Audit D.C. Notes: The Post Explains Competing Stern Narratives; NYT on the Revolting Revolving Door, John Kay on the Failures of Economics

Since Politico’s Ben Smith reported Andy Stern’s planned exit from SEIU on Monday, there have been competing narratives applied to the move. The Journal said he was leaving “amid turmoil,” and focused on “increasing financial strains and costly legal battles with other unions.” Harold Meyerson said Stern was leaving “at the height of his power,” and noted that the departure “comes on the heels of several notable victories.”

But if you had to pick just one piece to read about Stern, I’d go with the Post’s news story by Alec MacGillis, which manages to explain how all that can be true at the same time.

Many labor supporters who hailed Stern as a savior are disillusioned. They say that his push to expand membership too often involved cutting deals with employers at the expense of favorable terms for workers. They are alarmed at the vicious internal fights that Stern has picked with a large California chapter and the hotel workers union, disputes that have drained resources and riven the movement when it could have taken advantage of a Democratic-controlled White House and Congress.

The rancor surrounding these internal battles — and the charge from the SEIU’s rivals that its tactics are undermining union democracy — have undercut organized labor’s push for its top priority, legislation to make it easier to organize workers, many in the movement say. Overall, they say, the rise of Stern’s own star has failed to lift the prospects of the cause he sought to lead.

If you want to read a second piece, take a look at John Judis in The New Republic, who brings some nice perspective to the Stern story.

Stern’s legacy is somewhat like that of John L. Lewis, but not in a way that Stern or Lerner imagined. Lewis revived his own union in the ’30s, as well as the labor movement itself, by organizing the CIO. But he was also a contentious man who brooked no opposition within his union. After the 1936 election, he erratically veered to the left and then the right. He backed Wendell Willkie over Franklin Roosevelt in 1940. He quit the CIO that year. He rejoined and then again left the AFL. He was a rugged individualist who dreamed of creating a new cooperative movement, but whose insistence on doing things his way or not at all finally undid his best intentions. Does that sound familiar?

That kind of historical analysis is all too rare these days.

The New York Times gets some help from two Washington research groups in its tough look at how Wall Street is beefing up its lobbying power by hiring former members of Congress and Hill staffers. As the Times notes, the revolving door is a D.C. fixture, “but in recent years, the migration from Congress to the financial services firms that are trying to stave off greater federal regulation has become more pronounced.”

Check out these details:

An analysis by Public Citizen found that at least 70 former members of Congress were lobbying for Wall Street and the financial services sector last year, including two former Senate majority leaders (Trent Lott and Bob Dole), two former House majority leaders (Richard A. Gephardt and Dick Armey) and a former House speaker (J. Dennis Hastert).

In addition to the lawmakers, data from the Center for Responsive Politics counted 56 former Congressional aides on the Senate or House banking committees who went on to use their expertise to lobby for the financial sector.

Nice work. Is it any wonder the industry knows what it’s doing when it comes to pushing back against stiffer regulation?

—Does the phrase “dynamic stochastic general equilibrium” scare you? Fear not. The FT’s John Kay explains it all, in a smart column dedicated to what he politely calls “the failures of economics in the recent crisis.”

Both the efficient market hypothesis and DSGE are associated with the idea of rational expectations – which might be described as the idea that households and companies make economic decisions as if they had available to them all the information about the world that might be available. If you wonder why such an implausible notion has won wide acceptance, part of the explanation lies in its conservative implications. Under rational expectations, not only do firms and households know already as much as policymakers, but they also anticipate what the government itself will do, so the best thing government can do is to remain predictable. Most economic policy is futile.

Now he tells us.

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Holly Yeager is CJR's Peterson Fellow, covering fiscal and economic policy. She is based in Washington and reachable at