meaning, “but he believes it needlessly prioritized passenger safety over commercial innovation.” 

“There hasn’t been an injury in the commercial sub industry in over 35 years,” Rush told the Smithsonian. "It’s obscenely safe, because they have all these regulations. But it also hasn’t innovated or grown — because they have all these regulations."

This insight into the mindset of an innovator should give us pause. Of course, we need innovators in our society, but we also need pushback against those innovators when the public is at risk. And how can the SEC meaningfully push back against investor harm if Congress requires it to nurture private sector innovation?   

Rush’s hubris won’t soon be forgotten in the world of marine exploration, but it should also be a general wake-up call. We need a broader reckoning with the relationship between innovation, harm and regulation. As a start, Congress should refuse to pass any legislation that requires the SEC, a regulator created to protect investors from harm, to sacrifice those investors on the altar of innovation.

Hilary J. Allen is a professor of law at the American University Washington College of Law.

The recently released data from its flagship household survey, called the Survey of Income and Program Participation, highlight the importance of social safety net programs to Black Americans. In particular, the data illustrate the importance of the Supplemental Security Income (SSI) program to African Americans.

SSI, which is run by the Social Security Administration (SSA), pays benefits to children and adults with severe disabilities as well as to the elderly. The program provides benefits to low-income families with few resources and generally guarantees access to vital health benefits through Medicaid.

The new Census data indicate that 400,000 Black children with disabilities receive safety net benefits from SSI. About 1.6 million African American adults with disabilities are helped by the program, along with 500,000 elderly Black individuals.

Some striking statistics are revealed in the new Census data. Black children account for about 15 percent of the child population in America, but account for 39 percent of children on SSI. Among working-age adults and the elderly, Black Americans are about three times as likely as White Americans to receive SSI.

What explains the disproportionate receipt of SSI among Black Americans? Years of discrimination have led to wide disparities in income and health outcomes by race in the United States.

These two issues — income and health — are often discussed as separate topics, but poverty and severe health problems often occur together. As such, the SSI program, which pays benefits to low-income persons with severe health problems, is one of the most effective means by which the country can mitigate the hardship experienced by many African Americans due to a long history of discrimination.

Further, because of policies that had clear racial motivations, such as the dismantling of the AFDC program in the 1990s, SSI is one of the few government programs still around that is robust enough to provide meaningful income assistance to families in need.

The new Census data also reveal that SSI is especially important for some economically vulnerable subgroups of the population and race, again, is an important factor. Among African Americans in their 50s and early 60s who did not graduate from high school, about 30 percent receive safety net assistance from SSI. The corresponding figure for white Americans is 12 percent.

Looking at subgroups within the new Census data also yields some surprises. The SSI program for the elderly, in particular, serves one of the most diverse groups in America. Fifteen percent of these SSI recipients are Asian American, 29 percent are Hispanic, and 23 percent are African American. Much like the CBC, the Congressional Asian Pacific American Caucus and the Congressional Hispanic Caucus should have a strong policy interest in the SSI program.

There is an opportunity for the Congressional Black Caucus and others to strengthen SSI. The first, most basic, step is to increase the SSI benefit to the official poverty level. Currently, the maximum federal benefit rate for an individual on SSI is $914 per month, which is $300 lower than the amount needed to prevent poverty for an individual according to the official standard of the United States government.

Having an anti-poverty program with a maximum benefit below the poverty level is something close to a technical flaw in the program that needs to be addressed. But more than that, it highlights a principled policy argument for the CBC and others to make — namely, that no American who is too disabled or old to work should live in poverty.

The SSI program needs attention from lawmakers for other reasons. Congress has systematically starved SSA of administrative funding needed to run the program. As a result, hundreds of thousands of children, adults and seniors who are eligible for SSI do not receive the benefits they are due under current law. It would be helpful if Black lawmakers actively engaged the appropriators in Congress and directly expressed their concerns and expectations about fair treatment of vulnerable citizens.

In addition, lawmakers need to examine some of the antiquated features of SSI. Resource limits for program eligibility have not been increased in decades. Recent analysis finds that these limits do not save the government much money, but rather simply prevent SSI recipients from accumulating even modest savings.

There are good public policy reasons for the CBC to advocate for strengthening the SSI program. Further, without sustained interest and energy from Black lawmakers, improvements in SSI will simply not happen. President Biden proposed improvements to the program as part of his Build Back Better initiative, but his package of proposals did not receive serious consideration even in the Democratically controlled 117^th Congress.

The lack of progress on SSI improvements may stem from political fears among some Democrats. Many Democrats, no doubt, remember the political success congressional Republicans had in curtailing assistance to families with dependent children in the 1990s. But SSI is somewhat different in that only older Americans and those with severe disabilities qualify. Arguments that these individuals should seek employment as a means of escaping poverty will, definitionally, fall flat.

Perhaps of more importance, times have changed. The rise in political power of African Americans is unmistakable, both within the Democratic Party and more broadly.  A principled SSI policy, advocated over the long-term by Black lawmakers, could eventually do something historic: end poverty among disabled and elderly Americans.

David A. Weaver, Ph.D., is an economist and retired federal employee who has authored a number of studies on the Social Security program. His views do not reflect the views of any organization.

While economists debate whether the glass is half empty or full, the public’s verdict is clear. Americans are strikingly pessimistic about the nation’s economy, with only 30 percent describing it as good.  

The White House thinks it’s found just the thing to lift the country’s glum spirits — a new economic doctrine. In recent weeks, President Biden and his advisors have been touting “Bidenomics” as a bold new departure from the “trickle-down” theories that supposedly held sway over the past 40 years. 

This grandiose claim hardly seems fair to the Democrats who occupied the White House for 16 of those years. Did the Obama-Biden administration really embrace the tax-cutting, trickle-down policies of Ronald Reagan and subsequent Republican presidents? 

It also strikes a jarringly self-congratulatory note at a time when middle and low-income Americans are struggling with high living costs. The political class may find dueling economic doctrines scintillating, but what working families want is relief from hefty price increases for everyday goods and services that are gouging holes in their disposable income. 

Instead, Bidenomics seeks to change the subject by focusing public attention on Biden’s big public investments in economic infrastructure, clean energy and silicon chips. These are impressive achievements, though their real-world effects are only beginning to be felt.  

Team Biden has fanned out across the country to highlight new construction and broadband projects. He’s clearly having a grand time doing that in red states and districts represented by Republicans who voted against his big bills, but now want to share credit for their results. 

GOP hypocrisy aside, the president can rightly say that the U.S. economy is in much better shape now than when he took office in 2021. The COVID recession is behind us, the jobless rate (3.6 percent) is at a 50-year low, and wages are growing briskly — up 4.4 percent in June.   

If any economic theory is at work here, however, it’s not Bidenomics but good old-fashioned Keynesian economics. Biden went big on fiscal stimulus, signing into law (and executive actions) over $4 trillion in federal spending for COVID relief, infrastructure, rural broadband, semiconductor research and development, clean energy subsidies and more.  

All this pump priming goosed demand and sped economic recovery. Running the economy “hot,” however, has downsides. Inflation is a global phenomenon, but studies show that Washington’s spending surge contributed significantly to soaring prices here. It’s also created colossal federal deficits expected to average about $2 trillion a year over the next decade.  

To cool off the economy, the Federal Reserve has raised interest rates 10 times since March 2022. That’s helped push the core inflation rate down from over 9 percent a year ago to around 5 percent. But the Fed’s target is 2 percent, so it will likely have to keep bumping up interest rates just enough to avoid tipping the economy into recession.  

It's a delicate balancing act. Higher interest rates will further tighten credit for consumers, businesses and homebuyers, slowing economic growth. They’ll also drive Washington’s borrowing costs through the roof: By decade’s end, interest on the national debt is expected to exceed defense spending. 

Bidenomics doesn’t confront these fundamental economic challenges. Instead, by extolling the administration’s “unprecedented investments,” its aversion to expanding trade and its embrace of industrial policies to seed new green tech industries, it offers what one progressive admirer calls a “muscular, government-forward approach” to equitable and green growth.  

What makes Bidenomics attractive to progressive elites, however, risks severing it from working-class aspirations for lower prices and housing costs and more abundant economic growth. Just 34 percent of the public approves of Biden’s handling of the economy. Voters also give Republicans a 12-point advantage when asked which party they trust on economic issues.   

As he takes credit for the payoffs from his big investments, Biden would be wise to use his famous empathy to continually acknowledge the bite high prices are putting on household budgets.   

He also should put credible ideas for lowering inflation and debt at the center of Bidenomics. One way to show he’s serious would be to abandon attempts to resurrect his costly ($400 billion) and ill-targeted student debt cancellation scheme. Another would be to set up an inflation commission to rebuild the nation’s fiscal reserve and “right-size” policymakers’ response to future recessions.  

Other anti-inflation and pro-growth steps could include relaxing Buy American provisions; lifting the Trump tariffs that raise the price of imported goods, rekindling digital trade talks with the U.K., Europe and Asia, and pushing Congress to pass permitting reforms to speed up the glacial pace of building new infrastructure and clean energy projects. 

A serious examination of market concentration is welcome, but the president should instruct his regulators to stop waging war on the most robustly competitive and innovative part of the U.S. economy: the digital e-commerce sector. As documented by Progressive Policy Institute chief economist Michael Mandel (I am president and founder of Progressive Policy Institute), the high-tech sector has kept prices low and has been the most prolific source of good new jobs for U.S. workers.  

Above all, in selling Bidenomics the White House should aim at the right target. The people Biden needs to persuade aren’t progressive activists but the swing voters who will decide the next election — suburban independents and moderates repelled by GOP extremism, whites and Hispanics without college degrees and voters who live in export-reliant rural areas.  

What might move more of them into the Democratic camp isn’t the “reframing” magic of Bidenomics, but the felt experience of falling prices, more affordable housing, real wage gains and faster economic growth.

Will Marshall is president and founder of the Progressive Policy Institute (PPI).

Last month, Comcast shareholders voted on just such a “China risk report,” following similar proposals at Apple, Disney, McDonald’s, Boeing, Intel, General Motors and Walmart this year. The proposals address a critical business threat that companies have generally overlooked. But such measures registered just single-digit support — largely because asset managers like BlackRock, State Street and Vanguard are unwilling to set their own China-related conflicts of interest aside.

Operating in China is risky business. The country’s decision-making is opaque, particularly after President Xi Jinping secured his norm-breaking third term last year. China’s zero-Covid policy shuttered retailers and manufacturers, upending supply chains; its abrupt reopening caught businesses equally unprepared. Its economic coercion strategy seeks to keep America dependent on the country for raw materials, manufacturing and market access.

China’s censorship policies have proven similarly challenging: when an NBA general manager tweeted support for Hong Kong, the Chinese Communist Party (CCP) retaliated by halting game broadcasts; when tech companies refuse to censor protests, the CCP blocks them; when H&M challenged China’s use of forced labor in Xiangjiang, the CCP erased the company from China’s internet.

These policies directly impact shareholder value. China’s decision to disappear H&M led China-based sales to drop 40%. Its Shanghai factory lockdown caused Tesla to miss vehicle deliveries, plunging share prices 12%. Its private tutoring ban caused U.S.-traded New Oriental’s shares to plummet over 90%.

Shareholders are asking questions, demanding to know how enmeshed American corporations are in China and what risks such investments pose. American companies currently disclose little about China risk, often burying a generic line or two in annual filings. Walmart, for instance, mentions China just once in discussing material risk factors, stating that “our international operations subject us to legislative, judicial, accounting, legal, regulatory, tax, political and economic risks” and that “we operate our business in Africa, Argentina, Canada, Central America, Chile, China,” etc. Which particular risks affect which countries is anyone’s guess.

Such reporting should not be controversial. An overwhelming 97% of Republicans and 90% of Democrats recognize that China’s economic power threatens the United States, and equal numbers of each party support challenging China’s human rights abuses even at an economic cost. Congressionally, laws countering Chinese economic power — the CHIPS Act promoting semiconductor manufacturing on U.S. soil, the Uyghur Forced Labor Prevention Act banning imports of Chinese goods made with forced labor — have enjoyed substantial bipartisan support. In the shareholder advocacy realm, China risk reports have had the backing of both right- and left-leaning groups.

Yet support at the corporate ballot box is wanting. Recent proposals asking for China risk reports have received less than 5% of the vote. They fail for a simple reason: most investors don’t vote their own shares. Instead, they’re voted by large asset managers like BlackRock, Vanguard and State Street — the “Big Three.”

At first blush, China risk reports seem right up their alley. The Big Three have been pushing ESG reports for years, demanding detailed disclosures on climate risks, water risks, and the risks of not having at least two women on company boards.

Why won’t the Big Three ask American companies to issue China risk reports? Because they are also dependent on China.

BlackRock made headlines for lobbying Washington on the CCP’s behalf while seeking its approval to launch mutual funds in China. State Street attempted to placate the CCP by excluding American investors from a Hong Kong–listed fund that included Chinese companies. Vanguard operates a financial advisory joint venture in China and “maintains its long-term commitment to the China market.” When the House Financial Services Committee held a hearing on the risk China poses to U.S. investors, no one from Wall Street was even willing to testify.

The Big Three simply will not gamble on drawing Chinese ire, despite the risks their portfolio companies face. Disney’s Shanghai resort, for example, is majority owned by the CCP; should President Xi decide Disney displeases him, its $5.5 billion investment would disappear. General Motors similarly jointly owns “Shanghai GM” with a Chinese state-owned entity, yet discloses little about that entity’s risks as geopolitical tensions rise. McDonald’s operates over 4,500 stores in China yet is mostly silent about vulnerabilities there. These companies release hundreds of pages of sustainability reports, social responsibility reports and impact reports throughout the year; a single report on China risk isn’t too much to ask.

These companies need to manage China risk now, before a potential complete decoupling of the U.S. and China occurs, as it could if China invades Taiwan. American semiconductor companies, for example, should assess their dependence on the Taiwan Semiconductor Manufacturing Company to produce their chips and diversify their supplier base accordingly, just as Nvidia is planning to do.

Despite the benefits, diversifying away from China is simply not a message the Big Three are willing to send. Instead, they quietly vote “no,” and issue pro-forma statements that “the proposal is not in shareholders’ best interests” — or say nothing at all. But while the CCP may be able to buy certain asset managers’ silence, it cannot silence shareholders themselves. Hopefully, the proposals alone will send the message: China risk is business risk, and one for which American businesses should be prepared. 

Justin Danhof is the head of corporate governance at Strive.

On June 28, President Biden stood in front of Bidenomics banners to tout his achievements for the U.S. middle class. And, as he has done with any glimmer of good economic data, he followed that up on July 7 with what was effectively a self fist bump, touting new jobs numbers. 

Still, two out of three voters disapprove of his economic performance, and no wonder — roughly two-thirds of American households are living paycheck to paycheck and/or skipping purchases they can no longer afford. 

Is employment as good as the president claims? Yes, if you ask the Federal Reserve. No, if you look at the majority of Gen Xers who are still underemployed or can’t find jobs that make ends meet. More than one-third of Americans are out of the workforce, with this problem particularly acute for women in general and minority women in particular. Will Black voters turn out for Biden or stay home as they did in 2016, when Hillary Clinton told them the economy was in a good place, but Black Americans didn’t find themselves anywhere close to it? 

“Robust” employment looks even worse when one looks at wages — the reason most people work. As of Wednesday, it cost $121 to buy what once cost $100 at the end of 2019. Looking at inflation-adjusted wages — not the nominal data the president prefers — the bottom 50 percent of American households would need to earn $5,000 more just to buy the same things it could the year before the pandemic. 

Most Americans also don’t feel the "progress" against inflation on which rests Bidenomics’ putative appeal. According to the Fed’s most recent study of economic well-being, the percentage of Americans saying that they were doing worse than the year before rose to the highest level since the Fed’s survey began in 2014. 

And no wonder. American wealth inequality is at one of its highest levels since the Fed began calculating it in 1989. Income inequality has improved a bit in recent years due to nominal increases in labor income, but overall income disparities remain pronounced. The top one percent takes home $2 million in average post-tax income versus the bottom 50 percent’s average of $39,274. Even before inflation really took off, a survey in January 2022 found that Americans thought they needed $128,000 in income to feel financially secure. 

Biden is trying to persuade voters that happy times are here again. This was a hard campaign promise even from an orator as awesome as Franklin D. Roosevelt. Failing a sudden macroeconomic miracle, the only way Joe Biden can persuade Americans that he’s on their economic side is to understand the side they’re actually on and then target a critical source of persistent economic inequality by holding the Federal Reserve accountable for its manifest, manifold mistakes.

Karen Petrou is the managing partner at Federal Financial Analytics, Inc. and the author of “The Engine of Inequality: The Fed and the Future of Wealth in America.”

When these jackpots soar, ticket sales soar with them, further pushing the jackpots higher and helping the lottery agencies make even more profit.

Using data on past Mega Millions drawings, when the jackpot is low — typically at or near its starting point of $20 million — around six to 10 million tickets are sold for each drawing, including “Just the Jackpot.” On April 14, 2023, when the jackpot hit $476 million, around 24 million tickets were sold. On Jan. 13, 2023, when the jackpot hit $1.348 billion, around 173 million tickets were sold. With both jackpots over $500 million, the one that remains unwon the longest will likely reap the highest sales afterward.

But is it a good idea to buy tickets when the jackpot gets this large?

Given the long odds of winning, it only makes sense to buy a ticket when the jackpot is extremely large. With so many tickets purchased, the likelihood of sharing the prize is greater than when the jackpot is smaller and fewer tickets are sold. Splitting $500 million with three people results in more money than winning $20 million by yourself.

Of greater concern is the possibility, albeit small, of actually winning the jackpot.

Most winners opt for the lump sum, which is a mistake. Having a steady stream of income for three decades is financially comforting and secure. It also reduces the burden of managing a large payout, with all its investment and tax responsibilities.

When the jackpot is $20 million, the first annual payout is $300,000, growing by 5 percent each year until it reaches just over $1.2 million in the final year (the 30^th payout). This first-year payout would put the winner in the top five percent of all wage earners in the nation. Most people would live quite comfortably with such an income.

When the jackpot hits $200 million, these annual payouts are scaled up by a factor of 10 (starting at $3 million in the first year with the final year payout at $12 million). This places the winner in the top 0.1 percent of earners. Move the jackpot up to $1 billion and the numbers scale further up by a factor of five.

For most people, having access to an income of millions of dollars per year is beyond anything that they have experienced in their lifetime. This explains why some lottery winners struggle after their big win. Many find the adjustment to their newfound wealth challenging at best or overwhelming at worst.

We have all heard the expression, “money cannot buy happiness”. Research has shown that some money can indeed buy happiness, but more money beyond a certain point is not necessarily better. Money can buy opportunities to travel, which give people experiences that can enrich their lives. Money can buy opportunities to get education, which gives people perspective that can give them fulfillment. Money can buy the opportunity to use your time how you wish.

What this means is that winning the lottery jackpot may improve your life, but winning it “too much” will not make it much better. Plus, if the money becomes a burden rather than a fuel for opportunities, it can become a hindrance and make people’s lives worse than they were before their big win.  

So now that the Powerball and the Mega Millions lottery jackpots have crossed the $500 million thresholds, the smart lottery players will sit on the sidelines until someone else wins the jackpot. The risk of actually winning, albeit infinitesimally small, is something to avoid.  

Of course, the biggest winners are those who never play the lottery. Only around 60 percent of the money spent on lottery tickets going for prizes, and the rest are kept by the lottery agencies and commissions who run and sponsor them. This means that eery lottery ticket not bought is money won by the non-player. To such people, I commend your wise choice and applaud you in your smart decision.

Sheldon H. Jacobson, Ph.D., is a professor in Computer Science at the University of Illinois Urbana-Champaign. A data scientist, he applies his expertise in data-driven risk-based decision-making to evaluate and inform public policy

One example is Adidas’s decision to sell its leftover "Yeezy" sneakers, allowing Kanye West to profit despite his series of gross antisemitic comments last year. The Yeezy brand became a lucrative cornerstone for Adidas and was hailed as the most successful sportswear collaboration since Michael Jordan teamed up with Nike. Despite officially ending its relationship with the rapper over his ugly antisemitic comments, the German sportswear company recently announced that it would continue to sell the Yeezy athletic shoes in stock, donating a portion of the profits to groups representing people who had been hurt by West's remarks.

Adidas CEO Bjoern Gulden, called this “the best solution” because “it respects [Ye’s] created designs and the produced shoes, it works for our people, resolves an inventory problem, and will have a positive impact on our communities." Gulden added that "there is no place in sport or society for hate of any kind and we remain committed to fighting against it."

A noble statement, but the devil is in the details, particularly if the decision enriches a person who has helped propel Jew hatred into the mainstream.

Adidas has not publicly clarified what percentage of the proceeds would be donated as it sells off the inventory, the value of which has shot through the roof in recent months. The bottom line is that by selling the sneakers, Adidas will most likely improve its own bottom line.

Ye most certainly will improve his. The rapper already made over $25 million in just one day of sales. This windfall flies in the face of claims that the company cut ties with its creative originator over unacceptable comments. Ye did not apologize for his statements, which included “I like Hitler” and the threat to go “death con 3 on JEWISH PEOPLE,” but feebly claimed that he was not affiliated with any hate groups.

To state the obvious, one need not be associated with a hate group to peddle hate and contribute to the frightening rise in antisemitism in this country. 

In its pursuit of ever-greater market share and earnings, Adidas has forgotten that some things are worth more than money. It has also sent a message that it’s okay to profit from antisemitism and reinforced the notion that some amount of fame, talent or popularity can purchase social indulgence for malicious wrongdoings.

There is no denying that surplus inventory and losses can pose real challenges for companies striving to maintain profitability. Pressures to increase margins and satisfy shareholders can often cloud judgment. Even so, it is essential to maintain a steadfast commitment to principles that go beyond the bottom line.

It is disheartening, therefore, to witness companies crafting eloquent public relations statements espousing values and principles, only to abandon them when money is on the line. When principles are sacrificed at the altar of financial gain, a company treads perilously close to the treacherous waters of moral bankruptcy. A company’s reputation and credibility are not built solely on meticulously crafted statements of intent. True integrity lies in the actions and choices made when faced with dilemmas.

Adidas could use this moment to meaningfully raise awareness about the evils of antisemitism and other forms of hatred plaguing historically marginalized communities. The company could, for instance, donate the shoes to artists to redesign them into art or fashion that asks people to walk in the shoes of people targeted by discrimination and bigotry.

The burden of combatting hatred cannot rest solely on the shoulders of the communities being targeted and harassed, nor can the problem be solved through public relations campaigns or empty gestures. It requires a sustained commitment to systemic change and a genuine effort to commit resources to the effort.

Adidas may have found itself in the center of a public relations storm through no fault of its own, but it now has the power to decide for itself what comes next. This is the time to take a meaningful stand against antisemitism.

Aviva Klompas is CEO and co-founder of Boundless and can be found on Twitter @AvivaKlompas.

For nearly a century, homeownership has been the largest source of wealth for most American families. Safe, traditional mortgages have been pivotal to achieving financial security and independence. But as home prices and rents skyrocket — and because outdated policies make small mortgages expensive for lenders and often unavailable for borrowers seeking low-cost homes — many families are struggling to afford reliable housing. 

This is a serious problem for people across all demographics, but Black, Hispanic, rural and Indigenous households are particularly affected. And some have turned to riskier and more costly alternative financing arrangements, such as land contracts, seller-financed mortgages, lease purchases and personal property loans.

Approximately 36 million Americans have used such arrangements to purchase a home. They are pitched to potential homebuyers as a pathway to homeownership when traditional mortgages are not available. But they often result in borrowers not achieving their goal of owning and can hurt their future homeownership and wealth-building opportunities.

To examine the barriers that borrowers face when trying to purchase safe and affordable homes, The Pew Charitable Trusts studied various alternative financing arrangements. One of the most important differences among these arrangements is the question of when the buyer receives full legal ownership of a property. In mortgage transactions, the deed — and therefore, full ownership — is typically given to the buyer at closing. However, in a land contract, for example, the seller keeps the deed and retains legal title to the property for the duration of the financing term, while the borrower typically holds what is called "equitable title." This can create ambiguity about the buyer’s rights and responsibilities, such as who pays for taxes and upkeep, and lead to quick evictions that strip buyers of any potential home equity.

Financing challenges aren’t the only roadblock to homeownership. Many Americans who want to own a home are only able to rent for now. And as rents continue to climb, many of these are finding it difficult to save for a down payment in order to get on the path toward ownership. This comes against the backdrop of a national housing shortage, stemming largely from strict zoning and land-use policies that make it harder and more expensive to build new housing, which results in higher rents and puts homeownership further out of reach.

Pew has examined several jurisdictions that updated their zoning codes to allow more housing and found that this flexibility helped these jurisdictions add new housing stock faster than new households were being formed. And while rent remains detrimentally high in many communities throughout the country, this research shows that communities updating their zoning laws in this manner kept rent growth to less than 7 percent over the most recent six-year period, even as rents rose by 31 percent nationally.

The housing shortage is a major driver of both inflation and homelessness, placing a heavy financial burden on Americans from all walks of life. There is no one solution for U.S. policymakers, but helping people obtain safe and affordable home financing is a good start toward ensuring that households capable of handling a mortgage can obtain one.

Zoning reform that allows more housing to be built is also a necessary step in solving the housing crisis and ensuring that everyone has a roof over their heads.

Alex Horowitz is a project director with The Pew Charitable Trusts’ housing policy initiative.

The trade data over the past two years shows steady growth, even in the midst of recovery from a pandemic and the global tumult caused by the Russian invasion of Ukraine. Total U.S. trade with Canada and Mexico was a record $1.78 trillion in 2022, an increase of 27 percent over 2019 levels. For comparison, total U.S. trade with China in 2022 increased by just 20 percent over the 2019 level.  

The investment picture is less clear. North American nearshoring/reshoring is on the rise as measured by the 2022 Kearney Nearshoring Index, which found a 78 percent increase from 2021 to 2022 in the number of CEOs evaluating reshoring their operations, moving to reshore, or having already reshored production. The Kearney index found that geopolitical risk was the leading factor in the surveyed CEO’s reshoring decisions. And shifting U.S. supply chains away from China to friendly countries has been broadly popular, with 7 in 10 respondents to a 2022 survey by the Chicago Council on Global Affairs supporting “friendshoring.” This has translated to bipartisan support for the concept. 

Yet private sector foreign direct investment in the three USMCA countries is still lower than the OECD average. It is public sector investments in incentives that are fueling decarbonization and energy transition trends today, which makes the fact that the Biden administration has worked to give Canadian and Mexican firms access to the investment incentives of the Inflation Reduction Act and the CHIPS and Science Act, a strong indicator of United States support for North American production and supply chains.  

Economically, the USMCA has come a long way in just three years. Though the North American Free Trade Agreement (NAFTA) remained politically controversial in all three countries throughout its lifespan; USMCA has proven far less divisive, even in today’s polarized political environments. Since USMCA was ratified, national, legislative and/or executive elections have been held in all three countries — Mexico in 2021, the U.S. in 2020 and 2022 and Canada in 2021). In none of these elections was trade a major issue. In our country, support for USMCA hit 80 percent in 2021 according to a Chicago Council on Global Affairs Survey, a dramatic improvement since the 45 percent who supported the NAFTA in 2008.  

This should be a good sign that the three countries can agree to add new provisions and enhance the USMCA during the mandated six-year review in 2026. However, a small number of current disputes could undermine support for extending the agreement. 

Since the agreement’s entry into force, disputes have arisen over the automotive rules of origin, Mexico’s energy policies, Mexico’s ban on GMO corn and Canada’s implementation of dairy market access commitments. Though USMCA’s dispute settlement mechanisms are more limited than those found in NAFTA, their application and stakeholder perceptions of their efficacy remain a critically important metric of success.  

One important test has been a USMCA panel convened to settle a dispute over the U.S. interpretation of the automotive rule or origin and the formula for calculating it. The U.S. position was more restrictive than either Canada or Mexico would accept, and a 2022 panel found that the U.S. position was wrong. Yet, neither Mexico nor Canada has demanded that the U.S. correct its erroneous interpretation of the agreement nor has either implemented retaliatory measures to which they would be entitled.  

In energy, the U.S. and Canada sought formal consultations but have not requested a formal panel despite the lapsing of the required time period following the initiation of the formal consultations. The U.S. requested a formal panel against Mexico’s GMO corn ban only on June 2; Canada joined the request a week later.  

A number of disputes under the USMCA’s innovative labor rapid response mechanism, which was designed to address substandard wages or worker rights protections (principally in Mexico), have been initiated. The vast majority of the cases relate to the auto industry — one of the most important sectors in North America and a major beneficiary of North American integration. While the labor rapid response mechanism has seemingly addressed labor concerns in the automotive sector, its utility outside the auto industry remains to be seen. 

Disputes and the way in which they are managed could eventually erode the strong support for the USMCA. Agreements are, at the end of the day, only worthwhile if the signatories abide by their terms. The United States, Mexico and Canada risk undermining public support for the USMCA if disputes remain unresolved, or if the finding of a USMCA panel is ignored. 

After three years, the USMCA continues to pay off for all three countries at a time of global economic uncertainty and geopolitical stress. There are issues and areas of concern that, if left unaddressed, could sour leaders or voters in the three countries on the USMCA. For now, however, we continue to see the USMCA as a winning bet for North American competitiveness and productivity. 

Andrew I. Rudman is the director of the Mexico Institute at the Woodrow Wilson International Center for Scholars. A former foreign service officer and director of the Office of NAFTA and Inter-American Affairs at the Commerce Department, he has worked on Mexico and U.S.-Mexican relations throughout his public and private sector careers. 

Christopher Sands is the director of the Canada Institute at the Woodrow Wilson International Center for Scholars and an adjunct professor at Johns Hopkins University’s School of Advanced International Studies.

The issue is Google's monopoly on search and advertising. Cruz, Warren and a bunch of other legislators are sponsoring a new bill called the AMERICA Act, which, in effect, wants to force Google — and a few other tech giants — to divest major parts of its business. 

Will this bill succeed? I hope so. Because the more I advertise on Google, the more I don't trust Google.

In my opinion, Google is using its monopoly power to trick small-business owners like me into believing that spending money on Google Ads will provide tangible results. It doesn’t.

Over the past 10 years, I've spent tens of thousands of dollars advertising on both Google and YouTube (which is owned by Google’s parent company, Alphabet). I've employed and contracted with individual "Google Certified" consultants and larger advertising firms. I’ve attended conferences, read books, watched videos and talked to Google "experts." I've tested countless ads in countless ways over countless periods of time. I created fast-loading landing pages and SEO optimized my website. I've run multiple campaigns that offer free services, white papers and book downloads, among other "calls to action."

The results? Not great.

My best performing ads draw mostly bots to my website. Thanks to AI, my efforts to limit these fraud accounts from filling out my forms with “CAPTCHA” and other controls fail to stop the fake people with fake names from fake galaxies. When I run Google Ad campaigns, I see an increase in spam emails and robo-calls to our main office number.

The internet is the internet, but what troubles me more is that Google's numbers never seem to add up. I'm told that my ads get hundreds of thousands of "impressions," which is not only irrelevant (I care only about leads) but a dubious metric at best, because who’s coming up with that number? Why Google, of course!

Google, without any supervision or oversight, charges me every time someone clicks on my ad, and yet the views on my landing page don't come anywhere near the number of those clicks. Where are these clicks going? Shouldn’t these numbers be the same? Add that to the many mysteries that go unanswered by the Google Gods.

This is what really sows doubt in my mind — and I know I'm not alone. All of the metrics — the views, the clicks, the impressions, the whatever — are generated by Google, which charges me based on those numbers.

I have absolutely no way to prove that these numbers are real or fake, accurate or misleading. Even the numbers on Google Analytics, which measures activity on my site, don’t correlate to my Google Ad results. Imagine taking someone’s money up front by promising future services and then drawing it down at your own will and whenever you determine that the service has been performed, without ever having to be accountable. That’s what Google does.

Small businesses like mine stand no chance advertising on Google. All the best keywords are taken by corporate giants who have the money and resources to pay Google so that their products dominate the first two search results pages. They, like any big brand, make a lethargic effort to show their support of small business with the obligatory web page and the occasional funding campaigns. But to me, these are empty gestures.

The one, small ray of hope lies with local listings on Google Business Profiles, which may attract potential customers to a small restaurant or retail shop that's nearby. But my Google Business Profile generates nothing for my B2B company.

What's even worse is that I’m convinced that there are no humans working at Google. I'm told that the company employs about 140,000 people, but go ahead — try to get someone from customer service on the phone, let alone someone who speaks English. Google has “small business consultants” who frequently reach out to me with advice on — surprise! — how to spend more money advertising on Google.

And God forbid if you reference anything in your ads that comes near to a political topic or controversial current event, or mentions any one of the company's ever-changing list of forbidden topics. Your campaign is immediately suspended. You’re now in advertising purgatory while you try to figure out what's wrong.

The support provided here is literally non-existent. I know this. I live this.

Is this hopeless for small businesses? Not entirely. Some do succeed on Google. That’s because they’ve dedicated full-time people to run and test campaigns and spent up to tens of thousands of dollars on their efforts; even then they have to pray to the Google Gods that they'll be miraculously noticed by the company's unfathomable algorithms and given a brief moment of glory for which to grab an eyeball or two, and perhaps even a few clicks.

This is not an impossible feat. But it's out of reach for most small businesses.

Google is clearly a monopoly and without competition. According to the most recent data I could find, Google search commands a 93 percent market share. (For comparison, YouTube commands a 75 percent market share of all online video platforms.) Its web browser (Chrome), email (Gmail), operating system (Android) and popular applications like Maps, Voice, Docs, Drive and Sheets work together to ensure that only those who are paying enough get noticed by their search audience. 

The fix is in. Small business with small budgets are out.

If you’re a small-business owner and still don't believe me that Google is a monopolistic scam, then go ahead: give Google Ads a shot. Maybe you’ll have better success than me. But I’m betting you won’t.

Which is why I’m rooting for Cruz and Warren — and I can’t believe I’m writing those names in the same sentence. Breaking the company up would increase competition and force its new individual entities to fight harder for its revenues. Only then would smaller businesses stand a chance.

Gene Marks is founder of The Marks Group, a small-business consulting firm. He frequently appears on CNBC, Fox Business and MSNBC.

A wobbly jobs picture — only 209,000 jobs were added last month, fewer than expected and far below the 278,000 added on average over the past six months — is just one of several reasons that the president’s current Bidenomics tour may end badly.  

First, most economists expect the country to slide into recession between now and the election in November 2024. The minutes of the Federal Reserve’s last meeting show the staff calling for a “mild recession” later this year. Some members look for unemployment to reach 5 percent by next year, up from 3.6 percent today.

How will Biden’s pitch go over with voters when unemployment is rising and people are being thrown out of work? Just as this administration has shown itself tin-eared about the pain caused by 40-year-high inflation, ignoring a slump in hiring will not go down well.

Second, “sticky” inflation — the fact that prices are still going up, albeit at a slower pace — means the Federal Reserve is not done hiking interest rates. Already the country has endured one of the most rapid rate-hiking cycles in history. Wall Street’s top-rated economist, Ed Hyman, has warned clients many times in recent months that such an upward trajectory of interest rates almost always causes a financial or economic shock, like the collapse of Long Term Capital Management in 1998.

This year saw three of the biggest bank failures in American history. Hyman suggests more disruptions could occur. That will be on Biden’s plate.

Third, and conceivably most threatening to Biden’s hopes, those much-ballyhooed job gains may not be real, and the employment picture may not be as solid as it looks. If in coming months the numbers are revised sharply lower, Republican opponents will have a field day. Indeed, we may have seen some indication of that in the June report, in which the jobs total for April and May was revised lower by 110,000.

Several analysts have been warning of just such downward revisions and that the tight jobs market is softer than it looks.

Among those highlighting doubts about the jobs figures and about hiring overall is the Federal Reserve. In the just-released minutes from the most recent Federal Open Market Committee meeting June 13-14, participants noted that some “measures of employment—such as those based on the Bureau of Labor Statistics’ household survey, the Quarterly Census of Employment and Wages, or the Board staff’s measure of private employment using data from the payroll processing firm ADP—suggested that job growth may have been weaker than indicated by payroll employment.”

Those comments echo a recent report by Bloomberg economist Stuart Paul, who wrote, “We think the last several months of payrolls estimates will ultimately be revised down.” He suggests the revisions could total 900,000 jobs when the final figures are released in September.   

Paul’s skepticism reflects the possibility that the Bureau of Labor Statistics (BLS) is likely overestimating the increase in jobs stemming from new business startups. Moody economist Mark Zandi also thinks the jobs number is overstated and that job gains have actually averaged 150,000 to 200,000 per month, as opposed to the 283,000 on average reported for the past three months.  

The birth-death model is an estimation of the number of jobs created or lost by new startups. In May, for instance, the government reported 339,000 new non-farm jobs added; the birth-death estimate was 231,000. Without that “guesstimate,” new job additions would have totaled 108,000. In April, the birth-death number was even higher, at 378,000, a big factor in April’s 253,000 figure. Note that sometimes the figure is negative, as it was in January; the point is not that the government is cooking the books, but rather that the figures are not necessarily reliable.

As noted in the Fed minutes, another sign the jobs reports may be overstating reality has been the stark disparity between the household survey and the establishment survey. The BLS reviews businesses to assess payroll figures, while it estimates unemployment data based on a poll of households. The numbers have diverged considerably of late, with the May payroll number jumping 339,000, while household-reported employment falling 310,000. In June, the figures were better aligned, with both showing gains.

Another indicator that the employment picture is not as rosy as Biden suggests is a worrying drop in the number of hours worked, which suggests layoffs may loom and that the jobs picture could change for the worse. In May, the average workweek in the U.S. fell to the lowest level since before COVID caused wide-spread shutdowns of the economy. Hours worked have dropped in three of the past four months. In June, the trend reversed, with hours worked inching up 0.1 hour; the gain is not persuasive, especially since the recent report noted that “the number of persons employed part time for economic reasons increased by 452,000 to 4.2 million in June, partially reflecting an increase in the number of persons whose hours were cut due to slack work or business conditions.” 

With employers struggling over the past year to hire workers, some analysts think that businesses will resist firing people as long as possible, instead cutting back their hours to save on costs. In most segments of the economy, including manufacturing, retail, transportation and warehousing, hours worked have slumped.  

Overall, the jobs picture has become shaky; it may not develop as the White House hopes.

Ed Hyman has repeatedly warned that “everything is fine — until it isn’t.” Warning to Biden: celebrating Bidenomics is premature, and could be disastrous.

Liz Peek is a former partner of major bracket Wall Street firm Wertheim & Company. Follow her on Twitter @lizpeek.

Policies that support and protect working families vary greatly by country. How is the U.S. doing compared to its peers? 

Not well, according to new Oxfam research. The U.S. is falling drastically behind similar countries in mandating adequate wages, protections and rights for millions of workers and their families.

On the one hand, this doesn’t make sense. The U.S. is among the wealthiest countries in the world, by many measures: per capita wealth, per capita (after-tax) income and gross domestic product. And yet millions of workers are without access to paid leave, strong wages and protections in their workplace.  

This makes the U.S. a far outlier. Here, benefits like paid sick leave, paid parenting leave and employer-provided healthcare are viewed as privileges for the few. But in most of our peer nations, these privileges are rights, mandated by law to apply to all workers. 

Oxfam’s recent research consistently found the U.S. at or near the bottom of an index of economic peer countries — those belonging to the Organization for Economic Cooperation and Development (OECD) — when measuring labor laws on three dimensions: wages, worker protections and rights to organize. For example, the U.S. is the only nation in the OECD not to mandate paid leave of any kind; all other countries do so. The amount of paid parenting leave goes up to 43 weeks in Greece. Several countries, including Japan, South Korea and Spain, mandate paid menstrual leave.  

While the U.S. economy is certainly thriving, it is also wildly unequal. Last year, Oxfam found that nearly a third of the workforce in the U.S. — 52 million people — earns less than $15 an hour. These workers are doing jobs that are foundational to our economy, but they are locked out of sharing in the prosperity.

How did our economy devolve to the point that millions of workers are denied basic rights that are guaranteed in other countries? 

One major factor behind this exceptional situation is the long history of racism in the U.S. 

This racism has deep roots, from slavery to Jim Crow laws to New Deal laws that bent to Southern members of Congress and excluded large swaths of workers who were primarily Black. The Fair Labor Standards Act did not fully cover “exempt” agricultural workers and domestic workers and authorized a subminimum wage for tipped workers — workforces that are now disproportionately female, Black, Indigenous and other people of color, as well as immigrants and refugees. Oxfam found that while 32 percent of workers earn less than $15 an hour, half of all working women of color make less than $15; in some states, it’s nearly 70 percent. 

These workers continue to experience higher rates of poverty, more dangerous conditions and fewer opportunities and rights to organize and gain collective power. For just one example of how workers in low-wage jobs lack rights: Of earners in the top 10 percent, 96 percent have employer-provided paid sick leave; of earners in the bottom 10 percent, 38 percent have paid sick leave.

Naturally, those who can’t afford to miss a day’s wages are those earning the least; countless working families are struggling to care for households while working through illnesses and crises because they have been denied the privilege to prioritize taking care of themselves and each other.  

Our country has grown to accept that millions of working people are not worth protecting and supporting; we deny the basic humanity and dignity of people stuck in low-wage jobs. Even though these jobs, and the people doing them, are foundational to our economy and society. They are harvesting and cooking our food, caring for our children and elderly, stocking our shelves and cleaning our schools and offices.  

In other countries, these workers are guaranteed the basics for a healthy household; and these economies (and, it should be said, democracies) are thriving.  

We can and must do better if we hope to have a country that is decent, healthy and functioning for everyone. The current trajectory, which is condemning millions of people to poverty and frustration, is corroding our national well-being, and democratic institutions. 

Mikhiela Sherrod, Ph.D., is Oxfam America’s director of U.S. domestic programs.