“Pure Fanaticism”: Tax-Cutting Sam Brownback Pushing Huge Tax Increase–But Not For His Corporate Friends
As noted at Lunch Buffet, Louisiana Republicans finally caved in to Bobby Jindal’s demands that the state budget he’s screwed up can only be fixed if Grover Norquist goes along. Their counterparts in Kansas have not yet thrown in the towel in their fight to keep Sam Brownback from dragging them and the state to the bottom of fiscal hell. But he’s refusing to bend, and is now pre-blaming legislators for across-the-board budget cuts he says he’ll be forced to impose if solons don’t give him a budget that reflects his fanatical faith in supply-side economics.
According to the Topeka Capital-Journal‘s Tim Carpenter, it’s getting tense in Republican circles in that city, and Brownback even got “choked up” in one meeting with GOP legislators. And that’s understandable. He wants to insulate the out-of-state corporations to whom he’s given a huge tax cut from any budgetary pain, and can’t seem to figure out why legislators don’t just go along with his proposal to hike sales taxes on everybody else. If he’s rebuffed, obviously he has to cut the budget more, right?
Today it looks like Brownback may dry his tears, and in the words of Kansas City Star columnist Yael Abouhalkah, even have the “last laugh:”
Gov. Sam Brownback edged closer early Friday morning to his second greatest victory as the leader of Kansas government.
Shortly after 4 a.m., the House took the spineless way out and approved the largest tax increase in state history.
It was badly needed to fill the huge budget hole created by Brownback’s greatest “victory” — income tax cuts he pushed in 2012 for thousands of businesses.
Those cuts — as everyone knows by now — slashed state revenues by more than $600 million a year, imperiled funding for education and other state services, and caused the Kansas Legislature to continue meeting until Friday, the 113th day of a scheduled 90-day session….
[T]he Kansas Senate has already passed a similar bill to boost the sales tax — by the narrowest of margins last Sunday — but would still have to vote Friday to endorse the House’s action.
If that happens — and let’s hope it doesn’t — Brownback will have succeeded in making the Legislature come up with a solution for a mess he created, and for which he has never taken responsibility.
At least Bobby Jindal has the excuse of wanting really really badly to become President of the United States, and convincing himself his party and constituents owe it to him to help out by gutting their own public services and making a hash of the state tax code. In Brownback’s case, it’s pure fanaticism.
By: Ed Kilgore, Contributing Writer, Political Animal Blog, The Washington Monthly, June 12, 2015
“The Same Priorities She’s Emphasizing Now”: What Hillary Said About Paid Leave, Child Care, Inequality — Yesterday And 20 Years Ago
Following Hillary Clinton’s first major campaign speech on Saturday, purveyors of conventional wisdom have assured us again that she is tacking toward the left to deflect her challengers and mollify her party’s liberal base. Such assertions usually hint that Clinton is not progressive herself, but merely swayed that way by polls and consultants.
On the evening before her big event in Four Freedoms Park, New York’s memorial to its favorite son, Franklin Delano Roosevelt, I picked up a copy of her 1996 bestseller, It Takes A Village. (While many journalists once thumbed through it, few seem to remember its contents.) Published during an era when the nation showed few signs of turning leftward, Clinton’s first book offered pithy arguments for the same priorities she is emphasizing now. Consider the views she expressed on family leave — and, in particular, the limitations of the law signed by her husband in 1993:
As I have mentioned, the Family and Medical Leave Act guarantees unpaid leave to employees in firms with more than fifty workers. That is a good beginning. Many parents, however, cannot afford to forgo pay for even a few weeks, and very few employers in America offer paid maternity and paternity leave….
Other countries have figured out that honoring the family by giving it adequate time for caregiving is not only right for the family and smart for society but good for employers, who reap the benefits of workers’ increased loyalty and peace of mind. The Germans, for example, guarantee working mothers fourteen weeks’ maternity leave (six weeks before and eight weeks after delivery) at full salary…
Other European countries provide similarly generous leave, some of them to fathers as well as mothers. In Sweden, for example, couples receive fifteen months of job-guaranteed, paid leave to share between them…
As First Lady, Clinton obviously was in no position to demand that her husband’s administration (or the Republican-dominated Congress) institute paid family leave, but her own opinion was clear enough. So was her view of early childhood education, another current issue that she highlighted on Saturday:
Imagine a country in which nearly all children between the ages of three and five attend preschool in sparkling classrooms, with teachers recruited and trained as child care professionals. Imagine a country that conceives of child care as a program to “welcome” children into the larger community and “awaken” their potential for learning and growing.
It may sound too good to be true, but it’s not….More than 90 percent of French children between ages three and five attend free or inexpensive preschools called écoles maternelles…
While I was in France, I had conversations with a number of political leaders, from Socialists to Conservatives. “How,” I asked, “can you transcend your political differences and come to an agreement on the issue of government-subsidized child care?” One after another of them looked at me in astonishment. “How can you not invest in children and expect to have a healthy country?” was the reply I heard over and over again.
Finally, Clinton drew sharp attention to the social instabilities of the post-industrial American economy and the role of government in redressing what she called a “crisis.” Observing that “long-established expectations about doing business have given way under the pressures of the modern economy,” she warned bluntly:
Too many companies, especially large ones, are driven more and more narrowly by the need to ensure that investors get good quarterly returns and to justify executives’ high salaries. Too often, this means that they view most employees as costs, not investments, and that they expend less and less concern on job training, employee profit sharing, family-friendly policies…or even fair pay raises that share with workers – not to mention their families and communities – gains from productivity and profits…
Despite record profits for many companies, the gap in income between top executives and the average worker has widened dramatically….This growing inequality of incomes has serious implications for our children.
She went on to again praise Germany, where “there is a general consensus that government and business should play a role in evening out inequities in the free market system” — and where higher base wages, universal health care, and superb job training guaranteed “a distribution of income that is not so skewed as ours is.”
Writing 20 years ago, when President Clinton was running for re-election against the odds, Hillary hedged her message — and yet she was prescient in addressing the harms of an increasingly unfair economy. What she said then undergirds what she is still saying, more and more forcefully, in this campaign.
By: Joe Conason, Editor in Chief, Editor’s Blog, Featured Post, The National Memo, June 15, 2015
“Bernie Sanders’ Presidential Run Really Matters. Here’s Why”: The More Attention He gets, The More Attention Economic Inequality Gets
Vermont senator Bernie Sanders is officially running for president, meaning that there will be at least two contestants in the Democratic race (after what’s been going on in the city where he was mayor for eight years, Martin O’Malley may be reconsidering). I am obligated by law to point out that Sanders’ chances of beating Hillary Clinton are slight, but the question many have already raised is what effect his candidacy will have on Clinton. Will it pull her to the left? Give her room to run to the right? Force her into missteps? It might do any of those things, or none of them.
But Sanders could actually cause more headaches for the Republicans running for president — if he succeeds on focusing the campaign on his area of interest.
To understand why, you first have to know that Sanders’ candidacy will be almost entirely about economic issues. Advocacy for the interests of what we might call the non-wealthy has always been at the top of Sanders’ agenda and at the heart of his political identity. That’s the reason he’s finally running now, at the tail end of a long career: the national debate has moved in his direction, with issues like wage stagnation and inequality now being brought up even by some conservatives.
But as far as Hillary Clinton is concerned, that’s just fine. Bernie Sanders isn’t going to pull her to the left, because she was already moving that way. She’s talking about issues like inequality and criminal justice reform in terms that she might not have used 10 or 20 years ago, and in some cases she’s actually taking positions that she wouldn’t have then. As Greg and I have argued, whether this evolution is sincere isn’t particularly relevant, because she’s reflecting the consensus within her party, and if she becomes president her actions will follow along. The reason she doesn’t have to be pulled to the left by Sanders, O’Malley, or anyone else is that the entire environment around these issues has changed. Talking about them in more liberal terms isn’t just good for her in the primaries, it’s good for her in the general election, too.
Nevertheless, Sanders’ presence will concentrate the debate even more on economic issues, because that’s most of what he’ll be stressing. Every bit of attention he gets will serve to keep the economic discussion at the forefront. And you know who isn’t so happy about that? The Republican candidates.
They’ll all have their economic plans, of course, and will be happy to tell you why they’re superior. But the current debate on the economy puts them at a disadvantage. They know that they’re at odds with the public on many economic issues, like the minimum wage, paid vacation time, or increasing taxes on the wealthy. Though they’ve begun to talk about inequality, it’s obvious that they haven’t quite figured out how to address the issue without running up against their traditional advocacy for things like cutting upper-income taxes and reducing regulations on corporations and Wall Street.
When Sanders says, “We need an economy that works for all of us and not just for a handful of billionaires,” few voters disagree. Republicans say they want that, too, but the fact that some specific billionaires like Sheldon Adelson and the Koch brothers are so eagerly bankrolling their campaigns makes it an awkward argument for them to make.
And Sanders will draw attention to the billionaires funding Republican campaigns: At his presser today, he was asked about donations to the Clinton Foundation, and he pushed back by asking: Where are the conflicts of interests when the Koch brothers are spending hundreds of millions to influence the outcome of the presidential race? In other words, Sanders won’t only attack Clinton on the money question; he’ll helpfully point out that GOP attacks on this are rather questionable, given their own funding sources.
The best outcome for Republicans is if the campaign revolves around other issues where they might find more support for their positions and they can more easily attack Hillary Clinton. The more attention Bernie Sanders gets, the more attention economic inequality gets, which is something Republicans would rather avoid.
By: Paul Waldman, Senior Writer, The American Prospect; Contributor, The Plum Line, The Washington Post, April 30, 2015
“Keeping Their Eyes On The Prize”: Democrats’ No. 1 Job; Remind Voters That American Wages Have Flatlined
For the moment, the Democrats have resumed their time-honored posture of arguing about trade policy. It’s an important issue, and one on which I’m not sure where I come down. But as they prepare to rip each other’s flesh, they might bear in mind it isn’t the issue. The issue, as I wrote two weeks ago in urging Hillary Clinton to go big, is wage stagnation. I offer this up as a timely public-service reminder: Remember, folks, what you agree on.
As I noted in the go big column, wages have been in essence flat for earners—up 6 percent (adjusted for inflation)—in the middle of the income scale since 1979. For the top 1 percent, compensation has risen about 140 percent since the fateful year. This needs to be the issue of this campaign. If American voters don’t know these 6 percent and 140 percent figures November 8 next year, Hillary Clinton and the Democrats will have done something very wrong.
Economists choose 1979 as the cutoff year because, looking back over the numbers, that’s when the flattening started. It’s also about when compensation at the top started soaring (a little later, actually). Until the early to mid-1980s, Wall Streeters and corporate lawyers and actors and university presidents and star athletes made more than the rest of us, but they didn’t make gobs more.
For example, the average baseball salary doubled, up to around $370,000, from 1981 to 1985. The average wage in that same time frame went from $13,773 in 1981 to $16,822 in 1985, an 18 percent increase. Not bad, better than average; but not double by a long shot. I’m not saying the juxtaposition of these numbers proves anything more than it proves. But it is certainly representative of what was happening to American wages then and has been happening since.
Another way of looking at it: The average ballplayer went from making about 12 times the average American to 22 times. Today, incidentally, it’s 108 times, $4.25 million to around $39,000.
So what we’re gonna do right here is go back, way back, as an old song had it, to the year of Apocalypse Now and Get the Knack and those hideous Pittsburgh Pirates uniforms that so offended my aesthetic sensibilities that I had no choice but to cheer against the team I’d grown up worshipping. Let’s ask: What if the wage structure in the United States today were the same as it was in 1979?
Larry Summers asked the question in the Financial Times back in January. The bottom 80 percent of earners, he wrote, would have $11,000 more per family, and the top 1 percent would have $750,000 less. In the wake of Summers’s column, the folks at NPR’s Planet Money took it one step further and calculated the increased (or decreased) income for households at several points along the wage structure. It’ll pop your little eyes.
The poorest wage-earners, at $12,000, would be making $3,282 more. That’s a 27 percent increase. Those at $30,000 would be making $6,928 more (23 percent). Those at $52,000 would be getting $8,752 more (16.8 percent). For those at $84,000, the increase drops off, to $5,834 more (7 percent). But it kicks back up for those at $122,000, to $17,311 (14.2 percent). And finally, those in the top 1 percent, at $1.41 million, would see a decrease in earnings of $824,844, or a whopping 58 percent.
Now before we go any further—no, no one today is talking about anything as confiscatory as wiping out 58 percent of the top 1 percent’s earnings. That isn’t how it’s going to work anymore, with top marginal tax rates of 76 percent (which does not mean that the government took three-quarters of someone’s money; go look up the concept of “marginal” if you don’t get this).
But the wage structure is a function of a whole host of other policies and practices that have nothing to do with marginal tax rates. It has to do, yes, with the minimum wage. It was $2.90 in 1979. Adjusted for inflation, that would be $9.38 today instead of the actual $7.25, which is a 23 percent decline for those workers, and minimum wage is generally thought to have knock-on effects at least a third of the way up the wage chain. It has a lot to do with corporate culture: In 1979, CEOs at the top few hundred corporations made about 28 times the average worker’s salary; now they make more than 200 times. There were 15.1 million private-sector union workers in the United States in 1979; last year, there were 7.35 million. And in 1979, Washington oversaw a lot more in public investment than it does today, and those dollars by and large went into real things, from bridges to scientific research, instead of swaps and derivatives.
Now, 1979 was a bad year in some important ways—inflation, hostage crisis—so I’m not saying I think it would be the world’s greatest idea for the Democrats to campaign on bringing back 1979. It’s not about the year per se. That just happens to be the year the thing started happening. And the thing is flat wages for most people who work for a living.
The trade fight has to be played out, and it seems that the unions and the Warren wing are probably going to lose, because the president will get enough votes from Republicans and moderate Democrats. And of course it’ll be interesting to see how Clinton plays it. Whichever position she takes, we can be sure she’ll do it cautiously.
So dust will be kicked up over that. It has to be. The differences are real. But comparatively, the differences are small. Democrats must keep their eyes on the prize. “Who cares more about increasing the wages of working Americans?” is a debate question the Republicans can never win. The Democrats have to make sure the election is about that question.
By: Michael Tomasky, The Daily Beast, April 24, 2015
“They Should Stop And Take A Second Look”: Ending Forced Arbitration Is A No-Brainer For Conservatives
The Obama administration is preparing to issue consumer protection regulations that will force Republicans to choose between their Wall Street allies and the Seventh Amendment right to a jury trial in civil cases. Republicans will be tempted to denounce the new rules as yet another example of this president’s customary imperial overreach, but on this issue, they should stop and take a second look.
The problem is called forced arbitration, and if you’ve ever taken the time to read a consumer service contract or end-user license agreement before signing it (which makes you an admirable human being, and very rare), you’ll almost certainly have seen a clause that revokes your right to go to court in case of a breach of the agreement by the corporation.
Such clauses are found everywhere, from credit cards and checking accounts to cable TV and car rentals. When you sign, you agree to accept the decision of a private, for-hire arbitrator. Unfortunately, the arbitrator is usually hired by the same company that breached the agreement and is not legally required to follow statutory or common law precedents. Its decisions are almost impossible to appeal. Most consumers have no idea that’s what they’re agreeing to.
Enter the Consumer Financial Protection Bureau, which has been authorized by Congress to step in to study this problem and, based on its findings, restore Americans’ ability to hold financial institutions accountable. Under the Dodd-Frank Act of 2010, the bureau is authorized to issue regulations that limit or ban the use of forced arbitration in consumer financial services and products. Regulations to do just that are expected to be promulgated sometime this year.
The regulations may turn out to be poorly framed or excessive – we’re talking about the same administration that gave us Lois Lerner and executive amnesty, after all – but the problem Congress wanted the agency to address is real.
Recently, while traveling to Topeka on business, I needed to rent a car. I stopped at the Thrifty counter at the Kansas City airport. While filling out the usual paperwork, I asked the gentleman behind the counter, “What happens if I don’t check this box that says I waive my right to sue?” He blinked at me uncomprehendingly for a moment and then replied, “Um, it means you don’t get the car.” I checked the box, disgusted. My destination was 80 miles away, I was in a hurry, and I didn’t have time to haggle or shop around with Thrifty’s competitors, all of whom undoubtedly have the same policy.
Today, a big company like Thrifty can effectively insist that we waive our Seventh Amendment rights on a “take it or leave it” basis; and market forces are not sufficient to police the problem. We’re stuck. And it isn’t just car rentals. When you buy a hair dryer or click “I agree” to a software download, you’re probably forfeiting your right to go to court.
Statistics show that, more often than not, the arbitrator hired by the company you’re disputing with will rule in the company’s favor, likely because he’s eager to be hired again by that company in the future.
Even consumers who think they understand what they’re signing usually have no clear idea of how arbitration really works. They mistakenly equate it with mediation or some other court-like procedure. In reality, forced arbitration is conducted in secret and lacks the procedural safeguards that allow consumers to prove their case. Arbitrators typically keep their reasoning private, making it hard for the losing party to know why he lost, and results are rarely published, making it difficult for similarly situated parties to know they’re entitled to relief.
To be sure, arbitration can be a great option when it’s voluntarily agreed to by both parties after a dispute has arisen, but to be truly voluntary, all parties need to be free to say no. In the case of consumer financial services and products (the kinds of agreements the Consumer Financial Protection Bureau is authorized to regulate), most individual consumers have no bargaining power, as anyone who’s tried to negotiate with his credit card company can attest.
Voluntary arbitration agreements have always been lawful, but up until the 1920s pre-dispute arbitration clauses like the one I had to sign at Thrifty were rarely enforced by American courts. Americans have long cherished the common-law right to a jury trial in civil cases. Indeed, preserving that right was one of the top demands of the Antifederalist skeptics of the proposed Constitution, and the Seventh Amendment was ratified precisely to preserve that ancient right in the courts of the newly constituted federal government.
In 1925, Congress enacted the Federal Arbitration Act to make arbitration a viable alternative for resolving contractual disputes between corporations. That strikes me as constitutionally tolerable, so long as agreements are voluntary and the parties are of roughly equal bargaining power, and if recourse to the courts is still possible if the arbitration process itself is disputed. But recent interpretations of that act by the U.S. Supreme Court have expanded its reach to cover all kinds of contracts, including consumer and employment contracts, and have even overridden state-level laws permitting class actions. (One of the reasons most corporations favor arbitration is that it forces each claimant to pursue his claim individually.)
So in disputes between individual Americans and big companies, the Seventh Amendment has become Swiss cheese, and with more holes than cheese. Many genuinely aggrieved consumers are being denied access to the civil justice system.
How can we fix this? The Supreme Court should reverse its errors, and Congress should amend the Federal Arbitration Act to ensure agreements are truly voluntary. (A bill to do that, dubbed the Arbitration Fairness Act, has been introduced in recent Congresses, but has gone nowhere, thanks to fierce opposition by the U.S. Chamber of Commerce.) Realistically, in the near term, the Consumer Financial Protection Bureau’s forthcoming Dodd-Frank regulations are the best hope consumers have for relief. But that only applies to consumer financial services and products. So there’s no avoiding a legislative remedy.
This issue should be a no-brainer for conservatives. Ending the un-American practice of forced arbitration should be on the agenda, not just of traditional consumer advocates, but of everyone who loves liberty and the Bill of Rights. As a freedom issue, it’s right up there with things like repealing health care mandates, allowing cell-phone unlocking, ending corporate subsidies and eliminating cronyist tax breaks.
By: Dean Clancy, Thomas Jefferson Street Blog, U. S. News and World Report, April 17, 2015
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