Opinion

David Rohde

America’s good bank

David Rohde
Jan 27, 2012 21:36 UTC

It didn’t take a penny in federal bailout money. It grew throughout the financial crisis. It has consistently garnered top customer service rankings. And Fortune magazine just named it one of the 20 best companies to work for in America. Meet America’s good bank: USAA.

USAA is a San Antonio, Texas-based bank, insurance, and financial services company with 22,000 employees, serving 8 million current and former members of the military and their families. The company’s roots go back to 1922, when 25 army officers agreed to insure one another’s cars when no traditional companies would. Since then, USAA, or the United Services Automobile Association, has steadily grown.

By its very definition, USAA serves the middle class. It does business only with current and former members of the military and their families. Studies have shown that the U.S.’s all-volunteer military is dominated by members of the middle class, not the elite.

While other financial and insurance companies flirted with collapse, USAA’s net worth grew from $14.6 billion in 2008 to $19.3 billion in 2011. And it has continued lending money while other banks have tightened their loan operations despite billions in government funding to encourage liquidity. It has a free checking account, has been at the forefront of electronic banking, and reimburses up to $15 in other banks’ ATM fees. Its credit card rates are 43 percent lower than the national average.

The firm’s structure is one of its most interesting attributes. Unlike nearly every other Fortune 500 company, USAA is not a corporation.  It is an inter-insurance exchange made up of the people who have taken out policies with the firm. As a group, they are insured by each other and simultaneously own the company’s assets. Instead of paying stockholders, USAA distributes its profits to its members. In 2010, it distributed $1.3 billion.

The world according to Romney

David Rohde
Jan 20, 2012 01:25 UTC

Update: Given yesterday’s results in South Carolina, I clearly shouldn’t have called Romney the Republican party’s “presumptive nominee.” For a critical look at a Gingrich administration foreign policy, take a look at this analysis by The Atlantic’s Max Fisher. Here’s my Jan. 20th take on Romney’s foreign policy.

Declare China a currency manipulator. Impose harsh sanctions on Iran. Build a missile shield against Russia. Keep American troops in Afghanistan. Halt negotiations with the Taliban. Visit Israel on first presidential trip. And add 100,000 soldiers to the U.S. army.

To be sure, as a former moderate Governor of Massachusetts, Mitt Romney needed to out-chest-thump his Republican rivals to become the party’s presumptive nominee. But don’t expect Romney to tack to the center in this year’s general election.

White House: The American middle class is shrinking

David Rohde
Jan 13, 2012 19:12 UTC

In a speech in Washington on Thursday, the chairman of President Obama’s Council of Economic Advisers said that the American middle class has been shrinking since 1970. Princeton University economist Alan Krueger said the American middle class shrank from 50.3 percent of American households in 1970 to 42.2 percent in 2010. Krueger defined the middle class as households with annual incomes within 50 percent of the national median income. Here is a table presented describing his findings.

 

Later in the speech, Krueger cited well-known studies describing growing income inequality in the United States. His claim about a shrinking middle class, though, appears to be new. While researchers have in the past argued that the middle class is shrinking, both Democratic and Republican administrations have generally steered clear of giving an exact definition of the middle class. Apparently fearing that an exact definition could backfire on them if the economy performs poorly, administrations have vowed to defend the middle class but avoided specifics. Given the central role that the state of the middle class will play in the 2012 presidential campaign, all of that may be different this year. To me, that’s a step forward.

Talk to the Taliban

David Rohde
Jan 12, 2012 22:28 UTC

WASHINGTON — As American officials scramble to contain the fallout from an appalling video showing Marines urinating on dead Taliban fighters, news that the Obama administration is carrying out secret negotiations with the Taliban has barely registered on the American political landscape. The lack of interest in the talks – and public outrage at the video – reflects how little Americans apparently care about the conflict, despite its staggering human and fiscal cost.

Since 2001, the war in Afghanistan has killed at least 8,000 Afghan civilians, 5,500 Afghan police and soldiers, 1,800 American soldiers and 900 soldiers from other nations.

Thousands of Taliban fighters have died as well, according to American military estimates, but no reliable figure exists. While suffering heavy casualties in set-piece battles, the Taliban have excelled at suicide attacks, roadside bombs and propaganda that portrays American forces as abusive occupiers. The video showing Marines urinating on Taliban corpses – a hugely offensive act to Muslims and a potential war crime – will only reinforce that image.

Yes, we’re creating jobs, but how’s the pay?

David Rohde
Jan 5, 2012 22:50 UTC

Update: The December job numbers released this morning continued the same trend described in yesterday’s column. Of the 200,000 new jobs created last month, 78,000 – or nearly 40 percent — were in transportation, warehousing and retail, sectors known for low pay and seasonal hiring. In a far more positive sign, manufacturing gained 23,000 workers in December after four months of little change. A vast expansion of that trend would benefit the middle class tremendously.

WASHINGTON — Between now and November, middle class Americans are going to hear an enormous amount of bragging about job creation.

Mitt Romney will tout his role in the creation of Staples, The Sports Authority and Domino’s, three firms that he says created 100,000 jobs. Barack Obama will say 2.9 million jobs have been created since March 2010, and highlight a surge of 140,000 new private sector jobs in November.

  •