Original Link: http://www.perrspectives.com/blog/archives/001697.htm
For a handful of the very richest Americans, 2010 will be an excellent year to die. Thanks to Republican obstructionism on their behalf, the estate tax, which in 2009 will impact only 1 in 500 estates while generating tens of billion in revenue, will temporarily expire after December 31. Adding insult to injury, while the fortunate heirs of the largest fortunes toast their good fortune in 2010, their less well off counterparts may face higher tax bills even as they grieve.
This latest GOP gluttony is the abominable outcome of the perpetual Republican war on the so-called "death tax." The Bush tax cuts passed in 2001 raised the estate tax threshold from $1 million to $3.5 million ($7 million for a couple), while slashing the rate from 55% to 45%. But facing the "sunset" provision that would eliminate the estate tax for one year in 2010 before returning to the pre-2001 levels the following year, the House voted 225-200 two weeks ago for an extension to maintain the current 45% rate.
But in the Senate, the same Republican born-again deficit virgins are intent on draining the U.S. Treasury in order to protect the 0.2% of Americans at the expense of the other 99.8%.
On December 4th, John Kyl (R-AZ), the number two Senate Republican, boasted there was no way Democrats could pass an estate tax extension before the end of the year, leaving them in for a "rude shock" next year when the levy disappears. Objecting to the extension proposed by Democrat Max Baucus yesterday to avoid the looming chaos and confusion, Kyl insisted:
"It's a problem that doesn't have to exist if they'll just leave the existing law alone and let the rate go to zero, which is where everyone wants it to be."
Restating the same GOP "death tax" fraud which dates back the 1990's and the election of George W. Bush, Senate Minority Leader Mitch McConnell declared:
"It's nothing that outrages the American people more than the thought that they will have to visit both the IRS and the undertaker on the same day."
This Republican scam over the so-called "death tax" is as bogus now as it was when President Bush first perpetrated it eight years ago. The House GOP budget, fittingly unveiled by Rep. Paul Ryan on April Fool's Day, would eliminate the estate tax altogether. While Nevada Senator John Ensign recently griped, "It destroys a lot of small businesses and a lot of family farms and ranches in America," House Minority Leader John Boehner (R-OH) groused:
"People who aren't wealthy, who may have built up value in land over generations and many family farms find themselves in situations where they've got to sell the farm in order the pay the taxes."
But as the Washington Post explained, under the extension proposed President Obama and echoed by Senator Baucus this week, 99.76% of estates would pay no taxes whatsoever:
The estate tax is scheduled to disappear in 2010, only to be resurrected the following year at its 2001 level, when it applied only to estates worth over $2 million per couple at a rate of 55 percent. In fact, no one expects it to return to that level -- although letting it do so would be a far more rational response to the current crisis than the Lincoln-Kyl approach. Rather, President Obama has proposed holding the tax at this year's level: an exemption of $7 million per couple, with a 45 percent rate for amounts beyond that; this would cost $484 billion over 10 years. Senate Finance Committee Chairman Max Baucus (D-Mont.) has endorsed this solution, with indexing for inflation. This would hardly be punitive. At that level, 99.76 percent of estates would incur no tax whatsoever. Those who owe would pay, on average, $2.25 million less than they would have paid at the 2001 exemption level. Why in the world should these folks get more of a tax cut?
Why? Because even in a time of national economic calamity, the Republican Party remains committed to dramatically shifting the tax burden away from the wealthiest Americans. (And unfortunately, Blanche Lincoln (D-AR) and nine other Democrats are aiding and abetting that transfer by supporting a lower tax rate of 35% for estates starting at $10 million per couple. The price tag? $250 billion.)
In April, the Tax Policy Center quantified just how few family farms or small businesses are actually impacted by the estate tax proposals under consideration:
We estimate that under the Obama proposal, 100 family farms and businesses would owe tax. (We define such estates as those where farm or business assets are valued at under $5 million and comprise the majority of estate assets.) The Lincoln-Kyl proposal would cut the number to 40. Even under current law, fewer than 2,700 family farms and businesses would owe tax.
But for the Republican Party, the wants of the few outweigh the needs of the many.
In a final twist of the knife, the GOP's push for the 2010 windfall for the wealthiest Americans could produce confusion and higher tax bills for those inheriting less valuable estates. As the New York Times described the scenario:
There is yet another wrinkle. When they scheduled the demise of the estate tax for 2009, the authors of the 2001 tax measure replaced it with a capital gains tax of 15 percent on inherited property that is later sold.
The threshold for being subject to those taxes is set lower, with the first $1.3 million in capital gains exempted for general heirs and $3 million for spouses. Democrats argue that thousands of estates that would not have been subject to taxes under the current law could get hit in 2010 even as those at the higher end of inheritance scale escape the 45 percent tax bite.
In response, John Kyl crowed, "As between paying 45 percent and 15 percent, I think it is pretty clear what most small business folks and farmers would like to do." And by "most small business folks and farmers," he apparently meant 2,700 of them.
With the GOP having for now apparently succeeded in blocking the estate tax extension, Americans can only watch as the Treasury is emptied further by the richest of the rich in 2010. Meanwhile, for the next 12 months, those gilded few should fear not the federal government, but instead their own sons and daughters.
Sunday, May 30, 2010
Resurrect the estate tax
Original Link: http://www.citizen-times.com/article/20100529/OPINION07/100527021/1007/COLUMNISTS
By Chuck Collins and Sam Pizzigati
Dan Duncan died at the end of March. The Houston gas pipeline mogul left behind a spouse, four children, four grandkids, and a fortune worth $9 billion.
Duncan, a prominent philanthropist who supported cancer research and the Boy Scouts, left behind another distinction. He was the first American billionaire to ever leave his heirs a tax-free fortune.
America's first-ever billionaire, John D. Rockefeller, died in 1937. His heirs faced a 70 percent estate tax on the bulk of his estate. Duncan's heirs are enjoying a zero percent estate tax. When he died, his son and three daughters became instant billionaires.
If Duncan had died last year, his heirs would have had to share their new billions with the rest of America. But for the first time since 1916, no estate tax graces the tax code. That's because it's been suspended for the duration of this year, thanks to a 2001 Bush administration maneuver and an impasse in Congress.
Heirs to billion-dollar fortunes, if they sell the assets they inherit this year, will have to report whatever windfalls they rake in as taxable capital gains. But analysts don't expect this new capital gains rule to raise nearly as much money as the estate tax would have.
How much will the absence of an estate tax this year cost the Treasury? It's impossible to say. No one knows how many other billionaires may pass to the great beyond between now and New Year's Eve. We do know that in 2008, the latest year with figures available, the federal government collected $25.7 billion in estate tax revenue.
That sum, by coincidence, would be enough to fully fund the $23 billion Rep. George Miller (D-CA) and Sen. Tom Harkin (D-IA) want Congress to appropriate to avert the nation's worst teacher layoff crisis since the Great Depression. Without additional federal funding, our schools may lose 300,000 teachers, causing class sizes to balloon across the country.
But getting that help seems to be a long shot. The 2009 stimulus legislation saved tens of thousands of teacher jobs. But stimulus dollars are running out, and deficit hawks in Congress say we can't afford more.
How can a civilized nation afford to hand the heirs of the super-rich billions of dollars tax-free and not afford to keep teachers in classrooms?
We can trace our current budget inanity back to when the Bush White House put on a full-court press to repeal the federal estate tax. The administration lacked the votes needed for a permanent repeal. However, it did manage to pass lower estate tax rates over the rest of the decade and a repeal in 2010. Under that legislation, the estate tax would reappear in 2011.
White House strategists never expected to see this reappearance. They counted on a future Congress to extend the repeal beyond this year. But by 2007, the GOP had become a minority in the House and Bush lost his shot at permanently scrapping the tax.
Meanwhile, estate tax supporters were confident the 2008 election results would make it possible to overturn the 2010 repeal. But in 2009, lawmakers deadlocked over many issues. The year ended without any congressional estate tax action.
Apparently no one in Congress expected a billionaire of Dan Duncan's magnitude to actually go and die without an estate tax on the books.
There's hope that Congress will bring the estate tax back for the remainder of the year, and apply it retroactively. But with so much at stake, lawyers for Duncan's heirs would likely battle that kind of action in the courts. The longer we go without the tax on the books, the higher the chances the courts will agree with them.
After his death, a close friend of Duncan's noted "he really wanted to help everybody." If Duncan's heirs want to help everybody, they'll troop over to Capitol Hill and demand the immediate reinstatement of a meaningful federal estate tax.
By Chuck Collins and Sam Pizzigati
Dan Duncan died at the end of March. The Houston gas pipeline mogul left behind a spouse, four children, four grandkids, and a fortune worth $9 billion.
Duncan, a prominent philanthropist who supported cancer research and the Boy Scouts, left behind another distinction. He was the first American billionaire to ever leave his heirs a tax-free fortune.
America's first-ever billionaire, John D. Rockefeller, died in 1937. His heirs faced a 70 percent estate tax on the bulk of his estate. Duncan's heirs are enjoying a zero percent estate tax. When he died, his son and three daughters became instant billionaires.
If Duncan had died last year, his heirs would have had to share their new billions with the rest of America. But for the first time since 1916, no estate tax graces the tax code. That's because it's been suspended for the duration of this year, thanks to a 2001 Bush administration maneuver and an impasse in Congress.
Heirs to billion-dollar fortunes, if they sell the assets they inherit this year, will have to report whatever windfalls they rake in as taxable capital gains. But analysts don't expect this new capital gains rule to raise nearly as much money as the estate tax would have.
How much will the absence of an estate tax this year cost the Treasury? It's impossible to say. No one knows how many other billionaires may pass to the great beyond between now and New Year's Eve. We do know that in 2008, the latest year with figures available, the federal government collected $25.7 billion in estate tax revenue.
That sum, by coincidence, would be enough to fully fund the $23 billion Rep. George Miller (D-CA) and Sen. Tom Harkin (D-IA) want Congress to appropriate to avert the nation's worst teacher layoff crisis since the Great Depression. Without additional federal funding, our schools may lose 300,000 teachers, causing class sizes to balloon across the country.
But getting that help seems to be a long shot. The 2009 stimulus legislation saved tens of thousands of teacher jobs. But stimulus dollars are running out, and deficit hawks in Congress say we can't afford more.
How can a civilized nation afford to hand the heirs of the super-rich billions of dollars tax-free and not afford to keep teachers in classrooms?
We can trace our current budget inanity back to when the Bush White House put on a full-court press to repeal the federal estate tax. The administration lacked the votes needed for a permanent repeal. However, it did manage to pass lower estate tax rates over the rest of the decade and a repeal in 2010. Under that legislation, the estate tax would reappear in 2011.
White House strategists never expected to see this reappearance. They counted on a future Congress to extend the repeal beyond this year. But by 2007, the GOP had become a minority in the House and Bush lost his shot at permanently scrapping the tax.
Meanwhile, estate tax supporters were confident the 2008 election results would make it possible to overturn the 2010 repeal. But in 2009, lawmakers deadlocked over many issues. The year ended without any congressional estate tax action.
Apparently no one in Congress expected a billionaire of Dan Duncan's magnitude to actually go and die without an estate tax on the books.
There's hope that Congress will bring the estate tax back for the remainder of the year, and apply it retroactively. But with so much at stake, lawyers for Duncan's heirs would likely battle that kind of action in the courts. The longer we go without the tax on the books, the higher the chances the courts will agree with them.
After his death, a close friend of Duncan's noted "he really wanted to help everybody." If Duncan's heirs want to help everybody, they'll troop over to Capitol Hill and demand the immediate reinstatement of a meaningful federal estate tax.
Regulation vs. Structural Change
Original Link: http://baselinescenario.com/2010/05/25/regulation-vs-structural-change/
By James Kwak
Robert Reich discusses a theme that I think I’ve discussed before (and first heard expressed by Ezra Klein):
“The most important thing to know about the 1,500 page financial reform bill passed by the Senate last week — now on he way to being reconciled with the House bill — is that it’s regulatory. It does nothing to change the structure of Wall Street.”
Reich’s post weirdly cuts off in the middle on his site, but Mark Thoma has a longer excerpt. In that excerpt, Reich concludes this way:
“The only way to have a lasting effect on industries as large and intransigent as banking and health care is to alter their structure. That was the approach taken to finance by Franklin D. Roosevelt in the 1930s, and by Lyndon Johnson to health care (Medicare) in the 1960s.
“So why has Obama consistently chosen regulation over restructuring? Because restructuring Wall Street or health care would surely elicit firestorms from these industries. Both are politically powerful, and Obama did not want to take them on directly.”
I would add that Obama is also a political pragmatist with a strong belief that getting something done is better than nothing. I think that on health care he and the administration probably did the best they could. Remember, they barely got a majority in the House, then barely got sixty votes in the Senate, then barely got a majority in the House again (to pass the revised bill), and public opinion was very divided.
But on financial reform I think they could have gotten more done. First of all, public opinion wanted more; and second, the administration lobbied against some of the most far-reaching changes, such as Kaufman-Brown and Blanche Lincoln’s derivatives spinout provision, and Merkley-Levin never got a vote. The whole theater of the administration trying to put the bill into stone before it got much stronger should have been embarrassing to them, but they decided they could take the hit.
I think the explanation for this is some combination of (a) the economic policy guys really think that the financial system we have today is basically fine and just needs a little better oversight and (b) Obama just doesn’t care that much and wants to save his political capital (and his support from the financial sector) for other issues, like (hopefully) jobs and climate change.
Here’s Thoma’s conclusion:
“Structural change is harder than imposing new regulations. The fact that legislators are shying away from the harder to impose types of change out of fear of losing reelection support from the financial industry points to the political power the industry still has, and to the need for structural change to reduce this political (and economic) power. If we cannot muster the political will to make such changes in light of the most devastating financial collapse since the Great Depression, that does not bode well for the future.”
By James Kwak
Robert Reich discusses a theme that I think I’ve discussed before (and first heard expressed by Ezra Klein):
“The most important thing to know about the 1,500 page financial reform bill passed by the Senate last week — now on he way to being reconciled with the House bill — is that it’s regulatory. It does nothing to change the structure of Wall Street.”
Reich’s post weirdly cuts off in the middle on his site, but Mark Thoma has a longer excerpt. In that excerpt, Reich concludes this way:
“The only way to have a lasting effect on industries as large and intransigent as banking and health care is to alter their structure. That was the approach taken to finance by Franklin D. Roosevelt in the 1930s, and by Lyndon Johnson to health care (Medicare) in the 1960s.
“So why has Obama consistently chosen regulation over restructuring? Because restructuring Wall Street or health care would surely elicit firestorms from these industries. Both are politically powerful, and Obama did not want to take them on directly.”
I would add that Obama is also a political pragmatist with a strong belief that getting something done is better than nothing. I think that on health care he and the administration probably did the best they could. Remember, they barely got a majority in the House, then barely got sixty votes in the Senate, then barely got a majority in the House again (to pass the revised bill), and public opinion was very divided.
But on financial reform I think they could have gotten more done. First of all, public opinion wanted more; and second, the administration lobbied against some of the most far-reaching changes, such as Kaufman-Brown and Blanche Lincoln’s derivatives spinout provision, and Merkley-Levin never got a vote. The whole theater of the administration trying to put the bill into stone before it got much stronger should have been embarrassing to them, but they decided they could take the hit.
I think the explanation for this is some combination of (a) the economic policy guys really think that the financial system we have today is basically fine and just needs a little better oversight and (b) Obama just doesn’t care that much and wants to save his political capital (and his support from the financial sector) for other issues, like (hopefully) jobs and climate change.
Here’s Thoma’s conclusion:
“Structural change is harder than imposing new regulations. The fact that legislators are shying away from the harder to impose types of change out of fear of losing reelection support from the financial industry points to the political power the industry still has, and to the need for structural change to reduce this political (and economic) power. If we cannot muster the political will to make such changes in light of the most devastating financial collapse since the Great Depression, that does not bode well for the future.”
Obama’s Regulatory Brain
Original Link: http://robertreich.org/post/628324698/obamas-regulatory-brain
By Robert Reich
The most important thing to know about the 1,500 page financial reform bill passed by the Senate last week — now on the way to being reconciled with the House bill — is that it’s regulatory. It does nothing to change the structure of Wall Street.
The bill omits two critical ideas for changing the structure of Wall Street’s biggest banks so they won’t cause more trouble in the future, and leaves a third idea in limbo. The White House doesn’t support any of them.
First, although the Senate bill seeks to avoid the “too big to fail” problem by pushing failing banks into an “orderly” bankruptcy-type process, this regulatory approach isn’t enough. The Senate roundly rejected an amendment that would have broken up the biggest banks by imposing caps on the deposits they could hold and their capital assets.
You do not have to be an algorithm-wielding Wall Street whizz-kid to understand that the best way to prevent a bank from becoming too big to fail is preventing it from becoming too big in the first place. The size of Wall Street’s five giants already equals a large percentage of America’s gross domestic product.
That makes them too big to fail almost by definition, because if one or two get into trouble – as they did in 2008 – their demise would shake the foundations of the financial system, even if there were an “orderly” way to liquidate them. Because traders and investors know they are too big to fail, these banks have a huge competitive advantage over smaller banks.
Another crucial provision left out of the Senate bill would be to change the structure of banking by resurrecting the Depression-era Glass-Steagall Act and force banks to separate commercial banking (the classic function of connecting lenders to borrowers) from investment banking.
Here, too, the bill takes a regulatory approach instead. It includes a provision barring banks from “proprietary trading,” or making market bets with their own capital. Even if this regulation were tough enough (and the current Senate bill requires various delays and studies before it’s applied), it would not erode the giant banks’ monopoly over derivatives trading, adding to their power and inevitable “too big to fail” status.
Which brings us to the third structural idea, advanced by Senator Blanche Lincoln. She would force the banks to do their derivative trades in entities separate from their commercial banking.
This measure is still in the bill, but is on life-support after Paul Volcker, Tim Geithner, and Fed chair Ben Bernanke came out against it. Republicans hate it. The biggest banks detest it. Virtually every major Wall Street and business lobbyist has its guns trained on it. Almost no one in Washington believes it will survive the upcoming conference committee.
But it’s critical. For years the big banks have relied on taxpayer-funded deposit insurance to backstop their lucrative derivative businesses. Obviously they want the subsidy to continue. Bernanke argues that “depository institutions use derivatives to help mitigate the risks of their normal banking activities.” True, but irrelevant. Lincoln’s measure would allow banks to continue to use derivatives. They just could not rely on their government-insured deposits for the capital.
Requiring banks to do derivative trading in separate entities would force them to raise extra capital. But if such trading is so useful, banks should foot the bill, not taxpayers. Bernanke and others say the measure would give foreign banks a competitive advantage. Even if he is right, since when is it up to taxpayers to guarantee profitability at America’s largest banks relative to foreign ones?
The trading of derivatives is not so crucial to the US economy that taxpayers should subsidise the practice. If the past two years have taught us anything, the lesson is just the opposite. Derivatives can generate huge risks unless carefully regulated.
Wall Street’s lobbyists have fought tooth and nail against these three ideas because all would change the structure of America’s biggest banks. The lobbyists won on the first two, and the Street has signalled its willingness to accept the Dodd bill, without Lincoln’s measure.
The interesting question is why the president, who says he wants to get “tough” on banks, has also turned his back on changing the structure of American banks — opting for a regulatory approach instead.
It’s almost exactly like health care reform. Ideas for changing the structure of the health-care industry — a single payer, Medicare for all, even a so-called “public option” — were all jettisoned by the White House in favor of a complex set of regulations that left the old system of private for-profit health insurers in place. The final health care act doesn’t even remove the exemption of private insurers from the nation’s antitrust laws.
Regulations don’t work if the underlying structure of an industry — be it banking or health care — got us into trouble in the first place. Wall Street’s big banks are just too big, and their ability to draw on commercial deposits for investment banking activities, including derivatives, will make them even bigger. It will also subject the economy to greater and greater risks in the future. No amount of regulation can cure that.
Similarly, the underlying system of private for-profit health insurance is a key driver of America’s bloated and ineffective health care delivery. We can try to regulate it like mad, but no amount of regulation will cure this fundamental problem.
A regulatory rather than structural approach to deep-seated problems in complex industries like banking and health care is also vulnerable to the inevitable erosion that occurs when industry lobbyists insert themselves into the regulatory process. Tiny loopholes get larger. Delays get longer. Legislative words are warped and distorted to mean what industry wants them to mean.
Both Senate and House financial reform bills exempt “customised” derivatives from the exchanges, for example, but leave it to regulators to define what contracts will be excused. Yet many of the derivatives that caused the most trouble (read Goldman Sachs and other banks’ deals with AIG) might well be thought of as customised. Another potential problem: in assigning consumer protection to the Fed, the bill puts it under Fed chiefs who in the past disdisplayed a patent disregard of such safeguards (read Alan Greenspan).
Inevitably, top regulators move into the industry they’re putatively trying to regulate, while top guns in the industry move temporarily into regulatory positions. This revolving door of regulation also serves over time to erode all serious attempt at overseeing an industry.
The only way to have a lasting effect on industries as large and intransigent as banking and health care is to alter their structure. That was the approach taken to finance by Franklin D. Roosevelt in the 1930s, and by Lyndon Johnson to health care (Medicare) in the 1960s.
So why has Obama consistently chosen regulation over restructuring? Because restructuring Wall Street or health care would surely elicit firestorms from these industries. Both are politically powerful, and Obama did not want to take them on directly.
A regulatory approach allows for more bargaining, not only in the legislative process but also, over time, in the rule-making process as legislation is put into effect. It’s always possible to placate an industry with a carefully-chosen loophole or vague legislative language that will allow the industry to continue to go on much as before.
And that’s precisely the problem
By Robert Reich
The most important thing to know about the 1,500 page financial reform bill passed by the Senate last week — now on the way to being reconciled with the House bill — is that it’s regulatory. It does nothing to change the structure of Wall Street.
The bill omits two critical ideas for changing the structure of Wall Street’s biggest banks so they won’t cause more trouble in the future, and leaves a third idea in limbo. The White House doesn’t support any of them.
First, although the Senate bill seeks to avoid the “too big to fail” problem by pushing failing banks into an “orderly” bankruptcy-type process, this regulatory approach isn’t enough. The Senate roundly rejected an amendment that would have broken up the biggest banks by imposing caps on the deposits they could hold and their capital assets.
You do not have to be an algorithm-wielding Wall Street whizz-kid to understand that the best way to prevent a bank from becoming too big to fail is preventing it from becoming too big in the first place. The size of Wall Street’s five giants already equals a large percentage of America’s gross domestic product.
That makes them too big to fail almost by definition, because if one or two get into trouble – as they did in 2008 – their demise would shake the foundations of the financial system, even if there were an “orderly” way to liquidate them. Because traders and investors know they are too big to fail, these banks have a huge competitive advantage over smaller banks.
Another crucial provision left out of the Senate bill would be to change the structure of banking by resurrecting the Depression-era Glass-Steagall Act and force banks to separate commercial banking (the classic function of connecting lenders to borrowers) from investment banking.
Here, too, the bill takes a regulatory approach instead. It includes a provision barring banks from “proprietary trading,” or making market bets with their own capital. Even if this regulation were tough enough (and the current Senate bill requires various delays and studies before it’s applied), it would not erode the giant banks’ monopoly over derivatives trading, adding to their power and inevitable “too big to fail” status.
Which brings us to the third structural idea, advanced by Senator Blanche Lincoln. She would force the banks to do their derivative trades in entities separate from their commercial banking.
This measure is still in the bill, but is on life-support after Paul Volcker, Tim Geithner, and Fed chair Ben Bernanke came out against it. Republicans hate it. The biggest banks detest it. Virtually every major Wall Street and business lobbyist has its guns trained on it. Almost no one in Washington believes it will survive the upcoming conference committee.
But it’s critical. For years the big banks have relied on taxpayer-funded deposit insurance to backstop their lucrative derivative businesses. Obviously they want the subsidy to continue. Bernanke argues that “depository institutions use derivatives to help mitigate the risks of their normal banking activities.” True, but irrelevant. Lincoln’s measure would allow banks to continue to use derivatives. They just could not rely on their government-insured deposits for the capital.
Requiring banks to do derivative trading in separate entities would force them to raise extra capital. But if such trading is so useful, banks should foot the bill, not taxpayers. Bernanke and others say the measure would give foreign banks a competitive advantage. Even if he is right, since when is it up to taxpayers to guarantee profitability at America’s largest banks relative to foreign ones?
The trading of derivatives is not so crucial to the US economy that taxpayers should subsidise the practice. If the past two years have taught us anything, the lesson is just the opposite. Derivatives can generate huge risks unless carefully regulated.
Wall Street’s lobbyists have fought tooth and nail against these three ideas because all would change the structure of America’s biggest banks. The lobbyists won on the first two, and the Street has signalled its willingness to accept the Dodd bill, without Lincoln’s measure.
The interesting question is why the president, who says he wants to get “tough” on banks, has also turned his back on changing the structure of American banks — opting for a regulatory approach instead.
It’s almost exactly like health care reform. Ideas for changing the structure of the health-care industry — a single payer, Medicare for all, even a so-called “public option” — were all jettisoned by the White House in favor of a complex set of regulations that left the old system of private for-profit health insurers in place. The final health care act doesn’t even remove the exemption of private insurers from the nation’s antitrust laws.
Regulations don’t work if the underlying structure of an industry — be it banking or health care — got us into trouble in the first place. Wall Street’s big banks are just too big, and their ability to draw on commercial deposits for investment banking activities, including derivatives, will make them even bigger. It will also subject the economy to greater and greater risks in the future. No amount of regulation can cure that.
Similarly, the underlying system of private for-profit health insurance is a key driver of America’s bloated and ineffective health care delivery. We can try to regulate it like mad, but no amount of regulation will cure this fundamental problem.
A regulatory rather than structural approach to deep-seated problems in complex industries like banking and health care is also vulnerable to the inevitable erosion that occurs when industry lobbyists insert themselves into the regulatory process. Tiny loopholes get larger. Delays get longer. Legislative words are warped and distorted to mean what industry wants them to mean.
Both Senate and House financial reform bills exempt “customised” derivatives from the exchanges, for example, but leave it to regulators to define what contracts will be excused. Yet many of the derivatives that caused the most trouble (read Goldman Sachs and other banks’ deals with AIG) might well be thought of as customised. Another potential problem: in assigning consumer protection to the Fed, the bill puts it under Fed chiefs who in the past disdisplayed a patent disregard of such safeguards (read Alan Greenspan).
Inevitably, top regulators move into the industry they’re putatively trying to regulate, while top guns in the industry move temporarily into regulatory positions. This revolving door of regulation also serves over time to erode all serious attempt at overseeing an industry.
The only way to have a lasting effect on industries as large and intransigent as banking and health care is to alter their structure. That was the approach taken to finance by Franklin D. Roosevelt in the 1930s, and by Lyndon Johnson to health care (Medicare) in the 1960s.
So why has Obama consistently chosen regulation over restructuring? Because restructuring Wall Street or health care would surely elicit firestorms from these industries. Both are politically powerful, and Obama did not want to take them on directly.
A regulatory approach allows for more bargaining, not only in the legislative process but also, over time, in the rule-making process as legislation is put into effect. It’s always possible to placate an industry with a carefully-chosen loophole or vague legislative language that will allow the industry to continue to go on much as before.
And that’s precisely the problem
Wait, wasn't offshore oil drilling so safe even Hurricane Katrina couldn't cause a spill?
Original Link: http://mediamatters.org/blog/201004290027
By Karl Frisch
In 2008, one of the most common lines of misinformation used by media conservatives favoring the lifting of the moratorium on certain offshore oil drilling was the false notion that no oil was spilled offshore as a result of Hurricane Katrina.
Their strategy was quite simple...if they could convince people that there was no oil spillage offshore, even during the havoc brought by Hurricane Katrina, then they could convince people that offshore drilling was relatively safe for the environment.
Drill baby, drill!
As Media Matters noted in its 2008 myths and falsehoods about oil policies:
Proponents of lifting the moratorium on certain offshore drilling have on several occasions falsely claimed that no oil was spilled offshore during Hurricane Katrina -- with no challenge from cable news anchors; at least one Fox News contributor has also made this false claim. In fact, as Media Matters has noted, a 2007 report prepared for the U.S. Minerals Management Service (MMS) by the international consulting firm Det Norske Veritas found that damage related to Hurricane Katrina resulted in 70 spills from outer continental shelf structures with a total volume spilled of approximately 5,552 barrels of petroleum products. The study specifically identified damage from Katrina to 27 platforms and rigs that resulted in approximately 2,843 barrels of spilled petroleum products. The combined impacts of hurricanes Katrina and Rita on outer continental shelf structures in the Gulf of Mexico, according to the report, were "124 spills ... with a total volume of roughly 17,700 barrels of total petroleum products."
On Fox News' Fox & Friends, former Republican presidential candidate and Fox News contributor Mike Huckabee falsely asserted, "When Katrina, a Cat-5 hurricane, hit the Gulf Coast, not one drop of oil was spilled off of those rigs out in the Gulf of Mexico." The claim has also been promulgated on MSNBC. NBC News chief foreign affairs correspondent Andrea Mitchell has twice allowed guests to claim that Hurricane Katrina did not result in any oil spills. On the June 24 edition of MSNBC Live, Mitchell did not challenge Sen. Richard Burr's (R-NC) false assertion that "there wasn't a drop" of oil spilled in the Gulf of Mexico due to a Category 5 hurricane. And during a July 15 interview on MSNBC Live, Mitchell did not challenge energy lobbyist and former Sen. Trent Lott's (R-MS) false claim that "[w]e didn't have one drop of oil spilt when we had the biggest hurricane in, you know, recent history, Hurricane Katrina."
However, on the July 17 edition of MSNBC Live, anchor David Shuster did confront McCain senior policy adviser Nancy Pfotenhauer about her past use of the false claim on MSNBC. Shuster said: "Earlier this week on this program, though, you defended offshore drilling and said, quote, 'We withstood Hurricanes Rita and Katrina and did not spill a drop.' In fact, the U.S. Mineral Management Service said that Katrina and Rita caused 124 offshore spills for a total of more than 743,000 gallons of oil and refined products spilled. So, Nancy, do you want to take back what you said?" Pfotenhauer replied: "Right. Well, I actually do. I was misinformed, and my embarrassment aside, the point is still that we had a remarkable performance."
Yes, they were completely wrong and willful in their misinformation though I doubt they lost any sleep over it -- what are a few lies between friends? Perhaps it isn't surprising then to see relative silence from the right-wing media chattering class over one the worst oil rig disasters in decades that occurred on April 20 just off the Gulf coast of Louisiana.
Sure, Fox News has run some reports on news from the Gulf coast spill but where is the back peddling on the misinformation that was once so rampant in right-wing media circles? I guess we shouldn't hold our breath to see any conservative radio talkers, pundits or Fox News hosts admitting that they were wrong back in 2008 -- after all, that would be the right thing to do, and they can't do that now can they?
By Karl Frisch
In 2008, one of the most common lines of misinformation used by media conservatives favoring the lifting of the moratorium on certain offshore oil drilling was the false notion that no oil was spilled offshore as a result of Hurricane Katrina.
Their strategy was quite simple...if they could convince people that there was no oil spillage offshore, even during the havoc brought by Hurricane Katrina, then they could convince people that offshore drilling was relatively safe for the environment.
Drill baby, drill!
As Media Matters noted in its 2008 myths and falsehoods about oil policies:
Proponents of lifting the moratorium on certain offshore drilling have on several occasions falsely claimed that no oil was spilled offshore during Hurricane Katrina -- with no challenge from cable news anchors; at least one Fox News contributor has also made this false claim. In fact, as Media Matters has noted, a 2007 report prepared for the U.S. Minerals Management Service (MMS) by the international consulting firm Det Norske Veritas found that damage related to Hurricane Katrina resulted in 70 spills from outer continental shelf structures with a total volume spilled of approximately 5,552 barrels of petroleum products. The study specifically identified damage from Katrina to 27 platforms and rigs that resulted in approximately 2,843 barrels of spilled petroleum products. The combined impacts of hurricanes Katrina and Rita on outer continental shelf structures in the Gulf of Mexico, according to the report, were "124 spills ... with a total volume of roughly 17,700 barrels of total petroleum products."
On Fox News' Fox & Friends, former Republican presidential candidate and Fox News contributor Mike Huckabee falsely asserted, "When Katrina, a Cat-5 hurricane, hit the Gulf Coast, not one drop of oil was spilled off of those rigs out in the Gulf of Mexico." The claim has also been promulgated on MSNBC. NBC News chief foreign affairs correspondent Andrea Mitchell has twice allowed guests to claim that Hurricane Katrina did not result in any oil spills. On the June 24 edition of MSNBC Live, Mitchell did not challenge Sen. Richard Burr's (R-NC) false assertion that "there wasn't a drop" of oil spilled in the Gulf of Mexico due to a Category 5 hurricane. And during a July 15 interview on MSNBC Live, Mitchell did not challenge energy lobbyist and former Sen. Trent Lott's (R-MS) false claim that "[w]e didn't have one drop of oil spilt when we had the biggest hurricane in, you know, recent history, Hurricane Katrina."
However, on the July 17 edition of MSNBC Live, anchor David Shuster did confront McCain senior policy adviser Nancy Pfotenhauer about her past use of the false claim on MSNBC. Shuster said: "Earlier this week on this program, though, you defended offshore drilling and said, quote, 'We withstood Hurricanes Rita and Katrina and did not spill a drop.' In fact, the U.S. Mineral Management Service said that Katrina and Rita caused 124 offshore spills for a total of more than 743,000 gallons of oil and refined products spilled. So, Nancy, do you want to take back what you said?" Pfotenhauer replied: "Right. Well, I actually do. I was misinformed, and my embarrassment aside, the point is still that we had a remarkable performance."
Yes, they were completely wrong and willful in their misinformation though I doubt they lost any sleep over it -- what are a few lies between friends? Perhaps it isn't surprising then to see relative silence from the right-wing media chattering class over one the worst oil rig disasters in decades that occurred on April 20 just off the Gulf coast of Louisiana.
Sure, Fox News has run some reports on news from the Gulf coast spill but where is the back peddling on the misinformation that was once so rampant in right-wing media circles? I guess we shouldn't hold our breath to see any conservative radio talkers, pundits or Fox News hosts admitting that they were wrong back in 2008 -- after all, that would be the right thing to do, and they can't do that now can they?
"Drill more": Fox News figures respond to environmental catastrophe by calling for more drilling
Original Link: http://mediamatters.org/research/201005040043
In the wake of the catastrophic oil spill in the Gulf of Mexico, several Fox News hosts and contributors have responded by calling for a continuation -- and in some instances, an expansion -- of offshore drilling.
Fox hosts and contributors respond to drilling catastrophe by calling for drilling
Kristol suggests drilling "closer in, which is probably less dangerous." On the May 3 broadcast of Fox News Sunday Fox News contributor Bill Kristol said: "Look, it was a bad accident. But the fact is, I think we get something like one third of our domestic oil from the Gulf - from offshore drilling in the Gulf. We need it. We can't cut back on it. Incidentally, if we hadn't stopped closer in drilling after the Santa Barbara accident forty years ago and we've had these congressional restrictions until 2008 for forty years, we'd have a lot more drilling closer in which is probably less dangerous, less treacherous than trying to drill fifty miles from the coast." Kristol also suggested "on-shore drilling" in ANWR, and added, "I'm a drill, baby, drill, person."
Bolling: "Drill here, drill now ...drill, baby, drill" On the April 30 broadcast of Fox News Channel's The O'Reilly Factor, Fox Business host and Fox News contributor Eric Bolling suggested that the "six dollar, seven dollar diesel fuel" is "more harmful" for fishermen than the oil spill and said: "We need to drill here, drill now, and hey, drill, baby, drill."
Asman says "the answer" is we need to "drill more," tells environmental "hypocrites" to "shut up." On the April 30 edition of Fox Business' America's Nightly Scoreboard, host David Asman announced he was "sick" of "environmentalists living the good life while lecturing the rest of us about how we're all a bunch of selfish oil little piggies." He added: "The bottom line is we need oil. And we will for some time, and the only way to prevent us from getting stuck on foreign oil is to drill more domestically. It's a messy business, but it beats most of the alternatives for now. And until someone comes up with something better, the answer is now as it was before the awful spill in Louisiana: drill more."
Perino suggests continuing "very safe" offshore drilling. On the May 3 edition of Fox News' Fox & Friends, Fox News contributor Dana Perino said that we have "very safe offshore oil drilling," adding, "look how much is down there, if it was safe and we were able to harness it."
Palin posts Facebook note titled "Domestic Drilling: Why We Can Still Believe." In a note posted to her Facebook page on April 30th, Fox News contributor Sarah Palin wrote: "I repeat the slogan 'drill here, drill now' not out of naiveté or disregard for the tragic consequences of oil spills -- my family and my state and I know firsthand those consequences. How could I still believe in drilling America's domestic supply of energy after having seen the devastation of the Exxon-Valdez spill? I continue to believe in it because increased domestic oil production will make us a more secure, prosperous, and peaceful nation."
Fox News has long history of aggressively advocating for offshore drilling
As Media Matters has noted, Fox News has fervently advocated for offshore drilling. Its activism has includled promoting Sarah Palin's "drill, baby, drill" mantra and pushing myths suggesting that drilling is environmentally safe. Notably, Glenn Beck has repeatedly touted offshore drilling, including claiming that "if you really cared about the environment, you would let us drill for our own oil," and Newt Gingrich is the author of Drill Here, Drill Now, Pay Less: A handbook for slashing gas prices and solving our energy crisis (Regnery Press, 2008)
In the wake of the catastrophic oil spill in the Gulf of Mexico, several Fox News hosts and contributors have responded by calling for a continuation -- and in some instances, an expansion -- of offshore drilling.
Fox hosts and contributors respond to drilling catastrophe by calling for drilling
Kristol suggests drilling "closer in, which is probably less dangerous." On the May 3 broadcast of Fox News Sunday Fox News contributor Bill Kristol said: "Look, it was a bad accident. But the fact is, I think we get something like one third of our domestic oil from the Gulf - from offshore drilling in the Gulf. We need it. We can't cut back on it. Incidentally, if we hadn't stopped closer in drilling after the Santa Barbara accident forty years ago and we've had these congressional restrictions until 2008 for forty years, we'd have a lot more drilling closer in which is probably less dangerous, less treacherous than trying to drill fifty miles from the coast." Kristol also suggested "on-shore drilling" in ANWR, and added, "I'm a drill, baby, drill, person."
Bolling: "Drill here, drill now ...drill, baby, drill" On the April 30 broadcast of Fox News Channel's The O'Reilly Factor, Fox Business host and Fox News contributor Eric Bolling suggested that the "six dollar, seven dollar diesel fuel" is "more harmful" for fishermen than the oil spill and said: "We need to drill here, drill now, and hey, drill, baby, drill."
Asman says "the answer" is we need to "drill more," tells environmental "hypocrites" to "shut up." On the April 30 edition of Fox Business' America's Nightly Scoreboard, host David Asman announced he was "sick" of "environmentalists living the good life while lecturing the rest of us about how we're all a bunch of selfish oil little piggies." He added: "The bottom line is we need oil. And we will for some time, and the only way to prevent us from getting stuck on foreign oil is to drill more domestically. It's a messy business, but it beats most of the alternatives for now. And until someone comes up with something better, the answer is now as it was before the awful spill in Louisiana: drill more."
Perino suggests continuing "very safe" offshore drilling. On the May 3 edition of Fox News' Fox & Friends, Fox News contributor Dana Perino said that we have "very safe offshore oil drilling," adding, "look how much is down there, if it was safe and we were able to harness it."
Palin posts Facebook note titled "Domestic Drilling: Why We Can Still Believe." In a note posted to her Facebook page on April 30th, Fox News contributor Sarah Palin wrote: "I repeat the slogan 'drill here, drill now' not out of naiveté or disregard for the tragic consequences of oil spills -- my family and my state and I know firsthand those consequences. How could I still believe in drilling America's domestic supply of energy after having seen the devastation of the Exxon-Valdez spill? I continue to believe in it because increased domestic oil production will make us a more secure, prosperous, and peaceful nation."
Fox News has long history of aggressively advocating for offshore drilling
As Media Matters has noted, Fox News has fervently advocated for offshore drilling. Its activism has includled promoting Sarah Palin's "drill, baby, drill" mantra and pushing myths suggesting that drilling is environmentally safe. Notably, Glenn Beck has repeatedly touted offshore drilling, including claiming that "if you really cared about the environment, you would let us drill for our own oil," and Newt Gingrich is the author of Drill Here, Drill Now, Pay Less: A handbook for slashing gas prices and solving our energy crisis (Regnery Press, 2008)
"Drill, baby, drill": Fox News' environmental catastrophe
Original Link: http://mediamatters.org/research/201004300039
In the wake of the catastrophic oil spill currently occurring in the Gulf of Mexico, Media Matters reviews Fox News' fervent advocacy for offshore drilling. Its activism has including promoting Sarah Palin's "drill, baby, drill" mantra and pushing myths suggesting that drilling is environmentally safe.
Palin's "drill, baby, drill" mantra part of Fox's pro-offshore drilling endorsement
Palin: "[L]et's drill, baby, drill, not stall, baby, stall." On the April 14 edition of On the Record, host Greta Van Susteren aired footage of Fox News contributor Sarah Palin giving a speech at a tea party event, in which she repeated the "drill, baby, drill" mantra she first voiced during the 2008 presidential campaign, saying: "We can pave the way for proven conventional sources of energy, resource development with nuclear and clean coal technology and on and offshore drilling. Because remember that energy in America is security for America. So, yeah, let's drill, baby, drill, not stall, baby, stall."
Hannity: "We don't need to explore, we need to drill, baby, drill." On the April 1 edition of his show, Sean Hannity said, "We've got the oil reserves in Alaska. We've got them off the coast of Florida. We've got them off the coast in California. We've got them in the Gulf. We know where the oil is. We don't need to explore, we need to drill, baby, drill." Hannity later said, "Drilling would be conducted in an environmentally sensitive manner."
Beck repeatedly touted offshore drilling
Beck: "If you really cared about the environment, you would let us drill for our own oil." On the September 2, 2008, edition of his CNN Headline News show, Glenn Beck said, "I got news for the greenies. If you really cared about the environment, you would let us drill for our own oil," adding: "It appears to me that the oil companies are doing a better job protecting the ocean and the fishes and the Gulf of Mexico than the local, state, and federal government are having at protecting people in our cities."
Beck applauds Bush for removing the "antiquated" "executive ban on offshore drilling." On the July 14, 2008, edition of his CNN Headline News show, Beck noted President Bush's removing of "the executive ban on offshore drilling," adding: "Welcome to the party, George. This is a ban that was as antiquated as it is idiotic. Unfortunately, no more oil is going to flow, from the Atlantic, at least, until Congress does the same thing and lifts their ban as well."
Beck: "Anybody with a car and a brain has been screaming about that for a long time." On June 18, 2008, Beck said that "President Bush gave a speech this afternoon urging Congress to pass legislation, lifting the congressional ban on safe, environmentally friendly offshore oil drilling, blah, blah, blah, blah, blah. Anybody with a car and a brain has been screaming about that for a long time." On the June 17, 2008, edition of his show, Beck called the lifting of the ban "so logical the politicians have trouble even understanding it."
Beck: "We have to ramp up domestic offshore drilling." From the May 12, 2008, edition of his show, Beck said, "We have to ramp up domestic offshore drilling, even off the coast of billionaire vacation spots like South Florida, California, and my favorite, Cape Cod." Beck also said: "So tonight, America, here's what you need to know. Until we get a president and Congress with vision -- or really, I'll just settle for one with a clue -- we need temporary energy solutions, and aggressive drilling in the United States is one of them."
Beck on environmental opposition to offshore drilling: "Go make it with a tree all you want. I'm looking for oil." On the May 8, 2008, edition of his show, Beck said: "Norway, Canada, chock full of tree huggers, and they both have allowed offshore drilling for years. China, Cuba, virtually drilling in our own backyard, right off the coast of Florida. Yet, 85 percent of our own coastal waters, along with ANWR, are completely off limits, because we might hurt the bucktooth beaver or a caribou or whatever the hell they're complaining about now. What is it going to take before you are finally pissed of enough to tell these environmentalists, you know what? Go make it with a tree all you want. I'm looking for oil."
Gingrich: "Drill Here, Drill Now, Pay Less"
Gingrich literally wrote the book on oil drilling advocacy. Fox News contributor Newt Gingrich is the author of Drill Here, Drill Now, Pay Less: A handbook for slashing gas prices and solving our energy crisis (Regnery Press, 2008). In the book, Gingrich writes, "There is perhaps no better example of the disconnect between your government and you than the ban on offshore oil and gas drilling. According to Gingrich, "every year that this ban remains in place is another year that Americans will needlessly pay high gas prices, with much of the profits going to foreign dictatorships." [Page 14]
Gingrich organization campaign promotes drilling. Americans Solutions for Winning the Future, of which Gingrich is General Chairman, has a "Drill Here, Drill Now, Pay Less" campaign. The campaign features a petition calling on Congress to "act immediately to lower gasoline prices (and diesel and other fuel prices)* by authorizing the exploration of proven energy reserves to reduce our dependence on foreign energy sources from unstable countries."
Other Fox figures also call for increased offshore drilling
Kristol: "We would like more drilling in Virginia." On the February 14 edition of Fox News Sunday, panelist William Kristol responded to Juan Williams statement that "when it comes to drilling offshore, you go talk to the people who live off the shore of Florida; do they want more drilling? Do the people in North Carolina want the Outer Banks covered in black oil? I don't think so," by saying, "People in Virginia just elected a governor running for governor on the -- on the platform of more drilling offshore in Virginia, so we would like more drilling in Virginia."
Cavuto: Offshore drilling "yields demonstrable results and fairly quickly." On the May 27, 2009, edition of Your World, host Neil Cavuto discussed "eco-entrepeneur" Howard Gould's proposal to paint roofs white as a way to save energy. Cavuto said he wanted to throw offshore drilling "in the mix" of energy proposals, adding, "It is just as nutty as painting a roof white, right?" When Gould noted that "Putting an offshore drilling platform is not necessarily low-hanging fruit. I mean, that is a pretty expensive proposition," Cavuto responded, "But it yields demonstrable results and fairly quickly."
Hosts touted myth that drilling is safe because no oil spilled during Katrina, Rita
Contrary to Fox-pushed falsehood, Hurricanes Katrina and Rita spilled nearly 17,700 barrels of petroleum products. According to a 2007 report prepared for the U.S. Minerals Management Service by the international consulting firm Det Norske Veritas, due to Hurricanes Katrina and Rita, "124 [oil] spills were reported with a total volume of roughly 17,700 barrels of total petroleum products," including more than 10,000 barrels from platforms and rigs alone. The report further noted that "about 13,200 barrels were crude oil and condensate from platforms, rigs and pipelines, and 4,500 barrels were refined products from platforms and rigs."
Fox's O'Reilly: "[Y]ou've got technology that will prevent pollution," "when Katrina hit, none of the oil rigs spilled in Louisiana." While discussing offshore oil drilling with a caller on the July 9, 2008, edition of Westwood One's The Radio Factor, host Bill O'Reilly stated, "[Y]ou have to have a sane environmental policy when it's 25 miles offshore that no one'll see and you've got technology that will prevent pollution." He added, "Remember when Katrina hit, none of the oil rigs spilled in Louisiana. So we have the technology."
Fox's Huckabee: "not one drop of oil was spilled" during Hurricane Katrina, offshore drilling "extraordinarily safe." During the June 27, 2008, edition of Fox News' Fox & Friends, contributor Mike Huckabee stated: "When Katrina, a Cat-5 hurricane, hit the Gulf Coast, not one drop of oil was spilled off of those rigs out in the Gulf of Mexico. So we know that the technology to drill offshore is extraordinarily safe and environmentally friendly. And it's not something that we have to be as worried about as we do a refinery on shore or some other type of issue."
Fox's Jarrett advances claim that Katrina example indicates that drilling can be done in a way that protects the environment. On the July 30, 2008, edition of Fox News' Happening Now, co-host Gregg Jarrett asked then-Secretary of Energy Samuel Bodman, "[Y]ou're an engineer by background. Has technology improved so dramatically that drilling can now be done in a way that protects the environment?" He then allowed Bodman to reply, "I believe that it can. When we had Katrina and Rita, the two worst hurricanes in at least in recent memory, in '05, some three years ago, there was not one case where we had a -- a situation with oil or gas being spilled in the environment."
Fox's Cavuto allowed Bachmann to push back against dangers of oil spills with Katrina canard. During the September 1, 2008, edition of Fox News' Your World, host Neil Cavuto failed to counter Rep. Michele Bachmann's claim that "We didn't have any spillage whatsoever from the oil rigs during Katrina." Bachmann went on to claim: "I don't think it's luck. I think it's the fact of American ingenuity and technology. We know how to do things, and our companies have done a wonderful job making sure that we are both environmentally sound, but also able to produce the energy that America needs."
Beck: "No significant offshore spillage" during Katrina and Rita. On the September 2, 2008, edition of his CNN Headline News show, Beck said: "Even during Katrina and Rita in 2005, no significant offshore spillage from the 4,000 rigs in the Gulf of Mexico. Wow, that kind of puts a dent in the green movement's argument that offshore rigs are so dangerous for the environment."
Fox News hosts spread seepage myth
Gallagher repeated debunked seepage myth. During the September 15, 2008, edition of Fox News' The Live Desk, co-host Trace Gallagher repeated a debunked oil drilling myth, claiming that "more oil seeps through the ground off the coast of California than is ever spilled out there. So you're going to have much more environmental damage." In fact, a report by the County of Santa Barbara discussing the effects of natural seepage and oil spills, including a 1969 oil spill off California's Santa Barbara coast that released an estimated 80,000 to 100,000 barrels of oil, stated that "major spills can have far greater" environmental impact than seeps have.
On Twitter, Gingrich falsely claimed "no [oil] spill since 1969" in waters off Santa Barbara. In a March 2 Twitter post, Gingrich wrote that his wife, Callista, "pointed out flying into [S]anta [B]arbara you can see the oil rigs off shore," and asserted, "Ironically they have had no spill since 1969." In fact, there were at least two oil spills reported in or near the Santa Barbara Channel in just the last few months before Gingrich's post, according to the U.S. Coast Guard.
Fox report: "[D]rilling could help the environment." A report on the July 14, 2008, edition of Your World was teased by guest host Connell McShane with the claim, "Environmentalists drilling into your heads how dangerous and dirty offshore drilling is, and we're actually getting evidence that drilling could help the environment." In the report, William LaJeunesse stated that "most opposition to offshore drilling, of course, is based on fear -- fear of a spill," and claimed that according to the National Academy of Sciences, "Mother Nature spills more oil into the environment than Exxon, Shell, BP, and Chevron combined." LaJeunesse added, "In fact, we are dumping more oil out of jet airplanes as they jettison the fuel in emergency landings than come off of offshore platforms."
Beck: There's "more natural seepage on the ocean floor than there is from spills from offshore." On the June 18, 2008, edition of his CNN Headline News show, Beck interview musician Trace Adkins, who said that "All the six years that I worked offshore on a drilling rig, I can't recall a time whenever, you know, there was some significant spill of anything." Beck said that "I read someplace -- and you might even know this -- that there is more natural seepage on the ocean floor than there is from spills from offshore."
Cavuto hid lobbying ties of offshore drilling proponent Lott
Cavuto let Lott tout offshore drilling without disclosing he's an energy lobbyist. On the March 11, 2009, edition of Fox News' Your World, Neil Cavuto hosted former Sen. Trent Lott (R-MS) to discuss energy policy, during which Lott touted offshore drilling. But Cavuto failed to disclose that Lott is now a lobbyist for major energy companies.
In the wake of the catastrophic oil spill currently occurring in the Gulf of Mexico, Media Matters reviews Fox News' fervent advocacy for offshore drilling. Its activism has including promoting Sarah Palin's "drill, baby, drill" mantra and pushing myths suggesting that drilling is environmentally safe.
Palin's "drill, baby, drill" mantra part of Fox's pro-offshore drilling endorsement
Palin: "[L]et's drill, baby, drill, not stall, baby, stall." On the April 14 edition of On the Record, host Greta Van Susteren aired footage of Fox News contributor Sarah Palin giving a speech at a tea party event, in which she repeated the "drill, baby, drill" mantra she first voiced during the 2008 presidential campaign, saying: "We can pave the way for proven conventional sources of energy, resource development with nuclear and clean coal technology and on and offshore drilling. Because remember that energy in America is security for America. So, yeah, let's drill, baby, drill, not stall, baby, stall."
Hannity: "We don't need to explore, we need to drill, baby, drill." On the April 1 edition of his show, Sean Hannity said, "We've got the oil reserves in Alaska. We've got them off the coast of Florida. We've got them off the coast in California. We've got them in the Gulf. We know where the oil is. We don't need to explore, we need to drill, baby, drill." Hannity later said, "Drilling would be conducted in an environmentally sensitive manner."
Beck repeatedly touted offshore drilling
Beck: "If you really cared about the environment, you would let us drill for our own oil." On the September 2, 2008, edition of his CNN Headline News show, Glenn Beck said, "I got news for the greenies. If you really cared about the environment, you would let us drill for our own oil," adding: "It appears to me that the oil companies are doing a better job protecting the ocean and the fishes and the Gulf of Mexico than the local, state, and federal government are having at protecting people in our cities."
Beck applauds Bush for removing the "antiquated" "executive ban on offshore drilling." On the July 14, 2008, edition of his CNN Headline News show, Beck noted President Bush's removing of "the executive ban on offshore drilling," adding: "Welcome to the party, George. This is a ban that was as antiquated as it is idiotic. Unfortunately, no more oil is going to flow, from the Atlantic, at least, until Congress does the same thing and lifts their ban as well."
Beck: "Anybody with a car and a brain has been screaming about that for a long time." On June 18, 2008, Beck said that "President Bush gave a speech this afternoon urging Congress to pass legislation, lifting the congressional ban on safe, environmentally friendly offshore oil drilling, blah, blah, blah, blah, blah. Anybody with a car and a brain has been screaming about that for a long time." On the June 17, 2008, edition of his show, Beck called the lifting of the ban "so logical the politicians have trouble even understanding it."
Beck: "We have to ramp up domestic offshore drilling." From the May 12, 2008, edition of his show, Beck said, "We have to ramp up domestic offshore drilling, even off the coast of billionaire vacation spots like South Florida, California, and my favorite, Cape Cod." Beck also said: "So tonight, America, here's what you need to know. Until we get a president and Congress with vision -- or really, I'll just settle for one with a clue -- we need temporary energy solutions, and aggressive drilling in the United States is one of them."
Beck on environmental opposition to offshore drilling: "Go make it with a tree all you want. I'm looking for oil." On the May 8, 2008, edition of his show, Beck said: "Norway, Canada, chock full of tree huggers, and they both have allowed offshore drilling for years. China, Cuba, virtually drilling in our own backyard, right off the coast of Florida. Yet, 85 percent of our own coastal waters, along with ANWR, are completely off limits, because we might hurt the bucktooth beaver or a caribou or whatever the hell they're complaining about now. What is it going to take before you are finally pissed of enough to tell these environmentalists, you know what? Go make it with a tree all you want. I'm looking for oil."
Gingrich: "Drill Here, Drill Now, Pay Less"
Gingrich literally wrote the book on oil drilling advocacy. Fox News contributor Newt Gingrich is the author of Drill Here, Drill Now, Pay Less: A handbook for slashing gas prices and solving our energy crisis (Regnery Press, 2008). In the book, Gingrich writes, "There is perhaps no better example of the disconnect between your government and you than the ban on offshore oil and gas drilling. According to Gingrich, "every year that this ban remains in place is another year that Americans will needlessly pay high gas prices, with much of the profits going to foreign dictatorships." [Page 14]
Gingrich organization campaign promotes drilling. Americans Solutions for Winning the Future, of which Gingrich is General Chairman, has a "Drill Here, Drill Now, Pay Less" campaign. The campaign features a petition calling on Congress to "act immediately to lower gasoline prices (and diesel and other fuel prices)* by authorizing the exploration of proven energy reserves to reduce our dependence on foreign energy sources from unstable countries."
Other Fox figures also call for increased offshore drilling
Kristol: "We would like more drilling in Virginia." On the February 14 edition of Fox News Sunday, panelist William Kristol responded to Juan Williams statement that "when it comes to drilling offshore, you go talk to the people who live off the shore of Florida; do they want more drilling? Do the people in North Carolina want the Outer Banks covered in black oil? I don't think so," by saying, "People in Virginia just elected a governor running for governor on the -- on the platform of more drilling offshore in Virginia, so we would like more drilling in Virginia."
Cavuto: Offshore drilling "yields demonstrable results and fairly quickly." On the May 27, 2009, edition of Your World, host Neil Cavuto discussed "eco-entrepeneur" Howard Gould's proposal to paint roofs white as a way to save energy. Cavuto said he wanted to throw offshore drilling "in the mix" of energy proposals, adding, "It is just as nutty as painting a roof white, right?" When Gould noted that "Putting an offshore drilling platform is not necessarily low-hanging fruit. I mean, that is a pretty expensive proposition," Cavuto responded, "But it yields demonstrable results and fairly quickly."
Hosts touted myth that drilling is safe because no oil spilled during Katrina, Rita
Contrary to Fox-pushed falsehood, Hurricanes Katrina and Rita spilled nearly 17,700 barrels of petroleum products. According to a 2007 report prepared for the U.S. Minerals Management Service by the international consulting firm Det Norske Veritas, due to Hurricanes Katrina and Rita, "124 [oil] spills were reported with a total volume of roughly 17,700 barrels of total petroleum products," including more than 10,000 barrels from platforms and rigs alone. The report further noted that "about 13,200 barrels were crude oil and condensate from platforms, rigs and pipelines, and 4,500 barrels were refined products from platforms and rigs."
Fox's O'Reilly: "[Y]ou've got technology that will prevent pollution," "when Katrina hit, none of the oil rigs spilled in Louisiana." While discussing offshore oil drilling with a caller on the July 9, 2008, edition of Westwood One's The Radio Factor, host Bill O'Reilly stated, "[Y]ou have to have a sane environmental policy when it's 25 miles offshore that no one'll see and you've got technology that will prevent pollution." He added, "Remember when Katrina hit, none of the oil rigs spilled in Louisiana. So we have the technology."
Fox's Huckabee: "not one drop of oil was spilled" during Hurricane Katrina, offshore drilling "extraordinarily safe." During the June 27, 2008, edition of Fox News' Fox & Friends, contributor Mike Huckabee stated: "When Katrina, a Cat-5 hurricane, hit the Gulf Coast, not one drop of oil was spilled off of those rigs out in the Gulf of Mexico. So we know that the technology to drill offshore is extraordinarily safe and environmentally friendly. And it's not something that we have to be as worried about as we do a refinery on shore or some other type of issue."
Fox's Jarrett advances claim that Katrina example indicates that drilling can be done in a way that protects the environment. On the July 30, 2008, edition of Fox News' Happening Now, co-host Gregg Jarrett asked then-Secretary of Energy Samuel Bodman, "[Y]ou're an engineer by background. Has technology improved so dramatically that drilling can now be done in a way that protects the environment?" He then allowed Bodman to reply, "I believe that it can. When we had Katrina and Rita, the two worst hurricanes in at least in recent memory, in '05, some three years ago, there was not one case where we had a -- a situation with oil or gas being spilled in the environment."
Fox's Cavuto allowed Bachmann to push back against dangers of oil spills with Katrina canard. During the September 1, 2008, edition of Fox News' Your World, host Neil Cavuto failed to counter Rep. Michele Bachmann's claim that "We didn't have any spillage whatsoever from the oil rigs during Katrina." Bachmann went on to claim: "I don't think it's luck. I think it's the fact of American ingenuity and technology. We know how to do things, and our companies have done a wonderful job making sure that we are both environmentally sound, but also able to produce the energy that America needs."
Beck: "No significant offshore spillage" during Katrina and Rita. On the September 2, 2008, edition of his CNN Headline News show, Beck said: "Even during Katrina and Rita in 2005, no significant offshore spillage from the 4,000 rigs in the Gulf of Mexico. Wow, that kind of puts a dent in the green movement's argument that offshore rigs are so dangerous for the environment."
Fox News hosts spread seepage myth
Gallagher repeated debunked seepage myth. During the September 15, 2008, edition of Fox News' The Live Desk, co-host Trace Gallagher repeated a debunked oil drilling myth, claiming that "more oil seeps through the ground off the coast of California than is ever spilled out there. So you're going to have much more environmental damage." In fact, a report by the County of Santa Barbara discussing the effects of natural seepage and oil spills, including a 1969 oil spill off California's Santa Barbara coast that released an estimated 80,000 to 100,000 barrels of oil, stated that "major spills can have far greater" environmental impact than seeps have.
On Twitter, Gingrich falsely claimed "no [oil] spill since 1969" in waters off Santa Barbara. In a March 2 Twitter post, Gingrich wrote that his wife, Callista, "pointed out flying into [S]anta [B]arbara you can see the oil rigs off shore," and asserted, "Ironically they have had no spill since 1969." In fact, there were at least two oil spills reported in or near the Santa Barbara Channel in just the last few months before Gingrich's post, according to the U.S. Coast Guard.
Fox report: "[D]rilling could help the environment." A report on the July 14, 2008, edition of Your World was teased by guest host Connell McShane with the claim, "Environmentalists drilling into your heads how dangerous and dirty offshore drilling is, and we're actually getting evidence that drilling could help the environment." In the report, William LaJeunesse stated that "most opposition to offshore drilling, of course, is based on fear -- fear of a spill," and claimed that according to the National Academy of Sciences, "Mother Nature spills more oil into the environment than Exxon, Shell, BP, and Chevron combined." LaJeunesse added, "In fact, we are dumping more oil out of jet airplanes as they jettison the fuel in emergency landings than come off of offshore platforms."
Beck: There's "more natural seepage on the ocean floor than there is from spills from offshore." On the June 18, 2008, edition of his CNN Headline News show, Beck interview musician Trace Adkins, who said that "All the six years that I worked offshore on a drilling rig, I can't recall a time whenever, you know, there was some significant spill of anything." Beck said that "I read someplace -- and you might even know this -- that there is more natural seepage on the ocean floor than there is from spills from offshore."
Cavuto hid lobbying ties of offshore drilling proponent Lott
Cavuto let Lott tout offshore drilling without disclosing he's an energy lobbyist. On the March 11, 2009, edition of Fox News' Your World, Neil Cavuto hosted former Sen. Trent Lott (R-MS) to discuss energy policy, during which Lott touted offshore drilling. But Cavuto failed to disclose that Lott is now a lobbyist for major energy companies.
Saturday, May 29, 2010
Bobby Jindal and the two-faces of the modern Republican Party
Original Link: http://natskinner.wordpress.com/2010/05/24/bobby-jindal-and-the-two-faces-of-the-modern-republican-party/
Today on NPR I was listening to Louisiana Governor Bobby Jindal talking about how the Federal Government hadn’t done enough to protect Louisiana’s coastline. Since this seems to be a continuing trend of Republicans and conservatives, I thought I would do my homework about what Bobby Jindal’s stance was about drilling, oil, energy, and the Feds.
To make sure that I heard things correctly, I pulled up several other sources to verify that I heard this staunch anti-big-government Republican say that the Feds had not responded quickly or adequately enough. From Reuters: “The U.S. Coast Guard and BP failed to take decisions quickly enough and delayed supplying necessary clean-up equipment even as oil washes onto the state’s fragile marshland, said Governor Bobby Jindal.”
In his 2009 GOP response to Obama’s speech: “… we need urgent action to keep energy prices down” including “increase[d] drilling for oil and gas here at home.” He also believes that “Democratic leaders in Washington – they place their hope in federal government. We [the Republicans] place our hope in you, the American people. …. We oppose the National Democratic view that says the way to strengthen our country is to increase dependence on government.”
Digging even a little bit farther back, shows that he was a sponsor of the “Deep Ocean Energy Resources Act (HR 4761)” which was a bill to eliminate the moratorium on offshore oil and gas drilling. That’s correct, Governor (then-Representative) Jindal supported offshore drilling. The same type of offshore drilling that is now polluting Louisiana coastlines.
Now he is crying out for the US Army Corps of Engineers to build a series of sand berms across the coastline to protect it from oil and hurricanes. Note: That is the US Army, not the Louisiana National Guard. (Yes, that is a cheap shot, because the Army Corps of Engineers has jurisdiction, not the Louisiana National Guard… but it helps prove the point.)
Other prominent Louisiana politicians also have their hands in dirty oil money, primarily Republicans, with one Democratic standout: Representative Charlie Melancon.
For once I wish that the same people who beg for federal assistance would put their money where their mouth is: If you don’t want government assistance, then stop asking for it when things go wrong. Research done by the Tax Foundation also supports this. For every $1.00 of tax money sent to the feds, Louisiana received $1.45 back.
So, I would like to put out a proposal to the Republican party: Why don’t you make full disclosure over just how much federal money you have turned down, how many ear-marked bills you culled for your own district, and put the money where your mouth is. You ask for offshore drilling and little regulation, and you’ve gotten it. I just wonder how many people affected by the spill were there chanting “Drill, Baby, Drill” during the last presidential election…
Today on NPR I was listening to Louisiana Governor Bobby Jindal talking about how the Federal Government hadn’t done enough to protect Louisiana’s coastline. Since this seems to be a continuing trend of Republicans and conservatives, I thought I would do my homework about what Bobby Jindal’s stance was about drilling, oil, energy, and the Feds.
To make sure that I heard things correctly, I pulled up several other sources to verify that I heard this staunch anti-big-government Republican say that the Feds had not responded quickly or adequately enough. From Reuters: “The U.S. Coast Guard and BP failed to take decisions quickly enough and delayed supplying necessary clean-up equipment even as oil washes onto the state’s fragile marshland, said Governor Bobby Jindal.”
In his 2009 GOP response to Obama’s speech: “… we need urgent action to keep energy prices down” including “increase[d] drilling for oil and gas here at home.” He also believes that “Democratic leaders in Washington – they place their hope in federal government. We [the Republicans] place our hope in you, the American people. …. We oppose the National Democratic view that says the way to strengthen our country is to increase dependence on government.”
Digging even a little bit farther back, shows that he was a sponsor of the “Deep Ocean Energy Resources Act (HR 4761)” which was a bill to eliminate the moratorium on offshore oil and gas drilling. That’s correct, Governor (then-Representative) Jindal supported offshore drilling. The same type of offshore drilling that is now polluting Louisiana coastlines.
Now he is crying out for the US Army Corps of Engineers to build a series of sand berms across the coastline to protect it from oil and hurricanes. Note: That is the US Army, not the Louisiana National Guard. (Yes, that is a cheap shot, because the Army Corps of Engineers has jurisdiction, not the Louisiana National Guard… but it helps prove the point.)
Other prominent Louisiana politicians also have their hands in dirty oil money, primarily Republicans, with one Democratic standout: Representative Charlie Melancon.
For once I wish that the same people who beg for federal assistance would put their money where their mouth is: If you don’t want government assistance, then stop asking for it when things go wrong. Research done by the Tax Foundation also supports this. For every $1.00 of tax money sent to the feds, Louisiana received $1.45 back.
So, I would like to put out a proposal to the Republican party: Why don’t you make full disclosure over just how much federal money you have turned down, how many ear-marked bills you culled for your own district, and put the money where your mouth is. You ask for offshore drilling and little regulation, and you’ve gotten it. I just wonder how many people affected by the spill were there chanting “Drill, Baby, Drill” during the last presidential election…
Friday, May 28, 2010
GOP Wants a Country by Corporations for Corporations
Original Link: http://www.ourfuture.org/blog-entry/2010052127/gop-wants-country-corporations-corporations-0
By Leo Gerard
Tea Party darling and Republican U.S. Senate nominee Rand Paul spoke last week like the political novice he is – revealing unfiltered GOP “truths.”
First he informed MSNBC talk show host Rachel Maddow that government should not be able to force businesses to serve black people. Corporate desire to discriminate should trump the civil rights of black people, Muslims, Jews, Catholics, and pants-wearing women, according to this Republican candidate, who has since rushed to assure everyone that he personally is not a bigot.
Rand Paul followed up the assertion of corporate-privilege-over-human-rights with two more Republican tenet revelations. First he called the Obama administration “un-American” for holding the corporation BP accountable for the explosion on the Deepwater Horizon oil rig that killed 11 workers and devastated the ecology of the Gulf of Mexico. Then Rand Paul added that society should refrain from the “blame game” in the case of another corporation, Massey Energy, the owner of the West Virginia mine that blew up killing 29 workers. “We had a mining accident that was very tragic,” he said, “Then we come in, and it’s always someone’s fault. Maybe sometimes accidents happen.”
The Republican candidate who openly espoused these views was embraced last Saturday by U.S. Senate Minority Leader Mitch McConnell at a rally in Frankfort, Ky. And during the primary, former GOP vice presidential candidate Sarah Palin and Republican senators Jim DeMint of South Carolina and Jim Bunning of Kentucky actively supported Rand Paul. He simply said what Republicans believe – that this country should focus on promoting corporations and those corporations should have privileges, but not responsibilities. To the GOP, the U.S.A. should be a country of corporations, by corporations, for corporations.
People, by contrast, are trifling to the GOP. In the past couple of weeks, the GOP has made its position on humans clear by trying to end an emergency fund that will create 186,000 subsidized jobs this year for poor people and by blocking an extension of unemployment insurance for those thrown out of work during the worst recession since the Great Depression, a downturn caused by reckless Wall Street corporations. Following the lead of Bunning, who delayed an extension in February, Republican Sen. Judd Gregg of New Hampshire said the unemployed shouldn’t receive the insurance because it “encourages people to, rather than go out and look for work, to stay on unemployment.”
While attempting to deny relief to the desperate, Republicans have also blocked efforts to force oil corporations to assume full liability for catastrophic spills – like the BP disaster in the Gulf. If the oil corporations – which vehemently oppose an increase in their liability -- don’t pay for environmental clean up, then taxpayers – including the unemployed – will get the bill. Still, House Minority Leader John Boehner of Ohio opposed raising the laughably-low liability cap of $75 million, and Republicans James Inhofe of Oklahoma and Lisa Murkowski of Alaska have blocked efforts to lift the cap in the Senate.
Like Rand Paul, Boehner didn’t want to assign culpability to BP. Boehner said, “I think it’s important that we get to the bottom, get to the facts, before we begin to point fingers.”
Murkowski and Inhofe have a financial interest in kissing up to Big Oil. Those corporations have handed them buckets of bucks. According to the nonpartisan OpenSecrets.org, the oil and gas lobby has given Inhofe $433,950 over the past five years. That lobby gave Markowski $240,326 in just the past year. That is 15 times what she got from oil and gas just two years ago, according to the Center for Responsive Politics. A Murkowski spokesman said the senator’s connection to oil and gas corporations is “the same relationship she has to all constituents.”
So, to Republican Murkowski, oil and gas corporations are constituents, exactly like the actual humans who live in her district. That characterization of corporations is consistent with the recent U.S. Supreme Court decision, written by its Republican-selected, right-wing majority, giving corporations the same rights as humans under the First Amendment of the U.S. Constitution, a ruling that will enable corporations to spend virtually unlimited money to influence elections.
Usually such rights come with responsibilities. But Republicans, by impeding an increase in the liability cap, have made clear their opposition to oil and gas corporations bearing the responsibility of paying all costs when their errors kill workers and destroy the environment. Not only that, under the guise of government downsizing, they have thwarted enforcement of regulations intended to prevent deaths and catastrophes. The Bush administration, for example, cut funds for the Occupational Safety and Health Administration (OSHA).
Also during the Bush administration, according to a Department of Interior inspector general report released this week, federal regulators responsible for oversight of drilling in the Gulf of Mexico allowed corporate officials to fill out inspection reports in pencil, then traced over those marks in pen and submitted them. That “self-regulation” is consistent with the Republican contention that the “invisible hand” of the market will adequately smack down bad corporate behavior.
Rand Paul reiterated the Republican policy on government during his rally with McConnell last Saturday. He said, “What unifies Republicans is a belief that the Constitution restrains the size and scope of government.” Louisiana Gov. Bobby Jindal, who Republicans chose to respond in February, 2009 to President Obama’s first address to a joint session of Congress, told that national TV audience he opposed “big government,” like all good Republicans do.
Also in that speech, Jindal joined the Republican chorus of “Drill Baby Drill,” calling for increased domestic oil and gas drilling. Now he’s got the ugly results of drilling-gone-wrong coating his coast.
Since the spill, Jindal has petitioned the federal government – yes, the very government Republicans want to shrivel – to solve his state’s problems. He asked Obama to pay for 6,000 National Guardsmen for 90 days to help clean up. He wants the U.S. Department of Commerce to provide financial help to fishermen, the Environmental Protection Agency to test air quality, and the U.S. Business Administration to suspend loan repayments for small businesses affected by the gushing oil.
The Republican policy, apparently, is “Drill Baby Drill;” taxpayers can always clean the “accidental” spill. In the Republican world, corporations have the right to do anything they want, but no responsibility to do it right or restore what they wreck. Republicans hold the unemployed accountable – but not corporations.
By Leo Gerard
Tea Party darling and Republican U.S. Senate nominee Rand Paul spoke last week like the political novice he is – revealing unfiltered GOP “truths.”
First he informed MSNBC talk show host Rachel Maddow that government should not be able to force businesses to serve black people. Corporate desire to discriminate should trump the civil rights of black people, Muslims, Jews, Catholics, and pants-wearing women, according to this Republican candidate, who has since rushed to assure everyone that he personally is not a bigot.
Rand Paul followed up the assertion of corporate-privilege-over-human-rights with two more Republican tenet revelations. First he called the Obama administration “un-American” for holding the corporation BP accountable for the explosion on the Deepwater Horizon oil rig that killed 11 workers and devastated the ecology of the Gulf of Mexico. Then Rand Paul added that society should refrain from the “blame game” in the case of another corporation, Massey Energy, the owner of the West Virginia mine that blew up killing 29 workers. “We had a mining accident that was very tragic,” he said, “Then we come in, and it’s always someone’s fault. Maybe sometimes accidents happen.”
The Republican candidate who openly espoused these views was embraced last Saturday by U.S. Senate Minority Leader Mitch McConnell at a rally in Frankfort, Ky. And during the primary, former GOP vice presidential candidate Sarah Palin and Republican senators Jim DeMint of South Carolina and Jim Bunning of Kentucky actively supported Rand Paul. He simply said what Republicans believe – that this country should focus on promoting corporations and those corporations should have privileges, but not responsibilities. To the GOP, the U.S.A. should be a country of corporations, by corporations, for corporations.
People, by contrast, are trifling to the GOP. In the past couple of weeks, the GOP has made its position on humans clear by trying to end an emergency fund that will create 186,000 subsidized jobs this year for poor people and by blocking an extension of unemployment insurance for those thrown out of work during the worst recession since the Great Depression, a downturn caused by reckless Wall Street corporations. Following the lead of Bunning, who delayed an extension in February, Republican Sen. Judd Gregg of New Hampshire said the unemployed shouldn’t receive the insurance because it “encourages people to, rather than go out and look for work, to stay on unemployment.”
While attempting to deny relief to the desperate, Republicans have also blocked efforts to force oil corporations to assume full liability for catastrophic spills – like the BP disaster in the Gulf. If the oil corporations – which vehemently oppose an increase in their liability -- don’t pay for environmental clean up, then taxpayers – including the unemployed – will get the bill. Still, House Minority Leader John Boehner of Ohio opposed raising the laughably-low liability cap of $75 million, and Republicans James Inhofe of Oklahoma and Lisa Murkowski of Alaska have blocked efforts to lift the cap in the Senate.
Like Rand Paul, Boehner didn’t want to assign culpability to BP. Boehner said, “I think it’s important that we get to the bottom, get to the facts, before we begin to point fingers.”
Murkowski and Inhofe have a financial interest in kissing up to Big Oil. Those corporations have handed them buckets of bucks. According to the nonpartisan OpenSecrets.org, the oil and gas lobby has given Inhofe $433,950 over the past five years. That lobby gave Markowski $240,326 in just the past year. That is 15 times what she got from oil and gas just two years ago, according to the Center for Responsive Politics. A Murkowski spokesman said the senator’s connection to oil and gas corporations is “the same relationship she has to all constituents.”
So, to Republican Murkowski, oil and gas corporations are constituents, exactly like the actual humans who live in her district. That characterization of corporations is consistent with the recent U.S. Supreme Court decision, written by its Republican-selected, right-wing majority, giving corporations the same rights as humans under the First Amendment of the U.S. Constitution, a ruling that will enable corporations to spend virtually unlimited money to influence elections.
Usually such rights come with responsibilities. But Republicans, by impeding an increase in the liability cap, have made clear their opposition to oil and gas corporations bearing the responsibility of paying all costs when their errors kill workers and destroy the environment. Not only that, under the guise of government downsizing, they have thwarted enforcement of regulations intended to prevent deaths and catastrophes. The Bush administration, for example, cut funds for the Occupational Safety and Health Administration (OSHA).
Also during the Bush administration, according to a Department of Interior inspector general report released this week, federal regulators responsible for oversight of drilling in the Gulf of Mexico allowed corporate officials to fill out inspection reports in pencil, then traced over those marks in pen and submitted them. That “self-regulation” is consistent with the Republican contention that the “invisible hand” of the market will adequately smack down bad corporate behavior.
Rand Paul reiterated the Republican policy on government during his rally with McConnell last Saturday. He said, “What unifies Republicans is a belief that the Constitution restrains the size and scope of government.” Louisiana Gov. Bobby Jindal, who Republicans chose to respond in February, 2009 to President Obama’s first address to a joint session of Congress, told that national TV audience he opposed “big government,” like all good Republicans do.
Also in that speech, Jindal joined the Republican chorus of “Drill Baby Drill,” calling for increased domestic oil and gas drilling. Now he’s got the ugly results of drilling-gone-wrong coating his coast.
Since the spill, Jindal has petitioned the federal government – yes, the very government Republicans want to shrivel – to solve his state’s problems. He asked Obama to pay for 6,000 National Guardsmen for 90 days to help clean up. He wants the U.S. Department of Commerce to provide financial help to fishermen, the Environmental Protection Agency to test air quality, and the U.S. Business Administration to suspend loan repayments for small businesses affected by the gushing oil.
The Republican policy, apparently, is “Drill Baby Drill;” taxpayers can always clean the “accidental” spill. In the Republican world, corporations have the right to do anything they want, but no responsibility to do it right or restore what they wreck. Republicans hold the unemployed accountable – but not corporations.
The Old Enemies
Original Link: http://www.nytimes.com/2010/05/24/opinion/24krugman.html
By PAUL KRUGMAN
So here’s how it is: They’re as mad as hell, and they’re not going to take this anymore. Am I talking about the Tea Partiers? No, I’m talking about the corporations.
Much reporting on opposition to the Obama administration portrays it as a sort of populist uprising. Yet the antics of the socialism-and-death-panels crowd are only part of the story of anti-Obamaism, and arguably the less important part. If you really want to know what’s going on, watch the corporations.
How can you do that? Follow the money — donations by corporate political action committees.
Look, for example, at the campaign contributions of commercial banks — traditionally Republican-leaning, but only mildly so. So far this year, according to The Washington Post, 63 percent of spending by banks’ corporate PACs has gone to Republicans, up from 53 percent last year. Securities and investment firms, traditionally Democratic-leaning, are now giving more money to Republicans. And oil and gas companies, always Republican-leaning, have gone all out, bestowing 76 percent of their largess on the G.O.P.
These are extraordinary numbers given the normal tendency of corporate money to flow to the party in power. Corporate America, however, really, truly hates the current administration. Wall Street, for example, is in “a state of bitter, seething, hysterical fury” toward the president, writes John Heilemann of New York magazine. What’s going on?
One answer is taxes — not so much on corporations themselves as on the people who run them. The Obama administration plans to raise tax rates on upper brackets back to Clinton-era levels. Furthermore, health reform will in part be paid for with surtaxes on high-income individuals. All this will amount to a significant financial hit to C.E.O.’s, investment bankers and other masters of the universe.
Now, don’t cry for these people: they’ll still be doing extremely well, and by and large they’ll be paying little more as a percentage of their income than they did in the 1990s. Yet the fact that the tax increases they’re facing are reasonable doesn’t stop them from being very, very angry.
Nor are taxes the whole story.
Many Obama supporters have been disappointed by what they see as the administration’s mildness on regulatory issues — its embrace of limited financial reform that doesn’t break up the biggest banks, its support for offshore drilling, and so on. Yet corporate interests are balking at even modest changes from the permissiveness of the Bush era.
From the outside, this rage against regulation seems bizarre. I mean, what did they expect? The financial industry, in particular, ran wild under deregulation, eventually bringing on a crisis that has left 15 million Americans unemployed, and required large-scale taxpayer-financed bailouts to avoid an even worse outcome. Did Wall Street expect to emerge from all that without facing some new restrictions? Apparently it did.
So what President Obama and his party now face isn’t just, or even mainly, an opposition grounded in right-wing populism. For grass-roots anger is being channeled and exploited by corporate interests, which will be the big winners if the G.O.P. does well in November.
If this sounds familiar, it should: it’s the same formula the right has been using for a generation. Use identity politics to whip up the base; then, when the election is over, give priority to the concerns of your corporate donors. Run as the candidate of “real Americans,” not those soft-on-terror East coast liberals; then, once you’ve won, declare that you have a mandate to privatize Social Security. It comes as no surprise to learn that American Crossroads, a new organization whose goal is to deploy large amounts of corporate cash on behalf of Republican candidates, is the brainchild of none other than Karl Rove.
But won’t the grass-roots rebel at being used? Don’t count on it. Last week Rand Paul, the Tea Party darling who is now the Republican nominee for senator from Kentucky, declared that the president’s criticism of BP over the disastrous oil spill in the gulf is “un-American,” that “sometimes accidents happen.” The mood on the right may be populist, but it’s a kind of populism that’s remarkably sympathetic to big corporations.
So where does that leave the president and his party? Mr. Obama wanted to transcend partisanship. Instead, however, he finds himself very much in the position Franklin Roosevelt described in a famous 1936 speech, struggling with “the old enemies of peace — business and financial monopoly, speculation, reckless banking, class antagonism, sectionalism, war profiteering.”
And that’s not necessarily a bad thing. Roosevelt turned corporate opposition into a badge of honor: “I welcome their hatred,” he declared. It’s time for President Obama to find his inner F.D.R., and do the same.
By PAUL KRUGMAN
So here’s how it is: They’re as mad as hell, and they’re not going to take this anymore. Am I talking about the Tea Partiers? No, I’m talking about the corporations.
Much reporting on opposition to the Obama administration portrays it as a sort of populist uprising. Yet the antics of the socialism-and-death-panels crowd are only part of the story of anti-Obamaism, and arguably the less important part. If you really want to know what’s going on, watch the corporations.
How can you do that? Follow the money — donations by corporate political action committees.
Look, for example, at the campaign contributions of commercial banks — traditionally Republican-leaning, but only mildly so. So far this year, according to The Washington Post, 63 percent of spending by banks’ corporate PACs has gone to Republicans, up from 53 percent last year. Securities and investment firms, traditionally Democratic-leaning, are now giving more money to Republicans. And oil and gas companies, always Republican-leaning, have gone all out, bestowing 76 percent of their largess on the G.O.P.
These are extraordinary numbers given the normal tendency of corporate money to flow to the party in power. Corporate America, however, really, truly hates the current administration. Wall Street, for example, is in “a state of bitter, seething, hysterical fury” toward the president, writes John Heilemann of New York magazine. What’s going on?
One answer is taxes — not so much on corporations themselves as on the people who run them. The Obama administration plans to raise tax rates on upper brackets back to Clinton-era levels. Furthermore, health reform will in part be paid for with surtaxes on high-income individuals. All this will amount to a significant financial hit to C.E.O.’s, investment bankers and other masters of the universe.
Now, don’t cry for these people: they’ll still be doing extremely well, and by and large they’ll be paying little more as a percentage of their income than they did in the 1990s. Yet the fact that the tax increases they’re facing are reasonable doesn’t stop them from being very, very angry.
Nor are taxes the whole story.
Many Obama supporters have been disappointed by what they see as the administration’s mildness on regulatory issues — its embrace of limited financial reform that doesn’t break up the biggest banks, its support for offshore drilling, and so on. Yet corporate interests are balking at even modest changes from the permissiveness of the Bush era.
From the outside, this rage against regulation seems bizarre. I mean, what did they expect? The financial industry, in particular, ran wild under deregulation, eventually bringing on a crisis that has left 15 million Americans unemployed, and required large-scale taxpayer-financed bailouts to avoid an even worse outcome. Did Wall Street expect to emerge from all that without facing some new restrictions? Apparently it did.
So what President Obama and his party now face isn’t just, or even mainly, an opposition grounded in right-wing populism. For grass-roots anger is being channeled and exploited by corporate interests, which will be the big winners if the G.O.P. does well in November.
If this sounds familiar, it should: it’s the same formula the right has been using for a generation. Use identity politics to whip up the base; then, when the election is over, give priority to the concerns of your corporate donors. Run as the candidate of “real Americans,” not those soft-on-terror East coast liberals; then, once you’ve won, declare that you have a mandate to privatize Social Security. It comes as no surprise to learn that American Crossroads, a new organization whose goal is to deploy large amounts of corporate cash on behalf of Republican candidates, is the brainchild of none other than Karl Rove.
But won’t the grass-roots rebel at being used? Don’t count on it. Last week Rand Paul, the Tea Party darling who is now the Republican nominee for senator from Kentucky, declared that the president’s criticism of BP over the disastrous oil spill in the gulf is “un-American,” that “sometimes accidents happen.” The mood on the right may be populist, but it’s a kind of populism that’s remarkably sympathetic to big corporations.
So where does that leave the president and his party? Mr. Obama wanted to transcend partisanship. Instead, however, he finds himself very much in the position Franklin Roosevelt described in a famous 1936 speech, struggling with “the old enemies of peace — business and financial monopoly, speculation, reckless banking, class antagonism, sectionalism, war profiteering.”
And that’s not necessarily a bad thing. Roosevelt turned corporate opposition into a badge of honor: “I welcome their hatred,” he declared. It’s time for President Obama to find his inner F.D.R., and do the same.
Sunday, May 23, 2010
Corporate PACs betting on Republicans to regain control of Congress
Original Link: http://www.washingtonpost.com/wp-dyn/content/article/2010/05/21/AR2010052102513.html
By T.W. Farnam and Carol D. Leonnig
Corporate America is gambling on the minority in its political giving this year, assuming that Republicans will win big in the November midterm elections, an analysis of campaign finance reports shows.
The pattern represents a distinct change from a year ago, when President Obama was sworn into office. Back then, corporate political action committees made a shift to the Democrats, giving 58 percent of their donations to the party. So far this year, 48 percent of the contributions from big business are going to the Democrats.
The shift in political giving represents a calculated gamble by lobbyists and executives overseeing corporate largesse that the Republican Party may regain control of Congress, say GOP fundraisers and political consultants.
Many other political winds have shifted behind Republicans in recent months, but the swing in money from corporate PACs is unusual. Corporations often give campaign contributions while seeking access and favor with incumbent lawmakers in position to shape legislation -- meaning they gravitate to the party in power.
The last time corporate PACs made such a dramatic shift to the Republicans was in 1995, after the GOP's rout of the Democrats in the 1994 midterms. This time, corporations have switched sides before the election.
The change comes as top Republican lawmakers appeal more directly to business leaders, putting them on notice that the GOP is keeping track of the corporate donations ledger and will remember who stood by the party.
As part of an effort dubbed "Sell the Fight," House Republican leaders have met privately with corporate executives and lobbyists to argue that their giving has tilted too far toward Democrats and that they need to steer more money to industry-friendly GOP candidates in key races in 2010.
"These corporate leaders and lobbyists have got interests and clients they need to look out for, and they are reading the tea leaves just like everyone else," said Rep. Greg Walden (Ore.), the deputy chair of the National Republican Congressional Committee, who has made several private pitches to corporate PAC leaders. "They see what's happening . . . and they don't want to get cut short."
The fundraising efforts of Republican lawmakers mirror those used after the party gained control of both houses of Congress in the 1994 Republican Revolution. Party leaders, especially then-House Majority Whip Tom DeLay (Tex.), used their new positions in power to pull in corporate checks. DeLay kept a list of lobbyists categorized as "friendly" and "unfriendly," based on campaign contributions.
Democrats have lost ground in several fundraising categories this year, after dominating in 2009. In key Senate and House races and among the political party committees, first-quarter results showed Republicans gaining steam. Corporate PACs represent a small piece of overall political fundraising but often the one most closely associated with special interests.
The money boost for the GOP follows a similar shift in enthusiasm among voters. A Wall Street Journal/NBC poll released May 13 found voters evenly split on which party they preferred to have running Congress. But among those who said they were very interested in the midterm elections, 56 percent said they supported Republicans, while 36 percent chose Democrats.
The health industry is the most striking example of the corporate shift to the GOP. Last year, the PACS of health and medical companies gave Democrats 61 percent of their $31.5 million in political contributions. But in the first quarter of this year, they gave $3.9 million to each party. This came just as the fate of health-care legislation appeared uncertain because of Republican opposition and the surprise loss of the Democrats' Massachusetts Senate seat. The law was approved March 21 in a dramatic House vote on a Senate bill.
During those three critical months of health-care debate, four of the top five House recipients of health-care corporate PAC money were Republicans. These corporations were the most generous to Rep. Dave Camp (R-Mich.), who is now the ranking minority member of the House Ways and Means Committee and could chair that panel in a GOP takeover. He collected $110,000, double the amount that he received from industry PACs in the previous quarter.
Surprisingly, drugmaker PACs also moved increasingly toward Republicans in the early part of this year, despite the industry's public support for the bill those Republicans were opposing. On average, the pharmaceutical PACs gave more to Republican House members who voted against the bill ($2,300 per member) than to House Democrats who voted for it ($1,800). Democrats voting against the bill got the most on average -- $2,600.
Health-care experts on congressional committees say drugmakers watch poll numbers and are preparing for the possibility of GOP wins and newfound power. The industry has a strong financial stake to protect: It plans to fight threatened government-negotiated controls on drug prices and other looming overhauls. Some specific company PACs made dramatic swings in giving. Pfizer Inc., a major drug manufacturer, gave $340,000 to Democrats in 2009, or about 55 percent of its total giving. In the first quarter of this year, as the health-care bill came up for final vote, the company shifted its giving to Republicans, giving them $114,000, or 62 percent of its total. Pfizer's PAC representative did not respond to requests for comment.
The Washington Post analysis used campaign finance data from the Federal Election Commission and an industry breakdown from the Center for Responsive Politics.
Under campaign finance law, corporations are not allowed to give directly to candidates, but they may create a fund to channel donations from their employees. The corporations' top executives and lobbyists control the direction of the money and often use it to attend fundraisers with lawmakers.
In March, Walden met with 80 corporate PAC leaders at the Capitol Hill Club to appeal for more money. In that pitch and others, Walden said that he makes no threats for failing to donate but candidly explains that "we're evaluating giving patterns." He said he showcases the GOP's industry-friendly candidates and urges PAC leaders to cut back on their giving to Democrats by spreading the wealth to GOP contenders.
"I tell them, 'I understand you have to give money to Democrats. But I want to be back in the majority,' " Walden said. " 'You don't have to give [this Democrat] $5,000. Give them $2,000. You can give $3,000 elsewhere. Now let me show you some open seats where you can make an investment in a Republican candidate you will like.' "
By T.W. Farnam and Carol D. Leonnig
Corporate America is gambling on the minority in its political giving this year, assuming that Republicans will win big in the November midterm elections, an analysis of campaign finance reports shows.
The pattern represents a distinct change from a year ago, when President Obama was sworn into office. Back then, corporate political action committees made a shift to the Democrats, giving 58 percent of their donations to the party. So far this year, 48 percent of the contributions from big business are going to the Democrats.
The shift in political giving represents a calculated gamble by lobbyists and executives overseeing corporate largesse that the Republican Party may regain control of Congress, say GOP fundraisers and political consultants.
Many other political winds have shifted behind Republicans in recent months, but the swing in money from corporate PACs is unusual. Corporations often give campaign contributions while seeking access and favor with incumbent lawmakers in position to shape legislation -- meaning they gravitate to the party in power.
The last time corporate PACs made such a dramatic shift to the Republicans was in 1995, after the GOP's rout of the Democrats in the 1994 midterms. This time, corporations have switched sides before the election.
The change comes as top Republican lawmakers appeal more directly to business leaders, putting them on notice that the GOP is keeping track of the corporate donations ledger and will remember who stood by the party.
As part of an effort dubbed "Sell the Fight," House Republican leaders have met privately with corporate executives and lobbyists to argue that their giving has tilted too far toward Democrats and that they need to steer more money to industry-friendly GOP candidates in key races in 2010.
"These corporate leaders and lobbyists have got interests and clients they need to look out for, and they are reading the tea leaves just like everyone else," said Rep. Greg Walden (Ore.), the deputy chair of the National Republican Congressional Committee, who has made several private pitches to corporate PAC leaders. "They see what's happening . . . and they don't want to get cut short."
The fundraising efforts of Republican lawmakers mirror those used after the party gained control of both houses of Congress in the 1994 Republican Revolution. Party leaders, especially then-House Majority Whip Tom DeLay (Tex.), used their new positions in power to pull in corporate checks. DeLay kept a list of lobbyists categorized as "friendly" and "unfriendly," based on campaign contributions.
Democrats have lost ground in several fundraising categories this year, after dominating in 2009. In key Senate and House races and among the political party committees, first-quarter results showed Republicans gaining steam. Corporate PACs represent a small piece of overall political fundraising but often the one most closely associated with special interests.
The money boost for the GOP follows a similar shift in enthusiasm among voters. A Wall Street Journal/NBC poll released May 13 found voters evenly split on which party they preferred to have running Congress. But among those who said they were very interested in the midterm elections, 56 percent said they supported Republicans, while 36 percent chose Democrats.
The health industry is the most striking example of the corporate shift to the GOP. Last year, the PACS of health and medical companies gave Democrats 61 percent of their $31.5 million in political contributions. But in the first quarter of this year, they gave $3.9 million to each party. This came just as the fate of health-care legislation appeared uncertain because of Republican opposition and the surprise loss of the Democrats' Massachusetts Senate seat. The law was approved March 21 in a dramatic House vote on a Senate bill.
During those three critical months of health-care debate, four of the top five House recipients of health-care corporate PAC money were Republicans. These corporations were the most generous to Rep. Dave Camp (R-Mich.), who is now the ranking minority member of the House Ways and Means Committee and could chair that panel in a GOP takeover. He collected $110,000, double the amount that he received from industry PACs in the previous quarter.
Surprisingly, drugmaker PACs also moved increasingly toward Republicans in the early part of this year, despite the industry's public support for the bill those Republicans were opposing. On average, the pharmaceutical PACs gave more to Republican House members who voted against the bill ($2,300 per member) than to House Democrats who voted for it ($1,800). Democrats voting against the bill got the most on average -- $2,600.
Health-care experts on congressional committees say drugmakers watch poll numbers and are preparing for the possibility of GOP wins and newfound power. The industry has a strong financial stake to protect: It plans to fight threatened government-negotiated controls on drug prices and other looming overhauls. Some specific company PACs made dramatic swings in giving. Pfizer Inc., a major drug manufacturer, gave $340,000 to Democrats in 2009, or about 55 percent of its total giving. In the first quarter of this year, as the health-care bill came up for final vote, the company shifted its giving to Republicans, giving them $114,000, or 62 percent of its total. Pfizer's PAC representative did not respond to requests for comment.
The Washington Post analysis used campaign finance data from the Federal Election Commission and an industry breakdown from the Center for Responsive Politics.
Under campaign finance law, corporations are not allowed to give directly to candidates, but they may create a fund to channel donations from their employees. The corporations' top executives and lobbyists control the direction of the money and often use it to attend fundraisers with lawmakers.
In March, Walden met with 80 corporate PAC leaders at the Capitol Hill Club to appeal for more money. In that pitch and others, Walden said that he makes no threats for failing to donate but candidly explains that "we're evaluating giving patterns." He said he showcases the GOP's industry-friendly candidates and urges PAC leaders to cut back on their giving to Democrats by spreading the wealth to GOP contenders.
"I tell them, 'I understand you have to give money to Democrats. But I want to be back in the majority,' " Walden said. " 'You don't have to give [this Democrat] $5,000. Give them $2,000. You can give $3,000 elsewhere. Now let me show you some open seats where you can make an investment in a Republican candidate you will like.' "
Marching on K Street to Transform Wall Street
Original Link: http://www.huffingtonpost.com/john-cavanagh/marching-on-k-street-to-t_b_578283.html
By John Cavanagh
On May 17, I will join thousands of others in a creative protest on a street that most Americans don't know exists. It is "K Street" in Washington, and it is home to thousands of corporate lobbyists who get paid six figures to buy the votes in Congress. K Street is Washington's counterpart to Wall Street, and powerful men on both streets have been working hard, in tandem, to preserve our casino economy, our plunder economy, and our military economy.
The rally, led by Jobs with Justice, National People's Action, the AFL-CIO, and SEIU, comes at a critical moment. The Senate is headed towards a vote on a financial reform bill to put some checks and balances on Wall Street. The K Street lobby firms have spent hundreds of millions of dollars to gut the bill.
These are the same shady characters who pushed Congress to strip away the sensible financial regulations put in place after the crash of 1929, opening the door to the gambling insanity that caused the 2008 crash. Then they had the nerve to go back to Capitol Hill and demand trillions of taxpayer dollars to prop up the "too big too fail" banks. Today, pumped full of public money, these financial giants are now bigger than ever and handing out fat CEO paychecks.
With public anger at its height, this is the moment to shrink Wall Street and restore it to its proper role in serving the financial needs of small businesses and ordinary Americans. What we don't need is to "fix" Wall Street so that it can go back to business as usual. As David Korten puts it, policymakers need to be asking the fundamental question of: "How do we create a financial services sector that directs money where it is needed: toward creating living wage jobs that provide essential goods and services for all Americans in ways consistent with a healthy environment?"
The pending financial reform bill would get us only partway towards this goal. And it's too early to tell how successful the K Street lobby will be in blocking or gutting even these modest reforms.
Fortunately, public anger does seem to be having some impact in countering Wall Street's limitless lobbying resources. Some amendments to curb Wall Street excess appear to be gaining ground, while others are being defeated. Here are some highlights:
Financial Secrecy: Socialist Senator Bernie Sanders led the way on an amendment to force the Federal Reserve to reveal which banks received more than $2 trillion in emergency aid during the financial crisis (Sander's amendment passed 96-0). The legislation would also force most derivatives trading out of the shadows and onto open clearinghouses and exchanges.
Curbing the Casino: On the top of the K Street hit list is an amendment to force banks to spin off units that gamble in the dangerous derivatives that helped send the economy into a tailspin. And one of the great reforms of the Depression era is back on the table: the 1933 Glass-Steagall reform to separate banking functions between commercial and investment banking. It helped stabilize the U.S. financial system and keep alive thousands of small banks until its repeal in 1999. A transformed Wall Street would need to restore this sensible regulation.
Consumer protection: A new Consumer Financial Protection Agency would help protect ordinary Americans from the worst abuses of greedy financiers, including predatory lenders and fraudsters.
What's missing?
Once this round of financial reform is over, there will be much unfinished business to do if we are going to shut down the worst parts of Wall Street and transform the rest so that we can have a financial system that supports an economy centered around vibrant, green Main Streets.
Two key battles to come:
Breaking up the banks: Last week, an amendment to limit bank size, led by fair trade champion Senator Sherrod Brown, was defeated. As long as we have banks that are "too big too fail," taxpayers will always have to face the prospect of funding future bailouts. One way that people are already working to undercut the power of the big banks is through a campaign launched by Arianna Huffington and others to "Move Your Money." Thousands have answer the call to transfer their personal funds from Wall Street banks to local banks.
Taxing the speculators: There is growing momentum in the United States and around the world behind proposals to place tiny taxes (not more than 0.25%) on trades of derivatives, stocks, and currencies. This "financial speculation tax" would both put a damper on speculation and it would raise hundreds of billions of dollars that could go to green jobs, health care, and climate finance. My organization, the Institute for Policy Studies, has joined with allies around the world to press this issue at the upcoming G-20 meeting next month in Canada.
I'm looking forward to joining with the throngs on K Street, carrying our signs with the slogans: "Tax Speculators: Shut down the Wall Street Casino." This is the struggle of our lifetimes and only by bringing the message to the streets can we rein in the corporations and banks that threaten our democracy and our well being.
If you can't make it to the march, encourage a change in the Wall Street banks by supporting the Move Your Money movement
By John Cavanagh
On May 17, I will join thousands of others in a creative protest on a street that most Americans don't know exists. It is "K Street" in Washington, and it is home to thousands of corporate lobbyists who get paid six figures to buy the votes in Congress. K Street is Washington's counterpart to Wall Street, and powerful men on both streets have been working hard, in tandem, to preserve our casino economy, our plunder economy, and our military economy.
The rally, led by Jobs with Justice, National People's Action, the AFL-CIO, and SEIU, comes at a critical moment. The Senate is headed towards a vote on a financial reform bill to put some checks and balances on Wall Street. The K Street lobby firms have spent hundreds of millions of dollars to gut the bill.
These are the same shady characters who pushed Congress to strip away the sensible financial regulations put in place after the crash of 1929, opening the door to the gambling insanity that caused the 2008 crash. Then they had the nerve to go back to Capitol Hill and demand trillions of taxpayer dollars to prop up the "too big too fail" banks. Today, pumped full of public money, these financial giants are now bigger than ever and handing out fat CEO paychecks.
With public anger at its height, this is the moment to shrink Wall Street and restore it to its proper role in serving the financial needs of small businesses and ordinary Americans. What we don't need is to "fix" Wall Street so that it can go back to business as usual. As David Korten puts it, policymakers need to be asking the fundamental question of: "How do we create a financial services sector that directs money where it is needed: toward creating living wage jobs that provide essential goods and services for all Americans in ways consistent with a healthy environment?"
The pending financial reform bill would get us only partway towards this goal. And it's too early to tell how successful the K Street lobby will be in blocking or gutting even these modest reforms.
Fortunately, public anger does seem to be having some impact in countering Wall Street's limitless lobbying resources. Some amendments to curb Wall Street excess appear to be gaining ground, while others are being defeated. Here are some highlights:
Financial Secrecy: Socialist Senator Bernie Sanders led the way on an amendment to force the Federal Reserve to reveal which banks received more than $2 trillion in emergency aid during the financial crisis (Sander's amendment passed 96-0). The legislation would also force most derivatives trading out of the shadows and onto open clearinghouses and exchanges.
Curbing the Casino: On the top of the K Street hit list is an amendment to force banks to spin off units that gamble in the dangerous derivatives that helped send the economy into a tailspin. And one of the great reforms of the Depression era is back on the table: the 1933 Glass-Steagall reform to separate banking functions between commercial and investment banking. It helped stabilize the U.S. financial system and keep alive thousands of small banks until its repeal in 1999. A transformed Wall Street would need to restore this sensible regulation.
Consumer protection: A new Consumer Financial Protection Agency would help protect ordinary Americans from the worst abuses of greedy financiers, including predatory lenders and fraudsters.
What's missing?
Once this round of financial reform is over, there will be much unfinished business to do if we are going to shut down the worst parts of Wall Street and transform the rest so that we can have a financial system that supports an economy centered around vibrant, green Main Streets.
Two key battles to come:
Breaking up the banks: Last week, an amendment to limit bank size, led by fair trade champion Senator Sherrod Brown, was defeated. As long as we have banks that are "too big too fail," taxpayers will always have to face the prospect of funding future bailouts. One way that people are already working to undercut the power of the big banks is through a campaign launched by Arianna Huffington and others to "Move Your Money." Thousands have answer the call to transfer their personal funds from Wall Street banks to local banks.
Taxing the speculators: There is growing momentum in the United States and around the world behind proposals to place tiny taxes (not more than 0.25%) on trades of derivatives, stocks, and currencies. This "financial speculation tax" would both put a damper on speculation and it would raise hundreds of billions of dollars that could go to green jobs, health care, and climate finance. My organization, the Institute for Policy Studies, has joined with allies around the world to press this issue at the upcoming G-20 meeting next month in Canada.
I'm looking forward to joining with the throngs on K Street, carrying our signs with the slogans: "Tax Speculators: Shut down the Wall Street Casino." This is the struggle of our lifetimes and only by bringing the message to the streets can we rein in the corporations and banks that threaten our democracy and our well being.
If you can't make it to the march, encourage a change in the Wall Street banks by supporting the Move Your Money movement
Protecting Social Security: It's a Flat Tax, Stupid!
Original Link: http://www.thiscantbehappening.net/node/52
By Dave Lindorff
Let me make a postulate: In a democracy, if there is a legislative proposal that would significantly benefit 80 percent of the population and cost them nothing, and that would be paid for by a insignificant tax on the richest 20 percent of the population, who themselves would receive some benefit from the added tax, that proposal would be overwhelmingly approved.
If you accept that postulate, you would have to conclude that the US is no longer a functioning democracy.
Look at the latest study out of the Senate Special Committee on Aging titled: “Social Security Modernization: Options to Address Solvency and Benefit Adequacy.”
That just-released report, prepared by committee staff with the help of the nonpartisan Congressional Research Service, lays out the shortfall facing Social Security as America’s Baby Boomer population begins to retire. It concludes that the alternative to raising the retirement age to 70 from the current 66, increasing the already onerous Social Security payroll tax by another 1% of income for both employees and employers, and reducing the annual cost-of-living adjustment for benefits by 1% (meaning retirees would fall further and further behind the cost of living each year), would simply be to eliminate the cap on the income that is subject to the Social Security tax.
Let me make that clear by putting it another way.
The committee report states that if the Social Security tax applied to all income instead of just the first $106,000, as things stand now, then Social Security would be completely funded as least through 2075. In fact, instead of a $5.3 trillion shortfall, there would be a 16% surplus! The report states that even if those wealthy folks who had their higher incomes taxed were able to collect higher benefits--as much as $6000 a month in current dollars--the added tax dollars raised would still ensure that the system would remain funded through 2075 and beyond.
Yet despite this obvious solution, we are continually warned in grave tones by the corporate media, by members of Congress, by President Obama and by Wall Street hucksters like Peter Peterson, that Social Security faces a crisis. We are continually told that benefits will have to be reduced, especially for current workers. We are continually told that the retirement age will have to be raised, so that people who work at strenuous, stressful, mind-numbing jobs will have to wait until they are 70 to slow down and spend time with their families.
How in hell would you explain this in a high school civics class?
Social Security, surely the single most popular program to come out of the New Deal in the 1930s, is currently the only thing keeping 44 percent of America’s elderly out of poverty. Nearly a third of its benefits are paid to poor children who have lost the wage earner in their family, to widows, to the permanently disabled and to the extreme elderly. Twenty-five percent of beneficiaries depend upon Social Security payments for 90% of their incomes, thanks to the failure of most employers to offer any kind of a pension to their workers. This is, in short, a critical program that protects our elderly, our disabled and our poor. And it ensures everyone a basic income in their old age--an average of $1300 per month for life--and with very little overhead.
Yet this program, currently underfunded, is in danger now.
It is threatened not because of demographic changes, but because of corporate lobbyists and ideologues who want it killed. And these twisted, greedy people are desperately trying to keep the vast majority of American people who are depending upon Social Security for their old age from doing the logical thing, which is to tax the rich and make them and their employers pay the same flat rate that they pay on their income--15%--so that the system will be secure indefinitely.
In a real, functioning democracy, this would be simple. No candidate for federal office would dare to suggest cutting benefits and raising Social Security taxes, and all would be calling for making the rich pay their fair share. This is, after all, not even about progressive taxation. It’s about a flat tax, long beloved on the right, on all income (and in fact, the committee was just talking about wages, not about investment income, which if subjected to the Social Security tax, would allow for a reduction in the current Social Security tax rate).
If we can’t get this simple thing right with the government we have, we need a new government.
If the shameless scare-mongering over Social Security isn’t a cause for rebellion, for a wholesale “throw the bastards out” rejection of the rat’s nest of corporate whores currently filling the halls of Congress, I don’t know what would be.
Then again, if the American public is so catatonic that it cannot recognize its own interest, maybe we should all just hang it up and admit that democracy in America is a lost cause.
By Dave Lindorff
Let me make a postulate: In a democracy, if there is a legislative proposal that would significantly benefit 80 percent of the population and cost them nothing, and that would be paid for by a insignificant tax on the richest 20 percent of the population, who themselves would receive some benefit from the added tax, that proposal would be overwhelmingly approved.
If you accept that postulate, you would have to conclude that the US is no longer a functioning democracy.
Look at the latest study out of the Senate Special Committee on Aging titled: “Social Security Modernization: Options to Address Solvency and Benefit Adequacy.”
That just-released report, prepared by committee staff with the help of the nonpartisan Congressional Research Service, lays out the shortfall facing Social Security as America’s Baby Boomer population begins to retire. It concludes that the alternative to raising the retirement age to 70 from the current 66, increasing the already onerous Social Security payroll tax by another 1% of income for both employees and employers, and reducing the annual cost-of-living adjustment for benefits by 1% (meaning retirees would fall further and further behind the cost of living each year), would simply be to eliminate the cap on the income that is subject to the Social Security tax.
Let me make that clear by putting it another way.
The committee report states that if the Social Security tax applied to all income instead of just the first $106,000, as things stand now, then Social Security would be completely funded as least through 2075. In fact, instead of a $5.3 trillion shortfall, there would be a 16% surplus! The report states that even if those wealthy folks who had their higher incomes taxed were able to collect higher benefits--as much as $6000 a month in current dollars--the added tax dollars raised would still ensure that the system would remain funded through 2075 and beyond.
Yet despite this obvious solution, we are continually warned in grave tones by the corporate media, by members of Congress, by President Obama and by Wall Street hucksters like Peter Peterson, that Social Security faces a crisis. We are continually told that benefits will have to be reduced, especially for current workers. We are continually told that the retirement age will have to be raised, so that people who work at strenuous, stressful, mind-numbing jobs will have to wait until they are 70 to slow down and spend time with their families.
How in hell would you explain this in a high school civics class?
Social Security, surely the single most popular program to come out of the New Deal in the 1930s, is currently the only thing keeping 44 percent of America’s elderly out of poverty. Nearly a third of its benefits are paid to poor children who have lost the wage earner in their family, to widows, to the permanently disabled and to the extreme elderly. Twenty-five percent of beneficiaries depend upon Social Security payments for 90% of their incomes, thanks to the failure of most employers to offer any kind of a pension to their workers. This is, in short, a critical program that protects our elderly, our disabled and our poor. And it ensures everyone a basic income in their old age--an average of $1300 per month for life--and with very little overhead.
Yet this program, currently underfunded, is in danger now.
It is threatened not because of demographic changes, but because of corporate lobbyists and ideologues who want it killed. And these twisted, greedy people are desperately trying to keep the vast majority of American people who are depending upon Social Security for their old age from doing the logical thing, which is to tax the rich and make them and their employers pay the same flat rate that they pay on their income--15%--so that the system will be secure indefinitely.
In a real, functioning democracy, this would be simple. No candidate for federal office would dare to suggest cutting benefits and raising Social Security taxes, and all would be calling for making the rich pay their fair share. This is, after all, not even about progressive taxation. It’s about a flat tax, long beloved on the right, on all income (and in fact, the committee was just talking about wages, not about investment income, which if subjected to the Social Security tax, would allow for a reduction in the current Social Security tax rate).
If we can’t get this simple thing right with the government we have, we need a new government.
If the shameless scare-mongering over Social Security isn’t a cause for rebellion, for a wholesale “throw the bastards out” rejection of the rat’s nest of corporate whores currently filling the halls of Congress, I don’t know what would be.
Then again, if the American public is so catatonic that it cannot recognize its own interest, maybe we should all just hang it up and admit that democracy in America is a lost cause.
Saturday, May 22, 2010
GOP: Recession's Foreclosure Victims "Want a Homeless Life"
Original Link: http://www.huffingtonpost.com/david-sirota/gop-those-thrown-out-of-t_b_577893.html
By David Sirota
NOTE: We'll be discussing this story on my AM760 morning show here in Colorado from 7-10am local time on Monday. Tune in on your radio dial or on the web at www.am760.net. - D
After their anti-tax zealotry left their city in the budgetary lurch, Colorado Springs Republicans have slashed their community's social services to the bone. We're talking big cuts to police, firefighters, park maintenance, public transportation - even turning off the city's streetlights (except, of course, in the wealthy areas!).
If this wasn't bad enough, the city council this week doubled down on its conservative extremism, officially opposing a congressional jobs bill that would provide roughly $43 million to the city in much-needed aid. Their rationale? They don't want to add to the federal deficit -- a seemingly principled position, until you realize the same city council has had nothing to say about a far bigger deficit culprit: the profligate defense spending that underwrites about a third of Colorado Springs.
You see, for both Springs' Republicans and the Republican Party nationally, federal deficit spending on huge defense contractors as AOK. But deficit spending on jobs for the unemployed or basic safety-net services for the very poor in a city that has experienced a big jump in homelessness? Well, Republicans are against that because, according to the Springs' Republican mayor, Lionel Rivera, poor people want to be poor.
That last part sounds like I'm extrapolating the mayor's comments, but unfortunately it's exactly what he said. Check this out from the Denver Post's Susan Greene today, quoting The Springs' mayor:
Thumbing his nose at federal assistance seems to abdicate his responsibilities to the Judd Hesses of his community and others who are down and out, living in tent colonies, arguably not because they want to.
"Some people want a homeless life," counters (Mayor) Rivera, a financial adviser. "Some people, they really do."
So there you have it: According to the conservative leader of one of the most conservative cities in America, those thrown out of their homes in this Great Recession actually want to be homeless, so we shouldn't spend money or -- gasp! -- dare to raise taxes on the super-rich to generate revenue for programs to help the homeless get back on their feet.
I'd say that's about as frank an admission about the Republican Party's callous attitude these days as any. Give the Springs' conservative leadership credit -- at least their honest in their heartlessness and their extremism.
By David Sirota
NOTE: We'll be discussing this story on my AM760 morning show here in Colorado from 7-10am local time on Monday. Tune in on your radio dial or on the web at www.am760.net. - D
After their anti-tax zealotry left their city in the budgetary lurch, Colorado Springs Republicans have slashed their community's social services to the bone. We're talking big cuts to police, firefighters, park maintenance, public transportation - even turning off the city's streetlights (except, of course, in the wealthy areas!).
If this wasn't bad enough, the city council this week doubled down on its conservative extremism, officially opposing a congressional jobs bill that would provide roughly $43 million to the city in much-needed aid. Their rationale? They don't want to add to the federal deficit -- a seemingly principled position, until you realize the same city council has had nothing to say about a far bigger deficit culprit: the profligate defense spending that underwrites about a third of Colorado Springs.
You see, for both Springs' Republicans and the Republican Party nationally, federal deficit spending on huge defense contractors as AOK. But deficit spending on jobs for the unemployed or basic safety-net services for the very poor in a city that has experienced a big jump in homelessness? Well, Republicans are against that because, according to the Springs' Republican mayor, Lionel Rivera, poor people want to be poor.
That last part sounds like I'm extrapolating the mayor's comments, but unfortunately it's exactly what he said. Check this out from the Denver Post's Susan Greene today, quoting The Springs' mayor:
Thumbing his nose at federal assistance seems to abdicate his responsibilities to the Judd Hesses of his community and others who are down and out, living in tent colonies, arguably not because they want to.
"Some people want a homeless life," counters (Mayor) Rivera, a financial adviser. "Some people, they really do."
So there you have it: According to the conservative leader of one of the most conservative cities in America, those thrown out of their homes in this Great Recession actually want to be homeless, so we shouldn't spend money or -- gasp! -- dare to raise taxes on the super-rich to generate revenue for programs to help the homeless get back on their feet.
I'd say that's about as frank an admission about the Republican Party's callous attitude these days as any. Give the Springs' conservative leadership credit -- at least their honest in their heartlessness and their extremism.
The Financial Crisis and Reform as a Game of 3 Card Monte
Original Link: http://www.huffingtonpost.com/danny-schechter/the-financial-crisis-and_b_581760.html
By Danny Schechter
We live in a three card monte world. Follow the money as it moves from one shell to another. Now guess where it is. Most of us don't know the hand can be quicker than the eye. That's why mostly everyone who has ever been suckered into playing ends up losing except those who are allowed to win to keep the hustle going. We miss the tricks of the trade even as we swear we know where the winning card or money or ball is.
Phase one:
Begin by showing the cards and explaining the game. Do a fair throw, mix the cards on the table slowly, and then turn over the winner. Do this a few times. Without any warning or any change in your pace or handling, do a fake throw and mix the cards slowly on the table. Point to the actual winner, and say something like "You saw it end up over here, right?" They will, of course, disagree with you. Turn it up.
On Tuesday night, Americans were watching the "super primary" in which campaigns in three states supposedly showed which was the 2010 election would go. In one a Tea Party backed candidate, Rand Paul, son of a well known Congressman prevailed, declaring "We will take our government back."
Presumably he meant from the politicians, and from the major parties, but not from Wall Street which at the very hour of his great triumph in the latest Kentucky Derby was burning the midnight oil, trashing what's left of financial reform especially the effort to regulate derivatives.
"It's a bad sign," bemoans the New York Times, "that there are so many unresolved issues...virtually every effort to weaken the bill involves watering down or undoing these reforms either explicitly or by or by adding fiendishly convoluted language that obscures the bill's purpose."
When was the last time you saw the word "FIENDISHLY" in the New York Times
Speaking of fiends, the Financial Times reports: "Obviously, the idea is to kill it when no one is looking, which of course serves the industry. If you kill it now (and that is warranted, this is a poorly conceived measure), then the powers that be might have to come up with something sensible. But that might inconvenience the industry. This little finesse is perfect for them."
Example: Writes Tiffiney Cheng of A New Way Forward: "The derivatives bill that Senator Dodd is trying to kill is the part that Joseph Stiglitz called the best part of the ENTIRE reform package-- the last single strongest thing in the bill, the only thing that would really require a change in the way the biggest banks operate, and stops subsidies for toxic bets.
Phase two: Immediately say something like "That's okay! You see, most people, if they see the card go over here," Pick up a loser and the winner in your right hand, and fake throw to the left as you say "here". "figure that as long as they don't bet on either of these cards," pick up the other loser under the winner you are now holding in your right hand. Apparently the winner is to the left and you are holding the two losers. As you say "either of these cards" turn over your right hand to show the lower card (the loser), fake throw to the middle, and then turn your right hand over again to show the same loser again, and drop it to the right. You have, apparently, tossed the winner to the left, and then shown the two losers to be in the middle and to the right.
"The thing is" pick up the middle card, the winner, with the right hand, and then the one to the left, which they think is the winner. "when they bet on this card, they lose." Turn over the right hand to show the loser. Fake throw to the left. "It's only when you bet on this card" flip the card in your right hand face up "or this one" use the card you're holding to flip over the loser on the table to the right "that this one's ever going to be the winner." Drop the card you're holding face up, and then turn over the winner
And as for action against financial fraud and crime, that's virtually non-existent even on the day that the newspaper of record ran another story on its front page about how Goldman Sachs defrauded its customers and clients.
Phase three: Pick up the winner in your right hand. Use it to point to the two losers which are face up on the table, saying something like "You don't want either of these two cards, you want this one." As you point to the losers, press the corner of the winner down against them, bending it.
William Black, the former bank regulator who has exposed control frauds, and who says they are at the center of the crisis, also says he is being ignored by most major US media outlets. After a story about him appeared in FAZ, a mainstream German publication, he wrote: "It's interesting that while the video of my House testimony about Lehman, the Fed, FRBNY, and the SEC went viral on the web, led to Bill Moyers scrambling to interview me, and led to this FAZ interview it has not led to any story in the major U.S. press other than Bill Moyers Journal."
I have had a similar experience promoting my film Plunder The Crime of Our Time.
As you say "this", hold the winner up so that the spectators see the bend edge on. Make sure they see it! Drop the winner face down, turn down the losers, and do the bend corner switch described above. After doing this, you have a loser to your left with a bent corner, which they think is the winner, the winner in the middle, and another loser to the right. Now, pick up the loser on the right with your right hand, and the one with the bent corner on the left with your left hand. Hold your right hand still as you sweep your left hand over and drop the card with the bent corner to the right. As you make this sweep, glance up at your audience and you should see everyone's head move as they follow the card they think is the money card.
Germany is outlawing naked short selling. China is warning of a global crisis that is "more serious that we thought." A Federal Reserve official says our economy will suffer for years.
"A top Federal Reserve official, Federal Reserve Bank of Cleveland President and CEO Sandra Pianalto, warned Tuesday that one consequence of the Great Recession will be a "new normal" in which Americans have lower expectations..."
May 19 (Bloomberg) -- The U.S. may fall victim to bond "vigilantes" targeting indebted nations from the U.K. to Japan in a potential second stage of the financial crisis, New York University professor Nouriel Roubini said...."
"History would suggest that maybe this crisis is not really over. We just finished the first stage and there's a risk of ending up in the second stage of this financial crisis."
"Address this audience member and ask them which card appears to be the winner. When they point to the one with the bent corner, say "That's absolutely correct, and that's the one most people would bet on." Turn it over".
Guess what? We all Lose!
By Danny Schechter
We live in a three card monte world. Follow the money as it moves from one shell to another. Now guess where it is. Most of us don't know the hand can be quicker than the eye. That's why mostly everyone who has ever been suckered into playing ends up losing except those who are allowed to win to keep the hustle going. We miss the tricks of the trade even as we swear we know where the winning card or money or ball is.
Phase one:
Begin by showing the cards and explaining the game. Do a fair throw, mix the cards on the table slowly, and then turn over the winner. Do this a few times. Without any warning or any change in your pace or handling, do a fake throw and mix the cards slowly on the table. Point to the actual winner, and say something like "You saw it end up over here, right?" They will, of course, disagree with you. Turn it up.
On Tuesday night, Americans were watching the "super primary" in which campaigns in three states supposedly showed which was the 2010 election would go. In one a Tea Party backed candidate, Rand Paul, son of a well known Congressman prevailed, declaring "We will take our government back."
Presumably he meant from the politicians, and from the major parties, but not from Wall Street which at the very hour of his great triumph in the latest Kentucky Derby was burning the midnight oil, trashing what's left of financial reform especially the effort to regulate derivatives.
"It's a bad sign," bemoans the New York Times, "that there are so many unresolved issues...virtually every effort to weaken the bill involves watering down or undoing these reforms either explicitly or by or by adding fiendishly convoluted language that obscures the bill's purpose."
When was the last time you saw the word "FIENDISHLY" in the New York Times
Speaking of fiends, the Financial Times reports: "Obviously, the idea is to kill it when no one is looking, which of course serves the industry. If you kill it now (and that is warranted, this is a poorly conceived measure), then the powers that be might have to come up with something sensible. But that might inconvenience the industry. This little finesse is perfect for them."
Example: Writes Tiffiney Cheng of A New Way Forward: "The derivatives bill that Senator Dodd is trying to kill is the part that Joseph Stiglitz called the best part of the ENTIRE reform package-- the last single strongest thing in the bill, the only thing that would really require a change in the way the biggest banks operate, and stops subsidies for toxic bets.
Phase two: Immediately say something like "That's okay! You see, most people, if they see the card go over here," Pick up a loser and the winner in your right hand, and fake throw to the left as you say "here". "figure that as long as they don't bet on either of these cards," pick up the other loser under the winner you are now holding in your right hand. Apparently the winner is to the left and you are holding the two losers. As you say "either of these cards" turn over your right hand to show the lower card (the loser), fake throw to the middle, and then turn your right hand over again to show the same loser again, and drop it to the right. You have, apparently, tossed the winner to the left, and then shown the two losers to be in the middle and to the right.
"The thing is" pick up the middle card, the winner, with the right hand, and then the one to the left, which they think is the winner. "when they bet on this card, they lose." Turn over the right hand to show the loser. Fake throw to the left. "It's only when you bet on this card" flip the card in your right hand face up "or this one" use the card you're holding to flip over the loser on the table to the right "that this one's ever going to be the winner." Drop the card you're holding face up, and then turn over the winner
And as for action against financial fraud and crime, that's virtually non-existent even on the day that the newspaper of record ran another story on its front page about how Goldman Sachs defrauded its customers and clients.
Phase three: Pick up the winner in your right hand. Use it to point to the two losers which are face up on the table, saying something like "You don't want either of these two cards, you want this one." As you point to the losers, press the corner of the winner down against them, bending it.
William Black, the former bank regulator who has exposed control frauds, and who says they are at the center of the crisis, also says he is being ignored by most major US media outlets. After a story about him appeared in FAZ, a mainstream German publication, he wrote: "It's interesting that while the video of my House testimony about Lehman, the Fed, FRBNY, and the SEC went viral on the web, led to Bill Moyers scrambling to interview me, and led to this FAZ interview it has not led to any story in the major U.S. press other than Bill Moyers Journal."
I have had a similar experience promoting my film Plunder The Crime of Our Time.
As you say "this", hold the winner up so that the spectators see the bend edge on. Make sure they see it! Drop the winner face down, turn down the losers, and do the bend corner switch described above. After doing this, you have a loser to your left with a bent corner, which they think is the winner, the winner in the middle, and another loser to the right. Now, pick up the loser on the right with your right hand, and the one with the bent corner on the left with your left hand. Hold your right hand still as you sweep your left hand over and drop the card with the bent corner to the right. As you make this sweep, glance up at your audience and you should see everyone's head move as they follow the card they think is the money card.
Germany is outlawing naked short selling. China is warning of a global crisis that is "more serious that we thought." A Federal Reserve official says our economy will suffer for years.
"A top Federal Reserve official, Federal Reserve Bank of Cleveland President and CEO Sandra Pianalto, warned Tuesday that one consequence of the Great Recession will be a "new normal" in which Americans have lower expectations..."
May 19 (Bloomberg) -- The U.S. may fall victim to bond "vigilantes" targeting indebted nations from the U.K. to Japan in a potential second stage of the financial crisis, New York University professor Nouriel Roubini said...."
"History would suggest that maybe this crisis is not really over. We just finished the first stage and there's a risk of ending up in the second stage of this financial crisis."
"Address this audience member and ask them which card appears to be the winner. When they point to the one with the bent corner, say "That's absolutely correct, and that's the one most people would bet on." Turn it over".
Guess what? We all Lose!
Kiss Your Middle Cl..ass Good-bye?
Original Link: http://blogs.alternet.org/speakeasy/2010/05/21/kiss-your-middle-cl-ass-good-bye/
By Les Leopold
Wake up Congress! The financial reform bill you just passed won’t protect us from economic chaos. Why? Because it fails to burst the mother of all bubbles — Wall Street itself.
Our outsized financial sector is a clear and present danger to all of us. This gigantic bubble, which bankers and politicians have been pumping up for the past 30 years, now casts a dark shadow over our economy and our political system. It has distorted our distribution of wealth, making a few people obscenely rich while shrinking what’s left of the middle class.
The financial industry bubble started expanding during the 1970s with the push for deregulation. It grew even faster in the 1980s after Reagan and Congress dramatically cut taxes on the super-rich. The wealthy had to do something with their excess money, so they turned to financial gambling. Wall Street grew and grew, rising from about 7 percent of all corporate profits after WWII to more than 30 percent today. Financial executives got exceedingly rich. As Simon Johnson and James Kwak point out in 13 Bankers, “From 1948 until 1979, average compensation in the banking sector was essentially the same as in the private sector overall; then it shot upward…until in 2007 the average bank employee earned twice as much as the average private sector worker.”
As I noted in my book The Looting of America, the ratio of compensation of the top 100 CEOs to the average worker shot up from 45 to 1 in 1970 to a whopping 1,723 in 2006. Did the execs — and the financial execs in particular — get that much smarter than the rest of us?
In a way they did. They got smarter at siphoning off the wealth from our economy while adding little to it. They learned how to leverage gigantic financial bonuses for themselves. And when their financial house of cards collapsed in 2008, they figured out how to get Congress to hand over more than $8 trillion in cash, asset guarantees and cheap federal loan facilities, a vast taxpayer-financed bailout. And so, just two years later, the Wall Street bubble is once again inflating — and gobbling up our nation’s wealth.
This week’s chilling Los Angeles Times article on our anemic recovery (”Consumer spending trend is a shaky foundation for economic recovery“) reveals the contours of our bubble economy:
Much of the new spending has come not from America’s broad middle class but from a small slice of affluent people at the top….
What’s more, some analysts calculate that another big chunk of the recent spending spurt has come from an even shakier source — delinquent homeowners who have more cash in their pockets because they’ve stopped making mortgage payments now that their houses are worth less than the loan amounts.
So apparently our economy is being rescued by 1) some of the same “affluent” people who caused the crash in the first place — and then benefited from a bailout financed by middle-class taxpayers; and 2) victims of the housing crash, who are now walking away from their homes with a few dollars in their pockets.
This week we learned that home foreclosures have reached a record high. Maybe we should break out the champagne, since our economy is apparently depending on these folks.
The Wall Street bubble and our pathetic recovery are the result of having forgotten everything we learned during the Great Depression. If we want a strong middle class society, we’ve got to impose steep income taxes on the super-rich and tightly constrain the financial sector. We’re not doing either of these things, and so we’re looking at a future of economic chaos.
It’s obvious why most Congress members choose to ignore the biggest bubble of all. Too many politicians rely on financial industry contributions to win office. Too many want jobs on Wall Street once they leave office. Most just don’t have the guts to take on the financial elites.
So how do we puncture the bubble and save our economy? In theory it’s not very hard. But in practice it will take a mass movement that aims at the right targets.
1. Break up the top twenty banks that are too big too fail. Entities like JP Morgan Chase, CitiGroup and Goldman Sachs are a danger to our democracy. Together these 20 big banks constitute an oligopoly with a stranglehold on our economy. They stifle competition and fix prices, they gamble against their clients, they siphon off our economic wealth. Perhaps most critically, they control economic policy. Today, the question on nearly every politician’s lips is, “How will the markets react?” Is that democracy?
2. Institute a financial transaction tax. You would think watching the Dow drop 1,000 points in a hour might create an “aha” moment for our leaders. If not, all they had to do is read the New York Times piece describing the life and times of high-speed traders. These people account for 40 to 60 percent of the volume in the stock market, making billions of trades each day. How long do they hold what they buy? No more than 11 seconds. No joke.
The big banking houses are into this game. When pressed they insist that high-speed trading is great because it brings “liquidity” into the market. But who really needs this liquidity? Certainly not your average mom and pop trader. Big bankers like fast trading and “liquidity” because it allows them to siphon even more of investors’ money into their pockets. What do we do to stop this vast flow of money to the ultra rich? Put a very small tax on each and every financial trade. The tax could exempt a certain amount so that it targets big bankers and fast traders, not any individual mom and pop traders who are still left in the market. Will it unemploy some day traders? It might. But perhaps our day traders should put their magnificent skills to work in the real economy — by, say, teaching people math and computer science. (Well maybe not, since the Wall Street-caused fiscal crisis is leading to tens of thousands of teacher lay-offs.) A financial transaction tax could generate about $100 billion a year to help fund or stimulate job creation and/or reduce our deficits. Why don’t we hear the deficit hawks screeching about this?
3. Pass a windfall profit tax of 75 percent on Wall Street bonuses and hedge fund incomes (no matter how the money is packaged and laundered). Wouldn’t just about any regular American like this idea? We bailed out Wall Street, and they used the money to pay themselves more than $150 billion in bonuses. And now, we want our money back. Does anyone really think that that the top 25 hedge fund managers who waltzed off with $25 billion last year actually deserve all that money? Can anyone think they’re worth as much as 658,000 entry-level teachers?
4. Raise the marginal tax rate on those earning $3 million or more per year to 70 percent. (This is quite conservative. The rate was 91 percent under the communistic Eisenhower administration.) If anyone has any real evidence, not faith-based theory, that multimillionaires — or our economy — would suffer under such a tax, please let me know. I haven’t seen it. Financial columnists like Andrew Ross Sorkin seem enthralled by the capacity of rich people and their fancy lawyers to circumvent such taxes and fees. Yes, they will find ways around stiff taxes, and yes, they are very clever. But where’s our outrage? Instead of admiring the sly tax evaders who buy congress members and capture regulators, we should be calling them on the carpet. They are not adding to the nation’s wealth, they are looting it.
5. Ban the sale of complex derivatives to all public entities and pension funds and ban public and pension investments in hedge funds. Congress may or may not succeed in passing new rules to curb dangerous derivatives and to bring a bit more transparency and controls to some of these instruments. But it’s a crime against humanity to allow any Wall Street firm to foist complex derivatives on public entities and pension funds.
When I wrote about how predatory bankers were ripping off five Wisconsin school districts, many readers argued that the school officials themselves were to blame — they should have known better. Now Capital News Service is reporting that public entities and pensions funds in at least 16 states are facing losses that may amount to over $25 billion. Wall Street got the fees, and the public got ripped off. Afterwards, we bailed out Wall Street, but not its victims. Just another case of public money being used to pump up the Wall Street bubble. A ban is the easiest way to bust this part of the bubble.
So who’s going to make sure we bust the mother of all bubbles? Nobody but us, the American people. The battle is just beginning. As Bob Kuttner points out (Presidency in Peril), it took at least seven years — and a lot of public pressure — for the New Deal to succeed in reforming the financial industry and taxing the super-rich. We are only in Year 2 of our meltdown. The financial elites are hanging on for now, but the American people are wising up to their scams and are hungry for retribution.
They are also hungry for jobs. And that is the key to our economic conundrum: Consumer spending by the wealthy and by people who have abandoned their mortgages cannot possibly create the 22 million new jobs we need to get near full employment. We need to build a vibrant, sustainable economy with a big middle class — and we can’t do that as long as Wall Street keeps siphoning away our wealth.
Right now the Tea Party is capturing much of people’s frustration and anger. Unfortunately, the Tea Party’s program of cutting taxes and attacking government regulations is a bad joke when it comes to Wall Street. It will only make it easier for the financial sector to inflate itself and further deflate the middle class. If we’re going to save ourselves, our families and our country from the ever expanding Wall Street bubble, the rest of us are going to have to get active and soon.
Pass out the pins.
By Les Leopold
Wake up Congress! The financial reform bill you just passed won’t protect us from economic chaos. Why? Because it fails to burst the mother of all bubbles — Wall Street itself.
Our outsized financial sector is a clear and present danger to all of us. This gigantic bubble, which bankers and politicians have been pumping up for the past 30 years, now casts a dark shadow over our economy and our political system. It has distorted our distribution of wealth, making a few people obscenely rich while shrinking what’s left of the middle class.
The financial industry bubble started expanding during the 1970s with the push for deregulation. It grew even faster in the 1980s after Reagan and Congress dramatically cut taxes on the super-rich. The wealthy had to do something with their excess money, so they turned to financial gambling. Wall Street grew and grew, rising from about 7 percent of all corporate profits after WWII to more than 30 percent today. Financial executives got exceedingly rich. As Simon Johnson and James Kwak point out in 13 Bankers, “From 1948 until 1979, average compensation in the banking sector was essentially the same as in the private sector overall; then it shot upward…until in 2007 the average bank employee earned twice as much as the average private sector worker.”
As I noted in my book The Looting of America, the ratio of compensation of the top 100 CEOs to the average worker shot up from 45 to 1 in 1970 to a whopping 1,723 in 2006. Did the execs — and the financial execs in particular — get that much smarter than the rest of us?
In a way they did. They got smarter at siphoning off the wealth from our economy while adding little to it. They learned how to leverage gigantic financial bonuses for themselves. And when their financial house of cards collapsed in 2008, they figured out how to get Congress to hand over more than $8 trillion in cash, asset guarantees and cheap federal loan facilities, a vast taxpayer-financed bailout. And so, just two years later, the Wall Street bubble is once again inflating — and gobbling up our nation’s wealth.
This week’s chilling Los Angeles Times article on our anemic recovery (”Consumer spending trend is a shaky foundation for economic recovery“) reveals the contours of our bubble economy:
Much of the new spending has come not from America’s broad middle class but from a small slice of affluent people at the top….
What’s more, some analysts calculate that another big chunk of the recent spending spurt has come from an even shakier source — delinquent homeowners who have more cash in their pockets because they’ve stopped making mortgage payments now that their houses are worth less than the loan amounts.
So apparently our economy is being rescued by 1) some of the same “affluent” people who caused the crash in the first place — and then benefited from a bailout financed by middle-class taxpayers; and 2) victims of the housing crash, who are now walking away from their homes with a few dollars in their pockets.
This week we learned that home foreclosures have reached a record high. Maybe we should break out the champagne, since our economy is apparently depending on these folks.
The Wall Street bubble and our pathetic recovery are the result of having forgotten everything we learned during the Great Depression. If we want a strong middle class society, we’ve got to impose steep income taxes on the super-rich and tightly constrain the financial sector. We’re not doing either of these things, and so we’re looking at a future of economic chaos.
It’s obvious why most Congress members choose to ignore the biggest bubble of all. Too many politicians rely on financial industry contributions to win office. Too many want jobs on Wall Street once they leave office. Most just don’t have the guts to take on the financial elites.
So how do we puncture the bubble and save our economy? In theory it’s not very hard. But in practice it will take a mass movement that aims at the right targets.
1. Break up the top twenty banks that are too big too fail. Entities like JP Morgan Chase, CitiGroup and Goldman Sachs are a danger to our democracy. Together these 20 big banks constitute an oligopoly with a stranglehold on our economy. They stifle competition and fix prices, they gamble against their clients, they siphon off our economic wealth. Perhaps most critically, they control economic policy. Today, the question on nearly every politician’s lips is, “How will the markets react?” Is that democracy?
2. Institute a financial transaction tax. You would think watching the Dow drop 1,000 points in a hour might create an “aha” moment for our leaders. If not, all they had to do is read the New York Times piece describing the life and times of high-speed traders. These people account for 40 to 60 percent of the volume in the stock market, making billions of trades each day. How long do they hold what they buy? No more than 11 seconds. No joke.
The big banking houses are into this game. When pressed they insist that high-speed trading is great because it brings “liquidity” into the market. But who really needs this liquidity? Certainly not your average mom and pop trader. Big bankers like fast trading and “liquidity” because it allows them to siphon even more of investors’ money into their pockets. What do we do to stop this vast flow of money to the ultra rich? Put a very small tax on each and every financial trade. The tax could exempt a certain amount so that it targets big bankers and fast traders, not any individual mom and pop traders who are still left in the market. Will it unemploy some day traders? It might. But perhaps our day traders should put their magnificent skills to work in the real economy — by, say, teaching people math and computer science. (Well maybe not, since the Wall Street-caused fiscal crisis is leading to tens of thousands of teacher lay-offs.) A financial transaction tax could generate about $100 billion a year to help fund or stimulate job creation and/or reduce our deficits. Why don’t we hear the deficit hawks screeching about this?
3. Pass a windfall profit tax of 75 percent on Wall Street bonuses and hedge fund incomes (no matter how the money is packaged and laundered). Wouldn’t just about any regular American like this idea? We bailed out Wall Street, and they used the money to pay themselves more than $150 billion in bonuses. And now, we want our money back. Does anyone really think that that the top 25 hedge fund managers who waltzed off with $25 billion last year actually deserve all that money? Can anyone think they’re worth as much as 658,000 entry-level teachers?
4. Raise the marginal tax rate on those earning $3 million or more per year to 70 percent. (This is quite conservative. The rate was 91 percent under the communistic Eisenhower administration.) If anyone has any real evidence, not faith-based theory, that multimillionaires — or our economy — would suffer under such a tax, please let me know. I haven’t seen it. Financial columnists like Andrew Ross Sorkin seem enthralled by the capacity of rich people and their fancy lawyers to circumvent such taxes and fees. Yes, they will find ways around stiff taxes, and yes, they are very clever. But where’s our outrage? Instead of admiring the sly tax evaders who buy congress members and capture regulators, we should be calling them on the carpet. They are not adding to the nation’s wealth, they are looting it.
5. Ban the sale of complex derivatives to all public entities and pension funds and ban public and pension investments in hedge funds. Congress may or may not succeed in passing new rules to curb dangerous derivatives and to bring a bit more transparency and controls to some of these instruments. But it’s a crime against humanity to allow any Wall Street firm to foist complex derivatives on public entities and pension funds.
When I wrote about how predatory bankers were ripping off five Wisconsin school districts, many readers argued that the school officials themselves were to blame — they should have known better. Now Capital News Service is reporting that public entities and pensions funds in at least 16 states are facing losses that may amount to over $25 billion. Wall Street got the fees, and the public got ripped off. Afterwards, we bailed out Wall Street, but not its victims. Just another case of public money being used to pump up the Wall Street bubble. A ban is the easiest way to bust this part of the bubble.
So who’s going to make sure we bust the mother of all bubbles? Nobody but us, the American people. The battle is just beginning. As Bob Kuttner points out (Presidency in Peril), it took at least seven years — and a lot of public pressure — for the New Deal to succeed in reforming the financial industry and taxing the super-rich. We are only in Year 2 of our meltdown. The financial elites are hanging on for now, but the American people are wising up to their scams and are hungry for retribution.
They are also hungry for jobs. And that is the key to our economic conundrum: Consumer spending by the wealthy and by people who have abandoned their mortgages cannot possibly create the 22 million new jobs we need to get near full employment. We need to build a vibrant, sustainable economy with a big middle class — and we can’t do that as long as Wall Street keeps siphoning away our wealth.
Right now the Tea Party is capturing much of people’s frustration and anger. Unfortunately, the Tea Party’s program of cutting taxes and attacking government regulations is a bad joke when it comes to Wall Street. It will only make it easier for the financial sector to inflate itself and further deflate the middle class. If we’re going to save ourselves, our families and our country from the ever expanding Wall Street bubble, the rest of us are going to have to get active and soon.
Pass out the pins.
Friday, May 21, 2010
Health Insurance Companies Try to Shape Rules
Original Link: http://www.nytimes.com/2010/05/16/health/policy/16health.html
By ROBERT PEAR
Health insurance companies are lobbying federal and state officials in an effort to ward off strict regulation of premiums and profits under the new health care law.
The effort is, in some ways, a continuation of the battle over health care that consumed Congress last year.
Insurance lobbyists are trying to shape regulations that will define “unreasonable” premium increases and require them to pay rebates to consumers if the companies do not spend enough on patient care.
For their part, consumer groups say they worry that their legislative victories could be undone or undercut by the rules being written by the federal government and the states.
The health care overhaul provides a classic example of how the impact of a law depends on regulations needed to interpret it. The rules deal with relatively technical questions but go to the heart of the law, pushed through Congress by President Obama and Democratic leaders with no Republican support.
More than 40 provisions of the law require or permit agencies to issue rules. Lobbyists are focusing on two whose stated purpose is to ensure that consumers “get value for their dollars.”
One bars insurers from carrying out an “unreasonable premium increase” unless they first submit justifications to federal and state officials. Congress did not say what is unreasonable, leaving that to rule writers.
Another provision, effective Jan. 1, requires that a minimum percentage of premium dollars be spent on true medical costs related to patient care — not retained by insurers as profit or used to cover administrative expenses. Insurers must refund money to consumers if they do not meet the standards, known as minimum loss ratios.
Michael W. Fedyna, vice president and chief actuary of Aetna, underlined the importance of this issue, saying no other aspect of the law would be so “influential in shaping the future of the health care marketplace in the United States.”
The definition of medical loss ratio will “determine the willingness of health plans to enter new markets and remain in existing markets,” he said.
Senator John D. Rockefeller IV, Democrat of West Virginia, said the definition would be just as important for consumers and small businesses.
“The health insurance industry has shifted its focus from opposing health care reform to influencing how the new law will be implemented,” he said.
The law requires insurers to spend a minimum percentage of premiums on health care services and “activities that improve health care quality” for patients.
Insurers are eager to classify as many expenses as possible in these categories, so they can meet the new test and avoid paying rebates to policyholders.
Thus, insurers are lobbying for a broad definition of quality improvement activities that would allow them to count spending on health information technology, nurse hot lines and efforts to prevent fraud. They also want to include the cost of reviewing care by doctors and hospitals, to determine if it was appropriate and followed clinical protocols.
Some consumer advocates, like Carmen L. Balber of Consumer Watchdog, favor a strict, narrow definition of quality improvement activities, limited to those that produce measurable benefits to individual patients.
Alissa Fox, a senior vice president of the Blue Cross and Blue Shield Association, said that if the definition is too narrow, “health plans will come under enormous pressure to cut back quality improvement activities, including highly effective programs to reduce hospital infection rates.”
But Charles N. Kahn III, president of the Federation of American Hospitals, a trade group, said he feared that the quality improvement category would become a “catchall for a wide variety of expenses not directly related to patient care.”
Under the new law, insurers in the large group market are generally supposed to spend 85 percent of customers’ premiums on “clinical services” and quality-enhancing activities. The minimum is 80 percent for coverage sold to individuals and small groups.
Insurers and insurance regulators say that some companies will be unable or unwilling to meet the new standards.
By ROBERT PEAR
Health insurance companies are lobbying federal and state officials in an effort to ward off strict regulation of premiums and profits under the new health care law.
The effort is, in some ways, a continuation of the battle over health care that consumed Congress last year.
Insurance lobbyists are trying to shape regulations that will define “unreasonable” premium increases and require them to pay rebates to consumers if the companies do not spend enough on patient care.
For their part, consumer groups say they worry that their legislative victories could be undone or undercut by the rules being written by the federal government and the states.
The health care overhaul provides a classic example of how the impact of a law depends on regulations needed to interpret it. The rules deal with relatively technical questions but go to the heart of the law, pushed through Congress by President Obama and Democratic leaders with no Republican support.
More than 40 provisions of the law require or permit agencies to issue rules. Lobbyists are focusing on two whose stated purpose is to ensure that consumers “get value for their dollars.”
One bars insurers from carrying out an “unreasonable premium increase” unless they first submit justifications to federal and state officials. Congress did not say what is unreasonable, leaving that to rule writers.
Another provision, effective Jan. 1, requires that a minimum percentage of premium dollars be spent on true medical costs related to patient care — not retained by insurers as profit or used to cover administrative expenses. Insurers must refund money to consumers if they do not meet the standards, known as minimum loss ratios.
Michael W. Fedyna, vice president and chief actuary of Aetna, underlined the importance of this issue, saying no other aspect of the law would be so “influential in shaping the future of the health care marketplace in the United States.”
The definition of medical loss ratio will “determine the willingness of health plans to enter new markets and remain in existing markets,” he said.
Senator John D. Rockefeller IV, Democrat of West Virginia, said the definition would be just as important for consumers and small businesses.
“The health insurance industry has shifted its focus from opposing health care reform to influencing how the new law will be implemented,” he said.
The law requires insurers to spend a minimum percentage of premiums on health care services and “activities that improve health care quality” for patients.
Insurers are eager to classify as many expenses as possible in these categories, so they can meet the new test and avoid paying rebates to policyholders.
Thus, insurers are lobbying for a broad definition of quality improvement activities that would allow them to count spending on health information technology, nurse hot lines and efforts to prevent fraud. They also want to include the cost of reviewing care by doctors and hospitals, to determine if it was appropriate and followed clinical protocols.
Some consumer advocates, like Carmen L. Balber of Consumer Watchdog, favor a strict, narrow definition of quality improvement activities, limited to those that produce measurable benefits to individual patients.
Alissa Fox, a senior vice president of the Blue Cross and Blue Shield Association, said that if the definition is too narrow, “health plans will come under enormous pressure to cut back quality improvement activities, including highly effective programs to reduce hospital infection rates.”
But Charles N. Kahn III, president of the Federation of American Hospitals, a trade group, said he feared that the quality improvement category would become a “catchall for a wide variety of expenses not directly related to patient care.”
Under the new law, insurers in the large group market are generally supposed to spend 85 percent of customers’ premiums on “clinical services” and quality-enhancing activities. The minimum is 80 percent for coverage sold to individuals and small groups.
Insurers and insurance regulators say that some companies will be unable or unwilling to meet the new standards.
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