“Citigroup Becomes Its Own Self-Serving Lawmaker”: 21st Century Civics Lesson; How A Corporate Bill Becomes A Law
Congress, which has long been so tied up in a partisan knot by right-wing extremists that it has been unable to move, suddenly sprang loose at the end of the year and put on a phenomenal show of acrobatic lawmaking.
In one big, bipartisan spending bill, our legislative gymnasts pulled off a breathtaking, flat-footed backflip for Wall Street, and then set a dizzying new height record for the amount of money deep-pocketed donors can give to the two major political parties. It was the best scratch-my-back performance you never saw. You and I didn’t see it — because it happened in secret.
The favor was huge — allowing Wall Street’s most reckless speculators to have their losses on risky derivative deals insured by us taxpayers. Yes, such losses were a central cause of the 2008 financial crash and subsequent unholy bank bailout, which led to passage of the Dodd-Frank reform law, including a provision sparing taxpayers from covering future losses. But with one, compact, 85-line provision inserted deep inside the 1,600-page, trillion-dollar spending bill, Congress did a dazzling flip-flop on that regulation, putting us taxpayers back on the hook for the banksters’ high-risk speculation.
In this same spending bill, Congress also used its legislative athleticism to free rich donors (such as Wall Street bankers) from a limit of under $100,000 on the donation that any one of them can give to political parties. In a spectacular gravity-defying stunt, lawmakers flung the limit on these donations to a record-setting 15 times higher than before. So now bankers who are grateful to either party for being able to make a killing on taxpayer-backed deals can give $1.5 million each to the parties.
Perhaps you recall from your high school civics class that neat, one-page flow chart showing the perfectly logical, beautifully democratic process that Congress must go through to pass our laws.
What a bunch of kidders those chart makers were! To see how the sausage is really made, let’s take a look at that trillion-dollar budget bill that Congress squeezed out just before Christmas. It was crammed with special corporate favors, such as: reinstating a Bush rule allowing mining giants to explode the tops off ancient Appalachian mountains and then bulldoze the rubble down into the valley below, destroying pristine mountain streams; another letting long-haul trucking outfits require their drivers to be on the road more than 11 hours a day and up to 82 hours per week, filling our highways with highballing, sleep-deprived truckers; and cutting $60 billion from the Environmental Protection Agency, freeing up polluters to go unpunished for polluting.
None of these favors had anything to do with that “how a bill becomes law” flow chart in our civics textbook. No bill was filed, no public hearings, no debate, no vote. Just — BAM! — there they were, a thicket of benefits secretly slipped into the 1,600-page budget bill by … well, by whom? Largely by corporate lobbyists, though they get one of their for-hire congresscritters to do the actual dirty deed.
The taxpayer subsidy for Wall Street, for example, was written by Citigroup. The bank’s lobbyists then handed the provision to Kansas Republican Kevin Yoder, who slipped it into the bill. Thus, the Wall Street conglomerate that took a $50 billion bailout from us taxpayers just seven years ago to save itself from its own bad deals essentially was allowed to become an unelected, self-serving, do-it-yourself, backroom “lawmaker” to make sure that your and my tax dollars will be there to cover its next mess-up.
And that, boys and girls, is the real flow chart for making our laws. It’s always an amazing sight when Wall Street and Congress get together — especially when they get together out of sight.
By: Jim Hightower, The National Memo, December 24, 2014
“The Real Deadbeats”: You’re Not The Deadbeat. The Waltons Are The Deadbeats
If you are tired of your taxpayer dollars being used to pay Wal-Mart employees the money that the Waltons refuse to pay them, then you might be interested in the large Black Friday protests that are occurring at 1,600 Wal-Mart stores in 49 states throughout the nation right now.
“I have to depend on the government mostly,” says Fatmata Jabbie, a 21-year-old single mother of two who earns $8.40 an hour working at a Walmart in Alexandria, Virginia. She makes ends meet with food stamps, subsidized housing, and Medicaid. “Walmart should pay us $15 an hour and let us work full-time hours,” she says. “That would change our lives. That would change our whole path. I wouldn’t be dependent on government too much. I could buy clothes for my kids to wear.”
The nation’s largest employer, Walmart employs 1.4 million people, or 10 percent of all retail workers, and pulls in $16 billion in annual profits. Its largest stockholders—Christy, Jim, Alice, and S. Robson Walton—are the nation’s wealthiest family, collectively worth $145 billion. Yet the company is notorious for paying poverty wages and using part-time schedules to avoid offering workers benefits. Last year, a report commissioned by Congressional Democrats found that each Walmart store costs taxpayers between 900,000 and $1.75 million per year because so many employees are forced to turn to government aid.
This isn’t complicated. If you have a job at Wal-Mart and you still need Medicaid, food stamps and subsidized housing, then you aren’t just getting shafted by the Waltons. You’re also being paid your missing wages by the federal government. You’re not the deadbeat. The Waltons are the deadbeats.
By: Martin Longman, Political Animal, The Washington Ponthly, November 28, 2014
“A Pension Jackpot For Wall Street”: A Vicious Cycle Whereby The Financial Industry Wins And Taxpayers, Once Again, Lose
Most consumers understand that when you pay an above-market premium, you shouldn’t expect to get a below-average product. Why, then, is this principle often ignored when it comes to managing billions of dollars in public pension systems?
This is one of the most significant questions facing states and cities as they struggle to meet their contractual obligations to public employees. In recent years, public officials have shifted more of those workers’ pension money into private equity, hedge funds, venture capital and other so-called “alternative investments.” In all, the National Association of State Retirement Administrators reports that roughly a quarter of all pension funds are now in these “alternative investments” — a tripling in just 12 years.
Those investments are managed by private financial firms, which charge special fees that pension systems do not pay when they invest in stock index funds and bonds. The idea is that paying those fees — which can cost hundreds of millions of dollars a year — will be worth it, because the alternative investments will supposedly deliver higher returns than low-fee stock index funds like the S&P 500.
Unfortunately, while these alternative investments have delivered a fee jackpot to Wall Street firms, they have often delivered poor returns, meaning the public is paying a premium for a subpar product.
In New Jersey, for example, the state’s alternative investment portfolio has trailed the stock market in seven out of the last eight years, while costing taxpayers almost $400 million a year in fees. Had the state followed the advice of investors like Warren Buffett and instead invested its alternative portfolio in a low-fee S&P 500 index fund, New Jersey would have had more than $5 billion more in its pension fund. In all, as New Jersey plowed more pension money into alternatives, its pension returns have routinely trailed median returns for all public pension systems.
It is the same story in other states that have been increasing their alternative investments.
In Rhode Island, Democratic state treasurer Gina Raimondo’s shift of pension money into alternatives has coincided with the pension system trailing median returns. Had the state generated median returns, it would have had $372 million more in its pension system.
Likewise, a Maryland Public Policy Institute study shows that returns from that state’s $40 billion pension system have trailed the median for the last decade. Had the state met the median, it would have $3.2 billion more in its pension system — an amount the study’s authors note is enough to “award 80,000 poor children with $40,000 four-year college scholarships.”
It is a similar tale in North Carolina, Kentucky and many other locales. In short, public officials are spending more and more pension money on high-fee alternative investments, and those investments are generating worse returns than other low-fee investment vehicles.
That brings back the original question: Why are pension funds pursuing such an investment strategy? Some of the answer may have to do with the same psychology that encourages the gambler to try to big-bet his way out of deficits. But it also may have to do with campaign contributions. After all, many of the politicians who have been pushing the alternative investments just so happen to benefit from Wall Street’s campaign contributions.
That spotlights a pernicious dynamic that may be at work: The more public money that goes into alternative investments, the more fees alternative investment firms generate, the more campaign contributions are made by those firms, and thus the more money politicians devote to alternative investments, even as those investments deliver poor results for pensioners. It is a vicious cycle whereby the financial industry wins and taxpayers, once again, lose.
By: David Sirota, Senior Writer at the International Business Times; The National Memo, September 26, 2014
“What We’ve Paid For War In Afghanistan And Iraq”: Apparently, ‘Mission Accomplished’ Means ‘Mission Never-Ending’
War is hell.
Major General Harold Greene could certainly tell you all about that — but, sadly, he’s dead. On August 5, General Greene became the highest-ranking American soldier to die in our unfathomable, 13-year war in Afghanistan, joining 2,339 other servicemembers who’ve paid the ultimate price for being sent by warmongering politicians into that fight for… well, for what?
No president or congressional leader has ever offered a coherent or credible answer, much less a compelling one, for why our troops have been made to sacrifice so much for so little. Indeed, how bitterly ironic that the general was not killed by the Taliban or al Qaeda, whom we’re supposedly fighting, but by one of the Afghan government’s own soldiers, whom we’re supposedly helping.
Another blunt reminder of the hellish absurdity of our political leaders’ quick-draw approach to war can be seen in a recent report by the Congressional Research Service. Military budget analysts in this non-partisan congressional agency keep track of how much the Afghanistan and Iraq wars are costing us taxpayers. The tally has now topped a trillion dollars — and that amount doesn’t count the cost of the the future health care bill for veterans or the enormous interest payments that’ll be made on that debt, which will multiply the trillion-dollar outlay three- or fourfold.
And the meter is still running. The Pentagon, White House, and Congress intend to keep a contingent of soldiers and trainers in both countries for the foreseeable future, plus provide billions more of our tax dollars to both countries for building their infrastructure and education systems. Meanwhile, a trillion dollars and so many American lives later, Iraq is in chaos and falling apart, and Afghanistan is mired in corruption and facing a Taliban takeover.
And — ready or not — here we go again. Our military has been hurled back into the chaos of Iraq. Apparently, “Mission Accomplished” is “Mission Never-Ending.”
We’re told that, for now, America will provide only jet fighters, drones, weaponry, humanitarian airdrops, military advice, training — and, of course, our money — to the cause of making this unworkable country work. At least President Obama has put his foot down and sensibly pledged that there will be no American “boots on the ground.”
However, in the politics of Iraq, don’t count on “sensible” surviving the chaos. The Shia-Sunni-Kurdish divide still rages on there, now exacerbated by the theocratic Islamic State’s sudden sadistic invasion. Plus, Iraq’s former prime minister (a corrupt autocrat whom our foreign policy geniuses installed during the disastrous Bush-Cheney reign of errors) was so detested by practically everyone that the parliament dumped him. However, he added slapstick to Iraq’s chaos by desperately trying to cling to power, finally having to be almost physically hauled away.
But the least sensible factor affecting Iraq is our own red-faced, militaristic, warmongering members of Congress, demanding that we must go to war. For example, GOP Senator Lindsey Graham is filled with bloodlust over the ferocious rise of the Islamic State in Iraq, so he says we have no choice but to return there to destroy the fanatics.
Of course, by “we,” congressional warriors like Lindsey don’t mean them, their loved ones, or anyone else they actually know.
Since the end of World War II, practically every American president, backed by Congress, has sent our troops to die in wars of lies and political flimflam. From Vietnam to Grenada to Iraq, our soldiers have been in senseless wars nearly non-stop for 70 years. It’s time to tell the perennial political sword-rattlers that they should wield the swords themselves. War is hell…and this one is stupid.
By: Jim Hightower, The National Memo, August 20, 2014
“All Aboard, Suckers”: Florida Taxpayers About To Be Railroaded
Here’s a really clever idea:
Let’s run express passenger trains 16 times round-trip every day between downtown Miami and the Orlando airport. That’s right, the airport.
Except the trains won’t go straight there, but will stop first in Fort Lauderdale and West Palm Beach, then head up the seaboard to Cocoa and hang a hard left 40 miles west across the middle of the state.
Oh, and the trip will take at least three hours one way.
Leaving aside the fact that you can inexpensively drive from downtown Miami to the Orlando airport in about the same time (or fly commercially in only 42 minutes), the project grandly known as All Aboard Florida raises other elementary questions.
Like, “Why?”
As it waddles down the tracks, this turkey enjoys the robust blessing of the Republican-led Legislature and Governor Rick Scott, who said the following to a reporter last month:
“It’s all funding that will be provided by somebody other than the state. It’s a private company.”
Scott’s either clueless or lying. All Aboard Florida is a future train wreck for taxpayers. With the possible exception of the Hogwarts Express, passenger rail services almost always lose money and end up subsidized by government.
All Aboard Florida already has applied for $1.6 billion in federal loans and plans to rent space at a new terminal at the Orlando International Airport, for which state lawmakers recently appropriated $213 million.
That’s just the beginning. According to the Scripps/Tribune Capitol Bureau, the company also wants the state to pay $44 million to connect its lines with Tri-Rail, the daily commuter link serving South Florida.
Only three short years ago, playing the Tea Party scrooge, Scott killed a proposed high-speed train project between Orlando and Tampa. In rejecting about $2 billion in federal funds, the governor asserted that Florida taxpayers would have ended up paying to operate the rail service once it was finished. He was right.
Now he’s yodeling a different tune, perhaps because his latest chief of staff, Adam Hollingsworth, formerly worked for one of the companies connected to All Aboard Florida. (When a reporter asked Scott if he’d talked to Hollingsworth about the project, he didn’t answer.)
Meanwhile, all along the proposed route, opposition is erupting. Here was the front-page headline in the July 13 Indian River Press Journal: ALL AGAINST ALL ABOARD.
Officials in Stuart, Fort Pierce, Vero Beach and other communities are rightly worried about the impact of adding 32 trains every day on the Florida East Coast tracks that All Aboard Florida plans to use.
The frequent stoppage of traffic at rail crossings is a major concern, especially because it will impede police, firefighters and other emergency responders. For residents and businesses near the track, the train noise and vibrations will be a recurring headache.
Indian River County Commissioner Bob Solari believes it could hurt local property values. And where the trains will cross busy waterways like the St. Lucie River, many say the repeated lowering of the railroad bridges will restrict boat travel and hurt the marine trades.
All Aboard Florida insists that its trains will be moving so fast that boaters and motorists won’t be inconvenienced for long periods, and it has promised to upgrade the road crossings to make them safer.
Few of the many critics seem reassured. Municipalities and counties fear they’ll be stuck with funding new infrastructure, just for the privilege of watching shiny locomotives whiz past all day long.
The whole project is anchored on the dubious notion that millions of people can’t wait to hop a train from Miami to the Orlando airport (via Cocoa). Although All Aboard Florida has sued to keep secret its ridership surveys, its website sunnily predicts that three out of four passengers will be tourists.
Tourists who are what … afraid to fly? Too scared to drive?
Talk about a narrow market.
And while it’s always beneficial to reduce the number of cars on the highway, this particular experiment can’t possibly break even. The only money will be made in the beginning with real-estate deals, by well-connected contractors working on new stations, modernizing the rails and laying 40 miles of fresh track between Brevard County and the land of Disney.
At this point, the momentum for All Aboard is all political, and only the rising outcry can derail it. Scott, who’s up for re-election, recently asked the Federal Railroad Administration to extend to 75 days the public-comment period that will follow the agency’s upcoming environmental impact study.
If the trains ever start running, spewing red ink with every toot of their horns, don’t be surprised if the state steps in to bail out the project, or asks the feds to do it.
Either way, we’ll get stung with the bill somewhere down the line.
All aboard, suckers.
By: Carl Hiaasen, Columnist, The Miami Herald; The National Memo, July 22, 2014
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