Gridlock, schmidlock. The Obama admin keeps doing cool stuff.

March 23rd, 2016 at 12:45 pm

Back when I worked for the Obama administration, I remember a depressing meeting our econ team had, circa late 2010, after the Tea Party came to town and pretty much shut down the Congress as far as policies to boost the still-weak recovery. The point of the meeting was to come up with policy ideas that would a) help folks struggling with jobs, wages, and debts, and b) didn’t require Congress. This would later become the President’s “pen and phone” initiative (he’d jawbone biz to do the right thing, and sign exec orders and rule changes).

Like many economists, I thought in terms of temporary stimulus to help close remaining output gaps and labor market slack, but that requires Congress to open the purse strings. That was off the table (and, to be fair, we ourselves in the admin had begun to pivot too soon to deficit reduction). I don’t remember much of note coming out of that first meeting.

But the admin kept hammering away at it and eventually came up with a lot of really good ideas, far more than I think most seasoned government wonks thought was possible. Congress may be mired in dysfunction, but team Obama’s been doing some pretty remarkable stuff.

I was reminded of this when, in my perusal of this AM’s papers, I saw pieces on the soon-to-kick-in overtime rule, which will boost the pay of millions of middle-wage earners, the fiduciary rule against “conflicted advice” from investment advisers, which has the potential to save billions in the aggregate for retirement savers, and a new disclosure rule wherein firms that hire outside advisers to block union organizing drives have to reveal what they’re up to.

Just to remind you of some of the other pro-worker changes the administration has managed to cobble together (including stuff just mentioned for completeness and links):

And a bunch of other stuff too, including the immigration actions to extend some legal status to certain undocumented persons (the court challenges to these policies are now uncertain), barring employers from retaliating against those who discuss their compensation, enhancing work/life balance at federal agencies, and barring federal contractors from discrimination on the basis of sexual orientation or gender identity.

I’m also impressed by the extent to which Obama’s been able to normalize relations with Cuba, which is also opening up some trade possibilities (and with no big, divisive “free trade agreement” to boot!).

Two related points about all this.

First, one big problem with this approach–one that underscores its difference with legislation–is how quickly all these policies can be reversed by the next president. It is standard practice that when a president of the other party takes office, they first hang up their coat in the residency and next reverse all the previous administration’s executive orders.

That’s not just bad from the obvious perspective of progressive policy. It’s the kind of policy lurching that creates economic uncertainties and inefficiencies. To be clear, this is not at all an anti-regulation rap. All of that “regs are choking us!” stuff is overblown and American business has continuously shown itself to be highly adaptable. But it’s hard to adapt to a quickly shifting regulatory landscape.

Second, all of the above further raises the stakes in the election. Though you don’t hear this so much given the ascendency of the Donald, people on the far left (and right too, I think) sometimes claim it doesn’t matter who’s president, as both parties are deeply co-opted and compromised by monied interests.

Yeah, well…there’s something to that, but I really wouldn’t push it too far, especially when you consider the list above.

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5 comments in reply to "Gridlock, schmidlock. The Obama admin keeps doing cool stuff."

  1. Stuck says:

    I’ve read The Price of Truth by David B. Resnik for the fourth time. I am concerned with some behavior by politicians that claim to live by a morality code of conduct – religious being my main concern. Speaking of monied interest I like that Resnik addresses with caution the laissez-faire rule of norm. I guess I am attempting to be objective re our healthcare system and reading the linked research paper titled, What is Ethics in Research & Why is it Important?

    Read more at: http://www.niehs.nih.gov/research/resources/bioethics/whatis/
    http://www.niehs.nih.gov/research/resources/bioethics/whatis/


  2. Jurassic Carl says:

    The FLSA overtime change is the biggest deal for regular folk.
    It will be welcomed by overworked/underpaid currently-exempt employees that currently make between $25K and $50K

    Let’s hope that the changes make it through DOL, OPM, etc safely.
    This bill wants to stop it all
    http://www.jdsupra.com/legalnews/bill-introduced-to-stop-flsa-exemption-51550/


  3. New Deal democrat says:

    Prof. Bernstein:

    The kink and every other article I have been able to find indicates that Obama *proposed* an increase in the overtime threshhold. I am unable to find any articles indicating that the Dept. of Labor ever actually followed through and adopted the proposal. Did they? Thanks


    • Jurassic Carl says:

      A week ago I received this update on FLSA from https://petitions.whitehouse.gov/

      “An update for your petition on the overtime rule:

      Thank you for adding your name to a petition urging the completion of a final overtime rule. With more than 100,000 signatures coming in, it’s clear that this is an issue inspiring broad interest and strong grassroots activism.

      As you may know, two years ago, President Obama directed the Department of Labor to update and modernize the overtime rules, so that hard work is rewarded with fair pay. A fundamental principle of the Fair Labor Standards Act, going back nearly 80 years, is that workers who put in more than 40 hours per week should generally get paid more for that extra time.

      Unfortunately, the overtime regulations for white-collar employees have fallen out of date. An exemption from overtime eligibility originally meant for highly-compensated, white-collar employees now applies to workers earning as little as $23,660 a year — that’s below the poverty line for a family of four. The outdated salary level no longer does its job of identifying salaried workers who should be entitled to overtime pay for working extra hours.

      Now, we’ve got news to share. But first, here’s a bit more information on the rule-making process and how we got here.

      After more than a year of listening to workers, employers and other interested stakeholders, perhaps even some of you, last summer the Department of Labor proposed an update to the white-collar overtime rules to more accurately reflect the intent of the Fair Labor Standards Act, and to make the process of determining who should be paid overtime simpler for many workers and businesses.

      As proposed for public comment last summer, the rule would more than double the salary threshold under which full-time salaried workers would be eligible for time-and-a-half, allowing them to be compensated for the extra hours they work each week. Updating the salary level requirement will ensure that millions of Americans who sacrifice family time for their job earn extra pay to help them make ends meet.

      The Department of Labor received and reviewed thousands of public comments on the proposed rule, and yesterday, they submitted their draft of the final rule to the Office of Management and Budget for review. This is the next major step in the process toward issuing a final rule that will update the nation’s overtime regulations and ensure workers who should be paid for overtime hours receive that compensation.

      We look forward to updating you in the near future, as soon as the overtime rule is finalized, and the Department of Labor begins the process of implementation. Thank you for your participation in the We the People platform.

      — We the People Team”


  4. save_the_rustbelt@yahoo.com says:

    A wonderland for lawyers, consultants and IT companies.

    Consistent with every other Obama initiative.

    (Fair disclosure – I am part of the consultant wonderland!)


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