THE DOWNSIDE OF PHILANTHROPY

Philanthropy, particularly at this time of year, is typically viewed as the ideal expression of caring for others and contributing to amelioration of social problems. However, philanthropy, particularly when tax-subsidized and done by the super-rich, has a significant downside.

Philanthropy in the U.S. is subsidized for those who itemize deductions on their income tax returns. Deducting charitable donations from taxable income means that the donation costs the donor less than its full amount. For a high-income tax payer paying roughly 40% of income in taxes, the donation only costs 60 cents for every dollar donated. For a lower-income taxpayer paying a 15% tax rate, a donation costs 85 cents for every dollar donated. Furthermore, it’s primarily high-income taxpayers and home owners who itemize deductions. So, both of these factors skew the financial benefits of philanthropy to those with high incomes and provide lower or no benefit to those with lower incomes.

Therefore, our current system of tax-subsidized philanthropy favors the giving preferences of the wealthy over those of low income or poor people. This problem was exacerbated by the 2017 tax cut. It raised the standard deduction for income tax calculation, which means that only the top 10% or so of incomes will still find it worthwhile to itemized deductions. Therefore, our tax system will now subsidize the philanthropy of only the top 10%.

Poor and middle-class people give away as high a percentage of their incomes as the wealthy, which suggests that the tax subsidies for philanthropy are rewarding the wealthy for behavior they would most likely engage in anyway. Charitable activities have occurred for centuries, but we have provided tax benefits for them only for the last 100 years. Therefore, these tax subsidies may well just be a benefit, a pat on the back, for high income people. If this is the case, it makes no sense to give away the tax revenue or to allow the wealthy to avoid paying their fair share in taxes by giving them a tax break for their charitable giving. [1]

Because of the growth of income and wealth inequality, and the huge amounts of money the super-rich can easily afford to give away, increasingly the philanthropic preferences of the wealthy are shaping our society. However, the giving preferences of the wealthy do not reflect the philanthropic preferences of the rest of society. [2]

Rob Reich, the author of “Just Giving,” would prefer to see society pursue democratically identified goals rather than private projects selected by wealthy philanthropists. The big splash that big philanthropy makes, such as Amazon’s Bezos’s recent announcement of a $2 billion commitment to address homelessness and improve early childhood education, distracts us from crafting policy solutions that will systematically address problems and help everyone who is facing a challenge rather than the subset who fall within the purview of a philanthropic project.

When the super-rich decide which institutions to support (e.g., universities, museums, hospitals) and which social problems to tackle (e.g., homelessness in the U.S., hunger and health in poor countries), they are usurping the role of public decision-making and priority setting that should be done by democratically run organizations, particularly governments. [3]

Charitable donations have been increasing since the 2008 recession, exceeding $400 billion for the first time in 2017. However, fewer households are giving, dropping from 66% in 2000 to 55% in 2014. While Giving Tuesday this year set a record with $380 million raised from 4 million individuals (an average of about $100 each), this represents only 0.1% (one tenth of one percent or one thousandth of overall giving).

Non-profit organizations are relying on fewer, larger donations. This means their support is less reliable from year to year and that they may tweak their missions to fit the interests of large donors. Overall, it means the favored institutions, causes, and projects of the wealthy are funded, while others struggle to survive. For example, it may mean that there is one awesome charter school for a hundred or so children, but that quality public education for all gets left behind.

Large-scale philanthropy can cause public organizations, such as public schools, to alter policies and procedures to qualify for philanthropic funding. For example, billionaire Bill Gates’s foundation’s grants for public schools have pushed school systems and states to adopt the Common Core learning standards and to internally subdivide schools into “schools-within-a-school” in accordance with grant requirements.

Super-sized philanthropy can’t replace broad-based public programs and investments that improve overall public well-being. An irony is that the super-rich may oppose public policies that would address issues they tackle through their philanthropy. The most dramatic and recent example is that of Amazon’s Bezos. He announced $2 billion in philanthropy to tackle homelessness and early education, but vehemently opposed, successfully, a per person tax on employment in Seattle to address the growing homelessness there. [4] Seattle’s homelessness problem is exacerbated by escalating housing prices driven in significant part by the need for housing for the growing number of Amazon employees in the Seattle area.

A more equitable and democratic system would stop providing a tax benefit for the philanthropy of the rich and more fairly tax the high incomes and wealth of individuals and corporations. The increased public revenue could be used to broadly and equitably improve societal well-being. For example, if we had increased the minimum wage to keep up with inflation and productivity since the 1960s, if we had reduced executive salaries and shareholder rewards in order to benefit employees, and if we provided affordable, quality health care for all, maybe we wouldn’t need super-sized philanthropy to help people afford a place to live or child care.

Charitable giving is not a bad thing, although giving of one’s time can be as valuable and more rewarding than giving money. However, our current system of tax-subsidized charitable giving and super-sized philanthropy based on great disparities in wealth is not good for democracy nor the best way to maximize social welfare.

[1] Ortiz, A., 12/2/18, “The price of philanthropy,” The Boston Globe (This article is an interview with Rob Reich, the author of the new book “Just Giving.”)

[2] Ortiz, A., 12/2/18, see above

[3] Loth, R., 12/10/18, “We can’t privatize our way out of poverty,” The Boston Globe

[4] Loth, R., 12/10/18, see above

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)

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)

EVEN THE RICH RECOMMEND TAXING THE RICH

There are many arguments for increasing taxes on the rich. It’s interesting and noteworthy when the rich themselves argue for higher taxes on themselves and others like them. Warren Buffet, one of the richest men on the planet and an investor without peers, has been stating since 2011 that he pays a lower income tax rate than his secretary and that this isn’t fair. [1]

Other wealthy individuals also argue that the rich should pay more. First, there’s Douglas Durst, a billionaire New York City real estate magnate, who recently stated that he supports “higher taxes on people like me.” He noted that the US “has more of a revenue problem than a spending problem.” His father, also a real estate man, created the National Debt Clock (that displays the federal government’s overall debt) and put it on a building he owned near Times Square in New York in 1989. Durst, the son, maintains it today as the US government’s debt is growing by almost $1 trillion per year. Republicans, who campaigned on balancing the budget, have increased the annual deficit to this level (and even higher in the future) by cutting taxes and increasing spending. The US hasn’t had this high a debt level in comparison to the size of the overall economy (i.e., Gross Domestic Product [GDP]) since World War II.

Durst is baffled that President Trump and the Republicans in Congress would give a tax cut to wealthy people like him. “We’re mortgaging our children’s future. … The tax cut was an overall step in the wrong direction. Nobody who has any background in economics thought the tax bill was a good idea.” [2]

Over the last 40 years, President Clinton is the only President who has balanced the federal budget and reduced the overall debt.

Second, there’s Nick Hanauer, a billionaire, venture capitalist, and serial entrepreneur, who recorded a 6-minute TED Talk in 2012 and this summer wrote an article in The American Prospect magazine, both of which argue that taxes on the rich should be increased. [3] He argues that “taxing the rich is the only plan that would increase investment, boost productivity, grow the economy, and create more and better jobs.” He states (correctly) that there is no observable evidence or plausible economic mechanism to support the claim that cutting taxes for the rich will spur economic growth. This did not happen when President Reagan cut taxes on the rich; it did not happen when President G. W. Bush did it. However, when President Clinton raised taxes on the rich, the economy boomed and the federal government balanced the budget. President Trump and the Republicans cut taxes on the rich in December 2017 and the economy has not boomed; it has continued its slow growth that began under President Obama. Furthermore, well over 90% of the benefits of current economic growth are going to the wealthy.

In Kansas in 2012, Governor Brownback and Republicans in the state legislature dramatically cut taxes on the rich, promising unprecedented economic growth. The reality has been that Kansas’s economy has under-performed neighboring states and the country. Because of the loss of state revenue, spending on schools (and everything else) has been cut dramatically and the state’s courts stepped in and ordered the state to spend more on K-12 education. The legislators have now overridden a gubernatorial veto and reversed some of the tax cuts.

Many (if not all) credible studies of the interaction between tax rates for the wealthy and economic outcomes show either that 1) increasing taxes on the rich increases economic growth and other indicators of economic success and well-being or 2) there is no link between top tax rates and the economic benefits the proponents of tax cuts and trickle-down economics claim.

In the 1950s, the top tax rate was 91% – and the economy was booming. It was 70% in 1980 when President Reagan took office and he cut it to 50%. The 2017 tax cut cut the top rate to 37%! As Hanauer states in his TED Talk, if cutting tax rates on the rich led to economic growth and job creation, our economy would be exploding and everyone would have great jobs given that today’s top rate is only 37%.

Finally, Hanauer notes (accurately) that consumer spending is what drive the US economy; it accounts for 70% of GDP. Current levels of inequality mean that rich people (and corporations) literally have more money than they know what to do with. With income and wealthy that is over 1,000 times that of the average American, they can’t buy 1,000 houses, or 1,000 times as many cars, clothes, and food items.

Therefore, putting more money in the hands of the middle class, workers, and low-income people will boost the economy because they will spend it in the local economy. They will also invest some of the money in human capital development, i.e., education and training, for themselves and their children. These investments in human capital are key to spurring future growth and success for our economy.

Hanauer states that anything governments spend money on will pump more money into our economy that what the rich do with their excessive amounts of money. Low wages and high levels of inequality cause slow growth. Therefore, increasing inequality by cutting taxes on the rich will not spur economic growth. A 2014 report from the Organisation for Economic Cooperation and Development (OECD) concluded that growing economic inequality in the US had reduced its economic growth by 9% over the previous 20 years.

In conclusion, we need to reduce economic inequality in the US as a matter of fairness and to live up to our ideals of equal opportunity and that all people are created equal. We also need to reduce inequality to spur economic growth today and in the future.

To reduce economic inequality, we need to increase taxes on the rich and invest the revenue in good jobs (e.g., rebuilding our infrastructure), in human capital (e.g., education and training from birth and throughout careers), and in a safety net (e.g., unemployment insurance and guaranteed healthcare) to support people who fall on hard times.

These steps will allow the United States to live up to its ideals and principles of equal opportunity, will boost our economy, and will contribute to creating a fairer, more just society that supports all children and families.

[1] Isidore, C., 3/4/13, “Buffet says he’s still paying lower tax rate than his secretary,” CNNMoney (https://money.cnn.com/2013/03/04/news/economy/buffett-secretary-taxes/index.html)

[2] Long, H., 9/17/18, “‘I support higher taxes’: the billionaire behind the National Debt Clock has had it with Trump,” The Washington Post

[3] Hanauer, N., Summer 2018, “Want to expand the economy? Tax the rich!” The American Prospect (http://prospect.org/article/want-expand-economy-tax-rich)

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 27^th 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/)

MUELLER’S INVESTIGATION RESULTS TO-DATE: 35 INDICTMENTS, 3 GUILTY PLEAS, AND MORE

I’m interrupting my series on a progressive policy agenda for the US, because I think it’s important to document the results of the Mueller investigation into Russian influence in the 2016 election, given that President Trump and his supporters are apparently ramping up their efforts to discredit the investigation. (Much of this post is a summary of an article in the Huffington Post.) [1]

In 15 months of a very complex investigation, Mueller has gotten 35 indictments, 3 guilty pleas, 1 incarceration, and 1 on-going trial. Here are some of the details:

The on-going trial is of Paul Manafort, Trump’s former campaign chairman. Although the charges he’s currently being tried on aren’t directly linked to the campaign, they involve work he did for Ukrainians with close ties to Putin and Russia. He also had close ties directly to Russians and attended the Trump Tower meeting with Don Jr., Jared Kushner, and a Kremlin-linked lawyer who supposedly had dirt on Hillary Clinton.
Rick Gates, who worked on the Trump campaign and on the Trump inauguration, pled guilty to lying to Mueller and FBI investigators, as well as to financial malfeasance. He was also Manafort’s business partner.
Michael Flynn, Trump’s former national security advisor, pled guilty to lying about his meeting with the Russian ambassador during the presidential transition.
George Papadopoulos, a young foreign policy adviser to the Trump campaign, was the first person to plead guilty in the Mueller probe. He pleaded guilty to lying to the FBI about his knowledge that Russians had thousands of apparently stolen emails that would embarrass Hillary Clinton. He had mentioned this to an Australian diplomat. When hacked Democratic emails began appearing online, Australian officials passed information about Papadopoulos on to their American counterparts. Alarmed American officials had the FBI open a counterintelligence investigation into the Trump campaign in the summer of 2016, months before the presidential election. In accordance with FBI protocol, this investigation was kept secret. Papadopoulos was apparently one of the contacts the Russians used to try to establish secret communications with the Trump campaign.
Alex van der Zwaan is the one person who’s gone to jail as a result of the Mueller investigation. He’s the son-in-law of a Russian oligarch and pleaded guilty to lying to the FBI about his work with two members of President Trump’s campaign team, Manafort and Gates. He served 30 days in a federal prison and has been deported to the Netherlands.
Thirteen Russians have been indicted for a multi-million dollar conspiracy to influence the 2016 election through social media. They pretended to be Americans and bought political ads and organized political events. Facebook acknowledges that these efforts reached at least 146 million people, almost half of the US population, through Facebook and Instagram.
Twelve Russian military officers, who work for Russia’s main intelligence agency, have been indicted for hacking into the email servers of Hillary Clinton and the Democratic National Committee. They stole and then released thousands of emails. The content of these emails, along with reporting on their theft and release, dominated the news for weeks and clearly had an impact on the election.

The Mueller investigation is clearly a serious probe of significant and successful efforts to affect the 2016 election. Over its 15 months, the Mueller investigation has cost $7.7 million (as-of 3/31/18), a tiny fraction of the Justice Department budget of $28 billion. By way of comparison, the Starr probe of President Clinton lasted four and a half years (over 3 times as long) and cost $39 million, or around $58 million in today’s dollars when adjusted for inflation (over 7 times as much). There were at least three other independent or special counsel investigations during the Clinton administration that cost more than Mueller’s probe has. [2]

This investigation is NOT partisan. Mueller and Rosenstein, who oversees Mueller’s investigation and is second in command at the Justice Department, are both Republicans. Mueller is a highly decorated Marine officer who has spent most of his career in the Justice Department. President Reagan appointed him the US Attorney for Massachusetts, and he later served as an assistant US Attorney in D.C. and as US Attorney for Northern California. President George W. Bush appointed him second in command at the Justice Department and later as FBI Director. Congress unanimously extended his term as FBI Director in 2011. Rosenstein worked for the Starr investigation of President Clinton. President George W. Bush appointed him as US Attorney for Maryland and later nominated him to be a federal appeals court judge. President Trump appointed him as second in command at the Justice Department.

Before the election, in the early fall of 2016, the seriousness of foreign efforts to influence the election were becoming clear to US intelligence and criminal justice officials. President Obama convened a bipartisan meeting with members of Congress. His goal was to develop a bipartisan public statement on the Russian efforts to influence the election. He felt it was essential to have it be bipartisan so that it didn’t appear to be a partisan issue during the election. But the Republicans refused to go along, and no public statement was made.

Trump and his supporters have engaged in persistent, on-going efforts to discredit Mueller, Rosenstein, and the investigation. Their goal, according to Trump’s lawyer Giuliani, is to get the public to question the legitimacy of the investigation. The only reason I can think of that they would want to do that is because they are worried about the results of the investigation. From Trump’s personal perspective, which does seem to be all he really cares about, the most likely negative outcome of the investigation is evidence that would support impeachment.

The most likely impeachment charge against Trump is obstruction of justice, assuming no smoking gun of direct Russian collusion on his part is uncovered. So far the most likely obstruction of justice charges would be 1) his request that then-FBI director Comey stop the investigation of Michael Flynn’s meeting with the Russian ambassador, 2) his firing of FBI Director Comey, apparently in an effort to stop the investigation into Russian interference in the election, 3) his attempts to get Attorney General Sessions to rescind his recusal and take charge of the investigation (even though he met with the Russian ambassador during the campaign), and 4) his incessant efforts to discredit and undermine the investigation. As you think about whether this obstruction of justice might be grounds for impeachment, remember that President Clinton was impeached by the US House of Representatives (but the Senate failed to convict him) for obstruction of justice for lying to law enforcement about his affair with intern Monica Lewinsky. If lying about an affair is grounds for impeachment, President Trump is right to be worried.

(Note: The investigation of Trump’s former lawyer, Michael Cohen, is not part of Mueller’s investigation, although it is reportedly the result of a referral from the Mueller team. The investigation of Cohen is being undertaken by the US Attorney in New York.)

[1] Reilly, R.J., 7/27/18, “The Mueller investigation, explained. Here’s your guide to the Trump-Russia probe,” HuffPost (https://www.huffingtonpost.com/entry/mueller-investigation-trump-russia-probe_us_5b4cdda5e4b0e7c958fe3141)

[2] Kutner, M., 12/5/17, “Mueller’s Trump investigation cost slammed by Republican: ‘They must be having one hell of a Christmas party’,” Newsweek

WINNING ELECTIONS BY EXCITING VOTERS WITH PROGRESSIVE POLICIES

We need to elect people to Congress in November who will stand up to vested and powerful interests (namely wealthy individuals and large corporations) on behalf of everyday working people and families. We need to do this to rescue our democracy from plutocracy. This will require a high voter turnout, which will happen only if voters are excited and enthusiastic about the candidates they are voting for. It does not happen if voters are just voting against the other candidate or party, or for the lesser of two evils; that is not enough to motivate many voters to get out and vote.

In the last presidential election, despite all the attention it got, less than 56% – barely half – of eligible citizens actually voted. Although Trump and Clinton each excited a relatively small segment of voters, the electorate at large was not excited by either of these two candidates. Senator Sanders in his run for the Democratic nomination excited more voters and had more voters enthusiastically voting for him than either Trump or Clinton. President Obama excited enough voters, particularly Blacks, in his 2008 run for president that 62% of eligible voters went to the polls, which is the highest turnout since 1970, but still well below voter turnout among most of the other relatively wealthy democracies. (I’ll do a subsequent post on low voter participation in the US and reasons for it.).

If Democrats want to win in November, they need to put forward a clear, progressive agenda that will excite and motivate a broad swath of the electorate. Such a strategy has the potential to increase turnout substantially by getting people who vote irregularly or who have never voted excited and wanting to go vote. This is particularly important in non-presidential elections when typically, only 40% of eligible voters go to the polls. Some Democrats think that running against President Trump and the Republicans who are enabling his behavior and policies will lead them to electoral success. This is a risky strategy; it’s much better to be running for something than against something.

Exciting and motivating voters is what Senator Sanders did in his surprisingly successful and almost victorious campaign for the Democratic presidential nomination. This is what Alexandria Ocasio-Cortez did in winning a shocking upset in her recent primary election victory for a US House seat in New York. This is what Senators Merkley and Warren and others are doing in their re-election bids. And what a wide range of candidates for local, state, and national offices are doing across the country. It is why Sanders and Ocasio-Cortez were in Kansas supporting two candidates for Congress, James Thompson and Brent Wilder. Overflow crowds of thousands enthusiastically rallied for these progressive candidates in Republican Kansas. [1]

An emerging progressive movement is evident in at least four candidates for Governor (in Florida, Maryland, Michigan, and New York), at least 53 congressional candidates, and too-numerous-to-count candidates for state legislatures and local government posts. [ 2] These candidates are listening to the grassroots and to polls that show what Americans want from their government – good jobs with fair pay, good K-12 public education, affordable higher education, support for balancing work and family, a health care system that works (with many specifically supporting a single-payer system or Medicare-for-all), and economic security. Unfortunately, many of the leaders of the Democratic party are resisting this progressive ground swell of energy, fighting against it by supporting centrist and corporate-leaning candidates rather than progressive, grassroots candidates.

Many in the media and some political pundits are describing this progressive movement as “far left.” That may be true in today’s political climate, but it is not true historically. Many of the progressive policies being espoused by the current progressive movement were mainstream Democratic policies in the 1960s and a surprising number of them were supported by Republicans then as well. As a more recent example, believe it or not, the individual mandate of the Affordable Care Act (ACA) – the requirement that everyone buy health insurance – was a conservative, Republican think tank policy proposal. Despite the vehement Republican attacks on the individual mandate ever since the ACA was proposed – and Democrats’ unwillingness to defend it with any vigor – the individual mandate was proposed by the very conservative and Republican Heritage Foundation as part of its plan for comprehensive national legislation to provide universal “quality, affordable health care.” The plan was introduced in a 1989 book, “A National Health System for America,” by Butler and Haislmaier. [3]

In labeling current progressive policy proposals as “far left,” people are forgetting that President Clinton and other Democrats in the late 1980s and 1990s moved the Democratic Party a long way to the right and toward the political center in their efforts to win the presidency after 12 years of Republican presidents and then to win Clinton’s re-election.

The emerging progressive movement is getting short shrift from our mainstream media. A dramatic example is the lack of media coverage of the Poor People’s Campaign. From late May through June, it sponsored 40 days of action including multiple rallies and civil disobedience actions in Washington, D.C., and 30 state capitals but it got almost no coverage in the mainstream media. Thousands of people demonstrated, and hundreds were arrested for civil disobedience, but coverage was minimal. It was organized to commemorate the 50^th anniversary of Martin Luther King’s original Poor People’s Campaign that linked the issues of civil rights and economic justice for all. [4] [5]

A number of groups have been organized to support progressive, grassroots candidates including Our Revolution (the spinoff from Senator Sanders presidential campaign), the Progressive Change Campaign Committee (which describes itself as the Senator Elizabeth Warren wing of the Democratic Party), the Working Families Party, Indivisible, Justice Democrats, and Brand New Congress. They provide numerous opportunities to support progressive candidates and activities, if you’re so motivated.

These organizations and the candidates they support are putting forth a progressive policy agenda. However, they tend to do so in a piecemeal fashion that makes it hard to grasp or summarize overall goals. In my next posts, I will summarize various proposals for an overall progressive policy agenda for the US that would excite voters by addressing issues that truly matter to working Americans.

[1] Nichols, J., 7/20/18, “Sander and Ocasio-Cortez rally Kansas for a working-class politics that stands up to the Kochs,” The Nation (https://www.thenation.com/article/sanders-ocasio-cortez-rally-kansas-working-class-politics-stands-kochs/)

[2] Burns, A., 7/21/18, “There is a revolution on the left. Democrats are bracing,” The New York Times

[3] Roy, A., 10/20/11, “How the Heritage Foundation, a conservative think tank, promoted the individual mandate,” Forbes (https://www.forbes.com/sites/theapothecary/2011/10/20/how-a-conservative-think-tank-invented-the-individual-mandate/#720de15a6187)

[4] Sarkar, S., 5/23/18, “Hundreds of Poor People’s Campaign activists got themselves arrested for racial justice,” Common Dreams (https://www.commondreams.org/views/2018/05/23/hundreds-poor-peoples-campaign-activists-got-themselves-arrested-racial-justice)

[5] Corbett, J., 6/21/18, “‘Stop the war! Feed the poor!’: March by Poor People’s Campaign ends with arrests in DC,” Common Dreams (https://www.commondreams.org/news/2018/06/21/stop-war-feed-poor-march-poor-peoples-campaign-ends-arrests-dc)

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 21^st 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

GERRYMANDERING IS UNDERMINING OUR DEMOCRACY

Gerrymandering, the manipulation of the boundaries of an electoral district to predetermine the outcome based on party, race, incumbency, or other factors, has been happening for a long time. Traditionally, it was used to protect individual incumbents or to limit black and minority representation.

Typically, the state legislature redraws the boundaries of its state’s electoral districts with the new Census data available every ten years. With the 2020 Census coming up soon, there are efforts that some believe are meant to undercount hard-to-reach populations such as low-income households, minorities, and immigrants. (See my previous post for more detail.) If this occurs, it would mean that these residents will be under-represented when electoral districts are drawn, and, therefore, their voice and representation in state and federal legislative bodies would be diminished.

Gerrymandering has become more blatant, dramatic, and effective in the 21^st century. It has been both fueled and exacerbated by partisanship and extremism in our state and national legislative bodies. It has been facilitated by increasingly sophisticated computer technology for mapping, analyzing, and tracking voters’ preferences and history. Historically, both Democrats and Republicans have engaged in gerrymandering.

Independent analyses find that in the redrawing of districts for the US House of Representatives following the decennial Censuses from 1970 to 2000, Democrats engaged in what’s called extreme partisan gerrymandering in one state after each of these four redistricting cycles. This occurred most dramatically in California in 1980. At its peak in the 1980s and 1990s, the best estimates are that through gerrymandering Democrats gained 3 – 5 seats in the House (out of 435 seats) above what would have otherwise been expected. After the 2010 Census, the Democrats did not engage in extreme partisan gerrymandering in any state. [1]

In redistricting after the 2000 and 2010 Censuses, independent analyses of the redrawing of districts for the US House find that Republicans engaged in extreme partisan gerrymandering in four states and seven states, respectively. The best estimates are that Republicans currently gain, through gerrymandering, between 15 and 20 seats in the House (out of 435 seats) above what would have otherwise been expected. A shift of 22 seats would change control from Republicans to Democrats.

For example, North Carolina is one of the states with extreme partisan gerrymandering of its Congressional districts. As a result, in 2012, Democrats got 51% of the votes for Congress statewide, but only won 4 of 13 seats in the House. In Pennsylvania, another state with extreme partisan gerrymandering, Democrats received just over half of the votes in 2012 but only 5 of 18 Congressional seats. [2] (This previous post has more information on the 2012 election results and on gerrymandering.)

Partisan gerrymandering has also dramatically affected thousands of seats in state legislatures. In Wisconsin, for example, in the 2012 election, Republicans received 49% of the statewide vote but got 60% of the seats in the Assembly of the state legislature. [3]

Extreme partisan gerrymandering has another, more insidious, effect. Nationwide, almost 100 of the 435 seats in the US House have been gerrymandered so only one of the two parties can win the seat. This means that the final election in November is meaningless for these seats. It also means that the voters of the party not in control of the district are effectively disenfranchised – their votes don’t matter (at least in terms of the election of their US Representative). Hence, tens of millions of voters effectively have no say in who is elected as their congressional representative.

In these congressional districts, gerrymandered to allow only one of the parties to win, the only election that matters is that party’s primary. Given the low voter participation in primary elections, a small number of voters, often ones with relatively extreme political views, determines who the US Representative will be. This is a significant contributing factor to the extreme partisanship and gridlock in Congress.

Extreme partisan gerrymandering insulates elected officials from all but a small handful of their constituents – those that vote for them in primary elections. Therefore, these congressional representatives do not need to worry about representing the interests of most of their constituents. When elected representatives redraw legislative districts after the Censuses and engage in gerrymandering, essentially the elected officials are picking their voters, rather than voters choosing their elected representatives.

This is clearly undermining democracy and the democratic principle of one person, one vote, i.e., that each voter has an equal voice in our democracy.

Partisan gerrymandering is accomplished by packing as many supporters of the opposition party into as few districts as possible. The opponents will win these seats overwhelmingly. Meanwhile, supporters of your party are spread more evenly across the other districts, so your party will comfortably win as many seats as possible. For example, in Pennsylvania in 2012, as the result of Republican gerrymandering, the Democrats won 5 congressional districts by an average margin of 76% to 24% (a 52 percentage point margin). The Republicans won 13 districts by an average of 59% to 41% (an 18 percentage point margin). [4] Clearly, if the Democratic voters had been spread out more evenly, the Democrats would have won more seats but by smaller margins. Overall, Democrats got about 350,000 votes and Republicans got about 250,000, but the Republicans won 13 of 18 seats. With fair districts, Democrats would have gotten 10 or 11 seats and Republicans 7 or 8 seats. So, extreme partisan gerrymandering produced a swing of 5 or 6 seats to the Republicans in Pennsylvania.

My next post will discuss what can be done to stop gerrymandering.

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

[2] Li, M., 2/6/18, “What Pennsylvania’s landmark partisan gerrymandering ruling means,” Brennan Center for Justice (https://www.brennancenter.org/blog/what-pennsylvania-landmark-partisan-gerrymandering-ruling-means)

[3] Fried, C., 7/10/17, “Gerrymandering is unfair and unjust,” The Boston Globe

[4] Ballotpedia, retrieved from the Internet on 6/4/18, “United States House of Representatives elections in Pennsylvania, 2012” (https://ballotpedia.org/United_States_House_of_Representatives_elections_in_Pennsylvania,_2012)

THE UNDERMINING OF THE INDEPENDENCE OF OUR JUDICIARY

There is widespread acknowledgement that fair and impartial courts and judges are essential to public trust in our court system and our democracy. A key role of the judiciary is to ensure that the legislative and executive branches of government do not overstep their authority or violate individuals’ rights. This is one of the key checks and balances that is part of the Constitution. Members of the legislative and executive branches should respect judges’ independence even when they disagree with their decisions.

In recent years, the judicial appointment process at the federal and state levels, elections of judges in some states, and court decisions themselves have gotten increasingly politicized. This is not a positive trend for our democracy and the politicization of the judiciary only seems to be accelerating.

President Trump on multiple occasions has criticized judicial decisions and demeaned individual judges. This is unprecedented and unhealthy for our courts and our democracy.

The President’s attacks on the judiciary seem to have emboldened others in their efforts to politicize our judicial system. In 2018, at least 14 states are considering at least 42 legislative proposals that would reduce the independence of judges and court systems. These proposals include giving legislators more control over the selection of judges, putting political or financial pressure on judges to rule the “right” way, and giving legislatures the power to override court decisions, including deciding the constitutionality of laws they themselves wrote. [1]

The attacks on judicial independence are coming from right-wing, wealthy interests in efforts to:

Have unlimited ability to sell guns and ammunition, as well as to carry guns, (Note: This is not really about Second Amendment rights; it’s about the ability of gun manufacturers to sell guns and ammunition to make big profits.)
Limit women’s ability to make decisions about their reproductive health,
Limit the rights of LGBTQ individuals,
Block every citizen’s right to an equal voice in our democracy through 1) restrictions on voting rights, 2) gerrymandered voting districts, and 3) unlimited campaign funding by wealthy special interests,
Expand the use of the death penalty and maintain an inequitable criminal justice system,
Block funding for public schools that ensures that every child receives a free and appropriate education as required by state constitutions,
Block fair taxes and fair employment and business practices necessary to stop spiraling economic inequality, and
Promote policies based on religious beliefs rather than the interests of the public.

For example, in Pennsylvania, legislators unhappy with a state Supreme Court ruling that a Republican gerrymandering of congressional districts was illegal, at first refused to comply with the court’s order and then threatened to remove the judges who had ruled against them. [2]

In Washington state, where judges are elected, legislators have proposed requiring analysis of how much each state Supreme Court decision will cost taxpayers. In decisions about individuals’ rights, cost should not be a factor and using the cost of a judge’s decisions should not be a factor in an election campaign. In North Carolina, legislators have proposed giving themselves more power in the selection of judges and in gerrymandering judicial districts. They have also proposed making judges run for election every two years. In Iowa, legislators unhappy with a judge’s decision to ban guns from courthouses have threatened to cut judges’ salaries and to require the courts to pay rent, using their control of the purse strings to try to affect judges’ rulings.

The impartiality and integrity of our state courts is critical because they handle the vast majority of criminal and civil cases in the U.S. For example, 94% of felony convictions occur in state courts, including 99% of rape cases and 98% of murder cases. In criminal cases, there is compelling evidence that the pressures of election campaigns and negative campaign ads affect judicial decision-making. (See this previous post for more detail.)

In summary, judges are facing unprecedented challenges to their ability to deliver fair, impartial justice free from partisan pressure. Not only are partisan elected officials trying to put their thumbs on the scales of justice, but in addition the rapid increase in spending on judicial campaigns has exacerbated the challenges to judicial fairness and integrity. (See this previous post for more detail.) We need to oppose efforts to undermine the independence of the judiciary whenever and wherever they arise.

We need to support policies and practices that protect the independence of the judiciary. Two key policies related to the selection of judges are for states to use an effective, non-partisan appointment process or to have effective regulation of judicial elections and spending on them. Partial public financing systems, which match individuals’ small contributions with public money, can legally limit spending and the size of contributions. These are important steps in controlling the influence of campaign money on judicial decisions. (See this previous post for more detail.)

Eroding the checks and balances between our branches of government, and in particular the courts’ independence in making decisions fundamental to our democratic principles, is unpatriotic and antithetical to the Constitution. Increasing politicization of the courts is likely to further increase divisive partisanship. Reduced independence and power in the courts could be extremely difficult to reverse after the fact; this may well be a snowball that will roll uncontrollably downhill. Politicizing the judiciary would make its decisions subject to the whims of the current political environment rather than based on long-term constitutional, legal, and democratic principles.

[1] Brennan Center for Justice, 2/6/18, “Legislative assaults on courts – 2018,” New York University Law School, (https://www.brennancenter.org/analysis/legislative-assaults-state-courts-2018)

[2] Keith, D., 2/21/18, “Democracy unchecked: Trump spurs state lawmakers to curb judges’ powers,” The American Prospect (http://prospect.org/article/democracy-unchecked-trump-spurs-state-lawmakers-curb-judges%E2%80%99-powers)

LOCAL POLICIES SERVING RESIDENTS BLOCKED BY RIGHT WING CONSERVATIVES

Right wing conservatives supposedly, ideologically, support local political control. Their actions, however, are first and foremost, designed to benefit the special interests that provide their financial support. They are using their political power at the state and federal levels to block and preempt progressive policies at the local level. Policies that benefit workers and the public good are blocked if they are opposed by the large corporations and wealthy executives who provide campaign funding. Right wing conservatives loudly proclaim their support and allegiance to the Constitution and democracy, but willingly undermine both when it serves the interests of their plutocratic backers. [1]

Right wing conservatives block the will of the majority using multiple strategies:

Passing laws or taking executive actions that block progressive policies of local communities,
Limiting the ability of judges and the courts to uphold the Constitution and laws that protect political, social, economic, and civil rights, and
Manipulating voting and representation through gerrymandering, voter suppression, and rigging of the Census.

This post will focus on laws and executive actions that block progressive policies. Subsequent posts will cover efforts to limit the independence of judges and the courts, as well as gerrymandering. Previous posts have discussed the rigging of the Census and voter suppression.

The plutocrats (i.e., those who have power due to their wealth) have used their money over a period of 40 years to buy political influence and elections. The resultant political shift to the right in Congress and the White House, and in many state legislatures and governorships, has meant that local communities are more frequently finding themselves at odds with policies established by right wing conservatives at the state and federal levels. In particular, large cities, which are substantially more diverse and politically progressive than the non-urban population, are having their progressive policies blocked by conservative, elected officials in state and federal offices.

One of the more notable conflicts between the Trump administration and local communities is over the treatment of immigrants, particularly undocumented immigrants. Over 150 cities or counties have directed their police forces not to arrest or hold residents based solely on federal immigration law violations. Local law enforcement needs to have positive relationships with all residents, including undocumented immigrants, so it can keep everyone safe and ensure that everyone is comfortable interacting with the police for their own and others’ safety.

The Trump administration uses multiple tactics (e.g., threats to cut off funding and engaging in aggressive actions by federal immigration enforcement forces in those communities) to attempt to discourage and punish local initiatives to maintain good relationships between undocumented immigrants and police. The Trump administration is trying to coerce local communities into undermining local law enforcement and public safety.

At the state level, there are many examples of state governments blocking local policies that serve residents. These have gotten little attention in the mass media. For example, states have passed laws that prohibit municipalities from:

Raising their minimum wage (25 states, including almost every Southern state),
Requiring local employers to provide paid sick time and / or establishing a paid family and medical leave program (at least 17 states),
Providing local Internet service (typically at lower cost or higher speed than available from private providers) (at least 17 states),
Regulating ride-sharing services such as Uber and Lyft (at least 37 states),
Implementing local taxes to meet local needs (at least 42 states),
Regulating consumer and public health safety (e.g., tobacco products, food labeling, plastic bag bans, and fracking and other environmental threats),
Removing or altering Confederate monuments (at least 6 states),
Regulating short-term home rentals such as Airbnb (at least 3 states),
Protecting the rights of gay and lesbian people (at least 3 states), and
Taking steps to reduce gun violence by regulating guns and ammunition. [2] [3] [4] [5]

Nonetheless, local communities are asserting their progressive values. For example, 21 states and 32 localities have raised their minimum wage above the federal level since 2014. In response, the corporate-funded and run American Legislative Exchange Council (ALEC) has drafted and provided to state legislators across the country model legislation called the “Living Wage Preemption Act” designed to block local increases in the minimum wage.

In some cases, states have overridden and reversed policies and programs after they have been established at the local level. For example, in Austin, Texas, the state struck down a local ordinance requiring fingerprinting of Uber and Lyft drivers. And Texas legislators have promised to introduce legislation to repeal Austin’s recently passed paid sick time law. In Ohio, the state retroactively canceled Cleveland’s increase in its minimum wage.

These efforts at preemption of local progressive policies are occurring because right wing conservatives and their wealthy backers know that the successes of these policies and programs represent a powerful refutation of their ideology and political arguments. The right wing also knows it is outnumbered if there is broad participation in elections and political activity. Therefore, one of their goals is to suppress voting and political engagement. Limiting the success of grassroots initiatives is key to preventing the building of a truly powerful, larger and broader progressive movement.

State and federal preemption of local policies usurps communities’ power and right to control their own destinies. Although preemption can play a positive role in setting a floor or minimum standard for policies on safety, environmental standards, human rights, and labor standards, its current use by right wing conservatives is anti-democratic because it is pushing the interests of the plutocracy – wealthy individuals and large corporations – and undermining democratic self-determination.

[1] Doonan, M., 12/14/17, “Opportunistic federalism and a liberal resurgence,” The American Prospect (http://prospect.org/article/opportunistic-federalism-and-liberal-resurgence)

[2] Miller, J., 2/21/18, “In the face of preemption threats, Austin passes paid sick leave,” The American Prospect (http://prospect.org/article/face-preemption-threats-austin-passes-paid-sick-leave)

[3] Miller, J., 8/22/17, “On monuments and minimum wages,” The American Prospect (http://prospect.org/article/monuments-and-minimum-wages)

[4] Von Wilpert, M., 3/13/18, “Preemption laws prevent cities from acting on everything from labor and employment to gun safety,” Economic Policy Institute (https://www.epi.org/blog/preemption-laws-prevent-cities-from-acting-on-everything-from-labor-and-employment-to-gun-safety/)

[5] Hightower, J., May 2017, “GOP state legislatures are attacking local democracy,” The Hightower Lowdown (https://hightowerlowdown.org/article/gop-state-legislatures-are-attacking-local-democracy/)

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

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.

CORPORATE MEDIA THREATEN OUR DEMOCRACY Part 1

I’ve just finished reading Senator Bernie Sanders’ book, Our Revolution: A Future to Believe In. [1] The first part (6 chapters) is about the campaign and is interesting if you’re a political junkie.

The second part (10 chapters) is the policy platform that was the basis for his run for the presidency. It includes chapters on health care, education, climate change, criminal justice, immigration, the middle class, an economy that works for everyone, and reclaiming our democracy. These chapters are interesting if you’re interested in any of these issues or in knowing how we can get back to a society that is fair and just and provides equal opportunity for all.

The chapter that had the biggest effect on me was the one titled, Corporate Media and the Threat to Our Democracy. This chapter identifies the six huge corporations that control 90% of what we see, hear, and read. Combined, they have over $275 billion in revenues and are controlled by 15 billionaires. (In 1983, 50 corporations controlled 90% of our media and that was a high level of concentration.) Today’s 6 media corporations, and some key information about them, are:

Comcast (Revenue: $56 billion in 2011) It owns NBC, Telemundo, USA Network, New England Cable News, and a portion of A&E, the History Channel, Lifetime, PBS KIDS Sprout, and Hulu, as well as much, much more. It wants to merge with Time Warner (see below).
Disney (Revenue: $40 billion in 2011) It owns ABC; ESPN; Marvel; 277 radio stations; music and book publishers; Touchstone, Miramax, and Pixar production companies; and majority stakes in A&E, the History Channel, and Lifetime; as well as much, much more.
News Corp (Revenue: $33 billion in 2011) It owns Fox, National Geographic, Dow Jones (which includes The Wall Street Journal, Barron’s, and Smart Money), the New York Post, TV Guide, the book publisher HarperCollins, Blue Sky Studios, and a portion of ESPN and Hulu, as well as much, much more.
Time Warner (Revenue: $29 billion in 2011) It owns CNN, HBO, TMZ, TBS, TNT, Cartoon Network, 22 magazines (including Time, People, Sports Illustrated, Life, Entertainment Weekly, Fortune, etc.), and much, much more. It wants to merge with Comcast (see above).
Viacom (Revenue $15 billion) It owns MTV, Nickelodeon, Comedy Central, Spike TV, BET, Paramount Pictures, and over 160 cable networks that reach over 600 million people, as well as much, much more.
CBS (Revenue $14 billion) It owns Showtime; Smithsonian; Simon & Schuster, Scribner, and Free Press book publishing; 130 radio stations; and much, much more.

Currently, Comcast and Time Warner, two of these corporate media giants, are proposing to merge, while two others, Disney and News Corp, are discussing a possible merger, and some shareholders are pressing the final two, CBS and Viacom, to merge. Therefore, media concentration is likely to increase further in the near future, unless we and regulatory government agencies take a stand against it.

These media giants play a huge role in shaping public consciousness and knowledge, and, therefore, affect political beliefs, the public’s understanding (or lack thereof) of policy issues, and election outcomes. Note that there are multiple joint ventures among these media giants, which further limit the variety of content available and provide opportunities for collusion.

Realistically, freedom of the press is accessible only to those who own a press, a radio or TV station, or a cable network, or who produce content distributed by these media outlets. Concentrated ownership of our news media means that a very few human beings, who have significant conflicts of interest (e.g., with advertising revenue), make the decisions about what news is presented and how. More importantly, they make decisions about what is NOT covered or reported.

In my next post, I’ll share some examples that Sanders gives of what’s covered and not covered by the corporate media and why. I’ll also identify some opportunities for action on the power of the giant media corporations and their threat to our democracy.

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

U.S. FAILS TO PROSECUTE PRESCRIPTION OPIOID DISTRIBUTOR

After years of work by U.S. Drug Enforcement Agency (DEA) investigators building a case against a major drug distributor for fraudulently shipping millions of prescription opioid pills, high-ranking lawyers at the DEA and the US Department of Justice (DOJ) recently decided to settle the case and not pursue criminal charges. Instead, the lawyers settled for a $150 million fine (from a corporation with roughly $200 billion per year in revenue) and a temporary suspension of shipments of narcotics from four of its 30 distribution centers. The lenient settlement was agreed to despite the corporation having promised in a 2008 settlement to be diligent in preventing fraudulent shipments of controlled substances. However, rather than improving its oversight of narcotics shipments, its fraudulent shipments increased. [1]

The DEA team had compelling evidence that McKesson Corporation, the fifth largest public company in the U.S., had fulfilled and failed to report suspicious orders for millions of highly addictive painkillers from pharmacies, including Internet pharmacies. The nationwide DEA team, working with U.S. attorney’s offices in 11 states, wanted to fine the corporation over $1 billion and pursue criminal charges against the corporation and perhaps some of its executives. A senior DEA official stated that the corporation could have been put out of business through an indictment or a very large fine.

But when the team turned over the evidence to top lawyers at DEA and DOJ, the lawyers negotiated a settlement with the corporation and never even discussed possible criminal charges. They even allowed McKesson to keep its $31 billion federal government contract to supply drugs to the Veterans’ Administration, federal prisons, and the Indian Health Service.

Meanwhile, a pharmacy owner in a small town in Colorado that McKesson supplied was found guilty of drug trafficking and was sentenced to 15 years in prison. From 2008 (when McKesson had settled the first set of charges) to 2011, McKesson’s shipments of oxycodone (the narcotic drug that is OxyContin) to this small-town pharmacy had increased 15-fold.

The DEA team had convincing evidence that McKesson’s activities had fueled the nationwide opioid drug crisis. The $150 million fine was a slap on the wrist for a $200 billion corporation that paid its top executive $100 million last year, has 76,000 employees, and makes $100 million a week in profits. The DEA team felt insulted, undermined, and was demoralized.

This is another example of a powerful corporation, as well as its senior executives, getting off with a slap on the wrist for significant criminal activity that harmed hundreds of thousands of Americans. Purdue Pharma, the major player in the prescription opioid drug scandal, also has (so far) gotten off with a slap or two on the wrist, despite the deaths of over 200,000 Americans. (See my previous posts on Purdue Pharma here and here.) The Wall St. financial corporations and their executives have also gotten off with slaps on the wrist despite a long trail of criminal activity across many years and many business lines.

One must ask why this is happening today when in the late 1980s, during the savings and loan (S&L) bank scandal, 750 S&Ls were forced into bankruptcy and out-of-business and over 1,000 of their executives went to jail.

Since the 1980s, corporations have grown in size and power, while government regulation and oversight have been weakened. As corporations have grown, they have gained power in the economy and in the halls of government. In the economy, their size has led to monopolistic power, a lack of competition, and, therefore, the power to control prices and make huge profits.

In the halls of government, the deregulation of campaign financing now allows wealthy corporations and individuals (often business executives) to spend hundreds of millions of dollars on candidates’ campaigns for legislative, executive, and judicial branch offices. As a result, elected officials – legislators, governors, presidents, and judges – are indebted to wealthy donors. These wealthy special interests further influence government decision making by spending millions of dollars on lobbying and by having individuals move back and forth between government roles and private sector jobs, in what is referred to as the revolving door. An example of this is that one of McKesson’s lawyers negotiating the settlement with the DEA and DOJ was a former top DEA official.

Therefore, government decisions tend to favor the interests of wealthy corporations and individuals. Examples include the lack of meaningful punishment for serious wrong doing, favorable tax policies, a failure to protect the public from rip offs in the market place, and weak regulation of the safety of consumer products and our air and water.

In this environment of market place power and weak regulation, the greed of large corporations and their executives is unconstrained and ethics, morality, and often legality get pushed aside. The public interest is overwhelmed by the power of wealthy special interests. This power imbalance is exacerbated by the growing inequality of income and wealth.

We need to elect officials who will represent the public interest and not wealthy corporations and individuals. We also need to let our elected officials know that we are watching and that we know when they are doing the bidding of the wealthy interests, such as in the recent tax bill. And we need to hold them accountable by being informed and voting. That alone could create dramatic change in our country if more people did so.

Only 53% of eligible voters voted in the last presidential election. Many of them were understandably voting against the tilt in favor of the wealthy in Washington. However, they were hoodwinked by the promises of a con man who, now that he is in office, is tilting the scales even further in favor of the wealthy.

Hopefully, this election woke people up to the fact that democracy is NOT a spectator sport. We need a broad, informed, and engaged electorate for our democracy to deliver on its promise of government of, by, and for the people.

[1] Bernstein, L., & Higham, S., 12/17/17, “‘We feel like our system was hijacked’: DEA agents say a huge opioid case ended in a whimper,” The Washington Post

VOTER SUPPRESSION IS A REAL THREAT TO OUR DEMOCRACY

The biggest threat to the integrity of our elections is voter suppression. Our democracy is built on the principle of one person, one vote, and the right of every citizen to cast his or her vote and have it counted. However, in the 2016 presidential election, hundreds of thousands of citizens were kept from voting by new state laws and procedures that have made it harder to vote.

State laws and procedures that inhibit voting are part of a Republican strategy to win elections at any cost. (This strategy also includes the overturning of the Voting Rights Act by the Supreme Court, extreme gerrymandering of legislative and Congressional districts, as well as loosening campaign finance laws to allow wealthy individuals and corporations to spend freely and often anonymously on our elections.)

These voter suppression techniques are designed to reduce voting by low-income and minority citizens, who are more likely to vote for Democrats. The techniques include making it harder to register to vote, purging names of eligible voters from voting lists, permanently prohibiting those with felony convictions from voting even after they have served their time, and making it harder to actually vote.

States have made it harder to vote by reducing the number of polling places, reducing the days and hours for voting, and requiring specific personal identification – and sometimes making it difficult to obtain the required photo identification document. These actions often target communities or neighborhoods that are disproportionately low-income or minority.

For example, Wisconsin passed a restrictive voting law in 2011. Although state Republicans promised that not a single voter would be disenfranchised by the law, the best estimates are that 200,000 – 300,000 eligible voters lacked the photo ID necessary to vote in the 2016 presidential election. And Republican state legislators acknowledged in more candid moments that Democratic voter suppression was the goal. The law also cut early voting days, hours, and locations.

A judge struck down the law as clear voter suppression, but was overruled by a conservative appeals court. A judge overseeing the implementation of the law, repeatedly criticized the state for its failure to provide IDs in a timely fashion and for other actions that inhibited voting. [1] Overall, the result was that 91,000 fewer people voted in Wisconsin in 2016 than in 2012 and the turnout was the lowest since 2000. After the election, many eligible voters’ stories of being unable to vote were reported by the media. [2]

Trump won the election in Wisconsin by just 22,750 votes (less than 1%) and the Republicans’ voter suppression efforts may well have been the deciding factor. In Milwaukee, where 70% of the state’s African Americans live and Democratic voting is strong, 41,000 fewer people voted than in 2012, a 13% drop. [3] It’s possible that some of this may have been due to lowered interest without Obama on the ballot. However, a recent study found that in Milwaukee and Dane counties [4] 11% of registered voters (17,000 people) were deterred from voting by Wisconsin’s voter ID law and 6% (9,000) were prevented from voting by the ID law. Among low-income registered voters (household income under $25,000), 21% were deterred from voting, compared to 7% with incomes over $25,000 and 3% with incomes over $100,000. For white registered voters, 8% were deterred from voting, while for African Americans it was 28%. [5] Statewide it is estimated that 45,000 voters were deterred from voting by Wisconsin’s voter ID law. It is likely that this alone (not including the other voter suppression efforts) switched the Wisconsin presidential election outcome and its 10 electoral college votes from Clinton to Trump.

In Michigan, a Trump campaign official stated prior to the election that they had a three-pronged voter suppression effort underway. The Michigan voter ID law, as in Wisconsin, clearly prevented or discouraged many eligible voters from voting. Furthermore, 55,000 voters had been purged from the voter registration lists based on an error-prone process of matching their names with the names of registered voters in other states. Finally, in Detroit, a recount was cut short despite large numbers of ballots that voting machines failed to read properly, but where the voter’s intent was clear based on a visual examination of the ballot.

Given that Trump won the election in Michigan by 10,700 votes (less than ¼ of 1%), the Republicans’ voter suppression efforts are likely to have been the deciding factor in his victory there, which gained him 16 electoral college votes.

In Pennsylvania, a strict voter ID law was passed in 2012, but was overturned by the courts before the 2016 election. Other voter suppression efforts were identified in 2012 and responses to them lessened their impacts on the 2016 election. However, in 2016, a delay in processing valid voter registrations kept at least 26,000 voters off the list of registered voters on election day, and the number could go higher if further investigation is done. The majority of the identified disenfranchised voters were in the diverse city of Philadelphia.

Given that Trump won the election in Pennsylvania by 44,300 votes (less than 1%), the Republicans’ voter suppression efforts might have been the deciding factor in his victory there, which gained him 16 electoral college votes. [6]

A change in the winner in these three states with 46 electoral votes would have changed the outcome of the presidential election. So, the impact of voter suppression efforts is potentially very significant.

These three states are examples of a broad, decade-long attack on voting rights. Over 20 states have passed new restrictions on voting since 2010. [7] An analysis from the non-partisan General Accounting Office (GAO) examined the effect of voter ID laws in Kansas and Tennessee in 2012. It concluded that due to their new voter ID laws, voter turnout dropped 1.9% in Kansas and 2.2% in Tennessee. That would represent about 34,000 voters in Kansas and about 88,000 in Tennessee. The GAO’s analysis found that young people, Blacks, and newly registered voters were disproportionately impacted. [8]

The US Supreme Court overturned key portions of the Voting Rights Act in 2013, claiming that racial discrimination in voting was no longer a problem. However, subsequent events proved them wrong. Within months of this decision, states were passing voter suppression laws that federal courts have noted were “passed with racially discriminatory intent.” [9] A judge struck down a package of voter suppression laws in North Carolina last year, noting that they targeted Black voters “with almost surgical precision.” [10]

Nationally, it is estimated that 10% of eligible voters (13 million people) don’t have an ID that would comply with new state voter ID laws. And although some of the most egregious voter suppression laws have been struck down by the courts, this often doesn’t happen until after the election when the damage has been done.

Voter suppression is antithetical to the principles and integrity of our democracy. Not only does it distort and manipulate the outcomes of our elections, it violates the one person, one vote, foundational equity of democracy and undermines the trust of the electorate in our governments. It makes elected officials less accountable to the people they supposedly represent. It harms our credibility around the world as our elections are seen as illegitimate and rigged. We need to condemn and fight back against voter suppression efforts as undemocratic and truly un-American.

[1] Berman, A., Nov. / Dec. 2017, “Rigged: How voter suppression threw Wisconsin to Trump and changed the election,” Mother Jones (http://www.motherjones.com/mag/2017/11/toc/)

[2] Cassidy, C.A., & Moreno, I., 5/9/17, “In Wisconsin, ID law proved insurmountable for many voters,” Associated Press (http://www.apnewsarchive.com/2017/In_Wisconsin%2C_ID_law_proved_insurmountable_for_many_voters/id-624a00e48a444f2c8fbd2faa07d44ad5)

[3] Rapoport, M., 8/7/17, “Voter suppression in the mirror and looking forward,” The American Prospect (http://prospect.org/article/voter-suppression-mirror-and-looking-forward)

[4] These 2 counties account for almost 1.5 million of Wisconsin’s 5.8 million residents.

[5] Mayer, K.R., 9/25/17, “Voter ID study shows turnout effects in 2016 presidential election,” University of Wisconsin at Madison (https://elections.wisc.edu/news/voter-id-study/Voter-ID-Study-Release.pdf)

[6] Rapoport, M., 8/7/17, see above

[7] Brennan Center for Justice, retrieved 10/13/17, “New voting restrictions in America,” New York University of Law (https://www.brennancenter.org/new-voting-restrictions-america)

[8] Bump, P., 10/9/14, “Voter ID laws in Kansas and Tennessee dropped voter turnout by over 100,000 votes,” The Washington Post (https://www.washingtonpost.com/news/the-fix/wp/2014/10/09/gao-voter-id-laws-in-kansas-and-tennessee-dropped-2012-turnout-by-over-100000-votes/?utm_term=.6f7fb4686bcf)

[9] Coons, C., & Austin-Hillery, N., 6/30/17, “The threat to American elections you don’t know about but should,” Time (http://time.com/4837622/voter-suppression-democracy-senator-chris-coons/)

[10] Cassidy & Moreno, 5/9/17, see above

DEREGULATION AND THE ELECTION OF TRUMP

Thirty years of deregulation have produced a declining standard of living and reduced economic security for the working and middle class. This is causing them significant stress and anxiety. In particular, there is strong evidence of the toll this is taking on the members of the white working and middle class. After decades of increasing life expectancy among all Americans, the life expectancy of middle-aged (35 – 59 years old), non-Hispanic whites without a college education is now actually declining largely due to premature deaths from drug and alcohol abuse and from suicides. [1] These “deaths of despair” as they are being called, are linked to the stress of falling behind one’s own life expectations as well as relative to others. [2] [3] [4]

The loss of economic well-being for the working and middle class generally has produced real anger against the political establishment that has allowed and abetted it. Numerous books have been written on the alienation of this demographic group. [5] It’s no wonder many of them voted for Trump and against the Washington, D.C., establishment in 2016. Many of them felt they had no better way to express their anger or to demand change in our policies than to vote for Trump. The fact that Trump (despite some of his rhetoric) is the embodiment of everything that has driven workers to this brink of despair is the great irony of the election. It is also an indication of the incredibly deep frustration, anxiety, and despair felt by many in the middle and working class.

Both in the U.S. and internationally, democracy – the power of the people to drive policy making including regulation – has only been successful when corporate power is under control. Regulation of big corporations has historically been necessary for workers to have the economic security that allows them to realistically engage in life, liberty, and the pursuit of happiness. In a capitalistic society, a basic level of economic security is essential if individuals are to have the freedom to make important choices in their day-to-day lives (such as where to live and what education to obtain for themselves and their children). [6]

For a capitalistic democracy to work, market place rules and regulations are essential to maintain fair and competitive markets for consumers and workers. They are also necessary to keep large corporations from wielding controlling influence over government and undermining democracy. When President Teddy Roosevelt used anti-trust laws to break up giant corporations in the early 1900s, the focus was “less on the power of giant corporations to dominate markets and more on the power of giant corporations to dominate government.” [7]

The political establishment in Washington, D.C., appears either to have forgotten this lesson of the early 20^th century or to have allowed themselves to be bought by the corporate elites. As a result, the anxiety, anger, and frustration of the working and middle class has grown to historic proportions. In the election of 2016, they voted for Trump for President to clearly repudiate the Washington establishment. The Tea Party wing of the Republican Party and the Bernie Sanders wing of the Democratic Party both reflect this same rebellion against the political establishment, albeit from opposite ends of the political spectrum.

How this anxiety, anger, and frustration gets expressed in the future is very much up for grabs. We’re likely to be in for a rocky ride politically as individual candidates and the political parties battle to channel this energy and emotion in elections and policy making.

If we want to have a democracy instead of a corporatocracy and to revitalize our working and middle class, we must restrain corporate power, both in the private market place and in the public sphere of government. Strong regulations that control corporate power; protect the well-being of workers, consumers, and the public; and ensure that political power rests with the people are essential. As Supreme Court Justice Louis Brandeis warned in the 1930s, “We can have democracy in this country, or we can have great wealth concentrated in the hands of a few, but we can’t have both.” [8] Clearly, Justice Brandeis understood that great wealth also means great political power, which, when concentrated in the hands of a few, is antithetical to democracy.

[1] Boddy, J., 3/23/17, “The forces driving middle-aged white people’s ‘deaths of despair,” National Public Radio (http://www.npr.org/sections/health-shots/2017/03/23/521083335/the-forces-driving-middle-aged-white-peoples-deaths-of-despair)

[2] Payne, K., 7/5/17, “Economic inequality goes well beyond the bank account,” The Boston Globe

[3] Burke, A., 3/23/17, “Working class white Americans are now dying in middle age at faster rates than minority groups,” Brookings (https://www.brookings.edu/blog/brookings-now/2017/03/23/working-class-white-americans-are-now-dying-in-middle-age-at-faster-rates-than-minority-groups/)

[4] Case, A., & Deaton, A., 5/1/17, “Mortality and morbidity in the 21^st century,” Brookings (https://www.brookings.edu/wp-content/uploads/2017/03/casedeaton_sp17_finaldraft.pdf)

[5] Kuttner, R., 10/3/16, “Hidden injuries of class, race, and culture,” The American Prospect (http://prospect.org/article/hidden-injuries-0) This is an insightful review of nine books on the “decline of the white working class and the rise of the Tea Party and Donald Trump.”

[6] Kuttner, R., 4/7/17, “Corporate America and Donald Trump,” The American Prospect (http://prospect.org/article/corporate-america-and-donald-trump)

[7] Warren, E., 2017, “This fight is our fight: The battle to save America’s middle class,” Metropolitan Books, NY, NY. p. 159

[8] Warren, E., 2017, see above, p. 159

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)

IS TRUMP A POPULIST, A FASCIST, BOTH, NEITHER?

Some in the media and many political pundits have referred to President Trump as a populist or a fascist or both. These terms are not opposites, but they aren’t comfortable bedfellows. I cringe every time I see Trump referred to as a populist because my vision of populism is the inclusive, broad-based populism of Senators Bernie Sanders and Elizabeth Warren.

A populist is someone who supports the concerns of ordinary, working people, as opposed to the elite, upper class. Populist activism is based on the belief that the common people are being exploited by the privileged elite. The underlying ideology of populists can be left, right, or center. Populist activism becomes likely when mainstream political institutions fail to deliver economic and social well-being for ordinary people. [1] The direction that populist activism takes depends heavily on the style of the politician who taps into it.

Populism has a long history in the US. There was a Populist Party in the 1890s and William Jennings Bryan ran as the Democratic presidential candidate on a populist platform in 1896, 1900, and 1908. President Theodore Roosevelt and the Republican Party took over the populist banner in the early 1900s. George Wallace’s campaigns of the 1960s and 1970s had populist themes that some labeled reactionary populism due to their racist underpinnings. Ralph Nader in the 1990s and 2000s ran for president using populist themes.

Trump’s campaign and presidency have a populist element in their appeals to the working class. However, their focus on the white working class evokes memories of the reactionary populism of George Wallace. Trump argues that the working class is being hurt by the actions of political elites in Washington, D.C. He also appeals to the working class by asserting that their well-being is being undermined by immigrants. There is a racist element to Trump’s appeals, as he lays the blame for the struggles of the white working class on (largely Latino) immigrants and Blacks. Historically, this type of reactionary populism has been fertile ground for the development of fascism.

Some view Trump’s populism as faux-populism and demagoguery because his appeals to the working class are based only on rhetoric and unrealistic policy proposals. Trump exhibits attributes of a demagogue, such as exploiting the prejudices and gullibility of some voters, and stirring up anger and resentment while eschewing reasoned debate. Historically, demagogues often overturn established customs of political conduct, assert the presence of a national crisis, and accuse moderate and thoughtful opponents of weakness or disloyalty to their country. A demagogic populist typically claims legitimacy directly from the people and asserts that he alone will do what the people want. He refuses to acknowledge the legitimacy of opposition and attacks institutions, from the courts to the news media, that don’t support him. Trump has exhibited many of these attributes. [2]

Personally, when I think of populism, I think of inclusive populism that is committed to including stigmatized groups (e.g., the poor, minorities, immigrants, and women). They are embraced and supported rather than being targeted for blame and as scapegoats. This is the type of populism that Senator Bernie Sanders promoted during the presidential primaries and for which Senator Elizabeth Warren has been advocating. [3]

Fascism, on the other hand, is an authoritarian and nationalistic approach to governing where the government controls or partners with business and/or labor. Typically, opposition is not tolerated and the government is led by a strong leader who asserts that strong central control is needed to effectively combat economic difficulties and external threats. A principal goal is self-sufficiency and independence through protectionist economic policies. [4]

Trump’s rhetoric echoes many of the themes of fascism. Perhaps most prominently, he promotes ethnic stereotypes and fear of foreigners, which is typical fascist rhetoric. Asserting concern about national decline is another common element of fascist discourse. Trump’s slogan “Make America great again” fits this theme exactly. Even though the US, by most measures, isn’t in serious decline, he’s able to persuade the white working class that the country is in decline, or at least their position in it is. Poorly-educated white males have experienced economic decline over the last 35 years. The Great Recession of 2008 and the weak recovery from it have left many working people economically worse off. [5]

Fascists tend to use threats of violence to intimidate opponents and silence critics. They are skilled at getting their followers to believe them even when the narrative they present is at odds with facts; truth becomes subjective. [6] These are also themes that have been apparent in the Trump campaign and presidency.

Trump’s selections for his Cabinet appear to contradict the populism of his campaign rhetoric. They do, however, fit with fascism’s alignment of business and government. Many of his nominees are from the corporate elite who have played a major role in diverting federal policy from supporting the working class to supporting large corporations. They seem positioned to strengthen the role of the private sector in policy making and undermine the role of the federal government in supporting working people. For example, they have opposed labor unions, workplace regulation, and workers’ rights; they have worked to privatize public education; they have weakened voting and civil rights; they have opposed environmental regulation and action on global warming; and they have supported weakening the social safety net. [7] [8]

There were and are elements of xenophobic, reactionary populism in Trump’s rhetoric and in some of his (to-date largely symbolic) actions. His style, cabinet nominees, and some of his actions exhibit themes of fascism. Although it’s too early to conclusively decide whether he is more of a populist or a fascist, President Trump has never expressed support for the inclusive populism of Senators Sanders and Warren. On the other hand, he has consistently displayed, and his background seems much more aligned with, some of the core themes of fascism.

[1] Wikipedia, retrieved 2/18/17, “Populism” (https://en.wikipedia.org/wiki/Populism)

[2] Wilkinson, F., 2/16/17, “Why Donald Trump really is a populist,” BloombergView https://www.bloomberg.com/view/articles/2017-02-16/why-donald-trump-really-is-a-populist

[3] The Economist, retrieved 2/18/17, “The Economist explains populism,” http://www.economist.com/blogs/economist-explains/2016/12/economist-explains-18

[4] Wikipedia, retrieved 2/18/17, “Fascism” (https://en.wikipedia.org/wiki/Fascism)

[5] Chotiner, I., Feb. 2016, “Is Donald Trump a fascist?” Slate (http://www.slate.com/articles/news_and_politics/interrogation/2016/02/is_donald_trump_a_fascist_an_expert_on_fascism_weighs_in.html)

[6] Kuttner, R., 12/16/16, “The audacity of hope,” The American Prospect (http://prospect.org/article/audacity-hope)

[7] Vanden Heuvel, K., 12/20/16, “Sham populism, shameless plutocracy,” The Washington Post

[8] Bonham, L., & Jennings, G., 2/17/17, “Is Trump’s billionaire cabinet actually a closet full of fascists?” Common Dreams (http://www.commondreams.org/views/2017/02/17/trumps-billionaire-cabinet-actually-closet-full-fascists)

THE WRONG WAY TO STOP THE OFFSHORING OF US JOBS

President-elect Trump received a lot of good publicity for his claim that he saved 1,100 jobs at a United Technologies / Carrier (UT/C) plant in Indiana. Although the focus of his claim and effort – to keep good, middle income jobs in the US – is laudable, the facts of this case and the implications for the larger, systemic policy issue are not very favorable.

In fact, only about 730 jobs that were slated to move to Mexico were kept in the US. The other 350 research and development jobs at the facility were never slated to move to Mexico. Meanwhile, another UT/C plant in Indiana will close and roughly 700 jobs will be lost. [1]

UT/C responded to the President-elects’ strong-arming because it has $56 billion in federal contracts it didn’t want to jeopardize and it received $7 million in taxpayer-funded subsidies from the state of Indiana, where Trump’s vice president, Mike Pence, is Governor. [2]

We do need to change the mindset and incentives that make it not only acceptable but a preferred and successful business strategy to ship American jobs overseas. We need to do this through systemic changes in policies. However, what Trump is doing isn’t policy-making and it doesn’t change the underlying market incentives. Furthermore, it’s a drop in the bucket in terms of jobs. [3]

Many economists have been very critical of Trump’s actions because they undermine the rules, predictability, and consistency on which companies and our economy rely. These economists, including former Treasury Secretary Lawrence Summers, argue that the resultant uncertainty could lead to reduced investment, fewer jobs, and slower economic growth. [4]

Trump’s ad hoc, company-by-company approach reflects the arbitrary and capricious use of the personal power of the President’s bully pulpit. While it can affect individual company’s actions – through effects on stock prices, public opinion, federal government contracts, etc. – it is driven by random, autocratic whims. The result is a bullying style of ad hoc capitalism that reflects a personal agenda and a person who wants corporate America to be beholden and deferential to him. [5]

The likely result is that corporations and their senior executives will work to curry favor with Trump by contributing to his re-election campaign and taking other actions that will please him. This is pay-to-play crony capitalism and plutocracy; it is not how a democracy is supposed to work.

My next post will present some systemic, policy-based approaches that we should be taking to counter incentives for offshoring American jobs.

[1] Nichols, J., 12/8/16, “Chuck Jones is a better president than Donald Trump will ever be,” Common Dreams (http://www.commondreams.org/views/2016/12/08/chuck-jones-better-president-donald-trump-will-ever-be)

[2] 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)

[3] Reich, R., 12/7/16, “The Art of the Autocrat,” Common Dreams (http://www.commondreams.org/views/2016/12/07/art-autocrat)

[4] Greenhouse, S., 12/8/16, see above

[5] Reich, R., 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. 9^th 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/)

CAMPAIGN DONOR SECRECY IS ESCALATING

The disclosure of who is giving money to candidates for public office has long been a basic tenet of our elections. Even with the rise of outside spending, (supposedly) independent of candidates’ campaigns, disclosure of donors was assumed. In the Supreme Court’s 2010 Citizens United decision (which ruled that wealthy individuals, corporations, and other organizations could engage in unlimited outside spending), the five justices who supported the ruling believed that the independence of the spending and the disclosure of the donors would prevent corruption of candidates who benefitted from the unlimited campaign spending.

However, wealthy individual and corporate campaign donors are typically anxious to hide their identities. This protects them from negative repercussions from, for example, sponsoring TV ads that are typically negative and sometimes outright nasty or untruthful.

As a result, “dark” money spending in campaigns, where the true donors are hidden, is growing dramatically. Dark money in the 2016 elections is up 34% over this point in the 2014 Congressional elections and is 5 times what it was at this point in the last presidential election in 2012. [1] Donor secrecy means there is no accountability, typically for negative or questionably truthful TV ads. It also prevents voters from knowing who is behind the political ads and messages that are trying to influence their votes. This means voters can’t assess the interests and biases of the sponsors of the ads, or even tell if there are conflicts of interest or a potential for corruption.

Large donors have found multiple ways to keep their identities secret. The two main strategies are engaging in political activity through non-profit organizations that don’t have to disclose their donors and laundering money through multiple entities to make it hard (if not impossible) to trace the actual donor. These strategies come on top of the fact that enforcement of existing disclosure laws has been weak at best. The Federal Election Commission (FEC), the primary enforcer of election laws, is hamstrung by the intense partisanship in Washington.

As required by Internal Revenue Service (IRS) regulations, the non-profit organizations that are being used for political activity maintain that political activity is not their primary purpose. However, for many of them, this fiction can only be maintained because the IRS’s regulations and enforcement are weak. The IRS’s efforts in this area have been undermined by political attacks, including claims that its efforts to control the illegal political use of non-profit groups reflect partisan bias.

The other major strategy for hiding the identities of donors is money laundering. This is accomplished by passing money for political spending through a series of groups, typically non-profits and super PACs. When the final entity that actually engages in political activity (e.g., pays for the TV ads) reports its donors, they are super PACs and non-profits not the actual original donors.

Some of the campaign money laundering is done through “ghost” organizations. These are typically corporations that are established solely for the purpose of channeling money to super PACs. Many of these ghost corporations make large donations, e.g., hundreds of thousands or millions of dollars, only days after they are created. Little information is available about them and sometimes they are disbanded shortly after making their donations. Hence, tracing the donors of this money is extremely difficult if not impossible. [2]

Many election law experts consider the use of ghost organizations a violation of the long-standing federal ban on straw donors, i.e., one person giving money to another person or entity to use to make a political contribution. However, with the regulatory agencies, particularly the FEC, politically deadlocked, enforcement and even investigation of such activity is lacking.

The explosion of campaign spending where donors are secret is particularly insidious and damaging to democracy. Voters are not be able to consider the credibility and motives of the funders behind these efforts to sway their votes. Moreover, the megaphone that unlimited outside money provides to wealthy corporations and individuals can drown out other voices that provide important information to voters.

Unlimited election spending by a tiny slice of our society, coupled with secrecy about who is paying for the messages being disseminated, means that voters will receive skewed information and will be unable to evaluate its credibility. Furthermore, they may be discouraged from voting because the bulk of these messages tend to be negative messages that attack the quality of candidates and the effectiveness of our government.

To support well informed voting, full disclosure of all donors to campaign spending is essential. Furthermore, unlimited spending by wealthy interests in our elections undermines the basic principle of democracy – that government is of, by, and for all the people.

My next post will provide more information on how wealthy campaign donors are maintaining their secrecy and what you can do about it.

[1] OpenSecrets.org, retrieved 10/22/16, “Top election spenders: Who are the biggest dark money spenders?” Center for Responsive Politics (https://www.opensecrets.org/dark-money/top-election-spenders)

[2] Gold, M. & Narayanswamy, A., 3/18/16, “How ‘ghost corporations’ are funding the 2016 election,” The Washington Post

HOW OUR ELECTIONS ARE RIGGED

Donald Trump has been claiming that our elections are rigged. He’s right. They are rigged – but not in the manner he suggests. Our elections are rigged to benefit wealthy interests and Republicans in three ways:

Campaign finance laws allow unlimited and even secret spending by wealthy interests,
States have made voting more difficult for low-income citizens, minorities, students, and some elders, and
Republicans have gerrymandered Congressional Districts and state legislative districts to their benefit.

I’ve covered the first topic in a recent post (and other posts under the Campaigns category), so I’ll address the other two topics here.

Making voting more difficult: 20 states have put new laws making voting more difficult in place since 2010. The new laws range from photo ID requirements to reductions in early voting. These new laws are part of a broad effort to curtail voting by Democratic-leaning groups and individuals. [1] State lawmakers spanning almost all states have introduced hundreds of measures that would make it harder to vote. This is part of a strategic plan by conservatives and Republicans to shift election results. The effort has been spearheaded by the American Legislative Exchange Council (ALEC), a right-wing and corporate-funded organization that develops templates for state legislation, including ones on voter suppression. [2] In a democracy we should be encouraging voting, not suppressing it!

Laws requiring specific types of IDs to vote are a key tactic. The supposed rationale for the voter ID laws has been to prevent voter fraud. However, every credible source that has examined this has documented that voter fraud is non-existent. In addition, to requiring IDs to vote, some states have made it hard or expensive to get an acceptable ID. For example, Texas does not allow the use of a student ID (but a firearm ID card is acceptable). These laws can be quite effective in suppressing voting. Wisconsin’s voter ID law is estimated to have kept 300,000 citizens from voting. [3]

In addition to changes in law, there are numerous examples of other efforts to suppress voting. Some states have reduced the number of polling places in minority neighborhoods, resulting in long waiting lines that prevent some people from voting. This was evident in Arizona’s September primary elections where the number of polling places in Latino neighborhoods was greatly reduced and created 5-hour waiting lines. North Carolina has reduced the number of hours and locations for early voting for the November 8^th election. [4]

Another tactic has been to purge names from lists of registered voters, thereby preventing people from voting when they show up at the polls. This tactic is used in ways that target Democratic voters, as it was in Florida before the Bush vs. Gore election in 2000. So, it’s not a new technique, but it continues to be used today. Most recently, it has surfaced in multiple counties in North Carolina. [5] In Ohio, the Secretary of State is being sued for having improperly purged 2 million voters from the voting lists.

Trump has repeatedly talked about having “poll monitors” in certain (minority) areas. His “Vote Protectors” effort reportedly plans to send volunteers to monitor polling places in nine cities with high minority populations. The group is creating official-looking ID badges for its volunteers to wear and they plan to videotape voters. Using volunteer “poll monitors” is an old tactic but election experts say it does intimidate voters and keeps them from voting. [6]

Gerrymandering: Republicans and corporate America engaged in a very concerted effort to gain control of state redistricting efforts that followed the 2010 Census. They created the Redistricting Majority Project (REDMAP) and raised $30 million to fund it. State legislatures typically redraw district lines based on new Census data every ten years. So, in 2010, REDMAP’s creators succeeded in taking control of legislatures in 20 states. They then used this control of the redistricting process to gerrymander state legislative districts and the 193 Congressional districts in those states (out of 435 nationwide) to favor Republicans. While gerrymandering of districts is not a new phenomenon, they took it to new levels of aggressiveness, aided by computer mapping technology not previously available. [7]

Their gerrymandering significantly skewed results for the US House of Representatives in 2012. For example, in Pennsylvania, Democratic House candidates statewide had 100,000 more votes than Republicans, but Republicans won 13 House seats to the Democrats’ 5. In Michigan, Democrats won 240,000 more votes overall, but only 5 House seats to 9 for Republicans. In Ohio, Republicans got 52% of the overall vote, but 12 of 16 House seats. And so forth. This was accomplished by designing districts that Republicans could win comfortably but with a relatively small margin, while leaving a few districts where Democrats would win overwhelmingly. In other words, they crammed as many Democrats as possible into as few districts as possible. The result was that, despite President Obama’s overwhelming 2012 Democratic national victory, Republicans had a 234 to 201 advantage in the House of Representatives – even though Democratic House candidates nationwide garnered 1.7 million more votes than Republicans.

To fix this, the redistricting process should be performed by a non-partisan redistricting commission so that election results fairly reflect voters’ overall preferences. Eight states have already done this: Arizona, California, Hawaii, Idaho, Iowa, Montana, New Jersey, and Washington. The others need to follow suit.

To stop targeted voter suppression efforts, key provisions of the Voting Rights Act (VRA) that were rendered unenforceable by a 5 to 4 Supreme Court vote in 2013 need to be reinstated. These would prevent states from enacting discriminatory voting laws and practices, which the VRA did quite effectively before the Supreme Court’s ruling.

[1] Brennan Center for Justice, retrieved 10/29/16, “New Voting Restrictions in Place for 2016 Presidential Election,” New York University School of Law (https://www.brennancenter.org/voting-restrictions-first-time-2016)

[2] Center for Media and Democracy, retrieved 10/29/16, “ALEC exposed,” (http://www.alecexposed.org/wiki/ALEC_Exposed)

[3] Fitrakis, R.J., & Wasserman, H., Fall 2016, “War on the dispossessed,” Justice Rising, Alliance for Democracy (http://www.thealliancefordemocracy.org/pdf/AfDJR6404.pdf)

[4] Pitney, N., 10/26/16, “This is what actual voter suppression looks like, and it’s appalling,” The Huffington Post (http://www.huffingtonpost.com/entry/voter-suppression-2016_us_581028c2e4b02b1d9e63bcd2)

[5] Berman, A., 10/27/16, “North Carolina Republicans tried to disenfranchise a 100-year-old African-American woman,” The Nation (https://www.thenation.com/article/north-carolina-republicans-tried-to-disenfranchise-a-100-year-old-african-american-woman/)

[6] Wilkie, C., 10/25/16, “Trump loyalists planned voter intimidation using fake id badges, fake exit polling — until Huffpost asked them about it,” The Huffington Post (http://www.huffingtonpost.com/entry/vote-protectors-voter-intimidation_us_580e4e63e4b0a03911ee03bc?section=us_politics)

[7] Tarbell, J., Fall 2016, “Gerrymandering: The civil war over public policy,” Justice Rising, Alliance for Democracy (http://www.thealliancefordemocracy.org/pdf/AfDJR6405.pdf)

UNLIMITED, UNACCOUNTABLE CAMPAIGN SPENDING EXPLODES

Traditionally, campaign spending has been done by a committee set up and overseen by a candidate running for election. A candidate’s campaign committee is governed by state or federal laws depending on the office for which the candidate is running. These committees are required to publicly report donors and the size of contributions is limited. Currently, at the federal level, contributions to candidates’ committees are capped at $2,700 per person per election.

This all began to change 25 years ago when groups and sometimes individuals other than a candidate’s campaign committee started spending money to influence the outcomes of elections. This spending is referred to as “outside spending” or “soft” money because it occurs outside of the candidate’s official campaign committee. It is supposed to be independent of the candidate’s committee and its efforts are not supposed to be coordinated with those of the candidate’s campaign. However, this independence is very questionable in many, if not most, cases. The regulations defining the standard for independence and the enforcement of them have been weak at best. The Federal Election Commission (FEC), the primary regulator of campaign spending, is hamstrung by the intense partisanship in Washington.

The lack of accountability for outside spending has been a major contributor to the growth of negative campaigning. Outside spending is typically used to attack an opponent rather than to support a candidate. The attacks can be nasty and stretch the truth or worse. Because outside spending is technically independent of the candidate, he or she can plausibly claim that it is out of his or her control. Therefore, no one can be effectively held accountable for the content of ads or other material.

Outside spending had been growing relatively modestly until the Supreme Court’s 2010 Citizens United decision that ruled that wealthy individuals, corporations, and other organizations could engage in unlimited outside spending. The five Supreme Court justices who supported this ruling felt that such spending was part of free speech. They believed that the independence of the spending and the disclosure of its sources would prevent the corruption of elected officials who benefited from it. However, there is now significant evidence of collaboration between outside spenders and candidates, as well as evidence of corruption. (See my previous posts on illegal coordination and the corrupting effects of unlimited spending.)

Outside spending has already hit $1 billion in the 2016 federal elections – up from $225 million at this point in the pre-Citizens United 2010 elections. There’s been $621 million in outside money spent on the presidential race, $426 million spent on Senate races, and $187 million spent on House races. [1]

Outside spending now exceeds the spending by candidates’ committees in many of the high profile, tightly contested Congressional races. [2] Outside spending is spreading to state-level elections, which I’ll discuss in a future post.

Super political action committees (super PACs) are the primary vehicle for outside spending. Super PACs have spent $847 million to-date in the 2016 federal elections and they will spend hundreds of millions more by Election Day. There are no limits on the size of contributions they can receive, but they are required to disclose their contributors.

In addition to super PACs, two types of non-profit organizations are used for outside spending because they are not required to disclose their donors. (I’ll discuss donor secrecy in my next post.) One type is business associations like the US Chamber of Commerce, the American Medical Association, and the Pharmaceutical Research and Manufacturers of America. These groups are referred to as 501(c)(6) organizations because that is the section of the IRS rules that governs them. They may engage in political activities, as long as these activities are not their primary purpose. However, the IRS has not defined “political activity” nor “primary” so some of these organizations easily skirt this limitation. [3]

So far in the 2016 elections, 6 of these business associations have reported $26 million in political spending to the Federal Election Commission (FEC), including almost $25 million spent by the US Chamber of Commerce. The FEC reporting does not represent all the political spending by these groups because only certain kinds of activity are required to be reported, most notably activity, usually ads, that explicitly encourages the election or defeat of a specific candidate.

The second type of non-profit organization that is widely used for political purposes is commonly referred to as a social welfare organization. Examples include the National Rifle Association (NRA), Planned Parenthood, and the Sierra Club. These groups are referred to as 501(c)(4) organizations because that is the section of the IRS rules that governs them. Their primary purpose is supposed to be promoting the social welfare of our society. However, as with business associations, they may engage in political activities, as long as these activities are not their primary purpose. Again, because of the lack of clear regulations, some of these organizations easily skirt this limitation.

So far in the 2016 elections, 95 of these groups have reported $93 million in political spending to the Federal Election Commission (FEC), including $25 million spent by the NRA, the biggest spender among them by far. As with business associations, the FEC reporting does not represent all the political spending by these groups because only certain kinds of activity are required to be reported.

In addition to the significant potential for corruption, outside money is problematic because the unlimited spending it allows gives a megaphone to wealthy corporations and individuals that can drown out other voices that provide important information for voters. For our democracy to function as the founders envisioned it, citizens must vote and be well-informed. Unlimited election spending by a tiny slice of our society means that voters will receive skewed information and may be discouraged from voting because they feel their voices and votes are meaningless.

As a result, a democracy built on the principle of one person, one vote, is fundamentally undermined. All voices should be heard in a relatively balanced manner during election campaigns. Given the constraints of the Supreme Court’s campaign finance decisions, the value and impact of small campaign contributions must be enhanced by matching them with public funds. Ultimately, the Supreme Court’s campaign finance decisions must be overturned and limits established on contributions and spending in our elections.

[1] OpenSecrets.org, retrieved 10/22/16, “2016 outside spending, by race,” Center for Responsive Politics (https://www.opensecrets.org/outsidespending/summ.php?disp=R)

[2] OpenSecrets.org, retrieved 10/22/16, “Races in which outside spending exceeds candidate spending,” Center for Responsive Politics (https://www.opensecrets.org/outsidespending/outvscand.php?cycle=2016)

[3] OpenSecrets.org, retrieved 10/22/16, “Dark money basics,” Center for Responsive Politics (https://www.opensecrets.org/dark-money/basics)

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)

SECRET MONEY IN STATE AND LOCAL ELECTIONS FACILITATES CORRUPTION

The growth of secret money in state and local elections means that voters know less and less about who is working to influence their votes and the outcomes of their elections. Secret money is money spent by organizations that do not have to report their funding sources. Therefore, it is referred to as “dark” money. Most of this money is spent by social welfare non-profits (i.e., 501(c)(4) organizations) and trade or industry associations (e.g., the Chamber of Commerce or the Pharmaceutical Research and Manufacturers of America association, 501(c)(6) organizations). Based on the Supreme Court’s Citizens United decision, these groups can spend unlimited amounts of money on advertising and other campaign activities as long as it is independent of a candidate’s campaign, although the independence of such spending is often very questionable.

As I noted in my previous post, big money may have more impact in state and local elections than in federal ones. For example, a race for school board or a state’s public utilities commission costs much less than a race for federal office and gets much less media coverage. State ballot questions are also frequent targets of dark money spending. In such low-cost, low-information elections, it can be relatively easy to sway voters, particularly in non-partisan elections where party affiliation does not serve as a guidepost for voters.

These elections can have significant financial consequences, often for a narrow but economically significant constituency. A utility commission, for example, makes decisions that can effect energy corporations’ profits and homeowners’ electricity rates. Dark money at the state and local levels frequently comes from corporations and other special interests that have a direct and immediate stake in the outcome of the election, whereas at the federal level the outside spending tends to be more ideologically or party focused.

For less than $100,000, a corporation or wealthy individual can have a significant impact on a state or local election. When there is a significant self-interest at stake, this is a modest business expense. On the other hand, for state or local candidates or community groups, such sums are dauntingly large.

By using dark money for its campaign spending, the corporation or wealthy individual can hide its identity so voters don’t know who is trying to influence their votes or about the self-interested nature of the spending. And a growing portion of the big money in state and local elections is dark money. The ability to significantly affect or even dominate an election with high stakes but without public transparency means significant conflicts of interest can be hidden and outright corruption is facilitated. [1]

The Brennan Center for Justice recently studied outside campaign spending (i.e., spending not by a candidate’s own campaign organization) in six diverse states with almost a fifth of the U.S. population (Alaska, Arizona, California, Colorado, Maine, and Massachusetts). [2] It examined dozens of state and local elections in these states. It found that the amount of dark money spent in 2014 was 38 times what was spent in 2006, a rate of increase greater than that for federal elections. It also found that in 2006 76% of the outside spending was fully transparent – that the true identities of the donors was known to voters as they voted. In 2014, only 29% of outside spending was fully transparent.

In Arizona’s 2014 election for two utility commissioners, $3.2 million was spent by dark money groups. This was more than double what all six candidates’ campaigns combined spent and was almost 50 times the amount of dark money spent in the 2012 election. After the election, it was learned that the source of the money was the state’s largest private utility, Arizona Public Service, which didn’t like the state’s requirement that it buy power from homeowners’ solar panels that the homeowners didn’t need. (This is called net metering.) After the candidates the dark money supported were elected, the Commission shifted its stance from actively encouraging homeowner-generated solar power to making it more costly for homeowners.

In Mountain View, CA, a group calling itself the Neighborhood Empowerment Coalition spent $83,000 in dark money in the 2014 city council election. This was more than half of the combined total of what all nine candidates’ campaigns spent. Land use and housing policy were prominent issues in the election in this community where property values and rents have soared. After the election, the voters learned that the coalition was funded by a PAC linked to the country’s largest property owners association and its goal was to prevent the establishment of rent control. The newly elected councilors did not enact rent control.

In the Utah attorney general’s race in 2012, after the election it was learned that an aide to the winner had arranged for payday lenders to fund $450,000 in dark money advertising in exchange for a promise to shield them from consumer protection laws. The attorney general resigned after less than a year in office due to this and other revelations.

Compounding the problem of dark money is the recent growth of “gray” money. This is money spent by organizations such as Political Action Committees (PACs) that are required to disclose their donors, but where the identities of the true donors are hidden. PACs can receive donations from other PACs or organizations and sometimes these organizations are set up to obscure identification of the original donor. Donations can pass through a succession of multiple organizations to obfuscate the true source. This is political money laundering. Furthermore, some of these donor organizations may be “dark” organizations that do not have to disclose their donors. Donations from dark organizations to PACs have grown from less than $200,000 in 2006 to $9.2 million in 2014 in the six states studied by the Brennan Center. Gray money grew from 15% of all outside spending in 2006 to 59% in 2014. [3]

The impact of big money and dark money in state and local elections is undermining democracy by allowing special interests to impact election outcomes and to do so secretly. The potential for outright corruption is clear.

In my next post, I will share some effective steps that can be taken now to address the problems of big money and dark money in state and local elections; ones that can be taken within the constraints of current Supreme Court decisions (e.g., Citizens United and McCutcheon).

[1] Lee, C., & Norden, L., 6/25/16, “The secret power behind local elections,” The New York Times

[3] Lee, C., Valde, K., Brickner, B.T., & Keith, D., 2016, see above

BIG MONEY, BIG IMPACT IN STATE AND LOCAL ELECTIONS

Big money may have a bigger effect on state and local elections than federal ones. Most of my past posts on campaign finance have focused on spending on races for federal offices (here, here, here, and here). However, state and local races are less expensive and get less media attention, so some big money can have a really big impact. I have written about this before (here). Here are a couple more examples of big money’s role at the state and local level.

Missouri is one of the few states with no limits on campaign contributions directly to candidates. There are four candidates in the Republican primary for Governor. Each of the four has received over $1 million from a single source. One campaign has received almost $5 million from the candidate’s own fortune. In two cases, an individual or family (other than the candidate) has given a million or more to the gubernatorial candidate while also giving millions more to other candidates or political action committees (PACs). [1]

This big money is drowning out the voices of the average voter. It creates conflicts of interest for the candidate who is elected as these large donors have interests that are affected by policy decisions. One of the Missouri million-dollar donors is a strong advocate for repealing all Missouri taxes. He would clearly disproportionately benefit from steps in that direction while the average Missouri resident would suffer the loss of the government’s ability to support infrastructure and programming. Another of the million-dollar donors is a strong opponent of unions. Policies that weaken unions would benefit him as a business owner while hurting workers.

In the Washington, D.C., mayor’s race, the amounts aren’t as dramatic, but campaign donors of $1,000 or more are providing the bulk of campaign money. These large donors are not representative of the electorate; they are disproportionately white and male, and, of course, rich. Overall, for the three candidates in the 2014 race, two-thirds of all the money raised came from donors giving $1,000 or more. Less than 2% came from donors giving $50 or less – an amount that might be affordable for the average voter. [2]

While only 37% of D.C.’s population is white, 62% of donors to the mayoral race were white. In terms of gender, 69% of those giving more than $1,000 were male, although 54% of D.C.’s adults are women.

After the election, the winner created a PAC that took advantage of a loophole in election laws that allowed unlimited donations in non-election years. This Mayor’s PAC took in many $10,000 contributions, many from those with interests in policy and contracting decisions made by the city. An investigation into the PAC found that 11 of its largest donors received $70 million in city contracts.

Big campaign contributions by wealthy donors result in decisions and policies that disproportionately favor the white, male, wealthy, donor class. For example, Washington, D.C., has enacted a series of tax cuts, including a cut in the estate tax, that will largely benefit the wealthy, despite the city’s high poverty rate (18%) and high income inequality. The city also recently announced it will spend $55 million to build a new practice facility for the Washington Wizards basketball team. The wealthy team owner will contribute only $5 million to construction costs and an additional $10 million for community benefits. The city also gave $60 million in tax breaks to a consulting company to keep it from moving to Virginia. The company promised to hire 1,000 D.C. residents, but these jobs likely would have gone to D.C. residents in any case.

Big money is invading state and local elections as well as federal elections. It can have greater effects on the elections at the state and local levels due to smaller campaign spending and less media coverage. And its effects on government decisions and policies can be more immediate and easier to identify.

Subsequent posts will look at the invasion of secret money (where the true donor is obscured) into state and local campaigns. They will also present ways to address the problems of big and secret money in our elections within the constraints of current Supreme Court decisions (e.g., Citizens United and McCutcheon).

[1] Miller, J., 7/20/16, “This is what happens when a state has no contribution limits,” The American Prospect (http://prospect.org/blog/checks/what-happens-when-state-has-no-contribution-limits)

[2] 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)

CRIMINAL JUSTICE REFORM FOR WHOM??

Efforts to reform our criminal justice system were hijacked in Congress at the last minute by an effort to weaken the ability to prosecute corporate and white collar crime.

Our criminal justice system is in need of reform. Incarceration in the U.S. has grown dramatically while the crime rate has fallen. There are over 2.2 million people incarcerated in federal, state, and local prisons today compared with 1 million in the late 1980s and half a million in the 1970s. Our incarceration rate of over 700 people per 100,000 of population is the highest in the world. With 4.4% of the world’s population, we have over 22% of the world’s prisoners. There is also great variation among the states with Louisiana having an incarceration rate (over 1,400 people per 100,000) over three times that of Minnesota and Maine (less than 400 people per 100,000). [1]

The cost of incarceration at the federal, state, and local levels has been growing along with the prison population and is currently roughly $80 billion a year. This rapidly growing cost is unsustainable for many states and is squeezing public spending in other areas.

However, since 1990, the overall crime rate in the U.S. has fallen by 45% (i.e., from roughly 5,900 per 100,000 residents to about 3,250). It is at its lowest rate since the late 1960s after peaking in 1980. [2]

Another key problem with our criminal justice system is its racial bias. In terms of incarceration, 60% of those in prison are racial or ethnic minorities. The incarceration rate for Black adult men (4.7% of their population) is almost seven times that of White men (0.7%) and over 2.5 times that of Hispanic men (1.8%). Over their lifetimes, 1 out of every 3 Black men will spend time in prison, while only 1 in 20 White men will and 1 in 6 Hispanic men.

These were the problems that were ostensibly the focus of a broad, bipartisan coalition that formed in early 2015, although priorities undoubtedly varied. Fiscal conservatives wanted to reduce costs, increase efficiency, and reduce government spending. Human rights and liberal groups wanted to reduce racial inequities, including in sentencing for non-violent drug crimes. Libertarian groups wanted to reduce the prison population in order to reduce the size of government and its control over people’s lives.

The initial targets for reform were elimination of mandatory minimum sentences for non-violent drug offenses and giving judges more discretion in sentencing. The coalition worked closely with members of the U.S. Senate in drafting a bill and had the strong support of the President. [3]

After months of work by the bipartisan coalition and on the eve of a vote on the bill in the Senate Judiciary Committee, Senator Hatch demanded that provisions weakening the ability to prosecute white collar crime be added to the bill. This, apparently, was the hidden agenda of the business conservatives, led by the Koch brothers, who had participated in the coalition. The Senate refused to add these provisions and proceeded to pass the bill.

The bill then went to the House where Judiciary Committee Chairman Goodlatte threatened to kill the bill unless provisions weakening the prosecution of white collar crime were added. As a compromise to move the sentencing reform ahead, these provisions were added along with some other criminal justice reforms, such as easing re-entry into society after completion of a prison sentence. It is unclear when and if this compromise bill will move forward.

The Department of Justice and the White House are strongly opposed to the provisions weakening the prosecution of white collar crime. They maintain their opposition despite four meetings with a senior White House official by Koch Industries’ (the Koch brothers company) Senior Vice President during the time the compromise was being negotiated in the House. This is the kind of access and power the economic elites in our society have to our elected officials.

Basically, the white collar crime provisions would eliminate the longstanding legal principle that ignorance is no defense for breaking the law. They would require prosecutors to prove that defendants knew they were committing a crime, not just that a crime was committed. Moreover, they would institute a much higher standard of proof for what constitutes knowledge of guilt than has been used by judges for decades. [4]

Over-prosecution of white collar crime is not a problem unless you are a corporate executive who pushes the limits of the law. On the contrary, the American public strongly believes that white collar criminal prosecution is too lax. The fact that there were no significant prosecutions after the 2008 Wall Street debacle is exhibit one.

Federal prosecutions of white collar crime are down to 2% of federal criminal cases from 7% in 1980. The proposed provisions would not only reduce prosecutions further, it would give white collar criminal defendants a vehicle for engaging in extensive litigation (e.g., about who knew what when) and likely allow many of them to escape liability for serious crimes. Plausible deniability would clearly become a get out of jail free card, if it isn’t already.

Senator Warren released a report in early 2016 that documents 20 examples of cases where white collar crime prosecution was inexcusably weak. They range from ignition switch problems in GM cars to foreign currency market manipulation by a group of the largest financial corporations. She notes that the differential prosecution of street crime versus white collar crime “has a corrosive effect on the fabric of democracy.” (page 1) In some of her examples it appears that large corporations and their executives have decided that lax enforcement and weak punishment make the penalties for breaking the law an acceptable cost of doing business. Senator Warren promises to provide annual updates on responses to white collar crimes. [5]

The gaping chasm between get tough on crime incarceration for street crime and the lax punishment of white collar crime is an important factor in the cynicism and anger of the American public. The undermining of a bipartisan, thoughtful effort to reform over-incarceration and its racial bias by economic elites trying to weaken prosecution of white collar criminality is symbolic of their power to bend public policy to their benefit. This underscores how difficult the task of reclaiming our democracy will be and the vigilance it will require.

[1] Wikipedia, retrieved 7/21/16, “United States incarceration rate” (https://en.wikipedia.org/wiki/United_States_incarceration_rate)

[2] Wikipedia, retrieved 7/21/16, “Crime in the United States” (https://en.wikipedia.org/wiki/Crime_in_the_United_States)

[3] Steinzor, R., 5/11/16, “Dangerous bedfellows: The stalemate on criminal justice reform,” The American Prospect (http://prospect.org/article/dangerous-bedfellows)

[4] Steinzor, R., 5/11/16, see above

[5] Staff of Sen. Elizabeth Warren, Jan. 2016, “Rigged justice: How weak enforcement lets corporate offenders off easy” (http://www.warren.senate.gov/files/documents/Rigged_Justice_2016.pdf)

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)

CRONY CAPITALISM = MONOPOLY POWER

The vote in Great Britain to exit from the European Union and the support that Bernie Sanders and Donald Trump received in the U.S. presidential primaries all reflect a strong belief among voters that corporations and the economic elites have rigged our economies and governments to work in their favor. Workers and average citizens struggle to make ends meet while the rich get much richer. Corporate welfare is maintained while the safety net for individuals is shredded. “Trade” treaties expand corporate power while workers see their jobs shipped overseas.

These are examples of how our economy and government regulation of it are rigged in favor of large corporations and wealthy individuals. Close relationships between corporate executives and government officials (both elected and appointed) result in policies that favor large corporations and wealthy individuals. This is “crony capitalism.” There is self-dealing and collusion between the private sector and the public sector that sometimes rises to the level of outright conspiracy and corruption.

In 1964, just 29% of U.S. voters thought government was “run by a few big interests looking out for themselves,” according to the American National Election Studies survey. Today, almost 80% of Americans think so.

A study published in the fall of 2014 by Princeton professor Martin Gilens and Northwestern professor Benjamin Page confirms the reality of this sentiment. They examined 1,799 public policy issues to determine the relative influence on them of economic elites, business groups, and average citizens. They found that the influence of the economic elites and business groups almost entirely overwhelmed that of average American citizens.

Their conclusion was that “The preferences of average Americans appear to have only a minuscule, … non-significant impact upon public policy.” On the other hand, wealthy individuals and big business strongly influence policy. [1]

There are many, many examples of how large corporations and the wealthy influence public policies to their advantage. One is that they have gotten our government officials to essentially stop enforcing anti-monopoly (aka anti-trust) laws. As a result, corporations have gotten bigger and bigger and have much more power, both market power (including over prices) and political power (including over regulations, tax laws, and trade).

Therefore, our democracy looks more and more like a plutocracy, oligarchy, or corporatocracy as the political power and influence of the economic elites grows. Our founders’ vision for our democratic republic was quite different. They wanted economic as well as political power dispersed as widely as possible. Jefferson and Madison, in particular, greatly distrusted concentrated power, both private and public. Furthermore, they envisioned a government that structured markets to promote the common good, not private interests.

The fight against companies exercising monopoly power has a long history in America. The Boston Tea Party was a rebellion against the effective monopoly on tea granted to the British East India Company by the British King. The Populist Movement of the late 1800s and early 1900s revived this anti-monopoly sentiment. It fought against the efforts of large corporations to monopolize commerce and natural resources through the power of concentrated wealth (i.e., capital). President Teddy Roosevelt and later President Woodrow Wilson (guided by future Supreme Court Justice Louis Brandeis) implemented strong anti-trust, anti-monopoly laws. Preventing the development of monopolies was, for them, less about achieving economic efficiency and low prices for consumers than it was about protecting political equality and democratic governance. [2]

The goals of anti-trust laws and their enforcement were both to limit corporations’ political power and to ensure that they were small enough that the competition of the market place would provide effective control of corporate behavior. Thus, the need for government intervention in the economy, which can be complicated and have unintended consequences, could be avoided.

Strong enforcement of anti-trust laws continued into the 1960s. In 1962, for example, the merger of two shoe companies was blocked by anti-trust laws because it would have given a single company 2% of the national market. This is in stark contrast to today’s economy where a few large corporations control many national markets and where effective monopolies exist in some local markets.

By the late 1970s, policy makers from both parties supported greatly relaxed enforcement of anti-trust laws under a revised set of economic goals based on a theory of efficiency through deregulation, free markets, and economies of scale. This has allowed unprecedented corporate growth and with it the growth of corporate power in our markets and political system.

In my next post, I’ll share some examples of how monopolistic corporate power affects some of the goods and services we all use, such as Internet service, banking, air travel, food, and health insurance.

[1] Reich, R., 6/19/16, “A Big Idea for Hillary,” (http://robertreich.org/post/146169929945)

[2] Lynn, B.C., & Longman, P., Summer 2016, “Populism with a brain,” Washington Monthly (http://washingtonmonthly.com/magazine/junejulyaug-2016/populism-with-a-brain/)

$200,000+ CHECKS ARE BEING GIVEN DIRECTLY TO CANDIDATES

In 2014, the Supreme Court, in a decision known as McCutcheon, ruled that it is unconstitutional to limit how much an individual can give in aggregate to all candidates’ campaigns and political parties during an election cycle. This ruling affects contributions that go directly to candidates, whereas the better known Citizens United decision allows unlimited campaign spending that is (supposedly) independent of any candidate’s or party’s campaign. Shortly after the Supreme Court ruling, Congress exacerbated the situation by slipping a provision into a must-pass budget bill that raised substantially the amount a contributor can give to a party committee and allowed them to give that amount to each of multiple party committees.

Contributors are still limited by laws capping the amount one can give to any individual candidate ($5,400 for federal candidates), but the aggregate limit, which was $123,200 per two-year election cycle, was ruled a violation of free speech. Furthermore, candidates and the parties have developed strategies that allow joint fundraising where contributors can write one check that will be split among multiple candidates and/or a variety of national and state party committees.

As a result contributors are now giving checks of well over $200,000 directly to candidates. Republican Representative Paul Ryan, the Speaker of the US House, has received at least 22 checks of $244,200 each. Democratic presidential candidate Hillary Clinton has received at least eight checks of $353,400 each. For the Hillary Victory Fund, the maximum donation is actually $356,100, based on maximum donations of $2,700 to Hillary for America for the primary election, $33,400 to the Democratic National Committee, and $10,000 to the federal accounts of each of 32 state Democratic parties. [1]

These are only the most dramatic examples of the dozens of checks over the previous limit that Ryan, Clinton, and other politicians are receiving. Several husband and wife pairs have given close to half a million dollars per couple. And some wealthy contributors have given super-sized checks to more than one of these joint fundraising efforts. [2]

While the bulk of the money from these huge checks goes to party committees, these party committees often make large donations to the candidate who sponsored the fundraiser. Basically, this is money laundering that circumvents the limit on what a contributor can give to any individual candidate.

The McCutcheon ruling is one of a series of Supreme Court decisions, almost all by 5 to 4 votes, that have undermined campaign finance laws and allowed huge sums of money to flow to candidates’ own campaigns, to party committees, and to supposedly independent expenditures meant to influence voters. These Supreme Court decisions appear to ignore the realities of campaign financing and the potential of large campaign contributions and expenditures to influence elected officials. They also appear to ignore the potential for outright corruption and bribery.

Although most of the media’s attention is focused on the fundraising of the presidential campaigns, big contributors tend to have even greater influence on congressional candidates and their campaigns. Furthermore, their influence on state level campaigns can be even more dramatic.

The bottom line is that these Supreme Court decisions, somewhat exacerbated by increases in contribution limits initiated by Congress, have increased the ability of a very small number of the very richest Americans to provide ever increasing amounts and portions of campaign funding. This shifts our political system away from democracy and toward a plutocracy, where the rich elites effectively rule our country.

[1] Vogel, K.P., & Arnsdorf, I., 5/2/16, “Clinton fundraising leaves little for state parties,” Politico (http://www.politico.com/story/2016/04/clinton-fundraising-leaves-little-for-state-parties-222670)

[2] Vandewalker, I., 4/25/16, “Two years later, McCutcheon fuels huge checks to politicians,” Moyers & Company (http://billmoyers.com/story/two-years-later-mccutcheon-fuels-huge-checks-to-politicians/)

PRESIDENTIAL CANDIDATE SANDERS ON DEMOCRATIC SOCIALISM

Democratic presidential candidate Bernie Sanders recently gave a speech focused on defining what he means by democratic socialism and why he has identified as a socialist for his entire political career. Our mainstream corporate media can’t seem to cover him or his campaign without labeling him a socialist. The intent seems to be to identify him as outside the mainstream at best or as a dangerous radical. Often the implicit or explicit message is that a socialist is one step away from being a communist – and many Americans do not know what socialism or communism means or the difference between them.

To address this pejorative use of the term socialist, Sanders began by noting that many of the programs and policies that President Franklin Delano Roosevelt (FDR) instituted in the 1930s in response to the Great Depression were called socialist: Social Security for seniors, the minimum wage, unemployment insurance, the 40 hour work week, an end to child labor, collective bargaining for workers, job programs to reduce unemployment, and banking regulations. They were enacted despite the strong opposition of the economic elites and have become part of the fabric of our society and the foundation of the American middle class.

Similarly, when President Johnson provided health insurance through Medicare for seniors and Medicaid for poor children and families, these programs were called socialist and a threat to the American way of life.

Sanders stated that we need to transform our democracy and our country as FDR did in the 1930s. We are facing a political and economic crisis that requires dramatic change. He noted that the US is the wealthiest nation in the history of the world and yet we have high rates of poverty that include over one-quarter of our children. He called for a political movement to take on the ruling, economic elite class, whose greed is destroying our democracy and our economy.

Sanders cited FDR’s inaugural address in 1944 as one of the most important speeches in our nation’s history. In it, FDR proposed an economic bill of rights, noting that true individual freedom cannot exist without economic security. Sanders pointed to this economic bill of rights as reflecting the core of what democratic socialism means to him. It includes:

Decent jobs at decent pay with time off and the ability to retire with dignity;
The ability to have food, clothing, a home, and health care; and
The opportunity for small businesses to operate without domination by large corporations.

Sanders noted that Martin Luther King, in 1968, echoed FDR’s call for economic rights and stated that the US provides “socialism for the rich and rugged individualism for the poor.”

Sanders went on to present specific examples of what democratic socialism means to him. He stated that the principle of economic rights for all is not a radical concept and that many countries around the world have done a far better job of providing economic security for their citizens than the US has done. In particular, he noted that almost all countries provide 3 months of paid family leave for new mothers and that all major countries provide health care as a right, not a privilege. The US does neither of these. He addressed climate change, racism, and economic and social justice issues including a fairer tax system and an end to excessive incarceration. He called for a more vibrant democracy with higher voter participation and the removal of barriers to voting.

You can listen to Sanders’ speech at https://www.youtube.com/watch?v=slkQohGDQCI. It’s an hour and 36 minutes long. You can listen to it while you’re doing something else or, if you want to listen to the highlights, listen to minutes 4 – 9 and from minute 24 for 5 – 10 minutes.

STOPPING THE SECRET MONEY IN OUR ELECTIONS

ABSTRACT: Dark money organizations – non-profit, tax exempt groups that do not have to disclose their donors – are spending tens of millions of dollars every year in our election campaigns. This means that when voters go to vote they don’t know who paid for the dark money funded ads, mailings, and other political activity that has tried to influence their voting.

Seventy-five percent of the public, including equal shares of Republicans and Democrats, believe that contributors should be disclosed. There are multiple ways to address the problem of large amounts of anonymous, dark money being spent in our election campaigns:

Pass a federal Constitutional amendment to overturn the Citizens United and related Supreme Court decisions that allow unlimited spending in our election campaigns
Require clear and timely disclosure of donors to dark money organizations
Implement a Securities and Exchange Commission (SEC) rule requiring corporations to disclose their political spending
Strengthen IRS regulation of non-profit, tax-exempt organizations that engage in political activity
Strengthen Federal Election Commission requirements for disclosure of political spending

FULL POST: In my last post, I discussed the increasing significance dark money organizations – non-profit, tax exempt groups that do not have to disclose their donors – are playing in our election campaigns and politics at the federal, state, and even local levels. They are spending tens of millions of dollars every year, which will probably grow to over $100 million in the 2016 presidential campaign.

This means that when voters go to vote they don’t know who paid for the dark money funded ads, mailings, and other political activity that has tried to influence their voting. Therefore, they aren’t able to make an informed judgment about the interests or purposes behind these political messages.

Seventy-five percent of the public, including equal shares of Republicans and Democrats, believe that contributors should be disclosed. Even Supreme Court Justice Kennedy, in the majority opinion in the Citizens United case [1] that allows unlimited corporate spending in our elections, wrote that “disclosure permits citizens and shareholders to react to the speech [i.e., spending] of corporate entities in a proper way.”

There are multiple ways to address the problem of large amounts of anonymous, dark money being spent in our election campaigns. [2] Ultimately, I believe we need a federal Constitutional amendment to overturn Citizens United and related Supreme Court decisions. Such amendment would state that 1) 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, and 2) 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.

Given that a Constitutional amendment will not happen quickly, there are a number of steps that could and should be taken in the short-term:

Require clear and timely disclosure of donors to dark money organizations through federal and state laws and executive action by the President.
Implement a Securities and Exchange Commission (SEC) rule requiring corporations to disclose their political spending.
Strengthen Internal Revenue Service (IRS) regulation of non-profit, tax-exempt organizations that engage in political activity.
Strengthen Federal Election Commission requirements for disclosure of political spending.

Shortly after the Citizens United ruling in 2010, Congress considered the DISCLOSE Act that would have mandated disclosure and reporting of all spending in federal election campaigns. The bill passed the House but failed by one vote to overcome a Republican filibuster in the Senate. [3] Congress should consider this legislation again in light of the tremendous growth of dark money spending and it should pass the bill this time. States should pass similar legislation to cover state and local elections.

In the meantime, President Obama should sign an Executive Order requiring all federal contractors to disclose their political spending. In addition, the Securities and Exchange Commission (SEC) should act expeditiously to implement a proposed disclosure rule. It would require publicly traded corporations to disclose their political spending. Given the SEC’s mission of protecting shareholders through corporate accountability and transparency, such a rule would be very appropriate. [4]

Along the same lines, in 2013, after years of development, the IRS proposed a rule for non-profit, tax exempt organizations that defined political activity and required timely reporting of donors. The goal was to increase transparency so voters in the 2016 elections would know who was paying for political ads and other campaign activity before entering the voting booth. There was lots of pushback over the proposed rule. Conservative advocacy groups and their supporters in Congress went so far as to manufacture a crisis surrounding the IRS’s oversight of such organizations to pressure the IRS into delaying the transparency rule and to discredit the IRS’s efforts to regulate dark money. [5]

Finally, the other entity that could and should require disclosure of the sources of campaign spending, the Federal Election Commission (FEC), is effectively paralyzed. Its members are required to be split equally between Democrats and Republicans and must be confirmed by the Senate. With a politicized confirmation process in the Senate and the current hyper-partisanship in Congress filtering down to FEC members, the FEC is gridlocked and basically unable to function.

In a democracy, voters have a right and a need to know who is trying to influence their votes and who is supporting or opposing candidates for office. Therefore, clear and timely disclosure of the sources of funds for political activity is essential. I urge you to let your elected officials and candidates for office at all levels know that you support disclosure of the sources of political spending so you can be an informed voter.

[1] In Citizens United and related decisions the Supreme Court ruled that individuals and organizations can spend unlimited amounts of money in our election campaigns. Therefore, these dark money organizations can accept unlimited donations and spend unlimited sums. Specifically, the Court ruled that corporations and other organizations are people and have the same first amendment rights of free speech 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.

[2] People for the American Way and coalition partners, July 2015, “Fighting big money, empowering people: A 21^st century democracy agenda,” (http://www.pfaw.org/sites/default/files/PresidentialPolicy831.pdf)

[3] Kuns, K., 7/1/15, “The dark politics of dark money,” The Washington Spectator

[4] U.S. PIRG, 10/12/15, “Members of Senate Banking Committee, former SEC Commissioner urge SEC nominees to support political disclosure rule,” Common Dreams (http://www.commondreams.org/newswire/2015/10/21/members-senate-banking-committee-former-sec-commissioner-urge-sec-nominees)

[5] Kuns, K., 7/1/15, see above

SECRET MONEY FOR THE PRESIDENTIAL CANDIDATES

ABSTRACT: The fastest growing and perhaps the most troublesome of the four main avenues for presidential campaign fundraising and spending are the “dark money” organizations. These are non-profit organizations that can accept unlimited amounts of money and keep their donors secret. They are social-welfare groups that are supposed to work exclusively to further the common good and general welfare. However, the Internal Revenue Service (IRS) has interpreted “exclusively” to mean “more than 50%,” which still means that political activity shouldn’t be their primary purpose. In addition, an IRS rule prohibits social-welfare organizations from benefiting a single individual.

Some of the politically active social-welfare organizations have pushed against these limitations. In the 2014 congressional elections, dark money expenditures grew tremendously. Because of the lack of oversight and enforcement by either the IRS or the Federal Election Commission (FEC), dark money organizations started ignoring operating rules and reporting requirements. In the 2016 presidential race, single-candidate dark money organizations have surfaced that seem to violate the IRS’s single individual rule. Dark money organizations have also been active at the state and local levels.

Allowing secret donors to pay for millions of dollars of campaign spending means that voters cannot make informed decisions and raises the specter of serious corruption. Without timely disclosure of donors, our democracy cannot have the informed electorate that is essential to its effective functioning.

FULL POST: The fastest growing and perhaps the most troublesome of the four main avenues for presidential campaign fundraising and spending are the “dark money” organizations. [1] These are non-profit organizations that can accept unlimited amounts of money from wealthy individuals, corporations, unions, and other organizations. However, unlike Political Action Committees (PACs) and Super PACs, they can keep their donors secret, hence their money is “dark money.” Like PACs and Super PACs, they are supposed to operate independently of candidates’ official campaign committees.

In exchange for their non-profit, tax-exempt status, these social-welfare groups are supposed to work exclusively to further the common good and general welfare of the people of the community. However, the Internal Revenue Service (IRS) has interpreted “exclusively” to mean that “more than 50%” of an organization’s activities have to be for social-welfare purposes. [2] [3] Therefore, political activity shouldn’t be the primary purpose of these organizations, which are registered under sections 501(c)(4), (c)(5), and (c)(6) of the IRS Code. In addition, an IRS rule prohibits social-welfare organizations from benefiting a single individual – the so-called “private benefit” rule. However, the IRS has been lax in defining political activity and in enforcing the focus on a social-welfare purpose and the private benefit rule.

Some of the politically active social-welfare organizations have pushed back against these limitations. Given the lack of enforcement from the IRS, some of them are basically ignoring operating rules and reporting requirements. In addition, some of these organizations have laundered their contributions through other entities to complicate any attempts to identify actual donors.

In the 2014 U.S. Senate race in North Carolina, a social-welfare organization called Carolina Rising, spent 97% of the $4.9 million it raised helping Thom Tillis win the seat. It received $4.8 million from a single donor whom it did not, and did not have to, disclose. The organization had no employees and spent $4.7 million through a single advertising firm for TV and cable ads. Because some of these ads aired close to the election in a time window that requires reporting to the Federal Election Commission (FEC), Carolina Rising reported $3.3 million in election spending to the FEC. The contracts it signed with the TV and cable companies airing its ads, which are filed with the Federal Communications Commission, identified the ads as pro-Tillis. However, it reported to the IRS that it had conducted no political activity. Carolina Rising would appear to have clearly violated the IRS rules on benefiting a single individual and on political activity having to be less than 50% of a social-welfare organization’s activity. Furthermore, it may well have knowingly lied to the IRS in stating it had not engaged in political activity. [4]

In the 2016 presidential race, single-candidate dark money organizations have surfaced. At least four Republican presidential candidates have dedicated dark money organizations, although they would appear to violate the IRS’s single individual rule. [5]

A dark money organization, the Conservative Solutions Project, is spending heavily on behalf of Republican presidential candidate Marco Rubio. So far, every Rubio TV ad in the early primary states of Iowa, New Hampshire, and South Carolina, as well as mailings to voters in those states, has been paid for by this dark money, non-profit organization. After spending $3 million over the summer promoting Rubio, it was spending almost $1 million a week in late September and early October on pro-Rubio TV ads. [6] Supposedly, it is doing all of this totally independently of the Rubio campaign.

There are plenty of examples of politically active social-welfare nonprofits flouting rules and reporting. And dark money organizations have been active at the state and local levels as well as at the national level. For example, they have opposed California ballot initiatives and blocked the start-up of a new bus line in Nashville, Tennessee, that would have linked poorer, gentrifying neighborhoods with downtown and wealthier, upscale neighborhoods. [7]

Allowing secret donors to pay for millions of dollars of campaign spending means that voters cannot make informed decisions and raises the specter of serious corruption. Without timely disclosure of political donors, our democracy cannot have the informed electorate that is essential to its effective functioning.

My next post will discuss ways of addressing this lack of disclosure of major donors to election spending.

[1] See my previous post, Big money for the presidential candidates, for information on the other 3 avenues for campaign fundraising and spending.

[2] Kuns, K., 7/1/15, “The dark politics of dark money,” The Washington Spectator

[3] Bykowicz, J., 10/8/15, “Rubio’s presidential bid boosted by secret-money commercials,” The Associated Press (http://bigstory.ap.org/article/5926406673b047a7a34f1177e01014da/anonymous-donors-send-millions-pro-rubio-group)

[4] Maguire, R., 10/20/15, “Political nonprofit spent nearly 100 percent of funds to elect Tillis in ’14,” Center for Responsive Politics (http://www.opensecrets.org/news/2015/10/political-nonprofit-spent-nearly-100-percent-of-funds-to-elect-tillis-in-14/)

[5] Maguire, R., & Tucker, W., 9/21/15, “Five-fold upsurge: Super PACs, dark money groups spending far more than in ’12 cycle at the same point in campaign,” Center for Responsive Politics (http://www.opensecrets.org/news/2015/09/five-fold-upsurge-super-pacs-dark-money-groups-spending-far-more-than-in-12-cycle-at-same-point-in-campaign/)

[6] Bykowicz, J., 10/8/15, see above

[7] Kranish, M., 10/11/15, “A city’s immovable roadblock,” The Boston Globe

BIG MONEY FOR THE PRESIDENTIAL CANDIDATES

ABSTRACT: Tracking the tons of money already flowing into the 2016 presidential campaign is not easy. There are four main avenues for presidential campaign fundraising and spending today, when as recently as 2008 there was really only one major one – the candidate’s official campaign committee. A candidate’s official committee is limited to donations from individuals of up to $2,700.

Super Political Action Committees (PACs) are one of the new fundraising vehicles. They can accept unlimited donations from individuals, corporations, and other entities. As-of June 30, single-candidate, presidential Super PACs had raised $258 million. This is 16 times the amount such Super PACs had raised at this point in the last presidential campaign. And it is double the amount raised by the official campaign committees.

Fewer than 400 families have given almost half of the $388 million raised by the presidential candidates’ campaigns and Super PACs. While 48,000 Americans have donated $130 million to the presidential candidates’ campaigns, just 65 donors have given an equal amount – $132 million – to the candidates’ Super PACs. Having a wealthy backer or a few, makes a candidate viable today when in the past they wouldn’t have made it to the starting gate.

What all this means is that a small number of the wealthiest people in the US are exercising enormous influence over who our presidential candidates are and what policies they espouse. The rest of us are sitting on the sidelines watching and wondering if our votes or voices matter – and whether our country is still a democracy or not.

FULL POST: Tracking the tons of money already flowing into the 2016 presidential campaign is not easy. Court decisions, creative campaign lawyers, and lax enforcement have all contributed to opening up new avenues for campaign fundraising and making it impossible in some cases to identify the source of the money.

There are four main avenues for presidential campaign fundraising and spending today, when as recently as 2008 there was really only one major one – the candidate’s official campaign committee. [1] Today we have:

Candidates’ official campaign committees – limited to donations from individuals of up to $2,700. Have to disclose donors of over $250.
Candidate-specific Super Political Action Committees (PACs) – unlimited donations from individuals, corporations, and other entities. Have to disclose donors.
Other PACs and Super PACs – some can receive unlimited donations from a wide variety of entities; others are limited. Have to disclose donors.
“Dark money” organizations, usually not-for-profit entities – unlimited donations from a wide variety of entities. Do not have to disclose donors.

While any viable presidential candidate today must raise staggering amounts of money, different candidates have different patterns in their fundraising. For example, the Clinton and Sanders campaigns recently reported raising similar amounts of money over the last 3 months, $28 million and $26 million respectively. However, Clinton raised $19 million, roughly two-thirds of her money, through 60 fundraising events where the typical contribution was $2,700. Sanders has held only 7 fundraising events throughout the entire campaign and they typically cost $100 to attend. The bulk of his money came from online contributions where the average contribution was $30 and 99% of his contributions were $100 or less. [2] [3]

The use of candidate-specific Super PACs also varies. While they are supposed to operate independently of the candidate’s official campaign, in reality their operations are complementary if not actually coordinated, so analysis of a candidate’s campaign’s financial status typically combines figures for the candidate’s campaign and his or her Super PAC(s). These Super PACs, while technically barred from coordinating tactics and plans with the official campaign, are increasingly paying for core costs of a campaign, including, for example, the candidate’s travel, polling, and, of course, advertising. Furthermore, candidates are often directly involved with their Super PACs’ fundraising. The Super PACs have effectively eviscerated laws on contribution limits that were put in place to prevent bribery and corruption. [4]

Official data are available on the campaigns’ fundraising through June 30. At that point, the single-candidate, presidential Super PACs had raised $258 million. This is 16 times the amount such Super PACs had raised at this point in the last presidential campaign. And it is double the amount raised by the campaigns themselves. [5] Four of the top 7 candidates in terms of fundraising had raised more money through their Super PACs than through their campaigns, while one had raised no Super PAC money and another had essentially only raised Super PAC money: [6]

Jeb Bush: Total raised: $115 million Super PAC: $103 m Campaign: $11 m
Hillary Clinton: Total raised: $68 million Super PAC: $20 m Campaign: $48 m
Ted Cruz: Total raised: $53 million Super PAC: $39 m Campaign: $14 m
Marco Rubio: Total raised: $27 million Super PAC: $17 m Campaign: $10 m
Ben Carson: Total raised: $17 million Super PAC: $7 m Campaign: $11 m
Bernie Sanders: Total raised: $16 million Super PAC: $0 m Campaign: $16 m
Chris Christie: Total raised: $14 million Super PAC: $14 m Campaign: $0 m

Fewer than 400 families have given almost half of the $388 million raised by the presidential candidates’ campaigns and Super PACs. Much of the Super PAC money is coming from a small handful of individuals and families. While 48,000 Americans have donated $130 million to the presidential candidates’ campaigns, just 65 donors have given an equal amount – $132 million – to the candidates’ Super PACs. These wealthy contributors not only have great access to the candidates they support, they are often confidantes and sometimes have business dealings with the candidates or entities that the candidates run. Having a wealthy backer or a few, makes a candidate viable today when in the past they wouldn’t have made it to the starting gate. [7] For example:

Cruz: 6 people, 4 individuals from one family and 2 other individuals, have contributed the $36 million his Super PACs have received. Under our previous campaign laws, it would have required over 13,000 individuals giving the maximum $2,700 to raise this much money.

Rubio: 4 donors have contributed $12.5 million.

Mike Huckabee: 1 individual gave $3 million.

Bush: 26 individuals or corporations have given over $1 million each.

Clinton: 9 individuals have contributed over $1 million each.

Rand Paul: 2 individuals have given a combined $3 million.

What all this means is that a small number of the wealthiest people in the US are exercising enormous influence over who our presidential candidates are and what policies they espouse. The rest of us – 300 million Americans – are sitting on the sidelines watching and wondering if our votes or voices matter – and whether our country is still a democracy or not. [8]

To put the current presidential campaign’s fundraising in some perspective, the $388 million raised by the presidential candidates’ campaigns and Super PACs already – over a year before the final election – is more than the $331 million that Bill Clinton, George H.W. Bush, and their rivals spent in the whole 1992 election. And it is almost 5 times the amount that had been raised at this point in the 2012 presidential campaign. In the 2016 presidential election, spending will be over 20 times what it was just 24 years ago in the 1992 election.

[1] Pindell, J., 10/1/15, “Evaluating campaign money reports gets more complicated,” The Boston Globe

[2] Campaign Notebook, 10/2/15, “Sander’s war chest fills fast,” The Boston Globe from the Associated Press

[3] Bykowicz, J., 9/30/15, “Clinton, Bush steady fundraising amid GOP summer Trump slump,” Associated Press

[4] Confessore, N., Cohen, S., & Yourish, K., 8/1/15, “Small pool of rich donors dominates election giving,” The New York Times

[5] Kranish, M., 9/13/15, “In national politics, big money drowning out everyone else,” The Boston Globe

[6] OpenSecrets.org, 10/4/15, “Behind the candidates: campaign committees and outside groups,” Center for Responsive Politics (http://www.opensecrets.org/pres16/raised_summ.php)

[7] Confessore, et al., 8/1/15, see above

[8] Kranish, M., 9/13/15, see above

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 3^rd 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)

OUR ELECTIONS ARE ALL ABOUT THE MONEY

ABSTRACT: Although the next presidential election is over 20 months away, there is already media attention focused on who can and who is raising the most money. The top lobbyists / bundlers raise over $1 million for candidates’ campaigns. If this isn’t a blatant way of buying influence, I don’t know what is. A Washington, D.C., lawyer and political activist formed a super PAC that raised $145 million for Romney’s campaign in 2012. Presidential candidate Jeb Bush is holding $100,000 per person fundraisers. He plans to hold 60 fundraisers before April 1, an average of nearly one per day.

The money race is the real race; the actual courting of voters and voting is secondary. The savvy, hard-working, profit-driven individuals making large campaign contributions are looking for a return on their investment. And they get it through government actions that benefit their interests. This, in a nutshell, is the legalized corruption of the political system of our supposed democracy.

We must reform our system of financing election campaigns. Two essential elements are:

Reversing the Supreme Court’s Citizens United and related decisions, and

Establishing campaign financing systems where small contributions to viable candidates are matched by public funds so candidates can be competitive based on support from every day citizens and voters instead of being dependent on wealthy individuals and interest groups.

FULL POST: Although the next presidential election is over 20 months away, it is already getting quite a bit of media attention. Little of that attention is focused on the policies that the possible candidates support. Much of the attention is focused on who can and who is raising the most money.

On the Republican side, Romney’s decision not to run has set off a scramble among other possible candidates to win over his financial backers. Romney’s top five lobbyists / bundlers each raised over $1 million for his campaign. These lobbyists for powerful corporate interests solicited campaign contributions from multiple individuals and political action committees (PACs) and presented them in aggregate (i.e., a bundle) to Romney’s campaign. If this isn’t a blatant way of buying influence, I don’t know what is. The top lobbyist / bundler was Bill Graves, president of the American Truckers Association and former Governor of Kansas.

Announced presidential candidate Jeb Bush has been aggressively wooing the Romney fundraisers and others. He began active fundraising last November, two years before the election. In a recent week, he held a $100,000 per person fundraiser in New York, two fundraisers in Washington, D.C., and two in Chicago. He told his audience of lobbyists, CEOs, and corporate industry group representatives that he plans to hold 60 fundraisers before April 1, an average of nearly one per day. Charlie Spies, a Washington, D.C., lawyer and political activist, who formed a super PAC that raised $145 million for Romney’s campaign is now working with a newly formed super PAC supporting Bush. [1]

The money race is the real race; the actual courting of voters and voting is secondary. Is this really the way we want to be selecting candidates for President (or any office) in a democracy? Is this really how we want our candidates to be spending their time? Is this really what we want the media to be reporting about the candidates – how many fundraisers they are having, how much money they are raising, and who is providing them with huge amounts of money? Do we really want our candidates courting and being indebted to these wealthy individuals and interest groups?

The savvy, hard-working, profit-driven individuals making large campaign contributions are looking for a return on their investment. And they get it through government actions that benefit their interests. As one example of such a return, the Koch brothers spent in excess of $100 million in the 2014 federal election, primarily, if not exclusively, in support of Republican candidates. The new Republican-controlled Congress just happened to fast-track a vote on a bill mandating the construction of the Keystone XL Pipeline. The Koch brothers and their corporations lease oil rights on more than a million acres of land in the Alberta tar sands region from which the pipeline would transport oil. The construction of the pipeline would increase the value of their leases by an estimated $100 million! [2] This is just one example of the kind of payback wealthy campaign donors get. And the Koch brothers have just announced their intention to spend close to a billion dollars in the 2016 elections.

This, in a nutshell, is the legalized corruption of the political system of our supposed democracy. We are well down the road to a plutocracy (where the wealth elites rule) or a corporatocracy (where the corporations rule). I’m not sure there’s much difference, actually. (See my post on 7/21/14 for more detail.)

We must reform our system of financing election campaigns or we will lose our democracy – government of, by, and for the people. Reforming campaign financing will not be easy or quick. Two essential elements are:

Reversing the Supreme Court’s Citizens United and related decisions that equate money with speech and give corporations the free speech rights of the Bill of Rights (see my post on 1/11/15 for more detail), and
Establishing campaign financing systems, such as those in Arizona, Maine, and New York City, where small contributions to viable candidates are matched by public funds so candidates can be competitive based on support from every day citizens and voters instead of being dependent on wealthy individuals and interest groups (see my post on 7/25/14 for more detail).

[1] Viser, M, 2/14/15, “Bush pressing to lock in Romney’s donors,” The Boston Globe

[2] Hightower, J., 12/14, “Koch Kongress: The best money can buy,” The Hightower Lowdown (http://www.hightowerlowdown.org/)

PROGRESSIVE VALUES ARE ALIVE AND WELL IN THE U.S.

ABSTRACT: Despite Republicans taking over control of the U.S. Senate, progressive values are alive and well in the U.S. In a recent poll of likely 2016 voters, over 70% supported the following policies:

Medicare should be allowed to negotiate drug prices
Student loans should have lower interest rates
Pre-kindergarten and Medicare should be available to all
Trade agreements should protect workers, jobs, and the environment
Corporations that ship jobs overseas shouldn’t get tax breaks
The government should establish a $400 billion / year infrastructure-building jobs program
Public higher education should be debt-free and Social Security benefits should be expanded.

The full set of poll questions and results are available at: https://s3.amazonaws.com/s3.boldprogressives.org/images/Big_Ideas-Polling_PDF-1.pdf.

There also were many positive results on progressive ballot measures in the 2014 election. The question is, how did conservative Republicans get elected when they don’t reflect the will of the people? The four main answers are:

Turnout in the November election was very low
Many Democrats didn’t campaign on the progressive issues that are popular with voters
Gerrymandered electoral districts and our primary election system produce very ideological candidates who are not representative of the larger population
Voter suppression efforts by Republicans have succeeded in reducing voting by groups that tend to favor Democrats.

FULL POST: Despite Republicans taking over control of the U.S. Senate and therefore both branches of Congress, progressive values are alive and well in the U.S. The progressive policies that President Obama put forward in his State of the Union speech are much closer to what Americans want from their government than the conservative policy proposals the Republicans are espousing.

In a recent poll of likely voters in the 2016 election, over 70% supported the following policies:

Medicare should be allowed to negotiate drug prices with the pharmaceutical corporations
Student loans should have the same low interest rates as the big bank corporations get
Universal pre-kindergarten should be provided
Trade agreements should protect workers, jobs, and the environment
Corporations that ship jobs overseas shouldn’t get tax breaks
Medicare should be available to anyone who is willing to pay for it
Corporations should have to disclose spending on elections and lobbying
The government should establish a $400 billion / year infrastructure-building jobs program
Public higher education should be available to all debt-free
Social Security benefits should be expanded

There were other issues with over 70% support and many more with majority support. The full set of poll questions and results are available at: https://s3.amazonaws.com/s3.boldprogressives.org/images/Big_Ideas-Polling_PDF-1.pdf.

There also were many positive results on progressive ballot measures in the 2014 election, some of which I covered in my 11/25/14 post. Here are some more, thanks to Jim Hightower and his Hightower Lowdown newsletter (http://www.hightowerlowdown.org/).

In dozens of communities in at least five states (Florida, Illinois, Massachusetts, Ohio, and Wisconsin), voters supported overturning the Supreme Court’s Citizens United and related decisions that have allowed unlimited sums of money to be spent on election campaigns. These voters called for a Constitutional amendment that would state that corporations do not have the same rights as human persons and that money is not equivalent to speech and therefore can be regulated in election campaigns. Voters in Wisconsin, who re-elected conservative, Republican Governor Walker, nonetheless, voted overwhelmingly in 12 communities for this Constitutional amendment (between 70% and 83% in favor). [1]

Voters statewide in Massachusetts; in Oakland, CA; and in two New Jersey cities voted overwhelmingly to require employers to provide paid sick time (between 59% and 86% in favor). In Alaska, Florida, and New Jersey voters approved conservation initiatives.

Local bans on fracking [2] passed in two counties in California; in Athens, Ohio; and in Denton, Texas. In Denton, the supporters of the ban were out-spent almost 30 to 1, but, nonetheless, won 59% of the votes; a resounding victory, especially because Texas is a major oil and gas state.

Republicans have accused President Obama of being political in his State of the Union speech because he proposed policies that are popular with the public but not with the conservative Republicans who control Congress. This seems like convoluted logic to me. Isn’t democratic, representative government supposed to put in place policies that are popular with the public? It sounds like the Congressional Republicans are admitting that they are out of step with what the public wants. The polling and results of ballot measures cited above confirm this apparent admission.

The question is, how did conservative Republicans get elected when they don’t reflect the will of the people? The four main answers are:

Turnout in the November election was very low (only 25% of those eligible to vote actually voted),
Many Democrats didn’t campaign on the progressive issues that are popular with voters,
Gerrymandered electoral districts, particularly for the US House, and our primary election system where turnout is even lower than in the final election (less than 15% of eligible voters) tend to produce very ideological candidates for the final election who are not representative of the larger population, and
Voter suppression efforts by Republicans have succeeded in reducing voting by groups, such as minorities, the young, and the elderly, that tend to favor Democrats.

If you know of other examples of progressive local ballot initiatives that were approved by voters or other examples of Congress not representing the will of the people, please share them in a comment on this post. Thanks!

[1] Hightower, J., Dec. 2014, “As majorities tossed meek, dodgy Democrats, even more said “Yes” to populist ballot measures,” The Hightower Lowdown (http://www.hightowerlowdown.org/

[2] Fracking is short for hydraulic fracturing and is the process of drilling and injecting liquid made of water, sand, and chemicals into the ground at a high pressure in order to fracture shale rocks and release natural gas or oil.

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 17^th 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.)

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.

[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

PROGRESSIVE SUCCESSES IN THE 2014 ELECTION

ABSTRACT: Perhaps surprisingly, in the context of Republican and conservative candidates’ victories in the 2014 election, many ballot initiatives that were decidedly liberal or progressive passed. Democrats running clearly progressive campaigns for the US Senate won in 3 states. The Republican victories in many very close races were made possible by very low voter turnout. Only 35% of those registered to vote and 25% of those eligible to vote actually voted.

Voters in four Republican states – Arkansas, Alaska, Nebraska and South Dakota – raised the minimum wage despite concerted and well-funded opposition. In Richmond, California, progressives defeated mayoral and city council candidates heavily funded by Chevron, the nation’s third largest corporation. In Arkansas, despite a sweep by Republican candidates, a ballot initiative passed that reformed campaign finance and ethics laws. In Tallahassee, Florida, voters also approved reforms in campaign finance and ethics laws. In dozens of communities in four states (Florida, Illinois, Massachusetts, and Ohio), voters overwhelmingly favored ballot measures supporting a federal constitutional amendment that would state that corporations do not have the same rights as human persons and that money is not equivalent to speech and therefore can be regulate in election campaigns.

This all makes it clear that Republican candidates’ election victories do not reflect public opinion on many important policy issues. Rather, they were the result of a failure of many Democrats to campaign on popular progressive policies. Furthermore, the election outcomes reflect Republicans’ successes in changing the rules of our elections to suppress voter turnout and allow the spending of huge sums by wealthy corporations and individuals.

FULL POST: Perhaps surprisingly, in the context of Republican and conservative candidates’ victories in the 2014 election, many ballot initiatives that were decidedly liberal or progressive passed – sometimes even in the same jurisdictions that were electing conservatives. Furthermore, Democrats running for the US Senate who ran some of the most clearly progressive campaigns won: Senator Jeff Merkley (Democrat of Oregon), Senator Al Franken (D-Minn.), and incoming Senator Gary Peters (D-Mich.).

The Republican victories in many very close races were made possible by very low voter turnout – the lowest since 1942 – which favors Republicans and conservatives. Only 35% of those registered to vote and 25% of those eligible to vote actually voted. In the Congressional elections, Republicans won 52% of the vote, which represents only 17% of those registered to vote and 13% of those eligible to vote. [1] Hardly a mandate by normal standards. The Republican’s large majority in the US House is largely due to extreme gerrymandering of House districts.

Despite the context, every major progressive or Democratic ballot initiative won, even in Republican states. Every minimum wage increase won and every personhood amendment failed (CO & ND). (These are amendments to state Constitutions that confer personhood and all its rights on embryos at fertilization.) [2] Across the nation, voters also passed measures against fracking, for paid sick leave, for criminal justice sentencing reform, and for gun purchase background checks. [3]

Voters in four Republican states – Arkansas, Alaska, Nebraska and South Dakota – raised the minimum wage against the concerted and well-funded opposition of national and local big business groups. This will raise the pay levels for over 1.7 million workers. Alaska and South Dakota linked the minimum wage to inflation, so it will increase automatically in the future. San Francisco and Oakland voters also overwhelmingly increased the minimum wage in those cities. Illinois voters strongly supported a non-binding referendum to raise the minimum wage.

In Richmond, California, progressives defeated mayoral and city council candidates funded by Chevron, the nation’s third largest corporation. Chevron, which owns a huge refinery in the city, poured at least $3 million into the local elections in this working class city of 105,000 people (about $150 for each likely voter). It sought to oust a progressive local government that was requiring it to clean up its pollution, pay more taxes into city coffers, and be a more responsible and accountable corporate citizen. Wall St. corporations also participated in the attempt to throw out the progressives because the city government, faced with a decade of predatory lending and an epidemic of foreclosures and “underwater” mortgages, demanded that Wall Street banks help troubled homeowners save their homes. In the election, community groups, labor unions, the Richmond Progressive Alliance (RPA), and others mobilized a grassroots campaign to re-elect a progressive city government. [4]

A California ballot initiative reformed sentencing laws and one in Washington State expanded criminal background checks for gun purchases. In Arizona, voters defeated a right wing attempt to undermine public employee pensions. In Denton, Texas, the heart of oil and gas country, voters banned fracking, the controversial drilling method for extracting gas from rock formations.

In Arkansas, despite a sweep by Republican candidates, a ballot initiative passed that reformed campaign finance and ethics laws. It bans direct corporate and union campaign contributions to candidates, forbids lawmakers from accepting gifts of any kind from lobbyists, and increases the amount of time departing lawmakers must wait before lobbying from one to two years.

In Tallahassee, Florida, voters overwhelmingly approved an anti-corruption initiative limiting campaign contributions, creating a $25 tax rebate for small contributions, and boosting ethics reforms by creating an ethics panel and a tough conflict-of-interest policy for city officials. In dozens of communities in four states (Florida, Illinois, Massachusetts, and Ohio), voters overwhelmingly favored ballot measures supporting a federal constitutional amendment overturning Supreme Court decisions including Citizens United and McCutcheon. The amendment would state that corporations do not have the same rights as human persons and that money is not equivalent to speech and therefore can be regulated in election campaigns. [5]

This all makes it clear that Republican candidates’ election victories do not reflect public opinion on many important policy issues. Rather, they were the result of a failure of many Democrats to campaign on popular progressive policies. Furthermore, the election outcomes reflect Republicans’ successes in changing the rules of our elections to favor big business and conservative interest groups by suppressing voter turnout and allowing the spending of huge sums by wealthy corporations and individuals. [6]

[1] Murphthesurf3, 11/20/14, “GOP columnist: The VERY bad news for the GOP in the GOP’s midterm victory,” The Daily Kos

[2] Ladd, C., 11/10/14, “The missing story of the 2014 election,” Houston Chronicle

[3] Dreier, P., 11/7/14, “Progressive Midterm Victories You Didn’t Hear About — And Some That Could Still Happen,” The American Prospect

[4] Dreier, P., 11/7/14, see above

[5] Blumenthal, P., 11/14/14, “Where campaign finance reformers actually won on election day,” The Huffington Post

[6] Dreier, P., 11/7/14, see above

2014 ELECTION RETROSPECTIVE PART 1: THE MONEY

ABSTRACT: In the 2014 election, the influx and impact of huge amounts of money was clearly evident and the growth of “dark money” – money where the actual contributor is unknown – was a very significant factor. This was the most expensive non-presidential election ever – estimated at $3.7 billion. Outside spending, that is money not spent by the candidates’ campaigns themselves but by supposedly independent groups and the political parties, was more than the spending by the candidates themselves for the first time. This means that accountability for much of what’s said during campaigns no longer rests with the candidates. One facet of this is that a predominant portion of the ads paid for by outside money are negative ads that attack a candidate. These campaign practices undermine both the functioning of and the faith in our democracy.

Roughly a billion dollars was spent on the 36 US Senate races alone – an average of about $30 million each. In the 11 most competitive races for the US Senate, $342 million of non-party outside money was spent with $203 million of this (59%) being “dark money” where the true donor is unknown. The typical contribution to the 5 largest non-party outside spending entities that disclose donors was over $100,000.

The real money story of this election was not which side had more resources, but that such a large chunk of the cost was paid for by a small group of ultra-wealthy donors. By super-sizing contributions that benefit specific candidates, the likelihood of corruption escalates because elected officials are pressured to repay big donors after the election.

The results of the Supreme Court’s Citizens United and other decisions couldn’t be clearer. Hundreds of millions of dollars from undisclosed donors are flooding our elections. Very wealthy donors are contributing millions of dollars. There is very strong evidence that this money is influencing who wins our elections, because the candidate supported by the most money usually wins. This was true for 94% of US House races and 82% of US Senate races in 2014.

There is also strong evidence that our Congress returns the favor by supporting the wealthy interests that funded their elections and put them in office – to the detriment of the middle and working classes. We need look no further than Wall St. to see the evidence: corporate profits, stock prices, CEO pay, and investors’ wealth have never been higher. Yet, the middle and working class still struggle to make ends meet.

This is not democracy. We need to reverse the Supreme Court’s decisions through a Constitutional Amendment. In the meantime we need much stronger disclosure laws for campaign spending so we know who is trying to influence our votes. More on this next time.

FULL POST: In the 2014 election, the influx and impact of huge amounts of money was clearly evident and the growth of “dark money” – money where the actual contributor is unknown – was a very significant factor.

In this post, I will review the role of money in the 2014 national election. In a subsequent post, I’ll identify ways we can address the corrupting and undemocratic flow of huge sums of money into our elections. Further analysis of the 2014 election in future posts will cover some state and local elections results, as well as the success of progressive candidates and ballot initiatives (despite the general, national success of “conservative” and Republican candidates).

This was the most expensive non-presidential campaign ever – estimated at $3.7 billion. Outside spending, that is money not spent by the candidates’ campaigns themselves but by supposedly independent groups and the political parties, was more than the spending by the candidates themselves for the first time. This means that accountability for much of what’s said during campaigns no longer rests with the candidates. They can – and do – say that they have no control over the outside groups. With increasing amounts of outside spending, and especially the growth of spending by groups that do not have to disclose contributors, accountability for and constraints on what is said vanish. One facet of this is that a predominant portion of the ads paid for by outside money are negative ads that attack a candidate. This tends to discourage people from voting and lowers their opinions of our elected officials and government. These campaign practices undermine both the functioning of and the faith in our democracy.

Roughly a billion dollars was spent on the 36 US Senate races alone – an average of about $30 million each. North Carolina’s Senate race was the most expensive ever with $116 million spent, including $84 million of outside spending – which shattered the previous outside spending record of $52 million. Spending on the 10 most expensive US House races averaged over $16 million each. [1]

In the 11 most competitive races for the US Senate, [2] $342 million in non-party outside money was spent, plus $89 million from the political parties. The non-party, outside spending on just these 11 races is one-third more than the outside spending on all 33 Senate races in 2012. Of the $342 million of non-party outside money, $203 million (59%) was “dark money” where the true donor is unknown. And this “dark money” may have tipped these elections, as winners of these races received twice as much “dark money” as the losers. For the 8 Republican winners, an average of 78% of their non-party, outside money was “dark money.” [3]

Non-party outside spending is NOT funded by regular voters. The typical contribution to the 5 largest non-party outside spending entities that disclose donors was over $100,000. For sake of comparison, this is more than the average household income in the US, which is $73,000. Of the top 20 outside spending groups, which together spent over $300 million, 7 provide no disclosure of donors, 5 provide partial disclosure, and only 8 provide full disclosure (2 of which are the national parties). [4]

To get an idea of the huge amounts these large donors give:

The top 20 individual donors to outside groups gave an average of $8.4 million each, while
The top 20 organizations donating to outside groups gave an average of $5.8 million each.

All told, these two groups of 40 donors gave a combined $284.7 million, which far exceeds the projected spending of either of the national parties. [5]

This election documented again that money is a deciding factor. When “conservative” outside groups outspent “liberal” groups, the “conservative,” i.e., Republican, candidate won every time. [6] However, the real money story of this election was not which side had more resources, but that such a large chunk of the cost was paid for by a small group of ultra-wealthy donors. [7]

A particular type of outside spending that is of special concern is candidate-specific super PACs. Big donors are using these groups to evade limits on contributions directly to candidates. By super-sizing contributions that benefit specific candidates, the likelihood of corruption escalates because elected officials are pressured to repay big outside donors after the election. [8]

As others have said, we have the best Congress money can buy. There is also strong evidence that our Congress returns the favor by supporting the wealthy interests that funded their elections and put them in office – to the detriment of the middle and working classes. We need look no further than Wall St. to see the evidence: corporate profits, stock prices, CEO pay, and investors’ wealth have never been higher. Yet, the middle and working class still struggle to make ends meet.

More on what’s being done to address these issues, and on what you can do, in an upcoming post.

[1] Waldman, P., 11/11/14, “This year’s biggest spenders,” The American Prospect

[2] Alaska, Arkansas, Colorado, Georgia, Iowa, Kansas, Kentucky, Louisiana, Michigan, New Hampshire, and North Carolina.

[3] Vandewalker, I., 11/10/14, “Outside spending and dark money in toss-up Senate races: Post-election update,” Brennan Center for Justice (http://www.brennancenter.org/analysis/outside-spending-and-dark-money-toss-senate-races-post-election-update)

[4] Vandewalker, I., 11/10/14, see above

[5] OpenSecrets.org, 10/29/14, “Overall Spending Inches Up in 2014: Megadonors Equip Outside Groups to Capture a Bigger Share of the Pie,” Center for Responsive Politics (http://www.opensecrets.org/news/2014/10/overall-spending-inches-up-in-2014-megadonors-equip-outside-groups-to-capture-a-bigger-share-of-the-pie/)

[6] Miller, J., 11/5/14, “Top 5 Senate races where dark money and outside spending ran wild,” The American Prospect

[7] Choma, R., 11/5/14, “Money won on Tuesday, but rules of the game changed,” Center for Responsive Politics (https://www.opensecrets.org/news/2014/11/money-won-on-tuesday-but-rules-of-the-game-changed/)

[8] Vandewalker, I., 10/21/14, “Election Spending 2014: 9 Toss-Up Senate Races,” Brennan Center for Justice (http://www.brennancenter.org/publication/election-spending-2014-9-toss-senate-races)

POLICY INNOVATION IN OUR CITIES

ABSTRACT: With our federal government gridlocked, many cities around the US are taking the lead in policy innovation. Progressive policies are bubbling up in cities from Seattle and Santa Fe to Cleveland. Minneapolis’s new mayor has championed infant health care, universal pre-kindergarten education, closing racial gaps, and new public transit lines to better connect minority communities to jobs. Pittsburgh’s new mayor is working to establish universal pre-kindergarten, affordable housing with a low carbon footprint, responsible banking, and local hiring and paying of prevailing wages on city-funded projects.

New York’s new mayor is working to institute universal pre-kindergarten, raise the minimum wage, expand paid sick days and affordable housing, reduce greenhouse gas emissions by 80% by 2050, and end the “stop and frisk” tactic of the police, which many view as harassment of minorities. New York City has an innovative campaign finance system and an active, progressive, Working Families Party.

In these and other cities, interesting, innovative, and significant progressive policies are being promoted and enacted.

FULL POST: With our federal government gridlocked, many cities around the US are taking the lead in policy innovation. Progressive policies on everything from campaign financing to early education to housing and banking are bubbling up in cities from Seattle and Santa Fe to Cleveland and Minneapolis to Pittsburgh and New York. [1]

Minneapolis’s new mayor, Betsy Hodges, has championed infant health care and universal pre-kindergarten education. She identified closing the large racial gaps among Minneapolis’s growingly diverse population as a moral and economic imperative. Among other initiatives, she is pushing to route new public transit lines to better connect minority communities to places with jobs.

Pittsburgh’s new mayor, Bill Peduto, is also working to establish universal pre-kindergarten. He is building affordable housing with a low carbon footprint. He worked as a City Council member (before becoming mayor) to require local hiring and paying of prevailing wages on city-funded projects. He authored the city’s responsible-banking law, which directs the city’s funds to banks that have loaned money in poor city neighborhoods.

New York’s new mayor, Bill de Blasio, is working to institute universal pre-kindergarten too. He proposed funding it through an income tax surtax on the city’s wealthiest residents. This was blocked by the state but the pre-K program is moving ahead with other funding sources. His effort to raise the minimum wage was also blocked by the state, but he has expanded paid sick days. He is also working to expand affordable housing and to end the “stop and frisk” tactic of the police, which many view as harassment of minorities. He has committed the city to an 80% reduction in greenhouse gas emissions by 2050. [2]

New York City has an innovative campaign finance system where small contributions are matched with $6 of public money for every $1 contributed. This amplifies the voice of small donors, encourages voters to make small contributions, and, ultimately, to vote, while blunting the influence of large donors. Many analysts believe that de Blasio would not have been elected without this campaign financing system that enables grassroots candidates to run competitive campaigns. New York’s Working Families Party was also key to de Blasio’s election. It has framed election issues and mobilized voters to help elect de Blasio and a near majority of progressive candidates to the city council.

These are examples of efforts to enact progressive policies that are occurring in many cities, including Los Angeles, Phoenix, and Boston. Despite gridlock at the federal level, interesting, innovative, and significant policies are being promoted and enacted in cities around the US.

[1] Meyerson, H., May/June 2014, “The revolt of the cities,” The American Prospect

[2] Eskow, R., 10/3/14, “Progressive champion Bill de Blasio models populist change,” Campaign for America’s Future (http://ourfuture.org/20141003/progressive-champion-bill-de-blasio-models-populist-change)

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)

WHERE O WHERE HAS INVESTIGATIVE JOURNALISM GONE?

ABSTRACT: Investigative journalism, especially by the mainstream media, is rare these days. Yet it is critical to an informed citizenry, which in turn is critical to a successful democracy. On a recent Bill Moyers TV show, “The lies that lead to war,” Moyers and his guest, investigative journalist Charles Lewis, explore the value of investigative journalism and the reasons for its scarcity. Currently, Lewis says, the media largely just report what those in positions of authority and power tell them, with very little analysis or commentary.

Part of the reason for this is that the corporate, for-profit mainstream media have cut the budgets and staffing of news operations and investigative journalism. The media also have a conflict of interest: they don’t want to alienate elected and corporate officials because they want them as sources for stories and appearances on TV shows.

The Obama administration has been very aggressive in discouraging the leaking of information to members of the media. It has prosecuted leakers. The likelihood that leakers will be caught is high given the extensive surveillance that’s in place. In addition, the Obama administration has been very aggressive in prosecuting investigative journalists. Obama has used the Espionage Act against journalists far more than any other president.

We need good and unintimidated investigative journalism. The whole reason for including freedom of the press in the Bill of Rights was so that the media could report information that those in power and with authority might want to keep hidden. Knowledge in the hands of an informed citizenry is essential to the success of democracy.

FULL POST: Investigative journalism, especially by the mainstream media, is rare these days. Yet it is critical to an informed citizenry, which in turn is critical to a successful democracy. Investigative journalism uncovers and publicizes revealing information not available elsewhere that often has been purposely kept from the public.

According to Wikipedia, “Investigative journalism is a form of journalism in which reporters deeply investigate a single topic of interest, such as serious crimes, political corruption, or corporate wrongdoing. An investigative journalist may spend months or years researching and preparing a report. … In many cases, the subjects of the reporting wish the matters under scrutiny to remain undisclosed. … [Investigative journalists work] to discover the truth and to identify lapses from it.” [1]

On a recent Bill Moyers TV show, “The lies that lead to war,” Moyers and his guest, investigative journalist Charles Lewis, explore the value of investigative journalism and the reasons for its scarcity. [2] Lewis’s recent book, “935 Lies: The future of truth and the decline of America’s moral integrity,” documents the lies that led to the Vietnam and Iraq wars. In both cases, there was a pattern of knowing deception and an orchestrated campaign of lies by Presidents Johnson and G.W. Bush and their administrations that led to these wars of choice. And in both cases, the mainstream media failed, for the most part, to engage in the timely investigative journalism that would have exposed the deception.

Lewis states that the failure of the media to expose deception by public and private officials has gotten worse over time. Currently, he says, the media largely just report what those in positions of authority and power tell them, with very little analysis or commentary.

Part of the reason for this is that the corporate, for-profit mainstream media, in the interests of profitability, have cut the budgets and staffing of news operations and investigative journalism. The media also have a conflict of interest: they don’t want to alienate elected and corporate officials because they want them as sources for stories and appearances on TV shows. Therefore, the media avoid asking them tough questions or engaging in reporting that would embarrass them or cast them in a negative light.

The Obama administration has been very aggressive in discouraging the leaking of information to members of the media. It has prosecuted leakers. The likelihood that leakers will be caught is high given the extensive surveillance of phone calls and emails, the ability to track cell phones’ locations, and the thousands of surveillance cameras in Washington (and elsewhere). Leaked information is essential to investigative journalism, so these aggressive anti-leaking efforts make investigative journalism much more difficult.

In addition, the Obama administration has been very aggressive in prosecuting investigative journalists. Obama has used the Espionage Act against journalists far more than any other president. Nixon used it only once, against Daniel Ellsberg who leaked the Pentagon Papers. Obama has used it eight times. Obama says he supports a shield law for reporters that would protect the confidentiality of their sources, but he is criminalizing investigative reporting by prosecuting leakers and the journalists with whom they share information.

Currently, James Risen, an investigative journalist for the New York Times, is being threatened with jail by the Obama administration for refusing to identify a source he used in his book, “State of War,” about the secret campaign against the Iranian nuclear program. Risen, one of only about a dozen reporters that focus on national security issues, co-authored stories about domestic surveillance that won him a Pulitzer Prize in 2005.

The Obama administration wants to prosecute the person who leaked information to Risen. It knows who the leaker is, but it doesn’t want to have to reveal the intelligence and surveillance tools it used to identify him. Those tools may be illegal or may appear to be unseemly ways of monitoring government employees. Therefore, it wants to force Risen to reveal his source.

In the case of Eric Snowden, who leaked the information on the National Security Agency’s (NSA) extensive surveillance of Americans and others, he has had to take asylum in Russia to avoid prosecution. The investigative journalists who have published his material have had to work from and remain overseas, while taking extraordinary steps to keep their phone and email communications, as well as their computers and the leaked files on them, from being hacked into by the NSA and the US intelligence agencies.

[1] Retrieved from Wikipedia on 8/5/14, “Investigative journalism,” http://en.wikipedia.org/wiki/Investigative_journalism

[2] Moyers, B., with Lewis, C., 6/27/14, “The lies that lead to war,” Moyers and Company (http://billmoyers.com/episode/the-truth-vs-dcs-propaganda-machine/)

THE BIGGEST LOSERS IN DETROIT’S BANKRUPTCY

ABSTRACT: The biggest losers in Detroit’s bankruptcy appear to be school children, current and former city employees, and poor residents. The emergency plan for Detroit’s public schools calls for increasing class sizes from 38 to 43 students in grades 6 – 12. Spending on classroom instruction has been cut 19% (falling from 58% of the school budget to 47%), while spending on central administration has grown by 64%. Detroit’s workers and retirees have agreed to accept cuts in their pensions.

Since March, over 15,000 households in Detroit have had their water cut off. While residents’ water has been shut off if they owe more than $150, 40 commercial users that owe a total of $9.5 million have not been shut off.

This country spent hundreds of billions of dollars to bail out huge financial corporations (that had engaged in egregious misconduct) so that they wouldn’t go bankrupt. We should be able to help poor and unemployed residents of Detroit so their water isn’t shut off, to ensure Detroit’s children get a good education, and to provide reasonable cost of living increases for city employees’ pensions – all for a tiny fraction of the cost of the bank bailout.

FULL POST: The biggest losers in Detroit’s bankruptcy appear to be school children, current and former city employees, and poor residents.

The emergency manager of Detroit’s public schools has put forward his emergency plan. It calls for increasing class sizes from 38 to 43 students in grades 6 – 12. Since control of the budget was removed from the elected school board, spending on classroom instruction has been cut 19% (falling from 58% of the school budget to 47%). Meanwhile, spending on central administration has grown by 64%. [1]

Detroit’s workers and retirees have agreed to accept cuts in their pensions (reluctantly I’m sure). Regular municipal employees’ pensions would be cut by 4.5% and they will get no annual inflation adjustments. (The average municipal workers’ pension is less than $23,000 per year.) Police and firefighters will lose only a portion of their annual inflation adjustment. [2]

Since March, over 15,000 households in Detroit have had their water cut off. The Detroit Water and Sewage Department has announced plans to shut off up to 3,000 households per month. A recent 15 day moratorium on some shutoffs was announced, but it is temporary and some shutoffs will continue. A human rights complaint has been filed with the United Nations, where a spokesperson noted that, “when there is genuine inability to pay, human rights forbids disconnections.” While residents’ water has been shut off if they owe more than $150, 40 commercial users that owe a total of $9.5 million have not been shut off. For example, the water is still on at a golf course that owes $200,000 and two sports venues that owe $80,000 and $55,000. [3]

Water bills in Detroit have more than doubled in the last 10 years and an 8.7% increase was recently approved. Meanwhile, over 40% of Detroit residents live below the federal poverty line (roughly $20,000 for a family of 3) and unemployment is at record levels.

This country spent hundreds of billions of dollars to bail out huge financial corporations (that had engaged in egregious misconduct) so that they wouldn’t go bankrupt. We should be able to help poor and unemployed residents of Detroit so their water isn’t shut off, to ensure Detroit’s children get a good education, and to provide reasonable cost of living increases for city employees’ pensions. All of this, together, would cost a tiny fraction of the cost of the bank bailout – on the order of $1 for every $1,000 given to the banks.

[1] Clawson, L., 7/18/14, “Detroit schools emergency manager raises class size to emergency levels,” Daily Kos (http://www.dailykos.com/story/2014/07/18/1314775/-Detroit-schools-emergency-manager-raises-class-size-to-emergency-levels)

[2] Daily briefing, 7/22/14, “Detroit retirees agree to pension cuts,” The Boston Globe

[3] Prupis, N., 7/24/14, “Canadian group delivering water to Detroit to protest shutoffs,” Common Dreams (http://www.commondreams.org/news/2014/07/24/canadian-group-delivering-water-detroit-protest-shutoffs)

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

POLITICAL MONEY AND INFLUENCE OF THE WEALTHY GROWS AND GROWS

ABSTRACT: The political money and influence of the wealthy grows and grows. Wealthy donors making large contributions of up to $2,600 directly to Congressional candidates’ campaigns represent the great majority of candidates’ funding. There had been an overall limit of $123,200 on the grand total any individual could contribute in a two-year federal election cycle. However, the Supreme Court just ruled that this limit is an unconstitutional violation of freedom of speech. A wealthy individual can now contribute roughly $3.6 million directly to candidates and parties in every 2-year election cycle. (This is in addition to the unlimited money they can spend on campaign advocacy outside of candidates’ campaign accounts based on the Supreme Court’s Citizens United decision in 2010.)

Furthermore, a donor can gather checks from colleagues and friends and present them to the candidate along with his or her own check. This is a practice known as “bundling.” Often these bundlers pledge to raise $100,000 or more for a candidate.

Candidates spend 30% to 70% of their time raising money. If they can raise money in bigger chunks, they will. Therefore, candidates focus on the few big “funders” of campaigns. These big contributors or bundlers have more than an adequate incentive to contribute because it ensures that candidates hear their particular views and that candidates have an incentive to support big contributors’ views when policy is made.

The result is that our “democracy” is not representing us – the average voter. What we have here in the US is increasingly a plutocracy: government dominated by the small minority that are the wealthiest citizens. Coming up in my next post: strategies for reforming our system of financing campaigns to reclaim our democracy.

FULL POST: The political money and influence of the wealthy grows and grows. Wealthy donors making large contributions of up to $2,600 directly to Congressional candidates’ campaigns represent the great majority of candidates’ funding. Candidates for Congress raise only about 11% of their campaign contributions from donors giving less than $200.

Beyond donations to candidates’ campaigns, wealthy individuals can also give up to $32,400 per year to a national political party. There had been an overall limit of $123,200 on the grand total any individual could contribute in a two-year federal election cycle. However, the Supreme Court just ruled that this limit is an unconstitutional violation of freedom of speech in its McCutcheon decision.

Although the limit on a contribution to any candidate’s campaign or to a party remains (for now, see below), a wealthy individual can now contribute roughly $3.6 million directly to candidates and parties in every 2-year election cycle. [1] Through joint fundraisers and committees, wealthy contributors will now be solicited to write a single check for hundreds of thousands of dollars, if not a million dollars or more. (This is in addition to the unlimited money they can spend on campaign advocacy outside of candidates’ campaign accounts based on the Supreme Court’s Citizens United decision in 2010.)

A court challenge to the contribution limit on donations to party committees has been filed by the Republican National Committee [2] and a challenge to the limit on contributions to individual candidates’ campaigns is likely. If successful, these challenges would allow wealthy individuals, and perhaps corporations, to give unlimited amounts of money directly to political candidates and parties.

Furthermore, a donor can gather checks from colleagues and friends and present them to the candidate along with his or her own check. This is a practice known as “bundling,” and the donor’s sway with the candidate is, of course, enhanced by delivering these large sums to the candidate’s campaign. Often these bundlers pledge to raise $100,000 or more for a candidate – far beyond the individual limit of $2,600.

Imagine you’re a candidate running for political office. You can either try to raise $100,000 from a thousand people in $100 contributions (a big contribution for most people), or you can try to raise $100,000 from 40 wealthy individuals or via one bundler. Candidates spend 30% to 70% of their time raising money. If they can raise money in bigger chunks, they will. Therefore, candidates focus on the few big “funders” of campaigns, because with each big catch they can cover much more of their campaign costs. [3] These big contributors, now more than ever, will be national figures, not ones with any connection to a candidate’s district or state.

Edwin Bender of the National Institute on Money in State Politics notes that “contribution limits play a crucial role in … increasing the participation rate by small-dollar donors.” [4] So as the Supreme Court eliminates contribution limits as unconstitutional limits on freedom of speech, the candidates focus on fewer and fewer donors who contribute larger and larger amounts. These big contributors or bundlers have more than an adequate incentive to contribute because it ensures that candidates hear their particular views – about regulation, government spending, limits on lawsuits, trade, workers’ protections, intellectual property right s, or whatever – and that candidates have an incentive to support big contributors’ views when policy is made.

In a recent study from Princeton (the largest empirical analysis of government policy decision making to-date), Martin Gilens and Benjamin Page conclude that “economic elites and organized groups representing business interests have substantial … impacts on U.S. governmental policy, while average citizens and mass-based interest groups have little or no … influence.” [5]

With candidates dependent on big contributors for the money necessary to run a competitive campaign, it’s not surprising that policies reflect the interests of these contributors and not the average citizen. The result is that our “democracy” is not representing us – the average voter – and therefore is not working as our founders intended. What we have here in the US is increasingly a plutocracy: government dominated by the small minority that are the wealthiest citizens.

Coming up in my next post: strategies for reforming our system of financing campaigns to reclaim our democracy by making our elected officials beholden to us. As a result, they would have incentives to represent us instead of wealthy individuals and corporations.

[1] Lee, C., 5/5/14, “The fatter the wallet, the louder the voice,” Brennan Center for Justice (http://www.brennancenter.org/analysis/fatter-wallet-louder-voice)

[2] Money in Politics Newsletter, 5/29/14, “The aftermath of McCutcheon v. FEC,” Brennan Center for Justice (http://www.brennancenter.org/newsletter/money-politics-newsletter-mccutcheons-aftermath-primary-fundraising)

[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

[4] Bender, E., 5/13/13, “Evidencing a republican form of government: The influence of campaign money on state-level elections,” Montana Law Review (http://www.followthemoney.org/press/Reports/Evidencing_a_Republican_Form_of_Government.pdf)

[5] Gilens, M., & Page, B., 4/9/14, “Testing theories of American politics: Elites, interest groups, and average citizens,” (http://www.princeton.edu/~mgilens/Gilens%20homepage%20materials/Gilens%20and%20Page/Gilens%20and%20Page%202014-Testing%20Theories%203-7-14.pdf)

INEQUALITY IS NOT INEVITABLE

ABSTRACT: “Inequality is not inevitable” is the title of a recent piece in the New York Times by Joseph Stiglitz. Our current levels of inequality – and the undermining of the middle class – are the result of policies and politics, not a fundamental feature of capitalism. One example is the recent bailout of the large bank and financial corporations with hundreds of billions of taxpayers’ dollars while only a pittance went to homeowners and other victims of these corporations’ predatory lending.

True economic success is measured by how well the typical citizen is doing, especially in America, which claims to be the bastion of equal opportunity. But here in the US, the typical worker’s income is lower today than it was 25 years ago.

There are policy solutions that will simultaneously strengthen our economy, address the federal government’s budget deficit and debt issues, tackle our infrastructure needs, and reduce inequality. Tax reform is a core ingredient of these policy changes. (See details below.) It and other policies that can and should be changed will reduce inequality, improve our economy, and address other important issues.

FULL POST: “Inequality is not inevitable” is the title of a recent piece in the New York Times by Joseph Stiglitz, [1] a Nobel prize-winning economist. It is the final piece of a New York Times series on inequality entitled “The Great Divide.” [2] The series presents a wide range of examples that demonstrate that our current levels of inequality – and the undermining of the middle class – are the result of policies and politics, not a fundamental feature of capitalism. Other countries’ economies are performing as well or better than ours with far greater equality.

Policies that have increased inequality and weakened the middle class include the recent bailout of the large bank and financial corporations with hundreds of billions of taxpayers’ dollars while only a pittance went to homeowners and other victims of these corporations’ predatory lending. More help for homeowners and the unemployed would have helped the economy recover more quickly and vigorously. We also allow corporate monopolies and near monopolies to exist and make huge profits while they ship jobs and profits overseas, avoiding paying US taxes.

Our campaign finance laws allow economic inequality to lead to political inequality by letting the wealthy buy political influence. And political inequality increases economic inequality in a vicious cycle: politicians increase corporate welfare and give the rich tax cuts while cutting support for middle class workers and the poor. The wealthy corporations and individuals increase their wealth, not by working harder or being smarter, but by manipulating the rules of our economic and political systems. As a result, for example, corporate income taxes have declined as a portion of the federal government’s revenue from 39.8% in 1943 to 9.9% in 2012. Furthermore, Wall St. corporations and executives were not brought to justice for their criminal behavior that led to the economic collapse, or even for their abuse of our legal system in foreclosing on and evicting homeowners, inappropriately, fraudulently, and sometimes in total error.

True economic success is measured by how well the typical citizen is doing, especially in America, which claims to be the bastion of equal opportunity. But here in the US, the typical worker’s income is lower today than it was 25 years ago. And the life prospects of our children are determined more by the income and education of their parents than they used to be, and more than they are in other advanced countries. The tremendous growth in income and wealth of the top 1% in the US has not trickled down, it has evaporated, often in Caribbean and other tax havens. [3] There is compelling evidence that the current level of inequality in the US is weakening our economy and our social cohesion.

There are policy solutions that will simultaneously strengthen our economy, address the federal government’s budget deficit and debt issues, tackle our infrastructure needs, and reduce inequality. We can improve economic growth, promote economic efficiency, and reduce unemployment through changes in our tax system. Tax reform is a core ingredient of the policy changes needed to reduce inequality. Such tax reform includes: [4]

Reducing incentives and opportunities for corporations and wealthy individuals to avoid paying taxes
Increasing the top marginal income tax rates and reducing preferential treatment of unearned income, such as capital gains and dividends
Reforming corporate taxation to incentivize investing in the US (rather than overseas) and to close loopholes that are essentially corporate welfare
Taxing too-big-too-fail financial institutions to create a rescue fund (for future, probably inevitable bailouts) and to provide a disincentive for unlimited corporate growth and for speculative, highly leveraged financial activities that increase the likelihood of a bailout
Implementing a financial transaction tax to provide a disincentive for unproductive and sometimes harmful financial speculation and activity, such as high volume, high speed, computer-driven trading
Reforming the estate and inheritance tax to improve economic efficiency and fairness
Taxing pollution and other negative environmental effects
Ensuring the government gets full value when it sells public assets, such as natural resources like oil and gas

Tax reform is not an end in itself. The objective is to create a more efficient tax system, while simultaneously producing higher employment and economic growth, reducing inequality and environmental harm, and enhancing the efficiency of our economy.

Inequality is the result of tax and other policies that can and should be changed. Moreover, well-designed changes that address inequality will simultaneously improve our economy and address other important issues.

[1] Stiglitz, J., 6/29/14, “Inequality is not inevitable,” The New York Times

[2] See a listing and abstracts of The Great Divide series at http://opinionator.blogs.nytimes.com/category/the-great-divide/?module=BlogCategory&version=Blog Post&action=Click&contentCollection=Opinion&pgtype=Blogs&region=Header

[3] Stiglitz, J. 6/29/14, see above

[4] Stiglitz, J., 5/28/14, “Reforming taxation to promote growth and equity,” The Roosevelt Institute, http://rooseveltinstitute.org/sites/all/files/Stiglitz_Reforming_Taxation_White_Paper_Roosevelt_Institute.pdf

THE RISE OF SUPER PACs AND THE DEMISE OF DEMOCRACY

ABSTRACT: The rise of Super PACs (Political Action Committees) in the last four years and their ability, along with that of wealthy individuals and organizations, to spend unlimited amounts of money in US political campaigns are dramatically reshaping our politics. This is a new version of a very old game – pay to play – where private interests buy access and influence in our political system and policy making. As a result, independent spending – spending on political campaigns separate from and independent (theoretically) of the candidates’ campaign committees themselves – skyrocketed in the 2010 and 2012 election cycles to over $400 million, ten times its level in 2008.

In the two-year 2012 election cycle, 132 wealthy Americans provided 60 percent of the Super PAC money raised. Super PACs have become the primary vehicle through which the wealthy elite exert political influence that overwhelms the common good and the voice of the vast majority of the people. Super PACS are just the latest, but certainly the most toxic, in a trend of increasing spending and influence by wealthy special interests in our political system.

FULL POST: The rise of Super PACs (Political Action Committees) in the last four years and their ability, along with that of wealthy individuals and organizations, to spend unlimited amounts of money in US political campaigns are dramatically reshaping our politics. This is a new version of a very old game – pay to play – where private interests buy access and influence in our political system and policy making. [1]

First, a little historical background on the rise of political spending and influence by wealthy individuals and corporations. In 1976, the Supreme Court (in the Buckley vs. Valeo decision) declared that the First Amendment gave rich people the right to spend unlimited amounts of money to influence political elections – so long as that influence was “independent” of a political campaign. It also allowed them to spend unlimited sums on their own campaigns if they ran for an elected office.

In 2010, the Supreme Court in the Citizens United case gave corporations, unions, and other organizations the same right to spend unlimited money in political campaigns that it had given to rich people. In March, 2010, another court ruled that if rich people could spend as much as they want independently of any political campaign, they should also be free to contribute as much as they want to any independent political action committee. Thus the Super PAC was created – free to accept and spend unlimited amounts of money, so long as it did not coordinate with any candidate’s campaign (at least not openly). As a result, independent spending – spending on political campaigns separate from and independent (theoretically) of the candidates’ campaign committees themselves – skyrocketed in the 2010 and 2012 election cycles to over $400 million, ten times its level in 2008.

In the two-year 2012 election cycle, 132 wealthy Americans provided 60 percent of the Super PAC money raised. That number will go up in 2014. If it goes up to say 3,000, the funders of these Super PACs will still represent only a tiny minority of the 300 million Americans.

Super PACs have become the primary vehicle through which the wealthy elite exert political influence that overwhelms the common good and the voice of the vast majority of the people. That’s the “democracy” we have now – a political system that has corrupted the intended representative democracy spelled out in our Constitution, Bill of Rights, and Declaration of Independence.

Super PACS are just the latest, but certainly the most toxic, in a trend of increasing spending and influence by wealthy special interests in our political system. As they learn to effectively coordinate campaigns without technically coordinating (because that would be illegal), they are becoming a critical component of any effective political campaign. Candidates quickly learn the dance that assures that funding gets directed to the Super PACs that support them. However, there is, in effect, no accountability for the statements or actions of these Super PACs, as the candidates can claim a lack of knowledge and control of their actions.

The single greatest fear of any candidate, particularly any incumbent, is that thirty days before an election, some anonymously-funded Super PAC will spend $1 million against him or her. Therefore, candidates work to ensure that a Super PAC will be there to support them if needed. Candidates will position themselves as the kind of elected official a Super PAC wants to support and protect from a last minute assault.

My next post will discuss the growing presence of secret donors and “dark” money in our political campaigns because of Super PACs that do not disclose their donors. I’ll also review the increasing ability of wealthy donors to contribute large sums directly to candidates’ campaigns and the impact that all of this big money in our politics has on who runs for office. Then, I’ll present solutions to this corruption of our democracy, in addition to the MAYDAY Super PAC strategy, which I described in my previous post on 6/10/14.

[1] 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, in large part, a summarized excerpt from this article.)

What liberal media? Part 2

ABSTRACT: The conventional wisdom is that the mainstream media has a liberal slant. Here’s part 2 of my refutation of the liberal media myth based on the information that we do NOT receive from it. There’s been little mainstream media coverage of gerrymandering, obstructionism in Congress, Supreme Court decisions that favor the wealthy and corporations, our growing and disproportionately minority prison population, our inefficient health care system, and the consolidation of the mainstream media into six huge corporations.

Our mainstream, corporate media are for-profit corporations, focused on selling advertising and making a profit by reporting the sensational and the titillating, rather than stories of substance and significance. Where’s the coverage of what truly ails our economy and our country? Where are the stories about how, by working together, we can address important issues? That’s what a truly liberal media would cover and I don’t see much of it in our mainstream media. My blog is designed to fill that gap for those of you who don’t have the time to peruse other sources of information.

FULL POST: The conventional wisdom is that the mainstream media has a liberal slant, despite the fact that it is owned by large corporations. Here’s part 2 of my refutation of the liberal media myth based on the information that we do NOT receive from it. I don’t believe we get the information we need to be informed citizens and voters from the mainstream media. My blog is designed to fill that gap for those of you who don’t have the time to peruse other sources of information.

This post is a continuation of my summary of a listing of issues that the supposedly “liberal” media have barely covered based on a recent article on Daily Kos (http://www.dailykos.com) entitled “15 things everyone would know if there were a liberal media.” [1]

The manipulation of the boundaries of US House members’ districts to gain political advantage is called gerrymandering. While not a new phenomenon, it has been carried to a new extreme in the last 25 years. It is a significant contributor to the gridlock in Congress. You probably haven’t heard much about this except in my recent blog post: https://lippittpolicyandpolitics.org/2014/03/09/government-gridlock-and-gerrymandering/.
Speaking of gridlock in Congress, you probably haven’t read a lot about the number of bills, judges, and executive branch positions that Congressional Republicans have blocked. For my blog’s coverage of this, see, for example, https://lippittpolicyandpolitics.org/2013/10/17/republican-sabotage/.
Supreme Court decisions allow wealthy individuals and organizations, primarily corporations, to spend unlimited sums in our political campaigns. The Citizens’ United decision in 2010 and the McCutcheon decision in early April give wealthy individuals and organizations bullhorns for political speech and contributions, drowning out the voices of average citizens. For information on this issue, see, for example, https://lippittpolicyandpolitics.org/2014/02/28/how-money-is-corrupting-our-politics/.
The number of people in our prisons has grown dramatically with significant over-representation of minorities. With 2.3 million Americans in prison, we have more people incarcerated than any other country, including China which has 4 times our population but only two-thirds as many prisoners. With 5% of the world’s population, we have 25% of the world’s prisoners. The US prison population is roughly 5 times what it was in 1980, despite falling crime rates. For-profit prison corporations are one interest group that has pushed for increased incarceration. Blacks are 39% of the prison population but less than 14% of the overall population.
US health care costs are the highest in the world, while our health outcomes are among the worst. The US spends $8,233 per person on health care while Norway, with the second highest health care costs, spends $5,388. We spend 17.6% of GDP (our total economy) on health care while the Netherlands, in second place, spends 12%. For more information, see: https://lippittpolicyandpolitics.org/2011/12/09/medicare-and-medicaid-and-our-health-care-system/.
Exploiting racial and ethnic prejudices, albeit somewhat subtly, has become standard fare for some political campaigns. Built on the concepts of Nixon’s Southern strategy from the 1960s, some people refer to the current version as “dog whistle” politics, because only those sensitized to it, sometimes subconsciously, hear it. For more detail, see Bill Moyers’ website at: http://billmoyers.com/episode/ian-haney-lopez-on-the-dog-whistle-politics-of-race/.
Bees may well be the “canary in the coal mine” for the dangers of high tech, high pesticide agriculture. Bees, which are needed to pollinate much of our food supply, are dying in huge numbers. For information on this, see my blog post: https://lippittpolicyandpolitics.org/2013/08/10/banning-bee-killing-pesticides/.
There’s been a tremendous consolidation in the media industry. Six huge corporations now control roughly 90% of the media in the US: Time Warner, Disney, News Corporation (Fox), Viacom, Comcast, and CBS. This corporate consolidation and lack of competition are reasons our news coverage is narrow and not liberal. It’s ironic that as our “news” becomes more and more infotainment, we get some of our best news and analysis from our entertainers, such as Jon Stewart and Stephen Colbert.

Our mainstream, corporate media don’t have a commitment to providing the information needed to have the informed citizenry that a democracy requires. They are for-profit corporations, focused on selling advertising and making a profit by reporting the sensational and the titillating (e.g., scandals, tragedy, crime, celebrities, disasters, and the like), rather than stories of substance and significance. In-depth information, investigative journalism, and analysis, the things a truly “liberal” media would cover, are sorely lacking. Where’s the coverage of what truly ails our economy and our country? Where are the stories about how, by working together, we can address important issues? That’s what a truly liberal media would cover and I don’t see much of it in our mainstream media.

[1] Akadjian, 8/7/13, “15 things everyone would know if there were a liberal media,” Daily Kos http://www.dailykos.com/story/2013/08/07/1229087/-15-things-everyone-would-know-if-there-were-a-liberal-media?detail=email

What liberal media?

ABSTRACT: The conventional wisdom is that the mainstream media has a liberal slant. The best refutation of the liberal media myth is the information that we do NOT receive. There’s been little mainstream media coverage of corporation-friendly “trade” agreements, outsourcing and downgrading of jobs, growing inequality of income and wealth, the power of corporations in our supposedly democratic process, the out-of-control financial industry, and the undermining of the middle class. My blog is designed to fill that gap for those of you who don’t have the time to peruse other sources of information.

FULL POST: The conventional wisdom is that the mainstream media has a liberal slant, despite the fact that it is owned by large corporations. The best refutation of the liberal media myth is the information that we do NOT receive. I don’t believe we get the information we need to be informed citizens and voters in the mainstream media. My blog is designed to fill that gap for those of you who don’t have the time to peruse other sources of information.

My favorite examples of information NOT provided by the mainstream media are the Trans-Pacific Partnership “trade” agreement and Trans-Atlantic Free Trade Agreement along with the President’s effort to have them considered under a Fast Track process in Congress. These “trade” agreements, which are more about economic, regulatory, and legal issues than trade, will benefit multi-national corporations at the expense of US workers, consumers, and citizens. These agreements will hurt local businesses, the middle class, our health, and our national sovereignty. Nonetheless, there has been very little coverage of them in the mainstream media. You can read about this in my blog. See, for example: https://lippittpolicyandpolitics.org/2014/01/20/history-and-leaks-make-case-against-trade-treaties/.

There was a nice listing of other issues that the supposedly “liberal” media have barely covered in a recent article on Daily Kos (www.dailykos.com) entitled “15 things everyone would know if there were a liberal media.” [1]

Here’s a partial summary:

Jobs, especially good, middle class jobs, have been outsourced or converted to temporary or part-time jobs. The result is high unemployment (despite an economic recovery) and stagnant wages. Since 2000, US multinational corporations have cut 2.9 million jobs in the US while increasing overseas employment by 2.4 million. And the number of temporary and contract workers is growing rapidly. They now represent 12% of the workforce. They typically have no job security, receive no benefits (such as health insurance or retirement), and often receive low pay. There’s been little coverage of this in the mainstream media but my blog has covered it: https://lippittpolicyandpolitics.org/2013/09/02/labor-day-and-the-middle-class/.
Inequality of income and wealth has grown dramatically in the last 30 years. The wealthiest 1% of Americans own over a third of all the wealth in the US. These 3 million individuals have almost 3 times as much combined wealth as all of the 240 million individuals who make up the least wealthy 80% of Americans. See my blog for more detail. For example: https://lippittpolicyandpolitics.org/2013/11/06/us-capitalism-is-out-of-control/.
The tax cuts and loopholes instituted in the last 30 years have provided huge benefits to the wealthy, increasing inequality. Cuts in income tax rates, special low rates on investment income, reductions in the estate tax, loopholes for off-shore investments, and other tax laws disproportionately benefit the well-off and shift the tax burden to the middle class. They also reduce government revenue, which leads to cuts in services and programs that help the middle and working class. See my blog post on how income tax rates have changed over the last 35 years: https://lippittpolicyandpolitics.org/2011/11/27/income-tax-rates-an-historical-perspective/.
Large corporations through lobbying, campaign spending, and organizations like The American Legislative Exchange Council (ALEC) have bent our governments, including tax policy and regulation, in their favor. ALEC is a corporate sponsored-organization that drafts laws for consideration by state legislatures. It then finds friendly legislators in multiple states whom it works with to promote these corporate-friendly proposals such as public education privatization, anti-worker laws, laws to promote gun sales, laws to block regulation of corporation behavior and products, including environmental, health, safety, intellectual property, finance, and other regulations. For more information, see Bill Moyers’ website at: http://billmoyers.com/spotlight/eye-on-alec/.
At the federal level, for 66 years the Glass-Steagall law kept risky financial investing by Wall St. corporations separated from government-insured deposits. Based on a multi-year, concerted campaign by Wall St., that law was relaxed and eventually repealed. As a result, a series of financial crises occurred, capped by the great crash of 2008. We haven’t heard much from the mainstream media about this pattern of deregulation and financial crises, or Wall Street’s continuing fight to avoid regulation. My blog has covered this multiple times. See, for example: https://lippittpolicyandpolitics.org/2012/03/25/the-2008-financial-collapse-context-and-follow-up/. I’ve also blogged on the minimal penalties on the financial corporations and their executives for their illegal and unethical behavior. See, for example: https://lippittpolicyandpolitics.org/2014/02/06/weak-penalties-for-financial-corporations-misbehavior/. In general, see my blog category “The banks & the financial system.”

More examples of what you do NOT learn about from the mainstream media will be in my next post.

GOVERNMENT GRIDLOCK AND GERRYMANDERING

ABSTRACT: The gridlock in Congress is caused by hyper-partisanship and by the extreme views and tactics of some Representatives and Senators. There are four major reasons for it. I will address each of these in upcoming posts, starting with gerrymandering in this post.

Every 10 years, the boundaries of the Congressional Districts (CDs) for US House members are redrawn to reflect shifts in population. The CD boundaries are typically determined by state legislatures. The opportunity to draw the boundaries to achieve political goals has been irresistible. This process of drawing election districts to gain political advantage often ends up creating oddly shaped districts. This is referred to as “gerrymandering.” Because of growing partisanship and improved geographical computer capabilities over the last two decades, gerrymandering after the 2000 and 2010 Censuses was taken to a new level. As a result, in the 2012 Congressional election, Democratic House candidates nationwide received 1.4 million more votes than Republican candidates but won only 201 seats in the House to the Republicans’ 234.

Gerrymandering produces “safe” districts – ones where the party that will win the election is known in advance. Competition between the parties, which tends to push both party’s candidates’ policy positions to the center in the interest of being competitive, is increasingly rare. Candidates from the ideological extremes are encouraged and it is hard to hold elected officials accountable to the voters, as opposed to special interests, especially ones with money, because a candidate’s party affiliation virtually guarantees election.

One solution to gerrymandering, is to have independent, non-partisan commissions perform re-districting after the decennial Census. Six states have created such commissions; several others are considering doing so.

Gerrymandering, in effect, allows politicians to choose their voters rather than voters choosing their politicians. It produces elected officials who are at ideological extremes and who will use extreme legislative tactics that cause gridlock. Ultimately, only the voters can stop gerrymandering and restore truly democratic elections, which are necessary for our democratic system, including Congress, to work.

FULL POST: The gridlock in Congress is caused by hyper-partisanship and by the extreme views and tactics of some Representatives and Senators. Many political scientists and others feel that this gridlock is a real crisis for American democracy. The last two sessions of Congress (2011-12 and 2013-14) have been the least productive since 1948 when such measurement was begun. There are four major reasons for the gridlock:

Gerrymandered Congressional Districts
The process for nominating and selecting candidates
Low voter participation
The huge and growing amounts of money in our political campaigns

I will address each of these in upcoming posts, providing background on them, their effects, and solutions for them. I start with gerrymandering in this post.

Every 10 years, the boundaries of the Congressional Districts (CDs) for US House members are redrawn to reflect shifts in population as measured by the decennial Census. The required goal is that each CD must have roughly the same number of residents.

The CD boundaries are typically determined by state legislatures, i.e., politicians in a political body. The opportunity to draw the boundaries to achieve political goals has been irresistible. Usually, the political goal is to benefit one of the political parties, although it can also be to produce a CD that enhances the likelihood of a specific individual winning, usually an incumbent up for re-election. The typical tactics are to spread opposition voters across multiple districts where they are in a clear minority to minimize their influence or, when necessary, to lump as many of them as possible into one or a few districts that are conceded to the opposition, preserving as many CDs as possible for the favored party.

This process of drawing election districts to gain political advantage often ends up creating oddly shaped districts, rather than compact districts (i.e., ones that are roughly circular or square) or ones that follow the boundaries of existing towns, cities, or counties. This is referred to as “gerrymandering.” The term “gerrymander” was created in reaction to a redrawing of Massachusetts state senate districts under the then-governor Elbridge Gerry in 1812. Governor Gerry signed a bill that redistricted Massachusetts to benefit his Democratic-Republican Party over the Federalists. The shape of one of the contorted districts on a map was said to resemble the shape of a salamander. Hence, the term “Gerry-mander” as it was originally written. [1]

Because of growing partisanship and improved geographical computer capabilities over the last two decades, gerrymandering after the 2000 and 2010 Censuses was taken to a new extreme. The redistricting that took place after the 2010 Census has been labeled “the most distorted and partisan redistricting in modern times.” [2] Because of the growing number of state legislatures and governorships in the hands of the Republican Party over this period, the increased gerrymandering has, at a national level, mainly benefited Republicans.

As a result, in the 2012 Congressional election, Democratic House candidates nationwide received 1.4 million more votes than Republican candidates but won only 201 seats in the House to the Republicans’ 234. Here are some examples of states where Democratic presidential candidate Obama won but most of the House seats were won by Republicans and the percentage of House seats won was at least 20% higher than the percentage of the vote received by the Republican presidential candidate Romney:

Ohio: Republicans won 75% of House seats (12 of 16), Romney won 48% of the vote
Virginia: Republicans won 73% of House seats (8 of 11), Romney won 47% of the vote
Pennsylvania: Republicans won 72% of House seats (13 of 18), Romney won 48% of the vote

Gerrymandering produces “safe” districts – ones where the party that will win the election is known in advance. Competition between the parties, which tends to push both party’s candidates’ policy positions to the center in the interest of being competitive, is increasingly rare. Therefore, voters’ choices are reduced and the party primaries becomes the real election. Candidates from the ideological extremes are encouraged because competition from the other party is rare and in primaries, where voter participation is often quite low, mobilizing highly motivated voters with extreme views is often the easiest way to win. And money has a bigger impact in these small, less publicized primaries.

Given the lack of competition between the parties, it is hard to hold elected officials accountable to the voters, as opposed to special interests, especially ones with money, because a candidate’s party affiliation virtually guarantees election. The weakened, typically emasculated, opposition party can’t serve as a check and balance. [3] As a result of gerrymandering, it is estimated that only 35 of the 435 House seats will have a competitive, inter-party race in 2014. Therefore, there is little to deter highly partisan and extreme behavior in Congress. [4][5]

Candidates or elected officials who personally may hold moderate views are pushed to express opinions in public and cast votes in Congress at the extremes because of the threat that their party’s primary election represents. [6] Even House Speaker Boehner and Senate Minority Leader McConnell are afraid to take moderate positions or actions because of the possibility of far right challengers in their re-election primaries.

One solution to gerrymandering, is to have independent, non-partisan commissions perform re-districting after each Census. Iowa, California, Arizona, and 3 other states have created such commissions. Several other states are considering doing so. [7]

Iowa’s non-partisan redistricting process was created in 1980. Three bureaucrats, who sequester themselves for 45 days after the Census data is available, redraw Iowa’s four Congressional Districts. They are not allowed to consider voters’ party affiliation, previous election results, or the addresses of current members of Congress, or to have any contact with any politician. The goals for the districts, other than equal population, are compactness and respect for existing county boundaries. The result has been some of the country’s most competitive races for the US House and candidates who focus on representing the people of the district, not some ideology or party. [8]

Congress could pass legislation to require states to create independent redistricting commissions, but there is no sign of a sufficiently powerful grassroots movement to force such an action, which would require Congress to act against its own perceived interests. [9]

Gerrymandering, in effect, allows politicians to choose their voters rather than voters choosing their politicians. [10] It produces elected officials who are at ideological extremes and who will use extreme legislative tactics that cause gridlock. Ultimately, only the voters can stop gerrymandering and restore truly democratic elections, which are necessary for our democratic system, including Congress, to work.

[1] Wikipedia, retrieved 3/3/14, “Gerrymandering,” http://en.wikipedia.org/wiki/Gerrymandering

[2] Drew, E., 9/26/13, “The stranglehold on our politics,” The New York Review of Books

[3] Rapoport, A., Nov. / Dec. 2013, “Fifty shades of purple,” The American Prospect

[4] Drew, E., 9/26/13, see above

[5] Potomac Chronicle, Dec. 2013, “Angry about partisan gridlock in Washington? Blame the states,” Governing http://www.governing.com/columns/potomac-chronicle/gov-redistricting-gone-mad.html

[6] Stockman, F., 10/8/13, “Shutdown: Join the club,” The Boston Globe

[7] Potomac Chronicle, Dec. 2013, see above

[8] Jan, T., 12/8/13, “Iowa keeping partisanship off the map,” The Boston Globe

[9] Drew, E., 9/26/13, see above

[10] Fair Vote, retrieved 3/2/14, “Redistricting,” The Center for Voting and Democracy, http://www.fairvote.org/research-and-analysis/redistricting/

HOW MONEY IS CORRUPTING OUR POLITICS

ABSTRACT: Huge contributions and expenditures from wealthy special interests were front and center in the 2012 campaigns because of the unlimited spending allowed by the Supreme Court’s Citizens United decision. The 32 biggest donors to Super PACs spent as much money as the total of all the donations by the 3.7 million Americans who made small donations to the Obama or Romney campaigns.

The Open Secrets project of the Center for Responsive Politics (http://www.opensecrets.org/) investigates and reports on money in campaigns. It has now documented a web of over a dozen organizations that transferred money among themselves to hide the true sources of campaign spending, so-called “dark money.” Dark money has been used in state, local, and national campaigns. Adding an international element to the dark money issue, federal prosecutors say a Mexican businessman illegally funneled more than $500,000 into U.S. political races through Super PACs and various shell corporations.

The amounts of money that candidates for Congress have to raise for their campaigns is staggering. A member of the US House needs to raise, on average, $15,000 each and every week; a Senator needs to raise $33,000 every week. Time spent fundraising is time that doesn’t get spent working on legislation or listening to and representing average constituents.

The dominance of money in campaigns, and of wealthy special interests in providing this money, skews the priorities and policy positions of elected officials. It corrupts the making of public policy. Reforms of our campaign finance system are needed and can be done now (within the context of the Supreme Court’s rulings) that:

Amplify the voices of average citizens and their small contributions to campaigns,
Require timely reporting of all campaign spending and contributions, and
Severely limit political activity by tax exempt organizations.

FULL POST: Huge contributions and expenditures from wealthy special interests were front and center in the 2012 campaigns because of the unlimited spending allowed by the Supreme Court’s Citizens United decision. Private watchdog groups are continuing to trace and expose the sources and convoluted paths of money going from wealthy donors to campaign spending. This both exposes the donors (who often wish to remain secret) and illustrates the need for reform. Here are a few examples of their extensive findings.

The 32 biggest donors to Super PACs spent as much money as the total of all the donations by the 3.7 million Americans who made small donations to the Obama or Romney campaigns. [1] The two Koch brothers, billionaires due to their oil and industrial corporations, spent at least $400 million on campaigns in 2012, which is more than John McCain’s entire presidential campaign spent in 2008. [2] And fewer than 300,000 individuals (one-tenth of one percent of the 300 million Americans) provided the majority, roughly 60%, of the money raised by Congressional candidates from individuals. [3]

The Open Secrets project of the Center for Responsive Politics (http://www.opensecrets.org/) investigates and reports on money in campaigns. It has been digging into the money spent in the 2012 campaigns by Super PACs and social welfare groups (tax exempt 501(c)(4) organizations). It has now documented a web of over a dozen organizations that transferred money among themselves 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. It has also documented that at least one quarter of the so-called “dark money” – money where the source was hidden – was linked to the two Koch brothers. [4]

Dark money was used in state as well as national campaigns. In California, an $11 million campaign contribution of dark money by a non-profit, tax exempt organization opposing a tax increase sparked an inquiry by the state’s Fair Political Practices Commission and a grand jury investigation into violations of campaign finance laws and money laundering. A judge forced the Americans for Responsible Leadership, the apparent source of the contribution, to reveal the original source of the money. The money had come from the Center to Protect Patient Rights, another Arizona non-profit, which received the money from Americans for Job Security, a Virginia non-profit. Both of these organizations are connected to the Koch brothers’ political money network. The organizations have agreed to disgorge the $11 million contribution and pay a record $1 million fine. The investigation also uncovered a separate $4.1 million illegal contribution that now will also be disgorged. California is working to improve disclosure of campaign contributions and strengthen laws and regulations to stop dark money activity. [5]

Dark money has arrived at the local level as well. In the recent Boston mayoral election, organizations independent of the candidates’ campaigns spent over $3.8 million, much of it dark money. This spending had a significant impact as it was more than two-thirds as much as the campaigns of the two finalists spent on their own ($5.4 million). As a result, Massachusetts elected officials are working on laws that would tighten regulation of campaign spending, and, in particular, require disclosure of all donors promptly, before the election, so voters would know who was responsible for the spending. [6][7]

Adding an international element to the dark money issue, federal prosecutors say a Mexican businessman illegally funneled more than $500,000 into U.S. political races through Super PACs and various shell corporations. This is the first known instance of a foreign national exploiting the Supreme Court’s Citizens United decision to spend money on U.S. elections. The allegations surrounding Jose Susumo Azano Matsura, the owner of multiple construction companies in Mexico, include bankrolling a handful of southern California candidates. The scandal involves a U.S. congressman, a Washington, D.C.-based campaign firm, and the consequences of the Citizens United decision. That decision, which gives corporations the right to funnel donations to US candidates, allowed Matsura to obscure the true source of the donations and, therefore, the citizenship of the donor. [8]

The amounts of money that candidates for Congress have to raise for their campaigns is staggering. In 2012, the average cost of a wining campaign for the House was over $1.6 million and over $10.4 million for the Senate. That means that a member of the House, who runs for re-election every two years, needs to raise, on average, $15,000 each and every week. And a Senator needs to raise, on average, $33,000 every week. Newly elected members of Congress are typically told to spend four hours each day raising money. Time spent fundraising is time that doesn’t get spent working on legislation or listening to and representing average constituents. [9]

The dominance of money in campaigns, and of wealthy special interests in providing this money, skews the priorities and policy positions of members of Congress, and other elected officials, to favor the wealthy and special interests over the common good. In other words, it corrupts the making of public policy. Democracy – government of, by, and for the people – is perverted by the current role of money in our political system, where big money drowns out the voices and overwhelms the interests of average citizens.

Reforms of our campaign finance system are needed and can be done now (within the context of the Supreme Court’s rulings) that:

Amplify the voices of average citizens and their small contributions to campaigns;
Require timely reporting of all campaign spending and contributions (including bundling), so that voters know before they vote where the money is coming from;
Limit contributions that elected officials can receive from interests they oversee, from political committees, and from lobbyists;
Prohibit fundraising by elected officials during normal working hours;
Severely limit political activity by tax exempt organizations and require them to report donors; and
Improve enforcement of existing campaign finance laws.

[1] U.S. PIRG, 2/5/14, “US PIRG applauds the introduction of the Government by the People Act,” U.S. PIRG

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

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

[4] 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)

[5] Blumenthal, P., 10/24/13, “California settles ‘dark money’ case,” The Huffington Post

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

[7] Levenson, M., 11/12/13, “Bill would order fast disclosure of donors,” The Boston Globe

[8] ManfromMiddletown, 2/13/14, “This is how Citizens United dies,” Daily Kos (http://www.dailykos.com/story/2014/02/13/1277252/-This-is-How-Citizens-United-Dies#)

[9] Jan, T., 5/12/13, “They go to lead, but courting cash is now job 1,” The Boston Globe

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/).

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

THE IGNORED DEFICIT IN PUBLIC GOODS

ABSTRACT: The federal government’s budget deficit is getting more attention than it deserves. It is half of what it was in 2009 and is at what economists consider a manageable level. Meanwhile, our deficit in investments in public goods is being almost totally ignored. Public goods are things of value to society but in which individuals, businesses, and other private organizations don’t and won’t invest.

These public goods are essential to a prosperous society. However, the US has been under-investing in public goods for decades. The paradox of public goods is that they are forgotten, unacknowledged, and in effect invisible when they are readily available.

Government spending on public goods has been in a relatively steep decline since the 2008 economic crash. And for the 30 years before that the investment in public goods had been in a slow decline.

Those opposed to a robust government, ideologically or due to self-interest, have engaged in an active campaign to get the public to forget the personal and societal benefits they receive from government. A discussion about public goods is largely missing from our media and society.

We need to correct this omission in our discourse and our investment in order to have a prosperous society. Without necessary public goods, we cannot maintain our health and productivity as individuals; nor will we be able to maintain the health and productivity of our businesses and ultimately those of our economy and society.

FULL POST: The federal government’s budget deficit is getting more attention than it deserves. It is half of what it was in 2009 and is at what economists consider a manageable level. (See post of 4/6/13. [1]) Meanwhile, our deficit in investments in public goods is being almost totally ignored.

Public goods are things of value to society but in which individuals, businesses, and other private organizations don’t and won’t invest. Public goods provide public benefits and require collective efforts and responsibility. Therefore, the public sector, namely government, must take responsibility for them. Children’s education, from birth through high school and beyond, is a classic example. Transportation infrastructure is another, including roads, railroads, bridges, airports, and ports. Other examples include parks, libraries, scientific research, public and individual health (including healthy air and water), and public safety (including safe communities, workplaces, homes, food, and medicine). A large, thriving, economically solid middle class may be the ultimate public good.

These public goods are essential to a prosperous society. [2] However, the US has been under-investing in public goods for decades. Part of the reason for this is that when they are present and functioning effectively, we forget about them – they are out of sight and out of mind. This is the paradox of public goods: they are unacknowledged and in effect invisible when they are readily available. We forget that there was a need or problem that has been addressed. Or we don’t realize that a problem, such as polluted drinking water, could occur if we don’t invest in protective and preventive measures. We forget that public expenditures by government were what met the need, maintain the solution, and prevent problems. [3]

However, here in the US, we are beginning to notice our public goods deficit. We’ve had bridges collapse or be closed because they are unsafe. Many of our school buildings are old, out-of-date, and in some cases unsafe. Students are leaving college with huge debts. Local governments are cutting police, fire, and school personnel. Our middle class and its economic security is dwindling. And so on.

Government spending on public goods has been in a relatively steep decline since the 2008 economic crash. And for the 30 years before that the investment in public goods had been in a slow decline. Economist John Kenneth Galbraith warned us way back in the 1950s that improper government budget priorities could lead to “private opulence and public squalor.”

In addition to the invisibility of public goods, those opposed to a robust government, ideologically or due to self-interest, have engaged in an active campaign to get the public to forget the personal and societal benefits they receive from government spending and actions. They have explicitly labeled government as the problem not a solution to problems. In fact, a survey of the public found that 94% of those who reported never receiving a benefit from a government program had indeed received benefits from one or more government programs and on average from four programs. [4]

A discussion about public goods is largely missing from our media and society. The notion of air, water, parks, and so forth, as shared public goods that require and deserve public investment is mostly missing from public consciousness. Our discussion of the production of wealth and goods by the private sector is robust, but the discussion is atrophied in terms of the role of the public sector and of the public goods that it produces, maintains, and protects.

We need to correct this omission in our discourse and our public spending in order to have a prosperous society. Without necessary public goods, we cannot maintain our health and productivity as individuals; nor will we be able to maintain the health and productivity of our businesses and ultimately those of our economy and society.

[1] The shrinking deficit at https://lippittpolicyandpolitics.org/2013/04/06/the-shrinking-deficit/.

[2] Hacker, J.S., & Loewentheil, N., 2012, “Prosperity economics: Building an economy for all,” Prosperity for All (http://www.prosperityforamerica.org/wp-content/uploads/2012/09/prosperity-for-all.pdf)

[3] Derber, C., & Sekera, J., 1/22/14, “An invisible crisis: We are suffering from a mushrooming public goods deficit,” The Boston Globe

[4] Mettler, S., 9/19/11, “Our hidden government benefits,” 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.

[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

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.

US CAPITALISM IS OUT OF CONTROL

ABSTRACT: Of all the developed countries, the United States has the most unequal distribution of income and wealth. 1928 and 2007 were the peak years for income and wealth inequality in the US. In the periods leading up to these two peaks, the wealthy invested and speculated in financial markets. Speculative bubbles were created. The middle class saw their incomes stagnate. This led to economic instability, the Great Depression of the 1930s, and the Great Recession of 2008.

So where should we look for an example of greater economic stability and equality? The answer is the United States after World War II from 1946 to 1978. So what do we need to do to return to greater economic stability and equality? We need to keep and encourage the creation of jobs that pay middle class wages and have benefits.

We need to change the rules of our economy so the gains of economic growth are more widely shared. Capitalism needs rules, otherwise it runs out of control. A well-functioning democracy can create and enforce appropriate rules (laws and regulations). But if the democratic process of electing officials and making laws and regulations is corrupted by money and lobbying from wealthy capitalists and their corporations, the appropriate rules won’t be in place and capitalism can run out of control.

Currently, the huge amounts of money being spent by wealthy capitalists and their corporations on elections and lobbying are determining the rules of our economy. Americans are losing faith in our democracy, which is our most precious gift and our most important legacy for future generations. What the powerful moneyed interests would like, is for us all to get so cynical about politics and government that we basically give up. But if we’re mobilized, if we’re energized, if we take citizenship to mean not simply voting, paying taxes, and showing up for jury duty, but actually participating actively and knowledgeably, we can make our democracy – and capitalism – work.

FULL POST: Of all the developed countries, the United States has the most unequal distribution of income and wealth. 1928 and 2007 were the peak years for income and wealth inequality in the US. [1] What happened a year after 1928? The Great Crash. And what happened a year after 2007? Another financial system crash. The parallels are breathtaking if you look at them carefully. [2]

In the periods leading up to these two peaks, the wealthy invested and speculated in financial markets. Both times, speculative bubbles were created. In both periods, the middle class saw their incomes stagnate, so they went deeper and deeper into debt to maintain their living standard, creating a debt bubble. These bubbles and the undermining of the middle class led to economic instability, the Great Depression of the 1930s, and the Great Recession of 2008.

Today, many in the middle class are one crisis away from being poor. If they lose a job, have a health crisis, or have a serious accident, they can find themselves suddenly in need of public assistance, which may be unemployment benefits, food stamps or food pantries, or subsidized health insurance from Medicaid. They may find themselves deep in debt and at risk of losing their home.

We seem to be close to the point where the middle class doesn’t have the purchasing power to keep the economy going and where the majority of people feel like the economic and political systems are rigged against them. There may be a tipping point, where the degree of inequality and economic insecurity actually threaten our economy, our society, and our democracy.

So where should we look for an example of greater economic stability and equality? The answer is the United States in the decades after World War II. From 1946 to 1978, the economy doubled in size, everybody’s income doubled, and inequality was low. Although the top income tax rate was as high as 91% and was never below 70%, we had greater annual economic growth than we’ve had since. With today’s top tax rate under 40%, anybody who says that we have to reduce taxes to foster economic growth, simply doesn’t know our own history.

So what do we need to do to return to greater economic stability and equality? We need to keep and encourage the creation of jobs that pay middle class wages and have benefits. We need to increase the minimum wage and we need to include labor standards in our trade treaties. We need to give workers and the middle class the voice and power to stand up to the wealthy and ensure that our economy works for all people, not just for the 1% at the top. We need to change the rules of our economy so the gains of economic growth are more widely shared. (For more detail see my post of 10/29/13 at https://lippittpolicyandpolitics.org/2013/10/29/lack-of-good-jobs-is-our-most-urgent-problem/. )

The rules of our economy are largely set by the federal government. Capitalism needs rules, otherwise it runs out of control, resulting in financial collapses; air and water that are harmful; cars that are unsafe; drugs and food are tainted; industrial accidents where oil wells blow out, chemical plants explode, and trains crash and burn; and so forth.

A well-functioning democracy can create and enforce appropriate rules (laws and regulations) that balance public safety (including environmental safety) and corporate profitability. But if the democratic process of electing officials and making laws and regulations is corrupted by money and lobbying from wealthy capitalists and their corporations, the appropriate rules won’t be in place and capitalism can run out of control.

Currently, the huge amounts of money being spent by wealthy capitalists and their corporations on elections and lobbying are determining the rules of our economy. They are using their economic power to gain political power. They are using this political power to entrench and enrich themselves economically and politically by obtaining laws and regulations that are tilted to benefit their self-interest. This is not a matter of partisan politics; both Democratic and Republican politicians and policy makers receive the money and do the bidding of these powerful economic elites.

Examples of laws and regulations that are tilted to favor capitalist interests include individual and corporate tax laws; bankruptcy laws; antitrust laws and enforcement; intellectual property laws on copyrights, patents, and trademarks; health and safety laws; campaign finance laws; laws and regulations for the financial industry; and priorities for government spending.

Americans are losing faith in our democracy, which is our most precious gift and our most important legacy for future generations. We are losing faith in equal opportunity and upward mobility as practical realities, and we’re feeling real anxiety over our lack of economic security.

Americans need to understand what’s at stake and push good people in government to do the right thing. If we don’t, eventually the moneyed interests will win because they are persistent and there won’t be anybody who can speak loudly enough to be heard over the bullhorn of their money.

What the powerful moneyed interests would like, is for us all to get so cynical about politics and government that we basically give up and say, “Okay, you want our democracy? Take it.” Then they win everything. But if we’re mobilized, if we’re energized, if we take citizenship to mean not simply voting, paying taxes, and showing up for jury duty, but actually participating actively and knowledgeably, we can make our democracy – and capitalism – work.

We can do it if we understand the nature of the problem. Time and again, in the early 1900s and again in the 1930s, for example, we have saved capitalism from its own excesses. We made sure that rules were in place to make capitalism work as it should: as an engine of prosperity for everyone and with a brake on the excesses of greed and power, as well as on the money that can otherwise corrupt our democratic process.

I encourage you to watch, listen to, or read the transcript of Bill Moyers’ show with Bob Reich (http://billmoyers.com/episode/full-show-inequality-for-all/). And I encourage you to go see Bob Reich’s movie, Inequality for All. It’s entertaining and informative. You can see the trailer for the movie, get lots more information, and find opportunities to take action at http://inequalityforall.com/.

[1] The latest data appear to show that inequality was even greater in 2012 than 2007 as the great majority of the benefits of our weak economic recovery are going to the richest people. For more detail, see my post of 9/27/13 at https://lippittpolicyandpolitics.org/2013/09/27/whats-up-with-the-economic-recovery/.

[2] Moyers, B., with Reich, R., 9/20/13, “Inequality for all,” http://billmoyers.com/episode/full-show-inequality-for-all/ (This post is a summary of this Bill Moyers show. You can view, listen to, or read the transcript of it at the link provided.)

REPUBLICANS OBSTRUCTING NOMINEES AGAIN

ABSTRACT: The Republicans are back to blocking the President’s nominees for judgeships and executive branch positions by filibustering. Currently, there are roughly 90 vacancies for judgeships. In terms of Executive Branch nominees, the Chair of the Federal Reserve and the Secretary of Homeland Security are among those waiting for Senate confirmation.

Senate Democrats are again talking about changing the filibuster rule. One Senator called this obstructionism “a government shutdown by another tactic.” I encourage you to contact your Senators and let them know that this obstructionism should stop because we need our judicial and executive branches of government to function and perform the work that we have charged them to do.

FULL POST: The Republicans are back to blocking the President’s nominees for judgeships and executive branch positions by filibustering. [1] In July, Senate Republicans agreed to approve 7 Presidential nominations, but only after Senate Democrats threatened to change the Senate’s filibuster rule to stop the on-going and pervasive obstruction of nominees. (See post of 7/25/13 for more detail.) But on Thursday, the Republicans were back to filibustering nominees, blocking a judicial nominee who had 56 votes in favor and an appointee for a housing regulatory agency who had 57 votes in favor. [2]

Furthermore, Republican Senator Graham has threatened to hold up all nominations until further hearings are held on the attack on the diplomatic post in Benghazi, Libya, a year ago. Linking approval of nominees to a totally unrelated issue is certainly unusual, if not unprecedented. Furthermore, 13 Congressional hearings and 40 staff briefings on this issue have already occurred along with the delivery to Congress of 25,000 pages of related documents. [3]

Currently, there are roughly 90 vacancies for judgeships, many of which are considered judicial emergencies. These vacancies are having a negative impact on the functioning of the federal courts and their ability to deliver justice for the American people in a timely manner. (See post of 7/21/13 for more detail.) Several nominees have been approved by the lengthy and detailed vetting of the Judiciary Committee but have not been confirmed by the full Senate.

In terms of Executive Branch nominees, the Chair of the Federal Reserve and the Secretary of Homeland Security are among those waiting for Senate confirmation. (See post of 7/16/13 for more on the blocking of executive branch nominees).

As a result of this resurgence of Republican obstructionism of nominees by filibustering, Senate Democrats are again talking about changing the filibuster rule. One Senator called this obstructionism “a government shutdown by another tactic.” [4]

I encourage you to contact your Senators and let them know that this obstructionism should stop because we need our judicial and executive branches of government to function and perform the work that we have charged them to do.

[1] A filibuster occurs when one or more Senators refuse to end debate on a piece of legislation or other matter. It then requires a super-majority of 60 votes from the 100 Senators to close off debate (cloture) and allow a vote on the bill or other matter.

[2] Fram, A., 11/1/13, “GOP blocks Obama picks for US court, housing agency,” The Boston Globe (from the Associated Press)

[3] Associated Press, 11/2/13, “GOP Senator vows to block nominees,” The Boston Globe

[4] Fram, A., 11/1/13, see above

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.

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

WHY IS THE GOVERNMENT SHUTDOWN?

ABSTRACT: The federal government’s shutdown for lack of a budget has nothing to do with the deficit or democracy; rather, it has everything to do with politics, ideology, and the tyranny of a minority. The extreme wing of the Republican Party, without the support in Congress to pass legislation and having lost the last election, is trying to impose its ideology on the country by taking the government’s budget hostage.

The federal government’s budget deficit is at its lowest level in 5 years and roughly half of what it was in 2009. The Republicans’ primary policy target is the Affordable Health Care law, also known as Obama Care. They ideologically oppose this expansion of the government’s role in health care, even though it is built on conservative principles and will provide health insurance to tens of millions of Americans who don’t have it now.

There’s a bill sitting in the House that funds the government for a few weeks – a so-called Continuing Resolution (CR). With a simple yes or no vote, it would pass. But because it doesn’t have the support of the majority of Republicans, Speaker Boehner won’t allow a vote on it.

800,000 federal employees will lose their paychecks and millions of Americans will lose services funded by the government. Nonetheless, members of Congress will continue to get their paychecks and their good, taxpayer-subsidized health insurance.

As recent history has shown, if the extremists in Congress get what they want, or any part of it, they’ll just be back at the next opportunity, creating another crisis, and asking for more. Therefore, negotiation with this extortion, blackmail, hostage taking, or bullying, whatever you want to call it, should not and cannot be undertaken.

FULL POST: The federal government’s shutdown for lack of a budget has nothing to do with the deficit or democracy; rather, it has everything to do with politics, ideology, and the tyranny of a minority. The extreme wing of the Republican Party, without the support in Congress to pass legislation and having lost the last election, including the presidency and seats in both houses of Congress, is trying to impose its ideology on the country by taking the government’s budget hostage.

This extreme faction is not willing to abide by the last election, by legislation previously passed (such as the Affordable Care Act), or by the will of the American public. And they are not willing to engage in meaningful negotiations because they believe they know what is best for the country and for all of us. They are willing, however, to disrupt the lives of millions of Americans and to harm our weak economic recovery by shutting down the federal government.

And this is not about the deficit. The federal government’s budget deficit is at its lowest level in 5 years and roughly half of what it was in 2009. [1] The deficit is projected to continue to fall as the economy recovers, which increases government revenue and reduces expenses. Many economists expect that in 2 years it will have decreased to a sustainable level. [2]

The Republicans’ primary policy target is the Affordable Health Care law, also known as Obama Care. They ideologically oppose this expansion of the government’s role in health care, even though it is built on conservative principles: 1) it uses private health insurers and providers, and 2) it requires personal responsibility through the mandate that individuals purchase health insurance (an idea born in a conservative think tank). They oppose it despite the fact that it will provide health insurance to tens of millions of Americans who don’t have it now, and the fact that the more the public knows about Obama Care’s specific provisions, the more they like it. (See my posts of 8/21/13 and 8/19/13 for more information.)

Various budget proposals from the Republicans identify their other policy targets. They have included cuts to other social programs that their extreme wing opposes, including cuts to Social Security, the Medicare and Medicaid health programs, and food and nutrition assistance, among others. On the other hand, most of them would increase military spending on top of its significant increases in recent years, which already mean that we are spending more on the military (adjusted for inflation) than at any time since World War II. [3]

The Republicans in the House of Representatives, who are the roadblock to passage of a budget, are refusing to bring to a vote any budget that does not have the support of a majority of Republicans. Therefore, the most extreme 117 Republicans in the House, 27% of its overall membership, can and are blocking progress and forcing this shutdown. (See post of 7/27/13 for more information on obstructionism in the House.)

There’s a bill sitting in the House that funds the government for a few weeks – a so-called Continuing Resolution (CR). It’s simple and straightforward; it simply funds the government at current levels without making any policy changes. If the Republican leadership in the House would allow a simple yes or no vote on this bill, it would pass with support from members of both parties – as it did in the Senate. But because it doesn’t have the support of the majority of House Republicans, Speaker Boehner won’t allow a vote on it.

800,000 federal employees will lose their paychecks and millions of Americans will lose services funded by the government, including meals for seniors, Head Start classes for preschoolers, and access to national parks for all of us. Nonetheless, members of Congress will continue to get their paychecks and their good, taxpayer-subsidized health insurance.

This is the second time in 20 years that an extreme Republican agenda has forced a government shutdown. Democrats have never done this when they were in the minority or did not hold the presidency.

As recent history has shown, if the extremists in Congress get what they want, or any part of it, they’ll just be back at the next opportunity, creating another crisis, and asking for more. Therefore, negotiation with these extortionists, blackmailers, hostage takers, or bullies, whatever you want to call them, should not and cannot be undertaken. [4]

Long before blocking Obama Care was linked to a government shutdown, Norm Ornstein, the political scientist at the conservative America Enterprise Institute, wrote that “What is going on now to sabotage Obamacare is not treasonous – just sharply beneath any reasonable standards of elected officials with the fiduciary responsibility of governing.” [5] I wonder what he would say now about those in Congress whose behavior has led to this government shutdown.

[1] Klimasinska, K., 9/12/13, “U.S. budget gap narrows as stronger growth boosts revenues,” Bloomberg

[2] Lowrey, A., 4/22/13, “The incredible shrinking budget deficit,” The New York Times

[3] Bilmes, L., 7/31/13, “Pentagon a ripe target for cuts,” The Boston Globe

[4] Reich, R., 9/30/13, “Why Obama and the Democrats shouldn’t negotiate with extortionists,” The Huffington Post

[5] Light, J., 7/25/13, “Obstructionism for the recordbooks,” Moyers & company (billmoyers.com/2013/07/25/obstructionism-for-the-recordbooks)

INFORMED CITIZEN DISORDER

ABSTRACT: I would guess that many of you are like me: it’s been drilled into your conscience that it’s your responsibility as a citizen of a democracy and as a voter to be informed about what’s going on so you can make educated decisions. In a democracy, it’s part of being patriotic.

But boy, it can be depressing and infuriating because so many things are headed in the wrong direction. And changing direction is so difficult if not seemingly impossible. Marty Kaplan calls this “Informed Citizen Disorder (ICD).” Kaplan goes on to say, “We have to be optimists. … The only responsible thing that you can do is say that individuals can make a difference and I will try, we will try.”

There are encouraging signs, but the mainstream media (given they are mostly giant corporations) are not attuned to look for – and have some predisposition and incentive to ignore – citizen activism. Furthermore, our democracy is so controlled by money that it can feel unredeemable; our political system can leave us feeling helpless and jaded rather than empowered to make a difference.

However, our nation was built by ordinary people rising up and forging grassroots movements that achieved the extraordinary. “An American patriot is one who supports the egalitarian ideals of our country, and who is willing to challenge authority.” (Jim Hightower, see footnote)

This blog is part of my therapy for ICD. I hope it helps you.

FULL POST: I would guess that many of you are like me: it’s been drilled into your conscience that it’s your responsibility as a citizen of a democracy and as a voter to be informed about what’s going on so you can make educated decisions. Being informed about what’s going on in the world is supposed to be a virtue, the civic equivalent of exercise. In a democracy, it’s part of being patriotic.

But boy, it can be depressing and infuriating because so many things are headed in the wrong direction. And changing direction is so difficult if not seemingly impossible. You do your best to stay informed, and what you get in return is what Marty Kaplan calls “Informed Citizen Disorder (ICD).” As he puts it, “the more informed I am, the more despondent I am, because day after day, there is news which drives me crazy and I want to see the public rise up in outrage and say, no, you can’t do that, banks. You can’t do that, corporations. You can’t do that polluters, you have to stop and pay attention to the laws, or we’re going to change the laws.” But time and again, the public doesn’t rise up, and even when it does (at least somewhat as in the post-Newtown efforts to reduce gun violence), nothing changes. [1]

So Moyers asks him, “Are you an optimist or a pessimist about what’s happening to us?” And Kaplan says, “I have children. I have to be an optimist. The globe has children. We have to be optimists. There is no choice. … The only responsible thing that you can do is say that individuals can make a difference and I will try, we will try.” [2]

There are encouraging signs, although one often has to look hard to find them. Part of the problem is that the mainstream media (given they are mostly giant corporations) are not attuned to look for – and have some predisposition and incentive to ignore – citizen activism. Due to mergers and acquisitions over the last 35 years, there are now fewer than 10 giant media corporations that control over 90% of the news and information we receive.

Remember Occupy Wall Street? It was going on for weeks before it got any mention in the mainstream media. The Moral Monday’s demonstrations that are happening in North Carolina weekly are a great example. What happened in Wisconsin when the Governor and Legislature were attacking public employees and unions was another great example. What hasn’t happened yet is for this citizen activism to spark major, nationwide protest or to build to a critical mass.

Moyers and Kaplan also discuss how the mainstream media today actually undermine our efforts to be good citizens of a democracy by distracting us with infotainment and by failing to provide the depth of information necessary to be informed citizens. Furthermore, our democracy is so controlled by money that it can feel unredeemable; our political system can leave us feeling helpless and jaded rather than empowered to make a difference.

However, our nation was built by ordinary people rising up and forging grassroots movements that achieved the extraordinary. Think of the original Patriots who started and carried out the American Revolution. Think of the suffrage, Civil Rights and Gay Rights movements. Think of the New Deal. “An American patriot is one who supports the egalitarian ideals of our country, and who is willing to challenge authority” every time it strays from the ideals of our democracy and from government of, by, and for the people. [3]

This blog is part of my therapy for ICD. I hope it helps you. I try to concisely present information on issues that we need to tackle to reclaim our democracy and relieve ICD. Ultimately, I hope this supports the grassroots movement of informed citizens that is needed to return to government of, by, and for the people.

NOTE: I encourage you to listen to or watch Bill Moyers’ shows. I download the podcasts and listen to them when I’m traveling, waiting, or doing mindless things. They are incredibly informative and thought provoking. He frequently asks his activist guests, as he did Kaplan, what keeps them going and why they remain optimistic. Their answers are always inspiring. I also encourage you to take a look at Jim Hightower’s Lowdown. It’s feisty, entertaining, easy to read, and informative.

[1] Kaplan, M., 5/27/13, “Diagnosis: Informed Citizen Disorder,” The Huffington Post

[2] Moyers, B., 7/12/13, “Distracted from Democracy,” Bill Moyers & Company with Marty Kaplan, http://billmoyers.com/segment/marty-kaplan-on-the-weapons-of-mass-distraction/

[3] Hightower, J., July 2013, “America’s true history is not about ‘Great Men,’ but about grassroots rebels and movements,” The Hightower Lowdown, http://www.hightowerlowdown.org/

THE AFFORDABLE CARE ACT PART II

ABSTRACT: Other than the individual mandate (see 8/19 post), the biggest focus of resistance to the Affordable Care Act (ACA) has been the expansion of Medicaid, the health insurance program for low income individuals. If all states implement the Medicaid expansion called for by the ACA, over 21 million individuals, including 4.5 million children, who don’t have health insurance will gain coverage.

The resistance has been based on the assertion that the expansion will cost states money. However, for the first three years, the federal government will pay 100% of the cost and at least 90% thereafter. Because the newly covered individuals would have cost the states about $18 billion for uninsured, uncompensated care, overall the states will save $10 billion.

Republican Governors and state legislators, looking for a symbolic and substantive way to express their opposition to the ACA, have taken steps to refuse to participate in the Medicaid expansion, refusing significant federal funding. As a result, nationwide, hundreds of thousands of low-income residents will not receive health insurance.

FULL POST: Other than the individual mandate (see 8/19 post), the biggest focus of resistance to the Affordable Care Act (ACA) has been the expansion of Medicaid, the health insurance program for low income individuals paid for jointly by the states and the federal government. If all states implement the Medicaid expansion called for by the ACA, over the next 10 years over 21 million individuals, including 4.5 million children, who don’t have health insurance will gain coverage. But when the Supreme Court upheld the overall ACA, it ruled that states couldn’t be required to participate in the expansion of Medicaid included in the law.

Aside from the political opposition, the resistance has been based on the assertion that the expansion will cost states money. However, for the first three years the federal government will pay 100% of the cost and at least 90% thereafter. Over 10 years, it is estimated that if all states implement the expansion, they would spend an additional $8 billion, which would be a 0.3% increase over their spending without the expansion. Furthermore, because the newly covered individuals would have cost the states about $18 billion for uninsured, uncompensated care, overall the states will save $10 billion. There may be other savings to states from the implementation of the ACA as well, although the impact will vary by state. [1]

Republican Governors and state legislators, looking for a symbolic and substantive way to express their opposition to the ACA, with encouragement from the Tea Party and other staunch Obama opponents, have taken steps to refuse to participate in the Medicaid expansion, refusing significant federal funding. As a result, nationwide, hundreds of thousands of low-income residents will not receive health insurance, despite the fact that there would be no cost to the states for 3 years and a 10% maximum share of the cost after that. In some states, such as Florida, after a hard look at the numbers and some grassroots activism, Republican elected officials have reversed their original stand and have decided to participate. However, New Hampshire, for example, currently is refusing to participate. This means that 58,000 low-income residents will not receive health insurance and, for many of them, it will likely mean they don’t get care they need. [2]

Republicans, and especially Tea Partiers, are making wild claims about how Obama Care will hurt small businesses and the economy. These claims have been soundly refuted as false by independent groups such as FactCheck.org and PolitiFact.com. The latter notes that economists generally believe that the federal budget cuts due to the sequester have done much more harm to the economy.

Undoubtedly, there will be bumps in the road during implementation of the Affordable Care Act. There always are challenges in implementing complex legislation, and the ACA was made more complex by the compromises Obama made in trying to get Republican support, which they then never gave to him or to the law.

Although it is too soon to know for certain, the bottom line is likely to be that the Affordable Care Act will provide very significant benefits to those who don’t have health insurance and get it, and that there are likely to be real benefits for those who already have health insurance as well. Most experts believe that states that are focused on making the ACA work will see good results. But that in states that work to undermine the law the results will not be good. [3] For example, some states are refusing to set up the exchanges to help the uninsured buy coverage and some are refusing to provide information to help residents make informed decisions on which plan to buy. Elected officials in these states are likely to then say, “See it doesn’t work!” The sad thing about this self-fulfilling prophecy is that it will be the residents of those states who will suffer with no, or less effective, health insurance and probably worse health.

[1] Holahan, J., Buettgens, M., Carroll, C., & Dorn, S., 11/1/12, “The cost and coverage implications of the ACA Medicaid expansion: National and state-by-state analysis,” The Urban Institute and the Kaiser Commission on Medicaid and the Uninsured (http://kaiserfamilyfoundation.files.wordpress.com/2013/01/8384_es.pdf)

[2] Editorial, 8/7/13, “GOP stance against Obamacare hurts thousands of NH families,” The Boston Globe

[3] Lehigh, S., 8/14/13, “The GOP’s Obamacare whale hunt,” The Boston Globe