If you can get through the troubling news at the top of today's BradCast, we've got far more encouraging news beyond it! [Audio link to full show is posted below this summary.]
First up, the dangerous GOP scheme to use the need to raise the nation's borrowing limit to hold the nation's economy hostage, may come sooner than expected this year. The debt ceiling will have to be raised this year so that we can cover the cost of stuff that Congress and Presidents have already committed to paying for. But, if hardline Republicans who now control the House and its Speaker, Kevin McCarthy, carry out their threats, bumping into our current debt ceiling could place the nation on the brink of the first default of the federal government in U.S. history. Immediate market crashes and millions of layoffs could follow, along with a national and/or global recession and/or depression in the bargain.
According to AP today, the federal government could run out of money as early as this week or as late as March. After that, they will institute "extraordinary measures" to continue paying our bills as long as possible. But unless Congress adopts another increase in the debt ceiling (which is never a problem when a Republican is in the White House) a default could occur as soon as mid-summer. Given the promises made by McCarthy to the hardliners in his caucus last week, in order to win the Speakership on the 15th ballot, this could all get very dangerous very quickly. Especially given the way Republican extremists carry out "negotiations" in the modern age.
Beyond that, we've got some much better news today as we turn our eyes toward Executive Actions and those by Executive Branch agencies to move the nation forward while the GOP brings legislative progress to a screeching halt. On that front, while Joe Biden vowed to be the most labor friendly President in U.S. history (granted, a pretty low bar), his Federal Trade Commission (FTC) Chair, progressive Lina Khan, is working hard to help him keep the promise.
Last month, more than two dozen consumer advocacy groups and labor unions sent a letter to Khan and the other FTC Commissioners asking them to quickly begin the process to create a new rule that would ban the use of non-compete contracts by employers. "Employers’ use of non-compete clauses inflict real and substantial harms on the American worker and the overall U.S. economy without any legitimate justification," the groups argued. "By limiting worker’s mobility, non-competes drive down wages, reduce the formation of new businesses and keep workers stuck in unsafe or hostile workplaces. These one-sided contracts can also unfairly restrain competition in downstream markets by allowing dominant firms to hold on to specialized workers --- think of monopolistic hospitals and surgeons."
Last week, the FTC did precisely as asked, kicking off the rule-making process to ban such contract clauses in all 50 states! Today, we're joined by MATT KENT, competition policy advocate at Public Citizen, one of the letter's signatories, to discuss what his organization described last week as "thrilling" news.
"Non-compete clauses are built into employment contracts to require employees to not work against an employer," Kent tells me. "This was originally used as something for higher level senior executive types, to prevent them from going from boardroom to boardroom. Over the decades, employers realized this was a useful tactic in depressing workers' wages by taking away their leverage to move to another company."
He explains that such clauses are now common for everything from food-service workers to security guards. "In a lot of cases, folks would move to another job only to find out that their former employer was suing them for violating a non-compete, to make an example [of them], and put the fear into workers [and] cut down on their mobility. It's become a major problem."
The text of the FTC's newly proposed rule is "very encouraging," Kent says. "When you do this work, you're ready for disappointment. So we were expecting to see a proposal from the FTC with common carve-outs and exceptions." Instead, they got just about everything they asked for. Nonetheless, changes to the final rule "could still happen. That's the battle ahead of us now at the FTC. But we are very, very excited by the fact that, as proposed right now, the FTC does not include any carve-outs or special exceptions that Big Business could really exploit."
Because of that, he warns, "the business community is going to come hard for this one" both in the courts and during the public comment period which is now open. "The FTC needs to hear from the public," he implores. "More people than you think have a story about someone who has been stuck in a bad situation with a non-compete. People feel afraid to talk about them because they're worried about employer retribution," Kent notes. "But people have the ability to comment anonymously. People who have experiences with non-compete clauses in an employment contract affecting them or their family, now is the time to communicate that to the FTC as they make this rule, because public support is going to be really important."
Also in my conversation today with Kent: Why this rule-making process must be finished quickly to avoid the possibility of the regulation being overturned through the Congressional Review Act after the 2024 elections; excitement among the progressive and labor community about Khan's appointment as FTC Chair; the possibility of revitalizing long-moribund, anti-trade, anti-competition, anti-monopoly laws like the Sherman and Clayton Acts; and whether it's possible or not to find common ground with some members of the Republican right who claim to be troubled by overly-powerful corporate control of everything from Big Tech to Big Grocery...
(Snail mail support to "Brad Friedman, 7095 Hollywood Blvd., #594 Los Angeles, CA 90028" always welcome too!)