Eric Cantor’s Glaring Conflict Of Interest
When Eric Cantor shut down debt ceiling negotiations last week, it did more than just rekindle fears that the U.S. government might soon default on its debt obligations — it also brought him closer to reaping a small financial windfall from his investment in a mutual fund whose performance is directly affected by debt ceiling brinkmanship.
Last year the Wall Street Journal reported that Cantor, the No. 2 Republican in the House, had between $1,000 and $15,000 invested in ProShares Trust Ultrashort 20+ Year Treasury EFT. The fund aggressively “shorts” long-term U.S. Treasury bonds, meaning that it performs well when U.S. debt is undesirable. (A short is when the trader hopes to profit from the decline in the value of an asset.)
According to his latest financial disclosure statement, which covers the year 2010 and has been publicly available since this spring, Cantor still has up to $15,000 in the same fund. Contacted by Salon this week, Cantor’s office gave no indication that the Virginia Republican, who has played a leading role in the debt ceiling negotiations, has divested himself of these holdings since his last filing. Unless an agreement can be reached, the U.S. could begin defaulting on its debt payments on Aug. 2. If that happens and Cantor is still invested in the fund, the value of his holdings would skyrocket.
“If the debt ceiling isn’t raised, investors would start fleeing U.S. Treasuries,” said Matt Koppenheffer, who writes for the investment website the Motley Fool. “Yields would rise, prices would fall, and the Proshares ETF should do very well. It would spike.”
The fund hasn’t significantly spiked yet because many investors believe Congress will eventually raise the debt ceiling. However, since Cantor abruptly called off debt ceiling negotiations last Thursday, the fund is up 3.3 percent. Even if an agreement is ultimately reached before Aug. 2, the fund could continue to benefit between now and then from the uncertainty. (One tactic some speculators are using is to “trade the debt ceiling debate” — that is, to place short-term bets on prices as they fluctuate with the news out of Washington.)
Salon’s Andrew Leonard calls the debt ceiling negotiations “Washington’s titanic game of chicken,” and the longer the game goes on, the more skittish the bond markets will become.
“Cantor’s involvement in the fund and negotiations is not ideal,” Koppenheffer said. “I don’t think someone negotiating the debt ceiling should be invested in this kind of an ultra-short. We can only guess how much he understands what’s in his portfolio, but you’d think a politician would know better. It looks pretty bad.”
Cantor spokesman Brad Dayspring noted that U.S. Treasury bonds make up a large portion of the congressman’s pension, and said investment in ProShares ETF serves to balance that investment and to diversify his portfolio. Disclosure forms indicate that Cantor has considerable personal assets, including real estate in Virginia worth up to $1 million, and a number of six- and seven-figure loans to private entities and limited liability companies. So his investment in ProShares ETF represents only a small portion of his overall portfolio — but that share could grow a little larger just over a month from now.
By: Jonathan Easley, Editorial Fellow, Salo, June 27, 2011
David Prosser Probably Had A Very Good Reason For Putting His Hands On Colleague’s Neck
Wisconsin Supreme Court Justice David Prosser seems to have a bit of a temper! And he also seems to maybe have a bit of a history of verbally and perhaps physically attacking women. The latest, in case you haven’t heard, has the conservative justice accused of putting a liberal colleague in a “chokehold.” Here’s the thing: Even the anonymous sources defending Prosser say he put his hands around Justice Ann Walsh Bradley’s neck. They just say it was in self-defense.
Last year, Prosser screamed at a different (female) colleague, reportedly calling her a “bitch” and threatening to “destroy” her. When asked about all that, he blamed her for “goading” him into attacking her. That is classic psycho behavior, but I have to say that I did not expect Prosser to be accused of physical violence. And, you know, I wouldn’t expect “these women keep forcing me to attack them” to continue working as an excuse for attacking colleagues, but I guess I’m underestimating the conservative movement! Because everyone is running with the “Prosser was forced to put his hands on her neck because she ran towards him” story. Fox Nation headline: “WI Judge Prosser Smeared?” Human Events blames “Big Labor” for forcing Prosser to attack his colleagues.
Here’s Ann Althouse’s (a law professor!) defense:
ALSO: People may assume that the man is larger than the woman, but — from what I have heard — Bradley is significantly larger than Prosser. Bradley is also 7 years younger than Prosser, who is 68.
Compelling!
Bradley isn’t accused by anyone of laying a hand on Prosser. The case for Prosser is that Bradley came at him and he pushed her back in “defense,” but everyone seems to agree that his hands did end up on her neck. I don’t really think there’s any justification for that! And attacking women and then blaming them for making you do it is how abusive assholes justify their behavior. Not that I know the facts of this horrible case. But I tend to side with the people who don’t have a history of threatening to “destroy” people, because that is how comic book characters talk.
Anyway, now the right wants to recall Bradley, for attacking Prosser with her huge, terrifying neck.
By: Alex Pareene, Salon War Room, June 27, 2011
A Break For Wisconsin Democrats In Recall Fight
At first glance, this will seem deep in the weeds, but this just in from the Milwaukee Journal Sentinal constitutes a real break for Wisconsin Dems in their quest to take back the state senate in the recall wars:
State elections officials Monday took a Republican Assembly lawmaker off the ballot in a recall election against a Democratic senator.
The state Government Accountability Board voted unanimously to leave Rep. John Nygren (R-Marinette) off the ballot in the July 19 recall election for Sen. Dave Hansen (D-Green Bay) in the 30th Senate District. The board found that Nygren fell just short of collecting the 400 valid nominating signatures needed to qualify for the ballot, finding he collected only 398 valid signatures.
The accountability board had initially found that Nygren had submitted 424 qualifying signatures from voters. But after a number of signatures were challenged by Democrats, the accountability board found that 26 of those were invalid.
In a nutshell, what happened here is that one of the Dem state senators that Dems and labor thought was genuinely vulnerable to a recall challenge — Dave Hansen — will now no longer face his toughest challenger. Once it has been established through signature gathering that a recall election will be held against a sitting official, a potential challenger only requires 400 signatures to get on the ballot in the recall elections. Hansen’s leading challenger, John Nygren, fell short and was disqualified.
Hansen is now all but certain to face a challenge from a far weaker candidate — David VanderLeest. According to Journal Sentinel columnist David Bice, this latest challenger has a court record that includes disorderly conduct.
Kelly Steele, a spokesman for the labor-backed We Are Wisconsin, was thrilled about the new development, claiming that VanderLeest’s “rap sheet reads like a directory of the Wisconsin state criminal code.”
Here’s why this is important. In order to take back the state senate, Dems need to net three recall wins. Six Republicans face recall battles; while only three Dems do. But now one of the three Dems may be far safer than previously thought, which means Dems may have an easier time netting three wins — and that Wisconsin GOPers may have a tougher time hanging onto the state senate.
By: Greg Sargent, The Washington Post Plum Line, June 27, 2011
Tea-pocrisy Is Not Particularly Complicated
Michele Bachmann, at her announcement speech today, offering an extended paean to the Tea Party:
I am here in Waterloo, Iowa to announce today: We can win in 2012, and we will. Our voice has been growing louder and stronger. And it is made up of Americans from all walks of life like a three-legged stool. It’s the peace through strength Republicans, and I’m one of them. It’s fiscal conservatives, and I’m one of them, and it’s social conservatives, and I’m one of them. It’s the Tea Party movement, and I’m one of them.
The liberals, and to be clear I’m NOT one of them, want you to think the Tea Party is the Right Wing of the Republican Party. But it’s not. It’s made up of disaffected Democrats, independents, people who’ve never been political a day in their life, libertarians, Republicans. We’re people who simply want America back on the right track again.
The Los Angeles Times yesterday, revealing some very un-Tea-Party-like behavior from the Bachmann family:
Rep. Michele Bachmann has been propelled into the 2012 presidential contest in part by her insistent calls to reduce federal spending, a pitch in tune with the big-government antipathy gripping many conservatives.
But the Minnesota Republican and her family have benefited personally from government aid, an examination of her record and finances shows. A counseling clinic run by her husband has received nearly $30,000 from the state of Minnesota in the last five years, money that in part came from the federal government. A family farm in Wisconsin, in which the congresswoman is a partner, received nearly $260,000 in federal farm subsidies.
And she has sought to keep federal money flowing to her constituents. After publicly criticizing the Obama administration’s stimulus program, Bachmann requested stimulus funds to support projects in her district.
Bachmann yesterday defended herself by describing the clinic funding and “one time training money” for employees that didn’t financially benefit Bachmann’s husband. But presumably the clinic itself benefitted from having government money train its workers. Otherwise it’s hard to see why Bachmann’s husband’s clinic wanted the funding. And of course, there’s all that stimulus money Bachmann wants for her district.
I don’t really know if these revelations will damage Bachmann’s status as the Tea Party’s leading warrior queen (yes, you have been dethroned, Sarah Palin). That’s because this sort of hypocrisy is widespread among Tea Partyers themselves — let’s call it “Tea-pocrisy.”
As Steve Benen has been documenting — see here and here — there’s no shortage of officials and political activists who embrace the Tea Party even as they benefit directly or indirectly from government generosity themselves. Some House GOP freshmen have even been the direct recipient of farm subsidies. And now the relevations about Tea Party chieftain Bachmann herself.
The point, as always, is that Tea Partyers are frequently for government spending as long as it’s benefitting the right people. Tea-pocrisy is not particularly complicated.
By: Greg Sargent, The Washington Post Plum Line, June 27, 2011
Democrats Must Be Adults As GOP Redefines ‘Tax Increase’
OK, this isn’t exactly asking what the meaning of “is,” “is,” but it is close.
What is a tax increase? Is it letting a previous, temporary tax cut expire and go back to the earlier tax? Is it the “closing of a loophole” to remove a favorable tax break put in place for a specific industry? Is it the imposition of a fee or the increase in a fee? Is it really anything that results in an increase in revenue?
We can go on and on here, but what we are really talking about is not an esoteric debate. If you listen to Republicans right now, particularly Rep. Eric Cantor, who picked up his marbles and went home from White House negotiations, you would think that everything is a “tax increase.”
The sad aspect of the current debate is that what many Republicans are espousing is that added revenue should be “off the table.” This is clearly a nonstarter for truly solving our problems.
It also is inflexible and holds to the absurd notion that taxes can never go up; they can only go down. That sort of reminds me of: Housing prices can only go up; they don’t go down! Hmmm…
Democrats, to be honest, have to be the responsible party when it comes to providing balance to the cuts/revenue equation. They need not fear the boogeyman crying “tax raiser!”
Americans, by large majorities, understand that the richest 2 percent of their fellow citizens have seen rapid and large increases in their wealth of late, and asking them to pay their fair share is a no brainer. Americans understand that providing huge tax breaks to oil companies already making huge profits makes no sense. Americans understand that rewarding companies for parking their profits overseas or exporting jobs is untenable, and such behavior should not entitle them to special tax “incentives.”
In short, most Americans know that adequate revenue is part of the critical balance that will create and keep jobs as well as attack our debt problem. It is not about eviscerating government and tearing apart our social fabric. Republicans as conservative as Ronald Reagan have known the meaning of a tax increase and have not hesitated to use it.
By: Peter Fenn, U. S. News and World Report, June 27, 2011
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