I can’t help but think the vast majority of the public just doesn’t fully appreciate what’s transpiring here.
We’re dealing, after all, with fairly obscure legal mechanisms. Most Americans don’t know what the federal debt ceiling is, and in fairness, they’ve never had to. It’s a law that was approved more than eight decades ago, and hasn’t been particularly controversial or even relevant since. Policymakers have always realized they have an obligation — legal, economic, moral, and otherwise — to do the right thing.
The United States is like the Lannisters: we always pay our debts. And in the case of the debt ceiling, we’re talking about money we’ve already spent — this is the equivalent of getting a credit card bill for charges we’ve already made. The entirety of the Republican Party — in the House, in the Senate, among its presidential candidates — has said it might pay the bill, but only if Democrats agree to take trillions of dollars out of a fragile economy.
And if Democrats don’t do enough to make Republicans happy, GOP officials will simply refuse to do their duty. They know the consequences would be severe for the nation and the world. They apparently don’t care.
Americans almost certainly can’t appreciate the extent to which they’ve made a tragic mistake. Voters perceived the Republican Party has a conservative governing party, capable of responsible center-right governance, and rewarded the GOP handsomely in 2010. What voters probably didn’t understand are the similarities between today’s Republican Party and a not-terribly-bright organized-crime family, run entirely by petulant children.
The Economist, a conservative publication, had a fascinating editorial this week, explaining that Republicans are creating a crisis, on purpose, for no reason. The United States has a manageable debt, low interest rates, low inflation, and the ability to borrow on the cheap. But because right-wing extremists are chiseling away at our political system, we’re quickly approaching a point of no return.
The sticking-point is not on the spending side. It is because the vast majority of Republicans, driven on by the wilder-eyed members of their party and the cacophony of conservative media, are clinging to the position that not a single cent of deficit reduction must come from a higher tax take. This is economically illiterate and disgracefully cynical.
This newspaper has a strong dislike of big government; we have long argued that the main way to right America’s finances is through spending cuts. But you cannot get there without any tax rises. In Britain, for instance, the coalition government aims to tame its deficit with a 3:1 ratio of cuts to hikes. America’s tax take is at its lowest level for decades: even Ronald Reagan raised taxes when he needed to do so.
And the closer you look, the more unprincipled the Republicans look…. Both parties have in recent months been guilty of fiscal recklessness. Right now, though, the blame falls clearly on the Republicans.
The Economist added that this is “a gamble where you bet your country’s good name.”
I suspect there are many saying, “We get it; they’re reckless.” But that’s not enough — no one given this much power is supposed to be this reckless. Republicans gained power because voters were frustrated with high unemployment, and yet GOP leaders are threatening to deliberately create a crisis that would make unemployment much worse. And the breaking point is very soon.
All of this could go away in a heartbeat. Republicans could do, today, exactly what they did repeatedly during the Bush years: simply vote to raise the debt ceiling in a clean bill and move on. The entire process could take literally a few minutes.
But GOP officials don’t want to. They want to play a game in which the entire world could lose.
How is this not the biggest political scandal in modern American history? How is it that those who claim the high ground on patriotism could put our financial well being on the line, on purpose, when they don’t have to?
By: Steve Benen, Contributing Writer, Political Animal, Washington Monthly, July 10, 2011
July 11, 2011
Posted by raemd95 |
Budget, Class Warfare, Congress, Conservatives, Deficits, Democracy, Democrats, Economic Recovery, Economy, Elections, GOP, Government, Government Shut Down, Ideologues, Ideology, Lawmakers, Media, Middle Class, Politics, Public, Republicans, Right Wing, Taxes, Tea Party, Unemployment | Global Economy, Leadership, Spending Cuts, Tax Revenue |
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National conservatives and Wisconsin Republicans have settled on a new talking point that they’re flogging relentlessly in the recall wars: Scott Walker’s proposal to bust public employee unions is already a success. Mere days after it became law.
In making this claim, it seems that Walker and conservative pundits are singing from the same sheet music. Walker made it on Face the Nation this Sunday; Rush Limbaugh has pushed it on his show; and Wisconsin GOP’ers facing recall campaigns are hammering away at it on the stump and in local media.
The notion that they’re pushing, however, is laughably bogus.
The basic claim focuses on a single school district out of hundreds — the Kaukauna School District, near Appleton, Wisconsin. After Scott Walker’s law went into effect last week, school officials announced new policies that they say will turn a deficit of $400,000 into a surplus of $1.5 million. Conservatives are claiming that this is because of Walker’s reforms to collective bargaining rules — the savings are the result, they say, of the fact that teachers and other school staff will pay more in health care costs and pension costs.
On Face the Nation this weekend, Walker amplified this claim, pointing to this specific school district as proof that his reforms had given schools and local governments the “tools” they need to turn their budgets around. “Those are the things we promised,” Walker exulted.
Limbaugh has also pushed this claim hard, arguing on his show recently that this proved Walker’s critics wrong. “Remember all of those fights, all of those protests, and all the bickering, and all the caterwauling, and all the complaining from these public employees in Wisconsin about taking their collective bargaining rights away?” Rush said. “That law goes into effect and immediately turns a $400,000 budget deficit into a one-and-a-half-million-dollar surplus in one school district.”
But here’s the thing: The collective bargaining ban, in and of itself, was not responsible for achieving these savings and this surplus. As the Appleton Post Crescent reports, the teachers union had already offered up financial concessions that would have produced almost identical savings and an almost identical surplus.
What’s more, the use of this one district to declare Walker’s policies a success is almost comical in its cherry-picking. There are 424 school districts in Wisconsin, and as the AP recently noted, Walker’s policies mean draconian budget cuts to 410 of them, with labor officials and school districts predicting increased class sizes and layoffs.
Walker’s premature declaration of victory — and the right wing echo chamber’s flacking of it — could look awfully silly when the full bill for his policies really comes due. And the notion that this one school district’s fiscal success is in any way a referendum on the most controversial aspect of Walker’s union busting proposal is laughable. This fight has never been about public employees’ unwillingness to make fiscal concessions — and always about stripping them of their rights.
By: Greg Sargent, The Washington Post, July 6, 2011
July 7, 2011
Posted by raemd95 |
Class Warfare, Collective Bargaining, Conservatives, Democracy, Economy, Elections, GOP, Gov Scott Walker, Government, Governors, Health Care Costs, Ideologues, Ideology, Labor, Lawmakers, Media, Middle Class, Politics, Press, Public Employees, Republicans, Right Wing, State Legislatures, States, Union Busting, Unions, Wisconsin, Wisconsin Republicans | Appleton WI, Kaukauna School District, Pensions, Teachers, Wisconsin Recall |
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It turns out that the good times are even better than we thought for American chief executives.
Among the executives who registered huge gains in the value of their company stock and options in 2010 were Warren E. Buffett, the chief executive of Berkshire Hathaway, top, Lawrence J. Ellison of Oracle, center, and Jeffrey P. Bezos of Amazon.com. Together, the three men’s holdings climbed by more than $13 billion for the year.
A preliminary examination of executive pay in 2010, based on data available as of April 1, found that the paychecks for top American executives were growing again, after shrinking during the 2008-9 recession.
But that study, conducted for The New York Times by Equilar, an executive compensation data firm based in Redwood City, Calif., was just an early snapshot, and there were even more riches to come. Some big companies had not yet disclosed their executive compensation.
So Sunday Business asked Equilar to run the numbers again.
Brace yourself.
The final figures show that the median pay for top executives at 200 big companies last year was $10.8 million. That works out to a 23 percent gain from 2009. The earlier study had put the median pay at a none-too-shabby $9.6 million, up 12 percent.
Total C.E.O. pay hasn’t quite returned to its heady, prerecession levels — but it certainly seems headed there. Despite the soft economy, weak home prices and persistently high unemployment, some top executives are already making more than they were before the economy soured.
Pay skyrocketed last year because many companies brought back cash bonuses, says Aaron Boyd, head of research at Equilar. Cash bonuses, as opposed to those awarded in stock options, jumped by an astounding 38 percent, the final numbers show.
Granted, many American corporations did well last year. Profits were up substantially. As a result, many companies are sharing the wealth, at least with their executives. “We’re seeing a lot of that reflected in the pay,” Mr. Boyd says.
And at a time of so much tumult in the media business, it might be surprising that some executives in media and communications were among the most richly rewarded last year.
The preliminary and final studies put Philippe P. Dauman, the chief executive of Viacom, at the top of the list. Mr. Dauman made $84.5 million last year, after signing a new long-term contract that included one-time stock awards.
Leslie Moonves, of the CBS Corporation, got a 32 percent raise and reaped $56.9 million. Michael White of DirecTV was paid $32.9 million, while Brian L. Roberts of the Comcast Corporation and Robert A. Iger of the Walt Disney Company each received pay packages valued at $28 million.
“Media firms seemed to be paying a lot,” said Carol Bowie, head of compensation policy development at ISS Governance, which advises large investors on corporate governance issues like proxy votes. “Media companies in general tend to be high-payers, and they tend to feed off each other.”
Other big payers included oil and commodities companies like Exxon Mobil and a few technology giants like Oracle and I.B.M.
Some of the other highly paid executives on the new list who were not in the April survey are Gregg W. Steinhafel of Target, who had a $23.5 million pay package; Michael E. Szymanczyk of Altria, $20.77 million; and Richard C. Adkerson of Freeport-McMoRan Copper & Gold, $35.3 million.
Most ordinary Americans aren’t getting raises anywhere close to those of these chief executives. Many aren’t getting raises at all — or even regular paychecks. Unemployment is still stuck at more than 9 percent.
In some ways, chief executives seem to live in a world apart when it comes to pay. As long as shareholders think that the top brass is doing a good job, executives tend to be well paid, whatever the state of the broader economy. And some corporate boards were probably particularly generous in 2010 after a few relatively lean years for their top executives. In other words, some of this was makeup pay.
“What is of more concern to shareholders is that it looks like C.E.O. pay is recovering faster than company fortunes,” says Paul Hodgson, chief communications officer for GovernanceMetrics International, a ratings and research firm.
According to a report released by GovernanceMetrics in June, the good times for chief executives just keep getting better. Many executives received stock options that were granted in 2008 and 2009, when the stock market was sinking.
Now that the market has recovered from its lows of the financial crisis, many executives are sitting on windfall profits, at least on paper. In addition, cash bonuses for the highest-paid C.E.O.’s are at three times prerecession levels, the report said.
Of course, these sorts of pay figures invariably push the buttons of many ordinary Americans. Yes, workers’ 401(k)’s are looking better than they did in some recent years, but many investors still have not recovered from the hit they took during the financial crisis. And, of course, millions are out of work or trying to hold on to their homes — or both.
And it’s not as if most workers are getting fat raises. The average American worker was taking home $752 a week in late 2010, up a mere 0.5 percent from a year earlier. After inflation, workers were actually making less.
On the flip side, some chief executives have consistently taken token salaries — sometimes, $1 — choosing instead to rely on their ownership stakes for wealth. These stock riches don’t show up on the current pay lists, but they can be huge.
Warren E. Buffett, for instance, saw his stock holdings rise last year by 16 percent, to $46 billion. Other longtime chief executives or founders who are sitting on billions of paper profits include Jeffrey P. Bezos of Amazon.com and Michael S. Dell, the founder of Dell.
Resurgent executive pay has some corporate watchdogs worried that companies have already forgotten the lessons of the bust. Boards have promised to tie executive pay to company success, but by some measures pay is rising faster than performance. The median pay raise for chief executives last year — 23 percent — was roughly in line with the increase in net corporate profits. But it far exceeded the median gain in shareholders’ total return, which was 16 percent, as well as the median gain in revenue, which was 7 percent.
FOR the moment, shareholders aren’t storming executive suites. And while they received a say on pay under new federal rules last year, their votes are nonbinding. In other words, boards can still do as they please.
Pay specialists say companies are taking a hard look at these votes. Still, only about 1.5 percent of the 200 companies in the Equilar study were rebuffed by their shareholders on pay. A vast majority of the votes passed overwhelmingly, with 80 percent or 90 percent support, according to Mr. Boyd of Equilar.
Mr. Boyd says companies are making an effort to explain their pay plans. “We saw companies take it very seriously,” he says of the new rule.
In some respects, the mere possibility that shareholders might reject a proposed pay plan is enough to make corporate executives think again. Ms. Bowie of ISS says that outrageous payouts — such as so-called tax gross-ups, in which companies cover executives’ tax bills on perks like corporate jets — are becoming rarer.
Disney for instance, eliminated tax gross-ups this year in the face of shareholder ire, she said.
Company directors have the power to rein in runaway executive pay, but it is unclear whether either they or shareholders will do so in 2012. “It can be done if there is the will,” Ms. Bowie says.
By: Pradnya Joshi, The New York Times, July 2, 2011
July 4, 2011
Posted by raemd95 |
Big Business, Class Warfare, Congress, Conservatives, Consumers, Corporations, Democracy, Economic Recovery, Economy, Equal Rights, GOP, Media, Middle Class, Minimum Wage, Politics, Republicans, Tax Loopholes, Taxes, Unemployed, Unemployment, Wall Street, Wealthy | 401k's, Altria, Amazon.com, Berkshire Hathaway, Cash Bonuses, CBS Corporation, CEO's, Comcast, Corporate Profits, DirecTV, Executive Pay, Exxon Mobile, Freeport-McMoRan Copper and Gold, IBM, Income, Investors, Oracle, Shareholders, Stock Options, Target, Viacom, Walt Disney Company, Workers |
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Republican presidential hopeful Mitt Romney has focused most his message on attacking President Obama’s economic record. To that end, the former governor has repeated a specific phrase over and over again: “He made it worse.”
“He” in this sentence is the president, and “it” references the economy. Romney has used the exact same line, word for word, in debate appearances, press releases, exchanges with voters, and even his campaign kick-off speech, when Romney said of the president, “When he took office, the economy was in recession. He made it worse.”
This is, in other words, one of the driving messages of Romney’s presidential campaign. Unfortunately for the GOP frontrunner, it’s also a lie.
With that in mind, Romney held a press conference yesterday in Pennsylvania, and NBC’s Sue Kroll, to her enormous credit, asked the candidate the question no other reporter has been willing to pose.
[Kroll] asked the former Massachusetts governor why he believes that Obama’s policies have made the economy worse — when the economy is now growing (and not shrinking like it was in 2009), when the Dow is climbing (and no longer in a free-fall like it was in ‘09), and when the unemployment rate is down a full percentage point from where it was in Oct. ‘09.
Romney offered a response that was nothing short of extraordinary.
“I didn’t say that things are worse…. What I said was that economy hasn’t turned around.”
When a candidate lies, it’s a problem. When a candidate lies about lying, it’s a bigger problem.
Even for Romney, who’s flip-flopped more often and on more issues than any American politician in a generation, this is ridiculous. He’s argued repeatedly that Obama made the economy worse, and when asked to defend the bogus claim, says he never made the argument in the first place.
Romney does realize that Google exists, right? That it’s pretty easy to find all kinds of examples of him saying exactly what he claims to have never said?
What’s more, as part of his defense, Romney’s new line — the economy “hasn’t turned around” — is itself wrong. The economy was shrinking, now it’s growing. The economy was hemorrhaging jobs, now it’s gaining jobs. The stock market was collapsing, now it’s soaring. When compared to where things were when the president took office, the economy has obviously turned around, even if it’s far short of where it needs to be.
I’m not sure why this isn’t a bigger deal this morning. It was amusing when Michele Bachmann falsely characterized John Quincy Adams as a Founding Father, but Romney getting caught telling a blatant falsehood about one of the central themes of his presidential campaign is infinitely more important.
Remember when John Kerry, talking about Iraq funding, said he was for it before he was against it? Romney’s incoherence yesterday is every bit as interesting.
By: Steve Benen, Contributing Writer, Political Animal, The Washington Monthly, July 1, 2011
July 1, 2011
Posted by raemd95 |
Conservatives, Democracy, Economic Recovery, Economy, Elections, GOP, Government, Ideologues, Ideology, Jobs, Media, Mitt Romney, Politics, President Obama, Republicans | Dow Jones, Flip Flop, John Kerry, Michele Bachmann, Politicians, Recession, Stock Market, Sue Kroll, Unemployment Rate |
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One of the more common Republican criticisms of President Obama, at least in the context of the debt-reduction talks, is that he hasn’t shown enough “leadership.” Senate Minority Leader Mitch McConnell (R-Ky.) took to the floor late last week to cry, “Where in the world has the president been for the last month? … He’s the one in charge.”
One of the parts of Obama’s press conference this morning that I especially liked was the president’s pushback against the notion that he’s been a passive observer in this process.
“I’ve got to say, I’m very amused when I start hearing comments about, ‘Well, the president needs to show more leadership on this.’ Let me tell you something. Right after we finished dealing with the government shutdown, averting a government shutdown, I called the leaders here together. I said we’ve got to get this done. I put Vice President Biden in charge of a process — that, by the way, has made real progress — but these guys have met, worked through all of these issues. I met with every single caucus for an hour to an hour and a half each — Republican senators, Democratic senators; Republican House, Democratic House. I’ve met with the leaders multiple times. At a certain point, they need to do their job.
“And so, this thing, which is just not on the level, where we have meetings and discussions, and we’re working through process, and when they decide they’re not happy with the fact that at some point you’ve got to make a choice, they just all step back and say, ‘Well, you know, the president needs to get this done.’ They need to do their job.
“Now is the time to go ahead and make the tough choices. That’s why they’re called leaders…. They’re in one week, they’re out one week. And then they’re saying, ‘Obama has got to step in.’ You need to be here. I’ve been here. I’ve been doing Afghanistan and bin Laden and the Greek crisis. You stay here. Let’s get it done.”
I’m glad the president pressed this, not just because he sounded a bit like Truman slamming the do-nothing Congress, but because many in the media have bought into the notion that lawmakers have dug in on this, and the president hasn’t. That’s nonsense.
Congressional Republicans haven’t been slaving away, trying to strike a credible deal. They’ve been making threats, drawing lines in the sand, and barking orders about what is and is not allowed to be on the negotiating table.
“They need to do their job.” Part of those responsibilities includes working in good faith to find an equitable compromise with a Democratic Senate and a Democratic White House, and then doing what they must do, but what the president cannot do: passing the damn debt-ceiling increase.
Tick tock.
By: Steve Benen, Contributing Writer, Political Animal, The Washington Monthly, June 29, 2011
June 29, 2011
Posted by raemd95 |
Congress, Conservatives, Constitution, Debt Ceiling, Democracy, Democrats, Economic Recovery, Economy, Federal Budget, GOP, Government, Government Shut Down, Ideologues, Ideology, Journalists, Lawmakers, Media, Politics, President Obama, Press, Pundits, Republicans, Right Wing, Senate | Afghanistan, Do Nothing Congress, Greek Crisis, Harry Truman, House Republicans, Leadership, Osama bin Laden, Rep Eric Cantor, Sen Mitch McConnell, Senate Minority Leader, Speaker John Boehner, VP Joe Biden |
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