What if Martin Luther King Jr. hadn't been killed? In the weeks before his death, Eugene Robinson notes, he was talking as much about class and the economy as about race:
Now our struggle is for genuine equality, which means economic equality. For we know that it isn't enough to integrate lunch counters. What does it profit a man to be able to eat at an integrated lunch counter if he doesn't earn enough money to buy a hamburger and a cup of coffee?
Blacks and whites eat at the same establishments these days, but in other ways, King's warning has proven accurate. Persistent economic inequality has arguably undermined some of the most important achievements of the civil rights movement. Legally, our schools are integrated, but in practice, research suggests they're becoming more segregated. White and black children in kindergarten and younger are much more likely to be separated from each other than whites and blacks in the population at large, which is largely because black families still can't afford to live in the neighborhoods with the best schools, as Emily Badger has explained.
And while segregation between neighborhoods has been steadily decreasing, there are still many places like Ferguson, Mo. where the economic ramifications of decades of racially biased business practices and government policies keep low-income blacks from finding a way out.
It's often said on Martin Luther King Day that the civil rights movement still has unfinished business, but somehow, the events of the past year seem to have made that fact especially clear.
Wonkbook will return on Tuesday, Jan. 20.
What's in Wonkbook: 1) The Swiss franc 2) Opinions, including Shiller on whether economics does any good 3) Obama's paid leave policies, news from the G.O.P. retreat in Hershey, Pa., and more
Number of the day: 26. That's how many years old the average American woman is when she gives birth for the first time -- a record high. Jason Millman in The Washington Post.
After years of selling off francs to artificially hold down their price, the Swiss National Bank suddenly threw in the towel. "Back during the eurozone debt crisis in 2011, fear was high that banks in countries that use the euro would go belly up. If you were a company or rich person in a country like Greece or Italy or even France or Germany, fearful that the euro could go kablooey and your local banks with it, you were sorely tempted to catch a flight to Zurich or Geneva and deposit your money in a Swiss bank. ... Now, the European Central Bank looks to be on the verge of an extensive new effort to try to pump money into the European economy to get it out of its doldrums, which is creating downward pressure on the euro. ... Meanwhile, Russia is a basket case, increasing the desire of Russian oligarchs to avoid exposure to a falling ruble. ... And on Thursday, the Swiss National Bank, led by Thomas Jordan, basically waved the white flag." Neil Irwin in The New York Times.
Some investors were blindsided and took major losses. "'Yesterday, we were doing fine. We were up 2 percent this month, but with the SNB move, our gains have been wiped out,' said Axel Merk, president of Merk Investments in Palo Alto... The euro dropped as much as 30 percent below the 1.20 cap to 0.8500 franc per euro at one point Thursday before rebounding to roughly 1.00, down 16 percent. The dollar plunged to 0.736 franc, its lowest since 2011, before paring losses. It was last trading at 0.8682 franc, down 15 percent." Gertrude Chavez-Dreyfuss and Nishant Kumar for Reuters.
The largest U.S. currency broker is in the red. "FXCM Inc., the biggest retail foreign-exchange broker in the U.S. and Asia, said in a statement that because of unprecedented volatility in the euro against the Swiss franc, its losses left it with a negative equity balance of about $225 million and that it was trying to shore up its capital." Anjani Trivedi, Lucy Craymer and Tommy Stubbington in The Wall Street Journal.
The Swiss might have blundered. "Switzerland is still stuck in deflation, with prices falling 0.3 percent, and a stronger currency is only going to make that worse. Now, they tried to offset this by charging people even more to hold their money in Switzerland—aka negative interest rates—but that wasn't nearly enough to stop the Swiss franc from going vertical. The SNB, in other words, chose a slower economy today, because it was afraid of a bigger balance sheet tomorrow." Matt O'Brien in The Washington Post.
This is all Europe's fault, really. "Tiny Switzerland's travails underline the bigger issue: Europe's inability to restore economic growth. After the 2008 financial crisis and amid the subsequent European debt crisis, Europe's leaders -- Germany's policy makers, especially -- have erred repeatedly. They have forced too much austerity on the weakest members of the currency union, while the strongest have pared back investments needed to boost growth. They have been far too slow in forcing banks to recognize losses, raise capital and get back to business as usual. They have opposed much-needed monetary stimulus. As a result, the euro area has endured serial recessions and is now teetering on the brink of deflation." Bloomberg View.
KRUGMAN: If the Swiss can't escape deflation, who can? "The fate of Switzerland isn't the important issue. What's important, instead, is the demonstration of just how hard it is to fight the deflationary forces that are now afflicting much of the world — not just Europe and Japan, but quite possibly China too. And while America has had a pretty good run the past few quarters, it would be foolish to assume that we're immune." The New York Times.
Board games interlude: "Settlers of Catan" has gone mainstream. So mainstream that most of the Green Bay Packers' offensive line is obsessed with it, and it's all anyone can talk about in the locker room. Kevin Clark in The Wall Street Journal.
Most local governments don't have the cash to pay for retirees' health insurance. "State and local governments typically pay most of the insurance premiums for employees who retire before they are eligible for Medicare at age 65. ... Total U.S. unfunded health-care liabilities exceeded $530 billion in 2009, the Government Accountability Office estimated, but the current number may be closer to $1 trillion, according to a 2014 comprehensive study released by the National Bureau of Economic Research." Robert C. Pozen in The Wall Street Journal.
STRASSEL: Can Republicans stop fighting with each other? "Will the big, conservative House majority take into consideration the reality of a narrower, more constrained Republican Senate? ... If not, the House is inviting stories about how Republicans can’t agree with Republicans." The Wall Street Journal.
There is no unemployment crisis among veterans. "Although post-9/11 veterans did have a higher rate of unemployment than the overall workforce last year — which was at 6.2 percent — the disparity is more attributable to the relative youth of those in this group rather than their military experience. In fact, compared with civilians in the same age ranges, post-9/11 veterans experienced lower rates of unemployment." Peter A. Gudmundsson in The Washington Post.
ROBINSON: Let's remember Martin Luther King, Jr., the firebrand. "It is wrong to round off the sharp edges of his legacy. He saw inequality as a fundamental and tragic flaw in this society, and he made clear in the weeks leading up to his assassination that economic issues were becoming the central focus of his advocacy. Nearly five decades later, King's words on the subject still ring true." The Washington Post.
FRIEDERSDORF: The New York Police Department is losing the public's support. "In recent weeks, NYPD police officers and union officials have alleged that Mayor Bill de Blasio doesn't support police, turned their backs on him during public appearances, and instigated a work slowdown to signal their upset and disapproval. ... A new poll by Quinnipiac University suggests that the city's voters have seen through the police union's tactics, and that its temper tantrum will cost it political support.A new poll by Quinnipiac University suggests that the city's voters have seen through the police union's tactics, and that its temper tantrum will cost it political support." The Atlantic.
SHILLER: Do economists matter? "Since the global financial crisis and recession of 2007-2009, criticism of the economics profession has intensified. The failure of all but a few professional economists to forecast the episode – the aftereffects of which still linger – has led many to question whether the economics profession contributes anything significant to society. ... But this criticism is unfair. We do not blame physicians for failing to predict all of our illnesses. Our maladies are largely random, and even if our doctors cannot tell us which ones we will have in the next year, or eliminate all of our suffering when we have them, we are happy for the help that they can provide." Project Syndicate.
Quietly, automakers are getting ready for Elon Musk and Tesla to overturn the industry. "For all its short-term prosperity selling trucks, SUVs and luxury cars at inflated profits [due to cheap gas], the industry has no real answer for Musk's sense of purpose and long-term vision. If Tesla can survive and deliver a Model 3 that lives up to the Model S, there's little doubt but that it can carve out a profitable niche for itself. But for mainstream automakers, unless they start investing today's profits wisely and finding new ways to connect with consumers, slowing global auto sales growth portends brutal consolidation ahead. Musk may be worried about short-term stock volatility, but the traditional auto industry has to worry about how to keep investors interested over the long term." Edward Niedermeyer for Bloomberg View.
YORK: Is Romney's newest campaign already over? "In San Diego, where the Republican National Committee is holding its winter meeting, a lot of virtually unknown but very important Republicans — chairmen of state parties — were notably unenthusiastic about Romney 2016. ... Then there are the Republican members of the House and Senate meeting in retreat in Hershey, Pennsylvania," who are also skeptical. The Washington Examiner.
Romney would have to explain why he'd make a better candidate this time around. "Mr. Romney is a man of admirable personal character, but his political profile is, well, protean. He made the cardinal mistake of pandering to conservatives rather than offering a vision that would attract them. He claimed to be 'severely conservative' and embraced 'self-deportation' for illegal immigrants, a political killer. But he refused to break from his RomneyCare record in Massachusetts even though it undermined his criticism of ObamaCare. A third campaign would resurrect all of that political baggage — and videotape." The Wall Street Journal. 1/14/15.
The oceans are at risk of "a major extinction event." "Humans are on the verge of causing unprecedented damage to the oceans and the animals living in them," a new study has concluded. Carl Zimmer in The New York Times.
Obama calls for expanded sick leave. He signed a memorandum granting federal employees six week of sick leave to care for family members, and asked Congress to guarantee every American worker at least seven days of paid sick leave. Steven Mufson and Juliet Eilperin in The Washington Post.
Chart of the day:
Going to work sick is a public health problem and a detriment to economic productivity. Not surprisingly, there are large disparities between employees with and without paid sick leave. Christopher Ingraham in The Washington Post.
The Senate will vote on the House's immigration bill. "The House bill appears very unlikely to pass the Senate, where [Majority Leader Mitch] McConnell will need to attract at least six Democrats to reach the 60-vote threshold to end debate." Sarah Mimms in National Journal.
Republicans also can't agree on highway funding. "U.S. congressional Republicans, already struggling to find a common approach to hot topics like immigration and Obamacare, also face an intraparty rift over how to meet a May deadline to fund massive road, bridge and transit projects." Richard Cowan for Reuters.
Or on how they'll attack Obamacare procedurally. "Despite widespread dissatisfaction in the caucus with President Obama's signature health care law, some veteran Republicans are suggesting that a procedural tool known as budget reconciliation should be saved for legislation that the president has actually asked for, like tax reform. Republicans devoted an entire session to this topic at their retreat in Hershey, Pa., on Thursday, although no final decisions were made." Fawn Johnson in National Journal.
The Center for American Progress is out with a comprehensive new economic proposal. "The report is broad in its scope and points to the need to modernize employment laws regarding overtime pay and workers' compensation; profit-sharing for employees in their companies; expanding national service as a way to help young people gain job skills and more family-friendly policies such as paid leave for new parents and caregivers. The policy ideas could preview [former Secretary of State Hillary] Clinton's economic agenda if she runs for president. Many of the ideas have been raised by Clinton in the past and the commission has as members several longtime Clinton allies, including [former Treasury Secretary Larry] Summers." Ken Thomas for the Associated Press.