Category: Citizen action

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)

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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.

GOVERNMENT BY THE BIG WALL ST. CORPORATIONS

ABSTRACT: The big Wall St. financial corporations just got another big gift. The Federal Reserve announced that it will give Wall St. a year’s delay (to mid-2017) on the implementation of the Volcker Rule, which would ban Wall St. from engaging in risky investments with federally-insured deposits. Many observers believe that this delay will simply give the financial corporations time to kill the Volcker Rule before it ever goes into effect through their lobbying and campaign contributions. The financial corporations’ incessant lobbying and cumulative campaign contributions weakened the Dodd-Frank bill to begin with, and now are delaying, weakening, and repealing its pieces during implementation. Citigroup spent $5.6 million on lobbying in 2013 and its political action committee and employees gave $2.1 million to candidates for federal office in the 2014 election cycle. JPMorgan Chase spent and gave similar amounts.

In addition to huge, risky investments with taxpayer-insured deposits, other risks in the banking and financial system are growing. The bottom line is that the huge financial corporations, which were too-big-to-fail in 2008 and therefore got trillions of dollars in a public bailout, are now bigger than ever and getting riskier by the day. Another bailout and crash of our economy are one financial mistake or economic surprise away.

We need to push back and tell our elected officials that:

  • The Dodd-Frank law’s financial reforms need to be strengthened,
  • Financial corporations should not be allowed to gamble with taxpayer-insured deposits, and
  • Too-big-to-fail financial corporations should be broken up.

FULL POST: The big Wall St. financial corporations just got another big gift. First, the ban on derivatives trading with federally-insured deposits was repealed in the year-end budget bill. (See blog post on 12/14/14.) Then, the Federal Reserve announced that it will give Wall St. a year’s delay (to mid-2017) on the implementation of the Volcker Rule. This Rule, which is a key part of the Dodd-Frank post-2008 crash financial reform legislation, would ban Wall St. from engaging in other types of risky investments with federally-insured deposits. The Volcker Rule is a partial re-implementation of the Glass-Steagall Act, which was enacted after the Great Depression and prohibited banks with federally insured deposits from engaging in investment banking activities. (It kept our banking system safe for 70 years until its repeal in 1999.) The prohibited investment activities include participation in private equity funds and hedge funds, which are basically unregulated investment activities and can be very risky. Goldman Sachs has $11 billion in such investments, while Morgan Stanley has $5 billion. [1]

Many observers believe that this delay will simply give the financial corporations time to kill the Volcker Rule before it ever goes into effect through their lobbying and campaign contributions. This is exactly what happened to the ban on derivatives: it was delayed from 2013 to mid-2015 and has now been repealed so it never went into effect. Citigroup, whose lobbyists wrote the repeal of the derivative ban, held over $60 trillion of derivatives (that’s right, trillion not billion) at the end of 2013 and this huge, risky investment will now continue to be protected by federal deposit insurance. [2]

The financial corporations’ incessant lobbying and cumulative campaign contributions weakened the Dodd-Frank bill to begin with, and now are delaying, weakening, and repealing its pieces during implementation. Citigroup spent $5.6 million on lobbying in 2013 and its political action committee (PAC) and employees gave $2.1 million to candidates for federal office in the 2014 election cycle. JPMorgan Chase spent $5.5 million on lobbying in 2013 and its PAC and employees gave $2.6 million to federal candidates for the 2014 election. Most of the members of Congress who voted for the budget bill that contained the repeal of the derivatives ban had received campaign contributions from one or both of these huge financial corporations. [3]

In addition to huge, risky investments with taxpayer-insured deposits, other risks in the banking and financial system are growing. The requirement for down payments on mortgages was recently decreased to 3%. The number of subprime auto loans has grown to $21 billion; some of them give borrowers 6 or 7 years to pay off the loan. This weakening of credit standards is the same pattern that triggered the 2008 collapse. The large financial corporations are also engaging in a growing amount of lending and trading in investments, some quite risky, that are beyond the scrutiny of regulators. This is all very reminiscent of the situation that led to the 2008 crash. [4]

The bottom line is that the huge financial corporations, which were too-big-to-fail in 2008 and therefore got trillions of dollars in a public bailout, are now bigger than ever and getting riskier by the day. Another bailout and crash of our economy are one financial mistake or economic surprise away. Nothing substantial has changed from the 2008 scenario.

To avoid another collapse and bailout, we need to push back and tell our elected officials that:

  • The Dodd-Frank law’s financial reforms and their implementation need to be strengthened, not weakened or delayed,
  • Financial corporations should not be allowed to gamble on risky investments with taxpayer-insured deposits, and

 

  • Too-big-to-fail financial corporations should be broken up to reduce the risks they present to our financial system and economy.

[1]       Queally, J. 12/19/14, “Just in time for the holidays, another Wall Street giveaway,” Common Dreams (http://www.commondreams.org/news/2014/12/19/just-time-holidays-another-wall-street-giveaway)

[2]       Eskow, R., 12/26/14, “Wall Street had a merry Christmas. The New Year’s still up for grabs.” Campaign for America’s Future (http://www.commondreams.org/views/2014/12/26/wall-street-had-merry-christmas-new-years-still-grabs)

[3]       Choma, R., 12/12/14, “Wall Street’s omnibus triumph, and others,” Open Secrets (http://www.opensecrets.org/news/2014/12/wall-streets-omnibus-triumph-and-others/)

[4]       Wiseman, P., 12/16/14, “Memories of financial crisis fading as risks rise,” Associated Press (http://hosted2.ap.org/APDEFAULT/f70471f764144b2fab526d39972d37b3/Article_2014-12-15-US–Financial%20Crisis-Forgotten%20Lessons/id-1422b6cbcd4d4b06a93fca295eaf1b7e)

CORPORATIONS ARE NOT PEOPLE AND MONEY IS NOT SPEECH

ABSTRACT: Many millions of dollars are being spent by special interest groups on our political campaigns. This level of spending makes it clear that wealthy special interests – individuals, corporations, unions, and non-profit organizations – are taking over our elections.

The only way to stop this undemocratic spending is through an amendment to the U.S. Constitution – because of the Supreme Court’s rulings in Citizens United and other cases. Overturning the 2010 Citizens United decision has broad support across all demographic and political groups, including 85% of Democrats, 76% of Republicans, and 81% of independents. And two-thirds of small business owners view the Citizens United decision as bad for small businesses.

Move to Amend, Wolf PAC, and other organizations are working to enact a corrective Constitutional amendment by introducing bills in state legislatures that call on Congress to enact such an amendment or, if Congress fails to act, calling for a Constitutional Convention to propose such an amendment. This legislation has passed in California, Vermont, and Illinois, and is pending in 13 other states.

If you’d like to participate in the effort to overturn Citizens United, contact Move to Amend or Wolf PAC via their websites. Both have local and national activities in which you can participate.

FULL POST: Many millions of dollars are being spent by special interest groups on our political campaigns, both for candidates’ elections and on ballot questions. Nationally, hundreds of millions of dollars were spent in 2014 by outside groups (i.e., not a candidate’s own campaign). (See previous post on 11/17/14 for details.) However, this is not just an issue for national elections. For example, here in Massachusetts recent outside spending included:

  • Governor’s race in 2014:                over $17 million
  • Two ballot questions in 2014:       over $23 million
  • Boston Mayor’s race in 2013:        over $  4 million

This level of spending makes it clear that wealthy special interests – individuals, corporations, unions, and non-profit organizations – are taking over our elections. The basic democratic principle of one person, one vote, is being overwhelmed by money. This money serves as a megaphone so that the voices and wishes of these wealthy special interests drown out the voices of average voters and citizens.

Making this situation even worse is that a growing portion of these huge sums is given by anonymous donors. (See previous post on 11/17/14.) This money is called “dark money” because its source is unknown. Anonymous donors means there is no accountability for the messages delivered. Furthermore, voters can’t effectively evaluate the credibility of the message because they don’t know who is paying for it.

The only way to stop this undemocratic spending in our elections is through an amendment to the U.S. Constitution – because of the Supreme Court’s rulings in Citizens United and other cases. (These rulings said that corporations and other organizations are people and have all the same rights as actual human beings under the Bill of Rights and the U.S. Constitution. The rulings also said that spending money in elections [and elsewhere] is speech and is protected by freedom of speech rights.)

The American public broadly supports overturning the Supreme Court’s 2010 Citizens United decision, which was the key to the avalanche of political spending by outside groups. Polling finds that 80% of the American people oppose the Citizens United decision with remarkably strong agreement across all demographic and political groups, including 85% of Democrats, 76% of Republicans, and 81% of independents. Similarly, 88% of small business owners view the current role of money in politics negatively and two-thirds view the Citizens United decision as bad for small businesses.

To address this situation, Move to Amend (https://movetoamend.org/), Wolf PAC (http://www.wolf-pac.com/), and other organizations are working to enact a corrective Constitutional amendment. They are introducing bills in state legislatures that take a two-step approach to advancing the Constitutional amendment necessary to reverse these rulings.

  • First, these bills call on Congress to pass a Constitutional amendment stating two things:
    • The rights protected by the Bill of Rights and the U.S. Constitution are the rights of human beings only and not of corporations or other organizations.
    • Congress and the states may place limits on political contributions and spending to ensure that our elections are fair and that all citizens can participate and have their voices heard in a reasonably equitable manner.
  • Second, if Congress fails to act within six months, the bills call for a Constitutional Convention to propose this amendment.

Such legislation has passed in California, Vermont, and Illinois, and is pending in 13 other states. You can check at the Move to Amend and Wolf PAC websites to see if there is an initiative in your state. A call for a Convention to amend the Constitution needs to be part of the legislation because our current Congress is so indebted to and dependent on wealthy campaign contributors that it is unlikely to pass an amendment staunching the flow of campaign money on its own.

Four of the last 11 amendments to the Constitution began this way – with state resolutions pressuring Congress to act. Notably, the 17th amendment, which established direct election of US Senators in 1913, was passed by Congress only after many states had passed a call for a Constitutional Convention. Although such a Convention has never occurred, if one did occur, any amendment it proposed would have to be ratified by ¾ of the states in order to go into effect.

If you’d like to participate in the effort to overturn Citizens United, first, go to the Move to Amend website and sign their petition (if you haven’t already). Second, I encourage you to contact Move to Amend or Wolf PAC via their websites. Both have local and national activities in which you can participate.

SECRETS OF THE FY15 FEDERAL SPENDING BILL

ABSTRACT: Congress recently rushed to pass a 1,700 page, $1.1 trillion spending bill. Such last minute, have-to-pass pieces of legislation are ideal vehicles for enacting laws that wouldn’t withstand the scrutiny of the regular legislative process. In my 12/14/14 post, I wrote about 2 such provisions: the repeal of the ban on banks investing in derivatives with taxpayer insured funds and the dramatic increase in the amount an individual can contribute to political party committees. This post highlights some of the other items that were slipped into this budget bill.

The Environmental Protection Agency had its budget cut by $60 million, which will result in its lowest staffing level since 1989. Multiple other provisions affecting the environment and the EPA were included. The Internal Revenue Service had its budget cut by $346 million. This will reduce federal government revenue and increase the deficit because the IRS collects $7 for every $1 it spends on audits. Some of the other provisions are listed below in the Full Post.

To help shed light on the passage of special interest legislation, Open Secrets (www.opensecrets.org) tracks campaign contributions and lobbying expenditures. It then reports on connections between them and the votes and actions of elected officials.

In summary, the budget bill and its various provisions were bad for low-income, middle class, and working families; for the environment; for educational outcomes and good nutrition in schools; and for fair tax collection. They were good for Wall Street, other large corporations, and wealthy individuals. If there are issues here that you care about, contact your Members of Congress and the President now to express your views and ask them where they stand.

FULL POST: As you probably know, Congress recently rushed to pass a 1,700 page, $1.1 trillion spending bill that keeps the federal government operating. Such last minute, have-to-pass pieces of legislation are ideal vehicles for enacting laws that wouldn’t withstand the scrutiny of the regular legislative process. In my 12/14/14 post, I wrote about 2 such provisions: the repeal of the ban on banks investing in derivatives with taxpayer insured funds and the dramatic increase in the amount an individual can contribute to political party committees. This post highlights some of the other budgetary and non-budgetary details that were slipped into this budget bill. [1] [2] [3]

The Environmental Protection Agency’s (EPA) budget was cut by $60 million, which will result in its lowest staffing level since 1989. Multiple other provisions affecting the environment and the EPA were included:

  • Block the EPA from applying the Clean Water Act to certain farms
  • Require the EPA to allow “mountain top removal” coal mining
  • Prevent the EPA from protecting 2 types of sage grouse under the Endangered Species Act (a benefit for the oil and mining industries)
  • Bar funding to help developing countries cut carbon emissions

The Internal Revenue Service (IRS) had its budget cut by $346 million. This will reduce federal government revenue and increase the deficit because the IRS collects $7 for every $1 it spends on audits. Most IRS enforcement targets high income tax cheaters because that’s where the significant losses in tax revenue occur. This might explain why its enforcement capacity is being cut.

Other provisions include:

  • Provided record funding to airlines that serve rural airports, $5.4 billion to fight Ebola, $5 billion to fight Islamic militants, and $3 billion for weapons systems the Pentagon doesn’t want.
  • Eliminated funding for President Obama’s Race to the Top initiative, which works to improve educational outcomes for children of all ages.
  • Repealed some nutrition requirements for school lunches (a Michelle Obama initiative).
  • Cut the Women, Infants, and Children (WIC) program, which provides vouchers for nutritious food to low income pregnant women and mothers and their young children. In addition, white potatoes must be included as an approved food. (Guess which industry pushed for this latter provision?)
  • Cut funding for Pell higher education grants to low income students. The money will be diverted to for-profit companies that serve as collection agents on student loans.
  • Allowed corporations to cut pensions for current retirees in certain situations.
  • Repealed rules regulating the hours truck drivers can drive. (A benefit for the trucking industry.)
  • Blocked Washington, D.C.’s marijuana legalization.

To help shed light on the passage of special interest legislation, Open Secrets (www.opensecrets.org) tracks campaign contributions and lobbying expenditures. It then reports which elected officials received how much in contributions from special interests and how the office holders voted on or otherwise affected policy making favoring the source of their campaign contributions. Open Secrets also reports on the lobbying expenditures of special interests that benefited from legislation or other policy making. For example, it recently reported on campaign contributions and lobbying by Wall Street corporations and the voting to repeal the ban on federally-insured banking corporations engaging in derivatives trading. The report also covered mining interests and the blocking of endangered species protection that would affect them, as well as the trucking industry and changes in driver safety regulations that benefit it. [4] (I’ll provide some of the detail from this report in my next post.)

In summary, the budget bill and its various provisions were bad for low-income, middle class, and working families; for the environment; for educational outcomes and good nutrition in schools; and for fair tax collection. They were good for Wall Street, other large corporations, and wealthy individuals.

The issues included in the year end budget bill are precursors of the issues, budgetary and others, that will be on the table when Congress reconvenes. If there are issues in the items above that you care about, keep tuned and be ready to act when they come up. Better yet, contact your Members of Congress and the President now to express your views and ask them where they stand. And don’t think that based on party affiliation you know where a politician stands; 57 Democrats in the House voted for this budget bill; only 6 Democrats in the Senate voted to stop it from going to a final vote; and President Obama supported it and signed it.

[1]       Waldman, P., 12/12/14, “Did Democrats get hosed on the Budget Bill?” The American Prospect (http://prospect.org/article/did-democrats-get-hosed-budget-bill)

[2]       Kuttner, R., 12/16/14, “The great budget sellout of 2014: Do we even have a second party?” The American Prospect (http://prospect.org/article/great-budget-sellout-2014-do-we-even-have-second-party)

[3]       Taylor, A., 12/16/14, “Defense, tourism among winners in spending bill,” Associated Press (http://bigstory.ap.org/article/418395cf20be4a409cfd85bb93020077/defense-tourism-among-winners-spending-bill)

[4]       Choma, R., 12/12/14, “Wall Street’s omnibus triumph, and others,” Open Secrets (http://www.opensecrets.org/news/2014/12/wall-streets-omnibus-triumph-and-others/)

WALL STREET BAILOUT REVIVED

ABSTRACT: As you probably know, Congress just rushed to pass a $1.1 trillion spending bill that keeps the federal government operating. Such last minute, have-to-pass pieces of legislation are ideal vehicles for enacting laws on unrelated matters that wouldn’t withstand the scrutiny of the regular legislative process.

One such provision in this bill repeals a piece of the Dodd-Frank financial industry regulation law entitled “Prohibition against federal government bailouts of swap entities.” The Dodd-Frank law does not prohibit banks from owning these derivatives, but requires them to do so in a separate entity that is not insured by the federal government. Derivatives were a major contributor to the 2008 financial collapse. Repealing this piece of the Dodd-Frank law benefits a very few, very large, very profitable, financial corporations. The actual language of the repeal provision was written by a lobbyist for Citicorp, one of those large financial corporations. Senator Elizabeth Warren (D MA) took the lead in fighting this provision because it raises the risk of another financial collapse and another taxpayer-funded bailout.

Wall Street held the whole federal government’s budget hostage. It, in effect, demanded federal insurance for its gambling with derivatives or the federal government would shut down for lack of a budget. Teddy Roosevelt broke up the trusts in the early 1900s because they had too much political power and this undermined democracy. We’re at that point again.

Another unrelated provision in the budget bill allows an individual to give almost $800,000 per year to a political party. This would exacerbate the already disproportionate influence these very few, very wealthy individuals have over our elected officials and our government. These individuals are investing and looking forward to a nice return on their investment from the politicians whose elections they supported.

I encourage you to contact your US Representative, your Senators, and the President. Tell them you are outraged by these provisions in the budget bill that undermine our democracy and increase the risk of another financial collapse and another bailout of private, Wall Street corporations with the public’s money.

FULL POST: As you probably know, Congress, having procrastinated until the last hour, just rushed to pass a $1.1 trillion spending bill that keeps most of the federal government operating through next September. At least partly by design, such last minute, have-to-pass pieces of legislation are ideal vehicles for enacting laws on unrelated matters that wouldn’t withstand the scrutiny of the regular legislative process. In some cases, these tacked on provisions are passed and become law despite the public, and many members of Congress, being unaware of their existence. There are quite a few of them buried in this over 1,000 page budget bill.

One such provision repeals a piece of the Dodd-Frank financial industry regulation law, which was passed after the 2008 financial meltdown and bailout, in an effort to prevent them from happening again. [1] [2] This provision repeals a section of the Dodd-Frank law entitled “Prohibition against federal government bailouts of swap entities,” which prohibits federally insured banks from owning highly speculative financial instruments known as “swaps.” These are one kind of what are called derivatives, which are bets (i.e., gambling) on how certain other financial securities or factors, such as interest rates, will change over time.

The Dodd-Frank law does not prohibit banks from owning these derivatives, but requires them to do so in a separate entity that is not insured by the federal government, which ultimately means insured by the taxpayers. Derivatives were a major contributor to the 2008 financial collapse and to the need for what was ultimately a multi-trillion dollar bailout of large Wall Street corporations.

Repealing this piece of the Dodd-Frank law benefits a very few, very large, very profitable, financial corporations. The actual language of the repeal provision, which was slipped into the bill at the last minute, was written by a lobbyist for Citicorp, one of those large financial corporations.

Senator Elizabeth Warren (Democrat from Massachusetts) took the lead in fighting this provision because it raises the risk of another financial collapse and another taxpayer-funded bailout. [3] Somehow this provision made it into this crucial piece of legislation despite apparent, strong bipartisan support for ensuring that we never have to bail out Wall Street again. For example, opposition to the 2008 bailout was a central issue in the rise of the Tea Party movement.

As Senator Warren states, this is all about power and money. There were no public hearings, no debate, and no transparency. This was all inside, backroom, backdoor politics by Wall Street. Warren highlights the extraordinary influence of one of the large, Wall Street financial corporations, Citicorp. She notes that 3 of the last 4 Secretaries of the Treasury have come from Citicorp, along with the Vice-chairman of the Federal Reserve. She identifies at least 5 other senior officials in the executive branch who have worked for Citicorp. She notes that Citicorp has spent tens of millions of dollars on lobbying and campaign contributions, as well as additional, unknown amounts on think tanks and PR campaigns.

These expenditures and the movement of people through the revolving door from Wall Street to government (and often back to Wall Street) has proven to be an investment with a big payoff. Citicorp alone got roughly $500 billion from the bailout and then went right back to making huge profits and paying huge amounts to senior executives. During the development of the Dodd-Frank legislation, there was a proposal to break up Citicorp and the other huge financial corporations because they were too big to fail, and therefore a danger to the economy and likely to receive a bailout with public money if they got in trouble. This proposal was killed by those on Wall Street and their friends at the Treasury Department. Now, these huge financial corporations are even bigger than they were before.

Wall Street held the whole federal government’s budget hostage. It, in effect, demanded federal insurance for its gambling with derivatives or the federal government would shut down for lack of a budget. This is the power that Wall Street has, and it is far too much power. It means we do not have a democracy; we have a corporatocracy.

When Teddy Roosevelt broke up the trusts in the early 1900s, he did it not primarily because their power was distorting the economy and markets, but because they had too much political power. He stated that this undermined democracy. Well, we’re at that point again, without a doubt.

Underscoring this point, another unrelated provision in the budget bill allows an individual to give almost $800,000 per year to a political party (up from the current limit of just under $100,000). A few hundred people – out of the 300 million in this country – give that kind of money to political campaigns. This would exacerbate the already disproportionate influence these very few, very wealthy individuals have over our elected officials and our government. And these individuals aren’t throwing their money to the wind; they are investing and looking forward to a nice return on their investment from the politicians whose elections they supported.

US Although the budget bill passed Congress on Saturday and will presumably be signed by the President, I encourage you to contact your Representative, your Senators, and the President. Tell them you are outraged by these provisions in the budget bill that undermine our democracy and increase the risk of another financial collapse and another bailout of private, Wall Street corporations with the public’s money.

(You can contact your Representative and Senators by calling the Congressional switchboard at 202-224-3121. 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 email the President at http://www.whitehouse.gov/contact/submit-questions-and-comments. You can call the White House comment line at 202-456-1111 or the switchboard at 202-456-1414).

[1]       Bierman, N., & Meyers, J., 12/12/14, “A late rush to fund government,” The Boston Globe

[2]       Taylor, A., 12/10/14, “Massive $1.1 trillion spending bill unveiled,” Daily Times Chronicle from the Associated Press

[3]       I encourage you to watch 2 speeches (each less than 10 minutes) that Senator Warren gave in Congress in the past week. They’re on YouTube at: https://www.youtube.com/watch?v=LgsN7ilcWL4 and https://www.youtube.com/watch?v=DJpTxONxvoo. She very powerfully makes the case that the repeal of this piece of the Dodd-Frank law is unjustifiable, undemocratic, and dangerous special interest law making.

DANGER AHEAD IN DC: CORPORATIONS AND THE WEALTHY POISED TO TAKE ADVANTAGE

ABSTRACT: Some people in Washington, D.C., are taking the election results as an indication that Republican policy priorities are in favor with the public. Furthermore, the Republicans in Congress and the President may want to show that they can work together, get things done, and pass new laws. Senator Elizabeth Warren (Democrat from Massachusetts) warns us that big corporations and their lobbyists will try to take advantage of this situation. (As my previous post (11/25/14) documented, the conclusion that Republican policy priorities are in favor with the public is not an accurate interpretation of the election results.)

Given Warren’s warning, it’s little surprise that the House this week passed a massive package extending tax breaks primarily for banks, investment firms, and other wealthy interests. The more than 50 tax breaks included in the bill would add nearly $42 billion to the budget deficit over the next decade. Surprisingly, there seems to be little concern over this cost. Previously, less expensive initiatives (that benefited the unemployed, low income families, and families with child care expenses) were defeated, supposedly because they were unaffordable.

I encourage you to contact your Senators and the President to let them know that these tax breaks for big corporations and wealthy individuals, if warranted, should be paid for by closing loopholes benefiting these same groups. Furthermore, I’d encourage you to note that the focus of any tax breaks and other legislation should be on helping low and middle income families and individuals, not wealthy corporations and individuals.

FULL POST: Some people in Washington, D.C., are taking the election results as an indication that Republican policy priorities are in favor with the public. This may include President Obama, who may feel that he has to reach out and accommodate the new Republican majorities in the Senate and House. Furthermore, the Republicans in Congress and the President may want to show that they can work together, get things done, and pass new laws. Senator Elizabeth Warren (Democrat from Massachusetts) warns us that big corporations and their lobbyists will try to take advantage of this situation. [1]

As my previous post (11/25/14) documented, the conclusion that Republican policy priorities are in favor with the public is not an accurate interpretation of the election results. Truly progressive candidates won in the US Senate and elsewhere. Progressive ballot initiatives won across the country, including in states that were electing Republicans. The public supports, among other things, improved pay and paid sick leave for low income workers, as well as stronger regulation of campaign spending and the ethics of elected officials.

As Warren writes, “The stock market and gross domestic product keep going up, while families are getting squeezed hard by an economy that isn’t working for them. … they see a government that bows and scrapes for big corporations, big banks, big oil companies and big political donors — and they know this government does not work for them.” She states that we the people should look carefully at any new laws that surface in Congress or get to the President’s desk to be signed and examine whose interests they serve. The big corporations, their lobbyists, and the elected officials whose campaigns they and their wealthy allies funded will try to take advantage of the situation to push their agendas and benefit their interests. [2]

She warns us to be on the lookout for “trade deals negotiated in secret, with chief executives invited into the room while the workers whose jobs are on the line are locked outside. … tax deals that carefully protect … billionaires and big oil and other big political donors, while working families just get hammered.” She also is concerned that the big Wall Street financial corporations will try to weaken regulation despite their billions in profits and huge executive pay packages, which they are reaping only because of huge public bailouts after they crashed our economy in 2008.

Given Warren’s warning, it’s little surprise that the House this week passed a massive package extending tax breaks primarily for banks, investment firms, and other wealthy interests, such as NASCAR race track owners, filmmakers, racehorse owners, and rum producers. However, the bill fails to extend tax breaks for low income families and for child care expenses. There are some benefits for teachers, commuters, individuals in states without an income tax, and small businesses, but the bulk of the benefits go to wealthy corporations and individuals. [3]

The more than 50 tax breaks included in the bill would add nearly $42 billion to the budget deficit over the next decade. Surprisingly, there seems to be little concern over this cost. Previously, less expensive initiatives (that benefited the unemployed, low income families, and families with child care expenses) were defeated, supposedly because they were unaffordable.

The President has threatened to veto the bill, saying it favors large corporations over families and the middle class. The Senate’s leaders have not yet indicated what they plan to do with this legislation from the House.

I encourage you to contact your Senators and the President to let them know that these tax breaks for big corporations and wealthy individuals, if warranted, should be paid for by closing loopholes benefiting these same groups. Furthermore, I’d encourage you to note that the focus of any tax breaks and other legislation should be on helping low and middle income families and individuals, not wealthy corporations and individuals. Let’s help those who need it the most, not those who already have the most.

[1]       Warren, E., 11/11/14, “It’s time to work on America’s agenda,” The Washington Post

[2]       Warren, E., 11/11/14, see above

[3]       Ohlemacher, S., 12/4/14, “House votes to extend tax breaks through December,” The Boston Globe from the Associated Press

VOTING MATTERS

ABSTRACT: Election Day is just over a week away. Although it’s easy to look at the dysfunction in Washington and the huge amounts of money being spent on campaigns and feel that voting and participating in the election doesn’t matter, that would be wrong. There will be lots of close elections this year all across the country – both for elected officials and for citizen’s initiatives that will be on the ballot. There are vested interests, usually corporations and wealthy individuals, and in many cases the Republicans have been their allies, who are trying to keep or discourage people from voting. Therefore, it is important to get out and vote, and to encourage others to do so, to send a message that these efforts to suppress voting, which are blatantly anti-democratic, won’t work.

There are many good candidates and important citizens’ initiatives on the ballot that deserve and need our votes. Even if there aren’t candidates or ballot questions that are important to vote for in your district, you can make phone calls to encourage people to vote (in your district or others) and you can donate money to out-of-your-district candidates that share your views or to organizations that support your views. If you want to support progressive candidates, an easy way to do so is through the Progressive Change Campaign Committee (PCCC) at http://boldprogressives.org/. Move On.org is another, similar organization that you can support through donations, signing their petitions on a range of issues, or supporting out-of-your-district candidates through them: http://front.moveon.org/.

This is going to be a close election at the local level and nationally. The implications for our democracy are extremely significant. We need to send a message to our politicians that we, the voters, are the voice of democracy and that we want government that works. They need to know that we want them to represent our interests, not those of large corporations and the very wealthy.

FULL POST: Election Day is just over a week away. Although it’s easy to look at the dysfunction in Washington and the huge amounts of money being spent on campaigns and feel that voting and participating in the election doesn’t matter, that would be wrong.

There will be lots of close elections this year all across the country – both for elected officials and for citizen’s initiatives that will be on the ballot – where a few voters will make all the difference. The results in these races will matter. Moreover, there are vested interests, usually corporations and wealthy individuals, and in many cases the Republicans have been their allies, who are trying to keep or discourage people from voting. They do so because they know that their supporters will vote and the lower they can keep the voter turnout, the more likely they are to win.

They work to keep voting down in two main ways. First, they enact laws and voting procedures that make it harder to vote. These voting barriers primarily affect low income and minority voters. They also disproportionately affect seniors and women. These groups are more likely to vote for progressive politicians and policies, as well as for Democrats. Therefore, these wealthy and corporate interests want to reduce voting by people in these groups. [1] [2] [3]

Second, the wealthy and corporate interests engage in massive funding of negative campaign ads. These discourage voters and make them cynical. They also introduce doubts into voters’ minds about good candidates. The huge number of these negative ads and their repetition drowns out other information and shifts voters’ perceptions even when the message presented is distorted or false. This applies to ballot questions as well as candidates.

Therefore, it is important to get out and vote, and to encourage others to do so, simply to send a message that these efforts to suppress voting, which are blatantly anti-democratic, won’t work. The higher the voter turnout, the closer we are to having the true democracy that is America’s ideal.

There are many good candidates on the ballot that deserve and need our votes. In some cases, it may not be an ideal candidate, but there often are significant differences between the candidates, nonetheless. There also are important citizens’ initiatives or questions on the ballot that will make important policy changes. [4]

Even if there aren’t candidates or ballot questions that are important to vote for in your district, there are two things you can do to help candidates in other districts, if you are so motivated. You can make phone calls to encourage people to vote (i.e., get out the vote or GOTV calls) in your district or others. These are very important because without a Presidential election on the ballot turnout tends to be low, and, as I mentioned above, there are active efforts to keep and discourage people from voting. Therefore, encouragement to get out and vote can make a difference.

The other thing you can do is donate money to out-of-your-district candidates that share your views or to organizations that support your views. Any amount helps. If many people give just $5.00, it can add up to a significant amount.

If you want to support progressive candidates – what some people are referring to as the Elizabeth Warren wing of the Democratic Party – an easy way to do so is through the Progressive Change Campaign Committee (PCCC) at http://boldprogressives.org/. Key issues for PCCC are taking back our democracy from wealthy individuals and corporations, expanding Social Security, fixing Wall St., and addressing the burden of student loan debt. If you click on the collage of four faces at the top of their web page, you will get a list of candidates they support. You can easily decide which ones you’d like to support and how much to contribute (as little as $3). If you click on the Call Out The Vote box right next to the faces, you’ll be given information on how you can make GOTV calls.

Move On.org is another organization that you can support through donations, signing their petitions on a range of issues, or supporting out-of-your-district candidates through them: http://front.moveon.org/. They support issues and candidates that are similar to those of PCCC.

This is going to be a close election at the local level and nationally. The implications for our democracy are extremely significant. We need to send a message to our politicians that we, the voters, are the voice of democracy and that we want government that works. They need to know that we want them to represent our interests, not those of large corporations and the very wealthy.

[1]       Moyers, B., 10/24/14, “The Fight — and the Right — to Vote,” Moyers & Company (http://billmoyers.com/episode/fight-right-vote/)

[2]       Boston Globe Editorial, 10/18/14, “Voter ID laws: Study proves the obvious,” The Boston Globe

[3]       Dubose, L., 9/1/14, “The party of Lincoln takes aim at Black voters,” The Washington Spectator

[4]       Hightower, J., Oct. 2014, “Election 2014: A politics that matters is bubbling up,” The Hightower Lowdown (http://www.hightowerlowdown.org/)

WHAT IT WILL TAKE TO ADDRESS THE PROBLEMS WE FACE

ABSTRACT: Our country has important problems that need to be addressed. Not only aren’t they being addressed, but serious proposals (let alone efforts) to address them are not even on the table for discussion. These problems include:

  • Stagnating wages and a stagnating economy;
  • Corporations doing very well but employees losing ground and unemployment stubbornly high;
  • Parents working but their families struggling to make ends meet; and
  • Public infrastructure crumbling and public education suffering cuts.

From 1900 through the 1970s, our national government responded to these kinds of problems and challenges with job and infrastructure programs, support for families and the unemployed, labor laws, corporate regulation, and investments in education. Grassroots movements improved opportunities and justice for minorities and women.

Not everything was perfect and ultimate solutions were often not achieved, but real progress was made. The public had confidence that our country was on a path that would lead to better lives for the next generation.

Today, at a national level and in many states, our growing problems and the lack of serious discussion of solutions (let alone action) has left many of us skeptical about the future and cynical about government. To turn this around, we need strong, bold, and uncommon leaders, and an energized citizenry that is politically informed and engaged.

I encourage you to find a way to contribute to this effort. It will take small contributions from everyone and big contributions from some of us to get our country back on track.

FULL POST: Our country has important problems that need to be addressed. Not only aren’t they being addressed, but serious proposals (let alone efforts) to address them are not even on the table for discussion. [1]

Wages have been stagnant for the middle and working class for 30 years, yet even an increase in the minimum wage to reflect inflation is blocked in Congress. Corporations have record profits and stock prices, yet employees’ pay and benefits are falling. Corporations continue to move jobs overseas and hire increasing numbers of part-time employees or consultants to whom they give few benefits and no job security. Nonetheless, efforts to reign in corporations’ and executives’ power are rare. And strengthening workers’ and shareholders’ voices through unions and greater corporate democracy is barely mentioned.

Most parents, even those with young children, are in the workforce now; a dramatic change from the 1950s when most mothers stayed home with children. Yet our supports for working parent are limited and have not improved since 2000, despite declining economic security and stability for families.

Our public infrastructure – our roads, bridges, and public buildings including schools and courthouses – is crumbling but there’s no serious discussion, let alone effort, to address this problem. We face catastrophic effects from global climate change, from more severe storms and weather patterns to rising sea level, yet our only response is disaster relief.

Our public education system (including K-12, higher education, and early childhood education) is suffering from funding cuts. Tremendous inequities are present in educational opportunity and outcomes. Gaps based on race, ethnicity, and native language have shrunk a bit but remain wide; gaps based on class are growing. Students partaking of higher education are taking on unprecedented and crushing debt to do so. And afterward they face a job market with high unemployment and limited opportunities. Our efforts to reduce unemployment and provide assistance to those who are unemployed are inadequate and are major contributors to a stagnant economy.

In the period from 1900 through the 1970s, including the Great Depression, our national government responded to these kinds of problems and challenges. The New Deal, large-scale jobs programs, and the World War II mobilization provided jobs, supported families and the unemployed, and built infrastructure. Labor laws were passed that addressed pay, work hours, and safety issues and supported workers in organizing to balance employers’ power and obtain fair wages and working conditions. Corporations were regulated through anti-monopoly laws and safety regulations. In the 1930s and 1940s, new laws reformed the financial system and prevented another financial and economic crash until after their repeal in the 1980s and 1990s. In the 1960s, we engaged in a War on Poverty.

Investments in education from kindergarten through college produced a better educated and more productive workforce. Public higher education was practically free up until the 1980s. The civil rights movement and the women’s movement led to substantial national legislation and action that improved rights and opportunities for minorities and women.

Not everything was perfect and ultimate solutions were often not achieved, but real progress was made. The public had confidence that our country was on a path that would lead to better lives for the next generation.

Today, at a national level and in many states, our growing problems and the lack of serious discussion of solutions (let alone action) has left many of us skeptical about the future and cynical about government. To restore the optimism of the public, to realize the promise of democracy, and to address the problems we face, we will need two things: strong, bold, and uncommon leaders, and an energized citizenry that is politically informed and engaged. We see these key elements of change in the history of the labor movement, the Progressive Era, the civil rights movement, the War on Poverty, and the women’s movement. We need such activism and energy again today to get our great country back on track. I encourage you to find a way to contribute to this effort. It will take small contributions from everyone and big contributions from some of us to get our country back on track.

In my next post, I will share examples of leadership and citizen activism from the local level that are addressing important problems. Given the current level of dysfunction in the federal government, near-term efforts to tackle these issues will probably have to occur at the local and state levels.

[1]       Kuttner, R., 9/30/14, “In political system disconnected from society’s ills, remedies pushed to fringes of public debate,” The American Prospect (Much of this post is a summary of Kuttner’s article.)

TITLE: CORPORATOCRACY OR DEMOCRACY?

ABSTRACT: Here are three current examples of corporate power and influence.

Tax dodging: Burger King is the latest corporation to announce plans to move its legal headquarters to a foreign country as a way to avoid paying taxes in the US; a so-called “inversion.” Corporations suffer no consequences as a person would if he or she renounced US citizenship. The tax burden increases on the rest of us to pay what these corporations don’t. I encourage you to contact President Obama and urge him to take action to prevent, or at least discourage, these corporate inversions.

Fracking: In an effort to get favorable treatment of fracking in North Carolina (and elsewhere), the oil and gas corporations have been telling legislators and the public that there are no documented cases of fracking contaminating water supplies. That lie was dramatically exposed recently when the state of Pennsylvania released previously hidden details of 243 cases of water contamination between 2008 and 2014.

High-speed Internet: The fastest Internet access in the US is in Chattanooga, TN. It is about 50 times faster than the US average because it is provided by the municipally-owned electric company. The big cable companies had vigorously tried to prevent Chattanooga from building a publicly-owned network. They don’t want competition for their stranglehold on the slower, more expensive internet service that they provide. Despite their multi-billion dollar annual profits, internet service in the US is worse than that in thirty other countries, including Uruguay.

Conclusion: Corporate power and influence over public policies and our governments is achieved through campaign spending and lobbying. It is hurting our health, our quality of life, and our pocketbooks. It’s time to elect leaders who will stand up to corporations; stand up for consumers, workers, and the middle class; and change our campaign finance and lobbying laws. This is essential to preventing our democracy from becoming a corporatocracy.

FULL POST: Here are three current examples of corporate power and influence that affect our daily lives.

Tax dodging: Burger King is the latest corporation to announce plans to move its legal headquarters to a foreign country as a way to avoid paying taxes in the US; a so-called “inversion.” Although it would, in effect, renounce its US citizenship, everything else remains the same: the same executives and employees, the same stores and facilities, the same customers, and the same benefits from the publicly supported infrastructure in the US, including education of its employees, public benefits for its low wage employees (food stamps, subsidized health care and child care, etc.), transportation, police, fire, and military protection, etc. The only thing that does change is that it pays fewer taxes in the US.

As Senator Elizabeth Warren noted, “If a person did that we’d call them a freeloader. We’d insist they pay their fair share. And that’s exactly what our tax laws do for people who renounce their American citizenship.” However, corporations suffer no consequences; they are treated better than a person would be.

Senator Dick Durbin stated that, “With every new corporate inversion, the tax burden increases on the rest of us to pay what these corporations don’t.” This growing problem is an example of the tremendous corporate influence on our politics and policies through campaign spending and lobbying. [1]

I encourage you to contact President Obama and urge him to take action to prevent, or at least discourage, these corporate inversions.

Fracking: In an effort to get favorable treatment of fracking in North Carolina (and elsewhere), the oil and gas corporations have been telling legislators and the public that there are no documented cases of fracking contaminating water supplies. That lie was dramatically exposed recently when the state of Pennsylvania released previously hidden details of 243 cases of water contamination between 2008 and 2014.

The industry has pressed hard to keep cases of water contamination from being made public. Pennsylvania’s inspector general stated that problems with fracking have overwhelmed state regulators who were “unprepared to effectively administer laws and regulations to protect drinking water and unable to efficiently respond to citizen complaints.” [2]

High-speed Internet: The fastest Internet access in the US is in Chattanooga, TN. It is about 50 times faster than the US average because it is provided by the municipally-owned electric company. This has spurred the local economy, including a growing high tech sector.

This all happened because the electric company needed a high-speed network but the country’s big cable companies wouldn’t be offering service there for a decade or more. So Chattanooga raised $220 million through bond financing and won $111.5 million in federal stimulus dollars and built the network in 3 years.

The big cable companies had vigorously tried to prevent Chattanooga from building a publicly-owned network (as they have in other places). Chattanooga’s electric company had to lobby the state government for permission to participate in the telecom market. It had to win several court battles with Comcast and the state cable association.

Twenty states prohibit or restrict municipalities from doing what Chattanooga has done due to lobbying by the big telecom and cable companies. They don’t want competition for their stranglehold on the slower, more expensive internet service that they provide. They are taking legal steps to stop any further expansion of Chattanooga’s internet service, calling on the Federal Communications Commission (FCC) to block its (and another city’s) plans to expand public high-speed internet services for local residents.

Meanwhile, Comcast and Time Warner, 2 of the giants in the field, are seeking approval for a mega-merger, saying it won’t hurt competition or quality of service. However, Time Warner just paid $1.1 million to resolve an investigation by the FCC that found that it did not properly report multiple network outages, which is a violation of FCC rules.

Furthermore, despite their multi-billion dollar annual profits, internet service in the US is worse than that in thirty other countries, including Uruguay. With the deregulation and glorification of big business corporations, we’ve seen America go from being a leader in many fields to falling further and further behind even many third world countries, such as in Internet speed and access. [3]

Conclusion: Corporate power and influence over public policies and our governments is achieved through campaign spending and lobbying. It is hurting our health, our quality of life, and our pocketbooks. It’s time to elect leaders who will stand up to corporations; stand up for consumers, workers, and the middle class; and change our campaign finance and lobbying laws. This is essential to preventing our democracy from becoming a corporatocracy.

[1]       Germanos, A., 8/27/14, “Burger King ‘inversion’ allows it to profit off public, dodge taxes, say critics,” Common Dreams (http://www.commondreams.org/news/2014/08/27/burger-king-inversion-allows-it-profit-public-dodge-taxes-say-critics)

[2]       FishOutofWater, 8/29/14, “Pennsylvania makes public 243 cases of fracking contaminated water, “ Daily Kos (http://www.dailykos.com/story/2014/08/29/1325694/-Pennsylvania-Makes-Public-243-Cases-of-Fracking-Contaminated-Water)

[3]       Steven D, 8/30/14, “Fastest Internet in US? It’s Chattanooga, TN, thanks to local and fed $$$ (Ps. Big cable very angry),” Daily Kos (http://www.dailykos.com/story/2014/08/30/1325887/-Fastest-Internet-in-US-It-s-Chattanooga-TN-Thanks-to-Local-and-Fed-Ps-Big-Cable-Very-Angry)

DEMOCRATIZING CAMPAIGN FINANCING

ABSTRACT: We need to change our system of financing political campaigns. Candidates need to be able to run viable campaigns based on the financial support of average voters, and without the support of the small number of wealthy donors who dominate current campaign funding. Many people who would make great elected representatives don’t even run for office because they don’t have access to the money needed to run a credible campaign.

We can make small contributions more valuable by matching them with public funds. The Government by the People Act (HR 20) has been introduced in the US House and would match contributions of up to $150 with $6 of public funds for every dollar of private funds. Campaign financing systems that match small contributions are already in place in states from Maine to Arizona and in New York City. They amplify the voice of small donors and blunt the influence of large donors. As a result, the number of people running and the competition for elected offices has increased. To encourage more voters to be contributors, a voucher or tax credit could be provided to each citizen to be used to support a candidate for federal office.

By democratizing campaign financing, we regain democracy by getting our elected representatives to represent us instead of big campaign donors. In previous posts, I mentioned the effort to raise $12 million to fund the Mayday PAC, which would support candidates for Congress who support campaign finance reform. I’m happy to report that the fundraising effort was successful and the Mayday PAC is now selecting the 5 or so races that it will target in 2014.

FULL POST: We need to change our system of financing political campaigns. Candidates need to be able to run viable campaigns based on the financial support of average voters. As long as the support of the small number of wealthy donors who contribute more than $200 (less than 1% of the population) is necessary, our elected representatives are likely to at least lean toward representing those donors’ views and interests, instead of the broader, public interest. Keep in mind that not only does the candidate with the most money usually win, but many people who would make great elected representatives don’t even run for office because they don’t have access to the money needed to run a credible campaign under the current campaign financing system.

One solution would be to remove all private money from public elections. Campaigns would be paid for with public money. Proposals to do this have been put forward and such legislation has been filed in Congress, but this approach is unlikely to garner much support and would almost certainly require a Constitutional amendment.

A more feasible strategy, supported by individuals on both the right and left, wouldn’t remove private money from public elections but would make small contributions much more valuable and make campaigns based on them much more possible.

We can make small contributions more valuable by matching them with public funds. The Government by the People Act (HR 20) has been introduced in the US House and would match contributions of up to $150 with $6 of public funds for every dollar of private funds. Therefore, a $50 contribution would provide the candidate with $350. To qualify for the matching funds, a candidate for Congress would have to raise $50,000 in contributions of $150 or less from at least 1,000 donors in his or her home state. The candidate could not accept contributions of more than $1,000, could not accept PAC money, and would be strictly limited in the use of his or her own money in the campaign. Including these contribution caps is essential to limit the role of wealthy interests and is a reasonable and legal trade-off for receiving public matching funds. A similar bill, the Fair Elections Now Act, has been introduced in the US Senate.

You can get lots more information and all the details of these bills here (http://ofby.us/) and sign on as a citizen co-sponsor here (http://ofby.us/citizen-cosponsor/). Contacting your Representative and Senators to let them know you support this legislation would be valuable as well.

Forty groups have already endorsed this legislation: good government groups such as Common Cause, public interest groups such as the US Public Interest Research Group (PIRG), environmental groups such as the Sierra Club, labor unions such as the National Education Association and the Communications Workers of America, and civil rights groups such as the NAACP.

Campaign financing systems that match small contributions, as these bills in Congress would, are already in place in states from Maine to Arizona and in New York City. They amplify the voice of small donors and blunt the influence of large donors. They also allow average citizens to run competitive campaigns. As a result, the number of people running and the competition for elected offices has increased where these financing systems are in place. This results in greater representation of the common interest and reduced influence for special interests.

To increase the number of small contributions and to encourage more voters to be contributors, a voucher or tax credit could be provided to each citizen to be used to support a candidate for federal office. The voucher or tax credit, in effect, makes the contribution free for the voter. The Government by the People Act proposes a $25 tax credit. Amounts ranging from $25 to $200 have been proposed. Increased numbers of contributors results in a more engaged and committed public, as well as elected officials who are more responsive to the public good. [1]

Using matching funds, along with a voucher or tax credit, would give candidates a way to fund their campaigns through small contributions. As a result, candidates would have an incentive to work hard   from one election to the next to give the average voter (not just the wealthy ones) a reason to contribute to them. The increased number and value of small-dollar contributions can remove the influence of big money and big donors from campaigns. By democratizing campaign financing, we regain democracy by getting our elected representatives to represent us instead of big campaign donors.

We do need constitutional changes to control the spending outside of candidates’ campaigns. This will require reversing the Supreme Court’s Citizens United and McCutcheon decisions by making it clear that corporations do not have the same rights as human beings and that unlimited political spending is not the same as freedom of speech and can be regulated and limited in the interest of preserving democracy and preventing corruption. Resolutions calling for a Constitutional amendment have been introduced in both the House and Senate. In the Senate, a constitutional amendment allowing the regulation of money in politics has been approved in a committee and is headed to the floor for a vote of the full Senate.

The Constitutional amendment process is long and difficult. However, right now, we can make enormous progress on the financing of candidates’ campaigns in a much easier and quicker way   through changes in campaign finance laws. To create pressure for politicians to face up to this campaign financing crisis, we all need to communicate with our elected officials and also to support the election of candidates who will address this problem.

In previous posts, I mentioned the effort to raise $12 million to fund the Mayday PAC, which would support candidates for Congress who support campaign finance reform. I’m happy to report that the fundraising effort was successful and the Mayday PAC is now selecting the 5 or so races that it will target in 2014. [2] If you’d like to suggest a candidate it should support or oppose you can do so here: https://mayday.us/suggest-a-candidate/.

Reforms of our campaign finance system are critical to reclaiming democracy and moving back toward the fundamental principle of one person, one vote. In the current system, it’s dollars that matter; money determines who runs, who wins, and what policies are enacted. Right now, big donors – wealthy individuals and corporations – are drowning out the voices of ordinary citizens. We must fight back.

[1]       Overton, S., 11/13/12, “The participation interest,” The Georgetown Law Journal (http://georgetownlawjournal.org/articles/the-participation-interest/)

[2]       Lessig, L., 6//4/14, “What’s so bad about a Super PAC?” https://medium.com/law-of-the-land/whats-so-bad-about-a-superpac-c7cbcf617b58

THE RISE OF DARK MONEY IN CAMPAIGNS

ABSTRACT: An increasing amount and proportion of election spending is coming from non-profit organizations that do not disclose their donors. This so-called “dark money” keeps voters in the dark about who is trying to influence their votes. Legislation to require disclosure of donors to “dark money” groups has been introduced at the federal level and in a number of state legislatures.

We need Representatives and Senators in Congress who will reform our campaign finance system. Ironically, there is a super PAC being formed to elect Congress people who will reform our campaign finance system. I urge you to join this effort now. Please go to the MAYDAY Super PAC site (https://mayday.us/old) to participate.

FULL POST: An increasing amount and proportion of election spending is coming from non-profit organizations that do not disclose their donors. They claim to be social welfare organizations [501(c)(4)s] or professional trade associations [501(c)(6)s] despite spending millions of dollars on political activity. [1] This so-called “dark money” keeps voters in the dark about who is trying to influence their votes.

In the 2014 election cycle to-date, three times as much dark money has been spent as had been spent at this point in 2012, even though that was a presidential election year. Furthermore, 2014 dark money spending to-date is almost 20 times that of the last mid-term election in 2010. [2] If the 2014 spending pattern is the same as in 2010, over $400 million of dark money will be spent by election day.

So far in the 2014 election cycle for the US Senate, groups outside and supposedly independent of candidates’ campaigns, are responsible for 59% of the TV ads aired, a big increase from 2012. More than half of those ads have been paid for by “dark money” groups that don’t disclose their donors. [3]

Legislation to require disclosure of donors to “dark money” groups has been introduced at the federal level and in a number of state legislatures. The federal DISCLOSE Act was filibustered in the US Senate in September 2010. (There were 59 votes in favor, a clear majority, but one short of the 60 needed to overcome the filibuster.) A new version of the bill was introduced in 2012 but is stalled in the Senate.

In Massachusetts, and in some other states as well, legislation is progressing that would increase the disclosure of donors to political spending and the timeliness with which it must occur. The MA law would require disclosure of all donors promptly, before the election, so voters would know who was trying to influence their votes. [4] (If you live in Massachusetts, now would be a good time to call your legislators and urge them to support the timely disclosure of contributors to political spending). Super PACs are already running ads focused on the November election for Massachusetts’ Governor. [5] And in last year’s contest for Mayor in Boston, organizations independent of the candidates’ campaigns spent over $3.8 million, much of it dark money. This spending was more than two-thirds as much as the campaigns of the two finalists spent on their own ($5.4 million). [6]

The use of dark money is growing in part because wealthy individuals’ millions of dollars of campaign spending is receiving increased attention. Many of these wealthy individuals prefer to remain anonymous and therefore prefer to channel their exorbitant campaign spending through groups that do not report their donors. [7] Corporations similarly prefer to remain anonymous when they engage in political spending. So they are channeling their contributions through dark money groups as well. [8]

The Open Secrets project of the Center for Responsive Politics (http://www.opensecrets.org/) has been digging into the money spent in the 2012 campaigns by Super PACs and non-profit organizations. It has now documented a web of over a dozen such organizations that transferred money among themselves. This served to hide the true sources of campaign spending, delay any reporting of it, and circumvent IRS limits on political activity by non-profit, tax exempt organizations. [9] (See my post of 2/28/14 for more details.)

We need Representatives and Senators in Congress who will reform our campaign finance system to:

  • Require timely reporting of all political spending and contributors, so voters know before they vote who is spending money to influence their votes;
  • Severely limit political activity by non-profit, tax exempt organizations; and
  • Improve enforcement of existing campaign finance laws.

Ironically, there is a super PAC being formed to elect Congress people who will reform our campaign finance system. I urge you to join this effort now, as there is a July 4th deadline for raising $5 million to get this effort off the ground. Please go to the MAYDAY Super PAC site (https://mayday.us/old) to participate. If you’d like to make a contribution or pledge to this effort, you can do so through my pledge page at: https://my.mayday.us/t/35e1-John-Lippitt#_=_. (See my post of 6/10/14 for more information on the MAYDAY Super PAC.)

[1]       Center for Responsive Politics, 4/30/14, “OpenSecrets.org provides testimony, data for Senate Rules hearing on dark money,” https://www.opensecrets.org/news/2014/04/opensecrets-org-provides-testimony-data-for-senate-rules-hearing-on-dark-money/

[2]       Maguire, R., 4/30/14, “How 2014 is shaping up to be the darkest money election to date,” https://www.opensecrets.org/news/2014/04/how-2014-is-shaping-up-to-be-the-darkest-money-election-to-date/

[3]       Center for Responsive Politics, 4/30/14, see above

[4]       Phillips, F., 6/18/14, “Bill would increase super PAC disclosures,” The Boston Globe

[5]       Miller, J., 4/28/14, “Super PAC launches ads against Charlie Baker, Common Cause decries outside spending,” The Boston Globe

[6]       McMorrow, P., 11/12/13, “Citizens United comes to local races,” The Boston Globe

[7]       Gold, M., 5/30/14, “Attacks drive GOP donors to stealth nonprofits,” The Boston Globe from The Washington Post

[8]       Lessig, L., 6//4/14, “What’s so bad about a Super PAC?” https://medium.com/law-of-the-land/whats-so-bad-about-a-superpac-c7cbcf617b58

[9]       Maguire, R., 12/3/13, “At least 1 in 4 dark money dollars in 2012 had Koch links,” OpenSecretsblog (http://www.opensecrets.org/news/2013/12/1-in-4-dark-money-dollars-in-2012-c.html)

A SUPER PAC TO END SUPER PACs – YOU CAN HELP!

ABSTRACT: We need to elect US Senators, Representatives, and ultimately a President who will support an end to Super PACs and unlimited money in our political campaigns. Lawrence Lessig is undertaking an innovative and counter-intuitive strategy to do so: creating a Super PAC to elect Congress people who will support the needed changes in our campaign financing laws. Lessig and his organization, Rootstrikers (http://www.rootstrikers.org/#!/), have developed a well thought out plan to do this, and you can be part of it.

 

In the 2014 elections, they plan to target a small number of races with the goal of winning at least 5 of them – if they can raise the $12 million needed to fund their plan. The plan raises half of the $12 million using a crowd-funded, kickstarter-type approach. Lessig has pledged to find a match for the $6 million raised through crowd-funding. The initial campaign was launched on May 1. In thirteen days, the targeted $1 million was raised, with 13,000 contributors giving an average of $87 per contribution. In June, the second round was launched with the goal of raising the other $5 million by July 4.

For more information and to participate in this effort, please go to the MAYDAY Super PAC site (https://mayday.us/old). If you’d like to make a contribution or pledge to this effort, you can do so through my pledge page at: https://my.mayday.us/t/35e1-John-Lippitt#_=_.

FULL POST: We need to elect US Senators, Representatives, and ultimately a President who will support an end to Super PACs and unlimited money in our political campaigns. However, this seems like a Catch-22 because these elected officials have been successful using the current system. For any candidate to single-handedly fight the current system is like unilateral disarmament; it’s essentially guaranteed to be a losing strategy.

So how do we solve this conundrum? Harvard Law School Professor and campaign reform advocate, Lawrence Lessig [1], is undertaking an innovative and counter-intuitive strategy: creating a Super PAC to elect Congress people who will support the needed changes in our campaign financing laws.

Lessig and his organization, Rootstrikers (http://www.rootstrikers.org/#!/), have developed a well thought out plan to do this [2], and you can be part of it.They are creating a Super PAC to literally end Super PACs. In the 2014 elections, they plan to target a small number of races with the goal of winning at least 5 of them – if they can raise the $12 million needed to fund their plan. This would allow them to learn what it takes to win campaigns and, second, by winning, to convince others to take this effort seriously. Then, they plan to undertake a much larger effort in 2016.

The plan raises half of the $12 million using a crowd-funded, kickstarter-type approach. The money will be raised in two stages – first, by raising $1 million in thirty days, and then, if that goal is met, raising another $5 million in the next thirty days. Lessig has pledged to find a match for the $6 million raised through crowd-funding, so that by July 4 the Super PAC would have the $12 million needed for the targeted 2014 campaigns.

The initial campaign was launched on May 1. This is “May Day,” which evokes the distress call, “MAYDAY,” and provides the name of the Super PAC: the MAYDAY PAC. In thirteen days, the targeted $1 million was raised, with 13,000 contributors giving an average of $87 per contribution. (I contributed $25.) In June, the second round was launched with the goal of raising the other $5 million by July 4. If that’s successful and the additional matches are found, the campaign will be kicked off with a goal of winning at least five races in 2014. This will build the momentum needed for a much bigger Super PAC and campaign in 2016. [3]

For more information and to participate in this effort, please go to the MAYDAY Super PAC site (https://mayday.us/old). If you’d like to make a contribution or pledge to this effort, you can do so through my pledge page at: https://my.mayday.us/t/35e1-John-Lippitt#_=_.

I do believe that our campaign financing system is at the root of the problems of our democracy and our society. I’ll share more information about the current state of our campaign finance system and background on this MAYDAY effort in subsequent posts. You can find past posts on this topic by clicking on the Campaigns: Financing & Voting category in the right sidebar of my blog (below the list of recent posts, the monthly archives, and the FOLLOW button).

[1]       For more information about Lawrence Lessig, see http://www.lessig.org/about/ or http://en.wikipedia.org/wiki/Lawrence_Lessig.

[2]       Listen to Lessig’s 14 minute TED talk at http://www.ted.com/talks/lawrence_lessig_the_unstoppable_walk_to_political_reform?utm_source=twitterfeed&utm_medium=twitter&utm_campaign=Feed:+TEDTalks_video+(TEDTalks+Main+(SD)+-+Site)&utm_content=TED+talks&utm_term=NTechMedia.

[3]       Lessig, L., 6//4/14, “What’s so bad about a Super PAC?” https://medium.com/law-of-the-land/whats-so-bad-about-a-superpac-c7cbcf617b58 (This blog post is a summarized excerpt from this article.)

STOPPING THE CORRUPTION OF MONEY IN POLITICS

ABSTRACT: There’s good news on multiple fronts in the effort to stop the corruption of big money in US political campaigns. In the US House, the Government by the People Act (HR 20) has been introduced. It would match small donations – up to $150 – from individuals 6 to 1 so that, for example, a $25 donation would be worth $175 to a candidate running for Congress. In addition, every person who files an income tax return could get a $25 credit for small donations to Congressional candidates. A similar bill, the Fair Elections Now Act, has been introduced in the US Senate.

Meanwhile, last November, the IRS put out proposed regulations to severely limit political activity by tax exempt, non-profit organizations, which spent $300 million on political activities in the 2012 elections. Such regulations would be a huge step toward ending the huge amounts of “dark money” – where the source was hidden – that flowed into campaigns in 2012.

These reforms of our campaign finance system are a critical step in moving back toward the fundamental principle of one person, one vote. In the current system, it’s dollars that matter. In various ways, big donors buy election results. The Supreme Court has ruled that the money of the wealthy and corporations cannot be limited or regulated, because it is speech. Therefore, we must amplify the voices of the rest of us and require disclosure of all campaign contributions and spending. Otherwise, the integrity and legitimacy of our democracy is threatened, and people will justifiably conclude that the system is rigged and that their voices and interests are being drowned out by the money of wealthy individuals and corporations.

FULL POST: There’s good news on multiple fronts in the effort to stop the corruption of big money in US political campaigns. Bills have been filed in Congress to amplify and encourage the voices and money of small donors. The IRS has proposed rules that would require greater disclosure and limit political spending by tax exempt groups.

In the US House, the Government by the People Act (HR 20) has been introduced with 130 House members as co-sponsors (out of 435 total members). It would match small donations – up to $150 – from individuals 6 to 1 so that, for example, a $25 donation would be worth $175 to a candidate running for Congress.

To qualify for the matching funds, a candidate would have to raise $50,000 in contributions of $150 or less from at least 1,000 donors in their home state. The candidate could not accept contributions of more than $1,000, could not accept PAC money, and would be strictly limited in the use of their own money in the campaign.

In addition, every person who files an income tax return could get a $25 credit for small donations to Congressional candidates. (A similar tax credit existed from 1972 to 1986.) Disclosure laws would be tightened so the source of all contributions would have to be publicly disclosed. [1][2]

A similar bill, the Fair Elections Now Act, has been introduced in the US Senate. It shares the goal of super-sizing the influence of small donors and allowing candidates to run competitive races for Congress while relying on small donations from regular people.

You can get lots more information and all the details of these bills here (http://ofby.us/) and sign on as a citizen co-sponsor here (http://ofby.us/citizen-cosponsor/).

Forty groups have already endorsed this legislation: good government groups such as Common Cause, public interest groups such as the US Public Interest Research Group (PIRG), environmental groups such as the Sierra Club, labor unions such as the National Education Association and the Communications Workers of America, and civil rights groups such as the NAACP.

Campaign funding systems that match small contributions, as the bills in Congress would, are already in place in states from Maine to Arizona and in New York City. They amplify the voice of small donors and blunt the impact of large donations. This allows average citizens to run competitive campaigns. As a result, the number of people running and the competition for elected offices has increased where these matching systems are in place. This results in greater representation of the common interest and reduced influence for special interests.

Meanwhile, last November, the IRS put out proposed regulations to severely limit political activity by tax exempt, non-profit organizations. Abetted by the Supreme Court’s Citizens United decision, non-profit, tax exempt “social welfare” organizations spent $300 million on political activities in the 2012 elections. They can accept unlimited donations and do not have to disclose donors. They can run political ads, engage in other political activities, and make grants to other “social welfare” groups. Although the tax code says these organizations, known as 501(c)(4)s, cannot be engaged primarily in political activity, they easily got around this by claiming the ads and other activities were not political and had some kind of educational or civic purpose.

After ignoring this political activity for years, the IRS has now proposed excluding “candidate-related political activity” from the definition of social welfare activities. This would ban a wide range of political activities, unless they meet a strict nonpartisan test. Such regulations would be a huge step toward ending the huge amounts of “dark money” – where the source was hidden – that flowed into campaigns in 2012. These regulations on political activity should apply to any group, organized under any section of the IRS rules, that doesn’t have to disclose contributors, including business leagues (such as chambers of commerce) and unions. [3]

These reforms of our campaign finance system are a critical step in moving back toward the fundamental principle of one person, one vote. In the current system, it’s dollars that matter; 84% of the time the candidate with the most money won election to the House in 2012. Money also determines who runs and big donors drown out the voices of ordinary citizens in campaigns. In various ways, big donors buy election results.

The Supreme Court has ruled that the money of the wealthy and corporations cannot be limited or regulated, because it is speech. Therefore, we must amplify the voices of the rest of us (which the two bills in Congress will do) and require disclosure of all campaign contributions and spending. Otherwise, the integrity and legitimacy of our democracy is threatened, and people will justifiably conclude that the system is rigged and that their voices and interests are being drowned out by the money of wealthy individuals and corporations.

My next post will give examples of campaign spending that illustrate the need for reforms.

 

[1]       Hight, C., 2/6/14, “Government by the people, not the polluters,” The Huffington Post

[2]       Lioz, A., Feb. 2014, “The Government by the People Act,” Demos (http://www.demos.org/publication/government-people-act)

[3]       The Editorial Board, 2/18/14, “Change the rules on secret money,” The New York Times

HISTORY AND LEAKS MAKE CASE AGAINST “TRADE” TREATIES

ABSTRACT: Twenty years of experience with previous “trade” treaties and the recent leaks of draft language for the Trans-Pacific Partnership (TPP) make the case that the “trade” treaties currently in negotiation will not benefit the US economy, our workers, or our middle class. These treaties focus on and benefit multi-national corporations and investors, rather than trade and the public interest. (See my previous posts of 1/13, 1/8, 9/13/13, and 9/10/13 for more detail.)

The growing resistance to Fast Track authority and these new “trade” agreements in Congress and the public is fueled by growing data on the damaging impacts of the 20 year history of the North American Free Trade Agreement (NAFTA). The same claims are being made for the current trade treaties as were made for NAFTA: that they will promote economic growth, increase jobs, and reduce trade deficits or increase trade surpluses. However, the Mexican trade surplus ($2 billion in 1993) quickly turned into growing deficits, totaling $1 trillion over the 20 year life of NAFTA. With Canada, the other country in NAFTA, the story is similar.

It is estimated that NAFTA has eliminated almost 700,000 jobs in the US. NAFTA established the principle that US corporations could move production out of the US but import the goods produced back into the US without any tariffs or other disincentives. This undermines the wages and benefits of American workers and the middle class. In all three NAFTA countries, wages and benefits for workers have not kept up with increased worker productivity over the last 20 years.

Since NAFTA, the US has entered into trade agreements with Korea, China, and others. While the promise has always been growth in US jobs, our economy, and our trade balance, the result has typically been the opposite. The trade agreements of the past 20 years have cost our economy more than $1 trillion through increased trade deficits and close to a million jobs.

I urge you to contact your elected officials in Washington and tell them you have serious concerns about the “trade” agreements being negotiated. And that these “trade” agreements are too important and too far reaching to be approved quickly and quietly.

FULL POST: Twenty years of experience with previous “trade” treaties and the recent leaks of draft language for the Trans-Pacific Partnership (TPP) make the case that the “trade” treaties currently in negotiation will not benefit the US economy, our workers, or our middle class. These treaties focus on and benefit multi-national corporations and investors, rather than trade and the public interest. (See my previous posts of 1/13, 1/8, 9/13/13, and 9/10/13 for more detail.)

The latest leak has been of the environmental provisions of the TPP. They lack mandated standards and have weak enforcement provisions. They are even weaker than the provisions in previous trade agreements, such as the North American Free Trade Agreement (NAFTA). [1]

Those arguing for Fast Track consideration of the TPP and other treaties by Congress (i.e., short timeframe, no amendments, and no filibuster) argue that treaties should be negotiated by the President and the Executive Branch (and not fiddled with by Congress) and that treaties are generally negotiated behind closed doors. [2] However, the current trade negotiations have included extensive involvement and input from corporate interests but virtually no input from the public; from advocates for workers, the environment, or ordinary citizens; or from Congress and other elected officials (other than the President). Furthermore, the Fast Track process is not necessary to pass trade agreements. President Clinton implemented more than 130 trade agreements without the Fast Track process. [3]

The growing resistance to Fast Track authority and these new “trade” agreements in Congress and among the public is fueled by growing data on the damaging impacts of the 20 year history of the North American Free Trade Agreement (NAFTA). The same claims are being made for the current trade treaties as were made for NAFTA: that they will promote economic growth, increase jobs, and reduce trade deficits or increase trade surpluses. And TPP has specifically been described as NAFTA on steroids.

When NAFTA was being promoted for approval by Congress in 1993, it was stated that it would expand our trade surplus with Mexico, thereby creating 200,000 US jobs in two years and a million in 5 years. However, the Mexican trade surplus ($2 billion in 1993) quickly turned into growing deficits (of $16 billion in 1995, $65 billion in 2008, and $50 billion in 2013). Our trade deficit with Mexico has totaled $1 trillion over the 20 year life of NAFTA.

With Canada, the other country in NAFTA, the story is similar: our trade deficit of $11 billion in 1993 grew to $78 billion in 2008 and $28 billion in 2013. (The dramatic drop in the deficit after 2008 is due to reduced imports because of our Great Recession.) [4]

It is estimated that NAFTA has eliminated almost 700,000 jobs in the US, with 60% of them being in manufacturing. Most of the workers who lost jobs have experienced a permanent loss of income; if they have found other jobs, they pay significantly less. [5] Many workers have experienced long-term unemployment (more than 6 months), which is at historically high levels. Numerous other workers have simply dropped out of the labor force. All of this has led to increases in the costs of government assistance programs, including unemployment benefits and food assistance. [6]

NAFTA established the principle that US corporations could move production out of the US but import the goods produced back into the US without any tariffs or other disincentives. This undermines the wages and benefits of American workers and the middle class. It increases job insecurity and weakens labor unions’ ability to negotiate because of the threat that jobs will be moved out of the US. The result has been stagnant wages for all but the richest Americans and, therefore, growing income inequality. In all three NAFTA countries, the US, Canada, and Mexico, wages and benefits for workers have not kept up with increased worker productivity over the last 20 years. [7]

Even Mexican workers have not experienced any significant increase in wages. An important reason for this is that the export of cheap, subsidized corn from the US to Mexico undermined the livelihoods of an estimated 2.4 million Mexican farmers. This displaced Mexican farmers and led to increased immigration (legal and illegal) to the US. Due to the abundant supply of desperate workers, it also pushed down wages in the maquiladora factory zone (the area just south of the US border). [8]

Although Mexico has experienced increased trade and some job growth under NAFTA, the jobs, even those in manufacturing, have been at low wages. The average Mexican manufacturing wage is only 18% of the US wage and that percentage has grown only slightly. The poverty rate in Mexico is 51%, down only slightly from the 52% when NAFTA went into effect. There has been an increase in the availability of consumer goods, but environmental protections have had mixed results at best. Disposal of US waste in Mexico has increased, including, for example, a 500% increase in US exports of highly toxic, spent lead-acid car batteries, with minimal control to ensure environmentally safe handling of them. [9]

Under NAFTA, US corporations have attempted to weaken Canadian regulations on a range of issues, including offshore oil drilling, fracking, pesticides, and drug patents. [10] Mexico and Canada have paid $350 million to foreign corporations for claims that their laws, rules, regulations, or other actions reduce current and expected profits.

Since NAFTA, the US has entered into trade agreements with Korea, China, and others. While the promise has always been growth in US jobs, our economy, and our trade balance, the result has typically been the opposite. Since the 2012 agreement with Korea, the US trade deficit with Korea has increased by $8.5 billion and an estimated 40,000 jobs have been lost. Our trade deficit with China has soared to $294 billion in 2013 from $83 billion in 2001 when China was permitted to join the World Trade Organization. [11]

The trade agreements of the past 20 years have cost our economy more than $1 trillion through increased trade deficits and close to a million jobs. They are key reasons that unemployment is high and the economic recovery is so weak. Furthermore, the mitigation provisions for these past trade agreements, such as retraining for workers who lost their jobs, have been woefully inadequate and ineffective.

I urge you to contact your elected officials in Washington and tell them you have serious concerns about the “trade” agreements being negotiated. And that these “trade” agreements are too important and too far reaching to be approved quickly and quietly. Full disclosure and debate of their provisions is what democracy requires.

[1]       Queally, J., 1/15/14, “Leaked TPP ‘Environment Chapter’ shows ‘Corporate Agenda Wins,’” Common Dreams (http://www.commondreams.org/headline/2014/01/15)

[2]       Boston Globe Editorial, 1/19/14, “Pacific, EU trade deals need up-or-down votes,” The Boston Globe

[3]       Johnson, D., 1/10/14, “New Fast-Track bill means higher trade deficits and lost jobs,” Campaign for America’s Future

[4]       US Census Bureau, retrieved 1/7/14, “U.S. trade in goods by country,” http://www.census.gov/foreign-trade/balance/

[5]       Johnson, D., 12/18/13, “Will we fast-track past the lessons of the NAFTA trade debacle?” Campaign for America’s Future (http://ourfuture.org/20131218/obama-administration-to-push-fast-track)

[6]       Folbre, N., 8/5/13, “The free-trade blues,” The New York Times

[7]       Faux, J., 1/1/14, “NAFTA, twenty years after: A disaster,” Huffington Post

[8]       Wallach, L., 12/30/13, “NAFTA at 20: ‘Record of damage’ to widen with ‘NAFTA-on-steroids’ TPP,” Global Trade Watch, Public citizen

[9]       Stevenson, M., 1/3/14, “20 years after NAFTA, a changed Mexico,” The Boston Globe from the Associated Press

[10]     Carter, Z., 12/8/13, , “Obama faces backlash over new corporate powers in secret trade deal,” The Huffington Post

[11]     Johnson, D., 12/18/13, see above

STOP FAST TRACK FOR CORPORATE POWER GRAB

ABSTRACT: Bipartisan legislation was introduced in Congress last Thursday to allow the President to submit “trade” agreements to Congress and require expedited consideration of them. There is opposition to this Fast Track consideration (formally known as Trade Promotion Authority) in both parties. There is also opposition to the “trade” agreements currently being negotiated themselves. One reason for this opposition is concern that the agreements benefit multi-national corporations (including foreign corporations) at the expense of local businesses, US workers and citizens, and national sovereignty.

Corporations, who have had access to the agreements’ negotiations (while the public has been kept in the dark), are lobbying to weaken current standards for food safety, labor, health, Internet freedom, the environment, and the financial industry. According to leaked documents, the US is pushing for multi-national corporations to be able to challenge countries’ laws and regulations in privately run international courts or tribunals. Concerns about such provisions stem in part from experiences under existing “trade” agreements. For example, under current “trade” treaties, tobacco corporations are suing or threatening to sue a range of countries over existing or proposed smoking reduction efforts. These legal actions are undermining the World Health Organization’s tobacco control efforts.

I urge you to contact your Representative in the US House and your Senators and tell them you do not want Fast Track authority approved. Full disclosure and debate of the provisions of “trade” agreements is what democracy requires, especially given the essentially irreversible nature of them.

FULL POST: Bipartisan legislation was introduced in Congress last Thursday to allow the President to submit “trade” agreements to Congress and require expedited consideration of them – on a quick timetable, with no amendments, and no filibuster. The bill would require that Congress have access to draft language as agreements are being negotiated (which is currently being kept secret); would specify protections for labor, the environment, and intellectual property; and would require provisions in agreements against currency and exchange rate manipulation. There is opposition to this Fast Track consideration (formally known as Trade Promotion Authority) in both parties, so it is unclear when or if this bill will move forward. Alternative bills that give Congress more say over “trade” agreements are likely to be introduced. (I put trade in quotes because recent “trade” agreements, such as the North American Free Trade Agreement [NAFTA], go well beyond trade issues and cover a broad range of legal and regulatory issues. The provisions for reducing trade barriers and increasing trade are only a small part of the agreements.)

The President and the supporters of the “trade” agreement (largely corporate America) want Fast Track authority for the two broad “trade” agreements mentioned in my previous post (1/8/14): the Trans-Pacific Partnership (TPP) among a dozen Pacific Rim countries and the Trans-Atlantic Free Trade Agreement (TAFTA) [1] with 28 European countries. In addition, there is a global agreement on services (as opposed to manufactured goods) with about 50 countries that is currently being negotiated that would also be covered by the Fast Track authority. [2]

As I noted in my previous post (1/8/14), there is opposition to the “trade” agreements currently being negotiated and Fast Track consideration of them for 3 main reasons, one of which is concern that they benefit multi-national corporations (including foreign corporations) at the expense of local businesses, US workers and citizens, and national sovereignty (our ability to control what happens within the boundaries of the US). For example, a goal of TAFTA is to establish health and safety rules and regulations that would be standard across the US and EU. [3] Many people are concerned that this will lead to a race to the bottom, with the weakest standards winning out. For example, the US is demanding that the EU reduce restrictions on importation of genetically modified foods and hormone-treated beef. Europeans, however, want strong regulation of their food. Corporations, who have had access to the agreements’ negotiations (while the public has been kept in the dark), are lobbying to weaken current standards for food safety, labor, health, the environment, and the financial industry. [4]

In the TPP, according to leaked documents, the US is pushing for multi-national corporations to be able to challenge countries’ laws and regulations in privately run international courts or tribunals. This would result in a significant loss of national sovereignty. (This is a change to current rules under the World Trade Organization where countries’ own courts rule on such matters, although NAFTA included a similar but narrower provision for international tribunals.) The US is also advocating for expanded intellectual property protections, including long-term patents, and therefore monopolies, on drugs (similar to current US laws). It is also pushing to ban government agencies from negotiating lower drug prices with pharmaceutical corporations. (Such a ban is included in the US Medicare program and costs the program billions of dollars every year.) There is widespread concern that such provisions would increase drug prices, pharmaceutical corporations’ profits, and health care costs. This would seem to be borne out by the fact that drug prices are much higher in the US than in other countries. The US is also pushing for weak regulation of the financial industry. Leaked TPP documents have raised concerns among health, Internet freedom, environmental, and labor advocates over provisions supported by the US, the US Chamber of Commerce, and corporations in general. [5]

These concerns stem in part from experiences under existing “trade” agreements. For example, under existing “trade” treaties, tobacco corporations are suing or threatening to sue a range of countries (including Australia, Canada, Gabon, Namibia, New Zealand, Norway, Togo, Uganda, and Uruguay) over existing or proposed smoking reduction efforts. These legal actions are undermining the World Health Organization and its Framework Convention on Tobacco Control, a public health treaty signed by 170 countries, whose goal is to reduce smoking and its negative health effects by limiting and controlling advertising, packaging, and sale of tobacco products. As a specific example, Philip Morris is suing Australia for its cigarette packaging law claiming it will reduce current and future profits. The suit is brought under a treaty between Australia and Hong Kong, and the case will be decided in a private, non-public proceeding of a private international tribunal of arbitrators in Singapore. Although the US says it wants the new TPP to promote public health, and specifically named tobacco as a concern, the US Chamber of Commerce objected because it felt that such public health provisions could allow the regulation of other products such as sugar and soda. [6]

My next post will focus on our 20 year experience with NAFTA and some of its implications for what could be expected with these new “trade” agreements.

In the meantime, I urge you to email, call, write, and, if you can, meet with your Representative in the US House and your Senators [7] and tell them you do not want Fast Track authority approved. These “trade” agreements are too important and too far reaching to be approved quickly and quietly. Full disclosure and debate of the provisions of “trade” agreements is what democracy requires, especially given the essentially irreversible nature of them.

[1]       Also known as the Trans-Atlantic Trade and Investment Partnership

[2]       Calmes, J., 1/9/14, “A proposal to speed up action on trade accords,” The New York Times

[3]       Dahlburg, J., 11/12/13, “US, EU restart trade talks,” The Boston Globe from the Associated Press

[4]       Todhunter, C., 10/4/13, “The US-EU Transatlantic Free Trade Agreement (TAFTA): Big business corporate power grab,” Global Research (http://www.globalresearch.ca/the-us-eu-transatlantic-free-trade-agreement-tafta-big-business-corporate-power-grab/5352885)

[5]       Carter, Z., 12/8/13, “Obama faces backlash over new corporate powers in secret trade deal,” The Huffington Post

[6]       Tavernise, S., 12/13/13, “Tobacco firms’ strategy limits poorer nations’ smoking laws,” The New York Times

[7]       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.

TRADE TREATIES NEED OPEN DEBATE, NOT FAST TRACK

ABSTRACT: Action in Congress on requiring Fast Track consideration of trade treaties is likely to happen soon. Two broad “trade” agreements are scheduled for Congressional action this year: the Trans-Pacific Partnership (TPP) with a dozen Pacific Rim countries and the Trans-Atlantic Free Trade Agreement (TAFTA) with the European Union (EU). Fast Track authority requires that Congress consider and act on a treaty in a short timeframe with no amendments or changes allowed and with no filibustering.

I urge you to email, call, write, and, if you can, meet with your member of Congress and your Senators and tell them you do not want them to approve Fast Track authority. These “trade” agreements are too important and too far reaching to be approved quickly and quietly.

Business groups are pushing hard for Fast Track consideration in Congress. They are supporters of the treaties, which are widely viewed as very favorable to corporate interests. The growing resistance to Fast Track authority is fueled in large part by:

  • Secrecy on the negotiations and agreement provisions, which breeds suspicion;
  • Concern that they benefit multi-national corporations at the expense of others; and
  • Growing data on the damaging impacts of 20 years with the North American Free Trade Agreement (NAFTA), on which these treaties are modeled.

The indirect effects of the past and these possible new “trade” agreements on the balance of power in employer-employee relations and in our political system, as well as on economic inequality, may be more significant than the direct effects, such as job losses. The TPP and the TAFTA, based on what is known about them, will likely benefit corporations and investors, while hurting US workers and citizens. Moreover, if approved, these treaties will be very difficult to change, as the consent of all the parties is required. At the least, a full discussion of their provisions, based on full disclosure, is warranted.

FULL POST: Action in Congress on requiring Fast Track consideration of trade treaties is likely to happen soon. President Obama would like to have Fast Track authority, formally known as Trade Promotion Authority, for two broad “trade” agreements that are scheduled for Congressional action this year: the Trans-Pacific Partnership (TPP) with a dozen Pacific Rim countries and the Trans-Atlantic Free Trade Agreement (TAFTA) [1] with the European Union (EU). (I put trade in quotes because these “trade” agreements, like NAFTA, go well beyond trade issues and cover a broad range of legal and regulatory issues. The provisions for reducing trade barriers and increasing trade are only a small part of the agreements.)

Fast Track authority requires that Congress consider and act on a treaty in a short timeframe with no amendments or changes allowed and with no filibustering. Fast Track authority was first used in 1974 and has been used on a number of occasions since then.

I urge you to email, call, write, and, if you can, meet with your member of Congress and your Senators and tell them you do not want them to approve Fast Track authority. [2] These “trade” agreements are too important and too far reaching to be approved quickly and quietly. Full disclosure and debate of the provisions of “trade” agreements is what democracy requires.

The Democratic and Republican leaders of the Senate Finance Committee, along with the Republican chairman of the House Ways and Means Committee, have reportedly reached an agreement on a Fast Track authority bill, although they have not yet released its details. The argument for Fast Track consideration of trade treaties is that it means other countries will be more likely to make concessions and reach agreement on the treaty if they are confident that the US Congress can’t change it.

Business groups, including the US Chamber of Commerce and the Business Roundtable, are pushing hard for Fast Track consideration in Congress. They are supporters of the treaties, which are widely viewed as very favorable to corporate interests, [3] and are presumably worried that debate in Congress and the public on the treaties would reduce their chances for approval.

There is significant opposition to granting Fast Track authority in Congress and outside of it. Nearly 200 members of the US House, mostly Democrats but some Republicans, have signed letters strongly questioning the granting of Fast Track authority for these treaties. [4]

The growing resistance to Fast Track authority for these new “trade” agreements in Congress and the public is fueled in large part by:

  • Secrecy on the negotiations and agreement provisions, which breeds suspicion;
  • Concern that they benefit multi-national corporations at the expense of local businesses, workers and citizens, and national sovereignty; and
  • Growing data on the damaging impacts of 20 years with the North American Free Trade Agreement (NAFTA), on which these treaties are modeled.

Both treaties are being negotiated in great secrecy. For the TPP, the Obama administration has deemed the negotiations classified information, restricting Congressional access to documents and banning discussion of the negotiations and treaty provisions with the press or the public. [5] In 2013, Senator Elizabeth Warren opposed the confirmation of the US Trade Representative because he refused to share any of TPP’s provisions. She noted the important need for transparency and public debate on the treaty. [6]

These treaties are seen by many advocates for health, labor, safety, environmental, and financial industry standards and regulations as a masquerade for a corporate power grab, designed to weaken regulation and run roughshod over workers’ and citizens’ interests. [7] These “trade” agreements would enable multi-national corporations to operate with weakened oversight by national governments, free of nations’ court systems, and with reduced consumer and citizen protections. Corporations would become supra-national entities and would answer only to a separate system of rules and courts, administered by new international tribunals. In essence, an international system, parallel to the United Nations system of international governance for nations, would be created for international governance of corporations – a United Multi-national Corporations system, if you will. (More on this in a subsequent post.)

The same claims are being made for these two trade treaties that were made for NAFTA: they will promote economic growth, reduce trade deficits or increase trade surpluses, and increase jobs. The actual experience with NAFTA is that it has done none of these things, which is probably the best indicator of the likely effects of these new trade treaties. And the TPP has specifically been described as NAFTA on steroids. (More on this in a subsequent post.)

The indirect effects of the past and these possible new “trade” agreements on the balance of power in employer-employee relations and in our political system, as well as on economic inequality, may be more significant than the direct effects, such as job losses. The corporations and investors who have been the winners in this globalization of trade and commerce can invest their winnings (i.e., profits) in campaign contributions, lobbying, and political strategies that ensure they are the victors in next round of “trade” agreements. [8]

Although President Obama recently described growing economic inequality in the US as a major issue, NAFTA has increased inequality and the new trade treaties are likely to as well. NAFTA and other recent “trade” agreements have provided benefits to corporations and investors globally, while hurting workers and the middle class in the US, and sometimes hurting workers in other countries. The TPP and the TAFTA, based on what is known about them, will similarly benefit corporations and investors, while hurting US workers and citizens. Moreover, if approved, these treaties will be very difficult to change, as the consent of all the parties is required. At the least, a full discussion of their provisions, based on full disclosure, is warranted.

 

[1]       Also known as the Trans-Atlantic Trade and Investment Partnership.

[2]       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.

[3]       For more information see my previous posts, “Trade” Agreement Supersizes Corporate Power, 9/10/13, (https://lippittpolicyandpolitics.org/2013/09/10/trade-agreement-supersizes-corporate-power/) and “Trade” Agreements & Corporate Power, 9/13/13 (https://lippittpolicyandpolitics.org/2013/09/13/trade-agreements-corporate-power/).

[4]       Politi, J., 12/13/13, “US Senate deal sets up fierce trade battle,” Financial Times

[5]       Carter, Z., 12/8/13, , “Obama faces backlash over new corporate powers in secret trade deal,” The Huffington Post

[6]       Loth, R., 12/21/13, “Take trade agreement off fast track,” The Boston Globe

[7]       Todhunter, C., 10/4/13, “The US-EU Transatlantic Free Trade Agreement (TAFTA): Big business corporate power grab,” Global Research (http://www.globalresearch.ca/the-us-eu-transatlantic-free-trade-agreement-tafta-big-business-corporate-power-grab/5352885)

[8]       Folbre, N., 8/5/13, “The free-trade blues,” The New York Times

GOOD NEWS FROM THE GRASSROOTS

ABSTRACT: The dysfunction in Washington is discouraging. However, there is good news from the grassroots. Every day people are standing up and taking action when government policies and corporate practices are favoring special interests over the interests of the average citizen and worker.

Workers at Wal-Mart and in the fast food industry are taking action to improve their wages and working conditions. On the day after Thanksgiving, protest rallies were held at roughly 1,500 Wal-Mart stores around the country, about a third of their stores. On December 5th, fast food workers went on strike for a day and were joined by supporters at rallies in roughly 200 cities across the country. They are asking for more full-time jobs, more regular schedules, better pay and benefits, and to stop retaliating against workers who speak out or participate in strikes. They want to ensure they do not have to rely on government assistance to make ends meet.

Efforts to increase the minimum wage are occurring at the federal, state, and local levels, driven by strong grassroots support and activity. In 13 states, the minimum wage increased on January 1, 2014. A number of jurisdictions passed laws in 2013 mandating current or future increases. A push is underway to increase the federal minimum wage from $7.25 per hour to perhaps $10.10, as President Obama has proposed. Analyses indicate that this could lift about 5 million people out of poverty. It would grow the economy by $22 billion and 85,000 jobs because the increased income would be spent in the local economy. Polls show that over 70% of the public, including a strong majority of Republicans, support increasing the minimum wage.

FULL POST: As we enter the New Year, the dysfunction in Washington is discouraging. However, there is good news from the grassroots. Every day people are standing up and taking action when government policies and corporate practices are favoring special interests over the interests of the average citizen and worker. Examples include the following:

  • Workers at Wal-Mart and in the fast food industry are taking action to improve their wages and working conditions. (See below for more information.)
  • Efforts to increase the minimum wage are occurring at the federal, state, and local levels, driven by strong grassroots support and activity. (See below for more information.)
  • State efforts to require the labeling of food containing genetically modified organisms (GMOs) are gaining traction.
  • State and local efforts in opposition to fracking are gaining momentum.
  • In North Carolina, grassroots protests are occurring every week at the capitol, known as Moral Mondays protests, to oppose policies that hurt the middle and working class.
  • Teachers, parents, and other supporters of public education are protesting the top-down, corporate-style “reform” and privatization of our schools.
  • Communities are supporting home owners and fighting back against foreclosures with eminent domain takings of homes that financial corporations are trying to foreclose on.

Wal-Mart workers: On the day after Thanksgiving, so-called “Black Friday,” protest rallies were held at roughly 1,500 Wal-Mart stores around the country, about a third of their stores. The protesters were striking Wal-Mart employees and their supporters, who have been organizing under the banner of OUR Walmart (Organization United for Respect at Walmart). The first strike occurred in Los Angeles in October 2012 and the movement has been growing ever since. OUR Walmart is asking the corporation for more full-time jobs, more regular schedules, better pay and benefits, and to stop retaliating against workers who speak out or participate in strikes. [1] Ultimately, their goal is to ensure that Walmart associates do not have to rely on government assistance, such as food stamps and subsidized health insurance, to support their families. Multiple studies have found that the average Wal-Mart employee receives $2,000 – $3,000 per year in government assistance. Nationwide, that means taxpayers are supporting Wal-Mart employees to the tune of $3 – $4 billion annually. [2] (In 2012, Wal-Mart had $444 billion in revenue and profits of $26.6 billion.)

Fast food workers: On December 5th, fast food workers went on strike for a day and were joined by supporters at rallies in roughly 200 cities across the country. These protests for better wages, targeting $15 per hour, began about a year ago and have been gaining momentum. They target McDonald’s, Burger King, Wendy’s, Yum Brands (which owns Kentucky Fried Chicken [KFC], Taco Bell, and Pizza Hut), and others. [3] (See my previous post, Pay for Workers in the Fast-Food Industry, 9/8/13, https://lippittpolicyandpolitics.org/2013/09/08/updates-on-posts-on-low-pay-for-fast-food-workers-pesticides-and-bees-detroit/ for more information on the affordability of worker pay raises.) Low wage fast food workers are estimated to receive $7 billion a year in government assistance to help them make ends meet.

The minimum wage: These efforts to improve wages and working conditions for low wage workers are also reflected in efforts to increase the minimum wage. In 13 states, the minimum wage increased on January 1, 2014. A number of jurisdictions passed laws in 2013 mandating current or future increases, including California ($9/hour), Connecticut ($8.70), New Jersey ($8.25/hour), New York ($8/hour), Rhode Island ($8/hour), two counties in Maryland ($11.50/hour), the city of Seatac in Washington state ($15/hour), and the District of Columbia ($11.50/hour). [4] A push is underway to increase the federal minimum wage from $7.25 per hour to perhaps $10.10, as President Obama has proposed. Analyses indicate that this could lift about 5 million people out of poverty. It would grow the economy by $22 billion and 85,000 jobs because the increased income would be spent in the local economy. [5] Numerous other efforts to raise the minimum wage are underway in states and communities across the country. Polls show that over 70% of the public, including a strong majority of Republicans, support increasing the minimum wage. (If the minimum wage had kept up with inflation since 1968, it would be $10.50 not $7.25. If it had kept up with productivity gains, it would be over $15 and perhaps close to $22.) (See my previous posts, Lack of Good Jobs is Our Most Urgent Problem, 10/30/13, https://lippittpolicyandpolitics.org/2013/10/29/lack-of-good-jobs-is-our-most-urgent-problem/, and Labor Day and the Middle Class, 9/2/13, https://lippittpolicyandpolitics.org/2013/09/02/labor-day-and-the-middle-class/, for more information.)

There is also a growing effort to institute a “living wage” of $15 per hour. The fast food workers and low wage retail workers, and the unions supporting them, are the core of this effort, along with Kshama Sawant, a Seattle City Council member. The 15Now Campaign (http://15now.org) is also supported by newly elected Seattle mayor, Ed Murray. [6]

I’ll provide more information on these and other promising grassroots activity in future posts.

[1]       Berfield, S., 11/29/13, “On Black Friday, strikes and counter strikes at Wal-Mart’s stores,” Bloomberg Businessweek

[2]       Mitchell, S., 6/7/13, “New data show how big chains free ride on taxpayers at the expense of responsible small businesses,” Institute for Local Self-Reliance (http://www.ilsr.org/chains-walmart-foods-free-ride-taxpayers-expense-responsible-small-businesses/)

[3]       Choi, C., & Hananel, S., 12/6/13, “Fast-food workers, advocates rally in US cities for more pay,” The Boston Globe from the Associated Press

[4]       Davidson, P., 12/30/13, “13 states raising pay for minimum-wage workers,” USA Today

[5]       Berman, J., 1/2/14, “A $10.10 minimum wage could lift 5 million out of poverty,” The Huffington Post

[6]       Queally, J., 1/3/14, “The fight for $15: Campaign for Living Wage readies national push,” Common Dreams (http://www.commondreams.org/headline/2014/01/03)

ENDING THE CORRUPTION OF AMERICAN DEMOCRACY

ABSTRACT: Whatever your politics – Democratic, Republican or independent; conservative, moderate, or progressive – most people are frustrated that issues they believe are important aren’t being addressed by Congress. The fuel that is really driving this paralysis is Big Money in our political campaigns. It is distorting the operation of government and corrupting our democracy. This corruption is the result of concentrated wealth and power in corporations and wealthy individuals who use their money to buy influence over our government and its politics and policies. Many members of the House and Senate spend more time meeting with lobbyists and special interest groups and fundraising for their next campaign than they do on legislation and representing the people who voted to send them to Washington.

The most immediate action we can take is to push for passage of a carefully designed law that reduces and exposes the flow of political money and influence without violating the Supreme Court’s rulings on freedom of speech. The American Anti-Corruption Act (AACA) is a bold, comprehensive law that does this. I urge you to support it by learning more about it (see below for a summary) and becoming a citizen co-sponsor at http://anticorruptionact.org.

FULL POST: Whatever your politics – Democratic, Republican or independent; conservative, moderate, or progressive – most people are frustrated that issues they believe are important aren’t being addressed by Congress. For some it’s fracking or climate change. For others it’s the federal debt, income inequality, gun violence, immigration, health care, regulation of the financial industry (or other corporations), military spending, trade treaties, or something else. Each is an important issue that can evoke strong debate and real passion.

All of these issues deserve a full and open debate, require compromise, and should receive votes on meaningful pieces of legislation. None is receiving it. The system is broken. The pundits and the media say this dysfunction and gridlock in Congress reflect the deep partisan divide in the U.S. However, the fuel that is really driving this paralysis is Big Money in our political campaigns. It is distorting the operation of government and corrupting our democracy.

This corruption is the result of concentrated wealth and power in corporations and wealthy individuals who use their money to buy influence over our government and its politics and policies. We cannot expect action on important issues until we end this corruption, which is deep and pernicious, and threatens the heart of our democratic system. Today, many members of the House and Senate spend more time meeting with lobbyists and special interest groups and fundraising for their next campaign than they do on legislation and representing the people who voted to send them to Washington.

The most immediate action we can take is to push for passage of a carefully designed law that reduces and exposes the flow of political money and influence without violating the Supreme Court’s rulings on freedom of speech. The American Anti-Corruption Act (AACA) is a bold, comprehensive law that does this. The campaign to promote it has been launched nationally by a nonpartisan group, Represent.Us (https://represent.us).

Here is what the American Anti-Corruption Act would do:

1)  Prohibit members of Congress from a) receiving contributions from the interests they oversee, and b) fundraising during congressional working hours;

2)  Build the influence of small contributors by creating a $100 tax rebate that registered voters can use to contribute to federal candidates;

3)  Require candidates to disclose the names of individuals (known as “bundlers”) who gather and package together multiple contributions, thereby presenting large sums of money to candidates;

4)  Limit the amount that lobbyists and their clients can contribute to federal candidates, political parties, and political committees to $500 per year;

5)  Limit political action committees’ contributions and their coordination with political campaigns and parties;

6)  Mandate full, timely reporting of all spending of $10,000 or more on political activities;

7)  Expand the legal definition of a lobbyist so anyone trying to influence our lawmakers has to play by the lobbying rules;

8)  Close the “revolving door” through which former elected officials and their staffs capitalize on their connections and influence in high-paying lobbying jobs when they leave office; and

9)  Strengthen enforcement of campaign finance laws.

I urge you to support the American Anti-Corruption Act by learning more about it and becoming a citizen co-sponsor at http://anticorruptionact.org.

REPUBLICAN SABOTAGE

ABSTRACT: Republicans are sabotaging democracy and the United States of America. Republicans in both the US House and Senate have used obstructionist tactics to block progress on a budget to keep the government operating and on an increase in the debt ceiling to avoid a financial default. In efforts to get policy changes that they don’t have the votes to pass in Congress and didn’t convince the American public to support in the last 3 elections, they have shut down the government and are on the verge of causing an unprecedented financial default.

Republicans in the US House of Representatives have blocked a vote on a simple, straight-forward bill extending the budget, which passed in the Senate, and would keep the government operating. In the Senate, a bill to increase the debt ceiling received a favorable majority vote but the Republicans filibustered, blocking progress.

An extremist minority has taken over the Republican Party because the rest of the Republicans refuse to stand up to them and say, “No.” These extremists have escalated their demands every time President Obama and the Democrats have compromised with them. For example, the extremists are demanding more budget cuts, even though the deficit has shrunk to half its size of 4 years ago.

Every compromise put forth on the budget or debt ceiling that has any chance of passage is torpedoed by the extremists, often with new demands. The track record makes it clear that these extremists won’t be satisfied with any concessions they get. In fact, anything they get will just embolden them to create another crisis so they can demand more.

It is frustrating to see a minority in Congress and in the country creating such hardship and inconvenience for so many in their pursuit of political goals that have been rejected repeatedly by the majority in Congress and multiple times by the voters. It’s past time to raise our voices and demand that our democratic principles be honored by the extremist minority and their Republican enablers in Congress. I urge you to contact your Representative and your Senators to tell them to reopen our government and raise the debt ceiling so our government can pay its bills.

FULL POST: Republicans are sabotaging democracy and the United States of America. Republicans in both the US House and Senate have used obstructionist tactics to block progress on a budget to keep the government operating and on an increase in the debt ceiling to avoid a financial default. In efforts to get policy changes that they don’t have the votes to pass in Congress and didn’t convince the American public to support in the last 3 elections, they have shut down the government and are on the verge of causing an unprecedented financial default. [1]

Republicans in the US House of Representatives have blocked a vote on a simple, straight-forward bill extending the budget, which passed in the Senate, and would keep the government operating. They used an unprecedented parliamentary procedure to block any chance that the bill would get voted on in the House. They did so by making a very specific change in the normal rules of operation of the House. Under normal procedure, any House member would have been able to request that the Senate bill be voted on. On the night of September 30, the eve of the shutdown, Republicans changed the normal rule to say that any request to vote on the Senate bill would have to be made by the Republican majority Leader or with his approval. “I’ve never heard of anything like that before,” said Norm Ornstein, resident scholar at the conservative American Enterprise Institute. As a result, efforts by Democratic House members to bring the Senate bill up for a vote and keep the government operating, were blocked. If the bill had been voted on it almost certainly would have passed because at least 28 House Republicans have publicly said they would support such a bill if it were brought to a vote, which, when combined with Democratic votes, would be a majority. [2][3]

Meanwhile in the Senate, a bill to increase the debt ceiling was brought to a vote. A majority voted in favor of it but the Republicans filibustered, making a 60 vote super-majority necessary to move forward. [4]

An extremist minority has taken over the Republican Party because the rest of the Republicans refuse to stand up to them and say, “No.” These extremists have escalated their demands every time President Obama and the Democrats have compromised with them. In 2010, they wanted the Bush tax cuts for the wealthy extended through 2012 so they could make their case for the tax cuts to voters. They made their case and lost the election. Did they then let the tax cuts expire? No. As part of the fiscal cliff negotiations they demanded they be extended permanently. The President and the Democrats compromised and extended them permanently for incomes up to $400,000. And now the Republicans are back demanding tax cuts for the wealthy.

On spending cuts, they demanded large spending cuts and held the financial credibility of the country hostage to their demand in the summer of 2011. When the President and the Democrats compromised and made significant cuts, they demanded more. So a Super Committee was created to find ways to reduce the deficit but the extremists refused any compromise. They presented their case for budget cuts to the voters in 2012 and lost. Nonetheless, the extremists refused to compromise and the automatic, across the board cuts that the Super Committee was supposed to find a way to avoid went into effect in March. But the extremists are demanding more budget cuts, even though the deficit has shrunk to half its size of 4 years ago and is continuing to shrink.

The extremists have also demanded that the Affordable Care Act, which they have dubbed Obama Care, be repealed, even though it would provide health insurance to tens of millions of Americans who don’t have it now. Having campaigned on this issue in 2012 and lost, and without the votes to repeal it in Congress, they are now holding our democracy hostage to their demand to stop it.

Every compromise put forth on the budget or debt ceiling that has any chance of passage is torpedoed by the extremists. Often, they put forward new demands such as restrictions on health insurance coverage of women’s reproductive health or shifting the sequester’s budget cuts to cut social programs rather than the military.

The track record makes it clear that these extremists won’t be satisfied with any concessions they get. In fact, anything they get will just embolden them to create another crisis so they can demand more. Hopefully, the country, President Obama, the Democrats, and perhaps even the majority of Republicans have learned that extortionists’ demands escalate if you give in to them. Furthermore, keeping the government running and paying the nation’s bills should never have been negotiable in our democracy in the first place. [5] This is sabotage of the democratic process and the democratic principle of majority rule.

It is frustrating to see a minority in Congress and in the country creating such hardship and inconvenience for so many in their pursuit of political goals that have been rejected repeatedly by the majority in Congress and multiple times by the voters. It’s particularly frustrating to see Congress people getting paid (although some have committed to donate their salaries to charity), keeping their staffs on at full pay in some cases, keeping their gym and pool open, and even keeping their special little subway running between the House and Senate office buildings, while so many others are harmed or inconvenienced. Meanwhile, among other things, toxic waste clean-ups have stopped, accepting new patients into clinical trials at the National Institutes of Health has stopped, access to National Parks is blocked (except where states are paying to keep them open), contractors and programs that depend on federal government funding are shutting down, people who depend on, need, or expect government services or information are having to go without, and, of course, hundreds of thousands of government employees are not getting paid, creating real hardships for many families. [6]

It’s past time to raise our voices and demand that our democratic principles be honored by the extremist minority and their Republican enablers in Congress. I urge you to contact your Representative and your Senators to tell them to reopen our government and raise the debt ceiling so our government can pay its bills.

 

[1]       Moyers, B., 10/4/13, “On the sabotage of democracy,” http://billmoyers.com/segment/bill-moyers-essay-shutdown-showdown/

[2]       McCarter, J., 10/10/13, “How House Republicans guaranteed a shutdown: by changing the rules, “ Daily Kos

[3]       Alman, A., 10/13/13, “House Republicans changed the rules so a majority vote couldn’t stop the government shutdown,” The Huffington Post

[4]       Laing, K., 10/12/13, “White House slams Senate Republicans,” The Hill

[5]     Reich, R., 10/12/13, “Why giving Republican bullies a bloody nose isn’t enough,” The Huffington Post

[6]       Terkel, A., 10/9/13, “Congressional perks deemed essential during government shutdown while public sacrifices,” The Huffington Post

EFFECTS OF THE SEQUESTER Part 2

ABSTRACT: The $85 billion across the board budget cuts that went into effect on March 1, known as the sequester, are significantly affecting individuals, families, children, and public sector functions. The following list of some of the sequester’s effects is a continuation of my post of 9/16/13 and is drawn from the Coalition on Human Needs extensive compilation of reports from on-the-ground, front-line service providers and other sources.

The sequester’s budget cuts are having the following effects (among others): 1) the Center for Medicare and Medicaid Services is cutting its reimbursements to community cancer clinics for cancer treatment drugs below the actual cost of the drugs; 2) civilian medical staff at military medical facilities are losing significant income because of sequestration furloughs and therefore are quitting; 3) many school districts will be increasing class sizes, reducing instructional and non-instructional staff, reducing professional development and academic programs, and/or deferring textbook purchases; 4) 57,000 fewer children will participate in Head Start and Early Head Start, services will be reduced by 1.3 million days, and 18,000 staff will either be laid off or face reduced pay or hours; 5) the federal court system’s budget has been cut by $350 million leading to layoffs of public defenders, delays in trials, and cuts in mental health treatment, drug treatment and testing, and offender monitoring; 6) hundreds of thousands of low income mothers and their young children have lost nutrition benefits; 7) roughly 300,000 students with disabilities will receive reduced services; 8) Meals on Wheels has delivered hundreds of thousands fewer meals for tens of thousands of seniors; and 9) housing assistance has been cut or denied for tens of thousands of families.

FULL POST: The $85 billion across the board budget cuts that went into effect on March 1, known as the sequester, are significantly affecting individuals, families, children, and public sector functions. The following list of some of the sequester’s effects is a continuation of my post of 9/16/13. The Coalition on Human Needs has been compiling reports of the sequester’s effects from on-the-ground, front-line service providers, as well as from national reports and sources. Here are some “highlights” from their extensive compilation: [1]

  • The Center for Medicare and Medicaid Services is cutting its reimbursements to community cancer clinics for cancer treatment drugs below the actual cost of the drugs. As a result, the clinics have two choices: they can send Medicare patients to the hospital for treatment or they can continue to serve patients but take a loss on drug costs. Given tight budgets, many clinics are sending their patients to hospitals where taxpayers pay $6,500 more each year for cancer care and seniors pay $650 more in co-pays than they would at community cancer clinics.
  • Civilian medical staff at military medical facilities are losing significant income because of sequestration furloughs and therefore are quitting. The Army and Air Force combined have lost 3,300 doctors, nurses and other medical staff, about 6 percent of their total. Medical facilities’ hours of operation have been reduced and certain non-emergency medical procedures delayed.
  • The sequester’s cuts will affect many school districts this fall. In a survey of 541 school districts in 48 states done by the School Superintendents Association, 86% indicated they would be implementing cuts, including: increasing class sizes (48%), reducing instructional staff (53%), cutting non-instructional staff (47%), reducing professional development (59%), reducing academic programs (33%), and deferring textbook purchases (33%).
  • Due to the sequester’s cuts, 57,000 fewer children will participate in Head Start and Early Head Start this fall, the early education programs designed to close the school readiness gap for disadvantaged children. In addition, services will be reduced by 1.3 million days at Head Start centers and 18,000 staff will either be laid off or face reduced pay or hours. Programs also closed early at the end of the last school year, canceled summer programs, shortened daily hours of operation, and/or reduced services such as transportation. The concentration of Head Start services in poorer states and cities means that very poor communities and their children will be hit hard by these cuts, which will likely have life-long impacts on them and increase the challenges facing their schools.
  • The federal court system’s budget has been cut by $350 million by the sequester. This has resulted in layoffs of public defenders and furloughs of up to twenty days without pay. There have been delays in trials, reductions in lawyer training, and less funding for research, investigation and expert help. Several courts are not holding trials on Fridays to adapt to the reductions. If cases cannot be processed in accordance with the Speedy Trial Act, they may have to be dismissed. The number of federal probation officers has declined 7 percent since 2011, to approximately 6,000, despite an increase in the number of offenders in the probation system. In 2012, 187,000 offenders were supervised by these probation officers, and the number is expected to rise to a record 191,000 by 2014. Probation and pretrial services, including mental health treatment, drug treatment and testing, and offender monitoring, have all been cut.
  • The sequester’s cuts to food programs have meant that hundreds of thousands of low income mothers and their young children have lost nutrition benefits, which could do long-term harm to the health and school readiness of the children.
  • Hundreds of millions of dollars of sequester cuts mean that roughly 300,000 students with disabilities will receive reduced services.
  • Because of sequester cuts, Meals on Wheels has delivered hundreds of thousands fewer meals for tens of thousands of seniors. Transportation and other services for seniors have been cut.
  • Housing assistance has been cut or denied for tens of thousands of families due to the sequester. Some families have lost their housing assistance, some are being asked to pay more, and already long waiting lists and times (measured in years in many places) have grown. Maintenance of public housing and staff at housing agencies have been reduced.

I strongly urge you to call your US Senators and your Representative to tell them that the sequester’s budget cuts are harmful and unwise. Tell them that there are smarter and fairer ways to reduce the federal budget’s deficit.

(You can find out who your Congress people are and get their contact information at: http://www.senate.gov/general/contact_information/senators_cfm.cfm for your Senators and http://www.house.gov/representatives/find/ for your Representative.)

 

[1]       The Coalition on Human Needs’ extensive compilation of the sequester’s effects is available at: http://www.chn.org/wp-content/uploads/2013/08/completesetofsequesterreports.pdf.

“TRADE” AGREEMENTS & CORPORATE POWER

ABSTRACT: The Trans-Pacific Partnership (TPP) “trade” treaty that is currently being negotiated (see post of 9/10) would give corporations the right to sue governments if their laws, regulations, or actions negatively affect current or expected future profits. Under existing trade agreements, over $380 million has already been paid to corporations by governments. Furthermore, there are 18 pending suits by corporations against governments for $14 billion. Corporations will use or set up foreign subsidiaries to file suits under investor-state dispute resolution provisions of trade treaties (corporations are referred to as “investors”), thereby avoiding a country’s legal system and relying instead on the international tribunals (i.e., courts) created by the treaties.

The TPP would require countries to allow corporations to compete for the delivery of public services. The result could well be that some people cannot afford a corporation’s fees for basic, formerly universal, public services (such as water).

If ratified, the Trans-Pacific Partnership treaty would enhance the power and rights of corporations while weakening US sovereignty. Given its unlimited term and the virtual impossibility of making changes (which require the unanimous consent of the parties), it amounts to a Constitutional change that gives foreign corporations equal (if not greater) legal status and power than the US and other governments. Furthermore, it would foster a race to the bottom for public health, the environment, and workers, especially well-paid blue and white collar workers, as jobs continue to move overseas and compensation and safety are attacked as limiting profits.

The secrecy and potency of the TPP make it feel like a conspiracy among our corporate and political elite to give corporations the ultimate power in our society. I strongly urge you to call your US Senators, and your Representative as well, to ask them to oppose “fast-track” rules for consideration of the Trans-Pacific Partnership “Trade” Treaty and to demand full disclosure and discussion of its provisions in Congress and with the public.

FULL POST: The Trans-Pacific Partnership (TPP) “trade” treaty that is currently being negotiated (see post of 9/10) would give corporations the right to sue governments if their laws, regulations, or actions negatively affect current or expected future profits. The North American Free Trade Agreement (NAFTA) between the US, Canada, and Mexico and other treaties that are already in place give corporations similar rights. Under existing trade agreements, over $380 million has already been paid to corporations by governments. Furthermore, there are 18 pending suits by corporations against governments for $14 billion. [1] For example, Chevron is suing Ecuador over its environmental laws, Eli Lilly is suing Canada over its patent laws, and European investment firms are suing Egypt over its minimum wage laws. [2]

Philip Morris is suing Australia over its cigarette labeling laws. However, because the US – Australia trade agreement doesn’t include investor-state dispute resolution provisions (corporations are referred to as “investors”) that allow such suits, Philip Morris is using other trade treaties and its Swiss and Hong Kong subsidiaries to file its suits. [3] Corporations will use or set up foreign subsidiaries to file suits under investor-state dispute resolution provisions of trade treaties, thereby avoiding a country’s legal system and relying instead on the international tribunals created by the treaties.

Other examples of corporations suing governments include:

  • Under NAFTA, a US corporation sued and received $13 million from Canada, which then reversed its ban on a gasoline additive that contains a known human neurotoxin.
  • Another US corporation has filed a $250 million investor-state suit against Canada under NAFTA because of its ban on fracking.
  • A French and a US company have succeeded in separate suits totaling close to $300 million against Argentina because its federal government failed to override 2 provinces’ limits on water rate increases after water systems were privatized in a period of economic distress, even though it would have been an unconstitutional intervention in provincial affairs for the federal government to do so. [4]
  • (There are many more examples and much more information on the TPP at www.citizen.org/TPP.)

The TPP language would require countries to allow corporations to compete for the delivery of public services, such as water and sewer, electricity, education, and transportation services. The result could well be, as has occurred in Argentina and other South American countries, that some people cannot afford a corporation’s fees for basic, formerly universal, public services (such as water), or that a distinctly two-tiered system emerges with high quality services for those who can afford to pay and poorer quality services for those who can’t. [5]

If the TPP is ratified by the US, it would, for example, undermine efforts to make the giant international mining corporation Rio Tinto abide by the Clean Air Act at its massive copper mine west of Salt Lake City. [6] Under the TPP, US and local regulations could be nullified or forced to change in areas such as:

  • Worker safety and the minimum wage
  • Importation of food and food labeling
  • Fracking for and exportation of natural gas
  • The length of patent protection on drugs (which could raise drug prices by delaying availability of generic versions of drugs)
  • The separation of banking from financial speculation that has been proposed as part of the answer to the 2008 financial collapse (i.e., reinstating Glass-Steagall provisions). Furthermore, TPP would prohibit a transaction tax on the buying and selling of securities, derivatives, and other financial instruments (as has been proposed in the US and as is being implemented in Europe).

If ratified, the Trans-Pacific Partnership treaty would enhance the power and rights of corporations while weakening US sovereignty. Given its unlimited term and the virtual impossibility of making changes (which require the unanimous consent of the parties), it amounts to a Constitutional change that gives foreign corporations equal (if not greater) legal status and power than the US and other governments. This is in total contradiction to the design of US democracy where there is a balance of power, checks and balances, elections every two years, and law making that can change policies and the course of the country on a regular basis.

Furthermore, it would foster a race to the bottom for public health and the environment by giving corporations the right to challenge health and environmental laws and regulations in pursuit of ever higher profits. Similarly, it would foster a race to the bottom for workers, especially well-paid blue and white collar workers, as jobs continue to move overseas (as they have done under NAFTA), and compensation and safety are attacked as limiting profits.

I’m not one who generally buys conspiracy theories, but the secrecy and potency of the TPP make it feel like a conspiracy among our corporate and political elite to give corporations, which are totally focused on maximizing profits, the ultimate power in our society. Therefore, corporations, not our governments or other civic organizations, would determine our well-being as individuals, communities, and nations, as well as, ultimately, the well-being of our planet. I strongly urge you to call your US Senators, and your Representative as well, to ask them to oppose “fast-track” rules for consideration of the Trans-Pacific Partnership “Trade” Treaty and to demand full disclosure and discussion of its provisions in Congress and with the public.

(You can find out who your Congress people are and get their contact information at: http://www.senate.gov/general/contact_information/senators_cfm.cfm for your Senators and http://www.house.gov/representatives/find/ for your Representative.)

[1]       Public Citizen, retrieved 9/9/13, “TPP’s investment rules harm public access to essential services,” www.citizen.org/TPP

[2]       Hightower, J., August 2013, “The Trans-Pacific Partnership is not about free trade. It’s a corporate coup d’état – against us!” The Hightower Lowdown

[3]       Public Citizen, retrieved 9/9/13, “TPP’s investment rules harm public health,” www.citizen.org/TPP

[4]       Public Citizen, retrieved 9/9/13, “TPP’s investment rules harm the environment,” www.citizen.org/TPP

[5]       Hightower, J., August 2013, “The Trans-Pacific Partnership is not about free trade. It’s a corporate coup d’état – against us!” The Hightower Lowdown

[6]       Moench, B., 6/25/12, “America: A fire sale to foreign corporations,” Common Dreams (http://www.commondreams.org/view/2012/06/25-0)

“TRADE” AGREEMENT SUPERSIZES CORPORATE POWER

ABSTRACT: The US is currently negotiating a trade agreement known as the Trans-Pacific Partnership (TPP). The negotiations have been so secretive that most members of Congress have never seen a draft of the treaty and the public is mostly unaware of its existence. The mainstream (corporate) media have hardly mentioned the TPP, despite its target date for completion of December 2013.

Much of the TPP has nothing to do with trade; its focus is largely on providing legal rights to multi-national corporations so they can make profits without interference from government laws, regulations, or sovereignty. Foreign corporations would have the right to sue national or local governments if their laws, regulations, or actions negatively affected current or expected future profits. These suits would be resolved by an Investor-State Dispute Resolution system using an international tribunal (i.e., court).

Interestingly, conservatives have generally objected to the use of international precedents and tribunals that might impinge on US sovereignty and initiatives. However, they are generally supportive of the rights and power given to foreign corporations and international tribunals by the TPP.

The Trans-Pacific Partnership treaty puts corporate interests ahead of American interests. I strongly urge you to call your US Senators to ask them to oppose “fast-track” rules for consideration of the Trans-Pacific Partnership “Trade” Treaty and to demand full disclosure and discussion of its provisions in Congress and with the public.

FULL POST: The US is currently negotiating a trade agreement known as the Trans-Pacific Partnership (TPP). The negotiations have been so secretive that most members of Congress have never seen a draft of the treaty and the public is mostly unaware of its existence. Yet, Congress is going to be asked soon to vote on considering the treaty under “fast-track” rules that mean it would get a yes or no vote in Congress with limited debate and no amendments allowed. And once the treaty is approved, it has no expiration date and changes can only be made with the unanimous agreement of the participating countries. [1]

The mainstream (corporate) media have hardly mentioned the TPP, despite the fact that it includes 40% of the global economy, involves 12 (and potentially more) countries [2], has had 18 negotiating sessions, and has a target date for completion of December 2013.

Given that the tariffs among the participating countries are already low and that the US already has trade agreements with many of them (Canada, Mexico, Chile, Peru, Australia, and Singapore), there would seem to be little need for the TPP. However, much of the TPP has nothing to do with trade – only 5 of its 29 sections actually deal with trade. Its focus is largely on providing legal rights to multi-national corporations so they can make profits without interference from government laws, regulations, or sovereignty. It has been described as the most business-friendly “trade” agreement in history and as NAFTA (the North American Free Trade Agreement between the US, Canada, and Mexico) on steroids. (Most people view NAFTA as having been good for US corporations but as not having lived up to the promise that it would create jobs in the US, let alone good jobs with good wages.)

The only people with access to the negotiations and draft treaty language have been members of the US Trade Representative’s official Trade Advisory Committees. These individuals are sworn to secrecy, as are the negotiators for the other countries. Of the roughly 700 US advisory committee members, about 600 represent the business community, about 20 represent workers, and none represent citizens’ or civic groups.

The TPP benefits corporations, particularly foreign corporations, by

  • Strengthening patent, copyright, and intellectual property rights
  • Banning government contracting rules that favor domestic businesses (e.g., Buy America incentives)
  • Allowing government regulations to be challenged and overridden if they reduce a foreign corporation’s profits, including, for example, regulations of food safety, environmental impact, the financial system, public utilities and services, and working conditions (including minimum wage, overtime, safety, and child labor laws)
  • Giving special international tribunals (i.e., courts) the ability to overrule domestic laws and regulations if they would hurt foreign corporations profits
  • Creating a special visa program for highly-paid, white-collar professionals that bypasses all other immigration regulations and processes. [3]

Corporations would have a legal status equal to or superseding that of countries. Foreign corporations would have the right to sue national or local governments if their laws, regulations, or actions negatively affected current or expected future profits. [4] These suits would be resolved by an Investor-State Dispute Resolution system using an international tribunal (i.e., court). (Corporations are referred to as “investors.”) Basically, this is an alternative legal system that supersedes US courts and laws. The three person tribunals would operate behind closed doors and be made up of private lawyers. The same lawyers who serve as judges in one case might represent corporations in other cases. There is no appeal process and when a corporation wins, the losing government must pay the corporation for its “lost” profits and legal costs. (My next post will provide examples of how corporations are using similar rights under existing treaties and of the effects TPP is likely to have.)

Interestingly, conservatives have generally objected to the use of international precedents in making court decisions and writing US laws, and to the United Nations, treaties, and international human rights tribunals that might impinge on US sovereignty and initiatives. However, they are generally supportive of the rights and power given to foreign corporations and international tribunals by the TPP, despite the fact that they would clearly limit US sovereignty. The TPP would give foreign corporations greater rights than domestic firms and would expand incentives for US corporations to move investments and jobs overseas. [5]

The Trans-Pacific Partnership treaty puts corporate interests ahead of American interests. And it is widely viewed as benefitting large, international corporations, while hurting small businesses, small farmers, and workers, especially well paid blue and white collar workers. I strongly urge you to call your US Senators, and your Representative as well, to ask them to oppose “fast-track” rules for consideration of the Trans-Pacific Partnership “Trade” Treaty and to demand full disclosure and discussion of its provisions in Congress and with the public.

(You can find out who your Congress people are and get their contact information at: http://www.senate.gov/general/contact_information/senators_cfm.cfm for your Senators and http://www.house.gov/representatives/find/ for your Representative.)

[1]       Hightower, J., August 2013, “The Trans-Pacific Partnership is not about free trade. It’s a corporate coup d’état – against us!” The Hightower Lowdown

[2]       The negotiations currently include Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, and Vietnam. Other countries are allowed to join in the future and China, Indonesia, and Russia are likely to join at some point.

[3]       Stangler, C., 9/2013, “MBAs without borders,” In These Times

[4]       Hauter, W., 8/22/13, “The un-American way: The Anti-democratic Trans-Pacific Partnership threatens food safety and public health,” OtherWords (www.commondreams.org/view/2013/08/22-3)

[5]       Moench, B., 6/25/12, “America: A fire sale to foreign corporations,” Common Dreams (http://www.commondreams.org/view/2012/06/25-0)