“GOP Thinks The 47 Percent Aren’t Trying Hard Enough”: News Flash, Middle-Class Rowboats Are Taking On Water
Remember the “47 percent”?
During his 2012 campaign for the presidency, Mitt Romney was caught on tape describing nearly half the country in disparaging terms, labeling them moochers who want handouts. They are voters “who are dependent upon government, who believe that they are victims, who believe the government has a responsibility to care for them, who believe that they are entitled to health care, to food, to housing, to you-name-it,” he said.
Romney’s remarks — and he stood by them immediately after his election defeat — didn’t just damage him; they also sullied the entire Republican Party, reinforcing its image as the lapdog of the very rich. Even now, as some of its strategists push hard for the GOP to reach out to ordinary working folks, its congressional leaders continue to protect the 1 percent.
If President Obama has no hope for passage of his ambitious program of “middle-class economics,” as he called it during last week’s State of the Union speech, at least he has a plan. His proposals for free community college, increasing the minimum wage and providing tax cuts to families in the middle of the economic spectrum have the advantage of recognizing the reality of income inequality.
So far, his GOP critics continue to resist that reality, sticking to the old Reagan-era bromide that a “rising tide lifts all boats.” Perhaps that’s true, but those middle-class rowboats are taking on water even as the rich float along comfortably in their yachts.
The growing gap between the haves and the have-nots is one of the most critical issues of our time, a dispiriting trend that has struck most Western economies. Because of complex forces, especially globalization and technology, the incomes of ordinary workers are falling further and further behind, even as the rich get, well, richer.
That’s not the fault of Democrats or Republicans, Libertarians or Socialists. Nor did this growing inequality start with the Great Recession. It started way back in the 1970s, as the factories that had powered the middle class started to shut down. American steel mills closed; textile mills went away; automotive plants moved out. The trends have simply accelerated since then, as robots power assembly lines and low-wage workers in places like Bangladesh sew garments once made in Maine and North Carolina.
Even now, in a resurgent economy, many families haven’t regained their footing. Their savings accounts have evaporated. They can’t replace the house they lost to foreclosure. They work two or three part-time jobs without benefits. And even those with full-time jobs aren’t living it up. According to The New York Times, the median weekly wage for full-time workers at the end of 2014 was $796, below the levels in 2009, when the expansion began.
Those workers are hardly moochers. They are struggling to find their way in a world where their skills have less value. They need help from a government that knows its role is to lend a hand, to steady the ladder, to help them find a toehold.
Even Romney, who is making noises about running again, has finally gotten the message. He has at least called for an increase in the minimum wage.
But most Republicans can’t get over the notion that those who haven’t made it simply aren’t trying hard enough, that if you’re stuck on the economic margins, it’s your own fault. Their allegiance to the very rich — people like the billionaire Koch brothers — overrides any concern for the vast middle.
Take their insistence on resisting tax increases for the 1 percent — a plan proposed by Obama to pay for tax cuts for the middle and working classes. Republicans claim any tax hikes would kill the recovery. But that’s not so. George W. Bush’s tax cuts led to no new job growth, while Bill Clinton, who raised taxes, presided over a period of widespread prosperity.
So what do Republicans propose? So far, they’ve pushed building the Keystone pipeline, which would create about 42,000 jobs over a period of two years, but only about 35 permanent jobs. And, of course, the GOP still wants to kill Obamacare, a strategy that would create zero jobs.
That’s not much better than dismissing the 47 percent.
By: Cynthia Tucker, The National Memo, January 24, 2015
“Deliberate And Systemic”: Inequality Isn’t Inevitable, It’s Engineered. That’s How The 1% Have Taken Over
Who will look after the super-rich and think about their needs? It’s not easy for them: the 1% of the world’s population who by next year will own more global wealth than the 99%. Private security costs a fortune, and with the world becoming an increasingly unequal place a certain instability increases. It could be dangerous!
Very smartly, Oxfam International is raising such questions at the World Economic Forum at Davos, where the global elite gather to talk of big ideas and big money. Oxfam executive director, Winnie Byanyima, is arguing that this increasing concentration of wealth since the recession is “bad for growth and bad for governance”. What’s more, inequality is bad not just for the poor, but for the rich too. That’s why we have the likes of the IMF’s Christine Lagarde kicking off with warnings about rising inequality. Visceral inequality from foodbanks to empty luxury flats is still seen as somehow being in the eye of the beholder by the right – a narrative in which poverty is seen as an innate moral failure of the poor themselves has taken hold. This in turn sustains the idea that rich people deserve their incredible riches. Most wealth, though, is not earned: huge assets, often inherited, simply get bigger not because the individuals who own them are super talented, but because structures are in place to ensure this happens.
Most of us – I count myself – are economically inept. The economic climate is represented as a natural force, like uncontrollable weather. It’s a shame that the planet is getting hotter, just as it’s a shame that the rich are getting richer. But these things are man-made and not inevitable at all. In fact, there are deliberate and systemic reasons as to why this is happening.
The rich, via lobbyists and Byzantine tax arrangements, actively work to stop redistribution. Inequality is not inevitable, it’s engineered. Many mainstream economists do not question the degree of this engineering, even when it is highly dubious. This level of acceptance among economists of inequality as merely an unfortunate byproduct of growth, alongside their failure to predict the crash, has worryingly not affected their cult status among blinkered admirers.
Even the mild challenge of Thomas Piketty, with his heretical talk of public rather than private interest being essential to a functioning democracy, is revolutionary in a world which buys the conservative idea that the elixir of “growth” simply has to mean these huge extremes in income distribution.
That argument may now be collapsing. The contortions that certain pet economists make to defend the indefensible 1% are often to do with positing the super-rich as inherently talented and being self-made. The myth is that everyone is a cross between Steve Jobs and Bono; creative, entrepreneurial, unique. The reality is cloned inherited wealth and insane performance-related pay, eg the bankers who continue to reward themselves more than a million a year after overseeing the collapse of the industry.
There are always those who will side with the powerful against the powerless, and economists specialise in this. No wonder Prof Gregory Mankiw’s Harvard students walked out of his class following his ludicrous insistence that the system is not gamed for the rich. Such “theorists” flatter the rich by granting them some superpower, which is why they like rock star comparisons. In fact, international finance is peopled by interchangeable guys who are essentially just paying themselves double what they were 10 years ago. They may need to think of themselves as special. We don’t have to.
When we talk of neoliberalism, we are talking about something that has fuelled inequality and enabled the 1%. All it means is a stage of capitalism in which the financial markets were deregulated, public services privatised, welfare systems run down, laws to protect working people dismantled, and unions cast as the enemy.
Oxfam’s suggestions at Davos are attempts to claw back some basic rights, with talk of tax, redistribution, minimum wages and public services. But isn’t it rather incredible that a charity has to do this? The Occupy movement has dissipated, but we are seeing in Europe, primarily in Greece and Spain, a refusal to accept the austerity narrative that we appear to have wolfed down here in the UK.
Oxfam can appeal to the vanity of billionaires, but the truth is that’s not enough. The neoliberal project may fail not because of huge protest, but because reduced income means reduced demand. Never mind the angry proletariat, a disappointed middle-class is something all politicians fear. To stem inequality, it is imperative to stop seeing it as inevitable. It’s a choice. A choice very few of us have any say in. The poor are always with us. And now the deserving and undeserving super-rich are too? That’s just the way things are? No. This climate can also change.
By: Suzanne Moore, The Guardian, January 20, 2015
“Something Obscene About Civil Asset Forfeitures”: A Practice That Incentivizes Police To Steal From Law Abiding Citizens
Imagine this:
You get pulled over by police. Maybe they claim you were seven miles over the speed limit, maybe they say you made an improper lane change. Doesn’t matter, because the traffic stop is only a pretext.
Using that pretext, they ask permission to search your car for drugs. You give permission and they search. Or you decline permission, but that doesn’t matter, either. They make you wait until a drug-sniffing canine can be brought to the scene, then tell you the dog has indicated the presence of drugs — and search anyway.
Now imagine that no drugs are turned up, but they do find a large sum of money and demand that you account for it. Maybe you’re going to a car auction out of state, maybe the money is a loan from a relative, maybe you just don’t trust banks. This is yet something else that doesn’t matter. The police insist that this is drug money. They scratch out a handwritten receipt and, without a warrant, without an arrest, maybe without even giving you a ticket for the alleged traffic violation, they drive away with your money.
You want it back? Hire a lawyer. You might be successful — in a year or two. Or you might not. Either way, it’s going to cost you and if the amount in question is too small, getting an attorney might not be practical. Would you spend $5,000 to (maybe) recover $4,000? No. So the police keep your money — your money — and you swallow the loss.
You find that scenario far-fetched? It’s not fetched nearly as far as you think.
Just since 2008, there have been over 55,000 “civil asset forfeitures” for cash and property totaling $3 billion. And for every actual drug dealer thus ensnared, there seems to be someone like Mandrel Stuart, who told the Washington Post last year that he lost his business when police seized $17,550, leaving him no operating funds. Or like Ming Tong Liu, who lost an opportunity to buy a restaurant when police took $75,000 he had raised from relatives for the purchase.
So one is heartened at last week’s announcement from Attorney General Eric Holder that the federal government is largely abandoning the practice.
The civil asset forfeiture has been a weapon in the so-called “War on Drugs” since the Nixon years. Initially conceived as a way to hit big drug cartels in the wallet, it has metastasized into a Kafkaesque nightmare for thousands of ordinary Americans. Indeed, the Post reports the seizures have more than doubled under President Obama.
Now the administration is pulling back. Not that Holder’s announcement ends the practice completely — state and local governments are free to continue it on their own. What ends, or at least is sharply curtailed, is federal involvement, i.e., a program called “equitable sharing,” under which seized property was “adopted” by the feds, meaning the case was handed off to Washington, which took 20 percent off the top, the rest going into the local treasury.
Ask your local law enforcement officials if they will be following Holder’s lead. And if not, why not? Because — and this should go without saying — in a nation with a constitutional guarantee against “unreasonable searches and seizures” there is something obscene about a practice that incentivizes police to, in essence, steal money from law-abiding citizens and leaves said citizens no reasonable recourse for getting it back.
Yet, this is precisely what has gone on for years without notice, much less a peep of protest, from we, the people — proving yet again that we the people will countenance great violence to our basic freedoms in the name of expedience. The insult compounding the injury? The expedience didn’t even work and has had no discernible impact on the use of illegal narcotics. To the contrary that usage has thrived under the “War on Drugs.”
Sadly, the Constitution has done less well.
By: Leonard Pitts, Jr., Columnist For The Miami Herald; The National Memo, January 21, 2015
“Paths To The Presidency”: John Kasich And The Road Less Taken, Because It Goes Nowhere
Last month I spent a few minutes mocking a Cleveland Plain Dealer story that suggested big donors might hunt down Ohio Gov. John Kasich as he traipsed around the Mountain West plumping for a balanced budget constitutional amendment, and beg him to become the 2016 Republican presidential nominee. I half-thought the story was the product of somebody in Kashichland funnin’ a local reporter. I mean, really, a guy as seasoned as Kasich didn’t really think that was a viable strategy for becoming Leader of the Free World, did he?
But now we have a Wall Street Journal piece from the veteran national political reporter Janet Hook reporting the same madness:
If Ohio Gov. John Kasich is thinking of running for president, he’s taking a very circuitous route. Mr. Kasich, one of several Republican governors seen as potential candidates, is spending much of this week traveling through six sparsely populated Western states to promote balancing the budget.
Fresh off his inauguration to a second term as governor, Mr. Kasich is travelling from South Dakota to Wyoming to Idaho in a tour that ends Friday. He is trying to round up support for a constitutional amendment requiring a balanced federal budget — even as fiscal issues seem to be fading in Congress.
But then, after reporting that Kasich doesn’t admit this odd out-of-state travel schedule means he’s running for president, Hook cites it as one of several “paths to the presidency,” alongside those more conventional candidates are pursuing:
Mr. Kasich is part of a distinct posse of potential candidates — Republican governors that include Wisconsin Gov. Scott Walker, Indiana Gov. Mike Pence and outgoing Texas Gov. Rick Perry — who are angling to use their states’ records as calling cards in a bid for national office.
Mr. Kasich is proud of Ohio’s economic turnaround, and of his 2014 re-election by more than 30 percentage points. He has been trying to espouse a new brand of compassionate conservatism, supporting an expansion of Medicaid in his first term and saying in his second inaugural address, “Somehow we have lost the beautiful sound of our neighbors’ voices. Moving beyond ourselves and trying to share in the experience of others helps us open our minds, allows us to grow as people.”
But he is pairing that big-hearted message with fiscal conservatism, his trademark issue during his 18 years in Congress when he played a lead role in crafting a 1997 deal to eliminate the federal budget deficit.
So Ohio Record (including the kryptonite-to-conservatives Medicaid expansion) plus Balanced Budget somehow equals viable candidacy. It’s not easy to understand how, mechanically, anyone would win the nomination this way, unless Hook is buying the idea big donors will track him down somewhere in the Rockies and beg him to run.
You know what I think? A lot of MSM types think Kasich ought to be the kind of candidate the Republicans nominate, and that fiscal hawkery–the only part of the Constitutional Conservative ideology they understand–could be his ticket to ride.
Beyond that, there are an awful lot of people who think the current presidential nominating process, and particularly the role of the early states, is absurd, and would love to see someone defy it. But it keeps not happening. The last two serious candidates who tried to skip the early states–Democrat Al Gore in 1988 and Rudy Giuliani in 2008 (well, he didn’t originally plan to skip the early states but shifted away from them when support was not forthcoming) went nowhere. Perhaps someone with a massive national following and special credibility with the conservative activists who view the early states as their God-given choke point on the GOP nomination could get away with starting late and elsewhere. But not John Kasich.
By: Ed Kilgore, Contributing Writer, Political Animal Blog, The Washington Monthly, January 23, 2015
“Absurdity Of The Argument Is It’s Greatest Strength”: Republicans Know Their Obamacare Case Is Bogus; Here’s The Proof
On Thursday, the government filed its brief to the Supreme Court in the case that will determine whether Obamacare subsidies disappear in three dozen states. Its argument is comprehensive, but one part of it speaks directly to the political history of the law, and the fact that everybody, including Republicans in Congress who now claim out of convenience that the law plainly limits subsidies to states that set up their own exchanges, always understood it to authorize subsidies everywhere.
The government confines this part of its argument to the legislative debate in the run up to the law’s passage in early 2010, but it could make the point more succinctly (and perhaps convincingly) by fast forwarding to early 2011. These days, Republicans up to and including Senate Majority Leader Mitch McConnell confidently pronounce that “the language of the law says … subsidies are only available for states that set up state exchanges.” But that’s not what they believed four years ago.
When Republicans took over the House in 2011, the political environment in Congress changed dramatically. Obamacare couldn’t be repealed, but it became fair game for damaging modifications, and the GOP took aim at it and other domestic spending programs whenever opportunities to offset the cost of new legislation arose. One of the first things Congress did back then was eliminate an Affordable Care Act provision that would have significantly expanded the number of expenses businesses are required to report to the IRS. Even before the law passed, business associations were livid about the “1099” requirement, and created such an uproar over it that the question quickly became how, not if, it would be repealed. Even Democrats wanted it gone.
The only problem was that the reporting requirement was expected to raise over $20 billion. Under GOP rule, it could only be offset with spending cuts elsewhere in the budget. As it happens, they found those spending cuts elsewhere in the ACA itself. Specifically, Republicans paid for repealing the 1099 provision by subjecting ACA beneficiaries to stricter rules regarding when they have to reimburse the government for subsidy overpayments. Make more money than you anticipated, and the government will claw back your premium assistance come tax season.
The congressional budget office scored the plan as essentially deficit neutral, and Republicans voted for it overwhelmingly. But you see the problem here. If the ACA plainly prohibits subsidies in states that didn’t set up their own exchanges, then there would be no subsidies in those states to claw back. And by April 2011, when the clawback passed, we already knew that multiple states were planning to protest ACA implementation and let the federal government set up their exchanges, including giant states like Florida, which now has a million beneficiaries. They would have needed a different, or additional, pay-for.
Obamacare’s legal challengers might chime in here to insist that their case is impervious to revelations like these. CBO’s analyses were premised on the idea that every state would set up its own exchange, and Republicans (and many Democrats) based their votes on what CBO told them. Other Democrats who actually understood the scheme may have simply pretended not to notice the problem. Nevertheless, they’d say, the law was designed to withhold subsidies from people whose states didn’t establish exchanges, and to ruin the individual and small-group insurance markets in those states, without providing any notice to either. In a perverse way, the absurdity of the challengers’ argument is it’s greatest strength. Because the scheme they insist Congress intentionally created was so far from Congress’ mind, it’s hard to find contemporaneous evidence that Congress absolutely didn’t mean to condition these subsidies. In much the same way, we can’t be sure that Congress didn’t mean to denominate those subsidies in Canadian dollars. A $ isn’t necessarily a $ after all.
But this familiar line of defense crumbles here. It is facially plausible—though incorrect—to posit that at the time the law passed, CBO believed subsidies would be available everywhere because it simply assumed every state would set up an exchange. But that assumption didn’t hold in April 2011. Something else must explain CBO’s 1099-repeal score, and the Republican votes that followed it. What we have in the form of this bill is clear evidence that everyone who voted for it (including every single Republican, save the two GOP congressmen and one GOP senator who weren’t present) understood the Affordable Care Act to provide subsidies everywhere.
Congress repealed the 1099 provision at an important moment—after multiple states announced that they would step back and let the federal government establish their exchanges, but before the IRS issued its proposed rule stipulating that subsidies would be available on both exchanges. The only thing Congress had to go on when it stiffened the clawback mechanism was its own reading of the Affordable Care Act, and Congress behaved exactly as you would expect. It operated with the understanding that subsidies were universal.
Today, many Republicans will tell you that the law plainly forecloses subsidies through the federal exchange. Six senators—John Cornyn, Ted Cruz, Orrin Hatch, Mike Lee, Rob Portman, and Marco Rubio—and nine congressmen—Marsha Blackburn, Dave Camp, Randy Hultgren, Darrell Issa, Pete Olson, Joe Pitts, Pete Roskam, Paul Ryan and Fred Upton—have even filed an amicus brief with the Supreme Court, which begins, “The plain text of the ACA reflects a specific choice by Congress to make health insurance premium subsidies available only to those who purchase insurance from ‘an Exchange established by the State….’ The IRS flouted this unambiguous statutory limitation, promulgating regulations that make subsidies available for insurance purchased not only through exchanges established by the States but also through exchanges established by the federal government.”
All of them, save Cruz, who was elected in 2012, voted for 1099 repeal.
In its brief, the government argues that “it was well understood that the Act gave ‘States the choice to participate in the exchanges themselves or, if they do not choose to do so, to allow the Federal Government to set up the exchanges.’ And it was abundantly clear that some States would not establish their own Exchanges.“ It was more than well understood. Congress actually endorsed that very proposition.
By: Brian Beutler, The New Republic, January 23, 2015
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