“They’re Stuck With The Mess”: Why Ordinary People Bear Economic Risks And Donald Trump Doesn’t
Thirty years ago, on its opening day in 1984, Donald Trump stood in a dark topcoat on the casino floor at Atlantic City’s Trump Plaza, celebrating his new investment as the finest building in Atlantic City and possibly the nation.
Last week, the Trump Plaza folded and the Trump Taj Mahal filed for bankruptcy, leaving some 1,000 employees without jobs.
Trump, meanwhile, was on twitter claiming he had “nothing to do with Atlantic City,” and praising himself for his “great timing” in getting out of the investment.
In America, people with lots of money can easily avoid the consequences of bad bets and big losses by cashing out at the first sign of trouble.
The laws protect them through limited liability and bankruptcy.
But workers who move to a place like Atlantic City for a job, invest in a home there, and build their skills, have no such protection. Jobs vanish, skills are suddenly irrelevant, and home values plummet.
They’re stuck with the mess.
Bankruptcy was designed so people could start over. But these days, the only ones starting over are big corporations, wealthy moguls, and Wall Street.
Corporations are even using bankruptcy to break contracts with their employees. When American Airlines went into bankruptcy three years ago, it voided its labor agreements and froze its employee pension plan.
After it emerged from bankruptcy last year and merged with U.S. Airways, America’s creditors were fully repaid, its shareholders came out richer than they went in, and its CEO got a severance package valued at $19.9 million.
But American’s former employees got shafted.
Wall Street doesn’t worry about failure, either. As you recall, the Street almost went belly up six years ago after risking hundreds of billions of dollars on bad bets.
A generous bailout from the federal government kept the bankers afloat. And since then, most of the denizens of the Street have come out just fine.
Yet more than 4 million American families have so far lost their homes. They were caught in the downdraft of the Street’s gambling excesses.
They had no idea the housing bubble would burst, and didn’t read the fine print in the mortgages the bankers sold them.
But they weren’t allowed to declare bankruptcy and try to keep their homes.
When some members of Congress tried to amend the law to allow homeowners to use bankruptcy, the financial industry blocked the bill.
There’s no starting over for millions of people laden with student debt, either.
Student loan debt has more than doubled since 2006, from $509 billion to $1.3 trillion. It now accounts for 40 percent of all personal debt – more than credit card debts and auto loans.
But the bankruptcy law doesn’t cover student debts. The student loan industry made sure of that.
If former students can’t meet their payments, lenders can garnish their paychecks. (Some borrowers, still behind by the time they retire, have even found chunks taken out of their Social Security checks.)
The only way borrowers can reduce their student debt burdens is to prove in a separate lawsuit that repayment would impose an “undue hardship” on them and their dependents.
This is a stricter standard than bankruptcy courts apply to gamblers trying to reduce their gambling debts.
You might say those who can’t repay their student debts shouldn’t have borrowed in the first place. But they had no way of knowing just how bad the jobs market would become. Some didn’t know the diplomas they received from for-profit colleges weren’t worth the paper they were written on.
A better alternative would be to allow former students to use bankruptcy where the terms of the loans are clearly unreasonable (including double-digit interest rates, for example), or the loans were made to attend schools whose graduates have very low rates of employment after graduation.
Economies are risky. Some industries rise and others implode, like housing. Some places get richer, and others drop, like Atlantic City. Some people get new jobs that pay better, many lose their jobs or their wages.
The basic question is who should bear these risks. As long as the laws shield large investors while putting the risks on ordinary people, investors will continue to make big bets that deliver jackpots when they win but create losses for everyone else.
Average working people need more fresh starts. Big corporations, banks, and Donald Trump need fewer.
By: Robert Reich, The Robert Reich Blog, September 21, 2014
“A Defeat For American Democracy”: The Senate Tried To Overturn ‘Citizens United’ Today. Guess What Stopped Them?
A majority of the United States Senate has voted to advance a constitutional amendment to restore the ability of Congress and the states to establish campaign fundraising and spending rules with an eye toward preventing billionaires and corporations from buying elections.
“Today was a historic day for campaign finance reform, with more than half of the Senate voting on a constitutional amendment to make it clear that the American people have the right to regulate campaign finance,” declared Senator Tom Udall, the New Mexico Democrat who in June proposed his amendment to address some of the worst results of the Supreme Court’s interventions in with the recent Citizens United v. Federal Election Commission and McCutcheon v. Federal Election Commission decisions, as well as the 1976 decision in Buckley v. Valeo.
That’s the good news.
The bad news is that it’s going to take more than a majority to renew democracy.
Fifty-four senators, all Democrats and independents who caucus with the Democrats, voted Thursday for the amendment to clarify in the Constitution that Congress and the states have the authority to do what they did for a century before activist judges began intervening on behalf of wealthy donors and corporations: enact meaningful campaign finance rules and regulations.
But forty-two senators, all Republicans, voted no. As a result, Udall noted, the Republican minority was able to “filibuster this measure and instead choose to support a broken system that prioritizes corporations and billionaires over regular voters.”
The Republican opposition effectively blocked further consideration of the amendment proposal, since sixty votes were needed to end debate and force a vote. And, even if the Republicans had not filibustered the initiative, actual passage of an amendment would have required a two-thirds vote.
Though the Republican move was anticipated, Senator Bernie Sanders, the Vermont independent who has been one of the Senate’s most ardent advocates for reform, expressed frustration with the result. “I am extremely disappointed that not one Republican voted today to stop billionaires from buying elections and undermining American democracy,” said the senator, who has advocated for a more sweeping amendment to address the influence and power of corporate cash on American elections and governance. “While the Senate vote was a victory for Republicans, it was a defeat for American democracy. The Koch brothers and other billionaires should not be allowed to spend hundreds of millions of dollars electing candidates who represent the wealthy and the powerful.“
Now, said Sanders, “the fight to overturn Citizens United must continue at the grassroots level in every state in this country.”
Sanders is right to reference the role of grassroots movements.
Four years ago, when the US Supreme Court removed barriers to corporate spending to buy elections, serious reformers said a constitutional amendment would be necessary to reverse the Court’s Citizens United ruling. Most pundits and politicians, even those who recognized the threat posed to democracy by the opening of the floodgates for big money, dismissed a constitutional fix as too bold and too difficult to achieve.
But the people embraced the constitutional route to reform. Grassroots organizing succeeded in getting sixteen states and close to 600 communities to formally demand that Congress act.
At the same time, the money poured in, with campaigning spending breaking records in the 2012 presidential and congressional elections—and heading toward breaking the record for midterm elections in 2014.
That was enough to shake up even the most cautious Senate Democrats, who began moving earlier this year to advance the Udall amendment. Though activists wanted a stronger amendment, the Senate deliberations confirmed that there is broad support for a constitutional response to the money-in-politics mess—and that a substantial number of senators now see that constitutional response as right and necessary.
“Less than five years after the Citizens United decision sparked national outrage, we have seen the movement to get big money out of politics go from local, grassroots organizing to a vote in the United States Senate,” explained People for the American Way Executive Vice President Marge Baker, who worked with activists from Public Citizen, Common Cause, Free Speech for People and other groups to collect and deliver 3.2 million signatures on petitions supporting an amendment. “Today’s historic majority vote is a remarkable milestone for this movement and a platform for taking the fight to the next level. The debate in the Senate this week is a debate that Americans across the country who are passionate about fixing our broken democracy have wanted to see.”
With the DC debate done, for now, the fight goes back to the grassroots. Activists with groups such as Move to Amend, Public Citizen’s “Democracy is for People” campaign and Free Speech for People will continue to organize and agitate, not just for an amendment but for an amendment that makes it absolutely clear that money is not speech, that corporations are not people and that citizens have a right to organize elections where votes matter more than dollars.
“We have amended the US Constitution before in our nation’s history. Twenty-seven times before. Seven of those times to overturn egregious Supreme Court rulings. For the promise of American democracy, we can and we will do it again,” declared John Bonifaz, the president of Free Speech for People, said Thursday. “The pressing question before the nation today is whether it is ‘we the people’ or ‘we the corporations and big money interests.’ This is not a Democratic issue or a Republican issue. This is a deeply American issue. Whatever our political differences may be, we all share the common vision of government of, for, and by the people. Today’s US Senate vote is just the beginning. While this amendment bill did not receive this time the required two-thirds support in order to pass the Senate, we will be back again and again until we win. History is on our side.’
By: John Nichols, The Nation, September 12, 2014
“Donors Before Constituents”: The First Amendment, According To Mitch McConnell
Have you heard that Senate Democrats are working this week to repeal free speech?
I did, yesterday morning, from Mitch McConnell.
Have you heard that Democrats are going to go out and “muzzle” pastors who criticize them in the pulpit?
We did, from Ted Cruz.
Did you hear that Democrats are going to shut down conservative activists and then “brainwash the next generation into believing that this is how it should be”?
We did, last month, from the Family Research Council’s Tony Perkins.
A good rule of thumb in politics is that the scarier someone sounds, the more you should doubt what they’re saying. Another good rule in politics is not to trust what Mitch McConnell says about money in politics.
Because, yes, that’s what we’re talking about here. Not a secret new Orwellian regime. Not a new anti-pastor task force. What we’re talking about is simply limiting the amount of money that corporations and wealthy individuals can spend to influence our elections.
This week, the Senate is debating a constitutional amendment that would overturn recent Supreme Court decisions that have paved the way for an explosion of big money in politics. In those decisions, including Citizens United and this year’s McCutcheon, the Supreme Court radically redefined the First Amendment to allow corporations and the wealthy to drown out the speech of everyday Americans with nearly unlimited political spending. The Democracy for All amendment would restore to Congress and the states the power to impose reasonable restrictions on money in politics, just as they had before the Supreme Court started to dismantle campaign finance laws.
So, what are Mitch McConnell and Ted Cruz so scared of?
In fact, it wasn’t that long ago that Mitch McConnell supported the very laws that he is now dead-set on blocking. Back in 1987, McConnell said he would support a constitutional amendment to allow Congress to regulate independent expenditures in elections — just as the Democracy for All amendment would. And then he introduced that very constitutional amendment. Either McConnell has dramatically changed his mind regarding what constitutes a threat to the First Amendment, or he’s motivated by something more cynical.
So, if Mitch McConnell doesn’t actually think that limiting the amount of money that wealthy interests can spend on elections is a violation of the First Amendment, what is he up to? Could it be that he now finds it more useful to court the dollars of major donors than the votes of his constituents?
Washington is the only place where campaign finance reform is a partisan issue. A poll this summer found that 73 percent of voters support a constitutional amendment to get big money out of politics. Americans know that our First Amendment is about protecting the speech of citizens, not the interests of wealthy campaign donors.
Faced with a large, bipartisan grassroots movement that threatens their big-spending friends, the only arguments that Mitch McConnell and Ted Cruz have left are wild accusations, flat-out falsehoods, and outlandish interpretations of the Bill of Rights.
By: Michael B. Keegan, The Huffington Post Blog, September 9, 2014
“Mitch McConnell’s 47 Percent Moment”: There For Millionaires And Billionaires, They Know They Can Count On Mitch
A year ago, President Obama convulsed the White House Correspondents Dinner when he responded to complaints that he wasn’t meeting enough with the Republican leaders in the Congress: “Why don’t you get a drink with Mitch McConnell?’ they ask. Really?” Obama asked the audience incredulously. “Why don’t you get a drink with Mitch McConnell?”
The Kentucky senator, continuously partisan and mean spirited in public, earned the jab by leading a record number of filibusters as Senate minority leader during Obama’s tenure, forcing more than a quarter of all cloture votes in the history of the Senate since the beginning of the Republic.
Now, many political bookies, however prematurely, have made Republicans favorites to win the Senate majority. What will McConnell do if he must go from opposition to governing? Last week, the Nation Magazine, which I edit, along with Lauren Windsor of the Undercurrent, released an audiotape of McConnell’s revealing remarks to a private June strategy session of deep-pocket Republican billionaire donors, convened by the Koch brothers.
Introduced by the general counsel of Koch Industries, McConnell begins by paying tribute to his patrons, thanking the Koch brothers personally “for the important work you’re doing. I don’t know where we’d be without you . . . rallying, uh, to the cause.”
So what is the cause? Putting Americans to work? Rebuilding the middle class? Unleashing free market answers to catastrophic climate change?
No, McConnell can’t seem to get himself to address a positive agenda. He envisions only more obstruction. If he is majority leader, he promises, “we’re not going to be debating all these gosh darn proposals. That’s all we do in the Senate is vote on things like raising the minimum wage . . . extending unemployment . . . the student loan package the other day, that’s just going to make things worse.”
With Republican majorities, McConnell tells the fat cats, “We own the budget. So what does that mean? That means that we can pass the spending bill. And . . . we will be pushing back against this bureaucracy by doing what’s called placing riders in the bill. No money can be spent to do this or do that”
So what parts of government would McConnell starve of funds? Although many Republicans are campaigning as faux populists against crony capitalism, McConnell doesn’t suggest that he’ll cut subsidies to Big Oil or the lard-filled budgets of the Pentagon. No, McConnell pledges to his millionaire funders “We’re going to go after them on health care, on financial services, on the Environmental Protection Agency, across the board [inaudible].”
For all his posturing about Obama’s dictatorial usurpations, McConnell reassures the millionaires that “we now have, I think, the most free and open system we’ve had in modern times.” Why? Because in the Citizens United decision, the conservatives on the Supreme Court overturned established precedents to give corporations the right to spend unlimited funds in elections. This is a victory for “open discourse,” McConnell argues, making clear just how he expects the corporations to make their opinions known:
“The Supreme Court allowed all of you to participate in the process in a variety of different ways. You can give to the candidate of your choice. You can give to Americans for Prosperity, or something else, a variety of different ways to push back against the party of government.” (Americans for Prosperity is the right-wing Koch funded political vehicle that has been called the “third-largest political party in the United States.”)
For McConnell, the court’s decision to unleash corporate contributions helped heal the pain from what he described as the “worst day of my political life.” Not the 9/11 terrorist bombings or the disastrous vote to invade Iraq. No, according to McConnell, the worst day of his political life was when a Republican congress passed and George W. Bush signed the McCain-Feingold campaign finance reforms, that put some limits of big money in our politics.
Mitch McConnell is surely a man for these times. Big money dominates our politics and corrupts our politicians (including, most recently, McConnell’s campaign manager, who resigned because of his possible involvement in bribing an Iowa state legislator to change his support from Michele Bachmann to Ron Paul in the 2012 Iowa Republican presidential primary). Legislators like McConnell openly serve “the private sector,” currying their donations while serving their interests.
As Sen. Elizabeth Warren (D-Mass.) said while campaigning for Alison Lundergan Grimes, McConnell’s underdog challenger: “Mitch McConnell is there for millionaires and billionaires. He is not there for people who are working hard playing by the rules and trying to build a future for themselves.”
Voters aren’t stupid. Given his views and his record, it is not surprising that McConnell is one of the most vulnerable of Republican incumbents, with Grimes running only a few points behind him. Nor is it surprising that more than $100 million may end up being spent on the race, making it one the most expensive contests in Senate history. Millionaires know they can count on McConnell.
McConnell ended his talk by repeating the Republican mantra against taxes and regulation, arguing, “If we want to get the country going again, we need to quit doing what we’ve been doing. Was it Einstein that [sic] said the definition of insanity is doing the same thing over and over again expecting a different result?” Let’s hope the voters of Kentucky come to the same conclusion about reelecting a senator who represents donors far better than voters.
By: Katrina vanden Heuvel, Opinion Writer, The Washington Post, September 3, 2014
“They Have No Good Answer”: New Hobby Lobby Fix Puts Republicans In A Bind
In response to the Hobby Lobby case, the White House has implemented a fix to allow institutions and corporations who object even to a funding bypass on contraception coverage for employees. The fix is an overly complex workaround necessitated by the Supreme Court’s bizarre ruling that corporations have 1st Amendment religious rights, and can enforce those rights by refusing not only to provide contraception coverage, but even to enter into an agreement by which the government would provide contraception coverage for them.
The case puts conservative legislators in a bind: most people do not, in fact, believe that corporations should have religious rights. Most people don’t believe that contraception is a bad thing, or that employers should get to interfere in whether an employee’s insurance can cover contraception.
Republican lawmakers who claim to be moderates on reproductive rights are especially challenged. Many Republicans who claim to have a more tolerant philosophy on reproductive freedom nevertheless cast votes that align with their more extreme partisan counterparts, and paper it over by saying that they aren’t trying to ban abortion or contraception, but simply that they’re trying to make it “safer.”
The Hobby Lobby case removes that cover. Either you think it’s OK for corporation to decide not to cover birth control out of extremist religious objection, or you don’t. Take the case of Jeff Gorell, Republican Assemblymember in California and candidate for Congress against freshman Congresswoman Julia Brownley. Gorell calls himself “pro-choice” even though he has a 0% rating with Planned Parenthood, and a 90% rating from the California Pro-Life Council. He has been silent on the Hobby Lobby case despite repeated requests for comment. There’s even video of him stonewalling a questioner on the subject.
My tweets to both the NRCC and Mr. Gorell have also gone without response.
They’re silent, of course, because they have no good answer. If Mr. Gorell and Republicans like him all across America stand with Scalia and Alito on Hobby Lobby, they will betray themselves as far too extreme for the voters of their districts. If they disagree with the ruling, their rabid Tea Party base will stay home or actively nip at their heels from the right.
So they just hope the issue will go away and people will stop talking about it. It won’t, of course. Republicans across the board will eventually have to take a stand on whether they think corporations should have the religious right to prevent their employees from receiving birth control coverage.
By: David Atkins, Washington Monthly Political Animal, August 23, 2014
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