ACCOUNTABILITY FOR INSURRECTION AND DOMESTIC TERRORISM

Now that we’ve all had a bit of time to get more information and to reflect on the insurrection and domestic terrorism that occurred at the U.S. Capitol on January 6, I wanted to share two information sources that I found valuable in helping me understand that event, as well as to share some reflections on it. I use the terms insurrection and domestic terrorism purposefully because they are accurate terminology for what happened – as are sedition [1] and treason [2]. I believe it’s important to call the events and the behavior what they are. The significance of what occurred is demeaned by simply referring to it as a protest or a violent mob. I believe it is also important to call out the racism, as well as the white and male supremacy, that were central to and at the root of the chain of misinformation, brain washing, and other events that led to what occurred on January 6.

I strongly urge you to listen to Bill Moyers (one of my long-time heroes) on his Moyers on Democracy podcast interviewing Heather Cox Richardson (rapidly becoming one of my heroes) as they discuss the domestic terrorist attack on the Capitol and the current political situation in the U.S.  Richardson’s historical perspective (she’s a history professor at Boston College) is valuable for putting the attack in perspective. The podcast is 40 minutes and is well worth listening to. Or you can read the transcript. https://billmoyers.com/story/podcast-bill-moyers-and-heather-cox-richardson/

I also found Rachel Maddow’s show on January 7 valuable. First, she reviews the events of the 6th with videos and interviews that provide additional information on how violent and threatening the insurrection was and how close Members of Congress came to being personally confronted or captured by the terrorists. Then, she highlights passages from the book On Tyranny and interviews its author (at 21 minutes into the show). She follows this with a video of the arrest in the Capitol Rotunda in 2017 of five non-white ministers, including Raphael Warnock (who was just elected to the U.S. Senate in Georgia), for a peaceful protest of praying and singing (at 36 minutes into the show). This is followed by an interview with Sherrilyn Ifill, President of the Legal Defense Fund of the NAACP. These latter portions of the broadcast are the ones I found most valuable for gaining perspective on the seriousness of the January 6 events and the importance of holding perpetrators and enablers accountable. https://www.nbc.com/the-rachel-maddow-show/video/rachel-maddow-1721/4282029

The information and perspectives from these sources and others have left me even more convinced that everyone who participated in and enabled these acts of sedition, treason, insurrection, and terrorism needs to be held accountable. The people who stormed the Capitol should be arrested and tried. Thank God D.C.’s strict gun laws discouraged them from bringing guns or I bet there would have been more bloodshed.

Those who contributed to building the false story that the election was stolen are complicit and need to be held accountable. Many of those who stormed the Capitol were motivated by their belief that the election had been stolen and there are many more people across the country who hold this dangerous belief as well. Those who are responsible include Republican Members of Congress, the media and especially the social media platforms, lawyers involved in claiming non-existent election fraud, and others who through silence or action gave credence to the false narrative of a stolen election. This includes the wealthy Americans, corporate leaders, and corporations who have supported politicians who promoted the stolen election story with campaign donations and otherwise, including the President and Members of Congress. There are various ways to hold these co-conspirators accountable, but they all should be held accountable in one way or another.

Some people are now referring to the Republican Party as the Insurrection Party, a name it deserves unless it takes active, very public steps to eliminate the Trump cult and its seditious behavior from its leadership and membership. It would also need to repudiate or reform many policies it supports that undermine democracy, including voter suppression and gerrymandering. Its leaders, many of them Members of Congress, must stop putting their personal political ambitions ahead of their oath of office, i.e., their pledge to uphold the Constitution and our democracy.

The goal of my blog is to promote democracy – government of, by, and for the people – through polices that move us toward the principles and ideals of our democracy, such as social and economic justice. I try to avoid taking sides politically. I have strongly criticized Democrats for their very significant role in our growing economic inequality and their failure to address some social justice issues, such as our criminal justice system. However, the dominant attack on democracy and social and economic justice of the last four years has come from President Trump, his administration, and his Republican enablers in Congress. Therefore, I feel I must, at this time, single out the Republican Party for its undemocratic, to say the least, behavior.

Our country and all of us need to seriously tackle the racism and white privilege, as well as the white and male supremacy, that are at the root of the chain of misinformation, brain washing, and other events that led to what occurred on January 6. Racism and white privilege were not only evident in the explicit messages of the terrorists, but also, as has been widely noted, in the difference between the treatment of these largely white “protesters” and the treatment last summer of the diverse protesters, especially the Black protesters, who were calling for racial and social justice. The arresting and handcuffing of non-white ministers peacefully praying and singing in the Rotunda to protest budget cuts (shown on the Rachel Maddow show) stand in stark contrast to what happened in the Rotunda and the Capitol on January 6.

The big picture for our country is that the insurrection was an attempt to overthrow our democracy by stopping the peaceful transition of power based on a legitimate election. If the insurrection had ultimately been successful, it would have resulted in an authoritarian, fascist [3] government, where the rule of law would be ignored, and where control would rest with a small group of wealthy elites, primarily business executives and owners. I do not use these terms lightly; they are accurate labels for the behavior and rhetoric of Trump and his cult. The trend toward plutocracy [4] and oligarchy [5] has been going on for 40 years in the U.S. as income and wealth inequality have skyrocketed due to federal government policies by and for wealthy individuals and corporations.

I will close by repeating the bottom line of my previous post: Please contact your Members of Congress and ask them to immediately begin impeachment proceedings against President Trump for sedition and incitement of domestic terrorism. Please also ask them to contact the Vice President and the Cabinet to encourage them to invoke the 25th Amendment and remove Trump from power.

Furthermore, the Members of Congress who have aided or abetted the efforts to overturn a clearly valid election have violated their oath of office and should be investigated by Congress’s Ethics Committee and censured or expelled from Congress.

There must be accountability and consequences for the President and others who fostered this domestic terrorism, otherwise it will happen again, sooner or later, and may well be worse next time.

You can find contact information for your US Representative at  http://www.house.gov/representatives/find/ and for your US Senators at http://www.senate.gov/general/contact_information/senators_cfm.cfm.

[1]      Sedition: conduct or speech inciting people to rebel against the authority of the state.

[2]      Treason: the crime of betraying one’s country, especially by attempting to overthrow the government.

[3]      Fascist: far-right, authoritarian, ultra-nationalistic government characterized by dictatorial power and forcible suppression of opposition.

[4]      Plutocracy: government by the wealthy.

[5]      Oligarchy: control of a country by a small group of people.

REMOVING TRUMP AND CO-CONSPIRATORS FROM OFFICE

I urge you to contact your Members of Congress and ask them to immediately begin impeachment proceedings against President Trump for treason and incitement of domestic terrorism to overthrow the U.S. government. Please also ask them to contact the Vice President and the Cabinet to encourage them to invoke the 25th Amendment to remove Trump from power.

Trump must be removed NOW by any legal means before he does more harm. He is a clear and present danger to the country, both in terms of domestic matters and because his and his administration’s instability makes our country vulnerable to a foreign military, cyber, or terrorist attack anywhere in the world.

Furthermore, the Members of Congress who have in any way aided or abetted Trump’s efforts to overturn a clearly valid election have violated their oath of office and should be investigated by the Ethics Committee, potentially leading to their expulsion from Congress. This should also apply to any Members of Congress who aided, abetted, or gave encouragement to the domestic terrorist mob that invaded the Capitol.

There must be accountability and consequences for the President and others who fostered this domestic terrorism, otherwise it will happen again, sooner or later, and may well be worse next time.

You can find contact information for your US Representative at  http://www.house.gov/representatives/find/ and for your US Senators at http://www.senate.gov/general/contact_information/senators_cfm.cfm.

BIDEN’S OPPORTUNITY TO IMPROVE ECONOMIC SECURITY WITH PROGRESSIVE POLICIES

Looking ahead to 2021, many challenges face the country and President-elect Biden. Most of them have negatively affected the economic well-being of many Americans,  including the pandemic, the lack of racial justice, and the economic recession. All of them and others (e.g., climate change) can and should be addressed in a way that will improve the economic security of working and middle-class Americans. This would also go a long way toward restoring their faith in government and their belief that government can and is working for their benefit and not just for the benefit of big businesses and the wealthy.

Since the 1990s, the Democratic Party has joined the Republican Party in aligning itself with large corporations and the wealthy elites that run and own them through deregulation, trade deals, and tax policies that work to their benefit. As a result, the middle class has been decimated and blue collar, often unionized, workers have lost their economic security; 90% of Americans have lost ground economically over the last 30 years. Income and wealth inequality have spiraled to levels unseen since the 1920s and the economy of the 1950s and 1960s that lifted all boats has disappeared. [1]

Abandoned by the Democratic Party, which traditionally had stood up for them, white, blue collar workers and their families have been convinced to support demagogues, including Trump, who promote divisive, anti-immigrant, racist, reactionary, and undemocratic policies.

To address mainstream Americans’ loss of economic security, Biden must implement  progressive policies that will enhance their economic well-being. The public strongly supports such policies as poll after poll shows. For example, polls find that: [2]

  • 68% believe our tax system should require the wealthy to pay more,
  • 75% support paying higher income taxes to support health care, education, welfare, and infrastructure, and
  • 92% say they would rather live in a country with a low level of income inequality than one with high inequality.

There also was plenty of evidence of support for progressive policies and candidates in the 2020 election results. (See my previous post on this topic for some details.)

A key factor contributing to economic insecurity and inequality, and one Americans clearly understand, is that large corporations and their executives and lobbyists have undue influence on U.S. policies. By margins of more than two-to-one they don’t want President Biden appointing corporate executives or lobbyists to positions in his administration. Roughly 75% of poll respondents say that an administration official overseeing or regulating an industry they have a connection to is a “big problem” and about 90% say it is at least “a little bit of a problem.” The public knows that the so-called “revolving door” between positions in large corporations and ones in government lead to policies that benefit the corporations and their wealthy executives and investors. Sixty-seven percent of respondents, including 60% of Republicans, say that this revolving door is “corrupt and dangerous.” [3]

In government, personnel is policy. In other words, the personnel in key positions in the Biden administration will strongly influence who benefits from policies and their implementation – the working and middle-class or the upper class and big businesses. Therefore, it is important that Biden select people for his administration who are committed to working for the good of the people and not for the economic elites, many of whom are big campaign donors.

President Biden has two main avenues for creating needed policy changes: executive actions and legislation. These two are complementary and should both be used. Getting progressive legislation passed by Congress will be difficult even if Senate control is nominally with the Democrats (i.e., with a 50-50 split among Senators if Democrats win the two Georgia runoffs). But Senator Warren and others have shown that bipartisan legislation is possible even in the current contentious and polarized environment in Congress. Her successes include making hearing aids more affordable, enhancing consumer protection in various financial transactions, strengthening oversight and regulation of the financial industry, expanding access to affordable housing, and reining in abuses in housing financing. (I will write a post about this in the near future.)

There are also literally hundreds of executive actions that a Biden administration could take that are well within its existing authority. As many as 277 such actions have been enumerated by the writers at the American Prospect magazine and the document produced by the Biden-Sanders unity taskforce at the end of the Democratic primary last summer. They include steps to make our tax system fairer, to strengthen the safety net (including unemployment benefits and housing and food assistance), to expand access to health care and lower drug prices, to increase pay and benefits for employees of federal contractors, and to make it easier for workers to bargain collectively for better pay, benefits, and working conditions. (I will write a post about possible executive actions in the near future.)

I encourage you to contact your U.S. Senators and Representative to express your support for issues you would like to see them address in 2021, including policies such as the examples above that would improve the economic security of mainstream Americans. You can find contact information for your US Representative at  http://www.house.gov/representatives/find/ and for your US Senators at http://www.senate.gov/general/contact_information/senators_cfm.cfm.

You can get information and sign-up for updates from the Biden-Harris transition at https://buildbackbetter.gov/.

[1]      Lemann, N., 10/19/20, “Losing ground: the crisis of the two-party system,” The Nation (https://www.thenation.com/article/politics/let-them-eat-tweets-the-system-never-trump/)

[2]      Hightower, J., Nov. 2020, “Timeless truths for trying times,” The Hightower Lowdown (https://hightowerlowdown.org/article/timeless-truths-for-trying-times/)

[3]      Demand Progress, Dec., 2020, “Americans want a progressive Biden administration,” (https://s3.amazonaws.com/demandprogress/reports/Americans_Want_A_Corporate-Free_Biden_Administration.pdf)

REPUBLICANS ARE ALREADY UNDERMINING BIDEN’S PRESIDENCY

Republicans, led by President Trump and Senator Mitch McConnell (KY), are already  undermining Senator Biden’s presidency. This is all about politics. They want the Biden presidency and the Democrats to be unable to do much to help working people and the economy because that will make it easier for them to win seats in Congress in 2022 and the presidency in 2024. This is the same reason that Sen. McConnell said at the beginning of each of Obama’s terms as president that his goal was to keep Obama from passing any legislation.

Trump and McConnell are working to ensure that Biden begins his presidency with crises to face: a high number of COVID cases; an economy in a shambles; a safety net with as many holes in it as possible; angry divisions in the country over election results, racism, and immigration; and international crises with Iran and China and in Afghanistan and the Middle East.

Moreover, Trump and McConnell are trying to limit the resources and flexibility that President Biden has to tackle these crises. They are undermining efforts to control the pandemic and provide economic relief by:

  • Letting the coronavirus spread with no effort from the federal government to slow it,
  • Retracting funding Congress has appropriated for pandemic relief from the Federal Reserve and perhaps other agencies or programs, and
  • Refusing to pass any significant pandemic relief and predicating any relief on the elimination of employer and business liability for workers or customers who get COVID.

Normally, the outgoing president defers important decisions to the incoming president and refrains from making personnel changes in his lame duck period. George W. Bush did so after Obama was elected and Obama did so for Trump. However, Trump is doing just the opposite. He is aggressively replacing personnel at the Defense Department and elsewhere. He is issuing executive orders and making personnel policy changes that will make it hard for President Biden to undo his actions. He is appointing partisan loyalists to scientific and advisory panels, weakening environmental regulations, and repealing health care regulations. He is carrying out executions, giving out oil drilling leases on public lands, and withdrawing troops from Somalia and Afghanistan. He is inflaming tensions with Iran, which will make it harder for President Biden to re-engage Iran in a treaty to block its ability to build a nuclear bomb. (Iran now has twelve times as much enriched uranium as it would have had if Trump hadn’t abrogated the Iran nuclear accord.) Some of Trump’s advisors have been upfront in stating that their actions are meant to limit President Biden’s policy options. [1]

Treasury Secretary Mnuchin is taking multiple actions that will prevent President Biden from having the flexibility to quickly use remaining resources from the March relief bill to respond to economic hardship. Mnuchin announced that on December 31 he will suspend the Treasury Department’s lending program that supports businesses and local governments. He is also requiring the Federal Reserve to return about $250 billion that was appropriated for pandemic relief and putting $455 billion into a fund that will require congressional authorization before Biden can spend it. [2] Even the U.S. Chamber of Commerce, the lobbying arm of big corporations, objected to Mnuchin’s actions and called for Congress to pass additional pandemic relief to support the economy. David Wilcox, a former chief economist for the Federal Reserve, said, “The most obvious interpretation is that the Trump administration is seeking to debilitate the economic recovery as much as possible on the way out of the door.” [3] [4]

Senator McConnell has refused to act on a $3 trillion pandemic relief bill the House passed in May, despite a call from 125 bipartisan economists for a relief package to address the economic crisis, which includes quickly escalating poverty as the benefits of the March relief bill expire. (Just about the only business McConnell has the Senate doing is approving right-wing federal judges.) As poverty and hunger are surging across the country, key components of a relief bill are enhanced unemployment benefits, aid to state and local governments, and increased food assistance. Some sustained relief will be needed until the pandemic is under control and the economy has recovered. [5]

Aid to state and local governments is critical because, faced with plunging tax revenue, they have cut 1.3 million jobs since February. There is no more effective, tried and true way of reducing unemployment and supporting economic recovery than providing aid to state and local governments; we know this from the 2008 recession. If families don’t have jobs and income, if parents can’t work because schools and child care are closed, local economies suffer. Every dollar of assistance to state and local governments boosts local economies by $1.70 due to the spending and re-spending of that dollar as it cycles through local workers and businesses. [6]

Senator McConnell appears to be more focused on limiting the liability of corporations when workers or customers get COVID than providing relief to workers, such as unemployment benefits for the 12 million workers whose benefits will run out before the end of December. He is also talking about imposing austerity on the federal government by focusing on cutting the deficit during Biden’s presidency. He wasn’t concerned about the deficit when President Trump increased it to levels not seen since World War II or when he cut taxes in 2017 for wealthy individuals and corporations, which increased the deficit by over one hundred billion dollars a year. Furthermore, austerity, i.e., cutting federal spending, will weaken and slow the economic recovery, hurting all Americans other than the wealthy, as we know from the aftermath of the 2008 recession. [7]

Despite the good news that vaccines will be ready for distribution soon, Republicans in Congress and the White House are not even talking about providing the funding needed to distribute the vaccines, which is estimated to be $30 billion. It also appears that there’s no or little planning happening in the Trump administration for vaccine distribution. With over a thousand people dying daily of COVID, one would think this would be a bipartisan priority, but Republican politics appear to trump even this essential public health initiative. [8]

Trump, McConnell, and many other Republicans are putting politics ahead of the best interests of the country and its people. This is sabotage and treasonous. We must all speak up against this unprecedented, corrupt behavior. I urge you to contact your U.S. Representative and Senators and ask them to take action to provide necessary relief in the face of this pandemic and to ensure a smooth and respectful transition to the Biden presidency.

You can find contact information for your US Representative at  http://www.house.gov/representatives/find/ and for your US Senators at http://www.senate.gov/general/contact_information/senators_cfm.cfm.

[1]      Shear, M. D., 11/22/20, “Trump using last days to lock in policies and make Biden’s task more difficult,” The Boston Globe from The New York Times

[2]      Mohsin, S., 11/25/20, “Mnuchin to put $455 billion in funds out of Yellen’s easy reach,” The Boston Globe from Bloomberg News

[3]      Richardson, H. C., 11/24/20, “Letters from an American blog post,” (https://heathercoxrichardson.substack.com/p/november-24-2020

[4]      Smialek, J., & Rappeport, A., 11/20/20, “Mnuchin to end some emergency Fed programs,” The Boston Globe from The New York Times

[5]      Johnson, J., 11/24/20, “ ‘Go big, and stay big’: Economists call for $3 trillion Covid relief package to stop nation’s descent into ruin,” Common Dreams (https://www.commondreams.org/news/2020/11/24/go-big-and-stay-big-economists-call-3-trillion-covid-relief-package-stop-nations)

[6]      Tahmincioglu, E., 8/25/20, “The way out through state and local aid,” Economic Policy Institute (https://www.epi.org/blog/state-and-local-aid-bipartisan-economists-video/)

[7]      Johnson, J., 12/2/20, “Critics smell ‘economic sabotage’ as McConnell unveils Covid plan with $0 for unemployment boost, direct payments,” Common Dreams (https://www.commondreams.org/news/2020/12/02/critics-smell-economic-sabotage-mcconnell-unveils-covid-plan-0-unemployment-boost)

[8]      Dayen, D., 11/30/20, “Unsanitized: The COVID-19 Report for Nov. 30, 2020,” The American Prospect (https://prospect.org/coronavirus/unsanitized-vaccine-distribution-gaps-transparency-funding/)

FACEBOOK KNOWINGLY PROMOTES DISINFORMATION

Facebook (FB) facilitates an accelerating spread of disinformation; this is widely recognized and well-documented. (See my previous post on this.) Facebook allows toxic speech and dangerous misinformation to spread unchecked on its monopolistic platform. This affects and infects our public discourse and knowledge base, undermining the health of our democracy. However, stopping it runs counter to Facebook’s economic interests because increased activity, regardless of its content, is what increases its revenue. [1]

Recently, damning evidence has come to light of Facebook’s manipulation of its News Feed to favor right-wing sources that are known to be deceptive over trustworthy news sources.

In late 2017, Facebook was in the process of making significant changes in the computer programming code or algorithm it uses to determine which of the overwhelming plethora of sources each of us is shown in our Facebook News Feed. It claimed it was working to bring people together and to prioritize trusted and informative news sources.

It was uncovered recently that FB ran experiments with its first iteration of a revised News Feed algorithm that revealed it would dramatically curtail the dissemination of right-wing, less-than-trustworthy sites, such as Breitbart, the Daily Wire, and the Daily Caller. FB’s software engineers were told to modify the algorithm to reduce the negative effects on these right-wing sites.

A second iteration of the new algorithm was ready in January 2018 and its effects were presented to senior executives at FB. The data showed that it reversed the curtailment of right-wing, less-than-trustworthy sites and instead curtailed distribution of progressive-leaning, credible news sources. The presentation included bar charts showing the impact on a dozen or so specific news sources.

This second iteration of the new News Feed algorithm was, nonetheless, put into use, based in part on support from FB’s Vice President of Global Public Policy, Joel Kaplan, and right-wing-leaning employees working for him. (Kaplan would later loudly support his friend Brett Kavanaugh during Kavanaugh’s Supreme Court confirmation hearings.) This was not the first time Kaplan had acted to promote right-wing disinformation. For example, in December 2016, when an internal investigation found that a group of FB accounts, mostly based overseas, were behind a lot of the promotion of right-wing disinformation, Kaplan objected to disabling these accounts because “it will disproportionately affect conservatives.” He also has defended and protected right-wing sites that violated FB policies, opposing sanctions on them. [2]

The new News Feed algorithm expanded dissemination of content from the right-wing Daily Wire that routinely shares false content and spreads malicious stories such as ones describing being transgendered as a “delusion,”  calling abortion providers “assassins,” and labeling progressive members of Congress as not “loyal to America.” On the other hand, the new algorithm reduced dissemination of content from left-leaning Mother Jones magazine that provides rigorously fact-checked reporting and investigative journalism that has won it numerous journalism awards, including seven National Magazine Awards (three times for General Excellence). It has also been a National Magazine Award finalist 24 other times. In 2017, it won the Magazine of the Year award from the American Society of Magazine Editors.

In the six months after implementation of the changes in Facebook’s News Feed algorithm, FB traffic to trustworthy, left-leaning Mother Jones articles declined 37% from the previous six months. This means that the over one million Mother Jones followers and others on FB saw fewer of its articles in their News Feeds. On the other hand, over the summer of 2020, the deceptive right-wing Daily Wire had more Facebook engagement (i.e., likes, comments, and shares) than any other English-language publisher in the world. [3]

These data belie Zuckerberg’s claim when he announced the News Feed changes in January 2018 that the goals were “bringing people closer together” and fighting “sensationalism, misinformation and polarization.” He didn’t mention that he and FB were tipping the scales to favor less-than-factual right-wing sources.

Why did this happen? Facebook was tweaking its News Feed algorithm because user engagement was falling, which threatened its revenue and stock price. Zuckerberg and FB may also have wanted to avoid antagonizing Trump and the right-wing Republicans in power in the federal government, thereby reducing the likelihood that they would attack FB either verbally or through government investigations and regulations. Right-wing and “conservative” politicians had been criticizing FB for “liberal” bias (without evidence). A former Facebook employee said that it was made clear  that changes to the News Feed algorithm could not hurt Breitbart, Trump-advisor Steve Bannon’s mouthpiece.

Facebook uses its monopolistic power to determine which publishers’ content the public sees. This power of selective partial censorship and propaganda promotion is Big Brother-type power that we all should be concerned about and fear. Free speech in today’s America  is relative; it is based on how much money one has to broadcast one’s voice or on how FB treats you. Zuckerberg’s claim that he supports unfettered free speech is disingenuous given that FB tips the scales to favor certain sources and disfavor others.

FB’s marketplace power and dissemination of harmful disinformation need to be addressed by government policies and regulations. Slowing the spread of  misinformation and malicious content from a handful of the most active and therefore most harmful sites would have a dramatic effect.

Facebook should be held accountable for disseminating false, misleading, or inflammatory content. Regulation is one way to do this and competition is another. As a monopolistic platform lacking competition, FB has no incentive to do anything but pursue profits and/or Zuckerberg’s personal agenda. FB should be regulated like a monopolistic utility as the phone company once was or as private electricity and gas utilities are. Anti-trust laws should be used to stop FB’s anti-competitive practices and its acquisitions of Instagram and WhatsApp should be reversed. Competition should be facilitated, for example, by creating a not-for-profit, free to users, Internet platform for responsible information sharing and journalism akin to public radio and TV.

I’m not a heavy FB user so my expertise on its on-the-ground operation is limited. Therefore, I welcome your suggestions on how we can send a message to Facebook and Zuckerberg that will be heard loudly and clearly on the issue of the quality of content in its News Feed as well as other issues such as its repeated violations of users’ privacy. Would a one-day boycott where we don’t log into FB be effective? Or would a week where we never click on a FB ad be more meaningful? What else can we do? In addition, of course, to lobbying our elected officials to rein in Facebook and Zuckerberg with regulations and anti-trust laws.

[1]      Alba, D., 10/13/20, “False info thriving on social media,” The Boston Globe from The New York Times

[2]      Bauerlein, M., & Jeffrey, C., 10/21/20, “Facebook manipulated the news you see to appease Republicans, insiders say,” Mother Jones (https://www.motherjones.com/media/2020/10/facebook-mother-jones/)

[3]      Bauerlein, M., & Jeffrey, C., 10/21/20, see above

OUR ELECTIONS ARE RIGGED Part 2

Our elections are indeed rigged – by Republicans and the country’s wealthy capitalists to skew results to their benefit. One of their strategies is to reduce voting by those who are not part of their primary constituency of well-off, white voters. [1] My previous post describes the four main barriers to voting that states have been imposing. Studies show they disproportionately disenfranchise non-white, low-income, student, and/or elderly voters, groups who tend to vote for Democrats:

  • Imposing voter identification requirements
  • Reducing places and times for voting
  • Purging eligible voters from voter registration lists
  • Denying people with a felony conviction the right to vote

There are a variety of strategies that are being used to suppress voter participation in general and participation by likely Democratic voters in particular, in addition to the four above. In some states, Republican gerrymandering of state legislative districts has given Republicans undeserved power to enact barriers to voting. In Wisconsin, for example, in 2018, Democrats won a majority of the statewide vote for the state legislature (52%) but got only 36 of 99 seats in the legislature (36%).

Voter suppression strategies being used in various places across the country include:

  • Impeding voter registration: While some states are making it easier to register to vote, for example through election day registration and automatic voter registration at motor vehicle offices and other state agencies, many Republican-controlled states are making it harder to register. For example, some states have made the process for conducting voter registration drives so onerous that the effect has been to ban them. In Georgia, in 2018, the Secretary of State (who oversees elections and was a white male running against a Black woman for Governor) was charged with blocking the registration of 50,000 voters (80% of whom were non-white) due to minor discrepancies in the spelling or spacing of their names. [2]
  • Failing to update voter registration systems with address changes: Without up-to-date addresses for people who move frequently, e.g., young people, students, and low-income workers, these voters (who tend to vote for Democrats) do not receive ballots or voting information, and hence are less able and likely to vote.
  • Undermining confidence in our elections: Spreading lies about the existence of voter fraud and the validity and honesty of our elections creates skepticism about the importance of voting. Failure to combat foreign efforts to affect the outcome of our elections and to undermine faith in their credibility also damages voters’ enthusiasm for voting. Calling ballots that are counted after election day fraudulent (for example, mailed-in ballots that were postmarked on time) contributes to the false perception that our elections are dishonest. All of these techniques and other related ones undermine voters’ motivation to turnout to vote.
  • Providing misinformation about voting and registering to vote: This is a classic “dirty trick” used to confuse voters and keep them from registering to vote and from voting.
  • Creating barriers to or doubts about mail-in or absentee ballots: The President and some Republican-led states are erecting barriers to mail-in voting because it has been shown to increase voter participation, which does not work to their benefit. In addition, the President, in particular, is trying to sow doubt about the validity and effectiveness of mail-in voting despite its very successful use in many states, including as the sole method of voting in Oregon since 1998. Some states are making it complicated to correctly complete a mail ballot. In Alabama, for example, the signature on an absentee ballot must have two witnesses or a notarization. [3] A complicated process increases the likelihood that ballots can be disqualified due to a technical error in completing them and most states do not have a process for remedying a minor technical error; the ballot is simply not counted. Some states are setting strict deadlines for receipt of mail ballots (e.g., they must be received by election day not just postmarked by election day). In one county in Florida, 1,200 ballots were not counted for being too late despite being postmarked on time. And, as I imagine you’ve heard, the Trump administration is working to harm the U.S. Postal Service’s ability to process mail in a timely fashion. Finally, some states prohibit the opening of mail ballots until election day or even until the polls have closed. This delays the finalization of election results and gives Republicans the opportunity to assert that the late counting of ballots is indicative of fraud, as they did in Florida in the 2000 presidential election.
  • Intimidating voters: In Pennsylvania, the Republicans have sued all 67 counties to allow Republican-hired, outside “poll watchers” at the polls. Poll watchers such as these have typically been used to harass, challenge, and intimidate targeted voters, namely those who are likely to be voting for Democrats. They do this by, for example, demanding proof of eligibility to vote. They are typically deployed in low-income, non-white neighborhoods and sometimes wear uniforms and carry badges, cameras, and guns. This kind of intimidation was so bad back in 1982 that a federal judge imposed restrictions on activities that might intimidate voters. However, in 2018, with the Trump campaign’s support, these restrictions were lifted. [4]
  • Refusing to give workers time to vote: In most states, election day is not a holiday and most employers do not give workers time off (let alone paid time off) to vote, although this may be starting to change.
  • Negative campaigning: Negative messages and nasty campaigning create disillusionment with candidates (whether the information is true or not) and with voting in general. The result is lower voting participation both in general and for the targeted candidate.

Republicans have amassed a $20 million fund to bring lawsuits aimed at reducing voting and blocking the counting of ballots, such as provisional ballots cast by people whose voter registration was purged or blocked by voter suppression techniques. In Florida, for example, Republicans have sued to prevent postage-paid return envelopes from being sent with mail-in ballots, hoping to reduce the rate at which they are returned. In Nevada, they have sued to prevent the state from sending mail-in ballots to all registered voters.

President Lyndon Johnson called voting “the first duty of democracy”. However, President Trump and Republicans in Congress and in the states have been doing everything they can to denigrate that duty and to make it as hard as possible for those likely to vote for Democrats to fulfill their duty to vote. [5] This is stunningly unpatriotic and in violation of our Constitution and the founding principles of this country. Democracy’s foundational principle is that all citizens have a right and duty to vote. Undermining the ability to vote and the importance of voting are antithetical to democracy.

There are steps we can take to increase voter participation and, thereby, improve the health of our democracy. Steps to make it easy to vote and to block strategies inhibiting voting are occurring in the courts and in some states. The battle over allowing voting by those convicted of felonies in Florida has gone through three levels of courts already and is on-going, although it appears likely that 775,000 of them will not be able to vote this fall. In Virginia, where Democrats gained control of the state government in the 2019 election, they have repealed the state’s voter ID law, made election day a state holiday, expanded the early voting period to 45 days, and implemented automatic voter registration for people using services from the Department of Motor Vehicles. Mail-in ballots will have pre-paid postage and drop boxes for returning them will be installed throughout the state. Voters will be able to fix technical errors on mail-in ballots, while absentee ballots will no longer require a witness’s signature. [6] In North Carolina, a Democratic Governor, a state Board of Elections with a non-partisan leader, and court orders have reversed the tide in a state that was one of the leaders in voter suppression in 2016. [7]

The ultimate solution is a national one, namely reinstituting the protections that were in place under the Voting Rights Act before the Supreme Court disingenuously eviscerated it in 2013. To this end, I encourage you to contact your U.S. Representative and Senators and let them know you support the Voting Rights Advancement Act, which passed the House in December 2019 but has not been acted on by the Senate. In addition, our election systems need extra financial support to operate safely, effectively, and accurately during the current pandemic. To this end, I also urge you to let your Members of Congress know you support the VoteSafe Act and the funding for election systems in the House-passed HEROES Act. [8] Given that the Republicans in control of the Senate are not likely to act on these bills this year, in the meantime, encourage your state and local election officials to make it as easy as possible for all eligible voters to register and vote.

To live up to our principles, every citizen needs to be readily able to fulfill that first duty of democracy – to vote.

You can find contact information for your US Representative at  http://www.house.gov/representatives/find/ and for your US Senators at http://www.senate.gov/general/contact_information/senators_cfm.cfm.

[1]      Hightower, J., 9/1/20, “Six ways the Right is shredding the right to vote,” Common Dreams from The Hightower Lowdown (https://www.commondreams.org/views/2020/09/01/six-ways-right-shredding-vote)

[2]      Durkin, E., 10/19/18, “GOP candidate improperly purged 340,000 from Georgia voter rolls, investigation claims,” The Guardian (https://www.theguardian.com/us-news/2018/oct/19/georgia-governor-race-voter-suppression-brian-kemp)

[3]      Bidgood, J., 9/20/20, “Alabama: ‘They’re doing everything to stop us from voting’,” The Boston Globe

[4]      Hightower, J., 9/1/20, see above

[5]      Graham, R., 9/14/20, “Vote!” The Boston Globe

[6]      Gibson, B., 9/14/20, “How Virginia made voting easier and fairer,” The American Prospect (https://prospect.org/politics/how-virginia-made-voting-easier-and-fairer/)

[7]      Kuttner, R., 9/16/20, “Election night could be smoother for Senate races,” The American Prospect (https://prospect.org/blogs/tap/election-night-could-be-smoother-for-senate-races/)

[8]      Fudge, M., 9/21/20, “The struggle to vote continues,” The Boston Globe

MAKE THE POST OFFICE GREAT AGAIN

The scandalous behavior of Louis DeJoy, the Trump administration’s new Postmaster General for the U.S. Postal Service (USPS), has gotten quite a bit of attention in the mainstream media; my previous two posts presented at least some of the rest of the USPS story. (My last post described the efforts to undermine and privatize the USPS, and, on the other hand, growing interest in reviving postal banking. My previous post described DeJoy’s Friday night massacre of personnel and the role of Treasury Secretary Mnuchin in the USPS shenanigans.)

In case you missed it, two new scandals have emerged involving the Trump administration’s leaders at the USPS. First, Postmaster General DeJoy faces multiple allegations that he pressured employees of his private business to make political contributions and rewarded employees if they did so with bonuses or raises. If true, this is a blatant violation of campaign finance laws. [1] Second, Robert Duncan, the chairman of the USPS Board of Governors (which formally appointed DeJoy), is a long-time major Republican fundraiser (as DeJoy is). Duncan recently was identified as one of three directors of a Republican Super PAC that has already spent nearly $18 million supporting Senate Republican candidates in the 2020 elections. Senate Majority Leader Mitch McConnell basically controls this Super PAC. Duncan’s long-time relationship with McConnell and his role with the Super PAC are coming under scrutiny as concerns are growing about political manipulation of the USPS. [2]

Here are a number of actions and policy changes that Congress should initiate to restore and strengthen the USPS and its ability to deliver quality services, which would make the USPS great again. After all, it is a public good that connects us with each other and supports our democracy and our economy. [3]

  • Investigate Postmaster General DeJoy and ultimately remove and replace him with a qualified, non-partisan leader.
  • End the Treasury Department’s and Secretary Mnuchin’s control over and involvement with the USPS.
  • Repeal the provisions of the 2006 Postal Accountability and Enforcement Act that require the USPS to pre-fund its retiree benefits and instead allow the USPS to account for its retiree benefits and present its finances using Generally Accepted Accounting Principles.
  • Repeal the provisions of the 1970 Postal Reorganization Act that require the USPS to be considered a private business and instead treat it like a public agency and a public service.
  • Rescind restrictions on the USPS’s operations and, for example, allow it to pursue postal banking to provide a valuable service to unbanked Americans and others poorly served by private, for-profit financial corporations.
  • Remove the requirement that the USPS invest its retiree benefits funds solely in Treasury Bonds; no private retirement fund would do this and it negatively affects investment returns and, therefore, increases costs for the USPS.
  • Explore the possibility of enrolling retirees in Medicare to more efficiently provide retiree health benefits.

These steps would allow the USPS to provide efficient, quality, universal service, while providing good jobs for its workers. They would stabilize and normalize the finances of the USPS and benefit the public.

DeJoy, Mnuchin, and Trump are engaged in sabotage of the USPS, plain and simple. They want to discredit it as a public agency, undermine its union workers, and shift its revenue to private companies (namely their friends and campaign contributors).

I urge you to contact your U.S. Representative and Senators to tell them that you support the U.S. Postal Service and oppose efforts to undermine it. Please also ask them to support postal banking to provide affordable and convenient basic financial services to the public, particularly low-income households. Private banks have failed to provide such services to many Americans and payday lenders have emerge to fill this gap but are taking advantage of desperate low-income workers.

You can find contact information for your US Representative at  http://www.house.gov/representatives/find/ and for your US Senators at http://www.senate.gov/general/contact_information/senators_cfm.cfm.

[1]      Queally, J., 9/6/20, “ ‘This is against the law and DeJoy must be fired’: Postmaster General accused of criminal violation of campaign laws,” Common Dreams (https://www.commondreams.org/news/2020/09/06/against-law-and-dejoy-must-be-fired-postmaster-general-accused-criminal-violation)

[2]      Johnson, J., 9/1/20, “ ‘The corruption is bottomless’: Documents reveal chair of postal service board is Director of McConnell-allied Super PAC,” Common Dreams (https://www.commondreams.org/news/2020/09/01/corruption-bottomless-documents-reveal-chair-postal-service-board-director-mcconnell)

[3]      Anderson, S., Klinger, S., & Wakamo, B., 7/15/19, “How Congress manufactured a postal crisis – and how to fix it,” Institute for Policy Studies (https://ips-dc.org/how-congress-manufactured-a-postal-crisis-and-how-to-fix-it/)

ENHANCED UNEMPLOYMENT BENEFITS NEEDED BY WORKERS – AND BUSINESSES

The enhanced unemployment benefits provided by the federal government expired this week and whether Congress will extend them is unknown. The federal program added $600 per week to the unemployment benefits provided by the states, which vary substantially from Mississippi’s $235 per week to Massachusetts’s $795. The amount received typically depends on how much a worker was earning and, in some states, the amount can increase based on the number of dependents a worker has.

Republicans are claiming that the added $600 per week serves as a disincentive for people to return to work and therefore this program should not be continued. It is possible that a few people would choose to continue to collect the enhanced unemployment benefit and not go back to work, but this number and its impact would be negligible, especially when compared to the positive effects of continuing the enhanced unemployment benefit.

The assertion that large numbers of workers wouldn’t go back to work is a myth with racist overtones as its premise is that many of “those people” are lazy and happy to collect welfare or other public benefits rather than work. [1]

Here are five reasons that make the case for continuing the enhanced unemployment benefit and that rebut the argument that doing so would mean workers wouldn’t return to work.

First, roughly 24.5 million Americans are unemployed, largely due to the coronavirus pandemic, and need financial assistance. Many of these workers simply cannot support their families on the unemployment benefit amounts provided by their states and a significant number of these families would fall into poverty without the enhanced benefit.

Second, given that consumer spending is roughly two-thirds of economic activity in the U.S., the enhanced unemployment benefit means people have money to spend, which keeps our economy and businesses going. Putting this money directly into workers’ pockets is one of the most effective ways to counter the economic slowdown of the pandemic. If all 24.5 million people without jobs were collecting the $600 per week federal supplement, that would be $14.7 billion that workers would be receiving. The great majority of that would be spent immediately on living expenses. That’s $14.7 billion a week that would not be spent in the U.S. economy if these benefits stop. It is estimated that the loss of this spending would result in the loss of 5.1 million jobs. [2]

Third, Americans were returning to work in record numbers and the unemployment rate was falling in May and June even though the enhanced unemployment benefit was being paid. Clearly, people want to work even if their unemployment benefit is greater than what they would get paid to work, given that for two-thirds of those who qualify for unemployment benefits the enhanced benefit is greater than what they were paid at work. (The fact that the enhanced unemployment benefit is more than they earned is a sad commentary on our low minimum wage and the low wages paid by many employers.) Workers know that the unemployment benefit is temporary and that they can lose the benefit if they aren’t actively looking for work, so if a job is available, the great majority of them will take it. [3]

Fourth, the still high unemployment rate (over 11% at the end of June) reflects the lack of available jobs. Workers can’t be incentivized by reduced benefits to take jobs that don’t exist. Moreover, the biggest disincentive to returning to work is the danger of becoming infected with the coronavirus, which is killing over 1,000 Americans a day.

Fifth, cutting unemployment benefits, when paid sick leave is far from universal, increases the risk that workers will go back to work even if they don’t feel well or have been exposed to the coronavirus because they would need the income from work if they aren’t getting the enhanced unemployment benefit. This obviously increases the risk they will spread the coronavirus to co-workers, customers, and others they come in contact with at work or in getting to and from work. This risk is exacerbated by the difficulty of getting a test for COVID-19 and the lack of quick availability of test results.

For all these reasons, not to mention a basic sense of fairness and humane decency, the $600 per week enhanced unemployment benefit from the federal government should be continued. I urge you to contact your U.S. Representative and your Senators and ask them to support the continuation of this emergency unemployment benefit. Please do this NOW as this decision may well be made this week as part of the pandemic relief bill currently moving through Congress.

You can find contact information for your US Representative at  http://www.house.gov/representatives/find/ and for your US Senators at http://www.senate.gov/general/contact_information/senators_cfm.cfm.

 

[1]      Editorial, 7/30/20, “No, unemployment benefits do not discourage work,” The Boston Globe

[2]      Sainato, M., 7/13/20, “Millions of U.S. workers still unemployed as enhanced benefits set to expire,” The American Prospect (https://prospect.org/coronavirus/millions-workers-still-unemployed-as-benefits-expire/)

[3]      Editorial, 7/30/20, see above

RECENT EXAMPLES OF A RIGGED ECONOMIC SYSTEM

Here are some recent examples of how our rigged economic system favors wealthy individuals and big corporations.

In the CARES Act, the $2.2 trillion coronavirus pandemic response, Republican Senators slipped in a tax break that will give each of 43,000 wealthy business owners a $1.6 million tax cut, on average. Hedge fund investors and owners of real estate businesses (including President Trump and his family) will receive the great majority of this tax cut windfall. [1]

Overall, the CARES Act provides $135 billion in tax cuts for the richest 1% of Americans. This is money that could have been used to provide aid to workers who lost their jobs or to buy personal protective equipment for front-line workers.

Moreover, the Trump Administration and Republicans in Congress are considering a variety of additional tax cuts for investors and businesses for the next pandemic relief bill. [2] Supposedly, these tax cuts will stimulate the economy and help it return to normal, but what they really do is make the rich richer. And while Trump and the Republicans claim that there should be no more spending on unemployment and payments to individuals because we’ve spent enough, tax cuts are simply spending before the fact of revenue collection rather than after the fact. Conceptually, there is no difference, other than who gets the money.

Perhaps the ultimate indication of how rigged our economic system is, is that the wealth of billionaires in the U.S. increased almost $600 billion or 20% between March 18 and June 17 as the pandemic crushed the lives and livelihoods of mainstream Americans. The 643 U.S. billionaires, who are overwhelmingly white males, saw their aggregate wealth increase from $2.9 trillion to $3.5 trillion, an increase of about $1 billion a piece, on average. [3] [4]

Meanwhile, working and middle-class households lost $6.5 trillion in wealth and over 45 million Americans applied for unemployment insurance. The 643 billionaires’ increase in wealth was twice as much as what the federal government spent on the one-time stimulus checks that went to 150 million Americans.

The billionaires and other wealthy individuals have used their incredible wealth to gain extraordinary influence over our politics and policy making. This led to the tax cuts in the CARES Act, in the 2017 Tax Act, and on numerous other occasions. As a result, the taxes paid by these billionaires decreased by 79% as a percentage of their wealth from 1980 to 2018. [5]

As another indicator of a rigged economic system, as the pandemic hit in early 2020 only the richest 20% of U.S. households had regained the same level of wealth that they had had prior to the Great Recession of 2008. The other 80% of households were still struggling with the economic hangover of the 2008 financial industry crash. The 400 wealthiest billionaires, on the other hand, recovered their wealth in three years and in ten years had increased their wealth by over 80%.

On the corporate front, corporations are rewarding their investors, i.e., shareholders, while laying off their workers. For example, Caterpillar closed three facilities in late March and two weeks later made a $500 million distribution to shareholders. Levi Strauss announced on April 7th that it would stop paying workers and furloughed about 4,000 over the following month. Nonetheless, it paid $32 million to shareholders in April. Stanley Black & Decker announced furloughs and layoffs on April 2nd, but within two weeks issued a $106 million dividend to shareholders. [6]

You may recall that in August 2019 the chief executives of 181 companies from the Business Roundtable released a statement announcing that companies should deliver value to customers, workers, and suppliers, as well as shareholders. To-date, three of the executives who signed that statement – ones from Caterpillar, Stanley Black & Decker, and Steelcase – have furloughed workers while paying dividends to shareholders.

In our rigged economic system, the capitalists in government bailout capitalists (i.e., business owners and investors), not workers, home owners, parents, students, schools, states and cities, our social services, or our so-called safety net. Even small businesses get left behind as wealthy investors and corporations are taken care of first and foremost. This was evident in the 2008 bailout after the collapse of the financial and mortgage sectors and it’s evident again in the response to this pandemic.

I urge you to contact your U.S. Representative and Senators and to tell them that pandemic relief should go to workers, middle-class and low-income households, and small businesses. Not only is this what would be fair and democratic, this would support our economy because two-thirds of economic activity is consumer purchases. If consumers can buy, they will keep the economy going and create demand for the goods and services businesses produce. Bailouts to corporations and investors will make them wealthier but will do little to keep the economy going and very little to help the mainstream residents of America.

You can find contact information for your US Representative at  http://www.house.gov/representatives/find/ and for your US Senators at http://www.senate.gov/general/contact_information/senators_cfm.cfm.

[1]      Stein, J., 4/14/20, “Tax change in coronavirus package overwhelmingly benefits millionaires, congressional body finds,” The Washington Post

[2]      Tankersley, J., 5/6/20, “Trump considers tax-cut proposal for new bill,” The New York Times

[3]      McCarthy, N., 6/22/20, “U.S. billionaire wealth surged since the start of the pandemic,” Forbes

[4]      Americans for Tax Fairness, 6/18/20, “3 months into COVID-19 pandemic: Billionaires boom as middle class implodes,” (https://americansfortaxfairness.org/issue/3-months-covid-19-pandemic-billionaires-boom-middle-class-implodes/)

[5]      Collins, C., 5/11/20, “Billionaires are getting even richer from the pandemic. Enough is enough,” CNN Business (https://www.cnn.com/2020/04/28/perspectives/inequality-coronavirus-billionaires/index.html)

[6]      Whoriskey, P., 5/6/20, “Amid layoffs, investors reap dividends,” The Boston Globe from The Washington Post

THE CONSUMER FINANCIAL PROTECTION BUREAU IS NEEDED TO PROTECT US FROM PREDATORY LENDING

The 2008 financial crash was triggered by predatory mortgage loans. As a result, the Consumer Financial Protection Bureau (CFPB) was created to protect consumers from dangerous financial products. There’s a Consumer Product Safety Commission to protect us from dangerous physical products, but prior to the creation of the CFPB, there wasn’t an agency dedicated to protecting consumers from dangerous financial products, such as predatory mortgages and other predatory loans.

Predatory loans are loans where the lender isn’t concerned about the borrower’s ability to repay the loan. In many cases, the lender is just as happy – and may benefit financially – if the borrower defaults on the loan. Predatory lenders usually target people who are desperate for cash or dying to purchase a home, a car, or a consumer product they can’t afford. The loans typically charge very high interest rates, as well as high fees for obtaining the loan and big penalties for failing to meet the terms of the loan, such as being late on a loan payment.

Unethical, deceptive, and/or blatantly fraudulent practices are almost inevitably part of predatory lending. These practices include lying to consumers about the interest rate, fees and other charges, or future payments. Borrowers are often convinced to accept unfair terms through deceptive, coercive, or unscrupulous statements and actions. A predatory lender may add costs for insurance or other services that the borrower doesn’t need or benefit from by presenting them deceptively or as a requirement for the loan.

Predatory lenders routinely target the poor, minorities, the elderly, people with low levels of education, those who don’t understand English well, and people who don’t understand loans or finances well.

Predatory lending is what free market capitalism looks like without regulation. It occurs across the financial industry when good regulation and enforcement aren’t in place, from student loans to car loans and from mortgage loans to payday loans.

Predatory lending is the bread and butter of much of the financial industry as it is a source of big profits. Therefore, the financial industry has fought hard against the CFPB and its efforts to regulate lending since the day the CFPB was conceived.

As a specific example, the predatory lending industry fought a CFPB rule known as the payday lending rule. Promulgated under the Obama administration, it required lenders to assess customers’ ability to repay their loans. This was unwelcome, to say the least, in an industry that makes huge sums of money by charging high fees when customers miss a loan payment (as the lender often expected they would) and then rolling the loan over into a new loan so they can repeat this process over and over. [1]

The predatory lending industry bought access to and influence in the Trump administration by making millions of dollars of contributions to Trump’s campaign and engaging in heavy lobbying. Trump replaced the Obama-appointed Director of the CFPB with a person who is much friendlier to the financial industry.

In addition to an industry-friendly Director, Trump further undermined the work of the CFPB by appointing Christopher Mufarrige as an “attorney-advisor” to the Director. Mufarrige had been the owner of a car dealership that used the “Buy Here Pay Here” model of selling used cars, which provides on-the-spot loans to buyers with poor credit ratings. The loans carry high interest rates and Mufarrige was quick to repossess the car if there was a default, i.e., a late payment. Then, he would sell the same car again and do the same deal all over again.

Mufarrige’s business was covered by the CFPB’s payday lending rule that required a lender to assess each borrower’s ability to repay. Mufarrige had stated that this rule was flawed and unnecessary. Nationwide, Buy Here Pay Here model car dealers were making $80 billion in loans annually and an investigation by the New Jersey Attorney General found that roughly one-quarter of their customers default on their loans.

Mufarrige and other political appointees at the CFPB used false statistics and manipulated evidence to claim there was no value to the requirement to assess a borrower’s ability to repay. This allowed the CFPB to justify proposing watered-down regulation of the payday lending industry that does not require it to assess customers’ ability to repay their loans.

Another example of the need for CFPB regulation of predatory financiers is Progressive Leasing, LLC, (a subsidiary of Aaron’s Inc.), which has as its mission “to provide convenient access to simple and affordable purchase options for credit challenged consumers.” It offers rent-to-own programs through major retailers at over 30,000 stores (including Best Buy, Lowe’s, Big Lots, and Kay Jewelers). In effect, its programs are predatory loans to consumers who can’t afford to pay for their purchases up-front.

Progressive Leasing, LLC, has just settled with the Federal Trade Commission (FTC) for the second time in three months over complaints that it uses deceptive practices. It leads customers to believe they are not being charged extra for financing their purchase. In reality, many customers end up paying more than double the sticker price of the item they purchased. In its training materials, Progressive Leasing instructs retail sales staff to say there isn’t an interest rate associated with the rent-to-own program because it is not a loan. They don’t inform customers of the fees and other charges that are part of the program. [2]

In April, Progressive Leasing paid $175 million to settle claims that it misled consumers after having paid another $175 million in February to settle claims about its disclosure practices. Despite tens of thousands of customer complaints, Progressive Leasing had continued to use the same practices. One FTC Commissioner said the most recent penalty did not go far enough, noting that customers had paid Progressive Leasing more than $1 billion in undisclosed fees and charges.

The Consumer Financial Protection Bureau is badly needed to protect consumers from the greed and unethical behavior of unrestrained lenders. Capitalism without regulation will prey on all of us when we are most in need of financial assistance. The financial industry has shown time and again that without good regulation and enforcement it will ruin people’s lives and our nation’s economy.

I urge you to contact your U.S. Representative and your Senators and ask them to support and protect the integrity of the Consumer Financial Protection Bureau. Encourage them to advocate for strong regulation and enforcement of responsible behavior in the financial industry.

You can find contact information for your US Representative at  http://www.house.gov/representatives/find/ and for your US Senators at http://www.senate.gov/general/contact_information/senators_cfm.cfm.

[1]      Dayen, D., 5/4/20, “CFPB appointee who helped water down payday lending rule operated a high-cost auto lender,” The American Prospect (https://prospect.org/power/cfpb-appointee-helped-water-down-payday-lending-rule/)

[2]      Bhattarai, A., 4/21/20, “Leasing company agrees to pay $175m,” The Boston Globe from the Washington Post

THE TRUMP ADMINISTRATION’S SWAMP OF CORRUPTION Part 2

President Trump campaigned on a promise to drain the Washington, D.C., swamp of special interests and insider dealing. This is one promise he clearly hasn’t kept – and probably never meant. I provided some background on this and an overview of the personal corruption of Trump and his family in my previous post.

The level of corruption – of special interests running our government for their own benefit and of outright self-enrichment by individuals in the Trump administration – is stunning. The American Prospect magazine has begun mapping the Trump Swamp of conflicts of interest and unethical behavior agency by agency. [1] They have created an interactive map of Washington where you can click on an agency’s headquarters building and get highlights of the swamp of corruption at each agency.

Here are some examples of Trump appointees who have on-going conflicts of interest, have oversight of industries they used to work in (and may well work in again), and/or have committed serious ethical violations: [2]

  • Steve Mnuchin, Secretary of the Treasury, a former Goldman Sachs (GS) partner. His specialty at GS was mortgage securities, which were at the heart of the 2008 economic collapse. He capitalized on the collapse by buying a failing bank and foreclosing on 36,000 homeowners, many of whom were elderly and who had been targeted with high-risk reverse mortgages, supposedly intended to keep them in their homes. Furthermore, he simultaneously collected federal subsidies that were meant to keep people in their homes. At the Treasury, he has weakened regulation of banks and reduced scrutiny of financial activities, which benefits his colleagues still in the financial industry (and to which he will likely return). Under Mnuchin, the Treasury has provided favorable tax rulings for wealthy individuals and businesses, again rewarding his former colleagues. It also put forth tax regulations that were almost identical to those proposed by a group of large corporations. It tweaked the rules for Opportunity Zone tax credits so they would be more available to real estate magnates including Jared Kushner (Trump’s son-in-law), Chris Christie (former Governor of New Jersey), Richard LeFrak (longtime Trump associate in NYC), Anthony Scaramucci (former White House aide), and Michael Milken (longtime Mnuchin friend and convicted junk bond dealer).
  • Elaine Chao, Secretary of the Department of Transportation (DOT), heiress to a shipping company fortune. While her DOT regulates international shipping, her family runs a huge international shipping business that has ship building done by Chinese government-linked entities, while also getting hundreds of million dollars of loans from them. Numerous actions by Chao and DOT have benefited the family business, including cutting subsidies for competing shippers, public appearances with her father, and a joint trip with him to China to meet with government officials. Until June 2019, she also owned an investment in a manufacturer of road construction materials, an industry very much affected by DOT policies. She sold this investment only when the holding was publicly reported. Kentucky (which her husband, Sen. Mitch McConnell, represents) has seen its transportation projects receive favorable treatment. Kentucky has received at least $78 million in DOT grants, including for a project rejected twice before. A former aide to Sen. McConnell, now a top aide to Chao, provides special attention for Kentucky projects.
  • Wilbur Ross, Secretary of Commerce, a former private equity manager. His firm paid a $2.3 million fine in 2016 for unethically siphoning $120 million from former associates. Companies his firm controlled found ways to escape obligations to provide workers pensions and health benefits. After he became Secretary, and with his department regulating shipping, he retained ownership in a shipping company with ties to Russian oligarchs and members of Russian President Putin’s family. As Secretary, he personally negotiated a deal to ship liquified natural gas (LNG) to China while his shipping company owned the world’s largest fleet of LNG tankers. Ross has conferred on official business with leaders of government-controlled funds in Qatar, Japan, and Singapore who had invested in his private equity firm. He had official meetings with the CEOs of Chevron and Boeing, while his wife held investments in those corporations of $400,000 and $2 million, respectively.
  • Betsy DeVos, Secretary of the Department of Education (DOE), rich, major campaign contributor with no expertise in education other than advocacy for charter schools. For numerous top jobs at DOE, she has hired former employees of private, for-profit college companies that had paid fines or signed legal settlements for deceptive advertising. The DOE has maintained the flow of federal funds (via student loans) to for-profit schools with questionable track records, while insisting that students defrauded by private colleges continue to make loan payments. The DOE also effectively stopped the public-service loan forgiveness program, requiring tens of thousands of teachers, nurses, police officers, and others to continue to pay off their student loans. She has done nothing to help ease the $1.5 trillion student debt crisis, despite promises by President Trump to do so.
  • David Bernhardt, Secretary of the Department of the Interior, former partner in a Denver law and lobbying firm that represented mining, oil, and gas companies. He disclosed 20 separate conflicts of interest, but nonetheless acted at least 25 times to benefit former clients of his law firm. His former law firm has quadrupled its revenue since he became Secretary.
  • Andrew Wheeler, head of the Environmental Protection Agency, a former lawyer and lobbyist for the coal industry.
  • Alex Azar, Secretary of Health and Human Services, a former executive of the giant drug corporation, Eli Lilly, where dramatic increases in drug prices were a common practice.

The list goes on and on and includes many staffers in these and other agencies. Overall, as-of October 2019, less than three years into Trump’s term, there are 281 former lobbyists working in the Trump administration, four times as many as the Obama administration hired in six years.

This is not how a democracy is supposed to operate, let alone our democracy, which is supposed to be the exceptional shining light on the hill. This is how a plutocracy operates – where government is of, by, and for the wealthy.

I urge you to contact your U.S. Representative and Senators to ask them to investigate the conflicts of interest, the self-enrichment, and the ethics of the many members of the Trump administration identified in The American Prospect’s expose. Please ask your Senators to refuse to confirm any Trump appointee with conflicts of interest or histories of unethical behavior. Because of current vacancies and the high level of turnover, additional appointments of senior officials will continue to come before the Senate.

You can find contact information for your US Representative at  http://www.house.gov/representatives/find/ and for your US Senators at http://www.senate.gov/general/contact_information/senators_cfm.cfm.

[1]      Lardner, J., 4/9/20, “Mapping corruption: Donald Trump’s executive branch,” The American Prospect (https://prospect.org/power/mapping-corruption-donald-trump-executive-branch/)

[2]      Lardner, J., 4/9/20, see above

REMEDIES FOR THREATS TO OUR ELECTIONS

My previous post highlighted threats to our election and voting systems. There are remedies for these threats, including the new and exacerbated ones due to the corona virus pandemic.

Surprisingly, there are lessons about cybersecurity that we should learn from Estonia. As a former state within the Soviet Union, it has decades of experience with Russian propaganda. It also has over a decade of experience dealing with Russian cyberattacks. In 2007, Russian hackers executed the first politically motivated cyberattack against a nation, bringing down much of Estonia’s Internet. They disabled government, newspaper, and bank websites. In response, Estonia built a Cyber Defense League based on a small staff and budget ($300,000) and a network of hundreds of volunteers. The volunteers do public education and plan simulated cyberattacks to test the government’s response. Estonia also has an ambassador at-large for cyber diplomacy and a federal Information System Authority that includes a cyber emergency response team. [1]

Estonia’s national government offers free cybersecurity trainings and screenings to candidates and political parties. In the lead-up to each election, it holds a hackathon where security experts try to break into the country’s election systems. Any vulnerabilities and the steps taken to fix them are publicly reported. The State Electoral Office has a working group that meets daily during elections to monitor the media and identify disinformation campaigns.

When Estonia joined NATO in 2004, it proposed hosting a center for cyber defense. Initially, NATO members were cool to the idea, but after Russia’s attack on Estonia in 2007, NATO agreed to create the NATO Cooperative Cyber Defense Center of Excellence housed in Tallinn, Estonia. It now hosts the largest cyber defense exercise in the world with over 1,200 participants from nearly 30 countries. In April 2019, the exercise’s scenario involved a coordinated cyberattack during a national election that affected vital services and also sought to manipulate public perception of the election results.

Estonia has become the model for countries working to counter Russian (and other) electronic meddling. It has developed cybersecurity expertise and a secure on-line voting system (over 40% of Estonians vote on-line). It requires high school students to take a 35-hour course on media and manipulation.

A key underlying element of Estonia’s preparedness for election meddling is broad public understanding that cybersecurity requires eternal vigilance, a sense of urgency, and a unity of purpose that leads to coordination among public agencies and private entities. These elements have, unfortunately, been lacking in the U.S. due to the lack of urgency from the Trump administration and Republicans in Congress about meddling in our elections.

To address cybersecurity and the other threats to our elections, and to ensure that everyone can vote safely and securely the U.S. needs to do the following: [2]

  • Establish an overarching national strategy on election security that coordinates efforts by governments, the private sector, academia, and the public,
  • Replace paperless voting machines with ones that have a paper backup and audit trail,
  • Expand alternative voting opportunities such as early voting and mail-in voting,
  • Enhance the ease of voter registration (e.g., on-line and same day registration) and the security of voter registration databases,
  • Provide federal funding to states to enhance voting systems and election-related security,
  • Increase oversight of and security requirements for vendors of voting systems,
  • Establish national standards for voting machines, registration databases, and voting procedures (e.g., post-election audits to verify the accuracy of results) to ensure that every eligible voter can vote safely and securely, and
  • Enhance the monitoring and response to misinformation and foreign attempts to influence our elections.

I urge you to contact your state election agency, often the Secretary of State, as well as your local, state, and national elected officials to encourage them to enhance the security and user-friendliness of our voting and election systems and procedures.

We need to make it as easy and as secure as possible for every citizen to vote!

[1]      Bryant, C. C., 2/4/20, “Cybersecurity 2020: What Estonia knows about thwarting Russians,” The Christian Science Monitor (https://www.csmonitor.com/World/Europe/2020/0204/Cybersecurity-2020-What-Estonia-knows-about-thwarting-Russians)

[2]      Brennan Center for Justice, retrieved 3/20/20, “Defend our elections,” (https://www.brennancenter.org/issues/defend-our-elections)

UNDER-TAXED CORPORATIONS AND WAYS TO MAKE THEIR TAXES FAIRER

A year’s worth of data on what corporations are actually paying in taxes under the 2017 Tax Cuts and Jobs Act (TCJA) is now available. The TCJA cut the stated federal corporate income tax rate to 21% from 35%, a 40% reduction. It created many new tax breaks and loopholes, while (supposedly) closing some existing ones. However, as a previous post highlighted, corporations have been lobbying vigorously, and in many cases successfully, to have the rules and regulations implementing the TCJA weaken or eliminate its closing of tax breaks and loopholes.

An in-depth review of the financial filings of the Fortune 500 largest corporations revealed that 379 of them were profitable in 2018 and found enough information to calculate an effective federal income tax rate for them. (Their effective tax rate is the portion of their profits they paid in federal income taxes.)

The average effective federal income tax rate for these 379 large, profitable corporations was 11.3%, which is barely half of the stated rate. Ninety-one (91) paid no federal income tax including Amazon, Chevron, Halliburton, and IBM. Another fifty-six (56) of them paid less than 5% of profits in taxes.

The 11.3% average rate is the lowest rate since this analysis was begun in 1984. [1]  The industries with the lowest effective federal income tax rates, all of which paid less than half of the stated rate, were:

  • Industrial machinery (which paid an average effective tax of a negative 0.6%, meaning that on average they got back money from the government)
  • Gas and electric utilities (-0.5%)
  • Motor vehicles and parts (1.5%)
  • Oil, gas, and pipelines (3.6%)
  • Chemicals (4.4%)
  • Transportation and also Engineering & construction (8.0%)
  • Miscellaneous services (8.3%)
  • Publishing and printing (9.8%)
  • Financial (10.2%)

Twenty-five very large corporations received the bulk of the tax breaks that led to these low effective tax rates. They received $37 billion in tax breaks, half of the $74 billion in tax breaks that all 379 corporations received. This is the result of their capacity to influence public policy through lobbying, campaign spending, and use of the revolving door. (Two previous posts here and here provide more details on corporate manipulation of public policies.)

Five of those very large corporations received more than $16 billion in tax breaks (22% of the total for all 379 corporations): Amazon, Bank of America, J.P. Morgan Chase, Verizon, and Wells Fargo.

Large corporations have succeeded in manipulating tax laws, including through the TCJA and its implementing rules and regulations, to unfairly reduce their taxes. This results in small businesses and individuals having to pay more taxes and to bear an unfair portion of the taxes needed to support government at the federal, state, and local levels. Furthermore, it means governments don’t have the resources they need to perform important functions that are in the public interest and desired by taxpayers.

Here are some examples of changes in tax laws that would lead to large corporations paying a fairer share of taxes: [2]

  • Remove tax incentives and loopholes that reward the shifting of profits and jobs to offshore entities. This includes effective implementation of provisions of the TCJA that were meant to address this problem but have been undermined by successful lobbying by multi-national corporations during the writing of implementation rules and regulations. (See this previous post for more details.)
  • Reinstate a corporate Alternative Minimum Tax to ensure that all profitable corporations pay a reasonable amount of income tax each year.
  • Repeal TCJA and previous tax law provisions that allow corporations to deduct expenses for equipment and other capital expenditures much more quickly than the equipment actually depreciates in value. This is an accounting “trick” that reduces profits and, therefore, income taxes.
  • Stop the fictitious creation of large expenses for granting stock options to executives. This is another accounting “trick” that reduces profits and, therefore, income taxes.
  • Require public disclosure of key corporate financial data, including profits and taxes paid, on a country-by-country basis as a routine part of corporate financial reporting. This transparency will allow policy makers and the public to understand whether corporations are paying a fair share of their income in taxes and to adjust policies accordingly.

I urge you to contact your U.S. Representative and Senators to ask them to fix corporate tax laws so that corporations, particularly large, multi-national corporations, are paying their fair share in taxes. Otherwise, you and I and the small businesses we patronize in our communities will continue to bear an unfair burden in funding the public services we need from our governments at all levels.

You can find contact information for your US Representative at  http://www.house.gov/representatives/find/ and for your US Senators at http://www.senate.gov/general/contact_information/senators_cfm.cfm.

[1]      Gardner, M., Roque, L., & Wamhoff, S., Dec. 2019, “Corporate tax avoidance in the first year under the Trump tax law,” Institute on Taxation & Economic Policy (https://itep.org/corporate-tax-avoidance-in-the-first-year-of-the-trump-tax-law/)

[2]      Gardner, M., Roque, L., & Wamhoff, S., Dec. 2019, see above

MEDICARE’S PROBLEMATIC PRIVATE OPTION

Medicare was created in 1965 when people over 65 found it virtually impossible to get private health insurance coverage. Medicare made access to health care a universal right for Americans 65 and over. It improved the health and longevity of older Americans, as well as their financial security. Initially, Medicare consisted solely of a public insurance program that included all seniors.

Today, a mixed public-private health insurance market exists under Medicare. An examination of it is very instructive in terms of how a mixed public-private system would be likely to work if extended to people under age 65. The Medicare-eligible population has been able to enroll in private health insurance plans since the 1980s. The private health insurance industry lobbied heavily for access to the large, Medicare market.

Private health insurers argued for a private option under Medicare, stating that they could deliver better quality services at lower cost due to their efficiencies, thereby saving Medicare money. Initially they were paid 95% of what a Medicare enrollee cost based on promised efficiencies. However, once they had their foot in the door, the private insurers successfully lobbied for their payment rate to be increased. In 2009, it was as high as 120% of what a senior enrolled in the traditional, public Medicare program cost.

Not only have private health insurers been getting paid more per enrollee than it costs the government to serve seniors in the traditional, public Medicare insurance pool, but they have healthier enrollees who cost less to serve! Clearly, these private Medicare plans, referred to as Medicare Advantage plans, have not been saving Medicare any money, but rather costing it more than it would have to serve these seniors directly. [1] [2] And there’s no evidence that they are providing better quality services that would justify such a high rate of reimbursement. The Affordable Care Act is now working to lower this over-payment to private insurers.

Since shortly after they began, the private Medicare Advantage plans have been getting over paid, and this is exactly what is likely to happen if private insurers are allowed to participate in a universal health insurance program for people other than seniors.

There are four main strategies the Medicare Advantage plans have used to get paid more than they should. Private insurers in a mixed market for non-seniors would be expected to do the same things: [3]

  • Cherry-picking: The private Medicare Advantage insurers have worked to enroll  healthier seniors who are less expensive to serve. Through targeted advertising, special benefits (e.g., subsidized health club memberships), and specialized outreach they have successfully attracted a healthier than average clientele. In the market for non-seniors, the private insurers can be expected to successfully work to attract younger, healthier, and therefore less expensive enrollees, leaving sicker and more expensive people for the public plan.
  • Lemon-dropping: The Medicare Advantage insurers have implemented strategies to get sick and expensive enrollees to drop out of their plans, even though this is ostensibly illegal under Medicare. For example, they limit access to providers of expensive specialty services, require high co-pays for expensive drugs, and put a complex approval process and other barriers in front of patients trying to access expensive care. The data from Medicare Advantage plans are clear, when patients need expensive services like dialysis or nursing home care they switch back to the public, traditional Medicare in large numbers because the private insurers make it difficult to access these services and get them paid for. In the market for non-seniors, the private insurers can be expected to drop or force out the sicker, more expensive patients, dumping this burden onto the public plan.
  • Over-reporting the seriousness of diagnoses: Medicare Advantage insurers report more and more serious diagnoses than they should. This makes their enrollees appear to be sicker than they are and therefore eligible for more or higher reimbursements from Medicare. For example, knee pain can be reported as arthritis and an episode of distress can be reported as major depression. Medicare’s occasional audits of Medicare Advantage insurers indicate that they are getting paid $10 billion annually for fabricated diagnoses and much more for what appear to be overly serious diagnoses. Private insurers in a non-seniors’ market can be expected to game the payment system this way too.
  • Lobbying Congress for generous payments: Over the 35 years of Medicare Advantage plans, the private insurers have cost Medicare more than it would have cost for Medicare to serve their enrollees directly because Congress has directed Medicare to pay the insurers higher premiums than are warranted. These higher premiums support Medicare Advantage plans’ 14% overhead (e.g., profits, advertising, and executive salaries), which is seven times more than Medicare’s overhead of only 2%. The over-payment of Medicare Advantage plans peaked in 2009 at around 120% of the per patient costs of traditional, public Medicare. Since then, the over-payments have been reduced by provisions of the Affordable Care Act (aka Obama Care). The private health care industry has lots of lobbying clout with Congress and can be expected to strongly and successfully lobby for favorable treatment under any expansion of health care coverage to non-seniors, as they did when the Affordable Care Act was being passed. At that time, for example, they were able to eliminate a public option plan from being offered because they were scared (perhaps even knew) that a public option like Medicare for All might well out-perform them.

As the debate about changing the U.S. health care system to a universal single-payer system, e.g., Medicare for All, has been unfolding, some opponents of a single-payer system have proposed a mixed system with both private health insurers and a public health insurance option, often referred to simply as a “public option.”

Unfortunately, a mixed public-private health insurance market for non-seniors won’t achieve the efficiencies and quality of a single-payer system as is evident in the Medicare Advantage experience. A single-payer system is the only way to both improve quality and control costs. (See this previous post for more details.)

I urge you to contact your U.S. Representative and Senators, as well as candidates in the 2020 election, and ask them where they stand on moving toward a single-payer health insurance system, e.g., Medicare for All. The health care and related industries will lobby strenuously against this, but in the end a single-payer health care system will provide better health care and health outcomes for Americans and will save us all a lot of money.

You can find contact information for your US Representative at  http://www.house.gov/representatives/find/ and for your US Senators at http://www.senate.gov/general/contact_information/senators_cfm.cfm.

[1]      Patel, Y.M., & Guterman, S., 12/8/17, “The evolution of private plans in Medicare,” The Commonwealth Fund (https://www.commonwealthfund.org/publications/issue-briefs/2017/dec/evolution-private-plans-medicare)

[2]      McGuire, T.G., Newhouse, J.P., & Sinaiko, A.D., 2011, “An economic history of Medicare Part C,” The Milbank Quarterly (https://www.ncbi.nlm.nih.gov/pmc/articles/PMC3117270/pdf/milq0089-0289.pdf)

[3]      Himmelstein, D.U., & Woolhandler, S., 10/7/19, “The ‘public option’ is a poison pill,” The Nation (https://www.thenation.com/article/insurance-health-care-medicare/

LOBBYING: HOW TO WEAKEN ITS INORDINATE INFLUENCE

Big companies and their wealthy executives and owners have inordinate influence on our supposedly democratic policy making. They wield their power through the cumulative impact of lobbying, campaign spending, and the revolving door of personnel going back and forth between the private and public sectors. This post presents some steps that can be taken to reduce the ability of lobbying to skew our public policies to the benefit of big business and the wealthy. (See my previous posts for background on lobbying and examples of how it works to thwart policies that benefit the public.)

Multiple proposals have been made for reining in lobbying. Senator Elizabeth Warren has probably made the most extensive and detailed proposal. [1] [2] It would:

  • Require everyone who is paid to influence government decisions to register as a lobbyist
  • Impose strict disclosure of whom lobbyists contact and what information is exchanged
  • Prohibit lobbying on behalf of foreign governments
  • Ban contributions to federal campaigns by federal lobbyists
  • Shut the revolving door between government positions and lobbying jobs
  • Tax any organization that spends more than $500,000 on lobbying in a year (see details below)

Senator Warren proposes a tax on companies spending over $500,000 in a year on lobbying. This would reduce the incentives for what she calls “excessive” lobbying and provide funding to counteract lobbying blitzes when they occur. Any organization that exceeded the $500,000 threshold would pay a 35% tax on lobbying expenditures from $500,000 to $1 million. For spending above $1 million, the tax would be 60% and it would increase to 75% for spending above $5 million.

Experts estimate that under this proposal, over the last ten years, 1,600 corporations and industry groups would have paid $10 billion in excessive lobbying taxes. Fifty-one of these organizations, including the U.S. Chamber of Commerce, fossil fuel-based Koch Industries, drug maker Pfizer, defense contractor Boeing, Microsoft, Walmart, and Exxon, would have paid the 75% rate every year due to lobbying expenditures of over $5 million in each of the last ten years.

The U.S. Chamber of Commerce is the biggest spender on lobbying and would have paid an estimated $770 million in taxes on over $1 billion in lobbying expenditures over the last ten years. The National Association of Realtors, Blue Cross Blue Shield, the pharmaceutical industry association, and the American Hospital Association are the next four organizations on the list of the biggest spenders on lobbying, each having spent between $200 million to $425 million on lobbying over the last ten years. The five industries paying the most in lobbying taxes would have been the pharmaceutical, health insurance, oil and gas, financial, and electric utility industries.

Under Warren’s proposal, the funds raised from the excessive lobbying tax would go into a new Lobbying Defense Trust Fund, which would be dedicated to blunting the influence of excessive lobbying and strengthening the voice of the public interest in policy making. The funding would be used to: [3]

  • Strengthen Congressional expertise so members aren’t relying on lobbyists for information and expertise. For example, the Congressional Office of Technology Assessment (which was eliminated by Speaker Newt Gingrich) would be resurrected and the Congressional Budget Office would be strengthened.
  • Support federal agencies that are facing an onslaught of lobbying. They would be provided funding, for example, to allow them to hire personnel to complete rule-making more quickly when being inundated by lobbyists’ comments, to which they are required to respond. When an organization goes over the $500,000 expenditure threshold (triggering the lobbying tax) and spends money lobbying against a proposed rule or regulation, the tax on the spending would go to the federal agency doing the rule-making to help it respond.
  • Establish a new Office of the Public Advocate that would fight for the public interest in the rule-making process.

Senator Sanders also has a plan to reduce the influence of businesses and their lobbying in policy making. It would prohibit political contributions by federal lobbyists. It also calls for a lifetime ban on lobbying by former members of Congress and senior Congressional staff. [4]

The ethics and election reform bill, H.R.1, the first bill introduced after Democrats took control of the House in 2016, would tighten lobbying regulations. It would reduce from 20% to 10% the amount of time an individual could spend on lobbying activities before having to register as a lobbyist. The American Bar Association, among others, has proposed eliminating the 20% threshold and replacing it with a less arbitrary and more enforceable criterion. Numerous calls for a lifetime ban on lobbying by former members of Congress have been put forth, but the effectiveness of such a law is questionable given the amount of shadow lobbying, i.e., lobbying activities by unregistered persons, that currently exists. [5]

Big companies and their wealthy executives and owners work relentlessly through lobbying, campaign spending, and the revolving door to block or weaken policy changes that would benefit workers and the public. They attack legislation as it goes through Congress. They work to get the President to oppose or veto proposed laws. Failing that, they work to block or weaken the implementation of laws, including the issuance of relevant rules and regulations. If they can’t block the issuing of rules or regulations, they sue in court to block their implementation. At best, this delays policy changes that would benefit workers and the public by years; often it succeeds in killing them completely.

I urge you to contact your elected officials at the federal level, and at the state and local levels too, and to ask them to pass laws that require full disclosure of paid lobbying activities. Ask them to ban campaign spending by lobbyists and to close the revolving door between public sector positions and related private sector jobs, including as lobbyists. Finally, ask them to use tax laws and other mechanisms to provide financial disincentives for excessive lobbying spending.

We need to take these steps to reduce the inordinate and undemocratic influence of companies and wealthy individuals in our policy making.

You can find contact information for your US Representative at  http://www.house.gov/representatives/find/ and for your US Senators at http://www.senate.gov/general/contact_information/senators_cfm.cfm.

[1]      Warren, E., 10/2/19, “Excessive lobbying tax proposal,” Team Warren (https://medium.com/@teamwarren/excessive-lobbying-tax-fca7cc86a7e5)

[2]      Tusk, B., 10/14/19, “Lobbyists should embrace Warren’s anti-corruption plan,” The Boston Globe

[3]      Warren, E., 10/2/19, see above

[4]      Sanders, B., retrieved from the Internet on 10/15/19, “Get corporate money out of politics,” Sanders for President (https://berniesanders.com/issues/money-out-of-politics/)

[5]      Evers-Hillstrom, K., & Auble, D., 10/3/19, ‘Shadow lobbying’ in Trump’s Washington,” Open Secrets, Center for Responsive Politics (https://www.opensecrets.org/news/reports/shadow-lobbying-2019#reforms)

THE WEALTHY PAY A LOWER TAX RATE THAN YOU DO

It’s now official: the 400 wealthiest Americans pay taxes at a lower rate than everyone else, thanks to tax cuts, loopholes, and lax enforcement. For the first time in history, wealthy Americans’ federal, state, and local taxes are a lower percentage of their incomes, 23%, than anyone else.

The portion of income paid in taxes by the wealthy has plummeted over the last 70 years, contributing substantially to growing income and wealth inequality. In the 1950s, wealthy Americans paid 70% of their incomes in taxes. This dropped to 47% in 1980 and then was cut in half, to 23%, by 2018. Meanwhile, middle-income households’ tax burden increased, rising from 20% to 30% and then falling back to about 25%. Low-income households experienced the largest proportional increase in their tax burden, which rose from under 20% to roughly 25%.

This animated graph dramatically illustrates how the effective tax rates experienced by all households, from the lowest income households on the left to the 400 wealthiest households on the right, have shifted from 1950 to 2018 for the aggregated total of federal, state, and local taxes. [1]

Not only have tax rates on the wealthy been cut and loopholes added, but tax enforcement has been weakened. Driven by Republicans in Congress, the enforcement budget of the Internal Revenue Service (IRS) has been cut by 25% (adjusted for inflation) since 2010.

Since 2010, the auditing of high-income taxpayers has declined sharply, although the audit rate for taxpayers with under $100,000 of income has remained roughly the same. In 2015, 34.7% of taxpayers with over $10 million of income were audited; in 2018, 6.7% were audited – an 80% decline. For taxpayers with between $1 million and $5 million in income, audit rates fell from 8.4% to 2.2% – a 74% decline. This reduction in audits is happening at the same time as tax avoidance schemes used by the rich, such as using overseas accounts and business entities, are proliferating. Partnerships, which are typically used by high-income individuals such as lawyers and investment managers, had an audit rate in 2017 of only 0.2%, half of what it was in 2015. [2]

Audits of low-income households that are poor enough to claim the earned income tax credit [3] account for 39% of all IRS audits. The IRS claims this is because auditing the poor is quick and easy; it can often be done by mail and by lower level employees. The IRS says this is the most efficient use of limited enforcement resources and that it can’t increase audits of higher-income taxpayers until it has the money to hire more skilled employees and have them devote the time required to do more complex audits. [4] However, audits of low-income tax returns can only yield small amounts of additional taxes when mistakes or problems are uncovered. Audits of high-income returns, on the other hand, can yield millions of dollars of additional taxes and may reveal illegal tax avoidance that has been going on for years.

The share of income paid in taxes by the wealthy has declined because politicians have cut every tax that falls more heavily on those who are well-off: income tax rates on high incomes have been cut by more than half, taxes on income from investments (i.e., wealth) have been cut, and the estate tax has been dramatically cut. The justification for this has been the supply side plutocratic economics theory that the economy as a whole, and even tax revenue, would benefit. This has been proven wrong. The wealthy – and only the wealthy – have benefited. Incomes for workers and the middle class have been stagnant since 1980 and the growth of the economy has been disappointingly slow. The American economy hasn’t done well when inequality is extremely high and rising, and tax rates on the rich are low and falling. [5]

Raising income tax rates on very high incomes, implementing a small, annual wealth tax, and increasing taxes on large estates would increase the fairness of our taxes and begin to slow or reverse growing income and wealth inequality. Moreover, this would provide the public sector with the revenue needed to make critical public investments that will actually spur economic growth.

I encourage you to contact your elected officials and candidates for office to tell them you are outraged that the wealthy pay taxes at a lower rate than you do. Tell them that it’s crystal clear that income and wealth inequality are the result of policy choices made by elected policy makers. Ask them what they will do to reduce income and wealth inequality, and to make the American tax system fair again.

[1]      Leonhardt, D., 10/6/19, “The rich really do pay lower taxes than you,” New York Times

[2]      Fleischer, V., 9/26/19, “Create a more progressive tax policy,” The American Prospect (https://prospect.org/day-one-agenda/create-a-more-progressive-tax-policy/)

[3]      The earned income tax credit provides its greatest benefit of $6,400 to families with three or more children and incomes under $19,000. The benefit is then phased out at higher incomes and goes to zero at an income of $49,000 for a family with 3 or more children and at lower levels for smaller families.

[4]      Kiel, P., 10/2/19, “IRS: Sorry, but it’s just easier and cheaper to audit the poor,” Pro Publica (https://www.propublica.org/article/irs-sorry-but-its-just-easier-and-cheaper-to-audit-the-poor)

[5]      Leonhardt, D., 10/6/19, see above

DRUG COMPANY PRICE GOUGING: THE INSULIN CASE

A quintessential case of price gouging by drug companies, with serious and sometimes fatal consequences, is that of insulin. Roughly 30 million Americans have diabetes, a chronic disease where the body’s mechanism for controlling blood sugar levels isn’t working properly. About 7 million of them must take multiple doses of insulin daily to control blood sugar. Those with Type 1 diabetes, formerly referred to as early-onset or juvenile diabetes, suffer from a pancreas that doesn’t produced adequate amounts of natural insulin so they must use three to four 20-milliliter vials of manufactured insulin a month (or other equivalent forms of insulin). Failure to use insulin regularly to control blood sugar levels can be fatal or have serious long-term impacts on health, including on vision and mobility.

Insulin is a 100-year-old drug whose three developers at the University of Toronto in 1922 sold their patent rights to the University for $1 apiece. They thought this would guarantee affordable access to those needing it in perpetuity. They sold manufacturing and distribution rights to Lilly in the U.S. and Nordisk in Europe. After a year, competitors were free to enter the market.

Today, three big pharmaceutical corporations make the worldwide supply of insulin: Lilly, Novo Nordisk, and Sanofi. Their prices for insulin have skyrocketed, tripling from 2007 to 2017, resulting in their making billions of dollars in profits from their insulin sales.

The U.S. market has 15% of global insulin users but generates 50% of worldwide revenue because prices here are so much higher than they are elsewhere. [1] For example, vials of insulin that sell for close to $300 in the U.S. sell for $30 in Canada.

Insulin for a Type 1 diabetic costs about $1,300 a month in the U.S. Because the U.S. does not regulate drug prices as other countries do, insulin’s manufacturers have increased U.S. prices dramatically in recent years. For example, a 20-milliliter vial of insulin that cost $175 fifteen years ago costs $1,487 today, eight and a half times as much. Because Medicare, the U.S. health insurance for seniors, is prohibited by law from negotiating drug prices (a gift to the industry from friendly Congress people and a friendly President), Medicare spending on insulin grew from $1.4 billion in 2007 to $13.3 billion in 2017. While some of this increase is due to increased numbers of patients using it, per patient Medicare spending on insulin increased 358% from $862 to $3,949. Out-of-pocket spending by Medicare patients themselves also increased, going from $236 million to $968 million. [2]

Estimates of the cost to produce a vial of insulin range from $2.28 to $6.16 depending on the version of insulin and other factors, [3] so the $300 retail cost represents a huge mark-up and huge profits for the drug makers. Until the 1970s, the price of insulin stayed relatively low. In the 1940s the U.S. Department of Justice leveled small anti-trust fines on entities in the Lilly supply chain, indicating the U.S. regulators would intervene if prices were jacked up. [4]

Starting in the late 1970s, changes in politics and laws created increased opportunities for drug makers to profit from the exclusive rights granted by patents on drugs and to effectively extend the longevity of patent protections by tweaking a drug or its delivery mechanism. This set the stage for the pharmaceutical industry to become the most profitable industry in America. For example, Sanofi filed for 74 different patents on its version of insulin, which meant that it could go 37 years without any competition. As of 2014, the three big insulin makers held 19 active patents on their insulin products.

Often the new, patented versions of insulin provide limited benefits to patients, despite their significantly higher prices. However, aggressive marketing campaigns and partnerships with improved delivery devices lead to prescriptions for the new more expensive, and more profitable, products.

A study published in the Internal Medicine edition of the Journal of the American Medical Association found that one in four insulin users (26%) in the U.S. had rationed their insulin use due to high costs; in other high-income countries the rate was only 6.5%. [5] Diabetics who couldn’t afford their insulin have died when they tried to do without or to ration their supply. Many others have endured financial hardships that have required them to use retirement savings, move to cheaper housing, sell possessions, or limit purchases of food and other drugs.

Even for individuals with health insurance, the high price of insulin is problematic because of increased co-payments for drugs and because deductibles they must pay before insurance coverage kicks in have, on average, quadrupled over the last 10 years.

The grassroots organizers of the #insulin4all campaign are working to change U.S. policies and make insulin affordable. Their campaign may prove to be the spark that leads to regulation and negotiation of all drug prices in the U.S. Advocacy is increasing in energy and urgency because diabetics are literally fighting for their lives as insulin makers jack up the price and they don’t see government standing up for them.

The issue of drug prices and particularly insulin prices is, finally, getting increased attention. Congress is holding hearings on insulin prices. Federal and state legislation is being considered. Colorado has passed legislation capping co-payments for insulin. Some advocates have called for nationalizing the insulin market and public manufacturing of generic drugs, including insulin.

I urge you to contact your state and federal elected representatives and to ask them to pass legislation to control the price of insulin and stop price gouging by the drug industry.

[1]      Shure, N., 6/24/19, “The insulin racket,” The American Prospect (https://prospect.org/article/insulin-racket)

[2]      Silverman, E., 6/22/19, “Insulin rationing high in US, survey finds,” The Boston Globe

[3]      Silverman, E., 6/22/19, see above

[4]      Shure, N., 6/24/19, see above

[5]      Silverman, E., 6/22/19, see above

ON-GOING RUSSIAN ELECTION INTERFERENCE MUST BE STOPPED

Since the release of the Mueller report, the focus has been on obstruction of justice by and possible impeachment of President Trump. The report’s documentation of Russian election interference has gotten little attention. Concomitantly, there has been little attention to the need to protect our future elections from on-going Russian meddling.

Based on the Mueller team’s finding of “sweeping and systematic” interference by Russia in the 2016 presidential campaign, it indicted 25 Russians. Russian operatives used every major social media platform, and used them extensively, to spread false information, exacerbate social divisions, and influence the election.

The Mueller report spells out in detail the blatant and illegal efforts by Russia to affect the 2016 presidential election specifically to benefit Donald Trump and to undermine Hillary Clinton. It presents substantial evidence “that the Russian government perceived it would benefit from a Trump presidency and worked to secure that outcome, and that the [Trump] Campaign expected it would benefit electorally from information stolen and released through Russian efforts.” [1] [2]

Highlights from a much longer list of events related to Russian interference in the election include the following: [3]

  • September 2015: The FBI warns the Democratic National Committee (DNC) that at least one of its computers has been hacked by Russians.
  • June 2016: The Washington Post and others report that hackers working for the Russian government have stolen DNC emails and other information. Wikileaks announces that it has Clinton and DNC emails and documents. It begins publishing them in July.
  • July 2016: Russian intelligence agency hackers target Hillary Clinton’s home office.
  • October 2016: The Department of Homeland Security and the Office of National Intelligence on Election Security officially state that the U.S. intelligence community is “confident that the Russian Government directed the recent compromises of emails from U.S. persons and institutions” and are behind the releases of stolen documents by Wikileaks and DCLeaks. DCLeaks is later identified as a front for Russian military intelligence.
  • Late November and December 2016: Various media outlets report that the CIA has determined that Russia’s goal in interfering with the election wasn’t just to undermine confidence in the election and the U.S. government, but was also to support Trump and hurt Clinton. They also report that this intelligence has been shared with Congress.
  • Late December 2016: President Obama issues an executive order naming six Russians who took part in the presidential election hacking and imposing sanctions on Russia.
  • June 2017: A Department of Homeland Security official testifies before the Senate that hackers linked to the Russian government targeted voting systems in up to 21 states and compromised at least one email account at an American voting machine company. Although no evidence of effects on vote counting were found, voter information may have been accessed.
  • July 2018: The Justice Department, as part of Mueller’s investigation, indicts 12 members of Russian intelligence for persistent efforts to hack emails and computer networks associated with the Democratic Party.
  • September 2018: Facebook announces that more than 3,000 ads posted between June 2015 and May 2017 had undisclosed links to Russia. CNN reports that these ads targeted voters in Michigan and Wisconsin, two states Trump won narrowly and that were key to his victory.

In January 2017, the Office of the Director of National Intelligence issued an Intelligence Community Assessment entitled, “Assessing Russian activities and intentions in recent US elections.” [4] It states that it is a “declassified version of a highly classified assessment; its conclusions are identical to those in the highly classified assessment.” It concludes that Russian interference in the 2016 presidential election was the most recent example of Russia’s longstanding efforts to undermine US democracy but represented a significant escalation of their efforts.

It finds with “high confidence” that Russian President Putin ordered the efforts with goals of aiding Trump and hurting Clinton. It also concludes with “high confidence” that Russian military intelligence was behind the release of hacked information. It states that “Russian intelligence obtained and maintained access to elements of multiple US state or local electoral boards. … We assess Moscow will apply lessons learned from its Putin-ordered campaign aimed at the US presidential election to future influence efforts.” (p. iii)

The Trump campaign was happy to accept the help of the Russians, apparently without actively conspiring (i.e., colluding) with them. It nonetheless engaged in a variety of contacts with Russian agents and did not report offers of help from them to the FBI or others. Members of the Trump campaign and family, including the President himself, lied to the FBI and others on multiple occasions about their contacts with Russians.

To respond to the evidence of on-going Russian attempts to influence our elections, the House and the Senate should continue the investigation and identify remedies. Based on their findings, they should formulate legislation and allocate resources to ensure the integrity of our future elections.

One would think that any American president and any Members of Congress, regardless of party or ideology, would support a thorough investigation of Russian interference to determine how to block future threats to our elections, and ultimately our national sovereignty and security. The Republican-controlled Senate and the formerly Republican-controlled House have refused to do so. The Republicans in Congress have abandoned their oath of office and American democracy in the interests of their re-election and political power.

President Trump, as the Mueller report spells out in detail, has repeatedly tried to terminate, limit, or impede the investigation of Russian interference in our elections. Trump’s actions make it clear that his concern is not for American democracy, but reflects three things: [5]

  • Acknowledgement of Russian meddling on his behalf undermines the credibility of his election in 2016,
  • On-going Russian efforts benefit his presidency, and
  • Russia’s activities improve his likelihood of re-election in 2020.

Former President Ronald Reagan, who branded Russia the “evil empire” and worked assiduously to win the Cold War with Russia, must be turning over in his grave to see his Republican party failing to protect America’s elections from Russian interference.

Despite President Trump’s resistance to an investigation, the FBI, intelligence agencies, and the Department of Homeland Security have made their task forces on election interference permanent. The FBI recently moved 40 agents and analysts to its Foreign Influence Task Force. [6] However, without leadership from the President, and the cross-agency coordination and support that would provide, the efforts by these agencies will be less effective.

I urge you to contact your U.S. Representative and your Senators and urge them to take action to protect our elections from meddling by Russia or other foreign actors.

You can find contact information for your US Representative at  http://www.house.gov/representatives/find/ and for your US Senators at http://www.senate.gov/general/contact_information/senators_cfm.cfm.

[1]      Cole, D., 4/23/19, “An indictment in all but name,” The New York Review of Books (https://www.nybooks.com/articles/2019/05/23/robert-mueller-report-trump-indictment/)

[2]      Mueller, R. S., III, May 2019, “Report on the Investigation into Russian Interference in the 2016 Presidential Election,” U.S. Department of Justice (www.justice.gov/storage/report.pdf)

[3]      CNN, 4/18/19, “2016 presidential campaign hacking fast facts,” CNN Library

[4]      Office of the Director of National Intelligence, January 2017, “Intelligence Community Assessment: Assessing Russian activities and intentions in recent US elections,” (https://assets.documentcloud.org/documents/3719492/Read-the-declassified-report-on-Russian.pdf)

[5]      Cole, D., 4/23/19, see above

[6]      Barnes, J. E., & Goldman, A., 4/26/19, “F.B.I. warns of Russian interference in 2020 race and boosts counterintelligence operations,” The New York Times

WHO WAS BAILED OUT AFTER THE 2008 FINANCIAL CRASH?

The 2008 financial crash and resultant bailout have been in the news recently for two reasons: 1) some critiques have been leveled at Sen. Bernie Sanders’ statement on the presidential campaign trail that no Wall St. executives went to jail and that they got a trillion-dollar bailout, and 2) a new book has come out: Crashed: How a decade of financial crises changed the world by Adam Tooze. The book has been described as insightful and telling a story that is both “opaquely complex and dazzlingly simple.” [1] In terms of Sen. Sanders’ statement, it takes a real spin doctor to dispute the truth of it (see below).

In the aftermath of the 2008 implosion of the huge Wall St. corporations, the U.S. government and Federal Reserve Bank came to the rescue. The government quickly made $700 billion available to bailout the Wall St. firms. Otherwise, twelve of the 13 largest ones probably would have gone bankrupt in late September or October of 2008 (as Lehman Brothers did before the rescue was in place and the scale of the disaster was clear). The government also bailed out the auto industry, insurance companies (e.g., AIG), and the quasi-public mortgage-purchasers Fannie Mae and Freddie Mac.

In addition, the Federal Reserve Bank (Fed) made unprecedented purchases of assets from the technically bankrupt financial corporations under the innocuous-sounding banner of “quantitative easing”, to the tune of over $4 trillion. The six largest firms alone (JPMorgan Chase, Bank of America, Citigroup, Wells Fargo, Goldman Sachs, and Morgan Stanley) also borrowed about $500 billion from the Federal Reserve Bank in peak periods of need. [2] Furthermore, the Fed extended what were effectively loans to the central banks of other countries of an also unprecedented $10 trillion. Estimates of the overall contribution of the Fed to the bailout range from $7.7 trillion to $29 trillion.

In addition, the U.S. government supported the big financial corporations in a variety of other ways. For example, short-selling of 799 financial stocks was banned in 2008 to protect these companies from free market speculation, which boosted their stock prices. Emergency bank charters were given to Goldman Sachs and Morgan Stanley on Sept. 21, 2008, so they could borrow from the Fed as only banks can do. In October, the Fed, for the first time in history, paid interest to the banks on required reserve deposits. Shortfalls in required reserves and failed stress tests were effectively ignored. And except for one relatively low-level officer at Credit Suisse, no one and no company was criminally prosecuted or went to jail. The value of all these benefits is truly incalculable.

Therefore, pinning down a single figure for the total bailout is impossible because there were so many different pieces and the amounts in some of them fluctuated daily, given that banks borrow money from the Fed daily to meet their reserve requirements. However, to state that it was a trillion-dollar bailout is definitely true and to say that no Wall St. executives went to jail is also true for all meaningful purposes.

With all this bailout money and support for the financial corporations and the financial system, one might think that some significant money or support would have been made available to bailout out the workers and homeowners caught in the maelstrom of Wall St. malfeasance. However, precious little assistance was made available to the millions of homeowners trying to pay mortgages on homes where the mortgage was now greater than the value of the home, given that many homes had lost half their value. Very little was done for the millions of homeowners who suffered foreclosure. And it was not only individuals who suffered; whole communities – usually minority and low-income communities – were underwater due to predatory and discriminatory mortgage lending by the big financial corporations and their agents. Moreover, millions were unemployed as the economy went into a severe recession due to the malfeasance on Wall St. [3]

Two things make all this truly galling. The first is that despite the massive intervention of the U.S. government and the Fed, the rescued financial corporations were not required to change their basic mode of operation. The instability of speculative financial transactions that is endemic in their model of profitability and the huge financial rewards for employees, especially executives, was left intact, along with public insurance against losses that threaten consumers’ deposits.

The second galling outcome is that no executives of the financial corporations were punished, either through significant loss of compensation or criminal prosecution, let alone jail time. Remember, that in the 1980s Savings and Loan crisis, which was much smaller in scale, nearly 900 executives of Savings and Loan banks went to jail.

“The contrast between the solicitous care shown the culpable financial sector and the negligence shown to the innocent homeowner was startling.” [4] As a result, class-based economic inequality in the U.S. was exacerbated and economic gaps in income and wealth between Whites and Blacks grew dramatically.

The bailed out financial corporations were expected to make loans available to help households and businesses, as well as to avoid foreclosures whenever possible. When foreclosure was unavoidable, it was expected that the financial corporations would promptly resell those homes. These actions would have helped individuals, businesses, and communities recover. However, no requirements were placed on bailed out banks to do these things and, therefore, they did not happen.

The programs that were supposed to assist homeowners typically had draconian rules to prevent “undeserving” homeowners from benefiting. The story line from Wall St. and its backers on Capitol Hill was that home buyers were the ones at fault; they should have known better than to be duped by the predatory practices of the mortgage brokers or that the home buyers were simply trying to live above their means. This concern about benefiting undeserving individuals clearly did not extend to the undeserving bank and financial sector executives responsible for perpetrating fraud in the mortgage business and crashing their companies and the economy.

Similar opposition blocked the expansion of unemployment benefits and job training for workers who had lost their jobs. On the other hand, there were no significant limits put on the pay of executives whose corporations were bankrupt without the bailout, let alone requirements that executives pay back compensation they had received based on profits generated by fraudulent activities.

As the Great Recession lingered on and jobs, homes, and economic security did not return (still true today for many people), the deep anger and discontent that set in was the breeding ground for support for Trump.

The 2008 financial crisis and the bailout of the financial corporations and their executives, but not the homeowners and workers who suffered from the resultant crash, are exhibit one in the indictment of the corporate takeover of U.S. policy making. I urge you to contact your elected officials and ask them to stand up against corporatocracy and demand democracy back. Our government should work for the people, the workers and homeowners of America, not the big corporations.

[1]      Bloom Raskin, S., Winter 2019, “Whose recovery was it?” The American Prospect (This article is a review and commentary on Tooze’s book.)

[2]      Taibbi, M., 3/18/19, “Turns out that trillion-dollar bailout was, in fact, real,” RollingStone

[3]      Bloom Raskin, S., Winter 2019, see above

[4]      Bloom Raskin, S., Winter 2019, see above, page 86

RACISM ON THE SUPREME COURT?

On June 25, 2013, the U.S. Supreme Court ruled, in a 5 to 4 decision, that key provisions of the Voting Rights Act (VRA) were unconstitutional. The case was formally known as Shelby County, Alabama v. Eric H. Holder, Jr., Attorney General. Chief Justice Roberts wrote for the majority (which included Justices Scalia, Kennedy, Thomas, and Alito) that “Our country has changed” and claimed that it had done so so dramatically since the initial passage of the VRA in 1965 that the VRA was now not only unneeded but unconstitutional.

This decision was shocking to many, in part because the Act had been reauthorized in 2006 by overwhelming majorities in Congress and signed into law without controversy by President George W. Bush. The Congressional vote, with Republicans in control of both the House and the Senate, was 390 to 33 in the House and 98 to 0 in the Senate in favor of reauthorizing, i.e., extending, the Voting Rights Act.

The over 15,000 pages of evidence compiled by Congress in its review of the VRA in 2006 indicated that it was still badly needed. The Chair of the House Judiciary Committee, Republican Representative James Sensenbrenner of Wisconsin, a conservative, noted that evidence had been “assembled to show the need for the reauthorization of the Voting Rights Act” and that it documented “the extensive record of continued abuse” of voting rights. [1]

This extensive evidence clearly established that the country hadn’t changed much since the VRA’s enactment in 1965 with respect to efforts to impede voting by Blacks in some areas, particularly the South. It documented relentless efforts in some states to counter the effects of the VRA. The on-going nature of these efforts was confirmed by actions taken almost immediately after the Court’s ruling overturning the VRA. (See some specifics below.)

The Supreme Court in effect ruled that Congress had acted irrationally in 2006 in reauthorizing the VRA. Chief Justice Roberts’ and his colleagues’ decision was based on their version of reality, which was in contradiction to the evidence amassed by Congress. Roberts probably wouldn’t have been persuaded by any evidence, given that he had worked zealously in 1981, when he was at the Justice Department, to roll back the protections of the VRA.

At best, the Court’s decision was a failure of empathy or a triumph of ideology, but more likely it reflected racism.

Justice Scalia, in the oral arguments leading to the decision, described the VRA as being a “perpetuation of racial entitlement” and stated that he didn’t believe any legislator would vote to end such an entitlement once society had adopted it. Therefore, it was up to the Court to declare it unconstitutional, because this was the only way to end this racial entitlement. [2] Why the right to vote, which is a core principle of our democracy, would be considered a “racial entitlement” is hard to understand except from the perspective of racism.

The irony here, of course, is that the racial entitlement that exists in U.S. society is the entitlement of Whites. For most of the two hundred years of its existence, there were all White elected officials, police forces, corporate executives, judges and juries, as well as schools, colleges, and teachers, to list a few examples. And while our country has begun to change in this regard, there still is a long way to go to achieve anything close to equity.

What occurred after the elimination of the protections of the VRA has made it clear how virulent efforts to suppress voting, particularly of Blacks, are today. Within two hours after the Supreme Court issued its decision on the VRA, Texas took steps to reinstitute its strict photo ID law, which had previously been struck down by a federal court. The day after the decision, North Carolina amended a pending bill to make its voter ID law stricter and added other provisions eliminating or restricting opportunities to vote that targeted minority voters. Changes in voting procedures in other states, which had previously been blocked by the federal government under the VRA, were quickly implemented.

After years of litigation, federal courts have forced the reversal of the actions of Texas and North Carolina because their changes in voting laws were found to be intentionally racially discriminatory. However, in the intervening years, the discriminatory provisions were in effect. Overall, federal courts have now ruled that at least 10 of the new, state restrictions on voting were illegal.

In the five years since the Supreme Court’s overturning of the VRA, nearly 1,000 polling places have been closed, many of them in predominantly Black areas. Access to early voting has been cut, voters have been purged from the lists of eligible voters, and requirements to show a voter ID or provide proof of citizenship have been implemented. [3] Nine states had been subject on a statewide basis to VRA oversight of changes in voting procedures (Alabama, Alaska, Arizona, Georgia, Louisiana, Mississippi, South Carolina, Texas, and Virginia). In every one of them at least one of the above five impediments to voting has been implemented (the average was 2.3 impediments). Eight of the 9 moved or eliminated polling places and 8 of 9 implemented new voter ID requirements. Four of these impediments to voting were implemented in each of two other states, where only parts of the states had been subject to the VRA (Florida and North Carolina).

Clearly, the Supreme Court majority was in error when they concluded that the country had changed and the protections of the VRA were not only no longer needed, but had risen to the level of being unconstitutional oversight of states’ elections by the federal government. Given that the Court is extremely unlikely to reverse itself, it is up to Congress to pass a new VRA that will fill the gaps in the protection of voting rights created by the Court’s decision.

I urge you to contact your U.S. Representative and Senators to ask them to support a new Voting Rights Act. Our democracy should be encouraging and supporting voting by all eligible voters, and not allowing states or local jurisdictions to implement impediments to voting – especially when those impediments have disproportionate effects on Black Americans.

You can find contact information for your US Representative at http://www.house.gov/representatives/find/ and for your US Senators at http://www.senate.gov/general/contact_information/senators_cfm.cfm.

[1]      Fountain, B., 2018, Beautiful Country Burn Again, HarperCollins Publishers, NY, NY. Quotations from page 406.

[2]      Fountain, B., 2018, see above. Quotation from page 409.

[3]      U.S. Commission on Civil Rights, 2018, “An assessment of minority voting rights access in the U.S.: 2018 statutory report.” (https://www.usccr.gov/pubs/2018/Minority_Voting_Access_2018.pdf)

CONTROLLING DRUG PRICES

Clearly, we need better regulation of drug prices and the drug industry in the U.S. Unwarranted, steep increases in drugs’ prices and higher prices than in other countries are key indicators of the need for better regulation to lower prices. And, as recent investigations have uncovered, this applies to the generic drug makers as well as the brand name drug makers. It is estimated that if there were a truly free market for prescription drugs in the U.S., they would cost $80 billion instead of $430 billion, an annual savings of $350 billion. (See my previous post for more information.)

Three bills have been introduced in Congress to address the high and rapidly rising costs of prescription drugs in the U.S. They have been introduced in the Senate by Senator Sanders of Vermont and in the House by Representatives Khanna of California and Cummings of Maryland.

First, the Prescription Drug Price Relief Act would terminate patents, ending monopoly rights, for any drug whose price exceeded the median (middle) price among five comparable countries: Canada, the United Kingdom, France, Germany, and Japan. Drug prices in these countries are roughly half of what they are in the U.S., so our drug prices would come down substantially under this law. It is expected that drug companies would lower prices voluntarily if this law is passed; they wouldn’t want to lose their patent protections because, if they did, competition would likely drive prices even lower.

Second, the Medicare Drug Price Negotiation Act would allow Medicare to negotiate the prices it pays for drugs. Given that it spends roughly $100 billion a year on drugs, almost a quarter of all drug purchasing, it has substantial negotiating power. When the Medicare drug benefit was created, the Republicans in control of Congress and President George W. Bush did the pharmaceutical industry a huge favor by prohibiting Medicare from negotiating drug prices and also prohibiting the importation of drugs. The Veterans’ Administration and every private health insurance company, as well as every other country, save substantial amounts of money by negotiating drug prices with the drug manufacturers.

(In a classic case of the revolving door between government and industry, Representative Tauzin, chair of the committee that wrote the Medicare prescription drug law, resigned two months after the bill was signed into law to become the head of the pharmaceutical industry’s trade association at an estimated salary of $2 million. His pay would increase to $11.6 million five years later.)

Third, the Affordable and Safe Prescription Drug Importation Act would allow the importation of drugs from other countries with safety standards comparable to those in the U.S., such as Canada and Germany. This would be a step toward a truly free market, something our business community rhetorically supports, and would significantly reduce drug prices given that prices in these countries are roughly half of what they are in the U.S. The charge by opponents that this would let unsafe drugs into the country rings hollow because many of our drug companies themselves import the drugs they sell or ingredients for them – largely from China.

I urge you to contact your U.S. Representative and Senators to ask them to support these three bills. It is time to reduce the exorbitant profits of the drug makers by reducing the exorbitant prices of the drugs they sell. Furthermore, reducing their high profit margins would reduce the incentive to engage in fraudulent practices to promote additional sales of their drugs.

You can find contact information for your US Representative at http://www.house.gov/representatives/find/ and for your US Senators at http://www.senate.gov/general/contact_information/senators_cfm.cfm.

RAISE THE MINIMUM WAGE? FEDS: NO! VOTERS: YES!

The bad news is that Congress and the President have not raised the federal minimum wage since July 2009 when it was set to $7.25 (about $14,500 per year for a full-time worker). After adjusting for inflation, it is now worth only $6.19. At its peak in 1968, the minimum wage was worth $11.39 in today’s dollars. If it isn’t raised by this July, which seems unlikely, it will have been 10 years that low-income workers governed by the federal minimum wage have gone without a raise; the longest period without an increase since it was first establish in 1938. [1]

Failing to raise the minimum wage as inflation increases prices shifts money from low-income workers’ pockets and the local economies where they spend their earnings to the pockets of their employers’ executives and shareholders. This is borne out by the fact that executive pay and corporate profits are at record levels. The minimum wage does not get increased because employers are greedy and politicians cater to wealthy campaign supporters rather than regular voters and workers. By the way, the best data available show that increasing the minimum wage does NOT reduce overall employment.

The good news is that some states and communities, often driven by grassroots activists, are increasing the minimum wage. On January 1, 2019, the minimum wage in 20 states and 24 communities went up, increasing pay for over 5 million workers. Over the course of the year, workers will earn over $5 billion more as a result. In eight states, the minimum wage is linked to inflation and is automatically adjusted each year. Alaska is one; there the minimum wage will go up, but by just $0.05 per hour, the smallest of the increases. [2]

The minimum wage increases were set by legislative action in six states and by local governing bodies in the communities where the wage increased. In New York City, for example, the minimum wage went up by $2.00 per hour.

In six states, increases in the minimum wage were the result of ballot measures that voters approved. Increasingly, as the federal government and some state governments (Arkansas and Missouri for example) are refusing to increase the minimum wage, grassroots activists are taking matters into their own hands and putting increases on the ballot.

The bad news is that in Michigan and the District of Columbia (D.C.) legislators blocked, reduced, and/or delayed increases in the minimum wage that had been put forth by voters! In D.C., city councilors overturned a law approved by 55% of voters that would have increased the minimum wage of tipped workers so that over time it would be the same as the minimum wage for other workers. [3]

In Michigan, the Republican legislature and Governor went out of their way to deny the will of the voters. Over 300,000 citizens had signed a petition to put a minimum wage increase on the November ballot, where its approval seemed certain. The ballot measure would have increased the minimum wage from $9.25 to $10 on January 1, 2019, to $12 by 2022, and then had it increase automatically based on inflation.

In September, the Michigan legislature and Governor, in an effort to circumvent the proposed minimum wage increase, adopted the language of the ballot initiative. This meant it would not appear on the ballot, thereby denying voters the opportunity to approve it. Then, the legislature voted for (and the Governor signed) a delay in the minimum wage increases with the increase to $12 delayed from 2022 to 2030! They also eliminated the automatic increases based on inflation. This would likely mean that minimum wage workers would see their real wages (after adjusting for inflation) decline over this period.

The good news is that the Michigan law that allows the legislature and Governor to intercept a ballot measure and prevent it from appearing on the ballot by approving it, states that the approved measure cannot be amended in the same legislative session. However, this is exactly what they did. Therefore, a lawsuit to the state’s Supreme Court is likely and would appear to have a good chance of succeeding. [4]

Given the almost 10 years since the federal minimum wage was increased and the 40 years of other policies that have left workers’ wages stagnant, raising the minimum wage at the state or local level is perhaps the most effective way to lift the incomes of our lowest-paid workers. Unfortunately, 21 states still rely on the federal minimum wage of $7.25.

The resistance of our elected officials to increasing the minimum wage reflects the extent to which many Republican and some Democratic elected representatives are more responsive to large employers and their wealthy executives and shareholders than to every day workers. The fact that every minimum wage increase that’s appeared on the ballot has been approved by voters shows the strength of support for a higher minimum wage among the voting public.

[1]      Ingraham, C., 12/27/18, “Here’s how much the federal minimum wage fell this year,” The Washington Post

[2]      Cooper, D., 12/28/18, “Over 5 million workers will have higher pay on January 1 thanks to state minimum wage increases,” Common Dreams (https://www.commondreams.org/views/2018/12/28/over-5-million-workers-will-have-higher-pay-january-1-thanks-state-minimum-wage) or Economic Policy Institute (https://www.epi.org/blog/over-5-million-workers-will-have-higher-pay-on-january-1-thanks-to-state-minimum-wage-increases/)

[3]      Cooper, D., 12/28/18, see above

[4]      Anzilotti, E., 12/6/18, “Michigan Republicans decide that people can live on $9.25 an hour for the next decade,” Fast Company (https://www.fastcompany.com/90277788/michigan-republicans-decide-that-people-can-live-on-925-an-hour-for-the-next-decade)

ELIMINATING NUCLEAR WEAPONS

Many Americans are concerned that the belligerent and impulsive behavior of President Trump could lead us into war and, in a worst-case scenario, into nuclear war. The President can independently order the launch of nuclear weapons at any time and for any reason. Furthermore, Trump’s announced intention to withdraw from the Intermediate-Range Nuclear Forces Treaty (which has been in force for over 30 years) and to spend $1.7 trillion to update the U.S.’s new nuclear arsenal increase the likelihood of nuclear war.

With these and other factors in mind, the Bulletin of the Atomic Scientists has moved its Doomsday Clock to 2 minutes from midnight (i.e., doomsday). The clock had been at 17 minutes from midnight in 1991 but has been moving closer since then and has moved from 3 minutes away in 2016 to 2 minutes today.

Any nuclear war would have catastrophic consequences for human beings and our planet. Detonation of one-tenth of the 15,000 nuclear weapons that exist (with all but about 1,000 of them in the hands of the U.S. and Russia) would almost certainly kill all humans on the planet via the huge radioactive cloud that would circle the Earth and rain down everywhere.

Even the detonation of a single nuclear weapon would, of course, be locally devastating. Today’s nuclear weapons are up to 100 times more powerful than the two bombs the U.S. dropped on Japan at the end of World War II, each of which destroyed an entire city and killed roughly 100,000 people.

The U.S. should reduce the likelihood of accidentally launching a nuclear weapon, many of which are still on a quick-launch protocol that dates from the Cold War with the Soviet Union. We could change our policies on the initial use of nuclear weapons, re-evaluate missile defense, and strengthen diplomacy. We could also do more to reduce the possible use of a nuclear weapon by terrorists or other countries around the world. The Union of Concerned Scientists has excellent information on all of this on their website.

The most encouraging news on the nuclear weapons front is the Treaty on the Prohibition of Nuclear Weapons (TPNW), which is now in the ratification process around the world. On July 7, 2017, a United Nations conference adopted this Treaty by a vote of 122 countries in favor, one opposed, and one abstention. The conference met for over 40 days in 2017 with all U.N. member countries, along with non-governmental organizations, encouraged to participate.

The Treaty will go into effect 90 days after the 50th country ratifies it. The Treaty includes comprehensive prohibitions on developing, producing, testing, possessing, or threatening to use nuclear weapons. [1] The Treaty’s introduction states that given “the catastrophic humanitarian consequences … from any use of nuclear weapons, … the only way to guarantee … [they] are never used again” is to “eliminate such weapons.” It notes that “any use of nuclear weapons would be contrary to the rules of international law … abhorrent to the principles of humanity and the dictates of public conscience. … Concerned by the slow pace of disarmament … and the waste of economic and human resources on … the production, maintenance and modernization of nuclear weapons” the conference participants agreed that the elimination of nuclear weapons was necessary and appropriate. [2]

The International Campaign to Abolish Nuclear Weapons (ICAN), a coalition of over 500 organizations in over 100 countries and the winner of the 2017 Nobel Peace Prize, is working to get the Treaty ratified. So far, 69 countries have signed it and 19 have ratified it. Once 50 countries ratify it, nuclear weapons will be banned under international law. [3]

The U.S. has not ratified the Treaty, but California, the U.S. Conference of Mayors, and several cities and towns, including Los Angeles and Baltimore, have endorsed it. Raising the issue of unnecessary, expensive, and dangerous nuclear weapons may serve as a vehicle to more broadly address the U.S.’s militarism, which is harmful geopolitically and economically.

I urge you to contact your local, state, and national elected officials and to ask them to endorse the Treaty on the Prohibition of Nuclear Weapons. These weapons serve no rational purpose and their existence is an existential threat to humankind. The costs and dangers of simply having and maintaining them, of terrorists capturing and using a nuclear weapon, and of working with and disposing of the radioactive material involved are not justifiable. A world free of nuclear weapons would be a safer and saner planet to live on.

[1]      United Nations Office for Disarmament Affairs, Retrieved from the Internet on 1/5/19, “Treaty on the prohibition of nuclear weapons” (https://www.un.org/disarmament/wmd/nuclear/tpnw/)

[2]      United Nations Conference to Negotiate a Legally Binding Instrument to Prohibit Nuclear Weapons, Leading Towards their Total Elimination, 7/7/2017, “Treaty on the Prohibition of Nuclear Weapons” (https://www.un.org/disarmament/tpnw/)

[3]      Fihn, B., 11/8/18, “The fate of the earth depends on women,” The Nation (https://www.thenation.com/article/nuclear-prohibition-beatrice-fihn/)

INVESTING IN INFRASTRUCTURE AND A GREEN ECONOMY: THE PROPOSALS

My previous post outlined the need for investing in our infrastructure while simultaneously taking advantage of opportunities to make our economy more environmentally friendly and fairer for workers. Here are overviews of some of the infrastructure investment proposals that various groups have developed to address these issues.

The Democrats have proposed “A Better Deal to Rebuild America” which calls for a $1 trillion federal investment in infrastructure that would create more than 16 million jobs. It would invest in green infrastructure and ensure opportunities for small businesses. It would incorporate strong environmental protections and labor standards. It proposes investing in roads, bridges, rail, and public transit; high-speed internet; schools; airports, ports, and waterways; and water and energy systems.

The infrastructure proposals from the Congressional Progressive Caucus, [1] the Campaign for America’s Future, [2] and Demos [3] have much in common and share similar underlying visions. The Campaign for America’s Future’s proposal is put forth as a “pledge to fight for good jobs, sustainable prosperity, and economic justice.” It incorporates investment in traditional and green infrastructure along with ensuring that workers can form unions to bargain collectively for better wages and benefits. It supports a living wage, affordable health care and child care, and paid family leave, sick and vacation time for workers. It advocates for full employment with particular attention to helping individuals and communities harmed by discrimination, de-industrialization, and privatization.

Demos proposes an economic agenda that addresses issues of race and class, while motivating working people to “engage in the civic life of their communities and our nation.” Its 25 policies mirror the goals of the Campaign for America’s Future’s pledge. They also call for investment in affordable housing and for guaranteed employment for everyone who wants to work, with the federal government as the employer of last resort (as was done during the Great Depression).

In an article in The American Prospect, Jon Rynn recommends considering health care, education, and financial infrastructure as part of the infrastructure investment paradigm. This reflects the inclusion of human capital and public goods, not just physical capital, as important components of overall infrastructure. Universal health insurance, such as Medicare for All, would expand health care infrastructure and support the productivity of human capital. Affordable public college and early care and education (aka child care) are both pieces of educational infrastructure and are investments in the current and future workforce’s human capital. Finally, regulating the financial industry and creating public banks would be ways of strengthening and democratizing financial infrastructure. [4]

A recent addition to the infrastructure proposals being promoted in Congress is the Green New Deal. It isn’t as detailed as the proposals mentioned above; it’s more of a vision statement. It envisions a substantial investment in infrastructure and the green economy. It would transform our economy by decarbonizing it to address climate change, while also making it fairer. [5]

After the October release of the Intergovernmental Panel on Climate Change (IPCC) report that presented ominous data and predictions about global warming, a series of events occurred that have pushed the Green New Deal into the spotlight. After the November election, Representative (and soon-to-be House Speaker) Pelosi announced that she planned to revive the Select Committee on Energy Independence and Global Warming to pursue bipartisan action. However, climate change activists viewed the Committee and a bipartisan approach as likely to continue to be fruitless.

So, the youth-led Sunrise Movement organized a sit-in in Rep. Pelosi’s office, calling for a committee charged with developing a plan to meet the goals deemed essential by the IPCC report. Sunrise approached Representative-elect Ocasio-Cortez, who had campaigned in support of a Green New Deal, and asked her to help publicize the sit-in. She not only agreed to do so and to reach out to other new representatives, but agreed to attend the sit-in. Roughly 200 activists occupied Pelosi’s office on November 13 with significant media attention.

Sunrise, Rep. Ocasio-Cortez, and others in or coming into Congress developed a proposal for a Select Committee on a Green New Deal. By December 10, forty members of Congress had endorsed the proposed committee and an even larger occupation of Pelosi’s office occurred.

While the specifics of a Green New Deal are to be determined, its four core elements are:

  • Decarbonizing the economy
  • Large-scale public infrastructure investment
  • Federally-guaranteed employment for everyone who wants to work
  • A just transition to a green economy with remediation for those most negatively affected by historical discrimination, climate change, and the shift to a green economy

For any infrastructure investment program, the first question usually is, can we afford it? Many people would argue that we can’t afford not to make these investments and that the cost of climate change will be much larger than these costs if we don’t take aggressive steps to green our economy.

To put the suggested costs of roughly $500 billion per year for a significant infrastructure program in perspective, the Works Progress Administration’s budget in the 1930s was roughly 2.2% of Gross Domestic Product (GDP, the size of the overall economy). This would be about $450 billion per year today with U.S. GDP at $20.66 trillion. The tax cuts passed in 2017 cost roughly $200 billion per year. Congress and President G.W. Bush approved, on short notice, a $700 billion bailout of the financial sector after the 2008 crash and, in addition, by March 2009, the Federal Reserve had committed $7.8 trillion, more than 50% of GDP at the time, to rescuing the financial system. So, the answer to whether we can afford the proposed infrastructure investments is YES; we can afford it if we have the public and political will to make the commitment to repairing and modernizing our infrastructure while greening our economy and making it work fairly for the benefit of all.

If Democrats are willing to commit to a Green New Deal (GND), which means standing up for a fair economy and taking aggressive steps to address climate change, they could reap the benefits of the current grassroots energy behind these issues. Some Democrats will resist endorsing a GND, fearing the loss of campaign donations and support from wealthy individuals and corporations. However, not supporting a GND would risk squandering a tremendous opportunity, both politically and to do what’s good for our people, our democracy, our country, and our planet.

I encourage you to communicate with your U.S. Senators and Representative about infrastructure investment and the Green New Deal. Nothing is more likely to persuade them to support a GND than hearing from constituents who care about climate change, well-maintained infrastructure, and an economy that works for everyone. I welcome your comments and feedback on steps you feel are needed to make our economy fairer and more responsive to regular Americans, as well as to tackle global warming and climate change.

[1]      Blair, H., 7/24/18, “‘The People’s Budget’: Analysis of the Congressional Progressive Caucus budget for fiscal year 2019,” Economic Policy Institute (https://www.epi.org/publication/the-peoples-budget-analysis-of-the-congressional-progressive-caucus-budget-for-fiscal-year-2019/)

[2]      Campaign for America’s Future, 2018, “The Pledge” (http://campaignforamericasfuture.org/pledge/)

[3]      Demos, 1/31/18, “Everyone’s economy: 25 policies to lift up working people” (https://www.demos.org/publication/everyones-economy)

[4]      Rynn, J., 6/28/18, “What else we could do with $1.9 trillion,” The American Prospect (https://prospect.org/article/what-else-could-we-do-19-trillion)

[5]      Roberts, D., 12/26/18, “The Green New Deal explained,” Vox (https://www.vox.com/energy-and-environment/2018/12/21/18144138/green-new-deal-alexandria-ocasio-cortez)

ELECTION AND ETHICS REFORM

With Democrats taking over control of the U.S. House in January, there’s a wide range of issues they might tackle. Even if many of the bills they propose, and hopefully pass, don’t become law (because they aren’t passed by the Senate or are vetoed by President Trump), they will frame the debate going forward and into the 2020 elections. Furthermore, policies can become law by attaching bills or provisions to must-pass bills such as those funding the government. This is a tactic that has been used for many, many years and has been used frequently by Republicans over the last 12 years. Talking about substantive issues will shift the discussion to ideas from personalities and to meaningful, long-term policies to address important problems rather than short-term, idiosyncratic, one-off deal making.

Two key topics will be the focus of the first bill in the new House in January. They were the first two topics on my previous post’s list of possible issues for House Democrats to address. They are:

  • Elections: stop voter suppression, encourage voting, stop gerrymandering, and reform campaign financing (e.g., limit contributions, provide matching public funds, and require full disclosure of spending and donors)
  • Ethics: address conflicts of interest for Congress and all federal workers; stop the undue influence of special interests obtained through lobbying, the revolving door, and campaign expenditures

Rep. Nancy Pelosi, the current leader of the House Democrats (and likely Speaker of the House come January), has stated that the first bill in the new House in January, known as H.R. 1, will address the restoration of democratic principles and procedures. It will address election and integrity issues where government of, by, and for the people has been undermined by wealthy individuals and corporations. The overall goal of the bill will be to end the ability of special interests to bend public policies to their benefit and against the interests of hard-working Americans and our democracy. This will restore Congress’s and the federal government’s abilities to enact policies that address the problems of average Americans. This is essential to renew the public’s faith in our democracy. [1]

Pelosi’s bill would do many of the things President Trump promised to do during his campaign when he stated he would “drain the swamp” in Washington, D.C. His actions and appointments have done nothing to drain the swamp and have probably made things worse.

This bill will address the huge amounts of money in our elections and the significant portion of that money that is “dark money” – money where the identity and interests of the true donor are hidden. The bill would require all organizations making donations to or expenditures on campaigns to disclose who their donors are. [2]

The proposed legislation would also take steps to increase the impact and number of small-dollar campaign donors. Incentives would be provided for individuals to make small campaign donations and the impact of those donations would be multiplied by matching them with public funds. Candidates who agree to accept these matching funds would have to limit the size of donations they accept and, perhaps, their overall spending.

The Pelosi bill would re-establish the Voting Rights Act’s protections of every citizen’s right to vote and would stop voter suppression. It would make it easier to vote through automatic and on-line voter registration while strengthening election infrastructure to prevent hacking and ensure accurate, auditable, tabulations of votes. To ensure that everyone’s vote has a fair chance of being meaningful, it would end gerrymandering, probably by requiring that an independent redistricting commission in each state draw congressional district boundaries.

The bill would strengthen ethics and conflict of interest laws governing Congress and federal government workers. It would ban members of Congress from serving on the boards of for-profit companies, which presents a clear conflict of interest. It would also enhance disclosure of who’s lobbying the federal government, so these efforts would be publicly known and not hidden in the shadows. And it would require Presidents to disclose their tax returns.

Pelosi’s bill would implement a code of ethics for Supreme Court Justices, who are currently exempt from the code of ethics that applies to other federal judges. [3]

It would close the revolving door of personnel between government positions and private sector jobs, which creates major conflicts of interest and is a major avenue for undue influence by special interests. It would prohibit employers from giving bonuses to reward employees for moving into public sector positions (as Wall St. has done repeatedly in the past). These individuals often go back to the same private sector employers later. The bonuses present the individuals with a significant conflict of interest from day one in their public sector job, particularly if the bonus is being paid out over time and, therefore, is being received when they are in their public sector role.

Tackling elections and ethics reform as a top priority makes sense for several reasons. First, these issues are very much on voters’ minds. Voters passed several ballot measures addressing them at the state and local levels in November, as was summarized in a previous blog post. Publicity about voting and ethical scandals in the Georgia election, as well as in Florida and North Carolina, have heightened the public’s awareness and concern about these issues. [4] In addition, candidates who refused corporate and PAC money fared very well in November. Noting incumbents’ acceptance of special interest money and linking it to specific votes was an effective tactic for beating them. [5]

Second, over the longer-term, addressing elections and ethics issues is critical to restoring democratic decision-making to government by ending the undue influence of wealthy individuals and corporations. This is essential to making progress on every other issue that would advance the public good. A fairer political process, where government is truly of, by, and for the people, is necessary to eliminate the system-rigging power of wealthy individuals and corporations. This will actually drain the Washington swamp. [6] Restoring faith in the fairness and integrity of our elections and policy making is a necessary first step toward restoring trust in our government.

If Democrats are willing to commit to a new code of conduct and to stand up for true democracy, they could reap the benefits of the current backlash against corrupt behavior by elected officials and the overall corruption of our political processes. There’s an opportunity to lead on re-establishing fairness and integrity in our politics. Some Democrats will resist this, fearing the loss of campaign donations and spending by wealthy individuals and corporations, but not doing so will risk losing a tremendous opportunity, both politically and for the good of our democracy.

I encourage you to communicate with your elected officials at the national and state levels about these issues. Nothing is more likely to persuade them than hearing from constituents who care about fair and ethical elections and behavior by government officials. I welcome your comments and feedback on steps you feel are needed to make our elections and policy making fairer and more responsive to regular Americans.

Thank you for your feedback on the list of topics in my previous post. In upcoming posts, I will delve into infrastructure investment and environmental policy issues since these were the two topics that were most frequently identified as priorities.

[1]      Pelosi, N., & Sarbanes, J., 11/25/18, “The Democratic majority’s first order of business: Restore democracy,” The Washington Post

[2]      Wertheimer, F., 10/10/18, “House Democratic challengers demand campaign-finance reforms,” The American Prospect (http://prospect.org/article/house-democratic-challengers-demand-campaign-finance-reforms)

[3]      Mascaro, L., 12/1/18, “House Democrats’ bill seeks reforms,” The Boston Globe from the Associated Press

[4]      Carney, E. N., 11/29/18, “Read it and weep: Georgia lawsuit paints stark portrait of voter suppression,” The American Prospect (http://prospect.org/article/read-it-and-weep-georgia-lawsuit-paints-stark-portrait-voter-suppression)

[5]      Lardner, J., 11/30/18, “What the Democrats must do first,” The American Prospect (http://prospect.org/article/what-democrats-must-do-first)

[6]      Lardner, J., 11/30/18, see above

BALLOT MEASURES IN THE 2018 ELECTIONS

For a variety of reasons, but often because the established policy-making process has been unresponsive to citizens’ desires, proposed laws are put on election ballots for direct voter approval. This occurs both at the state and the local levels. In 2018, there were many such ballot measures on a great variety of topics from election reforms to energy and financial regulations to health care and financial matters to ethics and criminal justice issues to marijuana legalization to abortion and government administrative issues.

In the 2018 election, voters in 37 states decided 155 statewide ballot measures. Of those where a final result is available, 107 were approved and 47 were defeated. Of the 64 citizen-initiated measures, 32 were approved and 32 were defeated, for a 50% approval rate. For the 89 ballot measures initiated by legislative action or a commission, about 82 percent were approved. [1]

A number of these ballot measures addressed issues related to elections. To reduce gerrymandering, four states’ voters approved ballot initiatives that establish independent redistricting commissions to draw lines for congressional and state legislative districts after the 2020 Census. In Missouri, voters approved the establishment of the first ever state demographer position and enacted some unique competitiveness and partisan fairness criteria for state legislative districts. Ohio voters approved a ballot measure back in June that created a new redistricting system requiring super-majority, bi-partisan votes to approve new congressional districts. [2]

Automatic voter registration was approved through ballot measures in two states and two states’ voters approved same day registration. In Florida, a ballot measure passed that will restore voting rights to roughly 1.4 million citizens who have completed their sentences for felony convictions. Six states and more than a dozen local jurisdictions passed ballot measures strengthening ethics laws, requiring greater disclosure of campaign contributions, or regulating money in politics. [3] On the downside for access to voting, two states approved ballot measures establishing voter ID requirements.

Voters in Idaho, Nebraska, and Utah approved ballot measures expanding Medicaid eligibility, a state option under the Affordable Care Act (aka Obamacare). Some Republican Governors and legislatures have opposed this expansion of Medicaid simply because it was part of Obamacare, even though it was very low cost to the states and would have provided health insurance to tens of thousands of low-income residents. A ballot measure to extend Montana’s Medicaid expansion beyond June 2019 failed, although the legislature and Governor could still extend it. Recreational marijuana sales were legalized in Michigan and Missouri but defeated in North Dakota, while medical marijuana was approved in Utah.

Some of these ballot measure had large amounts of money spent on campaigns for and against them. In general, state laws do not restrict spending on ballot questions, so where corporate interests are at issue, corporations often spend large amounts of money on ballot measure campaigns. For example, a California ballot measure to limit dialysis clinic’s revenue had over $130 million spent on it, of which $110 million was spent in opposition to the measure, which failed. A California local rent control measure had over $100 million spent on it, three-quarters in opposition, and it failed. An energy market-related measure in Nevada had almost $100 million spent on it, with two-thirds in opposition, and it failed. In Arizona, an energy market-related measure with over $50 million in spending failed with 57% spent in opposition.

Among the 10 ballot measures in 2018 with the most spending (all had over $30 million in spending), the side spending more money won in every case.

So, although the results varied, there were a number of distinctly progressive ballot measures that were approved as part of the 2018 election. In several cases, they were approved by margins of over 60% even when the state’s partisan candidates’ races were very close. This was true, for example, for Florida’s restoration of voting rights to those with felony convictions and in Michigan for voting and redistricting reform.

In my next post, I will share some thoughts on policy issues that should be high on the House Democrats’ agenda when they take over control in January.

[1]      Ballotpedia, retrieved 11/23/18, “2018 election analysis: Notable ballot measure results,” (https://ballotpedia.org/2018_election_analysis:_Notable_Ballot_Measure_Results)

[2]      Rapoport, M., 11/9/18, “Tuesday’s verdict on voter suppression and gerrymandering,” The American Prospect (http://prospect.org/article/tuesday%E2%80%99s-verdict-on-voter-suppression-and-gerrymandering)

[3]      Weiser, W., & Weiner, D. I., 11/9/18, “Voters are hungry for democracy reform,” Brennan Center for Justice (https://www.brennancenter.org/blog/voters-are-hungry-democracy-reform)

STOPPING VULTURE CAPITALISM

The term vulture capitalism is used to refer to financial manipulation techniques used to extract profits from companies without regard to their health or survival. [1] Workers, consumers, suppliers, and the communities where a company is based, as well as taxpayers, typically end up getting the short end of the stick while the vulture capitalists realize significant financial gains. In previous posts, I outlined the vulture capitalist business model and highlighted several examples of vulture capitalism in action.

Vulture capitalism is allowed and facilitated by existing laws and regulations. These need to be changed to restrict private financial gain at the expense of our society and economy. Vulture capitalism is like pollution, it harms the public good while private interests benefit.

Here are some steps that should be taken to rein in vulture capitalism:

  • Reduce the amount of debt (i.e., loans) a company is allowed to have. Pass laws setting limits or institute bank regulations limiting lending to companies with high levels of debt.
  • Limit the payment of dividends to vulture capitalists in the period right after they buy a company. Dividends could be banned for two years after the acquisition of a company, which is what Europe does.
  • Require increased transparency from vulture capitalists, including the disclosure of all fees and expenses they charge to companies they control, as well as the share of profits they take.
  • Stop the favorable tax treatment of the income of vulture capitalists (aka the carried interest loophole). Currently, their income is taxed at only 15% while other high-income individuals typically pay 35% to 40%. Vulture capitalists’ income should simply be treated the same way as everyone else’s earned income.
  • Reduce the tax benefit of companies’ large interest payments by reducing the deductibility of interest expenses when debt exceeds a certain level. (Note: The 2017 Tax Cuts and Jobs Act took a step in this direction by limiting the deductibility of interest when calculating corporate income tax. Businesses with revenues over $25 million are only able to deduct interest expenses of up to 30 percent of adjusted taxable income. This targets the biggest leveraged buyout deals and was included in the tax bill because it raises $253 billion in government revenue over ten years.) [2]
  • End the favorable tax treatment of commercial real estate ownership so that sale / lease back deals are not profitable.
  • Make stock buybacks, which artificially boost the price of a stock, illegal, as they were before 1982, especially if borrowed money is used to pay for them.
  • Treat vulture capitalists as owners of companies (which they are) instead of passive investors (which is how they are typically treated in court today). This would make them liable for unsafe working conditions and illegal treatment of workers, such as wage theft. They could also be held responsible for worker retraining and pension liabilities, for example, instead of being able to avoid these responsibilities when they put companies through bankruptcy.
  • Establish strict rules about conflicts of interest for vulture capitalists, so they can’t engage in self-dealing that enriches them while the company they own is stripped of assets and stability. Prohibit them from being both a shareholder (e.g., owner) and a creditor who has made loans to the company. Prohibit them from buying assets sold by the company. Prohibit them from keeping or reacquiring control of the company after it has gone through bankruptcy.
  • Change bankruptcy laws so that lenders to a company are not the first ones to get paid in a bankruptcy. Workers (and their pension benefits), suppliers and other business partners, and even communities that are harmed should not have to wait in line behind those who have loaned a company money, which usually means they get nothing in a vulture capitalism bankruptcy. The priority for paying lenders first in bankruptcy provides too great an incentive to provide big loans to companies for leveraged buyouts, dividend payouts, and acquisitions of other companies.
  • Give workers voting representation (or increased representation) on the Board of Directors of a company in return for concessions workers make in pay, benefits, working conditions, or workforce levels. This would reflect the fact that the workers have made a major investment in the viability of the company. In Europe, it is routine for workers to have voting representation on companies’ Boards. A strong argument can be made that US companies would be more equitably run if this were the case here.

I urge you to ask your elected officials to take action to stop vulture capitalism. It undermines our economy and society, contributes to economic inequality, and does substantial harm to workers, suppliers, consumers, communities, and taxpayers. The only people who benefit are the greedy vulture capitalists.

[1]      Wikipedia, retrieved 10/24/18, “Vulture capitalist,” https://en.wikipedia.org/wiki/Vulture_capitalist

[2]      Dayen, D., 3/20/18, “Private equity: Looting ‘R’ us,” The American Prospect (http://prospect.org/article/private-equity-looting-r-us)

WHY WE NEED A POLITICAL REVOLUTION

Bill Moyers – one of the most savvy and respected commentators on US politics and society over the last 40+ years – just published an interview with the author of a book Moyers describes as the best political book of the year. [1] The author is Ben Fountain and the book is Beautiful Country Burn Again.

Fountain, an acclaimed novelist, was hired by The Guardian (a respected British daily newspaper with a US edition) to cover the 2016 US presidential race. His reflections on and analysis of the current US political environment are poignant and very relevant to this fall’s election.

Fountain found that millions of Americans are experiencing significant confusion, frustration, and anger. Working and middle-class people are finding it harder and harder to make ends meet and, therefore, are feeling more and more beleaguered. Their financial and psychological security has been undermined by the shredding of the social contract of the 1950s – 1970s, which promised that if they worked hard and played by the rules, they would have a secure middle class life. They are working harder than ever but, nonetheless, are falling further behind in their efforts to have a decent life, provide for their children, and have a secure retirement. Meanwhile, they see the wealthy doing better and better, getting richer and richer.

Fountain states that this is “not a situation that can be sustained long-term in a genuine democracy.” (p. 3 of the interview transcript). The tremendous increase in the inequality in income and wealth over the last 40 years has led many Americans to have a “basic, pervasive sense that the system is not fair.” (p. 4) Given this legitimate sense of grievance among the millions living economically precarious lives, the declaration by candidate Trump, Senators Bernie Sanders and Elizabeth Warren, and others that “The system is rigged” resonated strongly.

These beleaguered, aggrieved Americans are resentful and looking for an explanation for why they are experiencing such hard times. This makes them vulnerable to false narratives and scapegoating from politicians. This resentment is exacerbated by the fact that for many white Americans their position of power and privilege has been (rightfully) challenged over the last 50 years. The uncomfortable truths of the racism of America have presented “a challenge to some people’s identity and sense of personal integrity.” (p. 4)

Trump was a master at playing on this resentment, vulnerability, and discomfort. He gave many white Americans “psychological, emotional affirmation as an antidote for all the anxiety, all the resentment they’d been feeling.” (p. 5) Despite the obvious contradictions of Trump’s wealth, New York background, and anti-worker business practices, he provided easy-to-digest explanations and solutions for beleaguered white, working people (especially men). Fountain describes this as the “classic con man dynamic” that shows “how easily we’re taken in when we’re hearing what we want to hear … [which has] more to do with emotion and raw attraction than anything that might be called rational thought.” (p. 7)

Fountain says that the gullibility of the American public is in part due to what he calls the “Fantasy Industrial Complex.” The public believes in the possibility of the fantasy lifestyle we see in the advertisements and commercial propaganda that bombard us day and night from our screens in movies, TV, celebrity news, and social media. The cumulative effect is that this “numbs us out and dumbs us down.” (p. 8) As a result, “it takes a supreme effort of will on the individual’s part to distinguish advertising and propaganda from facts,” (p. 8) lies from truth, and fantasy from reality.

Fountain states that both of our political parties have lost their way. Trump, with the help and acquiescence of many others, has taken the Republican Party’s “politics of paranoia and racism, cultural resentment, xenophobia, misogyny and all the rest” to new extremes. The Democrats, during the 1990s with leadership from the Clintons, maintained their commitment to civil rights and diversity, including based on sexual orientation, but abandoned their commitment to workers, the poor, and Main Street for financial support from Wall Street and the wealthy. They stopped making the case for the important roles of government in maintaining a safety net and regulating business and the economy. As a result, the economic security of working and middle-class people collapsed, while income and wealth inequality skyrocketed.

The political power of the wealthy has been super-charged by changes in laws governing the financing of our political campaigns. Unlimited amounts of money can now be spent on campaigns and the sources of much of it may be kept secret. Without wealth, everyday citizens are left speechless in our elections and, therefore, underrepresented in the halls of government. The big campaign spenders have unprecedented access to and influence on policy makers, resulting in policy outcomes they favor and that benefit them further.

Democracy is overwhelmed by the hyper-capitalism in the US today with its great concentrations of wealth and power, both in our economy and in our political system and government. This is the result of the deregulation of business and the economy over the last 40 years, which has been supported by both political parties. The big corporations and the capitalists will overreach if they are unregulated and unrestrained. The 2008 crash demonstrated this again, as the savings and loan crash of the 1980s had, along with the dot com bubble crash and the crash that led to the Great Depression. Today, the system is indeed rigged, and the result is plutocracy – where the wealthy elites rule.

The American identity, and the exceptionalism of the US that the right-wing asserts, are based on democracy and the foundational principles of equality and representative government that is responsive to all the people. This is not the America we have today. Citizens can’t be equal with corporate CEOs and wealthy investors if they can’t earn enough to support a family and don’t have time to devote to public civic and political responsibilities, often because they are working multiple jobs or long hours.

Fountain concludes that “corporate power and concentrations of wealth have such a hold over our economic system that for the country to wrest some of that power from them, it can’t be incremental. It will take a political revolution.” (p. 12) The New Deal, responding to the 1929 financial crash and the Great Depression, was, in fact, a bloodless political revolution. It saved capitalism from itself, building the regulatory infrastructure that we relied on with great success for 50 years. It also built the physical infrastructure of sewers and water mains, parks, libraries, public buildings, the power grid, and many of the roads and bridges that we rely on to this day. We take all this largely for granted today, forgetting about the trauma that triggered it and the public sector response that turned the country around and built the foundation for the future.

Fountain notes that the American commitment to and understanding of the importance of public civic, political, and physical infrastructure “has been stunted the last 40 years by a very aggressive sales program on behalf of free-market fundamentalism and hard-core capitalism.” (p. 13) The subtitle of his book, Democracy, Rebellion, and Revolution, highlights his belief that we need a political revolution to save our democracy – and to save capitalism from itself.

You can be part of the political revolution:

  • By being an informed voter in this fall’s election, and
  • By encouraging and helping everyone you know to also be an informed voter this fall.

As I’ve written about previously, voter participation in the US is dismally low and higher voter turnout will produce different election and policy results. This is how the political revolution must happen.

[1]      Moyers, B., 10/12/18, “The bold bravery of ‘Beautiful Country Burn Again’”, Common Dreams (https://www.commondreams.org/views/2018/10/12/bold-bravery-beautiful-country-burn-again)

OUR DEMOCRACY NEEDS MORE VOTERS

The United States has very low rates of participation in our “democracy,” which is perhaps most dramatically evident in our very low voter turnout. In our last presidential election – a very visible and hotly contested race – only a bit over one-half (roughly 56%) of those eligible voted. In the upcoming 2018 elections for Congress and state offices, it is likely that only a bit over one-third of those eligible will vote.

This low voter participation is not healthy for a democracy and is inconsistent with our democratic ideals and principles of government of, by, and for the people. Worldwide, most other democracies have higher voter participation; Belgium leads among the 34 advanced democracies at 87% with the US’s 56% in 27th place. [1]

Our voting system, with most voting procedures determined by the states, does little to encourage voter participation. For example, voting on Tuesdays, a work day, has never been convenient for working people. Moving election day to a weekend or making it a holiday would make voting more convenient and almost certainly increase participation. The voter registration rules set by the states have historically set deadlines to register to vote well before election day and required residents to appear in a government office to register, neither of which encourages voting.

In the 2016 presidential election, voter participation varied among the states from 74% in Minnesota and 71% in New Hampshire and Maine, to 42% in Hawaii and 50% in West Virginia. [2] Some states have encouraged voter participation by allowing early and expanded absentee voting, as well as same-day registration.

Many states are putting hurdles in front of potential voters rather than encouraging participation. In most cases, these efforts to restrict or discourage voting have political motivations, usually to reduce voting by groups that tend to vote for Democrats. Some states have reduced early or absentee voting. Some have reduced the number of voting locations, making it more difficult for some voters to get to the polls or resulting in waiting lines to vote, sometimes waits of over an hour.

Thirteen states have imposed more restrictive identification requirements for voting since 2010, typically requiring voters to produce a government-issued ID. It is estimated that 21 million eligible voters do not have a such an ID. So, in the states that require them, voting becomes much more difficult, requiring these potential voters to obtain a government ID in advance of the election. This and other policies that suppress voting are profoundly anti-democratic and have no valid, non-political rationale. [3]

Four states have laws that prohibit Americans who have been convicted of a felony crime from ever voting, even after they have completed their sentences. It is estimated that over 6 million Americans cannot vote because of this felony disenfranchisement.

In general, people who are better-off economically, have more education, and are older are more likely to vote and those who are low-income, young, and non-white are less likely to vote. For example, 41% of registered voters over 70 vote regularly while only 1% of those between 18 and 29 vote regularly.

Research has found that voters and non-voters support different economic policies. Not surprisingly, given their demographics, non-voters are more supportive of policies that promote economic equality and provide a safety net for those experiencing economic hardship. [4] Therefore, getting significant numbers of non-voters to vote would likely change election results and policies.

Some eligible voters don’t vote because they feel that their vote doesn’t matter. Gerrymandering of district boundaries means that indeed some voters don’t matter because the district they live in is overwhelming tilted to a party or ideology that they don’t support. In primary elections, some states require that you be registered in a party to vote in that party’s election. This means that the large number of voters who are independent or unenrolled in a party have no say in deciding which Democrat or Republican will appear on the ballot for the final election.

Some eligible voters feel, with good reason, that our electoral and political systems are rigged in favor of large corporations and employers, as well as the wealthy individuals who are typically the executives or investors in those corporations. Because our election campaigns are almost exclusively funded by wealthy individuals and corporations, and backed up with lobbying and the revolving door of personnel moving between corporations and positions in government, these alienated voters see no difference between the two political parties and feel their voices are inevitably drowned out at the ballot box and in policy debates.

Some analysts make the case that the lack of participation in our democracy and voting reflects not just a loss of faith in government and the efficacy of participation, but also a loss of experience with civic activity more broadly. A decline in volunteer participation in civic organizations and groups in the US has been documented since the 1960s. One study found that from 1994 to 2004 memberships in civic organizations and groups fell by 21%. This trend is likely accelerating. A 2010 census survey found that only 11% of respondents had served on a committee or as an officer of any group or organization in the previous year. Voluntary participation in churches, clubs, fraternal organizations, and labor unions, for example, provide individuals with experience with self-governance, democratic decision making, and participation in civic life focused on building community and working together for a greater good. As participation in local civic life has withered, the orientation to and understanding of the importance of participating in our democratic political process has declined as well. [5]

Higher voter participation would produce elected representatives that more accurately reflect the priorities of the public and, if participation were consistently high, would result in less partisanship and more stable policies. Currently, the Republicans in particular, but the Democrats too, are focused on low turnout elections where they pander to their hardcore supporters, known as their “base.” Therefore, their candidates and those who get elected tend to be focused on appealing to this small group of supporters who often have relatively extreme views. Higher voter participation would require the parties and their candidates to work to appeal to a broader set of voters. This would make a big difference in election results.

I encourage you to ask candidates and elected officials what they are doing to increase voter participation. This is a core issue that we must address if our democracy is to live up to its promise and potential.

[1]      The Sanders Institute, May 2018, “Why don’t Americans vote?” (https://www.sandersinstitute.com/blog/why-dont-americans-vote)

[2]      Khalid, A., Gonyea, D., & Fadel, L., 9/10/18, “On the sidelines of democracy: Exploring why so many Americans don’t vote,” National Public Radio (https://www.npr.org/2018/09/10/645223716/on-the-sidelines-of-democracy-exploring-why-so-many-americans-dont-vote)

[3]      Brennan Center for Justice, retrieved 9/18/18, “New voting restrictions in America,” (https://www.brennancenter.org/new-voting-restrictions-america)

[4]      Khalid, Gonyea, & Fadel, 9/10/18, see above

[5]      Appelbaum, Y., Oct. 2018, “Americans aren’t practicing democracy anymore,” The Atlantic (https://www.theatlantic.com/magazine/archive/2018/10/losing-the-democratic-habit/568336/)

CONSUMER FINANCE PROTECTIONS UNDER ATTACK

Many in Congress and the Trump administration are openly working to weaken the Consumer Financial Protection Bureau (CFPB). It was created as part of the Dodd-Frank Law, the major piece of legislation passed to reform the financial industry after the 2008 crash. The CFPB protects consumers from abusive and fraudulent practices of financial corporations, such as mortgage loans that consumers can’t afford (which were a major element of the 2008 crash and the foreclosures that destroyed many families’ savings), abusive and discriminatory practices on student and auto loans, usury by payday lenders, and deceptive marketing. The CFPB also reduces the risk of future financial industry crashes by stopping the marketing of financial products that can create financial bubbles and lead to high rates of loan defaults and bankruptcies. These can threaten the stability of financial corporations, as happened with mortgages in 2008.

The CFPB’s role is to protect consumers from unsafe financial products and practices in the same way that the Consumer Product Safety Commission protects consumers from unsafe physical products – from appliances to toys. The financial industry has opposed the CFPB from when it was first included in drafts of the Dodd-Frank legislation. The financial industry does not want to be held accountable. It wants to be able to make profits with no holds barred. It has been lobbying hard to have the CFPB emasculated.

Despite the valuable roles the CFPB can and has been playing, Congress and the Trump administration, at the urging of the financial industry, have been working to keep the CFPB from being an effective advocate for consumers by:

  • Blocking or repealing its consumer protection regulations
  • Stopping its enforcement actions
  • Weakening its independence and effectiveness

For example, in April Congress passed and the President signed a law repealing a Consumer Financial Protection Bureau (CFPB) regulation that prevented car dealers and corporations making car loans from discriminating based on race. The CFPB had fined several lenders and dealers millions of dollars for charging higher interest rates to Black and Hispanic borrowers, even when they had the same credit scores as White borrowers. Consumer advocacy groups note that this discriminatory behavior is pervasive and repeal of this regulation will allow it to continue. [1]

In October, a law was passed repealing a CFPB regulation that allowed consumers to band together in class action lawsuits against financial corporations and prohibited financial corporations from forcing consumers into arbitration. Many financial institutions include mandatory arbitration clauses in the agreements consumers sign when they open a bank account, take out a loan, or get a credit card. This legal language, buried in the fine print, requires the consumer to pursue any claim against the company only through arbitration and not through the courts or a class action lawsuit. The arbitration process is skewed in favor of the financial institution and a typical consumer doesn’t have the time and resources to pursue their claim on their own. [2]

Forced arbitration language initially protected Wells Fargo and Equifax by preventing large-scale consumer scandals from coming to light. Forcing consumers to pursue claims individually in arbitration hid Wells Fargo’s opening of and charging millions of customers for unauthorized accounts. Only after many months did the authorities and the public become aware of the scandal and its scale, and force Wells Fargo to compensate customers. The same pattern occurred with Wells Fargo’s requirement that auto loan borrowers buy insurance they didn’t need and with Equifax’s huge data breach.

To respond to these problems, the CFPB issued a regulation banning the use of mandatory arbitration clauses by financial corporations in individual consumer agreements. However, at the behest of the financial industry, Republicans in Congress pushed through a bill repealing the regulation; Vice President Pence cast the tie-breaking vote in the Senate.

Separate from Congressional action, Mick Mulvaney, the acting director of the CFPB appointed by President Trump in November 2017, has delayed regulation of payday lenders, who charge usurious interest rates and often trap customers into loans they can never repay, while the lender collects huge amounts of interest and fees.

Mulvaney has also stalled the CFPB’s investigation of the Equifax data breach, which allowed hackers to obtain the personal information, including Social Security numbers and birth dates, of 145 million people. Equifax’s breach was particularly egregious because it was preventable: Equifax did not install a software patch that had been available for months. Equifax failed to disclose the breach for months while people’s identities and accounts were at-risk. And Equifax executives sold $2 million of stock in the months between the breach and its becoming public knowledge. [3]

Not content to just attack the regulations and enforcement actions of the CFPB, Mulvaney, the Trump administration, and members of Congress (mainly Republicans) have worked to weaken the CFPB’s organizational effectiveness and independence. In June, Mulvaney fired the agency’s 25-member advisory board which included consumer advocates, experts, and industry executives. It had played, and was created to play, an influential role in advising CFPB’s leadership on regulations and policies. Two days before their firing, eleven of the 25 members held a press conference to criticize Mulvaney for canceling legally required meetings of the advisory board, ignoring them and their advice, and making unwise changes at the CFPB. [4]

Mulvaney has stripped enforcement powers from the CFPB unit pursuing discrimination cases. He has undermined the consumer complaint system. [5] He has asked Congress to weaken CFPB’s power and independence by giving Congress and the executive branch more control over its budget and regulations. [6]

The reasons we need a strong and independent Consumer Financial Protection Bureau are clear. Its enforcement actions have led to a $1 billion fine on Wells Fargo for a series of misdeeds in consumer banking, lending, compliance with regulations, and overall management, [7] [8] as well as to a $335 million settlement with Citigroup for overcharging 1.75 million credit card customers over eight years. [9]

Since its creation, the CFPB has protected consumers from financial corporations that violate the law. It has gotten compensation of over $12 billion for more than 31 million victimized consumers. In less than 8 years, it has responded to over 1.5 million consumer complaints and issued, for example, new standards that make home mortgage documents clearer and easier to understand. At CFPB’s website, you can find information that will help you understand your credit score and make a good decision about a car or student loan. (See my earlier post about the CFPB here for more information.)

I urge you to contact your U.S. Representative and Senators and to ask them to support the Consumer Financial Protection Bureau and the very valuable work it does. The efforts to weaken the CFPB and regulation of the big financial corporations are putting consumers at-risk and increasing the likelihood of another collapse of the financial sector and our economy. You can find your US Representative’s name and contact information here and your Senators’ information here.

[1]      Merle, R., 4/18/18, “The Senate just voted to kill a policy warning auto lenders about discrimination against minority borrowers,” Washington Post

[2]      Freking, K., 10/25/17, “Senate votes to end consumer credit rule,” The Boston Globe from the Associated Press

[3]      Rucker, P., 2/4/18, “Exclusive: U.S. consumer protection official puts Equifax probe on ice – sources,” Reuters (https://www.reuters.com/article/us-usa-equifax-cfpb/exclusive-u-s-consumer-protection-official-puts-equifax-probe-on-ice-sources-idUSKBN1FP0IZ)

[4]      Merle, R., 6/7/18, “Consumer bureau chief fires advisers,” The Boston Globe from the Washington Post

[5]      Singletary, M., 4/8/18, “Switching from watchdog to lapdog,” The Boston Globe

[6]      Merle, R., 4/3/18, “Trump-appointed head of consumer watchdog asks Congress to hamstring his agency,” Washington Post

[7]      Dreier, P., 2/7/18, “Wells Fargo gets what it deserves – and just in time,” The American Prospect (http://prospect.org/article/wells-fargo-gets-what-it-deserves-and-just-time)

[8]      Flitter, E., & Thrush, G., 4/20/18, “US to slap $1b fine on Wells Fargo,” The Boston Globe from the New York Times

[9]      Hamilton, J., 6/30/18, “Citigroup will repay $335 million to customers,” The Boston Globe from Bloomberg

THE DISMANTLING OF POST-CRASH FINANCIAL INDUSTRY REFORMS

Many in Congress and the Trump administration have either forgotten or don’t care about protecting us from the risky and corrupt behavior of Wall St. financial corporations that caused the 2008 economic collapse and Great Recession. They are repealing, weakening, or failing to implement the policies that were put in place to reduce the likelihood that such behavior and events would happen again. Keep in mind that those policies didn’t go far enough to prevent such as event from happening again – such as breaking up to too-big-too-fail financial corporations or separating risky financial trading activity from federally-insured consumer banking.

The Dodd-Frank Law was the major piece of legislation passed to reform the financial industry and reduce the likelihood of another meltdown. It included the creation of the Consumer Financial Protection Bureau (CFPB) to protect consumers from unsavory practices by financial corporations, such as the making of mortgage loans that were highly likely, if not certain, to be unaffordable for the home owners.

The financial industry has fought the implementation of these new safeguards; industry-friendly regulators have moved so slowly that some of the provisions of the Dodd-Frank Law are just finally getting implemented eight years later. For example, the simple requirement that corporations disclose the ratio of the pay of the corporation’s Chief Executive Officer (CEO) to that of the midpoint of workers’ pay is just now being implemented. Honeywell Corporation just reported that its CEO made 333 times what it’s median employee earns. And it didn’t include the pay of employees in developing countries, which undoubtedly would have increased the ratio. Most measures of the CEO-to-worker pay ratio have found CEO pay to be between 200 and 350 times the pay of the median worker. Fifty years ago, the ratio was roughly 20 and even Harvard Business School gurus felt at the time that this ratio should be a ceiling on CEO pay. [1]

Meanwhile, Congress and the Trump administration, at the urging of Wall St. lobbyists, have been dismantling the Dodd-Frank financial reforms, including:

  • Weakening regulations that reduce the risk of big financial corporations going bankrupt
  • Blocking or repealing consumer protection regulations from the Consumer Financial Protection Bureau (CFPB)
  • Stopping enforcement actions of the CFPB
  • Weakening the CFPB’s independence and effectiveness

Regulations that limit the risks from speculative financial transactions by big financial corporations are being weakened. Industry-friendly regulators plan to weaken the so-called Volcker Rule, thereby giving banks more flexibility to engage in financial trading activity that can be highly profitable but also vulnerable to big losses. Given that these banks also have consumer deposits that are federally insured, big losses could lead to the need for taxpayer bailouts (again). [2] Paul Volcker, the former head of the Federal Reserve banking and oversight system, had recommended this regulation to limit financial corporations from engaging in financial risk-taking when government-funded-insurance would end up covering any big losses. The six largest US financial corporations have spent millions of dollars lobbying for this change. (They are Bank of America, Citigroup, Goldman Sachs, JPMorgan Chase, Morgan Stanley, and Wells Fargo.)

Federal regulators are also proposing to reduce that amount of a financial corporation’s own money that must be available to cover any losses from lending, trading, speculating, and other activities. Currently, financial corporations must have only 6 cents of their own money (reserves) for every dollar of potential financial liability. This would mean that if the corporation sustained losses of just 6% on the tens of trillions of dollars of loans, trades, speculative investments, etc. that it has, that it would be bankrupt and looking for a government (i.e., taxpayer) bailout.

In 2008, the reserve requirement was only 3 cents on every dollar and the big financial corporations had losses of twice that amount. Therefore, the government and taxpayers had to provide trillions of dollars to bail them out and prevent bankruptcies that would have caused a much more severe economic collapse.

Given the experiences of 2008, it seems foolish to be reducing the reserves that financial corporations must hold to cover losses. However, reducing reserves and increasing leverage (as it is referred to) allows the financial corporations to make more and bigger financial transactions, which, if all goes well, can increase their profits. However, it also increases the risk that a bailout will be needed. [3]

The financial corporations claim that a reduction in reserve requirements will allow them to make more loans to spur business growth and the economy. However, there is no evidence of unmet demand for loans and experience indicates that the financial corporations will actually use the reduction in reserves to pay more to shareholders and executives, buyback stock, and engage in speculation and non-banking activities.

Note that the big financial corporations are all reporting record profits even before any of these changes goes into effect. Banks, overall, reported $56 billion in profits during the first quarter of 2018, up 28% from a year earlier. [4]

In May, Congress passed, and the President signed, a law reducing the stringency of the oversight of banks, weakening the oversight that the Dodd-Frank Law put in place to reduce the risk of bankruptcies and government bailouts. The 26 banks with between $50 billion and $250 billion in assets (including American Express and Ally Financial) are now exempt from the strictest oversight. The 12 biggest banks will still be subject to the strictest oversight, although they can probably take advantage of some of the weakening of oversight in the law.

One result of the law is expected to be mergers of small and medium size banks because they can get bigger without triggering stricter oversight. The law also exempts “small” banks (under $10 billion in assets) from the Volcker Rule banning risky financial speculation and from reporting detailed data on borrowers that was targeted at preventing discrimination. [5]

I urge you to contact your U.S. Representative and Senators and to ask them to support strong regulation of the big financial corporations. Encourage them not only to oppose efforts to weaken the regulations and oversight put in place by the post-collapse Dodd-Frank Law, but to strengthen regulations and oversight to prevent, not just reduce the likelihood of, another financial industry collapse and crisis for the economy. The weakening of the regulations and oversight of the big financial corporations is increasing the likelihood of another financial sector collapse that would do serious damage to our economy and require a government, taxpayer-funded bailout.

You can find your US Representative’s name and contact information at: http://www.house.gov/representatives/find/. You can find your US Senators’ names and contact information at: http://www.senate.gov/general/contact_information/senators_cfm.cfm.

[1]      Meyerson, H., 2/22/18, The American Prospect blog (http://prospect.org/blog/on-tap?page=6)

[2]      Flitter, E., & Rappeport, A., 5/30/18, “Big banks to get a break from limits on risky trading,” The New York Times

[3]      Hoenig, T.M., & Bair, S.C., 4/26/18, “Relaxing bank capital requirements would risk another crisis,” Wall Street Journal

[4]      Thomhave, K., 5/25/18, “A Great Deal for Banks, Not So Much for American Jobs,” The American Prospect (http://prospect.org/blog/tapped/great-deal-banks-not-so-much-american-jobs)

[5]      Werner, E., 5/25/18, “Trump signs bill easing banking rules passed after crisis,” The Boston Globe from the Washington Post

STOPPING GERRYMANDERING; RESTORING DEMOCRACY

Gerrymandering, the manipulation of the boundaries of electoral districts to predetermine outcomes, has become more blatant, dramatic, and effective in the 21st century. Please see my previous post for a discussion of how extreme partisan gerrymandering is undermining our democracy. The redrawing of electoral districts is done every ten years after new population data is available from the Census. Typically, state legislatures do the redistricting, and these partisan, elected officials have a built-in incentive to engage in partisan and other types of gerrymandering.

Gerrymandering can be stopped through multiple strategies:

  • Challenging gerrymandered districts in court,
  • Establishing standards for districts and the redistricting process, and
  • Creating non-partisan commissions to do the redistricting.

Districts that appear to be gerrymandered are being challenged in state and federal courts. In Pennsylvania, state courts ruled that the districts drawn after the 2010 Census were illegally gerrymandered and the US Supreme Court upheld this finding. There are currently two other cases before the US Supreme Court, one from Wisconsin challenging Republican gerrymandering and one from Maryland challenging Democratic gerrymandering. Decisions are expected to be announced this month. Unfortunately, these decisions will probably be too late to allow the gerrymandering to be fixed before the 2018 elections. [1]

Another solution to gerrymandering is to write standards into state or federal laws that govern how districts are drawn and the redistricting process used to draw them. There are several statistical tests that can be done of historical election results to identify whether gerrymandering is likely to have played a role in the outcomes. These tests can also be applied to projected results based on party enrollment and past voting patterns in proposed districts. [2] [3] These tests are valuable because they can be used during the redistricting process or by courts afterwards to determine if districts are being drawn fairly.

Perhaps, most promising is the creation by states of truly non-partisan, independent redistricting commissions that remove redistricting from the hands of partisan legislatures. Currently, twenty-one states use some form of redistricting commission for redrawing either or both of state legislative districts and congressional districts. Some are more independent of partisan political influence than others. [4]

The use of and interest in redistricting commissions is growing. In 2017, 29 state legislatures considered bills related to creating redistricting commissions. In the Pennsylvania legislature, a bill to create a redistricting commission is gaining significant support. In other states, citizens are putting measures to create redistricting commissions on the ballot. In Ohio, a badly gerrymandered state, 75% of voters recently approved a proposal on the ballot to extend the role of their independent redistricting commission to include congressional districts, in addition to state legislative districts. This was forced on elected officials by a grassroots campaign that collected nearly 250,000 signatures. Michigan is likely to have a proposal on its November 2018 ballot to create such a commission because of a grassroots organization that collected 425,000 signatures. Redistricting reforms are likely to appear on the ballot this fall in Arkansas, Colorado, Missouri, and Utah. These redistricting reform efforts are backed by strong bipartisan coalitions. [5] [6]

Gerrymandering is a significant threat to representative democracy as it undermines the basic tenet that every voter has an equal voice. It distorts democracy and lets the voices of a small subset of voters, often those with extreme views, dominate elections. The elected representatives, therefore, tend to reflect these minority and often extreme views, leading to extreme partisanship and gridlock in our legislative bodies.

In gerrymandered districts, many voters, with good reason, don’t feel they have a voice and that their elected officials don’t represent their interests and points of view. The broad support for ending extreme partisan gerrymandering is bipartisan: 80% of Democrats, 68% of independents, and 65% of Republicans back efforts to end it.

I urge you to contact your representatives in your state legislature and ask them to ensure fair redistricting after the 2020 Census. If you’re in one of the states mentioned above as likely to have a relevant ballot question in November, I encourage you to find information on the effort to reform redistricting and then get involved if you can. To learn more about the redistricting process in your state, the National Conference of State Legislatures has information here, and if you’re interested in knowing if there was a bill filed in your state legislature relative to the creation of a redistricting commission look here. For more information on ending gerrymandering and other reforms to our voting systems in general, Fair Vote has lots of information on its website.

[1]      Wheeler, R., 2/28/18, “The Supreme Court and partisan gerrymandering cases,” The Brookings Institution (https://www.brookings.edu/blog/unpacked/2018/02/28/the-supreme-court-and-partisan-gerrymandering-cases/)

[2]      Wang, S., & Remlinger, B., 9/25/17, “Slaying the partisan gerrymander,” The American Prospect (http://prospect.org/article/slaying-partisan-gerrymander)

[3]      Royden, L., Li, M., & Rudensky, Y., 3/23/18, “Extreme Gerrymandering & the 2018 midterm,” Brennan Center for Justice (https://www.brennancenter.org/publication/extreme-gerrymandering-2018-midterm)

[4]      Wikipedia, Retrieved from the Internet 6/4/18, “Redistricting commission” (https://en.wikipedia.org/wiki/Redistricting_commission)

[5]      Rapoport, M., 12/7/17, “Prospects brightening for redistricting reform,” The American Prospect (http://prospect.org/article/prospects-brightening-redistricting-reform)

[6]      Daley, D., 6/14/18, “Voters take charge in making elections more fair,” The Boston Globe

THE EFFECTS OF THE FEDERAL TAX CUT

The initial effects of the federal tax cuts enacted in December 2017 by the Tax Cuts and Jobs Act (TCJA) are now visible; they are not what their Republican architects promised.

Although it’s too early to know definitively if the tax cuts will have an effect on the overall economy, growth in the first quarter of 2018 was steady but not noteworthy. There is no evidence of the tax-cut-fueled acceleration of economic growth the Republicans promised. [1] The latest projections, as well as experiences elsewhere, strongly suggest that the effects on economic growth will be small at best.

The effects of the tax cut on the deficit are becoming clearer. The latest projections from the non-partisan Congressional Budget Office (CBO) are that the federal government’s revenue will be reduced by $1.3 trillion over the next 10 years. When the costs of paying interest on the growing debt are included, the CBO projects that the cumulative deficit will increase by $1.9 trillion over the period from 2018 to 2028 due to the tax cuts, despite the Republicans’ promise of no increase in the deficit. [2] Furthermore, the growth in the deficit will be exacerbated by the spending bill that was enacted in early 2018, which increases spending by $300 million over the next two years.

The CBO projects the federal government’s deficit will be $804 billion for fiscal year 2018, up 21% from 2017. Furthermore, it projects the deficit will be over $1 trillion a year by 2020, despite President Trump’s campaign promise to eliminate the deficit. From 2021 to 2028, the CBO estimates the deficits will average 4.9% of Gross Domestic Product (GDP), the total of all economic activity in the U.S. This is higher than at any time since World War II, except during the Great Recession of 2008 – 2009 when tax revenue slumped with the collapsing economy and spending was high to bail out Wall St. and to stimulate the economy.

The growing deficit reflects the gap between what the Republicans who control the federal government want to spend and their unwillingness to enact the taxes necessary to pay for it. This is blatant fiscal irresponsibility. Moreover, growing deficits are of serious concern when the economy is doing well and unemployment is low. In this situation, many economists and responsible officials recommend reducing the deficit and even generating a surplus, as President Clinton did, so that the country has the capacity to weather the next economic downturn.

Analysis of the individual tax cuts finds that the wealthiest households will receive the biggest tax cuts, both in terms of dollars and percentage increase in after-tax income. Households with incomes under $25,000 will receive an average tax cut of $40. Meanwhile, those with incomes from $49,000 to $86,000 will receive an average tax cut of about $800, those with incomes of $308,000 to $733,000 will get about $11,200, and those with incomes over $733,000 will get a tax cut of about $33,000. [3]

As an example of the benefits of the corporate tax cuts, the six biggest, multi-national banking corporations (JPMorgan Chase, Citigroup, Wells Fargo, Goldman Sachs, Morgan Stanley, and Bank of America) together paid at least $3.6 billion less in taxes for the first quarter of 2018 than they would have without the 2017 tax cut law. Before the tax cut, these corporations had paid 28% to 31% of their income in taxes; for the first quarter of 2018 they paid between 17.2% and 23.7%. Their tax rate is estimated to be 20% – 22% for the full year, meaning they will receive a tax cut of $19 billion for this year. [4] By the way, the tax cut law also provides benefits, and therefore incentives, to corporations to move jobs and profits overseas to dodge U.S. income taxes. [5]

The Economic Policy Institute projects that roughly 80% of the benefits of the corporate tax cuts will be passed on to shareholders and executives, and not used to pay employees or re-invest in the business. Although some corporations gave small raises or bonuses to their workers – thanks to intense public visibility and pressure – a huge chunk of the tax cut has been used to buy back company stock.

In just the four months since the tax cuts were enacted in December, corporations have announced more than $250 billion in stock buybacks. This rewards stockholders and executives as it pushes up the price of the corporation’s stock. These buyback announcements are an acceleration from an already record-high, $5.1 trillion of buybacks over the previous decade. Virtually all the profits of the country’s 500 largest corporations from 2005 to 2015 went to share buybacks and dividends, and not to workers’ wages or investments that would increase productivity, both of which have stagnated. [6]

Stock buybacks give huge rewards to corporate executives because much of their compensation is paid in shares of stock. For example, the CEO of Wells Fargo bank got a $4.6 million raise for the year due to the increase in the corporation’s stock price from stock buybacks.

Stock buybacks were illegal until 1982, which is roughly (and probably not wholly coincidentally) the same time wages stopped rising for most Americans. Before then, a bigger share of corporate profits was used to increase workers’ wages and re-invest in the business, rather than for less economically productive stock buybacks. [7]

Some corporations have announced bonuses or pay increases for workers. However, so far these announcements have applied to only 4.1% of workers and roughly 80% of them are one-time bonuses not on-going pay increases, even though the corporations’ tax cuts are permanent and on-going. [8] In some cases, the workers have not received (and may never receive) actual increases in pay. For example, some corporations have made the pay increases the subject of negotiations with unions. Corporations have announced spending 42 times as much on stock buybacks as on increases in employees’ pay. [9]

To put all this in some perspective, it is estimated that the Koch brothers, extremely wealthy corporate executives, will see their incomes increase by about $27 million per week or $1.4 billion per year. Not coincidentally, they have pumped hundreds of millions of dollars into Republican election campaigns over the last four years. Meanwhile, the few workers lucky enough to get a pay increase are typically getting, at most, a one-time bonus of a few hundred or maybe a thousand dollars for the year. [10]

I encourage you to contact your U.S. Representative and Senators and to ask them to support the Reward Work Act. This bill would significantly limit stock buybacks, give employees of publicly traded corporations the power to elect one-third of the corporation’s Board of Directors, and force corporations to use their tax cuts to reward their workers, instead of executives and stockholders.

You can find your US Representative’s name and contact information at: http://www.house.gov/representatives/find/. You can find your US Senators’ names and contact information at: http://www.senate.gov/general/contact_information/senators_cfm.cfm.

[1]      Horowitz, E., 4/28/18, “So far, tax cuts aren’t noticeably driving growth,” The Boston Globe

[2]      Stein, J., 4/9/18, “Deficit to top $1 trillion per year by 2020, CBO says,” The Washington Post

[3]      Sammartino, F., Stallworth, P., & Weiner, D., 3/28/18, “The effect of the Tax Cuts and Jobs Act individual income tax provisions across income groups and across the states,” Tax Policy Center (http://www.taxpolicycenter.org/publications/effect-tcja-individual-income-tax-provisions-across-income-groups-and-across-states/full)

[4]      Sweet, K., 4/20/18, “Big banks saved $3.6 billion in taxes last quarter under new law,” Associated Press

[5]      Thomhave, K., “Even the CBO says the GOP tax reform will incentivize corporate offshoring,” The American Prospect (http://prospect.org/article/even-cbo-says-gop-tax-reform-will-incentivize-corporate-offshoring)

[6]      Heath, T., 4/13/18, “America’s biggest companies are announcing buybacks. But whose cash is it, anyway?” The Washington Post

[7]      Reich, R., 3/21/18, “The buyback boondoggle is beggaring America,” The American Prospect (http://prospect.org/article/buyback-boondoggle-beggaring-america)

[8]      Madrid, M., 4/13/18, “Waiting — and waiting– for corporate tax cuts to deliver those wage hikes,” The American Prospect (http://prospect.org/article/waiting-and-waiting-corporate-tax-cuts-deliver-those-wage-hikes)

[9]      Americans for Tax Fairness, retrieved 4/28/18, “Trump tax cut truths,” (https://americansfortaxfairness.org/trumptaxcuttruths/)

[10]     Hoxie, J., 4/18/18, “Five tax myths debunked,” Institute for Policy Studies (http://otherwords.org/five-tax-myths-debunked/)

THE UNDERMINING OF THE 2020 CENSUS

The 2020 Census is coming up soon and preparations for it are underway. You’ve probably heard about the controversy over the Trump administration’s effort to add a question on citizenship to the Census. Unfortunately, the politicization and undermining of the Census runs much deeper than just this question.

The Census is supposed to enumerate every person living in the U.S., regardless of whether they are a citizen or not. This is the Constitutional mandate of the Census. It’s used to determine boundaries for Congressional Districts and state legislative districts, as well as votes in the Electoral College (which, of course, elects the President). It’s also used every year to apportion $675 billion in federal funding for health care, schools, housing, and roads. Essentially every major U.S. institution uses Census data, from businesses analyzing markets to countless researchers analyzing demographics and driving policy decisions.

The 2010 Census was the most accurate one in history, but it over-counted white residents by almost 1% (e.g., people with more than one home) and under-counted Blacks by 2%, Hispanics by 1.5%, and Native Americans by 5% – failing to count 1.5 million residents of color. [1] The fairness and accuracy of the Census, as well as trust in it and its process, are essential elements of the core infrastructure of our democracy.

The undermining of an accurate count in the 2020 Census began in 2012 and has accelerated more recently. In 2012, Congress directed the Census Bureau, over the objections of the Obama White House, to spend less on the 2020 Census than it had on the 2010 Census, despite inflation and a population that was expected to grow by 25 million residents (about 8%). After Trump’s election in 2016, the Bureau’s budget was cut by another 10%, although some of that funding was just restored last month.

The Census Bureau’s Director resigned in June 2017 after Congressional budget cuts. The Deputy Director position was already vacant; however, the Trump administration has not yet nominated anyone to fill either of these posts. A rumored nominee was an academic without any Census experience who had supported racial and partisan gerrymandering of Congressional Districts. Meanwhile, the Trump administration has installed a “special adviser” at the Census Bureau who is from a partisan polling firm and who reports directly to the White House. These personnel issues undermine the Bureau’s ability to effectively run the 2020 Census.

Budget cuts have forced the Census Bureau to cancel crucial testing of the Census process. These tests are particularly important because for the first time the Census will be conducted primarily through on-line responses. Rather than mailing Census forms to every household, a postcard will be sent with instructions on how to fill out the on-line form. As in the past, Census workers, called enumerators, will visit households that don’t respond to the initial Census mailing to ensure the counting of those residents. Even though the initial response rate is likely to fall because of low-income or elders’ households that lack the technological capability to respond on-line, the number of enumerators has been cut by about 200,000, from 500,000 to 300,000. (Roughly a third of low-income households and a third of Black and Hispanic households lack Internet access and a computer.) The enumerators are also charged with finding and obtaining Census responses from residents who did not receive the mailing.

Budget cuts also forced the Census Bureau to cancel trial runs specifically designed to help it figure out how to reach hard-to-count populations. It also canceled two of three “dress rehearsals.” It has half as many field offices as it had in 2010. The development of the Bureau’s technology systems is behind schedule and the launch of its website is not scheduled until April 2020. Cybersecurity for the new on-line Census is a major concern as well. A group of 51 economists from across the country and across the political spectrum have written a letter to Congress supporting “robust funding of the 2020 Census sufficient to ensure a fair and accurate count of the U.S. population.” [2]

The budget cuts mean that the outreach and publicity the Census Bureau will do to encourage responding to the Census have been reduced substantially. Currently, the Bureau has only 40 employees working on outreach, compared with 120 at this point 10 years ago. States, cities, and private foundations are already working to fill this void, but they will be hard pressed to match the 2010 effort where the Census Bureau spent $340 million on promotional advertising.

As if these challenges to accurately counting every resident weren’t enough, the Trump administration recently announced its intention to add a question to the Census that would ask whether the respondent is a citizen. The Census Bureau was already concerned that the Trump administration’s anti-immigrant actions and rhetoric were going to make it harder to get an accurate count of immigrant residents, both documented and undocumented ones. A citizenship question will only exacerbate this challenge. Not only will non-citizens be less likely to respond to the Census, but citizens in the 16 million households with some undocumented members may refuse to respond out of fear of exposing their undocumented family members. [3]

The Trump administration says that getting citizenship data in the Census is necessary to enforce the Voting Rights Act and prevent discrimination against minorities. This claim would be laughable if its implications weren’t so serious. There hasn’t been a question on citizenship on the Census for 70 years. [4] Furthermore, the American Community Survey, which is done annually with a statistically accurate sample that consists of 3.5 million residents, does have a question on citizenship that provides the data needed to analyze issues where citizenship information is needed.

The opposition to adding a question on citizenship has been swift and broad. Six former Census Bureau Directors who served under both Republicans and Democrats wrote a letter in opposition. Two dozen states and cities have announced a lawsuit aimed at blocking the inclusion of this question. [5] Normally, adding a question to the Census is a careful process with testing to determine effects on response rate and other factors. In this case, there is no opportunity to test the effect of adding this question given that very limited field testing is being done and that it is already underway.

An under-count of immigrants and people of color would shift economic and political power to rural, white, conservative populations. These effects would last for at least the next 10 years until the 2030 Census. California estimates that each resident who is not counted will cost the state $1,900 in federal funding each year. It receives about $77 billion annually in federal funding and could lose about $2 billion each year for the next 10 years if its low-income and immigrant populations are significantly under-counted. This could also cost the state one or two seats in the House of Representatives and in the Electoral College.

A significant under-count in the 2020 Census would undermine the commitment of our democracy to treat each resident fairly. The Trump administration and the Republicans in Congress, by significantly under-funding the Census, by adding a question on citizenship, through their anti-immigrant actions and rhetoric, and by refusing to use more accurate statistical techniques, seem to be working hard to under-count hard-to-reach populations. Not surprisingly, these low-income, minority, young, and student populations are the same ones they are trying to keep from voting through ID requirements and other steps that make voting more difficult. They appear to be more than happy to undermine the 2020 Census and our democracy to achieve political goals.

The Census has an extraordinary reputation for counting all residents regardless of income, race, ethnicity, or immigrant status. Undermining confidence in the integrity of the Census by politicizing the process will erode trust that is essential to a functioning democracy. [6]

I urge you to contact your members of Congress and urge them to support adequate funding for the Census, to oppose a question on citizenship, and to strongly advocate for as accurate a count of all residents as is possible. You can find your US Representative’s name and contact information at: http://www.house.gov/representatives/find/. You can find your US Senators’ names and contact information at: http://www.senate.gov/general/contact_information/senators_cfm.cfm.

[1]      Berman, A., May/June 2018, “Hidden figures: How Donald Trump is rigging the Census,” Mother Jones (https://www.motherjones.com/politics/2018/03/donald-trump-rigging-2020-census-undercounting-minorities-1/#)

[2]      Economic Policy Institute, 4/2/18, “An open letter from 51 economists to Congress urging robust funding of the 2020 Census” (https://www.epi.org/publication/an-open-letter-from-51-economists-to-congress-urging-robust-funding-of-the-2020-census/)

[3]      Loth, R., 4/9/18, “Turning the apolitical Census into an anti-immigrant tool,” The Boston Globe

[4]      Cerbin, C. M., 3/27/18, “Citizenship question to be put back on the 2020 Census for first time in 70 years,” USA Today

[5]      Kamp, J., & Adamy, J., 4/13/18, “Citizenship question rankles in trial run of 2020 Census,” Wall Street Journal

[6]      Wines, M., 12/9/17, “With 2020 Census looming, worries about fairness and accuracy,” The New York Times

CRUELTY BY ICE

The Immigration and Customs Enforcement (ICE) agency’s practice of detaining and often deporting undocumented immigrants who are leading up-standing, productive lives and have no criminal record is disturbing. However, even more disturbing is ICE’s practice of separating law abiding – and in some cases asylum-seeking – parents from their children, including quite young children.

In one case, four months ago, a mother and her seven-year-old daughter from the Congo, fleeing threats to their safety, crossed the U.S.-Mexico border near San Diego and asked for asylum. Four days later, the mother was in a Southern California detention center, while her seven-year-old daughter was sent, without explanation, to a children’s detention center in Chicago. The government has filed no charges against them, nor alleged that they pose any kind of threat, nor contended that the mother was in any way unfit to take care of her young daughter. They have been permitted only infrequent phone calls and the girl is reported to have sobbed throughout each of the calls.

In another case, a Brazilian woman with a 14-year-old son sought asylum back in August. She was detained in Texas while her son was taken to a detention center in Chicago. In a third example, in November, a 30-year-old El Salvadoran arrived at the U.S. border with his infant son and asked for asylum. After a short detention, ICE officials took the 1-year-old son away from his father. The father remained in detention and for weeks he had no idea where his son had been taken. His son was subsequently released to the mother, while the father remained in custody. [1] This practice is not only inhumane, it violates US and international laws on the treatment of asylum-seekers.

The ACLU has filed a class-action lawsuit to compel ICE to reunite hundreds of parents and children, and to enjoin it from continuing the practice of separating children and parents. [2] No formal policy of separating parents from their children has been announced. However, administration officials have said that efforts are made to deter people from trying to enter the US and that one strategy is to separate children from their parents.

A complaint against the practice of separating children from parents has been filed with the Department of Homeland Security’s Inspector General. [3] Separating children from their parents when there are no allegations of abuse or neglect or of parent criminality is cruel and unusual punishment. It is also traumatizing for children, especially young children, in the best of situations – and these are often families fleeing violence in their home countries, which is likely to have traumatized children already. Further traumatizing these children by separating them from their parents will probably harm these children – and perhaps their parents – for life with symptoms akin to post-traumatic stress disorder. To intentionally do this to any child is unthinkable; it is truly an affront to basic humanity.

Perhaps not quite as horrible, but nonetheless inhumane, is the detention, and deportation in some cases, of undocumented parents who are here in the US pursuing legalization, who have no criminal record, and who are long-time, productive members of their communities. For example, in January, a Providence mother of a 2-year-old and a 4-year-old was detained when she met with immigration officials to pursue permanent resident status because she is married to a US citizen – the father of her two children. Totally without warning, she was detained for nearly a month. This 30-year-old mother has been in the US since she was brought here by her parents when she was 3 years old. [4]

In the last year, at least 14 immigrants in Massachusetts, Connecticut, and Rhode Island, who had applied for permanent residency, i.e., they were playing by the rules and were doing the right thing, have been detained. They are typically detained when they come to ICE for a scheduled appointment to pursue their residency application. Many are married to US citizens, which has traditionally been a common, straight-forward path to being granted permanent resident status. Arresting undocumented immigrants who are working with authorities on obtaining legal status is a new and aggressive tactic by ICE.

We must stop ICE’s inhumane separation of children from their parents. This practice traumatizes these children and has no humane rationale. Please sign this petition to the Secretary of Homeland Security, Kirstjen Nielsen, and ask her to stop ICE’s practice of separating children and parents: https://action.momsrising.org/sign/Separating_Children_from_Mothers_at_the_Border_Inhumane/?akid=10559.2198800.aG1I1P&t=19

I also urge you to call, email, and / or write your federal elected officials and ask them to do everything they can to stop ICE’s inhumane practice of separating children from their parents. You can find your US Representative’s name and contact information at: http://www.house.gov/representatives/find/. You can find your US Senators’ names and contact information at: http://www.senate.gov/general/contact_information/senators_cfm.cfm.

[1]      Harris, L.M., 12/21/17, “Our government must stop separating asylum-seeking families,” USA Today

[2]      Merchant, N., 3/10/18, “ACLU files suit over family breakups,” The Boston Globe from the Associated Press

[3]      LA Times Editorial Board, 3/5/18, “Separating children and parents at the border is cruel and unnecessary,” The LA Times

[4]      Cramer, M., 3/12/18, “Detained and bewildered,” The Boston Globe

GUN VIOLENCE PREVENTION POLICY CHANGES NOW!

In the wake of the tragic gun violence at a high school in Florida, surviving students have inspired the nation with their commitment to reduce gun violence in the US. They and many others are pushing states and the federal government to enact laws that will reduce gun violence. (See my previous post for ways to support this movement.)

Here are examples of policy changes that we should make at the state and federal levels to reduce gun violence. If you have any doubts about whether these policies would make a difference, please see the data on the results of the ban on semi-automatic weapons that Australia instituted after a mass shooting there in 1996 that are in this previous blog post. (Those statistics are from 2013 and I’m sure they would present an even more dramatic contrast today.)

  • Ban the sale of semi-automatic weapons. There was a federal ban on these weapons from 1994 to 2004, but Congress let it expire and has refused to re-enact it. Eight states have bans on semi-automatic weapons. At the very least, we should raise the age for purchasing a semi-automatic weapon from 18 to 21, which is the current requirement under federal law for the purchase of a handgun.
  • Ban the sale of high capacity magazines that often hold 30 bullets. Six or ten bullets are plenty for any reasonable civilian use. Again, at the very least, we should raise the age for purchasing a high capacity magazine from 18 to 21.
  • Institute a waiting period for the purchase of any gun. Florida, like many states, has a three-day waiting period (sometimes referred to as a cooling off period) for the purchase of a handgun but not for a semi-automatic weapon.
  • Institute a strong, effective background check requirement for ALL gun purchases.
  • Limit the number of guns and amount of ammunition an individual can buy in a given time period, such as a week or a month. At a minimum, require gun sellers to report to law enforcement any sales of multiple guns or large amounts of ammunition to a single buyer within a five-day (or longer) period. This is currently required for handguns but not for semi-automatic weapons or ammunition.
  • Enact Extreme Risk Protection Order (ERPO) laws that allow family members to petition a judge for an order to confiscate an individual’s firearms when it is determined that the individual’s access to a gun poses an extreme risk to him or herself or others.
  • Enact reasonable requirements for obtaining a gun, such as a license and training. We require a license and training to drive a car; there’s no reason we shouldn’t for the owning of a gun. Furthermore, we could require gun owners to have insurance, as we do car owners, to protect themselves and others from injuries, deaths, or property damage that occur due to gun usage.
  • Require gun owners to report to law enforcement the loss or theft of a gun.
  • Any gun or ammunition seller who violates the law and allows an individual to obtain a gun or ammunition illegally should be treated as an accomplice under criminal and civil law to murder or any other crimes committed with the gun or ammunition.

Gun violence, and the deaths and injuries that result, is a public health epidemic in the US. Keeping guns from killing our children and others at the rate of 30,000 deaths a year is ultimately about the right to life. This is not about balancing gun rights with other rights; it’s about keeping our children, our teachers, and everyone else safe and alive.

Clearly, all these policy changes aren’t going to happen quickly or all at once. But we must start taking meaningful steps to reduce gun violence.

I urge you to call, email, and / or write your federal and state elected officials and demand reasonable gun laws that will prevent future gun massacres. We must insist that our elected officials pass sensible gun violence prevention laws or, if they won’t, we must elect other candidates at the state and national level who will. You can find your US Representative’s name and contact information at: http://www.house.gov/representatives/find/. You can find your US Senators’ names and contact information at: http://www.senate.gov/general/contact_information/senators_cfm.cfm.

I also encourage you to participate in on-line or local actions to express your support for the students from Parkland and the movement they have inspired, as well as for common-sense gun violence prevention laws. It’s past time to take serious steps to reduce gun deaths and violence, as well as hopefully, eventually, to eliminate the occurrence of gun massacres – as Australia successfully did in 1996.

GUN VIOLENCE PREVENTION NOW!

In the wake of the latest gun violence tragedy, surviving students from the high school in Florida where the incident occurred have inspired the nation with their commitment to reduce gun violence in the US. Here are four things we can all do to work to achieve that goal:

  • Support the students from Marjory Stoneman Douglas High School in Parkland, FL, and others who join their movement to change laws in states and federally on access to guns, particularly semi-automatic weapons and magazines with dozens of bullets.
  • Support organizations that are fighting to reduce gun violence.
  • Know how to refute the arguments of the National Rifle Association (NRA) and others that are opposing efforts to reduce gun violence.
  • Know what meaningful policy changes should and need to be made to reduce gun violence.

If you’d like some inspiration to act, please watch this short video of the new anthem for gun control written and performed by Stoneman Douglas High School students in response to the shooting at their school: https://www.facebook.com/justicechoir/videos/1677544419005142/.

Ways to support these students and the movement they have inspired are evolving, but here are three actions you can participate in or support in other ways:

  • Women’s March Youth EMPOWER is calling for students, teachers, school administrators, parents, and allies to take part in a #NationalSchoolWalkout for 17 minutes at 10 am on Wednesday, March 14, to protest inaction on gun violence prevention. More information is at: https://www.actionnetwork.org/event_campaigns/enough-national-school-walkout
  • Students from Stoneman Douglas High School are calling for people to join them on Saturday, March 24, in Washington, DC, and cities across the country for the March for Our Lives to demand legislation to stop gun violence. More information is at: https://www.marchforourlives.com/
  • Public rallies will be held nationwide on Friday, April 20, as part of a National Day of Action to Prevent Gun Violence in Schools. More information is at: https://networkforpubliceducation.org/national-day-action/

There are a number of organizations that you can join or support with contributions or volunteer activities that are on the front lines in working to prevent gun violence. Here are three major ones:

The NRA and others who oppose meaningful steps to reduce gun violence have crafted their arguments and media strategy over many years. Here are some responses to their arguments:

  • No civilian needs to have or should be allowed to have a semi-automatic weapon or a magazine with more than 6 bullets. Semi-automatic weapons are military weapons that are designed to kill human beings and to kill as many as possible as quickly as possible. There is absolutely no need for anyone other than law enforcement and military personnel to have one.
  • Some people will kill other people. But guns mean those people will kill many more people. And semi-automatic weapons and magazines that hold dozens of bullets mean they can kill LOTS of people very quickly.
  • Mental illness is NOT the issue; guns are. Every country has individuals with mental illness, but no other country has anywhere near the level of gun violence that we have in the US because no other country allows the level of civilian gun ownership that the US does. The great majority of people who experience mental illness – and there are many who experience some mental illness at some point in their lives – are not violent. Moreover, a violent person without a gun can do very limited harm. (See the bullet above.) By the way, the Republicans in Congress and President Trump in the budget he presented just days ago significantly cut federal spending to address mental illness. Furthermore, by reducing access to health care by cutting Medicaid and the Affordable Care Act, fewer people will have access to mental health services.
  • The Second Amendment to the US Constitution states: “a well regulated Militia, being necessary to the security of a free State, the right of the people to keep and bear Arms, shall not be infringed.” Beginning in the 1970s, the gun manufacturers, along with the NRA, undertook an extensive campaign to get activist judges to interpret the Second Amendment as giving civilian individuals the “right” to possess guns. The goal was to allow the gun industry to sell more guns and ammunition and, therefore, to make much bigger profits. Keep in mind that at the time the amendment was written, the arms referred to were muzzle loading weapons that took many seconds to reload, not weapons that fired multiple bullets per second. This individual “right” to have a gun represented a major change in interpretation of the Second Amendment, which for the first 200 years of this country’s existence was understood to apply only to arms for military purposes. Furthermore, until this re-interpretation, the power of state and local governments to regulate gun ownership had NOT been viewed as limited whatsoever by the Second Amendment. [1] The efforts to change the interpretation of the Second Amendment were so successful that by 1991 retired US Supreme Court Chief Justice Warren Burger stated that the Second Amendment “has been the subject of one of the greatest pieces of fraud, I repeat the word ‘fraud,’ on the American public by special interest groups that I have ever seen in my lifetime.”
  • Every serious piece of research on the presence of a gun in a home or elsewhere has found that the presence of a gun increases the chance of death or injury from gun usage. Having a gun does not make you safer, it makes it more likely that you, a family member, or someone else will be injured or killed by gun violence, accidental or intentional. (Some statistics on this are in my earlier blog post here.) (In response to this research, the gun industry and the NRA got a federal law passed that effectively bans federal agencies from doing or funding research on gun violence.)

I urge you to support the emerging movement to reduce gun violence through common-sense guns laws. Please participate in or provide financial or other support to one (or more) of the events and organizations listed above. In my next post, I’ll list some of the common-sense policies that should be enacted and would reduce gun violence.

[1]      Stevens, J.P., 4/11/14, “The five extra words that can fix the Second Amendment,” The Washington Post (The author, John Paul Stevens, was a judge on the US Supreme Court from 1975 to 2010.)

 

CORPORATE MEDIA THREATEN OUR DEMOCRACY Part 2

Senator Bernie Sanders’ book, Our Revolution: A Future to Believe In  [1] includes a chapter titled, Corporate Media and the Threat to Our Democracy. I summarized its information on the six huge media corporations that control 90% of what we see, hear, and read in my previous post.

Senator Sanders experienced firsthand the control and power the six huge media corporations have when he ran for President. Certainly initially, and probably throughout the whole campaign, his candidacy received less coverage than other candidates. Perhaps this was because many of the issues he raised and discussed were ones that made corporate executives uncomfortable. Senator Sanders summarized his experience as follows: “as a general rule of thumb, the more important an issue is to large numbers of working people, the less interesting it is to the corporate media. … Further, issues being pushed by the top 1 percent get a lot of attention.” (page 421)

As an example, Sanders cites the coverage of the assertion that Social Security’s benefits needed to be cut because, supposedly, money to pay them would soon run out. The financial challenges facing Social Security were exaggerated and solutions other than cutting benefits were largely ignored by the corporate media. Sanders and others organized a broad coalition in opposition to Social Security cuts that included AARP and virtually every other seniors’ organization in the country, the American Legion and every major veterans’ group, the AFL-CIO representing 13 million workers, the largest organizations in the country representing people with disabilities, the National Organization of Women (NOW), and others.

A press conference opposing cuts to Social Security benefits was held by this broad coalition, which represented tens of millions of Americans, along with U.S. Senators and Representatives. It received almost no coverage from the corporate media. Similarly, throughout the presidential campaign, many issues that Sanders raised got little to no coverage from the big media corporations, including economic inequality, poverty, Native American issues, the housing crisis, climate change, fracking, and a single-payer health care system. On the other hand, the topics of how much money each candidate had raised, when Sanders was going to formally announce his candidacy, and when he was going to drop out and endorse Clinton received lots of attention from the corporate media.

The corporate media view politics and elections as entertainment and a way to capture attention (and therefore revenue). They do not take responsibility for helping to build an informed American electorate. They are large corporations whose goal is to make as much money as they can for their shareholders and executives.

These media corporations rely on billions of dollars in advertising from the pharmaceutical, auto, financial, health insurance, and fossil fuel industries (among others). This advertising revenue presents conflicts of interest for the media corporations’ executives’ decisions on the reporting of news. Viewers and readers would be naïve to think that news coverage – or lack of coverage – is not influenced by the interests of large advertisers.

The media corporations have a perspective on what is important and worthy of coverage, and what is not. Few of the journalists who work for them cross the boundaries of the corporate perspective. As Senator Sanders writes:

“Over the course of my political life [roughly 45 years] I cannot recall a mainstream journalist coming up to me and asking what I was going to do to end the scourge of poverty in this country, or how I was going to combat the disgraceful level of income and wealth inequality, or what role I would play in ending the influence of big money in politics. Those, and many similar issues, are just not what the corporate media considers important. And my strong guess is that if by mistake, or in some state of confusion, a reporter for the corporate media started asking those types of questions, he or she would not last long with the company.” (page 436)

Concentrated, corporate ownership of the media limits the points of view and the information Americans receive. It limits cross-cultural and cross-class awareness and knowledge. It tends to break us into factions rather than building community in our diverse country. This is not good for democracy.

Furthermore, mergers are in various stages of consideration that could reduce the six corporate media giants to only three. Therefore, media concentration is likely to increase further in the near future, unless we and regulatory government agencies take a stand against it.

Meanwhile, the Federal Communications Commission (FCC) has eliminated net neutrality, which gives more market place power to the big media corporations through their control of Internet access.

I encourage you to take action to stop mergers among the giant media corporations and to work to ensure net neutrality. If you want more information about these issues, including how you can take action on them, go to freepress.net. There, you can join with hundreds of thousands of other engaged Americans to fight to save the free and open internet, curb runaway media consolidation, protect press freedom, and ensure diverse voices are represented in our media.

You can also review my earlier post, Our failing mainstream media, that encourages the support of not-for-profit, public or consumer-funded media as a better model for a democracy than the current giant, for-profit, advertising-funded corporations. It identifies six broadcast, on-line, and print media outlets you can patronize and support as good sources of information and good alternatives to the corporate media.

[1]      Sanders, B., 2016, Our Revolution: A Future to Believe In. St. Martin’s Press, NY, NY.

THE GREED OF THE PHARMACEUTICAL INDUSTRY Part 2

The pharmaceutical industry can engage in the unethical and sometimes illegal practices that I’ve highlighted in previous posts [1] because they have:

  • Monopolistic power in the market place due to limited competition,
  • An absence of government regulation, and
  • Political power to block or weaken regulation and oversight due to campaign spending, lobbying, and the revolving door of personnel moving between these corporations and government regulatory positions.

The result is that the greed of the executives of these corporations is unconstrained by market place competition, government regulations, their ethics, or, in some cases, even legality. The examples presented in my previous posts have not been isolated incidents or past bad behavior that has been rectified. This behavior by the pharmaceutical corporations is an on-going pattern.

A 2010 study found that the U.S. prices of prescription drugs were, on average, double what those same drugs cost in Canada, Australia, and the United Kingdom. And things have only gotten worse since then. As a result, one out of five Americans was unable to afford medicines prescribed by their doctors, while the five largest drug corporations had profits of a combined $50 billion in 2015. As Bernie Sanders wrote, “people go to the doctor because they are sick, they get a diagnosis from their doctor, but they can’t afford the treatment. Then they get sicker. Does this make any sense to anyone?” [2]

As part of their price gouging strategies, drug companies will go to great lengths to block competition. For example, Allergan corporation has transferred six drug patents to the St. Regis Mohawk Indian tribe. Because the tribe is a sovereign entity, it is immune from a type of challenge to drug patents that low-cost generic drug makers sometimes use to get the right to produce a generic version of a drug. It is expected that this will become a popular strategy to delay the availability of cheaper, generic versions of drugs, unless Congress intervenes and changes the law. Allergan will pay the tribe only $15 million a year under the deal for the right to continue to sell the drugs, which had $1.4 billion in sales last year.

For a different drug, Allergan tried to avoid competition from a generic version by pulling the drug from the market and forcing patients to buy a new, more expensive version. This move was blocked by a federal appeals court. By the way, Allergan has also moved its headquarters to Ireland to avoid U.S. taxes. [3]

There is no reason to believe that the behavior of pharmaceutical corporations is going to change on its own. Clearly, the free market and competition are not going to stop it. Public outrage, negative publicity, and criticism from elected officials may blunt the worst of the behavior, but it will not stop it.

The behavior of the pharmaceutical industry (which is evident in other industries like the financial industry as well) is not the way the economy should work in a democracy. This behavior is that of a corporatocracy, where large corporations are in control of both our (supposedly free) market place and our (supposedly democratic) government.

Only strong legislation from Congress and strong leadership from regulatory agencies in the executive branch of government will stop these harmful and greedy business practices of the pharmaceutical corporations (and other large corporations). The opioid crisis and the fueling of it by illegal and irresponsible marketing of narcotic prescription drugs has made this absolutely clear.

I urge you to contact your U.S. Representative and Senators and ask them to:

  • Support strong legislation to regulate the pharmaceutical industry,
  • Only confirm executive branch appointees (include the Secretary of Health and Human Services) who have a clear track record of supporting strong regulation of the drug corporations, including their drug pricing and marketing of narcotics, and
  • Pass legislation that not only allows, but requires, Medicare and insurance companies participating in the Affordable Care Act to negotiate drug prices with suppliers to receive the best price based on what other countries pay. A good place to start would be to ask them if they support the Medicare Drug Price Negotiation Act of 2017, which would allow the government to negotiate directly with drug companies to lower drug prices for Medicare beneficiaries, much like the Veterans Health Administration and Medicaid do today.

As we approach the Congressional and state level elections of 2018, I encourage you to scrutinize and ask about candidates’ positions on these issues. Then we can elect candidates who support strong regulation of drug corporations, who will take meaningful steps to control drug prices, and who will seriously tackle the opioid crisis and the pharmaceutical industry practices that have led to it.

 

[1]      You can go to any of the blog posts on my site and click on the categories in the right hand column to find other posts on corporate behavior or corporate power and influence to read more about unethical and illegal practices by large corporations.

[2]      Sanders, B., 2016, “Our revolution: A future to believe in,” St. Martin’s Press, NY, NY. Page 327.

[3]      Silverman, E., 9/19/17, “This CEO’s latest move is raiding eyebrows,” The Boston Globe

PURDUE PHARMA AND OXYCONTIN CAUSED THE OPIOID EPIDEMIC Part 2

Purdue Pharma, a privately-owned corporation, and its narcotic pain-killer, OxyContin, caused the current opioid epidemic. My previous posts gave an overview of Purdue’s development and marketing of OxyContin, as well as of the complicity of Congress and the Executive Branch in allowing OxyContin to cause the national opioid epidemic.

This post describes Purdue’s efforts to conceal the harm that OxyContin is causing, while continuing to aggressively market – and profit – from it. The most detailed reporting of the role of Purdue and OxyContin in the opioid epidemic that I am aware of is the article that appeared in the October 30th issue of The New Yorker, “The family that built an empire of pain”. [1] This blog post is largely drawn from that article.

OxyContin is a large dose of oxycodone that can be taken all at once due to Purdue’s innovative time release formula, which means that the pain killer’s effect lasts for 12 hours (supposedly).

Purdue claimed that OxyContin’s time release formula made it virtually non-addicting and hard to abuse. However, ironically, the information sheet provided with it basically gave instructions on how to abuse it. The information sheet warned against crushing the pills and then ingesting them. Abusers quickly figured out that snorting the crushed pills gave a heroin-like high. The information sheet also warned against dissolving the OxyContin pills in liquids. Abusers quickly figured out how to dissolve the pills and inject the solution, which was just like shooting heroin.

Soon after OxyContin’s release, signs of abuse were evident in Maine and Appalachia. Purdue’s own sales data indicated that doctors were over-prescribing OxyContin and that some were engaged in writing large numbers of clearly fraudulent prescriptions. Evidence that patients were selling extra pills on the black market also surfaced.

Problems with the use of OxyContin as prescribed also quickly became evident. Some patients were displaying signs of addiction and withdrawal within the 12 hours between scheduled doses. Many patients were finding that the pain-killing effect didn’t last 12 hours, so they took the pills more often, which increased the likelihood of addiction. A 1999 study found that 13% of patients who used OxyContin for headaches became addicted.

Purdue said the concerns over addiction were overblown. It told sales reps to say that less than 1% of OxyContin patients became addicted. Purdue claimed that patients were not experiencing addiction and withdrawal symptoms, but were just feeling their underlying pain. It coined the term “pseudo addiction” to describe this supposed phenomenon. It claims there is no inherent problem with OxyContin, saying the problem is individuals who misuse it.

However, internal Purdue documents, which have emerged due to litigation, reveal that it knew, even before it got approval to market OxyContin, that not all patients achieved 12-hour pain relief and that more frequent use was a recipe for addiction. Purdue’s records show that in 1998 it was aware that taking OxyContin at 8-hour intervals was becoming more and more common. A Purdue employee called this “very scary.” It appeared that in some cases these more frequent doses were due to addiction and to keep the patient from going into withdrawal, rather than to treat pain.

In 2001, the Attorney General of Connecticut wrote to Purdue expressing his alarm over the growing abuse of OxyContin. Three years later, having received no response, he filed a lawsuit. In 2003, the Drug Enforcement Agency (DEA) found that Purdue’s aggressive marketing had “very much exacerbated OxyContin’s widespread abuse.” It concluded that Purdue had “deliberately minimized” the risks of OxyContin. The DEA sent Purdue a warning letter saying that its ads “grossly overstate the safety profile of OxyContin by not referring in the body of the advertisements to serious, potentially fatal risks”. Nonetheless, Purdue continued to aggressively market OxyContin and no government agency took steps to – or was allowed to – regulate its sale. (See my previous post for more detail on the lack of regulation.)

Purdue currently faces thousands of OxyContin-related lawsuits, including 10 from states and numerous ones from cities and counties. To-date, it has settled or pled guilty in the cases that have reached a conclusion. Many experts believe this is a strategy to avoid going to trial where it would have to disclose internal documents that would reveal very damaging information about what Purdue knew about the dangers and harm of OxyContin.

In 2006, Purdue paid $75 million to settle a case brought by 5,000 patients. In another case, it pled guilty to criminal misbranding and acknowledged marketing OxyContin “with intent to defraud or mislead.” Three senior officials pled guilty, but no one from the Sackler family that owns Purdue was punished. The 3 officials all got off with probation and fines totally $35 million. Purdue itself paid a $600 million fine.

The total of $700 million in fines and settlements to-date seems small and hardly a sufficient deterrent, let alone punishment, for Purdue’s blatantly irresponsible marketing and selling of OxyContin. It is only about 2% of the roughly $35 billion in revenue that Purdue has received from OxyContin. Furthermore, it is only about 1% of the $50 billion estimated cost of treatment for those with opioid addiction problems.

In 2010, Purdue reformulated its OxyContin pills, so they are harder to crush or dissolve and, therefore, to abuse. As a result, many of those who had become addicted to OxyContin have now turned to illegal drugs, such as heroin and fentanyl.

Many industry observers believe that an important motivation for the reformulation of OxyContin was not to make it safer, but to extend its patent, which would have run out in 2013. Purdue is now working to block sales of generic versions of the original OxyContin by claiming that they are unsafe.

Purdue continues to fight any restrictions on the prescribing of OxyContin, claiming that such steps would deny law-abiding patients needed pain medication. It has continued to spend heavily on lobbyists and campaign contributions to block enactment of restrictions by government regulators. And, taking a page from the tobacco industry, it is expanding its marketing of the original OxyContin overseas.

I urge you to contact your US Representative and Senators to ask them to support the regulation of prescriptions for opioid pain killers. The Centers for Disease Control (CDC) has introduced guidelines that would reduce the use of OxyContin and other opioid pain medicines. The guidelines state that “Opioids should not be considered first-line or routine therapy for chronic pain”. The guidelines recommend the use of non-drug pain treatment, such as physical therapy, and of non-opioid drugs as the first responses to pain.

Please urge your elected officials to support the implementation of the CDC guidelines on opioid pain killers and to fund opioid treatment, along with addiction prevention and education programs.

[1]      Keefe, P.R., 10/30/17, The family that built an empire of pain, The New Yorker (https://www.newyorker.com/magazine/2017/10/30/the-family-that-built-an-empire-of-pain)

THE OPIOID CRISIS: SAVING LIVES VS. SAVING PROFITS

President Trump pledged months ago to declare the nationwide opioid crisis a national emergency. He now says he’ll do so this week. The crisis has claimed well over 200,000 lives and the death rate continues to climb.

Declaring opioid deaths a national emergency would be nice, but taking effective action is even more important. So far, the Trump administration and key Republicans in Congress have shown no interest in doing so.

Trump recently nominated Representative Tom Marino, a Pennsylvania Republican, to be his national drug czar. Marino withdrew his name from consideration last week after it was revealed that he had spearheaded a successful effort in Congress to block the Drug Enforcement Agency’s (DEA) efforts to stop fraudulent distribution of prescription opioids. [1]

In April 2016, as the deadliest drug epidemic in US history raged, Congress passed a bill stripping the DEA of its ability to stop the distribution of large quantities of prescription narcotics. Drug industry experts blame the origins of the opioid crisis on the over-prescribing, some of it fraudulent, of narcotic pain killers. [2] The pharmaceutical corporations’ marketing of these drugs has also come in for blame, as they downplayed the potential for addiction to the drugs and promoted the supposed under-treatment of pain.

At the behest of the drug industry, Representative Marino in the House and Senator Hatch in the Senate (a Utah Republican) led the efforts by a handful of members of Congress to undermine DEA enforcement efforts aimed at blocking the supply of narcotic pain killers to corrupt doctors and pharmacists who were selling them on the black market. They passed a law making it impossible for the DEA to freeze suspicious shipments of narcotics by drug distributors who had repeatedly ignored DEA warnings while selling millions of pills for billions of dollars. Marino had spent years working to pass such a law.

The drug industry contributed at least $1.5 million to the campaigns of the 23 members of Congress who sponsored the bill and spent over $100 million lobbying Congress.

Besides the sponsors of the bill and the drug industry, few members of Congress or others outside of Congress knew of the impact the bill would have. It was passed in Congress by “unanimous consent,” an expedited process supposedly reserved for non-controversial bills. Former White House officials say they and President Obama were unaware of the bill’s impact when it was signed into law. Requests for interviews with current and former officials, as well as dozens of Freedom of Information (FOI) Requests, have been submitted to the DEA and the Justice Department by the media to try and find out who knew what when. The interview requests have been declined or ignored, and the FOI requests have been denied or delayed; some have been pending for 18 months. [3]

This is a powerful example of the incredible influence and control our large corporations have over policy making in Washington, D.C. The large pharmaceutical corporations and their distributors have gotten Congress to make their profits from illegally selling narcotic painkillers more important than the 60,000 deaths that are occurring each year from opioid use. These deaths are roughly twice the number that occur due to gun violence or car accidents. The number of deaths last year was roughly 50% more than occurred at the peak of the HIV/AIDS crisis. Drug overdoses have become the leading cause of death among those under 50. [4]

I urge you to contact your US Representative and Senators and ask them to take real action to fight the opioid crisis. This includes spending money on addiction treatment and drug enforcement. And it requires repealing the 2016 legislation that undermined the DEA’s efforts to control the distribution of prescription, narcotic pain killers. We must assert that people’s lives, as well as recovery from and avoidance of addiction, are more important than profits for large pharmaceutical corporations.

[1]      Superville, D., & Daly, M., 10/18/17, “Marino pulls name from US drug czar consideration,” The Boston Globe from the Associated Press

[2]      Higham, S., & Bernstein, L., 10/16/17, “Drug industry quashed effort by DEA to cut opioid supply,” The Boston Globe from The Washington Post

[3]      Higham, S., & Bernstein, L., 10/16/17, see above

[4]      Katz, J., 6/5/17, “Drug deaths in America are rising faster than ever,” The New York Times (https://www.nytimes.com/interactive/2017/06/05/upshot/opioid-epidemic-drug-overdose-deaths-are-rising-faster-than-ever.html)

PROTECTING CONSUMERS FROM WALL STREET

The collapse of the financial corporations in 2008 was due in large part to their predatory and illegal practices in pushing unaffordable home mortgages onto gullible home buyers. Congress and President Obama enacted the Dodd-Frank Wall Street Reform and Consumer Protection Act (known as Dodd-Frank) to help protect consumers from such abusive behavior.

Dodd-Frank’s most notable consumer protection provision was the creation of the Consumer Financial Protection Bureau (CFPB). The CFPB’s role is to protect consumers from illegal and predatory practices, as well as discrimination, by financial corporations and to work to ensure that consumers receive the information necessary to make good financial decisions and to avoid “unsafe” financial products and services.

Since its creation, the CFPB has been hard at work punishing financial corporations that violate the law, returning almost $12 billion to over 29 million victimized consumers. In less than 8 years, it has helped consumers by responding to over 1.2 million complaints and issuing, for example, new standards for home mortgage documents that are clearer and easier to understand. At CFPB’s website you can find information on understanding your credit score and to help you make a good decision about a car or student loan.

Given that financial products and services (such as bank accounts, credit cards, and car and student loans) are essential for individuals, families, and our economy, appropriate regulation of them is necessary. Before the creation of the CFPB, financial services regulation was spread among 6 federal agencies and state regulators. None of them had consumer protection as its sole or primary role nor had the power to establish a single set of regulations for the whole financial industry. The CFPB has this power and a sole focus on consumer protection, much as the Consumer Product Safety Commission does for non-financial products. [1]

In July, the CFPB finalized a rule prohibiting financial corporations from putting mandatory arbitration clauses in their customer contracts. These clauses, which are in most agreements consumers sign when they open a bank account or get a loan or credit card, prohibit customers from suing the financial corporation in court. (They are also in many contracts or agreements for other consumers products and services, such as cell phones and cable TV, Internet, and phone services.) They require the customer to submit any complaint, even one due to illegal activity, to an arbitrator, who is usually selected by the financial corporation. They eliminate the ability of customers to band together in a class action lawsuit, and require them to pursue any grievances only through individual arbitration cases.

In addition to preventing class action lawsuits, the mandatory arbitration clauses often prohibit customers from sharing their experiences with regulatory or law enforcement agencies and the media. Corporations know that consumers will rarely spend the time and money (the typical cost to file an arbitration claim is $161) to pursue arbitration, given that the amount of money at stake is usually small. The result is that corporations evade accountability and can hide illegal or unethical behavior. [2]

The CFPB rule banning mandatory arbitration clauses was put in place after 5 years of study and development pursuant to a Congressional directive to study mandatory arbitration clauses and restrict or ban them if they harm consumers. The CFPB study found that customers win only 1 out of 11 arbitration cases and when they win they receive an average of $5,389. However, when a financial corporation makes a claim or counterclaim against a customer, it wins 93% of the time and the customer is ordered to pay, on average, $7,725 to the financial corporation! [3]

The CFPB study also found that in an average year 6,800,000 consumers get cash awards due to class action lawsuits while only 16 do so in arbitration cases. Consumers in these lawsuits receive a total of $440,000,000 (after deducting lawyers’ and courts’ fees), while consumers across all arbitration cases receive a total of $86,216.

Three recent examples of practices by Wells Fargo & Company make clear the significance and importance of banning mandatory arbitration clauses and allowing class action lawsuits by customers. (By the way, Wells Fargo is the third largest US bank and a multi-national financial corporation headquartered in San Francisco with $22 billion in annual profits.) It recently paid $185 million to settle with the CFPB and other regulators for having illegally opened and charged customers for over 2 million unauthorized checking and credit card accounts. When customers tried to sue Wells Fargo for this starting back in 2013, it forced them to make their claims in individual arbitration cases. This allowed Wells Fargo to continue its illegal behavior and theft from customers for 3 more years (5 years in total) before its behavior came to the attention of regulators.

In July, another class action lawsuit was filed against Wells Fargo based on illegal behavior on car loans. Apparently, Wells Fargo was requiring customers with car loans to buy car insurance they didn’t need (it was typically redundant with insurance they already had). And Wells Fargo was getting kickbacks from the company selling the insurance. The extra cost of the unneeded insurance pushed 250,000 car loan customers into default on their loan payments and resulted in 25,000 cars being repossessed. If these customers are forced into arbitration and are unable to participate in a class action lawsuit, it’s likely that most of them will not receive any compensation from Wells Fargo for its illegal and harmful behavior.

Finally, Wells Fargo is the defendant in an on-going, 8-year-old case over overdraft fees and practices. It is arguing in court that these customers’ claims must be handled in individual arbitration cases rather than a class action lawsuit, despite complaints from customers in 49 states. [4]

Despite these examples, and the fact that Congress has banned mandatory arbitration in home mortgage agreements, members of Congress have quickly introduced legislation to repeal the Consumer Financial Protection Bureau’s new rule banning mandatory arbitration clauses in financial product and service agreements. [5] Weakening or eliminating the CFPB in general, not just its ban on mandatory arbitration, has been a goal of Wall St. corporations and their friends in Congress ever since its creation by the Dodd-Frank law.

I urge you to contact your US Representative and Senators and ask them to support the Consumer Financial Protection Bureau and its ban on mandatory arbitration clauses in consumer product and service agreements.

[1]      Servon, L.J., 7/17/17, “Will Trump kill the CFPB?” The American Prospect (http://prospect.org/article/will-trump-kill-cfpb)

[2]      Germanos, A., 7/12/17, “Serving Wall Street predators, GOP launches swift attack on new rule protecting consumers,” Common Dreams (https://www.commondreams.org/news/2017/07/12/serving-wall-street-predators-gop-launches-swift-attack-new-rule-protecting)

[3]      Shierholz, H., 8/1/17, “Correcting the record: Consumers fare better under class actions than arbitration,” Economic Policy Institute (http://www.epi.org/publication/correcting-the-record-consumers-fare-better-under-class-actions-than-arbitration/)

[4]      Brumback, K., 8/25/17, “Wells Fargo wants customer suits tossed,” The Boston Globe from the Associated Press

[5]      Germanos, A., 7/12/17, “Serving Wall Street predators, GOP launches swift attack on new rule protecting consumers,” Common Dreams (https://www.commondreams.org/news/2017/07/12/serving-wall-street-predators-gop-launches-swift-attack-new-rule-protecting)

PROTECTING OUR ECONOMY FROM WALL STREET SPECULATION

After the collapse of the financial corporations in 2008 due to their greed, predatory and illegal practices, and malfeasance, Congress and the President enacted legislation to try to prevent such a collapse in the future. This was the Dodd-Frank Wall Street Reform and Consumer Protection Act (known as Dodd-Frank).

The Dodd-Frank law is not as strong as many people thought it should be, because Wall St. executives, along with their lobbyists and friends in Congress, worked hard to weaken it as it was being written and passed. For example, it did not break up the “too-big-too-fail” financial corporations or limit their growth. (They are now all bigger than they were in 2008.)

A key provision of Dodd-Frank, known as the Volcker Rule, restricts banks from making certain kinds of speculative investments that do not benefit their customers and actually put customers’ deposits (and the banks and the economy) at risk if large investment losses result. Such speculative investments and big losses from them played a key role in causing the 2008 financial collapse. The Volcker Rule restricts but does not ban such investments, as many people thought it should and as had been the case from 1933 to 1999 under the Glass-Steagall Act. [1] In particular, many people believe that banks with deposits insured by the Federal Deposit Insurance Corporation (FDIC) should be prohibited from making such risky investments because these investments, which only benefit the bank’s executives and shareholders, are, in effect, insured against big losses by the FDIC, i.e., the federal government and taxpayers.

The Volcker Rule was supposed to be implemented in 2010, but continuing opposition from Wall St. and its supporters has continued to delay (and further weaken) the rule. It finally went into effect in 2015, but banks continue to be granted extensions for when they have to come into compliance with its provisions.

The Trump Administration, through the five agencies that regulate the financial industry, is currently working to rewrite and further weaken the Volcker Rule. They are moving to loosen the restrictions on risky investments, even though they were a major cause of the 2008 financial collapse. [2]

The Dodd-Frank law in general, not just its Volcker Rule, has been a target for weakening and delaying tactics ever since its original drafting and passage, as well as at every step in its implementation. The US House recently passed the so-called Financial Choice Act that would significantly weaken Dodd-Frank’s regulation of the financial industry.

I urge you to contact your US Representative and Senators and ask them to:

  • Oppose efforts to weaken the Volcker Rule and to support an outright ban on speculative investment activity by banks that have customer deposits and FDIC insurance, and
  • Oppose efforts to weaken the Dodd-Frank law in general and its regulations that reduce the likelihood of another financial industry collapse.

[1]      Wikipedia, retrieved 8/15/17, “Volcker Rule,” (https://en.wikipedia.org/wiki/Volcker_Rule)

[2]      Bain, B., & Hamilton, J., 8/1/17, “Wall Street regulators are set to rewrite the Volcker Rule,” Bloomberg News (https://www.bloomberg.com/news/articles/2017-08-01/volcker-rewrite-is-said-to-start-as-trump-regulators-grab-reins)

THE CASE FOR SINGLE-PAYER HEALTH INSURANCE

Our private health insurance system is not working. As I outlined in my previous post, there are three core problems with our private health insurance system:

  • By fragmenting the pool of insured people and allowing some to opt out, the basic theory and efficiency of insurance is undermined.
  • Private insurers have no financial incentive to maintain the long-term health of their customers because customers change insurers frequently.
  • Private insurers spend a large portion of their health insurance premiums on overhead, i.e., non-medical expenses (roughly 25%, which adds up to hundreds of billions of dollars each year).

An alternative that would address these major problems with the U.S. health insurance system is a Medicare-for-All, single-payer system. This type of a system is supported by a growing majority of Americans (62%), most Democrats in Congress, many doctors, and a growing number of public figures, such as former President Jimmy Carter [1] and former Vice President Al Gore. [2] Physicians for a National Health Program is one of a number of groups advocating for a single-payer system. An interview with its President, Dr. Carol Paris, on why the group supports single-payer health insurance is here. (She joins the newscast at 17 minutes 25 seconds into this 28-minute segment. The link starts 14.5 minutes into the newscast, when the topic turns to health care.)

A universal, single-payer system provides the most efficient health insurance for multiple reasons. First, it maintains a single, large pool of insurees who have differentiated risks and health care needs. A large, differentiated pool of insurees is what the basic theory and efficiency of insurance is predicated on.

Second, a single-payer insurance system has people as customers for life, thereby providing a strong incentive to invest in preventive care and the long-term health of its customers. A focus on preventive care and wellness produces the best health outcomes and does so at the lowest cost.

Third, switching to a single-payer, Medicare-for-All type health insurance system would save about $500 billion per year by eliminating the administrative overhead of our health insurance corporations. [3] In addition, health care providers would have only one set of forms, procedures, and paperwork to deal with, greatly simplifying the processing of billing the insurer for their services and reducing their costs and frustrations in doing so. [4]

A single-payer system is the only way to both improve quality and control costs, as Don Berwick (a doctor and former head of the Centers for Medicare and Medicaid Services (CMS), the federal agency that oversees those public health insurance programs) has stated. An example he cites to illustrate this point is an action he took when he was the head of CMS. Data was showing that senior care facilities were using drugs to sedate patients whose behavior was challenging at times, rather than taking the time and energy to handle their behavior more appropriately. Given that Medicare and Medicaid pay for much of the care these facilities provide, he had the leverage to tell the facilities’ managers that they should address this problem or that he would develop regulations to deal with it. The result was that the facility managers reduced drug use and costs, and also provided better care to their patients. Berwick could do this because he had leverage as the primary payer (although not quite the only or single payer) for these services. [5]

Bills have been introduced in Congress to create a single-payer, Medicare-for-All health insurance system. Over half of the Democrats in the House, over 100 Representatives, have endorsed H.R. 676, The Expanded and Improved Medicare for All Act, sponsored by Rep. Conyers. Senator Bernie Sanders will introduce a similar bill in the Senate.

I don’t understand why Democrats in Congress haven’t been making more of a push for a single-payer health insurance as an alternative to the Affordable Care Act repeal-and-replace legislation that the Republicans have been promoting. [6] I am disappointed that our mainstream, corporate media haven’t provided more coverage of this as an option, although at some level I’m not surprised as it would make significant changes for the health insurers and drug companies that provide them significant advertising income. [7]

I urge you to contact your US Representative and Senators to ask them to support a single-payer, Medicare-for-All health insurance system. Every other economically advanced country has a universal, single-payer health service system that covers everyone at far lower costs than our current privatized system and produces better health outcomes with longer lifespans. [8]

There has been a concerted effort in the U.S. to discredit other countries’ universal, single-payer health care systems, particularly Canada’s, often with inaccurate information. An excerpt from a recent Congressional hearing where a Canadian doctor very effectively rebuts attacks on the Canadian health care system can be viewed here. (It’s just under 7 minutes.) Or you can watch or listen to a Canadian businessman rebut attacks on the Canadian health care system here (a short, less than 3-minute YouTube video).

I encourage you to engage, however you can, in the movement to make universal, single-payer health insurance a reality in the U.S. We need to pressure our elected officials to adopt this solution to our failing health insurance system. If you need further convincing that this is the way we need to go, please watch or listen to the interview with Dr. Carol Paris referenced above. (She joins the newscast at 17 minutes 25 seconds into this 28-minute segment. The link starts 14.5 minutes into the newscast, when the topic turns to health care.)

[1]    Nichols, J., 7/27/17, “Jimmy Carter calls for single payer,” The Nation (https://www.thenation.com/article/jimmy-carter-calls-for-single-payer/)

[2]      Johnson, J., 7/21/17, “Message to Democrats: Get on board with Medicare for All or go home,” Common Dreams (https://www.commondreams.org/news/2017/07/21/message-democrats-get-board-medicare-all-or-go-home)

[3]      Goodman, A., & Moynihan, D., 6/30/17, “Medicare for All: It’s a matter of life and death,” Common Dreams (https://www.commondreams.org/views/2017/06/30/medicare-all-its-matter-life-and-death)

[4]      Ready, T., 9/20/16, “Donald Berwick calls for ‘moral’ approach to healthcare,” Health Leaders Media (http://www.healthleadersmedia.com/quality/qa-donald-berwick-calls-moral-approach-healthcare) See in particular page 2 of the article.

[5]      Ready, T., 9/20/16, see above. See in particular page 3 of the article.

[6]      Cho, J., 6/30/17, “The cynical opposition of some Democrats to universal health care,” Common Dreams (https://www.commondreams.org/views/2017/06/30/cynical-opposition-some-democrats-universal-health-care)

[7]      Goodman, A., & Moynihan, D., 6/30/17, see above

[8]      Cho, J., 6/30/17, see above

GENERATING THE REVENUE NEEDED TO INVEST IN AMERICA

The People’s Budget, an alternative budget for the US, presents a coherent vision and a detailed plan for generating the revenue needed to invest in America’s infrastructure and people. It includes specific proposals for increasing revenue, decreasing tax expenditures (i.e., loopholes and deductions), and increasing efficiency in the public and private sectors. These will more than pay for its spending proposals (which I summarized in my previous post). [1]

Current tax policy is failing in multiple ways. Tax cuts and tax avoidance have reduced government revenue so that it is insufficient to pay for needed spending. Tax policy changes over the last 35 years have exacerbated economic inequality and created complexity that favors politically powerful special interests and those who can afford sophisticated tax accountants and lawyers. The theoretical progressivity of income taxes has been lost through tax cuts, tax deductions, tax avoidance, and favored tax rates and loopholes for high-income individuals.

The People’s Budget addresses the inequities in our tax system through changes in individual and corporate tax laws. Income taxes on the richest individuals would be increased. The tax on income from investments would be raised so it is at the same rate as income earned from working. The People’s Budget also would reduce tax deductions that favor the wealthy, such as interest deductions for mortgages on vacation homes and yachts. It maintains a tax on estates worth over $3.5 million, which current proposals would eliminate. It would also reduce income inequality by increasing tax deductions for low-income families. [2]

Inefficient corporate tax loopholes would be eliminated. Corporate tax benefits from moving jobs, profits, and a corporation’s legal home overseas would be ended. The People’s Budget would ensure that corporations pay their fair share of taxes and that large, multi-national corporations do not enjoy more favorable tax treatment than small, US-based companies. Current tax loopholes make it hard for small businesses to compete with large multi-national corporations.

A small tax would be placed on financial transactions. This is essentially a small sales tax on the buying and selling of financial products, like (but at a much lower rate than) the sales taxes many of us pay on non-financial products we buy. In addition to generating hundreds of millions of dollars in annual revenue, it would also discourage quick turnaround, high-volume, speculative trading of securities that can destabilize markets and that provide no benefit to our economy.

The People’s Budget would close tax loopholes and end subsidies for fossil fuel corporations, while putting a price on carbon pollution. This would end the unjustifiable public subsidies of fossil fuel extraction and use, requiring those burning carbon fuels to pay the true costs of doing so. In addition, the People’s Budget would invest in energy efficiency and clean, renewable energy production.

Income and wealth inequality would be reduced by the tax reforms in the People’s Budget, as well as by its spending proposals, which were summarized in my previous post. The Economic Policy Institute’s (EPI) analysis of the People’s Budget concludes that it “would have significant positive impacts, including improving the economic well-being of low- and middle-class families, … and increasing tax progressivity and adequacy while reducing the deficit in the medium term.” [3]

The People’s Budget would reduce the federal government’s projected debt level by trillions of dollars over the next 10 years. This makes it clear that we can afford investments in our human and physical capital if we reform our individual and corporate tax systems. Furthermore, we can simultaneously reduce income and wealth inequality.

I believe that candidates and the party(ies) who fully embrace the vision and goals of the People’s Budget will find that the American public and voters will strongly support them. Senator Bernie Sanders’ presidential campaign was built on a very similar vision and received tremendous grassroots support. Although President Trump’s rhetoric supported elements of the People’s Budget and many people voted for him believing or hoping that he would bring this kind of change in direction to Washington, his actions to-date have not reflected the vision or goals of the People’s Budget. The Republican Party appears to have a totally different vision for America – one where the rich and large corporations do very well and where everyone else struggles to make ends meet.

The Democratic Party would seem to have every reason to embrace the People’s Budget’s vision and goals. Although the Congressional Progressive Caucus has 75 Democratic members in the House (out of 194 Democratic Representatives), the national Democratic Party has not adopted many of the key proposals of the People’s Budget. The Party has not committed itself to goals and a vision for America that puts the working and middle class before wealthy individuals and large corporations.

Our democracy is threatened. Plutocracy, where a relatively small number of wealthy individuals control the government, might be a more accurate description of our current political system. Currently, neither of our major political parties is committed to government of, by, and for the people, as opposed to wealthy individuals and corporations. The People’s Budget would change this.

I encourage you to contact your Representative and Senators in Congress to encourage them to support the Congressional Progressive Caucus’s comprehensive, well thought out proposals that make up the People’s Budget. We need to support the working and middle class, decrease income and wealth inequality, and invest in preparing America and Americans for the future. The People’s Budget makes it clear we can do this and lays out a realistic plan to do so.

[1]      Vanden Heuvel, K., 5/9/17, “Trump’s budget betrays his supporters. Here’s one that doesn’t.” The Washington Post

[2]      Congressional Progressive Caucus, retrieved 7/7/17, “The People’s Budget: A roadmap for the resistance,” https://cpc-grijalva.house.gov/uploads/FINAL%20CPC%20Budget%20FY18%20Executive%20Summary.pdf

[3]      Blair, H., 5/2/17, “‘The People’s Budget’: Analysis of the Congressional Progressive Caucus budget for fiscal year 2018,” Economic Policy Institute Policy Center (http://www.epi.org/publication/the-peoples-budget-analysis-of-the-congressional-progressive-caucus-budget-for-fiscal-year-2018/)

MAKING REGULATION WORK

For society to function, regulatory agencies must protect consumers, workers, and the public from self-interested and unscrupulous individuals, employers, and businesses. In a democracy, this requires a concerted effort and leadership from elected officials to put appropriate regulations in place and to ensure that they are enforced.

In a recent speech, Senator Elizabeth Warren (MA) noted that an essential piece of regulating large corporations is to use anti-trust laws to stop mergers that create huge corporations that have the power to distort our economy and policy making. The Justice Department, the Federal Trade Commission, and state attorneys general all have the power to do this. However, the political climate and, to some extent, the judicial climate have left anti-trust regulation withering on the vine in recent decades. [1]

Due to weak anti-trust law enforcement, a few giant corporations now control major U.S. industries including the airline, banking, health care, pharmaceutical, agriculture, telecommunications, and technology industries. Today, two-thirds of the 900 U.S. industries that are tracked by The Economist are more concentrated than they were in 1997, i.e., have fewer and larger corporations making them up. Competition is increasingly choked off. Small businesses and innovators are shut out of the market place, either by being bought up or squashed.

With this reduced competition, consumers pay more and get lower quality, while workers have their pay and benefits cut. A classic example of this is the cost and speed of Internet access. The U.S. has some of the most expensive Internet access among the developed countries of the world. And the speed of access is among the slowest in the world, particularly when comparing major cities. [2] Furthermore, cost and speed of access in the U.S. varies tremendously among urban and rural areas, as well as among wealthier and poorer communities.

The poor Internet service in the U.S. occurs because we have a small number of large, private, lightly regulated telecommunications providers that often have a monopoly or near-monopoly on service in a geographical area. To improve access, cost, and speed, a handful of U.S. cities have chosen to create their own municipal broadband services to compete with private Internet service providers: Chattanooga, Tennessee; Bristol, Virginia; Lafayette, Louisiana; Cedar Falls, Iowa; and Wilson, North Carolina. However, the private providers are working to get states and the federal government to ban the creation or expansion of these municipal providers because they do not want the competition. The private providers are also lobbying hard to weaken regulation, such as the net neutrality rules that the Federal Communications Commission recently put in place.

The argument that corporations and competition in a free market will result in effective self-regulation has been shown to be false time and again. The financial industry is probably the poster child for refuting this argument. The deregulation of the financial industry led, not to effective self-regulation as the proponents promised, but to the savings and loan crisis of the late 1980s and early 1990s, as well as the financial collapse of 2008. The lack of regulation led to risky and abusive business practices that spiraled out of control and eventually collapsed, causing major disruption to the financial industry and the whole economy.

In another example, U.S. industry has not, on its own, kept our air and water clean. Without regulation, it is much easier and cheaper for industry to dump its waste products into our air and water.

Corporations have a knee-jerk reaction against regulation because they want unfettered control of their products, their markets, and their marketing. They highlight the (often exaggerated) costs of regulations and ignore benefits. Unfortunately, this has been a very effective strategy for resisting regulation in our current political climate. It seems that no one is highlighting the benefits of regulation or standing up for consumers, workers, and the public.

Corporations always claim (with little evidence) that regulation will hurt business and reduce the number of jobs. However, as the financial collapse demonstrated, a lack of regulation can lead to a crisis that dramatically hurts businesses and reduces the number of jobs.

In fact, studies have shown that regulation has a neutral or modestly positive effect on the overall number of jobs, although it may cause some shifting of jobs, for example from the coal industry to the wind and solar power industries. [3]

Furthermore, the Office of Management and Budget (OMB) reported to Congress that the cost-benefit analyses of new, major federal regulations from 2009 to 2015 showed that benefits exceeded costs by between $103 billion and $393 billion annually. These findings are corroborated by other reports.

In another report, OMB reviewed major regulations from 2000 to 2010 and found that the average annual benefits of regulations were about 7 times the costs. This finding is especially significant given that almost all costs are included in such analyses and are often over-estimated, while many benefits are not monetized and, therefore, are not included (e.g., the lifetime benefit of better cognitive functioning when children’s exposure to lead and mercury is reduced). In other words, benefits outweigh costs by 7 to 1 even though costs are over-estimated and benefits are under-estimated. [4]

So, what will it take to get good regulations in place that protect workers, consumers, and the public? Senator Warren in a recent speech called for 4 policy changes to reduce corporate power and allow appropriate regulation to occur:

  • Enforce anti-trust laws to limit the size and power of corporations,
  • Reform campaign finance laws, including enhancing the value of small contributions from individuals by matching them with public funds,
  • Close the revolving door of personnel who move between industry and government jobs, creating conflicts of interest and an industry-friendly mindset among regulators, and
  • Reform the process for implementing regulations to limit corporate influence. [5]

We as citizens and voters need to work with our elected officials to make sure that the influence and interests of large corporations are appropriately balanced with the interests of workers, consumers, and the public. This means we need to be active and engaged in our democratic processes – in our elections and in communicating with our elected officials. Senator Warren notes that the concentrated money and power of large corporations and wealthy business people influence nearly every decision made in Washington, D.C. We must ensure that the voices of we the people are heard and have every bit as much influence as those of wealthy individuals and large corporations.

[1]      Marans, D. 5/16/17, “Elizabeth Warren has a real plan to drain the swamp in Washington,” HuffPost (http://www.huffingtonpost.com/entry/elizabeth-warren-clean-up-washington-trump_us_591b6f2ae4b0a7458fa3f3d8)

[2]      Yi, H., 4/26/15, “This is how Internet speed and price in the U.S. compares to the rest of the world,” PBS NewsHour (http://www.pbs.org/newshour/updates/internet-u-s-compare-globally-hint-slower-expensive/)

[3]      Shierholz, H., & McNicholas, C., 4/11/17, “Understanding the anti-regulation agenda,” Economic Policy Institute (http://www.epi.org/publication/understanding-the-anti-regulation-agenda-the-basics/)

[4]      Shierholz, H., & McNicholas, C., 4/11/17, see above

[5]      Marans, D. 5/16/17, see above

SAVING OUR REGULATORS FROM THE WAR ON REGULATION

The war on regulation is a war not only on regulations themselves, but on the regulatory agencies that work to protect consumers, workers, and the public. The federal regulatory agencies that we rely on include the:

  • Consumer Financial Protection Bureau (CFPB) that protects us from deceptive financial products (e.g., loans and credit cards) and abusive financial corporations (e.g., banks, payday lenders, and loan sharks);
  • Consumer Product Safety Commission (CPSC) that protects us from dangerous physical consumer products (e.g., toys, children’s car seats, cribs, power tools, appliances, cigarette lighters, and household chemicals);
  • Environmental Protection Agency (EPA) that protects us from pollution of our air and water;
  • Federal Trade Commission (FTC) that protects us from unfair and deceptive practices in the marketing of consumer goods (e.g., products that promise that your baby can learn to read);
  • Food and Drug Administration (FDA) that protects us from tainted food and unsafe medications;
  • National Labor Relations Board (NLRB) that protects workers from unfair treatment on the job;
  • Occupational Health and Safety Administration (OSHA) that protects workers from unhealthy and unsafe working conditions; and
  • Securities and Exchange Commission (SEC) that protects investors from unfair or deceptive practices in the buying and selling of securities.

The Consumer Financial Protection Bureau (CFPB) is the newest of these agencies. It was created after the financial collapse of 2008 as part of the Dodd-Frank financial reform act. Its creation was spearheaded by Massachusetts Senator Elizabeth Warren. It is stopping the abusive and deceptive mortgage loans that were a major contributor to the financial collapse and to the loss of over 9 million homes by middle and working-class Americans.

The CFPB works to protect consumers from unfair, discriminatory, deceptive, and abusive practices by banks and other financial institutions. It provides consumers with information and tools to make good financial decisions. It receives and responds to consumer complaints. And it takes action against financial corporations that break the law. In its short life, it has handled over 1 million consumer complaints and obtained $12 billion in relief for over 29 million consumers.

Because the CFPB regulates Wall Street firms and holds them accountable, it has been in the crosshairs of the big banks and investment corporations. Since before the CFPB came into existence, Wall Street, through its campaign spending, its lobbyists, and its friends in government offices (both elected and appointed ones), has worked to weaken, delay, and eliminate the CFPB and its regulations. Currently, CFPB’s opponents are working to reduce the power of its director or to get him to resign so Trump can appoint someone who won’t stand up for consumers and take on the big financial corporations. They are also trying to cut its budget and weaken its independence by putting it under the control of the President and Congress. [1] [2]

President Trump and Scott Pruitt, his head of the Environmental Protection Agency (EPA), are working hard to weaken the EPA. They have proposed dramatic budget cuts for it and significant weakening of its regulations promoting clean air and water, as well as its efforts to reduce global warming and climate change. The proposed budget cut, from $8.2 billion to $5.65 billion (31%), is the greatest percentage cut proposed for any federal agency. It would have so many very serious implications that many of them will get very little if any attention from the media.

For example, the proposed budget for the EPA would eliminate federal funding for protecting children from poisoning by lead paint. According to a 2014 report from the Centers for Disease control, 243,000 children in the U.S. have lead levels in their blood that exceed the danger threshold for permanent neurological damage. Moreover, there is compelling evidence that significantly lower blood lead levels can cause serious harm.

The Lead Risk Reduction Program at the EPA educates the public and certifies home renovators on the safe removal of lead paint. This program’s $2.5 million and 73 employees would be eliminated in the Trump budget. The supposed rationale for this is that state and local governments can do this better than the federal government. However, the proposed budget also eliminates the $14 million for grants to state and local governments to help them address the risks of lead paint. [3]

I urge you to contact your U.S. Representative and Senators. Ask them to stand up for children and all of us by supporting a strong, well-funded EPA, as well as a strong and independent Consumer Financial Protection Bureau. Strong consumer and worker protections, in general, should be the priority, not kowtowing to large corporations.

[1]      Frank, B., 5/2/17, “The art of the deal: Bait and switch division,” The Boston Globe

[2]      Freking, K., & Gordon, M., 5/5/17, “GOP-led House panel votes to overhaul Dodd-Frank,” The Boston Globe from the Associated Press

[3]      Mooney, C., & Eilperin, J., 4/6/17, “EPA programs to protect kids from lead paint may end,” The Boston Globe from the Washington Post

FIGHTING RESISTANCE TO NEEDED REGULATIONS

We need rules and regulations to protect workers, consumers, and the public. However, opposition to regulations comes from organizations and individuals that have strong self-interests at stake and often lots of resources. Typically, it’s large corporate employers and producers of goods and services that oppose regulation. They use campaign spending and lobbying to persuade public officials to side with them. They use public relations campaigns to try to win support from voters and the public, often using deceptive messages. They claim that the costs of regulation are too high, but they almost never discuss the benefits.

My previous two posts described the war being waged on regulation by the Trump administration and some Members of Congress, particularly Republicans. (You can read them here and here.) My last post highlighted examples of rules and regulations that have been repealed or delayed. Every one benefits corporations at the expense of workers, consumers, or the public.

How does this happen in a democracy? There are several factors, but ultimately it comes down to the concentrated self-interests of large corporations and their political power.

Regulation typically has immediate and sometimes significant costs that are concentrated on a small group of organizations or individuals. The benefits typically are spread over a much broader group of people and often over a longer time period. The costs are typically easy to identify and measure in dollars, while the benefits are often much more difficult to monetize and some are even hard to identify.

As a result, those bearing the costs of regulation have strong self-interests in opposing and stopping or weakening regulation. When they are large corporations, they have tremendous resources to use in their opposition (e.g., money, people [including lobbyists], and the ability to sustain efforts over time).

Those who benefit (i.e., workers, consumers, and the public) have a self-interest in regulation. However, the impact is much smaller at the individual level and often gets lost among the many demands of every-day life. Furthermore, individuals’ resources (e.g., time, energy, and attention span) to use in supporting regulation are generally quite limited. Although the aggregate benefit may be huge, it is often very diffuse – spread over millions of people and across many years.

Therefore, the politics of regulation tend to favor weak or no regulation and even de-regulation. It typically takes political leadership that stands up for the broader public interest to push through (and maintain) strong regulation. With our corporations growing larger and more powerful all the time, the ability to stand up to them has become more difficult.

Let’s look at a specific, current example of regulation that is being considered.

Scientists at the Environmental Protection Agency (EPA) and other agencies, along with advocates for public health and the environment, are urging that certain pesticides need to be regulated. However, to-date, the Trump administration has failed to act on findings that the pesticide chlorpyrifos (for example), a Dow Chemical product, can cause significant harm. (By the way, Dow Chemical contributed $1 million to Trump’s inauguration activities and its chairman heads a White House working group on manufacturing.)

Chlorpyrifos has been widely used on fruit crops since the 1960s. Dow Chemical sold 5 million pounds of it in the US last year. Traces of it are commonly found in drinking water and umbilical cord blood, which is the blood a mother provides to her baby while pregnant. It can harm children’s brain development at very low exposure levels. Scientists have also compiled over 10,000 pages of evidence that chlorpyrifos harms animals, presenting a risk to 1,778 out of the 1,835 animals and plants that were studied, including endangered species of frogs, fish, birds, and mammals. [1]

The costs of the regulation of chlorpyrifos, i.e., a reduction in its use, fall immediately and directly on Dow Chemical, an $8 billion corporation (that is about to merge with DuPont and get even bigger). The benefits of regulating chlorpyrifos are clear but are hard to monetize. They occur over time to a broad range of people and to animals and our ecosystem.

Dow Chemical has strong political connections and lobbying capacity. It has spent about $12 million per year on lobbying in each of the last 5 years. [2] The political resources and clout of the beneficiaries of regulating chlorpyrifos are nowhere near as great as those of Dow Chemical.

Unless there is strong political leadership on behalf of the public and the environment, regulation of chlorpyrifos probably won’t happen or will be very weak. Given the current political environment in Washington, D.C., I’d bet that Dow Chemical corporation’s efforts to block regulation of chlorpyrifos will succeed.

This is a classic example of why democracy won’t succeed if the public and voters treat it as a spectator sport. We need to be informed, sometimes down to the level of detail of this example, and engaged. We must insist that our elected officials – and candidates during elections – are committed to standing up for the public interest despite the power and resources that large corporations can bring to bear on our political system.

We need to join and support advocacy groups that will act on our behalf on issues such as these, and that will let us know when there are opportunities for us to act and have an impact. We need to support the regulatory agencies (more on them in a future post) that are working to protect us. Many of them are under attack by President Trump, corporations, their lobbyists, and some of our other elected officials. And finally, we need to pay attention to and support information sources that will cover these issues.

We certainly can’t do all of these things all the time. But each of us, as a voter and citizen in a democracy, needs to be an active participant in our political system, and to do what we can to ensure that government works for us, not for the big corporations.

[1]      Biesecker, M., 4/21/17, “Dow wants Trump to set aside report on pesticide risks,” Associated Press in The Boston Globe

[2]      OpenSecrets.org, retrieved from the Internet on 5/27/17, “Dow Chemical,” Center for Responsive Politics (https://www.opensecrets.org/lobby/clientsum.php?id=D000000188&year=2016)

CORPORATE BEHAVIOR DRIVES INEQUALITY

Several corporate practices, particularly those of large, multi-national corporations, are major contributors to income and wealth inequality. One is their avoidance of taxes, which means other taxpayers must make up the difference. Another is their employee compensation practices.

The huge and growing differential between the compensation for corporate executives and workers needs to be reduced. Increasing the minimum wage is one step. However, taxing or limiting compensation for executives should also occur.

Wall Street gave out $24 billion in bonuses last year to 177,000 workers who got an average of $138,200 each. The average Wall Street bonus has increased 900% since 1985, while the minimum wage has increased a little over 100%. This $24 billion in bonuses for 177,000 workers is over one and a half times the total pay for the year for all 1,000,000 (1 million), full-time, minimum wage workers. [1]

This excessive Wall Street compensation not only contributes to overall inequality, it contributes to gender and racial income disparities. Roughly 85% of Wall Street executives and senior managers are white and over two-thirds are male. By contrast, 56% of minimum wage workers are non-white and almost two-thirds of them are female.

Huge Wall Street bonuses and “performance pay” provide incentives to Wall Street to engage in the kind of high risk, high return financial strategies that led to the 2008 financial collapse. The Dodd-Frank financial reform law called for regulation of these bonuses but these regulations have been blocked and delayed. Furthermore, the 20 largest US banks gave out over $2 billion in so-called performance pay to their top executives between 2012 and 2015. Not only do these huge amounts provide incentives for risky behavior, they are also tax deductible for the corporations, saving them $725 million in taxes.

A recent study of corporate taxes showed that many large, profitable corporations frequently pay no federal taxes. The analysis found that 258 large corporations that were consistently profitable from 2008 to 2015 and had $3.8 trillion in profits rarely paid the 35% tax rate that they, President Trump, and Republicans in Congress say needs to be cut. On average, the study found they paid only 21% of their profits in taxes – a lower rate than many individuals pay on their incomes.

In fact, 18 of these large, consistently profitable corporations paid no federal tax over the study’s 8-year period. And 100 of them paid no taxes in at least one year of the 2008 and 2015 period studied, despite reporting a profit. They did this by using tax loopholes and avoidance strategies such as shifting profits to overseas entities, depreciating assets very quickly, deducting the cost of huge stock options given to executives, and using special industry-specific tax breaks they’ve gotten slipped into our tax laws.

These tax breaks are highly concentrated with most of them going to a few, very large, multi-national corporations. Just 25 corporations received over half of the tax subsidies of all 258 corporations in the study. The study reported that the corporations with the biggest tax subsidies over the 8-year period were AT&T ($38 billion), Wells Fargo ($31 billion), JPMorganChase ($22 billion), and Verizon ($21 billion). [2]

The study refutes the argument that the US’s corporate tax rate is higher than that of foreign countries and that it makes the US an unfavorable location for doing business. The tax rates paid over the 8-year period by certain industries were quite low: gas and electric utilities – 3%, industrial machinery – 11%, telecommunications – 12%, oil, gas, and pipelines – 12%, and Internet services and retailing – 16%. The industry-specific tax breaks that lead to these low tax rates are unfair and unnecessary.

The study’s report recommends five changes to US tax laws to remedy these problems:

  • Repeal the tax exemption for overseas profits,
  • Limit the deduction for the phantom costs of executive stock options,
  • Eliminate tax provisions that allow for rapid, let alone immediate, depreciation of assets,
  • Reinstate a strong corporate Alternative Minimum Tax, and
  • Increase transparency by requiring full, country-by-country disclosure of corporate financial information. [3]

I urge you to contact your members of Congress and ask them to support these changes to our tax laws so that large, multi-national corporations pay their fair share of taxes. Please also ask them to support increasing the minimum wage and implementing regulations on Wall Street compensation to reduce incentives for risky behavior that could lead to another financial disaster.

[1]      Anderson, S., 3/15/17, “Off the deep end: The Wall Street bonus pool and low-wage workers,” Moyers & Company (http://billmoyers.com/story/wall-street-bonus-pool-2017/)

[2]      Cohen, P., 3/9/17, “Profitable companies, no taxes: Here’s how they did it,” The New York Times https://www.nytimes.com/2017/03/09/business/economy/corporate-tax-report.html?_r=0

[3]      Institute on Taxation and Economic Policy, 3/9/17, “The 35 percent corporate tax myth: Corporate tax avoidance by Fortune 500 companies, 2008 to 2015” http://itep.org/itep_reports/2017/03/the-35-percent-corporate-tax-myth.php#.WM6CaYWcHIU

DAMAGE IS BEING DONE BEHIND THE TRUMP SMOKESCREEN

What you don’t know can hurt you. Behind the smokescreen of President Trump’s high profile Executive Orders and public statements, he and Congress are undermining public health and safety, as well as government revenue. By undoing or weakening existing policies, they are allowing, among other things:

  • Underpayment of royalties on fossil fuel extraction,
  • Use of unsafe and inefficient private prisons,
  • Dumping of coal mining wastes into streams, and
  • Weakened background checks for gun purchases by people unable to manage their own affairs.

President Trump rescinded a rule that stopped corporations from paying royalties based on artificially low prices. When a corporation extracts oil, gas, and coal on public lands, it will (if it can) sell them to a subsidiary at an artificially low price that allows it to pay an artificially low royalty to the federal government. Its subsidiary then sells the extracted fossil fuel at a much higher, market price. The result is a windfall for the corporation and a rip-off of taxpayers. [1]

Trump’s Attorney General has rescinded the decision to eliminate the use of unsafe and inefficient private prisons. Last August, a Department of Justice Inspector General’s report found that the private prisons used by the Bureau of Prisons did not provide the same level of safety and security as government owned and operated prisons. Therefore, Obama’s Deputy Attorney General announced a decision to eliminate this use of private prisons. In her announcement, she also noted that the private prisons did not provide the same level of correctional services, programs, and resources to prisoners as government-run prisons, and that they did not substantially reduce costs.

Despite this evidence, the Trump administration has decided that 13 private federal prisons, which hold 22,000 inmates, will continue to be run by private corporations. Thus, hundreds of millions of taxpayers’ dollars will pay three corporations to run unsafe, substandard, inefficient prisons. (See my previous posts here and here for more details.) Perhaps not surprisingly, these three corporations have given significant amounts of money to politicians, including to President Trump. One of them, CoreCivic, formerly the Correction Corporation of America, gave $250,000 to Trump’s inaugural festivities. GEO Group, another one of the three private prison corporations, also gave $250,000 to Trump’s inaugural festivities, on top of the $275,000 it had given to a Super PAC that supported the Trump campaign. [2]

Congress has also taken steps to roll back regulations that are in the public interest. A measure to rescind a rule banning the dumping of coal mining debris into streams has passed the House and Senate. President Trump is expected to sign it. The House and Senate have also voted to rescind a regulation requiring oil and gas corporations to disclose payments to foreign governments for mining and drilling rights. The House has voted to overturn a rule that reduced the harmful atmospheric emissions from burning unused natural gas at drilling operations on federal lands. [3] The House has also passed a resolution weakening background checks for gun purchases by Social Security recipients who have been declared incompetent to manage their personal affairs. [4]

Republicans in Congress are employing a rarely used tool, the Congressional Review Act, to roll back rules issued in the final months of Obama’s presidency. The Act provides a temporary window in which a simple majority of both chambers can rescind a newly promulgated rule. Trump must sign these measures to complete the rescinding of the targeted rule. The Act also prevents the executive branch from enacting a substantially similar rule in the near future. [5]

Furthermore, Congress is considering two new laws that would make it even easier for it to exercise its political judgement and overrule science-based regulations. One of the new laws, dubbed the Midnight Rules Relief Act, is described as the Congressional Review Act on steroids and would, among other things, prohibit federal agencies from re-proposing a rejected regulation indefinitely. The other new law, called the Regulations from the Executive In Need of Scrutiny (REINS) Act, would require any new regulation to be approved by Congress. If Congress failed to approve the regulation, it would not go into effect. Both of these laws are being pushed by corporate lobbyists who want to block the implementation of science-based standards for air and water quality, among other things. [6]

Behind the smokescreen of Trump’s high-profile actions, his administration and Congress are undermining public health and safety. It seems clear that the current Congress and administration are committed to benefiting corporate America and ignoring the well-being of every-day Americans. Furthermore, sweetheart deals for large corporations are providing them a financial windfall at the expense of every-day taxpayers.

I urge you to tell your Representative and Senators in Congress that you believe it is government’s job to protect the health and safety of the public, even if it is an inconvenience for big corporations. And that corporations should pay their fair share of taxes and government fees, because otherwise you and I and all the other individual taxpayers have to make up the difference. Tell your Congress men and women that our democracy is supposed to be of, by, and for the people, not large corporations.

[1]      Sierra Club, 2/14/17, “Trump ends rule blocking corporate polluters from paying themselves,” Common Dreams (http://www.commondreams.org/newswire/2017/02/24/trump-ends-rule-blocking-corporate-polluters-paying-themselves)

[2]      Zapotosky, M., 2/23/17, “Justice Department will again use private prisons,” The Washington Post (https://www.washingtonpost.com/world/national-security/justice-department-will-again-use-private-prisons/2017/02/23/da395d02-fa0e-11e6-be05-1a3817ac21a5_story.html?utm_term=.f631c1be57d2)

[3]      Daly, M., 2/3/17, “House votes to overturn Obama rule on natural gas ‘flaring’,” Associated Press (http://bigstory.ap.org/article/d84e8dd2a74042ed8d9e864fdb59d069/house-poised-overturn-obama-rule-natural-gas-flaring)

[4]      Freking, K., & Daly, M., 2/2/17, “Congress scraps Obama rules on coal mining, guns,” Associated Press (http://bigstory.ap.org/article/bf29ce0c4ba84550b51f503e7618d901/house-gop-aims-scrap-obama-rule-gun-background-checks)

[5]      Freking, K., & Daly, M., 2/2/17, see above

[6]      Kothari, Y., 1/4/17, “Attacking science in week one: How Congress is trying to dismantle public protections,” Union of Concerned Scientists in Common Dreams (http://www.commondreams.org/views/2017/01/04/attacking-science-week-one-how-congress-trying-dismantle-public-protections)

TRUMP’S INFRASTRUCTURE PLAN: A BOONDOGGLE

Trump promised during the campaign that he would stimulate up to $1 trillion of investment in rebuilding the country’s infrastructure. This sounds surprisingly like President Obama’s efforts throughout his presidency to spend a similar amount on public infrastructure. Obama’s proposal would have stimulated job growth and the economy. It would have helped the US more quickly and fully recover from the Great Recession of 2008. But the Republicans in Congress would have none of it. It will be interesting to see how Congressional Republicans react to a major infrastructure investment proposal from President Trump, assuming he does put a proposal forward.

There are major differences between what Trump has described and what Obama proposed. Obama proposed spending federal government money using a public decision-making process to determine the projects to be undertaken.

Trump’s plan, rather than spending federal money as Obama proposed, would provide big tax breaks to private developers. The private developers, not public officials, would select the projects to undertake. The projects would, of course, be ones on which the developers would make a profit. The private developers would effectively own the completed facility and would receive federal tax credits of 82% of their equity investment. [1] That is the equivalent of buying a home and receiving 82% of the cost back in tax credits, meaning the home that you now would own outright would only have cost you 18% of its value.

Thus, the projects that would be undertaken under Trump’s plan would be quite different than those of Obama’s approach. For example, it’s unlikely under Trump’s plan that many school buildings would be renovated or that new schools would be built. Many of our school buildings do need major renovation or to be replaced, but this is not a profit-making undertaking. Similarly, public transportation is not likely to receive much investment. Public facilities, including water and sewer systems and public housing, would only receive investments if private developers were allowed to effectively own the resulting facility and make a profit from it. We’ve already seen what happens if private interests are given control of water systems. For example, in Detroit, water rates were increased to the point where many customers couldn’t afford their water bills. Then, the water authority callously shut off water to those who were behind on their bills.

Investments in our deteriorated roads and bridges would occur only if private developers were allowed to effectively own them and to charge tolls so they could profit from their investment. Investments in buildings for commercial or residential use probably would occur, because developers can charge rents and make profits. Investments would likely be made in high-income, well-developed communities where the return on investment is assured, not in communities suffering from under-investment where infrastructure improvements are most needed.

Furthermore, many of the projects that would benefit from Trump’s plan would have been undertaken anyway, without the tax credit. Therefore, the tax breaks would be windfall profits for developers and nothing more. In addition, important sources of investment capital, such as pension funds, endowments, and collective investment funds, would not be incentivized to make infrastructure investments because they are tax-exempt, non-profit entities and would not benefit from the proposed tax credit.

Trump’s advisors claim that his infrastructure plan would pay for itself because the new revenue resulting from its projects would fully cover the lost revenue from its tax credits. This conclusion is based on clearly unrealistic assumptions. It assumes that all the projects that receive the tax credit wouldn’t have otherwise occurred, that all the workers on the projects would otherwise have been unemployed, that the workers would have taxable incomes 3 to 4 times that of typical construction workers, and that all the money invested in these projects would otherwise have been sitting idle rather than invested elsewhere. [2]

In summary, the Trump infrastructure plan would not produce the infrastructure investments that are needed and that would benefit the public. It would provide private developers with windfall profits from a big tax credit that would increase the federal government’s deficit. It would privatize decisions on infrastructure investments, the effective ownership of the facilities built, and most of the resulting benefits.

Direct spending by the federal government on needed public infrastructure would be an economically sound, rational policy for making needed investments. Given the very low interest rates at which the federal government can currently borrow money by selling Treasury bonds, the cost of raising money for such investments would be very low. Therefore, the return on investment would be unusually high.

I urge you to contact your Congress people and ask them to support infrastructure spending that will benefit our nation as a whole and not just line the pockets of private developers. Ask them to ensure that the projects undertaken create infrastructure that meets public, not private, needs.

[1]      Huang, C., Van de Water, P.N., Kogan, R., and Kamin, D., 12/2/16, “Trump infrastructure plan: Far less than the claimed $1 trillion in new projects,” Center on Budget and Policy Priorities (http://www.cbpp.org/research/federal-budget/trump-infrastructure-plan-far-less-than-the-claimed-1-trillion-in-new)

[2]      Huang, C., et al., 12/2/16, see above

STOP COMMERCIALIZATION OF OUR NATIONAL PARKS

Unfortunately, the National Park Service (NPS) has just enacted a policy that allows expanded commercialization of our national parks. Corporations have been pushing for years to commercialize our national parks with their names, logos, and products. The timing of the new policy is particularly inappropriate because this year is the 100th anniversary of our national parks. Their pristine beauty and intergenerational legacy were celebrated in the Ken Burns’ wonderful 2009 PBS special, “The National Parks: America’s Best Idea.” [1]

This new policy has been put in place despite overwhelming public opposition – hundreds of public comments in opposition and over 200,000 signatures on a petition opposing this policy. [2] The new policy will allow corporate sponsorships and partnerships, lift naming rights restrictions, allow advertising in parks (including for alcohol), and allow, if not require, parks to seek donations from corporations.

The new policy allows facilities from auditoriums to benches to have corporate names on them. Buses in national parks can now be plastered with advertising. Bricks or paving stones can have corporate names and logos on them. Educational programs and endowed positions can be branded by corporations. Large banners with corporate logos will now be allowed in the parks.

Even before this policy was in place, Coca-Cola, after donating $13 million to the NPS, blocked a proposed ban on bottled water in Grand Canyon National Park. The ban would have reduced trash in the park by 20%, saving money and employees’ time, while reducing litter and wasteful use of plastic. After public pressure, NPS allowed a park-by-park ban that requires a rigorous cost-benefit analysis and a multi-layered approval process. In another pre-policy example, Budweiser had a joint marketing campaign with NPS that allowed it to use the image of the Statue of Liberty on its labels and to co-sponsor a concert in a national park.

This is happening because our national parks are starved for money. While attendance at the parks has been up for three years in a row and is 20% higher than it was in 2013, Congress and the President have provided flat funding for operating the parks. [3] Despite the increased wear and tear, as well as the need for more parking and greater capacity on trails and roads, due to the increased number of visitors, the parks have received dramatically insufficient funding to maintain, let alone expand, infrastructure. It is estimated that there is an $11 billion backlog in maintenance projects. [4] Park superintendents struggle to meet their goals of preserving their parks for future generations, while providing a safe and enjoyable experience for visitors. They will now be put in the awkward position of needing to be involved in fundraising to support their park while being banned by federal law from directly soliciting donations.

As a poignant example of the problems commercialization can cause, Delaware North Corporation (DNC) is suing the NPS for $51 million for compensation for trademarks on the names of facilities in Yosemite National Park. DNC had been the concessionaire at the park since 1993, but recently lost the contract. Because this suit could take some time to resolve, Yosemite National Park has had to rename facilities in the park. The iconic Ahwahnee Hotel has been renamed, despite having operated under this name since 1927. It was named after the Native Americans who lived in the valley and whose descendants still work in the park. The Badger Pass Ski Area, among other facilities, has also been renamed and the trademark on the name “Yosemite National Park” may also be disputed. [5]

Commercialization is spoiling the pristine beauty of our national parks and detracting from the inspiring experience of visiting them. Conservationist and President Teddy Roosevelt envisioned our national parks as being preserved for future generations “with their majestic beauty all unmarred.” Commercialization of our national parks is antithetical to that vision and to the basic principle for creating national parks – to preserve our natural wonders and beauty for future generations in their natural, awe-inspiring state. We need to do a better job of protecting our national parks and the experience of visiting them.

I encourage you to contact your members of Congress and urge them to adequately fund our national parks and to ban commercialization of them. We must resist the efforts by corporate America and budget cutting politicians to commercialize and privatize these truly unique and irreplaceable public assets.

[1]      Burns, K., & Duncan, D., 2009, “The National Parks: America’s Best Idea,” Public Broadcast System, (http://www.pbs.org/nationalparks/)

[2]      Strader, K., 1/4/17, “Disregarding public concern, the National Park Service finalizes commercialism policy and opens parks to industry influence,” Public Citizen as reported by Common Dreams (http://www.commondreams.org/newswire/2017/01/04/disregarding-public-concern-national-park-service-finalizes-commercialism-policy)

[3]      Associated Press, 1/17/17, “National Parks set yet another attendance mark,” The Boston Globe

[4]      Rein, L., 5/9/16, “Yosemite, sponsored by Starbucks? National Parks to start selling some naming rights,” The Washington Post

[5]      Howard, B.C., 1/15/16, “National park advocates appalled by Yosemite name changes,” National Geographic (http://news.nationalgeographic.com/2016/01/160115-yosemite-names-ahwahnee-hotel-wawona-curry-badger-pass/)

GOOD NEWS FROM THE 2016 ELECTIONS

Believe it or not, there was quite a bit of good news in the 2016 elections. While I imagine many of us feel that the election of Donald Trump as president was bad news for our country, the frustration that fueled his election has positive aspects.

First, the election of Trump and the surprising success of Bernie Sanders in the Democratic primary both reflect a strongly-felt, deep-seated frustration that many middle class and working people have with the downward slide in their economic security and well-being. If they have been able to maintain their standard of living over the last 35 years, it has been a struggle. Often, they have had to work more hours at the same or lower pay. Many have lost jobs that moved overseas or to lower wage areas within the US. Some have had their pay or benefits cut due to overseas competition or the decline of collective bargaining through unions. Meanwhile, they have watched the income and wealth of the economic and corporate elite skyrocket.

Small businesses have struggled while giant, multi-national corporations have been bailed out and given huge tax breaks and other subsidies. Our elections and political system have produced policies that favor big corporations, while small business people struggle, just like others in the middle and working class.

Voters did not give any sort of mandate to Trump and the Republicans to enact their policy priorities. As you probably know, 3 million more people voted for Clinton than for Trump. In US Senate races, Republicans won only 46% of the popular vote – but got 52% of the seats. In the House, the Republicans won only 51% of the vote – but got 55% of the seats. [1]

Only 53% of eligible voters actually voted. This means that barely one out of four eligible voters voted for Trump and the Republicans. And the only reason Republicans won the presidency (courtesy of the Electoral College) and a majority in the US Senate is because of the disproportionate power given to small states in those bodies.

Republicans won a significant majority of US House seats only because of the gerrymandering of House districts (i.e., the drawing of district lines to gain partisan advantage). Due to this gerrymandering, it is estimated the Democrats would need to receive about 10 million more votes nationwide than Republicans (i.e., almost 55% of the vote) in House races to gain a narrow majority of the seats. [2]

Not only don’t Trump and the Republicans have any mandate, but many election results were in direct contradiction to their brand of conservatism and their policy positions. Three very progressive women of color were newly elected to the US Senate: Tammy Duckworth in IL, Kamala Harris in CA, and Catherine Cortez Masto in NV. Two very progressive women of color were newly elected to the US House: Pramila Jayapal in WA and Stephanie Murphy in FL.

In Oregon, Kate Brown, was elected Governor as a candidate of the Working Families Party. In AZ, ultra-right wing sheriff Arpaio was defeated by a Democrat. In MN, a Somali-American woman, Ihlan Omar, was elected to the legislature. And in TX four Latinos gained seats in the legislature. [3]

Important progressive policies were enacted by voters through ballot initiatives. All four states (AZ, CO, ME, and WA) that had minimum wage increases on the ballot passed them. Overall, the minimum wage will increase in 19 states on January 1st. This will increase wages for 4.3 million workers, providing them with over $4 billion of increased income over the course of the year. Millions of additional workers who earn just above the new minimum wage levels will also likely receive pay increases. The well-being of all these workers and their families will improve. [4] Income inequality will be reduced and all workers and the middle class will benefit.

AZ and WA also passed laws requiring paid sick time, while SD rejected a decrease in the minimum wage for teenagers and VA rejected an anti-union initiative.

CA and WA passed initiatives calling for overturning the Supreme Court’s Citizens United decision (which allows unlimited spending by the wealthy in campaigns). MO and SD passed new laws regulating campaign spending. SD also passed an innovative $100 annual Democracy Credit for each voter to encourage small donors to participate in funding campaigns. Voters approved citizen-funded elections in Berkeley, CA, and Howard County, MD. They approved automatic voter registration in AK with a strong 64% vote in favor, while four other states enacted automatic voter registration through their state legislatures in 2016.

Maine voted for “ranked choice voting” which allows voters to indicate their first, second, third, etc. choices on the ballot. If your first choice is out of the running, then your second choice is counted, and so forth. Therefore, you can vote for the candidate you truly believe is best, without worrying that you might be aiding the election of a candidate you really don’t like. (For example, you could have voted for Ralph Nader for President in 2000 with Al Gore as your second choice, without worrying that your vote for Nader would help George W. Bush get elected.)

In CA, MA, ME, and OR progressive values prevailed in education reform ballot initiatives. CA and OK passed significant criminal justice reforms. [5] CA, NV, and WA strengthened laws designed to reduce gun violence, while RI and SD strengthened ethics laws for elected officials. [6]

These are only a few examples of the many successes in state and local elections on ballot initiatives, as well as on the election of candidates that will stand up for middle class and working people.

The support for candidates and policies that bolster the middle class and working people is broad and deep in the US. We all need to work together to ensure that the Republican Congress and President Trump work to improve the well-being of the 99% of people in this country who aren’t wealthy. We must be vigilant to ensure that the policies they enact aren’t for the benefit of the 1%, don’t exacerbate income and wealth inequality, and don’t continue the crony capitalism that benefits our giant, multinational corporations and their senior executives at the expense of small businesses and workers.

[1]      Singer, P., 11/10/16, “Democrats won popular vote in the Senate, too,” USA Today (http://www.usatoday.com/story/news/politics/onpolitics/2016/11/10/democrats-won-popular-vote-senate-too/93598998/)

[2]      Richie, R., 11/7/14, “Republicans got only 52 percent of the vote in House races,” The Nation (https://www.thenation.com/article/republicans-only-got-52-percent-vote-house-races/)

[3]      Hightower, J., 12/8/16, “We can beat back the reign of Trump – if we unite in a movement for populist justice,” The Hightower Lowdown (https://hightowerlowdown.org/article/beat-trump-with-populist-justice/)

[4]      Jones, J., 1/3817, “The new year brings higher wages for 4.3 million workers across the country,” Economic Policy Institute (http://www.epi.org/blog/the-new-year-brings-higher-wages-for-4-3-million-workers-across-the-country/?mc_cid=d213e59597&mc_eid=2442dd3ea2)

[5]      Hightower, J., 12/8/16, see above

[6]      Politico, 12/13/16, “2016 ballot measures election results,” (http://www.politico.com/2016-election/results/map/ballot-measures)

OUR FAILING MAINSTREAM MEDIA

Our mainstream media are failing our democracy. In the last election, they provided almost no coverage of issues and policies, which should play a significant role in voters’ decisions. Even when issues or policies were mentioned, there was little fact checking or context provided, let alone analysis. Such in-depth reporting is critical to having an informed electorate, which is essential for a successful democracy.

Because the mainstream media are mostly huge, for-profit corporations, their focus is on the bottom line – on profits. Their revenue comes from advertising and is determined by how many people read or view their output. Revenue and readership / viewership are experiencing dramatic competition from on-line media. As the number of mainstream media users declines, the revenue per ad declines, so the ratio of ads to content goes up to retain as much revenue as possible. This detracts and distracts the viewer from the news that is presented.

To attract attention and eyeballs, the mainstream, corporate media have turned more and more to shocking, fear-mongering, or titillating stories at the expense of real news; in other words, to tabloid journalism. The phrase “if it bleeds, it leads,” has become all too true of the mainstream media. Crime, terrorism, violence, and tragedy are typically the leading stories because a story that engenders outrage, anger, or fear is more likely to attract viewers.

During the election, shock value was more salient than facts, in-depth details, or analysis. Coverage was more focused on generating emotional reactions than informing. As CBS’s Chairman put it, the shock value of Trump’s statements “may not be good for America, but it’s damn good for CBS.”

This focus on the sensational and lack of depth reflect not only the need to attract viewers, but also the slashing of newsrooms’ budgets. To cut costs and increase profits, our corporate, mainstream media now employ roughly 40% fewer news reporters today than they did 10 years ago; and further cuts are coming. [1]

The mainstream “news” is increasingly what is often referred to as infotainment – a cross between information and entertainment. This means less factual content and more emotional content. For political reporting, this has meant the more shocking, outrageous, and emotion-provoking the statement or story, the better. Information and factual content on issues and policies is pushed aside as too boring and too costly to report. The only facts that seem to be reported are from the horse race perspective – who’s ahead in the latest poll and who has raised more money. Ironically, we now get some of our best political analysis from our entertainers, comedians such as Stephen Colbert, Jon Stewart, John Oliver, and Bill Maher.

The bottom line is that the business model of our corporate, mainstream media is not serving the best interests of our democracy. They are not providing citizens and voters with the information and analysis they need to participate meaningfully in our democracy.

A different business model is needed where news outlets are not huge corporations and are not dependent on advertising revenue. To deliver in-depth, fact-based reporting with context and analysis, not to mention investigative journalism, news outlets will require a significant portion of their revenue to come from public funding and / or readers’ / viewers’ donations. This will ensure that content is free of the coercive effects of advertising or other funders who have a vested, special interest in the news content.

For television and radio, we need our public broadcasting system (PBS). I encourage you to listen to or watch our public broadcasts and to support them financially. I urge you to be on the lookout for and to oppose efforts to cut PBS’s public funding or undermine its independence. It is essential to our democracy and over 40 other countries have highly respected public broadcasting systems, including the BBC in Great Britain and the Canadian Broadcasting Corporation in Canada.

Finding reliable sources for print journalism (hardcopy and on-line) is not easy given all the junk and even fake news that are present on the Internet. For broad-based news coverage that includes coverage of issues of importance to our democracy, I recommend these five sources:

I hope you’ll go on-line and look at one of more of these. You may want to subscribe to their on-line news feeds or to their hardcopy publications (except for Common Dreams which is exclusively on-line). I guarantee you’ll be a better-informed citizen and voter if you do. If you don’t have time to follow one of these regularly, just keep following my blog. I’ll give you the highlights.

[1]      Bauerlein, M., 11/19/16, “How Trump played the media,” Mother Jones (http://www.motherjones.com/media/2016/11/trump-media-fail)

THE RIGHT WAY TO STOP THE OFFSHORING OF US JOBS

The US needs to stop hemorrhaging jobs to other countries. For starters, we need to do three things:

  • Impose financial disincentives for offshoring jobs,
  • Change the mindset among corporate executives that offshoring jobs is the right and acceptable thing to do, and
  • Reverse the resignation among workers and the public who believe that the offshoring of jobs is inevitable.

To create financial disincentives, we should pass laws that place special taxes or restrictions on corporations that have offshored say 100 or more jobs in the last five years. Possible examples include:

  • Bar such corporations from receiving federal contracts. Or there could be demerits subtracted from the scores of proposals from such corporations in competitive bidding situations. Or there could be financial penalties on existing federal contracts such as the deduction of $10,000 per offshored job or of 1% of a contract’s annual payment per 1,000 offshored jobs, whichever is greater.
  • A corporation’s taxes could be increased by $10,000 per offshored job or its tax rate could be increased by 1% per 1,000 offshored jobs, whichever is greater – with no offsets to allow a corporation to avoid this tax.
  • Bar such corporations from receiving government tax breaks, loans, or grants.
  • Require such corporations to pay a special, unavoidable, and substantial tax on aggregate executive compensation that is over $1 million. [1]

Senator Bernie Sanders has announced that he will introduce a bill in Congress that will include provisions similar to these to discourage the offshoring of jobs. He is calling it the Outsourcing Prevention Act. [2]

To counter the mindset that favors offshoring jobs, we should pass laws or establish executive branch procedures that publicize a corporation’s offshoring of jobs. Possible examples include:

  • Require such a corporation to hold a public hearing in the community losing the jobs 90 days before the termination of the jobs. If the number of jobs is 500 or more, a hearing in Washington before a congressional committee should be required.
  • Establish a new anti-offshoring czar in the Office of the President who would visit any such corporation’s CEO to make it clear that offshoring jobs is viewed negatively.

Providing financial rewards to corporations to keep jobs in the US is not an efficient way to stop offshoring. Typically, state or local governments provide tax abatements or other tax benefits to corporations to keep jobs. However, state and local taxes are generally only 2% or so of a corporations’ costs. Labor costs are a far greater portion of operating costs. Therefore, tax abatements are not likely to offset the savings in labor costs provided by offshoring. For example, in the recent United Technologies / Carrier (UT/C) case in Indiana, the state will provide $7 million in tax benefits over 10 years. However, UT/C estimated was that it would save $65 million per year ($650 million over 10 years) for offshoring 2,100 jobs. [3]

Corporations’ demands for financial benefits from state and local governments to keep or create jobs are really just blackmail. To stop this job-based blackmail, which robs states or municipalities of needed tax revenue, the federal government should put a 100% tax on these financial benefits, so there is no overall financial incentive for the corporation. The federal government should also reduce grants to state and local governments that give financial incentives to corporations to keep jobs. For example, awards under the Community Development Block Grant or other economic development programs could be cut for states or municipalities that agree to pay job blackmail to corporations. The federal government has used a similar strategy in other instances to get states to change policies. For example, the federal Transportation Department used cuts in federal transportation grants to get states to raise their alcohol drinking ages to 21. This reduced car accidents and saved thousands of lives. [4]

I encourage you to contact your US Representative and Senators and ask them what they plan to do to reduce the offshoring of US jobs. Request that they support a systematic approach to discouraging offshoring such as that offered by Senator Sanders’ Outsourcing Prevention Act.

[1]       Greenhouse, S., 12/8/16, “Beyond Carrier: Can Congress end the green light for outsourcing?” The American Prospect (http://prospect.org/article/beyond-carrier-can-congress-end-green-light-outsourcing)

[2]       Sanders, B., 11/26/16, “Sanders statement on Carrier and outsourcing,” Press release from Senator Bernie Sanders (http://www.sanders.senate.gov/newsroom/press-releases/-sanders-statement-on-carrier-and-outsourcing)

[3]       Leroy, G., 12/7/16, “Can Trump’s wild one-off at Carrier combat corporate welfare?” The American Prospect (http://prospect.org/article/can-trumps-wild-one-carrier-combat-corporate-welfare)

[4]       Leroy, G., 12/7/16, see above

HOW CAMPAIGN DONOR SECRECY IS MAINTAINED AND WHAT YOU CAN DO ABOUT IT

Republicans in Congress, and particularly Senate leader Mitch McConnell, have made preventing increased disclosure of campaign donors a top priority. They have refused to act on the DISCLOSE Act that would require disclosure of donors to political spending by outside groups. They have added riders to must-pass bills prohibiting the Securities and Exchange Commission (SEC) from issuing a rule requiring disclosure of corporate political spending. They have blocked the Internal Revenue Service (IRS) from regulating the political activity of non-profits that do not have to disclose donors. They are also attempting to block a presidential executive order that would require federal contractors to disclose political spending. Furthermore, they have actually proposed weakening existing regulations on campaign spending, including allowing coordination between super PACs and candidates’ campaigns, as well as removing limits on how much political parties can spend in coordination with candidates’ campaigns. [1]

The Securities and Exchange Commission has failed to write rules for corporate disclosure of political activity, which it was required to do by the financial sector reforms after the 2008 crash. The head of the SEC has delayed work on these rules despite investors’ interest in having corporate political spending disclosed. The SEC’s failure to write these disclosure rules led Senator Elizabeth Warren to call on President Obama to fire Mary Jo White, the head of the SEC. [2]

The US Chamber of Commerce, a top source of dark money and a close ally of Congressional Republicans, is a strong opponent of any disclosure of corporate political spending, even voluntary disclosure. Nonetheless, nearly half of the S&P 500 largest corporations have voluntary disclosure policies. They see transparency as an antidote to possible negative repercussions and as a buffer against pressure from various groups and individuals to contribute to political activity. [3] The Chamber of Commerce apparently believes that secrecy is necessary to allow it to continue to wield power and influence with our elected officials.

A final indication of the desire for secrecy by wealthy campaign donors, as well as the lengths they will go to to maintain secrecy, was the drop-off in activity, particularly TV ads, by dark money groups when the Federal Election Commission’s (FEC) more stringent reporting requirements went into effect. Sixty days before the election, spending on all TV ads that mention a candidate must be reported to the FEC. Prior to that cut-off date, only ads that explicitly call for voting for or against a candidate have to be reported.

The non-profit called One Nation is the most dramatic example of avoidance of this expanded reporting. It is run by a former top aide to Republican Senate leader McConnell and through August it had spent over $23 million running TV ads in competitive Senate races – spending more than any other entity active in Senate races. However, since the Sept. 9th cut-off date for stricter FEC reporting, it has spent only $2 million despite the increasing competitiveness of the Senate races and shrinking time until Election Day. [4]

Overall, the drop-off in activity by dark money groups is reflected in their having paid for 42.5% of the TV ads by outside groups in competitive Senate races through 9/15, but only 11% of ads since then. In the tight Pennsylvania Senate race, dark money sponsorship of ads has dropped from 33% to 9%. In Ohio and Illinois, rates have dropped from 28% and 36%, respectively, to zero.

Reducing activity when it would have to be reported to the FEC helps preserve the secrecy of the groups’ activities. It also helps these non-profit groups claim to the IRS that political activity is not their primary activity, because activity reported to the FEC is clearly political. Some of these group are shifting their activity to on-line ads because these ads are exempt from FEC reporting due to a regulatory loophole.

Anonymous campaign spending is anathema to democracy. All campaign donors should be disclosed so voters can make informed decisions with full knowledge of who is trying to influence their votes and curry favor with candidates. Apparently, our elected officials who are blocking disclosure of donors believe that secrecy allows them to continue to reap the financial support that leads to their election or re-election and the power that comes with it. Given the secrecy, it is impossible for voters and even law enforcement to know what favors elected officials are doing for donors and whether outright corruption is occurring. However, you can be certain that the donors make sure the politicians know of their financial support.

I encourage you to contact your US Representative and Senators to urge them to pass the DISCLOSE Act and ensure full disclosure of all campaign donors.

[1]       Miller, J., 12/11/15, “GOP budget rider takes aim at campaign-finance rules,” The American Prospect (http://prospect.org/blog/checks/gop-budget-rider-takes-aim-campaign-finance-rules)

[2]       Prupis, N., 10/14/16, “Sen. Warren urges Obama to fire ‘unapologetic’ SEC chief for ‘brazen conduct,’” Common Dreams (http://www.commondreams.org/news/2016/10/14/sen-warren-urges-obama-fire-unapologetic-sec-chief-brazen-conduct)

[3]       Miller, J., 10/28/16, “More corporations embrace disclosure, despite conservative opposition,” The American Prospect (http://prospect.org/blog/checks/more-corporations-embrace-disclosure-despite-conservative-opposition)

[4]       Balcerzak, A., 10/19/16, “Dark money ads plunged when reporting requirement kicked in,” Center for Responsive Politics, OpenSecrets blog (https://www.opensecrets.org/news/2016/10/dark-money-ads-plunged-when-reporting-requirement-kicked-in/)

DRUG PRICE GOUGING CONTINUES

Valeant Pharmaceuticals is price gouging again. Having acquired the rights to the drug used to treat severe lead poisoning in 2013, it has increased the price from $950 to $27,000. There is no reason other than greed for this huge price increase on a decades-old drug. The cost is limiting availability of the drug to children with lead poisoning, including those from Flint, Michigan. [1] Lead poisoning can be life-threatening, but more often causes problems with growth and development, including anemia, neurological damage, and cognitive impairments.

Valeant is the corporation that acquired two heart drugs in 2014 and more than doubled the price of one and quintupled the price of the other. This was on top of a quintupling of their prices in 2013 by the previous owner (who had recently purchased the rights to the drugs). So, overall their prices have jumped to 10 and 25 times what they were in 2013.

Valeant has been one of the poster children for pharmaceutical greed. It has repeatedly purchased drug companies and then dramatically boosted the prices of their medicines. [2]

My previous post, Drug Prices: A Big Problem in Our Privatized Health Care System, provides more information on the problem of unrestrained drug price increases. It also gives 8 more examples of dramatic drug price increases where the only explanation is greed coupled with a lack of regulation.

Drug prices in the U.S. are not regulated or routinely negotiated as they are in other countries. Therefore, the pharmaceutical corporations, which often have monopolistic power, can increase drug prices more or less at will.

In September 2015, Senator Bernie Sanders filed a bill in the U.S. Senate to address price gouging by pharmaceutical corporations. The Prescription Drug Affordability Act would allow the Medicare prescription drug program to negotiate prices with drug companies, a practice that is currently banned by a 2003 law. It would also require the pharmaceutical corporations to report information about the factors affecting their drug pricing, such as research and development costs.

I encourage you to contact your U.S. Senators and Representative to urge them to support the Prescription Drug Affordability Act and efforts to control drug prices in general.

[1]       Prupis, N., 10/14/16, “As Flint suffers, big pharma slammed for lead poisoning drug price hike of 2,700%,” Common Dreams (http://www.commondreams.org/news/2016/10/14/flint-suffers-big-pharma-slammed-lead-poison-drug-price-hike-2700)

[2]       Silverman, E., 10/11/16, “Huge Valeant price hike on lead poisoning drug sparks anger,” Stat (https://www.statnews.com/pharmalot/2016/10/11/valeant-drug-prices-lead-poisoning/)

SOLVING THE PROBLEMS OF OUR PRIVATIZED HEALTH CARE SYSTEM

Clearly, the private market is not working well for health insurance or health care in the U.S. Costs are rapidly escalating in a system that is already the most expensive in the world, but that has mediocre to poor outcomes. Many private health insurance, pharmaceutical, and health care corporations are putting profits before patients.

Increasing premiums for health insurance and high drug prices (see my previous post on drug prices) are undermining efforts to control health care costs. The exorbitant and fast growing costs of U.S. health care are squeezing state and federal governments’ budgets, as well as employers and individuals. In many states’ budgets, increased costs for health care for poor families and seniors through Medicaid, as well as for employees and retirees, are eating up all the increases in revenue from economic growth – and then some. This means that without tax increases or other sources of increased revenue, states and the federal government are having to cut spending in other areas of their budgets.

Increasing costs for employees’ health insurance are hurting employers’ competitiveness with foreign companies and reducing their profitability. Some employers have dropped health insurance as an employee benefit, while others have increased the portion of health insurance premiums employees must pay or are offering insurance plans with less comprehensive coverage as well as higher deductibles and co-pays. As fewer employees get health insurance through their employers, the number of people in subsidized government health programs increases, further increasing costs for governments.

Individuals are not getting the health care they need because insurance is not making it accessible and affordable. Many people are suffering financial hardship and some file for bankruptcy because of the costs of health care.

The clear solution to these problems is to provide everyone access to what’s referred to as a “public option” or a Medicare-for-all type health insurance plan. This would be a government run insurance pool, which is what Medicare is for seniors. When the Affordable Care Act (ACA) was being considered by Congress, a public option was initially included. In other words, a government run insurance plan would have been offered by each of the ACA’s state-level health insurance marketplaces (aka exchanges) where people without health insurance would buy coverage. A public option was vehemently opposed by the private insurers and was eventually dropped from the ACA legislation. They opposed it because they didn’t want the competition from a Medicare-type program that would be likely to expose their inefficiencies – despite, of course, these private corporations’ dedication to free markets and competition whenever any government regulation is proposed.

With problems in our privatized health care system becoming increasingly apparent, including a public option in the ACA exchanges is gaining increased support. [1] With some private health insurers abandoning the exchanges, it is projected that 7 states will have only one private insurer offering coverage. [2] In these state, having a public health insurance plan as an option would mean that there was still competition. This would serve as a check on the sole private insurer, ensuring that its coverage and pricing remained competitive and that it didn’t exploit a monopoly situation.

More broadly, there have been numerous proposals over many years to allow anyone over 50 or 55 years old to “buy into” Medicare. In other words, although they hadn’t yet reached the normal Medicare eligibility age of 65, these individuals would be allowed to pay an appropriate premium to buy health insurance as part of the Medicare insurance pool.

Senator Sanders, in his presidential campaign, highlighted his proposal for Medicare-for-All. This proposal would allow anyone to pay an appropriate premium to buy health insurance as part of a large, Medicare-like, government insurance pool. This proposal received broad and often enthusiastic support. [3]

A public option in the ACA exchanges or a Medicare-for-All option for everyone is the only way to realistically address the shortcomings of our privatized system of health care. By providing real competition for the private insurers, this would ensure the quality and affordability of health insurance. By giving the public option or Medicare-for-All insurance pools the right to negotiate with the pharmaceutical corporations over drug prices, prescription drug costs could be brought under control. (The Medicare drug benefit should also be changed to allow Medicare to negotiate drug prices.)

If we want quality and affordability in our health care system, a public option or Medicare-for-All program is essential as a check on the private corporations that currently dominate our health care system. Currently, a proposal in the U.S. Senate would add a public option to the ACA exchanges. It already has the support of over 30 Senators, including Senators Bernie Sanders (VT), Elizabeth Warren (MA), Jeff Merkley (OR), Charles Schumer (NY), Patty Murray (WA), and Dick Durbin (IL).

I encourage you to contact your U.S. Senators and other elected officials to tell them you support a public option under the Affordable Care Act specifically and a Medicare-for-All program in general. The for-profit health insurance, pharmaceutical, and health care corporations will fight tooth and nail to stop this competition. They will make huge campaign and lobbying expenditures to try to maintain their ability to manipulate our health care system to generate large profits and exorbitant executive compensation. Only a huge outcry and sustained pressure from the grassroots – from we the people – will get our policy makers to enact the significant reforms needed to create a health care system that delivers affordable, high quality care for all.

[1]       Willies, E., 8/28/16, “Recent headlines signal need for single-payer Medicare for All – now,” Daily Kos (http://www.dailykos.com/story/2016/8/28/1563720/-Recent-headlines-signal-need-for-single-payer-Medicare-for-All-now)

[2]       Alonso-Zaldivar, R., 8/29/16, “Challenges mount for health law,” The Boston Globe from the Associated Press

[3]       Nichols, J., 9/16/16, “Make the public option a central focus of the 2016 campaign,” The Nation (https://www.thenation.com/article/make-the-public-option-a-central-focus-of-the-2016-campaign/)

COUNTERACTING THE LOW-WAGE BUSINESS MODEL OF PARASITIC CORPORATIONS

The low-wage business model of Walmart and McDonald’s, for example, is a choice, both of corporations and of our policy makers. In the restaurant industry, there are restaurants in Seattle and San Francisco that are paying their servers $13 per hour and are doing fine. Costco successfully competes with Walmart and In-N-Out-Burger with McDonald’s even though the former eschew the low-wage business model of their competitor. [1]

Economists have a label for the behavior of corporations that rely on a low-wage business model where employees need public assistance to survive: it’s called “free riding.” It’s a free ride for the employer, as public assistance programs are subsidizing their payrolls. It’s anything but a free ride for taxpayers and the workers.

In the fast food industry, over half of employees are enrolled in at least one public assistance program. The estimated cost to taxpayers is $76 billion per year. Ironically, the taxes paid by high-wage businesses and their employees, including those competing with the likes of McDonald’s and Walmart, help to pay for the public benefits that subsidize the low wages of these parasitic corporations. Until recently, McDonald’s actually assisted its employees in signing up for public benefits – to the tune of $1.2 billion per year. Walmart employees are estimated to receive $6 billion per year in public assistance. By the way, in 2015 McDonald’s profit was $4.53 billion and Walmart’s was $130.2 billion.

Economic theory states that workers get paid what they are worth. Clearly, this is an over simplification given the variations in pay that exist among employers within an industry, such as within the fast food or restaurant industries. It is more accurate to say that workers get paid what they negotiate, and that some employers are friendlier negotiators than others. At the top end of the pay spectrum, some CEOs negotiate to get paid far more than they’re worth, while many ordinary workers get paid far less than they are worth because they don’t have the power to negotiate better pay.

The U.S. labor market has a dramatic imbalance of power. Unless a worker is a member of a union, he or she has little or no power to negotiate with an employer. The rate of union membership has fallen from roughly 1 in 3 private sector workers in 1979 to only about 1 in 10 workers today. Unions negotiate higher wages and benefits for union members and also, indirectly, for nonunion workers. This occurs for several reasons: union contracts set wage standards across whole industries and strong unions prompt employers to keep wages high in order to reduce turnover and discourage unionizing at non-union employers. The decline in union membership has resulted in reduced wages for both union and nonunion workers. It is estimated that this decline is costing non-union workers $133 billion a year in lost wages. [2]

Individual workers lack bargaining power because there are relatively few employers and job openings but lots of workers looking for a job. Furthermore, a worker has an immediate need for income to pay for food and shelter, while most employers can leave a job unfilled for a while without suffering any great hardship. They can take the time to search for someone willing to take the job at whatever pay they offer.

Since 1980, employers have aggressively exploited this imbalance of power, while our federal government has stood aside and, in many ways, supported them in doing so. As a result, $1 trillion per year that used to go to workers now goes to executives and profits. Workers’ rewards for their contributions to our economic output (gross domestic product [GDP]) has dropped from 50% of GDP to 43%.

There is truth to the argument that in very competitive, price-sensitive industries producers have to squeeze workers’ wages to remain in business. However, this is where the role of government and public policy is critical. If every producer in the industry is required to pay a minimum wage, then a floor is set and all producers are on a level playing field, but with workers getting better pay. Without a good minimum wage, the competition drives wages down to the point where workers are suffering and public subsidies are required.

Public policies and laws, as well as collective action (such as unions negotiating on workers’ behalf), regulate the marketplace and affect the balance of power among competing economic interests. A market economy cannot operate effectively without the rules put in place by policies and laws. They are not antithetical to capitalism; rather, they are essential for markets to function.

Rules are necessary to prevent cheating, such as regulation of weights and measures of goods sold, and to protect the health and safety of consumers and workers. Laws and court systems enforce contracts between parties for the exchange of goods and services for money. Rules are needed to prevent companies from gaining an unfair advantage by being a free rider or externalizing costs (i.e., shifting the costs to others such as by polluting public air and water or by paying such low wages that employees need taxpayer-funded support).

Our low-wage, parasite economy is a collective choice, made by corporations but allowed and abetted – and subsidized – by public polices enacted by elected officials. We, as voters, can change this by electing representatives who support:

  • Increasing the minimum wage,
  • Enforcing and strengthening laws that allow workers to bargain collectively through unions, and
  • Stopping the free riding and externalizing of costs by large, profitable corporations.

Increasing the minimum wage and strengthening unions are two key policies that would strengthen our economy and the middle class by reducing the prevalence of the low-wage business model of parasitic corporations. I encourage you to ask candidates where they stand on these issues and to vote for ones who support fair wages and bargaining power for workers.

[1]       Hanauer, N., Summer 2016, “Confronting the parasite economy,” The American Prospect

[2]       Rosenfeld, J., Denice, P., & Laird, J., 8/30/16, “Union decline lowers wages for nonunion workers,” Economic Policy Institute (http://www.epi.org/publication/union-decline-lowers-wages-of-nonunion-workers-the-overlooked-reason-why-wages-are-stuck-and-inequality-is-growing/)

BLUNTING THE IMPACT OF BIG AND SECRET MONEY IN OUR ELECTIONS

Big money and secret money in our election campaigns undermines democracy. They can prevent voters from knowing who, with what interests, is trying to influence their votes. They can also unduly influence the decisions of our elected officials and lead to outright corruption. (See my previous posts here and here for more detail.)

There are two main strategies for blunting the impact of big money and secret money in our elections:

  • Disclosure of campaign contributions and spending in a complete and timely manner, and
  • Matching of voters’ small campaign contributions with public funding, coupled with strict limits on who can contribute and how much can be contributed.

Both of these strategies have been reviewed and approved by the current Supreme Court.

Three-quarters of Americans, including three-quarters of those in each political party, support disclosure of campaign spending. A number of states, including California, Delaware, Maine, Massachusetts, and Montana have strengthened disclosure requirements in the aftermath of the Supreme Court’s Citizens United decision in 2010. There are proposals in Congress to enhance disclosure for federal campaigns.

California requires any group spending more than $50,000 in a year on political activities to disclose all donors giving over $1,000. In addition, it requires that political advertisements include the names of top funders. The success of these measures is reflected in the remarkably small increase in secret (aka dark) money in California elections. [1] In Montana, a bipartisan coalition enacted strong transparency laws for campaign spending after large amounts of out-of-state dark money were spent in their elections.

A Brennan Center report [2] identifies key provisions of an effective state campaign spending disclosure law:

  • Require disclosure of all donors by all groups that spend any significant amount of money in campaigns;
  • Require disclosure by organizations that provide substantial funding to groups making significant campaign expenditures;
  • Require disclosure for all political advertising spending in a specified window before an election (e.g., a few months to a year), including issue ads (that don’t explicitly advocate for a vote for or against a candidate);
  • Require up-to-date disclosure frequently, including just before an election and in advertisements themselves;
  • Require disclosure of the individual(s) controlling any group making significant campaign expenditures; and
  • Make penalties for violations substantial but proportional to the severity of the violation.

Disclosure helps voters know who is trying to influence their votes and the election, and lets them take into account the interests of the spenders, although it does not directly affect the funding of campaigns.

Matching voters’ small campaign contributions with public funding makes small contributions more valuable to candidates. Given that the Supreme Court’s decisions (e.g., Citizens United and McCutcheon) do not allow laws limiting campaign contributions outright, this alternative amplifies the voices and influence of small donors. It can also require candidates to voluntarily limit campaign spending and the size of contributions in exchange for the public matching funds.

New York City has had a campaign financing system in place since 1988 that matches small donations with public funding. Currently, it offers a six-to-one match on donations up to $175 by city residents. An ordinary citizens making a donation of $50 or $100 now has the clout of a much larger contribution – $350 or $700, respectively – due to matching public funds. As a result, more people are donating, because their small contributions and voices are amplified. And this leads to higher voter turnout on Election Day. [3]

Candidates’ participation in this contribution matching system is voluntary. In exchange for the public matching funds, candidates agree to abide by limits on overall spending and the size of individual contributions. These limits vary with the office being sought, from Mayor to City Council. In 2013, 92% of NYC’s candidates participated in the public matching funds system. For the candidates who did participate, 61% of their funding came from small donors. Conversely, for the candidates who did not participate, 53% of their funding came from large donors of $1,000 or more. [4]

The system has changed candidates’ attitudes and approach to the voting public. It has muted the importance of large contributions. It has motivated more citizens to run for office and made races more competitive. Candidates spend less time fundraising and can, therefore, be more engaged with and responsive to their constituents.

The states of Maine, Connecticut, and Arizona have similar contribution matching systems in place. Washington, D.C., is considering implementing such a system. There are proposals in Congress that would create a similar system for our national elections.

I encourage you to contact your elected officials and ask them to take action now to blunt the impact of big money and secret money in our elections. Strengthening disclosure of the sources of funding for campaign spending is one step to take. Another is to enact a system for matching voters’ small contributions to candidates with public funding. Both of these would make our elections more democratic and can be done now within the constraints of the Supreme Court’s rulings.

[1]       Lee, C., & Norden, L., 6/25/16, “The secret power behind local elections,” The New York Times

[2]       Lee, C., Valde, K., Brickner, B.T., & Keith, D., 2016, “Secret spending in the states,” The Brennan Center for Justice, New York University School of Law (https://www.brennancenter.org/sites/default/files/analysis/Secret_Spending_in_the_States.pdf)

[3]       Migally, A., & Liss, S., 2010, “Small donor matching funds: The NYC election experience,” The Brennan Center for Justice (http://www.brennancenter.org/publication/small-donor-matching-funds-nyc-election-experience)

[4]       McElwee, S., 6/23/16, “D.C.’s white donor class: Outsized influence in a diverse city,” Demos (http://www.demos.org/publication/dc%E2%80%99s-white-donor-class-outsized-influence-diverse-city)

MONOPOLY POWER AND HOW TO STOP IT

Monopolistic corporate power is a big problem in the US. Ever since the Reagan presidency in the 1980s, our government has effectively given up on enforcement of anti-trust (i.e., anti-monopoly) laws. Our anti-trust regulators have ignored evidence that the monopolistic power of huge corporations results in higher prices, lower wages, job losses, declining entrepreneurship, and increased inequality.

The regulators, the Department of Justice (DOJ) and Federal Trade Commission (FTC), rarely block mergers or acquisitions. Sometimes they require corporations to make changes meant to address the negative consequences of huge size and significant economic (and potentially political) power. However, the changes corporations promise to make are often not fully implemented or are ineffective in ameliorating negative consequences, especially in the long-term. [1]

The DOJ and FTC have been compromised by decades of appointments of officials who came through the revolving door from the corporate sector and don’t believe that corporate power is a problem. A similar situation exists with the Securities and Exchange Commission (SEC). Its lack of effective oversight of Wall Street and the financial industry led to the 2008 economic collapse, as well as a host of other harmful consequences.

When the regulatory agencies are staffed with people from the industries they are supposed to regulate, weak standards and lackadaisical enforcement (including a lack of criminal prosecution) tend to be the result. This aspect of crony capitalism is referred to as the “cognitive capture” of regulatory agencies by the industries they are supposed to regulate. It occurs when the regulators share the mindset of and empathize with those they are supposed to regulate. [2] As Senator Elizabeth has said, “Personnel is policy.”

Crony capitalism has led to concentrated corporate power in our economy, higher corporate profits and CEO pay, increased economic inequality, destruction of the middle class, corruption of our elections, and distortion of public policies. A few months ago, the Senate Judiciary Committee held its first hearing on anti-trust laws and efforts to rein in monopolistic power in more than three years. Recently, the Obama administration has gotten noticeably more aggressive about challenging merger deals, but only after years of inaction. These are baby steps in the right direction, but there is a long, long way to go given how bad the situation has grown over the past 35 years.

Americans strongly agree (83%) that “the rules of the economy matter and the top 1 percent have used their influence to … their advantage.” Two-thirds of the public believe that corporations pay too little in taxes and three-quarters want to close tax loopholes that let speculators pay lower taxes on their profits than working people pay on their earnings. Eighty-six percent believe corporations have too much political power and that increased enforcement of laws and regulations is needed. [3] Our elected officials need to stop favoring corporate interests and start sticking up for working Americans and our democracy.

As voters, we need to demand that our elected officials support vigorous enforcement of anti-trust laws and effective regulation of corporate America. The federal government needs to use its powers under the Sherman Anti-trust Act to stop corporate power from growing, given that it is harming our economy and our democracy. Our President needs to appoint strong, independent regulators. Congress and state legislatures need to pass laws and budgets that reflect the interests, values, and priorities of the people, not the corporations and wealthy elites.

The good news is that the current presidential campaign has brought the issue of corporate power into the spotlight. For the first time since 1988, the Democratic Party platform contains language calling for stronger enforcement of anti-trust laws and more market place competition in our economy. [4] A recent report from the White House calls for promoting competition in our economy through stronger enforcement of anti-trust laws and pro-consumer policies and regulations. [5]

In this election year, I encourage you to examine federal and state candidates’ positions on these issues and to vote for candidates who support:

  • Strengthening enforcement of anti-trust (i.e., anti-monopoly) laws in order to increase market place competition,
  • Improving the effectiveness of regulations, and
  • Reducing the power of corporations in our economy, our elections, and in policy making.

This is essential if our democracy is to be of, by, and for the people, instead of controlled by and run for the benefit of large corporations and their wealthy executives and investors.

[1]       Jamrisko, M., & McLaughlin, D., 7/18/16, “Democrats imitate trust-busting Teddy in own populist appeal,” Bloomberg (http://www.bloomberg.com/politics/articles/2016-07-18/democrats-imitate-trust-busting-teddy-in-own-populist-appeal?cmpid=GP.HP)

[2]       Lehmann, C., May 2016, “In the grip of greed,” In These Times (https://www.highbeam.com/doc/1P3-4034979561.html)

[3]       Weissman, R., 4/11/16, “Americans agree: It’s corporate power that’s in our way,” Common Dreams (http://www.commondreams.org/views/2016/04/11/americans-agree-its-corporate-power-thats-our-way)

[4]       Jamrisko, M., & McLaughlin, D., 7/18/16, see above

[5]       Council of Economic Advisers, April 2016, “Benefits of competition and indicators of market power,” The White House (https://www.whitehouse.gov/sites/default/files/page/files/20160414_cea_competition_issue_brief.pdf)

EFFECTS OF MONOPOLY POWER

My last post described the efforts of the big food and agricultural corporations to block the labeling of food that contains genetically modified ingredients. Here are some other examples of the effects of the monopolistic power of large corporations, which is allowed and abetted by crony capitalism. (See my Crony Capitalism = Monopoly Power post for more information.)

Americans pay more for Internet service than do residents of any other developed country and typically get lower speed service. This is largely because for 80% of us our internet service provider (ISP) has a monopoly, i.e., we have no alternative choice for our ISP. This lack of competition allows ISPs to charge monopoly prices for low quality service.

Internet service in the U.S. costs three-and-a-half times more than it does in France, for example, where the typical customer can choose among seven providers. [1] In the U.S., there are just four giant telecom corporations: AT&T (includes DirecTV and U-verse services), Comcast, Charter Communications (includes Time Warner and Bright House), and Dish. They serve focused geographic areas that limit the competition among them and with the next three providers (Verizon, Cox, and Cablevision) who are roughly a third the size of the smallest of the four giants.

The giant U.S. telecom corporations have succeeded in getting 21 states to pass laws barring municipalities from creating or expanding their own, public Internet access, which typically provides cheaper and higher speed service than the commercial providers. In February, 2015, the Federal Communications Commission (FCC) voted 3 to 2 overrule the state laws that were preventing Chattanooga, Tennessee, and Wilson, North Carolina, from expanding their municipal networks. This occurred soon after the White House’s release of a report on Community-Based Broadband Solutions that explains why escaping from the monopoly power of commercial ISPs is so important. It noted that America’s internet service is too slow, too expensive, and too unreliable to support a 21st century economy, especially in rural areas. [2] Hopefully, the FCC ruling and the White House report will lead to more competition and better service in the ISP business, but you can bet that the big, corporate ISPs will keep fighting in the states, in Congress, at the FCC, and in the courts to maintain their monopolistic power.

Due to limited competition in the airline business, prices are rising despite falling costs. Domestic airfares rose 2.5% over the past year, and are now at their highest levels since the government began tracking them in 1995. Meanwhile fuel prices, the largest single cost for the airlines, have plummeted. This can happen only because there are just four major airlines in the U.S. now (i.e., American, Delta, United, and Southwest) and many airports are served by only one or two. Ten years ago, there were nine major airlines, but the lack of enforcement of anti-trust laws have allowed mergers that have reduced competition. [3]

Similarly, food prices have been rising faster than inflation, while crop prices are now at a six-year low. Here again, the giant corporations that process food have the market power to raise prices due to limited competition. Four food companies control 82% of beef packing, 85% of soybean processing, 63% of pork packing, and 53% of chicken processing.

Because our big banks and financial corporations face limited competition, the interest rates we pay on home mortgages, college loans, and credit cards are higher than they would be if there were more competition. As recently as 2000, America’s six largest banks (JPMorgan Chase, Bank of America, Wells Fargo, Citigroup, Goldman Sachs, and Morgan Stanley) held just 25% of all U.S. banking assets; they now hold 44%. We need to break up these giant financial corporations to increase competition and to protect our economy from the risks that led to the 2008 financial collapse.

Finally, health insurance is costing us more each year, and co-payments and deductibles are rising, because insurers are consolidating into bigger and bigger corporations. There are now only three major health insurers (i.e., Aetna, Anthem, and UnitedHealth) and due to the lack of competition, they have the power to raise prices. They say that mergers make their companies more efficient, but they really just give them more power to charge more and increase profits. This is borne out by the fact that their stock prices are skyrocketing and Standard & Poor’s index of health insurers’ stock prices recently hit its highest level in more than twenty years.

These over-priced goods and services produce a hidden upward redistribution of income from consumers to large corporations and their executives and big shareholders. These monopolistic corporations dominate our telecommunications, banking, air travel, food, health insurance, and other industries. [4] Crony capitalism has allowed the mergers and acquisitions that have built these giant corporations and produces the weak regulation that allows them to wield extensive power in the market place.

As long as the big corporations, their top executives, and wealthy shareholders have the political power to do so, they’ll keep redistributing as much of the nation’s income as they can upward to themselves. We, the American voters, need to assert our political power and stop monopolistic market practices and collusion, break up the giant corporate monopolies, and put an end to the rigging of the American economy.

In this election year, I encourage you to examine candidates’ positions on these issues and vote for candidates who support strengthening enforcement of anti-trust (i.e., anti-monopoly) laws, increasing market place competition, and reducing the power of corporations in our economy and elections.

I’ll share more examples of how and where corporate power and crony capitalism are rigging our economy in subsequent posts.

[1]       Reich, R., 11/1/15, “The Rigging of the American Market” (http://robertreich.org/post/132363519655)

[2]       Estes, A.C., 1/14/15, “Obama’s plan to loosen Comcast’s stranglehold on your Internet,” Gizmodo (http://gizmodo.com/obamas-plan-to-loosen-comcasts-stranglehold-on-your-int-1679463766)

[3]       Reich, R., 11/1/15, see above

[4]       Reich, R., 11/1/15, see above

ACT NOW: CORPORATE POWER BLOCKING GMO FOOD LABELING

One reason large corporations succeed in influencing policies is that they are relentless. If at first they don’t succeed, they try, try again and again and again. They can do so because they have:

  • Lots of money and other resources, such as top notch lawyers, and
  • As much time as it takes, given they are around forever and policy makers, i.e., elected and appointed public officials, change over time.

Corporations pursue favorable policies in multiple venues and at the federal, state, and local levels. They work to get the policies they want from legislatures and Congress, from regulators in the executive branch, and through court cases. They lobby, they contribute to candidates, they move people back and forth between being their employees and holding positions in government, and they engage in direct spending on campaigns, often through “dark money” groups so they can remain anonymous.

A perfect and current example of this is the battle over labeling food that contains genetically modified (GM) ingredients from genetically modified organisms (GMO) such as corn, wheat, soybeans, or animals.

The U.S. Food and Drug Administration (FDA) requires detailed food labeling that identifies ingredients. However, the big corporations of the food and agriculture industry have blocked any FDA requirement that food labels indicate the use of GMO ingredients. There have been bills on both sides of this issue in Congress, but they have gone nowhere – until now. But first a little background.

Various polls indicate that 70% to 93% of Americans want GMO labels. Proponents argue that consumers have a right to know what’s in their food so they can make informed decisions about what they want to eat – which is the precise reason for the FDA requirement to list ingredients. They do not argue that one should or shouldn’t eat GMO-containing food, but rather that one should have the information to make such a choice. By the way, over 60 other countries have GMO labeling laws.

Given the lack of progress on GMO labeling at the federal level, consumers who want to know if their food contains GMOs have turned their attention to requiring labeling through state laws. Ballot questions on GMO labeling were presented to voters in California in 2012, Washington State in 2013, and Colorado and Oregon in 2014. All were defeated by aggressive, expensive campaigns against them by the big food and agriculture corporations.

In California, opponents spent $46 million while proponents spent $9 million. Monsanto alone spent $8 million while DuPont, PepsiCo, Bayer, Kraft Foods, Coca-Cola, Nestle, ConAgra Foods, and General Mills each contributed over a million dollars. (Monsanto’s stakes in the fight are huge: its GM seeds account for 80% of the corn and 93% of the soybeans grown in the U.S.) Aggressive advertising by the opponents, including the claim that GMO labeling would lead to increased food prices, was successful in undermining support for the ballot questions. Polls showed the ballot question winning by 36% in mid-September and 8% to 9% in early October, but it eventually lost 51% to 49% on Election Day in November. [1]

The Oregon vote was even closer. After polls showed it winning by 65% in June and 5% to 8% in early October, it lost by 837 votes out of 1.5 million cast (0.06%) on Election Day. Twenty-one million dollars was spent in opposition to it and $11 million in support. Opposition spending included $6 million from Monsanto, $4.5 million from DuPont, and over $1 million each from PepsiCo and Coca-Cola. [2]

In addition to ballot questions, roughly 100 bills on GMO labeling have been introduced in state legislatures in at least 29 states. Alaska, Connecticut, Maine, and Vermont have passed labeling laws despite industry efforts to defeat them. As is not unusual in corporations’ relentless efforts to win policy battles, the industry is threatening to file court challenges to these laws. [3]

The Vermont GMO labeling law just went into effect on July 1, so the food and agriculture industry is making a big push to get federal legislation passed to preempt it. Ostensibly, their goal is to have one national standard rather than 50 individual state standards that would be hard to comply with and potentially confusing to consumers. However, the compromise legislation in Congress seems to indicate that they have other goals.

The bipartisan bill that the U.S. Senate Agriculture Committee announced last week would:

  • Ban states from requiring GMO labeling (preempting Vermont’s strong law),
  • Exempt beef, pork, poultry, and eggs from GMO labeling,
  • Exempt foods with meat as the majority ingredient from GMO labeling,
  • Narrowly define genetic engineering to exclude new techniques, and
  • Allow labeling that wouldn’t be clear to consumers, such as a symbol or a link to GMO information (e.g., a phone number, a website, or a QR code for scanning with a smart phone), as opposed to a clear, text label such as “Contains GMO ingredients.” [4]

Tellingly, the bill would not impose any penalties for violating the labeling requirement! The food and agriculture industry is supporting this compromise, of course, including Monsanto, General Mills, Campbell Soup, Kellogg, ConAgra Foods, and Mars corporations, as well as industry groups such as the American Soybean Association, the National Grain and Feed Association, and the Grocery Manufacturers Association.

I urge you to contact your U.S. Senators NOW, as they may vote on this bill the week of July 5. (One of the strategies used by big corporations and their allies to win policy battles is to rush bills through the legislative process so the public and opponents don’t have time to mount opposition.) Let them know what you think of this compromise legislation. Let them know if you’d like your food clearly labeled as to whether it contains GMO ingredients, thereby allowing you to make informed consumer decisions about what you eat.

You can find contact information for your US Senators at http://www.senate.gov/general/contact_information/senators_cfm.cfm.

[1]       Ballotpedia, “California Proposition 37, Mandatory Labeling of Genetically Engineered Food (2012)” (https://ballotpedia.org/California_Proposition_37,_Mandatory_Labeling_of_Genetically_Engineered_Food_(2012))

[2]       Ballotpedia, “Oregon Mandatory Labeling of GMOs Initiative, Measure 92 (2014)” (https://ballotpedia.org/Oregon_Mandatory_Labeling_of_GMOs_Initiative,_Measure_92_(2014))

[3]       The Atlantic, May 2014, “Want to know if your food is genetically modified?” (http://www.theatlantic.com/politics/archive/2014/05/want-to-know-if-your-food-is-genetically-modified/370812/)

[4]       Wasson, E., 6/26/16, “Bipartisan deal struck on GMO labeling,” The Boston Globe from Bloomberg News

DEMOCRACY IS AWAKENING, BUT NOT IN THE CORPORATE MEDIA

One of the goals of this blog is to provide information on policy and politics that the mainstream corporate media fails to provide. One of the most blatant examples of news ignored by the corporate media is last month’s Democracy Awakening protests.

The Democracy Awakening protests were undertaken to highlight the issues of money in politics and abridgements of voting rights. Starting on April 2 under the banner of Democracy Spring (http://www.democracyspring.org/), over 100 people marched the 140 miles from the Liberty Bell in Philadelphia, where our democracy was founded, to Washington, D.C. In conjunction with Democracy Awakening (http://democracyawakening.org/), a week of protests, meetings with Congress men and women, and civil disobedience in Washington followed. By the end of the week, over 1,200 people had been arrested for civil disobedience, the largest such protests in decades.

The coverage of any of this in the mainstream corporate media was minimal at best. The most covered element of it was that Ben and Jerry (of Ben and Jerry’s ice cream) were arrested for civil disobedience. This warranted one story each on CBS, in the New York Times, and in the Boston Globe. This was the only coverage that showed up in a search of their websites, other than a letter to the editor in the Times. NBC had one story and ABC had three.

Democracy Awakening is a broad coalition of over 100 groups, including organizations representing campaign finance reform efforts, labor, environmental issues, students, and the racial justice and civil rights movements. They have coalesced with a shared belief that progress on the broad range of policy issues they care about will not occur until we combat attacks on voting rights and the corruption of our elections and democracy by big money.

The reason for civil disobedience at the Capitol was that Congress has refused to act on the issues of voting rights and campaign finance despite the overwhelming support of the American public across party affiliation, even including many in the “Tea Party.” Presidents Obama and Clinton made campaign promises to address these issues but did not follow through.

This lack of action by Congress is not because there aren’t bills that would address these issues. Ninety members of the House have signed a letter demanding action on four bills and a resolution that reflect the Democracy Awakening agenda:

  1. HR 12: Makes it easier for citizens to vote and increases the verifiability of voting results. It would require on-line and same-day voter registration, along with early voting and voting by mail. It would require voter-verified paper ballots and audits of voting results.
  2. HR 2694: Makes voter registration automatic.
  3. HR 2867: Restores some of the protections of the Voting Rights Act that the Supreme Court voided in 2013.
  4. HR 20: Provides incentives for small contributions to candidates for Congress and takes steps to reduce the influence of big money in our elections. It establishes a 50% tax credit for small contributions, bans the joint committee fundraising that has led to contributors giving checks for hundreds of thousands of dollars to candidates, and improves disclosure by requiring candidates’ financial reports to be electronic.
  5. Resolution 22: Proposes a constitutional amendment that would reverse the Supreme Court’s ruling in Citizens United and other cases that have allowed unlimited campaign spending by wealthy individuals and corporations, and have also given corporations and other organizations rights under the Bill of Rights that were meant for human beings.

Democracy Awakening is part of a broad effort to mobilize voters and increase participation in our elections. In the 2014 Congressional elections, barely a third of eligible voters voted. The current paralysis in Washington, hyper-partisanship, and negative campaign ads have left voters so disillusioned and cynical that they see no point in participating in our democracy and, therefore, disengage.

We need to re-awaken participation in our democracy. Without informed and engaged citizens, and without high levels of participation, our democracy will not be of, by, and for the people, because special interests will take control and bend public policy to their benefit.

I encourage you to learn more about the Democracy Awakening effort and to sign-up to be informed about this effort at its website: http://democracyawakening.org/. I also encourage you to “Follow” this blog (if you haven’t already) and to sign-up for Bill Moyers’ newsletter, where much of the information for this post came from (http://billmoyers.com/; click on “Newsletter” and enter your email address to subscribe).

FIXING ECONOMIC AND POLITICAL INEQUALITY

Since President Teddy Roosevelt took on the mantle of trust buster at the turn of the 20th century, government regulation through anti-trust laws and other regulatory mechanisms has been recognized as the only way to counterbalance corporate power and individual wealth.

However, since the 1980s, the corporate and financial elite of the country has increasingly exercised influence and control over our federal and state governments and their policy making and regulatory functions. This has undermined government as the counterbalance to the power of the elite. The tools they use to gain influence and control are campaign contributions and spending, lobbying, and the revolving door.

As a result of their economic and political power, the rules of our economy have been shifted to favor wealthy corporations and individuals. This has undermined the middle class and led to growing inequality in incomes, wealth, and opportunity. [1] (See my post Economic Inequality is Due to Shifts in Political and Marketplace Power for more detail.)

A return to the policies of the 1950s and 1960s would go a long way toward stopping runaway inequality and beginning to rebuild the middle class. A return to these policies is clearly not radical, although some may argue that it would be based on the current landscape of politics and power. Key elements of the post-World War II policies that led to broadly beneficial economic growth and decreasing inequality were:

  • A truly progressive tax system;
  • Workers with bargaining power, primarily through unions, who were better able to balance the power and interests of employers;
  • Financial regulation that prevented speculation, manipulation, and international or offshore transactions that hurt or destabilized our economy; and
  • Fair corporate and estate taxes that required payment of a reasonable share of taxes by these entities.

In addition, we need to create new policies to address newly emergent factors that have shifted power in our economy and politics:

  • Full disclosure and stricter regulation of campaign contributions and spending;
  • Trade agreements that actually benefit US workers and our economy; and
  • Strict regulation and disclosure of lobbying and the movement of personnel through the revolving door between private sector jobs and government positions.

Institution of these seven policies would enhance economic equality and bolster the middle class. They would also reverse growing political inequality that is undermining our democracy. This would shift power away from wealthy individuals and corporations and back to average Americans.

I encourage you to contact your representatives in Congress and/or in your state government to let them know what you think needs to be done to address the economic and political inequality in the U.S. today.

[1]       Kuttner, R., 1/14/16, “The new inequality debate,” The American Prospect (http://prospect.org/article/new-inequality-debate-0)

THE YEAR-END SPENDING BILL: A BIG WIN FOR SPECIAL INTERESTS, WHILE KEEPING GOVERNMENT OPERATING

The year-end spending bill that Congress passed on December 18 was loaded with riders that had nothing to do with the budget. For example, it lifted the 40-year-old ban on crude oil exports from the US, just as the climate summit in Paris concluded that emissions from burning fossil fuels must be lowered to address climate warming. The bill continued a ban on federal funding for public health studies of the causes of gun violence and continued to allow people on the no-fly list to buy guns. It repealed the 2008 requirement that meat sold in the US has to identify its country of origin.

This spending bill also included two provisions that block the disclosure of the sources of political spending. The Internal Revenue Service is prohibited from requiring the disclosure of political spending by and donors to not-for-profit entities that engage in political activity. And the Securities and Exchange Commission is prohibited from requiring the disclosure of political spending by corporations. [1]

The bill also had pork barrel spending inserted by individual members of Congress. For example, a provision for Senator Cochran of Mississippi directs the Coast Guard to build a $640 million ship in his home state, but the Coast Guard says the ship isn’t need. Similarly, Maine Senator Collins got $1 billion in the budget for a destroyer that will probably be built in Maine, but the Navy says the ship isn’t needed. [2]

The good news is that the year-end spending bill keeps our government open and operating and funds important programs for middle and low-income Americans. Furthermore, many even more odious riders were kept out of the bill. As I noted in my last post, the good news about the separate year-end tax bill is that 40% of its provisions actually benefit regular, working Americans. This percentage is almost double what it has been in the past. Concerted activism by progressive politicians, leaders, and regular Americans made some good things happen in both the year-end spending bill and the year-end tax bill.

The bad news is that, as Moyers and Winship write, “There is an unwritten rule in Congress that before you do even a little for the working class you must do a lot for the donor class.” [3] These bills do a lot for the donor class – wealthy individuals and the corporations they run. As Moyers writes, “Candidates ask citizens for their votes, then go to Washington to do the bidding of their donors,” including cutting their taxes. So, we now have a wealthy donor class that gets high levels of representation and low levels of taxation. [4]

So, keep an eye on and be in touch with your elected officials. Let them know you are watching. Let them know that you want them to serve the interests of regular, working Americans, not those of the donor class of economic elites and the corporations they run. Make this a New Year’s resolution, because your activism as an informed citizen in a democracy can make a difference. Indeed, it has to, or our democracy, of, by, and for the people, will become a plutocracy run by and for the wealthy.

[1]       Moyers, B., & Winship, M., 12/17/15, “Lurking Within That Ominous, Omnibus Spending Bill,” Moyers & Company (http://billmoyers.com/story/lurking-within-that-ominous-omnibus-spending-bill/)

[2]       Moyers, B., 12/22/15, “The Plutocrats Are Winning. Don’t Let Them!” Common Dreams (http://www.commondreams.org/views/2015/12/22/plutocrats-are-winning-dont-let-them)

[3]       Moyers, B., & Winship, M., 12/17/15, see above

[4]       Moyers, B., 12/22/15, see above

THE TRANS-PACIFIC PARTNERSHIP SHOULD BE REJECTED

In addition to the concerns about the Trans-Pacific Partnership (TPP) treaty raised in my two previous posts (see list below), it lacks provisions for addressing currency manipulation. This has brought criticism from many parties, including some in the corporate world. Although China (which is not a participant in the TPP) is the most notorious manipulator of its currency’s exchange rate, Japan and a number of other countries in the TPP have also manipulated their exchange rates. These countries manipulate the exchange rate between their currency and others to make imports more expensive and their exports cheaper. This has been a significant contributor to the positive balance of trade these countries have with the US and to our trade deficit.

Given the weakness of other arguments for the TPP, the Obama administration is promoting the TPP as a geopolitical response to the growing power of China. The administration says that the TPP will allow the US and the other TPP participants to balance China’s economic and hegemonic power in the region. However, China is already part of the World Trade Organization, has free trade agreements with half of the TPP participants, is the main trading partner of a number of them, and is currently negotiating separate economic partnerships with the others. So the TPP will have little impact on China’s growing influence.

Furthermore, China’s growing economic power is already clearly present even here in the US. It has negotiated the transfer to its shores of manufacturing and technology from the US in a number of areas, including wind and solar energy, high technology batteries, and the building of aircraft (from none other than General Electric).

China manipulates its currency to maintain a very favorable balance of trade with the US and it uses its holdings of $3.5 trillion of US dollar investments (primarily US Treasury bonds) as a strategic global investment fund. In short, China has a comprehensive, global trade and investment strategy that will move forward regardless of the TPP. [1]

Given the problems with the TPP:

  • Enshrining corporate power, particularly through the Investor-State Dispute Resolution tribunals,
  • Lack of effective and enforceable protections for workers and the environment,
  • Excessive patent and copyright protections, for example for prescription drugs,
  • Failure to prevent currency manipulation, and
  • Ineffectiveness as a counterbalance to China’s growing regional and global power,

and that it will have a miniscule impact on actual trade, it should be rejected. I urge you to contact your US Senators and Representative to encourage them to oppose the TPP.

You can find contact information for your US Representative at http://www.house.gov/representatives/find/ and for your US Senators at http://www.senate.gov/general/contact_information/senators_cfm.cfm.

[1]       Prestowitz, C., Fall 2015, “Our incoherent China policy: The proposed Trans-Pacific Partnership is bad economics – and even worse geopolitics as containment of China,” The American Prospect

WHY ECONOMIC INEQUALITY CONTINUES TO GROW AND WHAT YOU CAN DO ABOUT IT

ABSTRACT: Despite many indicators that our economy is strong, most Americans are experiencing economic insecurity. Over half of US households have less than one month’s income in regular savings and median household income continues to decline. Low-wage workers at Walmart, McDonalds, and elsewhere are so poor they are receiving $45 billion in public assistance. This translates into the average US household paying $400 a year in taxes to support these workers.

So why are the majority of Americans falling behind economically? And why were things so different in the post-World War II period? The US job market has changed dramatically. Many full-time jobs have been replaced part-time jobs, contract work, and temporary work. Many large employers and some politicians have engaged in a conscious effort to undermine the bargaining power of workers and weaken the enforcement of labor laws. Policies that allow outsourcing of jobs overseas and high unemployment further undermine the availability of good jobs at good wages.

The ability of the public and voters to demand policies that support the middle class and workers has also been undermined. Wealthy individuals and corporations are now allowed to make huge contributions and expenditures in our elections, drowning out the voices of average voters. This means that economic inequality translates into political inequality and policies that favor the well-off. Furthermore, new barriers to voting and a strategy of paralyzing and denigrating government has fostered voter cynicism, which leads to “a downward spiral [of] depressed expectations and diminished participation.”

A genuine mass movement is needed to restore economic security and opportunity for the typical American worker. An opportunity to participate in building such a movement is available right now in the election of the Mayor of Chicago. Jesus “Chuy” Garcia is unexpectedly giving incumbent Mayor Rahm Emanuel, a crony of wealthy business interests, a run for his money. You can learn more about Garcia and contribute to his campaign at http://www.chicagoforchuy.com/index.html. The success of candidates like Garcia is critical to turning around the direction of our politics and policies, and to re-establishing government of, by, and for the people.

FULL POST: As the stock market sets record highs, as unemployment falls, and as the economy grows, most Americans are experiencing economic insecurity. Since 2007, US wealth as grown by over $30 trillion, but the number of children in families receiving public assistance to buy food has grown by 6.5 million to 16 million children (20% of all kids). Over half of public school students are poor enough to qualify for lunch subsidies and over half of US households have less than one month’s income in regular savings (as opposed to retirement accounts or home equity). Median household income has continued to decline in the 5 years since the official recession ended; 95% of income growth since 2009 has gone to the richest 1%. The jobs that are being created pay, on average, 23% less than the jobs that were lost. [1]

Low-wage workers (those earning less than $10.10 per hour) at Walmart, McDonalds, and elsewhere are so poor they are receiving $45 billion in public assistance. This translates into the average US household paying $400 a year in taxes to support these workers. Walmart’s highly publicized $1 raise for its lowest paid workers will cost the company about $1 billion per year. Its profits last year were $25 billion and it spent about $6.5 billion to buy back its own stock, enriching its investors. It’s estimated that taxpayers spent about $6 billion providing public assistance to Walmart employees last year. [2]

So why are the majority of Americans falling behind economically when many measures indicate that our economy is doing well and when the wealthy are doing very well? And why were things so different in the post-World War II period when our economy was doing well and the majority of Americans were getting ahead? Bob Kuttner offers seven reasons, which I summarize below. [3]

The US job market has changed dramatically. Many full-time jobs with career opportunities have been replaced part-time jobs, contract work, temporary work, and so forth. Many large employers and some politicians have engaged in a conscious effort to undermine the bargaining power of workers and weaken the enforcement of labor laws. Policies that allow outsourcing of jobs overseas and high unemployment (while limiting unemployment benefits) further undermine market forces that would provide good jobs at good wages – and with benefits.

Pro-business Republicans and Democrats have supported these policies. Furthermore, the ability of the public and voters to demand policies that support the middle class and workers has been undermined. Laws and court decisions have allowed wealthy individuals and corporations to make huge contributions and expenditures in our elections, drowning out the voices of average voters. This means that economic inequality translates into political inequality, and wealthy special interests can promote their own good at the expense of the public.

Similarly, laws and court decisions have made it more difficult for many voters to vote. And finally, a strategy of paralyzing and denigrating government, particularly at the national level, has fostered voter cynicism. This leads to passivity and lack of involvement in political activity including voting – “a downward spiral [of] depressed expectations and diminished participation.”

Kuttner says a genuine mass movement is needed to restore economic security and opportunity for the typical American worker, as well as democracy to our political process. He notes that the Roosevelt Revolution and New Deal of the 1930s accomplished this. The Civil Rights Movement of the 1960s also made major changes in economic justice and democratic processes. So it’s time again to throw off cynicism and apathy, and to activate and organize.

An opportunity to do so is available right now in the election of the Mayor of Chicago. Jesus “Chuy” Garcia is polling within 4 percentage points of incumbent Mayor, Rahm Emanuel, a crony of wealthy business interests (and former Chief of Staff for President Obama and former US Representative). As Mayor, Emanuel closed 50 public schools, attacked teachers, and engaged in privatizing schools, parking meters, transit fare collection, and other public sector functions and jobs. He has focused on downtown development while ignoring the neighborhoods. He has raised taxes and fees on working people while providing sweetheart deals for business people, many of whom have contributed to his election campaign. Emanuel has raised over $13 million, ten times what Garcia has raised, and has a super PAC backing him as well. He is receiving substantial support from wealthy business people who are active Republicans. [4]

Garcia shocked everyone in the primary by keeping Emanuel from getting a majority of the vote, thereby forcing the run-off election on April 7. If you would like to contribute to the movement to restore democracy, reduce inequality, and support workers and the middle class, supporting Garcia is a good opportunity. You can learn more about him and contribute to his campaign at http://www.chicagoforchuy.com/index.html. Even if you contribute just a few dollars, the number of donors is an important indication of the breadth of support. You can sign-up to make calls from your home encouraging Chicago residents to get out and vote for him here: http://pol.moveon.org/2015/garcia_calls.html?rc=kos.

The success of candidates like Garcia is critical to turning around the direction of our politics and policies, and to re-establishing government of, by, and for the people. Even if they don’t ultimately win, they change the issues and policies that are discussed, and help build the movement for change.

P.S. I think it’s noteworthy that there hasn’t been much coverage by the mainstream (corporate) media of this unexpectedly contested mayoral race in our 3rd largest city.

[1]       Buchheit, P., 2/9/15, “New evidence that half of America is broke,” Common Dreams

[2]       Buchheit, P., 3/16/15, “Four numbers that show the beating down of middle America,” Common Dreams

[3]       Kuttner, R., 3/23/15, “Why the 99 percent keeps losing,” Huffington Post

[4]       Perlstein, R., Feb. 2015, “How to sell off a city,” In These Times (http://inthesetimes.com/article/17533/how_to_sell_off_a_city)

STOP “TRADE” TREATIES THAT FAVOR BIG MULTINATIONAL CORPORATIONS

ABSTRACT: The Obama administration is in the final stages of negotiating two major “trade” treaties. It is pushing for Fast Track approval, which requires Congress to ratify them quickly (only 20 hours of debate on the thousands of pages in each treaty) with no amendments. These “trade” treaties primarily serve to enhance the power and profits of large multi-national corporations.

The Congressional Progressive Caucus (CPC) has released a set of principles for trade including:

  • Trade treaties should promote balanced trade and reduction of the current US trade deficit;
  • Workers’ rights should be protected and assistance provided to those who are displaced;
  • Currency manipulation to gain unfair advantage in trade should be banned;
  • The environment should be protected and environmental laws should not be undermined;
  • Trade treaties must not supersede countries’ consumer protections;
  • Private court systems that bypass and supersede a countries’ court system must not be allowed;
  • Trade treaties must safeguard affordable access to essential medicine; and
  • Trade treaties should support the United Nations Universal Declaration of Human Rights.

I encourage you to contact your U.S. Representative and Senators to urge them to support the Congressional Progressive Caucus’s principles for trade, and to oppose these “trade” treaties and Fast Track approval of them.

FULL POST: The Obama administration is in the final stages of negotiating two major “trade” treaties, [1] the Trans-Pacific Partnership (TTP) and the Trans-Atlantic Trade and Investment Partnership (TTIP). It is pushing for Fast Track approval, which requires Congress to ratify them quickly (only 20 hours of debate on the thousands of pages in each treaty) with no amendments to or filibustering of the language to which the administration has agreed. Despite the fact that a vote on the Fast Track approval process was delayed last week in Congress, it and these treaties will be back soon.

These “trade” treaties primarily serve to enhance the power and profits of large multi-national corporations. U.S. sovereignty and workers will be undermined, along with protections for our health, consumer and worker safety, the environment, and the stability of the financial system. Laws and regulations to protect public well-being are treated as illegal barriers to trade, although in reality it’s because they might be barriers to corporate profits. Multi-national corporations would be able to return to practices that were prohibited by the Clean Air and Clean Water Acts of the early 1970s and to the financial schemes that caused the 2008 Great Recession. [2] (See my posts of 1/13/14, 1/8/14, 9/13/13, 9/10/13, and 7/22/12 for more details.)

US Senator Elizabeth Warren has focused her opposition to the TPP on a provision called Investor-State Dispute Settlement (ISDS). It gives foreign corporations special rights to challenge U.S. laws, rules, and regulations in international tribunals, instead of the normal process of going through the U.S. courts. They could win large financial awards for alleged loss of potential profits. Such awards would have to be paid by U.S. taxpayers without ever going to a U.S. court. This significantly undermines U.S. sovereignty. [3]

This ISDS provision is already in the North American Free Trade Agreement (NAFTA) and some other existing trade treaties. As a result, governments have paid hundreds of millions of dollars to multi-national corporations under decisions by international tribunals where high-priced corporate lawyers serve as the judges. The number of cases brought to these tribunals is growing and there were 58 cases in 2012 alone. For example, a French corporation sued Egypt because it raised its minimum wage, a Swedish corporation sued Germany because it is phasing out nuclear power after the Japanese Fukushima disaster, and Philip Morris is suing Uruguay to stop new tobacco regulations. Eli Lilly is suing Canada to overturn a decision by its Supreme Court that limits drug prices. [4]

As a candidate for President, Obama criticized ISDS provisions in NAFTA. He promised to oppose foreign corporations’ rights to sue governments over laws or regulations that protect public safety or promote the public interest. He has done an about face on this issue.

Robert Reich, Bill Clinton’s Secretary of Labor, has a great, 2 ½ minute video explaining why we should oppose Fast Track and the TPP. [5] He notes that although it is the largest trade treaty in history, involving almost 800 million people and 40% of the world’s economy, it is being negotiated in secret. The public, the media, and even Congress have been shut out from the process and denied access to draft documents. However, corporate leaders have been extensively involved. The leaked information that has come out indicates that the TPP will exacerbate inequality and the undermining of the middle class by facilitating the outsourcing of jobs. It will also undermine rules and regulations that protect people (but might reduce profits) and make drugs more costly by lengthening patent protections.

The TPP and TTIP will provide few if any benefits to the economy, jobs, wages, or our balance of trade. Past trade treaties, such as NAFTA, have resulted in documented job losses, declining wages for middle class workers, increased trade deficits, and increasing inequality. [6] (See my posts of 1/20/14 and 7/17/12 for more information.)

The Congressional Progressive Caucus (CPC) has released a set of principles for trade. [7] Those principles include the following:

  • Trade treaties must allow open debate with full disclosure of their provisions, sufficient time to discuss them, and the opportunity to amend them;
  • Trade treaties should promote balanced trade and reduction of the current US trade deficit;
  • Workers’ rights should be protected and assistance provided to those who are displaced;
  • Currency manipulation to gain unfair advantage in trade should be banned;
  • Trade treaties must not limit the United States government’s ability to set contract guidelines, including giving a preference to domestic producers when making purchasing decisions;
  • The environment should be protected and countries’ environmental laws should not be undermined;
  • Trade treaties must not supersede countries’ food and safety standards, financial regulations, or other consumer protections;
  • Private court systems, such as Investor State Dispute Settlement tribunals, that bypass and supersede a countries’ court system must not be allowed;
  • Trade treaties must safeguard affordable access to essential medicine and not establish unfair drug patent protections that delay access to affordable generic drugs; and
  • Trade treaties should require signatory countries to implement and enforce domestic laws consistent with the United Nations Universal Declaration of Human Rights and should not prevent the U.S. or other nations from using trade benefits to promote human rights.

I encourage you to contact your U.S. Representative and Senators to urge them to support the Congressional Progressive Caucus’s principles for trade. In addition, I encourage you to urge your elected representatives to oppose these “trade” treaties and the Fast Track approval process for them.

[1]       I put trade in quotes because these and other recent “trade” treaties, such as the North American Free Trade Agreement (NAFTA), actually do little to reduce trade barriers (which are already quite low) or increase trade (which is already quite extensive). They primarily address a broad range of legal and regulatory issues.

[2]       Stiglitz, J., 3/15/14, “On the Wrong Side of Globalization,” The New York Times

[3]       Warren, E., 2/25/15, “The Trans-Pacific Partnership clause everyone should oppose,” The Washington Post

[4]       Gallagher, K.P., 3/4/15, “Saving Obama from a bad trade deal,” The American Prospect

[5]       Reich, R., 1/29/15, “Robert Reich takes on the Trans-Pacific Partnership,” https://www.youtube.com/watch?v=3O_Sbbeqfdw

[6]       Meyerson, H., 1/14/14, “Free trade and the loss of U.S. jobs,” The Washington Post

[7]       Congressional Progressive Caucus, 3/6/15, “Principles for trade: A model for global progress,” http://cpc.grijalva.house.gov/uploads/Final%20Principles%20for%20Trade%203-4-151.pdf

RECLAIMING AN ECONOMY THAT WORKS FOR EVERYONE, NOT JUST THE WEALTHY

ABSTRACT: We need to reclaim our economy so it works for everyone, not just the wealthy. With different choices and policies that reflect a different set of values, our economy can once again be one where a rising tide lifts all boats, not just the yachts of the wealthiest.

The policy changes that are needed to support the middle and working class include:

  • Raise the minimum wage
  • Strengthen laws on equal pay for equal work
  • Strengthen labor laws and enforcement, including workers’ right to bargain collectively
  • Strengthen Social Security while protecting and encouraging pensions
  • Close corporate and individual income tax loopholes, and raise tax rates on unearned income
  • Ensure that trade treaties are fair to workers and citizens
  • Strengthen the Dodd-Frank financial reforms and reinstitute a small financial transaction tax
  • Create jobs and make needed investments in our infrastructure

We need new policies and programs that reflect values and choices that put the average citizen and worker first, rather than wealthy individuals and corporations. If some of these proposals resonate with you, contact your elected officials and tell them. A grassroots movement is needed to shift our economy from the current one that is working only for the wealthiest 10% to the one we used to have where everyone benefited from economic growth.

FULL POST: In my last post, I summarized policy choices that have undermined the middle and working class, largely based on a great speech Senator Elizabeth Warren gave recently. She states that it doesn’t have to be this way and spells out what we need to do to reclaim our economy so it works for everyone, not just the wealthy. [1] With different choices and policies that reflect a different set of values, our economy can once again be one where a rising tide lifts all boats, not just the yachts of the wealthiest.

The policies that undermined the middle and working class were justified by the theory of “trickle-down” or “supply-side” economics. It was used to justify large tax cuts for wealthy individuals and corporations because the theory said that the country could count on the biggest and richest corporations and the wealthiest individuals to share their growing wealth and create an economy that worked for everyone. The experience of the last 30 years has shown that President George H.W. Bush was right when he called this “voodoo economics.” Nonetheless, there are politicians today who still pledge allegiance to “trickle-down” economics, despite the fact, as Senator Warren states, that it has been shown to be the politics of helping the rich and powerful get more, while cutting off the legs of the middle class.

The set of values that should drive our policies include the following:

  • A person shouldn’t work full-time and be in poverty.
  • Women should receive equal pay for equal work.
  • Labor laws should be strengthened and enforced so that workers are
    • paid what they are due,
    • able to retire with dignity, and
    • able to bargain together as a group with employers for fair pay, benefits, and working conditions.
  • Our tax system should be fair and require wealthy individuals and corporation to pay their fair share. Workers shouldn’t pay higher income tax rates on their hard-earned income than the wealthy pay on their unearned income from investment gains and dividends.
  • The burden of student debt should be reduced.
  • Our trade policies should be fair for workers, creating jobs and raising wages in the U.S.
  • Big banks and financial corporations should not be too-big-to-fail, allowed to make risky investments with government insured deposits, or bailed out by taxpayers if they get into trouble.
  • Regulation and oversight should be enhanced, particularly of the big financial corporations, so consumers and our economy are protected from speculation and fraud.

The policy changes that are needed to support the middle and working class based on these values include:

  • Raise the minimum wage nationally. (Many states and cities are already doing this.)
  • Strengthen laws requiring and enforcing equal pay for equal work.
  • Strengthen labor laws and their enforcement, including workers’ right to form unions and bargain collectively so there is a balance of power between the workers and the employer during negotiations.
  • Strengthen Social Security while protecting and encouraging pensions, as well as personal and employer supported savings, such as 401(k)s.
  • Close corporate and individual income tax loopholes. For example, stop corporations and individuals from hiding income overseas to avoid paying taxes.
  • Raise tax rates on unearned income, including capital gains, dividends, and hedge fund mangers’ investment gains.
  • Allow students to refinance college loans at reduced interest rates and allow relief from student debt in bankruptcy.
  • Ensure that trade treaties are thoroughly debated in public and are fair to workers and citizens, balancing their interests with those of multi-national corporations.
  • Strengthen the Dodd-Frank financial reforms, as well as oversight and enforcement. Prevent financial corporations from gambling on risky investments with taxpayer insured deposits. Require too-big-to-fail corporations to split up into smaller entities.
  • Reinstitute a small financial transaction tax (for example, 0.5%) to discourage speculative trading and generate needed revenue.
  • Create jobs and make needed investments in our infrastructure by building roads, bridges, and schools; and investing in education and research.

While workers suffered after the 2008 economic collapse caused by out-of-control financial corporations, our politicians bailed out the corporations, often with no or few strings attached. Our politicians have also signed trade treaties and currently are negotiating new ones that are highly beneficial to multi-national corporations. Yet workers harmed by past policy changes and trade treaties, as well as homeowners who lost their homes and workers who lost their jobs in the 2008 collapse, have received little help and certainly have not been bailed out the way Wall Street was.

We need new policies and programs that reflect values and choices that put the average citizen and worker first, rather than wealthy individuals and corporations. I encourage you to listen to Warren’s speech if you haven’t already (just 23 minutes) or to read the press release. If some of these concerns or proposals resonate with you, contact your elected officials and tell them. A grassroots movement is needed to shift our economy from the current one that is working only for the wealthiest 10% to the one we used to have where everyone benefited from economic growth.

[1]     You can listen to and watch Warren’s 23 minute speech at: https://www.youtube.com/watch?v=mY4uJJoQHEQ&noredirect=1. Or you can read the text in the press release her office put out at: http://www.warren.senate.gov/?p=press_release&id=696.