“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
“LePage Vetoes Medicaid Expansion For All The Wrong Reasons”: Maine’s Paul LePage Is One Uninformed And Paranoid Governor
Maine’s Democratic state House Speaker, Mark Eves, noted the circumstances this week surrounding Medicaid expansion. “We have a bipartisan plan for life-saving health care for tens of thousands of Mainers,” he said. “It creates jobs, it save lives, it saves money.”
All of this happens to be true. Every state north of Virginia has either embraced Medicaid expansion or is working towards doing so – except Maine, where Gov. Paul LePage (R) refuses to cooperate. More than 60,000 low-income Mainers would benefit from the policy, on top of the economic and fiscal benefits, but the Republican governor nevertheless vetoed Medicaid expansion yesterday.
The measure also would have established a managed care system for all 320,000 beneficiaries, an effort to control costs in the $2.5 billion program, which is Maine’s version of the Medicaid health insurance program.
Under the Affordable Care Act, also known as Obamacare, the federal government offered to reimburse states for 100 percent of the cost of expansion for at least three years, then gradually reduce reimbursements rates to about 90 percent.
But in his veto message to the Legislature, LePage wrote that Maine could neither afford expansion nor trust the federal government to deliver on its promises.
The rejection didn’t come as a surprise, and Democratic state lawmakers will try to override LePage’s veto. By all accounts, however, they face an uphill climb – some GOP state lawmakers are on board with the policy, but probably not enough to generate a two-thirds majority.
But what was somewhat surprising was just how awful LePage’s defense was. The governor, struggling in his re-election bid this year, had plenty of time to come up with a credible rationale for blocking Medicaid expansion, but he didn’t come up with much.
“It is shortsighted to think federal funds will always be available, especially after watching the federal deficit climb and witnessing continual delays and changes from Washington,” he said in a statement.
I realize that Paul LePage sometimes struggles with policy details, but there are some rudimentary facts he should probably understand before telling 60,000 people they can’t have health insurance.
For example, if LePage is “watching the federal deficit climb,” he’s not watching closely enough. The federal deficit isn’t climbing; it’s shrinking. In fact, in recent years, we’ve seen the fastest deficit reduction than at any point since World War II. Does LePage not know that? Maybe he should have looked it up before issuing his statement?
What’s more, LePage is convinced federal funds may not “always be available” to finance Medicaid expansion. In other words, he’ll refuse the funds now because maybe, someday, far off in the future, Washington won’t offer the funds they’re promising to provide.
Sorry, 60,000 struggling Mainers. You can’t have access to affordable medical care because your governor is paranoid about a fiscal situation that may or may not materialize at some point.
These are the best arguments the governor’s office could come up with after having months to prepare?
By: Steve Benen, The Maddow Blog, April 10, 2014
“IRS Hearings Are Another Republican Circus”: A Folly Wrapped In A Charade And Shrouded By Farce
Dave Camp had a secret.
The House Ways and Means Committee chairman was ready to send the panel’s files on former IRS official Lois Lerner to the Justice Department for a possible prosecution — a handover that could have been accomplished with a simple phone call to the attorney general. Instead, Camp put on a show.
The Michigan Republican invited the press and the public to the committee’s storied hearing room Wednesday, only to call an immediate vote to kick them out. This way, the panel could meet in a closed session to debate Lerner’s fate — a dramatic but meaningless gesture because the sole purpose of the secret meeting was to authorize releasing the committee’s files on Lerner to the public.
Republicans said the closed session was required to make the information public, but the panel’s ranking Democrat, Sandy Levin (Mich.), said the debate should be held in the open.
“Mr. Chairman?” he inquired after the plan to go into secret session was announced.
Camp ignored Levin. “The clerk will call the roll,” he said.
“Mr. Chairman?”
“The clerk will call the roll.”
“Mr. Chairman?”
“The clerk will call the roll.”
Levin pressed on, patiently raising a point of order.
“Just chill out,” the 60-year-old Camp finally snapped at his 82-year-old colleague.
“I’m very chilled out,” Levin replied.
This was true. Levin hadn’t raised his voice at all. Camp, on the other hand, was agitated — for good reason.
The lawmaker, who is retiring at the end of this term, has built a solid reputation over the years, and he recently won plaudits for releasing a thoughtful proposal to overhaul the tax code. Camp was on course to retire with dignity — at least until he allowed his committee room to be turned into a circus tent Wednesday. It was a folly wrapped in a charade and shrouded by farce.
Folly: There was no need to have a formal hearing to convey the information to the Justice Department, which is already investigating the IRS’s targeting of conservative groups.
Charade: The committee made a big show of having its secret hearing, even though it was a foregone conclusion that the members would vote along party lines to release its “secret” information — including the transcript of the secret hearing — to the public.
Farce: Camp said Lerner could be prosecuted for releasing private taxpayer information. Yet in making public its Lerner files, the committee used its authority to do legally the same thing it accused her of doing illegally: releasing confidential taxpayer information. That hadn’t been done in at least 40 years.
Of course, the taxpayers whose information was released — mostly related to Karl Rove’s Crossroads GPS group — may not mind, because they have an interest in seeing somebody pay for the IRS’s targeting of a disproportionate number of tea party groups for extra scrutiny.
The IRS scandal didn’t come close to the “culture of corruption” Camp promised or the “targeting of the president’s political enemies” and coverup alleged by Darrell Issa (R-Calif.), whose committee is holding the contempt vote. Instead, the investigations didn’t go beyond Lerner, a civil servant who led the agency’s tax-exempt division. “This was a career employee in the IRS potentially who did all these things,” Camp said after Wednesday’s secret session. “So we have to make sure that the signal goes out that this doesn’t happen again.”
That’s a reasonable sentiment, and one shared by Levin, who on Wednesday said Lerner had been guilty of “clear mismanagement.” Democrats objected not to Camp turning over the committee’s information on Lerner, but to the cloak-and-dagger hearing followed by the wholesale release of tax records.
The AP’s Stephen Ohlemacher asked Camp why he didn’t just “pick up the phone” rather than make private taxpayer files public.
Camp agreed that such a release was unprecedented but said, “This is so important that I think the public has a right to know.” He repeatedly called the matter “important” and “a very serious thing.”
But the chairman’s claims of importance were undermined by his committee’s antics, including its showy secrecy. Reporters, waiting out the two-hour closed session in the hallway, were treated to Krispy Kreme doughnuts by the committee’s staff. But inside the room, other staffers were unplugging the journalists’ cables, just to be sure nobody pierced the veil.
When Camp reconvened the hearing after the secret session, cameramen called out for him to wait as they reassembled their equipment. Rep. Paul Ryan (R-Wis.) complained. “Are you guys ready?” he moaned.
But Camp waited, which was wise. What good is a farce if it isn’t on film?
By: Dana Milbank, Opinion Writer, The Washington Post, April 9, 2014
“Republican’s ‘Un-American’ Activities”: Darrell Issa Tries McCarthyite Move To Revive Flailing IRS Probe
GOP congressman and House Committee on Oversight and Government Reform chairman Darrell Issa’s quest to uncover the smoking gun of the IRS scandal story — the missing Gotcha! moment that will cause the Obama administration to crumble under the weight of its own corruption — has run aground lately, primarily due to the people in Issa’s cross hairs pleading the Fifth Amendment. But that doesn’t mean Issa is quite yet ready to give up.
According to a report in the Huffington Post, Issa and his allies are considering making a rare argument and a procedural move in order to force former IRS official Loris Lerner to testify. Lerner used to be the head of the IRS department tasked with figuring out whether to grant tax-exempt status to groups claiming to be apolitical in nature and focused primarily on “social welfare.” Republicans have charged that the IRS disproportionately targeted right-wing organizations for review. Lerner resigned and has spoken to Issa’s committee, but has also refused to answer some questions by pleading the Fifth.
In response to Lerner’s invocation of this constitutional right, Issa is now arguing that because the former government official did speak with the committee before pleading the Fifth, she waived her right to do so and is thus eligible to be held in contempt of Congress and even possibly face criminal charges. A report by the Congressional Research Services that is pushing Issa’s argument calls Lerner “critical to the Committee’s investigation[.]” Further, the report states that “Without [Lerner’s] testimony, the full extent of the IRS’s targeting of Tea Party applications cannot be known, and the Committee will be unable to fully complete its work.”
One potential problem with Issa’s latest move, however, is the fact that no American has ever been successfully prosecuted for pleading the Fifth before Congress. Indeed, even the attempt to prosecute on such grounds is rare, with most of the examples in recent history having occurred during the McCarthyite years of the 1950s.
Most of the cases involved the House Un-American Activities Committee and its communist witch-hunts in the 1950s. But one that is particularly instructive involves a Buffalo, N.Y., woman named Diantha Hoag, who was fired from her factory job after Sen. Joe McCarthy (R-Wis.) and his Senate Committee on Government Operations accused her of being a communist and she pleaded the Fifth.
In that case, Hoag answered many more questions than Lerner did. She listed several places where she had lived, said she worked at a Westinghouse plant, and told committee members that she knew Westinghouse contracted with the military. Lerner never went beyond a short opening statement professing her innocence.
Hoag flatly refused to answer questions about her associates and any communist connections she may have had.
When McCarthy attempted to compel her testimony through the courts, as Issa is now threatening, a judge did not look kindly on the bid, declaring: “I reach the conclusion that the defendant did not waive her privilege under the Fifth Amendment and therefore did not violate the statute in question in refusing to answer the questions propounded to her. Therefore, I find that she is entitled to a judgment of acquittal on all counts.”
By: Elias Isquith, Salon, April 9, 2014
“That Old-Time Whistle”: The Kind Of Things Conservatives Say To Each Other All The Time
There are many negative things you can say about Paul Ryan, chairman of the House Budget Committee and the G.O.P.’s de facto intellectual leader. But you have to admit that he’s a very articulate guy, an expert at sounding as if he knows what he’s talking about.
So it’s comical, in a way, to see Mr. Ryan trying to explain away some recent remarks in which he attributed persistent poverty to a “culture, in our inner cities in particular, of men not working and just generations of men not even thinking about working.” He was, he says, simply being “inarticulate.” How could anyone suggest that it was a racial dog-whistle? Why, he even cited the work of serious scholars — people like Charles Murray, most famous for arguing that blacks are genetically inferior to whites. Oh, wait.
Just to be clear, there’s no evidence that Mr. Ryan is personally a racist, and his dog-whistle may not even have been deliberate. But it doesn’t matter. He said what he said because that’s the kind of thing conservatives say to each other all the time. And why do they say such things? Because American conservatism is still, after all these years, largely driven by claims that liberals are taking away your hard-earned money and giving it to Those People.
Indeed, race is the Rosetta Stone that makes sense of many otherwise incomprehensible aspects of U.S. politics.
We are told, for example, that conservatives are against big government and high spending. Yet even as Republican governors and state legislatures block the expansion of Medicaid, the G.O.P. angrily denounces modest cost-saving measures for Medicare. How can this contradiction be explained? Well, what do many Medicaid recipients look like — and I’m talking about the color of their skin, not the content of their character — and how does that compare with the typical Medicare beneficiary? Mystery solved.
Or we’re told that conservatives, the Tea Party in particular, oppose handouts because they believe in personal responsibility, in a society in which people must bear the consequences of their actions. Yet it’s hard to find angry Tea Party denunciations of huge Wall Street bailouts, of huge bonuses paid to executives who were saved from disaster by government backing and guarantees. Instead, all the movement’s passion, starting with Rick Santelli’s famous rant on CNBC, has been directed against any hint of financial relief for low-income borrowers. And what is it about these borrowers that makes them such targets of ire? You know the answer.
One odd consequence of our still-racialized politics is that conservatives are still, in effect, mobilizing against the bums on welfare even though both the bums and the welfare are long gone or never existed. Mr. Santelli’s fury was directed against mortgage relief that never actually happened. Right-wingers rage against tales of food stamp abuse that almost always turn out to be false or at least greatly exaggerated. And Mr. Ryan’s black-men-don’t-want-to-work theory of poverty is decades out of date.
In the 1970s it was still possible to claim in good faith that there was plenty of opportunity in America, and that poverty persisted only because of cultural breakdown among African-Americans. Back then, after all, blue-collar jobs still paid well, and unemployment was low. The reality was that opportunity was much more limited than affluent Americans imagined; as the sociologist William Julius Wilson has documented, the flight of industry from urban centers meant that minority workers literally couldn’t get to those good jobs, and the supposed cultural causes of poverty were actually effects of that lack of opportunity. Still, you could understand why many observers failed to see this.
But over the past 40 years good jobs for ordinary workers have disappeared, not just from inner cities but everywhere: adjusted for inflation, wages have fallen for 60 percent of working American men. And as economic opportunity has shriveled for half the population, many behaviors that used to be held up as demonstrations of black cultural breakdown — the breakdown of marriage, drug abuse, and so on — have spread among working-class whites too.
These awkward facts have not, however, penetrated the world of conservative ideology. Earlier this month the House Budget Committee, under Mr. Ryan’s direction, released a 205-page report on the alleged failure of the War on Poverty. What does the report have to say about the impact of falling real wages? It never mentions the subject at all.
And since conservatives can’t bring themselves to acknowledge the reality of what’s happening to opportunity in America, they’re left with nothing but that old-time dog whistle. Mr. Ryan wasn’t being inarticulate — he said what he said because it’s all that he’s got.
By: Paul Krugman, Op-Ed Columnist, The New York Times, March 16, 2014
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