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“Citigroup Becomes Its Own Self-Serving Lawmaker”: 21st Century Civics Lesson; How A Corporate Bill Becomes A Law

Congress, which has long been so tied up in a partisan knot by right-wing extremists that it has been unable to move, suddenly sprang loose at the end of the year and put on a phenomenal show of acrobatic lawmaking.

In one big, bipartisan spending bill, our legislative gymnasts pulled off a breathtaking, flat-footed backflip for Wall Street, and then set a dizzying new height record for the amount of money deep-pocketed donors can give to the two major political parties. It was the best scratch-my-back performance you never saw. You and I didn’t see it — because it happened in secret.

The favor was huge — allowing Wall Street’s most reckless speculators to have their losses on risky derivative deals insured by us taxpayers. Yes, such losses were a central cause of the 2008 financial crash and subsequent unholy bank bailout, which led to passage of the Dodd-Frank reform law, including a provision sparing taxpayers from covering future losses. But with one, compact, 85-line provision inserted deep inside the 1,600-page, trillion-dollar spending bill, Congress did a dazzling flip-flop on that regulation, putting us taxpayers back on the hook for the banksters’ high-risk speculation.

In this same spending bill, Congress also used its legislative athleticism to free rich donors (such as Wall Street bankers) from a limit of under $100,000 on the donation that any one of them can give to political parties. In a spectacular gravity-defying stunt, lawmakers flung the limit on these donations to a record-setting 15 times higher than before. So now bankers who are grateful to either party for being able to make a killing on taxpayer-backed deals can give $1.5 million each to the parties.

Perhaps you recall from your high school civics class that neat, one-page flow chart showing the perfectly logical, beautifully democratic process that Congress must go through to pass our laws.

What a bunch of kidders those chart makers were! To see how the sausage is really made, let’s take a look at that trillion-dollar budget bill that Congress squeezed out just before Christmas. It was crammed with special corporate favors, such as: reinstating a Bush rule allowing mining giants to explode the tops off ancient Appalachian mountains and then bulldoze the rubble down into the valley below, destroying pristine mountain streams; another letting long-haul trucking outfits require their drivers to be on the road more than 11 hours a day and up to 82 hours per week, filling our highways with highballing, sleep-deprived truckers; and cutting $60 billion from the Environmental Protection Agency, freeing up polluters to go unpunished for polluting.

None of these favors had anything to do with that “how a bill becomes law” flow chart in our civics textbook. No bill was filed, no public hearings, no debate, no vote. Just — BAM! — there they were, a thicket of benefits secretly slipped into the 1,600-page budget bill by … well, by whom? Largely by corporate lobbyists, though they get one of their for-hire congresscritters to do the actual dirty deed.

The taxpayer subsidy for Wall Street, for example, was written by Citigroup. The bank’s lobbyists then handed the provision to Kansas Republican Kevin Yoder, who slipped it into the bill. Thus, the Wall Street conglomerate that took a $50 billion bailout from us taxpayers just seven years ago to save itself from its own bad deals essentially was allowed to become an unelected, self-serving, do-it-yourself, backroom “lawmaker” to make sure that your and my tax dollars will be there to cover its next mess-up.

And that, boys and girls, is the real flow chart for making our laws. It’s always an amazing sight when Wall Street and Congress get together — especially when they get together out of sight.

 

By: Jim Hightower, The National Memo, December 24, 2014

December 27, 2014 Posted by | Citigroup, Congress, Wall Street | , , , , , , , , | Leave a comment

“Where Is The Outrage”: How States Are Redistributing The Wealth

In 2008, then-candidate Barack Obama was lambasted for supposedly endorsing policies of wealth redistribution. The right feared that under an Obama presidency, Washington would use federal power to take money from some Americans and give it to others. Yet, only a few years later, the most explicit examples of such redistribution are happening in the states, and often at the urging of Republicans.

The most illustrative example began in 2012, when Kansas’ Republican Gov. Sam Brownback signed a landmark bill that delivered big tax cuts to high-income earners and businesses. Less than two years after that tax cut, the state’s income tax revenues plummeted by a quarter-billion dollars — and now Brownback is pushing to use money for public employees’ pensions to instead cover the state’s ensuing budget shortfalls.

Brownback’s proposal: Slash the state’s required pension contribution by $40 million to balance the state budget, even though Kansas already has one of the worst-funded pension systems in the nation.

Brownback defended his proposal to take money from middle-class state workers and use it to effectively finance his tax cuts for the wealthy. He told the Wichita Eagle: “It’s kind of, uh, well where are you going to go for the funds? And I don’t like it, but it’s kind of what’s your other option if you don’t hit K-12 and higher ed with allotments?”

Brownback is not alone. He joins fellow Republican Gov. Chris Christie in coupling large tax breaks with cuts to actuarially required pension payments. In New Jersey, Christie slashed required pension payments while signing legislation expanding tax credits to corporations, and doling out a record amount of taxpayer subsidies to businesses. Many of those subsidies have flowed to firms whose executives have made campaign contributions to Republican political organizations. Earlier this month, New Jersey pension trustees filed a lawsuit against Christie for not making legally required contributions to the state’s pension system.

Both Brownback and Christie promoted their tax cuts as instruments to boost economic growth. Yet, a recent review of federal data by the Kansas City Star found Kansas “trails most other states when it comes to job growth.” Likewise, an investigative series by Gannett newspapers recently found “New Jersey’s job growth rate [is] the second worst in the nation. … New Jersey’s middle class has lost billions in income through layoffs, salary cuts and wage freezes [and] more than 100,000 job seekers have been unemployed for months on end.”

Illinois followed a somewhat similar path. For years, lawmakers did not make the full actuarially required pension payments, causing severe funding shortages in the state’s pension system. While lawmakers said there was little money to meet pension obligations, Democratic Gov. Pat Quinn signed a corporate tax cut in 2011 that is projected to cost the state more than $370 million a year in lost revenue. Two years after signing that bill, as pension funding gaps swelled, Quinn signed legislation slashing public employees’ retirement benefits. An Illinois judge last month ruled that the legislation violated the state’s constitution, though the ruling is being appealed.

The obvious question raised by these episodes is: Where is the outrage? To date, these attempts to use workers’ money to finance massive giveaways to the rich have generated little media coverage or political opposition — and certainly less than the full-fledged frenzy that took place when Obama made his “spread the wealth” comment a few years ago.

The tepid response to this kind of wealth transfer suggests that for all the angry rhetoric about redistribution you might hear on talk radio, cable TV and in the halls of Congress, the political and media class is perfectly fine with redistribution — as long as the cash flows from the 99 percent to the 1 percent, and not the other way around.

 

By: David Sirota, Senior Writer, the International Business Times; The National Memo, December 26, 2014

December 27, 2014 Posted by | Chris Christie, Sam Brownback, State Pension Systems | , , , , , , , | Leave a comment

“Jeb Bush Counts On Short Memories”: Trying To Clean Up His Act Now That He’s All Sleek With Wealth

So not that very long ago, Jeb Bush’s aggressive and controversial business tactics, mostly focused on the politically perilous area of private equity management in conjunction with shadowy foreign partners, especially in China, convinced some observers he sure wasn’t acting like somebody planning a presidential campaign. Now there are signs that what Bush has been engaged in lately is the tail-end of a financial fattening-up period before the long hard winter of a campaign. Here’s how the L.A. Times‘ Joseph Tanfani puts it:

After leaving office in 2007, he set up Jeb Bush and Associates, a management consulting firm. His son, Jeb Bush Jr., serves as managing partner. Bush has said the firm’s clients range from Fortune 500 companies to small tech startups, but Campbell declined to discuss the company’s business or identify its clients.

That same year, Bush also was hired as an advisor to Lehman Brothers, the New York investment bank and financial services firm. When Lehman collapsed in bankruptcy in 2008 amid the global financial crisis, Bush shifted to Barclays, the London-based multinational banking and financial services giant that bought Lehman Brothers’ North American divisions.

He got involved in a venture that provides disaster response services. He and two partners also set up another company, Maghicle Driverless, that is trying to develop self-driving vehicles for passengers and cargo.

“He was grabbing at a lot of things to make money quickly,” said Susan MacManus, a political science professor at the University of South Florida.

Now he appears to be trying to clean up his act now that he’s all sleek with wealth and ready to focus on a restoration of the family dynasty.

[Kristy] Campbell, the Bush spokeswoman, said he will leave Barclays by Dec. 31 to focus on a possible presidential run. She said his work for Lehman Brothers and Barclays was mostly offering clients “his perspective on the impact of economic trends, regulations and policies.”

Yeah, it’s a total coincidence Jeb associated himself with two of the world’s most recent examples of financial malfeasance. But that’s not the sort of thing Team Jeb is most worried about; it’s this:

[O]n Wednesday, Bush resigned from the board of directors of Tenet Healthcare Corp., also effective Dec. 31, according to a corporate filing. The Dallas-based company actively supported the 2010 Affordable Care Act, and has seen its revenue rise from it, an issue that could draw fire in Republican primaries.

Bush earned cash and stock awards worth nearly $300,000 from Tenet in 2013, according to corporate filings. He also sold Tenet stock worth $1.1 million that year, the records show.

Can’t be associating with Obamacare lovers, can he?

Jeb appears to hope his whole pattern of financial system bottom-feeding and door-opening for shadowy global interests will be forgotten once the campaign is underway. In that respect as in others, he is the appropriate representative of a Republican Establishment that views lack of wealth as the most unforgivable character flaw.

 

By: Ed Kilgore, Contributing Writer, Political Animal, The Washington Monthly, December 26, 2014

December 27, 2014 Posted by | GOP Presidential Candidates, Jeb Bush | , , , , , , , , | Leave a comment

“Why We Can’t Educate Racism Away”: At Its Root, Racism Is A Structural Problem

How prejudiced are Americans? The internet knows. Whether it’s racism, sexism, cissexism, transphobia, classism, sizeism, or ableism, online residents are watching out for it and pointing it out at tremendous volume. Whole tumblrs are dedicated to meticulously cataloging the prejudiced histories of famous people.

While often useful and necessary, this strategy comes up short. The idea is that by “calling out” individual acts of oppression, we can raise awareness about the myriad subtle ways that prejudice manifests itself. The citizenry, better educated, will adjust its behaviors.

The problem is that white people, our dominant and most privileged socioeconomic group, tend to resist these critiques. In the case of racism, they are the ones who benefit from prejudice, and they squirm out of this stigma in increasingly interesting ways. How? These days, by loudly agreeing with those critiques, thereby signaling that they are meant for other, bad white people.

Think of the guy in critical theory class who embraces radical feminist authors extra-fervently in a bid to escape his own implication in the patriarchy. This bit of political jujitsu is rather “like buying an indulgence,” as Reihan Salam put it at Slate.

One might respond that the answer is improved self-knowledge, greater humility, and more self-flagellation on the part of the privileged (see: #CrimingWhileWhite). Sure. But the problem is that there is no possible demonstration of prejudice and privilege that cannot also be appropriated by white people in the service of demonstrating the purity of their own views, resulting in an endless vortex of uncomfortable, obnoxious earnestness. Being a Not-Racist these days is getting very subtle indeed.

But there’s another approach that is both simpler and far more difficult. Instead of focusing on individual guilt and innocence, the socioeconomic structure that undergirds racism can get equal or greater billing. If educating the privileged has reached a point of diminishing returns, then attacking racist outcomes with structural policy can make that education unnecessary.

Now, it should be noted that any individual instance of calling out prejudice is surely harmless and heartfelt. It should further be noted that many if not most anti-prejudice activists share these structural goals. The problem is a question of emphasis. Prejudiced words tend to get 10 times more attention than racist acts and structures. For example, Donald Sterling was hounded mercilessly for his racist comments, but largely ignored for his concretely racist actions as a landlord.

And the problems America faces go far beyond one rotten rich person. There’s the prison-industrial complex. The stupendous wealth and income gap between black and white. The fact that the police randomly gun down unarmed black men and boys on a regular basis. That’s just for starters — and it’s getting worse, not better.

Working on those problems is going to take a massive nationwide policy effort. Prison and sentencing reform, ending the drug war, overhauling American policing, and implementing quota-based affirmative action would be a good start. In particular, there is a good case for class to take center stage in any anti-prejudice effort. Nearly all racist oppression is heavily mediated through economic structures and worsened by endemic poverty.

More importantly, income differences and poverty are easy problems to fix policy-wise. (Fixing American police is a hellish problem and I have no idea where to start.) But a lack of money can be bridged with simple income transfers, from the rich to the poor.

All of this is very hard lift politically, of course. But substantive politics is the best way to get past people’s nearly infinite capacity for self-exculpation. If the root of racism is in our structures, then structural policy should be the solution.

 

By: Ryan Cooper, The Week, December 25, 2014

December 27, 2014 Posted by | Criminal Justice System, Inequality, Racism | , , , , , , | Leave a comment

“A Massively Failed Experiment”: Why Conservatives Learned Nothing From Sam Brownback’s Failure

Kansas governor Sam Brownback had a plan when he got elected in 2010, and it was a plan that could only be enacted in a place like Kansas: Pass huge tax cuts, then watch the state transform into a kind of economic heaven on earth. Brownback surely could never have doubted it would work, since he and those in his party have been saying for decades that tax cuts deliver economic growth, rising tax revenues, general happiness, and shinier, more manageable hair.

You’ve probably heard the story: growth in Kansas did not, in fact, explode, but what did happen is that revenues plummeted, leading to severe cutbacks in education and other state services. Brownback nevertheless managed to get re-elected, because it was a non-presidential year and because it’s Kansas. So now he’s had a chance to reflect, and here’s how he’s looking at things, according to a Topeka newspaper:

As Gov. Sam Brownback’s first term comes to a close, the Republican governor has one regret — no, scratch that — one thing he would do differently.

“I probably would have chosen words better at different times, because you go through a campaign where you’ve got to eat the words you inartfully said,” Brownback said during a recent interview with The Topeka Capital-Journal.

The former U.S. senator — with the help of a Republican-controlled Legislature — slashed taxes, privatized portions of state government and pursued a staunchly conservative policy agenda during the past four years. And then Brownback fought off a competitive challenge from Democratic Rep. Paul Davis.

Atop the list of words and phrases that have proven controversial and given his opponents the greatest opportunity for mockery: predicting the Kansas tax cuts would act as a “shot of adrenaline” to the state’s economy and referring to the plan as an “experiment.”

In other words…

It’s obvious that he regrets calling it an “experiment” for no reason other than that word showed up in a bunch of Democratic attack ads. But as for the idea that tax cuts would give the Kansas economy a “shot of adrenaline”? Of course that’s what he said, because that’s what he believed. If you don’t believe that, you can’t call yourself a Republican.

It isn’t that there’s no truth to it—all else being equal, tax cuts put more money in people’s hands, so they can spend more, which will have some positive impact on the overall economy. The problem is that 1) the effect is never as large as Republicans expect it to be; 2) not only did Brownback’s tax cuts go mostly to the wealthy, who are less likely to spend the money, he actually raised taxes on poor people (there’s an explanation here), and 3) the benefits were swamped by the harm created by the inevitable cratering of state revenue.

But if you’re Sam Brownback, how do you account for such an outcome? It can’t possibly be that the theory on which the entirety of contemporary Republican economic policy rests is false. What’s he going to say—”It turns out that tax cuts don’t do much good”? Not in this universe.

It’s not just him. The failure of Brownback’s experiment may provide an effective rhetorical tool liberals can use against conservatives in economic debates, but it won’t actually change any conservatives’ thinking. The reason is that their belief in tax cuts doesn’t rest on the practical effects. That’s an argument that’s meant to appeal to everyone, since it concerns something (growth) that just about everyone thinks is good. But the real source of the conservative support for tax cuts is moral, not practical. They believe that taxes are inherently immoral — the government stealing from you the fruits of your labor (or inheritance or wise investments, as the case may be) to enact its nefarious schemes. Taxes should therefore be as low as possible. Conservatives also tend to believe that progressive taxation is doubly immoral, since it takes more from the most virtuous among us.

So my guess is that Brownback sees his experiment as a practical failure but a moral success, and other conservatives would agree. Not that he’d say so in quite those terms, because he knows how it would sound. But the only lesson he’s learned from his failure is to change the words he uses.

 

By: Paul Waldman, Contributing Editor, The American Prospect, December 23, 2014

December 27, 2014 Posted by | Republicans, Sam Brownback, Tax Cuts | , , , , , | Leave a comment

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