Nel's New Day

February 14, 2017

Reich’s Take on Trump; Could States Sue Prez?

Filed under: Donald Trump — trp2011 @ 7:09 PM
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Robert Reich evaluates the newly inaugurated president of the United States on the 25th day of his rule:

Donald Trump sold himself to voters as a successful businessman who knew how to get things done, a no-nonsense manager who’d whip government into shape.

But he’s showing himself to be about the most inept, disorganized, sloppy, incompetent president in recent memory, whose White House is nearly dysfunctional.

He allowed Michael Flynn to hang on until the last minute. In any halfway competent administration Flynn would have been gone the moment it became clear he lied to the vice president about his contacts with Russia.

Sean Spicer is a joke, literally. His vituperative, vindictive press conferences are already rich food for late-night comedy. In a White House that had any idea what it means to be an effective press secretary, Spicer would be out the door.

The Muslim travel ban was totally bungled—unclear, haphazard, badly thought out. Trump complains that “his people didn’t give him good advice,” but the people most directly responsible for it—Stephen Bannon and Stephen Miller—have only gained more power in the White House.

Meanwhile, Trump’s White House has sprung more leaks than any in memory. Aides are leaking news about other aides. They’re leaking examples of Trump’s incompetence and weirdness. They’re leaking the contents of telephone calls to other heads of state in which Trump was unprepared, didn’t know basic facts, and berated foreign leaders.

Chief of Staff Reince Priebus seems to have no idea what’s going on. A White House official complained to The Washington Post, “We have to get Reince to relax into the job and become more competent, because he’s seeing shadows where there are no shadows.” Trump’s buddy Chris Ruddy described Priebus as being “in way over his head.”

Infighting is wild. Rumors are swirling that Kellyanne Conway wants Priebus’ job, that Stephen Miller is eyeing Spicer’s job, that no one trusts anyone else.

The New York Times reports “chaotic and anxious days inside the White House’s National Security Council.” Council staff read Trump’s tweets, and struggle to make policy to fit them. Most are kept in the dark about what Trump tells foreign leaders in his phone calls.

Trump himself is remarkably sloppy with sensitive national security information. For example, on Saturday night he discussed North Korea’s latest missile launch on a mobile phone at his table in the middle of Mar-a-Lago’s private club’s dining area, within earshot of private club members. A guest at the club even posed with the military aide who carries “the football” (the briefcase containing instructions for authorizing a nuclear attack).

The U.S. intelligence community is so convinced that Trump and his administration have been compromised by Russia that they’re no longer giving the White House all of their most sensitive information, lest it end up in Putin’s hands.

A senior National Security Agency official says the National Security Agency is systematically holding back some of the “good stuff” from the White House, fearing Trump and his staff can’t keep secrets. The intelligence community is concerned that even the Situation Room—the room in the West Wing where the president and his top staffers get intelligence briefings—has been compromised by Russia.

The White House mess is Trump’s own fault. He’s supposed to be in charge, but it turns out he’s not a tough manager. He’s not even a good manager. He seems not to have any interest in managing at all.

Instead of whipping government into shape, he’s whipping it into a cauldron of dysfunction and intrigue.

Just like his promises to “drain the Washington swamp” and limit the influence of big money, get Wall Street out of policy making, and turn government back to the people, Trump’s promise of an efficient government is another giant bait-and-switch.

[Note from blogger: Although I oppose getting rid of Dictator Donald Trump (DDT) because Mike Pence is likely a far worse choice for president, it may have to be done. Impeachment, one method, won’t work with this administration because the GOP will keep him as long as he’s useful so that he can sign their bills into law. To sue DDT requires that the person or group has the right to sue—in short, “standing.” A private party must show that it has been injured and is not filing merely a “generalized grievance.”

Jed Shugerman, professor at Fordham University Law School, suggests another method, a Quo Warranto proceeding mandating that business be done legally by corporations within individual states. If states determine that corporations are used for illegal activities, they can bring actions to revoke corporate status in a Quo Warranto proceeding accusing the companies of acting “ultra vires” or beyond its legal authority. The question would be whether DDT’s corporate entries are used for illegal emoluments to DDT.

A public official (state attorney general) would need to sue a private entity (the Trump Organization). New York can do this under New York Business Corporation Law § 1101. If the case is successful, the corporate charter could stop the illegal activity by enjoining the Trump Organization from doing business with foreign governments, requiring DDT to divest from specific assets, or completely dissolving the entire corporation. A proceeding would also require disclosures from DDT, including revealing his tax returns and the extent of his business with foreign governments.

The U.S. Constitution has two emoluments clauses: Article 1, Section 9 deals with payments from foreign governments, for example the state-owned Bank of China renting office space in one of DDT’s buildings; and Article II, Section 1. This clause states that the salary for the president won’t be adjusted during his term and “he shall not receive within that Period any other Emolument from the United States, or any of them.” The issue here is the DOJ’s rental of space in Trump Tower. The proceeding in New York would be decided by New York Attorney General Eric Schneiderman, a Democrat who has already brought a successful case against DDT related to Trump University.

The Quo Warranto proceeding can also be used to challenge any other illegal activity such as DDT violating his lease with the government for his new Washington, D.C. hotel that prohibits federal officials from controlling the hotel. In this case, the city’s attorney general, Karl A. Racine, could bring this proceeding against the Trump Organization. A win for the people would require DDT to divest himself from the hotel or take other steps.

New York would be a good venue because the Trump Organization has officially incorporated there. Other states without the incorporation but where the Trump Organization does business could do this proceeding, but it would be more complex. California, guaranteed to suffer from DDT’s ire, grants the ability to “any county or city” to bring a Quo Warranto action against a corporation acting outside the law.

An internet search shows increasing interest in Quo Warranto.

April 12, 2016

Cruz Worse Than Trump

In a panic about the GOP being represented by Donald Trump, Republican establishment types have moved to the presidential candidate who they hate the most—Ted Cruz. Sen. Lindsey Graham (R-SC) shifted from wanting to poison his colleague to just saying that the Republican party is “screwed up.” Part of the GOP argument is that Trump is too “liberal,” but when they complain about his actual positions, they are almost identical to those espoused by other Republicans—particularly Cruz. The GOP has temporarily picked its most mistrusted and hated senator, “a serial liar who led the 2013 government shutdown and called Majority Leader Mitch McConnell a fraud on the Senate floor.”

Trump’s briefly held position about punishing women for having abortions is part of the GOP agenda. John Kasich said that individual states should decide how to punish the women. (It’s the usual GOP statement when candidates or elected officials try to weasel out of answering a question.) Cruz has a much worse position when he says farther by saying that states should ban abortion even in cases of rape and incest. Rep. Paul Ryan (R-WI), who still denies that  he wants to be president in the same way he denied wanting to be Speaker of the House, “opposes abortion, period,” according to the Milwaukee Journal Sentinel. During a campaign, he said that he was willing to let states criminally prosecute women who have abortions.

Troy Newman, one of Cruz’ top advisers, wants to execute abortion providers, and another adviser, Kevin Swanson, wants to execute Girl Scout leaders for “promoting homosexuality.” Cruz’ “no” votes include the Paycheck Fairness Act, raising the minimum wage, and reauthorizing the Violence against Women Act. He has voted to defund Planned Parenthood. All three of the GOP presidential candidates are saying, “Vote for us, and we’ll take away your rights.”

Both Trump and Cruz are competing to prove how much they hate Muslims. All eight people who Trump and Cruz appointed as advisers have connections to the Center for Security Policy, a hate group serving as the anti-Muslim movement’s premier think tank, and half of them hold ranking positions with CSP, including founder Frank Gaffney who works for Cruz. On his radio show, Gaffney called Jared Taylor’s openly racist American Renaissance website “wonderful.” Other major Cruz advisers are Lt. Gen. Jerry Boykin (Ret.), Executive VP of the anti-LGBT Family Research Council; Claire Lopez, VP for research and analysis at CSP; Andy McCarthy, columnist for National Review and active on the anti-Muslim speaking circuit; and Fred Fleitz, Senior VP for Policy and Programs at CSP.

Trump picked Sen. Jeff Sessions, key politician in the anti-Muslim movement; Walid Phares, anti-Muslim activist and former Lebanese Christian Militia member; and Joseph E. Schmitz, Senior Fellow with CSP. After Trump fired adviser Sam Nunberg for being too racist, Nunberg moved to the Cruz camp.

After Trump promised to “bomb the sh*t” out of ISIS, Cruz promising to carpet bomb the Middle East. Even Fox criticized Cruz’ position, but he was still touting this solution on Easter Sunday, right after talking about salvation. As Jimmy Kimmel pointed out on his late night show, the only difference is that Cruz wants the sand to “glow.”

President Obama reported that he’s “getting questions constantly from foreign leaders about” both Trump’s and Cruz’ “suggestions” including their immigration proposals. Cruz claims that, if elected, he would deport all 11 million undocumented immigrants in the country. He also wants the same wall that Trump does and would triple the number of U.S. Border Patrol agents.

Trump and Cruz also show the same positions in issues of no gun control, repealing the Affordable Care Act, picking Supreme Court nominees, and costing taxes by $9.5 trillion through cutting taxes. Jimmy Kimmel shows the striking similarities his late night show.  Both men want religion in government and oppose international agreements.

In his struggle to rise from the bottom, GOP candidate John Kasich summarized their positions although he didn’t give their names:

“a ban on Muslims from entering the country, surveillance of Muslims in the U.S., dropping out of the NATO alliance, allowing nuclear weapons in Europe, and promising to repeal Obamacare ‘simply through the will of a strong man in the White House.’”

USA Today editorial board likened GOP presidential candidate Cruz’ “dogmatic, confrontational and hyperpartisan” rhetoric and tactics to those of Trump.  An analysis of the similarities between Cruz and Trump are striking with the only differentiation that Cruz varies from “generally” to “far” more conservative than Trump.

There is one major difference between Trump and Cruz: Trump backers are proud of their candidate; and Cruz backers are embarrassed by their candidate. John Nichols described Trump as “a crude xenophobic demagogue who has little respect for civil liberties or civil rights and who says terrible things about Muslims, refugees, and immigrants.” Steven Rosenfeld described Cruz as “a conniving, uncompromising, power-hungry demagogue whose policies would serve the richest Americans.” Cruz is just more tied to special interests, rigid, and connected to sleazy campaign tactics.

Cruz also has a super PAC to do his bidding. He claims that “family” is off-limits, but his super PAC started the “war of the wives” by printing a photo of Trump’s wife, causing Trump to retaliate. The difference is that the super PAC didn’t get permission to use a copyrighted photograph whereas Trump pulled his off of a tweet.

Religion is another area in which Cruz is farther away from reality than Trump. Colorado’s Rep. Gordon Klingenschmitt is on Cruz’ team of leaders in that state, and Cruz has bragged about the man’s endorsement. As a “preacher,” Klingenschmitt has made many videos, including his claim that God made a hurricane because he was thrown out of the U.S. Navy chaplain. His departure didn’t even come from his crazy beliefs; he violated policy by wearing his military uniform at a right-wing political rally. He lost his position on the state House Health, Insurance and Environment Committee after he declared that a viciously violent attack on a pregnant woman removing her fetus was punishment for America’s legalization of abortion. He also tried to exorcize President Obama—although not in person—and tried to cleanse a woman of the” foul spirit of lesbianism.” His objection to gays serving in the military is their “taking breaks on the combat field to change diapers all because their treacherous sin causes them to lose control of their bowels.” Videos of Klingenschmitt’s “preaching” are here.

Much has been said about how Trump is wonderful because he doesn’t follow “political correctness,” which parents call courtesy when they’re teaching the children how to be well-behaved. Trump takes pride in not being civil while Cruz continues with his wax-face smile and speaks courteously. Yet the same vitriol comes from both their mouths—except when Cruz is worse. Asked about a comparison between him and Joe McCarthy, the Wisconsin senator who destroyed tens of thousands of lives through his hearings in the 1950s, Cruz said, that it “may be a sign that perhaps we’re doing something right.”

Robert Reich listed four reasons that Cruz is far worse than Trump: Cruz is more fanatical, more disciplined and strategic, a true believer, and a loner who’s willing to destroy government institutions to get his way.

The only virtue that the GOP can find in Cruz is, in the words of Lindsey Graham, “He’s not Trump.” No, he isn’t. He’s worse.

June 16, 2014

Decline of the U.S.: Brandeis, Warren, Reich

Louis Brandeis’ book, Other People’s Money and How the Bankers Use It, was published 100 years ago, but it has a strong parallel to Elizabeth Warren’s latest book, A Fighting Chance, according to reviewer Jill Lepore. Brandeis contends “that the country was being run by plutocrats and, especially, by investment bankers, who, by combining, consolidating, and aggregating the functions of banks, trusts, and corporations, controlled both the nation’s credit and the majority of its resources—including the railroads—and yet had not the least accountability to the public or any sense that the functions they had adopted were essentially those of a public utility.” He wrote:

“The power and the growth of power of our financial oligarchs comes from wielding the savings and quick capital of others. The fetters which bind the people are forged from the people’s own gold.”

One hundred years ago, the Gilded Age plutocrats used savings in banks to build giant, monopolistic conglomerates controlled by the shareholders instead of the people who had deposited their money into bank accounts. Brandeis’ book originally appeared in Harper’s as essays. Its compilation of facts and figures shows the massive control that banks wielded:

J. P. Morgan and the First National and the National City Bank together held “341 directorships in 112 corporations having aggregate resources or capitalization of $22,245,000,000,” a sum that is “nearly three times the assessed value of all the real estate in the City of New York” and “more than the assessed value of all the property in the twenty-two states, north and south, lying west of the Mississippi River.”

When Brandeis republished Other People’s Money in 1933 at a cost of $.15, the book was designed to influence President Roosevelt’s administration. The result was a number of anti-trust reforms and financial-industry regulations that grew the middle class during the middle decades of the last century.

While Brandeis’ book deals with the banks’ use of savings, Warren’s A Fighting Chance shows how banks today use the massive debt of the middle class to make money and wield control. With the repeal of financial reforms starting in the 1980s and the loss of the wall between commercial and savings banks from investment banks came the fetters on people from excessively-high interest rates on credit cards and mortgages. People were lured into a sense of false security with “teaser” rates before they faced the shock of skyrocketing interest rates.

Warren first published about bankruptcy in a monograph with Teresa A. Sullivan and Jay Lawrence Westbrook, As We Forgive Our Debtors: Bankruptcy and Consumer Credit in America (1989). Studying 2,400 bankruptcy petitions filed in 1981, they discovered that many of them belonged to the middle class. Over half were homeowners, and many were women rearing children. In The Fragile Middle Class: Americans in Debt, published six years later, Warren reported on personal-bankruptcy filings a decade after her first study. She found that between 1979 and 1997, the number of these filings had increased by 400 percent.

Part of Brandeis’ work led to abolishing child labor and establishing maximum-hour and minimum-wage laws. These laws lost the power to help the middle class, starting with insufficient increase in minimum-wage during the late 1900s. Warren’s work concluded that women holding jobs and raising children become more economically vulnerable, not less. “For middle-class families, the most important part of the safety net for generations has been the stay-at-home mother,” Warren and her daughter, Amelia Warren Tyagi, wrote in The Two-Income Trap: Why Middle-Class Mothers and Fathers Are Going Broke (2003). As wages grew stagnant for the middle class in the early 1980s, married women, like Warren’s mother decades earlier, were forced to get a job to help the financial crisis. Once the family grew dependent on the second income, there was no cushion for wages that continued to be stagnant.

stagnant wages

The only answer for struggling families was to spend savings. Once those were gone, they took on huge debts. The final step was filing for bankruptcy. Financial crisis for a two-income family is the loss of one of these jobs. Warren and Tyagi reported, “Having a child is now the single best predictor that a woman will end up in financial collapse.” Between 1981 and 2001, the number of women filing for bankruptcy rose more than six hundred per cent.

During the battle for Massachusetts senator in 2012, Scott Brown tried to paint Warren as an Ivy League elitist. A Fighting Chance shows a far different picture. The divorced Warren was a single mother when she worked to get her college degrees and a registered Republican until the mid-1990s. It was her study of bankruptcy that destroyed her faith in unfettered market systems and “crony capitalism.”

A parallel to Elizabeth Warren’s work is Robert Reich’s research that has been recently promoted in the documentary, Inequality for All based on his book Aftershock: The Next Economy and America’s Future.

Income-Inequality-Graph-from-Robert-Reichs-New-Film

A recurring visual during the film is a suspension bridge superimposed over a graph of wealth concentration of wealth during the 20th century. The two high points are 1928 and 2008 when equality peaked in the United States. Immediately following both these peaks were crashes—the Great Depression and the Great Recession. At both these high points, the top 1 percent took home over 23 percent of the national income. Currently, 400 people in the United States have more wealth than the bottom half of people in the U.S. That’s 400 people with over $2 trillion who have the same wealth as over 150 million people in the United States.

share in income 1

The Golden Age from 1945 to about 1975 disappeared with the anti-union legislation and rapid increase in college tuition. Taxes were also high during this period of time, as much as a 70-percent marginal rate, but they shrank rapidly starting with 1980. At the same time, taxes on the middle class such as sales taxes and payroll taxes (including Social Security) rose.

During the time shown by the suspension bridge, other trends parallel the suspension bridge concept in reverse. Wages grew during the middle of the 20th century as did union memberships. By the 1980s, wages stayed stagnant and union membership shrank.

In his work, Reich goes farther than Warren to show how the rigged system destroys not only the people but the corporations. When workers lose an adequate share of the nation’s income, they can’t buy anything. Lower consumption equals lower corporate earnings. In a vicious cycle, resulting layoffs causes even lower corporate earnings and more layoffs. In short, it is the majority of people who are the job creators, not the wealthy.

share in total income

A common perception among conservatives is that people are poor because they won’t work. As more and more people struggle, that perception is gradually changing. The following chart shows that during the past two decades, more and more people understand that people who work hard cannot climb out of poverty. By 2012, less than one-fourth of the people blame “not working” instead of “not earning enough.”

chart poor people in us

Reading A Fighting Chance and watching Inequality for All (http://inequalityforall.com/) provide a great background for the problems we face and the ways that we can move forward.

March 11, 2014

Wise Words from Robert Reich

Filed under: Uncategorized — trp2011 @ 9:25 PM
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Robert Reich, Goldman School of Public Policy, UC BerkeleyThanks to Reader Supported News for publishing this essay from author, political commentator, and economist who served for Presidents Gerald Ford, Jimmy Carter, Bill Clinton.

 

Do you recall a time in America when the income of a single school teacher or baker or salesman or mechanic was enough to buy a home, have two cars, and raise a family?

I remember. My father (who just celebrated his 100th birthday) earned enough for the rest of us to live comfortably. We weren’t rich but never felt poor, and our standard of living rose steadily through the 1950s and 1960s.

That used to be the norm. For three decades after World War II, America created the largest middle class the world had ever seen. During those years the earnings of the typical American worker doubled, just as the size of the American economy doubled. (Over the last thirty years, by contrast, the size of the economy doubled again but the earnings of the typical American went nowhere.)

In that earlier period, more than a third of all workers belonged to a trade union – giving average workers the bargaining power necessary to get a large and growing share of the large and growing economic pie. (Now, fewer than 7 percent of private-sector workers are unionized.)

Then, CEO pay then averaged about 20 times the pay of their typical worker (now it’s over 200 times).

In those years, the richest 1 percent took home 9 to 10 percent of total income (today the top 1 percent gets more than 20 percent).

Then, the tax rate on highest-income Americans never fell below 70 percent; under Dwight Eisenhower, a Republican, it was 91 percent. (Today the top tax rate is 39.6 percent.)

In those decades, tax revenues from the wealthy and the growing middle class were used to build the largest infrastructure project in our history, the Interstate Highway system. And to build the world’s largest and best system of free public education, and dramatically expand public higher education. (Since then, our infrastructure has been collapsing from deferred maintenance, our public schools have deteriorated, and higher education has become unaffordable to many.)

We didn’t stop there. We enacted the Civil Rights Act and Voting Rights Act to extend prosperity and participation to African-Americans; Medicare and Medicaid to provide health care to the poor and reduce poverty among America’s seniors; and the Environmental Protection Act to help save our planet.

And we made sure banking was boring.

It was a virtuous cycle. As the economy grew, we prospered together. And that broad-based prosperity enabled us to invest in our future, creating more and better jobs and a higher standard of living.

Then came the great U-turn, and for the last thirty years we’ve been heading in the opposite direction.

Why?

Some blame globalization and the loss of America’s manufacturing core. Others point to new technologies that replaced routine jobs with automated machinery, software, and robotics.

But if these were the culprits, they only raise a deeper question: Why didn’t we share the gains from globalization and technological advances more broadly? Why didn’t we invest them in superb schools, higher skills, a world-class infrastructure?

Others blame Ronald Reagan’s worship of the so-called “free market,” supply-side economics, and deregulation. But if these were responsible, why did we cling to these ideas for so long? Why are so many people still clinging to them?

Some others believe Americans became greedier and more selfish. But if that’s the explanation, why did our national character change so dramatically?

Perhaps the real problem is we forgot what we once achieved together. The collective erasure of the memory of that prior system of broad-based prosperity is due partly to the failure of my generation to retain and pass on the values on which that system was based. It can also be understood as the greatest propaganda victory radical conservatism ever won.

We must restore our recollection. In seeking to repair what is broken, we don’t have to emulate another nation. We have only to emulate what we once had.

That we once achieved broad-based prosperity means we can achieve it again – not exactly the same way, of course, but in a new way fit for the twenty-first century and for future generations of Americans.

America’s great U-turn can be reversed. It is worth the fight.

 

December 25, 2012

Fixing the Economy

The social decline facing the United States made possible by the loss of revenue during the two terms of George W. Bush has steadily moved the country lower and lower among the countries of the world. Both political parties want the American dream for everyone, giving all people the opportunity to escape poverty. According to James Gustave Speth in his new book, American the Possible: Manifesto for a New Economy (Yale University Press, 2012), a fair and equitable society in the U.S. is possible.

Speth uses the definition of “the American dream” from James Truslow Adams  in his 1933 book The Epic of America: “It is not a dream of motor cars and high wages merely, but a dream of a social order in which each man and each woman shall be able to attain to the fullest stature of which they are innately capable, and be recognized by others for what they are, regardless of the fortuitous circumstances of birth or position.”

Equality is vital for economic growth, according to the Center for American Progress. As Robert Reich explains in his 2010 book Aftershock: “Unless America’s middle class receives a fair share, it cannot consume nearly what the nation is capable of producing. . . . The inevitable result is slower economic growth and an economy increasingly susceptible to great booms and terrible busts.

Because today’s high productivity and economic growth stem largely from scientific and technological knowledge, most of which is inherited from the past, the greater portion of income and wealth “comes to us through no effort of our own,” as Gar Alperovitz and Lew Daly point out in their book Unjust Desserts.  Herbert Simon observed, “[If] we are very generous with ourselves, I suppose we might claim we ‘earned’ as much as one fifth of [our income].” The major question comes from how to share the wealth that no one living today has created.

In the 20th century, both political parties were concerned with eradicating poverty, creating universal health care, providing high-quality and affordable education for all, guaranteeing meaningful and living-wage employment opportunities, and devising a just and fair tax system. Yet conservatives increasingly increased opportunities for the wealthiest in the nation while eliminating the possibility for the bottom 99 percent through the destruction of unions, lessening of minimum wages, and allowing the costs of health care and education to astronomically increase.

Harvard’s Howard Gardner argues that “no single person should be allowed annually to take home more than 100 times as much money as the average worker in a society earns in a year. If the average worker makes $40,000, the top compensated individual may keep $4 million a year. Any income in excess of that amount must be contributed to a charity or returned to the government, either as a general gift, or targeted to a specific line item (ranging from the Department of Veterans Affairs to the National Endowment for the Arts).” He further proposed that no individual would be permitted to pass more than $200 million to his or her heirs, and that any excess must be contributed to charity. “To those who would scream ‘foul’ to such limits on personal wealth,” he concludes, “I would remind them that just 50 years ago, this proposal would have seemed reasonable, even generous.”

Another good idea is a reverse income tax, as recommended in Aftershock. Using the negative income tax idea examined in the 1960s and today’s earned income tax credit, he urges that “full-time workers earning $20,000 or less (this and all subsequent outlays are in 2009 dollars) would receive a wage supplement of $15,000. This supplement would decline incrementally up the income scale, to $10,000 for full-time workers earning $30,000; to $5,000 for full-time workers earning $40,000; and then to zero for full-time workers earning $50,000. The tax rate for full-time workers with incomes between $50,000 and $90,000–whether the source of those incomes is wages, salaries, or capital gains–would be cut to 10 percent of earnings. The taxes for people with incomes of between $90,000 and $160,000 would be 20 percent, whatever the income source.”

Reich also promotes higher taxes for the wealthy. He said, “I propose that people in the top 1 percent, with incomes of more than $410,000, pay a marginal tax of 55 percent; those in the top 2 percent, earning over $260,000, pay a marginal tax of 50 percent; and those earning over $160,000, roughly the top 5 percent, pay 40 percent. These taxes, when added to the modest amounts contributed by taxpayers who earn between $50,000 and $160,000 under my plan, would raise $600 billion more than our current tax system per year.”

Another major step forward should be to implement the important proposal put forward by Bruce Ackerman and Anne Alstott in The Stakeholder Society: “As a citizen of the United States, each American is entitled to a stake in his country: a one-time grant of eighty thousand dollars as he reaches early adulthood. This stake will be financed by an annual 2 percent tax levied on all the nation’s wealth. The tie between wealth-holding and stakeholding expresses a fundamental social responsibility. Every American has an obligation to contribute to a fair starting point for all. Stakeholders are free [to] use their money for any purpose they choose: to start a business or pay for more education, to buy a house or raise a family or save for the future. But they must take responsibility for their choices. Their triumphs and blunders are their own.”

The federal government should spend more on social and jobs programs, environmental protection, and neglected needs abroad while our annual federal budgetary deficits should be brought down to sustainable levels. High growth rates will not provide sufficient revenue to the government. There are many ways to raise new revenues–closing down tax breaks for the rich, shifting taxes from things we want to encourage to things we want to discourage, taxing luxury items, closing corporate tax loopholes, strengthening the estate tax, and moving toward a more progressive tax structure.

A 2009 report by John Cavanagh and his colleagues at the Institute for Policy Studies proposed the following plan that would raise an additional $3 trillion in federal revenues over a five-year period without slowing the economy. That’s over double what President Obama currently proposes.

1. Repeal tax breaks for households with annual incomes over $250,000: $43 billion per year.

2. Tax financial transactions: $100 billion per year.

3. Eliminate the tax preference for capital gains and dividends: $80 billion per year.

4. Levy a progressive estate tax on large fortunes: $40–60 billion per year.

5. Establish a new higher tax rate on extremely high incomes: $60–70 billion.

6. End overseas tax havens: $100 billion per year.

7. Eliminate subsidies for excessive executive compensation: $18 billion per year.

Making sure that the bottom 99 percent of the population has a living wage makes the economy grow. They are the ones who spend the money that they get, not the top 1 percent.

 

July 19, 2012

Romney’s Problems Grow

Mitt Romney’s campaign has two serious dilemmas: the call for his releasing tax returns and the outsourcing done by Bain Capital, Romney’s personal business. To solve the first one, he sent his wife, Ann, to convince the media that he is a truly good person. In an interview with Robin Roberts on ABC, Ms. Romney said:

“You know, you should really look at where Mitt has led his life, and where he’s been financially. He’s a very generous person. We give 10 percent of our income to our church every year. Do you think that is the kind of person that is trying to hide things, or do things? No. He is so good about it.”

When asked why they don’t release the tax forms if there is no problem with them, Ms. Romney continued:

“Because there are so many things that will be open again for more attack… and that’s really, that’s just the answer. And we’ve given all you people need to know and understand about our financial situation and about how we live our life. And so, the election, again, will not be decided on that. It will be decided on who is gonna turn the economy around and how are jobs gonna come back to America.”

My favorite phrase from her interview is “you people,” the term that smacks of an arrogance in the same way that Michelle Malkin’s comment on Fox and Friends Weekend did when she said,

“Romney types, of course, are the ones who sign the front of the paycheck, and the Obama types are the one who have spent their entire lives signing the back of them.”

Lots of people are betting that Romney’s tax returns would show some shady deals. The first question is how he got between $21 million and $101 million in an IRA that can’t collect more than $30,000 a year. Another questionable activity comes from when he was chairman of Marriott’s audit committee. At that time, a Marriott tax shelter, known as “Son of BOSS,” involved creating paper losses to offset taxes on real income. The Internal Revenue Service challenged the shelter, and Marriott lost in court. Judges called the shelter “fictitious” and a “scheme,” and the company was forced to pay $29 million.

The Republicans who are telling Romney to release the tax returns have found a solution for his second problem, outsourcing. Jonah Goldberg summarized their position: “Outsourcing isn’t evil. Building businesses overseas doesn’t necessarily cost American a thing, and it often creates wealth and value both here and abroad.”

The 170 workers losing their jobs in Freeport (IL) because Bain owns their jobs disagree with Goldberg. In 2006 Bain bought Sensata Technologies, based in Attleboro (MA), and plans to move production to China during the month of this year’s election despite the fact that the business has never lost money. The city council has drafted a resolution that “calls on Mitt Romney to come to Freeport to meet the people directly affected by Bain Capital’s outsourcing and to step in and stop the outsourcing of these jobs from Freeport to China.” Although Romney does not operate Bain, he does have a controlling financial interest.

Robert Reich wrote that the biggest problem with corporations is that they have no concern for the people of the United States. He quoted an Apple executive who told the New York Times, “we don’t have an obligation to solve America’s problems. Our only obligation is making the best product possible.” Reich might have added “and showing profits big enough to continually increase our share price.” Apple’s employment of 43,000 people in the United States is dwarfed by their contracts with over 700,000 workers overseas. U.S. workers get six percent of what people pay for an iPhone.

The Republicans who would solve the problem of outsourcing by  lowering salaries in this country and perhaps getting rid of the minimum wage overlook the fact that Chinese workers live in company dormitories where they can be called up to work any time day and night. Apple assembles iPhones in China both because wages are low there and because Apple’s Chinese contractors can quickly mobilize workers from company dorms at almost any hour of the day or night.

Reich also cited another reason for outsourcing as this country not educating young people to do the necessary high tech jobs farmed out to Japan and Germany, in large part because the government does not pay for education. While this country forces young people to ratchet up high student loans, China invests in world-class universities and research centers.

The United States also has substandard transportation and communication systems compared to other countries. Outmoded ports, congested roads, and faulty bridges damage the opportunities for people to have jobs in this nation.

Without support from corporations, this situation will only exacerbate. Without government requiring corporate support, these companies will continue to outsource. All they want are lower taxes and fewer regulations. To get what they want, they buy elections.

Goldberg needs to know the following results of outsourcing:

U.S. multinationals cut their U.S. workforces by 2.9 million in the 2000s while increasing employment overseas by 2.4 million, according to the U.S. Department of Commerce. The Bush tax cuts may have caused the 35 biggest U.S.-based companies to add jobs, but almost three-fourths of these jobs were offshore.

U.S. manufacturing has suffered the biggest blow from offshoring. Working America reported that manufacturing jobs dropped every month for 43 months—the longest stretch since the Great Depression—between August 2000 and February 2004. Between 1998 and 2008, the time that George W. Bush gave corporations big tax cuts to create jobs, the number of manufacturing plants shrank 12.5 percent. The country lost 51,000 plants during those ten years, plants that gave stable, middle-class jobs.

Revenue from the global electronics contract manufacturing industry reached $360 billion in 2011 and is expected to expand to $426 billion by 2015. These companies contract outside firms primarily in third-world countries. Other huge companies, Nike for example, subcontracts all its shoe production to foreign companies.

Private equity firms have upped the competition between corporations by creating the fear that if CEOs don’t run their businesses to maximize short-term profits and share prices that they will be taken over by a company like Bain Capital. Their answer is outsourcing. If they lose the company to a company like Bain, “the standard strategy has been to load up company executives with so much stock and stock options that they don’t hesitate to make difficult decisions such as shedding divisions, closing plants or outsourcing work overseas,” according to Steve Pearlstein, a professor of public and international affairs at George Mason University and a Pulitzer-prize winning columnist.

Three-fourths of the companies surveyed by Duke’s Fuqua School of Business gave labor costs as their reason to relocate offshore, but this is becoming a weaker excuse for taking jobs away from the United States.  The labor cost gap between the U.S. and China has shrunk by almost 50 percent within the last eight years; this gap is project to be just 16 percent by next year. Fuel prices are also rising, increasing the costs of transportation.

The same survey showed that “only 4 percent of large companies had future plans for relocating jobs back to the United States.” No reason was given, but Seth Hanlon thinks that their reluctance is the U.S. tax code that “rewards companies for making investments abroad—and leads to them shifting offices, factories, and jobs abroad even if similar investments in the United States would be more profitable absent tax considerations.”

Tax loopholes and porous rules allow multinational companies to avoid U.S. taxes by reporting much of their profits in tax havens such as Bermuda and the Cayman Islands. That may be why Romney is fond of these tax havens. Shifting profits into tax havens costs the U.S. Treasury tens of billions of dollars in revenue every year. While President Obama wants a law that benefits companies for keeping jobs in the United States, Romney wants to make U.S. corporations’ overseas profits exempt from U.S. taxes, understandable because this would financially benefit him.

Today, the Senate tried to vote on the Bring Jobs Home Act to end taxes that reward companies that ship jobs overseas and instead provide a tax cut for American businesses that move overseas jobs and business activity back to America. A filibuster killed the bill was killed with a 56-42 vote; it’s the standard Republican position that 60 out of 100 votes are required to pass any Senate bill. The three brave Republican senators voting against the filibuster were Susan Collins (ME), Olympia Snowe (ME), and Scott Brown (MA). Therefore the Senate Republican “majority” of 41 men and 3 women have determined that taxpayers must continue to pay for the offshoring of jobs.

According to The Hill, Republicans wouldn’t vote for a bill to bring jobs back to the United States because they wanted to include an amendment repealing the Affordable Care Act. Senate Majority Leader Harry Reid, (D-NV) said, “It’s no surprise Republicans are on the side of corporations making big bucks sending American jobs to China and India. After all, their presidential nominee, Mitt Romney, made a fortune outsourcing jobs, too.”

December 31, 2011

2011–Not All Bad

Although the year 2011 began on a dark note—and got blacker—as the conservatives fought to wipe out a century of progressive movements that gave people in the United States a safety net, I find many things to be grateful on the last day of the year.

First, I am most thankful for my wonderful family (who is visiting me as I write), my fantastic partner of 42+ years, and my fabulous friends, many of whom send me topics and information for Nel’s New Day. And a thumbs-up to my pets, especially the new kitten who is turning everything upside down in our household.

After almost nine years, the Iraq War, that killed at least 120,000 people and left far more wounded, has come to an end. At a conservative estimate of $806 billion, the war left over 1.6 million refugees and another 1.24 million internally displaced with the country’s infrastructure almost disseminated.  The war that conservatives started planning almost two decades ago has taught some people in our nation a lesson about being wary of government “intelligence” and avoiding pre-emptive wars.

The political scene may be looking up for progressives. The Occupy people  are willing to suffer extremely discomfort not only in the wet, snowy cold or while being indiscriminately pepper-sprayed or tasered but also jailed for following their First Amendment rights. Their slogan, “We are the 99 percent,” has made the country acutely aware of economic inequities despite the naysayers who live in their comfortable homes and ignore hungry and homeless people.

The Occupy Movement wasn’t the first big protest of the year, however. Wisconsin fought their new governor Scott Walker, Ohio won against union-busting politicians, Maine voted down unfair election changes, and Time made “the protester” its person of the year. Conservatives have gone so far to the right in denying people their rights that the rest of the United States—like the “Arab spring”—may have reached the tipping point to fight back.

Change.org and the Internet have helped to right some wrongs perpetrated by large corporations. The most recent win is Verizon’s reversal in its attempt to charge customers a fee for paying bills online. Bank of America decided not to charge a monthly fee just for using a debit card. These are the companies that net billions of dollars while paying no taxes and having the right—as “persons”—to pay unlimited funds to elect more conservatives who will take more money from the poor to give to the wealthy.

Yet not all corporations are greedy blood-suckers. In Alternet, Lauren Kelley highlighted five companies that support the environment and economy: Ben & Jerry, Patagonia, H&M, Hewlett Packard, and Method Products. May more companies join them in the coming year!

Through their humor, Jon Stewart and Stephen Colbert continue to enlighten millions of Americans, particularly young ones who might have been lost to Fox lies. Republican presidential candidates have provided these two comedians much fodder although these politicians look ridiculous on their own.

After the disappointing show of progressives in last August’s debacle of raising the debt ceiling, Democrats seem to have found a spine. Led by President Obama, Congressional Democrats refused to roll over (mostly!) this month to the Republicans’ demands regarding the payroll tax reduction. Democrats wanted to keep the tax, aka Social Security taxes, the same; Republicans wanted to increase it. The 99 percenters discovered that Republicans want to lower taxes only for the wealthy, a good lesson for them.

A new political figure in town, Elizabeth Warren, may turn things around. After Republicans refused to consider her nomination as director of the U.S. Consumer Financial Protection Bureau, an agency that she created, she decided to run for Massachusetts senator. Despite the huge funding that corporations are pouring into incumbent Republican Sen. Scott Brown’s re-election and his recent turn toward a more moderate position,Warren is leading! And she knows where all the bodies are buried!

Courts are also taking a constitutional (what conservatives call “activist” if it opposes their far right positions) approach to new laws for immigration, elections, etc. For example, after Republican Arizona Gov. Jan Brewer fired the chair of the state’s nonpartisan commission to determine redistricting for the House of Representatives because it didn’t favor Republicans 100 percent, the state supreme court overturned her decision. Courts in Texas overturned the legislature’s partisan redistricting decision, and the Department of Justice overruled the highly restrictive South Carolina photo ID mandates.

American minorities made advances when the repeal of Don’t Ask Don’t Tell ban on gays and lesbians openly serving in the military was finalized. New York legalized same-sex marriage, and California’s Proposition 8, banning same-sex marriage, stayed unconstitutional for the time-being. Representatives and senators are working to advance the Respect for Marriage Act to repeal the “Defense of Marriage Act,” that keeps marriage to one man with one woman even if it only lasts for 72 hours.

More people in theUnited States are getting health care, thanks to the Affordable Care Act, and the economy is supposedly improving. Approval rating for the Tea Party has shrunk, and  “Progressive” is the most positively viewed political label inAmerica, ahead of “Conservative.” And all these positive facts are just the tip of the iceberg.

In the words of former U.S. Secretary of Labor Robert Reich:

“Yet the great arc of American history reveals an unmistakable pattern: Whenever privilege and power conspire to pull us backward, the nation eventually rallies and moves forward. Sometimes it takes an economic shock like the bursting of a giant speculative bubble; sometimes we just reach a tipping point where the frustrations of average Americans turn into action.

“Look at the progressive reforms between 1900 and 1916; the New Deal of the 1930s; the Civil Rights struggle of the 1950s and 1960s; the widening opportunities for women, minorities, people with disabilities and gays; and the environmental reforms of the 1970s. In each of these eras, regressive forces reignited the progressive ideals on whichAmericais built. The result was fundamental reform.

“Perhaps this is what’s beginning to happen again across America.”

We’ll all hope so! Happy New Year!

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