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'Decades in the Making': Antitrust Advocates Celebrate as Jury Rules Against Live Nation-Ticketmaster
Minnesota Attorney General Keith Ellison called the verdict "a win for everyone who thinks concert tickets are too damn expensive."
Apr 15, 2026
Antitrust advocates celebrated on Wednesday after a jury found that Live Nation and is subsidiary Ticketmaster were illegal monopolies who for decades systematically overcharged customers for concert tickets.
As reported by The Associated Press, the verdict against Live Nation and Ticketmaster could cost the two entities "hundreds of millions of dollars, just for the $1.72 per ticket that the jury found Ticketmaster had overcharged consumers in 22 states," and they could be forced to sell off some of the venues they own.
The case against Live Nation, which was brought by 33 states and the District of Columbia, was initially led by the US Department of Justice. However, under President Donald Trump, the DOJ last month reached a last-minute settlement with the company that would not require it to be broken up.
The state attorneys general, however, vowed to see the case through and were rewarded with a big verdict in their favor.
New York Attorney General Letitia James celebrated the verdict, describing it as "a landmark victory to protect New Yorkers from harmful monopolies."
Minnesota Attorney General Keith Ellison called the verdict "a win for everyone who thinks concert tickets are too damn expensive," and declared himself "proud to have brought this lawsuit."
District of Columbia Attorney General Brian Schwalb noted Live Nation "has raked in billions in profits from an illegal monopoly that coerces venues, restricts artists, and exploits fans," and called the verdict "a massive win in the fight for fairness for local venues, artists, and fans."
Lina Khan, former chair of the Federal Trade Commission under President Joe Biden, hailed the verdict, but said it was just "a key first step towards ending Live Nation’s monopolistic control and securing real relief for those it harmed."
Lee Hepner, senior legal counsel at the American Economic Liberties Project, said the verdict was "decades in the making," and he cited iconic Seattle band Pearl Jam's fight against Ticketmaster in the 1990s to illustrate just how long it's taken to hold the company accountable.
"Pour one out for Pearl Jam, who testified before Congress in 1993 about Ticketmaster's abuse of the live concert industry," he commented.
The Roosevelt Institute took a shot at the Trump DOJ for bailing on the case, and noted the verdict against Live Nation "only happened because state AGs kept pushing after a federal settlement that let the companies off the hook."
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Economists Warn Trump Attack on Fed Will Further Jack Prices for Working Families
"Confidence that the Fed will respond wisely to future periods of macroeconomic stress... will evaporate," warned one economist.
Aug 29, 2025
Economists are warning that US President Donald Trump's efforts to meddle with the Federal Reserve are going to wind up raising prices even further on working families.
Michael Madowitz, principal economist at the Roosevelt Institute, said on Wednesday that the president's efforts to strong-arm the US central bank into lowering interest rates by firing Federal Reserve Gov. Lisa Cook would backfire by accelerating inflation.
"The administration's efforts to politicize interest rates—an authoritarian tactic—will ultimately hurt American families by driving up costs," he said. "That helps explain why Fed independence has helped keep inflation under 3%, while, after years of political interference in their central bank, Turkey's inflation rate is over 33%."
Heidi Shierholz, the president of the Economic Policy Institute, said that the president's move to fire Cook "radically undermines what Trump says his own goal is: lowering U.S. interest rates to spur faster economic growth."
She then gave a detailed explanation for why Trump imposing his will on the Federal Reserve would likely bring economic pain.
"Presidential capture of the Fed would signal to decision-makers throughout the economy that interest rates will no longer be set on the basis of sound data or economic conditions—but instead on the whims of the president," she argued. "Confidence that the Fed will respond wisely to future periods of macroeconomic stress—either excess inflation or unemployment—will evaporate."
This lack of confidence, she continued, would manifest in investors in US Treasury bonds demanding higher premiums due to the higher risks they will feel they are taking when buying US debt, which would only further drive up the nation's borrowing costs.
"These higher long-term rates will ripple through the economy—making mortgages, auto loans, and credit card payments higher for working people—and require that rates be held higher for longer to tamp down any future outbreak of inflation," she said. "In the first hours after Trump's announcement, all of these worries seemed to be coming to pass."
Economist Paul Krugman, a former columnist for The New York Times, wrote on his personal Substack page Thursday that Trump's moves to take control of the Federal Reserve were "shocking and terrifying."
"Trump's campaign to take over monetary policy has shifted from a public pressure to personal intimidation of Fed officials: the attack on Cook signals that Trump and his people will try to ruin the life of anyone who stands in his way," he argued. "There is now a substantial chance that the Fed's independence, its ability to manage the nation's monetary policy on an objective, technocratic basis rather than as an instrument of the president's political interests and personal whims, will soon be gone."
The economists' warnings come as economic data released on Friday revealed that core inflation rose to 2.9% in August, which is the highest annual rate recorded since this past February. Earlier this month, the Producer Price Index, which is considered a leading indicator of future inflation, came in at 3.3%, which was significantly higher than economists' consensus estimate of 2.5%.
Data aggregated by polling analyst G. Elliott Morris shows that inflation is far and away Trump's biggest vulnerability, as American voters give him a net approval of -23% on that issue.
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New Report Sheds Light on the Pitfalls of AI-Powered 'Gig Nursing'
"These apps are a symptom of broken healthcare infrastructure that is now victim to corporate takeovers. Failing to act on both fronts poses risks to our healthcare system and the workers who power it," wrote one of the researchers.
Dec 17, 2024
While gig work is fairly common in a number of sectors in the American economy, a brief released Tuesday by the progressive-leaning think tank the Roosevelt Institute details how the gig model now has its tentacles in the healthcare industry, and argues it is creating new hazards for workers and patients.
The brief, authored by Groundwork Collaborative fellow Katie Wells and King's College London lecturer Funda Ustek Spilda, sounds the alarm over "on-demand nursing firms" such as CareRev, Clipboard Health, ShiftKey, ShiftMed, and others which have gained traction by promising hospitals more control and nurses and nursing assistants more flexibility.
Practically speaking, these "new Uber-style apps use algorithmic scheduling, staffing, and management technologies—software often touted by companies as cutting-edge 'AI,' or artificial intelligence—to connect understaffed medical facilities with nearby nurses and nursing assistants looking for work," according to the brief.
The authors, whose research was largely based on interviews with 29 gig nurses, argued that these apps "encourage nurses to work for less pay," do not offer nurses clarity when it comes to scheduling and amount or type of work, are not sufficiently concerned with worker safety, and "can threaten patient well-being by placing nurses in unfamiliar clinical environments with no onboarding or facility training."
These platforms are also using the same tactics as the ride-hailing service Uber when it comes to lobbying state legislatures in order to shield themselves from labor regulations, according to the authors, who noted that larger hospital systems in the country have included gig nurses in their operations since 2016.
The researchers argued that while the rates on a platform like ShiftKey can be higher for nurses and nurses assistants, nursing on-demand platforms can create a race to the bottom for wages: "The nurses and nursing assistants who use these apps must pay fees to bid on shifts, and they win those bids by offering to work for lower hourly rates than their fellow workers."
When the nursing on-demand firms classify the workers as self-employed, nurses and nursing assistants are also exposed to higher risk because they are "excluded from the protections of local, state, and federal law on minimum wage, overtime pay, workers' compensation, retirement benefits, employment-based health insurance, and paid sick days."
Workers are also rated based on facility feedback and determinations made by the algorithm, and can be penalized if they cancel a shift because they are sick or have a conflict, per the report.
"In at least one case, a nursing assistant went into work at a hospital while sick with Covid-19 because she could not figure out how to cancel a shift without lowering her rating," according to the authors.
By way of background, the authors of the brief also argue that the often-invoked "nursing shortage" is actually misleading term. In fact, there is no shortage of available nurses and nursing assistants, but rather a "growing number of nurses and nursing assistants who refuse to accept chronically understaffed, underpaid, unsafe, and high-stress workplaces," according to the brief, which cites outside research.
In fact, many of the workers interviewed said they would continue working for nursing on demand services because broadly speaking they like the work. According to the brief, interviewees said "over and over again how important flexible schedules are to their lives, especially their own caregiving, be it for children, spouses, or elders"—though the authors of the study wrote that this does not mean the concerns expressed by the workers are not worth paying attention to.
The rise of gig nursing is taking place on the backdrop of increasing corporate ownership over the healthcare industry writ large, including the rise of private equity ownership of medical facilities and medical staffing agencies.
"Policymakers need to be proactive and step in to regulate these platforms and provide proper labor protections for all nurses, gig and non-gig alike," said Wells in a Tuesday statement. "But these apps are a symptom of broken healthcare infrastructure that is now victim to corporate takeovers. Failing to act on both fronts poses risks to our healthcare system and the workers who power it."
Wells also told The Guardian that the gig companies don't release data and the industry is unregulated, meaning the true extent to which the U.S. healthcare system is leaning on gig nurses is unknown—but she said it is clearly a growing trend.
These on-demand nursing apps can also have a negative impact on patients, according to sources the authors spoke with. One nurse recounted that "there have been times when I've been unable to access patient records or find supply closets."
"Other workers report that the lack of management and resources can result in major safety lapses for patients, such as gig nurses not being able to get updated information on patient medications or instructions about whether patients need help with feeding," the authors wrote.
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California's $20 Fast Food Worker Minimum Wage Kicks In
"Fast food companies can afford to pay $20/hour without raising prices or cutting hours," said the California Fast Food Workers Union. "Doing either is a choice. Don't let them tell you otherwise."
Apr 01, 2024
A new California law raising the minimum wage for most fast food workers from $16 to $20 an hour took effect Monday, a move cheered by labor advocates who dismissed—and debunked—claims by an industry reaping record profits that the pay hike would force restaurant chains to raise prices and cut jobs.
The law applies to restaurants at national fast food chains with at least 60 locations and that have limited or no table service. Restaurants inside supermarkets and establishments that bake and sell bread are exempt. Twenty dollars is just a starting point, as a state law also established a Fast Food Council that can raise wages by up to 3.5% annually through 2029.
"The vast majority of fast food locations in California operate under the most profitable brands in the world," Joseph Bryant, executive vice president of the Service Employees International Union, said in a statement. "Those corporations need to pay their fair share and provide their operators with the resources they need to pay their workers a living wage without cutting jobs or passing the cost to consumers."
As the California Fast Food Workers Union noted:
- From 2015 to 2023, California raised the minimum wage by 72%, from $9 an hour to $15.50 an hour;
- While the minimum wage was rising, fast food restaurants in California added 142,000 jobs; and
- The minimum wage has increased every year in California since 2015, and so has the number of fast food jobs in California, except for 2020, when the Covid pandemic hit.
California Fast Food Worker Union also pointed out that "numerous academic studies confirm: When states and cities pass big minimum wage increases, employers either add jobs or there is no or minimal effect on employment."
BREAKING: Today hundreds of fast food workers from across California are in LA to officially launch the California Fast Food Workers Union
We've won a Fast Food Council
We've won $20/hr
Now we're doing whatever it takes to win annual raises, just cause, and more#UnionsForAll pic.twitter.com/pykRKZF0PV
— California Fast Food Workers Union (@CAFastFoodUnion) February 9, 2024
The union highlighted various studies, including one in 2024 that found no fast food jobs were lost when California and New York increased their minimum wage to $15; another in 2018 that showed a slight increase in restaurant and food service employment in six cities that raised their minimum wage; and yet another in 2021 revealing hikes in state and local minimum wages had no effect on McDonald's opening or closing restaurants.
"According to the data, there's no reason why the new fast food minimum wage of $20 per hour in California should mean layoffs or increased prices," Alí Bustamante, deputy director for the Worker Power and Economic Security program at the Roosevelt Institute, said last week. "Profits in the fast food industry are sufficiently high to absorb the greater operating costs and ensure industry workers are paid fairly."
As More Perfect Union noted, McDonald's made $8.5 billion in profit last year, while Burger King's parent company raked in $1.2 billion, and Starbucks enjoyed $4.1 billion in profits.
Additionally, a new Roosevelt Institute analysis co-authored by Bustamante found that the 10 largest publicly traded fast food companies spent $6.1 billion on stock buybacks last year alone. This, while fast food prices soared by 46.8% over the past decade compared with 28.7% for the average of all prices. In 2023, fast food companies charged their customers 27% above their production costs. Critics have accused these and other corporations of "greedflation."
"In 2022, fast food industry employment in California had increased to approximately 553,000 workers—a 20.1% increase since 2014," the analysis notes. "Trends in the California fast food labor market have mirrored the national averages. Yet between 2014 and 2023, the federal minimum wage remained stagnant at $7.25 per hour, while California's minimum wage increased from $9 to $15.50 an hour—further evidence that California fast food firms can readily adjust to minimum wage increases."
The U.S. federal minimum wage of $7.25 an hour has not been raised since 2009, and that amount is worth far less now than it was then due to inflation.
"This is an insult to American workers and bad for our economy," former U.S. Labor Secretary Robert Reich said in a video published Monday by the Gravel Institute.
"It's simply a myth that raising the wage automatically means lost jobs," Reich asserted. "Here's the bottom line: If your business depends on paying your workers starvation wages, you should not be in business."
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Reports Expose Deep Harms of Corporate Tax Cuts and 'Trickle Down' Ideology
"Failing to reimagine a more ambitious and comprehensive use of corporate tax policy prevents us from achieving a more equitable, sustainable, and democratic economy."
Jan 23, 2024
Two new reports published Tuesday by the Roosevelt Institute argue that robust corporate taxation is key to creating a strong economy and improving the well-being of families and children—objectives that have been undermined in the decades since the Reagan era by regressive tax cuts enacted on the false premise that benefits would "trickle down" to the rest of society.
The first report, A Mapping of the Full Potential of U.S. Corporate Taxation to Enhance Child and Family Well-Being, examines what the authors describe as the understudied notion that "increasing corporate taxation will necessarily help children and families by providing additional revenue for essential public services."
That perspective runs counter to what the Roosevelt Institute's second report calls "a 'cut-to-grow' mentality" that rose to prominence in the 1970s and was enthusiastically embraced by the administration of President Ronald Reagan.
"Under this view, the thinking went, it was necessary to reduce the corporate tax rate to grow the economy—and that this growth would allow gains to eventually 'trickle down' from the rich shareholders to the middle class," the report states. "During this time, the corporate tax rate was gradually reduced to 35% before it was dramatically cut to 21% in 2017. These cuts resulted in corporate tax revenues falling to less than 10% of total federal revenues."
"Perhaps more than any other, President Ronald Reagan leveraged mounting backlash to taxation and government spending to dramatically reduce both, regardless of the consequences to American families," the report observes.
"Corporate tax policy since Reagan has been driven by the trickle-down economics narrative that cutting the taxes on 'job creators' will benefit less wealthy U.S. taxpayers."
The decades-long decline in corporate tax rates has severely undermined the federal government's ability to finance critical public goods, from education to childcare.
"Since regressive corporate tax cuts don't significantly increase earnings for working families (through either wage or employment increases), but they do reduce the government's ability to fund family income and care supports, childcare costs—which are already rising—can become a relatively more expensive line item in working parents' household budgets," reads the Roosevelt Institute's first report, authored by Emily DiVito and Niko Lusiani.
"When they can't afford childcare," they added, "parents face the difficult choice of having to cut costs in other places—often on the basic necessities that allow children to thrive, like food, clothing, and enrichment activities—or taking on additional caregiving duties themselves."
At the state and local levels, DiVito and Lusiani noted, "corporations' successful efforts to avoid their full property tax liability devastate public school budgets."
DiVito, deputy director for the corporate power program at the Roosevelt Institute, said Tuesday that "we have a false idea in the U.S. that corporate tax policy is unrelated to equitable social reforms."
"However, strong corporate tax policy is vital to all aspects of a thriving economy," she argued. "And the failing to reimagine a more ambitious and comprehensive use of corporate tax policy prevents us from achieving a more equitable, sustainable, and democratic economy and society for all families."
The new reports come a week after a bipartisan pair of House and Senate negotiators announced a deal to expand the child tax credit (CTC) for three years in exchange for a series of corporate tax cuts. The American Prospect's David Dayen estimated that "in the time period when all the tax credits are actually in place, the business tax changes are five times more costly than the CTC changes."
"Who knows if this deal can pass in time to take effect in the upcoming 2023 tax season, if ever. Sen. Mike Crapo (R-Idaho), the ranking Republican on the Senate Finance Committee, is already asking for changes to make it even more generous to businesses. That's in part a function of the dissembling that there is 'parity' in the deal. The truth is that this is not an equal trade. And it may extend that inequity well into the future."
That warning is in line with the Roosevelt Institute's new research, which argues that a corporate tax code generous to big business fuels inequality by "benefiting capital interests (i.e., business owners, partners, and shareholders) at the expense of workers and their families."
"When corporations enjoy low taxes on their profits, they face a trade-off for how to otherwise disperse them: make investments in the workforce and productive capacity (e.g., raise wages, hire more workers, and/or upgrade buildings, equipment, or technology) or distribute them to shareholders (i.e., pay out dividends and buy back stock to inflate prices). Data shows that executives typically choose the latter."
Reuven S. Avi-Yonah, a professor of law at the University of Michigan and the lead author of the new report on "cut to grow" ideology, said in a statement that "corporate tax policy since Reagan has been driven by the trickle-down economics narrative that cutting the taxes on 'job creators' will benefit less wealthy U.S. taxpayers."
"Such an idea is often offered in tandem with the notion that this is the only way tax policy can help American families," said Avi-Yonah. "But this just isn't true. In fact, this false 'cut-to-grow' narrative has made it very difficult to argue for a more expansive, progressive vision of corporate tax reform—contributing to a decades-long stalemate in efforts toward real comprehensive corporate tax reform."
"Now is the time," he added, "to reverse this trend with a more historically grounded support of the corporate tax."
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Progressives Rip Effort to Insert Dirty Deal Into Debt Ceiling Hostage Agreement
"These dangerous and dirty permitting deals are a matter of life and death for millions of people across our country who are already overburdened by decades of fossil fuel pollution," warned one campaigner.
May 25, 2023
Climate action advocates responded with outraged alarm Thursday to reporting that U.S. President Joe Biden and congressional Republicans may try to strike a "dirty deal" on permitting reforms as part of an agreement to raise the debt ceiling.
The deliberations continue as fears of an economically catastrophic default are growing, with just a week until the U.S. government could run out of money to pay its bills if Congress doesn't increase the debt limit, according to Treasury Secretary Janet Yellen.
"We should not be throwing people and the planet under a gas-guzzling bus just so that polluters can more easily build destructive projects."
Citing two unnamed sources close to the talks, The Washington Post reported:
The emerging deal would ease the process of building the interstate transmission lines needed to carry clean electricity across the country—a top priority for Democrats and a boon for President Biden's climate agenda, said the two individuals, who spoke on the condition of anonymity to describe the private negotiations.
To sweeten the deal for Republicans, the agreement would make modest changes to the National Environmental Policy Act, a 1970 law that requires the federal government to analyze the environmental impact of its proposed actions. GOP lawmakers have long blamed the bedrock environmental law for the yearslong delays that plague new highways, pipelines, and other infrastructure projects nationwide.
The transmission policy would be based on the forthcoming Building Integrated Grids With Inter-Regional Energy Supply (BIG WIRES) Act from Rep. Scott Peters (D-Calif.) and Sen. John Hickenlooper (D-Colo.), the newspaper noted, adding that the agreement "would include only incremental changes" sought by House Speaker Kevin McCarthy (R-Calif.) and fellow Republicans.
House Republicans notably included H.R. 1—their fossil fuel-friendly energy package—in the so-called Limit, Save, Grow Act, the "debt ceiling scam" the GOP passed last month and which established the party's priorities for the ongoing negotiations.
In response to the Post's reporting, Friends of the Earth government and political affairs director Ariel Moger said that "once again, lawmakers are expected to make the unconscionable decision to tack unpopular and environmentally harmful policies onto a must-pass bill. This deal will put communities already suffering from environmental racism at further risk by gutting essential laws."
"We should not be throwing people and the planet under a gas-guzzling bus just so that polluters can more easily build destructive projects," Moger argued. "Biden and congressional Democrats should stand up for environmental justice, reject this dirty deal, and pass a clean debt limit increase."
Oil Change International U.S. program co-manager Allie Rosenbluth stressed that "these dangerous and dirty permitting deals are a matter of life and death for millions of people across our country who are already overburdened by decades of fossil fuel pollution, the impacts of climate change, and compromised public health."
"The increased exposure to oil spills, gas leaks, air pollution, and water contamination would exacerbate existing environmental injustices and the climate crisis," Rosenbluth continued. "We must draw a red line and say no to Republicans taking our economy hostage to line the pockets of the fossil fuel industry."
“President Biden must enforce a clean debt ceiling package that does not allow for any rollbacks to National Environmental Policy Act (NEPA) or other bedrock environmental laws," she added. "While his recent climate track record has been nothing short of disastrous, it is not too late for him to turn it around and hold true to his environmental justice campaign promises."
The Biden administration has recently come under fire for backing ConocoPhillips' Willow oil project and a liquified natural gas (LNG) proposal, both in Alaska, as well as the incomplete Mountain Valley Pipeline (MVP) in Virginia and West Virginia.
The MVP is a longtime priority of Sen. Joe Manchin (D-W.Va.), a "coal baron" and recipient of fossil fuel industry campaign cash who only supported the Inflation Reduction Act last year in exchange for Senate Majority Leader Chuck Schumer (D-N.Y.) agreeing to push through permitting reforms friendly to the coal, gas, and oil companies.
Although opposition from frontline communities and progressives in Congress blocked versions of Manchin's "dirty deal" three times last year, he has since renewed his effort, introducing the Building American Energy Security Act—which calls for completing the MVP—earlier this month. A Biden aide said the White House backs the bill.
House Natural Resources Committee Democrats and the League of Conservation Voters highlighted Thursday that 83 lawmakers have signed a letter urging Biden, Schumer, and House Minority Leader Hakeem Jeffries (D-N.Y.) "to oppose ongoing attempts to attach H.R. 1 or any other extreme proposals that gut our bedrock environmental and public laws to must-pass legislation."
The panel's ranking member, Rep. Raúl Grijalva (D-Ariz.), led the letter and congressional opposition to last year's dirty deals.
"The growing list of my Democratic colleagues and I couldn't be more clear: Our environment and health are not the GOP's bargaining chips," Grijalva said in a statement Wednesday. "Gutting our bedrock environmental laws isn't permitting reform—it's a polluter payout. Speaker McCarthy and his extremist faction need to end this reckless scheme to force their MAGA-manufactured, polluters-over-people agenda on the American people now."
Though Jeffries is on the receiving end of the letter, he made clear Thursday that his caucus won't automatically support a Biden-backed deal, telling reporters that "it's a miscalculation to assume that simply any agreement that House Republicans are able to reach will, by definition, trigger a sufficient number of Democratic votes—if that agreement undermines our values."
Meanwhile, the Roosevelt Institute this week published an issue brief by Jamie Pleune, associate professor of law at the University of Utah, debunking the claim that reviews required by NEPA are hampering the transition to renewable energy.
"After examining 41,000 NEPA decisions conducted by the Forest Service over 16 years, we found limited correlation between the intensity of the NEPA process in question and the existence of delays," said Pleune. "Furthermore, some projects that were eligible for expedited analyses encountered delays, while some intensely studied projects were completed quickly. This indicated that the true causes of delay were external to the regulatory requirements of NEPA."
"Reducing analytical rigor or weakening environmental standards, which are some of the permitting reforms on the table in debt ceiling talks, won't address the true blockages to the buildout of renewables," she added. "In my brief, I provide progressive permitting reform, with demonstrated effectiveness, that will strengthen and improve NEPA processes while preserving community engagement and environmental protections."
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Make No Mistake: A GOP-Forced Default Will Cause the Next Great Recession
Holding a historically strong labor market hostage to force an unrelated agenda onto the country risks an economic catastrophe we can’t afford.
May 22, 2023
Defaulting on the United States debt would be a catastrophic disaster. Most acknowledge this, but many conservatives do not, and many in particular are flirting with serious economic harm in order to force political priorities that have nothing to do with any long-term budgetary issues. This is irresponsible, counterproductive to addressing any problem our country could face, and puts far too much at risk.
A default is bad at any time, but it is particularly unforced with the economy doing so well. Having finally recovered to a period of steady, strong growth in the aftermath of the COVID pandemic, we’ve experienced a very strong labor market and declining inflation. The unemployment rate has declined to a 50-year low overall, and the lowest on record for Black Americans. Millions have returned to the labor force; the prime-age (25-54) employment-to-population ratio—a good and consistent measure across time—is above pre-pandemic rates. Many thought this number would be permanently lower as a result of the Great Recession. Instead, it’s now at the highest rate since 2001, and it continues to grow.
A default is bad at any time, but it is particularly unforced with the economy doing so well.
Meanwhile, job opening, job upgrading, and wage growth rates are stabilizing at strong levels that are consistent with lower inflation. Many economists said inflation couldn’t have fallen as much as it has without unemployment increasing; instead, it’s happening amid a record labor market. As housing data continues to come in, and as goods prices normalize and corporate profit margins continue to shrink, there’s room for inflation to decline further. This is a Goldilocks economy, exactly the kind we want to keep going forward.
But hitting the debt ceiling—even just the prospect of it—poses a grave threat to this recovery. There’s no historical precedent for the United States to default on its debt. But experiences from 2011 and 2013 show that even approaching the debt limit has negative financial market consequences. Excessive stock market volatility, an increase in the cost of credit, higher credit default swaps rates, the threat of a credit downgrade—all are risks, and all would have persistent consequences years out.
But it’s not just financial markets that would suffer. Any kind of default would put major stress on the rest of the real economy. Social Security payments would immediately be delayed. That would cause hardships for many, and immediately cause consumers to panic, stop spending, and slow the economy, threatening a major recession.
Estimates from both public and private researchers are consistent on the scale of economic disaster here. According to Moody’s Analytics, even a short debt breach would lead to 2 million jobs lost right away and the unemployment rate skyrocketing to 5 percent. Worse, a protracted default would essentially create a second Great Recession in the second half of 2023, with 8 million jobs lost and unemployment well above 8 percent. Even if payments resume quickly, it would take years to recover from that damage, as unemployment comes down far slower than it went up.
This isn’t about future funding; Congress has told the Biden administration to spend this money. Remember, the Goldilocks economy we have does not need unnecessary spending caps or other makeshift austerity measures. Holding a historically strong labor market hostage to force an unrelated agenda onto the country risks an economic catastrophe we can’t afford. Our economy and our democracy deserve better.
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'End the Absurdity': Experts Say Biden Must Not Let GOP Force 'Catastrophic' Default
"This default would be a crisis for our economy and our democracy, and it threatens to devastate communities across the country."
May 09, 2023
Ahead of congressional leaders' Tuesday meeting at the White House, economists and other experts have renewed warnings about what the GOP's threatened first-ever U.S. default—or even coming precariously close to it—could mean for the country.
"Any time would be a bad time to default, but right now, in particular, would be pretty catastrophic," said Mike Konczal, director of macroeconomic analysis at the Roosevelt Institute, during a Monday press conference. "The conservative agenda right now is to try to reduce the standard of living for many people without having to have their fingerprints on it."
Openly backed by most Senate Republicans, the House GOP—led by Speaker Kevin McCarthy (R-Calif.)—is pushing for sizable cuts to federal spending, as made clear in the so-called Limit, Save, Grow Act they passed last month. The bill, which Senate Majority Leader Chuck Schumer (D-N.Y.) has called "dead on arrival," would raise the debt ceiling by $1.5 trillion or until March 31, 2024, either way with severe austerity and on the backs of working people.
After months of zero progress on increasing the debt limit and amid estimates from Treasury Secretary Janet Yellen and others that the U.S. government could run out of money to pay its bills as soon as June 1, President Joe Biden is set to host McCarthy, Schumer, House Minority Leader Hakeem Jeffries (D-N.Y.), and Senate Minority Leader Mitch McConnell (R-Ky.) at 4:00 pm ET.
"We cannot allow extremists in the House to make devastating ransom demands in exchange for not cratering our economy."
"President Biden will discuss the urgency of preventing default and stress that Congress must take action to avoid default without conditions," Michael Kikukawa, a White House spokesperson, said in a statement to The Washington Post early Tuesday. "He will discuss how to initiate a separate process to address the budget and FY2024 appropriations."
Despite similar votes under GOP presidents, House Republicans keep refusing to pass a clean bill raising the nation's arbitrary borrowing limit—and the budget blueprint Biden unveiled in March, featuring major social investments paid for with tax hikes targeting rich individuals and corporations, differs dramatically from GOP priorities, leaving few optimistic about the meeting.
Still, Claire Guzdar, a spokesperson for the ProsperUS coalition—which is made up of over 85 progressive groups—declared Tuesday that "Congress and the White House must move quickly to pass a clean debt limit bill before it's too late. We cannot allow extremists in the House to make devastating ransom demands in exchange for not cratering our economy—period."
"The Republican House majority's shameful default bill is completely unworkable. Their plan is full of wildly unpopular and damaging cuts to healthcare, food assistance, clean energy jobs, and more," said Guzdar. "This bill would be devastating for workers and the economy while doing nothing to make corporations and the wealthy pay their fair share. Negotiating on the debt limit should be a nonstarter at any time and rejected immediately as an egregious attempt to push our economy into crisis."
Experts warn that "we can't afford to undo the extraordinary economic progress we've made in the last two years," as Groundwork Collaborative executive director Lindsay Owens said during the Monday media briefing with other economists.
"President Biden should not agree to negotiate a deal on the debt ceiling that increases unemployment or slows growth—not when there [is] a myriad of easier and softer ways to avoid default," she argued. "We're at a 53-year record low in unemployment. It would be an incredible tragedy to undermine the gains that we're finally seeing in the labor market, particularly for marginalized workers."
Similarly stressing that "the labor market is actually starting to produce gains for workers who tend to be the last hired and first fired," Demos chief of programs Angela Hanks said that "the dangerous brinkmanship over the debt ceiling and the extremist position that Speaker McCarthy has staked out really poses a deep threat to that progress and threatens to trigger a recession."
Republicans' proposed spending cuts "will be borne by people who are already marginalized… who cannot afford to have another economic crisis triggered by our politics," Hanks warned. "This default would be a crisis for our economy and our democracy, and it threatens to devastate communities across the country."
"The dangerous brinkmanship over the debt ceiling and the extremist position that Speaker McCarthy has staked out really poses a deep threat to that progress and threatens to trigger a recession."
The high stakes have led some to urge the White House to take unilateral action if GOP lawmakers continue to hold the global economy hostage. Options include minting a platinum coin worth $1 trillion and invoking a section of the 14th Amendment to the U.S. Constitution that states the validity of the national debt "shall not be questioned."
Proponents and opponents of the 14th Amendment route have suggested that Biden invoking it could lead to a consequential decision by the right-wing U.S. Supreme Court. Such a ruling could already be in the works, thanks to a federal lawsuit filed Monday by the National Association of Government Employees, which aims to have the debt limit law declared unconstitutional.
Robert Hockett, a Cornell University law professor of law and Westwood Capital senior counsel who previously worked at the Federal Reserve Bank of New York and the International Monetary Fund, told the Post Monday that "I don't think the Supreme Court is prepared to bring on global financial calamity by finding in favor of the congressional Republicans."
"I think the Supreme Court would expedite review very quickly on this, and for that reason, I don't think we'd see terrible turmoil in the markets," he said. "I think we'd have more turmoil if we have to wait to see if McCarthy and Biden will come to an accommodation."
In a Tuesday opinion piece for The New York Times, Hockett wrote that if the U.S. defaults, "we would see a great tottering—if not worse—of U.S. banking, U.S. financial markets, and the world's capital markets."
Hockett continued:
For one thing, U.S. Treasury securities, valued at over $24 trillion (by far, the largest asset market in the world), are the primary safe asset held in banking, pension fund, mutual fund, and other business portfolios. Our present regional bank crisis involving Silicon Valley Bank and others is occurring in response to a relatively slight, temporary drop in the value of low-yield Treasuries largely because of the Fed's interest rate hikes. An outright default would leave us nostalgic for the comparable placidity of this troubled moment.
We would also probably see a rapid plunge in the value of the dollar worldwide as a global reserve asset. Our currency's value in relation to others' is rooted primarily in global demand for dollar-denominated financial assets, since we have relinquished our primacy as a goods exporter to China. Since Treasury securities are by far the most voluminous asset, their slide would be the dollar’s slide. This would quickly render imports, on which we continue to rely, far more expensive. Inflation could look more like that of Argentina or Russia 20 years ago than that of the present or even the 1970s.
This is to say nothing of our subsequent incapacity to maintain our military bases and other assets abroad and pay thousands of U.S. military personnel.
"Even the serious prospect of U.S. default would quickly raise debt-servicing costs, rendering our deficit larger than it currently is—a consequence dramatically at odds with Republicans' professed concerns about tying the debt ceiling hike to massive budget cuts," he added, advocating an end to the debt limit, which comes from a 1917 law. "Let us now end the absurdity."'
After outlining the impacts of a default—including cuts to Inflation Reduction Act climate provisions that "would be literally catastrophic"—Economic Policy Institute experts Josh Bivens and Samantha Sanders also asserted Tuesday that "all of this clearly calls for abolishing the debt limit to keep irresponsible congressional majorities from holding the nation's economy hostage to its policy preferences in the future."
"But what makes today's debt limit showdown so bad is how normalized it has become—often with the encouragement of too many in D.C. policymaking circles who should know better," the pair added. "If this drive to normalize debt limit brinkmanship does not spark an economic meltdown this time, we all know where it leads next time."
This post has been updated with comment from the Economic Policy Institute.
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Bombshell Report Exposes Key Argument Against Student Debt Relief as 'Categorically False'
"The Supreme Court risks making a ruling affecting millions of people's lives without essential, accurate information," warns a new analysis from the Roosevelt Institute and the Debt Collective.
May 03, 2023
The argument at the center of Republican officials' case against President Joe Biden's student debt cancellation plan is "categorically false," according to an explosive new report released Tuesday by the Roosevelt Institute and the Debt Collective.
With debt relief for tens of millions of people hanging in the balance, the GOP state officials who brought the case told Supreme Court justices in late February that they have legal standing to challenge the Biden administration's student debt cancellation plan because if it took effect, it would "cut MOHELA's operating revenue by 40%."
MOHELA is Missouri's state-created higher education loan authority, and the supposed financial harms it would suffer under the student debt cancellation plan are critical to the right-wing officials' case. If the Republican plaintiffs can't prove that MOHELA—which is not itself a plaintiff in Biden v. Nebraska—would suffer concrete harm from student debt cancellation, their case falls apart.
According to the new report by the Roosevelt Institute and the Debt Collective, not only would MOHELA not be harmed by the Biden administration's student debt relief plan—it would actually see its direct loan revenue rise if the plan is enacted.
"Our new research examining this claim suggests that MOHELA's year-over-year revenue from direct loans will actually increase substantially, even after debt relief," the report states. "Assuming President Biden's proposed cancellation goes through, we estimate that MOHELA will service more than twice the number of accounts it serviced at the beginning of the Covid payment pause. It will also earn nearly twice as much revenue servicing federal direct loans as it has in any year prior to cancellation."
The groups said their findings were bolstered by internal MOHELA documents that they obtained through a public records request. MOHELA's "own internal impact analysis," the report notes, "shows it would make more revenue the first year after cancellation is processed than it did in 2022 or any prior year."
"The entire premise of the lawsuit against student debt relief rests on the idea that 43 million student debtors shouldn't get relief for which they were already approved because one of the corporations contracted by the government to collect student debt, and thus the state of Missouri, will be financially harmed in the process," the report concludes. "Our analysis reveals this assertion to be false. In contrast, MOHELA will earn higher revenue than ever before, even after cancellation is administered—contradicting the plaintiffs' argument and calling into question their claims to standing."
Thomas Gokey, a co-founder of the Debt Collective and an author of the report, told The Lever on Tuesday that "it's really hard to stop student debt cancellation because you need to find someone who is harmed by it" to establish standing to sue.
"And the truth is, nobody is actually harmed by student debt cancellation," said Gokey. "It benefits everybody. It benefits people who don't have student debt."
Biden v. Nebraska, one of two student debt cancellation cases currently before the Supreme Court, has been placed on a fast track, meaning that "the Republican attorneys general trying to stop student debt cancellation for 43 million borrowers have at no point been obliged to verify the basic facts of this case," the Roosevelt Institute and the Debt Collective stressed.
"As a result, the Supreme Court risks making a ruling affecting millions of people's lives without essential, accurate information," the progressive groups said.
The report also highlights that, as part of its contract with the Department of Education, "MOHELA agreed not to 'object to or protest [Federal Student Aid's] allocation or reallocation of existing borrower loans, and further waives and releases all current or future claims against [FSA]... regarding its current allocation decisions and methodology for existing borrower loans.'"
"Maybe that's why MOHELA never joined the lawsuit," The American Prospect's David Dayen suggested in his write-up of the new report. "But none of that matters to this Supreme Court. They are on the verge of accepting a standing argument of a fake plaintiff who never joined the case, based on an assertion of harm that in the final analysis is actually a benefit, while ignoring a signed contract that flatly prohibits the fake plaintiff from suing at all."
"I know we're in a post-fact era, but this is really something," Dayen continued. "If the court doesn't pay careful attention to this report, more than 40 million student borrowers could experience continued financial hardship because the justices would rather violate numerous principles of jurisprudence than let Joe Biden help anyone. The conservatives on the court are obviously not mathematicians or experts in student debt servicing or financing. But they don't appear to be judges, either, at least in the sense of following the law."
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As Fed Meets, Experts Tell Powell to Stop 'Needlessly Threatening Jobs'
"There's a clear path forward to avoiding a devastating and completely avoidable recession: Chair Powell and the Fed should stop raising interest rates," said one economist.
Jan 31, 2023
As the Federal Reserve kicked off its first policy meeting of the new year on Tuesday, economists and progressive advocates reiterated their now-familiar call for the central bank to stop raising interest rates amid growing evidence that hiring, wage growth, and inflation are slowing significantly.
"Pushing millions of people out of work is not the answer to tackling inflation," Rakeen Mabud, chief economist at the Groundwork Collaborative, said in a statement. "Additional rate hikes could jeopardize our strong labor market—and low-wage workers and Black and brown workers would suffer the biggest economic consequences."
"There's a clear path forward to avoiding a devastating and completely avoidable recession: Chair Powell and the Fed should stop raising interest rates," Mabud added.
The latest push for an end to interest rate increases came as fresh data released by the U.S. Bureau of Labor Statistics (BLS) on Tuesday showed that wage growth continued to cool at the tail-end of 2022, an outcome that Federal Reserve Chair Jerome Powell has explicitly been aiming for even as experts have rejected the notion that wages are responsible for current inflation levels.
According to the BLS Employment Cost Index (ECI)—a measure watched closely by Fed policymakers—wage growth climbed just 1% in the final three months of 2022 compared to the previous quarter, a slower pace than analysts expected.
"The Fed has lost its excuse for a recession," Mike Konczal, director of macroeconomic analysis at the Roosevelt Institute, tweeted in response to the new BLS figures. "Over the last three months, inflation has come down exactly as a soft landing would predict, wage growth didn't persist but moderated with the reopening to solidly high levels within late 1990s ranges, and the economy added 750,000 new jobs."
"Too many hard-working families have everything to lose if the Fed stays the course with higher rates that only push the economy closer to a recession."
Though Powell has insisted that Fed decision-making will be driven by economic data, he made clear last month that the nation's central bankers don't think inflation has slowed enough to justify a rate-hike pause or reversal, brushing aside the recessionary risks of more monetary tightening.
On Wednesday, the Fed is widely expected to institute a 25-basis-point rate increase followed by another of the same size at its March meeting, bringing the total number of rate hikes to nine since early 2022.
Even the central bank's own models predict a sharp increase in the unemployment rate—and potentially millions of lost jobs—if Fed policymakers drive interest rates up to their desired range of between 5% and 5.25%.
Recent layoffs across the tech industry as well as data signaling a hiring deceleration have also intensified fears of a Fed-induced economic crisis.
"The Fed has every reason to halt further job-killing interest rate hikes as key indicators show inflation is slowing while the economic recovery remains fragile," said Liz Zelnick, director of the Economic Security and Corporate Power program at Accountable.US. "Too many hard-working families have everything to lose if the Fed stays the course with higher rates that only push the economy closer to a recession."
"Repeated interest rate hikes have done little to curb corporate greed that even Fed economists admit is what's really driving high costs on everything from groceries to gas," Zelnick continued. "The Fed faces a choice: back down and let policy and lawmakers continue to take impactful steps to rein in corporate profiteering—or keep needlessly threatening jobs and an economic downturn with further rate hikes.”
For months, economists and lawmakers have vocally questioned the Fed's aggressive rate hikes and laser focus on the labor market given the myriad causes of the 2021 inflation spike, from pandemic-induced supply chain snags to corporate profiteering to Russia's war on Ukraine to the climate crisis.
Some experts, however, have argued that the Fed's seemingly misguided approach is perfectly understandable when considering that a central goal of the institution is to help the rich "conserve and increase their concentrated wealth."
"Chair Jerome Powell and the Fed are willing to impose significant costs on workers and families in order to reduce inflation," Gerald Epstein and Aaron Medlin of the University of Massachusetts Amherst wrote in The American Prospect earlier this month. "This focus on inflation, by promoting high unemployment, contradicts the dual mandate given to the Fed by Congress."
"Why does the Federal Reserve treat its high-employment mandate so cavalierly when inflation is above 2%?" the pair continued. "The answer stems from the fact that since its founding, Fed officials have seen the world through 'finance-colored' glasses. Financiers do not like high inflation. Like all creditors who lend money today to be paid back in the future, financiers hate getting paid back in dollars that are worth less than the dollars they lent out in the first place."
In a blog post on Monday, Economic Policy Institute research director Josh Bivens noted that the Fed's dual mandate is "meant to balance the risks of inflation versus the benefits of fast growth and low unemployment."
"Right now, the benefits of low unemployment are enormous, and the risks of inflation are retreating rapidly," Bivens wrote. "If the Fed lets the current recovery continue apace by not raising interest rates further at this week’s meeting, 2023 could turn out to be a great year for the economic fortunes of American families."
"The Fed should stand pat on interest rate increases," he added. "If they instead insist on raising rates, this will pose a dire threat to what could be an excellent 2023 for the economic prospects of America's working families."
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