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
June 28, 2011
Posted by raemd95 |
Budget, Congress, Conservatives, Debt Ceiling, Deficits, Economic Recovery, Economy, GOP, Government, Government Shut Down, Politics, Republicans, Right Wing | Budget Negotiations, Conflict of Interest, Ethics, Government Default, Investments, Mutual Funds, ProShares Trust ETF, Rep Eric Cantor, Speculators, Treasury Bonds, U. S. Debt, Ultra Shorts |
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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
June 27, 2011
Posted by raemd95 |
Conservatives, Elections, GOP, Government, Ideologues, Ideology, Iowa Caucuses, Politics, Republicans, Right Wing, Taxes, Teaparty | Earmarks, GOP Presidential Primaries, Government Assistance, Libertarians, Minnesota, Rep Michele Bachmann, Stimulus Funds, Subsidies, Wisconsin |
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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
June 27, 2011
Posted by raemd95 |
Budget, Class Warfare, Congress, Conservatives, Corporations, Debt Ceiling, Deficits, Democracy, Economic Recovery, Economy, GOP, Government, Government Shut Down, Ideologues, Jobs, Lawmakers, Middle Class, Politics, Republicans, Right Wing, Tax Evasion, Tax Increases, Tax Loopholes, Taxes, Wealthy | Rep Eric Cantor, Tax Breaks, Tax cuts, Tax Incentives, Tax Increases, Tax Revenues |
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Today, Gov. Scott Walker will sign the controversial state budget bill into law. He was originally scheduled to sign his budget at Badger Sheet Metal Works, a private business operated by a man with six felony tax convictions, in Green Bay, at 2 p.m. on Sunday. However, now that Gregory A. DeCaster’s tax troubles have been publicized, the governor’s office has announced a new locationfor the ceremony: Fox Valley Metal Tech, also in Green Bay.
“While Mr. DeCaster has served his time in jail and paid his debt to society, it is fitting that the governor would choose to sign this budget at a business owned by someone who was once convicted of the felony of tax evasion,” said Marc Norberg, a Wisconsin native and assistant to the general president of the Sheet Metal Workers’ International Association.
Department of Administration Secretary Mike Huebsch said something quite similar earlier in the day when he told WisPolitics, “Green Bay, and certainly the company that we’re going to, reflects really what this budget and what Gov. Walker’s first term here is all about.”
Will the budget bill be a job creator?
According to the Milwaukee Journal Sentinel, Walker chose to sign the budget at a manufacturer “to emphasize the budget’s focus on job creation.”
Gov. Scott Walker boasted that his budget proposals and other controversial policies have created 25,000 jobs in Wisconsin since the start of the year at a discussion led by the U.S. Chamber of Commerce on Monday in Washington, D.C.
CMD contacted the Center for Wisconsin Strategy, a field laboratory for high-road economic development in the state for a bit of perspective on this spin.
“While we don’t think the governor has that much ability to affect overall employment … to the extent that he has, he has arguably hurt the state,” said Sam Munger, managing director of the Center on Wisconsin Strategy’s Center for State Innovation.
Munger said a significant amount of provisions in the budget will end up destroying the quality of jobs that currently exist.
According to a recent Center of Wisconsin Strategy report, the 8 percent wage cut Walker issued to the 380,000 jobs under his control could cost Wisconsin about 22,000 additional jobs, “because families that rely on the income from their public-sector jobs will have less to spend in their local communities.”
“If you look all the way through the budget … his primary motivation has not been keeping jobs, it’s been remaking the state as a corporate welfare haven,” Munger said, citing Walker’s refusal of federal stimulus money and federal broadband money and his refusal to engage the state in other job-generating projects, while rewarding the wealthy and corporations with a range of tax breaks.
The budget’s cuts to municipalities will suck money out of localities, Munger said, adding that pulling money out of circulation will cost jobs in an indirect or induced way. In contrast to the rosy news coming from the Governor’s mansion, the most recent data from the Department of Workforce Development shows that unemployment increased in most Wisconsin cities in the month of May. The report shows that unemployment rates increased in 25 cities with a population of 25,000 people or more, with only Stevens Point experiencing a slight drop, from 7.9 percent to 7.8 percent.
Other budgetary measures that Munger said threaten job quality are cuts to childcare subsidies for working parents, making it more difficult to obtain unemployment insurance and rolling back child labor laws.
“Everything that he has done in the budget that related to jobs or employment has either killed jobs, destroyed the quality of jobs or been a giant giveaway to corporations,” Munger said.
By: Jessica Opoien, Opinion Writer, Center For Media and Democracy, June 26, 2011
June 26, 2011
Posted by raemd95 |
Class Warfare, Collective Bargaining, Conservatives, Corporations, Democracy, Economy, GOP, Gov Scott Walker, Government, Governors, Ideologues, Ideology, Jobs, Labor, Middle Class, Politics, Public Employees, Republicans, Right Wing, State Legislatures, States, Tax Evasion, U.S. Chamber of Commerce, Union Busting, Unions, Wisconsin, Wisconsin Republicans | Badger Sheet Metal Works, Center for Wisconsin Strategy, Child Subsidies, Fox Valley Metal Tech, Gregory A. DeCaster, Mike Huebsch, Municipalities, Wages, Wisconsin Budget, Wisconsin Politics |
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As New Jersey throws its weight behind Wisconsin and Ohio in rolling back the collective bargaining rights of public sector employees, we are once again going to hear the argument that public sector unions ought not to be confused with their private sector counterparts. They’re two different animals entirely.
Private sector workers, so the argument goes, have historically organized to win better working conditions and a bigger piece of the pie from profit-making entities like railroads and coal mines. But public sector employees work for “us,” the ultimate nonprofit, and therefore are not entitled to the same protections.
This is a fond notion at best. Yes, public school teachers were never gunned down by Pinkerton guards; municipal firefighters were never housed in company-owned shanties by the side of the tracks. But none of this cancels their rights as organized workers. No ancestor of mine voted to ratify the Constitution, either, but I have the same claim on the Bill of Rights as any Daughter of the American Revolution. Collective bargaining is an inheritance and we are all named in the will.
The two-labors fallacy rests on an even shakier proposition: that profits exist only where there is an accountant to tally them. This is economics reduced to the code of a shoplifter — whatever the security guard doesn’t see the store won’t miss. If my wife and I have young children but are still able to enjoy the double-income advantages of a childless couple, isn’t that partly because our children are being watched at school? If I needn’t invest some of my household’s savings in elaborate surveillance systems, isn’t that partly because I have a patrol car circling the block? The so-called “public sector” is a profit-making entity; it profits me.
Denying this profitability has an obvious appeal to conservatives. It allows a union-busting agenda to hide behind nice distinctions. “We’re not anti-union, we’re just against certain kinds of unions.” But the denial isn’t exclusive to conservatives; in fact, it informs the delusional innocence of many liberals. I mean the idea that exploitation is the exclusive province of oil tycoons and other wicked types. If you own a yoga center or direct an M.F.A. program, you can’t possibly be implicated in the more scandalous aspects of capitalism — just as you can’t possibly be to blame for racism if you’ve never grown cotton or owned a slave.
The fact is that our entire economic system rests on the principle of paying someone less than his or her labor is worth. The principle applies in the public sector no less than the private. The purpose of most labor unions has never been to eliminate the profit margin (the tragedy of the American labor movement) but rather to keep it within reasonable bounds.
But what about those school superintendents and police chiefs with their fabulous pensions, with salaries and benefits far beyond the average worker’s dreams?
Tell me about it. This past school year, I worked as a public high school teacher in northeastern Vermont. At 58 years of age, with a master’s degree and 16 years of teaching experience, I earned less than $50,000. By the standards of the Ohio school superintendent or the Wisconsin police chief, my pension can only be described as pitiful, though the dairy farmer who lives down the road from me would be happy to have it.
He should have it, at the least, and he could. If fiscal conservatives truly want to “bring salaries into line” they should commit to a model similar to the one proposed by George Orwell 70 years ago, with the nation’s highest income exceeding the lowest by no more than a factor of 10. They should establish that model in the public sector and enforce it with equal rigor and truly progressive taxation in the private.
Right now C.E.O.’s of multinational corporations earn salaries as much as a thousand times those of their lowest-paid employees. In such a context complaining about “lavish” public sector salaries is like shushing the foul language of children playing near the set of a snuff film. Whom are we kidding? More to the point, who’s getting snuffed?
By: Garret Keizer, Op-Ed Contributor, The New York Times Opinion Pages, June 24, 2011
June 26, 2011
Posted by raemd95 |
Businesses, Class Warfare, Collective Bargaining, Conservatives, Constitution, Corporations, Democracy, Economy, Employment Descrimination, GOP, Government, Governors, Ideology, Labor, Lawmakers, Middle Class, Politics, Republicans, Right Wing, State Legislatures, States, Teachers, Union Busting, Unions, Wealthy | Anti-Union, Income, Maine, New Jersey, Ohio, Private Employees, Private Sector, Public Employees, Taxes, Wages, Wisconsin, Workers |
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