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“Coaching Sessions Have A Long Way To Go”: Rick Perry; ‘Running For The Presidency’s Not An IQ Test’

Texas Gov. Rick Perry (R) is wrapping up his 14-year tenure as his state’s chief executive – the longest such tenure in Lone Star State history – and as he gets ready to launch a second national campaign, the governor is talking more to the national media. The goal, in all likelihood, is to help reintroduce Perry in the wake of his failed 2012 presidential bid.

It’s off to a curious start.

The recently indicted Texas Republican talked with the Washington Post earlier this week, for example, “for a wide-ranging 90-minute interview.” It was a reminder that Perry hasn’t quite shaken off some of his bad habits.

Last week, Perry studied income inequality and economic mobility with experts Scott Winship, Erin Currier and Aparna Mathur. In the Post interview, he was asked about the growing gap between rich and poor in Texas, which has had strong job growth over the past decade but also has lagged in services for the underprivileged.

“Biblically, the poor are always going to be with us in some form or fashion,” he said.

I’m not a Biblical scholar, but I can find no Scriptural references to the notion that that the poor “are always going to be with us.” [Update: see below]

Perry acknowledged that the richest Texans have experienced the greatest amount of earnings growth, but dismissed the notion that income inequality is a problem in the state, saying, “We don’t grapple with that here.”

I suppose that’s true – in order to “grapple with” a problem, policymakers have to at least try to address it – though the fact remains that income inequality has gotten much worse in Texas in recent years, and a 2012 analysis of income trends published by the Center on Budget and Policy Priorities found that Texas was the nation’s seventh-worst state when it comes to the gap between rich and poor.

The governor’s new interview with msnbc’s Kasie Hunt was arguably even more informative about Perry’s progress as a national candidate.

For example, Hunt asked the governor, quite candidly, “Are you smart enough to be president of the United States?” He replied:

“Running for the presidency’s not an IQ test,” he said. “It is a test of an individual’s resolve. It’s a test of an individual’s philosophy. It’s a test of an individual’s life experiences. And I think Americans are really ready for a leader that will give them a great hope about the future.”

I’m a little surprised the governor didn’t reply with a more direct, “of course I’m smart enough” answer.

As part of the same interview, which was conducted Tuesday, Hunt asked Perry about the torture report released by the Senate Intelligence Committee. The governor’s answers didn’t quite bring his position into focus. For example, Perry sounded like he opposes torture:

“I agree that what happened to John McCain was abhorrent. It is inhumane. And the United States Government should never ever condone that type of activity. America has a record, going all the way back to George Washington when George Washington said that those British soldiers need to be treated with respect.”

And Perry also sounded like he understands Bush-era torture.

“But in the fog a war, you think back to 2001, and George W. Bush standing on that pile a rubble after he had talked to mothers and fathers and wives, loved ones of Americans who’d been killed by these soulless terrorist – you think back to Abraham Lincoln, suspending habeas corpus – you know, in retrospect, you know, sometimes decisions made in the fog a war, we can criticize ‘em, some years later.

And then Perry switched back, sounding like he opposes torture.

“But I think more importantly here is that the message that America is not going to be– like ISIS and cut the throat of innocent children– that we’re not going to– commit heinous acts, is clearly a message that Americans want to hear…. I respect [John McCain] for standing up and saying America will not be involved in torture. ‘No one in this country will ever do to any combatant what they did to me.’ And I totally agree with that.”

And then asked whether waterboarding is torture, Perry changed the subject.

“One of the most important things, though, that we need to do as a country, is that when the leader of the United States says, ‘Here’s a red line,’ that that’s what it means. Words matter. And hollow words hurt us as a country. They hurt us as an ally. And the words that come out of the president of the United States need to mean something.”

By all accounts, the Texas governor is meeting regularly with advisers who are helping him shape his agenda and vision. The coaching sessions apparently have a long way to go.

* Update: Several alert readers have brought Matthew 26:11 to my attention, which, depending on the translation, actually says, “The poor you will always have with you.” I stand corrected.


By: Steve Benen, The Maddow Blog, December 11, 2014

December 13, 2014 Posted by | Economic Inequality, GOP Presidential Candidates, Rick Perry | , , , , | Leave a comment

“And Americans Get The Bill”: The Pay’s The Thing; How America’s CEOs Are Getting Rich Off Taxpayers

It’s proxy season again, and we will soon be deluged with news profiles of CEOs living in high style as our ongoing debate on CEO pay ramps up. Last week, the floodgates opened when the New York Times released its annual survey of the 100 top-earning CEOs. Lawrence Ellison from Oracle Corporation led the list again with over $78 million in mostly stock options and valued perks, an 18 percent drop in pay from last year. Poor Larry.

Rising CEO pay has been a hugely contested issue in the U.S. since the early 20th century, particularly in the midst of economic downturns and rising inequality (these two often go together). Because the numbers are just so staggering, most of the current debate focuses on the rapid rise in CEO pay over the past four decades. While executive pay remained below $1 million (in 2000 dollars) between 1940 and 1970, since 1978 it has risen 725 percent, more than 127 times faster than worker compensation over the same period.

With any luck, ascendant French economist Thomas Piketty and the English-language release of his book Capital in the Twenty-First Century will build much-needed momentum in D.C. to institute reforms that address our CEO pay problem. This is a major driver of America’s rising income inequality, which is the central focus of Piketty’s magnum opus. One reform in particular that is critical to slowing down the growth of CEO pay and its costly impact on our economy is closing the performance pay tax loophole.

Inspired by compensation guru Graef Crystal’s bestseller on corporate excesses and skyrocketing executive pay, then-presidential candidate Bill Clinton elevated CEO pay as a core issue of his 1992 campaign with a pledge to eliminate corporate tax deductions for executive pay that topped $1 million. Clinton was successful only in part; his policy did become part of the U.S. tax code  as Section 162(m), but it came with a few unfortunate qualifiers, namely the exception for pay that rewarded targeted performance goals, or “performance pay.”

The logic of performance pay comes from Chicago-school economists Michael C. Jensen and Kevin J. Murphy, who published a hugely influential piece in the Harvard Business Review in the early 1990s that argued executive pay should align CEO interests with what shareholders care about, which is higher stock prices. Otherwise known as agency theory, this idea has profoundly shaped the executive pay debate and is arguably the primary reason the performance pay loophole made it into the tax code.

Once Section 162(m) became law, what do you suppose happened next? Predictably, companies started dispensing more compensation that qualified as performance pay, particularly stock options. Median executive compensation levels for S&P 500 Industrial companies almost tripled in the 1990s, mainly driven by a dramatic growth in stock options, which doubled in frequency.

Most of us think of skyrocketing CEO pay as simply a moral problem. However, economists like Piketty and my Roosevelt Institute colleague Joseph Stiglitz have been expounding about the havoc that rising income inequality wreaks on our economy (and democracy). When middle-class wages stagnate, consumer demand diminishes, which has tremendous spillover effects in terms of investment, job creation, tax revenue, and so forth. That particular set of problems relates to how much CEOs are paid. But there are also costly problems with the structure of CEO pay, i.e. what they’re paid with.

Performance pay can (and has) made executives very wealthy, very quickly, which creates incentives for shortsighted, excessively high-risk, and occasionally fraudulent decisions in order to boost stock prices. What kind of effect does this behavior have on the economy at large? Think mortgage crisis and subsequent global financial meltdown. Performance pay also diminishes long-term business investments. According to William Lazonick, in order to issue stock options to top executives while avoiding the dilution of their stock, corporations often use free cash flow for stock buybacks rather than spending on research and development, capital investment, and increased wages and new hiring.

All this and Americans get the bill. Beyond the innumerable costs we’ve borne from the recent economic crisis, the Economic Policy Institute calculated that taxpayers have subsidized $30 billion to corporations for the performance pay loophole between 2007 and 2010. According to a recent Public Citizen report, the top 20 highest-paid CEOs received salaries totaling $28 million, but had deductible performance-based compensation totaling over $738 million. Assuming a 35 percent tax rate, that’s a $235 million unpaid tax bill. The Institute for Policy Studies calculated that during the past two years, the CEOs of the top six publicly held fast food chains “pocketed more than $183 million in performance pay, lowering their companies’ IRS bills by an estimated $64 million.”

Congress is long overdue to close the performance pay loophole. The Supreme Court just made that harder. Thanks to Citizens United and now the McCutcheon decision, the same CEOs who are benefitting from the loophole are much freer to draw upon the corporate coffers to donate big money to politicians to maintain these loopholes.

Nevertheless, there is potential for getting it done. Senators Blumenthal (CT) and Reed (RI) have introduced the Stop Subsidizing Multi-Million Dollar Corporate Bonuses Act (S. 1476), which would finally end taxpayers’ subsidies to CEOs by closing the performance pay loophole and capping the tax deductibility of executive pay at $1 million. In the House, Rep. Lloyd Doggett (D-TX) has introduced a companion bill, HR 3970.

There are many policy ideas for how to curb skyrocketing CEO pay. Piketty and his colleague Emmanuel Saez argue for a much higher income tax rate for top incomes. (The growth rate of CEO pay was at its lowest when the U.S. had confiscatory tax rates for the very rich.) In the current political climate, a more viable step toward slowing the growth of CEO pay and the damage it does to our economy is to, at long last, close the performance pay loophole. It should never have been there in the first place.


By: Susan Holmberg, a Fellow and Director of Research at the Roosevelt Institute; The National Memo, April 21, 2014



April 22, 2014 Posted by | Corporate Welfare, Economic Inequality | , , , , , , , | Leave a comment

“Dopey Media Whiffs Again”: No, Dems Aren’t “Playing Politics” By Exposing GOP Idiocy

Lazy Beltway pundits have discovered a new Obama scandal: The president is telling his base the truth about how Republicans are making their lives worse, and he must be stopped.

Last week, Obama was accused of ginning up his base’s anger over voting rights: The New York Times reduced his Friday speech on the issue to an effort “to rally his political base,” while the Washington Post depicted the Democrats’ focus on voting rights as mere partisan strategy, calling it the party’s “most important project in 2014.”

Then came the National Journal’s James Oliphant, declaring that “Democrats are giving Republicans a run for their money in practicing the politics of grievance.” Oliphant accused Democrats of cynically exploiting anger over voter ID laws and the failure of bills to hike the minimum wage, reform the immigration system and help women achieve pay equity, for political gain.

Slate’s John Dickerson has topped them all, however, with “Obama trolls the GOP,” his Thursday column accusing the president of lying about the wage gap between men and women in order to win votes. Dickerson is the one doing the trolling, as he sort of admits upfront, blaming the Internet for rewarding columns that call the president names and make an argument without nuance.

But the essence of Dickerson’s argument is of a piece with the lazy “grievance” meme spreading among his peers: Obama is doing something wrong by telling a component of his coalition, in this case women, that Republican policies are hurting them. In other words, telling the truth while also, yes, practicing politics.

We can certainly debate which number we should use when debating pay equity, but the notion that Obama is deliberately lying to create “stray voltage” by choosing the wrong number seems cynical or worse. Dickerson relies on a Major Garrett column that relies on an older Major Garrett column in which White House adviser David Plouffe explained his theory of “stray voltage” – how any controversy, even ones that seem to hurt Obama, can be put to good political use when “stray voltage” from said outrage sparks the ire of Obama’s base.

Supposedly, the controversy around the White House continuing to use the Census Bureau figure – that women make 77 cents to a man’s dollar – even though other studies find a smaller gap, cements the impression that Republicans oppose measures to close the gap, and may create “stray voltage” to galvanize women voters in 2014 and 2016. Oliphant likewise relies on the pay-gap flap, and the Democrats’ embrace of the doomed Paycheck Fairness Act, as an example of unfair “grievance politics.”

But Republicans do oppose virtually all measures that might close the gap. It’s not just the Paycheck Fairness Act; take the minimum wage. Republicans (and others) say that 77 percent figure exaggerates the pay gap between equally qualified men and women, because women are clustered in low-wage fields. Raising the minimum wage would be a great way to get at that particular pay-gap widener, since two thirds of minimum wage workers are women. But of course, Republicans oppose not only the Paycheck Fairness Act, but an increase in the minimum wage as well.

Oh, but Democrats continuing to agitate for a minimum wage hike? That’s also unfair “grievance politics,” according to Oliphant, because “it may animate minority voters.” Concern about traditional low turnout in midterm elections, he writes:

… has forced the party to find reasons for people to come out and vote, and they’ve selected issues that target slices of the electorate. Hence, equal pay, an issue that especially resonates with single women; the minimum wage, which may animate minority voters; and immigration reform, which galvanizes Hispanics. And likely coming soon to a [Harry] Reid press availability near you: student-loan modification, teed up for the hard-to-get youth vote.

So let me make sure I understand. Telling your voters, accurately, that Republicans are trying to make it harder for them to vote, and are blocking action on pay equity, the minimum wage and immigration reform is unfair “grievance politics”? Likewise, any effort to deal with the scandal of $1 trillion in student loan debt? Oliphant compares it to the grievance politics practiced by Republicans under Richard Nixon and Ronald Reagan. But that form of grievance politics mainly relied on inflaming white voters’ fears of cultural and racial change with false or highly exaggerated claims about Democrats.

I would also argue that when one party’s leaders declare upfront that they’re going to block everything the other party’s president tries to do, and when that party even retreats from solutions to problems that it once favored – in the GOP’s case, that includes the individual mandate, immigration reform, cap and trade, the Voting Rights Act, and periodic increases to the minimum wage — the cultivation of anger in order to turn out voters is an excellent and entirely defensible strategy. In fact, Republican obstructionism seems designed at least partly to demoralize the Obama coalition — many of them occasional voters already discouraged by the political process. If you can convince young people, Latinos and women that voting changes nothing, you can make up for your reliance on aging white voters.

This new story line also reinforces a core Republican claim about Obama and the Democrats: that they’re trying to buy off the electorate with “gifts,” to use sore-loser Mitt Romney’s term. When rich people use the political process to make their lives better, that’s just the way things work. When people who aren’t rich do so, they’re looking for a handout. This new “grievance politics” story line is just one more way mainstream journalism’s weakness for false equivalence, which is intellectually lazy, politically rewards Republicans.


By: Joan Walsh, Editor at Large, Salon, April 17, 2014

April 18, 2014 Posted by | Journalism, Media, Republicans | , , , , , , , | Leave a comment

“Time To Make A Choice”: Huge Wealth Gap Caused Backlash Before And May Again

A majority of the Supreme Court decided last week that the First Amendment protects the right of individuals to pour as much as $3.6 million into a political party or $800,000 into a political campaign.

The court said such spending doesn’t corrupt democracy. That’s utter baloney, as anyone who has the faintest familiarity with contemporary American politics well knows.

The McCutcheon vs. FEC decision would be less troubling were the distribution of income and wealth in America more equal. But over the last few decades it has become extraordinarily concentrated. The richest 400 Americans now possess more wealth than the bottom half of the U.S. population put together.

A few billionaires are now deciding on whom to place their bets for the next presidential election. Before McCutcheon vs. FEC, they had to resort to bulky super PACs and so-called “social welfare” organizations. Now they can dole out their money directly.

McCutcheon vs. FEC coincides with the publication in English of an important book by French economist Thomas Piketty, “Capital in the 21st Century.” Piketty sees the United States and most of the rest of the world returning to the vast inequalities of wealth that were taken for granted as late as the end of the 1800s.

“It is almost inevitable that inherited wealth will dominate wealth amassed from a lifetime’s labor by a wide margin, and the concentration of capital will attain extremely high levels,” Piketty writes. Those levels are potentially incompatible with the meritocratic values and principles fundamental to modern democratic societies.

Piketty shows that for several centuries before World War I, the financial returns to the owners of capital exceeded the rate of growth of modern economies, creating a widening divergence between wealth and incomes. That divergence meant widening inequality between the owners of those assets and the people who worked for a living.

The gap was reversed in the 20th century by two brutal wars and a Great Depression that wiped out the dynastic fortunes of Europe and the accumulated wealth of America’s Gilded Age. But in recent decades, slower growth and higher returns to the owners of capital have allowed the older pattern to reassert itself.

In this sense, McCutcheon vs. FEC marks another step back toward dynastic rule, enabling the owners of vast wealth to compound their holdings through politics.

Nonetheless, I think Piketty’s analysis is way too pessimistic. He disregards the political upheavals and reforms that such wealth concentrations have periodically fueled – such as America’s populist revolts of the 1890s followed by the progressive era before World War I, and the German socialist movement in the 1870s followed by Otto von Bismarck‘s creation of the world’s first welfare state.

Even at this particularly dark hour for democratic capitalism, we see evidence of a resurgent populism and progressivism in the United States. The so-called Tea Party movement is, in a sense, a populist revolt against large corporations, Wall Street and the Republican Party establishment. And the Occupy movement, although apparently short-lived, has found new voice in the recent electoral victories of New York Mayor Bill de Blasio and Massachusetts Sen. Elizabeth Warren.

Democratic capitalism might have within it a balance wheel that Piketty too readily discounts: a public that, once it catches on to what’s happening, refuses to cede control to concentrated economic power.

In turn-of-the-century America, when the lackeys of robber barons literally placed sacks of cash on the desks of pliant legislators, the great jurist Louis Brandeis warned that the nation faced a choice. “We may have democracy, or we may have wealth concentrated in the hands of a few,” he said, “but we can’t have both.”

Soon thereafter, America made the choice. After the turn of the century, public outrage gave birth to the nation’s first campaign finance laws, along with the first progressive income tax. The trusts were broken up and regulations imposed to bar impure food and drugs. Several states enacted America’s first labor protections, including the 40-hour workweek.

In the short term, McCutcheon vs. FEC might make it easier for today’s robber barons to take over American politics. But by inviting them to corrupt our democracy so brazenly, it also might fuel a popular backlash leading to a new era of reform. It has happened before.


By: Robert Reich, Chancellor’s Professor of Public Policy at the University of California at Berkeley; San Francisco Chronicle, April 11, 2014




April 14, 2014 Posted by | Campaign Financing, Economic Inequality | , , , , , , , | Leave a comment

“We’ve Got A Good Thing Going”: Why Can’t You Miserable Commoners Be Happier With Your Lot?

Venture capital billionaire Tom Perkins may be new to the trolling game, but he made an absolutely spectacular debut when he wrote to the Wall Street Journal a few weeks back warning that resentment toward the super-rich in American society reminded him a lot of the Nazi campaign against the Jews. Then last weekend, he followed that bit of wisdom by proposing that the wealthy ought to get more votes than the unwashed masses, since they pay more in taxes. “The Tom Perkins system is: You don’t get to vote unless you pay a dollar of taxes,” he said in a speech. “But what I really think is, it should be like a corporation. You pay a million dollars in taxes, you get a million votes. How’s that?”

That, you’re probably saying, is abominable. Why not just let the richest one person choose the president? He’s got the most money, so he’s obviously the wisest and has the greatest interest in government, right? Although Perkins might not be too pleased with that outcome, since the richest person in America is Bill Gates, who seems pretty liberal, what with his efforts to improve global health and fight poverty rather than letting the sick and destitute contemplate their well-deserved fate while they gaze up in admiration at their betters.

Okay, so Tom Perkins is kind of a lunatic. But is he a representative lunatic? Do his peers up in the penthouse suite and down at the yacht club think the same things he does, or is he an outlier?

This is actually a difficult question to answer, because while most good surveys ask about people’s income, their scales usually stop at a pretty modest level. Often the final option is “$100,00 per year or more,” which doesn’t allow you to separate the wealthy from the upper-middle-class. Nevertheless, the higher you go up the income scale, the more Republican people tend to be. Take, for instance, the 2012 election results:

Even if those with incomes over $100,000 tilt Republican, there are still plenty of Democrats there. But that’s not really the people Perkins is talking about. The people who arouse his concern are those earning seven, eight, or nine figures a year, and being Republican is only the start (I’m sure there are plenty of Republicans who think Perkins takes his advocacy for the upmarket downtrodden quite a ways too far). I’ve only come across one study that attempted to assess these people’s opinions quantitatively. It’s this one from Benjamin Page, Larry Bartels, and Jason Seawright. The sample of ultra-wealthy people they managed to assemble is pretty small, so we shouldn’t make too many sweeping judgments from it, but the differences with the general public they found are pretty striking:

The days of noblesse oblige are obviously long gone. Fortunately for these folks, it isn’t really necessary for them to get votes proportional to their net worth; the government already works hard for them. Even in the administration of that socialist Barack Obama, the Dow has hit record levels and the wealth of the wealthiest has gone nowhere but up. So things are working out pretty well. Which is why, I’m guessing, most of them would like Tom Perkins to keep his mouth shut. Sure, there may be a few who actually agree with him that the wealthy deserve more votes. But why admit that in public? After all, they’ve got a good thing going.


By: Paul Waldman, Contributing Editor, The American Prospect, February 19, 2014

February 20, 2014 Posted by | Economic Inequality, Plutocrats | , , , , , | Leave a comment

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