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“Consent” For The Public Good: What Our Declaration Of Independence Really Said

Our nation confronts a challenge this Fourth of July that we face but rarely: We are at odds over the meaning of our history and why, to quote our Declaration of Independence, “governments are instituted.”

Only divisions this deep can explain why we are taking risks with our country’s future that we’re usually wise enough to avoid. Arguments over how much government should tax and spend are the very stuff of democracy’s give-and-take. Now, the debate is shadowed by worries that if a willful faction does not get what it wants, it might bring the nation to default.

This is, well, crazy. It makes sense only if politicians believe — or have convinced themselves — that they are fighting over matters of principle so profound that any means to defeat their opponents is defensible.

We are closer to that point than we think, and our friends in the Tea Party have offered a helpful clue by naming their movement in honor of the 1773 revolt against tea taxes on that momentous night in Boston Harbor.

Whether they intend it or not, their name suggests they believe that the current elected government in Washington is as illegitimate as was a distant, unelected monarchy. It implies something fundamentally wrong with taxes themselves or, at the least, that current levels of taxation (the lowest in decades) are dangerously oppressive. And it hints that methods outside the normal political channels are justified in confronting such oppression.

We need to recognize the deep flaws in this vision of our present and our past. A reading of the Declaration of Independence makes clear that our forebears were not revolting against taxes as such — and most certainly not against government as such.

In the long list of “abuses and usurpations” the Declaration documents, taxes don’t come up until the 17th item, and that item is neither a complaint about tax rates nor an objection to the idea of taxation. Our Founders remonstrated against the British crown “for imposing taxes on us without our consent.” They were concerned about “consent,” i.e. popular rule, not taxes.

The very first item on their list condemned the king because he “refused his assent to laws, the most wholesome and necessary for the public good.” Note that the signers wanted to pass laws, not repeal them, and they began by speaking of “the public good,” not about individuals or “the private sector.” They knew that it takes public action — including effective and responsive government — to secure “life, liberty and the pursuit of happiness.”

Their second grievance reinforced the first, accusing the king of having “forbidden his governors to pass laws of immediate and pressing importance.” Again, our forebears wanted to enact laws; they were not anti-government zealots.

Abuses three through nine also referred in some way to how laws were passed or justice was administered. The document doesn’t really get to anything that looks like Big Government oppression (“He has erected a multitude of new offices, and sent hither swarms of officers to harrass our people, and eat out their substance”) until grievance No. 10.

This misunderstanding of our founding document is paralleled by a misunderstanding of our Constitution. “The federal government was created by the states to be an agent for the states, not the other way around,” Gov. Rick Perry of Texas said recently.

No, our Constitution begins with the words “We the People” not “We the States.” The Constitution’s Preamble speaks of promoting “a more perfect Union,” “Justice,” “the common defense,” “the general Welfare” and “the Blessings of Liberty.” These were national goals.

I know states’ rights advocates revere the 10th Amendment. But when the word “states” appears in the Constitution, it typically is part of a compound word, “United States,” or refers to how the states and their people will be represented in the national government. We learned it in elementary school: The Constitution replaced the Articles of Confederation to create a stronger federal government, not a weak confederate government. Perry’s view was rejected in 1787 and again in 1865.

We praise our Founders annually for revolting against royal rule and for creating an exceptionally durable system of self-government. We can wreck that system if we forget our Founders’ purpose of creating a representative form of national authority robust enough to secure the public good. It is still perfectly capable of doing that. But if we pretend we are living in Boston in 1773, we will draw all the wrong conclusions and make some remarkably foolish choices.

By: E. J. Dionne, Opinion Writer, The Washington Post, July 3, 2011

July 4, 2011 Posted by | Congress, Conservatives, Constitution, Democracy, Equal Rights, Freedom, GOP, Government, Government Shut Down, Ideologues, Ideology, Lawmakers, Liberty, Politics, Populism, Public, Republicans, Revolution, Right Wing, States, Taxes, Tea Party | , , , , , , , , , , , , | Leave a comment

Executive Pay: We Knew They Got Raises. But This?

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 | 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 | , , , , , , , , , , , , , , , , , , , , , , | Leave a comment

Mitch McConnell’s Insincere Invitation

One can only dream of a Republican Party led by grown-ups. Instead, we have this.

Senate Republican Leader Mitch McConnell (R-Ky.) challenged President Obama on Thursday to meet with Senate Republicans to hear firsthand about the political reality of passing tax increases through Congress.

A day after Obama challenged Republicans to give up special tax breaks for corporate jets and major oil companies, McConnell issued a challenge of his own on the Senate floor.

“I’d like to invite the president to come to the Capitol today to meet with Senate Republicans. Any time this afternoon if he’s available, to come on up to the Capitol,” McConnell said. “That way he can hear directly from Senate Republicans … why what he’s proposing will not pass.”

McConnell says once Obama learns from GOP lawmakers that ending special tax breaks for oil companies and wealthy families has no chance of passing the Senate, “we can start talking about — maybe, finally — start talking about what’s actually possible.”

Let me summarize the message McConnell announced this morning: “If the president has some free time in a few hours, he should stop by and listen to us tell him we want to lower the deficit, but only in ways we see fit.”

Soon after, White House Press Secretary Jay Carney told reporters the president need not hear Republicans “restate their maximalist position,” adding, “We know that position. That’s not a conversation worth having.”

Of course not. Everyone knows what everyone thinks and everyone’s position at this point. Obama doesn’t need to listen to Republicans demand 100% of what they want, anymore than McConnell needs to listen to Democrats tell him he can’t get 100% of what he wants.

This entire process made a right turn at farcical quite a while ago. Mitch McConnell isn’t just threatening to crash the economy, he’s also threatening to make mockery of the institution he claims to serve and turn the American political process into a reality-show circus.

Not to be outdone, NRSC Chairman John Cornyn (R-Texas) said President Obama has “diminished” his office by urging lawmakers to do their duty. If anyone explain what on earth Cornyn was blabbering about, I’m all ears.

And then there’s Sen. John Thune (S.D.), the chairman of the Senate Republican Policy Committee, who told Fox News this morning that the president goes golfing too much.

These aren’t random House backbenchers — McConnell, Cornyn, and Thune are three of the top four highest-ranking Republican members of the Senate. And they all appear to be rambling incoherently.

I was about to type that there are no adults left in the Republicans’ room, but that’s not entirely true. There are still a couple left, but they’re stuck in primary fights, so they have to go along with the madness to save their careers.

It’s a pathetic display.

 

By: Steve Benen, Contributing Writer, Political Animal, The Washington Monthly, June 30, 2011

July 1, 2011 Posted by | Congress, Conservatives, Debt Ceiling, Debt Crisis, Democracy, Economic Recovery, Economy, Federal Budget, GOP, Government, Government Shut Down, Lawmakers, Politics, President Obama, Republicans, Right Wing, Taxes, Wealthy | , , , , , , , | Leave a comment

Why The Debt Ceiling Debate Matters Now

If Congress doesn’t act soon, interest rates could spike–maybe for a long time. Then you’ll care.

The White House and Republican congressional leaders insist the debt ceiling will be raised well before the United States has to default, which would cause massive economic disruption. But a resolution seems less than assured. In the last few days, Republican presidential candidates Michele Bachmann and Tim Pawlentyhave joined a growing conservative chorus loudly denouncing a deal, and antagonism among the various parties appears to be growing, not diminishing.

Still, nobody in Washington or on Wall Street seems very alarmed. The Treasury says it can hold out until Aug. 2. But a look at the current politics and the recent history of debt-ceiling showdowns suggests that alarm might soon become warranted.

There are two reasons why. The first has to do with how difficult it will be to settle on something that can get through Congress in time to stave off any damage. This struggle has been largely misportrayed and crudely simplified as a tug-of-war between Republicans set on spending cuts and Democrats who want tax increases to accompany them. It’s actually a three-way struggle, because Republicans themselves don’t agree on their ransom demands to permit a larger debt.

House Republicans want to cut $2 trillion without raising any taxes or closing any loopholes. They’re focused strictly on spending. But Mitch McConnell, the Republican Senate leader, wants any deal to include Medicare reform. He’s focused on politics. McConnell worries that the House Republican budget passed in April, which takes the deeply unpopular step of privatizing Medicare, presents a mortal threat to Republican candidates in next fall’s elections. A debt-limit deal on Medicare that drew the support of President Obama and Democrats would inoculate the GOP against this danger.

The trouble is, House Republicans don’t share McConnell’s concern, so an agreement among Republicans seems nearly as remote as one between Republicans and Democrats.

That gets to the second reason for alarm: the United States need not default on its debt in order to incur costly and potentially lasting damage. A February report by the Government Accountability Officeexamining the recent history of “debt-ceiling events” — none nearly so serious as the current one — showed that government borrowing costs began to rise well in advance of default. Call it a taxpayer premium for congressional squabbling: the disruption of Treasury auctions and the threatened loss of liquidity among Treasury notes and bills caused billions in additional borrowing costs in the form of higher interest rates.

One reason why the debt showdown isn’t causing more alarm is that interest rates have been falling. But that’s due mostly to declining economic forecasts in the United States and fear of a Greek default — currently more powerful influences, but also ones that would mask worries about a US default.

At some point, perhaps as soon as in a few weeks, the fight in Congress could eclipse those factors and drive interest rates higher. That’s been the historical pattern, and it is already causing worry about what might trigger such a rise. “The nervousness on our end is that the markets will misperceive what’s going on,” an aide to a conservative House Republican told me. “If something fails on the House floor, people might react as if all life is about to end — just like they did when the TARP vote failed.”

That could cost taxpayers dearly, even if a default is ultimately avoided. One reason why US borrowing costs are so low is the universal belief that the government will always make good on its debts in a timely manner. But if that faith is shaken — and a good scare could do the trick — investors might decide that government debt is a riskier investment than they had imagined and demand a better return.

That will hurt. The Office of Management and Budget determined that a mere 1 percent rise in interest rates would cost taxpayers $973 billion over the next decade [pdf, pg. 23]. So a fight purportedly about cutting the deficit could actually cause it to grow much larger. That’s worth worrying about now — especially as Republicans threaten a default and claim there’s no cause for alarm.

 

By: Joshua Green, Senior Editor, The Atlantic, June 30, 2011

June 30, 2011 Posted by | Class Warfare, Congress, Conservatives, Debt Ceiling, Debt Crisis, Economic Recovery, Economy, Federal Budget, GOP, Government, Government Shut Down, Ideologues, Ideology, Lawmakers, Medicare, Middle Class, Politics, Republicans, Right Wing, Taxes, Wall Street | , , , , , , , , , , , | Leave a comment

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

 

 

 

June 27, 2011 Posted by | Conservatives, Elections, GOP, Government, Ideologues, Ideology, Iowa Caucuses, Politics, Republicans, Right Wing, Taxes, Teaparty | , , , , , , , , | Leave a comment