“Being Rich In America Is Tough”: The Continuing Agonies Of The Super-Rich
As we well know by now, being rich in America is tough. Imagine driving your Porsche out the Goldman Sachs garage, intent on a relaxing weekend at your Hamptons retreat, only to find some wretched Occupy sympathizer giving you a dirty look through the haze of patchouli and resentment that surrounds him. Who could endure it? No wonder they keep comparing their fearful existence to that of the Jews of late-1930s Germany.
But now, according to the Washington Examiner, America’s plutocrats have a new worry:
Democratic super PACs have outraised their Republican counterparts by millions, a factor attributed in part to GOP donors’ fear of being targeted by the Internal Revenue Service—or “getting Koch’ed.”
Republican political operatives concede that there are multiple reasons for the Democrats’ advantage in super PAC money raised.
Among them: Labor unions have become among their largest and most consistent donors. But this election cycle, two new challenges have chilled GOP super PACs’ effort to raise cash from wealthy individuals and corporate donors: anxiety that they could get slapped with an IRS audit and unease that donating could lead to public demonization.
Not to let facts intrude on their paranoid fantasies, but let’s not forget what the IRS scandalette actually involved. There’s never been any credible allegation that anyone was audited because of their political beliefs. There’s never been any allegation that the IRS “targeted” donors to Republican super PACs. The worst thing that happened was that some Tea Party groups that had applied for 501(c)(4) status—claiming, utterly falsely, that they were charitable, non-political organizations, I might add—had to wait longer than they should have to get approval on their applications. (And, I have to repeat, when you’re waiting for your approval, you’re permitted under the law to act as though you’ve gotten your approval. You can raise and spend money, which they did.)
On the second point, I suppose one might be concerned that Harry Reid would go to the Senate floor and denounce you for undermining our democracy with your donations, even if those donations are perfectly legal. But in order for that to happen, you’re really going to have to get into the first rank of donors. A couple hundred thousand dollars isn’t going to do it; in order to be “demonized,” your contributions are going to have to reach at least eight figures.
Nevertheless, I’m sure it’s unpleasant for the Kochs to get criticized by politicians. But being criticized—even vigorously, and even sometimes unfairly—is the price you pay for certain choices you make. If you decide to do anything that puts your efforts in front of the public—running for office, becoming an actor, or being a writer, among other things—people who don’t like that work are going to tell you so. They may even say rude things, like “You’re an idiot” or “You suck,” or whatever other insults their limited creativity can produce. People track me down to tell me things like that all the time. It certainly isn’t fun to hear, but since I’ve chosen a profession where my work is public, it’s just part of the deal.
Spending large amounts of money on politics is both a right and a privilege. Some rights, like the right to practice your religion, are available to everyone. The right to spend significant political money is technically available to everyone, but in practice is only open to those who have large amounts of money to spend. In the same way, Lebron James and I are both free to dunk basketballs, but because the cruel genetic lottery left me a couple of ticks under six feet, I can’t actually exercise that freedom.
Obviously, the IRS shouldn’t audit anyone because of their political beliefs, and fortunately, we have no reason to think it does. Part of me suspects that a lot of conservative donors are using the fear of “demonization” and audits as an excuse to brush off requests for contributions, since once you become a big donor, you’re going to get besieged by candidates and organizations asking you for money. But if super-rich conservatives are sincerely afraid of the fallout from giving, they have two choices: they can make contributions that don’t put them quite on par with the Kochs, and thereby be ignored, or they can just decide to suffer the slings and arrows bravely in the cause of liberty. It’s up to them.
By: Paul Waldman, Contributing Editor, The American Prospect, July 16, 2014
“Who Wants A Depression?”: The Rich Believe That What’s Good For Them Is Good For America
One unhappy lesson we’ve learned in recent years is that economics is a far more political subject than we liked to imagine. Well, duh, you may say. But, before the financial crisis, many economists — even, to some extent, yours truly — believed that there was a fairly broad professional consensus on some important issues.
This was especially true of monetary policy. It’s not that many years since the administration of George W. Bush declared that one lesson from the 2001 recession and the recovery that followed was that “aggressive monetary policy can make a recession shorter and milder.” Surely, then, we’d have a bipartisan consensus in favor of even more aggressive monetary policy to fight the far worse slump of 2007 to 2009. Right?
Well, no. I’ve written a number of times about the phenomenon of “sadomonetarism,” the constant demand that the Federal Reserve and other central banks stop trying to boost employment and raise interest rates instead, regardless of circumstances. I’ve suggested that the persistence of this phenomenon has a lot to do with ideology, which, in turn, has a lot to do with class interests. And I still think that’s true.
But I now think that class interests also operate through a cruder, more direct channel. Quite simply, easy-money policies, while they may help the economy as a whole, are directly detrimental to people who get a lot of their income from bonds and other interest-paying assets — and this mainly means the very wealthy, in particular the top 0.01 percent.
The story so far: For more than five years, the Fed has faced harsh criticism from a coalition of economists, pundits, politicians and financial-industry moguls warning that it is “debasing the dollar” and setting the stage for runaway inflation. You might have thought that the continuing failure of the predicted inflation to materialize would cause at least a few second thoughts, but you’d be wrong. Some of the critics have come up with new rationales for unchanging policy demands — it’s about inflation! no, it’s about financial stability! — but most have simply continued to repeat the same warnings.
Who are these always-wrong, never-in-doubt critics? With no exceptions I can think of, they come from the right side of the political spectrum. But why should right-wing sentiments go hand in hand with inflation paranoia? One answer is that using monetary policy to fight slumps is a form of government activism. And conservatives don’t want to legitimize the notion that government action can ever have positive effects, because once you start down that path you might end up endorsing things like government-guaranteed health insurance.
But there’s also a much more direct reason for those defending the interests of the wealthy to complain about easy money: The wealthy derive an important part of their income from interest on bonds, and low-rate policies have greatly reduced this income.
Complaints about low interest rates are usually framed in terms of the harm being done to retired Americans living on the interest from their CDs. But the interest receipts of older Americans go mainly to a small and relatively affluent minority. In 2012, the average older American with interest income received more than $3,000, but half the group received $255 or less. The really big losers from low interest rates are the truly wealthy — not even the 1 percent, but the 0.1 percent or even the 0.01 percent. Back in 2007, before the slump, the average member of the 0.01 percent received $3 million (in 2012 dollars) in interest. By 2011, that had fallen to $1.3 million — a loss equivalent to almost 9 percent of the group’s 2007 income.
That’s a lot, and it surely explains a lot of the hysteria over Fed policy. The rich are even more likely than most people to believe that what’s good for them is good for America — and their wealth and the influence it buys ensure that there are always plenty of supposed experts eager to find justifications for this attitude. Hence sadomonetarism.
Which brings me back to the politicization of economics.
Before the financial crisis, many central bankers and economists were, it’s now clear, living in a fantasy world, imagining themselves to be technocrats insulated from the political fray. After all, their job was to steer the economy between the shoals of inflation and depression, and who could object to that?
It turns out, however, that using monetary policy to fight depression, while in the interest of the vast majority of Americans, isn’t in the interest of a small, wealthy minority. And, as a result, monetary policy is as bound up in class and ideological conflict as tax policy.
The truth is that in a society as unequal and polarized as ours has become, almost everything is political. Get used to it.
By: Paul Krugman, Op-Ed Columnist, The New York Times, July 10, 2014
“Ryan The Wonk Losing His Street Cred”: He’s Clearly Overdrawn At The Intellectual Credit Bank
In all the recent attention being paid to “Reform Conservatives” (some galvanized by Sam Tanenhaus’ lengthy profile in this weekend’s New York Times Magazine), a glaring absence has been noted in the sparse ranks of the reform movement’s political sponsors. Yes, one-time Super Wonk Paul Ryan, who until recently epitomized Big Brains in the GOP, is nowhere to be seen, and may actually be diverging from the reformers on key tax and budget issues.
Jonathan Chait argues that the cool pragmatism of the Reform Conservatives is at odds with the “apocalyptic” attitude towards Obama and liberalism that Ryan shares with the Tea Folk. But TNR’s Brian Beutler is more precise in noting that the reformicons’ antipathy to the tax agenda of the business community and support for “family-friendly” tax policies is at odds with where Ryan is likely to go as the next chairman of the House Ways & Means Committee:
In his most recent budget, Ryan emphasized his support for a tax reform package that would, among other things, reduce the current seven tax brackets to two, at 25 and 10 percent rates. The dual-bracket structure has long been the dream goal of conservative, supply-side tax reform. It would not just simplify the code, a goal even liberals share. It would also reduce rates on the wealthy. But such a plan could not be revenue-neutral without sharply increasing middle class taxes. It’s a mathematical certainty.
And such a plan is definitely at odds with the reformicons’ stated concern that the conservative movement’s fiscal policies are in danger of fatally alienating middle-class voters, and even the GOP’s critical white working class constituency.
It’s worth remembering, of course, that Ryan’s hardly the only ambitious GOP pol who’s likely to prefer praise from the Wall Street Journal‘s editorial board than from the reformicon ranks. So it’s hardly a good betting proposition that the reformers’ fiscal priorities will find champions among the 2016 GOP presidential field, even if Marco Rubio regains his pre-immigration-reform standing.
But for the moment, it’s refreshing to see that Ryan looks more and more like a standard GOP business hack with an unhealthy addiction to Ayn Rand novels, and less and less like the Brains of the GOP. He’s certainly overdrawn at the intellectual credit bank.
By: Ed Kilgore, Contributing Editor, Washington Monthly Political Animal, July 8, 2014
“Not Off To A Good Start”: Heritage Tries Its Hand At News, But Forgets The Facts
The Daily Signal, The Heritage Foundation’s online “news” website, debuted Tuesday, offering up vagaries and unverifiable assertions aplenty, but too few empirical facts and little in the way of attribution. Its first video was a publicist’s dream, a puff piece that no serious news organization would air.
What appears in The Daily Signal matters because it is assured a large audience eager for reinforcement of deeply embedded views, but no real evidence that would challenge or even bring into question the factual basis of those views.
Reader comments on the Signal’s first investigative piece – the only solid piece of fact-based journalism it published Tuesday – showed just how eager Signal readers are to read confirmation of their biases into pieces and to ignore inconvenient facts, especially subtly presented truths that run contrary to the Heritage Foundation’s well-established perspectives.
Heritage opened its doors in 1973 and has since worked to ensure business dominance of American politics and government. It likes to describe itself as the true champion of the poor in America. A realistic appraisal of its policies shows that it favors protecting existing wealth against the creative destruction by which the existing economic structure is constantly under siege from new wealth seekers.
Heritage also turns a blind eye to the many stealth forms of welfare for the already rich that I detailed in my books Perfectly Legal, Free Lunch, and The Fine Print.
America needs fact-based, insightful and aggressive journalism — both opinion and fact — from every point on the spectrum. But sadly, much of what we get from what mainstream news organizations mislabel “conservative” is radical rhetoric that far too often has little basis in fact or even reality.
Progressives and liberals in particular should encourage, and read, quality journalism from the right because it will help weed out flabby, half-baked ideas by everyone not in accord with the Koch brothers and Fox News chief Roger Ailes. Without rigorous journalism from the far right, the whole country suffers a paucity of informing debate.
The framers used empiricism and reason to make their case for our Constitution and were critical of naked assertion, vague accusations and failure to test hypothesis with verifiable facts.
The breathtaking distortions and even lies by some of our best-known opinion journalists who self-identify as conservatives drew my scrutiny in National Memo columns this year, which you can read here, here, here and here.
The Signal surely cannot quarrel with my call for fact-based news and opinion, as its website says, “We are committed to news coverage that is accurate, fair and trustworthy. As we surveyed the media landscape, it became clear to us that the need for honest, thorough, responsible reporting has never been more critical. That’s a challenge in today’s fast-moving world. And it’s a challenge we’re willing to accept.”
The website then proclaims:
We are dedicated to developing a news outlet that cuts straight to the heart of key political and policy arguments – not spin reported as news. The Daily Signal is supported by the resources and intellectual firepower of The Heritage Foundation – a dedicated team of experienced journalists to cover the news and more than 100 policy experts who can quickly help put issues in perspective. We believe this combination of news, commentary and policy analysis will establish The Daily Signal as a trusted source on America’s most important issues.
We believe that high-quality, credible news reporting on political and policy issues is of paramount importance to an informed and free society. This is a reflection of that Jeffersonian notion that the greatest defense of liberty is an informed citizenry.
So, let’s take a look first at the Signal’s featured first-day video, an interview with Sharyl Attkisson, a former reporter and anchor for CBS, CNN and PBS. The headline is hyped, describing an interview with the Signal’s own correspondent as “exclusive.”
The headline also promises a report on “Journalism’s Very Dangerous Trend” but presents zero verifiable evidence of anything dangerous or even of any trend.
After Attkisson quit CBS, she told Bill O’Reilly in April that her Benghazi, Obamacare and “Fast and Furious” gun stories did not make the air because senior producers lost interest. O’Reilly, an entertainer possessed of masterfully honed commercial instincts, skillfully conflated that into an implication of foul motives at CBS without a shred of empirical evidence that anyone could verify. Classic O’Reilly.
At The Daily Signal, producer Kelsey Harkness tossed Attkisson softballs, even puffballs. As edited, the video shows zero effort to get beyond rhetoric to empirical evidence — names, dates, specific stories, etc. Naked assertion without verifiable specifics is not reporting, it is propaganda, an irony evidently lost on the Signal’s editors.
Harkness promises two more installments, so perhaps we will see some actual reporting by her in the days ahead. Hopefully she will improve with experience, but if not, she can look forward to a superb career as a flack, as reporters call publicists.
The Daily Signal let Attkisson mix and conflate issues in a way no serious and experienced journalist would let pass. Her vague assertions about CBS newsroom managers, as edited, flowed seamlessly into a different issue — non-journalists who use social media to confuse the public.
Attkisson gave no specifics, nor did Harkness ask for any. Attkisson did express a belief that stories want to “tell themselves” in “natural” ways, whatever that means.
News does not exist in nature. It does not just happen. News is made by reporters who gather facts, check and crosscheck them, seek out a range of perspectives and present what they learn in the time available as narrative, attributing facts to sources. Reported columns, like this one, combine those facts with expert knowledge gained through years of study and practice.
Differences between reporters in the field and editors at their desks are, and always will be, sources of disagreement and even angry words.
Different news organizations also have different takes on what is significant and where the heart of the story lies, as shown by academic studies. Long ago, a front-page series in the Los Angeles Times by the late David Shaw, the pioneering news-as-a-beat reporter, documented how little the front pages of the nation’s major newspapers have in common. That’s competition for you.
Attkisson has done serious work, winning Emmys and once being named a finalist for an Investigative Reporters and Editors award. But as presented by The Daily Signal, she comes across as a disgruntled former employee who does not offer even one telling detail to back up her vague implications of news distortions.
News distortions do sometimes occur. In 1973 I exposed how for years the owner of what was said to be the most profitable TV station in America and five other broadcast outlets issued orders to manipulate the news to advance his commercial interests, which eventually resulted in the forced sale of those stations.
Attkisson’s own words describe what is nothing more than routine disagreements about significance, yet The Daily Signal gullibly presented her story without a single tough question.
Attkisson also indicates she may have been late on some of the stories, coming up not with solid facts, but merely tantalizing leads she wanted to pursue. In TV news, where immediacy is paramount, potential new angles on last week’s news to be offered sometime next month is not a formula for success. But The Daily Signal failed to explore this perfectly legitimate and routine basis for telling Attkisson to move on to more pressing stories.
This puff video comes with the Signal’s first investigative piece, a report by Attkisson about deceiving parents of premature babies into participating in a federally funded medical experiment. It is a troubling tale that I recommend.
But unless you are a careful reader, you could miss that these experiments all took place during the George W. Bush administration.
That brings us back to Heritage’s new outlet feeding an audience what it wants rather than what it needs to know. Deciding what matters among an overwhelming array of choices is the judgment for which journalists get paid.
One of the first to comment on Attkisson’s investigative piece wrote: “Don’t forget that this is the Obama administration. The same people that burn aborted babies to generate electricity.”
Many of the other comments on the piece, and the video, are also mindless screeds against Obama, Democrats and anyone with whose views the posters viscerally disagree. Plenty of liberal and centrist websites post equally mindless comments, a practice that would diminish if people had to sign their real names.
America needs well-informed, thoughtful and fact-respecting conservative journalists. Without serious and fact-based, issue-oriented journalism, we get civic debates that confuse rather than enlighten, we get poorly conceived ideas that sometimes become law. The quality of our civic debate matters so long as we intend to choose our own fate.
Going forward, I hope that new website‘s managers demonstrate that they are in fact in the business of news, a difficult task given that The Daily Signal is an arm of an advocacy organization with a well-established reputation for ignoring important issues, not the least among them how its supporters sup with big spoons at the public trough. They are not off to a good start, but that can change if The Daily Signal is really about what its website asserts.
By; David Cay Johnston, The National Memo, June 4, 2014
“In The Name Of Free Speech”: The Supreme Court Has Given Us A Government Of, By, And For The 1 Percent
In case after case, the five conservative justices on the Supreme Court have held unconstitutional all efforts—state as well as federal—to restrain the corrosive influence of limitless individual and corporate expenditures and contributions in our electoral process. They do this in the name of free speech.
In their view, the First Amendment absolutely guarantees the wealthiest Americans the right to spend as much as they like to manipulate the American political system to their advantage. According to these justices, as long as the wealthiest Americans do not directly bribe politicians to vote in their favor, the Constitution demands the flow of money is beyond regulation and that the rest of us must simply let the chips fall where they may.
This conception of the First Amendment and of the American constitutional system is truly perverse. By defining “corruption” so narrowly, these justices have missed the central point of self-governance—our elected representatives are supposed to be responsive to the will of the majority.
I don’t mean to suggest, of course, that our elected officials are supposed to slavishly obey the will of the majority. Sometimes, the majority is wrong, and it is the responsibility of our elected officials—and our judges—to reject certain policies even if they are supported by the majority.
What our elected representatives are absolutely not supposed to do, however, is to reject the values and preferences of the majority of our citizens in order to curry favor with a small cohort of extremely wealthy individuals who are eager to leverage their wealth to gain control of our government. And this is so even if their money corrupts the system in ways that are more subtle than overt bribes. The vast majority of Americans understand this point clearly. Our five conservative justices do not.
Of course, this would not matter very much if the wealthiest Americans shared the values and preferences of the majority of American citizens. If their values and preferences were aligned with those of most other citizens, then this would not be much of a problem. In fact, though, there is no such alignment. On a broad range of issues, there is in fact a sharp divergence between the views of the wealthiest 1 percent of Americans and the other 99 percent.
Recent surveys reveal, for example, that 78 percent of Americans believe that government should guarantee a minimum wage high enough to keep a worker’s family above the poverty level, but only 40 percent of the wealthiest Americans agree; 87 percent of Americans believe that government should spend whatever is necessary to ensure that our children can attend good public schools, but only 35 percent of the wealthiest Americans agree; 81 percent of Americans believe that a top priority of government should be to protect the jobs of American workers, but only 29 percent of the wealthiest Americans agree; 68 percent of Americans believe that government should take steps to ensure that every American who wants to work has the opportunity to do so, but only 19 percent of very wealthiest Americans agree; 78 percent of Americans believe that our government should ensure that students who cannot afford to go to college can nonetheless manage to do so, but only 28 percent of the wealthiest Americans agree.
Still, none of this would matter if the wealthiest 1 percent of Americans had only 1 percent of the influence in the political process. It is natural, after all, that people disagree about these sorts of issues, it is natural that rich people might hold different views on certain issues than people who are not rich, and it is quite proper for these issues to be worked out through the political process.
What is distressing, however, is that our political system does not work that way. Because of the extraordinary power of money in the electoral process, and thanks to the decisions of our five conservative justices, the very wealthiest Americans have a wildly disproportionate influence on our political process.
According to a recent Russell Sage Foundation study, almost 70 percent of wealthy Americans contribute regularly to political candidates, roughly half are in regular contact with members of Congress, and more than a fifth affirmatively “bundle” their contributions with other wealthy individuals. In the 2012 election cycle, a total of 99 Americans (mostly billionaires) provided 60 percent of all the individual Super PAC money spent by candidates.
Of course, none of this would matter if money did not affect outcomes. But it does. In 2012, 84 percent of the House candidates and 67 percent of the Senate candidates who spent more money than their opponents won their elections. Although money cannot dictate the outcome of elections, it matters, and it matters a lot—which is why candidates spend inordinate amounts of time scrambling to raise it and why the wealthiest Americans spend it so “generously” to elect their favored candidates.
But even this might not matter if our elected representatives disregarded the source of their campaign funds and, once elected, sought to represent the interests of their constituents—rather than the interests of their largest donors. Unfortunately, recent research (PDF) by the political scientists Martin Gilens of Princeton University and Benjamin I. Page of Northwestern University shows that it doesn’t work that way.
To the contrary, what they found is that, although average Americans tend to get the policies they want when those policies correspond with the interests of the wealthiest Americans, when their views diverge from those of the wealthiest Americans, they usually lose and the preferences of the wealthiest Americans carry the day. Most of the time, in other words, the 1 percent gets its way. Indeed, as Gilens and Page observe, when the preferences of the average American conflict with the preferences of the top 1 percent, “the preferences of the average American appear to have only a miniscule, near—zero,… impact upon public policy.”
In rather sobering terms, Gilens and Page conclude that, although Americans “enjoy many features central to democratic governance, such as regular election, freedom of speech and association, and a widespread [opportunity to vote], we believe that if policymaking is dominated by powerful business organizations and a small number of affluent Americans, then America’s claims to being a democratic society are seriously threatened.”
And this, say our five conservative justices, is demanded by “freedom of speech.” This is so, they insist, despite the fact that the First Amendment was designed, first and foremost, to preserve, protect, and support an effective system of democratic governance.
As James Madison wrote in Federalist 52, the whole point of our system of governance is to make our elected officials dependent on the will of “the people”—not on the will of the “top one percent.” What we are witnessing is a severe and unprincipled corruption of the American political system, and it is mortifying that this corruption is being carried out not by self-interested politicians, but by the justices of the Supreme Court—in the name of the First Amendment. Can the irony really be lost on them?
By: Geoffrey R. Stone, The Daily Beast, June 3, 2014
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